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_____________________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 10-Q
______________________________
(Mark One)
Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2022
or
Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________ to _________
Commission File Number: 001-39095
______________________________
BRP GROUP, INC.
(Exact name of registrant as specified in its charter)
______________________________
Delaware
  https://cdn.kscope.io/846275f0fc4362073d80344cf3be18d6-brp-20220630_g1.jpg
61-1937225
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
4211 W. Boy Scout Blvd., Suite 800, Tampa, Florida 33607
(Address of principal executive offices) (Zip Code)
(866) 279-0698
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01 per shareBRPNasdaq Global Select Market
______________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filero
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No  x
As of August 3, 2022, there were 60,245,239 shares of Class A common stock outstanding and 55,471,865 shares of Class B common stock outstanding.



BRP GROUP, INC.
INDEX
Page




Note Regarding Forward-Looking Statements
We have made statements in this report, including matters discussed under Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Part II, Item 1. Legal Proceedings, Part II, Item 1A. Risk Factors and in other sections of this report, that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under Part II, Item 1A. Risk Factors. You should specifically consider the numerous risks outlined under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K filed with the SEC on March 1, 2022.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this report to conform our prior statements to actual results or revised expectations, except as required by law.



Commonly Used Defined Terms
The following terms have the following meanings throughout this Quarterly Report on Form 10-Q unless the context indicates or requires otherwise:
Amended LLC AgreementThird Amended and Restated Limited Liability Company Agreement of Baldwin Risk Partners, LLC, as amended
Book of BusinessInsurance policies bound by us on behalf of our Clients
bpsBasis points
ClientsOur insureds
ColleaguesOur employees
Exchange ActSecurities Exchange Act of 1934, as amended
Insurance Company PartnersInsurance companies with which we have a contractual relationship
JPM Credit AgreementCredit Agreement, dated as of October 14, 2020, between Baldwin Risk Partners, LLC, as borrower, JPMorgan Chase Bank, N.A., as the Administrative Agent, the Guarantors party thereto, the Lenders party thereto and the Issuing Lenders party thereto, as amended by the Amendment No. 1 to Credit Agreement dated as of May 7, 2021, Amendment No. 2 to Credit Agreement dated as of June 2, 2021, Amendment No. 3 to Credit Agreement dated as of August 6, 2021, Amendment No. 4 to Credit Agreement dated as of December 16, 2021 and Amendment No. 5 to Credit Agreement dated as of March 28, 2022
LIBORLondon Interbank Offered Rate
MGAManaging General Agent
MSIMillennial Specialty Insurance, a 2019 Partner
Operating GroupsOur reportable segments
PartnersCompanies that we have acquired, or in the case of asset acquisitions, the producers
PartnershipsStrategic acquisitions made by the Company
Risk AdvisorsOur producers
SECU.S. Securities and Exchange Commission
Securities ActSecurities Act of 1933, as amended
SOFRSecured Overnight Financing Rate
Tax Receivable AgreementTax Receivable Agreement between BRP Group, Inc. and the holders of LLC Units in Baldwin Risk Partners, LLC entered into on October 28, 2019



PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BRP GROUP, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share data)June 30, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$183,402 $138,292 
Restricted cash100,529 89,445 
Premiums, commissions and fees receivable, net427,351 340,837 
Prepaid expenses and other current assets13,533 8,151 
Due from related parties1,715 1,668 
Total current assets726,530 578,393 
Property and equipment, net22,756 17,474 
Right-of-use assets86,374 81,646 
Other assets34,316 25,586 
Intangible assets, net1,125,388 944,467 
Goodwill1,415,281 1,228,741 
Total assets$3,410,645 $2,876,307 
Liabilities, Mezzanine Equity and Stockholders Equity
Current liabilities:
Premiums payable to insurance companies$366,217 $310,045 
Producer commissions payable56,138 41,833 
Accrued expenses and other current liabilities104,330 92,223 
Related party notes payable 61,500 
Current portion of contingent earnout liabilities43,615 35,088 
Total current liabilities570,300 540,689 
Revolving line of credit525,000 35,000 
Long-term debt, less current portion812,080 814,614 
Contingent earnout liabilities, less current portion166,381 223,501 
Operating lease liabilities, less current portion76,999 71,357 
Other liabilities 3,590 
Total liabilities2,150,760 1,688,751 
Commitments and contingencies (Note 14)
Mezzanine equity:
Redeemable noncontrolling interest350 269 
Stockholders’ equity:
Class A common stock, par value $0.01 per share, 300,000,000 shares authorized; 60,122,842 and 58,602,859 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
601 586 
Class B common stock, par value $0.0001 per share, 100,000,000 shares authorized; 55,442,435 and 56,338,051 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
6 6 
Additional paid-in capital683,331 663,002 
Accumulated deficit(23,481)(54,992)
Stockholder notes receivable(131)(219)
Total stockholders’ equity attributable to BRP Group, Inc.660,326 608,383 
Noncontrolling interest599,209 578,904 
Total stockholders’ equity1,259,535 1,187,287 
Total liabilities, mezzanine equity and stockholders’ equity$3,410,645 $2,876,307 
See accompanying Notes to Condensed Consolidated Financial Statements. 5


BRP GROUP, INC.
Condensed Consolidated Balance Sheets (Continued)
(Unaudited)
The following table presents the assets and liabilities of the Company’s consolidated variable interest entities, which are included on the condensed consolidated balance sheets above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated variable interest entities.
(in thousands)June 30, 2022December 31, 2021
Assets of Consolidated Variable Interest Entities That Can Only be Used to Settle the Obligations of Consolidated Variable Interest Entities:
Cash and cash equivalents$195 $303 
Premiums, commissions and fees receivable, net337 272 
Total current assets532 575 
Property and equipment, net12 15 
Other assets5 5 
Total assets$549 $595 
Liabilities of Consolidated Variable Interest Entities for Which Creditors Do Not Have Recourse to the Company:
Premiums payable to insurance companies$39 $ 
Producer commissions payable46 41 
Accrued expenses and other current liabilities11 4 
Total liabilities$96 $45 

































See accompanying Notes to Condensed Consolidated Financial Statements. 6


BRP GROUP, INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
For the Three Months
 Ended June 30,
For the Six Months
 Ended June 30,
(in thousands, except share and per share data)2022202120222021
Revenues:
Commissions and fees
$232,460 $119,706 $475,308 $272,534 
Operating expenses:
Commissions, employee compensation and benefits
172,848 89,065 326,598 178,440 
Other operating expenses
40,770 19,537 77,212 36,412 
Amortization expense
19,170 10,742 36,732 21,279 
Change in fair value of contingent consideration
(26,872)13,325 (32,504)11,822 
Depreciation expense
1,105 573 2,093 1,167 
Total operating expenses
207,021 133,242 410,131 249,120 
Operating income (loss)25,439 (13,536)65,177 23,414 
Other income (expense):
Interest expense, net(14,632)(5,848)(24,982)(11,491)
Other income (expense), net5,786 (1,057)21,237 (1,057)
Total other expense(8,846)(6,905)(3,745)(12,548)
Net income (loss)16,593 (20,441)61,432 10,866 
Less: net income (loss) attributable to noncontrolling interests7,951 (10,348)29,921 5,653 
Net income (loss) attributable to BRP Group, Inc.$8,642 $(10,093)$31,511 $5,213 
Comprehensive income (loss)$16,593 $(20,441)$61,432 $10,866 
Comprehensive income (loss) attributable to noncontrolling interests7,951 (10,348)29,921 5,653 
Comprehensive income (loss) attributable to BRP Group, Inc.8,642 (10,093)31,511 5,213 
Basic earnings (loss) per share$0.15 $(0.23)$0.56 $0.12 
Diluted earnings (loss) per share$0.14 $(0.23)$0.53 $0.11 
Weighted-average shares of Class A common stock outstanding - basic56,270,49144,671,30855,996,66844,464,312
Weighted-average shares of Class A common stock outstanding - diluted59,858,81644,671,30859,354,16846,160,474








See accompanying Notes to Condensed Consolidated Financial Statements. 7


BRP GROUP, INC.
Condensed Consolidated Statements of Stockholders’ Equity and Mezzanine Equity
(Unaudited)
For the Three Months Ended June 30, 2022
Stockholders Equity
Mezzanine Equity
Class A Common StockClass B Common StockAdditional Paid-in CapitalAccumulated DeficitStockholder Notes ReceivableNon-controlling InterestTotalRedeemable Non-controlling Interest
(in thousands, except share data)SharesAmountSharesAmount
Balance at March 31, 202258,790,758$588 56,268,051$6 $671,143 $(32,123)$(175)$599,308 $1,238,747 $288 
Net income— — — — — 8,642 — 7,889 16,531 62 
Equity issued in business combinations97,1561 — — (4,265)— — 6,134 1,870 — 
Share-based compensation, net of forfeitures430,7414 — — 7,109 — — (449)6,664 — 
Redemption and cancellation of Class B common stock804,187 8 (825,616)— 9,344 — — (9,352)— — 
Tax distributions to BRP LLC members— — — — — — — (4,321)(4,321)— 
Repayment of stockholder notes receivable— — — — — — 44 — 44 — 
Balance at June 30, 202260,122,842$601 55,442,435$6 $683,331 $(23,481)$(131)$599,209 $1,259,535 $350 

For the Six Months Ended June 30, 2022
Stockholders Equity
Mezzanine Equity
Class A Common StockClass B Common StockAdditional Paid-in CapitalAccumulated DeficitStockholder Notes ReceivableNon-controlling InterestTotalRedeemable Non-controlling Interest
(in thousands, except share data)SharesAmountSharesAmount
Balance at December 31, 202158,602,859$586 56,338,051$6 $663,002 $(54,992)$(219)$578,904 $1,187,287 $269 
Net income— — — — — 31,511 — 29,840 61,351 81 
Equity issued in business combinations97,1561 — — (4,265)— — 6,134 1,870 — 
Share-based compensation, net of forfeitures548,6405 — — 14,617 — — (1,362)13,260 — 
Redemption and cancellation of Class B common stock874,187 9 (895,616)— 9,977 — — (9,986)— — 
Tax distributions to BRP LLC members— — — — — — — (4,321)(4,321)— 
Repayment of stockholder notes receivable— — — — — — 88 — 88 — 
Balance at June 30, 202260,122,842$601 55,442,435$6 $683,331 $(23,481)$(131)$599,209 $1,259,535 $350 











See accompanying Notes to Condensed Consolidated Financial Statements. 8





BRP GROUP, INC.
Condensed Consolidated Statements of Stockholders’ Equity and Mezzanine Equity (Continued)
(Unaudited)
For the Three Months Ended June 30, 2021
Stockholders Equity
Mezzanine Equity
Class A Common StockClass B Common StockAdditional Paid-in CapitalAccumulated DeficitStockholder Notes ReceivableNon-controlling InterestTotalRedeemable Non-controlling Interest
(in thousands, except share data)SharesAmountSharesAmount
Balance at March 31, 202145,925,711$460 49,715,644$5 $398,885 $(9,040)$(349)$416,253 $806,214 $125 
Net income (loss)— — — — — (10,093)— (10,396)(20,489)48 
Equity issued in business combinations62,152  — (1,773)— — 3,028 1,255 — 
Share-based compensation, net of forfeitures455,946 5 — — 5,734 — — (232)5,507 — 
Redemption of Class B common stock139,773 1 (139,773)— 1,179 — — (1,180) — 
Repayment of stockholder notes receivable— — — — — — 43 — 43 — 
Balance at June 30, 202146,583,582$466 49,575,871$5 $404,025 $(19,133)$(306)$407,473 $792,530 $173 

For the Six Months Ended June 30, 2021
Stockholders Equity
Mezzanine Equity
Class A Common StockClass B Common StockAdditional Paid-in CapitalAccumulated DeficitStockholder Notes ReceivableNon-controlling InterestTotalRedeemable Non-controlling Interest
(in thousands, except share data)SharesAmountSharesAmount
Balance at December 31, 202044,953,166$450 49,828,383$5 $392,139 $(24,346)$(465)$402,087 $769,870 $98 
Net income— — — — — 5,213 — 5,578 10,791 75 
Equity issued in business combinations216,284 2 — 1,859 — — 1,853 3,714 — 
Share-based compensation, net of forfeitures1,161,620 12 — — 7,979 — — 5 7,996 — 
Redemption of Class B common stock252,512 2 (252,512)— 2,048 — — (2,050) — 
Repayment of stockholder notes receivable— — — — — — 159 — 159 — 
Balance at June 30, 202146,583,582$466 49,575,871$5 $404,025 $(19,133)$(306)$407,473 $792,530 $173 





See accompanying Notes to Condensed Consolidated Financial Statements. 9


BRP GROUP, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months
 Ended June 30,
(in thousands)20222021
Cash flows from operating activities:
Net income$61,432 $10,866 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization
38,825 22,446 
Change in fair value of contingent consideration(32,504)11,822 
Share-based compensation expense17,677 8,087 
Amortization of deferred financing costs
2,474 1,443 
Change in fair value of interest rate caps(21,269)825 
Other fair value adjustments 94 
Payment of contingent earnout consideration in excess of purchase price accrual(47,803)(602)
Changes in operating assets and liabilities, net of effect of acquisitions:
Premiums, commissions and fees receivable, net(78,365)(52,357)
Prepaid expenses and other current assets(10,061)(2,085)
Due to/from related parties(47)84 
Right-of-use assets(4,116)(57,816)
Accounts payable, accrued expenses and other current liabilities63,763 47,436 
Operating lease liabilities5,353 59,176 
Net cash provided by (used in) operating activities(4,641)49,419 
Cash flows from investing activities:
Cash consideration paid for business combinations, net of cash received(377,299)(24,276)
Cash consideration paid for asset acquisitions, net of cash received(3,356)(1,575)
Capital expenditures(8,565)(1,756)
Investment in business venture(675) 
Net cash used in investing activities(389,895)(27,607)
Cash flows from financing activities:
Payment of contingent earnout consideration up to amount of purchase price accrual(43,184)(828)
Proceeds from revolving line of credit
495,000 20,000 
Payments on revolving line of credit(5,000) 
Proceeds from long-term debt 97,914 
Payments on long-term debt
(4,254)(1,000)
Payments of debt issuance costs(1,565)(634)
Proceeds from the sale of interest rate caps19,038  
Tax distributions to BRP LLC members(9,393) 
Purchase of interest rate caps (3,461)
Proceeds from repayment of stockholder notes receivable88 159 
Net cash provided by financing activities450,730 112,150 
Net increase in cash and cash equivalents and restricted cash56,194 133,962 
Cash and cash equivalents and restricted cash at beginning of period
227,737 142,022 
Cash and cash equivalents and restricted cash at end of period
$283,931 $275,984 




See accompanying Notes to Condensed Consolidated Financial Statements. 10





BRP GROUP, INC.
Condensed Consolidated Statements of Cash Flows (Continued)
(Unaudited)
For the Six Months
 Ended June 30,
(in thousands)20222021
Supplemental schedule of cash flow information:
Cash paid during the period for interest$22,001 $11,024 
Cash paid during the period for taxes864  
Disclosure of non-cash investing and financing activities:
Contingent earnout liabilities recognized in business combinations$13,398 $7,764 
Right-of-use assets obtained in exchange for operating lease liabilities8,010 5,766 
Right-of-use assets increased through lease modifications and reassessments4,440 1,054 
Increase in goodwill resulting from measurement period adjustments for prior year business combinations3,499  
Equity issued in business combinations1,870 3,714 
Capital expenditures incurred but not yet paid923 33 
Noncash debt issuance costs incurred 3,823 






See accompanying Notes to Condensed Consolidated Financial Statements. 11


BRP GROUP, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Business and Basis of Presentation
BRP Group, Inc. (“BRP Group” or the “Company”) was incorporated in the state of Delaware on July 1, 2019. BRP Group is a diversified insurance agency and services organization that markets and sells insurance products and services to its customers throughout the U.S. A significant portion of the Company’s business is concentrated in the Southeastern U.S. with several other regional concentrations. BRP Group and its subsidiaries operate through four Operating Groups, including Middle Market, Specialty, MainStreet, and Medicare, which are discussed in more detail in Note 15.
Principles of Consolidation
The consolidated financial statements include the accounts of BRP Group and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
As the sole manager of Baldwin Risk Partners, LLC (“BRP”), BRP Group operates and controls all the business and affairs of BRP, and has the sole voting interest in, and controls the management of, BRP. Accordingly, BRP Group consolidates BRP in its consolidated financial statements, resulting in a noncontrolling interest related to the membership interests of BRP (the “LLC Units”) held by BRP’s LLC members in its consolidated financial statements.
The Company has prepared these condensed consolidated financial statements in accordance with Accounting Standards Codification (“ASC”) Topic 810, Consolidation (“Topic 810”). Topic 810 requires that if an enterprise is the primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity should be included in the consolidated financial statements of the enterprise. The Company has recognized certain entities as variable interest entities of which the Company is the primary beneficiary and has included the accounts of these entities in the consolidated financial statements. Refer to Note 3 for additional information regarding the Company’s variable interest entities.
Topic 810 also requires that the equity of a noncontrolling interest shall be reported on the condensed consolidated balance sheets within total equity of the Company. Certain redeemable noncontrolling interests are reported on the condensed consolidated balance sheets as mezzanine equity. Topic 810 also requires revenues, expenses, gains, losses, net income or loss, and other comprehensive income or loss to be reported in the consolidated financial statements at consolidated amounts, which include amounts attributable to the owners of the parent and the noncontrolling interests.
Unaudited Interim Financial Reporting
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all the information and related notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting of recurring accruals, considered necessary for fair statement have been included. The accompanying balance sheet for the year ended December 31, 2021 was derived from audited financial statements, but does not include all disclosures required by GAAP. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2022.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates underlying the accompanying consolidated financial statements include the application of guidance for revenue recognition, including determination of allowances for estimated policy cancellations; the determination of fair value in relation to business combinations, purchase price allocation and valuation of intangible assets and contingent consideration; impairment of long-lived assets including goodwill; valuation of the Tax Receivable Agreement liability and income taxes; and share-based compensation.
12


Changes in Presentation
Certain prior year amounts have been reclassified to conform to current year presentation. The Company reclassified its wealth business revenue from other income to consulting and service fee revenue in the disaggregated revenue table in Note 4.
The Company identified an error in the March 31, 2022 financial statements related to commissions expense. We have corrected this error in the second quarter of 2022 as an out-of-period adjustment, which resulted in $5.5 million of commissions expense in the condensed consolidated statement of comprehensive income (loss) for the three months ended June 30, 2022. There was no impact to commissions expense in the condensed consolidated statement of comprehensive income (loss) for the six months ended June 30, 2022.
Recent Accounting Pronouncements
In October 2021, the FASB issued Accounting Standards Update (“ASU”) No. 2021-08, Business Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”) to improve the accounting for acquired revenue contracts with customers in business combination by addressing diversity in practice and inconsistency related to (i) the recognition of an acquired contract liability and (ii) payment terms and their effect on subsequent revenue recognized by the acquirer. ASU 2021-08 requires that, at acquisition date, an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”) as if it had originated the contracts, while also taking into account how the acquiree applied Topic 606. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the full effect that the adoption of this standard will have on its consolidated financial statements.
Adoption of the Lease Accounting Standard Under Topic 842
On December 31, 2021, the Company adopted ASU No. 2016-02, Leases (“Topic 842”) in connection with the loss of its emerging growth company status. Topic 842 was adopted effective January 1, 2021 (the “adoption date”) on a modified retrospective basis, under which the Company applied the new guidance to leases existing at, or entered into after, the adoption date. The Company revised its previously reported consolidated financial statements effective January 1, 2021 in its Form 10-K for the year ended December 31, 2021 without filing amendments to its previously filed quarterly reports on Form 10-Q for the same year. Accordingly, our prior period condensed consolidated financial statements and information, as presented herein, have been revised to conform to the standard.
The following table summarizes the effects of adopting ASC 842 on our condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2021:
For the Three Months Ended June 30, 2021For the Six Months Ended June 30, 2021
(in thousands, except per share data)As Previously ReportedEffect of Adoption of Topic 842As AdjustedAs Previously ReportedEffect of Adoption of Topic 842As Adjusted
Operating expenses:
Other operating expenses$19,200 $337 $19,537 $36,768 $(356)$36,412 
Total operating expenses132,905 337 133,242 249,476 (356)249,120 
Operating income (loss)(13,199)(337)(13,536)23,058 356 23,414 
Net income (loss)(20,104)(337)(20,441)10,510 356 10,866 
Net income (loss) attributable to BRP Group, Inc.(9,756)(337)(10,093)4,857 356 5,213 
Basic earnings (loss) per share$(0.22)$(0.01)$(0.23)$0.11 $0.01 $0.12 
Diluted earnings (loss) per share$(0.22)$(0.01)$(0.23)$0.11 $ $0.11 
13


The following table summarizes the effects of adopting ASC 842 on our condensed consolidated statement of cash flows for the six months ended June 30, 2021:
For the Six Months Ended June 30, 2021
(in thousands)As Previously ReportedEffect of Adoption of Topic 842As Adjusted
Cash flows from operating activities:
Net income$10,510 $356 $10,866 
Changes in operating assets and liabilities, net of effect of acquisitions:
Prepaid expenses and other current assets(2,254)169 (2,085)
Right-of-use assets (57,816)(57,816)
Accounts payable, accrued expenses and other current liabilities49,321 (1,885)47,436 
Operating lease liabilities 59,176 59,176 
2. Business Combinations
The Company completed two business combinations for an aggregate purchase price of $396.4 million during the six months ended June 30, 2022. In accordance with ASC Topic 805, Business Combinations (“Topic 805”), total consideration was first allocated to the fair value of assets acquired, including liabilities assumed, with the excess being recorded as goodwill. For financial statement purposes, goodwill is not amortized but rather is evaluated for impairment at least annually or more frequently if an event or change in circumstances occurs that indicates goodwill may be impaired. For tax purposes, goodwill is deductible and will be amortized over a period of 15 years.
The Company completed the following business combinations during the six months ended June 30, 2022:
Westwood Insurance Agency (“Westwood”), a MainStreet Partner effective April 29, 2022, enhances the Company’s expertise and capabilities in embedded, tech-enabled homeowners’ insurance solutions.
Venture Captive Management, LLC (“VCM”), a Specialty Partner effective June 3, 2022, expands the Company’s capabilities into captive management and alternative risk funding solutions for clients.
The recorded purchase price for business combinations includes an estimation of the fair value of contingent consideration obligations associated with potential earnout provisions, which are based on recurring revenue or the insured value of sourced homeowners’ insurance of Westwood. The contingent earnout consideration amounts identified in the tables below are measured at fair value within Level 3 of the fair value hierarchy as discussed further in Note 13. Any subsequent changes in the fair value of contingent earnout liabilities will be recorded in the condensed consolidated statements of comprehensive income (loss) when incurred.
The recorded purchase price for certain business combinations also includes an estimation of the fair value of equity interests, which is calculated based on the value of the Company’s Class A common stock on the closing date taking into account a discount for lack of marketability.
The operating results of these business combinations have been included in the condensed consolidated statements of comprehensive income (loss) since their respective acquisition dates. The Company recognized total revenues and net income from these business combinations of $18.2 million and $7.0 million, respectively, for each of the three and six months ended June 30, 2022.
Acquisition-related costs incurred in connection with these business combinations are recorded in other operating expenses in the condensed consolidated statements of comprehensive income (loss). The Company incurred acquisition-related costs from these business combinations of $1.9 million for the six months ended June 30, 2022.
Due to the complexity of valuing the consideration paid and the purchase price allocation and the timing of these activities, certain amounts included in the consolidated financial statements may be provisional and subject to additional adjustments within the measurement period as permitted by Topic 805. Specifically, the Company's valuations of premiums, commissions and fees receivable in accordance with Topic 606 are estimates subject to change based on relevant factors over the policy period. The valuations of intangible assets are also estimates based on assumptions of factors such as discount rates and growth rates. Accordingly, these assets are subject to measurement period adjustments as determined after the passage of time. Any measurement period adjustments related to prior period business combinations are reflected as current period adjustments in accordance with Topic 805.
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The table below provides a summary of the total consideration and the estimated purchase price allocations made for each of the business acquisitions that became effective during the six months ended June 30, 2022.
(in thousands)WestwoodVCMTotals
Cash consideration paid$373,554 $5,850 $379,404 
Fair value of contingent earnout consideration12,724 674 13,398 
Fair value of equity interest 1,870 1,870 
Deferred payment 1,716 1,716 
Total consideration$386,278 $10,110 $396,388 
Cash$658 $1,397 $2,055 
Restricted cash50  50 
Premiums, commissions and fees receivable4,225 157 4,382 
Other assets392 566 958 
Intangible assets209,200 2,984 212,184 
Goodwill176,176 6,865 183,041 
Total assets acquired390,701 11,969 402,670 
Premiums payable to insurance companies(218) (218)
Producer commissions payable(2,488) (2,488)
Accrued expenses and other current liabilities(1,717)(1,859)(3,576)
Total liabilities acquired(4,423)(1,859)(6,282)
Net assets acquired$386,278 $10,110 $396,388 
Maximum potential contingent earnout consideration$15,000 $1,250 $16,250 
The factors contributing to the recognition of goodwill are based on expanding business presence into new service markets, strategic benefits expected to be realized from acquiring the Partners’ assembled workforce and technology, in addition to other synergies gained from integrating the Partners’ operations into our consolidated structure.
The intangible assets acquired in connection with business combinations during the six months ended June 30, 2022 have the following values and estimated weighted-average lives:
(in thousands, except weighted-average lives)AmountWeighted-Average Life
Purchased customer accounts$18,550 20.0 years
Distributor relationships159,800 20.0 years
Software29,500 5.0 years
Trade names4,334 5.0 years
Future annual estimated amortization expense over the next five years for intangible assets acquired in connection with business combinations during the six months ended June 30, 2022 is as follows:
(in thousands)Amount
For the remainder of 2022$5,049 
202311,076 
202412,340 
202513,562 
2026