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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 September 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/57ec1d226b5b39ae0cba4d407ccf3117-brp-20220930_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 November 1, 2022, there were 61,428,515 shares of Class A common stock outstanding and 54,600,460 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)September 30, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$158,600 $138,292 
Restricted cash92,017 89,445 
Premiums, commissions and fees receivable, net446,112 340,837 
Prepaid expenses and other current assets12,318 8,151 
Due from related parties1,844 1,668 
Total current assets710,891 578,393 
Property and equipment, net24,500 17,474 
Right-of-use assets98,049 81,646 
Other assets39,890 25,586 
Intangible assets, net1,118,129 944,467 
Goodwill1,420,929 1,228,741 
Total assets$3,412,388 $2,876,307 
Liabilities, Mezzanine Equity and Stockholders Equity
Current liabilities:
Premiums payable to insurance companies$356,671 $310,045 
Producer commissions payable60,789 41,833 
Accrued expenses and other current liabilities114,198 92,223 
Related party notes payable 61,500 
Current portion of contingent earnout liabilities41,645 35,088 
Total current liabilities573,303 540,689 
Revolving line of credit527,000 35,000 
Long-term debt, less current portion810,973 814,614 
Contingent earnout liabilities, less current portion187,969 223,501 
Operating lease liabilities, less current portion88,749 71,357 
Other liabilities330 3,590 
Total liabilities2,188,324 1,688,751 
Commitments and contingencies (Note 14)
Mezzanine equity:
Redeemable noncontrolling interest424 269 
Stockholders’ equity:
Class A common stock, par value $0.01 per share, 300,000,000 shares authorized; 61,227,330 and 58,602,859 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
612 586 
Class B common stock, par value $0.0001 per share, 100,000,000 shares authorized; 54,611,484 and 56,338,051 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
5 6 
Additional paid-in capital699,415 663,002 
Accumulated deficit(48,274)(54,992)
Stockholder notes receivable(63)(219)
Total stockholders’ equity attributable to BRP Group, Inc.651,695 608,383 
Noncontrolling interest571,945 578,904 
Total stockholders’ equity1,223,640 1,187,287 
Total liabilities, mezzanine equity and stockholders’ equity$3,412,388 $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)September 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$239 $303 
Premiums, commissions and fees receivable, net356 272 
Total current assets595 575 
Property and equipment, net11 15 
Other assets5 5 
Total assets$611 $595 
Liabilities of Consolidated Variable Interest Entities for Which Creditors Do Not Have Recourse to the Company:
Premiums payable to insurance companies$38 $ 
Producer commissions payable45 41 
Accrued expenses and other current liabilities1 4 
Total liabilities$84 $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 September 30,
For the Nine Months
 Ended September 30,
(in thousands, except share and per share data)2022202120222021
Revenues:
Commissions and fees
$259,368 $135,556 $734,676 $408,090 
Operating expenses:
Commissions, employee compensation and benefits
195,920 100,081 522,518 278,521 
Other operating expenses
47,212 27,968 124,424 64,380 
Amortization expense
23,180 12,596 59,912 33,875 
Change in fair value of contingent consideration
21,695 11,341 (10,809)23,163 
Depreciation expense
1,216 753 3,309 1,920 
Total operating expenses
289,223 152,739 699,354 401,859 
Operating income (loss)(29,855)(17,183)35,322 6,231 
Other income (expense):
Interest expense, net(20,766)(6,940)(45,748)(18,431)
Other income (expense), net3,914 (478)25,151 (1,535)
Total other expense(16,852)(7,418)(20,597)(19,966)
Net income (loss)(46,707)(24,601)14,725 (13,735)
Less: net income (loss) attributable to noncontrolling interests(21,914)(11,389)8,007 (5,736)
Net income (loss) attributable to BRP Group, Inc.$(24,793)$(13,212)$6,718 $(7,999)
Comprehensive income (loss)$(46,707)$(24,601)$14,725 $(13,735)
Comprehensive income (loss) attributable to noncontrolling interests(21,914)(11,389)8,007 (5,736)
Comprehensive income (loss) attributable to BRP Group, Inc.(24,793)(13,212)6,718 (7,999)
Basic earnings (loss) per share$(0.43)$(0.28)$0.12 $(0.18)
Diluted earnings (loss) per share$(0.43)$(0.28)$0.11 $(0.18)
Weighted-average shares of Class A common stock outstanding - basic57,282,13246,446,25456,430,09545,132,217
Weighted-average shares of Class A common stock outstanding - diluted57,282,13246,446,25459,895,37145,132,217








See accompanying Notes to Condensed Consolidated Financial Statements. 7


BRP GROUP, INC.
Condensed Consolidated Statements of Stockholders’ Equity and Mezzanine Equity
(Unaudited)
For the Three Months Ended September 30, 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 June 30, 202260,122,842$601 55,442,435$6 $683,331 $(23,481)$(131)$599,209 $1,259,535 $350 
Net income (loss)— — — — — (24,793)— (21,988)(46,781)74 
Equity issued in business combinations129,1821 — — (66)— — 3,014 2,949 — 
Share-based compensation, net of forfeitures114,9251 29,430 — 7,871 — — (3)7,869 — 
Redemption of Class B common stock860,381 9 (860,381)(1)8,279 — — (8,287)— — 
Repayment of stockholder notes receivable— — — — — — 68 — 68 — 
Balance at September 30, 202261,227,330$612 54,611,484$5 $699,415 $(48,274)$(63)$571,945 $1,223,640 $424 

For the Nine Months Ended September 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— — — — — 6,718 — 7,852 14,570 155 
Equity issued in business combinations226,3382 — — (4,331)— — 9,148 4,819 — 
Share-based compensation, net of forfeitures663,5656 29,430 — 22,488 — — (1,365)21,129 — 
Redemption and cancellation of Class B common stock1,734,568 18 (1,755,997)(1)18,256 — — (18,273)— — 
Tax distributions to BRP LLC members— — — — — — — (4,321)(4,321)— 
Repayment of stockholder notes receivable— — — — — — 156 — 156 — 
Balance at September 30, 202261,227,330$612 54,611,484$5 $699,415 $(48,274)$(63)$571,945 $1,223,640 $424 













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 September 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 June 30, 202146,583,582$466 49,575,871$5 $404,025 $(19,133)$(306)$407,473 $792,530 $173 
Net income (loss)— — — — — (13,212)— (11,439)(24,651)50 
Issuance of Class A common stock in offering, net of underwriting discounts and offering costs9,200,000 92 — 159,101 — — 109,128 268,321 — 
Equity issued in business combinations520,781 5 2,967,730 — 41,757 — — 30,157 71,919 — 
Share-based compensation, net of forfeitures23,277 — — — 2,963 — — 344 3,307 — 
Redemption of Class B common stock59,286 1 (59,286)— 445 — — (446)— — 
Repayment of stockholder notes receivable— — — — — — 43 — 43 $— 
Balance at September 30, 202156,386,926$564 52,484,315$5 $608,291 $(32,345)$(263)$535,217 $1,111,469 $223 

For the Nine Months Ended September 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 (loss)— — — — — (7,999)— (5,861)(13,860)125 
Issuance of Class A common stock in offering, net of underwriting discounts and offering costs9,200,000 92 — 159,101 — — 109,128 268,321 — 
Equity issued in business combinations737,065 7 2,967,730— 43,616 — — 32,010 75,633 — 
Share-based compensation, net of forfeitures1,184,897 12 — — 10,942 — — 349 11,303 — 
Redemption of Class B common stock311,798 3 (311,798)— 2,493 — — (2,496) — 
Repayment of stockholder notes receivable— — — — — — 202 — 202 — 
Balance at September 30, 202156,386,926$564 52,484,315$5 $608,291 $(32,345)$(263)$535,217 $1,111,469 $223 





See accompanying Notes to Condensed Consolidated Financial Statements. 9


BRP GROUP, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Nine Months
 Ended September 30,
(in thousands)20222021
Cash flows from operating activities:
Net income (loss)$14,725 $(13,735)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
63,221 35,795 
Change in fair value of contingent consideration(10,809)23,163 
Share-based compensation expense26,065 11,921 
(Gain) loss on interest rate caps(25,420)1,159 
Payment of contingent earnout consideration in excess of purchase price accrual(48,943)(602)
Amortization of deferred financing costs
3,894 2,301 
Other fair value adjustments369 217 
Changes in operating assets and liabilities, net of effect of acquisitions:
Premiums, commissions and fees receivable, net(97,126)(58,150)
Prepaid expenses and other current assets(10,911)(5,604)
Due to/from related parties(176)19 
Right-of-use assets(15,076)(66,373)
Accounts payable, accrued expenses and other current liabilities70,282 28,818 
Operating lease liabilities16,992 68,112 
Other liabilities(3,740) 
Net cash provided by (used in) operating activities(16,653)27,041 
Cash flows from investing activities:
Cash consideration paid for business combinations, net of cash received(387,919)(218,818)
Cash consideration paid for asset acquisitions, net of cash received(3,356)(1,575)
Capital expenditures(15,400)(3,188)
Investment in business venture(791) 
Net cash used in investing activities(407,466)(223,581)
Cash flows from financing activities:
Proceeds from issuance of Class A common stock, net of underwriting discounts 269,376 
Payment of common stock offering costs (1,055)
Payment of contingent earnout consideration up to amount of purchase price accrual(47,218)(1,078)
Proceeds from revolving line of credit
512,000 120,000 
Payments on revolving line of credit(20,000) 
Proceeds from long-term debt 97,914 
Payments on long-term debt
(6,382)(2,250)
Payments of debt issuance costs(1,751)(693)
Proceeds from the sales and settlements of interest rate caps19,587  
Tax distributions to BRP LLC members(9,393) 
Purchase of interest rate caps (6,461)
Proceeds from repayment of stockholder notes receivable156 202 
Net cash provided by financing activities446,999 475,955 
Net increase in cash and cash equivalents and restricted cash22,880 279,415 
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$250,617 $421,437 

See accompanying Notes to Condensed Consolidated Financial Statements. 10


BRP GROUP, INC.
Condensed Consolidated Statements of Cash Flows (Continued)
(Unaudited)
For the Nine Months
 Ended September 30,
(in thousands)20222021
Supplemental schedule of cash flow information:
Cash paid during the period for interest$41,225 $15,177 
Cash paid during the period for taxes1,056  
Disclosure of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease liabilities$23,444 $12,495 
Contingent earnout liabilities recognized in business combinations16,495 60,865 
Equity issued in business combinations4,819 75,634 
Right-of-use assets increased through lease modifications and reassessments4,732 5,676 
Increase in goodwill resulting from measurement period adjustments for prior year business combinations3,455  
Capital expenditures incurred but not yet paid1,198 493 
Equity issued in satisfaction of a liability711  
Conversion of contingent earnout liability to related party notes payable 61,500 
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.
Recently Issued 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 combinations 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 adoption of this standard will not have any impact on the Company’s results of operations or financial condition.
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 Topic 842 on our condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2021:
For the Three Months Ended
September 30, 2021
For the Nine Months Ended
September 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$27,589 $379 $27,968 $64,357 $23 $64,380 
Total operating expenses152,360 379 152,739 401,836 23 401,859 
Operating income (loss)(16,804)(379)(17,183)6,254 (23)6,231 
Net loss(24,222)(379)(24,601)(13,712)(23)(13,735)
Net loss attributable to BRP Group, Inc.(12,833)(379)(13,212)(7,976)(23)(7,999)
Basic loss per share$(0.28)$ $(0.28)$(0.18)$ $(0.18)
Diluted loss per share$(0.28)$ $(0.28)$(0.18)$ $(0.18)
13


The following table summarizes the effects of adopting Topic 842 on our condensed consolidated statement of cash flows for the nine months ended September 30, 2021:
For the Nine Months Ended September 30, 2021
(in thousands)As Previously ReportedEffect of Adoption of Topic 842As Adjusted
Cash flows from operating activities:
Net loss$(13,712)$(23)$(13,735)
Changes in operating assets and liabilities, net of effect of acquisitions:
Prepaid expenses and other current assets(5,773)169 (5,604)
Right-of-use assets (66,373)(66,373)
Accounts payable, accrued expenses and other current liabilities30,703 (1,885)28,818 
Operating lease liabilities 68,112 68,112 
2. Business Combinations
The Company completed three business combinations for an aggregate purchase price of $415.4 million during the nine months ended September 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 nine months ended September 30, 2022:
The Company acquired all the equity interests of Westwood Insurance Agency (“Westwood”), a MainStreet Partner effective April 29, 2022, to enhance the Company’s expertise and capabilities in embedded, tech-enabled homeowners’ insurance solutions.
The Company acquired substantially all the assets and assumed certain liabilities of Venture Captive Management, LLC (“VCM”), a Specialty Partner effective June 3, 2022, to expand its capabilities into captive management and alternative risk funding solutions for Clients.
The Company acquired substantially all the assets and assumed certain liabilities of National Health Plans & Benefits Agency, LLC (“NHPBA”), a Medicare Partner effective August 1, 2022, to enhance the Company’s expertise and expand its offerings within the individual health insurance market.
The recorded purchase price for business combinations includes an estimation of the fair value of contingent earnout obligations associated with contractual earnout provisions and other similar provisions providing for post-closing contingent consideration payments, which are based on recurring revenue, the insured value of sourced homeowners’ insurance of Westwood or other similar post-closing metrics. The contingent earnout consideration amounts identified in the table 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 $31.5 million and $10.0 million, respectively, for the three months ended September 30, 2022 and $49.7 million and $17.1 million, respectively, for the nine months ended September 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 $2.3 million for the nine months ended September 30, 2022.
14


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.
The table below provides a summary of the total consideration and the estimated purchase price allocations made for each of the business acquisitions that became effective during the nine months ended September 30, 2022.
(in thousands)Westwood
All Others(1)
Totals
Cash consideration paid$372,939 $17,415 $390,354 
Fair value of contingent earnout consideration12,724 3,771 16,495 
Fair value of equity interest 4,819 4,819 
Deferred payment 3,716 3,716 
Total consideration$385,663 $29,721 $415,384 
Cash$658 $1,727 $2,385 
Restricted cash50  50 
Premiums, commissions and fees receivable4,225 157 4,382 
Other assets392 1,281 1,673 
Intangible assets209,200 15,124 224,324 
Goodwill