# EDGAR Filing Document

**Accession Number:** 0001690680
**File Stem:** 0001690680-23-000004
**Filing Date:** 2023-2
**Character Count:** 101891
**Document Hash:** 66cdcda52d276e914c77e67ce2abf601
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001690680-23-000004.hdr.sgml**: 20230216

**ACCESSION NUMBER**: 0001690680-23-000004

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230216

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230216

**DATE AS OF CHANGE**: 20230216

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NEWMARK GROUP, INC.
- **CENTRAL INDEX KEY:** 0001690680
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE AGENTS & MANAGERS (FOR OTHERS) [6531]
- **IRS NUMBER:** 814467492
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38329
- **FILM NUMBER:** 23637306

**BUSINESS ADDRESS:**
- **STREET 1:** 125 PARK AVENUE
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10017
- **BUSINESS PHONE:** 2128294775

**MAIL ADDRESS:**
- **STREET 1:** 125 PARK AVENUE
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10017

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NRE DELAWARE, INC.
- **DATE OF NAME CHANGE:** 20161122

?xml version="1.0" ? nmrk-20230216

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K** 

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d)**

**of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): February 16, 2023

**Newmark Group, Inc.** 

**(Exact name of Registrant as specified in its charter)**

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-38329** | **81-4467492** |
| **(State or other jurisdiction<br>of incorporation)** | **(Commission<br>File Number)** | **(I.R.S. Employer<br>Identification No.)** |

---

**125 Park Avenue, New York, NY 10017** 

**(Address of principal executive offices)**

**Registrant's telephone number, including area code: (212) 372-2000** 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading<br>Symbol(s)** | **Name of each exchange on which registered** |
| **Class A Common Stock, $0.01 par value** | **NMRK** | **The NASDAQ Stock Market LLC** |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ Emerging growth company

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. ☐

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**Item 2.02.** &nbsp;&nbsp;&nbsp;&nbsp;**Results of Operations and Financial Condition.** 

On February 16, 2023, Newmark Group, Inc. (the "Registrant," "we," "us," "Newmark," or the "Company") issued a press release announcing its financial results for the quarter and year ended December 31, 2022. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

Except as indicated below, the information in this Item 2.02 and Exhibit 99.1 attached to this Current Report on Form 8-K are being furnished under Item 2.02 of Form 8-K. Such information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as expressly set forth by specific reference in such filing and as set forth below.

**FILED INFORMATION**

The information set forth under the heading "Dividend Information" set forth in Exhibit 99.1 to this Current Report on Form 8-K is being filed under Item 2.02 of Form 8-K and shall be deemed incorporated by reference in any filing under the Securities Act, except as expressly set forth by specific reference in such filing. All other information set forth in Exhibit 99.1 is being furnished.

**DISCUSSION OF FORWARD-LOOKING STATEMENTS ABOUT NEWMARK**

Statements in the press release in Exhibit 99.1 of this Current Report on Form 8-K regarding Newmark that are not historical facts are "forward-looking statements" that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. These include statements about the effects of the COVID-19 pandemic on the Company's business, results, financial position, liquidity and outlook, which may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected. Except as required by law, Newmark undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to, the risk factors and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K.

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| | |
|:---|:---|
| **Item 9.01.** | **Financial Statements and Exhibits** |

---

(d) Exhibits

The exhibit index set forth below is incorporated by reference in response to this Item 9.01.

**<u>EXHIBIT INDEX</u>**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | <u>[Newmark Group, Inc. press release dated February 16, 2023](nmrkex99102162023.htm)</u> |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL |

---

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**SIGNATURES** 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | Newmark Group, Inc. | Newmark Group, Inc. |
| &nbsp;&nbsp;&nbsp;&nbsp;Date: February 16, 2023 | By: | &nbsp;&nbsp;&nbsp;&nbsp;/s/ Howard W. Lutnick |
|  |  | Name: Howard W. Lutnick |
|  |  | Title: Chairman |

---

*[Signature Page to Form 8-K, dated February 16, 2023, regarding Newmark Group, Inc.'s fourth quarter and year ended December 31, 2022 Earnings Release]*

## Exhibit 99.1

![newmark-logoxlargex6axblkxa.jpg](newmark-logoxlargex6axblkxa.jpg)![imagea.jpg](imagea.jpg)

Newmark Reports Fourth Quarter and Full Year 2022 Financial Results <sup>1</sup>

NEW YORK - February 16, 2023 - Newmark Group, Inc. (Nasdaq: NMRK) ("Newmark" or "the Company"), a leading full-service commercial real estate business, today reported its financial results for the quarter and year ended December 31, 2022, declared a quarterly dividend, and issued its initial 2023 outlook.

**Comments from Barry M. Gosin, Chief Executive Officer of Newmark**<sup>1</sup><br>"For the past decade, Newmark has strived to become the company with the greatest talent in the industry. During the fourth quarter, interest rates rose at the fastest pace in over thirty years. This led to challenging market conditions but has also created an opportunity for Newmark to solidify its position as the platform for the real estate industry's top professionals. Our near-term objectives include becoming number one in capital markets in the United States. Yesterday, we took a major step towards this goal by adding the industry's top capital markets team, led by Douglas Harmon and Adam Spies, who are based in New York, which is the largest real estate market in the world.<br>"We have an incredible combination of the top strategists and advisors, together with extraordinary local expertise. This has led to over a decade of strong growth and our becoming a top commercial real estate services platform in the U.S. We believe the current market dislocation coupled with our strong financial position is creating opportunities for us to hire top talent and acquire companies at attractive valuations.<br>"As we have seen with past downturns and subsequent recoveries, capital markets leads the rebound. Once the markets and the Fed are aligned, we expect pent up demand to drive significantly higher industry volumes. Historically, our investment sales and debt businesses have had a multiplier effect, which drives outsized growth across Newmark. When activity rebounds, we expect our market share, revenues, and earnings to materially outperform the industry. While the macroeconomic environment may be challenging in the short-term, we remain excited about our market position and our future."<br>

**SELECT RESULTS COMPARED WITH THE YEAR-EARLIER PERIOD**<sup>2</sup>

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Highlights of Consolidated Results<br>(USD millions, except per share data)** | **4Q22** | **4Q21** | **Change** | **2022** | **2021** | **Change** |
| Total Revenues | $607.3 | $984.5 | (38.3)% | $2705.5 | $2906.4 | (6.9)% |
| GAAP income before income taxes and noncontrolling interests ("GAAP pre-tax income") | 21.1 | 221.5 | (90.5)% | 157.2 | 1221.1 | (87.1)% |
| GAAP pre-tax income excluding other income and the 2021 Equity Event | 17.4 | 176.3 | (90.2)% | 254.9 | 433.2 | (41.1)% |
| GAAP net income for fully diluted shares | 9.4 | 189.2 | (95.1)% | 112.9 | 744.5 | (84.8)% |
| GAAP net income per fully diluted share | $0.05 | $0.74 | (93.2)% | $0.46 | $3.80 | (87.9)% |
| Adjusted Earnings before noncontrolling interests and taxes ("Pre-tax Adjusted Earnings") | 84.6 | 209.8 | (59.7)% | 441.4 | 537.6 | (17.9)% |
| Post-tax Adjusted Earnings to fully diluted shareholders ("Post-tax Adjusted Earnings") | 76.5 | 166.0 | (53.9)% | 365.0 | 432.4 | (15.6)% |
| Post-tax Adjusted Earnings per share ("Adjusted Earnings EPS") | $0.32 | $0.65 | (50.8)% | $1.49 | $1.64 | (9.1)% |
| Adjusted EBITDA ("AEBITDA") | 102.2 | 225.4 | (54.7)% | 510.7 | 597.5 | (14.5)% |

---

**FOURTH QUARTER AND FULL YEAR 2022 HIGHLIGHTS**<sup>3</sup>

During the quarter and/or year, Newmark:

–Increased Fees from management services, servicing, and other by 18.3% in 2022.

–Grew the percentage of annual total revenues from these businesses by over 200 basis points to approximately 34% as the Company continues to drive towards its 40% target.

–Produced more than 7% of total revenues internationally in 2022, an over 250 basis point year-on-year increase as Newmark approaches its10% goal.

–Repurchased 1.7 million and 24.9 million shares during the quarter and year, respectively, which contributed to fully diluted weighted-average share count decreasing by 7.1% year-on-year to 236.3 million in the fourth quarter of 2022.

–Maintained low net leverage at 0.6X and have access to a $600 million revolving credit facility.

<sup>1</sup> Unless otherwise stated, all financial results and volume figures in the narrative portion of this document compare the fourth quarter of 2022 with the year-earlier period. For more on the economic and industry data referenced, please see the section of this document titled "Other Useful Information".

<sup>2</sup> U.S. Generally Accepted Accounting Principles or "GAAP". See the sections of this document including, but not limited to, "Non-GAAP Financial Measures", "Adjusted Earnings Defined", and "Reconciliation of GAAP Net Income to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests and Taxes and GAAP Fully Diluted EPS to Post-Tax Adjusted EPS", including any footnotes to these sections, for the complete and/or updated definitions of these and other non-GAAP terms and how, when and why management uses them, and the differences between results under GAAP and non-GAAP for the periods discussed herein. For more information about receipt of shares from Nasdaq, Inc. ("Nasdaq"), the Impact of Nasdaq, and the Impact of the 2021 Equity Event, see the section of this document titled "Other Useful Information". Please also see the table titled "Reconciliation of GAAP pre-tax income to GAAP pre-tax income excluding other income and the 2021 Equity Event".

<sup>3</sup> "Fees from management services, servicing, and other" excludes pass through revenues but includes all other revenues from Newmark's servicing business, Global Corporate Services, property management, and Valuation & Advisory, as well the Company's commercial real estate due diligence, consulting, and advisory services platform. See "Recent Acquisitions" for more information on the latter. Including Pass through revenues, "Management services, servicing fees, and other" declined by 0.7% in 2022. The 34% figure includes Pass through revenues in the numerator and total revenues as the denominator. See also the portions of this document titled "Revenue Analysis" and "Certain Revenue Terms Defined". Please go to the footnote to "Select Balance Sheet Data" for a definition of net leverage. Please also read "Other Useful Information" for a discussion of certain industry volumes.

 1

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**ONLINE AVAILABILITY OF INVESTOR PRESENTATION AND ADDITIONAL FINANCIAL TABLES**

Newmark's quarterly supplemental Excel tables show revenues, earnings, and other metrics for periods from 2018 through the fourth quarter of 2022. The Excel tables and the Company's quarterly financial results presentation are available for download at <u>ir.nmrk.com</u>. These materials include other useful information that may not be contained herein.

**DIVIDEND INFORMATION**

On February 15, 2023, Newmark's Board of Directors (the "Board") declared a qualified quarterly dividend of $0.03 per share payable on March 17, 2023, to Class A and Class B common stockholders of record as of March 3, 2023. The ex-dividend date will be March 2, 2023.

**REVENUE ANALYSIS**<sup>4</sup>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Consolidated Revenues<br>(USD millions)** | **4Q22** | **4Q21** | **Change** | **2022** | **2021** | **Change** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees from management services, servicing, and other | $157.1 | $167.7 | (6.3)% | $633.1 | $535.3 | 18.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass through revenues | 63.2 | 96.3 | (34.3)% | 276.4 | 380.5 | (27.4)% |
| **Management services, servicing fees, and other** | **220.3** | **264.0** | **(16.5)%** | **909.5** | **915.7** | **(0.7)%** |
| **Leasing and other commissions** | **200.2** | **263.6** | **(24.1)%** | **831.9** | **826.9** | **0.6%** |
| **Investment sales** | **113.5** | **305.2** | **(62.8)%** | **606.4** | **757.7** | **(20.0)%** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees from commercial mortgage origination, net | 51.7 | 103.4 | (50.0)% | 247.8 | 269.6 | (8.1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OMSR revenues | 21.6 | 48.2 | (55.3)% | 109.9 | 136.4 | (19.4)% |
| **Commercial mortgage origination, net** | **73.3** | **151.7** | **(51.7)%** | **357.8** | **406.0** | **(11.9)%** |
| **Total revenues** | **607.3** | **984.5** | **(38.3)%** | **2705.5** | **2906.4** | **(6.9)%** |

---

Total revenues declined by 38.3% and 6.9%, respectively, in the fourth quarter and full year 2022. Fee revenues, which exclude the impact of Pass through revenues and OMSR revenues, declined by 37.8% and 2.9% in the same respective periods .

Fees from management services, servicing, and other decreased by 6.3%. However, Newmark continued to generate growth in fees from its servicing business, Global Corporate Services, and property management in the quarter and full year. Total revenues for Management services, servicing fees, and other declined by 16.5%, due to lower Pass through revenues primarily related to the completion of certain project management assignments. The Company expects its recurring businesses to increase in both absolute terms and as a percentage of revenues over time.

Newmark's significant outperformance in the fourth quarter of 2021 made year-on-year comparisons more challenging across the Company's commission-based businesses.<sup>5</sup> Newmark's results for its higher margin capital markets businesses were impacted by the historic rise in interest rates in the fourth quarter. The Company's results also reflect reduced leasing activity across nearly all property types. Retail, Industrial, and Hotel/Lodging held up relatively better than other property types for Newmark across capital markets and leasing. The Company expects overall U.S. transaction volumes to decline in the first half of 2023 compared with a year earlier and to rebound thereafter.

<sup>4</sup> See the section of this document titled "Certain Revenue Terms Defined" for more information on various revenue terms shown above and throughout this document, including the definitions of "OMSR revenues" and "Pass through revenues".

<sup>5</sup> Newmark's commission-based revenues include Leasing and other commissions, Investment sales, Fees from commercial mortgage origination, net, and Valuation and Advisory, as detailed in its quarterly Excel supplemental tables. In the fourth quarter of 2021, Newmark's fee revenues from (i) leasing and (ii) investment sales and commercial mortgage origination increased by 91% and 79%, respectively year-on-year. For its full service peers (U.S. tickers CBRE, CIGI, CWK, and JLL), the simple averages of their comparable and respective increases were 62% and 64%. Over the same timeframe, Newmark improved Valuation & Advisory revenues by 37%, while the three peers that disclosed such revenues grew them by a simple average of 9%.

 2

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**CONSOLIDATED EXPENSES**<sup>6</sup>

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Consolidated Expenses<br>(USD millions)** | **4Q22** | **4Q21** | **Change** | **2022** | **2021** | **Change** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation and employee benefits under GAAP | $356.7 | $554.0 | (35.6)% | $1554.8 | $1828.9 | (15.0)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity-based compensation and allocations of net income to limited partnership units and FPUs | 32.7 | 40.6 | (19.4)% | 135.7 | 356.3 | (61.9)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-compensation expenses under GAAP | 193.6 | 206.1 | (6.0)% | 729.2 | 699.1 | 4.3% |
| **Total expenses under GAAP** | **583.0** | **800.7** | **(27.2)%** | **2419.6** | **2884.4** | **(16.1)%** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation and employee benefits for Adjusted Earnings | 357.1 | 551.4 | (35.2)% | 1552.7 | 1619.1 | (4.1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-compensation expenses for Adjusted Earnings | 140.0 | 168.9 | (17.1)% | 573.7 | 582.7 | (1.5)% |
| **Total expenses for Adjusted Earnings** | **497.1** | **720.3** | **(31.0)%** | **2126.4** | **2201.8** | **(3.4)%** |

---

The decrease in quarterly and annual expenses reflect lower variable compensation that is correlated with decreased commission-based revenues as well as lower pass through expenses tied to non-fee management services revenues. These declines were partially offset by expenses related to acquired companies. Newmark's full year 2021 GAAP compensation expense included $444.6 million of tax-deductible charges with respect to the 2021 Equity Event.

**OTHER INCOME** 

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Other Income (USD millions)** | **4Q22** | **4Q21** | **Change** | **2022** | **2021** | **Change** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nasdaq Impact | $— | $46.1 | (100.0)% | $(87.4) | $1203.1 | (107.3)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mark-to-market gains (losses) on non-marketable investments, net | 1.0 | (0.9) | 211.1% | (12.9) | 1.6 | (906.3)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other items, net | 2.7 |  | NMF | 2.6 | 27.8 | (90.6)% |
| **Other income (loss), net under GAAP** | **3.7** | **45.2** | **(91.8)%** | **(97.7)** | **1232.5** | **(107.9)%** |
| To reconcile from GAAP other income (loss), exclude: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nasdaq Impact |  | (44.7) | 100.0% | 87.6 | (1200.3) | 107.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mark-to-market (gains) losses on non-marketable investments, net | (1.0) | 0.9 | (211.1)% | 12.9 | (1.6) | 906.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other items, net | 0.2 |  | NMF | 0.4 | (27.8) | 101.4% |
| **Other income (loss), net for Pre-tax Adjusted Earnings and Adjusted EBITDA** | **2.9** | **1.4** | **107.1%** | **3.2** | **2.9** | **10.3%** |

---

Newmark's "Other income (loss), net under GAAP" includes gains and losses related to the Nasdaq shares the Company received in 2021, equity method investments that represent Newmark's pro rata share of net gains or losses on investments, and mark-to-market gains or losses on non-marketable investments. "Other income (loss), net for Pre-tax Adjusted Earnings and Adjusted EBITDA" excludes gains and losses related to the Nasdaq shares and mark-to-market gains or losses on non-marketable investments. The main difference between the two measures of "Other income (loss)" for the full year periods relate to GAAP realized and unrealized gains with respect to Nasdaq shares, as discussed later under "Other Useful Information." In addition, the Company recorded a net total of $12.9 million of mark-to-market losses on non-marketable investments in 2022 compared with $1.6 million gain a year earlier. Newmark also recorded a $27.8 million GAAP non-cash gain related to the acquisition of Deskeo in 2021.

**TAXES AND NONCONTROLLING INTEREST**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Taxes And Noncontrolling Interest (USD millions)** | **4Q22** | **4Q21** | **Change** | **2022** | **2021** | **Change** |
| GAAP provision for income taxes | $5.7 | $36.4 | (84.4)% | $41.4 | $243.0 | (83.0)% |
| Provision for income taxes for Adjusted Earnings | 7.9 | 42.7 | (81.5)% | 75.7 | 101.8 | (25.6)% |
| Net income attributable to noncontrolling interests for GAAP | 6.0 | 35.8 | (83.1)% | 29.6 | 227.4 | (87.0)% |
| Net income attributable to noncontrolling interests for Adjusted Earnings | 0.2 | 1.1 | (78.7)% | 0.8 | 2.4 | (66.3)% |

---

Taxes and net income attributable to noncontrolling interests generally move in tandem with the Company's earnings.

<sup>6</sup> The $444.6 million figure included $203.5 million of cash charges related to the 2021 Equity Event, while the remainder related to equity-based compensation. Please also see "Non-GAAP Financial Measures" for information on how non-cash GAAP gains attributable to OMSRs and GAAP amortization of mortgage servicing rights ("MSRs") affect non-GAAP results.

 3

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**CONSOLIDATED SHARE COUNT**<sup>7</sup>

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Consolidated Share Count (shares in millions)** | **4Q22** | **4Q21** | **Change** | **2022** | **2021** | **Change** |
| Fully diluted weighted-average share count under GAAP | 173.8 | 254.3 | (31.7)% | 245.2 | 195.8 | 25.2% |
| Fully diluted weighted-average share count for Adjusted Earnings | 236.3 | 254.3 | (7.1)% | 245.2 | 264.0 | (7.1)% |
| Fully diluted period-end share count | 235.9 | 250.7 | (5.9)% | 235.9 | 250.7 | (5.9)% |

---

Newmark's repurchases from January 1 through December 31, 2022 are summarized below. The board of directors increased the share repurchase and unit redemption authorization from $146.9 million to $400 million on November 4, 2022. As of year end, Newmark had $392.3 million remaining under this program.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fully Diluted Share Count Reduction** | **1Q22** | **2Q22** | **3Q22** | **4Q22** | **2022** |
| Share and/or units repurchased or redeemed (in millions) | 1.7 | 11.4 | 10.1 | 1.7 | 24.9 |
| Average price per share/unit | $18.35 | $12.75 | $10.35 | $8.00 | $11.83 |

---

**SELECT BALANCE SHEET DATA**<sup>8</sup>

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| | | |
|:---|:---|:---|
| **Select Balance Sheet Data<br>(USD millions)** | **December 31, 2022** | **December 31, 2021** |
| Cash and cash equivalents | $233.0 | $191.3 |
| Long-term debt | $547.8 | $545.2 |
| Total Equity | $1544.7 | $1685.1 |

---

The changes in Newmark's cash since the end of 2021 reflect cash flow from operations and the proceeds from the sale of the Company's remaining Nasdaq shares, offset by the purchase or redemption of 24.9 million Newmark shares or units for $294.8 million, cash used for acquisitions, and normal uses of working capital. Newmark expects to use its cash and cash equivalents, $600 million credit facility, and cash generation to invest in growth and to return capital to shareholders, while continuing to operate with investment-grade credit metrics.

**PRELIMINARY OUTLOOK FOR 2023**

The Company's guidance is as follows:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Metric (in millions, except tax rate)** | **1Q 2022 Actual** | **1Q 2023 Guidance** | **Change YoY** | **FY 2022 Actual** | **FY 2023 Guidance** | **Change YoY** |
| Total Revenues | $678.2 | $500 - $550 | (26% - 19%) | $2705.5 | $2500 - $2700 | (8% - 0%) |
| Adjusted EBITDA | $126.5 | $55 - $75 | (57% - 41%) | $510.7 | $425 - $510 | (17% - 0%) |
| Adjusted Earnings Tax Rate | 18.4% | ~14% - 17% | N/A | 17.1% | ~14% - 17% | N/A |

---

This guidance reflects the expected decline in industry-wide capital markets transactions and lower U.S. leasing activity in the first half of 2023. Newmark anticipates solid fee growth across its suite management services and servicing businesses in for the year. The Company is ahead of schedule with respect to its $50 million annualized fixed cost reduction target and expects to realize at least $35 million during 2023. The Company expects full year 2023 fully diluted weighted average share count to be approximately flat to down 1% compared with 2022. As the Company has previously stated, its long-term target is for net share count issuance to be an average of 2 percent per year or less. The Company's full year outlook excludes the potential impact of additional share repurchases, as well as any material future acquisitions.

**CONFERENCE CALL AND INVESTOR PRESENTATION** 

Newmark will host a conference call at 10:00 a.m. ET today to discuss these results. A webcast of the call, along with an investor presentation summarizing the Company's Non-GAAP results, is expected to be accessible via the following sites:

<u>http://ir.nmrk.com</u> or <u>https://www.webcast-eqs.com/newmarkgroup20230216</u> 

<sup>7</sup> "Spot" may be used interchangeably with the end-of-period share count. Newmark's fully diluted period-end share count for Adjusted Earnings as of December 31, 2022, included 201.2 million Class A common shares, 21.3 million Class B common shares, (50.8) million of treasury stock, 61.9 million limited partnership units, and 2.3 million of other share equivalents. The Company's fully diluted period-end share count for Adjusted Earnings as of December 31, 2021, included 194.0 million Class A common shares, 21.3 million Class B common shares, (25.8) million of treasury stock, 52.8 million limited partnership units, and 8.3 million of other share equivalents. Newmark's fully diluted share count moves in tandem with its stock price over a given period, all else equal, due to the treatment of RSUs under the treasury stock method. In addition, the fully diluted weighted-average share count under GAAP may differ in certain periods from the fully diluted weighted-average share count for Adjusted Earnings in order to avoid anti-dilution, which also impacts GAAP net income for fully diluted shares.

<sup>8</sup> "Total equity" in this table is the sum of "redeemable partnership interests," "noncontrolling interests" and "total stockholders' equity". "Long-term debt" in this table excludes "Warehouse facilities collateralized by U.S. Government Sponsored Enterprises". Newmark uses its warehouse lines and repurchase agreements for short-term funding of mortgage loans originated under its GSE and FHA lending programs, and such amounts are generally offset by "Loans held for sale, at fair value" on the balance sheet. These loans are typically sold within 45 days. Loans made using Newmark's warehouse lines are recourse to Berkeley Point Capital LLC, but non-recourse to Newmark Group. "Liquidity", when shown, excludes marketable securities that have been financed. Unlike certain other companies' definition of liquidity, Newmark's does not include the value of its undrawn revolving credit line(s). See the section titled "Liquidity Defined" and the related reconciliation tables later in this document. "Net debt", when used, is defined as total debt, net of cash or, if applicable, total liquidity, while "net leverage", when used, equals net debt divided by trailing twelve month Adjusted EBITDA.

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Participants who cannot access the webcast are strongly encouraged to pre-register for the conference call to gain immediate access to the call and bypass the live operator. Pre-registration may be completed at any time by accessing the Pre-registration link on Newmark's Investor Relations website, <u>http://ir.nmrk.com</u>, or by navigating to the registration page at:

<u>http://services.incommconferencing.com/DiamondPassRegistration/register?confirmationNumber=13735610&linkSecurityString=137</u><u>6a549dc</u>

A webcast replay of the conference call is expected to be accessible at the same websites within 24 hours of the live call and will be available for 365 days following the call. The Company highly recommends that investors use the webcast to access the call to avoid experiencing extended wait times via the dial-in phone numbers. Participants who cannot access the webcast are strongly encouraged to pre-register to gain immediate access to the call and bypass the live operator. Pre-registration may be completed at any time by accessing the pre-registration link on Newmark's Investor Relations website, or by navigating to:

<u>http://services.incommconferencing.com/DiamondPassRegistration/register?confirmationNumber=13735610&linkSecurityString=1376a549dc</u>

After pre-registering, you will receive your access details via email. Participants who do not listen to the webcast or who have not pre-registered may join the call using the following information. Please note that those who do not pre-register may experience greater than normal wait times before being able to join the live call.

**LIVE CONFERENCE CALL DETAILS** 

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| | |
|:---|:---|
| Date – Start Time: | 2/16/2023 at 10:00 a.m. ET |
| U.S. Dial In: | 1-877-407-0312 |
| International Dial In: | +1-201-389-0899 |
| Webcast Link | <u>https://www.webcast-eqs.com/newmarkgroup20230216</u> |

---

**REPLAY**

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| | |
|:---|:---|
| Available From – To: | 2/16/2023 at 1:00 p.m. ET – 2/13/2023 at 11:59 p.m. ET |
| U.S. Dial In: | 1-877-660-6853 |
| International Dial In: | +1-201-612-7415 |
| Conference ID: | 13735610 |

---

**CERTAIN REVENUE TERMS DEFINED**

The Company's total revenues include certain management services revenues that equal their related expenses. These revenues represent fully reimbursable compensation and non-compensation costs recorded as part of Newmark's Global Corporate Services ("GCS") and property management businesses. Such revenues therefore have no impact on the Company's GAAP or non-GAAP earnings measures and may be referred to as "Pass through revenues". Newmark's total revenues also include non-cash gains with respect to originated mortgage servicing rights ("OMSRs"), which represent the fair value of expected net future cash flows from servicing recognized at commitment, net. Such non-cash gains may also be referred to as "OMSR revenues." Newmark may also refer to Pass through revenues and OMSR revenues together as "non-fee revenues", and the remainder of its total revenues as "fee revenues".

Newmark's commission-based revenues include Leasing and other commissions, Investment sales, fees from commercial mortgage origination, net, and Valuation and Advisory, but does not include OMSR revenues. "Commercial mortgage origination, net" includes origination fees related to Newmark's multifamily GSE/FHA<sup>9</sup> business and fees from commercial mortgage brokerage (together, "Fees from commercial mortgage origination, net", and also includes all OMSR revenues. "Servicing and other revenues" may be referred to as Newmark's "servicing business", and includes servicing fees, interest income on loans held for sale, escrow interest, and yield maintenance fees, all of which also relate to Newmark's multifamily GSE/FHA business.

"Management services, servicing fees, and other" (which may also be referred to as "recurring revenues" or "recurring businesses") includes all pass-through revenues, as well as fees from Newmark's servicing business, GCS, property management, and Valuation & Advisory, as well the Company's commercial real estate due diligence, consulting, and advisory services platform. "Fees from management services, servicing, and other" are revenues from these same recurring businesses excluding Pass through revenues.

Additional details on current and historical amounts for Newmark's revenues are available in the Company's quarterly supplemental Excel tables.

**DISCUSSION OF CERTAIN FINANCIAL RESULTS**

Newmark's "Other income (loss), net under GAAP" reflects certain items that are not related to the Company's ordinary and ongoing operations. These included gains and losses related to the Nasdaq stock it sold in first quarter of 2022, for which it recorded a GAAP loss of $87.4 million. In 2021, Newmark recorded a GAAP gain of $1,203.1 million related to these shares and $444.6 million of tax-deductible GAAP compensation charges with respect to the 2021 Equity Event. But for the impact of GAAP "other income", the Company's GAAP pre-tax income would have declined in the fourth quarter and full year 2022 by 90.2% and 41.1%, respectively. In addition, the year-on-year changes in GAAP net income reflect other items that are excluded from non-

<sup>9</sup> See "Industry Volumes" for a definition of these acronyms.

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GAAP earnings measures, including as detailed above under "Consolidated Expenses" and "Other Income", as well as in the reconciliation tables later in this document.

**OTHER USEFUL INFORMATION** 

The Impact of Nasdaq

The receipt of shares from Nasdaq may also be referred to as the "Earn-out". In the second quarter of 2021, Newmark recorded a gain of $1,093.9 million related to the final Earn-out, based on the June 30, 2021, closing price of $175.80. Between that date and March 31, 2022, the Company sold 100% of these shares, which contributed to gains in the second through fourth quarters of 2021 and a loss in the first quarter of 2022, all recorded as part of GAAP other income or loss. In aggregate, Newmark sold its Nasdaq stock over this timeframe for the effective price of $180.66 per share, resulting in cumulative proceeds of $1,124.1 million and an additional net gain of $30.2 million.<sup>10</sup>

For additional information about the Earn-out and related monetization transactions (the "Nasdaq Forwards"), which were a component of GAAP other income for certain periods from the third quarter of 2017 through the first quarter of 2022, see the sections of the Company's most recent SEC filings on Form 10-Q or Form 10-K titled "Nasdaq Monetization Transactions" and "Exchangeable Preferred Partnership Units and Forward Contract", as well as any updates regarding these topics in subsequent SEC filings.

The 2021 Equity Event

The "Impact of the 2021 Equity Event" is defined in the section of this document called "Excluded Compensation-Related Items with Respect to the 2021 Equity Event under Adjusted Earnings and Adjusted EBITDA" under "Non-GAAP Financial Measures". For additional details on how the 2021 Equity Event impacted share count and GAAP expenses, see the section of the Company's second quarter 2021 financial results press release titled "Additional Details About the Impact of Nasdaq and the 2021 Equity Event" and the related SEC filing on Form 8-K, as well as any subsequent disclosures in filings on Forms 10-Q and/or 10-K.

Recent Acquisitions

In the first quarter of 2023, the Company acquired the approximately 49% of Spring11 that it did not own, having held a controlling stake since 2017. Spring11 provides commercial real estate due diligence, consulting, and advisory services to a variety of clients, including lenders, investment banks and investors, and has been recorded as part of "management services". Newmark also acquired three companies in 2022. For more information, please see the Company's forthcoming Annual Report on Form 10-K, as well as its website for the press releases including "Newmark Acquires Esteemed Boston-Based Firm McCall & Almy", "Newmark Acquires Premier London Capital Markets and Leasing Real Estate Advisory Firm, BH2" and "Newmark Acquires Renowned North American Retail Advisory Business, Open Realty".

Revenue and Non-GAAP Earnings Recast

Beginning with the first quarter of 2022, the Company adjusted its line items under in certain financial tables. "Gains from mortgage banking activities/origination, net" was combined with commercial mortgage brokerage revenues as "Commercial mortgage origination, net", while the remainder of what had been "Capital markets" became "Investment sales". This change in presentation had no impact on any period's consolidated revenues or earnings. Since the second quarter of 2021, Newmark has reported Adjusted Earnings and Adjusted EBITDA excluding the Impact of Nasdaq and the 2021 Equity Event. Figures for these items in prior periods under their current and former presentations are contained in the third quarter 2022 Excel supplement on Newmark's Investor Relations website.

Beginning with the first quarter of 2022, the Company reclassified an immaterial amount of revenues related to its flexible workspace business as fee revenues from non-fee revenues for all periods from April 1, 2021, onwards, as shown in the third quarter 2022 Excel supplement.

Newmark and Industry Volumes

Newmark's investment sales figures include investment sales and equity advisory transactions, while mortgage brokerage figures include the Company's debt placement transactions, all measured in notional terms. The Company's investment sales and mortgage brokerage transactions may together be referred to as "capital markets". Fannie Mae and Freddie Mac together are also called the "GSEs", while the Federal Housing Administration is also called the "FHA." Volumes for Newmark's mortgage brokerage and GSE/FHA originations businesses together may be referred to as "total debt".

The Company calculates its notional origination volumes based on when loans are rate locked, which is consistent with how certain revenues are recorded as part of "Commercial Mortgage Origination, Net". The Company's mix of GSE/FHA originations, and therefore revenues, can vary depending on the size of loans, as well by the categories of loans with respect to the FHA, Freddie Mac, and different Fannie Mae structures. The notional volumes reported by the GSEs are based on when loans are sold and/or securitized, and typically lag those reported by Newmark or estimates from the Mortgage Bankers' Association

<sup>10</sup> The effective price per share of Nasdaq is: (a) the sum of all realized gains related to the 6,222,340 shares from June 30, 2021, through March 31, 2022, divided by (b) that number of shares. These realized gains include all proceeds related to open market sales, hedging transactions, and dividends paid to Nasdaq stockholders. The numerator used to calculate the effective price also reflects the 944,329 shares the Company used to settle the 2021 and 2022 Nasdaq Forwards, based on a price of $176.36 per share. Excluding these 944,329 shares, the effective price was $181.43 per share. All Nasdaq closing prices are nominal as of those dates and not adjusted for any subsequent dividends. Please see the slide titled "Cumulative Nasdaq GAAP Gains from June 30, 2021 through Q20222" in Newmark's first quarter 2022 Financial Results presentation on its investor relations website for further details.

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("MBA") by 30 to 45 days. Newmark generally calculates its GSE market share based on delivery for enhanced comparability.

Any overall industry investment sales market share and volume data discussed herein are preliminary and from MSCI Real Capital Analytics ("RCA") and Newmark Research, while any GSE data is from Fannie Mae, Freddie Mac, the MBA, and/or Newmark Research. Any other U.S. industry debt volumes are from the MBA, RCA, and/or Newmark Research.

In the fourth quarter of 2022, Newmark's investment sales and total debt volumes were down year-on-year by 68% and 59%, respectively. In comparison, RCA's preliminary U.S. investment sales figures indicate that industry volumes declined by 62% in the fourth quarter of 2022, while the MBA commercial/multifamily origination index was down by 54%.

In the fourth quarter of 2021, the Company's investment sales and total debt volumes were up year-on-year by 62% and 141%, respectively. In the fourth quarter of 2021, U.S. investment sales volumes increased by 119% year-over year according to RCA, while the MBA commercial/multifamily origination index was up by 79%. For all of these figures, the fourth quarter of 2021 was record for any quarter.

Please see the accompanying supplemental Excel tables and quarterly results presentation on the Company's investor relations website for more information with respect to volumes for Newmark and/or the industry.

Other Industry Data

The speed of interest rate increases is as measured by the change in the Fed Funds Rate as reported by Bloomberg. Preqin estimated that there was approximately $436 billion of investible dry powder held by global closed-end funds at real estate focused institutions as of December 31, 2022. This is addition to the significant amount of real estate assets held by other types of investors and owners. According to the most recent data from MSCI, the overall size of the professionally managed global real estate investment market was $11.4 trillion in 2021. Any debt maturities discussed are for the U.S. only and are from Newmark Research, Trepp LLC, and/or RCA.

Other Items

Throughout this press release, certain other reclassifications may have been made to previously reported amounts to conform to the current presentation and to show results on a consistent basis across periods. Unless otherwise stated, any such changes would have had no impact on consolidated total revenues or earnings under GAAP or for Adjusted Earnings, all else being equal. Certain numbers in the tables or elsewhere throughout this document may not sum due to rounding. Rounding may have also impacted the presentation of certain year-on-year percentage changes. Decreases in losses may be shown as positive percentage changes in the financial tables. Changes from negative figures to positive figures may be calculated using absolute values, resulting in positive percentage changes in the tables.

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| | | |
|:---|:---|:---|
| **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** |
| **CONSOLIDATED BALANCE SHEETS** | **CONSOLIDATED BALANCE SHEETS** | **CONSOLIDATED BALANCE SHEETS** |
| **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **(unaudited)** | **(unaudited)** | **(unaudited)** |
| | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;Current Assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $233016 | $191332 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 79936 | 75168 |
| &nbsp;&nbsp;&nbsp;&nbsp;Marketable securities | 788 | 524569 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans held for sale, at fair value | 138345 | 1072479 |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables, net | 523742 | 569206 |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables from related parties |  | 8262 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 100188 | 83337 |
| &nbsp;&nbsp;&nbsp;Total current assets | 1076015 | 2524353 |
| &nbsp;&nbsp;&nbsp;&nbsp;Goodwill | 705894 | 657131 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage servicing rights, net | 568552 | 550302 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, forgivable loans and other receivables from employees and partners, net | 500833 | 453345 |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets | 638592 | 606634 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fixed assets, net | 155639 | 135756 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other intangible assets, net | 80968 | 76199 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | 215463 | 212481 |
| &nbsp;&nbsp;&nbsp;Total assets | $3941956 | $5216201 |
| **Liabilities and Equity:** |  |  |
| &nbsp;&nbsp;&nbsp;Current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Warehouse facilities collateralized by U.S. Government Sponsored Enterprises | $137406 | $1050693 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation | 369729 | 462533 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable, accrued expenses and other liabilities | 512140 | 528746 |
| &nbsp;&nbsp;&nbsp;&nbsp;Repurchase agreements and securities loaned |  | 140007 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payables to related parties | 9745 | 10762 |
| &nbsp;&nbsp;&nbsp;Total current liabilities | 1029020 | 2192741 |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term debt | 547784 | 545239 |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use liabilities | 627088 | 586069 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other long-term liabilities | 193379 | 207012 |
| &nbsp;&nbsp;&nbsp;Total liabilities | $2397271 | $3531061 |
| **Equity:** |  |  |
| Total equity (1) | 1544685 | 1685140 |
| Total liabilities and equity | $3941956 | $5216201 |

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(1) Includes "redeemable partnership interests," "noncontrolling interests" and "total stockholders' equity."

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| | | | | |
|:---|:---|:---|:---|:---|
| **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** |
| **CONSOLIDATED STATEMENTS OF OPERATIONS** | **CONSOLIDATED STATEMENTS OF OPERATIONS** | **CONSOLIDATED STATEMENTS OF OPERATIONS** | **CONSOLIDATED STATEMENTS OF OPERATIONS** | **CONSOLIDATED STATEMENTS OF OPERATIONS** |
| **(in thousands, except per share data)** | **(in thousands, except per share data)** | **(in thousands, except per share data)** | **(in thousands, except per share data)** | **(in thousands, except per share data)** |
| **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** |
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **Revenues:** | **2022** | **2021** | **2022** | **2021** |
| Management services, servicing fees and other | $220302 | $263986 | $909485 | $915715 |
| Leasing and other commissions | 200193 | 263631 | 831874 | 826942 |
| Investment sales | 113518 | 305180 | 606416 | 757744 |
| Commercial mortgage origination, net | 73269 | 151669 | 357752 | 406042 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 607282 | 984466 | 2705527 | 2906443 |
| **Expenses:** |  |  |  |  |
| Compensation and employee benefits | 356680 | 554008 | 1554784 | 1828887 |
| Equity-based compensation and allocations of net income to limited partnership units and FPUs | 32707 | 40601 | 135681 | 356345 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total compensation and employee benefits | 389387 | 594609 | 1690465 | 2185232 |
| Operating, administrative and other | 138961 | 159077 | 534843 | 553623 |
| Fees to related parties | 7624 | 6093 | 28502 | 23789 |
| Depreciation and amortization | 47057 | 40925 | 165816 | 121729 |
| &nbsp;&nbsp;&nbsp;Total non-compensation expenses | 193642 | 206095 | 729161 | 699141 |
| &nbsp;&nbsp;&nbsp;Total operating expenses | 583029 | 800704 | 2419626 | 2884373 |
| **Other income, net:** |  |  |  |  |
| Other income (loss), net | 3730 | 45173 | (97701) | 1232495 |
| Total other income (loss), net | 3730 | 45173 | (97701) | 1232495 |
| Income from operations | 27983 | 228935 | 188200 | 1254565 |
| Interest expense, net | (6896) | (7439) | (30970) | (33473) |
| Income before income taxes and noncontrolling interests | 21087 | 221496 | 157230 | 1221092 |
| Provision for income taxes | 5689 | 36386 | 41412 | 242958 |
| Consolidated net income | 15398 | 185110 | 115818 | 978134 |
| Less: Net income attributable to noncontrolling interests | 6035 | 35779 | 29606 | 227406 |
| Net income available to common stockholders | $9363 | $149331 | $86212 | $750728 |
| **Per share data:** |  |  |  |  |
| *Basic earnings per share* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income available to common stockholders (1) | $9363 | $149331 | $86212 | $744528 |
| &nbsp;&nbsp;&nbsp;Basic earnings per share | $0.05 | $0.77 | $0.48 | $3.91 |
| &nbsp;&nbsp;&nbsp;Basic weighted-average shares of common stock outstanding | 171515 | 192742 | 180337 | 190179 |
| *Fully diluted earnings per share* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income for fully diluted shares (1) | $9363 | $189197 | $112936 | $744528 |
| &nbsp;&nbsp;&nbsp;Fully diluted earnings per share | $0.05 | $0.74 | $0.46 | $3.80 |
| &nbsp;&nbsp;&nbsp;Fully diluted weighted-average shares of common stock outstanding | 173790 | 254318 | 245177 | 195813 |
| Dividends declared per share of common stock | $0.03 | $0.01 | $0.12 | $0.04 |
| Dividends paid per share of common stock | $0.03 | $0.01 | $0.10 | $0.04 |

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<br>(1) Includes a reduction for dividends on preferred stock or EPUs in the amount of $0.0 million and $6.2 million for the three months and year ended December 31, 2021, respectively. (see Note 1 — "Organization and Basis of Presentation" in the Company's most recently filed Form 10-Q and Form 10-K).

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| | | | | |
|:---|:---|:---|:---|:---|
| **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** |
| **SUMMARIZED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS** | **SUMMARIZED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS** | **SUMMARIZED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS** | **SUMMARIZED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS** | **SUMMARIZED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS** |
| **(In thousands)** | **(In thousands)** | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** |
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Net cash provided by (used in) operating activities | $931608 | $277848 | $1196343 | $(48709) |
| Net cash provided by (used in) investing activities | (22174) | 29100 | 308629 | 453088 |
| Net cash (used in) financing activities | (904020) | (285653) | (1458520) | (396278) |
| Net increase in cash and cash equivalents and restricted cash | 5414 | 21295 | 46452 | 8101 |
| Cash and cash equivalents and restricted cash at beginning of period | 307538 | 245205 | 266500 | 258399 |
| Cash and cash equivalents and restricted cash at end of period | $312952 | $266500 | $312952 | $266500 |
| Net cash provided by (used in) operating activities excluding loan originations and sales | $52112 | $150135 | $261498 | $(63035) |

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Both Net cash provided by (used in) operating activities and Net cash provided by operating activities excluding loan originations and sales reflect $484.4 million of cash used with respect to the 2021 Equity event. Of this amount, $203.5 million related to the 16.3 million reduction in fully diluted shares, and $280.9 million related to amounts paid on behalf of, or to partners for withholding taxes related to unit exchanges and/or redemptions, cash paid for redemption of HDUs, and other items. But for these uses of cash, Net cash provided by operating activities excluding loan originations and sales would have been $421.4 million in the year ended December 31, 2021.

The Condensed Consolidated Statements of Cash Flows are presented in summarized form. For complete Condensed Consolidated Statements of Cash Flows, please refer to Newmark's Annual Report on Form 10-K for the year ended December 31, 2022, to be filed with the Securities and Exchange Commission in the near future.

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**NON-GAAP FINANCIAL MEASURES** 

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

**ADJUSTED EARNINGS DEFINED**

Newmark uses non-GAAP financial measures, including "Adjusted Earnings before noncontrolling interests and taxes" and "Post-tax Adjusted Earnings to fully diluted shareholders", which are supplemental measures of operating results used by management to evaluate the financial performance of the Company and its consolidated subsidiaries. Newmark believes that Adjusted Earnings best reflect the operating earnings generated by the Company on a consolidated basis and are the earnings which management considers when managing its business.

As compared with "Income (loss) before income taxes and noncontrolling interests" and "Net income (loss) for fully diluted shares", both prepared in accordance with GAAP, Adjusted Earnings calculations primarily exclude certain non-cash items and other expenses that generally do not involve the receipt or outlay of cash by the Company and/or which do not dilute existing stockholders. In addition, Adjusted Earnings calculations exclude certain gains and charges that management believes do not best reflect the ordinary results of Newmark. Adjusted Earnings is calculated by taking the most comparable GAAP measures and making adjustments for certain items with respect to compensation expenses, non-compensation expenses, and other income, as discussed below.

**CALCULATIONS OF COMPENSATION ADJUSTMENTS FOR ADJUSTED EARNINGS AND ADJUSTED EBITDA**

Treatment of Equity-Based Compensation under Adjusted Earnings and Adjusted EBITDA

The Company's Adjusted Earnings and Adjusted EBITDA measures exclude all GAAP charges included in the line item "Equity-based compensation and allocations of net income to limited partnership units and FPUs" (or "equity-based compensation" for purposes of defining the Company's non-GAAP results) as recorded on the Company's GAAP Consolidated Statements of Operations and GAAP Consolidated Statements of Cash Flows. These GAAP equity-based compensation charges reflect the following items:

–Charges with respect to grants of exchangeability, which reflect the right of holders of limited partnership units with no capital accounts, such as LPUs and PSUs, to exchange these units into shares of common stock, or into partnership units with capital accounts, such as HDUs, as well as cash paid with respect to taxes withheld or expected to be owed by the unit holder upon such exchange. The withholding taxes related to the exchange of certain non-exchangeable units without a capital account into either common shares or units with a capital account may be funded by the redemption of preferred units such as PPSUs.

–Charges with respect to preferred units. Any preferred units would not be included in the Company's fully diluted share count because they cannot be made exchangeable into shares of common stock and are entitled only to a fixed distribution. Preferred units are granted in connection with the grant of certain limited partnership units that may be granted exchangeability or redeemed in connection with the grant of shares of common stock at ratios designed to cover any withholding taxes expected to be paid. The Company believes that this is an acceptable alternative to the common practice among public companies of issuing the gross amount of shares to employees, subject to cashless withholding of shares, to pay applicable withholding taxes.

–GAAP equity-based compensation charges with respect to the grant of an offsetting amount of common stock or partnership units with capital accounts in connection with the redemption of non-exchangeable units, including PSUs and LPUs.

–Charges related to amortization of RSUs and limited partnership units.

–Charges related to grants of equity awards, including common stock or partnership units with capital accounts.

–Allocations of net income to limited partnership units and FPUs. Such allocations represent the pro-rata portion of post-tax GAAP earnings available to such unit holders.

The amount of certain quarterly equity-based compensation charges is based upon the Company's estimate of such expected charges during the annual period, as described further below under "Methodology for Calculating Adjusted Earnings Taxes".

Virtually all of Newmark's key executives and producers have equity or partnership stakes in the Company and its subsidiaries and generally receive deferred equity or limited partnership units as part of their compensation. A significant percentage of Newmark's fully diluted shares are owned by its executives, partners, and employees. The Company issues limited partnership units as well as other forms of equity-based compensation, including grants of exchangeability into shares of common stock, to provide liquidity to its employees, to align the interests of its employees and management with those of common stockholders, to help motivate and retain key employees, and to encourage a collaborative culture that drives cross-selling and growth.

All share equivalents that are part of the Company's equity-based compensation program, including REUs, PSUs, LPUs, certain HDUs, and other units that may be made exchangeable into common stock, as well as RSUs (which are recorded using the

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treasury stock method), are included in the fully diluted share count when issued or at the beginning of the subsequent quarter after the date of grant. Generally, limited partnership units other than preferred units are expected to be paid a pro-rata distribution based on Newmark's calculation of Adjusted Earnings per fully diluted share.

Certain Other Compensation-Related Items under Adjusted Earnings and Adjusted EBITDA

Newmark also excludes various other GAAP items that management views as not reflective of the Company's underlying performance for the given period from its calculation of Adjusted Earnings and Adjusted EBITDA. These may include compensation-related items with respect to cost-saving initiatives, such as severance charges incurred in connection with headcount reductions as part of broad restructuring and/or cost savings plans.

The Company also excludes compensation charges related to non-cash GAAP gains attributable to originated mortgage servicing rights ("OMSRs") because these gains are also excluded from Adjusted Earnings and Adjusted EBITDA. OMSRs represent the fair value of expected net future cash flows from servicing recognized at commitment, net.

Excluded Compensation-Related Items with Respect to the 2021 Equity Event under Adjusted Earnings and Adjusted EBITDA

Newmark does not view the cash GAAP compensation charges related to 2021 Equity Event (the "Impact of the 2021 Equity Event") as being reflective of its ongoing operations. These consisted of charges relating to cash paid to independent contractors for their withholding taxes and the cash redemption of HDUs. These had been recorded as expenses based on Newmark's previous non-GAAP definitions, but were excluded in the recast non-GAAP results beginning in the third quarter of 2021 for the following reasons:

–But for the 2021 Equity Event, the items comprising such charges would have otherwise been settled in shares and been recorded as equity-based compensation in future periods, as is the Company's normal practice. Had this occurred, such amounts would have been excluded from Adjusted Earnings and Adjusted EBITDA and would also have resulted in higher fully diluted share counts, all else equal.

–Newmark views the fully diluted share count reduction related to the 2021 Equity Event to be economically similar to the common practice among public companies of issuing the net amount of common shares to employees for their vested stock-based compensation, selling a portion of the gross shares pay applicable withholding taxes, and separately making open market repurchases of common shares.

–There was nothing comparable to the 2021 Equity Event in 2020 and nothing similar is currently contemplated after 2021. Accordingly, the only prior period recast with respect to the 2021 Equity Event was the second quarter of 2021.

Calculation of Non-Compensation Expense Adjustments for Adjusted Earnings

Newmark's calculation of pre-tax Adjusted Earnings excludes non-cash GAAP charges related to the following:

–Amortization of intangibles with respect to acquisitions.

–GAAP gains attributable to OMSRs.

–Amortization of mortgage servicing rights (which Newmark refers to as "MSRs"). Under GAAP, the Company recognizes OMSRs equal to the fair value of servicing rights retained on mortgage loans originated and sold. Subsequent to the initial recognition at fair value, MSRs are carried at the lower of amortized cost or fair value and amortized in proportion to the net servicing revenue expected to be earned. However, it is expected that any cash received with respect to these servicing rights, net of associated expenses, will increase Adjusted Earnings and Adjusted EBITDA in future periods.

–Various other GAAP items that management views as not reflective of the Company's underlying performance for the given period, including non-compensation-related charges incurred as part of broad restructuring and/or cost savings plans. Such GAAP items may include charges for exiting leases and/or other long-term contracts as part of cost-saving initiatives, as well as non-cash impairment charges related to assets, goodwill, and/or intangibles created from acquisitions.

Calculation of Other (income) losses for Adjusted Earnings and Adjusted EBITDA

Adjusted Earnings calculations also exclude certain other non-cash, non-dilutive, and/or non-economic items, which may, in some periods, include:

–Unusual, one-time, non-ordinary or non-recurring gains or losses.

–Non-cash GAAP asset impairment charges.

<sup>–</sup>The impact of any unrealized non-cash mark-to-market gains or losses on "Other income (loss)" related to the variable share forward agreements with respect to Newmark's receipt of the payments from Nasdaq, Inc. ("Nasdaq"), in 2021 and 2022 and the 2020 Nasdaq payment (the "Nasdaq Forwards").

–Mark-to-market adjustments for non-marketable investments.

–Certain other non-cash, non-dilutive, and/or non-economic items.

Due to Nasdaq's sale of its U.S. fixed income business in the second quarter of 2021, the Nasdaq Earn-out and related Forward settlements were accelerated, less certain previously disclosed adjustments. Because these shares were originally expected to

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be received over a 15 year period ending in 2027, the Earn-out had been included in calculations of Adjusted Earnings and Adjusted EBITDA under Newmark's previous non-GAAP methodology. Due to the acceleration of the Earn-out and the Nasdaq Forwards, the Company now views results excluding certain items related to the Earn-out to be a better reflection of the underlying performance of Newmark's ongoing operations. Therefore, beginning with the third quarter of 2021, other (income) losses for Adjusted Earnings and Adjusted EBITDA also excludes the impact of the below items from relevant periods. These items may collectively be referred to as the "Impact of Nasdaq".

–Realized gains related to the accelerated receipt on June 25, 2021, of Nasdaq shares.

–Realized gains or losses and unrealized mark-to-market gains or losses with respect to Nasdaq shares received prior to the Earn-out acceleration.

–The impact of any unrealized non-cash mark-to-market gains or losses on "Other income (loss)" related to the Nasdaq Forwards. This item was historically excluded under the previous non-GAAP definitions.

–Other items related to the Earn-out.

Newmark's calculations of non-GAAP "Other income (loss)" for certain prior periods includes dividend income on its Nasdaq shares, as these dividends contributed to cash flow and were generally correlated to Newmark's interest expense on short term borrowing against such shares. As Newmark sold 100% of these shares between the third quarter of 2021 and the first quarter of 2022, both its interest expense and dividend income declined accordingly.

**METHODOLOGY FOR CALCULATING ADJUSTED EARNINGS TAXES**

Although Adjusted Earnings are calculated on a pre-tax basis, Newmark also reports post-tax Adjusted Earnings to fully diluted shareholders. The Company defines post-tax Adjusted Earnings to fully diluted shareholders as pre-tax Adjusted Earnings reduced by the non-GAAP tax provision described below and net income (loss) attributable to noncontrolling interest for Adjusted Earnings.

The Company calculates its tax provision for post-tax Adjusted Earnings using an annual estimate similar to how it accounts for its income tax provision under GAAP. To calculate the quarterly tax provision under GAAP, Newmark estimates its full fiscal year GAAP income before noncontrolling interests and taxes and the expected inclusions and deductions for income tax purposes, including expected equity-based compensation during the annual period. The resulting annualized tax rate is applied to Newmark's quarterly GAAP income before income taxes and noncontrolling interests. At the end of the annual period, the Company updates its estimate to reflect the actual tax amounts owed for the period.

To determine the non-GAAP tax provision, Newmark first adjusts pre-tax Adjusted Earnings by recognizing any, and only, amounts for which a tax deduction applies under applicable law. The amounts include charges with respect to equity-based compensation, certain charges related to employee loan forgiveness, certain net operating loss carryforwards when taken for statutory purposes, and certain charges related to tax goodwill amortization. These adjustments may also reflect timing and measurement differences, including treatment of employee loans, changes in the value of units between the dates of grants of exchangeability and the date of actual unit exchange, variations in the value of certain deferred tax assets and liabilities, and the different timing of permitted deductions for tax under GAAP and statutory tax requirements.

After application of these adjustments, the result is the Company's taxable income for its pre-tax Adjusted Earnings, to which Newmark then applies the statutory tax rates to determine its non-GAAP tax provision. Newmark views the effective tax rate on pre-tax Adjusted Earnings as equal to the amount of its non-GAAP tax provision divided by the amount of pre-tax Adjusted Earnings.

Generally, the most significant factor affecting this non-GAAP tax provision is the amount of charges relating to equity-based compensation. Because the charges relating to equity-based compensation are deductible in accordance with applicable tax laws, increases in such charges have the effect of lowering the Company's non-GAAP effective tax rate and thereby increasing its post-tax Adjusted Earnings.

Newmark incurs income tax expenses based on the location, legal structure, and jurisdictional taxing authorities of each of its subsidiaries. Certain of the Company's entities are taxed as U.S. partnerships and are subject to the Unincorporated Business Tax ("UBT") in New York City. Any U.S. federal and state income tax liability or benefit related to the partnership income or loss, with the exception of UBT, rests with the unit holders rather than with the partnership entity. The Company's consolidated financial statements include U.S. federal, state, and local income taxes on the Company's allocable share of the U.S. results of operations. Outside of the U.S., Newmark is expected to operate principally through subsidiary corporations subject to local income taxes. For these reasons, taxes for Adjusted Earnings are expected to be presented to show the tax provision the consolidated Company would expect to pay if 100% of earnings were taxed at global corporate rates.

**CALCULATIONS OF PRE- AND POST-TAX ADJUSTED EARNINGS PER SHARE** 

Newmark's pre-tax Adjusted Earnings and post-tax Adjusted Earnings per share calculations assume either that:

–The fully diluted share count includes the shares related to any dilutive instruments, but excludes the associated expense, net of tax, when the impact would be dilutive; or

–The fully diluted share count excludes the shares related to these instruments, but includes the associated expense, net of tax.

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The share count for Adjusted Earnings excludes certain shares and share equivalents expected to be issued in future periods but not yet eligible to receive dividends and/or distributions. Each quarter, the dividend payable to Newmark's stockholders, if any, is expected to be determined by the Company's Board of Directors with reference to a number of factors, including post-tax Adjusted Earnings per share. Newmark may also pay a pro-rata distribution of net income to limited partnership units, as well as to Cantor for its noncontrolling interest. The amount of this net income, and therefore of these payments per unit, would be determined using the above definition of Adjusted Earnings per share on a pre-tax basis.

The declaration, payment, timing, and amount of any future dividends payable by the Company will be at the discretion of its Board of Directors using the fully diluted share count. For more information on any share count adjustments, see the table of this document and/or the Company's most recent financial results press release titled "Fully Diluted Weighted-Average Share Count for GAAP and Adjusted Earnings."

**MANAGEMENT RATIONALE FOR USING ADJUSTED EARNINGS**

Newmark's calculation of Adjusted Earnings excludes the items discussed above because they are either non-cash in nature, because the anticipated benefits from the expenditures are not expected to be fully realized until future periods, or because the Company views results excluding these items as a better reflection of the underlying performance of Newmark's ongoing operations. Management uses Adjusted Earnings in part to help it evaluate, among other things, the overall performance of the Company's business, to make decisions with respect to the Company's operations, and to determine the amount of dividends payable to common stockholders and distributions payable to holders of limited partnership units. Dividends payable to common stockholders and distributions payable to holders of limited partnership units are included within "Dividends to stockholders" and "Earnings and tax distributions to limited partnership interests and other noncontrolling interests," respectively, in our unaudited condensed consolidated statements of cash flows.

The term "Adjusted Earnings" should not be considered in isolation or as an alternative to GAAP net income (loss). The Company views Adjusted Earnings as a metric that is not indicative of liquidity, or the cash available to fund its operations, but rather as a performance measure. Pre- and post-tax Adjusted Earnings, as well as related measures, are not intended to replace the Company's presentation of its GAAP financial results. However, management believes that these measures help provide investors with a clearer understanding of Newmark's financial performance and offer useful information to both management and investors regarding certain financial and business trends related to the Company's financial condition and results of operations. Management believes that the GAAP and Adjusted Earnings measures of financial performance should be considered together.

For more information regarding Adjusted Earnings, see the sections of this document and/or the Company's most recent financial results press release titled "Reconciliation of GAAP Net Income to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests and Taxes and GAAP Fully Diluted EPS to Post-Tax Adjusted EPS", including the related footnotes, for details about how Newmark's non-GAAP results are reconciled to those under GAAP.

**ADJUSTED EBITDA DEFINED**

Newmark also provides an additional non-GAAP financial performance measure, "Adjusted EBITDA", which it defines as GAAP "Net income (loss) available to common stockholders", adjusted for the following items:

–Net income (loss) attributable to noncontrolling interest.

–Provision (benefit) for income taxes.

–OMSR revenue.

–MSR amortization.

–Compensation charges related to OMSRs.

–Other depreciation and amortization.

–Equity-based compensation and allocations of net income to limited partnership units and FPUs.

–Various other GAAP items that management views as not reflective of the Company's underlying performance for the given period. These may include compensation-related items with respect to cost-saving initiatives, such as severance charges incurred in connection with headcount reductions as part of broad restructuring and/or cost savings plans; charges for exiting leases and/or other long-term contracts as part of cost-saving initiatives; and non-cash impairment charges related to assets, goodwill and/or intangibles created from acquisitions.

–Other non-cash, non-dilutive, and/or non-economic items, which may, in certain periods, include the impact of any unrealized non-cash mark-to-market gains or losses on "other income (loss)" related to the Nasdaq Forwards, as well as mark-to-market adjustments for non-marketable investments.

–Interest expense.

Beginning with the third quarter of 2021, calculation of Adjusted EBITDA excludes the Impact of Nasdaq and the Impact of the 2021 Equity Event, (together, the "Impact of Nasdaq and the 2021 Equity Event") which are defined above.

Newmark's calculation of Adjusted EBITDA excludes certain items discussed above because they are either non-cash in nature, because the anticipated benefits from the expenditures are not expected to be fully realized until future periods, or because the Company views excluding these items as a better reflection of the underlying performance Newmark's ongoing operations. The

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Company's management believes that its Adjusted EBITDA measure is useful in evaluating Newmark's operating performance, because the calculation of this measure generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions. Such items may vary for different companies for reasons unrelated to overall operating performance. As a result, the Company's management uses this measure to evaluate operating performance and for other discretionary purposes. Newmark believes that Adjusted EBITDA is useful to investors to assist them in getting a more complete picture of the Company's financial results and operations.

Since Newmark's Adjusted EBITDA is not a recognized measurement under GAAP, investors should use this measure in addition to GAAP measures of net income when analyzing Newmark's operating performance. Because not all companies use identical EBITDA calculations, the Company's presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, Adjusted EBITDA is not intended to be a measure of free cash flow or GAAP cash flow from operations, because the Company's Adjusted EBITDA does not consider certain cash requirements, such as tax and debt service payments.

For more information regarding Adjusted EBITDA, see the section of this document and/or the Company's most recent financial results press release titled "Reconciliation of GAAP Net Income to Adjusted EBITDA", including the related footnotes, for details about how Newmark's non-GAAP results are reconciled to those under GAAP EPS.

**TIMING OF OUTLOOK FOR CERTAIN GAAP AND NON-GAAP ITEMS**

Newmark anticipates providing forward-looking guidance for GAAP revenues and for certain non-GAAP measures from time to time. However, the Company does not anticipate providing an outlook for other GAAP results. This is because certain GAAP items, which are excluded from Adjusted Earnings and/or Adjusted EBITDA, are difficult to forecast with precision before the end of each period. The Company therefore believes that it is not possible for it to have the required information necessary to forecast GAAP results or to quantitatively reconcile GAAP forecasts to non-GAAP forecasts with sufficient precision without unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The relevant items that are difficult to predict on a quarterly and/or annual basis with precision and may materially impact the Company's GAAP results include, but are not limited, to the following:

–Certain equity-based compensation charges that may be determined at the discretion of management .

–Unusual, one-time, non-ordinary, or non-recurring items.

–The impact of gains or losses on certain marketable securities, as well as any gains or losses related to associated mark-to- market movements and/or hedging. These items are calculated using period-end closing prices.

–Non-cash asset impairment charges, which are calculated and analyzed based on the period-end values of the underlying assets. These amounts may not be known until after period-end.

–Acquisitions, dispositions, and/or resolutions of litigation, which are fluid and unpredictable in nature.

**LIQUIDITY DEFINED**

Newmark may also use a non-GAAP measure called "liquidity". The Company considers liquidity to be comprised of the sum of cash and cash equivalents, marketable securities, and reverse repurchase agreements (if any), less securities lent out in securities loaned transactions and repurchase agreements. The Company considers liquidity to be an important metric for determining the amount of cash that is available or that could be readily available to the Company on short notice. For more information regarding liquidity, see the section of this document and/or the Company's most recent financial results press release titled "Liquidity Analysis", including any related footnotes, for details about how Newmark's non-GAAP results are reconciled to those under GAAP.

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| | | | | |
|:---|:---|:---|:---|:---|
| **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** |
| **RECONCILIATION OF GAAP NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EARNINGS** | **RECONCILIATION OF GAAP NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EARNINGS** | **RECONCILIATION OF GAAP NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EARNINGS** | **RECONCILIATION OF GAAP NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EARNINGS** | **RECONCILIATION OF GAAP NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EARNINGS** |
| **BEFORE NONCONTROLLING INTERESTS AND TAXES AND GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS** | **BEFORE NONCONTROLLING INTERESTS AND TAXES AND GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS** | **BEFORE NONCONTROLLING INTERESTS AND TAXES AND GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS** | **BEFORE NONCONTROLLING INTERESTS AND TAXES AND GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS** | **BEFORE NONCONTROLLING INTERESTS AND TAXES AND GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS** |
| **(in thousands, except per share data)** | **(in thousands, except per share data)** | **(in thousands, except per share data)** | **(in thousands, except per share data)** | **(in thousands, except per share data)** |
| **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** |
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| **GAAP net income available to common stockholders** | **$9363** | **$149331** | **$86212** | **$750728** |
| &nbsp;&nbsp;&nbsp;Provision for income taxes (1) | 5689 | 36386 | 41412 | 242958 |
| &nbsp;&nbsp;&nbsp;Net income attributable to noncontrolling interests (2) | 6035 | 35779 | 29606 | 227406 |
| **GAAP income before income taxes and noncontrolling interests** | **$21087** | **$221496** | **$157230** | **$1221092** |
| &nbsp;&nbsp; **Pre-tax adjustments:** |  |  |  |  |
| **Compensation adjustments:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Equity-based compensation and allocations of net income to limited partnership units and FPUs (3) | 32707 | 40601 | 135681 | 356345 |
| &nbsp;&nbsp;&nbsp;Other compensation adjustments (4) | (406) | 2618 | 2086 | 209759 |
| **Total Compensation adjustments** | 32301 | 43219 | 137767 | 566104 |
| **Non-Compensation adjustments:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of intangibles (5) | 3402 | 2361 | 14313 | 8864 |
| &nbsp;&nbsp;&nbsp;MSR amortization (6) | 28577 | 31937 | 109076 | 89791 |
| &nbsp;&nbsp;&nbsp;Other non-compensation adjustments (7) | 21621 | 2793 | 32046 | 17806 |
| **Total Non-Compensation expense adjustments** | 53600 | 37091 | 155435 | 116461 |
| **Non-cash adjustment for OMSR revenue (8)** | (21570) | (48230) | (109926) | (136406) |
| **Other (income) loss, net** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other non-cash, non-dilutive, and/or non-economic items and Nasdaq (9) | (845) | (43790) | 100935 | (1229626) |
| **Total Other (income) loss, net** | (845) | (43790) | 100935 | (1229626) |
| &nbsp;&nbsp;**Total pre-tax adjustments** | **63486** | **(11710)** | **284211** | **(683467)** |
| **Adjusted Earnings before noncontrolling interests and taxes ("Pre-tax Adjusted Earnings")** | **$84573** | **$209786** | **$441441** | **$537625** |
| **GAAP net income available to common stockholders** | $9363 | $149331 | $86212 | $750728 |
| Allocations of net income to noncontrolling interests (10) | 5798 | 34665 | 28809 | 223926 |
| Total pre-tax adjustments (from above) | 63486 | (11710) | 284211 | (683467) |
| &nbsp;&nbsp;&nbsp;Income tax adjustment to reflect Adjusted Earnings taxes (1) | (2154) | (6333) | (34251) | 141215 |
| **Post-tax Adjusted Earnings to fully diluted shareholders ("Post-tax Adjusted Earnings")** | **$76493** | **$165953** | **$364981** | **$432402** |
| ***Per Share Data:*** |  |  |  |  |
| &nbsp;&nbsp;**GAAP fully diluted earnings per share (11)** | 0.05 | $0.74 | $0.46 | $3.80 |
| Allocation of net income to noncontrolling interests | 0.00 | 0.00 | 0.00 | (0.01) |
| Exchangeable preferred limited partnership units non-cash preferred dividends | 0.00 | 0.00 | 0.00 | 0.02 |
| Total pre-tax adjustments (from above) | 0.27 | (0.05) | 1.16 | (2.59) |
| Income tax adjustment to reflect adjusted earnings taxes | (0.01) | (0.02) | (0.14) | 0.53 |
| Other | 0.01 | (0.02) | 0.01 | (0.12) |
| **Post-tax Adjusted Earnings Per Share ("Adjusted Earnings EPS")** | $0.32 | $0.65 | $1.49 | $1.64 |
| **Pre-tax adjusted earnings per share** | $0.36 | $0.82 | $1.80 | $2.04 |
| **Fully diluted weighted-average shares of common stock outstanding** | 236304 | 254318 | 245177 | 263954 |

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**Notes to the above table:**

(1) Newmark's GAAP provision (benefit) for income taxes is calculated based on an annualized methodology. Newmark includes additional tax-deductible items when calculating the provision (benefit) for taxes with respect to Adjusted Earnings using an annualized methodology. These include tax-deductions related to equity-based compensation, and certain net-operating loss carryforwards. The adjustment in the tax provision to reflect Adjusted Earnings is shown below (in millions):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| GAAP provision for (benefit from) income taxes | $5.7 | $36.4 | $41.4 | $243.0 |
| Income tax adjustment to reflect Adjusted Earnings | 2.2 | 6.3 | 34.3 | (141.2) |
| Provision for income taxes for Adjusted Earnings | $7.9 | $42.7 | $75.7 | $101.8 |

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(2) Primarily represents portion of Newmark's net income pro-rated for Cantor and BGC employees ownership percentage and the noncontrolling portion of Newmark's net income in subsidiaries.

(3) The components of equity-based compensation and allocations of net income to limited partnership units and FPUs are as follows (in millions):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| | 2022 | 2021 | 2022 | 2021 |
| Issuance of common stock and exchangeability expenses | $23.1 | $14.5 | $92.3 | $312.7 |
| Allocations of net income (loss) | 3.3 | 17.1 | 16.1 | 55.2 |
| Limited partnership units amortization | 0.3 | 3.7 | 5.5 | (28.4) |
| RSU Amortization Expense | 6.0 | 5.3 | 21.8 | 16.9 |
| Equity-based compensation and allocations of net income to limited partnership units and FPUs | $32.7 | $40.6 | $135.7 | $356.4 |

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(4) Includes compensation expenses related to the cash impact of the 2021 Equity Event of $203.8 million for the full year ended December 31, 2021. Also includes compensation expenses related to severance charges as a result of the cost savings initiatives of $0.0 million and $0.5 million for the three months ended December 31, 2022 and 2021, respectively, and $0.0 million and $2.5 million for the years ended December 31, 2022 and 2021, respectively. Also includes commission charges related to non-cash GAAP gains attributable to OMSR revenues of ($0.4) million and $2.1 million for the three months ended December 31, 2022, and 2021, respectively, and $2.1 million and $3.5 million for the years ended December 31, 2022, and 2021.

(5) Includes Non-cash GAAP charges related to the amortization of intangibles with respect to acquisitions.

(6) Adjusted Earnings calculations exclude non-cash GAAP amortization of mortgage servicing rights (which Newmark refers to as "MSRs"). Subsequent to the initial recognition at fair value, MSRs are carried at the lower of amortized cost or fair value and amortized in proportion to the net servicing revenue expected to be earned. However, it is expected that any cash received with respect to these servicing rights, net of associated expenses, will increase Adjusted Earnings in future periods.

(7) Primarily includes asset impairments and credits the Company does not consider a part of its ongoing operations of $24.1 million and $3.1 million for the three months ended December 31, 2022 and 2021, respectively, and $34.0 million and $15.0 million for the years ended December 31, 2022 and 2021, respectively. Includes legal settlements of ($0.2) million and $2.8 million for the three months and year ended December 31, 2021, respectively. There were no legal settlements for the three months and year ended December 31, 2022.

(8) Adjusted Earnings calculations exclude non-cash GAAP gains attributable to originated mortgage servicing rights (which Newmark refers to as "OMSRs"). Under GAAP, Newmark recognizes OMSRs equal to the fair value of servicing rights retained on mortgage loans originated and sold.

(9) The components of non-cash, non-dilutive, non-economic items are as follows (in millions):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| Nasdaq Impact | $— | $(45.0) | $87.5 | $(1212.7) |
| Realized gain on investment |  |  |  | (27.8) |
| Unrealized (gain)/loss on marketable securities | 0.2 |  | 0.5 |  |
| (Gains)/losses on non-marketable securities | (1.0) | 0.9 | 12.9 | (1.6) |
| Asset impairment |  | 0.3 |  | 12.5 |
|  | $(0.8) | $(43.8) | $100.9 | $(1229.6) |

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(10) Excludes the noncontrolling portion of Newmark's net income in subsidiaries which are not wholly owned.

(11) Includes a reduction for dividends on preferred stock or exchangeable preferred partnership units of $0.0 million and $6.2 million for the three months and year ended December 31, 2021. (see Note 1 - and Basis of Presentation" in the Company's most recently filed Form 10-Q or Form 10-K.)

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| | | | | |
|:---|:---|:---|:---|:---|
| **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** |
| **RECONCILIATION OF GAAP NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA** | **RECONCILIATION OF GAAP NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA** | **RECONCILIATION OF GAAP NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA** | **RECONCILIATION OF GAAP NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA** | **RECONCILIATION OF GAAP NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA** |
| **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** |
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| **GAAP net income available to common stockholders** | $**9363** | $**149331** | $**86212** | $**750728** |
| **Adjustments:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income attributable to noncontrolling interests (1) | 6035 | 35779 | 29606 | 227406 |
| &nbsp;&nbsp;&nbsp;Provision for income taxes | 5689 | 36386 | 41412 | 242958 |
| &nbsp;&nbsp;&nbsp;OMSR revenue (2) | (21570) | (48230) | (109926) | (136405) |
| &nbsp;&nbsp;&nbsp;MSR amortization (3) | 28577 | 31937 | 109076 | 89791 |
| &nbsp;&nbsp;&nbsp;Other depreciation and amortization (4) | 18480 | 8987 | 56740 | 31937 |
| &nbsp;&nbsp;&nbsp;Equity-based compensation and allocations of net income to limited partnership units and FPUs (5) | 32707 | 40601 | 135681 | 356344 |
| &nbsp;&nbsp;&nbsp;Other adjustments (6) | 13642 | 5380 | 21134 | 20645 |
| &nbsp;&nbsp;&nbsp;Other non-cash, non-dilutive, non-economic items and Nasdaq (7) | (845) | (43791) | 100623 | (1025840) |
| &nbsp;&nbsp;&nbsp;Interest expense | 10126 | 9007 | 40120 | 39898 |
| **Adjusted EBITDA ("AEBITDA")** | $**102204** | $**225387** | **$510678** | **$597462** |

---

(1) Primarily represents portion of Newmark's net income pro-rated for Cantor and BGC employees ownership percentage and the noncontrolling portion of Newmark's net income in subsidiaries.

(2) Non-cash gains attributable to originated mortgage servicing rights.

(3) Non-cash amortization of mortgage servicing rights in proportion to the net servicing revenue expected to be earned.

(4) Includes fixed asset depreciation and impairment of $15.1 million and $6.6 million for the three months ended December 31, 2022 and 2021, respectively, and $42.4 million and $23.1 million for the years ended December 31, 2022 and 2021, respectively. Also includes intangible asset amortization related to acquisitions of $3.4 million and $2.4 million for the three months ended December 31, 2022 and 2021, respectively, and $14.3 million and $8.9 million for the years ended December 31, 2022 and 2021, respectively.

(5) Please refer to Footnote 3 under Reconciliation of GAAP Net Income (Loss) Available to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests and GAAP Fully Diluted EPS to Post-tax Adjusted EPS for additional information about the components of "Equity-based compensation and allocations of net income to limited partnership units and FPUs".

(6) The components of other adjustments are as follows (in millions):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Three Months Ended December 31, | Three Months Ended December 31, | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2022** | **2021** | **2022** | **2021** |
| Severance charges | $— | $0.5 | $— | $2.5 |
| Assets impairment not considered a part of ongoing operations | 14.0 | 2.8 | 19.0 | 14.7 |
| Commission charges related to non-GAAP gains attributable to OMSR revenues and others | (0.4) | 2.1 | 2.1 | 3.5 |
|  | $13.6 | $5.4 | $21.1 | $20.7 |

---

For the three months and year ended December 31, 2022, asset impairments included lease impairments related to acquired businesses.

(7) Please refer to Footnote 9 under Reconciliation of GAAP Net Income (Loss) Available to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests and Taxes and GAAP Fully Diluted EPS to Post-tax Adjusted EPS for additional information about the components of Other non-cash, non-dilutive, non-economic items. Also, includes expenses related to the cash Impact of the 2021 Equity Event of $203.8 million.

 18

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---

| | | | | |
|:---|:---|:---|:---|:---|
| **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** |
| **FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT** | **FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT** | **FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT** | **FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT** | **FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT** |
| **FOR GAAP AND ADJUSTED EARNINGS** | **FOR GAAP AND ADJUSTED EARNINGS** | **FOR GAAP AND ADJUSTED EARNINGS** | **FOR GAAP AND ADJUSTED EARNINGS** | **FOR GAAP AND ADJUSTED EARNINGS** |
| **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** |
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| &nbsp;&nbsp;&nbsp;Common stock outstanding | 171515 | 192742 | 180337 | 190179 |
| &nbsp;&nbsp;&nbsp;Limited partnership units |  | 25795 | 31903 |  |
| &nbsp;&nbsp;&nbsp;Cantor units |  | 24274 | 24656 |  |
| &nbsp;&nbsp;&nbsp;Founding partner units |  | 3809 | 3385 |  |
| &nbsp;&nbsp;&nbsp;RSUs | 1845 | 5965 | 3255 | 4309 |
| &nbsp;&nbsp;&nbsp;Other | 431 | 1733 | 1641 | 1324 |
| **Fully diluted weighted-average share count for GAAP** | **173790** | **254318** | **245177** | **195812** |
| Adjusted Earnings Adjustments: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common stock outstanding |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Limited partnership units | 34738 |  |  | 40085 |
| &nbsp;&nbsp;&nbsp;Cantor units | 24679 |  |  | 23841 |
| &nbsp;&nbsp;&nbsp;Founding partner units | 3097 |  |  | 4215 |
| &nbsp;&nbsp;&nbsp;RSUs |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other |  |  |  |  |
| **Fully diluted weighted-average share count for Adjusted Earnings** | **236304** | **254318** | **245177** | **263953** |

---

___________________________________________________________________________________________________________________________________

---

| | | |
|:---|:---|:---|
| **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** |
| **LIQUIDITY ANALYSIS** | **LIQUIDITY ANALYSIS** | **LIQUIDITY ANALYSIS** |
| **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **(unaudited)** | **(unaudited)** | **(unaudited)** |
| | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| Cash and cash equivalents | $233016 | $191332 |
| Marketable securities (1) | 788 | 524569 |
| Repurchase agreements and securities loaned | $— | $(140007) |
| &nbsp;&nbsp;&nbsp;Total | $233804 | $575894 |

---

(1) In addition to the total Liquidity figures shown above, Newmark's undrawn availability on the Credit Facility was $600.0 million and $465.0 million as of December 31, 2022 and December 31, 2021, respectively.

 19

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 20

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---

| | | | | |
|:---|:---|:---|:---|:---|
| **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** | **NEWMARK GROUP, INC.** |
| **Reconciliation of GAAP pre-tax income to GAAP pre-tax income excluding other income and the 2021 Equity Event** | **Reconciliation of GAAP pre-tax income to GAAP pre-tax income excluding other income and the 2021 Equity Event** | **Reconciliation of GAAP pre-tax income to GAAP pre-tax income excluding other income and the 2021 Equity Event** | **Reconciliation of GAAP pre-tax income to GAAP pre-tax income excluding other income and the 2021 Equity Event** | **Reconciliation of GAAP pre-tax income to GAAP pre-tax income excluding other income and the 2021 Equity Event** |
| **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** |
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| GAAP income before income taxes and noncontrolling interests ("GAAP pre-tax income") | $21087 | $221496 | $157230 | $1221092 |
| Other income (including the Impact of Nasdaq) | (3730) | (45173) | 97701 | (1232495) |
| 2021 Equity Event |  |  |  | 444557 |
| **GAAP pre-tax income excluding other income and the 2021 Equity Event** | $17357 | $176323 | $254931 | $433154 |

---

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**ABOUT NEWMARK**

Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries ("Newmark"), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Newmark's comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, and startups to blue-chip companies. Combining the platform's global reach with market intelligence in both established and emerging property markets, Newmark provides superior service to clients across the industry spectrum. Newmark generated revenues of approximately $2.7 billion for the year ending December 31, 2022. Newmark's company-owned offices, together with its business partners, operate from approximately 180 offices with nearly 6,700 professionals around the world. To learn more, visit nmrk.com or follow @newmark.

**DISCUSSION OF FORWARD-LOOKING STATEMENTS ABOUT NEWMARK**

Statements in this document regarding Newmark that are not historical facts are "forward-looking statements" that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. These include statements about the effects of the COVID-19 pandemic on the Company's business, results, financial position, liquidity, and outlook, which may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected. Except as required by law, Newmark undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to, the risk factors and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K.

**MEDIA CONTACT:**

Karen Laureano-Rikardsen

+1 212-829-4975

**INVESTOR CONTACT:**

Jason McGruder

John Brennan

+1 212-829-7124

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