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Item 8. Financial Statements and Supplementary Data

2023-03-16 compared with 2022-03-01 · 557 added, 668 removed, 1589 unchanged (44% of the section changed)

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Audited Financial Statements of Newmark Group Inc.:

Reports of Independent Registered Public Accounting Firm and Independent Auditors (PCAOB ID 42 )

Reports of Independent Registered Public Accounting Firm (PCAOB ID 42 )

Consolidated Balance Sheets 102

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Newmark Group, Inc (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, cash flows and changes in equity for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Newmark Group, Inc.

(the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, cash flows and changes in equity for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), as applicable and our report dated February 28, 2022 expressed an unqualified opinion thereon .

Adoption of New Accounting Standard

As discussed in Note 3 to the consolidated financial statements, the Company changed its method of accounting for credit losses in 2020.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 16, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

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Auditing management’s valuation of MSRs was complex and required significant judgment due to the estimation used by the Company in determining the fair value of the MSRs.

In particular, the fair value estimates were sensitive to significant assumptions such as prepayment rates, cost of servicing, escrow earnings rates, discount rates and servicing multiples, which are affected by expectations about future market or economic conditions derived, in part, from historical data.

In particular, the fair value estimates were sensitive to significant assumptions such as prepayment rates, cost of servicing, escrow earnings rates, and discount rates, which are affected by expectations about future market or economic conditions derived, in part, from historical data.

How We Addressed the Matter in Our Audit

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For example, we compared the significant assumptions to the Company’s historical results and current industry, market and economic trends.

We evaluated the Company’s use of the valuation model that calculates the present value of the future net servicing cash flows and validated the completeness and accuracy of selected inputs to the model.

We evaluated the Company’s use of the valuation model that calculates the present value of the future net servicing cash flows as well as the completeness and accuracy of selected inputs to the model.

We also performed a sensitivity analysis of the significant assumptions to evaluate the changes in fair value resulting from changes in selected assumptions.

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New York, New York

February 28, 2022

March 16, 2023

Report of Independent Registered Public Accounting Firm

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

and Space Management which is included in the 2021 consolidated financial statements of the Company and constituted 5.87% and 5.17% of total assets, 2.36% and 2.38% of net assets, respectively as of December 31, 2021 and 1.91% and 1.62% of revenues and (3.49%) and (0.04%) of net income, respectively for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Knotel, Inc.

and Space Management.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), cash flows and changes in equity for each of the three years in the period ended December 31, 2021, and the related notes and our report dated February 28, 2022 expressed an unqualified opinion thereon.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of BH2, McCall & Almy, Inc., and Open Realty Advisors and Open Realty Properties which are included in the 2022 consolidated financial statements of the Company and constituted 1.53%, 0.13% and 0.13% of total assets, 3.78%, (0.01%) and (0.01%) of net assets, respectively as of December 31, 2022 and 0.23%, 0.18% and 0.25% of revenues and 1.51%, (0.17%) and (0.12%) of net income, respectively for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of BH2, McCall & Almy, Inc., and Open Realty Advisors and Open Realty Properties.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, cash flows and changes in equity for each of the three years in the period ended December 31, 2022, and the related notes and our report dated March 16, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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New York, New York

February 28, 2022

March 16, 2023

NEWMARK GROUP, INC.

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(In thousands, except share and per share amounts)

December 31, 2022 December 31, 2021

Current assets:

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Accounts payable, accrued expenses and other liabilities (see Note 29) 511,584 528,746

6.125 % Senior Notes

Repurchase agreements and securities loaned — 140,007

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2022 2021 2020

Commissions $ 1,765,247 $ 967,948 $ 1,396,035

Gains from mortgage banking activities/originations, net 225,481 310,914 198,085

Management services, servicing fees and other $ 909,485 $ 915,715 $ 626,136

Leasing and other commissions 831,874 826,942 513,842

Investment sales 606,416 757,744 403,971

Commercial mortgage origination, net 357,752 406,042 361,049

Total revenues 2,705,527 2,906,443 1,904,998

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Fully diluted weighted-average shares of common stock outstanding 245,177 195,813 179,690

(1) Includes a reduction for dividends on preferred stock or EPUs in the amount of $ 6.2 million, $ 9.8 million and $ 12.9 million for the years ended December 31, 2021, 2020 and 2019, respectively.

(see Note 1 — “Organization and Basis of Presentation”).

(1) Includes a reduction for dividends on EPUs in the amount of $ 6.2 million and $ 9.8 million for the years ended December 31, 2021 and 2020, respectively (see Note 1 — “Organization and Basis of Presentation”).

The accompanying Notes to the Consolidated Financial Statements are an integral part of these financial statements.

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Consolidated net income — — — — — 80,060 — 29,217 109,277

Foreign currency transaction adjustments — — — — — — ( 1,776 ) ( 402 ) ( 2,178 )

Cumulative effect of credit loss standard adoption — — — — — ( 17,458 ) — ( 3,655 ) ( 21,113 )

Dividends to common stockholders — — — — — ( 23,171 ) — — ( 23,171 )

Preferred dividend on exchangeable preferred partnership units — — — — — ( 12,900 ) — 12,900 —

Dividend on EPUs — — — — — ( 9,779 ) — 9,779 —

Earnings distributions to limited partnership interests and other noncontrolling interests — — — — — — — ( 22,365 ) ( 22,365 )

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— — — ( 5,637 ) — — ( 1,180 ) ( 6,817 )

Issuance and redemption of limited partnership units including contingent units — — 266 111 — — — ( 377 ) —

Restricted stock units compensation — — 7,648 — — — — 3,642 11,290

Redemption of EPU's — — — — — — — ( 93,480 ) ( 93,480 )

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Consolidated net income — — — — — 750,728 — 227,406 978,134

Foreign currency transaction adjustments — — — — — — ( 1,776 ) ( 402 ) ( 2,178 )

Cumulative effect of credit loss standard adoption — — — — — ( 17,458 ) — ( 3,655 ) ( 21,113 )

Foreign currency translation adjustments — — — — — — ( 637 ) ( 195 ) ( 832 )

Cantor purchase of Cantor units from Newmark Holdings upon redemption/ exchange of FPU's, 1,831,924 units

— — — — — — — 6,898 6,898

Dividends to common stockholders — — — — — ( 7,631 ) — — ( 7,631 )

Preferred dividend on exchangeable preferred partnership units — — — — — ( 9,779 ) — 9,779 —

Non-Controlling interest in Deskeo — — — — — — — 13,464 13,464

Issuance of Class A common stock for acquisition — — 2,577 — — — 423 3,000

Dividend on EPUs — — — — — ( 6,200 ) — 6,200 —

Earnings distributions to limited partnership interests and other noncontrolling interests — — — — — — — 1,805 1,805

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264 — 104,121 — — — — 61,259 165,644

Contributions of capital to and from Cantor for equity-based compensation — — 19,348 — — — — 8,664 28,012

Repurchase of 20,237,430 shares of Class A Common Stock

— — — — ( 249,643 ) — — ( 40,541 ) ( 290,184 )

Issuance and redemption of limited partnership units including contingent units — — 266 111 — — — ( 377 ) —

Restricted stock units compensation — — 9,951 — — — — 2,181 12,132

Redemption of EPU's — — — — — — — ( 167,396 ) ( 167,396 )

Other — — 624 — — — ( 318 ) — 306

December 31, 2021 $ 1,940 $ 212 $ 487,447 $ 1,572 $ ( 290,174 ) $ 1,079,661 $ ( 2,731 ) $ 386,266 $ 1,664,193

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Foreign currency translation adjustments — — — — — — ( 9,258 ) ( 1,775 ) ( 11,033 )

Cantor purchase of Cantor units from Newmark Holdings

upon redemption/ exchange of FPU's, 1,831,924 units

Cantor purchase of Cantor units from Newmark Holdings upon redemption/ exchange of FPU's, 415,432 units

— — — — — — — 1,582 1,582

Dividends to common stockholders — — — — — ( 17,930 ) — — ( 17,930 )

Non-Controlling interest in Deskeo — — — — — — — 13,464 13,464

Issuance of Class A common stock for acquisition — — 2,577 — — — — 423 3,000

Preferred dividend on EPUs — — — — — ( 6,200 ) — 6,200 —

Earnings distributions to limited partnership interests

and other noncontrolling interests — — — — — — — 1,805 1,805

Grant of exchangeability, redemption and issuance of

Class A common stock, 27,333,907 shares

Earnings distributions to limited partnership interests and other noncontrolling interests — — — — — — — ( 51,006 ) ( 51,006 )

Grant of exchangeability, redemption and issuance of Class A common stock, 7,030,716 shares

71 — 82,161 ( 1,572 ) — — — 22,520 103,180

Contributions of capital to and from Cantor for

equity-based compensation — — 19,348 — — — — 8,664 28,012

Contributions of capital to and from Cantor for equity-based compensation — — 2,097 — — — — 471 2,568

Repurchase of 24,918,482 shares of Class A Common Stock

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Restricted stock units compensation — — 13,004 — — — — 2,564 15,568

Redemption of EPU's — — — — — — — ( 167,396 ) ( 167,396 )

Balance, December 31, 2022 $ 2,011 $ 212 $ 584,709 $ — $ ( 538,612 ) $ 1,145,006 $ ( 11,989 ) $ 343,528 $ 1,524,865

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Consolidated net income $ 112,545 $ 978,134 $ 109,277

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Gain on originated mortgage servicing rights ( 147,789 ) ( 193,913 ) ( 103,160 )

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Gains on originated mortgage servicing rights ( 130,301 ) ( 147,789 ) ( 193,913 )

Depreciation and amortization 165,816 121,729 141,193

Lease impairment 14,363 — —

Nasdaq earn-out recognition — ( 1,108,012 ) ( 121,906 )

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Unrealized (gains) on loans held for sale ( 712 ) ( 21,259 ) ( 24,295 )

Unrealized gain on investment ( 27,825 ) — —

(Gains) Loss from an equity method investment — 11,562 ( 7,250 )

Realized (gain) loss on marketable securities ( 24,468 ) 2,204 ( 4,056 )

Unrealized gain on marketable securities ( 77,266 ) ( 5,004 ) ( 11,303 )

Realized loss (gains) on non-marketable investments ( 1,590 ) 84,186 ( 12,159 )

Unrealized (gains) on investments — ( 27,825 ) —

(Gains) losses from an equity method investment ( 2,842 ) — 11,562

Realized losses (gains) on marketable securities 7,470 ( 24,468 ) 2,204

Unrealized losses (gains) on marketable securities 80,657 ( 77,266 ) ( 5,004 )

Unrealized losses (gains) on non-marketable investments 12,888 ( 1,590 ) 84,186

Change in valuation of derivative asset — 12,475 13,680

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Payables to related parties ( 5,294 ) 366 ( 25,989 )

Net cash (used in) provided by operating activities ( 48,709 ) ( 777,694 ) 986,761

Net cash provided by (used in) operating activities 1,196,343 ( 48,709 ) ( 777,694 )

CASH FLOWS FROM INVESTING ACTIVITIES:

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Proceeds from the sale of marketable securities 437,820 551,064 34,738

Purchase of marketable securities ( 32 ) — —

Purchase of non-marketable investments ( 2,723 ) ( 8,500 ) —

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Purchases of fixed assets ( 62,189 ) ( 19,721 ) ( 19,626 )

Purchase of MSRs — ( 200 ) ( 1,489 )

Net cash (used in) provided by investing activities 453,088 ( 3,602 ) ( 56,788 )

Purchase of mortgage servicing rights — — ( 200 )

Net cash provided by (used in) investing activities 308,629 453,088 ( 3,602 )

CASH FLOWS FROM FINANCING ACTIVITIES:

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Proceeds from the sale of limited partnership interests — 6,898 —

Settlement of pre-Spin-Off related party receivables — — 33,892

Borrowing of debt — 55,000 365,000

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Treasury stock repurchases ( 294,802 ) ( 290,538 ) ( 6,364 )

Earnings distributions to limited partnership interests and other noncontrolling interests ( 14,907 ) ( 81,879 ) ( 140,576 )

Earnings and tax distributions to limited partnership interests and other noncontrolling interests ( 80,984 ) ( 14,907 ) ( 81,879 )

Dividends to stockholders ( 17,933 ) ( 7,631 ) ( 23,171 )

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Deferred financing costs ( 5,054 ) ( 1,479 ) ( 4,067 )

Net cash (used in) provided by financing activities ( 396,278 ) 817,823 ( 895,506 )

Net cash provided by (used in) financing activities ( 1,458,520 ) ( 396,278 ) 817,823

Net increase in cash and cash equivalents and restricted cash 46,452 8,101 36,527

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Year Ended December 31,

Supplemental disclosures of cash flow information:

2022 2021 2020

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(1) Organization and Basis of Presentation

Newmark Group, Inc., formerly known as Newmark Knight Frank (together with its subsidiaries, “Newmark” or the “Company”), a Delaware corporation, was formed as NRE Delaware, Inc.

Newmark Group, Inc.

(together with its subsidiaries, “Newmark” or the “Company”), a Delaware corporation, was formed as NRE Delaware, Inc.

on November 18, 2016.

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Newmark’s occupier services and products include tenant representation, real estate management technology systems, workplace and occupancy strategy, global corporate consulting services, project management, lease administration and facilities management.

Newmark's global flexible workspace platform, which operates under the names Knotel and Deskeo, is a product that is offered to owners and investors.

Newmark enhances these services and products through innovative real estate technology solutions and data analytics that enable clients to increase their efficiency and profits by optimizing their real estate portfolio.

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The total consideration received in the transaction included $ 750.0 million in cash paid upon closing and an earn-out of up to 14,883,705 shares of Nasdaq shares to be paid ratably over 15 years, provided that Nasdaq, as a whole, produces at least $ 25.0 million in consolidated gross revenues each year (the “Nasdaq Earn-out”).

The remaining rights under the Nasdaq Earn-out were transferred to Newmark on September 28, 2017 as part of the transaction (see below for further discussion and Note 7 — “Marketable Securities” for additional information).

The remaining rights under the Nasdaq Earn-out were transferred to Newmark on September 28, 2017.

From September of 2017 through June of 2021, Newmark received 10.2 million shares of Nasdaq.

From January of 2018 to March of 2022, Newmark sold 7.6 million shares of Nasdaq and delivered 2.6 million shares of Nasdaq to the Royal Bank of Canada ("RBC"), and recognized $ 1,474.2 million of realized gains and dividend income.

Newmark did not hold any Nasdaq shares as of December 31, 2022.

See below for further discussion and Note 7 — “Marketable Securities” for additional information.

Exchangeable Preferred Partnership Units and Nasdaq Forward Contracts

On June 18, 2018 and September 26, 2018, Newmark OpCo issued approximately 175.0 million and 150.0 million of exchangeable preferred partnership units (“EPUs”), respectively, in private transactions to the Royal Bank of Canada (“RBC”) (the “Newmark OpCo Preferred Investment”).

On June 18, 2018 and September 26, 2018, Newmark OpCo issued approximately 175.0 million and 150.0 million of exchangeable preferred partnership units (“EPUs”), respectively, in private transactions to RBC (together the “Newmark OpCo Preferred Investment”).

Newmark received $ 266.1 million of cash in 2018 with respect to these transactions.

The EPUs were issued in four tranches and are separately convertible by either RBC or Newmark into a fixed number of shares of Newmark Class A common stock, subject to a revenue hurdle in each of the fourth quarters of 2019 through 2022 for each of the respective four tranches.

The ability to convert the EPUs into Newmark Class A common stock is subject to the special purpose vehicle's (the “SPVs”) option to settle the postpaid forward contracts as described below.

As the EPUs represent equity ownership of a consolidated subsidiary of Newmark, they have been included in “Noncontrolling interests” on the accompanying consolidated balance sheets and consolidated statements of changes in equity.

The EPUs are entitled to a preferred payable-in-kind dividend, which is recorded as accretion to the carrying amount of the EPUs through Retained earnings on the accompanying consolidated statements of changes in equity and are reductions to “Net income (loss) available to common stockholders” for the purpose of calculating earnings per share.

Contemporaneously with the issuance of the EPUs, an SPV that is a consolidated subsidiary of Newmark entered into variable postpaid forward contracts with RBC (together, the “Nasdaq Forwards”).

The SPV is an indirect subsidiary of Newmark whose sole assets are the Nasdaq Earn-outs for 2019 through 2022.

The Nasdaq Forwards provide the SPV the option to settle using up to 992,247 Nasdaq shares, to be received by the SPV pursuant to the Nasdaq Earn-out shares to be received (see Note 7 — “Marketable Securities”), or Newmark Class A common stock, in exchange for either cash or redemption of the EPUs, notice of which must be provided to RBC prior to November 1 of each year from 2019 through 2022.

The EPUs were issued in four tranches and were separately convertible by either RBC or Newmark into a fixed number of shares of Newmark Class A common stock, subject to a revenue hurdle in each of the fourth quarters of 2019 through 2022 for each of the respective four tranches.

The ability to convert the EPUs into Newmark Class A common stock was subject to the special purpose vehicle's (the “SPVs”) option to settle the postpaid forward contracts as described below.

As the EPUs represented equity ownership of a consolidated subsidiary of Newmark, they were included in “Noncontrolling interests” on the accompanying consolidated balance sheets and consolidated statements of changes in equity.

The EPUs were entitled to a preferred payable-in-kind dividend, which was recorded as accretion to the carrying amount of the EPUs through Retained earnings on the accompanying consolidated statements of changes in equity and were reductions to “Net income (loss) available to common stockholders” for the purpose of calculating earnings per share.

Contemporaneously with the issuance of the EPUs, a SPV that is a consolidated subsidiary of Newmark entered into variable postpaid forward contracts with RBC (together, the “Nasdaq Forwards”).

The SPV was an indirect subsidiary of Newmark whose sole assets were the Nasdaq Earn-outs for 2019 through 2022.

Each of the Nasdaq Forwards provided the SPV the option to settle using up to 992,247 Nasdaq shares, to be received by the SPV pursuant to the Nasdaq Earn-out shares to be received (see Note 7 — “Marketable Securities”), or Newmark Class A common stock, in exchange for either cash or redemption of the EPUs, notice of which was to be provided to RBC prior to November 1 of each year from 2019 through 2022.

In September 2020, the SPV notified RBC of its decision to settle the second Nasdaq Forward using the Nasdaq shares the SPV received in November 2020 in exchange for the second tranche of the EPUs, which resulted in a payable to RBC that was settled upon receipt of Nasdaq Earn-out shares.

The fair value of the Nasdaq common shares that Newmark received was $ 121.9 million.

The fair value of the Nasdaq common shares that Newmark received was

$ 121.9 million.

On November 30, 2020, Newmark settled the second Nasdaq Forward 741,505 Nasdaq shares, with a fair value of $ 93.5 million and Newmark retained 250,742 Nasdaq shares.

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fixed income business, which accelerated Newmark’s receipt of Nasdaq shares.

Newmark received 6,222,340 Nasdaq shares, with a fair value of $ 1,093.9 million based on the closing price on June 30, 2021 included in “Other (loss) income, net” for the year ended December 31, 2021 on the accompanying consolidated statement of operations.

As of December 31, 2021, Newmark has 2,497,831 Nasdaq shares, with a fair value of $ 524.6 million.

On June 25, 2021, the SPV notified RBC of its decision to settle the third and fourth Nasdaq Forwards using the Nasdaq shares the SPV received on June 25, 2021.

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The 2021 Equity Event also accelerated certain compensation expenses resulting in $ 428.6 million of compensation charges.

These charges, along with the use of $ 101.0 million of net deferred tax assets, are expected to offset a significant percentage of the Company's taxes related to the 2021 Equity Event.

These charges, along with the use of $ 101.0 million of net deferred tax assets, offset a significant percentage of the Company's taxes related to the Nasdaq Earn-out.

These partnership units were settled using a $ 12.50 share price.

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("BGC Holdings") held by the Company's partners who are employees were redeemed or exchanged.

• 23.2 million and 17.4 million compensatory limited partnership units, respectively, of Newmark Holdings.

and BGC Holdings.

held by the Company's partners who are independent contractors were redeemed or exchanged.

• 23.2 million and 17.4 million compensatory limited partnership units, respectively, of Newmark Holdings and BGC Holdings held by the Company's partners who are independent contractors were redeemed or exchanged.

The Company also accelerated the payment of related withholding taxes to them with respect to their Newmark units.

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Securities and Exchange Commission and in conformity with accounting principles generally accepted in the U.S.

For the year ended December 31, 2019, Newmark changed the line item formerly known as “Allocations of net income and grant of exchangeability to limited partnership units and FPUs and issuance of common stock” to “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the accompanying consolidated statements of operations and statements of cash flow.

The change resulted in the reclassification of amortization charges related to equity-based awards, such as REUs and Restricted Stock Units (“RSUs”), from “Compensation and employee benefits” to

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

“Equity-based compensation and allocations of net income to limited partnership units and FPUs” reflect the following items related to cash and equity-based compensation:

“Equity-based compensation and allocations of net income to limited partnership units and founding/working partner units (“FPUs”)” reflects the following items related to cash and equity-based compensation:

• Charges with respect to the grant of shares of common stock or limited partnership units, such as HDUs, including in connection with the redemption of non-exchangeable limited partnership units, including PSUs;

• Charges with respect to grants of exchangeability, such as the right of holders of limited partnership units with no capital accounts, such as PSUs, to exchange the units into shares of common stock, or HDUs, as well as the cash paid in the settlement of the related exchangeable preferred units to pay withholding taxes owed by the unit holder upon such exchange;

• Preferred units are granted in connection with the grant of certain limited partnership units, such as PSUs, that may be granted exchangeability to cover the withholding taxes owed by the unit holder, rather than issuing the gross amount of shares to employees, subject to cashless withholding of shares to pay applicable withholding taxes;

• Preferred units granted in connection with the grant of certain limited partnership units, such as PSUs, that may be granted exchangeability to cover the withholding taxes owed by the unit holder, rather than issuing the gross amount of shares to employees, subject to cashless withholding of shares to pay applicable withholding taxes;

• Charges related to the amortization of RSUs and REUs;

• Allocations of net income to limited partnership units and founding/working partner units (“FPUs”), including the Preferred Distribution (as hereinafter defined).

• Allocations of net income to limited partnership units and FPUs, including the Preferred Distribution (as hereinafter defined).

Intercompany balances and transactions within Newmark have been eliminated.

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Where it is possible to specifically attribute such expenses to activities of Newmark, these amounts have been expensed directly to Newmark.

Allocation of all other such expenses is based on a services agreement between Cantor which reflects the utilization of service provided or benefits received by Newmark during the periods presented on a consistent basis, such as headcount, square footage, revenue, etc.

Allocation of all other such expenses is based on a services agreement with Cantor which reflects the utilization of service provided or benefits received by Newmark during the periods presented on a consistent basis, such as headcount, square footage, revenue, etc.

Management believes the assumptions underlying the stand-alone financial statements, including the assumptions regarding allocated expenses, reasonably reflect the utilization of services provided to or the benefit received by Newmark during the periods presented.

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(b) Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No.

2016-02, Leases (Topic 842) .

This standard requires lessees to recognize a Right-of-use (“ROU”) asset and lease liability for all leases with terms of more

than 12 months.

Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease.

The amendments also require certain quantitative and qualitative disclosures.

Accounting guidance for lessors is mostly unchanged.

In July 2018, the FASB issued ASU No.

2018-10, Codification Improvements to Topic 842, Leases , to clarify how to apply certain aspects of the new leases standard.

The amendments address the rate implicit in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments, among other issues.

In addition, in July 2018, the FASB issued ASU No.

2018-11, Leases (Topic 842) , Targeted Improvements , which provided an additional (and optional) transition method to adopt the new leases standard.

Under the new transition method, a reporting entity would initially apply the new lease requirements at the effective date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption;

continue to report comparative periods presented in the financial statements in the period of adoption in accordance with legacy U.S.

GAAP (i.e., ASC 840, Leases );

and provide the required disclosures under ASC 840 for all periods presented under legacy U.S.

Further, ASU No.

2018-11 contains a practical expedient that allows lessors to avoid separating lease and associated non-lease components within a contract if certain criteria are met.

In December 2019, the FASB issued ASU No.

2018-20, Leases (Topic 842), Narrow-Scope Improvements for Lessors , to clarify guidance for lessors on sales taxes and other similar taxes collected from lessees, certain lessor costs and recognition of variable payments for contracts with lease and non-lease components.

In March 2019, the FASB issued ASU No.

2019-01, Leases (Topic 842), Codification Improvements , to clarify certain application and transitional disclosure aspects of the new leases standard.

The amendments address determination of the fair value of the underlying asset by lessors that are not manufacturers or dealers and clarify interim period transition disclosure requirements, among other issues.

The guidance in ASUs No.

2016-02, 2018-10, 2018-11 and 2018-20 was effective beginning January 1, 2019, with early adoption permitted;

whereas the guidance in ASU No.

2019-01 is effective beginning January 1, 2020, with early adoption permitted.

Newmark adopted the above mentioned standards on January 1, 2019 using the effective date as the date of initial application.

Therefore, pursuant to this transition method, financial information was not updated, and the disclosures required under the new leases standards were not provided for dates and periods before January 1, 2019.

The guidance provides a number of optional practical expedients to be utilized by lessees upon transition.

Accordingly, Newmark elected the “package of practical expedients,” which permitted Newmark not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs.

Newmark did not elect the use-of-hindsight or the practical expedient pertaining to land easements, with the latter not being applicable to Newmark.

The new standard also provides practical expedients for an entity’s ongoing accounting as a lessee.

Newmark elected the short-term lease recognition exemption for all leases that qualify.

This means, for those leases that qualify, Newmark will not recognize ROU assets and lease liabilities, and this includes not recognizing ROU assets and lease liabilities for existing short-term leases of those assets upon transition.

Newmark also elected the practical expedient to not separate lease and non-lease components for all leases other than leases of real estate.

The primary non-lease component that is combined with a lease component represents operating expenses such as utilities, maintenance or management fees.

As a result, upon adoption, acting primarily as a lessee, Newmark recognized a $ 178.8 million ROU asset, net of tenant improvements, and a $ 226.7 million lease liability on the accompanying consolidated balance sheets for its real estate operating leases.

The adoption of the guidance did not have a material impact on the accompanying consolidated statements of operations, consolidated statements of changes in equity and consolidated statements of cash flows.

See Note 18 — “Leases” for additional information on Newmark’s leasing arrangements.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326) :

Measurement of Credit Losses on Financial Instruments, which requires financial assets that are measured at amortized cost to be presented, net of an allowance for credit losses, at the amount expected to be collected over their estimated life.

Expected credit losses for newly recognized financial assets, as well as changes to credit losses during the period, are recognized in earnings.

For certain purchased financial assets with deterioration in credit quality since origination (“PCD assets”), the initial allowance for expected credit losses will be recorded as an increase to the purchase price.

Expected credit losses, including losses on off-balance-sheet exposures, such as lending commitments, will be measured based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount.

In November 2018, the FASB issued ASU No.

2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses , to clarify that operating lease receivables accounted for under ASC 842, Leases , are not in the scope of the new credit losses guidance, and, instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases .

In April 2019, the FASB issued ASU No.

2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments .

The ASU makes changes to the guidance introduced or amended by ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments .

See below for the description of the amendments stipulated in ASU No.

In addition, in May 2019, the FASB issued ASU No.

2019-05, Financial Instruments-Credit Losses (Topic 326):

Targeted Transition Relief .

The amendments in this ASU allow entities, upon adoption of ASU No.

2016-13, to irrevocably elect the fair value option for financial instruments that were previously carried at amortized cost and are eligible for the fair value option under ASC 825-10, Financial Instruments:

In November 2019, the FASB issued ASU No.

2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses .

The amendments in this ASU require entities to include certain expected recoveries of the amortized cost basis previously written off, or expected to be written off, in the allowance for credit losses for PCD assets;

provide transition relief related to troubled debt restructurings;

allow entities to exclude accrued interest amounts from

certain required disclosures;

and clarify the requirements for applying the collateral maintenance practical expedient.

The amendments in ASUs No.

2018-19, 2019-04, 2019-05 and 2019-11 are required to be adopted concurrently with the guidance in ASU No.

Newmark adopted the standards on their required effective date beginning January 1, 2020.

The primary effect of adoption, on a pre-tax basis, resulted in a decrease in assets of $ 8.0 million, an increase in liabilities of $ 17.9 million and a decrease in retained earnings of $ 25.9 million, respectively.

In January 2017, the FASB issued ASU No.

2017-04, Intangibles-Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment , which eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment.

Under the amendments in the new ASU, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

Newmark adopted the standard on its required effective date beginning January 1, 2020, and the guidance was applied on a prospective basis starting with the goodwill impairment test during the year ended December 31, 2020.

The adoption of the new guidance did not have a material impact on the accompanying consolidated financial statements.

In August 2017, the FASB issued ASU No.

2017-12, Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities .

The guidance intends to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results.

To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements.

In October 2018, the FASB issued ASU No.

2018-16, Derivatives and Hedging (Topic 815):

Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes .

Based on concerns about the sustainability of LIBOR, in 2017, a committee convened by the Federal Reserve Board and the Federal Reserve Bank of New York identified a broad Treasury repurchase agreement (repo) financing rate referred to as the SOFR as its preferred alternative reference rate.

The guidance in ASU No.

2018-16 adds the OIS rate based on SOFR as a U.S.

benchmark interest rate to facilitate the LIBOR to SOFR transition and provide sufficient lead time for entities to prepare for changes to interest rate risk hedging strategies for both risk management and hedge accounting purposes.

The amendments in this ASU were required to be adopted concurrently with the guidance in ASU No.

The guidance became effective beginning January 1, 2019 and was required to be applied on a prospective and modified retrospective basis.

As Newmark currently does not designate any derivative contracts as hedges for accounting purposes, the adoption of this new guidance did not have a material impact on the accompanying consolidated financial statements.

In February 2018, the FASB issued ASU No.

2018-02, Income Statement — Reporting Comprehensive Income (Topic 220):

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.

The guidance helps organizations address certain stranded income tax effects in accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act by providing an option to reclassify these stranded tax effects to retained earnings in each period in which the effect of the change in the U.S.

federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded.

The standard became effective for Newmark on January 1, 2019.

The guidance was required to be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S.

federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized.

The adoption of the new guidance did not have a material impact on the accompanying consolidated financial statements.

In June 2018, the FASB issued ASU No.

2018-07, Compensation—Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting .

The guidance largely aligns the accounting for share-based payment awards issued to employees and nonemployees, whereby the existing employee guidance will apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost.

The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services.

In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards.

The standard became effective for Newmark on January 1, 2019.

The ASU was required to be applied on a prospective basis to all new awards granted after the date of adoption.

In addition, any liability-classified awards that were not settled and equity-classified awards for which a measurement date had not been established by the adoption date were remeasured at fair value as of the adoption date with a cumulative effect adjustment to opening retained earnings in the year of adoption.

Newmark adopted this standard on its effective date.

The adoption of the new guidance did not have a material impact on the accompanying consolidated financial statements.

In August 2018, the FASB issued ASU No.

2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement .

The guidance is part of the FASB’s disclosure framework project, whose objective and primary focus are to improve the effectiveness of disclosures in the notes to financial statements.

The ASU eliminates, amends and adds certain disclosure requirements for fair value measurements.

concluded that these changes improve the overall usefulness of the footnote disclosures for financial statement users and reduce costs for preparers.

Certain disclosures are required to be applied prospectively and other disclosures need to be adopted retrospectively in the period of adoption.

As permitted by the transition guidance in the ASU, Newmark early adopted eliminated and modified disclosure requirements as of September 30, 2018.

The early adoption of this standard did not have an impact on the accompanying consolidated financial statements.

The additional disclosure requirements were adopted by Newmark beginning January 1, 2020, and the adoption of these fair value measurement disclosures did not have an impact on Newmark’s accompanying consolidated financial statements.

See Note 26 — “Fair Value of Financial Assets and Liabilities” for additional information.

In August 2018, the FASB issued ASU No.

2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) .

The guidance on the accounting for implementation, setup, and other upfront costs (collectively referred to as implementation costs) applies to entities that are a customer in a hosting arrangement that is a service contract.

The amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).

The accounting for the service element of a hosting arrangement that is a service contract is not affected by the guidance in this ASU.

The new standard became effective beginning January 1, 2020.

The adoption of this guidance did not have a material impact on the accompanying consolidated financial statements.

In October 2018, the FASB issued ASU No.

2018-17, Consolidation (Topic 810):

Targeted Improvements to Related Party Guidance for Variable Interest Entities .

The guidance was issued in response to stakeholders’ observations that Topic 810, Consolidation , could be improved in the areas of applying the variable interest entity guidance to private companies under common control and in considering indirect interests held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interests.

The new standard became effective beginning January 1, 2020, with early adoption permitted, and must be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented.

Newmark adopted the standard on its effective date beginning January 1, 2020.

The adoption of this guidance did not have a material impact on the accompanying consolidated financial statements.

In April 2019, the FASB issued ASU No.

2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments .

The ASU amends guidance introduced or amended by ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326)-Measurement of Credit Losses on Financial Instruments , ASU No.

2017-12, Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities , and ASU No.

2016-01, Financial Instruments-Overall (Subtopic 825-10):

Recognition and Measurement of Financial Assets and Financial Liabilities .

The amendments to ASU No.

2016-13 clarify the scope of the credit losses standard and address guidance related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other issues.

With respect to amendments to ASU No.

2017-12, the guidance addresses partial-term fair value hedges, fair value hedge basis adjustments, and certain transition requirements, along with other issues.

The clarifying guidance pertaining to ASU No.

2016-01 requires an entity to remeasure an equity security without a readily determinable fair value accounted for under the measurement alternative at fair value in accordance with guidance in ASC 820, Fair Value Measurement ;

specifies that equity securities without a readily determinable fair value denominated in nonfunctional currency must be remeasured at historical exchange rates;

and provides fair value measurement disclosure guidance.

Newmark adopted this standard on the required effective date beginning January 1, 2020.

The adoption of the hedge accounting and the recognition and measurement guidance amendments did not have a material impact on the accompanying consolidated financial statements.

See above for the impact of adoption of the amendments related to the credit losses standard.

In July 2019, the FASB issued ASU No.

2019-07, Codification Updates to SEC Sections-Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No.

33-10532, Disclosure Update and Simplification, and Nos.

33-10231 and 33-10442, Investment Company Reporting Modernization, and Miscellaneous Updates .

The guidance clarifies or improves the disclosure and presentation requirements of a variety of codification topics by aligning them with already effective SEC final rules, thereby eliminating redundancies and making the codification easier to apply.

This ASU was effective upon issuance and did not have a material impact on the accompanying consolidated financial statements and related disclosures.

In November 2019, the FASB issued ASU No.

2019-08, Compensation-Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606):

Codification Improvements-Share-Based Consideration Payable to a Customer .

The ASU simplifies and increases comparability of accounting for nonemployee share-based payments, specifically those made to customers.

Under the new guidance, such awards will be accounted for as a reduction of the transaction price in revenue, but should be measured and classified following the stock compensation guidance in ASC 718, Compensation-Stock Compensation .

Newmark adopted standard on the required effective date beginning January 1, 2020.

The adoption of this guidance did not have a material impact on the accompanying consolidated financial statements.

In March 2020, the FASB issued ASU No.

2020-03, Codification Improvements to Financial Instruments .

This ASU makes narrow-scope amendments related to various aspects pertaining to financial instruments and related disclosures by clarifying or improving the Codification.

For the most part, the guidance was effective upon issuance, and the adoption of the standard did not have a material impact on the accompanying consolidated financial statements.

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

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The adoption of this guidance did not have a material impact on the accompanying consolidated financial statements.

In August 2020, the FASB issued ASU No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .

The standard is expected to reduce complexity and improve comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity.

The ASU also enhances information transparency by making targeted improvements to the related disclosures guidance.

Additionally, the amendments affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments.

Newmark adopted the standard on the required effective date beginning January 1, 2022, and it was applied using a modified retrospective method of transition.

The adoption of this guidance did not have a material impact on the accompanying consolidated financial statements.

In March 2020, the FASB issued ASU No.

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Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

The guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, and borrowings) necessitated by reference rate reform as entities transition away from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates.

The guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, and borrowings) necessitated by reference rate reform as entities transition away from LIBOR and other interbank offered rates to alternative reference rates.

This ASU also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by reference rate reform.

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2020-04, provisions of this ASU are effective upon issuance and generally can be applied through December 31, 2022.

Management is evaluating and planning for adoption of the new guidance, including forming a cross-functional LIBOR transition team to determine Newmark’s transition plan and facilitate an orderly transition to alternative reference rates, and continuing its assessment on the accompanying consolidated financial statements.

In August 2020, the FASB issued ASU No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .

The standard is expected to reduce complexity and improve comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity.

The ASU also enhances information transparency by making targeted improvements to the related disclosures guidance.

Additionally, the amendments affect the diluted EPS calculation for instruments that may be settled in cash or shares and for

convertible instruments.

The new standard became effective for Newmark beginning January 1, 2022 and can be applied using either a modified retrospective or a fully retrospective method of transition.

The adoption of this guidance is not expected to have a material impact on the accompanying consolidated financial statements.

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

The standard improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability, as well as payment terms and their effect on subsequent revenue recognized by the acquirer.

The ASU requires companies to apply guidance in ASC 606, Revenue from Contracts with Customers , to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination, and, thus, creates an exception to the general recognition and measurement principle in ASC 805, Business Combinations .

The new standard will become effective for Newmark beginning January 1, 2023, can be applied prospectively for business combinations occurring on or after the effective date, and early adoption is permitted.

Management is currently evaluating the impact of the new standard on the accompanying consolidated financial statements.

During the first quarter of 2022, Newmark elected to apply the practical expedients to modifications of qualifying contracts as continuation of the existing contract rather than as a new contract.

The adoption of the new guidance did not have a material impact on the accompanying consolidated financial statements.

In November 2021, the FASB issued ASU No.

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Disclosures by Business Entities about Government Assistance .

The standard requires business entities to make annual disclosures about transactions with a government they account for by analogizing to a grant or contribution accounting model.

The standard requires business entities to make annual disclosures about transactions

with a government they account for by analogizing to a grant or contribution accounting model.

The guidance is aimed at increasing transparency about government assistance transactions that are not in the scope of other U.S.

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The ASU requires disclosure of the nature and significant terms and considerations of the transactions, the accounting policies used and the effects of those transactions on an entity’s financial statements.

The new standard will become effective for Newmark’s financial statements issued for annual reporting periods beginning on January 1, 2022, can be applied prospectively or retrospectively, and early adoption is permitted.

The new standard became effective for Newmark’s financial statements issued for annual reporting periods beginning on January 1, 2022 and will be applied prospectively.

The adoption of this guidance did not have an impact on the accompanying consolidated financial statements.

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

The new standard became effective for Newmark beginning January 1, 2023, and will be applied prospectively for business combinations occurring on or after the effective date.

The adoption of this guidance is not expected to have a material impact on the accompanying consolidated financial statements.

In March 2022, the FASB issued ASU No.

2022-02, Financial Instruments—Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures .

The guidance is intended to improve the decision usefulness of information provided to investors about certain loan refinancings, restructurings, and write-offs.

The standard eliminates the recognition and measurement guidance on troubled debt restructurings (“TDRs”) for creditors that have adopted ASC 326, Financial Instruments — Credit Losses and requires them to make enhanced disclosures about loan modifications for borrowers experiencing financial difficulty.

The new guidance also requires public business entities to present current-period gross write-offs (on a current year-to-date basis for interim-period disclosures) by year of origination in their vintage disclosures.

The new standard became effective for Newmark beginning January 1, 2023.

The guidance for recognition and measurement of TDRs will be applied using a prospective transition method, and the amendments related to disclosures will be applied prospectively.

The adoption of this guidance is not expected to have a material impact on the accompanying consolidated financial statements.

In December 2022, the FASB issued ASU No.

2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting provided optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

The ASU was effective upon issuance and generally could be applied through December 31, 2022.

Because the current relief in ASC 848, Reference Rate Reform may not cover a period of time during which a significant number of modifications may take place, the amendments in ASU No.

2022-06 defer the sunset date from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in ASC 848.

Management is currently evaluating the impact of the new standard on the accompanying consolidated financial statements.

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however, such exchange ratio is subject to adjustment.

For reinvestment, acquisition or other purposes, Newmark may determine on a quarterly basis to distribute to its stockholders a smaller percentage of its income than Newmark Holdings distributes to its equity holders (excluding tax distributions from Newmark Holdings) of the cash that it received from Newmark OpCo.

For reinvestment, acquisition or other purposes,

Newmark may determine on a quarterly basis to distribute to its stockholders a smaller percentage of its income than Newmark Holdings distributes to its equity holders (excluding tax distributions from Newmark Holdings) of the cash that it received from Newmark OpCo.

In such circumstances, the Separation and Distribution Agreement provides that the exchange ratio will be reduced to reflect the amount of additional cash retained by Newmark as a result of the distribution of such smaller percentage, after the payment of taxes.

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FPUs are held by limited partners who are primarily employees of BGC and generally receive quarterly allocations of net income.

Upon termination of employment or otherwise ceasing to provide substantive services, the FPUs are generally

redeemed, and the unit holders are no longer entitled to participate in the quarterly allocations of net income.

Upon termination of employment or otherwise ceasing to provide substantive services, the FPUs are generally redeemed, and the unit holders are no longer entitled to participate in the quarterly allocations of net income.

These quarterly allocations of net income are contingent upon services being provided by the unit holder and are reflected as a component of compensation expense under “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the accompanying consolidated statements of operations to the extent they relate to FPUs held by Newmark employees.

There is no compensation expense related to FPUs held by BGC employees.

Limited Partnership Units

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Certain of these limited partnership units held by Newmark and BGC employees entitle the holders to receive post-termination payments equal to the notional amount of the units in four equal yearly installments after the holder’s termination.

These limited partnership units are accounted for as post-termination liability awards and are included on the accompanyting consolidated balance sheets as part of "Accrued compensation",, and in accordance with U.S.

These limited partnership units are accounted for as post-termination liability awards and are included on the accompanying consolidated balance sheets as part of "Accrued compensation", and in accordance with U.S.

GAAP guidance, Newmark records compensation expense for the awards based on the change in value at each reporting date on the accompanying consolidated statements of operations as part of “Equity-based compensation and allocations of net income to limited partnership units and FPUs.”

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Preferred Units may not be made exchangeable into Newmark’s Class A common stock and are only entitled to the Preferred Distribution, and accordingly are not included in Newmark’s fully diluted share count.

The quarterly allocations of net income on Preferred Units are reflected in compensation expense under “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the accompanying consolidated statements of operations.

The quarterly allocations of net income on Preferred Units are reflected in compensation

expense under “Equity-based compensation and allocations of net income to limited partnership units and FPUs” on the accompanying consolidated statements of operations.

After deduction of the Preferred Distribution, the remaining partnership units generally receive quarterly allocation of net income based on their weighted-average pro rata share of economic ownership of the operating subsidiaries.

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Exchangeable Preferred Limited Partnership Units

The EPUs were issued in four tranches and are separately convertible by either RBC or Newmark into a fixed number of Newmark’s Class A common stock, subject to a revenue hurdle for Newmark in each of the fourth quarters of 2019 through 2022 for each of the four tranches, respectively.

As the EPUs represent equity ownership of a consolidated subsidiary of Newmark, they have been included in “Noncontrolling interests” on the consolidated statements of changes in equity.

The EPUs are entitled to a preferred payable-in-kind dividend, which is recorded as accretion to the carrying amount of the EPUs through retained earnings on the accompanying consolidated statements of changes in equity and are reductions to “Net income available to common stockholders” for the purpose of calculating earnings per share.

The EPUs were issued in four tranches and were separately convertible by either RBC or Newmark into a fixed number of Newmark’s Class A common stock, subject to a revenue hurdle for Newmark in each of the fourth quarters of 2019 through 2022 for each of the four tranches, respectively.

As the EPUs represented equity ownership of a consolidated subsidiary of Newmark, they have been included in “Noncontrolling interests” on the consolidated statements of changes in equity.

The EPUs were entitled to a preferred payable-in-kind dividend, which was recorded as accretion to the carrying amount of the EPUs through retained earnings on the accompanying consolidated statements of changes in equity and are reductions to “Net income available to common stockholders” for the purpose of calculating earnings per share.

(See Note 1 — “Organization and Basis of Presentation” for additional information).

As of December 31, 2021, there were no EPUs outstanding.

As of December 31, 2022 and 2021, there were no EPUs outstanding.

Certain of the limited partnership interests, described above, have been granted exchangeability into BGC and/or Newmark Class A common stock, and additional limited partnership interests may become exchangeable for BGC and/or Newmark Class A common stock.

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The preparation of Newmark’s consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities on the accompanying consolidated financial statements.

GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities, revenues and expenses, and the

disclosure of contingent assets and liabilities on the accompanying consolidated financial statements.

Management believes that the estimates utilized in preparing these consolidated financial statements are reasonable.

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Further, Newmark has elected to use a measurement alternative for its equity investments without a readily determinable fair value, pursuant to which these investments are initially recognized at cost and remeasured through earnings when there is an observable transaction involving the same or similar investment of the same issuer, or due to an impairment.

investments, in which it has significant influence but not a controlling financial interest and of which it is not the primary beneficiary, are accounted for under the equity method.

(See Note 8 — “Investments” for additional information).

Newmark’s investments, in which it has significant influence but not a controlling financial interest and of which it is not the primary beneficiary, are accounted for under the equity method (see Note 8 — “Investments” for additional information).

Revenue Recognition:

The accounting policies described below were updated pursuant to the adoption of the U.S.

GAAP standard on Revenue from Contracts with Customers and related amendments on January 1, 2018.

These revenue recognition policy updates have been applied prospectively in the accompanying consolidated financial statements from January 1, 2018 onward.

Commissions :

Commissions from real estate lease brokerage transactions are typically recognized at a point in time on the date the lease is signed, if deemed not subject to significant reversal.

The date the lease is signed represents the transfer of control and satisfaction of the performance obligation as the tenant has been secured.

Commission payments may be due entirely upon lease execution or may be paid in installments upon the resolution of a future contingency (e.g.

tenant move-in or payment of first month’s rent).

Commission revenues from real estate sales brokerage transactions are recognized at the time the service has been provided and the commission becomes legally due, except when future contingencies exist.

In most cases, close of escrow or transfer of title is a future contingency, and revenue recognition is deferred until all contingencies are satisfied.

Gains from Mortgage Banking Activities/Originations, net:

Gains from mortgage banking activities/originations, net are recognized when a derivative asset or liability is recorded upon the commitment to originate a loan with a borrower and sell the loan to an investor.

The derivative is recorded at fair value and includes loan origination fees, sales premiums and the estimated fair value of the expected net servicing cash flows.

Gains from mortgage banking activities/originations, net are recognized net of related fees and commissions to third-party brokers.

Management Services, Servicing Fees and Other:

Management services revenues include property management, facilities management, project management and valuation and appraisal.

Management fees are recognized at the time the related services have been performed, unless future contingencies exist.

Management fees are recognized when the service is performed and the performance obligation is satisfied.

This also includes revenue from the licensing of flexible workspaces to its customers by Knotel and Deskeo.

In addition, in regard to management and facility service contracts, the owner of the property will typically reimburse Newmark for certain expenses that are incurred on behalf of the owner, which comprise primarily on-site employee salaries and related benefit costs.

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Other revenues include interest income on warehouse notes receivable.

Leasing and Other Commissions :

Commissions from real estate lease brokerage transactions are typically recognized at a point in time on the date the lease is signed, if deemed not subject to significant reversal.

The date the lease is signed represents the transfer of control and satisfaction of the performance obligation as the tenant has been secured.

Commission payments may be due entirely upon lease execution or may be paid in installments upon the resolution of a future contingency (e.g.

tenant move-in or payment of first month’s rent).

Investment Sales:

Investment sales revenue from real estate sales brokerage transactions are recognized at the time the service has been provided and the commission becomes legally due, except when future contingencies exist.

In most cases, close of escrow or transfer of title is a future contingency, and revenue recognition is deferred until all contingencies are satisfied.

Commercial Mortgage Origination, net:

Fair value of expected net future cash flows from servicing and loan originations and related fees and sales premiums, net, are recognized when a derivative asset or liability is recorded upon the commitment to originate a loan with a borrower and sell the loan to an investor.

The derivative is recorded at fair value and includes loan origination fees, sales premiums, and the estimated fair value of the expected net servicing cash flows.

The revenue is recognized net of related fees and commissions to third-party brokers.

Mortgage brokerage and debt placement revenue is earned and recognized when the sale of a property closes, and title passes from seller to buyer.

Fees to Related Parties:

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Restricted Cash:

Represents cash set aside for amounts pledged for the benefit of Fannie Mae in excess of the required cash to secure Newmark’s financial guarantee liability (See Note 12 — “Credit Enhancement Receivable, Contingent Liability and Credit Enhancement Deposit”).

Restricted cash represents cash set aside for amounts pledged for the benefit of Fannie Mae in excess of the required cash to secure Newmark’s financial guarantee liability.

Newmark enters into leasing arrangements in the ordinary course of business, as a lessee and has leases primarily relating to office space.

The accounting policies described below were updated pursuant to the adoption of ASC 842, Leases and related amendments on January 1, 2019.

These policy updates have been applied using the modified retrospective approach in the accompanying consolidated financial statements from January 1, 2019, onward.

Financial information for the year ended December 31, 2018 was not revised and continues to be reported under the previous accounting guidance on leases in effect during that historical period.

Newmark determines whether an arrangement is a lease or includes a lease at the contract inception.

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Current Expected Credit Losses ("CECL"):

The accounting policy changes described below were updated pursuant to the adoption of ASU No.

2016-13, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments and related amendments on January 1, 2020.

These policy updates have been applied using the modified retrospective approach in the accompanying consolidated financial statements from January 1, 2020 onward.

Financial information for the historical comparable periods was not revised and continues to be reported under the accounting standards in effect during those historical periods.

In accordance with the guidance in ASC Topic 326, Newmark presents its financial assets that are measured at amortized cost, net of an allowance for credit losses, which represents the amount expected to be collected over their estimated life.

In accordance with the guidance in ASC 326, Newmark presents its financial assets that are measured at amortized cost, net of an allowance for credit losses, which represents the amount expected to be collected over their estimated life.

Expected credit losses for newly recognized financial assets carried at amortized cost and credit exposures on off-balance sheet financial guarantees, as well as changes to expected lifetime credit losses during the period, are recognized in earnings.

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Newmark's adoption of ASC 326 impacted the expected credit loss reserving methodology for the financial guarantee liability provided to Fannie Mae under the Delegated Underwriting and Servicing (“DUS”) Program and Freddie Mac’s Targeted Affordable Housing Program “TAH”).

The expected credit loss is modeled based on Newmark's historical loss

experience adjusted to reflect current economic conditions.

A significant amount of judgment is required in the determination of the appropriate reasonable and supportable period, the methodology used to incorporate current and future macroeconomic conditions, determination of the probability of and exposure at default or non-payment, current delinquency status, loan size, terms, amortization types, and the forward-looking view of the primary risk drivers (debt-service coverage ratio and loan-to-value), all of which are ultimately used in measuring the quantitative components of the reserve.

The expected credit loss is modeled based on Newmark's historical loss experience adjusted to reflect current economic conditions.

terms, amortization types, and the forward-looking view of the primary risk drivers (debt-service coverage ratio and loan-to-value), all of which are ultimately used in measuring the quantitative components of the reserve.

Beyond the reasonable and supportable period, Newmark estimates expected credit losses using its historical loss rates.

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As a result of the adoption of ASC 326, Newmark recorded a pre-tax increase to the financial guarantee liability of $ 17.9 million through beginning stockholders' equity on January 1, 2020.

During the years ended December 31, 2021 and 2020, there was reduction in the CECL provision of $ 3.6 million and an increase in the CECL provision of $ 11.6 million, respectively.

The balance of the financial guarantee liabilities was $ 26.0 million and $ 29.6 million as of December 31, 2021 and December 31, 2020, respectively, and is included in “Other long-term liabilities” on the accompanying consolidated balance sheets.

During the years ended December 31, 2022, 2021 and 2020, there were increases (decreases) in the CECL provision of $ 1.7 million, $( 3.6 ) million and $ 11.6 million, respectively.

The balance of the financial guarantee liabilities was $ 27.7 million and $ 26.0 million as of December 31, 2022 and 2021, respectively, and is included in “Other long-term liabilities” on the accompanying consolidated balance sheets.

Receivables, net:

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The credit loss estimate includes specifically identified amounts for which payment has become unlikely.

As a result of the adoption of ASC 326.

As a result of the adoption of ASC 326, Newmark recorded a pre-tax increase to the reserves of $ 4.2 million through beginning stockholder's equity on January 1, 2020.

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If Newmark determines that the collectability of a portion of the loan balances is not expected, Newmark recognizes a reserve against the loan balances as compensation expense.

Reclassifications:

The Company has made reclassifications to prior period balances to conform to current period presentation.

These reclassifications had no effect on the reported results of operations.

For the year ended December 31, 2022, the Company adjusted the revenue presentation in the statement of operations.

"Gains from mortgage banking activities/origination, net" has been combined with mortgage brokerage revenues as "Commercial mortgage origination, net", while "Investment sales" is a stand-alone line-item.

For the years ended December 31, 2021 and 2020, $ 180.6 million and $ 50.1 million, respectively, were reclassified from "Commissions" to "Commercial mortgage origination, net."

Newmark has a single operating segment.

Newmark is a real estate services firm offering services to commercial real estate tenants, investors, owners, occupiers, developers, leasing and corporate advisory, investment sales and real estate finance, consulting, origination and servicing of commercial mortgage loans, valuation, project and development management and property and facility management.

Newmark is a real estate services firm offering services to commercial real estate tenants, investors, owners, occupiers, and developers.

Services include leasing and corporate advisory, investment sales and real estate finance, consulting, origination and servicing of commercial mortgage loans, valuation, project and development management and property and facility management.

The chief operating decision-maker regardless of geographic location evaluates the operating results of Newmark as total real estate services and allocates resources accordingly.

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2022 2021 2020

Leasing and other commissions $ 826,942 $ 513,842 $ 854,780

Capital markets commissions 938,305 454,106 541,255

Gains from mortgage banking activities/origination, net 225,481 310,914 198,085

Management services, servicing fees and other $ 909,485 $ 915,715 $ 626,136

Leasing and other commissions 831,874 826,942 513,842

Investment sales 606,416 757,744 403,971

Commercial mortgage origination, net 357,752 406,042 361,049

Revenues $ 2,705,527 $ 2,906,443 $ 1,904,998

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Newmark entered into variable postpaid forward contracts as a result of the Nasdaq Forwards.

These contracts qualify as derivative financial instruments.

The commitment to extend credit, the forward sale commitment and Nasdaq Forwards qualify as derivative financial instruments.

Newmark recognizes all derivatives on the accompanying consolidated balance sheets as assets or liabilities measured at fair value.

Newmark recognizes all derivatives on the accompanying consolidated balance sheets as assets or liabilities

measured at fair value.

The change in the derivatives fair value is recognized in included in “Other income” on the accompanying consolidated statements of operations.

Mortgage Servicing Rights, Net (“MSRs”):

Newmark initially recognizes and measures the rights to service mortgage loans at fair value and subsequently measures them using the amortization method.

Newmark initially recognizes and measures the rights to service originated mortgage loans at fair value and subsequently measures them using the amortization method.

Newmark recognizes rights to service mortgage loans as separate assets at the time the underlying originated mortgage loan is sold, and the value of those rights is included in the determination of the gains on loans held for sale.

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It is reasonably possible that such estimates may change.

Newmark amortizes the mortgage servicing rights in proportion to, and over the period of, the projected net servicing income.

Newmark amortizes the MSRs in proportion to, and over the period of, the projected net servicing income.

For purposes of impairment evaluation and measurement, Newmark stratifies MSRs based on predominant risk characteristics of the underlying loans, primarily by investor type (Fannie Mae/Freddie Mac, FHA/GNMA, CMBS and other).

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When reviewing goodwill for impairment, Newmark first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

Newmark did not recognize any impairment for the years ended December 31, 2021, 2020 and 2019.

Newmark did not recognize an impairment for the years ended December 31, 2022, 2021 and 2020, respectively.

Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives.

Definite-lived intangible assets arising from business combinations include trademarks and trade names, contractual and non-contractual customers, non-compete agreements and brokerage backlog.

Definite-lived intangible assets arising from business combinations include trademarks and trade names, contractual and non-contractual

customers, non-compete agreements and brokerage backlog.

Newmark did no t recognize an impairment for the years ended December 31, 2022, 2021 and 2020, respectively.

Transfer of Financial Assets:

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Outstanding borrowings against these lines are collateralized by an assignment of the underlying mortgages, reflected as loans held for sale, at fair value on Newmark’s consolidated balance sheets and third-party purchase commitments.

The borrowing rates on the warehouse lines are based on short-term LIBOR plus applicable margins.

The borrowing rates on the warehouse lines are based on short-term SOFR plus applicable margins.

Accordingly, the warehouse facilities collateralized by U.S.

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(4) Acquisitions

On April 1, 2022, Newmark completed the acquisitions of two companies;

BH2, a London-based real estate advisory firm, and McCall & Almy, a multi-market tenant representation and real estate advisory firm.

On May 3, 2022, Newmark completed the acquisition of Open Realty Advisors and Open Realty Properties, which together operate as “Open Realty”, a retail real estate advisory firm.

For the year ended December 31, 2022, the following table summarizes the components of the purchase consideration transferred, and the preliminary allocation of the assets acquired, and liabilities assumed, for the acquisition.

Newmark expects to finalize its analysis of the assets acquired and liabilities assumed within the first year of the acquisitions, and therefore adjustments to assets and liabilities may occur (in thousands):

Purchase Price

Contingent consideration 7,322

Cash and stock issued at closing 65,533

Total $ 72,855

Goodwill 50,756

Other intangible assets, net 19,633

Receivables, net 3,625

Other assets 290

Right-of-use assets 4,305

Right-of-use liabilities ( 4,305 )

Accrued compensation ( 2,175 )

Accounts payable, accrued expenses and other liabilities ( 560 )

Total $ 72,855

The total consideration for the acquisitions during the year ended December 31, 2022, was $ 72.9 million in total fair value comprising cash of $ 65.5 million and contingent consideration of $ 7.3 million.

The excess of the consideration over the fair value of the net assets acquired was recorded as goodwill of $ 50.8 million, of which approximately $ 35.1 million is deductible by Newmark for tax purposes.

These acquisitions were accounted for using the purchase method of accounting.

The results of operations of the acquisitions have been included on the accompanying consolidated financial statements subsequent to the respective dates of acquisition, which in aggregate contributed $ 17.8 million to Newmark’s revenues for the year ended December 31, 2022.

Newmark acquired the first lien debt of Knotel, Inc.

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Newmark subsequently acquired Knotel's second lien debt in January of 2021.

On January 31, 2021, Newmark agreed to provide approximately $ 19.8 million of debtor-in-possession financing to Knotel and to acquire the business, as part of Knotel's Chapter 11 sales process.

On January 31, 2021, Newmark agreed to

provide approximately $ 19.8 million of debtor-in-possession financing to Knotel and to acquire the business, as part of Knotel's Chapter 11 sales process.

On March 18, 2021, Newmark received approval from the U.S.

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The assets and liabilities of Knotel have been recorded in Newmark’s consolidated balance sheets at fair market value.

On September 6, 2021, Newmark acquired a majority stake in the start-up Space Management (DBA"Deskeo"), France's leader in flexible and serviced office space for enterprise clients.

Based in Paris, France Deskeo adds over 50 locations to Newmark's international flexible office portfolio.

On September 6, 2021, Newmark acquired a majority stake in the start-up Space Management (DBA "Deskeo"), France's leader in flexible and serviced workspace for enterprise clients.

Based in Paris, France, Deskeo added over 50 locations to Newmark's international flexible office portfolio.

In November 2021, Newmark completed the acquisition of a U.S.

based real estate property management services firm.

For the year ended December 31, 2021, the following table summarizes the components of the purchase consideration transferred, and the preliminary allocation of the assets acquired, and liabilities assumed, for the acquisition.

Newmark expects to finalize its analysis of the assets acquired and liabilities assumed within the first year of the acquisition, and therefore adjustments to assets and liabilities may occur (in thousands):

As of December 31, 2022, the following table summarizes the components of the purchase consideration transferred, and the of the assets acquired, and liabilities assumed, for the acquisitions which occurred in 2021:

Purchase Price

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Accounts payable, accrued expenses and other liabilities ( 103,771 )

Unrealized gain on investment ( 27,825 )

Unrealized gains on investment ( 27,825 )

Initial investment (recorded at cost) ( 13,832 )

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Pursuant to acquiring a majority interest in Deskeo and valuing its previously held non-controlling interest, Newmark recorded an unrealized gain of $ 27.8 million on the investment during the year ended December 31, 2021.

In January 2020, Newmark completed the acquisition of certain assets of Hopkins Appraisal Services, a national leader in the valuation of restaurants and retail petroleum facilities.

For the year ended December 31, 2020, the following table summarizes the components of the purchase consideration transferred, and the preliminary allocation of the assets acquired, and liabilities assumed, for the acquisition.

Purchase Price

Cash, stock and units issued at closing $ 6,249

Contingent consideration 3,590

Total $ 9,839

Goodwill $ 6,294

Other intangible assets, net 2,700

Receivables, net 796

Fixed Assets, net 134

Other assets 29

Accounts payable, accrued expenses and other liabilities ( 114 )

Total $ 9,839

The total consideration for the acquisition during the year ended December 31, 2020 was $ 9.8 million in total fair value, comprising cash of $ 5.9 million and $ 0.4 million of RSUs.

The total consideration included contingent consideration of 104,653 RSUs (with an acquisition date fair value of $ 1.3 million), and $ 2.2 million in cash that may be issued contingent on certain targets being met through 2022.

The excess of the consideration over the fair value of the net assets acquired was recorded as goodwill of $ 6.3 million, of which $ 2.4 million is deductible by Newmark for tax purposes.

This acquisition was accounted for using the purchase method of accounting.

The results of operations of the acquisition have been included on the accompanying consolidated financial statements subsequent to the date of acquisition.which in aggregate contributed $ 7.5 million to Newmark’s revenues for the year ended December 31, 2020 .

(5) Earnings Per Share and Weighted-Average Shares Outstanding

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Net income (loss) is allocated to Newmark’s outstanding common stock, FPUs, limited partnership units and Cantor units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings”).

In addition, in relation to the Newmark OpCo Preferred Investment, the EPUs issued in June 2018 and September 2018 are entitled to a preferred payable-in-kind dividend which is recorded as accretion to the

carrying amount of the EPUs and is a reduction to net income available to common stockholders for the calculation of Newmark’s basic earnings per share and fully diluted earnings per share.

In addition, in relation to the Newmark OpCo Preferred Investment, the EPUs issued in June 2018 and September 2018 were entitled to a preferred payable-in-kind dividend which is recorded as accretion to the carrying amount of the EPUs and was a reduction to net income available to common stockholders for the calculation of Newmark’s basic earnings per share and fully diluted earnings per share.

The following is the calculation of Newmark’s basic EPS (in thousands, except per share data):

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Basic earnings per share $ 0.46 $ 3.91 $ 0.39

(1) Includes a reduction for dividends on preferred stock or EPUs in the amount of $ 6.2 million, $ 9.8 million and $ 12.9 million for the years ended December 31, 2021, 2020 and 2019, respectively.

(see Note 1 — “Organization and Basis of Presentation”).

Fully diluted EPS is calculated utilizing net income available to common stockholders plus net income allocations to the limited partnership interests in Newmark Holdings as the numerator.

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Common stock outstanding 180,337 190,179 179,106

Cantor units — — —

Partnership units (1)

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Fully diluted earnings per share $ 0.45 $ 3.80 $ 0.39

(1) Partnership units collectively include FPUs, limited partnership units, and Cantor and BGC units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings” for more information).

(1) Partnership units collectively include FPUs, limited partnership units, and Cantor units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings” for more information).

For the years ended December 31, 2022, 2021 and 2020, 1.8 million, 68.1 million and 85.2 million potentially dilutive securities, respectively, were excluded from the computation of fully diluted EPS because their effect would have been anti-dilutive.

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Issuance of Class A common stock for Newmark RSUs 2,136,813 1,851,786 972,490

18,890,659 — 278,181

Other ( 36,596 ) 18,890,659 —

Treasury stock repurchases ( 24,918,482 ) ( 20,237,430 ) ( 930,226 )

Shares outstanding at end of period 150,384,605 168,272,371 161,175,894

(1) Because they were included in the Newmark’s fully diluted share count, if dilutive, any exchange of LPUs into Class A common stock would not impact the fully diluted number of shares and units outstanding.

(2) For information, refer to the section titled " 2021 Equity Event and Share Count Reduction" in Note 1 "Organization and Basis of Presentation"

(1) Because they were included in Newmark’s fully diluted share count, if dilutive, any exchange of LPUs into Class A common stock would not impact the fully diluted number of shares and units outstanding.

Class B Common Stock

Each share of Class B common stock is entitled to 10 votes and is convertible at any time into one share of Class A common stock.

As of December 31, 2021 and 2020, there were 21.3 million shares of Newmark Class B common stock outstanding.

As of December 31, 2022 and December 31, 2021, there were 21.3 million shares of Newmark Class B common stock outstanding.

Share Repurchases

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This authorization includes repurchases of shares or purchase of units from executive officers, other employees and partners, including of BGC and Cantor, as well as other affiliated persons or entities.

On February 10, 2022, the Board and Audit Committee reauthorized the $ 400.0 million Newmark share repurchase and unit redemption authorization, which may include purchases from Cantor, its partners or employees or other affiliated persons or entities.

On November 4, 2022, the Board and Audit Committee reauthorized the $ 400.0 million Newmark share repurchase and unit redemption authorization, which may include purchases from Cantor, its partners or employees or other affiliated persons or entities.

From time to time, Newmark may actively continue to repurchase shares and/or purchase units.

During the year ended December 31, 2021, Newmark repurchased 20,237,430 shares of Class A common stock, respectively, at an average price of $ 14.37 .

During the year ended December 31, 2022, Newmark repurchased 24,918,482 shares of Class A common stock at an average price of $ 11.83 .

As of December 31, 2022, Newmark had $ 392.3 million remaining from its share repurchase and unit purchase authorization.

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

The following table details Newmark's unit redemptions and share repurchases for cash, under the new program, and does not include unit redemptions and/or cancellations in connection with the grant of shares of Newmark's Class A common stock.

The gross unit redemptions and share repurchases of Newmark's Class A common stock during the year ended December 31, 2021 were as follows (in thousands except units, shares and per share amounts):

Repurchased/Purchased Average

or Share Approximate

January 1, 2021 - March 31, 2021 — $ —

April 1, 2021 - June 30, 2021 167,894 $ 11.91

July 1, 2021 - September 30, 2021 — $ —

October 1, 2021 - December 31, 2021 — $ —

Total Redemptions 167,894 $ 11.91

During the year ended December 31, 2021, Newmark repurchased 20,237,430 shares of Class A common stock at an average price of $ 14.37 .

As of December 31, 2021, Newmark had $ 165.0 million remaining from its share repurchase and unit purchase authorization.

The following table details Newmark's share repurchases for cash, under the new program, and does not include unit redemptions and/or cancellations in connection with the grant of shares of Newmark's Class A common stock.

The share repurchases of Newmark's Class A common stock during the year ended December 31, 2022 were as follows (in thousands except shares and per share amounts):

Repurchased Average

per Share Approximate

of Shares and Units That

January 1, 2022 - March 31, 2022 1,682,871 $ 18.35

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Total Repurchases 24,918,482 $ 11.83 $ 392,282

Total Redemptions and Repurchases 20,405,324 $ 14.35 $ 165,017

Redeemable Partnership Interests

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Any Nasdaq shares that were received by BGC prior to September 28, 2017 were not transferred to Newmark.

In connection with the Nasdaq Earn-out, Newmark received 992,247 shares during each of the years ended December 31, 2020 and 2019.

In connection with the Nasdaq Earn-out, Newmark received 992,247 shares during the years ended December 31, 2017 through 2020.

In accordance with the terms of the agreement, Newmark would recognize the remaining Nasdaq Earn-out of up to 6,945,729 shares of Nasdaq shares ratably over approximately the next 7 years, provided that Nasdaq, as a whole, produces at least $ 25.0 million in gross revenues each year.

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fixed income business to Tradeweb.

On June 25, 2021, Nasdaq announced the close of the sale of its U.S.

On June 25, 2021, Nasdaq announced the closing of the sale of its U.S.

fixed income business, which accelerated Newmark’s receipt of Nasdaq shares.

As of December 31, 2021, Newmark has 2,497,831 Nasdaq shares, with a fair value of $ 524.6 million.

On June 25, 2021, the SPV notified RBC of its decision to settle the third and fourth Nasdaq Forwards using the Nasdaq shares the SPV received on June 25, 2021.

On July 2, 2021, Newmark settled the Nasdaq Forwards with 944,329 Nasdaq shares, with a fair value of $ 166.0 million based on the closing price of June 30, 2021, and retained 5,278,011 Nasdaq shares.

Newmark sold 3,030,922 , 343,562 and 350,000 of the Nasdaq shares for the years ended December 31, 2021, 2020 and 2019, respectively.

As of the years ended December 31, 2021, 2020 and 2019 Newmark had 2,497,831 , 250,742 and 343,562 shares remaining in connection with Nasdaq Earn-out.

The gross proceeds of the Nasdaq shares sold were $ 551.1 million, $ 34.7 million, and $ 32.6 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Newmark recorded realized gains (loss) on the mark-to-market of these securities of $ 24.5 million, $ 2.2 million and $ 4.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Newmark recorded unrealized gains (loss) on the mark-to-market of these securities of $ 77.3 million, $ 5.0 million and $ 11.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Newmark sold 3,030,922 and 343,562 shares of Nasdaq during the years ended December 31, 2021 and 2020, respectively.

During the year ended December 31, 2022, Newmark sold all of its remaining 2,497,831 shares of Nasdaq.

The gross proceeds of the Nasdaq shares sold were $ 437.8 million for the year ended December 31, 2022.

Newmark recorded realized losses on the mark-to-market of these securities of $ 7.5 million for the year ended December 31, 2022.

Newmark recorded unrealized losses on the mark-to-market of these securities of $ 80.1 million for the year ended December 31, 2022.

During the years ended December 31, 2021 and 2020, Newmark sold 3,030,922 and 343,562 , respectively, of the Nasdaq shares.

The gross proceeds of the Nasdaq shares sold were $ 551.1 million and $ 34.7 million for the years ended December 31, 2021 and 2020, respectively.

Newmark recorded realized gains (loss) on the mark-to-market of these securities of $ 24.5 million

and $ 2.2 million for the years ended December 31, 2021 and 2020, respectively.

Newmark recorded unrealized gains (loss) on the mark-to-market of these securities of $ 77.3 million and $ 5.0 million for the years ended December 31, 2021 and 2020, respectively.

Realized and unrealized gains on the mark-to-market of these shares are included in “Other income, net” on the accompanying consolidated statements of operations.

As of December 31, 2021 and 2020, Newmark had $ 524.6 million and $ 33.3 million, respectively, included in “Marketable securities” on the accompanying consolidated balance sheets (see Note 20 — “Collateralized Transactions”).

On August 2, 2021, a subsidiary of Newmark, Newmark OpCo, entered into a Master Repurchase Agreement (the “Repurchase Agreement”) with CF Secured, LLC (“CF Secured”), an affiliate of Cantor, pursuant to which Newmark may seek, from time-to-time, to execute short-term secured financing transactions.

The Company, under the Repurchase Agreement, may seek to sell securities, in this case common shares of Nasdaq, owned by the Company, to CF Secured, under the Repurchase Agreement, and agrees to repurchase those securities on a date certain at a repurchase price generally equal to the original purchase price plus interest.

As of December 31, 2022 and 2021, Newmark had $ 0.8 million and $ 524.6 million, respectively, of marketable securities in a public entity included in “Marketable securities” on the accompanying consolidated balance sheets.

On August 2, 2021, a subsidiary of Newmark, Newmark OpCo, entered into a Master Repurchase Agreement (the “Repurchase Agreement”) with CF Secured, LLC (“CF Secured”), an affiliate of Cantor, pursuant to which Newmark could seek, from time-to-time, to execute short-term secured financing transactions.

The Company, under the Repurchase Agreement, could seek to sell securities, in this case common shares of Nasdaq, owned by the Company, to CF Secured, under the Repurchase Agreement, and agreed to repurchase those securities on a date certain at a repurchase price generally equal to the original purchase price plus interest.

Pursuant to the Repurchase Agreement, as of December 31, 2021 the Company had 866,791 Nasdaq shares pledged in the amount of $ 182.0 million, against which Newmark received $ 140.0 million.

The $ 140.0 million amount received from CF Secured is included in "Repurchase agreements and securities loaned" on the accompanying consolidated balance sheets (see Note 20 — "Collateralized Transactions" and Note 27 — “Related Party Transactions”).

The $ 140.0 million amount received from CF Secured is included in "Repurchase agreements and securities loaned" on the accompanying consolidated balance sheets (see Note 20 — "Repurchase Agreements and Securities Loaned" and Note 27 — “Related Party Transactions”).

As of December 31, 2022, Newmark had no securities pledged.

(8) Investments

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Accordingly, Newmark accounts for this investment under the equity method of accounting.

Newmark recognized equity (loss) income of $( 11.6 ) million and $ 7.3 million for the years ended December 31, 2020 and 2019, respectively.

Newmark did not recognize any equity (loss) or income for the year ended December 31, 2021.

Equity (loss) income are included in "Other income, net" on the accompanying consolidated statements of operations.

Newmark did not receive any distributions for the year ended December 31, 2021.

Newmark received distribution of $ 0.1 million for the year ended December 31, 2020.

The carrying value of these investments were $ 88.3 million and $ 88.3 million as of December 31, 2021 and 2020, respectively, included in “Other assets” on the accompanying consolidated balance sheets.

Newmark recognized equity income (loss) of $ 2.8 million, $ 0.0 million and $( 11.6 ) million for the years ended December 31, 2022, 2021 and 2020, respectively.

Equity (loss) income is included in "Other income, net" on the accompanying consolidated statements of operations.

Newmark received distributions of $ 0.0 million , $ 0.0 million and $ 0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The carrying value of this investments was $ 91.3 million and $ 88.3 million as of December 31, 2022 and 2021, respectively, included in “Other assets” on the accompanying consolidated balance sheets.

On July 20, 2022, Newmark exercised its redemption option and expected to receive approximately $ 88.4 million from Cantor.

In December 2022, the Audit Committee authorized a subsidiary of Newmark to rescind its July 20, 2022 written notice exercising the optional redemption of its 27.2 % ownership interest in Real Estate LP and amend the joint venture agreement between Newmark and Real Estate LP to provide for a redemption option for this investment after July 1, 2023, with proceeds to be received within 20 days of the redemption notice.

A payment of $ 44.0 thousand administrative fee was made to Newmark in connection with such amendment.

Investments Carried Under Measurement Alternatives

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The changes in value are included as a part of “Other income (loss), net” on the accompanying consolidated statements of operations.

Additionally, the Company invested $ 2.8 million and $ 8.5 million for the years ended December 31, 2022 and 2021, respectively.

The carrying value of these investments were $ 8.7 million and $ 20.0 million as of December 31, 2022 and 2021, respectively, and are included in “Other assets” on the accompanying consolidated balance sheets.

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Failure to maintain minimum capital requirements could result in Newmark’s inability to originate and service loans for the respective GSEs and could have a direct material adverse effect on the accompanying consolidated financial statements.

Management believes that, as of December 31, 2021 and 2020, Newmark had met all capital requirements.

As of December 31, 2021, the most restrictive capital requirement was the net worth requirement of the Federal National Mortgage Association (“Fannie Mae”).

Newmark exceeded the minimum requirement by $ 400.5 million.

Management believes that, as of December 31, 2022 and 2021, Newmark has met all capital requirements.

As of December 31, 2022 and 2021, the most restrictive capital requirement was the net worth requirement of the Federal National Mortgage Association (“Fannie Mae”).

Newmark exceeded the minimum requirement by $ 433.4 million and $ 400.5 million, respectively, as of December 31, 2022 and 2021.

Certain of Newmark’s agreements with Fannie Mae allow Newmark to originate and service loans under Fannie Mae’s DUS Program.

These agreements require Newmark to maintain sufficient collateral to meet Fannie Mae’s restricted and operational liquidity requirements based on a pre-established formula.

Certain of Newmark’s agreements with the Federal Home Loan Mortgage Corporation (“Freddie Mac”) allow Newmark to service loans under TAH.

These agreements require Newmark to pledge sufficient collateral to meet Freddie Mac’s liquidity requirement of 8 % of the outstanding principal of TAH loans serviced by Newmark.

Management believes that, as of December 31, 2021 and 2020, Newmark had met all liquidity requirements.

Certain of Newmark’s agreements with the Federal

Home Loan Mortgage Corporation (“Freddie Mac”) allow Newmark to service loans under TAH.

These agreements require Newmark to pledge sufficient collateral to meet Freddie Mac’s liquidity requirement o f 8 % o f the outstanding principal of TAH loans serviced by Newmark.

Management believes that, as of December 31, 2022 and 2021, Newmark has met all liquidity requirements.

In addition, as a servicer for Fannie Mae, the Government National Mortgage Association (“Ginnie Mae”) and Federal Housing Administration, Newmark is required to advance to investors any uncollected principal and interest due from borrowers.

7 unchanged sentences

Loans held for sale had a cost basis and fair value as follows (in thousands):

December 31, 2022 December 31, 2021

Cost Basis $ 137,633 $ 1,051,220

1 unchanged sentence

As of December 31, 2022 and 2021, all of the loans held for sale were either under commitment to be purchased by Freddie Mac or had confirmed forward trade commitments for the issuance and purchase of Fannie Mae or Ginnie Mae mortgage-backed securities that will be secured by the underlying loans.

As of December 31, 2021 and 2020, there were no loans held for sale that were 90 days or more past due or in nonaccrual status.

As of December 31, 2022 and 2021, there we re no lo ans held for sale that were 90 days or more past due or in nonaccrual status.

Newmark records interest income on loans held for sale, in accordance with the terms of the individual loans, during the period prior to sale.

Interest income on loans held for sale is included in “Management services, servicing fees and other” on the accompanying consolidated statements of operations.

Gains (losses) for fair value adjustments on loans held for sale is included in “Gains from mortgage banking activities/originations, net” on the accompanying consolidated statements of operations.

Gains (losses) for fair value adjustments on loans held for sale is included in “Commercial mortgage origination, net” on the accompanying consolidated statements of operations.

Interest income and gains (losses) for fair value adjustments on loans held for sale were as follows (in thousands):

2 unchanged sentences

Interest income on loans held for sale $ 26,821 $ 20,287 $ 27,560

Gains (loss) recognized on change in fair value on loans held for sale 21,259 24,294 5,174

Gains recognized on change in fair value on loans held for sale 712 21,259 24,294

(11) Derivatives

1 unchanged sentence

In its normal course of business, Newmark enters into commitments to extend credit for mortgage loans at a specific rate (rate lock commitments) and commitments to deliver these loans to third-party investors at a fixed price (forward sale contracts).

In addition, Newmark has entered into the Nasdaq Forwards (see Note 1 — “Organization and Basis of Presentation”) that are accounted for as derivatives.

In addition, Newmark had previously entered into the Nasdaq Forwards (see Note 1 - "Organization and Basis of Presentation") that are accounted for as derivatives.

The fair value of derivative contracts, computed in accordance with Newmark’s netting policy, is set forth below (in thousands):

3 unchanged sentences

Rate lock commitments $ 3,181 $ 8,754 $ 140,697 $ 3,957 $ 2,836 $ 174,787

Nasdaq Forwards — — — 12,822 — 174,000

Forward sale contracts 11,139 624 278,331 4,544 2,180 1,226,007

1 unchanged sentence

(1) Notional amounts represent the sum of gross long and short derivative contracts, an indication of the volume of Newmark’s derivative activity, and do not represent anticipated losses.

The change in fair value of rate lock commitments and forward sale contracts related to mortgage loans are reported as part of “Gains from mortgage banking activities/originations, net” on the accompanying consolidated statements of operations.

The change in fair value of rate lock commitments and forward sale contracts related to mortgage loans are reported as part of “Commercial mortgage origination, net” on the accompanying consolidated statements of operations.

The change in fair value of rate lock commitments are disclosed net of $ 0.7 million, $ 1.0 million and $ 2.1 million of expenses for the years ended December 31, 2022, 2021 and 2020, respectively.

1 unchanged sentence

Gains and losses on derivative contracts, which are included on the accompanying consolidated statements of operations were as follows (in thousands):

Location of gain (loss) recognized in income for derivatives Year Ended December 31,

Location of gains (losses) recognized in income for derivatives Year Ended December 31,

2022 2021 2020

1 unchanged sentence

Nasdaq Forwards Other income (loss), net $ — $ ( 12,475 ) $ ( 13,680 )

Rate lock commitments Gains (loss) from mortgage banking activities/originations, net 2,162 20,125 21,916

Rate lock commitments Commercial mortgage origination, net ( 4,869 ) 2,162 20,125

Rate lock commitments Compensation and employee benefits ( 705 ) ( 1,043 ) ( 2,068 )

Forward sale contracts Gains (loss) from mortgage banking activities/originations, net 2,365 ( 7,339 ) 851

Forward sale contracts Commercial mortgage origination, net 10,516 2,365 ( 7,339 )

Total $ 4,942 $ ( 8,991 ) $ ( 2,962 )

8 unchanged sentences

Newmark's servicing portfolio consisted of the following loss-sharing components (in thousands):

December 31, 2022 December 31, 2021

Total credit risk loan portfolio $ 27,571,719 $ 25,764,721

Maximum DB Cayman credit protection — 18,689

Maximum pre-credit enhancement loss exposure $ 8,375,966 $ 7,785,850

Maximum DB Cayman credit protection — 6,230

Maximum loss exposure without any form of credit protection $ 7,785,850 $ 7,166,279

Credit enhancement receivable

2 unchanged sentences

The CEA required the DB Entities to deposit $ 25.0 million into Newmark’s Fannie Mae restricted liquidity account (see Note 9 — “Capital and Liquidity Requirements”).

On of March 23, 2021, Newmark returned the credit enhancement deposit of $ 25.0 million to the DB Entities.

The $ 25.0 million deposit was included in “Accounts payable, accrued expenses and other liabilities” and "Other long-term liabilities", respectively, on the accompanying consolidated balance sheets as of December 31, 2020.

On March 23, 2021, Newmark returned the credit enhancement deposit of $ 25.0 million to the DB Entities.

Contingent liability

1 unchanged sentence

On March 23, 2021, Newmark paid DB Cayman the entire outstanding amount.

As of December 31, 2020, contingent liabilities were $ 12.3 million, and was included in “Accounts payable, accrued expenses and other liabilities” on the accompanying consolidated balance sheets.

There was no liability as of December 31, 2021.

As of December 31, 2022 and 2021, there was no contingent liability.

(13) Revenues from Contracts with Customers

4 unchanged sentences

Leasing and other commissions 831,874 $ 826,942 $ 513,842

Capital markets commissions 938,305 454,106 541,255

Investment sales 606,416 757,744 403,971

Mortgage brokerage and debt placement 173,253 180,561 50,135

Management services 692,957 733,761 467,453

1 unchanged sentence

Other sources of revenue (1) :

Gains from mortgage banking activities/originations, net 225,481 310,914 198,085

Fair value of expected net future cash flows from servicing recognized at commitment, net 109,926 136,406 194,814

Loan originations related fees and sales premiums, net 74,573 89,075 116,100

Servicing fees and other

3 unchanged sentences

Disaggregation of revenues

Newmark’s chief operating decision-maker, regardless of geographic location, evaluates the operating results, including revenues, of Newmark as total real estate (see Note 3 — “Summary of Significant Accounting Policies” for further discussion).

Newmark’s chief operating decision-maker, regardless of geographic location, evaluates the operating results, including revenues, of Newmark as total real estate services (see Note 3 — “Summary of Significant Accounting Policies” for further discussion).

Contract balances

3 unchanged sentences

Newmark’s deferred revenue primarily relates to customers paying in advance or billed in advance where the performance obligation has not yet been satisfied.

Deferred revenue is recorded as a contract liability.

Deferred revenue at December 31, 2022 and 2021 was $ 2.9 million and $ 3.7 million, respectively.

During the years ended December 31, 2022 and 2021, Newmark recognized revenue of $ 2.5 million and $ 2.1 million, respectively, that was recorded as deferred revenue at the beginning of the period.

For Knotel and Deskeo, the aggregate amount of the transaction price allocated to the Company’s remaining performance obligations that represent contracted customer revenues that have not yet been recognized as revenue as of December 31, 2021, that will be recognized as revenue in future periods over the life of the customer contracts, in accordance with ASC 606, is approximately $ 180.4 million.

For Knotel and Deskeo, the Company’s remaining performance obligations that represent contracted customer revenues, generally from high credit quality customers, that have not yet been recognized as revenue as of December 31, 2022, that will be recognized as revenue in future periods over the life of the customer contracts, in accordance with ASC 606, is approximately $ 167.5 million.

Over half of the remaining performance obligation as of December 31, 2022 is scheduled to be recognized as revenue within the next twelve months, with the remaining to be recognized over the remaining life of the customer contracts, which extends through 2030.

Approximate future cash flows to be received over the next five years at December 31, 2021 are as follows (in thousands):

Approximate future cash flows to be received over the next five years as of December 31, 2022 are as follows (in thousands):

2023 $ 89,436

1 unchanged sentence

Total $ 167,482

(14) Gains from Mortgage Banking Activities/Originations, Net

Gains from mortgage banking activities/originations, net consists of the following activity (in thousands):

(14) Commercial Mortgage Origination, Net

Commercial mortgage origination, net consists of the following activity (in thousands):

Year Ended December 31,

1 unchanged sentence

Fair value of expected net future cash flows from servicing recognized at commitment, net $ 109,926 $ 136,406 $ 194,814

$ 136,406 $ 194,814 $ 109,249

Loan originations related fees and sales premiums, net 74,573 89,075 116,100

Mortgage brokerage and debt placement 173,253 180,561 50,135

Total $ 357,752 $ 406,042 $ 361,049

20 unchanged sentences

Total $ 188,212 $ 159,842 $ 129,498

Newmark’s primary servicing portfolio at December 31, 2021 and 2020 was $ 68.4 billion and $ 66.3 billion, respectively.

Newmark’s primary servicing portfolio as of December 31, 2022 and 2021 was $ 69.0 billion and $ 68.4 billion, respectively.

Also, Newmark is the named special servicer for a number of commercial mortgage-backed securitizations.

Upon certain specified events (such as, but not limited to, loan defaults and loans assumptions), the administration of the loan is transferred to Newmark.

Newmark’s special servicing portfolio was $ 2.0 billion and $ 2.3 billion at December 31, 2021 and 2020, respectively.

The estimated fair value of the MSRs at December 31, 2021 and 2020 was $ 608.0 million and $ 527.1 million, respectively.

Newmark’s special servicing portfolio was $ 1.7 billion and $ 2.0 billion as of December 31, 2022 and 2021, respectively.

The estimated fair value of the MSRs as of December 31, 2022 and 2021 was $ 667.6 million and $ 608.0 million, respectively.

Fair values are estimated using a valuation model that calculates the present value of the future net servicing cash flows.

2 unchanged sentences

The discount rates used in measuring fair value for the years ended December 31, 2022 and 2021 were between 6.1 % and 13.5 % and varied based on investor type.

An increase in discount rate of 100 basis points or 200 basis points would result in a decrease in fair value by $ 18.0 million and $ 35.1 million, respectively, at December 31, 2021 and by $ 14.8 million and $ 28.9 million, respectively, at December 31, 2020.

An increase in discount rate of 100 basis points or 200 basis points would result in a decrease in fair value by $ 18.3 million and $ 35.7 million, respectively, as of December 31, 2022 and by $ 18.0 million and $ 35.1 million, respectively, as of December 31, 2021.

(16) Goodwill and Other Intangible Assets, Net

2 unchanged sentences

Acquisitions 97,168

Measurement period adjustments ( 3,876 )

Measurement period and currency translation adjustments ( 369 )

Balance, December 31, 2021 657,131

Acquisitions 50,756

Measurement period adjustments ( 369 )

Measurement period and currency translation adjustments ( 1,993 )

Balance, December 31, 2022 $ 705,894

33 unchanged sentences

Total $ 109,458 $ ( 33,259 ) $ 76,199 7.1

Intangible amortization expense for the years ended December 31, 2021, 2020 a nd 2019 was $ 8.9 million, $ 6.7 million and $ 6.9 million, respectively.

Intangible amortization expense for the years ended December 31, 2022, 2021 and 2020 was $ 14.3 million , $ 8.9 million and $ 6.7 million, respectively.

Intangible amortization is included as a part of “Depreciation and amortization” on the accompanying consolidated statements of operations.

6 unchanged sentences

Fixed assets, net consisted of the following (in thousands):

December 31, 2022 December 31, 2021

Leasehold improvements, furniture and fixtures, and other fixed assets $ 207,020 $ 184,704

5 unchanged sentences

Depreciation expense for the years ended December 31, 2022, 2021 and 2020 was $ 42.4 million, $ 22.0 million and $ 22.9 million, respectively.

Newmark recorded an impairment charge of $ 6.0 million and $ 5.0 million for internally developed software for the years ended December 31, 2020 and 2019, respectively.

The impairment charge was included as a part of "Depreciation and amortization" on the accompanying consolidated statements of operations.

There is no impairment recorded for the year ended December 31, 2021.

Newmark recorded an impairment charge of $ 14.0 million, $ 0.0 million and $ 6.0 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The impairment charge is included as a part of “ Depreciation and amortization ” on the accompanying consolidated statements of operations.

Capitalized software development costs for the years ended December 31, 2022, 2021 and 2020 were $ 12.3 million, $ 0.7 million and $ 2.0 million, respectively.

14 unchanged sentences

If the Company has the right to obtain substantially all of the economic benefits from, and can direct the use of, the identified asset for a period of time, the Company accounts for the identified asset as a lease.

The Company has elected the practical expedient to not separate lease and non-lease components for all leases other than real estate leases.

The Company has elected the

practical expedient to not separate lease and non-lease components for all leases other than real estate leases.

The primary non-lease component that is combined with a lease component represents operating expenses such as utilities, maintenance or management fees.

3 unchanged sentences

The Company uses information available at the lease commencement date to determine the discount rate for any new leases.

Total lease liability as of December 31, 2022 is $ 723.9 million.

Of the total amount, $ 188.0 million of lease liability is within our flexible workspace business whereby the liability is ring-fenced in special purpose vehicles with only $ 36.5 million of guarantees and/or letters of credit with exposure to Newmark Group, Inc.

In addition, Newmark has contracted future customer revenues and sub-lease income as of December 31, 2022 amounting to approximately $ 183.7 million.

Operating lease costs were $ 119.7 million, $ 75.5 million and $ 50.4 million for the years ended December 31, 2022, 2021 and 2020, respectively, and are included in “Operating, administrative and other” on the accompanying consolidated statements of operations.

1 unchanged sentence

As of December 31, 2022 and 2021, Newmark did not have any leases that have not yet commenced but that create significant rights and obligations.

For the years ended December 31, 2021, 2020 and 2019, respectively, Newmark had short-term lease expense of $ 1.1 million, $ 0.8 million and $ 2.3 million.

For the years ended December 31, 2021, 2020 and 2019, respectively, Newmark had sublease income of $ 0.6 million, $ 1.3 million and $ 0.7 million.

During 2020 Newmark recorded a lease impairment charge of $ 5.1 million to "Operating administrative and other" on the accompanying consolidated statements of operations.

For the years ended December 31, 2022, 2021 and 2020, Newmark had short-term lease expense of $ 0.7 million, $ 1.1 million and $ 0.8 million, respectively.

For the years ended December 31, 2022, 2021 and 2020 Newmark had sublease income of $ 1.5 million, $ 0.6 million and $ 1.3 million, respectively.

For the years ended December 31, 2022, 2021 and 2020, Newmark recorded a lease impairment charge of $ 14.4 million, $ 0.0 million , $ 5.1 million, respectively, to "Operating administrative and other" on the accompanying consolidated statements of operations.

The weighted-average discount rate as of December 31, 2022 and 2021 was 4.61 % and 3.95 %, and the remaining weighted-average lease term was 7.0 years and 7.4 years, respectively.

As of December 31, 2022 and 2021, Newmark had operating lease Right-of-use assets of $ 638.6 million and $ 606.6 million, respectively, and operating lease Right-of-use liabilities of $ 96.9 million and $ 82.0 million, respectively, recorded in “ Accounts payable, and accrued expenses and other liabilities ” and $ 627.1 million and $ 586.1 million, respectively, recorded in “Right-of-use liabilities”, on the accompanying consolidated balance sheets.

Rent expense, including the operating lease costs above, for the years ended December 31, 2021, 2020 and 2019 was $ 105.2 million, $ 49.9 million and $ 49.4 million, respectively.

Rent expense, including the operating lease costs above, for the years ended December 31, 2022, 2021 and 2020, were $ 146.8 million, $ 105.2 million and $ 49.9 million, respectively.

Rent expense is included in “Operating, administrative and other” on the accompanying consolidated statements of operations.

1 unchanged sentence

Certain of these leases contain escalation clauses that require payment of additional rent to the extent of increases in certain operating or other costs.

Minimum lease payments under these arrangements were as follows (in thousands):

Minimum lease payments under these arrangements, net of payments to be received under a sublease, were as follows (in thousands):

December 31, 2022 December 31, 2021

2023 $ 125,633 $ 113,822

9 unchanged sentences

Other current assets consisted of the following (in thousands):

December 31, 2022 December 31, 2021

Derivative assets $ 14,320 $ 8,501

5 unchanged sentences

Other assets consisted of the following (in thousands):

December 31, 2022 December 31, 2021

Deferred tax assets $ 94,689 $ 70,191

Equity method investment 91,280 88,308

Debt securities — 12,754

Non-marketable investments 8,688 20,017

Derivative assets — 9,229

Other 19,609 33,965

2 unchanged sentences

Securities sold under Repurchase Agreements are accounted for as collateralized financing transactions and are recorded at the contractual amount for which the securities will be repurchase, including accrued interest.

As of December 31, 2021, Cantor facilitated Repurchase Agreements between the Company and Cantor in the amount of $ 140.0 million.

The market value of the securities pledged as of December 31, 2021, were $ 182.0 million (see Note 7 — "Marketable Securities" and Note 27 — “Related Party Transactions”).

The cash collateral received from Cantor bore an interest rate of 0.95 %.

As of December 31, 2021, Newmark had securities loaned with Cantor of $ 140.0 million.

1 unchanged sentence

The cash collateral received from Cantor bore an interest rate of 0.95 % as of December 31, 2021.

As of December 31, 2022, there were no repurchase agreements and securities loaned on the accompanying consolidated balance sheet.

(21) Warehouse Facilities Collateralized by U.S.

1 unchanged sentence

Newmark uses its warehouse facilities and repurchase agreements to fund mortgage loans originated under its various lending programs.

Outstanding borrowings against these lines are collateralized by an assignment of the underlying mortgages and third-party purchase commitments and are recourse only to Berkeley Point Capital, LLC.

Outstanding borrowings against these lines are collateralized by an assignment of the underlying mortgages and third-party purchase commitments and are recourse only to our wholly-owned subsidiary, Berkeley Point Capital, LLC.

Newmark had the following lines available and borrowings outstanding (in thousands):

2 unchanged sentences

LIBOR/SOFR (2)

Warehouse facility due October 7, 2022 (1)(2)

$ 600,000 $ — $ 384,571 $ 358,247 130 bps - 140 bps

Warehouse facility due June 15, 2022 450,000 — 243,659 292,040 130 bps - 140 bps

Warehouse facility due June 15, 2022 — 300,000 135,601 — 130 bps

Warehouse facility due September 25, 2022 400,000 — 193,091 146,380 130 bps - 140 bps

Fannie Mae repurchase agreement, open maturity (3)

Warehouse facility due June 14, 2023 (1)

$ 450,000 $ — $ — $ 243,659 130 bps

Warehouse facility due June 14, 2023 (1)

— 300,000 — 135,601 130 bps

Warehouse facility due September 25, 2023 300,000 — 35,292 193,091 130 bps

Warehouse facility due September 25, 2023 — 100,000 — — 130 bps

Warehouse facility due October 6, 2023 800,000 — 102,114 384,571 130 bps

Fannie Mae repurchase agreement, open maturity — 400,000 — 93,771 115 bps

Total $ 1,550,000 $ 800,000 $ 137,406 $ 1,050,693

(1) The warehouse line established a $ 125.0 million sublimit line of credit to fund potential principal and interest servicing advances on the Company's Fannie Mae portfolio during the forbearance period related to the CARES Act.

Advances will have an interest rate of 1-month LIBOR plus 180 bps.

There were no outstanding under this sublimit as of December 31, 2021.

(2) The warehouse line was temporarily increased by $ 300 million to $ 900 million for the period December 1, 2020 to February 1, 2021.

(3) The spread for the Fannie Mae repurchase agreement is to SOFR.

The warehouse facilities are to LIBOR.

Advances will have an interest rate of 1-month SOFR plus 180 bps.

There wer e no outstanding draws under this sublimit as of December 31, 2022 and 2021.

(2) As of December 31, 2022, the spread for all warehouse facilities and the Fannie Mae repurchase line are to SOFR.

As of December 31, 2021, the spread for the Fannie Mae repurchase line is to SOFR and the warehouse lines are to LIBOR.

Pursuant to the terms of the warehouse facilities, Newmark is required to meet several financial covenants.

2 unchanged sentences

Due to the short-term maturity of these instruments, the carrying amounts approximate fair value.

(22) Long-Term Debt

Long-term debt consisted of the following (in thousands):

Debt consisted of the following (in thousands):

December 31, 2022 December 31, 2021

6.125 % Senior Notes

3 unchanged sentences

6.125 % Senior Notes

On November 6, 2018, Newmark closed its offering of $ 550.0 million aggregate principal amount of 6.125 % Senior Notes due 2023 (the “ 6.125 % Senior Notes”).

On November 6, 2018, Newmark closed its offering of $ 550.0 million aggregate principal amount of 6.125 % Senior Notes due November 15, 2023 (the “ 6.125 % Senior Notes”).

The 6.125 % Senior Notes were priced on November 1, 2018 at 98.94 % to yield 6.375 %.

3 unchanged sentences

The carrying amount of the 6.125 % Senior Notes was determined as follows (in thousands):

December 31, 2022 December 31, 2021

Principal balance $ 550,000 $ 550,000

3 unchanged sentences

Newmark uses the effective interest rate method to amortize debt discounts and uses the straight-line method to amortize debt issue costs over the life of the notes.

Interest expense, amortization of debt issue costs and amortization of the

debt discount of the 6.125 % Senior Notes, included in “Interest (expense) income, net” on the accompanying consolidated statements of operations, were as follows (in thousands):

Interest expense, amortization of debt issue costs and amortization of the debt discount of the 6.125 % Senior Notes, included in “Interest (expense) income, net” on the accompanying consolidated statements of operations, were as follows (in thousands):

Year Ended December 31,

11 unchanged sentences

Borrowings under the Credit Facility bore an annual interest rate equal to, at Newmark’s option, either (a) LIBOR for specified periods, or upon the consent of all Lenders, such other period that is 12 months or less, plus an applicable margin, or (b) a base rate equal to the greatest of (i) the federal funds rate plus 0.5 %, (ii) the prime rate as established by the administrative agent, and (iii) one-month LIBOR plus 1.0 %, plus an applicable margin.

The applicable margin is 2.0 % with respect to LIBOR borrowings and can range from 1.25 % to 2.25 % in (a) above and was 1.00 % with respect to base rate borrowings and can range from 0.25 % to 1.25 % in (b) above, depending upon Newmark’s credit rating.

The Credit Facility also provides for an unused facility fee.

The applicable margin was 2.0 % with respect to LIBOR borrowings and could range from 1.25 % to 2.25 % in (a) above and was 1.00 % with respect to base rate borrowings and could range from 0.25 % to 1.25 % in (b) above, depending upon Newmark’s credit rating.

The Credit Facility also provided for an unused facility fee.

On February 26, 2020, Newmark entered into an amendment to the Credit Agreement, increasing the size of the Credit Facility to $ 425.0 million (the “Amended Credit Facility”) and extending the maturity date to February 26, 2023.

The annual interest rate on the Amended Credit Facility was reduced to LIBOR plus 1.75 %, subject to a pricing grid linked to Newmark’s credit ratings from Standard & Poor’s and Fitch.

interest rate on the Amended Credit Facility was reduced to LIBOR plus 1.75 %, subject to a pricing grid linked to Newmark’s credit ratings from Standard & Poor’s and Fitch.

On March 16, 2020, Newmark entered into a second amendment to the Credit Agreement, increasing the size of the Amended Credit Facility to $ 465.0 million (the "Second Amended Credit Facility").

The annual interest rate on the Second Amended Credit Facility is LIBOR plus 1.75 %, subject to a pricing grid linked to Newmark’s credit ratings from Standard & Poor’s and Fitch.

The annual interest rate on the Second Amended Credit Facility was LIBOR plus 1.75 %, subject to a pricing grid linked to Newmark’s credit ratings from S&P Global Ratings and Fitch.

In July 2021, Newmark paid the $ 140.0 million outstanding on the Credit Facility.

Details of the Credit Facility are as follows (in thousands):

Principal balance $ — $ 140,000

Debt issue cost — 2,387

Total $ — $ 137,613

As of December 31, 2021 and 2020, borrowings under the Credit Facility carried an interest rate of 0.00 % and 1.90 %, with a weighted-average interest rate of 1.03 % and 2.37 %, respectively.

On March 10, 2022, Newmark entered into the A&R Credit Agreement, which amended and restated the Credit Agreement, as amended.

Pursuant to the A&R Credit Agreement, the Lenders agreed to:

(a) increase the amount available to the Company under the Credit Facility to $ 600.0 million, (b) extend the maturity date of the Credit Facility to March 10, 2025, and (c) improve pricing to 1.50 % per annum with respect to Term SOFR (as defined in the A&R Credit Agreement) borrowings.

As of December 31, 2021, borrowings under the Credit Facility carried an interest rate of 0.00 %, with a weighted-average interest rate of 1.03 % for the year then ended.

As of December 31, 2022, there were no borrowings under the Credit Facility.

Newmark uses the straight-line method to amortize debt issue costs over the life of the notes.

15 unchanged sentences

At December 31, 2022, the credit risk loans being serviced by Newmark on behalf of Fannie Mae and Freddie Mac had outstanding principal balances of $ 27.6 billion with a maximum potential loss of $ 8.4 billion.

At December 31, 2020, the credit risk loans being serviced by Newmark on behalf of Fannie Mae and Freddie Mac had outstanding principal balances of approximately $ 24.0 billion with a maximum potential loss of approximately $ 7.2 billion, of which $ 6.2 million was covered by the Credit Enhancement Agreement (see Note 12 — “Credit Enhancement Receivable, Credit Enhancement Deposit and Contingent Liability”).

As of December 31, 2021, there were no loans covered by the Credit Enhancement Agreement.

Newmark’s current estimate of expected credit losses considers various factors, including, without being limited to, historical default and losses, current delinquency status, loan size, terms, amortization types, the forward-looking view of the primary risk drivers (debt-service coverage ratio and loan-to-value) based on forecasts in economic conditions and local market performance.

During the years ended December 31, 2021 and 2020, there was a decrease to the reserve by $ 3.6 million and an increase to the reserve by $ 11.6 million, respectively.

At December 31, 2021, the credit risk loans being serviced by Newmark on behalf of Fannie Mae and Freddie Mac had outstanding principal balances of approximately $ 25.8 billion with a maximum potential loss of approximately $ 7.8 billion.

As of December 31, 2022 and 2021, there were no loans covered by the CEA.

Newmark’s current estimate of expected credit losses considers various factors, including, without being limited to, historical default and losses, current delinquency status, loan size, terms, amortization types, the forward-looking view of the primary risk drivers (debt-service coverage ratio and loan-to-value) based on forecasts of economic conditions and local market performance.

During the years ended December 31, 2022, 2021 and 2020, there were increases (decreases) to the reserve by $ 1.7 million, $( 3.6 ) million and $ 11.6 million, respectively.

A loan is considered to be delinquent once it is 60 days past due.

As of December 31, 2021, there were two loans in the credit risk portfolio with an outstanding principal balance of $ 33.6 million, with a maximum loss exposure of $ 11.2 million, that were in default.

If the two loans in default resulted in a loss event, proceeds from the liquidation of the assets are estimated to be approximately $ 28.4 million based on current estimates of fair value.

As of December 31, 2022, there was one loan in foreclosure with an outstanding principal balance of $ 22.8 million, with a maximum loss exposure of $ 7.6 million.

Proceeds from the liquidation of the assets are estimated to be approximately $ 20.0 million based on current estimates of fair value.

Newmark’s share of the loss would approximate $ 1.5 million.

As of December 31, 2020, there were four loans in the credit risk portfolio with outstanding principal balances of $ 53.5 million, with a maximum loss exposure of $ 17.8 million, that were delinquent.

If all four delinquent loans resulted in a loss event, proceeds from the liquidation of the assets are estimated to be approximately $ 39.0 million based on estimates of fair value at December 31, 2020.

As of December 31, 2022, there was one delinquent loan that had an outstanding principal balance of $ 7.3 million, with a maximum loss exposure of $ 2.4 million.

Proceeds from the liquidation of the asset are estimated to be approximately $ 4.2 million based on current estimate of fair value.

Newmark's share of the loss would approximate $ 1.1 million.

As of December 31, 2021, no actual losses were incurred.

As of December 31, 2021, there were two loans in the credit risk portfolio that were delinquent with outstanding principal balances of $ 33.6 million, with a maximum loss exposure of $ 11.2 million.

If both delinquent loans resulted in a loss event, proceeds from the liquidation of the

assets are estimated to be approximately $ 28.4 million based on estimates of fair value at December 31, 2021.

Newmark's share of the loss would approximate $ 2.3 million.

As of December 31, 2022 and 2021, no actual losses were incurred.

The provisions for risk-sharing were included in “Operating, administrative and other” on the accompanying consolidated statements of operations as follows (in thousands):

Balance, January 1, 2021 $ 29,581

Impact of adopting ASC 326 17,935

Provision for expected credit losses ( 3,592 )

11 unchanged sentences

These funds amounted to $ 1.0 billion and $ 2.3 billion, as of December 31, 2022 and 2021, respectively.

These funds are held for the

benefit of Newmark’s borrowers and are segregated in custodial bank accounts.

These funds are held for the benefit of Newmark’s borrowers and are segregated in custodial bank accounts.

These amounts are excluded from the assets and liabilities of Newmark.

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Rate lock commitments — — 3,181 3,181

Nasdaq Forwards — — — —

Forward sale contracts — — 11,139 11,139

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Loans held for sale, at fair value — 1,072,479 — 1,072,479

Debt securities — 12,754 — 12,754

Rate lock commitments — — 3,957 3,957

Nasdaq Forwards — — 12,822 12,822

Forward sale contracts — — 4,544 4,544

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gains (losses)

Net income Issuances Settlements Closing

Net income Additions Settlements Closing

Balance Unrealized

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Forward sale contracts 4,544 11,139 — ( 4,544 ) 11,139 11,139

Nasdaq Forwards 12,822 ( 12,822 ) — — — —

Total $ 8,501 $ 14,320 $ — $ ( 8,501 ) $ 14,320 $ 14,320

2 unchanged sentences

gains (losses)

Net income Issuances Settlements Closing

Net income Additions Settlements Closing

Balance Unrealized

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gains (losses)

Net income Issuances Settlements Closing

Net income Additions Settlements Closing

Balance Unrealized

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gains (losses)

Net income Issuances Settlements Closing

Net income Additions Settlements Closing

Balance Unrealized

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Probability of meeting earnout and contingencies 75.0 % - 100.0 %

Financial forecast information

Derivative assets and liabilities:

Nasdaq Forwards $ — $ — Implied volatility N/A N/A

Forward sale contracts $ 11,139 $ 624 Counterparty credit risk N/A N/A

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Probability of meeting earnout and contingencies 75.0 % - 99.0 %

Financial forecast information

Derivative assets and liabilities:

Nasdaq Forwards $ 12,822 $ — Implied volatility 42.4 % - 42.6 %

Forward sale contracts $ 4,544 $ 2,180 Counterparty credit risk N/A N/A

Rate lock commitments $ 3,957 $ 2,836 Counterparty credit risk N/A N/A

(1) Newmark’s estimate of contingent consideration as of December 31, 2021 and 2020 was based on the acquired business’ projected future financial performance, including revenues.

(2) The volatility of Newmark’s Nasdaq Forwards is primarily based on the volatility of the underlying Nasdaq stock price.

(1) Newmark’s estimate of contingent consideration as of December 31, 2022 and December 31, 2021 was based on the acquired business’ projected future financial performance, including revenues.

Valuation Processes - Level 3 Measurements

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The fair value of Newmark’s rate lock commitments to borrowers and loans held for sale and the related input levels includes, as applicable:

• The assumed gain loss of the expected loan sale to the investor, net of employee benefits;

• The assumed gain or loss of the expected loan sale to the investor, net of employee benefits;

• The expected net future cash flows associated with servicing the loan;

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Given the credit quality of Newmark’s counterparties, the short duration of rate lock commitments and forward sales contracts, and Newmark’s historical experience with the agreements, management does not believe the risk of nonperformance by Newmark’s counterparties to be significant.

The Nasdaq Forwards are derivatives and, accordingly, are marked to fair value on the accompanying consolidated statements of operations.

The fair value of the Nasdaq Forwards are determined utilizing the following inputs, as applicable:

The Nasdaq Forwards were derivatives and, accordingly, were marked to fair value on the accompanying consolidated statements of operations.

The fair values of the Nasdaq Forwards were determined utilizing the following inputs, as applicable:

• The underlying number of shares and the related strike price;

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• The implied volatility of Nasdaq’s stock price.

The fair value of Newmark’s Nasdaq Forwards considers the effects of Nasdaq’s stock price volatility between the balance sheet date and the maturity date.

The fair values of Newmark’s Nasdaq Forwards considered the effects of Nasdaq’s stock price volatility between the balance sheet date and the maturity date.

The fair value is determined by the use of a Black-Scholes put option valuation model.

Information About Uncertainty of Level 3 Fair Value Measurements

The significant unobservable inputs used in the fair value of Newmark’s contingent consideration are the discount rate and forecasted financial information.

The significant unobservable inputs used in the fair value of Newmark’s contingent consideration are the discount rate and probability of meeting earnout and contingencies.

Significant increases (decreases) in the discount rate would have resulted in a significantly lower (higher) fair value measurement.

Significant increases (decreases) in the forecasted financial information would have resulted in a significantly higher (lower) fair value measurement.

Significant increases (decreases) in the probability of meeting earnout and contingencies would have resulted in a significantly higher (lower) fair value measurement.

As of December 31, 2022 and 2021, the present value of expected payments related to Newmark’s contingent consideration was $ 8.3 million and $ 12.3 million, respectively (see Note 31 — “Commitments and Contingencies”).

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The compensation expense related to these employee loans is included as part of “Compensation and employee benefits” on the accompanying consolidated statements of operations.

Transfer of Employees to Newmark and Other Related Party Transactions

In connection with the expansion of the mortgage brokerage and lending activities, Newmark has entered into an agreement with Cantor pursuant to which five former employees of Cantor's affiliate, Cantor Commercial Real Estate ("CCRE"), transferred to Newmark, effective as of May 1, 2018.

In connection with this transfer of employees, Cantor paid $ 6.9 million to Newmark in October 2018, and Newmark Holdings issued $ 6.7 million of limited partnership units and $ 0.2 million of cash in the form of a cash distribution agreement to the employees.

In addition, Newmark Holdings issued $ 2.2 million of Newmark Holdings partnership units with a capital account and $ 0.5 million of limited partnership units in exchange

for the cash payment from Cantor to Newmark of $ 2.2 million.

Newmark recorded $ 6.9 million and $ 2.2 million as “Stockholders’ equity” and “Redeemable partnership interests”, respectively, on the consolidated balance sheets.

In consideration for the Cantor payment, Newmark agreed to return up to a maximum of $ 3.3 million to Cantor based on the employees’ production during their first two years of employment with Newmark.

In July 2020, Newmark paid $ 3.3 million to Cantor based on the employees’ production, satisfying this liability.

As of December 31, 2021, Newmark did not have an outstanding balance to Cantor related to this transaction.

Newmark has agreed to allow certain of these employees to continue to provide consulting services to Cantor in exchange for a forgivable loan which was directly paid by Cantor to these employees.

Other Related Party Transactions

In February 2019, Newmark's Audit Committee authorized Newmark and its subsidiaries to originate and service GSE loans for Cantor and its affiliates (other than BGC) and service loans originated by Cantor and its affiliates (other than BGC) on prices, rates and terms no less favorable to Newmark and its subsidiaries than those charged by third parties.

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(i) a maximum amount up to $ 100.0 million per loan, (ii) a $ 250.0 million limit on loans that have not yet been acquired or sold to a GSE at any given time, and (iii) a separate $ 250.0 million limit on originated Fannie Mae Loans outstanding to Cantor at any given time.

On November 30, 2020, we entered into an arrangement to assist View, Inc.

On November 30, 2020, Newmark entered into an arrangement to assist View, Inc.

(“View”) in the sale of its products and services to real estate clients in exchange for commissions.

is a Silicon Valley-based producer of high-efficiency dynamic glass that controls light, heat, and glare, providing unobstructed views and privacy using a low voltage control system.

In connection with the arrangement, View also agreed to engage us as its exclusive provider of real estate services for a period of at least five years.

While View is not under common control with us, it was, at the time that the agreement was executed, the target of a merger with CF Finance Acquisition Corp.

In connection with the arrangement, View also agreed to engage Newmark as its exclusive provider of real estate services for a period of at least five years .

While View is not under common control with Newmark, it was, at the time that the agreement was executed, the target of a merger with CF Finance Acquisition Corp.

II, a special purpose acquisition company sponsored by Cantor.

Newmark has a revenue-share agreement with CCRE, in which Newmark pays CCRE for referrals for leasing or other services.

Newmark did not make any payments under this agreement to CCRE for the years ended December 31, 2021, 2020 and 2019, respectively.

Newmark did not make any payments under this agreement to CCRE during the years ended December 31, 2022, 2021 and 2020.

Newmark did no t recognize revenue for the years ended December 31, 2022, 2021 and 2020, in connection with this revenue-share agreement.

In addition, Newmark has a loan referral agreement in place with CCRE, in which either party can refer a loan to the other.

Newmark did no t have any revenues from these referrals for the years ended December 31, 2022, 2021 and 2020.

Such revenues are recognized in “Gains from mortgage banking activities/originations, net” on the accompanying consolidated statements of operations.

Such revenues are recognized in “Commercial mortgage origination, net” on the accompanying consolidated statements of operations.

These referral fees are net of the broker fees and commissions paid to CCRE.

Newmark did no t purchase any primary servicing rights during the year ended December 31, 2021.

Newmark purchased the primary servicing rights of loans originated by CCRE for $ 227.0 million of loans originated by CCRE for $ 0.2 million for the year ended December 31, 2020.

Newmark did no t purchase any primary servicing rights during the years ended December 31, 2022 and 2021.

Newmark also services loans for CCRE on a “fee for service” basis, generally prior to a loan’s sale or securitization, and for which no MSR is recognized.

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The Loan matures on August 6, 2029, and is payable monthly at a fixed interest rate of 4.38 % per annum.

Newmark provided certain commercial loan brokerage services to the Borrower in the ordinary course of its business, and the Borrower paid Newmark a fee, as the broker of the Loan, of $ 0.7 million.

The Newmark Audit Committee approved the commercial loan brokerage services and the related fee amount received.

Transactions with Executive Officers and Directors

Executive Compensation

(i) Gosin Employment Agreement

On February 10, 2023, Mr.

Gosin entered into an amended and restated employment agreement with Newmark OpCo and Newmark Holdings.

In connection with the employment agreement, the Compensation Committee approved for a term through at least 2024 (i) an annual cash bonus of $ 1,500,000 ;

(ii) an upfront advance award of 1,145,475 Newmark NPSUs (calculated by dividing $ 10,000,000 by the Company's stock price of $ 8.73 on February 10, 2023) attributable to each year of the term and (iii) a discretionary bonus, if any, subject to approval of the Compensation Committee.

A copy of the employment agreement was attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2023 and is described in detail therein.

(ii) Rispoli Employment Agreement

On September 29, 2022, Mr.

Rispoli entered into an employment agreement with Newmark OpCo and Newmark Holdings.

In connection with the employment agreement, the Compensation Committee approved the following for Mr.

(i) an award of 500,000 Newmark RSUs granted in connection with the execution of the employment agreement, divided into tranches of 100,000 RSUs each that vest on a seven-year schedule;

(ii) an award of 250,000 Newmark RSUs granted in connection with the execution of the employment agreement, divided into tranches of 50,000 RSUs each that vest on a seven-year schedule;

and (iii) exchange rights into shares of Newmark Class A common stock with respect to 20,221 previously awarded non-exchangeable Newmark Holdings PSUs held by Mr.

A copy of the employment agreement was attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 3, 2022 and is described in detail therein.

(iii) Other Executive Compensation

On December 21, 2021, the Compensation Committee approved:

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Gosin’s remaining 838,996 non-exchangeable Newmark PPSUs for $ 8,339,980 in cash and (ii) compensation of approximately $ 7,357,329 by way of the Company causing 478,328 of Mr.

Gosin’s non-exchangeable Newmark PSUs to be redeemed for zero and issuing 446,711 shares of Newmark Class A Common Stock, based upon the closing price on the date the Committee approved the

transaction (which was $ 16.47 ) and an exchange ratio of 0.9339 .

Gosin’s non-exchangeable Newmark PSUs to be redeemed for zero and issuing 446,711 shares of Newmark Class A Common Stock, based upon the closing price on the date the Committee approved the transaction (which was $ 16.47 ) and an exchange ratio of 0.9339 .

The estimated pre-tax value of this transaction is $ 15,697,309 , less applicable taxes and withholdings, using a 53.13 % tax rate for Mr.

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The aggregate estimated pre-tax value of these transactions is $ 10,340,015 , less applicable taxes and withholdings, using a 57.38 % tax rate for Mr.

On June 28, 2021, in connection with the 2021 Equity Event, the Compensation Committee approved the specific transactions with respect to the Company’s executive officers set forth below.

All of the transactions included in the 2021 Equity Event, with respect to Messrs.

Lutnick, Gosin and Rispoli, were based on (i) the price for Newmark Class A common stock of $ 12.50 per share, as approved by the Compensation Committee;

(ii) the price of BGC Partners Class A common stock of $ 5.86 ;

and (iii) the price of Nasdaq common stock of $ 177.11 .

On April 27, 2021, the Compensation Committee approved an additional monetization opportunity for Mr.

(i) 73,387 of Mr.

Merkel’s 145,384 non-exchangeable Newmark Holdings PSUs were redeemed for zero, (ii) 19,426 of Mr.

Merkel’s 86,649 non-exchangeable Newmark Holdings PPSUs were redeemed for a cash payment of $ 0.2 million, and (iii) 68,727 shares of Newmark Class A common stock were issued to Mr.

On the same day, the 68,727 shares of Newmark Class A common stock were repurchased from Mr.

Merkel at $ 10.67 per share, the closing price of Newmark Class A common stock on that date, under the Company's stock buyback program.

The total payment delivered to Mr.

Merkel was $ 0.8 million, less applicable taxes and withholdings.

On March 16, 2021, the Company redeemed 30,926 non-exchangeable Newmark Holdings PSUs held by Mr.

Merkel for zero and in connection therewith issued 28,962 shares of our Class A common stock.

On the same day, the Company repurchased these shares from Mr.

Merkel at the closing price of our Class A common stock of $ 11.09 per share under our stock buyback program.

Merkel for zero and in connection therewith issued 28,962 shares of Newmark Class A common stock.

On the same day, the Company

repurchased these shares from Mr.

Merkel at the closing price of Newmark Class A common stock of $ 11.09 per share under the Company's stock buyback program.

The total payment delivered to Mr.

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The aggregate number of Mr.

Lutnick’s units for which he waived exchange rights or other monetization rights is 4,423,457 non-exchangeable Newmark Holdings PSUs/NPSUs, inclusive of the PSUs receiving an HDU conversion right and 1,770,016 non-exchangeable Newmark Holdings PPSUs with an aggregate determination amount of $ 21.6 million at that time, inclusive of the PPSUs receiving an HDU conversion right.

Lutnick’s units for which he waived exchange rights or other monetization rights was 4,423,457 non-exchangeable Newmark Holdings PSUs/NPSUs, inclusive of the PSUs receiving an HDU conversion right and 1,770,016 non-exchangeable Newmark Holdings PPSUs with an aggregate determination amount of $ 21.6 million at that time, inclusive of the PPSUs receiving an HDU conversion right.

On March 16, 2021, the Compensation Committee granted Mr.

Gosin exchange rights into shares of Class A common stock with respect to 526,828 previously awarded non-exchangeable Newmark Holdings PSUs and 30,871 non-exchangeable Newmark Holdings APSUs held by Mr.

Gosin exchange rights into shares of Newmark Class A common stock with respect to 526,828 previously awarded non-exchangeable Newmark Holdings PSUs and 30,871 non-exchangeable Newmark Holdings APSUs held by Mr.

Gosin (which, based on the closing price of the Class A common stock of $ 11.09 per share on such date and using the exchange ratio of 0.9365 , had a value of $ 5.8 million in the aggregate).

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On March 16, 2021, the Compensation Committee granted Mr.

Rispoli (i) exchange rights into shares of Class A common stock with respect to 6,043 previously awarded non-exchangeable Newmark Holdings PSUs held by Mr.

Rispoli (i) exchange rights into shares of Newmark Class A common stock with respect to 6,043 previously awarded non-exchangeable Newmark Holdings PSUs held by Mr.

Rispoli (which, based on the closing price of the Class A common stock of $ 11.09 per share on such date and using the exchange ratio of 0.9365 , had a value of $ 0.1 million);

1 unchanged sentence

Rispoli (which had an average determination price of $ 15.57 per unit, for a total of $ 0.1 million in the aggregate to be paid for taxes when (i) is exchanged).

On April 27, 2021, the Compensation Committee approved an additional monetization opportunity for Mr.

(i) 73,387 of Mr.

Merkel’s 145,384 non-exchangeable Newmark Holdings PSUs were redeemed for zero, (ii) 19,426 of Mr.

Merkel’s 86,649 non-exchangeable Newmark Holdings PPSUs were redeemed for a cash payment of $ 0.2 million, and (iii) 68,727 shares of our Class A common stock were issued to Mr.

On the same day, the 68,727 shares of our Class A common stock were repurchased from Mr.

Merkel at $ 10.67 per share, the closing price of our Class A common stock on that date, under our stock buyback program.

The total payment delivered to Mr.

Merkel was $ 0.8 million, less applicable taxes and withholdings.

On June 28, 2021, in connections with the 2021 Equity Event, the Compensation Committee approved the specific transactions with respect to the Company’s executive officers set forth below.

All of the transactions included in the 2021 Equity Event, with respect to Messrs.

Lutnick, Gosin and Rispoli, were based on (i) the price for Newmark Class A common

stock of $ 12.50 per share, as approved by the Compensation Committee;

(ii) the price of BGC Partners Class A common stock of $ 5.86 ;

and (iii) the price of Nasdaq common stock of $ 177.11 .

Lutnick, Chairman

On June 28, 2021, the Compensation Committee approved the following for Howard W.

Lutnick, the Company’s Chairman:

(i) the exchange of 279,725 exchangeable Newmark Holdings PSUs (currently in the share count) into 263,025 shares of Newmark Class A common stock based on the current exchange ratio of 0.9403 ;

(ii) the redemption of 193,530 exchangeable Newmark Holdings PPSUs for a cash payment of $ 2.5 million, to be remitted to the applicable tax authorities to the extent necessary for payment in connection with the delivery of the Newmark Class A common stock in (i) above;

(iii) the redemption of 2,909,819 non-exchangeable Newmark Holdings PSUs, pursuant to Mr.

Lutnick’s rights under his existing standing policy and issuance of 2,736,103 shares of Newmark Class A common stock to him based upon the current exchange ratio of 0.9403 ;

(iv) the redemption of 793,398 non-exchangeable Newmark Holdings PPSUs pursuant to Mr.

Lutnick’s rights under his existing standing policy for a cash payment of $ 22.9 million, to be remitted to the applicable tax authorities to the extent necessary for payment in connection with the delivery of the above Newmark Class A common stock in (iii) above;

(v) the conversion of 552,482.62 non-exchangeable Newmark Holdings PSUs with the right to exchange PSUs into HDUs (“H-Rights”) into 552,482.62 non-exchangeable HDUs and redemption of such HDUs for their Capital Account, paid in the form of Nasdaq Shares;

(vi) the redemption of 602,462.94 non-exchangeable PPSUs for a cash payment of $ 8.0 million, to be remitted to the applicable tax authorities to the extent necessary for payment in connection with the delivery of above Newmark Holdings HDU cash payment;

(vii) the exchange of 520,380 exchangeable BGC Holdings PSUs into 520,380 shares of BGC Class A common stock;

(viii) the redemption of 425,766 exchangeable BGC Holdings PPSUs for a cash payment of $ 2.4 million, to be remitted to the applicable tax authorities to the extent necessary for payment in connection with the delivery of the above BGC shares in (viii);

(ix) the redemption of 88,636 non-exchangeable BGC Holdings PSUs pursuant to Mr.

Lutnick’s rights under his existing standing policy, and the issuance of 88,636 shares of BGC Class A common stock;

(x) the conversion of 1,131,774 non-exchangeable BGC Holdings PSUs with H-Rights into 1,131,774 non-exchangeable BGC Holdings HDUs;

(xi) the redemption of 1,018,390 non-exchangeable BGC Holdings PPSUs with rights to redeem for cash in connection with the exercise of above BGC Holdings HDUs for a cash payment of $ 0.3 million, to be remitted to the applicable tax authorities to the extent necessary for payment in connection with the delivery of above BGC Holdings HDU cash payment;

and (xii) the issuance of 29,059 shares of Newmark Class A common stock.

On December 28, 2021 (the “Effective Date”), the Compensation Committee awarded to Howard W.

Lutnick, the Company’s Chairman and principal executive officer, a one-time $ 50 million bonus award in consideration of his efforts in delivering superior financial results.

These efforts included his management of the Company and success in creating value for the Company’s stockholders in connection with structuring, hedging, and monetizing the Nasdaq, Inc.

common stock (the “Nasdaq Shares”) held by the Company and the significant amount of income earned by the Company related to these activities and the significant increase in value of such Nasdaq Shares over time.

On December 27, 2021, the Compensation Committee approved a one-time bonus award to Mr.

Lutnick (the “Award”), which was evidenced by the execution and delivery of a Retention Bonus Agreement dated December 28, 2021 (the “Effective Date”) and described below (the “Award Agreement”), in consideration of his success in managing certain aspects of the Company’s performance as its principal executive officer and Chairman.

The Award rewarded Mr.

Lutnick for his efforts in delivering superior financial results for the Company and its stockholders, including in particular his success in creating substantial value for the Company and its stockholders in connection with creating, structuring, hedging and monetizing the forward share contract to receive over time shares of common stock of Nasdaq, Inc.

(the “Nasdaq Derivative”) held by the Company (together, the “Nasdaq Shares”) and the strong balance sheet and significant amount of income created from the Nasdaq Derivative.

A principal reason for structuring the Award with a substantial portion to be paid out over three years was also to further incentivize Mr.

Lutnick to continue to serve as both the Company’s principal executive officer and its Chairman for the benefit of the Company’s stockholders.

The Award Agreement provides for an aggregate cash payment of $ 50 million, payable as follows:

$ 20 million within three days of the Effective Date (which payment was made on December 31, 2021), and $ 10 million within thirty days following vesting on each of the first, second and third anniversaries of the Effective Date.

Any entitlement to future amounts not vested will be forfeited immediately if, prior to the applicable anniversary date, Mr.

Lutnick ceases to serve as both the Company’s Chairman and its principal executive officer, unless Mr.

Lutnick ceasing to serve in either such capacity occurs pursuant to a “Vesting Termination,” as that term is defined in the Award Agreement.

Lutnick has purchased Newmark Class A Common Stock with the after-tax proceeds of the initial tranche of the Award.

The Award Agreement describes a “Vesting Termination” as (i) a termination of Mr.

Lutnick’s employment by the Company without “Cause” (as that term is defined in the Award Agreement) or (ii) an involuntary removal of the Executive from the position of Chairman of the Board on or after the occurrence of a Change in Control (as that term is defined in the Change of Control Agreement dated as of December 13, 2017 by and between Mr.

Lutnick and the Company (the “Control Agreement”).

In the event that Mr.

Lutnick ceases to serve as both the Company’s Chairman and its principal executive officer pursuant to a Vesting Termination, any amounts not vested will immediately become fully vested.

The Award Agreement provides that Mr.

Lutnick ceasing to serve as the Company’s Chairman and principal executive officer pursuant to his death or disability does not constitute a Vesting Termination.

The provisions of the Control Agreement do not apply to the Award.

A copy of the Award Agreement was attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 29, 2021 and is described in detail under the heading “2021 Lutnick Award” in Amendment No.

1 to the Company’s Annual Report on Form 10-K/A filed with the SEC on August 15, 2022.

On June 28, 2021, in connection with the 2021 Equity Event, the Newmark Compensation Committee approved the following for Mr.

(i) the exchange of 279,725 exchangeable Newmark Holdings PSUs into 263,025 shares of Class A

common stock of Newmark based on the then applicable exchange ratio of 0.9403 ;

and $ 1,465,874 associated with Mr.

Lutnick’s non-exchangeable 193,530 Newmark Holdings PPSUs was redeemed and used for tax purposes;

(ii) the conversion of 552,482.62 non-exchangeable Newmark Holdings PSUs with the right to exchange PSUs into HDUs (“H-Rights”) into 552,482.62 non-exchangeable Newmark Holdings HDUs and redemption of such HDUs for their Capital Account of $ 7,017,000 , paid in the form of Nasdaq Shares issued at $ 177.11 per share (which was the NASDAQ closing price as of June 28, 2021);

and $ 7,983,000 associated with Mr.

Lutnick’s non-exchangeable Newmark Holdings PPSUs with -H were redeemed and used for tax purposes;

(iii) the exchange of 520,380 exchangeable BGC Holdings PSUs into 520,380 shares of Class A common stock of BGC Partners, and $ 1,525,705 associated with Mr.

Lutnick’s exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes;

(iv) the redemption of 88,636 non-exchangeable BGC Holdings PSUs pursuant to Mr.

Lutnick’s rights under his existing standing policy, and the issuance of 88,636 shares of Class A common stock of BGC Partners;

(v) the conversion of 1,131,774 non-exchangeable BGC Holdings PSUs with H-Rights into 1,131,774 non-exchangeable BGC Holdings HDUs and $ 7,983,000 associated with Mr.

Lutnick’s BGC Holdings PPSUs with H- Rights was redeemed and used for tax purposes in connection with the exercise of the exercise of the BGC Holdings HDUs;

and (vi) the issuance of 29,059 shares of Class A common stock of Newmark.

In accordance with Mr.

Lutnick’s right under his existing standing policy, and in connection with the 2021 Equity Event, upon the approval of the Newmark Compensation Committee:

(i) 2,909,819 non-exchangeable Newmark Holdings PSUs, pursuant to Mr.

Lutnick’s rights under his existing standing policy, were redeemed and 2,736,103 shares of Class A common stock of Newmark, based upon the then applicable exchange ratio of 0.9403 , were granted to Mr.

and (ii) $ 8,798,546 associated with Mr.

Lutnick’s rights under his existing standing policy was redeemed and used for tax purposes.

See “Executive Compensation” in our proxy statement filed August 15, 2022 for additional information and definitions.

Gosin, Chief Executive Officer

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Gosin’s 2,114,546 non-exchangeable BGC Holdings PSUs were redeemed for zero and 2,114,456 shares of BGC Class A common stock were issued to Mr.

On June 28, 2021, the Compensation Committee approved the following for Barry M.

Effective as of April 14, 2022, Mr.

Gosin’s 905,371 BGC Holdings HDUs were redeemed for a cash payment of $ 3,521,893 based upon a price of $ 3.89 per unit, which was the closing price of BGC Partners Class A common stock on April 14, 2022.

On June 28, 2021, the Compensation Committee approved the following for Mr.

Gosin, the Company’s Chief Executive Officer:

(i) the exchange of 1,531,061.84 exchangeable Newmark Holdings units (comprised of 1,438,597.37 exchangeable Newmark Holdings PSUs and 92,464.47 exchangeable Newmark Holdings APSUs) into 1,439,658 shares of Newmark Class A common stock based upon the current exchange ratio of 0.9403 ;

(ii) the redemption of 60,753.97 exchangeable Newmark Holdings PPSUs for a cash payment of $ 9.2 million, to be remitted to the applicable tax authorities to the extent necessary for payment in connection with the delivery of the Newmark shares in (i) above;

(iii) the conversion of 443,871.60 non-exchangeable Newmark Holdings PSUs with H-Rights into 443,871.60 non-exchangeable Newmark Holdings HDUs, less any taxes and withholdings in excess of $ 5.4 million, and redemption of such HDUs for their Capital Account, paid in the form of Nasdaq Shares;

(iv) the redemption of 539,080.23 non-exchangeable Newmark Holdings PPSUs for cash in connection with the delivery of the Newmark Holdings HDU cash payment in (iii) above;

(v) the exchange of 3,348,706 exchangeable BGC Holdings units (comprised of 3,147,085 exchangeable BGC Holdings PSUs and 201,621 Exchangeable BGC Holdings APSUs) into 3,348,706 shares of BGC Class A common stock;

(vi) the redemption of 80,891 exchangeable BGC Holdings PPSUs for a cash payment of $ 9.8 million, to be remitted to the applicable tax authorities to the extent necessary for payment in connection with the delivery of the BGC shares in (v) above;

(vii) the conversion of 1,592,016 non-exchangeable BGC Holdings PSUs with H-Rights to into 1,592,016 non-exchangeable BGC Holdings HDUs, less applicable taxes and withholdings in excess of the BGC Holdings PPSU value in (viii) below;

(viii) the redemption of 264,985 non-exchangeable BGC Holdings PPSUs with rights to redeem for cash in connection with exercise of above BGC Holdings HDUs

for a cash payment of $ 0.0 million , to be remitted to the applicable tax authorities in connection with the delivery of the BGC Holdings HDU cash payment in (vii) above;

and (ix) the issuance of 12,500 Newmark Class A common stock.

(i) the exchange of 1,531,061.84 exchangeable Newmark Holdings units (comprised of 1,438,597.37 exchangeable Newmark Holdings PSUs and 92,464.47 exchangeable Newmark Holdings APSUs) into 1,439,658 shares of Class A common stock of Newmark based upon the then current exchange ratio of 0.9403 ;

and $ 834,508 associated with Mr.

Gosin’s exchangeable Newmark Holdings PPSUs was redeemed and used for tax purposes;

(ii) the conversion of 443,871.60 non-exchangeable Newmark Holdings PSUs with H-Rights into 443,871.60 non-exchangeable Newmark Holdings HDUs, and redemption of such HDUs, less any taxes and withholdings in excess of $ 5,362,452 , paid in the form of Nasdaq shares issued at $ 177.11 per share (which was the NASDAQ closing price as of June 28, 2021);

and $ 5,362,452 in connection with Mr.

Gosin’s Newmark Holdings PPSUs with H-Rights was redeemed and used for tax purposes;

(iii) the exchange of 3,348,706 exchangeable BGC Holdings units (comprised of 3,147,085 exchangeable BGC Holdings PSUs and 201,621 exchangeable BGC Holdings APSUs) into 3,348,706 shares of Class A common stock of BGC Partners;

and $ 298,273 associated with Mr.

Gosin’s exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes;

(iv) the conversion of 1,592,016 non-exchangeable BGC Holdings PSUs with H-Rights into 1,592,016 non-exchangeable BGC Holdings HDUs, and $ 1,129,499 associated with Mr.

Gosin non-exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes;

and (v) the issuance of 12,500 shares of Class A common stock of Newmark.

Rispoli, Chief Financial Officer

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Michael Rispoli, the Company’s Chief Financial Officer:

(i) the exchange of 23,124 exchangeable Newmark Holdings PSUs into 21,744 shares of Newmark Class A common stock based on the current exchange ratio of 0.9403 ;

(ii) the redemption of 18,668.77 exchangeable Newmark Holdings PPSUs for a cash payment of $ 0.2 million, to be remitted to the applicable tax authorities to the extent necessary for payment in connection with the delivery of the Newmark shares in (i) above;

(iii) the redemption of 6,000 non-exchangeable Newmark Holdings PSUs and the issuance of 5,642 Restricted Shares of Newmark Class A common stock based upon the current exchange ratio of 0.9403 ;

(iv) the conversion of 5,846 non-exchangeable Newmark Holdings PSUs with H-Rights into 5,846 non-exchangeable Newmark Holdings HDUs and the redemption of such HDUs for their Capital Account, paid in the form of Nasdaq Shares;

(v) the redemption of 4,917 non-exchangeable Newmark Holdings PPSUs with rights to redeem for cash in connection with the exercise of above Newmark Holdings HDUs for a cash payment of $ 0.1 million, to be remitted to the applicable tax authorities to the extent necessary for payment in connection with the delivery of the HDU cash payment in (iv) above;

(vi) the exchange of 36,985 exchangeable BGC Holdings PSUs into 36,985 shares of BGC Class A common stock;

(vii) the redemption of 29,791 exchangeable BGC Holdings PPSUs for a cash payment of $ 0.1 million to the applicable tax authorities to the extent necessary for payment in connection with the delivery of the BGC shares in (vi) above;

and (viii) the issuance of 383 Newmark Class A Common Stock.

(i) the exchange of 23,124 exchangeable Newmark Holdings PSUs into 21,744 shares of Class A common stock of Newmark based on the then current exchange ratio of 0.9403 and $ 208,407 associated with Mr.

Rispoli’s exchangeable Newmark Holdings PPSUs was redeemed and used for tax purposes;

(ii) 6,000 non-exchangeable Newmark Holdings PSUs were redeemed and an aggregate of 5,642 restricted shares of Newmark were issued to Mr.

Rispoli based upon the then current exchange ratio of 0.9403 , and $ 52,309 associated with Mr.

Rispoli’s non-exchangeable Newmark Holdings PPSUs was redeemed and used for tax purposes;

(iii) the conversion of 5,846.07 non-exchangeable Newmark Holdings PSUs with H-Rights into 5,846 non-exchangeable Newmark Holdings HDUs and the redemption of such HDUs, less any taxes and withholdings in excess of $ 60,750 , paid in the form of Nasdaq shares issued at $ 177.11 per share (which was the NASDAQ closing price as of June 28, 2021);

and $ 60,750 associated with Mr.

Rispoli’s PPSUs with H-Rights was redeemed and used for tax purposes;

(iv) the exchange of 36,985 exchangeable BGC Holdings PSUs into 36,985 shares of Class A common stock of BGC, and $ 134,573 associated with Mr.

Rispoli’s exchangeable BGC Holdings PPSUs was redeemed and used for tax purposes;

and (v) the issuance of 383 shares of Class A common stock of Newmark.

Merkel, Chief Legal Officer

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Merkel, the Company’s Chief Legal Officer:

(i) the redemption of 51,124.28 non-exchangeable Newmark Holdings PSUs and issuance of 48,072 shares of Newmark Class A common stock based upon the current exchange ratio of 0.9403 ;

(i) the redemption of 51,124.28 non-exchangeable Newmark Holdings PSUs and issuance of 48,072 shares of Newmark Class A common stock based upon their current exchange ratio of 0.9403 ;

and (ii) the redemption of 46,349.87 non-exchangeable Newmark Holdings PPSUs for a cash payment of $ 0.3 million, to be remitted to the applicable tax authorities to the extent necessary in connection with the issuance of the shares above.

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On April 27, 2021, a Keogh retirement account held by Mr.

Lutnick purchased 5,154 shares of our Class A common stock from us at the closing price of our Class A common stock on that date of $ 10.67 per share.

Lutnick purchased 5,154 shares of our Class A common stock from us at the closing price of Newmark Class A common stock on that date of $ 10.67 per share.

The transaction was approved by our Audit Committee.

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As of December 31, 2022 and 2021, Newmark’s investment was accounted for under the equity method (see Note 8 — “Investments”).

Newmark holds a redemption option in which Real Estate LP can redeem in full Newmark’s investment in Real Estate LP in exchange for Newmark’s capital account balance in Real Estate LP as of such time.

Amendment of Real Estate LP Joint Venture Agreement and Payment of Administrative Fee

A payment of a $ 44.0 thousand administrative fee was made to Newmark in connection with such amendment.

Transactions with Cantor Fitzgerald & Co., a wholly owned broker-dealer subsidiary of Cantor ("CF&Co")

On June 18, 2018 and September 26, 2018, Newmark entered into transactions related to the monetization of the Nasdaq shares that Newmark expects to receive in 2019 through 2022 (see Note 1 — “Organization and Basis of Presentation”).

On June 18, 2018 and September 26, 2018, Newmark entered into transactions related to the monetization of the Nasdaq shares that Newmark was scheduled to receive in 2019 through 2022 (see Note 1 — “Organization and Basis of Presentation”).

Newmark paid $ 4.0 million in fees for services provided by CF&Co related to these monetization transactions.

These fees were recorded as a deduction from the carrying amount of the EPUs.

On November 6, 2018, Newmark issued an aggregate of $ 550.0 million principal amount of 6.125 % Senior Notes due 2023.

In connection with this issuance of the 6.125 % Senior Notes, Newmark paid $ 0.8 million in underwriting fees to CF&Co.

On March 28, 2019, Newmark filed a registration statement on Form S-3 pursuant to which CF&Co may make offers and sales of Newmark's 6.125 % Senior Notes in connection with ongoing market-making transactions which may occur from time to time.

Such market-making transactions in these securities may occur in the open market or may be privately negotiated at prevailing market prices at a time of resale or at related or negotiated prices.

Neither CF&Co, nor any of our affiliates, has any obligation to make a market in Newmark's securities, and CF&Co or any such other affiliate may discontinue market-making activities at any time without notice.

Newmark does not receive any proceeds from market-making activities in these securities by CF&Co (or any of its affiliates).

This registration statement expired in March 2022.

On March 25, 2022, Newmark filed a new Registration Statement on Form S-3 to replace the one that was expiring.

(d) Other Related Party Transactions

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The Cantor Credit Agreement provides for each party to issue loans to the other party at the lender’s discretion.

Pursuant to the Cantor Credit Agreement, the parties and their respective subsidiaries (with respect to Cantor, other than BGC

and its subsidiaries) may borrow up to an aggregate principal amount of $ 250 million from each other from time to time at an interest rate which is the higher of Cantor’s or Newmark’s short-term borrowing rate then in effect, plus 1 %.

Pursuant to the Cantor Credit Agreement, the parties and their respective subsidiaries (with respect to Cantor, other than BGC and its subsidiaries) may borrow up to an aggregate principal amount of $ 250 million from each other from time to time at an interest rate which is the higher of Cantor’s or Newmark’s short-term borrowing rate then in effect, plus 1 %.

No amounts were outstanding as of December 31, 2022 and 2021.

As of December 31, 2021, Newmark recognized a $ 8.3 million receivable from BGC, which is included as part of "Receivables from related parties", in the Company's consolidated balance sheet.

The receivable was a result of tax refunds due to Newmark on it's share of taxable income which were included as part of BGC's consolidated tax return in the periods prior to the spin-off.

There were no receivables from related parties at December 31, 2020.

The receivable was a result of tax refunds due

to Newmark on its share of taxable income which were included as part of BGC's consolidated tax return in the periods prior to the spin-off.

This receivable was collected during the year ended December 31, 2022.

Payables to related parties were $ 9.7 million and $ 10.8 million as of December 31, 2022 and 2021, respectively.

For a detailed discussion about Newmark’s Payables to related parties, see Note 1 — “Organization and Basis of Presentation”, Note 2 — “Limited Partnership Interests in Newmark and BGC Holdings” and Note 22 — “Long-Term Debt” in Newmark’s consolidated financial statements, included in Part II, Item 8 of Newmark’s Annual Report on Form 10-K for the year ended December 31, 2020.

On May, 15 2020, BGC U.S.

OpCo ("BGC") entered into an arrangement to sublease excess space from RKF Retail Holdings LLC, a subsidiary of Newmark, which was approved by the Newmark Audit Committee.

OpCo ("BGC OpCo") entered into an arrangement to sublease excess space from RKF Retail Holdings LLC, a subsidiary of Newmark, which was approved by the Newmark Audit Committee.

The deal was a one-year sublease of approximately 21,000 rentable square feet in New York City.

Under the terms of the sublease, BGC U.S.

OpCo paid a fixed rent amount of $ 1.1 million in addition to all operating and tax expenses attributable to the lease.

In May 2021, the sublease was amended to provide for a rate of $ 15 thousand per month based on the size of utilized space, in addition to terms extending on a month-to-month basis.

In connection with the sublease, Newmark received $ 0.5 million and $ 0.8 million for both years ended December 31, 2021 and 2020, respectively.

Under the terms of the sublease, BGC paid a fixed rent amount of $ 1.1 million in addition to all operating and tax expenses attributable to the lease.

In May 2021, the sublease was amended to provide for a rate of $ 15,000 per month based on the size of utilized space, in addition to terms extending on a month-to-month basis.

The lease with BGC OpCo ended in December 2021.

Newmark received $ 0.5 million from BGC OpCo for the year ended December 31, 2021.

In January 2022, Cantor entered into an arrangement to sublease excess space from RKF Retail Holdings LLC, a subsidiary of Newmark.

The deal was a six-month sublease of approximately 21,000 rentable square feet in New York City.

Under the terms of the sublease, Cantor paid all operating and tax expenses attributable to the lease.

The sublease was amended to provide for a rate of $ 81,600 per month based on the size of utilized space, in addition to terms extending on a month-to-month basis.

In July 2022, the sublease was extended one year to June 30, 2023.

Newmark received $ 1.0 million from Cantor for the year ended December 31, 2022.

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

On June 28, 2021, the Audit Committee authorized Newmark to hire a son of its Chairman as a full-time employee of its Knotel business with an annual base salary of $ 125,000 and an annual discretionary bonus of up to 30 %.

The arrangement includes a potential profit participation consistent with other entrepreneurial arrangements in the event of certain liquidity events related to businesses developed by him.

In June 2022, the Audit Committee approved ordinary course compensation adjustments and expense, travel and housing reimbursement for him in accordance with standard Company policies up to $ 250,000 in total compensation without further Committee review.

Cantor Rights to Purchase Cantor Units from Newmark Holdings

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and (2) the exchangeable limited partnership interests to be offered to Cantor pursuant to clause (1) above would be subject to, and granted in accordance with, applicable laws, rules and regulations then in effect.

If Cantor acquires any units as a result of the purchase or redemption by Newmark Holdings of any founding partner interests, Cantor will be entitled to the benefits (including distributions) of the units it acquires from the date of termination or bankruptcy of the applicable founding partner.

In addition, any such units will be exchangeable by Cantor for a number of

shares of our Class B common stock or, at Cantor’s election, shares of our Class A common stock, in each case, equal to the then-current exchange ratio, on the same basis as the limited partnership interests held by Cantor, and will be designated as Newmark Holdings exchangeable limited partnership interests when acquired by Cantor.

bankruptcy of the applicable founding partner.

In addition, any such units will be exchangeable by Cantor for a number of shares of our Class B common stock or, at Cantor’s election, shares of our Class A common stock, in each case, equal to the then-current exchange ratio, on the same basis as the limited partnership interests held by Cantor, and will be designated as Newmark Holdings exchangeable limited partnership interests when acquired by Cantor.

The exchange ratio was initially one , but is subject to adjustment as set forth in the Separation and Distribution Agreement and was 0.9303 as of December 31, 2022.

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On March 31, 2021, Cantor purchased from Newmark Holdings an aggregate of (i) 273,088 exchangeable limited partnership interests for aggregate consideration of $ 1,105,598 as a result of the redemption of 273,088 founding partner interests, and (ii) 735,625 exchangeable limited partnership interests for aggregate consideration of $ 2,918,919 as a result of the exchange of 735,625 founding partner interests.

Following such purchases, as of December 31, 2021 there were zero founding partner interests in Newmark Holdings remaining in which the partnership had the right to redeem or exchange and with respect to which Cantor will have the right to purchase an equivalent number of Cantor units following such redemption or exchange.

On October 28, 2021, Cantor purchased from Newmark Holdings an aggregate of (i) 299,910 exchangeable limited partnership interests for aggregate consideration of $ 975,064 as a result of the redemption of 299,910 founding partner interests, and (ii) 523,284 exchangeable limited partnership interests for aggregate consideration of $ 1,898,363 as a result of the exchange of 523,284 founding partner interests.

As of December 31, 2021, there were no founding partner interests in Newmark Holdings remaining in which the partnership had the right to redeem or exchange and with respect to which Cantor will have the right to purchase an equivalent number of Cantor units following such redemption or exchange.

On May 17, 2022, Cantor purchased from Newmark Holdings an aggregate of (i) 184,714 exchangeable limited partnership interests for aggregate consideration of $ 763,064 as a result of the redemption of 184,714 founding partner interests, and (ii) 23,562 exchangeable limited partnership interests for aggregate consideration of $ 100,079 as a result of the exchange of 23,562 founding partner interests.

On October 25, 2022, Cantor purchased from Newmark Holdings an aggregate of (i) 104,701 exchangeable limited partnership interests for aggregate consideration of $ 446,647 as a result of the redemption of 104,701 founding partner interests, and (ii) 102,454 exchangeable limited partnership interests for aggregate consideration of $ 272,100 as a result of the exchange of 102,454 founding partner interests.

Following such purchases, as of December 31, 2022 there were 150,842 founding partner interests in Newmark Holdings remaining in which the partnership had the right to redeem or exchange and with respect to which Cantor will have the right to purchase an equivalent number of Cantor units following such redemption or exchange.

First Amendment to Amended and Restated Agreement of Limited Partnership of Newmark Holdings

On March 10, 2023, Newmark Holdings entered into an Amendment (the “LPA Amendment”) to its Amended and Restated Agreement of Limited Partnership, dated as of December 13, 2017 (the “Holdings LPA”).

The LPA Amendment revises certain restrictive covenants pertaining to the “Partner Obligations” and “Competitive Activity” provisions in the Holdings LPA.

Specifically, the LPA Amendment (i) reduces the length of the post-termination period during which a partner must refrain from soliciting or doing business with customers, soliciting employees, engaging in a “Competing Business” (as defined therein), or otherwise refraining from harming the partnership;

and (ii) revises the scope of the non-compete provisions under the “Partner Obligations” and “Competitive Activity” provisions in the Holdings LPA to cover “Competing Businesses” for which a partner performs the same or similar services as provided to a "Protected Affiliate" (as defined therein) and (a) involving a product, product line or type, or service of a “Protected Affiliate” within a specific geographic area, (b) involving a “Client” or a “Client Representative” (each as defined therein) of a Protected Affiliate, or (c) for which the disclosure of confidential information is likely to be inevitable.

The LPA Amendment was approved by the Company’s Board of Directors and Audit and Compensation Committees.

Special Purpose Acquisition Company

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the maturity date of the loans is the earlier of the consummation of the initial public offering of the SPAC or December 31, 2022.

As of December 31, 2021, there was no outstanding balance on this Pre-IPO loan.

Newmark OpCo Borrowing facility with Cantor

On August 2, 2021, a subsidiary of Newmark, Newmark OpCo, entered into a Master Repurchase Agreement “Repurchase Agreement with CF Secured, an affiliate of Cantor, pursuant to which Newmark may seek, from time-to-time, to execute short-term secured financing transactions.

As of December 31, 2022, there was no outstanding balance on these loans.

Master Repurchase Agreement with Cantor

On August 2, 2021, a subsidiary of Newmark, Newmark OpCo, entered into the Repurchase Agreement with CF Secured, an affiliate of Cantor, pursuant to which Newmark could seek, from time-to-time, to execute short-term secured financing transactions.

Repurchase agreements effect equity financing.

Pursuant to the Repurchase Agreement, the Company and CF Secured agreed to enter into a repurchase transaction, wherein CF Secured will deliver the cash of such repurchase transaction to the Company on an overnight basis at an initial rate of 0.95 % per annum (approximately 1.00 % less expensive than Newmark’s revolving credit facility), and the Company will deliver to CF Secured the number of shares of Nasdaq as collateral so that the market value of such shares equals 130 % of such cash proceeds.

The Nasdaq shares will be marked to market daily, and the minimum maintenance margin requirement, should the share price decline, will be 120 % of such cash proceeds.

The Company will be required to transfer additional collateral (securities and/or cash) in the event of a margin percentage decline below 120 %.

Pursuant to the Repurchase Agreement, the Company and CF Secured agreed to enter into a repurchase transaction, wherein CF Secured could deliver the cash of such repurchase transaction to the Company on an overnight basis at an initial rate of 0.95 % per annum (approximately 1.00 % less expensive than Newmark’s revolving credit facility), and the Company would deliver to CF Secured the number of shares of Nasdaq as collateral so that the market value of such shares equaled 130 % of such cash proceeds.

The Nasdaq shares would be marked to market daily, and the minimum maintenance margin requirement, should the share price decline, would be 120 % of such cash proceeds.

The Company would be required to transfer additional collateral (securities and/or cash) in the event of a margin percentage decline below 120 %.

As of December 31, 2022, there was no outstanding balance under this borrowing facility (see Note 7 — "Marketable Securities" and Note 20 — “Repurchase Agreements and Securities Loaned”).

As of December 31, 2021, the amount of shares pledged was 0.8 million and the amount outstanding under this borrowing facility was $ 140.0 million and is included in "Repurchase agreements and securities loaned" on the accompanying consolidated balance sheets.

(see Note 7 — "Marketable Securities" and Note 20 — “Collateralized Transactions”).

Referral Fees to Cantor

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Additionally, in September 2021, the Audit Committee authorized Newmark and its subsidiaries to pay referral fees to Cantor and its subsidiaries (other than Newmark and its subsidiaries) in respect of referred business, pursuant to ordinary course arrangements in circumstances where Newmark would customarily pay referral fees to unrelated third parties and where Newmark is paying a referral fee to Cantor in an amount that is no more than the applicable percentage rate set forth in Newmark’s intra-company referral policies, as then in effect, with such fees to be at referral rates no less favorable to Newmark than would be paid to unrelated third parties.

Acquisition of Spring11 Ownership Interest from Cantor

In February 2023, Newmark's subsidiary, Newmark S11 Holdings, LLC (“Newmark S11”) entered into an equity purchase agreement with CFS11 Holdings, LLC (“CFS11”), a subsidiary of Cantor, pursuant to which Newmark acquired CFS11’s 33.78 % ownership interest in Newmark S11 LP, LLC, the joint venture that owns a controlling interest in Spring11 Holdings, LP (“Spring11”), for a total purchase price of $ 11,530,598 .

The transaction, which also included Newmark S11 buying the remaining minority interests from other third-party owners on substantially the same terms, resulted in Newmark S11 owning 100 % of Spring11.

The CFS11 transaction was approved by our Audit Committee.

(28) Income Taxes

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In addition, certain of Newmark’s entities are taxed as U.S.

partnerships and are subject to the Unincorporated Business Tax (“UBT”) in New York City.

partnerships and are subject to the Unincorporated Business Tax (“UBT”) in New York City and Connecticut.

Therefore, the tax liability or benefit related to the partnership income or loss except for UBT, rests with the partners (see Note 2 — “Limited Partnership Interests”, for discussion of partnership interests), rather than the partnership entity.

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Newmark had pre-tax income of $ 154.6 million, $ 1,221.1 million and $ 146.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Newmark had pre-tax income from foreign operations of $ 4.8 million, pre-tax loss of $ 4.5 million and pre-tax loss of $ 6.4 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Newmark had pre-tax income/(loss) from foreign operations of $( 37.5 ) million, $ 4.8 million and $( 4.5 ) million for the years ended December 31, 2022, 2021 and 2020, respectively.

Differences between Newmark’s actual income tax expense and the amount calculated utilizing the U.S.

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(1) Before netting within tax jurisdictions.

Newmark has net operating losses in non-U.S.

jurisdictions of an approximate tax effected value of $ 8.6 million, which has an indefinite life.

Newmark has net operating losses ("NOL") in non-U.S.

jurisdictions of an approximate tax effected value of $ 15.8 million, of which $ 10.1 million has an indefinite life.

The remaining $ 5.7 million consists of Canada and Mexico NOL which have 10 -year and 20 -year lives, respectively.

Management assesses the available positive and negative evidence to determine whether existing deferred tax assets will be realized.

Accordingly, a valuation allowance of $ 9.6 million has been recorded against the deferred tax asset primarily related to certain net operating losses in non-U.S.

jurisdictions as it is more likely than not to not be realized.

Accordingly, a total valuation allowance of $ 18.5 million has been recorded against the deferred tax assets, primarily related to certain net operating losses in non-U.S.

jurisdictions as it is more likely than not to be realized.

Newmark’s deferred tax asset and liability are included on the accompanying consolidated balance sheets as components of “Other assets” and “Other liabilities”, respectively.

The Company has finalized its accounting policy and elected to treat taxes associated with the GILTI provision using the Period Cost Method and thus has not recorded deferred taxes for basis differences under this regime as of December 31, 2021.

Accordingly, the Company recorded a tax expense of $ 1.8 million, net of foreign tax credits, for the impact of the GILTI provision on its foreign subsidiaries.

The Company files income tax returns in the United States federal jurisdiction and various states, local and foreign jurisdictions.

The Company is currently open to examination by tax authorities in United States federal, state and local jurisdictions and certain non-U.S.

jurisdictions for tax years beginning 2019, 2018 and 2018, respectively.

The Company has elected to treat taxes associated with the GILTI provision using the Period Cost Method and thus has not recorded deferred taxes for basis differences under this regime as of December 31, 2022.

Pursuant to U.S.

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Balance, January 1, 2021 $ 208

Increases for prior year tax positions —

Decreases for prior year tax positions —

Increases for current year tax positions —

Decreases related to settlements with taxing authorities —

Decreases related to a lapse of applicable statute of limitations ( 208 )

Balance, December 31, 2021 —

Increases for prior year tax positions —

Decreases for prior year tax positions —

Increases for current year tax positions —

Decreases related to settlements with taxing authorities —

Decreases related to a lapse of applicable statute of limitations ( 208 )

Balance, December 31, 2022 $ —

As of December 31, 2021, Newmark did not have any unrecognized tax benefits which, if recognized, would affect the effective tax rate.

As of December 31, 2020, Newmark's unrecognized tax benefits, excluding related interest and penalties, were $ 0.2 million, all of which, if recognized, would affect the effective tax rate.

As of December 31, 2022 and 2021, Newmark did not have any unrecognized tax benefits which, if recognized, would affect the effective tax rate.

Newmark recognized interest and penalties related to income tax matters in “Provision for income taxes” on the accompanying consolidated statements of operations.

As of December 31, 2021, Newmark has no t accrued any tax-related interest and penalties.

(29) Accounts Payable, Accrued Expenses and Other Liabilities

The accounts payable, accrued expenses and other liabilities consisted of the following (in thousands):

December 31, 2022 December 31, 2021

Accounts payable and accrued expenses $ 208,168 $ 223,158

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Right-of-use liabilities 96,860 81,958

Credit enhancement deposit — 25,000

Contingent consideration 65 8,703

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Other long-term liabilities consisted of the following (in thousands):

December 31, 2022 December 31, 2021

Accrued compensation $ 95,770 $ 96,839

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(30) Compensation

Newmark’s Compensation Committee may grant various equity-based awards to employees of Newmark, including RSUs, restricted stock, limited partnership units and shares of Newmark Class A common stock upon exchange or redemption of Newmark limited partnership units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings”).

Newmark’s Compensation Committee may grant various equity-based awards to employees of Newmark, including RSUs, restricted stock, limited partnership units and shares of Newmark Class A common stock upon exchange or redemption of Newmark Holdings limited partnership units (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings”).

On December 13, 2017, as part of the Separation, the Newmark Group, Inc.

Long Term Incentive Plan (the

“Newmark Equity Plan”) was approved by Newmark’s then sole stockholder, BGC, for Newmark to issue up to 400.0 million shares of Newmark Class A common stock, of which 65.0 million are registered, that may be delivered or cash-settled pursuant to awards granted during the life of the Newmark Equity Plan.

Long Term Incentive Plan (the “Newmark Equity Plan”) was approved by Newmark’s then sole stockholder, BGC, for Newmark to issue up to 400.0 million shares of Newmark Class A common stock, of which 115.0 million are registered, that may be delivered or cash-settled pursuant to awards granted during the life of the Newmark Equity Plan.

As of December 31, 2022, awards with respect to 79.7 million shares have been granted and 320.3 million shares are available for future awards.

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December 31, 2022 (2)

30,687,954 5,459,388

Total exchangeable units outstanding (1) :

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December 31, 2022 7,861,359 2,654,749

(1) Includes the pre-IPO Newmark employees share-equivalent limited partnership units in BGC Holdings.

(1) The Limited Partnership table above also includes partnership units issued for consideration for acquisitions.

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As of December 31, 2021, there were 4.2 million partnership units in Newmark Holdings outstanding, of which 1.3 million units were exchangeable, and 6.8 million partnership units in BGC Holdings outstanding, of which 3.1 million were exchangeable.

(2) As of December 31, 2022, the total Limited Partnership Units included 1.6 million Newmark Preferred Units and 0.1 million BGC Preferred Units held by Newmark employees.

The Limited Partnership Units table above includes both regular and Preferred Units.

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However, the Newmark Holdings limited partnership interests held by BGC employees are included in the Newmark share count and the BGC Holdings limited partnership interests held by Newmark employees are included in the BGC share count.

A summary of the BGC Holdings and Newmark Holdings limited partnership units held by Newmark employees is as follows:

Regular units 18,039,445 8,585,061

Preferred Units 380,168 78,869

Balance, December 31, 2021 18,419,613 8,663,930

A summary of units held by Newmark employees redeemed in connection with the issuance of Newmark or BGC Class A common stock (at the current exchange ratio) or granted exchangeability for Newmark or BGC Class A common stock is as follows:

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Limited partnership units with a post-termination payout held by Newmark employees are as follows (dollars in thousands):

December 31, 2022 December 31, 2021

Notional Value $ 144,045 $ 116,717

$ 116,717 $ 257,771

Estimated fair value of the post-termination payout (1)

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Outstanding limited partnership units in BGC Holdings 44,928 105,302

Outstanding limited partnership units in BGC Holdings - unvested — 873,822

Outstanding limited partnership units in Newmark Holdings 14,277,213 11,691,406

Outstanding limited partnership units in Newmark Holdings - unvested 2,155,668 5,980,996

(1) Beginning January 1, 2018, Newmark began granting stand-alone limited partnership units in Newmark Holdings to Newmark employees.

(1) Included in “Other long-term liabilities” on the accompanying consolidated balance sheets.

Liability balance also includes $ 6.8 million of post-termination units issued as consideration for acquisition.

Compensation expense related to limited partnership units held by Newmark employees with a post-termination pay-out amount is recognized over the stated service period.

These units generally vest between three and seven years from the date of grant.

Compensation expense related to limited partnership units held by Newmark employees with a post-termination pay-out amount is recognized over the service period.

These units can vest for periods up to 7 years from the grant date.

Newmark recognized compensation expense related to these limited partnership units that were not redeemed as follows (in thousands):

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Limited partnership units amortization $ 8,322 $ ( 28,351 ) $ 18,692

During the year ended December 31, 2021, Newmark did not grant any conversion rights to Newmark employees on outstanding limited partnership units in BGC Holdings or Newmark Holdings.

During the year ended December 31, 2020, Newmark granted conversion rights to Newmark employees on 0.5 million outstanding limited partnership units in BGC Holdings or Newmark Holdings.

Granting conversion rights gives the employee the option to convert the limited units to HDUs with a capital balance within BGC Holdings or Newmark Holdings.

Generally, HDUs are not considered share-equivalent limited partnership units and are not in the fully diluted share count.

The grant of conversion rights to Newmark employees are as follows (in thousands):

The grant of exchange rights of HDU's to Newmark employees are as follows (in thousands):

December 31, 2022 December 31, 2021

Notional Value $ 8,189 $ 12,836

6 unchanged sentences

Issuance of common stock and exchangeability expenses $ ( 4,723 ) $ ( 4,563 ) $ 32,583

During the year ended December 31, 2021, Newmark employees were granted 3.7 million N Units, that are excluded from the table above, since these units are not considered share-equivalent limited partnership units and are not included in the fully diluted share count.

During the years ended December 31, 2022 and 2021, respectively, Newmark employees were granted 4.4 million and 3.7 million N Units, that are excluded from the table above, since these units are not considered share-equivalent limited partnership units and are not included in the fully diluted share count.

The N Units do not receive quarterly allocations of net income and remain unvested.

20 unchanged sentences

Balance, December 31, 2022 11,263,862 $ 9.39 $ 105,735 4.75 6,928 $ 4.17 $ 29 1.62

(1) Beginning January 1, 2018, Newmark began granting stand-alone Newmark RSUs to Newmark employees with the awards vesting ratably over a two - to eight-year vesting period into shares of Newmark Class A common stock.

(1) Beginning January 1, 2018, Newmark began granting stand-alone Newmark RSUs to Newmark employees with the awards vesting ratably over the two - to nine-year vesting period into shares of Newmark Class A common stock.

(2) RSUs granted to these individuals generally vest over a two to four year period.

16 unchanged sentences

137,406 137,406 — — —

Long-term debt (3)

550,000 550,000 — — —

Interest on long-term debt (4)

Interest on debt (4)

30,479 30,479 — — —

2 unchanged sentences

Total $ 1,585,390 $ 846,170 $ 257,609 $ 235,518 $ 246,093

(1) Operating lease are related to rental payments under various non-cancelable leases principally for office space.

(1) Operating leases are related to rental payments under various non-cancelable leases principally for office space.

(2) Warehouse facilities are collateralized by $ 137.4 million of loans held for sale, at fair value (See Note 21 - “Warehouse Facilities Collateralized by U.S.

Government Sponsored Enterprises” to our accompanying Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K) which loans were either under commitment to be purchased by Freddie Mac or had confirmed forward trade commitments for the issuance of and purchase of Fannie Mae or Ginnie Mae mortgage-backed securities.

(3) Long-term debt reflects long-term borrowings of $ 550.0 million 6.125 % Senior Notes.

Government Sponsored Enterprises") which loans were either under commitment to be purchased by Freddie Mac or had confirmed forward trade commitments for the issuance of and purchase of Fannie Mae or Ginnie Mae mortgage-backed securities.

(3) Debt reflects $ 550.0 million of 6.125 % Senior Notes.

The carrying amount of these notes was approximately $ 547.8 million.

Long-term debt also includes borrowings under the Credit Facility, which is assumed to be outstanding until the maturity date of the Credit Facility.

Debt also includes borrowings under the Credit Facility, which is assumed to be outstanding until the maturity date of the Credit Facility.

The carrying amount of the borrowing under the Credit Facility is $ 0.0 million .

(See Note 22 - “Long-Term Debt” to our accompanying Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.)

(See Note 22 - “Debt”)

(4) Reflects interest on the $ 550.0 million 6.125 % Senior Notes until their maturity date of November 15, 2023.

(5) Interest on the warehouse facilities collateralized by U.S.

Government Sponsored Enterprises was projected by using the 1-month LIBOR or SOFR rate plus their respective additional basis points, primarily 130 basis points above LIBOR and 115 basis points above SOFR, applied to their respective outstanding balances as of December 31, 2021, through their respective maturity dates.

Government Sponsored Enterprises was projected by using the 1-month SOFR rate plus their respective additional basis points, primarily 130 basis points above SOFR and 115 basis points above SOFR, applied to their respective outstanding balances as of December 31, 2022, through their respective maturity dates.

Their respective maturity dates range from June 2023 to October 2023, while one line has an open maturity date.

The notional amount of these committed and uncommitted warehouse facilities was $ 2.4 billion at December 31, 2022.

One of the warehouse lines established a $ 125.0 million sublimit line of credit to fund potential principal and interest servicing advances on the Company's Fannie Mae portfolio during the forbearance period related to the CARES Act.

Advances will have an interest rate of 1-month LIBOR plus 180 bps.

There were no outstanding draws on this sublimit at December 31, 2021.

Another warehouse line was temporarily increased by $ 300.0 million to $ 900.0 million for the period December 1, 2020 to February 1 2021.

See Note 21 - “Warehouse Facilities Collateralized by U.S.

Government Sponsored Enterprises".

As of December 31, 2022 and December 31, 2021, Newmark was committed to fund approximately $ 0.3 billion and $ 0.3 billion, respectively, which is the total remaining draws on construction loans originated by Newmark under the HUD 221(d) 4, 220 and 232 programs, rate locked loans that have not been funded, forward commitments, as well as the funding for Fannie Mae structured transactions.

26 unchanged sentences

On February 15, 2023, Newmark 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 February 28, 2022.

On February 10, 2022, Newmark's Board increased Newmark's share repurchase authorization to $ 400 million.

The ex-dividend date will be March 2, 2023.

On March 10, 2023, Newmark completed the acquisition of Gerald Eve, a U.K.

based real estate advisory firm.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data