NEWMARK GROUP, INC.

General Investor Presentation March 2020

DISCLAIMER

2

Discussion of Forward-Looking Statements about Newmark

Statements in this document regarding Newmark that are not historical facts are "forward-looking statements" that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. Except as required by law, Newmark undertakes no obligation to update any forward- looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see Newmark's Securities and Exchange Commission filings, including, but not limited to, the risk factors and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K.

Notes Regarding Financial Tables and Metrics

Excel files with the Company's most recent quarterly financial results and metrics from the current period are accessible in the financial results press release at the "Investor Relations" section ofhttp://www.ngkf.com. They are also available directly athttp://ir.ngkf.com/investors/news-releases/financial-and-corporate-releases/default.aspx.

Other Items

Newmark Group, Inc. (NASDAQ: NMRK) ("Newmark" or "the Company") generally operates as "Newmark Knight Frank", "Newmark", "NKF", or derivations of these names. The discussion of financial results reflects only those businesses owned by the Company and does not include the results for Knight Frank or for the independently-owned offices that use some variation of the Newmark name in their branding or marketing. For the purposes of this document, the terms "producer" and "front office employee" are synonymous. The average revenue per producer figures are based only on "leasing and other commissions", "capital markets", and "Gains from mortgage banking activities/origination, net" revenues and corresponding producers. The productivity figures exclude both revenues and staff in "management services, servicing fees and other." Headcount numbers used in this calculation are based on a period average. Throughout this document, certain percentage changes are described as "NMF" or "not meaningful figure".

The Company calculates volumes based on when loans are rate locked, which is consistent with how revenues are recorded for "Gains from mortgage banking activities/origination, net". Certain GSE multifamily agency volume statistics for the industry are based on when loans are sold and/or securitized, and typically lag those reported by Newmark by 30 to 45 days.

Unless otherwise stated, all results discussed in this document compare fourth quarter 2019 with the relevant year-earlier periods. Certain reclassifications may have been made to previously reported amounts to conform to the current presentation and to show results on a consistent basis across periods. Any such changes would have had no impact on consolidated revenues or earnings under GAAP or for Adjusted Earnings, all else being equal. Certain numbers in the tables throughout this document may not sum due to rounding. Rounding may have also impacted the presentation of certain year-on-year percentage changes. On November 30, 2018, BGC Partners, Inc. (NASDAQ: BGCP) ("BGC Partners" or "BGC") completed the distribution of all of the shares of Newmark held by BGC to stockholders of BGC. BGC distributed these Newmark shares through a special pro rata stock dividend (the "Spin-Off" or the "Distribution"). For all periods prior to the Spin-Off, BGC was the largest and controlling shareholder of Newmark. As a result, BGC consolidated the results of Newmark and reported them as its Real Estate Services segment. These segment results may differ from those of Newmark as a stand-alone company.

On September 8, 2017, BGC acquired Berkeley Point Financial LLC, including its wholly owned subsidiary Berkeley Point Capital LLC. These LLCs are now a direct and indirect subsidiary, respectively, of Newmark. Newmark's financial results have been recast to include the results of Berkeley Point for all periods from April 10, 2014 onward, because this transaction involved a combination of entities under common control. Unless otherwise noted, all year-on-year comparisons in this document reflect the recast results. As of October 15, 2018, the businesses formerly operating as ARA, Berkeley Point, NKF Capital Markets, and Newmark Cornish & Carey all operate under the name "Newmark Knight Frank" or "NKF".

DISCLAIMER (CONTINUED)

3

Newmark, Grubb & Ellis, ARA, Computerized Facility Integration, Excess Space Retail Services, Inc., and Berkeley Point are trademarks/service marks, and/or registered trademarks/service marks and/or service marks of Newmark Group, Inc. and/or its affiliates. Knight Frank is a service mark of Knight Frank (Nominees) Limited.

Adjusted Earnings and Adjusted EBITDA

This presentation should be read in conjunction with Newmark's most recent financial results press releases. Unless otherwise stated, throughout this document Newmark refers to its income statement results only on an Adjusted Earnings basis. Newmark may also refer to "Adjusted EBITDA". U.S. Generally Accepted Accounting Principles is referred to as "GAAP". "GAAP income before income taxes and noncontrolling interests" and "Adjusted Earnings before noncontrolling interests and taxes" may be used interchangeably with "GAAP pre-tax earnings" and "pre-tax Adjusted Earnings", respectively. See the sections of this document including "Non-GAAP Financial Measures", "Adjusted Earnings Defined", "Reconciliation of GAAP Net Income (Loss) Available to Common Stockholders to Adjusted Earnings Before Noncontrolling Interests and Taxes and GAAP Fully Diluted EPS to Post-Tax Adjusted EPS", "Fully Diluted Weighted-Average Share Count for GAAP and Adjusted Earnings", "Adjusted EBITDA Defined", and "Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA", including any footnotes to these sections, for the complete and updated definitions of these non-GAAP terms and how, when and why management uses them, as well as for the differences between results under GAAP and non- GAAP for the periods discussed herein. Below is a summary of certain GAAP and non-GAAP results for Newmark:

Highlights of Consolidated Results

4Q19

4Q18

Change

FY 2019

FY 2018

Change

(USD millions)

Revenues

$632.4

$631.7

0.1%

$2,218.1

$2,047.6

8.3%

GAAP income (loss) before income taxes and noncontrolling interests

(16.5)

76.4

(121.5)%

214.1

282.4

(24.2)%

GAAP net income (loss) for fully diluted shares

(14.2)

25.1

(156.6)%

108.2

105.6

2.5%

Adjusted Earnings before noncontrolling interests and taxes

161.5

148.6

8.6%

511.9

459.0

11.5%

Post-tax Adjusted Earnings to fully diluted shareholders

138.6

121.4

14.2%

434.9

389.2

11.7%

Adjusted EBITDA

171.9

162.2

6.0%

565.8

524.4

7.9%

Per Share Results

4Q19

4Q18

Change

FY 2019

FY 2018

Change

GAAP net income (loss) per fully diluted share

$(0.08)

$0.09

(188.9)%

$0.58

$0.64

(9.4)%

Post-tax Adjusted Earnings per share

0.52

0.45

15.6%

1.62

1.50

8.0%

Newmark's results under GAAP reflect the non-cashmark-to-market change of the Nasdaq Forwards, which hedge against potential downside risk from a decline in the share price of Nasdaq's common stock, while allowing Newmark to retain all the potential upside from any related share price appreciation. The value of the Nasdaq Forwards moves inversely with the price of Nasdaq common stock. For additional information about Newmark's expected receipt of Nasdaq shares and related monetization transactions, see the sections of the Company's most recent Financial Results Press Release, SEC filings on Form 10-Q or Form 10-K titled "Nasdaq Monetization Transactions" and "Exchangeable Preferred Partnership Units and Forward Contract", as well as any updates regarding these topics in subsequent SEC filings.

A discussion of GAAP, Adjusted Earnings and Adjusted EBITDA and reconciliations of these items, as well as liquidity, to GAAP results are found later in this document, incorporated by reference, and also in our most recent financial results press release and/or are available at http://ir.ngkf.com/

NEWMARK OVERVIEW

4

Newmark provides a full suite of services to occupiers, investors and owners of CRE

NEWMARK AT A GLANCE

  • Founded in 1929
  • $2,218 million of revenue in 2019
  • $566 million in FY Adjusted EBITDA
  • Newmark has more than 5,600 employees, including over 1,800 revenue-generating producers in over 137 offices and more than 105 cities

STABLE AND DIVERSIFIED REVENUE BASE1

Capital

Management

markets

services,

24%

servicing fees

and other

Investment

28%

sales, mortgage

brokerage, and

agency lending

Gains from mortgage

33%

Leasing and other

banking activities/

commissions

origination, net

39%

9%

  • 6.4% qualified dividend yield as of March 12, 2020

1. Revenue composition as of twelve months ended 12/31/19. Investment sales, mortgage brokerage, and agency lending revenues represents two separate line items: 1) Capital markets (which consists of investment sales and non-originated mortgage brokerage), and 2) Gains from mortgage banking activities/origination, net (referred to here as "agency lending")

Note: Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. See the discussion of Non-GAAP Financial Measures in the Appendix for further information and a reconciliation to GAAP. 2019 Adjusted EBITDA includes other income related to the Nasdaq shares of $99.1 million.

NEWMARK OFFERS A FULL SUITE OF CRE SERVICES

5

INVESTORS/OWNERS

Capital

•

Investment sales

•

Mortgage brokerage

Markets

Cross Selling

OCCUPIERS

•

Represent large

Tenant

corporation in their

Representation

global leasing

transactions

TECHNOLOGY

•

Newmark's client-facing

Vision/Client

technology providing

Technology

clients access to their

CRE data and analytics

Agency

Leasing

Property

Management

  • Owner representation
  • Recurring revenue to manage owner's assets, minimizing cost and maximizing returns

Workplace &

•

Multi-faceted

consulting service

Occupancy

underpinned by data

Strategy

and technology

•

Coordinates clients'

real estate portfolio,

Project

with services

including design

•

Consolidated data

warehouse with internal

N360

and external market

information

• Will be the foundation

for future digital apps

•

Future proof technology

GSE Lending & Loan Servicing

  • Top five Fannie Mae and top seven Freddie Mac lender in 2018
  • $8.6 billion in originations for FY 2018

Management

management and

relocation

management

GCS1 /

•

$3+ billion in savings

Consulting

achieved for clients

•

Assist large

able to integrate the

Cloud

latest in tech and

Artificial Intelligence

advancements

• Proprietary in-house

CRM

developed CRM built for

Valuation & Advisory

  • Rapidly growing business driven by recent key hires
  • Provide owners with appraisals and other Advisory Services

Lease

corporations in

understanding their

Administration

global real estate

portfolio

• Recurring revenues

for global on-site

portfolio

management and

CRE

• Purpose-built to be

best-in-class Valuation

NGAGE

and Advisory

Management and

Execution Platform

•

Client and broker

•

Clients include

commercial loan

Diligence &

originators, investment

Underwriting

banks and equity

investors

Facilities

procurement

Management

• Assist owners in

maximizing returns

on investment in real

estate

communication

integration platform to

Workframe

enhance efficiencies

and save costs for clients across business lines

1. Global Corporate Services represents multi-market corporations by providing integrated real estate services

INVESTMENT HIGHLIGHTS

INVESTMENT HIGHLIGHTS

7

1• Full Service, CRE Services Business with Diverse Revenue Streams

2• Low Risk, Intermediary-Based Business Model

3• Multiple Levers to Generate Growth and Market Share Outperformance

4• Strong Balance Sheet and Credit Metrics

5• Robust Cash Flow Generation and Access to Capital to Invest for Growth

1 FULL SERVICE, CRE SERVICES BUSINESS WITH

DIVERSE REVENUE STREAMS

8

Newmark is a full-service firm with the highest margins relative to its US CRE Peers. Newmark's Americas

Revenue was up 8% in 2019 on the strength of record volumes.

Business Line

1

CBRE

JLL

C&W

CIGI

Leasing

✔

✔

✔

✔

✔

Investment Sales & Mortgage Brokerage

✔

✔

✔

✔

✔

Multifamily lending (GSE and FHA)

✔

✔

✔

✔

Servicing

✔

✔

✔

✔

Property & Facility Management

✔

✔

✔

✔

✔

Consulting

✔

✔

✔

✔

✔

Valuation & Advisory

✔

✔

✔

✔

✔

Property & Development Services

✔

✔

✔

✔

✔

Non-Agency Lending

✔

Investment Management

✔

✔

✔

2019 Americas Revenue ($bn)2

$2.2

$6.9

$3.9

$4.4

$1.7

2019 Americas Revenue YoY Growth2

8%

11%

21%

8%

6%

2019 Adj. EBITDA Margin2

26%

20%

18%

11%

9%

Source: Public filings

  1. Includes Newmark's 27% interest in the commercial real estate-related limited partnership between the Company and Cantor
  2. Newmark and CIGI reflect gross revenue, while CBRE, JLL, and C&W reflect fee revenue. CBRE, JLL, and C&W margin based on fee revenue

as well. All figures and resulting margins conform to FASB's implementation of ASC 606. NMRK AEBITDA margin would be 21% excluding Nasdaq earn-out.

DIVERSE AND RECURRING REVENUE STREAMS

9

Diverse and Recurring Revenue Streams1

Highly Visible and Recurring Revenues

are Increasing Proportion of Total

Leasing

(agency)

Leasing

Valuation

(tenant

rep)

Global

Corporate

25%

Services

41%

Investment

33%

Servicing

Fees

Sales

Property &

Non-

Facilities

Originated

Mgmt.

Mortgage

Brokerage

Mortgage

Banking

70%

60%

50%

40%

30%

20%

10%

0%

68%67%

61%62%

25%25%

24%24%

37%

38%

43%

41%

2016

2017

2018

2019

Contractual

Highly visible

Contractual + Visible

Newmark at a Glance

  • Newmark's business model features a growing concentration of recurring revenues
  • Variable costs were 75% to 76% of the Company's total expenses in 2017, 2018, and 2019
  • Newmark's variable cost structure ensures it can be responsive to changes in economic cycles

1. Variable costs are total compensation, fixed costs are total non-compensation expenses. Note: Newmark may also refer to highly visible revenue, predictable revenue, recurring revenues, and/or contractual revenue.

3 MULTIPLE LEVERS TO GENERATE GROWTH AND

MARKET SHARE OUTPERFORMANCE

10

Global CRE services market opportunity

Evolving demographics favorable for multifamily outlook

Increasing institutional investment in CRE

Drive cross-selling across service offerings to increase market share

Leverage technology to drive internal and client efficiency

3 MULTIPLE LEVERS TO GENERATE GROWTH AND

MARKET SHARE OUTPERFORMANCE (CONT'D)

11

Massive potential global market for brokerage and services

~$225B

Total Revenue Opportunity in 20181

TOP 10 COMPANIES:

$34B

(~15%)

$2.0B

(~1%)

Large and Highly

Fragmented Market

The Top 10 CRE Brokerage

  • Services Firms
    2018 Market Share ~15%

1. Represents actual revenues earned by global commercial real estate services firms as well as potential revenues from outsourcing opportunities

Sources: IBIS World, Bloomberg, public filings, CoStar and Newmark Knight Frank research. Top 10 CRE Brokerage and Services Companies as measured by

FY18 global revenue: CBRE (fee revenue), JLL/HFF pro forma combined company (fee revenue), Cushman & Wakefield (fee revenue), Colliers, Savills, Newmark, Knight Frank, Marcus & Millichap, and Walker & Dunlop, all per public filings. Avison Young is per their GVA acquisition press release on 2/1/19. Measured by FY18 global GAAP gross revenue, the same top 10 CRE brokerage and services firms' market share is ~25%. Chart has not been shown to scale.

3 MULTIPLE LEVERS TO GENERATE GROWTH AND

MARKET SHARE OUTPERFORMANCE (CONT'D)

12

Evolving demographics favorable for multifamily outlook

Home Ownership Rate Declining

Other Trends Favor Renting

70%

69%

2011-2019 CAGR

68%

Peak home

8.0%

7.3%

ownership 69%

7.0%

5.9%

67%

(2004)

6.0%

66%

5.0%

4.7%

65%

4.0%

64%

3.0%

2.4%

2.0%

63%

1.0%

62%

0.0%

Average Weekly

Median U.S. U.S. Home Prices

Student Debt

2018

2028

2038

Scenario 1: Base

Scenario 2: High

Scenario 3: Low

Wages

Asking Rent

Outstanding

Peak home ownership rate: 69.0% in 2004

  • In many areas where Newmark operates, home ownership rates are significantly below average (i.e. 22% in New York County/Manhattan, 43% in San Francisco City/County, 52% in Denver County)
  • In 2019, the median age of a homebuyer is 46 - the oldest since the National Association of Realtors began keeping records in 1981
  • The average price of lower-priced homes rose by 64% from early 2012 to late 2018 while the price of higher-end homes rose just 40%, according to mortgage data tracker CoreLogic
  • Home ownership rates for those aged 25-34 is 40%, the lowest level in three decades and down from 48% in 2001

Notes: Historical home ownership rate data is seasonally adjusted. Home prices are based on S&P/Case-Shiller US national index.

Sources: Data for 25-34 year old ownership is from WSJ Article titled, 'Financial Crisis Yields a Generation of Renters', published 7/27/2019. All other data is from the Federal Reserve Bank of St. Louis, US Census Bureau, the BLS, Federal Reserve Bank of New York, Newmark Knight Frank Research, Bloomberg, and/or the National Apartment Association.

3 MULTIPLE LEVERS TO GENERATE GROWTH AND

MARKET SHARE OUTPERFORMANCE (CONT'D)

13

Newmark Can Drive Cross Selling Across Multifamily Service Offerings

2019 Capture Rate equates to 33%

  • Synergy between Newmark's multifamily investment sales and combined GSE/FHA origination and multifamily mortgage brokerage business result in multiple avenues for growth
    • Additional origination, mortgage brokerage, and servicing opportunities via investment sales teams
    • More investment sales via origination and mortgage brokers
    • Increased cross-sell of Newmark's other services, such as Valuation & Advisory

Consistent growth in cross-sell capture rate

35%$25.0

30%

33%

Billions)

$20.0

Rate1

25%

(US$

23%

CaptureSell-Cross

$15.0

SalesInvestmentMultifamily

5%

20%

15%

$10.0

13%

10%

$5.0

  • Long-termcapture rate target of investment sales to origination/mortgage brokerage is 35% to 40%, which would put Newmark in line with the conversion achieved by certain peers

0%

$0.0

2017

2018

2019

Origination and Multifamily Mortgage Brokerage Cross-Sell Capture Multifamily Investment Sales Volumes

1. The capture rate represents the proportion of 2019 multifamily investment sales volume financed through Newmark's multifamily origination and mortgage brokerage business. Only a portion of notional investment sales volume is typically debt financed, based on prevailing loan-to- value ratios.

3 MULTIPLE LEVERS TO GENERATE GROWTH AND

14

MARKET SHARE OUTPERFORMANCE (CONT'D)

Increasing institutional investment in CRE

Target Allocation to Real Estate by

All Institutional Investors

10.4% 10.5% 10.6%

9.6%

5.6%

4.5%

3.7%

1990

2000

2010

2015

2018

2019

2020E

Total Industry Dry Powder (US$

billions)

$128

$123

$124

$93

$202

$196

$199

$70

$134

$79

$5

$16

2000

2010

2015

2018

2019

2020YTD

North America

Rest of World

  • As institutional investors increase their ownership of commercial real estate, Newmark expects to benefit from increased transaction velocity and outsourcing opportunities

Sources: Preqin Real Estate Online, National Association of Industrial and Office Properties, Cornell University's Baker Program in Real Estate, NKF Research, and Hodes Weill & Associates

TECHNOLOGY AS A DIFFERENTIATOR

15

Newmark is focused on integrating technology within its business lines, providing clients with value-adding products and improving internal capabilities through proprietary software

Integrated business

Cloud hosted appraisal

Proprietary CRE

Modernizing the

CRE workflow and

intelligence, reporting

workflow and revenue

research data

space tour

collaboration

and analytics for our

management platform;

warehouse;

experience for

technology that

real estate Occupier

Proprietary analysis,

Modern data discovery

clients

addresses the

clients

comparable data, and

and presentation

Team collaboration

unique complexity of

reporting;

functionality;

CRE transactions

Corporate and third

Lead generation;

and projects across

party system/data

Seamless experience

all of Newmark's

integrations

across desktop &

business lines

mobile

Value Proposition

Reduces occupier costs

Best in class Valuations

Improves broker

Digital touring for our

Streamlined

Improves speed and

software that facilitates

productivity and

clients

communication and

accuracy of decision

the production of

provides data-driven

unprecedented

making through

appraisals

decision-making

transparency with our

advanced data and

capabilities

clients

analytics

4 STRONG BALANCE SHEET AND CREDIT METRICS

16

  • Newmark maintains a strong credit profile with conservative leverage tolerances
    • Net Debt / Adj. EBITDA at 0.8x as of 12/31/19
    • Ample liquidity and access to capital markets
    • Historically acquisitive and track record of returning capital to shareholders through dividends

Consistent Dividend Payer & Acquirer

Consistently Low Leverage

9/2018:

11/2018:

12/2018:

4/2019:

6/2019:

12/2019:

NMRK

NMRK

NMRK

NMRK

NMRK

NMRK

Acquires

completes

Acquires MiT

Acquires

Acquires

Acquires

RKF Retail

spin-off from

National Land

MLG

Harper Dennis

0.9x

0.9x

0.9x

ACRES

BGC Partners

Services

Commercial

Hobbes

0.8x

$0.10

$0.10

$0.10

$0.10

0.7x

$0.09

4Q18

1Q19

2Q19

3Q19

4Q19

4Q18

1Q19

2Q19

3Q19

4Q19

Dividends Paid per Share

Net Debt / TTM EBITDA

Note: 2019 includes other income related to the Nasdaq shares of $99.1 million

5 SIGNIFICANT DRY POWDER FROM ROBUST CASH FLOW

GENERATION AND ACCESS TO CAPITAL

17

Analysis of Cash Generation and Hypothetical Dry Powder FY 2019 (in millions)

See next page for notes to above chart.

NOTES TO ANALYSIS OF CASH GENERATION AND

HYPOTHETICAL DRY POWDER FY 2019

18

The analysis on the preceding page is meant to show the hypothetical amount of cash the Company might have had available for corporate purposes as of 2/28/2020. The analysis is based on GAAP and non-GAAP figures, as noted below. Such figures can be found in Newmark's SEC filings, in its financial results press releases, and/or in the Excel files that accompany such releases. Any non-GAAP figures are defined and reconciled with the directly comparable GAAP figures in such press releases and/or Excel files. These materials can be found at http://ir.ngkf.com/.

  1. Adjusted EBITDA for FY 2019 included pre-tax income of $99.1 million related to the Nasdaq earn-out.
  2. Taken from the line item "Purchases of fixed assets" in the Consolidated Statements of Cash Flows, which is identified as a cash outflow from investing. Excludes cash for acquisitions of $33.9 million during the year ended December 31, 2019, as noted in the line item "Payments for acquisitions, net of cash acquired" in the Consolidated Statements of Cash Flows. In previous disclosures, this line item was titled "Payments for acquisitions, net of cash acquired and repurchases of noncontrolling interests".
  3. The $32 million figure is taken from the line item "Interest expense, net" in the Consolidated Statements of Operations.
  4. Taken from the Adjusted Earnings line item "Provision for income taxes for Adjusted Earnings".
  5. Represents the cash available for investing or to fully diluted shareholders before dividends and distributions.
  6. The figure is the sum of the line items "Earnings distributions to limited partnership interests and noncontrolling interests" and "Dividends to stockholders" in the Consolidated Statements of Cash Flows. In previous disclosures, these line items were titled "Distributions to noncontrolling interests" and "Distributions to stockholders", respectively.
  7. Represents the cash generated and available for investing or to fully diluted shareholders after the payment of dividends and distributions based on Newmark's GAAP and non-GAAP measure, as described above, for the most recently available and relevant trailing four-quarter period.
  8. The Company defines liquidity as the sum of cash and cash equivalents plus marketable securities that have not been financed, reverse repurchase agreements, and securities owned, less securities loaned and repurchase agreements.
  9. This hypothetical analysis assumes the Company borrowed the approximately $376.1 million undrawn amount remaining on its $425M revolving credit facility (as of 2/28/2020). The Company upsized its revolving credit facility from $250M on 2/26/2020.
  10. This represents the extra annualized interest expense, net of AE taxes, had the $425M revolving credit facility been drawn down in its entirety. The borrowing rate is LIBOR + 175. The one-month LIBOR rate with respect to the credit facility as of 2/28/2020 was 152 basis points, giving an all-in rate of 327 basis points.
  11. This analysis excludes approximately $496 million worth of additional Nasdaq payments expected from 2023 through 2027, which are not
    reflected on Newmark's balance sheet because the shares are contingent upon Nasdaq generating at least $25 million in gross revenues annually. Nasdaq generated gross revenues of approximately $4.3 billion in 2019. The Nasdaq price was $107.10 as of the 12/31/2019 close.

Note: While not directly comparable, post-Tax Adjusted Earnings was $434.9 million for FY 2019.

5 ROBUST CASH FLOW GENERATION AND ACCESS TO

CAPITAL TO INVEST FOR GROWTH (CONT'D)

19

  • Over 58% of Newmark's revenue growth since 2011 has been organic, excluding Berkeley Point
  • Excluding Berkeley Point, companies acquired by Newmark have organically grown their revenues by an average of 27% since acquisition, while Berkeley Point has more than doubled its revenues versus 2014
  • Newmark has demonstrated the ability to successfully integrate acquisitions, proven by revenue growth and expanding margins

Newmark Revenues1

(US$ millions)

$2,500

2,218

$2,000

358

$1,500

691

$1,000

189

$500

980

$0

230

2011

2012

2013

2014

2015

2016

2017

20182

2019

Organic

Organic Growth on Acq

Acquisitions - Ex BP

Acquisitions - Berkeley Point

1. FY 2012 based on revenues reported for BGC's Real Estate Services segment. FY 2011 revenues are based on unaudited full year 2011 revenues for Newmark & Co. Berkeley Point revenues from April 8, 2014 onwards are included because it was an entity under common control. Berkeley Point TTM revenues would have more than doubled since 2014 even using full-year 2014 unaudited figures.

2. For 2018, the impact of FASB topic ASC 606 increased both NMRK's revenues and non-compensation expenses related to its management services business by approximately $86 million. There was no corresponding additional amount of expense or revenue recorded for any other period, as Newmark adopted the modified retrospective approach to ASC 606

INVESTMENT HIGHLIGHTS

20

1• Full Service, CRE Services Business with Diverse Revenue Streams

2• Low Risk, Intermediary-Based Business Model

3• Multiple Levers to Generate Growth and Market Share Outperformance

4• Strong Balance Sheet and Credit Metrics

5• Robust Cash Flow Generation and Access to Capital to Invest for Growth

APPENDIX A: BUSINESS OVERVIEW & FUTURE GROWTH

NEWMARK HAS A HISTORY OF STABLE AND GROWING

OPERATING PERFORMANCE THAT CONTINUED IN 4Q19

22

Highly Visible and Recurring Revenue

Adjusted EBITDA

Streams Show Strong Growth

(US$ millions)

(US$ millions)

$600

$566

$524

$99

$500

$87

$437

$467

$2,218

$400

$2,048

$1,596

$651

$739

$300

$604

68%

67%

$200

62%

$162

$172

$1,396

$1,479

$100

$993

2017

2018

2019

$0

FY 18

FY 19

4Q18

4Q19

Highly Visible &

Transactional

Highly Visible

Margin

25.6%

25.5%

25.7%

27.2%

Recurring

& Recurring

as % of Total

Nasdaq other

income

Note: Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. See "Non-GAAP Financial Measures" on page 2 and Appendix C: Supporting Materials for further information and a reconciliation to GAAP.

NEWMARK'S VOLUMES OUTPERFORMED THE BROADER

COMMERCIAL REAL ESTATE INDUSTRY IN 4Q2019

23

Newmark Group, Inc. Quarterly and FY Volumes

(in $ millions)

Q4 19

Q4 18

Change %

2019

2018

Change %

Investment Sales 1

16,691

15,200

10%

50,675

42,269

20%

Mortgage Brokerage 2

7,206

5,268

37%

20,700

14,026

48%

Total Capital Markets

23,897

20,467

17%

71,375

56,294

27%

Fannie Mae

880

1,250

-30%

3,204

4,567

-30%

Freddie Mac

1,299

1,235

5%

6,722

3,982

69%

FHA

-

68

-100%

14

165

-91%

Total Origination Volume

2,180

2,553

-15%

9,941

8,715

14%

Total Debt and Capital Markets Volume

26,077

23,020

13%

81,316

65,010

25%

  1. Includes all equity advisory transactions
  2. Includes all non-origination debt placement transactions
  • Total debt and capital markets volume increased 25% in 2019 and has grown by 30% annualized since 2015
  • Newmark's combined volumes from investment sales increased ≈ 10% YoY to $16.7 billion in 4Q2019 and ≈ 20% to $50.7 billion in 2019. Real Capital Analytics (RCA) estimates that overall U.S. investment sales volumes fell 2% YoY during 4Q2019 and decreased 7% in the full year
  • Newmark's combined volumes from originations and mortgage brokerage increased ≈ 20% YoY to $9.4 billion in 4Q2019 and grew ≈ 35% to $30.6 billion in 2019. Total originations increased 7% YoY in 4Q2019 and 13% in 2019, while GSE originations declined 30% in 4Q2019 and 1% in 2019, both according to the Mortgage Bankers' Association (MBA) Originations Index

Note: Certain non-originated mortgage brokerage volumes shown above that were previously included in FHA/Other were reclassified as mortgage brokerage in the second quarter of 2019. These reclassifications conform to the current presentation to show results on a consistent basis across periods and had no impact on consolidated results under GAAP or non-GAAP for any period discussed herein.

FULL SERVICE CRE SERVICES BUSINESS WITH

DIVERSE REVENUE STREAMS

24

Leading customer base lends itself to diversified revenue mix.

Balanced Mix of Geographic Revenue Streams1

Balanced Mix of Revenues by Client Type2

Region

% of NMRK2

Central

27%

East

30%

California

19%

New York

15%

West

6%

International

2%

Financial

Services, 28%

Retail Trade, 3%

Manufacturing,

Wholesale

Trade, 8%

8%

Other Services,

Other , 2%

12%

Legal services,

Real Estate, 28%

5%

Health services,

7%

Low Revenue Concentration

All Other Clients

92%

10 Largest Clients

~6%

  1. Based on FY 2019 total revenues
  2. Customer base for FY 2018 and Newmark's Top approximately 100 clients represented 22% of total revenues. Top 100 excludes Berkeley Point. "Other" includes Transportation & Public Utilities and Public Administration industries. "Other Services" includes Business Services, Educational Services, Amusement & Recreation Services, and Engineering & Management Services industries

PROVEN ACQUISITION TRACK RECORD

25

  • Newmark has a successful track record of accretive acquisitions
  • In addition to growth through acquisition, 58% of Newmark's growth since 2011 has been organic, excluding Berkley Point

4 Acquisitions

9 Acquisitions

4 Acquisitions

›

Excess Space

›

Berkeley Point

› MLG Commercial

›

Computerized Facility

Financial

› ACRES

›

Regency

Integration

›

Workframe

Newmark &

2 Acquisitions

›

Cincinnati Commercial

Capital Partners

›

Spring11

›

Harper Dennis

Company

Real Estate

›

6 former Integra

Hobbs

acquired

›

Frederick Ross

›

Steffner Commercial

by BGCP1

›

Smith Mack

Real Estate d/b/a

Realty Resources

Newmark Grubb

offices

Memphis

2011

2012

2013

2014

2015

2016

2017

2018

2019

Grubb & Ellis

18 Acquisitions

5 Acquisitions

7 Acquisitions

•

Cornish & Carey

•

The CRE Group

•

4 former Integra

Commercial

•

Rudesill-Pera

Realty Resources

•

Apartment Realty

Multifamily

offices

•

RKF

Advisors (ARA)2

•

Continental Realty

•

Newmark Grubb

•

Jackson Cooksey

Mexico City

•

MiT National

•

Walchle Lear

Land Services

1. Newmark held its Initial Public Offering on December 15, 2017 and was spun-off from BGC Partners on November 30, 2018.

2. Included 17 transactions some of which were completed after 2014 Note: Certain of these acquisitions involved only the purchase of assets

SELECT RECENT HIRES AND ACQUISITIONS

26

NOTABLE RECENT HIRES

  • Hotel Capital Markets in NYC
  • Office, Retail and Multifamily Investment Sales in NYC
  • Debt Capital Markets in North Carolina
  • Debt Originations in Denver
  • Senior Housing and Healthcare Capital Markets National Platform
  • Senior Housing and Healthcare Debt Capital Markets National Platform
  • Multifamily Investment Sales and Debt in Washington, DC
  • Loan Sales Advisory National Platform

ACQUISITIONS MADE IN 2019

Harper Dennis Hobbs, a market leading London-based retail tenant- focused advisory firm servicing an extensive collection of blue-chip clients;

Workframe, Inc., a software workflow solution built to address the unique complexity of the CRE transaction lifecycle;

ACRES, a leader in landlord and tenant representation, investment sales, and asset management in the West;

MLG Commercial, a leading brokerage and property

MLG Commercial management services company in Wisconsin.

GLOBAL FOOTPRINT PROVIDES PLATFORM FOR

GROWTH

27

4Q19 ACQUISITION

Over 137offices in

105cities

Opportunity to broaden services offered in many of these offices

LONDON, UK

Langham House

302-308 Regent Street

Marylebone, London

W1B 3AT

N O T A B L E R E C E N T H I R E S

Chicago: Capital Markets/Office Investment Sales Team

4Q19 BROKER/

Toronto: Senior housing, healthcare,

TEAMS:

and multi-family investment sales

Los Angeles: Office Agency

4Q19

London, UK: Harper Dennis Hobbs

ACQUISITION:

Central Texas: Capital Markets/

Office Investment Sales Team

1Q20 BROKER/

West Los Angeles, CA: Industrial Capital Markets

TEAMS:

Phoenix, AZ: Retail Capital Markets

Atlanta, GA : Multi Family Investment Sales

Denver, CO: Debt Originations

A F F I L I A T E D E T A I L S

Senior Housing and Healthcare Capital

Markets National Platform

NATIONAL

Senior Housing and Healthcare Debt Capital Markets

National Platform

Loan Sales Advisory National Platform

NEW YORK

Hotel Capital Markets

Office, Retail and Multifamily Investment Sales

WASHINGTON DC Multifamily Investment Sales and Debt

NORTH CAROLINA

Debt Capital Markets

NKF Owned

NKF Affiliate

Offices

Offices

FRONT OFFICE HEADCOUNT & PRODUCTIVITY

28

Front Office Headcount1

Front Office Productivity1

(as of period-end)

(US$ thousands)

1,817

$905

$895

1,716

4Q18

4Q19

2018

2019

  • As the integration of recent acquisitions continues and recently hired brokers ramp up production, the Company expects broker productivity to grow over time
  • Newmark's recent hires are expected to average approximately $2 million of annual revenue each, all else equal; therefore, Newmark believes it is on track to achieve its target of $1 million of revenue per producer
  • As was previously disclosed, Newmark will no longer report revenue per broker after 4Q 2019 to improve comparability with peers and because of the higher proportion of recurring, highly visible, and/or non-brokerage revenues

1. Productivity and headcount figures exclude both revenues and corresponding staff in "management services, servicing fees and other" so does not include Valuation & Advisory professionals. Productivity figures are based on average headcount for the corresponding period.

MORE THAN TWO-THIRDS OF SHARES ISSUED SINCE IPO

RELATED TO CONTINUED GROWTH

29

Net Share Issuance of 31.1 MM From 12/31/2017 to 12/31/2019

Repayment of Debt

Incurred for Berkeley

Compensation

Point Acquisition

53%

28%

New Hires

Other Acquisitions12%

7%

  • 72% of new shares issued since IPO have been related to acquisitions or new hires, which are expected to drive Newmark's growth over time
  • New hires typically reach full productivity after their second full year with the Company
  • 28% of net share issuance related to "compensation" was for contract renewals

Repurchases of common Class A shares has been netted pro-rata against issuance for "Compensation", "New Hires", and "Other Acquisitions".

NEWMARK'S FULLY DILUTED SHARE COUNT SUMMARY

AS OF DECEMBER 31, 2019

30

Newmark Group, Inc. Fully Diluted Share Count Summary

Fully-diluted

Ownership (%)

As of December 31, 2019

Shares (millions)

Class A owned by Public

146.3

56%

Limited partnership units owned by employees1

59.6

23%

Class A owned by employees

10.0

4%

Other owned by employees2

0.9

0%

Partnership units owned by Cantor

22.8

9%

Class B owned by Cantor

21.3

8%

Total

260.8

100%

Newmark Group, Inc. Fully Diluted Share Count Summary

Fully-diluted

Ownership (%)

As of December 31, 2019

Shares (millions)

Public

146.3

56%

Employees

70.5

27%

Cantor

44.1

17%

Total

260.8

100%

  1. In conjunction with the spin-off of Newmark, the limited partnership units are owned by employees of both Newmark and BGC. Over time, virtually all of the partners of Newmark are expected to only own units and/or shares of Newmark and virtually all of the partners of BGC are expected to only own units and/or shares of BGC. From 1Q 2018 onwards, partners of Newmark are compensated with Newmark partnership units and partners of BGC are compensated with BGC partnership units
  2. These primarily represent contingent shares and/or units for which all necessary conditions have been satisfied except for the passage of time

APPENDIX B: INDUSTRY OVERVIEW

REAL ESTATE OUTPERFORMS IN THE LONG TERM

32

20-YEAR ANNUALIZED RETURNS

12.00%

10.76%

10.00%

8.85%

8.00%

6.72%

6.00%

5.66%

4.00%

2.16%

2.00%

0.00%

NAREIT Equity REIT Index

NCREIF Property Index

S&P 500 Index

U.S. I-Grade Bonds

Consumer Price Index

  • Commercial real estate returns have exceeded other major asset classes over the past 20 years

Source: Newmark Knight Frank Research and Bloomberg. Returns for "U.S. I-Grade Bonds" are based on the Bloomberg Barclays U.S. Corporate Bond Index

Note: All returns are trailing 20 years annualized, ending December 31, 2019

LOW GLOBAL INTEREST RATES MAKE U.S. CRE RELATIVELY ATTRACTIVE INVESTMENT

6.00%

United States All Property Type Cap Rate Average = 5.55%

5.00%

4.00%

605 Bps

574 Bps

557 Bps

544 Bps

473 Bps

418 Bps

387 Bps

385 Bps

382 Bps

3.00%

Singapore

2.00%

South Korea

Canada

Australia

1.00%

United

Kingdom

0.00%

Germany

Japan

France

Switzerland

-1.00%

-2.00%

33

242 Bps

363 Bps

China

United

States

  • We believe that limited available product domestically, coupled with a favorable cap rate spread between global benchmark government bond yields and U.S. cap rates, will drive future international investment in U.S. CRE assets.
  • Lower than average domestic yields particularly in countries such as Canada and South Korea, whose yields were 1.70% and 1.68%, respectively, contribute to international demand for US CRE product.

Note: All yields are generic 10-year treasury yields (as of 12/31/2019)

Source: NKF Research, Real Capital Analytics, Bloomberg, Federal Reserve Bank of St. Louis

INTERNATIONAL CAPITAL DISTRIBUTION

34

12-MONTH TOTALS; UNITED STATES; ALL PROPERTY TYPES

Although their acquisition activity has slowed since a record high in 2018, Canadian groups continue to lead international capital investment, accounting for nearly $14 billion in 2019. The top group by sales volume was Singapore-based Mapletree, who has become one of the largest industrial landlords in the country through an aggressive portfolio acquisition strategy -- their industrial portfolio is now estimated at 50 million square feet nationally.

INTERNATIONAL CAPITAL DISTRIBUTION

ChinaFrance 1.4% 1.5%

UK Japan 3.0% 4.6%

Spain 4.6%

Hong Kong

4.8%

Canada 28.1%

TOP INVESTORS

OFFICE

Ponte Gadea

$1,386

Allianz$1,078

Jamestown$1,043

Partners Group

$838

Omni Group

$764

TOP INVESTORS

MULTIFAMILY

Tricon$1,400

Brookfield$1,170

Investcorp$956

PSP Investments

$915

Aegon$584

Singapore

5.2%

South Korea

5.4%

Other 6.6%

Switzerland

7.1% Germany

11.9%

Middle East

16.0%

TOP INVESTORS

INDUSTRIAL

Mapletree

$1,736

Investcorp

$891

Granite REIT

$489

BentallGreenOak

$406

Delek Group

$368

TOP INVESTORS

HOSPITALITY

Mubadala Investment

$655

Avestus Capital

$415

Queensgate

$400

Gaw Capital

$353

QIA

$310

Source: NKF Research, Real Capital Analytics

BILLIONS

PROJECTED COMMERCIAL MORTGAGE MATURITIES

35

$500

$2.1

Trillion

$400

$300

$200

$100

$0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Banks

CMBS

Life Insurance

Other (primarily GSE)

  • More than $2.1 trillion in commercial mortgage maturities from 2020 - 2024 should support strong levels of refinancing activity.

Source: Newmark Knight Frank Research, Trepp

VACANCY RATES ARE DOWN AS NEW INVENTORY DELIVERIES ARE

OFFSET BY SUSTAINED DEMAND FOR COMMERCIAL REAL ESTATE

36

U.S. Vacancy Rates by Asset Class

20.0%

16.0%

12.0%

8.0%

4.0%

0.0%

4Q11

4Q12

4Q13

4Q14

4Q15

4Q16

4Q17

4Q18

4Q19

Office

Industrial

Retail

Unweighted Average

  • Vacancy rates remained stable in the retail and office sectors from last quarter, while vacancy in the industrial sector rose slightly. The national office vacancy rate is 12.9%, its lowest level of the cycle, and the national industrial vacancy rate is now 5.2%, up 30 basis points from its cyclical low reached in the fourth quarter of 2018.

Source: CoStar, Newmark Research

APPENDIX C: SUPPORTING MATERIALS

SELECT CONSOLIDATED ADJUSTED EARNINGS FINANCIAL RESULTS

38

Highlights of Consolidated Adjusted Earnings Results

(US$ millions, except per share data)

Revenues

Adjusted Earnings before noncontrolling interests and taxes

Post-tax Adjusted Earnings

Post-tax Adjusted Earnings per share

Adjusted EBITDA

4Q 2019 4Q 2018 Change FY 2019

$632.4 $631.7 0.1% 2,218.1

161.5 148.6 8.6% 511.9

138.6

121.4

14.2%

434.9

0.52 0.45 15.6% 1.62

171.9 162.2 6.0% 565.8

FY 2018 Change

2,047.6 8.3%

459.0 11.5%

389.2 11.7%

1.50 8.0%

524.4

7.9%

Pre-tax Adjusted Earnings margin

25.5%

23.5%

23.1%

Post-tax Adjusted Earnings margin

21.9%

19.2%

19.6%

22.4%

19.0%

  • On February 12, 2020 Newmark's Board of Directors declared a quarterly qualified cash dividend of $0.10 per share payable on March 23, 2020 to Class A and Class B common stockholders of record as of March 5, 2020. The ex-dividend date was March 4, 2020.1
  • During the fourth quarter of 2019, Newmark repurchased 0.6 million shares of Class A common for $8.1 million at an average price of $12.97 per share. Newmark repurchased 4.5 million shares of Class A common stock for $42.1 million at an average price of $9.32 per share in 2019.

1. This dividend is consistent with the Company's previously stated intention of paying out up to 25 percent of its expected full year Adjusted Earnings per share

to common stockholders.

NEWMARK GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP)

39

Three Months Ended December 31,

Year Ended December 31,

Revenues:

2019

2018

2019

2018

Leasing and other commissions

$

251,686

$

276,018

$

854,780

$

817,435

Capital Markets

165,042

150,414

541,255

468,904

Commissions

416,728

426,432

1,396,035

1,286,339

Gains from mortgage banking activities/origination, net

49,316

49,500

198,085

182,264

Management services, servicing fees and other

166,320

155,759

624,012

578,976

Total revenues

632,364

631,691

2,218,132

2,047,579

Expenses:

Compensation and employee benefits

354,862

342,876

1,275,988

1,161,985

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

148,965

99,085

258,836

224,644

and FPUs

Total compensation and employee benefits

503,827

441,961

1,534,824

1,386,629

Operating, administrative and other

85,918

91,369

361,857

331,758

Fees to related parties

3,990

6,323

25,025

26,162

Depreciation and amortization

32,634

29,146

131,144

97,733

Total non-compensation expenses

122,542

126,838

518,026

455,653

Total operating expenses

626,369

568,799

2,052,850

1,842,282

Other income, net:

(14,313)

28,234

80,954

127,293

Other income (loss), net

Total other income (loss), net

(14,313)

28,234

80,954

127,293

Income (loss) from operations

(8,318)

91,126

246,236

332,590

Interest expense, net

(8,141)

(14,705)

(32,088)

(50,205)

Income (loss) before income taxes and noncontrolling interests

(16,459)

76,421

214,148

282,385

Provision (benefit) for income taxes

(132)

36,862

52,436

90,487

Consolidated net income (loss)

(16,327)

39,559

161,712

191,898

Less: Net income (loss) attributable to noncontrolling interests

(5,362)

21,800

44,407

85,166

Net income (loss) available to common stockholders

$

(10,965)

$

17,759

$

117,305

$

106,732

Per share data:

Basic earnings per share

$

(14,193)

$

14,537

$

104,406

$

101,641

Net income (loss) available to common stockholders (1)

Basic earnings per share

$

(0.08)

$

0.09

$

0.59

$

0.65

Basic weighted-average shares of common stock outstanding

176,741

162,919

177,774

157,256

Fully diluted earnings per share

$

(14,193)

$

25,093

$

108,160

$

105,571

Net income (loss) for fully diluted shares (1)

Fully diluted earnings per share

$

(0.08)

$

0.09

$

0.58

$

0.64

Fully diluted weighted-average shares of common stock outstanding

176,741

267,626

185,016

163,810

Dividends declared per share of common stock

$

0.10

$

0.09

$

0.40

$

0.36

Dividends paid per share of common stock

$

0.10

$

0.09

$

0.39

$

0.27

  1. Includes a reduction for dividends on preferred stock or units of $3.2 million and $12.9 million for the three and twelve months ended December 31, 2019, respectively, and $3.2 million and $5.1 million for the three and twelve months ended December 31, 2018, respectively.

NEWMARK GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS) (UNAUDITED) (UNDER GAAP)

40

NEWMARK GROUP, INC. SUMMARIZED CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED) (UNDER GAAP)

41

Year Ended December 31,

Net cash provided by (used in) operating activities

2019

2018

$

986,760

$

(332,367)

Net cash (used in) provided by investing activities

(56,788)

7,742

Net cash (used in) provided by financing activities

(895,506)

338,657

Net increase in cash and cash equivalents and restricted cash

34,466

14,032

Cash and cash equivalents and restricted cash at beginning of period

187,406

173,374

Cash and cash equivalents and restricted cash at end of period

$

221,872

$

187,406

Net cash provided by operating activities excluding activity from loan originations and sales (1) (2)

$

211,186

$

295,862

  1. Includes payments for corporate taxes in the amount of $95.1 million and $1.2 million for the twelve months ended December 31, 2019 and 2018, respectively.
  2. Includes payments for new hires and producers in the amount of $157.2 million and $109.6 million for the twelve months ended December 31, 2019 and 2018, respectively.

The Condensed Consolidated Statement of Cash Flows are presented in summarized form. For complete Condensed Consolidated Statement of Cash Flows, please refer to Newmark's Annual Report on Form 10-K for the twelve months ended December 31, 2019 filed with the Securities and Exchange Commission.

RECONCILIATION OF GAAP NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EARNINGS BEFORE NONCONTROLLING INTERESTS AND TAXES AND GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS(1) 42

(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)

Three Months Ended December 31,

Twelve Months Ended December 31,

2019

2018

2019

2018

GAAP net income (loss) available to common stockholders

$

(10,965)

$

17,759

$

117,305

$

106,732

Provision (benefit) for income taxes (2)

(132)

36,862

52,436

90,487

Net income (loss) attributable to noncontrolling interests (3)

(5,362)

21,800

44,407

85,166

GAAP income (loss) before income taxes and noncontrolling interests

$

(16,459)

$

76,421

$

214,148

$

282,385

Pre-tax adjustments:

Compensation adjustments:

Equity-based compensation and allocations of net income to limited partnership units and FPUs (4) Other compensation adjustments (5)

Total Compensation adjustments

Non-Compensation adjustments:

Amortization of intangibles (6)

MSR amortization (7)

OMSR revenue (7)

Other non-compensation adjustments (8)

Total Non-Compensation adjustments

Other (income) loss net

Other non-cash,non-dilutive, and/or non-economic items (9)

Total Other (income) loss

Total pre-tax adjustments

Adjusted Earnings before noncontrolling interests and taxes

GAAP Net income (loss) available to common stockholders

Allocations of net income to noncontrolling interests (10)

Total pre-tax adjustments (from above)

Income tax adjustment to reflect adjusted earnings taxes (2)

Post-tax Adjusted Earnings to fully diluted shareholders

Per Share Data:

GAAP fully diluted earnings per share

Allocation of net income (loss) to noncontrolling interests

Exchangeable preferred limited partnership units non-cash preferred dividends Total pre-tax adjustments (from above)

Income tax adjustment to reflect adjusted earnings taxes Other

Post-tax adjusted earnings per share (11)

Pre-tax adjusted earnings per share (11)

Fully diluted weighted-average shares of common stock outstanding

$

$

$

$

$

$

148,965

99,083

4,696

-

153,661

99,083

1,526

1,621

22,128

23,862

(30,592)

(28,725)

8,601

-

1,663

(3,242)

22,585

(23,618)

22,585

(23,618)

177,909

72,223

161,450

$

148,644

$

(10,965)

$

17,759

$

(5,740)

21,542

177,909

72,223

(22,558)

9,920

138,646

$

121,444

$

(0.08)

$

0.09

$

0.00

0.01

0.01

0.01

0.67

0.27

(0.09)

0.04

0.01

0.03

0.52

$

0.45

$

0.61

$

0.56

$

264,548

267,626

258,836

224,643

4,696

-

263,532

224,643

6,920

5,629

101,530

78,423

(109,248)

(103,202)

8,601

-

7,803

(19,150)

26,367

(28,844)

26,367

(28,844)

297,702

176,649

511,850

$

459,034

117,305

$

106,732

43,240

83,446

297,702

176,649

(23,320)

22,387

434,927

$

389,214

0.58

$

0.64

0.00

0.01

0.05

0.02

1.11

0.68

(0.09)

0.08

(0.03)

0.07

1.62

$

1.50

1.90

$

1.77

268,860

258,997

See the following page for notes to the above table.

RECONCILIATION OF GAAP NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EARNINGS BEFORE NONCONTROLLING INTERESTS AND TAXES AND GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS(1) 43

(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (CONTINUED)

  1. "Non-recurring(gains) losses" were previously a separate line item, and now been reclassified to "Other non-cash,non-dilutive, and non-economic items". For the three months ended December 31, 2019, these expenses included contingent consideration and other expenses of $0.3 million. For the twelve months ended December 31, 2019 and 2018, these expenses included contingent consideration and other expenses of $2.0 million and $1.1 million, respectively.
  2. Newmark's GAAP provision (benefit) for income taxes is calculated based on an annualized methodology. Newmark includes additional tax-deductible items when calculating the provision (benefit) for taxes with respect to Adjusted Earnings using an annualized methodology. These include tax-deductions related to equity-based compensation, and certain net-operating loss carryforwards. The adjustment in the tax provision to reflect Adjusted Earnings is shown below (in millions):

Three Months Ended December 31,

Year Ended December 31,

GAAP provision for income taxes

2019

2018

2019

2018

$

(0.1)

$

36.9

$

52.4

$

90.5

Income tax adjustment to reflect Adjusted Earnings

22.6

(9.9)

23.3

(22.4)

Provision for income taxes for Adjusted Earnings

$

22.5

$

27.0

$

75.7

$

68.1

  1. Primarily represents Cantor and/or BGC's pro-rata portion of Newmark's net income and the noncontrolling portion of Newmark's net income in subsidiaries which are not wholly owned.
  2. The components of equity-based compensation and allocations of net income to limited partnership units and FPUs(A) are as follows (in millions):

Three Months Ended December 31,

Year Ended December 31,

Issuance of common stock and exchangeability expenses

2019

2018

2019

2018

$

142.0

$

85.0

$

181.7

$

179.3

Allocations of net income

-

13.9

50.4

51.5

Equity-based amortization

7.0

0.2

26.7

(6.2)

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

$

149.0

$

99.1

$

258.8

$

224.6

(A)Reclassifications have been made to previously reported amounts to conform the new presentation.

  1. Includes compensation expenses related to severance as a result of the restructuring of $4.7 million for the three and twelve months ended December 31, 2019.
  2. Includes Non-cash GAAP charges related to the amortization of intangibles with respect to acquisitions.
  3. Adjusted Earnings calculations exclude non-cash GAAP gains attributable to originated mortgage servicing rights (which Newmark refers to as "OMSRs") and non-cash GAAP amortization of mortgage servicing rights (which Newmark refers to as "MSRs"). Under GAAP, Newmark recognizes OMSRs gains equal to the fair value of servicing rights retained on mortgage loans originated and sold. Subsequent to the initial recognition at fair value, MSRs are carried at the lower of amortized cost or fair value and amortized in proportion to the net servicing revenue expected to be earned. However, it is expected that any cash received with respect to these servicing rights, net of associated expenses, will increase Adjusted Earnings in future periods.
  4. Includes non-compensation expenses related to asset impairment as a result of the restructuring of $5.0 million and a legal settlement of $3.0 million for the three and twelve months ended December 31, 2019.
  5. The components of other non-cash,non-dilutive, and/or non-economic items are as follows (in millions):

Three Months Ended December 31,

Year Ended December 31,

Unrealized mark-to-market (gains)/losses for the Nasdaq forward and other Nasdaq

2019

2018

2019

2018

adjustments, net

$

14.0

$

(12.7)

$

36.3

$

(19.0)

Mark-to-market (gains)/losses on non-marketable investments, net

Contingent consideration and other expenses

8.3

(17.9)

(12.1)

(17.90)

0.3

6.9

2.2

8.1

$

22.6

$

(23.7)

$

26.4

$

(28.8)

  1. Excludes the noncontrolling portion of Newmark's net income in subsidiaries which are not wholly-owned.
  2. For the three and twelve months ended December 31, 2019, earnings per share calculations under GAAP included reductions for EPUs of $3.2 million and $12.9 million, respectively. For the three and twelve months ended December 31, 2018, earnings per share calculations under GAAP included reductions for EPUs of $3.2 million and $5.1 million, respectively. For Adjusted Earnings these non-cash preferred dividends are excluded as Newmark

expects to redeem these EPUs with Nasdaq shares.

RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED

EBITDA1 (IN THOUSANDS) (UNAUDITED)

44

Three Months Ended December 31,

Twelve Months Ended December 31,

2019

2018

2019

2018

GAAP Net income (loss) available to common stockholders

$

(10,965)

$

17,759

$

117,305

$

106,732

Add back:

Net income (loss) attributable to noncontrolling interests (2)

(5,362)

21,800

44,407

85,166

Provision (benefit) for income taxes

(132)

36,862

52,436

90,487

OMSR revenue (3)

(30,592)

(28,725)

(109,248)

(103,202)

MSR amortization (4)

22,128

23,862

101,530

78,424

Other depreciation and amortization (5)

10,507

5,286

29,614

19,311

Equity-based compensation and allocations of net income to limited partnership

units and FPUs (6)

148,965

99,083

258,836

224,641

Other adjustments (7)

4,696

-

4,696

-

Other non-cash,non-dilutive,non-economic items (1) (8)

22,585

(30,572)

26,367

(35,968)

Interest expense

10,070

16,808

39,902

58,807

Adjusted EBITDA

$

171,900

$

162,163

$

565,845

$

524,398

  1. "Non-Recurring(Gains) Losses" were previously a separate line item, and now been reclassified to "Other non-cash,non-dilutive, and non-economic items". For the three months ended December 31, 2019, these expenses included contingent consideration and other expenses of $0.3 million. For the twelve months ended December 31, 2019 and 2018, these expenses included contingent consideration and other expenses of $2.0 million and $1.1 million, respectively.
  2. Primarily represents Cantor and/or BGC's pro-rata portion of Newmark's net income and the noncontrolling portion of Newmark's net income in subsidiaries which are not wholly owned.
  3. Non-cashgains attributable to originated mortgage servicing rights.
  4. Non-cashamortization of mortgage servicing rights in proportion to the net servicing revenue expected to be earned.
  5. Includes fixed asset depreciation of $9.0 million and $3.7 million for the three months ended December 31, 2019 and 2018, respectively, and $22.7 million and $13.7 million for the twelve months ended December 31, 2019 and 2018, respectively. Also includes intangible asset amortization and impairments related to acquisitions of $1.5 million and $1.6 million for the three months ended December 31, 2019 and 2018, respectively, and $6.9 million and $5.6 million for the twelve months ended December 31, 2019 and 2018, respectively. Included in fixed asset depreciation is an asset impairment as a result of the restructuring of $5.0 million for the three and twelve months ended December 31, 2019.
  6. Please refer to Footnote 4 under "Reconciliation of GAAP Net Income Available to Common Stockholders to Adjusted Earnings before Noncontrolling Interest and Taxes and GAAP Fully Diluted EPS to Post-tax Adjusted EPS" for additional information about the components of "Equity-based compensation and allocations of net income to limited partnership units and FPUs".
  7. Represents $4.7 million in compensation expenses related to severance as a result of the restructuring plan for the three and twelve months ended December 31, 2019.
  8. Please refer to Footnote 9 under "Reconciliation of GAAP Net Income (Loss) Available to Common Stockholders to Adjusted Earnings Before Noncontrolling Interest and Taxes and GAAP Fully Diluted EPS to Post-tax Adjusted EPS" for additional information about the components of "Other non-cash,non-dilutive, and non-economic items".

FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT FOR GAAP AND

ADJUSTED EARNINGS (IN THOUSANDS) (UNAUDITED)

45

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2019

2018

2019

2018

Common stock outstanding

176,741

162,919

177,774

157,256

Limited partnership units

-

74,672

-

-

Cantor units

-

23,483

-

-

Founding partner units

-

5,804

5,583

5,717

RSUs

-

126

1,290

187

Other

-

622

369

650

Fully diluted weighted-average share count for GAAP

176,741

267,626

185,016

163,810

Adjusted Earnings Adjustments:

Limited partnership units

57,871

-

60,772

71,566

Cantor units

22,748

-

23,072

23,621

Founding partner units

5,354

-

-

-

RSUs

1,555

-

-

-

Other

279

-

-

-

Fully diluted weighted-average share count for Adjusted Earnings

264,548

267,626

268,860

258,997

RECONCILIATION OF OPERATING CASH FLOW (EXCLUDING ACTIVITY

FROM LOAN ORIGINATIONS AND SALES) TO ADJUSTED EBITDA

46

Twelve M onths Ended December 31,

2019

2018

ADJUSTED EBITDA

$

566

$

524

Nasdaq

(99)

(87)

Interest Expense

(40)

(59)

Employee loans for new hires and producers

(157)

(109)

Working Capital

36

28

Corporate Tax payments

(95)

(1)

Net cash provided by (used in) operations excluding

$

211

$

296

activity fromloan originations and sales

NON-GAAP FINANCIAL MEASURES

47

Non-GAAP Financial Measures

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

Adjusted Earnings Defined

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

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

Calculations of Compensation Adjustments for Adjusted Earnings and Adjusted EBITDA

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

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

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

NON-GAAP FINANCIAL MEASURES (CONTINUED)

48

  • Charges with respect to preferred units. Any preferred units would not be included in the Company's fully diluted share count because they cannot be made exchangeable into shares of common stock and are entitled only to a fixed distribution. Preferred units are granted in connection with the grant of certain limited partnership units that may be granted exchangeability at ratios designed to cover any withholding taxes expected to be paid by the unit holder upon exchange. This is an alternative to the common practice among public companies of issuing the gross amount of shares to employees, subject to cashless withholding of shares, to pay applicable withholding taxes.
  • GAAP equity-based compensation charges with respect to the grant of an offsetting amount of common stock or partnership units with capital accounts in connection with the redemption of non-exchangeable units, including PSUs and LPUs.
  • Charges related to amortization of RSUs and limited partnership units.
  • Charges related to grants of equity awards, including common stock or partnership units with capital accounts
  • Allocations of net income to limited partnership units and FPUs. Such allocations represent the pro-rata portion of post-tax GAAP earnings available to such unit holders.

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

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

All share equivalents that are part of the Company's equity-based compensation program, including REUs, PSUs, LPUs, certain HDUs, and other units that may be made exchangeable into common stock, as well as RSUs (which are recorded using the treasury stock method), are included in the fully diluted share count when issued or at the beginning of the subsequent quarter after the date of grant. Generally, limited partnership units other than preferred units are expected to be paid a pro-rata distribution based on Newmark's calculation of Adjusted Earnings per fully diluted share.

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

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

NON-GAAP FINANCIAL MEASURES (CONTINUED)

49

Calculation of Non-Compensation Adjustments for Adjusted Earnings and Adjusted EBITDA

  • Newmark's calculation of pre-tax Adjusted Earnings excludes non-cash GAAP charges related to the following:
  • Amortization of intangibles with respect to acquisitions.
  • Gains attributable to originated mortgage servicing rights (which Newmark refers to as "OMSRs").
  • Amortization of mortgage servicing rights (which Newmark refers to as "MSRs"). Under GAAP, the Company recognizes OMSRs gains equal to the fair value of servicing rights retained on mortgage loans originated and sold. Subsequent to the initial recognition at fair value, MSRs are carried at the lower of amortized cost or fair value and amortized in proportion to the net servicing revenue expected to be earned. However, it is expected that any cash received with respect to these servicing rights, net of associated expenses, will increase Adjusted Earnings and Adjusted EBITDA in future periods.
  • Various other GAAP items that management views as not reflective of the Company's underlying performance for the given period, including non-compensation-related charges incurred as part of broad restructuring plans. Such GAAP items may include charges for exiting leases and/or other long-term contracts as part of cost-saving initiatives, as well as non-cash impairment charges related to assets, goodwill and/or intangibles created from acquisitions.

Calculation of Other (income) losses for Adjusted Earnings

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

  • Unusual, one-time,non-ordinary or non-recurring gains or losses;
  • Non-cashGAAP asset impairment charges;
  • The impact of any unrealized non-cashmark-to-market gains or losses on "Other income (loss)" related to the variable share forward agreements with respect to Newmark's expected receipt of the Nasdaq payments in 2020, 2021, and 2022 and the recently settled 2019 Nasdaq payment (the "Nasdaq Forwards"); and/or
  • Mark-to-marketadjustments for non-marketable investments;
  • Certain other non-cash,non-dilutive, and/or non-economic items.

NON-GAAP FINANCIAL MEASURES (CONTINUED)

50

Methodology for Calculating Adjusted Earnings Taxes

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

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

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

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

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

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

NON-GAAP FINANCIAL MEASURES (CONTINUED)

51

Calculations of Pre- and Post-Tax Adjusted Earnings per Share

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

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

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

The declaration, payment, timing and amount of any future dividends payable by the Company will be at the discretion of its Board of Directors using the fully diluted share count. In addition, the non-cash preferred dividends are excluded from Adjusted Earnings per share as Newmark expects to redeem the related exchangeable preferred limited partnership units ("EPUs") with Nasdaq shares. For more information on any share count adjustments, see the table titled "Fully Diluted Weighted-Average Share Count for GAAP and Adjusted Earnings".

Management Rationale for Using Adjusted Earnings

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

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

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

NON-GAAP FINANCIAL MEASURES (CONTINUED)

52

Adjusted EBITDA Defined

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

  • Net income (loss) attributable to noncontrolling interest;
  • Provision (benefit) for income taxes;
  • OMSR revenue;MSR amortization;
  • Other depreciation and amortization;
  • Equity-basedcompensation and allocations of net income to limited partnership units and FPUs;
  • Various other GAAP items that management views as not reflective of the Company's underlying performance for the given period, including non- compensation-related charges incurred as part of broad restructuring plans. Such GAAP items may include charges for exiting leases and/or other long-term contracts as part of cost-saving initiatives, as well as non-cash impairment charges related to assets, goodwill and/or intangibles created from acquisitions;
  • Other non-cash,non-dilutive, and/or non-economic items, which may, in certain periods, include the impact of any unrealized non-cashmark-to- market gains or losses on "other income (loss)" related to the variable share forward agreements with respect to Newmark's expected receipt of the Nasdaq payments in 2020, 2021, and 2022 and the recently settled 2019 Nasdaq payment (the "Nasdaq Forwards"), as well as mark-to-market adjustments for non-marketable investments; and
  • Interest expense.

Newmark's calculation of Adjusted EBITDA excludes certain items discussed above because they are either non-cash in nature or because the anticipated benefits from the expenditures are not expected to be fully realized until future periods, and because the Company views excluding these items as a better reflection of the underlying performance Newmark's ongoing operations. The Company's management believes that its Adjusted EBITDA measure is useful in evaluating Newmark's operating performance, because the calculation of this measure generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and acquisitions, which would include impairment charges of goodwill and intangibles created from acquisitions. Such items may vary for different companies for reasons unrelated to overall operating performance. As a result, the Company's management uses this measure to evaluate operating performance and for other discretionary purposes. Newmark believes that Adjusted EBITDA is useful to investors to assist them in getting a more complete picture of the Company's financial results and operations.

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

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

NON-GAAP FINANCIAL MEASURES (CONTINUED)

53

Timing of Outlook for Certain GAAP and Non-GAAP Items

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

  • Certain equity-based compensation charges that may be determined at the discretion of management throughout and up to the period- end;
  • Unusual, one-time,non-ordinary, or non-recurring items;
  • The impact of gains or losses on certain marketable securities, as well as any gains or losses related to associated mark-to- market movements and/or hedging including with respect to the Nasdaq Forwards. These items are calculated using period-end closing prices;
  • Non-cashasset impairment charges, which are calculated and analyzed based on the period-end values of the underlying assets. These amounts may not be known until after period-end;
  • Acquisitions, dispositions and/or resolutions of litigation, which are fluid and unpredictable in nature.

Liquidity Defined

Newmark may also use a non-GAAP measure called "liquidity". The Company considers liquidity to be comprised of the sum of cash and cash equivalents, marketable securities, and reverse repurchase agreements (if any), less securities lent out in securities loaned transactions and repurchase agreements. The Company considers liquidity to be an important metric for determining the amount of cash that is available or that could be readily available to the Company on short notice.

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

MEDIA CONTACT:

Karen Laureano-Rikardsen +1 212-829-4975

INVESTOR CONTACT:

Find out more about

Jason Harbes, CFA or Jason McGruder

Newmark at the following sites:

+1 212-829-7124

http://www.ngkf.com/

https://twitter.com/newmarkkf

https://www.linkedin.com/company/newmark-knight-frank/http://ir.ngkf.com/investors/investorshome/default.aspx

For additional insights from NKF Research, please go to the following websites: http://www.ngkf.com/home/research/about-our-research.aspxhttp://www.ngkf.com/home/services/capital-markets.aspx

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Newmark Group Inc. published this content on 16 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 March 2020 22:49:06 UTC