Annual report pursuant to Section 13 and 15(d)

Revenue from Contracts with Customers (Tables)

Revenue from Contracts with Customers (Tables)

12 Months Ended

Dec. 31, 2018

Revenue from Contract with Customer [Abstract]

In the following table, revenue is disaggregated by service line and segment:



For the Twelve Months Ended December 31, 2018	Independent Advisory and Brokerage Services		Ladenburg			Insurance Brokerage		Corporate			Total
Commissions	$	540,523	$	11,468		$	144,340	$	—		$	696,331
Advisory fees	467,044		7,170			—		209			474,423
Investment banking	947		56,163			—		(854		)	56,256
Principal transactions	22		(524		)	—		174			(328		)
Interest and dividends	2,566		839			—		1,566			4,971
Service fees	116,047		2,495			—		888			119,430
Other income	33,894		483			2,787		2,889			40,053
Total revenues	$	1,161,043	$	78,094		$	147,127	$	4,872		$	1,391,136

Contract Balances

The following table provides information about contract assets and contract liabilities from contracts with customers. Estimated trailing commissions are included in other receivables, net while estimated expenses on trailing commissions are included in commissions and fees payable on the consolidated statements of financial condition:



	As of December 31, 2018		As of January 1, 2018 ( Adoption Date)
Contract assets - Insurance trailing commissions	$	64,300	$	58,786
Contract liabilities - Insurance trailing commissions	31,854		29,395

Impact on Financial Statements



Consolidated Statement of Financial Condition

	As Reported			Adjustments									Adjusted
	December 31, 2017			Investment Banking			Insurance Renewals			Costs to obtain or fulfill a contract			January 1, 2018
ASSETS	(Audited)
Cash and cash equivalents	$	172,103		$	—		$	—		$	—		$	172,103
Securities owned, at fair value	3,881			—			—			—			3,881
Receivables from clearing brokers	48,543			—			—			—			48,543
Receivables from other broker-dealers	2,822			—			—			—			2,822
Notes receivable from financial advisors, net	47,369			—			—			(40,566		)	6,803
Other receivables, net	60,707			(137		)	58,786			—			119,356
Fixed assets, net	23,621			—			—			—			23,621
Restricted assets	760			—			—			—			760
Intangible assets, net	103,611			—			(23,645		)	—			79,966
Goodwill	124,210			—			—			—			124,210
Contract acquisition costs, net	—			—			—			61,340			61,340
Cash surrender value of life insurance	12,711			—			—			—			12,711
Other assets	31,687			25			—			—			31,712
Total assets	$	632,025		$	(112	)	$	35,141		$	20,774		$	687,828
LIABILITIES AND SHAREHOLDERS' EQUITY
Securities sold, but not yet purchased, at fair value	$	231		$	—		$	—		$	—		$	231
Accrued compensation	33,343			(110		)	—			—			33,233
Commissions and fees payable	67,221			—			29,395			—			96,616
Accounts payable and accrued liabilities	40,478			(104		)	—			(1,133		)	39,241
Deferred rent	2,151			—			—			—			2,151
Deferred income taxes	2,968			28			1,462			1,480			5,938
Deferred compensation liability	18,161			—			—			—			18,161
Accrued interest	232			—			—			—			232
Notes payable	96,849			—			—			—			96,849
Total liabilities	$	261,634		$	(186	)	$	30,857		$	347		$	292,652
Commitments and contingencies
Shareholders' equity:
Preferred stock	2			—			—			—			2
Common stock	20			—			—			—			20
Additional paid-in capital	520,135			—			—			—			520,135
Accumulated deficit	(149,778		)	74			4,284			20,416			(125,004		)
Total shareholders' equity of the Company	370,379			74			4,284			20,416			395,153
Noncontrolling interest	12			—			—			11			23
Total shareholders' equity	370,391			74			4,284			20,427			395,176
Total liabilities and shareholders' equity	$	632,025		$	(112	)	$	35,141		$	20,774		$	687,828



Consolidated Statement of Financial Condition
	As of December 31, 2018
	As Reported			Balances without the adoption of ASC 606			Effects of Change Higher/(Lower)
ASSETS

Cash and cash equivalents	$	182,693		$	182,693		$	—
Securities owned, at fair value	10,923			10,923			—
Receivables from clearing brokers	24,068			24,068			—
Receivables from other broker-dealers	7,078			7,078			—
Notes receivable from financial advisors, net	5,809			57,417			(51,608		)
Other receivables, net	133,242			69,209			64,033
Fixed assets, net	29,994			29,994			—
Restricted assets	6,588			6,588			—
Intangible assets, net	73,064			91,454			(18,390		)
Goodwill	126,079			126,079			—
Contract acquisition costs, net	80,726			—			80,726
Cash surrender value of life insurance	11,406			11,406			—
Income taxes receivable	2,156			—			2,156
Other assets	47,078			46,578			500
Total assets	$	740,904		$	663,487		$	77,417

LIABILITIES AND SHAREHOLDERS' EQUITY

Securities sold, but not yet purchased, at market value	$	2,575		$	2,575		$	—
Accrued compensation	39,192			39,257			(65		)
Commissions and fees payable	105,306			73,452			31,854
Accounts payable and accrued liabilities	48,813			41,026			7,787
Deferred rent	2,956			2,956			—
Deferred income taxes	14,068			9,742			4,326
Deferred compensation liability	20,622			20,622			—
Accrued interest	123			123			—
Notes payable	254,072			254,072			—
Total liabilities	$	487,727		$	443,825		$	43,902

Commitments and contingencies
Shareholders' equity:
Preferred stock	2			2			—
Common stock	14			14			—
Additional paid-in capital	344,356			344,356			—
Accumulated deficit	(91,246		)	(124,750		)	33,504

Total shareholders' equity of the Company	253,126			219,622			33,504

Noncontrolling interest	51			40			11

Total shareholders' equity	253,177			219,662			33,515

Total liabilities and shareholders' equity	$	740,904		$	663,487		$	77,417



Consolidated Statement of Operations

	Twelve Months Ended December 31, 2018
	As Reported			Amounts without the adoption of ASC 606			Effects of Change Higher/(Lower)
Revenues:
Commissions	$	696,331		$	609,400		$	86,931
Advisory fees	474,423			695,094			(220,671		)
Investment banking	56,256			51,335			4,921
Principal transactions	(328		)	(346		)	18
Interest and dividends	4,971			4,964			7
Service fees	119,430			119,430			—
Other income	40,053			40,147			(94		)
Total revenues	1,391,136			1,520,024			(128,888		)
Expenses:
Commissions and fees	976,596			1,113,389			(136,793		)
Compensation and benefits	194,045			195,433			(1,388		)
Non-cash compensation	5,882			5,882			—
Brokerage, communication and clearance fees	16,088			15,525			563
Rent and occupancy, net of sublease revenue	9,977			9,977			—
Professional services	21,927			20,022			1,905
Interest	10,796			10,756			40
Depreciation and amortization	24,039			29,294			(5,255		)
Acquisition-related expenses	1,010			1,010			—
Amortization of retention and forgivable loans	417			13,890			(13,473		)
Amortization of contract acquisition costs	9,671			—			9,671
Other	73,285			73,805			(520		)
Total expenses	1,343,733			1,488,983			(145,250		)
Income before item shown below	47,403			31,041			16,362
Change in fair value of contingent consideration	(238		)	(238		)	—
Income before income taxes	47,165			30,803			16,362
Income tax expense	13,379			5,745			7,634
Net income	33,786			25,058			8,728
Net income attributable to noncontrolling interest	28			28			—
Net income attributable to the Company	$	33,758		$	25,030		$	8,728
Dividends declared on preferred stock	(34,031		)	(34,031		)	—
Net loss available to common shareholders	$	(273	)	$	(9,001	)	$	8,728
Net loss per share available to common shareholders (basic)	$	(0.00	)	$	(0.05	)	$	0.05
Net loss per share available to common shareholders (diluted)	$	(0.00	)	$	(0.05	)	$	0.05
Weighted average common shares used in computation of per share data:
Basic	194,562,916			194,562,916			—
Diluted	194,562,916			194,562,916			—