Fourth Quarter 2020 Key Financial Results

• Earnings per share ("EPS") was $1.38, and Net Income was $112 million.
  °  Gross Profit** was $534 million.
  °  Core G&A** was $252 million.
  °  EBITDA** was $217 million and EBITDA** as a percentage of Gross Profit** was 41%.
• EPS Prior to Amortization of Intangible Assets** was $1.53.
  

Fourth Quarter 2020 Key Business Results

• Total Advisory and Brokerage Assets increased 18% year-over-year to $903 billion.
  °  Advisory assets increased by 26% year-over-year to $461 billion.
  °  Advisory assets as a percentage of total assets increased to 51.1%, up from 47.8% a year ago.
• Total organic net new assets⁽¹⁾ were an inflow of $17.8 billion, translating to an 8.8% annualized growth rate.
  °  Total organic net new asset annualized growth rate was 7.4% in October, 7.3% in November and 10.8% in December.
  °  Organic net new advisory assets were an inflow of $15.9 billion, translating to a 15.6% annualized growth rate.
  °  Organic net new brokerage assets were an inflow of $1.9 billion, translating to a 1.9% annualized growth rate.
• Acquired net new assets were $4.0 billion, of which $2.5 billion was advisory and $1.5 billion was brokerage.
  °  Acquired net new assets were from Lucia Securities and E.K. Riley as we completed the onboarding of these two acquisitions during the quarter.
• Recruited Assets⁽²⁾ were $10.8 billion, contributing to a trailing twelve-month total of $40.9 billion, up 17% year-over-year.
  °  Advisor count⁽³⁾ was 17,287, up 119 from Q3 2020 and 823 year-over-year.
• Total client cash balances were $48.9 billion, up $2.3 billion, or 5% sequentially.
  °  Client cash balances as a percentage of total assets were 5.4%.
  

Fourth Quarter 2020 Key Capital Results

• Dividends were $20 million.
• Cash available for corporate use was $280 million.
• Credit Agreement Net Leverage Ratio⁽⁴⁾ was 2.16x.
  

Full Year 2020 Key Performance Indicators

• EPS was $5.86, and Net Income was $473 million.
  °  Gross Profit** was $2,103 million.
  °  Core G&A** was $925 million.
  °  EBITDA** was $909 million and EBITDA** as a percentage of Gross Profit** was 43%.
• EPS Prior to Amortization of Intangible Assets** was $6.46.
• Total organic net new assets were $56.2 billion, translating to a 7.4% growth rate, up from 5.3% in 2019.
  °  Full-year production retention rate was 97.7%, up from 96.5% a year ago.
• Dividends were $79 million.

Key Updates

• 2020 Core G&A** was $925 million, which translates to a 6.5% growth rate year-over-year and within our outlook range of $915 to $940 million.
• Established 2021 Core G&A** outlook range of ~5.5% to 8% prior to expenses from Waddell & Reed, or $975 to $1,000 million.
• Signed an agreement to acquire Waddell & Reed’s wealth management business for $300 million, a firm with over 900 advisors and ~$70 billion of client assets as of December 31, 2020.
  °  To date, Waddell & Reed advisors serving ~80% of client assets have already committed to join LPL following the close of the transaction, and we are encouraged by our ongoing progress.

SAN DIEGO, Feb. 04, 2021 (GLOBE NEWSWIRE) -- LPL Financial Holdings Inc. (Nasdaq: LPLA) (the “Company”) today announced results for its fourth quarter ended December 31, 2020, reporting net income of $112 million, or $1.38 per share. This compares with $127 million, or $1.53 per share, in the fourth quarter of 2019 and $104 million, or $1.29 per share, in the prior quarter.

"Throughout 2020, we remained focused on our mission of taking care of our advisors, so they can take care of their clients,” said Dan Arnold, President and CEO. "This focus led us to enhance our capabilities, service, and technology, which increased the appeal of our model and contributed to new highs for total assets and organic growth. As we look ahead, we aim to continue investing in our model and increasing our market share within the advisor-centered marketplace."

“Looking at 2020, we are proud of what we accomplished within our framework to drive shareholder value,” said Matt Audette, CFO. “We continued to invest through a volatile environment while staying disciplined on expenses, closed on three M&A transactions, reached an agreement to acquire Waddell & Reed's wealth management business, and delivered the highest organic net new assets in our history. Going forward, our business momentum and financial strength position us well to continue creating long-term shareholder value.”

Dividend Declaration

The Company's Board of Directors declared a $0.25 per share dividend to be paid on March 30, 2021 to all stockholders of record as of March 16, 2021.

Conference Call and Additional Information

The Company will hold a conference call to discuss its results at 5:00 p.m. EST on Thursday, February 4. To listen, call 877-677-9122 (domestic) or 708-290-1401 (international); passcode 9671648, or visit investor.lpl.com (webcast). Replays will be available by phone and on investor.lpl.com beginning two hours after the call and until February 11 and February 25, respectively. For telephonic replay, call 855-859-2056 (domestic) or 404-537-3406 (international); passcode 9671648.

About LPL Financial

LPL Financial is a leader in the retail financial advice market, the nation’s largest independent broker-dealer⁺ and a leading custodian (or provider of custodial services) to RIAs. We serve independent financial advisors and financial institutions, providing them with the technology, research, clearing and compliance services, and practice management programs they need to create and grow their practices. LPL enables them to provide objective guidance to millions of American families seeking wealth management, retirement planning, financial planning and asset management solutions. LPL.com

⁺Based on total revenues, Financial Planning magazine June 1996-2020.

Securities and advisory services offered through LPL Financial LLC, a registered investment advisor. Member FINRA/SIPC. Throughout this communication, the terms “financial advisors” and “advisors” are used to refer to registered representatives and/or investment advisor representatives affiliated with LPL Financial LLC. We routinely disclose information that may be important to shareholders in the “Investor Relations” or “Press Releases” section of our website.

**Non-GAAP Financial Measures

Management believes that presenting certain non-GAAP financial measures by excluding or including certain items can be helpful to investors and analysts who may wish to use this information to analyze the Company’s current performance, prospects and valuation. Management uses this non-GAAP information internally to evaluate operating performance and in formulating the budget for future periods. Management believes that the non-GAAP financial measures and metrics discussed below are appropriate for evaluating the performance of the Company.

EPS Prior to Amortization of Intangible Assets is defined as GAAP EPS plus the per share impact of amortization of intangible assets. The per share impact is calculated as amortization of intangible assets expense, net of applicable tax benefit, divided by the number of shares outstanding for the applicable period. The Company presents EPS Prior to Amortization of Intangible Assets because management believes that the metric can provide investors with useful insight into the Company’s core operating performance by excluding non-cash items that management does not believe impact the Company’s ongoing operations. EPS Prior to Amortization of Intangible Assets is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to GAAP EPS or any other performance measure derived in accordance with GAAP. For a reconciliation of EPS Prior to Amortization of Intangible Assets to GAAP EPS, please see footnote 38 on page 19 of this release.

Gross Profit is calculated as total net revenues, which were $1,581 million for the three months ended December 31, 2020, less advisory and commission expenses and brokerage, clearing and exchange fees, which were $1,030 million and $18 million, respectively for the three months ended December 31, 2020. All other expense categories, including depreciation and amortization of fixed assets and amortization of intangible assets, are considered general and administrative in nature. Because the Company’s Gross Profit amounts do not include any depreciation and amortization expense, the Company considers Gross Profit to be a non-GAAP financial measure that may not be comparable to similar measures used by others in its industry. Management believes that Gross Profit can provide investors with useful insight into the Company’s core operating performance before indirect costs that are general and administrative in nature. For a calculation of Gross Profit, please see footnote 6 on page 16 of this release.

Core G&A consists of total operating expenses, which were $1,410 million for the three months ended December 31, 2020, excluding the following expenses: advisory and commission, regulatory charges, promotional, employee share-based compensation, depreciation and amortization, amortization of intangible assets, and brokerage, clearing and exchange. Management presents Core G&A because it believes Core G&A reflects the corporate operating expense categories over which management can generally exercise a measure of control, compared with expense items over which management either cannot exercise control, such as advisory and commission expenses, or which management views as promotional expense necessary to support advisor growth and retention, including conferences and transition assistance. Core G&A is not a measure of the Company’s total operating expenses as calculated in accordance with GAAP. For a reconciliation of Core G&A to the Company’s total operating expenses, please see footnote 10 on page 17 of this release. The Company does not provide an outlook for its total operating expenses because it contains expense components, such as advisory and commission expenses, that are market-driven and over which the Company cannot exercise control. Accordingly a reconciliation of the Company’s outlook for Core G&A to an outlook for total operating expenses cannot be made available without unreasonable effort.

EBITDA is defined as net income plus interest and other expense, income tax expense, depreciation and amortization, and amortization of intangible assets. The Company presents EBITDA because management believes that it can be a useful financial metric in understanding the Company’s earnings from operations. EBITDA is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of profitability or liquidity. In addition, the Company’s EBITDA can differ significantly from EBITDA calculated by other companies, depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate, and capital investments. For a reconciliation of EBITDA to net income, please see footnote 27 on page 18 of this release.

Credit Agreement EBITDA is defined in, and calculated by management in accordance with, the Company's credit agreement (“Credit Agreement”) as “Consolidated EBITDA,” which is Consolidated Net Income (as defined in the Credit Agreement) plus interest expense, tax expense, depreciation and amortization, and amortization of intangible assets, and is further adjusted to exclude certain non-cash charges and other adjustments, including unusual or non-recurring charges and gains, and to include future expected cost savings, operating expense reductions or other synergies from certain transactions. The Company presents Credit Agreement EBITDA because management believes that it can be a useful financial metric in understanding the Company’s debt capacity and covenant compliance under its Credit Agreement. Credit Agreement EBITDA is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of profitability or liquidity. In addition, the Company’s calculation of Credit Agreement EBITDA can differ significantly from adjusted EBITDA calculated by other companies, depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate, capital investments, and types of adjustments made by such companies. For a reconciliation of Credit Agreement EBITDA to net income, please see footnote 27 on page 18 of this release.

Forward-Looking Statements

Statements in this press release regarding the Company's future financial and operating results, growth, priorities and business strategies, including forecasts and statements relating to future expenses (including 2020 Core G&A** outlook), future capabilities, future advisor service experience, future investments and capital deployment, long-term shareholder value and the planned acquisition of Waddell & Reed's wealth management business, as well as any other statements that are not related to present facts or current conditions or that are not purely historical, constitute forward-looking statements. These forward-looking statements are based on the Company's historical performance and its plans, estimates and expectations as of February 4, 2021. Forward-looking statements are not guarantees that the future results, plans, intentions or expectations expressed or implied will be achieved. Matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, legislative, regulatory, competitive and other factors, which may cause actual financial or operating results, levels of activity or the timing of events to be materially different than those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include: changes in general economic and financial market conditions, including retail investor sentiment; changes in interest rates and fees payable by banks participating in the Company's client cash programs; the Company's strategy and success in managing client cash program fees; changes in the growth and profitability of the Company's fee-based business; fluctuations in the levels of advisory and brokerage assets, including net new assets, and the related impact on revenue; the effects of competition in the financial services industry and the success of the Company in attracting and retaining financial advisors and institutions; whether the retail investors served by newly-recruited advisors choose to move their respective assets to new accounts at the Company; the effect of current, pending and future legislation, regulation and regulatory actions, including disciplinary actions imposed by federal and state regulators and self-regulatory organizations and the implementation of Regulation BI (Best Interest); the costs of settling and remediating issues related to regulatory matters or legal proceedings, including actual costs of reimbursing customers for losses in excess of our reserves; changes made to the Company’s services and pricing, and the effect that such changes may have on the Company’s gross profit streams and costs; the execution of the Company's plans and its success in realizing the synergies, expense savings, service improvements and efficiencies expected to result from its initiatives, acquisitions and programs; the effects of the COVID-19 pandemic; the successful onboarding of advisors and client assets in connection with the acquisition of Waddell & Reed's wealth management business; and the other factors set forth in Part I, “Item 1A. Risk Factors” in the Company's 2019 Annual Report on Form 10-K, as may be amended or updated in the Company's Quarterly Reports on Form 10-Q or other filings with the Securities and Exchange Commission. Except as required by law, the Company specifically disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this earnings release, even if its estimates change, and you should not rely on statements contained herein as representing the Company's views as of any date subsequent to the date of this press release.

Investor Relations - Chris Koegel, (617) 897-4574

Media Relations - Jeff Mochal, (704) 733-3589

investor.lpl.com/contactus.cfm

LPL Financial Holdings Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)

	Three Months Ended December 31,											Years Ended December 31,
	2020				2019				% Change			2020				2019				% Change
REVENUES
Advisory	$	638,181			$	533,259			20	%		$	2,327,519			$	1,982,869			17	%
Commission	503,020				476,920				5	%		1,906,560				1,892,407				1	%
Asset-based	258,393				288,925				(11	%)		1,044,517				1,165,979				(10	%)
Transaction and fee	129,750				118,291				10	%		506,071				480,328				5	%
Interest income, net of interest expense	6,707				10,966				(39	%)		29,412				46,508				(37	%)
Other	45,232				19,534				n/m			57,561				56,765				n/m
Total net revenues	1,581,283				1,447,895				9	%		5,871,640				5,624,856				4	%
EXPENSES
Advisory and commission	1,029,739				893,831				15	%		3,697,147				3,388,186				9	%
Compensation and benefits	167,864				149,128				13	%		609,257				556,128				10	%
Promotional	48,342				51,050				(5	%)		208,250				205,537				1	%
Depreciation and amortization	28,650				25,663				12	%		109,732				95,779				15	%
Amortization of intangible assets	17,270				16,631				4	%		67,358				65,334				3	%
Occupancy and equipment	41,903				35,320				19	%		166,389				136,163				22	%
Professional services	16,541				17,772				(7	%)		57,067				73,887				(23	%)
Brokerage, clearing and exchange	17,762				15,927				12	%		71,185				64,445				10	%
Communications and data processing	14,656				12,465				18	%		52,399				49,859				5	%
Other	27,744				30,569				(9	%)		101,018				114,546				(12	%)
Total operating expenses	1,410,471				1,248,356				13	%		5,139,802				4,749,864				8	%
Non-operating interest expense and other	24,979				31,384				(20	%)		105,765				130,001				(19	%)
Loss on extinguishment of debt	—				3,156				n/m			—				3,156				n/m
INCOME BEFORE PROVISION FOR INCOME TAXES	145,833				164,999				(12	%)		626,073				741,835				(16	%)
PROVISION FOR INCOME TAXES	34,285				38,323				(11	%)		153,433				181,955				(16	%)
NET INCOME	$	111,548			$	126,676			(12	%)		$	472,640			$	559,880			(16	%)
EARNINGS PER SHARE
Earnings per share, basic	$	1.41			$	1.57			(10	%)		$	5.96			$	6.78			(12	%)
Earnings per share, diluted	$	1.38			$	1.53			(10	%)		$	5.86			$	6.62			(11	%)
Weighted-average shares outstanding, basic	79,353				80,701				(2	%)		79,244				82,552				(4	%)
Weighted-average shares outstanding, diluted	80,904				82,695				(2	%)		80,702				84,624				(5	%)

LPL Financial Holdings Inc.
Condensed Consolidated Statements of Income Trend
(In thousands, except per share data)
(Unaudited)

	Quarterly Results
	Q4 2020				Q3 2020				Q2 2020
REVENUES
Advisory	$	638,181			$	586,941			$	523,370
Commission	503,020				472,643				427,453
Asset-based	258,393				253,551				247,067
Transaction and fee	129,750				119,747				119,478
Interest income, net of interest expense	6,707				6,623				6,540
Other	45,232				20,796				42,751
Total net revenues	1,581,283				1,460,301				1,366,659
EXPENSES
Advisory and commission	1,029,739				936,766				859,847
Compensation and benefits	167,864				151,271				143,320
Promotional	48,342				57,970				44,540
Depreciation and amortization	28,650				27,548				26,890
Amortization of intangible assets	17,270				16,829				16,689
Occupancy and equipment	41,903				41,874				43,066
Professional services	16,541				12,301				13,620
Brokerage, clearing and exchange expense	17,762				17,834				18,565
Communications and data processing	14,656				12,547				14,361
Other	27,744				24,852				22,194
Total operating expenses	1,410,471				1,299,792				1,203,092
Non-operating interest expense and other	24,979				25,179				26,289
INCOME BEFORE PROVISION FOR INCOME TAXES	145,833				135,330				137,278
PROVISION FOR INCOME TAXES	34,285				31,541				35,616
NET INCOME	$	111,548			$	103,789			$	101,662
EARNINGS PER SHARE
Earnings per share, basic	$	1.41			$	1.31			$	1.29
Earnings per share, diluted	$	1.38			$	1.29			$	1.27
Weighted-average shares outstanding, basic	79,353				79,176				78,940
Weighted-average shares outstanding, diluted	80,904				80,550				80,127

LPL Financial Holdings Inc.
Condensed Consolidated Statements of Financial Condition
(In thousands, except share data)
(Unaudited)

	December 31, 2020				September 30, 2020				December 31, 2019
ASSETS
Cash and cash equivalents	$	808,612			$	800,799			$	590,209
Cash segregated under federal and other regulations	923,158				667,121				822,697
Restricted cash	67,264				75,295				58,872
Receivables from:
Clients, net of allowance	405,106				424,131				433,986
Product sponsors, broker-dealers and clearing organizations	233,192				205,508				177,654
Advisor loans, net of allowance	547,372				509,124				441,743
Others, net of allowance	306,640				306,952				298,790
Securities owned:
Trading — at fair value	29,252				28,215				46,447
Held-to-maturity — at amortized cost	13,235				13,058				11,806
Securities borrowed	30,130				23,510				17,684
Fixed assets, net of accumulated depreciation and amortization	582,868				570,592				533,044
Operating lease assets	101,921				99,565				102,477
Goodwill	1,513,866				1,503,648				1,503,648
Intangible assets, net of accumulated amortization	397,486				409,427				439,838
Deferred income taxes, net	24,112				744				—
Other assets	539,357				453,038				401,343
Total assets	$	6,523,571			$	6,090,727			$	5,880,238
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Drafts payable	$	178,403			$	176,916			$	218,636
Payables to clients	1,356,083				1,153,014				1,058,873
Payables to broker-dealers and clearing organizations	89,743				84,405				92,002
Accrued advisory and commission expenses payable	187,040				175,278				174,330
Accounts payable and accrued liabilities	681,554				586,432				557,969
Income taxes payable	28,145				14,619				20,129
Unearned revenue	95,328				99,694				82,842
Securities sold, but not yet purchased — at fair value	206				337				176
Long-term and other borrowings, net	2,345,414				2,347,517				2,398,818
Operating lease liabilities	139,377				137,569				141,900
Finance lease liabilities	107,424				107,498				108,592
Deferred income taxes, net	—				—				2,098
Total liabilities	5,208,717				4,883,279				4,856,365
STOCKHOLDERS’ EQUITY:
Common stock, $0.001 par value; 600,000,000 shares authorized; 127,585,764 shares issued at December 31, 2020 and 126,494,028 shares issued at December 31, 2019	127				127				126
Additional paid-in capital	1,762,770				1,748,310				1,703,973
Treasury stock, at cost — 48,115,037 shares at December 31, 2020 and 46,259,989 shares at December 31, 2019	(2,391,062		)		(2,391,449		)		(2,234,793		)
Retained earnings	1,943,019				1,850,460				1,554,567
Total stockholders’ equity	1,314,854				1,207,448				1,023,873
Total liabilities and stockholders’ equity	$	6,523,571			$	6,090,727			$	5,880,238

LPL Financial Holdings Inc.
Management's Statements of Operations⁽⁵⁾
(In thousands, except per share data)
(Unaudited)

Certain information presented on pages 8-15 of this release is presented as reviewed by the Company’s management and includes information derived from the Company’s Unaudited Condensed Consolidated Statements of Income, non-GAAP financial measures, and operational and performance metrics. For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures" that begins on page 3 of this release.

	Quarterly Results
	Q4 2020				Q3 2020				% Change			Q4 2019				% Change
Gross Profit(6)
Advisory	$	638,181			$	586,941			9	%		$	533,259			20	%
Sales-based commissions	202,504				180,357				12	%		193,980				4	%
Trailing commissions	300,516				292,286				3	%		282,940				6	%
Advisory and commission fees	1,141,201				1,059,584				8	%		1,010,179				13	%
Production based payout(7)	(987,882		)		(917,831		)		8	%		(876,654		)		13	%
Advisory and commission fees, net of payout	153,319				141,753				8	%		133,525				15	%
Client cash	105,019				108,705				(3	%)		155,322				(32	%)
Other asset-based(8)	153,374				144,846				6	%		133,603				15	%
Transaction and fee	129,750				119,747				8	%		118,291				10	%
Interest income and other, net(9)	10,082				8,484				19	%		13,323				(24	%)
Total net advisory and commission fees and attachment revenue	551,544				523,535				5	%		554,064				—	%
Brokerage, clearing and exchange expense	(17,762		)		(17,834		)		—	%		(15,927		)		12	%
Gross Profit(6)	533,782				505,701				6	%		538,137				(1	%)
G&A Expense
Core G&A(10)	252,391				227,099				11	%		230,182				10	%
Regulatory charges	8,775				8,326				n/m			7,893				n/m
Promotional	48,342				57,970				(17	%)		51,050				(5	%)
Employee share-based compensation	7,542				7,420				2	%		7,179				5	%
Total G&A	317,050				300,815				5	%		296,304				7	%
EBITDA(5)	216,732				204,886				6	%		241,833				(10	%)
Depreciation and amortization	28,650				27,548				4	%		25,663				12	%
Amortization of intangible assets	17,270				16,829				3	%		16,631				4	%
Non-operating interest expense and other	24,979				25,179				(1	%)		31,384				(20	%)
Loss on extinguishment of debt	—				—				n/m			3,156				n/m
INCOME BEFORE PROVISION FOR INCOME TAXES	145,833				135,330				8	%		164,999				(12	%)
PROVISION FOR INCOME TAXES	34,285				31,541				9	%		38,323				(11	%)
NET INCOME	$	111,548			$	103,789			7	%		$	126,676			(12	%)
Earnings per share, diluted	$	1.38			$	1.29			7	%		$	1.53			(10	%)
Weighted-average shares outstanding, diluted	80,904				80,550				—	%		82,695				(2	%)
EPS Prior to Amortization of Intangible Assets(5)(38)	$	1.53			$	1.44			6	%		$	1.68			(9	%)

LPL Financial Holdings Inc.
Management's Statements of Operations Trend⁽⁵⁾
(In thousands, except per share data)
(Unaudited)

	Quarterly Results
	Q4 2020				Q3 2020				Q2 2020
Gross Profit(6)
Advisory	$	638,181			$	586,941			$	523,370
Sales-based commissions	202,504				180,357				159,512
Trailing commissions	300,516				292,286				267,941
Advisory and commission fees	1,141,201				1,059,584				950,823
Production based payout(7)	(987,882		)		(917,831		)		(819,953		)
Advisory and commission fees, net of payout	153,319				141,753				130,870
Client cash	105,019				108,705				116,266
Other asset-based(8)	153,374				144,846				130,801
Transaction and fee	129,750				119,747				119,478
Interest income and other, net(9)	10,082				8,484				9,397
Total net advisory and commission fees and attachment revenue	551,544				523,535				506,812
Brokerage, clearing and exchange expense	(17,762		)		(17,834		)		(18,565		)
Gross Profit(6)	533,782				505,701				488,247
G&A Expense
Core G&A(10)	252,391				227,099				222,406
Regulatory charges	8,775				8,326				6,115
Promotional	48,342				57,970				44,540
Employee share-based compensation	7,542				7,420				8,040
Total G&A	317,050				300,815				281,101
EBITDA(5)	216,732				204,886				207,146
Depreciation and amortization	28,650				27,548				26,890
Amortization of intangible assets	17,270				16,829				16,689
Non-operating interest expense and other	24,979				25,179				26,289
INCOME BEFORE PROVISION FOR INCOME TAXES	145,833				135,330				137,278
PROVISION FOR INCOME TAXES	34,285				31,541				35,616
NET INCOME	$	111,548			$	103,789			$	101,662
Earnings per share, diluted	$	1.38			$	1.29			$	1.27
Weighted-average shares outstanding, diluted	80,904				80,550				80,127
EPS Prior to Amortization of Intangible Assets(5)(38)	$	1.53			$	1.44			$	1.42

LPL Financial Holdings Inc.
Operating Metrics⁽⁵⁾
(Dollars in billions, except where noted)
(Unaudited)

	Q4 2020				Q3 2020				Change			Q4 2019				Change
Market Drivers
S&P 500 Index (end of period)	3,756				3,363				12%			3,231				16%
Fed Funds Daily Effective Rate (FFER) (average bps)	9				9				—bps			165				(156bps)
Assets
Advisory Assets(11)	$	461.2			$	405.9			14%			$	365.8			26%
Brokerage Assets(12)	441.9				404.4				9%			398.6				11%
Total Advisory and Brokerage Assets	$	903.1			$	810.4			11%			$	764.4			18%
Advisory % of Total Advisory and Brokerage Assets	51.1		%		50.1		%		100bps			47.8		%		330bps
Assets by Platform
Corporate Platform Advisory Assets(13)	$	291.9			$	253.9			15%			$	228.3			28%
Hybrid Platform Advisory Assets(14)	169.3				152.0				11%			137.5				23%
Brokerage Assets	441.9				404.4				9%			398.6				11%
Total Advisory and Brokerage Assets	$	903.1			$	810.4			11%			$	764.4			18%
Centrally Managed Assets
Centrally Managed Assets(15)	$	67.1			$	59.0			14%			$	52.4			28%
Centrally Managed % of Total Advisory Assets	14.6		%		14.5		%		10bps			14.3		%		30bps

LPL Financial Holdings Inc.
Operating Metrics⁽⁵⁾
(Dollars in billions, except where noted)
(Unaudited)

	Q4 2020				Q3 2020				Change			Q4 2019				Change
Net New Assets (NNA)
Net New Advisory Assets(16)	$	18.4			$	10.4			n/m			$	11.5			n/m
Net New Brokerage Assets(17)	3.4				0.7				n/m			1.0				n/m
Total Net New Assets	$	21.8			$	11.1			n/m			$	12.5			n/m
Net New Assets (NNA) Prior to Acquisitions(18)
Net New Advisory Assets	$	15.9			$	10.4			n/m			$	11.5			n/m
Net New Brokerage Assets	1.9				0.7				n/m			1.0				n/m
Total Net New Assets Prior to Acquisitions	$	17.8			$	11.1			n/m			$	12.5			n/m
Net Brokerage to Advisory Conversions(19)	$	2.6			$	2.0			n/m			$	1.9			n/m
Advisory NNA Annualized Growth Prior to Acquisitions(20)	15.6		%		11.0		%		n/m			13.7		%		n/m
Total NNA Annualized Growth Prior to Acquisitions(20)	8.8		%		5.8		%		n/m			6.9		%		n/m
Net New Advisory Assets
Corporate Platform Net New Advisory Assets(21)	$	15.0			$	7.8			n/m			$	8.7			n/m
Hybrid Platform Net New Advisory Assets(22)	3.3				2.6				n/m			2.9				n/m
Total Net New Advisory Assets	$	18.4			$	10.4			n/m			$	11.5			n/m
Centrally Managed Net New Advisory Assets(23)	$	2.5			$	1.9			n/m			$	2.3			n/m
Client Cash Balances
Insured Cash Account Balances	$	37.3			$	34.7			7%			$	24.4			53%
Deposit Cash Account Balances	8.2				8.0				2%			5.0				64%
Total Bank Sweep Balances	45.5				42.7				7%			29.4				55%
Money Market Account Cash Balances	1.5				1.5				—%			1.9				(21%)
Purchased Money Market Funds	1.9				2.3				(17%)			2.4				(21%)
Total Money Market Balances	3.3				3.9				(15%)			4.3				(23%)
Total Client Cash Balances	$	48.9			$	46.6			5%			$	33.7			45%
Client Cash Balances % of Total Assets	5.4		%		5.7		%		(30bps)			4.4		%		100bps
Client Cash Balance Average Fees(24)
Insured Cash Account Average Fee - bps	108				118				(10)			222				(114)
Deposit Cash Account Average Fee - bps	30				38				(8)			184				(154)
Money Market Account Average Fee - bps	5				9				(4)			69				(64)
Purchased Money Market Fund Average Fee - bps	13				20				n/m			29				n/m
Total Client Cash Balance Average Fee - bps	87				95				(8)			193				(106)
Net Buy (Sell) Activity(25)	$	12.2			$	9.3			n/m			$	9.8			n/m

LPL Financial Holdings Inc.
Monthly Metrics⁽⁵⁾
(Dollars in billions, except where noted)
(Unaudited)

	December 2020				November 2020				Nov to December Change			October 2020				September 2020
Assets
Advisory Assets(11)	$	461.2			$	442.0			4.3%			$	406.0			$	405.9
Brokerage Assets(12)	441.9				431.3				2.5%			401.6				404.4
Total Advisory and Brokerage Assets	$	903.1			$	873.3			3.4%			$	807.6			$	810.4
Net New Assets (NNA)
Net New Advisory Assets(16)	$	6.8			$	5.8			n/m			$	5.7			$	4.4
Net New Brokerage Assets(17)	1.1				1.6				n/m			0.8				0.7
Total Net New Assets	$	7.9			$	7.4			n/m			$	6.5			$	5.1
Net Brokerage to Advisory Conversions(19)	$	1.0			$	0.7			n/m			$	0.9			$	0.7
Net New Assets (NNA) Prior to Acquisitions(18)
Net New Advisory Assets	$	6.8			$	4.2			n/m			$	4.8			$	4.4
Net New Brokerage Assets	1.1				0.7				n/m			0.2				0.7
Total Net New Assets Prior to Acquisitions	$	7.9			$	4.9			n/m			$	5.0			$	5.1
Client Cash Balances
Insured Cash Account Balances	$	37.3			$	36.1			3.3%			$	36.0			$	34.7
Deposit Cash Account Balances	8.2				8.3				(1.2%)			8.6				8.0
Total Bank Sweep Balances	45.5				44.5				2.2%			44.6				42.7
Money Market Account Cash Balances	1.5				1.5				—%			1.6				1.5
Purchased Money Market Funds	1.9				2.1				(9.5%)			2.2				2.3
Total Money Market Balances	3.3				3.6				(8.3%)			3.8				3.9
Total Client Cash Balances	$	48.9			$	48.1			1.7%			$	48.3			$	46.6
Net Buy (Sell) Activity(25)	$	5.6			$	4.2			n/m			$	2.5			$	2.9
Market Indices
S&P 500 Index (end of period)	3,756				3,622				3.7%			3,270				3,363
Fed Funds Effective Rate (average bps)	9				9				—bps			9				9

LPL Financial Holdings Inc.
Financial Measures⁽⁵⁾
(Dollars in thousands, except where noted)
(Unaudited)

	Q4 2020				Q3 2020				Change			Q4 2019				Change
Commission Revenue by Product
Annuities	$	262,235			$	250,823			5%			$	244,249			7%
Mutual funds	153,330				146,788				4%			150,697				2%
Fixed income	24,395				16,731				46%			28,642				(15%)
Equities	31,231				30,283				3%			21,233				47%
Other	31,829				28,018				14%			32,099				(1%)
Total commission revenue	$	503,020			$	472,643			6%			$	476,920			5%
Commission Revenue by Sales-based and Trailing Commission
Sales-based commissions
Annuities	$	89,125			$	81,475			9%			$	86,141			3%
Mutual funds	36,715				33,871				8%			37,611				(2%)
Fixed income	24,395				16,731				46%			28,642				(15%)
Equities	31,231				30,283				3%			21,233				47%
Other	21,038				17,997				17%			20,353				3%
Total sales-based commissions	$	202,504			$	180,357			12%			$	193,980			4%
Trailing commissions
Annuities	$	173,110			$	169,348			2%			$	158,108			9%
Mutual funds	116,615				112,917				3%			113,086				3%
Other	10,791				10,021				8%			11,746				(8%)
Total trailing commissions	$	300,516			$	292,286			3%			$	282,940			6%
Total commission revenue	$	503,020			$	472,643			6%			$	476,920			5%
Payout Rate
Base Payout Rate	82.57		%		82.97		%		(40bps)			82.82		%		(25bps)
Production Based Bonuses	3.99		%		3.65		%		34bps			3.96		%		3bps
Total Payout Ratio	86.57		%		86.62		%		(5bps)			86.78		%		(21bps)

LPL Financial Holdings Inc.
Capital Management Measures⁽⁵⁾
(Dollars in thousands, except where noted)
(Unaudited)

	Q4 2020				Q3 2020
Cash Available for Corporate Use(26)
Cash at Parent	$	201,385			$	162,035
Excess Cash at Broker-Dealer subsidiary per Credit Agreement	67,574				78,739
Other Available Cash	10,960				11,337
Total Cash Available for Corporate Use	$	279,919			$	252,111
Credit Agreement Net Leverage
Total Debt (does not include unamortized premium)	$	2,359,300			$	2,361,975
Cash Available	279,919				252,111
Credit Agreement Net Debt	$	2,079,381			$	2,109,864
Credit Agreement EBITDA (trailing twelve months)(27)	$	961,225			$	980,827
Credit Agreement Net Leverage Ratio	2.16		x		2.15		x

		December 31, 2020
Total Debt		Balance			Current Applicable Margin		Yield At Issuance			Interest Rate			Maturity
Revolving Credit Facility(a)		$	—		ABR+25bps					—	%		11/12/2024
Broker-Dealer Revolving Credit Facility(b)		—			FFR+125bps					—	%		7/31/2024
Senior Secured Term Loan B		1,059,300			LIBOR+175 bps(c)					1.898	%		11/12/2026
Senior Unsecured Notes(d)		500,000			5.75% Fixed		5.750	%		5.750	%		9/15/2025
Senior Unsecured Notes(d)		400,000		(e)	5.75% Fixed		5.115	%		5.750	%		9/15/2025
Senior Unsecured Notes(f)		400,000			4.625% Fixed		4.625	%		4.625	%		11/15/2027
Total / Weighted Average		$	2,359,300							3.830	%

(a)  The Revolving Credit Facility is secured and has a borrowing capacity of $750 million.
(b)  The Broker-Dealer Revolving Credit Facility is unsecured and at LPL Financial LLC, the Company’s broker-dealer subsidiary, and has a borrowing capacity of $300 million.
(c)  The LIBOR rate option is one-month LIBOR rate and subject to an interest rate floor of 0 basis points.
(d)  The Senior Unsecured Notes were issued in two separate transactions; $500 million in notes were issued in March 2017 at par; the remaining $400 million were issued in September 2017 and priced at 103% of the aggregate principal amount.
(e)  Does not include unamortized premium of approximately $7.1 million as of December 31, 2020.
(f)  The Senior Unsecured Notes were issued in November 2019 at par.

LPL Financial Holdings Inc.
Key Business and Financial Metrics⁽⁵⁾
(Dollars in thousands, except where noted)
(Unaudited)

	Q4 2020				Q3 2020				Change			Q4 2019				Change
Advisors
Advisors	17,287				17,168				1	%		16,464				5	%
Net New Advisors	119				195				n/m			115				n/m
Annualized advisory and commission fees per Advisor(28)	$	265			$	248			7	%		$	246			8	%
Average Total Assets per Advisor ($ in millions)(29)	$	52.2			$	47.2			11	%		$	46.4			13	%
Transition assistance loan amortization ($ in millions)(30)	$	29.7			$	30.4			(2	%)		$	26.1			14	%
Total client accounts (in millions)	6.0				5.9				2	%		5.7				5	%
Employees - period end	4,756				4,658				2	%		4,343				10	%
Productivity Metrics
Advisory Revenue as a % of Corporate Advisory Assets(31)	1.02		%		1.02		%		—	bps		1.02		%		—	bps
Gross Profit ROA(32)	26.8		bps		27.9		bps		(1.1	bps)		30.7		bps		(3.9	bps)
OPEX as a % of Advisory and Brokerage Assets(33)	17.5		bps		17.8		bps		(0.3	bps)		18.3		bps		(0.8	bps)
EBIT ROA(34)	9.3		bps		10.1		bps		(0.8	bps)		12.4		bps		(3.1	bps)
Production Retention Rate (YTD annualized)(35)	97.7		%		98.1		%		(40	bps)		96.5		%		120	bps
Recurring Gross Profit Rate(36)	84.8		%		86.1		%		(130	bps)		85.9		%		(110	bps)
EBITDA as a % of Gross Profit	40.6		%		40.5		%		10	bps		44.9		%		(430	bps)
Capital Expenditure ($ in millions)	$	43.6			$	40.1			9	%		$	52.1			(16	%)
Share Repurchases ($ in millions)	$	—			$	—			—	%		$	120.0			(100	%)
Dividends ($ in millions)	19.8				19.8				—	%		20.2				(2	%)
Total Capital Allocated ($ in millions)	$	19.8			$	19.8			—	%		$	140.2			(86	%)
Weighted-average Share Count, Diluted	80.9				80.6				—	%		82.7				(2	%)
Total Capital Allocated per Share(37)	$	0.25			$	0.25			—	%		$	1.70			(85	%)

Endnote Disclosures

(1) In April 2020, the Company updated its definition of net new assets to include Dividends plus Interest, minus Advisory Fees. See FNs 16, 17, 21, 22 and 23.

(2) Represents the estimated total advisory and brokerage assets expected to transition to the Company's broker-dealer subsidiary, LPL Financial LLC ("LPL Financial"), associated with advisors who transferred their licenses to LPL Financial during the period. The estimate is based on prior business reported by the advisors, which has not been independently and fully verified by LPL Financial. The actual transition of assets to LPL Financial generally occurs over several quarters, including the initial quarter of the transition, and the actual amount transitioned may vary from the estimate.

(3) The terms “Financial Advisors” and “Advisors” refer to registered representatives and/or investment advisor representatives affiliated with LPL Financial, an SEC registered broker-dealer and investment adviser. Q4 2020 advisor count included 32 advisors from the acquisition of E.K. Riley.

(4) Compliance with the Credit Agreement Net Leverage Ratio is only required under our revolving credit facility.

(5) Certain information presented on pages 8-15 includes non-GAAP financial measures and operational and performance metrics. For more information on non-GAAP financial measures, please see the section titled “Non-GAAP Financial Measures” that begins on page 3 of this release.

(6) Gross Profit is a non-GAAP financial measure. Please see a description of Gross Profit under "Non-GAAP Financial Measures" on page 3 of this release for additional information. Below is a calculation of Gross Profit for the periods presented (in millions):

	Q4 2020				Q3 2020				Q2 2020				Q4 2019
Total net revenues	$	1,581			$	1,460			$	1,367			$	1,448
Advisory and commission expense	1,030				937				860				894
Brokerage, clearing and exchange fees	18				18				19				16
Gross profit(+)	$	534			$	506			$	488			$	538

(+)        Balances may not foot due to rounding.

(7) Production based payout is an operating measure calculated as an advisory and commission expense less advisor deferred compensation expense. Below is a reconciliation of production based payout against the Company’s advisory and commission expense for the periods presented (in thousands):         

	Q4 2020				Q3 2020				Q2 2020				Q4 2019
Production based payout	$	987,882			$	917,831			$	819,953			$	876,654
Advisor deferred compensation expense	41,857				18,935				39,894				17,177
Advisory and commission expense	$	1,029,739			$	936,766			$	859,847			$	893,831

(8) Consists of revenues from the Company's sponsorship programs with financial product manufacturers and omnibus processing and networking services, but does not include fees from client cash programs. Other asset-based revenues are a component of asset-based revenues and are derived from the Company's Unaudited Condensed Consolidated Statements of Income.

(9) Interest income and other, net is an operating measure calculated as interest income, net of interest expense plus other revenue, less advisor deferred compensation expense. Below is a reconciliation of interest income and other, net against the Company’s interest income, net of interest expense and other revenue for the periods presented (in thousands):         

	Q4 2020				Q3 2020				Q2 2020				Q4 2019
Interest income, net of interest expense	$	6,707			$	6,623			$	6,540			$	10,966
Plus: Other revenue	45,232				20,796				42,751				19,534
Less: Advisor deferred compensation expense	(41,857		)		(18,935		)		(39,894		)		(17,177		)
Interest income and other, net	$	10,082			$	8,484			$	9,397			$	13,323

(10) Core G&A is a non-GAAP financial measure. Please see a description of Core G&A under “Non-GAAP Financial Measures” on page 3 of this release for additional information. Below is a reconciliation of Core G&A against the Company’s total operating expenses for the periods presented:

	Q4 2020				Q3 2020				Q2 2020				Q4 2019
Operating Expense Reconciliation (in thousands)
Core G&A	$	252,391			$	227,099			$	222,406			$	230,182
Regulatory charges	8,775				8,326				6,115				7,893
Promotional	48,342				57,970				44,540				51,050
Employee share-based compensation	7,542				7,420				8,040				7,179
Total G&A	317,050				300,815				281,101				296,304
Advisory and commission	1,029,739				936,766				859,847				893,831
Depreciation and amortization	28,650				27,548				26,890				25,663
Amortization of intangible assets	17,270				16,829				16,689				16,631
Brokerage, clearing and exchange	17,762				17,834				18,565				15,927
Total operating expenses	$	1,410,471			$	1,299,792			$	1,203,092			$	1,248,356

(11) Consists of total advisory assets under custody at LPL Financial. Q4 2019 also included advisory assets serviced by investment advisor representatives of Allen & Company of Florida, LLC ("Allen & Company") that were onboarded to LPL Financial's custodial platform in Q4 2019.

(12) Consists of brokerage assets serviced by advisors licensed with LPL Financial. Q4 2019 also included brokerage assets serviced by advisors licensed with Allen & Company that were onboarded to LPL Financial's custodial platform in Q4 2019.

(13) Consists of total assets on LPL Financial's corporate advisory platform serviced by investment advisor representatives of LPL Financial or Allen & Company.

(14) Consists of total assets on LPL Financial's independent advisory platform serviced by investment advisor representatives of separate registered investment advisor firms ("Hybrid RIAs"), rather than of LPL Financial.

(15) Represents those advisory assets in LPL Financial’s Model Wealth Portfolios, Optimum Market Portfolios, Personal Wealth Portfolios and Guided Wealth Portfolios platforms.

(16) Consists of total client deposits into advisory accounts, including advisory assets serviced by Allen & Company advisors, less total client withdrawals from advisory accounts, plus dividends, plus interest, minus advisory fees. The Company considers conversions from and to brokerage accounts as deposits and withdrawals, respectively. Figures for Net New Advisory Assets reported prior to April 2020 did not include dividends and interest or subtract advisory fees. The figure previously reported for Q4 2019 was an inflow of $9.6 billion. See FN 1.

(17) Consists of total client deposits into brokerage accounts, including brokerage assets serviced by Allen & Company advisors, less total client withdrawals from brokerage accounts, plus dividends, plus interest. The Company considers conversions from and to advisory accounts as deposits and withdrawals, respectively. Figures for Net New Brokerage Assets reported prior to April 2020 did not include dividends and interest. The figure previously reported for Q4 2019 was an outflow of $0.8 billion. See FN 1.

(18) Consists of net new assets excluding the acquisitions of Lucia Securities, LLC and E.K. Riley Investments, LLC. Acquired assets include $2.5 billion of net new assets related to E.K. Riley Investments, LLC in November 2020, and $1.5 billion of net new assets from Lucia Securities, LLC in October 2020.

(19) Consists of existing custodied assets that converted from brokerage to advisory, less existing custodied assets that converted from advisory to brokerage.

(20) Calculated as annualized current period net new assets divided by preceding period assets in their respective categories of advisory assets or total advisory and brokerage assets. (See FN 18)

(21) Consists of total client deposits into advisory accounts on LPL Financial's corporate advisory platform (FN 13) less total client withdrawals from advisory accounts on its corporate advisory platform, plus dividends, plus interest, minus advisory fees. Figures for Corporate Platform Net New Advisory Assets reported prior to April 2020 did not include dividends and interest or subtract advisory fees. The figure previously reported for Q4 2019 was an inflow of $7.5 billion. See FN 1.

(22) Consists of total client deposits into advisory accounts on LPL Financial's independent advisory platform (FN 14) less total client withdrawals from advisory accounts on its independent advisory platform, plus dividends, plus interest, minus advisory fees. Figures for Hybrid Platform Net New Advisory Assets reported prior to April 2020 did not include dividends and interest or subtract advisory fees. The figure previously reported for Q4 2019 was an inflow of $2.1 billion. See FN 1.

(23) Consists of total client deposits into centrally managed assets accounts (FN 15) less total client withdrawals from centrally managed assets accounts, plus dividends, plus interest, minus advisory fees. Figures for Centrally Managed Net New Advisory Assets reported prior to April 2020 did not include dividends and interest or subtract advisory fees. The figure previously reported for Q4 2019 was an inflow of $2.0 billion. See FN 1.

(24) Calculated by dividing revenue for the period by the average balance during the period.

(25) Represents the amount of securities purchased less the amount of securities sold in client accounts custodied with LPL Financial. Reported activity does not include any other cash activity, such as deposits, withdrawals, dividends received or fees paid.

(26) Consists of cash unrestricted by the Credit Agreement and other regulations available for operating, investing and financing uses.

(27) EBITDA and Credit Agreement EBITDA are non-GAAP financial measures. Please see a description of EBITDA and Credit Agreement EBITDA under “Non-GAAP Financial Measures” on page 3 of this release for additional information. Under the Credit Agreement, management calculates Credit Agreement EBITDA for a trailing twelve month period at the end of each fiscal quarter, and in doing so may make further adjustments to prior quarters. Below are reconciliations of EBITDA and Credit Agreement EBITDA to net income for the periods presented (dollars in thousands):          

	Q4 2020				Q3 2020
EBITDA and Credit Agreement EBITDA Reconciliations
Net income	$	472,640			$	487,768
Non-operating interest expense and other	105,765				112,170
Provision for income taxes	153,433				157,471
Loss on extinguishment of debt	—				3,156
Depreciation and amortization	109,732				106,745
Amortization of intangible assets	67,358				66,719
EBITDA	$	908,928			$	934,029
Credit Agreement Adjustments:
Employee share-based compensation expense	$	31,650			$	31,287
Advisor share-based compensation expense	2,321				2,404
Other	18,326				13,107
Credit Agreement EBITDA (trailing twelve months)	$	961,225			$	980,827

(28) Calculated based on the average advisor count from the current period and prior period.

(29) Calculated based on the end-of-period total advisory and brokerage assets divided by end-of-period advisor count.

(30) Represents the amortization expense amount of forgivable loans for transition assistance to advisors and financial institutions.

(31) Represents advisory revenue as a percentage of Corporate Platform Advisory Assets (FN 13) for the trailing twelve month period.

(32) Represents Gross Profit (FN 6), a non-GAAP financial measure, for the trailing twelve month period, divided by average month-end total advisory and brokerage assets for the trailing twelve month period.

(33) Represents operating expenses for the trailing twelve month period, excluding production-related expense, divided by average month-end total advisory and brokerage assets for the period. Production-related expense includes commissions and advisory expense and brokerage, clearing and exchange expense. For purposes of this metric, operating expenses includes Core G&A (FN 10), a non-GAAP financial measure, as well as regulatory charges, promotional, employee share-based compensation, depreciation and amortization, and amortization of intangible assets.

(34) EBIT ROA is calculated as Gross Profit ROA (FN 32) less OPEX as a percentage of Total Advisory and Brokerage Assets. (See FN 33)

(35) Reflects retention of advisory and commission revenues, calculated by deducting the prior year production of the annualized year-to-date attrition rate, over the prior year total production.

(36) Recurring Gross Profit Rate refers to the percentage of the Company’s Gross Profit, a non-GAAP financial measure, that was recurring for the trailing twelve month period. Management tracks Recurring Gross Profit, a characterization of Gross Profit and a statistical measure, which is defined to include the Company’s revenues from asset-based fees, advisory fees, trailing commissions, client cash programs and certain other fees that are based upon client accounts and advisors, less the expenses associated with such revenues and certain other recurring expenses not specifically associated with a revenue line. Management allocates such other recurring expenses on a pro-rata basis against specific revenue lines at its discretion.

(37) Capital Allocated per Share equals the amount of capital allocated for share repurchases and cash dividends divided by the diluted weighted-average shares outstanding.

(38) EPS Prior to Amortization of Intangible Assets is a non-GAAP financial measure. Please see a description of EPS Prior to Amortization of Intangible Assets under “Non-GAAP Financial Measures” on page 3 of this release for additional information. Below is a reconciliation of EPS Prior to Amortization of Intangible Assets to the Company’s GAAP EPS for the periods presented:

EPS Reconciliation (in thousands, except per share data)	Q4 2020
EPS	$	1.38
Amortization of Intangible Assets	17,270
Tax Benefit	(4,836		)
Amortization of Intangible Assets Net of Tax Benefit	$	12,434
Diluted Share Count	80,904
EPS Impact	$	0.15
EPS Prior to Amortization of Intangible Assets	$	1.53