RYAN SPECIALTY HOLDINGS INC

(Tabular amounts presented in thousands, except share and per share data)

1. BASIS OF PRESENTATION

Nature of Operations

Ryan Specialty Holdings, Inc., (the “Company”) is a service provider of specialty products and solutions for insurance

brokers, agents, and carriers. These services encompass distribution, underwriting, product development, administration,

and risk management by acting as a wholesale broker and a managing underwriter or a program administrator with

delegated authority from insurance carriers. The Company’s offerings cover a wide variety of sectors including

commercial, industrial, institutional, governmental, and personal throughone operating segment, Ryan Specialty. With the

exception of the Company’s equity method investment, the Company does not take on any underwriting risk.

The Company is headquartered in Chicago, Illinois, and has operations inthe United States, the United Kingdom, Europe,

Canada, India, and Singapore. The Company’s Class A common stock is traded on the New York Stock Exchange under

the ticker symbol “RYAN”.

Organization

Ryan Specialty Holdings, Inc., was formed as a Delaware corporation on March 5, 2021, for the purpose of completing an

IPO and to carry on the business of the LLC. New Ryan Specialty, LLC, or New LLC, was formed as a Delaware limited

liability company on April 20, 2021, for the purpose of becoming, subsequent to our IPO, an intermediate holding

company between Ryan Specialty Holdings, Inc., and the LLC. The Company is the sole managing member of New LLC.

New LLC is a holding company with its sole material asset being a controlling equity interest in the LLC. The Company

operates and controls the business and affairs of the LLC through New LLC and, through the LLC, conducts its business.

Accordingly, the Company consolidates the financial results of New LLC, and therefore the LLC, and reports the non-

controlling interests of New LLC’s Common Units on its consolidated financial statements. As the LLC is substantively

the same as New LLC, for the purpose of this document, we will refer to both New LLC and the LLC as the “LLC”. As of

December 31, 2024, the Company owned 47.9% of the outstanding LLC Common Units.

Basis of Presentation

The accompanying consolidated financial statements and notes thereto have been prepared in accordance with U.S. GAAP.

The consolidated financial statements include the Company’s accounts and those of all controlled subsidiaries. In the

opinion of management, the consolidated financial statements include all normal recurring adjustments necessary to present

fairly the Company’s consolidated financial position, results of operations, and cash flows for all periods presented. Certain

prior period amounts in the Consolidated Statements of Cash Flows have been reclassified toconform to the current year

presentation.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries that it controls due to

ownership of a majority voting interest or pursuant to variable interest entity (“VIE”) accounting. All intercompany

transactions and balances have been eliminated in consolidation.

The Company, through its intermediate holding company, New LLC, owns a minority economic interest in, and operates

and controls the businesses and affairs of, the LLC. The LLC is a VIE of the Company and the Company is the primary

beneficiary of the LLC as the Company has both the power to direct the activities that most significantly impact the LLC’s

economic performance and has the obligation to absorb losses of, and receive benefits from, the LLC, which could be

significant to the Company. Accordingly, the Company has prepared these consolidated financial statements in accordance

with Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”). ASC 810 requires that if an entity is

the primary beneficiary of a VIE, the assets, liabilities, and results of operations of the VIE should be included in the

consolidated financial statements of such entity. The Company’s relationship with the LLC results in no recourse to the

general credit of the Company and the Company has no contractual requirement to provide financial support to the LLC.

The Company shares in the income and losses of the LLC indirect proportion to the Company’s ownership percentage.

Use of Estimates

The preparation of the consolidated financial statements and notes thereto requires management to make estimates,

judgments, and assumptions that affect the amounts reported in the consolidated financial statements and in the notes

thereto. Such estimates and assumptions could change in the future as circumstances change or more information becomes

available, which could affect the amounts reported and disclosed herein.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Segment Reporting

In accordance with ASC 280, Segment Reporting, Ryan Specialty’s operations are reported as a single operating and

reporting segment. See Note 20, Segment Reporting, for additional information on the Company’s segment reporting.

Revenue Recognition

The Company generates revenues primarily through commissions and fees from customers, as well as compensation from

insurance and reinsurance companies for services provided to them.

The Company incurs both costs to fulfill contracts, principally in pre-placement activities, and costs to obtain contracts,

principally through certain sales commissions paid to employees. For situations in which the renewal period is one year or

less and renewal costs are commensurate with the initial contract, the Company applies a practical expedient and

recognizes the costs of obtaining a contract as an expense when incurred.

Net Commissions and Policy Fees

Net commissions and policy fees revenue is primarily based on a percentage of premiums or fees received for an agreed-

upon level of service. The Company’s customers for this revenue stream are agents of the insured. The net commissions

and policy fees are recognized at the point in time when an insurance policy is bound and issued, which occurs on the later

of the policy effective date or the date the Company receives a request to bind coverage from the customer. Most insurance

premiums are subject to cancellations; therefore, commission revenue is considered to be variable consideration at the

contract effective date and is recognized net of a constraint for estimated policy cancellations. Estimated policy

cancellations are based upon the Company’s historical cancellations. Any endorsement made to a contract is treated as a

new contract with revenue recognized on the later of the endorsement effective date or the date the Company receives a

request to bind coverage from the customer.

Supplemental and Contingent Commissions

Supplemental and contingent commissions are additional revenues paid to the Company based on the volume and/or

underwriting profitability of the eligible insurance contracts placed. The Company’s performance obligation is satisfied and

revenue is recognized over time using the output method as the Company places eligible or profitable policies. For this

revenue stream, the customer is the carrier as the carrier is the entity that will ultimately pay the Company additional

revenues once certain volume and profitability targets are achieved by the carrier. Because of the limited visibility into the

satisfaction of performance indicators outlined in the contracts, the Company constrains such revenues until the time that

the carrier provides explicit confirmation ofamounts owed to the Company to avoid a significant reversal of revenue in a

future period. The uncertainty regarding the ultimate transaction price for contingent commissions is principally the

profitability of the underlying insurance policies placed as determined by the development of loss ratios maintained by the

carriers. The uncertainty is resolved over the contractual term as actual results are achieved.

Loss Mitigation Fees

Loss mitigation fees, or mergers and acquisitions (“M&A”) fees, consist of revenue earned from the review of due

diligence and other relevant information in underwriting a risk. The customer of this revenue stream is the agent of the

insured. The performance obligation is the production of an Expense Agreement (“EA”) or Letter of Intent (“LOI”). As the

M&A fees are not dependent on the outcome of the risk being insured, the Company recognizes these fees at the point in

time when control transfers to the customer, which occurs on the effective date of an executed EA or LOI.

Disaggregation of Revenue

Wholesale Brokerage revenue primarily includes insurance commissions and fees for services rendered to retail agents and

brokers, as well as supplemental and contingent commissions from carriers. Wholesale Brokerage distributes a wide range

and diversified mix of specialty property, casualty, professional lines, and workers’ compensation insurance products from

insurance carriers to retail brokerage firms.

Binding Authority revenue primarily includes insurance commissions for services rendered, as well as supplemental and

contingent commissions from carriers. The Company’s binding authorities receive underwriting authority from a variety of

carriers for both Admitted and non-admitted business for small to mid-size risks. Wholesale binding authorities generally

have authority to bind coverage on behalf of an insurance carrier for a specific type of risk, subject to agreed-upon

guidelines and limits. Wholesale binding authorities receive submissions for insurance directly from retail brokers, evaluate

price, make underwriting decisions regarding these submissions, and bind and issue policies on behalf of insurance carriers.

Wholesale binding authorities are typically created to handle large volumes of small-premium policies across commercial

and personal lines within strictly defined underwriting criteria. Binding authorities allow the insured to access additional

capital, and the carrier to efficiently aggregate its distribution.

Underwriting Management revenue primarily includes insurance commissions for services rendered, including contingent

commissions for placing profitable business with carrier partners, as well as loss mitigation fees. Underwriting

Management provides retail and wholesale brokers specialty market expertise in distinct and complex market niches

underserved in today’s marketplace through MGUs, which act on behalf of insurance carriers that have given the Company

the authority to underwrite and bind coverage for specific risks in a cost-effective manner, and programs that offer

commercial and personal insurance for specific product lines or industry classes.

Contract Balances

Contract assets, which arise primarily from the Company’s supplemental and contingent commission arrangements and

medical stop loss business, are included within Commissions and fees receivable – net on the Consolidated Balance Sheets.

These assets relate to the unbilled amounts of services for which the Company recognizes revenue over time. Payment

related to contract assets is typically due within one year of the completed performance obligation. Occasionally, the

Company receives cash payments from customers in advance of the Company’s performance obligation being satisfied,

which represent a contract liability. Contract liabilities are recognized as revenue when the performance obligations are

satisfied.

Cash and Cash Equivalents

Cash and cash equivalents include cash in demand deposit accounts and short-term investments, consisting principally of

AAA-rated money market funds and treasury bills, having original maturities of 90 days or less. Interest income is

recognized in Interest expense, net on the Consolidated Statements of Income.

Commissions and Fees Receivable

The Company earns commissions and fees through its Wholesale Brokerage, Binding Authority and Underwriting

Management Specialties. The Company records a receivable once a performance obligation is satisfied. In some instances,

the Company advances premiums on behalf of clients, or advances claims payments and refunds to clients on behalf of

underwriters. These amounts are reflected within Commissions and fees receivable – net on the Consolidated Balance

Sheets.

The Company’s receivables are shown net of an allowance for credit losses, which is estimated based on a combination of

factors, including evaluation of historical write-offs, current economic conditions, aging of balances, and other qualitative

and quantitative analyses.

Fiduciary Assets, Fiduciary Liabilities, and Related Income

In its role as an insurance intermediary, the Company collects and remits amounts between insurance agents and brokers

and insurance underwriters. Because these amounts are collected on behalf of third parties, they are excluded from the

measurement of the transaction price. Similarly, the Company elected to exclude surplus lines taxes from the measurement

of the transaction price, as these are assessed by and remitted to governmental authorities. The Company recognizes

fiduciary amounts collectible and held on behalf of others, including insurance policyholders, clients, other insurance

intermediaries, and insurance carriers, as Fiduciary cash and receivables on the Consolidated Balance Sheets. Cash and

cash equivalents held in excess of the amount required to meet the Company’s fiduciary obligations are recognized as Cash

and cash equivalents on the Consolidated Balance Sheets. The Company recognizes premiums, claims payable, and surplus

lines taxes as Fiduciary liabilities on the Consolidated Balance Sheets. The Company does not have any rights or

obligations in connection with these amounts with the exception of segregating these amounts from the Company’s

operating accounts and liabilities.

Unremitted insurance premiums are held in a fiduciary capacity until disbursement. The Company holds these funds in

cash and, where permitted, cash equivalents, including AAA-rated money market funds registered with the U.S. Securities

and Exchange Commission under Rule 2a-7 of the Investment Company Act of 1940. Interest income is earned on the

unremitted funds, which is included in Fiduciary investment income in the Consolidated Statements of Income. Interest

earned on fiduciary funds held is not accounted for under ASC 606, Revenue from Contracts with Customers.

Goodwill and Intangible Assets

Goodwill

Goodwill represents the excess of consideration transferred over the fair value of the net assets acquired in the acquisition

of a business. The Company recognizes goodwill as the amount of consideration transferred which cannot be assigned to

other tangible or intangible assets and liabilities.

The Company reviews goodwill for impairment at least annually, and whenever events or changes in circumstances

indicate that the carrying value of the reporting unit may not be recoverable. In the performance of the annual evaluation,

the Company also considers qualitative and quantitative developments between the date of the goodwill impairment review

and the fiscal year end to determine if an impairment should be recognized.

The Company reviews goodwill for impairment at the reporting unit level, which coincides with the operating segment,

Ryan Specialty. The determinations of impairment indicators and the fair value of the reporting unit are based on estimates

and assumptions related to the amount and timing of future cash flows and future interest rates. Such estimates and

assumptions could change in the future as more information becomes available, which could impact the amounts reported

and disclosed herein.

Intangible Assets

Intangible assets consist primarily of customer relationships. Customer relationships are amortized over their estimated

useful lives, ranging fromone tofifteen years, in proportion with the realization of their economic benefit. Generally, the

Company uses outside valuation specialists to value acquired intangible assets. Other intangible assets include trade names

and internally developed software, which are amortized over their estimated lives, typicallyone tothree years and between

four toseven years, respect ively. The Company hasno indefinite-lived intangible assets.

Equity Method Investment

The Company uses the equity method to account for its investment in a related party for which the Company has the ability

to exercise significant influence, but not control, over the investee’s operating and financial policies. The equity method

investment in related party is recorded at cost and adjusted to recognize the Company’s proportionate share of the

investee’s net income or loss. The Company’s proportionate share of the other comprehensive income or loss from equity

method investments is reflected on the Consolidated Statements of Comprehensive Income. The Company’s equity method

investment in a related party is evaluated for impairment whenever events or changes in circumstances indicate that the

carrying value of the assets may not be recoverable. If the impairment is determined to be other-than-temporary, the

Company will recognize an impairment loss equal to the difference between the expected realizable value and the carrying

value of the investment.

Leases

The Company evaluates contracts entered into to determine whether the contract involves the use of an asset. The

Company then evaluates whether it controls the use of the asset, which is determined by assessing whether it obtains

substantially all economic benefits from the use of the asset, and whether it has the right to direct the use of the asset. If

these criteria are met and a lease has been identified, the Company accounts for the contract under the requirements of ASC

842, Leases.

The Company’s leased assets consist primarily of real estate for occupied offices and office equipment. Certain of these

leases have options permitting renewals for additional periods or clauses allowing for early termination, and where those

are reasonably certain to be executed, they are recognized as a component of the initial lease term. All of the Company’s

real estate leases and office equipment leases are recognized as operating leases. The Company also subleases some real

estate properties to third parties, which are classified as operating leases. The Company recognizes lease payments for

short-term leases of twelve months or less on a straight-line basis over the lease term in the Consolidated Statements of

Income.

For leases in which an implicit rate is not provided in the contract, the Company uses an incremental borrowing rate based

on the information available at the lease commencement date in determining the present value of lease payments. The

Company does not account for separate lease components of a contract and its associated non-lease components as a single

lease component. Further, variable expenses related to real estate and equipment leases are expensed as incurred.

At the lease commencement for operating leases, the Company recognizes the total lease liability through the lease term as

the present value of all remaining payments, discounted by the rate determined at commencement on the Consolidated

Balance Sheets. Operating leases are included in Lease right-of-use assets, Current Operating lease liabilities, and Non-

current Operating lease liabilities on the Consolidated Balance Sheets. In the event the lease liability is remeasured due to a

change in the scope of, or the consideration for, a lease, an adjustment is made to the right-of-use asset. If a right-of-use

asset is impaired, the impairment charge is recognized within General and administrative expense in the Consolidated

Statements of Income.

Equity-Based Compensation

The Company issues equity-based awards to employees in the form of Restricted Stock, Restricted Stock Units (“RSUs”),

Performance Stock Units (“PSUs”), Stock Options, Restricted Common Units, Restricted LLC Units (“RLUs”),

Performance LLC Units (“PLUs”), and Class C Incentive Units. Compensation expense for equity awards is measured at

the grant date fair value. The grant date fair value of Restricted Stock and RSUs is based on the closing price of the

underlying stock the day prior to issuance. The grant date fair value of RLUs is valued consistently to RSUs less a discount

for the lower distributions that they are entitled to accrue. The grant date fair value of Stock Options is estimated using the

Black-Scholes option pricing model, and the grant date fair value of PSUs, PLUs, Restricted Common Units and Class C

Incentive Units is estimated using a Monte Carlo simulation based pricing model. These pricing models require

management to make assumptions with respect to the fair value of the equity awards on the grant date, including the

expected term of the award, the expected volatility of the Company’s stock based on a period of time generally

commensurate with the expected term of the award, risk-free interest rates, and expected dividend yields of the Company’s

Class A common stock, among other items including the Company’s Class A common stock price and taxable income

forecasts. These assumptions reflect the Company’s best estimates, but they involve inherent uncertainties based on market

conditions generally outside the control of the Company. As a result, if other assumptions are used, compensation expense

could be materially impacted.

The Company accounts for equity-based compensation in accordance with ASC 718, Compensation- Stock Compensation

(“ASC 718”). In accordance with ASC 718, compensation expense is measured at estimated fair value of the equity-based

awards and is expensed over the vesting period during which an employee provides service in exchange for the award.

Compensation expense is recognized using the graded vesting attribution method and forfeitures are accounted for as they

occur. Equity-based compensation expense is recorded in Compensation and benefits on the Consolidated Statements of

Income. See Note 11, Equity-Based Compensation, for additional information on the Company’s equity-based

compensation awards.

Earnings Per Share

Basic earnings per share is computed by dividing net earnings attributable to Ryan Specialty Holdings, Inc., by the number

of weighted average shares of Class A common stock outstanding during the period. Diluted earnings per share is

computed by dividing net earnings attributable to Ryan Specialty Holdings, Inc., by the number of weighted-average shares

of Class A common stock outstanding during the period after adjusting for the impact of securities that would have a

dilutive effect on earnings per share. See Note 12, Earnings Per Share, for additional information on dilutive securities.

Derivative Instruments and Hedging Activities

The Company uses derivative financial instruments to manage the risk profile of existing underlying exposures, including

changes in interest rates and foreign currency exchange rates. For cash flow hedges, the Company assesses the

effectiveness both at inception and on an on-going basis. For hedging derivatives that qualify as effective cash flow hedges,

the Company records the cumulative changes in the fair value of the financial instrument in Other comprehensive income

(loss). Amounts recorded in Other comprehensive income (loss) are reclassified into earnings in the periods in which

earnings are affected by the hedged cash flow. If a derivative is not designated as an accounting hedge, such as forward

contracts periodically used by the Company to limit foreign currency exchange rate exposure, the change in fair value is

recorded in earnings. The Company utilizes an interest rate cap for interest rate risk management purposes. The Company

amortizes the premium paid for the interest rate cap on a straight-line basis over the life of the instrument. The premium

amortization is recognized in Interest expense, net on the Consolidated Statements of Income. The Company recognizes

cash flows related to designated and non-designated hedges in the same section of the Consolidated Statement of Cash

Flows as the cash flows related to the item being hedged. The Company does not hold or issue derivative instruments for

trading or speculative purposes. See Note 13, Derivatives, for further discussion of derivative financial instruments.

Defined Contribution Plan

The Company offers a defined contribution retirement benefit plan, the Ryan Specialty Employee Savings Plan (the

“Savings Plan”), to all eligible U.S. employees, based on a minimum number of service hours in a year. Under the Savings

Plan, eligible employees may contribute a percentage of their compensation, subject to certain limitations. Further, the

Savings Plan authorizes the Company to make a discretionary matching contribution, which has historically equaled 50%

of each eligible employee’s contribution. The Company makes discretionary matching contributions throughout the year

and recognizes expense for the matching contribution in the period where requisite employee service is performed. The

Company recognized expense related to discretionary matching contributions of$25.3 million,$21.3 million, and$17.4

million for the years ended December 31, 2024,2023, and 2022, respectively, which was included in Compensation and

benefits on the Consolidated Statements of Income.

Deferred Compensation Plan

The Company offers a non-qualified deferred compensation plan to certain senior employees and members of management.

Under this plan, amounts deferred remain assets of the Company and are subject to the claims of the Company’s creditors

in the event of insolvency. Amounts deferred are not invested in any funds. However, the liability balance is updated to

reflect hypothetical interest, earnings, appreciation, losses, and depreciation that would be accrued or realized if the

deferred compensation amounts had been invested in the applicable benchmark investments. Changes in the value of

deferred amounts held are recognized within Compensation and benefits in the Consolidated Statements of Income. The

Company recognized liabilities for employee deferrals, inclusive of changes in the value of deferred amounts held, of$5.2

million and$3.5 million in Current Accrued compensation as of December 31, 2024 and 2023, respectively, and$36.5

million and$22.4 million in Non-current Accrued compensation on the Consolidated Balance Sheets as of December 31,

2024 and 2023, respectively.

Non-Controlling Interests

As noted above, the Company consolidates the financial results of the LLC; therefore, it reports non-controlling interests

based on the LLC Common Units not owned by the Company on the Consolidated Balance Sheets. Net income and other

comprehensive income (loss) are attributed to the non-controlling interests based on the weighted average LLC Common

Units outstanding during the period and are presented on the Consolidated Statements of Income and Comprehensive

Income. Refer to Note 10, Stockholders’ Equity, for more information.

The non-controlling interest holders may, subject to certain exceptions, exchange some or all of their LLC Common Units

for newly-issued shares of Class A common stock on aone-for-onebasis, or for cash, at the Company’s election

(determined by a majority of the Company’s directors who are disinterested) and only to the extent that the Company has

received cash proceeds pursuant to a secondary offering. As any redemption settled in cash would be limited to proceeds

received from the sale of new permanent equity securities, the Non-controlling interests are classified as permanent equity

on the Consolidated Balance Sheets.

Captive Insurance Cells

Through acquisitions, the Company has an ownership interest inthree entities that hold segregated account protected cell

captives. These entities are structured with protected cell captives for each insured (“Captive Cells”) and the core regulated

companies (“Core Companies”). The Core Companies are owned and operated by the Company, and are not exposed to the

insurance and investment risks that the Captive Cells are designed to create and distribute on behalf of the insureds. The

Company has a variable interest in the Core Companies due to its ownership interest, however, as the Core Companies are

not exposed to the variability of the Captive Cells, only the activity of the regulated Core Companies is recorded in the

Company’s consolidated financial statements, including cash and any expenses incurred to operate the Captive Cells.

Litigation and Contingent Liabilities

The Company is subject to various legal actions related to claims, lawsuits, and proceedings incident to the nature of the

business. The Company records liabilities for loss contingencies when it is probable that a liability has been incurred on or

before the balance sheet date and the amount of the liability can be reasonably estimated. The Company does not discount

such contingent liabilities and recognizes related legal costs, such as fees and expenses of external counsel and other

service providers, as period expenses when incurred. Loss contingencies are recorded within Accounts payable and accrued

liabilities on the Consolidated Balance Sheets. Significant management judgment is required to estimate the amounts of

such contingent liabilities. The Company records loss recoveries from E&O insurance coverage, up to the amount of the

financial statement loss incurred, when the realization of the indemnity for a claim presented under the Company’s E&O

insurance coverage is deemed probable in Other current assets on the Consolidated Balance Sheets. In order to assess

potential liabilities and any recoveries, the Company analyzes the litigation exposure based upon available information,

including consultation with counsel handling the defense of these matters. As these liabilities are uncertain by their nature,

the recorded amounts may change due to a variety of factors, including new developments or changes in the approach, such

as changing the settlement strategy as applicable to a matter.

Foreign Currency Translation

The Company assigns functional currencies to its foreign operations, which are generally the currencies of the local

operating environment. Balances denominated in non-functional currency are remeasured to the functional currency using

current exchange rates, and the resulting foreign exchange gains or losses are reflected in earnings. Functional currency

balances are then translated into the reporting currency (i.e., USD) using (i) exchange rates at the balance sheet date for

items reported as assets or liabilities on the Consolidated Balance Sheets, (ii) historical rates for items reported in the

Consolidated Statements of Stockholders’ Equity other than retained earnings, and (iii) average exchange rates for items

recorded in earnings and included in retained earnings. The resulting change in unrealized translation gains or losses is a

component of Accumulated other comprehensive income within the Consolidated Balance Sheets.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are

recognized for the future tax consequences attributable to differences between the financial statement carrying values of

existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted

tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect of a

change in tax rates on deferred tax assets and deferred tax liabilities is recognized in income in the period that includes the

enactment date.

The Company recognizes deferred tax assets to the extent that it is believed that these assets are more likely than not to be

realized. In making such a determination, the Company considers all available positive and negative evidence, including

future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies,

carryback potential if permitted under the tax law, and results of recent operations. A valuation allowance is provided if it

is determined that it is more likely than not that the deferred tax asset will not be realized.

The Company evaluates and accounts for uncertain tax positions inaccordance with ASC 740, Income Taxes, using a two-

step approach. Recognition (step one) occurs when the Company concludes that a tax position, based solely on its technical

merits, is more likely than not to be sustainable upon examination. Measurement (step two) determines the amount of tax

benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full

knowledge of all relevant information. Derecognition of a tax position that was previously recognized would occur if the

Company subsequently determines that a tax position no longer meets the more likely than not threshold of being

sustained. The Company records interest, and penalties where applicable, net of any applicable related income tax benefit,

on potential income tax contingencies as a component of Income tax expense in the Consolidated Statements of Income.

Holders of the LLC Common Units, including the Company, incur U.S. federal, state, and local income taxes on their share

of any taxable income of the LLC. The LLC Operating Agreement provides for pro rata cash distributions (“Members’ Tax

Distributions”) to the holders of the LLC Common Units in an amount generally calculated to provide each holder of LLC

Common Units with sufficient cash to cover their tax liability in respect of the LLC Common Units. In general, these

Members’ Tax Distributions are computed based on the LLC’s estimated taxable income, multiplied by an assumed tax rate

as set forth in the LLC Operating Agreement.

Tax Receivable Agreement (TRA)

The Company is party to a TRA with current and certain former LLC Unitholders. The TRA provides for the payment by

the Company to the current and certain former LLC Unitholders of 85% of the amount of net cash savings, if any, in U.S.

federal, state, and local income taxes the Company actually realizes (or under certain circumstances are deemed to realize)

from (i) certain increases in the tax basis of the assets of the LLC resulting from purchases or exchanges of LLC Common

Units (“Exchange Tax Attributes”), (ii) certain tax attributes of the LLC that existed prior to the IPO (“Pre-IPO M&A Tax

Attributes”), (iii) certain favorable “remedial” partnership tax allocations to which the Company becomes entitled (if any),

and (iv) certain other tax benefits related to the Company entering into the TRA, including tax benefits attributable to

payments that the Company makes under the TRA (“TRA Payment Tax Attributes”).

The Company accounts for amounts payable under the TRA in accordance with ASC 450, Contingencies. The amounts

payable under the TRA will vary depending upon a number of factors, including the timing of exchanges by the LLC

Unitholders, the amount of gain recognized by the LLC Unitholders, the amount and timing of the taxable income the

Company generates in the future, and the federal tax rates then applicable. Actual tax benefits realized by the Company

may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the agreement. Any

such changes in these factors or changes in the Company’s determination of the need for a valuation allowance related to

the tax benefits acquired under the TRA could adjust the Tax Receivable Agreement liabilities recognized on the

The Company accounts for the effects of the increases in tax basis and associated liabilities under the TRA arising from

exchanges with respect to Exchange Tax Attributes and TRA Payment Attributes (i) by recording an increase in deferred

tax assets for the estimated income tax effects of the increases in tax basis based on the enacted federal and state tax rates at

the date of the exchange, (ii) to the extent it is estimated that the Company will not realize the full benefit represented by

the deferred tax asset, based on an analysis that will consider, among other things, our expectation of future earnings, by

reducing the deferred tax asset with a valuation allowance, and (iii) by recording an offsetting increase in the Tax

Receivable Agreement liability for 85% of the realizable tax benefit and an increase in Additional paid-in capital for the

remaining 15% of the realizable tax benefit on the Consolidated Balance Sheets.

The Company accounts for the associated liability under the TRA arising from exchanges with respect to the Pre-IPO

M&A Tax Attributes by recording an increase in the Tax Receivable Agreement liability for 85% of the realizable tax

benefits associated with the Pre-IPO M&A Tax Attributes with an offsetting decrease to Additional paid-in capital on the

Subsequent changes to the initial establishment of the increases in deferred tax assets and Tax Receivable Agreement

liability between reporting periods will be recognized in the Consolidated Statements of Stockholders’ Equity as the

exchanges represent transactions among shareholders. Subsequent changesin the fair value of the Tax Receivable

Agreement liabilities between reporting periods, as well as any interest accrued on the TRA between the Company’s annual

tax filing date and the TRA payment date, are recognized in the Consolidated Statements of Income. In the unlikely event

of an early termination of the TRA, either due to Company default or a change of control, the Company is required to pay

to each holder of the TRA an early termination payment equal to the discounted present value of all unpaid TRA payments.

Recently Issued Accounting Pronouncements

New Accounting Pronouncements Recently Adopted

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280) — Improvements to Reportable

Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. This

ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning

after December 15, 2024, with early adoption permitted. The amendments in this ASU should be applied retrospectively to

all prior periods presented in the financial statements. The Company adopted this standard retrospectively as of December

31, 2024, resulting in incremental disclosures on segment information. See Note 20, Segment Reporting, for additional

information on the Company’s segment reporting.

In March 2024, the FASB issued ASU 2024-01 Compensation — Stock Compensation (Topic 718) — Scope Application of

Profits Interest and Similar Awards, which provides illustrative examples to demonstrate how an entity should apply the

scope guidance in paragraph 718-10-15-3 to determine whether profits interests and similar awards should be accounted for

in accordance with Topic 718. This ASU is effective for public companies for fiscal years beginning after December 15,

2024, but early adoption is permitted. The Company adopted this standard retrospectively on January 1, 2024, with no

material impact to the consolidated financial statements or disclosures.

In March 2024, the FASB issued ASU 2024-02 Codification Improvements — Amendments to Remove References to the

Concept Statements, which removes references to various FASB Concepts Statements in order to simplify the Codification

and draw a distinction between authoritative and nonauthoritative literature. This ASU is effective for public companies for

fiscal years beginning after December 15, 2024, but early adoption is permitted. The Company adopted this standard

prospectively on January 1, 2024, with no material impact to the consolidated financial statements or disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740) — Improvements to Income Tax Disclosures,

which includes amendments that further enhance income tax disclosures, primarily through standardization and

disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This ASU is effective for annual

periods beginning after December 15, 2024, with early adoption permitted. The amendments in this ASU should be applied

on a prospective basis, however, retrospective application is permitted. The Company is currently evaluating the impact of

adopting this ASU on its income tax disclosures.

In November 2024, the FASB issued ASU 2024-03 Income Statement — Reporting Comprehensive Income — Expense

Disaggregation Disclosures (Subtopic 220-40) — Disaggregation of Income Statement Expenses, which requires the

disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial

statements. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal

years beginning after December 15, 2027, but early adoption is permitted. The amendments in this ASU may be applied

either prospectively or retrospectively. The Company is currently evaluating the impact of adopting this ASU on its

disclosures.

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

The following table summarizes revenue from contracts with customers by Specialty:

Contract Balances

The contract assets balance, which is included within Commissions and fees receivable –net on the Consolidated Balance

Sheets, was$35.6 million and$13.4 million as of December 31, 2024 and 2023, respectively. The contract liability balance

related to deferred revenue, which is included in Accounts payable and accrued liabilities on the Consolidated Balance

Sheets, was$8.7 million and$7.8 million as of December 31, 2024 and 2023, respectively. During the year ended

December 31, 2024,$7.5 million of the contract liabilities outstanding as of December 31, 2023, were recognized in

revenue.

4. MERGERS AND ACQUISITIONS

2024 Acquisitions

On May 1, 2024, the Company completed the acquisition of Castel Underwriting Agencies Limited (“Castel”), a managing

general underwriting platform headquartered in London, England, for cash consideration of$247.6 million,$2.2 million of

RYAN Class A common stock, and contingently returnable consideration of$4.9 million. During the year ended

December 31, 2024, measurement period adjustments related to deferred tax liabilities of$1.6 million, taxes payable of

$0.9 million, and working capital of$0.5 million were recognizedas a net $2.0 million decrease in Goodwill on the

On August 30, 2024, the Company completed the acquisition of US Assure Insurance Services of Florida, Inc. (“US

Assure”), a program specializing in builder’s risk insurance headquartered in Jacksonville, Florida, for cash consideration

of$1,079.8 million and contingent consideration of$103.8 million. During the year ended December 31, 2024, a

measurement period adjustment related to working capitalof $5.2 million was recognized as an increase in Goodwill on the

On September 1, 2024, the Company completed the acquisition of certain assets of Greenhill Underwriting Insurance

Services, LLC (“Greenhill”), an MGU focused on the allied health industry headquartered in Houston, Texas, for cash

consideration of$11.7 million. During the year ended December 31, 2024, measurement period adjustments related to

working capital of$0.4 million and the initial valuation of customer relationships of$0.1 million were recognized as a net

$0.3 million increase in Goodwill on the Consolidated Balance Sheets.

On September 13, 2024, the Company completed the acquisition of the Property and Casualty (“P&C”) MGUs owned by

Ethos Specialty Insurance, LLC (“Ethos P&C”) for cash consideration of$44.0 million. Ethos P&Cis composed ofeight

programs which underwrite on behalf of insurance carriers.

On October 1, 2024, the Company completed the acquisition of certain assets of EverSports & Entertainment Insurance,

Inc. (“EverSports”), an MGU focused on sports, leisure, and entertainment headquartered in Carmel, Indiana, for$43.1

million of cash consideration. Total consideration for this acquisition also includes contingent consideration, however, the

contingent consideration value was de minimis as of the acquisition date.

On November 4, 2024, the Company completed the acquisition of Innovisk Capital Partners (“Innovisk”), which is

composed ofseven specialty MGUs headquartered in London, England, for cash consideration of$426.8 million.

The$103.8 million of contingent consideration liabilities and$4.9 million of contingently returnable consideration

established for the acquisitions that occurred during the year ended December 31, 2024, were measured at the estimated

acquisition date fair value and were non-cash investing transactions. These arrangements are based on the individual

businesses’ revenue or EBITDA targets, or both, over the next two to three fiscal years.

The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired during the year

ended December 31, 2024, as of the date of each acquisition and includes any measurement period adjustments:

1 The customer relationships acquired during the year ended December 31, 2024, have a weighted average amortization

period of 13.4 years.

Estimates and assumptions used in the acquisition valuations are subject to change within the measurement period up to

one year from each acquisition date. Estimated tax deductible goodwill of$735.8 million was generated as a result of these

acquisitions. The Company recognized acquisition-related expenses, which include advisory, legal, accounting, valuation,

and other costs related to diligence, for the acquisitions above of$19.1 million during the year ended December 31, 2024,

in General and administrative expense on the Consolidated Statements of Income. In conjunction with the closing of the

Castel acquisition, the deal-contingent foreign currency forward (the “Deal-Contingent Forward”), as described in Note 13,

Derivatives, was settled.

The Company recognized an aggregate$102.8 million of revenue related to the 2024 acquisitions above from their

respective acquisition dates during the year ended December 31, 2024.

2023 Acquisitions

On January 3, 2023, the Company completed the acquisition of certain assets of Griffin Underwriting Services (“Griffin”),

a binding authority specialist and wholesale insurance broker headquartered in Bellevue, Washington, for cash

consideration of$115.5 million.

On July 1, 2023, the Company completed the acquisitions of certain assets of ACE Benefit Partners, Inc. (“ACE”), a

medical stop loss general agent headquartered in Eagle, Idaho, and Point6 Healthcare, LLC (“Point6”), a distributor of

medical stop loss insurance on behalf of retail brokers and third-party administrators headquartered in Plano, Texas, for an

aggregate$46.8 million of cash consideration and$2.3 million of contingent consideration. During the year ended

December 31, 2024, a measurement period adjustment related to the initial valuation of contingent consideration of$0.6

million was recognized as an increase in Goodwill on the Consolidated Balance Sheets.

On July 3, 2023, the Company completed the acquisition of Socius Insurance Services (“Socius”), a national wholesale

insurance broker headquartered in Northern California, for$253.5 million of cash consideration,$5.8 million of contingent

consideration, and$2.7 million of RYAN Class A common stock.

On December 1, 2023, the Company completed the acquisition of AccuRisk Holdings, LLC (“AccuRisk”), a medical stop

loss managing general underwriter headquartered in Chicago, Illinois, for$98.3 million of cash consideration. During the

year ended December 31, 2024, measurement period adjustments related to the initial valuation of contingent consideration

of$0.3 million and deferred tax assets of$0.4 million were recognized as increases in Goodwill on the Consolidated

The Company recognized acquisition-related expenses, which include advisory, legal, accounting, valuation, and other

costs related to diligence, for the 2023 acquisitions above of$7.1 million during the year ended December 31, 2023, in

General and administrative expense on the Consolidated Statements of Income.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the combined results of operations of the Company as if

the 2024 and 2023 acquisitions, excluding Griffin as it is already included in the results of all periods presented, all

occurred on January 1, 2023. The unaudited pro forma financial information is presented for informational purposes only

and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place on the

date indicated or of results that may occur in thefuture. The pre-acquisition Castel and US Assure results included in the

pro forma figures below contain acquisition-related expenses that were not considered pro forma adjustments for the

Company.

The unaudited pro forma financial information includes adjustments of (i) incremental amortization expense on intangible

assets acquired of$77.0 million and$146.4 million for the years ended December 31, 2024 and 2023, respectively, (ii) a

decrease of$24.0 million and an increase of$8.4 million in transaction costs for the years ended December 31, 2024 and

2023, respectively, (iii) incremental financing costs and interest expense resulting from the debt activity related to the US

Assure and Innovisk acquisitions of$20.6 million and$99.0 million for the years ended December 31, 2024 and 2023,

respectively, (iv) an increase of$9.5 million of income tax expense for the year ended December 31, 2023, related to the

2024 CCRs (as defined in Note 18, Income Taxes), with an equal decrease in income tax expense for the year ended

December 31, 2024, and (v) a reduction intax expenses related to the pro forma adjustments of$8.4 million and$26.2

million for the years ended December 31, 2024 and 2023, respectively.

Total consideration for certain acquisitions includes contingent consideration or contingently returnable consideration,

which is generally based on the EBITDA or revenue of the acquired business following a defined period after purchase.

Further information regarding fair value measurements of contingent consideration and contingently returnable

consideration is detailed in Note 15, Fair Value Measurements. The Company recognizes income or loss for the changes in

fair value of estimated contingent consideration and contingently returnable consideration within Change in contingent

consideration, and recognizes accretion of the discount on these assets or liabilities within Interest expense, net, on the

Consolidated Statements of Income. The table below summarizes the amounts recognized:

As of December 31, 2024, the aggregate amount of maximum consideration related to acquisitions was$563.1 million

related to contingent consideration and$18.8 million related to contingently returnable consideration.

5. RESTRUCTURING

In February 2023, the Company initiated the ACCELERATE 2025 program to enable continued growth, drive innovation,

and deliver sustainable productivity improvements over the long term. The restructuring plan aimed to reduce costs and

increase efficiencies through a focus on optimizing the Company’s operations and technology. In its expanded form, the

restructuring plan was expected to incur total restructuring costs of approximately$110.0 million through December 31,

2024, and is expected to generate annual savings of approximately$60.0 million in 2025. The total expected costs of the

plan included$55.0 million related to operations and technology optimization,$40.0 million related to employee

compensation and benefits, and$15.0 million related to asset impairment and other termination costs. The plan was

completed on December 31, 2024, as anticipated.

The table below presents the restructuring expense incurred:

During the years ended December 31, 2024 and 2023, the Company recognized restructuring expenses of$39.9 million and

$22.6 million, respectively, including contractor costs, in Compensation and benefits, and$19.8 million and$25.8 million,

respectively in General and administrative expense on the Consolidated Statements of Income.

The table below presents a summary of changes in the restructuring liability:

Accrued costs in the table above include both costs expensed and capitalized during the period. As of December 31, 2024

and 2023,$15.3 million and$5.3 million, respectively, of the restructuring liability was included in Accounts payable and

accrued liabilities and$5.5 million and$1.7 million, respectively, was included in Current Accrued compensation on the

6. RECEIVABLES AND OTHER CURRENT ASSETS

Receivables

The Company had receivables of$389.8 million and$294.2 million outstanding as of December 31, 2024 and 2023,

respectively, which were recognized within Commissions and fees receivable – net on the Consolidated Balance Sheets.

Commission and fees receivable is net of an allowance for credit losses. The Company’s allowance for credit losses is

based on a combination of factors, including evaluation of historical write-offs, current economic conditions, aging of

balances, and other qualitative and quantitative analyses.

The following table provides a summary of changes in the Company’s allowance for expected credit losses:

Other Current Assets

Major classes of other current assets consisted of the following:

Other current receivables contain service receivables from Geneva Re, Ltd. See Note 17, Related Parties, for further

information regarding related parties. See Note 16, Commitments and Contingencies, for further information on the

insurance recoverable. See Note 13, Derivatives, for further information on the interest rate cap.

7. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table provides a summary of goodwill activity:

The net carrying amounts of finite-lived intangible assets are shown in the table below:

The cost of internally developed software in development but not yet placed in service was$30.8 million and$18.1 million

as of December 31, 2024 and 2023, respectively.

The aggregate amortization expense from finite-lived intangible assets was$157.8 million,$106.8 million, and$103.6

million for the years ended December 31, 2024,2023, and 2022, respectively. The estimated future amortization for finite-

lived intangible assets as of December 31, 2024, was as follows:

8. LEASES

The Company has various non-cancelable operating leases with various terms through September 2038, primarily for office

space and office equipment. The following table provides additional information about the Company’s leases:

The estimated future minimum payments of operating leases as of December 31, 2024, were as follows:

The Company hadthree leases with inception dates prior to December 31, 2024, that had not yet commenced as of

December 31, 2024, for a total future estimated lease liability of$12.3 million.

9. DEBT

Substantially all of the Company’s debt is carried at outstanding principal balance, less debt issuance costs and any

unamortized discount. The following table is a summary of the Company’s outstanding debt:

The future maturities of long-term debt, which excludes premium financing notes, as of December 31, 2024, were as

Term Loan

The original principal of the Term Loan was$1,650.0 million. As a result of the Seventh Amendment, as defined and

described below, the principal was increased to$1,700.0 million. As of December 31, 2024,$1,700.0 million of the

principal was outstanding,$0.3 million of interest was accrued, and the related unamortized deferred issuance costs were

$27.8 million. As of December 31, 2023,$1,596.4 million of the principal was outstanding,$1.1 million of interest was

accrued, and the related unamortized deferred issuance costs were$32.8 million.

On January 19, 2024, the Company entered into the fifth amendment (the “Fifth Amendment”) to the Credit Agreement. As

a result of the Fifth Amendment, the applicable interest rate of the Term Loan was reduced from Adjusted Term SOFR +

3.00% to Adjusted Term SOFR +2.75% and is no longer subject to a credit spread adjustment. All other material

provisions remain unchanged. The portion of the debt related to the lenders that opted out of the repricing was considered

extinguished and their portion of the legacy debt issuance costs of$0.4 million was written off during the year ended

December 31, 2024, which was recognized in Interest expense, net on the Consolidated Statements of Income.

Additionally, the Company incurred third-party fees related to the repricing of$1.9 million for the year ended

December 31, 2024, which were recognized in Other non-operating loss on the Consolidated Statements of Income.

On September 13, 2024, the Company entered into the seventh amendment (the “Seventh Amendment”) to the Credit

Agreement. As a result of the Seventh Amendment, the principal of the Term Loan was increased to$1,700.0 million, the

applicable interest rate of the Term Loan was reduced from Adjusted Term SOFR +2.75% to Adjusted Term SOFR +

2.25%, the 0.75% floor on Adjusted Term SOFR was reduced to 0.00%, and the maturity date was extended to

September 13, 2031. Incremental debt issuance costs of$11.1 million were incurred and will be amortized over the

extended term of the loan. The portion of the debt related to the lenders that opted out of the Seventh Amendment was

considered extinguished and their portion of the legacy debt issuance costs of$8.3 million was written off during the year

ended December 31, 2024, which was recognized in Interest expense, net on the Consolidated Statements of Income.

Additionally, the Company incurred third-party fees related to the Seventh Amendment of$16.2 million for the year ended

December 31, 2024, which were recognized in Other non-operating loss on the Consolidated Statements of Income.

Revolving Credit Facility

On July 30, 2024, the Company entered into the sixth amendment (the “Sixth Amendment”) to the Credit Agreement,

which provided for an increase in the borrowing capacity of the Revolving Credit Facility from$600.0 million to$1,400.0

million. The Sixth Amendment also extended the maturity date of the Revolving Credit Facility to July 30, 2029, and

reduced the applicable interest rate from Adjusted Term SOFR + up to 3.00% to Adjusted Term SOFR + up to 2.50%.

Incremental debt issuance costs of$7.9 million were incurred and will be amortized over the extended term of the facility.

The portion of the debt related to the lender that opted out of the Sixth Amendment was considered extinguished and its

portion of the legacy debt issuance costs of$0.1 million was written off during the year ended December 31, 2024, which

was recognized in Interest expense, net on the Consolidated Statements of Income.

The Revolving Credit Facility had a borrowing capacity of$1,400.0 million and$600.0 million as of December 31, 2024

and 2023, respectively. Due to the nature of the instrument, the deferred issuance costs related to the facility of$9.6 million

and$4.1 million were included in Other non-current assets on the Consolidated Balance Sheets as of December 31, 2024

and 2023, respectively. The commitments available to be borrowed under the Revolving Credit Facility were$1,399.7

million and$599.7 million as of December 31, 2024 and 2023, respectively, as the facility was reduced by$0.3 million of

undrawn letters of credit.

The Company pays a commitment fee on undrawn amounts under the facility of 0.25% -0.50%. As of December 31, 2024

and 2023, the Company accrued$1.2 million and$0.4 million, respectively, of unpaid commitment fees related to the

Revolving Credit Facility in Short-term debt and current portion of long-term debt on the Consolidated Balance Sheets.

Borrowings under the Term Loan and the Revolving Credit Facility are secured by a first-priority lien and security interest

in substantially all of the assets, subject to certain exceptions, of existing and future material domestic subsidiaries of the

Company.

Senior Secured Notes due 2030

On February 3, 2022, the LLC issued$400.0 million of Senior Secured Notes. As of December 31, 2024 and 2023, accrued

interest on the notes was$7.3 million and the related unamortized deferred issuance costs were$5.6 million and$6.6

million, respectively.

Senior Secured Notes due 2032

On September 19, 2024, the LLC issued$600.0 million of Senior Secured Notes. On December 9, 2024, the LLC issued an

additional$600.0 million aggregate principal amount of Senior Secured Notes at a price of 99.5% of their face value plus

accrued interest from September 19, 2024. The notes issued in December 2024 were issued as additional notes under the

same indenture as the notes that were issued in September 2024 and, as such, form a single series and trade interchangeably

with the previously issued senior secured notes due 2032. As of December 31, 2024, accrued interest on the notes was

$20.0 million and the related unamortized deferred issuance costs, including discount, were$21.8 million.

Bridge Facility

On July 31, 2024, the Company entered into a 364-day unsecured bridge term loan facility (the “Bridge Facility”), which

provided unsecured bridge financing of up to$500.0 million to finance a portion of the US Assure acquisition price. In lieu

of drawing under the Bridge Facility, the Company borrowed under the Revolving Credit Facility. Concurrent with the

completion of the US Assure acquisition on August 30, 2024, the Bridge Facility was terminated, and the Company

recognized$4.1 million of related deferred financing costs in Interest expense, net on the Consolidated Statements of

Income during the year ended December 31, 2024.

Subsidiary Units Subject to Mandatory Redemption

Ryan Re Underwriting Managers, LLC (“Ryan Re”) has the obligation to settle its outstanding preferred units in the

amount of the aggregate unreturned capital and unpaid dividends on June 13, 2034,15 years from original issuance. As

these units are mandatorily redeemable, they are classified as Long-term debt on the Consolidated Balance Sheets. The

historical cost of the units is$3.3 million, which was valued using an implicit rate of 9.8%. Accretion of the discount using

the implicit rate is recognized as Interest expense, net in the Consolidated Statements of Income. As of December 31, 2024

and 2023, interest accrued on these units was $0.1 million and$1.9 million, respectively.$2.1 million of accrued return on

the Ryan Re preferred units was paid during the year ended December 31, 2024. See Note 17, Related Parties, for further

information on Ryan Re.

10. STOCKHOLDERS’ EQUITY

Ryan Specialty’s amended and restated certificate of incorporation authorizes the issuance of up to 1,000,000,000 shares of

Class A common stock,1,000,000,000 shares of Class B common stock,10,000,000 shares of Class X common stock, and

500,000,000 shares of preferred stock, each having a par value of$0.001 per share.

The New LLC Operating Agreement requires that the Company and the LLC at all times maintain aone-to-one ratio

between the number of shares of Class A common stock issued by the Company and the number of LLC Common Units

owned by the Company, except as otherwise determined by the Company.

Class A and Class B Common Stock

Each share of Class A common stock is entitled toone vote per share. Each share of Class B common stock is initially

entitled to 10 votes per share but, upon the occurrence of certain events as set forth in the Company’s amended and restated

certificate of incorporation, will be entitled toone vote per share in the future. All holders of Class A common stock and

Class B common stock vote together as a single class except as otherwise required by applicable law or our amended and

restated certificate of incorporation. Holders of Class B common stock do not have any right to receive dividends or

distributions upon the liquidation or winding up of the Company.

In accordance with the New LLC Operating Agreement, the LLC Unitholders are entitled to exchange LLC Common Units

for shares of Class A common stock, in accordance with the LLC Operating Agreement, or, at the Company’s election, for

cash from a substantially concurrent public offering or private sale (based on the price of our Class A common stock in

such public offering or private sale). The LLC Unitholders are also required to deliver to the Company an equivalent

number of shares of Class B common stock to effectuate such an exchange. Any shares of Class B common stock so

delivered will be canceled. Shares of Class B common stock are not issued for Class C Incentive Units that are exchanged

for LLC Common Units as these LLC Common Units are immediately exchanged for Class A common stock as discussed

in Note 11, Equity-Based Compensation.

Class X Common Stock

There wereno shares of Class X common stock outstanding as of December 31, 2024 or 2023. Shares of Class X common

stock have no economic or voting rights.

Preferred Stock

There wereno shares of preferred stock outstanding as of December 31, 2024 or 2023. Under the terms of the amended and

restated certificate of incorporation, the Board is authorized to direct the Company to issue shares of preferred stock in one

or more series without stockholder approval. The Board has the discretion to determine the rights, preferences, privileges,

and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges, and liquidation

preferences, of each series of preferred stock.

Dividends

During the year ended December 31, 2024, the Company’s Board of Directors declared a regular quarterly cash dividend of

$0.11 per share on the Company’s outstanding Class A common stock. During the year ended December 31, 2024,$80.2

million of dividends, consisting of$27.1 million related to the special Q1 2024 dividend and$53.1 million related to

regular quarterly dividends, was paid on Class A common stock.

Non-controlling Interests

The Company is the sole managing member of the LLC. As a result, the Company consolidates the LLC in its consolidated

financial statements, resulting in non-controlling interests related to the LLC Common Units not held by the Company. As

of December 31, 2024 and 2023, the Company owned 47.9% and 45.6%, respectively, of the economic interests in the

LLC, while the non-controlling interest holders owned the remaining 52.1% and 54.4%, respectively, of the economic

interests in the LLC.

Weighted average ownership percentages for the applicable reporting periods are used to attribute net income and other

comprehensive income (loss) to the Company and the non-controlling interest holders. The non-controlling interest

holders’ weighted average ownership percentage was 52.0%,56.1%, and 57.1% for the years ended December 31, 2024,

2023, and 2022, respectively.

During the year ended December 31, 2024, the Company declared a regular quarterly cash distribution of$0.04 per unit on

the LLC’s outstanding LLC Common Units. During the year ended December 31, 2024,$22.2 million in distributions were

paid to the non-controlling interest holders of the LLC Common Units

11. EQUITY-BASED COMPENSATION

The Ryan Specialty Holdings, Inc., 2021 Omnibus Incentive Plan (the “Omnibus Plan”) governs, among other things, the

types of awards the Company can grant to employees as equity-based compensation awards. The Omnibus Plan provides

for potential grants of the following awards: (i) stock options, (ii) stock appreciation rights, (iii) restricted stock awards,

(iv) performance awards, (v) other stock-based awards, (vi) other cash-based awards, and (vii) analogous equity awards

made in equity of the LLC.

IPO-Related Awards

As a result of the Organizational Transactions, pre-IPO holders of LLC Units that were granted as incentive awards, which

had historically been classified as equity and vested pro rata over five years, were required to exchange their LLC Units for

either Restricted Stock or Restricted Common Units. Additionally, Reload Options or Reload Class C Incentive Units were

issued to employees in order to protect against the dilution of their existing awards upon exchange to the new awards.

Separately, certain employees were granted one or more of the following new awards: (i)RSUs, (ii) Staking Options, (iii)

RLUs, or (iv) Staking Class C Incentive Units. The terms of these awards are described below. All awards granted as part

of the Organizational Transactions and the IPO are subject to non-linear transfer restrictions for at least thefive-year period

following the IPO.

Incentive Awards

As part of the Company’s annual compensation process, the Company issues certain employees and directors equity-based

compensation awards (“Incentive Awards”). Additionally, the Company offers Incentive Awards to certain new hires.

These Incentive Awards typically take the form of (i) RSUs, (ii) RLUs, (iii) Class C Incentive Units, (iv) Stock Options,

(v)PSUs, and (vi) PLUs. The terms of these awards are described below.

Restricted Stock and Restricted Common Units

As part of the Organizational Transactions, certain existing employee unitholders were granted Restricted Stock or

Restricted Common Units in exchange for their LLC Units. The Restricted Stock and Restricted Common Units follow the

vesting schedule of the LLC Units for which they were exchanged. LLC Units historically vested pro rata over 5 years.

Restricted Stock Units (RSUs)

IPO RSUs

Related to the IPO, the Company granted RSUs to certain employees. The IPO RSUs vest either pro rata over 5 years from

the grant date or over 10 years from the grant date, with 10% vesting in each of years 3 through 9 and 30% vesting in year

Incentive RSUs

As part of the Company’s compensation process, the Company issues Incentive RSUs to certain employees. The Incentive

RSUs vest either 100% 3 or 5 years from the grant date, pro rata over 3 or 5 years from the grant date, over 5 years from

the grant date, with one-third of the grant vesting in each of years 3,4 and 5, or over 7 years from the grant date, with 20%

vesting in each of years 3 through 7.

Upon vesting, RSUs automatically convert on aone-for-one basis into Class A common stock.

The weighted-average grant date fair value of Incentive RSUs granted during the years ended December 31, 2023 and

2022, was$41.37 and$34.63, respectively. The fair value of RSUs vested during the years ended December 31, 2024,

2023, and 2022, was$46.2 million,$19.8 million, and$19.7 million, respectively.

Stock Options

Reload and Staking Options

As part of the Organizational Transactions and IPO, certain employees were granted Reload Options or Staking Options

that entitle the award holder to future purchases of Class A common stock, on aone-for-one basis, at the IPO price of

$23.50. The Reload Options vest either 100% 3 years from the grant date or over 5 years from the grant date, with one-

third of the grant vesting in each of years 3,4 and 5. In general, vested Reload Options are exercisable up to the tenth

anniversary of the grant date. The Staking Options vest over 10 years from the grant date, with 10% vesting in each of

years 3 through 9 and 30% vesting in year 10. In general, vested Staking Options are exercisable up to the eleventh

anniversary of the grant date.

Incentive Options

As part of the Company’s compensation process, the Company may issue Incentive Options to certain employees that

entitle the award holder to future purchases of Class A common stock, on aone-for-one basis, at the respective exercise

prices. The Incentive Options vest either over 5 years from the grant date, with one-third of the grant vesting in each of

years 3,4 and 5 or pro rata over 7 years from the grant date. In general, vested Incentive Options are exercisable up to the

tenth anniversary of the grant date.

1 As the Reload and Staking Options were one-time grants at the IPO, the weighted average exercise price for any

movements in these awards will perpetually be$23.50. As such, the values are not presented in the table above.

The fair valuesof Incentive Options granted were determined using the Black-Scholes option pricing model with the

following assumptions:

There wereno Incentive Options granted during the year ended December 31, 2023.

The use of a valuation model for the Options requires management to make certain assumptions with respect to selected

model inputs. Expected volatility was calculated based on the observed volatility for comparable companies. The expected

times to maturity were based on the weighted-average vesting terms and contractual terms of the awards. The risk-free

interest rates were based on U.S. Treasury rates commensurate with the expected life of the respective award. The dividend

yields were based on the Company’s expected dividend rates.

As of December 31, 2024, there were 6,666 and 1,557,285 exercisable Staking and Reload Options, respectively, andno

exercisable Incentive Options. The aggregate intrinsic values and weighted average remaining contractual terms of Stock

Options outstanding and exercisable as of December 31, 2024, were as follows:

Restricted LLC Units (RLUs)

IPO RLUs

Related to the IPO, the Company granted RLUs to certain employees that vest either pro rata over 5 years from the grant

date or over 10 years from the grant date, with 10% vesting in each of years 3 through 9 and 30% vesting in year 10.

Incentive RLUs

As part of the Company’s compensation process, the Company issues Incentive RLUs to certain employees. The Incentive

RLUs vest either 100% 3 years from the grant date, pro rata over 3 or 5 years from the grant date, or over 7 years from the

grant date, with 20% vesting in each of years 3 through 7.

Upon vesting, RLUs convert on aone-for-one basis into either LLC Common Units or Class A common stock at the

election of the Company.

The weighted-average grant date fair value of Incentive RLUs granted during the years ended December 31, 2023 and

2022, was$41.14 and$34.86, respectively.

Class C Incentive Units

Reload and Staking Class C Incentive Units

As part of the Organizational Transactions and IPO, certain employees were granted Reload Class C Incentive Units or

Staking Class C Incentive Units, which are profits interests. When the value of Class A common stock exceeds the

participation threshold, vested profits interests may be exchanged for LLC Common Units of equal value. On exchange,

the LLC Common Units are immediately redeemed on a one-for-one basis for Class A common stock. The Reload Class C

Incentive Units vest either 100% 3 years from the grant date or over 5 years from the grant date, with one-third of the grant

vesting in each of years 3,4 and 5. The Staking Class C Incentive Units vest either pro rata over 5 years from the grant date

or over 10 years from the grant date, with 10% vesting in each of years 3 through 9 and 30% vesting in year 10.

Class C Incentive Units

As part of the Company’s compensation process, the Company issues Class C Incentive Units to certain employees, which

are profits interests. When the value of Class A common stock exceeds the participation threshold, vested profits interests

may be exchanged for LLC Common Units of equal value. On exchange, the LLC Common Units are immediately

redeemed on a one-to-one basis for Class A common stock. The Class C Incentive Units vest over 8 years from the grant

date, with 15% vesting in each of years 3 through 7 and 25% vesting in year 8, or over 7 years from the grant date, with

20% vesting in each of years 3 through 7.

As the Reload and Staking Class C Incentive Units were one-time grants at the IPO, the weighted average participation

threshold for these awards will be consistent across any type of movement. The weighted average participation threshold

for Reload and Staking Class C Incentive Units was$23.34 and$23.50 as of December 31, 2024 and 2023, respectively.

The decrease in the participation thresholds for the various types of Class C Incentive Units was due to the distributions

declared with respect to these awards during the year ended December 31, 2024.

Valuation Considerations

The Restricted Common Units, once vested, are exchangeable into shares of Class A common stock of the Company on a

one-to-one basis, which entitles the unitholders to TRA payments resulting from 85% of the tax savings generated by the

Company. The various Class C Incentive Units have the same terms as the LLC Common Units, with the exception of their

respective participation thresholds. When the price of the Class A common stock exceeds the participation threshold, the

Class C Incentive Units can be exchanged for LLC Common Units of equal value and are entitled to the same TRA

benefits upon an exchange to Class A common stock. In order to value the Restricted Common Units and Class C Incentive

Units the Company is required to make certain assumptions with respect to select model inputs.

Due to the nature of the underlying risks inherent in TRA payments and the uncertainty as to when the participation

threshold will be satisfied for the various Class C Incentive Units, the Company uses a Monte Carlo simulation to explicitly

model the impact of future stock prices on the size of the amortizable asset, as well as the impact of different levels of

taxable income on the timing of the TRA payments, in a risk-neutral framework. For Class C Incentive Units granted

during the years ended December 31, 2023 and 2022, the Monte Carlo simulation model used the following assumptions:

the simulated closing stock price, the simulated taxable income, the risk-free interest rate, the expected dividend yield, and

the expected volatility and correlation of the Company’s stock price and taxable income. The dividend yield was based on

the Company’s expected dividend rate of 0.0%. The risk-free interest rate range of 2.4%-4.0% was based on U.S. Treasury

rates commensurate with a term of 30 years. The weighted-average grant date fair value of Class C Incentive Units granted

during the years ended December 31, 2023 and 2022, was$22.98 and$19.04, respectively.

Performance Based Awards

Performance Stock Units (PSUs) and Performance LLC Units (PLUs)

Certain employees were granted performance-based equity awards, either PSUs or PLUs, subject to the Company’s

achievement of several defined performance metrics including (i) an Adjusted EBITDAC Margin target, (ii) an Organic

Revenue Growth Compound Annual Growth Rate (“CAGR”) target, and (iii) total shareholder return (“TSR”) CAGR

targets. The TSR CAGR targets are measured from the$52.38 base price of Class A common stock to the sum of (i) the

average of (a) the volume weighted average price (“VWAP”) of the Class A common stock for the fourth quarter of 2027

and (b) the VWAP of the Class A common stock for the first quarter of 2028 and (ii) dividends paid to Class A common

shareholders. The Adjusted EBITDAC Margin and the Organic Revenue Growth CAGR targets, as well as a minimum

threshold for the TSR CAGR target, must be achieved for the awards to vest. If the Adjusted EBITDAC Margin or the

Organic Revenue Growth CAGR targets are not met, or the TSR CAGR is below the minimum threshold, the awards will

be forfeit.

PSUs represent the right to receive Class A common shares and PLUs represent the right to receive LLC Common Units

upon vesting. If the Adjusted EBITDAC Margin and the Organic Revenue Growth CAGR targets are achieved, and the

TSR CAGR meets at least the minimum threshold, the TSR CAGR targets will determine how many Class A common

shares or LLC Common Units, as applicable, the awards vest into. Assuming the minimum threshold is met, the awards

will vest into between 75% and 150% of the applicable stock or units. The payout percentage between the TSR CAGR

range will be determined on a graduated basis. Confirmation of the targets will not occur until after the Company’s fiscal

year 2028 earnings are reported. If the targets are achieved, the awards will vest on April 1, 2029. The probability of

achieving the performance metrics is assessed each reporting period for expense purposes.

The fair values of the performance-based awards granted during the year ended December 31, 2024, were determined using

the Monte Carlo simulation valuation model with the following assumptions:

The use of a valuation model for the PSUs and PLUs requires management to make certain assumptions with respect to

selected model inputs. Expected volatility was calculated based on the observed volatility for comparable companies. The

time to maturity was based on the stock price CAGR target through the first quarter of 2028. The risk-free interest rate was

based on U.S. Treasury rates commensurate with the performance period. The difference in the grant date fair value of the

PSUs and PLUs relates to the difference in Dividend Equivalents and Distributions Declared (as defined below) each

award is entitled to accrue.

Non-Employee Director Stock Grants

The Company grants RSUs to non-employee directors serving as members of the Company’s Board of Directors (“Director

Stock Grants”), with the exception ofone director who has agreed to forgo any compensation for their service to the Board.

The Director Stock Grants are fully vested upon grant. During the years ended December 31, 2024,2023, and 2022, the

Company granted 22,935,19,698, and 53,159 Director Stock Grants, respectively, with weighted-average grant date fair

values of$49.07,$40.86, and$36.30, respectively.

Dividend Equivalents and Declared Distributions

A majority of the Company’s unvested equity-based compensation awards, with the exception of Options and Class C

Incentive Units, are entitled to accrue dividend equivalents if the award vests into Class A common stock (“Dividend

Equivalents”) or declared distributions if the award vests into LLC Common Units (“Declared Distributions”) over the

period the underlying award vests. The Dividend Equivalents and Declared Distributions will be paid in cash to award

holders at the time the underlying award vests. If an award holder forfeits their underlying award, the accrued Dividend

Equivalents or Declared Distributions will also be forfeit. Class C Incentive Units do not accrue cash distributions but

instead have their participation thresholds lowered by each declared distribution. Options do not participate in dividends.

As of December 31, 2024, the Company accrued$0.9 million and$0.1 million related to Dividend Equivalents and

Declared Distributions, respectively, in Accounts payable and accrued liabilities, and$2.9 million and$0.4 million related

to Dividend Equivalents and Declared Distributions, respectively, in Other non-current liabilities on the Consolidated

Equity-Based Compensation Expense

As of December 31, 2024, the unrecognized equity-based compensation expense related to each type of equity-based

compensation award described above and the related weighted-average remaining expense period were as follows:

The following table includes the equity-based compensation the Company recognized by award type from the view of

expense related to pre-IPO and post-IPO awards. The table also presents the unrecognized equity-based compensation

expense as of December 31, 2024, in the same view.

12. EARNINGS PER SHARE

Basic earnings per share is computed by dividing net earnings attributable to Ryan Specialty Holdings, Inc., by the

weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share is

computed giving effect to potentially dilutive shares, including LLC equity awards and the non-controlling interests’ LLC

Common Units that are exchangeable into Class A common stock. As shares of Class B common stock do not share in

earnings and are not participating securities, they are not included in the Company’s calculation. A reconciliation of the

numerator and denominator used in the calculation of basic and diluted earnings per share of Class A common stock is as

The following shares were excluded from the calculation of diluted earnings per share because the effect of including such

potentially dilutive shares would have been antidilutive:

1 Weighted average units outstanding during the period.

13. DERIVATIVES

Deal-Contingent Foreign Currency Forward

On December 21, 2023, the Company entered into the Deal-Contingent Forward to manage the risk of appreciation of the

GBP-denominated purchase price of the acquisition of Castel. The Deal-Contingent Forward had a 200.0 million GBP

notional amount and was executed when the Castel acquisition closed on May 1, 2024. As the Deal-Contingent Forward

was an economic hedge and had not been designated as an accounting hedge, losses resulting from the Deal-Contingent

Forward were recognized through earnings in the periods incurred.

Interest Rate Cap

In April 2022, the Company entered into an interest rate cap agreement to manage its exposure to interest rate fluctuations

related to the Company’s Term Loan in the amount of$25.5 million. The interest rate cap has a$1,000.0 million notional

amount,2.75% strike, and terminates on December 31, 2025. At inception, the Company formally designated the interest

rate cap as a cash flow hedge. As of December 31, 2024, the interest rate cap continued to be an effective hedge.

For the years ended December 31, 2024 and 2023, decreases of$15.7 million and$16.2 million, respectively, in the fair

value of the interest rate cap were recognized in Other comprehensive income (loss). For the year ended December 31,

2022, an increase of$20.4 million in the fair value of the interest rate cap was recognized in Other comprehensive income

(loss). As of December 31, 2024, the Company expects$13.9 million of unrealized gains from the interest rate cap to be

reclassified into earnings over the next twelve months. See Note 18, Income Taxes, for further information on the tax

effects on other comprehensive income related to the interest rate cap.

The location and gains (losses) on derivatives are reported on the Consolidated Statements of Income as follows:

The location and fair value of derivatives are reported on the Consolidated Balance sheets as follows:

See Note 15, Fair Value Measurements, for further information on the fair value of derivatives.

14. VARIABLE INTEREST ENTITIES

As discussed in Note 1, Basis of Presentation, the Company consolidates the LLC as a VIE under ASC 810. The

Company’s financial position, financial performance, and cash flows effectively represent those of the LLC as of and for

the year ended December 31, 2024, with the exception of Cash and cash equivalents of$27.2 million, Other current assets

of$15.4 million, Deferred tax assets of$448.1 million, Accounts payable and accrued liabilities of$0.9 million, Other

non-current liabilities of$2.9 million, and the entire balance of the Tax Receivable Agreement liabilities of$436.3 million

on the Consolidated Balance Sheets, which are attributable solely to Ryan Specialty Holdings, Inc. As of December 31,

2023, Cash and cash equivalents of$58.2 million, Deferred tax assets of$383.3 million, and the entire balance of the Tax

Receivable Agreement liabilities of$358.9 million on the Consolidated Balance Sheet were attributable solely to Ryan

Specialty Holdings, Inc.

15. FAIR VALUE MEASUREMENTS

Accounting standards establish a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair values as

Level 1: Observable inputs such as quoted prices for identical assets in active markets;

Level 2: Inputs other than quoted prices for identical assets in active markets, that are observable either directly or

indirectly; and

Level 3: Unobservable inputs in which there is little or no market data which requires the use of valuation techniques and

the development of assumptions.

The level in the fair value hierarchy within which the fair value measurement is classified is determined based on the

lowest level of input that is significant to the fair value measure in its entirety.

The carrying amount of financial assets and liabilities reported on the Consolidated Balance Sheets for commissions and

fees receivable—net, other current assets, accounts payable, short-term debt, and other accrued liabilities as of

December 31, 2024 and 2023, approximate fair value because of the short-term duration of these instruments. The fair

value of long-term debt, including the Term Loan, Senior Secured Notes, the units subject to mandatory redemption, and

any current portion of such debt, was$3,275.1 million and$1,976.5 million as of December 31, 2024 and 2023,

respectively. The fair value of the Term Loan and Senior Secured Notes would be classified as Level 2 in the fair value

hierarchy and the units subject to mandatory redemption would be classified as Level 3. See Note 9, Debt, for the carrying

values of the Company’s debt.

Derivative Instruments

Deal-Contingent Foreign Currency Forward

The Company entered into the Deal-Contingent Forward to manage the risk of appreciation of the GBP-denominated

purchase price of the Castel acquisition. The fair value of the Deal-Contingent Forward was determined by comparing the

contractual foreign exchange rates to forward market rates for various future dates, probability weighted for when the

acquisition was anticipated to close, and discounted to the valuation date. The lowest level of inputs used that were

significant in determining the fair value were considered Level 3 inputs. See Note 13, Derivatives, for further information

on the Deal-Contingent Forward.

Interest Rate Cap

The Company uses an interest rate cap to manage its exposure to interest rate fluctuations related to the Company’s Term

Loan. The fair value of the interest rate cap is determined using the market standard methodology of discounting the future

expected cash receipts that would occur if variable interest rates rise above the strike rate of the cap. The variable interest

rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived

from observable market interest rate curves and volatilities. The inputs used in determining the fair value of the interest rate

cap are considered Level 2 inputs. See Note 13, Derivatives, for further information on the interest rate cap.

The fair values of contingent consideration and contingently returnable consideration are based on the present value of the

future expected payments to be made to the sellers and to be received from the sellers, respectively, of certain acquired

businesses in accordance with the provisions outlined in the respective purchase agreements, which are Level 3 fair value

measurements. In determining fair value, the Company estimates cash payments and receipts based on management’s

financial projections of the performance of each acquired business relative to the formula specified by each purchase

agreement. The Company utilizes Monte Carlo simulations to evaluate financial projections of each acquired business. The

Monte Carlo models consider forecasted revenue and EBITDA and market risk adjusted revenue and EBITDA, which are

run through a series of simulations. As of December 31, 2024, the models used risk-free rates, expected volatility, and a

credit spread that ranged from 3.5% to 5.4%,6.8% to 18.7%, and 0.7% to 2.6%, respectively. As of December 31, 2023,

the models used risk-free rates, expected volatility, and a credit spread that ranged from 4.9% to 5.4%,7.0% to 21.7%, and

3.3% to 4.2%, respectively. The Company discounts the expected payments created by the Monte Carlo model to present

value using a risk-adjusted rate that takes into consideration the market-based rates of return that reflect the ability of the

acquired entity to achieve its targets. The discount rate ranges used to present value the cash payments as of December 31,

2024 and 2023, were 5.0% to 6.6% and 8.3% to 9.1%, respectively.

Each period, the Company revalues the contingent consideration and contingently returnable consideration associated with

certain prior acquisitions to their fair value and records the related changes of the fair value in Change in contingent

consideration in the Consolidated Statements of Income. Changes in contingent consideration result from changes in the

assumptions regarding probabilities of successful achievement of related EBITDA and revenue milestones, the estimated

timing in which milestones are achieved, and the discount rate used to estimate the fair value of the liability. Contingent

consideration may change significantly as the Company’s revenue growth rate and EBITDA estimates evolve and

additional data is obtained, impacting the Company’s assumptions. The use of different assumptions and judgments could

result in a materially different estimate of fair value which may have a material impact on the results from operations and

financial position. See Note 4, Mergers and Acquisitions, for further information on contingent consideration.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring

basis by fair value hierarchy input level:

Contingently returnable consideration of$1.3 million and$4.2 million was recorded in Other current assets and Other non-

current assets, respectively, on the Consolidated Balance Sheets as of December 31, 2024. Contingent consideration of

$48.2 million was recorded in Accounts payable and accrued liabilities on the Consolidated Balance Sheets as of

December 31, 2024. Contingent consideration of$80.9 million and$41.1 million was recorded in Other non-current

liabilities on the Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively.

Level 3 Assets and Liabilities Measured at Fair Value

The following is a reconciliation of the beginning and ending balances of the Level 3 assets and liabilities measured at fair

value:

For the year ended December 31, 2023, newly established liabilities due to acquisitions included$8.1 million of contingent

consideration established for the 2023 acquisitions and$3.1 million of acquired contingent consideration arrangements. For

the year ended December 31, 2024,$5.4 million related to the loss on the settlement of the Deal-Contingent Forward is

presented in the operating section of the Consolidated Statements of Cash Flows. For the year ended December 31, 2023,

$3.4 million and$4.5 million settlements of contingent consideration are presented in the operating and financing sections,

respectively, of the Consolidated Statements of Cash Flows.

16. COMMITMENTS AND CONTINGENCIES

Legal – E&O and Other Considerations

As an E&S and Admitted markets intermediary, the Company faces ordinary course of business E&O exposure. The

Company also has potential E&O risk if an insurance carrier with which Ryan Specialty placed coverage denies coverage

for a claim or pays less than the insured believes is the full amount owed. The Company seeks to resolve, through

commercial accommodations, certain matters to limit the economic exposure, including potential legal fees, and

reputational risk created by a disagreement between a carrier and the insured, as well as other E&O matters.

The Company utilizes insurance to provide protection from E&O liabilities that may arise during the ordinary course of

business. Ryan Specialty’s E&O insurance provides aggregate coverage for E&O losses up to $150.0 million in excess of a

per claim retention amount of$5.0 million. The Company’s aggregate coverage for E&O losses increased from$100.0

million to$150.0 million as of June 1, 2024. The Company’s per claim retention amount increased from$2.5 million to

$5.0 million as of June 1, 2023. The Company periodically determines a range of possible outcomes using the best

available information that relies, in part, on projecting historical claim data into the future. Loss contingencies of$4.9

million and$6.4 million were recorded for outstanding matters as of December 31, 2024 and 2023, respectively. Loss

contingencies exclude the impact of any loss recoveries. The Company recognized the net impact of the loss contingencies

and any loss recoveries of$1.8 million,$6.9 million, and$7.5 million of E&O expense for the years ended December 31,

2024,2023, and 2022, respectively, in General and administrative expense on the Consolidated Statements of Income. The

historical claim and commercial accommodation data used to project the current estimates may not be indicative of future

claim activity. Thus, the estimates could change in the future as more information becomes known, which could materially

impact the amounts reported and disclosed herein.

During 2022, the Company placed certain insurance policies through a trading partner with the understanding that the

policies were underwritten by highly rated insurance capital. The policies were instead underwritten by an insurance carrier

that was not considered satisfactory by the Company or the insureds. The Company committed to securing replacement

coverage, to the extent commercially available, from highly rated insurance companies on terms substantially similar to the

insurance coverage originally agreed upon. As a result of this unusual circumstance, the Company has and may continue to

incur losses (“Replacement Costs”) arising from the original placements. The Company has determined that it is probable

that it will be exposed to the Replacement Costs on policies placed with this trading partner. The Company recognized an

estimated loss contingency of$0.3 million and$0.2 million as of December 31, 2024 and 2023, respectively, within

Accounts payable and accrued liabilities on the Consolidated Balance Sheets. Relatedly, the Company has obtained

sufficient evidence from its E&O insurance carriers to conclude that a recovery of the claim for the Replacement Costs, in

excess of the$2.5 million retention, is probable. A loss recovery of$20.2 million and$20.6 million was recorded as of

December 31, 2024 and 2023, respectively, in Other current assets on the Consolidated Balance Sheets. In the aggregate,

the loss contingency and related loss recovery resulted in a$2.5 million expense recognized in the year ended December

31, 2022, and no further expense related to this matter has been recognized since.

It is at least reasonably possible that the estimate of Replacement Costs will change in the near term as policies are

adjusted. Further, exposure to additional losses may arise from policies that had expired prior to, or shortly after, the

discovery of this unusual circumstance, adjustable premiums arising from the addition or deletion of properties over the

policy term, unpaid covered claims, or other damages for losses incurred by our customers. An estimate of these potential

losses cannot be made at this time but could change in the future as more information becomes known.

17. RELATED PARTIES

Ryan Investment Holdings

Ryan Investment Holdings, LLC (“RIH”) was formed as an investment holding company designed to aggregate the funds

of Ryan Specialty and Geneva Ryan Holdings, LLC (“GRH”) for investment in Geneva Re Partners, LLC (“GRP”). GRH

was formed as an investment holding company designed to aggregate investment funds of Patrick G. Ryan and other

affiliated investors. Two affiliated investors are LLC Unitholders and directors of the Company, and another is an LLC

Unitholder and employee of the Company. Ryan Specialty does not consolidate GRH as the Company does not have a

direct investment in or variable interest in this entity.

The Company holds a 47% interest in RIH and GRH holds a 53% interest in RIH. RIH has a 50% non-controlling interest

in GRP, and the other 50% is owned by Nationwide Mutual Insurance Company. GRP wholly owns Geneva Re, Ltd.

(“Geneva Re”), a Bermuda-regulated reinsurance company, and GR Bermuda SAC Ltd. (the “Segregated Account

Company”). The Segregated Account Company hasone segre gated account, which is beneficially owned by a third-party

insurance company (the “Third-party Insurer”). RIH is considered a related party variable interest entity under common

control with the Company. The Company is not most closely associated with the variable interest entity and therefore does

not consolidate RIH. The assets of RIH are restricted to settling obligations of RIH, pursuant to Delaware limited liability

company statutes.

The Company is not required to contribute any additional capital to RIH, and its maximum exposure to loss on the equity

method investment is the total invested capital of$47.0 million. The Company may be exposed to losses arising from the

equity method investment as a result of underwriting losses recognized at Geneva Re or losses on Geneva Re’s investment

portfolio. RIH has committed to contribute additional capital to GRP over the next several years. Patrick G. Ryan, through

a trust of which he is the beneficiary and co-trustee, has committed to personally fund any such additional capital

contributions. Any such additional capital contributions under this commitment will not affect the relative ownership of

RIH’s common equity.

The following table summarizes the change in the balance of the Company’s equity method investment in Geneva Re:

Geneva Re

The Company has a service agreement with Geneva Re to provide both administrative services to, as well as disburse

payments for costs directly incurred by, Geneva Re. These direct costs include compensation expenses incurred by

employees of Geneva Re. The Company had$0.3 million and$0.2 million due from Geneva Re under this agreement as of

December 31, 2024 and 2023, respectively.

Ryan Re Services Agreements with Geneva Re

Ryan Re, a wholly owned subsidiary of the Company, is party to a services agreement with Geneva Re to provide, among

other services, certain underwriting and administrative services to Geneva Re. Ryan Re receives a service fee equal to

115% of the administrative costs incurred by Ryan Re in providing these services to Geneva Re. Revenue earned from

Geneva Re was$1.5 million,$1.5 million, and$1.6 million for the years ended December 31, 2024,2023, and 2022,

respectively. Receivables due from Geneva Re under this agreement were$0.7 million as of December 31, 2024 and 2023.

On April 2, 2023, Ryan Re entered into a services agreement with Geneva Re in accordance with which Ryan Re

subcontracted certain services to Geneva Re that Ryan Re is required to provide to the segregated account of the

Segregated Account Company on behalf of the Third-party Insurer. The Company incurred expense of$10.5 million and

$7.5 million during the years ended December 31, 2024 and 2023, respectively. The Company had prepaid expenses of

$5.2 million and$5.3 million as of December 31, 2024 and 2023, respectively, related to this services agreement. The

prepaid expenses are included in Other currents assets on the Consolidated Balance Sheets.

Company Leasing of Corporate Jets

In the ordinary course of its business, the Company charters executive jets for business purposes from Executive Jet

Management (“EJM”), a third-party service provider. Mr. Ryan indirectly owns aircraft that he leases to EJM for EJM’s

charter operations for which he receives remuneration from EJM. The Company pays market rates for chartering aircraft

through EJM, unless the particular aircraft chartered is Mr. Ryan’s, in which case the Company receives a discount below

market rates. Historically, the Company has been able to charter Mr. Ryan’s aircraft and make use of this discount. The

Company recognized expense related to business usage of the aircraft of$1.2 million,$1.0 million, and$1.3 million for the

years ended December 31, 2024,2023, and 2022, respectively.

Personal Guarantee

In April 2021, Mr. Ryan personally guaranteed up to$10.0 million of the financial obligations of the Company under an

agency agreement with certain insurance companies that are affiliated with National Indemnity Company. The Company

did not pay Mr. Ryan any consideration for this guarantee. Mr. Ryan’s guarantee may be replaced by the Company with a

letter of credit at any time, subject to the prior approval of the insurance companies. Mr. Ryan will not personally guarantee

any further additional financial obligations of the Company or any of its subsidiaries.

18. INCOME TAXES

The Company is taxed as a corporation for income tax purposes and is subject to federal, state, and local taxes with respect

to its allocable share of any net taxable income from the LLC. The LLC is a limited liability company taxed as a

partnership for income tax purposes, and its taxable income or loss is passed through to its members, including the

Company. The LLC is subject to income taxes on its taxable income in certain foreign countries, in certain state and local

jurisdictions that impose income taxes on partnerships, and on the taxable income of its U.S. corporate subsidiaries.

The components of income before income taxes are as follows:

The components of income tax expense are as follows:

Reconciliations of income tax expense computed at the U.S. federal statutory income tax rate to the recognized income tax

expense and the U.S. statutory income tax rate to our effective tax rates are as follows:

The effective tax rate for the year ended December 31, 2024, was lower than the 21% statutory rate primarily as a result of

the income attributable to non-controlling interests and equity-based compensation, offset by an increase related to the

change in the deferred income tax rates and$9.5 million of non-cash deferred income tax expense from the Common

Control Reorganizations (“CCRs”), which are described below. The effective tax rate for the year ended December 31,

2023, was lower than the 21% statutory rate primarily as a result of the income attributable to non-controlling interests,

change in the deferred income tax rates, and equity-based compensation, offset by an increase of$18.4 million non-cash

deferred income tax expense related to the CCRs.

Uncertain Tax Positions

The Company does not believe it has any significant uncertain tax positions and therefore hasno unrecognized tax benefits

as of December 31, 2024, that if recognized would affect the annual effective tax rate. The Company’s 2021 through 2023

tax years are considered open for federal examination purposes. The 2020 through 2023 tax years are considered open for

purposes of federal examination under the statutes of limitations for the LLC, which continues to file an annual U.S. Return

of Partnership Income, and the Company’s C-Corporation subsidiaries. As of the issuance date of this Form 10-K, one of

the LLC’s subsidiaries is under U.S. federal and state examination for the 2020 tax year andanother is under U.S. federal

examination for the 2022 tax year. The Company is under examination by a local tax jurisdiction for the 2021 tax year.

There are no other on-going U.S. federal, state, or foreign tax audits or examinations as of the date of issuance of this Form

10-K.

Common Control Reorganizations (CCRs)

Subsequent to the acquisition of Innovisk, which was purchased by Ryan Specialty Holdings, Inc., the Company

reorganized Innovisk and transferred the resulting LLCs and foreign subsidiaries to Ryan Specialty, LLC. This legal entity

reorganization was considered a transaction between entities under common control. The CCR resulted in deferred tax

liabilities of$40.7 million and a non-cash deferred income tax expense of$11.4 million. Additionally, the difference

between the carrying value and the fair value of the investments transferred under common control resulted in an increase

of$7.3 million to Non-controlling interests on the Consolidated Statements of Stockholders’ Equity during the year ended

December 31, 2024.

Subsequent to the acquisitions of Socius and AccuRisk, which were purchased by a wholly owned subsidiary of Ryan

Specialty Holdings, Inc., the Company converted Socius to an LLC and reorganized AccuRisk and transferred those LLCs

to Ryan Specialty, LLC. These legal entity reorganizations were considered transactions between entities under common

control. The CCRs resulted in a net, non-cash deferred income tax expense of$18.4 million. Additionally, the difference

between the carrying value and the fair value of the investments transferred under common control resulted in an increase

of$18.9 million to Non-controlling interests on the Consolidated Statements of Stockholders’ Equity during the year ended

December 31, 2023. During the year ended December 31, 2024, as a result of the measurement period adjustments for

AccuRisk, the Company recognized$1.9 million of non-cash deferred income tax benefit.

Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities are as follows:

During the years ended December 31, 2024 and 2023, the changes in Deferred tax assets were primarily the result of

reductions to the deferred tax assets from the CCRs of$41.2 million and $77.0 million, respectively, offset by increases in

the investment in the LLC’s deferred tax assets of$97.1 million and$63.9 million, respectively, due to exchanges of LLC

Common Units for Class A common stock. Additionally, during the year ended December 31, 2024, Deferred tax assets

increased by$13.9 million due to equity-based compensation. The change in the Deferred tax liabilities during the year

ended December 31, 2024, was primarily the result Deferred tax liabilities established on acquired intangibles in

connection with the acquisitions of Castel and Innovisk of$21.8 million and$21.0 million, respectively.

As of December 31, 2024, the Company had$40.2 million of federal net operating loss (“NOL”) carryforwards with an

indefinite carryforward period,$37.2 million of state NOL carryforwards that will begin toexpire in 2036, and$14.1

million of foreign NOL carryforwards with an indefinite carryforward period. The Company has recorded valuation

allowances of$4.4 million and$9.0 million against the state and foreign NOLs, respectively.

As of December 31, 2024, the Company had$5.5 million in foreign tax credit carryforwards that will begin to expire in

2031. The Company assessed the available positive and negative evidence, including tax planning strategies and recent

results of foreign operations, to determine whether it was more likely than not that the existing deferred tax asset would be

realized. A significant piece of objective negative evidence evaluated was the inability to use all available foreign tax

credits for the year ended December 31, 2024. On the basis of this evaluation, a full valuation allowance of$5.5 million

was recorded with respect to this deferred tax asset as of December 31, 2024. The amount of the deferred tax asset

considered realizable, however, could be adjusted in the future if estimates of the Company’s ability to use the available

foreign tax credits change.

As of December 31, 2024, the Company concluded that, based on the weight of all available positive and negative

evidence, the deferred tax assets with respect to the Company’s basis difference in its investment in the LLC, start-up costs,

and U.S. net operating losses are more likely than not to be realized. As such, no valuation allowance has been recognized

against those deferred tax assets. The Company has recorded a full valuation allowance against its foreign tax credits and

valuation allowances against certain state and foreign NOLs. The valuation allowances will be maintained until there is

sufficient evidence to support the reversal of all or some portion of the allowances.

Tax Receivable Agreement (TRA)

The Company recognizes a liability on the Consolidated Balance Sheets based on the undiscounted estimated future

payments under the TRA. The amounts payable under the TRA will vary depending upon a number of factors, including

the amount, character, and timing of the taxable income of the Company in the future. Based on current projections, the

Company anticipates having sufficient taxable income to be able to realize the benefits and has recorded Tax Receivable

Agreement liabilities of$436.3 million related to these benefits on the Consolidated Balance Sheets as of December 31,

2024. The following summarizes activity related to the Tax Receivable Agreement liabilities:

The increases in the TRA liabilities due to exchanges of LLC Common Units for Class A common stock were recognized

in Additional paid-in capital on the Consolidated Statements of Stockholders’ Equity. During the year ended December 31,

2024, the Company remeasured the TRA liabilities due to changes in state tax rates, which decreased its estimated cash tax

savings rate from 26.12% to 26.00%. During the year ended December 31, 2023, the Company remeasured the TRA

liabilities due to changes in state tax rates, which increased its estimated cash tax savings from 25.53% to 26.12%. The

changes were recognized in Other non-operating loss on the Consolidated Statements of Income. Total realized tax savings

in 2024 for the year ended December 31, 2023, from each of the tax attributes associated with the TRA were$24.4 million;

$20.7 million, exclusive of the related accrued interest, was paid to current and certain former LLC unitholders,

representing 85% of the realized tax savings. The remaining 15%, or$3.7 million, of the realized tax savings was retained

by the Company.

Non-controlling Interest Holders’ Tax Distributions

The Company declared tax distributions to the non-controlling interest holders of$84.8 million,$74.6 million, and$28.7

million during the years ended December 31, 2024,2023, and 2022, respectively. Non-controlling interest holders’ tax

distributions for quarterly estimates are generally paid throughout the year they relate to, and a final payment is made in the

first half of the subsequent year.

Other Comprehensive Income (Loss)

The following table summarizes the tax effects on the components of Other comprehensive income (loss):

19. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in the balance of Accumulated other comprehensive income (loss), net of tax, are as follows:

1 Change in share of equity method investment in related party other comprehensive income (loss) on the Consolidated

Statements of Comprehensive Income.

20. SEGMENT REPORTING

Segment Information

Ryan Specialty is organized as a single operating and reporting segment. The Company’s chief operating decision maker

(“CODM”) is its Chief Executive Officer. The Company has identified its single operating segment utilizing a management

approach that aligns with the manner in which the CODM utilizes the Company’s consolidated financial information for

resource allocation and performance evaluation. Refer to Note 1, Basis of Presentation, for a description of the Company’s

products and services and to Note 3, Revenue from Contracts with Customers, for the disaggregation of revenue by

Specialty.

The CODM utilizes consolidated net income as the primary metric to monitor budget versus actual results, assess the

performance of the business, and make decisions regarding resource allocation. The following table provides information

about the Company’s revenue and includes a reconciliation to net income:

1 Compensation-related expense includes salaries, commissions, bonus compensation, benefits, payroll taxes, and

contractor costs, and excludes equity-based compensation expense, acquisition, and restructuring related expenses.

2 General and administrative expense includes travel and entertainment, professional services, occupancy, IT related costs,

and other operating costs, and excludes acquisition and restructuring related expenses.

3 Other segment items include equity-based compensation expense, and acquisition and restructuring related compensation

and general and administrative expenses.

Geographic Information

Revenue is primarily recognized based on the country in which the services are performed. The below table illustrates the

geographic regions for the Company’s revenue:

The Company did not have material revenue from operations in any individual foreign country for the years ended

December 31, 2024,2023, and 2022. Asset information is not presented to the CODM. Substantially all of the Company’s

tangible long-lived assets are located in the United States; therefore, geographic information for long-lived assets is not

presented.

21. SUPPLEMENTAL FINANCIAL INFORMATION

Interest Income

The Company earned interest income of$21.5 million,$32.0 million, and$10.6 million during the years ended

December 31, 2024, 2023, and 2022, respectively, on its operating Cash and cash equivalents. Interest income is

recognized in Interest expense, net on the Consolidated Statements of Income.

Supplemental Cash Flow Information

The following represents the supplemental cash flow information of the Company:

1 Interest paid is presented net of$24.7 million,$22.9 million, and$2.2 million of cash received in connection with the

Company’s interest rate cap for the years ended December 31, 2024,2023, and 2022, respectively. See Note 13,

Derivatives, for further information on the interest rate cap.

22. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through February 21, 2025, and has concluded that no events have occurred

that require disclosure other than the events listed below.

On February 3, 2025, the Company completed the acquisition of Velocity Risk Underwriters, LLC, an MGU specializing

in first-party insurance coverage for catastrophe exposed properties headquartered in Nashville, Tennessee, for

approximately$525.0 million cash consideration, subject to customary purchase price adjustments. This acquisition will

include contingent consideration in its final purchase price, however, the Company has not yet completed the valuation of

the contingent consideration or the purchase price allocation to the acquired assets and assumed liabilities as of the date of

this filing.

On February 20, 2025, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.12 per share of

outstanding Class A common stock. The regular quarterly dividend will be paid on March 18, 2025, to shareholders of

record of Class A common stock as of the close of business on March 4, 2025. Any future dividends will be subject to the

approval of the Company’s Board of Directors.