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Schedule I - Parent Company Only Financial Statements | 12 Months Ended
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Dec. 31, 2020
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] |
Schedule I - Parent Company Only Financial Statements | BGC PARTNERS, INC. (Parent Company Only) STATEMENTS OF FINANCIAL CONDITION (in thousands, except share and per share data)
|  | December 31, 2020 |  |  | December 31, 2019 |
Assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 24 |  |  | $ | 44 |
Investments in subsidiaries |  |  | 732,658 |  |  |  | 657,961 |
Receivables from related parties |  |  | 2,758 |  |  |  | 3,999 |
Note receivable from related party |  |  | 1,296,082 |  |  |  | 1,109,013 |
Other assets |  |  | 64,498 |  |  |  | 49,347 |
Total assets |  | $ | 2,096,020 |  |  | $ | 1,820,364 |
Liabilities and Stockholders’ Equity |  |  |  |  |  |  |  |
Accounts payable, accrued and other liabilities |  | $ | 50,999 |  |  | $ | 36,704 |
Notes payable |  |  | 1,296,082 |  |  |  | 1,109,013 |
Total liabilities |  |  | 1,347,081 |  |  |  | 1,145,717 |
Commitments and contingencies (Note 3) |  |  |  |  |  |  |  |
Total stockholders’ equity |  |  | 748,939 |  |  |  | 674,647 |
Total liabilities and stockholders’ equity |  | $ | 2,096,020 |  |  | $ | 1,820,364 |
See accompanying Notes to Financial Statements. BGC PARTNERS, INC. (Parent Company Only) STATEMENTS OF OPERATIONS (in thousands, except per share data)
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
Other revenues |  | $ | 450 |  |  | — |  |  | $ | 36,944 |
Interest and dividend income |  |  | 65,762 |  |  |  | 55,044 |  |  |  | 68,382 |
Total revenue |  |  | 66,212 |  |  |  | 55,044 |  |  |  | 105,326 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | 65,762 |  |  |  | 55,044 |  |  |  | 68,382 |
Total expenses |  |  | 65,762 |  |  |  | 55,044 |  |  |  | 68,382 |
Income from operations before income taxes |  |  | 450 |  |  |  | — |  |  |  | 36,944 |
Equity income (loss) of subsidiaries |  |  | 41,876 |  |  |  | 50,413 |  |  |  | 49,087 |
Equity income of discontinued operations, net |  | — |  |  | — |  |  |  | 125,341 |
Provision (benefit) for income taxes |  |  | (6,582 | ) |  |  | 2,851 |  |  |  | 9,176 |
Net income available to common stockholders |  | $ | 48,908 |  |  | $ | 47,562 |  |  | $ | 202,196 |
Per share data: |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings (loss) per share from continuing operations |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) from continuing operations |  | $ | 48,908 |  |  | $ | 47,562 |  |  | $ | 76,855 |
Basic earnings (loss) per share from continuing operations |  | $ | 0.14 |  |  | $ | 0.14 |  |  | $ | 0.24 |
Basic weighted-average shares of common stock outstanding |  |  | 361,736 |  |  |  | 344,332 |  |  |  | 322,141 |
Fully diluted earnings (loss) per share from continuing operations |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) from continuing operations for fully diluted shares |  | $ | 70,430 |  |  | $ | 62,054 |  |  | $ | 76,855 |
Fully diluted earnings (loss) per share from continuing operations |  | $ | 0.13 |  |  | $ | 0.13 |  |  | $ | 0.24 |
Fully diluted weighted-average shares of common stock outstanding |  |  | 546,848 |  |  |  | 459,743 |  |  |  | 323,844 |
See accompanying Notes to Financial Statements. BGC PARTNERS, INC. (Parent Company Only) STATEMENTS OF COMPREHENSIVE INCOME (in thousands)
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Net income available to common stockholders |  | $ | 48,908 |  |  | $ | 47,562 |  |  | $ | 202,196 |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustments |  |  | 5,382 |  |  |  | 96 |  |  |  | (11,686 | )
Benefit plans |  |  | (1,210 | ) |  |  | (8,733 | ) |  |  | — |
Total other comprehensive (loss) income, net of tax |  |  | 4,172 |  |  |  | (8,637 | ) |  |  | (11,686 | )
Comprehensive income attributable to common stockholders |  | $ | 53,080 |  |  | $ | 38,925 |  |  | $ | 190,510 |
See accompanying Notes to Financial Statements. BGC PARTNERS, INC. (Parent Company Only) STATEMENTS OF CASH FLOWS (in thousands)
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Net income available to common stockholders |  | $ | 48,908 |  |  | $ | 47,562 |  |  | $ | 202,196 |
Less: Equity income of discontinued operations |  |  | — |  |  |  | — |  |  |  | (125,341 | )
Adjustments to reconcile net income to net cash used in operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Amortization of deferred financing costs |  |  | 4,188 |  |  |  | 3,206 |  |  |  | 4,012 |
Equity in net gains (losses) of unconsolidated investments |  |  | (41,876 | ) |  |  | (50,413 | ) |  |  | (49,087 | )
Deferred tax (benefit) expense |  |  | (13,585 | ) |  |  | (20,042 | ) |  |  | (12,449 | )
Decrease (increase) in operating assets: |  |  |  |  |  |  |  |  |  |  |  |
Investments in subsidiaries |  |  | (11,480 | ) |  |  | 12,400 |  |  |  | (368,509 | )
Receivables from related parties |  |  | 1,241 |  |  |  | 16,029 |  |  |  | 10,686 |
Note receivable from related party |  |  | (187,069 | ) |  |  | (366,496 | ) |  |  | (450,000 | )
Other assets |  |  | 887 |  |  |  | 861 |  |  |  | 39 |
(Decrease) increase in operating liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable, accrued and other liabilities |  |  | 14,295 |  |  |  | (4,125 | ) |  |  | 3,321 |
Net cash used in operating activities |  |  | (184,491 | ) |  |  | (361,018 | ) |  |  | (785,132 | )
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Net cash used in investing activities |  |  | — |  |  |  | — |  |  |  | — |
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Dividends to stockholders |  |  | (60,440 | ) |  |  | (192,442 | ) |  |  | (231,446 | )
Repurchase of Class A common stock |  |  | (5 | ) |  |  | (970 | ) |  |  | (8,185 | )
Issuance of senior notes, net of deferred issuance costs |  |  | 294,396 |  |  |  | 294,845 |  |  |  | 444,196 |
Repayments of senior notes |  |  | (43,968 | ) |  |  | — |  |  |  | — |
Unsecured revolving credit agreement borrows |  |  | 230,000 |  |  |  | 390,000 |  |  |  | 195,000 |
Unsecured revolving credit agreement repayments |  |  | (300,000 | ) |  |  | (320,000 | ) |  |  | (195,000 | )
Distributions from subsidiaries |  |  | 61,972 |  |  |  | 184,545 |  |  |  | 199,062 |
Proceeds from offering of Class A common stock, net |  |  | 2,516 |  |  |  | 4,929 |  |  |  | 345,974 |
Net cash provided by financing activities |  |  | 184,471 |  |  |  | 360,907 |  |  |  | 749,601 |
Net cash provided by (used in) operating activities from discontinued operations |  |  | — |  |  |  | — |  |  |  | — |
Net cash provided by (used in) investing activities from discontinued operations |  |  | — |  |  |  | — |  |  |  | — |
Net cash provided by (used in) financing activities from discontinued operations |  |  | — |  |  |  | — |  |  |  | 35,487 |
Net increase (decrease) in cash and cash equivalents |  |  | (20 | ) |  |  | (111 | ) |  |  | (44 | )
Cash and cash equivalents at beginning of period |  |  | 44 |  |  |  | 155 |  |  |  | 199 |
Cash and cash equivalents at end of period |  | $ | 24 |  |  | $ | 44 |  |  | $ | 155 |
Supplemental cash information: |  |  |  |  |  |  |  |  |  |  |  |
Cash paid (refund) during the period for taxes |  | $ | (5,919 | ) |  | $ | 5,422 |  |  | $ | 20,598 |
Cash paid during the period for interest |  |  | 60,594 |  |  |  | 47,329 |  |  |  | 15,375 |
Supplemental non-cash information: |  |  |  |  |  |  |  |  |  |  |  |
Issuance of Class A common stock upon exchange of limited partnership interests |  | $ | 11,388 |  |  | $ | 26,146 |  |  | $ | 143,232 |
Issuance of Class A and contingent Class A common stock and limited partnership interests for acquisitions |  |  | 1,578 |  |  |  | 3,040 |  |  |  | 21,899 |
See accompanying Notes to Financial Statements.
1. | Organization and Basis of Presentation
The accompanying Parent Company Only Financial Statements of BGC Partners should be read in conjunction with the consolidated financial statements of BGC Partners and subsidiaries and the notes thereto. In addition, certain reclassifications have been made to previously reported amounts to conform to the current presentation. For the year ended December 31, 2020, the Company declared and paid cash dividends of $0.17 per share to BGC Class A and Class B common stockholders. For the year ended December 31, 2019 and 2018, the comparable cash dividend amounts were $0.56 per share and $0.72 per share, respectively. Revisions of Previously Issued Financial Statements During the fourth quarter of 2020, the Company’s management identified the theft of U.K. tax payment related funds from the Company. The theft, which occurred over several years ending September 2020, was perpetrated by two individuals associated with the Company, and did not involve the operations or business of the Company. Litigation has commenced against the two individuals seeking recovery of stolen amounts. The cumulative impact to the Company’s “Consolidated net income (loss)” as a result of the theft was determined to be $35.2 million. As a result, the Company has revised its previously issued financial statements as of and for the years ended December 31, 2019 and 2018. The Company believes that these revisions are not material to any of the Company’s previously issued financial statements based on an analysis of quantitative and qualitative factors in accordance with the SEC Staff Bulletin Nos. 99 and 108. Accordingly, the Company has concluded that an amendment of previously filed periodic reports is not required. However, though the revisions were not material to any previously issued financial statements, correcting the accumulated adjustment in 2020 would have been material to the Company’s consolidated financial statements for the year ended December 31, 2020. Therefore, the company has revised the historical periods in this Annual Report on Form 10-K. For more information about the revisions to our previously issued financial statements, see Note 4—“Prior Periods’ Financial Statement Revisions” in the Company’s consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
2. | Prior Periods’ Financial Statement Revisions
During the fourth quarter of 2020, the Company’s management identified the theft of U.K. tax payment related funds from the Company. The theft, which occurred over several years ending September 2020, was perpetrated by two individuals associated with the Company, and did not involve the operations or business of the Company. Litigation has commenced against the two individuals seeking recovery of stolen amounts. The cumulative impact to the Company’s ”Consolidated net income (loss)” as a result of the theft was determined to be $35.2 million. As a result, the Company has revised its previously issued financial statements as of and for the years ended December 31, 2019 and 2018. The Company assessed the materiality of these revisions on prior periods’ financial statements in accordance with SEC Staff Accounting Bulletin Topic 1.M, Materiality, codified in ASC Topic 250, Accounting Changes and Error Corrections, and concluded that the revisions were not material to the prior annual periods. Although the revisions were not material to any previously issued financial statements, correcting the accumulated revision in 2020 would have been material to the Company’s consolidated financial statements for the year ended December 31, 2020. Accordingly, the Company has concluded that an amendment of previously filed periodic reports is not required. Therefore, the Company has revised the historical periods in this Annual Report on Form 10-K. The Company is revising other prior period financial statements to reflect certain previously unrecorded immaterial adjustments, primarily related to BGC’s provision (benefit) for income taxes, in the Company’s consolidated financial statements for the periods stated above. The accompanying notes to the consolidated financial statements further reflect the impact of these revisions. The following table presents the effect of the resulting revision on the statements of financial condition as of December 31, 2019.
|  | December 31, 2019 |
|  | As Reported |  |  | Adjustments |  |  | As Revised |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 44 |  |  | $ | — |  |  | $ | 44 |
Investments in subsidiaries |  |  | 669,402 |  |  |  | (11,441 | ) |  |  | 657,961 |
Receivables from related parties |  |  | 3,999 |  |  |  | — |  |  |  | 3,999 |
Note receivable from related party |  |  | 1,109,013 |  |  |  | — |  |  |  | 1,109,013 |
Other assets |  |  | 49,252 |  |  |  | 95 |  |  |  | 49,347 |
Total assets |  | $ | 1,831,710 |  |  | $ | (11,346 | ) |  | $ | 1,820,364 |
Liabilities and Stockholders’ Equity |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable, accrued and other liabilities |  | $ | 36,871 |  |  | $ | (167 | ) |  | $ | 36,704 |
Notes payable |  |  | 1,109,013 |  |  |  | — |  |  |  | 1,109,013 |
Total liabilities |  |  | 1,145,884 |  |  |  | (167 | ) |  |  | 1,145,717 |
Commitments and contingencies (Note 3) |  |  |  |  |  |  |  |  |  |  |  |
Total stockholders’ equity |  |  | 685,826 |  |  |  | (11,179 | ) |  |  | 674,647 |
Total liabilities and stockholders’ equity |  | $ | 1,831,710 |  |  | $ | (11,346 | ) |  | $ | 1,820,364 |
The following tables present the effect of the resulting revision on the statements of operations for the years ended December 31, 2019 and 2018.
|  | Year Ended December 31, 2019 |
|  | As Reported |  |  | Adjustments |  |  | As Revised |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
Interest and dividend income |  | $ | 55,044 |  |  | $ | — |  |  | $ | 55,044 |
Total revenue |  |  | 55,044 |  |  |  | — |  |  |  | 55,044 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | 55,044 |  |  |  | — |  |  |  | 55,044 |
Total expenses |  |  | 55,044 |  |  |  | — |  |  |  | 55,044 |
Income from operations before income taxes |  |  | — |  |  |  | — |  |  |  | — |
Equity income (loss) of subsidiaries |  |  | 58,819 |  |  |  | (8,406 | ) |  |  | 50,413 |
Provision (benefit) for income taxes |  |  | 3,112 |  |  |  | (261 | ) |  |  | 2,851 |
Net income available to common stockholders |  | $ | 55,707 |  |  | $ | (8,145 | ) |  | $ | 47,562 |
Per share data: |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings (loss) per share |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) available to common stockholders |  | $ | 55,707 |  |  | $ | (8,145 | ) |  | $ | 47,562 |
Basic earnings (loss) per share |  | $ | 0.16 |  |  | $ | (0.02 | ) |  | $ | 0.14 |
Basic weighted-average shares of common stock outstanding |  |  | 344,332 |  |  |  | — |  |  |  | 344,332 |
Fully diluted earnings (loss) per share |  |  |  |  |  |  |  |  |  |  |  |
Net income for fully diluted shares |  | $ | 83,531 |  |  | $ | (21,477 | ) |  | $ | 62,054 |
Fully diluted earnings (loss) per share |  | $ | 0.16 |  |  | $ | (0.03 | ) |  | $ | 0.13 |
Fully diluted weighted-average shares of common stock outstanding |  |  | 524,550 |  |  |  | (64,807 | ) |  |  | 459,743 |
|  | Year Ended December 31, 2018 |
|  | As Reported |  |  | Adjustments |  |  | As Revised |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
Other revenues |  | $ | 36,944 |  |  | $ | — |  |  | $ | 36,944 |
Interest and dividend income |  |  | 68,382 |  |  |  | — |  |  |  | 68,382 |
Total revenue |  |  | 105,326 |  |  |  | — |  |  |  | 105,326 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | 68,382 |  |  |  | — |  |  |  | 68,382 |
Total expenses |  |  | 68,382 |  |  |  | — |  |  |  | 68,382 |
Income from operations before income taxes |  |  | 36,944 |  |  |  | — |  |  |  | 36,944 |
Equity income (loss) of subsidiaries |  |  | 49,472 |  |  |  | (385 | ) |  |  | 49,087 |
Equity income of discontinued operations, net |  |  | 123,816 |  |  |  | 1,525 |  |  |  | 125,341 |
Provision (benefit) for income taxes |  |  | 12,712 |  |  |  | (3,536 | ) |  |  | 9,176 |
Net income available to common stockholders |  | $ | 197,520 |  |  | $ | 4,676 |  |  | $ | 202,196 |
Per share data: |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings (loss) per share from continuing operations |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) from continuing operations |  | $ | 73,704 |  |  | $ | 3,151 |  |  | $ | 76,855 |
Basic earnings (loss) per share from continuing operations |  | $ | 0.23 |  |  | $ | 0.01 |  |  | $ | 0.24 |
Basic weighted-average shares of common stock outstanding |  |  | 322,141 |  |  |  | — |  |  |  | 322,141 |
Fully diluted earnings (loss) per share from continuing operations |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) from continuing operations for fully diluted shares |  | $ | 73,704 |  |  | $ | 3,151 |  |  | $ | 76,855 |
Fully diluted earnings (loss) per share from continuing operations |  | $ | 0.23 |  |  | $ | 0.01 |  |  | $ | 0.24 |
Fully diluted weighted-average shares of common stock outstanding |  |  | 323,844 |  |  |  | — |  |  |  | 323,844 |
The following tables present the effect of the resulting revision on the consolidated statements of cash flows for the years ended December 31, 2019 and 2018.
|  | Year Ended December 31, 2019 |
|  | As Reported |  |  | Adjustments |  |  | As Revised |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Net income available to common stockholders |  | $ | 55,707 |  |  | $ | (8,145 | ) |  | $ | 47,562 |
Adjustments to reconcile net income to net cash used in operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Equity in net gains (losses) of unconsolidated investments |  |  | (58,819 | ) |  |  | 8,406 |  |  |  | (50,413 | )
Deferred tax (benefit) expense |  |  | (19,947 | ) |  |  | (95 | ) |  |  | (20,042 | )
Decrease (increase) in operating assets: |  |  |  |  |  |  |  |  |  |  |  |
Investments in subsidiaries |  |  | 12,399 |  |  |  | 1 |  |  |  | 12,400 |
(Decrease) increase in operating liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable, accrued and other liabilities |  |  | (3,958 | ) |  |  | (167 | ) |  |  | (4,125 | )
Net cash used in operating activities |  |  | (361,018 | ) |  |  | — |  |  |  | (361,018 | )
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Net cash used in investing activities |  | $ | — |  |  | $ | — |  |  | $ | — |
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Net cash provided by financing activities |  | $ | 360,907 |  |  | $ | — |  |  | $ | 360,907 |
Net increase (decrease) in cash and cash equivalents |  |  | (111 | ) |  |  | — |  |  |  | (111 | )
Cash and cash equivalents at beginning of period |  |  | 155 |  |  |  | — |  |  |  | 155 |
Cash and cash equivalents at end of period |  | $ | 44 |  |  | $ | — |  |  | $ | 44 |
|  | Year Ended December 31, 2018 |
|  | As Reported |  |  | Adjustments |  |  | As Revised |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Net income available to common stockholders |  | $ | 197,520 |  |  | $ | 4,676 |  |  | $ | 202,196 |
Less: Equity income of discontinued operations |  |  | (123,816 | ) |  |  | (1,525 | ) |  |  | (125,341 | )
Adjustments to reconcile net income to net cash used in operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Equity in net gains (losses) of unconsolidated investments |  |  | (49,472 | ) |  |  | 385 |  |  |  | (49,087 | )
Decrease (increase) in operating assets: |  |  |  |  |  |  |  |  |  |  |  |
Investments in subsidiaries |  |  | (365,405 | ) |  |  | (3,104 | ) |  |  | (368,509 | )
(Decrease) increase in operating liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable, accrued and other liabilities |  |  | 3,753 |  |  |  | (432 | ) |  |  | 3,321 |
Net cash used in operating activities |  |  | (785,132 | ) |  |  | — |  |  |  | (785,132 | )
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Net cash used in investing activities |  | $ | — |  |  | $ | — |  |  | $ | — |
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Net cash provided by financing activities |  | $ | 749,601 |  |  | $ | — |  |  | $ | 749,601 |
Net increase (decrease) in cash and cash equivalents |  |  | (44 | ) |  |  | — |  |  |  | (44 | )
Cash and cash equivalents at beginning of period |  |  | 199 |  |  |  | — |  |  |  | 199 |
Cash and cash equivalents at end of period |  | $ | 155 |  |  | $ | — |  |  | $ | 155 |
Certain prior period line items in the statements of comprehensive income (loss) were affected by the revisions of previously issued financial statements. All of the changes in the statements of comprehensive income were isolated to the net income line, which has been addressed through the preceding disclosures.
3. | Commitments, Contingencies and Guarantees
On March 13, 2015, subsidiaries of the Company entered into a secured loan arrangement of $28.2 million, under which it pledged certain fixed assets as security for a loan. This arrangement was guaranteed by the Parent Company, incurred interest at a fixed rate of 3.70% and matured on March 13, 2019, therefore there were no borrowings outstanding as of December 31, 2020 and 2019. On July 10, 2015, the Company and GFI entered into a guarantee pursuant to which the Parent Company has guaranteed the obligations of GFI under GFI’s 8.375% Senior notes due in the remaining aggregate principal amount of $240.0 million and the indenture for the notes, dated as of July 19, 2011, between GFI and The Bank of New York Mellon Trust Company, N.A., as Trustee. Pursuant to the terms of the indenture, the interest rate on the notes was reduced effective July 19, 2015 as a result of prior ratings increases following the acquisition of GFI by BGC Partners. In addition, on January 13, 2016 the interest rate was further reduced as a result of another ratings increase. The Company and GFI will share any cost savings, including interest and other costs, resulting from the credit enhancement provided by BGC Partners. On May 31, 2017, the Company entered into a secured loan arrangement of $29.9 million, under which it pledged certain fixed assets as security for a loan. This arrangement is guaranteed by the Parent Company, incurs interest at a fixed rate of 3.44% per year and matures on May 31, 2021. As of December 31, 2020 and December 31, 2019, the Company had $4.0 million and $11.7 million, respectively, outstanding related to this secured loan arrangement. The book value of the fixed assets pledged as of December 31, 2020 was $0.8 million. The book value of the fixed assets pledged as of December 31, 2019 was $2.3 million. On April 8, 2019, the Company entered into a secured loan arrangement of $15.0 million, under which it pledged certain fixed assets as security for a loan. This arrangement is guaranteed by the Parent Company, incurs interest at a fixed rate of 3.77% and matures on April 8, 2023. As of December 31, 2020 and 2019, the Company had $9.6 million and $13.2 million outstanding related to this secured loan arrangement, respectively. The book value of the fixed assets pledged as of December 31, 2020 was $1.2 million. The book value of the fixed assets pledged as of December 31, 2019 was $8.1 million. On April 19, 2019, the Company entered into a $10.0 million secured loan arrangement , under which it pledged certain fixed assets as security for a loan. This arrangement incurs interest at a fixed rate of 3.89% and matures on April 19, 2023. As of December 31, 2020 and December 31, 2019, the Company had $6.3 million and $8.8 million, respectively, outstanding related to this secured loan arrangement. The book value of the fixed assets pledged as of December 31, 2020 was $2.7 million. The book value of the fixed assets pledged as of December 31, 2019 was $5.7 million.
4. | Long-Term Debt
Unsecured Senior Revolving Credit and Converted Term Loan Agreement On September 8, 2017, the Company entered into a committed unsecured senior revolving credit agreement with Bank of America, N.A., as administrative agent, and a syndicate of lenders. The revolving credit agreement provided for revolving loans of up to $400.0 million. The maturity date of the facility was September 8, 2019. On November 22, 2017, the Company and Newmark entered into an amendment to the unsecured senior revolving credit agreement. Pursuant to the amendment, the then-outstanding borrowings of the Company under the revolving credit facility were converted into a term loan. There was no change in the maturity date or interest rate. Effective December 13, 2017, Newmark assumed the obligations of the Company as borrower under the converted term loan. The Company remained a borrower under, and retained access to, the revolving credit facility for any future draws, subject to availability which increased as Newmark repaid the converted term loan. During the year ended December 31, 2018, Newmark repaid the outstanding balance of the converted term loan. During the year ended December 31, 2018, the Company borrowed $195.0 million under the committed unsecured senior revolving credit agreement and subsequently repaid the $195.0 million during the year. Therefore, there were no borrowings outstanding as of December 31, 2018. The Company recorded interest expense of $1.0 million for the year ended December 31, 2018. The Company did not record any interest expense related to the committed unsecured revolving credit agreement for the years ended December 31, 2020 and 2019. On November 28, 2018, the Company entered into a new Revolving Credit Agreement which replaced the existing committed unsecured senior revolving credit agreement. The maturity date of the new Revolving Credit Agreement wa s November 28, 2020 and the maximum revolving loan balance has been reduced from $400.0 million to $350.0 million. Borrowings under this agreement bore interest at either LIBOR or a defined base rate plus additional margin. On December 11, 2019, the Company entered into an amendment to the new unsecured Revolving Credit Agreement. Pursuant to the amendment, the maturity date was extended to February 26, 2021. On February 26, 2020, the Company entered into a second amendment to the new Revolving Credit Agreement, pursuant to which, the maturity date was extended by two years to February 26, 2023. There was no change to the interest rate or the maximum revolving loan balance. On July 14, 2020, the Company repaid in full the $225.0 million borrowings outstanding under the new Revolving Credit Agreement. As of December 31, 2020, there were no borrowings outstanding under the new Revolving Credit Agreement. As of December 31, 2019, there was $68.9 million of borrowings outstanding, net of deferred financing costs of $1.1 million, under the new unsecured Revolving Credit Agreement. The average interest rate on the outstanding borrowings was 2.88% and 3.88% for the years ended December 31, 2020 and 2019, respectively. The Company recorded interest expense related to the unsecured senior Revolving Credit Agreement of $5.3 million, $10.0 million and $0.3 million for the year s ended December 31, 2020, 2019 and 2018, respectively. 5.125% Senior Notes On May 27, 2016, the Company issued an aggregate of $300.0 million principal amount of 5.125% Senior Notes due 2021. The 5.125% Senior Notes are general senior unsecured obligations of the Company. These 5.125% Senior Notes bear interest at a rate of 5.125% per year, payable in cash on May 27 and November 27 of each year, commencing November 27, 2016. The 5.125% Senior Notes will mature on May 27, 2021. The Company may redeem some or all of the notes at any time or from time to time for cash at certain “make-whole” redemption prices (as set forth in the Indenture). If a “Change of Control Triggering Event” (as defined in the Indenture) occurs, holders may require the Company to purchase all or a portion of their notes for cash at a price equal to 101% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date. The initial carrying value of the 5.125% Senior Notes was $295.8 million, net of the discount and debt issuance costs of $4.2 million. The issuance costs are amortized as interest expense and the carrying value of the 5.125% Senior Notes will accrete up to the face amount over the term of the notes. On August 5, 2020, the Company commenced a cash tender offer for any and all $300.0 million outstanding aggregate principal amount of its 5.125% Senior Notes. On August 11, 2020, the Company’s cash tender offer expired at 5:00 p.m., New York City time. As of the expiration time, $44.0 million aggregate principal amount of the 5.125% Senior Notes were validly tendered. These notes were redeemed on the settlement date of August 14, 2020. The carrying value of the 5.125% Senior Notes as of December 31, 2020 was $255.6 million. The Company recorded interest expense related to the 5.125% Senior Notes of $16.3 million, $16.2 million, and $16.2 million for the years ended December 31, 2020, 2019, and 2018. 5.375% Senior Notes On July 24, 2018, the Company issued an aggregate of $450.0 million principal amount of 5.375% Senior Notes. The 5.375% Senior Notes are general senior unsecured obligations of the Company. These 5.375% Senior Notes bear interest at a rate of 5.375% per year, payable in cash on January 24 and July 24 of each year, commencing January 24, 2019. The 5.375% Senior Notes will mature on July 24, 2023. The Company may redeem some or all of the 5.375% Senior Notes at any time or from time to time for cash at certain “make-whole” redemption prices (as set forth in the indenture related to the 5.375% Senior Notes ). If a “Change of Control Triggering Event” (as defined in the indenture related to the 5.375% Senior Notes ) occurs, holders may require the Company to purchase all or a portion of their notes for cash at a price equal to 101% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date. The initial carrying value of the 5.375% Senior Notes was $444.2 million, net of the discount and debt issuance costs of $5.8 million. The issuance costs are amortized as interest expense and the carrying value of the 5.375% Senior Notes will accrete up to the face amount over the term of the notes. The carrying value of the 5.375% Senior Notes as of December 31, 2020 was $446.6 million. The Company recorded interest expense related to the 5.375% Senior Notes of $25.5 million, $25.6 million and $11.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. 3.750% Senior Notes On September 27, 2019, the Company issued an aggregate of $300.0 million principal amount of 3.750% Senior Notes due October 1, 2024. The 3.750% Senior Notes are general unsecured obligations of the Company. The 3.750% Senior Notes bear interest at a rate of 3.750% per annum, payable on each April 1 and October 1, commencing April 1, 2020. The 3.750% Senior Notes will mature on October 1, 2024. The Company may redeem some or all of the 3.750% Senior Notes at any time or from time to time for cash at certain “make-whole” redemption prices (as set forth in the Indenture). If a “Change of Control Triggering Event” (as defined in the Indenture) occurs, holders may require the Company to purchase all or a portion of their notes for cash at a price equal to 101% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date. The initial carrying value of the 3.750% Senior Notes was $296.1 million, net of discount and debt issuance costs of $3.9 million. The issuance costs will be amortized as interest expense and the carrying value of the 3.750% Senior Notes will accrete up to the face amount over the term of the notes. The carrying value of the 3.750% Senior Notes was $296.9 million as of December 31, 2020. The Company recorded interest expense related to the 3.750% Senior Notes of $12.1 million and $3.2 million for the years ended December 31, 2020 and 2019, respectively. The Company did not record any interest expense related to the 3.750% Senior Notes for the year ended December 31, 2018. 4.375% Senior Notes On July 10, 2020, the Company issued an aggregate of $300.0 million principal amount of 4.375% Senior Notes. The 4.375% Senior Notes are general unsecured obligations of the Company. The 4.375% Senior Notes bear interest at a rate of 4.375% per year, payable in cash on June 15 and December 15 of each year, commencing December 15, 2020. The 4.375% Senior Notes will mature on December 15, 2025. The Company may redeem some or all of the 4.375% Senior Notes at any time or from time to time for cash at certain “make-whole” redemption prices. If a “Change of Control Triggering Event” occurs, holders may require the Company to purchase all or a portion of their notes for cash at a price equal to 101% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date. The initial carrying value of the 4.375% Senior Notes was $296.8 million, net of discount and debt issuance costs of $3.2 million. The issuance costs will be amortized as interest expense, and the carrying value of the 4.375% Senior Notes will accrete up to the face amount over the term of the notes. The carrying value of the 4.375% Senior Notes was $297.0 million as of December 31, 2020. The Company recorded interest expense related to the 4.375% Senior Notes of $6.5 million for year ended December 31, 2020. The Company did not record interest expense related to the 4.375% Senior Notes for years ended December 31, 2019 and 2018.

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