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Segment Reporting

3 Months Ended

12 Months Ended

Jun. 30, 2023

Mar. 31, 2023

15.	Segment Reporting

The Company has three reportable segments consisting of Ben Liquidity, Ben Custody and Customer ExAlt Trusts. As additional products and services are offered in the future, we expect to have additional reportable segments, including Ben Insurance Services and Ben Markets.

administrative and regulatory burden of holding alternative assets by offering full service bespoke custody and trust administration services, and specialized document custodian services to Customers. Certain of Ben’s operating subsidiary products and services involve or are offered to certain of the Customer ExAlt Trusts. Certain of the Customer Exalt Trusts hold interests in alternative assets and therefore recognize changes in such assets’ net asset value in earnings. Certain other Customer ExAlt Trusts pay interest on the ExAlt Loans to Ben Liquidity and transaction fees to Ben Liquidity and Ben Custody in connection with the liquidity transactions, and pay fees to Ben Custody for providing full-service trust administration services to the trustees of the Customer ExAlt Trusts. The amounts paid to Ben Liquidity and Ben Custody are eliminated solely for financial reporting purposes in our consolidated financial statements but directly impact the allocation of income (loss) to BCG’s and BCH’s equity holders.

The Corporate & Other category includes the following items, among others:

•

Equity-based compensation;

•

Gains (losses) on changes in the fair value of GWG Holdings common stock held by Ben;

•

Interest expense incurred on the corporate related debt transactions; and

•

Operations of Ben Insurance Services and Ben Markets that are not considered reportable segments as they do not meet the quantitative criteria to be separately reported.

The Corporate & Other category also consists of unallocated corporate overhead and administrative costs.

These segments are differentiated by the products and services they offer as well as by the information used by the Company’s chief operating decision maker to determine allocation of resources and assess performance. Operating income (loss) is the measure of profitability used by management to assess the performance of its segments and allocate resources. Performance is measured by the Company’s chief operating decision maker on an unconsolidated basis because management makes operating decisions and assesses the performance of each of the Company’s business segments based on financial and operating metrics and data that exclude the effects of consolidation of any of the Customer ExAlt Trusts.

The following tables include the results of each of the Company’s reportable segments reconciled to the consolidated financial statements (in thousands):


	Three Months Ended June 30, 2023
	Ben Liquidity			Ben Custody			Customer ExAlt Trusts			Corporate & Other			Consolidating Eliminations			Total
External revenues
Investment income, net	$	—		$	—		$	500		$	—		$	—		$	500
Loss on financial instruments, net		—			—			(1,803	)		(1,658	)		—			(3,461	)
Interest and dividend income		—			—			8			108			—			116
Trust services and administration revenues		—			8			—			94			—			102
Intersegment revenues
Interest income		12,007			—			—			—			(12,007	)		—
Trust services and administration revenues		—			6,568			—			—			(6,568	)		—

Total revenues		12,007			6,576			(1,295	)		(1,456	)		(18,575	)		(2,743	)

External expenses
Employee compensation and benefits		2,493			560			—			32,770			—			35,823
Interest expense		758			—			1,874			1,152			—			3,784
Professional services		633			501			1,261			7,978			—			10,373
Loss on impairment of goodwill		901,000			195,305			—			—			—			1,096,305
Other expenses		654			207			356			5,725			—			6,942
Intersegment expenses
Interest expense		—			—			29,780			—			(29,780	)		—
Provision for credit losses		9,495			—			—			—			(9,495	)		—
Other expenses		—			—			3,844			—			(3,844	)		—

Total expenses		915,033			196,573			37,115			47,625			(43,119	)		1,153,227

Operating income (loss)	$	(903,026	)	$	(189,997	)	$	(38,410	)	$	(49,081	)	$	24,544		$	(1,155,970	)


	Three Months Ended June 30, 2022
	Ben Liquidity			Ben Custody		Customer ExAlt Trusts			Corporate & Other			Consolidating Eliminations			Total
External revenues
Investment loss, net	$	—		$	—	$	(25,117	)	$	—		$	—		$	(25,117	)
Loss on financial instruments, net		—			—		(10,784	)		(1,236	)		—			(12,020	)
Interest and dividend income		—			—		4			81			—			85
Trust services and administration revenues		—			8		—			—						8
Intersegment revenues
Interest income		14,311			—		—			—			(14,311	)		—
Trust services and administration revenues		—			7,282		—			—			(7,282	)		—

Total revenues		14,311			7,290		(35,897	)		(1,155	)		(21,593	)		(37,044	)

External expenses
Employee compensation and benefits		2,204			459		—			8,902			—			11,565
Interest expense		634			—		2,329			656			—			3,619
Professional services		693			505		582			6,077			—			7,857
Provision for credit losses		—			—		12,607			6,183			—			18,790
Other expenses		531			163		600			5,782			—			7,076
Intersegment expenses
Interest expense		—			—		23,691			—			(23,691	)		—
Provision for loan losses		43,102			—		—			—			(43,102	)		—
Other expenses		—			—		4,466			—			(4,466	)		—

Total expenses		47,164			1,127		44,275			27,600			(71,259	)		48,907

Operating income (loss)	$	(32,853	)	$	6,163	$	(80,172	)	$	(28,755	)	$	49,666		$	(85,951	)


	As of June 30, 2023
	Ben Liquidity		Ben Custody		Customer ExAlt Trusts		Corporate & Other		Consolidating Eliminations			Total
Loans to Customer ExAlt Trusts, net	$	304,167	$	—	$	—	$	—	$	(304,167	)	$	—
Investments, at fair value		—		—		486,944		2,346		—			489,290
Other assets		6,275		49,631		8,378		16,807		(49,239	)		31,852
Goodwill and intangible assets, net		824,880		398,914		—		50,927		—			1,274,721

Total Assets	$	1,135,322	$	448,545	$	495,322	$	70,080	$	(353,406	)	$	1,795,863


	As of March 31, 2023
	Ben Liquidity		Ben Custody		Customer ExAlt Trusts		Corporate & Other		Consolidating Eliminations			Total
Loans to Customer ExAlt Trusts, net	$	376,253	$	—	$	—	$	—	$	(376,253	)	$	—
Investments, at fair value		—		—		491,859		5,362		—			497,221
Other assets		9,447		47,466		10,447		21,849		(46,761	)		42,448
Goodwill and intangible assets, net		1,725,880		594,219		—		50,927		—			2,371,026

Total Assets	$	2,111,580	$	641,685	$	502,306	$	78,138	$	(423,014	)	$	2,910,695

18. Segment Reporting

As the central operating hub of the company, Ben Liquidity is responsible for offering Ben’s fiduciary alternative asset liquidity and financing products through AltAccess. Ben Custody delivers products that address the administrative and regulatory burden of holding alternative assets by offering full service bespoke custody and trust administration services, and specialized document custodian services to Customers. Certain of Ben’s operating subsidiary products and services involve or are offered to certain of the Customer ExAlt Trusts. Certain of the Customer Exalt Trusts hold interests in alternative assets and therefore recognize changes in such assets’ net asset value in earnings. Certain other Customer ExAlt Trusts pay interest on the ExAlt Loans to Ben Liquidity and transaction fees to Ben Liquidity and Ben Custody in connection with the liquidity transactions, and pay fees to Ben Custody for providing full-service trust administration services to the trustees of the Customer ExAlt Trusts. The amounts paid to Ben Liquidity and Ben Custody are eliminated solely for financial reporting purposes in our consolidated financial statements but directly impact the allocation of income (loss) to BCG’s and BCH’s equity holders.

The Corporate & Other category includes the following items, among others:

•

Equity-based compensation;

•

Gains (losses) on changes in the fair value of GWG Holdings common stock held by Ben;

•

Interest expense incurred on the corporate related debt transactions (i.e., commercial loan agreement); and

•

Operations of Ben Insurance Services and Ben Markets that are not considered reportable segments as they do not meet the quantitative criteria to be separately reported.

The Corporate & Other category also consists of unallocated corporate overhead and administrative costs.

The following tables include the results of each of the Company’s reportable segments reconciled to the consolidated financial statements (in thousands):


	Year Ended March 31, 2023
	Ben Liquidity			Ben Custody		Customer ExAlt Trusts			Corporate & Other			Consolidating Eliminations			Total
External revenues
Investment loss, net	$	—		$	—	$	(54,010	)	$	—		$	—		$	(54,010	)
Loss on financial instruments, net		—			—		(35,085	)		(16,336	)		—			(51,421	)
Interest income		—			—		54			358			—			412
Trust services and administration revenues		—			30		—			—			—			30
Other income		—			—		—			86			—			86
Intersegment revenues
Interest income		50,819			—		—			—			(50,819	)		—
Trust services and administration revenues		—			29,012		—			—			(29,012	)		—

Total revenues		50,819			29,042		(89,041	)		(15,892	)		(79,831	)		(104,903	)

External expenses
Employee compensation and benefits		8,527			2,219		—			34,781			—			45,527
Interest expense		2,893			—		8,957			3,621			—			15,471
Professional services		2,849			2,018		5,033			28,522			—			38,422
Provision for credit losses		—			—		13,843			6,737			—			20,580
Other expenses		2,313			759		1,905			23,292			—			28,269
Intersegment expenses
Interest expense		—			—		110,905			—			(110,905	)		—
Provision for loan losses		80,749			—		—			—			(80,749	)		—
Other expenses		—			—		18,354			—			(18,354	)		—

Total expenses		97,331			4,996		158,997			96,953			(210,008	)		148,269

Operating income (loss)	$	(46,512	)	$	24,046	$	(248,038	)	$	(112,845	)	$	130,177		$	(253,172	)


	As of March 31, 2023
	Ben Liquidity		Ben Custody		Customer ExAlt Trusts		Corporate & Other		Consolidating Eliminations			Total
Loans to Customer ExAlt Trusts, net	$	376,253	$	—	$	—	$	—	$	(376,253	)	$	—
Investments, at fair value		—		—		491,859		5,362		—			497,221
Other assets		9,447		47,466		10,447		21,849		(46,761	)		42,448
Goodwill and intangible assets, net		1,725,880		594,219		—		50,927		—			2,371,026

Total Assets	$	2,111,580	$	641,685	$	502,306	$	78,138	$	(423,014	)	$	2,910,695


	Three Months Ended March 31, 2022
	Ben Liquidity			Ben Custody		Customer ExAlt Trusts			Corporate & Other			Consolidating Eliminations			Total
External revenues
Investment loss, net	$	—		$	—	$	(10,811	)	$	—		$	—			(10,811	)
Loss on financial instruments, net		—			—		(44,661	)		(11,350	)		—			(56,011	)
Interest income		—			—		—			73			—			73
Trust services and administration revenues		121			8		—			—			—			129
Other income		—			—		—			2			—			2
Intersegment revenues
Interest income		17,790			—		—			—			(17,790	)		—
Trust services and administration revenues		—			8,408		—			—			(8,408	)		—

Total revenues		17,911			8,416		(55,472	)		(11,275	)		(26,198	)		(66,618	)

External expenses
Employee compensation and benefits		2,200			517		—			7,408			—			10,125
Interest expense		538			—		1,046			526			—			2,110
Professional services		915			446		—			4,088			—			5,449
Provision for credit losses		—			—		4,774			4,609			—			9,383
Other expenses		436			152		1,860			3,701			—			6,149
Intersegment expenses
Interest expense		—			—		24,694			—			(24,694	)		—
Provision for loan losses		34,121			—		—			—			(34,121	)		—
Other expenses		—			—		5,767			—			(5,767	)		—

Total expenses		38,210			1,115		38,141			20,332			(64,582	)		33,216

Operating income (loss)	$	(20,299	)	$	7,301	$	(93,613	)	$	(31,607	)	$	38,384		$	(99,834	)

Certain prior year items have been reclassified to conform with current year presentation.


	As of March 31, 2022
	Ben Liquidity		Ben Custody		Customer ExAlt Trusts		Corporate & Other		Consolidating Eliminations			Total
Loans to Customer ExAlt Trusts, net	$	418,793	$	—	$	—	$	—	$	(418,793	)	$	—
Investments, at fair value		—		—		659,921		14,249		—			674,170
Other assets		31,563		46,933		20,106		43,670		(46,284	)		95,988
Goodwill and intangible assets, net		—		—		—		2,370,850		—			2,370,850

Total Assets	$	450,356	$	46,933	$	680,027	$	2,428,769	$	(465,077	)	$	3,141,008


	Year Ended December 31, 2021
	Ben Liquidity		Ben Custody		Customer ExAlt Trusts			Corporate & Other			Consolidating Eliminations			Total
External revenues
Investment income, net	$	—	$	—	$	15,534		$	—		$	—			15,534
Gain on financial instruments, net		—		—		29,512			2,325			—			31,837
Interest income		—		—		7,110			288			—			7,398
Trust services and administration revenues		510		30		—			—			—			540
Other income		—		—		—			2			—			2
Intersegment revenues
Interest income		55,929		—		—			—			(55,929	)		—
Trust services and administration revenues		—		20,258		—			—			(20,258	)		—

Total revenues		56,439		20,288		52,156			2,615			(76,187	)		55,311

External expenses
Employee compensation and benefits		8,328		2,031		—			38,164			—			48,523
Interest expense		12,812		—		—			14,645			—			27,457
Professional services		3,100		1,552		350			12,799			—			17,801
Provision for credit losses		—		—		14,318			4,437			—			18,755
Other expenses		2,127		512		695			10,561			—			13,895
Intersegment expenses
Interest expense		—		—		70,963			—			(70,963	)		—
Provision for loan losses		8,881		—		—			—			(8,881	)		—
Other expenses		—		—		12,180			—			(12,180	)		—

Total expenses		35,248		4,095		98,506			80,606			(92,024	)		126,431

Operating income (loss)	$	21,191	$	16,193	$	(46,350	)	$	(77,991	)	$	15,837		$	(71,120	)

Certain prior year items have been reclassified to conform with current year presentation.


	Year Ended December 31, 2020
	Ben Liquidity			Ben Custody		Customer ExAlt Trusts			Corporate & Other			Consolidating Eliminations			Total
External revenues
Investment income, net	$	—		$	—	$	132,620		$	—		$	—			132,620
Loss on financial instruments, net		—			—		(15,838	)		(14,832	)		—			(30,670	)
Interest income		—			—		1,819			285			(22	)		2,082
Trust services and administration revenues		—			30		—			—			—			30
Other income		—			—		—			36,267			—			36,267
Intersegment revenues
Interest income		51,819			—		—			—			(51,819	)		—
Trust services and administration revenues		—			19,379		—			—			(19,379	)		—

Total revenues		51,819			19,409		118,601			21,720			(71,220	)		140,329

External expenses
Employee compensation and benefits		6,216			1,915		—			120,451			—			128,582
Interest expense		11,496			—		4,675			16,380			—			32,551
Professional services		3,656			1,190		—			14,199			—			19,045
Other expenses		(165	)		382		502			6,845			—			7,564
Intersegment expenses
Interest expense		—			—		63,463			—			(63,463	)		—
Provision for loan losses		5,378			—		—			—			(5,378	)		—
Other expenses		—			—		12,177			—			(12,177	)		—

Total expenses		26,581			3,487		80,817			157,875			(81,018	)		187,742

Operating income (loss)	$	25,238		$	15,922	$	37,784		$	(136,155	)	$	9,798		$	(47,413	)

Certain prior year items have been reclassified to conform with current year presentation.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 26
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details