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Press Release: LPL Financial Announces Fourth -4-

· 02/04/2021 16:05
Q4 2020 Q3 2020 Change Q4 2019 Change ---------- ---------- ------ ---------- -------- Market Drivers S&P 500 Index (end of period) 3,756 3,363 12% 3,231 16% Fed Funds Daily Effective Rate (FFER) (average bps) 9 9 --bps 165 (156bps) Assets Advisory Assets(11) $461.2 $405.9 14% $365.8 26% Brokerage Assets(12) 441.9 404.4 9% 398.6 11% ------ ------ ------ Total Advisory and Brokerage Assets $903.1 $810.4 11% $764.4 18% Advisory % of Total Advisory and Brokerage Assets 51.1% 50.1% 100bps 47.8% 330bps Assets by Platform Corporate Platform Advisory Assets(13) $291.9 $253.9 15% $228.3 28% Hybrid Platform Advisory Assets(14) 169.3 152.0 11% 137.5 23% Brokerage Assets 441.9 404.4 9% 398.6 11% ------ ------ ------ Total Advisory and Brokerage Assets $903.1 $810.4 11% $764.4 18% Centrally Managed Assets Centrally Managed Assets(15) $ 67.1 $ 59.0 14% $ 52.4 28% Centrally Managed % of Total Advisory Assets 14.6% 14.5% 10bps 14.3% 30bpsQuarterly Results --------------------------------------- Q4 2020 Q3 2020 Q2 2020 ------------ ------------ ----------- Gross Profit(6) Advisory $ 638,181 $ 586,941 $523,370 Sales-based commissions 202,504 180,357 159,512 Trailing commissions 300,516 292,286 267,941 ----------- ----------- -------- Advisory and commission fees 1,141,201 1,059,584 950,823 Production based payout(7) (987,882) (917,831) (819,953) ----------- ----------- -------- Advisory and commission fees, net of payout 153,319 141,753 130,870 Client cash 105,019 108,705 116,266 Other asset-based(8) 153,374 144,846 130,801 Transaction and fee 129,750 119,747 119,478 Interest income and other, net(9) 10,082 8,484 9,397 ----------- ----------- -------- Total net advisory and commission fees and attachment revenue 551,544 523,535 506,812 Brokerage, clearing and exchange expense (17,762) (17,834) (18,565) ----------- ----------- -------- Gross Profit(6) 533,782 505,701 488,247 ----------- ----------- -------- G&A Expense Core G&A(10) 252,391 227,099 222,406 Regulatory charges 8,775 8,326 6,115 Promotional 48,342 57,970 44,540 Employee share-based compensation 7,542 7,420 8,040 Total G&A 317,050 300,815 281,101 ----------- ----------- -------- EBITDA(5) 216,732 204,886 207,146 ----------- ----------- -------- Depreciation and amortization 28,650 27,548 26,890 Amortization of intangible assets 17,270 16,829 16,689 Non-operating interest expense and other 24,979 25,179 26,289 INCOME BEFORE PROVISION FOR INCOME TAXES 145,833 135,330 137,278 PROVISION FOR INCOME TAXES 34,285 31,541 35,616 ----------- ----------- -------- NET INCOME $ 111,548 $ 103,789 $101,662 ======= ======= ======= Earnings per share, diluted $ 1.38 $ 1.29 $ 1.27 ======= ======= ======= Weighted-average shares outstanding, diluted 80,904 80,550 80,127 =========== =========== ======== EPS Prior to Amortization of Intangible Assets(5)(38) $ 1.53 $ 1.44 $ 1.42 ======= ======= =======Quarterly Results ---------------------------------------------------------------- Q4 2020 Q3 2020 % Change Q4 2019 % Change ------------ ------------ ---------- ------------ ---------- Gross Profit(6) Advisory $ 638,181 $ 586,941 9% $ 533,259 20% Sales-based commissions 202,504 180,357 12% 193,980 4% Trailing commissions 300,516 292,286 3% 282,940 6% ----------- ----------- ----------- Advisory and commission fees 1,141,201 1,059,584 8% 1,010,179 13% Production based payout(7) (987,882) (917,831) 8% (876,654) 13% ----------- ----------- ----------- Advisory and commission fees, net of payout 153,319 141,753 8% 133,525 15% Client cash 105,019 108,705 (3%) 155,322 (32%) Other asset-based(8) 153,374 144,846 6% 133,603 15% Transaction and fee 129,750 119,747 8% 118,291 10% Interest income and other, net(9) 10,082 8,484 19% 13,323 (24%) ----------- ----------- ----------- Total net advisory and commission fees and attachment revenue 551,544 523,535 5% 554,064 --% Brokerage, clearing and exchange expense (17,762) (17,834) --% (15,927) 12% ----------- ----------- ----------- Gross Profit(6) 533,782 505,701 6% 538,137 (1%) ----------- ----------- ----------- G&A Expense Core G&A(10) 252,391 227,099 11% 230,182 10% Regulatory charges 8,775 8,326 n/m 7,893 n/m Promotional 48,342 57,970 (17%) 51,050 (5%) Employee share-based compensation 7,542 7,420 2% 7,179 5% Total G&A 317,050 300,815 5% 296,304 7% ----------- ----------- ----------- EBITDA(5) 216,732 204,886 6% 241,833 (10%) ----------- ----------- ----------- Depreciation and amortization 28,650 27,548 4% 25,663 12% Amortization of intangible assets 17,270 16,829 3% 16,631 4% Non-operating interest expense and other 24,979 25,179 (1%) 31,384 (20%) Loss on extinguishment of debt -- -- n/m 3,156 n/m ----------- ----------- ----------- INCOME BEFORE PROVISION FOR INCOME TAXES 145,833 135,330 8% 164,999 (12%) PROVISION FOR INCOME TAXES 34,285 31,541 9% 38,323 (11%) ----------- ----------- ----------- NET INCOME $ 111,548 $ 103,789 7% $ 126,676 (12%) ======= ======= ======= Earnings per share, diluted $ 1.38 $ 1.29 7% $ 1.53 (10%) ======= ======= ======= Weighted-average shares outstanding, diluted 80,904 80,550 --% 82,695 (2%) =========== =========== =========== EPS Prior to Amortization of Intangible Assets(5)(38) $ 1.53 $ 1.44 6% $ 1.68 (9%) ======= ======= =======

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

LPL Financial Holdings Inc.

Management's Statements of Operations Trend(5)

(In thousands, except per share data)

(Unaudited)

LPL Financial Holdings Inc.

Operating Metrics(5)

(Dollars in billions, except where noted)

(Unaudited)

LPL Financial Holdings Inc.

Operating Metrics(5)

(Dollars in billions, except where noted)

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February 04, 2021 16:05 ET (21:05 GMT)