SEC Filing | Evercore Inc.

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

_____________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 001-32975

____________________________________________________

EVERCORE INC.

(Exact name of registrant as specified in its charter)

____________________________________________________


Delaware						20-4748747
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)


55 East 52nd Street
New York,	New York	10055

(Address of principal executive offices)

Registrant’s telephone number, including area code: (212) 857-3100

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share	EVR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s Class A common stock, par value $0.01 per share, outstanding as of July 21, 2023 was 37,890,172. The number of shares of the registrant’s Class B common stock, par value $0.01 per share, outstanding as of July 21, 2023 was 45 (excluding 55 shares of Class B common stock held by a subsidiary of the registrant).

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In this report, references to "Evercore", the "Company", "we", "us", "our" refer to Evercore Inc., a Delaware corporation, and its consolidated subsidiaries. Unless the context otherwise requires, references to (1) "Evercore Inc." refer solely to Evercore Inc., and not to any of its consolidated subsidiaries and (2) "Evercore LP" refer solely to Evercore LP, a Delaware limited partnership, and not to any of its consolidated subsidiaries.


		Page
Part I. Financial Information
Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	55
Item 4.	Controls and Procedures	56
Part II. Other Information
Item 1.	Legal Proceedings	57
Item 2.	Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	57
Item 6.	Exhibits	58
Signatures

Table of Contents

PART I. FINANCIAL INFORMATION


Item 1.			Financial Statements



Condensed Consolidated Financial Statements (Unaudited)			Page
Condensed Consolidated Statements of Financial Condition as of June 3 0 , 2023 and December 31, 2022			4
Condensed Consolidated Statements of Operations for the three and six months ended June 3 0 , 2023 and 2022			5
Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 3 0 , 2023 and 2022			6
Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 3 0 , 2023 and 2022			7
Condensed Consolidated Statements of Cash Flows for the six months ended June 3 0 , 2023 and 2022			8
Notes to Unaudited Condensed Consolidated Financial Statements			9

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EVERCORE INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)

(dollars in thousands, except share data)



	June 30, 2023		December 31, 2022
Assets
Current Assets
Cash and Cash Equivalents	$	520,631	$	663,400
Investment Securities and Certificates of Deposit (includes available-for-sale debt securities with an amortized cost of $328,994 and $802,652 at June 30, 2023 and December 31, 2022, respectively)	962,121		1,432,716



Accounts Receivable (net of allowances of $8,712 and $4,683 at June 30, 2023 and December 31, 2022, respectively)	322,819		385,131
Receivable from Employees and Related Parties	18,889		21,914

Other Current Assets	154,067		203,570
Total Current Assets	1,978,527		2,706,731

Investments	42,023		43,047
Deferred Tax Assets	265,194		257,166
Operating Lease Right-of-Use Assets	374,742		237,561
Furniture, Equipment and Leasehold Improvements (net of accumulated depreciation and amortization of $201,647 and $187,077 at June 30, 2023 and December 31, 2022, respectively)	143,468		143,268
Goodwill	125,351		123,285


Other Assets	122,139		109,865
Total Assets	$	3,051,444	$	3,620,923
Liabilities and Equity
Current Liabilities
Accrued Compensation and Benefits	$	297,575	$	918,489
Accounts Payable and Accrued Expenses	34,060		28,807

Payable to Employees and Related Parties	50,991		41,235

Operating Lease Liabilities	32,944		37,968
Taxes Payable	5,704		9,842


Other Current Liabilities	40,875		34,195
Total Current Liabilities	462,149		1,070,536
Operating Lease Liabilities	421,468		278,078
Notes Payable	373,553		371,774

Amounts Due Pursuant to Tax Receivable Agreements	61,279		61,169
Other Long-term Liabilities	128,415		112,948
Total Liabilities	1,446,864		1,894,505
Commitments and Contingencies (Note 15)

Equity
Evercore Inc. Stockholders' Equity
Common Stock
Class A, par value $0.01 per share (1,000,000,000 shares authorized, 81,914,589 and 79,686,375 issued at June 30, 2023 and December 31, 2022, respectively, and 37,886,311 and 38,347,262 outstanding at June 30, 2023 and December 31, 2022, respectively)	819		797
Class B, par value $0.01 per share (1,000,000 shares authorized, 45 and 50 issued and outstanding at June 30, 2023 and December 31, 2022, respectively)	—		—
Additional Paid-In-Capital	3,011,969		2,861,775
Accumulated Other Comprehensive Income (Loss)	(20,392)		(27,942)
Retained Earnings	1,823,412		1,768,098
Treasury Stock at Cost (44,028,278 and 41,339,113 shares at June 30, 2023 and December 31, 2022, respectively)	(3,410,153)		(3,065,917)
Total Evercore Inc. Stockholders' Equity	1,405,655		1,536,811
Noncontrolling Interest	198,925		189,607
Total Equity	1,604,580		1,726,418
Total Liabilities and Equity	$	3,051,444	$	3,620,923

See Notes to Unaudited Condensed Consolidated Financial Statements.

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EVERCORE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(dollars and share amounts in thousands, except per share data)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Revenues
Investment Banking & Equities:
Advisory Fees	$	374,556	$	576,245	$	837,118	$	1,200,809
Underwriting Fees	38,200		13,516		61,083		49,822
Commissions and Related Revenue	50,048		52,485		98,113		103,383
Asset Management and Administration Fees	16,575		15,968		32,533		33,083
Other Revenue, Including Interest and Investments	24,221		(23,039)		51,067		(24,818)
Total Revenues	503,600		635,175		1,079,914		1,362,279
Interest Expense	4,181		4,258		8,352		8,508
Net Revenues	499,419		630,917		1,071,562		1,353,771
Expenses
Employee Compensation and Benefits	338,374		388,971		705,246		818,706
Occupancy and Equipment Rental	21,521		19,608		41,900		38,785
Professional Fees	27,465		27,767		51,602		51,913
Travel and Related Expenses	17,422		14,786		32,625		22,612
Communications and Information Services	17,836		14,384		33,571		30,412
Depreciation and Amortization	5,952		6,597		12,525		13,707
Execution, Clearing and Custody Fees	2,965		2,631		5,730		5,428
Special Charges, Including Business Realignment Costs	—		532		2,921		532

Other Operating Expenses	10,168		9,459		20,822		16,130
Total Expenses	441,703		484,735		906,942		998,225
Income Before Income from Equity Method Investments and Income Taxes	57,716		146,182		164,620		355,546
Income from Equity Method Investments	1,542		2,274		3,010		4,786
Income Before Income Taxes	59,258		148,456		167,630		360,332
Provision for Income Taxes	17,097		38,562		33,228		73,344





Net Income	42,161		109,894		134,402		286,988
Net Income Attributable to Noncontrolling Interest	4,956		14,267		13,819		33,345
Net Income Attributable to Evercore Inc.	$	37,205	$	95,627	$	120,583	$	253,643
Net Income Attributable to Evercore Inc. Common Shareholders	$	37,205	$	95,627	$	120,583	$	253,643




Weighted Average Shares of Class A Common Stock Outstanding
Basic	38,211		39,834		38,360		39,507
Diluted	39,288		41,108		39,863		41,395
Net Income Per Share Attributable to Evercore Inc. Common Shareholders:
Basic	$	0.97	$	2.40	$	3.14	$	6.42
Diluted	$	0.95	$	2.33	$	3.02	$	6.13

See Notes to Unaudited Condensed Consolidated Financial Statements.

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EVERCORE INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(dollars in thousands)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022

Net Income	$	42,161	$	109,894	$	134,402	$	286,988
Other Comprehensive Income (Loss), net of tax:
Unrealized Gain (Loss) on Securities and Investments, net	(4)		304		(3,250)		307
Foreign Currency Translation Adjustment Gain (Loss), net	5,793		(18,519)		11,514		(21,539)
Other Comprehensive Income (Loss)	5,789		(18,215)		8,264		(21,232)
Comprehensive Income	47,950		91,679		142,666		265,756
Comprehensive Income Attributable to Noncontrolling Interest	5,454		12,593		14,533		31,398
Comprehensive Income Attributable to Evercore Inc.	$	42,496	$	79,086	$	128,133	$	234,358

See Notes to Unaudited Condensed Consolidated Financial Statements.

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EVERCORE INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)

(dollars in thousands, except share data)


	For the Three Months Ended June 30, 2023
						Accumulated
				Additional		Other
	Class A Common Stock			Paid-In		Comprehensive		Retained		Treasury Stock			Noncontrolling		Total
	Shares	Dollars		Capital		Income (Loss)		Earnings		Shares	Dollars		Interest		Equity
Balance at March 31, 2023	81,836,929	$	818	$	2,931,682	$	(25,683)	$	1,819,599	(43,491,694)	$	(3,350,483)	$	193,278	$	1,569,211

Net Income	—	—		—		—		37,205		—	—		4,956		42,161
Other Comprehensive Income	—	—		—		5,291		—		—	—		498		5,789
Treasury Stock Purchases	—	—		—		—		—		(536,584)	(59,670)		—		(59,670)
Evercore LP Units Exchanged for Class A Common Stock	21,303	—		1,407		—		—		—	—		(1,296)		111
Equity-based Compensation Awards	56,357	1		80,724		—		—		—	—		6,175		86,900

Dividends	—	—		—		—		(33,392)		—	—		—		(33,392)
Noncontrolling Interest (Note 12)	—	—		(1,844)		—		—		—	—		(4,686)		(6,530)
Balance at June 30, 2023	81,914,589	$	819	$	3,011,969	$	(20,392)	$	1,823,412	(44,028,278)	$	(3,410,153)	$	198,925	$	1,604,580

	For the Six Months Ended June 30, 2023
						Accumulated
				Additional		Other
	Class A Common Stock			Paid-In		Comprehensive		Retained		Treasury Stock			Noncontrolling		Total
	Shares	Dollars		Capital		Income (Loss)		Earnings		Shares	Dollars		Interest		Equity
Balance at December 31, 2022	79,686,375	$	797	$	2,861,775	$	(27,942)	$	1,768,098	(41,339,113)	$	(3,065,917)	$	189,607	$	1,726,418

Net Income	—	—		—		—		120,583		—	—		13,819		134,402
Other Comprehensive Income	—	—		—		7,550		—		—	—		714		8,264
Treasury Stock Purchases	—	—		—		—		—		(2,689,165)	(344,236)		—		(344,236)

Evercore LP Units Exchanged for Class A Common Stock	44,803	—		3,821		—		—		—	—		(2,774)		1,047
Equity-based Compensation Awards	2,183,411	22		148,217		—		—		—	—		12,635		160,874

Dividends	—	—		—		—		(65,269)		—	—		—		(65,269)
Noncontrolling Interest (Note 12)	—	—		(1,844)		—		—		—	—		(15,076)		(16,920)

Balance at June 30, 2023	81,914,589	$	819	$	3,011,969	$	(20,392)	$	1,823,412	(44,028,278)	$	(3,410,153)	$	198,925	$	1,604,580







































	For the Three Months Ended June 30, 2022
						Accumulated
				Additional		Other
	Class A Common Stock			Paid-In		Comprehensive		Retained		Treasury Stock			Noncontrolling		Total
	Shares	Dollars		Capital		Income (Loss)		Earnings		Shares	Dollars		Interest		Equity
Balance at March 31, 2022	79,460,450	$	795	$	2,679,900	$	(14,830)	$	1,544,765	(38,891,974)	$	(2,800,593)	$	177,632	$	1,587,669

Net Income	—	—		—		—		95,627		—	—		14,267		109,894
Other Comprehensive Income (Loss)	—	—		—		(16,541)		—		—	—		(1,674)		(18,215)
Treasury Stock Purchases	—	—		—		—		—		(1,568,711)	(172,494)		—		(172,494)
Evercore LP Units Exchanged for Class A Common Stock	26,200	—		1,655		—		—		—	—		(1,530)		125
Equity-based Compensation Awards	111,113	1		64,690		—		—		—	—		6,308		70,999

Dividends	—	—		—		—		(32,416)		—	—		—		(32,416)
Noncontrolling Interest (Note 12)	—	—		—		—		—		—	—		(24,853)		(24,853)
Balance at June 30, 2022	79,597,763	$	796	$	2,746,245	$	(31,371)	$	1,607,976	(40,460,685)	$	(2,973,087)	$	170,150	$	1,520,709


	For the Six Months Ended June 30, 2022
						Accumulated
				Additional		Other
	Class A Common Stock			Paid-In		Comprehensive		Retained		Treasury Stock			Noncontrolling		Total
	Shares	Dollars		Capital		Income (Loss)		Earnings		Shares	Dollars		Interest		Equity
Balance at December 31, 2021	74,804,288	$	748	$	2,458,779	$	(12,086)	$	1,418,382	(36,900,858)	$	(2,545,452)	$	314,910	$	1,635,281

Net Income	—	—		—		—		253,643		—	—		33,345		286,988
Other Comprehensive Income (Loss)	—	—		—		(19,285)		—		—	—		(1,947)		(21,232)
Treasury Stock Purchases	—	—		—		—		—		(3,559,827)	(427,635)		—		(427,635)
Evercore LP Units Exchanged for Class A Common Stock	2,572,605	26		163,689		—		—		—	—		(159,307)		4,408
Equity-based Compensation Awards	2,220,870	22		125,138		—		—		—	—		12,529		137,689

Dividends	—	—		—		—		(64,049)		—	—		—		(64,049)
Noncontrolling Interest (Note 12)	—	—		(1,361)		—		—		—	—		(29,380)		(30,741)
Balance at June 30, 2022	79,597,763	$	796	$	2,746,245	$	(31,371)	$	1,607,976	(40,460,685)	$	(2,973,087)	$	170,150	$	1,520,709

See Notes to Unaudited Condensed Consolidated Financial Statements.

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EVERCORE INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(dollars in thousands)


	For the Six Months Ended June 30,
	2023		2022
Cash Flows From Operating Activities
Net Income	$	134,402	$	286,988
Adjustments to Reconcile Net Income to Net Cash Provided by (Used In) Operating Activities:
Net (Gains) Losses on Investments, Investment Securities and Contingent Consideration	(23,856)		28,678
Equity Method Investments, Including Gain on Sale	1,437		3,968
Equity-Based and Other Deferred Compensation	272,363		238,641


Noncash Lease Expense	21,377		18,760
Depreciation, Amortization and Accretion, net	6,109		14,386
Bad Debt Expense	5,297		1,503


Deferred Taxes	(9,232)		(8,369)
Decrease (Increase) in Operating Assets:
Investment Securities	3,105		(528)


Accounts Receivable	60,781		21,713
Receivable from Employees and Related Parties	3,092		3,917

Other Assets	38,497		(67,406)
(Decrease) Increase in Operating Liabilities:
Accrued Compensation and Benefits	(715,222)		(705,445)
Accounts Payable and Accrued Expenses	2,637		5,865

Payables to Employees and Related Parties	5,534		25,801

Taxes Payable	(4,138)		(16,531)
Other Liabilities	(7,732)		(20,561)
Net Cash Provided by (Used in) Operating Activities	(205,549)		(168,620)
Cash Flows From Investing Activities
Investments Purchased	(37)		—
Proceeds from Sale of Investments	—		18,300

Distributions of Private Equity Investments	72		27
Investment Securities:
Proceeds from Sales and Maturities of Investment Securities	2,227,084		1,703,871
Purchases of Investment Securities	(1,804,833)		(1,078,819)
Maturity of Certificates of Deposit	124,728		138,305
Purchase of Certificates of Deposit	(54,267)		(154,640)





Purchase of Furniture, Equipment and Leasehold Improvements	(12,374)		(11,449)

Net Cash Provided by Investing Activities	480,373		615,595
Cash Flows From Financing Activities

Issuance of Noncontrolling Interests	733		300

Distributions to Noncontrolling Interests	(15,651)		(32,541)







Payment of Notes Payable	—		(67,000)
Issuance of Notes Payable	—		67,000
Debt Issuance Costs and Make-Whole Amount	—		(1,641)
Purchase of Treasury Stock and Noncontrolling Interests	(348,264)		(457,068)

Dividends	(70,279)		(70,868)

Net Cash Provided by (Used in) Financing Activities	(433,461)		(561,818)
Effect of Exchange Rate Changes on Cash	15,988		(19,056)
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash	(142,649)		(133,899)
Cash, Cash Equivalents and Restricted Cash – Beginning of Period	672,123		587,293
Cash, Cash Equivalents and Restricted Cash – End of Period	$	529,474	$	453,394











SUPPLEMENTAL CASH FLOW DISCLOSURE
Payments for Interest	$	8,099	$	9,164
Payments for Income Taxes	$	54,874	$	140,187


Accrued Dividends	$	8,659	$	8,362

Settlement of Sale of Trilantic VI	$	—	$	9,188

























Debt Issuance Costs Accrued	$	—	$	185

See Notes to Unaudited Condensed Consolidated Financial Statements.

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EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands, except per share amounts, unless otherwise noted)

Note 1 – Organization

Evercore Inc., together with its subsidiaries (the "Company"), is an investment banking and investment management firm, incorporated in Delaware and headquartered in New York, New York. The Company is a holding company which owns a controlling interest in, and is the sole general partner of, Evercore LP, a Delaware limited partnership ("Evercore LP"). The Company operates from its offices and through its affiliates in the Americas, Europe, the Middle East and Asia.

The Investment Banking & Equities segment includes the investment banking business through which the Company provides advice to clients on significant mergers, acquisitions, divestitures, shareholder activism and other strategic corporate transactions, with a particular focus on advising prominent multinational corporations and substantial private equity firms on large, complex transactions. The Company also provides restructuring advice to companies in financial transition, as well as to creditors, shareholders and potential acquirers. In addition, the Company provides its clients with capital markets advice, underwrites securities offerings, raises funds for financial sponsors and provides advisory services focused on partnerships and private funds interests, as well as on primary and secondary transactions for real estate oriented financial sponsors and private equity interests. The Investment Banking & Equities segment also includes the equities business through which the Company offers macroeconomic, policy and fundamental equity research and agency-based equity securities trading for institutional investors.

The Investment Management segment includes the wealth management business through which the Company provides investment advisory, wealth management and fiduciary services for high-net-worth individuals and associated entities, and the private equity business, which holds interests in private equity funds which are not managed by the Company.

Note 2 – Significant Accounting Policies

For a further discussion of the Company's accounting policies, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Basis of Presentation – The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q. As permitted by the rules and regulations of the United States Securities and Exchange Commission, the unaudited condensed consolidated financial statements contain certain condensed financial information and exclude certain footnote disclosures normally included in audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The accompanying condensed consolidated financial statements are unaudited and are prepared in accordance with U.S. GAAP. In the opinion of the Company's management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, including normal recurring accruals, necessary to fairly present the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2022. The December 31, 2022 Unaudited Condensed Consolidated Statements of Financial Condition data was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP. Operating results for interim periods are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023.

The accompanying unaudited condensed consolidated financial statements of the Company are comprised of the consolidation of Evercore LP and Evercore LP's wholly-owned and majority-owned direct and indirect subsidiaries, including Evercore Group L.L.C. ("EGL"), a registered broker-dealer in the U.S. The Company's policy is to consolidate all subsidiaries in which it has a controlling financial interest, as well as any variable interest entities ("VIEs") where the Company is deemed to be the primary beneficiary, when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE. The Company reviews factors, including the rights of the equity holders and obligations of equity holders to absorb losses or receive expected residual returns, to determine if the investment is a VIE. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly or indirectly by the Company. The consolidation analysis is generally performed qualitatively. This analysis, which requires judgment, is performed at each reporting date.

Evercore LP is a VIE and the Company is the primary beneficiary. Specifically, the Company has the majority economic interest in Evercore LP and has decision making authority that significantly affects the economic performance of the entity while the limited partners have no kick-out or substantive participating rights. The assets and liabilities of Evercore LP represent substantially all of the consolidated assets and liabilities of the Company with the exception of U.S. corporate taxes

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EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands, except per share amounts, unless otherwise noted)

and related items, which are presented on the Company's (Parent Company Only) Condensed Statements of Financial Condition in Note 24 to the Company's consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Evercore ISI International Limited ("Evercore ISI U.K."), Evercore Partners International LLP ("Evercore U.K."), Evercore (Japan) Ltd. ("Evercore Japan"), Evercore Consulting (Beijing) Co. Ltd. ("Evercore Beijing") and Evercore Partners Canada Ltd. ("Evercore Canada") are also VIEs, and the Company is the primary beneficiary of these VIEs. Specifically for Evercore ISI U.K., Evercore Japan, Evercore Beijing and Evercore Canada, the Company provides financial support through transfer pricing agreements with these entities, which exposes the Company to losses that are potentially significant to these entities, and has decision making authority that significantly affects the economic performance of these entities. The Company has the majority economic interest in Evercore U.K. and has decision making authority that significantly affects the economic performance of this entity. The Company included in its Unaudited Condensed Consolidated Statements of Financial Condition Evercore ISI U.K., Evercore U.K., Evercore Japan, Evercore Beijing and Evercore Canada assets of $354,842 and liabilities of $174,350 at June 30, 2023 and assets of $584,192 and liabilities of $247,884 at December 31, 2022.

All intercompany balances and transactions with the Company's subsidiaries have been eliminated upon consolidation.

Note 3 – Recent Accounting Pronouncements

The Company did not adopt any new accounting standards that had a material impact on the Company's unaudited condensed consolidated financial statements during the three and six months ended June 30, 2023. The Company continues to monitor recently issued accounting standards to assess the impact on our unaudited condensed consolidated financial statements.

Note 4 – Revenue and Accounts Receivable

The following table presents revenue recognized by the Company for the three and six months ended June 30, 2023 and 2022:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Investment Banking & Equities:

Advisory Fees	$	374,556	$	576,245	$	837,118	$	1,200,809

Underwriting Fees	38,200		13,516		61,083		49,822

Commissions and Related Revenue	50,048		52,485		98,113		103,383

Total Investment Banking & Equities	$	462,804	$	642,246	$	996,314	$	1,354,014

Investment Management:
Asset Management and Administration Fees:
Wealth Management	$	16,575	$	15,968	$	32,533	$	33,083


Total Investment Management	$	16,575	$	15,968	$	32,533	$	33,083

Contract Balances

The change in the Company’s contract assets and liabilities during the following periods primarily reflects timing differences between the Company’s performance and the client’s payment. The Company’s receivables, contract assets and deferred revenue (contract liabilities) for the six months ended June 30, 2023 and 2022 are as follows:

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EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands, except per share amounts, unless otherwise noted)


	For the Six Months Ended June 30, 2023
	Receivables (Current)(1)		Receivables (Long-term)(2)		Contract Assets (Current)(3)		Contract Assets (Long-term)(2)		Deferred Revenue (Current Contract Liabilities)(4)		Deferred Revenue (Long-term Contract Liabilities)(5)
Balance at January 1, 2023	$	385,131	$	64,139	$	110,468	$	8,028	$	5,071	$	—
Increase (Decrease)	(62,312)		(375)		(57,514)		9,910		957		—
Balance at June 30, 2023	$	322,819	$	63,764	$	52,954	$	17,938	$	6,028	$	—

	For the Six Months Ended June 30, 2022
	Receivables (Current)(1)		Receivables (Long-term)(2)		Contract Assets (Current)(3)		Contract Assets (Long-term)(2)		Deferred Revenue (Current Contract Liabilities)(4)		Deferred Revenue (Long-term Contract Liabilities)(5)
Balance at January 1, 2022	$	351,668	$	87,764	$	14,092	$	12,945	$	9,257	$	147
Increase (Decrease)	(33,678)		(24,418)		51,177		(11,407)		366		—
Balance at June 30, 2022	$	317,990	$	63,346	$	65,269	$	1,538	$	9,623	$	147

(1)Included in Accounts Receivable on the Unaudited Condensed Consolidated Statements of Financial Condition.

(2)Included in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition.

(3)Included in Other Current Assets on the Unaudited Condensed Consolidated Statements of Financial Condition.

(4)Included in Other Current Liabilities on the Unaudited Condensed Consolidated Statements of Financial Condition.

(5)Included in Other Long-term Liabilities on the Unaudited Condensed Consolidated Statements of Financial Condition.

The Company's contract assets represent arrangements in which an estimate of variable consideration has been included in the transaction price and thereby recognized as revenue that precedes the contractual due date. Under Accounting Standards Codification ("ASC") 606, "Revenue from Contracts with Customers" ("ASC 606"), revenue is recognized when all material conditions for completion have been met and it is probable that a significant revenue reversal will not occur in a future period.

The Company recognized revenue of $4,643 and $8,190 on the Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023, respectively, and $6,297 and $10,505 for the three and six months ended June 30, 2022, respectively, that was initially included in deferred revenue within Other Current Liabilities on the Company’s Unaudited Condensed Consolidated Statements of Financial Condition.

Generally, performance obligations under client arrangements will be settled within one year; therefore, the Company has elected to apply the practical expedient in ASC 606-10-50-14.

The allowance for credit losses for the three and six months ended June 30, 2023 and 2022 is as follows:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Beginning Balance	$	7,217	$	2,054	$	4,683	$	2,704
Bad debt expense, net of reversals	1,563		2,022		5,297		1,503
Write-offs, foreign currency translation and other adjustments	(68)		(2,629)		(1,268)		(2,760)

Ending Balance	$	8,712	$	1,447	$	8,712	$	1,447

The change in the balance during the three and six months ended June 30, 2023 is primarily related an increase in the Company's reserve for credit losses and the write-off of aged receivables.

For long-term accounts receivable and long-term contract assets, the Company monitors clients’ creditworthiness based on collection experience and other internal metrics. The following table presents the Company’s long-term accounts receivable and long-term contract assets from the Company's private and secondary fund advisory businesses as of June 30, 2023, by year of origination:

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EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands, except per share amounts, unless otherwise noted)


	Amortized Carrying Value by Origination Year
	2023		2022		2021		2020		2019		Total



Long-term Accounts Receivable and Long-Term Contract Assets	$	28,014	$	34,764	$	13,865	$	3,924	$	1,135	$	81,702

Note 5 – Related Parties

Advisory Fees includes fees earned from clients that have the Company's Senior Managing Directors, certain Senior Advisors and executives as a member of their Board of Directors of $2,209 and $3,877 for the three and six months ended June 30, 2023, respectively, and $4,251 and $7,111 for the three and six months ended June 30, 2022, respectively.

Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition includes the long-term portion of loans receivable from certain employees of $16,866 and $16,928 as of June 30, 2023 and December 31, 2022, respectively. See Note 14 for further information.

Note 6 – Investment Securities and Certificates of Deposit

The Company's Investment Securities and Certificates of Deposit as of June 30, 2023 and December 31, 2022 were as follows:


			June 30, 2023				December 31, 2022
Debt Securities			$	328,991			$	807,135
Equity Securities			558				335
Debt Securities Carried by EGL			424,574				365,638
Investment Funds			153,618				136,718
Total Investment Securities, at fair value			$	907,741			$	1,309,826

Certificates of Deposit, at contract value	54,380				122,890

Total Investment Securities and Certificates of Deposit	$	962,121			$	1,432,716

Debt Securities

Debt Securities are classified as available-for-sale securities within Investment Securities and Certificates of Deposit on the Unaudited Condensed Consolidated Statements of Financial Condition. These securities are stated at fair value with unrealized gains and losses included in Accumulated Other Comprehensive Income (Loss) on the Unaudited Condensed Consolidated Statements of Financial Condition and realized gains and losses included in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations, on a specific identification basis.

Gross unrealized gains included in Accumulated Other Comprehensive Income (Loss) were $45 and $193 for the three and six months ended June 30, 2023, respectively, and $342 and $348 for the three and six months ended June 30, 2022, respectively. Gross unrealized losses included in Accumulated Other Comprehensive Income (Loss) were ($193) for the three and six months ended June 30, 2023 and ($6) and ($23) for the three and six months ended June 30, 2022, respectively.

Gross realized losses included within Other Revenue, Including Interest and Investments, were ($110) and ($261) for the three and six months ended June 30, 2023, respectively, and ($34) for the six months ended June 30, 2022.

Proceeds from the sales and maturities of available-for-sale securities, including interest, were $244,605 and $1,243,992 for the three and six months ended June 30, 2023, respectively, and $56,918 and $763,711 for the three and six months ended June 30, 2022, respectively.

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EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands, except per share amounts, unless otherwise noted)

Scheduled maturities of the Company's available-for-sale debt securities as of June 30, 2023 and December 31, 2022 were as follows:


	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	328,021	$	328,029	$	800,710	$	805,190
Due after one year through five years	973		962		1,942		1,945


Total	$	328,994	$	328,991	$	802,652	$	807,135

The Company has the ability and intent to hold available-for-sale securities until a recovery of fair value is equal to an amount approximating its amortized cost, which may be at maturity. Further, the securities are all U.S. Treasuries and the Company has not incurred credit losses on its securities. As such, the Company does not consider these securities to be impaired at June 30, 2023 and has not recorded a credit allowance on these securities.

Equity Securities

Equity Securities are carried at fair value with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations. The Company had net unrealized gains (losses) of $60 and $223 for the three and six months ended June 30, 2023, respectively, and ($459) and ($448) for the three and six months ended June 30, 2022, respectively.

Debt Securities Carried by EGL

EGL invests in a fixed income portfolio consisting primarily of U.S. Treasury bills. These securities are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations, as required for broker-dealers in securities. The Company had net realized and unrealized gains of $12 and $18 for the three and six months ended June 30, 2023, respectively, and $507 and $528 for the three and six months ended June 30, 2022, respectively.

Investment Funds

The Company invests in a portfolio of exchange-traded funds as an economic hedge against its deferred cash compensation program. See Note 14 for further information. These securities are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations. The Company had net realized and unrealized gains (losses) of $11,615 and $21,056 for the three and six months ended June 30, 2023, respectively, (of which $11,570 and $16,250, respectively, were net unrealized gains) and ($26,353) and ($31,516) for the three and six months ended June 30, 2022, respectively, (of which ($26,932) and ($47,216), respectively, were net unrealized losses).

Certificates of Deposit

At June 30, 2023 and December 31, 2022, the Company held certificates of deposit of $54,380 and $122,890, respectively, with certain banks with original maturities of four months or less when purchased.

Note 7 – Investments

The Company's investments reported on the Unaudited Condensed Consolidated Statements of Financial Condition consist of investments in unconsolidated affiliated companies, other investments in private equity partnerships and equity securities in private companies. The Company's investments are relatively high-risk and illiquid assets.

The Company's investments in ABS Investment Management Holdings, LP and ABS Investment Management GP LLC (collectively, "ABS"), Atalanta Sosnoff Capital, LLC ("Atalanta Sosnoff"), Luminis Partners ("Luminis") and Seneca Advisors LTDA ("Seneca Evercore") are in voting interest entities. The Company's share of earnings (losses) from these investments is included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations.

The Company also has investments in private equity partnerships which consist of investment interests in private equity funds which are voting interest entities. Realized and unrealized gains and losses on private equity investments are included

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EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands, except per share amounts, unless otherwise noted)

within Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations.

Equity Method Investments

A summary of the Company's investments accounted for under the equity method of accounting as of June 30, 2023 and December 31, 2022 was as follows:



	June 30, 2023		December 31, 2022

ABS	$	17,712	$	19,387
Atalanta Sosnoff	10,741		10,717
Luminis	6,484		6,092
Seneca Evercore	614		706
Total	$	35,551	$	36,902

ABS

The Company has an investment accounted for under the equity method of accounting in ABS. At June 30, 2023, the Company's ownership interest in ABS was 26%. This investment resulted in earnings of $1,064 and $2,070 for the three and six months ended June 30, 2023, respectively, and $1,171 and $2,370 for the three and six months ended June 30, 2022, respectively, included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations.

In January 2022, the Company entered into an agreement to sell a portion of its interest in ABS. This transaction closed on March 28, 2022 and resulted in the reduction of the Company's ownership interest from 46% to 26%. The Company received cash of $18,300 as consideration for its interests sold and recorded a gain of $1,294 for the six months ended June 30, 2022, included within Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statement of Operations.

Atalanta Sosnoff

The Company has an investment accounted for under the equity method of accounting in Atalanta Sosnoff. At June 30, 2023, the Company's ownership interest in Atalanta Sosnoff was 49%. This investment resulted in earnings of $335 and $726 for the three and six months ended June 30, 2023, respectively, and $939 and $1,878 for the three and six months ended June 30, 2022, respectively, included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations.

Luminis

The Company has an investment accounted for under the equity method of accounting in Luminis. At June 30, 2023, the Company's ownership interest in Luminis was 20%. This investment resulted in earnings of $135 and $297 for the three and six months ended June 30, 2023, respectively, and $102 and $390 for the three and six months ended June 30, 2022, respectively, included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations. This investment is subject to currency translation from the Australian dollar to the U.S. dollar, included in Accumulated Other Comprehensive Income (Loss), on the Unaudited Condensed Consolidated Statements of Financial Condition.

Seneca Evercore

The Company has an investment accounted for under the equity method of accounting in Seneca Evercore. At June 30, 2023, the Company's ownership interest in Seneca Evercore was 20%. This investment resulted in earnings (losses) of $8 and ($83) for the three and six months ended June 30, 2023, respectively, and $62 and $148 for the three and six months ended June 30, 2022, respectively, included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations. This investment is subject to currency translation from the Brazilian real to the U.S. dollar, included in Accumulated Other Comprehensive Income (Loss), on the Unaudited Condensed Consolidated Statements of Financial Condition.

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EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands, except per share amounts, unless otherwise noted)

Other

The Company allocates the purchase price of its equity method investments, in part, to the inherent finite-lived identifiable intangible assets of the investees. The Company's share of the earnings of the investees has been reduced by the amortization of these identifiable intangible assets of $79 for each of the three months ended June 30, 2023 and 2022 and $158 for each of the six months ended June 30, 2023 and 2022.

The Company assesses its equity method investments for impairment annually, or more frequently if circumstances indicate impairment may have occurred.

Investments in Private Equity

Private Equity Funds

The Company's investments related to private equity partnerships and associated entities include investments in Glisco Partners II, L.P. ("Glisco II"), Glisco Partners III, L.P. ("Glisco III"), Glisco Capital Partners IV ("Glisco IV"), Trilantic Capital Partners Associates IV, L.P. ("Trilantic IV"), Trilantic Capital Partners V, L.P. ("Trilantic V") and Trilantic Capital Partners VI (North America), L.P. ("Trilantic VI") (through January 1, 2022). Portfolio holdings of the private equity funds are carried at fair value. Accordingly, the Company reflects its pro rata share of unrealized gains and losses occurring from changes in fair value. Additionally, the Company reflects its pro rata share of realized gains, losses and carried interest associated with any investment realizations.

A summary of the Company's investments in the private equity funds as of June 30, 2023 and December 31, 2022 was as follows:



	June 30, 2023		December 31, 2022


Glisco II, Glisco III and Glisco IV	$	3,990	$	3,602