What changed in this filing

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Item 1. Financial Statements

2020-08-04 compared with 2020-05-05 · 348 added, 266 removed, 828 unchanged (43% of the section changed)

1 unchanged sentence

Condensed Consolidated Financial Statements (Unaudited)

Condensed Consolidated Statements of Financial Condition as of March 31, 2020 and December 31, 2019

Condensed Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019

Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2020 and 2019

Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2020 and 2019

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019

Condensed Consolidated Statements of Financial Condition as of June 30, 2020 and December 31, 2019

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019

Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2020 and 2019

Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2020 and 2019

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019

Notes to Unaudited Condensed Consolidated Financial Statements

2 unchanged sentences

(dollars in thousands, except share data)

March 31, 2020

June 30, 2020

December 31, 2019

1 unchanged sentence

Cash and Cash Equivalents

Investment Securities and Certificates of Deposit (includes available-for-sale debt securities with an amortized cost of $13,060 and $114,204 at March 31, 2020 and December 31, 2019, respectively)

Investment Securities and Certificates of Deposit (includes available-for-sale debt securities with an amortized cost of $991 and $114,204 at June 30, 2020 and December 31, 2019, respectively)

Financial Instruments Owned and Pledged as Collateral at Fair Value

Securities Purchased Under Agreements to Resell

Accounts Receivable (net of allowances of $6,895 and $7,881 at March 31, 2020 and December 31, 2019, respectively)

Accounts Receivable (net of allowances of $11,125 and $7,881 at June 30, 2020 and December 31, 2019, respectively)

Receivable from Employees and Related Parties

3 unchanged sentences

Operating Lease Right-of-Use Assets

Furniture, Equipment and Leasehold Improvements (net of accumulated depreciation and amortization of $122,943 and $117,387 at March 31, 2020 and December 31, 2019, respectively)

Intangible Assets (net of accumulated amortization of $7,907 and $7,292 at March 31, 2020 and December 31, 2019, respectively)

Furniture, Equipment and Leasehold Improvements (net of accumulated depreciation and amortization of $129,856 and $117,387 at June 30, 2020 and December 31, 2019, respectively)

Intangible Assets (net of accumulated amortization of $8,519 and $7,292 at June 30, 2020 and December 31, 2019, respectively)

Liabilities and Equity

17 unchanged sentences

Stockholders' Equity

Class A, par value $0.01 per share (1,000,000,000 shares authorized, 71,899,956 and 68,698,675 issued at March 31, 2020 and December 31, 2019, respectively, and 40,535,411 and 39,176,010 outstanding at March 31, 2020 and December 31, 2019, respectively)

Class B, par value $0.01 per share (1,000,000 shares authorized, 55 and 84 issued and outstanding at March 31, 2020 and December 31, 2019, respectively)

Class A, par value $0.01 per share (1,000,000,000 shares authorized, 71,977,753 and 68,698,675 issued at June 30, 2020 and December 31, 2019, respectively, and 40,584,273 and 39,176,010 outstanding at June 30, 2020 and December 31, 2019, respectively)

Class B, par value $0.01 per share (1,000,000 shares authorized, 53 and 84 issued and outstanding at June 30, 2020 and December 31, 2019, respectively)

Additional Paid-In-Capital

1 unchanged sentence

Retained Earnings

Treasury Stock at Cost (31,364,545 and 29,522,665 shares at March 31, 2020 and December 31, 2019, respectively)

Treasury Stock at Cost (31,393,480 and 29,522,665 shares at June 30, 2020 and December 31, 2019, respectively)

Total Evercore Inc.

6 unchanged sentences

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

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Investment Banking:

32 unchanged sentences

(dollars in thousands)

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Other Comprehensive Income (Loss), net of tax:

9 unchanged sentences

(dollars in thousands, except share data)

For the Three Months Ended March 31, 2020

For the Three Months Ended June 30, 2020

Class A Common Stock

3 unchanged sentences

Income (Loss)

Balance at March 31, 2020

Other Comprehensive Income

Treasury Stock Purchases

Evercore LP Units Exchanged for Class A Common Stock

Equity-based Compensation Awards

Noncontrolling Interest (Note 14)

Balance at June 30, 2020

For the Six Months Ended June 30, 2020

Class A Common Stock

Comprehensive

Treasury Stock

Noncontrolling

Income (Loss)

Balance at December 31, 2019

2 unchanged sentences

Treasury Stock Purchases

Evercore LP Units Converted into Class A Common Stock

Evercore LP Units Exchanged for Class A Common Stock

Equity-based Compensation Awards

Noncontrolling Interest (Note 14)

Balance at June 30, 2020

(1) The cumulative adjustment relates to the adoption of Accounting Standards Update ("ASU") No.

2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13") on January 1, 2020, for which the Company recorded an adjustment to Retained Earnings to reflect the increase in the Company's Allowance for Doubtful Accounts as a result of the use of the current expected credit loss model.

See Notes 2 and 3 for further information.

For the Three Months Ended June 30, 2019

Class A Common Stock

Comprehensive

Treasury Stock

Noncontrolling

Income (Loss)

Balance at March 31, 2019

For the Three Months Ended March 31, 2019

Other Comprehensive Income (Loss)

Treasury Stock Purchases

Evercore LP Units Exchanged for Class A Common Stock

Equity-based Compensation Awards

Noncontrolling Interest (Note 14)

Balance at June 30, 2019

For the Six Months Ended June 30, 2019

Class A Common Stock

4 unchanged sentences

Balance at December 31, 2018

Other Comprehensive Income

Other Comprehensive Income (Loss)

Treasury Stock Purchases

Evercore LP Units Converted into Class A Common Stock

Evercore LP Units Exchanged for Class A Common Stock

Equity-based Compensation Awards

Noncontrolling Interest (Note 14)

Balance at March 31, 2019

The cumulative adjustment relates to the adoption of Accounting Standards Update ("ASU") No.

See Notes 2 and 3 for further information.

Balance at June 30, 2019

See Notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash Flows From Operating Activities

25 unchanged sentences

Investment Securities:

Proceeds from Sales and Maturities of Investment Securities

Proceeds from Sales and Maturities of Investment Securities and Futures Contracts Activity

Purchases of Investment Securities and Futures Contracts Activity

6 unchanged sentences

Short-Term Borrowings

Repayment of Short-Term Borrowings

Purchase of Treasury Stock and Noncontrolling Interests

8 unchanged sentences

Accrued Dividends

Non-Cash Purchase of Noncontrolling Interest

Noncash Purchase of Noncontrolling Interest

See Notes to Unaudited Condensed Consolidated Financial Statements.

41 unchanged sentences

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 and Evercore Beijing assets of $ 174,774 and liabilities of $ 72,084 at March 31, 2020 and assets of $ 227,885 and liabilities of $ 129,494 at December 31, 2019 .

The Company included in its Unaudited Condensed Consolidated Statements of Financial Condition Evercore ISI U.K., Evercore U.K., Evercore Japan and Evercore Beijing assets of $ 215,667 and liabilities of $ 91,724 at June 30, 2020 and assets of $ 227,885 and liabilities of $ 129,494 at December 31, 2019 .

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

62 unchanged sentences

Note 4 – Revenue and Accounts Receivable

The following table presents revenue recognized by the Company for the three months ended March 31, 2020 and 2019 :

For the Three Months Ended March 31,

The following table presents revenue recognized by the Company for the three and six months ended June 30, 2020 and 2019 :

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Investment Banking:

10 unchanged sentences

The change in the Company’s contract assets and liabilities during the 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 three months ended March 31, 2020 and 2019 are as follows:

For the Three Months Ended March 31, 2020

The Company’s receivables, contract assets and deferred revenue (contract liabilities) for the six months ended June 30, 2020 and 2019 are as follows:

For the Six Months Ended June 30, 2020

(Current) (1)

8 unchanged sentences

Increase (Decrease)

Balance at March 31, 2020

For the Three Months Ended March 31, 2019

Balance at June 30, 2020

For the Six Months Ended June 30, 2019

(Current) (1)

8 unchanged sentences

Increase (Decrease)

Balance at March 31, 2019

Balance at June 30, 2019

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

6 unchanged sentences

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

The Company recognized revenue of $ 2,029 and $ 2,466 on the Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019, respectively , that was initially included in deferred revenue on the Company’s 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 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 $ 3,862 and $ 5,891 on the Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020 , respectively, and $ 5,027 and $ 7,493 for the three and six months ended June 30, 2019, respectively , that was initially included in deferred revenue 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 months ended March 31, 2020 and 2019 is as follows:

For the Three Months Ended March 31,

The allowance for credit losses for the three and six months ended June 30, 2020 and 2019 is as follows:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Beginning Balance (1)

Bad debt expense

Writeoffs, foreign currency translation and other adjustments

Write-offs, foreign currency translation and other adjustments

Ending Balance

(1) Beginning Balance for the three months ended March 31, 2020 includes the cumulative-effect adjustment of $ 1,310 , which reflects the increase in the Company's Allowance for Doubtful Accounts as a result of the use of the current expected credit loss model related to the adoption of ASU 2016-13 on January 1, 2020.

(1) Beginning Balance for the six months ended June 30, 2020 includes the cumulative-effect adjustment of $ 1,310 , which reflects the increase in the Company's Allowance for Doubtful Accounts as a result of the use of the current expected credit loss model related to the adoption of ASU 2016-13 on January 1, 2020.

See Notes 2 and 3 for further information.

The change in the balance during the three months ended March 31, 2020 is primarily related to the writeoff of aged receivables, as well as the impact of a decrease in the amount of receivables outstanding greater than 120 days at March 31, 2020.

The change in the balance during the three and six months ended June 30, 2020 is primarily related to an increase in the current period provision of expected credit losses and the write-off of aged receivables, as well as the impact of a decrease in the amount of receivables outstanding greater than 120 days at June 30, 2020.

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 March 31, 2020 by year of origination:

Amortized Cost Basis by Origination Year

2 unchanged sentences

Special Charges, Including Business Realignment Costs

The Company recognized $ 23,676 for the three months ended March 31, 2020 , as Special Charges, Including Business Realignment Costs.

These costs include $ 22,127 of separation and transition benefits and related costs as a result of the Company's review of its operations, described below, and $ 1,549 related to the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of the Company's headquarters in New York and the Company's business realignment initiatives.

The Company recognized $ 8,558 and $ 32,234 for the three and six months ended June 30, 2020 , respectively, as Special Charges, Including Business Realignment Costs.

For the three and six months ended June 30, 2020 , these costs include $ 8,178 and $ 30,305 , respectively, for separation and transition benefits and related costs as a result of the Company's review of its operations, described below, and $ 380 and $ 1,929 , respectively, for the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of the Company's headquarters in New York and the Company's business realignment initiatives.

In the first quarter of 2020 , the Company substantially completed a review of operations focused on markets, sectors and people which have delivered lower levels of productivity in an effort to attain greater flexibility of operations and better position itself for future growth.

This review, which began in the fourth quarter of 2019 , will generate reductions of approximately 6 % of the Company's headcount.

In conjunction with the employment reductions, the Company is expected to incur aggregate separation and transition benefits (including costs related to the acceleration of deferred compensation) and related costs of approximately $ 38,000 , $ 22,127 of which has been recorded in Special Charges, Including Business Realignment Costs, in the first quarter of 2020.

In conjunction with the employment reductions, the Company is expected to incur aggregate separation

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

and transition benefits (including costs related to the acceleration of deferred compensation) and related costs of approximately $ 38,000 , $ 30,305 of which has been recorded in Special Charges, Including Business Realignment Costs, in the first six months of 2020.

The Company's estimates of charges are based on a number of assumptions.

2 unchanged sentences

("ECB"), the Company's Mexico based broker-dealer focused principally on providing Investment Management services, for a purchase price of MXN $ 35,000 .

Completion of this sale, which is subject to regulatory approval, is expected to occur by the end of 2020.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company recognized $ 1,029 for the three months ended March 31, 2019 , as Special Charges, Including Business Realignment Costs, incurred related to the acceleration of depreciation expense for leasehold improvements in conjunction with the expansion of the Company's headquarters in New York.

This sale will be completed following regulatory approval.

The Company recognized $ 1,029 and $ 2,058 for the three and six months ended June 30, 2019 , respectively, as Special Charges, Including Business Realignment Costs, incurred related to the acceleration of depreciation expense for leasehold improvements in conjunction with the expansion of the Company's headquarters in New York.

Intangible Asset Amortization

Expense associated with the amortization of intangible assets for Investment Banking was $ 507 and $ 2,190 for the three months ended March 31, 2020 and 2019 , respectively, included within Depreciation and Amortization expense on the Unaudited Condensed Consolidated Statements of Operations .

Expense associated with the amortization of intangible assets for Investment Management was $ 108 and $ 110 for the three months ended March 31, 2020 and 2019 , respectively, included within Depreciation and Amortization expense on the Unaudited Condensed Consolidated Statements of Operations .

Expense associated with the amortization of intangible assets for Investment Banking was $ 507 and $ 1,014 for the three and six months ended June 30, 2020 , respectively, and $ 2,190 and $ 4,380 for the three and six months ended June 30, 2019 , respectively, included within Depreciation and Amortization expense on the Unaudited Condensed Consolidated Statements of Operations .

Expense associated with the amortization of intangible assets for Investment Management was $ 105 and $ 213 for the three and six months ended June 30, 2020 , respectively, and $ 109 and $ 219 for the three and six months ended June 30, 2019 , respectively, included within Depreciation and Amortization expense on the Unaudited Condensed Consolidated Statements of Operations .

Note 6 – Related Parties

Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition includes the long-term portion of loans receivable from certain employees of $ 15,813 and $ 13,137 as of March 31, 2020 and December 31, 2019 , respectively.

Investment Banking Revenue includes advisory fees earned from clients that have Senior Managing Directors as a member of their Board of Directors of $ 8,769 for the three and six months ended June 30, 2020 .

Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition includes the long-term portion of loans receivable from certain employees of $ 13,511 and $ 13,137 as of June 30, 2020 and December 31, 2019 , respectively.

See Note 16 for further information.

Note 7 – Investment Securities and Certificates of Deposit

The Company's Investment Securities and Certificates of Deposit as of March 31, 2020 and December 31, 2019 were as follows:

March 31, 2020

The Company's Investment Securities and Certificates of Deposit as of June 30, 2020 and December 31, 2019 were as follows:

June 30, 2020

December 31, 2019

6 unchanged sentences

Total Investment Securities and Certificates of Deposit

Scheduled maturities of the Company's available-for-sale debt securities as of March 31, 2020 and December 31, 2019 were as follows:

March 31, 2020

December 31, 2019

Due within one year

Due after one year through five years

Due after 10 years

Since 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, the securities are either U.S.

Treasuries or municipal bonds, primarily with S&P ratings ranging from AAA to BB+, and the Company has not incurred credit losses on its securities, it does not consider such unrealized loss positions to be impaired at March 31, 2020 , and as such, has not recorded a credit allowance on these securities.

EVERCORE INC.

1 unchanged sentence

(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, 2020 and December 31, 2019 were as follows:

June 30, 2020

December 31, 2019

Due within one year

Due after one year through five years

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 either U.S.

Treasuries or municipal bonds, primarily with S&P ratings ranging from AAA to BB+, and the Company has not incurred credit losses on its securities.

As such, the Company does not consider such unrealized loss positions to be impaired at June 30, 2020 and has not recorded a credit allowance on these securities.

Debt Securities

1 unchanged sentence

These securities are stated at fair value with unrealized gains and losses included in Accumulated Other Comprehensive Income (Loss) and realized gains and losses included in earnings.

The Company had net realized losses of ($ 4 ) and ($ 3 ) for the three months ended March 31, 2020 and 2019, respectively .

The Company had net realized gains (losses) of $ 77 and $ 73 for the three and six months ended June 30, 2020 , respectively, and ($ 3 ) and ($ 6 ) for the three and six months ended June 30, 2019, respectively .

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 realized and unrealized gains (losses) of ($ 334 ) and $ 152 for the three months ended March 31, 2020 and 2019, respectively .

The Company had net realized and unrealized gains (losses) of $ 88 and ($ 246 ) for the three and six months ended June 30, 2020 , respectively, and $ 41 and $ 193 for the three and six months ended June 30, 2019, respectively .

Debt Securities Carried by Broker-Dealers

2 unchanged sentences

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 (losses) of ($ 634 ) and $ 49 for the three months ended March 31, 2020 and 2019, respectively .

The Company had net realized and unrealized gains (losses) of ($ 1,111 ) and ($ 1,240 ) for the three and six months ended June 30, 2020 , respectively, and $ 465 and $ 514 for the three and six months ended June 30, 2019, respectively .

Investment Funds

2 unchanged sentences

The Company had net realized and unrealized gains (losses) of ($ 13,019 ) and $ 6,587 for the three months ended March 31, 2020 and 2019, respectively .

The Company had net realized and unrealized gains (losses) of $ 10,284 and ($ 2,790 ) for the three and six months ended June 30, 2020 , respectively, and $ 2,112 and $ 8,699 for the three and six months ended June 30, 2019, respectively .

In February 2020, the Company entered into four-month futures contracts on a stock index fund, with a notional amount of $ 38,908 , as an economic hedge against the Company's deferred cash compensation program.

These contracts settled in June 2020.

See Note 17 for further information.

In April 2019, the Company entered into three-month futures contracts on a stock index fund with a notional amount of $ 14,815 for $ 680 , as an economic hedge against the Company's deferred cash compensation program.

These contracts settled in June 2019.

See Note 17 for further information.

Certificates of Deposit

1 unchanged sentence

These certificates of deposit matured in January 2020.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 8 – Financial Instruments Owned and Pledged as Collateral at Fair Value, Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase

4 unchanged sentences

The Company records as assets on its Unaudited Condensed Consolidated Statements of Financial Condition , Financial Instruments Owned and Pledged as Collateral at Fair Value (where the Company has acquired the securities deliverable to clients under these repurchase arrangements by purchasing securities in the open market) and Securities Purchased Under Agreements to Resell (where the Company has acquired the securities deliverable to clients under these repurchase agreements by entering into reverse repurchase agreements with unrelated third parties).

These Mexican government securities had an estimated average time to maturity of approximately five months , as of March 31, 2020 , and are pledged as collateral against repurchase agreements.

These Mexican government securities had an estimated average time to maturity of approximately four months , as of June 30, 2020 , and are pledged as collateral against repurchase agreements.

Generally, collateral is posted equal to the contract value at inception and is subject to market changes.

These repurchase agreements are primarily with institutional customer accounts managed by ECB and permit the counterparty to pledge the securities.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

ECB has procedures in place to monitor the daily risk limits for positions taken, as well as the credit risk based on the collateral pledged under these agreements against their contract value from inception to maturity date.

4 unchanged sentences

In addition to monitoring VaR, ECB periodically performs discrete stress tests ("Stress Tests") to assure that the level of potential losses that would arise from extreme market movements that may not be anticipated by VaR measures are within acceptable levels.

As of March 31, 2020 and December 31, 2019 , a summary of the Company's assets, liabilities and collateral received or pledged related to these transactions was as follows:

March 31, 2020

As of June 30, 2020 and December 31, 2019 , a summary of the Company's assets, liabilities and collateral received or pledged related to these transactions was as follows:

June 30, 2020

December 31, 2019

10 unchanged sentences

The Company's investments are relatively high-risk and illiquid assets.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company's investments in ABS Investment Management Holdings, LP and ABS Investment Management GP LLC (collectively, "ABS"), Atalanta Sosnoff Capital, LLC ("Atalanta Sosnoff") and Luminis Partners ("Luminis") are in voting interest entities.

3 unchanged sentences

Equity Method Investments

A summary of the Company's investments accounted for under the equity method of accounting as of March 31, 2020 and December 31, 2019 was as follows:

March 31, 2020

A summary of the Company's investments accounted for under the equity method of accounting as of June 30, 2020 and December 31, 2019 was as follows:

June 30, 2020

December 31, 2019

Atalanta Sosnoff

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

On December 29, 2011, the Company made an investment accounted for under the equity method of accounting in ABS Investment Management, LLC.

1 unchanged sentence

Taken together, the ownership interests in ABS Investment Management Holdings LP and ABS Investment Management GP LLC are substantially equivalent to the contributed ownership interests in ABS Investment Management, LLC.

At March 31, 2020 , the Company's economic ownership interest in ABS was 46 % .

This investment resulted in earnings of $ 2,020 and $ 1,731 for the three months ended March 31, 2020 and 2019, respectively , included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations .

At June 30, 2020 , the Company's economic ownership interest in ABS was 46 % .

This investment resulted in earnings of $ 1,803 and $ 3,823 for the three and six months ended June 30, 2020 , respectively, and $ 1,921 and $ 3,652 for the three and six months ended June 30, 2019, respectively , included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations .

Atalanta Sosnoff

On December 31, 2015, the Company amended the Operating Agreement with Atalanta Sosnoff and deconsolidated its assets and liabilities, accounting for its interest under the equity method of accounting from that date forward.

At March 31, 2020 , the Company's economic ownership interest in Atalanta Sosnoff was 49 % .

This investment resulted in earnings of $ 572 and $ 225 for the three months ended March 31, 2020 and 2019, respectively , included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations .

At June 30, 2020 , the Company's economic ownership interest in Atalanta Sosnoff was 49 % .

This investment resulted in earnings of $ 445 and $ 1,017 for the three and six months ended June 30, 2020 , respectively, and $ 313 and $ 538 for the three and six months ended June 30, 2019, respectively , included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations .

On January 1, 2017, the Company acquired an interest in Luminis and accounted for its interest under the equity method of accounting.

At March 31, 2020 , the Company's ownership interest in Luminis was 20 % .

This investment resulted in earnings of $ 536 and $ 255 for the three months ended March 31, 2020 and 2019, respectively , included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations .

At June 30, 2020 , the Company's ownership interest in Luminis was 20 % .

This investment resulted in earnings of $ 65 and $ 601 for the three and six months ended June 30, 2020 , respectively, and $ 219 and $ 474 for the three and six months ended June 30, 2019, respectively , included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations .

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 and $ 171 for the three months ended March 31, 2020 and 2019, respectively .

The Company's share of the earnings of the investees has been reduced by the amortization of these identifiable intangible assets of $ 79 and $ 158 for the three and six months ended June 30, 2020 , respectively, and $ 171 and $ 342 for the three and six months ended June 30, 2019, respectively .

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

6 unchanged sentences

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

This investment had a balance of $ 7,230 and $ 9,235 as of March 31, 2020 and December 31, 2019 , respectively.

This investment had a balance of $ 6,862 and $ 9,235 as of June 30, 2020 and December 31, 2019 , respectively.

Investments in Private Equity

9 unchanged sentences

Additionally, the Company reflects its pro rata share of realized gains, losses and carried interest associated with any investment realizations.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

A summary of the Company's investments in the private equity funds as of March 31, 2020 and December 31, 2019 was as follows:

March 31, 2020

A summary of the Company's investments in the private equity funds as of June 30, 2020 and December 31, 2019 was as follows:

June 30, 2020

December 31, 2019

2 unchanged sentences

Total Private Equity Funds

Net realized and unrealized losses on private equity fund investments were ($ 88 ) and ($ 4 ) for the three months ended March 31, 2020 and 2019, respectively .

Net realized and unrealized losses on private equity fund investments were ($ 2,255 ) and ($ 2,343 ) for the three and six months ended June 30, 2020 , respectively, and ($ 123 ) and ($ 127 ) for the three and six months ended June 30, 2019, respectively .

In the event the funds perform poorly, the Company may be obligated to repay certain carried interest previously distributed.

As of March 31, 2020 , there was no previously distributed carried interest received from the funds that was subject to repayment.

As of June 30, 2020 , $ 451 of previously distributed carried interest received from the funds was subject to repayment.

General Partners of Private Equity Funds which are VIEs

3 unchanged sentences

Further, as a limited partner in these entities, the Company does not possess substantive participating rights.

The Company had assets of $ 4,814 and $ 4,658 included in its Unaudited Condensed Consolidated Statements of Financial Condition at March 31, 2020 and December 31, 2019 , respectively, related to these unconsolidated VIEs, representing the carrying value of the Company's investments in the entities.

The Company had assets of $ 3,114 and $ 4,658 included in its Unaudited Condensed Consolidated Statements of Financial Condition at June 30, 2020 and December 31, 2019 , respectively, related to these unconsolidated VIEs, representing the carrying value of the Company's investments in the entities.

The Company's exposure to the obligations of these VIEs is generally limited to its investments in these entities.

The Company's maximum exposure to loss as of March 31, 2020 and December 31, 2019 was $ 8,966 and $ 8,810 , respectively, which represents the carrying value of the Company's investments in these VIEs, as well as any unfunded commitments to the current and future funds.

The Company's maximum exposure to loss as of June 30, 2020 and December 31, 2019 was $ 7,266 and $ 8,810 , respectively, which represents the carrying value of the Company's investments in these VIEs, as well as any unfunded commitments to the current and future funds.

Investment in Trilantic Capital Partners

In 2010, the Company made a limited partnership investment in Trilantic in exchange for 500 Class A partnership units of Evercore LP ("Class A LP Units") having a fair value of $ 16,090 .

This investment gave the Company the right to invest in Trilantic's current and future private equity funds, beginning with Trilantic Fund IV.

This investment gave the Company the right to invest in Trilantic's

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

current and future private equity funds, beginning with Trilantic Fund IV.

The Company accounts for this investment at its cost minus impairment, if any, plus or minus changes resulting from observable price changes.

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From 2010 to 2019, $ 1,178 , $ 5,135 and $ 3,015 of this investment was allocated to Trilantic Fund IV, V and VI, respectively.

This investment had a balance of $ 6,762 as of March 31, 2020 and December 31, 2019 .

The Company has a $ 5,000 commitment to invest in Trilantic Fund V, of which $ 361 was unfunded at March 31, 2020 .

The Company also has a $ 12,000 commitment to invest in Trilantic Fund VI, of which $ 9,164 was unfunded at March 31, 2020 .

The Company funded $ 2,313 of the commitment to invest in Trilantic Fund VI during the three months ended March 31, 2019.

This investment had a balance of $ 6,762 as of June 30, 2020 and December 31, 2019 .

The Company has a $ 5,000 commitment to invest in Trilantic Fund V, of which $ 361 was unfunded at June 30, 2020 .

The Company also has a $ 12,000 commitment to invest in Trilantic Fund VI, of which $ 9,164 was unfunded at June 30, 2020 .

The Company funded $ 2,642 of the commitment to invest in Trilantic Fund VI during the six months ended June 30, 2019.

Other Investments

In 2015, the Company received an equity security in a private company in exchange for advisory services.

This investment is accounted for at its cost minus impairment, if any, plus or minus changes resulting from observable price changes and had a balance of $ 1,079 as of March 31, 2020 and December 31, 2019 .

This investment is accounted for at its cost minus impairment, if any, plus or minus changes resulting from observable price changes and had a balance of $ 1,079 as of June 30, 2020 and December 31, 2019 .

In May 2019, the Company received preferred equity securities in a private company in exchange for advisory services.

This investment is accounted for at its cost minus impairment, if any, plus or minus changes resulting from observable price changes and had a balance of $ 649 as of March 31, 2020 .

This investment is accounted for at its cost minus impairment, if any, plus or minus changes resulting from observable price changes and had a balance of $ 648 and $ 693 as of June 30, 2020 and December 31, 2019 , respectively.

Following the Glisco transaction in 2016, the Company recorded an investment in Glisco Manager Holdings LP representing the fair value of the deferred consideration resulting from this transaction.

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The Company amortizes the balance of its investment as distributions are received related to the deferred consideration.

This investment had a balance of $ 899 as of March 31, 2020 and December 31, 2019 .

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

This investment had a balance of $ 665 and $ 899 as of June 30, 2020 and December 31, 2019 , respectively.

Note 10 – Leases

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The Company does not have any leases with variable lease payments.

Occupancy and Equipment Rental on the Unaudited Condensed Consolidated Statements of Operations includes operating lease cost for office space of $ 11,916 and $ 10,235 for the three months ended March 31, 2020 and 2019, respectively , and variable lease cost of $ 1,723 and $ 1,597 for the three months ended March 31, 2020 and 2019, respectively .

Occupancy and Equipment Rental on the Unaudited Condensed Consolidated Statements of Operations includes operating lease cost for office space of $ 12,108 and $ 24,024 for the three and six months ended June 30, 2020 , respectively, and $ 10,108 and $ 20,343 for the three and six months ended June 30, 2019, respectively , and variable lease cost of $ 1,132 and $ 2,855 for the three and six months ended June 30, 2020 , respectively, and $ 3,221 and $ 4,818 for the three and six months ended June 30, 2019, respectively .

On July 1, 2018, the Company entered into a new lease agreement for office space at its headquarters at 55 East 52nd St., New York, New York.

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On December 6, 2019, the lease was modified to add an additional floor and to extend the lease term for all current and prospective space to end on December 31, 2035.

In conjunction with the lease of office space, the Company has entered into letters of credit in the amounts of approximately $ 5,545 and $ 5,536 , which are secured by cash that is included in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition as of March 31, 2020 and December 31, 2019 , respectively.

In conjunction with the lease of office space, the Company has entered into letters of credit in the amounts of approximately $ 5,548 and $ 5,536 , which are secured by cash that is included in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition as of June 30, 2020 and December 31, 2019 , respectively.

The Company has entered into various operating leases for the use of office equipment (primarily computers, printers, copiers and other IT related equipment).

Occupancy and Equipment Rental on the Unaudited Condensed Consolidated Statements of Operations includes operating lease cost for office equipment of $ 1,196 and $ 923 for the three months ended March 31, 2020 and 2019, respectively .

Occupancy and Equipment Rental on the Unaudited Condensed Consolidated Statements of Operations includes operating lease cost for office equipment of $ 1,132 and $ 2,328 for the three and six months ended June 30, 2020 , respectively, and $ 1,004 and $ 1,927 for the three and six months ended June 30, 2019, respectively .

The Company uses its secured incremental borrowing rate to determine the present value of its right-of-use assets and lease liabilities.

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The Company scales the rates appropriately depending on the life of the leases.

The Company incurred net operating cash outflows of $ 9,102 and $ 2,973 for the three months ended March 31, 2020 and 2019, respectively, related to its operating leases, which were net of cash received from lease incentives of $ 1,270 and $ 6,198 , respectively.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company incurred net operating cash outflows of $ 11,763 and $ 8,485 for the six months ended June 30, 2020 and 2019, respectively, related to its operating leases, which were net of cash received from lease incentives of $ 8,796 and $ 10,062 , respectively.

Other information as it relates to the Company's operating leases is as follows:

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

New Right-of-Use Assets obtained in exchange for new operating lease liabilities

March 31, 2020

March 31, 2019

June 30, 2020

June 30, 2019

Weighted-average remaining lease term - operating leases

Weighted-average discount rate - operating leases

As of March 31, 2020 , the maturities of the undiscounted operating lease liabilities for which the Company has commenced use are as follows:

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

As of June 30, 2020 , the maturities of the undiscounted operating lease liabilities for which the Company has commenced use are as follows:

2020 (July 1 through December 31)

Total lease payments

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In conjunction with the lease agreement to expand its headquarters at 55 East 52nd St., New York, New York, and lease agreements at certain other locations, the Company entered into leases for office space which have not yet commenced and thus are not yet included on the Company's Unaudited Condensed Consolidated Statements of Financial Condition as right-of-use assets and lease liabilities.

The Company anticipates that it will take possession of these spaces between 2020 and 2023 with lease terms of 1 to 13 years.

The additional future payments under these arrangements are $ 203,291 as of March 31, 2020 .

The Company anticipates that it will take possession of these spaces by the end of 2023.

These spaces will have lease terms of 3 to 13 years once we have taken possession.

The additional future payments under these arrangements are $ 196,129 as of June 30, 2020 .

Note 11 – Fair Value Measurements

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The type of investments included in Level I include listed equities, listed derivatives and treasury bills.

As required by ASC 820, the Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.

Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies.

The estimated fair values of the Corporate Bonds, Municipal Bonds and Other Debt Securities held at March 31, 2020 and December 31, 2019 are based on prices provided by external pricing services.

Level III – Pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment.

The inputs into the determination of fair value require significant management judgment or estimation.

The following table presents the categorization of investments and certain other financial assets measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 :

As required by ASC 820, the

EVERCORE INC.

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

March 31, 2020

Corporate Bonds, Municipal Bonds and Other Debt Securities Carried by Broker-Dealers (1)

Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.

The estimated fair values of the Corporate Bonds, Municipal Bonds and Other Debt Securities held at June 30, 2020 and December 31, 2019 are based on prices provided by external pricing services.

Level III – Pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment.

The inputs into the determination of fair value require significant management judgment or estimation.

The following table presents the categorization of investments and certain other financial assets measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 :

June 30, 2020

Debt Securities Carried by Broker-Dealers (1)

Other Debt and Equity Securities (2)

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Total Assets Measured At Fair Value

Includes $ 5,585 of treasury bills, municipal bonds and commercial paper classified within Cash and Cash Equivalents on the Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2020 .

Includes $ 3,500 and $ 2,990 of treasury bills and notes and municipal bonds classified within Cash and Cash Equivalents on the Unaudited Condensed Consolidated Statements of Financial Condition as of March 31, 2020 and December 31, 2019 , respectively.

Includes $ 214,974 of treasury bills classified within Cash and Cash Equivalents on the Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2020 .

Includes $ 8,899 and $ 2,990 of treasury bills and notes and municipal bonds classified within Cash and Cash Equivalents on the Unaudited Condensed Consolidated Statements of Financial Condition as of June 30, 2020 and December 31, 2019 , respectively.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.

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

March 31, 2020

June 30, 2020

Estimated Fair Value

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Debt Security Investment

Securities Purchased Under Agreements to Resell

Receivables (1)

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Includes current and long-term Notes Payable included in Current Portion of Notes Payable and Notes Payable on the Unaudited Condensed Consolidated Statements of Financial Condition .

Note 12 – Notes Payable

On March 30, 2016, the Company issued an aggregate of $ 170,000 of senior notes, including:

EVERCORE INC.

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

(the "Series C Notes") and $ 17,000 aggregate principal amount of its 5.58 % Series D senior notes due 2028 (the "Series D Notes" and together with the Series A Notes, the Series B Notes and the Series C Notes, the "2016 Private Placement Notes"), pursuant to a note purchase agreement (the "2016 Note Purchase Agreement") dated as of March 30, 2016, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

Note 12 – Notes Payable

On March 30, 2016, the Company issued an aggregate of $ 170,000 of senior notes, including:

$ 38,000 aggregate principal amount of its 4.88 % Series A senior notes due 2021 (the "Series A Notes"), $ 67,000 aggregate principal amount of its 5.23 % Series B senior notes due 2023 (the "Series B Notes"), $ 48,000 aggregate principal amount of its 5.48 % Series C senior notes due 2026 (the "Series C Notes") and $ 17,000 aggregate principal amount of its 5.58 % Series D senior notes due 2028 (the "Series D Notes" and together with the Series A Notes, the Series B Notes and the Series C Notes, the "2016 Private Placement Notes"), pursuant to a note purchase agreement (the "2016 Note Purchase Agreement") dated as of March 30, 2016, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

Interest on the 2016 Private Placement Notes is payable semi-annually and the 2016 Private Placement Notes are guaranteed by certain of the Company's domestic subsidiaries.

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The 2016 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio, a minimum tangible net worth and a minimum interest coverage ratio, and customary events of default.

As of March 31, 2020 , the Company was in compliance with all of these covenants.

As of June 30, 2020 , the Company was in compliance with all of these covenants.

On August 1, 2019, the Company issued $ 175,000 and £ 25,000 of senior unsecured notes through private placement.

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The 2019 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio and a minimum tangible net worth, and customary events of default.

As of March 31, 2020 , the Company was in compliance with all of these covenants.

Notes Payable is comprised of the following as of March 31, 2020 and December 31, 2019 :

As of June 30, 2020 , the Company was in compliance with all of these covenants.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Notes Payable is comprised of the following as of June 30, 2020 and December 31, 2019 :

Carrying Value (a)

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Effective Annual Interest Rate

March 31, 2020

June 30, 2020

December 31, 2019

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Carrying value has been adjusted to reflect the presentation of debt issuance costs as a direct reduction from the related liability.

Note 13 – Evercore Inc.

Stockholders' Equity

Dividends – The Company's Board of Directors declared on July 21, 2020 , a quarterly cash dividend of $ 0.58 per share, to the holders of record of shares of Class A common stock ("Class A Shares") as of August 28, 2020 , which will be paid on September 11, 2020 .

During the three and six months ended June 30, 2020 , the Company declared and paid dividends of $ 0.58 and $ 1.16 per share, respectively, totaling $ 23,176 and $ 46,762 , respectively, and accrued deferred cash dividends on unvested restricted stock units ("RSUs"), totaling $ 3,387 and $ 6,918 , respectively.

The Company also paid deferred cash dividends of $ 197 and $ 10,767 during the three and six months ended June 30, 2020 , respectively.

During the three and six months ended June 30, 2019 , the Company declared and paid dividends of $ 0.58 and $ 1.08 per share, respectively, totaling $ 23,232 and $ 43,729 , respectively, and accrued deferred cash dividends on unvested RSUs, totaling $ 3,789 and $ 7,125 , respectively.

The Company also paid deferred cash dividends of $ 99 and $ 7,068 during the three and six months ended June 30, 2019 , respectively.

Treasury Stock – During the three months ended June 30, 2020 , the Company purchased 25 Class A Shares primarily from employees at market values ranging from $ 38.23 to $ 77.21 per share (at an average cost per share of $ 52.66 ), primarily for the net settlement of stock-based compensation awards, and 4 Class A Shares at an average cost per share of $ 58.28 pursuant to the Company's share repurchase program.

The aggregate 29 Class A Shares were purchased at an average cost per share of $ 53.43 , and the result of these purchases was an increase in Treasury Stock of $ 1,546 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2020 .

During the six months ended June 30, 2020 , the Company purchased 1,017 Class A Shares primarily from employees at market values ranging from $ 38.23 to $ 81.31 per share (at an average cost per share of $ 76.45 ), primarily for the net settlement of stock-based compensation awards, and 854 Class A Shares at market values ranging from $ 58.28 to $ 81.96 per share (at an average cost per share of $ 75.93 ) pursuant to the Company's share repurchase program.

The aggregate 1,871 Class A Shares were purchased at an average cost per share of $ 76.22 , and the result of these purchases was an increase in Treasury Stock of $ 142,560 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2020 .

LP Units – During the three and six months ended June 30, 2020 , 15 and 806 Evercore LP partnership units ("LP Units"), respectively, were exchanged for Class A Shares.

This resulted in increases to Common Stock of $ 8 for the six months ended June 30, 2020 and Additional Paid-In-Capital of $ 583 and $ 33,754 for the three and six months ended June 30, 2020 , respectively, on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2020 .

Accumulated Other Comprehensive Income (Loss) – As of June 30, 2020 , Accumulated Other Comprehensive Income (Loss) on the Company's Unaudited Condensed Consolidated Statement of Financial Condition includes an accumulated Unrealized Gain (Loss) on Securities and Investments, net, and Foreign Currency Translation Adjustment Gain (Loss), net, of ($ 5,453 ) and ($ 31,714 ) , respectively.

EVERCORE INC.

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

Note 13 – Evercore Inc.

Stockholders' Equity

Dividends – The Company's Board of Directors declared on April 21, 2020 , a quarterly cash dividend of $ 0.58 per share, to the holders of record of shares of Class A common stock ("Class A Shares") as of May 29, 2020 , which will be paid on June 12, 2020 .

During the three months ended March 31, 2020 , the Company declared and paid dividends of $ 0.58 per share, totaling $ 23,586 , and accrued deferred cash dividends on unvested restricted stock units ("RSUs"), totaling $ 3,531 .

The Company also paid deferred cash dividends of $ 10,571 during the three months ended March 31, 2020 .

Treasury Stock – During the three months ended March 31, 2020 , the Company purchased 992 Class A Shares primarily from employees at market values ranging from $ 45.86 to $ 81.31 per share (at an average cost per share of $ 77.05 ), primarily for the net settlement of stock-based compensation awards, and 850 Class A Shares at market values ranging from $ 69.60 to $ 81.96 per share (at an average cost per share of $ 76.02 ) pursuant to the Company's share repurchase program.

The aggregate 1,842 Class A Shares were purchased at an average cost per share of $ 76.57 , and the result of these purchases was an increase in Treasury Stock of $ 141,014 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2020 .

LP Units – During the three months ended March 31, 2020 , 792 Evercore LP partnership units ("LP Units") were exchanged for Class A Shares, resulting in an increase to Common Stock and Additional Paid-In-Capital of $ 8 and $ 33,164 , respectively, on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2020 .

Accumulated Other Comprehensive Income (Loss) – As of March 31, 2020 , Accumulated Other Comprehensive Income (Loss) on the Company's Unaudited Condensed Consolidated Statement of Financial Condition includes an accumulated Unrealized Gain (Loss) on Securities and Investments, net, and Foreign Currency Translation Adjustment Gain (Loss), net, of ($ 4,799 ) and ($ 33,129 ) , respectively.

Note 14 – Noncontrolling Interest

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Evercore Wealth Management ("EWM") (1)

Private Capital Advisory L.P.

Real Estate Capital Advisory ("RECA") (2)

(1) Noncontrolling Interests represent a blended rate for multiple classes of interests.

(2) Noncontrolling Interests represent the Common Interests of Private Capital Advisory L.P.

(2) Noncontrolling Interests represent the Class R Interests of Private Capital Advisory L.P.

The Noncontrolling Interests for Evercore LP, EWM and RECA have rights, in certain circumstances, to convert into Class A Shares.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Changes in Noncontrolling Interest for the three months ended March 31, 2020 and 2019 were as follows:

For the Three Months Ended March 31,

Changes in Noncontrolling Interest for the three and six months ended June 30, 2020 and 2019 were as follows:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Beginning balance

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Total Comprehensive Income

Evercore LP Units Converted into Class A Shares

Evercore LP Units Exchanged for Class A Shares

Amortization and Vesting of LP Units

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Ending balance

Other Comprehensive Income – Other Comprehensive Income (Loss) attributed to Noncontrolling Interest includes Unrealized Gains (Losses) on Securities and Investments, net, of ($ 141 ) and ($ 89 ) for the three months ended March 31, 2020 and 2019, respectively , and Foreign Currency Translation Adjustment Gains (Losses), net, of ($ 1,768 ) and $ 414 for the three months ended March 31, 2020 and 2019, respectively .

Interests Purchased – During the first quarter of 2020, the Company purchased, at fair value, an additional 1 % of the EWM Class A Units for $ 1,703 (which will be paid in cash of $ 852 and through the issuance of notes payable of $ 851 , included within Other Current Liabilities on the Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2020 ).

This purchase resulted in a decrease to Noncontrolling Interest of $ 138 and a decrease to Additional Paid-In-Capital of $ 1,565 , on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2020 .

Other Comprehensive Income – Other Comprehensive Income (Loss) attributed to Noncontrolling Interest includes Unrealized Gains (Losses) on Securities and Investments, net, of ($ 110 ) and ($ 251 ) for the three and six months ended June 30, 2020 , respectively, and ($ 9 ) and ($ 98 ) for the three and six months ended June 30, 2019, respectively , and Foreign Currency Translation Adjustment Gains (Losses), net, of $ 252 and ($ 1,516 ) for the three and six months ended June 30, 2020 , respectively, and ($ 580 ) and ($ 166 ) for the three and six months ended June 30, 2019, respectively .

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

LP Units Exchanged – During the three and six months ended June 30, 2020 , 15 and 806 LP Units, respectively, were exchanged for Class A Shares.

This resulted in decreases to Noncontrolling Interest and increases to Additional-Paid-In-Capital of $ 583 and $ 33,754 for the three and six months ended June 30, 2020 , respectively, on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2020 .

See Note 13 for further information.

Interests Purchased – During the first quarter of 2020, the Company purchased, at fair value, an additional 1 % of the EWM Class A Units for $ 1,703 (which was paid in cash of $ 852 during the three months ended June 30, 2020 and through the issuance of notes payable of $ 851 , included within Other Current Liabilities on the Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2020).

On May 31, 2019, the Company purchased, at fair value, the remaining 10 % of the Private Capital Advisory L.P.

Common Interests for $ 28,382 .

This purchase resulted in a decrease to Noncontrolling Interest of $ 6,674 and a decrease to Additional Paid-In-Capital of $ 21,708 , on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2019 .

On May 31, 2019, the Company also purchased, at fair value, an additional 17 % of the EWM Class A Units for $ 24,533 (in cash of $ 21,832 and the issuance of 31 Class A LP Units having a fair value of $ 2,701 ).

This purchase resulted in a net decrease to Noncontrolling Interest of $ 4,759 and a decrease to Additional Paid-In-Capital of $ 19,774 , on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2019 .

Note 15 – Net Income Per Share Attributable to Evercore Inc.

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The calculations of basic and diluted net income per share attributable to Evercore Inc.

common shareholders for the three months ended March 31, 2020 and 2019 are described and presented below.

common shareholders for the three and six months ended June 30, 2020 and 2019 are described and presented below.

EVERCORE INC.

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

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Basic Net Income Per Share Attributable to Evercore Inc.

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The Company previously had outstanding Class J limited partnership units of Evercore LP ("Class J LP Units"), which converted into Class E limited partnership units of Evercore LP ("Class E LP Units") and ultimately became exchangeable into Class A Shares on a one -for-one basis.

As of March 31, 2020, no Class J LP Units remained issued or outstanding.

As of June 30, 2020 , no Class J LP Units remained issued or outstanding.

See Note 16 for further information.

During the three months ended March 31, 2020 and 2019 , the Class J LP Units were dilutive and consequently the effect of their exchange into Class A Shares has been included in the calculation of diluted net income per share attributable to Evercore Inc.

During the six months ended June 30, 2020 and the three and six months ended June 30, 2019 , the Class J LP Units were dilutive and consequently the effect of their exchange into Class A Shares has been included in the calculation of diluted net income per share attributable to Evercore Inc.

common shareholders under the if-converted method.

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The Company has outstanding Class A and E LP Units, which give the holders the right to receive Class A Shares upon exchange on a one -for-one basis.

During the three months ended March 31, 2020 and 2019 , the Class A and E LP Units were antidilutive and consequently the effect of their exchange into Class A Shares has been excluded from the calculation of diluted net income per share attributable to Evercore Inc.

During the three and six months ended June 30, 2020 and 2019 , the Class A and E LP Units were antidilutive and consequently the effect of their exchange into Class A Shares has been excluded from the calculation of diluted net income per share attributable to Evercore Inc.

common shareholders.

The units that would have been included in the denominator of the computation of diluted net income per share attributable to Evercore Inc.

common shareholders if the effect would have been dilutive were 5,338 and 5,088 for the three months ended March 31, 2020 and 2019, respectively .

The adjustment to the numerator, diluted net income attributable to Class A common shareholders, if the effect would have been dilutive, would have been $ 4,949 and $ 8,170 for the three months ended March 31, 2020 and 2019, respectively .

The units that would have been included

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

in the denominator of the computation of diluted net income per share attributable to Evercore Inc.

common shareholders if the effect would have been dilutive were 5,076 and 5,207 for the three and six months ended June 30, 2020 , respectively, and 5,312 and 5,201 for the three and six months ended June 30, 2019, respectively .

The adjustment to the numerator, diluted net income attributable to Class A common shareholders, if the effect would have been dilutive, would have been $ 7,481 and $ 12,430 for the three and six months ended June 30, 2020 , respectively, and $ 11,021 and $ 19,191 for the three and six months ended June 30, 2019, respectively .

In computing this adjustment, the Company assumes that all vested Class A LP Units and all Class E LP Units are converted into Class A Shares, that all earnings attributable to those shares are attributed to Evercore Inc.

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The Company does not anticipate that the Class A and E LP Units will result in a dilutive computation in future periods.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company has outstanding Class I-P units of Evercore LP ("Class I-P Units") which are contingently exchangeable into Class I limited partnership units of Evercore LP ("Class I LP Units"), and ultimately Class A Shares, and outstanding Class K-P units of Evercore LP ("Class K-P Units") which are contingently exchangeable into Class K limited partnership units of Evercore LP ("Class K LP Units"), and ultimately Class A Shares, as they are subject to certain performance thresholds being achieved.

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The Units that were assumed to be converted to an equal number of Class A Shares for purposes of computing diluted net income per share attributable to Evercore Inc.

common shareholders were 400 for each of the three months ended March 31, 2020 and 2019 .

common shareholders were 400 for each of the three and six months ended June 30, 2020 and 2019 .

The shares of Class B common stock have no right to receive dividends or a distribution on liquidation or winding up of the Company.

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As the number of Class J LP Units exchanged was within the number of Class H LP Interests that the Company determined were probable of being exchanged on the date of modification, the Company expensed the previously unrecognized grant date fair value of the Class H LP Interests ratably over the remaining vesting period of the Class J LP Units.

Compensation expense related to the Class J LP Units was $ 1,067 and $ 4,049 for the three months ended March 31, 2020 and 2019, respectively .

Compensation expense related to the Class J LP Units was $ 1,067 for the six months ended June 30, 2020 , and $ 3,700 and $ 7,749 for the three and six months ended June 30, 2019, respectively .

On February 15, 2020, 223 Class J LP Units vested and were converted to an equal amount of Class E LP Units.

Following the conversion, no Class J LP Units remain issued and outstanding.

Othe r Performance-based Awards – In November 2016, the Company issued 400 Class I-P Units in conjunction with the appointment of the Executive Chairman.

Othe r Performance-based Awards – In November 2016, the Company issued 400 Class I-P Units in conjunction with the appointment of the current Co-Chief Executive Officer (then Executive Chairman).

These Class I-P Units convert into a specified number of Class I LP Units, which are exchangeable on a one -for-one basis to Class A Shares, contingent on the achievement of certain market and service conditions, subject to vesting upon specified termination events (including retirement, upon satisfying certain eligibility criteria, on or following January 15, 2022, subject to a one year prior written notice requirement) or a change in control.

These Class I-P Units are segregated into two groups of 200 units each, with share price threshold vesting conditions which are required to exceed a certain level for 20 consecutive trading days (which were met as of March 31, 2017).

The Company determined the fair value of the award to be $ 24,412 and is expensing the award ratably over the implied service period, which ends on March 1, 2022.

As the award contains market-based conditions, the entire expense will be recognized if the award does not vest for any reason other than the service conditions.

Compensation expense related to this award was $ 1,152 and $ 1,139 for the three months ended March 31, 2020 and 2019, respectively .

In November 2017, the Company issued 64 Class K-P Units to an employee of the Company.

These Class K-P Units convert into a specified number of Class K LP Units (which are exchangeable on a one -for-one basis to Class A Shares), contingent upon the achievement of certain defined benchmark results and continued service through December 31, 2021.

An additional 16 Class K-P Units may be issued contingent upon the achievement of certain defined benchmark results (which were probable of achievement as of March 31, 2020 ) and continued service through December 31, 2021.

The Company determined the value of the award probable to vest as of March 31, 2020 to be $ 6,250 and records expense for these units over the service period.

EVERCORE INC.

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

determined the fair value of the award to be $ 24,412 and is expensing the award ratably over the implied service period, which ends on March 1, 2022.

As the award contains market-based conditions, the entire expense will be recognized if the award does not vest for any reason other than the service conditions.

Compensation expense related to this award was $ 1,152 and $ 2,303 for the three and six months ended June 30, 2020 , respectively, and $ 1,152 and $ 2,291 for the three and six months ended June 30, 2019, respectively .

In November 2017, the Company issued 64 Class K-P Units to an employee of the Company.

An additional 16 Class K-P Units may be issued contingent upon the achievement of certain defined benchmark results (which were probable of achievement as of June 30, 2020 ) and continued service through December 31, 2021.

The Company determined the value of the award probable to vest as of June 30, 2020 to be $ 6,250 and records expense for these units over the service period.

In June 2019, the Company issued 220 Class K-P Units to an employee of the Company.

These Class K-P Units convert into a number of Class K LP Units (which are exchangeable on a one -for-one basis to Class A Shares), contingent and based upon the achievement of certain defined benchmark results and continued service through February 4, 2023 for the first tranche, which consists of 120 Class K-P Units convertible into a number of Class K LP Units, and February 4, 2028 for the second tranche, which consists of 100 Class K-P Units convertible into a number of Class K LP Units.

The Company determined the value of the award probable to vest as of March 31, 2020 to be $ 14,104 and records expense for these units over the service period.

Compensation expense related to the Class K-P Units was $ 1,093 and $ 296 for the three months ended March 31, 2020 and 2019, respectively .

The Company determined the value of the award probable to vest as of June 30, 2020 to be $ 14,240 and records expense for these units over the service period.

Compensation expense related to the Class K-P Units was $ 1,233 and $ 2,326 for the three and six months ended June 30, 2020 , respectively, and $ 338 and $ 634 for the three and six months ended June 30, 2019, respectively .

Stock Incentive Plan

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Stock Incentive Plan (the "2016 Plan").

The 2016 Plan, among other things, authorizes an additional 10,000 shares of the Company's Class A Shares.

The 2016 Plan permits the Company to grant to key employees, directors and consultants incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, RSUs and other awards based on the Company's Class A Shares.

The Company intends to use newly-issued Class A Shares to satisfy any awards under the 2016 Plan and its predecessor plan.

During the second quarter of 2020, the Company's stockholders approved the Amended and Restated 2016 Evercore Inc.

Stock Incentive Plan (the "Amended 2016 Plan"), which amended the 2016 Plan.

The Amended 2016 Plan, among other things, authorizes an additional 6,000 shares of the Company's Class A Shares.

The Amended 2016 Plan permits the Company to grant to key employees, directors and consultants incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, RSUs and other awards based on the Company's Class A Shares.

The Company intends to use newly-issued Class A Shares to satisfy any awards under the Amended 2016 Plan and its predecessor plan.

Class A Shares underlying any award granted under the 2016 Plan that expire, terminate or are canceled or satisfied for any reason without being settled in stock again become available for awards under the plans.

The total shares available to be granted in the future under the 2016 Plan was 1,002 and 2,901 as of March 31, 2020 and 2019, respectively .

The total shares available to be granted in the future under the Amended 2016 Plan was 7,022 as of June 30, 2020 .

The Company also grants, at its discretion, dividend equivalents, in the form of unvested RSU awards, or deferred cash dividends, concurrently with the payment of dividends to the holders of Class A Shares, on all unvested RSU grants awarded in conjunction with annual bonuses, as well as new hire awards.

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Equity Grants

During the three months ended March 31, 2020 , pursuant to the 2016 Plan, the Company granted employees 1,904 RSUs that are Service-based Awards.

Service-based Awards granted during the three months ended March 31, 2020 had grant date fair values of $ 75.34 to $ 81.53 per share, with an average value of $ 81.44 per share, for an aggregate fair value of $ 155,032 , and generally vest ratably over four years .

During the three months ended March 31, 2020 , 2,372 Service-based Awards vested and 33 Service-based Awards were forfeited.

Compensation expense related to Service-based Awards, including RSUs granted to the Executive Chairman in November 2016, was $ 50,297 and $ 55,618 for the three months ended March 31, 2020 and 2019, respectively .

During the six months ended June 30, 2020 , pursuant to the above Stock Incentive Plans, the Company granted employees 1,926 RSUs that are Service-based Awards.

Service-based Awards granted during the six months ended June 30, 2020 had grant date fair values of $ 44.21 to $ 81.53 per share, with an average value of $ 81.18 per share, for an aggregate fair value of $ 156,319 , and generally vest ratably over four years .

During the six months ended June 30, 2020 , 2,465 Service-based Awards vested and 75 Service-based Awards were forfeited.

Compensation expense related to Service-based Awards was $ 50,176 and $ 100,472 for the three and six months ended June 30, 2020 , respectively, and $ 56,526 and $ 112,144 for the three and six months ended June 30, 2019, respectively .

Deferred Cash

The Company's deferred cash compensation program provides participants the ability to elect to receive a portion of their deferred compensation in cash, which is indexed to notional investment portfolios selected by the participant and vests ratably over four years and requires payment upon vesting.

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over four years and requires payment upon vesting.

The Company granted $ 179,705 of deferred cash awards pursuant to the deferred cash compensation program during the first quarter of 2020 .

In November 2016, the Company granted a restricted cash award in conjunction with the appointment of the Executive Chairman with a target payment amount of $ 35,000 , of which $ 11,000 vested on March 1, 2019, $ 6,000 vested on March 1, 2020, and $ 6,000 is scheduled to vest on each of the next three anniversaries of March 1, 2020, provided that the Executive Chairman continues to remain employed through each such vesting date, subject to vesting upon specified termination events (including retirement, upon satisfying certain eligibility criteria, on or following May 1, 2019, subject to a six month prior written notice requirement) or a change in control.

As of June 30, 2020 , the total compensation cost related to the deferred cash compensation program not yet recognized was $ 214,338 .

The weighted-average period over which this compensation cost is expected to be recognized is 34 months .

In November 2016, the Company granted a restricted cash award in conjunction with the appointment of a current Co-Chief Executive Officer (then Executive Chairman) with a target payment amount of $ 35,000 , of which $ 11,000 vested on March 1, 2019, $ 6,000 vested on March 1, 2020, and $ 6,000 is scheduled to vest on each of the next three anniversaries of March 1, 2020, provided that the current Co-Chief Executive Officer continues to remain employed through each such vesting date, subject to vesting upon specified termination events (including retirement, upon satisfying certain eligibility criteria, on or following May 1, 2019, subject to a six month prior written notice requirement) or a change in control.

The Company had the discretion to increase (by an amount up to $ 35,000 ) or decrease (by an amount up to $ 8,750 ) the total amount payable under this award.

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The Company records expense for these awards ratably over the vesting period.

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Compensation expense related to deferred cash awards was $ 25,580 and $ 27,393 for the three months ended March 31, 2020 and 2019, respectively.

Compensation expense related to deferred cash awards was $ 39,434 and $ 65,014 for the three and six months ended June 30, 2020 , respectively, and $ 25,375 and $ 52,768 for the three and six months ended June 30, 2019, respectively .

Long-term Incentive Plan

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The 2013 Long-term Incentive Plan was paid in cash in installments in 2017, 2018 and 2019.

The 2017 Long-term Incentive Plan, which aggregate $ 30,131 of current liabilities and $ 60,263 of long-term liabilities on the Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2020 , is due to be paid, in cash or Class A Shares, at the Company's discretion, in three equal installments in the first quarter of 2021, 2022 and 2023, subject to employment at the time of payment.

The 2017 Long-term Incentive Plan, which aggregate $ 31,146 of current liabilities and $ 62,293 of long-term liabilities on the Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2020 , is due to be paid, in cash or Class A Shares, at the Company's discretion, in three equal installments in the first quarter of 2021, 2022 and 2023, subject to employment at the time of payment.

These awards are subject to retirement eligibility requirements after the performance criteria has been achieved.

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During the first quarter of 2020, in assessing the potential impact of the COVID-19 pandemic on the Company's full year 2020 results, management determined it would be appropriate to decrease its expectation for the probable payout of this plan.

This analysis included a review of historical performance for those eligible under the plan, as well as current backlog.

As such, the Company reversed $ 6,810 of expense for the three months ended March 31, 2020 .

The Company recorded $ 8,410 of expense for the three months ended March 31, 2019.

In conjunction with this plan, the Company distributed cash payments of $ 19,516 for the three months ended March 31, 2019.

As of March 31, 2020 , based on the Company's current assessment of the probability of the level of benchmarks being achieved, the total remaining expense to be accrued for the 2017 Long-term Incentive Plan over the future vesting period ending March 15, 2023 is $ 45,423 .

This analysis included a review of historical performance for those eligible under the plan, as well as current backlog, and resulted in a reversal of $ 6,810 of expense during the first quarter of 2020.

The Company recorded $ 2,989 of expense for the three months ended June 30, 2020 and reversed $ 3,821 of expense for the six months ended June 30, 2020.

The Company recorded $ 8,216 and $ 16,626 of expense for the three and six months ended June 30, 2019, respectively .

In conjunction with this plan, the Company distributed cash payments of $ 19,516 for the six months ended June 30, 2019 .

As of June 30, 2020 , based on the Company's current assessment of the probability of the level of benchmarks being achieved, the total remaining expense to be accrued for the 2017 Long-term Incentive Plan over the future vesting period ending March 15, 2023 is $ 36,613 .

Employee Loans Receivable

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In circumstances where the employee meets the Company's minimum credit standards, the Company amortizes these awards to compensation expense over the relevant service period, which is generally the period they are subject to forfeiture.

Compensation expense related to these awards was $ 4,434 and $ 3,605 for the three months ended March 31, 2020 and 2019, respectively .

The remaining unamortized amount of these awards was $ 39,288 as of March 31, 2020 .

Compensation expense related to these awards was $ 3,980 and $ 8,415 for the three and six months ended June 30, 2020 , respectively, and $ 5,741 and $ 9,346 for the three and six months ended June 30, 2019, respectively .

The remaining unamortized amount of these awards was $ 35,572 as of June 30, 2020 .

Separation and Transition Benefits

During the first quarter of 2020 , the Company substantially completed a review of operations focused on markets, sectors and people which have delivered lower levels of productivity in an effort to attain greater flexibility of operations and better position

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itself for future growth.

This review, which began in the fourth quarter of 2019, will generate reductions of approximately 6 % of the Company's headcount.

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Actual results may differ materially if actual activity deviates from these assumptions.

For the three months ended March 31, 2020 , the separation benefits, stay arrangements and accelerated deferred cash compensation (together, the "Termination Costs") resulted in expense of $ 16,431 and the acceleration of the amortization of share-based payments resulted in expense of $ 5,529 , each recorded in Special Charges, Including Business Realignment Costs, primarily within the Investment Banking segment, on the Company’s Unaudited Condensed Consolidated Statements of Operations.

For the three and six months ended June 30, 2020 , the separation benefits, stay arrangements and accelerated deferred cash compensation (together, the "Termination Costs") resulted in expense of $ 6,385 and $ 22,816 , respectively, and the acceleration of the amortization of share-based payments resulted in expense of $ 1,806 and $ 7,335 , respectively, each recorded in Special Charges, Including Business Realignment Costs, primarily within the Investment Banking segment, on the Company’s Unaudited Condensed Consolidated Statements of Operations.

In addition, in conjunction with the Company's review of its operations, the Termination Costs resulted in expense of $ 1,578 and the acceleration of the amortization of share-based payments resulted in expense of $ 1,272 , each recorded in Special Charges, Including Business Realignment Costs, primarily within the Investment Banking segment, on the Company’s Consolidated Statements of Operations for the year ended December 31, 2019.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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The Company granted separation and transition benefits to certain employees, resulting in expense included in Employee Compensation and Benefits, primarily within the Investment Banking segment, of $ 3,275 for the three months ended March 31, 2019.

This is comprised of expense related to the Termination Costs of $ 2,273 and expense related to the acceleration of the amortization of share-based payments of $ 1,002 .

The following table presents the change in the Company's Termination Costs liability for the three months ended March 31, 2020:

For the Three Months Ended

March 31, 2020

This is comprised of expense related to the Termination Costs of $ 1,320 and $ 3,593 , respectively, and expense related to the acceleration of the amortization of share-based payments of $ 218 and $ 1,220 , for the three and six months ended June 30, 2019, respectively .

The following table presents the change in the Company's Termination Costs liability for the six months ended June 30, 2020 :

For the Six Months Ended

June 30, 2020

Balance at January 1, 2020

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Non-Cash Charges

Balance at March 31, 2020

Balance at June 30, 2020

Note 17 – Commitments and Contingencies

For a further discussion of the Company's commitments, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2019 .

Private Equity – As of March 31, 2020 , the Company had unfunded commitments for capital contributions of $ 13,737 to private equity funds.

Private Equity – As of June 30, 2020 , the Company had unfunded commitments for capital contributions of $ 13,737 to private equity funds.

These commitments will be funded as required through the end of each private equity fund's investment period, subject to certain conditions.

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In addition, the agreement contains certain reporting covenants, as well as certain debt covenants that prohibit East and the Company from incurring other indebtedness, subject to specified exceptions.

The Company and its consolidated subsidiaries were in compliance with these covenants as of March 31, 2020 .

The Company and its consolidated subsidiaries were in compliance with these covenants as of June 30, 2020 .

Drawings under this facility bear interest at the prime rate.

On March 11, 2019, East drew down $ 30,000 on this facility, which was repaid on May 3, 2019.

On June 21, 2019, East amended this facility with PNC such that, among other things, the interest rate provisions were modified to LIBOR plus 125 basis points and the maturity date was extended to October 31, 2020 (as amended, the "Existing PNC Facility").

On June 21, 2019, East amended this facility with PNC such that, among other things,

EVERCORE INC.

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the interest rate provisions were modified to LIBOR plus 125 basis points and the maturity date was extended to October 31, 2020 (as amended, the "Existing PNC Facility").

On July 26, 2019, East entered into an additional loan agreement with PNC for a revolving credit facility in an aggregate principal amount of up to $ 20,000 , to be used for working capital and other corporate activities.

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In addition, the agreement contains certain reporting requirements and debt covenants consistent with the Existing PNC Facility.

The Company and its consolidated subsidiaries were in compliance with these covenants as of March 31, 2020 .

The Company and its consolidated subsidiaries were in compliance with these covenants as of June 30, 2020 .

Drawings under this facility bear interest at LIBOR plus 150 basis points.

East is only permitted to borrow under this facility if there is no undrawn availability under the Existing PNC Facility and must repay indebtedness under this facility prior to repaying indebtedness under the Existing PNC Facility.

There have been no drawings under this facility as of March 31, 2020 .

There have been no drawings under this facility as of June 30, 2020 .

ECB maintains a line of credit with BBVA Bancomer to fund its trading activities on an intra-day and overnight basis.

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Other Commitments – In addition, the Company enters into commitments to pay contingent consideration related to certain of its acquisitions.

The Company paid $ 81 and $ 2,008 of its commitment for contingent consideration related to its acquisition of Kuna & Co, KG during the three months ended March 31, 2020 and 2019 , respectively.

At March 31, 2020 , the Company had a remaining commitment of $ 211 for contingent consideration related to its acquisition of Kuna & Co.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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The Company also had a commitment at March 31, 2019 for contingent consideration related to an arrangement with the former employer of certain RECA employees, which provided for contingent consideration to be paid to the former employer of up to $ 4,463 , based on the completion of certain client engagements.

The Company paid $ 81 and $ 2,008 of its commitment for contingent consideration related to its acquisition of Kuna & Co, KG during the six months ended June 30, 2020 and 2019 , respectively.

At June 30, 2020 , the Company had a remaining commitment of $ 215 for contingent consideration related to its acquisition of Kuna & Co.

The Company also had a commitment at June 30, 2019 for contingent consideration related to an arrangement with the former employer of certain RECA employees, which provided for contingent consideration to be paid to the former employer of up to $ 4,463 , based on the completion of certain client engagements.

The contingent consideration was fully paid as of December 31, 2019 .

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The restrictions will lapse when the leases end.

Restricted Cash also includes margin requirements for futures contracts.

Futures Contracts – In February 2020, the Company entered into four-month futures contracts on a stock index fund with a notional amount of $ 38,908 , as an economic hedge against the Company's deferred cash compensation program.

These contracts will settle in June 2020.

These contracts settled in June 2020.

In accordance with ASC 815, "Derivatives and Hedging," ("ASC 815") these contracts 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 futures contracts had a minimum cash requirement of $ 6,097 as of March 31, 2020 , which is reflected in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition .

The Company had net unrealized losses of ($ 9,228 ) for the three months ended March 31, 2020 .

The Company had net realized gains (losses) of $ 5,230 and ($ 3,998 ) for the three and six months ended June 30, 2020 , respectively.

These contracts settled in June 2019.

In accordance with ASC 815, these contracts 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 gains of $ 59 for the three and six months ended June 30, 2019 .

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Foreign Exchange – On occasion, the Company enters into foreign currency exchange forward contracts as an economic hedge against exchange rate risk for foreign currency denominated accounts receivable in EGL.

There were no foreign currency exchange forward contracts outstanding as of March 31, 2020 .

There were no foreign currency exchange forward contracts outstanding as of June 30, 2020 .

The Company entered into foreign currency exchange forward contracts to sell 3.8 billion Japanese yen for $ 35,598 during the first quarter of 2019 as an economic hedge against the exchange rate risk for Japanese yen denominated accounts receivable in EGL.

The contracts were recorded at their fair value of $ 22 as of March 31, 2019 , and included in Other Current Assets on the Unaudited Condensed Consolidated Statements of Financial Condition.

These contracts settled in April 2019.

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Once established, such provisions are adjusted when there is more information available or when an event occurs requiring a change.

EVERCORE INC.

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Beginning on or about November 16, 2016, several putative securities class action complaints were filed against Adeptus Health Inc.

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On March 4, 2019, the defendants filed a motion to dismiss as to the second amended complaint.

On January 9, 2020, the Court granted preliminary approval of a settlement among the parties, including the underwriters, and scheduled a final hearing for May 20, 2020.

On January 9, 2020, the Court granted preliminary approval of a settlement among the parties, including the underwriters, and granted final approval of the settlement at a hearing on May 20, 2020.

The settlement amount attributed to the Company is not material to the Company.

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Under the Alternative Net Capital Requirement, EGL's minimum net capital requirement is $ 250 .

EGL's regulatory net capital as of March 31, 2020 and December 31, 2019 was $ 275,352 and $ 331,510 , respectively, which exceeded the minimum net capital requirement by $ 275,102 and $ 331,260 , respectively.

EGL's regulatory net capital as of June 30, 2020 and December 31, 2019 was $ 343,398 and $ 331,510 , respectively, which exceeded the minimum net capital requirement by $ 343,148 and $ 331,260 , respectively.

Certain other non-U.S.

subsidiaries are subject to various securities and banking regulations and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate.

These subsidiaries are in excess of their local capital adequacy requirements at March 31, 2020 .

These subsidiaries are in excess of their local capital adequacy requirements at June 30, 2020 .

Evercore Trust Company, N.A.

("ETC"), which is limited to fiduciary activities, is regulated by the Office of the Comptroller of the Currency ("OCC") and is a member bank of the Federal Reserve System.

The Company, Evercore LP and ETC are subject to written agreements with the OCC that, among other things, require the Company and Evercore LP to maintain at least $ 5,000 in Tier 1 capital in ETC (or such other amount as the OCC may require) and maintain liquid assets in ETC in an amount at least equal to the greater of $ 3,500 or 180 days coverage of ETC's operating expenses.

The Company was in compliance with the aforementioned agreements as of March 31, 2020 .

Note 19 – Income Taxes

The Company's Provision for Income Taxes was $ 13,551 and $ 7,821 for the three months ended March 31, 2020 and 2019, respectively .

The effective tax rate was 26 % and 9 % for the three months ended March 31, 2020 and 2019, respectively .

The effective tax rate reflects net excess tax benefits associated with the appreciation or depreciation in the Company's share price upon vesting of employee share-based awards above or below the original grant price of $ 647 and $ 12,161 being recognized in the Company's Provision for Income Taxes for the three months ended March 31, 2020 and 2019, respectively , and resulted in a reduction in the effective tax rate of 1 and 14 percentage points for the three months ended March 31, 2020 and 2019, respectively .

The effective tax rate for the three months ended March 31, 2020 and 2019 also reflects the effect of certain nondeductible expenses, including expenses related to Class J LP Units and Class I-P and K-P Units, as well as the noncontrolling interest associated with LP Units and other adjustments.

Additionally, the Company is subject to the income tax effects associated with the new global intangible low-taxed income ("GILTI") provisions in the period incurred.

For the three months ended March 31, 2020 and 2019, no additional income tax expense associated with the GILTI provisions has been reported and it is not expected to be material to the Company’s effective tax rate for the year.

The Company reported an increase in deferred tax assets of $ 284 associated with changes in Unrealized Gain (Loss) on Securities and Investments and an increase of $ 3,995 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the three months ended March 31, 2020 .

The Company reported an increase in deferred tax assets of $ 185 associated with changes in Unrealized Gain (Loss) on Securities and Investments and a

The Company, Evercore LP and ETC are subject

EVERCORE INC.

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decrease of $ 890 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the three months ended March 31, 2019 .

to written agreements with the OCC that, among other things, require the Company and Evercore LP to maintain at least $ 5,000 in Tier 1 capital in ETC (or such other amount as the OCC may require) and maintain liquid assets in ETC in an amount at least equal to the greater of $ 3,500 or 180 days coverage of ETC's operating expenses.

The Company was in compliance with the aforementioned agreements as of June 30, 2020 .

Note 19 – Income Taxes

The Company's Provision for Income Taxes was $ 21,814 and $ 35,365 for the three and six months ended June 30, 2020 , respectively, and $ 32,030 and $ 39,851 for the three and six months ended June 30, 2019, respectively .

The effective tax rate was 24.5 % and 25.0 % for the three and six months ended June 30, 2020 , respectively, and 24.8 % and 18.5 % for the three and six months ended June 30, 2019, respectively .

The effective tax rate reflects net excess tax benefits associated with the appreciation or depreciation in the Company's share price upon vesting of employee share-based awards above or below the original grant price of $ 103 and $ 12,130 being recognized in the Company's Provision for Income Taxes for the six months ended June 30, 2020 and 2019, respectively , and resulted in a reduction in the effective tax rate of 0.1 and 6 percentage points for the six months ended June 30, 2020 and 2019, respectively .

The effective tax rate for 2020 and 2019 also reflects the effect of certain nondeductible expenses, including expenses related to Class J LP Units and Class I-P and K-P Units, as well as the noncontrolling interest associated with LP Units and other adjustments.

Additionally, the Company is subject to the income tax effects associated with the new global intangible low-taxed income ("GILTI") provisions in the period incurred.

For the three and six months ended June 30, 2020 and 2019, no additional income tax expense associated with the GILTI provisions has been reported and it is not expected to be material to the Company’s effective tax rate for the year.

The Company reported an increase in deferred tax assets of $ 518 associated with changes in Unrealized Gain (Loss) on Securities and Investments and an increase of $ 3,363 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the six months ended June 30, 2020 .

The Company reported an increase in deferred tax assets of $ 205 associated with changes in Unrealized Gain (Loss) on Securities and Investments and an increase of $ 262 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the six months ended June 30, 2019 .

The Company classifies interest relating to tax matters and tax penalties as a component of income tax expense in its Unaudited Condensed Consolidated Statements of Operations.

As of March 31, 2020 , there were $ 494 of unrecognized tax benefits that, if recognized, $ 402 would affect the effective tax rate.

As of June 30, 2020 , there were $ 494 of unrecognized tax benefits that, if recognized, $ 402 would affect the effective tax rate.

The Company anticipates approximately $ 118 of unrecognized tax benefits may be recognized within a year, as a result of the lapse in the statute of limitations.

The Company classifies interest relating to tax matters and tax penalties as a component of income tax expense in its Unaudited Condensed Consolidated Statements of Operations .

Related to the unrecognized tax benefits, the Company accrued interest and penalties of $ 15 and $ 1 , respectively, during the three months ended March 31, 2020 .

Related to the unrecognized tax benefits, the Company accrued interest and penalties of $ 16 and $ 1 , respectively, during the three months ended June 30, 2020 .

Note 20 – Segment Operating Results

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Investment Management includes advising third-party investors in Institutional Asset Management and Wealth Management and interests in private equity funds which are not managed by the Company.

The Company's segment information for the three months ended March 31, 2020 and 2019 is prepared using the following methodology:

In April 2020, the Company entered into an agreement for the leaders of its business in Mexico to purchase ECB, the Company's Mexico based broker-dealer focused principally on providing Investment Management services.

This sale will be completed following regulatory approval.

See Note 5 for further information.

The Company's segment information for the three and six months ended June 30, 2020 and 2019 is prepared using the following methodology:

Revenue, expenses and income (loss) from equity method investments directly associated with each segment are included in determining pre-tax income.

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Segment assets are based on those directly associated with each segment, or for certain assets shared across segments, those assets are allocated based on the most relevant measures applicable, including headcount and other factors.

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Investment gains and losses, interest income and interest expense are allocated between the segments based on the segment in which the underlying asset or liability is held.

6 unchanged sentences

Amortization of LP Units and Certain Other Awards – Includes amortization costs associated with the vesting of Class J LP Units issued in conjunction with the acquisition of ISI and certain other related awards.

Special Charges, Including Business Realignment Costs – Includes expenses in 2020 related to separation and transition benefits and related costs as a result of the Company's review of its operations and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the previously announced expansion of the Company's headquarters in New York and the Company's business realignment initiatives.

Includes expenses in 2019

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

related to the acceleration of depreciation expense for leasehold improvements in conjunction with the expansion of the Company's headquarters in New York.

Special Charges, Including Business Realignment Costs – Includes expenses in 2020 related to separation and transition benefits and related costs as a result of the Company's review of its operations and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of the Company's headquarters in New York and the Company's business realignment initiatives.

Includes expenses in 2019 related to the acceleration of depreciation expense for leasehold improvements in conjunction with the expansion of the Company's headquarters in New York.

Acquisition and Transition Costs – Includes costs incurred in connection with acquisitions, divestitures and other ongoing business development initiatives, primarily comprised of professional fees for legal and other services.

1 unchanged sentence

The Company evaluates segment results based on net revenues and pre-tax income, both including and excluding the impact of the Other Expenses.

No client accounted for more than 10% of the Company's Consolidated Net Revenues for the three months ended March 31, 2020 .

No client accounted for more than 10% of the Company's Consolidated Net Revenues for the three and six months ended June 30, 2020 .

The following information presents each segment's contribution.

For the Three Months Ended March 31,

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Investment Banking

10 unchanged sentences

Other Expenses (2)

Operating Income

Operating Income (Loss)

Income from Equity Method Investments

12 unchanged sentences

Net revenues include Other Revenue, net, allocated to the segments as follows:

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Investment Banking (A)

1 unchanged sentence

Total Other Revenue, net

Investment Banking Other Revenue, net, includes interest expense on the Notes Payable and lines of credit of $ 4,842 and $ 2,264 for the three months ended March 31, 2020 and 2019, respectively .

Investment Banking Other Revenue, net, includes interest expense on the Notes Payable and lines of credit of $ 4,534 and $ 9,376 for the three and six months ended June 30, 2020 , respectively, and $ 2,304 and $ 4,568 for the three and six months ended June 30, 2019, respectively .

Other Expenses are as follows:

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Investment Banking

11 unchanged sentences

The Company's revenues were derived from clients located and managed in the following geographical areas:

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Net Revenues:

3 unchanged sentences

(1) Excludes Other Revenue, Including Interest and Investments, and Interest Expense.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company's total assets are located in the following geographical areas:

March 31, 2020

June 30, 2020

December 31, 2019

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements