What changed in this filing

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Item 1. Financial Statements

2020-11-02 compared with 2020-08-04 · 294 added, 286 removed, 890 unchanged (39% of the section changed)

1 unchanged sentence

Condensed Consolidated Financial Statements (Unaudited)

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

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

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019

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

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

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019

Notes to Unaudited Condensed Consolidated Financial Statements

2 unchanged sentences

(dollars in thousands, except share data)

June 30, 2020

September 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 $991 and $114,204 at June 30, 2020 and December 31, 2019, respectively)

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

Financial Instruments Owned and Pledged as Collateral at Fair Value

Securities Purchased Under Agreements to Resell

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

Accounts Receivable (net of allowances of $10,833 and $7,881 at September 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 $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)

Furniture, Equipment and Leasehold Improvements (net of accumulated depreciation and amortization of $136,815 and $117,387 at September 30, 2020 and December 31, 2019, respectively)

Intangible Assets (net of accumulated amortization of $8,793 and $7,292 at September 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, 71,977,753 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)

Class A, par value $0.01 per share (1,000,000,000 shares authorized, 72,014,728 and 68,698,675 issued at September 30, 2020 and December 31, 2019, respectively, and 40,605,372 and 39,176,010 outstanding at September 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 September 30, 2020 and December 31, 2019, respectively)

Additional Paid-In-Capital

1 unchanged sentence

Retained Earnings

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

Treasury Stock at Cost (31,409,356 and 29,522,665 shares at September 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 June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Investment Banking:

32 unchanged sentences

(dollars in thousands)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Other Comprehensive Income (Loss), net of tax:

9 unchanged sentences

(dollars in thousands, except share data)

For the Three Months Ended June 30, 2020

For the Three Months Ended September 30, 2020

Class A Common Stock

3 unchanged sentences

Income (Loss)

Balance at March 31, 2020

Balance at June 30, 2020

Other Comprehensive Income

3 unchanged sentences

Noncontrolling Interest (Note 14)

Balance at June 30, 2020

For the Six Months Ended June 30, 2020

Balance at September 30, 2020

For the Nine Months Ended September 30, 2020

Class A Common Stock

10 unchanged sentences

Noncontrolling Interest (Note 14)

Balance at June 30, 2020

Balance at September 30, 2020

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

1 unchanged sentence

See Notes 2 and 3 for further information.

For the Three Months Ended June 30, 2019

For the Three Months Ended September 30, 2019

Class A Common Stock

3 unchanged sentences

Income (Loss)

Balance at March 31, 2019

Balance at June 30, 2019

Other Comprehensive Income (Loss)

3 unchanged sentences

Noncontrolling Interest (Note 14)

Balance at June 30, 2019

For the Six Months Ended June 30, 2019

Balance at September 30, 2019

For the Nine Months Ended September 30, 2019

Class A Common Stock

9 unchanged sentences

Noncontrolling Interest (Note 14)

Balance at June 30, 2019

Balance at September 30, 2019

See Notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(dollars in thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash Flows From Operating Activities

Adjustments to Reconcile Net Income to Net Cash Provided by (Used In) Operating Activities:

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:

Net (Gains) Losses on Investments, Investment Securities and Contingent Consideration

1 unchanged sentence

Equity-Based and Other Deferred Compensation

Gain on Sale of ECB Trust Business

Noncash Lease Expense

15 unchanged sentences

Other Liabilities

Net Cash Provided (Used In) by Operating Activities

Net Cash Provided by Operating Activities

Cash Flows From Investing Activities

5 unchanged sentences

Maturity of Certificates of Deposit

Purchase of Certificates of Deposit

Purchase of Furniture, Equipment and Leasehold Improvements

Net Cash Provided by Investing Activities

Proceeds from Sale of Business

Net Cash Provided by (Used In) Investing Activities

Cash Flows From Financing Activities

3 unchanged sentences

Repayment of Short-Term Borrowings

Issuance of Notes Payable

Debt Issuance Costs

Purchase of Treasury Stock and Noncontrolling Interests

52 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 $ 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 .

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 $ 228,884 and liabilities of $ 102,217 at September 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.

58 unchanged sentences

The Company is currently assessing the impact of this update on the Company's financial condition, results of operations and cash flows, or disclosures thereto.

ASU 2020-06 – In August 2020, the FASB issued ASU No.

2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU 2020-06").

ASU 2020-06 provides amendments to reduce the number of models used to account for convertible instruments and to simplify the accounting for contracts in an entity's own equity.

ASU 2020-06 also provides amendments to diluted earnings per share calculations, which require entities to use the if-converted method for convertible instruments and to include the effect of potential share settlement from instruments that may be settled in cash or in shares.

The amendments in this update are effective during interim and annual periods beginning after December 15, 2021, with early adoption permitted.

The amendments should be applied using a modified or full retrospective transition method.

The Company is currently

EVERCORE INC.

1 unchanged sentence

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

assessing the impact of this update on the Company's financial condition, results of operations and cash flows, or disclosures thereto.

Note 4 – Revenue and Accounts Receivable

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,

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

For the Three Months Ended September 30,

For the Nine Months Ended September 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 six months ended June 30, 2020 and 2019 are as follows:

For the Six Months Ended June 30, 2020

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

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

For the Nine Months Ended September 30, 2020

(Current) (1)

8 unchanged sentences

Increase (Decrease)

Balance at June 30, 2020

For the Six Months Ended June 30, 2019

Balance at September 30, 2020

For the Nine Months Ended September 30, 2019

(Current) (1)

8 unchanged sentences

Increase (Decrease)

Balance at June 30, 2019

Balance at September 30, 2019

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

3 unchanged sentences

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

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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 .

The Company recognized revenue of $ 5,652 and $ 11,543 on the Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 , respectively, and $ 3,377 and $ 10,870 for the three and nine months ended September 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 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,

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

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Beginning Balance (1)

2 unchanged sentences

Ending Balance

(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.

(1) Beginning Balance for the nine months ended September 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 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.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The change in the balance during the three and nine months ended September 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 the change in the amount of receivables outstanding greater than 120 days at September 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 June 30, 2020 by year of origination:

Amortized Cost Basis by Origination Year

Long-term Accounts Receivable and Long-Term Contract Assets

Note 5 – Special Charges, Including Business Realignment Costs, and Intangible Asset Amortization

Note 5 – Business Developments, Special Charges, Including Business Realignment Costs, and Intangible Asset Amortization

Business Developments

Sale of ECB Trust Business - On July 2, 2020, the Company completed the sale of the trust business of Evercore Casa de Bolsa, S.A.

("ECB") (the "ECB Trust Business"), which was a part of its Investment Management segment, for a purchase price of MXN 39,500 ( $ 1,830 ).

As a result of this transaction, the Company deconsolidated assets of $ 475 , representing an allocation of goodwill based on the relative fair value of the business being sold to the total fair value of the Institutional Asset Management reporting unit.

This transaction resulted in a pre-tax gain of $ 1,355 included in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 .

Special Charges, Including Business Realignment Costs

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.

The Company recognized $ 7,380 and $ 39,614 for the three and nine months ended September 30, 2020 , respectively, as Special Charges, Including Business Realignment Costs.

For the three and nine months ended September 30, 2020 , these costs include $ 7,253 and $ 37,558 , respectively, for separation and transition benefits and related costs as a result of the Company's review of its operations, described below, and $ 127 and $ 2,056 , 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 8 % of the Company's headcount.

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.

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 $ 43,000 , $ 37,558 of which has been recorded in Special Charges, Including Business Realignment Costs, in the first nine months of 2020, and $ 2,850 of which was recorded in 2019.

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

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

Further, in conjunction with its business realignment initiatives, in April 2020, the Company entered into an agreement for the leaders of its business in Mexico to purchase Evercore Casa de Bolsa, S.A.

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

In connection with its business realignment initiatives, 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, for a purchase price of MXN 35,000 .

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.

In addition, in October 2020 the Company announced the decision to transition its advisory presence in Mexico to a strategic alliance relationship with a newly-formed independent strategic advisory firm founded by certain former employees.

The Company recognized $ 1,029 and $ 3,087 for the three and nine months ended September 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.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Intangible Asset Amortization

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 .

Expense associated with the amortization of intangible assets for Investment Banking was $ 169 and $ 1,183 for the three and nine months ended September 30, 2020 , respectively, and $ 2,190 and $ 6,570 for the three and nine months ended September 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 $ 318 for the three and nine months ended September 30, 2020 , respectively, and $ 109 and $ 328 for the three and nine months ended September 30, 2019 , respectively, included within Depreciation and Amortization expense on the Unaudited Condensed Consolidated Statements of Operations .

Note 6 – Related Parties

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.

Investment Banking Revenue includes advisory fees earned from clients that have Senior Managing Directors and certain Senior Advisors and executives as a member of their Board of Directors of $ 4,859 and $ 13,628 for the three and nine months ended September 30, 2020 , respectively.

Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition includes the long-term portion of loans receivable from certain employees of $ 11,060 and $ 13,137 as of September 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 June 30, 2020 and December 31, 2019 were as follows:

June 30, 2020

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

September 30, 2020

December 31, 2019

6 unchanged sentences

Total Investment Securities and Certificates of Deposit

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Scheduled maturities of the Company's available-for-sale debt securities as of June 30, 2020 and December 31, 2019 were as follows:

June 30, 2020

Scheduled maturities of the Company's available-for-sale debt securities as of September 30, 2020 and December 31, 2019 were as follows:

September 30, 2020

December 31, 2019

1 unchanged sentence

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

Debt Securities are classified as available-for-sale securities within Investment Securities on the Unaudited Condensed Consolidated Statements of Financial Condition .

Debt Securities are classified as available-for-sale securities within Investment Securities and Certificates of Deposit on the Unaudited Condensed Consolidated Statements of Financial Condition .

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

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 .

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company had net realized gains (losses) of $ 2 and $ 75 for the three and nine months ended September 30, 2020 , respectively, and ($ 3 ) and ($ 9 ) for the three and nine months ended September 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 $ 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 .

The Company had net realized and unrealized gains (losses) of $ 92 and ($ 154 ) for the three and nine months ended September 30, 2020 , respectively, and $ 30 and $ 223 for the three and nine months ended September 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 ($ 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 .

The Company had net realized and unrealized gains (losses) of ($ 1,240 ) for the nine months ended September 30, 2020 and ($ 55 ) and $ 459 for the three and nine months ended September 30, 2019, respectively .

Investment Funds

2 unchanged sentences

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 .

The Company had net realized and unrealized gains of $ 7,798 and $ 5,008 for the three and nine months ended September 30, 2020 , respectively, and $ 532 and $ 9,231 for the three and nine months ended September 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.

7 unchanged sentences

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 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 Mexican government securities had an estimated average time to maturity of approximately 1.2 years , as of September 30, 2020 , and are pledged as collateral against repurchase agreements.

Generally, collateral is posted

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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.

5 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 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

As of September 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:

September 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 June 30, 2020 and December 31, 2019 was as follows:

June 30, 2020

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

September 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 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 .

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

This investment resulted in earnings of $ 1,917 and $ 5,740 for the three and nine months ended September 30, 2020 , respectively, and $ 1,936 and $ 5,588 for the three and nine months ended September 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 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 .

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

This investment resulted in earnings of $ 624 and $ 1,641 for the three and nine months ended September 30, 2020 , respectively, and $ 344 and $ 882 for the three and nine months ended September 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 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 .

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

This investment resulted in earnings of $ 570 and $ 1,171 for the three and nine months ended September 30, 2020 , respectively, and $ 282 and $ 756 for the three and nine months ended September 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 $ 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's share of the earnings of the investees has been reduced by the amortization of these identifiable intangible assets of $ 79 and $ 237 for the three and nine months ended September 30, 2020 , respectively, and $ 171 and $ 513 for the three and nine months ended September 30, 2019, respectively .

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

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

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

This investment had a balance of $ 6,684 and $ 9,235 as of September 30, 2020 and December 31, 2019 , respectively.

Investments in Private Equity

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Portfolio holdings of the private equity funds are carried at fair value.

Accordingly, the Company reflects its pro rata share of unrealized gains and losses occurring from changes in fair value.

Accordingly, the

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Company reflects its pro rata share of unrealized gains and losses occurring from changes in fair value.

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

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

June 30, 2020

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

September 30, 2020

December 31, 2019

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Total Private Equity Funds

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 .

Net realized and unrealized gains (losses) on private equity fund investments were $ 697 and ($ 1,646 ) for the three and nine months ended September 30, 2020 , respectively, and ($ 49 ) and ($ 176 ) for the three and nine months ended September 30, 2019, respectively .

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

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

As of September 30, 2020 , $ 347 of previously distributed carried interest received from the funds was subject to repayment.

General Partners of Private Equity Funds which are VIEs

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

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 had assets of $ 2,975 and $ 4,658 included in its Unaudited Condensed Consolidated Statements of Financial Condition at September 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 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.

The Company's maximum exposure to loss as of September 30, 2020 and December 31, 2019 was $ 5,483 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

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.

This investment gave the Company the right to invest in Trilantic's 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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The Company bases this allocation on its expectation of Trilantic's future fundraising ability and performance.

During the nine months ended September 30, 2020 , $ 14 and $ 110 of this investment was allocated to Trilantic Fund V and VI, respectively.

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 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.

This investment had a balance of $ 6,638 and $ 6,762 as of September 30, 2020 and December 31, 2019 , respectively.

The Company has a $ 5,000 commitment to invest in Trilantic Fund V, of which $ 376 was unfunded at September 30, 2020 .

The Company also has a $ 12,000 commitment to invest in Trilantic Fund VI, of which $ 9,054 was unfunded at September 30, 2020 .

The Company funded $ 3,015 of the commitment to invest in Trilantic Fund VI during the nine months ended September 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 June 30, 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 September 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 $ 648 and $ 693 as of June 30, 2020 and December 31, 2019 , respectively.

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 $ 645 and $ 693 as of September 30, 2020 and December 31, 2019 , respectively.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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 $ 665 and $ 899 as of June 30, 2020 and December 31, 2019 , respectively.

This investment had a balance of $ 387 and $ 899 as of September 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 $ 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 .

Occupancy and Equipment Rental on the Unaudited Condensed Consolidated Statements of Operations includes operating lease cost for office space of $ 12,248 and $ 36,272 for the three and nine months ended September 30, 2020 , respectively, and $ 10,649 and $ 30,992 for the three and nine months ended September 30, 2019, respectively , and variable lease cost of $ 1,841 and $ 4,696 for the three and nine months ended September 30, 2020 , respectively, and $ 1,754 and $ 6,572 for the three and nine months ended September 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.

Under the terms of the agreement, the Company committed to extend the lease term for the Company's current space and add space on up to seven additional floors, three of which commenced as of the lease’s effective date.

The Company anticipates that it will take possession of the remainder of these floors over the next four years.

The Company anticipates that it will take possession of the remainder of these floors over the next three years.

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 $ 5,548 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 $ 1,132 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 .

In conjunction with the lease of office space, the Company has entered into letters of credit in the amounts of $ 5,549 and $ 5,536 , as of September 30, 2020 and December 31, 2019 , respectively, which are secured by cash that is included in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition.

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

Occupancy and Equipment Rental on the Unaudited Condensed Consolidated Statements of Operations includes operating lease cost for office equipment of $ 1,170 and $ 3,497 for the three and nine months ended September 30, 2020 , respectively, and $ 1,132 and $ 3,059 for the three and nine months ended September 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 $ 22,469 and $ 15,778 for the nine months ended September 30, 2020 and 2019, respectively, related to its operating leases, which were net of cash received from lease incentives of $ 10,267 and $ 12,854 , respectively.

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

EVERCORE INC.

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(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 June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

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

June 30, 2020

June 30, 2019

September 30, 2020

September 30, 2019

Weighted-average remaining lease term - operating leases

Weighted-average discount rate - operating leases

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)

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

2020 (October 1 through December 31)

Total lease payments

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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 .

These spaces will have lease terms of 3 to 13 years once the Company has taken possession.

The additional future payments under these arrangements are $ 197,835 as of September 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

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

EVERCORE INC.

1 unchanged sentence

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

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.

fair values of corporate bonds, municipal bonds and other debt securities held at 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

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

September 30, 2020

Debt Securities Carried by Broker-Dealers (1)

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Total Assets Measured At Fair Value

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.

Includes $ 215,098 of treasury bills classified within Cash and Cash Equivalents on the Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2020 .

Includes $ 9,899 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 September 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)

June 30, 2020

September 30, 2020

Estimated Fair Value

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Notes Payable

Includes Accounts Receivable and Long-term receivables included in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition .

Includes Accounts Receivable, as well as long-term receivables, which are included in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition .

Includes current and long-term contract assets included in Other Current Assets and Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition .

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

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

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

EVERCORE INC.

1 unchanged sentence

(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 :

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

Carrying Value (a)

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Effective Annual Interest Rate

June 30, 2020

September 30, 2020

December 31, 2019

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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.

Dividends – The Company's Board of Directors declared on October 20, 2020 , a quarterly cash dividend of $ 0.61 per share, to the holders of record of shares of Class A common stock ("Class A Shares") as of November 27, 2020 , which will be paid on December 11, 2020 .

During the three and nine months ended September 30, 2020 , the Company declared and paid dividends of $ 0.58 and $ 1.74 per share, respectively, totaling $ 23,586 and $ 70,348 , respectively, and accrued deferred cash dividends on unvested restricted stock units ("RSUs"), totaling $ 3,348 and $ 10,266 , respectively.

The Company also paid deferred cash dividends of $ 182 and $ 10,949 during the three and nine months ended September 30, 2020 , respectively.

During the three and nine months ended September 30, 2019 , the Company declared and paid dividends of $ 0.58 and $ 1.66 per share, respectively, totaling $ 22,944 and $ 66,673 , respectively, and accrued deferred cash dividends on unvested RSUs, totaling $ 3,778 and $ 10,903 , respectively.

The Company also paid deferred cash dividends of $ 134 and $ 7,202 during the three and nine months ended September 30, 2019 , respectively.

Treasury Stock – During the three months ended September 30, 2020 , the Company purchased 16 Class A Shares from employees at market values ranging from $ 54.81 to $ 65.34 per share (at an average cost per share of $ 58.37 ), primarily for the net settlement of stock-based compensation awards.

The result of these purchases was an increase in Treasury Stock of $ 927 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2020 .

During the nine months ended September 30, 2020 , the Company purchased 1,033 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 $ 76.18 ), 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 1,887 Class A Shares were purchased at an average cost per share of $ 76.07 , and the result of these purchases was an increase in Treasury Stock of $ 143,487 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2020 .

LP Units – During the three and nine months ended September 30, 2020, 0.2 and 807 Evercore LP partnership units ("LP Units"), respectively, were exchanged for Class A Shares.

This resulted in increases to Common Stock of $ 8 for the nine months ended September 30, 2020, and Additional Paid-In-Capital of $ 8 and $ 33,762 for the three and nine months ended September 30, 2020, respectively, on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2020 .

Accumulated Other Comprehensive Income (Loss) – As of September 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 ($ 5,473 ) and ($ 25,930 ) , respectively.

EVERCORE INC.

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In circumstances where the governing documents of the entity to which the noncontrolling interest relates require special allocations of profits or losses to the controlling and noncontrolling interest holders, the net income or loss of these entities is allocated based on these special allocations.

September 30,

Evercore Wealth Management ("EWM") (1)

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

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

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

(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.

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,

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

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Beginning balance

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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 ($ 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 .

Other Comprehensive Income – Other Comprehensive Income (Loss) attributed to Noncontrolling Interest includes Unrealized Gains (Losses) on Securities and Investments, net, of ($ 3 ) and ($ 254 ) for the three and nine months ended September 30, 2020 , respectively, and ($ 7 ) and ($ 105 ) for the three and nine months ended September 30, 2019, respectively , and Foreign Currency Translation Adjustment Gains (Losses), net, of $ 989 and ($ 527 ) for the three and nine months ended September 30, 2020 , respectively, and ($ 495 ) and ($ 661 ) for the three and nine months ended September 30, 2019, respectively .

EVERCORE INC.

1 unchanged sentence

(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 .

LP Units Exchanged – During the three and nine months ended September 30, 2020, 0.2 and 807 LP Units, respectively, were exchanged for Class A Shares.

This resulted in decreases to Noncontrolling Interest and increases to Additional-Paid-In-Capital of $ 8 and $ 33,762 for the three and nine months ended September 30, 2020, respectively, on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of September 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).

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 June 30, 2020 .

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 nine months ended September 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 September 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 and six months ended June 30, 2020 and 2019 are described and presented below.

common shareholders for the three and nine months ended September 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 June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 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 June 30, 2020 , no Class J LP Units remained issued or outstanding.

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

See Note 16 for further information.

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.

During the nine months ended September 30, 2020 and the three and nine months ended September 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 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.

During the three and nine months ended September 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

The units that would have been

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(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 .

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 5,070 and 5,161 for the three and nine months ended September 30, 2020 , respectively, and 5,310 and 5,238 for the three and nine months ended September 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 $ 6,560 and $ 18,990 for the three and nine months ended September 30, 2020 , respectively, and $ 6,804 and $ 25,996 for the three and nine months ended September 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 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 and six months ended June 30, 2020 and 2019 .

common shareholders were 400 for each of the three and nine months ended September 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 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 .

Compensation expense related to the Class J LP Units was $ 1,067 for the nine months ended September 30, 2020 , and $ 4,527 and $ 12,276 for the three and nine months ended September 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.

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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 .

Compensation expense related to this award was $ 1,164 and $ 3,468 for the three and nine months ended September 30, 2020 , respectively, and $ 1,164 and $ 3,455 for the three and nine months ended September 30, 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 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.

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 September 30, 2020 ) and continued service through December 31, 2021.

The Company determined the value of the award probable to vest as of September 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 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 .

The Company determined the value of the award probable to vest as of September 30, 2020 to be $ 21,692 and records expense for these units over the service period.

Compensation expense related to the Class K-P Units was $ 3,066 and $ 5,392 for the three and nine months ended September 30, 2020 , respectively, and $ 1,277 and $ 1,911 for the three and nine months ended September 30, 2019, respectively .

Stock Incentive Plan

During 2016, the Company's stockholders approved the Amended and Restated 2016 Evercore Inc.

Stock Incentive Plan (the "2016 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.

Stock Incentive Plan (the "Amended 2016 Plan"), which amended the prior Amended and Restated 2016 Evercore Inc.

Stock Incentive Plan.

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

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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 Amended 2016 Plan was 7,022 as of June 30, 2020 .

The total shares available to be granted in the future under the Amended 2016 Plan was 7,030 as of September 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 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 .

During the nine months ended September 30, 2020 , pursuant to the above Stock Incentive Plans, the Company granted employees 1,946 RSUs that are Service-based Awards.

Service-based Awards granted during the nine months ended September 30, 2020 had grant date fair values of $ 44.21 to $ 81.53 per share, with an average value of $ 80.94 per share, for an aggregate fair value of $ 157,467 , and generally vest ratably over four years .

During the nine months ended September 30, 2020 , 2,529 Service-based Awards vested and 103 Service-based Awards were forfeited.

Compensation expense related to Service-based Awards was $ 46,880 and $ 147,352 for the three and nine months ended September 30, 2020 , respectively, and $ 50,152 and $ 162,296 for the three and nine months ended September 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

The Company granted $ 179,705 and $ 1,460 of deferred cash awards pursuant

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

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 .

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

to the deferred cash compensation program during the first and third quarters of 2020 , respectively.

As of September 30, 2020 , the total compensation cost related to the deferred cash compensation program not yet recognized was $ 197,164 .

The weighted-average period over which this compensation cost is expected to be recognized is 31 months .

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

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 .

Compensation expense related to deferred cash awards was $ 30,164 and $ 95,178 for the three and nine months ended September 30, 2020 , respectively, and $ 20,688 and $ 73,456 for the three and nine months ended September 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 $ 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.

The 2017 Long-term Incentive Plan, which aggregate $ 34,215 of current liabilities and $ 68,431 of long-term liabilities on the Unaudited Condensed Consolidated Statement of Financial Condition as of September 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.

The Company periodically assesses the probability of the benchmarks being achieved and expenses the probable payout over the requisite service period of the award.

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, 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 .

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 decreased its expectation for the probable payout of this plan, which resulted in a reversal of $ 6,810 of expense during the first quarter of 2020.

This analysis included a review of both historical and projected performance for those eligible under the plan.

As markets continued to stabilize during the third quarter of 2020 and Advisory activity increased, management determined it would be appropriate to increase its expectation for the probable payout of the plan.

The Company recorded $ 9,160 and $ 5,339 of expense for the three and nine months ended September 30, 2020 , respectively, and $ 8,302 and $ 24,928 of expense for the three and nine months ended September 30, 2019, respectively .

The Company distributed cash payments of $ 19,516 for the nine months ended September 30, 2019 related to the 2013 Long-term Incentive Plan.

As of September 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 $ 30,627 .

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 $ 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 .

Compensation expense related to these awards was $ 8,101 and $ 16,516 for the three and nine months ended September 30, 2020 , respectively, and $ 6,631 and $ 15,976 for the three and nine months ended September 30, 2019, respectively .

The remaining unamortized amount of these awards was $ 34,852 as of September 30, 2020 .

Separation and Transition Benefits

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

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.

For the three and nine months ended September 30, 2020 , the separation benefits, stay arrangements and accelerated deferred cash compensation (together, the "Termination Costs") resulted in expense of $ 4,151 and $ 26,967 , respectively, and the acceleration of the amortization of share-based payments resulted in expense of $ 3,102 and $ 10,437 , 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.

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 $ 1,538 and $ 4,813 for the three and six months ended June 30, 2019, respectively .

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

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 $ 2,762 and $ 7,575 for the three and nine months ended September 30, 2019, respectively .

This is comprised of expense related to the Termination Costs of $ 2,071 and $ 5,664 , respectively, and expense related to the acceleration of the amortization of share-based payments of $ 691 and $ 1,911 , for the three and nine months ended September 30, 2019, respectively .

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

For the Nine Months Ended

September 30, 2020

Balance at January 1, 2020

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Non-Cash Charges

Balance at June 30, 2020

Balance at September 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 June 30, 2020 , the Company had unfunded commitments for capital contributions of $ 13,737 to private equity funds.

Private Equity – As of September 30, 2020 , the Company had unfunded commitments for capital contributions of $ 11,998 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 June 30, 2020 .

The Company and its consolidated subsidiaries were in compliance with these covenants as of September 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,

East amended this facility on October 30, 2020 such that, among other things, the

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

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").

interest rate provisions were modified to LIBOR plus 150 basis points and the maturity date was extended to October 31, 2022 (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.

The facility is unsecured and matures on October 31, 2020, subject to an extension agreed to between East and PNC.

The facility is unsecured.

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 June 30, 2020 .

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

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

On October 30, 2020, East amended this facility such that, among other things, the revolving credit facility has increased to an aggregate principal amount of $ 30,000 .

Drawings under this facility will bear interest at LIBOR plus 180 basis points and the maturity date was extended to October 31, 2022.

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 June 30, 2020 .

There have been no drawings under this facility as of September 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 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 Company paid $ 81 and $ 2,008 of its commitment for contingent consideration related to its acquisition of Kuna & Co, KG during the nine months ended September 30, 2020 and 2019 , respectively.

At September 30, 2020 , the Company had a remaining commitment of $ 252 for contingent consideration related to its acquisition of Kuna & Co.

The Company also had a commitment at September 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 .

Restricted Cash – The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statements of financial condition that sum to the total of amounts shown in the Unaudited Condensed Consolidated Statements of Cash Flows:

September 30,

Cash and Cash Equivalents

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

The Company had net realized losses of ($ 3,998 ) for the nine months ended September 30, 2020 .

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.

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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 .

The Company had net realized gains of $ 59 for the nine months ended September 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 June 30, 2020 .

There were no foreign currency exchange forward contracts outstanding as of September 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.

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In the normal course of business, from time to time, the Company and its affiliates are involved in judicial or regulatory proceedings, arbitration or mediation concerning matters arising in connection with the conduct of its businesses, including contractual and employment matters.

In addition, Mexican, United Kingdom, Hong Kong, Singapore, Canadian, Dubai and United States government agencies and self-regulatory organizations, as well as state securities commissions in the United States, conduct periodic examinations and initiate administrative proceedings regarding the Company's business, including, among other matters, accounting and operational matters, that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer, investment advisor, or its directors, officers or employees.

In addition, Mexican, United Kingdom, German, Hong Kong, Singapore, Canadian, Dubai and United States government agencies and self-regulatory organizations, as well as state securities commissions in the United States, conduct periodic examinations and initiate administrative proceedings regarding the Company's business, including, among other matters, accounting and operational matters, that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer, investment advisor, or its directors, officers or employees.

In view of the inherent difficulty of determining whether any loss in connection with such matters is probable and whether the amount of such loss can be reasonably estimated, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, the Company cannot estimate the amount of such loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, fine, penalty or other relief, if any, might be.

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

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

("Adeptus") and certain others, including EGL as underwriter, in connection with Adeptus' June 2014 initial public offering and May 2015, July 2015 and June 2016 secondary public offerings.

The cases were consolidated in the U.S.

District Court for the Eastern District of Texas where a consolidated complaint was filed asserting, in part, that the offering materials issued in connection with the four public offerings violated the U.S.

Securities Act of 1933 by containing alleged misstatements and omissions.

On April 19, 2017, Adeptus filed for Chapter 11 bankruptcy and was subsequently removed as a defendant.

On November 21, 2017, the plaintiffs filed a consolidated complaint, and the defendants filed motions to dismiss on February 5, 2018.

On September 12, 2018, the defendants' motions to dismiss were granted as to the claims relating to the initial public offering and the May 2015 secondary public offering, but denied as to the claims relating to the July 2015 and June 2016 secondary public offerings.

EGL underwrote approximately 293 shares of common stock in the July 2015 secondary public offering, representing an aggregate offering price of approximately $ 30,800 , but did not underwrite any shares in the June 2016 secondary public offering.

On September 25, 2018, the plaintiffs filed an amended complaint relating only to the July 2015 and June 2016 secondary public offerings.

On December 7, 2018, the plaintiffs filed a motion for class certification, and the defendants filed briefs in opposition.

On February 16, 2019, the plaintiffs filed a second amended complaint after having been granted leave to amend by the court.

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 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.

Note 18 – Regulatory Authorities

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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 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.

EGL's regulatory net capital as of September 30, 2020 and December 31, 2019 was $ 493,456 and $ 331,510 , respectively, which exceeded the minimum net capital requirement by $ 493,206 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 June 30, 2020 .

These subsidiaries are in excess of their local capital adequacy requirements at September 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

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 September 30, 2020 .

Note 19 – Income Taxes

The Company's Provision for Income Taxes was $ 15,677 and $ 51,042 for the three and nine months ended September 30, 2020 , respectively, and $ 20,402 and $ 60,253 for the three and nine months ended September 30, 2019, respectively .

The effective tax rate was 23.5 % and 24.5 % for the three and nine months ended September 30, 2020 , respectively, and 28.0 % and 20.9 % for the three and nine months ended September 30, 2019, respectively .

The effective tax rate reflects net excess tax benefits and deficiencies 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.

The Company's Provision for Income Taxes for the nine months ended September 30, 2020 reflects an additional tax expense of $ 100 and resulted in an increase in the effective tax rate of 0.05 percentage points, and for the nine months ended September 30, 2019 an additional deduction of $ 12,176 and resulted in a reduction in the effective tax rate of 4 percentage points related to the effect of share price changes upon the vesting of share-based awards.

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.

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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 .

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 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.

For the three and nine months ended September 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 $ 525 associated with changes in Unrealized Gain (Loss) on Securities and Investments and an increase of $ 1,244 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the nine months ended September 30, 2020 .

The Company reported an increase in deferred tax assets of $ 219 associated with changes in Unrealized Gain (Loss) on Securities and Investments and an increase of $ 1,333 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the nine months ended September 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.

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 .

As of September 30, 2020 , there were $ 376 of unrecognized tax benefits that, if recognized, $ 306 would affect the effective tax rate.

Related to the unrecognized tax benefits, the Company accrued interest and penalties of $ 15 and $ 1 , respectively, during the three months ended September 30, 2020 .

During the three months ended September 30, 2020 , $ 118 of unrecognized tax benefits were recognized by the Company as a result of a lapse in the statute of limitations, of which $ 96 affected the effective tax rate.

In addition, the Company also recognized a tax benefit for accrued interest and penalties of $ 42 and $ 3 , respectively, associated with the lapse in the statute of limitations.

Note 20 – Segment Operating Results

5 unchanged sentences

This sale will be completed following regulatory approval.

In addition, in October 2020, the Company announced the decision to transition its advisory presence in Mexico to a strategic alliance relationship with a newly-formed independent strategic advisory firm founded by certain former employees.

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:

The Company's segment information for the three and nine months ended September 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.

1 unchanged sentence

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.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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.

1 unchanged sentence

Other Revenue, net, also includes interest expense associated with the Company’s Notes Payable and lines of credit, as well as revenue and expenses associated with repurchase or resale transactions.

In 2020, Other Revenue also includes a gain on the sale of the ECB Trust Business.

Each segment's Operating Expenses include:

a) employee compensation and benefits expenses that are incurred directly in support of the segment and b) non-compensation expenses, which include expenses for premises and occupancy, professional fees, travel and entertainment, communications and information services, execution, clearing and custody fees, equipment and indirect support costs (including compensation and other operating expenses related thereto) for administrative services.

EVERCORE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

travel and entertainment, communications and information services, execution, clearing and custody fees, equipment and indirect support costs (including compensation and other operating expenses related thereto) for administrative services.

Such administrative services include, but are not limited to, accounting, tax, legal, technology, human capital, facilities management and senior management activities.

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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.

Intangible Asset and Other Amortization – Includes amortization of intangible assets and other purchase accounting-related amortization associated with certain acquisitions.

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 and six months ended June 30, 2020 .

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

The following information presents each segment's contribution.

2 unchanged sentences

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

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Investment Banking

10 unchanged sentences

Other Expenses (2)

Operating Income (Loss)

Operating Income

Income from Equity Method Investments

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

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 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 $ 4,534 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 .

Investment Banking Other Revenue, net, includes interest expense on the Notes Payable and lines of credit of $ 4,218 and $ 13,594 for the three and nine months ended September 30, 2020 , respectively, and $ 3,786 and $ 8,354 for the three and nine months ended September 30, 2019, respectively .

Other Expenses are as follows:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Investment Banking

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

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Net Revenues:

7 unchanged sentences

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

June 30, 2020

September 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