What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-02-25 compared with 2020-02-25 · 681 added, 598 removed, 1323 unchanged (49% of the section changed)

Financial Statements and Supplemental Data

Index to Financial Statements

Index to Financial Statements Page

Report of Independent Registered Public Accounting Firm

32 unchanged sentences

Critical Audit Matter Description

The Company recognizes advisory revenue that includes success fees for advisory services when the Company satisfies its performance obligation in an amount that reflects the final consideration the Company expects to receive in exchange for these services.

The performance obligation for a success fee is satisfied upon transfer of control of promised services to customers.

Success fees are considered variable consideration.

This variable consideration will be included in the transaction price and recognized as revenue to the extent that it is probable that a significant reversal of revenue will not occur.

The Company applies careful analysis and judgment to the remaining factors necessary for completion of a transaction, including any factors outside of their control to determine whether it is probable a significant reversal of revenue will not occur.

A transaction can fail to be completed for many reasons, which are outside of the Company’s control, including failure of parties to agree upon final terms with the counterparty, to secure necessary board or shareholder approvals, to secure necessary financing or to achieve necessary regulatory approvals, or due to adverse market conditions.

Given the considerations to determine whether a performance obligation has been satisfied and whether it is probable a significant reversal of revenue will not occur, performing audit procedures to evaluate such considerations involved especially subjective judgment.

The Company recognizes investment banking advisory revenue that includes success fees for investment banking advisory services as performance obligations are fulfilled and these advisory services are provided to the Company’s clients.

However, the recognition of success fees, which are included in investment banking advisory revenue, is generally constrained until substantially all services have been provided, specified conditions have been met and it is probable that a significant reversal of

the applicable revenue will not occur in a future period.

In certain instances, success fees may meet the criteria for recognition during a given reporting period although the transaction closed subsequent to the reporting period end.

The Company applies careful analysis and judgment to the remaining factors necessary for completion of a transaction, including any factors outside of their control, to determine whether it is probable a significant reversal of the success fee revenue will not occur.

A transaction can fail to be completed for many reasons, which are outside of the Company’s control, including but not limited to, failure of parties to agree upon final terms with the counterparty, securing necessary board or shareholder approvals, securing necessary financing or to achieve necessary regulatory approvals, or due to adverse market conditions.

Given the considerations to determine whether it is probable a significant reversal of success fee revenue will not occur at year end, performing audit procedures to evaluate such considerations involved a high degree of auditor judgement.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the revenue recognition of success fees for advisory services included the following, among others:

We tested the effectiveness of controls over recognizing success fees for advisory services, including those over the timing of recording revenue.

We selected a sample of transactions for which revenue was recognized as of December 31, 2019, and performed the following:

Evaluated whether the contracts have commercial substance and collectability is probable.

Evaluated whether all performance obligation(s) of the contract have been identified.

Evaluated if the transaction price is accurate, including the calculation of the consideration amount based on the terms of the contract.

Evaluated the Company’s allocation of the transaction price to the performance obligations.

Evaluated whether the Company recognized revenue in the appropriate period in applying judgment to the remaining factors necessary for completion of a transaction, including any factors outside of their control to determine whether it is probable a significant reversal of revenue will not occur.

We selected a sample of transactions that closed in subsequent periods and performed the following:

Evaluated whether all conditions to close have been met prior to the transaction closing, including (1) inquiry of management and members of the advisory deal teams and (2) examination of documentation surrounding the transaction, including board, shareholder, regulatory, or court approval and definitive financing terms.

Evaluated whether the Company recognized revenue in the correct period and whether it is probable a significant reversal of revenue will not occur.

Our audit procedures related to the timing of recording success fee revenue for investment banking advisory services at year end included the following, among others:

• We tested the effectiveness of controls over recognizing success fees for investment banking advisory services, including those over the timing of revenue recognition.

• We selected a sample of contracts with clients for which revenue was recognized prior to December 31, 2020 as well as the period subsequent to year end and performed the following:

– Evaluated whether the Company appropriately identified performance obligations and recognized revenue in the correct period by obtaining and evaluating evidence, including, but not limited to, inquiry with management, transaction close documents, press releases, confirmations, court approvals, executed agreements and communications, regarding the extent of uncertainty associated with variable consideration.

– Evaluated the accuracy of management’s calculation of investment banking advisory services fees by recalculating the revenue amounts and comparing our expectation to management’s calculation.

– Evaluated whether it was probable that a significant reversal of the applicable revenue would not occur.

/s/ DELOITTE & TOUCHE LLP

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Cash and Cash Equivalents $ 829,598 $ 633,808

Investment Securities and Certificates of Deposit

Investment Securities and Certificates of Deposit (includes available-for-dale debt securities with an amortized cost of $ 402,824 and $ 114,204 at December 31, 2020 and 2019, respectively)

1,060,836 623,946

Financial Instruments Owned and Pledged as Collateral at Fair Value — 12,431

1 unchanged sentence

Accounts Receivable (net of allowances of $ 5,372 and $ 7,881 at December 31, 2020 and 2019, respectively)

368,346 296,355

Receivable from Employees and Related Parties 23,593 22,416

1 unchanged sentence

Total Current Assets 2,374,604 1,690,422

Investments 86,681 89,490

Deferred Tax Assets 257,862 268,591

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Furniture, Equipment and Leasehold Improvements (net of accumulated depreciation and amortization of $ 139,572 and $ 117,387 at December 31, 2020 and 2019, respectively)

148,832 126,799

Goodwill 129,126 130,758

Intangible Assets (net of accumulated amortization of $ 2,932 and $ 7,292 at December 31, 2020 and 2019, respectively)

Other Assets 102,587 90,262

Total Assets $ 3,370,888 $ 2,598,613

Liabilities and Equity

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Taxes Payable 15,346 3,400

Current Portion of Notes Payable 37,974 —

Other Current Liabilities 127,691 15,517

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Treasury Stock at Cost ( 31,445,058 and 29,522,665 shares at December 31, 2020 and 2019, respectively)

( 1,824,727 ) ( 1,678,168 )

Total Evercore Inc.

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Noncontrolling Interest 258,428 256,534

Total Equity 1,489,374 1,126,250

Total Liabilities and Equity $ 3,370,888 $ 2,598,613

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For the Years Ended December 31,

2020 2019 2018

Investment Banking:

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Interest Expense 21,414 20,139 17,771

Net Revenues 2,263,905 2,008,698 2,064,705

Employee Compensation and Benefits 1,372,339 1,200,977 1,197,173

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Execution, Clearing and Custody Fees 13,592 12,967 11,470

Special Charges

Special Charges, Including Business Realignment Costs 46,645 10,141 5,012

Acquisition and Transition Costs 562 1,013 21

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Provision for Income Taxes 128,151 95,046 108,520

Net Income 412,680 353,661 442,851

Net Income Attributable to Noncontrolling Interest 62,106 56,225 65,611

Net Income Attributable to Evercore Inc.

$ 350,574 $ 297,436 $ 377,240

Net Income Attributable to Evercore Inc.

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Weighted Average Shares of Class A Common Stock Outstanding

Basic 40,553 39,994 40,595

Diluted 42,623 43,194 45,279

Net Income Per Share Attributable to Evercore Inc.

Common Shareholders:

Certain balances in prior periods were reclassified to conform to their current presentation.

See Note 2 for further information.

Basic $ 8.64 $ 7.44 $ 9.29

Diluted $ 8.22 $ 6.89 $ 8.33

See Notes to Consolidated Financial Statements.

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For the Years Ended December 31,

2020 2019 2018

Net Income $ 412,680 $ 353,661 $ 442,851

Other Comprehensive Income (Loss), net of tax:

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Comprehensive Income Attributable to Evercore Inc.

$ 368,412 $ 300,274 $ 375,988

See Notes to Consolidated Financial Statements.

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(dollars in thousands, except share data)

Class A Common Stock

Comprehensive

Treasury Stock

Noncontrolling

Income (Loss)

Additional Other

Class A Common Stock Paid-In Comprehensive Retained Treasury Stock Noncontrolling Total

Shares Dollars Capital Income (Loss) Earnings Shares Dollars Interest Equity

Balance at December 31, 2017 62,119,904 $ 621 $ 1,600,699 $ ( 31,411 ) $ 79,461 ( 23,017,750 ) $ ( 1,105,406 ) $ 252,404 $ 796,368

Other Comprehensive Income

Cumulative Effect of Accounting Change (1)

— — — 2,229 ( 2,229 ) — — — —

Net Income — — — — 377,240 — — 65,611 442,851

Other Comprehensive Income (Loss) — — — ( 1,252 ) — — — ( 203 ) ( 1,455 )

Treasury Stock Purchases — — — — — ( 3,105,688 ) ( 289,681 ) — ( 289,681 )

Evercore LP Units Purchased or Converted into Class A Common Stock

Evercore LP Units Exchanged for Class A Common Stock 1,181,669 12 70,550 — — — — ( 46,594 ) 23,968

Equity-based Compensation Awards 2,570,441 26 172,309 — — — — 19,860 192,195

Dividends — — — — ( 89,590 ) — — — ( 89,590 )

Noncontrolling Interest (Note 17) — — ( 25,458 ) — — — — ( 41,259 ) ( 66,717 )

Balance at December 31, 2018 65,872,014 659 1,818,100 ( 30,434 ) 364,882 ( 26,123,438 ) ( 1,395,087 ) 249,819 1,007,939

Cumulative Effect of Accounting Change (1)

Other Comprehensive Income (Loss)

Net Income — — — — 297,436 — — 56,225 353,661

Other Comprehensive Income — — — 2,838 — — — 513 3,351

Treasury Stock Purchases — — — — — ( 3,399,227 ) ( 283,081 ) — ( 283,081 )

Evercore LP Units Purchased or Converted into Class A Common Stock

Evercore LP Units Exchanged for Class A Common Stock 353,383 3 32,964 — — — — ( 15,142 ) 17,825

Equity-based Compensation Awards 2,473,278 25 206,942 — — — — 27,890 234,857

Dividends — — — — ( 104,049 ) — — — ( 104,049 )

Noncontrolling Interest (Note 17) — — ( 41,482 ) — — — — ( 62,771 ) ( 104,253 )

Balance at December 31, 2019 68,698,675 687 2,016,524 ( 27,596 ) 558,269 ( 29,522,665 ) ( 1,678,168 ) 256,534 1,126,250

Cumulative Effect of Accounting Change (2)

— — — — ( 1,310 ) — — — ( 1,310 )

Net Income — — — — 350,574 — — 62,106 412,680

Other Comprehensive Income — — — 17,838 — — — 7,366 25,204

Treasury Stock Purchases — — — — — ( 1,922,393 ) ( 146,559 ) — ( 146,559 )

Evercore LP Units Converted into Class A Common Stock

Evercore LP Units Exchanged for Class A Common Stock 898,585 9 46,946 — — — — ( 37,683 ) 9,272

Equity-based Compensation Awards 2,598,023 26 204,231 — — — — 14,618 218,875

Dividends — — — — ( 108,960 ) — — — ( 108,960 )

Noncontrolling Interest (Note 17) — — ( 1,565 ) — — — — ( 44,513 ) ( 46,078 )

Balance at December 31, 2020 72,195,283 $ 722 $ 2,266,136 $ ( 9,758 ) $ 798,573 ( 31,445,058 ) $ ( 1,824,727 ) $ 258,428 $ 1,489,374

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

2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01") on January 1, 2018, for which the Company recorded an adjustment to Retained Earnings to reflect cumulative unrealized losses, net of tax, on available-for-sale equity securities previously recorded in Accumulated Other Comprehensive Income (Loss).

(2) The cumulative adjustment relates to the adoption of ASU No.

2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" on January 1, 2018, for which the Company recorded an adjustment to Retained Earnings to reflect cumulative unrealized losses, net of tax, on available-for-sale equity securities previously recorded in Accumulated Other Comprehensive Income (Loss).

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

See Notes 2 and 3 for further information.

See Notes to Consolidated Financial Statements.

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For the Years Ended December 31,

2020 2019 2018

Cash Flows From Operating Activities

Net Income $ 412,680 $ 353,661 $ 442,851

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

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Equity-Based and Other Deferred Compensation 367,438 360,341 293,507

Impairment of Goodwill and Equity Method Investments

Gain on Sale of Institutional Trust and Independent Fiduciary business of ETC

Net Loss on Sale and Wind-down of Operations in Mexico, Including Release of Cumulative Foreign Exchange Losses 35,247 — —

Impairment of Goodwill — 2,921 —

Noncash Lease Expense 38,626 29,259 —

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Bad Debt Expense 6,878 10,451 3,365

Adjustment to Tax Receivable Agreement

Release of Cumulative Foreign Exchange Losses

Deferred Taxes 13,824 ( 10,503 ) ( 3,981 )

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Receivable from Employees and Related Parties ( 1,170 ) 1,450 ( 6,849 )

Other Assets ( 19,043 ) ( 58,962 ) ( 21,830 )

(Decrease) Increase in Operating Liabilities:

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Investment Securities:

Proceeds from Sales and Maturities

Proceeds from Sales and Maturities of Investment Securities and Futures Contracts Activity 555,624 510,151 191,779

Purchases of Investment Securities and Futures Contracts Activity ( 1,201,617 ) ( 698,995 ) ( 336,596 )

Maturity of Certificates of Deposit 214,266 100,000 63,527

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Purchase of Furniture, Equipment and Leasehold Improvements ( 53,330 ) ( 70,816 ) ( 33,324 )

Proceeds from Sale of Business

Proceeds from Sale of Business, Net of Cash Sold 679 — —

Net Cash Provided by (Used In) Investing Activities ( 483,871 ) ( 373,471 ) ( 212,566 )

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Purchase of Treasury Stock and Noncontrolling Interests ( 147,411 ) ( 333,296 ) ( 315,233 )

Dividends ( 106,582 ) ( 96,803 ) ( 77,302 )

Net Cash Provided by (Used in) Financing Activities ( 307,793 ) ( 290,009 ) ( 452,927 )

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Accrued Dividends $ 13,734 $ 14,642 $ 12,288

Purchase of Noncontrolling Interest

Settlement of Contingent Consideration

Institutional Trust and Independent Fiduciary business of ETC Assets Deconsolidated

Institutional Trust and Independent Fiduciary business of ETC Liabilities Deconsolidated

Decrease in Goodwill from sale of Institutional Trust and Independent Fiduciary business of ETC

Noncash Purchase of Noncontrolling Interest $ 851 $ 2,701 $ —

See Notes to Consolidated Financial Statements.

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The Investment Banking business also includes the Evercore ISI business through which the Company offers macroeconomic, policy and fundamental equity research and agency-based equity securities trading for institutional investors.

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

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

The Company's results also include the institutional asset management business, through which the Company directly and through affiliates, manages financial assets for sophisticated institutional investors.

This business included Evercore Casa de Bolsa, S.A.

("ECB"), which was sold during 2020.

See Note 5 for further information.

Note 2 – Significant Accounting Policies

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Evercore ISI International Limited ("Evercore ISI U.K."), Evercore Partners International LLP ("Evercore U.K."), Evercore (Japan) Ltd.

("Evercore Japan") and Evercore Consulting (Beijing) Co.

("Evercore Beijing") are also VIEs, and the Company is the primary beneficiary of these VIEs.

Specifically for Evercore ISI U.K., Evercore Japan and Evercore Beijing (as of January 1, 2019 for Evercore Japan and Evercore Beijing), the Company provides financial support through transfer pricing agreements with these entities, which exposes the Company to losses that are potentially significant to these entities, and has decision making authority that significantly affects the economic performance of these entities.

("Evercore Japan"), Evercore Consulting (Beijing) Co.

("Evercore Beijing") and Evercore Partners Canada Ltd.

("Evercore Canada") are also VIEs, and the Company is the primary beneficiary of these VIEs.

Specifically for Evercore ISI U.K., Evercore Japan, Evercore Beijing and Evercore Canada (as of January 1, 2019 for Evercore Japan and Evercore Beijing, and as of January 1, 2020 for Evercore Canada), the Company provides financial support through transfer pricing agreements with these entities, which exposes the Company to losses that are potentially significant to these entities, and has decision making authority that significantly affects the economic performance of these entities.

The Company has the majority economic interest in Evercore U.K.

and has decision making authority that significantly affects the economic performance of this entity.

The Company included in its Consolidated Statements of Financial Condition Evercore ISI U.K., Evercore U.K., Evercore Japan and Evercore Beijing assets of $ 227,885 and liabilities of $ 129,494 at December 31, 2019 and Evercore ISI U.K.

and Evercore U.K.

assets of $ 190,223 and liabilities of $ 122,460 at December 31, 2018 .

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

The Company included in its Consolidated Statements of Financial Condition Evercore ISI U.K., Evercore U.K., Evercore Japan, Evercore Beijing and Evercore Canada assets of $ 377,878 and liabilities of $ 164,779 at

EVERCORE INC.

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

At the time of the formation transaction, the members of Evercore LP (the "Members") received Class A limited partnership units of Evercore LP ("Class A LP Units") in consideration for their contribution of the various entities included in the historical combined financial statements of the Company.

The Class A LP Units were subject to vesting requirements and transfer restrictions and are exchangeable on a one -for-one basis for shares of Class A common stock ("Class A Shares").

December 31, 2020 and Evercore ISI U.K., Evercore U.K., Evercore Japan and Evercore Beijing 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.

Evercore LP partnership units

Class A LP Units – At the time of the formation transaction, the members of Evercore LP (the "Members") received Class A limited partnership units of Evercore LP ("Class A LP Units") in consideration for their contribution of the various entities included in the historical combined financial statements of the Company.

The Class A LP Units were subject to vesting requirements and transfer restrictions and are exchangeable on a one -for-one basis for shares of Class A common stock of the Company ("Class A Shares").

At December 31, 2013, all Class A LP Units were fully vested.

On October 31, 2014, in conjunction with the acquisition of the operating businesses of International Strategy & Investment ("ISI"), the Company issued vested and unvested Class E limited partnership units of Evercore LP ("Class E LP Units") and vested and unvested Class G and H limited partnership interests of Evercore LP ("Class G and H LP Interests").

At December 31, 2017, all Class E LP Units were fully vested and all of the Class G LP Interests either converted into Class E LP Units or were forfeited pursuant to their performance terms.

In 2017, the Company exchanged all of the outstanding Class H LP Interests for a number of Class J limited partnership units of Evercore LP ("Class J LP Units").

In 2016, in conjunction with the appointment of the Executive Chairman, the Company issued unvested Class I-P Units of Evercore LP ("Class I-P Units").

Class E LP Units – As a result of the acquisition of the operating businesses of International Strategy & Investment ("ISI") in 2014 and the conversion of the Class J limited partnership units of Evercore LP ("Class J LP Units"), the Company has Class E limited partnership units of Evercore LP ("Class E LP Units") outstanding.

At December 31, 2020, all Class E LP Units were fully vested.

Class I-P Units – In 2016, in conjunction with the appointment of a current Co-Chief Executive Officer (then Executive Chairman) , the Company issued unvested Class I-P Units of Evercore LP ("Class I-P Units").

The Class I-P Units are contingently exchangeable into Class I limited partnership units of Evercore LP ("Class I LP Units"), which are exchangeable on a one -for-one basis for Class A Shares.

In 2017 and 2019, the Company issued unvested Class K-P Units of Evercore LP ("Class K-P Units"), which are contingently exchangeable into Class K limited partnership units of Evercore LP ("Class K LP Units"), which are ultimately exchangeable on a one -for-one basis for Class A Shares.

Class K-P Units – In 2017 and 2019, the Company issued unvested Class K-P Units of Evercore LP ("Class K-P Units").

The Class K-P Units are contingently exchangeable into Class K limited partnership units of Evercore LP ("Class K LP Units"), which are ultimately exchangeable on a one -for-one basis for Class A Shares.

See Note 19 for further information.

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The Company's interest in Evercore LP is within the scope of Accounting Standards Codification ("ASC") 810-20, " Control of Partnerships and Similar Entities." The Company consolidates Evercore LP and records noncontrolling interest for the economic interest in Evercore LP held directly by others, which includes the Members.

Revenue Recognition – The Company adopted Accounting Standards Update ("ASU") No.

Revenue Recognition – The Company adopted ASU No.

2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09") on January 1, 2018 using the modified retrospective method of transition applied to contracts which were not completed as of January 1, 2018.

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The Company applies this model to its Investment Banking and Asset Management revenue streams.

Prior to January 1, 2018, the Company recorded revenue in accordance with ASC 605, "Revenue Recognition" ("ASC 605").

Under ASC 605, the Company recognized success related advisory fees upon closing of the transaction regardless of the probability of the outcome, which differs under ASC 606 as described further below.

Furthermore, ASC 605 allowed expenses related to underwriting transactions to be reflected net in related revenues;

under ASC 606, those expenses are presented gross in the results of operations.

Investment Banking Revenue – The Company earns investment banking fees from clients for providing advisory services on strategic matters, including mergers, acquisitions, divestitures, leveraged buyouts, restructurings, activism and defense and similar corporate finance matters.

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For performance obligations satisfied over time, determining a measure of progress requires the Company to make significant judgments that affect the timing of revenue recognized.

For certain advisory services, the Company has concluded that performance obligations are satisfied over time.

For certain advisory services, the Company has

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

concluded that performance obligations are satisfied over time.

This is based on the premise that the Company transfers control of services and the client simultaneously receives benefits from these services over the course of an engagement.

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Advisory Fees – In general, advisory fees are paid at the time the Company signs an engagement letter, during the course of the engagement or when an engagement is completed.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

the engagement letter or over the course of the engagement, where the engagement letter will specify a future service period associated with those fees.

In some circumstances, and as a function of the terms of an engagement letter, the Company may receive fixed retainer fees for financial advisory services concurrent with, or soon after, the execution of the engagement letter or over the course of the engagement, where the engagement letter will specify a future service period associated with those fees.

The Company may also receive announcement fees upon announcement of a transaction in addition to success fees upon closing of a transaction or another defined outcome, both of which represent variable consideration.

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The execution of each trade order represents a distinct performance obligation and the transaction price at the point in time of trade order execution is fixed.

Trade execution is satisfied at the point in time that the customer has control of the asset and as such, fees are recorded on a trade date basis or, in the case of payments under commission sharing arrangements, when earned.

Trade execution is satisfied at the point in time that the customer has control of the asset and as such, fees are recorded on a trade date

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

basis or, in the case of payments under commission sharing arrangements, when earned.

The Company also earns subscription fees for the sales of research.

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Taxes collected from customers and remitted to governmental authorities are presented on a net basis on the Consolidated Statements of Operations.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Asset Management and Administration Fees – The Company's Investment Management business generates revenues from the management of client assets and through interests in private equity funds which are not managed by the Company.

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The management of assets under administration represents a distinct performance obligation that is satisfied over time.

For ongoing engagements, fees are billed quarterly either in advance or in arrears.

For ongoing engagements, fees are billed monthly or quarterly either in advance or in arrears.

Fees paid in advance of services rendered and satisfaction of the performance obligation are initially recorded as deferred revenue (a contract liability) in Other Current Liabilities on the Consolidated Statements of Financial Condition, and are recognized in Asset Management and Administration Fees on the Consolidated Statements of Operations ratably over the period in which the related services are rendered and the performance obligation is satisfied.

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Revenue and expenses associated with these transactions are recognized over the term of the repurchase or resale transaction.

Other Revenue also includes income (losses) earned on investment securities, including our investment funds which are used as an economic hedge against our deferred cash compensation program, certificates of deposit, cash and cash equivalents and on the Company’s debt security investment in G5 Holdings S.A.

("G5"), as well as adjustments to amounts due pursuant to the Company’s tax receivable agreement, subsequent to its initial establishment, related to changes in enacted tax rates, and gains (losses) resulting from foreign currency fluctuations, principal trading and realized and unrealized gains and losses on interests in Private Equity funds which are not managed by the Company.

These transactions were part of the Company's ECB business in Mexico, which was sold on December 16, 2020.

See Note 5 for further information.

Other Revenue also includes the following:

• Income (losses) earned on investment securities, including our investment funds and futures contracts which are used as an economic hedge against the Company's deferred cash compensation program, certificates of deposit, cash and cash equivalents and on the Company’s debt security investment in G5 Holdings S.A.

• Adjustments to amounts due pursuant to the Company’s tax receivable agreement, subsequent to its initial establishment, related to changes in enacted tax rates

• Gains (losses) resulting from foreign currency fluctuations

• Principal trading and realized and unrealized gains and losses on interests in Private Equity funds which are not managed by the Company

• A net loss on the sales of the Company's businesses at ECB, as well as a loss related to the release of cumulative foreign exchange losses resulting from the sale and wind-down of the Company's businesses in Mexico in 2020

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Interest Expense also includes interest expense associated with the Company’s Notes Payable, subordinated borrowings and lines of credit.

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Noncontrolling Interest is presented as a component of Total Equity on the Consolidated Statements of Financial Condition and below Net Income on the Consolidated Statements of Operations.

In addition, there is an allocation of

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

the components of Total Comprehensive Income between controlling interests and noncontrolling interests.

In addition, there is an allocation of the components of Total Comprehensive Income between controlling interests and noncontrolling interests.

Changes in a parent's ownership interest while the parent retains control of its subsidiary are accounted for as equity transactions.

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Cash and Cash Equivalents – Cash and Cash Equivalents consist of short-term highly-liquid investments with original maturities of three months or less.

Investment Securities and Certificates of Deposit – During 2019, the Company renamed "Marketable Securities and Certificates of Deposit" to "Investment Securities and Certificates of Deposit" on the Consolidated Statements of Financial Condition.

Investment Securities and Certificates of Deposit and Futures Contracts – During 2019, the Company renamed "Marketable Securities and Certificates of Deposit" to "Investment Securities and Certificates of Deposit" on the Consolidated Statements of Financial Condition.

Investment Securities include investments in U.S.

Treasury securities, corporate, municipal and other debt securities and investments in readily-marketable equity securities, which are accounted for under ASC 320-10, " Investments - Debt Securities" and ASC 321-10, " Investments - Equity Securities," ("ASC 321-10") following the adoption of ASU No.

2016-01, " Recognition and Measurement of Financial Assets and Financial Liabilities " ("ASU 2016-01") in January 2018.

The securities are carried at fair value on the Consolidated Statements of Financial Condition;

the debt securities are valued based on quoted prices that exist in the marketplace for similar issues and the equity securities are valued using quoted market prices on applicable exchanges or markets.

debt securities are valued based on quoted prices that exist in the marketplace for similar issues and equity securities are valued using quoted market prices on applicable exchanges or markets.

Investment Securities transactions are recorded as of the trade date.

The Company invests in readily marketable debt and equity securities which are managed by Evercore Wealth Management L.L.C.

("EWM"), as well as in a portfolio of exchange-traded funds and mutual funds as an economic hedge against the Company’s deferred cash compensation program.

The debt securities are classified as available-for-sale and any unrealized gains and losses are recorded as net increases or decreases to Accumulated Other Comprehensive Income (Loss), net of tax, and realized gains and losses on these securities are included in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations.

Realized and unrealized gains and losses on the equity securities are recorded in Other Revenue, Including Interest and Investments, beginning on January 1, 2018, from the application of ASU 2016-01.

The Company also periodically enters into futures contracts.

In accordance with ASC 815, "Derivatives and Hedging," ("ASC 815") futures contracts are carried at fair value.

The Company invests in readily marketable debt and equity securities, as well as in a portfolio of exchange-traded funds and mutual funds, and periodically enters into futures contracts, as an economic hedge against the Company’s deferred cash compensation program.

Debt securities are classified as available-for-sale and any unrealized gains and losses are recorded as net increases or decreases to Accumulated Other Comprehensive Income (Loss), net of tax, and realized gains and losses on these securities are included in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations.

Realized and unrealized gains and losses on equity securities are recorded in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations.

Realized and unrealized gains and losses on futures contracts are recorded in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations.

EGL and other broker-dealers also invest in fixed income portfolios consisting primarily of U.S.

1 unchanged sentence

Certificates of Deposit consist of investments with certain banks with original maturities of six months or less when purchased.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Financial Instruments Owned and Pledged as Collateral at Fair Value – The Company's Financial Instruments Owned and Pledged as Collateral at Fair Value consist principally of foreign government obligations, which are recorded on a trade-date basis and are stated at quoted market values.

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The Company pledges the Financial Instruments Owned and Pledged as Collateral at Fair Value to collateralize certain financing arrangements, which permits the counterparty to pledge the securities.

The Company's ECB business was sold in December 2020;

following the sale, there are no remaining Financial Instruments Owned and Pledged as Collateral at Fair Value.

See Notes 5 and 9 for further information.

Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase – Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase are treated as collateralized financing transactions.

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The Company periodically assesses the collectability or credit quality related to securities purchased under agreements to resell.

The Company's ECB business was sold in December 2020;

following the sale, there are no remaining Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase.

See Notes 5 and 9 for further information.

Accounts Receivable and Contract Assets – Accounts Receivable consists primarily of investment banking fees and expense reimbursements charged to the Company's clients.

1 unchanged sentence

The Company maintains an allowance for doubtful accounts to provide coverage for estimated losses from its client receivables.

The Company determines the adequacy of the allowance by estimating the probability of loss based on the Company's analysis of the client's creditworthiness and specifically reserves against exposure where the Company determines the receivables are impaired, which may include situations where a fee is in dispute or litigation has commenced.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company adopted ASU 2016-13 on January 1, 2020, using a modified retrospective method of transition.

The Company recorded a cumulative-effect adjustment to decrease retained earnings by $ 1,310 as of January 1, 2020.

Following the adoption of ASU 2016-13, the Company determines the adequacy of the allowance by estimating the probability of loss based on the Company's analysis of historical credit loss experience of its client receivables, and taking into consideration current market conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.

The Company has determined that long-term forecasted information is not relevant to its fee receivables, which are primarily short-term.

The Company updates its average credit loss rates periodically and maintains a quarterly allowance review process to consider current factors that would require an adjustment to the credit loss allowance.

In addition, the Company periodically performs a qualitative assessment to monitor risks associated with current and forecasted conditions that may require an adjustment to the expected credit loss rates.

Expected credit losses for newly recognized financial assets and changes to expected credit losses during the period are recognized in earnings.

The Investment Banking and Investment Management receivables collection periods generally are within 90 days of invoice, with the exception of placement fees, which are generally collected within 180 days of invoice, and fees related to private funds capital raising, which are collected in a period exceeding one year .

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Investments – The Company's investments include investments in unconsolidated affiliated companies and other investments in private equity partnerships:

Affiliates – The Company has equity interests in ABS Investment Management Holdings LP and ABS Investment Management GP LLC (collectively, "ABS"), Atalanta Sosnoff Capital, LLC ("Atalanta Sosnoff"), Luminis Partners ("Luminis") and G5 (through December 31, 2017, the date the Company exchanged all of its outstanding equity interests for debentures of G5) and includes its share of the income (losses) within Income from Equity Method Investments, as a component of Income Before Income Taxes, on the Consolidated Statements of Operations.

Affiliates – The Company has equity interests in ABS Investment Management Holdings LP and ABS Investment Management GP LLC (collectively, "ABS"), Atalanta Sosnoff Capital, LLC ("Atalanta Sosnoff") and Luminis Partners ("Luminis") and includes its share of the income (losses) within Income from Equity Method Investments, as a component of Income Before Income Taxes, on the Consolidated Statements of Operations.

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

See Note 11 for further information.

Private Equity – The investments in private equity funds consist primarily of investments in marketable and non-investment securities of the portfolio companies.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Private Equity – The investments in private equity funds consist primarily of investments in marketable and non-marketable securities of the portfolio companies.

The underlying investments held by the private equity funds are valued based on quoted market prices or estimated fair value if there is no public market.

The fair value of non-investment securities is determined by giving consideration to a range of factors, including but not limited to, market conditions, operating performance (current and projected) and subsequent financing transactions.

Due to the inherent uncertainty in the valuation of these non-investment securities, estimated values may materially differ from the values that would have been used had a ready market existed for these investments.

The fair value of non-marketable securities is determined by giving consideration to a range of factors, including but not limited to, market conditions, operating performance (current and projected) and subsequent financing transactions.

Due to the inherent uncertainty in the valuation of these non-marketable securities, estimated values may materially differ from the values that would have been used had a ready market existed for these investments.

Investments in publicly-traded securities held by the private equity funds are valued using quoted market prices.

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Right-of-use assets represent the Company's right to use the underlying assets for their lease terms and lease liabilities represent the Company's obligation to make lease payments arising from these leases.

Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

Right-of-use assets are subject to certain adjustments for lease incentives and initial direct costs.

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GAAP presentation).

See Notes 3 and 10 for further information.

See Note 10 for further information.

Furniture, Equipment and Leasehold Improvements – Fixed assets, including equipment, hardware and software and leasehold improvements, are stated at cost, net of accumulated depreciation and amortization.

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Goodwill and Intangible Assets – Goodwill is tested for impairment annually, as of November 30 th , or more frequently if circumstances indicate impairment may have occurred.

The Company assesses whether any goodwill allocated to its applicable reporting unit is impaired by comparing the fair value of each reporting unit with its respective carrying amount.

The Company assesses whether any goodwill allocated to its applicable

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

reporting unit is impaired by comparing the fair value of each reporting unit with its respective carrying amount.

For acquired businesses, contingent consideration is recognized and measured at fair value as of the acquisition date and at subsequent reporting periods.

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Compensation expense recognized pursuant to share-based awards is based on the grant date fair value of the award.

The fair value (as measured on the grant date) of awards that vest from one to five years ("Service-based Awards") is amortized over the vesting periods or requisite service periods as required under ASC 718, however, the vesting of some Service-based Awards will accelerate upon the occurrence of certain events.

The fair value (as measured on the grant date) of awards that vest from one year to five years ("Service-based Awards") is amortized over the vesting periods or requisite service periods as required under ASC 718, however, the vesting of some Service-based Awards will accelerate upon the occurrence of certain events.

The Company amortizes the grant-date fair value of share-based compensation awards made to employees, who are or will become retirement eligible prior to the stated vesting date, over the expected substantive service period.

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common shareholders, unvested Service-based Awards are included in the diluted weighted average Class A Shares outstanding using the treasury stock method.

Once vested, restricted stock units, ("RSUs") and restricted stock are included in the basic and diluted weighted average

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Class A Shares outstanding.

Once vested, restricted stock units, ("RSUs") and restricted stock are included in the basic and diluted weighted average Class A Shares outstanding.

Expense relating to RSUs, restricted stock and LP Units is charged to Employee Compensation and Benefits on the Consolidated Statements of Operations.

Compensation expense is recognized pursuant to performance-based awards if it is probable that the performance condition will be achieved.

See Note 19 for a discussion of the awards issued in conjunction with the Company's acquisition of the operating businesses of ISI, as well as the Company's Long-term Incentive Plan and other performance-based awards.

See Note 19 for a discussion of the Company's Long-term Incentive Plan and other performance-based awards.

Awards classified as liabilities as required under ASC 718, such as cash settled share-based awards, are re-measured at fair value at each reporting period.

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Translation gains and losses are included in Foreign Currency Translation Adjustment Gain (Loss), net, as a component of Other Comprehensive Income (Loss) on the Consolidated Statements of Changes in Equity and the Consolidated Statements of Comprehensive Income.

Transactional exchange gains and losses are included in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations.

Transactional exchange gains and losses, as well as releases of cumulative foreign currency translation gains and losses from Accumulated Other Comprehensive Income (Loss), are included in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations.

Income Taxes – The Company accounts for income taxes in accordance with ASC 740, " Income Taxes" ("ASC 740") which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax basis of its assets and liabilities, as disclosed in Note 22.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Deferred income taxes reflect the net tax effects of temporary differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse.

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Significant management judgment is required in determining the Company's provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against the Company's net deferred tax assets.

The Company adopted ASU No.

2016-09, "Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09") on January 1, 2017, which resulted in excess tax benefits and deficiencies from the delivery of Class A Shares under share-based payment arrangements being recognized in the Company's Provision for Income Taxes, rather than in Additional Paid-In-Capital under legacy U.S.

Excess tax benefits and deficiencies from the delivery of Class A Shares under share-based payment arrangements are recognized in the Company's Provision for Income Taxes.

See Note 22 for further information.

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See Note 22 for further information.

Reclassifications – During 2018, certain balances on the Consolidated Statements of Operations for prior periods were reclassified to conform to their current presentation.

Execution, Clearing and Custody Fees – Other Operating Expenses of $ 13,572 for the year ended December 31, 2017, and Professional Fees of $ 1,206 for the year ended December 31, 2017, were reclassified to a new expense line item, "Execution, Clearing and Custody Fees" on the Consolidated Statements of Operations.

Other Revenue, Including Interest and Investments – The Company renamed "Other Revenue, Including Interest" to "Other Revenue, Including Interest and Investments" on the Consolidated Statements of Operations and reclassified ($ 701 ) of principal trading losses from Investment Banking Revenue for the year ended December 31, 2017, and $ 2,037 of net realized and unrealized gains on private equity investments from Investment Management Revenue for the year ended December 31, 2017, to "Other Revenue, Including Interest and Investments."

Investment Banking Revenue – Following the above reclassifications, the Company disaggregated "Investment Banking Revenue" into "Advisory Fees," "Underwriting Fees" and "Commissions and Related Fees" on the Consolidated Statements of Operations.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Asset Management and Administration Fees – Following the above reclassifications, the Company renamed "Investment Management Revenue" to "Asset Management and Administration Fees" on the Consolidated Statements of Operations, which includes management fees from the wealth management and institutional asset management businesses.

Reclassifications – During 2018, the Company disaggregated "Investment Banking Revenue" into "Advisory Fees", "Underwriting Fees" and "Commissions and Related Fees" on the Consolidated Statements of Operations.

The Company also renamed Investment Management Revenue" to "Asset Management and Administration Fees" on the Consolidated Statements of Operations, which includes management fees from the wealth management and institutional asset management businesses.

Note 3 – Recent Accounting Pronouncements

ASU 2016-02 – In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No.

2016-02, "Leases (Topic 842)" ("ASU 2016-02").

ASU 2016-02 supersedes ASC 840, "Leases" ("ASC 840") and includes requirements for the recognition of a right-of-use asset and lease liability on the balance sheet by lessees for those leases classified as operating leases under previous guidance.

In July 2018, the FASB issued ASU 2018-11, which provides an additional transition method to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to Retained Earnings for prior periods as of the beginning of the fiscal year of adoption.

The amendments in these updates are effective using a modified retrospective approach as of the date of adoption, during interim and annual periods beginning after December 15, 2018, with early adoption permitted.

The Company adopted ASU 2016-02 on January 1, 2019 using the modified retrospective approach.

The adoption resulted in the present value of the Company's lease commitments being reflected on the Company's Consolidated Statements of Financial Condition as a long-term asset with a corresponding liability, classified as current and non-current.

Right-of-use assets are subject to certain adjustments for lease incentives and initial direct costs.

The Company's lease commitments primarily relate to office space, as discussed in Note 10.

The impact on the Company's earnings is not materially different from the prior expense related to leases as required under legacy U.S.

GAAP, which is primarily reflected in Occupancy and Equipment Rental expense on the Consolidated Statements of Operations , and there was no impact on the Company's cash flows.

The Company recorded lease liabilities of $ 250,567 on its Consolidated Statement of Financial Condition as of December 31, 2019 , along with associated right-of-use assets of $ 199,988 , which reflect the lease liabilities recognized, subject to certain adjustments for lease incentives and initial direct costs.

ASU 2016-13 – In June 2016, the FASB issued ASU No.

2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13").

ASU 2016-13 provides amendments to ASC 326, "Financial Instruments - Credit Losses," which amend the guidance on the impairment of financial instruments and adds an impairment model (the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses.

ASU 2016-13 – In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13.

ASU 2016-13 provides amendments to ASC 326, "Financial Instruments - Credit Losses," which amend the guidance on the impairment of financial instruments and add an impairment model (the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses.

Entities will recognize an allowance for its estimate of expected credit losses as of the end of each reporting period.

ASU 2016-13 also eliminates the concept of other-than-temporary impairment for available-for-sale debt securities and requires impairments on these securities to be recognized in earnings through an allowance when fair value is less than amortized cost and a credit loss exists or when the securities are expected to be sold before a recovery of amortized cost.

The amendments in this update are effective during interim and annual periods beginning after December 15, 2019, with early adoption permitted after December 15, 2018.

The Company currently uses the specific identification method for establishing credit provisions and write-offs of its trade accounts receivable.

The Company adopted ASU 2016-13 on January 1, 2020.

This adoption did not result in a material difference between the current method and the CECL model.

ASU 2018-02 – In February 2018, the FASB issued ASU No.

2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02").

ASU 2018-02 provides amendments to ASC 220, "Income Statement - Reporting Comprehensive Income," which allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.

The amendments in this update are effective either in the period of adoption or retrospectively, to each period (or periods) in which the effect of the change in the U.S.

federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized, during interim and annual periods beginning after December 15, 2018, with early adoption permitted.

The Company adopted ASU 2018-02 on January 1, 2019 and did not elect to reclassify the income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings.

As such, there was no impact on the Company's financial condition, results of operations and cash flows, or disclosures thereto.

ASU 2018-07 – In June 2018, the FASB issued ASU No.

2018-07, "Improvements to Nonemployee Share-Based Payment Accounting" ("ASU 2018-07").

ASU 2018-07 provides amendments to ASC 718 to align the accounting for share-based payment awards issued to employees and nonemployees, particularly surrounding the measurement date and impact of performance conditions.

The amendments in this update are effective during interim and annual periods beginning after December 15, 2018, with early adoption permitted.

The amendments in this update should be applied by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption for liability-classified awards that have not been settled and equity-classified awards for which a measurement date has not been established by the date of adoption, and prospectively for all new awards granted after the date of adoption.

The Company adopted ASU 2018-07 on January 1, 2019.

The adoption of ASU 2018-07 did not have a material impact on the Company's financial condition, results of operations and cash flows, or disclosures thereto.

The Company adopted ASU 2016-13 on January 1, 2020 using the modified retrospective approach by means of a cumulative-effect adjustment to decrease retained earnings by $ 1,310 as of January 1, 2020.

As a result of adopting ASU 2016-13, the Company’s allowance for credit losses on financial assets that are measured at amortized cost reflects management’s estimate of credit losses over the remaining expected life of such assets.

These expected credit losses are measured based on historical experience, current conditions and forecasts that affect the collectability of the reported amounts.

Expected credit losses for newly recognized financial assets, and changes to expected credit losses during the period are recognized in earnings.

The impact of the new guidance primarily relates to the Company’s trade accounts receivable.

The Company previously used the specific identification method for establishing credit provisions and write-offs of its trade accounts receivable.

ASU 2018-13 – In August 2018, the FASB issued ASU No.

2018-13, "Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13").

ASU 2018-13 provides amendments to ASC 820, " Fair Value Measurements and Disclosures" ("ASC 820"), which remove the requirements surrounding the disclosure and policy of transfers

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

between fair value levels and the valuation processes for recurring Level 3 fair value measurements.

ASU 2018-13 provides amendments to ASC 820, " Fair Value Measurements and Disclosures" ("ASC 820"), which remove the requirements surrounding the disclosure and policy of transfers between fair value levels and the valuation processes for recurring Level 3 fair value measurements.

In addition, ASU 2018-13 adds disclosure requirements for changes in unrealized gains and losses for Level 3 measurements and the range and weighted average of significant unobservable inputs used in Level 3 fair value measurements.

1 unchanged sentence

The amendments on changes in unrealized gains and losses and unobservable inputs for Level 3 measurements should be applied prospectively, and all other amendments in this update should be applied retrospectively.

The Company adopted ASU 2018-13 on January 1, 2020.

The adoption of ASU 2018-13 did not have a material impact on the Company's financial condition, results of operations and cash flows, or disclosures thereto.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

ASU 2018-17 – In October 2018, the FASB issued ASU No.

2018-17, "Consolidation (Topic 810) - Targeted Improvements to Related Party Guidance for Variable Interest Entities" ("ASU 2018-17").

ASU 2018-17 provides amendments to ASC 810, which states that any indirect interest held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests.

ASU 2018-17 provides amendments to ASC 810, " Consolidation" which states that any indirect interest held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests.

The amendments in this update are effective during interim and annual periods beginning after December 15, 2019, with early adoption permitted.

The amendments are required to be retrospectively applied with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented.

The amendments are required to be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented.

The Company adopted ASU 2018-17 on January 1, 2020.

The adoption of ASU 2018-17 did not have a material impact on the Company's financial condition, results of operations and cash flows, or disclosures thereto.

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The amendments on separate financial statements of legal entities that are not subject to tax should be applied on a retrospective basis for all periods presented, amendments on ownership changes of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis, with a cumulative-effect adjustment recorded through retained earnings as of the beginning of the period of adoption, and all other amendments should be applied prospectively.

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.

The adoption of ASU 2019-12 did not have a material impact on the Company's financial condition, results of operations and cash flows, or disclosures thereto.

ASU 2020-01 – In January 2020, the FASB issued ASU No.

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The amendments in this update are effective during interim and annual periods beginning after December 15, 2020, with early adoption permitted.

The adoption of ASU 2020-01 did not have a material impact 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 assessing the impact of this update on the Company's financial condition, results of operations and cash flows, or disclosures thereto.

Note 4 – Revenue

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 4 – Revenue and Accounts Receivable

The following table presents revenue recognized by the Company for the years ended December 31, 2020, 2019 and 2018:

For the Years Ended December 31,

2020 2019 2018

Investment Banking:

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Wealth Management

$ 53,069 $ 48,083 $ 44,875

Institutional Asset Management

1,328 2,528 3,371

Total Investment Management $ 54,397 $ 50,611 $ 48,246

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Following the adoption of ASU 2014-09, expenses related to underwriting transactions are presented gross in the results of operations of the Company, whereas under legacy U.S.

GAAP these expenses were presented net.

Underwriting Fees are gross of related non-compensation expenses of $ 4,680 in the Consolidated Statements of Operations for the year ended December 31, 2018 .

Professional Fees, Travel and Related Expenses, Communications and Information Services and Other Operating Expenses in the Consolidated Statements of Operations are gross of non-compensation expenses of $ 2,340 , $ 460 , $ 476 and $ 1,404 , respectively, for the year ended December 31, 2018 .

Contract Balances

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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.

The application of ASC 606 resulted in advisory revenue of $ 3,374 being recognized on the Consolidated Statements of Operations for the year ended December 31, 2018 , representing variable consideration under the standard for which it is probable that a significant reversal of revenue will not occur, substantially all of which would have been recognized in the first quarter of 2019, under the legacy accounting standard.

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.

Under ASC 606, revenue is

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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 $ 23,409 , $ 15,115 and $ 16,468 on the Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018, respectively, that was initially included in deferred revenue on the Company’s Consolidated Statements of Financial Condition.

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therefore, the Company has elected to apply the practical expedient in ASC 606-10-50-14.

The allowance for credit losses for the years ended December 31, 2020 and 2019 is as follows:

For the Years Ended December 31,

Beginning Balance (1)

$ 9,191 $ 6,037

Bad debt expense 6,878 10,451

Write-offs, foreign currency translation and other adjustments ( 10,697 ) ( 8,607 )

Ending Balance $ 5,372 $ 7,881

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

See Notes 2 and 3 for further information.

The change in the balance during the year ended December 31, 2020 is primarily related to an increase in the current period provision of expected credit losses, which is impacted by the change in the amount of receivables outstanding greater than 120 days at December 31, 2020, and the write-off of aged receivables.

For long-term accounts receivable and long-term contract assets, the Company monitors clients’ creditworthiness based on collection experience and other internal metrics.

The following table presents the Company’s long-term accounts receivable and long-term contract assets from the Company's private and secondary fund advisory businesses as of December 31, 2020, by year of origination:

Amortized Cost Basis by Origination Year

2020 2019 2018 2017 Total

Long-term Accounts Receivable and Long-Term Contract Assets $ 47,466 $ 19,538 $ 8,478 $ 776 $ 76,258

Note 5 – Business Changes and Developments

Business Developments

Sale of ECB Business and Wind-down of Mexico Advisory – During 2020, the Company completed the sale of its ECB businesses and the transition of its advisory presence in Mexico:

• On July 2, 2020, the Company completed the sale of the trust business of 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 Consolidated Statement of Operations for the year ended December 31, 2020.

• On December 16, 2020, the Company completed the sale of its remaining ECB business for a purchase price of MXN 35,000 ($ 1,634 ).

The ECB business was part of the Company’s Investment Management segment.

As a result of this transaction, the Company deconsolidated assets of $ 32,487 , comprised primarily of $ 24,742 of Financial Instruments Owned and Pledged as Collateral at Fair Value, $ 3,317 of Investment Securities and $ 2,785 of Cash and Cash Equivalents and Restricted Cash and deconsolidated liabilities of $ 26,519 , comprised primarily of $ 24,764 of Securities Sold Under Agreements to Repurchase.

This transaction resulted in a pre-tax loss of $ 4,796 included in

EVERCORE INC.

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

Note 5 – Business Changes and Developments

Business Developments

Real Estate Capital Advisory - On April 23, 2018, the Company announced the expansion of its global investment banking platform by establishing a Real Estate Capital Advisory business within its existing Private Capital Advisory L.P.

("PCA") business.

This business is focused on primary and secondary transactions for real estate oriented financial sponsors and private equity investors in conjunction with PCA’s existing fund monetization and recapitalization expertise.

Certain Real Estate Capital Advisory ("RECA") employees purchased Class R Interests in PCA, at fair value, resulting in an increase to Noncontrolling Interest of $ 770 on the Company's Consolidated Statement of Financial Condition as of December 31, 2018 .

See Note 17 for further information.

In conjunction with the establishment of the RECA business, the Company hired certain employees and entered into an arrangement with the former employer of these employees, which, among other things, provides 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 accounted for this transaction as an asset acquisition and has recognized the contingent consideration paid as an expense in Professional Fees on the Company's Consolidated Statements of Operations as the related revenue from the underlying engagements is realized.

The Company recognized expenses of $ 400 and $ 3,971 pursuant to this arrangement for the years ended December 31, 2019 and 2018 , respectively.

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

The Company is the general partner of PCA.

Concurrent with this transaction, the Company performed an assessment under ASC 810, and concluded that PCA remains a VIE following this transaction and determined that the Company is still the primary beneficiary of this VIE.

Specifically, the Company's general partner interest provides the Company with the ability to make decisions that significantly impact the economic performance of PCA, while the limited partners do not possess substantive participating rights over PCA.

The Company's assessment of the primary beneficiary included assessing which parties have the power to significantly impact the economic performance and the obligation to absorb losses, which could be potentially significant to the entity, or the right to receive benefits from the entity that could be potentially significant.

The assets of PCA are not generally available to the Company and the liabilities are generally non-recourse to the Company.

Other Revenue, Including Interest and Investments, on the Consolidated Statement of Operations for the year ended December 31, 2020.

• In 2020, the Company completed the transition of 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 is in the process of winding down the business, which is expected to be completed in 2021.

Following the above transactions, the Company concluded that the liquidation of its operations in Mexico was substantially complete.

This determination resulted in the reclassification of $ 20,337 and $ 7,028 of cumulative foreign currency translation losses from Accumulated Other Comprehensive Income (Loss) and Noncontrolling Interest, respectively, on the Consolidated Statement of Financial Condition to Other Revenue, Including Interest and Investments, on the Consolidated Statement of Operations for the year ended December 31, 2020.

In addition, the Company recorded $ 1,656 in Special Charges, Including Business Realignment Costs, on the Consolidated Statement of Operations for the year ended December 31, 2020, for charges related to the impairment of assets resulting from the wind-down of the Company's businesses in Mexico.

This was comprised of a charge of $ 1,176 related to the impairment of operating lease right-of-use assets and a charge of $ 480 related to the impairment of leasehold improvements.

Goodwill and Intangible Assets

Goodwill associated with the Company's acquisitions is as follows:

Banking Investment

Management Total

Balance at December 31, 2018 (1)

$ 120,464 $ 10,923 $ 131,387

Impairment of Goodwill — ( 2,921 ) ( 2,921 )

Foreign Currency Translation and Other 2,292 — 2,292

Balance at December 31, 2019 (2)

Impairment of Goodwill

122,756 8,002 130,758

Sale of ECB Trust Business — ( 475 ) ( 475 )

Foreign Currency Translation and Other ( 1,157 ) — ( 1,157 )

Balance at December 31, 2020 (2)

(1) The amount of the Company's goodwill before accumulated impairment losses of $ 35,607 was $ 166,994 and $ 169,838 at December 31, 2018 and 2017, respectively .

$ 121,599 $ 7,527 $ 129,126

(1) The amount of the Company's goodwill before accumulated impairment losses of $ 35,607 was $ 166,994 at December 31, 2018.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(2) The amount of the Company's goodwill before accumulated impairment losses of $ 38,528 was $ 167,654 and $ 169,286 at December 31, 2020 and 2019, respectively.

Intangible assets associated with the Company's acquisitions are as follows:

December 31, 2020

Gross Carrying Amount

Accumulated Amortization

Gross Carrying Amount Accumulated Amortization

Banking Investment

Management Total Investment

Banking Investment

Management Total

Client Related $ — $ 3,630 $ 3,630 $ — $ 2,932 $ 2,932

Total $ — $ 3,630 $ 3,630 $ — $ 2,932 $ 2,932

December 31, 2019

Gross Carrying Amount

Accumulated Amortization

Gross Carrying Amount Accumulated Amortization

Banking Investment

Management Total Investment

Banking Investment

Management Total

Client Related $ — $ 3,830 $ 3,830 $ — $ 2,743 $ 2,743

Other 5,320 445 5,765 4,159 390 4,549

Total $ 5,320 $ 4,275 $ 9,595 $ 4,159 $ 3,133 $ 7,292

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Expense associated with the amortization of intangible assets was $ 1,605 , $ 8,077 and $ 9,199 for the years ended December 31, 2020, 2019 and 2018, respectively.

1 unchanged sentence

Impairments of Goodwill

At November 30, 2019, in accordance with ASC 350, "Intangibles - Goodwill and Other" ("ASC 350"), the Company performed its annual goodwill impairment assessment.

The Company concluded that the fair value of its reporting units substantially exceeded their carrying values as of November 30, 2019, with the exception of the Institutional Asset Management reporting unit, which was less than its carrying value.

At November 30, 2020, in accordance with ASC 350, "Intangibles - Goodwill and Other" ("ASC 350"), the Company performed its annual goodwill impairment assessment and concluded that the fair value of its reporting units substantially exceeded their carrying values.

At November 30, 2019, the Company determined that the fair value of its reporting units substantially exceeded their carrying values, with the exception of its Institutional Asset Management reporting unit, which was less than its carrying value.

In determining the fair value of this reporting unit, the Company utilized a discounted cash flow methodology based on the adjusted cash flows from operations.

The discounted cash flow methodology began with the forecasted cash flows of the reporting unit and applied a discount rate of approximately 17 % , which reflected the weighted average cost of capital adjusted for the risks inherent in the future cash flows.

The forecast inherent in the valuation assumes a compound annual growth rate in revenues of 3 % .

As a result of the above analysis, the Company determined that the fair value of the Institutional Asset Management reporting unit was less than its carrying value as of November 30, 2019.

The Company recorded a goodwill impairment charge of $ 833 in the Investment Management segment, which is included within Special Charges on the Consolidated Statement of Operations for the year ended December 31, 2019.

As a result of this analysis, the Company recorded a goodwill impairment charge of $ 833 in the Investment Management segment, which is included within Special Charges, Including Business Realignment Costs, on the Consolidated Statement of Operations for the year ended December 31, 2019.

This charge resulted in a decrease of $ 543 to Net Income Attributable to Evercore Inc.

(after adjustments for noncontrolling interest and income taxes) for the year ended December 31, 2019.

The Company entered into an agreement to sell the trust business of Evercore Casa de Bolsa, S.A.

("ECB") (the "ECB Trust Business"), which is a part of its Investment Management segment.

Completion of this transaction is expected to occur in 2020.

As of December 31, 2019 , the ECB Trust Business includes $ 475 of goodwill, representing an allocation of goodwill

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

based on the relative fair value of the business being sold to the total fair value of the Institutional Asset Management reporting unit.

In accordance with ASC 350, the Company performed an impairment assessment of the goodwill remaining in the Institutional Asset Management reporting unit following the classification of the ECB Trust Business as Held for Sale in December 2019.

Additionally, in December 2019, the Company performed an impairment assessment of the goodwill remaining in the Institutional Asset Management reporting unit following the classification of the ECB Trust business as Held for Sale, in accordance with ASC 350.

In determining the fair value of this reporting unit, the Company utilized a discounted cash flow methodology based on the adjusted cash flows from operations.

The forecast inherent in the valuation assumes a compound annual growth rate in revenues of 3 % .

As a result of the above analysis, the Company determined that the fair value of the remaining business in the Institutional Asset Management reporting unit was less than its carrying value.

Accordingly, the Company recorded a goodwill impairment charge of $ 2,088 in the Investment Management segment, which is included within Special Charges on the Consolidated Statement of Operations for the year ended December 31, 2019 .

This charge resulted in a decrease of $ 1,361 to Net Income Attributable to Evercore Inc.

(after adjustments for noncontrolling interest and income taxes) for the year ended December 31, 2019.

During the second quarter of 2017, in accordance with ASC 350 the Company performed an impairment assessment of the goodwill remaining in the Institutional Asset Management reporting unit following the classification of the Institutional Trust and Independent Fiduciary business of Evercore Trust Company, N.A.

("ETC") as Held for Sale.

In determining the fair value of this reporting unit, the Company utilized both a market multiple approach and a discounted cash flow methodology based on the adjusted cash flows from operations.

The market multiple approach included applying the average earnings multiples of comparable public companies, multiplied by the forecasted earnings of the reporting unit, to yield an estimate of fair value.

As a result of the above analysis, the Company determined that the fair value of the remaining business in the Institutional Asset Management reporting unit was less than its carrying value.

The Company adopted ASU 2017-04 during the second quarter of 2017.

Accordingly, the Company recorded a goodwill impairment charge in the Investment Management segment of $ 7,107 , which is included within Special Charges on the Consolidated Statement of Operations for the year ended December 31, 2017.

As a result of this analysis, the Company determined that the fair value of the remaining business in the Institutional Asset Management reporting unit was less than its carrying value.

Accordingly, the Company recorded a goodwill impairment charge of $ 2,088 in the Investment Management segment, which is included within Special Charges, Including Business Realignment Costs, on the Consolidated Statement of Operations for the year ended December 31, 2019.

This charge resulted in a decrease of $ 1,361 to Net Income Attributable to Evercore Inc.

(after adjustments for noncontrolling interest and income taxes) for the year ended December 31, 2019.

Note 6 – Acquisition and Transition Costs and Special Charges

Note 6 – Acquisition and Transition Costs and Special Charges, Including Business Realignment Costs

Acquisition and Transition Costs

The Company recognized $ 562 , $ 1,013 and $ 21 for the years ended December 31, 2020, 2019 and 2018, respectively, as Acquisition and Transition Costs incurred in connection with acquisitions, divestitures, and other ongoing business development initiatives.

These costs are primarily comprised of professional fees for legal and other services.

Special Charges

The Company recognized $ 10,141 for the year ended December 31, 2019 , as Special Charges incurred related to a charge of $ 2,921 associated with the impairment of goodwill in the Company's Institutional Asset Management reporting unit, expenses of $ 4,370 related to the acceleration of depreciation expense for leasehold improvements in conjunction with the expansion of the Company's headquarters in New York and separation and transition benefits for certain employees terminated as a result of the Company's review of its operations of $ 2,850 .

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

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

In conjunction with the employment reductions, the Company is expected to incur costs (including costs related to the acceleration of deferred compensation) of approximately $ 38,000 , $ 2,850 of which has been recorded in Special Charges in 2019.

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

Actual results may differ materially and additional charges not currently expected may be incurred in connection with, or as a result of, these employment reductions.

The Company recognized $ 5,012 for the year ended December 31, 2018 , as Special Charges incurred related to separation benefits and costs for the termination of certain contracts associated with closing the Company's agency trading platform in the U.K.

and separation benefits and related charges associated with the Company's businesses in Mexico, as well as the acceleration

These costs are primarily comprised of professional fees for legal and other services, including costs in 2020 associated with the sale of the ECB business.

Special Charges, Including Business Realignment Costs

The Company recognized $ 46,645 for the year ended December 31, 2020, as Special Charges, Including Business Realignment Costs, including expenses of $ 41,669 primarily for separation and transition benefits for certain employees terminated as a result of the Company's review of its operations, described below, $ 3,320 related to the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of the Company's headquarters in New York and the Company's business realignment initiatives, and $ 1,656 for charges related to the impairment of assets resulting from the wind-down of the Company's businesses in Mexico.

See Note 5 for further information.

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

EVERCORE INC.

1 unchanged sentence

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

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

The Company recognized $ 25,437 for the year ended December 31, 2017, as Special Charges incurred related to a charge of $ 7,107 associated with the impairment of goodwill in the Company's Institutional Asset Management reporting unit, a charge of $ 14,400 associated with the impairment of the Company's former equity method investment in G5, and expenses of $ 3,930 associated with the transition of certain employees in conjunction with the sale of the Institutional Trust and Independent Fiduciary business of ETC.

See Notes 5 and 11 for further information.

review, which began in the fourth quarter of 2019, generated reductions of 8 % of the Company's headcount.

In conjunction with the employment reductions, the Company incurred costs (including costs related to the acceleration of deferred compensation) of $ 41,669 and $ 2,850 for the years ended December 31, 2020 and 2019, respectively, which has been recorded in Special Charges, Including Business Realignment Costs.

The Company recognized $ 10,141 for the year ended December 31, 2019, as Special Charges, Including Business Realignment Costs, including expenses of $ 4,370 related to the acceleration of depreciation expense for leasehold improvements in conjunction with the expansion of the Company's headquarters in New York, a charge of $ 2,921 associated with the impairment of goodwill in the Company's Institutional Asset Management reporting unit and separation and transition benefits for certain employees terminated as a result of the Company's review of its operations of $ 2,850 (described above).

The Company recognized $ 5,012 for the year ended December 31, 2018, as Special Charges, Including Business Realignment Costs, related to separation benefits and costs for the termination of certain contracts associated with closing the Company's agency trading platform in the U.K.

and separation benefits and related charges associated with the Company's businesses in Mexico, as well as the acceleration of depreciation expense for leasehold improvements in conjunction with the expansion of the Company's headquarters in New York.

Note 7 – Related Parties

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 $ 15,641 for the year ended December 31, 2020.

Other Assets on the Consolidated Statements of Financial Condition includes the long-term portion of loans receivable from certain employees of $ 10,159 and $ 13,137 as of December 31, 2020 and 2019, respectively.

2 unchanged sentences

Personal Expenses Paid on Behalf of Employees and Related Parties 278 1,114

Other 441 379

Receivable from Employees and Related Parties $ 23,593 $ 22,416

2 unchanged sentences

Amounts Due to U.K.

Members 13,606 21,566

Amounts Due Pursuant to Tax Receivable Agreements (a)

Payable to Employees and Related Parties $ 24,047 $ 31,703

Relates to the current portion of the Member exchange of Class A LP Units for Class A Shares.

(a) Relates to the current portion of the Member exchange of Class A LP Units for Class A Shares.

The long-term portion of $ 76,860 and $ 84,952 is disclosed in Amounts Due Pursuant to Tax Receivable Agreements on the Consolidated Statements of Financial Condition at December 31, 2020 and 2019, respectively.

4 unchanged sentences

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

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Losses Fair Value Cost Gross

Losses Fair Value

Debt Securities $ 402,824 $ 39 $ — $ 402,863 $ 114,204 $ 591 $ 11 $ 114,784

6 unchanged sentences

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

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Cost Fair Value Amortized

Cost Fair Value

Due within one year $ 402,824 $ 402,863 $ 108,662 $ 109,217

Due after one year through five years — — 5,542 5,567

Since the Company has the ability and intent to hold available-for-sale securities until a recovery of fair value is equal to an amount approximating its amortized cost, which may be at maturity, and has not incurred credit losses on its securities, it does not consider such unrealized loss positions to be other-than-temporarily impaired at December 31, 2019 .

Total $ 402,824 $ 402,863 $ 114,204 $ 114,784

The Company has the ability and intent to hold available-for-sale securities until a recovery of fair value is equal to an amount approximating its amortized cost, which may be at maturity.

Further, the securities are all U.S.

Treasuries, and the Company has not incurred credit losses on its securities.

As such, the Company does not consider these securities to be impaired at December 31, 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 Consolidated Statements of Financial Condition .

Debt Securities are classified as available-for-sale securities within Investment Securities and Certificates of Deposit on the 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 losses of ($ 14 ) , ($ 28 ) and ($ 38 ) for the years ended December 31, 2019, 2018 and 2017 , respectively.

The Company had net realized gains (losses) of $ 75 , ($ 14 ) and ($ 28 ) for the years ended December 31, 2020, 2019 and 2018, respectively.

Equity Securities

4 unchanged sentences

Treasury bills, municipal bonds and other debt securities.

At December 31, 2020, this portfolio consisted solely of U.S.

Treasury bills.

These securities are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations, as required for broker-dealers in securities.

The Company had net realized and unrealized gains (losses) of ($ 1,216 ), $ 491 and $ 546 for the years ended December 31, 2020, 2019 and 2018, respectively.

Investment Funds

The Company invests in a portfolio of exchange-traded funds and mutual funds as an economic hedge against the Company's deferred cash compensation program.

See Note 19 for further information.

These securities are carried at fair value, with changes

EVERCORE INC.

1 unchanged sentence

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

in fair value recorded in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations .

Included in Investment Securities above are $ 99,983 of U.S.

Treasury bills purchased on December 31, 2020, which did not settle until January 4, 2021.

As of December 31, 2020, the Company had a payable to the broker for securities purchased of $ 99,983 recorded in Other Current Liabilities on the Consolidated Statements of Financial Condition.

Investment Funds

The Company invests in a portfolio of exchange-traded funds and mutual funds as an economic hedge against the Company's deferred cash compensation program.

See Note 19 for further information.

These securities are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations.

The Company had net realized and unrealized gains (losses) of $ 16,913 , $ 13,785 and ($ 5,113 ) for the years ended December 31, 2020, 2019 and 2018, respectively.

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

These contracts settled in June 2019.

In accordance with ASC 815, "Derivatives and Hedging," these contracts are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations .

The Company had net realized gains of $ 59 for the year ended December 31, 2019 .

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

These contracts will settle in June 2020.

The Company periodically enters into futures contracts as an economic hedge against the Company's deferred cash compensation program.

See Note 20 for further information.

Certificates of Deposit

1 unchanged sentence

These certificates of deposit matured in January 2020.

At December 31, 2018 , the Company held certificates of deposit of $ 100,000 with certain banks with original maturities of six months or less when purchased.

These certificates of deposit matured during the first quarter of 2019.

Note 9 – Financial Instruments Owned and Pledged as Collateral at Fair Value, Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase

The Company, through ECB, enters into repurchase agreements with clients seeking overnight money market returns whereby ECB transfers to the clients Mexican government securities in exchange for cash and concurrently agrees to repurchase the securities at a future date for an amount equal to the cash exchanged plus a stipulated premium or interest factor.

ECB deploys the cash received from, and acquires the securities deliverable to, clients under these repurchase arrangements by purchasing securities in the open market, which the Company reflects as Financial Instruments Owned and Pledged as Collateral at Fair Value on the Consolidated Statements of Financial Condition , or by entering into reverse repurchase agreements with unrelated third parties.

The Company accounts for these repurchase and reverse repurchase agreements as collateralized financing transactions, which are carried at their contract amounts, which approximate fair value given that the contracts mature the following business day.

The Company records a liability on its Consolidated Statements of Financial Condition in relation to repurchase transactions executed with clients as Securities Sold Under Agreements to Repurchase.

The Company records as assets on its 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 1.0 year , as of December 31, 2019 , and are pledged as collateral against repurchase agreements.

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

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

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

The daily risk measure is Value at Risk ("VaR"), which is a statistical measure, at a 98 % confidence level, of the potential daily losses from adverse market movements in an ordinary market environment based on a historical simulation using the prior year's historical data.

ECB's Risk Management Committee (the "Committee") has established a policy to maintain VaR at levels below 0.1 % of the value of the portfolio.

If at any point in time the threshold is exceeded, ECB personnel are alerted by an automated interface with ECB's trading systems and begin to make adjustments in the portfolio in order to mitigate the risk and bring the portfolio in compliance.

Concurrently, ECB personnel must notify the Committee of the variance and the actions taken to reduce the exposure to loss.

In addition to monitoring VaR, ECB periodically performs discrete 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.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

As of December 31, 2019 and 2018 , a summary of the Company's assets, liabilities and collateral received or pledged related to these transactions was as follows:

Market Value of

Collateral Received

Market Value of

The Company's ECB business was sold in December 2020.

See Note 5 for further information.

Prior to its sale, the Company, through its ECB business, entered into repurchase agreements with clients seeking overnight money market returns whereby ECB transferred to the clients Mexican government securities in exchange for cash and concurrently agreed to repurchase the securities at a future date for an amount equal to the cash exchanged plus a stipulated premium or interest factor.

ECB deployed the cash received from, and acquired the securities deliverable to, clients under these repurchase arrangements by purchasing securities in the open market, which the Company reflected as Financial Instruments Owned and Pledged as Collateral at Fair Value on the Consolidated Statements of Financial Condition, or by entering into reverse repurchase agreements with unrelated third parties.

The Company accounted for these repurchase and reverse repurchase agreements as collateralized financing transactions, which were carried at their contract amounts, which approximated fair value given that the contracts matured the following business day.

The Company recorded a liability on its Consolidated Statements of Financial Condition in relation to repurchase transactions executed with clients as Securities Sold Under Agreements to Repurchase.

The Company recorded as assets on its Consolidated Statements of Financial Condition, Financial Instruments Owned and Pledged as Collateral at Fair Value (where the Company had 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 had acquired the securities deliverable to clients under these repurchase agreements by entering into reverse repurchase agreements with unrelated third parties).

These Mexican government securities were pledged as collateral against repurchase agreements.

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

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

There were no remaining assets or liabilities related to collateralized financing activities as of December 31, 2020.

See Note 5 for further information.

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

December 31, 2019

Balance Market Value of

Collateral Received

1 unchanged sentence

Securities Purchased Under Agreements to Resell 13,566 $ 13,572

Total Assets $ 25,997

Securities Sold Under Agreements to Repurchase $ ( 26,000 ) $ ( 25,992 )

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 10 – Leases

4 unchanged sentences

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

Occupancy and Equipment Rental on the Consolidated Statements of Operations includes operating lease cost for office space of $ 41,257 and variable lease cost of $ 8,474 for the year ended December 31, 2019.

Occupancy and Equipment Rental on the Consolidated Statements of Operations includes operating lease cost for office space of $ 48,561 and $ 41,257 for the years ended December 31, 2020 and 2019, respectively, and variable lease cost of $ 7,490 and $ 8,474 for the years ended December 31, 2020 and 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 $ 5,536 and $ 5,502 , which are secured by cash that is included in Other Assets on the Consolidated Statements of Financial Condition as of December 31, 2019 and 2018 , 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 Consolidated Statements of Operations includes operating lease cost for office equipment of $ 4,107 for the year ended December 31, 2019.

In conjunction with the lease of office space, the Company has entered into letters of credit in the amounts of $ 5,550 and $ 5,536 , as of December 31, 2020 and 2019, respectively, which are secured by cash that is included in Other Assets on the 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 Consolidated Statements of Operations includes operating lease cost for office equipment of $ 4,709 and $ 4,107 for the years ended December 31, 2020 and 2019, respectively.

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

2 unchanged sentences

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

The Company incurred net operating cash outflows of $ 20,175 for the year ended December 31, 2019 related to its operating leases, which were net of cash received from lease incentives of $ 18,771 .

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company incurred net operating cash outflows of $ 30,709 and $ 20,175 for the years ended December 31, 2020 and 2019, respectively, related to its operating leases, which was net of cash received from lease incentives of $ 14,732 and $ 18,771 for the years ended December 31, 2020 and 2019, respectively.

Upon adoption of ASC 842 on January 1, 2019, the Company recorded Right-of-Use Assets on its statement of financial condition of $ 180,935 .

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

For the Year Ended

December 31, 2019

For the Years Ended December 31,

New Right-of-Use Assets obtained in exchange for new operating lease liabilities $ 112,215 $ 57,004

December 31, 2019

Weighted-average remaining lease term - operating leases

Weighted-average remaining lease term - operating leases 11.4 years 10.5 years

Weighted-average discount rate - operating leases 4.08 % 4.38 %

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

2021 $ 53,294

Thereafter 245,702

Total lease payments 451,060

5 unchanged sentences

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

The Company anticipates that it will take possession of these spaces between 2020 and 2023 with lease terms of 1 to 16 years.

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 the Company has taken possession.

The additional future payments under these arrangements are $ 195,651 as of December 31, 2020.

As of December 31, 2018 , the approximate aggregate minimum future payments required on the operating leases, net of rent abatement and certain other rent credits, under legacy U.S.

GAAP (ASC 840), were as follows:

Note 11 – Investments

1 unchanged sentence

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

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company's investments in ABS, Atalanta Sosnoff, Luminis and G5 are in voting interest entities.

The Company's share of earnings (losses) on these investments (through December 31, 2017 for G5, the date the Company exchanged all of its outstanding equity interests for debentures of G5) is included within Income from Equity Method Investments on the Consolidated Statements of Operations .

The Company's investments in ABS, Atalanta Sosnoff and Luminis are in voting interest entities.

The Company's share of earnings (losses) on these investments is included within Income from Equity Method Investments on the Consolidated Statements of Operations.

The Company also has investments in private equity partnerships which consist of investment interests in private equity funds which are voting interest entities.

2 unchanged sentences

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

ABS $ 41,439 $ 40,052

Atalanta Sosnoff 11,950 12,300

Luminis 6,119 4,923

Total $ 59,508 $ 57,275

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

Effective as of September 1, 2018, ABS Investment Management, LLC underwent an internal reorganization pursuant to which the Company contributed its ownership interest in ABS Investment Management, LLC to ABS in exchange for ownership interests in ABS Investment Management Holdings LP and ABS Investment Management GP LLC.

Effective as of September 1, 2018, ABS Investment Management, LLC underwent an internal

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

reorganization pursuant to which the Company contributed its ownership interest in ABS Investment Management, LLC to ABS in exchange for ownership interests in ABS Investment Management Holdings LP and ABS Investment Management GP LLC.

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.

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This investment resulted in earnings of $ 1,546 , $ 916 and $ 518 for the years ended December 31, 2020, 2019 and 2018, respectively, included within Income from Equity Method Investments on the Consolidated Statements of Operations.

In 2010, the Company made an investment accounted for under the equity method of accounting in G5.

During the second quarter of 2017, following a sustained period of economic and political instability in Brazil and after concluding that the expected recovery in the M&A markets in Brazil would be delayed for the foreseeable future, G5 experienced a decline in previously forecasted advisory backlog and as such, management of G5 revised their revenue forecast.

As a result, the Company performed an assessment of the carrying value of its equity interest in G5 for other-than-temporary impairment in accordance with ASC 323-10, "Investments - Equity Method and Joint Ventures." In determining the fair value of its investment, the Company utilized both a market multiple approach and a discounted cash flow methodology based on the adjusted cash flows from operations.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

As a result of the above analysis, the Company determined that the fair value of its investment in G5 was less than its carrying value and concluded this loss in value was other-than-temporary.

Accordingly, the Company recorded an impairment charge in the Investment Banking segment of $ 14,400 , which is included in Special Charges on the Consolidated Statement of Operations for the year ended December 31, 2017, resulting in a decrease in its investment in G5 to its fair value of $ 11,555 as of May 31, 2017.

This investment resulted in a loss of ($ 144 ) for the year ended December 31, 2017, included within Income from Equity Method Investments on the Consolidated Statements of Operations.

On December 31, 2017, the Company exchanged all of its outstanding equity interests in G5 for debentures of G5.

See Debt Security Investment below for further information.

The Company allocates the purchase price of its equity method investments, in part, to the inherent finite-lived identifiable intangible assets of the investees.

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Private Equity Funds

The Company's investments related to private equity partnerships and associated entities include investments in Evercore Capital Partners II, L.P.

("ECP II"), Glisco Partners II, L.P.

The Company's investments related to private equity partnerships and associated entities include investments in Glisco Partners II, L.P.

("Glisco II"), Glisco Partners III, L.P.

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During 2019, the Company made an investment of $ 3,015 in Trilantic VI.

On December 31, 2014, ECP II was terminated.

ECP II has been fully distributed as of December 31, 2019 .

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

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Net realized and unrealized losses on private equity fund investments were ($ 1,388 ), ($ 790 ) and ($ 397 ) for the years ended December 31, 2020, 2019 and 2018, respectively.

During the year ended December 31, 2018 , Glisco II, Trilantic IV and Trilantic V made distributions of $ 2,059 , $ 194 and $ 1,549 , respectively.

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

As of December 31, 2019 , there was no previously distributed carried interest received from the funds that was subject to repayment.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

As of December 31, 2020, $ 368 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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During 2020, $ 29 and $ 110 of this investment was allocated to Trilantic Fund V and VI, respectively.

From 2010 to 2018, $ 4,980 and $ 1,178 of this investment was allocated to Trilantic Fund V and IV, 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 $ 6,623 and $ 6,762 as of December 31, 2020 and 2019, respectively.

1 unchanged sentence

The Company also has a $ 12,000 commitment to invest in Trilantic Fund VI, of which $ 9,054 was unfunded at December 31, 2020.

The Company funded $ 2,836 of the commitment to invest in Trilantic Fund VI during the year ended December 31, 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 December 31, 2019 and 2018 .

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 $ 693 as of December 31, 2019 .

In certain instances, the Company receives equity securities in private companies in exchange for advisory services.

These investments, which had a balance of $ 683 and $ 1,772 as of December 31, 2020 and 2019, respectively, are accounted for at their cost minus impairment, if any, plus or minus changes resulting from observable price changes.

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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This investment had a balance of $ 387 and $ 899 as of December 31, 2020 and 2019, respectively.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 12 – Fair Value Measurements

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Investments measured and reported at fair value are classified and disclosed in one of the following categories:

Level I – Quoted prices are available in active markets for identical investments as of the reporting date.

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

Level 1 – Quoted prices are available in active markets for identical investments as of the reporting date.

The type of investments included in Level 1 include listed equities, listed derivatives and treasury bills.

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

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

The estimated fair values of the Corporate Bonds, Municipal Bonds and Other Debt Securities held at December 31, 2019 and 2018 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.

Level 2 – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies.

The estimated fair values of corporate bonds, municipal bonds and other debt securities held at December 31, 2020 and 2019 are based on prices provided by external pricing services.

Level 3 – 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.

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December 31, 2020

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

Level 1 Level 2 Level 3 Total

Debt Securities Carried by Broker-Dealers $ 550,026 $ — $ — $ 550,026

Other Debt and Equity Securities (1)

410,456 — — 410,456

Investment Funds 107,354 — — 107,354

Financial Instruments Owned and Pledged as Collateral at Fair Value

Total Assets Measured At Fair Value $ 1,067,836 $ — $ — $ 1,067,836

December 31, 2019

Corporate Bonds, Municipal Bonds and Other Debt Securities Carried by Broker-Dealers (2)

Level 1 Level 2 Level 3 Total

Debt Securities Carried by Broker-Dealers $ 168,650 $ 58,705 $ — $ 227,355

Other Debt and Equity Securities (1)

111,823 6,449 — 118,272

Investment Funds 66,513 — — 66,513

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(1) Includes $ 7,000 and $ 2,990 of treasury bills and notes and municipal bonds classified within Cash and Cash Equivalents on the Consolidated Statements of Financial Condition as of December 31, 2020 and 2019, respectively.

Includes $ 24,415 of treasury bills, municipal bonds and commercial paper classified within Cash and Cash Equivalents on the Consolidated Statement of Financial Condition as of December 31, 2018 .

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

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The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

The Company had no transfers between fair value levels during the years ended December 31, 2019 and 2018 .

During the fourth quarter of 2019, the Company determined that the fair value of the Institutional Asset Management reporting unit was $ 8,777 .

The fair value of the reporting unit was estimated by utilizing a discounted cash flow methodology based on adjusted cash flows from operations.

Goodwill is measured at fair value on a non-recurring basis as a Level III asset.

Goodwill is measured at fair value on a non-recurring basis as a Level 3 asset.

See Note 5 for further information.

The carrying amount and estimated fair value of the Company's financial instrument assets and liabilities, which are not measured at fair value on the Consolidated Statements of Financial Condition , are listed in the tables below.

EVERCORE INC.

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

December 31, 2020

Estimated Fair Value

Carrying Estimated Fair Value

Amount Level 1 Level 2 Level 3 Total

Financial Assets:

Cash and Cash Equivalents $ 822,598 $ 822,598 $ — $ — $ 822,598

Certificates of Deposit

Debt Security Investment 7,385 — — 7,385 7,385

Securities Purchased Under Agreements to Resell

Receivables (1)

439,321 — 434,083 — 434,083

Contract Assets (2)

34,610 — 34,052 — 34,052

Receivable from Employees and Related Parties 23,593 — 23,593 — 23,593

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Accounts Payable and Accrued Expenses $ 37,961 $ — $ 37,961 $ — $ 37,961

Securities Sold Under Agreements to Repurchase

Payable to Employees and Related Parties 24,047 — 24,047 — 24,047

Notes Payable (3)

376,492 — 409,682 — 409,682

December 31, 2019

Estimated Fair Value

Carrying Estimated Fair Value

Amount Level 1 Level 2 Level 3 Total

Financial Assets:

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Receivables (1)

359,909 — 357,047 — 357,047

Contract Assets (2)

34,029 — 33,854 — 33,854

Receivable from Employees and Related Parties 22,416 — 22,416 — 22,416

Closely-held Equity Security

Closely-held Equity Securities 1,772 — — 1,772 1,772

Financial Liabilities:

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Notes Payable 375,062 — 382,274 — 382,274

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

The adoption of ASU 2016-01 in 2018 resulted in the Company prospectively including the fair value of its receivables that are due in excess of one year in the above table.

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

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

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

EVERCORE INC.

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Computer and Technology-related 46,853 46,213

Total 288,404 244,186

Accumulated Depreciation and Amortization ( 139,572 ) ( 117,387 )

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Depreciation and amortization expense for Furniture, Equipment and Leasehold Improvements totaled $ 24,640 , $ 22,946 and $ 17,855 for the years ended December 31, 2020, 2019 and 2018, respectively.

In addition, the Company recognized Special Charges of $ 4,370 and $ 2,058 for the years ended December 31, 2019 and 2018 , respectively, related to the acceleration of depreciation expense for leasehold improvements in conjunction with the expansion of its headquarters in New York.

In addition, the Company recognized Special Charges, Including Business Realignment Costs, of $ 3,320 , $ 4,370 and $ 2,058 for the years ended December 31, 2020, 2019 and 2018, respectively, related to the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of the Company's headquarters in New York and the Company's business realignment initiatives.

See Note 6 for further information.

Note 14 – Notes Payable and Subordinated Borrowings

The Company also recorded $ 480 in Special Charges, Including Business Realignment Costs, on the Consolidated Statement of Operations for the year ended December 31, 2020, for charges related to the impairment of leasehold improvements resulting from the wind-down of the Company's businesses in Mexico.

See Notes 5 and 6 for further information.

Other Assets on the Consolidated Statements of Financial Condition includes capitalized costs associated with cloud computing arrangements of $ 7,033 as of December 31, 2020.

Note 14 – Notes Payable

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

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

The Company intends to use the proceeds from the 2019 Private Placement Notes to fund investments in its business, including facilities and technology, and for other general corporate purposes.

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

Carrying Value (a)

Maturity Date

Effective Annual Interest Rate

Note Maturity Date Effective Annual Interest Rate 2020 2019

Evercore Inc.

4.88 % Series A Senior Notes

3/30/2021 5.16 % $ 37,974 $ 37,873

Evercore Inc.

5.23 % Series B Senior Notes

3/30/2023 5.44 % 66,702 66,581

Evercore Inc.

5.48 % Series C Senior Notes

3/30/2026 5.64 % 47,651 47,595

Evercore Inc.

5.58 % Series D Senior Notes

3/30/2028 5.72 % 16,858 16,842

Evercore Inc.

4.34 % Series E Senior Notes

8/1/2029 4.46 % 74,325 74,282

Evercore Inc.

4.44 % Series F Senior Notes

8/1/2031 4.55 % 59,449 59,422

Evercore Inc.

4.54 % Series G Senior Notes

8/1/2033 4.64 % 39,627 39,613

Evercore Inc.

3.33 % Series H Senior Notes

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

The Company had subordinated borrowings, principally with an executive officer of the Company, due on October 31, 2019.

These borrowings had a coupon of 5.5 % , payable semi-annually.

In March 2018, the Company repaid $ 6,700 of the original borrowings and in May 2018, the Company repaid the remaining $ 99 of the original borrowings.

8/1/2033 3.42 % 33,906 32,854

Total $ 376,492 $ 375,062

Current Portion of Notes Payable ( 37,974 ) —

Notes Payable $ 338,518 $ 375,062

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

As of December 31, 2020, the future payments required on the Notes Payable, including principal and interest, were as follows:

2021 $ 54,883

Thereafter 328,289

Total $ 505,236

Note 15 – Employee Benefit Plans

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The Evercore Plan was formed on February 1, 1996 and subsequently amended.

The Evercore Plan's year ends on December 31 of each year.

The Company, at its sole discretion, determines the amount, if any, of profit to be contributed to the Evercore Plan.

EVERCORE INC.

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

Plan's year ends on December 31 of each year.

The Company, at its sole discretion, determines the amount, if any, of profit to be contributed to the Evercore Plan.

Effective January 1, 2020, the Evercore Plan was amended to provide for a matching contribution from the Company to be made for eligible participants, as defined by the Evercore Plan.

The matching contribution from the Company will be made annually pursuant to a discretionary formula.

The matching contribution will be determined as 100 % of up to 3 % of eligible compensation, defined as salary plus cash bonus compensation, to a maximum of $ 3 per employee.

Catch-up contributions will not be matched.

Participants will vest 100 % in the matching contribution from the Company upon completion of three years of service.

The Company made no contributions to the Evercore Plan for each of the years ended December 31, 2020, 2019 and 2018.

Beginning January 1, 2020, for certain employees, the Company will contribute matching contributions to the Evercore Plan of 100 % of up to 3 % of eligible compensation, defined as salary plus cash bonus compensation, to a maximum of $ 3 per employee.

Evercore Europe Defined Contribution Benefit Plan – Evercore U.K.

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Stockholders' Equity

Dividends – The Company's Board of Directors declared on January 28, 2020 , a quarterly cash dividend of $ 0.58 per share, to the holders of record of shares of Class A Shares as of February 28, 2020 , which will be paid on March 13, 2020 .

Dividends – The Company's Board of Directors declared on February 2, 2021, a quarterly cash dividend of $ 0.61 per share, to the holders of record of Class A Shares as of February 26, 2021, which will be paid on March 12, 2021.

During the year ended December 31, 2020, the Company declared and paid dividends of $ 2.35 per share, totaling $ 95,226 , and accrued deferred cash dividends on unvested RSUs, totaling $ 13,734 .

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During the year ended December 31, 2019, the Company declared and paid dividends of $ 2.24 per share, totaling $ 89,407 , and accrued deferred cash dividends on unvested RSUs, totaling $ 14,642 .

Treasury Stock – During the year ended December 31, 2019 , the Company purchased 1,039 Class A Shares primarily from employees at market values ranging from $ 71.11 to $ 96.22 per share (at an average cost per share of $ 89.15 ), primarily for the net settlement of stock-based compensation awards, and 2,360 Class A Shares at market values ranging from $ 73.18 to $ 92.33 per share (at an average cost per share of $ 80.69 ) pursuant to the Company's share repurchase program.

The aggregate 3,399 Class A Shares were purchased at an average cost per share of $ 83.28 , and the result of these purchases was an increase in Treasury Stock of $ 283,081 on the Company's Consolidated Statement of Financial Condition as of December 31, 2019 .

During the year ended December 31, 2018 , the Company purchased 1,085 Class A Shares primarily from employees at values ranging from $ 79.47 to $ 115.30 per share (at an average cost per share of $ 99.64 ), primarily for the net settlement of stock-based compensation awards, and 2,021 Class A Shares at market values ranging from $ 80.05 to $ 112.30 per share (at an average cost per share of $ 89.81 ) pursuant to the Company's share repurchase program.

During the year ended December 31, 2019, the Company also paid deferred cash dividends of $ 7,396 .

Treasury Stock – During the year ended December 31, 2020, the Company purchased 1,068 Class A Shares from employees at market values ranging from $ 38.23 to $ 104.38 per share (at an average cost per share of $ 76.51 ), 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 1,922 Class A Shares were purchased at an average cost per share of $ 76.25 , and the result of these purchases was an increase in Treasury Stock of $ 146,559 on the Company's Consolidated Statement of Financial Condition as of December 31, 2020.

LP Units – During the year ended December 31, 2019 , 353 LP Units were exchanged for Class A Shares, resulting in an increase to Common Stock and Additional Paid-In-Capital of $ 3 and $ 15,138 , respectively, on the Company's Consolidated

During the year ended December 31, 2019, the Company purchased 1,039 Class A Shares primarily from employees at market values ranging from $ 71.11 to $ 96.22 per share (at an average cost per share of $ 89.15 ), primarily for the net settlement of stock-based compensation awards, and 2,360 Class A Shares at market values ranging from $ 73.18 to $ 92.33 per share (at an average cost per share of $ 80.69 ) pursuant to the Company's share repurchase program.

The aggregate 3,399 Class A Shares were purchased

EVERCORE INC.

1 unchanged sentence

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

Statement of Financial Condition as of December 31, 2019 .

at an average cost per share of $ 83.28 and the result of these purchases was an increase in Treasury Stock of $ 283,081 on the Company's Consolidated Statement of Financial Condition as of December 31, 2019.

LP Units – During the year ended December 31, 2020, 899 LP Units were exchanged for Class A Shares, resulting in an increase to Common Stock and Additional Paid-In-Capital of $ 9 and $ 37,674 , respectively, on the Company's Consolidated Statement of Financial Condition as of December 31, 2020.

During the year ended December 31, 2019, 353 LP Units were exchanged for Class A Shares, resulting in an increase to Common Stock and Additional Paid-In-Capital of $ 3 and $ 15,138 , respectively, on the Company's Consolidated Statement of Financial Condition as of December 31, 2019.

1 unchanged sentence

Accumulated Other Comprehensive Income (Loss) – As of December 31, 2020, Accumulated Other Comprehensive Income (Loss) on the Company's 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 ($ 5,287 ) and ($ 4,471 ), respectively.

The application of ASU 2016-01 resulted in the reclassification of $ 2,229 of cumulative unrealized losses, net of tax, on Investment Securities in Accumulated Other Comprehensive Income (Loss) to Retained Earnings on the Consolidated Statement of Financial Condition as of January 1, 2018.

The G5 transaction in 2017 resulted in the reclassification of $ 16,266 of cumulative foreign currency translation losses in Accumulated Other Comprehensive Income (Loss) on the Consolidated Statement of Financial Condition to Other Revenue, Including Interest and Investments, on the Consolidated Statement of Operations for the year ended December 31, 2017.

The substantially complete liquidation of the Company's businesses in Mexico resulted in the reclassification of $ 20,337 of cumulative foreign currency translation losses from Accumulated Other Comprehensive Income (Loss) on the Consolidated Statement of Financial Condition to Other Revenue, Including Interest and Investments, on the Consolidated Statement of Operations for the year ended December 31, 2020.

See Note 5 for further information.

Note 17 – Noncontrolling Interest

Noncontrolling Interest recorded in the consolidated financial statements relates to the following approximate interests in certain of the Company's consolidated subsidiaries, which are not owned by the Company.

Noncontrolling Interest recorded in the consolidated financial statements of the Company relates to the following approximate interests in certain consolidated subsidiaries, which are not owned by the Company.

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.

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

2020 2019 2018

Evercore LP 11 % 12 % 11 %

26 % 30 % 43 %

Private Capital Advisory L.P.

Real Estate Capital Advisory ("RECA") (3)

38 % 38 % 38 %

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

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

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For the Years Ended December 31,

2020 2019 2018

Beginning balance $ 256,534 $ 249,819 $ 252,404

Comprehensive Income (Loss):

Comprehensive Income:

Net Income Attributable to Noncontrolling Interest 62,106 56,225 65,611

1 unchanged sentence

Total Comprehensive Income 69,472 56,738 65,408

Evercore LP Units Purchased or Converted into Class A Shares

Amortization and Vesting of LP Units/Interests

Evercore LP Units Exchanged for Class A Shares ( 37,683 ) ( 15,142 ) ( 46,594 )

Amortization and Vesting of LP Units 14,618 27,890 19,860

Distributions to Noncontrolling Interests ( 44,915 ) ( 54,706 ) ( 41,413 )

4 unchanged sentences

Other Comprehensive Income – Other Comprehensive Income (Loss) attributed to Noncontrolling Interest includes Unrealized Gain (Loss) on Securities and Investments, net, of ($ 223 ), ($ 82 ) and ($ 43 ) for the years ended December 31, 2020, 2019 and 2018, respectively, and Foreign Currency Translation Adjustment Gain (Loss), net, of $ 561 , $ 595 and ($ 160 ) for the years ended December 31, 2020, 2019 and 2018, respectively.

The substantially complete liquidation of the Company's businesses in Mexico resulted in the reclassification of $ 7,028 of cumulative foreign currency translation losses from Noncontrolling Interest on the Consolidated Statement of Financial Condition to Other Revenue, Including Interest and Investments, on the Consolidated Statement of Operations for the year ended December 31, 2020.

See Note 5 for further information.

LP Units Exchanged – During the year ended December 31, 2020, 899 LP Units were exchanged for Class A Shares.

This resulted in a decrease to Noncontrolling Interest of $ 37,683 and an increase to Additional-Paid-In-Capital of $ 37,674 on the Company's Consolidated Statement of Financial Condition as of December 31, 2020.

See Note 16 for further information.

Interests Issued – During 2019, 32 Class A LP Units were issued, primarily related to the purchase of EWM Class A Units.

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During 2018, in conjunction with the establishment of the RECA business, certain employees of that business purchased Class R Interests, at fair value, in Private Capital Advisory L.P., resulting in an increase to Noncontrolling Interest of $ 770 on the Company's Consolidated Statement of Financial Condition as of December 31, 2018.

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

Interests Purchased – During 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 year ended December 31, 2020 and through the issuance of notes payable of $ 851 , included within Other Current Liabilities on the Consolidated Statement of Financial Condition as of December 31, 2020).

This purchase resulted in a decrease to Noncontrolling Interest of $ 138 and a decrease to Additional Paid-In-Capital of $ 1,565 , on the Company's Consolidated Statement of Financial Condition as of December 31, 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 Consolidated Statement of Financial Condition as of December 31, 2019.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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 ).

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This purchase resulted in a decrease to Noncontrolling Interest of $ 298 and a decrease to Additional Paid-In-Capital of $ 25,227 on the Company's Consolidated Statement of Financial Condition as of December 31, 2018.

On March 3, 2017, the Company purchased, at fair value, an additional 13 % of the Private Capital Advisory L.P.

Common Interests for $ 7,071 , and on December 11, 2017, the Company purchased, at fair value, an additional 1 % of the Private Capital Advisory L.P.

Common Interests for $ 1,429 .

These purchases resulted in a decrease to Noncontrolling Interest of $ 281 and a

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

decrease to Additional Paid-In-Capital of $ 8,219 on the Company's Consolidated Statements of Financial Condition as of December 31, 2017 .

During the year ended December 31, 2017 , the Company purchased 32 LP Units and certain other rights from noncontrolling interest holders, resulting in a decrease to Noncontrolling Interest of $ 2,523 on the Company's Consolidated Statement of Financial Condition as of December 31, 2017 .

In addition, LP Units were exchanged for Class A Shares during the years ended December 31, 2019, 2018 and 2017 , respectively.

In addition, LP Units were exchanged for Class A Shares during the years ended December 31, 2020, 2019 and 2018.

See Note 16 for further information.

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For the Years Ended December 31,

2020 2019 2018

Basic Net Income Per Share Attributable to Evercore Inc.

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common shareholders $ 350,574 $ 297,436 $ 377,240

Noncontrolling interest related to the assumed exchange of LP Units for Class A Shares

Associated corporate taxes related to the assumed elimination of Noncontrolling Interest described above

Noncontrolling interest related to the assumed exchange of LP Units for Class A Shares (b) (b) (b)

Associated corporate taxes related to the assumed elimination of Noncontrolling Interest described above (b) (b) (b)

Diluted net income attributable to Evercore Inc.

common shareholders

$ 350,574 $ 297,436 $ 377,240

Weighted average Class A Shares outstanding, including vested RSUs 40,553 39,994 40,595

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common shareholders $ 8.22 $ 6.89 $ 8.33

The Company has outstanding Class J LP Units, which convert into Class E LP Units and ultimately become exchangeable into Class A Shares on a one -for-one basis.

During the years ended December 31, 2019 , 2018 and 2017 , 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.

In computing this adjustment, the Company assumes that all Class J LP Units are converted into Class A Shares.

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

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

See Note 19 for further information.

During the years ended December 31, 2020, 2019 and 2018, the Class J LP Units were dilutive and consequently the effect of their exchange into Class A Shares has been included in the

EVERCORE INC.

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

The Company also 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.

calculation of diluted net income per share attributable to Evercore Inc.

common shareholders under the if-converted method.

In computing this adjustment, the Company assumes that all Class J LP Units are converted into Class A Shares.

(b) 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 years ended December 31, 2020, 2019 and 2018, 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.

7 unchanged sentences

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

The Company has outstanding Class I-P Units which are contingently exchangeable into Class I LP Units, and ultimately Class A Shares, and outstanding Class K-P Units which are contingently exchangeable into Class K LP Units, and ultimately Class A Shares, as they are subject to certain performance thresholds being achieved.

The Company previously had outstanding Class G and H LP Interests which were contingently exchangeable into Class E LP Units, and ultimately Class A Shares.

In July 2017, the Company exchanged all of the outstanding Class H LP Interests for a number of Class J LP Units.

As of December 31, 2017 , all of the Class G LP Interests either converted into Class E LP Units or were forfeited pursuant to their performance terms.

See Note 19 for further discussion.

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

For the purposes of calculating diluted net income per share attributable to Evercore Inc.

common shareholders, the Company's Class G and H LP Interests, Class I-P Units and Class K-P Units are included in diluted weighted average Class A Shares outstanding as of the beginning of the period in which all necessary performance conditions have been satisfied.

common shareholders, the Company's Class I-P Units and Class K-P Units are included in diluted weighted average Class A Shares outstanding as of the beginning of the period in which all necessary performance conditions have been satisfied.

If all necessary performance conditions have not been satisfied by the end of the period, the number of shares that are included in diluted weighted average Class A Shares outstanding is based on the number of shares that would be issuable if the end of the reporting period were the end of the performance period.

The Units/Interests 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 years ended December 31, 2019 and 2018 , and 1,624 for the year ended December 31, 2017 .

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 420 for the year ended December 31, 2020 and 400 for each of the years ended December 31, 2019 and 2018.

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

2 unchanged sentences

Note 19 – Share-Based and Other Deferred Compensation

Equities business – In conjunction with the acquisition of the operating businesses of ISI in 2014, the Company issued Evercore LP units and interests which have been treated as compensation, including 710 vested Class E LP Units and an allocation of the value, attributed to post-combination service, of 710 Class E LP Units that vested ratably on October 31, 2015, 2016 and 2017 and became exchangeable into Class A Shares upon vesting, subject to certain liquidated damages and continued employment provisions.

Compensation expense related to Class E LP Units was $ 17,962 for the year ended December 31, 2017 .

The Class E LP Units were fully expensed at December 31, 2017 .

The Company also issued 538 vested and 540 unvested Class G LP Interests, which vested ratably and became exchangeable into Class A Shares of the Company in February 2016, 2017 and 2018 if certain earnings before interest and taxes, excluding underwriting, ("Management Basis EBIT") margin thresholds within a range of 12 % to 16 % , were achieved for the calendar year preceding the date the interests become exchangeable.

In the event of death, disability or termination of employment without cause, unvested Class G LP Interests could be canceled or vest based on determination of expected performance, based on a decision by Management.

As of December 31, 2017 , all of the Class G LP Interests either converted into Class E LP Units or were forfeited pursuant to their performance terms.

In addition, in conjunction with the acquisition of ISI, the Company also issued 2,044 vested and 2,051 unvested Class H LP Interests, which would have vested ratably on February 15, 2018, 2019 and 2020.

Subject to continued employment, the Company's vested Class H LP Interests would have become exchangeable in February 2018, 2019 and 2020, if certain average Management Basis EBIT and Management Basis EBIT margin thresholds, within ranges of $ 8,000 to $ 48,000 and 7 % to 17 % , respectively, were achieved for the three calendar years preceding the date the interests become exchangeable.

In the event of

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

death, disability or termination of employment without cause, unvested Class H LP Interests could be canceled or vest based on determination of expected performance, based on a decision by Management.

In July 2017, the Company exchanged all of the previously outstanding 4,148 Class H LP Interests for 1,012 vested ( 963 of which were subject to certain liquidated damages and continued employment provisions) and 938 unvested Class J LP Units.

These units convert into an equal amount of Class E LP Units, and become exchangeable into Class A Shares of the Company, ratably on February 15, 2018, 2019 and 2020.

These Class J LP Units have the same vesting and delivery schedule, acceleration and forfeiture triggers, and distribution rights as the Class H LP Interests.

Equities business – In conjunction with the acquisition of the operating businesses of ISI in 2014, the Company issued Evercore LP units and interests which have been treated as compensation.

In July 2017, the Company exchanged all of the previously outstanding 4,148 Class H limited partnership interests of Evercore LP ("Class H LP Interests") for 1,012 vested ( 963 of which were subject to certain liquidated damages and continued employment provisions) and 938 unvested Class J LP Units.

These units converted into an equal amount of Class E LP Units, and became exchangeable into Class A Shares of the Company, ratably on February 15, 2018, 2019 and 2020.

These Class J LP Units had the same vesting and delivery schedule, acceleration and forfeiture triggers, and distribution rights as the Class H LP Interests.

In connection with this exchange, one share of Class B common stock has been issued to each holder of Class J LP Units, which entitles each holder to one vote on all matters submitted generally to holders of Class A and Class B common stock for each Class E LP Unit and Class J LP Unit held.

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 is expensing 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.

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 , $ 18,101 and $ 15,054 for the years ended December 31, 2020, 2019 and 2018, respectively.

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

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

Based on Evercore ISI's results for the year ended December 31, 2017 , as well as the Company's revised outlook for the Evercore ISI business, the Company determined that the achievement of the remaining performance thresholds for certain of the Class G LP Interests was no longer probable at December 31, 2017 .

Prior to the exchange into Class J LP Units in 2017 , the Company had determined that the achievement of the remaining performance thresholds for certain of the Class H LP Interests was probable at June 30, 2017, but at a lower assumed performance level than previously determined.

These determinations resulted in previously recognized expense of $ 26,224 for certain of the Class G and H LP Interests being reversed during the first quarter of 2017 .

The determination assumed a Management Basis EBIT margin of 11.7 % and an annual Management Basis EBIT of $ 26,904 being achieved in 2017 and a Management Basis EBIT margin of 14.0 % and an annual Management Basis EBIT of $ 34,357 being achieved in 2018 and 2019 for Evercore ISI, which would have resulted in 2,005 Class H LP Interests vesting and becoming exchangeable into Class E LP Units.

Accordingly, $ 12,897 of expense was reversed for the year ended December 31, 2017 for the Class G and H LP Interests.

During the first quarter of 2017, the Company amended the terms of 19 Class E LP Units, 14 Class G LP Interests and 162 Class H LP Interests for an exiting employee.

The amendment resulted in expense, included within compensation expense related to the Class E LP Units and Class G and H LP Interests above, of $ 3,532 for the year ended December 31, 2017, reflecting the reversal of all previous expense related to these awards and the subsequent amortization of the awards at the amended grant date fair value of $ 14,891 .

These awards were amortized ratably through June 30, 2017.

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

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The following table summarizes activity related to the LP Units for the Company's equities business during the year ended December 31, 2020:

Class J LP Units

Number of Units

Grant Date Weighted

Number of Units Grant Date Weighted

Average Fair Value

Unvested Balance at January 1, 2020 223 $ 4,311

Forfeited — —

Vested ( 223 ) ( 4,311 )

Unvested Balance at December 31, 2020 — $ —

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

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

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

These Class I-P Units are segregated into two groups of 200 units each, with share price threshold vesting conditions which are required to exceed a certain level for

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

20 consecutive trading days (which were met as of March 31, 2017).

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

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

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

Compensation expense related to this award was $ 4,619 for each of the years ended December 31, 2019 , 2018 and 2017 .

Compensation expense related to this award was $ 4,632 for the year ended December 31, 2020 and $ 4,619 for each of the years ended December 31, 2019 and 2018.

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 December 31, 2019 ) and continued service through December 31, 2021.

The Company determined the value of the award probable to vest as of December 31, 2019 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 December 31, 2019 to be $ 14,386 and records expense for these units over the service period.

These Class K-P Units may convert into a maximum of 460 Class K LP Units, contingent upon the achievement of certain defined benchmarks and continued service, as described above.

The Company determined the grant date fair value of these awards probable to vest as of December 31, 2020 to be $ 34,684 , related to 403 Class K Units which were probable of achievement, and recognizes expense for these units over the respective service periods.

Compensation expense related to the Class K-P Units was $ 8,920 , $ 3,690 and $ 1,200 for the years ended December 31, 2020, 2019 and 2018, respectively.

As of December 31, 2019 , the total compensation cost not yet recognized related to the Class J LP Units, Class I-P Units and Class K-P Units, including awards which are subject to performance conditions, was $ 25,958 .

As of December 31, 2020, the total compensation cost not yet recognized related to the Class I-P Units and Class K-P Units, including awards which are subject to performance conditions, was $ 21,112 .

The weighted-average period over which this compensation cost is expected to be recognized is 26 months.

8 unchanged sentences

Stock Incentive Plan (the "2016 Plan").

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

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

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

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

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

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

The Amended 2016 Plan, among other things, authorizes an

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

additional 6,000 shares of the Company's Class A Shares.

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

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

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

The total shares available to be granted in the future under the 2016 Plan was 2,872 and 5,349 as of December 31, 2019 and 2018, respectively .

The total shares available to be granted in the future under the Amended 2016 Plan was 7,047 as of December 31, 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.

6 unchanged sentences

2020 Equity Grants.

During 2019 , pursuant to the 2016 Plan, the Company granted employees 2,598 RSUs that are Service-based Awards.

Service-based Awards granted during 2019 had grant date fair values of $ 72.11 to $ 96.22 per share, with an average value of $ 91.04 per share.

During 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 2020 had grant date fair values of $ 44.21 to $ 93.19 per share, with an average value of $ 80.94 per share, for an aggregate fair value of $ 157,508 , and generally vest ratably over four years .

During 2020, 2,715 Service-based Awards vested and 121 Service-based Awards were forfeited.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Compensation expense related to Service-based Awards, including RSUs granted to the Executive Chairman in November 2016, was $ 208,786 for the year ended December 31, 2019 .

Compensation expense related to Service-based Awards was $ 192,070 f or the year ended December 31, 2020.

The following table summarizes activity related to Service-based Awards during the year ended December 31, 2020:

Service-based Awards

Number of Shares

Grant Date Weighted

Number of Shares Grant Date Weighted

Average Fair Value

Unvested Balance at January 1, 2020 6,414 $ 527,456

Granted 1,946 157,508

Forfeited ( 121 ) ( 10,458 )

Vested ( 2,715 ) ( 209,388 )

Unvested Balance at December 31, 2020 5,524 $ 465,118

6 unchanged sentences

During 2019, pursuant to the 2016 Plan, the Company granted employees 2,598 RSUs that are Service-based Awards.

Service-based Awards granted during 2018 had grant date fair values of $ 81.84 to $ 114.80 per share, with an average value of $ 95.01 per share.

Service-based Awards granted during 2019 had grant date fair values of $ 72.11 to $ 96.22 per share, with an average value of $ 91.04 per share, for an aggregate fair value of $ 236,529 .

During 2019, 2,473 Service-based Awards vested and 121 Service-based Awards were forfeited.

Compensation expense related to Service-based Awards, including RSUs granted to the Executive Chairman in November 2016, was $ 171,354 for the year ended December 31, 2018 .

Compensation expense related to Service-based Awards was $ 208,786 for the year ended December 31, 2019.

2018 Equity Grants.

During 2018, pursuant to the 2016 Plan, the Company granted employees 1,968 RSUs that are Service-based Awards.

Service-based Awards granted during 2017 had grant date fair values of $ 69.10 to $ 85.68 per share, with an average value of $ 78.32 per share.

During 2017 , 2,512 Service-based Awards vested and 154 Service-based Awards were forfeited.

Compensation expense related to Service-based Awards, including RSUs granted to the Executive Chairman in November 2016, was $ 156,353 for the year ended December 31, 2017 .

Service-based Awards granted during 2018 had grant date fair values of $ 81.84 to $ 114.80 per share, with an average value of $ 95.01 per share, for an aggregate fair value of $ 186,964 .

During 2018, 2,523 Service-based Awards

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

vested and 70 Service-based Awards were forfeited.

Compensation expense related to Service-based Awards was $ 171,354 for the year ended December 31, 2018.

Deferred Cash

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

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

The Company granted $ 181,165 , $ 93,366 , $ 82,592 and $ 3,750 of deferred cash awards pursuant to the deferred cash compensation program during the years ended December 31, 2020, 2019, 2018 and 2017, respectively.

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

Compensation expense related to the Company's deferred cash compensation program was $ 112,216 , $ 66,374 and $ 36,443 for the years ended December 31, 2020, 2019 and 2018, respectively.

As of December 31, 2020, the Company expects to pay an aggregate of $ 315,862 related to the Company's deferred cash compensation program at various dates through 2024 and total compensation expense related to these awards not yet recognized was $ 182,542 .

The weighted-average period over which this compensation cost is expected to be recognized is 28 months.

Amounts due pursuant to this program are expensed over the service period of the award and are reflected in Accrued Compensation and Benefits, a component of current liabilities, on the Consolidated Statement of Financial Condition as of December 31, 2020.

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

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

1 unchanged sentence

These awards vest in five equal installments over the period ending June 30, 2022, subject to continued employment.

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

Compensation expense related to deferred cash awards was $ 93,201 , $ 58,430 and $ 24,677 for the years ended December 31, 2019, 2018 and 2017 , respectively.

As of December 31, 2019 , the total compensation cost related to deferred cash awards not yet recognized was $ 127,242 .

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

Compensation expense related to other deferred cash awards was $ 12,897 , $ 26,827 and $ 21,987 for the years ended December 31, 2020, 2019 and 2018, respectively.

As of December 31, 2020 , the total compensation cost related to other defe rred cash awards not yet recognized was $ 16,555 .

The weighted-average period over which this compensation cost is expected to be recognized is 19 months.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

2021 Equity and Deferred Cash Grants

During the first quarter of 2020, as part of the 2019 bonus awards, the Company granted to certain employees approximately 1,900 unvested RSUs pursuant to the 2016 Plan with a grant date fair value of $ 81.53 per share.

During the first quarter of 2021, as part of the 2020 bonus awards, the Company granted to certain employees approximately 2,000 unvested RSUs pursuant to the Amended 2016 Plan, with a grant date fair value of approximately $ 232,000 .

These awards will generally vest over four years .

In addition, during the first quarter of 2020, the Company granted approximately $ 179,000 of deferred cash to certain employees which is pursuant to the deferred cash compensation program.

In addition, during the first quarter of 2021, the Company granted approximately $ 99,000 of deferred cash compensation to certain employees, principally pursuant to the deferred cash compensation program.

These awards will generally vest over four years .

1 unchanged sentence

The Company's Long-term Incentive Plan provides for incentive compensation awards to Advisory Senior Managing Directors, excluding executive officers of the Company, who exceed defined benchmark results over four-year performance periods beginning January 1, 2013 (the "2013 Long-term Incentive Plan") and January 1, 2017 (the "2017 Long-term Incentive Plan").

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

The 2017 Long-term Incentive Plan, which aggregates $ 97,353 of long-term liabilities on the Consolidated Statement of Financial Condition as of December 31, 2019 , 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 2013 Long-term Incentive Plan was paid in cash installments in 2017, 2018 and 2019.

The 2017 Long-term Incentive Plan, which aggregate $ 48,631 of current liabilities and $ 70,560 of long-term liabilities on the Consolidated Statement of Financial Condition as of December 31, 2020, is due to be paid, in cash or Class A Shares, at the Company's discretion, in three equal installments in the first quarter of 2021, 2022 and 2023, subject to employment at the time of payment.

The performance period for the 2017 Long-term Incentive Plan ended on December 31, 2020.

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.

The compensation expense related to these awards was $ 31,931 , $ 42,745 and $ 31,923 for the years ended December 31, 2019, 2018 and 2017 , respectively.

In conjunction with this plan, the Company distributed cash payments of $ 19,516 , $ 4,532 and $ 34,157 during the years ended December 31, 2019, 2018 and 2017 , respectively.

As of December 31, 2019 , 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 $ 60,441 .

The Company recorded $ 21,808 , $ 31,931 and $ 42,745 of expense for the years ended December 31, 2020, 2019 and 2018,

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

respectively.

The Company distributed cash payments of $ 19,516 and $ 4,532 during the years ended December 31, 2019 and 2018, respectively, related to the 2013 Long-term Incentive Plan.

As of December 31, 2020, the total remaining expense to be recognized for the 2017 Long-term Incentive Plan over the future vesting period ending March 15, 2023 is $ 25,692 .

Employee Loans Receivable

5 unchanged sentences

The total income tax benefit related to share-based compensation arrangements recognized in the Company's Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018 was $ 46,572 , $ 49,251 and $ 39,958 , respectively.

The benefit for 2017 does not reflect the impact of the Tax Cuts and Jobs Act, which was enacted on December 22, 2017.

See Note 22 for further information.

Separation and Transition Benefits

The Company granted separation benefits to certain employees, resulting in expense included in Employee Compensation and Benefits within the Investment Banking segment of approximately $ 8,145 for the year ended December 31, 2019.

This is comprised of expense related to cash separation benefits of $ 6,178 and expense related to the acceleration of the amortization of share-based payments of $ 1,967 .

In conjunction with these arrangements, the Company distributed cash payments of $ 6,035 for the year ended December 31, 2019.

The Company granted separation benefits to certain employees, resulting in expense included in Employee Compensation and Benefits of approximately $ 9,420 and $ 6,655 for the years ended December 31, 2018 and 2017, respectively.

During 2020, the Company completed a review of operations focused on markets, sectors and people which 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, generated reductions of approximately 8 % of the Company's headcount.

In conjunction with the employment reductions, for the years ended December 31, 2020 and 2019, the Company incurred expenses related to separation benefits, stay arrangements and accelerated deferred cash compensation (together, the "Termination Costs") of $ 30,340 and $ 1,578 , respectively, and the acceleration of the amortization of share-based payments previously granted to affected employees of $ 10,916 and $ 1,272 (related to 156 and 22 RSUs), respectively, each recorded in Special Charges, Including Business Realignment Costs, primarily within the Investment Banking segment, on the Company's Consolidated Statements of Operations.

In conjunction with these arrangements, the Company distributed cash payments of $ 26,492 and $ 377 for the years ended December 31, 2020 and 2019, respectively.

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 $ 8,145 and $ 9,420 for the years ended December 31, 2019 and 2018, respectively.

This is comprised of expense related to Termination Costs of $ 6,178 and $ 6,190 , respectively, and expense related to the acceleration of the amortization of share-based payments of $ 1,967 and $ 3,230 , respectively, for the years ended December 31, 2019 and 2018.

In conjunction with these arrangements, the Company distributed cash payments of $ 6,035 and $ 8,565 for the years ended December 31, 2019 and 2018, respectively.

The Company also granted separation and transition benefits to certain employees, resulting in expense included in Special Charges, Including Business Realignment Costs, of $ 2,024 for the year ended December 31, 2018.

See Note 6 for further information.

EVERCORE INC.

1 unchanged sentence

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

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

In conjunction with the employment reductions, the Company is expected to incur costs (including costs related to the acceleration of deferred compensation) of approximately $ 38,000 .

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

Actual results may differ materially and additional charges not currently expected may be incurred in connection with, or as a result of, these employment reductions.

In conjunction with this review, the Company granted separation and transition benefits to certain employees, resulting in expense included in Special Charges primarily within the Investment Banking segment of $ 2,850 for the year ended December 31, 2019.

This is comprised of expense related to separation benefits and accelerated deferred cash compensation (together, "Termination Costs") of $ 1,578 and expense related to the acceleration of the amortization of share-based payments of $ 1,272 .

In conjunction with these arrangements, the Company distributed cash payments of $ 377 for the year ended December 31, 2019.

The following table presents the change in the Company's Termination Costs liability for the year ended December 31, 2019:

Balance at January 1, 2019

The following table presents the change in the Company's Termination Costs liability for the years ended December 31, 2020 and 2019:

For the Years Ended December 31,

Beginning Balance $ 1,151 $ 505

Termination Costs Incurred 30,340 7,756

1 unchanged sentence

Non-Cash Charges ( 410 ) ( 698 )

Balance at December 31, 2019

The Company also granted separation and transition benefits to certain employees, resulting in expense included in Special Charges of $ 2,024 and $ 3,930 for the years ended December 31, 2018 and 2017, respectively.

See Note 6 for further information.

Ending Balance $ 4,589 $ 1,151

Note 20 – Commitments and Contingencies

2 unchanged sentences

Such commitments are satisfied in cash and are generally required to be made as investment opportunities are consummated by the private equity funds.

On February 11, 2010, the Company announced the formation of a strategic alliance to pursue private equity investment opportunities with Trilantic and to collaborate on the future growth of Trilantic's business.

See Note 11 for further information.

Lines of Credit – On June 24, 2016, Evercore Partners Services East L.L.C.

4 unchanged sentences

Drawings under this facility bear interest at the prime rate.

On January 2, 2018, East drew down $ 30,000 on this facility, which was repaid on March 2, 2018.

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

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

East amended this facility on October 30, 2020 such that, among other things, the 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 December 31, 2020.

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

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 December 31, 2020.

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

The facility has a maximum aggregate principal amount of approximately $ 7,920 and is secured by trading securities.

No interest is

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

charged on the intra-day facility.

The overnight facility is charged the Inter-Bank Balance Interest Rate plus 10 basis points.

There have been no significant draw downs on ECB's line of credit since August 10, 2006.

The line of credit is renewable annually.

In addition, EGL's clearing broker provides temporary funding for the settlement of securities transactions.

Tax Receivable Agreement – As of December 31, 2020, the Company estimates the contractual obligations related to the Tax Receivable Agreement to be $ 86,751 .

The Company expects to pay to the counterparties to the Tax Receivable Agreement $ 9,891 within one year or less, $ 20,586 in one to three years, $ 19,572 in three to five years and $ 36,702 after five years.

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

The Company paid $ 2,008 of its commitment for contingent consideration related to its acquisition of Kuna & Co, KG during 2019 .

Other Commitments – 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 years ended December 31, 2020 and 2019, respectively.

At December 31, 2020, the Company had a remaining commitment of $ 274 for contingent consideration related to its acquisition of Kuna & Co.

The Company also had a commitment for contingent consideration related to an arrangement with the former employer of certain RECA employees, which provides 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 also had a commitment 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 recognized expenses of $ 400 and $ 3,971 for the years ended December 31, 2019 and 2018, respectively, in Professional Fees on the Company's Consolidated Statements of Operations pursuant to this arrangement.

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

See Note 5 for further information.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

2020 2019 2018

Cash and Cash Equivalents $ 829,598 $ 633,808 $ 790,590

3 unchanged sentences

The restrictions will lapse when the leases end.

Futures Contracts – In February 2020, the Company entered into four-month futures contracts on a stock index fund with a notional amount of $ 38,908 , and in April 2019, the Company entered into three-month futures contracts on a stock index fund with a notional amount of $ 14,815 , as an economic hedge against the Company's deferred cash compensation program.

These contracts settled in June 2020 and June 2019, respectively.

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 Consolidated Statements of Operations.

The Company had net realized gains (losses) of ($ 3,998 ) and $ 59 for the years ended December 31, 2020 and 2019, respectively.

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 December 31, 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.

These contracts settled in April 2019.

Contingencies

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.

Subject to the foregoing, the Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings (including the matter described below), individually or in the aggregate, the resolution of which would have a material effect on the Company.

Subject to the foregoing, the Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company.

Provisions for losses are established in accordance with ASC 450, " Contingencies" when warranted.

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

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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 scheduled a final hearing for May 20, 2020.

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

Note 21 – Regulatory Authorities

3 unchanged sentences

EGL's regulatory net capital as of December 31, 2020 and 2019 was $ 586,814 and $ 331,510 , respectively, which exceeded the minimum net capital requirement by $ 586,564 and $ 331,260 , respectively.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Certain other non-U.S.

1 unchanged sentence

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

9 unchanged sentences

During 2018, the Company finalized the provisional tax impact.

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

For the years ended December 31, 2019 and 2018, 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.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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 years ended December 31, 2020, 2019 and 2018, no additional income tax expense associated with the GILTI provisions has been recognized.

The following table presents the U.S.

1 unchanged sentence

For the Years Ended December 31,

2020 2019 2018

$ 407,015 $ 359,496 $ 449,171

71,710 32,986 36,589

Income before Income Tax Expense (a)

Net of Noncontrolling Interest.

$ 478,725 $ 392,482 $ 485,760

(a) Net of Noncontrolling Interest.

The components of the provision for income taxes reflected on the Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018 consist of:

For the Years Ended December 31,

2020 2019 2018

Federal $ 73,119 $ 72,712 $ 80,690

Foreign 20,360 6,134 7,360

State and Local 20,848 26,703 24,451

Total Current 114,327 105,549 112,501

Federal 9,640 ( 2,169 ) ( 4,771 )

Foreign 3,290 ( 5,022 ) ( 61 )

State and Local 894 ( 3,312 ) 851

Total Deferred 13,824 ( 10,503 ) ( 3,981 )

Total $ 128,151 $ 95,046 $ 108,520

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

A reconciliation between the federal statutory income tax rate and the Company's effective income tax rate for the years ended December 31, 2020, 2019 and 2018 is as follows:

For the Years Ended December 31,

2020 2019 2018

Reconciliation of Federal Statutory Tax Rates:

4 unchanged sentences

Non-Deductible Expenses (1)

0.7 % 1.6 % 1.2 %

ASU 2016-09 Benefit for Stock Compensation — % ( 2.7 ) % ( 4.2 ) %

Tax Cuts and Jobs Act - Reduction to Tax Receivable Agreement Liability

Tax Cuts and Jobs Act - Primarily Related to the

4 unchanged sentences

(1) Primarily related to non-deductible share-based compensation expense.

In conjunction with the enactment of the Tax Cuts and Jobs Act on December 22, 2017, which reduced income tax rates in the U.S.

in 2018 and in future years, the Company's tax provision for 2017 includes a charge of $ 143,261 , resulting from the estimated re-measurement of net deferred tax assets, which relates principally to temporary differences between book and tax, primarily related to the step-up in basis associated with the exchange of partnership units, deferred compensation, amortization of goodwill and intangible assets and depreciation of fixed assets and leasehold improvements, as well as the write-down of foreign

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

currency related deferred tax assets.

This charge, as well as the reduction in the liability for amounts due pursuant to the Company's tax receivable agreement, resulted in an increase in the effective tax rate of 27.1 percentage points for 2017.

During 2018, the Company finalized the provisional tax impact of the Tax Cuts and Jobs Act resulting in an additional charge of $ 399 , primarily related to the re-measurement of net deferred tax assets.

2 unchanged sentences

ASU 2016-09 requires that the tax deduction 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 be reflected in income tax expense.

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 $ 12,229 , $ 23,350 and $ 24,003 being recognized in the Company's Provision for Income Taxes for the years ended December 31, 2019 , 2018 , and 2017 , respectively, and resulted in a reduction in the effective tax rate of 2.7 , 4.2 and 5.5 percentage points for the years ended December 31, 2019 , 2018 and 2017, respectively.

The effective tax rate for 2019 , 2018 and 2017 also reflects the effect of certain nondeductible expenses, including expenses related to Class E and J LP Units and Class I-P and K-P Units and Class G and H LP Interests, as well as the noncontrolling interest associated with LP Units and other adjustments.

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 reflects an additional tax expense of $ 17 for the year ended December 31, 2020 and an additional tax benefit of $ 12,229 and $ 23,350 for the years ended December 31, 2019 and 2018, respectively, and resulted in a reduction in the effective tax rate of 2.7 and 4.2 percentage points for the years ended December 31, 2019 and 2018, respectively.

The effective tax rate for 2020, 2019 and 2018 also reflects the effect of certain nondeductible expenses, including expenses related to Class E and J LP Units and Class I-P and K-P Units, as well as the noncontrolling interest associated with LP Units and other adjustments.

Due to the enactment of the Tax Cuts and Jobs Act on December 22, 2017, the previous undistributed earnings of certain foreign subsidiaries are subject to a mandatory deemed repatriation tax.

2 unchanged sentences

any additional liability would be immaterial.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the Consolidated Statements of Financial Condition.

5 unchanged sentences

Step up in tax basis due to the exchange of LP Units for Class A Shares (1)

90,157 99,979

Step up in tax basis due to the exchange of LP Units for Class A Shares (2)

46,215 41,286

Operating Lease (3)

80,446 58,497

Other 21,478 20,617

Total Deferred Tax Assets $ 353,262 $ 343,858

1 unchanged sentence

Operating Lease (3)

$ 63,460 $ 46,682

Goodwill, Intangible Assets and Other 12,873 19,012

5 unchanged sentences

(2) Step-up in the tax basis associated with the exchange of LP Units for holders which do not have a tax receivable agreement.

As discussed in Note 3, in 2019, the Company adopted ASU 2016-02 using the modified retrospective approach as of the date of adoption, which resulted in the recognition of operating lease right-of-use assets and lease liabilities.

The $ 27,499 increase in net deferred tax assets from December 31, 2018 to December 31, 2019 was primarily attributable to the net $ 21,278 increase in compensation and benefits, depreciation and amortization, as well as the step-up in basis of the tangible and intangible assets of Evercore LP, as discussed below.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(3) As discussed in Note 2, in 2019, the Company adopted ASC 842 using the modified retrospective approach as of the date of adoption, which resulted in the recognition of operating lease right-of-use assets and lease liabilities.

The $ 10,729 decrease in net deferred tax assets from December 31, 2019 to December 31, 2020 was primarily attributable to the net $ 13,406 decrease in compensation and benefits, depreciation and amortization, as well as the step-up in basis of the tangible and intangible assets of Evercore LP, as discussed below.

In addition, management has weighed both the positive and negative evidence and determined that it was appropriate to establish a valuation allowance of $ 9,494 , primarily related to the substantial liquidation of its operations in Mexico.

See Note 5 for further information.

During 2020, the LP holders exchanged 822 Class A and Class E LP Units for Class A Shares, which resulted in an increase in the tax basis of the tangible and intangible assets of Evercore LP.

The exchange of Class E and certain Class A LP Units resulted in a $ 8,641 step-up in the tax basis of the tangible and intangible assets of Evercore LP and a corresponding increase to Additional Paid-In-Capital on the Company's Consolidated Statement of Financial Condition as of December 31, 2020.

Further, there were no exchanges of such Class A LP Units under the tax receivable agreement that was entered into in 2006 between the Company and the LP Unit holders for the year ended December 31, 2019 .

Further, there was an exchange of 77 Class A LP Units that triggered an additional liability under the Tax Receivable Agreement that was entered into in 2006 between the Company and the LP Unit holders for the year ended December 31, 2020.

The agreement provides for a payment to the LP Unit holders of 85 % of the cash tax savings (if any), resulting from the increased tax benefits from the exchange and for the Company to retain 15 % of such benefits.

Accordingly, Deferred Tax Assets, Amounts Due Pursuant to Tax Receivable Agreements and Additional Paid-In-Capital increased $ 1,568 , $ 1,333 and $ 235 , respectively, on the Company's Consolidated Statement of Financial Condition as of December 31, 2020.

See Note 16 for further discussion.

The Company reported an increase in deferred tax assets of $ 173 associated with changes in Unrealized Gain (Loss) on Investment Securities and a decrease of $ 1,306 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the year ended December 31, 2019 .

The Company reported an increase in deferred tax assets of $ 86 associated with changes in Unrealized Gain (Loss) on Investment Securities and an increase of $ 439 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the year ended December 31, 2018 .

The Company's affiliates generated approximately $ 6,884 of NYC unincorporated business tax credit carryforwards;

a portion were set to expire in the 2019 tax year.

Management has weighed both the positive and negative evidence and determined that it was appropriate to establish a valuation allowance of $ 4,600 , on the amount of credits that are not expected to be realized.

The Company reported an increase in deferred tax assets of $ 458 associated with changes in Unrealized Gain (Loss) on Securities and Investments and a decrease of $ 7,772 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the year ended December 31, 2020.

The Company reported an increase in deferred tax assets of $ 173 associated with changes in Unrealized Gain (Loss) on Securities and Investments and a decrease of $ 1,306 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the year ended December 31, 2019.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

A reconciliation of the changes in tax positions for the years ended December 31, 2020, 2019 and 2018 is as follows:

2020 2019 2018

Beginning unrecognized tax benefit $ 494 $ — $ —

6 unchanged sentences

As of December 31, 2020, there were $ 376 of unrecognized tax benefits that, if recognized, $ 306 would affect the effective tax rate.

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

Related to the unrecognized tax benefits, the Company accrued interest and penalties of $ 59 and $ 2 , respectively, during the year ended December 31, 2020.

In 2020, the Company recognized tax benefits of ($ 42 ) and ($ 3 ) of interest and penalties, respectively, associated with the lapse of the statute of limitations.

As of December 31, 2019, there were $ 494 of unrecognized tax benefits that, if recognized, $ 402 would affect the effective tax rate.

Related to the unrecognized tax benefits, the Company accrued interest and penalties of $ 216 and $ 13 , respectively, during the year ended December 31, 2019.

In 2019, the Company recognized tax benefits of ($ 41 ) and ($ 3 ) of interest and penalties, respectively, associated with the lapse of the statute of limitations.

The Company had no unrecognized tax benefits from January 1, 2018 through December 31, 2018.

8 unchanged sentences

commercial banks and U.S.

investment banks that meet certain rating and capital requirements.

investment banks that meet certain rating and capital requirements, as well as treasury bills.

The Company's foreign subsidiaries maintain substantially all of their Cash and Cash Equivalents in interest bearing accounts at large commercial banking institutions domiciled in their respective countries of operation.

Concentrations of credit risk are limited due to the quality of the Company's clients.

The Company maintains its cash and cash equivalents with financial institutions with high credit ratings.

At times, the Company may maintain deposits in federally insured financial institutions in excess of federally insured ("FDIC") limits or enter into sweep arrangements where banks will periodically transfer a portion of the Company's excess cash position to a money market

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company maintains its cash and cash equivalents, as well as certificates of deposit, with financial institutions with high credit ratings.

However, the Company believes that it is not exposed to significant credit risk due to the financial position of the depository institutions or investment vehicles in which those deposits are held.

As of December 31, 2019 , the Company has securities purchased under agreements to resell of $ 13,566 for which the Company has received collateral with a fair value of $ 13,572 .

Additionally, the Company has securities sold under agreements to repurchase of $ 26,000 , for which the Company has pledged collateral with a fair value of $ 25,992 .

The Company has established risk management procedures to monitor the exposure to concentrations of credit from Securities Purchased Under Agreements to Resell.

The collateral for the receivables is primarily secured by Mexican government bonds and the Company monitors the collateral pledged under these agreements against their contract value from inception to maturity date.

Accounts Receivable consists primarily of advisory fees and expense reimbursements billed to clients.

1 unchanged sentence

Receivables are reported net of any allowance for doubtful accounts.

The Company maintains an allowance for doubtful accounts to provide coverage for probable losses from customer receivables and derives the estimate through specific identification for the allowance for doubtful accounts and an assessment of the client's creditworthiness.

The Company maintains an allowance for doubtful accounts to provide coverage for probable losses from customer receivables and determines the adequacy of the allowance by estimating the probability of loss based on the Company's analysis of historical credit loss experience of the Company's client receivables, and taking into consideration current market conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.

1 unchanged sentence

Receivables that are collected in a period exceeding one year are reflected in Other Assets on the Consolidated Statements of Financial Condition.

EVERCORE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

At December 31, 2020 and 2019, total receivables recorded in Accounts Receivable amounted to $ 368,346 and $ 296,355 , respectively, net of an allowance, and total receivables recorded in Other Assets amounted to $ 70,975 and $ 63,554 , respectively.

3 unchanged sentences

As of December 31, 2019, total contract assets recorded in Other Current Assets and Other Assets amounted to $ 31,525 and $ 2,504 , respectively.

With respect to the Company's Investment Securities portfolio, which is comprised of highly-rated corporate and municipal bonds, treasury bills, exchange-traded funds, mutual funds and equity securities, the Company manages its credit risk exposure by limiting concentration risk and maintaining investment grade credit quality.

As of December 31, 2019 , the Company had Investment Securities of $ 409,150 , of which 84 % were corporate and municipal securities and treasury bills and notes, primarily with S&P ratings ranging from AAA to BB+, and 16 % were equity securities, exchange-traded funds and mutual funds.

With respect to the Company's Investment Securities portfolio, which is comprised of highly-rated corporate and municipal bonds, treasury bills, exchange-traded funds, mutual funds and securities investments, the Company manages its credit risk exposure by limiting concentration risk and maintaining investment grade credit quality.

As of December 31, 2020, the Company had Investment Securities of $ 1,060,836 , of which 90 % were treasury bills and 10 % were equity securities and exchange-traded funds.

Periodically, the Company provides compensation to new and existing employees in the form of loans and/or other cash awards, which include a requirement of either full or partial repayment of these awards based on the terms of their employment agreements with the Company.

5 unchanged sentences

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

On October 18, 2017, the Company completed the sale of the Institutional Trust and Independent Fiduciary business of ETC, which was in the Investment Management segment.

The Company completed the sales of its ECB businesses in 2020.

In addition, in 2020, the Company completed the transition of 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 years ended December 31, 2020, 2019 and 2018 is prepared using the following methodology:

1 unchanged sentence

• Expenses not directly associated with specific segments are allocated based on the most relevant measures applicable, including headcount, square footage and other performance and time-based factors.

• 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.

• 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.

Other Revenue, net, included in each segment's Net Revenues includes the following:

• Interest income and income (losses) earned on investment securities, including our investment funds and futures contracts which are used as an economic hedge against our deferred cash compensation program, certificates of deposit, cash and cash equivalents and on the Company’s debt security investment in G5

• Adjustments to amounts due pursuant to the Company’s tax receivable agreement, subsequent to its initial establishment, related to changes in enacted tax rates

• Gains (losses) resulting from foreign currency fluctuations

• Principal trading and realized and unrealized gains and losses on interests in Private Equity funds which are not managed by the Company

EVERCORE INC.

1 unchanged sentence

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

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.

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.

Other Revenue, net, included in each segment's Net Revenues includes interest income and income (losses) earned on investment securities, including our investment funds which are used as an economic hedge against our deferred cash compensation program, certificates of deposit, cash and cash equivalents and on the Company’s debt security investment in G5, as well as adjustments to amounts due pursuant to the Company’s tax receivable agreement, subsequent to its initial establishment, related to changes in enacted tax rates, and gains (losses) resulting from foreign currency fluctuations, principal trading and realized and unrealized gains and losses on interests in Private Equity funds which are not managed by the Company.

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

• Interest expense associated with the Company’s Notes Payable, subordinated borrowings and lines of credit, as well as revenue and expenses associated with repurchase or resale transactions

Each segment's Operating Expenses include:

2 unchanged sentences

Other Expenses include the following:

Amortization of LP Units/Interests and Certain Other Awards – Includes amortization costs or the reversal of expenses associated with the vesting of Class E LP Units, Class G and H LP Interests and Class J LP Units issued in conjunction with the acquisition of ISI and certain other related awards.

Special Charges – 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, the impairment of goodwill in the Company's Institutional Asset Management reporting unit and separation and transition benefits for certain employees terminated as a result of the Company's review of its operations.

Includes expenses in 2018 related to separation benefits and costs for the termination of certain contracts associated with closing the Company's agency trading platform in the U.K.

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

• Special Charges, Including Business Realignment Costs – Includes the following expenses for the years ended December 31, 2020, 2019 and 2018:

◦ 2020 – Includes expenses related to separation and transition benefits and related costs as a result of the Company's review of its operations and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of the Company's headquarters in New York and the Company's business realignment initiatives, as well as charges related to the impairment of assets resulting from the wind-down of the Company's businesses in Mexico

◦ 2019 – Includes expenses related to the acceleration of depreciation expense for leasehold improvements in conjunction with the expansion of the Company's headquarters in New York, the impairment of goodwill in the Company's Institutional Asset Management reporting unit and separation and transition benefits for certain employees terminated as a result of the Company's review of its operations

◦ 2018 – Includes expenses related to separation benefits and costs for the termination of certain contracts associated with closing the Company's agency trading platform in the U.K.

Expenses in 2017 related to the impairment of goodwill in the Company's Institutional Asset Management reporting unit, the impairment of the Company's former equity method investment in G5, and the transition of certain employees in conjunction with the sale of the Institutional Trust and Independent Fiduciary business of ETC.

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.

• 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, including costs in 2020 associated with the sale of the Company's ECB businesses.

• Fair Value of Contingent Consideration – Includes expense, or the reversal of expense, associated with changes in the fair value of contingent consideration issued to the sellers of certain of the Company's acquisitions.

6 unchanged sentences

For the Years Ended December 31,

2020 2019 2018

Investment Banking

Net Revenues (1)

$ 2,217,386 $ 1,951,795 $ 2,012,023

Operating Expenses 1,637,542 1,485,477 1,448,301

Other Expenses (2)

49,112 33,618 30,366

Operating Income 530,732 432,700 533,356

4 unchanged sentences

Net Revenues (1)

$ 46,519 $ 56,903 $ 52,682

Operating Expenses 50,473 48,645 43,940

Other Expenses (2)

Operating Income

Operating Income (Loss) ( 4,299 ) 5,011 8,721

Income from Equity Method Investments 12,852 10,080 8,776

2 unchanged sentences

Net Revenues (1)

$ 2,263,905 $ 2,008,698 $ 2,064,705

Operating Expenses 1,688,015 1,534,122 1,492,241

Other Expenses (2)

49,457 36,865 30,387

Operating Income 526,433 437,711 542,077

7 unchanged sentences

For the Years Ended December 31,

2020 2019 2018

Investment Banking (A)

$ ( 19,845 ) $ 19,023 $ ( 3,156 )

Investment Management (B)

( 7,878 ) 6,292 4,436

Total Other Revenue, net $ ( 27,723 ) $ 25,315 $ 1,280

Investment Banking Other Revenue, net, includes interest expense on the Notes Payable, subordinated borrowings and lines of credit of $ 12,917 , $ 9,201 and $ 9,960 for the years ended December 31, 2019, 2018 and 2017 , respectively, and includes an estimated gain of $ 77,535 related to a reduction in the liability for amounts due pursuant to the tax receivable agreement and a loss of $ 16,266 related to the release of cumulative foreign exchange losses resulting from the restructuring of the Company's former equity method investment in G5 for the year ended December 31, 2017 .

Also includes ($ 701 ) of principal trading losses for the year ended December 31, 2017 to conform to the current presentation.

Investment Management Other Revenue, net, includes a gain of $ 7,808 related to the sale of the Institutional Trust and Independent Fiduciary business of ETC for the year ended December 31, 2017 .

Also includes $ 2,037 of net realized and unrealized gains on private equity investments for the year ended December 31, 2017 to conform to the current presentation.

(A) Investment Banking Other Revenue, net, includes interest expense on the Notes Payable, subordinated borrowings and lines of credit of $ 18,197 , $ 12,917 and $ 9,201 for the years ended December 31, 2020, 2019 and 2018, respectively.

Investment Banking Other Revenue, net, also includes a loss of $ 21,070 related to the release of cumulative foreign exchange losses resulting from the sale and wind-down of the Company's businesses in Mexico for the year ended December 31, 2020.

(B) Investment Management Other Revenue, net, includes a net loss of $ 3,441 related to the sale of the Company's ECB businesses and a loss of $ 6,295 related to the release of cumulative foreign exchange losses resulting from the sale and wind-down of the Company's businesses in Mexico for the year ended December 31, 2020.

(2) Other Expenses are as follows:

For the Years Ended December 31,

2020 2019 2018

Investment Banking

Amortization of LP Units/Interests and Certain Other Awards

Special Charges

Amortization of LP Units and Certain Other Awards $ 1,067 $ 18,183 $ 15,241

Special Charges, Including Business Realignment Costs 46,600 7,202 5,012

Acquisition and Transition Costs 262 705 —

3 unchanged sentences

Investment Management

Special Charges

Special Charges, Including Business Realignment Costs 45 2,939 —

Acquisition and Transition Costs 300 308 21

4 unchanged sentences

For the Years Ended December 31,

2020 2019 2018

Net Revenues:

2 unchanged sentences

Latin America 26,550 17,407 32,940

Total $ 2,291,628 $ 1,983,383 $ 2,063,425

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

7 unchanged sentences

Latin America 3,568 66,444

Total $ 3,370,888 $ 2,598,613

EVERCORE INC.

9 unchanged sentences

Deferred Tax Assets 237,595 244,965

Goodwill 15,236 15,236

Other Assets 25,603 18,704

TOTAL ASSETS $ 1,698,152 $ 1,345,303

LIABILITIES AND STOCKHOLDERS' EQUITY

1 unchanged sentence

Payable to Related Party $ 9,891 $ 9,570

Taxes Payable

Other Current Liabilities 3,963 6,003

Current Portion of Notes Payable 37,974 —

Total Current Liabilities 51,828 15,573

9 unchanged sentences

Treasury Stock at Cost ( 31,445,058 and 29,522,665 shares at December 31, 2020 and 2019, respectively)

( 1,824,727 ) ( 1,678,168 )

TOTAL STOCKHOLDERS' EQUITY 1,230,946 869,716

8 unchanged sentences

For the Years Ended December 31,

2020 2019 2018

Other Revenue, Including Interest and Investments $ 18,197 $ 12,915 $ 9,202

1 unchanged sentence

Interest Expense 18,197 12,915 9,202

NET REVENUES — — —

TOTAL EXPENSES — — —

2 unchanged sentences

Provision for Income Taxes 100,555 86,281 96,738

NET INCOME $ 350,574 $ 297,436 $ 377,240

See notes to parent company only financial statements.

6 unchanged sentences

For the Years Ended December 31,

2020 2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES

Net Income $ 350,574 $ 297,436 $ 377,240

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

Undistributed Income of Subsidiary ( 451,129 ) ( 383,717 ) ( 473,978 )

Adjustment to Tax Receivable Agreement

Deferred Taxes 11,395 ( 3,966 ) ( 5,311 )

1 unchanged sentence

(Increase) Decrease in Operating Assets:

Other Assets ( 6,899 ) ( 18,704 ) 9,689

Increase (Decrease) in Operating Liabilities:

6 unchanged sentences

Issuance of Notes Payable — 205,718 —

Dividends ( 106,582 ) ( 96,803 ) ( 77,302 )

Net Cash Provided by (Used in) Financing Activities ( 106,582 ) 108,915 ( 77,302 )

27 unchanged sentences

At December 31, 2020, the Company has issued 72,195 Class A Shares.

The Company canceled one share of Class B common stock, which was held by a limited partner of Evercore LP during 2019.

During 2019, the Company purchased 1,039 Class A Shares primarily from employees at market values ranging from $ 71.11 to $ 96.22 per share primarily for the net settlement of stock-based compensation awards and 2,360 Class A Shares at market values ranging from $ 73.18 to $ 92.33 per share pursuant to the Company's share repurchase program.

The Company canceled two shares of Class B common stock, which were held by limited partners of Evercore LP during 2020.

During 2020, the Company purchased 1,068 Class A Shares primarily from employees at market values ranging from $ 38.23 to $ 104.38 per share (at an average cost per share of $ 76.51 ) 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 result of these purchases was an increase in Treasury Stock of $ 146,559 on the Company's Statement of Financial Condition as of December 31, 2020.

26 unchanged sentences

2020 September 30,

2020 June 30,

2020 March 31,

Net Revenues $ 927,308 $ 402,515 $ 507,075 $ 427,007

Total Expenses 600,593 338,829 420,346 377,704

3 unchanged sentences

Provision for Income Taxes 77,109 15,677 21,814 13,551

Net Income 255,452 51,120 67,228 38,880

Net Income Attributable to Noncontrolling Interest 35,075 8,510 10,816 7,705

Net Income Attributable to Evercore Inc.

$ 220,377 $ 42,610 $ 56,412 $ 31,175

Net Income Per Share Attributable to Evercore Inc.

Common Shareholders

Basic $ 5.40 $ 1.05 $ 1.39 $ 0.78

Diluted $ 5.02 $ 1.01 $ 1.35 $ 0.74

Dividends Declared Per Share of Class A Common Stock $ 0.61 $ 0.58 $ 0.58 $ 0.58

1 unchanged sentence

2019 September 30,

2019 June 30,

2019 March 31,

Net Revenues $ 660,127 $ 402,198 $ 531,046 $ 415,327

Total Expenses 503,404 331,854 404,212 331,517

3 unchanged sentences

Provision for Income Taxes 34,793 20,402 32,030 7,821

Net Income 125,700 52,504 97,257 78,200

Net Income Attributable to Noncontrolling Interest 20,516 9,226 15,515 10,968

Net Income Attributable to Evercore Inc.

$ 105,184 $ 43,278 $ 81,742 $ 67,232

Net Income Per Share Attributable to Evercore Inc.

Common Shareholders

Basic $ 2.68 $ 1.09 $ 2.02 $ 1.66

Diluted $ 2.48 $ 1.01 $ 1.88 $ 1.52

Dividends Declared Per Share of Class A Common Stock $ 0.58 $ 0.58 $ 0.58 $ 0.50

1 unchanged sentence

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-K

Item 8. Financial Statements and Supplementary Data