Evercore Inc. 10-Q

Item 1. Financial Statements Condensed Consolidated Financial Statements (Unaudited) Page Condensed Consolidated Statements of Financial Condition as of March 31, 2021 and December 31, 2020 4 Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020 5 Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2021 and 2020 6 Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2021 and 2020 7 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 8 Notes to Unaudited Condensed Consolidated Financial Statements 9 3 Table of Contents EVERCORE INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) (dollars in thousands, except share data) March 31, 2021 December 31, 2020 Assets Current Assets Cash and Cash Equivalents $ 410,848 $ 829,598 Investment Securities and Certificates of Deposit (includes available-for-sale debt securities with an amortized cost of $ 147,995 and $ 402,824 at March 31, 2021 and December 31, 2020, respectively) 873,117 1,060,836 Accounts Receivable (net of allowances of $ 2,017 and $ 5,372 at March 31, 2021 and December 31, 2020, respectively) 356,430 368,346 Receivable from Employees and Related Parties 23,074 23,593 Other Current Assets 78,671 92,231 Total Current Assets 1,742,140 2,374,604 Investments 86,360 86,681 Deferred Tax Assets 256,491 257,862 Operating Lease Right-of-Use Assets 262,173 270,498 Furniture, Equipment and Leasehold Improvements (net of accumulated depreciation and amortization of $ 146,412 and $ 139,572 at March 31, 2021 and December 31, 2020, respectively) 150,537 148,832 Goodwill 129,232 129,126 Intangible Assets (net of accumulated amortization of $ 3,023 and $ 2,932 at March 31, 2021 and December 31, 2020, respectively) 607 698 Other Assets 98,373 102,587 Total Assets $ 2,725,913 $ 3,370,888 Liabilities and Equity Current Liabilities Accrued Compensation and Benefits $ 326,082 $ 778,043 Accounts Payable and Accrued Expenses 40,770 37,961 Payable to Employees and Related Parties 47,042 24,047 Operating Lease Liabilities 43,654 42,871 Taxes Payable 1,809 15,346 Current Portion of Notes Payable — 37,974 Other Current Liabilities 32,845 127,691 Total Current Liabilities 492,202 1,063,933 Operating Lease Liabilities 294,644 300,275 Notes Payable 376,491 338,518 Amounts Due Pursuant to Tax Receivable Agreements 78,884 76,860 Other Long-term Liabilities 49,295 101,928 Total Liabilities 1,291,516 1,881,514 Commitments and Contingencies (Note 16) Equity Evercore Inc. Stockholders' Equity Common Stock Class A, par value $ 0.01 per share ( 1,000,000,000 shares authorized, 74,521,960 and 72,195,283 issued at March 31, 2021 and December 31, 2020, respectively, and 41,136,472 and 40,750,225 outstanding at March 31, 2021 and December 31, 2020, respectively) 745 722 Class B, par value $ 0.01 per share ( 1,000,000 shares authorized, 47 and 48 issued and outstanding at March 31, 2021 and December 31, 2020, respectively) — — Additional Paid-In-Capital 2,322,421 2,266,136 Accumulated Other Comprehensive Income (Loss) ( 8,397 ) ( 9,758 ) Retained Earnings 914,120 798,573 Treasury Stock at Cost ( 33,385,488 and 31,445,058 shares at March 31, 2021 and December 31, 2020, respectively) ( 2,059,581 ) ( 1,824,727 ) Total Evercore Inc. Stockholders' Equity 1,169,308 1,230,946 Noncontrolling Interest 265,089 258,428 Total Equity 1,434,397 1,489,374 Total Liabilities and Equity $ 2,725,913 $ 3,370,888 See Notes to Unaudited Condensed Consolidated Financial Statements. 4 Table of Contents EVERCORE INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (dollars and share amounts in thousands, except per share data) For the Three Months Ended March 31, 2021 2020 Revenues Investment Banking: Advisory Fees $ 511,918 $ 358,564 Underwriting Fees 79,257 21,118 Commissions and Related Revenue 53,526 55,566 Asset Management and Administration Fees 14,949 12,747 Other Revenue, Including Interest and Investments 7,230 ( 14,948 ) Total Revenues 666,880 433,047 Interest Expense 4,570 6,040 Net Revenues 662,310 427,007 Expenses Employee Compensation and Benefits 395,390 270,742 Occupancy and Equipment Rental 18,709 18,910 Professional Fees 21,607 16,966 Travel and Related Expenses 2,292 16,151 Communications and Information Services 14,029 12,567 Depreciation and Amortization 6,641 6,871 Execution, Clearing and Custody Fees 3,552 4,186 Special Charges, Including Business Realignment Costs — 23,676 Acquisition and Transition Costs 7 8 Other Operating Expenses 5,875 7,627 Total Expenses 468,102 377,704 Income Before Income from Equity Method Investments and Income Taxes 194,208 49,303 Income from Equity Method Investments 3,024 3,128 Income Before Income Taxes 197,232 52,431 Provision for Income Taxes 31,681 13,551 Net Income 165,551 38,880 Net Income Attributable to Noncontrolling Interest 21,199 7,705 Net Income Attributable to Evercore Inc. $ 144,352 $ 31,175 Net Income Attributable to Evercore Inc. Common Shareholders $ 144,352 $ 31,175 Weighted Average Shares of Class A Common Stock Outstanding Basic 41,364 39,992 Diluted 44,456 42,317 Net Income Per Share Attributable to Evercore Inc. Common Shareholders: Basic $ 3.49 $ 0.78 Diluted $ 3.25 $ 0.74 See Notes to Unaudited Condensed Consolidated Financial Statements. 5 Table of Contents EVERCORE INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (dollars in thousands) For the Three Months Ended March 31, 2021 2020 Net Income $ 165,551 $ 38,880 Other Comprehensive Income (Loss), net of tax: Unrealized Gain (Loss) on Securities and Investments, net 42 ( 933 ) Foreign Currency Translation Adjustment Gain (Loss), net 1,553 ( 11,308 ) Other Comprehensive Income (Loss) 1,595 ( 12,241 ) Comprehensive Income 167,146 26,639 Comprehensive Income Attributable to Noncontrolling Interest 21,433 5,796 Comprehensive Income Attributable to Evercore Inc. $ 145,713 $ 20,843 See Notes to Unaudited Condensed Consolidated Financial Statements. 6 Table of Contents EVERCORE INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) (dollars in thousands, except share data) For the Three Months Ended March 31, 2021 Accumulated Additional Other Class A Common Stock Paid-In Comprehensive Retained Treasury Stock Noncontrolling Total Shares Dollars Capital Income (Loss) Earnings Shares Dollars Interest Equity Balance at December 31, 2020 72,195,283 $ 722 $ 2,266,136 $ ( 9,758 ) $ 798,573 ( 31,445,058 ) $ ( 1,824,727 ) $ 258,428 $ 1,489,374 Net Income — — — — 144,352 — — 21,199 165,551 Other Comprehensive Income — — — 1,361 — — — 234 1,595 Treasury Stock Purchases — — — — — ( 1,940,430 ) ( 234,854 ) — ( 234,854 ) Evercore LP Units Exchanged for Class A Common Stock 120,143 1 7,211 — — — — ( 5,714 ) 1,498 Equity-based Compensation Awards 2,206,534 22 51,900 — — — — 3,096 55,018 Dividends — — — — ( 28,805 ) — — — ( 28,805 ) Noncontrolling Interest (Note 13) — — ( 2,826 ) — — — — ( 12,154 ) ( 14,980 ) Balance at March 31, 2021 74,521,960 $ 745 $ 2,322,421 $ ( 8,397 ) $ 914,120 ( 33,385,488 ) $ ( 2,059,581 ) $ 265,089 $ 1,434,397 For the Three Months Ended March 31, 2020 Accumulated Additional Other Class A Common Stock Paid-In Comprehensive Retained Treasury Stock Noncontrolling Total Shares Dollars Capital Income (Loss) Earnings Shares Dollars Interest Equity Balance at December 31, 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 (1) — — — — ( 1,310 ) — — — ( 1,310 ) Net Income — — — — 31,175 — — 7,705 38,880 Other Comprehensive Income (Loss) — — — ( 10,332 ) — — — ( 1,909 ) ( 12,241 ) Treasury Stock Purchases — — — — — ( 1,841,880 ) ( 141,014 ) — ( 141,014 ) Evercore LP Units Exchanged for Class A Common Stock 791,695 8 41,577 — — — — ( 33,171 ) 8,414 Equity-based Compensation Awards 2,409,586 24 55,409 — — — — 3,311 58,744 Dividends — — — — ( 27,117 ) — — — ( 27,117 ) Noncontrolling Interest (Note 13) — — ( 1,565 ) — — — — ( 11,176 ) ( 12,741 ) Balance at March 31, 2020 71,899,956 $ 719 $ 2,111,945 $ ( 37,928 ) $ 561,017 ( 31,364,545 ) $ ( 1,819,182 ) $ 221,294 $ 1,037,865 (1) The cumulative adjustment relates to the adoption of Accounting Standards Update ("ASU") No. 2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13") on January 1, 2020, for which the Company recorded an adjustment to Retained Earnings to reflect an increase in the Company's Allowance for Doubtful Accounts as a result of the use of the current expected credit loss model. See Notes to Unaudited Condensed Consolidated Financial Statements. 7 Table of Contents EVERCORE INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (dollars in thousands) For the Three Months Ended March 31, 2021 2020 Cash Flows From Operating Activities Net Income $ 165,551 $ 38,880 Adjustments to Reconcile Net Income to Net Cash Provided by (Used In) Operating Activities: Net (Gains) Losses on Investments, Investment Securities and Contingent Consideration ( 7,605 ) 24,767 Equity Method Investments 349 ( 1,291 ) Equity-Based and Other Deferred Compensation 94,211 77,910 Noncash Lease Expense 10,058 9,065 Depreciation, Amortization and Accretion 6,751 8,526 Bad Debt Expense ( 1,738 ) 474 Deferred Taxes 4,502 2,105 Decrease (Increase) in Operating Assets: Investment Securities ( 1,950 ) 634 Financial Instruments Owned and Pledged as Collateral at Fair Value — ( 13,099 ) Securities Purchased Under Agreements to Resell — 12,831 Accounts Receivable 14,265 42,009 Receivable from Employees and Related Parties 523 ( 2,344 ) Other Assets 17,550 ( 11,564 ) (Decrease) Increase in Operating Liabilities: Accrued Compensation and Benefits ( 535,197 ) ( 359,947 ) Accounts Payable and Accrued Expenses 2,397 ( 6,070 ) Securities Sold Under Agreements to Repurchase — 266 Payables to Employees and Related Parties 22,736 4,152 Taxes Payable ( 13,537 ) ( 2,829 ) Other Liabilities ( 108,977 ) 1,219 Net Cash Provided by (Used In) Operating Activities ( 330,111 ) ( 174,306 ) Cash Flows From Investing Activities Investments Purchased ( 159 ) — Distributions of Private Equity Investments 5 — Investment Securities: Proceeds from Sales and Maturities of Investment Securities 888,534 332,819 Purchases of Investment Securities and Futures Contracts Activity ( 616,624 ) ( 209,602 ) Maturity of Certificates of Deposit — 214,266 Purchase of Certificates of Deposit ( 73,877 ) — Purchase of Furniture, Equipment and Leasehold Improvements ( 7,714 ) ( 12,661 ) Net Cash Provided by Investing Activities 190,165 324,822 Cash Flows From Financing Activities Issuance of Noncontrolling Interests 1,107 30 Distributions to Noncontrolling Interests ( 12,894 ) ( 11,068 ) Payment of Notes Payable ( 38,000 ) — Issuance of Notes Payable 38,000 — Purchase of Treasury Stock and Noncontrolling Interests ( 231,296 ) ( 141,014 ) Dividends ( 37,414 ) ( 33,781 ) Net Cash Provided by (Used in) Financing Activities ( 280,497 ) ( 185,833 ) Effect of Exchange Rate Changes on Cash 1,816 ( 8,429 ) Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash ( 418,627 ) ( 43,746 ) Cash, Cash Equivalents and Restricted Cash-Beginning of Period 838,224 643,886 Cash, Cash Equivalents and Restricted Cash-End of Period $ 419,597 $ 600,140 SUPPLEMENTAL CASH FLOW DISCLOSURE Payments for Interest $ 4,469 $ 5,667 Payments for Income Taxes $ 27,331 $ 20,896 Accrued Dividends $ 3,411 $ 3,531 Noncash Purchase of Noncontrolling Interest $ 3,170 $ 1,703 Receipt of Equity Securities in Settlement of Accounts Receivable $ 1,955 $ — Debt Issuance Costs Accrued $ 355 $ — See Notes to Unaudited Condensed Consolidated Financial Statements. 8 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Note 1 – Organization Evercore Inc., together with its subsidiaries (the "Company"), is an investment banking and investment management firm, incorporated in Delaware and headquartered in New York, New York. The Company is a holding company which owns a controlling interest in, and is the sole general partner of, Evercore LP, a Delaware limited partnership ("Evercore LP"). The Company operates from its offices and through its affiliates in North America, Europe, the Middle East and Asia. The Investment Banking segment includes the advisory business through which the Company provides advice to clients on significant mergers, acquisitions, divestitures, shareholder activism and other strategic corporate transactions, with a particular focus on advising prominent multinational corporations and substantial private equity firms on large, complex transactions. The Company also provides restructuring advice to companies in financial transition, as well as to creditors, shareholders and potential acquirers. In addition, the Company provides its clients with capital markets advice, underwrites securities offerings, raises funds for financial sponsors and provides advisory services focused on secondary transactions for private funds interests, as well as on primary and secondary transactions for real estate oriented financial sponsors and private equity interests. 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, and the private equity business, which holds interests in private equity funds which are not managed by the Company. The Company's historical results also include the institutional asset management business, through which the Company directly and through affiliates, managed financial assets for sophisticated institutional investors. This business included Evercore Casa de Bolsa, S.A. de C.V. ("ECB"), which was sold during 2020. Note 2 – Significant Accounting Policies For a further discussion of the Company's accounting policies, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Basis of Presentation – The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q. As permitted by the rules and regulations of the United States Securities and Exchange Commission, the unaudited condensed consolidated financial statements contain certain condensed financial information and exclude certain footnote disclosures normally included in audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The accompanying condensed consolidated financial statements are unaudited and are prepared in accordance with U.S. GAAP. In the opinion of the Company's management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, including normal recurring accruals, necessary to fairly present the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2020. The December 31, 2020 Unaudited Condensed Consolidated Statement of Financial Condition data was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP. Operating results for interim periods are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. The accompanying unaudited condensed consolidated financial statements of the Company are comprised of the consolidation of Evercore LP and Evercore LP's wholly-owned and majority-owned direct and indirect subsidiaries, including Evercore Group L.L.C. ("EGL"), a registered broker-dealer in the U.S. The Company's policy is to consolidate all subsidiaries in which it has a controlling financial interest, as well as any variable interest entities ("VIEs") where the Company is deemed to be the primary beneficiary, when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE. The Company reviews factors, including the rights of the equity holders and obligations of equity holders to absorb losses or receive expected residual returns, to determine if the investment is a VIE. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly or indirectly by the Company. The consolidation analysis is generally performed qualitatively. This analysis, which requires judgment, is performed at each reporting date. Evercore LP is a VIE and the Company is the primary beneficiary. Specifically, the Company has the majority economic interest in Evercore LP and has decision making authority that significantly affects the economic performance of the entity 9 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) while the limited partners have no kick-out or substantive participating rights. The assets and liabilities of Evercore LP represent substantially all of the consolidated assets and liabilities of the Company with the exception of U.S. corporate taxes and related items, which are presented on the Company's (Parent Company Only) Condensed Statements of Financial Condition in Note 25 to the Company's consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Evercore ISI International Limited ("Evercore ISI U.K."), Evercore Partners International LLP ("Evercore U.K."), Evercore (Japan) Ltd. ("Evercore Japan"), Evercore Consulting (Beijing) Co. Ltd. ("Evercore Beijing") and Evercore Partners Canada Ltd. ("Evercore Canada") are also VIEs, and the Company is the primary beneficiary of these VIEs. Specifically for Evercore ISI U.K., Evercore Japan, Evercore Beijing and Evercore Canada (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 Unaudited Condensed Consolidated Statements of Financial Condition Evercore ISI U.K., Evercore U.K., Evercore Japan, Evercore Beijing and Evercore Canada assets of $ 343,806 and liabilities of $ 114,032 at March 31, 2021 and assets of $ 377,878 and liabilities of $ 164,779 at December 31, 2020. All intercompany balances and transactions with the Company's subsidiaries have been eliminated upon consolidation. Reclassifications: During the three months ended March 31, 2021, certain balances on the Unaudited Condensed Consolidated Statements of Operations in the prior period were reclassified to conform to their current presentation. Commissions and Related Revenue – The Company renamed "Commissions and Related Fees" to "Commissions and Related Revenue" on the Unaudited Condensed Consolidated Statements of Operations and reclassified $ 185 of principal trading gains and losses from the Company's institutional equities business from "Other Revenue, Including Interest and Investments" to "Commissions and Related Revenue" for the three months ended March 31, 2020. The prior period reclassifications from "Other Revenue, Including Interest and Investments" to "Commissions and Related Revenue" are as follows: for the three months ended March 31, 2020: $ 185 ; for the three months ended June 30, 2020: $ 215 ; for the three months ended September 30, 2020: $ 150 ; for the three months ended December 31, 2020: $ 375 ; for the three months ended March 31, 2019: ($ 2 ); for the three months ended June 30, 2019: $ 25 ; for the three months ended September 30, 2019: $ 320 ; for the three months ended December 31, 2019: $ 249 . Note 3 – Recent Accounting Pronouncements ASU 2019-12 – In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU No. 2019-12, "Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes" ("ASU 2019-12"). ASU 2019-12 provides amendments to ASC 740, "Income Taxes" ("ASC 740") which simplify the accounting for income taxes by removing certain exceptions in ASC 740 and clarify and amend certain existing guidance. The amendments in this update are effective during interim and annual periods beginning after December 15, 2020, with early adoption permitted. 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 adopted ASU 2019-12 on January 1, 2021. 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. 2020-01, "Clarifying the Interactions Between Topic 321, 323, and Topic 815" ("ASU 2020-01"). ASU 2020-01 provides amendments to clarify the accounting for certain equity securities when the equity method of accounting is applied or discontinued and scope considerations related to forward contracts and purchased options on certain securities. The amendments in this update are effective during interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU 2020-01 on January 1, 2021. 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 10 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) 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 and Accounts Receivable The following table presents revenue recognized by the Company for the three months ended March 31, 2021 and 2020: For the Three Months Ended March 31, 2021 2020 Investment Banking: Advisory Fees $ 511,918 $ 358,564 Underwriting Fees 79,257 21,118 Commissions and Related Revenue 53,526 55,566 Total Investment Banking $ 644,701 $ 435,248 Investment Management: Asset Management and Administration Fees: Wealth Management $ 14,949 $ 12,328 Institutional Asset Management — 419 Total Investment Management $ 14,949 $ 12,747 Contract Balances The change in the Company’s contract assets and liabilities during the following periods primarily reflects timing differences between the Company’s performance and the client’s payment. The Company’s receivables, contract assets and deferred revenue (contract liabilities) for the three months ended March 31, 2021 and 2020 are as follows: 11 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) For the Three Months Ended March 31, 2021 Receivables (Current) (1) Receivables (Long-term) (2) Contract Assets (Current) (3) Contract Assets (Long-term) (2) Deferred Revenue (Current Contract Liabilities) (4) Deferred Revenue (Long-term Contract Liabilities) (5) Balance at January 1, 2021 $ 368,346 $ 70,975 $ 29,327 $ 5,283 $ 9,373 $ 147 Increase (Decrease) ( 11,916 ) ( 2,434 ) ( 1,527 ) ( 1,111 ) 3,791 — Balance at March 31, 2021 $ 356,430 $ 68,541 $ 27,800 $ 4,172 $ 13,164 $ 147 For the Three Months Ended March 31, 2020 Receivables (Current) (1) Receivables (Long-term) (2) Contract Assets (Current) (3) Contract Assets (Long-term) (2) Deferred Revenue (Current Contract Liabilities) (4) Deferred Revenue (Long-term Contract Liabilities) (5) Balance at January 1, 2020 $ 296,355 $ 63,554 $ 31,525 $ 2,504 $ 2,492 $ 615 Increase (Decrease) ( 48,910 ) ( 3,968 ) 166 6,960 3,131 — Balance at March 31, 2020 $ 247,445 $ 59,586 $ 31,691 $ 9,464 $ 5,623 $ 615 (1) Included in Accounts Receivable on the Unaudited Condensed Consolidated Statements of Financial Condition. (2) Included in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition. (3) Included in Other Current Assets on the Unaudited Condensed Consolidated Statements of Financial Condition. (4) Included in Other Current Liabilities on the Unaudited Condensed Consolidated Statements of Financial Condition. (5) Included in Other Long-term Liabilities on the Unaudited Condensed Consolidated Statements of Financial Condition. The Company's contract assets represent arrangements in which an estimate of variable consideration has been included in the transaction price and thereby recognized as revenue that precedes the contractual due date. Under ASC 606, "Revenue from Contracts with Customers" ("ASC 606"), revenue is recognized when all material conditions for completion have been met and it is probable that a significant revenue reversal will not occur in a future period. The Company recognized revenue of $ 2,467 and $ 2,029 on the Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020, respectively, that was initially included in deferred revenue within Other Current Liabilities on the Company’s Unaudited Condensed Consolidated Statements of Financial Condition. Generally, performance obligations under client arrangements will be settled within one year ; therefore, the Company has elected to apply the practical expedient in ASC 606-10-50-14. The allowance for credit losses for the three months ended March 31, 2021 and 2020 is as follows: For the Three Months Ended March 31, 2021 2020 Beginning Balance (1) $ 5,372 $ 9,191 Bad debt expense, net of reversals ( 1,738 ) 474 Write-offs, foreign currency translation and other adjustments ( 1,617 ) ( 2,770 ) Ending Balance $ 2,017 $ 6,895 (1) Beginning Balance for the three months ended March 31, 2020 includes the cumulative-effect adjustment of $ 1,310 , which reflects the increase in the Company's Allowance for Doubtful Accounts as a result of the use of the current expected credit loss model related to the adoption of ASU 2016-13 on January 1, 2020. The change in the balance during the three months ended March 31, 2021 is primarily related to a decrease in the current period provision of expected credit losses, which is impacted by reversals of bad debt expense, as well as the change in the amount of receivables outstanding greater than 120 days at March 31, 2021, and the write-off of aged receivables. 12 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) For long-term accounts receivable and long-term contract assets, the Company monitors clients’ creditworthiness based on collection experience and other internal metrics. The following table presents the Company’s long-term accounts receivable and long-term contract assets from the Company's private and secondary fund advisory businesses as of March 31, 2021, by year of origination: Amortized Cost Basis by Origination Year 2021 2020 2019 2018 2017 Total Long-term Accounts Receivable and Long-Term Contract Assets $ 12,420 $ 42,303 $ 12,238 $ 5,353 $ 399 $ 72,713 Note 5 – Special Charges, Including Business Realignment Costs, and Intangible Asset Amortization Special Charges, Including Business Realignment Costs The Company recognized $ 23,676 for the three months ended March 31, 2020, as Special Charges, Including Business Realignment Costs. For the three months ended March 31, 2020, these costs included $ 22,127 for separation and transition benefits and related costs as a result of the Company's review of its operations, described below, and $ 1,549 related to the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of the Company's headquarters in New York and the Company's business realignment initiatives. 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. This review generated reductions of 8 % of the Company's headcount. See Note 15 for further information. Intangible Asset Amortization Expense associated with the amortization of intangible assets for Investment Management was $ 91 and $ 108 for the three months ended March 31, 2021 and 2020, respectively, included within Depreciation and Amortization expense on the Unaudited Condensed Consolidated Statements of Operations. Expense associated with the amortization of intangible assets for Investment Banking was $ 507 for the three months ended March 31, 2020, included within Depreciation and Amortization expense on the Unaudited Condensed Consolidated Statements of Operations. Note 6 – Related Parties Investment Banking Revenue includes advisory fees earned from clients that have Senior Managing Directors and certain Senior Advisors and executives as a member of their Board of Directors of $ 5,612 for the three months ended March 31, 2021. Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition includes the long-term portion of loans receivable from certain employees of $ 8,693 and $ 10,159 as of March 31, 2021 and December 31, 2020, respectively. See Note 15 for further information. Note 7 – Investment Securities and Certificates of Deposit The Company's Investment Securities and Certificates of Deposit as of March 31, 2021 and December 31, 2020 were as follows: 13 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) March 31, 2021 December 31, 2020 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt Securities $ 147,995 $ 1 $ — $ 147,996 $ 402,824 $ 39 $ — $ 402,863 Equity Securities 2,621 2,055 — 4,676 666 — 73 593 Debt Securities Carried by Broker-Dealers 519,969 19 1 519,987 550,002 27 3 550,026 Investment Funds 109,268 17,313 — 126,581 87,612 19,742 — 107,354 Total Investment Securities (carried at fair value) $ 779,853 $ 19,388 $ 1 $ 799,240 $ 1,041,104 $ 19,808 $ 76 $ 1,060,836 Certificates of Deposit (carried at contract value) 73,877 — Total Investment Securities and Certificates of Deposit $ 873,117 $ 1,060,836 Scheduled maturities of the Company's available-for-sale debt securities as of March 31, 2021 and December 31, 2020 were as follows: March 31, 2021 December 31, 2020 Amortized Cost Fair Value Amortized Cost Fair Value Due within one year $ 147,995 $ 147,996 $ 402,824 $ 402,863 Total $ 147,995 $ 147,996 $ 402,824 $ 402,863 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 March 31, 2021 and has not recorded a credit allowance on these securities. Debt Securities Debt Securities are classified as available-for-sale securities within Investment Securities and Certificates of Deposit on the Unaudited Condensed Consolidated Statements of Financial Condition. These securities are stated at fair value with unrealized gains and losses included in Accumulated Other Comprehensive Income (Loss) and realized gains and losses included in earnings. The Company had net realized losses of ($ 11 ) and ($ 4 ) for the three months ended March 31, 2021 and 2020, respectively. Equity Securities Equity Securities are carried at fair value with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations. The Company had net realized and unrealized gains (losses) of $ 2,128 and ($ 334 ) for the three months ended March 31, 2021 and 2020, respectively. Debt Securities Carried by Broker-Dealers EGL and other broker-dealers invest in fixed income portfolios consisting primarily of U.S. Treasury bills, municipal bonds and other debt securities. At March 31, 2021 and 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 Unaudited Condensed Consolidated Statements of Operations, as required for broker-dealers in securities. The Company had net realized and unrealized losses of ($ 5 ) and ($ 634 ) for the three months ended March 31, 2021 and 2020, respectively. Included in Investment Securities above at December 31, 2020, 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 14 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) broker for securities purchased of $ 99,983 recorded in Other Current Liabilities on the Unaudited Condensed Consolidated Statement of Financial Condition. Investment Funds The Company invests in a portfolio of exchange-traded funds as an economic hedge against the Company's deferred cash compensation program. See Note 15 for further information. These securities are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations. The Company had net realized and unrealized gains (losses) of $ 6,228 and ($ 13,019 ) for the three months ended March 31, 2021 and 2020, respectively. The Company periodically enters into futures contracts as an economic hedge against the Company's deferred cash compensation program. See Note 16 for further information. Certificates of Deposit At March 31, 2021, the Company held certificates of deposit of $ 73,877 with certain banks with original maturities of four months or less when purchased. Note 8 – Investments The Company's investments reported on the Unaudited Condensed Consolidated Statements of Financial Condition consist of investments in unconsolidated affiliated companies, other investments in private equity partnerships, equity securities in private companies and investments in G5 Holdings S.A. ("G5"), Glisco Manager Holdings LP and Trilantic Capital Partners ("Trilantic"). The Company's investments are relatively high-risk and illiquid assets. The Company's investments in ABS Investment Management Holdings, LP and ABS Investment Management GP LLC (collectively, "ABS"), Atalanta Sosnoff Capital, LLC ("Atalanta Sosnoff") and Luminis Partners ("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 Unaudited Condensed Consolidated Statements of Operations. The Company also has investments in private equity partnerships which consist of investment interests in private equity funds which are voting interest entities. Realized and unrealized gains and losses on the private equity investments are included within Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations. Equity Method Investments A summary of the Company's investments accounted for under the equity method of accounting as of March 31, 2021 and December 31, 2020 was as follows: March 31, 2021 December 31, 2020 ABS $ 40,983 $ 41,439 Atalanta Sosnoff 11,888 11,950 Luminis 6,254 6,119 Total $ 59,125 $ 59,508 ABS 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. Taken together, the ownership interests in ABS Investment Management Holdings LP and ABS Investment Management GP LLC are substantially equivalent to the contributed ownership interests in ABS Investment Management, LLC. At March 31, 2021, the Company's economic ownership interest in ABS was 46 %. This investment resulted in earnings of $ 2,195 and $ 2,020 for the three months ended March 31, 2021 and 2020, respectively, included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations. 15 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Atalanta Sosnoff On December 31, 2015, the Company amended the Operating Agreement with Atalanta Sosnoff and deconsolidated its assets and liabilities, accounting for its interest under the equity method of accounting from that date forward. At March 31, 2021, the Company's economic ownership interest in Atalanta Sosnoff was 49 %. This investment resulted in earnings of $ 660 and $ 572 for the three months ended March 31, 2021 and 2020, respectively, included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations. Luminis On January 1, 2017, the Company acquired an interest in Luminis and accounted for its interest under the equity method of accounting. At March 31, 2021, the Company's ownership interest in Luminis was 20 %. This investment resulted in earnings of $ 169 and $ 536 for the three months ended March 31, 2021 and 2020, respectively, included within Income from Equity Method Investments on the Unaudited Condensed Consolidated Statements of Operations. Other The Company allocates the purchase price of its equity method investments, in part, to the inherent finite-lived identifiable intangible assets of the investees. The Company's share of the earnings of the investees has been reduced by the amortization of these identifiable intangible assets of $ 79 for the three months ended March 31, 2021 and 2020. The Company assesses its equity method investments for impairment annually, or more frequently if circumstances indicate impairment may have occurred. Debt Security Investment On December 31, 2017, the Company exchanged all of its outstanding equity interests in G5 for debentures of G5. The Company records its investment in G5 as a held-to-maturity debt security within Investments on the Unaudited Condensed Consolidated Statements of Financial Condition. The securities are mandatorily redeemable on December 31, 2027, or earlier, subject to the occurrence of certain events. The Company is accreting its investment to its redemption value ratably, or on an accelerated basis if certain revenue thresholds are met by G5, from December 31, 2017 to December 31, 2027. This investment is subject to currency translation from Brazilian real to the U.S. dollar, included in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations. This investment had a balance of $ 6,686 and $ 7,385 as of March 31, 2021 and December 31, 2020, respectively. Investments in Private Equity Private Equity Funds The Company's investments related to private equity partnerships and associated entities include investments in Glisco Partners II, L.P. ("Glisco II"), Glisco Partners III, L.P. ("Glisco III"), Glisco Capital Partners IV ("Glisco IV"), Trilantic Capital Partners Associates IV, L.P. ("Trilantic IV"), Trilantic Capital Partners V, L.P. ("Trilantic V") and Trilantic Capital Partners VI (North America), L.P. ("Trilantic VI"). Portfolio holdings of the private equity funds are carried at fair value. Accordingly, the Company reflects its pro rata share of unrealized gains and losses occurring from changes in fair value. Additionally, the Company reflects its pro rata share of realized gains, losses and carried interest associated with any investment realizations. A summary of the Company's investments in the private equity funds as of March 31, 2021 and December 31, 2020 was as follows: March 31, 2021 December 31, 2020 Glisco II, Glisco III and Glisco IV $ 3,504 $ 2,802 Trilantic IV, Trilantic V and Trilantic VI 9,535 9,293 Total Private Equity Funds $ 13,039 $ 12,095 Net realized and unrealized gains (losses) on private equity fund investments were $ 39 and ($ 88 ) for the three months ended March 31, 2021 and 2020, respectively. In the event the funds perform poorly, the Company may be obligated to repay certain carried interest previously distributed. As of March 31, 2021, $ 752 of previously distributed carried interest received from the funds was subject to repayment. 16 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) General Partners of Private Equity Funds which are VIEs Following the Glisco transaction, the Company concluded that Glisco Capital Partners II, Glisco Capital Partners III and Glisco Manager Holdings LP are VIEs and that the Company is not the primary beneficiary of these VIEs. The Company's assessment of the primary beneficiary of these entities included assessing which parties have the power to significantly impact the economic performance of these entities and the obligation to absorb losses, which could be potentially significant to the entities, or the right to receive benefits from the entities that could be potentially significant. Neither the Company nor its related parties will have the ability to make decisions that significantly impact the economic performance of these entities. Further, as a limited partner in these entities, the Company does not possess substantive participating rights. The Company had assets of $ 3,777 and $ 3,083 included in its Unaudited Condensed Consolidated Statements of Financial Condition at March 31, 2021 and December 31, 2020, respectively, related to these unconsolidated VIEs, representing the carrying value of the Company's investments in the entities. The Company's exposure to the obligations of these VIEs is generally limited to its investments in these entities. The Company's maximum exposure to loss as of March 31, 2021 and December 31, 2020 was $ 6,266 and $ 5,572 , respectively, which represents the carrying value of the Company's investments in these VIEs, as well as any unfunded commitments to the current and future funds. Investment in Trilantic Capital Partners In 2010, the Company made a limited partnership investment in Trilantic in exchange for 500 Class A partnership units of Evercore LP ("Class A LP Units") having a fair value of $ 16,090 . This investment gave the Company the right to invest in Trilantic's current and future private equity funds, beginning with Trilantic Fund IV. The Company accounts for this investment at its cost minus impairment, if any, plus or minus changes resulting from observable price changes. The Company allocates the cost of this investment to its investments in current and future Trilantic funds as the Company satisfies the capital calls of these funds. The Company bases this allocation on its expectation of Trilantic's future fundraising ability and performance. During the three months ended March 31, 2021, $ 5 and $ 183 of this investment was allocated to Trilantic Fund V and VI, respectively. From 2010 to 2020, $ 1,178 , $ 5,164 and $ 3,125 of this investment was allocated to Trilantic Fund IV, V and VI, respectively. This investment had a balance of $ 6,435 and $ 6,623 as of March 31, 2021 and December 31, 2020, respectively. The Company has a $ 5,000 commitment to invest in Trilantic Fund V, of which $ 367 was unfunded at March 31, 2021. The Company also has a $ 12,000 commitment to invest in Trilantic Fund VI, of which $ 8,871 was unfunded at March 31, 2021. Other Investments In certain instances, the Company receives equity securities in private companies in exchange for advisory services. These investments, which had a balance of $ 688 and $ 683 as of March 31, 2021 and December 31, 2020, 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. This investment is accounted for at its cost minus impairment, if any, plus or minus changes resulting from observable price changes. The Company amortizes the balance of its investment as distributions are received related to the deferred consideration. This investment had a balance of $ 387 as of March 31, 2021 and December 31, 2020. Note 9 – Leases Operating Leases – The Company leases office space under non-cancelable lease agreements, which expire on various dates through 2035. The lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. The Company reflects lease expense over the lease terms on a straight-line basis. Occupancy lease agreements, in addition to base rentals, generally are subject to escalation provisions based on certain costs incurred by the landlord. The Company does not have any leases with variable lease payments. Occupancy and Equipment Rental on the Unaudited Condensed Consolidated Statements of Operations includes operating lease cost for office space of $ 12,166 and $ 11,916 for the three months ended March 31, 2021 and 2020, respectively, and variable lease cost of $ 1,852 and $ 1,723 for the three months ended March 31, 2021 and 2020, respectively. In conjunction with the lease of office space, the Company has entered into letters of credit in the amounts of $ 5,550 as of March 31, 2021 and December 31, 2020, which are secured by cash that is included in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition. 17 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) The Company has entered into various operating leases for the use of office equipment (primarily computers, printers, copiers and other information technology related equipment). Occupancy and Equipment Rental on the Unaudited Condensed Consolidated Statements of Operations includes operating lease cost for office equipment of $ 1,507 and $ 1,196 for the three months ended March 31, 2021 and 2020, respectively. The Company uses its secured incremental borrowing rate to determine the present value of its right-of-use assets and lease liabilities. The determination of an appropriate incremental borrowing rate requires significant assumptions and judgment. The Company's incremental borrowing rate was calculated based on the Company's recent debt issuances and current market conditions. The Company scales the rates appropriately depending on the life of the leases. The Company incurred net operating cash outflows of $ 10,091 and $ 9,102 for the three months ended March 31, 2021 and 2020, respectively, related to its operating leases, which was net of cash received from lease incentives of $ 3,441 and $ 1,270 for the three months ended March 31, 2021 and 2020, respectively. Other information as it relates to the Company's operating leases is as follows: For the Three Months Ended March 31, 2021 2020 New Right-of-Use Assets obtained in exchange for new operating lease liabilities $ 1,864 $ 81,133 March 31, 2021 March 31, 2020 Weighted-average remaining lease term - operating leases 11.4 years 11.8 years Weighted-average discount rate - operating leases 4.06 % 4.26 % As of March 31, 2021, the maturities of the undiscounted operating lease liabilities for which the Company has commenced use are as follows: 2021 (April 1 through December 31) $ 40,390 2022 52,830 2023 37,584 2024 30,173 2025 32,672 Thereafter 245,611 Total lease payments 439,260 Less: Tenant Improvement Allowances ( 10,695 ) Less: Imputed Interest ( 90,267 ) Present value of lease liabilities 338,298 Less: Current lease liabilities ( 43,654 ) Long-term lease liabilities $ 294,644 In conjunction with the lease agreement to expand its headquarters at 55 East 52nd St., New York, New York, and lease agreements at certain other locations, the Company entered into leases for office space which have not yet commenced and thus are not yet included on the Company's Unaudited Condensed Consolidated Statements of Financial Condition as right-of-use assets and lease liabilities. The Company anticipates that it will take possession of these spaces 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 $ 195,299 as of March 31, 2021. The Company has also entered into agreements which provide for an option to take on additional office space at its 1 Stanhope Gate office in London, U.K. Under the terms of the agreement, the landlord has the option to require the Company to take on up to four additional floors, subject to the current tenant abandoning the space. During the three months ended March 18 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) 31, 2021, the landlord provided notice to the Company that it intends to exercise this option. The Company anticipates that it will take possession of these floors during 2021. The approximate additional annual payments under this lease agreement are £ 1,325 and the lease term will end on March 24, 2027. Note 10 – Fair Value Measurements ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820") establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily-available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following categories: 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. 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 March 31, 2021 and December 31, 2020 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. The following table presents the categorization of investments and certain other financial assets measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020: March 31, 2021 Level 1 Level 2 Level 3 Total Debt Securities Carried by Broker-Dealers $ 519,987 $ — $ — $ 519,987 Other Debt and Equity Securities (1) 155,577 3,995 — 159,572 Investment Funds 126,581 — — 126,581 Total Assets Measured At Fair Value $ 802,145 $ 3,995 $ — $ 806,140 December 31, 2020 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 Total Assets Measured At Fair Value $ 1,067,836 $ — $ — $ 1,067,836 (1) Includes $ 6,900 and $ 7,000 of treasury bills and notes classified within Cash and Cash Equivalents on the Unaudited Condensed Consolidated Statements of Financial Condition as of March 31, 2021 and December 31, 2020, respectively. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. 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 carrying amount and estimated fair value of the Company's financial instrument assets and liabilities, which are not measured at fair value on the Unaudited Condensed Consolidated Statements of Financial Condition, are listed in the tables below. 19 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) March 31, 2021 Carrying Estimated Fair Value Amount Level 1 Level 2 Level 3 Total Financial Assets: Cash and Cash Equivalents $ 403,948 $ 403,948 $ — $ — $ 403,948 Certificates of Deposit 73,877 — 73,877 — 73,877 Debt Security Investment 6,686 — — 6,686 6,686 Receivables (1) 424,971 — 421,717 — 421,717 Contract Assets (2) 31,972 — 31,479 — 31,479 Receivable from Employees and Related Parties 23,074 — 23,074 — 23,074 Closely-held Equity Securities 688 — — 688 688 Financial Liabilities: Accounts Payable and Accrued Expenses $ 40,770 $ — $ 40,770 $ — $ 40,770 Payable to Employees and Related Parties 47,042 — 47,042 — 47,042 Notes Payable 376,491 — 388,391 — 388,391 December 31, 2020 Carrying Estimated Fair Value Amount Level 1 Level 2 Level 3 Total Financial Assets: Cash and Cash Equivalents $ 822,598 $ 822,598 $ — $ — $ 822,598 Debt Security Investment 7,385 — — 7,385 7,385 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 Closely-held Equity Securities 683 — — 683 683 Financial Liabilities: Accounts Payable and Accrued Expenses $ 37,961 $ — $ 37,961 $ — $ 37,961 Payable to Employees and Related Parties 24,047 — 24,047 — 24,047 Notes Payable (3) 376,492 — 409,682 — 409,682 (1) Includes Accounts Receivable, as well as long-term receivables, which are included in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition. (2) Includes current and long-term contract assets included in Other Current Assets and Other Assets on the Unaudited Condensed 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 Unaudited Condensed Consolidated Statements of Financial Condition. Note 11 – Notes Payable On March 30, 2016, the Company issued an aggregate of $ 170,000 of senior notes, including: $ 38,000 aggregate principal amount of its 4.88 % Series A senior notes which were due March 30, 2021 (the "Series A Notes"), $ 67,000 aggregate principal amount of its 5.23 % Series B senior notes due March 30, 2023 (the "Series B Notes"), $ 48,000 aggregate principal amount of its 5.48 % Series C senior notes due March 30, 2026 (the "Series C Notes") and $ 17,000 aggregate principal amount of its 5.58 % Series D senior notes due March 30, 2028 (the "Series D Notes" and together with the Series A Notes, the Series B Notes and the Series C Notes, the "2016 Private Placement Notes"), pursuant to a note purchase agreement (the "2016 Note Purchase Agreement") dated as of March 30, 2016, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933. In March 2021, the Company repaid the $ 38,000 aggregate principal amount of its Series A Notes. 20 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Interest on the 2016 Private Placement Notes is payable semi-annually and the 2016 Private Placement Notes are guaranteed by certain of the Company's domestic subsidiaries. The Company may, at its option, prepay all, or from time to time any part of, the 2016 Private Placement Notes (without regard to Series), in an amount not less than 5 % of the aggregate principal amount of the 2016 Private Placement Notes then outstanding at 100 % of the principal amount thereof plus an applicable "make-whole amount." Upon the occurrence of a change of control, the holders of the 2016 Private Placement Notes will have the right to require the Company to prepay the entire unpaid principal amounts held by each holder of the 2016 Private Placement Notes plus accrued and unpaid interest to the prepayment date. The 2016 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio, a minimum tangible net worth and a minimum interest coverage ratio, and customary events of default. As of March 31, 2021, the Company was in compliance with all of these covenants. On August 1, 2019, the Company issued $ 175,000 and £ 25,000 of senior unsecured notes through private placement. These notes reflect a weighted average life of 12 years and a weighted average stated interest rate of 4.26 %. These notes include: $ 75,000 aggregate principal amount of its 4.34 % Series E senior notes due August 1, 2029 (the "Series E Notes"), $ 60,000 aggregate principal amount of its 4.44 % Series F senior notes due August 1, 2031 (the "Series F Notes"), $ 40,000 aggregate principal amount of its 4.54 % Series G senior notes due August 1, 2033 (the "Series G Notes") and £ 25,000 aggregate principal amount of its 3.33 % Series H senior notes due August 1, 2033 (the "Series H Notes" and together with the Series E Notes, the Series F Notes and the Series G Notes, the "2019 Private Placement Notes"), each of which were issued pursuant to a note purchase agreement dated as of August 1, 2019 (the "2019 Note Purchase Agreement"), among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933. Interest on the 2019 Private Placement Notes is payable semi-annually and the 2019 Private Placement Notes are guaranteed by certain of the Company's domestic subsidiaries. The Company may, at its option, prepay all, or from time to time any part of, the 2019 Private Placement Notes (without regard to Series), in an amount not less than 5 % of the aggregate principal amount of the 2019 Private Placement Notes then outstanding at 100 % of the principal amount thereof plus an applicable "make-whole amount." Upon the occurrence of a change of control, the holders of the 2019 Private Placement Notes will have the right to require the Company to prepay the entire unpaid principal amounts held by each holder of the 2019 Private Placement Notes plus accrued and unpaid interest to the prepayment date. The 2019 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio and a minimum tangible net worth, and customary events of default. As of March 31, 2021, the Company was in compliance with all of these covenants. On March 29, 2021, the Company issued an aggregate of $ 38,000 of senior notes, comprised of $ 38,000 aggregate principal amount of its 1.97 % Series I senior notes due August 1, 2025 (the "Series I Notes" or the "2021 Private Placement Notes"), pursuant to a note purchase agreement (the "2021 Note Purchase Agreement") dated as of March 29, 2021, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933. Interest on the 2021 Private Placement Notes is payable semi-annually and the 2021 Private Placement Notes are guaranteed by certain of the Company's domestic subsidiaries. The Company may, at its option, prepay all, or from time to time any part of, the 2021 Private Placement Notes, in an amount not less than 5 % of the aggregate principal amount of the 2021 Private Placement Notes then outstanding at 100 % of the principal amount thereof plus an applicable "make-whole amount." Upon the occurrence of a change of control, the holders of the 2021 Private Placement Notes will have the right to require the Company to prepay the entire unpaid principal amounts held by each holder of the 2021 Private Placement Notes plus accrued and unpaid interest to the prepayment date. The 2021 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio and a minimum tangible net worth, and customary events of default. As of March 31, 2021, the Company was in compliance with all of these covenants. Notes Payable is comprised of the following as of March 31, 2021 and December 31, 2020: 21 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Carrying Value (a) Note Maturity Date Effective Annual Interest Rate March 31, 2021 December 31, 2020 Evercore Inc. 4.88 % Series A Senior Notes 3/30/2021 5.16 % $ — $ 37,974 Evercore Inc. 5.23 % Series B Senior Notes 3/30/2023 5.44 % 66,733 66,702 Evercore Inc. 5.48 % Series C Senior Notes 3/30/2026 5.64 % 47,665 47,651 Evercore Inc. 5.58 % Series D Senior Notes 3/30/2028 5.72 % 16,862 16,858 Evercore Inc. 4.34 % Series E Senior Notes 8/1/2029 4.46 % 74,329 74,325 Evercore Inc. 4.44 % Series F Senior Notes 8/1/2031 4.55 % 59,451 59,449 Evercore Inc. 4.54 % Series G Senior Notes 8/1/2033 4.64 % 39,631 39,627 Evercore Inc. 3.33 % Series H Senior Notes 8/1/2033 3.42 % 34,175 33,906 Evercore Inc. 1.97 % Series I Senior Notes 8/1/2025 2.20 % 37,645 — Total $ 376,491 $ 376,492 Less: Current Portion of Notes Payable — ( 37,974 ) Notes Payable $ 376,491 $ 338,518 (a) Carrying value has been adjusted to reflect the presentation of debt issuance costs as a direct reduction from the related liability. Note 12 – Evercore Inc. Stockholders' Equity Dividends – The Company's Board of Directors declared on April 27, 2021, a quarterly cash dividend of $ 0.68 per share, to the holders of record of shares of Class A common stock ("Class A Shares") as of May 28, 2021, which will be paid on June 11, 2021. During the three months ended March 31, 2021, the Company declared and paid dividends of $ 0.61 per share, totaling $ 25,394 , and accrued deferred cash dividends on unvested restricted stock units ("RSUs"), totaling $ 3,411 . During the three months ended March 31, 2021, the Company also paid deferred cash dividends of $ 12,020 . Treasury Stock – During the three months ended March 31, 2021, the Company purchased 917 Class A Shares from employees at an average cost per share of $ 116.61 , primarily for the net settlement of stock-based compensation awards, and 1,023 Class A Shares at an average cost per share of $ 125.00 pursuant to the Company's share repurchase program. The aggregate 1,940 Class A Shares were purchased at an average cost per share of $ 121.03 , and the result of these purchases was an increase in Treasury Stock of $ 234,854 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2021. LP Units – During the three months ended March 31, 2021, 120 Evercore LP partnership units ("LP Units") were exchanged for Class A Shares, resulting in an increase to Common Stock and Additional Paid-In-Capital of $ 1 and $ 5,713 , respectively, on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2021. Accumulated Other Comprehensive Income (Loss) – As of March 31, 2021, Accumulated Other Comprehensive Income (Loss) on the Company's Unaudited Condensed Consolidated Statement of Financial Condition includes an accumulated Unrealized Gain (Loss) on Securities and Investments, net, and Foreign Currency Translation Adjustment Gain (Loss), net, of ($ 5,252 ) and ($ 3,145 ), respectively. Note 13 – Noncontrolling Interest Noncontrolling Interest recorded in the unaudited condensed 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. 22 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) March 31, 2021 2020 Subsidiary: Evercore LP 11 % 11 % Evercore Wealth Management ("EWM") (1) 23 % 21 % Real Estate Capital Advisory ("RECA") (2) 38 % 38 % (1) Noncontrolling Interests represent a blended rate for multiple classes of interests in EWM. (2) Noncontrolling Interests represent the Class R Interests of Private Capital Advisory L.P. The Noncontrolling Interests for Evercore LP, EWM and RECA have rights, in certain circumstances, to convert into Class A Shares. Changes in Noncontrolling Interest for the three months ended March 31, 2021 and 2020 were as follows: For the Three Months Ended March 31, 2021 2020 Beginning balance $ 258,428 $ 256,534 Comprehensive Income: Net Income Attributable to Noncontrolling Interest 21,199 7,705 Other Comprehensive Income (Loss) 234 ( 1,909 ) Total Comprehensive Income 21,433 5,796 Evercore LP Units Exchanged for Class A Shares ( 5,714 ) ( 33,171 ) Amortization and Vesting of LP Units 3,096 3,311 Other Items: Distributions to Noncontrolling Interests ( 12,894 ) ( 11,068 ) Issuance of Noncontrolling Interest 1,107 30 Purchase of Noncontrolling Interest ( 367 ) ( 138 ) Total Other Items ( 12,154 ) ( 11,176 ) Ending balance $ 265,089 $ 221,294 Other Comprehensive Income – Other Comprehensive Income (Loss) attributed to Noncontrolling Interest includes Unrealized Gain (Loss) on Securities and Investments, net, of $ 6 and ($ 141 ) for the three months ended March 31, 2021 and 2020, respectively, and Foreign Currency Translation Adjustment Gain (Loss), net, of $ 228 and ($ 1,768 ) for the three months ended March 31, 2021 and 2020, respectively. LP Units Exchanged – During the three months ended March 31, 2021, 120 LP Units were exchanged for Class A Shares. This resulted in a decrease to Noncontrolling Interest of $ 5,714 and an increase to Additional-Paid-In-Capital of $ 5,713 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2021. See Note 12 for further information. Interests Issued – During the first quarter of 2021, certain employees of EWM purchased EWM Class A Units, at fair value, resulting in an increase to Noncontrolling Interest of $ 975 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2021. Interests Purchased – During the first quarter of 2021, the Company purchased, at fair value, an additional 1 % of the EWM Class A Units for $ 3,170 (which was paid in cash in April 2021 and is included within Other Current Liabilities on the 23 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2021). This purchase resulted in a decrease to Noncontrolling Interest of $ 344 and a decrease to Additional Paid-In-Capital of $ 2,826 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2021. During the first quarter of 2020, the Company purchased, at fair value, an additional 1 % of the EWM Class A Units for $ 1,703 (which was paid in cash of $ 852 during the three months ended June 30, 2020 and through the issuance of notes payable of $ 851 , included within Other Current Liabilities on the Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2021). This purchase resulted in a decrease to Noncontrolling Interest of $ 138 and a decrease to Additional Paid-In-Capital of $ 1,565 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2020. Note 14 – Net Income Per Share Attributable to Evercore Inc. Common Shareholders The calculations of basic and diluted net income per share attributable to Evercore Inc. common shareholders for the three months ended March 31, 2021 and 2020 are described and presented below. For the Three Months Ended March 31, 2021 2020 Basic Net Income Per Share Attributable to Evercore Inc. Common Shareholders Numerator: Net income attributable to Evercore Inc. common shareholders $ 144,352 $ 31,175 Denominator: Weighted average Class A Shares outstanding, including vested RSUs 41,364 39,992 Basic net income per share attributable to Evercore Inc. common shareholders $ 3.49 $ 0.78 Diluted Net Income Per Share Attributable to Evercore Inc. Common Shareholders Numerator: Net income attributable to Evercore Inc. common shareholders $ 144,352 $ 31,175 Noncontrolling interest related to the assumed exchange of LP Units for Class A Shares (b) (b) Associated corporate taxes related to the assumed elimination of Noncontrolling Interest described above (b) (b) Diluted net income attributable to Evercore Inc. common shareholders $ 144,352 $ 31,175 Denominator: Weighted average Class A Shares outstanding, including vested RSUs 41,364 39,992 Assumed exchange of LP Units for Class A Shares (a)(b) — 288 Additional shares of the Company's common stock assumed to be issued pursuant to non-vested RSUs and deferred consideration, as calculated using the Treasury Stock Method 2,612 1,637 Shares that are contingently issuable (c) 480 400 Diluted weighted average Class A Shares outstanding 44,456 42,317 Diluted net income per share attributable to Evercore Inc. common shareholders $ 3.25 $ 0.74 (a) The Company previously had outstanding Class J limited partnership units of Evercore LP ("Class J LP Units"), which converted into Class E limited partnership units of Evercore LP ("Class E LP Units") and ultimately became exchangeable into Class A Shares on a one -for-one basis. As of March 31, 2021 and 2020, no Class J LP Units remained issued or outstanding. See Note 15 for further information. During the three months ended March 31, 2020, 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. 24 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) (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 three months ended March 31, 2021 and 2020, the Class A and E LP Units were antidilutive and consequently the effect of their exchange into Class A Shares has been excluded from the calculation of diluted net income per share attributable to Evercore Inc. common shareholders. The units that would have been included in the denominator of the computation of diluted net income per share attributable to Evercore Inc. common shareholders if the effect would have been dilutive were 4,926 and 5,338 for the three months ended March 31, 2021 and 2020, respectively. The adjustment to the numerator, diluted net income attributable to Class A common shareholders, if the effect would have been dilutive, would have been $ 17,012 and $ 4,949 for the three months ended March 31, 2021 and 2020, respectively. In computing this adjustment, the Company assumes that all vested Class A LP Units and all Class E LP Units are converted into Class A Shares, that all earnings attributable to those shares are attributed to Evercore Inc. and that the Company is subject to the statutory tax rates of a C-Corporation under a conventional corporate tax structure in the U.S. at prevailing corporate tax rates. The Company does not anticipate that the Class A and E LP Units will result in a dilutive computation in future periods. (c) The Company has outstanding Class I-P units of Evercore LP ("Class I-P Units") which are contingently exchangeable into Class I limited partnership units of Evercore LP ("Class I LP Units"), and ultimately Class A Shares, and outstanding Class K-P units of Evercore LP ("Class K-P Units") which are contingently exchangeable into Class K limited partnership units of Evercore LP ("Class K LP Units"), and ultimately Class A Shares, as they are subject to certain performance thresholds being achieved. For the purposes of calculating diluted net income per share attributable to Evercore Inc. 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 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 480 and 400 for the three months ended March 31, 2021 and 2020, respectively. The shares of Class B common stock have no right to receive dividends or a distribution on liquidation or winding up of the Company. The shares of Class B common stock do not share in the earnings of the Company and no earnings are allocable to such class. Accordingly, basic and diluted net income per share of Class B common stock have not been presented. Note 15 – Share-Based and Other Deferred Compensation LP Units Equities business – In conjunction with the acquisition of the operating businesses of International Strategy & Investment ("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 expensed the previously unrecognized grant date fair value of the Class H LP Interests ratably over the remaining vesting period of the Class J LP Units. Compensation expense related to the Class J LP Units was $ 1,067 for the three months ended March 31, 2020. On February 15, 2020, 223 Class J LP Units vested and were converted to an equal amount of Class E LP Units. Following the conversion, no Class J LP Units remain issued and outstanding. Othe r Performance-based Awards Class I-P Units – 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 25 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) I LP Units, which are exchangeable on a one -for-one basis to Class A Shares, contingent on the achievement of certain market and service conditions, subject to vesting upon specified termination events (including retirement, upon satisfying certain eligibility criteria, on or following January 15, 2022, subject to a one year prior written notice requirement) or a change in control. These Class I-P Units are segregated into two groups of 200 units each, with share price threshold vesting conditions which are required to exceed a certain level for 20 consecutive trading days (which were met as of March 31, 2017). The Company determined the fair value of the award to be $ 24,412 and is expensing the award ratably over the implied service period, which ends on March 1, 2022. As the award contains market-based conditions, the entire expense will be recognized if the award does not vest for any reason other than the service conditions. Compensation expense related to this award was $ 1,236 and $ 1,152 for the three months ended March 31, 2021 and 2020, respectively . Class K-P Units – 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. 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. 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 March 31, 2021 to be $ 34,684 , related to 403 Class K LP 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 $ 1,860 and $ 1,093 for the three months ended March 31, 2021 and 2020, respectively. Class L Interests – In April 2021, the Company's Board of Directors approved the issuance of Class L Interests in Evercore LP ("Class L Interests") to named executive officers of the Company, pursuant to which the named executive officers may receive a discretionary distribution of profits from Evercore LP, to be paid in the first quarter of 2022. Distributions pursuant to these interests are anticipated to be made in lieu of any cash incentive compensation payments which may otherwise have been made to the named executive officers of the Company in respect of their service for 2021. Stock Incentive Plan During 2020, the Company's stockholders approved the Amended and Restated 2016 Evercore Inc. Stock Incentive Plan (the "Amended 2016 Plan"), which amended the prior Amended and Restated 2016 Evercore Inc. Stock Incentive Plan. The Amended 2016 Plan, among other things, authorizes an additional 6,000 shares of the Company's Class A Shares. 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 Amended 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 plan. The total shares available to be granted in the future under the Amended 2016 Plan was 5,093 as of March 31, 2021. 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. The dividend equivalents have the same vesting and delivery terms as the underlying RSU award. The Company estimates forfeitures in the aggregate compensation cost to be amortized over the requisite service period of its awards. The Company periodically monitors its estimated forfeiture rate and adjusts its assumptions to the actual occurrence of forfeited awards. A change in estimated forfeitures is recognized through a cumulative adjustment in the period of the change. 26 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Equity Grants During the three months ended March 31, 2021, pursuant to the Amended 2016 Plan, the Company granted employees 1,983 RSUs that are Service-based Awards. Service-based Awards granted during the three months ended March 31, 2021 had grant date fair values of $ 111.03 to $ 124.61 per share, with an average value of $ 118.26 per share, for an aggregate fair value of $ 234,501 , and generally vest ratably over four years . During the three months ended March 31, 2021, 2,074 Service-based Awards vested and 30 Service-based Awards were forfeited. Compensation expense related to Service-based Awards was $ 51,708 and $ 50,297 for the three months ended March 31, 2021 and 2020, respectively. Deferred Cash 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 $ 96,511 of deferred cash awards pursuant to the deferred cash compensation program during the first quarter of 2021. Compensation expense related to the Company's deferred cash compensation program was $ 30,889 and $ 22,235 for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, the Company expects to pay an aggregate of $ 319,763 related to the Company's deferred cash compensation program at various dates through 2025 and total compensation expense related to these awards not yet recognized was $ 254,151 . The weighted-average period over which this compensation cost is expected to be recognized is 30 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 Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2021. 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 each of March 1, 2020 and 2021, and $ 6,000 is scheduled to vest on each of the next two anniversaries of March 1, 2021, 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. In 2017, the Company granted deferred cash awards of $ 29,500 to certain employees. These awards vest in five equal installments over the period ending June 30, 2022, subject to continued employment. The Company recognizes expense for these awards ratably over the vesting period. In addition, the Company periodically grants deferred cash awards to certain employees. The Company recognizes expense for these awards ratably over the vesting period. Compensation expense related to other deferred cash awards was $ 3,341 and $ 3,345 for the three months ended March 31, 2021 and 2020, respectively. Long-term Incentive Plan 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 a four-year performance period beginning January 1, 2017 (the "2017 Long-term Incentive Plan"). Remaining amounts due pursuant to the 2017 Long-term Incentive Plan, which aggregate $ 48,451 of current liabilities and $ 27,200 of long-term liabilities on the Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2021, are due to be paid, in cash or Class A Shares, at the Company's discretion, in equal installments in the first quarter of 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 and the first cash distribution pursuant to this plan of $ 48,461 was made in March 2021. These awards are subject to retirement eligibility requirements after the performance criteria has been achieved. The Company periodically assesses the probability of the benchmarks being achieved and expenses the probable payout over the requisite service period of the award. During the first quarter of 2020, in assessing the potential impact of the COVID-19 pandemic on the Company's full year 2020 results, management determined it would be appropriate to decrease its expectation for the probable payout of this plan. This analysis included a review of both historical and projected performance for those eligible under the plan. As such, the Company 27 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) reversed $ 6,810 of expense for the three months ended March 31, 2020. The Company recorded $ 4,893 of expense for the three months ended March 31, 2021. As of March 31, 2021, the total remaining expense to be recognized for the 2017 Long-term Incentive Plan over the future vesting period ending March 15, 2023 is $ 20,804 . In April 2021, the Company's Board of Directors approved the issuance of the 2021 Long-term Incentive Plan (the "2021 Long-term Incentive Plan"). Similar to the above arrangement, this plan provides for incentive compensation awards to Advisory Senior Managing Directors, excluding executive officers of the Company, who exceed defined benchmark results over a four-year performance period beginning in 2021. This plan 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 2025, 2026 and 2027, subject to employment at the time of payment. Employee Loans Receivable Periodically, the Company provides new and existing employees with cash payments in the form of loans and/or other cash awards which are subject to ratable vesting terms with service requirements ranging from one to five years and in certain circumstances, subject to the achievement of performance requirements. Generally, the terms of these awards include a requirement of either full or partial repayment of these awards based on the terms of their employment agreements with the Company. In circumstances where the employee meets the Company's minimum credit standards, the Company amortizes these awards to compensation expense over the relevant service period, which is generally the period they are subject to forfeiture. Compensation expense related to these awards was $ 4,149 and $ 4,434 for the three months ended March 31, 2021 and 2020, respectively. The remaining unamortized amount of these awards was $ 30,645 as of March 31, 2021. Separation and Transition Benefits In 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 generated reductions of approximately 8 % of the Company's headcount. In conjunction with the employment reductions, for the three months ended March 31, 2020, the Company incurred expenses related to separation benefits, stay arrangements and accelerated deferred cash compensation (together, the "Termination Costs") of $ 16,431 and the acceleration of the amortization of share-based payments previously granted to affected employees of $ 5,529 (related to 91 RSUs), each recorded in Special Charges, Including Business Realignment Costs, primarily within the Investment Banking segment, on the Company's Unaudited Condensed Consolidated Statements of Operations. The following table presents the change in the Company's Termination Costs liability for the three months ended March 31, 2021 and 2020: For the Three Months Ended March 31, 2021 2020 Beginning Balance $ 4,589 $ 1,151 Termination Costs Incurred 287 16,431 Cash Benefits Paid ( 2,472 ) ( 5,683 ) Non-Cash Charges ( 25 ) ( 435 ) Ending Balance $ 2,379 $ 11,464 In addition to the above Termination Costs incurred, for the three months ended March 31, 2021, the Company also incurred expenses related to the acceleration of the amortization of share-based payments previously granted to affected employees of $ 284 (related to 3 RSUs), recorded in Employee Compensation and Benefits, within the Investment Banking segment, on the Company's Unaudited Condensed Consolidated Statements of Operations. Note 16 – Commitments and Contingencies For a further discussion of the Company's commitments, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Private Equity – As of March 31, 2021, the Company had unfunded commitments for capital contributions of $ 11,787 to private equity funds. These commitments will be funded as required through the end of each private equity fund's investment 28 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) period, subject to certain conditions. Such commitments are satisfied in cash and are generally required to be made as investment opportunities are consummated by the private equity funds. Lines of Credit – On June 24, 2016, Evercore Partners Services East L.L.C. ("East") entered into a loan agreement with PNC Bank, National Association ("PNC") for a revolving credit facility in an aggregate principal amount of up to $ 30,000 , to be used for working capital and other corporate activities. This facility is secured by East's accounts receivable and the proceeds therefrom, as well as certain assets of EGL, including certain of EGL's accounts receivable. In addition, the agreement contains certain reporting covenants, as well as certain debt covenants that prohibit East and the Company from incurring other indebtedness, subject to specified exceptions. The Company and its consolidated subsidiaries were in compliance with these covenants as of March 31, 2021. 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. In addition, the agreement contains certain reporting requirements and debt covenants consistent with the Existing PNC Facility. The Company and its consolidated subsidiaries were in compliance with these covenants as of March 31, 2021. 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 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 March 31, 2021. In addition, EGL's clearing broker provides temporary funding for the settlement of securities transactions. Other Commitments – The Company enters into commitments to pay contingent consideration related to certain of its acquisitions. The Company paid $ 270 and $ 81 of its commitment for contingent consideration related to its acquisition of Kuna & Co, KG during the three months ended March 31, 2021 and 2020, respectively. The contingent consideration was fully paid as of March 31, 2021. Restricted Cash – The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statements of financial condition that sum to the total of amounts shown in the Unaudited Condensed Consolidated Statements of Cash Flows: March 31, 2021 2020 Cash and Cash Equivalents $ 410,848 $ 584,598 Restricted Cash included in Other Assets 8,749 15,542 Total Cash, Cash Equivalents and Restricted Cash shown in the Statement of Cash Flows $ 419,597 $ 600,140 Restricted Cash included in Other Assets on the Unaudited Condensed Consolidated Statements of Financial Condition primarily represents letters of credit which are secured by cash as collateral for the lease of office space and security deposits for certain equipment. The restrictions will lapse when the leases end. Restricted Cash as of March 31, 2020 also includes margin requirements for futures contracts. Futures Contracts – In February 2020, the Company entered into four-month futures contracts on a stock index fund with a notional amount of $ 38,908 , as an economic hedge against the Company's deferred cash compensation program. These contracts settled in June 2020. In accordance with ASC 815, "Derivatives and Hedging" ("ASC 815"), these contracts were carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations. The Company had net unrealized losses of ($ 9,228 ) for the three months ended March 31, 2020. Foreign Exchange – On occasion, the Company enters into foreign currency exchange forward contracts as an economic hedge against exchange rate risk for foreign currency denominated accounts receivable in EGL. There were no foreign currency exchange forward contracts outstanding as of March 31, 2021. 29 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) 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, 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, 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" ("ASC 450") when warranted. Once established, such provisions are adjusted when there is more information available or when an event occurs requiring a change. Note 17 – Regulatory Authorities EGL is a U.S. registered broker-dealer and is subject to the net capital requirements of Rule 15c3-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Under the Alternative Net Capital Requirement, EGL's minimum net capital requirement is $ 250 . EGL's regulatory net capital as of March 31, 2021 and December 31, 2020 was $ 473,895 and $ 586,814 , respectively, which exceeded the minimum net capital requirement by $ 473,645 and $ 586,564 , respectively. Certain other non-U.S. subsidiaries are subject to various securities and banking regulations and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. These subsidiaries are in excess of their local capital adequacy requirements at March 31, 2021. Evercore Trust Company, N.A. ("ETC"), which is limited to fiduciary activities, is regulated by the Office of the Comptroller of the Currency ("OCC") and is a member bank of the Federal Reserve System. The Company, Evercore LP and ETC are subject to written agreements with the OCC that, among other things, require the Company and Evercore LP to maintain at least $ 5,000 in Tier 1 capital in ETC (or such other amount as the OCC may require) and maintain liquid assets in ETC in an amount at least equal to the greater of $ 3,500 or 180 days coverage of ETC's operating expenses. The Company was in compliance with the aforementioned agreements as of March 31, 2021. Note 18 – Income Taxes The Company's Provision for Income Taxes was $ 31,681 and $ 13,551 for the three months ended March 31, 2021 and 2020, respectively. The effective tax rate was 16.1 % and 25.8 % for the three months ended March 31, 2021 and 2020, respectively. The effective tax rate reflects net excess tax benefits associated with the appreciation in the Company's share price upon vesting of employee share-based awards above the original grant price of $ 16,669 and $ 647 being recognized in the Company's Provision for Income Taxes for the three months ended March 31, 2021 and 2020, respectively, and resulted in a reduction in the effective tax rate of 8 and 1 percentage points for the three months ended March 31, 2021 and 2020, respectively. The effective tax rate for the three months ended March 31, 2021 and 2020 also reflects the effect of certain nondeductible expenses, including expenses related to Class J LP Units and Class I-P and K-P Units, as well as the noncontrolling interest associated with LP Units and other adjustments. Additionally, the Company is subject to the income tax effects associated with the global intangible low-taxed income ("GILTI") provisions in the period incurred. For the three months ended March 31, 2021 and 2020, no additional income tax expense associated with the GILTI provisions has been recognized and it is not expected to be material to the Company’s effective tax rate for the year. The Company reported a decrease in deferred tax assets of $ 13 associated with changes in Unrealized Gain (Loss) on Securities and Investments and a decrease of $ 638 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the three months ended March 31, 2021. The Company reported an increase in deferred tax assets of $ 284 associated with changes in Unrealized Gain (Loss) on Securities and 30 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Investments and an increase of $ 3,995 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the three months ended March 31, 2020. The Company classifies interest relating to tax matters and tax penalties as a component of income tax expense in its Unaudited Condensed Consolidated Statements of Operations. As of March 31, 2021, there were $ 376 of unrecognized tax benefits that, if recognized, $ 306 would affect the effective tax rate. The Company anticipates approximately $ 122 of unrecognized tax benefits may be recognized within a year, as a result of the lapse in the statute of limitations. Related to the unrecognized tax benefits, the Company accrued interest and penalties of $ 10 and $ 1 , respectively, during the three months ended March 31, 2021. Note 19 – Segment Operating Results Business Segments – The Company's business results are categorized into the following two segments: Investment Banking and Investment Management. Investment Banking includes providing advice to clients on significant mergers, acquisitions, divestitures and other strategic corporate transactions, as well as services related to securities underwriting, private placement services and commissions for agency-based equity trading services and equity research. Investment Management includes advising third-party investors in Institutional Asset Management and Wealth Management and interests in private equity funds which are not managed by the Company. The Company 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. The Company's segment information for the three months ended March 31, 2021 and 2020 is prepared using the following methodology: • Revenue, expenses and income (loss) from equity method investments directly associated with each segment are included in determining pre-tax income. • 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 the Company's 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 • 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 • Realized and unrealized gains and losses on interests in Private Equity funds which are not managed by the Company • Interest expense associated with the Company’s Notes Payable and lines of credit, as well as revenue and expenses associated with repurchase or resale transactions (prior to the sale of the Company's ECB business in December 2020) Each segment's Operating Expenses include: a) employee compensation and benefits expenses that are incurred directly in support of the segment and b) non-compensation expenses, which include expenses for premises and occupancy, professional fees, travel and entertainment, communications and information services, execution, clearing and custody fees, equipment and indirect support costs (including compensation and other operating expenses related thereto) for administrative services. Such administrative services include, but are not limited to, accounting, tax, legal, technology, human capital, facilities management and senior management activities. 31 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Other Expenses include the following: • Amortization of LP Units and Certain Other Awards – Includes amortization costs associated with the vesting of Class J LP Units issued in conjunction with the acquisition of ISI and certain other related awards. • Special Charges, Including Business Realignment Costs – Includes expenses in 2020 related to separation and transition benefits and related costs as a result of the Company's review of its operations and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the previously announced expansion of the Company's headquarters in New York and the Company's business realignment initiatives. • Acquisition and Transition Costs – Includes costs incurred in connection with acquisitions, divestitures and other ongoing business development initiatives, primarily comprised of professional fees for legal and other services. • Intangible Asset and Other Amortization – Includes amortization of intangible assets and other purchase accounting-related amortization associated with certain acquisitions. The Company evaluates segment results based on net revenues and pre-tax income, both including and excluding the impact of the Other Expenses. No client accounted for more than 10% of the Company's Consolidated Net Revenues for the three months ended March 31, 2021. The following information presents each segment's contribution. For the Three Months Ended March 31, 2021 2020 Investment Banking Net Revenues (1) $ 647,285 $ 413,656 Operating Expenses 456,526 339,795 Other Expenses (2) 7 25,226 Operating Income 190,752 48,635 Income from Equity Method Investments 169 536 Pre-Tax Income $ 190,921 $ 49,171 Identifiable Segment Assets $ 2,576,598 $ 2,070,887 Investment Management Net Revenues (1) $ 15,025 $ 13,351 Operating Expenses 11,569 12,651 Other Expenses (2) — 32 Operating Income 3,456 668 Income from Equity Method Investments 2,855 2,592 Pre-Tax Income $ 6,311 $ 3,260 Identifiable Segment Assets $ 149,315 $ 150,665 Total Net Revenues (1) $ 662,310 $ 427,007 Operating Expenses 468,095 352,446 Other Expenses (2) 7 25,258 Operating Income 194,208 49,303 Income from Equity Method Investments 3,024 3,128 Pre-Tax Income $ 197,232 $ 52,431 Identifiable Segment Assets $ 2,725,913 $ 2,221,552 32 Table of Contents EVERCORE INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) (1) Net revenues include Other Revenue, net, allocated to the segments as follows: For the Three Months Ended March 31, 2021 2020 Investment Banking (A) $ 2,584 $ ( 21,592 ) Investment Management 76 604 Total Other Revenue, net $ 2,660 $ ( 20,988 ) (A) Investment Banking Other Revenue, net, includes interest expense on the Notes Payable of $ 4,570 and $ 4,842 for the three months ended March 31, 2021 and 2020, respectively. (2) Other Expenses are as follows: For the Three Months Ended March 31, 2021 2020 Investment Banking Amortization of LP Units and Certain Other Awards $ — $ 1,067 Special Charges, Including Business Realignment Costs — 23,644 Acquisition and Transition Costs 7 8 Intangible Asset and Other Amortization — 507 Total Investment Banking 7 25,226 Investment Management Special Charges, Including Business Realignment Costs — 32 Acquisition and Transition Costs — — Total Investment Management — 32 Total Other Expenses $ 7 $ 25,258 Geographic Information – The Company manages its business based on the profitability of the enterprise as a whole. The Company's revenues were derived from clients located and managed in the following geographical areas: For the Three Months Ended March 31, 2021 2020 Net Revenues: (1) United States $ 460,648 $ 365,400 Europe and Other 198,614 80,021 Latin America 388 2,574 Total $ 659,650 $ 447,995 (1) Excludes Other Revenue, Including Interest and Investments, and Interest Expense. The Company's total assets are located in the following geographical areas: March 31, 2021 December 31, 2020 Total Assets: United States $ 2,245,175 $ 2,862,343 Europe and Other 480,738 508,545 Total $ 2,725,913 $ 3,370,888 33 Table of Contents