What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-03 compared with 2021-08-03 · 196 added, 192 removed, 371 unchanged (51% of the section changed)

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Other Revenue includes the following:

• Interest income and income (losses) earned on investment securities, including our investment funds and futures contracts which are used as an economic hedge against our deferred cash compensation program, certificates of deposit, cash and cash equivalents and on our debt security investment in G5

See Note 8 to our unaudited condensed consolidated financial statements for further information.)

• Adjustments to amounts due pursuant to our tax receivable agreement, subsequent to its initial establishment, related to changes in enacted tax rates

1 unchanged sentence

• Realized and unrealized gains and losses on interests in private equity funds which we do not manage

• A gain on the sale of the ECB Trust Business in 2020.

See Note 5 to our unaudited condensed consolidated financial statements for further information.

Interest Expense includes interest expense associated with our Notes Payable and lines of credit.

6 unchanged sentences

We maintain compensation programs, including base salary, cash, deferred cash and equity bonus awards and benefits programs and manage compensation to estimates of competitive levels based on market conditions and performance.

of compensation, including deferred compensation, reflects our plan to maintain competitive compensation levels to retain key personnel, and it reflects the impact of newly-hired senior professionals, including related grants of equity awards which are generally valued at their grant date.

Our level of compensation, including deferred compensation, reflects our plan to maintain competitive compensation levels to retain key personnel, and it reflects the impact of newly-hired senior professionals, including related grants of equity awards which are generally valued at their grant date.

Increasing the number of high-caliber, experienced senior level employees is critical to our growth efforts.

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• 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.

• Special Charges, Including Business Realignment Costs – Includes expenses in 2020 related to separation and transition benefits and related costs as a result of our review of operations and the acceleration of depreciation expense

for leasehold improvements and certain other fixed assets in conjunction with the expansion of our headquarters in New York and our business realignment initiatives.

• Special Charges, Including Business Realignmen t Costs – Includes expenses in 2021 related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our current investment strategy, we decided to wind down during the third quarter.

Includes expenses in 2020 related to separation and transition benefits and related costs as a result of our review of operations and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of our headquarters in New York and our 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.

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Income from Equity Method Investments

Our share of the income (loss) from our equity interests in ABS, Atalanta Sosnoff and Luminis are included within Income from Equity Method Investments, as a component of Income Before Income Taxes, on the Unaudited Condensed Consolidated Statements of Operations.

In July 2021, we acquired a 20% interest in Seneca Evercore for $0.5 million and will maintain proportional representation on the board of directors of Seneca Evercore (but not less than one director) following this transaction.

We will account for our interest under the equity method of accounting and present our share of the income (loss) from our interest within Income from Equity Method Investments, as a component of Income Before Income Taxes, on the Unaudited Condensed Consolidated Statements of Operations.

Our share of the income (loss) from our equity interests in ABS, Atalanta Sosnoff, Luminis and Seneca Evercore are included within Income from Equity Method Investments, as a component of Income Before Income Taxes, on the Unaudited Condensed Consolidated Statements of Operations.

On July 7, 2021, we acquired a 20% interest in Seneca Evercore for $0.5 million and maintain proportional representation on the board of directors of Seneca Evercore (but not less than one director) following this transaction.

We account for our interest under the equity method of accounting and present our share of the income (loss) from our interest within Income from Equity Method Investments, as a component of Income Before Income Taxes, on the Unaudited Condensed Consolidated Statements of Operations.

Provision for Income Taxes

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Results of Operations

The following is a discussion of our results of operations for the three and six months ended June 30, 2021 and 2020.

The following is a discussion of our results of operations for the three and nine months ended September 30, 2021 and 2020.

For a more detailed discussion of the factors that affected the revenue and operating expenses of our Investment Banking and Investment Management business segments in these periods, see the discussion in "Business Segments" below.

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2021 2020 Change 2021 2020 Change

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Asset Management and Administration Fees 16,960 14,025 21 % 48,092 39,725 21 %

Other Revenue, Including Interest and Investments 16,401 15,116 9 % 23,631 168 NM

Other Revenue, Including Interest and Investments 1,511 12,329 (88 %) 25,142 12,497 101 %

Total Revenues 827,948 407,518 103 % 2,186,999 1,352,969 62 %

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Operating Expenses 569,848 330,826 72 % 1,518,795 1,094,455 39 %

Other Expenses — 9,163 NM 7 34,421 (100 %)

Other Expenses 8,554 8,003 7 % 8,561 42,424 (80 %)

Total Expenses 578,402 338,829 71 % 1,527,356 1,136,879 34 %

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Common Shareholders $ 3.74 $ 1.01 270 % $ 10.19 $ 3.09 230 %

As of June 30, 2021 and 2020, we employed approximately 1,900 and 1,775 people, respectively, worldwide.

Three Months Ended June 30, 2021 versus June 30, 2020

As of September 30, 2021 and 2020, we employed approximately 1,950 and 1,900 people, respectively, worldwide.

Three Months Ended September 30, 2021 versus September 30, 2020

Net Income Attributable to Evercore Inc.

was $140.4 million for the three months ended June 30, 2021, an increase of $83.9 million, or 149%, compared to $56.4 million for the three months ended June 30, 2020.

was $159.5 million for the three months ended September 30, 2021, an increase of $116.9 million, or 274%, compared to $42.6 million for the three months ended September 30, 2020.

The changes in our operating results during these periods are described below.

Net Revenues were $687.9 million for the three months ended June 30, 2021, an increase of $180.8 million, or 36%, versus Net Revenues of $507.1 million for the three months ended June 30, 2020.

Advisory Fees increased $224.4 million, or 67%, Underwriting Fees decreased $45.5 million, or 49%, and Commissions and Related Revenue decreased $3.6 million, or 7%, compared to the three months ended June 30, 2020.

Asset Management and Administration Fees increased $3.2 million, or 25%, compared to the three months ended June 30, 2020.

Other Revenue, Including Interest and In vestments, increased 9% compared to the three months ended June 30, 2020, primarily driven by the gain on the redemption of the G5 debt security in the second quarter of 2021, partially offset by lower performance of our investment funds portfolio, which is used as an

economic hedge against our deferred cash compensation program.

Net Revenues were $823.6 million for the three months ended September 30, 2021, an increase of $421.0 million, or 105%, versus Net Revenues of $402.5 million for the three months ended September 30, 2020.

Advisory Fees increased $437.7 million, or 162%, Underwriting Fees decreased $12.1 million, or 18%, and Commissions and Related Revenue increased $2.8 million, or 6%, compared to the three months ended September 30, 2020.

Asset Management and Administration Fees increased $2.9 million, or 21%, compared to the three months ended September 30, 2020.

Other Revenue, Including Interest and In vestments, decreased $10.8 million, or 88%, compared to the three months ended September 30, 2020, primarily driven by lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash

compensation program.

For further information see Notes 7 and 16 to our unaudited condensed consolidated financial statements.

Total Operating Expenses were $480.9 million for the three months ended June 30, 2021, compared to $411.2 million for the three months ended June 30, 2020, an increase of $69.7 million, or 17%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $407.8 million for the three months ended June 30, 2021, an increase of $73.8 million, or 22%, versus expense of $334.0 million for the three months ended June 30, 2020.

The increase in the amount of compensation recognized for the three months ended June 30, 2021 principally reflects higher levels of incentive compensation, higher amortization of prior period deferred compensation awards and higher base salaries.

Non-Compensation expenses, as a component of Operating Expenses, were $73.1 million for the three months ended June 30, 2021, a decrease of $4.1 million, or 5%, versus $77.2 million for the three months ended June 30, 2020.

Non-Compensation operating expenses decreased compared to the three months ended June 30, 2020, primarily driven by a decrease in bad debt expense, which was due in part to recoveries in 2021, partially offset by an increase in professional fees.

Non-Compensation expenses per employee were approximately $39.4 thousand for the three months ended June 30, 2021, versus $42.6 thousand for the three months ended June 30, 2020.

Total Other Expenses of $9.2 million for the three months ended June 30, 2020 included (a) Special Charges, Including Business Realignment Costs, of $8.6 million related to separation and transition benefits and related costs and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of our headquarters in New York and our business realignment initiatives, (b) intangible asset and other amortization of $0.5 million and (c) Acquisition and Transition Costs of $0.1 million.

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 59.3% for the three months ended June 30, 2021, compared to 65.9% for the three months ended June 30, 2020.

The compensation ratio for the three months ended June 30, 2020 was 67.5% when the $8.2 million of separation and transition benefits expense, which is presented within Special Charges, Including Business Realignment Costs, is also included.

The decrease in the compensation ratio principally reflects leverage achieved on higher revenues, partially offset by higher levels of incentive compensation, higher amortization of prior period deferred compensation awards and higher base salaries.

Income from Equity Method Investments was $3.4 million for the three months ended June 30, 2021, compared to $2.3 million for the three months ended June 30, 2020.

The increase was driven by an increase in earnings from ABS, Luminis and Atalanta Sosnoff during the three months ended June 30, 2021.

The provision for income taxes for the three months ended June 30, 2021 was $46.5 million, which reflected an effective tax rate of 22.1%.

The provision for income taxes for the three months ended June 30, 2020 was $21.8 million, which reflected an effective tax rate of 24.5%.

The provision for income taxes for the three months ended June 30, 2021 reflects an additional tax benefit of $0.3 million and for the three months ended June 30, 2020 an additional tax expense of $0.5 million due to the net impact associated with the appreciation or depreciation in our share price upon vesting of employee share-based awards above or below the original grant price, the effect of certain nondeductible expenses, including expenses related to Class I-P and K-P Units, as well as the noncontrolling interest associated with LP Units and other adjustments.

Net Income Attributable to Noncontrolling Interest was $23.6 million for the three months ended June 30, 2021 compared to $10.8 million for the three months ended June 30, 2020.

The increase in Net Income Attributable to Noncontrolling Interest primarily reflects higher earnings for Evercore LP during the three months ended June 30, 2021.

Six Months Ended June 30, 2021 versus June 30, 2020

Total Operating Expenses were $569.8 million for the three months ended September 30, 2021, compared to $330.8 million for the three months ended September 30, 2020, an increase of $239.0 million, or 72%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $486.5 million for the three months ended September 30, 2021, an increase of $226.7 million, or 87%, versus expense of $259.8 million for the three months ended September 30, 2020.

The increase in the amount of compensation recognized for the three months ended September 30, 2021 principally reflects a higher accrual for incentive compensation, higher base salaries and higher amortization of prior period deferred compensation awards, as well as increased headcount year over year.

Non-Compensation expenses, as a component of Operating Expenses, were $83.3 million for the three months ended September 30, 2021, an increase of $12.3 million, or 17%, versus $71.0 million for the three months ended September 30, 2020.

Non-Compensation operating expenses increased compared to the three months ended September 30, 2020, primarily driven by increases in professional fees and travel and related expenses.

Non-Compensation expenses per employee were approximately $43.3 thousand for the three months ended September 30, 2021, versus $40.4 thousand for the three months ended September 30, 2020.

Total Other Expenses of $8.6 million for the three months ended September 30, 2021 included Special Charges, Including Business Realignment Costs, related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our current investment strategy, we decided to wind down during the third quarter of 2021.

Total Other Expenses of $8.0 million for the three months ended September 30, 2020 included (a) Special Charges, Including Business Realignment Costs, of $7.4 million related to separation and transition benefits and related costs and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of our headquarters in New York and our business realignment initiatives, (b) Acquisition and Transition Costs of $0.5 million and (c) intangible asset and other amortization of $0.2 million.

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 59.1% for the three months ended September 30, 2021, compared to 64.5% for the three months ended September 30, 2020.

The decrease in the compensation ratio principally reflects leverage achieved on higher revenues, partially offset by a higher accrual for incentive compensation, higher base salaries and higher amortization of prior period deferred compensation awards, as well as increased headcount year over year.

Income from Equity Method Investments was $3.7 million for the three months ended September 30, 2021, compared to $3.1 million for the three months ended September 30, 2020.

The increase was primarily driven by an increase in earnings from ABS and Atalanta Sosnoff.

The provision for income taxes for the three months ended September 30, 2021 was $59.7 million, which reflected an effective tax rate of 24.0%.

The provision for income taxes for the three months ended September 30, 2020 was $15.7 million, which reflected an effective tax rate of 23.5%.

The provision for income taxes for the three months ended September 30, 2021 reflects an additional tax benefit of $0.4 million and for the three months ended September 30, 2020 an additional tax expense of $0.2 million due to the net impact associated with the appreciation or depreciation in our share price upon vesting of employee share-based awards above or below the original grant price, the effect of certain nondeductible expenses, including expenses related to Class I-P and K-P Units, as well as the noncontrolling interest associated with LP Units and other adjustments.

Net Income Attributable to Noncontrolling Interest was $29.6 million for the three months ended September 30, 2021 compared to $8.5 million for the three months ended September 30, 2020.

The increase in Net Income Attributable to Noncontrolling Interest primarily reflects higher earnings for Evercore LP during the three months ended September 30, 2021.

Nine Months Ended September 30, 2021 versus September 30, 2020

Net Income Attributable to Evercore Inc.

was $284.7 million for the six months ended June 30, 2021, an increase of $197.1 million, or 225%, compared to $87.6 million for the six months ended June 30, 2020.

was $444.3 million for the nine months ended September 30, 2021, an increase of $314.1 million, or 241%, compared to $130.2 million for the nine months ended September 30, 2020.

The changes in our operating results during these periods are described below.

Net Revenues were $1.35 billion for the six months ended June 30, 2021, an increase of $416.1 million, or 45%, versus Net Revenues of $934.1 million for the six months ended June 30, 2020.

Advisory Fees increased $377.7 million, or 54%, Underwriting Fees increased $12.6 million, or 11%, and Commissions and Related Revenue decreased $5.6 million, or 5%, compared to the six months ended June 30, 2020.

Asset Management and Administration Fees increased $5.4 million, or 21%, compared to the six months ended June 30, 2020.

Other Revenue, Including Interest and Investments, increased compared to the six months ended June 30, 2020, which was primarily driven by a shift from net losses of $6.8 million for the six months ended June 30, 2020 to gains of $16.0 million for the six months ended June 30, 2021 on our investment funds portfolio, which

is used as an economic hedge against our deferred cash compensation program, as well as the gain on the redemption of the G5 debt security in the second quarter of 2021.

Net Revenues were $2.17 billion for the nine months ended September 30, 2021, an increase of $837.1 million, or 63%, versus Net Revenues of $1.34 billion for the nine months ended September 30, 2020.

Advisory Fees increased $815.4 million, or 84%, Underwriting Fees increased $0.5 million and Commissions and Related Revenue decreased $2.9 million, or 2%, compared to the nine months ended September 30, 2020.

Asset Management and Administration Fees increased $8.4 million, or

21%, compared to the nine months ended September 30, 2020.

Other Revenue, Including Interest and Investments, increased $12.6 million, or 101%, compared to the nine months ended September 30, 2020, which was primarily driven by higher performance of our investment funds portfolio, as well as a gain on the redemption of the G5 debt security in the second quarter of 2021.

For further information see Notes 7, 8 and 16 to our unaudited condensed consolidated financial statements.

Total Operating Expenses were $948.9 million for the six months ended June 30, 2021, compared to $763.6 million for the six months ended June 30, 2020, an increase of $185.3 million, or 24%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $803.2 million for the six months ended June 30, 2021, an increase of $199.5 million, or 33%, versus expense of $603.7 million for the six months ended June 30, 2020.

The increase in the amount of compensation recognized in the six months ended June 30, 2021 is driven by higher levels of incentive compensation, higher amortization of prior period deferred compensation awards and higher base salaries.

Non-compensation expenses as a component of Operating Expenses were $145.7 million for the six months ended June 30, 2021, a decrease of $14.2 million, or 9%, versus $159.9 million for the six months ended June 30, 2020.

Non-compensation operating expenses decreased compared to the six months ended June 30, 2020, primarily driven by decreased travel and related expenses, as a substantial number of employees continued to work remotely in 2021, as well as a decrease in bad debt expense, which was due in part to recoveries in 2021, partially offset by an increase in professional fees.

Non-Compensation expenses per employee were approximately $79.3 thousand for the six months ended June 30, 2021, versus $86.7 thousand for the six months ended June 30, 2020.

Total Other Expenses of $0.01 million for the six months ended June 30, 2021 reflected Acquisition and Transition Costs.

Total Other Expenses of $34.4 million for the six months ended June 30, 2020 included (a) Special Charges, Including Business Realignment Costs, of $32.2 million related to separation and transition benefits and related costs and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of our headquarters in New York and our business realignment initiatives, (b) compensation costs of $1.1 million associated with the vesting of Class J LP Units, (c) intangible asset and other amortization of $1.0 million and (d) Acquisition and Transition Costs of $0.1 million.

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 59.5% for the six months ended June 30, 2021, compared to 64.7% for the six months ended June 30, 2020.

The compensation ratio for the six months ended June 30, 2020 was 68.0% when the $30.2 million of separation and transition benefits expense, which is presented within Special Charges, Including Business Realignment Costs, is also included.

Income from Equity Method Investments was $6.4 million for the six months ended June 30, 2021, compared to $5.4 million for the six months ended June 30, 2020.

The increase was a result of an increase in earnings from ABS, Atalanta Sosnoff and Luminis during the six months ended June 30, 2021.

The provision for income taxes for the six months ended June 30, 2021 was $78.2 million, which reflected an effective tax rate of 19.2%.

The provision for income taxes for the six months ended June 30, 2020 was $35.4 million, which reflected an effective tax rate of 25.0%.

The provision for income taxes for the six months ended June 30, 2021 and 2020 reflects the net impact of the deduction associated with the appreciation of our share price upon vesting of employee share-based awards above the original grant price of $17.0 million and $0.1 million, respectively, 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.

Net Income Attributable to Noncontrolling Interest was $44.8 million for the six months ended June 30, 2021 compared to $18.5 million for the six months ended June 30, 2020.

The increase in Net Income Attributable to Noncontrolling Interest primarily reflects higher earnings for Evercore LP during the six months ended June 30, 2021.

Total Operating Expenses were $1.52 billion for the nine months ended September 30, 2021, compared to $1.09 billion for the nine months ended September 30, 2020, an increase of $424.3 million, or 39%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $1.29 billion for the nine months ended September 30, 2021, an increase of $426.1 million, or 49%, versus expense of $863.5 million for the nine months ended September 30, 2020.

The increase in the amount of compensation recognized in the nine months ended September 30, 2021 is driven by a higher accrual for incentive compensation, higher base salaries and higher amortization of prior period deferred compensation awards, as well as increased headcount year over year.

Non-compensation expenses as a component of Operating Expenses were $229.1 million for the nine months ended September 30, 2021, a decrease of $1.8 million, or 1%, versus $230.9 million for the nine months ended September 30, 2020.

Non-compensation operating expenses decreased compared to the nine months ended September 30, 2020, primarily driven by a decrease in travel and related expenses, as well as a decrease in bad debt expense, partially offset by an increase in professional fees.

Non-Compensation expenses per employee were approximately $122.8 thousand for the nine months ended September 30, 2021, versus $123.3 thousand for the nine months ended September 30, 2020.

Total Other Expenses of $8.6 million for the nine months ended September 30, 2021 included (a) Special Charges, Including Business Realignment Costs, of $8.6 million related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our current investment strategy, we decided to wind down during the third quarter of 2021 and (b) Acquisition and Transition Costs of $0.01 million.

Total Other Expenses of $42.4 million for the nine months ended September 30, 2020 included (a) Special Charges, Including Business Realignment Costs, of $39.6 million related to separation and transition benefits and related costs and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of our headquarters in New York and our business realignment initiatives, (b) intangible asset and other amortization of $1.2 million, (c) compensation costs of $1.1 million associated with the vesting of Class J LP Units granted in conjunction with the acquisition of ISI and (d) Acquisition and Transition Costs of $0.6 million.

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 59.3% for the nine months ended September 30, 2021, compared to 64.7% for the nine months ended September 30, 2020.

Income from Equity Method Investments was $10.1 million for the nine months ended September 30, 2021, compared to $8.6 million for the nine months ended September 30, 2020.

The increase was a result of an increase in earnings from ABS, Atalanta Sosnoff and Luminis during the nine months ended September 30, 2021.

The provision for income taxes for the nine months ended September 30, 2021 was $137.9 million, which reflected an effective tax rate of 21.0%.

The provision for income taxes for the nine months ended September 30, 2020 was $51.0 million, which reflected an effective tax rate of 24.5%.

The provision for income taxes for the nine months ended September 30, 2021 reflects an additional tax benefit of $17.4 million and for the nine months ended September 30, 2020 an additional tax expense of $0.1 million due to the net impact associated with the appreciation or depreciation in our share price upon vesting of employee share-based awards above or below the original grant price, 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.

Net Income Attributable to Noncontrolling Interest was $74.3 million for the nine months ended September 30, 2021 compared to $27.0 million for the nine months ended September 30, 2020.

The increase in Net Income Attributable to Noncontrolling Interest primarily reflects higher earnings for Evercore LP during the nine months ended September 30, 2021.

Business Segments

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The following table summarizes the operating results of the Investment Banking segment.

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2021 2020 Change 2021 2020 Change

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Other Revenue, net (1)(2)(3)

11,233 11,039 2 % 13,817 (10,553) NM

(2,559) 4,299 NM 11,258 (6,254) NM

Net Revenues 806,918 385,463 109 % 2,125,023 1,294,493 64 %

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Pre-Tax Income $ 251,205 $ 59,675 321 % $ 645,335 $ 195,646 230 %

(1) We renamed "Commissions and Related Fees" to "Commissions and Related Revenue" and reclassified $0.2 million and $0.4 million of principal trading gains and losses from our institutional equities business from "Other Revenue, net" to "Commissions and Related Revenue" for the three and six months ended June 30, 2020, respectively.

(1) We renamed "Commissions and Related Fees" to "Commissions and Related Revenue" and reclassified $0.2 million and $0.6 million of principal trading gains and losses from our institutional equities business from "Other Revenue, net" to "Commissions and Related Revenue" for the three and nine months ended September 30, 2020, respectively.

See Note 2 to our unaudited condensed consolidated financial statements for further information.

(2) Includes interest expense on Notes Payable of $4.3 million and $8.9 million for the three and six months ended June 30, 2021, respectively, and $4.5 million and $9.4 million for the three and six months ended June 30, 2020, respectively .

(3) Includes a gain of $4.4 million for the three and six months ended June 30, 2021, resulting from the redemption of our G5 debt security.

(2) Includes interest expense on Notes Payable and lines of credit of $4.4 million and $13.3 million for the three and nine months ended September 30, 2021, respectively, and $4.2 million and $13.6 million for the three and nine months ended September 30, 2020, respectively .

(3) Includes a gain of $4.4 million for the nine months ended September 30, 2021, resulting from the redemption of our G5 debt security during the second quarter of 2021.

(4) Equity in Luminis is classified as Income from Equity Method Investments.

For the three months ended June 30, 2021, the dollar value of North American announced and completed M&A activity increased 491% and decreased 14%, respectively, compared to the three months ended June 30, 2020, and the dollar value of Global announced and completed M&A activity increased 185% and 2%, respectively, compared to the three months ended June 30, 2020.

For the three months ended June 30, 2021, the dollar value of North American and Global announced M&A activity between $1 - $5 billion increased 463% and 396%, respectively, compared to the three months ended June 30, 2020.

For the six months ended June 30, 2021, the dollar value of North American announced and completed M&A activity increased 266% and 1%, respectively, compared to the six months ended June 30, 2020, and the dollar value of Global announced and completed M&A activity increased 132% and 17%, respectively, compared to the six months ended June 30, 2020.

For the six months ended June 30, 2021, the dollar value of North American and Global announced M&A activity between $1 - $5 billion increased 302% and 260%, respectively, compared to the six months ended June 30, 2020.

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

For the three months ended September 30, 2021, the dollar value of North American announced and completed M&A activity increased 39% and 231%, respectively, compared to the three months ended September 30, 2020, and the dollar value of Global announced and completed M&A activity increased 44% and 94%, respectively, compared to the three months ended September 30, 2020.

For the nine months ended September 30, 2021, the dollar value of North American announced and completed M&A activity increased 145% and 49%, respectively, compared to the nine months ended September 30, 2020, and the dollar value of Global announced and completed M&A activity increased 90% and 43%, respectively, compared to the nine months ended September 30, 2020.

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2021 2020 Change 2021 2020 Change

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Value of North American M&A Deals Announced $ 629 $ 452 39 % $ 2,065 $ 844 145 %

Value of North American M&A Deals Announced between $1 - $5 billion $ 214 $ 38 463 % $ 491 $ 122 302 %

Value of North American M&A Deals Completed $ 642 $ 194 231 % $ 1,478 $ 995 49 %

Value of Global M&A Deals Announced $ 1,570 $ 1,090 44 % $ 4,327 $ 2,274 90 %

Value of Global M&A Deals Announced between $1 - $5 billion $ 417 $ 84 396 % $ 882 $ 245 260 %

Value of Global M&A Deals Completed $ 1,160 $ 599 94 % $ 2,964 $ 2,071 43 %

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Total Number of Fees From Advisory Client Transactions 257 206 25 % 586 475 23 %

Investment Banking Fees of at Least $1 million from Advisory Client Transactions 115 77 49 % 218 150 45 %

Total Number of Fees of at Least $1 million from Advisory Client Transactions 130 74 76 % 349 224 56 %

Total Number of Underwriting Transactions 28 30 (7 %) 98 78 26 %

Total Number of Underwriting Transactions as a Bookrunner 26 23 13 % 82 52 58 %

Refinitiv June 30, 2021

Refinitiv September 30, 2021

** Includes revenue generating clients

Investment Banking Results of Operations

Three Months Ended June 30, 2021 versus June 30, 2020

Investment Banking Net Revenues were $670.8 million for the three months ended June 30, 2021, compared to $495.4 million for the three months ended June 30, 2020, an increase of $175.4 million, or 35%.

We earned 255 fees from Advisory clients for the three months ended June 30, 2021, compared to 222 for the three months ended June 30, 2020, representing a 15% increase.

We earned 115 fees in excess of $1.0 million for the three months ended June 30, 2021, compared to 77 for the three months ended June 30, 2020, representing a 49% increase.

The increase in revenues from the three months ended June 30, 2020 was primarily driven by an increase of $224.4 million, or 67%, in Advisory Fees, reflecting an increase in the number of Advisory fees earned and an increase in revenue earned from large transactions during the three months ended June 30, 2021.

Underwriting Fees decreased $45.5 million, or 49%, compared to the three months ended June 30, 2020, reflecting a decrease in the number of transactions we participated in, as well as the relative fee size of those transactions.

Commissions and Related Revenue decreased $3.6 million, or 7%, compared to the three months ended June 30, 2020.

Other Revenue, net, for the three months ended June 30, 2021 increased 2% versus the three months ended June 30, 2020, primarily driven by the gain on the redemption of the G5 debt security in the second quarter of 2021, partially offset by lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program.

Operating Expenses were $468.2 million for the three months ended June 30, 2021, compared to $399.5 million for the three months ended June 30, 2020, an increase of $68.7 million, or 17%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $398.2 million for the three months ended June 30, 2021, compared to $325.7 million for the three months ended June 30, 2020, an increase of $72.5 million, or 22%.

Non-Compensation expenses, as a component of Operating Expenses, were $70.0 million for the three months ended June 30, 2021, compared to $73.8 million for the three months ended June 30, 2020, a decrease of $3.8 million, or 5%.

Non-Compensation operating expenses decreased from the three months ended June 30, 2020 primarily driven by a decrease in bad debt expense, partially offset by an increase in professional fees.

Other Expenses of $9.2 million for the three months ended June 30, 2020 included (a) Special Charges, Including Business Realignment Costs, of $8.6 million related to separation and transition benefits and related costs and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of our headquarters in New York and our business realignment initiatives, (b) intangible asset amortization of $0.5 million and (c) Acquisition and Transition Costs of $0.1 million.

Six Months Ended June 30, 2021 versus June 30, 2020

Investment Banking Net Revenues were $1.32 billion for the six months ended June 30, 2021, compared to $909.0 million for the six months ended June 30, 2020, an increase of $409.1 million, or 45%.

We earned 418 fees from Advisory clients for the six months ended June 30, 2021, compared to 358 for the six months ended June 30, 2020, representing a 17% increase.

We earned 218 fees in excess of $1.0 million for the six months ended June 30, 2021, compared to 150 for the six months ended June 30, 2020, representing a 45% increase.

The increase in revenues from the six months ended June 30, 2020 was primarily driven by an increase of $377.7 million, or 54%, in Advisory Fees, reflecting an increase in the number of Advisory fees earned and an increase in revenue earned from large transactions during the six months ended June 30, 2021.

Underwriting Fees increased $12.6 million, or 11%, compared to the six months ended June 30, 2020, reflecting an increase in the number of transactions we participated in, as well as the relative size of our participation in those transactions .

Commissions and Related Revenue decreased $5.6 million, or 5%, compared to the six months ended June 30, 2020.

Other Revenue, net, for the six months ended June 30, 2021 increased versus the six months ended June 30, 2020, primarily driven by a shift from net losses of $6.8 million for the six months ended June 30, 2020 to gains of $16.0 million for the six months ended June 30, 2021 on our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program, as well as the gain on the redemption of the G5 debt security in the second quarter of 2021.

Operating Expenses were $924.7 million for the six months ended June 30, 2021, compared to $739.3 million for the six months ended June 30, 2020, an increase of $185.4 million, or 25%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $784.8 million for the six months ended June 30, 2021, compared to $586.6 million for the six months ended June 30, 2020, an increase of $198.2 million, or 34%.

Non-compensation expenses, as a component of Operating Expenses, were $139.9 million for the six months ended June 30, 2021, compared to $152.7 million for the six months ended June 30, 2020 , a decrease of $12.8 million, or 8%.

Non-compensation operating expenses decreased from the six months ended June 30, 2020 primarily driven by decreased travel and related expenses, as a substantial number of employees continued to work remotely in 2021, as well as a decrease in bad debt expense, partially offset by an increase in professional fees.

Other Expenses of $0.01 million for the six months ended June 30, 2021 reflected Acquisition and Transition Costs.

Other Expenses of $34.4 million for the six months ended June 30, 2020 included (a) Special Charges, Including Business Realignment Costs, of $32.2 million related to separation and transition benefits and related costs and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of our headquarters in New York and our business realignment initiatives, (b) compensation costs of $1.1 million associated with the vesting of Class J LP Units granted in conjunction with the acquisition of ISI, (c) intangible asset amortization of $1.0 million and (d) Acquisition and Transition Costs of $0.1 million.

Three Months Ended September 30, 2021 versus September 30, 2020

Investment Banking Net Revenues were $806.9 million for the three months ended September 30, 2021, compared to $385.5 million for the three months ended September 30, 2020, an increase of $421.5 million, or 109%.

We earned 257 fees from Advisory clients for the three months ended September 30, 2021, compared to 206 for the three months ended September 30, 2020, representing a 25% increase.

We earned 130 fees in excess of $1.0 million for the three months ended September 30, 2021, compared to 74 for the three months ended September 30, 2020, representing a 76% increase.

The increase in revenues from the three months ended September 30, 2020 was primarily driven by an increase of $437.7 million, or 162%, in Advisory Fees, reflecting an increase in the number of Advisory fees earned and an increase in revenue earned from large transactions during the three months ended September 30, 2021.

Underwriting Fees decreased $12.1 million, or 18%, compared to the three months ended September 30, 2020, reflecting a decrease in the number of transactions we participated in, as well as the relative fee size of those transactions.

Commissions and Related Revenue increased $2.8 million, or 6%, compared to the three months ended September 30, 2020, reflecting increased trading volume compared to the prior year period.

Other Revenue, net, for the three months ended September 30, 2021 decreased versus the three months ended September 30, 2020, primarily driven by lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program.

Operating Expenses were $556.3 million for the three months ended September 30, 2021, compared to $318.7 million for the three months ended September 30, 2020, an increase of $237.6 million, or 75%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $476.2 million for the three months ended September 30, 2021, compared to $250.9 million for the three months ended September 30, 2020, an increase of $225.3 million, or 90%.

Non-Compensation expenses, as a component of Operating Expenses, were $80.1 million for the three months ended September 30, 2021, compared to $67.8 million for the three months ended September 30, 2020, an increase of $12.3 million, or 18%.

Non-Compensation operating expenses increased from the three months ended September 30, 2020 primarily driven by increases in professional fees and travel and related expenses.

Other Expenses of $7.7 million for the three months ended September 30, 2020 included (a) Special Charges, Including Business Realignment Costs, of $7.4 million related to separation and transition benefits and related costs and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of our

headquarters in New York and our business realignment initiatives, (b) intangible asset and other amortization of $0.2 million and (c) Acquisition and Transition Costs of $0.2 million.

Nine Months Ended September 30, 2021 versus September 30, 2020

Investment Banking Net Revenues were $2.13 billion for the nine months ended September 30, 2021, compared to $1.29 billion for the nine months ended September 30, 2020, an increase of $830.5 million, or 64%.

We earned 586 fees from Advisory clients for the nine months ended September 30, 2021, compared to 475 for the nine months ended September 30, 2020, representing a 23% increase.

We earned 349 fees in excess of $1.0 million for the nine months ended September 30, 2021, compared to 224 for the nine months ended September 30, 2020, representing a 56% increase.

The increase in revenues from the nine months ended September 30, 2020 was primarily driven by an increase of $815.4 million, or 84%, in Advisory Fees, reflecting an increase in the number of Advisory fees earned and an increase in revenue earned from large transactions during the nine months ended September 30, 2021.

Underwriting Fees increased $0.5 million compared to the nine months ended September 30, 2020, reflecting an increase in the number of transactions we participated in, partially offset by a decrease in the relative fee size of our participation in those transactions, as we participated in several of the largest deals in our history last year .

Commissions and Related Revenue decreased $2.9 million, or 2%, compared to the nine months ended September 30, 2020, reflecting lower volatility compared to the prior year period.

Other Revenue, net, for the nine months ended September 30, 2021 increased versus the nine months ended September 30, 2020, primarily driven by higher performance of our investment funds portfolio, as well as a gain on the redemption of the G5 debt security in the second quarter of 2021.

Operating Expenses were $1.48 billion for the nine months ended September 30, 2021, compared to $1.06 billion for the nine months ended September 30, 2020, an increase of $423.0 million, or 40%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $1.26 billion for the nine months ended September 30, 2021, compared to $837.5 million for the nine months ended September 30, 2020, an increase of $423.6 million, or 51%.

Non-compensation expenses, as a component of Operating Expenses, were $219.9 million for the nine months ended September 30, 2021, compared to $220.4 million for the nine months ended September 30, 2020 , a decrease of $0.5 million.

Non-compensation operating expenses decreased from the nine months ended September 30, 2020 primarily driven by decreased travel and related expenses, as well as a decrease in bad debt expense, partially offset by an increase in professional fees.

Other Expenses of $0.01 million for the nine months ended September 30, 2021 reflected Acquisition and Transition Costs.

Other Expenses of $42.1 million for the nine months ended September 30, 2020 included (a) Special Charges, Including Business Realignment Costs, of $39.6 million related to separation and transition benefits and related costs and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of our headquarters in New York and our business realignment initiatives, (b) intangible asset and other amortization of $1.2 million, (c) compensation costs of $1.1 million associated with the vesting of Class J LP Units granted in conjunction with the acquisition of ISI and (d) Acquisition and Transition Costs of $0.3 million.

Investment Management

The following table summarizes the operating results of the Investment Management segment.

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2021 2020 Change 2021 2020 Change

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Asset Management and Administration Fees 16,960 14,025 21 % 48,092 39,725 21 %

Other Revenue, net 862 (1,252) NM 938 (648) NM

Other Revenue, net (323) 3,027 NM 615 2,379 (74 %)

Net Revenues 16,637 17,052 (2 %) 48,707 42,104 16 %

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Total Expenses 22,125 12,471 77 % 46,386 36,861 26 %

Operating Income (Loss) 4,353 (6) NM 7,809 662 NM

Operating Income (Loss) (5,488) 4,581 NM 2,321 5,243 (56 %)

Income from Equity Method Investments (2)

3,117 2,541 23 % 8,817 7,381 19 %

Pre-Tax Income $ 7,198 $ 2,242 221 % $ 13,509 $ 5,502 146 %

Pre-Tax Income (Loss) $ (2,371) $ 7,122 NM $ 11,138 $ 12,624 (12 %)

(1) Prior period includes the ECB business.

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In the event the private equity funds perform below certain thresholds, we may be obligated to repay certain carried interest previously distributed.

As of June 30, 2021, $0.8 million of previously distributed carried interest received from the funds was subject to repayment.

As of September 30, 2021, $0.8 million of previously distributed carried interest received from the funds was subject to repayment.

During the third quarter of 2021, consistent with our current investment strategy, we decided to wind down our investment relationship with Trilantic.

See Note 8 to our unaudited condensed consolidated financial statements for further information.

• We also hold interests in ABS and Atalanta Sosnoff that are accounted for under the equity method of accounting.

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Assets Under Management

AUM for our Wealth Management business of $11.1 billion at June 30, 2021 increased compared to $10.2 billion at December 31, 2020.

AUM for our Wealth Management business of $11.3 billion at September 30, 2021 increased compared to $10.2 billion at December 31, 2020.

The amounts of AUM presented in the table below reflect the fair value of assets which we manage on behalf of Wealth Management clients.

As defined in ASC 820, valuations performed for Level 1 investments are based on quoted prices obtained from active markets generated by third parties and Level 2 investments are valued through the use of models based on either direct or indirect observable inputs in the use of models or other valuation methodologies performed by third parties to determine fair value.

For both the Level 1 and Level 2 investments, we obtain both active quotes from nationally

recognized exchanges and third-party pricing services to determine market or fair value quotes, respectively.

models based on either direct or indirect observable inputs in the use of models or other valuation methodologies performed by third parties to determine fair value.

For both the Level 1 and Level 2 investments, we obtain both active quotes from nationally recognized exchanges and third-party pricing services to determine market or fair value quotes, respectively.

For Level 3 investments, 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.

Wealth Management maintained 75% and 72% of Level 1 investments, 21% and 24% of Level 2 investments and 4% of Level 3 investments as of June 30, 2021 and December 31, 2020, respectively.

Wealth Management maintained 74% and 72% of Level 1 investments, 22% and 24% of Level 2 investments and 4% of Level 3 investments as of September 30, 2021 and December 31, 2020, respectively.

The fees that we receive for providing investment advisory and management services are primarily driven by the level and composition of AUM.

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The fees we earn are also impacted by our investment performance, as the appreciation or depreciation in the value of the assets that we manage directly impacts our fees.

The following table summarizes AUM activity for the six months ended June 30, 2021:

The following table summarizes AUM activity for the nine months ended September 30, 2021:

Management (1)

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Market Appreciation 834

Balance at June 30, 2021 $ 11,134

Unconsolidated Affiliates - Balance at June 30, 2021:

Balance at September 30, 2021 $ 11,316

Unconsolidated Affiliates - Balance at September 30, 2021:

Atalanta Sosnoff $ 8,224

(1) Assets Under Management includes Evercore assets which are managed by Evercore Wealth Management of $76.3 million and $76.4 million as of June 30, 2021 and December 31, 2020, respectively.

The following table represents the composition of AUM for Wealth Management as of June 30, 2021:

(1) Assets Under Management includes Evercore assets which are managed by Evercore Wealth Management of $76.3 million and $76.4 million as of September 30, 2021 and December 31, 2020, respectively.

The following table represents the composition of AUM for Wealth Management as of September 30, 2021:

Wealth Management

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Investment performance in the Wealth Management businesses is measured against appropriate indices based on the AUM, most frequently the S&P 500 and a composite fixed income index principally reflecting BarCap and MSCI indices.

For the six months ended June 30, 2021, AUM for Wealth Management increased 10%, reflecting an 8% increase due to market appreciation and a 2% increase due to flows.

Wealth Management outperformed the S&P 500 on a 1 and 3-year basis by approximately 2% and 3%, respectively, during the period.

Wealth Management outperformed the fixed income composite on a

1-year basis by approximately 70 basis points and lagged the fixed income composite on a 3-year basis by approximately 40 basis points, respectively, during the period.

For the six months ended June 30, 2021, the S&P 500 was up approximately 15% and the fixed income composite was down approximately 1%.

For the nine months ended September 30, 2021, AUM for Wealth Management increased 11%, reflecting an 8% increase due to market appreciation and a 3% increase due to flows.

Wealth Management lagged the S&P 500 on a 1-year basis by approximately 1% and outperformed the S&P 500 on a 3-year basis by approximately 4% during the period.

Wealth Management outperformed the fixed income composite on a 1-year basis by approximately 70 basis points and lagged the fixed income composite on a 3-year basis by approximately 40 basis points during the period.

For the nine months ended September 30, 2021, the S&P 500 was up approximately 16% and the fixed income composite was down approximately 1%.

AUM from our unconsolidated affiliates increased 8% compared to December 31, 2020, primarily related to positive performance in ABS and Atalanta Sosnoff.

Three Months Ended June 30, 2021 versus June 30, 2020

Investment Management Net Revenues were $17.0 million for the three months ended June 30, 2021, compared to $11.7 million for the three months ended June 30, 2020, which represented an increase of 46%.

Asset Management and Administration Fees earned from the management of client portfolios increased 25% for the three months ended June 30, 2021, primarily driven by an increase of $3.6 million in fees from Wealth Management clients, as associated AUM increased 23%.

Fee-based revenues included $0.01 million of revenues from performance fees for the three months ended June 30, 2020.

Income from Equity Method Investments increased from the three months ended June 30, 2020, as a result of an increase in earnings from our investments in ABS and Atalanta Sosnoff.

Operating Expenses were $12.7 million for the three months ended June 30, 2021, compared to $11.7 million for the three months ended June 30, 2020, an increase of $1.0 million, or 8%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $9.6 million for the three months ended June 30, 2021, compared to $8.3 million for the three months ended June 30, 2020, an increase of $1.3 million, or 16%.

Non-Compensation expenses, as a component of Operating Expenses, were $3.1 million for the three months ended June 30, 2021, compared to $3.4 million for the three months ended June 30, 2020, a decrease of $0.3 million, or 9%.

Six Months Ended June 30, 2021 versus June 30, 2020

Investment Management Net Revenues were $32.1 million for the six months ended June 30, 2021, compared to $25.1 million for the six months ended June 30, 2020, which represented an increase of 28%.

Asset Management and Administration Fees earned from the management of client portfolios increased 21% for the six months ended June 30, 2021, primarily driven by an increase of $6.2 million in fees from Wealth Management clients, as associated AUM increased 23%.

Fee-based revenues included $0.07 million of revenues from performance fees for the six months ended June 30, 2020.

Income from Equity Method Investments increased from the six months ended June 30, 2020, as a result of an increase in earnings from our investments in ABS and Atalanta Sosnoff.

Operating Expenses were $24.3 million for the six months ended June 30, 2021, flat compared to the six months ended June 30, 2020.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $18.3 million for the six months ended June 30, 2021, compared to $17.1 million for the six months ended June 30, 2020, an increase of $1.2 million, or 7%.

Non-Compensation expenses, as a component of Operating Expenses, were $6.0 million for the six months ended June 30, 2021, compared to $7.3 million for the six months ended June 30, 2020, a decrease of $1.3 million, or 18%.

Other Expenses of $0.03 million for the six months ended June 30, 2020 included Special Charges, Including Business Realignment Costs, related to separation and transition benefits and related costs.

Three Months Ended September 30, 2021 versus September 30, 2020

Investment Management Net Revenues were $16.6 million for the three months ended September 30, 2021, compared to $17.1 million for the three months ended September 30, 2020, which represented a decrease of $0.4 million, or 2%.

Asset Management and Administration Fees earned from the management of client portfolios increased 21% for the three months ended September 30, 2021, primarily driven by an increase of $3.3 million in fees from Wealth Management clients, as associated AUM increased 19%.

Fee-based revenues included $0.01 million of revenues from performance fees for the three months ended September 30, 2020.

Other Revenue, net, decreased from the three months ended September 30, 2020, primarily as a result of the gain on the sale of the ECB Trust Business in the third quarter of 2020, as well as lower performance from our legacy private equity investments.

Income from Equity Method Investments increased from the three months ended September 30, 2020, as a result of an increase in earnings from our investments in ABS and Atalanta Sosnoff.

Operating Expenses were $13.6 million for the three months ended September 30, 2021, compared to $12.2 million for the three months ended September 30, 2020, an increase of $1.4 million, or 12%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $10.3 million for the three months ended September 30, 2021, compared to $9.0 million for the three months ended September 30, 2020, an increase of $1.3 million, or 14%.

Non-Compensation expenses, as a component of Operating Expenses, were $3.3 million for the three months ended September 30, 2021, compared to $3.2 million for the three months ended September 30, 2020, an increase of $0.1 million, or 3%.

Other Expenses of $8.6 million for the three months ended September 30, 2021 included Special Charges, Including Business Realignment Costs, related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our current investment strategy, we decided to wind down during the third quarter of 2021.

Other Expenses of $0.3 million for the three months ended September 30, 2020 included Acquisition and Transition Costs.

Nine Months Ended September 30, 2021 versus September 30, 2020

Investment Management Net Revenues were $48.7 million for the nine months ended September 30, 2021, compared to $42.1 million for the nine months ended September 30, 2020, which represented an increase of $6.6 million, or 16%.

Asset Management and Administration Fees earned from the management of client portfolios increased 21% for the nine months ended September 30, 2021, primarily driven by an increase of $9.5 million in fees from Wealth Management clients, as associated AUM increased 19%.

Fee-based revenues included $0.08 million of revenues from performance fees for the nine months ended September 30, 2020.

Other Revenue, net, decreased 74% from the nine months ended September 30, 2020, primarily as a result of the gain on the sale of the ECB Trust Business in the third quarter of 2020, partially offset by higher performance from our legacy private equity investments.

Income from Equity Method Investments increased from the nine months ended September 30, 2020, as a result of an increase in earnings from our investments in ABS and Atalanta Sosnoff.

Operating Expenses were $37.8 million for the nine months ended September 30, 2021, compared to $36.5 million for the nine months ended September 30, 2020, an increase of $1.3 million, or 4%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $28.6 million for the nine months ended September 30, 2021, compared to $26.0 million for the nine months ended September 30, 2020, an increase of $2.6 million, or 10%.

Non-Compensation expenses, as a component of Operating Expenses, were $9.2 million for the nine months ended September 30, 2021, compared to $10.5 million for the nine months ended September 30, 2020, a decrease of $1.3 million, or 12%.

Other Expenses of $8.6 million for the nine months ended September 30, 2021 included Special Charges, Including Business Realignment Costs, related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our current investment strategy, we decided to wind down during the third quarter of 2021.

Other Expenses of $0.3 million for the nine months ended September 30, 2020 included Acquisition and Transition Costs of

$0.3 million and Special Charges, Including Business Realignment Costs, of $0.03 million, related to separation and transition benefits and related costs.

Our operating cash flows are primarily influenced by the timing and receipt of investment banking and investment management fees and the payment of operating expenses, including incentive compensation to our employees and interest expense on our repurchase agreements (prior to the sale of our ECB business), Notes Payable and lines of credit, and the payment of income taxes.

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Likewise, payments to fund investments related to hedging our deferred cash compensation plans are generally funded in the first three months of each calendar year.

capital through the issuance of stock or debt, repurchase of outstanding Class A Shares, and/or noncontrolling interest in Evercore LP, as well as our other subsidiaries, payment of dividends and other periodic distributions to our stakeholders.

Our investing and financing cash flows are primarily influenced by activities to invest our cash in highly liquid securities or bank certificates of deposit, deploy capital to fund investments and acquisitions, raise capital through the issuance of stock or debt, repurchase of outstanding Class A Shares, and/or noncontrolling interest in Evercore LP, as well as our other subsidiaries, payment of dividends and other periodic distributions to our stakeholders.

We generally make dividend payments and other distributions on a quarterly basis.

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A summary of our operating, investing and financing cash flows is as follows:

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

(dollars in thousands)

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End of Period $ 487,875 $ 1,158,666

Six Months Ended June 30, 2021.

Cash, Cash Equivalents and Restricted Cash were $451.0 million at June 30, 2021, a decrease of $387.2 million versus Cash, Cash Equivalents and Restricted Cash of $838.2 million at December 31, 2020.

Nine Months Ended September 30, 2021.

Cash, Cash Equivalents and Restricted Cash were $487.9 million at September 30, 2021, a decrease of $350.3 million versus Cash, Cash Equivalents and Restricted Cash of $838.2 million at December 31, 2020.

Operating activities resulted in a net inflow of $529.9 million, primarily related to earnings, partially offset by the payment of 2020 bonus awards and deferred cash compensation.

Cash of $12.0 million was provided by investing activities primarily related to net proceeds from sales and maturities of investment securities and the proceeds from the redemption of the G5 debt security, partially offset by the purchase of certificates of deposit and purchases of equipment and leasehold improvements, primarily related to the expansion of our headquarters in New York.

Investing activities during the period used cash of $208.2 million, primarily related to net purchases of investment securities and certificates of deposit and purchases of equipment and leasehold improvements, primarily related to the expansion of our headquarters in New York, partially offset by the proceeds from the redemption of the G5 debt security.

Financing activities during the period used cash of $669.7 million, primarily for purchases of treasury stock and noncontrolling interests, the payment of our Notes Payable and dividends and distributions to noncontrolling interest holders, partially offset by the issuance of the 2021 Private Placement Notes.

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currencies to U.S.

Six Months Ended June 30, 2020.

Cash, Cash Equivalents and Restricted Cash were $1.0 billion at June 30, 2020, an increase of $381.1 million versus Cash, Cash Equivalents and Restricted Cash of $643.9 million at December 31, 2019.

Nine Months Ended September 30, 2020.

Cash, Cash Equivalents and Restricted Cash were $1.16 billion at September 30, 2020, an increase of $514.8 million versus Cash, Cash Equivalents and Restricted Cash of $643.9 million at December 31, 2019.

Operating activities resulted in a net inflow of $283.2 million, primarily related to earnings, partially offset by the payment of 2019 bonus awards and deferred cash compensation.

Cash flows for the first six months of 2020 also reflect the impact of lower tax payments resulting from the deferral of required federal income tax payments pursuant to the Coronavirus Aid, Relief, and Economic Security Act ("CARES" Act).

Cash of $481.2 million was provided by investing activities primarily related to net proceeds from sales and maturities of investment securities and the maturity of certificates of deposit, partially offset by purchases of equipment and leasehold improvements, primarily related to the expansion of our headquarters in New York.

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Liquidity and Capital Resources

Our current assets principally include Cash and Cash Equivalents, Investment Securities and Certificates of Deposit, Accounts Receivable and contract assets, included in Other Current Assets, relating to Investment Banking and Investment

Management revenues.

Our current liabilities principally include accrued expenses, accrued liabilities related to improvements in our leased facilities, accrued employee compensation and short-term borrowings.

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Our liquidity is highly dependent on our revenue stream from our operations, principally from our Investment Banking business, which is a function of closing transactions and earning success fees, the timing and realization of which is irregular and dependent upon factors that are not subject to our control.

Our revenue stream funds the payment of our expenses, including annual bonus payments, a portion of which are guaranteed, deferred compensation arrangements, interest expense on our repurchase agreements (prior to the sale of our ECB business), Notes Payable, lines of credit and other financing arrangements and income taxes.

Payments made for income taxes may be reduced by deductions taken for the increase in tax basis of our investment in Evercore LP.

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These tax deductions, when realized, will result in cash otherwise required to satisfy tax obligations becoming available for other purposes.

Our Management Committee meets regularly to monitor our liquidity and cash positions against our short and long-term obligations, as well as our capital requirements and commitments.

Our Management Committee meets regularly to monitor our liquidity and cash positions against our short and long-term obligations, as well as our capital requirements and commitments, including deferred compensation arrangements.

The result of this review contributes to management's recommendation to the Board of Directors as to the level of quarterly dividend payments, if any.

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Our profitability may also be adversely affected by our fixed costs and the possibility that we would be unable to scale back other costs within a time frame and in an amount sufficient to match any decreases in revenue relating to changes in market and economic conditions.

Likewise, our liquidity may be adversely impacted by our contractual obligations, including lease obligations.

Likewise, our liquidity may be adversely impacted by our contractual obligations, including lease

Reduced equity valuations resulting from future adverse economic events and/or market conditions may impact our performance and may result in future net redemptions of AUM from our clients, which would generally result in lower revenues and cash flows.

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Treasury and Noncontrolling Interest Repurchases

We periodically repurchase Class A Shares and/or LP Units into Treasury in order to offset the dilutive effect of equity awards granted as compensation (see Note 15 to our unaudited condensed consolidated financial statements for further information.) The amount of cash required for these share repurchases is a function of the mix of equity and deferred cash compensation awarded for the annual bonus awards (see further discussion on deferred compensation under Other Commitments below).

We periodically repurchase Class A Shares and/or LP Units into Treasury in order to offset the dilutive effect of equity awards granted as compensation (see Note 15 to our unaudited condensed consolidated financial statements for further information), or amounts in excess of that if management's review, discussed above, determined adequate cash is available.

The amount of cash required for these share repurchases is a function of the mix of equity and deferred cash compensation awarded for the annual bonus awards (see further discussion on deferred compensation under Other Commitments below).

In addition, we may from time to time, purchase noncontrolling interests in subsidiaries.

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This program may be suspended or discontinued at any time and does not have a specified expiration date.

During the six months ended June 30, 2021, we repurchased 2,374,027 Class A Shares, at an average cost per share of $132.88, for $315.5 million pursuant to our repurchase program.

During the nine months ended September 30, 2021, we repurchased 3,146,126 Class A Shares, at an average cost per share of $132.79, for $417.8 million pursuant to our repurchase program.

In addition, we periodically buy shares into treasury from our employees in order to allow them to satisfy their minimum tax requirements for share deliveries under our share equity plan.

During the six months ended June 30, 2021, we repurchased 934,387 Class A Shares, at an average cost per share of $117.02, for $109.3 million primarily related to minimum tax withholding requirements of share deliveries.

The aggregate 3,308,414 Class A Shares repurchased during the six months ended June 30, 2021 were acquired for aggregate purchase consideration of $424.8 million, at an average cost per share of $128.40.

During the nine months ended September 30, 2021, we repurchased 954,994 Class A Shares, at an average cost per share of $117.46, for $112.2 million, primarily related to minimum tax withholding requirements of share deliveries.

The aggregate 4,101,120 Class A Shares repurchased during the nine months ended September 30, 2021 were acquired for aggregate purchase consideration of $530.0 million, at an average cost per share of $129.22.

Private Placements

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We may, at our 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 us 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 June 30, 2021, we were in compliance with all of these covenants.

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 September 30, 2021, we were in compliance with all of these covenants.

On August 1, 2019, we issued $175.0 million and £25.0 million of senior unsecured notes through private placement.

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We may, at our 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 us 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 June 30, 2021, we were in compliance with all of these covenants.

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 September 30, 2021, we were in compliance with all of these covenants.

On March 29, 2021, we issued an aggregate of $38.0 million of senior notes, comprised of $38.0 million aggregate principal amount of our 1.97% Series I Notes, pursuant to the 2021 Note Purchase Agreement, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

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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 June 30, 2021, we were in compliance with all of these covenants.

As of September 30, 2021, we were in compliance with all of these covenants.

Lines of Credit

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

We and our consolidated subsidiaries were in compliance with these covenants as of June 30, 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.

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 $20.0 million, to be used for working capital and other corporate activities.

We and our consolidated subsidiaries were in compliance with these covenants as of September 30, 2021.

East amended this facility on October 29, 2021 such that, among other things, the interest rate provisions were LIBOR (or an applicable benchmark replacement) plus 150 basis points and the maturity date was extended to October 28, 2023.

On July 26, 2019, East entered into an additional loan agreement with PNC for a revolving credit facility in an aggregate principal amount, as amended on October 30, 2020, of up to $30.0 million, to be used for working capital and other corporate activities.

This facility is unsecured.

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

We and our consolidated subsidiaries were in compliance with these covenants as of June 30, 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 $30.0 million.

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

We and our consolidated subsidiaries were in compliance with these covenants as of September 30, 2021.

East amended this facility on October 29, 2021 such that, among other things, the revolving credit facility has increased to an aggregate principal amount of $55.0 million.

Drawings under this facility will bear interest at LIBOR (or an applicable benchmark replacement) plus 180 basis points and the maturity date was extended to October 28, 2023.

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

There have been no drawings under this facility as of June 30, 2021.

There have been no drawings under this facility as of September 30, 2021.

On October 29, 2021, EGL entered into a subordinated revolving credit facility with PNC in an aggregate principal amount of up to $75.0 million, to be used as needed in support of capital requirements from time to time of EGL.

This facility is unsecured and is guaranteed by Evercore LP and other affiliates, pursuant to a guaranty agreement, which provides for certain reporting requirements and debt covenants consistent with the Existing PNC Facility.

Drawings under this facility will bear interest at LIBOR (or an applicable benchmark replacement) plus 180 basis points and the maturity date will be October 28, 2023, unless prepayment is otherwise approved earlier by FINRA.

In addition, EGL's clearing broker provides temporary funding for the settlement of securities transactions.

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We have a long-term liability, Amounts Due Pursuant to Tax Receivable Agreements, which requires payments to certain Senior Managing Directors.

This liability was re-measured following the decrease in income tax rates in the U.S.

in 2018 and future years in conjunction with the enactment of the Tax Cuts and Jobs Act on December 22, 2017.

We have made certain capital commitments with respect to our investment activities, which are included in the Contractual Obligations section below.

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For further information see Note 17 to our unaudited condensed consolidated financial statements.

On July 1, 2018, we entered into a new lease agreement for office space at our headquarters at 55 East 52nd St., New York, New York, and subsequently entered into an amendment to this lease agreement for additional office space, as well as to extend our original commitment, on December 6, 2019.

We expect to spend approximately $0.8 million, net of a tenant

improvement allowance, to improve the premises under this lease over the next twelve months.

Our work at these premises, which was temporarily suspended at the end of the first quarter of 2020 as a result of the COVID-19 pandemic, resumed in June 2020.

For further information see Note 9 to our unaudited condensed consolidated financial statements.

Contractual Obligations

For a further discussion of our contractual obligations, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

We had total commitments (not reflected on our Unaudited Condensed Consolidated Statements of Financial Condition) relating to future capital contributions to private equity funds of $10.1 million and $12.0 million as of June 30, 2021 and December 31, 2020, respectively.

We had total commitments (not reflected on our Unaudited Condensed Consolidated Statements of Financial Condition) relating to future capital contributions to private equity funds of $8.5 million and $12.0 million as of September 30, 2021 and December 31, 2020, respectively.

We expect to fund these commitments with cash flows from operations.

We may be required to fund these commitments at any time through June 2028, depending on the timing and level of investments by our private equity funds.

During the third quarter of 2021, consistent with our current investment strategy, we decided to wind down our investment relationship with Trilantic.

See Note 8 to our unaudited condensed consolidated financial statements for further information.

Off-Balance Sheet Arrangements

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We hold equity securities and invest in exchange-traded funds principally as an economic hedge against our deferred compensation program.

As of June 30, 2021, the fair value of our investments with these products, based on closing prices, was $141.5 million.

We estimate that a hypothetical 10%, 20% and 30% adverse change in the market value of the investments would have resulted in a decrease in pre-tax income of approximately $14.2 million, $28.3 million and $42.5 million, respectively, for the three months ended June 30, 2021.

As of September 30, 2021, the fair value of our investments with these products, based on closing prices, was $137.6 million.

We estimate that a hypothetical 10%, 20% and 30% adverse change in the market value of the investments would have resulted in a decrease in pre-tax income of approximately $13.8 million, $27.5 million and $41.3 million, respectively, for the three months ended September 30, 2021.

In February 2020, we entered into four-month futures contracts on a stock index fund with a notional amount of $38.9 million as an economic hedge against our deferred cash compensation program.

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In accordance with 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.

We had net realized gains (losses) of $5.2 million and ($4.0) million for the three and six months ended June 30, 2020, respectively.

We had net realized losses of ($4.0) million for the nine months ended September 30, 2020.

Private Equity Funds

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Valuations and analysis regarding our investments in Trilantic and Glisco are performed by their respective professionals, and thus we are not involved in determining the fair value for the portfolio companies of such funds.

We estimate that a hypothetical 10% adverse change in the value of the private equity funds would have resulted in a decrease in pre-tax income of approximately $1.8 million for the three months ended June 30, 2021.

We estimate that a hypothetical 10% adverse change in the value of the private equity funds would have resulted in a decrease in pre-tax income of approximately $2.0 million for the three months ended September 30, 2021.

Exchange Rate Risk

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dollar would result in an adverse or beneficial impact to our financial results.

A significant portion of our European, Asian and Latin

American revenues and expenses have been, and will continue to be, derived from contracts denominated in foreign currencies (i.e.

A significant portion of our European, Asian and Latin American revenues and expenses have been, and will continue to be, derived from contracts denominated in foreign currencies (i.e.

British Pounds sterling, Euros, Mexican pesos, Brazilian real, among others).

Historically, the value of these foreign currencies has fluctuated relative to the U.S.

For the six months ended June 30, 2021, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income (Loss) within the Unaudited Condensed Consolidated Statement of Comprehensive Income was $2.4 million.

For the nine months ended September 30, 2021, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income (Loss) within the Unaudited Condensed Consolidated Statement of Comprehensive Income was ($4.3) million.

It is generally not our intention to hedge our foreign currency exposure in these subsidiaries, and we will reevaluate this policy from time to time.

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The collection period for restructuring transaction receivables may exceed 90 days.

We reversed bad debt expense of approximately $1.8 million for the six months ended June 30, 2021 and recorded bad debt expense of approximately $5.3 million for the six months ended June 30, 2020.

As of June 30, 2021 and December 31, 2020, total receivables recorded in Accounts Receivable amounted to $328.5 million and $368.3 million, respectively, net of an allowance for doubtful accounts, and total receivables recorded in Other Assets amounted to $76.0 million and $71.0 million, respectively.

We recorded bad debt expense of approximately $0.02 million and $5.9 million for the nine months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021 and December 31, 2020, total receivables recorded in Accounts Receivable amounted to $398.0 million and $368.3 million, respectively, net of an allowance for doubtful accounts, and total receivables recorded in Other Assets amounted to $77.9 million and $71.0 million, respectively.

Other Current Assets and Other Assets include 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 (contract assets).

As of June 30, 2021, total contract assets recorded in Other Current Assets and Other Assets amounted to $54.8 million and $6.7 million, respectively.

As of September 30, 2021, total contract assets recorded in Other Current Assets and Other Assets amounted to $82.8 million and

$10.5 million, respectively.

As of December 31, 2020, total contract assets recorded in Other Current Assets and Other Assets amounted to $29.3 million and $5.3 million, respectively.

With respect to our Investment Securities portfolio, which is comprised primarily of highly-rated corporate and municipal bonds, treasury bills, exchange-traded funds, mutual funds and securities investments, we manage our credit risk exposure by limiting concentration risk and maintaining investment grade credit quality.

As of June 30, 2021, we had Investment Securities of $940.4 million, of which 85% were treasury bills.

With respect to our Investment Securities portfolio, which is comprised primarily of treasury bills, exchange-traded funds and securities investments, we manage our credit risk exposure by limiting concentration risk and maintaining investment grade credit quality.

As of September 30, 2021, we had Investment Securities of $1.2 billion, of which 88% were treasury bills.

Critical Accounting Policies and Estimates

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For a discussion of recently issued accounting standards and their impact or potential impact on our consolidated financial statements, see Note 3 to our unaudited condensed consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk

See "Management's Discussion and Analysis of Financial Condition and Results of Operations – Market Risk and Credit Risk." We do not believe we face any material interest rate risk, foreign currency exchange risk, equity price risk or other market risk except as disclosed in Item 2 " – Market Risk and Credit Risk" above.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis