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Item 2. Management’s Discussion and Analysis

2022-05-06 compared with 2021-11-03 · 204 added, 257 removed, 310 unchanged (60% of the section changed)

17 unchanged sentences

Investment Banking.

Our Investment Banking business earns fees from our clients for providing advice on mergers, acquisitions, divestitures, leveraged buyouts, restructurings, activism and defense and similar corporate finance matters, and from underwriting and private placement activities, as well as commissions, fees and principal revenues from research and our sales and trading activities.

Our Investment Banking business earns fees from our clients for providing advice on mergers, acquisitions, divestitures, capital raising, leveraged buyouts, restructurings, activism and defense and similar corporate finance matters, and from underwriting and private placement activities, as well as commissions, fees and principal revenues from research and our sales and trading activities.

The amount and timing of the fees paid vary by the type of engagement or services provided.

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

In the case of bankruptcy engagements, fees are subject to approval of the court.

In the case of bankruptcy engagements, fees are subject to court approval.

Underwriting fees are recognized when the offering has been deemed to be completed and placement fees are generally recognized at the time of the client's acceptance of capital or capital commitments.

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Investment Management.

Our Investment Management business includes operations related to the Wealth Management and Institutional Asset Management businesses and interests in private equity funds which we do not manage.

Revenue sources primarily include management fees, fiduciary fees, performance fees and gains (or losses) on our investments.

We completed the sale of the ECB Trust business on July 2, 2020 and the remaining ECB business on December 16, 2020.

Following these transactions, there are no remaining consolidated businesses in the Institutional Asset Management business.

Our Investment Management business includes operations related to the Wealth Management business and interests in private equity funds which we do not manage.

Revenue sources primarily include management fees, fiduciary fees and gains (or losses) on our investments.

Management fees for third party clients generally represent a percentage of assets under management ("AUM").

Fiduciary fees, which are generally a function of the size and complexity of each engagement, are individually negotiated.

We record performance fees upon the earlier of the termination of the investment fund or when the likelihood of clawback is mathematically improbable.

Gains and losses include both realized and unrealized gains and losses on principal investments, including those arising from our equity interest in investment partnerships.

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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 (through June 25, 2021, the date G5 repaid its outstanding debentures in full.

• Interest income and income (losses) on investment securities, including our investment funds which are used as an economic hedge against our deferred cash compensation program, certificates of deposit, cash and cash equivalents, long-term accounts receivable and on our debt security investment in G5 (through June 25, 2021, the date G5 repaid its outstanding debentures in full.

See Note 7 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

• A gain on the sale of a portion of our interests in ABS in the first quarter of 2022.

See Note 7 to our unaudited condensed consolidated financial statements for further information

• Gains (losses) resulting from foreign currency fluctuations

• 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.

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

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

Prior to the sale of our ECB business in Mexico on December 16, 2020, Other Revenue and Interest Expense was also derived from investing customer funds in financing transactions.

These transactions were principally repurchases and resales of Mexican government and government agency securities.

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

Operating Expenses

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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.

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.

generally valued at their grant date and recorded in employee compensation and benefits expense over the requisite service period.

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

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Our annual compensation program includes share-based compensation awards and deferred cash awards as a component of the annual bonus awards for certain employees.

These awards are generally subject to annual vesting requirements over a four-year period beginning at the date of grant, which occurs in the first quarter of each year;

These awards, the amount of which is a function of performance and market conditions, are generally subject to annual vesting requirements over a four-year period beginning at the date of grant, which occurs in the first quarter of each year;

accordingly, the expense is generally amortized over the stated vesting period, subject to retirement eligibility.

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A change in estimated forfeitures is recognized through a cumulative adjustment in the period of the change.

In April 2021, our Board of Directors approved the issuance of Class L Interests to our named executive officers, 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 our named executive officers in respect of their service for 2021.

In April 2021, our Board of Directors approved the issuance of Class L Interests in Evercore LP to certain of our named executive officers, pursuant to which the named executive officers received a discretionary distribution of profits from Evercore LP, which was paid in the first quarter of 2022.

Distributions pursuant to these interests were made in lieu of any cash incentive compensation payments which may otherwise have been made to our named executive officers in respect of their service for 2021.

Following the distribution, these Class L Interests were cancelled pursuant to their terms.

In January 2022, we issued Class L Interests to certain of our named executive officers, 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 2023.

We record expense related to these distributions in Employee Compensation and Benefits on the Unaudited Condensed Consolidated Statements of Operations and reflect accrued liabilities in Accrued Compensation and Benefits on the Unaudited Condensed Consolidated Statements of Financial Condition.

Our Long-term Incentive Plan provides for incentive compensation awards to Advisory Senior Managing Directors, excluding executive officers, who exceed defined benchmark results over four-year performance periods beginning January 1, 2017 and January 1, 2021.

The first cash distribution under the 2017 Long-term Incentive Plan occurred in March 2021.

Remaining amounts are due to be paid, in cash or Class A Shares, at our discretion, in equal installments in the first quarter of 2022 and 2023 (for the 2017 Long-term Incentive Plan) and in the first quarter of 2025, 2026 and 2027 (for the 2021 Long-term Incentive Plan), subject to employment at the time of payment.

We made cash distributions under the 2017 Long-term Incentive Plan in March 2022 and 2021, respectively, as well as in December 2021, related to the acceleration of certain amounts due in the first quarter of 2022.

Remaining amounts are due to be paid, in cash or Class A Shares, at our discretion, in the first quarter of 2023 (for the 2017 Long-term Incentive Plan) and in the first quarter of 2025, 2026 and 2027 (for the 2021 Long-term Incentive Plan), subject to employment at the time of payment.

Awards issued under the 2017 Long-term Incentive Plan are subject to retirement eligibility requirements after the performance criteria has been achieved.

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The performance period for the 2017 Long-term Incentive Plan ended on December 31, 2020.

From time to time, we also grant performance awards to certain individuals which include both performance and service-based vesting requirements.

From time to time, we also grant performance awards to certain individuals which include both performance and service-based vesting requirements and, in certain awards, market based requirements.

These include Class I-P and K-P Units issued by Evercore LP.

In December 2021, we issued Class K-P Units to certain of our employees.

In March 2022, the Class I-P Units converted to Class I LP Units.

See Note 14 to our unaudited condensed consolidated financial statements for further information.

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Other Expenses

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.

• 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.

• Intangible Asset and Other Amortization – Includes amortization of intangible assets associated with certain acquisitions.

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

Income from Equity Method Investments

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.

Our share of the income (loss) from our equity interests in ABS, Atalanta Sosnoff, Luminis and Seneca Evercore (from July 7, 2021 for 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.

See Note 7 to our unaudited condensed consolidated financial statements for further information.

Provision for Income Taxes

We account for income taxes in accordance with ASC 740 , which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax basis of our assets and liabilities.

We account for income taxes in accordance with ASC 740, "Income Taxes" , which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax basis of our assets and liabilities.

Excess tax benefits and deficiencies associated with the appreciation or depreciation in our share price upon vesting of employee share-based awards above or below the original grant price are recognized in our Provision for Income Taxes.

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

See Note 12 to our unaudited condensed consolidated financial statements for further information.

Results of Operations

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

The following is a discussion of our results of operations for the three months ended March 31, 2022 and 2021.

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 September 30, For the Nine Months Ended September 30,

2021 2020 Change 2021 2020 Change

For the Three Months Ended March 31,

2022 2021 Change

(dollars in thousands, except per share data)

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Asset Management and Administration Fees 17,115 14,949 14 %

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

Other Revenue, Including Interest and Investments (1,779) 7,230 NM

Total Revenues 727,104 666,880 9 %

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Operating Expenses 513,490 468,095 10 %

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

Other Expenses — 7 NM

Total Expenses 513,490 468,102 10 %

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Common Shareholders $ 3.79 $ 3.25 17 %

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 $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 $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 $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

As of March 31, 2022 and 2021, we employed approximately 2,000 and 1,800 people, respectively, worldwide.

Three Months Ended March 31, 2022 versus March 31, 2021

Net Income Attributable to Evercore Inc.

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.

was $158.0 million for the three months ended March 31, 2022, an increase of $13.7 million, or 9%, compared to $144.4 million for the three months ended March 31, 2021.

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

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 $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.

Net Revenues were $722.9 million for the three months ended March 31, 2022, an increase of $60.5 million, or 9%, versus Net Revenues of $662.3 million for the three months ended March 31, 2021.

Advisory Fees increased $112.6 million, or 22%, Underwriting Fees decreased $43.0 million, or 54%, and Commissions and Related Revenue decreased $2.6 million, or 5%, compared to the three months ended March 31, 2021.

Asset Management and Administration Fees increased $2.2 million, or 14%, compared to the three months ended March 31, 2021.

See "Business Segments" below for further information.

Other Revenue, Including Interest and In vestments, decreased $9.0 million compared to the three months ended March 31, 2021, primarily driven by lower performance of our investment funds portfolio due to the overall market decline.

The portfolio is used as an economic hedge against our deferred cash compensation program.

This was partially offset by a $1.3 million gain on the sale of a portion of our interests in ABS during the first quarter of 2022.

See Note 7 to our unaudited condensed consolidated financial statements for further information.

Total Operating Expenses were $513.5 million for the three months ended March 31, 2022, compared to $468.1 million for the three months ended March 31, 2021, an increase of $45.4 million, or 10%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $429.7 million for the three months ended March 31, 2022, an increase of $34.3 million, or 9%, versus expense of $395.4 million for the three months ended March 31, 2021.

The increase in the amount of compensation recognized for the three months ended March 31, 2022 is in line with the increase in Net Revenues.

Non-compensation expenses as a component of Operating Expenses were $83.8 million for the three months ended March 31, 2022, an increase of $11.1 million, or 15%, versus $72.7 million for the three months ended March 31, 2021.

The increase was primarily driven by an increase in travel and related expenses, as travel slowed during the peak of the COVID pandemic and began to resume during the fourth quarter of 2021, as well as higher professional fees and inflationary pressures, all of which are continuing.

Non-Compensation expenses per employee were approximately $42.4 thousand for the three months ended March 31, 2022, versus $40.3 thousand for the three months ended March 31, 2021.

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 59.4% for the three months ended March 31, 2022, compared to 59.7% for the three months ended March 31, 2021.

Income from Equity Method Investments was $2.5 million for the three months ended March 31, 2022, compared to $3.0 million for the three months ended March 31, 2021.

The decrease was driven by lower income earned by ABS, principally reflecting a decrease in our ownership following the sale of a portion of our interests during the first quarter of 2022.

See Note 7 to our condensed consolidated financial statements for further information.

This decrease was partially offset by an increase in earnings from our investments in Atalanta Sosnoff, Luminis and Seneca Evercore during the three months ended March 31, 2022.

The provision for income taxes for the three months ended March 31, 2022 was $34.8 million, which reflected an effective tax rate of 16.4%.

The provision for income taxes for the three months ended March 31, 2021 was $31.7 million, which reflected an effective tax rate of 16.1%.

The provision for income taxes for the three months ended March 31, 2022 and 2021 reflects the net impact associated with the appreciation in our share price upon vesting of employee share-based awards above the original grant price of $19.0 million and $16.7 million, respectively.

The provision for income taxes also reflects 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 $19.1 million for the three months ended March 31, 2022 compared to $21.2 million for the three months ended March 31, 2021.

The decrease in Net Income Attributable to Noncontrolling Interest primarily reflects lower income allocated to Evercore LP during the three months ended March 31, 2022, driven by the decrease in noncontrolling ownership interest during the first quarter of 2022.

See Note 12 to our unaudited condensed consolidated financial statements for further information.

Business Segments

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

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

2021 2020 Change 2021 2020 Change

For the Three Months Ended March 31,

2022 2021 Change

(dollars in thousands)

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Commissions and Related Revenue 50,898 53,526 (5 %)

46,763 44,003 6 % 151,014 153,903 (2 %)

Other Revenue, net (1)

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

(7,467) 2,584 NM

Net Revenues 704,301 647,285 9 %

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Pre-Tax Income $ 204,103 $ 190,921 7 %

(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 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 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

(1) Includes interest expense on Notes Payable and lines of credit of $4.3 million and $4.6 million for the three months ended March 31, 2022 and 2021, respectively.

(2) Equity in Luminis and Seneca Evercore is classified as Income from Equity Method Investments.

For the three months ended March 31, 2022 , the dollar value of North American announced and completed M&A activity decreased 23% and increased 10%, respectively, compared to the three months ended March 31, 2021 , and the dollar value of Global announced and completed M&A activity decreased 21% and increased 23%, respectively, compared to the three months ended March 31, 2021 .

For the Three Months Ended March 31,

2022 2021 Change

Industry Statistics ($ in billions) *

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Total Number of Underwriting Transactions as a Bookrunner 13 31 (58 %)

Refinitiv September 30, 2021

Refinitiv April 1, 2022

** Includes revenue generating clients

Investment Banking Results of Operations

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.

Three Months Ended March 31, 2022 versus March 31, 2021

Investment Banking Net Revenues were $704.3 million for the three months ended March 31, 2022, compared to $647.3 million for the three months ended March 31, 2021, an increase of $57.0 million, or 9%.

The increase in revenues for the three months ended March 31, 2022 was primarily driven by an increase of $112.6 million, or 22%, in Advisory Fees.

Although the number of fees recognized in the three months ended March 31, 2022 declined compared to three months ended March 31, 2021, the growth in average fee size, which was driven by a number of large M&A fees during the first quarter of 2022, contributed to the increase in revenue .

Underwriting Fees decreased $43.0 million, or 54%, compared to the three months ended March 31, 2021, reflecting a decrease in the number of transactions we participated in due to the decline in overall market issuances.

Commissions and Related Revenue decreased $2.6 million, or 5%, compared to the three months ended March 31, 2021, primarily reflecting lower trading volumes, partially offset by increased revenues from research subscriptions and convertible securities.

Other Revenue, net, decreased $10.1 million compared to the three months ended March 31, 2021, primarily driven by lower performance of our investment funds portfolio due to the overall market decline.

The portfolio is used as an economic hedge against our deferred cash compensation program.

Operating Expenses were $500.6 million for the three months ended March 31, 2022, compared to $456.5 million for the three months ended March 31, 2021, an increase of $44.0 million, or 10% .

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $419.9 million for the three months ended March 31, 2022, compared to $386.7 million for the three months ended March 31, 2021, an increase of $33.2 million , or 9%.

The increase in the amount of compensation recognized for the three months ended March 31, 2022 is in line with the increase in Net Revenues.

Non-compensation expenses, as a component of Operating Expenses, were $80.7 million for the three months ended March 31, 2022 , compared to $69.8 million for the three months ended March 31, 2021 , an increase of $10.9 million , or 16%.

Non-compensation operating expenses increased from the prior year, primarily driven by an increase in travel and related expenses, as travel slowed during the peak of the COVID pandemic and began to resume during the fourth quarter of 2021, as well as higher professional fees and inflationary pressures, all of which are continuing.

Investment Management

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

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

2021 2020 Change 2021 2020 Change

For the Three Months Ended March 31,

2022 2021 Change

(dollars in thousands)

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Wealth Management $ 17,115 $ 14,949 14 %

Institutional Asset Management (1)

— 361 NM — 1,101 NM

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

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

Other Revenue, net (1)

Net Revenues 18,553 15,025 23 %

Operating Expenses 12,918 11,569 12 %

Other Expenses 8,554 300 NM 8,554 332 NM

Total Expenses 12,918 11,569 12 %

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

Operating Income 5,635 3,456 63 %

Income from Equity Method Investments (2)

2,138 2,855 (25 %)

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

(1) Prior period includes the ECB business.

On July 2, 2020, we sold the trust business of ECB and on December 16, 2020, we sold the remaining ECB business.

Pre-Tax Income $ 7,773 $ 6,311 23 %

(1) Includes a gain of $1.3 million for the three months ended March 31, 2022, resulting from the sale of a portion of our interests in ABS.

See Note 7 to our unaudited condensed consolidated financial statements for further information.

(2) Equity in ABS and Atalanta Sosnoff is classified as Income from Equity Method Investments.

Investment Management Results of Operations

Our Investment Management segment includes the following activities:

Our Investment Management segment includes the following:

• Wealth Management – conducted through EWM and ETC.

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We are passive investors and do not participate in the management of any Glisco sponsored funds.

We are also passive investors in Trilantic IV, Trilantic V and Trilantic VI.

We are also passive investors in Trilantic IV, Trilantic V and Trilantic VI (through January 1, 2022).

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

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.

As of March 31, 2022, $0.7 million of previously distributed carried interest received from the funds was subject to repayment.

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

The results of these investments are included within Income from Equity Method Investments.

Our historical Investment Management results include the ECB businesses, which were previously included in Institutional Asset Management above.

On July 2, 2020, we sold the trust business of ECB and on December 16, 2020, we sold the remaining ECB business.

During the first quarter of 2022, we sold a portion of our interests in ABS.

See Note 7 to our unaudited condensed consolidated financial statements for further information.

Assets Under Management

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

AUM for our Wealth Management business of $11.6 billion at March 31, 2022 decreased $0.6 billion, or 5%, compared to $12.2 billion at December 31, 2021.

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

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.

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.

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

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.

Wealth Management maintained 75% of Level 1 investments, 21% of Level 2 investments and 4% of Level 3 investments as of March 31, 2022 and December 31, 2021.

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

Accordingly, client flows, market movements, and changes in our product mix will impact the level of management fees we receive from our Wealth Management business.

Fees vary with the type of assets managed and the channel in which they are managed, with higher fees earned on equity assets and alternative investment funds, such as hedge funds and private equity funds, and lower fees earned on fixed income and cash management products.

Fees vary with the type of assets managed and the

channel in which they are managed, with higher fees earned on equity assets and alternative investment funds, such as hedge funds and private equity funds, and lower fees earned on fixed income and cash management products.

Clients will increase or reduce the aggregate amount of AUM that we manage for a number of reasons, including changes in the level of assets that they have available for investment purposes, their overall asset allocation strategy, our relative performance versus competitors offering similar investment products and the quality of our service.

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 nine months ended September 30, 2021:

The following table summarizes AUM activity for the three months ended March 31, 2022:

Management (1)

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Outflows (333)

Market Appreciation 834

Balance at September 30, 2021 $ 11,316

Unconsolidated Affiliates - Balance at September 30, 2021:

Market Appreciation (Depreciation) (661)

Balance at March 31, 2022 $ 11,553

Unconsolidated Affiliates - Balance at March 31, 2022:

Atalanta Sosnoff $ 8,119

(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:

(1) Assets Under Management includes Evercore assets which are managed by Evercore Wealth Management of $0.3 million and $76.3 million as of March 31, 2022 and December 31, 2021, respectively.

The following table represents the composition of AUM for Wealth Management as of March 31, 2022:

Wealth Management

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Fees charged to clients reflect the composition of the assets managed and the services provided.

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 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 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.

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

For the three months ended March 31, 2022, AUM for Wealth Management decreased 5%, primarily reflecting a decrease due to market depreciation.

Performance for the three months ended March 31, 2022 reflected:

• Wealth Management lagged the S&P 500 on a 1-year basis by approximately 5% and outperformed the S&P 500 on a 3-year basis by approximately 2%

• Wealth Management outperformed the fixed income composite on a 1-year basis by approximately 80 basis points and was flat against the fixed income composite on a 3-year basis

• The S&P 500 and fixed income composite were each down approximately 5%

AUM from our unconsolidated affiliates decreased 4% compared to December 31, 2021, reflecting declines in both Atalanta Sosnoff and ABS.

Three Months Ended March 31, 2022 versus March 31, 2021

Investment Management Net Revenues were $18.6 million for the three months ended March 31, 2022, compared to $15.0 million for the three months ended March 31, 2021, an increase of $3.5 million, or 23%.

Asset Management and Administration Fees earned from the management of Wealth Management client portfolios increased $2.2 million, or 14%, for the three months ended March 31, 2022 as associated AUM increased 9%, primarily from market appreciation.

Other Revenue, net, increased $1.4 million from the three months ended March 31, 2021, primarily driven by a $1.3 million gain on the sale of a portion of our interests in ABS during the first quarter of 2022.

Income from Equity Method Investments decreased 25% from the three months ended March 31, 2021, driven by lower income earned by ABS, principally reflecting a decrease in our ownership following the sale of a portion of our interests during the first quarter of 2022.

See Note 7 to our condensed consolidated financial statements for further information.

This decrease was partially offset by an increase in earnings from our investment in Atalanta Sosnoff.

Operating Expenses were $12.9 million for the three months ended March 31, 2022, compared to $11.6 million for the three months ended March 31, 2021, an increase of $1.3 million, or 12%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $9.8 million for the three months ended March 31, 2022, compared to $8.7 million for the three months ended March 31, 2021, an increase of $1.1 million, or 13%.

Non-Compensation expenses, as a component of Operating Expenses, were $3.1 million for the three months ended March 31, 2022, compared to $2.9 million for the three months ended March 31, 2021, an increase of $0.2 million, or 7%.

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, interest expense on our Notes Payable and lines of credit and the payment of income taxes.

Investment Banking advisory fees are generally collected within 90 days of billing.

However, placement fees may be collected within 180 days of billing, with fees related to private funds capital raising being collected in a period exceeding one year.

However, placement fees may be collected within 180 days of billing, with fees related to private funds capital raising and certain fees related to the private capital businesses being collected in a period exceeding one year.

Commissions earned from our agency trading activities are generally received from our clearing broker within 11 days.

Fees from our Wealth Management business (and previously our Institutional Asset Management business, prior to the sale of our ECB business) are generally billed and collected within 90 days.

We traditionally pay a substantial portion of incentive compensation to personnel in the Investment Banking business and to executive officers during the first three months of each calendar year with respect to the prior year's results and prior year's deferred compensation.

Fees from our Wealth Management business are generally billed and collected within 90 days.

We traditionally pay a substantial portion of incentive compensation during the first three months of each calendar year with respect to the prior year's results and prior years' deferred compensation.

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.

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

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

(dollars in thousands)

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End of Period $ 463,894 $ 419,597

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.

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.

For further information, see Note 11 to our unaudited condensed consolidated financial statements.

Three Months Ended March 31, 2022.

Cash, Cash Equivalents and Restricted Cash were $463.9 million at March 31, 2022, a decrease of $123.4 million versus Cash, Cash Equivalents and Restricted Cash of $587.3 million at December 31, 2021.

Operating activities resulted in a net outflow of $486.2 million, primarily related to the payment of 2021 bonus awards and deferred cash compensation, partially offset by earnings.

Cash of $693.5 million was provided by investing activities, primarily related to net proceeds from sales and maturities of investment securities and proceeds received for the sale of a portion of our interests in ABS, partially offset by net purchases of certificates of deposit and purchases of equipment and leasehold improvements, principally related to the expansion of our headquarters in New York.

Financing activities during the period used cash of $329.2 million, primarily for purchases of treasury stock and noncontrolling interests and dividends and distributions to noncontrolling interest holders.

Cash is also impacted due to the effect of foreign exchange rate fluctuation when translating non-U.S.

currencies to U.S.

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 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.

Financing activities during the period used cash of $248.4 million, primarily for purchases of treasury stock and the payment of dividends and distributions to noncontrolling interest holders.

Three Months Ended March 31, 2021.

Cash, Cash Equivalents and Restricted Cash were $419.6 million at March 31, 2021, a decrease of $418.6 million versus Cash, Cash Equivalents and Restricted Cash of $838.2 million at December 31, 2020.

Operating activities resulted in a net outflow of $330.1 million, primarily related to the payment of 2020 bonus awards and deferred cash compensation, partially offset by earnings.

Cash of $190.2 million was provided by investing activities primarily related to net proceeds from sales and maturities of investment securities, 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.

Financing activities during the period used cash of $280.5 million, primarily for purchases of treasury stock, 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.

For further information, see Note 10 to our unaudited condensed consolidated financial statements.

Cash is also impacted due to the effect of foreign exchange rate fluctuation when translating non-U.S.

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From time to time, advances and/or commitments may also be granted to new employees at or near the date they begin employment, or to existing employees for the purpose of incentive or retention.

Cash distributions related to partnership tax allocations are made to the partners of Evercore LP and certain other entities in accordance with our corporate estimated payment calendar;

these payments are made prior to the end of each calendar quarter.

Cash distributions related to partnership tax allocations are made to the partners of Evercore LP and certain other entities in accordance with our corporate

estimated payment calendar;

these payments are generally made quarterly.

In addition, dividends on Class A Shares, and related distributions to partners of Evercore LP, are paid when and if declared by the Board of Directors, which is generally quarterly.

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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, as well as payments for income taxes.

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 Notes Payable, lines of credit and other financing arrangements as well as payments for 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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In addition, revenue related to our equities business is driven by market volumes and institutional investor trends, such as the trend to passive investment strategies.

During periods of unfavorable market or economic conditions, the number and value of M&A transactions, as well as market volumes in equities, generally decrease, and they generally increase during periods of favorable market or economic conditions.

During periods of unfavorable market or economic conditions, which may result from the current or anticipated impact of climate change, extreme weather events or natural disasters, the emergence or continuation of widespread health emergencies or pandemics, cyberattacks or campaigns, military conflict, including escalating military tension between Russia and Ukraine, terrorism or other geopolitical events, the number and value of M&A transactions, as well as market volumes in equities, generally decrease, and they generally increase during periods of favorable market or economic conditions.

Restructuring activity generally is counter-cyclical to M&A activity.

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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

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

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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These circumstances could include unfavorable market conditions or the loss of key personnel of the investee.

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), or amounts in excess of that if management's review, discussed above, determined adequate cash is available.

For a further discussion of risks related to our business, refer to Item 1A.

"Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021.

Treasury Purchases

We periodically repurchase Class A Shares and/or LP Units into Treasury (including through the net settlement of equity awards) in order to offset the dilutive effect of equity awards granted as compensation (see Note 14 to our unaudited condensed consolidated financial statements for further information), or amounts in excess of that if management's review, discussed above, determines 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.

On October 23, 2017, our Board of Directors authorized (in addition to the net settlement of equity awards) the repurchase of Class A Shares and/or LP Units so that from that date forward, we were able to repurchase an aggregate of the lesser of $750.0 million worth of Class A Shares and/or LP Units and 8.5 million Class A Shares and/or LP Units.

Further, on April 27, 2021, our Board of Directors authorized (in addition to the net settlement of equity awards) the repurchase of Class A Shares and/or LP Units so that from that date forward, we are able to repurchase an aggregate of the lesser of $750.0 million worth of Class A Shares and/or LP Units and 8.5 million Class A Shares and/or LP Units.

On April 27, 2021, our Board of Directors authorized (in addition to the net settlement of equity awards) the repurchase of Class A Shares and/or LP Units so that from that date forward, we were able to repurchase an aggregate of the lesser of $750.0

million worth of Class A Shares and/or LP Units and 8.5 million Class A Shares and/or LP Units.

In addition, on February 22, 2022, our Board of Directors authorized (in addition to the net settlement of equity awards) the repurchase of Class A Shares and/or LP Units so that from that date forward, we are able to repurchase an aggregate of the lesser of $1.4 billion worth of Class A Shares and/or LP Units and 10.0 million Class A Shares and/or LP Units.

Under this share repurchase program, shares may be repurchased from time to time in open market transactions, in privately-negotiated transactions or otherwise.

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

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.

During the three months ended March 31, 2022, we repurchased 1,075,902 Class A Shares, at an average cost per share of $127.37, for $137.0 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 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

During the three months ended March 31, 2022, we repurchased 915,214 Class A Shares, at an average cost per share of $129.04, for $118.1 million, primarily related to minimum tax withholding requirements of share deliveries.

The aggregate 1,991,116 Class A Shares repurchased during the three months ended March 31, 2022 were acquired for aggregate purchase consideration of $255.1 million, at an average cost per share of $128.14.

Noncontrolling Interest Purchases

During the first quarter of 2022, we purchased, at fair value, an additional 0.4% of the EWM Class A Units for $1.4 million, which was included within Other Current Liabilities on the Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2022.

This purchase resulted in a decrease to Noncontrolling Interest of $0.1 million and a decrease to Additional-Paid-In-Capital of $1.4 million on our Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2022.

On December 31, 2021, we purchased, at fair value, all of the outstanding Class R Interests of Private Capital Advisory L.P.

from employees of the RECA business for $54.3 million.

Our consideration for this transaction included the payment of $6.0 million of cash in 2021, $27.7 million of cash during the three months ended March 31, 2022, and contingent cash consideration which will be settled in early 2024.

As of March 31, 2022 and December 31, 2021, the fair value of the contingent consideration is $20.0 million and $20.6 million, respectively, and is included within Other Long-term Liabilities on our Unaudited Condensed Consolidated Statement of Financial Condition.

The amount of contingent consideration to be paid is dependent on the RECA business achieving certain revenue performance targets.

The fair value of the contingent consideration reflects the present value of the expected payment due based on the current expectation for the business meeting the revenue performance targets.

In conjunction with this transaction, we will also issue two separate payments in early 2023 and 2024, contingent on continued employment, and accordingly, will be treated as compensation expense for accounting purposes in the periods earned.

These payments will also be dependent on the RECA business achieving certain revenue performance targets.

2016 Private Placement Notes

On March 30, 2016, we issued an aggregate $170.0 million of senior notes, including:

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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 September 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 March 31, 2022, we were in compliance with all of these covenants.

2019 Private Placement Notes

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

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

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

As of March 31, 2022, we were in compliance with all of these covenants.

2021 Private Placement Notes

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.

Interest on the 2021 Private Placement Notes is payable semi-annually and the 2021 Private Placement Notes are guaranteed by certain of our domestic subsidiaries.

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

As of March 31, 2022, 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 September 30, 2021.

We and our consolidated subsidiaries were in compliance with these covenants as of March 31, 2022.

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.

There were no drawings under this facility at March 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, as amended on October 30, 2020, of up to $30.0 million, to be used for working capital and other corporate activities.

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

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

We and our consolidated subsidiaries were in compliance with these covenants as of March 31, 2022.

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.

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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 September 30, 2021.

There were no drawings under this facility at March 31, 2022.

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.

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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.

There were no drawings under this facility at March 31, 2022.

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

Other Commitments

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

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

Pursuant to deferred compensation and deferred consideration arrangements, we are obligated to make cash payments in future periods.

We have long-term obligations for operating lease commitments, principally related to office space, which expire on various dates through 2035.

See Note 8 to our unaudited condensed consolidated financial statements for anticipated current and future payments under these arrangements.

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

Pursuant to deferred compensation and deferred consideration arrangements, we expect to make cash payments in future periods, including related to our Long-term Incentive Plans, Deferred Cash Compensation Program and other deferred compensation arrangements.

Further, we make investments to hedge the economic risk of the return on deferred compensation.

For further information see Notes 7 and 15 to our unaudited condensed consolidated financial statements.

For further information, including timing of payments, see Notes 6 and 14 to our unaudited condensed consolidated financial statements.

Certain of our subsidiaries are regulated entities and are subject to capital requirements.

For further information see Note 16 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 $8.5 million and $12.0 million as of September 30, 2021 and December 31, 2020, respectively.

We have a commitment for contingent consideration related to the purchase of the outstanding Class R Interests of Private Capital Advisory L.P.

from employees of the RECA business in 2021.

For further information see above and Notes 12 and 15 to our unaudited condensed consolidated financial statements.

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 $2.7 million and $6.1 million as of March 31, 2022 and December 31, 2021 , 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 15 to our unaudited condensed consolidated financial statements for further information.

Off-Balance Sheet Arrangements

We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any leasing activities that expose us to any liability that is not reflected in our unaudited condensed consolidated financial statements.

Our Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2022 included $454.8 million of Cash and Cash Equivalents and $1.1 billion of Investment Securities and Certificates of Deposit, which are generally comprised of highly-liquid investments.

For further information regarding other cash commitments and the timing of payments, refer to "General" above.

Market Risk and Credit Risk

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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 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.

These contracts settled in June 2020.

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

As of March 31, 2022, the fair value of our investments with these products, based on closing prices, was $163.3 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 $16.3 million, $32.7 million and $49.0 million, respectively, for the three months ended March 31, 2022.

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 $2.0 million for the three months ended September 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 $1.3 million for the three months ended March 31, 2022.

Exchange Rate Risk

We have foreign operations, through our subsidiaries and affiliates, primarily in Europe, Asia and Mexico (currently in wind-down), as well as provide services to clients in other jurisdictions, which creates foreign exchange rate risk.

We have foreign operations, through our subsidiaries and affiliates, primarily in Europe and Asia, as well as provide services to clients in other jurisdictions, which creates foreign exchange rate risk.

We have not entered into any transactions to hedge our exposure to foreign exchange fluctuations in these subsidiaries through the use of derivative instruments or otherwise.

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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).

British Pounds sterling, Euros, Singapore dollars, among others).

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

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.

For the three months ended March 31, 2022, 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 ($3.0) 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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Other Assets includes long-term receivables from fees related to private funds capital raising.

Receivables are reported net of any allowance for doubtful accounts.

We maintain an allowance for doubtful accounts to provide coverage for probable losses from our customer receivables and determine the adequacy of the allowance by estimating the probability of loss based on our analysis of historical credit loss experience of our client receivables, and taking into consideration current market conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.

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

Receivables are reported net of any allowance for credit losses.

We maintain an allowance for credit losses to provide coverage for probable losses from our customer receivables and determine the adequacy of the allowance by estimating the probability of loss based on our analysis of historical credit loss experience of our client receivables, and taking into consideration current market conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.

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

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

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.

We reversed bad debt expense of approximately $0.5 million and $1.7 million for the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022 and December 31, 2021, total receivables recorded in Accounts Receivable amounted to $313.7 million and $351.7 million, respectively, net of an allowance for credit losses, and total receivables recorded in Other Assets amounted to $75.2 million and $87.8 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 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 March 31, 2022, total contract assets recorded in Other Current Assets and Other Assets amounted to $44.6 million and $8.5 million, respectively.

As of December 31, 2021, total contract assets recorded in Other Current Assets and Other Assets amounted to $14.1 million and $12.9 million, respectively.

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.

As of March 31, 2022, we had Investment Securities of $939.5 million, of which 83% were treasury bills.

Critical Accounting Policies and Estimates

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Recently Issued Accounting Standards

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.

For a discussion of other 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

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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