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Item 7. Management’s Discussion and Analysis

2023-02-24 compared with 2022-02-24 · 227 added, 234 removed, 535 unchanged (46% of the section changed)

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Key Financial Measures

Total revenues reflect revenues from our Investment Banking and Investment Management business segments that include fees for services, transaction-related client reimbursements and other revenue.

Total revenues reflect revenues from our Investment Banking & Equities and Investment Management business segments that include fees for services, transaction-related client reimbursements and other revenue.

Net revenues reflect total revenues less interest expense.

Investment Banking.

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.

Investment Banking & Equities.

Our Investment Banking & Equities segment earns fees from its clients for providing advice on mergers, acquisitions, divestitures, capital raising, leveraged buyouts, restructurings, private funds advisory and private capital markets services, 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 its sales and trading activities.

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

In general, advisory fees are paid at the time we sign an engagement letter, during the course of the engagement or when an engagement is completed.

The majority of our investment banking revenue consists of advisory fees for which realizations are dependent on the successful completion of transactions.

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 court approval.

The majority of our revenue consists of advisory fees for which realizations are dependent on the successful completion of client transactions.

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, to achieve necessary regulatory approvals, or due to adverse market conditions.

In the case of bankruptcy engagements, fees may be 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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Revenue trends in our equities business are correlated to market volumes, which generally decrease in periods of low market volatility or unfavorable market or economic conditions.

See "Liquidity and Capital Resources" below for further information.

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.

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

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.

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

Management fees for third party clients generally represent a percentage of 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.

Transaction-Related Client Reimbursements .

In our Investment Banking segment, we incur various transaction-related expenditures, such as travel and professional fees, in the course of performing our services.

In our Investment Banking & Equities segment, we incur various transaction-related expenditures, such as travel and professional fees, in the course of performing our services.

Pursuant to the engagement letters with our advisory clients, these expenditures may be reimbursable.

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Client expense reimbursements are recorded as revenue on the Consolidated Statements of Operations on the later of the date an engagement letter is executed or the date we pay or accrue the expense.

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Other Revenue and Interest Expense.

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See Note 10 to our consolidated financial statements for further information.)

• Gains (losses) resulting from foreign currency fluctuations

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

See Note 10 to our consolidated financial statements for further information

• Gains (losses) resulting from foreign currency exchange rate fluctuations

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

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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 and recorded in employee compensation and benefits expense over the requisite service period.

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 and other awards, which are generally valued at their grant date and recorded in employee compensation and benefits expense over the requisite service period, subject to acceleration in certain cases.

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

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

With respect to annual awards, our retirement eligibility criteria generally stipulates that if an employee has at least five years of continuous service, is at least 55 years of age and has a combined age and years of service of at least 65 years, the employee is eligible for retirement.

Beginning in 2019, we implemented additional retirement eligibility qualifying criteria, for awards issued in 2019 and after, that stipulates if an employee has at least 10 years of continuous service and is at least 60 years of age, the employee is also eligible for retirement.

With respect to annual awards, our retirement eligibility criteria generally stipulates that an employee is eligible for retirement if the employee has at least five years of continuous service, is at least 55 years of age and has a combined age and years of service of at least 65 years, or if an employee has at least 10 years of continuous service and is at least 60 years of age.

Retirement eligibility allows for continued vesting of awards after employees depart from the Company, provided they give the minimum advance notice, which is generally six months to one year.

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

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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 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 and January 2022, our Board of Directors approved the issuance of Class L Interests in Evercore LP ("Class L Interests") 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 and 2023, respectively.

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 and 2022, respectively.

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

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

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.

In January 2023, our Board of Directors approved the issuance of 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 2024.

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 (the "2017 Long-term Incentive Plan") and January 1, 2021 (the "2021 Long-term Incentive Plan").

The first cash distribution under the 2017 Long-term Incentive Plan occurred in March 2021 and we made an additional cash distribution 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 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, 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 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.

From time to time, we also grant incentive 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 Units of Evercore LP and Class K-P Units of Evercore LP ("Class K-P Units").

See Note 18 to our consolidated financial statements for further information.

We believe that the ratio of Employee Compensation and Benefits Expense to Net Revenues is an important measure to assess the annual cost of compensation and provides a meaningful basis for comparison of compensation and benefits expense between present, historical and future years.

We believe that the ratio of Employee Compensation and Benefits Expense to Net Revenues is an important measure to assess the annual cost of compensation relative to performance and provides a meaningful basis for comparison of compensation and benefits expense between present, historical and future years.

Non-Compensation Expenses.

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Other Expenses include the following:

• Amortization of LP Units and Certain Other Awards – Includes amortization costs associated with the vesting of Class J limited partnership units of Evercore LP ("Class J LP Units") issued in conjunction with the acquisition of International Strategy & Investment ("ISI") and certain other related awards.

• Amortization of LP Units and Certain Other Awards – Includes amortization costs associated with the vesting of Class J limited partnership units of Evercore LP issued in conjunction with the acquisition of International Strategy & Investment ("ISI") and certain other related awards.

These awards were fully vested as of March 31, 2020

• Special Charges, Including Business Realignmen t Costs – Includes the following expenses:

◦ 2021 – Includes expenses 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 2021.

◦ 2020 – Includes expenses 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, as well as charges related to the impairment of assets resulting from the wind-down of our businesses in Mexico.

◦ 2019 – Includes expenses related to the acceleration of depreciation expense for leasehold improvements in conjunction with the expansion of our headquarters in New York, the impairment of goodwill in our

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Institutional Asset Management reporting unit and separation and transition benefits and related costs as a result of our review of operations.

• Special Charges, Including Business Realignment Costs – Includes the following expenses:

◦ 2022 – Includes expenses related to charges associated with the prepayment of our 5.23% Series B senior notes originally due March 30, 2023 (the "Series B Notes"), as well as certain professional fees, separation benefits and other charges related to the ongoing wind-down of our administrative functions in Mexico

◦ 2021 – Includes expenses related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our investment strategy, we decided to wind down during 2021

realignment initiatives, as well as charges related to the impairment of assets resulting from the wind-down of our businesses in Mexico

• Acquisition and Transition Costs – Includes costs incurred in connection with acquisitions, divestitures and other ongoing business development initiatives, primarily comprised of professional fees for legal and other services, including costs in 2020 associated with the sale of our ECB businesses

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Income from Equity Method Investments

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;

see Note 10 to our consolidated financial statements for further information) are included within Income from Equity Method Investments, as a component of Income Before Income Taxes, on the Consolidated Statements of Operations.

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

See Note 10 to our consolidated financial statements for further information.

Provision for Income Taxes

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In addition, net deferred tax assets are impacted by changes to statutory tax rates in the period of enactment.

See Note 21 to our consolidated financial statements for further information.

Noncontrolling Interest

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See Note 16 to our consolidated financial statements for further information.

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Results of Operations

The following is a discussion of our results of operations for the years ended December 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 a more detailed discussion of the factors that affected the revenue and operating expenses of our Investment Banking & Equities and Investment Management business segments in these periods, see the discussion in "Business Segments" below.

For the Years Ended December 31, Change

2022 2021 2020 2022 v.

(dollars in thousands, except per share data)

Investment Banking:

(dollars and share amounts in thousands, except per share data)

Investment Banking & Equities:

Advisory Fees $ 2,392,990 $ 2,751,992 $ 1,755,273 (13 %) 57 %

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$ 476,520 $ 740,116 $ 350,574 (36 %) 111 %

Diluted Weighted Average Shares of Class A Common Stock Outstanding 41,037 43,321 42,623 (5 %) 2 %

Diluted Net Income Per Share Attributable to Evercore Inc.

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Net Income Attributable to Evercore Inc.

was $740.1 million in 2021, an increase of $389.5 million, or 111%, compared to $350.6 million in 2020.

was $476.5 million in 2022, a decrease of $263.6 million, or 36%, compared to $740.1 million in 2021.

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

Net Revenues were $3.29 billion in 2021, an increase of $1.03 billion, or 45%, versus Net Revenues of $2.26 billion in 2020.

Advisory Fees increased $996.7 million, or 57%, Underwriting Fees decreased $29.5 million, or 11%, and Commissions and Related Revenue decreased $0.9 million compared to 2020.

Asset Management and Administration Fees increased $11.4 million, or 21%, compared to 2020.

Net Revenues were $2.76 billion in 2022, a decrease of $527.5 million, or 16%, versus Net Revenues of $3.29 billion in 2021.

Advisory Fees decreased $359.0 million, or 13%, Underwriting Fees decreased $124.1 million, or 50%, and Commissions and Related Revenue increased $0.4 million compared to 2021.

Asset Management and Administration Fees decreased $1.3 million, or 2%, compared to 2021.

See "Business Segments" below for further information.

Other Revenue, Including Interest and In vestments, increased $44.0 million compared to 2020, primarily driven by a loss of $30.8 million in 2020, resulting from the sale and wind-down of our businesses in Mexico, as well as higher performance of our investment funds portfolio and a gain on the redemption of the G5 debt security in 2021.

Total Operating Expenses were $2.18 billion in 2021, compared to $1.69 billion in 2020, an increase of $490.5 million, or 29%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $1.85 billion in 2021, an increase of $477.5 million, or 35%, versus expense of $1.37 billion in 2020.

The increase in the amount of compensation recognized in 2021 principally reflects a higher accrual for incentive compensation, higher base salaries and higher amortization

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of prior period deferred compensation awards, as well as increased headcount year over year, each related to growth in the business.

Ot her Revenue, Including Interest and Investments, decreased $44.2 million compared to 2021, primarily reflecting a shift from gains of $29.0 million in 2021 to losses of $29.8 million in 2022 on our investment funds portfolio due to the overall market decline.

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

The decrease was also driven by a $4.4 million gain on the redemption of the G5 debt security in 2021.

This was partially offset

by higher gains in our fixed income investment portfolios and higher interest income, as well as a $1.3 million gain on the sale of a portion of our interests in ABS during 2022.

See Note 10 to our consolidated financial statements for further information.

Total Operating Expenses were $2.06 billion in 2022, compared to $2.18 billion in 2021, a decrease of $115.6 million, or 5%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $1.70 billion in 2022, a decrease of $151.2 million, or 8%, versus expense of $1.85 billion in 2021.

The decrease in the amount of compensation recognized in 2022 principally reflects a lower provision for incentive compensation, partially offset by higher base salaries and higher amortization of prior period deferred compensation awards.

Non-compensation expenses as a component of Operating Expenses were $365.4 million in 2022, an increase of $35.7 million, or 11%, versus $329.7 million in 2021.

The increase was primarily driven by increases in professional fees and charitable contributions made to the Evercore Foundation (formed in 2021), partially offset by decreases in travel and related expenses, which continued to be depressed by the COVID-19 pandemic, and bad debt expense.

The increase was primarily driven by an increase in travel and related expenses, as travel, which curtailed during the COVID-19 pandemic, began to resume during the fourth quarter of 2021 and increased throughout 2022, as well as an increase in professional fees and bad debt expense.

This was partially offset by a decline in the fair value of contingent consideration owed to former equity interest holders in our RECA business, as well as charitable contributions made to the Evercore Foundation in 2021.

Non-Compensation expenses per employee were approximately $176.2 thousand for 2022, versus $174.9 thousand for 2021.

Total Other Expenses of $8.6 million in 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 2021 and (b) Acquisition and Transition Costs of $0.01 million.

Total Other Expenses of $49.5 million in 2020 included (a) Special Charges, Including Business Realignment Costs, of $46.6 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, as well as charges related to the impairment of assets resulting from the wind-down of our businesses in Mexico , (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 and certain other awards granted in conjunction with the acquisition of ISI and (d) Acquisition and Transition Costs of $0.6 million.

Total Other Expenses of $3.1 million in 2022 included Special Charges, Including Business Realignment Costs, related to charges associated with the prepayment of our Series B Notes, as well as certain professional fees, separation benefits and other charges related to the ongoing wind-down of our administrative functions in Mexico.

Total Other Expenses of $8.6 million in 2021 included 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 investment strategy, we decided to wind down during 2021 and Acquisition and Transition Costs of $0.01 million.

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 61.5% in 2022, compared to 56.2% in 2021.

The decrease in the compensation ratio 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, each related to growth in the business.

Income from Equity Method Investments was $8.0 million in 2022, compared to $14.2 million in 2021.

The decrease was a result of a decrease in earnings from our investments in ABS and Luminis, partially offset by an increase in earnings from our investment in Atalanta Sosnoff in 2021.

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

See Note 10 to our consolidated financial statements for further information.

The provision for income taxes in 2022 was $172.6 million, which reflected an effective tax rate of 24.5%.

The provision for income taxes in 2021 was $248.0 million, which reflected an effective tax rate of 22.2%.

The provision for income taxes for 2021 reflects an additional tax benefit of $18.7 million and for 2020 an additional tax expense of $0.02 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 provision for income taxes also reflects the effect of certain nondeductible expenses, including expenses related to Class J LP Units and Class I-P and K-P Units, as well as the noncontrolling interest associated with LP Units and other adjustments.

The increase in the effective tax rate reflects higher state and local taxes and a lower amount of earnings allocated to noncontrolling interest holders.

The increase was partially offset by a higher net tax benefit in 2022 associated with the appreciation or depreciation in our share price upon vesting of employee share-based awards above or below the original grant price.

Net Income Attributable to Noncontrolling Interest was $54.9 million in 2022 compared to $128.5 million in 2021.

The increase in Net Income Attributable to Noncontrolling Interest primarily reflects higher earnings for Evercore LP in 2021.

The decrease in Net Income Attributable to Noncontrolling Interest primarily reflects lower income at Evercore LP in 2022, as well as the decrease in noncontrolling ownership interest in 2022.

See Note 16 to our consolidated financial statements for further information.

For a discussion of 2021 versus 2020, refer to Item 7.

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"Management's Discussion and Analysis of Financial Condition and Results of Operations – Impairment of Assets" in our Form 10-K for the year ended December 31, 2021.

We recorded $8.6 million in Special Charges, Including Business Realignment Costs, on the Consolidated Statement of Operations for the year ended December 31, 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 2021.

See Note 10 to our consolidated financial statements for further information .

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We recorded impairment charges of $1.7 million in Special Charges, Including Business Realignment Costs, on the Consolidated Statement of Operations for the year ended December 31, 2020, related to the impairment of assets resulting from the wind-down of our businesses in Mexico.

This was comprised of a charge of $1.2 million related to the impairment of operating lease right-of-use assets and a charge of $0.5 million related to the impairment of leasehold improvements.

We recorded no impairment charges for the year ended December 31, 2022.

We recorded $8.6 million in Special Charges, Including Business Realignment Costs, on the Consolidated Statement of Operations for the year ended December 31, 2021 , related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our investment strategy, we decided to wind-down during 2021.

See Note 10 to our consolidated financial statements for further information .

For a discussion of 2020, refer to Item 7.

"Management's Discussion and Analysis of Financial Condition and Results of Operations – Impairment of Assets" in our Form 10-K for the year ended December 31, 2021.

Business Segments

The following data presents revenue, expenses and contributions from our equity method investments by business segment.

Investment Banking

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

Investment Banking & Equities

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

For the Years Ended December 31, Change

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(dollars in thousands)

Investment Banking:

Investment Banking & Equities:

Advisory Fees $ 2,392,990 $ 2,751,992 $ 1,755,273 (13 %) 57 %

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Operating Expenses 2,009,913 2,125,871 1,637,542 (5 %) 30 %

Other Expenses 7 49,112 33,618 (100 %) 46 %

Other Expenses 3,126 7 49,112 NM (100 %)

Total Expenses 2,013,039 2,125,878 1,686,654 (5 %) 26 %

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Pre-Tax Income $ 684,303 $ 1,099,348 $ 532,278 (38 %) 107 %

(1) We renamed "Commissions and Related Fees" to "Commissions and Related Revenue" and reclassified $0.9 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 years ended December 31, 2020 and 2019, respectively.

(1) We renamed "Commissions and Related Fees" to "Commissions and Related Revenue" and reclassified $0.9 million of principal trading gains and losses from our institutional equities business from "Other Revenue, net" to "Commissions and Related Revenue" for the year ended December 31, 2020.

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

(2) Includes interest expense on Notes Payable and lines of credit of $16.9 million, $17.6 million and $18.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

(3) Includes a gain of $4.4 million for the year ended December 31, 2021, resulting from the redemption of our G5 debt security during 2021.

(4) Includes a loss of $21.1 million resulting from the sale and wind-down of our businesses in Mexico, related to the release of cumulative foreign exchange losses for the year ended December 31, 2020 .

(3) Includes a gain of $4.4 million for the year ended December 31, 2021, resulting from the redemption of our G5 debt security.

(4) Includes a loss of $21.1 million for the year ended December 31, 2020, resulting from the sale and wind-down of our businesses in Mexico, related to the release of cumulative foreign exchange losses.

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

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For 2021 , the dollar value of North American announced and completed M&A activity increased 83% and 55%, respectively, compared to 2020 , and the dollar value of Global announced and completed M&A activity increased 62% and 41%, respectively, compared to 2020.

For 2022, the dollar value of North American announced and completed M&A activity decreased 38% and 32%, respectively, compared to 2021, and the dollar value of Global announced and completed M&A activity decreased 36% and 21%, respectively, compared to 2021.

For the Years Ended December 31, Change

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Total Number of Fees From Advisory Client Transactions (2)

651 797 687 (18 %) 16 %

Total Number of Fees of at Least $1 million from Advisory Client Transactions (2)

409 502 386 (19 %) 30 %

Total Number of Underwriting Transactions (3)

49 117 118 (58 %) (1 %)

Total Number of Underwriting Transactions as a Bookrunner (3)

44 100 85 (56 %) 18 %

Refinitiv January 5, 2023

** Includes revenue generating clients

Investment Banking Results of Operations

(2) Includes Advisory and Underwriting Transactions.

(3) Includes Equity and Debt Underwriting Transactions.

Investment Banking & Equities Results of Operations

2022 versus 2021

Investment Banking Net Revenues were $3.22 billion in 2021, compared to $2.22 billion in 2020, an increase of $1.01 billion, or 45%.

The increase in revenues from 2020 was primarily driven by an increase of $996.7 million, or 57%, in Advisory Fees, reflecting an increase in the number of Advisory fees earned and growth in fee size during 2021.

We earned 797 fees from Advisory clients in 2021, compared to 687 in 2020, representing a 16% increase.

We earned 502 fees in excess of $1.0 million in 2021, compared to 386 in 2020, representing a 30% increase.

These increases reflect increases in strategic advisory, including M&A and activism defense, as well as increases in fees earned from our private capital and funds advisory activities.

Underwriting Fees decreased $29.5 million, or 11%, compared to 2020, reflecting a decrease in the number of transactions we participated in, as well as 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 in 2020.

Commissions and Related Revenue decreased $0.9 million compared to 2020, reflecting lower volatility and volumes compared to the prior year period.

Other Revenue, net, increased $40.1 million compared to 2020, primarily driven by a loss of $21.1 million in 2020, resulting from the sale and wind-down of our businesses in Mexico, as well as higher performance of our investment funds portfolio and a gain on the redemption of the G5 debt security in 2021.

Operating Expenses were $2.13 billion in 2021, compared to $1.64 billion in 2020, an increase of $488.3 million, or 30%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $1.81 billion in 2021, compared to $1.33 billion in 2020, an increase of $474.7 million, or 36%.

The increase in the amount of compensation recognized in 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, each related to growth in the business.

Net Revenues were $2.70 billion in 2022 , compared to $3.22 billion in 2021 , a decrease of $527.8 million, or 16%.

The decrease in revenues from 2021 was primarily driven by a decrease of $359.0 million, or 13%, in Advisory Fees, reflecting a decrease in the number of fees earned.

Underwriting Fees decreased $124.1 million, or 50%, compared to 2021, principally reflecting a decrease in the number of transactions we participated in due to the decline in overall market issuances.

Commissions and Related Revenue increased $0.4 million compared to 2021 , primarily reflecting increased revenues from research subscriptions, partially offset by lower trading volumes.

Other Revenue, net, decreased $45.0 million compared to 2021 , primarily reflecting a shift from gains of $29.0 million in 2021 to losses of $29.8 million in 2022 on our investment funds portfolio due to the overall market decline.

The decrease was also driven by a $4.4 million gain on the redemption of the G5 debt security in 2021.

This was partially offset by higher gains in our fixed income investment portfolios and higher interest income.

Operating Expenses were $2.01 billion in 2022 , compared to $2.13 billion in 2021 , a decrease of $116.0 million, or 5%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $1.66 billion in 2022 , compared to $1.81 billion in 2021 , a decrease of $151.3 million , or 8% .

Non-compensation expenses, as a component of Operating Expenses, were $351.8 million in 2022, compared to $316.5 million in 2021, an increase of $35.3 million , or 11% .

Non-compensation operating expenses increased from the prior year, primarily driven by increases in professional fees, related to growth in the business, and charitable contributions made to the Evercore Foundation (formed in 2021), partially offset by decreases in travel and related expenses, which continued to be depressed by the COVID-19 pandemic, and bad debt expense.

Other Expenses of $0.01 million in 2021 reflected Acquis ition and Transition Costs.

Other Expenses of $49.1 million in 2020 included (a) Special Charges, Including Business Realignment Costs, of $46.6 million related to separation and transition benefits and related costs and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets

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in conjunction with the expansion of our headquarters in New York and our business realignment initiatives, as well as charges related to the impairment of assets resulting from the wind-down of our businesses in Mexico, (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 and certain other awards granted in conjunction with the acquisition of ISI and (d) Acquisition and Transition Costs of $0.3 million.

Non-compensation operating expenses increased from the prior year, primarily driven by an increase in travel and related expenses, as travel, which curtailed during the COVID-19 pandemic, began to resume during the fourth quarter of 2021 and increased throughout 2022, as well as an increase in professional fees and bad debt expense.

Other Expenses of $3.1 million in 2022 included Special Charges, Including Business Realignment Costs, related to charges associated with the prepayment of our Series B Notes , as well as certain professional fees, separation benefits and other charges related to the ongoing wind-down of our administrative functions in Mexico.

Ot her Expenses of $0.01 million in 2021 reflected Acquis ition and Transition Costs.

For a discussion of 2021 versus 2020, refer to Item 7.

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Institutional Asset Management (1)

— 1,328 2,528 NM (47 %)

— — 1,328 NM NM

Asset Management and Administration Fees 64,483 65,784 54,397 (2 %) 21 %

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Operating Expenses 52,967 52,629 50,473 1 % 4 %

Other Expenses (3)

8,554 345 3,247 NM (89 %)

Other Expenses — 8,554 345 NM NM

Total Expenses 52,967 61,183 50,818 (13 %) 20 %

Operating Income (Loss) 4,427 (4,299) 5,011 NM NM

Operating Income (Loss) 12,956 4,427 (4,299) 193 % NM

Income from Equity Method Investments (4)

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

(2) Includes a loss of $9.7 million resulting from the sale and wind-down of our businesses in Mexico, including $3.4 million related to the sale of our ECB businesses and $6.3 million related to the release of cumulative foreign exchange losses for the year ended December 31, 2020.

(3) Includes an impairment charge related to the impairment of goodwill in the Institutional Asset Management reporting unit of $2.9 million for the year ended December 31, 2019.

(2) Includes a gain of $1.3 million for the year ended December 31, 2022, resulting from the sale of a portion of our interests in ABS.

(3) Includes a loss of $9.7 million for the year ended December 31, 2020, resulting from the sale and wind-down of our businesses in Mexico, including $3.4 million related to the sale of our ECB businesses and $6.3 million related to the release of cumulative foreign exchange losses.

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

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and Trilantic Capital Partners VI (North America), L.P.

("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 December 31, 2022, $0.6 million of previously distributed carried interest received from the funds was subject to repayment.

During 2021, consistent with our current investment strategy, we

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decided to wind-down our investment relationship with Trilantic Capital Partners.

During 2021, consistent with our investment strategy, we decided to wind down our investment relationship with Trilantic Capital Partners ("Trilantic").

See Note 10 to our consolidated financial statements for further information.

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

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

See Note 10 to our consolidated financial statements for further information.

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

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Assets Under Management

AUM for our Wealth Management business of $12.2 billion at December 31, 2021 increased $2.0 billion, or 20%, compared to $10.2 billion at December 31, 2020.

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

As defined in ASC 820, "Fair Value Measurements and Disclosures" ("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.

AUM in our Wealth Management business of $10.5 billion at December 31, 2022 decreased $1.7 billion, or 14% , 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.

As defined in ASC 820, "Fair Value Measurements and Disclosures" ("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 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 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 years ended December 31, 2021 and 2020:

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Management (1)

Institutional

Management Total

The following table summarizes AUM activity for Wealth Management for the years ended December 31, 2022 and 2021:

(dollars in millions)

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Outflows (1,294)

Market Appreciation (Depreciation) 1,005 (125) 880

Deconsolidation of ECB (December 16, 2020) — (1,538) (1,538)

Market Appreciation 1,523

Balance at December 31, 2021 (1)

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Outflows (1,289)

Market Appreciation 1,523 — 1,523

Market Appreciation (Depreciation) (1,733)

Balance at December 31, 2022 (1)

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Atalanta Sosnoff $ 6,649

ABS $ — $ 7,383 $ 7,383

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

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

Wealth Management

Equities 61 %

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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.

In 2022, AUM for Wealth Management decreased 14% , primarily reflecting a decrease due to market depreciation.

Performance for 2022 reflected:

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

• Wealth Management outperformed the fixed income composite on a 1-year basis by approximately 10 basis points and lagged the fixed income composite on a 3-year basis by approximately 20 basis points

• The S&P 500 and fixed income composite were each down approximately 18% and 5%, respectively

In 2021, AUM for Wealth Management increased 20%, reflecting a 15% increase due to market appreciation and a 5% increase due to flows.

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• The S&P 500 was up approximately 29% and the fixed income composite was down approximately 1%

In 2020 , AUM for Wealth Management increased 12%, reflecting an 11% increase due to market appreciation and a 1% increase due to flows.

Performance for 2020 reflected:

• Wealth Management outperformed the S&P 500 on a 1 and 3-year basis by approximately 6% and 4%, respectively

• Wealth Management lagged the fixed income composite on a 1 and 3-year basis by approximately 80 basis points and 50 basis points, respectively

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• The S&P 500 and fixed income composite were up approximately 18% and 5%, respectively

Our Institutional Asset Management business reflected assets managed by ECB prior to its deconsolidation on December 16, 2020.

ECB primarily managed Mexican Government and corporate fixed income securities, as well as equity products.

ECB utilized the IPC Index, which is a capitalization weighted index of leading equities traded on the Mexican Stock Exchange and the Cetes 28 Index, which is an index of Treasury Bills issued by the Mexican Government, as benchmarks in reviewing their performance and managing their investment decisions.

ECB's AUM market depreciation in 2020 reflected market volatility, as well as the impact of the fluctuation of foreign currency.

ECB outperformed the equities index and outperformed the fixed income index on two of their three portfolios in 2020.

AUM from our unconsolidated affiliates increased 12% compared to December 31, 2020, reflecting positive performance in both Atalanta Sosnoff and ABS.

AUM from our unconsolidated affiliates decreased 17% compared to December 31, 2021, reflecting declines in both Atalanta Sosnoff and ABS.

2022 versus 2021

Investment Management Net Revenues were $65.6 million in 2021, compared to $46.5 million in 2020, an increase of $19.1 million, or 41%.

Asset Management and Administration Fees earned from the management of client portfolios increased 21% from 2020 driven by an increase of $12.7 million in fees from Wealth Management clients, as associated AUM increased 20%, primarily from market appreciation.

Fee-based revenues included $0.08 million of revenues from performance fees in 2020.

Other Revenue, net, increased $7.7 million from 2020, primarily driven by a loss of $9.7 million resulting from the sale and wind-down of our businesses in Mexico in 2020, including $3.4 million related to the sale of our ECB businesses and $6.3 million related to the release of cumulative foreign exchange losses.

Income from Equity Method Investments decreased slightly from 2020, as a result of a decrease in earnings from our investment in ABS, partially offset by an increase in earnings from our investment in Atalanta Sosnoff.

Net Revenues were $65.9 million in 2022, compared to $65.6 million in 2021, an increase of $0.3 million.

Asset Management and Administration Fees earned from the management of Wealth Management client portfolios decreased $1.3 million, or 2%, from 2021 as associated AUM decreased 14%, primarily from market depreciation.

Other Revenue, net, increased $1.6 million from 2021, primarily driven by higher gains on our private equity investments.

Operating Expenses were $53.0 million in 2022, compared to $52.6 million in 2021, an increase of $0.3 million, or 1%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $39.5 million in 2022, compared to $39.3 million in 2021, an increase of $0.2 million, or 1%.

Non-Compensation expenses, as a component of Operating Expenses, were $13.3 million in 2021, compared to $13.9 million in 2020, a decrease of $0.6 million, or 4%.

Other Expenses of $8.6 million in 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 2021.

Other Expenses of $0.3 million in 2020 included Acquisition and Transition Costs of $0.3 million and Special Charges, Including Business Realignment Costs, of $0.05 million, related to separation and transition benefits and related costs.

Non-Compensation expenses, as a component of Operating Expenses, were $13.5 million in 2022, compared to $13.3 million in 2021, an increase of $0.2 million, or 2%.

Other Expenses of $8.6 million in 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 investment strategy, we decided to wind down during 2021.

Income from Equity Method Investments decreased 47% from 2021, primarily driven by lower income earned by ABS, principally reflecting a decrease in our ownership following the sale of a portion of our interests during 2022.

See Note 10 to our consolidated financial statements for further information.

For a discussion of 2021 versus 2020, refer to Item 7.

"Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations" in our Form 10-K for the year ended December 31, 2021.

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

Our operating cash flows are primarily influenced by the timing and receipt of 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.

Advisory and Underwriting 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 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.

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.

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

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

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

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

We periodically draw down on our lines of credit to balance the timing of our

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operating, investing and financing cash flow needs.

If required, we may periodically draw down on our lines of credit to balance the timing of our operating, investing and financing cash flow needs.

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

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End of Period $ 672,123 $ 587,293 $ 838,224

Cash, Cash Equivalents and Restricted Cash were $672.1 million at December 31, 2022, an increase of $84.8 million versus Cash, Cash Equivalents and Restricted Cash of $587.3 million at December 31, 2021.

Operating activities resulted in a net inflow of $531.4 million, primarily related to earnings, partially offset by the payment of 2021 bonus awards and deferred cash compensation, which contributed to a decrease to Accrued Compensation and Benefits on our Consolidated Statement of Financial Condition as of December 31, 2022.

Cash of $313.3 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 purchases of equipment and leasehold improvements.

Financing activities during the period used cash of $735.6 million, primarily for purchases of treasury stock (including for net settlement of RSUs) and noncontrolling interests, the repayment of our Notes Payable and dividends and distributions to noncontrolling interest holders, partially offset by the issuance of the 2022 Private Placement Notes.

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

currencies to U.S.

Cash, Cash Equivalents and Restricted Cash were $587.3 million at December 31, 2021, a decrease of $250.9 million versus Cash, Cash Equivalents and Restricted Cash of $838.2 million at December 31, 2020.

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Investing activities during the period used cash of $705.9 million, primarily related to net purchases of investment securities and certificates of deposit and purchases of equipment and leasehold improvements, principally related to the expansion of our headquarters in New York, partially offset by proceeds from the redemption of the G5 debt security and proceeds received for the sale of our interests in Trilantic VI.

Financing activities during the period used cash of $925.3 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.

Financing activities during the period used cash of $925.3 million, primarily for purchases of treasury stock (including for net settlement of RSUs) 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 13 to our consolidated financial statements.

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currencies to U.S.

Cash, Cash Equivalents and Restricted Cash were $838.2 million at December 31, 2020, an increase of $194.3 million versus Cash, Cash Equivalents and Restricted Cash of $643.9 million at December 31, 2019.

Operating activities resulted in a net inflow of $978.4 million, primarily related to earnings.

Cash of $483.9 million was used by investing activities primarily related to net purchases of investment securities and purchases of equipment and leasehold improvements, principally related to the expansion of our headquarters in New York, partially offset by the maturity of certificates of deposit.

Financing activities during the period used cash of $307.8 million, primarily for purchases of treasury stock and the payment of 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.

For a discussion of 2020, refer to Item 7.

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Liquidity and Capital Resources

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

Our current assets principally include Cash and Cash Equivalents, Investment Securities and Certificates of Deposit, Accounts Receivable and contract assets, included in Other Current Assets, relating to revenues from our Investment Banking & Equities and Investment Management segments.

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

We traditionally have made payments for employee bonus awards and year-end distributions to partners in the first quarter of the year with respect to the prior year's results.

In addition, payments in respect of deferred cash compensation arrangements and related investments are also made in

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the first quarter.

In addition, payments in respect of deferred cash compensation arrangements and related investments are also made in the first quarter.

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 quarterly.

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.

We regularly monitor our liquidity position, including cash, other significant working capital, current assets and liabilities, long-term liabilities, lease commitments and related fixed assets, principal investment commitments related to our Investment Management business, dividends on Class A Shares, partnership distributions and other capital transactions, as well as other matters relating to liquidity and compliance with regulatory requirements.

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 liquidity is highly dependent on our revenue stream from our operations, principally from our Investment Banking & Equities segment, which is primarily 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.

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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 inflation, changes in the level of interest rates, changes in the availability of financing, supply chain disruptions, an evolving regulatory environment, 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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These adverse conditions could also have an impact on our goodwill impairment assessment, which is done annually, as of November 30th, or more frequently if circumstances indicate impairment may have occurred.

We are currently in a period of macroeconomic uncertainty and market volatility, including historically high inflation, supply chain constraints, rising interest rates, changes in the availability of financing, geopolitical tensions, an evolving regulatory environment and the risk of a recession.

These factors have led to a slowing of the pace of M&A and other advisory transaction announcements and the elongation of the timing of transaction closings, as well as suppressing the level of underwriting activity.

We will continue to assess the potential ongoing impacts of the current environment, including the regular monitoring of our cash levels, liquidity, regulatory capital requirements, debt covenants and our other contractual obligations.

See "Results of Operations" above for further information.

We assess our equity method investments for impairment annually, or more frequently if circumstances indicate impairment may have occurred.

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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 granted to employees) the repurchase of Class A Shares and/or LP Units so that from that date forward, we were able to repurchase an

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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.

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Noncontrolling Interest Purchases

During 2022, we purchased, at fair value, an additional 0.9% of the EWM Class A Units for $3.2 million.

This purchase resulted in a decrease to Noncontrolling Interest of $0.2 million and a decrease to Additional-Paid-In-Capital of $3.0 million on our Consolidated Statement of Financial Condition as of December 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 Real Estate Capital Advisory ("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 payable in early 2022, included within Payable to Employees and Related Parties on the Consolidated Statement of Financial Condition as of December 31, 2021, and contingent cash consideration which will be settled in early 2024.

The contingent consideration has a fair value of $20.6 million as of December 31, 2021 and is included within Other Long-term Liabilities on the Consolidated Statement of Financial Condition.

The amount of contingent consideration to be paid is dependent on the 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 achieving 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 with the Company, and accordingly, will be treated as compensation expense for accounting purposes in the periods earned.

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

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

Common Interests for $28.4 million.

On May 31, 2019, we also purchased, at fair value, an additional 17% of the EWM Class A Units for $24.5 million (in cash of $21.8 million and the issuance of 31,383 Class A LP Units having a fair value of $2.7 million).

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 in 2022, and contingent cash consideration which will be settled in early 2024.

The fair value of the remaining contingent consideration is $6.1 million and $20.6 million as of December 31, 2022 and 2021, respectively, $1.1 million of which is included within Other Current Liabilities on our Consolidated Statement of Financial Condition as of December 31, 2022 and the remainder of which is included within Other Long-term Liabilities on our Consolidated Statement of Financial Condition as of December 31, 2022.

The decline in the fair value of the contingent consideration in 2022 reduced Other Operating Expenses by $14.5 million on the Consolidated Statement of Operations.

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:

$38.0 million aggregate principal amount of our 4.88% Series A senior notes which were due March 30, 2021 (the "Series A Notes"), $67.0 million aggregate principal amount of our 5.23% Series B senior notes due March 30, 2023 (the "Series B Notes"), $48.0 million aggregate principal amount of our 5.48% Series C senior notes due March 30, 2026 (the "Series C Notes") and $17.0 million aggregate principal amount of our 5.58% Series D senior notes due March 30, 2028 (the "Series D Notes" and together with the Series A Notes, the Series B Notes and the Series C Notes, the "2016 Private Placement Notes"), pursuant to the 2016 Note Purchase Agreement dated as of March 30, 2016 (the "2016 Note Purchase Agreement"), among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

In March 2021, we repaid the $38.0 million aggregate principal amount of our Series A Notes.

$38.0 million aggregate principal amount of our 4.88% Series A senior notes which were due March 30, 2021 (the "Series A Notes"), $67.0 million aggregate principal amount of our Series B Notes which were originally due March 30, 2023, $48.0 million aggregate principal amount of our 5.48% Series C senior notes due March 30, 2026 (the "Series C Notes") and $17.0 million aggregate principal amount of our 5.58% Series D senior notes due March 30, 2028 (the "Series D Notes" and together with the Series A Notes, the Series B Notes and the Series C Notes, the "2016 Private Placement Notes"), pursuant to the 2016 Note Purchase Agreement dated as of March 30, 2016 (the "2016 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 2016 Private Placement Notes is payable semi-annually and the 2016 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 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

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

In March 2021, we repaid the $38.0 million aggregate principal amount of our Series A Notes.

On June 28, 2022, we prepaid the $67.0 million aggregate principal amount of our Series B Notes plus the applicable make-whole amount.

In conjunction with the June 2022 prepayment and the acceleration of the remaining debt issuance costs, we recorded a loss of $0.5 million for the year ended December 31, 2022, included within Special Charges, Including Business Realignment Costs, on our Consolidated Statement of Operations.

2019 Private Placement Notes

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These notes include:

$75.0 million aggregate principal amount of our 4.34% Series E senior notes due August 1, 2029 (the "Series E Notes"), $60.0 million aggregate principal amount of our 4.44% Series F senior notes due August 1, 2031 (the "Series F Notes"), $40.0 million aggregate principal amount of our 4.54% Series G senior notes due August 1, 2033 (the "Series G Notes") and £25.0 million aggregate principal amount of our 3.33% Series H senior notes due August 1, 2033 (the "Series H Notes" and together with the Series E Notes, the Series F Notes and the Series G Notes, the "2019 Private Placement Notes"), each of which were issued pursuant to the 2019 Note Purchase Agreement dated as of August 1, 2019 (the "2019 Note Purchase Agreement"), among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

each of which were issued pursuant to the 2019 Note Purchase Agreement dated as of August 1, 2019 (the "2019 Note Purchase Agreement"), among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

Interest on the 2019 Private Placement Notes is payable semi-annually and the 2019 Private Placement Notes are guaranteed by certain of our domestic subsidiaries.

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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 senior notes due August 1, 2025 (the "Series I Notes" or the "2021 Private Placement Notes"), pursuant to a note purchase agreement (the "2021 Note Purchase Agreement") dated as of March 29, 2021, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

On March 29, 2021, we issued $38.0 million aggregate principal amount of our 1.97% Series I senior notes due August 1, 2025 (the "Series I Notes" or the "2021 Private Placement Notes"), pursuant to a note purchase agreement (the "2021 Note Purchase Agreement") dated as of March 29, 2021, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

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

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

2022 Private Placement Notes

On June 28, 2022, we issued $67.0 million aggregate principal amount of our 4.61% Series J senior notes due November 15, 2028 (the "Series J Notes" or the "2022 Private Placement Notes"), pursuant to a note purchase agreement (the "2022 Note Purchase Agreement") dated as of June 28, 2022, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

Interest on the 2022 Private Placement Notes is payable semi-annually and the 2022 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 2022 Private Placement Notes, in an amount not less than 5% of the aggregate principal amount of the 2022 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 2022 Private Placement Notes will have the right to require us to prepay the entire unpaid principal amounts held by each holder of the 2022 Private Placement Notes plus accrued and unpaid interest to the prepayment date.

The 2022 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 December 31, 2022, we were in compliance with all of these covenants.

Lines of Credit

On June 24, 2016, Evercore Partners Services East L.L.C.

("East") entered into a loan agreement with PNC Bank, National Association ("PNC") for a revolving credit facility in an aggregate principal amount of up to $30.0 million, to be used for working capital and other corporate activities.

Evercore Partners Services East L.L.C.

("East") entered into a loan agreement with PNC Bank, National Association ("PNC") for a revolving credit facility in an aggregate principal amount, as amended on October 29, 2021, (the "Existing PNC Facility"), of up to $30.0 million, to be used for working capital and other corporate activities.

This facility is secured by East's accounts receivable and the proceeds therefrom, as well as certain assets of EGL, including certain of EGL's accounts receivable.

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We and our consolidated subsidiaries were in compliance with these covenants as of December 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 (as amended, the "Existing PNC Facility").

The interest rate provisions are LIBOR (or an applicable benchmark

replacement) plus 150 basis points and the maturity date is October 28, 2023.

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

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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.

East entered into an additional loan agreement with PNC for a revolving credit facility in an aggregate principal amount, as amended on October 29, 2021, of up to $55.0 million, to be used for working capital and other corporate activities.

This facility is unsecured.

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We and our consolidated subsidiaries were in compliance with these covenants as of December 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.

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

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

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

There were no drawings under this facility at December 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.

EGL entered into a subordinated revolving credit facility with PNC in an aggregate principal amount, as amended on October 31, 2022, of up to $75.0 million, to be used as needed in support of capital requirements from time to time of EGL.

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

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

The interest rate provisions are Daily SOFR plus 191 basis points and the maturity date is October 27, 2024.

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

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

For further information see Note 19 to our consolidated financial statements.

See Note 19 to our consolidated financial statements.

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.

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from employees of the RECA business in 2021.

For further information see above and Notes 16 and 19 to our consolidated financial statements.

For further information see " Noncontrolling Interest Purchases" above and Notes 16 and 19 to our consolidated financial statements.

We had total commitments (not reflected on our Consolidated Statements of Financial Condition) relating to future capital contributions to private equity funds of $2.4 million and $6.1 million as of December 31, 2022 and 2021, respectively.

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See Note 19 to our consolidated financial statements for further information.

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

See Note 10 to our consolidated financial statements for further information.

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 consolidated financial statements.

As of December 31, 2022, our current and former Senior Managing Directors owned an aggregate of approximately 1.7 million vested Class A LP Units, 0.4 million vested Class E LP Units, 0.4 million vested Class I LP Units and 0.1 million vested Class K LP Units.

In addition, 0.8 million unvested Class K-P Units, which convert into a number of Class K LP Units based on the achievement of certain market and service conditions and defined benchmark results, were outstanding as of December 31, 2022.

We have an obligation to exchange vested Class A, E, I and K LP Units to Class A Common Stock upon the request of the holder.

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

Our Consolidated Statement of Financial Condition as of December 31, 2022 included $663.4 million of Cash and Cash Equivalents and $1.4 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.

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Market Risk and Credit Risk

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As of December 31, 2022, the fair value of our investments with these products, based on closing prices, was $137.1 million.

We had net realized and unrealized losses of ($29.8) million for the year ended December 31, 2022, from our exchange-traded funds portfolio.

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

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 $13.7 million, $27.4 million and $41.1 million, respectively, for the year ended December 31, 2022.

In February 2020, we entered into four-month futures contracts on a stock index fund with a notional amount of $38.9 million and in April 2019, we entered into three-month futures contracts on a stock index fund with a notional amount of $14.8 million, as an economic hedge against our deferred cash compensation program.

These contracts settled in June 2020 and June 2019, respectively.

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

We had realized gains (losses) of ($4.0) million and $0.1 million for the years ended December 31, 2020 and 2019, respectively.

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.

We had realized losses of ($4.0) million for the year ended December 31, 2020.

Private Equity Funds

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

See Note 10 to our consolidated financial statements for further information.

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 $0.5 million for the year ended December 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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dollar would result in an adverse or beneficial impact to our financial results.

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

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

A significant portion of our non-U.S.

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

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

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

For the year ended December 31, 2021, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income (Loss) within the Consolidated Statement of Comprehensive Income was ($2.5) million.

For the year ended December 31, 2022, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income (Loss) within the Consolidated Statement of Comprehensive Income was a loss of ($20.9) million, net of tax.

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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Accounts Receivable consists primarily of advisory fees and expense reimbursements billed to our clients.

Other Assets includes long-term receivables from fees related to private funds capital raising.

Other Assets includes long-term receivables from fees related to private funds capital raising and certain fees related to the private capital businesses.

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

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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.

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.

Our 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 reversed bad debt expense of approximately $0.1 million for the year ended December 31, 2021 and recorded bad debt expense of approximately $6.9 million and $10.5 million for the years ended December 31, 2020 and 2019, respectively.

We recorded bad debt expense of approximately $5.5 million and $6.9 million for the years ended December 31, 2022 and 2020, respectively, and reversed bad debt expense of approximately $0.1 million for the year ended December 31, 2021.

As of December 31, 2022 and 2021, total receivables recorded in Accounts Receivable amounted to $385.1 million and $351.7 million, respectively, net of an allowance for credit losses, and total receivables recorded in Other Assets amounted to $64.1 million and $87.8 million, respectively.

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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 December 31, 2021, we had Investment Securities of $1.6 billion, of which 91% were treasury bills.

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

As of December 31, 2022, we had Investment Securities of $1.3 billion, of which 90% were treasury bills and notes.

Critical Accounting Policies and Estimates

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Recognize revenue when (or as) the entity satisfies a performance obligation

We apply this model to our Investment Banking and Asset Management revenue streams.

Investment Banking Revenue

We earn investment banking fees from clients for providing advisory services on strategic matters, including mergers, acquisitions, divestitures, leveraged buyouts, restructurings, activism and defense and similar corporate finance matters.

Our Investment Banking services also include services related to securities underwriting, private placement services and commissions for agency-based equity trading services and equity research.

Revenue is recognized as we satisfy performance obligations, upon transfer of control of promised services to customers in an amount that reflects the consideration we expect to receive in exchange for these services.

We apply this model to revenue streams from our Investment Banking & Equities and Investment Management segments.

Investment Banking & Equities Revenue

We earn fees from clients for providing advisory services on strategic matters, including mergers, acquisitions, divestitures, leveraged buyouts, restructurings, activism and defense and similar corporate finance matters.

Our Investment Banking & Equities segment also includes services related to securities underwriting, private placement services and commissions for agency-based equity trading services and equity research.

Revenue is recognized as we satisfy performance obligations, upon transfer of control of promised services to customers in an amount that reflects the consideration we expect to

receive in exchange for these services.

Our contracts with customers may include promises to transfer multiple services to a customer.

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

For certain advisory services,

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we have concluded that performance obligations are satisfied over time.

For certain advisory services, we have concluded that performance obligations are satisfied over time.

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

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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, to secure necessary board or shareholder approvals, to secure necessary financing, 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 may be subject to approval of the court.

With respect to retainer, announcement and success fees, there are no distinct performance obligations aside from advisory activities, which are generally focused on achieving a milestone (typically, the announcement and/or the closing of a transaction).

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We recognize placement fees in accordance with the terms of the engagement letter, which are generally contingent on the achievement of a capital commitment by an investor, at the time of the client's acceptance of capital or capital commitments.

Underwriting fees are attributable to public and private offerings of equity and debt securities and are recognized at the point in time when the offering has been deemed to be completed by the lead manager of the underwriting group.

When the offering is completed, the performance obligation has been satisfied and we recognize the applicable management fee, selling concession and underwriting fee.

When the offering is completed, the performance obligation has been satisfied and we recognize the applicable management fee, selling concession, sales agent commission or placement agent fee.

Offering expenses are presented gross in the Consolidated Statements of Operations.

We also manage assignments involving the exchange of an issuer's securities where fees are recognized when earned.

Commissions and Related Revenue include commissions received from customers for the execution of agency-based brokerage transactions in listed and over-the-counter equities.

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The delivery of research under subscription arrangements represents a distinct performance obligation that is satisfied over time.

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fixed and are recognized over the period in which the performance obligation is satisfied.

The fees are fixed and are recognized over the period in which the performance obligation is satisfied.

Cash received before the subscription period ends is initially recorded as deferred revenue (a contract liability) in Other Current Liabilities on the Consolidated Statements of Financial Condition, and is recognized in Commissions and Related Revenue on the Consolidated Statements of Operations ratably over the period in which the related services are rendered.

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Investment Management Revenue

Our Investment Management business generates revenues from the management of client assets and through interests in private equity funds which are not managed by us.

Our Investment Management segment generates revenues from the management of client assets and through interests in private equity funds which we do not manage.

Our contracts with customers may include promises to transfer multiple services to a customer.

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We maintain an allowance for credit losses to provide coverage for estimated losses from our client receivables.

We adopted ASU No.

We adopted Accounting Standards Update ("ASU") No.

2016-13 "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13") on January 1, 2020, using a modified retrospective method of transition.

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

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

Receivables that are collected in a period exceeding one year are reflected in Other Assets on the Consolidated Statements of Financial Condition.

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We record contract assets within Other Current Assets and Other Assets on the Consolidated Statements of Financial Condition when payment is due from a client conditioned on future performance or the occurrence of other events.

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EGL also invests in fixed income portfolios consisting primarily of U.S.

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

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

Equity and Other Deferred Compensation

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As part of the process of preparing our consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate.

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

Significant management judgment is required in determining our provision for income

taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.

This process requires us to estimate our actual current tax liability and to assess temporary differences resulting from differing book versus tax treatment of items, such as deferred revenue, compensation and benefits expense, unrealized gains and losses on long-term investments and depreciation.

These temporary differences result in deferred tax assets and liabilities, which are included within our Consolidated Statements of Financial Condition.

We must then assess the likelihood that deferred tax assets

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will be recovered from future taxable income, and, to the extent we believe that recovery is not more-likely-than-not, we must establish a valuation allowance.

We must then assess the likelihood that deferred tax assets will be recovered from future taxable income, and, to the extent we believe that recovery is not more-likely-than-not, we must establish a valuation allowance.

The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible.

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The Company estimates that Evercore Inc.

must generate approximately $1.3 billion of future taxable income to realize the gross deferred tax asset balance, including the valuation allowance, of approximately $325 million.

must generate approximately $1.3 billion of future taxable income to realize the gross deferred tax asset balance, including the valuation allowance, of $328 million.

The deferred tax balance is expected to reverse primarily over a period ranging from 5 to 15 taxable years.

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In determining the fair value for each reporting unit, we utilize a market multiple approach and/or a discounted cash flow methodology based on the adjusted cash flows from operations.

The market multiple approach includes applying the average earnings multiples of comparable public companies for their respective reporting segment multiplied by the forecasted earnings of the respective reporting unit to yield an estimate of fair value.

market multiple approach includes applying the average earnings multiples of comparable public companies for their respective reporting segment multiplied by the forecasted earnings of the respective reporting unit to yield an estimate of fair value.

The discounted cash flow methodology begins with the adjusted cash flows from each of the reporting units and uses a discount rate that reflects the weighted average cost of capital adjusted for the risks inherent in the future cash flows.

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We recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value.

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

In addition to goodwill and intangible assets, we annually assess our equity method investments for impairment (or more frequently if circumstances indicate impairment may have occurred) per ASC 323-10.

We concluded there was no impairment of goodwill, intangible assets or equity method investments during the year ended December 31, 2022.

We concluded there was no impairment of goodwill or intangible assets during the year ended December 31, 2021.

We recorded a loss of $8.6 million for the year ended December 31, 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 2021.

We recorded a loss of $8.6 million for the year ended December 31, 2021 , related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our investment strategy, we decided to wind-down during 2021.

See Note 10 to our consolidated financial statements for further information .

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

We recorded impairment charges of $2.9 million for the year ended December 31, 2019, related to the goodwill in our Institutional Asset Management reporting unit, which resulted in a decrease of $1.9 million to Net Income Attributable to Evercore Inc.

(after adjustments for noncontrolling interest and income taxes).

We concluded there was no impairment of intangible assets or equity method investments during the year ended December 31, 2019.

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

Variable Interest Entities

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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-K

Item 7. Management’s Discussion and Analysis