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Item 2. Management’s Discussion and Analysis

2023-05-05 compared with 2022-11-03 · 198 added, 273 removed, 331 unchanged (59% 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 its 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 its 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.

Commissions and Related Revenue includes commissions, which are recorded on a trade-date basis or, in the case of payments under commission sharing arrangements, on the date earned.

Commissions and

Related Revenue also includes subscription fees for the sales of research, as well as revenues from principal transactions primarily executed on a riskless principal basis.

Commissions and Related Revenue includes commissions, which are recorded on a trade-date basis or, in the case of payments

under commission sharing arrangements, on the date earned.

Commissions and Related Revenue also includes subscription fees for the sales of research, as well as revenues from principal transactions primarily executed on a riskless principal basis.

Cash received before the subscription period ends is initially recorded as deferred revenue (a contract liability) and recognized as revenue over the remaining subscription period.

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Investment Management.

Our Investment Management business includes operations related to the Wealth Management business 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.

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

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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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Other Revenue includes the following:

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

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

• Interest income, including accretion, and income (losses) on investment securities, including our investment funds which are used as an economic hedge against our deferred cash compensation program, certificates of deposit, cash and cash equivalents and long-term accounts receivable

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

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

• Gains (losses) resulting from foreign currency fluctuations

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

• 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.

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 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, for awards issued in 2019 and after, if an employee has at least 10 years of continuous service and is at least 60 years of age.

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.

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

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

In April 2021 and January 2022, 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 received a discretionary distribution of profits from Evercore LP, which was paid in the first quarter of 2022 and 2023, respectively.

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

In January 2022, we issued Class L Interests to certain of our named executive officers, pursuant to which the named executive officers may receive a discretionary distribution of profits from Evercore LP, to be paid in the first quarter of 2023.

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.

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 2023.

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

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

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

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

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

The vesting period for the 2017 Long-term Incentive Plan ended on March 15, 2023 and in conjunction with this plan, we made cash distributions in 2023, 2022 and 2021.

Amounts due pursuant to the 2021 Long-term Incentive Plan are due to be paid, in cash or Class A Shares, at our discretion, in the first quarter of 2025, 2026 and 2027, subject to employment at the time of payment.

We periodically assess the probability of the benchmarks being achieved and expense the probable payout over the requisite service period of the award.

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.

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 and K-P Units issued by Evercore LP.

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

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

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

In October 2022, our Board of Directors approved the issuance of Class K-P Units to an employee.

See Note 14 to our unaudited condensed 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.

Our other operating expenses include costs for occupancy and equipment rental, professional fees, travel and related expenses, communications and information technology services, depreciation and

amortization, execution, clearing and custody fees and other operating expenses.

Our other operating expenses include costs for occupancy and equipment rental, professional fees, travel and related expenses, communications and information technology services, depreciation and amortization, execution, clearing and custody fees and other operating expenses.

We refer to all of these expenses as non-compensation expenses.

Other Expenses

Other Expenses include the following:

• Special Charges, Including Business Realignment Costs – Includes expenses in 2022 related to charges associated with the prepayment of our Series B Notes during the second quarter, as well as certain professional fees related to the ongoing liquidation of our operations in Mexico.

Includes expenses in 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 the third quarter.

• 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.

Other Expenses includes Special Charges, Including Business Realignment Costs, related to the write-off of non-recoverable assets in connection with the wind-down of our operations in Mexico.

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) are included within Income from Equity Method Investments, as a component of Income Before Income Taxes, on the Unaudited Condensed Consolidated Statements of Operations.

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

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

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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 17 to our unaudited condensed consolidated financial statements for further information.

Noncontrolling Interest

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Results of Operations

The following is a discussion of our results of operations for the three and nine months ended September 30, 2022 and 2021.

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

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

2022 2021 Change 2022 2021 Change

(dollars in thousands, except per share data)

Investment Banking:

The following is a discussion of our results of operations for the three months ended March 31, 2023 and 2022.

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 Three Months Ended March 31,

2023 2022 Change

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

Investment Banking & Equities:

Advisory Fees $ 462,562 $ 624,564 (26 %)

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Asset Management and Administration Fees 15,958 17,115 (7 %)

Other Revenue, Including Interest and Investments (637) 1,511 NM (25,455) 25,142 NM

Other Revenue, Including Interest and Investments 26,846 (1,779) NM

Total Revenues 576,314 727,104 (21 %)

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$ 83,378 $ 158,016 (47 %)

Diluted Weighted Average Shares of Class A Common Stock Outstanding 40,439 41,708 (3 %)

Diluted Net Income Per Share Attributable to Evercore Inc.

Common Shareholders $ 2.06 $ 3.79 (46 %)

As of September 30, 2022 and 2021, we employed approximately 2,160 and 1,950 people, respectively, worldwide.

Three Months Ended September 30, 2022 versus September 30, 2021

As of March 31, 2023 and 2022, we employed approximately 2,135 and 2,000 people, respectively.

Three Months Ended March 31, 2023 versus March 31, 2022

Net Income Attributable to Evercore Inc.

was $82.4 million for the three months ended September 30, 2022, a decrease of $77.1 million, or 48%, compared to $159.5 million for the three months ended September 30, 2021.

was $83.4 million for the three months ended March 31, 2023, a decrease of $74.6 million, or 47%, compared to $158.0 million for the three months ended March 31, 2022.

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

Net Revenues were $576.9 million for the three months ended September 30, 2022, a decrease of $246.6 million, or 30%, versus Net Revenues of $823.6 million for the three months ended September 30, 2021.

Advisory Fees decreased $220.1 million, or 31%, Underwriting Fees decreased $25.7 million, or 47%, and Commissions and Related Revenue increased $2.4 million, or 5%, compared to the three months ended September 30, 2021.

Asset Management and Administration Fees decreased $1.3 million, or 8%, compared to the three months ended September 30, 2021.

Net Revenues were $572.1 million for the three months ended March 31, 2023, a decrease of $150.7 million, or 21%, versus Net Revenues of $722.9 million for the three months ended March 31, 2022.

Advisory Fees decreased $162.0 million, or 26%, Underwriting Fees decreased $13.4 million, or 37%, and Commissions and Related Revenue decreased $2.8 million, or 6%, compared to the three months ended March 31, 2022.

Asset Management and Administration Fees decreased $1.2 million, or 7%, compared to the three months ended March 31, 2022.

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

Ot her Revenue, Including Interest and Investments, decreased $2.1 million compared to the three months ended September 30, 2021, primarily reflecting lower performance of our investment funds portfolio due to the overall market decline.

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

Total Operating Expenses were $446.5 million for the three months ended September 30, 2022, compared to $569.8 million for the three months ended September 30, 2021, a decrease of $123.3 million, or 22%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $355.8 million for the three months ended September 30, 2022, a decrease of $130.7 million, or 27%, versus expense of $486.5 million for the three months ended September 30, 2021.

The decrease in the amount of compensation recognized for the three months ended September 30, 2022 principally reflects a lower accrual for incentive compensation tied to lower revenue, 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 $90.7 million for the three months ended September 30, 2022, an increase of $7.4 million, or 9%, versus $83.3 million for the three months ended September 30, 2021.

The increase was primarily driven by an increase in travel and related expenses, as travel began to resume during the fourth quarter of 2021, as well as higher professional fees.

Non-Compensation expenses per employee were approximately $42.3 thousand for the three months ended September 30, 2022, versus $43.3 thousand for the three months ended September 30, 2021.

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

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 61.7% for the three months ended September 30, 2022, compared to 59.1% for the three months ended September 30, 2021.

Income from Equity Method Investments was $2.0 million for the three months ended September 30, 2022, compared to $3.7 million for the three months ended September 30, 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 during the first quarter of 2022.

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

The provision for income taxes for the three months ended September 30, 2022 was $40.8 million, which reflected an effective tax rate of 30.8%.

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

The increase in the effective tax rate principally reflects higher state and local taxes and an increase in U.S.

federal taxes related to the decrease in Noncontrolling Interest in Evercore LP.

Net Income Attributable to Noncontrolling Interest was $9.2 million for the three months ended September 30, 2022 compared to $29.6 million for the three months ended September 30, 2021.

The decrease in Net Income Attributable to Noncontrolling Interest primarily reflects lower income at Evercore LP for the three months ended September 30, 2022, as well as the decrease in noncontrolling ownership interest during the first quarter of 2022.

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

Nine Months Ended September 30, 2022 versus September 30, 2021

Net Income Attributable to Evercore Inc.

was $336.1 million for the nine months ended September 30, 2022, a decrease of $108.2 million, or 24%, compared to $444.3 million for the nine months ended September 30, 2021.

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

Net Revenues were $1.93 billion for the nine months ended September 30, 2022, a decrease of $243.0 million, or 11%, versus Net Revenues of $2.17 billion for the nine months ended September 30, 2021.

Underwriting Fees decreased $103.2 million, or 57%, Advisory Fees decreased $92.0 million, or 5%, and Commissions and Related Revenue increased $1.6 million, or 1%, compared to the nine months ended September 30, 2021.

Asset Management and Administration Fees increased $0.6 million, or 1%, compared to the nine months ended September 30, 2021.

See "Business Segments" below for further information.

Ot her Revenue, Including Interest and Investments, decreased $50.6 million compared to the nine months ended September 30, 2021, primarily reflecting a shift from gains of $15.8 million to losses of $39.0 million 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 the second quarter of 2021.

This was partially offset by a $1.3 million gain on the sale of a portion of our

interests in ABS during the first quarter of 2022.

Ot her Revenue, Including Interest and Investments, increased $28.6 million compared to the three months ended March 31, 2022, primarily reflecting a shift from losses of $5.2 million in the first quarter of 2022 to gains of $9.4 million in the first quarter of 2023 on our investment funds portfolio due to overall market appreciation, as well as higher returns on our fixed income investment portfolios, which primarily consist of U.S.

treasury bills.

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

The increase from 2022 was partially offset by a $1.3 million gain on the sale of a portion of our interests in ABS that occurred during the first quarter of 2022.

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

Total Operating Expenses were $1.44 billion for the nine months ended September 30, 2022, compared to $1.52 billion for the nine months ended September 30, 2021, a decrease of $74.6 million, or 5%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $1.17 billion for the nine months ended September 30, 2022, a decrease of $115.2 million, or 9%, versus expense of $1.29 billion for the nine months ended September 30, 2021.

The decrease in the amount of compensation recognized for the nine months ended September 30, 2022 principally reflects a lower accrual for incentive compensation tied to lower revenue, 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 $269.7 million for the nine months ended September 30, 2022, an increase of $40.6 million, or 18%, versus $229.1 million for the nine months ended September 30, 2021.

The increase was primarily driven by an increase in travel and related expenses, as travel began to resume during the fourth quarter of 2021, as well as higher professional fees.

Non-Compensation expenses per employee were approximately $130.8 thousand for the nine months ended September 30, 2022, versus $122.8 thousand for the nine months ended September 30, 2021.

Total Other Expenses of $0.5 million for the nine months ended September 30, 2022 included Special Charges, Including Business Realignment Costs, related to charges associated with the prepayment of our Series B Notes during the second quarter, as well as certain professional fees related to the ongoing liquidation of our operations in Mexico.

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

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 60.8% for the nine months ended September 30, 2022, compared to 59.3% for the nine months ended September 30, 2021.

Income from Equity Method Investments was $6.8 million for the nine months ended September 30, 2022, compared to $10.1 million for the nine months ended September 30, 2021.

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

Total Operating Expenses were $462.3 million for the three months ended March 31, 2023, compared to $513.5 million for the three months ended March 31, 2022, a decrease of $51.2 million, or 10%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $366.9 million for the three months ended March 31, 2023, a decrease of $62.8 million, or 15%, versus expense of $429.7 million for the three months ended March 31, 2022.

The decrease in the amount of compensation recognized for the three months ended March 31, 2023 principally reflects a lower accrual 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 $95.4 million for the three months ended March 31, 2023, an increase of $11.6 million, or 14%, versus $83.8 million for the three months ended March 31, 2022.

The increase was primarily driven by an increase in travel and related expenses and an increase in bad debt expense.

Non-Compensation expenses per employee were approximately $44.9 thousand for the three months ended March 31, 2023, versus $42.4 thousand for the three months ended March 31, 2022.

Total Other Expenses of $2.9 million for the three months ended March 31, 2023 reflected Special Charges, Including Business Realignment Costs, related to the write-off of non-recoverable assets in connection with the wind-down of our operations in Mexico.

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 64.1% for the three months ended March 31, 2023, compared to 59.4% for the three months ended March 31, 2022.

Income from Equity Method Investments was $1.5 million for the three months ended March 31, 2023, compared to $2.5 million for the three months ended March 31, 2022, reflecting lower contributions from all of our equity method investments in the first quarter of 2023.

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

The provision for income taxes for the nine months ended September 30, 2022 was $114.1 million, which reflected an effective tax rate of 23.2%.

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

The increase in the effective tax rate principally reflects higher state and local taxes and an increase in U.S.

federal taxes related to the decrease in Noncontrolling Interest in Evercore LP.

The increase was partially offset by a higher net tax benefit associated with the appreciation in our share price upon vesting of employee share-based awards above the original grant price for the nine months ended September 30, 2022.

Net Income Attributable to Noncontrolling Interest was $42.5 million for the nine months ended September 30, 2022 compared to $74.3 million for the nine months ended September 30, 2021.

The decrease in Net Income Attributable to Noncontrolling Interest reflects lower income at Evercore LP for the nine months ended September 30, 2022, as well as the decrease in noncontrolling ownership interest during the first quarter of 2022.

The provision for income taxes for the three months ended March 31, 2023 was $16.1 million, which reflected an effective tax rate of 14.9%.

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

The provision for income taxes for the three months ended March 31, 2023 and 2022 reflects the net impact associated with the appreciation in our share price upon vesting of employee share-based awards above the original grant price of $13.7 million and $19.0 million, respectively.

Net Income Attributable to Noncontrolling Interest was $8.9 million for the three months ended March 31, 2023, compared to $19.1 million for the three months ended March 31, 2022.

The decrease in Net Income Attributable to Noncontrolling Interest primarily reflects lower income at Evercore LP during the three months ended March 31, 2023.

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

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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.

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

2022 2021 Change 2022 2021 Change

Investment Banking & Equities

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

For the Three Months Ended March 31,

2023 2022 Change

(dollars in thousands)

Investment Banking:

Investment Banking & Equities:

Advisory Fees $ 462,562 $ 624,564 (26 %)

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Operating Expenses 449,080 500,572 (10 %)

Other Expenses — — NM 532 7 NM

Other Expenses 2,921 — NM

Total Expenses 452,001 500,572 (10 %)

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Pre-Tax Income $ 102,881 $ 204,103 (50 %)

(1) Includes interest expense on Notes Payable and lines of credit of $4.2 million and $12.7 million for the three and nine months ended September 30, 2022, respectively, and $4.4 million and $13.3 million for the three and nine months ended September 30, 2021, respectively.

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

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

For the three months ended September 30, 2022 , the dollar value of North American announced and completed M&A activity decreased 60% and 57%, respectively, compared to the three months ended September 30, 2021 , and the dollar value of Global announced and completed M&A activity decreased 54% and 47%, respectively, compared to the three months ended September 30, 2021 .

For the nine months ended September 30, 2022 , the dollar value of North American announced and completed M&A activity decreased 38% and 23%, respectively, compared to the nine months ended September 30, 2021, and the dollar value of Global announced and completed M&A activity decreased 32% and 13%, respectively, compared to the nine months ended September 30, 2021 .

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

2022 2021 Change 2022 2021 Change

(1) Includes interest expense on Notes Payable and lines of credit of $4.2 million and $4.3 million for the three months ended March 31, 2023 and 2022, respectively.

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

For the three months ended March 31, 2023, the dollar value of North American announced and completed M&A activity decreased 45% and 39%, respectively, compared to the three months ended March 31, 2022, and the dollar value of Global announced and completed M&A activity decreased 43% and 49%, respectively, compared to the three months ended March 31, 2022.

For the three months ended March 31, 2023, the dollar value of North American and Global completed M&A activity over $100 million decreased 40% and 50%, respectively, compared to the three months ended March 31, 2022.

For the Three Months Ended March 31,

2023 2022 Change

Industry Statistics ($ in billions) (1)

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Value of North American M&A Deals Completed $ 291 $ 480 (39 %)

Value of North American M&A Deals Completed Over $100 million $ 273 $ 455 (40 %)

Value of Global M&A Deals Announced $ 583 $ 1,023 (43 %)

Value of Global M&A Deals Completed $ 601 $ 1,179 (49 %)

Value of Global M&A Deals Completed Over $100 million $ 548 $ 1,098 (50 %)

Evercore Statistics

Total Number of Fees From Advisory Client Transactions 229 257 (11 %) 494 586 (16 %)

Total Number of Fees of at Least $1 million from Advisory Client Transactions 99 130 (24 %) 285 349 (18 %)

Total Number of Fees From Advisory and Underwriting Client Transactions 217 223 (3 %)

Total Number of Fees of at Least $1 million from Advisory and Underwriting Client Transactions 78 86 (9 %)

Total Number of Underwriting Transactions (2)

Total Number of Underwriting Transactions as a Bookrunner (2)

Refinitiv October 7, 2022

** Includes revenue generating clients

Investment Banking Results of Operations

Three Months Ended September 30, 2022 versus September 30, 2021

Investment Banking Net Revenues were $560.5 million for the three months ended September 30, 2022, compared to $806.9 million for the three months ended September 30, 2021, a decrease of $246.4 million, or 31%.

The decrease in revenues for the three months ended September 30, 2022 was primarily driven by a decrease of $220.1 million, or 31%, in Advisory Fees, reflecting a decrease in the number of Advisory fees earned and a decline in revenue earned from large transactions during the third quarter of 2022.

Underwriting Fees decreased $25.7 million, or 47%, compared to the three months ended September 30, 2021, principally reflecting a decrease in the number of transactions we participated in due to the decline in overall market issuances.

Commis sions and Related Revenue increased $2.4 million, or 5%, compared to the three months ended September 30, 2021, primarily reflecting higher trading volumes and increased revenues from research subscriptions.

Other Revenue, net, decreased $3.0 million, or 119%, compared to the three months ended September 30, 2021, primarily reflecting lower performance of our investment funds portfolio due to the overall market decline.

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

Operating Expenses were $433.6 million for the three months ended September 30, 2022, compared to $556.3 million for the three months ended September 30, 2021, a decrease of $122.7 million, or 22% .

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $346.3 million for the three months ended September 30, 2022, compared to $476.2 million for the three months ended September 30, 2021, a decrease of $129.9 million , or 27%.

Non-compensation expenses, as a component of Operating Expenses, were $87.3 million for the three months ended September 30, 2022 , compared to $80.1 million for the three months ended September 30, 2021 , an increase of $7.2 million , or 9%.

Non-compensation operating expenses increased from the prior year, primarily driven by an increase in travel and related expenses, as travel began to resume during the fourth quarter of 2021, as well as higher professional fees.

Nine Months Ended September 30, 2022 versus September 30, 2021

Investment Banking Net Revenues were $1.88 billion for the nine months ended September 30, 2022, compared to $2.13 billion for the nine months ended September 30, 2021, a decrease of $245.0 million, or 12%.

The decrease in revenues for the nine months ended September 30, 2022 was primarily driven by a decrease of $103.2 million, or 57%, in Underwriting Fees, principally reflecting a decrease in the number of transactions we participated in due to the decline in overall market issuances.

Advisory Fees decreased $92.0 million, or 5%, compared to the nine months ended September 30, 2021, reflecting a decrease in the number of Advisory fees earned.

Commissions and Related Revenue increased $1.6 million, or 1%, compared to the nine months ended September 30, 2021, primarily reflecting increased revenues from research subscriptions.

Other Revenue, net, decreased $51.3 million compared to the nine months ended September 30, 2021, primarily reflecting a shift from gains of $15.8 million to losses of $39.0 million 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 the second quarter of 2021.

Operating Expenses were $1.40 billion for the nine months ended September 30, 2022, compared to $1.48 billion for the nine months ended September 30, 2021, a decrease of $76.3 million, or 5%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $1.15 billion for the nine months ended September 30, 2022, compared to $1.26 billion for the nine months ended September 30, 2021, a decrease of $116.1 million , or 9% .

Non-compensation expenses, as a component of Operating Expenses, were $259.7 million for the nine months ended September 30, 2022 , compared to $219.9 million for the nine months ended September 30, 2021 , an increase of $39.8 million , or 18% .

Other Expenses of $0.5 million for the nine months ended September 30, 2022 included Special Charges, Including Business Realignment Costs, related to charges associated with the prepayment of our Series B Notes during the second quarter, as well as certain professional fees related to the ongoing liquidation of our operations in Mexico.

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

Refinitiv April 10, 2023

(2) Includes Equity and Debt Underwriting Transactions.

Investment Banking & Equities Results of Operations

Three Months Ended March 31, 2023 versus March 31, 2022

Net Revenues were $554.8 million for the three months ended March 31, 2023 , compared to $704.3 million for the three months ended March 31, 2022 , a decrease of $149.5 million, or 21%.

The decrease in revenues for the three months ended March 31, 2023 was primarily driven by a decrease of $162.0 million, or 26%, in Advisory Fees, reflecting a decline in revenue earned from large transactions during the first quarter of 2023, as well as a decrease in the number of Advisory fees earned.

Underwriting Fees decreased $13.4 million, or 37%, compared to the three months ended March 31, 2022, reflecting a decrease in average fee size of the transactions we participated in due to the decline in overall market issuances.

Commissions and Related Revenue decreased $2.8 million, or 6%, compared to the three months ended March 31, 2022 , primarily reflecting lower trading revenues.

Other Revenue, net, increased $28.8 million compared to the three months ended March 31, 2022 , primarily reflecting a shift from losses of $5.2 million in the first quarter of 2022 to gains of $9.4 million in the first quarter of 2023 on our investment funds portfolio due to overall market appreciation, as well as higher returns on our fixed income investment portfolios, which primarily consist of U.S.

treasury bills.

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

Operating Expenses were $449.1 million for the three months ended March 31, 2023 , compared to $500.6 million for the three months ended March 31, 2022 , a decrease of $51.5 million, or 10%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $357.1 million for the three months ended March 31, 2023 , compared to $419.9 million for the three months ended March 31, 2022 , a decrease of $62.8 million , or 15% .

Non-compensation expenses, as a component of Operating Expenses, were $92.0 million for the three months ended March 31, 2023, compared to $80.7 million for the three months ended March 31, 2022, an increase of $11.3 million , or 14% .

Non-compensation operating expenses increased from the prior year period, primarily driven by an increase in travel and related expenses and an increase in bad debt expense.

Other Expenses of $2.9 million for the three months ended March 31, 2023 reflected Special Charges, Including Business Realignment Costs, related to the write-off of non-recoverable assets in connection with the wind-down of our operations in Mexico .

Investment Management

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

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

2022 2021 Change 2022 2021 Change

For the Three Months Ended March 31,

2023 2022 Change

(dollars in thousands)

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Other Revenue, net (1)

778 (323) NM 1,915 615 211 %

1,374 1,438 (4 %)

Net Revenues 17,332 18,553 (7 %)

Operating Expenses 13,238 12,918 2 %

Other Expenses — 8,554 NM — 8,554 NM

Total Expenses 13,238 12,918 2 %

Operating Income (Loss) 3,480 (5,488) NM 11,119 2,321 379 %

Operating Income 4,094 5,635 (27 %)

Income from Equity Method Investments (2)

1,397 2,138 (35 %)

Pre-Tax Income (Loss) $ 5,056 $ (2,371) NM $ 16,943 $ 11,138 52 %

(1) Includes a gain of $1.3 million for the nine months ended September 30, 2022, resulting from the sale of a portion of our interests in ABS.

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

Pre-Tax Income $ 5,491 $ 7,773 (29 %)

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

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

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• Private Equity – conducted through our investment interests in private equity funds.

We maintain a limited partner's interest in Glisco II, Glisco III and Glisco IV, as well as Glisco Manager Holdings LP and the general partners of the Glisco Funds.

We maintain a limited partner's interest in Glisco II, Glisco III and Glisco IV (together the "Glisco Funds"), as well as Glisco Manager Holdings LP and the general partners of the Glisco Funds.

We receive our portion of the management fees earned by Glisco Partners Inc.

("Glisco") from Glisco

Manager Holdings LP.

("Glisco") from Glisco Manager Holdings LP.

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

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

As of September 30, 2022, $0.7 million of previously distributed carried interest received from the funds was subject to repayment.

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

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

As of March 31, 2023, $0.4 million of previously distributed carried interest received from the funds was subject to repayment.

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

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Assets Under Management

AUM for our Wealth Management business of $10.0 billion at September 30, 2022 decreased $2.2 billion, or 18%, compared to $12.2 billion at December 31, 2021.

AUM in our Wealth Management business of $11.0 billion at March 31, 2023 increased $0.5 billion, or 5% , compared to $10.5 billion at December 31, 2022.

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

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

Wealth Management maintained 72% and 75% of Level 1 investments, 23% and 21% of Level 2 investments and 5% and 4% of Level 3 investments as of September 30, 2022 and December 31, 2021, respectively.

Wealth Management maintained 75% and 74% of Level 1 investments, 20% and 21% of Level 2 investments and 5% and 5% of Level 3 investments as of March 31, 2023 and December 31, 2022, respectively.

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

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

The following table summarizes AUM activity for the nine months ended September 30, 2022:

Management (1)

The following table summarizes AUM activity for Wealth Management for the three months ended March 31, 2023:

(dollars in millions)

Balance at December 31, 2022 $ 10,537

Inflows 1,075

Outflows (258)

Market Appreciation (Depreciation) (2,185)

Balance at September 30, 2022 $ 9,986

Unconsolidated Affiliates - Balance at September 30, 2022:

Market Appreciation 525

Balance at March 31, 2023 $ 11,017

Unconsolidated Affiliates - Balance at March 31, 2023:

Atalanta Sosnoff $ 6,815

(1) Assets Under Management includes Evercore assets which are managed by Evercore Wealth Management of $0.3 million and $76.3 million as of September 30, 2022 and December 31, 2021, respectively.

The following table represents the composition of AUM for Wealth Management as of September 30, 2022:

Wealth Management

The following table represents the composition of AUM for Wealth Management as of March 31, 2023:

Equities 62 %

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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.

For the nine months ended September 30, 2022, AUM for Wealth Management decreased 18%, primarily reflecting a decrease due to market depreciation.

Performance for the nine months ended September 30, 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 and 3-year basis by approximately 90 basis points and 10 basis points, respectively

• The S&P 500 and fixed income composite were each down approximately 24% and 9%, respectively

AUM from our unconsolidated affiliates decreased 19% compared to December 31, 2021, reflecting declines in both Atalanta Sosnoff and ABS.

Three Months Ended September 30, 2022 versus September 30, 2021

Investment Management Net Revenues were $16.4 million for the three months ended September 30, 2022, compared to $16.6 million for the three months ended September 30, 2021, a decrease of $0.2 million, or 1%.

Asset Management and Administration Fees earned from the management of Wealth Management client portfolios decreased $1.3 million, or 8%, for the three months ended September 30, 2022 as associated AUM decreased 12%, primarily from market depreciation.

Other Revenue, net, increased $1.1 million from the three months ended September 30, 2021.

Income from Equity Method Investments decreased 49% from the three months ended September 30, 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 the first quarter of 2022.

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

Operating Expenses were $12.9 million for the three months ended September 30, 2022, compared to $13.6 million for the three months ended September 30, 2021, a decrease of $0.6 million, or 5%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $9.5 million for the three months ended September 30, 2022, compared to $10.3 million for the three months ended September 30, 2021, a decrease of $0.8 million, or 8%.

Non-Compensation expenses, as a component of Operating Expenses, were $3.4 million for the three months ended September 30, 2022, compared to $3.3 million for the three months ended September 30, 2021, an increase of $0.1 million, or 3%.

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

Nine Months Ended September 30, 2022 versus September 30, 2021

Investment Management Net Revenues were $50.6 million for the nine months ended September 30, 2022, compared to $48.7 million for the nine months ended September 30, 2021, an increase of $1.9 million, or 4%.

Asset Management and Administration Fees earned from the management of Wealth Management client portfolios increased $0.6 million, or 1%, for the nine months ended September 30, 2022.

Other Revenue, net, increased $1.3 million, or 211%, from the nine months ended September 30, 2021.

Income from Equity Method Investments decreased 34% from the nine months ended September 30,

2021, driven by lower income earned by ABS, principally reflecting a decrease in our ownership following the sale of a portion of our interests during the first quarter of 2022.

For the three months ended March 31, 2023, AUM for Wealth Management increased 5% , primarily reflecting an increase due to market appreciation.

Performance for the three months ended March 31, 2023 reflected:

• Wealth Management outperformed the S&P 500 on a 1 and 3-year basis by approximately 10 basis points and 40 basis points, respectively

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

• The S&P 500 and fixed income composite were each up approximately 8% and 2%, respectively

AUM from our unconsolidated affiliates increased 2% compared to December 31, 2022, reflecting increases in both Atalanta Sosnoff and ABS.

Three Months Ended March 31, 2023 versus March 31, 2022

Net Revenues were $17.3 million for the three months ended March 31, 2023, compared to $18.6 million for the three months ended March 31, 2022, a decrease of $1.2 million, or 7%.

Asset Management and Administration Fees earned from the management of Wealth Management client portfolios decreased $1.2 million, or 7%, for the three months ended March 31, 2023 as associated AUM decreased 5%, primarily from market depreciation.

Operating Expenses were $13.2 million for the three months ended March 31, 2023, compared to $12.9 million for the three months ended March 31, 2022, an increase of $0.3 million, or 2%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $9.8 million for the three months ended March 31, 2023, flat compared to the three months ended March 31, 2022.

Non-Compensation expenses, as a component of Operating Expenses, were $3.4 million for the three months ended March 31, 2023, compared to $3.1 million for the three months ended March 31, 2022, an increase of $0.3 million, or 10%.

Income from Equity Method Investments decreased 35% from the three months ended March 31, 2022, primarily driven by lower income earned by Atalanta Sosnoff in the first quarter of 2023.

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

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

Operating Expenses were $39.5 million for the nine months ended September 30, 2022, compared to $37.8 million for the nine months ended September 30, 2021, an increase of $1.7 million, or 4%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $29.5 million for the nine months ended September 30, 2022, compared to $28.6 million for the nine months ended September 30, 2021, an increase of $0.9 million, or 3%.

Non-Compensation expenses, as a component of Operating Expenses, were $10.0 million for the nine months ended September 30, 2022, compared to $9.2 million for the nine months ended September 30, 2021, an increase of $0.8 million, or 9%.

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

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

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 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.

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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 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:

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

(dollars in thousands)

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End of Period $ 588,125 $ 463,894

Nine Months Ended September 30, 2022.

Cash, Cash Equivalents and Restricted Cash were $482.2 million at September 30, 2022, a decrease of $105.1 million versus Cash, Cash Equivalents and Restricted Cash of $587.3 million at December 31, 2021.

Operating activities resulted in a net inflow of $157.2 million, primarily related to earnings, partially offset by the

payment of 2021 bonus awards and deferred cash compensation.

Cash of $418.5 million was provided by investing activities, primarily related to net proceeds from sales and maturities of investment securities and proceeds received for the sale of a portion of our interests in ABS, partially offset by net purchases of certificates of deposit and purchases of equipment and leasehold improvements.

Financing activities during the period used cash of $631.5 million, primarily for purchases of treasury stock 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.

Three Months Ended March 31, 2023.

Cash, Cash Equivalents and Restricted Cash were $588.1 million at March 31, 2023, a decrease of $84.0 million versus Cash, Cash Equivalents and Restricted Cash of $672.1 million at December 31, 2022.

Operating activities resulted in a net outflow of $384.7 million, primarily related to the payment of 2022 bonus awards and deferred cash compensation, which contributed to a decrease to Accrued Compensation and Benefits on our Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2023, partially offset by earnings.

Cash of $631.3 million was provided by investing activities, primarily related to net proceeds from sales and maturities of investment securities and certificates of deposit.

Financing activities during the period used cash of $337.0 million, primarily for purchases of treasury stock (including for net settlement of RSUs) and noncontrolling interests, and dividends and distributions to noncontrolling interest holders.

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

currencies to U.S.

Nine Months Ended September 30, 2021.

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

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

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

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

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

Three Months Ended March 31, 2022.

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

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

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

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

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

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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.

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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 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, 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.

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 increasing risk of a recession.

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, evolving regulatory and banking environments 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.

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

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.

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

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

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

During the nine months ended September 30, 2022, we repurchased 2,907,630 Class A Shares, at an average cost per share of $115.18, for $334.9 million, pursuant to our repurchase program.

During the three months ended March 31, 2023, we repurchased 1,237,384 Class A Shares, at an average cost per share of $132.50, for $164.0 million, pursuant to our repurchase program.

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

During the nine months ended September 30, 2022, we repurchased 988,136 Class A Shares, at an average cost per share of $127.41, for $125.9 million, primarily related to minimum tax withholding requirements of share deliveries.

The aggregate 3,895,766 Class A Shares repurchased during the nine months ended September 30, 2022 were acquired for aggregate purchase consideration of $460.8 million, at an average cost per share of $118.28.

During the three months ended March 31, 2023, we repurchased 915,197 Class A Shares, at an average cost per share of $131.79, for $120.6 million, primarily related to minimum tax withholding requirements of share deliveries.

The aggregate 2,152,581 Class A Shares repurchased during the three months ended March 31, 2023 were acquired for aggregate purchase consideration of $284.6 million, at an average cost per share of $132.20.

Noncontrolling Interest Purchases

During the third quarter of 2022, we purchased, at fair value, an additional 0.5% of the EWM Class A Units for $1.7 million, which was settled in cash during the three months ended September 30, 2022.

This purchase resulted in a decrease to Noncontrolling Interest of $0.1 million and a decrease to Additional-Paid-In-Capital of $1.6 million on our Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2022.

During the first quarter of 2022, we purchased, at fair value, an additional 0.4% of the EWM Class A Units for $1.4 million, which was settled in cash during the nine months ended September 30, 2022.

This purchase resulted in a decrease to Noncontrolling Interest of $0.1 million and a decrease to Additional-Paid-In-Capital of $1.4 million on our Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2022.

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

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

from employees of the RECA business for $54.3 million.

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

We settled $1.1 million of the contingent consideration at fair value, which is included within Other Current Liabilities on our Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2022 and is expected to be paid during the fourth quarter of 2022.

The fair value of the remaining contingent consideration is $7.4 million and $20.6 million as of September 30, 2022 and December 31, 2021, respectively, and is included within Other Long-term Liabilities on our Unaudited Condensed Consolidated Statement of Financial Condition.

For the three and nine months ended September 30, 2022, we recognized a reversal of expense of $8.8 million and $12.1 million, respectively, within Other Operating Expenses on the Unaudited Condensed Consolidated Statements of Operations, related to the change in fair value of the contingent consideration.

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

We paid $0.7 million of this contingent cash consideration during the three months ended March 31, 2023.

The fair value of the remaining contingent consideration is $5.1 million as of March 31, 2023, which is included within Payable to Employees and Related Parties on our Unaudited Condensed Consolidated Statements of Financial Condition, and $6.1 million as of December 31, 2022, $1.1 million of which was included within Other Current Liabilities and the remainder of which was included within Other Long-term Liabilities on our Unaudited Condensed Consolidated Statements of Financial Condition.

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

Changes in the fair value of contingent consideration are included within Other Operating Expenses on the Unaudited Condensed Consolidated Statements 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.

In conjunction with this transaction, we also issued a payment in the first quarter of 2023 and will issue another payment in early 2024, contingent on continued employment.

Accordingly, these payments are 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.

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The 2016 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio, a minimum tangible net worth and a minimum interest coverage ratio, and customary events of default.

As of September 30, 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.

As of March 31, 2023, we were in compliance with all of these covenants.

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 nine months ended September 30, 2022, included within Special Charges, Including Business Realignment Costs, on our Unaudited Condensed Consolidated Statements of Operations.

2019 Private Placement Notes

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

As of September 30, 2022, we were in compliance with all of these covenants.

As of March 31, 2023, we were in compliance with all of these covenants.

2021 Private Placement Notes

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

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

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

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The 2021 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio and a minimum tangible net worth, and customary events of default.

As of September 30, 2022, we were in compliance with all of these covenants.

As of March 31, 2023, we were in compliance with all of these covenants.

2022 Private Placement Notes

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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 September 30, 2022, we were in compliance with all of these covenants.

As of March 31, 2023, we were in compliance with all of these covenants.

Lines of Credit

On June 24, 2016, East entered into a loan agreement with 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.

East entered into a loan agreement with PNC for a revolving credit facility in an aggregate principal amount, as amended on October 29, 2021, 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.

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

We and our consolidated subsidiaries were in compliance with these covenants as of September 30, 2022.

East amended this facility on October 29, 2021 such that, among

other things, the interest rate provisions were LIBOR (or an applicable benchmark replacement) plus 150 basis points and the maturity date was extended to October 28, 2023.

There were no drawings under this facility at September 30, 2022.

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

In addition, the agreement contains certain reporting covenants, as well as certain debt covenants that

prohibit East and us from incurring other indebtedness, subject to specified exceptions.

We and our consolidated subsidiaries were in compliance with these covenants as of March 31, 2023.

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 March 31, 2023.

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.

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

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

We and our consolidated subsidiaries were in compliance with these covenants as of March 31, 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 September 30, 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.

There were no drawings under this facility at March 31, 2023.

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.

There were no drawings under this facility at September 30, 2022.

EGL amended this facility on October 31, 2022 such that, among other things, the interest rate provisions were Daily SOFR plus 191 basis points and the maturity date was extended to October 27, 2024.

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 March 31, 2023.

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

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from employees of the RECA business in 2021.

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

We had total commitments (not reflected on our Unaudited Condensed Consolidated Statements of Financial Condition) relating to future capital contributions to private equity funds of $2.7 million and $6.1 million as of September 30, 2022 and December 31, 2021 , respectively.

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

We had total commitments (not reflected on our Unaudited Condensed Consolidated Statements of Financial Condition) relating to future capital contributions to private equity funds of $2.6 million and $2.4 million as of March 31, 2023 and December 31, 2022, respectively.

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

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

Our Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2022 included $473.1 million of Cash and Cash Equivalents and $1.3 billion of Investment Securities and Certificates of Deposit, which are generally

comprised of highly-liquid investments.

As of March 31, 2023, 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 0.3 million vested Class K LP Units.

In addition, 0.7 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

March 31, 2023.

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.

Our Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2023 included $579.2 million of Cash and Cash Equivalents and $803.1 million 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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We hold equity securities and invest in exchange-traded funds principally as an economic hedge against our deferred compensation program.

As of September 30, 2022, the fair value of our investments with these products, based on closing prices, was $127.3 million.

We estimate that a hypothetical 10%, 20% and 30% adverse change in the market value of the investments would have resulted in a decrease in pre-tax income of approximately $12.7 million, $25.5 million and $38.2 million, respectively, for the three months ended September 30, 2022.

As of March 31, 2023, the fair value of our investments with these products, based on closing prices, was $143.1 million.

We had net realized and unrealized gains of $9.4 million for the three months ended March 31, 2023, from our exchange-traded funds portfolio.

See Note 6 to our unaudited condensed 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 $14.3 million, $28.6 million and $42.9 million, respectively, for the three months ended March 31, 2023.

Private Equity Funds

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

We estimate that a hypothetical 10% adverse change in the value of the private equity funds would have resulted in a decrease in pre-tax income of approximately $1.2 million for the three months ended September 30, 2022.

See Note 7 to our unaudited condensed 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 three months ended March 31, 2023.

Exchange Rate Risk

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

For the nine months ended September 30, 2022, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income (Loss) within the Unaudited Condensed Consolidated Statement of Comprehensive Income was ($44.1) million.

For the three months ended March 31, 2023, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income (Loss) within the Unaudited Condensed Consolidated Statement of Comprehensive Income was a gain of $5.7 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.

Periodically, we enter into foreign currency exchange forward contracts as an economic hedge against exchange rate risk for foreign currency denominated accounts receivable or other commitments.

We entered into a foreign currency exchange forward contract during the first quarter of 2023 to buy 30.0 million British Pounds sterling for $36.9 million, which will settle during the third quarter of 2023.

The contract is recorded at its fair value of $0.2 million as of March 31, 2023, and is included within Other Current Assets on our Unaudited Condensed Consolidated Statement of Financial Condition.

We maintain cash and cash equivalents, as well as certificates of deposit, with financial institutions with high credit ratings.

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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 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.

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 recorded bad debt expense of approximately $4.9 million and $0.02 million for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022 and December 31, 2021, total receivables recorded in Accounts Receivable amounted to $303.7 million and $351.7 million, respectively, net of an allowance for credit losses, and total receivables recorded in Other Assets amounted to $57.0 million and $87.8 million, respectively.

We recorded bad debt expense of approximately $3.7 million for the three months ended March 31, 2023 and reversed bad debt expense of approximately $0.5 million for the three months ended March 31, 2022.

As of March 31, 2023 and December 31, 2022, total receivables recorded in Accounts Receivable amounted to $299.2 million and $385.1 million, respectively, net of an allowance for credit losses, and total receivables recorded in Other Assets amounted to $70.2 million and $64.1 million, respectively.

Other Current Assets and Other Assets include arrangements in which an estimate of variable consideration has been included in the transaction price and thereby recognized as revenue that precedes the contractual due date (contract assets).

As of September 30, 2022, total contract assets recorded in Other Current Assets and Other Assets amounted to $30.1 million and $4.0 million, respectively.

As of March 31, 2023, total contract assets recorded in Other Current Assets and Other Assets amounted to $14.0 million and $11.9 million, respectively.

As of December 31, 2022, total contract assets recorded in Other Current Assets and Other Assets amounted to $110.5 million and $8.0 million, respectively.

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

As of September 30, 2022, we had Investment Securities of $1.2 billion, of which 89% 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 March 31, 2023, we had Investment Securities of $756.2 million, of which 81% were treasury bills and notes.

Critical Accounting Policies and Estimates

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

Quantitative and Qualitative Disclosures About Market Risk

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis