Evercore Inc. 10-K

Item 8. Financial Statements and Supplemental Data Index to Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID No . 34 ) 55 Consolidated Statements of Financial Condition 57 Consolidated Statements of Operations 58 Consolidated Statements of Comprehensive Income 59 Consolidated Statements of Changes in Equity 60 Consolidated Statements of Cash Flows 61 Notes to Consolidated Financial Statements 62 Supplemental Financial Information 107 54 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Evercore Inc. New York, New York Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of financial condition of Evercore Inc. and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 22, 2024, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Investment Banking Advisory Fee Revenue - Success Fees - Refer to Notes 2 and 4 to the consolidated financial statements Critical Audit Matter Description The Company recognizes investment banking advisory fee revenue that includes success fees for investment banking advisory services as performance obligations are satisfied and these advisory services are provided to the Company’s clients. However, the recognition of success fees, which are included in investment banking advisory fee revenue, is generally constrained until it 55 Table of Contents is probable that a significant reversal of the applicable revenue will not occur in a future period. In certain instances, success fees may meet the criteria for recognition during a given reporting period although the transaction closed subsequent to the reporting period end. The Company applies careful analysis and judgment to the remaining factors necessary for completion of a transaction, including factors outside of the Company’s control, to determine whether it is probable a significant reversal of the success fee revenue will not occur. A transaction can fail to be completed for many reasons, which are outside of the Company’s control, including but not limited to, failure of parties to agree upon final terms with the counterparty, securing necessary board or shareholder approvals, securing necessary financing, achieving necessary regulatory approvals, or due to adverse market conditions. Given the considerations to determine whether it is probable a significant reversal of success fee revenue will not occur at year end, performing audit procedures to evaluate such considerations involved a high degree of auditor judgement. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the timing of recording success fee revenue for investment banking advisory services at year end included the following, among others: • We tested the effectiveness of controls over recognizing success fees for investment banking advisory services, including those over the timing of revenue recognition. • We selected a sample of contracts with clients for which revenue was recognized prior to December 31, 2023 as well as the period subsequent to year end and performed the following: – Evaluated whether the Company appropriately identified performance obligations and recognized revenue in the correct period by obtaining and evaluating evidence, including, but not limited to, inquiry with management, transaction close documents, press releases, confirmations, court approvals, executed agreements and communications, regarding the extent of uncertainty associated with variable consideration. – Evaluated the accuracy of management’s calculation of investment banking advisory fee revenue by recalculating the revenue amounts and comparing our expectation to management’s calculation. – Evaluated whether it was probable that a significant reversal of the applicable revenue would not occur. /s/ DELOITTE & TOUCHE LLP New York, New York February 22, 2024 We have served as the Company’s auditor since 2003. 56 Table of Contents EVERCORE INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (dollars in thousands, except share data) December 31, 2023 2022 Assets Current Assets Cash and Cash Equivalents $ 596,878 $ 663,400 Investment Securities and Certificates of Deposit (includes available-for-sale debt securities with an amortized cost of $ 744,178 and $ 802,652 at December 31, 2023 and 2022, respectively) 1,436,883 1,432,716 Accounts Receivable (net of allowances of $ 5,603 and $ 4,683 at December 31, 2023 and 2022, respectively) 371,606 385,131 Receivable from Employees and Related Parties 25,746 21,914 Other Current Assets 174,104 203,570 Total Current Assets 2,605,217 2,706,731 Investments 43,419 43,047 Deferred Tax Assets 265,814 257,166 Operating Lease Right-of-Use Assets 378,128 237,561 Furniture, Equipment and Leasehold Improvements (net of accumulated depreciation and amortization of $ 212,929 and $ 187,077 at December 31, 2023 and 2022, respectively) 137,940 143,268 Goodwill 125,493 123,285 Other Assets 147,287 109,865 Total Assets $ 3,703,298 $ 3,620,923 Liabilities and Equity Current Liabilities Accrued Compensation and Benefits $ 763,160 $ 918,489 Accounts Payable and Accrued Expenses 25,989 28,807 Payable to Employees and Related Parties 45,838 41,235 Operating Lease Liabilities 36,259 37,968 Taxes Payable 5,424 9,842 Other Current Liabilities 33,389 34,195 Total Current Liabilities 910,059 1,070,536 Operating Lease Liabilities 434,247 278,078 Notes Payable 373,885 371,774 Amounts Due Pursuant to Tax Receivable Agreements 52,813 61,169 Other Long-term Liabilities 149,804 112,948 Total Liabilities 1,920,808 1,894,505 Commitments and Contingencies (Note 19) Equity Evercore Inc. Stockholders' Equity Common Stock Class A, par value $ 0.01 per share ( 1,000,000,000 shares authorized, 82,114,009 and 79,686,375 issued at December 31, 2023 and 2022, respectively, and 37,773,613 and 38,347,262 outstanding at December 31, 2023 and 2022, respectively) 821 797 Class B, par value $ 0.01 per share ( 1,000,000 shares authorized, 46 and 50 issued and outstanding at December 31, 2023 and 2022, respectively) — — Additional Paid-In Capital 3,163,198 2,861,775 Accumulated Other Comprehensive Income (Loss) ( 26,538 ) ( 27,942 ) Retained Earnings 1,892,656 1,768,098 Treasury Stock at Cost ( 44,340,396 and 41,339,113 shares at December 31, 2023 and 2022, respectively) ( 3,453,203 ) ( 3,065,917 ) Total Evercore Inc. Stockholders' Equity 1,576,934 1,536,811 Noncontrolling Interest 205,556 189,607 Total Equity 1,782,490 1,726,418 Total Liabilities and Equity $ 3,703,298 $ 3,620,923 See Notes to Consolidated Financial Statements. 57 Table of Contents EVERCORE INC. CONSOLIDATED STATEMENTS OF OPERATIONS (dollars and share amounts in thousands, except per share data) For the Years Ended December 31, 2023 2022 2021 Revenues Investment Banking & Equities: Advisory Fees $ 1,963,857 $ 2,392,990 $ 2,751,992 Underwriting Fees 111,016 122,596 246,705 Commissions and Related Revenue 202,789 206,207 205,822 Asset Management and Administration Fees 67,041 64,483 65,784 Other Revenue, Including Interest and Investments 97,963 ( 7,378 ) 36,782 Total Revenues 2,442,666 2,778,898 3,307,085 Interest Expense 16,717 16,850 17,586 Net Revenues 2,425,949 2,762,048 3,289,499 Expenses Employee Compensation and Benefits 1,656,875 1,697,519 1,848,757 Occupancy and Equipment Rental 84,329 78,437 73,887 Professional Fees 108,801 108,288 96,288 Travel and Related Expenses 64,527 50,183 21,479 Communications and Information Services 71,603 62,642 57,775 Depreciation and Amortization 24,348 27,713 28,099 Execution, Clearing and Custody Fees 12,275 10,345 11,588 Special Charges, Including Business Realignment Costs 2,921 3,126 8,554 Acquisition and Transition Costs — — 7 Other Operating Expenses 41,135 27,753 40,627 Total Expenses 2,066,814 2,066,006 2,187,061 Income Before Income from Equity Method Investments and Income Taxes 359,135 696,042 1,102,438 Income from Equity Method Investments 6,655 7,999 14,161 Income Before Income Taxes 365,790 704,041 1,116,599 Provision for Income Taxes 80,567 172,626 248,026 Net Income 285,223 531,415 868,573 Net Income Attributable to Noncontrolling Interest 29,744 54,895 128,457 Net Income Attributable to Evercore Inc. $ 255,479 $ 476,520 $ 740,116 Net Income Attributable to Evercore Inc. Common Shareholders $ 255,479 $ 476,520 $ 740,116 Weighted Average Shares of Class A Common Stock Outstanding Basic 38,101 39,224 40,054 Diluted 40,099 41,037 43,321 Net Income Per Share Attributable to Evercore Inc. Common Shareholders: Basic $ 6.71 $ 12.15 $ 18.48 Diluted $ 6.37 $ 11.61 $ 17.08 See Notes to Consolidated Financial Statements. 58 Table of Contents EVERCORE INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (dollars in thousands) For the Years Ended December 31, 2023 2022 2021 Net Income $ 285,223 $ 531,415 $ 868,573 Other Comprehensive Income (Loss), net of tax: Unrealized Gain (Loss) on Securities and Investments, net ( 3,087 ) 3,404 ( 303 ) Foreign Currency Translation Adjustment Gain (Loss), net 4,603 ( 20,872 ) ( 2,472 ) Other Comprehensive Income (Loss) 1,516 ( 17,468 ) ( 2,775 ) Comprehensive Income 286,739 513,947 865,798 Comprehensive Income Attributable to Noncontrolling Interest 29,856 53,283 128,010 Comprehensive Income Attributable to Evercore Inc. $ 256,883 $ 460,664 $ 737,788 See Notes to Consolidated Financial Statements. 59 Table of Contents EVERCORE INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (dollars in thousands, except share data) Accumulated Additional Other Class A Common Stock Paid-In Comprehensive Retained Treasury Stock Noncontrolling Total Shares Dollars Capital Income (Loss) Earnings Shares Dollars Interest Equity Balance at December 31, 2020 72,195,283 $ 722 $ 2,266,136 $ ( 9,758 ) $ 798,573 ( 31,445,058 ) $ ( 1,824,727 ) $ 258,428 $ 1,489,374 Net Income — — — — 740,116 — — 128,457 868,573 Other Comprehensive Income (Loss) — — — ( 2,328 ) — — — ( 447 ) ( 2,775 ) Treasury Stock Purchases — — — — — ( 5,455,800 ) ( 720,725 ) — ( 720,725 ) Evercore LP Units Exchanged for Class A Common Stock 241,890 2 25,972 — — — — ( 12,306 ) 13,668 Equity-based Compensation Awards 2,367,115 24 216,657 — — — — 13,189 229,870 Dividends — — — — ( 120,307 ) — — — ( 120,307 ) Noncontrolling Interest (Note 16) — — ( 49,986 ) — — — — ( 72,411 ) ( 122,397 ) Balance at December 31, 2021 74,804,288 748 2,458,779 ( 12,086 ) 1,418,382 ( 36,900,858 ) ( 2,545,452 ) 314,910 1,635,281 Net Income — — — — 476,520 — — 54,895 531,415 Other Comprehensive Income (Loss) — — — ( 15,856 ) — — — ( 1,612 ) ( 17,468 ) Treasury Stock Purchases — — — — — ( 4,438,255 ) ( 520,465 ) — ( 520,465 ) Evercore LP Units Exchanged for Class A Common Stock 2,574,455 26 162,821 — — — — ( 159,412 ) 3,435 Equity-based Compensation Awards 2,307,632 23 245,793 — — — — 23,425 269,241 Dividends — — — — ( 126,804 ) — — — ( 126,804 ) Noncontrolling Interest (Note 16) — — ( 5,618 ) — — — — ( 42,599 ) ( 48,217 ) Balance at December 31, 2022 79,686,375 797 2,861,775 ( 27,942 ) 1,768,098 ( 41,339,113 ) ( 3,065,917 ) 189,607 1,726,418 Net Income — — — — 255,479 — — 29,744 285,223 Other Comprehensive Income — — — 1,404 — — — 112 1,516 Treasury Stock Purchases — — — — — ( 3,001,283 ) ( 387,286 ) — ( 387,286 ) Evercore LP Units Exchanged for Class A Common Stock 178,118 2 15,112 — — — — ( 11,490 ) 3,624 Equity-based Compensation Awards 2,249,516 22 288,155 — — — — 24,301 312,478 Dividends — — — — ( 130,921 ) — — — ( 130,921 ) Noncontrolling Interest (Note 16) — — ( 1,844 ) — — — — ( 26,718 ) ( 28,562 ) Balance at December 31, 2023 82,114,009 $ 821 $ 3,163,198 $ ( 26,538 ) $ 1,892,656 ( 44,340,396 ) $ ( 3,453,203 ) $ 205,556 $ 1,782,490 See Notes to Consolidated Financial Statements. 60 Table of Contents EVERCORE INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) For the Years Ended December 31, 2023 2022 2021 Cash Flows From Operating Activities Net Income $ 285,223 $ 531,415 $ 868,573 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Net (Gains) Losses on Investments, Investment Securities and Contingent Consideration ( 34,671 ) 16,458 ( 24,227 ) Equity Method Investments, Including Gain on Sale ( 192 ) 3,038 1,105 Equity-Based and Other Deferred Compensation 515,381 467,339 422,210 Release of Cumulative Foreign Exchange Losses — — 1,250 Noncash Lease Expense 42,153 41,534 40,761 Depreciation, Amortization and Accretion, net 2,388 28,651 28,655 Bad Debt Expense 5,559 5,513 ( 60 ) Deferred Taxes ( 2,894 ) ( 855 ) 29,078 Decrease (Increase) in Operating Assets: Investment Securities 11,635 ( 1,777 ) ( 1,960 ) Accounts Receivable 11,273 ( 46,084 ) 16,028 Receivable from Employees and Related Parties ( 3,758 ) 3,188 ( 1,622 ) Other Assets ( 4,759 ) ( 116,838 ) ( 4,649 ) (Decrease) Increase in Operating Liabilities: Accrued Compensation and Benefits ( 325,732 ) ( 353,201 ) 191,223 Accounts Payable and Accrued Expenses ( 966 ) ( 1,093 ) ( 5,497 ) Payables to Employees and Related Parties ( 8,734 ) 12,642 6,065 Taxes Payable ( 4,557 ) ( 11,138 ) 5,634 Other Liabilities ( 29,395 ) ( 47,416 ) ( 187,669 ) Net Cash Provided by Operating Activities 457,954 531,376 1,384,898 Cash Flows From Investing Activities Investments Purchased ( 37 ) ( 80 ) ( 6,660 ) Proceeds from Redemption and Sale of Investments — 18,300 20,967 Distributions of Private Equity Investments 105 238 827 Investment Securities: Proceeds from Sales and Maturities of Investment Securities 3,279,088 3,160,061 2,669,500 Purchases of Investment Securities ( 3,313,200 ) ( 2,850,658 ) ( 3,219,975 ) Maturity of Certificates of Deposit 177,446 281,386 121,912 Purchase of Certificates of Deposit ( 107,733 ) ( 272,757 ) ( 264,492 ) Purchase of Furniture, Equipment and Leasehold Improvements ( 20,048 ) ( 23,187 ) ( 27,971 ) Net Cash Provided by (Used in) Investing Activities 15,621 313,303 ( 705,892 ) Cash Flows From Financing Activities Issuance of Noncontrolling Interests 733 300 2,179 Distributions to Noncontrolling Interests ( 27,293 ) ( 45,548 ) ( 67,865 ) Payments Under Tax Receivable Agreement ( 10,843 ) ( 10,944 ) ( 10,825 ) Payment of Notes Payable — ( 67,000 ) ( 38,000 ) Issuance of Notes Payable — 67,000 38,000 Debt Issuance Costs and Make-Whole Amount — ( 1,826 ) ( 355 ) Purchase of Treasury Stock and Noncontrolling Interests ( 391,964 ) ( 550,293 ) ( 729,693 ) Dividends ( 127,864 ) ( 127,257 ) ( 118,762 ) Net Cash Provided by (Used in) Financing Activities ( 557,231 ) ( 735,568 ) ( 925,321 ) Effect of Exchange Rate Changes on Cash 17,017 ( 24,281 ) ( 4,616 ) Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash ( 66,639 ) 84,830 ( 250,931 ) Cash, Cash Equivalents and Restricted Cash – Beginning of Period 672,123 587,293 838,224 Cash, Cash Equivalents and Restricted Cash – End of Period $ 605,484 $ 672,123 $ 587,293 SUPPLEMENTAL CASH FLOW DISCLOSURE Payments for Interest $ 16,181 $ 16,857 $ 17,332 Payments for Income Taxes $ 74,639 $ 217,696 $ 191,970 Accrued Dividends $ 17,054 $ 15,236 $ 14,332 Amounts Due for Purchase of Noncontrolling Interest $ — $ — $ 48,297 Settlement of Sale of Trilantic VI $ — $ 9,188 $ — Settlement of Contingent Consideration $ — $ 1,083 $ — Receipt of Equity Securities in Settlement of Accounts Receivable $ — $ — $ 1,955 See Notes to Consolidated Financial Statements. 61 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Note 1 – Organization Evercore Inc., together with its subsidiaries (the "Company"), is an investment banking and investment management firm, incorporated in Delaware and headquartered in New York, New York. The Company is a holding company which owns a controlling interest in, and is the sole general partner of, Evercore LP, a Delaware limited partnership ("Evercore LP"). The Company operates from its offices and through its affiliates in the Americas, Europe, the Middle East and Asia. The Investment Banking & Equities segment includes the investment banking business through which the Company provides advice to clients on significant mergers, acquisitions, divestitures, shareholder activism and other strategic corporate transactions, with a particular focus on advising prominent multinational corporations and substantial private equity firms on large, complex transactions. The Company also provides liability management and restructuring advice to companies in financial transition, as well as to creditors, shareholders and potential acquirers. In addition, the Company provides its clients with capital markets advice, underwrites securities offerings, raises funds for financial sponsors and provides advisory services focused on partnerships and private funds interests, as well as on primary and secondary transactions for real estate oriented financial sponsors and private equity interests. The Investment Banking & Equities segment also includes the equities business through which the Company offers macroeconomic, policy and fundamental equity research and agency-based equity securities trading for institutional investors. The Investment Management segment includes the wealth management business through which the Company provides investment advisory, wealth management and fiduciary services for high-net-worth individuals and associated entities, and the private equity business, which holds interests in private equity funds which are not managed by the Company. Note 2 – Significant Accounting Policies Basis of Presentation – The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements of the Company are comprised of the consolidation of Evercore LP and Evercore LP's wholly-owned and majority-owned direct and indirect subsidiaries, including Evercore Group L.L.C. ("EGL"), a registered broker-dealer in the U.S. The Company's policy is to consolidate all subsidiaries in which it has a controlling financial interest, as well as any variable interest entities ("VIEs") where the Company is deemed to be the primary beneficiary, when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE. The Company reviews factors, including the rights of the equity holders and obligations of equity holders to absorb losses or receive expected residual returns, to determine if the investment is a VIE. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly or indirectly by the Company. The consolidation analysis is generally performed qualitatively. This analysis, which requires judgment, is performed at each reporting date. Evercore LP is a VIE and the Company is the primary beneficiary. Specifically, the Company has the majority economic interest in Evercore LP and has decision making authority that significantly affects the economic performance of the entity while the limited partners have no kick-out or substantive participating rights. The assets and liabilities of Evercore LP represent substantially all of the consolidated assets and liabilities of the Company with the exception of U.S. corporate taxes and related items, which are presented on the Company's (Parent Company Only) Condensed Statements of Financial Condition in Note 24. Evercore ISI International Limited ("Evercore ISI U.K."), Evercore Partners International LLP ("Evercore U.K."), Evercore (Japan) Ltd. ("Evercore Japan"), Evercore Consulting (Beijing) Co. Ltd. ("Evercore Beijing"), Evercore Partners Canada Ltd. ("Evercore Canada") and Evercore Asia Limited ("Evercore Hong Kong") are also VIEs, and the Company is the primary beneficiary of these VIEs. Specifically for Evercore ISI U.K., Evercore Japan, Evercore Beijing, Evercore Canada and Evercore Hong Kong (as of September 30, 2023 for Evercore Hong Kong), the Company provides financial support through transfer pricing agreements with these entities, which exposes the Company to losses that are potentially significant to these entities, and has decision making authority that significantly affects the economic performance of these entities. The Company has the majority economic interest in Evercore U.K. and has decision making authority that significantly affects the economic performance of this entity. The Company included in its Consolidated Statements of Financial Condition Evercore ISI U.K., Evercore U.K., Evercore Japan, Evercore Beijing, Evercore Canada and Evercore Hong Kong assets of $ 466,588 and liabilities of $ 224,263 at December 31, 2023 and Evercore ISI U.K., Evercore U.K., Evercore Japan, Evercore Beijing and Evercore Canada assets of $ 584,192 and liabilities of $ 247,884 at December 31, 2022. 62 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) All intercompany balances and transactions with the Company's subsidiaries have been eliminated upon consolidation. Evercore LP partnership units Class A LP Units – At the time of the Company's initial public offering, the members of Evercore LP (the "Members") received Class A limited partnership units of Evercore LP ("Class A LP Units") in consideration for their contribution of the various entities included in the historical combined financial statements of the Company. The Class A LP Units were subject to vesting requirements and transfer restrictions and are exchangeable on a one -for-one basis for shares of Class A common stock of the Company ("Class A Shares"). Periodically, certain employees of the Company purchase vested Class A LP Units at fair value at the time of purchase. At December 31, 2013, all Class A LP Units were fully vested. Class E LP Units – As a result of the acquisition of the operating businesses of International Strategy & Investment ("ISI") in 2014, the Company has Class E limited partnership units of Evercore LP ("Class E LP Units") outstanding, which are exchangeable on a one -for-one basis for Class A Shares. At December 31, 2020, all Class E LP Units were fully vested. Class I LP Units – In 2016, in conjunction with the appointment of the Chief Executive Officer (then Executive Chairman) , the Company issued unvested Class I-P Units of Evercore LP ("Class I-P Units"). The Class I-P Units were contingently exchangeable into Class I limited partnership units of Evercore LP ("Class I LP Units"), which are exchangeable on a one -for-one basis for Class A Shares. In March 2022, the Class I-P Units converted into Class I LP Units. Class K LP Units – The Company periodically grants unvested Class K-P Units of Evercore LP ("Class K-P Units"). The Class K-P Units are contingently exchangeable into Class K limited partnership units of Evercore LP ("Class K LP Units"), which are ultimately exchangeable on a one -for-one basis for Class A Shares. In December 2021, the Class K-P Units that were issued in 2017 converted into Class K LP Units upon the achievement of certain defined benchmark results and continued service requirements and in February 2023, the first tranche of the Class K-P Units that were issued in 2019 converted into Class K LP Units upon the achievement of certain performance and service conditions. See Note 18 for further information on Evercore LP partnership units ("LP Units") where exchangeability is subject to performance and/or market conditions. The Company accounts for exchanges of LP Units for Class A Shares based on the carrying amounts of the Members' LP Units immediately before the exchange. The Company's interest in Evercore LP is within the scope of Accounting Standards Codification ("ASC") 810-20, " Control of Partnerships and Similar Entities." The Company consolidates Evercore LP and records noncontrolling interest for the economic interest in Evercore LP held directly by others, which includes the Members. Revenue Recognition – The Company accounts for revenue recognition under ASC 606, "Revenue from Contracts with Customers," ("ASC 606"), which provides a five step model to revenue recognition as follows: Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation The Company applies this model to revenue streams from its Investment Banking & Equities and Investment Management segments. Investment Banking & Equities Revenue – The Company earns fees from clients for providing advisory services on strategic matters, including mergers, acquisitions, divestitures, leveraged buyouts, liability management and restructurings, activism and defense and similar corporate finance matters. The Company's Investment Banking & Equities segment also includes services related to securities underwriting, private placement services and commissions for agency-based equity trading services and equity research. Revenue is recognized as the Company satisfies performance obligations, upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for these services. The Company’s contracts with customers may include promises to transfer multiple services to a 63 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) customer. Determining whether services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For performance obligations satisfied over time, determining a measure of progress requires the Company to make significant judgments that affect the timing of revenue recognized. For certain advisory services, the Company has concluded that performance obligations are satisfied over time. This is based on the premise that the Company transfers control of services and the client simultaneously receives benefits from these services over the course of an engagement. For performance obligations satisfied at a point in time, determining when control transfers requires the Company to make significant judgments that affect the timing of when revenue is recognized. The Company records revenue on the Consolidated Statements of Operations for the following: Advisory Fees – In general, advisory fees are paid at the time the Company signs an engagement letter, during the course of the engagement or when an engagement is completed. In some circumstances, and as a function of the terms of an engagement letter, the Company may receive fixed retainer fees for financial advisory services concurrent with, or soon after, the execution of the engagement letter or over the course of the engagement, where the engagement letter will specify a future service period associated with those fees. The Company may also receive announcement fees upon announcement of a transaction in addition to success fees upon closing of a transaction or another defined outcome, both of which represent variable consideration. This variable consideration will be included in the transaction price, as defined, and recognized as revenue to the extent that it is probable that a significant reversal of revenue will not occur. When assessing probability, the Company applies careful analysis and judgment to the remaining factors necessary for completion of a transaction, including factors outside of the Company's control. A transaction can fail to be completed for many reasons which are outside of the Company’s control, including failure of parties to agree upon final terms, to secure necessary board or shareholder approvals, to secure necessary financing, to achieve necessary regulatory approvals, or due to adverse market conditions. In the case of bankruptcy engagements, fees may be subject to court approval. With respect to retainer, announcement and success fees in merger and acquisition ("M&A") transactions, there are no distinct performance obligations aside from advisory activities, which are generally focused on achieving a milestone (typically, the announcement and/or the closing of a transaction). These advisory services are provided over time throughout the contract period. The Company recognizes revenue when distinct services are performed and when it is probable that a reversal of revenue will not occur, which is generally upon the announcement or closing of a transaction. Accordingly, in any given period, advisory fees recognized for certain transactions may relate to services performed in prior periods. In circumstances in which retainer fees are received in advance of services, these fees are initially recorded as deferred revenue (a contract liability), which is recorded in Other Current Liabilities on the Consolidated Statements of Financial Condition, and subsequently recognized in Advisory Fees on the Consolidated Statements of Operations during the applicable time period within which the service is rendered. Announcement fees for advisory services are recognized upon announcement (the point at which it is determined that the reversal of revenue is not probable) and all other requirements for revenue recognition are satisfied. A portion of the announcement fee may be deferred based on the services remaining to be completed, if any. Success fees for advisory services, such as M&A advice, are recognized when it is determined that the reversal of revenue is not probable and all other requirements for revenue recognition are satisfied, which is generally at closing of the transaction. With respect to fairness or valuation opinions, fees are fixed and there is a distinct performance obligation, since the opinion is rendered separate from any other advisory activities. Revenues related to fairness or valuation opinions are recognized at the point in time when the opinion has been rendered and delivered to the client. In the event the Company was to receive an opinion or success fee in advance of the completion conditions noted above, such fee would initially be recorded as deferred revenue (a contract liability) in Other Current Liabilities on the Consolidated Statements of Financial Condition and subsequently recognized in Advisory Fees on the Consolidated Statements of Operations when the conditions of completion have been satisfied. Placement fee revenues are attributable to capital raising on both corporations and financial sponsors. The Company recognizes placement fees in accordance with the terms of the engagement letter, which are generally contingent on the achievement of a capital commitment by an investor, at the time of the client's acceptance of capital or capital commitments. Underwriting Fees – Underwriting fees are attributable to public and private offerings of equity and debt securities and are recognized at the point in time when the offering has been deemed to be completed by the lead manager of the underwriting group, or in the case of certain ongoing issuances when the sale of the securities has settled. When the offering is completed, the performance obligation has been satisfied and the Company recognizes the applicable management fee, selling concession, sales agent commission or placement agent fee. Offering expenses are presented gross 64 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) in the Consolidated Statements of Operations. The Company also manages assignments involving the exchange of an issuer's securities where fees are recognized when earned. Commissions and Related Revenue – Commissions and Related Revenue include commissions received from customers for the execution of agency-based brokerage transactions in listed and over-the-counter equities. The execution of each trade order represents a distinct performance obligation and the transaction price at the point in time of trade order execution is fixed. Trade execution is satisfied at the point in time that the customer has control of the asset and as such, fees are recorded on a trade date basis or, in the case of payments under commission sharing arrangements, when earned. The Company also earns subscription fees for the sales of research, as well as revenues from trades primarily executed on a riskless principal basis. The delivery of research under subscription arrangements represents a distinct performance obligation that is satisfied over time. The fees are fixed and are recognized over the period in which the performance obligation is satisfied. Cash received before the subscription period ends is initially recorded as deferred revenue (a contract liability) in Other Current Liabilities on the Consolidated Statements of Financial Condition, and is recognized in Commissions and Related Revenue on the Consolidated Statements of Operations ratably over the period in which the related services are rendered. Taxes collected from customers and remitted to governmental authorities are presented on a net basis on the Consolidated Statements of Operations. Asset Management and Administration Fees – The Company's Investment Management segment generates revenues from the management of client assets and through interests in private equity funds which are not managed by the Company. The Company’s contracts with customers may include promises to transfer multiple services to a customer. Determining whether services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For performance obligations satisfied over time, determining a measure of progress requires the Company to make significant judgments that affect the timing of revenue recognized. Asset management fees for third-party clients are generally based on the value of the assets under management and any performance fees that may be negotiated with the client. The management of asset portfolios represents a distinct performance obligation that is satisfied over time. These fees are generally recognized over the period that the related services are provided and in which the performance obligation is satisfied, based upon the beginning, ending or average value of the assets for the relevant period. Fees paid in advance of services rendered are initially recorded as deferred revenue (a contract liability), which is recorded in Other Current Liabilities on the Consolidated Statements of Financial Condition, and are recognized in Asset Management and Administration Fees on the Consolidated Statements of Operations ratably over the period in which the related service is rendered. Fees generated for serving as an independent fiduciary and/or trustee are either based on a flat fee, are pre-negotiated with the client or are based on the value of assets under administration. The management of assets under administration represents a distinct performance obligation that is satisfied over time. For ongoing engagements, fees are billed monthly or quarterly either in advance or in arrears. Fees paid in advance of services rendered and satisfaction of the performance obligation are initially recorded as deferred revenue (a contract liability) in Other Current Liabilities on the Consolidated Statements of Financial Condition, and are recognized in Asset Management and Administration Fees on the Consolidated Statements of Operations ratably over the period in which the related services are rendered and the performance obligation is satisfied. Other Revenue, Including Interest and Investments, and Interest Expense – Other Revenue, Including Interest and Investments, includes the following: • Interest income, including accretion, and income (losses) on investment securities, including the Company's investment funds (which are used as an economic hedge against the Company's deferred cash compensation program), certificates of deposit, cash and cash equivalents, long-term accounts receivable and on the Company's debt security investment in G5 Holdings S.A. ("G5") (through June 25, 2021, the date G5 repaid its outstanding debentures in full. See Note 10 for further information.) • A gain on the sale of a portion of the Company's interests in ABS in 2022. See Note 10 for further information • Gains (losses) resulting from foreign currency exchange rate fluctuations and foreign currency exchange forward contracts used as an economic hedge • Realized and unrealized gains and losses on interests in private equity funds which the Company does not manage 65 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) • Adjustments to amounts due pursuant to the Company's tax receivable agreement, subsequent to its initial establishment, related to changes in enacted tax rates Interest Expense includes interest expense associated with the Company’s Notes Payable and lines of credit. Client Expense Reimbursement – In the conduct of its financial advisory service engagements, the Company receives reimbursement for certain expenses incurred by the Company in the course of performing services. Transaction-related expenses, which are billable to clients, are recognized as revenue and recorded in Accounts Receivable on the later of the date of an executed engagement letter or the date the expense is incurred. Noncontrolling Interest – Noncontrolling interest recorded in the consolidated financial statements relates to the portions of the Company's subsidiaries not owned by the Company. The Company allocates net income to noncontrolling interests held at Evercore LP and at the operating entity level, where required, by multiplying the relative ownership interest of the noncontrolling interest holders for the period by the net income or loss for the entity to which the noncontrolling interest relates. In circumstances where the governing documents of the entity to which the noncontrolling interest relates require special allocations of profits (losses) to the controlling and noncontrolling interest holders, the net income or loss of these entities is allocated based on these special allocations. Noncontrolling Interest is presented as a component of Total Equity on the Consolidated Statements of Financial Condition and below Net Income on the Consolidated Statements of Operations. In addition, there is an allocation of the components of Total Comprehensive Income between controlling interests and noncontrolling interests. Changes in a parent's ownership interest while the parent retains control of its subsidiary are accounted for as equity transactions. See Note 16 for further information. Fair Value of Financial Instruments – The majority of the Company's assets and liabilities are recorded at fair value or at amounts that approximate fair value. Such assets and liabilities include cash and cash equivalents, investments, investment securities, receivables and payables and accruals. See Note 11 for further information. Cash and Cash Equivalents – Cash and Cash Equivalents consist of short-term highly-liquid investments with original maturities of three months or less. Investment Securities and Certificates of Deposit and Futures and Forward Contracts – Investment Securities may include investments in U.S. Treasury securities, other debt securities and investments in readily-marketable equity securities, including the Company's portfolio of exchange-traded funds, which are accounted for under ASC 320-10, " Investments - Debt Securities" and ASC 321-10, " Investments - Equity Securities," ("ASC 321-10"). The securities are carried at fair value on the Consolidated Statements of Financial Condition; debt securities are valued based on quoted prices that exist in the marketplace for similar issues and equity securities are valued using quoted market prices on applicable exchanges or markets. Investment Securities transactions are recorded as of the trade date. The Company also periodically enters into futures contracts as an economic hedge against the Company's deferred cash compensation program and foreign currency exchange forward contracts as an economic hedge against exchange rate risk for foreign currency denominated accounts receivable or other commitments. In accordance with ASC 815, "Derivatives and Hedging," ("ASC 815") futures and forward contracts are carried at fair value. Debt securities are classified as available-for-sale and any unrealized gains and losses are recorded as net increases or decreases to Accumulated Other Comprehensive Income (Loss), net of tax, and realized gains and losses on these securities are included in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations. Realized and unrealized gains and losses on equity securities and futures contracts are recorded in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations. EGL also invests in fixed income portfolios consisting of U.S. Treasury securities, which are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations, as required for broker-dealers in securities. Certificates of Deposit consist of investments with certain banks with original maturities of four months or less when purchased. See Note 8 for further information. Accounts Receivable and Contract Assets – Accounts Receivable consists primarily of investment banking fees and expense reimbursements charged to the Company's clients. The Company records accounts receivable, net of any allowance for credit losses, when relevant revenue recognition criteria has been achieved and payment is conditioned on the passage of time. The Company maintains an allowance for credit losses to provide coverage for estimated losses from its client receivables. In accordance with ASC 326, "Financial Instruments - Credit Losses" , the Company determines the adequacy of the allowance by 66 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) estimating the probability of loss based on the Company's analysis of historical credit loss experience of its client receivables, and taking into consideration current market conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company has determined that long-term forecasted information is not relevant to its fee receivables, which are primarily short-term. The Company updates its average credit loss rates periodically and maintains a quarterly allowance review process to consider current factors that would require an adjustment to the credit loss allowance. In addition, the Company periodically performs a qualitative assessment to monitor risks associated with current and forecasted conditions that may require an adjustment to the expected credit loss rates. Expected credit losses for newly recognized financial assets and changes to expected credit losses during the period are recognized in earnings. The Company's 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 certain fees related to private funds capital raising and the private capital businesses, a portion of which may be collected in a period exceeding one year . The collection period for restructuring transaction receivables may exceed 90 days. Receivables that are collected in a period exceeding one year are reflected in Other Assets on the Consolidated Statements of Financial Condition. The Company records contract assets within Other Current Assets and Other Assets on the Consolidated Statements of Financial Condition when payment is due from a client conditioned on future performance or the occurrence of other events. The Company also recognizes a contract asset for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year . The Company applies a practical expedient to expense costs to obtain a contract as incurred when the amortization period is one year or less. See Note 4 for further information. Investments – The Company's investments include investments in unconsolidated affiliated companies and other investments in private equity partnerships: Affiliates – The Company has equity interests in ABS Investment Management Holdings LP and ABS Investment Management GP LLC (collectively, "ABS"), Atalanta Sosnoff Capital, LLC ("Atalanta Sosnoff"), Luminis Partners ("Luminis") and Seneca Advisors LTDA ("Seneca Evercore") and includes its share of the income (losses) within Income from Equity Method Investments, as a component of Income Before Income Taxes, on the Consolidated Statements of Operations. The Company assesses each of its equity method investments annually for impairment, or more frequently if circumstances indicate impairment may have occurred. Private Equity – The investments in private equity funds consist primarily of investments in marketable and non-marketable securities of the portfolio companies. The underlying investments held by the private equity funds are valued based on quoted market prices or estimated fair value if there is no public market. The fair value of non-marketable securities is determined by giving consideration to a range of factors, including but not limited to, market conditions, operating performance (current and projected) and subsequent financing transactions. Due to the inherent uncertainty in the valuation of these non-marketable securities, estimated values may materially differ from the values that would have been used had a ready market existed for these investments. Investments in publicly-traded securities held by the private equity funds are valued using quoted market prices. The Company recognizes its allocable share of the changes in fair value of the private equity funds' underlying investments as realized and unrealized gains (losses) within Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations. Other Investments – The Company also maintains investments in Glisco Manager Holdings LP and equity securities in private companies, which are accounted for as equity securities without readily determinable fair values in accordance with ASC 321-10. The Company also previously held an investment in Trilantic Capital Partners ("Trilantic"), which the Company decided to wind-down in 2021 consistent with the Company's investment strategy, and an investment in a debt security that was accounted for as a held-to-maturity security, through June 25, 2021. The Company assesses these investments quarterly for impairment, or more frequently if circumstances indicate impairment may have occurred. See Note 10 for further information. Leases – Pursuant to ASC 842, "Leases" ("ASC 842"), the Company includes the impact of all leases, including short-term leases, on its Consolidated Statements of Financial Condition. The Company does not separate lease and non-lease components of contracts for leases for the use of office space and equipment. Operating leases for office space generally 67 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) contain payments for real estate taxes, common area maintenance and other operating expenses in addition to rent payments that are not fixed; the Company accounts for these costs as variable payments and does not include these as part of the lease component. The present values of the Company's lease commitments are reflected as long-term assets, within Operating Lease Right-of-Use Assets, with corresponding liabilities classified as current and non-current, within Operating Lease Liabilities on the Company's Consolidated Statements of Financial Condition. The Company determines if an arrangement is a lease at inception. Right-of-use assets represent the Company's right to use the underlying assets for their lease terms and lease liabilities represent the Company's obligation to make lease payments arising from these leases. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Right-of-use assets are subject to certain adjustments for lease incentives and initial direct costs. The lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. The Company's lease agreements do not contain any residual value guarantees. Operating lease expense is included in Occupancy and Equipment Rental on the Company's Consolidated Statements of Operations. See Note 9 for further information. Furniture, Equipment and Leasehold Improvements – Fixed assets, including equipment, hardware and software and leasehold improvements, are stated at cost, net of accumulated depreciation and amortization. Furniture, equipment and computer hardware and software are depreciated using the straight-line method over the estimated useful lives of the assets, primarily ranging from three to seven years . Leasehold improvements are amortized over the shorter of the term of the lease or the useful life of the asset. Certain costs associated with the acquisition or development of internal-use software and cloud computing arrangements are also capitalized. Once the software is ready for its intended use, the capitalized costs are amortized using the straight-line method over the estimated useful life of the software or hosting arrangement. Capitalized costs associated with cloud computing arrangements are presented in the same line item on the Consolidated Statements of Financial Condition that a prepayment of the fees for the associated hosting arrangement is presented in (within Other Assets). The capitalized costs associated with cloud computing arrangements are amortized over the term of the arrangement and the expense is presented in the same line item on the Consolidated Statements of Operations as the fees associated with the hosting element of the arrangement (within Communications and Information Services). See Note 12 for further information. Goodwill and Intangible Assets – Goodwill is tested for impairment annually, as of November 30 th , or more frequently if circumstances indicate impairment may have occurred. The Company assesses whether any goodwill allocated to its applicable reporting unit is impaired by comparing the fair value of each reporting unit with its respective carrying amount. For acquired businesses, contingent consideration is recognized and measured at fair value as of the acquisition date and at subsequent reporting periods. The Company tests goodwill for impairment at the reporting unit level. In determining the fair value for each reporting unit the Company utilizes either a market multiple approach or a discounted cash flow methodology based on the adjusted cash flows from operations, or a weighted combination of both a market multiple approach and discounted cash flow methodology. The market multiple approach includes applying the average earnings multiples of comparable public companies for their respective reporting unit multiplied by the forecasted earnings of the respective reporting unit to yield an estimate of fair value. The discounted cash flow methodology begins with the forecasted adjusted cash flows from each of the reporting units and uses a discount rate that reflects the weighted average cost of capital adjusted for the risks inherent in the future cash flows. The Company recognizes an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value. Intangible assets with finite lives are amortized over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, in accordance with ASC 360, " Property, Plant, and Equipment". See Note 5 for further information. Compensation and Benefits – Compensation includes salaries, bonuses (discretionary awards and guaranteed amounts), severance, deferred cash and share-based compensation, and other benefits. Cash bonuses are accrued over the respective 68 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) service periods to which they relate and deferred cash and share-based grants are expensed prospectively over their requisite service period, subject to acceleration in certain cases. Effective January 1, 2023, the Company changed its medical insurance plan in the U.S. from a fully insured to a self-funded plan. The Company is liable for the funding of claims under the self-funded plan. The Company also maintains stop-loss insurance for its medical plan to provide coverage for claims over a defined financial threshold. In accordance with ASC 405-30, " Liabilities - Insurance-Related Assessments ", the Company accrues losses for the total cost of both asserted and unasserted claims. The cost of incurred but not reported claims is measured at the present value, as applicable, of the estimated ultimate cost to the plan of settling those claims. See Note 14 for further information. Share-Based Payments and Other Deferred Compensation – The Company accounts for share-based payments in accordance with ASC 718, " Compensation – Stock Compensation" ("ASC 718"). Compensation expense recognized pursuant to share-based compensation awards is based on the grant date fair value of the award. The grant date fair value is amortized over the vesting periods or requisite service periods ("Service-based Awards"). However, the vesting of some Service-based Awards will accelerate upon the occurrence of certain events. The Company amortizes the grant-date fair value of share-based compensation awards made to employees, who are or will become retirement eligible prior to the stated vesting date, over the expected substantive service period. For the purposes of calculating diluted net income per share attributable to Evercore Inc. common shareholders, unvested Service-based Awards are included in the diluted weighted average Class A Shares outstanding using the treasury stock method. Once vested, restricted stock units ("RSUs"), and restricted stock are included in the basic and diluted weighted average Class A Shares outstanding. Expense relating to RSUs, restricted stock and LP Units is reflected in Employee Compensation and Benefits on the Consolidated Statements of Operations. Compensation expense is recognized pursuant to performance-based awards if, and to the extent, it is probable that the performance condition will be achieved. The effect of a market condition is reflected in the grant date fair value of an award and compensation cost is recognized provided the service condition is satisfied and to the extent any performance condition is achieved. See Note 18 for a discussion of the Company's Long-term Incentive Plan and other performance-based awards. Awards classified as liabilities as required under ASC 718, such as cash settled share-based awards, are re-measured at fair value at each reporting period. See Note 18 for further information. Foreign Currency Translation – Foreign currency assets and liabilities have been translated at rates of exchange prevailing at the end of the periods presented. Income and expenses transacted in foreign currency have been translated at average monthly exchange rates during the period. Translation gains and losses are included in Foreign Currency Translation Adjustment Gain (Loss), net, as a component of Other Comprehensive Income (Loss) on the Consolidated Statements of Changes in Equity and the Consolidated Statements of Comprehensive Income. Transactional exchange gains and losses, as well as releases of cumulative foreign currency translation gains and losses from Accumulated Other Comprehensive Income (Loss), are included in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations. Income Taxes – The Company accounts for income taxes in accordance with ASC 740, " Income Taxes" ("ASC 740"), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax basis of its assets and liabilities. Deferred income taxes reflect the net tax effects of temporary differences between financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. Such temporary differences are reflected on the Company's Consolidated Statements of Financial Condition as deferred tax assets and liabilities. The Company accounts for the impact of changes in statutory income tax rates on deferred tax assets and liabilities in the year of enactment. Deferred tax assets are reduced by a valuation allowance when it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. Significant management judgment is required in determining the Company's provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against the Company's net deferred tax assets. Excess tax benefits and deficiencies from the delivery of Class A Shares under share-based payment arrangements are recognized in the Company's Provision for Income Taxes on the Consolidated Statements of Operations. 69 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) ASC 740 provides a benefit recognition model with a two-step approach consisting of "more-likely-than-not" recognition criteria, and a measurement attribute that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. ASC 740 also requires the recognition of liabilities created by differences between tax positions taken in a tax return and amounts recognized in the financial statements. See Note 21 for further information. Note 3 – Recent Accounting Pronouncements ASU 2023-07 – In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, "Improvements to Reportable Segment Disclosures" ("ASU 2023-07"). ASU 2023-07 provides amendments to ASC 280, "Segment Reporting," which require disclosure of incremental segment information on an annual and interim basis, and require that all annual disclosures currently required by ASC 280 about a reportable segment's profit or loss and assets are also provided in interim periods. The amendments in this update are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a retrospective basis. The Company is currently assessing the impact of this update on the Company's financial condition, results of operations and cash flows, or disclosures thereto. ASU 2023-09 – In December 2023, the FASB issued ASU No. 2023-09, "Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 provides amendments to ASC 740, which require greater disaggregation of information in a reporting entity's effective tax rate reconciliation, require disaggregation of income taxes paid by federal, state, and foreign jurisdictions and add or modify certain other disclosure requirements. The amendments in this update are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a prospective or retrospective basis. The Company is currently assessing the impact of this update on the Company's financial condition, results of operations and cash flows, or disclosures thereto . Note 4 – Revenue and Accounts Receivable The following table presents revenue recognized by the Company for the years ended December 31, 2023, 2022 and 2021: For the Years Ended December 31, 2023 2022 2021 Investment Banking & Equities: Advisory Fees $ 1,963,857 $ 2,392,990 $ 2,751,992 Underwriting Fees 111,016 122,596 246,705 Commissions and Related Revenue 202,789 206,207 205,822 Total Investment Banking & Equities $ 2,277,662 $ 2,721,793 $ 3,204,519 Investment Management: Asset Management and Administration Fees: Wealth Management $ 67,041 $ 64,483 $ 65,784 Total Investment Management $ 67,041 $ 64,483 $ 65,784 Contract Balances The change in the Company’s contract assets and liabilities during the following periods primarily reflects timing differences between the Company’s performance and the client’s payment. The Company’s receivables, contract assets and deferred revenue (contract liabilities) for the years ended December 31, 2023 and 2022 are as follows: 70 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) For the Year Ended December 31, 2023 Receivables (Current) (1) Receivables (Long-term) (2) Contract Assets (Current) (3) Contract Assets (Long-term) (2) Deferred Revenue (Current Contract Liabilities) (4) Deferred Revenue (Long-term Contract Liabilities) (5) Balance at January 1, 2023 $ 385,131 $ 64,139 $ 110,468 $ 8,028 $ 5,071 $ — Increase (Decrease) ( 13,525 ) 29,550 ( 25,067 ) ( 2,183 ) ( 1,547 ) — Balance at December 31, 2023 $ 371,606 $ 93,689 $ 85,401 $ 5,845 $ 3,524 $ — For the Year Ended December 31, 2022 Receivables (Current) (1) Receivables (Long-term) (2) Contract Assets (Current) (3) Contract Assets (Long-term) (2) Deferred Revenue (Current Contract Liabilities) (4) Deferred Revenue (Long-term Contract Liabilities) (5) Balance at January 1, 2022 $ 351,668 $ 87,764 $ 14,092 $ 12,945 $ 9,257 $ 147 Increase (Decrease) 33,463 ( 23,625 ) 96,376 ( 4,917 ) ( 4,186 ) ( 147 ) Balance at December 31, 2022 $ 385,131 $ 64,139 $ 110,468 $ 8,028 $ 5,071 $ — (1) Included in Accounts Receivable on the Consolidated Statements of Financial Condition. (2) Included in Other Assets on the Consolidated Statements of Financial Condition. (3) Included in Other Current Assets on the Consolidated Statements of Financial Condition. (4) Included in Other Current Liabilities on the Consolidated Statements of Financial Condition. (5) Included in Other Long-term Liabilities on the Consolidated Statements of Financial Condition. The Company's contract assets represent arrangements in which an estimate of variable consideration has been included in the transaction price and thereby recognized as revenue that precedes the contractual due date. Under ASC 606, revenue is recognized when all material conditions for completion have been met and it is probable that a significant revenue reversal will not occur in a future period. The Company recognized revenue of $ 29,587 , $ 44,579 and $ 28,657 on the Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021, respectively, that was initially included in deferred revenue within Other Current Liabilities on the Company’s Consolidated Statements of Financial Condition. Generally, performance obligations under client arrangements will be settled within one year ; therefore, the Company has elected to apply the practical expedient in ASC 606-10-50-14. The allowance for credit losses for the years ended December 31, 2023 and 2022 is as follows: For the Years Ended December 31, 2023 2022 Beginning Balance $ 4,683 $ 2,704 Bad debt expense, net of reversals 5,559 5,513 Write-offs, foreign currency translation and other adjustments ( 4,639 ) ( 3,534 ) Ending Balance $ 5,603 $ 4,683 The increase in the balance during the year ended December 31, 2023 is primarily related to an increase in the Company's reserve for credit losses, partially offset by the write-off of aged receivables. For long-term accounts receivable and long-term contract assets, the Company monitors clients’ creditworthiness based on collection experience and other internal metrics. The following table presents the Company’s long-term accounts receivable and long-term contract assets from the Company's private and secondary fund advisory businesses as of December 31, 2023, by year of origination: 71 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Amortized Carrying Value by Origination Year 2023 2022 2021 2020 2019 Total Long-term Accounts Receivable and Long-term Contract Assets $ 59,665 $ 28,443 $ 9,089 $ 1,769 $ 568 $ 99,534 Note 5 – Business Changes and Developments Goodwill and Intangible Assets Goodwill associated with the Company's acquisitions is as follows: Investment Banking & Equities Investment Management Total Balance at December 31, 2021 (1) $ 120,719 $ 7,527 $ 128,246 Foreign Currency Translation and Other ( 4,961 ) — ( 4,961 ) Balance at December 31, 2022 (1) 115,758 7,527 123,285 Foreign Currency Translation and Other 2,208 — 2,208 Balance at December 31, 2023 (1) $ 117,966 $ 7,527 $ 125,493 (1) The amount of the Company's goodwill before accumulated impairment losses of $ 38,528 was $ 164,021 , $ 161,813 and $ 166,774 at December 31, 2023, 2022 and 2021, respectively. Expen se associated with the amortization of intangible assets was $ 336 and $ 362 for the years ended December 31, 2022 and 2021, respectively. The Company's intangible assets were fully amortized as of December 31, 2022. Impairments of Goodwill At November 30, 2023 and 2022, in accordance with ASC 350, "Intangibles - Goodwill and Other" , the Company performed its annual goodwill impairment assessment and concluded that the fair value of its reporting units substantially exceeded their carrying values. Note 6 – Special Charges, Including Business Realignment Costs The Company recognized $ 2,921 for the year ended December 31, 2023, as Special Charges, Including Business Realignment Costs, related to the write-off of non-recoverable assets in connection with the wind-down of the Company's operations in Mexico. The Company recognized $ 3,126 for the year ended December 31, 2022, as Special Charges, Including Business Realignment Costs, related to charges associated with the prepayment of the Company's 5.23 % Series B senior notes originally due March 30, 2023 (the "Series B Notes"), as well as certain professional fees, separation benefits and other charges related to the wind-down of the Company's operations in Mexico. See Note 13 for further information. The Company recognized $ 8,554 for the year ended December 31, 2021, as 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 the Company's investment strategy, the Company decided to wind-down during 2021. See Note 10 for further information. Note 7 – Related Parties Advisory Fees includes fees earned from clients that have the Company's Senior Managing Directors, certain Senior Advisors and executives as a member of their Board of Directors of $ 5,494 , $ 11,680 and $ 34,656 for the years ended December 31, 2023, 2022 and 2021, respectively. Other Assets on the Consolidated Statements of Financial Condition includes the long-term portion of loans receivable from certain employees of $ 21,186 and $ 16,928 as of December 31, 2023 and 2022, respectively. See Note 18 for further information. Receivable from Employees and Related Parties on the Consolidated Statements of Financial Condition consisted of the following at December 31, 2023 and 2022: 72 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) December 31, 2023 2022 Advances to Employees $ 25,364 $ 21,003 Personal Expenses Paid on Behalf of Employees and Related Parties 59 543 Other 323 368 Receivable from Employees and Related Parties $ 25,746 $ 21,914 Payable to Employees and Related Parties on the Consolidated Statements of Financial Condition consisted of the following at December 31, 2023 and 2022: December 31, 2023 2022 Amounts Due to U.K. Members $ 32,618 $ 30,188 Amounts Due Pursuant to Tax Receivable Agreements (1) 10,522 10,417 Amounts Due to Employees for the Sale of Outstanding Class R Interests of Private Capital Advisory L.P. (2) 2,023 — Other 675 630 Payable to Employees and Related Parties $ 45,838 $ 41,235 (1) Reflects the current portion due related to the Member exchange of Class A LP Units for Class A Shares. The long-term portion of $ 52,813 and $ 61,169 is included within Amounts Due Pursuant to Tax Receivable Agreements on the Consolidated Statements of Financial Condition at December 31, 2023 and 2022, respectively. (2) Reflects the current portion of contingent cash consideration due to employees of the Real Estate Capital Advisory ("RECA") business for the sale of Class R Interests of Private Capital Advisory L.P. The long-term portion of contingent cash consideration due to employees of $ 5,036 is included within Other Long-term Liabilities on the Consolidated Statement of Financial Condition at December 31, 2022. See Note 16 for further information. Note 8 – Investment Securities and Certificates of Deposit The Company's Investment Securities and Certificates of Deposit as of December 31, 2023 and 2022 were as follows: December 31, 2023 2022 Debt Securities $ 744,315 $ 807,135 Equity Securities 375 335 Debt Securities Carried by EGL 476,778 365,638 Investment Funds 160,559 136,718 Total Investment Securities, at fair value $ 1,382,027 $ 1,309,826 Certificates of Deposit, at contract value 54,856 122,890 Total Investment Securities and Certificates of Deposit $ 1,436,883 $ 1,432,716 Debt Securities Debt Securities are classified as available-for-sale securities within Investment Securities and Certificates of Deposit on the Consolidated Statements of Financial Condition. These securities are stated at fair value with unrealized gains and losses included in Accumulated Other Comprehensive Income (Loss) on the Consolidated Statements of Financial Condition and realized gains and losses included in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations, on a specific identification basis. Gross unrealized gains included in Accumulated Other Comprehensive Income (Loss) were $ 419 , $ 6,760 and $ 29 for the years ended December 31, 2023, 2022 and 2021, respectively. Gross unrealized losses included in Accumulated Other 73 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Comprehensive Income (Loss) were ($ 280 ), ($ 2,301 ) and ($ 36 ) for the years ended December 31, 2023, 2022 and 2021, respectively. Gross realized losses included within Other Revenue, Including Interest and Investments, were ($ 261 ), ($ 34 ) and ($ 11 ) for the years ended December 31, 2023, 2022 and 2021, respectively. Proceeds from the sales and maturities of available-for-sale securities, including interest, were $ 1,772,642 , $ 1,415,291 and $ 814,800 for the years ended December 31, 2023, 2022 and 2021, respectively. Scheduled maturities of the Company's available-for-sale debt securities as of December 31, 2023 and 2022 were as follows: December 31, 2023 December 31, 2022 Amortized Cost Fair Value Amortized Cost Fair Value Due within one year $ 743,198 $ 743,338 $ 800,710 $ 805,190 Due after one year through five years 980 977 1,942 1,945 Total $ 744,178 $ 744,315 $ 802,652 $ 807,135 The Company has the ability and intent to hold available-for-sale securities until a recovery of fair value is equal to an amount approximating its amortized cost, which may be at maturity. Further, the securities are all U.S. Treasuries and the Company has not incurred credit losses on its securities. As such, the Company does not consider these securities to be impaired at December 31, 2023 and has not recorded a credit allowance on these securities. Equity Securities Equity Securities are carried at fair value with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations. The Company had net realized and unrealized gains (losses) of $ 41 , ($ 525 ) and $ 1,156 for the years ended December 31, 2023, 2022 and 2021, respectively. Debt Securities Carried by EGL EGL invests in a fixed income portfolio consisting primarily of U.S. Treasury bills. These securities are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations, as required for broker-dealers in securities. The Company had net realized and unrealized gains of $ 216 , $ 1,777 and $ 6 for the years ended December 31, 2023, 2022 and 2021, respectively. Investment Funds The Company invests in a portfolio of exchange-traded funds as an economic hedge against its deferred cash compensation program. See Note 18 for further information. These securities are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations. The Company had net realized and unrealized gains (losses) of $ 31,724 , ($ 29,778 ) and $ 29,025 for the years ended December 31, 2023, 2022 and 2021, respectively (of which $ 26,342 , ($ 45,619 ) and $ 19,470 , respectively, were net unrealized gains (losses)). Certificates of Deposit At December 31, 2023 and 2022, the Company held certificates of deposit of $ 54,856 and $ 122,890 , respectively, with certain banks with original maturities of four months or less when purchased. Note 9 – Leases Operating Leases – The Company leases office space under non-cancelable lease agreements, which expire on various dates through 2035. The Company reflects lease expense over the lease terms on a straight-line basis. The lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. Occupancy lease agreements, in addition to base rentals, generally are subject to escalation provisions based on certain costs incurred by the landlord. The Company does not have any leases with variable lease payments. Occupancy and Equipment Rental on the Consolidated Statements of Operations includes operating lease cost for office space of $ 56,202 , $ 51,913 and $ 49,580 for the years ended December 31, 2023, 2022 and 2021, respectively, and variable lease cost, which principally include costs for real 74 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) estate taxes, common area maintenance and other operating expenses of $ 5,548 , $ 6,563 and $ 6,062 for the years ended December 31, 2023, 2022 and 2021, respectively. In conjunction with the lease of office space, the Company has entered into letters of credit in the amount of $ 5,757 and $ 5,637 as of December 31, 2023 and 2022, respectively, which are secured by cash that is included in Other Assets on the Consolidated Statements of Financial Condition. The Company has entered into various operating leases for the use of office equipment (primarily computers, printers, copiers and other information technology related equipment). Occupancy and Equipment Rental on the Consolidated Statements of Operations includes operating lease cost for office equipment of $ 5,663 , $ 5,316 and $ 5,193 for the years ended December 31, 2023, 2022 and 2021, respectively. The Company uses its secured incremental borrowing rate to determine the present value of its right-of-use assets and lease liabilities. The determination of an appropriate incremental borrowing rate requires significant assumptions and judgment. The Company's incremental borrowing rate was calculated based on the Company's recent debt issuances and current market conditions. The Company scales the rates appropriately depending on the life of the leases. The Company incurred net operating cash outflows of $ 46,030 , $ 57,456 and $ 45,886 for the years ended December 31, 2023, 2022 and 2021, respectively, related to its operating leases, which was net of cash received from lease incentives of $ 5,599 , $ 3,412 and $ 9,216 for the years ended December 31, 2023, 2022 and 2021, respectively. Other information as it relates to the Company's operating leases is as follows: For the Years Ended December 31, 2023 2022 New Right-of-Use Assets obtained in exchange for new operating lease liabilities $ 182,039 $ 20,666 December 31, 2023 2022 Weighted-average remaining lease term - operating leases 10.7 years 10.4 years Weighted-average discount rate - operating leases 4.56 % 3.92 % In 2023, the Company's lease for certain floors at 55 East 52nd St., New York, New York commenced. The lease term will end on December 31, 2035. In December 2022, the Company entered into a lease agreement to take on 38 rentable square feet in New York, New York. The Company's lease of this space commenced in January 2023 and the lease term will end on December 31, 2035. New Right-of-Use Assets obtained in exchange for new operating lease liabilities above for the year ended December 31, 2023 includes $ 174,415 related to these spaces. As of December 31, 2023, the maturities of the undiscounted operating lease liabilities for which the Company has commenced use are as follows: 75 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) 2024 $ 47,401 2025 66,688 2026 63,971 2027 50,123 2028 48,660 Thereafter 337,895 Total lease payments 614,738 Less: Tenant Improvement Allowances ( 8,098 ) Less: Imputed Interest ( 136,134 ) Present value of lease liabilities 470,506 Less: Current lease liabilities ( 36,259 ) Long-term lease liabilities $ 434,247 The Company has entered into certain lease agreements which have not yet commenced and thus are not yet included on the Company's Consolidated Statements of Financial Condition as right-of-use assets and lease liabilities. The Company anticipates that these leases will commence in 2024 and will have lease terms of 7 years once they have commenced. The additional future payments under these arrangements are $ 1,314 as of December 31, 2023. Further, in conjunction with its lease agreements at 55 East 52nd St., New York, New York, the Company had an option to take on an additional three floors, which it exercised during 2023. The Company entered into a lease agreement for this space in January 2024 and anticipates that it will take possession of this space by the end of 2024. The lease term will end on December 31, 2035. The expected additional annual expense under this lease agreement, net of certain lease incentives, is $ 9,862 and the expected additional future payments are $ 110,124 . Note 10 – Investments The Company's investments reported on the Consolidated Statements of Financial Condition consist of investments in unconsolidated affiliated companies, other investments in private equity partnerships and equity securities in private companies. The Company's investments are relatively high-risk and illiquid assets. The Company's investments in ABS, Atalanta Sosnoff, Luminis and Seneca Evercore are in voting interest entities. The Company's share of earnings (losses) from these investments is included within Income from Equity Method Investments on the Consolidated Statements of Operations. The Company also has investments in private equity partnerships which consist of investment interests in private equity funds which are voting interest entities. Realized and unrealized gains and losses on private equity investments are included within Other Revenue, Including Interest and Investments, on the Consolidated Statements of Operations. Equity Method Investments A summary of the Company's investments accounted for under the equity method of accounting as of December 31, 2023 and 2022 was as follows: December 31, 2023 2022 ABS $ 18,770 $ 19,387 Atalanta Sosnoff 10,906 10,717 Luminis 6,296 6,092 Seneca Evercore 904 706 Total $ 36,876 $ 36,902 76 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) ABS The Company has an investment accounted for under the equity method of accounting in ABS. At December 31, 2023, the Company's ownership interest in ABS was 26 %. This investment resulted in earnings of $ 4,132 , $ 4,463 and $ 10,524 for the years ended December 31, 2023, 2022 and 2021, respectively, included within Income from Equity Method Investments on the Consolidated Statements of Operations. In January 2022, the Company entered into an agreement to sell a portion of its interest in ABS. This transaction closed on March 28, 2022 and resulted in the reduction of the Company's ownership interest from 46 % to 26 %. The Company received cash of $ 18,300 as consideration for its interests sold and recorded a gain of $ 1,294 for the year ended December 31, 2022, included within Other Revenue, Including Interest and Investments, on the Consolidated Statement of Operations. Atalanta Sosnoff The Company has an investment accounted for under the equity method of accounting in Atalanta Sosnoff. At December 31, 2023, the Company's ownership interest in Atalanta Sosnoff was 49 %. This investment resulted in earnings of $ 1,903 , $ 2,319 and $ 2,300 for the years ended December 31, 2023, 2022 and 2021, respectively, included within Income from Equity Method Investments on the Consolidated Statements of Operations. Luminis The Company has an investment accounted for under the equity method of accounting in Luminis. At December 31, 2023, the Company's ownership interest in Luminis was 20 %. This investment resulted in earnings of $ 390 , $ 813 and $ 1,334 for the years ended December 31, 2023, 2022 and 2021, respectively, included within Income from Equity Method Investments on the Consolidated Statements of Operations. This investment is subject to currency translation from the Australian dollar to the U.S. dollar, included in Accumulated Other Comprehensive Income (Loss), on the Consolidated Statements of Financial Condition . Seneca Evercore The Company has an investment accounted for under the equity method of accounting in Seneca Evercore. At December 31, 2023, the Company's ownership interest in Seneca Evercore was 20 %. This investment resulted in earnings of $ 230 , $ 404 and $ 3 for the years ended December 31, 2023, 2022 and 2021, respectively, included within Income from Equity Method Investments on the Consolidated Statements of Operations. This investment is subject to currency translation from the Brazilian real to the U.S. dollar, included in Accumulated Other Comprehensive Income (Loss), on the Consolidated Statements of Financial Condition . Other The Company allocates the purchase price of its equity method investments, in part, to the inherent finite-lived identifiable intangible assets of the investees. The Company's share of the earnings of the investees has been reduced by the amortization of these identifiable intangible assets of $ 316 for each of the years ended December 31, 2023, 2022 and 2021. The Company assesses each of its equity method investments for impairment annually, or more frequently if circumstances indicate impairment may have occurred. Debt Security Investment On December 31, 2017, the Company exchanged all of its outstanding equity interests in G5 for debentures of G5. The Company recorded this investment as a held-to-maturity debt security within Investments on the Consolidated Statement of Financial Condition. On June 25, 2021, G5 repaid its outstanding debentures with the Company in full, resulting in a gain of $ 4,374 , included in Other Revenue, Including Interest and Investments, on the Consolidated Statement of Operations for the year ended December 31, 2021. Investments in Private Equity Private Equity Funds The Company's investments related to private equity partnerships and associated entities include investments in Glisco Partners II, L.P. ("Glisco II"), Glisco Partners III, L.P. ("Glisco III"), Glisco Capital Partners IV ("Glisco IV"), Trilantic Capital Partners Associates IV, L.P. ("Trilantic IV"), Trilantic Capital Partners V, L.P. ("Trilantic V") and Trilantic Capital Partners VI 77 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) (North America), L.P. ("Trilantic VI") (through January 1, 2022). Portfolio holdings of the private equity funds are carried at fair value. Accordingly, the Company reflects its pro rata share of unrealized gains and losses occurring from changes in fair value. Additionally, the Company reflects its pro rata share of realized gains, losses and carried interest associated with any investment realizations. A summary of the Company's investments in the private equity funds as of December 31, 2023 and 2022 was as follows: December 31, 2023 2022 Glisco II, Glisco III and Glisco IV $ 4,141 $ 3,602 Trilantic IV and Trilantic V 1,766 1,939 Total Private Equity Funds $ 5,907 $ 5,541 Net realized and unrealized gains (losses) on private equity fund investments were $ 946 , $ 347 and ($ 1,059 ) for the years ended December 31, 2023, 2022 and 2021, respectively. In the event the funds perform poorly, the Company may be obligated to repay certain carried interest previously distributed. As of December 31, 2023, $ 147 of previously distributed carried interest received from the funds was subject to repayment. On December 14, 2021, the Company entered into an agreement to sell its interests in Trilantic VI for $ 9,188 (see "Investment in Trilantic Capital Partners" below). Consideration for this transaction was received in December 2021. This transaction closed on January 1, 2022 and as of that date, the Company has no further commitments to invest in Trilantic VI. General Partners of Private Equity Funds which are VIEs The Company has concluded that Glisco Capital Partners II, Glisco Capital Partners III and Glisco Manager Holdings LP are VIEs and that the Company is not the primary beneficiary of these VIEs. The Company's assessment of the primary beneficiary of these entities included assessing which parties have the power to significantly impact the economic performance of these entities and the obligation to absorb losses, which could be potentially significant to the entities, or the right to receive benefits from the entities that could be potentially significant. Neither the Company nor its related parties will have the ability to make decisions that significantly impact the economic performance of these entities. Further, as a limited partner in these entities, the Company does not possess substantive participating rights. The Company had assets of $ 3,580 and $ 3,166 included in its Consolidated Statements of Financial Condition at December 31, 2023 and 2022, respectively, related to these unconsolidated VIEs, representing the carrying value of the Company's investments in the entities. The Company's exposure to the obligations of these VIEs is generally limited to its investments in these entities. The Company's maximum exposure to loss as of December 31, 2023 and 2022 was $ 5,762 and $ 5,385 , respectively, which represents the carrying value of the Company's investments in these VIEs, as well as any unfunded commitments to the current and future funds. Investment in Trilantic Capital Partners During 2021, consistent with the Company's investment strategy, the Company decided to wind-down its investment relationship with Trilantic. Accordingly, the Company wrote-off the remaining carrying value of its investment in Trilantic and related assets. As a result, the Company recorded an aggregate charge of $ 8,554 within Special Charges, Including Business Realignment Costs, on the Consolidated Statement of Operations for the year ended December 31, 2021. See above in "Investments in Private Equity" for further information. Other Investments In certain instances, the Company receives equity securities in private companies in exchange for advisory services. These investments, which had a balance of $ 636 and $ 604 as of December 31, 2023 and 2022, respectively, are accounted for at their cost minus impairment, if any, plus or minus changes resulting from observable price changes. Note 11 – Fair Value Measurements ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820") establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily-available active quoted prices, or for which fair value can be measured from actively 78 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) quoted prices, generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following categories: Level 1 – Quoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level 1 include listed equities, listed derivatives and treasury bills and notes. As required by ASC 820, the Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price. Level 2 – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Periodically, the Company holds investments in corporate bonds, municipal bonds and other debt securities, the estimated fair values of which are based on prices provided by external pricing services. The Company also periodically holds foreign exchange currency forward contracts, the estimated fair value of which is based on foreign currency exchange rates provided by external services. Level 3 – Pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation. The following table presents the categorization of investments and certain other financial assets measured at fair value on a recurring basis as of December 31, 2023 and 2022: December 31, 2023 Level 1 Level 2 Level 3 Total Debt Securities Carried by EGL $ 476,778 $ — $ — $ 476,778 Other Debt and Equity Securities (1) 753,247 — — 753,247 Investment Funds 160,559 — — 160,559 Other — 1,585 — 1,585 Total Assets Measured At Fair Value $ 1,390,584 $ 1,585 $ — $ 1,392,169 December 31, 2022 Level 1 Level 2 Level 3 Total Debt Securities Carried by EGL $ 365,638 $ — $ — $ 365,638 Other Debt and Equity Securities (1) 815,409 — — 815,409 Investment Funds 136,718 — — 136,718 Total Assets Measured At Fair Value $ 1,317,765 $ — $ — $ 1,317,765 (1) Includes $ 8,557 and $ 7,939 of treasury bills classified within Cash and Cash Equivalents on the Consolidated Statements of Financial Condition as of December 31, 2023 and 2022, respectively. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. The carrying amount and estimated fair value of the Company's financial instrument assets and liabilities, which are not measured at fair value on the Consolidated Statements of Financial Condition, are listed in the tables below. 79 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) December 31, 2023 Carrying Estimated Fair Value Amount Level 1 Level 2 Level 3 Total Financial Assets: Cash and Cash Equivalents $ 588,321 $ 588,321 $ — $ — $ 588,321 Certificates of Deposit 54,856 — 54,856 — 54,856 Receivables (1) 465,295 — 461,682 — 461,682 Contract Assets (2) 91,246 — 90,876 — 90,876 Closely-held Equity Securities 636 — — 636 636 Financial Liabilities: Accounts Payable and Accrued Expenses $ 25,989 $ — $ 25,989 $ — $ 25,989 Payable to Employees and Related Parties 45,838 — 45,838 — 45,838 Notes Payable 373,885 — 360,252 — 360,252 December 31, 2022 Carrying Estimated Fair Value Amount Level 1 Level 2 Level 3 Total Financial Assets: Cash and Cash Equivalents $ 655,461 $ 655,461 $ — $ — $ 655,461 Certificates of Deposit 122,890 — 122,890 — 122,890 Receivables (1) 449,270 — 447,051 — 447,051 Contract Assets (2) 118,496 — 117,701 — 117,701 Closely-held Equity Securities 604 — — 604 604 Financial Liabilities: Accounts Payable and Accrued Expenses $ 28,807 $ — $ 28,807 $ — $ 28,807 Payable to Employees and Related Parties 41,235 — 41,235 — 41,235 Notes Payable 371,774 — 349,955 — 349,955 (1) Includes Accounts Receivable, as well as long-term receivables, which are included in Other Assets on the Consolidated Statements of Financial Condition. (2) Includes current and long-term contract assets included in Other Current Assets and Other Assets on the Consolidated Statements of Financial Condition. Note 12 – Furniture, Equipment and Leasehold Improvements Furniture, Equipment and Leasehold Improvements consisted of the following as of December 31, 2023 and 2022: December 31, 2023 2022 Furniture and Equipment $ 97,822 $ 89,208 Leasehold Improvements 203,060 187,045 Computer and Technology-related 49,987 54,092 Total 350,869 330,345 Less: Accumulated Depreciation and Amortization ( 212,929 ) ( 187,077 ) Furniture, Equipment and Leasehold Improvements, Net $ 137,940 $ 143,268 Depreciation and amortization expense for Furniture, Equipment and Leasehold Improvements totaled $ 24,348 , $ 27,377 and $ 27,737 for the years ended December 31, 2023, 2022 and 2021, respectively. Other Assets on the Consolidated Statements of Financial Condition includes capitalized costs associated with cloud computing arrangements of $ 17,044 and $ 11,437 as of December 31, 2023 and 2022, respectively. Amortization expense for capitalized costs associated with cloud computing arrangements was $ 2,631 , $ 1,670 and $ 1,245 for the years ended December 80 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) 31, 2023, 2022 and 2021, respectively, included within Communications and Information Services on the Consolidated Statements of Operations. Note 13 – Notes Payable 2016 Private Placement Notes On March 30, 2016, the Company issued an aggregate of $ 170,000 of senior notes, including: $ 38,000 aggregate principal amount of its 4.88 % Series A senior notes which were due March 30, 2021 (the "Series A Notes"), $ 67,000 aggregate principal amount of its Series B Notes which were originally due March 30, 2023, $ 48,000 aggregate principal amount of its 5.48 % Series C senior notes due March 30, 2026 (the "Series C Notes") and $ 17,000 aggregate principal amount of its 5.58 % Series D senior notes due March 30, 2028 (the "Series D Notes" and together with the Series A Notes, the Series B Notes and the Series C Notes, the "2016 Private Placement Notes"), pursuant to a note purchase agreement (the "2016 Note Purchase Agreement") dated as of March 30, 2016, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933. Interest on the 2016 Private Placement Notes is payable semi-annually and the 2016 Private Placement Notes are guaranteed by certain of the Company's domestic subsidiaries. The Company may, at its option, prepay all, or from time to time any part of, the 2016 Private Placement Notes (without regard to Series), in an amount not less than 5 % of the aggregate principal amount of the 2016 Private Placement Notes then outstanding at 100 % of the principal amount thereof plus an applicable "make-whole amount." Upon the occurrence of a change of control, the holders of the 2016 Private Placement Notes will have the right to require the Company to prepay the entire unpaid principal amounts held by each holder of the 2016 Private Placement Notes plus accrued and unpaid interest to the prepayment date. The 2016 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio, a minimum tangible net worth and a minimum interest coverage ratio, and customary events of default. As of December 31, 2023, the Company was in compliance with all of these covenants. In March 2021, the Company repaid the $ 38,000 aggregate principal amount of its Series A Notes. On June 28, 2022, the Company prepaid the $ 67,000 aggregate principal amount of its 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, the Company recorded a loss of $ 456 for the year ended December 31, 2022, included within Special Charges, Including Business Realignment Costs, on the Consolidated Statement of Operations. 2019 Private Placement Notes On August 1, 2019, the Company issued $ 175,000 and £ 25,000 of senior unsecured notes through private placement. These notes reflect a weighted average life of 12 years and a weighted average stated interest rate of 4.26 %. These notes include: $ 75,000 aggregate principal amount of its 4.34 % Series E senior notes due August 1, 2029 (the "Series E Notes"), $ 60,000 aggregate principal amount of its 4.44 % Series F senior notes due August 1, 2031 (the "Series F Notes"), $ 40,000 aggregate principal amount of its 4.54 % Series G senior notes due August 1, 2033 (the "Series G Notes") and £ 25,000 aggregate principal amount of its 3.33 % Series H senior notes due August 1, 2033 (the "Series H Notes" and together with the Series E Notes, the Series F Notes and the Series G Notes, the "2019 Private Placement Notes"), each of which were issued pursuant to a note purchase agreement dated as of August 1, 2019 (the "2019 Note Purchase Agreement"), among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933. Interest on the 2019 Private Placement Notes is payable semi-annually and the 2019 Private Placement Notes are guaranteed by certain of the Company's domestic subsidiaries. The Company may, at its option, prepay all, or from time to time any part of, the 2019 Private Placement Notes (without regard to Series), in an amount not less than 5 % of the aggregate principal amount of the 2019 Private Placement Notes then outstanding at 100 % of the principal amount thereof plus an applicable "make-whole amount." Upon the occurrence of a change of control, the holders of the 2019 Private Placement Notes will have the right to require the Company to prepay the entire unpaid principal amounts held by each holder of the 2019 Private Placement Notes plus accrued and unpaid interest to the prepayment date. The 2019 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio and a minimum tangible net worth, and customary events of default. As of December 31, 2023, the Company was in compliance with all of these covenants. 81 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) 2021 Private Placement Notes On March 29, 2021, the Company issued $ 38,000 aggregate principal amount of its 1.97 % Series I senior notes due August 1, 2025 (the "Series I Notes" or the "2021 Private Placement Notes"), pursuant to a note purchase agreement (the "2021 Note Purchase Agreement") dated as of March 29, 2021, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933. Interest on the 2021 Private Placement Notes is payable semi-annually and the 2021 Private Placement Notes are guaranteed by certain of the Company's domestic subsidiaries. The Company may, at its option, prepay all, or from time to time any part of, the 2021 Private Placement Notes, in an amount not less than 5 % of the aggregate principal amount of the 2021 Private Placement Notes then outstanding at 100 % of the principal amount thereof plus an applicable "make-whole amount." Upon the occurrence of a change of control, the holders of the 2021 Private Placement Notes will have the right to require the Company to prepay the entire unpaid principal amounts held by each holder of the 2021 Private Placement Notes plus accrued and unpaid interest to the prepayment date. The 2021 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio and a minimum tangible net worth, and customary events of default. As of December 31, 2023, the Company was in compliance with all of these covenants. 2022 Private Placement Notes On June 28, 2022, the Company issued $ 67,000 aggregate principal amount of its 4.61 % Series J senior notes due November 15, 2028 (the "Series J Notes" or the "2022 Private Placement Notes"), pursuant to a note purchase agreement (the "2022 Note Purchase Agreement") dated as of June 28, 2022, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933. Interest on the 2022 Private Placement Notes is payable semi-annually and the 2022 Private Placement Notes are guaranteed by certain of the Company's domestic subsidiaries. The Company may, at its option, prepay all, or from time to time any part of, the 2022 Private Placement Notes, in an amount not less than 5 % of the aggregate principal amount of the 2022 Private Placement Notes then outstanding at 100 % of the principal amount thereof plus an applicable "make-whole amount." Upon the occurrence of a change of control, the holders of the 2022 Private Placement Notes will have the right to require the Company to prepay the entire unpaid principal amounts held by each holder of the 2022 Private Placement Notes plus accrued and unpaid interest to the prepayment date. The 2022 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio and a minimum tangible net worth, and customary events of default. As of December 31, 2023, the Company was in compliance with all of these covenants. Notes Payable is comprised of the following as of December 31, 2023 and 2022: Carrying Value (1) at December 31, Note Maturity Date Effective Annual Interest Rate 2023 2022 Evercore Inc. 5.48 % Series C Senior Notes 3/30/2026 5.64 % $ 47,838 $ 47,772 Evercore Inc. 5.58 % Series D Senior Notes 3/30/2028 5.72 % 16,910 16,891 Evercore Inc. 4.34 % Series E Senior Notes 8/1/2029 4.46 % 74,546 74,470 Evercore Inc. 4.44 % Series F Senior Notes 8/1/2031 4.55 % 59,589 59,545 Evercore Inc. 4.54 % Series G Senior Notes 8/1/2033 4.64 % 39,703 39,679 Evercore Inc. 3.33 % Series H Senior Notes 8/1/2033 3.42 % 31,597 30,003 Evercore Inc. 1.97 % Series I Senior Notes 8/1/2025 2.20 % 37,867 37,785 Evercore Inc. 4.61 % Series J Senior Notes 11/15/2028 5.02 % 65,835 65,629 Total $ 373,885 $ 371,774 (1) Carrying value has been adjusted to reflect the presentation of debt issuance costs as a direct reduction from the related liability. As of December 31, 2023, the future payments required on the Notes Payable, including principal and interest, were as follows: 82 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) 2024 $ 16,211 2025 54,024 2026 62,147 2027 12,832 2028 96,358 Thereafter 230,249 Total $ 471,821 Note 14 – Employee Benefit Plans Defined Contribution Retirement Plan – The Company, through a subsidiary, provides certain retirement benefits to employees through a qualified retirement plan. The Evercore Partners Services East L.L.C. Retirement Plan (the "Evercore Plan") is a defined contribution plan with a salary deferral feature under Section 401(k) of the Internal Revenue Code. It also includes a discretionary profit sharing feature. The Evercore Plan was formed on February 1, 1996 and subsequently amended. The Evercore Plan's year ends on December 31 of each year. The Company, at its sole discretion, determines the amount, if any, of profit to be contributed to the Evercore Plan. The Evercore Plan provides for a discretionary matching contribution from the Company to be made for eligible participants, as defined by the Evercore Plan. The matching contribution from the Company is made annually pursuant to a discretionary formula. The matching contribution is determined as 100 % of up to 3 % of eligible compensation, defined as salary plus cash bonus compensation, to a maximum of $ 3 per employee. Catch-up contributions are not matched. Participants vest 100 % in the discretionary matching contribution from the Company upon completion of three years of service. The Company made contributions to the Evercore Plan of $ 2,533 , $ 2,188 and $ 2,032 for the years ended December 31, 2023, 2022 and 2021, respectively. Evercore Europe Defined Contribution Benefit Plan – Evercore U.K. provides a defined contribution benefit plan, the Evercore Partners International Group Personal Pension Plan (the "Evercore Europe Plan"), for Evercore U.K. employees and members. The Evercore Europe Plan was established in November 2006 and subsequently amended. The Evercore Europe Plan, for employees starting between November 2006 and July 2011, has a salary deferral feature as permitted under existing tax guidelines for HM Customs and Revenue, the Inland Revenue Service in the United Kingdom. Evercore U.K. employees must have elected to participate in the plan prior to July 2011, and Evercore U.K. has a minimum annualized contribution of 15 % to 50 % of an employee's salary for all the employees who participated, depending on the respective employee's level within the Company. These employees are also eligible to contribute up to 10 % of their salary to the Evercore Europe Plan and, under the terms of the Evercore Europe Plan, if an employee contributes a minimum of 7.5 % to 10 % of their salary to the plan, Evercore U.K. must make a matching contribution of 5 % to 10 % of the employee's salary depending on the employee's level within the Company. The Evercore Europe Plan, for employees starting after July 2011, has a salary deferral feature as permitted under existing tax guidelines for HM Customs and Revenue. Evercore U.K. has a minimum annualized contribution of 15 % of an employee's salary. Employees are also eligible to contribute a percentage of their salary to the Evercore Europe Plan, however, any contribution made does not entitle them to a matching contribution from Evercore U.K. The Company made contributions to the Evercore Europe Plan of $ 4,580 , $ 3,968 and $ 3,688 for the years ended December 31, 2023, 2022 and 2021, respectively. Evercore ISI U.K. Personal Pension Plan – For employees of Evercore ISI U.K., a personal pension plan is available for all employees to contribute a percentage of their salary. The Company contributes up to 9 % of an employee's salary. The Company made contributions to the Evercore ISI U.K. Personal Pension Plan of $ 57 , $ 45 and $ 74 for the years ended December 31, 2023, 2022 and 2021, respectively. Contributions to the various plans are recorded in Employee Compensation and Benefits on the Consolidated Statements of Operations and accrued in Accrued Compensation and Benefits on the Consolidated Statements of Financial Condition. In addition, the Company offers separation and transition and certain other benefits. See Note 18 for further information. 83 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Self-Funded Medical Insurance Program – Effective January 1, 2023, the Company changed its medical insurance plan in the U.S. from a fully insured to a self-funded plan. The Company is liable for the funding of claims under the self-funded plan. The Company also maintains stop-loss insurance for its medical plan to provide coverage for claims over a defined financial threshold. The estimated present value of incurred but not reported claims is $ 3,165 as of December 31, 2023, which is included within Accrued Compensation and Benefits on the Consolidated Statement of Financial Condition. Note 15 – Evercore Inc. Stockholders' Equity Dividends – On January 30, 2024, the Company's Board of Directors declared a quarterly cash dividend of $ 0.76 per share to the holders of record of Class A Shares as of February 23, 2024, which will be paid on March 8, 2024. During the year ended December 31, 2023, the Company declared and paid dividends of $ 3.00 per share, totaling $ 113,867 , and accrued deferred cash dividends on unvested RSUs totaling $ 17,054 . During the year ended December 31, 2023, the Company also paid deferred cash dividends of $ 13,997 . During the year ended December 31, 2022, the Company declared and paid dividends of $ 2.84 per share, totaling $ 111,568 , and accrued deferred cash dividends on unvested RSUs totaling $ 15,236 . During the year ended December 31, 2022, the Company also paid deferred cash dividends of $ 15,689 . Treasury Stock – During the year ended December 31, 2023, the Company purchased 968 Class A Shares from employees at an average cost per share of $ 131.53 , primarily for the net settlement of stock-based compensation awards, and 2,033 Class A Shares at an average cost per share of $ 127.85 pursuant to the Company's share repurchase program. The aggregate 3,001 Class A Shares were purchased at an average cost per share of $ 129.04 and the result of these purchases was an increase in Treasury Stock of $ 387,286 on the Company's Consolidated Statement of Financial Condition as of December 31, 2023. During the year ended December 31, 2022, the Company purchased 1,011 Class A Shares from employees at an average cost per share of $ 127.02 , primarily for the net settlement of stock-based compensation awards, and 3,427 Class A Shares at an average cost per share of $ 114.39 pursuant to the Company's share repurchase program. The aggregate 4,438 Class A Shares were purchased at an average cost per share of $ 117.27 and the result of these purchases was an increase in Treasury Stock of $ 520,465 on the Company's Consolidated Statement of Financial Condition as of December 31, 2022. LP Units – During the year ended December 31, 2023, 178 LP Units were exchanged for Class A Shares, resulting in an increase to Class A Common Stock and Additional Paid-In Capital of $ 2 and $ 11,488 , respectively, on the Company's Consolidated Statement of Financial Condition as of December 31, 2023. During the year ended December 31, 2022, 2,574 LP Units were exchanged for Class A Shares, resulting in an increase to Class A Common Stock and Additional Paid-In Capital of $ 26 and $ 159,386 , respectively, on the Company's Consolidated Statement of Financial Condition as of December 31, 2022. See Notes 16 and 21 for further information. Accumulated Other Comprehensive Income (Loss) – As of December 31, 2023, Accumulated Other Comprehensive Income (Loss) on the Company's Consolidated Statement of Financial Condition includes an accumulated Unrealized Gain (Loss) on Securities and Investments, net, and Foreign Currency Translation Adjustment Gain (Loss), net, of ($ 5,269 ) and ($ 21,269 ), respectively. Note 16 – Noncontrolling Interest Noncontrolling Interest recorded in the consolidated financial statements of the Company relates to the following approximate interests in certain consolidated subsidiaries, which are not owned by the Company. In circumstances where the governing documents of the entity to which the noncontrolling interest relates require special allocations of profits or losses to the controlling and noncontrolling interest holders, the net income or loss of these entities is allocated based on these special allocations. Noncontrolling ownership interests for the Company's subsidiaries were as follows: 84 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) As of December 31, 2023 2022 2021 Evercore LP (1) 7 % 6 % 11 % Evercore Wealth Management ("EWM") (2) 26 % 26 % 26 % (1) On February 24, 2022, 2,545 Class E LP Units were exchanged for 2,545 Class A Shares, which resulted in a decrease in noncontrolling interest of Evercore LP. For further information see " LP Units Exchanged" below. (2) Noncontrolling Interests as of December 31, 2022 and 2021 represent a blended rate for multiple classes of interests in EWM. The Noncontrolling Interests for Evercore LP and EWM have rights, in certain circumstances, to convert into Class A Shares. The Company has outstanding Class A, E, I and K LP Units in Evercore LP which give the holders the right to receive Class A Shares upon exchange on a one-for-one basis. See Note 2 for further information. Changes in Noncontrolling Interest for the years ended December 31, 2023, 2022 and 2021 were as follows: For the Years Ended December 31, 2023 2022 2021 Beginning balance $ 189,607 $ 314,910 $ 258,428 Comprehensive Income: Net Income Attributable to Noncontrolling Interest 29,744 54,895 128,457 Other Comprehensive Income (Loss) 112 ( 1,612 ) ( 447 ) Total Comprehensive Income 29,856 53,283 128,010 Evercore LP Units Exchanged for Class A Shares ( 11,490 ) ( 159,412 ) ( 12,306 ) Amortization and Vesting of LP Units 24,301 23,425 13,189 Other Items: Distributions to Noncontrolling Interests ( 27,293 ) ( 42,704 ) ( 67,865 ) Issuance of Noncontrolling Interest 733 300 2,958 Purchase of Noncontrolling Interest ( 158 ) ( 195 ) ( 7,504 ) Total Other Items ( 26,718 ) ( 42,599 ) ( 72,411 ) Ending balance $ 205,556 $ 189,607 $ 314,910 Other Comprehensive Income – Other Comprehensive Income (Loss) Attributed to Noncontrolling Interest includes unrealized gains (losses) on securities and investments, net, of ($ 268 ), $ 313 and ($ 49 ) for the years ended December 31, 2023, 2022 and 2021, respectively, and foreign currency translation adjustment gains (losses), net, of $ 380 , ($ 1,925 ) and ($ 398 ) for the years ended December 31, 2023, 2022 and 2021, respectively. LP Units Exchanged – On February 24, 2022, the Company entered into an agreement (the "Exchange Agreement") with ISI Holding, Inc. ("ISI Holding"), the principal stockholder of which is Ed Hyman, an executive officer of the Company. Pursuant to the Exchange Agreement, ISI Holding exercised its existing conversion rights under the terms of the partnership agreement of Evercore LP to exchange (the "Exchange") all 2,545 of the Class E LP Units owned by it for 2,545 Class A Shares. Following the Exchange, ISI Holding liquidated and distributed the Class A Shares received in the Exchange to its stockholders in accordance with their ownership interests in ISI Holding. The parties have relied on the exemption from the registration requirements of the Securities Act of 1933 under Section 4(a)(2) thereof for the Exchange. 85 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) During the year ended December 31, 2023, 178 LP Units were exchanged for Class A Shares. This resulted in a decrease to Noncontrolling Interest of $ 11,490 and increases to Class A Common Stock and Additional Paid-In Capital of $ 2 and $ 11,488 , respectively, on the Company's Consolidated Statement of Financial Condition as of December 31, 2023. In addition, 2,574 and 242 LP Units were exchanged for Class A Shares during the years ended December 31, 2022 and 2021, respectively. See Note 15 for further information. Interests Issued – During 2021, certain employees of EWM purchased EWM Class A Units, at fair value, resulting in an increase to Noncontrolling Interest of $ 1,175 on the Company's Consolidated Statement of Financial Condition as of December 31, 2021. During 2021, certain employees of RECA purchased Class R Interests of Private Capital Advisory L.P., at fair value, resulting in an increase to Noncontrolling Interest of $ 872 on the Company's Consolidated Statement of Financial Condition as of December 31, 2021. Interests Purchased – During 2023, the Company purchased, at fair value, an additional 0.7 % of the EWM Class A Units for $ 2,002 . This purchase resulted in a decrease to Noncontrolling Interest of $ 158 and a decrease to Additional Paid-In Capital of $ 1,844 on the Company's Consolidated Statement of Financial Condition as of December 31, 2023. During 2022, the Company purchased, at fair value, an additional 0.9 % of the EWM Class A Units for $ 3,154 . This purchase resulted in a decrease to Noncontrolling Interest of $ 195 and a decrease to Additional Paid-In Capital of $ 2,959 on the Company's Consolidated Statement of Financial Condition as of December 31, 2022. During 2021, the Company purchased, at fair value, an additional 1 % of the EWM Class A Units for $ 3,170 . This purchase resulted in a decrease to Noncontrolling Interest of $ 344 and a decrease to Additional Paid-In Capital of $ 2,826 on the Company's Consolidated Statement of Financial Condition as of December 31, 2021. On December 31, 2021, the Company purchased, at fair value, all of the outstanding Class R Interests of Private Capital Advisory L.P. from employees of the RECA business for $ 54,297 . Consideration for this transaction included the payment of $ 6,000 of cash in 2021, $ 27,710 of cash in 2022, and contingent cash consideration which is due to be settled in early 2024. The Company paid $ 1,365 of this contingent cash consideration in 2023. The fair value of the remaining contingent consideration is $ 2,023 as of December 31, 2023, which is included within Payable to Employees and Related Parties on the Company's Consolidated Statements of Financial Condition, and $ 6,119 as of December 31, 2022, $ 1,083 of which was included within Other Current Liabilities and the remainder of which was included within Other Long-term Liabilities on the Company's Consolidated Statements of Financial Condition. The amount of contingent consideration to be paid is dependent on the RECA business achieving certain revenue performance targets. The decline in the fair value of contingent consideration reduced Other Operating Expenses by $ 2,366 and $ 14,468 for the years ended December 31, 2023 and 2022, respectively, on the Consolidated Statements of Operations. 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. This purchase resulted in a decrease to Noncontrolling Interest of $ 7,137 and a decrease to Additional Paid-In Capital of $ 47,160 on the Company's Consolidated Statement of Financial Condition on December 31, 2021. In conjunction with this transaction, the Company also issued a payment in early 2023 and will issue another payment in early 2024, contingent on continued employment with the Company. Accordingly, these payments are treated as compensation expense for accounting purposes in the periods earned. These payments are also dependent on the RECA business achieving certain revenue performance targets. Note 17 – Net Income Per Share Attributable to Evercore Inc. Common Shareholders The calculations of basic and diluted net income per share attributable to Evercore Inc. common shareholders for the years ended December 31, 2023, 2022 and 2021 are described and presented below. 86 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) For the Years Ended December 31, 2023 2022 2021 Basic Net Income Per Share Attributable to Evercore Inc. Common Shareholders Numerator: Net income attributable to Evercore Inc. common shareholders $ 255,479 $ 476,520 $ 740,116 Denominator: Weighted average Class A Shares outstanding, including vested RSUs 38,101 39,224 40,054 Basic net income per share attributable to Evercore Inc. common shareholders $ 6.71 $ 12.15 $ 18.48 Diluted Net Income Per Share Attributable to Evercore Inc. Common Shareholders Numerator: Net income attributable to Evercore Inc. common shareholders $ 255,479 $ 476,520 $ 740,116 Noncontrolling interest related to the assumed exchange of LP Units for Class A Shares (1) — — — Associated corporate taxes related to the assumed elimination of Noncontrolling Interest described above (1) — — — Diluted net income attributable to Evercore Inc. common shareholders $ 255,479 $ 476,520 $ 740,116 Denominator: Weighted average Class A Shares outstanding, including vested RSUs 38,101 39,224 40,054 Assumed exchange of LP Units for Class A Shares (1) — — — Additional shares of the Company's common stock assumed to be issued pursuant to non-vested RSUs, as calculated using the Treasury Stock Method (2) 1,902 1,605 2,768 Shares that are contingently issuable (3) 96 208 499 Diluted weighted average Class A Shares outstanding 40,099 41,037 43,321 Diluted net income per share attributable to Evercore Inc. common shareholders $ 6.37 $ 11.61 $ 17.08 (1) The Company has outstanding Class A, E, I and K LP Units, which give the holders the right to receive Class A Shares upon exchange on a one -for-one basis. During the years ended December 31, 2023, 2022 and 2021, these LP Units were antidilutive and consequently the effect of their exchange into Class A Shares has been excluded from the calculation of diluted net income per share attributable to Evercore Inc. common shareholders. The units that would have been included in the denominator of the computation of diluted net income per share attributable to Evercore Inc. common shareholders if the effect would have been dilutive were 2,769 , 2,970 and 4,854 for the years ended December 31, 2023, 2022 and 2021, respectively. The adjustment to the numerator, diluted net income attributable to Class A common shareholders, if the effect would have been dilutive, would have been $ 20,442 , $ 43,520 and $ 92,797 for the years ended December 31, 2023, 2022 and 2021, respectively. In computing this adjustment, the Company assumes that all Class A, E, I and K LP Units are converted into Class A Shares, that all earnings attributable to those shares are attributed to Evercore Inc. and that the Company is subject to the statutory tax rates of a C-Corporation under a conventional corporate tax structure in the U.S. at prevailing corporate tax rates. The Company does not anticipate that the Class A, E, I and K LP Units will result in a dilutive computation in future periods. (2) During the year ended December 31, 2022, certain shares of the Company's common stock assumed to be issued pursuant to non-vested RSUs, as calculated using the Treasury Stock Method, were antidilutive and consequently the effect of their exchange into Class A Shares has been excluded from the calculation of diluted net income per share attributable to Evercore Inc. common shareholders. The shares that would have been included in the treasury stock method calculation if the effect would have been dilutive were 94 for the year ended December 31, 2022. (3) The Company previously had outstanding Class I-P Units which were contingently exchangeable into Class I LP Units, and ultimately Class A Shares, and has outstanding Class K-P Units which are contingently exchangeable into Class K LP 87 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Units, and ultimately Class A Shares, as they are subject to certain performance thresholds being achieved. On March 1, 2022, all of the Class I-P Units converted to Class I LP Units. See Note 18 for further information. For the purposes of calculating diluted net income per share attributable to Evercore Inc. common shareholders, the Company's Class I-P Units and Class K-P Units are included in diluted weighted average Class A Shares outstanding as of the beginning of the period in which all necessary performance conditions have been satisfied. If all necessary performance conditions have not been satisfied by the end of the period, the number of shares that are included in diluted weighted average Class A Shares outstanding is based on the number of shares that would be issuable if the end of the reporting period were the end of the performance period. The shares of Class B common stock have no right to receive dividends or a distribution on liquidation or winding up of the Company. The shares of Class B common stock do not share in the earnings of the Company and no earnings are allocable to such class. Accordingly, basic and diluted net income per share of Class B common stock have not been presented. Note 18 – Share-Based and Other Deferred Compensation LP Units Class I-P Units – In November 2016, the Company awarded 400 Class I-P Units in conjunction with the appointment of the Chief Executive Officer (then Executive Chairman). These Class I-P Units converted into 400 Class I LP Units (which are exchangeable on a one -for-one basis to Class A Shares) upon the achievement of certain market and service conditions on March 1, 2022. Compensation expense related to this award was $ 753 and $ 4,625 for the years ended December 31, 2022 and 2021, respectively . Class K-P Units – The Company has awarded the following Class K-P Units: • In November 2017, the Company awarded 64 Class K-P Units to an employee of the Company. These Class K-P Units converted into 80 Class K LP Units (which are exchangeable on a one -for-one basis to Class A Shares) upon the achievement of certain defined benchmark results relating to the employee's business and continued service through December 31, 2021. • In June 2019, the Company awarded 220 Class K-P Units to an employee of the Company. These Class K-P Units convert into a number of Class K LP Units (which are exchangeable on a one -for-one basis to Class A Shares) contingent and based upon the achievement of certain defined benchmark results relating to the employee's business and continued service through February 4, 2023 for the first tranche, which consists of 120 Class K-P Units, and February 4, 2028 for the second tranche, which consists of 100 Class K-P Units. In February 2023, the first tranche of 120 Class K-P Units converted into 193 Class K LP Units upon the achievement of certain performance and service conditions. The second tranche of these Class K-P Units may convert into a maximum of 173 Class K LP Units, contingent upon the achievement of defined benchmark results and continued service as described above. • In December 2021, the Company awarded 400 Class K-P Units to certain employees of the Company. These Class K-P Units convert into a number of Class K LP Units (which are exchangeable on a one -for-one basis to Class A Shares) contingent and based upon the achievement of certain market conditions, defined benchmark results and continued service through December 31, 2025. As this award contains market, performance and service conditions, the expense for this award will be recognized over the service period of the award and will reflect the fair value of the underlying units as determined at the award's grant date, taking into account the probable outcome of the market condition being achieved, as well as the probable outcome of the performance condition. These Class K-P Units may convert into a maximum of 800 Class K LP Units, contingent upon the achievement of certain market conditions, defined benchmark results and continued service as described above. • In December 2022, the Company awarded 200 Class K-P Units to an employee of the Company. These Class K-P Units are segregated into four tranches of 50 Class K-P Units each. The first three tranches convert into a number of Class K LP Units (which are exchangeable on a one -for-one basis to Class A Shares) contingent and based upon the achievement of certain market conditions and continued service through February 28, 2025, 2026 and 2027, respectively, while the final tranche converts into a number of Class K LP Units (which are exchangeable on a one -for-one basis to Class A Shares) contingent and based upon the achievement of certain market conditions, defined benchmark results relating to the employee's business and continued service through February 28, 2028. As this award contains market, performance and service conditions, the expense for this award will be 88 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) recognized over the service period of the award and will reflect the fair value of the underlying units as determined at the award's grant date, taking into account the probable outcome of the market condition being achieved, as well as the probable outcome of the performance condition. These Class K-P Units may convert into a maximum of 320 Class K LP Units, contingent upon the achievement of certain market conditions, defined benchmark results and continued service as described above. • In June 2023, the Company awarded 60 Class K-P Units to an employee of the Company. These Class K-P Units convert into a number of Class K LP Units (which are exchangeable on a one -for-one basis to Class A Shares) contingent and based upon the achievement of certain market conditions, defined benchmark results and continued service through June 30, 2027. As this award contains market, performance and service conditions, the expense for this award will be recognized over the service period of the award and will reflect the fair value of the underlying units as determined at the award's grant date, taking into account the probable outcome of the market condition being achieved, as well as the probable outcome of the performance condition. These Class K-P Units may convert into 60 Class K LP Units contingent upon the achievement of certain market conditions and continued service, while additional units may be received in conversion based on a multiple of certain revenues earned. The Company determined the grant date fair value of these awards probable to vest as of December 31, 2023 to be $ 103,636 , related to 889 Class K LP Units which were probable of achievement, and recognizes expense for these units over the respective service periods. Aggregate compensation expense related to the Class K-P Units was $ 24,058 , $ 22,672 and $ 8,564 for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the total compensation cost not yet recognized related to the Class K-P Units based on the value of units currently expected to vest was $ 57,553 . The weighted-average period over which this compensation cost is expected to be recognized is 31 months. Class L Interests – In April 2021, January 2022 and January 2023, the Company's Board of Directors approved the issuance of Class L Interests in Evercore LP ("Class L Interests") to certain of the named executive officers of the Company, pursuant to which the named executive officers received a discretionary distribution of profits from Evercore LP, paid in the first quarters of 2022, 2023 and 2024, respectively. Distributions pursuant to these interests are made in lieu of any cash incentive compensation payments which may otherwise have been made to the named executive officers of the Company in respect of their service for 2021, 2022 and 2023, respectively. Following the distributions, the Class L Interests are cancelled pursuant to their terms. The Company records expense related to these interests as part of its accrual for incentive compensation within Employee Compensation and Benefits on the Consolidated Statements of Operations. In January 2024, the Company's Board of Directors approved the issuance of Class L Interests to certain of the named executive officers of the Company, pursuant to which the named executive officers may receive a discretionary distribution of profits from Evercore LP, to be paid in the first quarter of 2025. Distributions pursuant to these interests are anticipated to be made in lieu of any cash incentive compensation payments which may otherwise have been made to the named executive officers of the Company in respect of their service for 2024. Stock Incentive Plan During 2022, the Company's stockholders approved the Second Amended and Restated 2016 Evercore Inc. Stock Incentive Plan (the "Second Amended 2016 Plan"), which amended the Amended and Restated 2016 Evercore Inc. Stock Incentive Plan (the "Amended 2016 Plan"). The Second Amended 2016 Plan, among other things, authorizes the grant of an additional 6,500 of the Company's Class A Shares. The Second Amended 2016 Plan permits the Company to grant to certain employees, directors and consultants incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, RSUs and other awards based on the Company's Class A Shares. The Company intends to use newly-issued Class A Shares to satisfy any awards under the Second Amended 2016 Plan and its predecessor plan. Class A Shares underlying any award granted under the Second Amended 2016 Plan that expire, terminate or are canceled or satisfied for any reason without being settled in stock again become available for awards under the plan. The total shares available to be granted in the future under the Second Amended 2016 Plan was 5,184 as of December 31, 2023, approximately 1,550 of which were used for RSUs granted in the first quarter of 2024, as described below. 89 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) The Company also grants, at its discretion, dividend equivalents, in the form of unvested RSU awards, or deferred cash dividends, concurrently with the payment of dividends to the holders of Class A Shares, on all unvested RSU grants. The dividend equivalents have the same vesting and delivery terms as the underlying RSU award. The Company estimates forfeitures in the aggregate compensation cost to be amortized over the requisite service period of its awards. The Company periodically monitors its estimated forfeiture rate and adjusts its assumptions to the actual occurrence of forfeited awards. A change in estimated forfeitures is recognized through a cumulative adjustment in the period of the change. The Company had 203 RSUs which were fully vested but not delivered as of December 31, 2023. Equity Grants 2023 Equity Grants. During 2023, pursuant to the Second Amended 2016 Plan, the Company granted employees 2,492 RSUs that are Service-based Awards. Service-based Awards granted during 2023 had grant date fair values of $ 107.89 to $ 148.49 per share, with an average value of $ 135.79 per share and generally vest ratably over four years . The following table summarizes activity related to Service-based Awards during the year ended December 31, 2023: Service-based Awards Number of Shares Grant Date Weighted Average Fair Value Unvested Balance at January 1, 2023 5,697 $ 644,073 Granted 2,492 338,363 Modified ( 1 ) ( 110 ) Forfeited ( 190 ) ( 23,827 ) Vested ( 2,325 ) ( 249,050 ) Unvested Balance at December 31, 2023 5,673 $ 709,449 Compensation expense related to Service-based Awards was $ 280,094 for the year ended December 31, 2023. As of December 31, 2023, the total compensation cost related to unvested Service-based Awards not yet recognized was $ 364,250 . The ultimate amount of such expense is dependent upon the actual number of Service-based Awards that vest. The Company periodically assesses the forfeiture rates used for such estimates. The weighted-average period over which this compensation cost is expected to be recognized is 31 months. 2022 Equity Grants. During 2022, the Company granted employees 2,978 RSUs that are Service-based Awards. Service-based Awards granted during 2022 had grant date fair values of $ 83.34 to $ 137.59 per share, with an average value of $ 123.74 per share, for an aggregate fair value of $ 368,561 . During 2022, 2,316 Service-based Awards vested and 184 Service-based Awards were forfeited. Compensation expense related to Service-based Awards was $ 247,386 for the year ended December 31, 2022 . 2021 Equity Grants. During 2021, the Company granted employees 2,166 RSUs that are Service-based Awards. Service-based Awards granted during 2021 had grant date fair values of $ 111.03 to $ 154.56 per share, with an average value of $ 119.86 per share, for an aggregate fair value of $ 259,551 . During 2021, 2,287 Service-based Awards vested and 184 Service-based Awards were forfeited. Compensation expense related to Service-based Awards was $ 211,298 for the year ended December 31, 2021 . Deferred Cash Deferred Cash Compensation Program – The Company's deferred cash compensation program provides participants the ability to elect to receive a portion of their deferred compensation in cash, which is indexed to notional investment portfolios selected by the participant and generally vests ratably over four years and requires payment upon vesting. The Company granted $ 162,748 , $ 123,729 and $ 96,511 of deferred cash awards pursuant to the deferred cash compensation program during the years ended December 31, 2023, 2022 and 2021, respectively. Compensation expense related to the Company's deferred cash compensation program was $ 151,141 , $ 119,737 and $ 130,767 for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the Company 90 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) expects to pay an aggregate of $ 366,918 related to the Company's deferred cash compensation program at various dates through 2027 and total compensation expense not yet recognized related to these awards was $ 180,002 . The weighted-average period over which this compensation cost is expected to be recognized is 31 months. Amounts due pursuant to this program are expensed over the service period of the award and are reflected in Accrued Compensation and Benefits on the Consolidated Statement of Financial Condition. Other Deferred Cash Awards – In November 2016, the Company granted a restricted cash award in conjunction with the appointment of the Chief Executive Officer (then Executive Chairman) with a payment amount of $ 35,000 , of which $ 11,000 vested on March 1, 2019 and $ 6,000 vested on each of March 1, 2020, 2021, 2022 and 2023, upon the achievement of service conditions. In 2017, the Company granted deferred cash awards of $ 29,500 to certain employees. These awards vested in five equal installments over the period ending June 30, 2022, subject to continued employment. The Company recognized expense for these awards ratably over the vesting period. During 2022, the Company granted $ 19,861 of deferred cash awards to certain employees. These awards vest ratably over one to two years . In addition, the Company periodically grants other deferred cash awards to certain employees. The Company recognizes expense for these awards ratably over the vesting period. Compensation expense related to other deferred cash awards was $ 11,922 , $ 14,409 and $ 10,595 for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the total compensation cost related to other defe rred cash awards not yet recognized was $ 13,416 . The weighted-average period over which this compensation cost is expected to be recognized is 29 months. 2024 Equity and Deferred Cash Grants During the first quarter of 2024, primarily as part of the 2023 annual awards, the Company granted to certain employees approximately 1,550 unvested RSUs pursuant to the Second Amended 2016 Plan, with a grant date fair value of approximately $ 283,000 . These awards will generally vest over four years . In addition, during the first quarter of 2024, the Company granted approximately $ 150,000 of deferred cash compensation to certain employees, principally pursuant to the deferred cash compensation program. These awards will generally vest over four years . Long-term Incentive Plan The Company's Long-term Incentive Plans provide for incentive compensation awards to Advisory Senior Managing Directors, excluding executive officers of the Company, who exceed defined benchmark results over four-year performance periods beginning January 1, 2017 (the "2017 Long-term Incentive Plan", which ended on December 31, 2020) and January 1, 2021 (the "2021 Long-term Incentive Plan", which was approved by the Company's Board of Directors in April 2021 and modified in July 2021). The vesting period for the 2017 Long-term Incentive Plan ended on March 15, 2023 and in conjunction with this plan, the Company distributed cash payments of $ 48,331 in the year ended December 31, 2023, $ 3,940 in the year ended December 31, 2022 and $ 92,938 in the year ended December 31, 2021 (including the first cash distribution made in March 2021 of $ 48,461 , and an additional cash distribution made in December 2021 of $ 44,477 , related to the acceleration of certain amounts due in the first quarter of 2022). Amounts accrued pursuant to the 2021 Long-term Incentive Plan of $ 128,730 are included within Other Long-term Liabilities on the Company's Consolidated Statement of Financial Condition as of December 31, 2023 and may be paid in cash or Class A Shares, at the Company's discretion, in the first quarter of 2025, 2026 and 2027, subject to employment at the time of payment. The Company periodically assesses the probability of the benchmarks being achieved and expenses the probable payout over the requisite service period of the award. The Company recorded compensation expense related to the 2017 Long-term Incentive Plan and 2021 Long-term Incentive Plan of $ 40,028 , $ 60,138 and $ 54,066 for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the total remaining expense to be recognized for the 2021 Long-term Incentive Plan over the future vesting period ending March 15, 2027, based on the current anticipated probable payout for the plan, is $ 100,136 . Employee Loans Receivable Periodically, the Company provides new and existing employees with cash payments in the form of loans and/or other cash awards which are subject to ratable vesting terms with service requirements ranging from one to five years and in certain 91 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) circumstances, subject to the achievement of performance requirements. Generally, these awards, based on the terms, include a requirement of either full or partial repayment by the employee if the service or other requirements of the agreements with the Company are not achieved. In circumstances where the employee meets the Company's minimum credit standards, the Company amortizes these awards to compensation expense over the relevant service period, which is generally the period they are subject to forfeiture. Compensation expense related to these awards was $ 24,749 , $ 27,050 and $ 23,136 for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the total compensation cost not yet recognized related to these awards was $ 46,550 . Other The total income tax benefit related to share-based compensation arrangements recognized in the Company's Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 was $ 68,442 , $ 61,002 and $ 50,254 , respectively. Separation and Transition Benefits The following table presents the change in the Company's liability related to separation benefits, stay arrangements and accelerated deferred cash compensation (together, the "Termination Costs") for the years ended December 31, 2023 and 2022: For the Years Ended December 31, 2023 2022 Beginning Balance $ 4,997 $ 675 Termination Costs Incurred 7,843 8,483 Cash Benefits Paid ( 10,068 ) ( 3,997 ) Non-Cash Charges 52 ( 164 ) Ending Balance $ 2,824 $ 4,997 In conjunction with the wind-down of the Company's operations in Mexico, for the year ended December 31, 2022, the Company incurred expenses related to separation benefits of $ 2,123 , which are recorded within Special Charges, Including Business Realignment Costs, on the Company's Consolidated Statement of Operations and are included within the above Termination Costs. See Note 6 for further information. In addition to the above Termination Costs incurred, for the years ended December 31, 2023 and 2022, the Company also incurred expenses related to the acceleration of the amortization of share-based payments previously granted to affected employees of $ 7,895 and $ 2,244 , respectively (related to 76 and 28 RSUs, respectively). For the year ended December 31, 2021, the Company incurred Termination Costs of $ 2,780 and expenses related to the acceleration of the amortization of share-based payments previously granted to affected employees of $ 2,434 (related to 34 RSUs). These expenses are recorded in Employee Compensation and Benefits, within the Investment Banking & Equities segment, on the Company's Consolidated Statements of Operations. Note 19 – Commitments and Contingencies Private Equity – As of December 31, 2023, the Company had unfunded commitments for capital contributions of $ 2,585 to private equity funds. These commitments will be funded as required through the end of each private equity fund's investment period, subject to certain conditions. Such commitments are satisfied in cash and are generally required to be made as investment opportunities are consummated by the private equity funds. Lines of Credit – Evercore Partners Services East L.L.C. ("East") entered into a loan agreement with PNC Bank, National Association ("PNC") for a revolving credit facility, as amended on June 29, 2023, in an aggregate principal amount of up to $ 30,000 (the "Existing PNC Facility") to be used for working capital and other corporate activities. This facility is secured by East's accounts receivable and the proceeds therefrom, as well as certain assets of EGL, including certain of EGL's accounts receivable. In addition, the agreement contains certain reporting covenants, as well as certain debt covenants that prohibit East and the Company from incurring other indebtedness, subject to specified exceptions. The Company and its consolidated subsidiaries were in compliance with these covenants as of December 31, 2023. The interest rate provisions are Daily SOFR plus 161 basis points and the maturity date is October 27, 2024. There were no drawings under this facility at December 31, 2023. 92 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) East entered into an additional loan agreement with PNC for a revolving credit facility, as amended on June 29, 2023, in an aggregate principal amount of up to $ 55,000 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. The Company and its consolidated subsidiaries were in compliance with these covenants as of December 31, 2023. The interest rate provisions are Daily SOFR plus 191 basis points and the maturity date is October 27, 2024. East is only permitted to borrow under this facility if there is no undrawn availability under the Existing PNC Facility and must repay indebtedness under this facility prior to repaying indebtedness under the Existing PNC Facility. There were no drawings under this facility at December 31, 2023. EGL entered into a subordinated revolving credit facility with PNC, as amended on November 6, 2023, in an aggregate principal amount of up to $ 75,000 , 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. The interest rate provisions are Daily SOFR plus 191 basis points and the maturity date is October 28, 2025. There were no drawings under this facility at December 31, 2023. In addition, EGL's clearing broker provides temporary funding for the settlement of securities transactions. Tax Receivable Agreement – As of December 31, 2023, the Company estimates the contractual obligations related to the Tax Receivable Agreement to be $ 63,335 . The Company expects to pay to the counterparties to the Tax Receivable Agreement $ 10,522 within one year or less, $ 19,204 in one to three years, $ 14,117 in three to five years and $ 19,492 after five years. Other Commitments – The Company has a commitment for contingent consideration related to the purchase of the outstanding Class R Interests of Private Capital Advisory L.P. from employees of the RECA business in 2021. Consideration for this transaction includes contingent cash consideration which is due to be settled in early 2024. The Company paid $ 1,365 of this contingent cash consideration in 2023. The fair value of the remaining contingent consideration is $ 2,023 as of December 31, 2023, which is included within Payable to Employees and Related Parties on the Company's Consolidated Statements of Financial Condition, and $ 6,119 as of December 31, 2022, $ 1,083 of which was included within Other Current Liabilities and the remainder of which was included within Other Long-term Liabilities on the Company's Consolidated Statements of Financial Condition. The amount of contingent consideration to be paid is dependent on the RECA business achieving certain revenue performance targets. See Note 16 for further information. Restricted Cash – The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statements of Financial Condition that sum to the total of amounts shown in the Consolidated Statements of Cash Flows: December 31, 2023 2022 2021 Cash and Cash Equivalents $ 596,878 $ 663,400 $ 578,317 Restricted Cash included in Other Assets 8,606 8,723 8,976 Total Cash, Cash Equivalents and Restricted Cash shown in the Statement of Cash Flows $ 605,484 $ 672,123 $ 587,293 Restricted Cash included in Other Assets on the Consolidated Statements of Financial Condition primarily represents letters of credit which are secured by cash as collateral for the lease of office space and security deposits for certain equipment. The restrictions will lapse when the leases end. Foreign Exchange – Periodically, the Company enters into foreign currency exchange forward contracts as an economic hedge against exchange rate risk for foreign currency denominated accounts receivable or other commitments. The Company entered into a foreign currency exchange forward contract during the first quarter of 2023 to buy 30,000 British Pounds sterling for $ 36,903 , which settled during the third quarter of 2023, and resulted in a loss of $ 303 . Upon settlement, the Company entered into a new foreign currency exchange forward contract to buy 30,000 British Pounds sterling for $ 36,675 , which will settle in the first quarter of 2024. The contract is recorded at its fair value of $ 1,585 as of December 31, 2023, and is included within Other Current Assets on the Consolidated Statement of Financial Condition. 93 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Contingencies In the normal course of business, from time to time, the Company and its affiliates are involved in judicial or regulatory proceedings, arbitration or mediation concerning matters arising in connection with the conduct of its businesses, including contractual and employment matters. In addition, United Kingdom, German, Hong Kong, Singapore, Canadian, Dubai and United States government agencies and self-regulatory organizations, as well as state securities commissions in the United States, conduct periodic examinations and initiate administrative proceedings regarding the Company's business, including, among other matters, accounting and operational matters, that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer, investment advisor, or its directors, officers or employees. In view of the inherent difficulty of determining whether any loss in connection with such matters is probable and whether the amount of such loss can be reasonably estimated, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, the Company cannot estimate the amount of such loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, fine, penalty or other relief, if any, might be. Subject to the foregoing, the Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company. Provisions for losses are established in accordance with ASC 450, "Contingencies" when warranted. Once established, such provisions are adjusted when there is more information available or when an event occurs requiring a change. Note 20 – Regulatory Authorities EGL is a U.S. registered broker-dealer and is subject to the net capital requirements of Rule 15c3-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Under the Alternative Net Capital Requirement, EGL's minimum net capital requirement is $ 250 . EGL's regulatory net capital as of December 31, 2023 and 2022 was $ 405,318 and $ 274,131 , respectively, which exceeded the minimum net capital requirement by $ 405,068 and $ 273,881 , respectively. Certain other non-U.S. subsidiaries are subject to various securities and banking regulations and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. These subsidiaries are in excess of their local capital adequacy requirements at December 31, 2023. Evercore Trust Company, N.A. ("ETC"), which is limited to fiduciary activities, is regulated by the Office of the Comptroller of the Currency ("OCC") and is a member bank of the Federal Reserve System. The Company, Evercore LP and ETC are subject to written agreements with the OCC that, among other things, require the Company and Evercore LP to maintain at least $ 5,000 in Tier 1 capital in ETC (or such other amount as the OCC may require) and maintain liquid assets in ETC in an amount at least equal to the greater of $ 3,500 or 180 days coverage of ETC's operating expenses. The Company was in compliance with the aforementioned agreements as of December 31, 2023. Note 21 – Income Taxes A portion of the Company's income is subject to U.S. federal, state, local and foreign income taxes and is taxed at the prevailing corporate tax rates. Taxes Payable as of December 31, 2023 and 2022 were $ 5,424 and $ 9,842 , respectively. In October 2021, members of the Organization for Economic Co-operation and Development ("OECD") agreed on a two-pillar tax framework to realign international taxation with economic activities, including a coordinated set of rules designed to ensure large multinational enterprises pay a minimum 15% tax rate across all jurisdictions, known as Pillar Two. The implications of these rules begin to take effect for corporations in 2024, as jurisdictions enact legislation in line with the OECD rules and related guidance. The Company is evaluating the current and proposed legislation of Pillar Two and does not expect it to materially impact the Company's effective tax rate in the future. Additionally, the Company is subject to the income tax effects associated with the global intangible low-taxed income ("GILTI") provisions in the period incurred. For the years ended December 31, 2023, 2022 and 2021, no additional income tax expense associated with the GILTI provisions has been recognized. 94 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) The following table presents the U.S. and non-U.S. components of Income before income tax expense: For the Years Ended December 31, 2023 2022 2021 U.S. $ 288,414 $ 455,584 $ 832,411 Non-U.S. 47,632 193,562 155,731 Income before Income Tax Expense (1) $ 336,046 $ 649,146 $ 988,142 (1) Net of Noncontrolling Interest. The components of the provision for income taxes reflected on the Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 consist of: For the Years Ended December 31, 2023 2022 2021 Current: Federal $ 48,940 $ 85,699 $ 141,260 Foreign 20,426 40,680 25,643 State and Local 14,095 47,102 52,045 Total Current 83,461 173,481 218,948 Deferred: Federal 4,400 3,020 25,352 Foreign ( 6,580 ) ( 5,893 ) ( 1,757 ) State and Local ( 714 ) 2,018 5,483 Total Deferred ( 2,894 ) ( 855 ) 29,078 Total $ 80,567 $ 172,626 $ 248,026 A reconciliation between the federal statutory income tax rate and the Company's effective income tax rate for the years ended December 31, 2023, 2022 and 2021 is as follows: For the Years Ended December 31, 2023 2022 2021 Reconciliation of Federal Statutory Tax Rates: U.S. Statutory Tax Rate 21.0 % 21.0 % 21.0 % Increase Due to State and Local Taxes 4.6 % 5.6 % 4.6 % Rate Benefits as a Limited Liability Company/Flow Through ( 2.2 ) % ( 1.9 ) % ( 2.6 ) % Foreign Taxes 0.5 % 1.0 % 0.5 % Non-Deductible Expenses (1) 2.0 % 1.0 % 0.3 % ASU 2016-09 Benefit for Stock Compensation ( 3.7 ) % ( 2.8 ) % ( 1.7 ) % Valuation Allowances 0.3 % ( 0.3 ) % ( 0.4 ) % Other Adjustments ( 0.5 ) % 0.9 % 0.5 % Effective Income Tax Rate 22.0 % 24.5 % 22.2 % (1) Primarily related to non-deductible share-based compensation expense. The effective tax rate for the years ended December 31, 2023, 2022 and 2021 reflects the application of ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"), which requires that the tax deduction associated with the appreciation or depreciation in the Company's share price upon vesting of employee share-based awards above or below the original grant price be reflected in income tax expense. The Company's Provision for Income Taxes reflects an additional tax benefit of $ 13,699 , $ 19,633 and $ 18,664 for the years ended December 31, 2023, 2022 and 2021, respectively, related to the application of ASU 2016-09, and resulted in a reduction in the effective tax rate of 3.7 , 2.8 and 1.7 percentage points for the years ended December 31, 2023, 2022 and 2021, respectively. The effective tax rate for 2023, 2022 and 2021 also 95 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) reflects the effect of certain nondeductible expenses, including expenses related to Class I-P and K-P Units, as well as the noncontrolling interest associated with LP Units and other adjustments. Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the Consolidated Statements of Financial Condition. These temporary differences result in taxable or deductible amounts in future years. Details of the Company's deferred tax assets and liabilities as of December 31, 2023 and 2022 were as follows: December 31, 2023 2022 Deferred Tax Assets: Depreciation and Amortization $ 21,796 $ 23,558 Compensation and Benefits 142,340 119,908 Step up in tax basis due to the exchange of LP Units for Class A Shares (1) 62,637 71,955 Step up in tax basis due to the exchange of LP Units for Class A Shares (2) 39,999 41,047 Operating Lease 112,715 75,519 Other 11,728 13,098 Total Deferred Tax Assets $ 391,215 $ 345,085 Deferred Tax Liabilities: Operating Lease $ 90,666 $ 56,824 Goodwill, Intangible Assets and Other 17,312 14,806 Total Deferred Tax Liabilities $ 107,978 $ 71,630 Net Deferred Tax Assets Before Valuation Allowance 283,237 273,455 Valuation Allowance ( 17,423 ) ( 16,289 ) Net Deferred Tax Assets $ 265,814 $ 257,166 (1) Step-up in the tax basis associated with the exchange of LP Units for holders which have a tax receivable agreement. (2) Step-up in the tax basis associated with the exchange of LP Units for holders which do not have a tax receivable agreement. The $ 8,648 increase in net deferred tax assets from December 31, 2022 to December 31, 2023 was primarily related to additions to deferred compensation expense exceeding the grant date value of prior awards which vested during the period, included in Compensation and Benefits, partially offset by the impact of excess amortization over the current year step-up in the basis of the tangible and intangible assets of Evercore LP, as discussed below. In addition, as of December 31, 2023, management weighted both the positive and negative evidence and concluded that it was appropriate to increase the valuation allowance by $ 1,134 , which is primarily attributable to the wind-down of the Company's operations in Mexico. During 2023, the LP holders exchanged 89 Class A and Class E LP Units for Class A Shares, which resulted in an increase in the tax basis of the tangible and intangible assets of Evercore LP. The exchange of certain Class E and Class A LP Units resulted in a $ 3,057 step-up in the tax basis of the tangible and intangible assets of Evercore LP and a corresponding increase to Additional Paid-In Capital on the Company's Consolidated Statement of Financial Condition as of December 31, 2023. Further, there was an exchange of 89 Class A LP Units that triggered an additional liability under the Tax Receivable Agreement that was entered into in 2006 between the Company and the LP Unit holders for the year ended December 31, 2023. The agreement provides for a payment to the LP Unit holders of 85 % of the cash tax savings (if any), resulting from the increased tax benefits from the exchange and for the Company to retain 15 % of such benefits. Accordingly, Deferred Tax Assets, Amounts Due Pursuant to Tax Receivable Agreements and Additional Paid-In Capital increased $ 3,061 , $ 2,602 and $ 459 , respectively, on the Company's Consolidated Statement of Financial Condition as of December 31, 2023. See Note 15 for further discussion. The Company recorded an increase in deferred tax assets of $ 973 associated with changes in Unrealized Gain (Loss) on Securities and Investments and a decrease of $ 1,585 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the year ended December 31, 2023. The Company recorded a decrease in deferred tax assets of $ 1,120 associated with changes in Unrealized Gain (Loss) on Securities and Investments and 96 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) an increase of $ 6,900 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the year ended December 31, 2022. A reconciliation of the changes in tax positions for the years ended December 31, 2023, 2022 and 2021 is as follows: December 31, 2023 2022 2021 Beginning unrecognized tax benefit $ 359 $ 254 $ 376 Additions for tax positions of prior years — 105 — Reductions for tax positions of prior years — — — Lapse of Statute of Limitations — — ( 122 ) Decrease due to settlement with Taxing Authority — — — Ending unrecognized tax benefit $ 359 $ 359 $ 254 The Company classifies interest relating to tax matters and tax penalties as a component of income tax expense in its Consolidated Statements of Operations. As of December 31, 2023, there were $ 359 of unrecognized tax benefits that, if recognized, $ 292 would affect the effective tax rate. Related to the unrecognized tax benefits, the Company accrued interest and penalties of $ 68 and $ 1 , respectively, during the year ended December 31, 2023. As of December 31, 2022, there were $ 359 of unrecognized tax benefits that, if recognized, $ 292 would affect the effective tax rate. Related to the unrecognized tax benefits, the Company accrued interest and penalties of $ 61 and $ 17 , respectively, during the year ended December 31, 2022. As of December 31, 2021, there were $ 254 of unrecognized tax benefits that, if recognized, $ 206 would affect the effective tax rate. The Company is subject to taxation in the U.S. and various state, local and foreign jurisdictions. The Company and its affiliates are currently under examination by Illinois for tax years 2018 through 2019, New York City for tax years 2014 through 2017 and Pennsylvania for tax years 2020 through 2021. With a few exceptions, the Company is no longer subject to U.S. federal, state, local or foreign examinations by taxing authorities for years before 2018. Note 22 – Concentrations of Credit Risk Financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, investment securities, foreign government obligations and receivables from clients. The Company has placed substantially all of its Cash and Cash Equivalents in interest-bearing deposits in U.S. commercial banks and U.S. investment banks that meet certain rating and capital requirements, as well as treasury bills. The Company's foreign subsidiaries maintain substantially all of their Cash and Cash Equivalents in interest bearing accounts at large commercial banking institutions domiciled in their respective countries of operation. Concentrations of credit risk are limited due to the quality of the Company's clients. Credit Risks The Company maintains its cash and cash equivalents, as well as certificates of deposit, with financial institutions with high credit ratings. At times, the Company may maintain deposits in federally insured financial institutions in excess of federally insured ("FDIC") limits or enter into sweep arrangements where banks will periodically transfer a portion of the Company's excess cash position to a money market fund. However, the Company believes that it is not exposed to significant credit risk due to the financial position of the depository institutions or investment vehicles in which those deposits are held. Accounts Receivable consists primarily of advisory fees and expense reimbursements billed to clients. 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. The Company maintains an allowance for credit losses to provide coverage for probable losses from customer receivables and determines the adequacy of the allowance by estimating the probability of loss based on the Company's analysis of historical credit loss experience of the Company's client receivables, and taking into consideration current market conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company's 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 certain fees related to private funds capital raising and the private capital businesses, a portion of which may be collected in a period exceeding one year (see Note 4 for further information). The collection period for restructuring transaction receivables may exceed 90 days. Receivables that are collected in a period exceeding one year are reflected in Other Assets on the Consolidated Statements of Financial Condition. 97 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) At December 31, 2023 and 2022, total receivables recorded in Accounts Receivable amounted to $ 371,606 and $ 385,131 , respectively, net of an allowance, and total receivables recorded in Other Assets amounted to $ 93,689 and $ 64,139 , respectively. The Company recorded bad debt expense of $ 5,559 and $ 5,513 for the years ended December 31, 2023 and 2022, respectively, and reversed bad debt expense of $ 60 for the year ended December 31, 2021. 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 December 31, 2023, total contract assets recorded in Other Current Assets and Other Assets amounted to $ 85,401 and $ 5,845 , respectively. As of December 31, 2022, total contract assets recorded in Other Current Assets and Other Assets amounted to $ 110,468 and $ 8,028 , respectively. With respect to the Company's Investment Securities portfolio, which is comprised of treasury bills and notes, exchange-traded funds and securities investments, the Company manages its credit risk exposure by limiting concentration risk and maintaining investment grade credit quality. As of December 31, 2023, the Company had Investment Securities of $ 1,382,027 , of which 88 % were U.S. treasury bills and notes and 12 % were equity securities and exchange-traded funds, and Certificates of Deposit of $ 54,856 with financial institutions with high credit ratings. Periodically, the Company provides compensation to new and existing employees in the form of loans and/or other cash awards, which include a requirement of either full or partial repayment of these awards based on the terms of their employment agreements with the Company. See Note 18 for further information. Note 23 – Segment Operating Results Business Segments – The Company's business results are categorized into the following two segments: Investment Banking & Equities and Investment Management. The Investment Banking & Equities segment includes providing advice to clients on significant mergers, acquisitions, divestitures and other strategic corporate transactions, as well as services related to securities underwriting, private placement services and commissions for agency-based equity trading services and equity research. The Investment Management segment includes Wealth Management and interests in private equity funds which are not managed by the Company. The Company's segment information for the years ended December 31, 2023, 2022 and 2021 is prepared using the following methodology: • Revenue, expenses and income (loss) from equity method investments directly associated with each segment are included in determining pre-tax income. • Expenses not directly associated with specific segments are allocated based on the most relevant measures applicable, including headcount, square footage and other performance and time-based factors. • Segment assets are based on those directly associated with each segment, or for certain assets shared across segments, those assets are allocated based on the most relevant measures applicable, including headcount and other factors. • Investment gains and losses, interest income and interest expense are allocated between the segments based on the segment in which the underlying asset or liability is held. Other Revenue, net, included in each segment's Net Revenues includes the following: • Interest income, including accretion, and income (losses) on investment securities, including the Company's investment funds (which are used as an economic hedge against the Company's deferred cash compensation program), certificates of deposit, cash and cash equivalents, long-term accounts receivable and on the Company’s debt security investment in G5 (through June 25, 2021, the date G5 repaid its outstanding debentures with the Company in full. See Note 10 for further information.) • A gain on the sale of a portion of the Company's interests in ABS in 2022. See Note 10 for further information • Gains (losses) resulting from foreign currency exchange rate fluctuations and foreign currency exchange forward contracts used as an economic hedge • Realized and unrealized gains and losses on interests in private equity funds which are not managed by the Company 98 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) • Interest expense associated with the Company’s Notes Payable and lines of credit • Adjustments to amounts due pursuant to the Company’s tax receivable agreement, subsequent to its initial establishment, related to changes in enacted tax rates Each segment's Operating Expenses include: a) employee compensation and benefits expenses that are incurred directly in support of the segment and b) non-compensation expenses, which include expenses for premises and occupancy, professional fees, travel and entertainment, communications and information services, execution, clearing and custody fees, equipment and indirect support costs (including compensation and other operating expenses related thereto) for administrative services. Such administrative services include, but are not limited to, accounting, tax, legal, technology, human capital, facilities management and senior management activities. Other Expenses include the following: • Special Charges, Including Business Realignment Costs – Includes the following: ◦ 2023 – Expenses related to the write-off of non-recoverable assets in connection with the wind-down of the Company's operations in Mexico ◦ 2022 – Expenses related to charges associated with the prepayment of the Company's Series B Notes, as well as certain professional fees, separation benefits and other charges related to the wind-down of the Company's operations in Mexico ◦ 2021 – Expenses related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with the Company's investment strategy, the Company decided to wind-down during 2021 • 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 The Company evaluates segment results based on net revenues and pre-tax income, both including and excluding the impact of the Other Expenses. No client accounted for more than 10% of the Company's Consolidated Net Revenues for the years ended December 31, 2023, 2022 and 2021, respectively. The following information presents each segment's contribution. 99 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) For the Years Ended December 31, 2023 2022 2021 Investment Banking & Equities Net Revenues (1) $ 2,355,943 $ 2,696,125 $ 3,223,889 Operating Expenses 2,010,757 2,009,913 2,125,871 Other Expenses (2) 2,921 3,126 7 Operating Income 342,265 683,086 1,098,011 Income from Equity Method Investments 620 1,217 1,337 Pre-Tax Income $ 342,885 $ 684,303 $ 1,099,348 Identifiable Segment Assets $ 3,541,886 $ 3,446,075 $ 3,605,332 Investment Management Net Revenues (1) $ 70,006 $ 65,923 $ 65,610 Operating Expenses 53,136 52,967 52,629 Other Expenses (2) — — 8,554 Operating Income 16,870 12,956 4,427 Income from Equity Method Investments 6,035 6,782 12,824 Pre-Tax Income $ 22,905 $ 19,738 $ 17,251 Identifiable Segment Assets $ 161,412 $ 174,848 $ 197,325 Total Net Revenues (1) $ 2,425,949 $ 2,762,048 $ 3,289,499 Operating Expenses 2,063,893 2,062,880 2,178,500 Other Expenses (2) 2,921 3,126 8,561 Operating Income 359,135 696,042 1,102,438 Income from Equity Method Investments 6,655 7,999 14,161 Pre-Tax Income $ 365,790 $ 704,041 $ 1,116,599 Identifiable Segment Assets $ 3,703,298 $ 3,620,923 $ 3,802,657 100 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) (1) Net Revenues include Other Revenue, net, allocated to the segments as follows: For the Years Ended December 31, 2023 2022 2021 Investment Banking & Equities (A) $ 78,281 $ ( 25,668 ) $ 19,370 Investment Management 2,965 1,440 ( 174 ) Total Other Revenue, net $ 81,246 $ ( 24,228 ) $ 19,196 (A) Other Revenue, net, from the Investment Banking & Equities segment includes interest expense on the Notes Payable and lines of credit of $ 16,717 , $ 16,850 and $ 17,586 for the years ended December 31, 2023, 2022 and 2021, respectively. (2) Other Expenses are as follows: For the Years Ended December 31, 2023 2022 2021 Investment Banking & Equities Special Charges, Including Business Realignment Costs $ 2,921 $ 3,126 $ — Acquisition and Transition Costs — — 7 Total Investment Banking & Equities 2,921 3,126 7 Investment Management Special Charges, Including Business Realignment Costs — — 8,554 Total Investment Management — — 8,554 Total Other Expenses $ 2,921 $ 3,126 $ 8,561 Geographic Information – The Company manages its business based on the profitability of the enterprise as a whole. The Company's revenues were derived from clients located and managed in the following geographical areas: For the Years Ended December 31, 2023 2022 2021 Net Revenues: (1) United States $ 1,719,337 $ 1,989,387 $ 2,553,806 Europe and Other 609,723 787,658 710,660 Latin America 15,643 9,231 5,837 Total $ 2,344,703 $ 2,786,276 $ 3,270,303 (1) Excludes Other Revenue, Including Interest and Investments, and Interest Expense. The Company's total assets are located in the following geographical areas: December 31, 2023 2022 Total Assets: United States $ 3,146,756 $ 2,902,153 Europe and Other 556,542 718,770 Total $ 3,703,298 $ 3,620,923 101 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Note 24 – Evercore Inc. (Parent Company Only) Financial Statements EVERCORE INC. (parent company only) CONDENSED STATEMENTS OF FINANCIAL CONDITION (dollars in thousands, except share data) December 31, 2023 2022 ASSETS Equity Investment in Subsidiary $ 1,743,393 $ 1,703,843 Deferred Tax Assets 234,719 233,280 Goodwill 15,236 15,236 Other Assets 24,110 31,099 TOTAL ASSETS $ 2,017,458 $ 1,983,458 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Current Liabilities Payable to Related Party $ 10,522 $ 10,417 Other Current Liabilities 3,304 3,287 Total Current Liabilities 13,826 13,704 Amounts Due Pursuant to Tax Receivable Agreements 52,813 61,169 Long-term Debt - Notes Payable 373,885 371,774 TOTAL LIABILITIES 440,524 446,647 Stockholders' Equity Common Stock Class A, par value $ 0.01 per share ( 1,000,000,000 shares authorized, 82,114,009 and 79,686,375 issued at December 31, 2023 and 2022, respectively, and 37,773,613 and 38,347,262 outstanding at December 31, 2023 and 2022, respectively) 821 797 Class B, par value $ 0.01 per share ( 1,000,000 shares authorized, 46 and 50 issued and outstanding at December 31, 2023 and 2022, respectively) — — Additional Paid-In Capital 3,163,198 2,861,775 Accumulated Other Comprehensive Income (Loss) ( 26,538 ) ( 27,942 ) Retained Earnings 1,892,656 1,768,098 Treasury Stock at Cost ( 44,340,396 and 41,339,113 shares at December 31, 2023 and 2022, respectively) ( 3,453,203 ) ( 3,065,917 ) TOTAL STOCKHOLDERS' EQUITY 1,576,934 1,536,811 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,017,458 $ 1,983,458 See notes to parent company only financial statements. 102 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) EVERCORE INC. (parent company only) CONDENSED STATEMENTS OF OPERATIONS For the Years Ended December 31, 2023 2022 2021 REVENUES Other Revenue, Including Interest and Investments $ 16,717 $ 16,850 $ 17,439 TOTAL REVENUES 16,717 16,850 17,439 Interest Expense 16,717 16,850 17,439 NET REVENUES — — — EXPENSES TOTAL EXPENSES — — — OPERATING INCOME — — — Equity in Income of Subsidiary 315,109 605,957 954,167 Provision for Income Taxes 59,630 129,437 214,051 NET INCOME $ 255,479 $ 476,520 $ 740,116 See notes to parent company only financial statements. 103 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) EVERCORE INC. (parent company only) CONDENSED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2023 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 255,479 $ 476,520 $ 740,116 Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities: Undistributed Income of Subsidiary ( 315,109 ) ( 605,957 ) ( 954,167 ) Deferred Taxes 4,332 2,624 29,017 Accretion on Long-term Debt 529 585 433 (Increase) Decrease in Operating Assets: Other Assets 6,989 ( 31,099 ) 25,603 Increase (Decrease) in Operating Liabilities: Taxes Payable — ( 13,075 ) 13,075 Net Cash Provided by (Used in) Operating Activities ( 47,780 ) ( 170,402 ) ( 145,923 ) CASH FLOWS FROM INVESTING ACTIVITIES Investment in Subsidiary 175,644 297,659 264,685 Net Cash Provided by Investing Activities 175,644 297,659 264,685 CASH FLOWS FROM FINANCING ACTIVITIES Payment of Notes Payable — ( 67,000 ) ( 38,000 ) Issuance of Notes Payable — 67,000 38,000 Dividends ( 127,864 ) ( 127,257 ) ( 118,762 ) Net Cash Provided by (Used in) Financing Activities ( 127,864 ) ( 127,257 ) ( 118,762 ) NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH — — — CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of Year — — — CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of Year $ — $ — $ — SUPPLEMENTAL CASH FLOW DISCLOSURE Accrued Dividends $ 17,054 $ 15,236 $ 14,332 See notes to parent company only financial statements. 104 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) EVERCORE INC. (parent company only) NOTES TO CONDENSED FINANCIAL STATEMENTS Note A – Organization Evercore Inc. (the "Company") was incorporated as a Delaware corporation on July 21, 2005. The Company did not begin meaningful operations until the reorganization discussed below. Pursuant to a reorganization into a holding company structure, the Company became a holding company and its sole asset is a controlling equity interest in Evercore LP. As the sole general partner of Evercore LP, the Company operates and controls all of the business and affairs of Evercore LP and, through Evercore LP and its subsidiaries, continues to conduct the business now conducted by these subsidiaries. Note B – Significant Accounting Policies Basis of Presentation. The Statements of Financial Condition, Operations and Cash Flows have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Equity Investment in Subsidiary and Equity in Income of Subsidiary. Equity Investment in Subsidiary includes the Company's receivable from Evercore LP for senior notes owed by Evercore LP to the Company having similar terms as described below in Note D – issuance of Notes Payable. The Equity in Income of Subsidiary represents the Company's share of income from Evercore LP. Note C – Stockholders' Equity The Company is authorized to issue 1,000,000 shares of Class A common stock ("Class A Shares"), par value $ 0.01 per share, and 1,000 shares of Class B common stock, par value $ 0.01 per share. All Class A Shares and shares of Class B common stock vote together as a single class. At December 31, 2023, the Company has issued 82,114 Class A Shares. The Company canceled one share of Class B common stock, which was held by a limited partner of Evercore LP, and granted one share of Class B common stock during 2023. During 2023, the Company purchased 968 Class A Shares from employees at an average cost per share of $ 131.53 , primarily for the net settlement of stock-based compensation awards, and 2,033 Class A Shares at an average cost per share of $ 127.85 pursuant to the Company's share repurchase program. The result of these purchases was an increase in Treasury Stock of $ 387,286 on the Company's Statement of Financial Condition as of December 31, 2023. During the year ended December 31, 2023, the Company declared and paid dividends of $ 3.00 per share, totaling $ 113,867 , which were wholly funded by the Company's sole subsidiary, Evercore LP, and accrued deferred cash dividends on unvested RSUs, totaling $ 17,054 . During the year ended December 31, 2023, the Company also paid deferred cash dividends of $ 13,997 , which were wholly funded by the Company's sole subsidiary, Evercore LP. Dividends are paid and treasury shares are repurchased by a subsidiary of Evercore Inc. As discussed in Note 18 to the consolidated financial statements, both the Evercore LP partnership units and restricted stock units are exchangeable into Class A Shares on a one -for-one basis once vested. Note D – Issuance of Notes Payable On March 30, 2016, the Company issued an aggregate of $ 170,000 of senior notes (the "2016 Private Placement Notes"), including: $ 38,000 aggregate principal amount of its 4.88 % Series A senior notes which were due March 30, 2021 (the "Series A Notes"), $ 67,000 aggregate principal amount of its 5.23 % Series B senior notes originally due March 30, 2023 (the "Series B Notes"), $ 48,000 aggregate principal amount of its 5.48 % Series C senior notes due March 30, 2026 and $ 17,000 aggregate principal amount of its 5.58 % Series D senior notes due March 30, 2028, pursuant to a note purchase agreement dated as of March 30, 2016, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933. In March 2021, the Company repaid the $ 38,000 aggregate principal amount of its Series A Notes. On June 28, 2022, the Company prepaid the $ 67,000 aggregate principal amount of its Series B Notes plus the applicable make-whole amount. On August 1, 2019, the Company issued $ 175,000 and £ 25,000 of senior unsecured notes (the "2019 Private Placement Notes"), through private placement. These notes reflect a weighted average life of 12 years and a weighted average stated interest rate of 4.26 %. These notes include: $ 75,000 aggregate principal amount of its 4.34 % Series E senior notes due August 1, 2029, $ 60,000 aggregate principal amount of its 4.44 % Series F senior notes due August 1, 2031, $ 40,000 aggregate principal amount of its 4.54 % Series G senior notes due August 1, 2033 and £ 25,000 aggregate principal amount of its 3.33 % 105 Table of Contents EVERCORE INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (amounts in thousands, except per share amounts, unless otherwise noted) Series H senior notes due August 1, 2033, each of which were issued pursuant to a note purchase agreement dated as of August 1, 2019, 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, the Company issued $ 38,000 aggregate principal amount of its 1.97 % Series I senior notes due August 1, 2025 (the "2021 Private Placement Notes"), pursuant to a note purchase agreement dated as of March 29, 2021, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933. On June 28, 2022, the Company issued $ 67,000 aggregate principal amount of its 4.61 % Series J senior notes due November 15, 2028 (the "2022 Private Placement Notes"), pursuant to a note purchase agreement dated as of June 28, 2022, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933. Note E – Commitments and Contingencies As of December 31, 2023, as discussed in Note 13 to the consolidated financial statements, future payments required related to the 2016, 2019, 2021 and 2022 Private Placement Notes are $ 471,821 . Pursuant to the 2016, 2019, 2021 and 2022 Private Placement Notes, the Company expects to make payments to the notes' holders of $ 16,211 within one year or less, $ 116,171 in one to three years, $ 109,190 in three to five years and $ 230,249 after five years. As of December 31, 2023, as discussed in Note 19 to the consolidated financial statements, the Company estimates the contractual obligations related to the Tax Receivable Agreement to be $ 63,335 . The company expects to pay to the counterparties to the Tax Receivable Agreement $ 10,522 within one year or less, $ 19,204 in one to three years, $ 14,117 in three to five years and $ 19,492 after five years. 106 Table of Contents SUPPLEMENTAL FINANCIAL INFORMATION Not applicable. 107 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.