What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-02 compared with 2024-05-08 · 179 added, 136 removed, 364 unchanged (46% of the section changed)

11 unchanged sentences

We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise except as required by law.

We operate in a very competitive and rapidly changing environment.

New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Key Financial Measures

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

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

case of payments under commission sharing arrangements, on the date earned.

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

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

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

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

These include Class K-P Units issued by Evercore LP and certain RSU awards.

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

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Other Expenses

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

Other Expenses for the six months ended June 30, 2023 include Special Charges, Including Business Realignment Costs, related to the write-off of non-recoverable assets in connection with the wind-down of our operations in Mexico.

Income from Equity Method Investments

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

Condensed Consolidated Statements of Operations.

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

Provision (Benefit) for Income Taxes

Provision for Income Taxes

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

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

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

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Results of Operations

The following is a discussion of our results of operations for the three months ended March 31, 2024 and 2023.

The following is a discussion of our results of operations for the three and six months ended June 30, 2024 and 2023.

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

For the Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

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

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Operating Expenses 580,981 441,703 32 % 1,077,676 904,021 19 %

Other Expenses — 2,921 NM

Other Expenses — — NM — 2,921 NM

Total Expenses 580,981 441,703 32 % 1,077,676 906,942 19 %

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Income Before Income Taxes 110,100 59,258 86 % 196,545 167,630 17 %

Provision (Benefit) for Income Taxes (6,679) 16,131 NM

Provision for Income Taxes 28,367 17,097 66 % 21,688 33,228 (35 %)

Net Income 81,733 42,161 94 % 174,857 134,402 30 %

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Common Shareholders $ 1.81 $ 0.95 91 % $ 3.89 $ 3.02 29 %

As of March 31, 2024 and 2023, we employed approximately 2,225 and 2,135 people, respectively.

Three Months Ended March 31, 2024 versus March 31, 2023

As of June 30, 2024 and 2023, we employed approximately 2,330 and 2,245 people, respectively.

Three Months Ended June 30, 2024 versus June 30, 2023

Net Income Attributable to Evercore Inc.

was $85.7 million for the three months ended March 31, 2024, an increase of $2.3 million, or 3%, compared to $83.4 million for the three months ended March 31, 2023.

was $73.8 million for the three months ended June 30, 2024, an increase of $36.6 million, or 98%, compared to $37.2 million for the three months ended June 30, 2023.

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

Net Revenues were $580.8 million for the three months ended March 31, 2024, an increase of $8.7 million, or 2%, versus Net Revenues of $572.1 million for the three months ended March 31, 2023.

Advisory Fees decreased $32.7 million, or 7%, Underwriting Fees increased $32.7 million, or 143%, and Commissions and Related Revenue increased $0.2 million compared to the three months ended March 31, 2023.

Asset Management and Administration Fees increased $2.7 million, or 17%, compared to the three months ended March 31, 2023.

Net Revenues were $689.2 million for the three months ended June 30, 2024, an increase of $189.8 million, or 38%, versus Net Revenues of $499.4 million for the three months ended June 30, 2023.

Advisory Fees increased $193.7 million, or 52%, Underwriting Fees decreased $7.2 million, or 19%, and Commissions and Related Revenue increased $3.2 million, or 6%, compared to the three months ended June 30, 2023.

Asset Management and Administration Fees increased $2.6 million, or

16%, compared to the three months ended June 30, 2023.

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

Ot her Revenue, Including Interest and Investments, increased $5.8 million, or 22%, compared to the three months ended March 31, 2023, primarily reflecting higher performance of our investment funds portfolio due to overall market appreciation,

as well as higher returns on our fixed income investment portfolios, which primarily consist of U.S.

Treasury bills.

Ot her Revenue, Including Interest and Investments, decreased $2.4 million, or 10%, compared to the three months ended June 30, 2023, primarily reflecting lower gains on our investment funds portfolio, partially offset by higher interest income.

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

Total Operating Expenses were $496.7 million for the three months ended March 31, 2024, compared to $462.3 million for the three months ended March 31, 2023, an increase of $34.4 million, or 7%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $387.7 million for the three months ended March 31, 2024, an increase of $20.8 million, or 6%, versus expense of $366.9 million for the three months ended March 31, 2023.

The increase in the amount of compensation recognized for the three months ended March 31, 2024 principally reflects higher base salaries, higher compensation expense related to senior new hires and higher amortization of prior period deferred compensation awards.

Non-compensation expenses, as a component of Operating Expenses, were $109.0 million for the three months ended March 31, 2024, an increase of $13.6 million, or 14%, versus $95.4 million for the three months ended March 31, 2023.

The increase was primarily driven by increases in professional fees and travel and related expenses, as well as communications and information services, principally reflecting higher license fees and research services in the first quarter of 2024.

This was partially offset by a decrease in bad debt expense.

Non-Compensation expenses per employee were approximately $49.3 thousand for the three months ended March 31, 2024, versus $44.9 thousand for the three months ended March 31, 2023.

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

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 66.8% for the three months ended March 31, 2024, compared to 64.1% for the three months ended March 31, 2023.

Income from Equity Method Investments was $2.3 million for the three months ended March 31, 2024, compared to $1.5 million for the three months ended March 31, 2023, reflecting higher earnings from Luminis, Atalanta Sosnoff and Seneca Evercore in the first quarter of 2024.

Total Operating Expenses were $581.0 million for the three months ended June 30, 2024, compared to $441.7 million for the three months ended June 30, 2023, an increase of $139.3 million, or 32%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $459.0 million for the three months ended June 30, 2024, an increase of $120.6 million, or 36%, versus expense of $338.4 million for the three months ended June 30, 2023.

The increase in the amount of compensation recognized for the three months ended June 30, 2024 principally reflects a higher accrual for incentive compensation, higher base salaries and higher compensation expense related to senior new hires.

Non-compensation expenses, as a component of Operating Expenses, were $122.0 million for the three months ended June 30, 2024, an increase of $18.7 million, or 18%, versus $103.3 million for the three months ended June 30, 2023.

The increase was primarily driven by an increase in professional fees and travel and related expenses, largely due to higher levels of business activity and increased headcount, as well as an increase in other operating expenses.

Non-Compensation expenses per employee were approximately $53.6 thousand for the three months ended June 30, 2024, versus $47.2 thousand for the three months ended June 30, 2023.

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 66.6% for the three months ended June 30, 2024, compared to 67.8% for the three months ended June 30, 2023.

Income from Equity Method Investments was $1.9 million for the three months ended June 30, 2024, compared to $1.5 million for the three months ended June 30, 2023, primarily reflecting higher earnings from Atalanta Sosnoff in the second quarter of 2024.

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

The provision (benefit) for income taxes for the three months ended March 31, 2024 was ($6.7) million, which reflected an effective tax rate of (7.7%).

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

The provision (benefit) for income taxes for the three months ended March 31, 2024 and 2023 reflects the net impact associated with the appreciation in our share price upon vesting of employee share-based awards above the original grant price of $29.5 million and $13.7 million, respectively, which resulted in a reduction in the effective tax rate of 34.1 and 12.7 percentage points for the three months ended March 31, 2024 and 2023, respectively.

Net Income Attributable to Noncontrolling Interest was $7.4 million for the three months ended March 31, 2024, compared to $8.9 million for the three months ended March 31, 2023.

The decrease in Net Income Attributable to Noncontrolling Interest primarily reflects lower income at Evercore LP during the three months ended March 31, 2024.

The provision for income taxes for the three months ended June 30, 2024 was $28.4 million, which reflected an effective tax rate of 25.8%.

The provision for income taxes for the three months ended June 30, 2023 was $17.1 million, which reflected an effective tax rate of 28.9%.

The provision for income taxes for the three months ended June 30, 2024 and 2023 reflects the net impact associated with the appreciation in our share price upon vesting of employee share-based awards above the original grant price of $1.4 million and $0.1 million, respectively.

Net Income Attributable to Noncontrolling Interest was $8.0 million for the three months ended June 30, 2024, compared to $5.0 million for the three months ended June 30, 2023.

The increase in Net Income Attributable to Noncontrolling Interest primarily reflects higher income at Evercore LP during the three months ended June 30, 2024.

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

Six Months Ended June 30, 2024 versus June 30, 2023

Net Income Attributable to Evercore Inc.

was $159.5 million for the six months ended June 30, 2024, an increase of $38.9 million, or 32%, compared to $120.6 million for the six months ended June 30, 2023.

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

Net Revenues were $1.27 billion for the six months ended June 30, 2024, an increase of $198.5 million, or 19%, versus Net Revenues of $1.07 billion for the six months ended June 30, 2023.

Advisory Fees increased $161.0 million, or 19%, Underwriting Fees increased $25.5 million, or 42%, and Commissions and Related Revenue increased $3.3 million, or 3%, compared to the six months ended June 30, 2023.

Asset Management and Administration Fees increased $5.4 million, or 16%, compared to the six months ended June 30, 2023.

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

Ot her Revenue, Including Interest and Investments, increased $3.4 million, or 7%, compared to the six months ended June 30, 2023, principally reflecting higher interest income.

Total Operating Expenses were $1.08 billion for the six months ended June 30, 2024, compared to $904.0 million for the six months ended June 30, 2023, an increase of $173.7 million, or 19%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $846.6 million for the six months ended June 30, 2024, an increase of $141.4 million, or 20%, versus expense of $705.2 million for the six months ended June 30, 2023.

The increase in the amount of compensation recognized for the six months ended June 30, 2024 principally reflects a higher accrual for incentive compensation, higher base salaries and higher compensation expense related to senior new hires.

Non-compensation expenses, as a component of

Operating Expenses, were $231.0 million for the six months ended June 30, 2024, an increase of $32.2 million, or 16%, versus $198.8 million for the six months ended June 30, 2023.

Non-Compensation expenses per employee were approximately $102.7 thousand for the six months ended June 30, 2024, versus $91.8 thousand for the six months ended June 30, 2023.

Other Expenses of $2.9 million for the six months ended June 30, 2023 reflected Special Charges, Including Business Realignment Costs, related to the write-off of non-recoverable assets in connection with the wind-down of our operations in Mexico.

As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 66.7% for the six months ended June 30, 2024, compared to 65.8% for the six months ended June 30, 2023.

Income from Equity Method Investments was $4.2 million for the six months ended June 30, 2024, compared to $3.0 million for the six months ended June 30, 2023, reflecting higher earnings from Atalanta Sosnoff, Luminis and Seneca Evercore in 2024.

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

The provision for income taxes for the six months ended June 30, 2024 was $21.7 million, which reflected an effective tax rate of 11.0%.

The provision for income taxes for the six months ended June 30, 2023 was $33.2 million, which reflected an effective tax rate of 19.8%.

The provision for income taxes for the six months ended June 30, 2024 and 2023 reflects the net impact associated with the appreciation in our share price upon vesting of employee share-based awards above the original grant price of $30.9 million and $13.8 million, respectively, which resulted in a reduction in the effective tax rate of 15.7 and 8.2 percentage points for the six months ended June 30, 2024 and 2023, respectively.

Net Income Attributable to Noncontrolling Interest was $15.4 million for the six months ended June 30, 2024, compared to $13.8 million for the six months ended June 30, 2023.

The increase in Net Income Attributable to Noncontrolling Interest reflects higher income at EWM and Evercore LP during the six months ended June 30, 2024.

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

Business Segments

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

For the Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

(dollars in thousands)

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Operating Expenses 566,368 428,344 32 % 1,049,206 877,424 20 %

Other Expenses — 2,921 NM

Other Expenses — — NM — 2,921 NM

Total Expenses 566,368 428,344 32 % 1,049,206 880,345 19 %

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Income from Equity Method Investments (2)

147 143 3 % 835 214 290 %

Pre-Tax Income $ 103,789 $ 54,045 92 % $ 183,367 $ 156,926 17 %

(1) Includes interest expense on Notes Payable and lines of credit of $4.2 million for each of the three months ended March 31, 2024 and 2023.

(1) Includes interest expense on Notes Payable and lines of credit of $4.2 million and $8.4 million for each of the three and six months ended June 30, 2024 and 2023, respectively.

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

For the three months ended March 31, 2024, the dollar value of North American announced and completed M&A activity increased 78% and decreased 12%, respectively, compared to the three months ended March 31, 2023, and the dollar value of Global announced and completed M&A activity increased 42% and decreased 20%, respectively, compared to the three months ended March 31, 2023.

For the three months ended March 31, 2024, the dollar value of North American and Global completed M&A activity over $100 million decreased 10% and 19%, respectively, compared to the three months ended March 31, 2023.

For the Three Months Ended March 31,

2024 2023 Change

For the three months ended June 30, 2024, the dollar value of North American announced and completed M&A activity increased 2% and 56%, respectively, compared to the three months ended June 30, 2023, and the dollar value of Global announced and completed M&A activity increased 1% and 23%, respectively, compared to the three months ended June 30, 2023.

For the three months ended June 30, 2024, the dollar value of North American and Global completed M&A activity over $100 million increased 66% and 30%, respectively, compared to the three months ended June 30, 2023.

For the six months ended June 30, 2024, the dollar value of North American announced and completed M&A activity increased 39% and 20%, respectively, compared to the six months ended June 30, 2023, and the dollar value of Global announced and completed M&A activity increased 20% and 1%, respectively, compared to the six months ended June 30, 2023.

For the six months ended June 30, 2024, the dollar value of North American and Global completed M&A activity over $100 million increased 25% and 4%, respectively, compared to the six months ended June 30, 2023.

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

2024 2023 Change 2024 2023 Change

Industry Statistics ($ in billions) (1)

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Total Number of Fees From Advisory and Underwriting Client Transactions (2)

244 236 3 % 381 360 6 %

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

95 77 23 % 186 155 20 %

Total Number of Underwriting Transactions (2)

17 15 13 % 36 29 24 %

Total Number of Underwriting Transactions as a Bookrunner (2)

Refinitiv April 5, 2024

14 14 — % 30 26 15 %

Refinitiv July 8, 2024

(2) Includes Equity and Debt Underwriting Transactions.

Investment Banking & Equities Results of Operations

Three Months Ended March 31, 2024 versus March 31, 2023

Net Revenues were $561.7 million for the three months ended March 31, 2024 , compared to $554.8 million for the three months ended March 31, 2023 , an increase of $6.9 million, or 1%.

The increase in revenues for the three months ended March 31, 2024 was primarily driven by an increase of $32.7 million, or 143%, in Underwriting Fees, reflecting an increase in the number of transactions we participated in during the first quarter of 2024.

Advisory Fees decreased $32.7 million , or 7% , compared to the three months ended March 31, 2023, reflecting a decline in revenue earned from large transactions during the first quarter of 2024.

Commissions and Related Revenue increased $0.2 million compared to the three months ended March 31, 2023 , primarily reflecting higher subscription fees, partially offset by lower trading commissions .

Other Revenue, net, increased $6.8 million, or 32% , compared to the three months ended March 31, 2023 , primarily reflecting higher performance of our investment funds portfolio due to overall market appreciation, as well as higher returns on our fixed income investment portfolios, which primarily consist of U.S.

treasury bills .

Three Months Ended June 30, 2024 versus June 30, 2023

Net Revenues were $670.0 million for the three months ended June 30, 2024 , compared to $482.2 million for the three months ended June 30, 2023 , an increase of $187.8 million, or 39%.

The increase in revenues for the three months ended June 30, 2024 was primarily driven by an increase of $193.7 million, or 52%, in Advisory Fees, reflecting an increase in revenue earned from large transactions and an increase in the number of advisory fees earned during the second quarter of 2024.

Underwriting Fees decreased $7.2 million, or 19%, compared to the three months ended June 30, 2023, reflecting a decrease in the dollar amount of transactions we participated in during the second quarter of 2024.

Commissions and Related Revenue increased $3.2 million, or 6%, compared to the three months ended June 30, 2023 , primarily reflecting higher subscription fees and trading commissions .

Other Revenue, net, decreased $1.9 million, or 10% , compared to the three months ended June 30, 2023 , primarily reflecting lower gains on our investment funds portfolio, partially offset by higher interest income.

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

Operating Expenses were $482.8 million for the three months ended March 31, 2024 , compared to $449.1 million for the three months ended March 31, 2023, an increase of $33.8 million , or 8%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $377.3 million for the three months ended March 31, 2024 , compared to $357.1 million for the three months ended March 31, 2023 , an increase of $20.2 million , or 6% .

Non-compensation expenses, as a component of Operating Expenses, were $105.5 million for the three months ended March 31, 2024, compared to $92.0 million for the three months ended March 31, 2023, an increase of $13.5 million , or 15% .

Non-compensation operating expenses increased from the prior year period, primarily driven by increases in professional fees and travel and related expenses, as well as communications and information services, principally reflecting higher license fees and research services in the first quarter of 2024.

This was partially offset by a decrease in bad debt expense.

Operating Expenses were $566.4 million for the three months ended June 30, 2024 , compared to $428.3 million for the three months ended June 30, 2023, an increase of $138.0 million , or 32%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $448.1 million for the three months ended June 30, 2024 , compared to $328.5 million for the three months ended June 30, 2023 , an increase of $119.6 million , or 36% .

Non-compensation expenses, as a component of Operating Expenses, were $118.3 million for the three months ended June 30, 2024, compared to $99.8 million for the three months ended June 30, 2023, an increase of $18.5 million , or 19% .

Non-compensation operating expenses increased from the prior year period, primarily driven by an increase in professional fees and travel and related expenses, largely due to higher levels of business activity and increased headcount, as well as an increase in other operating expenses.

Six Months Ended June 30, 2024 versus June 30, 2023

Net Revenues were $1.23 billion for the six months ended June 30, 2024, compared to $1.04 billion for the six months ended June 30, 2023, an increase of $194.7 million, or 19%.

The increase in revenues for the six months ended June 30, 2024 was primarily driven by an increase of $161.0 million, or 19%, in Advisory Fees, reflecting an increase in revenue earned from large transactions and an increase in the number of advisory fees earned during 2024.

Underwriting Fees increased $25.5 million, or 42%, compared to the six months ended June 30, 2023, reflecting an increase in the number of transactions we participated in during 2024.

Commissions and Related Revenue increased $3.3 million, or 3%, compared to the six months ended June 30, 2023, primarily reflecting higher subscription fees and trading commissions.

Other Revenue, net, increased $5.0 million, or 12%, compared to the six months ended June 30, 2023, principally reflecting higher interest income .

Operating Expenses were $1.05 billion for the six months ended June 30, 2024, compared to $877.4 million for the six months ended June 30, 2023, an increase of $171.8 million, or 20%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $825.4 million for the six months ended June 30, 2024, compared to $685.5 million for the six months ended June 30, 2023, an increase of $139.9 million, or 20% .

Non-compensation expenses, as a component of Operating Expenses, were $223.9 million for the six months ended June 30, 2024, compared to $191.9 million for the six months ended June 30, 2023, an increase of $32.0 million, or 17%.

Investment Management

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

For the Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

(dollars in thousands)

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

As of March 31, 2024, $0.1 million of previously distributed carried interest received from the funds was subject to repayment.

As of June 30, 2024, $0.1 million of previously distributed carried interest received from the funds was subject to repayment.

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

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

In July 2024, we sold the remaining portion of our interest in ABS.

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

Assets Under Management

AUM in our Wealth Management business of $13.0 billion at March 31, 2024 increased $0.7 billion, or 6% , compared to $12.3 billion at December 31, 2023.

AUM in our Wealth Management business of $13.2 billion at June 30, 2024 increased $0.9 billion, or 7% , compared to $12.3 billion at December 31, 2023.

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

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

Wealth Management maintained 77% and 76% of Level 1 investments, 19% and 20% of Level 2 investments and 4% and 4% of Level 3 investments as of March 31, 2024 and December 31, 2023, respectively.

Wealth Management maintained 77% and 76% of Level 1 investments, 19% and 20% of Level 2 investments and 4% and 4% of Level 3 investments as of June 30, 2024 and December 31, 2023, respectively.

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

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

Accordingly, client flows, market movements, and changes in our product mix will impact the level of

management fees we receive from our Wealth Management business.

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

Clients will increase or

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

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

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

The following table summarizes AUM activity for Wealth Management for the three months ended March 31, 2024:

The following table summarizes AUM activity for Wealth Management for the six months ended June 30, 2024:

(dollars in millions)

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Market Appreciation 766

Balance at March 31, 2024 $ 12,999

Unconsolidated Affiliates - Balance at March 31, 2024:

Balance at June 30, 2024 $ 13,160

Unconsolidated Affiliates - Balance at June 30, 2024:

Atalanta Sosnoff $ 8,294

The following table represents the composition of AUM for Wealth Management as of March 31, 2024:

The following table represents the composition of AUM for Wealth Management as of June 30, 2024:

Equities 66 %

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

For the three months ended March 31, 2024, AUM for Wealth Management increased 6% , primarily reflecting an increase due to market appreciation.

Performance for the three months ended March 31, 2024 reflected:

• Wealth Management lagged the S&P 500 on a 1 and 3-year basis by approximately 40 basis points and 2%, respectively

• Wealth Management outperformed the fixed income composite on a 1 and 3-year basis by approximately 1% and 30 basis points, respectively

For the six months ended June 30, 2024, AUM for Wealth Management increased 7% , reflecting a 6% increase due to market appreciation and a 1% increase due to flows .

Performance for the six months ended June 30, 2024 reflected:

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

• Wealth Management outperformed the fixed income composite on a 1 and 3-year basis by approximately 1% and 0.4%, respectively

• The S&P 500 was up approximately 15% and the fixed income composite was down approximately 2%

AUM from our unconsolidated affiliates increased 9% compared to December 31, 2023, reflecting increases in both Atalanta Sosnoff and ABS.

Three Months Ended March 31, 2024 versus March 31, 2023

Net Revenues were $19.1 million for the three months ended March 31, 2024, compared to $17.3 million for the three months ended March 31, 2023, an increase of $1.8 million, or 10%.

Asset Management and Administration Fees earned from the management of Wealth Management client portfolios increased $2.7 million, or 17%, for the three months ended March 31, 2024, as associated AUM increased 18%, primarily from market appreciation.

Operating Expenses were $13.9 million for the three months ended March 31, 2024, compared to $13.2 million for the three months ended March 31, 2023, an increase of $0.6 million, or 5%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $10.5 million for the three months ended March 31, 2024, compared to $9.8 million for the three months ended March 31, 2023, an increase of $0.7 million, or 7%.

Non-Compensation expenses, as a component of Operating Expenses, were $3.4 million for the three months ended March 31, 2024, flat compared to the three months ended March 31, 2023.

Income from Equity Method Investments increased 17% from the three months ended March 31, 2023, driven by higher income earned by Atalanta Sosnoff in the first quarter of 2024.

Three Months Ended June 30, 2024 versus June 30, 2023

Net Revenues were $19.2 million for the three months ended June 30, 2024, compared to $17.2 million for the three months ended June 30, 2023, an increase of $2.0 million, or 12%.

Asset Management and Administration Fees earned from the management of Wealth Management client portfolios increased $2.6 million, or 16%, for the three months ended June 30, 2024, as associated AUM increased 15%, primarily from market appreciation.

Operating Expenses were $14.6 million for the three months ended June 30, 2024, compared to $13.4 million for the three months ended June 30, 2023, an increase of $1.3 million, or 9%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $10.9 million for the three months ended June 30, 2024, compared to $9.9 million for the three months ended June 30, 2023, an increase of $1.0 million, or 10%.

Non-Compensation expenses, as a component of Operating Expenses, were $3.7 million for the three months ended June 30, 2024, compared to $3.5 million for the three months ended June 30, 2023, an increase of $0.2 million, or 6%.

Income from Equity Method Investments increased 22% from the three months ended June 30, 2023, driven by higher income earned by Atalanta Sosnoff in the second quarter of 2024.

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

Six Months Ended June 30, 2024 versus June 30, 2023

Net Revenues were $38.3 million for the six months ended June 30, 2024, compared to $34.5 million for the six months ended June 30, 2023, an increase of $3.8 million, or 11%.

Asset Management and Administration Fees earned from the management of Wealth Management client portfolios increased $5.4 million, or 16%, for the six months ended June 30, 2024, as associated AUM increased 15%, primarily from market appreciation.

Operating Expenses were $28.5 million for the six months ended June 30, 2024, compared to $26.6 million for the six months ended June 30, 2023, an increase of $1.9 million, or 7%.

Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $21.3 million for the six months ended June 30, 2024, compared to $19.7 million for the six months ended June 30, 2023, an increase of $1.6 million, or 8%.

Non-Compensation expenses, as a component of Operating Expenses, were $7.2 million for the six months ended June 30, 2024, compared to $6.9 million for the six months ended June 30, 2023, an increase of $0.3 million, or 4%.

Income from Equity Method Investments increased 20% from the six months ended June 30, 2023, driven by higher income earned by Atalanta Sosnoff in 2024.

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

Our operating cash flows are primarily influenced by the timing and receipt of fees and the payment of operating expenses, including incentive compensation to our employees and interest expense on our Notes Payable and lines of credit, and the payment of income taxes.

Advisory and Underwriting fees are generally collected within 90 days of invoice.

Placement fees are generally collected within 180 days of invoice and a portion of certain fees related to private funds capital raising and the private capital businesses may be collected in a period exceeding one year.

Placement fees are generally collected within 180 days of invoice and a portion of certain fees primarily related to private funds capital raising and the private capital businesses may be collected in a period exceeding one year.

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

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

For the Three Months Ended March 31,

For the Six Months Ended June 30,

(dollars in thousands)

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End of Period $ 640,458 $ 529,474

Three Months Ended March 31, 2024.

Cash, Cash Equivalents and Restricted Cash were $578.4 million at March 31, 2024, a decrease of $27.1 million versus Cash, Cash Equivalents and Restricted Cash of $605.5 million at December 31, 2023.

Operating activities resulted in a net outflow of $281.2 million, primarily related to the payment of 2023 bonus awards and deferred cash compensation, which contributed to a decrease to Accrued Compensation and Benefits on our Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2024, partially offset by earnings.

Cash of $576.5 million was provided by investing activities, primarily related to net proceeds from sales and maturities of investment securities and certificates of deposit.

Six Months Ended June 30, 2024.

Cash, Cash Equivalents and Restricted Cash were $640.5 million at June 30, 2024, an increase of $35.0 million versus Cash, Cash Equivalents and Restricted Cash of $605.5 million at December 31, 2023.

Operating activities resulted in a net inflow of $67.3 million, primarily related to earnings, partially offset by the payment of 2023 bonus awards and deferred cash compensation, which contributed to a decrease to Accrued Compensation and Benefits on our Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2024.

Cash of $383.8 million was provided by investing activities, primarily related to net proceeds from sales and maturities of investment securities, partially offset by net purchases of certificates of deposit and purchases of equipment and leasehold improvements.

Financing activities during the period used cash of $411.0 million, primarily for purchases of treasury stock (including for the net settlement of RSUs) and noncontrolling interests, the payment of dividends and distributions made to noncontrolling interest holders.

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currencies to U.S.

Three Months Ended March 31, 2023.

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

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

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

Six Months Ended June 30, 2023.

Cash, Cash Equivalents and Restricted Cash were $529.5 million at June 30, 2023, a decrease of $142.6 million versus Cash, Cash Equivalents and Restricted Cash of $672.1 million at December 31, 2022.

Operating activities resulted in a net outflow of $205.5 million, primarily related to the payment of 2022 bonus awards and deferred cash compensation, which contributed to a decrease to Accrued Compensation and Benefits on our Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2023, partially offset by earnings.

Cash of $480.4 million was provided by investing activities, primarily related to net proceeds from sales and maturities of investment securities and certificates of deposit, partially offset by purchases of equipment and leasehold improvements.

Financing activities during the period used cash of $433.5 million, primarily for purchases of treasury stock (including for net settlement of RSUs) and noncontrolling interests, and dividends and distributions to noncontrolling interest holders.

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

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

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

payment calendar;

these payments are generally made quarterly.

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

During the three months ended March 31, 2024, we repurchased 553,588 Class A Shares, at an average cost per share of $178.21, for $98.7 million, pursuant to our repurchase program.

During the six months ended June 30, 2024, we repurchased 821,788 Class A Shares, at an average cost per share of $180.87, for $148.6 million, pursuant to our repurchase program.

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

During the three months ended March 31, 2024, we

repurchased 933,601 Class A Shares, at an average cost per share of $176.35, for $164.6 million, primarily related to minimum tax withholding requirements of share deliveries.

The aggregate 1,487,189 Class A Shares repurchased during the three months ended March 31, 2024 were acquired for aggregate purchase consideration of $263.3 million, at an average cost per share of $177.04.

During the six months ended June 30, 2024, we repurchased 955,744 Class A Shares, at an average cost per share of $176.67, for $168.9 million, primarily related to minimum tax withholding requirements of share deliveries.

The aggregate 1,777,532 Class A Shares repurchased during the six months ended June 30, 2024 were acquired for aggregate purchase consideration of $317.5 million, at an average cost per share of $178.61.

Noncontrolling Interest Purchases

During the second quarter of 2024, we purchased, at fair value, an additional 0.3% of the EWM Class A Units for $1.0 million.

This purchase resulted in a decrease to Noncontrolling Interest of $0.1 million and a decrease to Additional-Paid-In-Capital of $1.0 million on our Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2024.

During the second quarter of 2023, we purchased, at fair value, an additional 0.7% of the EWM Class A Units for $2.0 million.

This purchase resulted in a decrease to Noncontrolling Interest of $0.2 million and a decrease to Additional-Paid-In-Capital of $1.8 million on our Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2023.

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

from employees of the RECA business for $54.3 million.

Consideration for this transaction included the payment of $6.0 million of cash in 2021, $27.7 million of cash in 2022, and contingent cash consideration which was settled during 2023 and the first quarter of 2024.

We paid contingent cash consideration of $0.7 million during the first quarter of 2023 and $2.0 million during the first quarter of 2024, representing the final payment under this arrangement.

The fair value of the remaining contingent consideration was $2.0 million as of December 31, 2023, which is included within Payable to Employees and Related Parties on our Unaudited Condensed Consolidated Statement of Financial Condition.

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

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

In conjunction with this transaction, we also issued payments in the first quarter of 2023 and 2024, contingent on continued employment.

Accordingly, these payments are treated as compensation expense for accounting purposes in the periods earned.

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

from employees of the RECA business.

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

Private Placement Notes

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The respective Note Purchase Agreements contain customary covenants, including financial covenants requiring compliance with a maximum leverage ratio, a minimum tangible net worth and a minimum interest coverage ratio (for the 2016 Private Placement Notes only), and customary events of default.

As of March 31, 2024, we were in compliance with all of these covenants.

As of June 30, 2024, we were in compliance with all of these covenants.

Lines of Credit

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

We and our consolidated subsidiaries were in compliance with these covenants as of March 31, 2024.

We and our consolidated subsidiaries were in compliance with these covenants as of June 30, 2024.

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 March 31, 2024.

There were no drawings under this facility at June 30, 2024.

East entered into an additional revolving credit facility with PNC, as amended on June 29, 2023, in an aggregate principal amount of up to $55.0 million to be used for working capital and other corporate activities.

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

We and our consolidated subsidiaries were in compliance with these covenants as of March 31, 2024.

We and our consolidated subsidiaries were in compliance with these covenants as of June 30, 2024.

Drawings under this facility bear interest at 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 March 31, 2024.

There were no drawings under this facility at June 30, 2024.

EGL entered into a subordinated revolving credit facility with PNC, as amended on November 6, 2023, in an aggregate principal amount of up to $75.0 million, to be used as needed in support of capital requirements from time to time of EGL.

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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 March 31, 2024.

There were no drawings under this facility at June 30, 2024.

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

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

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

Further, we make investments to hedge the economic risk of amounts due under our Deferred

Cash Compensation Program.

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

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For further information see Note 16 to our unaudited condensed consolidated financial statements.

We had total commitments (not reflected on our Unaudited Condensed Consolidated Statements of Financial Condition) relating to future capital contributions to private equity funds of $2.6 million as of March 31, 2024 and December 31, 2023.

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

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

As of March 31, 2024, our current and former Senior Managing Directors owned an aggregate of approximately 1.6 million vested Class A LP Units, 0.3 million vested Class E LP Units, 0.4 million vested Class I LP Units and 0.2 million vested Class K LP Units.

In addition, 0.8 million unvested Class K-P Units, which convert into a number of Class K LP Units

based on the achievement of certain market and service conditions and defined benchmark results, were outstanding as of March 31, 2024.

As of June 30, 2024, our current and former Senior Managing Directors owned an aggregate of approximately 1.6 million vested Class A LP Units, 0.3 million vested Class E LP Units, 0.4 million vested Class I LP Units and 0.2 million vested Class K LP Units.

In addition, 1.1 million unvested Class K-P Units, which convert into a number of Class K LP Units based on the achievement of certain market and service conditions and defined benchmark results, were outstanding as of June 30, 2024.

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

Our Unaudited Condensed Consolidated Statement of Financial Condition as of March 31, 2024 included $569.8 million of Cash and Cash Equivalents and $865.3 million of Investment Securities and Certificates of Deposit, which are generally comprised of highly-liquid investments.

Our Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2024 included $631.6 million of Cash and Cash Equivalents and $1.06 billion of Investment Securities and Certificates of Deposit, which are generally comprised of highly-liquid investments.

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

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

As of March 31, 2024, the fair value of our investments with these products, based on closing prices, was $164.4 million.

We had net realized and unrealized gains of $14.9 million for the three months ended March 31, 2024, from our exchange-traded funds portfolio.

As of June 30, 2024, the fair value of our investments with these products, based on closing prices, was $165.2 million.

We had net realized and unrealized gains of $6.2 million and $21.1 million for the three and six months ended June 30, 2024, respectively, from our exchange-traded funds portfolio.

See Note 6 to our unaudited condensed consolidated financial statements for further information.

We estimate that a hypothetical 10%, 20% and 30% adverse change in the market value of the investments would have resulted in a decrease in pre-tax income of approximately $16.4 million, $32.9 million and $49.3 million, respectively, for the three months ended March 31, 2024.

We estimate that a hypothetical 10%, 20% and 30% adverse change in the market value of the investments would have resulted in a decrease in pre-tax income of approximately $16.5 million, $33.0 million and $49.6 million, respectively, for the three months ended June 30, 2024.

Private Equity Funds

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

We estimate that a hypothetical 10% adverse change in the value of the private equity funds would have resulted in a decrease in pre-tax income of approximately $0.6 million for the three months ended March 31, 2024.

We estimate that a hypothetical 10% adverse change in the value of the private equity funds would have resulted in a decrease in pre-tax income of approximately $0.7 million for the three months ended June 30, 2024.

Exchange Rate Risk

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

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

We have not entered into any transactions to

hedge our exposure to foreign exchange fluctuations in these subsidiaries through the use of derivative instruments or otherwise.

An appreciation or depreciation of any of these currencies relative to the U.S.

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

For the three months ended March 31, 2024, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income (Loss) within the Unaudited Condensed Consolidated Statement of Comprehensive Income was a loss of $3.5 million, net of tax.

For the six months ended June 30, 2024, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income (Loss) within the Unaudited Condensed Consolidated Statement of Comprehensive Income was a loss of $4.3 million, net of tax.

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

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We entered into a foreign currency exchange forward contract during the first quarter of 2023 to buy 30.0 million British Pounds sterling for $36.9 million, which settled during the third quarter of 2023, and resulted in a loss of $0.3 million.

Upon settlement, we entered into a new foreign currency exchange forward contract to buy 30.0 million British Pounds sterling for $36.7 million, which settled during the first quarter of 2024, and resulted in a loss of $0.3 million for the three months ended March 31, 2024.

The contract was recorded at its fair

value of $1.6 million as of December 31, 2023, and was included within Other Current Assets on our Unaudited Condensed Consolidated Statement of Financial Condition.

The contract was recorded at its fair value of $1.6 million as of December 31, 2023, and was included within Other Current Assets on our Unaudited Condensed Consolidated Statement of Financial Condition.

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

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

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

Other Assets includes long-term receivables primarily 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.

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

We reversed bad debt expense of $0.6 million for the three months ended March 31, 2024 and recorded bad debt expense of $3.7 million for the three months ended March 31, 2023.

As of March 31, 2024 and December 31, 2023, total receivables recorded in Accounts Receivable amounted to $331.7 million and $371.6 million, respectively, net of an allowance for credit losses, and total receivables recorded in Other Assets amounted to $85.3 million and $93.7 million, respectively.

We recorded bad debt expense of $1.0 million and $5.3 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, total receivables recorded in Accounts Receivable amounted to $361.1 million and $371.6 million, respectively, net of an allowance for credit losses, and total receivables recorded in Other Assets amounted to $87.1 million and $93.7 million, respectively.

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

As of March 31, 2024, total contract assets recorded in Other Current Assets and Other Assets amounted to $28.6 million and $8.7 million, respectively.

As of June 30, 2024, total contract assets recorded in Other Current Assets and Other Assets amounted to $61.3 million and $2.9 million, respectively.

As of December 31, 2023, total contract assets recorded in Other Current Assets and Other Assets amounted to $85.4 million and $5.8 million, respectively.

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

As of March 31, 2024, we had Investment Securities of $817.3 million, of which 80% were treasury bills and notes.

As of June 30, 2024, we had Investment Securities of $944.5 million, of which 83% were treasury bills and notes.

Critical Accounting Policies and Estimates

The unaudited condensed consolidated financial statements included in this report are prepared in conformity with U.S.

GAAP, which requires management to make estimates and assumptions regarding future events that affect the amounts reported in our consolidated financial statements and their notes, including reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

GAAP, which requires management to make estimates and assumptions regarding future events that affect the amounts reported

in our consolidated financial statements and their notes, including reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

We base these estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis