10q10k10q10k.net
Evercore Inc.

Evercore Inc.EVREarnings & Financial Report

NYSE · Financials · Investment Advice

Evercore Inc., formerly known as Evercore Partners, is a global independent investment banking advisory firm founded in 1995 by Roger Altman, David Offensend, and Austin Beutner. The firm has advised on over $4.7 trillion of merger, acquisition, and restructuring transactions since its founding.

What changed in Evercore Inc.'s 10-K — 2022 vs 2023

Top changes in Evercore Inc.'s 2023 10-K

327 paragraphs added · 350 removed · 289 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

59 edited+15 added−13 removed51 unchanged
State securities regulators and securities exchanges to which EGL is a member also have regulatory or oversight authority over EGL. Our Private Funds business is also impacted by various state and local regulations that restrict or prohibit the use of placement agents in connection with investments by public pension funds.
State securities regulators and securities exchanges of which EGL is a member also have regulatory or oversight authority over EGL. Our Private Funds business is also impacted by various state and local regulations that restrict or prohibit the use of placement agents in connection with investments by public pension funds.
Item 1. Business Overview Evercore is the leading independent investment banking advisory firm in the world based on the dollar volume of announced worldwide merger and acquisition ("M&A") transactions on which we have advised in the last five years (1) .
Item 1. Business Overview Evercore is the leading independent investment banking firm in the world based on the dollar volume of announced worldwide merger and acquisition ("M&A") transactions on which we have advised in the last five years (1) .
Our flexible and integrated teams develop trust with clients by focusing on their objectives. Functionally, we can act as an independent advisor, capital placement agent, or underwriter based on each client's circumstances and preferences. • Strategic Advisory .
Our flexible and integrated teams develop trust with clients by focusing on their objectives. Functionally, we can act as an independent advisor, placement agent, or underwriter based on each client's circumstances and preferences. • Strategic Advisory .
Equities In our Equities business, our experienced research, sales and trading professionals deliver superior client service on a content-led platform, striving to be the best independent resource for equity and macroeconomic research to support our institutional investor clients. • Research . Evercore ISI was recognized as the top ranked independent firm by Institutional Investor in 2022.
Equities In our Equities business, Evercore ISI, our experienced research, sales and trading professionals deliver superior client service on a content-led platform, striving to be the best independent resource for equity and macroeconomic research to support our institutional investor clients. • Research . Evercore ISI was recognized as the top ranked independent firm by Institutional Investor in 2023.
We provide boards and management teams with independent judgment and deep expertise as they navigate their most important transactions and strategic decisions. We also advise as to the timing, structure, financing and pricing of a proposed transaction, as well as assist in negotiating and closing the deal. • Strategic, Defense and Shareholder Advisory .
We provide boards, management teams and financial sponsors with independent judgment and deep expertise as they navigate their most important transactions and strategic decisions. We also advise as to the timing, structure, financing and pricing of a proposed transaction, as well as assist in negotiating and closing the deal. • Strategic, Defense and Shareholder Advisory .
We also provide comprehensive global advisory and distribution services on capital raising for these managers and/or select private fund sponsors, advising and executing on the fundraising process, including competitive positioning and market assessment, preparation of marketing materials, investor development and documentation. • Private Capital Markets and Debt Advisory .
We also provide comprehensive global advisory and distribution services on capital raising for these managers and/or select private fund sponsors, advising and executing on the fundraising process, including competitive positioning and market assessment, preparation of marketing materials, investor development and documentation.
Our investment banking competitors can be categorized into two main groups: (1) large universal banks and bulge bracket firms such as Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and UBS and (2) independent advisory firms such as Centerview, Greenhill, Houlihan Lokey, Lazard, Moelis, Perella Weinberg, PJT Partners and Rothschild, among others.
Our investment banking competitors can be categorized into two main groups: (1) large universal banks and bulge bracket firms such as Bank of America, Barclays, Citigroup, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and UBS and (2) independent advisory firms such as Centerview, Houlihan Lokey, Lazard, Moelis, Perella Weinberg, PJT Partners and Rothschild, among others.
For example, as a registered broker-dealer and member of a self-regulatory organization, we are subject to the SEC's uniform net capital rule, Rule 15c3-1. Rule 15c3-1 specifies the minimum level of net capital a broker-dealer must maintain and also requires that a significant part of a broker-dealer's assets be kept in relatively liquid form.
For example, as a registered broker-dealer and member of a self-regulatory organization, we are subject to the SEC's uniform net capital rule, Rule 15c3-1. Rule 15c3-1 6 Table of Contents specifies the minimum level of net capital a broker-dealer must maintain and also requires that a significant part of a broker-dealer's assets be kept in relatively liquid form.
FINRA, a self-regulatory organization that is subject to oversight by the SEC, adopts and enforces rules governing the conduct, and examines the activities, of its member firms, 7 Table of Contents including EGL. The SEC, FINRA, and other regulators in various jurisdictions impose both conduct-based and disclosure-based requirements with respect to our business.
FINRA, a self-regulatory organization that is subject to oversight by the SEC, adopts and enforces rules governing the conduct, and examines the activities, of its member firms, including EGL. The SEC, FINRA, and other regulators in various jurisdictions impose both conduct-based and disclosure-based requirements with respect to our business.
The FCA is also able to prosecute a number of criminal offenses including, among other things, criminal insider dealing under the Criminal Justice Act 1993 and criminal market manipulation under the Financial Services Act 2012. Regulatory Capital . Regulatory capital requirements form an integral part of the FCA's prudential supervision of FCA authorized firms.
The FCA is also able to prosecute a number of criminal offenses including, among other things, criminal insider dealing under the Criminal Justice Act 1993 and criminal market manipulation under the Financial Services Act 2012. 7 Table of Contents Regulatory Capital . Regulatory capital requirements form an integral part of the FCA's prudential supervision of FCA authorized firms.
This provided that EU law directly applicable in the U.K. would form part of U.K. law at the end of the Brexit transitional period and gave powers to the U.K. government to amend this legislation so that it would operate effectively after Brexit.
This provided that EU law directly applicable in the U.K. would form part of U.K. law at the end of the Brexit transitional period and gave powers to the U.K. government to amend this legislation so that it would operate 8 Table of Contents effectively after Brexit.
In public company situations, our strategic shareholder advice is an integral part of our practice and is a decisive edge for clients seeking to obtain shareholder support for their transactions.
In public company situations, our strategic shareholder advice is an integral part of our practice and is a decisive edge for clients seeking to solve complicated issues and obtain shareholder support for their transactions.
The Market Access Rule requires EGL to have controls and procedures in place to limit financial exposure by establishing capital thresholds for its trading clients and implementing controls to prevent erroneous orders.
The Market Access Rule requires EGL to have controls and procedures in place to limit financial exposure by establishing trading limits for its trading clients and implementing controls to prevent erroneous orders.
Evercore has a German subsidiary, Evercore GmbH ("Evercore Germany"), through which regulated activities can be conducted in Germany and in 9 Table of Contents other EU and EEA jurisdictions on a cross-border basis, subject to certain exceptions and in compliance with applicable legal requirements.
Evercore has a German subsidiary, Evercore GmbH ("Evercore Germany"), through which regulated activities can be conducted in Germany and in other EU and EEA jurisdictions on a cross-border basis, subject to certain exceptions and in compliance with applicable legal requirements.
Investment Banking Our investment banking business provides strategic advisory, private capital advisory and fundraising, private capital markets and debt advisory and equity capital markets services. Through this business, we provide clients with differentiated strategic and tactical advice, as well as execution to financial sponsors and both public and private companies across a broad range of industry sectors and geographies.
Investment Banking Our investment banking business provides strategic advisory, liability management and restructuring, capital markets advisory and private capital advisory and fundraising services. Through this business, we provide clients with differentiated strategic and tactical advice, as well as execution to financial sponsors and both public and private companies across a broad range of industry sectors and geographies.
Evercore U.K. is authorized to carry out regulated activities including: advising on investments, arranging (bringing about) deals in investments and making arrangements with a view to transactions in investments. Evercore ISI U.K. is also authorized to carry out these activities.
Evercore U.K. is authorized to carry out regulated activities with non retail clients, including: advising on investments, arranging (bringing about) deals in investments and making arrangements with a view to transactions in investments. Evercore ISI U.K. is also authorized to carry out these activities for non retail clients.
We provide advisory services on a full range of matters, including mergers, sales, acquisitions, leveraged buyouts, joint ventures, strategic, defense and shareholder advisory, divestitures, liability management and other restructurings. • Mergers and Acquisitions . In advising companies on mergers, sales, or acquisitions, we evaluate potential targets and acquirers, provide valuation analyses, and evaluate and propose financial and strategic alternatives.
We provide advisory services on a full range of matters, including mergers, sales, acquisitions, leveraged buyouts, joint ventures, strategic, defense and shareholder advisory, divestitures and other tax efficient combinations. • Mergers and Acquisitions . In advising companies on mergers, sales, or acquisitions, we evaluate potential targets and acquirers, provide valuation analyses, and evaluate and propose financial and strategic alternatives.
Failure to comply with any legal and regulatory requirements may result in monetary, regulatory and, in certain cases, criminal penalties. We are also subject to the U.S.
Failure to comply with any legal and regulatory requirements may result in monetary, regulatory and, in certain cases, criminal penalties and significantly harm our reputation. We are also subject to the U.S.
As we begin the year in 2023, our Investment Banking & Equities segment has 130 (2) Advisory Senior Managing Directors and 39 Equities Senior Managing Directors with expertise and client relationships in a wide variety of industry sectors and a broad geographic reach.
As we begin the year in 2024, our Investment Banking & Equities segment has 136 (2) Advisory Senior Managing Directors and 38 Equities Senior Managing Directors with expertise and client relationships in a wide variety of industry sectors and a broad geographic reach.
We have a leading special committee practice, which is driven by, and exemplifies, our overall commitment to independence, discretion, objectivity, and the delivery of unconflicted advice. Our team has a long history of providing impartial advice to special committees and assisting them to meet fiduciary duties and obligations in significant situations. • Transaction Structuring .
We have a leading special committee practice, which is driven by, and exemplifies, our overall commitment to independence, discretion, objectivity, and the delivery of unconflicted advice. Our team has a long history of offering impartial advice to special committees and assisting them to meet fiduciary duties and obligations in significant situations. • Real Estate Strategic Advisory .
Our team provides its clients with execution expertise, independent advice, experienced judgment and key insights on capital formation and capital markets transactions. Our Equity Capital Markets team has the flexibility to engage with our corporate and financial sponsor clients in an underwriting or advisory capacity.
Our team provides its clients with execution expertise, independent advice, experienced judgment and key insights on all aspects of capital formation and capital markets transactions. Our Equity Capital Markets team has the flexibility to engage with our corporate and financial sponsor clients in an underwriting, placement agent or advisory capacity. • Private Capital Markets and Debt Advisory .
Human Capital Management We are a human capital intensive business and our long-term success is dependent on the number, quality and performance of our people. Our key human capital management objectives are to attract, develop, mentor, promote and retain the most talented professionals in our industry.
We promoted three Managing Directors to Partner in our EWM business in 2023. Human Capital Management We are a human capital intensive business and our long-term success is dependent on the number, quality and performance of our people. Our key human capital management objectives are to attract, develop, mentor, promote and retain the most talented professionals in our industry.
United Kingdom Authorization by the Financial Conduct Authority ("FCA") . The FCA is responsible for regulating Evercore Partners International LLP ("Evercore U.K.") and Evercore ISI International Limited ("Evercore ISI U.K."), the London vehicle of Evercore ISI. The Financial Services and Markets Act 2000 ("FSMA") is the basis for the United Kingdom's ("U.K.") financial services regulatory regime.
United Kingdom Authorization by the Financial Conduct Authority ("FCA") . The FCA is responsible for regulating Evercore Partners International LLP ("Evercore U.K."), our U.K. Advisory affiliate, and Evercore ISI International Limited ("Evercore ISI U.K."), our U.K. Equities affiliate. The Financial Services and Markets Act 2000 ("FSMA") is the basis for the United Kingdom's ("U.K.") financial services regulatory regime.
Among other requirements, BaFin requires Evercore Germany, as a regulated entity, to comply with capital, liquidity, governance and business conduct requirements, and has a range of supervisory and disciplinary powers which it is able to use in overseeing the activities of the firm.
Accordingly, Evercore Germany is authorized to provide the aforementioned services across the EU on a cross-border basis. Among other requirements, BaFin requires Evercore Germany, as a regulated entity, to comply with capital, liquidity, governance and business conduct requirements, and has a range of supervisory and disciplinary powers which it is able to use in overseeing the activities of the firm.
We provide corporate finance advisory services, including advisory services relating to private credit, growth equity and structured equity. This includes structuring and executing private market transactions for public and private corporate clients who require direct private equity, credit, or hybrid financing solutions.
We provide corporate finance advisory services, including advisory services relating to private credit, growth equity and structured equity. This includes structuring and executing private market transactions for corporate and sponsor clients across equity, credit, structured equity or hybrid financing solutions. • Market Risk Management and Hedging .
We offer various resources and seminars related to different aspects of healthy living, including a focus on employees’ health, welfare, nutrition, stress management and financial wellness. • Compensation Structure: Our compensation structure, including our comprehensive benefit package, is designed to attract, motivate and retain highly talented employees. ◦ We have consistently sought to closely align pay with performance.
We offer various resources and seminars related to different aspects of healthy living, including a focus on employees' health, welfare, nutrition, stress management and financial wellness. • Compensation Structure: We have consistently sought to closely align pay with performance.
The compliance requirements of the DFSA include, among other things, capital, liquidity, governance, conduct of business requirements and anti-money laundering, counter-terrorist financing and sanctions requirements and apply to all activities conducted by Evercore Advisory (Middle East) Limited in and from the DIFC.
The compliance requirements for DFSA licensed entities include, among other things, capital, liquidity, governance, conduct of business requirements and anti-money laundering, counter-terrorist financing and sanctions requirements which apply to all activities conducted by Evercore Advisory (Middle East) Limited in or from the DIFC. 9 Table of Contents Canada In Canada, our subsidiary, Evercore Partners Canada Ltd.
(1) Based on Refinitiv data (2) Senior Managing Director headcount as of December 31, 2022, adjusted to include one additional Advisory Senior Managing Director committed to join in the first quarter of 2023. 2 Table of Contents • Special Committee Assignments .
(1) Based on Refinitiv data (2) Senior Managing Director headcount as of December 31, 2023, adjusted to include one additional Advisory Senior Managing Director that joined in January 2024. 2 Table of Contents • Special Committee Assignments .
As U.K. authorized persons, Evercore U.K. and Evercore ISI U.K. are subject to the FCA's high-level principles for businesses, conduct of business obligations and organizational requirements. The FCA has extensive powers to supervise and intervene in the affairs of the firms.
As U.K. authorized persons, Evercore U.K. and Evercore ISI U.K. are subject to the FCA's high-level principles for businesses, conduct of business obligations and organizational requirements.
In 2022, our Investment Banking & Equities segment generated $2.722 billion, or 98% of our revenues, excluding Other Revenue, net, ($3.205 billion, or 98%, in 2021 and $2.238 billion, or 98%, in 2020) and earned 651 fees from clients for advisory and underwriting transactions.
In 2023, our Investment Banking & Equities segment generated $2.28 billion, or 97% of our revenues, excluding Other Revenue, net, ($2.72 billion, or 98%, in 2022 and $3.21 billion, or 98%, in 2021) and earned 666 fees from clients for advisory and underwriting transactions.
Some examples of our programs, initiatives and efforts to attract, develop, mentor, promote and retain the most talented professionals in our industry include: • Diversity, Equity and Inclusion: DE&I is a major focus of our senior management and Board of Directors.
Some examples of our programs, initiatives and efforts to attract, develop, mentor, promote and retain the most talented professionals in our industry include: 4 Table of Contents • Diversity, Equity and Inclusion: DE&I is one of our Core Values and continues to be a top priority for our senior management and Board of Directors.
Competition The financial services industry is intensely competitive, and we expect it to remain so. Our competitors are other investment banking, financial advisory and investment management firms. We compete both globally and on a regional, product or niche basis.
We believe our efforts in managing our workforce have been effective, evidenced by our strong culture and talent development. Competition The financial services industry is intensely competitive, and we expect it to remain so. Our competitors are other investment banking, financial advisory and investment management firms. We compete both globally and on a regional, product or niche basis.
Of equal importance, following our long-term strategy of developing internal talent, we also promoted 17 Advisory Managing Directors to Senior Managing Director and one Equities Managing Director to Senior Managing Director in 2022.
Of equal importance, following our long-term strategy of developing internal talent, we also promoted seven Advisory Managing Directors to Senior Managing Director and one Equities Managing Director to Senior Managing Director in 2023. Additionally, in January 2024, we announced the promotion of seven Advisory Managing Directors to Senior Managing Director and one Equities Managing Director to Senior Managing Director.
Our Strategies for Growth We intend to continue to grow and diversify our businesses, and to further enhance our profile and competitive position, through the following strategies: • Add and Promote Highly Qualified Professionals in our Investment Banking & Equities segment .
We also hold certain interests in entities that manage private equity funds and in the funds they manage. Our Strategies for Growth We intend to continue to grow and diversify our businesses, and to further enhance our profile and competitive position, through the following strategies: • Promote and Recruit Highly Qualified Professionals in our Investment Banking & Equities segment .
It can take a range of disciplinary enforcement actions, including public censure, restitution, fines or sanctions and the award of compensation. 8 Table of Contents FSMA also gives the FCA investigatory and enforcement powers in respect of contraventions of various European Union ("EU") regulations (as implemented into U.K. law following Brexit), including the Market Abuse Regulation, which prohibits insider dealing, unlawful disclosure of inside information and market manipulation.
FSMA also gives the FCA investigatory and enforcement powers in respect of contraventions of various European Union ("EU") regulations (as implemented into U.K. law following Brexit), including the Market Abuse Regulation, which prohibits insider dealing, unlawful disclosure of inside information and market manipulation.
We also ranked #1 for analysts among all firms on a weighted basis. • Sales . Our sales team delivers research-centric service to more than 1,300 institutional clients in the U.S. and abroad. The team provides access to our macro and fundamental research products and our dedicated sales specialists provide unique sector insights. • Trading .
We also ranked #1 for analysts among all firms on a weighted basis (weighted by commissions and top-ranked positions). • Sales . Our sales team delivers research-centric service to more than 1,300 institutional clients in the U.S. and abroad.
Dubai International Financial Centre ("DIFC") Evercore Advisory (Middle East) Limited maintains a license in the DIFC issued by the Dubai Financial Services Authority ("DFSA") with permissions for (i) advising on financial products, (ii) arranging credit and advising on credit and (iii) arranging deals in investments only.
Evercore Advisory (Middle East) Limited maintains licenses issued by the DFSA for: (i) advising on financial products; (ii) arranging credit and advising on credit; and (iii) arranging deals in investments.
Additional legislation, changes in rules promulgated by financial authorities and self-regulatory organizations or changes in the interpretation or enforcement of existing laws and rules, either in the United States or elsewhere, may directly affect our mode of operation and profitability. 10 Table of Contents The U.S. and non-U.S. government agencies and self-regulatory organizations, as well as state securities commissions in the United States, are empowered to conduct periodic examinations and initiate administrative proceedings that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a regulated entity or its directors, officers or employees.
The U.S. and non-U.S. government agencies and self-regulatory organizations, as well as state securities commissions in the United States, are empowered to conduct periodic examinations and initiate administrative proceedings that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a regulated entity or its directors, officers or employees.
Through our Private Capital Advisory ("PCA"), Private Funds Group ("PFG") and Real Estate Capital Advisory ("RECA") teams, we advise managers of private assets – private equity, private debt, real estate, infrastructure and others – seeking to recapitalize or liquidate their assets through a privately negotiated transaction (e.g. fund sales, asset refinancing and fund recapitalizations or continuation funds).
Through our Private Capital Advisory ("PCA") and Private Funds Group ("PFG") teams, we advise private asset managers on capitalizing or liquidating their assets through a privately negotiated transaction (e.g. fund sales, asset refinancing and fund recapitalizations or continuation funds).
With these guiding principles, our Human Capital Group leads our efforts on employment-related matters, including recruiting and hiring, onboarding and training, benefits management, compensation planning, performance management and 4 Table of Contents professional development.
With these guiding principles, our Human Capital Group leads our efforts on employment-related matters, including recruiting and hiring, onboarding and training, benefits management, compensation planning, performance management and professional development. Our Board of Directors and its Nominating and Corporate Governance Committee provide oversight on certain human capital matters, including our Diversity, Equity and Inclusion ("DE&I") initiatives.
We specialize in providing critical and unbiased advice to clients on complex, balance sheet issues and transformational situations. • Private Capital Advisory and Fundraising .
We specialize in providing critical and unbiased advice to clients on complex, balance sheet issues and transformational situations. • Equity Capital Markets . We structure and execute equity and equity-linked capital markets and advisory services for the firm's corporate and financial sponsor clients.
Our corporate access team develops strategic connectivity between company management and investors to maximize the impact of roadshows, field trips, sector and macro strategy conferences. Other Our Investment Banking & Equities segment also includes interests in Luminis Partners ("Luminis") and Seneca Advisors LTDA ("Seneca Evercore"), which are accounted for under the equity method of accounting.
Other Our Investment Banking & Equities segment also includes interests in Luminis Partners ("Luminis") and Seneca Advisors LTDA ("Seneca Evercore"), which are accounted for under the equity method of accounting.
Hong Kong In Hong Kong, our subsidiary, Evercore Asia Limited ("Evercore Asia"), is licensed by the Securities and Futures Commission ("SFC") to conduct certain corporate finance activities and securities dealing and advising activities that are related to corporate finance.
Evercore Hong Kong is licensed with the SFC to conduct certain corporate finance activities and securities dealing and advising activities that are related to corporate finance, and Evercore Hong Kong is required to comply with all applicable laws, rules, and regulations published by the SFC.
The backdrop to these reforms is the Financial Services and Markets Bill which will enable EU financial services law directly applicable in the U.K. to be repealed and replaced by similar U.K. law and regulation. While the Edinburgh Reforms did not set out a comprehensive list of regulations expected to be amended or repealed, these reforms did signal the U.K.
The backdrop to these reforms is the Financial Services and Markets Act 2023 which received Royal Assent in June 2023. The Act will enable EU financial services law directly applicable in the U.K. to be repealed and replaced by similar U.K. law and regulation.
Ltd. maintains a Capital Market Services license issued by the Monetary Authority of Singapore ("MAS") for dealing in capital markets products that are securities and collective investment schemes and advising on corporate finance. The compliance requirements of the MAS include anti-money laundering, conduct of business requirements and rules relating to client assets, among other things.
Failure to comply with these laws may result in monetary, regulatory and, in certain cases, criminal penalties. Singapore In Singapore, Evercore Asia (Singapore) Pte. Ltd. maintains a Capital Market Services license issued by the Monetary Authority of Singapore ("MAS") for dealing in capital markets products that are securities and collective investment schemes and advising on corporate finance.
As of December 31, 2022, we employed approximately 2,120 people (of which approximately 1,700 were employed in Investment Banking & Equities), working in 29 cities around the world. Our global workforce is comprised of approximately 99% full-time and 1% part-time employees.
Our global workforce is comprised of approximately 99% full-time and 1% part-time employees. Approximately 1,600 of our employees were employed in the United States (of which approximately 1,300 were employed in Investment Banking & Equities); the remainder were employed outside the United States, primarily in our Investment Banking & Equities segment.
Evercore Germany has passporting rights to provide cross-border services into the EU which are equivalent to those formerly enjoyed by Evercore U.K. until January 1, 2021. Accordingly, Evercore Germany is authorized to provide the aforementioned services across the EU on a cross-border basis.
Germany In Germany, our subsidiary, Evercore Germany, is licensed by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or "BaFin") to conduct investment advice and investment brokerage activities in Germany. Evercore Germany has passporting rights to provide cross-border services into the EU which are equivalent to those formerly enjoyed by Evercore U.K. until January 1, 2021.
In 2022, our Investment Management segment generated revenue of $64.5 million, or 2% of our revenues, excluding Other Revenue, net ($65.8 million, or 2%, in 2021 and $54.4 million, or 2%, in 2020). • Evercore Wealth Management and Evercore Trust Company. Our U.S.-based Evercore Wealth Management serves high-net-worth individuals, foundations and endowments.
("ETC"), as well as private equity through investments in entities that manage private equity funds. In 2023, our Investment Management segment generated revenue of $67.0 million, or 3% of our revenues, excluding Other Revenue, net ($64.5 million, or 2%, in 2022 and $65.8 million, or 2%, in 2021). • Evercore Wealth Management and Evercore Trust Company.
Our equities trading professionals engage primarily in agency-only transactions, free of the potential conflicts of interest created by proprietary trading. Our team provides seamless execution, placing our clients’ interests first and executing transactions with efficiency, objectivity and discretion. • Corporate Access .
The team provides access to our macro and fundamental research products and our dedicated sales specialists provide unique sector insights. • Trading . Our equities trading professionals engage primarily in agency-only transactions, free of the potential conflicts of interest created by proprietary trading.
Through our broad-based equity program, we have used equity compensation to create a close alignment of interests between our shareholders and employees. 6 Table of Contents • Community: We have also encouraged, supported and assisted our employees in having a positive impact on the communities in which we operate and serve. ◦ Through our Evercore Volunteers program, we have continued our firm-wide community service initiatives, which connect our employees with our community partners in order to address immediate needs, support education and improve public spaces. ◦ During 2022, the Evercore Foundation contributed to organizations that align with its goal of supporting education, healthcare, mental health and critical social services for children and underrepresented groups in the communities in which we live and work.
Our compensation structure, including our comprehensive benefits package, is designed to attract, motivate and retain highly talented employees. • Community: We measure our success not only by our client work and financial results, but also by our contributions to the communities in which we operate and serve. ◦ Through our Evercore Volunteers program, we have continued our firm-wide community service initiatives, which connect our employees with our community partners in order to address immediate needs, support education and improve public spaces. ◦ During 2023, the Evercore Foundation contributed to organizations that align with its goal of supporting education, healthcare, mental health and critical social services for children and underrepresented groups in the communities in which we live and work. 5 Table of Contents As of December 31, 2023, we employed approximately 2,195 people (of which approximately 1,750 were employed in Investment Banking & Equities), working in 28 cities around the world.
Investment Banking & Equities Our Investment Banking & Equities segment includes our investment banking business and our equities business.
We operate globally through our two business segments: (i) Investment Banking & Equities and (ii) Investment Management. Investment Banking & Equities Our Investment Banking & Equities segment includes our investment banking business and our equities business.
Clients at EWM and our affiliated trust company, Evercore Trust Company, N.A. ("ETC"), work directly with dedicated teams of independent thinkers to manage complex wealth and focus on delivering tangible results. As of December 31, 2022, EWM had $10.5 billion of assets under management ("AUM"). • Investments in Affiliates.
Our U.S.-based Evercore Wealth Management serves high-net-worth individuals, foundations and endowments. Clients at EWM and our affiliated trust company, ETC, work directly with dedicated teams to establish distinctive financial objectives to pursue personal, business and legacy goals. As of December 31, 2023, EWM had $12.3 billion of assets under management ("AUM"). • Investments in Affiliates.
We provide integrated advice in connection with the structuring of public and private transactions - including mergers, spin-offs, sales, joint ventures, and capital markets offerings - intended to optimize tax, accounting, and other objectives of the deal. • Restructuring . We provide independent financial restructuring advice to companies, creditors, shareholders, and other stakeholders, both in-and out-of-court.
The team assists with advice and execution across the spectrum of clients and transaction types, including public mergers and acquisitions, portfolio sales and recapitalizations, continuation vehicles, joint ventures, funds, equity capital markets and other bespoke advisory engagements. • Liability Management & Restructuring . We provide independent financial restructuring advice to companies, sponsors, creditors, shareholders and other stakeholders, both in-and out-of-court.
We hired seven new Senior Managing Directors in 2022, strengthening our capabilities in Equity Capital Markets, Private Capital Markets and Debt Advisory and Placement, as well as strengthening our coverage in the Technology sector and expanding our geographic reach. We also hired one new Advisory Senior Managing Director in January 2023 committed to join in the first quarter of 2023.
In 2023, 11 new Advisory Senior Managing Directors committed to joining the firm, strengthening our capabilities in Equity Capital Markets, Private Capital Markets, Technology, Communications, Real Estate, Industrials and Business Services sectors and expanding our geographic reach.
These programs support our employees’ physical, mental and financial health by providing tools and resources to help improve or maintain their health status and offer choice, where possible, so that our employees can customize their benefits to meet their needs. ◦ To advance our diversity, equity and inclusion objectives, we have expanded our benefits package to include additional women’s, LBGTQ+ and family support benefits. ◦ In our major offices, our benefits for eligible employees include the following: ▪ Medical, prescription drug, dental and vision insurance ▪ Life and disability insurance ▪ Enhanced healthcare navigation and claims advocacy services ▪ Women’s and family healthcare services ▪ Fertility, adoption and surrogacy assistance ▪ Flexible work arrangements ▪ Back-up child, adult, elder and pet care ▪ Caregiver support services ▪ Employee assistance program ▪ Retirement benefits ▪ Commuter benefits ▪ Health club membership discounts ▪ Identity theft protection ▪ Paid holidays, vacation days, personal days and sick days ▪ Paid parental, marriage, caregiver and bereavement leave ▪ Other corporate benefits ◦ We promote wellness education and encourage our employees to take a mindful and active approach to their overall well-being, including through our EverWELL program.
These programs support our employees' physical, mental and financial health by providing tools and resources to help improve or maintain their health status and offer choice, where possible, so that our employees can customize their benefits to meet their needs. ◦ We promote wellness education and encourage our employees to take a mindful and active approach to their overall well-being, including through our EverWELL program.
The compliance requirements of the SFC include, among other things, paid-up share capital, liquid capital, record keeping, anti-money laundering and conduct of business requirements. The directors and certain officers, employees and other persons affiliated with Evercore Asia are also subject to SFC licensing and/or compliance requirements. Singapore In Singapore, Evercore Asia (Singapore) Pte.
The compliance requirements of the SFC include, among other things, paid-up share capital, liquid capital, record keeping, data storage, anti-money laundering (including the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615)), client classification, conflicts of interest and other conduct of business requirements.
Evercore Veterans Network 5 Table of Contents ◦ Accountability ▪ Diversity recruiting efforts are regularly reviewed by senior management. ◦ We analyze pay equity information throughout the organization. ◦ We continue to regularly share progress on DE&I initiatives and results, including at firm-wide town-halls and with the Board of Directors. • Talent Development: We are committed to the professional development of our employees. ◦ Our training framework involves ongoing development at multiple stages of our employees’ career, including on-the-job training and mentorship. ◦ Our senior professionals play a central role in presenting our training and development programs, including our M&A Black Belt program, and other sector and business appropriate training programs. ◦ We also engage in a comprehensive evaluation process designed to provide our employees with the feedback necessary for their professional development. ◦ We conduct employee surveys and implement feedback into our policies and procedures. • Health, Safety, Wellness and Benefits: The success of our business is fundamentally connected to the well-being of our people.
We are proud that over 100 of our professionals taught at our various programs this year. ◦ We also engage in a comprehensive evaluation process designed to provide our employees with the feedback necessary for their professional development. ◦ We conduct employee surveys and implement feedback into our policies and procedures. • Health, Safety, Wellness and Benefits: The success of our business is fundamentally connected to the well-being of our people.
Government's intentions to propose changes to existing financial services regulation. Therefore, over the coming years it is possible that U.K. and EU financial services may diverge further. Germany In Germany, our subsidiary, Evercore Germany, is licensed by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or "BaFin") to conduct investment advice and investment brokerage activities in Germany.
While the Edinburgh Reforms did not set out a comprehensive list of regulations expected to be amended or repealed, these reforms did signal the U.K. Government's intentions to propose changes to existing financial services regulation. Therefore, over the coming years it is possible that U.K. and EU financial services may diverge further.
We also maintain strategic alliances in India and South Korea. 3 Table of Contents Investment Management Our Investment Management segment includes wealth management and trust services through Evercore Wealth Management L.L.C. ("EWM"), as well as private equity through investments in entities that manage private equity funds.
Luminis is an independent corporate advisory firm based in Australia and Seneca Evercore is an independent corporate advisory firm based in Brazil. 3 Table of Contents Investment Management Our Investment Management segment includes wealth management through Evercore Wealth Management L.L.C. ("EWM") and trust services through Evercore Trust Company, N.A.
Removed
We operate globally through our two business segments: (i) Investment Banking & Equities, and (ii) Investment Management. During the fourth quarter of 2022, we renamed our "Investment Banking" segment to "Investment Banking & Equities." The renaming of this segment did not result from changes to the overall business structure or reporting.
Added
Through our Real Estate Strategic Advisory ("RESA") team, we provide comprehensive strategic advisory and capital raising solutions to public and private companies, sponsors and investors globally.
Removed
We also provide independent advice to corporate clients on debt capital markets products globally and, in conjunction with our Market Risk Management and Hedging team, on associated market-related risks and hedging. • Equity Capital Markets . We provide equity capital markets execution and advisory services.
Added
We provide advisory services on all aspects of market-related risks arising from foreign exchange, interest rates, inflation and commodity prices in connection with cross-border mergers and acquisitions and financing transactions.
Removed
Luminis is an independent corporate advisory firm based in Australia and Seneca Evercore is an independent corporate advisory firm based in Brazil. We maintain a strategic alliance relationship with an independent strategic advisory firm in Mexico founded by certain former employees.
Added
We assist our clients in determining a market-risk strategy in line with their financial objectives and risk appetite and design an approach that balances competitive pricing against the need to maintain confidentiality in relation to prospective transactions. • Private Capital Advisory and Fundraising .
Removed
We also hold certain interests in entities that manage private equity funds and in the funds they manage.
Added
Our team provides seamless execution, placing our clients’ interests first and executing transactions with efficiency, objectivity and discretion. • Corporate Access . Our corporate access team develops strategic connectivity between company management and investors to maximize the impact of roadshows, field trips, sector and macro strategy conferences.
Removed
On March 28, 2022, we sold a portion of our interests in ABS, resulting in a reduction of our ownership percentage from 46% to 26%. • The Investment Management segment also includes the historical results of Evercore Casa de Bolsa, S.A. de C.V. ("ECB"), which was sold in 2020.
Added
We are focused on applying a unified and global approach to DE&I in alignment with our Core Values and business objectives. Progress toward this objective will make our firm stronger and more innovative, and make our contributions to our clients and communities more impactful.
Removed
Additionally, in January 2023, we announced the promotion of seven Advisory Managing Directors to Senior Managing Director, one Equities Managing Director to Senior Managing Director and three Managing Directors to Partner in our EWM business.
Added
We continue to focus on the following DE&I objectives: ◦ Education & Development ▪ Building knowledge and understanding of diversity, equity and inclusion across the organization ◦ Recruiting ▪ Expanding programs to attract a diverse pipeline of the most talented professionals ◦ Inclusive Culture ▪ Cultivating an inclusive environment where active allyship prevails and all professionals feel supported and fully integrated into the firm ◦ Awareness ▪ Building a more aware and involved employee base with committed leadership for our DE&I objectives • Recruiting: We continue to strategically invest in our talent base through campus and lateral recruiting as we execute on our long-term growth strategy. • Talent Development: We are committed to the professional development of our employees. ◦ Our training framework involves ongoing development at multiple stages of our employees' career, including on-the-job training and mentorship. ◦ Our programs are primarily leadership-led and follow the apprenticeship model.
Removed
Our Board of Directors and its Nominating and Corporate Governance Committee provide oversight on certain human capital matters as well, including our Diversity, Equity and Inclusion ("DE&I") initiatives.
Added
The FCA's consumer duty that came into force in July 2023 setting higher level standards for firms under a new FCA principle and rules does not apply to either Evercore U.K. or Evercore ISI U.K. The FCA has extensive powers to supervise and intervene in the affairs of the firms.
Removed
Promoting diversity, equity and inclusion throughout the organization is not only the right thing to do, but it improves our culture and performance, allowing us to better serve our clients and grow our business over the long term.
Added
It can take a range of disciplinary enforcement actions, including public censure, restitution, fines or sanctions and the award of compensation.
Removed
We believe in empowering our people to thrive by maintaining a culture of inclusion that embraces diversity and creates opportunity for all employees. We continue to make progress in accomplishing our DE&I objectives, and are committed to working diligently and transparently with our key stakeholders, including our employees, as we continue to execute on our objectives.
Added
Hong Kong In Hong Kong, the Securities and Futures Commission ("SFC") is responsible for regulating our subsidiary, Evercore Asia Limited ("Evercore Hong Kong").
Removed
We are focused on the following DE&I objectives: ◦ KNOWLEDGE ▪ Building DE&I knowledge and understanding of key DE&I issues across the organization ◦ REPRESENTATION ▪ Increasing representation and promoting greater diversity of backgrounds within Evercore across all levels ◦ BELONGING AND ALLYSHIP ▪ Cultivating an inclusive environment where active allyship prevails and all professionals feel supported and fully integrated into the firm ◦ MERITOCRACY ▪ Strengthening our meritocracy to be experienced similarly among all employees, with equitable access to career and development opportunities ◦ ACCOUNTABILITY ▪ Cultivating broad accountability for driving DE&I progress and ensuring behaviors support DE&I goals We execute on these objectives through a variety of initiatives, including: ◦ Recruiting and Representation ▪ We maintain an internal diversity recruiting team, which has supplemented our campus recruiting strategy to increase diversity in our talent pipeline, through outreach at HBCUs/HSIs and diversity-specific recruiting events. ▪ We have partnerships with external diversity organizations. ▪ We offer scholarships to select diversity candidates. ▪ We have added four new independent directors to our Board since 2018 – three of whom are women, and one of whom is also a person of color.
Added
As the principal regulator of Hong Kong’s securities and futures markets, the SFC is responsible for administering the laws and regulations governing the securities and futures markets in Hong Kong, supervising licensed market intermediaries such as Evercore Hong Kong and retains disciplinary, investigatory and enforcement powers in respect of contraventions of laws, regulations as well as other codes and guidelines promulgated by the SFC.
Removed
Currently, 44% of our independent directors are women. ◦ Education and Training ▪ We provide formal training and mentorship programs for underrepresented employees and conduct trainings for our employees on DE&I issues. ▪ Our diversity networks have hosted events and programs for their members and allies, including several events with prominent leaders outside of and within our own organization. ◦ Building an Inclusive Culture ▪ We maintain a Global Diversity Council, whose membership includes the heads of each of the firm’s employee-led diversity networks, to help build connectivity, create community and advance the firm’s culture of inclusion: ◦ U.S.

… 7 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

53 edited+5 added−13 removed182 unchanged
Financial markets and economic conditions can be negatively impacted by many factors beyond our control, such as the inability to access credit markets, rising interest rates or inflation, terrorism, pandemic, political uncertainty, supply chain disruptions, uncertainty in the U.S. federal fiscal or monetary policy and the fiscal and monetary policy of foreign governments, an evolving regulatory environment (and the timing and nature of regulatory reform), climate change, extreme weather events or natural disasters, the emergence or continuation of widespread health emergencies or pandemics, cyberattacks or campaigns, military conflicts or other geopolitical events.
Financial markets and economic conditions can be negatively impacted by many factors beyond our control, such as the inability to access credit markets, rising interest rates or inflation, terrorism, political uncertainty, supply chain disruptions, uncertainty in the U.S. federal fiscal or monetary policy and the fiscal and monetary policy of foreign governments, an evolving regulatory environment (and the timing and nature of regulatory reform), climate change, extreme weather events or natural disasters, the emergence or continuation of widespread health emergencies or pandemics, cyberattacks or campaigns, military conflicts or other geopolitical events.
Our officers oversee and manage these relationships; however, poor oversight and control on our part or inferior performance or service on the part of the service providers could result in loss of customers, violation of applicable rules and regulations, including, but not limited to, data protection, privacy and anti-money laundering laws and otherwise adversely affect our business and operations.
Our officers oversee and manage these relationships; however, poor oversight and control on our part or inferior performance or service on the part of the service providers could result in a loss of customers, violation of applicable rules and regulations, including, but not limited to, data protection, privacy and anti-money laundering laws and otherwise adversely affect our business and operations.
In addition, the associated litigation process can place operational strain on our business. In addition, as customer trading activities expose us to potential losses, we may have to purchase or sell securities at prevailing market prices in the event a customer fails to settle a trade on its original terms.
In addition, the associated litigation process can place operational strain on our business. Further, as customer trading activities expose us to potential losses, we may have to purchase or sell securities at prevailing market prices in the event a customer fails to settle a trade on its original terms.
Unfavorable market or economic conditions, as well as volatility in the financial markets can materially reduce the demand for our services and present new challenges. Revenue generated by our Investment Banking & Equities business is related to the volume and value of the transactions in which we are involved.
Unfavorable market or economic conditions, as well as volatility in the financial markets, can materially reduce the demand for our services and present challenges. Revenue generated by our Investment Banking & Equities business is related to the volume and value of the transactions in which we are involved.
Our failure to comply with applicable laws or regulations could result in adverse publicity and reputational harm, as well as fines, suspensions of personnel or other sanctions, including revocation of the registration of us or any of our subsidiaries as an investment advisor or broker-dealer.
Our and our employees' failure to comply with applicable laws or regulations could result in adverse publicity and reputational harm, as well as fines, suspensions of personnel or other sanctions, including revocation of the registration of us or any of our subsidiaries as an investment advisor or broker-dealer.
We may face damage to our professional reputation if our services are not regarded as satisfactory or for other reasons. As a financial services firm, we depend to a large extent on our relationships with our clients and our reputation for integrity and high-caliber professional services to attract and retain clients.
We may face damage to our professional reputation if our services are not regarded as satisfactory or for other reasons. As a financial services firm, we depend to a large extent on our relationships with our clients and our reputation for integrity and high-caliber professional services to attract and retain clients and talent.
While the actual increase in tax basis, as well as the amount and timing of any payments under this agreement, will vary depending upon a number of factors, including the timing of exchanges, the price of shares of our Class A common stock at the time of the 22 Table of Contents exchange, the extent to which such exchanges are taxable, and the amount and timing of our income, we expect that, as a result of the size of the increases in the tax basis of the tangible and intangible assets of Evercore LP attributable to our interest in Evercore LP, during the expected term of the tax receivable agreement, the payments that we may make to our Senior Managing Directors could be substantial.
While the actual increase in tax basis, as well as the amount and timing of any payments under this agreement, will vary depending upon a 21 Table of Contents number of factors, including the timing of exchanges, the price of shares of our Class A common stock at the time of the exchange, the extent to which such exchanges are taxable, and the amount and timing of our income, we expect that, as a result of the size of the increases in the tax basis of the tangible and intangible assets of Evercore LP attributable to our interest in Evercore LP, during the expected term of the tax receivable agreement, the payments that we may make to our Senior Managing Directors could be substantial.
We also seek to generate greater business from our restructuring and capital markets services and our Equities business. However, we cannot be certain that we will be able to offset lower revenues from a decline in our M&A activities with increased revenues generated from restructuring and capital markets services or from our Equities business.
We also seek to generate greater business from our restructuring and capital markets services and our Equities business. However, we cannot be certain that we will be able to significantly offset lower revenues from a decline in our M&A activities with increased revenues generated from restructuring and capital markets services or from our Equities business.
Although cyber-attacks have not, to date, had a material impact on our operations, breaches of our, or third-party, network security systems on which we rely could involve attacks that are intended to obtain unauthorized access to and disclose our proprietary information or our client's proprietary information, destroy data or disable, degrade or sabotage our 15 Table of Contents systems, often through the introduction of computer viruses, cyber-attacks and other means, and could originate from a wide variety of sources, including state actors or other unknown third parties outside the firm.
Although cyber-attacks have not, to date, had a material impact on our operations, breaches of our, or third- 14 Table of Contents party, network security systems on which we rely could involve attacks that are intended to obtain unauthorized access to and disclose our proprietary information or our client's proprietary information, destroy data or disable, degrade or sabotage our systems, often through the introduction of computer viruses, cyber-attacks and other means, and could originate from a wide variety of sources, including state actors or other unknown third parties outside the firm.
In addition, we may be at a competitive disadvantage with regard to certain of our competitors who have larger customer bases, have more professionals to serve their 19 Table of Contents clients' needs and are able to provide financing or otherwise commit capital to clients that are often a crucial component of the Investment Banking & Equities transactions on which we advise.
In addition, we may be at a competitive disadvantage with regard to certain of our competitors who have larger customer bases, have more professionals to serve their 18 Table of Contents clients' needs and are able to provide financing or otherwise commit capital to clients that are often a crucial component of the Investment Banking & Equities transactions on which we advise.
Our inability to successfully identify, consummate and integrate alliances, including through joint ventures or investments, as part of our growth initiatives could have adverse consequences to our business.
Our inability to successfully identify, consummate and integrate acquisitions and/or alliances, including through joint ventures or investments, as part of our growth initiatives could have adverse consequences to our business.
Uncertainty about the timing and scope of any changes to existing laws and rules or the implementation of new laws or rules by any regulatory authorities that regulate financial services firms or supervise financial markets, as well as the compliance costs associated with a new regulatory regime, may negatively impact our businesses in the short term, even if the long-term impact of any such changes are positive for our businesses.
Uncertainty about the timing and scope of any changes to existing laws and rules or the implementation of new laws or rules by any regulatory authorities that regulate financial services firms or supervise financial markets, as well as the compliance costs associated with a new regulatory regime, may negatively impact our businesses in the short term, even if the long-term impact of any such changes is positive for our businesses.
As of December 31, 2022, there were certain vested LP Units held by some of our Senior Managing Directors and former employees that may in the future be exchanged for shares of our Class A common stock. The exchanges may result in increases in the tax basis of the assets of Evercore LP that otherwise would not have been available.
As of December 31, 2023, there were certain vested LP Units held by some of our Senior Managing Directors and former employees that may in the future be exchanged for shares of our Class A common stock. The exchanges may result in increases in the tax basis of the assets of Evercore LP that otherwise would not have been available.
For example, in recent years we have made significant investments in various enterprise technologies, such as client relationship management and enterprise resource planning technology.
For example, in recent years we have made significant investments in various enterprise technologies, such as client relationship management, enterprise resource planning and financial planning technology.
We cannot provide assurance that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal of, and interest on, our indebtedness, including our aggregate $345.0 million and £25.0 million of senior notes described in Note 13 to our consolidated financial statements.
We cannot provide assurance that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal of, and interest on, our indebtedness, including our aggregate $345.0 million and £25.0 million of senior notes (the "Private Placement Notes") described in Note 13 to our consolidated financial statements.
Our failure to successfully manage and grow our geographically diverse operations could impair our ability to react quickly to changing business and market conditions and to enforce compliance with non-U.S. standards and procedures. If our international business increases relative to our total business, these factors could have a more pronounced effect on our operating results.
Our failure to successfully manage and grow our geographically diverse operations could impair our ability to react quickly to changing business and market conditions and to enforce compliance with non-U.S. standards, laws, regulations and procedures. If our international business increases relative to our total business, these factors could have a more pronounced effect on our operating results.
Although we have been able to continue business operations, we cannot guarantee in the future that similar events will not result in a material disruption to our business that may cause material financial loss, regulatory action, reputation harm or legal liability, and if significant portions of our workforce, including key personnel, are unable to work effectively because of illness, government actions, or other restrictions in connection with a pandemic, the impact of a pandemic on our business could be exacerbated.
Although in the past we have been able to continue business operations through disruptions, we cannot guarantee in the future that similar events will not result in a material disruption to our business that may cause material financial loss, regulatory action, reputation harm or legal liability, and if significant portions of our workforce, including key personnel, are unable to work effectively because of illness, government actions, or other restrictions in connection with a pandemic, the impact of a pandemic on our business could be exacerbated.
A determination that this interest was an investment security could result in Evercore Inc. being an investment company under the 1940 Act and becoming subject to the registration and other requirements of the 1940 Act. 23 Table of Contents The 1940 Act and the rules thereunder contain detailed parameters for the organization and operations of investment companies.
A determination that this interest was an investment security could result in Evercore Inc. being an investment company under the 1940 Act and becoming subject to the registration and other requirements of the 1940 Act. 22 Table of Contents The 1940 Act and the rules thereunder contain detailed parameters for the organization and operations of investment companies.
For example, alleged or actual failures by us or our employees to provide satisfactory services or to comply with applicable laws, rules or regulations, errors in our public reports, perceptions of our environmental, social and governance practices or business selection, or the public announcement and potential publicity surrounding any of these events, even if inaccurate, satisfactorily addressed, or if no violation or wrongdoing actually occurred, could adversely impact our reputation, our relationships with clients, and our ability to negotiate joint ventures and strategic alliances, any of which could have an adverse effect on our financial condition and results of operations.
For example, alleged or actual failures by us or our employees to provide satisfactory services or to comply with applicable laws, rules or regulations, errors in our public reports, perceptions of our environmental, social and governance practices ("ESG") or business selection, or the public announcement and potential publicity surrounding any of these events, even if inaccurate, satisfactorily addressed, or even if no violation or wrongdoing actually occurred, could adversely impact our reputation, our relationships with clients, our ability to negotiate joint ventures and strategic alliances, and our ability to attract and retain talent, any of which could have an adverse effect on our financial condition and results of operations.
Our inability to develop, integrate and manage acquired companies, joint ventures or other strategic relationships and growth initiatives in an efficient and cost-effective manner, or at all, could have material adverse short- and long-term effects on our operating results, financial condition and liquidity. 18 Table of Contents We may not realize the cost savings, revenue enhancements or other benefits that we expected from our acquisitions and other growth initiatives.
Our inability to develop, integrate and manage acquired companies, joint ventures or other strategic relationships and growth initiatives in an efficient and cost-effective manner, or at all, could have material adverse short- and long-term effects on our operating results, financial condition and liquidity. 17 Table of Contents We may not realize the cost savings, revenue enhancements or other benefits that we expected from our growth initiatives.
Any determination that any of our employees have violated these laws (or similar laws of other jurisdictions in which we do business) could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, 13 Table of Contents injunction on future conduct, securities litigation and reputational damage, any one of which could adversely affect our business, financial position or results of operations.
Any determination that any of our employees have violated these laws (or similar laws of other jurisdictions in which we do business) could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunction on future conduct, securities litigation and reputational damage, any one of which could adversely affect our business, financial position or results of operations.
Under these agreements, these persons have the ability to cause us to register the shares of our Class A common stock they could acquire. 24 Table of Contents The market price of our Class A common stock may be volatile, which could cause the value of our Class A common stock to decline.
Under these agreements, these persons have the ability to cause us to register the shares of our Class A common stock they could acquire. 23 Table of Contents The market price of our Class A common stock may be volatile, which could cause the value of our Class A common stock to decline.
If an employee's failure to follow proper data security procedures results in the improper release of confidential information, or our systems are otherwise compromised, do not operate properly or are disabled, we could suffer a disruption of our business, financial losses, liability to clients, regulatory sanctions and damage to our reputation.
If an employee's failure to follow proper data security procedures results in the improper release of confidential information, or our systems are otherwise compromised, do not operate properly or are disabled, we could suffer a disruption of our business, financial losses, liability to clients, regulatory sanctions and damage to our reputation. See Item 1C.
Our restructuring services, which provide financial advice and investment banking services to companies in financial transition, as well as to creditors, shareholders and potential acquirers, our capital markets services, which provide corporations and financial sponsors with advice relating to a broad array of financing issues, and our Equities business, which provides equity research and agency securities trading for institutional investors, are intentionally smaller than our M&A advisory business and we expect that they will remain that way for the foreseeable future.
Our restructuring services, which provide financial advice and investment banking services to companies in financial transition, as well as to creditors, shareholders and potential acquirers, our capital markets services, which provide corporations and financial sponsors with advice relating to a broad array of financing issues, and our Equities business, which provides equity research 10 Table of Contents and agency securities trading for institutional investors, are smaller than our M&A advisory business and we expect that they will remain that way for the foreseeable future.
Even if we achieve the expected benefits, we may not be able to achieve them within the anticipated time frame. Also, the cost savings and other synergies from these acquisitions may be offset by costs incurred in integrating the companies, increases in other expenses or problems in the business unrelated to these acquisitions.
Even if we achieve the expected benefits, we may not be able to achieve them within the anticipated time frame. Also, the cost savings and other synergies from these growth initiatives may be offset by costs incurred in integrating the companies, increases in other expenses or problems in the business unrelated to these growth initiatives.
Our international operations carry special financial and business risks, which could include, but are not limited to, greater difficulties managing and staffing foreign operations; language and cultural differences; fluctuations in foreign currency exchange rates that could adversely affect our results; unexpected and 21 Table of Contents costly changes in trading policies, regulatory requirements, tariffs and other barriers; restrictions on travel; greater difficulties in collecting accounts receivable; longer transaction cycles; higher operating costs; local labor conditions and regulations; adverse consequences or restrictions on the repatriation of earnings; potentially adverse tax consequences, such as trapped foreign losses; less stable political and economic environments; civil disturbances or other catastrophic events that reduce business activity; disasters or other business continuity problems, such as pandemics, other man-made or natural disaster or disruption involving electronic communications or other services; and international trade issues.
Our international operations carry special financial and business risks, which could include, but are not limited to, greater difficulties managing and staffing foreign operations; language and cultural differences; fluctuations in foreign currency exchange rates that could adversely affect our results; unexpected and 20 Table of Contents costly changes in trading policies, regulatory requirements, tariffs and other barriers; the impact of Brexit on our operations in and the economies of the U.K. and the EU; restrictions on travel; greater difficulties in collecting accounts receivable; longer transaction cycles; higher operating costs; local labor conditions and regulations; adverse consequences or restrictions on the repatriation of earnings; potentially adverse tax consequences, such as trapped foreign losses; less stable political and economic environments; civil disturbances or other catastrophic events that reduce business activity; disasters or other business continuity problems, such as pandemics, other man-made or natural disaster or disruption involving electronic communications or other services; and international trade issues.
Global economic conditions, exacerbated by war or terrorism, health emergencies or financial crises, changes in the equity market place, trade disputes, restrictions on travel, currency exchange 20 Table of Contents rates, commodity prices, interest rates, inflation rates, the yield curve, and other factors that are difficult to predict affect the mix, market values and levels of our AUM.
Global economic conditions, exacerbated by war or terrorism, health emergencies or financial crises, changes in the equity marketplace, trade disputes, restrictions on travel, currency exchange 19 Table of Contents rates, commodity prices, interest rates, inflation rates, the yield curve, and other factors that are difficult to predict affect the mix, market values and levels of our AUM.
It may be difficult for us to achieve 12 Table of Contents steady earnings growth on a quarterly basis, which could, in turn, lead to large adverse movements in the price of our Class A common stock or increased volatility in our stock price generally.
It may be difficult for us to achieve steady earnings growth on a quarterly basis, which could, in turn, lead to large adverse movements in the price of our Class A common stock or increased volatility in our stock price generally.
Our Advisory Fees and Underwriting Fees in the aggregate accounted for 90%, 92% and 89% of our revenues, excluding Other Revenue, net, in 2022, 2021 and 2020, respectively. We expect that we will continue to rely on advisory services for a substantial portion of our revenue for the foreseeable future.
Our Advisory Fees and Underwriting Fees in the aggregate accounted for 88%, 90% and 92% of our revenues, excluding Other Revenue, net, in 2023, 2022 and 2021, respectively. We expect that we will continue to rely on advisory services for a substantial portion of our revenue for the foreseeable future.
Risks Related to Our International Operations A meaningful portion of our revenues are derived from our international operations, which are subject to certain risks. In 2022, we earned 29% of our Total Revenues, excluding Other Revenue, and 29% of our Investment Banking & Equities Revenues from clients located outside of the United States.
Risks Related to Our International Operations A meaningful portion of our revenues are derived from our international operations, which are subject to certain risks. In 2023, we earned 27% of our Total Revenues, excluding Other Revenue, and 27% of our Investment Banking & Equities Revenues from clients located outside of the United States.
Moreover, our role as advisor to our clients on important mergers and acquisitions or restructuring transactions often involves complex analysis and the exercise of professional judgment, including, if appropriate, rendering fairness opinions in connection with mergers and other transactions.
Moreover, our role as advisor to our clients on important mergers and acquisitions or restructuring transactions often involves complex analysis and the exercise of professional judgment, including, in certain circumstances, rendering fairness opinions in connection with mergers and other transactions.
As of December 31, 2022, regulated subsidiaries of Evercore LP had $964.7 million of cash and cash equivalents and investment securities. Amounts held in regulated entities may be subject to advance notification requirements to, or regulatory approval from, their relevant regulatory body prior to distribution, which could delay or restrict access to such capital.
As of December 31, 2023, regulated subsidiaries of Evercore LP had $937.4 million of cash and cash equivalents and investment securities. Amounts held in regulated entities may be subject to advance notification requirements to, or regulatory approval from, their relevant regulatory body prior to distribution, which could delay or restrict access to such capital.
For example, our Investment Banking & Equities business is dependent on our senior Advisory professionals, senior Equities research analysts, traders and executives. In addition, EWM is dependent on a small number of senior portfolio managers and executives. Our professionals possess substantial experience and expertise and strong client relationships.
For example, our Investment Banking & Equities business is dependent on our senior Advisory professionals, senior Equities research analysts, traders and executives. In addition, EWM is dependent on its senior portfolio managers and executives. Our professionals possess substantial experience and expertise and strong client relationships.
Supporting this growth has placed significant demands on our operational, legal, regulatory and financial systems and resources for integration, training and business development efforts.
Supporting this growth has placed significant demands on our operational, legal, regulatory and financial systems and resources for integration, training and business development 11 Table of Contents efforts.
In addition, policies adopted by clients or prospective clients, which may exceed regulatory requirements, may result in additional compliance costs that materially affect our 14 Table of Contents business.
In addition, policies adopted by clients or prospective clients, which may exceed regulatory requirements, may result in additional compliance costs that materially affect our business.
We are exposed to risks and costs associated with protecting the integrity and security of our clients’, employees’ and others’ personal data and other sensitive information. As part of our business, we manage, utilize and store sensitive or confidential client or employee data, including personal data.
"Cybersecurity" for further information regarding our cybersecurity practices, policies and procedures. We are exposed to risks and costs associated with protecting the integrity and security of our clients', employees' and others' personal data and other sensitive information. As part of our business, we manage, utilize and store sensitive or confidential client or employee data, including personal data.
Unfavorable market conditions may also lead to a reduction in revenues from our underwriting and placement agent activities, our private funds advisory and private capital markets businesses, and to the extent that adverse economic market conditions affect M&A and capital raising activities generally, the demand for the research and other services provided by our Equities business could correspondingly decline.
Unfavorable market conditions may also lead to a reduction in revenues from our underwriting and placement agent activities, our private funds advisory and private capital markets businesses, and the demand for the research and other services provided by our Equities business could correspondingly decline.
If our employees were to improperly use or disclose confidential information provided by our clients, we could be subject to regulatory sanctions and suffer serious harm to our reputation, financial position, current client relationships and ability to attract future clients and employees.
If our employees were to improperly use or disclose confidential information provided by our clients or other confidential information, we could be subject to investigations, actions and sanctions by regulators and enforcement agencies and suffer serious harm to our reputation, financial position, current client relationships and ability to attract future clients and employees.
In addition, if we were to experience a disaster or other business continuity problem, such as an epidemic, a pandemic, other man-made or natural disaster or disruption involving electronic communications or other services used by us or third parties with whom we conduct business, our continued success will depend, in part, on the availability of our personnel and office facilities and the proper functioning of our computer, software, telecommunications, transaction processing and other 16 Table of Contents related systems and operations, as well as those of third parties on whom we rely.
Any interruption or deterioration in the performance of these third parties or failures of their information systems and technology could impair our operations, affect our reputation and adversely affect our businesses. 15 Table of Contents In addition, if we were to experience a disaster or other business continuity problem, such as an epidemic, a pandemic, other man-made or natural disaster or disruption involving electronic communications or other services used by us or third parties with whom we conduct business, our continued success will depend, in part, on the availability of our personnel and office facilities and the proper functioning of our computer, software, telecommunications, transaction processing and other related systems and operations, as well as those of third parties on whom we rely.
Although we have entered into non-competition agreements with certain senior professionals, there is no guarantee that these agreements provide sufficient incentives or protections to prevent our professionals from resigning to join our competitors or that the non-competition agreements would be upheld if we were to seek to enforce our rights and recent regulatory initiatives have sought to limit the enforceability of such arrangements.
Although we have entered into restrictive covenant agreements with certain senior professionals, there is no guarantee that these agreements provide sufficient incentives or protections to prevent our professionals from resigning to join our competitors or that the restrictive covenant agreements would be upheld if we were to seek to enforce our rights.
It is possible that actual, potential or perceived conflicts could give rise to client dissatisfaction, litigation or regulatory enforcement actions. Appropriately identifying and managing actual or perceived conflicts of interest is complex and difficult, and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with one or more potential or actual conflicts of interest.
Appropriately identifying and managing actual or perceived conflicts of interest is complex and difficult, and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with one or more potential or actual conflicts of interest.
If any of these personnel were to retire, join an existing competitor, form a competing 11 Table of Contents company or otherwise leave us, it could jeopardize our relationships with clients and result in the loss of client engagements and revenues, which may be material.
However, they are not obligated to remain employed with us and the market for qualified professionals is highly competitive. If any of these personnel were to retire, join an existing competitor, form a competing company or otherwise leave us, it could jeopardize our relationships with clients and result in the loss of client engagements and revenues, which may be material.
Because these factors are ever changing, due to market and general business conditions, we cannot predict whether, and to what extent, our goodwill, long-lived intangible assets, equity method investments and other investments may be impaired in future periods. 17 Table of Contents Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could materially adversely affect our business.
Because these factors are ever changing, due to market and general business conditions, we cannot 16 Table of Contents predict whether, and to what extent, our goodwill, long-lived intangible assets, equity method investments and other investments may be impaired in future periods.
Should we issue RSUs in excess of the amount remaining as authorized for issuance under the Second Amended 2016 Plan, these awards would be accounted for as liability awards, with changes in the fair value of these awards reflected as compensation expense until authorization is obtained. Some of our Senior Managing Directors are parties to registration rights agreements with us.
Should we issue RSUs in excess of the amount remaining as authorized for issuance under the Second Amended and Restated 2016 Evercore Inc. Stock Incentive Plan, these awards would be accounted for as liability awards, with changes in the fair value of these awards reflected as compensation expense until authorization is obtained.
For example, due to our equity research activities through our equities business, we face potential conflicts of interest, including situations where our publication of research may conflict with the interests of an advisory client, or allegations that research objectivity is being inappropriately impacted by advisory client considerations.
For example, due to our equity research activities through our equities business, we face potential conflicts of interest, including situations where our publication of research may conflict with the interests of an advisory client, or allegations that research objectivity is being inappropriately impacted by advisory client considerations. 12 Table of Contents Employee misconduct, which is difficult to detect and deter, could harm us by impairing our ability to attract and retain clients while subjecting us to significant legal liability and reputational harm.
Our Investment Banking & Equities business often requires that we deal with confidential matters of great significance to our clients.
There is a risk that our employees could engage in fraud or misconduct that adversely affects our business. Our Investment Banking & Equities business often requires that we deal with confidential matters of great significance to our clients.
Our failure to deal appropriately with actual, potential or perceived conflicts of interest could damage our reputation and materially adversely affect our business. As we have expanded the scope of our businesses and client base, we increasingly confront actual, potential and perceived conflicts of interest relating to our Investment Banking & Equities and Investment Management businesses.
As we have expanded the scope of our businesses and client base, we increasingly confront actual, potential and perceived conflicts of interest relating to our Investment Banking & Equities and Investment Management businesses. It is possible that actual, potential or perceived conflicts could give rise to client dissatisfaction, litigation or regulatory enforcement actions.
We rely heavily on financial, accounting, communication and other data processing systems to securely process, transmit, and store sensitive and confidential client information, and communicate among our locations around the world and with our staff, clients, partners, and vendors. We also depend on third-party software and programs, as well as cloud-based storage platforms as part of our operations.
Our business is subject to various cybersecurity risks. We face various cybersecurity risks related to our businesses on a day-to-day basis. We rely heavily on financial, accounting, communication and other data processing systems to securely process, transmit, and store sensitive and confidential client information, and communicate among our locations around the world and with our staff, clients, partners, and vendors.
On occasion, we enter into foreign currency exchange forward contracts as an economic hedge against exchange rate risk for foreign currency denominated accounts receivable in EGL. There were no foreign currency exchange forward contracts outstanding as of December 31, 2022 and 2021.
On occasion, we enter into foreign currency exchange forward contracts as an economic hedge against exchange rate risk for foreign currency denominated accounts receivable in EGL or other commitments. See Note 19 to our consolidated financial statements for further information.
Our growth strategy is based, in part, on our ability to attract and retain highly skilled and profitable senior professionals across all of our businesses. Due to competition from other firms, we may face difficulties in, or increases in the cost of, recruiting and retaining professionals of a caliber consistent with our business strategy.
Due to competition from other firms, we may face difficulties in, or increases in the cost of, recruiting and retaining professionals of a caliber consistent with our business strategy. In particular, many of our competitors may be able to offer more attractive compensation packages or broader career opportunities.
In these circumstances, we often do not receive any advisory fees other than the reimbursement of certain out-of-pocket expenses, despite the fact that we have devoted considerable resources to these transactions. The loss of even one such mandate may have a significant effect on our near-term financial results.
In these circumstances, we often do not receive any advisory fees other than the reimbursement of certain out-of-pocket expenses, despite the fact that we have devoted considerable resources to these transactions. Our failure to deal appropriately with actual, potential or perceived conflicts of interest could damage our reputation and materially adversely affect our business.
The departure of a number of executive officers or senior professionals could have a material adverse effect on our business, financial condition and results of operations. If we are unable to successfully identify, hire and retain productive individuals, we may not be able to implement our growth strategy successfully.
If we are unable to successfully identify, hire and retain productive individuals, we may not be able to implement our growth strategy successfully. Our growth strategy is based, in part, on our ability to attract and retain highly skilled and profitable senior professionals across all of our businesses.
Our reputation could be impacted by events that may be difficult or impossible to control, and costly or impossible to remediate.
As a result, if a client is not satisfied with 13 Table of Contents our services, it may be more damaging to our business than in other businesses. Our reputation could be impacted by events that may be difficult or impossible to control, and costly or impossible to remediate.
Removed
However, they are not obligated to remain employed with us and the market for qualified professionals is highly competitive.
Added
Recent regulatory initiatives have sought to limit the enforceability of such arrangements. For example, several states have enacted or proposed legislation limiting the enforceability of restrictive covenant agreements. The departure of a number of executive officers or senior professionals could have a material adverse effect on our business, financial condition and results of operations.
Removed
In particular, many of our competitors may be able to offer more attractive compensation packages or broader career opportunities.
Added
The loss of even a small number of such fees could have a significant effect on our near term financial results.
Removed
Employee misconduct, which is difficult to detect and deter, could harm us by impairing our ability to attract and retain clients while subjecting us to significant legal liability and reputational harm. There is a risk that our employees could engage in fraud or misconduct that adversely affects our business.
Added
We also depend on third-party software and programs, as well as cloud-based storage platforms as part of our operations.
Removed
The U.K.'s exit from the European Union could adversely impact our business and operations. The U.K. left the EU on January 31, 2020 and on December 31, 2020, at 11p.m., the Brexit transitional period came to an end.
Added
Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could materially adversely affect our business.
Removed
The U.K. and the EU entered into the TCA on December 24, 2020, which was accompanied by a non-binding Joint Declaration committing the U.K. and the EU to cooperate on matters of financial regulation, which was intended to be facilitated by a Memorandum of Understanding. See Item 1. "Business" for more information.
Added
Some of our Senior Managing Directors are parties to registration rights agreements with us.
Removed
On the basis that the Memorandum of Understanding has not been finalized and that passporting rights are unlikely to be reinstated, Evercore U.K. and Evercore ISI U.K. will continue to be unable to conduct regulated activities on a cross-border and off-shore basis into all EU countries without obtaining regulatory approval outside of the U.K.
Removed
We have taken certain actions that prepared us for this outcome, including obtaining a license from BaFin for Evercore Germany, through which regulated activities can be conducted in Germany and in other EU and EEA jurisdictions on a cross-border basis, subject to certain exceptions and in compliance with applicable legal requirements.
Removed
In addition, activities performed by Evercore U.K. and Evercore ISI U.K., which are not regulated activities, may still be conducted within the EU and the EEA directly, subject to local law restrictions.
Removed
However, the inability of Evercore U.K. and Evercore ISI U.K. themselves to conduct certain regulated activities on a cross-border and off-shore basis into all EU countries could adversely affect the manner in which they operate.
Removed
More broadly, the impact of Brexit on the economic outlook of the Eurozone and the U.K., and associated global implications, remain uncertain notwithstanding agreement of the TCA.
Removed
This is particularly the case in relation to the financial services sector, where EU single market access has not been granted to U.K. financial services companies and EU determinations of equivalence have in general not been forthcoming. Our business is subject to various cybersecurity risks. We face various cybersecurity risks related to our businesses on a day-to-day basis.
Removed
Any interruption or deterioration in the performance of these third parties or failures of their information systems and technology could impair our operations, affect our reputation and adversely affect our businesses.
Removed
For example, the COVID-19 pandemic resulted in substantial disruption to our business operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+1 added−2 removed6 unchanged
This program may be suspended or discontinued at any time and does not have a specified expiration date. Information relating to compensation plans under which the Company's equity securities are authorized for issuance is set forth in Part III, Item 12 of this report. 27 Table of Contents
This program may be suspended or discontinued at any time and does not have a specified expiration date. Information relating to compensation plans under which the Company's equity securities are authorized for issuance is set forth in Part III, Item 12 of this report. 28 Table of Contents
In addition, on February 22, 2022, our Board of Directors authorized (in addition to the net settlement of equity awards) the repurchase of Class A Shares and/or LP Units so that from that date forward, we are able to repurchase an aggregate of the lesser of $1.4 billion worth of Class A Shares and/or LP Units and 10.0 million Class A Shares and/or LP Units.
(2) On February 22, 2022, our Board of Directors authorized (in addition to the net settlement of equity awards) the repurchase of Class A common stock ("Class A Shares") and/or LP Units so that from that date forward, we are able to repurchase an aggregate of the lesser of $1.4 billion worth of Class A Shares and/or LP Units and 10.0 million Class A Shares and/or LP Units.
Dividend Policy The Company paid quarterly cash dividends of $0.72 per share of Class A common stock for the quarters ended December 31, 2022, September 30, 2022 and June 30, 2022, $0.68 per share for the quarters ended March 31, 2022, December 31, 2021, September 30, 2021 and June 30, 2021 and $0.61 per share for the quarter ended March 31, 2021.
Dividend Policy The Company paid quarterly cash dividends of $0.76 per share of Class A common stock for the quarters ended December 31, 2023, September 30, 2023 and June 30, 2023, $0.72 per share for the quarters ended March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022 and $0.68 per share for the quarter ended March 31, 2022.
This is not the actual number of beneficial owners of the Company's common stock, as shares are held in "street name" by brokers and others on behalf of individual owners. There is no trading market for the Evercore Inc. Class B common stock. As of February 15, 2023, there were 50 holders of record of the Class B common stock.
This is not the actual number of beneficial owners of the Company's common stock, as shares are held in "street name" by brokers and others on behalf of individual owners. There is no trading market for the Evercore Inc. Class B common stock. As of February 14, 2024, there were 46 holders of record of the Class B common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Evercore Class A Common Stock Our Class A common stock is listed on the NYSE and is traded under the symbol "EVR." At the close of business on February 15, 2023, there were 33 Class A common stockholders of record.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Evercore Class A Common Stock Our Class A common stock is listed on the NYSE and is traded under the symbol "EVR." At the close of business on February 14, 2024, there were 34 Class A common stockholders of record.
Removed
Recent Sales of Unregistered Securities None 26 Table of Contents Share Repurchases for the period January 1, 2022 through December 31, 2022 2022 Total Number of Shares (or Units) Purchased(1) Average Price Paid Per Share Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs(2) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs(2) January 1 to January 31 574 $ 136.20 — 5,311,647 February 1 to February 28 1,868,073 128.34 1,075,902 9,959,215 March 1 to March 31 122,469 125.00 — 9,959,215 Total January 1 to March 31 1,991,116 $ 128.14 1,075,902 9,959,215 April 1 to April 30 215,573 $ 109.11 208,568 9,750,647 May 1 to May 31 1,267,557 110.10 1,258,788 8,491,859 June 1 to June 30 85,581 110.09 44,942 8,446,917 Total April 1 to June 30 1,568,711 $ 109.96 1,512,298 8,446,917 July 1 to July 31 26,321 $ 96.95 18,790 8,428,127 August 1 to August 31 220,019 100.44 216,085 8,212,042 September 1 to September 30 89,599 94.99 84,555 8,127,487 Total July 1 to September 30 335,939 $ 98.71 319,430 8,127,487 October 1 to October 31 20,612 $ 102.08 19,074 8,108,413 November 1 to November 30 262,498 110.64 256,191 7,852,222 December 1 to December 31 259,379 109.96 244,600 7,607,622 Total October 1 to December 31 542,489 $ 109.99 519,865 7,607,622 Total January 1 to December 31 4,438,255 $ 117.27 3,427,495 7,607,622 (1) Includes the repurchase of 915,214, 56,413, 16,509 and 22,624 shares in treasury transactions arising from net settlement of equity awards to satisfy minimum tax obligations during the three months ended March 31, 2022, June 30, 2022, September 30, 2022 and December 31, 2022, respectively.
Added
Recent Sales of Unregistered Securities None 27 Table of Contents Share Repurchases for the period January 1, 2023 through December 31, 2023 2023 Total Number of Shares (or Units) Purchased(1) Average Price Paid Per Share Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs(2) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs(2) January 1 to January 31 26,255 $ 114.36 23,868 7,583,754 February 1 to February 28 2,065,342 132.48 1,155,185 6,428,569 March 1 to March 31 60,984 130.37 58,331 6,370,238 Total January 1 to March 31 2,152,581 $ 132.20 1,237,384 6,370,238 April 1 to April 30 1,434 $ 114.81 — 6,370,238 May 1 to May 31 371,138 108.49 354,134 6,016,104 June 1 to June 30 164,012 117.32 160,970 5,855,134 Total April 1 to June 30 536,584 $ 111.20 515,104 5,855,134 July 1 to July 31 3,541 $ 130.27 — 5,855,134 August 1 to August 31 288,727 137.67 279,965 5,575,169 September 1 to September 30 4,257 142.25 — 5,575,169 Total July 1 to September 30 296,525 $ 137.65 279,965 5,575,169 October 1 to October 31 3,426 $ 138.81 — 5,575,169 November 1 to November 30 2,836 130.97 — 5,575,169 December 1 to December 31 9,331 148.49 — 5,575,169 Total October 1 to December 31 15,593 $ 143.17 — 5,575,169 Total January 1 to December 31 3,001,283 $ 129.04 2,032,453 5,575,169 (1) Includes the repurchase of 915,197, 21,480, 16,560 and 15,593 shares in treasury transactions arising from net settlement of equity awards to satisfy minimum tax obligations during the three months ended March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023, respectively.
Removed
(2) On April 27, 2021, our Board of Directors authorized (in addition to the net settlement of equity awards) the repurchase of Class A common stock ("Class A Shares") and/or LP Units so that from that date forward, we were able to repurchase an aggregate of the lesser of $750.0 million worth of Class A Shares and/or LP Units and 8.5 million Class A Shares and/or LP Units.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

59 edited+5 added−11 removed22 unchanged
Cash received before the subscription period ends is initially recorded as deferred revenue (a contract liability) and recognized as revenue over the remaining subscription period. Revenue trends in our advisory business generally are correlated to the volume of M&A activity, restructuring activity, which tends to be counter-cyclical to M&A, and capital advisory activity.
Cash received before the subscription period ends is initially recorded as deferred revenue (a contract liability) and recognized as revenue over the remaining subscription period. Revenue trends in our advisory business generally are correlated to the volume of M&A activity, restructuring activity, which generally tends to be counter-cyclical to M&A, and capital advisory activity.
These awards, the amount of which is a function of performance and market conditions, are generally subject to annual vesting requirements over a four-year period beginning at the date of grant, which occurs in the first quarter of each year; accordingly, the expense is generally amortized over the stated vesting period, subject to retirement eligibility.
These awards, the amount granted of which is a function of performance and market conditions, are generally subject to annual vesting requirements over a four-year period beginning at the date of grant, which occurs in the first quarter of each year; accordingly, the expense is generally amortized over the stated vesting period, subject to retirement eligibility.
Revenue trends in our equities business are correlated to market volumes, which generally decrease in periods of low market volatility or unfavorable market or economic conditions. See "Liquidity and Capital Resources" below for further information. Investment Management.
Revenue trends in our equities business are correlated, in part, to market volumes, which generally decrease in periods of low market volatility or unfavorable market or economic conditions. See "Liquidity and Capital Resources" below for further information. Investment Management.
Our Investment Banking & Equities segment earns fees from its clients for providing advice on mergers, acquisitions, divestitures, capital raising, leveraged buyouts, restructurings, private funds advisory and private capital markets services, activism and defense and similar corporate finance matters, and from underwriting and private placement activities, as well as commissions, fees and principal revenues from research and its sales and trading activities.
Our Investment Banking & Equities segment earns fees from its clients for providing advice on mergers, acquisitions, divestitures, capital raising, leveraged buyouts, liability management and restructurings, private funds advisory and private capital markets services, activism and defense and similar corporate finance matters, and from underwriting and private placement activities, as well as commissions, fees and principal revenues from research and sales and trading activities.
Commissions and Related Revenue includes commissions, which are recorded on a trade-date basis or, in the case of payments under commission sharing arrangements, on the date earned. Commissions and Related Revenue also includes subscription fees for the sales of research, as well as revenues from principal transactions primarily executed on a riskless principal basis.
Commissions and Related Revenue includes commissions, which are recorded on a trade-date basis or, in the case of payments under commission sharing arrangements, on the date earned. Commissions and Related Revenue also includes subscription fees for the sales of research, as well as revenues from trades primarily executed on a riskless principal basis.
Item 6. [Reserved] 28 Table of Contents Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with Evercore Inc.'s consolidated financial statements and the related notes included elsewhere in this Form 10-K.
Item 6. [Reserved] 29 Table of Contents Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with Evercore Inc.'s consolidated financial statements and the related notes included elsewhere in this Form 10-K.
In January 2023, our Board of Directors approved the issuance of Class L Interests to certain of our named executive officers, pursuant to which the named executive officers may receive a discretionary distribution of profits from Evercore LP, to be paid in the first quarter of 2024.
In January 2024, our Board of Directors approved the issuance of Class L Interests to certain of our named executive officers, pursuant to which the named executive officers may receive a discretionary distribution of profits from Evercore LP, to be paid in the first quarter of 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 our named executive officers in respect of their service for 2023.
Distributions pursuant to these interests are anticipated to be made in lieu of any cash incentive compensation payments which may otherwise have been made to our named executive officers in respect of their service for 2024.
Client expense reimbursements are recorded as revenue on the Consolidated Statements of Operations on the later of the date an engagement letter is executed or the date we pay or accrue the expense. 29 Table of Contents Other Revenue and Interest Expense.
Client expense reimbursements are recorded as revenue on the Consolidated Statements of Operations on the later of the date an engagement letter is executed or the date we pay or accrue the expense. 30 Table of Contents Other Revenue and Interest Expense.
Excess tax benefits and deficiencies associated with the appreciation or depreciation in our share price upon vesting of employee share-based awards above or below the original grant price are recognized in our Provision for Income Taxes. In addition, net deferred tax assets are impacted by changes to statutory tax rates in the period of enactment.
Excess tax benefits and deficiencies associated with the appreciation or depreciation in our share price upon vesting of 32 Table of Contents employee share-based awards above or below the original grant price are recognized in our Provision for Income Taxes. In addition, net deferred tax assets are impacted by changes to statutory tax rates in the period of enactment.
Other Revenue includes the following: • Interest income and income (losses) on investment securities, including our investment funds and futures contracts which are used as an economic hedge against our deferred cash compensation program, certificates of deposit, cash and cash equivalents, long-term accounts receivable and on our debt security investment in G5 Holdings S.A.
Other Revenue includes the following: • Interest income, including accretion, and income (losses) on investment securities, including our investment funds (which are used as an economic hedge against our deferred cash compensation program), certificates of deposit, cash and cash equivalents, long-term accounts receivable and on our debt security investment in G5 Holdings S.A.
Distributions pursuant to these interests were made in lieu of any cash incentive compensation payments which may otherwise have been made to our named executive officers in respect of their service for 2021 and 2022, respectively. Following the distribution, these Class L Interests were cancelled pursuant to their terms.
Distributions pursuant to these interests are made in lieu of any cash incentive compensation payments which may otherwise have been made to our named executive officers in respect of their service for 2021, 2022 and 2023, respectively. Following the distributions, the Class L Interests are cancelled pursuant to their terms.
Our level of compensation, including deferred compensation, reflects our plan to maintain competitive compensation levels to retain key personnel, and it reflects the impact of newly-hired senior professionals, including related grants of equity and other awards, which are generally valued at their grant date and recorded in employee compensation and benefits expense over the requisite service period, subject to acceleration in certain cases.
Our level of compensation, including deferred compensation, reflects our plan to maintain competitive compensation levels to retain key personnel, and it reflects the impact of newly-hired senior professionals upon their start date, including related grants of equity and other awards, which are generally valued at their grant date and recorded in employee compensation and benefits expense over the requisite service period.
See Note 16 to our consolidated financial statements for further information. 32 Table of Contents Results of Operations The following is a discussion of our results of operations for the years ended December 31, 2022 and 2021.
See Note 16 to our consolidated financial statements for further information. 33 Table of Contents Results of Operations The following is a discussion of our results of operations for the years ended December 31, 2023 and 2022.
Increasing the number of high-caliber, experienced senior level employees is critical to our growth efforts. See Item 1. "Business" for further information. In our advisory businesses, these hires generally do not begin to generate significant revenue in the year they are hired.
Increasing the number of high-caliber, experienced senior level employees is critical to our growth efforts. See Item 1. "Business" for further information. In our advisory businesses, these hires, which begin their service throughout any given year, generally do not begin to generate significant revenue in the year they are hired.
The decrease in the amount of compensation recognized in 2022 principally reflects a lower provision for incentive compensation, partially offset by higher base salaries and higher amortization of prior period deferred compensation awards.
The decrease in the amount of compensation recognized in 2023 principally reflects a lower accrual for incentive compensation, partially offset by higher amortization of prior period deferred compensation awards and higher base salaries.
Retirement eligibility allows for continued vesting of awards after employees depart from the Company, provided they give the minimum advance notice, which is generally six months to one year. We estimate forfeitures in the aggregate compensation cost to be amortized over the requisite service period of the awards.
Retirement eligibility allows for continued vesting of awards after employees depart from the Company, provided they give the minimum advance notice, which is generally six months to one year and comply with certain post-termination obligations. We estimate forfeitures in the aggregate compensation cost to be amortized over the requisite service period of the awards.
Other Expenses of $3.1 million in 2022 included Special Charges, Including Business Realignment Costs, related to charges associated with the prepayment of our Series B Notes , as well as certain professional fees, separation benefits and other charges related to the ongoing wind-down of our administrative functions in Mexico.
Other Expenses of $3.1 million in 2022 reflected Special Charges, Including Business Realignment Costs, related to charges associated with the prepayment of our Series B Notes, as well as certain professional fees, separation benefits and other charges related to the wind-down of our operations in Mexico.
See Note 10 to our consolidated financial statements for further information . For a discussion of 2020, refer to Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations – Impairment of Assets" in our Form 10-K for the year ended December 31, 2021.
See Note 16 to our consolidated financial statements for further information. For a discussion of 2022 versus 2021, refer to Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations" in our Form 10-K for the year ended December 31, 2022.
We record expense related to these distributions in Employee Compensation and Benefits on the Consolidated Statements of Operations and reflect accrued liabilities in Accrued Compensation and Benefits on the Consolidated Statements of Financial Condition.
We record expense equal to the amount of these 31 Table of Contents distributions in Employee Compensation and Benefits on the Consolidated Statements of Operations and reflect accrued liabilities in Accrued Compensation and Benefits on the Consolidated Statements of Financial Condition.
Our Long-term Incentive Plan provides for incentive compensation awards to Advisory Senior Managing Directors, excluding executive officers, who exceed defined benchmark results over four-year performance periods beginning January 1, 2017 (the "2017 Long-term Incentive Plan") and January 1, 2021 (the "2021 Long-term Incentive Plan").
Our Long-term Incentive Plans provide for incentive compensation awards to Advisory Senior Managing Directors, excluding executive officers, who exceed defined benchmark results over four-year performance periods beginning January 1, 2017 (the "2017 Long-term Incentive Plan", which ended on December 31, 2020) and January 1, 2021 (the "2021 Long-term Incentive Plan").
The decrease in the amount of compensation recognized in 2022 principally reflects a lower provision for incentive compensation, partially offset by higher base salaries and higher amortization of prior period deferred compensation awards. Non-compensation expenses as a component of Operating Expenses were $365.4 million in 2022, an increase of $35.7 million, or 11%, versus $329.7 million in 2021.
The decrease in the amount of compensation recognized in 2023 principally reflects a lower accrual for incentive compensation, partially offset by higher amortization of prior period deferred compensation awards and higher base salaries. Non-compensation expenses, as a component of Operating Expenses, were $407.0 million in 2023, an increase of $41.6 million, or 11%, versus $365.4 million in 2022.
Remaining amounts are due to be paid, in cash or Class A Shares, at our discretion, in the first quarter of 2023 (for the 2017 Long-term Incentive Plan) and in the first quarter of 2025, 2026 and 2027 (for the 2021 Long-term Incentive Plan), subject to employment at the time of payment.
Amounts accrued pursuant to the 2021 Long-term Incentive Plan may be paid, in cash or Class A Shares, at our discretion, in the first quarter of 2025, 2026 and 2027, subject to employment at the time of payment.
Impairment of Assets Goodwill At both November 30, 2022 and 2021, in accordance with ASC 350, "Intangibles - Goodwill and Other" ("ASC 350"), we performed our annual Goodwill impairment assessment and concluded that the fair value of our reporting units substantially exceeded their carrying values. For a discussion of 2020, refer to Item 7.
Impairment of Assets Goodwill At both November 30, 2023 and 2022, in accordance with ASC 350, "Intangibles - Goodwill and Other" ("ASC 350"), we performed our annual Goodwill impairment assessment with respect to each of our reporting units and concluded that the fair value of our reporting units substantially exceeded their carrying values.
See Note 10 to our consolidated financial statements for further information • Gains (losses) resulting from foreign currency exchange rate fluctuations • Realized and unrealized gains and losses on interests in private equity funds which we do not manage • A net loss on the sales of our businesses at ECB, as well as a loss related to the release of cumulative foreign exchange losses resulting from the sale and wind-down of our businesses in Mexico in 2020 • Adjustments to amounts due pursuant to our tax receivable agreement, subsequent to its initial establishment, related to changes in enacted tax rates Interest Expense includes interest expense associated with our Notes Payable and lines of credit.
See Note 10 to our consolidated financial statements 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 we do not manage • Adjustments to amounts due pursuant to our tax receivable agreement, subsequent to its initial establishment, related to changes in enacted tax rates Interest Expense includes interest expense associated with our Notes Payable and lines of credit.
Non-compensation expenses, as a component of Operating Expenses, were $351.8 million in 2022, compared to $316.5 million in 2021, an increase of $35.3 million , or 11% .
Non-compensation expenses, as a component of Operating Expenses, were $393.3 million in 2023, compared to $351.8 million in 2022, an increase of $41.5 million , or 12% .
These awards were fully vested as of March 31, 2020 • Special Charges, Including Business Realignment Costs – Includes the following expenses: ◦ 2022 – Includes expenses related to charges associated with the prepayment of our 5.23% Series B senior notes originally due March 30, 2023 (the "Series B Notes"), as well as certain professional fees, separation benefits and other charges related to the ongoing wind-down of our administrative functions in Mexico ◦ 2021 – Includes expenses related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our investment strategy, we decided to wind down during 2021 ◦ 2020 – Includes expenses related to separation and transition benefits and related costs as a result of our review of operations and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of our headquarters in New York and our business 31 Table of Contents realignment initiatives, as well as charges related to the impairment of assets resulting from the wind-down of our businesses in Mexico • Acquisition and Transition Costs – Includes costs incurred in connection with acquisitions, divestitures and other ongoing business development initiatives, primarily comprised of professional fees for legal and other services, including costs in 2020 associated with the sale of our ECB businesses • Intangible Asset and Other Amortization – Includes amortization of intangible assets and other purchase accounting-related amortization associated with certain acquisitions 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 Consolidated Statements of Operations.
Other Expenses 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 our operations in Mexico ◦ 2022 – Expenses related to charges associated with the prepayment of our 5.23% Series B senior notes originally due March 30, 2023 (the "Series B Notes"), as well as certain professional fees, separation benefits and other charges related to the wind-down of our operations in Mexico ◦ 2021 – Expenses related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our investment strategy, we decided to wind-down during 2021 • 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 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 Consolidated Statements of Operations.
Common Shareholders $ 11.61 $ 17.08 $ 8.22 (32 %) 108 % 2022 versus 2021 Net Income Attributable to Evercore Inc. was $476.5 million in 2022, a decrease of $263.6 million, or 36%, compared to $740.1 million in 2021. The changes in our operating results during these years are described below.
Common Shareholders $ 6.37 $ 11.61 $ 17.08 (45 %) (32 %) 2023 versus 2022 Net Income Attributable to Evercore Inc. was $255.5 million in 2023, a decrease of $221.0 million, or 46%, compared to $476.5 million in 2022. The changes in our operating results during these years are described below.
As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 61.5% in 2022, compared to 56.2% in 2021. Income from Equity Method Investments was $8.0 million in 2022, compared to $14.2 million in 2021.
As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 68.3% in 2023, compared to 61.5% in 2022. Income from Equity Method Investments was $6.7 million in 2023, compared to $8.0 million in 2022, reflecting lower contributions from all of our equity method investments in 2023.
Our Investment Management segment includes operations related to the Wealth Management business and interests in private equity funds which we do not manage, and historically included the Institutional Asset Management business. Revenue sources primarily include management fees, fiduciary fees, performance fees and gains (or losses) on our investments.
Our Investment Management segment includes operations related to the Wealth Management business and interests in private equity funds which we do not manage. Revenue sources primarily include management fees, fiduciary fees and gains (or losses) on our investments. Management fees for third party clients generally represent a percentage of AUM.
Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $1.66 billion in 2022 , compared to $1.81 billion in 2021 , a decrease of $151.3 million , or 8% .
Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $1.62 billion in 2023 , compared to $1.66 billion in 2022 , a decrease of $40.6 million , or 2% .
Total Other Expenses of $3.1 million in 2022 included Special Charges, Including Business Realignment Costs, related to charges associated with the prepayment of our Series B Notes, as well as certain professional fees, separation benefits and other charges related to the ongoing wind-down of our administrative functions in Mexico.
Other Expenses of $3.1 million in 2022 reflected Special Charges, Including Business Realignment Costs, related to charges associated with the prepayment of our Series B Notes, as well as certain professional fees, separation benefits and other charges related to the wind-down of our operations in Mexico. 37 Table of Contents For a discussion of 2022 versus 2021, refer to
For the Years Ended December 31, Change 2022 2021 2020 2022 v. 2021 2021 v. 2020 (dollars and share amounts in thousands, except per share data) Revenues Investment Banking & Equities: Advisory Fees $ 2,392,990 $ 2,751,992 $ 1,755,273 (13 %) 57 % Underwriting Fees 122,596 246,705 276,191 (50 %) (11 %) Commissions and Related Revenue 206,207 205,822 206,692 — % — % Asset Management and Administration Fees 64,483 65,784 54,397 (2 %) 21 % Other Revenue, Including Interest and Investments (7,378) 36,782 (7,234) NM NM Total Revenues 2,778,898 3,307,085 2,285,319 (16 %) 45 % Interest Expense 16,850 17,586 21,414 (4 %) (18 %) Net Revenues 2,762,048 3,289,499 2,263,905 (16 %) 45 % Expenses Operating Expenses 2,062,880 2,178,500 1,688,015 (5 %) 29 % Other Expenses 3,126 8,561 49,457 (63 %) (83 %) Total Expenses 2,066,006 2,187,061 1,737,472 (6 %) 26 % Income Before Income from Equity Method Investments and Income Taxes 696,042 1,102,438 526,433 (37 %) 109 % Income from Equity Method Investments 7,999 14,161 14,398 (44 %) (2 %) Income Before Income Taxes 704,041 1,116,599 540,831 (37 %) 106 % Provision for Income Taxes 172,626 248,026 128,151 (30 %) 94 % Net Income 531,415 868,573 412,680 (39 %) 110 % Net Income Attributable to Noncontrolling Interest 54,895 128,457 62,106 (57 %) 107 % Net Income Attributable to Evercore Inc. $ 476,520 $ 740,116 $ 350,574 (36 %) 111 % Diluted Weighted Average Shares of Class A Common Stock Outstanding 41,037 43,321 42,623 (5 %) 2 % Diluted Net Income Per Share Attributable to Evercore Inc.
For the Years Ended December 31, Change 2023 2022 2021 2023 v. 2022 2022 v. 2021 (dollars and share amounts in thousands, except per share data) Revenues Investment Banking & Equities: Advisory Fees $ 1,963,857 $ 2,392,990 $ 2,751,992 (18 %) (13 %) Underwriting Fees 111,016 122,596 246,705 (9 %) (50 %) Commissions and Related Revenue 202,789 206,207 205,822 (2 %) — % Asset Management and Administration Fees 67,041 64,483 65,784 4 % (2 %) Other Revenue, Including Interest and Investments 97,963 (7,378) 36,782 NM NM Total Revenues 2,442,666 2,778,898 3,307,085 (12 %) (16 %) Interest Expense 16,717 16,850 17,586 (1 %) (4 %) Net Revenues 2,425,949 2,762,048 3,289,499 (12 %) (16 %) Expenses Operating Expenses 2,063,893 2,062,880 2,178,500 — % (5 %) Other Expenses 2,921 3,126 8,561 (7 %) (63 %) Total Expenses 2,066,814 2,066,006 2,187,061 — % (6 %) Income Before Income from Equity Method Investments and Income Taxes 359,135 696,042 1,102,438 (48 %) (37 %) Income from Equity Method Investments 6,655 7,999 14,161 (17 %) (44 %) Income Before Income Taxes 365,790 704,041 1,116,599 (48 %) (37 %) Provision for Income Taxes 80,567 172,626 248,026 (53 %) (30 %) Net Income 285,223 531,415 868,573 (46 %) (39 %) Net Income Attributable to Noncontrolling Interest 29,744 54,895 128,457 (46 %) (57 %) Net Income Attributable to Evercore Inc. $ 255,479 $ 476,520 $ 740,116 (46 %) (36 %) Diluted Weighted Average Shares of Class A Common Stock Outstanding 40,099 41,037 43,321 (2 %) (5 %) Diluted Net Income Per Share Attributable to Evercore Inc.
A change in estimated forfeitures is recognized through a cumulative adjustment in the period of the change. 30 Table of Contents In April 2021 and January 2022, our Board of Directors approved the issuance of Class L Interests in Evercore LP ("Class L Interests") to certain of our named executive officers, pursuant to which the named executive officers received a discretionary distribution of profits from Evercore LP, which was paid in the first quarter of 2022 and 2023, respectively.
In April 2021, January 2022 and January 2023, our Board of Directors approved the issuance of Class L Interests in Evercore LP ("Class L Interests") to certain of our named executive officers, pursuant to which the named executive officers receive a discretionary distribution of profits from Evercore LP, paid in the first quarters of 2022, 2023 and 2024, respectively.
"Management's Discussion and Analysis of Financial Condition and Results of Operations – Impairment of Assets" in our Form 10-K for the year ended December 31, 2021.
For a discussion of 2021, refer to Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations – Impairment of Assets" in our Form 10-K for the year ended December 31, 2022. Other Assets We recorded no impairment charges for the years ended December 31, 2023 and 2022. For a discussion of 2021, refer to Item 7.
We periodically monitor our estimated forfeiture rate and adjust our assumptions to the actual occurrence of forfeited awards.
We periodically monitor our estimated forfeiture rate and adjust our 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 decrease was primarily driven by lower income earned by ABS, principally reflecting a decrease in our ownership following the sale of a portion of our interests in 2022. See Note 10 to our consolidated financial statements for further information. The provision for income taxes in 2022 was $172.6 million, which reflected an effective tax rate of 24.5%.
See Note 10 to our consolidated financial statements for further information. The provision for income taxes in 2023 was $80.6 million, which reflected an effective tax rate of 22.0%. The provision for income taxes in 2022 was $172.6 million, which reflected an effective tax rate of 24.5%.
Total Operating Expenses were $2.06 billion in 2022, compared to $2.18 billion in 2021, a decrease of $115.6 million, or 5%. Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $1.70 billion in 2022, a decrease of $151.2 million, or 8%, versus expense of $1.85 billion in 2021.
Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $1.66 billion in 2023, a decrease of $40.6 million, or 2%, versus expense of $1.70 billion in 2022.
For 2022, the dollar value of North American announced and completed M&A activity decreased 38% and 32%, respectively, compared to 2021, and the dollar value of Global announced and completed M&A activity decreased 36% and 21%, respectively, compared to 2021. 35 Table of Contents For the Years Ended December 31, Change 2022 2021 2020 2022 v. 2021 2021 v. 2020 Industry Statistics ($ in billions) (1) Value of North American M&A Deals Announced $ 1,624 $ 2,609 $ 1,443 (38 %) 81 % Value of North American M&A Deals Completed $ 1,570 $ 2,311 $ 1,497 (32 %) 54 % Value of Global M&A Deals Announced $ 3,577 $ 5,624 $ 3,476 (36 %) 62 % Value of Global M&A Deals Completed $ 3,523 $ 4,462 $ 3,228 (21 %) 38 % Evercore Statistics Total Number of Fees From Advisory Client Transactions (2) 651 797 687 (18 %) 16 % Total Number of Fees of at Least $1 million from Advisory Client Transactions (2) 409 502 386 (19 %) 30 % Total Number of Underwriting Transactions (3) 49 117 118 (58 %) (1 %) Total Number of Underwriting Transactions as a Bookrunner (3) 44 100 85 (56 %) 18 % (1) Source: Refinitiv January 5, 2023 (2) Includes Advisory and Underwriting Transactions.
For 2023, the dollar value of North American and Global completed M&A activity over $100 million decreased 16% and 29%, respectively, compared to 2022. 36 Table of Contents For the Years Ended December 31, Change 2023 2022 2021 2023 v. 2022 2022 v. 2021 Industry Statistics ($ in billions) (1) Value of North American M&A Deals Announced $ 1,450 $ 1,536 $ 2,619 (6 %) (41 %) Value of North American M&A Deals Completed $ 1,368 $ 1,630 $ 2,386 (16 %) (32 %) Value of North American M&A Deals Completed Over $100 million $ 1,294 $ 1,543 $ 2,282 (16 %) (32 %) Value of Global M&A Deals Announced $ 2,880 $ 3,436 $ 5,588 (16 %) (39 %) Value of Global M&A Deals Completed $ 2,589 $ 3,592 $ 4,698 (28 %) (24 %) Value of Global M&A Deals Completed Over $100 million $ 2,359 $ 3,309 $ 4,327 (29 %) (24 %) Evercore Statistics Total Number of Fees From Advisory and Underwriting Client Transactions (2) 666 651 797 2 % (18 %) Total Number of Fees of at Least $1 million from Advisory and Underwriting Client Transactions (2) 378 409 502 (8 %) (19 %) Total Number of Underwriting Transactions (2) 47 49 117 (4 %) (58 %) Total Number of Underwriting Transactions as a Bookrunner (2) 43 44 100 (2 %) (56 %) (1) Source: Refinitiv January 19, 2024 (2) Includes Equity and Debt Underwriting Transactions.
(3) Includes Equity and Debt Underwriting Transactions. Investment Banking & Equities Results of Operations 2022 versus 2021 Net Revenues were $2.70 billion in 2022 , compared to $3.22 billion in 2021 , a decrease of $527.8 million, or 16%.
Investment Banking & Equities Results of Operations 2023 versus 2022 Net Revenues were $2.36 billion in 2023, compared to $2.70 billion in 2022 , a decrease of $340.2 million, or 13%.
The decrease in revenues from 2021 was primarily driven by a decrease of $359.0 million, or 13%, in Advisory Fees, reflecting a decrease in the number of fees earned. Underwriting Fees decreased $124.1 million, or 50%, compared to 2021, principally reflecting a decrease in the number of transactions we participated in due to the decline in overall market issuances.
The decrease in revenues from 2022 was primarily driven by a decrease of $429.1 million, or 18%, in Advisory Fees, reflecting a decline in revenue earned from large transactions during 2023. Underwriting Fees decreased $11.6 million, or 9%, compared to 2022, reflecting a decrease in the number of transactions we participated in during 2023.
This was partially offset by a decline in the fair value of contingent consideration owed to former equity interest holders in our RECA business, as well as charitable contributions made to the Evercore Foundation in 2021. Non-Compensation expenses per employee were approximately $176.2 thousand for 2022, versus $174.9 thousand for 2021.
The increase was also attributed to the reversal of expense in 2022 associated with the decline in the fair value of contingent consideration owed to former equity interest holders in our RECA business. Non-Compensation expenses per employee were approximately $186.3 thousand for 2023, versus $176.2 thousand for 2022.
For the Years Ended December 31, Change 2022 2021 2020 2022 v. 2021 2021 v. 2020 (dollars in thousands) Revenues Investment Banking & Equities: Advisory Fees $ 2,392,990 $ 2,751,992 $ 1,755,273 (13 %) 57 % Underwriting Fees 122,596 246,705 276,191 (50 %) (11 %) Commissions and Related Revenue (1) 206,207 205,822 206,692 — % — % Other Revenue, net (1)(2)(3)(4) (25,668) 19,370 (20,770) NM NM Net Revenues 2,696,125 3,223,889 2,217,386 (16 %) 45 % Expenses Operating Expenses 2,009,913 2,125,871 1,637,542 (5 %) 30 % Other Expenses 3,126 7 49,112 NM (100 %) Total Expenses 2,013,039 2,125,878 1,686,654 (5 %) 26 % Operating Income 683,086 1,098,011 530,732 (38 %) 107 % Income from Equity Method Investments (5) 1,217 1,337 1,546 (9 %) (14 %) Pre-Tax Income $ 684,303 $ 1,099,348 $ 532,278 (38 %) 107 % (1) We renamed "Commissions and Related Fees" to "Commissions and Related Revenue" and reclassified $0.9 million of principal trading gains and losses from our institutional equities business from "Other Revenue, net" to "Commissions and Related Revenue" for the year ended December 31, 2020.
For the Years Ended December 31, Change 2023 2022 2021 2023 v. 2022 2022 v. 2021 (dollars in thousands) Revenues Investment Banking & Equities: Advisory Fees $ 1,963,857 $ 2,392,990 $ 2,751,992 (18 %) (13 %) Underwriting Fees 111,016 122,596 246,705 (9 %) (50 %) Commissions and Related Revenue 202,789 206,207 205,822 (2 %) — % Other Revenue, net (1)(2) 78,281 (25,668) 19,370 NM NM Net Revenues 2,355,943 2,696,125 3,223,889 (13 %) (16 %) Expenses Operating Expenses 2,010,757 2,009,913 2,125,871 — % (5 %) Other Expenses 2,921 3,126 7 (7 %) NM Total Expenses 2,013,678 2,013,039 2,125,878 — % (5 %) Operating Income 342,265 683,086 1,098,011 (50 %) (38 %) Income from Equity Method Investments (3) 620 1,217 1,337 (49 %) (9 %) Pre-Tax Income $ 342,885 $ 684,303 $ 1,099,348 (50 %) (38 %) (1) Includes interest expense on Notes Payable and lines of credit of $16.7 million, $16.9 million and $17.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Net Revenues were $2.76 billion in 2022, a decrease of $527.5 million, or 16%, versus Net Revenues of $3.29 billion in 2021. Advisory Fees decreased $359.0 million, or 13%, Underwriting Fees decreased $124.1 million, or 50%, and Commissions and Related Revenue increased $0.4 million compared to 2021. Asset Management and Administration Fees decreased $1.3 million, or 2%, compared to 2021.
Net Revenues were $2.43 billion in 2023, a decrease of $336.1 million, or 12%, versus Net Revenues of $2.76 billion in 2022. Advisory Fees decreased $429.1 million, or 18%, Underwriting Fees decreased $11.6 million, or 9%, and Commissions and Related Revenue decreased $3.4 million, or 2%, compared to 2022.
From time to time, we also grant incentive awards to certain individuals which include both performance and service-based vesting requirements and, in certain awards, market based requirements. These include Class I-P Units of Evercore LP and Class K-P Units of Evercore LP ("Class K-P Units"). See Note 18 to our consolidated financial statements for further information.
These include Class I-P Units of Evercore LP ("Class I-P Units") and Class K-P Units of Evercore LP ("Class K-P Units"). In March 2022, the Class I-P Units converted to Class I LP Units. See Note 18 to our consolidated financial statements for further information.
"Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations" in our Form 10-K for the year ended December 31, 2021.
"Management's Discussion and Analysis of Financial Condition and Results of Operations – Impairment of Assets" in our Form 10-K for the year ended December 31, 2022. 35 Table of Contents Business Segments The following data presents revenue, expenses and contributions from our equity method investments by business segment.
See "Business Segments" below for further information. Ot her Revenue, Including Interest and Investments, decreased $44.2 million compared to 2021, primarily reflecting a shift from gains of $29.0 million in 2021 to losses of $29.8 million in 2022 on our investment funds portfolio due to the overall market decline.
Ot her Revenue, Including Interest and Investments, increased $105.3 million compared to 2022, primarily reflecting a shift from losses of $29.8 million in 2022 to gains of $34.3 million in 2023 on our investment funds portfolio due to overall market appreciation, as well as higher returns on our fixed income investment portfolios, which primarily consist of U.S. treasury bills.
Commissions and Related Revenue increased $0.4 million compared to 2021 , primarily reflecting increased revenues from research subscriptions, partially offset by lower trading volumes.
Commissions and Related Revenue decreased $3.4 million, or 2%, compared to 2022 , primarily reflecting lower trading revenues .
This was partially offset by a decline in the fair value of contingent consideration owed to former equity interest holders in our RECA business, as well as charitable contributions made to the Evercore Foundation in 2021.
The increase was also attributed to the reversal of expense in 2022 associated with the decline in the fair value of contingent consideration owed to former equity interest holders in our RECA business.
(3) Includes a gain of $4.4 million for the year ended December 31, 2021, resulting from the redemption of our G5 debt security. (4) Includes a loss of $21.1 million for the year ended December 31, 2020, resulting from the sale and wind-down of our businesses in Mexico, related to the release of cumulative foreign exchange losses.
(2) Includes a gain of $4.4 million for the year ended December 31, 2021, resulting from the redemption of our G5 debt security. (3) Equity in Luminis and Seneca Evercore is classified within Income from Equity Method Investments.
Business Segments The following data presents revenue, expenses and contributions from our equity method investments by business segment. Investment Banking & Equities The following table summarizes the operating results of the Investment Banking & Equities segment.
Investment Banking & Equities The following table summarizes the operating results of the Investment Banking & Equities segment.
Other Revenue, net, decreased $45.0 million compared to 2021 , primarily reflecting a shift from gains of $29.0 million in 2021 to losses of $29.8 million in 2022 on our investment funds portfolio due to the overall market decline. The decrease was also driven by a $4.4 million gain on the redemption of the G5 debt security in 2021.
Other Revenue, net, increased $103.9 million compared to 2022 , primarily reflecting a shift from losses of $29.8 million in 2022 to gains of $34.3 million in 2023 on our investment funds portfolio due to overall market appreciation, as well as higher returns on our fixed income investment portfolios, which primarily consist of U.S. treasury bills.
Awards issued under the 2017 Long-term Incentive Plan are subject to retirement eligibility requirements after the performance criteria has been achieved. We periodically assess the probability of the benchmarks being achieved and expense the probable payout over the requisite service period of the award. The performance period for the 2017 Long-term Incentive Plan ended on December 31, 2020.
We periodically assess the probability of the benchmarks being achieved and expense the probable payout over the requisite service period of the award. 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.
We made cash distributions under the 2017 Long-term Incentive Plan in March 2022 and 2021, as well as in December 2021, related to the acceleration of certain amounts due in the first quarter of 2022.
The vesting period for the 2017 Long-term Incentive Plan ended on March 15, 2023 and in conjunction with this plan we made cash distributions in 2023, 2022 and 2021.
The investment funds portfolio is used as an economic hedge against our deferred cash compensation program. The decrease was also driven by a $4.4 million gain on the redemption of the G5 debt security in 2021.
The investment funds portfolio is used as an economic hedge against our deferred cash compensation program. Operating Expenses were $2.01 billion in 2023 , flat compared to 2022 .
Non-compensation operating expenses increased from the prior year, primarily driven by an increase in travel and related expenses, as travel, which curtailed during the COVID-19 pandemic, began to resume during the fourth quarter of 2021 and increased throughout 2022, as well as an increase in professional fees and bad debt expense.
Non-compensation operating expenses increased from the prior year, primarily driven by increases in travel and related expenses, as well as communications and information services, principally reflecting higher license fees and research services in 2023.
Total Other Expenses of $8.6 million in 2021 included Special Charges, Including Business Realignment Costs, of $8.6 million related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our investment strategy, we decided to wind down during 2021 and Acquisition and Transition Costs of $0.01 million.
Other Expenses of $2.9 million in 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.
The increase was primarily driven by an increase in travel and related expenses, as travel, which curtailed during the COVID-19 pandemic, began to resume during the fourth quarter of 2021 and increased throughout 2022, as well as an increase in professional fees and bad debt expense.
The increase was primarily driven by increases in travel and related expenses, which reflect continued increased activity in the post COVID-19 period, as well as communications and information services, principally reflecting higher license fees and research services in 2023.
The increase was partially offset by a higher net tax benefit in 2022 associated with the appreciation or depreciation in our share price upon vesting of employee share-based awards above or below the original grant price. Net Income Attributable to Noncontrolling Interest was $54.9 million in 2022 compared to $128.5 million in 2021.
The provision for income taxes in 2023 and 2022 reflects the net impact associated with the appreciation in our share price upon vesting of employee share-based awards above the original grant price of $13.7 million and $19.6 million, respectively, which resulted in a reduction in the effective tax rate of 3.7 and 2.8 percentage points in 2023 and 2022, respectively.
Removed
We completed the sale of the ECB Trust Business on July 2, 2020 and the remaining ECB business on December 16, 2020. Following these transactions, there were no remaining consolidated businesses in the Institutional Asset Management business. Management fees for third party clients generally represent a percentage of AUM.
Added
Asset Management and Administration Fees increased $2.6 million, or 4%, compared to 2022. See "Business Segments" and "Liquidity and Capital Resources" below for further information.
Removed
Prior to the sale of our ECB business in Mexico in 2020, Other Revenue and Interest Expense was also derived from investing customer funds in financing transactions. These transactions were principally repurchases and resales of Mexican government and government agency securities. Revenue and expenses associated with these transactions were recognized over the term of the repurchase or resale transaction.
Added
The investment funds portfolio is used as an economic hedge against our deferred cash compensation program. 34 Table of Contents Total Operating Expenses were $2.06 billion in 2023, flat compared to 2022.
Removed
Other Expenses Other Expenses include the following: • Amortization of LP Units and Certain Other Awards – Includes amortization costs associated with the vesting of Class J limited partnership units of Evercore LP issued in conjunction with the acquisition of International Strategy & Investment ("ISI") and certain other related awards.
Added
The provision for income taxes is also impacted by the apportionment of state and local taxes. Net Income Attributable to Noncontrolling Interest was $29.7 million in 2023, compared to $54.9 million in 2022. The decrease in Net Income Attributable to Noncontrolling Interest reflects lower income at Evercore LP in 2023.
Removed
This was partially offset 33 Table of Contents by higher gains in our fixed income investment portfolios and higher interest income, as well as a $1.3 million gain on the sale of a portion of our interests in ABS during 2022. See Note 10 to our consolidated financial statements for further information.
Added
For 2023, the dollar value of North American announced and completed M&A activity decreased 6% and 16%, respectively, compared to 2022, and the dollar value of Global announced and completed M&A activity decreased 16% and 28%, respectively, compared to 2022.
Removed
The provision for income taxes in 2021 was $248.0 million, which reflected an effective tax rate of 22.2%. The increase in the effective tax rate reflects higher state and local taxes and a lower amount of earnings allocated to noncontrolling interest holders.
Added
Other Expenses of $2.9 million in 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 .
Removed
The decrease in Net Income Attributable to Noncontrolling Interest primarily reflects lower income at Evercore LP in 2022, as well as the decrease in noncontrolling ownership interest in 2022. See Note 16 to our consolidated financial statements for further information. For a discussion of 2021 versus 2020, refer to Item 7.
Removed
Other Assets We recorded no impairment charges for the year ended December 31, 2022. 34 Table of Contents We recorded $8.6 million in Special Charges, Including Business Realignment Costs, on the Consolidated Statement of Operations for the year ended December 31, 2021 , related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our investment strategy, we decided to wind-down during 2021.
Removed
See Note 2 to our consolidated financial statements for further information. (2) Includes interest expense on Notes Payable and lines of credit of $16.9 million, $17.6 million and $18.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Removed
(5) Equity in Luminis and Seneca Evercore is classified as Income from Equity Method Investments.
Removed
This was partially offset by higher gains in our fixed income investment portfolios and higher interest income. Operating Expenses were $2.01 billion in 2022 , compared to $2.13 billion in 2021 , a decrease of $116.0 million, or 5%.
Removed
Ot her Expenses of $0.01 million in 2021 reflected Acquis ition and Transition Costs. For a discussion of 2021 versus 2020, refer to

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

112 edited+12 added−22 removed104 unchanged
Our investing and financing cash flows are primarily influenced by activities to invest our cash in highly liquid securities or bank certificates of deposit, deploy capital to fund investments and acquisitions, raise capital through the issuance of stock or debt, repurchase of outstanding Class A Shares (including for net settlement of RSUs), and/or noncontrolling interest in Evercore LP, as well as our other subsidiaries, payment of dividends and other periodic distributions to our stakeholders.
Our investing and financing cash flows are primarily influenced by activities to invest our cash in highly liquid securities or bank certificates of deposit, deploy capital to fund investments and acquisitions, raise capital through the issuance of stock or debt, repurchase of outstanding Class A Shares (including for the net settlement of RSUs), and/or noncontrolling interest in Evercore LP, as well as our other subsidiaries, payment of dividends and other periodic distributions to our stakeholders.
In addition, on February 22, 2022, our Board of Directors authorized (in addition to the net settlement of equity awards) the repurchase of Class A Shares and/or LP Units so that from that date forward, we are able to repurchase an aggregate of the lesser of $1.4 billion worth of Class A Shares and/or LP Units and 10.0 million Class A Shares and/or LP Units.
On February 22, 2022, our Board of Directors authorized (in addition to the net settlement of equity awards) the repurchase of Class A Shares and/or LP Units so that from that date forward, we are able to repurchase an aggregate of the lesser of $1.4 billion worth of Class A Shares and/or LP Units and 10.0 million Class A Shares and/or LP Units.
Investment Securities and Futures Contracts Investment Securities may include investments in U.S. treasury securities, other debt securities and investments in readily-marketable equity securities, including our portfolio of exchange-traded funds, which are accounted for under ASC 320-10, " Investments - Debt Securities" and ASC 321-10, "Investments - Equity Securities." These 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 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 our portfolio of exchange-traded funds, which are accounted for under ASC 320-10, " Investments - Debt Securities" and ASC 321-10, "Investments - Equity Securities." These 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.
As of December 31, 2022, we were in compliance with all of these covenants. 2022 Private Placement Notes On June 28, 2022, we issued $67.0 million aggregate principal amount of our 4.61% Series J senior notes due November 15, 2028 (the "Series J Notes" or the "2022 Private Placement Notes"), pursuant to a note purchase agreement (the "2022 Note Purchase Agreement") dated as of June 28, 2022, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.
As of December 31, 2023, we were in compliance with all of these covenants. 2022 Private Placement Notes On June 28, 2022, we issued $67.0 million aggregate principal amount of our 4.61% Series J senior notes due November 15, 2028 (the "Series J Notes" or the "2022 Private Placement Notes"), pursuant to a note purchase agreement (the "2022 Note Purchase Agreement") dated as of June 28, 2022, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.
The 2022 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio and a minimum tangible net worth, and customary events of default. As of December 31, 2022, we were in compliance with all of these covenants. Lines of Credit Evercore Partners Services East L.L.C.
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, we were in compliance with all of these covenants. Lines of Credit Evercore Partners Services East L.L.C.
Our liquidity is highly dependent on our revenue stream from our operations, principally from our Investment Banking & Equities segment, which is primarily a function of closing transactions and earning success fees, the timing and realization of which is irregular and dependent upon factors that are not subject to our control.
Our liquidity is highly dependent on our revenue stream from our operations, principally from our Investment Banking & Equities segment, which is primarily a function of closing client transactions and earning success fees, the timing and realization of which is irregular and dependent upon factors that are not subject to our control.
In 2022 and 2021, we performed an assessment of the ultimate realization of our deferred tax assets and determined that the Company should have sufficient future taxable income in the normal course of business to fully realize the portion of the deferred tax assets associated with its U.S. operations and management has concluded that it is more-likely-than-not the deferred tax assets will be realized.
In 2023 and 2022, we performed an assessment of the ultimate realization of our deferred tax assets and determined that the Company should have sufficient future taxable income in the normal course of business to fully realize the portion of the deferred tax assets associated with its U.S. operations and management has concluded that it is more-likely-than-not the deferred tax assets will be realized.
These notes include: $75.0 million aggregate principal amount of our 4.34% Series E senior notes due August 1, 2029 (the "Series E Notes"), $60.0 million aggregate principal amount of our 4.44% Series F senior notes due August 1, 2031 (the "Series F Notes"), $40.0 million aggregate principal amount of our 4.54% Series G senior notes due August 1, 2033 (the "Series G Notes") and £25.0 million aggregate principal amount of our 3.33% Series H senior notes due August 1, 2033 (the "Series H Notes" and together with the Series E Notes, the Series F Notes and the Series G Notes, the "2019 Private Placement Notes"), 43 Table of Contents each of which were issued pursuant to the 2019 Note Purchase Agreement dated as of August 1, 2019 (the "2019 Note Purchase Agreement"), among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.
These notes include: $75.0 million aggregate principal amount of our 4.34% Series E senior notes due August 1, 2029 (the "Series E Notes"), $60.0 million aggregate principal amount of our 4.44% Series F senior notes due August 1, 2031 (the "Series F Notes"), $40.0 million aggregate principal amount of our 4.54% Series G senior notes due August 1, 2033 (the "Series G Notes") and £25.0 million aggregate principal amount of our 3.33% Series H senior notes due August 1, 2033 (the "Series H Notes" and together with the Series E Notes, the Series F Notes and the Series G Notes, the "2019 Private Placement Notes"), each of which were issued pursuant to the 2019 Note Purchase Agreement dated as of August 1, 2019 (the "2019 Note Purchase Agreement"), among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.
Likewise, our liquidity may be adversely impacted by our contractual obligations, including lease obligations. Reduced equity valuations resulting from future adverse economic events and/or market conditions may impact our performance and may result in future net redemptions of AUM from our clients, which would generally result in lower revenues and cash flows.
Likewise, our liquidity may be adversely impacted by our contractual obligations, including lease obligations. Reduced equity valuations resulting from future adverse economic events and/or market conditions may impact our performance and may result in future net redemptions of AUM from our Investment Management clients, which would generally result in lower revenues and cash flows.
We have a commitment for contingent consideration related to the purchase of the outstanding Class R Interests of Private Capital Advisory L.P. from employees of the RECA business in 2021. For further information see " Noncontrolling Interest Purchases" above and Notes 16 and 19 to our consolidated financial statements.
We have a commitment for contingent consideration related to the purchase of the outstanding Class R Interests of Private Capital Advisory L.P. from employees of the RECA business. For further information see " Noncontrolling Interest Purchases" above and Notes 16 and 19 to our consolidated financial statements.
In the case of bankruptcy engagements, fees may be subject to approval of the court. With respect to retainer, announcement and success fees, there are no distinct performance obligations aside from advisory activities, which are generally focused on achieving a milestone (typically, the announcement and/or the closing of a transaction).
In the case of bankruptcy engagements, fees may be subject to approval of the court. With respect to retainer, announcement and success fees in 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).
We also earn subscription fees for the sales of research, as well as revenues from principal transactions 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.
We also earn 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.
Financing activities during the period used cash of $735.6 million, primarily for purchases of treasury stock (including for net settlement of RSUs) and noncontrolling interests, the repayment of our Notes Payable and dividends and distributions to noncontrolling interest holders, partially offset by the issuance of the 2022 Private Placement Notes.
Financing activities during the period used cash of $735.6 million, primarily for purchases of treasury stock (including for net settlement of RSUs) and noncontrolling interests, the repayment of our Notes Payable, the payment of dividends and distributions made to noncontrolling interest holders, partially offset by the issuance of the 2022 Private Placement Notes.
The 2016 Note Purchase Agreement contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio, a minimum tangible net worth and a minimum interest coverage ratio, and customary events of default. As of December 31, 2022, we were in compliance with all of these covenants.
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, we were in compliance with all of these covenants.
In addition, 0.8 million unvested Class K-P Units, which convert into a number of Class K LP Units based on the achievement of certain market and service conditions and defined benchmark results, were outstanding as of December 31, 2022.
In addition, 0.8 million unvested Class K-P Units, which convert into a number of Class K LP Units based on the achievement of certain market and service conditions and defined benchmark results, were outstanding as of December 31, 2023.
(4) Equity in ABS and Atalanta Sosnoff is classified as Income from Equity Method Investments. Investment Management Results of Operations Our Investment Management segment includes the following: • Wealth Management – conducted through EWM and ETC.
(2) Equity in ABS and Atalanta Sosnoff is classified as Income from Equity Method Investments. Investment Management Results of Operations Our Investment Management segment includes the following: • Wealth Management – conducted through EWM and ETC.
East is only permitted to borrow under this facility if there is no undrawn availability under the Existing PNC Facility and must repay indebtedness under this facility prior to repaying indebtedness under the Existing PNC Facility. There were no drawings under this facility at December 31, 2022.
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.
Taxes collected from customers and remitted to governmental authorities are presented on a net basis on the Consolidated Statements of Operations. Investment Management Revenue Our Investment Management segment generates revenues from the management of client assets and through interests in private equity funds which we do not manage.
Taxes collected from customers and remitted to governmental authorities are presented on a net basis on the Consolidated Statements of Operations. 49 Table of Contents Investment Management Revenue Our Investment Management segment generates revenues from the management of client assets and through interests in private equity funds which we do not manage.
Treasury securities. 38 Table of Contents Our Wealth Management business serves individuals, families and related institutions delivering customized investment management, financial planning, and trust and custody services. Investment portfolios are tailored to meet the investment objectives of individual clients and reflect a blend of equity, fixed income and other products.
Treasury securities. Our Wealth Management business serves individuals, families and related institutions delivering customized investment management, financial planning, and trust and custody services. Investment portfolios are tailored to meet the investment objectives of individual clients and reflect a blend of equity, fixed income and other products.
These payments will also be dependent on the RECA business achieving certain revenue performance targets. 2016 Private Placement Notes On March 30, 2016, we issued an aggregate $170.0 million of senior notes, including: $38.0 million aggregate principal amount of our 4.88% Series A senior notes which were due March 30, 2021 (the "Series A Notes"), $67.0 million aggregate principal amount of our Series B Notes which were originally due March 30, 2023, $48.0 million aggregate principal amount of our 5.48% Series C senior notes due March 30, 2026 (the "Series C Notes") and $17.0 million aggregate principal amount of our 5.58% Series D senior notes due March 30, 2028 (the "Series D Notes" and together with the Series A Notes, the Series B Notes and the Series C Notes, the "2016 Private Placement Notes"), pursuant to the 2016 Note Purchase Agreement dated as of March 30, 2016 (the "2016 Note Purchase Agreement"), among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.
These payments are also dependent on the RECA business achieving certain revenue performance targets. 2016 Private Placement Notes On March 30, 2016, we issued an aggregate $170.0 million of senior notes, including: $38.0 million aggregate principal amount of our 4.88% Series A senior notes which were due March 30, 2021 (the "Series A Notes"), $67.0 million aggregate principal amount of our Series B Notes which were originally due March 30, 2023, $48.0 million aggregate principal amount of 43 Table of Contents our 5.48% Series C senior notes due March 30, 2026 (the "Series C Notes") and $17.0 million aggregate principal amount of our 5.58% Series D senior notes due March 30, 2028 (the "Series D Notes" and together with the Series A Notes, the Series B Notes and the Series C Notes, the "2016 Private Placement Notes"), pursuant to the 2016 Note Purchase Agreement dated as of March 30, 2016 (the "2016 Note Purchase Agreement"), among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.
However, we believe that we are not exposed to significant credit risk due to the financial position of the depository institutions or investment vehicles in which those deposits are held. 46 Table of Contents Accounts Receivable consists primarily of advisory fees and expense reimbursements billed to our clients.
However, we believe that we are 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 our clients.
Our receivables collection periods generally are within 90 days of invoice, with the exception of placement fees, which are generally collected within 180 days of invoice, and fees related to private funds capital raising and certain fees related to the private capital businesses, which are collected in a period exceeding one year.
Our receivables collection periods generally are within 90 days of invoice, with the exception of placement fees, which are generally collected within 180 days of invoice, and 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. We recorded bad debt expense of approximately $5.5 million and $6.9 million for the years ended December 31, 2022 and 2020, respectively, and reversed bad debt expense of approximately $0.1 million for the year ended December 31, 2021.
The collection period for restructuring transaction receivables may exceed 90 days. We recorded bad debt expense of approximately $5.6 million and $5.5 million for the years ended December 31, 2023 and 2022, respectively, and reversed bad debt expense of approximately $0.1 million for the year ended December 31, 2021.
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 27, 2024.
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.
In addition to goodwill and intangible assets, we annually assess our equity method investments for impairment (or more frequently if circumstances indicate impairment may have occurred) per ASC 323-10, "Investments – Equity Method and Joint Ventures." We concluded there was no impairment of goodwill, intangible assets or equity method investments during the year ended December 31, 2022.
In addition to goodwill and intangible assets, we annually assess each of our equity method investments for impairment (or more frequently if circumstances indicate impairment may have occurred) per ASC 323-10, "Investments – Equity Method and Joint Ventures." We concluded there was no impairment of goodwill, intangible assets or equity method investments during the years ended December 31, 2023 and 2022.
For both the Level 1 and Level 2 investments, we obtain both active quotes from nationally recognized exchanges and third-party pricing services to determine market or fair value quotes, respectively. For Level 3 investments, pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment.
For both the 38 Table of Contents Level 1 and Level 2 investments, we obtain both active quotes from nationally recognized exchanges and third-party pricing services to determine market or fair value quotes, respectively. For Level 3 investments, pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment.
("East") entered into a loan agreement with PNC Bank, National Association ("PNC") for a revolving credit facility in an aggregate principal amount, as amended on October 29, 2021, (the "Existing PNC Facility"), of up to $30.0 million, to be used for working capital and other corporate activities.
("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 $30.0 million (the "Existing PNC Facility") to be used for working capital and other corporate activities.
East entered into an additional loan agreement with PNC for a revolving credit facility in an aggregate principal amount, as amended on October 29, 2021, of up to $55.0 million, to be used for working capital and other corporate activities. This facility is unsecured.
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 $55.0 million to be used for working capital and other corporate activities. This facility is unsecured.
The Company estimates that Evercore Inc. must generate approximately $1.3 billion of future taxable income to realize the gross deferred tax asset balance, including the valuation allowance, of $328 million. The deferred tax balance is expected to reverse primarily over a period ranging from 5 to 15 taxable years.
The Company estimates that Evercore Inc. must generate approximately $1.5 billion of future taxable income to realize the gross deferred tax asset balance, including the valuation allowance, of $373.8 million. The deferred tax balance is expected to reverse primarily over a period ranging from 5 to 15 taxable years.
These adverse conditions could also have an impact on our goodwill impairment assessment, which is done annually, as of November 30th, or more frequently if circumstances indicate impairment may have occurred.
These adverse conditions could also have an impact on our goodwill impairment assessment, which is done annually, as of November 30 th , or more frequently if circumstances indicate impairment may have occurred.
As of December 31, 2022, our current and former Senior Managing Directors owned an aggregate of approximately 1.7 million vested Class A LP Units, 0.4 million vested Class E LP Units, 0.4 million vested Class I LP Units and 0.1 million vested Class K LP Units.
As of December 31, 2023, our current and former Senior Managing Directors owned an aggregate of approximately 1.7 million vested Class A LP Units, 0.4 million vested Class E LP Units, 0.4 million vested Class I LP Units and 0.2 million vested Class K LP Units.
The 51 Table of Contents market multiple approach includes applying the average earnings multiples of comparable public companies for their respective reporting segment multiplied by the forecasted earnings of the respective reporting unit to yield an estimate of fair value.
The market multiple approach includes applying the average earnings multiples of comparable public companies for their respective reporting segment multiplied by the forecasted earnings of the respective reporting unit to yield an estimate of fair value.
There were no drawings under this facility at December 31, 2022. In addition, EGL's clearing broker provides temporary funding for the settlement of securities transactions. Other Commitments We have long-term obligations for operating lease commitments, principally related to office space, which expire on various dates through 2035.
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. 45 Table of Contents Other Commitments We have long-term obligations for operating lease commitments, principally related to office space, which expire on various dates through 2035.
Success fees for advisory services, such as merger and acquisition 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.
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.
In the event the private equity funds perform below certain thresholds, we may be obligated to repay certain carried interest previously distributed. As of December 31, 2022, $0.6 million of previously distributed carried interest received from the funds was subject to repayment.
In the event the private equity funds perform below certain thresholds, we may be obligated to repay certain carried interest previously distributed. As of December 31, 2023, $0.1 million of previously distributed carried interest received from the funds was subject to repayment.
During periods of unfavorable market or economic conditions - which may result from the current or anticipated impact of inflation, changes in the level of interest rates, changes in the availability of financing, supply chain disruptions, an evolving regulatory environment, climate change, extreme weather events or natural disasters, the emergence or continuation of widespread health emergencies or pandemics, cyberattacks 41 Table of Contents or campaigns, military conflict, including escalating military tension between Russia and Ukraine, terrorism or other geopolitical events - the number and value of M&A transactions, as well as market volumes in equities, generally decrease, and they generally increase during periods of favorable market or economic conditions.
During periods of unfavorable market or economic conditions - which may result from the current or anticipated impact of inflation, changes in the level of interest rates, changes in the availability of financing, supply chain disruptions, an evolving regulatory environment, climate change, extreme weather events or natural disasters, the emergence or continuation of widespread health emergencies or pandemics, cyberattacks or campaigns, military conflict, including escalating international tensions, terrorism or other geopolitical events - the number and value of M&A transactions, as well as market volumes in equities, generally decrease, and they generally increase during periods of favorable market or economic conditions.
We estimate that a hypothetical 10% adverse change in the value of the private equity funds would have resulted in a decrease in pre-tax income of approximately $0.5 million for the year ended December 31, 2022.
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 year ended December 31, 2023.
Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations" in our Form 10-K for the year ended December 31, 2021. 36 Table of Contents Investment Management The following table summarizes the operating results of the Investment Management segment.
Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations" in our Form 10-K for the year ended December 31, 2022. Investment Management The following table summarizes the operating results of the Investment Management segment.
With respect to our Investment Securities portfolio, which is comprised primarily of treasury bills and notes, exchange-traded funds and securities investments, we manage our credit risk exposure by limiting concentration risk and maintaining investment grade credit quality. As of December 31, 2022, we had Investment Securities of $1.3 billion, of which 90% were treasury bills and notes.
With respect to our Investment Securities portfolio, which is comprised primarily of treasury bills and notes, exchange-traded funds and securities investments, we manage our credit risk exposure by limiting concentration risk and maintaining investment grade credit quality. As of December 31, 2023, we had Investment Securities of $1.38 billion, of which 88% were treasury bills and notes.
The Company evaluated Evercore Inc.'s historical U.S. taxable income, which has averaged approximately $423 million per year over the past 7 years, as well as the anticipated taxable income of approximately $668 million in 2022, and taxable income in the future, which indicates sufficient taxable income to support the realization of these deferred tax assets.
The Company evaluated Evercore Inc.'s historical U.S. taxable income, which has averaged approximately $484 million per year over the past 7 years, as well as the anticipated taxable income of approximately $355 million in 2023, and taxable income in the future, which indicates sufficient taxable income to support the realization of these deferred tax assets.
The inputs into the determination of fair value require significant management judgment or estimation. Wealth Management maintained 74% and 75% of Level 1 investments, 21% and 21% of Level 2 investments and 5% and 4% of Level 3 investments as of December 31, 2022 and 2021, respectively.
The inputs into the determination of fair value require significant management judgment or estimation. Wealth Management maintained 76% and 74% of Level 1 investments, 20% and 21% of Level 2 investments and 4% and 5% of Level 3 investments as of December 31, 2023 and 2022, respectively.
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. See Note 19 to our consolidated financial statements for further information.
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. We expect to fund these commitments with cash flows from operations. See Note 19 to our consolidated financial statements for further information.
Treasury Purchases We periodically repurchase Class A Shares and/or LP Units into Treasury (including through the net settlement of equity awards) in order to offset the dilutive effect of equity awards granted as compensation (see Note 18 to our consolidated financial statements for further information), or amounts in excess of that if management's review, discussed above, determines adequate cash is available.
"Risk Factors" in this Form 10-K. 42 Table of Contents Treasury Purchases We periodically repurchase Class A Shares and/or LP Units into Treasury (including through the net settlement of equity awards) in order to offset the dilutive effect of equity awards granted as compensation (see Note 18 to our consolidated financial statements for further information), or amounts in excess of that if management's review, discussed above, determines adequate cash is available.
EGL entered into a subordinated revolving credit facility with PNC in an aggregate principal amount, as amended on October 31, 2022, of up to $75.0 million, to be used as needed in support of capital requirements from time to time of EGL.
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.
Our revenue stream funds the payment of our expenses, including annual bonus payments, a portion of which are guaranteed, deferred compensation arrangements, interest expense on our repurchase agreements (prior to the sale of our ECB business), Notes Payable, lines of credit and other financing arrangements, as well as payments for income taxes.
Our revenue stream funds the payment of our expenses, including annual bonus payments, a portion of which are guaranteed, deferred compensation arrangements, interest expense on our Notes Payable, lines of credit and other financing arrangements, as well as payments for income taxes.
Historically, the value of these foreign currencies has fluctuated relative to the U.S. dollar. For the year ended December 31, 2022, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income (Loss) within the Consolidated Statement of Comprehensive Income was a loss of ($20.9) million, net of tax.
Historically, the value of these foreign currencies has fluctuated relative to the U.S. dollar. For the year ended December 31, 2023, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income (Loss) within the Consolidated Statement of Comprehensive Income was a gain of $4.6 million, net of tax.
Liquidity and Capital Resources General Our current assets principally include Cash and Cash Equivalents, Investment Securities and Certificates of Deposit, Accounts Receivable and contract assets, included in Other Current Assets, relating to revenues from our Investment Banking & Equities and Investment Management segments.
Liquidity and Capital Resources General Our current assets principally include Cash and Cash Equivalents, Investment Securities and Certificates of Deposit, Accounts Receivable and contract assets, included in Other Current Assets, relating to revenues from our Investment Banking & Equities and Investment Management segments. Our current liabilities principally include accrued expenses, accrued liabilities, accrued employee compensation and short-term borrowings.
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 2022, we repurchased 1,010,760 Class A Shares, at an average cost per share of $127.02, for $128.4 million, primarily related to minimum tax withholding requirements of share deliveries.
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 2023, we repurchased 968,830 Class A Shares, at an average cost per share of $131.53, for $127.4 million, primarily related to minimum tax withholding requirements of share deliveries.
As of December 31, 2022, we were in compliance with all of these covenants. 2021 Private Placement Notes On March 29, 2021, we issued $38.0 million aggregate principal amount of our 1.97% Series I senior notes due August 1, 2025 (the "Series I Notes" or the "2021 Private Placement Notes"), pursuant to a note purchase agreement (the "2021 Note Purchase Agreement") dated as of March 29, 2021, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.
As of December 31, 2023, we were in compliance with all of these covenants. 2021 Private Placement Notes On March 29, 2021, we issued $38.0 million aggregate principal amount of our 1.97% Series I senior notes due August 1, 2025 (the "Series I Notes" or the "2021 Private Placement Notes"), pursuant to a note purchase agreement (the "2021 Note Purchase Agreement") dated as of March 29, 2021, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933. 44 Table of Contents Interest on the 2021 Private Placement Notes is payable semi-annually and the 2021 Private Placement Notes are guaranteed by certain of our domestic subsidiaries.
Furthermore, our interpretation of complex tax laws may impact our measurement of current and deferred income taxes. 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 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.
"Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations" in our Form 10-K for the year ended December 31, 2021.
For a discussion of 2022 versus 2021, refer to Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations" in our Form 10-K for the year ended December 31, 2022.
Performance for 2021 reflected: • Wealth Management outperformed the S&P 500 on a 1 and 3-year basis by approximately 2% and 5%, respectively • Wealth Management outperformed the fixed income composite on a 1-year basis by approximately 20 basis points and lagged the fixed income composite on a 3-year basis by approximately 30 basis points • The S&P 500 was up approximately 29% and the fixed income composite was down approximately 1% AUM from our unconsolidated affiliates decreased 17% compared to December 31, 2021, reflecting declines in both Atalanta Sosnoff and ABS. 2022 versus 2021 Net Revenues were $65.9 million in 2022, compared to $65.6 million in 2021, an increase of $0.3 million.
Performance for 2022 reflected: • Wealth Management lagged the S&P 500 on a 1-year basis by approximately 4% and outperformed the S&P 500 on a 3-year basis by approximately 1% • Wealth Management outperformed the fixed income composite on a 1-year basis by approximately 10 basis points and lagged the fixed income composite on a 3-year basis by approximately 20 basis points • The S&P 500 and fixed income composite were down approximately 18% and 5%, respectively, compared to the prior year AUM from our unconsolidated affiliates increased 8% compared to December 31, 2022, reflecting increases in both Atalanta Sosnoff and ABS. 2023 versus 2022 Net Revenues were $70.0 million in 2023, compared to $65.9 million in 2022, an increase of $4.1 million, or 6%.
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 December 31, 2022. Drawings under this facility bear interest at LIBOR (or an applicable benchmark replacement) plus 180 basis points and the maturity date is October 28, 2023.
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 December 31, 2023. Drawings under this facility bear interest at Daily SOFR plus 191 basis points and the maturity date is October 27, 2024.
We had total commitments (not reflected on our Consolidated Statements of Financial Condition) relating to future capital contributions to private equity funds of $2.4 million and $6.1 million as of December 31, 2022 and 2021, respectively. We expect to fund these commitments with cash flows from operations.
We had total commitments (not reflected on our Consolidated Statements of Financial Condition) relating to future capital contributions to private equity funds of $2.6 million and $2.4 million as of December 31, 2023 and 2022, respectively.
The decline in the fair value of the contingent consideration in 2022 reduced Other Operating Expenses by $14.5 million on the Consolidated Statement of Operations. The amount of contingent consideration to be paid is dependent on the RECA business achieving certain revenue performance targets.
The 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 $2.4 million and $14.5 million for the years ended December 31, 2023 and 2022, respectively, on the Consolidated Statements of Operations.
We are currently in a period of macroeconomic uncertainty and market volatility, including historically high inflation, supply chain constraints, rising interest rates, changes in the availability of financing, geopolitical tensions, an evolving regulatory environment and the risk of a recession.
We remain in a period of macroeconomic uncertainty and market volatility, having experienced historically high inflation, supply chain constraints, rising interest rates, changes in the availability of financing, geopolitical tensions, including escalating military tensions, evolving regulatory and banking environments and the risk of a recession.
When the offering is completed, the performance obligation has been satisfied and we recognize the applicable management fee, selling concession, sales agent commission or placement agent fee. Offering expenses are presented gross in the Consolidated Statements of Operations.
When the offering is completed, the performance obligation has been satisfied and we recognize the applicable management fee, selling concession, sales agent commission or placement agent fee. Offering expenses are presented gross in the Consolidated Statements of Operations. We also manage assignments involving the exchange of an issuer's securities where fees are recognized when earned.
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 us to make significant judgments that affect the timing of revenue recognized. For certain advisory services, we have concluded that performance obligations are satisfied over time.
Our 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 us to make significant judgments that affect the timing of revenue recognized.
Following the adoption of ASU 2016-13, we determine the adequacy of the allowance by estimating the probability of loss based on our analysis of historical credit loss experience of our client receivables, and taking into consideration current market conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.
In accordance with ASC 326, "Financial Instruments - Credit Losses ", we determine the adequacy of the allowance by estimating the probability of loss based on our analysis of historical credit loss experience of our client receivables, and taking into consideration current market conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.
We will continue to assess the potential ongoing impacts of the current environment, including the regular monitoring of our cash levels, liquidity, regulatory capital requirements, debt covenants and our other contractual obligations. See "Results of Operations" above for further information. We assess our equity method investments for impairment annually, or more frequently if circumstances indicate impairment may have occurred.
We will continue to assess the potential ongoing impacts of the current environment, including the regular monitoring of our cash levels, liquidity, regulatory capital requirements, debt covenants and our other contractual obligations. See "Results of Operations" above for further information.
The results of these investments are included within Income from Equity Method Investments. During 2022, we sold a portion of our interests in ABS. See Note 10 to our consolidated financial statements for further information. Our historical Investment Management results include the ECB businesses, revenues for which were previously included in Institutional Asset Management above.
The results of these investments are included within Income from Equity Method Investments. During 2022, we sold a portion of our interests in ABS. See Note 10 to our consolidated financial statements for further information.
In addition, we periodically perform a qualitative assessment to monitor risks associated with current and forecasted conditions that may require an adjustment to the expected credit loss rates.
In addition, we periodically perform 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.
Our consideration for this transaction included the payment of $6.0 million of cash in 2021, $27.7 million of cash in 2022, and contingent cash consideration which will be settled in early 2024.
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 is due to be settled in early 2024. We paid $1.4 million of this contingent cash consideration in 2023.
Advisory and Underwriting fees are generally collected within 90 days of billing. However, placement fees may be collected within 180 days of billing, with fees related to private funds capital raising and certain fees related to the private capital businesses being collected in a period exceeding one year.
Our receivables collection periods generally are within 90 days of invoice, with the exception of placement fees, which are generally collected within 180 days of invoice, and 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.
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.
We have an obligation to exchange vested Class A, E, I and K LP Units to Class A Common Stock upon the request of the holder. See Note 2 to our consolidated financial statements for further information.
This program may be suspended or discontinued at any time and does not have a specified expiration date. During 2022, we repurchased 3,427,495 Class A Shares, at an average cost per share of $114.39, for $392.1 million, pursuant to our repurchase program.
This program may be suspended or discontinued at any time and does not have a specified expiration date. During 2023, we repurchased 2,032,453 Class A Shares, at an average cost per share of $127.85, for $259.9 million, pursuant to our repurchase program.
A summary of our operating, investing and financing cash flows is as follows: For the Years Ended December 31, 2022 2021 2020 (dollars in thousands) Cash Provided By (Used In) Operating activities: Net income $ 531,415 $ 868,573 $ 412,680 Non-cash charges 561,678 498,772 481,698 Other operating activities (561,717) 17,553 83,993 Operating activities 531,376 1,384,898 978,371 Investing activities 313,303 (705,892) (483,871) Financing activities (735,568) (925,321) (307,793) Effect of exchange rate changes (24,281) (4,616) 7,631 Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash 84,830 (250,931) 194,338 Cash, Cash Equivalents and Restricted Cash Beginning of Period 587,293 838,224 643,886 End of Period $ 672,123 $ 587,293 $ 838,224 2022.
A summary of our operating, investing and financing cash flows is as follows: 40 Table of Contents For the Years Ended December 31, 2023 2022 2021 (dollars in thousands) Cash Provided By (Used In) Operating activities: Net income $ 285,223 $ 531,415 $ 868,573 Non-cash charges 527,724 561,678 498,772 Other operating activities (354,993) (561,717) 17,553 Operating activities 457,954 531,376 1,384,898 Investing activities 15,621 313,303 (705,892) Financing activities (557,231) (735,568) (925,321) Effect of exchange rate changes 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 End of Period $ 605,484 $ 672,123 $ 587,293 2023.
Cash Flows Our operating cash flows are primarily influenced by the timing and receipt of fees and the payment of operating expenses, including incentive compensation to our employees and interest expense on our repurchase agreements (prior to the sale of our ECB business), Notes Payable and lines of credit, and the payment of income taxes.
Cash Flows 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.
The fair value of the remaining contingent consideration is $6.1 million and $20.6 million as of December 31, 2022 and 2021, respectively, $1.1 million of which is included within Other Current Liabilities on our Consolidated Statement of Financial Condition as of December 31, 2022 and the remainder of which is included within Other Long-term Liabilities on our Consolidated Statement of Financial Condition as of December 31, 2022.
The fair value of the remaining contingent consideration is $2.0 million as of December 31, 2023, which is included within Payable to Employees and Related Parties on our Consolidated Statements of Financial Condition, and $6.1 million as of December 31, 2022, $1.1 million of which was included within Other Current Liabilities and the remainder of which was included within Other Long-term Liabilities on our Consolidated Statements of Financial Condition.
We and our consolidated subsidiaries were in compliance with these covenants as of December 31, 2022. The interest rate provisions are LIBOR (or an applicable benchmark 44 Table of Contents replacement) plus 150 basis points and the maturity date is October 28, 2023. There were no drawings under this facility at December 31, 2022.
We and our 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.
Per ASC 820, we disclose information about financial instruments carried at fair value, including their classification in the fair value hierarchy. Level 1 investments include U.S. Treasury Securities, readily-marketable equity securities and investment funds. As of December 31, 2022 and 2021, we had no Level 2 or 3 investments carried at fair value.
Per ASC 820, we disclose information about financial instruments carried at fair value, including their classification in the fair value hierarchy. Level 1 investments include U.S. Treasury Securities, readily-marketable equity 50 Table of Contents securities and investment funds. Level 2 investments include our foreign currency exchange forward contracts.
We concluded there was no impairment of goodwill or intangible assets during the year ended December 31, 2021. We recorded a loss of $8.6 million for the year ended December 31, 2021 , related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with our investment strategy, we decided to wind-down during 2021.
We recorded a loss of $8.6 million for the year ended December 31, 2021, related to the write-down of certain assets associated 52 Table of Contents with a legacy private equity investment relationship which, consistent with our investment strategy, we decided to wind-down during 2021. See Note 10 to our consolidated financial statements for further information .
The aggregate 4,438,255 Class A Shares repurchased during 2022 were acquired for aggregate purchase consideration of $520.5 million, at an average cost per share of $117.27. 42 Table of Contents Noncontrolling Interest Purchases During 2022, we purchased, at fair value, an additional 0.9% of the EWM Class A Units for $3.2 million.
The aggregate 3,001,283 Class A Shares repurchased during 2023 were acquired for aggregate purchase consideration of $387.3 million, at an average cost per share of $129.04. Noncontrolling Interest Purchases During 2023, we purchased, at fair value, an additional 0.7% of the EWM Class A Units for $2.0 million.
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, 2022, total contract assets recorded in Other Current Assets and Other Assets amounted to $110.5 million and $8.0 million, respectively.
As of December 31, 2023 and 2022, total receivables recorded in Accounts Receivable amounted to $371.6 million and $385.1 million, respectively, net of an allowance for credit losses, and total receivables recorded in Other Assets amounted to $93.7 million and $64.1 million, respectively. 47 Table of Contents 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).
Investment Banking & Equities Revenue We earn fees from clients for providing advisory services on strategic matters, including mergers, acquisitions, divestitures, leveraged buyouts, restructurings, activism and defense and similar corporate finance matters. Our Investment Banking & Equities segment also includes services related to securities underwriting, private placement services and commissions for agency-based equity trading services and equity research.
Investment Banking & Equities Revenue We earn 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.
We traditionally pay a substantial portion of incentive compensation during the first three months of each calendar year with respect to the prior year's results and prior years' deferred compensation. Likewise, payments to fund investments related to hedging our deferred cash compensation plans are generally funded in the first three months of each calendar year.
Likewise, payments to fund investments related to hedging our deferred cash compensation plans are generally funded in the first three months of each calendar year.
In addition, payments in respect of deferred cash compensation arrangements and related investments are also made in the first quarter. From time to time, advances and/or commitments may also be granted to new employees at or near the date they begin employment, or to existing employees for the purpose of incentive or retention.
From time to time, advances and/or commitments may also be granted to new employees at or near the date they begin 41 Table of Contents employment, or to existing employees for the purpose of incentive or retention.
See Note 11 to our consolidated financial statements for further information. ASC 825, " Financial Instruments" permits entities the option to measure most financial instruments and certain other items at fair value at specified election dates and to report related unrealized gains and losses in earnings.
ASC 825, " Financial Instruments" permits entities the option to measure most financial instruments and certain other items at fair value at specified election dates and to report related unrealized gains and losses in earnings. We have not elected to apply the fair value option to any specific financial assets or liabilities.
As of December 31, 2022, the fair value of our investments with these products, based on closing prices, was $137.1 million. We had net realized and unrealized losses of ($29.8) million for the year ended December 31, 2022, from our exchange-traded funds portfolio. See Note 8 to our consolidated financial statements for further information.
We had net realized and unrealized gains of $31.7 million for the year ended December 31, 2023, from our exchange-traded funds portfolio. See Note 8 to our consolidated financial statements for further information.
Generally, to the extent performance fee arrangements have been negotiated, these fees are earned when the likelihood of clawback is mathematically improbable. 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.
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.

… 66 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed0 unchanged
Quantitative and Qualitative Disclosures About Market Risk See "Management's Discussion and Analysis of Financial Condition and Results of Operations – Market Risk and Credit Risk." We do not believe we face any material interest rate risk, foreign currency exchange risk, equity price risk or other market risk except as disclosed in Item 7 " – Market Risk and Credit Risk" above. 52 Table of Contents
Quantitative and Qualitative Disclosures About Market Risk See "Management's Discussion and Analysis of Financial Condition and Results of Operations – Market Risk and Credit Risk." We do not believe we face any material interest rate risk, foreign currency exchange risk, equity price risk or other market risk except as disclosed in Item 7 " – Market Risk and Credit Risk" above. 53 Table of Contents

Other EVR 10-K year-over-year comparisons