XML 31 R19.htm IDEA: XBRL DOCUMENT

Noncontrolling Interest

6 Months Ended

Jun. 30, 2023

Noncontrolling Interest recorded in the unaudited condensed consolidated financial statements of the Company relates to the following approximate interests in certain consolidated subsidiaries, which are not owned by the Company. In circumstances where the governing documents of the entity to which the noncontrolling interest relates require special allocations of profits or losses to the controlling and noncontrolling interest holders, the net income or loss of these entities is allocated based on these special allocations.

Noncontrolling ownership interests for the Company's subsidiaries were as follows:


	As of June 30,
	2023		2022

Evercore LP(1)	7	%	6	%
Evercore Wealth Management ("EWM")(2)	26	%	25	%

(1)On February 24, 2022, 2,545 Class E limited partnership units of Evercore LP ("Class E LP Units") were exchanged for 2,545 Class A Shares, which resulted in a decrease in noncontrolling interest of Evercore LP. For further information see "LP Units Exchanged" below.

(2)Noncontrolling Interests as of June 30, 2022 represent a blended rate for multiple classes of interests in EWM.

The Noncontrolling Interests for Evercore LP and EWM have rights, in certain circumstances, to convert into Class A Shares.

The Company has outstanding Class A limited partnership units of Evercore LP ("Class A LP Units"), Class E LP Units, Class I limited partnership units of Evercore LP ("Class I LP Units") and Class K limited partnership units of Evercore LP ("Class K LP Units"), which give the holders the right to receive Class A Shares upon exchange on a one-for-one basis. See Note 13 for further information.

During the period January 1, 2023 through December 31, 2023, the Company has the option to purchase, at fair value, a portion of the outstanding EWM Class A Units such that the noncontrolling interest holders would continue to hold no less than 25% of the outstanding units following the transaction. This transaction may be settled in cash, Evercore LP Units or Class A shares of the Company, at the Company’s discretion. If the Company has not exercised its option prior to the end of the option period, or the noncontrolling interest holders continue to hold greater than 25% of the outstanding units following the transaction, the noncontrolling interest holders may exchange their interests for Evercore LP Units, at fair value, sufficient to reduce their outstanding interest to 25%. As of June 30, 2023, the EWM members held 26% of the outstanding EWM Units.

Changes in Noncontrolling Interest for the three and six months ended June 30, 2023 and 2022 were as follows:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2023		2022		2023		2022
Beginning balance	$	193,278	$	177,632	$	189,607	$	314,910

Comprehensive Income:
Net Income Attributable to Noncontrolling Interest	4,956		14,267		13,819		33,345
Other Comprehensive Income (Loss)	498		(1,674)		714		(1,947)
Total Comprehensive Income	5,454		12,593		14,533		31,398

Evercore LP Units Exchanged for Class A Shares	(1,296)		(1,530)		(2,774)		(159,307)

Amortization and Vesting of LP Units	6,175		6,308		12,635		12,529


Other Items:
Distributions to Noncontrolling Interests	(5,261)		(24,853)		(15,651)		(29,593)



Issuance of Noncontrolling Interest	733		—		733		300
Purchase of Noncontrolling Interest	(158)		—		(158)		(87)



Total Other Items	(4,686)		(24,853)		(15,076)		(29,380)

Ending balance	$	198,925	$	170,150	$	198,925	$	170,150

Other Comprehensive Income – Other Comprehensive Income (Loss) Attributed to Noncontrolling Interest includes unrealized gains (losses) on securities and investments, net, of ($283) for the six months ended June 30, 2023 and $28 for the three and six months ended June 30, 2022, and foreign currency translation adjustment gains (losses), net, of $498 and $997 for the three and six months ended June 30, 2023, respectively, and ($1,702) and ($1,975) for the three and six months ended June 30, 2022, respectively.

LP Units Exchanged – On February 24, 2022, the Company entered into an agreement (the "Exchange Agreement") with ISI Holding, Inc. ("ISI Holding"), the principal stockholder of which is Ed Hyman, an executive officer of the Company. Pursuant to the Exchange Agreement, ISI Holding exercised its existing conversion rights under the terms of the partnership agreement of Evercore LP to exchange (the "Exchange") all 2,545 of the Class E LP Units owned by it for 2,545 Class A Shares. Following the Exchange, ISI Holding liquidated and distributed the Class A Shares received in the Exchange to its stockholders in accordance with their ownership interests in ISI Holding. The parties have relied on the exemption from the registration requirements of the Securities Act of 1933 under Section 4(a)(2) thereof for the Exchange.

During the three and six months ended June 30, 2023, 21 and 45 LP Units, respectively, were exchanged for Class A Shares. This resulted in a decrease to Noncontrolling Interest of $1,296 and $2,774 for the three and six months ended June 30, 2023, respectively, and an increase to Additional-Paid-In-Capital of $1,296 and $2,774 for the three and six months ended June 30, 2023, respectively, on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2023. See Note 11 for further information.

Interests Purchased – During the second quarter of 2023, the Company purchased, at fair value, an additional 0.7% of the EWM Class A Units for $2,002. This purchase resulted in a decrease to Noncontrolling Interest of $158 and a decrease to Additional-Paid-In-Capital of $1,844 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2023.

During the first quarter of 2022, the Company purchased, at fair value, an additional 0.4% of the EWM Class A Units for $1,448, which was settled in cash during the three months ended June 30, 2022. This purchase resulted in a decrease to Noncontrolling Interest of $87 and a decrease to Additional-Paid-In-Capital of $1,361 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2022.

On December 31, 2021, the Company purchased, at fair value, all of the outstanding Class R Interests of Private Capital Advisory L.P. from employees of the RECA business for $54,297. Consideration for this transaction included the payment of $6,000 of cash in 2021, $27,710 of cash during the six months ended June 30, 2022, and contingent cash consideration which is due to be settled in early 2024. The Company paid $715 of this contingent cash consideration during the six months ended June 30, 2023. The fair value of the remaining contingent consideration is $2,577 as of June 30, 2023, $2,159 of which is included within Payable to Employees and Related Parties and the remainder of which is included within Other Current Liabilities on the Company's Unaudited Condensed Consolidated Statements of Financial Condition, and $6,119 as of December 31, 2022, $1,083 of which was included within Other Current Liabilities and the remainder of which was included within Other Long-term Liabilities on the Company's Unaudited Condensed Consolidated Statements of Financial Condition. The amount of contingent consideration to be paid is dependent on the RECA business achieving certain revenue performance targets. The decline in the fair value of contingent consideration reduced Other Operating Expenses by $2,545 and $2,459 for the three and six months ended June 30, 2023, respectively, and $2,701 and $3,278 for the three and six months ended June 30, 2022, respectively, on the Unaudited Condensed Consolidated Statements of Operations. The fair value of the contingent consideration reflects the present value of the expected payment due based on the current expectation for the business meeting the revenue performance targets. In conjunction with this transaction, the Company also issued a payment in the first quarter of 2023 and will issue another payment in early 2024, contingent on continued employment with the Company. Accordingly, these payments are treated as compensation expense for accounting purposes in the periods earned. These payments will also be dependent on the RECA business achieving certain revenue performance targets.