Noncontrolling Interest

9 Months Ended

Sep. 30, 2022

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.


	September 30,
	2022		2021
Subsidiary:
Evercore LP	6	%	11	%
Evercore Wealth Management ("EWM")(1)	25	%	26	%

Real Estate Capital Advisory ("RECA")(2)	—	%	40	%

(1) Noncontrolling Interests represent a blended rate for multiple classes of interests in EWM.

(2) Noncontrolling Interests represent the Class R Interests of Private Capital Advisory L.P.

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

The Company has outstanding Class A, E, I and K Evercore 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 September 30, 2022, the EWM members held 25% of the outstanding EWM Units.

Changes in Noncontrolling Interest for the three and nine months ended September 30, 2022 and 2021 were as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Beginning balance	$	170,150	$	274,296	$	314,910	$	258,428

Comprehensive Income:
Net Income Attributable to Noncontrolling Interest	9,198		29,577		42,543		74,346
Other Comprehensive Income (Loss)	(1,988)		(1,109)		(3,935)		(706)
Total Comprehensive Income	7,210		28,468		38,608		73,640

Evercore LP Units Exchanged for Class A Shares	(47)		(13)		(159,354)		(6,760)

Amortization and Vesting of LP Units	5,403		2,946		17,932		9,053


Other Items:
Distributions to Noncontrolling Interests	(6,533)		(16,126)		(36,126)		(45,768)



Issuance of Noncontrolling Interest	—		1,072		300		2,417
Purchase of Noncontrolling Interest	(108)		—		(195)		(367)



Total Other Items	(6,641)		(15,054)		(36,021)		(43,718)

Ending balance	$	176,075	$	290,643	$	176,075	$	290,643

Other Comprehensive Income – Other Comprehensive Income (Loss) Attributed to Noncontrolling Interest includes unrealized gains (losses) on securities and investments, net, of $109 and $137 for the three and nine months ended September 30, 2022, respectively, and ($125) and ($57) for the three and nine months ended September 30, 2021, respectively, and foreign currency translation adjustment gains (losses), net, of ($2,097) and ($4,072) for the three and nine months ended September 30, 2022, respectively, and ($984) and ($649) for the three and nine months ended September 30, 2021, respectively.

LP Units Exchanged – On February 24, 2022, the Company entered into an agreement (the "Exchange Agreement") with ISI Holding, Inc. ("ISI Holding"), the principal stockholder of which is Ed Hyman, an executive officer of the Company. Pursuant to the Exchange Agreement, ISI Holding exercised its existing conversion rights under the terms of the partnership agreement of Evercore LP to exchange (the "Exchange") all 2,545 of the Class E limited partnership units of Evercore LP ("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 nine months ended September 30, 2022, an aggregate of 1 and 2,573 LP Units, respectively, were exchanged for Class A Shares, including the Class E LP Units described above. These exchanges resulted in a decrease to Noncontrolling Interest of $47 and $159,354 for the three and nine months ended September 30, 2022, respectively, an increase to Additional-Paid-In-Capital of $47 and $159,328 for the three and nine months ended September 30, 2022, respectively, and an increase to Class A Common Stock of $26 for the nine months ended September 30, 2022 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2022. See Note 11 for further information.

Interests Issued – During the first and third quarter of 2021, certain employees of EWM purchased EWM Class A Units, at fair value, resulting in an increase to Noncontrolling Interest of $975 and $200, respectively, on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2021.

During the third quarter of 2021, certain employees of RECA purchased Class R Interests of Private Capital Advisory L.P., at fair value, resulting in an increase to Noncontrolling Interest of $872 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2021.

Interests Purchased – During the third quarter of 2022, the Company purchased, at fair value, an additional 0.5% of the EWM Class A Units for $1,706, which was settled in cash during the three months ended September 30, 2022. This purchase resulted in a decrease to Noncontrolling Interest of $108 and a decrease to Additional-Paid-In-Capital of $1,598 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2022.

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 nine months ended September 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 September 30, 2022.

During the first quarter of 2021, the Company purchased, at fair value, an additional 1% of the EWM Class A Units for $3,170, which was settled in cash during the nine months ended September 30, 2021. This purchase resulted in a decrease to Noncontrolling Interest of $344 and a decrease to Additional Paid-In-Capital of $2,826 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2021.

On December 31, 2021, the Company purchased, at fair value, all of the outstanding Class R Interests of Private Capital Advisory L.P. from employees of the RECA business for $54,297. Consideration for this transaction included the payment of $6,000 of cash in 2021, $27,710 of cash during the first quarter of 2022, and contingent cash consideration which will be settled in early 2024. The Company settled $1,083 of the contingent consideration at fair value, which is included within Other Current Liabilities on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2022 and is expected to be paid during the fourth quarter of 2022. The fair value of the remaining contingent consideration is $7,442 and $20,587 as of September 30, 2022 and December 31, 2021, respectively, and is included within Other Long-term Liabilities on the Company's Unaudited Condensed Consolidated Statement of Financial Condition. The amount of contingent consideration to be paid is dependent on the RECA business achieving certain revenue performance targets. For the three and nine months ended September 30, 2022, the Company recognized a reversal of expense of $8,784 and $12,062, respectively, within Other Operating Expenses on the Unaudited Condensed Consolidated Statements of Operations, related to the change in fair value of the contingent consideration. The fair value of the contingent consideration reflects the present value of the expected payment due based on the current expectation for the business meeting the revenue performance targets. This purchase resulted in a decrease to Noncontrolling Interest of $7,137 and a decrease to Additional Paid-In-Capital of $47,160 on the Company’s Unaudited Condensed Consolidated Statement of Financial Condition on December 31, 2021. In conjunction with this transaction, the Company will also issue two separate payments in early 2023 and 2024, contingent on continued employment with the Company, and accordingly, will be 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.