Evercore(US:EVR)2024-02-21 16:00Revenue and Income - Total revenues for the Investment Banking & Equities and Investment Management segments include fees for services, transaction-related client reimbursements, and other revenue, with net revenues reflecting total revenues less interest expense [175]. - 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 [202]. - Net Revenues were $2.43 billion in 2023, a decrease of $336.1 million, or 12%, versus $2.76 billion in 2022, with Advisory Fees decreasing by $429.1 million, or 18% [203]. - Comprehensive income for 2023 was $286,739, compared to $513,947 in 2022, a decrease of 44.2% [343]. - Net income for 2023 was $285,223,000, a decrease of 46% compared to $531,415,000 in 2022 and a decrease of 67% compared to $868,573,000 in 2021 [349]. Expenses and Compensation - Employee Compensation and Benefits Expense includes all payments for services rendered by employees, reflecting competitive compensation levels to retain key personnel [182]. - The ratio of Employee Compensation and Benefits Expense to Net Revenues is an important measure for assessing compensation costs relative to performance [192]. - Total Operating Expenses were $2.06 billion in 2023, flat compared to 2022, with Employee Compensation and Benefits Expense decreasing by $40.6 million, or 2% [205]. - Employee Compensation and Benefits Expense as a percentage of Net Revenues was 68.3% in 2023, compared to 61.5% in 2022 [207]. - The company anticipates discretionary distributions of profits to named executive officers in the first quarter of 2025, in lieu of cash incentive compensation for 2024 [189]. Advisory and M&A Activity - Revenue trends in the advisory business are correlated to M&A activity, restructuring activity, and capital advisory activity, with fluctuations based on market conditions and client transaction completions [177]. - The dollar value of North American announced and completed M&A activity decreased by 6% and 16%, respectively, compared to 2022 [218]. - The value of Global M&A Deals Announced decreased by $556 million, or 16%, to $2.88 billion in 2023 compared to $3.44 billion in 2022 [220]. - The total number of fees from Advisory and Underwriting Client Transactions increased by 2% to 666 in 2023, compared to 651 in 2022 [220]. Assets and Liabilities - Total current assets decreased to $2,605,217 in 2023 from $2,706,731 in 2022, a reduction of 3.7% [339]. - Total assets increased to $3,703,298 in 2023, up from $3,620,923 in 2022, reflecting a growth of 2.3% [339]. - Total liabilities rose to $1,920,808 in 2023, compared to $1,894,505 in 2022, an increase of 1.4% [339]. - Total receivables recorded in Accounts Receivable amounted to $371.6 million as of December 31, 2023, down from $385.1 million in 2022 [285]. Cash Flow and Investments - Cash provided by operating activities in 2023 was $457,954,000, down from $531,376,000 in 2022 [349]. - Cash, Cash Equivalents, and Restricted Cash decreased to $605.5 million at December 31, 2023, down $66.6 million from $672.1 million at December 31, 2022 [239]. - The company repurchased treasury stock amounting to $391,964,000 in 2023, compared to $550,293,000 in 2022 [349]. - The company experienced a net loss on investments of $34,671,000 in 2023, compared to a gain of $16,458,000 in 2022 [349]. Market Conditions and Future Outlook - The company remains in a period of macroeconomic uncertainty and market volatility, impacting M&A activity and advisory transactions [245]. - The company has total commitments for future capital contributions to private equity funds of $2.6 million as of December 31, 2023 [272]. - The company holds equity securities and exchange-traded funds valued at $160.9 million as of December 31, 2023, with net realized and unrealized gains of $31.7 million for the year [277]. Financial Reporting and Compliance - The Company recognizes revenue from Investment Banking & Equities and Investment Management segments under ASC 606, which includes a five-step model for revenue recognition [364]. - The Company evaluates its economic interests in VIEs to determine if it is the primary beneficiary, which requires significant judgment [355]. - The company recorded a gross deferred tax asset balance of $373.8 million, requiring approximately $1.5 billion of future taxable income to realize [316].