Q4 2021 Evercore Inc Earnings Call

February 2, 2022

Speaker 1: Good morning, and thank you for standing by. Welcome to Evercore's fourth quarter and full year 2021 financial results conference call. During today's call, all parties will be in listen-only mode. Following the presentation, the conference call will be open for questions.

Good morning, and thank you for standing by welcome to Evercore fourth quarter and full year 2021 financial results Conference call.

Today's call all parties will be in listen only mode.

Following the presentation the conference call will be opened for questions.

Speaker 1: If you have a question, please press the star followed by the one on your touchtone telephone. Please press star zero for operator assistance at any time. For participants using speaker equipment, it may be necessary to pick up your handset before making your selection.

Have a question. Please press the star followed by the one you touched on the telephone Please press star zero for operator assistance at any time.

Participants using speaker equipment, it may be necessary to pick up your handset before making a selection as a reminder, this conference call is being recorded today Wednesday February <unk> 2022.

Speaker 1: As a reminder, this conference call is being recorded today, Wednesday, February 2nd, 2022. I would now like to turn the conference call over to your host, Evercore's Interim Head of Investor Relations, Jamie Easton. Please go ahead.

I would now like to turn the conference call over to your host Evercore and I'm head of Investor Relations Jamie Easton. Please go ahead.

Speaker 2: Thank you, Michelle. Good morning and thank you for joining us today for Evercore's fourth quarter and full year 2021 financial results conference call. I'm Jamie Easton, Evercore's interim head of investor relations. Joining me on the call today are John Weinberg and Ralph Schlossstein, our co-chairmen and CEOs, and Celeste Millet, our CFO . After our prepared remarks, we will open the call for questions.

Thank you Michele good morning, and thank you for joining us today for Evercore fourth quarter and full year 2021 financial results Conference call.

Jamie Easton Everquest interim head of Investor Relations.

Joining me on the call today are John Weinberg, and Ralph Slash Stein, our co chairman and Ceos and Celeste Morais, our CFO . After our prepared remarks, we will open the call for questions.

Speaker 2: Earlier today, we issued a press release announcing Evercore's fourth quarter and full year 2021 financial results.

Earlier today, we issued a press release announcing everquest fourth quarter and full year 2021 financial results. Our discussion of our results today is complementary to the press release, which is available on our website at Evercore Dot Com. This conference call is being webcast live in the for investors section of our website and an archive.

Speaker 2: Our discussion of our results today is complementary to the press release, which is available on our website at Evercore.com. This conference call is being webcast live in the For Investors section of our website, and an archive of it will be available for 30 days, beginning approximately one hour after the conclusion of this call.

It will be available for 30 days beginning approximately one hour. After the conclusion of this call. During the course of this conference call. We may make a number of forward looking statements any forward looking statements that we make are subject to various risks and uncertainties and there are important factors that could cause actual outcomes to differ.

Speaker 2: During the course of this conference call, we may make a number of forward-looking statements.

Speaker 2: Any forward-looking statements that we make are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements.

Materially from those indicated in these statements. These factors include but are not limited to those discussed in everquest filings with the SEC, including our annual report on Form 10-K quarterly reports on Form 10-Q , and current reports on form 8-K, I want to remind you that the company assumes no duty to update any forward.

Speaker 2: These factors include, but are not limited to, those discussed in Evercore's filings at the SAC, including our annual report on Form 10-K , quarterly reports on Form 10-Q , and current reports on Form 8-K. I want to remind you that the company assumes no duty to update any forward-looking statement.

Looking statements in our presentation today, unless otherwise indicated we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the company's performance for detailed disclosures on these measures and the GAAP reconciliations you should refer to the financial data contained within our press release, which is.

Speaker 2: In our presentation today, unless otherwise indicated, we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the company's performance.

Speaker 2: For detailed disclosures on these measures and the gap of reconciliation, you should refer to the financial data contained within our press release, which is posted on our website. We continue to believe that it is important to evaluate Evercore's performance on an annual basis. As we have noted previously, our results for any particular quarter are influenced by the timing of transaction closings. I will now turn the call over to John .

Listed on our website, we continue to believe that is important to evaluate everquest performance on an annual basis. As we have noted previously our results for any particular quarter are influenced by the timing of transaction closings I will now turn the call over to John .

Speaker 3: Thank you, Jamie, and good morning, everyone. When we spoke this time last year, we never imagined that a year later we would still be wrestling with COVID-19 . And yet here we are. And although these times continue to be trying and volatile, Evercore has continued to effectively serve its clients while sustaining a unique culture and fostering deep collaboration across our firm.

Thank you Jamie and good morning, everyone. When we spoke this time last year, we never imagined that a year later, we would still be wrestling with Covid and yet here, we are and although these times continue to be trying and volatile Evercore has continued to effectively serve its clients while sustaining our unique culture.

Sure and fostering deep collaboration across our firm.

Speaker 3: Well, we look forward to our return to office after Omnicon.

Well, we look forward to a return to office after omnicom.

Speaker 3: subsides, our teams have successfully adjusted the ebbs and flows of pandemic life and importantly remain intensely focused on advising our clients on their most pressing strategic priorities.

Our subsides our teams have successfully adjusted the ebbs and flows of pandemic life and importantly remain intensely focused on advising our clients on their most pressing strategic priorities.

Speaker 3: Before we go into results, I want to note that today is Ralph's final earnings call.

Before we go into results I want to note that today's Ralph final earnings call.

Speaker 3: And it's hard to believe that this is his 51st quarterly call.

It is hard to believe that this is his 50 <unk> quarterly call.

Speaker 3: there's no better way to salute his impressive leadership than with the successful quarter we've had and the year that we've all just announced.

There is no better way to salute his impressive leadership.

Then with the successful quarter, we've had in the year that we will just amount.

Speaker 3: And we have just it is a year of records and 2021 was by far the best year in our firm's history.

And we have Jeff It is a year of records in 2021 was by far the best year in our firm's history.

Speaker 3: We exceeded $3 billion in adjusted revenue for the first time ever and achieved record adjusted operating income, record adjusted net income, and record adjusted EPS. We continue to invest in our

We exceeded $3 billion in adjusted revenue for the first time ever and achieved record adjusted operating income record adjusted net income and record adjusted EPS, We continue to invest in our future.

Speaker 3: adding more senior talent to our team in 2021. In advisory, we recruited eight senior managing directors, had two additional SMD recruits join last month, and promoted our largest class ever. We also added two important coverage sectors in equity research and expanded our capabilities and reach in most of our businesses. As a result, our firm is well positioned to begin 2022.

Adding more senior talent to our team in 2021 and advisory we recruited eight senior managing directors had two additional SMT recruits joined last month and promoted our largest class ever. We also added two important coverage sectors in equity research and expanded our capabilities and reach and <unk>.

Most of our businesses as a result, our firm is well positioned to begin 2022.

Speaker 3: Celeste will discuss our financials in more detail later in the call, but as a preview, I would like to highlight a few important achievements. We reported our fifth straight quarter of advisory revenues greater than $500 million. And our 2021 advisory revenues of more than $2.7 billion are nearly $1 billion more than in 2020.

So less will discuss our financials in more detail later in the call, but as a preview I would like to highlight a few important achievements, we reported our fifth straight quarter of advisory revenues greater than $500 million and our 2021 advisory revenues of more than $2 7 billion or nearly $1 billion more than in 2020.

Speaker 3: are underwriting business generated another thought quarter booking more than fifty five million in revenues this is our second year with underwriting revenues well-surpassing two hundred million

Our underwriting business generated another solid quarter booking more than $65 million and revenues. This is our second year with underwriting revenues, well, surpassing $200 million.

Speaker 3: Our equities business continued to perform well, while AUM in our wealth management business exceeded $12 billion for the first time.

Our equities business continued to perform well.

AUM in our wealth management business exceeded 12 billion for the first time.

Speaker 3: As for our margins, we delivered a fourth quarter adjusted operating margin of 41% while our fourth quarter adjusted EPS of $7.15 increased 26% from the year prior. For the full year, our adjusted operating margin was 34%, exceeding our long-term stated target.

As for our margins, we delivered a fourth quarter adjusted operating margin of 41%, while our fourth quarter adjusted EPS of $7 15 increased 26% from the year prior for the full year, our adjusted operating margin was 34% exceeding our long term stated target.

Speaker 3: Full year adjusted earnings per share of $17.50 increased 82% from 2020.

Full year adjusted earnings per share of $17 50 increased 82% from 2020.

Speaker 3: Also, in 2021, we returned over $850 million to shareholders through dividends and share repurchases, executing on our goal of returning all of our earnings not invested in the business to our shareholders.

Also in 2021, we returned over $850 million to shareholders through dividends and share repurchases executing on our goal of returning all of our earnings not invested in the business to our shareholders. In addition.

Speaker 3: to well more than offsetting compensation-related shares issued to our employees.

Two well more than offsetting compensation related shares issued to our employees.

Speaker 3: Later in the call, I will provide more detail across our businesses in my first annual year-end review. But first, we will hear from Ralph, and before we do, I want to commend him for leading Evercore on a path of sustained growth, a path that we will continue to follow. Thirteen years ago, Ralph started to assemble the building blocks that would ultimately lead Evercore to what it is today, a large, nimble firm that is diverse enough to be successful but still grow in a variety of environments.

Later in the call I will provide more detail across our businesses and my first annual yearend review, but first we will hear from Ralph and before we do I want to commend them for leading Evercore on a path of sustained growth path that we will continue to follow 13 years ago, Ralph started to assemble the building blocks that would ultimately.

But really at Evercore to what it is today a large nimble firm that is diverse enough to be successful, but still grow in a variety of environments, Ralph guided us with his vision extraordinary leadership and management skills building a firm a broad and deep capabilities.

Speaker 3: Ralph guided us with his vision, extraordinary leadership, and management skills, building a firm of broad and deep capabilities.

Speaker 3: with the highest quality talent on the street. I've loved being Ralph's partner over these last five years and feel incredibly fortunate to also have him as my friend. Beyond being an extraordinary business leader, he is an extraordinary person. I will miss his active involvement in the running of the firm and know that his passion and support for Evercore will continue. Let me now turn it over to Ralph.

With the highest quality talent on the street of.

I've loved being Rouse partner over these last five years and feel incredibly fortunate to also have some as my friend beyond being an extraordinary business leader. He is an extraordinary person I will miss his active involvement in the running of the firm and know that his passion and support for Evercore will continue let me now turn it over to Ralph.

Thank you John .

As John mentioned this is my 50, <unk> and last earnings call and as you may have seen in our earnings release. This morning. Another record in every respect both for the quarter and for the year.

During my almost 13 years here, we've experienced both significant growth and very strong financial performance.

Total net revenues adjusted have grown 17 fold from $194 million in 2008 to over $3 3 billion in 2021 and advisory revenues have grown 15 fold from the $178 million to well over 1.2 dollars 7 billion.

Our adjusted operating income has grown from $9 million in 2008 to over $1 1 billion in 2021 adjusted earnings per share has grown from 12.

In 2008 to $17 50 in 2021, and adjusted operating margins have increased from four 6% in 2008% to 34% in 2021.

Of those 13 full years have been records for revenues and earnings per share.

With the only exception being 2019, when revenues were down 2% and earnings per share somewhat more.

And our stock has risen roughly eight fold from $16 a share.

When I joined to 126, and a fraction at yesterday's close and I have to say it might even have been a little bit better if we didn't trade at a paltry seven five times trailing 12 months earnings.

There are also a number of things, which I am extremely proud that are not necessarily evident from our financials or our stock price and let me review a few of these.

First we have globalized the firm.

In 2008, roughly $5 million of our $178 million of advisory revenues were from clients outside of North America.

Over the last four years, roughly a third of our revenues have come from clients outside of this continent.

Second we have dramatically expanded the matters on which we are able to advise our clients.

When I joined we were essentially an M&A and restructuring firm today, we have the number one activist defense practice, the number one corporate restructuring practice splits spins et cetera.

Ed Advisory equity advisory and a full range of additional advisory services. We are the only independent firm with an equity underwriting capability and in equity research and trading business. As a result, we are able to advise our clients on almost anything that they want to do strategically where in the <unk>.

<unk> markets and John and I can confidently sit in front of any recruit and assert without challenge that they can do significantly more business with their clients at evercore than at any other independent firm.

Third we have become a talent development machine.

When I joined the firm, we have 35 advisory senior managing directors and only three of them were promoted internally.

Last month, we promoted 17, new senior managing directors in our advisory business and one in our equities business the.

The number of internal promotions is almost double the number of external hires over the last year. The first year that that has been the case almost half of our advisory Smbs today have been internally promoted.

And the internally promoted advisory Smbs have essentially the same productivity as those who we have hired externally.

And we are working hard and have and.

And aspire to having the most diverse and inclusive firm in our business.

And finally, we have consistently emphasized the importance of our culture of putting clients first excellence integrity and teamwork we.

We collaborate more than ever and our clients benefit from that collaboration in fact in each of the last four years more than 80% of our advisory revenues have had two or more smbs working together to serve our clients and almost 60% have had three or more smbs working with our clients.

As a result of all of these developments our revenues come from a much wider array of capabilities geographies and sectors.

They are meaningfully less volatile than they have been historically and as we have proved over the last three years. We are much more of an all weather firm than we were in 2008.

I also am very proud that we have installed next generation leaders and almost all of our important businesses and corporate leadership roles three.

Three of the four leaders of our U S Advisory business.

One of the leaders of our European Advisory business, the leader of our Asian Advisory business, the leader of our equities business, our CFO and our general counsel are all in their <unk> or early fifties.

So the firm is extraordinarily well positioned to grow and succeed for many years to come.

Finally, I am thrilled that John will succeed me as sold chairman and CEO at the end of this month as I had hoped from the first day I met him almost seven years ago.

He is deeply skilled at our business, a superbly fine human being and fully trusted by both clients and our team.

With him at the helm.

Could not be more optimistic about the future prospects for Evercore and I very much look forward to being part of that future success in my new role as Chairman Emeritus.

Before I turn the call back to John .

Let me conclude by saying that the single best thing about this job has been the people with whom I have interacted, our founder and senior Chairman Roger Altman.

John .

Our management committee are many talented.

Senior managing directors, our employees, our board our shareholders and yes, even the analysts on this call. It has been for me a remarkably fulfilling almost 13 years truly interac truly enhanced by my interactions with all of you.

Let me now turn it back to John .

Thank you Ralph.

Again, our firm our clients and our shareholders. All thank you deeply for your incredible dedication of Evercore, which we know will continue in your new role.

I want to now turn to a more detailed review of our past year, which I will do at the end of each calendar year going forward.

We'll also provide more context behind some of the biggest drivers of our future growth.

In advisory our sources of revenue in 2021 were broad broad as defined by transaction size geography sector capability and client type.

First regarding transaction size merger volume was up significantly across the board, which drove our high activity levels and strong fees.

For the market overall looking at the largest deals defined as those above $5 billion.

Dollar volume increased 42% globally and the number of these large deals increased 61% from 2020. We also saw increased year over year activity at Evercore. Further we advised on three of the top 10 largest global transactions in 2021, including advising GE capital aviation.

<unk> on its pending $30 billion sale to Aercap holdings advising the board of directors of Canadian Pacific on its $29 billion acquisition of Kansas City, Southern which notably was the largest transportation deal in 2021 and serving as the lead adviser to grab on its $40 billion spec merger the large.

<unk> spec deal ever.

While we remain active in advising on the largest M&A transactions globally, a significant portion of our business stems from deals defined as mid cap in the $1 billion to $5 billion range.

For the market the $1 billion to $5 billion rates doubled in both volume and number of deals and corresponding with that we saw an uptick in the volume and number of our completed deals in this range.

Next in terms of geography, the U S drove 44% of the markets Global deal volume in 2021 in the U S. The M&A market saw 82% dollar volume growth and 23% increase in the number of deals year over year, while a larger percentage of our business came from the U S versus the.

The overall market in 2021, we are very much a global business and we continue to see geographic revenue diversity.

As for sector diversity, we saw activity in every major sector for the market overall technology was the most active in 2021 similar to the market. We were also very active here. Yet we were also very active in healthcare energy industrials consumer financial services and real estate.

Sector diversity in our fee pool was evident.

Within advisory we've gained prominence in multiple capabilities outside of traditional M&A, such as activism defense restructuring and importantly capital advisory.

Capital Advisory in particular has become a growing revenue stream and we've seen our private capital advisory our private funds group and our real estate capital Advisory revenues combined grow at over a 45% compounded annual growth rate over the past three years, having diverse.

Strategic and capital raising capabilities gives us more ways to serve our clients and more opportunities to transact with them.

Let's turn now to review a subset of our capabilities as.

As we've highlighted we built a preeminent activist defense practice and are continuing to grow as activism activity does particularly in the U S.

It is at record highs not only did activism activity helped drive 2021 to a record year market activity here is showing no signs of decelerating large cap companies are increasingly targeted and in 2021.

It represented 27% of all campaigns.

Further actavis are more often including ESG related to tax and their campaigns ever.

Evercore is currently advising companies, representing approximately $1 five trillion in market value and activism defense.

Our restructuring practice is also better positioned now than ever before.

Years ago, our business was almost exclusively debtor mandates at 90%, but as our firms creditor advisory practice has grown the overall mix has shifted to become a more balanced and diverse practice. Today. In addition to credit assignments, we have a broad array of liability management engagements out of court restructure.

And we increasingly work with our debt advisory team in private financing activity, even with a less than 1% default rate in 2021, our team was active and busy we've built a business that has proven it can perform at a in a varied market environment.

We also continue to build and evolve our equity capital markets business, we've executed on our plan to increase sector diversity and saw activity across a broad range of sectors outside of our historical strength in healthcare, including TMT consumer retail financials and industrials. We also.

<unk> and expanding our capabilities, adding to or enhancing convertibles pipes private placements and direct listing expertise while also adding members to our team across virtually every sector and product.

Further we have been able to increase our position in underwriting deals as we continue to add value and gain recognition from our issuer and institutional clients, notably we were book runner on over 90% of all of our equity and equity linked underwriting transactions in 2021 and.

And executed 97 equity and equity linked book run transactions in 2021 versus <unk> 85 in 2020, a 14% increase we participated in six of the 25 largest ipos of 2021 and we once again ranked in the top 20 for equity underwriting fees as estimated by Dealogic.

For the latest 12 month period for deals listed on U S exchanges, excluding bought deals and Atms, we remain focused on making our way towards the top 10 in equity new issue market share.

Outside of the advisory we also had great success in 2021 and are seeing the impact of our dedication to excellence in equities. We continued to focus intensely on highest quality research and client service. Our work was formally recognized by institutional investor with 43 in.

Individual analysts ranked over our.

Our highest mark ever we also added six new industry coverage sectors and increase the number of companies we cover by nearly 10% over 2020.

Finally and of utmost importance, let's talk about our clients.

Our focus on our clients corporate institutional and financial sponsor clients are the heart and soul of what drives our culture.

One well one can discern our activity levels with our corporate and institutional clients by assessing publicly available data. It is harder to estimate the percentage of revenue that comes from financial sponsors, especially given our prominent outside of traditional M&A.

Over the past three years, approximately 30% to 45% of our advisory revenue has been sponsor related meaning we advised the sponsor our sponsor related company in 2021, we were at the top end of this range. Let me give you some additional background on this and also highlight the growth and potential ahead.

Early on we identified that the opportunity to serve financial sponsors extended well beyond just buying and selling portfolio companies in that effort. We were an early leader in establishing capabilities and expertise in fast growing areas of secondary investments GP Stakes capital raising and continuation fund initiatives.

These capabilities have deep deepened our connectivity with.

It was important and growing sponsor clients and will service well as we continue to focus on growing our market share and more traditional sponsor driven M&A assignments.

While our activity with sponsors is already very healthy we believe the opportunity ahead is fast given the depth of the relationships combined with a $3 four trillion in global private equity dry powder and the talent we've added to our team.

Turning to the future, let's review our roadmap for growth.

First we will fill in the areas of sector and geographic white space of which there is plenty to expand.

Some of our focus will be in the fastest growing segments of the economy. The <unk> Fintech Green Tech biotech and technology.

Next we will continue to invest in a plus talent, both externally and by focusing intensely on cultivating talent from within.

As I mentioned with the addition of new Smbs, who joined and we recently promoted we begin 2022 with the most robust pipeline of ramping advisory smbs ever with over 35 positioning us for continued growth.

Through external hiring in 2021, we've continued to build our ECM debt advisory and sponsor focused capabilities.

Expanded our geographic reach in Spain, and broadened our sector reach to include Fintech.

In the fourth quarter, we announced three additional Smbs, Jonathan Kaufman and Ted Michael to focus on power and renewables.

And <unk>.

Who will bolster our industrial practice and basic materials and recently in the first months of 2022, we welcomed to Kashi in a way to further build our advisory footprint in Asia, and David <unk>, who will enhance our debt advisory practice.

In regards to our large class of internal promotes to senior managing director. They were selected not only for their talent and ability to serve clients and generate revenue.

But of equal importance each one is outstanding and what they do and embodies our core values, we look forward to their continuing an increasing impact to our firm which.

Which will enhance our capabilities across M&A and capital advisory and equities. Furthermore, we continue to have meaningful conversations with potential recruits in areas of strategic significance.

And in addition to hiring at the most senior levels, we are adding talent at all levels to continue to meet the needs of our clients and to support the elevated pace of activity.

Before I turn the call over to Celeste to review our financials I want to take a moment to comment on our ESG and sustainability efforts, we are proud to announce that as well.

Part of the firm's focus on social responsibility, we formed the Evercore Foundation, a global foundation to serve as a vehicle for some of the firms philanthropic activities. The average core foundation was capitalized with an initial contribution of $10 million at the end of last year and will be focused on a narrow set of important areas that are of particular.

<unk> interest to our employees and our communities.

This focus will include an emphasis on organizations that address diversity equity and inclusion we are committed to getting back to and having a positive lasting impact on our communities.

In which we live and work the foundation will be important vehicle from which to execute on this commitment and it is part of our pledged to.

To be more socially responsible as a firm.

In addition, we published.

Our inaugural sustainability report last spring and we look forward to providing more updates this coming spring and in subsequent years now let me turn the call over to select Thank you John .

For the fourth quarter of 2021, net revenues net income and EPS on a GAAP basis.

A record $1 $1.296 billion and $6.96 respectively for.

For the full year record net revenues net income EPS and EPS on a GAAP basis of $3 $3.740 billion and $17 eight respectively.

Comments from here will focus on non-GAAP metrics, which we believe are useful in evaluating our results.

Our standard GAAP reporting and a reconciliation of GAAP to adjusted results can be found in our press release, which is on our website.

Fourth quarter adjusted net revenues of $1 1 billion grew 16% year over year on a full year basis, adjusted net revenues of $3 3 million increased 43% compared to 2020.

Fourth quarter advisory revenues of $971 million grew 23% year over year and were $2 8 billion for the full year at 57% increase compared to 2020.

This represents our <unk>.

Last quarter and best year ever and the first time adjusted net revenue surpassed $3 3 billion for the 12 months.

Our revenue includes approximately $21 million from transactions that closed in early January Andrew I had other conditions pending up period and according with relevant accounting principles.

Long those lines, we recognized $93 million in the third quarter of 2021 and $32 million in the fourth quarter of 2020.

Given our record results and based on current consensus estimates, we expect to maintain our number four ranking in advisory fees. Among all publicly traded investment banks and maintained our number one position among independent banks.

Fourth quarter underwriting fees of $65 million were down 32% compared to Q4 2020.

For the full year underwriting fees were $247 million down 11% year over year.

The decrease for the year is attributed to the fact that we had two very significant <unk> in 2020 and in 2021, there is less activity in one of our largest sector.

Commissions and related revenue of $55 million in the fourth quarter were up 4% year over year for.

For the full year commissions and related revenues related fees of $206 million were flat compared to 2020.

Lastly, fourth quarter asset management and administration fees of $22 million increased 8% year over year.

And full year asset management and administration fees of $79 million increased 17% compared to 2020.

Turning to expenses, our adjusted compensation ratio for the fourth quarter was 49, 7%.

Our full year comp ratio was 55, 7%.

Fourth quarter non compensation costs of $101 million were driven by higher travel and entertainment and then $10 million funding of the Evercore Foundation that John discussed earlier for the full year non compensation cost of $330 million were up 4%.

Fourth quarter, adjusted operating income and adjusted net income of $464 million and $338 million increased 23% and 22%, respectively and adjusted earnings per share of $7 15, Scott increased 26% versus the fourth quarter of 2020.

For the full year adjusted operating income adjusted net income of $1 $1.843 billion increased 78% and 83%, respectively and adjusted earnings per share of $17 50 increased 82% versus the full year 2020.

We produced a quarterly adjusted operating margin of 41, 3% 251 basis points of margin expansion compared to the fourth quarter of 2020.

Our full year adjusted operating margin of 34% reflects 685 basis points of margin expansion compared to 2020.

As John mentioned, we remain committed to returning excess capital to our shareholders and returned a record $852 million to shareholders through dividends and repurchases of five 5 million shares at an average price of $132 or three 3 million shares net of issuance.

For the full year, while we bought back substantially more shares and we issued including those for the net settlement of RSC is our adjusted weighted average share count increased due to the timing of buybacks and upward pressure on share count from the Treasury stock method, driven by a substantially higher share price. However, our adjusted period.

On share count for the fourth quarter decline compared to the fourth quarter of 2020, and $48 9 million to $47 3 million, principally reflecting our buyback program net of issuance, partially offset by the impact of the aforementioned treasury stock method.

As of December 31, our cash and investment Securities totaled $2 4 billion, our excess cash as a percentage of our total cash and investment securities was in the low double digits up from the previous quarter. When the same number was in the single digits.

The increase is attributed to our strong fourth quarter operating results and particularly strong inflows at the end of the quarter.

In addition, we generally deploy excess cash on a one quarter lag.

That said, we did act aggressively to buyback our stock when the market sold off in November and December taking advantage of our robust cash position.

As a reminder, our cash generation and needs are dynamic and are heavily influenced by our business needs expect expected compensation obligations and timing of capital return and result in fluctuations from a relative excess cash position.

Turning to 2022 as you saw in the fourth quarter non comp expenses that were depressed by Covid are beginning to increase and while we still expect travel to long term remain below historical lever levels absent another significant COVID-19 interruption Genie and related expenses will likely be up in 2022.

As the firm grows we will also continue to see certain expenses increased like occupancy and equipment related depreciation and amortization.

And certain Kurt had tech related expenses, along with several other items increase.

And as you know most companies are facing inflationary increases including from vendors and suppliers. After only minimal increases in 2021 due to COVID-19 we.

We are very proud of what we achieved in 2021.

As we enter 2022, our pipelines are strong, but as always our visibility is limited to three to six months.

Our forward indicators, including risked and unrest backlogs engagement letters and conflict tax which are our most forward looking are all strong.

Before we open up the line for questions, Let me turn the call back over to John .

Yes.

Thank you select.

We feel very good about the future and believe that our strong underlying global economy, coupled with rapidly evolving technology and further growth in the financial sponsor to sponsor community will continue to drive high activity levels in the market while <unk>.

<unk> conditions today are strong we continue to monitor issues, which could impact activity levels, including equity market volatility inflation fed actions interest rates the regulatory environment.

In credit availability as well as the competition for talent and of course pandemic relation issues.

As driven as proven by our financial results, we have the scale tools intellectual capital intelligence teams to advise our clients holistically across strategic and capital needs and we are positioned better than ever before to address those needs in almost any environment.

Our business continues to perform extremely well and the prospects for Evercore as long term growth are exciting.

We see a huge opportunity ahead of us to strengthen our franchise even further with that we're pleased to answer questions. Operator, Please open the lines.

Thank you we will now begin the question and answer session. As a reminder, if you have a question. Please press the star followed by the one key on your Touchtone telephone if you would like to withdraw your question.

Keith if you are using speaker equipment, you may need to lift the handset before making a selection.

Is that with your questions. Thank you Youre welcome to rejoin the queue for additional questions by implementing.

Our first question comes from Steven <unk> with Wolfe Research Your line is open.

Hi, good morning.

Good morning.

So last I was hoping to start off with a question actually on the expense outlook.

One of your competitors did hint that significant expansion in non comps. In addition to some of the inflationary pressures on the comp side you guys did a really nice job of managing expenses. This year, you did allude to some of the inflationary pressures, but to what extent can you flex expenses. If the revenue backdrop remains a little bit more challenged beyond the next six months.

So our visibility is it been more limited.

Good morning, Steve Nice to hear from you so.

Non comps.

As I said wed.

We would expect G&A to normalize.

As the.

The world hopefully gets back to normal in the fourth.

Fourth quarter.

Our travel was around a third of what we saw sort of pre pandemic.

With a bigger increase in November and then in <unk>.

Going off of that.

But we would expect those to increases as people start to do business in ways they used to.

And then as the <unk>.

Firm in our head count grows we will see the expense growth from occupancy and equipment. You saw some of that this year that will continue to increase next year, sorry in 2022, and then the costs associated with that and then.

As you know every time you higher person you have tech related expenses like licenses and things like that so those will grow with our head count growth, which was about 9% last year.

And we will continue to have head count growth. This year at least based on where we are today.

And then as you mentioned the inflationary pressures so.

Obviously if things.

If the revenue environment isn't great. We'll do what we can to manage our expenses and we will be very careful with them. We have great cost controls in place that Bob implemented.

And we will continue to have those in place as it relates to comp that is much more related to revenue.

And the bulk of our comp is driven by our revenue performance, our F&B or based on performance are paid based on their revenue performance.

And below SMB bonuses are paid based on firm performance as well as individual performance. So that's where we would have the most flex from an expense perspective, and obviously over the overwhelming percentage of our expenses for the firm.

Thanks for that perspective, the last well first off shame on me route.

You accomplished a great deal over these last 13 years I should have started with that so wishing you the best in the new role.

And maybe just for my follow up just a question for John .

Given the recent market volatility the market cap declines investors have indicated some growing aversion to companies with heavier capital markets gearing or just higher beta sensitivity.

Just that large in many of your primary businesses are certainly strongly correlated to equity market levels traditional M&A and ECM in particular I was hoping you could just speak to how is the market cap declines are impacting their willingness to transact for both sponsors and strategic and to what extent were the higher fee rates on transactions that we've been seeing.

Over the last couple of years, how much of that was a function of the recent bull market that may not be sustainable.

Steve when we look out and look at our backlog it continues to be strong and very diverse.

<unk> really across the board.

At high beta companies low beta companies.

Financial sponsor portfolio companies.

We really seeing those that that diversity really be impactful in that as.

As we look at what we expect we just expect that there will be continuing momentum from this from this strong backlog.

We have I would say anecdotally the conversations that we're seeing and transactions that are coming in are quite full.

So we don't really see three to six months out any change as to what we're what we're really dealing with right now.

<unk> things could change in the market could turn down more dramatically there could be even more instability and of course, one of the things that we always look at when we're thinking about.

The merger businesses CEO confidence and the stability of the markets, which give gives companies the confidence to really be aspirational and strategic.

Right now, we don't see that impacting.

Where we are right now or our merger business, but we clearly are watching it carefully.

Great. Thanks for taking my questions and I'll hop back in the queue.

Our next question comes from Manan <unk> with Morgan Stanley . Your line is open.

Hi, good morning.

I was wondering.

How are you advising clients on the interest rate environment.

I know we've gone through this in the past, but we could have.

Four maybe five rate hikes, along with the fed shrinking its balance sheet.

Sure.

What do you think that this means for the back half of the or is this sort.

Sort of pulling forward deal activity as companies try to get into while cheap financing is still widely available.

Or do.

Do you think thats far hikes stockpile of zero is still not enough to impact deal activity provided the economy is pretty robust as it is right now.

Well I think we would say that because rates are so low right now four hikes clearly are nothing to discount we do believe that rates will still be relatively low historically.

There is no question, though that clients, who need to do financings are really leaning on doing financings because they really understand that the rates will be going up.

Transactions, though as we're really dealing with clients are really still on tap to be moving forward and we don't see anybody desperately thinking that they have to get things done having said that one of the things that we are seeing is that there is a very healthy.

Activity level of financial sponsors wanting to get deals done now obviously when they are buying.

The rates in which they borrow impact their returns, but also they believe that selling is.

Is advantaged by lower rates also so you see sponsor activity.

Very much focused on the rates and the levels, but I would say that as we really looked at our backlog and we looked at what we see ahead. We don't think that that is going to be impacted materially.

Although I would say that people everybody is aware everybody's watching both the rate hikes and inflation and I'd say that there is no question that boards and Ceos are focused.

Ralph do you want to comment on that that's it.

Great. Thanks.

That's great color.

And then John I appreciate it.

Thoughts on.

Mid size deal activity.

Activist defense practice in the restructuring business in your opening comments.

Is there any color you can give on how much those businesses contributed to revenues over the last year or.

How we should think about them contributing to total revenues over the next couple of years.

We really can't give that kind of detail, but what I would say, we did say in the call that our sponsor business, it's 30% to 45% of our revenues in.

In advisory and I would just say that the that these businesses are very healthy and they continue to have real upside potential.

Got it thanks for taking my questions and Ralph Congrats on another great Daniela and all the way.

Thank you very much.

John is going to continue that tradition.

Not giving.

Business line by business line revenues and.

It's not that we don't want to be transparent that the lines between some of these are very blurred.

So it's really hard to give you the kind of granularity that you're asking for.

Fair enough.

I had a try but thank you.

Yeah.

It's a new sheriff in town.

Yeah.

<unk>.

Yes.

Our next question comes from Jim Mitchell with Seaport Research Your line is open.

Hey, good morning.

Maybe we can speak to sort of the intermediate and long term growth opportunities on more detail you guys continue to put up strong growth.

But as Ralph pointed out the low multiple on your stock kind of implies the market doesn't believe this level of revenue can continue so can you speak to that disconnect where you see the most.

From current levels over the intermediate long term what can be a counterweight if M&A slows down.

I think it's just key for shareholders to get a sense of.

You guys seem very optimistic about growth shareholders Don.

Sure Jim will give.

To our best in talking a little bit about our growth.

As we've articulated before we really think about growth in several different ways. One is that that we continue to invest in in areas, where we see white space, whether those be geographic or whether there are sectors that we think are important sectors that we can invest in.

So for example sectors like Fintech biotech clean tech.

There are definitely large white spaces in those sectors, where we can really grow in addition, and very importantly, we have a number of client coverage initiatives that we are very excited about whether those are financial sponsors where we think we can cover these sponsors more holistically and leverage off of.

Very strong relationships we have.

Buying and selling stakes.

For GP and LP raising funds or in addition, driving continuity funds, but then using those strong relationships really to the basic M&A side and that's.

Very strong important investment area for us and we feel very good about that.

In addition, there is so much dry powder there that the more we invest there the more we're seeing that it's happening and we hired Brad Brad David.

Out in the West Coast already and we continue to look for opportunities to invest there. In addition, geographically we think there is a lot of opportunity in Europe , and we are looking closely at those opportunities whether those be in places like investing in France, or Germany, but we really feel like there's great white space there.

In addition.

We are investing in our relationships with multinationals, we have an effort to really increase our coverage for some of those multinationals and we are we are doubling down in terms of investing in that client franchise.

Also we are looking at our capabilities one of the things you say as well.

Could you where could you see opportunities one of the things we've really invested in as we said is restructuring.

And even though the default rate is very very low right now our capabilities have grown there and we are doing more and more liability management, there and creating real value for clients and so that's a real stream that has developed over time and we feel really good about it. In addition, as we described we have we've always had.

The credit.

Our business was a debtor mandate business, but our creditor practice has grown dramatically and we really think that we are able to provide service. Their ECM is an area that you've heard us talk about for quite some time and we're really excited about building out that capability, we added converts and.

<unk> areas growing.

Direct listings as a strength now in <unk> and.

And opportunity set we basically invested in.

In pipes and specs.

And we really see the opportunity to grow also through sectors. We always had a strong biotech business, but we're now able to really.

Invest and actually add value in other sectors too when we talked about those on the call and then finally just to go back to what I would call as some of the great capital capital growth areas, whether it's fintech or biotech or clean tech, we have real opportunity as we build out those coverages to.

Really use all of our product set in the in those sectors and we are seeing that happen right now as I said, a good example of that would be clean tech, where we hired Jonathan Kaufman and instead Michael.

We basically see a tremendous opportunity in a sector like that as well as the other sectors and those are generated generating real opportunities through all of our capabilities and so we see that looking at all of these factors.

We see really great broad diverse opportunity.

I would just add.

That.

We're not number one in advisory revenues for a number for.

So we have.

Plenty of room to grow John identified a lot of white space and there definitely is that and.

And if you look at our largest business the advisory business, which is.

Well over 80% of our revenues.

We have.

Revenues in that business are driven by.

Multiplying the number of senior managing directors, we have by our industry leading <unk>.

Productivity and as John said in his opening remarks.

Through our internal promotes and new hires we have roughly 40 senior managing directors, who are still ramping up.

In their activity so.

With that and all of the white space that John identified.

It certainly feels to me that.

Our investors have consistently underestimated.

Our growth opportunities.

Good point.

By the way one of the things that you didn't ask but one of the questions.

That I think is an important one which is.

How do we feel about recruiting and the discussions that we're having we're continuing to be out in the market talking to very talented people in areas, where they think they can be additive and those conversations are fulsome and going well and so we're going to continue that aspect of growth also.

No that's great color, maybe if I had one follow up just on the restructuring comments since that's been one area that's quite weak right now not not firing on all cylinders, how do you think about Rhys.

Restructuring, it's a very has a very positive environment, but as rates go up do you feel like that's a business that could start to grow in the next year or two how do you think about the outlook there.

Well.

As history would point.

As rates go up.

<unk> do become more distressed.

For restructuring to really kick into full blast. It would mean there would be some distress in the system.

Sector by sector, we are well positioned I think we have the best restructuring business on Wall Street, I think we've got outstanding professionals, there theyre finding ways to really add value to clients now.

I think that as the environment becomes even more uncertain and there's more risk in the environment I think their activity levels are going to pick up but even now they are really finding ways to add value to clients and there are quite busy.

Okay, great. Thanks.

Our next question comes from Devin Ryan with JMP Securities. Your line is open.

Great.

Jon Ralph it's less Ralph Echo the comments best wishes.

Thank you.

Really set a high bar in the industry. So it's been a pleasure.

In terms of the.

I guess first question wanted maybe hone in a little bit more on kind of a banker productivity comments I mean, the productivity has roughly doubled over the past five years Youre you are kind of leading the industry by a number of metrics and I think when we take a step back it makes sense your evaluations have more than doubled over.

The past five years.

<unk> deals.

You have added more resources you per deal.

And then maybe greater efficiency in this new economy. So I'm just curious kind of how you would frame some of the puts and takes on kind of the baseline for productivity also appreciating you have a lot of bankers that are still ramping on the platform.

And kind of connected to that just the opportunity actually drive more fees per transaction or the other situations, where youre still kind of missing on opportunity in transactions, where you can actually get more feet out of the deals.

Sure. Thank you for the question Devin.

We as we looked at our capabilities, we think that as we've broadened our capabilities that as an opportunity to do two very important things number one to bring more advisory capacity to every transaction and every client relationship but also to be more fulsome in what we're able to provide to clients longer in <unk>.

Transactions and therefore, we are able to go longer as the exclusive adviser in transactions and therefore take a larger fee.

Because we are adding more value through the whole life of the transaction I think what we what we really believe is that we have a number of capabilities that are just being built out now for example in equity capital markets.

There is we have a long way to go in terms of what we can do we've made tremendous progress, but we feel really good about the momentum of that business and I think we can really build out and leverage those capabilities and grow the volume that comes through ECM and as we add resources and we really begin to build out.

Our reach in terms of sectors, I think youre going to see that build.

In debt capital markets, we are continuing to build out that area and we continue to have real opportunity there.

To add value to clients and really be.

B B really helpful. In terms of both their day to day managing of their business, but also when they are in transactions.

In activism, one of the key things that Youll see is that activism and activism defense has really been a tremendous marketing.

Marketing vehicle for us and we've been able to really expand relationships and drive even further capabilities into those relationships by using the activism defense.

Group, which has really given us access to many many more clients.

So I think R. R.

Our our productivity ratios.

Can continue at these high levels now to say that we could double them from here I think is quite a stretch I think that clearly that would be something that would be hard to do but I think we really have upside here and I think that we as we add more <unk>.

<unk> people in our white spaces.

We will continue to have real possibilities in terms of growing that in addition, if you look at the financial sponsor business as you know the financial sponsor business has tremendous upside. There is just so much dry powder and there are so many portfolio companies and the activity levels of financial sponsors are extremely high so as we continue to add resources and make it.

Get momentum there and make inroads I think youll see that that will also be a very large contributor to really what we're able to do in bringing in revenue.

Devin My perspective on this is really if you look at the productivity growth which has been.

I think has exceeded all of our.

Expectations.

There are a number of secular factors.

John hit on.

The fact that we're doing.

That we have so much broader capabilities and we're doing more with clients.

As important in two respects number one it allows us.

To get additional fee opportunities on the same transactions and very importantly, it allows us to be the sole adviser or the lead adviser and therefore to capture.

All or the majority of the fees on a transaction thats a secular trend that I think continues the second is.

As our brand.

The brand of Evercore today versus five years is just stronger.

And what that means is that the same SMB is going to get in any given year.

Few more at bats, and batting average is going to be a little bit higher.

Just because of the brand of the firms. So those two things are secular trends, which we see.

Continuing while we can't predict is the cyclical element of it and obviously last year was a record year in M&A activity the only year that.

There was <unk> five trillion.

More than five trillion of announced activity and that certainly also contributed to <unk>.

Productivity.

Last year, so the secular trends definitely continue.

And then theres, the cyclical overlay, which we can't predict.

Okay.

I appreciate all that color I'm going to squeeze one more quick one in for <unk>, just coming back to.

Compensation the comp ratio.

Obviously, some nice operating leverage there this quarter is really a year, 42% revenue increased 35%.

Right.

How much.

Deferrals teen percentage change, obviously coming off of a huge revenue years.

It wont be thoughtful about kind of what that sets up for future years. So I'm curious if you guys manage deferrals.

What that percentage.

Relative basis to prior years.

So.

Generally tried to really balance.

Recognizing.

Expense incur.

Current year, when we know our revenue with retention.

And given the strong revenue environment, we try to recognize.

AI is much expenses made possible trying to balance those two things. So we do think about that in the various environments.

Got it okay. That's all I needed. Thank you.

And our next question comes from Richard Ramsden with Goldman Sachs. Your line is open.

So good morning, everyone and Ralph just to add to the chorus.

Best for the next chapter in your life I really hope, it's as successful as the last one.

So my question is around the environment for large cap M&A in the U S and it does seem at least anecdotally that a growing number of transactions.

Across a broad number of sectors are getting flags for competition review can you just talk a little bit about the impact you think that's having on the willingness for corporate boards to transact.

Is it something that's coming up more in discussions and do you think it could lead to a slowdown in activity.

Sure Richard Thank you for the question and I'll answer it and I think I'm sure Ralph will want to say something about this also.

This is not new we've known for quite some time that there would be more regulatory over oversight with respect to transactions and I think this has been part of the dialogue and boards for some time now it clearly is louder now in terms of the volume of it.

But it's clearly been around for some time.

Basically companies are looking at growth and some of the very large cap deals could be focused on and we're very focused on those on that as something that could put a dampener on those I.

I would say right now as we look at the transactions in the boardrooms and the ones that I'm having also.

I'd say people are looking at this certainly with an eye toward what could happen, but I think the transactions are still being developed and thought about.

It would.

Depending on how it plays out.

It could have some impact clearly the law would have to change for it to have a major impact and that hasnt happened, yet, but I think we're all watching it.

One of the things you are seeing though is that in things like sponsors.

That the competition element is not a big issue.

Vic to buying and selling companies so that a sector alone.

Not going to be impacted at all in fact, it may be strengthened by the <unk>.

In fact that Theres, just a lot of opportunity out there to really by itself. So.

So I think as we look at it number one.

We clearly know that its something to be focused on and we're focused on it and boards I think are talking about it I think that there is still a need to drive growth.

And in this market, where there continues to be opportunity youre seeing youre seeing boards and companies really aggressive CEO confidence continues to be quite high and therefore as we see the transactions play through the system.

They're actually being developed and they're being thought about very aggressively.

It remains to be seen how much it'll it'll it'll dilute the atmosphere and whether the deals will be put on hold.

But right now as we look out three to six months, we don't see a major.

Overlay in terms of the dampening.

I think John hit it.

Definitely discussed.

But it has really not had.

On many if any.

Transactions that we've.

<unk> been involved with.

And I think.

That John made about.

To really have a sea change in antitrust.

<unk> you need law change.

And there's no talk of that.

At this point.

In time so.

It's definitely something to be monitored but.

Certainly has not yet had.

In effect on all of the indicators that we look at our forward activity.

Okay, Great and then.

As a follow up can you just talk a little bit about geographic skews that are emerging in the business.

John I think you said on the last call that you have seen a pickup in your European activity in particular.

Has that continued or has some of the geopolitical uncertainty and concerns around the elections in say, France impacted pipelines in Europe .

Well.

Our European business has done well.

Well.

And we see that having real momentum and so as I look at it from our lens.

We are very really optimistic because we really see that those dialogues and the transactions being developed and coming out of Europe .

Our <unk>.

Quite strong and so.

As we look at it and as we experience it.

We are really finding it to be.

Quite a powerful vehicle.

Going forward, having said that.

Our U S business is larger than our European business as you know.

And so.

Going to watch carefully, but we really feel like it's a real growth area for us and we see momentum in that business and so from our perspective, we think those patterns continue.

Okay. Thanks, Thanks, a lot for taking my questions.

We have we still see a lot of time I would now like to turn the floor to John Weinberg.

<unk> for any closing comments.

Thank you operator.

You all for joining us today.

We are obviously around if you have other questions you can call us.

Ralph Thank you for everything.

And Richard I look forward to interviewing next you next year.

Goldman Sachs financial institutions conference.

Thank you all.

This concludes today's Evercore first quarter and full year 2021 financial results Conference call. You May now disconnect everyone have a great day.

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Good morning, and thank you for standing by and welcome to Evercore fourth quarter and full year 2021 financial results Conference call.

Today's call all parties will be unless suddenly mode.

Following the presentation the conference call will be opened for questions.

Quite simply press the star followed by the one on your Touchtone telephone. Please press star zero for operator assistance at any time.

For participants using speaker equipment, it may be necessary to pick up your handset before making a selection as a reminder, this conference call is being recorded today Wednesday February 2nd 2022.

I'd now like to turn the conference call over to your host Evercore and I'm head of Investor Relations Jamie Easton. Please go ahead.

Thank you Michele good morning, and thank you for joining us today for Evercore fourth quarter and full year 2021 financial results Conference call I'm, Jamie Easton Everquest interim head of Investor Relations. Joining me on the call today are John Weinberg and Ralph's last time, our co chairman and Ceos and Celeste <unk> our CFO .

After our prepared remarks, we will open the call for questions earlier today, we issued a press release announcing everquest fourth quarter and full year 2021 financial results. Our discussion of our results today is complementary to the press release, which is available on our website at Evercore Dot Com. This conference call is being web.

<unk> lives in the for investors section of our website and an archive of it will be available for 30 days beginning approximately one hour. After the conclusion of this call. During the course of this conference call. We may make a number of forward looking statements any forward looking statements that we make are subject to various risks and uncertainties.

And there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. These factors include but are not limited to those discussed in everquest filings with the SEC, including our annual report on Form 10-K quarterly reports on Form 10-Q , and current reports on form 8-K.

Hey, I want to remind you that the company assumes no duty to update any forward looking statements in our presentation today, unless otherwise indicated we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the company's performance for detailed disclosures on these measures and the GAAP reconciliations.

You should refer to the financial data contained within our press release, which is posted on our website. We continue to believe that is important to evaluate everquest performance on an annual basis.

As we have noted previously our results for any particular quarter are influenced by the timing of transaction closings I will now turn the call over to John .

Thank you, Jamie and good morning, everyone.

When we spoke this time last year, we never imagined that a year later, we would still be wrestling with Covid and yet here, we are and although these times continue to be trying and volatile Evercore has continued to effectively serve its clients, while sustaining our unique culture and fostering deep collaboration across our firm.

Yes.

Well, we look forward to a return to office after omnicom.

Our subsides our teams have successfully adjusted the ebbs and flows of pandemic life and importantly remain intensely focused on advising our clients on their most pressing strategic priorities.

Before we go into results I want to note that today, it's Ralph final earnings call.

And it's hard to believe that this is his 50 <unk> quarterly call.

There is no better way to salute his impressive leadership.

And with the successful quarter, we've had in the year that we will just amount.

And we have Jeff It is a year of records in 2021 was by far the best year in our firm's history.

Adding more senior talent to our team in 2021 and advisory we recruited eight senior managing directors had two additional SMT recruits joined last month and promoted our largest class ever. We also added two important covered sectors in equity research and expanded our capabilities and reach and <unk>.

Most of our businesses as a result, our firm is well positioned to begin 2022.

Our underwriting business generated another solid quarter booking more than $65 million and revenues. This is our second year with underwriting revenues, well, surpassing $200 million.

Our equities business continued to perform well.

In our wealth management business exceeded 12 billion for the first time.

Full year adjusted earnings per share of $17 50 increased 82% from 2020.

Two well more than offsetting compensation related shares issued to our employees.

13 years ago, Ralph started to assemble the building blocks that would ultimately lead evercore to what it is today a large nimble firm that is diverse enough to be successful, but still grow in a variety of environments, Ralph guided us with his vision extraordinary leadership and management skills building a firm a broad and deep capabilities with.

The highest quality talent on the street.

Loved being rouse partner over these last five years and feel incredibly fortunate to also have some as my friend beyond being an extraordinary business leader. He is an extraordinary person I will miss his active involvement in the running of the firm and know that his passion and support for Evercore will continue.

Now I'll turn it over to Ralph.

Thank you John .

As John mentioned this is my 50, <unk> and last earnings call and as you may have seen in our earnings release. This morning. Another record in every respect both for the quarter and for the year.

During my almost 13 years here, we've experienced both significant growth and very strong financial performance.

Our adjusted operating income has grown from $9 million in 2008 to over $1 1 billion in 2021 adjusted earnings per share has grown from 12 in.

In 2008 to $17 50 in 2021, and adjusted operating margins have increased from four 6% in 2008% to 34% in 2021.

12 of those 13 full years have been records for revenues and earnings per share with the only exception being 2019, when revenues were down 2% and earnings per share somewhat more.

And our stock has risen roughly eight fold from $16 a share.

When I joined to 126, and a fraction at yesterday's close.

And I have to say it might even have been a little bit better if we didn't traded a paltry seven five times trailing 12 months earnings.

There are also a number of things, which I am extremely proud that are not necessarily evident from our financials or our stock price and let me review a few of these.

First we have globalized the firm.

In 2008, roughly $5 million of our $178 million of advisory revenues were from clients outside of North America.

Over the last four years, roughly a third of our revenues have come from clients outside of this continent.

Second we have dramatically expanded the matters on which we are able to advise our clients.

When I joined we were essentially an M&A and restructuring firm today, we have the number one activist defense practice, the number one corporate restructuring practice splits spins et cetera.

Third we have become a talent development machine.

When I joined the firm, we have 35 advisory senior managing directors and only three of them were promoted internally.

Last month, we promoted 17, new senior managing directors in our advisory business and one in our equities business.

And the internally promoted advisory Smbs have essentially the same productivity as those who we have hired externally.

And we are working hard and have and.

And aspire to having the most diverse and inclusive firm in our business.

And finally, we have consistently emphasized the importance of our culture of putting clients first excellence integrity and teamwork we.

As a result of all of these developments our revenues come from a much wider array of capabilities geographies and sectors.

They are meaningfully less volatile than they had been historically and as we have proved over the last three years. We are much more of an all weather firm than we were in 2008.

I also am very proud that we have installed next generation leaders and almost all of our important businesses and corporate leadership roles three.

Three of the four leaders of our U S Advisory business.

So the firm is extraordinarily well positioned to grow and succeed for many years to come.

Finally, I am thrilled that John will succeed me as sole chairman and CEO at the end of this month as I had hoped from the first day I met him almost seven years ago.

He is deeply skilled at our business, a superb <unk> human being and fully trusted by both clients and our team.

With him at the helm I could not be more optimistic about the future prospects for Evercore and I very much look forward to being part of that future success in my new role as Chairman Emeritus.

Before I turn the call back to John .

Let me conclude by saying that the single best thing about this job has been the people with whom I have interacted, our founder and senior Chairman Roger Altman.

John .

Our management committee are many talented.

Let me now turn it back to John .

Thank you Ralph.

Again, our firm our clients and our shareholders. All thank you deeply for your incredible dedication to Evercore, which we know will continue in your new role.

I want to now turn to a more detailed review of our past year, which I will do at the end of each calendar year going forward.

We'll also provide more context behind some of the biggest drivers of our future growth.

In advisory our sources of revenue in 2021 were broad broad as defined by transaction size geography sector capability and client type.

First regarding transaction size merger volume was up significantly across the board, which drove our high activity levels and strong fees.

For the market overall looking at the largest deals defined as those above $5 billion.

<unk> spec deal ever.

While we remain active in advising on the largest M&A transactions globally, a significant portion of our business stems from deals defined as mid cap in the $1 billion to $5 billion range.

The overall market in 2021, we are very much a global business and we continue to see geographic revenue diversity.

Sector diversity in our fee pool was evident.

Within advisory we've gained prominence in multiple capabilities outside of traditional M&A, such as activism defense restructuring and importantly capital advisory.

Strategic and capital raising capabilities gives us more ways to serve our clients and more opportunities to transact with them.

Let's turn now to review a subset of our capabilities as.

As we've highlighted we built a preeminent activist defense practice and are continuing to grow as activism activity does particularly in the U S.

It represented 27% of all campaigns.

Further actavis are more often including ESG related attacks in their campaigns ever.

Evercore is currently advising companies, representing approximately $1 five trillion in market value and activism defense.

Our restructuring practice is also better positioned now than ever before several years ago. Our business was almost exclusively debtor mandates at 90%, but as our firms creditor advisory practice has grown the overall mix has shifted to become a more balanced and diverse practice today in <unk>.

<unk> to credit assignments, we have a broad array of liability management engagements out of court restructuring and we increasingly work with our debt advisory team in private financing activity, even with a less than 1% default rate in 2021, our team was active and busy we've built a business that has proven it can perform.

In a varied market environment.

Further we have been able to increase our position in underwriting deals as we continue to add value and gain recognition from our issuer and institutional clients, notably we were a book runner on over 90% of all of our equity and equity linked underwriting transactions in 2021 and.

For the latest 12 month period for deals listed on U S exchanges, excluding bought deals and Atms, we remain focused on making our way towards the top 10 in equity new issue market share.

Outside of the <unk>. We also had great success in 2021 and are seeing the impact of our dedication to excellence in equities. We continued to focus intensely on highest quality research and client service. Our work was formally recognized by institutional investor with 43.

Individual analysts ranked over our.

Our highest mark ever we also added six new industry coverage sectors and increase the number of companies we cover by nearly 10% over 2020.

Finally and of utmost importance, let's talk about our clients.

Our focus on our clients corporate institutional and financial sponsor clients are the heart and soul of what drives our culture.

Over the past three years, approximately 30% to 45% of our advisory revenue has been sponsor related meaning we advised the sponsor our sponsor related company in 2021, we're at the top end of this range. Let me give you some additional background on this and also highlight the growth and potential ahead.

Early on we identified that the opportunity to serve financial sponsors extended well beyond just buying and selling portfolio companies in that effort. We were an early leader in establishing capabilities and expertise in SaaS growing areas of secondary investments GP Stakes capital raising and continuation fund initiatives.

These capabilities have deep deepened our connectivity with.

It was important and growing sponsor clients and will serve us well as we continue to focus on growing our market share and more traditional sponsor driven M&A assignments.

While our activity with sponsors is already very healthy we believe the opportunity ahead as fast given the depth of the relationships combined with a three four trillion in global private equity dry powder and the talent we've added to our team.

Turning to the future, let's review our roadmap for growth.

First we will fill in the areas of sector and geographic white space of which there is plenty to expand.

Some of our focus will be in the fastest growing segments of the economy. The <unk> Fintech Green Tech biotech and technology.

Next we will continue to invest in a plus talent, both externally and by focusing intensely on cultivating talent from within.

Through external hiring in 2021, we've continued to build our ECM debt advisory and sponsor focused capabilities.

Expanded our geographic reach in Spain, and broadened our sector reach to include Fintech.

In the fourth quarter, we announced three additional Smbs, Jonathan Kaufman, and Ted Michael who focus on power and renewables.

And then <unk>.

Who will bolster our industrials practice and basic materials and recently in the first months of 2022, we welcomed to Kashi in a way to further build our advisory footprint in Asia, and David <unk>, who will enhance our debt advisory practice.

In regards to our large class of internal promotes to senior managing director. They were selected not only for their talent and ability to serve clients and generate revenue.

But of equal importance each one is outstanding and what they do and embodies our core values, we look forward to their continuing an increasing impact to our firm.

Which will enhance our capabilities across M&A and capital advisory and equities. Furthermore, we continue to have meaningful conversations with potential recruits in areas of strategic significance.

And in addition to hiring at the most senior levels, we are adding talent at all levels to continue to meet the needs of our clients and to support the elevated pace of activity.

Before I turn the call over to <unk> to review, our financials I want to take a moment to comment on our ESG and sustainability efforts, we are proud to announce that as well.

<unk> interest to our employees and our communities.

This focus will include an emphasis on organizations that address diversity equity and inclusion we are committed to getting back to and having a positive lasting impact on our communities.

In which we live and work.

Our foundation will be important vehicle from which to execute on this commitment and it is part of our pledge.

To be more socially responsible as a firm.

In addition, we published.

Our inaugural sustainability report last spring and we look forward to providing more updates this coming spring and in subsequent years now let me turn the call over to <unk>. Thank you John .

For the fourth quarter of 2021, net revenues net income and EPS on a GAAP basis.

A record $1 $1.296 billion and $6.96 respectively for.

For the full year record net revenues net income EPS and EPS on a GAAP basis of $3 $3.740 billion and $17 eight respectively.

Comments from here, we will focus on non-GAAP metrics, which we believe are useful in evaluating our results.

Our standard GAAP reporting and a reconciliation of GAAP to adjusted results can be found in our press release, which is on our website.

Fourth quarter adjusted net revenues of $1 1 billion grew 16% year over year on a full year basis, adjusted net revenues of $3 3 million increased 43% compared to 2020.

Fourth quarter advisory revenues of $971 million or 23% year over year and were $2 8 billion for the full year, a 57% increase compared to 2020.

This represents our best quarter and best year ever and the first time adjusted net revenues surpassed $3 3 billion for the 12 months.

Our revenue includes approximately $21 million from transactions that closed in early January <unk> had other conditions pending up period and according with relevant accounting principles.

Along those lines, we recognized $93 million in the third quarter of 2021 and $32 million in the fourth quarter of 2020.

Fourth quarter underwriting fees of $65 million were down 32% compared to Q4 2020.

For the full year underwriting fees were $247 million down 11% year over year decrease for the year is attributed to the fact that we had two very significant <unk> in 2020 and in 2021, there is less activity in one of our largest sector.

Commissions and related revenue of $55 million in the fourth quarter were up 4% year over year.

For the full year commissions and related revenues related fees of $206 million were flat compared to 2020.

Lastly, fourth quarter asset management and administration fees of $22 million increased 8% year over year and full year asset management and administration fees of $79 million increased 17% compared to 2020.

Turning to expenses, our adjusted compensation ratio for the fourth quarter was 49, 7% and our full year comp ratio was 55, 7%.

Fourth quarter non compensation costs of $101 million were driven by higher travel and entertainment and then $10 million funding of the Evercore Foundation that John discussed earlier.

Full year non compensation cost of $330 million were up 4%.

Fourth quarter, adjusted operating income and adjusted net income of $464 million and $338 million increased 23% and 22% respectively.

Adjusted earnings per share of $7 15, Scott increased 26% versus the fourth quarter of 2020.

For the full year adjusted operating income and adjusted net income of $1 $1.843 billion.

78% and 83%, respectively, and adjusted earnings per share of $17 50 increased 82% versus the full year 2020.

We produced a quarterly adjusted operating margin of 41, 3% 251 basis points of margin expansion compared to the fourth quarter of 2020.

Our full year adjusted operating margin of 34% reflects 685 basis points of margin expansion compared to 2020.

As John mentioned, we remain committed to returning excess capital to our shareholders and returned a record $852 million to shareholders through dividends and repurchases of $5 5 million shares at an average price of $132 or three 3 million shares net of issuance for.

Share count for the fourth quarter declined compared to the fourth quarter of 2020, and $48 9 million to $47 3 million, principally reflecting our buyback program net of issuance, partially offset by the impact of the aforementioned treasury stock method.

As of December 31, our cash and investment Securities totaled $2 4 billion, our excess cash as a percentage of our total cash and investment securities within the low double digits up from the previous quarter. When the same number was in the single digits.

The increase is attributed to our strong fourth quarter operating results and particularly strong inflows at the end of the quarter.

In addition, we generally deploy excess cash on a one quarter lag.

That said, we did act aggressively to buyback our stock when the market sold off in November and December taking advantage of our robust cash position.

As a reminder, our cash generation and needs are dynamic and are heavily influenced by our business needs.

Expected compensation obligations and timing of capital return and resulted in a fluctuation from a relative excess cash position.

Turning to 2022 as you saw in the fourth quarter non comp expenses that were depressed by Covid are beginning to increase and while we still expect travel to long term remained below historical lever levels absent another significant COVID-19 interruption Genie and related expenses will likely be up in 2022.

Now as the firm grows we will also continue to see certain expenses increased like occupancy and equipment related depreciation and amortization.

Certain Kurt had tech related expenses, along with several other items increase.

And as you know most companies are facing inflationary increases including from vendors and suppliers. After only minimal increases in 2021 due to COVID-19 we.

We are very proud of what we achieved in 2021.

As we enter 2022, our pipelines are strong, but as always our visibility is limited to three to six months.

Our forward indicators, including risked and unrest backlogs engagement letters and conflict tax which are our most forward looking are all strong.

Before we open up the line for questions, Let me turn the call back over to John .

Yes.

Thank you Philip.

We feel very good about the future and believe that a strong underlying global economy, coupled with rapidly evolving technology and further growth in the financial sponsored sponsored community will continue to drive high activity levels in the market while <unk>.

Economic conditions today are strong we continue to monitor issues, which could impact activity levels, including equity market volatility inflation set actions interest rates the regulatory environment.

In credit availability as well as the competition for talent and of course pandemic relation issues.

Perform extremely well and the prospects for Evercore as long term growth of our exciting we.

We see a huge opportunity ahead of us to strengthen our franchise even further with that we're pleased to answer questions. Operator, Please open the lines.

Thank you we will now begin the question and answer session. As a reminder, if you have a question. Please press the star followed by the one key on your touch on policy.

If you would like to withdraw your question.

Keith.

If you are using speaker equipment, you may need to lift the handset before making a selection.

As limit your questions to two youre welcome to rejoin the queue for additional questions by implementing.

Our first question comes from Steven <unk> with Wolfe Research Your line is open.

Hi, good morning.

Good morning.

So last I was hoping to start off with a question actually on the expense outlook.

So our visibility is a bit more limited.

Good morning, Steve Nice to hear from you so I'm.

Non comps.

As I said wed.

We would expect G&A to normalize.

As the.

The world hopefully gets back to normal in the fourth quarter.

<unk>, our travel was around a third of what we saw sort of pre pandemic.

<unk> West.

Your increase in November and then.

Trailing off a bit.

But we would expect those to increase as people start to do business in ways they used to.

Then.

As the firm and our head count grows we will see the expense growth from occupancy and equipment. You saw some of that this year that will continue to increase next year.

Sorry in 2022, and then the costs associated with that and then.

As you know every time you hire a person you have tech related expenses like licenses and things like that so those will grow with our head count growth, which was about 9% last year.

And we will continue to have head count growth. This year at least based on where we are today.

And then as you mentioned the inflationary pressures so.

Obviously if things.

If the revenue environment isn't great. We'll do what we can to manage our expenses and we will be very careful with them. We have great cost controls in place of Bob implemented and we will continue to have those in place.

As it relates to comp that is much more related to revenue and the bulk of our comp is driven by our revenue performance. Our F&B are based on performance are paid based on their revenue performance and below SMB bonuses are paid based on firm performance as well as individual performance. So that's why.

We would have the most flex from an expense perspective, and obviously over the overwhelming percentage of our expenses for the firm.

Well, thanks for that perspective, the last well first off shame on me route.

Accomplished a great deal over these last 13 years I should have started with that so wishing you the best in the new role.

And maybe just for my follow up just a question for John .

Given the recent market volatility the market cap declines investors have indicated some growing aversion to companies with heavier capital markets gearing or just higher beta sensitivity.

Just that large in many of your primary businesses are certainly strongly correlated to equity market levels traditional M&A and ECM in particular I was hoping you could just speak to how is the market cap declines are impacting their willingness to transact for both sponsors and strategics and to what extent were the higher fee rates on transactions that we've been seeing.

Over the last couple of years, how much of that was a function of the recent bull market that may not be sustainable.

Steve when we look out and look at our backlog it continues to be strong and very diverse.

<unk> really across the board.

Hi, Beth accompanies low beta companies.

Financial sponsor portfolio companies.

We are really seeing those.

That diversity really be impactful in that as.

As we look at what we expect we just expect that there will be continuing momentum from this from this strong backlog.

We have I would say anecdotally the conversations that we're seeing and transactions that are coming in are quite full.

So we don't really see three to six months out any change as to what we're what we're really dealing with right now.

<unk> things could change in the market could turn down more dramatically there could be even more instability and of course, one of the things that we always look at when we're thinking about.

The merger businesses CEO confidence and the stability of the markets, which give gives companies the confidence to really be aspirational and strategic.

Right now, we don't see that impacting.

Where we are right now or our merger business, but we clearly are watching it carefully.

Great. Thanks for taking my questions and I'll hop back in the queue.

Our next question comes from Manan <unk> with Morgan Stanley . Your line is open.

Hi, good morning.

I was wondering.

How are you advising clients on the interest rate environment.

I know we've gone through this in the past, but we could have.

Four maybe five rate hikes, along with the fed shrinking its balance sheet the SCR.

What do you think that this means for the back half of the or is this.

Sort of pulling forward deal activity as companies try to get into while cheap financing is still widely available or do.

Do you think thats far hikes stockpile of zero is still not enough to impact deal activity provided the economy is pretty robust as it is right now.

Well I think we would say that because rates are so low right now four hikes clearly are nothing to discount.

We do believe that rates will still be relatively low historically there is no question, though the clients who need to do financings are really leaning on doing financings because they really understand that the rates will be going up.

Transactions, though as we're really dealing with clients are really still on tap to be moving forward and we don't see anybody desperately thinking that they have to get things done on having said that one of the things that we are seeing is that there is a very healthy.

Activity level of financial sponsors wanting to get deals done now obviously when they are buying.

The rates in which they borrow impact their returns, but also they believe that selling is.

<unk> advantaged by lower rates also so you see sponsor activity.

Very much focused on the rates and the levels, but I would say that as we really looked at our backlog and we looked at what we see ahead. We don't think that that is going to be impacted materially.

Although I would say that people everybody is aware everybody's watching both the rate hikes and inflation and I'd say that there is no question that boards and Ceos are focused.

Ralph do you want to comment on that.

Great. Thanks.

That's great color.

And then John I appreciate it.

Thoughts on mix.

Mid size deal activity.

The activist defense practice in the restructuring business in your opening comments.

Is there any color you can give us how much those businesses contributed to revenues over the last year or.

How we should think about them contributing to total revenues over the next couple of years.

We really can't give that kind of detail, but what I would say, we did say in the call that our sponsor business. It's.

<unk> of 45% of our revenues in.

In advisory and I would just say that the that these businesses are very healthy and they continue to have real upside potential.

Got it thanks for taking my questions and Ralph Congrats on another great January all the way back.

Thank you very much and.

John is going to continue the tradition.

Not giving.

Business line by business line revenues.

It's not that we don't want to be transparent that the lines between some of these are very blurred.

So it's really hard to give you the kind of granularity that you're asking for.

Okay fair enough.

I had a try but thank you.

Yeah.

So a new sheriff in town.

Yeah.

<unk>.

Yes.

Our next question comes from Jim Mitchell with Seaport Research Your line is open.

Hey, good morning.

Maybe we can speak to sort of intermediate and long term growth opportunities a little more detail you guys continue to put up strong growth.

But as Ralph pointed out the low multiple on your stock kind of implies the market doesn't believe this level of revenue can continue. So can you speak to that disconnect where you see the most growth from current levels over the intermediate long term what can be a counterweight if M&A slows down.

I think it's just key for shareholders to get a sense of.

You guys seem very optimistic about growth shareholders Don.

Sure Jim.

Our best in talking a little bit about our growth.

As we've articulated before we really think about growth in several different ways. One is that that we continue to invest in areas, where we see white space, whether those be geographic or whether there are sectors that we think are important sectors that we can invest in.

So for example sectors like Fintech biotech clean tech.

The relationships we have.

Buying and selling stakes.

For GP and LP raising funds or in addition, driving continuity funds, but then using those strong relationships really to the basic M&A side and that's a.

Very strong important investment area for us and we feel very good about that.

In addition, there is so much dry powder there that the more we invest there the more we're seeing that it's happening and we hired Brad Brad David.

Out in the West Coast already and we continue to look for opportunities to invest there in addition geographically.

We think there is a lot of opportunity in Europe , and we are looking closely at those opportunities whether those be in places like investing in France, or Germany, but we really feel like there's great white space there.

In addition.

Also we are looking at our capabilities one of the things you say as well.

Could you where could you see opportunities one of the things we've really invested in as we said is restructuring and even though the default rate is very very low right now our capabilities have grown there and we are doing more and more liability management, there and creating real value for clients and so that's a real stream.

That has developed over time and we feel really good about it. In addition, as we described we have we've always had.

That area is growing.

Have direct listings as a strength now.

And opportunity set we basically invested in.

In pipes and specs.

And we really see the opportunity to grow also through sectors. We always had a strong biotech business, but we're now able to really.

Really use all of our product set in the in those sectors and we are seeing that happen right now as I said a good example of that would be clean tech, where we hired Jonathan Kaufman and and Ted Michael.

We see really great broad diverse opportunity.

I would just add.

<unk>.

We're not number one in advisory revenues for a number for.

So we have.

Plenty of room to grow John identified a lot of white space and there definitely is that and if you look at our largest business the advisory business, which is.

Well over 80% of our revenues.

We have.

Our revenues in that business are driven by.

Multiplying the number of senior managing directors, we have by our industry leading.

Productivity and as John said in his opening remarks.

Through our internal promotes and new hires we have roughly 40 senior managing directors, who are still ramping up.

In their activity so.

With that and all of the white space that John identified.

It certainly feels to me that.

Our investors have consistently underestimated.

Our growth opportunities.

Good point.

By the way one of the things that you didn't ask but one of the questions.

That I think is an important one which is.

Well.

As history would point.

As rates go up.

<unk> do become more distressed.

For restructuring to really kick into full blast. It would mean there would be some distress in the system.

Okay, great. Thanks.

Our next question comes from Devin Ryan with JMP Securities. Your line is open.

Great.

Jon Ralph and so less Ralph Echo the comments best wishes.

Thank you.

At a high bar in the industry. So it's been a pleasure.

In terms of the.

I guess first question wanted maybe hone in a little bit more on kind of a banker productivity comments I mean, youre productivity has roughly doubled over the past five years.

<unk> kind of leading the industry by a number of metrics and I think when we take a step back it makes sense to evaluations have more than doubled over the past five years.

<unk> deals.

You have added more resources you per deal.

Sure. Thank you for the question Devin.

Transactions and therefore, we are able to go longer as the exclusive adviser in transactions and therefore take a larger sea.

Because we're adding more value through the whole life of the transaction.

I think what we what we really believe is that we have a number of capabilities that are just being built out now for example in equity capital markets.

We have a long way to go in terms of what we can do we've made tremendous progress, but we feel really good about the momentum of that business and I think we can really build out and leverage those capabilities and grow the volume that comes through ECM and as we add resources and we really begin to build out.

Our reach in terms of sectors, I think youre going to see that build.

In debt capital markets, we are continuing to build out that area and we continue to have real opportunity there to add value to clients and really b b.

<unk> be really helpful. In terms of both their day to day managing of their business, but also when they are in transactions.

In activism, one of the key things that Youll see is that activism and activism defense has really been a tremendous marketing.

A marketing vehicle for us and we've been able to really expand relationships and drive even further capabilities into those relationships by using the activism defense.

Group, which has really given us access to many many more clients. So.

<unk> I think R. R.

Or are <unk>.

Rodak Tivoli ratios can continue at these high levels now to say that we could double them from here I think is quite a stretch I think that clearly that would be something that would be hard to do but I think we really have upside here and I think that we as we add more.

Capable people in our white spaces.

We will continue to have real possibilities in terms of growing that in addition, if you look at the financial sponsor business as you know the financial sponsor business has tremendous upside theres, just so much dry powder and there are so many portfolio companies and the activity levels of financial sponsors are extremely high so as we continue to add resources and make moment.

Get momentum there and make inroads I think youll see that that will also be a very large contributor to really what we're able to do in bringing in revenue.

Devin My perspective on this is really if you look at the productivity growth which has been.

I think has exceeded all of our.

Expectations.

There are a number of secular factors.

John hit on the.

The fact that we're doing.

That we have so much broader capabilities and we're doing more with clients.

<unk> is important in two respects number one it allows us.

To get additional fee opportunities on the same transactions and very importantly, it allows us to be the sole adviser or the lead adviser and therefore to capture.

All or the majority of the fees on a transaction thats a secular trend that I think continues the second is.

As our brand.

The brand of Evercore today versus five years is just stronger.

And what that means is that the same SMB is going to get in any given year, a few more at bats, and batting average is going to be a little bit higher.

Just because of the brand of the firms. So those two things are secular trends, which we see.

Continuing what we can't predict is the cyclical element of it and obviously last year was a record year in M&A activity the only year that.

There was <unk> five trillion.

More than five trillion of announced activity and Thats certainly also contributed to productivity.

Productivity.

Last year, so the secular trends definitely continue.

Then, there's the cyclical overlay, which we can't predict.

Okay.

I appreciate all that color I'm going to squeeze one more quick one in for <unk>, just coming back to.

Compensation the comp ratio.

Obviously, some nice operating leverage there this quarter is really a year or 242% revenue increased 35% comp.

Yes.

How much.

Deferrals teen percentage change, obviously coming off of a huge revenue years.

It wont be thoughtful about kind of what that sets up for future years. So I'm curious if you guys manage deferrals.

What that percentage.

A relative basis to prior years.

Yes.

We generally try to really balance.

Recognizing.

<unk> expense in current year, when we know our revenue with retention.

And given the strong revenue environment, we try to recognize.

AI is much expenses made possible trying to balance those two things. So we do think about that and the various environments.

Got it okay. That's all I needed. Thank you.

And our next question comes from Richard Ramsden with Goldman Sachs. Your line is open.

So good morning, everyone, Ralph just to add to the chorus.

All the best for the next chapter in your life I really hope, it's as successful as the last one.

So my question is around the environment for large cap M&A in the U S and it does seem at least anecdotally that a growing number of transactions across a broad number of sectors are getting flagged for competition review can you just talk a little bit about the impact you think that's having on the willingness for corporate boards.

To transact.

Is it something that's coming up more in discussions and do you think it could lead to a slowdown in activity.

Sure Richard Thank you for the question and I'll answer it and I think I'm sure Ralph will want to say something about this also.

But it's clearly been around for some time.

Basically companies are looking at growth and some of the very large cap deals could be focused on and we're very focused on those.

On that as something that could put a dampener on those.

I would say right now as we look at the transactions in the boardrooms and the ones that I'm having also.

I would say people are looking at this certainly with <unk>.

Toward what could happen, but I think the transactions are still being developed and thought about.

It would.

Depending on how it plays out.

It could have some impact clearly the law would have to change for it to have a major impact and that hasnt happened, yet, but I think we're all watching it.

One of the things you are seeing though is that in things like sponsors.

That the competition element is not a big issue.

So <unk> to buying and selling companies so that a sector alone.

He is not going to be impacted at all in fact, it may be strengthened by the <unk>.

The fact that there's just a lot of opportunity out there to really by itself. So.

So I think as we look at it number one.

We clearly know that its something to be focused on and we're focused on it and boards I think are talking about it I think that there is still a need to drive growth.

They're actually being developed and they're being thought about very aggressively.

It remains to be seen how much it'll it'll dilute the atmosphere and whether the deals will be put put on hold.

But right now as we look out three to six months, we don't see a major.

Overlay in terms of the dampening.

I think John hit it.

Definitely discussed.

But it has really not had.

On many if any.

Transactions that we've.

<unk> been involved with.

And I think.

That John made about.

To really have a sea change in antitrust.

<unk> you need law change.

And there's no talk of that.

At this point.

In time so.

It's definitely something to be monitored but.

Certainly has not yet had.

In effect on all of the indicators that we look at our forward activity.

Okay, Great and then.

As a follow up can you just talk a little bit about geographic skews that are emerging in the business.

John I think you said on the last call that you have seen a pickup in your European activity in particular, how is that.

<unk> or some of the geopolitical uncertainty and concerns around the elections in say, France impacted pipelines in Europe .

Well, our European business has done well.

Well and we see that having real momentum and so as I look at it from our lens.

We are very really optimistic because we really see that those dialogues and the transactions being developed and coming out of Europe are.

Quite strong and so.

As we look at it and as we experience it.

We are really finding it to be.

Quite a powerful vehicle.

Going forward, having said that.

Our U S business is larger than our European business as you know.

And so.

Going to watch carefully, but we really feel like it's a real growth area for us and we see momentum in that business and so from our perspective we.

Think those patterns continue.

Okay. Thanks, Thanks, a lot for taking my questions.

We have reached then there'd be a lot of time I would now like to turn the floor to John Weinberg.

And last question for any closing comments.

Thank you operator.

Thank you all for joining us today.

We are obviously around if you have other questions you can call us.

Sure.

Ralph Thank you for everything.

Thank you and Richard I look forward to interviewing next you next year.

Goldman Sachs financial institutions.

Thank you all.

This concludes today's Evercore first quarter and full year 2021 financial results Conference call. You May now disconnect everyone have a great day.

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