MOELIS & CO, 10-Q filed on 4/29/2021
Quarterly Report
v3.21.1
Document and Entity Information - shares
 3 Months Ended
Mar. 31, 2021
Apr. 15, 2021
Entity Registrant Name Moelis & Co  
Entity Central Index Key 0001596967  
Document Type 10-Q  
Document Period End Date Mar. 31, 2021  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Interactive Data Current Yes  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q1  
Trading Symbol MC  
Entity File Number 001-36418  
Entity Tax Identification Number 46-4500216  
Entity Address, Address Line One 399 Park Avenue  
Entity Address, Address Line Two 5th Floor  
Entity Address, City or Town New York  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10022  
City Area Code 212  
Local Phone Number 883-3800  
Title of 12(b) Security Class A Common Stock  
Security Exchange Name NYSE  
Entity Incorporation, State or Country Code DE  
Document Quarterly Report true  
Document Transition Report false  
Class A Common Stock    
Entity Common Stock, Shares Outstanding   61,325,544
Class B Common Stock    
Entity Common Stock, Shares Outstanding   4,899,457
v3.21.1
Condensed Consolidated Statements of Financial Condition - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Assets    
Cash and cash equivalents $ 155,402 $ 202,477
Restricted cash 1,081 807
Receivables:    
Accounts receivable, net of allowance for credit losses of $6,183 and $3,775 as of March 31, 2021 and December 31, 2020, respectively 71,824 89,297
Accrued and other receivables 45,427 11,916
Total receivables 117,251 101,213
Deferred compensation 15,676 12,004
Investments 118,427 211,826
Right-of-use assets 171,857 177,069
Equipment and leasehold improvements, net 52,067 49,977
Deferred tax assets 423,281 424,345
Prepaid expenses and other assets 16,055 16,726
Total assets 1,071,097 1,196,444
Liabilities and Equity    
Compensation payable 59,889 220,058
Accounts payable, accrued expenses and other liabilities 24,583 25,026
Amount due pursuant to tax receivable agreement 324,064 307,581
Deferred revenue 8,105 2,692
Lease liabilities 193,876 196,614
Total liabilities 610,517 751,971
Commitments and Contingencies (See Note 11)
Treasury stock, at cost; 5,323,017 and 3,959,083 shares as of March 31, 2021 and December 31, 2020, respectively (226,381) (152,170)
Additional paid-in-capital 1,101,205 1,052,322
Retained earnings (accumulated deficit) (393,166) (420,682)
Accumulated other comprehensive income (loss) (856) (201)
Total Moelis & Company equity 481,517 479,948
Noncontrolling interests (20,937) (35,475)
Total equity 460,580 444,473
Total liabilities and equity 1,071,097 1,196,444
Class A Common Stock    
Liabilities and Equity    
Common stock, par value $0.01 per share 666 620
Total equity 666 620
Class B Common Stock    
Liabilities and Equity    
Common stock, par value $0.01 per share 49 59
Total equity $ 49 $ 59
v3.21.1
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Accounts receivable, allowance for credit losses $ 6,183 $ 3,775
Treasury stock, shares 5,323,017 3,959,083
Class A Common Stock    
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 1,000,000,000 1,000,000,000
Common stock, shares issued 66,648,561 61,986,927
Common stock, shares outstanding 61,325,544 58,027,844
Treasury stock, shares 5,323,017 3,959,083
Class B Common Stock    
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 1,000,000,000 1,000,000,000
Common stock, shares issued 4,899,457 5,948,750
Common stock, shares outstanding 4,899,457 5,948,750
v3.21.1
Condensed Consolidated Statements of Operations - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Revenues $ 263,866 $ 153,706
Expenses    
Compensation and benefits 156,499 95,120
Occupancy 7,695 7,231
Professional fees 5,999 4,236
Communication, technology and information services 8,659 8,392
Travel and related expenses 1,610 7,944
Depreciation and amortization 1,449 1,199
Other expenses 9,512 5,142
Total expenses 191,423 129,264
Operating income (loss) 72,443 24,442
Other income and (expenses) 3,179 (1,660)
Income (loss) before income taxes 75,622 22,782
Provision (benefit) for income taxes (176) (7,344)
Net income (loss) 75,798 30,126
Net income (loss) attributable to noncontrolling interests 9,269 4,996
Net income (loss) attributable to Moelis & Company 66,529 25,130
Class A Common Stock    
Expenses    
Net income (loss) attributable to Moelis & Company $ 66,529 $ 25,130
Weighted-average shares of Class A common stock outstanding    
Basic (in shares) 60,932,966 52,666,457
Diluted (in shares) 66,360,217 57,092,982
Net income (loss) per share attributable to holders of shares of Class A common stock    
Basic (in dollars per share) $ 1.09 $ 0.48
Diluted (in dollars per share) $ 1.00 $ 0.44
v3.21.1
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Statement Of Income And Comprehensive Income [Abstract]    
Net income (loss) $ 75,798 $ 30,126
Foreign currency translation adjustment, net of tax (744) (1,630)
Other comprehensive income (loss) (744) (1,630)
Comprehensive income (loss) 75,054 28,496
Less: Comprehensive income (loss) attributable to noncontrolling interests 9,180 4,670
Comprehensive income (loss) attributable to Moelis & Company $ 65,874 $ 23,826
v3.21.1
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Cash flows from operating activities    
Net income (loss) $ 75,798 $ 30,126
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Bad debt expense 3,149 518
Depreciation and amortization 1,449 1,199
Equity-based compensation 50,963 38,255
Deferred tax provision 21,245 (6,723)
Other (2,615) 2,099
Changes in assets and liabilities:    
Accounts receivable 14,401 5,565
Accrued and other receivables (32,589) (1,899)
Prepaid expenses and other assets (587) 117
Deferred compensation (3,660) (4,925)
Compensation payable (160,178) (150,260)
Accounts payable, accrued expenses and other liabilities 1,969 9,454
Deferred revenue 5,409 1,439
Dividends received 2,279 1,942
Net cash provided by (used in) operating activities (22,967) (73,093)
Cash flows from investing activities    
Purchase of investments (78,723) (28,152)
Proceeds from sales of investments 173,046 181,249
Note payments received from employees 70  
Purchase of equipment and leasehold improvements (3,539) (13,139)
Net cash provided by (used in) investing activities 90,854 139,958
Cash flows from financing activities    
Dividends and distributions (39,685) (88,689)
Proceeds from exercise of stock options   11,819
Treasury stock purchases (74,211) (31,636)
Net cash provided by (used in) financing activities (113,896) (108,506)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash (792) (2,176)
Net increase (decrease) in cash, cash equivalents, and restricted cash (46,801) (43,817)
Cash, cash equivalents, and restricted cash, beginning of period 203,284 168,572
Cash, cash equivalents, and restricted cash, end of period 156,483 124,755
Cash paid during the period for:    
Income taxes 1,913 1,560
Other non-cash activity    
Cumulative effect adjustment upon adoption of ASU 2016-13   364
Dividend equivalents issued 5,131 12,125
Class A Partnership Units or other equity converted into Class A Common Stock 3,903 786
Forfeiture of fully-vested Group LP units or other equity units $ 25 $ 96
v3.21.1
Condensed Consolidated Statements of Changes in Equity - USD ($)
$ in Thousands
Total
Cumulative Effect Adjustment Upon Adoption
As Adjusted
Class A Common Stock
Class A Common Stock
As Adjusted
Class B Common Stock
Class B Common Stock
As Adjusted
Treasury Stock
Treasury Stock
As Adjusted
Additional Paid-In Capital
Additional Paid-In Capital
As Adjusted
Retained Earnings (Accumulated Deficit)
Retained Earnings (Accumulated Deficit)
Cumulative Effect Adjustment Upon Adoption
Retained Earnings (Accumulated Deficit)
As Adjusted
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
As Adjusted
Noncontrolling Interests
Noncontrolling Interests
As Adjusted
Balance at beginning of the period at Dec. 31, 2019 $ 393,827 $ (364) $ 393,463 $ 528 $ 528 $ 104 $ 104 $ (107,836) $ (107,836) $ 872,791 $ 872,791 $ (324,192) $ (364) $ (324,556) $ 1,432 $ 1,432 $ (49,000) $ (49,000)
Balance at beginning of the period (in shares) at Dec. 31, 2019       52,773,617 52,773,617 10,397,915 10,397,915 (2,757,558) (2,757,558)                  
Changes in Equity                                    
Accounting Standards Update [Extensible List]   ASU 2016-13                     ASU 2016-13          
Net income (loss) 30,126                     25,130         4,996  
Equity-based compensation 38,255     $ 36           38,189             30  
Equity-based compensation (in shares)       3,581,294                            
Other comprehensive income (loss) (1,630)                           (1,304)   (326)  
Dividends declared tax distributions (88,689)                 12,125   (79,391)         (21,423)  
Treasury Stock Purchases $ (31,636)             $ (31,636)                    
Treasury stock purchases (in shares) (869,779)             (869,779)                    
Exercise of Stock options $ 11,819     $ 7           11,812                
Exercise of stock options (in shares)       721,484                            
Equity-based payments to non-employees 158                 158                
Other 690                 (1,981)             2,671  
Balance at end of the period at Mar. 31, 2020 352,556     $ 571   $ 104   $ (139,472)   933,094   (378,817)     128   (63,052)  
Balance at end of the period (in shares) at Mar. 31, 2020       57,076,395   10,397,915   (3,627,337)                    
Balance at beginning of the period at Dec. 31, 2020 444,473     $ 620   $ 59   $ (152,170)   1,052,322   (420,682)     (201)   (35,475)  
Balance at beginning of the period (in shares) at Dec. 31, 2020       61,986,927   5,948,750   (3,959,083)                    
Changes in Equity                                    
Net income (loss) 75,798                     66,529         9,269  
Equity-based compensation 50,963     $ 36           41,508             9,419  
Equity-based compensation (in shares)       3,612,341                            
Other comprehensive income (loss) (744)                           (655)   (89)  
Dividends declared tax distributions (39,685)                 5,131   (39,013)         (5,803)  
Treasury Stock Purchases $ (74,211)             $ (74,211)                    
Treasury stock purchases (in shares) (1,363,934)             (1,363,934)                    
Equity-based payments to non-employees $ 108                 108                
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges 3,903     $ 10   $ (10)       2,161             1,742  
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges (in shares)       1,049,293   (1,049,293)                        
Other (25)                 (25)                
Balance at end of the period at Mar. 31, 2021 $ 460,580     $ 666   $ 49   $ (226,381)   $ 1,101,205   $ (393,166)     $ (856)   $ (20,937)  
Balance at end of the period (in shares) at Mar. 31, 2021       66,648,561   4,899,457   (5,323,017)                    
v3.21.1
Condensed Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Class A Common Stock    
Dividends declared per share of Class A common stock $ 0.55 $ 1.26
v3.21.1
Organization and Basis of Presentation
 3 Months Ended
Mar. 31, 2021
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Organization and Basis of Presentation

1. ORGANIZATION AND BASIS OF PRESENTATION

Moelis & Company and its consolidated subsidiaries (the “Company,” “we,” “our,” or “us”) is a leading global investment bank, incorporated in Delaware. Prior to the Company’s Initial Public Offering (“IPO”), the business operated as a Delaware limited partnership that commenced operations during 2007. Following the IPO, the operations are owned by Moelis & Company Group LP (“Group LP”), a U.S. Delaware limited partnership, and Group LP is controlled by Moelis & Company. Moelis & Company’s shareholders are entitled to receive a portion of Group LP’s economics through their direct ownership interests in shares of Class A common stock of Moelis & Company. The noncontrolling interest owners of Group LP (not Moelis & Company) receive economics of the operations primarily through their ownership interests in Group LP partnership units.

The Company’s activities as an investment banking advisory firm constitute a single business segment offering clients, including corporations, governments and financial sponsors, a range of advisory services with expertise across all major industries in mergers and acquisitions, recapitalizations and restructurings and other corporate finance matters.

Basis of Presentation —The condensed consolidated financial statements of Moelis & Company include its partnership interests in Group LP, its equity interest in the sole general partner of Group LP, Moelis & Company Group GP LLC (“Group GP”), and its interests in its subsidiaries. Moelis & Company will operate and control all of the business and affairs of Group LP and its operating entity subsidiaries indirectly through its equity interest in Group GP. The Company operates through the following subsidiaries:

 

•

Moelis & Company LLC (“Moelis U.S.”), a Delaware limited liability company, a registered broker-dealer with the U.S. Securities and Exchange Commission (“SEC”) and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”).

 

•

Moelis & Company Israel Ltd., a limited company incorporated in Israel.

 

 

•

Moelis & Company International Holdings LLC (“Moelis International”), a Delaware limited liability company, owns the following entities and investments, directly or indirectly:

 

 

•

Moelis & Company UK LLP (“Moelis UK”), a limited liability partnership registered under the laws of England and Wales. In addition to the United Kingdom, Moelis UK maintains operations through the following branches:

 

 

•

Moelis & Company Europe Limited, Frankfurt am Main Branch (German branch)

 

 

•

Moelis & Company UK LLP, DIFC Branch (Dubai branch)

 

 

•

Moelis & Company Asia Limited (“Moelis Asia”), a limited company incorporated in Hong Kong licensed under the Hong Kong Securities and Futures Ordinance to provide financial advisory services. In addition to Hong Kong, Moelis Asia maintains operations in Beijing, China through a wholly-owned Chinese subsidiary, Moelis & Company Consulting (Beijing) Company Limited.

 

 

•

Moelis & Company Netherlands BV, a private limited company incorporated in Amsterdam, Netherlands. In addition to Amsterdam, Moelis Netherlands maintains operations in Paris, France through a wholly owned subsidiary, Moelis & Company Netherlands B.V. French Branch

 

 

•

Moelis & Company India Private Limited, a private limited company incorporated in Mumbai, India.

 

 

•

Moelis & Company Assessoria Financeira Ltda. (“Moelis Brazil”), a limited liability company incorporated in São Paulo, Brazil.

 

 

•

An equity method investment in Moelis Australia Limited (“Moelis Australia”), a public company listed on the Australian Securities Exchange

 
v3.21.1
Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2021
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting —The Company prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). As permitted by the interim reporting rules and regulations set forth by the SEC, the condensed consolidated financial statements presented exclude certain financial information and footnote disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to fairly present the accompanying unaudited condensed consolidated financial statements. These unaudited condensed

consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020.

Consolidation —The Company’s policy is to consolidate (i) entities in which it has a controlling financial interest, (ii) variable interest entities where the Company has a variable interest and is deemed to be the primary beneficiary and (iii) limited partnerships where the Company has ownership of the majority of voting interests. When the Company does not have a controlling interest in an entity, but exerts significant influence over the entity’s operating and financial decisions, the Company applies the equity method of accounting in which it records in earnings its share of income or losses of the entity. All intercompany balances and transactions with the Company’s subsidiaries have been eliminated in consolidation.

Use of Estimates —The preparation of condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period in which they are determined to be necessary.

In preparing the condensed consolidated financial statements, management makes estimates and assumptions regarding:

 

•

the adequacy of the allowance for credit losses;

 

•

the assessment of whether revenues from variable consideration should be constrained due to the probability of a significant revenue reversal;

 

•

the assessment of probable lease terms and the measurement of the present value of such obligations;

 

 

•

the measurement and realization of deferred taxes;

 

 

•

the measurement of amount due pursuant to tax receivable agreement; and

 

 

•

other matters that affect the reported amounts and disclosures of contingencies in the financial statements.

 

Cash, Cash Equivalents and Restricted Cash —Cash and cash equivalents include all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase.

The Company’s cash is maintained in U.S. and non-U.S. bank accounts, of which most bank account balances had little or no insurance coverage (most balances are held in U.S. and U.K. accounts which exceeded the U.S. Federal Deposit Insurance Corporation and U.K. Financial Services Compensation Scheme coverage limits). The Company’s cash equivalents are invested primarily in U.S. Treasury instruments and money market securities.

The Company’s restricted cash is comprised of collateral deposits primarily held by certain non-U.S. subsidiaries. These deposits are required for certain direct debit accounts and are also used to satisfy future medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of March 31, 2021 and 2020, is presented below.

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

Cash

 

$

 

97,899

 

 

$

 

38,975

 

Cash equivalents

 

 

 

57,503

 

 

 

 

85,183

 

Restricted cash

 

 

 

1,081

 

 

 

 

597

 

Total cash, cash equivalents, and restricted cash shown in the statement of cash flows

 

$

 

156,483

 

 

$

 

124,755

 

 

Additionally, as of December 31, 2020, the Company held cash of $83,472 and cash equivalents of $119,005.

Receivables —The accompanying condensed consolidated statements of financial condition present accounts receivable balances net of allowance for credit losses based on the Company’s assessment of the collectability of customer accounts.

Included in the accounts receivable balances at March 31, 2021 and December 31, 2020 were $21,774 and $19,603 of long term receivables related to private funds advisory capital raising engagements, which are generally paid in installments over a period of three to four years. These long term receivables generated interest income of $204 and $188 for the three months ended March 31, 2021 and 2020, respectively.

The Company maintains an allowance for credit losses that, in management’s opinion, provides for an adequate reserve to cover losses that may be incurred. For purposes of determining appropriate allowances, the Company stratifies its population of accounts receivable into two categories, one for short-term receivables and a second for private funds advisory receivables. Each population is separately evaluated using an aging method that results in a percentage reserve based on the age of the receivable, in addition to considerations of historical charge-offs and current economic conditions.

After concluding that a reserved accounts receivable is no longer collectible, the Company will charge-off the receivable. This has the effect of reducing both the gross receivable and the allowance for credit losses. If a reserved accounts receivable is subsequently collected, such recoveries reduce the gross receivable and the allowance for credit losses and is a reduction of bad debt expense, which is recorded within other expenses on the condensed consolidated statement of operations. The combination of recoveries and the provision for credit losses of a reported period comprise the Company’s bad debt expense.

On January 1, 2020, the Company adopted Accounting Standards Update No. 2016-13— “Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13") using the modified retrospective method. Upon adoption, a cumulative adjustment was recorded which decreased retained earnings by $459. The tax effect of this adjustment increased retained earnings by $95, resulting in a net decrease of $364 as of January 1, 2020. ASU 2016-13 replaces the incurred loss impairment methodology for financial instruments with the current expected credit loss (CECL) model which requires estimates of future credit losses based on reasonable supporting information. The Company will recognize its expected credit losses for each reporting period going forward.

The following tables summarize credit loss allowance activity for the three months ended March 31, 2021 and March 31, 2020:

 

 

 

Three Months Ended March 31, 2021

 

 

 

Accounts Receivable

 

 

 

 

Short-term Receivables

 

 

 

Private Funds Advisory Receivables

 

 

 

Total

 

Allowance for Credit Losses, beginning balance

 

$

 

3,577

 

 

$

 

198

 

 

$

 

3,775

 

Charge-offs

 

 

 

(741

)

 

 

 

—

 

 

 

 

(741

)

Recoveries

 

 

 

(1,126

)

 

 

 

—

 

 

 

 

(1,126

)

Reduction to allowance

 

 

 

(1,867

)

 

 

 

—

 

 

 

 

(1,867

)

Provision for credit losses

 

 

 

4,253

 

 

 

 

22

 

 

 

 

4,275

 

Allowance for credit losses, ending balance

 

$

 

5,963

 

 

$

 

220

 

 

$

 

6,183

 

 

 

 

Three Months Ended March 31, 2020

 

 

 

Accounts Receivable

 

 

 

 

Short-term Receivables

 

 

 

Private Funds Advisory Receivables

 

 

 

Total

 

Allowance for Credit Losses, beginning balance

 

$

 

4,088

 

 

$

 

—

 

 

$

 

4,088

 

Adjustment for adoption of ASU 2016-13

 

 

 

260

 

 

 

 

199

 

 

 

 

459

 

Allowance for Credit Losses, adjusted beginning balance

 

 

 

4,348

 

 

 

 

199

 

 

 

 

4,547

 

Charge-offs

 

 

 

(1,289

)

 

 

 

—

 

 

 

 

(1,289

)

Recoveries

 

 

 

(724

)

 

 

 

(26

)

 

 

 

(750

)

Reduction to allowance

 

 

 

(2,013

)

 

 

 

(26

)

 

 

 

(2,039

)

Provision for credit losses

 

 

 

1,216

 

 

 

 

52

 

 

 

 

1,268

 

Allowance for credit losses, ending balance

 

$

 

3,551

 

 

$

 

225

 

 

$

 

3,776

 

Deferred Compensation —Deferred compensation costs represent arrangements with certain employees whereby cash payments are subject to a required period of service subsequent to payment by the Company. These amounts are charged to expenses over the period that the employee is required to provide services in order to vest in the payment.

Financial Instruments at Fair Value —Fair value is generally based on quoted prices, however if quoted market prices are not available, fair value is determined based on other relevant factors, including dealer price quotations, price activity for equivalent instruments and valuation pricing models. The Company established a fair value hierarchy which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of instrument, the characteristics specific to the instrument and the state of the marketplace (including the existence and transparency of transactions between market participants). Financial instruments with readily-available actively quoted prices or for which fair value can be measured from actively-quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories (from highest to lowest level of observability) based on inputs:

Level 1 —Quoted prices (unadjusted) are available in active markets for identical instruments that the Company has the ability to access as of the reporting date. The Company, to the extent that it holds such instruments, does not adjust the quoted price for these instruments, even in situations in which the Company holds a large position and a sale could reasonably affect the quoted price.

Level 2 —Pricing inputs are observable for the instruments, either directly or indirectly, as of the reporting date, but are not the same as those used in Level 1. Fair value is determined through the use of models or other valuation methodologies.

Level 3 —Pricing inputs are unobservable for the instruments and include situations where there is little, if any, market activity for the investments. The inputs into the determination of fair value require significant judgment or estimation by the Company’s management.

For level 3 investments in which pricing inputs are unobservable and limited market activity exists, management’s determination of fair value is based on the best information available, may incorporate management’s own assumptions and involves a significant degree of judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the instrument.

Equity Method Investments —The Company accounts for its equity method investments under the equity method of accounting as the Company does not control these entities but has the ability to exercise significant influence. The amounts recorded in investments on the condensed consolidated statements of financial condition reflect the Company’s share of contributions made to, distributions received from, and the equity earnings and losses of, the investments. The Company reflects its share of gains and losses of the investment in other income and expenses in the condensed consolidated statements of operations using the most recently available earnings data at the end of the period.

Leases — The Company maintains operating leases for corporate offices and an aircraft. The Company determines if a contract contains a lease at inception. Operating leases are recorded as right-of-use (“ROU”) assets and lease liabilities on the condensed consolidated statements of financial condition. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease liabilities are recognized at the lease commencement date and are measured at the present value of anticipated lease payments over the lease term. The operating lease ROU assets are equal to the lease liabilities, adjusted for certain lease incentives, accrued rents, and prepaid rents. Typically, our borrowing rate is used to determine the present value of lease payments because the implicit rate is not readily determinable. Our lease terms may include options to extend or terminate the lease. These options are factored into our present value calculations when it is reasonably certain that such options will be exercised. Operating lease expense is recognized on a straight-line basis over the lease term.

Software— Costs related to implementation of cloud computing arrangements that qualify for capitalization are stated at cost less accumulated amortization within prepaid and other assets on the Company’s condensed consolidated statement of financial condition. Such capitalized costs are amortized using the straight-line method over the term of the cloud computing service contract or another rational basis, beginning when the cloud computing arrangement is substantially complete and ready for its intended use. All costs not directly related to the implementation of cloud computing arrangements, including overhead costs and costs of service agreements, will be expensed in the period they are incurred. The amortization expense of such capitalized costs will be presented under communication, technology and information services on the condensed consolidated statement of operations.

Effective January 1, 2020, the Company adopted ASU 2018-15, “Goodwill and Other —Internal Use Software” using a prospective approach (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in cloud computing arrangements with the requirements for capitalizing costs to develop or obtain internal-use software. See Note 4—Fixed and Intangible Assets below for further details on the Company’s capitalized cloud computing arrangements.

Equipment and Leasehold Improvements —Office equipment and furniture and fixtures are stated at cost less accumulated depreciation, which is determined using the straight-line method over the estimated useful lives of the assets, ranging from three to seven years, respectively. Leasehold improvements are stated at cost less accumulated amortization, which is determined using the straight-line method over the lesser of the term of the lease or the estimated useful life of the asset.

Major renewals and improvements are capitalized and minor replacements, maintenance and repairs are charged to expenses as incurred. Assets that are in development and have not yet been placed in service are generally classified as “Construction in Progress” and are reclassified to the appropriate category when the associated assets are placed in service. Upon retirement or disposal of assets, the cost and related accumulated depreciation or amortization are removed from the condensed consolidated statements of financial condition and any gain or loss is reflected in the condensed consolidated statements of operations.

Deferred Tax Asset and Amount Due Pursuant to Tax Receivable Agreement —In conjunction with the IPO, the Company was  treated for U.S. federal income tax purposes as having directly purchased Class A partnership units in Group LP from the existing unitholders. Additional Group LP Class A partnership units may be exchanged for shares of Class A common stock in the Company. The initial purchase and future exchanges are expected to result in an increase in the tax basis of Group LP’s assets attributable to the Company’s interest in Group LP. These increases in the tax basis of Group LP’s assets attributable to the Company’s interest in Group LP would not have been available but for the initial purchase and future exchanges. Such increases in tax basis are likely to increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of income tax the Company would otherwise be required to pay in the future. As a result, the Company records a deferred tax asset for such increase in tax basis.

The Company has entered into a tax receivable agreement with its eligible Managing Directors that will provide for the payment by the Company to its eligible Managing Directors of 85% of the amount of cash savings, if any, in U.S. federal, state, and local income tax or franchise tax that the Company actually realizes as a result of (a) the increases in tax basis attributable to exchanges by its eligible Managing Directors and (b) tax benefits related to imputed interest deemed to be paid by the Company as a result of this tax receivable agreement. The Company expects to benefit from the remaining 15% of cash savings, if any, in income tax that it realizes and record any such estimated tax benefits as an increase to additional paid-in-capital. For purposes of the tax receivable agreement, cash savings in income tax will be computed by comparing the Company’s actual income tax liability to the amount of such taxes that it would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Group LP as a result of the exchanges and had it not entered into the tax receivable agreement. The term of the tax receivable agreement commenced upon consummation of the IPO and will continue until all such tax benefits have been utilized or expired, unless the Company exercises its right to terminate the tax receivable agreement for an amount based on an agreed value of payments remaining to be made under the agreement. The Company has recorded the estimated tax benefits related to the increase in tax basis and imputed interest as a result of the initial purchase and subsequent exchanges described above as a deferred tax asset in the condensed consolidated statements of financial condition. The amount due to its eligible Managing Directors related to the tax receivable agreement as a result of the initial purchase and subsequent exchanges described above is recorded as amount due pursuant to tax receivable agreement in the condensed consolidated statements of financial condition. The amounts recorded for the deferred tax asset and the liability for our obligations under the tax receivable agreement are estimates. Any adjustments to our estimates subsequent to their initial establishment will be included in net income (loss). Future exchanges of Class A partnership units in Group LP for Class A common shares in the Company will be accounted for in a similar manner.

Revenue and Expense Recognition—We earn substantially all of our revenues from advisory engagements and, in many cases, we are not paid until the completion of an underlying transaction. The Company recognizes revenues from providing advisory services when or as our obligations are fulfilled and collection is reasonably assured. The vast majority of our advisory revenues, which include reimbursements for certain out-of-pocket expenses, are recognized over time; however, a small number of transactions may be recognized at a point in time. We provide our advisory service on an ongoing basis which, for example, may include evaluating and selecting one of multiple strategies. During such engagements, our clients are continuously benefitting from our counsel and the over time recognition matches the transfer of such benefits. However, the recognition of transaction fees is constrained until substantially all services have been provided, specified conditions have been met and it is probable that a significant reversal of revenue will not occur in a future period. Upfront fees and retainers specified in our engagement letters that meet the over time criteria will be recognized on a systematic basis over the estimated period where the related services are performed. Revenues may be recognized at a point in time if the engagement represents a singular objective that does not transfer any notable value until formally completed, such as when issuing a fairness opinion. In these instances, the point in time recognition appropriately matches the transfer and consumption of our services.

Incremental costs of obtaining a contract are expensed as incurred since such costs are generally not recoverable and the typical duration of our advisory contracts is less than one year. Costs to fulfill contracts consist of out-of-pocket expenses that are part of performing our advisory services and are typically expensed as incurred, except where the transfer and consumption of our services occurs at a point in time. For engagements recognized at a point in time, out-of-pocket expenses are capitalized and subsequently expensed in the condensed consolidated statement of operations upon completion of the engagement. The Company records deferred revenues when it receives fees from clients that have not yet been earned (e.g. an upfront fee) or when the Company has an unconditional right to consideration before all performance obligations are complete (e.g. upon satisfying conditions to earn an announcement fee, but before the transaction is consummated).

Complications that may terminate or delay a transaction include failure to agree upon final terms with the counterparty, failure to obtain required regulatory consents, failure to obtain board or stockholder approvals, failure to secure financing, adverse market conditions or unexpected operating or financial problems related to either party to the transaction. In these circumstances, we often do not receive advisory fees that would have been received if the transaction had been completed, despite the fact that we may have devoted considerable time and resources to the transaction. Barriers to the completion of a restructuring transaction may include a lack of anticipated bidders for the assets of our client, the inability of our client to restructure its operations, or indebtedness due to a failure to reach agreement with its creditors. In these circumstances, our fees are generally limited to monthly retainer fees and reimbursement of certain out-of-pocket expenses.

We do not allocate our revenue by the type of advice we provide because of the complexity of the transactions on which we may earn revenue and our holistic approach to client service. For example, a restructuring engagement may evolve to require a sale of all or a portion of the client, M&A assignments can develop from relationships established on prior restructuring engagements, and capital markets expertise can be instrumental on both M&A and restructuring assignments.

Equity-based Compensation — The Company recognizes the cost of services received in exchange for equity instrument awards. The cost is based on its grant-date fair value based on quoted market prices at the time of grant amortized over the service period required by the award’s vesting terms. The Company also recognizes the cost of services received from a nonemployee in exchange for an equity instrument based on the award’s grant-date fair value. The Company records as treasury stock shares repurchased from its employees for the purpose of settling tax liabilities incurred upon the vesting of restricted stock units (“RSUs”). The Company records dividends in kind, net of forfeitures, on outstanding RSUs as a reduction of retained earnings with a corresponding increase in additional paid-in capital, resulting in no net change to equity. Dividends in kind on RSUs are subject to the same vesting conditions as the underlying RSUs on which they were accrued. Dividends in kind will be forfeited if the underlying award does not vest.

The Company has a retirement plan whereby a retiring employee generally will not forfeit certain qualifying incentive RSUs granted during employment if at retirement the employee meets certain requirements. For qualifying awards, (i) the employee must be at least 56 years old, (ii) the employee must have provided at least 5 consecutive years of service to the Company and (iii) the total of (i) and (ii) must be equal to at least 65 years. Any such RSUs will continue to vest on their applicable vesting schedule, subject to noncompetition and other terms. Over time a greater number of employees may become retirement eligible and the related requisite service period over which we will expense these awards will be shorter than the stated vesting period. Any unvested RSUs are eligible to receive dividends in kind; however, the right to dividends in kind will be forfeited if the underlying award does not vest.

Income Taxes — The Company accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” (“ASC 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s condensed consolidated statements of financial condition as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the three months ended March 31, 2021 and 2020, no unrecognized tax benefit was recorded. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. For the three months ended March 31, 2021 and 2020, no such amounts were recorded.

The Company recognizes excess tax benefits and deficiencies as income tax benefits or expenses in the condensed consolidated statement of operations. These are reflected in accounts payable, accrued expenses and other liabilities within the condensed consolidated statement of cash flows.

Effective January 1, 2021, the Company adopted Accounting Standards Update No. 2019-12, “Income Taxes” (“ASU 2019-12”). ASU 2019-12 removes certain rule exceptions to simplify accounting for income taxes. ASU 2019-12 has been incorporated into our provision for income taxes calculation and does not have a material impact to our overall income taxes.

Foreign Currency Translation — Assets and liabilities held in non-U.S. dollar denominated currencies are translated into U.S. dollars at exchange rates in effect at the end of the reporting period. Revenues and expenses are translated at average exchange rates during the reporting period. A charge or credit is recorded to other comprehensive income to reflect the translation of these amounts to the extent the non-U.S. currency is designated the functional currency of the subsidiary. Non-functional currency related transaction gains and losses are immediately recorded in the condensed consolidated statements of operations.
v3.21.1
Recent Accounting Pronouncements
 3 Months Ended
Mar. 31, 2021
New Accounting Pronouncements And Changes In Accounting Principles [Abstract]  
Recent Accounting Pronouncements

3. RECENT ACCOUNTING PRONOUNCEMENTS

 

In March 2020, the FASB issued Accounting Standards Update No. 2020-04, “Reference Rate Reform” (“ASU 2020-04”). ASU 2020-04 provides optional guidance for entities that are impacted by interest rate reform. Specifically, ASU 2020-04 allows for contracts under the scope of Topic 310—Receivables to be accounted for prospectively with the updated interest rate, among other specifications for debt, derivative instruments, and other contracts. ASU 2020-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early application is permitted. Upon initial evaluation, we do not anticipate any material changes to our condensed consolidated financial statements.
v3.21.1
Fixed and Intangible Assets
 3 Months Ended
Mar. 31, 2021
Property Plant And Equipment [Abstract]  
Fixed and Intangible Assets

4. FIXED AND INTANGIBLE ASSETS

Equipment and leasehold improvements, net consists of the following:

 

  

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Office equipment

 

$

 

13,286

 

 

$

 

13,267

 

Furniture and fixtures

 

 

 

10,529

 

 

 

 

10,409

 

Leasehold improvements

 

 

 

36,548

 

 

 

 

36,286

 

Construction in progress

 

 

 

18,078

 

 

 

 

14,943

 

Total

 

 

 

78,441

 

 

 

 

74,905

 

Less accumulated depreciation and amortization

 

 

 

(26,374

)

 

 

 

(24,928

)

Equipment and leasehold improvements, net

 

$

 

52,067

 

 

$

 

49,977

 

 

Depreciation and amortization expenses for fixed assets totaled $1,449 and $1,199 for the three months ended March 31, 2021 and 2020, respectively.

 

As of March 31, 2021, there were $2,493 of costs capitalized within prepaid expenses and other assets on our condensed consolidated statement of financial position related to the implementation of cloud computing arrangements. The amortization expense of the capitalized costs was $122 and $0 for the three months ended March 31, 2021 and 2020, respectively, and was recorded within communication, technology and information services on the condensed consolidated statement of operations.
v3.21.1
Investments
 3 Months Ended
Mar. 31, 2021
Investments All Other Investments [Abstract]  
Investments

5. INVESTMENTS

Fair value investments are contained within the balance of investments on the Company’s condensed consolidated statements of financial condition. The Company established a fair value hierarchy which prioritizes and ranks the level of market price observability used in measuring investments at fair value. Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories (from highest to lowest level of observability) based on inputs:

Level 1—Quoted prices (unadjusted) are available in active markets for identical instruments that the Company has the ability to access as of the reporting date. The Company, to the extent that it holds such instruments, does not adjust the quoted price for these instruments, even in situations in which the Company holds a large position and a sale could reasonably affect the quoted price.

Level 2—Pricing inputs are observable for the instruments, either directly or indirectly, as of the reporting date, but are not the same as those used in level 1. Fair value is determined through the use of models or other valuation methodologies.

Level 3—Pricing inputs are unobservable for the instruments and include situations in which there is little, if any, market activity for the investments. The inputs into the determination of fair value require significant judgment or estimation by the Company’s management.

The estimated fair values of money market securities and U.S. Treasury instruments are based on quoted prices for recent trading activity in identical or similar instruments. The Company generally invests in U.S. Treasury instruments with maturities of less than twelve months. The Company considers these securities to be risk free and does not reserve for expected credit losses on these treasury investments. See Note 2 for further information on the Company’s fair value hierarchy.

The Company’s methodology for reclassifications impacting the fair value hierarchy is that transfers in/out of the respective category are reported at fair value as of the beginning of the period in which the reclassification occurred.

The following table summarizes the levels of the fair value hierarchy into which the Company’s financial assets fall as of March 31, 2021:

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

 

$

 

17,000

 

 

$

—

 

 

$

 

17,000

 

 

$

—

 

Money market securities

 

 

 

40,503

 

 

 

—

 

 

 

 

40,503

 

 

 

—

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

 

 

 

72,262

 

 

 

 

—

 

 

 

 

72,262

 

 

 

—

 

Total financial assets

 

$

 

129,765

 

 

$

 

—

 

 

$

 

129,765

 

 

$

 

—

 

 

The cost basis of the financial assets recorded at fair value included in investments on the condensed consolidated statement of financial condition was $72,258 as of March 31, 2021.

The Company holds investments in the sponsors (collectively referred to herein as “Atlas Crest Sponsors”) of Atlas Crest Investment Corp. (“Atlas Crest I”), Atlas Crest Investment Corp. II (“Atlas Crest II”), Atlas Crest Investment Corp. III (“Atlas Crest III”), Atlas Crest Investment Corp. IV (“Atlas Crest IV”) and Atlas Crest Investment Corp. V (“Atlas Crest V”), each a special purpose acquisition company (“SPAC”) (each an “Atlas Crest Entity” and collectively, the “Atlas Crest Entities”). The Company’s Chief Executive Officer, Kenneth Moelis, is a founding member and the managing member of the Atlas Crest Sponsors and serves as Non-Executive Chairman of the Atlas Crest Entities. During 2020, the Company invested $887 into the sponsor of Atlas Crest I. During 2021, the Company invested $660, $2,788, $1,960, and $1,132 in the sponsors of Atlas Crest II, Atlas Crest III, Atlas Crest IV, and Atlas Crest V, respectively. These investments in the Atlas Crest Sponsors are recorded at cost and included in investments on the consolidated statement of financial condition. As of March 31, 2021, and December 31, 2020, the aggregate investment balance of the Atlas Crest Sponsors was $7,427 and $887, respectively.

The following table summarizes the levels of the fair value hierarchy into which the Company’s financial assets fall as of December 31, 2020:

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

 

$

 

15,599

 

 

$

 

—

 

 

$

 

15,599

 

 

$

—

 

Money market securities

 

 

 

103,406

 

 

 

—

 

 

 

 

103,406

 

 

 

—

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

 

 

 

172,671

 

 

 

—

 

 

 

 

172,671

 

 

 

—

 

Total financial assets

 

$

 

291,676

 

 

$

 

—

 

 

$

 

291,676

 

 

$

 

—

 

For the three months ended March 31, 2020, unrealized losses of $25 were recognized in other income and expenses on the condensed consolidated statement of operations related to common stock held at the reporting date. The cost basis of the financial assets recorded at fair value included in investments on the condensed consolidated statement of financial condition was $172,640 as of December 31, 2020.

Equity-method investments are contained within the balance of investments on the Company’s condensed consolidated statements of financial condition. On April 1, 2010, the Company entered into a 50-50 joint venture in Moelis Australia Holdings PTY Limited, investing a combination of cash and certain net assets in exchange for its interests. On April 10, 2017, Moelis Australia Holdings PTY Limited consummated their initial public offering and became listed on the Australian Securities Exchange as Moelis Australia Limited (ASX: MOE). As a result of the offering, the Company’s ownership interest in Moelis Australia was diluted and continues to be accounted for under the equity method of accounting.

On February 17, 2021 and February 19, 2020, Moelis Australia declared dividends, of which the Company received $2,279 and $1,942 on March 4, 2021 and March 4, 2020, respectively. The Company accounted for the dividends as a return on investment and reduced the carrying value of the investment in Moelis Australia by $2,279 and $1,942, respectively.

The balances of the Company’s equity method investment as of March 31, 2021 and December 31, 2020 were $38,754 and $38,143, respectively, and are included within investments on the condensed consolidated statements of financial condition. The Company’s share of earnings on this investment is recorded in other income and expenses on the condensed consolidated statements of operations.
v3.21.1
Net Income (Loss) Per Share Attributable to Class A Common Shareholders
 3 Months Ended
Mar. 31, 2021
Earnings Per Share [Abstract]  
Net Income (Loss) Per Share Attributable to Class A Common Shareholders

6. NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS

The calculations of basic and diluted net income (loss) per share attributable to holders of shares of Class A common stock for the three months ended March 31, 2021 and 2020 are presented below.

 

  

 

 

Three Months Ended March 31,

 

 

(dollars in thousands, except per share amounts)

 

 

2021

 

 

 

2020

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to holders of shares of Class A common stock—basic

 

 

$

 

66,529

 

 

 

$

 

25,130

 

 

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

 

 

 

 

 

 

(a)

 

 

 

 

 

(a)

Net income (loss) attributable to holders of shares of Class A common stock—diluted

 

 

$

 

66,529

 

 

 

$

 

25,130

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of Class A common stock outstanding—basic

 

 

 

 

60,932,966

 

 

 

 

 

52,666,457

 

 

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

 

 

 

 

 

 

(a)

 

 

 

 

 

(a)

Weighted average number of incremental shares issuable from unvested RSUs and stock options, as calculated using the treasury stock method

 

 

 

 

5,427,251

 

(b)

 

 

 

4,426,525

 

(b)

Weighted average shares of Class A common stock outstanding—diluted

 

 

 

 

66,360,217

 

 

 

 

 

57,092,982

 

 

Net income (loss) per share attributable to holders of shares of Class A common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

 

1.09

 

 

 

$

 

0.48

 

 

Diluted

 

 

$

 

1.00

 

 

 

$

 

0.44

 

 

 

We have not included the impact of Class B common stock because these shares are entitled to an insignificant amount of economic participation.

 

(a)

Class A partnership units may be exchanged for Moelis & Company Class A common stock on a one-for-one basis, subject to applicable exchange restrictions. If all Class A partnership units were to be exchanged for Class A common stock, fully diluted Class A common stock outstanding would be 74,625,284 and 70,051,004 for the three months ended March 31, 2021 and 2020, respectively. In computing the dilutive effect, if any, that the aforementioned exchange would have on net income (loss) per share, net income (loss) available to holders of Class A common stock would be adjusted due to the elimination of the noncontrolling interests in consolidated entities associated with the Group LP Class A partnership units (including any tax impact). For the three months ended March 31, 2021 and 2020, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive.

 

 

(b)

Certain shares of Moelis & Company’s Class A common stock assumed to be issued pursuant to certain RSUs as calculated using the treasury stock method were antidilutive and therefore have been excluded from the calculation of diluted net income (loss) per share attributable to Moelis & Company for certain periods. The additional weighted average amount of RSUs that would have been included in the treasury stock method calculation if the effect were dilutive would have been 1,539 and 1,613,603 units for the three months ended March 31, 2021 and 2020, respectively.
v3.21.1
Equity-Based Compensation
 3 Months Ended
Mar. 31, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Equity-Based Compensation

7. EQUITY-BASED COMPENSATION

Pre-IPO Partnership Units

Prior to the Company’s IPO, the business operated as a partnership and its ownership structure was comprised of common partners (principally outside investors) holding units and Managing Directors and employees holding units. In connection with the IPO, Group LP issued Class A partnership units to Moelis & Company and to certain existing unit holders. Following the reorganization, a Group LP Class A partnership unit (not held by Moelis & Company or its subsidiaries) is exchangeable into one share of Moelis & Company Class A common stock and represents the Company’s noncontrolling interests.

The Company recognized compensation expenses of $0 and $30 for the three months ended March 31, 2021 and 2020, respectively, in relation to these pre-IPO partnership units.

2014 Omnibus Incentive Plan

In connection with the IPO, the Company adopted the Moelis & Company 2014 Omnibus Incentive Plan (the “Plan”) to provide additional incentives to selected officers, employees, Managing Directors, non-employee directors, independent contractors, partners, senior

advisors and consultants. The Plan provides for the issuance of incentive stock options (“ISOs”), nonqualified stock options, stock appreciation rights (“SARs”), restricted stock, RSUs, stock bonuses, other stock-based awards (including partnership interests that are exchangeable into stock upon satisfaction of certain conditions) and cash awards.

Restricted Stock Units (RSUs) and Other Stock-based Awards

Pursuant to the Plan and in connection with the Company’s annual compensation process and ongoing hiring process, the Company issues RSUs and other stock-based awards which generally vest over a service life of four to five years. For the three months ended March 31, 2021 and 2020, the Company recognized expense of $50,963 and $38,225, respectively, in relation to these awards. 

The following table summarizes activity related to RSUs and other stock-based awards for the three months ended March 31, 2021 and 2020.

 

  

 

RSUs and Other Stock-based Awards

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

Average

 

 

 

Number of

 

 

Grant Date

 

 

Number of

 

 

Grant Date

 

 

 

Shares

 

 

Fair Value

 

 

Shares

 

 

Fair Value

 

Unvested Balance at January 1,

 

 

8,742,695

 

 

$

 

41.45

 

 

 

8,414,130

 

 

$

 

42.19

 

Granted

 

 

3,100,355

 

 

 

 

54.74

 

 

 

3,585,725

 

 

 

 

37.93

 

Forfeited

 

 

(34,974

)

 

 

 

48.44

 

 

 

(48,512

)

 

 

 

37.00

 

Vested

 

 

(3,689,539

)

 

 

 

42.86

 

 

 

(2,894,992

)

 

 

 

38.67

 

Unvested Balance at March 31,

 

 

8,118,537

 

 

$

 

46.43

 

 

 

9,056,351

 

 

$

 

41.53

 

 

As of March 31, 2021, the total compensation expense related to unvested RSUs and other stock-based awards not yet recognized was $221,171. The weighted-average period over which this compensation expense is expected to be recognized at March 31, 2021 is 2.2 years.

Stock Options

Pursuant to the Plan, the Company issued 3,501,881 stock options in 2014 which vest over a five-year period. The Company estimated the fair value of stock option awards at grant using the Black-Scholes valuation model with the following assumptions:

 

 

 

 

Assumptions

 

Expected life (in years)

 

 

 

6

 

Weighted-average risk free interest rate

 

 

 

1.91

%

Expected volatility

 

 

 

35

%

Dividend yield

 

 

 

2.72

%

Weighted-average fair value at grant date

 

$

 

6.70

 

 

During the six year life of the options, the Company paid special dividends of $9.05, in aggregate. As required under Section 5 of the Company’s 2014 Omnibus Incentive Plan, the Compensation Committee of the Company’s Board of Directors equitably reduced the exercise price of the Company’s outstanding options to purchase common stock by $9.05 from $25.00 per share to $15.95 per share.

The following table summarizes activity related to stock options for the three months ended March 31, 2020:

 

 

 

Stock Options Outstanding

 

 

 

2020

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Average

 

 

 

Number

 

 

Exercise Price

 

 

 

Outstanding

 

 

Per Share

 

Outstanding at January 1,

 

 

728,534

 

 

$

 

15.95

 

Exercises

 

 

(722,034

)

 

 

 

15.95

 

Forfeitures or expirations

 

 

—

 

 

 

 

—

 

Outstanding at March 31,

 

 

6,500

 

 

$

 

15.95

 

 

For the three months ended March 31, 2021 and 2020, the Company recognized no expenses in relation to these stock options. As of April 2020, no stock options remain outstanding.

Share Repurchase Plan

In February 2019, the Board of Directors authorized the repurchase of up to $100,000 of shares of Class A common stock and/or Class A partnership units of Group LP with no expiration date. Under this share repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of shares repurchased will be opportunistic and measured in nature and will depend on a variety of factors, including price and market conditions. The remaining balance of shares authorized for repurchase under the program was $73,601 as of March 31, 2021.
v3.21.1
Stockholders Equity
 3 Months Ended
Mar. 31, 2021
Stockholders Equity Note [Abstract]  
Stockholders Equity

8. STOCKHOLDERS EQUITY

Class A Common Stock

In April 2014, the Company issued 15,263,653 shares of Class A common stock in connection with the IPO and reorganization. Since its IPO, the Company has conducted several offerings of Class A common stock in order to facilitate organized liquidity and increase the public float of its Class A common stock. The aggregate increase to Class A common stock as a result of such offerings was 24,923,349 shares. The Company did not retain any proceeds from the sale of its Class A common stock.

 

As of March 31, 2021, there were 66,648,561 shares of Class A common stock issued, 5,323,017 shares of treasury stock, and 61,325,544 shares outstanding, and as of December 31, 2020, there were 61,986,927 shares of Class A common stock issued, 3,959,083 shares of treasury stock, and 58,027,844 shares outstanding. The changes in Class A common stock are due primarily to the IPO, offering transactions described above, exchanges of Class A partnership units, the exercise of stock options and vesting of restricted stock units in connection with the Company’s annual compensation process and ongoing hiring process.

 

Class B Common Stock

In conjunction with Moelis & Company’s IPO of its Class A common stock, the Company issued 36,158,698 shares of Class B common stock. Moelis & Company Partner Holdings LP (“Partner Holdings”) holds all shares of Class B common stock, enabling it initially to exercise majority voting control over the Company. In connection with the Company’s offerings of Class A common stock described above, 24,919,744 shares of Class B common stock were purchased from Partner Holdings at a cost of $550. The economic rights of Class B common stock are based on the ratio of the Class B subscription price to the initial public offering price of shares of Class A common stock (.00055 to 1). Shares of Class B common stock are generally not transferrable and, if transferred other than in the limited circumstances set forth in Moelis & Company’s Amended and Restated Certificate of Incorporation, such shares shall automatically convert into a number of shares of Class A common stock, or dollar equivalent. Each share of Class B common stock may also be converted to a number of Class A shares at the option of the holder. Holders of shares of Class B common stock are entitled to receive dividends of the same type as any dividends payable on outstanding shares of Class A common stock at a ratio of .00055 to 1.

 

As of March 31, 2021, and December 31, 2020, 4,899,457 and 5,948,750 shares of Class B common stock were issued and outstanding, respectively, due primarily to the IPO, offering transactions, and Class B conversions described above.

Treasury Stock

During the three months ended March 31, 2021 and 2020, the Company repurchased 1,363,934 and 869,779 shares, respectively, pursuant to the Company’s share repurchase program and shares repurchased from its employees for the purpose of settling tax liabilities incurred upon the delivery of equity-based compensation awards. The result of the repurchases was an increase of $74,211 and $31,636, respectively, in the treasury stock balance on the Company’s condensed consolidated statements of changes in equity as of March 31, 2021 and 2020.

Noncontrolling Interests

A Group LP Class A partnership unit (not held by Moelis & Company or its subsidiaries) is exchangeable into one share of Moelis & Company Class A common stock and represents the Company’s noncontrolling interests (non-redeemable). As of March 31, 2021 and December 31, 2020, partners held 7,855,398 and 8,508,857 Group LP partnership units, respectively, representing an 11% and 13% noncontrolling interest in Moelis & Company, respectively.

 

 

 

Controlling Interests

Moelis & Company operates and controls all of the business and affairs of Group LP and its operating entity subsidiaries indirectly through its equity interest in Group GP, and thus the 61,325,544 shares of Class A common stock outstanding at March 31, 2021 (58,027,844 as of December 31, 2020), represents the controlling interest.
v3.21.1
Related-Party Transactions
 3 Months Ended
Mar. 31, 2021
Related Party Transactions [Abstract]  
Related-Party Transactions

9. RELATED-PARTY TRANSACTIONS

Aircraft Lease— On August 30, 2014, a related party, Moelis & Company Manager LLC ("Manager"), acquired an aircraft with funds received solely from its managing member (Mr. Moelis). The aircraft was used and operated by the Company pursuant to a dry lease with Manager. The terms of the dry lease were comparable to the market rates of leasing from an independent third party. Pursuant to this dry lease arrangement, the lessee is obligated to bear its share of the costs of operating the aircraft. In addition, Mr. Moelis was the other lessee of the aircraft and shared the operating and related costs of the plane in proportion to his respective use pursuant to a cost sharing and operating agreement. On July 12, 2019, the Company terminated its aircraft dry lease with Manager, the lessor, and Mr. Moelis, the other lessee (the “Old Lease”) and the related cost sharing agreement with Mr. Moelis, which were set to expire by their terms on December 31, 2019, and entered into a new dry lease with Manager, the lessor, and Mr. Moelis, the other lessee (the “New Lease”) and cost sharing agreement with Mr. Moelis, which terminate on December 31, 2022. The terms of the New Lease and new cost sharing agreement are substantially similar to the Old Lease and related cost sharing agreement.

For the three months ended March 31, 2021 and 2020, the Company incurred $324 and $324 in aircraft lease costs to be paid to Manager, respectively.

Promissory Notes —As of March 31, 2021, there were $319 of unsecured promissory notes from employees held by the Company (December 31, 2020: $389). Any outstanding balances are reflected in accrued and other receivables on the condensed consolidated statements of financial condition. The notes bear fixed interest rates ranging from 3.00% to 4.00%. During the three months ended March 31, 2021 and 2020, the Company received $70 and $0 of principal repayments and recognized interest income of $5 and $2, on such notes, respectively, which is included in other income and expenses on the condensed consolidated statements of operations.

Services Agreement —In connection with the Company’s IPO, the Company entered into a services agreement with a related party, Moelis Asset Management LP, whereby the Company provides certain administrative services to Moelis Asset Management LP for a fee. This fee totaled $57 and $110 for the three months ended March 31, 2021 and 2020, respectively. The amount of the fee is based upon the estimated usage and related expense of all shared services between the Company and Moelis Asset Management LP during the relevant period, and will be assessed periodically by management as per the terms of the agreement. As of March 31, 2021 and December 31, 2020, the Company had no balances due from Moelis Asset Management LP.

Affiliated SPACs—During 2020, the Company began providing office space, secretarial, administrative and other corporate services for a fee of $10 a month to Atlas Crest I. In February 2021, the Company began providing these services to Atlas Crest II and is expected to begin providing these services to the other Atlas Crest Entities upon consummation of their initial public offerings, in each case for a fee of $10 per month. For the three months ended March 31, 2021, these fees totaled $50. This arrangement shall continue with each Atlas Crest Entity until such Atlas Crest Entity consummates a business combination or is liquidated. As of March 31, 2021 and December 31, 2020, the Company had no balance due from the Atlas Crest Entities or their sponsors.

In addition to the Company’s investments in the Atlas Crest Sponsors (described further in Note 5), the Company’s Executive Officers have a material, non-majority investment in the Atlas Crest Sponsors.

Moelis Australia —As of March 31, 2021 and December 31, 2020, the Company had a balance of $5 due to Moelis Australia which is reflected in accrued and other receivables on the condensed consolidated statements of financial condition. These balances consist of amounts due to or from Moelis Australia for advisory services performed as well as billable expenses incurred by the Company on behalf of Moelis Australia during the period. The relationship between the Company and Moelis Australia is governed by a services agreement.

Revenues —From time to time, the Company enters into advisory transactions with Moelis Asset Management LP and its affiliates. The Company earned revenues associated with such transactions of $0 for each of the three months ended March 31, 2021 and 2020, respectively.  
v3.21.1
Regulatory Requirements
 3 Months Ended
Mar. 31, 2021
Regulatory Capital Requirements [Abstract]  
Regulatory Requirements

10. REGULATORY REQUIREMENTS

Under the SEC Uniform Net Capital Rule (SEC Rule 15c3-1) Alternative Standard under Section (a)(1)(ii), the minimum net capital requirement is $250. At March 31, 2021, Moelis U.S. had net capital of $101,232, which was $100,982 in excess of its required net capital. At December 31, 2020, Moelis U.S. had net capital of $96,800 which was $96,550 in excess of its required net capital.

Certain other non-U.S. subsidiaries are subject to various securities and banking regulations and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. These subsidiaries have exceeded their local capital adequacy requirements at March 31, 2021.
v3.21.1
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2021
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

11. COMMITMENTS AND CONTINGENCIES

Bank Line of Credit — In April 2020, the Company renewed its $65,000 revolving credit facility which extended the maturity date to June 30, 2021. Unless the lender issues a notice of termination at least 60 days prior to such maturity date, this facility will automatically extend to June 30, 2022.

Borrowings on the facility bear interest at the greater of a fixed rate of 3.50% per annum or at the borrower’s option of (i) LIBOR plus 1% or (ii) Prime minus 1.50%. As of March 31, 2021 and December 31, 2020, the Company had no borrowings under the credit facility.

As of March 31, 2021, the Company’s available credit under this facility was $60,507 as a result of the issuance of an aggregate amount of $4,493 of various standby letters of credit, which were required in connection with certain office lease and other agreements. The Company incurs a 1% per annum fee on the outstanding balance of issued letters of credit.

Leases —The Company maintains operating leases for corporate offices and an aircraft with various expiration dates, some of which extend through 2036. Some leases include options to terminate or to extend the lease terms. The Company records lease liabilities measured at the present value of anticipated lease payments over the lease term, including options to extend or terminate the lease when it is reasonably certain such options will be exercised. The implicit discount rates used to determine the present value of the Company’s leases are not readily determinable, thus the Company uses its secured borrowing rate, which was determined with reference to our available credit line. See below for additional information about the Company’s leases.

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

($ in thousands)

 

2021

 

 

2020

 

 

Supplemental Income Statement Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

 

7,154

 

 

$

 

6,365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

 

 

 

 

 

Net operating cash outflows for operating leases

 

$

 

5,980

 

 

$

 

5,299

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Right-of-use assets obtained in exchange for lease obligations (e.g. new leases and amendments commenced during the period):

 

$

 

321

 

 

$

 

2,414

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining lease term - operating leases

 

 

 

13.69

 

years

 

 

13.82

 

years

Weighted-average discount rate - operating leases

 

 

 

3.52

 

%

 

 

3.53

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

The future sublease income and maturities of our operating lease liabilities as of March 31, 2021, are as follows:

 

Fiscal year ended

 

Sublease Income

 

 

Operating Leases

 

Remainder of 2021

 

$

 

(689

)

 

$

 

14,323

 

2022

 

 

 

(919

)

 

 

 

24,214

 

2023

 

 

 

(919

)

 

 

 

20,971

 

2024

 

 

 

(919

)

 

 

 

19,085

 

2025

 

 

 

(459

)

 

 

 

16,326

 

Thereafter

 

 

 

-

 

 

 

 

177,587

 

Total Payments

 

$

 

(3,905

)

 

$

 

272,506

 

 

 

 

 

 

 

 

 

 

 

 

Less: Tenant improvement allowances

 

 

 

 

(18,440

)

Less: Present value adjustment

 

 

 

 

(60,190

)

Total

 

 

$

 

193,876

 

 

 

Contractual Arrangements —In the normal course of business, the Company enters into contracts that contain a variety of representations and warranties and which provide indemnification for specified losses, including certain indemnification of certain officers, directors and employees.

Legal —In the ordinary course of business, from time to time the Company and its affiliates are involved in judicial or regulatory proceedings, arbitration or mediation concerning matters arising in connection with the conduct of its businesses, including contractual and employment matters. In addition, government agencies and self-regulatory organizations conduct periodic examinations and initiate administrative proceedings regarding the Company’s business, including, among other matters, compliance, accounting and operational matters, that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer, investment advisor, or its directors, officers or employees. In view of the inherent difficulty of determining whether any loss in connection with such matters is probable and whether the amount of such loss can be reasonably estimated, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, the Company cannot estimate the amount of such loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, fine, penalty or other relief, if any, might be. Subject to the foregoing, the Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company.
v3.21.1
Employee Benefit Plans
 3 Months Ended
Mar. 31, 2021
Compensation And Retirement Disclosure [Abstract]  
Employee Benefit Plans

12. EMPLOYEE BENEFIT PLANS

The Company covers substantially all U.S. salaried employees with a defined contribution 401(k) plan. Each salaried employee of the Company who has attained the age of 21 is eligible to participate in the 401(k) plan on their first day of employment. Any employer contributions to the 401(k) plan are entirely at the discretion of the Company. The Company accrued expenses relating to employer matching contributions to the 401(k) plan for the three months ended March 31, 2021 and 2020, in the amounts of $715 and $696, respectively.
v3.21.1
Income Taxes
 3 Months Ended
Mar. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

13. INCOME TAXES

The Company’s operations are comprised of entities that are organized as limited liability companies and limited partnerships. For U.S. federal income tax purposes, taxes related to income earned by these entities represent obligations of their interest holders, except for certain other foreign, state, and local taxes (for example, the New York City unincorporated business tax (“UBT”)). In addition, the Company is subject to U.S. corporate federal, state, and local income tax on its allocable share of results of operations from Group LP.

The Company’s provisions for income taxes and effective tax rates were a benefit of $176 and (0.2%) and a benefit of $7,344 and (32.2%), for the three months ended March 31, 2021 and 2020, respectively. The income tax provision for the aforementioned periods primarily reflects the Company’s allocable share of earnings from Group LP at the prevailing U.S. federal, state, and local corporate income tax rates offset by the effect of the excess tax benefit recognized in connection with the delivery of equity-based compensation at an appreciated price above the grant date price for such equity. The excess tax benefits for the three months ended March 31, 2021 and 2020 were $17,542 and $7,337, respectively.

There was an exchange of Class A partnership units for Class A common stock in February 2021 that resulted in an increase to our deferred tax asset related to a step-up in the tax basis in Group LP assets. Approximately $19,392 of the increase to this deferred tax asset is attributable to exchanges by certain partners of Group LP who are party to the tax receivable agreement. Pursuant to this agreement, 85% (or $16,483) of the tax benefits associated with this portion of the deferred tax asset are payable to such exchanging partners over the next 15 years and recorded as amount due pursuant to tax receivable agreement in the condensed consolidated statements of financial condition. The remaining tax benefit is allocable to the Company and is recorded in additional paid-in-capital.
v3.21.1
Revenues and Business Information
 3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
Revenues and Business Information

14. REVENUES AND BUSINESS INFORMATION

The Company’s activities as an investment banking advisory firm constitute a single business segment offering clients, including corporations, governments, sovereign wealth funds, and financial sponsors, a range of advisory services with expertise across all major industries in mergers and acquisitions, recapitalizations and restructurings, capital markets and other corporate finance matters.

 

Since the financial markets are global in nature, the Company generally manages its business based on the operating results of the enterprise taken as whole, not by geographic region. The following table disaggregates the revenues and assets based on the location of the office that generates the revenues or holds the assets, and therefore may not be reflective of the geography in which our clients are located.

 

 

Three Months Ended March 31,

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

United States

$

 

206,252

 

 

$

 

129,185

 

Europe

 

 

43,716

 

 

 

 

16,256

 

Rest of World

 

 

13,898

 

 

 

 

8,265

 

Total

$

 

263,866

 

 

$

 

153,706

 

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets:

 

 

 

 

 

 

 

 

 

 

United States

 

$

 

899,075

 

 

$

 

1,012,831

 

Europe

 

 

 

87,404

 

 

 

 

78,470

 

Rest of World

 

 

 

84,618

 

 

 

 

105,143

 

Total

 

$

 

1,071,097

 

 

$

 

1,196,444

 

 

As of March 31, 2021, and December 31, 2020, the Company had deferred revenues of $8,105 and $2,692, respectively. These amounts primarily consist of upfront fees and retainers for our services. During the three months ended March 31, 2021, $1,682 of revenues were recognized from the opening balance of deferred revenues.

 

Due to the factors that may delay or terminate a transaction (see Note 2), the Company does not estimate constrained transaction fees for revenue recognition. Quantitative disclosures of constrained variable consideration are not provided for remaining, wholly unsatisfied, performance obligations. The remaining performance obligations related to retainers, upfront fees and announcement fees are typically associated with contracts that have durations of one year or less.
v3.21.1
Subsequent Events
 3 Months Ended
Mar. 31, 2021
Subsequent Events [Abstract]  
Subsequent Events

15. SUBSEQUENT EVENTS

The Board of Directors of Moelis & Company declared a special dividend of $2.00 per share in addition to a regular quarterly dividend of $0.55 per share. The $2.55 per share will be paid on June 18, 2021 to shareholders of record as of May 10, 2021.
v3.21.1
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2021
Accounting Policies [Abstract]  
Basis of Accounting

Basis of Accounting —The Company prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). As permitted by the interim reporting rules and regulations set forth by the SEC, the condensed consolidated financial statements presented exclude certain financial information and footnote disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to fairly present the accompanying unaudited condensed consolidated financial statements. These unaudited condensed

consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020.
Consolidation

Consolidation —The Company’s policy is to consolidate (i) entities in which it has a controlling financial interest, (ii) variable interest entities where the Company has a variable interest and is deemed to be the primary beneficiary and (iii) limited partnerships where the Company has ownership of the majority of voting interests. When the Company does not have a controlling interest in an entity, but exerts significant influence over the entity’s operating and financial decisions, the Company applies the equity method of accounting in which it records in earnings its share of income or losses of the entity. All intercompany balances and transactions with the Company’s subsidiaries have been eliminated in consolidation.
Use of Estimates

Use of Estimates —The preparation of condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period in which they are determined to be necessary.

In preparing the condensed consolidated financial statements, management makes estimates and assumptions regarding:

 

•

the adequacy of the allowance for credit losses;

 

•

the assessment of whether revenues from variable consideration should be constrained due to the probability of a significant revenue reversal;

 

•

the assessment of probable lease terms and the measurement of the present value of such obligations;

 

 

•

the measurement and realization of deferred taxes;

 

 

•

the measurement of amount due pursuant to tax receivable agreement; and

 

 

•

other matters that affect the reported amounts and disclosures of contingencies in the financial statements.

 
Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash —Cash and cash equivalents include all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase.

The Company’s cash is maintained in U.S. and non-U.S. bank accounts, of which most bank account balances had little or no insurance coverage (most balances are held in U.S. and U.K. accounts which exceeded the U.S. Federal Deposit Insurance Corporation and U.K. Financial Services Compensation Scheme coverage limits). The Company’s cash equivalents are invested primarily in U.S. Treasury instruments and money market securities.

The Company’s restricted cash is comprised of collateral deposits primarily held by certain non-U.S. subsidiaries. These deposits are required for certain direct debit accounts and are also used to satisfy future medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of March 31, 2021 and 2020, is presented below.

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

Cash

 

$

 

97,899

 

 

$

 

38,975

 

Cash equivalents

 

 

 

57,503

 

 

 

 

85,183

 

Restricted cash

 

 

 

1,081

 

 

 

 

597

 

Total cash, cash equivalents, and restricted cash shown in the statement of cash flows

 

$

 

156,483

 

 

$

 

124,755

 

 

Additionally, as of December 31, 2020, the Company held cash of $83,472 and cash equivalents of $119,005.
Receivables

Receivables —The accompanying condensed consolidated statements of financial condition present accounts receivable balances net of allowance for credit losses based on the Company’s assessment of the collectability of customer accounts.

Included in the accounts receivable balances at March 31, 2021 and December 31, 2020 were $21,774 and $19,603 of long term receivables related to private funds advisory capital raising engagements, which are generally paid in installments over a period of three to four years. These long term receivables generated interest income of $204 and $188 for the three months ended March 31, 2021 and 2020, respectively.

The Company maintains an allowance for credit losses that, in management’s opinion, provides for an adequate reserve to cover losses that may be incurred. For purposes of determining appropriate allowances, the Company stratifies its population of accounts receivable into two categories, one for short-term receivables and a second for private funds advisory receivables. Each population is separately evaluated using an aging method that results in a percentage reserve based on the age of the receivable, in addition to considerations of historical charge-offs and current economic conditions.

After concluding that a reserved accounts receivable is no longer collectible, the Company will charge-off the receivable. This has the effect of reducing both the gross receivable and the allowance for credit losses. If a reserved accounts receivable is subsequently collected, such recoveries reduce the gross receivable and the allowance for credit losses and is a reduction of bad debt expense, which is recorded within other expenses on the condensed consolidated statement of operations. The combination of recoveries and the provision for credit losses of a reported period comprise the Company’s bad debt expense.

On January 1, 2020, the Company adopted Accounting Standards Update No. 2016-13— “Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13") using the modified retrospective method. Upon adoption, a cumulative adjustment was recorded which decreased retained earnings by $459. The tax effect of this adjustment increased retained earnings by $95, resulting in a net decrease of $364 as of January 1, 2020. ASU 2016-13 replaces the incurred loss impairment methodology for financial instruments with the current expected credit loss (CECL) model which requires estimates of future credit losses based on reasonable supporting information. The Company will recognize its expected credit losses for each reporting period going forward.

The following tables summarize credit loss allowance activity for the three months ended March 31, 2021 and March 31, 2020:

 

 

 

Three Months Ended March 31, 2021

 

 

 

Accounts Receivable

 

 

 

 

Short-term Receivables

 

 

 

Private Funds Advisory Receivables

 

 

 

Total

 

Allowance for Credit Losses, beginning balance

 

$

 

3,577

 

 

$

 

198

 

 

$

 

3,775

 

Charge-offs

 

 

 

(741

)

 

 

 

—

 

 

 

 

(741

)

Recoveries

 

 

 

(1,126

)

 

 

 

—

 

 

 

 

(1,126

)

Reduction to allowance

 

 

 

(1,867

)

 

 

 

—

 

 

 

 

(1,867

)

Provision for credit losses

 

 

 

4,253

 

 

 

 

22

 

 

 

 

4,275

 

Allowance for credit losses, ending balance

 

$

 

5,963

 

 

$

 

220

 

 

$

 

6,183

 

 

 

 

Three Months Ended March 31, 2020

 

 

 

Accounts Receivable

 

 

 

 

Short-term Receivables

 

 

 

Private Funds Advisory Receivables

 

 

 

Total

 

Allowance for Credit Losses, beginning balance

 

$

 

4,088

 

 

$

 

—

 

 

$

 

4,088

 

Adjustment for adoption of ASU 2016-13

 

 

 

260

 

 

 

 

199

 

 

 

 

459

 

Allowance for Credit Losses, adjusted beginning balance

 

 

 

4,348

 

 

 

 

199

 

 

 

 

4,547

 

Charge-offs

 

 

 

(1,289

)

 

 

 

—

 

 

 

 

(1,289

)

Recoveries

 

 

 

(724

)

 

 

 

(26

)

 

 

 

(750

)

Reduction to allowance

 

 

 

(2,013

)

 

 

 

(26

)

 

 

 

(2,039

)

Provision for credit losses

 

 

 

1,216

 

 

 

 

52

 

 

 

 

1,268

 

Allowance for credit losses, ending balance

 

$

 

3,551

 

 

$

 

225

 

 

$

 

3,776

 
Deferred Compensation

Deferred Compensation —Deferred compensation costs represent arrangements with certain employees whereby cash payments are subject to a required period of service subsequent to payment by the Company. These amounts are charged to expenses over the period that the employee is required to provide services in order to vest in the payment.
Financial Instruments at Fair Value

Financial Instruments at Fair Value —Fair value is generally based on quoted prices, however if quoted market prices are not available, fair value is determined based on other relevant factors, including dealer price quotations, price activity for equivalent instruments and valuation pricing models. The Company established a fair value hierarchy which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of instrument, the characteristics specific to the instrument and the state of the marketplace (including the existence and transparency of transactions between market participants). Financial instruments with readily-available actively quoted prices or for which fair value can be measured from actively-quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories (from highest to lowest level of observability) based on inputs:

Level 1 —Quoted prices (unadjusted) are available in active markets for identical instruments that the Company has the ability to access as of the reporting date. The Company, to the extent that it holds such instruments, does not adjust the quoted price for these instruments, even in situations in which the Company holds a large position and a sale could reasonably affect the quoted price.

Level 2 —Pricing inputs are observable for the instruments, either directly or indirectly, as of the reporting date, but are not the same as those used in Level 1. Fair value is determined through the use of models or other valuation methodologies.

Level 3 —Pricing inputs are unobservable for the instruments and include situations where there is little, if any, market activity for the investments. The inputs into the determination of fair value require significant judgment or estimation by the Company’s management.

For level 3 investments in which pricing inputs are unobservable and limited market activity exists, management’s determination of fair value is based on the best information available, may incorporate management’s own assumptions and involves a significant degree of judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the instrument.
Equity Method Investments

Equity Method Investments —The Company accounts for its equity method investments under the equity method of accounting as the Company does not control these entities but has the ability to exercise significant influence. The amounts recorded in investments on the condensed consolidated statements of financial condition reflect the Company’s share of contributions made to, distributions received from, and the equity earnings and losses of, the investments. The Company reflects its share of gains and losses of the investment in other income and expenses in the condensed consolidated statements of operations using the most recently available earnings data at the end of the period.
Leases

Leases — The Company maintains operating leases for corporate offices and an aircraft. The Company determines if a contract contains a lease at inception. Operating leases are recorded as right-of-use (“ROU”) assets and lease liabilities on the condensed consolidated statements of financial condition. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease liabilities are recognized at the lease commencement date and are measured at the present value of anticipated lease payments over the lease term. The operating lease ROU assets are equal to the lease liabilities, adjusted for certain lease incentives, accrued rents, and prepaid rents. Typically, our borrowing rate is used to determine the present value of lease payments because the implicit rate is not readily determinable. Our lease terms may include options to extend or terminate the lease. These options are factored into our present value calculations when it is reasonably certain that such options will be exercised. Operating lease expense is recognized on a straight-line basis over the lease term.
Software

Software— Costs related to implementation of cloud computing arrangements that qualify for capitalization are stated at cost less accumulated amortization within prepaid and other assets on the Company’s condensed consolidated statement of financial condition. Such capitalized costs are amortized using the straight-line method over the term of the cloud computing service contract or another rational basis, beginning when the cloud computing arrangement is substantially complete and ready for its intended use. All costs not directly related to the implementation of cloud computing arrangements, including overhead costs and costs of service agreements, will be expensed in the period they are incurred. The amortization expense of such capitalized costs will be presented under communication, technology and information services on the condensed consolidated statement of operations.

Effective January 1, 2020, the Company adopted ASU 2018-15, “Goodwill and Other —Internal Use Software” using a prospective approach (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in cloud computing arrangements with the requirements for capitalizing costs to develop or obtain internal-use software. See Note 4—Fixed and Intangible Assets below for further details on the Company’s capitalized cloud computing arrangements.
Equipment and Leasehold Improvements

Equipment and Leasehold Improvements —Office equipment and furniture and fixtures are stated at cost less accumulated depreciation, which is determined using the straight-line method over the estimated useful lives of the assets, ranging from three to seven years, respectively. Leasehold improvements are stated at cost less accumulated amortization, which is determined using the straight-line method over the lesser of the term of the lease or the estimated useful life of the asset.

Major renewals and improvements are capitalized and minor replacements, maintenance and repairs are charged to expenses as incurred. Assets that are in development and have not yet been placed in service are generally classified as “Construction in Progress” and are reclassified to the appropriate category when the associated assets are placed in service. Upon retirement or disposal of assets, the cost and related accumulated depreciation or amortization are removed from the condensed consolidated statements of financial condition and any gain or loss is reflected in the condensed consolidated statements of operations.
Deferred Tax Asset and Amount Due Pursuant to Tax Receivable Agreement

Deferred Tax Asset and Amount Due Pursuant to Tax Receivable Agreement —In conjunction with the IPO, the Company was  treated for U.S. federal income tax purposes as having directly purchased Class A partnership units in Group LP from the existing unitholders. Additional Group LP Class A partnership units may be exchanged for shares of Class A common stock in the Company. The initial purchase and future exchanges are expected to result in an increase in the tax basis of Group LP’s assets attributable to the Company’s interest in Group LP. These increases in the tax basis of Group LP’s assets attributable to the Company’s interest in Group LP would not have been available but for the initial purchase and future exchanges. Such increases in tax basis are likely to increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of income tax the Company would otherwise be required to pay in the future. As a result, the Company records a deferred tax asset for such increase in tax basis.

The Company has entered into a tax receivable agreement with its eligible Managing Directors that will provide for the payment by the Company to its eligible Managing Directors of 85% of the amount of cash savings, if any, in U.S. federal, state, and local income tax or franchise tax that the Company actually realizes as a result of (a) the increases in tax basis attributable to exchanges by its eligible Managing Directors and (b) tax benefits related to imputed interest deemed to be paid by the Company as a result of this tax receivable agreement. The Company expects to benefit from the remaining 15% of cash savings, if any, in income tax that it realizes and record any such estimated tax benefits as an increase to additional paid-in-capital. For purposes of the tax receivable agreement, cash savings in income tax will be computed by comparing the Company’s actual income tax liability to the amount of such taxes that it would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Group LP as a result of the exchanges and had it not entered into the tax receivable agreement. The term of the tax receivable agreement commenced upon consummation of the IPO and will continue until all such tax benefits have been utilized or expired, unless the Company exercises its right to terminate the tax receivable agreement for an amount based on an agreed value of payments remaining to be made under the agreement. The Company has recorded the estimated tax benefits related to the increase in tax basis and imputed interest as a result of the initial purchase and subsequent exchanges described above as a deferred tax asset in the condensed consolidated statements of financial condition. The amount due to its eligible Managing Directors related to the tax receivable agreement as a result of the initial purchase and subsequent exchanges described above is recorded as amount due pursuant to tax receivable agreement in the condensed consolidated statements of financial condition. The amounts recorded for the deferred tax asset and the liability for our obligations under the tax receivable agreement are estimates. Any adjustments to our estimates subsequent to their initial establishment will be included in net income (loss). Future exchanges of Class A partnership units in Group LP for Class A common shares in the Company will be accounted for in a similar manner.
Revenue and Expense Recognition

Revenue and Expense Recognition—We earn substantially all of our revenues from advisory engagements and, in many cases, we are not paid until the completion of an underlying transaction. The Company recognizes revenues from providing advisory services when or as our obligations are fulfilled and collection is reasonably assured. The vast majority of our advisory revenues, which include reimbursements for certain out-of-pocket expenses, are recognized over time; however, a small number of transactions may be recognized at a point in time. We provide our advisory service on an ongoing basis which, for example, may include evaluating and selecting one of multiple strategies. During such engagements, our clients are continuously benefitting from our counsel and the over time recognition matches the transfer of such benefits. However, the recognition of transaction fees is constrained until substantially all services have been provided, specified conditions have been met and it is probable that a significant reversal of revenue will not occur in a future period. Upfront fees and retainers specified in our engagement letters that meet the over time criteria will be recognized on a systematic basis over the estimated period where the related services are performed. Revenues may be recognized at a point in time if the engagement represents a singular objective that does not transfer any notable value until formally completed, such as when issuing a fairness opinion. In these instances, the point in time recognition appropriately matches the transfer and consumption of our services.

Incremental costs of obtaining a contract are expensed as incurred since such costs are generally not recoverable and the typical duration of our advisory contracts is less than one year. Costs to fulfill contracts consist of out-of-pocket expenses that are part of performing our advisory services and are typically expensed as incurred, except where the transfer and consumption of our services occurs at a point in time. For engagements recognized at a point in time, out-of-pocket expenses are capitalized and subsequently expensed in the condensed consolidated statement of operations upon completion of the engagement. The Company records deferred revenues when it receives fees from clients that have not yet been earned (e.g. an upfront fee) or when the Company has an unconditional right to consideration before all performance obligations are complete (e.g. upon satisfying conditions to earn an announcement fee, but before the transaction is consummated).

Complications that may terminate or delay a transaction include failure to agree upon final terms with the counterparty, failure to obtain required regulatory consents, failure to obtain board or stockholder approvals, failure to secure financing, adverse market conditions or unexpected operating or financial problems related to either party to the transaction. In these circumstances, we often do not receive advisory fees that would have been received if the transaction had been completed, despite the fact that we may have devoted considerable time and resources to the transaction. Barriers to the completion of a restructuring transaction may include a lack of anticipated bidders for the assets of our client, the inability of our client to restructure its operations, or indebtedness due to a failure to reach agreement with its creditors. In these circumstances, our fees are generally limited to monthly retainer fees and reimbursement of certain out-of-pocket expenses.

We do not allocate our revenue by the type of advice we provide because of the complexity of the transactions on which we may earn revenue and our holistic approach to client service. For example, a restructuring engagement may evolve to require a sale of all or a portion of the client, M&A assignments can develop from relationships established on prior restructuring engagements, and capital markets expertise can be instrumental on both M&A and restructuring assignments.
Equity-based Compensation

Equity-based Compensation — The Company recognizes the cost of services received in exchange for equity instrument awards. The cost is based on its grant-date fair value based on quoted market prices at the time of grant amortized over the service period required by the award’s vesting terms. The Company also recognizes the cost of services received from a nonemployee in exchange for an equity instrument based on the award’s grant-date fair value. The Company records as treasury stock shares repurchased from its employees for the purpose of settling tax liabilities incurred upon the vesting of restricted stock units (“RSUs”). The Company records dividends in kind, net of forfeitures, on outstanding RSUs as a reduction of retained earnings with a corresponding increase in additional paid-in capital, resulting in no net change to equity. Dividends in kind on RSUs are subject to the same vesting conditions as the underlying RSUs on which they were accrued. Dividends in kind will be forfeited if the underlying award does not vest.

The Company has a retirement plan whereby a retiring employee generally will not forfeit certain qualifying incentive RSUs granted during employment if at retirement the employee meets certain requirements. For qualifying awards, (i) the employee must be at least 56 years old, (ii) the employee must have provided at least 5 consecutive years of service to the Company and (iii) the total of (i) and (ii) must be equal to at least 65 years. Any such RSUs will continue to vest on their applicable vesting schedule, subject to noncompetition and other terms. Over time a greater number of employees may become retirement eligible and the related requisite service period over which we will expense these awards will be shorter than the stated vesting period. Any unvested RSUs are eligible to receive dividends in kind; however, the right to dividends in kind will be forfeited if the underlying award does not vest.
Income Taxes

Income Taxes — The Company accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” (“ASC 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s condensed consolidated statements of financial condition as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the three months ended March 31, 2021 and 2020, no unrecognized tax benefit was recorded. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. For the three months ended March 31, 2021 and 2020, no such amounts were recorded.

The Company recognizes excess tax benefits and deficiencies as income tax benefits or expenses in the condensed consolidated statement of operations. These are reflected in accounts payable, accrued expenses and other liabilities within the condensed consolidated statement of cash flows.

Effective January 1, 2021, the Company adopted Accounting Standards Update No. 2019-12, “Income Taxes” (“ASU 2019-12”). ASU 2019-12 removes certain rule exceptions to simplify accounting for income taxes. ASU 2019-12 has been incorporated into our provision for income taxes calculation and does not have a material impact to our overall income taxes.
Foreign Currency Translation

Foreign Currency Translation — Assets and liabilities held in non-U.S. dollar denominated currencies are translated into U.S. dollars at exchange rates in effect at the end of the reporting period. Revenues and expenses are translated at average exchange rates during the reporting period. A charge or credit is recorded to other comprehensive income to reflect the translation of these amounts to the extent the non-U.S. currency is designated the functional currency of the subsidiary. Non-functional currency related transaction gains and losses are immediately recorded in the condensed consolidated statements of operations.
v3.21.1
Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Mar. 31, 2021
Accounting Policies [Abstract]  
Summary of Cash, Cash Equivalents and Restricted Cash A reconciliation of the Company’s cash, cash equivalents and restricted cash as of March 31, 2021 and 2020, is presented below.

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

Cash

 

$

 

97,899

 

 

$

 

38,975

 

Cash equivalents

 

 

 

57,503

 

 

 

 

85,183

 

Restricted cash

 

 

 

1,081

 

 

 

 

597

 

Total cash, cash equivalents, and restricted cash shown in the statement of cash flows

 

$

 

156,483

 

 

$

 

124,755

 

 
Summary of Credit Loss Allowance Activity

The following tables summarize credit loss allowance activity for the three months ended March 31, 2021 and March 31, 2020:

 

 

 

Three Months Ended March 31, 2021

 

 

 

Accounts Receivable

 

 

 

 

Short-term Receivables

 

 

 

Private Funds Advisory Receivables

 

 

 

Total

 

Allowance for Credit Losses, beginning balance

 

$

 

3,577

 

 

$

 

198

 

 

$

 

3,775

 

Charge-offs

 

 

 

(741

)

 

 

 

—

 

 

 

 

(741

)

Recoveries

 

 

 

(1,126

)

 

 

 

—

 

 

 

 

(1,126

)

Reduction to allowance

 

 

 

(1,867

)

 

 

 

—

 

 

 

 

(1,867

)

Provision for credit losses

 

 

 

4,253

 

 

 

 

22

 

 

 

 

4,275

 

Allowance for credit losses, ending balance

 

$

 

5,963

 

 

$

 

220

 

 

$

 

6,183

 

 

 

 

Three Months Ended March 31, 2020

 

 

 

Accounts Receivable

 

 

 

 

Short-term Receivables

 

 

 

Private Funds Advisory Receivables

 

 

 

Total

 

Allowance for Credit Losses, beginning balance

 

$

 

4,088

 

 

$

 

—

 

 

$

 

4,088

 

Adjustment for adoption of ASU 2016-13

 

 

 

260

 

 

 

 

199

 

 

 

 

459

 

Allowance for Credit Losses, adjusted beginning balance

 

 

 

4,348

 

 

 

 

199

 

 

 

 

4,547

 

Charge-offs

 

 

 

(1,289

)

 

 

 

—

 

 

 

 

(1,289

)

Recoveries

 

 

 

(724

)

 

 

 

(26

)

 

 

 

(750

)

Reduction to allowance

 

 

 

(2,013

)

 

 

 

(26

)

 

 

 

(2,039

)

Provision for credit losses

 

 

 

1,216

 

 

 

 

52

 

 

 

 

1,268

 

Allowance for credit losses, ending balance

 

$

 

3,551

 

 

$

 

225

 

 

$

 

3,776

 
v3.21.1
Fixed and Intangible Assets (Tables)
 3 Months Ended
Mar. 31, 2021
Property Plant And Equipment [Abstract]  
Schedule of Equipment and Leasehold Improvements, Net

Equipment and leasehold improvements, net consists of the following:

 

  

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Office equipment

 

$

 

13,286

 

 

$

 

13,267

 

Furniture and fixtures

 

 

 

10,529

 

 

 

 

10,409

 

Leasehold improvements

 

 

 

36,548

 

 

 

 

36,286

 

Construction in progress

 

 

 

18,078

 

 

 

 

14,943

 

Total

 

 

 

78,441

 

 

 

 

74,905

 

Less accumulated depreciation and amortization

 

 

 

(26,374

)

 

 

 

(24,928

)

Equipment and leasehold improvements, net

 

$

 

52,067

 

 

$

 

49,977

 
v3.21.1
Investments (Tables)
 3 Months Ended
Mar. 31, 2021
Investments All Other Investments [Abstract]  
Summary of the Levels of the Fair Value Hierarchy into Which the Company's Financial Assets Fall

The following table summarizes the levels of the fair value hierarchy into which the Company’s financial assets fall as of March 31, 2021:

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

 

$

 

17,000

 

 

$

—

 

 

$

 

17,000

 

 

$

—

 

Money market securities

 

 

 

40,503

 

 

 

—

 

 

 

 

40,503

 

 

 

—

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

 

 

 

72,262

 

 

 

 

—

 

 

 

 

72,262

 

 

 

—

 

Total financial assets

 

$

 

129,765

 

 

$

 

—

 

 

$

 

129,765

 

 

$

 

—

 

The following table summarizes the levels of the fair value hierarchy into which the Company’s financial assets fall as of December 31, 2020:

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Included in cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

 

$

 

15,599

 

 

$

 

—

 

 

$

 

15,599

 

 

$

—

 

Money market securities

 

 

 

103,406

 

 

 

—

 

 

 

 

103,406

 

 

 

—

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury instruments

 

 

 

172,671

 

 

 

—

 

 

 

 

172,671

 

 

 

—

 

Total financial assets

 

$

 

291,676

 

 

$

 

—

 

 

$

 

291,676

 

 

$

 

—

 
v3.21.1
Net Income (Loss) Per Share Attributable to Class A Common Shareholders (Tables)
 3 Months Ended
Mar. 31, 2021
Earnings Per Share [Abstract]  
Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share

The calculations of basic and diluted net income (loss) per share attributable to holders of shares of Class A common stock for the three months ended March 31, 2021 and 2020 are presented below.

 

  

 

 

Three Months Ended March 31,

 

 

(dollars in thousands, except per share amounts)

 

 

2021

 

 

 

2020

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to holders of shares of Class A common stock—basic

 

 

$

 

66,529

 

 

 

$

 

25,130

 

 

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

 

 

 

 

 

 

(a)

 

 

 

 

 

(a)

Net income (loss) attributable to holders of shares of Class A common stock—diluted

 

 

$

 

66,529

 

 

 

$

 

25,130

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of Class A common stock outstanding—basic

 

 

 

 

60,932,966

 

 

 

 

 

52,666,457

 

 

Add (deduct) dilutive effect of:

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interests related to Class A partnership units

 

 

 

 

 

 

(a)

 

 

 

 

 

(a)

Weighted average number of incremental shares issuable from unvested RSUs and stock options, as calculated using the treasury stock method

 

 

 

 

5,427,251

 

(b)

 

 

 

4,426,525

 

(b)

Weighted average shares of Class A common stock outstanding—diluted

 

 

 

 

66,360,217

 

 

 

 

 

57,092,982

 

 

Net income (loss) per share attributable to holders of shares of Class A common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

$

 

1.09

 

 

 

$

 

0.48

 

 

Diluted

 

 

$

 

1.00

 

 

 

$

 

0.44

 

 

 

We have not included the impact of Class B common stock because these shares are entitled to an insignificant amount of economic participation.

 

(a)

Class A partnership units may be exchanged for Moelis & Company Class A common stock on a one-for-one basis, subject to applicable exchange restrictions. If all Class A partnership units were to be exchanged for Class A common stock, fully diluted Class A common stock outstanding would be 74,625,284 and 70,051,004 for the three months ended March 31, 2021 and 2020, respectively. In computing the dilutive effect, if any, that the aforementioned exchange would have on net income (loss) per share, net income (loss) available to holders of Class A common stock would be adjusted due to the elimination of the noncontrolling interests in consolidated entities associated with the Group LP Class A partnership units (including any tax impact). For the three months ended March 31, 2021 and 2020, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive.

 

 

(b)

Certain shares of Moelis & Company’s Class A common stock assumed to be issued pursuant to certain RSUs as calculated using the treasury stock method were antidilutive and therefore have been excluded from the calculation of diluted net income (loss) per share attributable to Moelis & Company for certain periods. The additional weighted average amount of RSUs that would have been included in the treasury stock method calculation if the effect were dilutive would have been 1,539 and 1,613,603 units for the three months ended March 31, 2021 and 2020, respectively.
v3.21.1
Equity-Based Compensation (Tables)
 3 Months Ended
Mar. 31, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Summary of Activity Related to RSUs and Other Stock-based Awards

The following table summarizes activity related to RSUs and other stock-based awards for the three months ended March 31, 2021 and 2020.

 

  

 

RSUs and Other Stock-based Awards

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

Average

 

 

 

Number of

 

 

Grant Date

 

 

Number of

 

 

Grant Date

 

 

 

Shares

 

 

Fair Value

 

 

Shares

 

 

Fair Value

 

Unvested Balance at January 1,

 

 

8,742,695

 

 

$

 

41.45

 

 

 

8,414,130

 

 

$

 

42.19

 

Granted

 

 

3,100,355

 

 

 

 

54.74

 

 

 

3,585,725

 

 

 

 

37.93

 

Forfeited

 

 

(34,974

)

 

 

 

48.44

 

 

 

(48,512

)

 

 

 

37.00

 

Vested

 

 

(3,689,539

)

 

 

 

42.86

 

 

 

(2,894,992

)

 

 

 

38.67

 

Unvested Balance at March 31,

 

 

8,118,537

 

 

$

 

46.43

 

 

 

9,056,351

 

 

$

 

41.53

 
Schedule of Assumptions Used to Estimate the Fair Value of Stock Option Using the Black-Scholes Valuation model The Company estimated the fair value of stock option awards at grant using the Black-Scholes valuation model with the following assumptions:

 

 

Assumptions

 

Expected life (in years)

 

 

 

6

 

Weighted-average risk free interest rate

 

 

 

1.91

%

Expected volatility

 

 

 

35

%

Dividend yield

 

 

 

2.72

%

Weighted-average fair value at grant date

 

$

 

6.70

 

 
Summary of Activity Related to Stock Options

The following table summarizes activity related to stock options for the three months ended March 31, 2020:

 

 

 

Stock Options Outstanding

 

 

 

2020

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Average

 

 

 

Number

 

 

Exercise Price

 

 

 

Outstanding

 

 

Per Share

 

Outstanding at January 1,

 

 

728,534

 

 

$

 

15.95

 

Exercises

 

 

(722,034

)

 

 

 

15.95

 

Forfeitures or expirations

 

 

—

 

 

 

 

—

 

Outstanding at March 31,

 

 

6,500

 

 

$

 

15.95

 
v3.21.1
Commitments and Contingencies (Tables)
 3 Months Ended
Mar. 31, 2021
Commitments And Contingencies Disclosure [Abstract]  
Schedule of Additional Leases Information See below for additional information about the Company’s leases.

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

($ in thousands)

 

2021

 

 

2020

 

 

Supplemental Income Statement Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

 

7,154

 

 

$

 

6,365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

 

 

 

 

 

Net operating cash outflows for operating leases

 

$

 

5,980

 

 

$

 

5,299

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Right-of-use assets obtained in exchange for lease obligations (e.g. new leases and amendments commenced during the period):

 

$

 

321

 

 

$

 

2,414

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining lease term - operating leases

 

 

 

13.69

 

years

 

 

13.82

 

years

Weighted-average discount rate - operating leases

 

 

 

3.52

 

%

 

 

3.53

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 
Schedule of Future Sublease Income and Maturities of Our Operating Lease Liabilities

The future sublease income and maturities of our operating lease liabilities as of March 31, 2021, are as follows:

 

Fiscal year ended

 

Sublease Income

 

 

Operating Leases

 

Remainder of 2021

 

$

 

(689

)

 

$

 

14,323

 

2022

 

 

 

(919

)

 

 

 

24,214

 

2023

 

 

 

(919

)

 

 

 

20,971

 

2024

 

 

 

(919

)

 

 

 

19,085

 

2025

 

 

 

(459

)

 

 

 

16,326

 

Thereafter

 

 

 

-

 

 

 

 

177,587

 

Total Payments

 

$

 

(3,905

)

 

$

 

272,506

 

 

 

 

 

 

 

 

 

 

 

 

Less: Tenant improvement allowances

 

 

 

 

(18,440

)

Less: Present value adjustment

 

 

 

 

(60,190

)

Total

 

 

$

 

193,876

 
v3.21.1
Revenues and Business Information (Tables)
 3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
Schedule of Geographical Distribution of Revenues and Assets

 

 

Three Months Ended March 31,

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

United States

$

 

206,252

 

 

$

 

129,185

 

Europe

 

 

43,716

 

 

 

 

16,256

 

Rest of World

 

 

13,898

 

 

 

 

8,265

 

Total

$

 

263,866

 

 

$

 

153,706

 

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets:

 

 

 

 

 

 

 

 

 

 

United States

 

$

 

899,075

 

 

$

 

1,012,831

 

Europe

 

 

 

87,404

 

 

 

 

78,470

 

Rest of World

 

 

 

84,618

 

 

 

 

105,143

 

Total

 

$

 

1,071,097

 

 

$

 

1,196,444

 
v3.21.1
Summary of Significant Accounting Policies - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Mar. 31, 2020
Dec. 31, 2019
Cash and Cash Equivalents        
Cash $ 97,899 $ 83,472 $ 38,975  
Cash equivalents 57,503 119,005 85,183  
Restricted cash 1,081 807 597  
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 156,483 $ 203,284 $ 124,755 $ 168,572
v3.21.1
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Dec. 31, 2020
Jan. 01, 2020
Dec. 31, 2019
Accounting Policies [Line Items]          
Cash $ 97,899 $ 38,975 $ 83,472    
Cash equivalents 57,503 85,183 119,005    
Long-term receivables 21,774   19,603    
Interest income from long-term receivables 204 188      
Cumulative effect on retained earnings $ 460,580 352,556 444,473   $ 393,827
Assets and Liabilities, Lessee          
Percentage of tax benefits payable to partners under tax receivable agreement 85.00%        
Remaining percentage of cash savings realized by the Company (as a percent) 15.00%        
Revenue and Expense Recognition and Equity-Based Compensation          
Minimum age of retiring employees required so that certain qualifying awards granted during employment will not be forfeited 56 years        
Consecutive years of service of retiring employees required so that certain qualifying awards granted during employment will not be forfeited 5 years        
Minimum total age and consecutive years of service of retiring employees required so that certain qualifying awards granted during employment will not be forfeited 65 years        
Income Taxes          
Unrecognized tax benefits $ 0 0      
Retained Earnings          
Accounting Policies [Line Items]          
Cumulative effect on retained earnings $ (393,166) $ (378,817) $ (420,682)   (324,192)
Cumulative Effect Adjustment Upon Adoption          
Accounting Policies [Line Items]          
Cumulative effect on retained earnings         (364)
Cumulative Effect Adjustment Upon Adoption | Retained Earnings          
Accounting Policies [Line Items]          
Cumulative effect on retained earnings         $ (364)
ASU 2016-13 | Cumulative Effect Adjustment Upon Adoption, Before Tax | Retained Earnings          
Accounting Policies [Line Items]          
Cumulative effect on retained earnings       $ (459)  
ASU 2016-13 | Cumulative Effect Adjustment Upon Adoption, Tax | Retained Earnings          
Accounting Policies [Line Items]          
Cumulative effect on retained earnings       95  
ASU 2016-13 | Cumulative Effect Adjustment Upon Adoption | Retained Earnings          
Accounting Policies [Line Items]          
Cumulative effect on retained earnings       $ (364)  
Minimum          
Accounting Policies [Line Items]          
Installment Period 3 years        
Minimum | Office Equipment and Furniture and Fixtures          
Assets and Liabilities, Lessee          
Useful lives 3 years        
Maximum          
Accounting Policies [Line Items]          
Installment Period 4 years        
Maximum | Office Equipment and Furniture and Fixtures          
Assets and Liabilities, Lessee          
Useful lives 7 years        
v3.21.1
Summary of Significant Accounting Policies - Summary of Credit Loss Allowance Activity (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Financing Receivable Allowance For Credit Losses [Line Items]    
Allowance for Credit Losses, beginning balance $ 3,775  
Allowance for Credit Losses, adjusted beginning balance   $ 4,547
Charge-offs (741) (1,289)
Recoveries (1,126) (750)
Reduction to allowance (1,867) (2,039)
Provision for credit losses 4,275 1,268
Allowance for credit losses, ending balance 6,183 3,776
Previously Reported    
Financing Receivable Allowance For Credit Losses [Line Items]    
Allowance for Credit Losses, beginning balance   4,088
ASU 2016-13    
Financing Receivable Allowance For Credit Losses [Line Items]    
Allowance for Credit Losses, beginning balance   459
Short-term Receivables    
Financing Receivable Allowance For Credit Losses [Line Items]    
Allowance for Credit Losses, beginning balance 3,577  
Allowance for Credit Losses, adjusted beginning balance   4,348
Charge-offs (741) (1,289)
Recoveries (1,126) (724)
Reduction to allowance (1,867) (2,013)
Provision for credit losses 4,253 1,216
Allowance for credit losses, ending balance 5,963 3,551
Short-term Receivables | Previously Reported    
Financing Receivable Allowance For Credit Losses [Line Items]    
Allowance for Credit Losses, beginning balance   4,088
Short-term Receivables | ASU 2016-13    
Financing Receivable Allowance For Credit Losses [Line Items]    
Allowance for Credit Losses, beginning balance   260
Private Funds Advisory Receivables    
Financing Receivable Allowance For Credit Losses [Line Items]    
Allowance for Credit Losses, beginning balance 198  
Allowance for Credit Losses, adjusted beginning balance   199
Recoveries   (26)
Reduction to allowance   (26)
Provision for credit losses 22 52
Allowance for credit losses, ending balance $ 220 225
Private Funds Advisory Receivables | ASU 2016-13    
Financing Receivable Allowance For Credit Losses [Line Items]    
Allowance for Credit Losses, beginning balance   $ 199
v3.21.1
Fixed and Intangible Assets - Schedule of Equipment and Leasehold Improvements, Net (Details) - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Equipment and Leasehold Improvements, Net    
Total $ 78,441 $ 74,905
Less accumulated depreciation and amortization (26,374) (24,928)
Equipment and leasehold improvements, net 52,067 49,977
Office Equipment    
Equipment and Leasehold Improvements, Net    
Total 13,286 13,267
Furniture and Fixtures    
Equipment and Leasehold Improvements, Net    
Total 10,529 10,409
Leasehold Improvements    
Equipment and Leasehold Improvements, Net    
Total 36,548 36,286
Construction in progress    
Equipment and Leasehold Improvements, Net    
Total $ 18,078 $ 14,943
v3.21.1
Fixed and Intangible Assets - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Equipment and Leasehold Improvements, Net    
Depreciation and amortization expenses $ 1,449 $ 1,199
Prepaid Expenses and Other Assets    
Equipment and Leasehold Improvements, Net    
Costs capitalized 2,493  
Communication, Technology and Information Services    
Equipment and Leasehold Improvements, Net    
Amortization expense of capitalized costs $ 122 $ 0
v3.21.1
Investments - Summary of the Levels of the Fair Value Hierarchy into Which the Company's Financial Assets Fall (Details) - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Fair value measurements    
Total financial assets $ 129,765 $ 291,676
U.S. Treasury Instruments    
Fair value measurements    
Cash and cash equivalents 17,000 15,599
Investments in securities 72,262 172,671
Money Market Securities    
Fair value measurements    
Cash and cash equivalents 40,503 103,406
Level 2    
Fair value measurements    
Total financial assets 129,765 291,676
Level 2 | U.S. Treasury Instruments    
Fair value measurements    
Cash and cash equivalents 17,000 15,599
Investments in securities 72,262 172,671
Level 2 | Money Market Securities    
Fair value measurements    
Cash and cash equivalents $ 40,503 $ 103,406
v3.21.1
Investments - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 04, 2021
Feb. 17, 2021
Mar. 04, 2020
Feb. 19, 2020
Mar. 31, 2021
Mar. 31, 2020
Dec. 31, 2021
Dec. 31, 2020
Apr. 01, 2010
Schedule of Investments                  
Investments at fair value, cost basis         $ 72,258     $ 172,640  
Dividends received         2,279 $ 1,942      
Equity method investments         38,754     38,143  
Corporate Joint Venture                  
Schedule of Investments                  
Ownership percentage                 50.00%
Dividends received $ 2,279 $ 2,279 $ 1,942 $ 1,942          
Common Stock                  
Schedule of Investments                  
Unrealized gain (loss) on equity securities           $ (25)      
Atlas Crest I                  
Schedule of Investments                  
Investments at fair value, cost basis         $ 7,427     $ 887  
Atlas Crest II | Subsequent Event                  
Schedule of Investments                  
Investments at fair value, cost basis             $ 660    
Atlas Crest III | Subsequent Event                  
Schedule of Investments                  
Investments at fair value, cost basis             2,788    
Atlas Crest IV | Subsequent Event                  
Schedule of Investments                  
Investments at fair value, cost basis             1,960    
Atlas Crest V | Subsequent Event                  
Schedule of Investments                  
Investments at fair value, cost basis             $ 1,132    
v3.21.1
Net Income (Loss) Per Share Attributable to Class A Common Shareholders - Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Numerator:    
Net income (loss) attributable to holders of shares of Class A common stock—basic $ 66,529 $ 25,130
Class A Common Stock    
Numerator:    
Net income (loss) attributable to holders of shares of Class A common stock—basic 66,529 25,130
Add (deduct) dilutive effect of:    
Net income (loss) attributable to holders of shares of Class A common stock—diluted $ 66,529 $ 25,130
Denominator:    
Weighted average shares of Class A common stock outstanding—basic 60,932,966 52,666,457
Add (deduct) dilutive effect of:    
Weighted average number of incremental shares issuable from unvested RSUs and stock options, as calculated using the treasury stock method 5,427,251 4,426,525
Weighted average shares of Class A common stock outstanding—diluted 66,360,217 57,092,982
Net income (loss) per share attributable to holders of shares of Class A common stock    
Basic (in dollars per share) $ 1.09 $ 0.48
Diluted (in dollars per share) $ 1.00 $ 0.44
v3.21.1
Net Income (Loss) Per Share Attributable to Class A Common Shareholders - Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share (Parenthetical) (Details) - Class A Common Stock - shares
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Earnings Per Share Basic [Line Items]    
Number of shares of common stock to be issued upon exchange of a partnership unit 1  
Fully diluted shares of common stock outstanding if all Class A partnership units were to be exchanged for common stock immediately following the reorganization 74,625,284 70,051,004
Restricted Stock and RSUs    
Earnings Per Share Basic [Line Items]    
Number of antidilutive securities excluded from calculation of diluted income (loss) per share 1,539 1,613,603
v3.21.1
Equity-Based Compensation - Additional Information (Details) - USD ($)
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 84 Months Ended
Apr. 30, 2014
Mar. 31, 2021
Mar. 31, 2020
Sep. 30, 2020
Dec. 31, 2014
Mar. 31, 2021
Dec. 31, 2020
Apr. 30, 2020
Feb. 28, 2019
Nov. 09, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                    
Compensation expenses   $ 50,963,000 $ 38,225,000              
Pre IPO Partnership Units                    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                    
Compensation expenses   0 30,000              
RSUs and Other Stock-based Awards                    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                    
Total compensation expense not yet recognized   $ 221,171,000       $ 221,171,000        
Weighted average period to recognize compensation expense   2 years 2 months 12 days                
RSUs and Other Stock-based Awards | Minimum                    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                    
Vesting period       4 years            
RSUs and Other Stock-based Awards | Maximum                    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                    
Vesting period       5 years            
Stock Options                    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                    
Compensation expenses   $ 0 $ 0              
Vesting period         5 years          
Grants (in shares) 3,501,881                  
Special dividends paid (in dollars per share)           $ 9.05        
Reduction to exercise price of options outstanding due to special dividend paid (in dollars per share)           9.05        
Exercise price (in dollars per share)   $ 15.95       $ 15.95 $ 15.95     $ 25.00
Stock options outstanding   6,500       6,500 728,534 0    
Class A Common Stock                    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                    
Number of shares of common stock to be issued upon exchange of a partnership unit   1       1        
Class A Common Stock | Share Repurchase Plan                    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                    
Share value authorized for repurchase                 $ 100,000,000  
Value of remaining shares authorized for repurchase   $ 73,601,000,000       $ 73,601,000,000        
v3.21.1
Equity-Based Compensation - Summary of Activity Related to RSUs and Other Stock-based Awards (Details) - RSUs and Other Stock-based Awards - $ / shares
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Number of Shares    
Unvested Balance at the beginning of the period 8,742,695 8,414,130
Granted 3,100,355 3,585,725
Forfeited (34,974) (48,512)
Vested (3,689,539) (2,894,992)
Unvested Balance at the end of the period 8,118,537 9,056,351
Weighted Average Grant Date Fair Value    
Unvested Balance at the beginning of the period $ 41.45 $ 42.19
Granted 54.74 37.93
Forfeited 48.44 37.00
Vested 42.86 38.67
Unvested Balance at the end of the period $ 46.43 $ 41.53
v3.21.1
Equity-Based Compensation - Schedule of Assumptions Used to Estimate the Fair Value of Stock Option Using Black-Scholes Valuation Model (Details)
 3 Months Ended
Mar. 31, 2021
$ / shares
Assumptions Used to Estimate Fair Value  
Expected life (in years) 6 years
Weighted-average risk free interest rate 1.91%
Expected volatility 35.00%
Dividend yield 2.72%
Weighted-average fair value at grant date $ 6.70
v3.21.1
Equity-Based Compensation - Summary of Activity Related to Stock Options (Details) - Stock Options
 3 Months Ended
Mar. 31, 2021
$ / shares
shares
Number Outstanding  
Outstanding at January 1, | shares 728,534
Exercises | shares (722,034)
Outstanding at March 31, | shares 6,500
Weighted-Average Exercise Price Per Share  
Outstanding at January 1, | $ / shares $ 15.95
Exercises | $ / shares 15.95
Outstanding at March 31, | $ / shares $ 15.95
v3.21.1
Stockholders Equity - Additional Information (Details)
$ in Thousands
 1 Months Ended 3 Months Ended
Nov. 30, 2014
Apr. 30, 2014
shares
Mar. 31, 2021
USD ($)
shares
Mar. 31, 2020
USD ($)
shares
Dec. 31, 2020
shares
Class Of Stock [Line Items]          
Treasury stock, shares     5,323,017   3,959,083
Treasury stock shares acquired (in shares)     1,363,934 869,779  
Treasury stock shares acquired | $     $ 74,211 $ 31,636  
Number of units held by noncontrolling interest holders     7,855,398   8,508,857
Group LP          
Class Of Stock [Line Items]          
Noncontrolling interests (as a percent)     11.00%   13.00%
Class A Common Stock          
Class Of Stock [Line Items]          
Aggregate stock issuance (in shares)   15,263,653      
Increase in shares outstanding   24,923,349      
Common stock, shares issued     66,648,561   61,986,927
Treasury stock, shares     5,323,017   3,959,083
Common stock, shares outstanding     61,325,544   58,027,844
Number of shares of common stock to be issued upon exchange of a partnership unit     1    
Class A Common Stock | Group LP          
Class Of Stock [Line Items]          
Common stock, shares outstanding     61,325,544   58,027,844
Class B Common Stock          
Class Of Stock [Line Items]          
Increase in shares outstanding   36,158,698      
Common stock, shares issued     4,899,457   5,948,750
Common stock, shares outstanding     4,899,457   5,948,750
Ratio of subscription price to the initial public offering price of shares of common stock 0.00055        
Dividends payable ratio to outstanding shares of publicly traded common stock 0.00055        
Stock purchased     24,919,744    
Purchase cost | $     $ 550    
v3.21.1
Related-Party Transactions - Additional Information (Details) - USD ($)
 1 Months Ended 3 Months Ended 12 Months Ended
Feb. 28, 2021
Mar. 31, 2021
Mar. 31, 2020
Dec. 31, 2020
Related-party transactions        
Principal repayments   $ 70,000    
Manager | Aircraft Lease Entered into During August 2014        
Related-party transactions        
Expenses   324,000 $ 324,000  
Employees        
Related-party transactions        
Unsecured promissory notes from employees   319,000 389,000  
Employees | Unsecured Promissory Notes        
Related-party transactions        
Principal repayments   70,000 0  
Interest income recognized   $ 5,000 2,000  
Employees | Minimum | Unsecured Promissory Notes        
Related-party transactions        
Interest rates (as a percent)   3.00%    
Employees | Maximum | Unsecured Promissory Notes        
Related-party transactions        
Interest rates (as a percent)   4.00%    
Moelis Asset Management LP        
Related-party transactions        
Fee for services   $ 57,000 110,000  
Due from related party   0 0  
Revenue from related parties   0 $ 0  
Atlas Crest I        
Related-party transactions        
Fee for services   50,000    
Due from related party   0   $ 0
Atlas Crest I        
Related-party transactions        
Fee for services       10,000
Atlas Crest II        
Related-party transactions        
Fee for services $ 10,000      
Corporate Joint Venture        
Related-party transactions        
Due to related party   $ 5,000   $ 5,000
v3.21.1
Regulatory Requirements - Additional Information (Details) - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Regulatory Requirements    
Minimum net capital requirement $ 250  
Moelis US    
Regulatory Requirements    
Net capital 101,232 $ 96,800
Net capital in excess of required net capital $ 100,982 $ 96,550
v3.21.1
Commitments and Contingencies - Additional Information (Details) - USD ($)
 3 Months Ended
Apr. 20, 2020
Mar. 31, 2021
Dec. 31, 2020
Bank line of credit      
Available credit under the facility   $ 60,507,000  
Revolving Credit Facility      
Bank line of credit      
Fixed rate of interest (as a percent)   3.50%  
Borrowings under the credit facility   $ 0 $ 0
Standby Letters of Credit      
Bank line of credit      
Letters of credit outstanding   $ 4,493,000  
Fee on the outstanding balances (as a percent)   1.00%  
LIBOR | Revolving Credit Facility      
Bank line of credit      
Interest rate margin (as a percent)   1.00%  
Reference rate (as a percent)   LIBOR  
Prime | Revolving Credit Facility      
Bank line of credit      
Interest rate margin (as a percent)   (1.50%)  
Reference rate (as a percent)   Prime  
Secured Bank Line of Credit      
Bank line of credit      
Commitment amount $ 65,000,000    
Minimum Days To Issues Termination Notice 60 days    
v3.21.1
Commitments and Contingencies - Schedule of Additional Leases Information (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Supplemental Income Statement Information:    
Operating lease cost $ 7,154 $ 6,365
Cash paid for amounts included in the measurement of lease liabilities:    
Net operating cash outflows for operating leases 5,980 5,299
Right-of-use assets obtained in exchange for lease obligations (e.g. new leases and amendments commenced during the period): $ 321 $ 2,414
Other Information    
Weighted-average remaining lease term - operating leases 13 years 8 months 8 days 13 years 9 months 25 days
Weighted-average discount rate - operating leases 3.52% 3.53%
v3.21.1
Commitments and Contingencies - Schedule of Future Minimum Rental Payments Required Under Operating Leases in Place (Details) - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Sublease Income    
Remainder of 2021 $ (689)  
2022 (919)  
2023 (919)  
2024 (919)  
2025 (459)  
Total Payments (3,905)  
Operating Leases    
Remainder of 2021 14,323  
2022 24,214  
2023 20,971  
2024 19,085  
2025 16,326  
Thereafter 177,587  
Total Payments 272,506  
Less: Tenant improvement allowances (18,440)  
Less: Present value adjustment (60,190)  
Operating Lease, Liability $ 193,876 $ 196,614
v3.21.1
Employee Benefit Plans - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Compensation And Retirement Disclosure [Abstract]    
Minimum age required to be eligible to participate in the 401(k) plan 21 years  
Expenses accrued relating to employer matching contributions $ 715 $ 696
v3.21.1
Income Taxes - Additional Information (Details) - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended
Feb. 28, 2021
Mar. 31, 2021
Mar. 31, 2020
Income Tax Disclosure [Abstract]      
Provision (benefit) for income taxes   $ (176) $ (7,344)
Effective tax rate (as a percent)   (0.20%) (32.20%)
Excess tax benefits   $ 17,542 $ 7,337
Increase in the net deferred tax asset $ 19,392    
Percentage of portion of deferred tax asset payable to exchanging partners 85.00%    
Portion of deferred tax asset payable to exchanging partners $ 16,483    
Portion of deferred tax asset payable to exchanging partners, period 15 years    
v3.21.1
Revenues and Business Information - Schedule of Geographical Distribution of Revenues and Assets (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Dec. 31, 2020
Revenues From External Customers And Long Lived Assets [Line Items]      
Revenues $ 263,866 $ 153,706  
Total assets 1,071,097   $ 1,196,444
United States      
Revenues From External Customers And Long Lived Assets [Line Items]      
Revenues 206,252 129,185  
Total assets 899,075   1,012,831
Europe      
Revenues From External Customers And Long Lived Assets [Line Items]      
Revenues 43,716 16,256  
Total assets 87,404   78,470
Rest of World      
Revenues From External Customers And Long Lived Assets [Line Items]      
Revenues 13,898 $ 8,265  
Total assets $ 84,618   $ 105,143
v3.21.1
Revenues and Business Information - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2021
Dec. 31, 2020
Segment Reporting [Abstract]    
Deferred revenue $ 8,105 $ 2,692
Revenues recognized from opening balance of deferred revenues $ 1,682  
v3.21.1
Subsequent Events - Additional Information (Details) - Subsequent Event
Apr. 27, 2021
$ / shares
Subsequent Event [Line Items]  
Special dividends paid (in dollars per share) $ 2.00
Regular quarterly dividend declared 0.55
Dividends declared per share $ 2.55
Dividend payable date Jun. 18, 2021
Dividend payable record date May 10, 2021