UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM ~~10‑Q~~10-Q

(Mark One)


~~(Mark One)~~☒
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


~~For the quarterly period ended September 30, 2017~~
Or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
~~For the transition period from to~~

For the transition period from to

Commission File Number: ~~001‑36418~~001-36418

Moelis & ~~Company~~Company

(Exact name of registrant as specified in its charter)


Delaware		46-4500216
~~Delaware~~ (State or other jurisdiction of incorporation or organization)	~~46‑4500216~~	(I.R.S. Employer Identification No.)
399 Park Avenue ~~5th~~, 4th Floor, New YorkNY		10022
(Address of principal executive offices)	~~10022~~	(Zip Code)

~~(212) 883‑3800~~(212) 883-3800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title	Trading Symbol	Name of Exchange on which registered
Class A Common Stock	MC	New York Stock Exchange (NYSE)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:


Large accelerated filer	☒		Accelerated filer	☐
~~Large accelerated~~Non-accelerated filer ☐	~~Accelerated filer ☒~~☐	Non‑accelerated filer ☐ (Do not check if a smaller reporting company)	Smaller reporting company ☐	☐
Emerging growth company ☒	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☒☐

Indicate by check mark whether the registrant is a shell company (as defined in rule ~~12b‑2~~12b-2 of the Exchange Act). ☐ Yes ☒ No

As of ~~October 19, 2017,~~April 14, 2022, there were ~~33,297,858~~64,827,108 shares of Class A common stock, par value $0.01 per share, and ~~20,045,736~~4,685,898 shares of Class B common stock, par value $0.01 per share, outstanding.

~~Table of Contents~~

TABLE OF CONTENTS

~~Table of Contents~~

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Financial Statements (Unaudited)


		Page
	~~Page~~
Condensed Consolidated Statements of Financial Condition as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021		4
Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021		5
Condensed Consolidated Statements of Comprehensive Income for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021		6
Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021		7
Condensed Consolidated Statements of Changes in Equity for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021		8
Notes to Condensed Consolidated Financial Statements		9

~~Table of Contents~~

Moelis & Company

Condensed Consolidated Statements of Financial Condition

(Unaudited)

(dollars in thousands, except per share amounts)

September 30,

December 31,

2017

2016

Assets

Cash and cash equivalents

$
127,600

$
318,926

Restricted cash

789

659

Receivables:

Accounts receivable, net of allowance for doubtful accounts of $1,500 and $475 as of September 30, 2017 and December 31, 2016, respectively

50,540

23,158

Other receivables

11,863

7,293

Total receivables

62,403

30,451

Deferred compensation

9,113

8,701

Investments at fair value (cost basis $116,531 and $33,593 as of September 30, 2017 and December 31, 2016, respectively)

116,366

33,383

Equity method investments

45,734

20,873

Equipment and leasehold improvements, net

10,345

8,397

Deferred tax asset

405,730

167,791

Prepaid expenses and other assets

17,009

9,619

Total assets

$
795,089

$
598,800

Liabilities and Equity

Compensation payable

$
110,741

$
131,591

Accounts payable and accrued expenses

9,768

14,326

Dividends payable

—

68,066

Amount due pursuant to tax receivable agreement

314,747

120,936

Deferred revenue

3,848

2,971

Other liabilities

8,913

9,469

Total liabilities

448,017

347,359

Commitments and Contingencies (See Note 12)

Class A common stock, par value $0.01 per share (1,000,000,000 shares authorized, 33,899,875 issued and 33,247,275 outstanding at September 30, 2017; 1,000,000,000 authorized, 20,948,998 issued and 20,561,108 outstanding at December 31, 2016)

339

210

Class B common stock, par value $0.01 per share (1,000,000,000 shares authorized, 20,045,736 issued and outstanding at September 30, 2017; 1,000,000,000 authorized, 31,138,193 issued and outstanding at December 31, 2016)

200

311

Treasury stock, at cost; 652,600 and 387,890 shares as of September 30, 2017 and December 31, 2016, respectively

(20,762)

(10,930)

Additional paid-in-capital

454,745

291,026

Retained earnings (accumulated deficit)

(99,136)

(68,229)

Accumulated other comprehensive income (loss)

543

(543)

Total Moelis & Company equity

335,929

211,845

Noncontrolling interests

11,143

39,596

Total equity

347,072

251,441

Total liabilities and equity

$
795,089

$
598,800


	March 31,		December 31,
	2022		2021
Assets
Cash and cash equivalents	$	130,420	$	520,213
Restricted cash		635		801
Receivables:
Accounts receivable, net of allowance for credit losses of $2,281 and $2,823 as of March 31, 2022 and December 31, 2021, respectively		39,273		41,870
Accrued and other receivables		15,372		27,698
Total receivables		54,645		69,568
Deferred compensation		22,346		11,499
Investments		228,346		263,341
Right-of-use assets		160,137		164,083
Equipment and leasehold improvements, net		59,583		59,163
Deferred tax assets		422,636		448,123
Prepaid expenses and other assets		18,531		18,890
Total assets	$	1,097,279	$	1,555,681
Liabilities and Equity
Compensation payable	$	99,953	$	503,707
Accounts payable, accrued expenses and other liabilities		52,316		69,883
Amount due pursuant to tax receivable agreement		307,115		307,363
Deferred revenue		5,573		4,539
Lease liabilities		187,407		191,890
Total liabilities		652,364		1,077,382
Commitments and Contingencies (See Note 11)
Class A common stock, par value $0.01 per share (1,000,000,000 shares authorized, 71,824,917 issued and 63,930,282 outstanding at March 31, 2022; 1,000,000,000 authorized, 68,518,779 issued and 62,645,599 outstanding at December 31, 2021)		718		685
Class B common stock, par value $0.01 per share (1,000,000,000 shares authorized, 4,685,898 issued and outstanding at March 31, 2022; 1,000,000,000 authorized, 4,686,344 issued and outstanding at December 31, 2021)		47		47
Treasury stock, at cost; 7,894,635 and 5,873,180 shares at March 31, 2022 and December 31, 2021, respectively		(354,249)		(256,320)
Additional paid-in-capital		1,306,290		1,280,498
Retained earnings (accumulated deficit)		(514,502)		(535,282)
Accumulated other comprehensive income (loss)		(1,247)		(560)
Total Moelis & Company equity		437,057		489,068
Noncontrolling interests		7,858		(10,769)
Total equity		444,915		478,299
Total liabilities and equity	$	1,097,279	$	1,555,681

See notes to the condensed consolidated financial statements (unaudited).

~~Table of Contents~~

Moelis & Company

Condensed Consolidated Statements of Operations

(Unaudited)

(dollars in thousands, except per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,


2017

2016

2017

2016
Revenues

$
170,041

$
150,676

$
515,448

$
408,765
Expenses

Compensation and benefits

99,694

88,046

302,228

240,912
Occupancy

4,393

4,096

12,670

14,941
Professional fees

4,494

2,804

13,674

7,551
Communication, technology and information services

6,427

5,496

18,636

16,101
Travel and related expenses

7,294

4,490

21,990

16,452
Depreciation and amortization

891

817

2,570

2,359
Other expenses

6,969

4,813

18,059

10,885
Total expenses

130,162

110,562

389,827

309,201
Operating income (loss)

39,879

40,114

125,621

99,564
Other income and (expenses)

14,955

187

32,888

391
Income (loss) from equity method investments

2,791

1,562

4,565

3,897
Income (loss) before income taxes

57,625

41,863

163,074

103,852
Provision for income taxes

14,354

6,550

30,900

16,715
Net income (loss)

43,271

35,313

132,174

87,137
Net income (loss) attributable to noncontrolling interests

24,066

25,824

77,961

63,785
Net income (loss) attributable to Moelis & Company

$
19,205

$
9,489

$
54,213

$
23,352
Weighted-average shares of Class A common stock outstanding

Basic

32,505,940

20,926,745

29,094,514

20,807,189
Diluted

39,784,633

24,301,063

35,872,847

23,516,239
Net income (loss) per share attributable to holders of shares of Class A common stock

Basic

$
0.59

$
0.45

$
1.86

$
1.12
Diluted

$
0.48

$
0.39

$
1.51

$
0.99
Dividends declared per share of Class A common stock

$
0.37

$
0.32

$
2.11

$
1.72


	Three Months Ended March 31,
	2022		2021
Revenues	$	302,088	$	263,866
Expenses
Compensation and benefits		176,637		156,499
Occupancy		5,810		7,695
Professional fees		4,315		5,999
Communication, technology and information services		8,779		8,659
Travel and related expenses		7,643		1,610
Depreciation and amortization		2,039		1,449
Other expenses		7,438		9,512
Total expenses		212,661		191,423
Operating income (loss)		89,427		72,443
Other income and (expenses)		(2,235)		3,179
Income (loss) before income taxes		87,192		75,622
Provision (benefit) for income taxes		13,598		(176)
Net income (loss)		73,594		75,798
Net income (loss) attributable to noncontrolling interests		7,879		9,269
Net income (loss) attributable to Moelis & Company	$	65,715	$	66,529
Weighted-average shares of Class A common stock outstanding
Basic		64,824,347		60,932,966
Diluted		70,000,473		66,360,217
Net income (loss) per share attributable to holders of shares of Class A common stock
Basic	$	1.01	$	1.09
Diluted	$	0.94	$	1.00

See notes to the condensed consolidated financial statements (unaudited).

~~Table of Contents~~

Moelis & Company

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(dollars in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,


2017

2016

2017

2016

Net income

$
43,271

$
35,313

$
132,174

$
87,137

Unrealized gain (loss) on investments

(39)

(148)

(144)

(105)

Foreign currency translation adjustment, net of tax

991

(668)

2,378

(1,368)

Other comprehensive income (loss)

952

(816)

2,234

(1,473)

Comprehensive income (loss)

44,223

34,497

134,408

85,664

Less: Comprehensive income attributable to noncontrolling interests

24,549

25,312

79,109

62,864

Comprehensive income (loss) attributable to Moelis & Company

$
19,674

$
9,185

$
55,299

$
22,800


	Three Months Ended March 31,
	2022			2021
Net income (loss)	$	73,594		$	75,798
Foreign currency translation adjustment, net of tax		(764	)		(744	)
Other comprehensive income (loss)		(764	)		(744	)
Comprehensive income (loss)		72,830			75,054
Less: Comprehensive income (loss) attributable to noncontrolling interests		7,802			9,180
Comprehensive income (loss) attributable to Moelis & Company	$	65,028		$	65,874

See notes to the condensed consolidated financial statements (unaudited).

~~Table of Contents~~

Moelis & Company

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(dollars in thousands)

Nine Months Ended September 30,

2017

2016

Cash flows from operating activities

Net income (loss)

$
132,174

$
87,137

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Bad debt expense

1,521

124

Depreciation and amortization

2,570

2,359

(Income) loss from equity method investments

(4,565)

(3,897)

Equity-based compensation

72,912

56,313

Deferred tax provision

13,746

(1,931)

Gain on equity method investment

(31,971)

—

Other

4,067

700

Changes in assets and liabilities:

Accounts receivable

(28,588)

2,763

Other receivables

(4,594)

1,234

Prepaid expenses and other assets

(7,079)

1,432

Deferred compensation

(321)

(841)

Compensation payable

(21,644)

(53,017)

Accounts payable and accrued expenses

(4,864)

(7,664)

Deferred revenue

876

6,324

Dividends received

11,672

804

Other liabilities

(628)

2,075

Net cash provided by (used in) operating activities

135,284

93,915

Cash flows from investing activities

Purchase of investments

(171,764)

(95,919)

Proceeds from sales of investments

88,750

101,000

Return of capital from equity method investments

—

9

Note payments received from employees

705

—

Notes issued to employees

(400)

(852)

Purchase of equipment and leasehold improvements

(4,553)

(2,737)

Change in restricted cash

(85)

(30)

Net cash provided by (used in) investing activities

(87,347)

1,471

Cash flows from financing activities

Dividends and distributions

(232,284)

(135,751)

Payments under tax receivable agreement

(5,032)

—

Payments to settle employee tax obligations on share-based awards

(9,832)

(2,621)

Proceeds from exercise of stock options

5,571

—

Class A partnership units and other equity purchased

(229)

—

Net cash provided by (used in) financing activities

(241,806)

(138,372)

Effect of exchange rate fluctuations on cash and cash equivalents

2,543

(2,425)

Net increase (decrease) in cash and cash equivalents

(191,326)

(45,411)

Cash and cash equivalents, beginning of period

318,926

248,022

Cash and cash equivalents, end of period

$
127,600

$
202,611

Supplemental cash flow disclosure:

Cash paid during the period for:

Income taxes

$
26,196

$
20,609

Dividends paid, declared in the prior year

$
68,066

$
—

Other non-cash activity

Dividend equivalents issued

$
20,911

$
10,276

Class A Partnership Units or other equity converted into Class A Common Stock

$
52,240

$
783

Cumulative Effect Adjustment upon Adoption of ASU 2016-09

$
658

$
—

Forfeiture of fully-vested Group LP units or other equity units

$
36

$
—


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities
Net income (loss)	$	73,594	$	75,798
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Bad debt expense (benefit)		(288)		3,149
Depreciation and amortization		2,039		1,449
Equity-based compensation		37,067		50,963
Deferred tax provision		25,973		21,245
Other		3,192		(2,615)
Changes in assets and liabilities:
Accounts receivable		2,643		14,401
Accrued and other receivables		11,957		(32,589)
Prepaid expenses and other assets		463		(587)
Deferred compensation		(10,957)		(3,660)
Compensation payable		(403,408)		(160,178)
Accounts payable, accrued expenses and other liabilities		(17,798)		1,969
Deferred revenue		1,040		5,409
Dividends received		2,029		2,279
Net cash provided by (used in) operating activities		(272,454)		(22,967)
Cash flows from investing activities
Purchases of investments		(117,432)		(78,723)
Proceeds from sales of investments		147,250		173,046
Note payments received from (issued to) employees		—		70
Purchases of equipment and leasehold improvements		(2,458)		(3,539)
Net cash provided by (used in) investing activities		27,360		90,854
Cash flows from financing activities
Payments for dividends and tax distributions		(45,647)		(39,685)
Payments for treasury stock purchases		(97,929)		(74,211)
Payments under tax receivable agreement		(248)		—
Other proceeds		100		—
Net cash provided by (used in) financing activities		(143,724)		(113,896)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash		(1,141)		(792)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(389,959)		(46,801)
Cash, cash equivalents, and restricted cash, beginning of period		521,014		203,284
Cash, cash equivalents, and restricted cash, end of period	$	131,055	$	156,483
Supplemental cash flow disclosure:
Cash paid during the period for:
Income taxes, net	$	7,165	$	1,913
Other non-cash activity
Class A Partnership Units or other equity converted into Class A Common Stock	$	150	$	3,903
Dividends in kind	$	5,572	$	5,131
Forfeiture of fully-vested Group LP units or other equity units	$	—	$	25

See notes to the condensed consolidated financial statements (unaudited).

~~Table of Contents~~

Moelis & Company

Condensed Consolidated Statements of Changes in Equity

(Unaudited)

(dollars in ~~thousands)~~thousands, except share amounts)


	Shares																		Retained			Accumulated
	Class A		Class B						Class A		Class B					Additional			Earnings			Other
	Common		Common			Treasury			Common		Common		Treasury			Paid-In			(Accumulated			Comprehensive			Noncontrolling			Total
	Stock		Stock			Stock			Stock		Stock		Stock			Capital			Deficit)			Income (Loss)			Interests			Equity
Balance as of January 1, 2022		68,518,779		4,686,344			(5,873,180	)	$	685	$	47	$	(256,320	)	$	1,280,498		$	(535,282	)	$	(560	)	$	(10,769	)	$	478,299
Net income (loss)		—		—			—			—		—		—			—			65,715			—			7,879			73,594
Equity-based compensation		3,305,692		—			—			33		—		—			20,949			—			—			16,085			37,067
Other comprehensive income (loss)		—		—			—			—		—		—			—			—			(687	)		(77	)		(764	)
Dividends declared ($0.60 per share of Class A common stock) and tax distributions		—		—			—			—		—		—			5,572			(44,935	)		—			(6,284	)		(45,647	)
Treasury Stock Purchases		—		—			(2,021,455	)		—		—		(97,929	)		—			—			—			—			(97,929	)
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges		446		(446	)		—			—		—		—			(774	)		—			—			924			150
Equity-based payments to non-employees		—		—			—			—		—		—			45			—			—			—			45
Other		—		—			—			—		—		—			—			—			—			100			100
Balance as of March 31, 2022		71,824,917		4,685,898			(7,894,635	)	$	718	$	47	$	(354,249	)	$	1,306,290		$	(514,502	)	$	(1,247	)	$	7,858		$	444,915


	Shares																			Retained			Accumulated
	Class A		Class B						Class A		Class B						Additional			Earnings			Other
	Common		Common			Treasury			Common		Common			Treasury			Paid-In			(Accumulated			Comprehensive			Noncontrolling			Total
	Stock		Stock			Stock			Stock		Stock			Stock			Capital			Deficit)			Income (Loss)			Interests			Equity
Balance as of January 1, 2021		61,986,927		5,948,750			(3,959,083	)	$	620	$	59		$	(152,170	)	$	1,052,322		$	(420,682	)	$	(201	)	$	(35,475	)	$	444,473
Net income (loss)		—		—			—			—		—			—			—			66,529			—			9,269			75,798
Equity-based compensation		3,612,341		—			—			36		—			—			41,508			—			—			9,419			50,963
Other comprehensive income (loss)		—		—			—			—		—			—			—			—			(655	)		(89	)		(744	)
Dividends declared ($0.55 per share of Class A Common Stock) and tax distributions		—		—			—			—		—			—			5,131			(39,013	)		—			(5,803	)		(39,685	)
Treasury Stock Purchases		—		—			(1,363,934	)		—		—			(74,211	)		—			—			—			—			(74,211	)
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges		1,049,293		(1,049,293	)		—			10		(10	)		—			2,161			—			—			1,742			3,903
Equity-based payments to non-employees		—		—			—			—		—			—			108			—			—			—			108
Other		—		—			—			—		—			—			(25	)		—			—			—			(25	)
Balance as of March 31, 2021		66,648,561		4,899,457			(5,323,017	)	$	666	$	49		$	(226,381	)	$	1,101,205		$	(393,166	)	$	(856	)	$	(20,937	)	$	460,580

See notes to the condensed consolidated financial statements (unaudited).

Moelis & Company

Notes to the Condensed Consolidated Financial Statements

(dollars in thousands, except share amounts and where explicitly stated)

Shares

Retained

Accumulated

Class A

Class B

Class A

Class B

Additional

Earnings

Other

Common

Common

Treasury

Common

Common

Treasury

Paid-In

(Accumulated

Comprehensive

Noncontrolling

Total


Stock

Stock

Stock

Stock

Stock

Stock

Capital

Deficit)

Income (Loss)

Interests

Equity
Balance as of January 1, 2017

20,948,998

31,138,193

(387,890)

$
210

$
311

$
(10,930)

$
291,026

$
(68,229)

$
(543)

$
39,596

$
251,441
Cumulative Effect Adjustment upon Adoption of ASU 2016-09

—

—

—

—

—

—

4,855

(4,197)

—

—

658
Balance as of January 1, 2017, as adjusted

20,948,998

31,138,193

(387,890)

$
210

$
311

$
(10,930)

$
295,881

$
(72,426)

$
(543)

$
39,596

$
252,099
Net income (loss)

—

—

—

—

—

—

—

54,213

—

77,961

132,174
Equity-based compensation

1,602,236

—

—

16

—

—

71,228

—

—

1,668

72,912
Other comprehensive income (loss)

—

—

—

—

—

—

—

—

1,086

1,148

2,234
Dividends declared ($2.11 per share of Class A Common Stock) and distributions

—

—

—

—

—

—

20,911

(80,923)

—

(104,206)

(164,218)
Treasury Stock Purchases

—

—

(264,710)

—

—

(9,832)

—

—

—

—

(9,832)
Exercise of stock options

256,270

—

—

2

—

—

5,569

—

—

—

5,571
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges

11,092,457

(11,092,457)

—

111

(111)

—

57,035

—

—

(5,024)

52,011
Equity-based payments to non-employees

—

—

—

—

—

—

4,066

—

—

—

4,066
Other

(86)

—

—

—

—

—

55

—

—

—

55
Balance as of September 30, 2017

33,899,875

20,045,736

(652,600)

$
339

$
200

$
(20,762)

$
454,745

$
(99,136)

$
543

$
11,143

$
347,072
Balance as of January 1, 2016

20,536,740

31,229,236

(263,622)

$
205

$
312

$
(7,616)

$
190,703

$
(15,338)

$
108

$
89,044

$
257,418
Net income (loss)

—

—

—

—

—

—

—

23,352

—

63,785

87,137
Equity-based compensation

253,757

(2,132)

—

3

—

—

53,934

—

—

2,376

56,313
Other comprehensive income (loss)

—

—

—

—

—

—

—

—

(552)

(921)

(1,473)
Dividends declared ($1.72 per share of Class A Common Stock) and distributions

—

—

—

—

—

—

10,276

(45,610)

—

(100,417)

(135,751)
Treasury stock purchases

—

—

(98,126)

—

—

(2,621)

—

—

—

—

(2,621)
Class A Partnership Units and other equity purchased or converted into Class A Common Stock

103,538

(88,911)

—

1

(1)

—

900

—

—

(117)

783
Net excess tax benefit (detriment) from equity-based compensation

—

—

—

—

—

—

(48)

—

—

—

(48)
Other

—

—

—

—

—

—

766

—

—

—

766
Balance as of September 30, 2016

20,894,035

31,138,193

(361,748)

$
209

$
311

$
(10,237)

$
256,531

$
(37,596)

$
(444)

$
53,750

$
262,524

~~Table of Contents~~

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 ~~IPO,~~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~~financial sponsors and ~~financial sponsors,~~governments, 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~~ —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~~•

Moelis & Company LLC (“U.S. Broker Dealer”), 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 International Holdings LLC (“Moelis International”), a Delaware limited liability company, owns the following entities and investment:~~

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 UK LLP, French Branch (French branch)~~

~~Moelis & Company Europe Limited, Frankfurt am Main (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 Hong Kong Moelis & Company Asia Limited Beijing Representative Office, as well as having a wholly-owned Chinese subsidiary, Moelis & Company Consulting (Beijing) Company Limited.

~~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~~

•

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 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 B.V., 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 Europe B.V., a private limited company incorporated in Amsterdam, Netherlands.

•

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.

•

Moelis & Company Saudi Limited, a limited liability company incorporated in Riyadh, Saudi Arabia

•

An equity method investment in MA Financial Group Limited (previously known as Moelis Australia Limited) (“MA Financial”), a public company listed on the Australian Securities Exchange.

~~Table of Contents~~

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting~~—The~~ —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”). The condensed consolidated financial statements include the combined operations, assets and liabilities of the Company. The Notes are an integral part of the Company's condensed consolidated financial statements. 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 ~~and combined~~ audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~ 2021.

Consolidation~~—The~~ —The Company’s policy is to consolidate (i) entities ~~other than limited partnerships,~~ 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~~ —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 could have a material impact on the condensed consolidated financial statements. 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 doubtful accounts;~~

•

the adequacy of the allowance for credit losses;

~~the realization of deferred taxes;~~

•

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

~~the measurement of equity‑based compensation; and~~

•

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

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

•

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 condensed consolidated financial statements.

Cash, ~~and~~ Cash Equivalents— and Restricted Cash —Cash and cash equivalents include all ~~short‑term~~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.

~~As of September 30, 2017, the Company had~~The Company’s cash equivalents of $68,329 (December 31, 2016: $246,933) invested primarily in government securities money markets, government debt securities and U.S. Treasury instruments. Additionally, as of September 30, 2017, the Company had cash of $59,271 (December 31, 2016: $71,993)is maintained in U.S. and ~~non‑U.S.~~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.

~~Table~~The Company’s restricted cash is comprised of ~~Contents~~

~~Restricted Cash—As of September 30, 2017 and December 31, 2016, the Company held cash of $789 and $659, respectively, in restricted~~ 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 U.S. medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of March 31, 2022 and 2021, is presented below.


	March 31,
	2022		2021
Cash	$	109,358	$	97,899
Cash equivalents		21,062		57,503
Restricted cash		635		1,081
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	131,055	$	156,483

Additionally, as of December 31, 2021, the Company held cash of $135,217 and cash equivalents of $384,996.

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

Included in the accounts receivable balances at March 31, 2022 and December 31, 2021 were $11,064 and $20,041, respectively, 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 $294 and $204 for the three months ended March 31, 2022 and 2021, respectively.

The Company maintains an allowance for ~~doubtful accounts~~credit losses that, in management’s opinion, provides for an adequate reserve to cover losses that may be incurred. ~~The~~For purposes of determining appropriate allowances, the Company ~~regularly reviews~~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 ~~allowance by considering factors such as historical experience, credit quality,~~ age of the ~~accounts~~ receivable, in addition to considerations of historical charge-offs and ~~the~~ current economic ~~conditions that may affect a customer’s ability to pay such amounts owed to the Company.~~conditions.

After concluding that a reserved accounts receivable is no longer collectible, the Company will ~~charge‑off~~charge-off the receivable. ~~This is determined based on several factors including the age of the accounts receivable and the credit worthiness of the customer.~~ This has the effect of reducing both the gross receivable and the allowance for ~~doubtful accounts.~~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.

The following tables summarize credit loss allowance activity for the three months ended March 31, 2022 and 2021:


	Three Months Ended March 31, 2022												Three Months Ended March 31, 2021
	Accounts Receivable												Accounts Receivable
		Short-term Receivables				Private Funds Advisory Receivables				Total				Short-term Receivables				Private Funds Advisory Receivables			Total
Allowance for Credit Losses, beginning balance	$		2,621		$		202		$		2,823		$		3,577		$		198	$		3,775
Charge-offs, foreign currency translation and other adjustments			(186	)			(68	)			(254	)			(741	)			—			(741	)
Recoveries			(740	)			(87	)			(827	)			(1,126	)			—			(1,126	)
Provision for credit losses			475				64				539				4,253				22			4,275
Allowance for credit losses, ending balance	$		2,170		$		111		$		2,281		$		5,963		$		220	$		6,183

Deferred Compensation~~—Deferred~~ —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~~ —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~~readily-available actively quoted prices or for which fair value can be measured from ~~actively‑quoted~~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)~~lowest level of observability) based on inputs:

Level 1~~—Quoted~~ —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~~ —Pricing inputs that are significant to the overall fair value measurement 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~~ —Pricing inputs that are significant to the overall fair value measurement 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~~is based on the best information available, may incorporate management’s own assumptions, and involves a significant ~~judgment or estimation by the Company’s management.~~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

~~Table of Contents~~

significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the instrument.

~~For level 3 investments~~ 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 ~~pricing inputs~~the reclassification occurred.

Investments Held at Cost — Investments without readily determinable fair values are ~~unobservable and limited market activity exists, management’s determination of~~measured at cost, less impairment. If the Company identifies an observable price change in an orderly transaction for an investment held at cost, it will measure the investment at fair value ~~is based~~as of the date the observable transaction occurred. The Company shall reassess at each reporting period whether such investments should continue to be measured at cost, less impairment, or another method. Any resulting gain or loss from a change in measurement shall be recorded in other income and expenses on the ~~best information available, may incorporate management’s own assumptions and involves a significant degree~~condensed consolidated statement of ~~judgment.~~operations. Investments held at cost are reported within investments on the condensed consolidated statements of financial condition.

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 ~~financial~~ 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.~~investment. The Company reflects its share of gains and losses of the investment in other income ~~(loss) from equity method investments~~and expenses in the condensed consolidated statements of ~~operations. Certain adjustments have been made~~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 ~~account~~use an underlying asset for the ~~Company’s equity method investment in Moelis Australia under US GAAP as Moelis Australia Limited follows local accounting principles under Australian Accounting Standards.~~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.

Equipment and Leasehold Improvements~~—Office~~ —Office equipment and furniture and fixtures are stated at cost less accumulated depreciation, which is determined using the ~~straight‑line~~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~~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~~ —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 issued and 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%~~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%~~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

~~Table of Contents~~

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.

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.

Revenue and Expense Recognition—We earn substantially all of our revenues by providing advisory services on mergers and acquisitions, recapitalizations and restructurings, capital markets transactions, private fund raisings and secondary transactions, and other corporate finance matters. The Company also acts as an underwriter of certain securities offerings. We provide our advisory services on an ongoing basis which, for example, may include evaluating and selecting one of multiple strategies. In many cases, we are not paid until the completion of an underlying transaction.

The Company recognizes ~~revenues from providing~~the vast majority of its advisory services revenues over time, including reimbursements for certain out-of-pocket expenses, when ~~earned~~or as our performance obligations are fulfilled and collection is reasonably assured. ~~Upfront fees~~The determination of whether revenues are recognized over time or at a point in time depends upon the ~~estimated period that~~type of service being provided and the related performance obligations. We identify the performance obligations in our engagement letters and determine which services are ~~performed. Transaction‑related~~distinct (i.e. separately identifiable and the client could benefit from such service on its own). We allocate the transaction price to the respective performance obligations by estimating the amount of consideration we expect in exchange for providing each service. Both the identification of performance obligations and the allocation of transaction price to the respective performance obligations requires significant judgment.

During such advisory engagements, our clients are continuously benefitting from our advice and the over time recognition matches the transfer of such benefits. However, the recognition of transaction fees, which are ~~recognized when~~variable in nature, is constrained until substantially all services ~~for a transaction~~ have been provided, specified conditions have been met (e.g. transaction closing) 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 ~~transaction closes. Underwriting~~over time criteria will be recognized on a systematic basis over the estimated period where the related services are performed.

With respect to fairness opinions, fees are fixed and delivering the opinion is a separate performance obligation from other advisory services that may be promised under the same engagement letter; as such these revenues are recognized at a point in time when the engagement is formally completed and the client can obtain substantially all of the benefits from the service. Similarly, underwriting engagements are typically a single performance obligation and fees are generally recognized as revenue when the offering has been deemed to be completed by the lead manager of the underwriting group. In these instances, 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 ~~deemed complete~~less than one year. Costs to fulfill contracts consist of out-of-pocket expenses that are part of performing our advisory services and ~~is presented net~~are typically expensed as incurred, except where the transfer and consumption of ~~related expenses. Deferred~~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 ~~are recorded for~~when it receives fees ~~received~~from clients that have not yet been ~~earned. Expenses~~earned (e.g. an upfront fee) or when the Company has an unconditional right to consideration before all performance obligations are ~~reflected on~~complete (e.g. upon satisfying conditions to earn an announcement fee, but before the ~~condensed consolidated statements~~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 ~~operations, net~~a restructuring transaction may include a lack of ~~client reimbursements. Reimbursable expenses billed to clients totaled $4,248 and $4,051~~anticipated bidders for the ~~three months ended September 30, 2017~~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 ~~2016, respectively,~~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 ~~$10,583~~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 ~~$11,445 for the nine months ended September 30, 2017~~capital markets expertise can be instrumental on both M&A and ~~2016, respectively.~~restructuring assignments.

~~Equity‑based~~Equity-based Compensation—The Company recognizes the cost of ~~employee~~ services received in exchange for an equity instrument ~~award.~~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. In certain instances, the Company may grant an equity-based award with a post-vesting restriction, which is reflected in the grant-date fair value of the award. 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 ~~dividend payment and~~reduction of retained earnings with a ~~charge~~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.

For the purposes of calculating diluted net income (loss) per share to holders of Class A common stock, unvested service‑based awards are included in the diluted weighted average shares of Class A common stock outstanding using the treasury stock method. See Note 7 for further discussion.

The Company has ~~a retirement plan whereby a retiring employee generally will~~terms that qualify certain employees to terminate their services while not ~~forfeit~~forfeiting certain qualifying incentive RSUs granted during ~~employment if at retirement the employee meets certain requirements.~~employment. For qualifying awards, issued prior to December 1, 2016, the employee must (i) be at least 54 years old and (ii) have provided at least 8 consecutive years of service to the Company. For qualifying awards issued on or after December 1, 2016, (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.~~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 ~~prior to meeting the stated requisite service period or retirement eligibility date~~ are eligible to receive dividends in kind; however, the right to dividends in kind will be forfeited if the underlying award does not vest.

Effective January 1, 2017, the Company adopted a change in accounting policy in accordance with Accounting Standards Update 2016-09, “Compensation—Stock Compensation (Topic 718)” (“ASU 2016-09”) to account for forfeitures as they occur. The change was applied on a modified retrospective basis with a cumulative decrease to retained earnings and an increase in additional paid-in capital (“APIC”) of $4,855 as of January 1, 2017. The tax effect of this adjustment increased deferred tax assets and retained earnings by $658. No prior periods were adjusted as a result of this change in accounting policy.

Income Taxes—The Company accounts for income taxes in accordance with ASC 740, “~~Accounting~~“Accounting for Income ~~Taxes~~”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

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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~~more-likely-than-not that some ~~portion~~ or all of the deferred tax assets will not be realized.

ASC ~~740‑10~~740-10 prescribes a ~~two‑step~~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 ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, no~~2021, 0 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~~tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. For the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, no~~2021, 0 such amounts were recorded.

Prior to January 1, 2017, all excess tax benefits resulting from exercise or settlement of share-based payment transactions were recognized in APIC and any tax deficiencies were either offset against APIC, or were recognized in the income statement under certain conditions. Under ASU 2016-09, allThe Company recognizes excess tax benefits and deficiencies ~~are recognized~~ as income tax benefits or expenses in the condensed consolidated statement of ~~operations prospectively.~~

Under ASU 2016-09, the Company is now required to present excess tax benefits and detriments as an operating activity in the same manner as other cash flows related to income taxes rather than as a financing activity. The Company adopted these changes retrospectively, and prior year excess tax benefitsoperations. These are ~~now~~ reflected in ~~changes in prepaid~~accounts payable, accrued expenses and other ~~assets~~liabilities within the condensed consolidated statement of cash flows.

Effective January 1, 2021, the Company adopted ASU 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.~~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.~~non-U.S. currency is designated the functional currency of the subsidiary. ~~Non‑functional~~Non-functional currency related transaction gains and losses are immediately recorded in the condensed consolidated statements of operations.

RECENT ACCOUNTING PRONOUNCEMENTS

In ~~May 2014,~~March 2020, the FASB issued ASU No. ~~2014-09, “Revenue from Contracts with Customers”~~2020-04, “Reference Rate Reform” (“ASU ~~2014-09”~~2020-04”). ASU ~~2014-09 requires a company to recognize revenue in an amount~~2020-04 provides optional guidance for entities that ~~reflects~~are impacted by interest rate reform. Specifically, ASU 2020-04 allows for contracts under the ~~consideration to which the entity expects~~scope of Topic 310—Receivables to be entitled in exchange for services provided. The amendment requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. In August 2015, the FASB issued ASU No. 2015-14, “Deferral of the Effective Date”, which provides amendments that defer the effective date of ASU 2014-09 by one year. The amendments in this update are effective either retrospectively to each prior reporting period presented, or as a cumulative effect adjustment as of the date of adoption, during interim and annual periods beginning after December 15, 2017, with early adoption permitted beginning after December 15, 2016. The Company plans to adopt ASU 2014-09 using the modified retrospective approach, with a cumulative-effect adjustment upon adoption. The adoption of ASU 2014-09 is expected to affect the timing of revenue recognition and the presentation of reimbursable expenses billed to clients in our condensed and consolidated statements of operations. The Company plans to evaluate each engagement under the new guidance to determine whether revenue and deal-related expenses should be recognized at a point in time or over time. Reimbursed expenses will be presented gross in revenues and expenses. In addition, underwriting revenues, which are currently disclosed net of expenses, will be reported gross in our condensed and consolidated statements of operations.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). ASU 2016-01 enhances the reporting

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model for financial instruments by addressing certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. Key provisions require equity investments (except those accounted for ~~under~~prospectively with the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income. In addition, the exit price notion must be used when measuring the fair value of financialupdated interest rate, among other specifications for debt, derivative instruments, ~~for disclosure purposes.~~and other contracts. ASU ~~2016-01~~2020-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2017. Upon initial evaluation, the adoption of ASU 2016-01 will not have a material impact on the Company.~~

In February 2016, the FASB issued ASU No. 2016-02, “Leases” (“ASU 2016-02”). ASU 2016-02 increases the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments will retain lease classifications, distinguishing finance leases from operating leases, using criteria that is substantially similar for distinguishing capital leases from operating leases in previous guidance. Lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.2022. Early ~~adoption~~application is permitted. ~~Upon initial evaluation, the~~The Company has ~~determined it will record right-to-use assets~~evaluated this ASU and ~~liabilities measured at the present value of reasonably certain lease payments on our consolidated statements of financial condition. We do~~does not ~~anticipate any material changes to our condensed and consolidated statements of operations.~~

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows—Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 provides more standardized guidance to improve consistency surrounding the classification of certain cash payments and receipts between the operating, investing, and financing sections of the statement of cash flows. These transactions include the settlement of certain debt instruments, distributions received from equity-method investees and other transactions. ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Earlyexpect its adoption is permitted. Upon initial evaluation, the primary impact is selecting one of two acceptable accounting treatments for distributions received from equity method investments. The Company currently follows the nature of distribution approach, therefore, we do not anticipate the adoption of ASU 2016-15 to have a material impact ~~on our condensed and consolidated financial statements.~~

In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes—Intra-Entity Transfers of Assets Other Than Inventory” (“ASU 2016-16”). ASU 2016-16 provides clearer guidance related to current and deferred income taxes driven by intra-entity asset transfers. Specifically, this ASU states that an entity should recognize the income tax consequences of intra-entity transfers of assets other than inventory when they occur whereas in the past, certain entities did not recognize these impacts until the asset was sold to a third party. ASU 2016-16 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. Upon initial evaluation, we do not expect the adoption of ASU 2016-16 to have a material impact on our condensed and consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows—Restricted Cash” (“ASU 2016-18”). ASU 2016-18 requires that entities include a reconciliation of changes in restricted cash in their cash flow statement. This will standardize the diversity in practice where some entities included such balances in their statement, while others omitted them. ASU 2016-18 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. Due to this new guidance, the Company will be required to include a reconciliation of changes in restricted cash in our condensed and consolidated statements of cash flows.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation” (“ASU 2017-09”). ASU 2017-09 provides greater clarity on issues regarding accounting for changes in terms or conditions of share-based payment awards. ASU 2017-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. Upon initial evaluation, we do not expect the adoption of ASU 2017-09 to have a material impact on our condensed and consolidated financial statements.

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~~4. EQUITY METHOD INVESTMENTS~~

~~Moelis Australia~~

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. The remaining 50% was owned by an Australian trust established by and for the benefit of Moelis Australia senior executives.

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. As a result of the offering, the Company’s ownership interest in Moelis Australia was diluted and the Company recognized a gain of approximately $15,170, recorded in other income and expenses on the condensed consolidated statement of operations. Contemporaneous with the offering, Moelis Australia agreed to terminate an asset management related revenue sharing agreement resulting in a payment to a third party, of which the Company recognized a charge of approximately $2,400 in income (loss) from equity method investments. Also, in connection with the offering and new shareholders agreement, the Company and Moelis Australia terminated a put option enabling the key senior Australian executive to sell his shares held in Moelis Australia back to the Company, and a call option held by the Company to purchase additional shares in Moelis Australia. On March 20, 2017, Moelis Australia declared a dividend, of which the Company received $11,672 on April 18, 2017. The Company accounted for the dividend as a return on investment and reduced the carrying value of the investment in Moelis Australia by $11,672.

On September 13, 2017, Moelis Australia completed an offering of 11,940,000 shares of common stock to raise additional capital. The issuance of shares further reduced Moelis & Company’s ownership interest in Moelis Australia. These shares were issued at a fair value greater than the carrying value of the ownership interest disposed, resulting in a gain of approximately $14,429, recorded in other income on the condensed and consolidated statement of operations. On October 30, 2017, Moelis Australia completed a conditional offering of 10,060,000 shares. See Note 16 of the condensed consolidated financial statements included in this Form 10-Q for further information.

Moelis Australia issued additional shares during 2017 related to acquisitions, which further reduced Moelis & Company’s ownership interest in Moelis Australia. The shares were issued at a fair value greater than the carrying value of the ownership interest disposed, resulting in a gain of approximately $2,372, recorded in other income and expenses on the condensed and consolidated statement of operations.

For the three months ended September 30, 2017 and 2016, income from this equity method investment of $2,806 and $1,571 was recorded, respectively, and for the nine months ended September 30, 2017 and 2016, income from this equity method investment of $4,592 and $2,176 was recorded, respectively.

~~Other Equity Method Investment~~

In June 2014, the Company made an investment of $265 into a general partner entity which invests third-party funds and is controlled by a related party, Moelis Asset Management LP. The Company determined that it should account for this investment as an equity method investment on itsCompany's condensed consolidated financial statements. For the three and nine months ended September 30, 2016, a loss of $9 and income of $1,721 was recorded on this investment, respectively, and the Company received cash distributions from this entity of $813. The investment was substantially liquidated during 2016 and as of December 31, 2016, the Company’s remaining investment in the entity was approximately $30, which is primarily cash held in escrow for fees and potential contingencies.

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FIXED AND INTANGIBLE ASSETS

~~5. EQUIPMENT AND LEASEHOLD IMPROVEMENTS~~

Equipment and leasehold improvements, net consists of the following:

September 30,

December 31,

2017

2016

Office equipment

$
9,682

$
12,489

Furniture and fixtures

3,412

3,255

Leasehold improvements

11,293

8,151

Total

24,387

23,895

Less accumulated depreciation and amortization

(14,042)

(15,498)

Equipment and leasehold improvements, net

$
10,345

$
8,397


	March 31,		December 31,
	2022		2021
Office equipment	$	15,469	$	15,883
Furniture and fixtures		14,306		14,303
Leasehold improvements		61,705		61,054
Total		91,480		91,240
Less accumulated depreciation and amortization		(31,897)		(32,077)
Equipment and leasehold improvements, net	$	59,583	$	59,163

Depreciation and amortization expenses for fixed assets totaled ~~$891~~$2,039 and ~~$817~~$1,449 for the three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, respectively.

As of March 31, 2022 and December, 31, 2021, there were $2,005 and $2,127 of costs capitalized, net of $866 and $744 of accumulated amortization, respectively, within prepaid expenses and ~~$2,570 and $2,359~~other assets on our condensed consolidated statements of financial condition related to the implementation of cloud computing arrangements. The amortization expense of the capitalized costs was $122 for each of the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, respectively.~~2021, and was recorded within communication, technology and information services on the condensed consolidated statements of operations.

INVESTMENTS

Investments Measured at Fair Value

~~6. FAIR VALUE MEASUREMENTS~~

Fair value investments are presented within 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~~See Note 2 for further information on the Company's fair value ~~are classified and disclosed in one of the following categories (from highest to lowest) based on inputs:~~hierarchy.

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~~value of ~~government~~money market securities, ~~money markets,~~ U.S. Treasury instruments, common stock, and ~~government debt securities as of September 30, 2017 and December 31, 2016~~warrants 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. See Note 2~~months and considers U.S. Treasury instruments to be risk free and does not reserve for ~~further information~~expected credit losses on these investments. Common stock and warrants held of publicly-traded companies are categorized as Level 1 in the ~~Company’s~~ fair value hierarchy.

In 2015 the Company received convertible notes as compensation for its services and classified this investment as available-for-sale. The convertible notes did not have readily determinable market values and were categorized accordingly as level 3. The fair value of the convertible notes was recorded at the initial transaction price at which such notes were purchased by third party investors in the capital market transaction on which the Company provided services. In July 2016, the issuerCompany's financial assets as of the convertible notes consummated its initial public offering and the notes converted into common stock of the issuer at a discounted conversion rate equal to the principal value of the notes plus accrued interest. The common stock is classified as available-for-sale and the subsequent measurement of its fair value is recordedMarch 31, 2022, have been categorized based upon ~~the quoted price in its active market. Unrealized changes in fair value are reflected in other comprehensive income in the condensed consolidated financial statements.~~

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~~The following table summarizes the levels of~~ the fair value hierarchy ~~into which~~as follows:


	Total		Level 1		Level 2		Level 3
Financial assets:
Included in cash and cash equivalents
U.S. treasury instruments	$	9,996	$	—	$	9,996	$	—
Money market securities		11,066		—		11,066		—
Investments
U.S. treasury instruments		171,114		—		171,114		—
Common stock		12,231		12,231		—		—
Warrants		537		537		—		—
Total financial assets	$	204,944	$	12,768	$	192,176	$	—

For the ~~Company’s~~three months ended March 31, 2022, unrealized losses of $3,880 were recognized in other income and expenses on the condensed consolidated statement of operations related to equity investments measured at fair value held at March 31, 2022. The cost basis of the financial assets ~~fall~~recorded at fair value is included in investments on the condensed consolidated statement of financial condition was $190,598 as of ~~September 30, 2017:~~March 31, 2022.

Total

Level 1

Level 2

Level 3
Financial assets:

Included in cash and cash equivalents

Government debt securities (1)

$
14,487

$
—

$
14,487

$
—
Government securities money market

53,842

—

53,842

—
Investments

Government debt securities (1)

54,258

—

54,258

—
U.S. treasury instruments

61,864

61,864

—

—
Common stock

244

244

—

—
Total financial assets

$
184,695

$
62,108

$
122,587

$
—

~~(1)~~

~~Consists of municipal bonds, agency bonds and agency discount notes.~~

The ~~following table summarizes~~fair value of the ~~levels~~Company's financial assets as of December 31, 2021 have been categorized based upon the fair value hierarchy ~~into which~~as follows:


	Total		Level 1		Level 2		Level 3
Financial assets:
Included in cash and cash equivalents
U.S. treasury instruments	$	301,992	$	—	$	301,992	$	—
Money market securities		83,004		—		83,004		—
Investments
U.S. treasury instruments		200,973		—		200,973		—
Common stock		15,964		15,964		—		—
Warrants		684		684		—		—
Total financial assets	$	602,617	$	16,648	$	585,969	$	—

For the ~~Company’s~~three months ended March 31, 2021, there were 0 unrealized gains or losses recognized in other income and expenses on the condensed consolidated statement of operations related to equity investments measured at fair value at March 31, 2021. The cost basis of the financial assets ~~fall~~recorded at fair value included in investments on the condensed consolidated statement of financial condition was $220,422 as of December 31, ~~2016:~~2021.

Total

Level 1

Level 2

Level 3

Financial assets:

Included in cash and cash equivalents

U.S. treasury bills

$
44,999

$
—

$
44,999

$
—

Government securities money market

201,934

—

201,934

—

Investments

U.S. treasury bills

32,995

—

32,995

—

Convertible notes

388

388

—

—

Total financial assets

$
280,316

$
388

$
279,928

$
—

Investments Held at Cost

The ~~Company’s methodology for reclassifications impacting~~Company made investments in the ~~fair value hierarchy is that transfers in/out~~sponsors (collectively referred to herein as "Atlas Crest Sponsors") of ~~the respective category are reported at fair value as of the beginning of the period in which the reclassification occurred.~~

At the end of the reporting period, the Company reviews U.S. treasury instruments held to determine whether the securities are of the most recent issuance of that security with the same maturity (referred to as “on-the-run”, which is the most liquid version of the maturity band). If a U.S. treasury instrument held at the end of the reporting period was from the most recent issuance it is classified as level 1, otherwise it isseveral Atlas Crest Investment Corp. entities (each an "Atlas Crest Entity" and collectively referred to as ~~“off-the-run”~~"Atlas Crest Entities"), each a special purpose acquisition company ("SPAC"). The Company's Chief Executive Officer, Kenneth Moelis, is the managing member of the Atlas Crest Sponsors and serves as Non-Executive Chairman of the Atlas Crest Entities. The Company does not direct the activities of the Atlas Crest Sponsors or the related SPACs.

Investments in the Atlas Crest Sponsors (discussed in the preceding section) that do not have readily determinable fair values are measured at cost less impairment and are included in investments on the condensed consolidated statements of financial condition. As of March 31, 2022, and the December 31, 2021, the aggregate investment balances of the Atlas Crest Sponsors held at cost was $1,895.

Equity Method Investments

Equity-method investments are presented within investments on the Company’s condensed consolidated statements of financial condition. As of March 31, 2022 and December 31, 2021, the carrying value of the Company's equity method investment in MA Financial (formerly known as Moelis Australia Limited) was $42,569 and $43,825. The Company's share of earnings on this investment is ~~classified as level 2.~~ recorded in other income and expenses on the condensed consolidated statements of operations.

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, there were transfers~~March 31, 2021, MA Financial declared dividends, of $0which the Company received $2,029 and ~~$7,984, respectively, from level 1~~$2,279, respectively. The Company accounted for the dividends as returns on investment and reduced the carrying value of the investment in MA Financial by the amount of dividends received.

From time to ~~level 2 related to U.S. treasury instruments acquired on-the-run that prior to~~time, MA Financial may issue shares in connection with a transaction or employee compensation which reduces the ~~reporting period became off-the-run.~~

Company's ownership interest in MA Financial and can result in dilution gains or losses. Such gains or losses are recorded in other income and expenses on the condensed consolidated statements of operation.

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7. 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 ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 are presented below.

Three Months Ended September 30,

Nine Months Ended September 30,
(dollars in thousands, except per share amounts)

2017

2016


2017

2016

Numerator:

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

$
19,205

$
9,489

$
54,213

$
23,352

Add (deduct) dilutive effect of:

Noncontrolling interests related to Class A partnership units

(a)

(a)

(a)

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

$
19,205

$
9,489

$
54,213

$
23,352

Denominator:

Weighted average shares of Class A common stock outstanding—basic

32,505,940

20,926,745

29,094,514

20,807,189

Add (deduct) dilutive effect of:

Noncontrolling interests related to Class A partnership units

(a)

(a)

(a)

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

7,278,693
(b)

3,374,318
(b)

6,778,333
(b)

2,709,050
(b)
Weighted average shares of Class A common stock outstanding—diluted

39,784,633

24,301,063

35,872,847

23,516,239

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

Basic

$
0.59

$
0.45

$
1.86

$
1.12

Diluted

$
0.48

$
0.39

$
1.51

$
0.99


		Three Months Ended March 31,
(dollars in thousands, except per share amounts)		2022			2021
Numerator:
Net income (loss) attributable to holders of shares of Class A common stock—basic		$	65,715		$	66,529
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		$	65,715		$	66,529
Denominator:
Weighted average shares of Class A common stock outstanding—basic			64,824,347			60,932,966
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	(b)		5,176,126	(b)		5,427,251
Weighted average shares of Class A common stock outstanding—diluted			70,000,473			66,360,217
Net income (loss) per share attributable to holders of shares of Class A common stock
Basic		$	1.01		$	1.09
Diluted		$	0.94		$	1.00

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~~1-for-one basis, subject to applicable ~~lock‑up, vesting and transfer~~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 ~~64,139,312~~76,469,649 and ~~58,000,602~~74,625,284 for the three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, respectively, and 63,172,885 and 57,335,334 for the nine months ended September 30, 2017 and 2016,~~2021, 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 ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, such exchange is not reflected in diluted net income (loss) per share as the assumed exchange is not dilutive.

(b)~~During the three and nine months ended September 30, 2017 and 2016, certain~~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.~~Company for certain periods. During the three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, the~~

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~~additional weighted average amount of~~2021, there were 3,308 and 1,539 RSUs that would have been included in ~~this~~the treasury stock method calculation if the effect were dilutive, ~~would have been 25 and 2,552 units, respectively and 8 and 1,211 units for the nine months ended September 30, 2017 and 2016,~~ respectively. Additionally, during the three months ended September 30, 2017 and 2016, the additional weighted average amount of options that would have been included in this calculation if the effect were dilutive would have been 0 and 973,859 options, respectively, and 0 and 1,048,196 options for the nine months ended September 30, 2017 and 2016, respectively.

EQUITY‑BASED COMPENSATION

~~Partnership Units~~

Prior to the Company’s restructuring and IPO, the business operated as a partnership and its ownership structure was comprised of common partners (principally outside investors) holding units. The common partners contributed capital to the partnership and were not subject to vesting. Units granted to Managing Directors upon joining the Company and as part of annual incentive compensation generally vested based on service over five to eight years. Certain non‑Managing Director employees were granted units as part of their incentive arrangements and these units generally vest based on service ratably over four years. In connection with the Company’s restructuring and IPO, substantially all of the Managing Director partner equity subject to vesting had been accelerated. Units granted to non‑Managing Director employees were not accelerated in connection with the Company’s restructuring and IPO and continue to vest based on the original terms of the grant.

In connection with the reorganization and 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. As of September 30, 2017, partners held 22,605,843 Group LP partnership units, 423,439 of which were unvested and will continue to vest over their service life.

In relation to the vesting of units, the Company recognized compensation expenses of $469 and $743 for the three months ended September 30, 2017 and 2016, respectively, and expenses of $1,668 and $2,376 for the nine months ended September 30, 2017 and 2016, respectively. As of September 30, 2017, there was $1,842 of unrecognized compensation expense related to unvested Class A partnership units which is expected to be recognized over a weighted-average period of 1.1 years, using the graded vesting method.

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~~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~~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, 2022 and 2021, the Company recognized expense of $37,067 and $50,963, respectively, in relation to these awards.

The following table summarizes activity related to RSUs for the three months ended March 31, 2022 and 2021.


	Restricted Stock Units
	2022			2021
		Weighted			Weighted
		Average			Average
	Number of	Grant Date		Number of	Grant Date
	Shares	Fair Value		Shares	Fair Value
Unvested Balance at January 1,	8,068,120	$	46.36	8,742,695	$	41.45
Granted	2,761,285		49.91	2,704,521		54.74
Forfeited	(26,800)		47.92	(34,974)		48.44
Vested	(2,828,354)		46.49	(3,528,273)		42.17
Unvested Balance at March 31,	7,974,251	$	47.68	7,883,969	$	46.15

In addition, the ~~first quarter~~Company issues partnership units that are intended to qualify as "profits interest" for U.S. federal income tax purposes ("Partnership Units") that, subject to certain terms and conditions, are exchangeable into shares of ~~2015,~~Moelis & Company Class A common stock on a 1-for-one basis. These Partnership Units are recorded as noncontrolling interests in the Company's condensed consolidated statements of financial condition. Further, these Partnership Units generally vest over a service life of five years, however in certain arrangements the Partnership Units are granted without a service requirement, but do not have exchange rights until the third anniversary of the grant-date. For the three months ended March 31, 2022 and 2021, the Company granted 809,899 and 395,834 Partnership Units with a grant-date fair value of $38,413 and $21,672, respectively.

As of March 31, 2022, the total compensation expense related to unvested RSUs and other stock-based awards not yet recognized was $229,224, which is expected to be recognized over a weighted-average period of 2.1 years.

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, 2022, there were 71,824,917 shares of Class A common stock issued, 7,894,635 shares of treasury stock, and 63,930,282 shares outstanding. As of December 31, 2021, there were 68,518,779 shares of Class A common stock issued, 5,873,180 shares of treasury stock, and 62,645,599 shares outstanding. The changes in Class A common stock are due primarily to the IPO and 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, 2022, and December 31, 2021, 4,685,898 and 4,686,344 shares of Class B common stock were issued and outstanding, respectively, due primarily to the IPO and offering transactions, and Class B conversions described above.

Treasury Stock

During the three months March 31, 2022 and 2021, the Company repurchased 2,021,455 and 1,363,934 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 $97,929 and $74,211, respectively, in the treasury stock balance on the Company’s condensed consolidated statements of changes in equity as of March 31, 2022 and 2021.

Share Repurchase Plan

In February 2019, the Board of Directors authorized the repurchase of up to ~~$25 million~~$100,000 of shares of Class A common stock and/or Class A partnership units of Group LP with no expiration date. In July 2021, the ~~Company~~Board of Directors authorized the repurchase of an additional $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. ~~As of September 30, 2017, approximately $20 million~~The remaining balance of shares ~~may yet be purchased~~authorized for repurchase under the ~~program.~~

~~Restricted Stock and Restricted Stock Units (RSUs)~~

Pursuant to the Plan and in connection with the Company’s annual compensation process and ongoing hiring process, the Company issues RSUs which generally vest over a service life of four to five years. For the three months

~~Table of Contents~~

ended September 30, 2017 and 2016, the Company recognized expense of $22,057 and $16,439, respectively, and expenses of $69,248 and $51,233 for the nine months ended September 30, 2017 and 2016, respectively, in relation to the vesting of RSUs.

~~The following table summarizes activity related to restricted stock and RSUs for the nine months ended September 30, 2017 and 2016.~~

Restricted Stock & RSUs

2017

2016




Weighted



Weighted

Average

Average

Number of

Grant Date

Number of

Grant Date

Shares

Fair Value

Shares

Fair Value

Unvested Balance at January 1,

8,504,190

$
26.70

5,123,481

$
28.67

Granted

3,140,934

37.07

3,787,723

24.09

Forfeited

(75,433)

30.74

(74,739)

26.05

Vested

(2,118,588)

26.96

(586,953)

28.30

Unvested Balance at September 30,

9,451,103

$
29.87

8,249,512

$
26.81

~~As of September 30, 2017, the total compensation expense related to unvested restricted stock and RSUs not yet recognized~~program was $115,885. The weighted-average period over which this compensation expense is expected to be recognized at September 30, 2017 is 1.7 years. Beginning in January of 2017, the Company accounts for forfeitures as they occur per the guidance in ASU 2016-09. See Note 2 for further discussion on this change in accounting policy.

~~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

The Company paid special dividends of $4.05, in aggregate, through September 30, 2017. 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 $4.05 from $25.00 per share to $20.95 per share.

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~~The following table summarizes activity related to stock options for the nine months ended September 30, 2017 and 2016.~~

Stock Options Outstanding

2017

2016




Weighted



Weighted

Average

Average

Number

Exercise Price

Number

Exercise Price

Outstanding

Per Share

Outstanding

Per Share

Outstanding at January 1,

2,822,728

$
20.95

3,081,203

$
20.95

Grants

—

—

—

—

Exercises

(256,270)

20.95

—

—

Forfeitures or expirations

(81,019)

20.95

(208,975)

20.95

Outstanding at September 30,

2,485,439

$
20.95

2,872,228

$
20.95

For the three months ended September 30, 2017 and 2016, the Company recognized expenses of $656 and $426, respectively, and expenses of $1,996 and $2,704 for the nine months ended September 30, 2017 and 2016, respectively, in relation to these stock options. As of September 30, 2017, the total compensation expense related to unvested stock options not yet recognized was $3,714. The weighted-average period over which this compensation expense is expected to be recognized at September 30, 2017 is 1.4 years. Beginning in January of 2017, the Company accounts for forfeitures as they occur per the guidance in ASU 2016-09. See Note 2 for further discussion on this change in accounting policy.

~~9. STOCKHOLDERS EQUITY~~

~~Class A Common Stock~~

~~IPO and Reorganization~~

~~In April 2014, the Company issued 15,263,653 shares of Class A common stock in connection with the IPO and reorganization.~~

~~Follow-on Offerings~~

In November 2014, the Company completed an offering of 6,325,000 shares of Class A common stock by the Company and selling stockholders. The Company conducted the offering to facilitate organized liquidity and increase the public float of its Class A common stock. In connection with the offering, the shares of Class A common stock outstanding of the Company increased by 4,511,058 shares. The Company did not retain any proceeds from the sale of its Class A common stock.

On January 11, 2017, the Company completed an offering of 5,750,000 shares of Class A common stock in order to facilitate organized liquidity and increase the public float of its Class A common stock. In connection with the offering, the shares of Class A common stock outstanding of the Company increased by 5,356,876 shares. The Company did not retain any proceeds from the sale of its Class A common stock.

On July 28, 2017, the Company completed an offering of 6,000,000 shares of Class A common stock in order to facilitate organized liquidity and increase the public float of its Class A common stock. In connection with the offering, the shares of Class A common stock outstanding of the Company increased by 5,680,903 shares. The Company did not retain any proceeds from the sale of its Class A common stock.

~~As of September 30, 2017, 33,899,875 shares of Class A common stock were issued and 33,247,275 shares were outstanding, and~~$109,025 as of ~~December~~March 31, ~~2016, 20,948,998 shares of Class A common stock were issued and~~

~~Table of Contents~~2022.

~~20,561,108 shares were outstanding. The changes in Class A common stock are due primarily to the IPO and offering transactions described above.~~

~~Class B Common Stock~~

~~IPO and Reorganization~~

~~Follow-on Offerings~~

In connection with the offering in November 2014, Partner Holdings surrendered 2,998,322 shares of Class B common stock and was issued 1,658 shares of Class A common stock at a conversion ratio of .00055 to 1. The Company also purchased 1,509,131 shares of Class B common stock from Partner Holdings for cash of $28 and subsequently cancelled those shares. The Company did not retain any proceeds from the offering.

~~In connection with the offering in January 2017, the Company purchased 5,356,876 shares of Class B common stock from Partner Holdings for cash of $101 and subsequently cancelled those shares.~~

~~In connection with the offering in July 2017, the Company purchased 5,680,903 shares of Class B common stock from Partner Holdings for cash of $128 and subsequently cancelled those shares.~~

As of September 30, 2017 and December 31, 2016, 20,045,736 and 31,138,193 shares of Class B common stock were issued and outstanding, respectively, due primarily to the IPO and offering transactions described above.

~~Treasury Stock~~

During the nine months ended September 30, 2017 and 2016, the Company repurchased 264,710 and 98,126 shares, respectively, from its employees for the purpose of settling tax liabilities incurred upon the vesting of RSUs. The result of the repurchases was an increase of $9,832 and $2,621, respectively, in the treasury stock balance on the Company’s condensed consolidated statements of changes in equity as of September 30, 2017 and 2016.

Noncontrolling Interests

A Group LP Class A partnership unit (not held by Moelis & Company or its subsidiaries) is exchangeable into ~~one~~1 share of Moelis & Company Class A common stock and represents the Company’s noncontrolling interests (non-redeemable). As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, partners held ~~22,605,843~~6,901,884 and ~~33,698,300~~ 6,090,500Group LP partnership units, respectively, representing a ~~40%~~10% and ~~62%~~ 9%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 ~~33,247,275~~63,930,282 shares of Class A common stock outstanding ~~at September 30, 2017 (20,561,108~~as of March 31, 2022 (62,645,599 as of December 31, ~~2016)~~2021), represents the controlling interest.

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~~10.~~ 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 iswas used and operated by the Company pursuant to a dry lease with ~~Manager which terminates on December 31, 2019.~~Manager. The terms of the dry lease ~~are~~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. For the three months ended September 30, 2017 and 2016, the Company incurred $468 and $312 in aircraft lease costs to be paid to Manager, respectively, and $1,404 and $936 in aircraft costs for the nine months ended September 30, 2017 and 2016, respectively. In addition, Mr. Moelis iswas the other lessee of the aircraft and ~~shares~~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, 2022 and 2021, the Company incurred $324 and $324 in aircraft lease costs to be paid to Manager, respectively.

Promissory Notes~~—As~~ —As of ~~September 30, 2017,~~March 31, 2022, there were ~~$626~~$119 of unsecured promissory notes from employees held by the Company (December 31, ~~2016: $922)~~2021: $219). Any outstanding balances are reflected in accrued and other receivables on the condensed consolidated statements of financial condition. The notes held ~~as of September 30, 2017 and December 31, 2016~~ bear a fixed interest ~~rate of 4.00%~~rates ranging from 3.00% to 4.00%. During each of the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, the Company received ~~$705~~$0 and $0$70, respectively, of principal repayments and recognized interest income of ~~$20~~$5 and ~~$15,~~$5, respectively, on such notes, which is included in other income and expenses on the condensed consolidated statements of operations. During the three months ended March 31, 2022, the Company recognized $100 of compensation and benefits expense related to a tranche of a promissory note that will not be repaid.

Services Agreement~~—In~~ —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 ~~technology, and office space~~ to Moelis Asset Management LP for a fee. This fee totaled ~~$264~~$55 and ~~$285~~$57 for the three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, respectively, and $868 and $996 for the nine months ended September 30, 2017 and 2016,~~2021, 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~~management as per the terms of the agreement. As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, the Company had ~~no balance~~0 balances due to or from Moelis Asset Management LP.

~~Moelis Australia~~—Affiliated SPACs and SPAC Sponsors—The Company provides office space, secretarial, administrative, and other corporate services to Atlas Crest Entities. These services are provided to the Atlas Crest Entities upon consummation of their IPOs, in each case for a fee of $10 per month. For the three months ended March 31, 2022 and 2021, these fees totaled $30 and $50, respectively. This arrangement shall continue with each Atlas Crest Entity until such Atlas Crest Entity consummates a business combination or is liquidated. As of ~~September 30, 2017~~March 31, 2022, and December 31, ~~2016,~~2021, the Company had ~~a balance~~0 balances due from ~~Moelis Australia of $438 and a net balance due to Moelis Australia of $38, respectively, which are reflected in other receivables on~~ the ~~condensed consolidated statements of financial condition. These balances consist of amounts due from~~Atlas Crest Entities or to 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.their sponsors.

~~Other Equity Method Investment~~—In June of 2014, the Company made an investment of $265 into an entity controlled by a related party, Moelis Asset Management LP. The Company has determined that it should account for this investment as an equity method investment on the condensed consolidated financial statements. For the three and nine months ended September 30, 2016, a loss of $9 and income of $1,721 was recorded on this investment, respectively, and the Company received cash distributions from this entity of $813. The investment was substantially liquidated during 2016. See Note 4 of the condensed consolidated financial statements included in this Form 10-Q for further information.

Revenues~~—From~~ —From time to time, the Company enters into advisory transactions with affiliated entities, such as an Atlas Crest Entity or Moelis Asset Management LP and its affiliates. The Company earned revenues associated with such transactions of ~~$94~~$159 and ~~$170~~$0 for the three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, respectively, and revenues of $1,240 and $7,186 for the nine months ended September 30, 2017 and 2016,~~2021, respectively.

~~11.~~

10.

REGULATORY REQUIREMENTS

Under the SEC Uniform Net Capital Rule (SEC Rule ~~15c3‑1)~~15c3-1) Alternative Standard under Section (a)(1)(ii), the minimum net capital requirement is ~~$250. At September 30, 2017, Moelis~~$250. As of March 31, 2022, U.S. Broker Dealer had net capital of ~~$95,904,~~$205,967, which was

~~Table of Contents~~

$~~95,654~~205,717 in excess of its required net capital. AtAs of December 31, ~~2016, Moelis~~2021, U.S. Broker Dealer had net capital of ~~$76,871~~$180,342 which was ~~$76,621~~$180,092 in excess of its required net capital.

~~Moelis U.S. does not carry customer accounts~~Certain other non-U.S. subsidiaries are subject to various securities and ~~does not otherwise hold funds or securities for, or owe money or securities to, customers~~capital adequacy requirements promulgated by the regulatory and ~~accordingly is exempt under Section (k)(2)(ii)~~exchange authorities of ~~SEC Rule 15c3‑3.~~

~~At September 30, 2017,~~ the ~~aggregate regulatory net~~countries in which they operate. These subsidiaries have consistently exceeded their local capital of Moelis UK was $16,625 which exceeded the minimum requirement by $16,566. At December 31, 2016, the aggregate regulatory net capital of Moelis UK was $8,827, which exceeded the minimum requirement by $8,774.adequacy requirements.

~~12.~~

11.

COMMITMENTS AND CONTINGENCIES

Bank ~~Line~~Lines of Credit—~~In April 2017 the~~ The Company renewed its ~~unsecured~~$65,000 revolving credit facility which extended the maturity date to June 30, ~~2019. As~~2022. Unless the lender issues a notice of ~~September~~termination at least 60 days prior to such maturity date, this facility will automatically extend to June 30, ~~2017, the commitment amount was $40,000.~~

2023. Borrowings on the facility bear interest at the greater of a fixed rate of ~~3.50%~~3.50% per annum or at the borrower’s option of (i) LIBOR plus 1%1% or (ii) Prime minus ~~1.50%~~1.50%. As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, the Company had no0 borrowings under the credit facility.

As of ~~September 30, 2017,~~March 31, 2022, the Company’s available credit under this facility was ~~$33,737~~$64,227 as a result of the issuance of an aggregate amount of ~~$6,263~~$773 of various standby letters of credit, which were required in connection with certain office lease and other agreements. The Company incurs a 1%1% per annum fee on the outstanding balance of issued letters of credit.

On May 24, 2021, U.S. Broker Dealer entered into a $30,000 revolving credit facility agreement pre-approved by FINRA to provide additional regulatory capital as necessary. Under this facility, the Company may borrow capital until May 24, 2022, the end of the credit period, and must repay aggregate principal balances by the maturity date of May 24, 2023. Borrowings on the facility bear interest equal to the Prime rate, payable quarterly in arrears of the last day of March, June, September and December of each calendar year. The Company had 0 borrowings under this credit facility and the available balance was $30,000 as of March 31, 2022.

Leases~~—The~~ —The Company maintains operating leases for corporate offices and an aircraft with various expiration dates, ~~that~~some of which extend through ~~2026.~~2036. Some leases include options to terminate or to extend the lease terms. The Company ~~incurred expense relating~~records lease liabilities measured at the present value of anticipated lease payments over the lease term, including options to ~~its operating~~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 of $3,866 and $3,342 for the three months ended September 30, 2017 and 2016, respectively, and expenses of $11,302 and $12,801 for the nine months ended September 30, 2017 and 2016, respectively. The amounts for the three and nine months ended September 30, 2016 include reductions in occupancy expenses of $260 and $784, respectively, related to sublease agreements which expired in October 2016. In addition, during the second quarter of 2016,are not readily

determinable, thus the Company ~~decided~~uses its secured borrowing rate, which was determined with reference to ~~sublet a portion~~our available credit line. See below for additional information about the Company’s leases.


	Three Months Ended
	March 31,
($ in thousands)	2022			2021
Supplemental Income Statement Information:
Operating lease cost	$	5,597		$	7,154

Supplemental Cash Flow Information:
Cash paid for amounts included in the measurement of lease liabilities:
Net operating cash outflows for operating leases	$	5,767		$	5,980
Right-of-use assets obtained in exchange for lease obligations (e.g. new leases and amendments commenced during the period):	$	—		$	321

Other Information
Weighted-average remaining lease term - operating leases		13.16	years		13.69	years
Weighted-average discount rate - operating leases		3.52	%		3.52	%

As of ~~its growth space in~~March 31, 2022, the ~~U.K. which required a~~future sublease ~~loss reserve to be recognized for the estimated net economics~~income and maturities of ~~such sublet resulting in expense of $0 and $2,359 reflected in the three and nine months ended September 30, 2016, respectively. The expense related to~~our operating leases for the three and nine months ended September 30, 2017, includes $19 and $169 for the three and nine months ended September 30, 2017, respectively, related to the aforementioned sublease loss reserve, which is remeasured at each reporting period.

~~The future minimum rental payments required under the operating leases in place at September 30, 2017,~~lease liabilities are as follows:

Fiscal year ended

Operating Leases

Sublease Income

Net Minimum Payments
Remainder of 2017

$
4,875

$
—

$
4,875
2018

18,488

(411)

18,077
2019

18,427

(560)

17,867
2020

11,693

(896)

10,797
2021

6,210

(896)

5,314
Thereafter

16,343

(3,136)

13,207
Total

$
76,036

$
(5,899)

$
70,137


Fiscal year ended	Sublease Income		Operating Leases
Remainder of 2022	$	(659)	$	16,792
2023		(878)		21,964
2024		(878)		20,066
2025		(439)		17,375
2026		—		16,300
Thereafter		—		162,584
Total Payments	$	(2,854)	$	255,081

Less: Tenant improvement allowances				(14,303)
Less: Present value adjustment				(53,371)
Total			$	187,407

Contractual Arrangements~~—In~~ —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.

~~Table of Contents~~

Legal~~—In~~ —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.

~~13.~~

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 ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, in the amounts of ~~$491~~$715 and ~~$462, respectively, and $1,497 and $1,436 for the nine months ended September 30, 2017 and 2016,~~$715, respectively.

~~14.~~ 21

13.

INCOME TAXES

Prior to the Company’s reorganization and IPO of Moelis & Company, the Company had been primarily subject to the New York City unincorporated business tax (“UBT”) and certain other foreign, state, and local 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, ~~which are primarily made up of individual partners~~except for certain other foreign, state, and ~~members and have historically not been reflected in~~local entity-level taxes (for example, the ~~condensed consolidated statements of financial condition.~~New York City Unincorporated Business Tax (“UBT”)). In ~~connection with the Company’s reorganization and IPO,~~addition, the Company ~~became~~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 ~~provision~~provisions for income ~~taxes~~tax and effective tax rate were ~~$14,354~~an expense of $13,598 and ~~25%~~15.6% and ~~$6,550~~a benefit of $176 and ~~16%~~(0.2%) for the three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, respectively. For the nine months ended September 30, 2017 and 2016, the Company’s provision for income taxes and effective tax rate were $30,900 and 19% and $16,715 and 16%,~~2021, 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 ~~and~~offset by the effect of the allocable earnings to noncontrolling interests being subject to UBT and certain other foreign, state, and local taxes. The increase in the overall effective tax rate is primarily attributable to the increase in the allocable share of earnings subject to corporate income tax rate as a result of the follow-on offerings in January and July 2017, partially offset by the recognition of excess tax ~~benefits from equity-based compensation as a component of income tax expense under ASU 2016-09.~~

The Company recorded an increase in the net deferred tax asset of $237,939 for the nine months ended September 30, 2017, which was primarily attributable to the step-up in tax basis in Group LP assets resulting from the redemption of Class A partnership unitsbenefit recognized in connection with the ~~follow-on offerings in both January~~delivery of equity-based compensation at an appreciated price above the grant date price for such equity. The excess tax benefit for the three months ended March 31, 2022 and ~~July 2017~~2021 were $8,551 and an increase in deferred compensation. Approximately $233,867 of 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 $198,787) of the tax benefits associated with this portion of the deferred tax asset are payable to such exchanging

$17,542, respectively.

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14.

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.

~~15.~~REVENUES AND BUSINESS INFORMATION

The Company’s activities as an investment banking advisory firm constitute a single business segment offering clients, including corporations, financial sponsors, governments and ~~financial sponsors,~~sovereign wealth funds, 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.

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 comprehensive 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.

~~There were no clients that accounted for more than 10% of revenues for the three or nine months ended September 30, 2017 or 2016.~~ 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 ~~sets forth~~disaggregates the ~~geographical distribution of~~ 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 September 30,

Nine Months Ended September 30,


2017

2016

2017

2016

Revenues:

United States

$
131,306

$
125,380

$
420,412

$
338,332

Europe

24,939

17,503

63,595

41,625

Rest of World

13,796

7,793

31,441

28,808

Total

$
170,041

$
150,676

$
515,448

$
408,765


	Three Months Ended March 31,
	2022		2021
Revenues:
United States	$	248,326	$	206,252
Europe		45,378		43,716
Rest of World		8,384		13,898
Total	$	302,088	$	263,866


	March 31,		December 31,
	2022		2021
Assets:
United States	$	932,684	$	1,356,193
Europe		83,845		92,605
Rest of World		80,750		106,883
Total	$	1,097,279	$	1,555,681

September 30,

December 31,

2017

2016
Assets:

United States

$
672,783

$
506,748
Europe

41,418

31,341
Rest of World

80,888

60,711
Total

$
795,089

$
598,800

As of March 31, 2022, and December 31, 2021, the Company had deferred revenues of $5,573 and $4,539, respectively. These amounts primarily consist of upfront fees and retainers for our services. During the three months ended March 31, 2022 and 2021, $2,873 and $1,682 of revenues were recognized from the opening balance of deferred revenues, respectively.

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.

~~16.~~

15.

SUBSEQUENT EVENTS

~~On October 24, 2017,~~The Company has evaluated subsequent events for adjustment to or disclosure in these condensed consolidated financial statements through the date of this report and has not identified any recordable or disclosable events not otherwise reported in these financial statements or the notes thereto other than the following event. The Board of Directors of Moelis & Company has declared a ~~quarterly~~ dividend of ~~$0.37~~$0.60 per share to be paid on ~~November 20, 2017~~June 8, 2022, to ~~shareholders~~Class A common stockholders of record ~~as of November 6, 2017.~~

On October 30, 2017, Moelis Australia’s stockholders approved a conditional placement of 10,060,000 shares to raise additional capital. The issuance of shares further reduced the Company’s ownership interest in Moelis Australia. These shares were issued at a fair value greater than the carrying value of the ownership interest disposed, resulting in a gain recorded in other income on ~~the condensed and consolidated statement of operations in the fourth quarter.~~

May 9, 2022.

~~Table of Contents~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Form ~~10‑Q~~10-Q and our audited consolidated ~~and combined~~ financial statements and notes thereto included in our Annual Report on Form ~~10‑K~~10-K for the year ended December 31, ~~2016.~~2021.

~~Forward‑Looking~~Forward-Looking Statements and Certain Factors that May Affect Our Business

The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes that appear elsewhere in this Form ~~10‑Q.~~10-Q. We have made statements in this discussion that are ~~forward‑looking statements. In some cases, you~~forward-looking statements You can identify these forward looking statements by ~~forward‑looking~~the use of words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “predict,” “potential” or “continue,” the negative of these terms and other comparable terminology. These ~~forward‑~~forward looking statements, which are subject to risks, uncertainties, and assumptions about us, may include projections of our future financial performance, based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward‑looking statements. In particular, youYou should consider the numerous risks outlined under “Risk Factors” in our Annual Report on Form ~~10‑K~~10-K and in this Form ~~10‑Q.~~10-Q.

Although we believe the expectations reflected in the ~~forward‑~~forward looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these ~~forward‑~~forward looking statements. You should not rely upon ~~forward‑~~forward looking statements as a prediction of future events. We are under no duty to and we do not undertake any obligation to update or review any of these ~~forward‑~~forward looking statements after the date of this filing to conform our prior statements to actual results or revised expectations whether as a result of new information, future developments or otherwise.

Executive Overview

Moelis & Company is a leading global independent investment bank that provides innovative strategic advice and solutions to a diverse client base, including corporations, ~~governments~~financial sponsors and governments. We assist our clients in achieving their strategic goals by offering comprehensive integrated financial ~~sponsors.~~advisory services across all major industry sectors. With ~~19 geographical~~21 locations in the Americas, Europe, the Middle East, Asia and Australia, we advise clients around the world on their most critical decisions, including mergers and acquisitions, recapitalizations and restructurings, capital markets and other corporate finance matters.

We were founded in July 2007 by veteran investment bankers to create a global independent investment bank that offers multi-disciplinary solutions and exceptional transaction execution. We opened for business in New York and Los Angeles with a team of top tier advisory professionals. The dislocation in the financial services industry caused by the global financial crisis provided us with a unique opportunity to rapidly build a firm with global scale and broad advisory expertise, and we more than tripled our professional headcount from the end of 2008 through the end of 2011. Since our founding, we have added new Managing Directors with sector, regional or transactional expertise and with strong client relationships. In addition, we have established recruiting programs at top universities to hire talented junior professionals and instituted training programs to help develop them into advisory specialists.

We have added Managing Directors to expand our sector expertise, and currently provide capabilities across all major industries including Consumer, Retail & Restaurants; Energy, Power & Infrastructure; Financial Institutions; Financial Sponsors; General Industrials; Healthcare; Real Estate, Gaming, Lodging & Leisure and Technology, Media & Telecommunications. In addition, we hired professionals to broaden our global reach and opened a network of offices, expanding into London in 2008, Sydney in 2009, Dubai in 2010, Hong Kong and Beijing in 2011, Frankfurt, Mumbai and Paris in 2012 and Melbourne and São Paulo in 2014. In regions where it made more sense to establish a partnership

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rather than build from the ground up, we entered into strategic alliances, including in Japan with Sumitomo Mitsui Banking Corporation (“SMBC”) and its subsidiary, SMBC Nikko Securities Inc. in 2012 and in Mexico with Alfaro, Dávila y Ríos, S.C. (“ADR”) in 2016. We also added regional capabilities in the U.S., opening offices in Boston in 2007, Chicago in 2008, Houston and San Francisco in 2011 and Washington DC in 2014. We have developed additional areas of advisory expertise to complement our strong M&A capabilities and to meet the changing needs of our clients. Our early investment in recapitalization and restructuring talent in mid‑2008 positioned us to capitalize on the significant increase in restructuring volume during the global financial crisis. In 2009, we added expertise in advising clients on capital markets matters and advising financial institutions on complex risk exposures. In 2014, we added capabilities to provide capital raising, secondary transaction and other advisory services to private fund sponsors and limited partners. Our ability to provide confidential, independent advisory services to our clients across sectors and regions and through all phases of the business cycle has led to ~~long‑term~~long-term client relationships and a diversified revenue base.

As of ~~September 30, 2017,~~March 31, 2022, we served our clients globally with ~~506~~682 advisory bankers. ~~We continued to grow our firm across sectors, geographies and products to deliver the most relevant advice and innovative solutions to our clients.~~

We generate revenues primarily from providing advisory services on transactions that are subject to individually negotiated engagement letters which set forth our fees. We generally generate fees at key transaction milestones, such as closing, the timing of which is outside of our control. As a result, revenues and net income in any period may not be indicative of full year results or the results of any other period and may vary significantly from year to year and quarter to quarter. The performance of our business depends on the ability of our professionals to build relationships with clients over many years by providing trusted advice and exceptional transaction execution.

Business Environment and Outlook

Economic and global financial conditions can materially affect our operational and financial performance. See “Risk Factors” in Part II. Other Information of this Form 10-Q and in our Form ~~10‑K~~10-K for a discussion of some of the factors that can affect our performance. ~~Revenues and net income in any period may not be indicative of full year results or the results of any other period and may vary significantly from year to year and quarter to quarter.~~ The M&A market data for announced and completed transactions during the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2022 and 2021, referenced throughout this Form 10-Q was obtained from ~~Thomson Financial~~Refinitiv as of ~~October~~April 5, ~~2017.~~2022, and April 5, 2021, respectively.

For the first ~~nine~~three months of ~~2017,~~2022, we earned GAAP revenues of ~~$515.4~~$302.1 million ~~an increase of 26% from the $408.8~~compared with $263.9 million earned during the same period in ~~2016.~~2021. This represents an increase of 14% year over year and compares favorably with a ~~relatively flat~~negligible increase in the number of global completed M&A transactions greater than $100 million in the same period.

The three months ended March 31, 2022 marked the slowest quarter of global M&A announcements over the last seven quarters. Despite the slowdown in announcements during the period, we believe that the underlying drivers of the robust M&A environment seen over the past eighteen months remain in place for calendar year 2022. This should allow solid levels of M&A activity to persist in the near to intermediate term. The availability of capital and financing solutions has meaningfully improved since the onset of the pandemic, and the pace of our new restructuring mandates have slowed dramatically as a ~~9% decrease in volume~~result. However, the record level of corporate debt that has accumulated may provide a solid level of restructuring activity for the ~~same period. The increase in revenue was driven by significant growth in M&A activity~~firm over the ~~prior year period and an overall higher number of completed transactions which earned higher average fees. We~~long-term. In addition, we continue to ~~see an increase~~expand our capital markets business, which positions us to provide advice to companies across all sectors on their capital and liquidity needs.

We believe that the war in Ukraine, shifts in regulatory requirements, and inflation may continue to add uncertainty to the ~~size and complexity of the transactions on which we advise.~~

~~In the U.S., which has been a particularly strong driver of~~business environment. However, our revenues, we are witnessing many companies pursue M&A in order to grow revenues and/or drive greater efficiencies by reducing costs. Based on historical experience, we believe the current economic backdrop (high corporate cash balances, relatively low interest rates and availability of credit), provides a solid foundation for M&A. In Europe, we are seeing an improvement in transaction activity as the economy appears to recover, and regions outside of the U.S. and Europe have also been positive contributorsFirm remains well positioned due to our ~~current year growth.~~

~~As our~~focused client coverage. Our team of investment banking professionals ~~expands and~~ continues to ~~gain traction, we expect our global collaboration will deepen and continue~~be very active, providing high quality advice to ~~resonate with clients. Our current conversations with~~a large number of clients ~~remain robust, and we continue to experience a growing global demand for independent advice as clients evaluate a wide range of strategic alternatives.~~around the globe.

~~Table of Contents~~

Results of Operations

The following is a discussion of our results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016.~~2021.

Three Months Ended

Nine Months Ended

September 30,

Variance

September 30,

Variance
($ in thousands)

2017

2016

2017 vs 2016


2017

2016

2017 vs 2016
Revenues

$
170,041

$
150,676

13%

$
515,448

$
408,765

26%
Expenses:

Compensation and benefits

99,694

88,046

13%

302,228

240,912

25%
Non-compensation expenses

30,468

22,516

35%

87,599

68,289

28%
Total operating expenses

130,162

110,562

18%

389,827

309,201

26%
Operating income (loss)

39,879

40,114

-1%

125,621

99,564

26%
Other income and (expenses)

14,955

187

N/M

32,888

391

N/M
Income (loss) from equity method investments

2,791

1,562

79%

4,565

3,897

17%
Income (loss) before income taxes

57,625

41,863

38%

163,074

103,852

57%
Provision for income taxes

14,354

6,550

119%

30,900

16,715

85%
Net income (loss)

$
43,271

$
35,313

23%

$
132,174

$
87,137

52%


	Three Months Ended March 31,
($ in thousands)	2022		2021		Variance
Revenues	$	302,088	$	263,866	14%
Expenses:
Compensation and benefits		176,637		156,499	13%
Non-compensation expenses		36,024		34,924	3%
Total operating expenses		212,661		191,423	11%
Operating income (loss)		89,427		72,443	23%
Other income and (expenses)		(2,235)		3,179	N/M
Income (loss) before income taxes		87,192		75,622	15%
Provision (benefit) for income taxes		13,598		(176)	N/M
Net income (loss)	$	73,594	$	75,798	-3%

N/M = Not meaningful

Revenues

We operate in a highly competitive environment. Each ~~revenue‑generating~~revenue-generating engagement is separately solicited, awarded and negotiated, and there are usually no ~~long‑term~~long-term contracted sources of revenue. As a consequence, our ~~fee‑paying~~fee-paying client engagements are not predictable, and high levels of revenues in one ~~quarter~~period are not necessarily predictive of continued high levels of revenues in future periods. To develop new business, our professionals maintain an active ~~business~~ dialogue with a large number of existing and potential clients. We add new clients each year as our bankers continue to expand their relationships, as we hire senior bankers who bring their client relationships and as we receive introductions from our relationship network of senior executives, board members, attorneys and other third parties. We also lose clients each year as a result of the sale or merger of clients, changes in clients’ senior management, competition from other financial services firms and other causes.

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 vast majority of our advisory revenues are recognized over time, although the recognition of our transaction fees are constrained until the engagement is substantially complete.

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, or 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~~out-of-pocket expenses.

We do not allocate our ~~revenues~~revenue by the type of advice we provide ~~(M&A, recapitalizations and restructurings or other corporate finance matters)~~ because of the complexity of the transactions on which we may earn ~~revenues~~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.

~~Table of Contents~~

Three Months Ended ~~September 30, 2017~~March 31, 2022 versus ~~2016~~2021

Revenues were ~~$170.0~~$302.1 million for the three months ended ~~September 30, 2017~~March 31, 2022 as compared with ~~$150.7~~$263.9 million for the same period in ~~2016,~~2021, representing an increase of ~~13%~~14%. The increase in revenues was primarily driven by ~~higher~~an increase in average fees earned per completed ~~transaction.~~transaction as compared to the prior year period.

For the three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021, we earned revenues from ~~121~~145 clients and ~~151~~178 clients, respectively, and the number of clients ~~who~~that paid fees equal to or greater than $1 million ~~decreased to 40~~was 58 clients ~~from 49~~and 68 clients, ~~for the same period of 2016.~~respectively.

~~Nine Months Ended September 30, 2017 versus 2016~~24

Revenues were $515.4 million for the nine months ended September 30, 2017 as compared with $408.8 million for the same period in 2016, representing an increase of 26%. The increase in revenues was primarily driven by increased completed transactions and higher average fees per completed transaction.

For the nine months ended September 30, 2017 and 2016 we earned revenues from 251 and 246 clients, respectively, and the number of clients who paid fees equal to or greater than $1 million increased to 131 clients from 120 clients for the same period of 2016.

Operating Expenses

The following table sets forth information relating to our operating ~~expenses, which are reported net of reimbursements by our clients:~~expenses:


	Three Months Ended					Nine Months Ended
	September 30,				Variance	September 30,				Variance	Three Months Ended March 31,
($ in thousands)	2017		2016		2017 vs 2016	2017		2016		2017 vs 2016	2022		2021		Variance
Expenses:
Compensation and benefits	$	99,694	$	88,046	13%	$	302,228	$	240,912	25%	$	176,637	$	156,499	13%
% of revenues		59%		58%			59%		59%			58%		59%
Non-compensation expenses	$	30,468	$	22,516	35%	$	87,599	$	68,289	28%	$	36,024	$	34,924	3%
% of revenues		18%		15%			17%		17%			12%		13%
Total operating expenses	$	130,162	$	110,562	18%	$	389,827	$	309,201	26%	$	212,661	$	191,423	11%
% of revenues		77%		73%			76%		76%			70%		73%

Our operating expenses are classified as compensation and benefits expenses and ~~non‑compensation expenses, and headcount is the primary driver of the level of our~~non-compensation expenses. Compensation and benefits expenses account for the majority of our operating expenses. ~~Non‑compensation~~Non-compensation expenses, which include the costs of professional fees, travel and related expenses, communication, technology and information services, occupancy, depreciation and other expenses, generally have been less significant in comparison with compensation and benefits expenses. ~~Expenses are recorded on the condensed consolidated statements of operations, net of any expenses reimbursed by clients.~~

Three Months Ended ~~September 30, 2017~~March 31, 2022 versus ~~2016~~2021

Operating expenses were ~~$130.2~~$212.7 million for the three months ended ~~September 30, 2017~~March 31, 2022 and represented ~~77%~~70% of revenues, compared with ~~$110.6~~$191.4 million for the same period in ~~2016~~2021 which represented 73% of revenues. The increase in operating expenses was primarily driven by increased ~~headcount~~compensation and ~~transaction related charges~~benefits expenses associated with ~~an increase in revenues.~~

~~Table of Contents~~

~~Nine Months Ended September 30, 2017 versus 2016~~

Operating expenses were $389.8 million for the nine months ended September 30, 2017 and represented 76% of revenues, compared with $309.2 million for the same period in 2016 which represented 76% of revenues. The increase in operating expenses was primarily driven by increased compensation and non-compensation expenses in-line with the growth ingreater revenues and ~~higher equity amortization as compared to the prior year.~~headcount.

Compensation and Benefits Expenses

Our compensation and benefits expenses are determined by management based on revenues earned, the mark-to-market impact on investments where our employees and the Moelis advisory platform contributed meaningfully to the value, the competitiveness of the prevailing labor market and anticipated compensation requirements for our employees, the level of recruitment of new Managing Directors and other bankers, the amount of compensation expenses amortized ~~for~~related to equity awards and other relevant factors. As a result, our compensation expenses may fluctuate materially in any particular period. Accordingly, the amount of compensation expenses recognized in any particular period may not be consistent with prior periods or indicative of future periods.

Our compensation expenses consist of base salary and benefits, annual incentive compensation payable as cash bonus awards, including certain amounts subject to clawback and contingent upon a required period of service (“contingent cash awards”) and amortization of ~~equity‑based~~equity-based compensation awards. Base salary and benefits are paid ratably throughout the year. Equity awards are amortized into compensation expenses on a graded basis (based upon the fair value of the award at the time of grant) during the service period over which the award vests, which is typically four or five years. The awards are recorded within equity as they are expensed. Contingent cash awards are amortized into compensation expenses over the required service period. ~~Cash bonuses,~~Incentive compensation, which ~~are~~is accrued ~~each quarter, are~~throughout the year, is discretionary and dependent upon a number of factors including the performance of the Company and ~~are~~is generally awarded and paid during the first two months of ~~each calendar~~the year with respect to prior year performance. The number of equity units granted (subject to a vesting schedule) as a component of the annual incentive award is determined with reference to the Company’s ~~estimate of~~ grant date fair ~~value, which in turn determines the number of equity awards granted subject to a vesting schedule.~~value.

Our compensation expenses are primarily based upon revenues, prevailing labor market conditions and other factors that can fluctuate, including headcount, and as a result, our compensation expenses may fluctuate materially in any particular period. Accordingly, the amount of compensation expenses recognized in any particular period may not be consistent with prior periods or indicative of future periods.

Three Months Ended ~~September 30, 2017~~March 31, 2022 versus ~~2016~~2021

For the three months ended ~~September 30, 2017, compensation‑~~March 31, 2022, compensation related expenses of ~~$99.7~~$176.6 million represented 58% of revenues, compared with $156.5 million which represented 59% ~~of revenues, compared with $88.0 million of compensation-related expenses which represented 58%~~ of revenues in the prior year period. ~~The increase in~~In comparison to the prior year period, compensation expenses ~~was~~increased primarily ~~driven by~~due to higher discretionary bonus expense associated with greater ~~revenue during 2017 as compared with 2016.~~

~~Our fixed compensation costs, which are primarily the sum of base salaries, payroll taxes~~revenues and benefits and the amortization of previously issued equity and contingent cash awards, were $66.4 million and $57.0 million for the three months ended September 30, 2017 and 2016, respectively. The increase in fixed compensation costs relates to increaseda higher headcount ~~and higher equity amortization~~ as compared to the prior year. The aggregate amount of discretionary cash bonus expenses, which generally represents the excess amount of total compensation over base compensation and amortization of equity and contingent cash awards, was $33.3 million and $31.0 million for the three months ended September 30, 2017 and 2016, respectively. The combination of the discretionary and fixed compensation expenses represents the overall compensation expense pool. The increase in discretionary cash bonus expense is primarily related to higher revenues earned, partially offset by the increase in fixed compensation expense.

~~Nine Months Ended September 30, 2017 versus 2016~~Non-Compensation Expenses

For the nine months ended September 30, 2017, compensation related expenses of $302.2 million which represented 59% of revenues, compared with $240.9 million which also represented 59% of revenues in the prior year

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~~period. The increase in compensation expenses was primarily driven by greater revenue during 2017 as compared with 2016.~~

Our fixed compensation costs, which are primarily the sum of base salaries, payroll taxes and benefits and the amortization of previously issued equity and contingent cash awards, were $196.6 million and $173.0 million for the nine months ended September 30, 2017 and 2016, respectively. The increase in fixed compensation expense relates to an increase in headcount (which drives salaries and benefits) and higher equity amortization as compared to the prior year. The aggregate amount of discretionary cash bonus expenses, which generally represents the excess amount of total compensation over base compensation and amortization of equity and contingent cash awards, was $105.6 million and $67.9 million for the nine months ended September 30, 2017 and 2016, respectively. The combination of the discretionary and fixed compensation expenses represents the overall compensation expense pool. The increase in discretionary cash bonus expense is primarily related to higher revenues earned, partially offset by the increase in fixed compensation expense.

~~Non‑Compensation Expenses~~

~~Our non‑compensation~~non-compensation expenses include the costs of occupancy, professional fees, communication, technology and information services, travel and related expenses, depreciation and other expenses. ~~Reimbursed client expenses are netted within the appropriate non‑compensation expense line.~~

Historically, our ~~non‑compensation~~non-compensation expenses ~~associated with business development~~ have increased as we have increased headcount ~~and the related non‑compensation support costs~~ which results from growing our business. This trend of growth in non-compensation expense may continue as we expand into new sectors, geographies and products to serve our clients’ growing needs.

Three Months Ended ~~September 30, 2017~~March 31, 2022 versus ~~2016~~2021

For the three months ended ~~September 30, 2017,~~March 31, 2022, non‑compensation expenses of ~~$30.5~~$36.0 million represented ~~18%~~12% of revenues, compared with ~~$22.5~~$34.9 million which represented ~~15%~~13% of revenues in the prior year period. The increase in non-compensation ~~expense~~expenses is primarily ~~due~~related to increased travel and other related expenses, as compared to the prior year period.

Other Income and ~~professional fees, most~~Expenses

Other income and expenses consists of ~~which are~~earnings from equity method investments, gains and losses on investments, interest income and expense, and other infrequent gains or losses.

Three Months Ended March 31, 2022 versus 2021

For the three months ended March 31, 2022, other income and expenses were expenses of $2.2 million, primarily related to ~~greater transaction related charges and increased business development activities.~~

~~Nine Months Ended September 30, 2017 versus 2016~~

~~For~~unrealized losses of $3.9 million from the ~~nine months ended September 30, 2017, non-compensation expenses~~mark-to-market impact on equity instruments measured at fair value, as compared to income of ~~$87.6~~$3.2 million ~~represented 17% of revenues, compared with $68.3 million which represented 17% of revenues~~ in the prior year ~~period. Non-compensation increased in line with revenues year over year. The increase in non-compensation expense~~period which was primarily related to ~~increased professional fees, and travel and related expenses, most of which are related to greater transaction related charges and increased business development activities.~~

~~Income (Loss) From 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 on the condensed consolidated statements of financial condition reflect the Company’sCompany's share of ~~contributions made to, distributions received~~earnings from ~~and the equity earnings and losses of, the investments. The Company reflects~~ its ~~share of gains and losses of the~~ investment in income (loss) from equity method investments in the condensed consolidated statements of operations. Certain adjustments have been made to account for the Company’s equity method investment in Moelis Australia Limited under US GAAP as Moelis Australia follows local accounting principles under Australian Accounting Standards.MA Financial.

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~~Moelis Australia~~

On April 1, 2010, we entered into a joint venture in Moelis Australia Holdings PTY Limited, investing a combination of cash and certain net assets in exchange for a 50% interest in the venture. The remaining 50% was owned by an Australian trust established by and for the benefit of Australian executives. 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. As a result of the offering, the Company’s ownership interest in Moelis Australia was diluted and the Company recognized a gain of approximately $15.2 million recorded in other income and expenses on the condensed consolidated statement of operations. Contemporaneous with the offering, Moelis Australia agreed to terminate an asset management related revenue sharing agreement resulting in a payment to a third party, of which the Company recognized a charge of approximately $2.4 million in income (loss) from equity method investments. On September 13, 2017, Moelis Australia completed an offering of 11,940,000 shares and the Company recognized a gain of $14.4 million on the dilution in ownership which was recorded in other income and expenses on the condensed consolidated statement of operations. See Note 4 of the condensed consolidated financial statements included in this Form 10-Q for further information.

Moelis Australia’s business is offering advisory services as well as equity capital markets and research business, sales and trading business covering Australian public equity securities and an asset management business. Advisory fees are generally recognized at key transaction milestones, so the revenues earned by Moelis Australia can vary significantly period to period. Moelis Australia has offices in Sydney and Melbourne.

~~Three Months Ended September 30, 2017 versus 2016~~

Income (loss) from equity method investments related to our share of gains and losses of Moelis Australia was income of $2.8 million and $1.6 million for the three months ended September 30, 2017 and 2016, respectively.

~~Nine Months Ended September 30, 2017 versus 2016~~

Income (loss) from equity method investments related to our share of gains and losses of Moelis Australia was income of $4.6 million and $2.2 million for the nine months ended September 30, 2017 and 2016, respectively.

~~Other Equity Method Investment~~

In June 2014, the Company made an investment into a general partner entity which invests third‑party funds and is controlled by a related party, Moelis Asset Management LP. The Company determined that it should account for this investment as an equity method investment on its condensed consolidated financial statements. The investment was substantially liquidated during the year ended December 31, 2016.

~~Three and Nine Months Ended September 30, 2016~~

Income (loss) from equity method investments related to our investment in an entity which invests in funds was income of nil and $1.7 million for the three and nine months ended September 30, 2016, respectively.

Provision for Income Taxes

Prior to the Company’s reorganization and IPO of Moelis & Company, the Company had been primarily subject to the New York City unincorporated business tax (“UBT”) and certain other foreign, state, and local 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, ~~which are primarily made up of individual partners~~except for certain foreign, state and ~~members and have historically not been reflected in~~local income taxes (for example, the ~~consolidated statements of financial condition. In connection with the Company’s reorganization and~~

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~~IPO, the~~New York City unincorporated business tax (“UBT”)). The Company ~~became~~is subject to U.S. corporate, federal, state, and local income tax on its allocable share of results of operations from Group LP.

Three Months Ended ~~September 30, 2017~~March 31, 2022 versus ~~2016~~2021

The Company’s provision for income taxes and effective tax rates were ~~$14.4~~an expense of $13.6 million and ~~25%~~15.6% and ~~$6.6~~a benefit of $0.2 million and ~~16%~~(0.2%), for the three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, respectively. The income tax provision and effective tax rate for the aforementioned periods primarily reflect the Company’s allocable share of ~~earnings~~operating results from Group LP at the prevailing U.S. federal, state, and local corporate income tax rate, and the effect of the allocable earnings to noncontrolling interests being subject to UBT and certain other foreign, state, and local taxes. The increase in the overall effective tax rate is primarily attributable to the increase in the allocable share of earnings subject to corporate income tax rate as a result of the follow-on offerings in January and July 2017, partially offset by the ~~recognition~~impact of the excess tax ~~benefits from~~benefit recognized in connection with equity-based compensation asdelivered at a ~~component of income tax expense under ASU 2016-09.~~price above the grant date price.

~~Nine Months Ended September 30, 2017 versus 2016~~

The Company’s provision for income taxes and effective tax rates were $30.9 million and 19% and $16.7 million and 16% for the nine months ended September 30, 2017 and 2016, respectively. The increase in the overall effective tax rate is primarily attributable to the increase in the allocable share of earnings subject to corporate income tax rate as a result of the follow-on offerings in January and July 2017, partially offset by the recognition of excess tax benefits from equity-based compensation as a component of income tax expense under ASU 2016-09.

Liquidity and Capital Resources

Our current assets have historically been comprised of cash, ~~short‑~~short term liquid investments and receivables related to fees earned from providing advisory services. Our current liabilities are primarily comprised of accrued expenses, including accrued employee compensation. We pay a significant portion of incentive compensation during the first two months of each calendar year with respect to the prior year’s results. We also distribute estimated partner tax payments primarily in the first quarter of each year inwith respect ofto the prior year’s operating results. Therefore, levels of cash generally decline during the first quarter of each year after incentive compensation has been paid to our employees and estimated tax payments have been distributed to partners. Cash before dividends and share buybacks then typically builds over the remainder of the year.

We evaluate our cash needs on a regular basis in light of current market conditions. 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~~As of March 31, 2022 and December 31, 2021, the Company had cash equivalents of ~~$68.3~~$21.0 million and ~~$246.9~~$385.0 million, ~~as of September 30, 2017 and December 31, 2016,~~ respectively, invested in U.S. Treasury instruments ~~government debt securities~~ and ~~government securities~~ money market ~~funds.~~securities. Additionally, as of March 31, 2022 and December 31, 2021, the Company had cash of ~~$59.3~~$109.4 million and ~~$72.0~~$135.2 million, ~~as of September 30, 2017 and December 31, 2016,~~ respectively, maintained in U.S. and non‑U.S. bank accounts, of which most bank account balances exceeded the U.S. Federal Deposit Insurance Corporation (“FDIC”) and U.K. Financial Services Compensation Scheme (“FSCS”) coverage limits.

In addition to cash and cash equivalents, we hold various types of government debt securities ~~and U.S. treasury instruments~~ that are classified as investments on our condensed consolidated statements of financial condition as they have original maturities of three months or more from the date of purchase. ~~The~~As of March 31, 2022 and December 31, 2021, the Company held ~~$116.1~~$171.1 million and ~~$33.0~~$201.0 million of ~~government debt securities including the~~ U.S. ~~Treasury~~treasury instrumentsclassified as investments, ~~as of September 30, 2017 and December 31, 2016,~~ respectively.

Our liquidity is highly dependent upon cash receipts from clients which generally requires the successful completion of transactions. The timing of receivable collections typically occurs within 60 days of billing. As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 accounts receivable were ~~$50.5~~$39.3 million and ~~$23.2~~$41.9 million, respectively, net of allowances of ~~$1.5~~$2.3 million and ~~$0.5~~$2.8 million, respectively.

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To provide for additional working capital and other general corporate purposes, we maintain a ~~$40.0~~$65.0 million ~~unsecured~~revolving credit facility. In addition, Moelis & Company LLC ("U.S. Broker Dealer") maintains a $30.0 million revolving credit facility ~~that matures on~~agreement pre-approved by FINRA to provide additional regulatory capital as necessary.

Unless the lender of the $65.0 million facility issues a notice of termination at least 60 days prior to the maturity date of June 30, ~~2019.~~2022, this facility will automatically extend to June 30, 2023. Advances on the facility bear interest at the greater of a fixed rate of 3.50% per annum or at the Company’s option of (i) LIBOR plus 1% or (ii) Prime minus 1.50%. As of ~~September 30, 2017,~~March 31, 2022, the Company had no borrowings under the credit facility.

As of ~~September 30, 2017,~~March 31, 2022, the Company’s available credit under this facility was ~~$33.7~~$64.2 million as a result of the issuance of an aggregate amount of ~~$6.3~~$0.8 million of various standby letters of credit, which were required in connection with certain office leases and other agreements. The Company incurs a 1% per annum fee on the outstanding balances of issued letters of credit.

AUnder the $30.0 million facility, U.S. Broker Dealer may borrow capital until May 24, 2022, the end of the credit period, and must repay aggregate principal balances by the maturity date of May 24, 2023. Borrowings on the facility bear interest equal to the Prime rate, payable quarterly in arrears on the last day of March, June, September and December of each calendar year. U.S. Broker Dealer had no borrowing under the credit facility and the available credit under this facility was $30.0 million as of March 31, 2022.

The Board of Directors of Moelis & Company declared a regular quarterly dividend of ~~$0.37~~$0.60 per share. The $0.60 per share ~~was declared on July 24, 2017 which was~~will be paid on ~~August 17, 2017~~June 8, 2022 to Class A common shareholders of record on ~~August 3, 2017. In addition, a quarterly dividend of $0.37 per share was declared on October 24, 2017.~~May 9, 2022. During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 the Company paid aggregate dividends of ~~$3.36~~$0.60 per share.

During the three months ended March 31, 2022 and 2021, the Company repurchased 2,021,455 and 1,363,934 shares, respectively, pursuant to the Company’s share ~~which included special dividends~~repurchase program and shares repurchased from its employees for the purpose of ~~$1.25 and $1.00 per share and three regular quarterly dividends~~settling tax liabilities incurred upon delivery of ~~$0.37 per share.~~equity-based compensation awards. In July 2021, the Board of Directors authorized the repurchase of an additional $100 million of shares of Class A common stock and/or Class A partnership units of Group LP with no expiration date. The remaining balance of shares authorized for repurchase under the program was $109.0 million as of March 31, 2022.

Regulatory Capital

We actively monitor our regulatory capital base. Our principal subsidiaries are subject to regulatory requirements in their respective jurisdictions to ensure general financial soundness and liquidity. This requires, among other things, that we comply with certain minimum capital requirements, record‑keeping, reporting procedures, experience and training requirements for employees and certain other requirements and procedures. These regulatory requirements may restrict the flow of funds to and from affiliates. See Note 1110 of the condensed consolidated financial statements ~~as of September 30, 2017~~ for further information. These regulations differ in the United States, United Kingdom, Hong Kong and other countries in which we operate a registered broker‑dealer. The license under which we operate in each such country is meant to be appropriate to conduct an advisory business. We believe that we provide each of our subsidiaries with sufficient capital and liquidity, consistent with their business and regulatory requirements.

Tax Receivable Agreement

In connection with the IPO in April 2014, we entered into a tax receivable agreement with our eligible Managing Directors that provides for the payment to 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 we realize as a result of (a) the increases in tax basis attributable to exchanges by our eligible Managing Directors and (b) tax benefits related to imputed interest deemed to be paid by us as a result of this tax receivable agreement. The Company expects to benefit from the remaining 15% of income tax cash savings, if any, that we realize.

For purposes of the tax receivable agreement, income tax cash savings will be computed by comparing our actual income tax liability to the amount of such taxes that we 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 we 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 we exercise our right to terminate the tax receivable agreement for an amount based on an agreed value of payments remaining to be made under the agreement.

Payments made under the tax receivable agreement are required to be made within 225 days of the filing of our tax returns. Because we generally expect to receive the tax savings prior to making the cash payments to the eligible selling holders of Group LP partnership units, we do not expect the cash payments to have a material impact on our liquidity.

In addition, the tax receivable agreement provides that, upon a merger, asset sale, or other form of business combination or certain other changes of control or if, at any time, we elect an early termination of the tax receivable agreement, our (or our successor’s) obligations with respect to exchanged or acquired units (whether exchanged or

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acquired before or after such change of control or early termination) will be based on certain assumptions, including that we would have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement, and, in the case of an early termination election, that any units that have not been exchanged are deemed exchanged for the market value of the Class A common stock at the time of

termination. Consequently, it is possible, in these circumstances, that the actual cash tax savings realized by us may be significantly less than the corresponding tax receivable agreement payments.

Cash Flows

Our operating cash flows are primarily influenced by the amount and timing of receipt of advisory fees, which are generally collected within 60 days of billing, and the payment of operating expenses, including payments of incentive compensation to our employees. We pay a significant portion of incentive compensation during the first two months of each calendar year with respect to the prior year’s results. Our investing and financing cash flows are primarily influenced by activities to fund investments and payments of dividends and estimated partner taxes. A summary of our operating, investing and financing cash flows is as follows:


	Nine Months Ended
	September 30,				Three Months Ended March 31,
($ in thousands)	2017		2016		2022		2021
Cash Provided By (Used In)
Operating Activities:
Net income (loss)	$	132,174	$	87,137	$	73,594	$	75,798
Non-cash charges		58,280		53,668		67,983		74,191
Other operating activities		(55,170)		(46,890)		(414,031)		(172,956)
Total operating activities		135,284		93,915		(272,454)		(22,967)
Investing Activities		(87,347)		1,471		27,360		90,854
Financing Activities		(241,806)		(138,372)		(143,724)		(113,896)
Effect of exchange rate changes		2,543		(2,425)		(1,141)		(792)
Net increase (decrease) in cash		(191,326)		(45,411)		(389,959)		(46,801)
Cash and cash equivalents, beginning of period		318,926		248,022
Cash and cash equivalents, end of period	$	127,600	$	202,611
Cash, cash equivalents, and restricted cash, beginning of period						521,014		203,284
Cash, cash equivalents, and restricted cash, end of period					$	131,055	$	156,483

~~Nine~~Three months ended ~~September 30, 2017~~March 31, 2022

Cash, ~~and~~ cash equivalents and restricted cash were ~~$127.6~~$131.1 million at ~~September 30, 2017,~~March 31, 2022, a decrease of ~~$191.3~~$390.0 million from ~~$318.9~~$521.0 million ~~of cash and cash equivalents~~ at December 31, ~~2016.~~2021. Operating activities resulted in a net ~~inflow~~outflow of ~~$135.3~~ $272.5million primarily attributable to cash collected from clients, net of cash operating ~~expenses,~~outflows, including discretionary bonuses paid during the period. Investing activities resulted in a net ~~outflow~~inflow of ~~$87.3~~$27.4 million primarily attributable to ~~purchases~~net proceeds from the sale of investments. Financing activities resulted in a net outflow of ~~$241.8~~$143.7 million primarily related to treasury stock purchases and the payment of dividends and tax distributions.

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~~Nine~~Three months ended ~~September 30, 2016~~March 31, 2021

Cash, ~~and~~ cash equivalents and restricted cash were ~~$202.6~~$156.5 million at ~~September 30, 2016,~~March 31, 2021, a decrease of ~~$45.4~~$46.8 million from ~~$248.0~~$203.3 million ~~of cash and cash equivalents~~ at December 31, ~~2015.~~2020. Operating activities resulted in a net ~~inflow~~outflow of ~~$93.9~~ $23.0million primarily attributable to cash collected from clients, net of cash operating outflows, including discretionary bonuses paid during the ~~period, partially offset by discretionary bonuses earned in 2015 and paid in 2016.~~period. Investing activities resulted in a net inflow of ~~$1.5~~$90.9 million primarily attributable to net proceeds from the sale ~~of investments partially offset by the purchase~~ of investments. Financing activities resulted in a net outflow of ~~$138.4~~$113.9 million primarily related to treasury stock purchases and the payment of ~~dividend~~dividends and tax distributions.

Contractual Obligations

~~The following table sets forth information relating to our contractual obligations as of September 30, 2017:~~

Payment Due by Period




Less than





More than

($ in thousands)

Total

1 Year

1 – 3 Years

3 – 5 Years

5 Years

Operating leases (net of $5,898 of committed sublease income)

$
70,137

$
4,875

$
35,944

$
16,111

$
13,207

Amount due pursuant to Tax Receivable Agreement

314,747

5,384

25,723

31,640

252,000

Total

$
384,884

$
10,259

$
61,667

$
47,751

$
265,207

As of ~~September 30, 2017,~~March 31, 2022, the Company has a total payable of ~~$314.7~~$307.1 million due pursuant to the tax receivable agreement in the condensed consolidated financial statements ~~which represents~~and of this amount an estimated $5.5 million will be due in less than one year. These amounts represent management’s best estimate of the amounts currently expected to be owed under the tax receivable agreement. Payments made under the tax receivable agreement are required to be made within 225 days of the filing of our tax returns. ~~Because we~~We generally expect to receive the tax savings prior to making the cash payments to the eligible selling holders of Group LP partnership ~~units, we~~units. We do not expect the cash payments to have a material impact on our liquidity. ~~A payment~~There were payments of ~~$5,032 was~~$0.2 million made ~~during the first quarter of 2017, due~~ pursuant to the tax receivable ~~agreement.~~agreement during the first three months of 2022.

~~Off‑Balance Sheet Arrangements~~

~~We do not invest in any off‑balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us~~Additionally, the Company has contractual obligations related to ~~any liability that is not reflected in our~~its leases for corporate office space and an aircraft. See Note 11 to the condensed consolidated financial statements ~~except~~ for ~~those described under “Contractual Obligations” above.~~details regarding when these obligations are due.

Market Risk and Credit Risk

Our business is not ~~capital‑intensive~~capital-intensive and we do not invest in derivative instruments or, generally, borrow through issuing debt. As a result, we are not subject to significant market risk (including interest rate risk, foreign currency exchange rate risk and commodity price risk) or credit risk.

Risks Related to Cash and ~~Short‑Term~~Short-Term Investments

Our cash and cash equivalents include all ~~short‑term~~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. We invest most of our cash in highly-rated municipal bonds, U.S. government agency debt securities and U.S. ~~Treasury~~treasury instruments. Cash is maintained in U.S. and ~~non‑U.S.~~non-U.S. bank accounts. Most U.S. and U.K. account balances exceed the FDIC and FSCS coverage limits. In addition to cash and cash equivalents, we hold ~~government debt securities and~~various types of U.S. ~~Treasury~~treasury instruments that are classified as investments on our condensed consolidated statement of financial condition as they have original maturities of three months or more (but less than twelve months) from the date of purchase. We believe our cash and ~~short‑term~~short-term investments are not subject to any material interest rate risk, equity price risk, credit risk or other market risk.

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Credit Risk

We regularly review our accounts receivable and allowance for ~~doubtful accounts~~credit losses by considering factors such as historical experience, credit quality, age of the accounts receivable, and the current economic conditions that may affect a customer’s ability to pay such amounts owed to the Company. We maintain an allowance for ~~doubtful accounts~~credit losses that, in our opinion, provides for an adequate reserve to cover losses that may be incurred. See “—Critical Accounting ~~Policies—~~Policies and Estimates—Accounts Receivable and Allowance for ~~Doubtful Accounts.~~Credit Losses.”

Exchange Rate Risk

The Company is exposed to the risk that the exchange rate of the U.S. dollar relative to other currencies may have an adverse effect on the reported value of the Company’s non‑U.S. dollar denominated assets and liabilities. Non‑functional currency‑related transaction gains and losses are recorded in the condensed consolidated statements of operations. In addition, the reported amounts of our revenues and other income from investments may be affected by movements in the rate of exchange between the pound sterling, euro, Brazilian real, Hong Kong dollar, Israeli shekel, rupee, Australian dollar, Saudi riyal and the U.S. dollar, in which our financial statements are denominated. For the three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, the net impact of the fluctuation of foreign currencies in other comprehensive income (loss) in the condensed consolidated statements of comprehensive income ~~was a gain~~were losses of ~~$1.0~~$0.8 million and ~~a loss of~~ $0.7 million, ~~respectively, and a gain of $2.4 million and a loss of $1.4 million for the nine months ended September 30, 2017 and 2016,~~ respectively. We have not entered into any transactions to hedge our exposure to these foreign currency fluctuations through the use of derivative instruments or other methods.

Critical Accounting Policies and Estimates

We believe that the critical accounting policies and estimates included below represent those that are most important to the presentation of our financial condition and results of operations and require management’s most difficult, subjective and complex judgment.

The preparation of 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 for which they are determined to be necessary.

~~All intercompany balances and transactions within the Company have been eliminated.~~

Revenue and Expense Recognition

We earn substantially all of our revenues by providing advisory services on mergers and acquisitions, recapitalizations and restructurings, capital markets transactions, private fund raisings and secondary transactions, and other corporate finance matters. The Company also acts as an underwriter of certain securities offerings. We provide our advisory services on an ongoing basis which, for example, may include evaluating and selecting one of multiple strategies. In many cases, we are not paid until the completion of an underlying transaction.

The Company recognizes ~~revenues from providing~~the vast majority of its advisory services revenue over time, including reimbursements for certain out-of-pocket expenses, when ~~earned~~or as our performance obligations are fulfilled and collection is reasonably assured. ~~Upfront fees and retainers~~The determination of whether revenues are recognized over time or at a point in time depends upon the ~~estimated period during which~~type of service being provided and the related performance obligations. We identify the performance obligations in our engagement letters and determine which services are distinct (i.e. separately identifiable and the client could benefit from such service on its own). We allocate the transaction price to ~~be performed. Transaction‑related~~the respective performance obligations by estimating the amount of consideration we expect in exchange for providing each service. Both the identification of performance obligations and the allocation of transaction price to the respective performance obligations requires significant judgment.

During such advisory engagements, our clients are continuously benefitting from our advice and the over time recognition matches the transfer of such benefits. However, the recognition of transaction fees, which are ~~recognized when~~variable in nature, is constrained until substantially all services ~~for a transaction~~ have been provided, specified conditions have been met (e.g. transaction closing) 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.

With respect to fairness opinions, fees are fixed and delivering the opinion is a separate performance obligation from other advisory services that may be promised under the same engagement letter; as such these revenues are recognized at a point in time when the engagement is formally completed and the ~~transaction closes. Deferred~~client can obtain substantially all of the benefits from the service. Similarly, underwriting engagements are typically a single performance obligation and fees are generally recognized as revenue when the offering has been deemed to be completed by the lead manager of the underwriting group. In these instances, 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 ~~are recorded for~~when it receives fees ~~received~~from clients that have not yet been ~~earned. Expenses~~earned (e.g. an upfront fee) or when the Company has an unconditional right to consideration before all performance obligations are ~~recorded on~~complete (e.g. upon satisfying conditions to earn an announcement fee, but before the ~~condensed consolidated financial statements, net of client reimbursements.~~transaction is consummated).

Accounts Receivable and Allowance for ~~Doubtful Accounts~~Credit Losses

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

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~~factors such as historical experience, credit quality,~~ age of the ~~accounts~~ receivable, in addition to considerations of historical charge-offs and ~~the~~ current economic ~~conditions that may affect a customer’s ability to pay such amounts owed to the Company.~~conditions.

~~Equity‑based Compensation~~

~~The Company recognizes~~credit losses. If a reserved accounts receivable is subsequently collected, such recoveries reduce the cost of employee services received in exchange for an equity instrument award. 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 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 issued prior to December 1, 2016, the employee must (i) be at least 54 years old and (ii) have provided at least 8 consecutive years of service to the Company. For qualifying awards issued on or after December 1, 2016, (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 eligiblegross receivable and the ~~related requisite service period over~~allowance for credit losses and is a reduction of bad debt expense, which we will expense these awards will be shorter than the stated vesting period. Any unvested RSUs prior to meeting the stated requisite service period or retirement eligibility date are eligible to receive dividends in kind; however, the right to dividends in kind will be forfeited if the underlying award does not vest.

~~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 amountsis recorded within other expenses on the condensed consolidated ~~financial statements~~statement of ~~financial condition reflects~~operations. The combination of recoveries and the provision for credit losses of a reported period comprise 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 income (loss) from equity method investments in the condensed consolidated statements of operations. Certain adjustments have been made to account for the Company’s equity method investment in Moelis Australia Limited under US GAAP as Moelis Australia follows local accounting principles under Australian Accounting Standards.bad debt expense.

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.~~assets. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is ~~more‑likely‑than‑not~~more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

~~Table of Contents~~

ASC ~~740‑10~~740 prescribes a ~~two‑step~~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 ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, 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‑~~tax related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. For the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, no such amounts were recorded.

Recent Accounting Developments

For a discussion of recently issued accounting developments and their impact or potential impact on our condensed consolidated financial statements, see Note 3—Recent Accounting Pronouncements, of the condensed consolidated financial statements included in this Form ~~10‑Q.~~10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative disclosures about market risk are set forth above in “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Risk and Credit Risk.”

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in rule ~~13a‑15(e)~~13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Controls

No change in our internal control over financial reporting (as defined in Rule ~~13a‑15(f)~~13a-15(f) and ~~15d‑15(f)~~15d-15(f) of the Exchange Act) occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~Table of Contents~~

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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~~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~~cease-and-desist orders or the suspension or expulsion of a ~~broker‑dealer,~~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.

Item 1A. Risk Factors

There have been no material changes to the Risk Factors described in Part I "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 as filed with the Securities and Exchange Commission ("SEC") as supplemented by the additional risk factor described in Part II Item 1A, “Risk Factors – We will cease to be an emerging growth company at the end of fiscal year 2017” in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017..

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales

None.

Issuer Purchases of Equity Securities in the first quarter of 2022


						Approximate Dollar
						Value of Shares
				Shares Purchased		that May Yet be
	Total Number			as Part of Publicly		Purchased Under
	of Shares	Average Price		Announced Plans		the Plan
Period	Purchased(1)	Paid per Share		or Programs(2)(3)		Or Programs(2)(3)
January 1 - January 31	170,020	$	54.79		170,020	$	138.8 million
February 1 - February 28	1,473,117		48.08		284,339		124.0 million
March 1 - March 31	378,318		47.03		320,340		109.0 million
Total	2,021,455	$	48.44		774,699	$	109.0 million

Approximate Dollar

Value of Shares

Shares Purchased

that May Yet be

Total Number

as Part of Publicly

Purchased Under

of Shares

Average Price

Announced Plans

the Plan
Period

Purchased(1)

Paid per Share

or Programs(2)

Or Programs(2)
July 1 - July 31

9,373

$
40.30

$
—

$
20.0
million
Aug 1 - Aug 31

2,551

38.30

—

20.0
million
Sept 1 - Sept 30

2,236

40.54

—

20.0
million
Total

14,160

$
39.98

$
—

$
20.0
million

(1)

~~(1)~~

~~Includes~~These include treasury transactions arising from net settlement of equity awards to satisfy minimum tax obligations.

~~(2)~~

In the first quarter of 2015, the Board of Directors authorized the repurchase of up to $25 million of shares of Class A common stock of the Company 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,

(2)

In February 2019, the Board of Directors authorized the repurchase of up to $100 million of shares of Class A common stock and/or Class A partnership units of Group LP with no expiration date. In July 2021, the Board of Directors authorized the repurchase of an additional $100 million of shares of Class A common stock and/or Class A partnership units of Group LP with no expiration date.

(3)

~~Table~~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 ~~Contents~~

shares repurchased will be opportunistic and measured in nature and will depend on a variety of factors, including price and market conditions.

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.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

~~Table of Contents~~

Item 6. Exhibits


Exhibit Number		Description
Exhibit Number		~~Description~~
3.1		Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form ~~8‑K~~8-K filed with the SEC on April 22, 2014)
~~3.2~~
3.2		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s ~~Current~~Annual Report on Form ~~8‑K~~10-K filed with the SEC on ~~April 22, 2014)~~February 23, 2022)
~~10.1~~
31.1		Master Services Agreement by and between Moelis & Company Group LP, Moelis Asset Management LP and certain subsidiaries of Moelis Asset Management LP (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 25, 2017)
~~31.1~~		Rule ~~13a‑14(a)~~13a-14(a) Certification of Chief Executive Officer of the Registrant in accordance with Section 302 of the ~~Sarbanes‑Oxley~~Sarbanes-Oxley Act of 2002
~~31.2~~
31.2		Rule ~~13a‑14(a)~~13a-14(a) Certification of Chief Financial Officer of the Registrant in accordance with Section 302 of the ~~Sarbanes‑Oxley~~Sarbanes-Oxley Act of 2002
32.1*
32.1*		Section 1350 Certification of Chief Executive Officer of the Registrant in accordance with Section 906 of the ~~Sarbanes‑Oxley~~Sarbanes-Oxley Act of 2002
32.2*
32.2*		Section 1350 Certification of Chief Financial Officer of the Registrant in accordance with Section 906 of the ~~Sarbanes‑Oxley~~Sarbanes-Oxley Act of 2002
~~101.INS~~		~~XBRL Instance Document~~
~~101.SCH~~101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema
~~101.CAL~~
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase
~~101.LAB~~
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase
~~101.PRE~~
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase
~~101.DEF~~
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase

104		Cover Page Interactive Data File (formatted as inline XBRL and contained Exhibit 101)

*Document has been furnished, is not deemed filed and is not to be incorporated by reference into any of the Registrant’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934 irrespective of any general incorporation language contained in any such filing.

~~Table of Contents~~SIGNATURE

~~SIGNATURE~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized this 2nd27th day of ~~November, 2017.~~April, 2022.


	MOELIS & COMPANY
	~~MOELIS & COMPANY~~
	/s/ Kenneth Moelis
	~~/s/~~ Kenneth Moelis
	~~Kenneth Moelis~~Chief Executive Officer
	~~Chief Executive Officer~~
	/s/ Joseph Simon
	~~/s/~~ Joseph Simon
	~~Joseph Simon~~
	Chief Financial Officer


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Revenues	$	170,041	$	150,676	$	515,448	$	408,765
Expenses
Compensation and benefits		99,694		88,046		302,228		240,912
Occupancy		4,393		4,096		12,670		14,941
Professional fees		4,494		2,804		13,674		7,551
Communication, technology and information services		6,427		5,496		18,636		16,101
Travel and related expenses		7,294		4,490		21,990		16,452
Depreciation and amortization		891		817		2,570		2,359
Other expenses		6,969		4,813		18,059		10,885
Total expenses		130,162		110,562		389,827		309,201
Operating income (loss)		39,879		40,114		125,621		99,564
Other income and (expenses)		14,955		187		32,888		391
Income (loss) from equity method investments		2,791		1,562		4,565		3,897
Income (loss) before income taxes		57,625		41,863		163,074		103,852
Provision for income taxes		14,354		6,550		30,900		16,715
Net income (loss)		43,271		35,313		132,174		87,137
Net income (loss) attributable to noncontrolling interests		24,066		25,824		77,961		63,785
Net income (loss) attributable to Moelis & Company	$	19,205	$	9,489	$	54,213	$	23,352
Weighted-average shares of Class A common stock outstanding
Basic		32,505,940		20,926,745		29,094,514		20,807,189
Diluted		39,784,633		24,301,063		35,872,847		23,516,239
Net income (loss) per share attributable to holders of shares of Class A common stock
Basic	$	0.59	$	0.45	$	1.86	$	1.12
Diluted	$	0.48	$	0.39	$	1.51	$	0.99
Dividends declared per share of Class A common stock	$	0.37	$	0.32	$	2.11	$	1.72


	Restricted Stock & RSUs
	2017			2016
		Weighted			Weighted
		Average			Average
	Number of	Grant Date		Number of	Grant Date
	Shares	Fair Value		Shares	Fair Value
Unvested Balance at January 1,	8,504,190	$	26.70	5,123,481	$	28.67
Granted	3,140,934		37.07	3,787,723		24.09
Forfeited	(75,433)		30.74	(74,739)		26.05
Vested	(2,118,588)		26.96	(586,953)		28.30
Unvested Balance at September 30,	9,451,103	$	29.87	8,249,512	$	26.81


	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


	Stock Options Outstanding
	2017			2016
		Weighted			Weighted
		Average			Average
	Number	Exercise Price		Number	Exercise Price
	Outstanding	Per Share		Outstanding	Per Share
Outstanding at January 1,	2,822,728	$	20.95	3,081,203	$	20.95
Grants	—		—	—		—
Exercises	(256,270)		20.95	—		—
Forfeitures or expirations	(81,019)		20.95	(208,975)		20.95
Outstanding at September 30,	2,485,439	$	20.95	2,872,228	$	20.95


	Payment Due by Period
			Less than						More than
($ in thousands)	Total		1 Year		1 – 3 Years		3 – 5 Years		5 Years
Operating leases (net of $5,898 of committed sublease income)	$	70,137	$	4,875	$	35,944	$	16,111	$	13,207
Amount due pursuant to Tax Receivable Agreement		314,747		5,384		25,723		31,640		252,000
Total	$	384,884	$	10,259	$	61,667	$	47,751	$	265,207