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 every Interactive Data File required to be submitted 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 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.:

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 of the Exchange Act). ☐ Yes ☒ No

As of ~~July 17, 2019,~~April 16, 2020, there were ~~49,206,713~~53,419,336 shares of Class A common stock, par value $0.01 per share, and ~~10,431,422~~10,397,915 shares of Class B common stock, par value $0.01 per share, outstanding.

	June 30,			December 31,			March 31,			December 31,
	2019			2018			2020			2019
Assets
Cash and cash equivalents	$	108,360		$	261,100		$	124,158		$	167,812
Restricted cash		682			671			597			760
Receivables:
Accounts receivable, net of allowance for doubtful accounts of $3,900 and $1,975 as of June 30, 2019 and December 31, 2018, respectively		42,802			54,412
Accounts receivable, net of allowance for credit losses of $3,776 and $4,088 as of March 31, 2020 and December 31, 2019, respectively								38,351			45,074
Accrued and other receivables		6,391			14,199			13,680			10,722
Total receivables		49,193			68,611			52,031			55,796
Deferred compensation		9,283			8,788			16,592			11,748
Investments at fair value (cost basis $635 and $80,717 as of June 30, 2019 and December 31, 2018, respectively)		149			80,650
Investments								58,881			213,231
Right-of-use assets		46,617			—			186,524			190,763
Equity method investment		61,858			63,274
Equipment and leasehold improvements, net		14,633			12,731			25,934			13,992
Deferred tax asset		406,732			402,859			408,095			400,496
Prepaid expenses and other assets		17,262			15,691			16,874			17,101
Total assets	$	714,769		$	914,375		$	889,686		$	1,071,699
Liabilities and Equity
Compensation payable	$	18,030		$	197,741		$	12,424		$	163,131
Accounts payable and accrued expenses		6,414			19,784
Accounts payable, accrued expenses and other liabilities								24,778			16,107
Amount due pursuant to tax receivable agreement		311,432			311,246			300,871			297,986
Deferred revenue		11,443			7,074			4,450			3,023
Lease liabilities		54,273			—			194,607			197,625
Other liabilities		319			6,777
Total liabilities		401,911			542,622			537,130			677,872
Commitments and Contingencies (See Note 12)
Class A common stock, par value $0.01 per share (1,000,000,000 shares authorized, 51,629,289 issued and 49,231,339 outstanding at June 30, 2019; 1,000,000,000 authorized, 47,031,095 issued and 45,604,980 outstanding at December 31, 2018)		516			470
Class B common stock, par value $0.01 per share (1,000,000,000 shares authorized, 10,431,422 issued and outstanding at June 30, 2019; 1,000,000,000 authorized, 10,493,358 issued and outstanding at December 31, 2018)		104			105
Treasury stock, at cost; 2,397,950 and 1,426,115 shares as of June 30, 2019 and December 31, 2018, respectively		(96,271	)		(56,661	)
Commitments and Contingencies (See Note 11)
Class A common stock, par value $0.01 per share (1,000,000,000 shares authorized, 57,076,395 issued and 53,449,058 outstanding at March 31, 2020; 1,000,000,000 authorized, 52,773,617 issued and 50,016,059 outstanding at December 31, 2019)								571			528
Class B common stock, par value $0.01 per share (1,000,000,000 shares authorized, 10,397,915 issued and outstanding at March 31, 2020; 1,000,000,000 authorized, 10,397,915 issued and outstanding at December 31, 2019)								104			104
Treasury stock, at cost; 3,627,337 and 2,757,558 shares as of March 31, 2020 and December 31, 2019, respectively								(139,472	)		(107,836	)
Additional paid-in-capital		791,403			697,938			933,094			872,791
Retained earnings (accumulated deficit)		(327,353	)		(237,782	)		(378,817	)		(324,192	)
Accumulated other comprehensive income (loss)		667			291			128			1,432
Total Moelis & Company equity		369,066			404,361			415,608			442,827
Noncontrolling interests		(56,208	)		(32,608	)		(63,052	)		(49,000	)
Total equity		312,858			371,753			352,556			393,827
Total liabilities and equity	$	714,769		$	914,375		$	889,686		$	1,071,699

	Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
	2019		2018		2019			2018		2020			2019
Revenues	$	153,523	$	220,405	$	291,306		$	439,823	$	153,706		$	137,783
Expenses
Compensation and benefits		84,485		128,109		174,646			255,286		95,120			90,161
Occupancy		4,765		4,550		9,584			9,133		7,231			4,819
Professional fees		5,342		6,574		10,521			12,258		4,236			5,179
Communication, technology and information services		7,877		7,317		15,839			14,450		8,392			7,962
Travel and related expenses		9,293		10,851		20,790			22,411		7,944			11,497
Depreciation and amortization		1,290		1,100		2,445			2,155		1,199			1,155
Other expenses		6,592		6,259		13,973			13,416		5,142			7,381
Total expenses		119,644		164,760		247,798			329,109		129,264			128,154
Operating income (loss)		33,879		55,645		43,508			110,714		24,442			9,629
Other income and (expenses)		4,303		1,286		5,680			1,873		(1,660	)		2,090
Income (loss) from equity method investments		719		2,226		1,432			3,114
Income (loss) before income taxes		38,901		59,157		50,620			115,701		22,782			11,719
Provision (benefit) for income taxes		1,234		6,027		(3,224	)		8,590		(7,344	)		(4,458	)
Net income (loss)		37,667		53,130		53,844			107,111		30,126			16,177
Net income (loss) attributable to noncontrolling interests		8,208		17,440		10,815			38,096		4,996			2,607
Net income (loss) attributable to Moelis & Company	$	29,459	$	35,690	$	43,029		$	69,015	$	25,130		$	13,570
Weighted-average shares of Class A common stock outstanding
Basic		50,107,269		41,750,396		48,919,127			38,938,952		52,666,457			48,309,358
Diluted		54,668,087		49,280,107		54,770,852			46,991,421		57,092,982			55,108,335
Net income (loss) per share attributable to holders of shares of Class A common stock
Basic	$	0.59	$	0.85	$	0.88		$	1.77	$	0.48		$	0.28
Diluted	$	0.54	$	0.72	$	0.79		$	1.47	$	0.44		$	0.25

	Three Months Ended June 30,						Six Months Ended June 30,					Three Months Ended March 31,
	2019			2018			2019		2018			2020			2019
Net income	$	37,667		$	53,130		$	53,844	$	107,111		$	30,126		$	16,177
Foreign currency translation adjustment, net of tax		(57	)		(1,843	)		483		(164	)		(1,630	)		540
Other comprehensive income (loss)		(57	)		(1,843	)		483		(164	)		(1,630	)		540
Comprehensive income (loss)		37,610			51,287			54,327		106,947			28,496			16,717
Less: Comprehensive income attributable to noncontrolling interests		8,196			16,878			10,922		38,144			4,670			2,726
Comprehensive income (loss) attributable to Moelis & Company	$	29,414		$	34,409		$	43,405	$	68,803		$	23,826		$	13,991

	Six Months Ended June 30,						Three Months Ended March 31,
	2019			2018			2020			2019
Cash flows from operating activities
Net income (loss)	$	53,844		$	107,111		$	30,126		$	16,177
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Bad debt expense		2,203			1,208			518			1,288
Depreciation and amortization		2,445			2,155			1,199			1,155
(Income) loss from equity method investments		(1,432	)		(3,114	)
Equity-based compensation		67,132			58,335			38,255			38,886
Deferred tax provision		(3,011	)		8,568			(6,723	)		10,638
Other		(3,373	)		3,688			2,099			(416	)
Changes in assets and liabilities:
Accounts receivable		9,365			(8,475	)		5,565			8,720
Accrued and other receivables		7,815			(54,549	)		(1,899	)		3,626
Prepaid expenses and other assets		(1,077	)		933			117			(183	)
Deferred compensation		(509	)		(1,160	)		(4,925	)		(2,616	)
Compensation payable		(180,065	)		(32,227	)		(150,260	)		(186,519	)
Accounts payable and accrued expenses		(13,359	)		(12,012	)
Accounts payable, accrued expenses and other liabilities								9,454			(19,021	)
Deferred revenue		4,369			(998	)		1,439			3,071
Dividends received		2,848			2,737			1,942			2,848
Other liabilities		2,374			(2,205	)
Net cash provided by (used in) operating activities		(50,431	)		69,995			(73,093	)		(122,346	)
Cash flows from investing activities
Purchase of investments		(9,245	)		(55,479	)		(28,152	)		(9,245	)
Proceeds from sales of investments		89,859			92,310			181,249			80,559
Note payments received from employees		—			193
Purchase of equipment and leasehold improvements		(4,587	)		(3,133	)		(13,139	)		(2,172	)
Net cash provided by (used in) investing activities		76,027			33,891			139,958			69,142
Cash flows from financing activities
Dividends and distributions		(145,537	)		(167,145	)		(88,689	)		(113,734	)
Proceeds from exercise of stock options		5,864			6,695			11,819			492
Treasury Stock Purchases		(39,610	)		(24,172	)
Class A partnership units and other equity purchased		—			(135	)
Treasury stock purchases								(31,636	)		(26,970	)
Net cash provided by (used in) financing activities		(179,283	)		(184,757	)		(108,506	)		(140,212	)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash		958			401			(2,176	)		1,126
Net increase (decrease) in cash, cash equivalents, and restricted cash		(152,729	)		(80,470	)		(43,817	)		(192,290	)
Cash, cash equivalents, and restricted cash, beginning of period		261,771			213,894			168,572			261,771
Cash, cash equivalents, and restricted cash, end of period	$	109,042		$	133,424		$	124,755		$	69,481
Supplemental cash flow disclosure:
Cash paid during the period for:
Income taxes	$	13,448		$	14,185		$	1,560		$	11,895
Other non-cash activity
Cumulative effect adjustment upon adoption of ASU 2016-13							$	364		$	—
Dividend equivalents issued	$	23,998		$	24,767		$	12,125		$	19,484
Class A Partnership Units or other equity converted into Class A Common Stock	$	670		$	22,174		$	786		$	240
Cumulative Effect Adjustment upon Adoption of ASU 2014-09	$	—		$	3,155
Exercised stock option proceeds receivable	$	—		$	24
Dividend declared not paid							$	—		$	657
Forfeiture of fully-vested Group LP units or other equity units	$	2,271		$	677		$	96		$	—

	Shares																			Retained			Accumulated									Shares																	Retained			Accumulated
	Class A		Class B						Class A		Class B						Additional			Earnings			Other									Class A		Class B					Class A		Class B					Additional			Earnings			Other
	Common		Common			Treasury			Common		Common			Treasury			Paid-In			(Accumulated			Comprehensive			Noncontrolling			Total			Common		Common		Treasury			Common		Common		Treasury			Paid-In			(Accumulated			Comprehensive			Noncontrolling			Total
	Stock		Stock			Stock			Stock		Stock			Stock			Capital			Deficit)			Income (Loss)			Interests			Equity			Stock		Stock		Stock			Stock		Stock		Stock			Capital			Deficit)			Income (Loss)			Interests			Equity
Balance as of January 1, 2019		47,031,095		10,493,358			(1,426,115	)	$	470	$	105		$	(56,661	)	$	697,938		$	(237,782	)	$	291		$	(32,608	)	$	371,753
Balance as of January 1, 2020																																	52,773,617		10,397,915		(2,757,558	)	$	528	$	104	$	(107,836	)	$	872,791		$	(324,192	)	$	1,432		$	(49,000	)	$	393,827
Cumulative effect adjustment upon adoption of ASU 2016-13																																	—		—		—			—		—		—			—			(364	)		—			—			(364	)
Balance as of January 1, 2020, as adjusted																																	52,773,617		10,397,915		(2,757,558	)		528		104		(107,836	)		872,791			(324,556	)		1,432			(49,000	)		393,463
Net income (loss)		—		—			—			—		—			—			—			13,570			—			2,607			16,177			—		—		—			—		—		—			—			25,130			—			4,996			30,126
Equity-based compensation		2,397,164		—			—			24		—			—			38,753			—			—			109			38,886			3,581,294		—		—			36		—		—			38,189			—			—			30			38,255
Other comprehensive income (loss)		—		—			—			—		—			—			—			—			421			119			540			—		—		—			—		—		—			—			—			(1,304	)		(326	)		(1,630	)
Dividends declared ($1.75 per share of Class A Common Stock) and distributions		—		—			—			—		—			—			19,484			(103,436	)		—			(30,439	)		(114,391	)
Dividends declared ($1.26 per share of Class A Common Stock) and distributions																																	—		—		—			—		—		—			12,125			(79,391	)		—			(21,423	)		(88,689	)
Treasury Stock Purchases		—		—			(616,796	)		—		—			(26,970	)		—			—			—			—			(26,970	)		—		—		(869,779	)		—		—		(31,636	)		—			—			—			—			(31,636	)
Exercise of Stock options		29,439		—			—			—		—			—			492			—			—			—			492			721,484		—		—			7		—		—			11,812			—			—			—			11,819
Equity-based payments to non-employees		—		—			—			—		—			—			416			—			—			—			416			—		—		—			—		—		—			158			—			—			—			158
Other		—		—			—			—		—			—			(734	)		—			—			974			240			—		—		—			—		—		—			(1,981	)		—			—			2,671			690
Balance as of March 31, 2019		49,457,698		10,493,358			(2,042,911	)	$	494	$	105		$	(83,631	)	$	756,349		$	(327,648	)	$	712		$	(59,238	)	$	287,143
Net income (loss)		—		—			—			—		—			—			—			29,459			—			8,208			37,667
Equity-based compensation		1,787,993		—			—			18		—			—			28,187			—			—			41			28,246
Other comprehensive income (loss)		—		—			—			—		—			—			—			—			(45	)		(12	)		(57	)
Dividends declared ($0.50 per share of Class A Common Stock) and distributions		—		—			—			—		—			—			4,514			(29,164	)		—			(6,496	)		(31,146	)
Treasury Stock Purchases		—		—			(344,970	)		—		—			(12,308	)		—			—			—			—			(12,308	)
Exercise of Stock options		321,662		—			(10,069	)		3		—			(332	)		5,372			—			—			—			5,043
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges		61,936		(61,936	)		—			1		(1	)		—			(1,580	)		—			—			2,010			430
Equity-based payments to non-employees		—		—			—			—		—			—			111			—			—			—			111
Other		—		—			—			—		—			—			(1,550	)		—			—			(721	)		(2,271	)
Balance as of June 30, 2019		51,629,289		10,431,422			(2,397,950	)	$	516	$	104		$	(96,271	)	$	791,403		$	(327,353	)	$	667		$	(56,208	)	$	312,858
Balance as of March 31, 2020																																	57,076,395		10,397,915		(3,627,337	)	$	571	$	104	$	(139,472	)	$	933,094		$	(378,817	)	$	128		$	(63,052	)	$	352,556

	Shares																		Retained			Accumulated									Shares																	Retained			Accumulated
	Class A		Class B						Class A		Class B						Additional		Earnings			Other									Class A		Class B					Class A		Class B					Additional			Earnings			Other
	Common		Common			Treasury			Common		Common			Treasury			Paid-In		(Accumulated			Comprehensive			Noncontrolling			Total			Common		Common		Treasury			Common		Common		Treasury			Paid-In			(Accumulated			Comprehensive		Noncontrolling			Total
	Stock		Stock			Stock			Stock		Stock			Stock			Capital		Deficit)			Income (Loss)			Interests			Equity			Stock		Stock		Stock			Stock		Stock		Stock			Capital			Deficit)			Income (Loss)		Interests			Equity
Balance as of January 1, 2018		34,163,042		19,912,230			(707,416	)	$	342	$	199		$	(23,188	)	$	487,163	$	(139,918	)	$	352		$	19,306		$	344,256
Cumulative Effect Adjustment upon Adoption of ASU 2014-09		—		—			—			—		—			—			—		3,155			—			—			3,155
Cumulative Effect Adjustment upon Adoption of ASU 2016-01		—		—			—			—		—			—			—		(317	)		317			—			—
Balance as of January 1, 2018, as adjusted		34,163,042		19,912,230			(707,416	)	$	342	$	199		$	(23,188	)	$	487,163	$	(137,080	)	$	669		$	19,306		$	347,411
Balance as of January 1, 2019																																47,031,095		10,493,358		(1,426,115	)	$	470	$	105	$	(56,661	)	$	697,938		$	(237,782	)	$	291	$	(32,608	)	$	371,753
Net income (loss)		—		—			—			—		—			—			—		33,325			—			20,656			53,981			—		—		—			—		—		—			—			13,570			—		2,607			16,177
Equity-based compensation		2,210,079		—			—			22		—			—			31,764		—			—			458			32,244			2,397,164		—		—			24		—		—			38,753			—			—		109			38,886
Other comprehensive income (loss)		—		—			—			—		—			—			—		—			1,069			610			1,679			—		—		—			—		—		—			—			—			421		119			540
Dividends declared ($1.97 per share of Class A Common Stock) and distributions		—		—			—			—		—			—			20,379		(90,631	)		—			(66,777	)		(137,029	)
Dividends declared ($1.75 per share of Class A Common Stock) and distributions																																—		—		—			—		—		—			19,484			(103,436	)		—		(30,439	)		(114,391	)
Treasury Stock Purchases		—		—			(414,327	)		—		—			(20,789	)		—		—			—			—			(20,789	)		—		—		(616,796	)		—		—		(26,970	)		—			—			—		—			(26,970	)
Exercise of Stock options		18,494		—			—			—		—			—			365		—			—			—			365			29,439		—		—			—		—		—			492			—			—		—			492
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges		4,689,295		(4,689,295	)		—			47		(47	)		—			24,328		—			—			(4,029	)		20,299
Equity-based payments to non-employees		—		—			—			—		—			—			2,016		—			—			—			2,016
Balance as of March 31, 2018		41,080,910		15,222,935			(1,121,743	)	$	411	$	152		$	(43,977	)	$	566,015	$	(194,386	)	$	1,738		$	(29,776	)	$	300,177
Net income (loss)		—		—			—			—		—			—			—		35,690			—			17,440			53,130
Equity-based compensation		751,997		—			—			8		—			—			25,839		—			—			244			26,091
Other comprehensive income (loss)		—		—			—			—		—			—			—		—			(1,281	)		(562	)		(1,843	)
Dividends declared ($0.47 per share of Class A Common Stock) and distributions		—		—			—			—		—			—			4,388		(23,560	)		—			(10,944	)		(30,116	)
Treasury Stock Purchases		—		—			(60,842	)		—		—			(3,383	)		—		—			—			—			(3,383	)
Exercise of Stock options		325,286		—			—			3		—			—			6,327		—			—			—			6,330
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges		18,242		(18,242	)		—			—		—			—			1,666		—			—			74			1,740
Equity-based payments to non-employees		—		—			—			—		—			—			1,662		—			—			—			1,662			—		—		—			—		—		—			416			—			—		—			416
Other		—		(26,118	)		—			—		—			—			—		—			—			(677	)		(677	)		—		—		—			—		—		—			(734	)		—			—		974			240
Balance as of June 30, 2018		42,176,435		15,178,575			(1,182,585	)	$	422	$	152		$	(47,360	)	$	605,897	$	(182,256	)	$	457		$	(24,201	)	$	353,111
Balance as of March 31, 2019																																49,457,698		10,493,358		(2,042,911	)	$	494	$	105	$	(83,631	)	$	756,349		$	(327,648	)	$	712	$	(59,238	)	$	287,143

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, the business operated as a Delaware limited partnership that commenced operations during 2007. Following the IPO, the operations are owned by Moelis & Company Group LP (“Group LP”), a U.S. Delaware limited partnership, and Group LP is controlled by Moelis & Company. Moelis & Company’s shareholders are entitled to receive a portion of Group LP’s economics through their direct ownership interests in shares of Class A common stock of Moelis & Company. The noncontrolling interest owners of Group LP (not Moelis & Company) receive economics of the operations primarily through their ownership interests in Group LP partnership units.

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

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

Basis of Accounting —The Company prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). As permitted by the interim reporting rules and regulations set forth by the SEC, the condensed consolidated financial statements presented exclude certain financial information and footnote disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to fairly present the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

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

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

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

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

The Company’s restricted cash is comprised of collateral deposits primarily held by certain non-U.S. subsidiaries. These deposits are required for certain direct debit accounts and are also used to satisfy future medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ is presented below.

	June 30,				March 31,
	2019		2018		2020		2019
Cash	$	48,113	$	42,843	$	38,975	$	32,703
Cash equivalents		60,247		90,025		85,183		36,429
Restricted cash		682		556		597		349
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	109,042	$	133,424	$	124,755	$	69,481

Additionally, as of December 31, ~~2018,~~2019, the Company held cash of ~~$59,705~~$71,798 and cash equivalents of ~~$201,395.~~$96,014.

Receivables —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 ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 were ~~$23,556~~$21,341 and ~~$26,738~~$19,879 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 ~~$245~~$188 and ~~$106~~$275 for the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and $520 and $207 for the six months ended June 30, 2019 and 2018,~~ 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 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.

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

The following table summarizes credit loss allowance activity for the three months ended March 31, 2020:

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

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

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

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

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

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

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the instrument.

For level 3 investments in which pricing inputs are unobservable and limited market activity exists, management’s determination of fair value is based on the best information available, may incorporate management’s own assumptions and involves a significant degree of judgment.

Effective January 1, 2018, the Company adopted ASU 2016-01 using the modified retrospective approach. As a result, a cumulative adjustment was recorded which decreased retained earnings and increased accumulated other comprehensive income by $317 as of January 1, 2018. The adjustment is related to the accumulated unrealized losses in fair value of an equity investment as of December 31, 2017. No prior periods were adjusted as a result of this change in accounting policy. The adoption of ASU 2016-01 requires that changes in fair value of equity investments measured at fair value be recognized in net income prospectively. For each period where a consolidated statement of operations is presented, the Company will disclose the portion of realized and/or unrealized gains and losses related to equity investments held at the reporting date or sold during the period.

Effective September 30, 2018, the Company early adopted ASU 2018-13. As a result, the Company removed its disclosures of the amounts of and reasons for transfers between level 1 and level 2 fair value investments. Level 3 fair value investments that are acquired in the future will not require disclosures of the valuation process but will require disclosure of unrealized gains and losses and the range and weighted average of significant unobservable inputs used to determine the fair value of the level 3 investment.

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. 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 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.

In February 2016, the FASB issued Accounting Standards Update 2016-02—Leases (“ASU 2016-02”) to improve transparency and comparability among organizations by requiring the recognition of ROU assets and lease liabilities on the balance sheet. Additionally, in July 2018, the FASB issued ASU 2018-11 which permits entities to apply the requirements of ASU 2016-02 as of the adoption date, as opposed to the earliest comparative period disclosed.

The Company adopted both standards as of January 1, 2019, and is applying the requirements of ASU 2016-02 as of the adoption date instead of the earliest comparative period disclosed. In addition, we elected to use certain practical expedients to assist in our transition and are not reassessing the identification and classification of leases upon adoption. Upon adoption, the Company recorded lease liabilities and corresponding ROU assets of $63,252. The ROU assets were adjusted for prepaid rent and accrued rent, which reduced our opening balances of prepaid expenses and other assets and other liabilities by $1,666 and $7,139, respectively. The adoption of ASU 2016-02 did not have a material impact to our condensed consolidated statements of operations.

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 ~~equity~~condensed consolidated statement of financial condition. Such capitalized costs are amortized using the straight-line method ~~investment~~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 ~~Moelis Australia~~the period they are incurred. The amortization expense of such capitalized costs will be presented under ~~US GAAP as Moelis Australia follows local accounting principles under Australian Accounting Standards.~~communication, technology and information services on the condensed consolidated statement of operations.

Effective January 1, 2020, the Company adopted ASU 2018-15, “Goodwill and Other —Internal Use Software” using a prospective approach (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in cloud computing arrangements with the requirements for capitalizing costs to develop or obtain internal-use software. As of March 31, 2020, the Company capitalized approximately $202 in implementation costs related to its cloud computing arrangements.

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

Major renewals and improvements are capitalized and minor replacements, maintenance and repairs are charged to expenses as incurred. Upon retirement or disposal of assets, the cost and related accumulated depreciation or amortization are removed from the condensed consolidated statements of financial condition and any gain or loss is reflected in the condensed consolidated statements of operations.

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

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

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

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

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

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

Effective January 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers”, and all related amendments (“Topic 606”) using the modified retrospective method for all contracts. The adoption of the new standard requires the Company to present reimbursable expenses gross in revenues and expenses and to use new revenue recognition patterns as discussed below in the policy. Prior to adoption, client expenses were recorded net of reimbursements. As a result, a cumulative adjustment was recorded which increased the opening balance of accrued and other receivables and retained earnings by $3,722 for outstanding reimbursable expenses at December 31, 2017, which would have been recognized as revenues under the new standard. The tax effect of this adjustment decreased retained earnings by $567, resulting in a net increase to the opening balance of retained earnings of $3,155 as of January 1, 2018. No prior periods were adjusted as a result of this change in accounting policy.

The adoption of Topic 606 may result in the recognition of revenue in certain circumstances earlier as compared with the time prior to the adoption of Topic 606 where revenues were generally recognized upon the closing date of a transaction. In contrast, Topic 606 requires revenues from variable transaction fees to be recognized when all material conditions for completion have been met and it is probable that a significant revenue reversal will not occur in a future period. Revenues subject to this timing difference in recognition will require significant judgment and could be material to any given reporting period.

Total compensation and benefits expense is determined by management primarily based on revenues earned, in addition to other performance and labor market conditions. Variable compensation and benefits expense has been adjusted in response to the adoption of Topic 606.

Equity-based Compensation ~~—The~~—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. 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.

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 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, 2019, the Company adopted ASU 2018-07, “Compensation—Stock Compensation” (“ASU 2018-07”) using the modified retrospective method. The adoption of this new standard generally requires the accounting for equity-based payments to nonemployees to be consistent with the accounting for employees. As a result, the Company will recognize the cost of services received from a nonemployee in exchange for an equity instrument based on the award’s grant-date fair value. Unsettled equity-based payments to nonemployees have been remeasured at fair value as of the adoption date. No adjustment to the opening balance of retained earnings was required.

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

ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018, no~~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 interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. For the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ no such amounts were recorded.

~~Leases~~ — The Company ~~maintains operating leases for corporate offices~~recognizes excess tax benefits and ~~an aircraft. The Company determines if a contract contains a lease at inception. Operating leases are recorded~~deficiencies as ~~right-of-use (“ROU”) assets and lease liabilities on~~income tax benefits or expenses in the condensed consolidated ~~statements~~statement of financial condition. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease liabilitiesoperations. These 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,reflected in accounts payable, 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.

The Company adopted both standards as of January 1, 2019, and is applying the requirements of ASU 2016-02 as of the adoption date instead of the earliest comparative period disclosed. In addition, we elected to use certain practical expedients to assist in our transition and are not reassessing the identification and classification of leases upon adoption. Upon adoption, the Company recorded lease liabilities and corresponding ROU assets of $63,252. The ROU assets were adjusted for prepaid rent and accrued rent, which reduced our opening balances of prepaid expenses and other ~~assets and other~~ liabilities ~~by $1,666 and $7,139, respectively. The adoption of ASU 2016-02 did not have a material impact to our~~within the condensed consolidated ~~statements~~statement of ~~operations.~~cash flows.

Foreign Currency Translation — Assets and liabilities held in non-U.S. dollar denominated currencies are translated into U.S. dollars at exchange rates in effect at the end of the reporting period. Revenues and expenses are translated at average exchange rates during the reporting period. A charge or credit is recorded to other comprehensive income to reflect the translation of these amounts to the extent the non-U.S. currency is designated the functional currency of the subsidiary. Non-functional currency related transaction gains and losses are immediately recorded in the condensed consolidated statements of operations.

In ~~June 2016,~~March 2020, the FASB issued Accounting Standards Update No. ~~2016-13, “"Measurement of Credit Losses on Financial Instruments" ("~~2020-04, “Reference Rate Reform” (“ASU ~~2016-13"~~2020-04”). ASU ~~2016-13 replaces~~2020-04 provides optional guidance for entities that are impacted by interest rate reform. Specifically, ASU 2020-04 allows for contracts under the ~~incurred loss impairment methodology~~scope of Topic 310—Receivables to be accounted for ~~financial instruments~~prospectively with the ~~current expected credit loss (CECL) model which requires estimates of future credit losses based on reasonable supporting information, such as historical experience~~updated interest rate, among other specifications for debt, derivative instruments, and ~~current conditions.~~other contracts. ASU ~~2016-13~~2020-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2019.~~2022. Early application is permitted. Upon initial evaluation, we do not anticipate any material changes to our condensed consolidated financial statements.

In March 2019, the FASB issued Accounting Standards Update No. 2019-01, “Leases” (“ASU 2019-01”). ASU 2019-01 enhances the guidance in ASC 842 surrounding the fair value of underlying assets for lessors, presentation of sales-type and direct financing leases on the statement of cash flows, and transition guidance surrounding accounting changes and error corrections. ASU 2019-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early application is permitted. Upon initial evaluation, we do not anticipate any material changes to our condensed consolidated financial statements.

On April 1, 2010, the Company entered into a 50-50 joint venture in Moelis Australia Holdings PTY Limited, investing a combination of cash and certain net assets in exchange for its interests. On April 10, 2017, Moelis Australia Holdings PTY Limited consummated their initial public offering and became listed on the Australian Securities Exchange as Moelis Australia Limited (ASX: MOE). As a result of the offering, the Company’s ownership interest in Moelis Australia was diluted and continues to be accounted for under the equity method of accounting. Certain estimates and adjustments have been made to account for the Company’s equity method investment in Moelis Australia under US GAAP as Moelis Australia follows local accounting principles under Australian Accounting Standards. Please see Note 4 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for additional information.

On February 20, 2019 and February 20, 2018, Moelis Australia declared dividends, of which the Company received $2,848 and $2,737 on March 6, 2019 and March 7, 2018, respectively. The Company accounted for the dividends as a return on investment and reduced the carrying value of the investment in Moelis Australia by $2,848 and $2,737, respectively.

For the three months ended June 30, 2019 and 2018, income of $719 and $2,226 was recorded on this investment, respectively, and for the six months ended June 30, 2019 and 2018, income of $1,432 and $3,114 was recorded on this investment, respectively.

	June 30,			December 31,			March 31,			December 31,
	2019			2018			2020			2019
Office equipment	$	13,336		$	11,517		$	11,860		$	13,593
Furniture and fixtures		5,013			4,533			5,017			5,054
Leasehold improvements		15,868			13,813			15,199			15,294
Construction in progress								15,258			2,108
Total		34,217			29,863			47,334			36,049
Less accumulated depreciation and amortization		(19,584	)		(17,132	)		(21,400	)		(22,057	)
Equipment and leasehold improvements, net	$	14,633		$	12,731		$	25,934		$	13,992

Depreciation and amortization expenses for fixed assets totaled ~~$1,290~~$1,199 and ~~$1,100~~$1,155 for the three months ended ~~June 30,~~March 31, 2020 and 2019, respectively.

As of March 31, 2020, there were $202 of costs capitalized within prepaid expenses and ~~2018, respectively,~~other assets on our condensed consolidated statement of financial position related to the implementation of cloud computing arrangements. Such arrangements are still in development and ~~$2,445 and $2,155 for~~are not yet subject to amortization.

Fair value investments are contained within the ~~six months ended June 30, 2019 and 2018, respectively.~~

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

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

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

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

The estimated fair values of government securities money markets, U.S. Treasury instruments, and government debt securities as of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 are based on quoted prices for recent trading activity in identical or similar instruments. The Company generally invests in U.S. Treasury instruments with maturities of less than twelve months. The Company considers these securities to be risk free and does not reserve for expected credit losses on these treasury investments. See Note 2 for further information on the Company’s fair value hierarchy.

~~The following table summarizes the levels of the fair value hierarchy into which the Company’s financial assets fall as of June 30, 2019:~~

For the three and six months ended June 30, 2019, unrealized losses of $42 and $1 were recognized in other income and expenses on the condensed consolidated statement of operations related to common stock held at the reporting date.

~~The following table summarizes the levels of the fair value hierarchy into which the Company’s financial assets fall as of December 31, 2018:~~

~~For the three and six months ended June 30, 2018, unrealized losses of $19 and unrealized gains of $27were recognized in other income and expenses on the condensed consolidated statement of operations related to common stock held at the reporting date.~~

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

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 of all securities with the same term, it is classified as level 1,otherwise it is referred to as “off-the-run” and is classified as level 2.

17The following table summarizes the levels of the fair value hierarchy into which the Company’s financial assets fall as of March 31, 2020:

For the three months ended March 31, 2020, unrealized losses of $25 were recognized in other income and expenses on the condensed consolidated statement of operations related to common stock held at the reporting date. The cost basis of the financial assets recorded at fair value included in investments on the condensed consolidated statement of financial condition was $21,745 as of March 31, 2020.

The following table summarizes the levels of the fair value hierarchy into which the Company’s financial assets fall as of December 31, 2019:

For the three months ended March 31, 2019, unrealized gains of $41 were recognized in other income and expenses on the condensed consolidated statement of operations related to common stock held at the reporting date. The cost basis of the financial assets recorded at fair value included in investments on the condensed consolidated statement of financial condition was $173,806 as of December 31, 2019.

Equity-method investments are contained within the balance of investments on the Company’s condensed consolidated statements of financial condition. On April 1, 2010, the Company entered into a 50-50 joint venture in Moelis Australia Holdings PTY Limited, investing a combination of cash and certain net assets in exchange for its interests. On April 10, 2017, Moelis Australia Holdings PTY Limited consummated their initial public offering and became listed on the Australian Securities Exchange as Moelis Australia Limited (ASX: MOE). As a result of the offering, the Company’s ownership interest in Moelis Australia was diluted and continues to be accounted for under the equity method of accounting. Please see Note 4 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for additional information.

On February 19, 2020 and February 20, 2019, Moelis Australia declared dividends, of which the Company received $1,942 and $2,848 on March 4, 2020 and March 6, 2019, respectively. The Company accounted for the dividends as a return on investment and reduced the carrying value of the investment in Moelis Australia by $1,942 and $2,848, respectively.

7.On September 2, 2019 and November 4, 2019, the Company sold 12.5 million and 8.0 million shares of Moelis Australia common stock, respectively. These transactions resulted in gains of $12,631 and $8,083, respectively, recorded in other income and expenses on the condensed consolidated statements of operations. As a result, the Company’s ownership interest in Moelis Australia was reduced.

The balances of the Company’s equity method investment as of March 31, 2020 and December 31, 2019 were $37,352 and $38,944, respectively, and are included within investments on the condensed consolidated statements of financial condition. The Company’s share of earnings on this investment is recorded in other income and expenses on the condensed consolidated statements of operations.

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 six~~ months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~ are presented below.

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
(dollars in thousands, except per share amounts)	2019			2018			2019			2018			2020			2019
Numerator:
Net income (loss) attributable to holders of shares of Class A common stock—basic	$	29,459		$	35,690		$	43,029		$	69,015		$	25,130		$	13,570
Add (deduct) dilutive effect of:
Noncontrolling interests related to Class A partnership units			(a)			(a)			(a)			(a)			(a)			(a)
Net income (loss) attributable to holders of shares of Class A common stock—diluted	$	29,459		$	35,690		$	43,029		$	69,015		$	25,130		$	13,570
Denominator:
Weighted average shares of Class A common stock outstanding—basic		50,107,269			41,750,396			48,919,127			38,938,952			52,666,457			48,309,358
Add (deduct) dilutive effect of:
Noncontrolling interests related to Class A partnership units			(a)			(a)			(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		4,560,818	(b)		7,529,711	(b)		5,851,725	(b)		8,052,469	(b)		4,426,525	(b)		6,798,977	(b)
Weighted average shares of Class A common stock outstanding—diluted		54,668,087			49,280,107			54,770,852			46,991,421			57,092,982			55,108,335
Net income (loss) per share attributable to holders of shares of Class A common stock
Basic	$	0.59		$	0.85		$	0.88		$	1.77		$	0.48		$	0.28
Diluted	$	0.54		$	0.72		$	0.79		$	1.47		$	0.44		$	0.25

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

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 vested 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 was 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~~1 share of Moelis & Company Class A common stock and represents the Company’s noncontrolling interests. As of ~~June 30, 2019,~~March 31, 2020, partners held ~~12,991,529 Group LP~~12,958,022 Class A partnership units, ~~48,084~~36,634 of which were unvested and will continue to vest over their service life.

In relation to the ~~vesting of Class A partnership~~ units that continue to vest, the Company recognized compensation expenses of ~~$41~~$30 and ~~$243~~$109 for the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018, respectively and $150 and $702 for the six months ended June 30, 2019 and 2018,~~ respectively. As of ~~June 30, 2019,~~March 31, 2020, there was ~~$100~~$9 of unrecognized compensation expense related to unvested Class A partnership units which is expected to be recognized over a weighted-average period of ~~0.6~~0.1 years, using the graded vesting method.

In connection with the IPO, the Company adopted the Moelis & Company 2014 Omnibus Incentive Plan (the “Plan”) to provide additional incentives to selected officers, employees, Managing Directors, non-employee directors, independent contractors, partners, senior advisors and consultants. The Plan provides for the issuance of incentive stock options (“ISOs”), nonqualified stock options, stock appreciation rights (“SARs”), restricted stock, RSUs, stock bonuses, other stock-based awards and cash awards.

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, 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. 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. This new authorization replaced the former repurchase program and the remaining authorization under the program was eliminated. Under this share repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of shares repurchased will be opportunistic and measured in nature and will depend on a variety of factors, including price and market conditions. The remaining balance of shares authorized for repurchase under the program was ~~$95.0~~$80.9 million as of ~~June 30, 2019.~~March 31, 2020.

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 ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company recognized expense of ~~$28,094~~$38,225 and ~~$25,553,~~$38,282, respectively, ~~and $66,376 and $56,733 for the six months ended June 30, 2019 and 2018, respectively.~~in relation to these RSUs.

The following table summarizes activity related to restricted stock and RSUs for the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 and ~~2018.~~2019.

	Restricted Stock & RSUs										Restricted Stock & RSUs
	2019					2018					2020					2019
				Weighted					Weighted					Weighted					Weighted
				Average					Average					Average					Average
	Number of			Grant Date		Number of			Grant Date		Number of			Grant Date		Number of			Grant Date
	Shares			Fair Value		Shares			Fair Value		Shares			Fair Value		Shares			Fair Value
Unvested Balance at January 1,		8,761,224		$	37.59		9,357,999		$	30.15		8,414,130		$	42.19		8,761,224		$	37.59
Granted		3,657,153			46.05		2,843,214			54.35		3,585,725			37.93		3,495,863			46.08
Forfeited		(71,641	)		43.15		(116,695	)		38.02		(48,512	)		37.00		(14,415	)		46.84
Vested		(3,825,041	)		34.34		(2,864,172	)		30.83		(2,894,992	)		38.67		(2,787,084	)		36.62
Unvested Balance at June 30,		8,521,695		$	42.39		9,220,346		$	37.02
Unvested Balance at March 31,												9,056,351		$	41.53		9,455,588		$	41.04

As of ~~June 30, 2019,~~March 31, 2020, the total compensation expense related to unvested restricted stock and RSUs not yet recognized was ~~$175,164.~~$204,253. The weighted-average period over which this compensation expense is expected to be recognized at ~~June 30, 2019~~March 31, 2020 is ~~1.8~~2.0 years.

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:

The Company paid special dividends of ~~$8.30,~~$9.05, in aggregate, through ~~June 30, 2019.~~March 31, 2020. 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 ~~$8.30~~$9.05 from $25.00 per share to ~~$16.70~~$15.95 per share.

The following table summarizes activity related to stock options for the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 and ~~2018.~~

	Stock Options Outstanding										Stock Options Outstanding
	2019					2018					2020					2019
				Weighted					Weighted					Weighted					Weighted
				Average					Average					Average					Average
	Number			Exercise Price		Number			Exercise Price		Number			Exercise Price		Number			Exercise Price
	Outstanding			Per Share		Outstanding			Per Share		Outstanding			Per Share		Outstanding			Per Share
Outstanding at January 1,		2,017,067		$	16.70		2,436,232		$	16.70		728,534		$	15.95		2,017,067		$	15.95
Exercises		(351,101	)		16.70		(343,780	)		16.70		(722,034	)		15.95		(29,439	)		15.95
Forfeitures or expirations		(3,000	)		16.70		(60,035	)		16.70		—			15.95		(2,000	)		15.95
Outstanding at June 30,		1,662,966		$	16.70		2,032,417		$	16.70
Outstanding at March 31,												6,500		$	15.95		1,985,628		$	15.95

For the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company recognized expenses of ~~$111~~$0 and ~~$295,~~$495, respectively, ~~and $606 and $900 for the six months ended June 30, 2019 and 2018, respectively,in relation~~related to ~~these~~ stock options. As of ~~June 30, 2019, all~~April 2020, no stock options ~~are fully vested.~~remain outstanding.

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 details of these offerings are displayed below. The Company did not retain any proceeds from the sale of its Class A common stock.

As of ~~June 30, 2019, 51,629,289~~March 31, 2020, there were 57,076,395 shares of Class A common stock ~~were~~ issued, 3,627,337 shares of treasury stock, and ~~49,231,339~~53,449,058 shares ~~were~~ outstanding, and as of December 31, ~~2018, 47,031,095~~2019, there were 52,773,617 shares of Class A common stock ~~were~~ issued, 2,757,558 shares of treasury stock, and ~~45,604,980~~50,016,059 shares ~~were~~ outstanding. The changes in Class A common stock are due primarily to the IPO and offering transactions described above, in addition to the exercise of stock options and vesting of restricted stock units in connection with the Company’s annual compensation process and ongoing hiring process.

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. 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 ~~June 30, 2019,~~March 31, 2020, and December 31, ~~2018, 10,431,422 and 10,493,358~~2019, 10,397,915 shares of Class B common stock were issued and outstanding, ~~respectively,~~ due primarily to the IPO, offering transactions, and Class B conversions described above.

During the ~~six~~three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company repurchased ~~971,835~~869,779 and ~~475,169~~616,796 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 ~~vesting~~delivery of ~~RSUs and exercise of stock options.~~equity-based compensation awards. The result of the repurchases was an increase of ~~$39,610~~$31,636 and ~~$24,172,~~$26,970, respectively, in the treasury stock balance on the Company’s condensed consolidated statements of changes in equity as of ~~June 30, 2019~~March 31, 2020 and ~~2018, respectively.~~2019.

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 ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, partners held ~~12,991,529~~12,958,022 and ~~13,053,465~~12,958,022 Group LP partnership units, respectively, representing a ~~21%~~20% and ~~22%~~21% noncontrolling interest in Moelis & Company, respectively.

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 ~~49,231,339~~53,449,058 shares of Class A common stock outstanding at ~~June 30, 2019 (45,604,980~~March 31, 2020 (50,016,059 as of December 31, ~~2018)~~2019), represents the controlling interest.

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. 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 June 30, 2019 and 2018, the Company incurred $468 and $468 in aircraft lease costs to be paid to Manager, respectively, and $936 and $936 for the six months ended June 30, 2019 and 2018, 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. InOn 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. See Note 16 for further information.~~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, 2020 and 2019, the Company incurred $324 and $468 in aircraft lease costs to be paid to Manager, respectively.

Promissory Notes —As of ~~June 30, 2019,~~March 31, 2020, there were $189 of unsecured promissory notes from employees held by the Company (December 31, ~~2018:~~2019: $189). Any outstanding balances are reflected in accrued and other receivables on the condensed consolidated statements of financial condition. The notes held as of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 bear a fixed interest rate of 4.00%. During each of the ~~six~~three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company received $0 ~~and $193~~ of principal repayments and recognized interest income of ~~$4 and $13, respectively,~~$2, on such notes, which is included in other income and expenses on the condensed consolidated statements of operations.

Services Agreement —In connection with the Company’s IPO, the Company entered into a services agreement with a related party, Moelis Asset Management LP, whereby the Company provides certain administrative services ~~technology, and office space~~ to Moelis Asset Management LP for a fee. This fee totaled ~~$66~~$110 and ~~$152~~$62 for the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and $128 and $309 for the six months ended June 30, 2019 and 2018,~~ 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 ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018, there were no~~2019, the Company had 0 balances due from Moelis Asset Management LP.

Moelis Australia —As of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the Company had no0 balance~~and $1,673~~ due tofrom Moelis Australia ~~respectively,~~ which ~~are~~is reflected in accrued and other receivables on the condensed consolidated statements of financial condition. These balances consist of amounts due to or from Moelis Australia for advisory services performed as well as billable expenses incurred by the Company on behalf of Moelis Australia during the period. The relationship between the Company and Moelis Australia is governed by a services agreement.

Revenues —From time to time, the Company enters into advisory transactions with Moelis Asset Management LP and its affiliates. The Company earned revenues associated with such transactions of $9$0 and ~~$242~~$201 for the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and $210 and $242 for the six months ended June 30, 2019 and 2018,~~ respectively.

Under the SEC Uniform Net Capital Rule (SEC Rule 15c3-1) Alternative Standard under Section (a)(1)(ii), the minimum net capital requirement is $250. At ~~June 30, 2019,~~March 31, 2020, Moelis U.S. had net capital of ~~$41,145,~~$81,893, which was ~~$40,895~~$81,643 in excess of its required net capital. At December 31, ~~2018,~~2019, Moelis U.S. had net capital of ~~$63,099~~$160,401 which was ~~$62,849~~$160,151 in excess of its required net capital.

Moelis U.S. does not carry customer accounts and does not otherwise hold funds or securities for, or owe money or securities to, customers and accordingly is exempt under Section (k)(2)(ii) of SEC Rule 15c3-3.

At ~~June 30,~~March 31, 2020, the aggregate regulatory net capital of Moelis UK was $5,967 which exceeded the minimum requirement by $5,911. At December 31, 2019, the aggregate regulatory net capital of Moelis UK was ~~$8,818~~$11,978, which exceeded the minimum requirement by ~~$8,763. At December 31, 2018, the aggregate regulatory net capital of Moelis UK was $23,041, which exceeded the minimum requirement by $22,984.~~$11,922.

Bank Line of Credit — In ~~June 2019,~~April 2020, the Company renewed its $65,000 revolving credit facility which extended the maturity date to June 30, ~~2020. In May 2018,~~2021. Unless the lender issues a notice of termination at least 60 days prior to such maturity date, this facility ~~was revised and the commitment amount increased~~will automatically extend to ~~$65,000.~~June 30, 2022.

Borrowings on the facility bear interest at the greater of a fixed rate of 3.50% per annum or at the borrower’s option of (i) LIBOR plus 1% or (ii) Prime minus 1.50%. As of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the Company had no0 borrowings under the credit facility.

As of ~~June 30, 2019,~~March 31, 2020, the Company’s available credit under this facility was ~~$60,030~~$60,069 as a result of the issuance of an aggregate amount of ~~$4,970~~$4,931 of various standby letters of credit, which were required in connection with certain office lease and other agreements. The Company incurs a 1% per annum fee on the outstanding balance of issued letters of credit.

Leases —The Company maintains operating leases for corporate offices and an aircraft with various expiration dates, some of which extend through ~~2029.~~2036. Some leases include options to terminate or to extend the lease terms. The Company records lease liabilities measured at the present value of anticipated lease payments over the lease term, including options to extend or terminate the lease when it is reasonably certain such options will be exercised. The implicit discount rates used to determine the present value of the Company’s leases are not readily determinable, thus the Company uses its secured borrowing rate, which was determined with reference to our available credit line. See below for additional information about the Company’s leases.

	Three Months Ended			Six Months Ended				Three Months Ended			Three Months Ended
	June 30,			June 30,				March 31,			March 31,
($ in thousands)	2019				2019			2020			2019
Supplemental Income Statement Information:

Operating lease cost	$	4,167		$		8,300		$	6,365		$	4,133

Supplemental Cash Flow Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,969		$		9,837
Operating cash flows for operating leases								$	5,299		$	4,868

Right-of-use assets obtained in exchange for lease obligations (e.g. new leases commenced during the period):								$	2,414		$	1,172

Other Information
Weighted-average remaining lease term - operating leases		5.10	years			5.10	years		13.82	years		5.18	years
Weighted-average discount rate - operating leases		4.00	%			4.00	%		3.53	%		4.00	%

Right-of-use assets obtained in exchange for lease obligations (e.g. new leases commenced during the period):	$	—		$		1,172

~~The Company incurred expense relating to its operating leases of $3,964 and $7,901 for the three and six months ended June 30, 2018, respectively.~~

The future ~~minimum rental payments required under the~~sublease income and maturities of our operating ~~leases in place at June 30, 2019,~~lease liabilities as of March 31, 2020, are as follows:

During the first quarter of 2019, the Company entered into a lease agreement related to its headquarters in New York. The new lease expands our current workspace at 399 Park Ave in New York and has an initial term that expires in 2036. Depending on when we gain access to the floor currently occupied by another tenant will drive when we begin recognizing the incremental space and new lease terms. Commencement of the lease is anticipated to occur in late 2019.

~~In accordance with ASC 840, the future minimum rental payments under the operating leases in place at December 31, 2018 are as follows:~~

Fiscal year ended	Operating Leases		Sublease Income			Net Minimum Payments			Sublease Income			Operating Leases
2019	$	19,742	$	(530	)	$	19,212
2020		13,836		(849	)		12,987
Remainder of 2020									$	(619	)	$	12,525
2021		8,682		(849	)		7,833			(825	)		18,955
2022		8,471		(849	)		7,622			(825	)		23,309
2023		7,090		(849	)		6,241			(825	)		20,315
2024										(825	)		18,695
Thereafter		12,349		(1,273	)		11,076			(412	)		191,443
Total Payments									$	(4,331	)	$	285,242

Less: Tenant improvement allowances								Less: Tenant improvement allowances					(24,128	)
Less: Present value adjustment								Less: Present value adjustment					(66,507	)
Total	$	70,170	$	(5,199	)	$	64,971	Total				$	194,607

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

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

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 ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ in the amounts of ~~$685~~$696 and ~~$569, respectively, and $1,368 and $1,164 for the six months ended June 30, 2019 and 2018,~~$683, respectively.

The Company’s operations are comprised of entities that are organized as limited liability companies and limited partnerships. For U.S. federal income tax purposes, taxes related to income earned by these entities represent obligations of their interest holders, except for the New York City unincorporated business tax (“UBT”) and certain other foreign, state, and local taxes. ~~In connection with the Company’s reorganization and IPO, the~~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 for income taxes and effective tax rate were ~~$1,234~~a benefit of $7,344 and ~~3%,~~(32%) and ~~$6,027~~a benefit of $4,458 and ~~10%~~(38%), for the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. ~~For the six months ended June 30, 2019 and 2018, the~~The Company’s provision for income taxes ~~and effective tax rate were~~includes a benefit of $3,224 and (6%) and an expense of $8,590 and 7%, 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 the effect of the excess tax benefit recognized in connection with the delivery of equity-based ~~compensation.~~compensation of $7,337, and a benefit of $5,740 in connection with certain tax relief provisions provided under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) enacted in the United States on March 27, 2020. The ~~excess~~tax benefit from the CARES Act is primarily attributable to the Company’s ability to carry back net operating losses to offset taxable income generated in the five preceding years, some of which were taxed at a federal income tax rate higher than the current enacted rate. As some of the calculated tax benefits ~~for~~relate to deductions subject to the ~~three months ended June 30, 2019~~Company’s Tax Receivable Agreement, the Company’s liability pursuant to the Tax Receivable Agreement was also re-measured and ~~2018 were $6,745~~the estimated impact was recorded within other income and ~~$5,387, respectively, and $13,567 and $12,805 for~~expenses on the ~~six months ended June 30, 2019 and 2018, respectively.~~condensed consolidated statement of operations.

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

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

	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended March 31,
	2019		2018		2019		2018		2020		2019
Revenues:
United States	$	132,246	$	193,557	$	254,926	$	372,239	$	129,185	$	122,680
Europe		16,005		13,896		22,721		37,332		16,256		6,716
Rest of World		5,272		12,952		13,659		30,252		8,265		8,387
Total	$	153,523	$	220,405	$	291,306	$	439,823	$	153,706	$	137,783

	June 30,		December 31,		March 31,		December 31,
	2019		2018		2020		2019
Assets:
United States	$	591,860	$	756,053	$	783,002	$	934,654
Europe		34,376		55,064		43,351		67,247
Rest of World		88,533		103,258		63,333		69,798
Total	$	714,769	$	914,375	$	889,686	$	1,071,699

As of ~~June 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, the Company had deferred revenues of ~~$11,443~~$4,450 and ~~$7,074,~~$3,023, respectively. These amounts primarily consist of upfront fees and retainers for our services. During the ~~six~~three months ended ~~June 30, 2019, $4,598~~March 31, 2020, $1,167 of revenues were recognized from the opening balance of deferred revenues.

Due to the factors that may delay or terminate a transaction (see Note 2), the Company does not estimate constrained transaction fees for revenue recognition. ~~In accordance with ASC 606-10-50-14A, quantitative~~Quantitative disclosures of constrained variable consideration are not provided for remaining, wholly unsatisfied, performance obligations. ~~In addition,~~These remaining performance obligations related to retainers, upfront fees and announcement fees are typically associated with contracts that have durations of one year or less. ~~In accordance with ASC 606-10-50-14, the Company does not disclose the expected timing and amount of revenues remaining related to such contracts.~~

On ~~July 29, 2019,~~April 20, 2020, the Board of Directors of Moelis & Company declared a dividend of ~~$0.50~~$0.255 per share to be paid on ~~September 27, 2019~~June 30, 2020 to shareholders of record as of ~~August 9, 2019.~~May 4, 2020.

~~On July 12, 2019,~~In April 2020, the Company ~~terminated~~extended 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~~$65,000 revolving credit facility 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 are comparable to the market rates of leasing from an independent third party. Mr. Moelis, as the other lessee of the aircraft, will share the operating and related costs of the plane with the Company in proportion to his respective use pursuant to the new cost sharing agreement. The terms of the New Lease and new cost sharing agreement are substantially similar to the Old Lease and related cost sharing agreement. See Note 10 for further information regarding the Old Lease.June 30, 2021.

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 and our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

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. We have made statements in this discussion that are forward-looking statements. In some cases, you can identify these statements by forward-looking 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-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, you~~These factors include, among other things, uncertainties associated with the coronavirus (“COVID-19”) pandemic, including the negative effect that the COVID-19 pandemic has had and the significant and adverse effect it is expected to continue to have on our business. You should consider the numerous risks outlined under “Risk Factors” in our Annual Report on Form 10-K and in this Form 10-Q.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. In particular, statements herein about the effects of the COVID-19 pandemic on our business, results, financial position and liquidity may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently estimated. In addition, new risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon 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-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.

Moelis & Company is a leading global independent investment bank that provides innovative strategic advice and solutions to a diverse client base, including corporations, governments and financial sponsors. We assist our clients in achieving their strategic goals by offering comprehensive integrated financial advisory services across all major industry sectors. With 1920 geographical 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. 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 client relationships and a diversified revenue base.

As of ~~June 30, 2019,~~March 31, 2020, we served our clients globally with ~~562~~591 advisory bankers. ~~We continue to grow our firm organically through internal promotions and hiring highly talented Managing Directors who all help to expand our sector, regional and product expertise.~~

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.

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 for a discussion of some of the factors that can affect our performance. The M&A market data for announced and completed transactions during the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ referenced throughout this Form 10-Q was obtained from Thomson Financial as of ~~July 3, 2019,~~April 4, 2020, and ~~July 3, 2018.~~April 4, 2019.

For the first ~~half~~three months of ~~2019,~~2020, we earned revenues of ~~$291.3~~$153.7 million, ~~a decrease~~an increase of ~~34%~~12% from the ~~$439.8~~$137.8 million earned during the same period in ~~2018.~~2019. This compares favorably with a ~~16%~~23% decrease in the number of global completed M&A transactions greater than $100 million ~~and a 9% decrease~~ in ~~volume for~~ the same period. The ~~decrease~~increase in revenues was ~~primarily~~ driven by ~~fewer~~an increase in the number of transaction completions, as well as an increase in average fees earned per completed transaction as compared towith the prior year period.

~~In the U.S., which has been a particularly strong driver~~Our team of our revenues, we are observing many companies pursue M&A as they seek to obtain a competitive advantage in their business models. In addition, based on historical experience, we believe the current economic backdrop (technological disruption, shareholder activism, record pools of capital being deployed by private equity firms and sovereign wealth funds, high corporate cash balances, relatively low interest rates and availability of credit), provides a solid foundation for sustained M&A activity. However in the first half of 2019, the M&A market slowed with completions down 16% versus the prior year period. In Europe, we continue to see slower activity, partially attributable to geo-political issues such as the U.K.’s exit from the EU. Lastly, restructuring activityinvestment banking professionals continues to be very active, providing high quality advice to clients around the globe. While our current conversations with clients remain strong, we caution that given the uncertainty and volatility in the world caused by COVID-19, there may be a ~~steady contributor~~more pronounced delay between the time we get mandated on a transaction and when a transaction can ultimately complete, which may temporarily have a negative impact on the timing of revenues. Starting toward the latter half of the first quarter of 2020, M&A transactions have generally been put on hiatus and fewer new transactions are launching due to ~~our business despite the low default environment.~~market volatility, and a general uncertain

environment caused by COVID-19. As a result, in the first quarter of 2020 global M&A transaction completions were down 23% versus the prior year period. At the same time, companies across the economy are experiencing severe financial distress as a result of the business cessation caused by COVID-19. Our ~~team~~restructuring activity has increased tremendously as companies across most sectors are seeking our advice on their capital and liquidity needs. We are confident about the longer-term revenue contribution from our restructuring business, but believe that there may be a period in our financial results where M&A transactions remain on hiatus and restructuring completions lag, causing revenues to decrease in the short term. We feel confident about our position in the market but cannot control or predict the ultimate magnitude of ~~investment banking professionals continues to gain traction~~the pandemic, the timing and ~~we expect global collaboration among them to deepen~~speed of the economic recovery, and the ~~advice provided~~ultimate impact that it may have on our revenues. We are confident about the current strength of our Franchise and our operational health in this uncertain environment. We have a strong balance sheet with substantial liquidity, zero debt, and virtually no future cash compensation obligations for past service. By remaining focused on the factors that are within our control, we are in a position to ~~resonate with clients. Our~~emerge from the current ~~conversations with clients remain strong, and~~environment better than how we ~~continue to experience demand for independent advice as clients evaluate their strategic alternatives.~~came into it.

The following is a discussion of our results of operations for the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2020 and ~~2018.~~2019.

	Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended March 31,
($ in thousands)	2019		2018		Variance			2019			2018		Variance			2020			2019			Variance
Revenues	$	153,523	$	220,405		-30	%	$	291,306		$	439,823		-34	%	$	153,706		$	137,783			12	%
Expenses:
Compensation and benefits		84,485		128,109		-34	%		174,646			255,286		-32	%		95,120			90,161			6	%
Non-compensation expenses		35,159		36,651		-4	%		73,152			73,823		-1	%		34,144			37,993			-10	%
Total operating expenses		119,644		164,760		-27	%		247,798			329,109		-25	%		129,264			128,154			1	%
Operating income (loss)		33,879		55,645		-39	%		43,508			110,714		-61	%		24,442			9,629			154	%
Other income and (expenses)		4,303		1,286		235	%		5,680			1,873		203	%		(1,660	)		2,090		N/M
Income (loss) from equity method investments		719		2,226		-68	%		1,432			3,114		-54	%
Income (loss) before income taxes		38,901		59,157		-34	%		50,620			115,701		-56	%		22,782			11,719			94	%
Provision (benefit) for income taxes		1,234		6,027		-80	%		(3,224	)		8,590	N/M				(7,344	)		(4,458	)		65	%
Net income (loss)	$	37,667	$	53,130		-29	%	$	53,844		$	107,111		-50	%	$	30,126		$	16,177			86	%

We operate in a highly competitive environment. Each revenue-generating engagement is separately solicited, awarded and negotiated, and there are usually no long-term contracted sources of revenue. As a consequence, our 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 expenses.

Revenues were ~~$153.5~~$153.7 million for the three months ended ~~June 30, 2019~~March 31, 2020 as compared with ~~$220.4~~$137.8 million for the same period in ~~2018,~~2019, representing ~~a decrease~~an increase of ~~30%~~12%. The ~~decrease~~increase in revenues was ~~primarily~~ driven by ~~fewer~~an increase in the number of transaction completions, as well as an increase in average fees earned per completed transaction as compared towith the prior year period. Toward the end of the quarter, we saw many

M&A transactions being put on hold due to the uncertainty and market volatility caused by COVID-19. COVID-19 has adversely impacted our business and is expected to continue to have a significant and adverse effect on our business, revenues and operating results in the short term.

For the three months ended ~~June 30,~~March 31, 2020 and 2019 there were 117 and ~~2018 we earned revenues from 105 and 129~~90 fee-paying clients, respectively, and the number of clients who paid fees equal to or greater than $1 million ~~decreased~~increased to 3839 clients from 5229 clients for the same period of ~~2018.~~

Revenues were $291.3 million for the six months ended June 30, 2019 as compared with $439.8 million for the same period in 2018, representing a decrease of 34%. The decrease in revenues was primarily driven by fewer transaction completions during the period.

For the six months ended June 30, 2019 and 2018 we earned revenues from 146 and 190 clients, respectively, and the number of clients who paid fees equal to or greater than $1 million decreased to 69 clients from 103 clients for the same period of 2018.2019.

	Three Months Ended June 30,									Six Months Ended June 30,									Three Months Ended March 31,
($ in thousands)	2019			2018			Variance			2019			2018			Variance			2020			2019			Variance
Expenses:
Compensation and benefits	$	84,485		$	128,109			-34	%	$	174,646		$	255,286			-32	%	$	95,120		$	90,161			6	%
% of revenues		55	%		58	%					60	%		58	%					62	%		65	%
Non-compensation expenses	$	35,159		$	36,651			-4	%	$	73,152		$	73,823			-1	%	$	34,144		$	37,993			-10	%
% of revenues		23	%		17	%					25	%		17	%					22	%		28	%
Total operating expenses	$	119,644		$	164,760			-27	%	$	247,798		$	329,109			-25	%	$	129,264		$	128,154			1	%
% of revenues		78	%		75	%					85	%		75	%					84	%		93	%

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 expenses. Compensation and benefits expenses account for the majority of our operating expenses. 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.

Operating expenses were ~~$119.6~~$129.3 million for the three months ended ~~June 30, 2019~~March 31, 2020 and ~~represent 78%~~represented 84% of revenues, compared with ~~$164.8~~$128.2 million for the same period in ~~2018~~2019 which represented ~~75%~~93% of revenues. The ~~decrease~~increase in operating expenses was primarily driven by ~~lower~~increased compensation ~~expense due to decreased revenues as compared to the prior year period.~~

~~Operating expenses were $247.8 million for the six months ended June 30, 2019~~ and represented 85% of revenues, compared with $329.1 million for the same period in 2018 which represented 75% of revenues. The decrease in operating expenses was primarily driven by lower compensation expense due to decreased revenues as compared to the prior year period.benefits expenses.

Our compensation and benefits expenses are determined by management based on revenues earned, the competitiveness of the prevailing labor market and anticipated compensation requirements for our employees, the level of recruitment of new Managing Directors, the amount of compensation expenses amortized for equity awards and other relevant factors.

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 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, which are accrued ~~each quarter,~~throughout the year, are discretionary and dependent upon a number of factors including the performance of the Company and are generally paid during the first two months of ~~each calendar~~the year with respect to prior year performance. The equity 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.

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.

For the three months ended ~~June 30, 2019, compensation‑~~March 31, 2020, compensation related expenses of ~~$84.5~~$95.1 million represented ~~55%~~62% of revenues, compared with ~~$128.1~~$90.2 million of compensation-related expenses which represented ~~58%~~65% of revenues in the prior year period. The ~~decrease~~increase in compensation expenses was primarily driven by ~~decreased revenues which resulted in lower accrued bonus expense.~~increased headcount compared to the prior year period.

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 ~~$79.2~~$95.1 million and ~~$72.5~~$90.2 million for the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. The increase in fixed compensation costs relates to increased headcount ~~and higher equity amortization~~ as compared to the prior year period. ~~The aggregate amount of discretionary~~Discretionary cash bonus expenses ~~which~~ generally ~~represents~~represent the excess amount of total compensation over base compensation and amortization of equity and contingent cash ~~awards, was $5.3 million and $55.6 million for~~awards. For the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018, respectively.~~there was no accrued discretionary cash bonus expense. The combination of the discretionary and fixed compensation expenses represents the overall compensation expense pool. ~~The decrease in discretionary cash bonus expense is primarily related to lower revenues earned during the three months ended June 30, 2019 compared to the same period in 2018.~~

For the six months ended June 30, 2019, compensation related expenses of $174.6 million and represent 60% of revenues, compared with $255.3 million which represented 58% of revenues in the prior year period. The decrease in compensation expenses was primarily driven by decreased revenues which resulted in lower bonus expense. This decrease was partially offset by higher equity amortization during the first half of 2019 compared to the same period in the prior year.

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 $169.3 million and $154.3 million for the six months ended June 30, 2019 and 2018, respectively. The increase in fixed compensation costs relates increased 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 $5.3 million and $101.0 million for the six months ended June 30, 2019 and 2018, respectively. The combination of the discretionary and fixed compensation expenses represents the overall compensation expense pool. The decrease in discretionary cash bonus expense is primarily related to lower revenues earned during the first half of 2019 compared to the same period in 2018.

Our non-compensation expenses include the costs of occupancy, professional fees, communication, technology and information services, travel and related expenses, depreciation and other expenses.

Historically, our 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 may continue as we expand into new sectors, geographies and products to serve our clients’ growing needs.

For the three months ended ~~June 30, 2019,~~March 31, 2020, non‑compensation expenses of ~~$35.2~~$34.1 million represented ~~23%~~22% of revenues, compared with ~~$36.7~~$38.0 million which represented ~~17%~~28% of revenues in the prior year period. The ~~increase in non-compensation expense as a percentage of revenues is primarily the result of a decline in revenues for the period. The~~ decrease in non-compensation ~~expense was~~expenses were primarily related to decreased travel and other business development expenses related to social distancing restrictions due to the COVID-19 virus, in addition to our continued and focused expense discipline.

~~For the six months ended June 30, 2019, non‑compensation expenses~~consists of $73.2 million represented 25% of revenues, compared with $73.8 million which represented 17% of revenues in the prior year period. Non-compensation expenses decreased marginally compared with the same period of 2018, but increased as a percentage of revenues primarily as a result of a decline in revenues for the period.

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’s share of contributions made to, distributions received from, and the equity earnings ~~and losses of, the investments. The Company reflects its share ofgains 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 under US GAAP as Moelis Australia follows local accounting principles under Australian Accounting Standards.

~~On April 1, 2010, we entered into a joint venture in Moelis Australia, investing a combination of cash~~gains and ~~certain net assets in exchange for a 50%~~losses on investments, interest ~~in the venture. On April 10, 2017, Moelis Australia Holdings PTY Limited consummated their initial public offering~~income and ~~became listed on the Australian Securities Exchange as Moelis Australia Limited (ASX: MOE). As a result of the offering, the Company’s ownership interest in Moelis Australia was diluted~~expense, and continues to be accounted for under the equity method of accounting. Certain estimates and adjustments have been made to account for the Company’s equity method investment in Moelis Australia under US GAAP as Moelis Australia follows local accounting principles under Australian Accounting Standards. Please see Note 4 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for additional information.other infrequent gains or losses.

~~Income (loss) from equity method investments related to our share~~Other income and expenses were an expense of ~~gains~~$1.7 million and ~~losses of Moelis Australia was~~ income of ~~$0.7 million and $2.2~~$2.0 million for the three months ended ~~June 30,~~March 31, 2020 and 2019, respectively. The decrease in other income and ~~2018, respectively.~~

~~Income (loss) from equity method investments~~expenses is primarily related to ~~our share of gains and losses of Moelis Australia was income of $1.4 million and $3.1 million for~~amounts due pursuant to the ~~six~~Company's Tax Receivable Agreement in connection with the CARES Act during the three months ended ~~June 30, 2019 and 2018, respectively.~~March 31, 2020

The Company’s operations are comprised of entities that are organized as limited liability companies and limited partnerships. For U.S. federal income tax purposes, taxes related to income earned by these entities represent obligations of their interest holders, except for ~~New York City UBT and~~ certain ~~other~~ foreign, state and local income taxes. ~~In connection with the Company’s reorganization and IPO, the~~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 for income taxes and effective tax rates were ~~an expense~~a benefit of ~~$1.2~~$7.3 million and 3%(32%), and ~~$6.0~~a benefit of $4.5 million and ~~10%~~(38%), for the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. The income tax provision and effective tax rate for the aforementioned periods primarily reflect the Company’s allocable share of earnings from Group LP at the prevailing U.S. federal, state, and local corporate income tax rate, and the ~~excess tax benefit recognized in connection with equity-based compensation delivered at a price above the grant date price.~~

~~The Company’s provision for income taxes and effective tax rates were a benefit~~effect of $3.2 million and (6%), and an expense of $8.6 million and 7%, for the six months ended June 30, 2019 and 2018, respectively. The income tax provision and effective tax rate for the aforementioned periods primarily reflect the Company’s allocable share of earnings from Group LP at the prevailing U.S. federal, state, and local corporate income tax rate and the excess tax benefit recognized in connection with the delivery of equity-based compensation ~~delivered~~ at aan appreciated price above the grant date ~~price.~~price for those periods in addition to the tax benefit from certain tax relief provisions provided under the CARES Act during the first quarter of 2020.

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. As of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the Company had cash equivalents of ~~$60.3~~$85.2 million and ~~$201.4~~$96.0 million, respectively, invested in U.S. Treasury instruments and government securities money market. Additionally, as of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the Company had cash of ~~$48.1~~$39.0 million and ~~$59.7~~$71.8 million, 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 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. As of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the Company held ~~$0.0~~$21.2 million and ~~$80.5~~$174.0 million of ~~government debt securities~~ U.S. treasury instrumentsclassified as investments, 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 ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 accounts receivable were ~~$42.8~~$38.4 million and ~~$54.4~~$45.1 million, respectively, net of allowances of ~~$3.9~~$3.8 million and ~~$2.0~~$4.1 million, respectively. Included in the accounts receivable balances at June 30, 2019 and December 31, 2018 were $23.6 million and $26.7 million 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.

To provide for additional working capital and other general corporate purposes, we maintain a $65.0 million revolving credit facility that matures on June 30, 2020. In April 2020, the Company renewed its $65.0 million revolving credit facility which extended the maturity date to June 30, 2021. 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 ~~June 30, 2019,~~March 31, 2020, the Company had no borrowings under the credit facility.

As of ~~June 30, 2019,~~March 31, 2020, the Company’s available credit under this facility was ~~$60.0~~$60.1 million as a result of the issuance of an aggregate amount of ~~$5.0~~$4.9 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.

The Board of Directors of Moelis & Company declared a dividend of ~~$0.50~~$0.255 per share to be paid on ~~September 27, 2019~~June 30, 2020 to Class A common shareholders of record on ~~August 9, 2019.~~May 4, 2020. The quarterly dividend has been temporarily modified to preserve capital and enhance financial flexibility during this period of uncertainty related to COVID-19. During the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 the Company paid aggregate dividends of ~~$2.25~~$1.26 per share, which included a special dividend of ~~$1.25~~$0.75 per share and ~~two~~a regular quarterly ~~dividends~~dividend of ~~$0.50~~$0.51 per share.

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. This new authorization replaced the former repurchase program and the remaining authorization under the program was eliminated. During the ~~six~~three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company repurchased ~~971,835~~869,779 and ~~475,169~~616,796 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 vesting~~delivery of ~~RSUs and exercise of stock options.~~equity-based compensation awards. The remaining balance of shares authorized for repurchase under the program was ~~$95.0~~$80.9 million as of ~~June 30, 2019.~~March 31, 2020.

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 ~~June 30, 2019~~March 31, 2020 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.

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 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.

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:

	Six Months Ended						Three Months Ended
($ in thousands)	2019			2018			2020			2019
Cash Provided By (Used In)
Operating Activities:
Net income (loss)	$	53,844		$	107,111		$	30,126		$	16,177
Non-cash charges		63,964			70,840			35,348			51,551
Other operating activities		(168,239	)		(107,956	)		(138,567	)		(190,074	)
Total operating activities		(50,431	)		69,995			(73,093	)		(122,346	)
Investing Activities		76,027			33,891			139,958			69,142
Financing Activities		(179,283	)		(184,757	)		(108,506	)		(140,212	)
Effect of exchange rate changes		958			401			(2,176	)		1,126
Net increase (decrease) in cash		(152,729	)		(80,470	)		(43,817	)		(192,290	)
Cash, cash equivalents, and restricted cash, beginning of period		261,771			213,894			168,572			261,771
Cash, cash equivalents, and restricted cash, end of period	$	109,042		$	133,424		$	124,755		$	69,481

Cash, cash equivalents and restricted cash were ~~$109.0~~$124.8 million at ~~June~~ March 31, 2020, a decrease of $43.8 million from $168.6 million at December 31, 2019. Operating activities resulted in a net outflow of $73.1million primarily attributable to net operating expenses, including discretionary bonuses paid during the period, offset by cash collected from clients. Investing activities resulted in a net inflow of $140.0 million primarily attributable to net sales of investments. Financing activities resulted in a net outflow of $108.5 million primarily related to the payment of dividends and tax distributions and treasury stock purchases.

Cash, cash equivalents and restricted cash were $69.5 million at March 31, 2019, a decrease of ~~$152.8~~$192.3 million from $261.8 million at December 31, 2018. Operating activities resulted in a net outflow of ~~$50.4~~$122.3 million primarily attributable to cash operating expenses including discretionary bonuses paid during the period, partially offset by cash collected from clients. Investing activities resulted in a net inflow of ~~$76.0~~$69.1 million primarily attributable to net sales of investments. Financing activities resulted in a net outflow of ~~$179.3~~$140.2 million primarily related to the payment of dividends and tax distributions.

Cash, cash equivalents and restricted cash were $133.4 million at June 30, 2018, a decrease of $80.5 million from $213.9 million at December 31, 2017. Operating activities resulted in a net inflow of $70.0 million primarily attributable to cash collected from clients net of cash operating expenses, including discretionary bonuses paid during the period. Investing activities resulted in a net inflow of $33.9 million primarily attributable to sales of investments. Financing activities resulted in a net outflow of $184.8 million primarily related to the payment of dividends and tax distributions.

The following table sets forth information relating to our contractual obligations as of ~~June 30, 2019:~~March 31, 2020:

As of ~~June 30, 2019,~~March 31, 2020, the Company has a total payable of ~~$311.4~~$300.9 million due pursuant to the tax receivable agreement in the condensed consolidated financial statements which represents 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, so we do not expect the cash payments to have a material impact on our liquidity. There were no payments made pursuant to the tax receivable agreement during the first ~~half~~three months of ~~2019.~~2020.

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 to any liability that is not reflected in our condensed consolidated financial statements except for those described under “Contractual Obligations” above.

Our business is not 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.

Our 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. We invest most of our cash in highly-rated municipal bonds, U.S. government agency debt securities and U.S. treasury instruments. Cash is maintained in U.S. and 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 various types of ~~government debt securities~~U.S. 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 investments are not subject to any material interest rate risk, equity price risk, credit risk or other market 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—Accounts Receivable and Allowance for ~~Doubtful Accounts.~~Credit Losses.”

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 may be affected by movements in the rate of exchange between the pound sterling, euro, Brazilian real, Hong Kong dollar, rupee and the U.S. dollar, in which our financial statements are denominated. For the three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the net impact of the fluctuation of foreign currencies in other comprehensive income (loss) in the condensed statements of comprehensive income were ~~losses~~a loss of ~~$0.1~~$1.6 million ~~and $1.8 million, respectively,~~ and a gain of $0.5 million, ~~and a loss of $0.2 million for the six months ended June 30, 2019 and 2018,~~ 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.

We believe that the critical accounting policies 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.

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

Incremental costs of obtaining a contract are expensed as incurred since such costs are generally not recoverable and the typical duration of our advisory contracts is less than one ~~year (as allowed per ASC 340-40-25-1).~~year. Costs to fulfill contracts consist of out-of-pocket expenses that are part of performing our advisory services and are typically expensed as incurred, except where the transfer and consumption of our services occurs at a point in time. For engagements recognized at a point in time, out-of-pocket expenses are capitalized and subsequently expensed in the condensed consolidated statement of operations upon completion of the engagement. The Company records deferred revenues when it receives fees from clients that have not yet been earned (e.g. an upfront fee) or when the Company has an unconditional right to consideration before all performance obligations are complete (e.g. upon satisfying conditions to earn an announcement fee, but before the transaction is consummated).

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.

~~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.

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.

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.

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 ~~statements~~statement of ~~financial condition reflect~~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 under US GAAP as Moelis Australia follows local accounting principles under Australian Accounting Standards.bad debt expense.

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 that some portion or all of the deferred tax assets will not be realized.

ASC 740 prescribes a two step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the ~~six~~three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ no unrecognized tax benefit was recorded. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. For the ~~six~~three months ended ~~June 30,~~March 31, 2020 and 2019, ~~and 2018,~~ no such amounts were recorded.

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

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

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.”

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) 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.

No change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 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.

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.

Except as set forth below, 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, ~~2018~~2019 as filed with the Securities and Exchange Commission ("SEC").

The scale, scope and duration of the impact of the COVID-19 pandemic on our business are unpredictable and depend on a number of factors outside of our control. We cannot reasonably predict the magnitude of the ultimate impact that COVID-19 will have on us and the impact may have a sustained material adverse effect on our business, revenues, operating results and financial condition.

The rapid, worldwide spread of a novel strain of coronavirus (“COVID-19”) has created global economic disruption and uncertainty. COVID-19 has adversely impacted our business and is expected to continue to have a significant and adverse effect on our business, revenues and operating results in the short term. The scale, scope and duration of the impact of the COVID-19 pandemic are unpredictable. The negative impact of COVID-19 on our business may be sustained, increase in significance and affect us in ways we cannot foresee at this time.

As a financial services firm, we are materially affected by conditions in the global financial markets and economic conditions throughout the world. During periods of unfavorable market or economic conditions, including current market conditions, the volume and value of M&A transactions decreases, thereby reducing the demand for our M&A advisory services and increasing price competition among financial services companies seeking such engagements. Starting in March 2020, M&A transactions have generally been put on hiatus and fewer new transactions are launching due to market volatility and uncertainty caused by COVID-19. Our results of operations are expected to be adversely affected by such reduction in the volume or value of such advisory transactions. Further, in the period following an economic downturn, the volume and value of M&A transactions typically takes time to recover and lags a recovery in market and economic conditions. Our profitability is expected to be adversely affected in the short term due to COVID-19 and may be impacted for a sustained period if we determine not to, or are unable to, scale back fixed and other costs within a time frame sufficient to match decreases in revenue relating to changes in market and economic conditions. We believe COVID-19’s adverse impact will also be significantly driven by other factors that are beyond our control, including, for example: the timing, scope and effectiveness of additional governmental responses to the pandemic; medical advancements providing treatments for COVID-19, the timing and speed of economic recovery; and the impact on our clients’ willingness to transact in a sustained uncertain environment.

We have implemented various initiatives to reduce the impact of COVID-19, such as employees working remotely from home, while also seeking to maintain business continuity. We face various cybersecurity and other operational risks related to our business on a day to day basis, which are heightened by COVID-19. We rely heavily on financial, accounting, communication and other information technology systems, including, without limitation, cloud based storage systems, and the people who operate them. These systems, including the systems of third parties on whom we rely, may experience a disruption as a result of COVID-19 or increased cybersecurity threats. If we were unable to timely and successfully recover, that could materially disrupt our business and cause material financial loss, regulatory actions, reputational harm or legal liability. An extended period of remote working by our employees could strain our technology resources and introduce operational risks, including heightened cybersecurity risk. Remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts that seek to exploit the COVID-19 pandemic. COVID-19 presents a threat to our employees’ well-being. While we have implemented a business continuity plan to protect the health of our employees, such plans cannot anticipate all scenarios, and we may experience a potential loss of productivity.

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 3129^stth day of ~~July, 2019.~~April, 2020.

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

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

		Page

Part I. Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2625
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3634
Item 4.	Controls and Procedures	3634
Part II. Other Information
Item 1.	Legal Proceedings	3735
Item 1A.	Risk Factors	3735
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3736
Item 3.	Defaults Upon Senior Securities	3736
Item 4.	Mine Safety Disclosures	3736
Item 5.	Other Information	3736
Item 6.	Exhibits	3837
Signatures		3938


		Page

Condensed Consolidated Statements of Financial Condition as of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019		4
Condensed Consolidated Statements of Operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~		5
Condensed Consolidated Statements of Comprehensive Income for the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~		6
Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~		7
Condensed Consolidated Statements of Changes in Equity for the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~		8
Notes to Condensed Consolidated Financial Statements		109

	Three Months Ended March 31, 2020
	Accounts Receivable
		Short-term Receivables				Private Funds Advisory Receivables				Total
Allowance for Credit Losses, beginning balance	$		4,088		$		-		$		4,088
Adjustment for adoption of ASU 2016-13			260				199				459
Allowance for Credit Losses, adjusted beginning balance			4,348				199				4,547
Charge-offs			(1,289	)			-				(1,289	)
Recoveries			(724	)			(26	)			(750	)
Reduction to allowance			(2,013	)			(26	)			(2,039	)
Provision for credit losses			1,216				52				1,268
Allowance for credit losses, ending balance	$		3,551		$		225		$		3,776


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


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

	Total		Level 1			Level 2			Level 3
Financial assets:
Included in cash and cash equivalents
U.S. treasury instruments		46,253			46,253			—			—
Government securities money market		13,994		—				13,994		—
Investments
Common stock		149			149		—				—
Total financial assets	$	60,396	$		46,402	$		13,994	$		—

	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

	Total Shares		Total Increase in
Date of Offering	Offered		Shares Outstanding
November, 2014		6,325,000		4,511,058
January, 2017		5,750,000		5,356,876
July, 2017		6,000,000		5,680,903
March, 2018		5,000,000		4,689,295
August, 2018		5,000,000		4,685,217
Total		28,075,000		24,923,349

	Class B Stock
	Purchased /			Purchase Cost
Date of Offering	Surrendered			(in thousands)
November, 2014		4,507,453	$		28
January, 2017		5,356,876			101
July, 2017		5,680,903			128
March, 2018		4,689,295			135
August, 2018		4,685,217			158
Total		24,919,744	$		550

	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 $4,988 of committed sublease income) (1)	$	55,078	$	17,949	$	16,054	$	12,571	$	8,504
Amount due pursuant to Tax Receivable Agreement		311,432		13,235		39,876		47,166		211,155
Total	$	366,510	$	31,184	$	55,930	$	59,737	$	219,659

							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)
April 1 - April 30		20,960	$	37.71		20,960	$	99.2	million
May 1 - May 31		266,027		35.99		68,575		97.0	million
June 1 - June 30		68,052		33.13		60,374		95.0	million
Total		355,039	$	35.55		149,909	$	95.0	million

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 filed with the SEC on April 22, 2014)

3.2		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 22, 2014)

10.1		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 ~~10.22~~10.24 to the Registrant’s Annual Report on Form 10-K filed on February ~~27, 2019)~~26, 2020)

~~10.2~~		~~Cost Sharing and Operating Agreement, dated July 12, 2019, between Kenneth Moelis and Moelis & Company Group LP~~

~~10.3~~		~~Aircraft Dry Lease Agreement, dated July 12, 2019, among Moelis & Company Manager LLC, Kenneth Moelis and Moelis & Company Group LP~~

~~10.4~~		~~Second Amendment to the Amended and Restated Agreement of Limited Partnership of Moelis & Company Group LP, dated July 31, 2019~~

31.1		Rule 13a-14(a) Certification of Chief Executive Officer of the Registrant in accordance with Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Rule 13a-14(a) Certification of Chief Financial Officer of the Registrant in accordance with Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Section 1350 Certification of Chief Executive Officer of the Registrant in accordance with Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Section 1350 Certification of Chief Financial Officer of the Registrant in accordance with Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase

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


	MOELIS & COMPANY

	/s/ Kenneth Moelis
	Kenneth Moelis
	Chief Executive Officer

	/s/ Joseph Simon
	Joseph Simon
	Chief Financial Officer