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 April ~~16, 2020,~~15, 2021, there were ~~53,419,336~~61,325,544 shares of Class A common stock, par value $0.01 per share, and ~~10,397,915~~4,899,457 shares of Class B common stock, par value $0.01 per share, outstanding.

	March 31,			December 31,			March 31,			December 31,
	2020			2019			2021			2020
Assets
Cash and cash equivalents	$	124,158		$	167,812		$	155,402		$	202,477
Restricted cash		597			760			1,081			807
Receivables:
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
Accounts receivable, net of allowance for credit losses of $6,183 and $3,775 as of March 31, 2021 and December 31, 2020, respectively								71,824			89,297
Accrued and other receivables		13,680			10,722			45,427			11,916
Total receivables		52,031			55,796			117,251			101,213
Deferred compensation		16,592			11,748			15,676			12,004
Investments		58,881			213,231			118,427			211,826
Right-of-use assets		186,524			190,763			171,857			177,069
Equipment and leasehold improvements, net		25,934			13,992			52,067			49,977
Deferred tax asset		408,095			400,496
Deferred tax assets								423,281			424,345
Prepaid expenses and other assets		16,874			17,101			16,055			16,726
Total assets	$	889,686		$	1,071,699		$	1,071,097		$	1,196,444
Liabilities and Equity
Compensation payable	$	12,424		$	163,131		$	59,889		$	220,058
Accounts payable, accrued expenses and other liabilities		24,778			16,107			24,583			25,026
Amount due pursuant to tax receivable agreement		300,871			297,986			324,064			307,581
Deferred revenue		4,450			3,023			8,105			2,692
Lease liabilities		194,607			197,625			193,876			196,614
Total liabilities		537,130			677,872			610,517			751,971
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	)
Class A common stock, par value $0.01 per share (1,000,000,000 shares authorized, 66,648,561 issued and 61,325,544 outstanding at March 31, 2021; 1,000,000,000 authorized, 61,986,927 issued and 58,027,844 outstanding at December 31, 2020)								666			620
Class B common stock, par value $0.01 per share (1,000,000,000 shares authorized, 4,899,457 issued and outstanding at March 31, 2021; 1,000,000,000 authorized, 5,948,750 issued and outstanding at December 31, 2020)								49			59
Treasury stock, at cost; 5,323,017 and 3,959,083 shares as of March 31, 2021 and December 31, 2020, respectively								(226,381	)		(152,170	)
Additional paid-in-capital		933,094			872,791			1,101,205			1,052,322
Retained earnings (accumulated deficit)		(378,817	)		(324,192	)		(393,166	)		(420,682	)
Accumulated other comprehensive income (loss)		128			1,432			(856	)		(201	)
Total Moelis & Company equity		415,608			442,827			481,517			479,948
Noncontrolling interests		(63,052	)		(49,000	)		(20,937	)		(35,475	)
Total equity		352,556			393,827			460,580			444,473
Total liabilities and equity	$	889,686		$	1,071,699		$	1,071,097		$	1,196,444

	Three Months Ended March 31,						Three Months Ended March 31,
	2020			2019			2021				2020
Revenues	$	153,706		$	137,783		$	263,866			$	153,706
Expenses
Compensation and benefits		95,120			90,161			156,499				95,120
Occupancy		7,231			4,819			7,695				7,231
Professional fees		4,236			5,179			5,999				4,236
Communication, technology and information services		8,392			7,962			8,659				8,392
Travel and related expenses		7,944			11,497			1,610				7,944
Depreciation and amortization		1,199			1,155			1,449				1,199
Other expenses		5,142			7,381			9,512				5,142
Total expenses		129,264			128,154			191,423				129,264
Operating income (loss)		24,442			9,629			72,443				24,442
Other income and (expenses)		(1,660	)		2,090			3,179				(1,660	)
Income (loss) before income taxes		22,782			11,719			75,622				22,782
Provision (benefit) for income taxes		(7,344	)		(4,458	)		(176	)			(7,344	)
Net income (loss)		30,126			16,177			75,798				30,126
Net income (loss) attributable to noncontrolling interests		4,996			2,607			9,269				4,996
Net income (loss) attributable to Moelis & Company	$	25,130		$	13,570		$	66,529			$	25,130
Weighted-average shares of Class A common stock outstanding
Basic		52,666,457			48,309,358			60,932,966				52,666,457
Diluted		57,092,982			55,108,335			66,360,217				57,092,982
Net income (loss) per share attributable to holders of shares of Class A common stock										��
Basic	$	0.48		$	0.28		$	1.09			$	0.48
Diluted	$	0.44		$	0.25		$	1.00			$	0.44

	Three Months Ended March 31,					Three Months Ended March 31,
	2020			2019		2021			2020
Net income	$	30,126		$	16,177
Net income (loss)						$	75,798		$	30,126
Foreign currency translation adjustment, net of tax		(1,630	)		540		(744	)		(1,630	)
Other comprehensive income (loss)		(1,630	)		540		(744	)		(1,630	)
Comprehensive income (loss)		28,496			16,717		75,054			28,496
Less: Comprehensive income attributable to noncontrolling interests		4,670			2,726
Less: Comprehensive income (loss) attributable to noncontrolling interests							9,180			4,670
Comprehensive income (loss) attributable to Moelis & Company	$	23,826		$	13,991	$	65,874		$	23,826

	Three Months Ended March 31,						Three Months Ended March 31,
	2020			2019			2021			2020
Cash flows from operating activities
Net income (loss)	$	30,126		$	16,177		$	75,798		$	30,126
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Bad debt expense		518			1,288			3,149			518
Depreciation and amortization		1,199			1,155			1,449			1,199
Equity-based compensation		38,255			38,886			50,963			38,255
Deferred tax provision		(6,723	)		10,638			21,245			(6,723	)
Other		2,099			(416	)		(2,615	)		2,099
Changes in assets and liabilities:
Accounts receivable		5,565			8,720			14,401			5,565
Accrued and other receivables		(1,899	)		3,626			(32,589	)		(1,899	)
Prepaid expenses and other assets		117			(183	)		(587	)		117
Deferred compensation		(4,925	)		(2,616	)		(3,660	)		(4,925	)
Compensation payable		(150,260	)		(186,519	)		(160,178	)		(150,260	)
Accounts payable, accrued expenses and other liabilities		9,454			(19,021	)		1,969			9,454
Deferred revenue		1,439			3,071			5,409			1,439
Dividends received		1,942			2,848			2,279			1,942
Net cash provided by (used in) operating activities		(73,093	)		(122,346	)		(22,967	)		(73,093	)
Cash flows from investing activities
Purchase of investments		(28,152	)		(9,245	)		(78,723	)		(28,152	)
Proceeds from sales of investments		181,249			80,559			173,046			181,249
Note payments received from employees								70			—
Purchase of equipment and leasehold improvements		(13,139	)		(2,172	)		(3,539	)		(13,139	)
Net cash provided by (used in) investing activities		139,958			69,142			90,854			139,958
Cash flows from financing activities
Dividends and distributions		(88,689	)		(113,734	)		(39,685	)		(88,689	)
Proceeds from exercise of stock options		11,819			492			—			11,819
Treasury stock purchases		(31,636	)		(26,970	)		(74,211	)		(31,636	)
Net cash provided by (used in) financing activities		(108,506	)		(140,212	)		(113,896	)		(108,506	)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash		(2,176	)		1,126			(792	)		(2,176	)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(43,817	)		(192,290	)		(46,801	)		(43,817	)
Cash, cash equivalents, and restricted cash, beginning of period		168,572			261,771			203,284			168,572
Cash, cash equivalents, and restricted cash, end of period	$	124,755		$	69,481		$	156,483		$	124,755
Supplemental cash flow disclosure:
Cash paid during the period for:
Income taxes	$	1,560		$	11,895		$	1,913		$	1,560
Other non-cash activity
Cumulative effect adjustment upon adoption of ASU 2016-13	$	364		$	—		$	—		$	364
Dividend equivalents issued	$	12,125		$	19,484		$	5,131		$	12,125
Class A Partnership Units or other equity converted into Class A Common Stock	$	786		$	240		$	3,903		$	786
Dividend declared not paid	$	—		$	657
Forfeiture of fully-vested Group LP units or other equity units	$	96		$	—		$	25		$	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, 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
Balance as of January 1, 2021																															61,986,927		5,948,750			(3,959,083	)	$	620	$	59		$	(152,170	)	$	1,052,322		$	(420,682	)	$	(201	)	$	(35,475	)	$	444,473
Net income (loss)		—		—		—			—		—		—			—			25,130			—			4,996			30,126			—		—			—			—		—			—			—			66,529			—			9,269			75,798
Equity-based compensation		3,581,294		—		—			36		—		—			38,189			—			—			30			38,255			3,612,341		—			—			36		—			—			41,508			—			—			9,419			50,963
Other comprehensive income (loss)		—		—		—			—		—		—			—			—			(1,304	)		(326	)		(1,630	)		—		—			—			—		—			—			—			—			(655	)		(89	)		(744	)
Dividends declared ($1.26 per share of Class A Common Stock) and distributions		—		—		—			—		—		—			12,125			(79,391	)		—			(21,423	)		(88,689	)
Dividends declared ($0.55 per share of Class A common stock) and tax distributions																															—		—			—			—		—			—			5,131			(39,013	)		—			(5,803	)		(39,685	)
Treasury Stock Purchases		—		—		(869,779	)		—		—		(31,636	)		—			—			—			—			(31,636	)		—		—			(1,363,934	)		—		—			(74,211	)		—			—			—			—			(74,211	)
Exercise of Stock options		721,484		—		—			7		—		—			11,812			—			—			—			11,819
Equity-based payments to non-employees		—		—		—			—		—		—			158			—			—			—			158			—		—			—			—		—			—			108			—			—			—			108
Issuance of Class A common stock and cancellation of Class B common stock in connection with offerings and other exchanges																															1,049,293		(1,049,293	)		—			10		(10	)		—			2,161			—			—			1,742			3,903
Other		—		—		—			—		—		—			(1,981	)		—			—			2,671			690			—		—			—			—		—			—			(25	)		—			—			—			(25	)
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
Balance as of March 31, 2021																															66,648,561		4,899,457			(5,323,017	)	$	666	$	49		$	(226,381	)	$	1,101,205		$	(393,166	)	$	(856	)	$	(20,937	)	$	460,580

	Shares																	Retained			Accumulated
	Class A		Class B					Class A		Class B					Additional			Earnings			Other
	Common		Common		Treasury			Common		Common		Treasury			Paid-In			(Accumulated			Comprehensive			Noncontrolling			Total
	Stock		Stock		Stock			Stock		Stock		Stock			Capital			Deficit)			Income (Loss)			Interests			Equity
Balance as of January 1, 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)		—		—		—			—		—		—			—			25,130			—			4,996			30,126
Equity-based compensation		3,581,294		—		—			36		—		—			38,189			—			—			30			38,255
Other comprehensive income (loss)		—		—		—			—		—		—			—			—			(1,304	)		(326	)		(1,630	)
Dividends declared ($1.26 per share of Class A common stock) and tax distributions		—		—		—			—		—		—			12,125			(79,391	)		—			(21,423	)		(88,689	)
Treasury Stock Purchases		—		—		(869,779	)		—		—		(31,636	)		—			—			—			—			(31,636	)
Exercise of Stock options		721,484		—		—			7		—		—			11,812			—			—			—			11,819
Equity-based payments to non-employees		—		—		—			—		—		—			158			—			—			—			158
Other		—		—		—			—		—		—			(1,981	)		—			—			2,671			690
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

Class A

Class B

Class A

Class B

Additional

Earnings

Other

Common

Common

Treasury

Common

Common

Treasury

Paid-In

(Accumulated

Comprehensive

Noncontrolling

Total

Stock

Stock

Stock

Stock

Stock

Stock

Capital

Deficit)

Income (Loss)

Interests

Equity

Balance as of January 1, 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)

—

—

—

—

—

—

—

13,570

—

2,607

16,177

Equity-based compensation

2,397,164

—

—

24

—

—

38,753

—

—

109

38,886

Other comprehensive income (loss)

—

—

—

—

—

—

—

—

421

119

540

Dividends declared ($1.75 per share of Class A Common Stock) and distributions

—

—

—

—

—

—

19,484

(103,436
)

—

(30,439
)

(114,391
)
Treasury Stock Purchases

—

—

(616,796
)

—

—

(26,970
)

—

—

—

—

(26,970
)
Exercise of Stock options

29,439

—

—

—

—

—

492

—

—

—

492

Equity-based payments to non-employees

—

—

—

—

—

—

416

—

—

—

416

Other

—

—

—

—

—

—

(734
)

—

—

974

240

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

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

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

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, ~~2019.~~2020.

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

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

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

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.~~market securities.

The Company’s restricted cash is comprised of collateral deposits primarily held by certain non-U.S. subsidiaries. These deposits are required for certain direct debit accounts and are also used to satisfy future medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of March 31, ~~2020~~2021 and ~~2019,~~2020, is presented below.

	March 31,				March 31,
	2020		2019		2021		2020
Cash	$	38,975	$	32,703	$	97,899	$	38,975
Cash equivalents		85,183		36,429		57,503		85,183
Restricted cash		597		349		1,081		597
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	124,755	$	69,481	$	156,483	$	124,755

Additionally, as of December 31, ~~2019,~~2020, the Company held cash of ~~$71,798~~$83,472 and cash equivalents of ~~$96,014.~~$119,005.

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

Included in the accounts receivable balances at March 31, ~~2020~~2021 and December 31, ~~2019~~2020 were ~~$21,341~~$21,774 and ~~$19,879~~$19,603 of long term receivables related to private funds advisory capital raising engagements, which are generally paid in installments over a period of three to four years. These long term receivables generated interest income of ~~$188~~$204 and ~~$275~~$188 for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively.

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

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

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

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

	Three Months Ended March 31, 2020												Three Months Ended March 31, 2021
	Accounts Receivable												Accounts Receivable
		Short-term Receivables				Private Funds Advisory Receivables				Total				Short-term Receivables				Private Funds Advisory Receivables			Total
Allowance for Credit Losses, beginning balance	$		4,088		$		-		$		4,088		$		3,577		$		198	$		3,775
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	)			(741	)			—			(741	)
Recoveries			(724	)			(26	)			(750	)			(1,126	)			—			(1,126	)
Reduction to allowance			(2,013	)			(26	)			(2,039	)			(1,867	)			—			(1,867	)
Provision for credit losses			1,216				52				1,268				4,253				22			4,275
Allowance for credit losses, ending balance	$		3,551		$		225		$		3,776		$		5,963		$		220	$		6,183

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)~~lowest level of observability) based on inputs:

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

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

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

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

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.

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

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

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 condensed consolidated statement of financial condition. Such capitalized costs are amortized using the straight-line method over the term of the cloud computing service contract or another rational basis, beginning when the cloud computing arrangement is substantially complete and ready for its intended use. All costs not directly related to the implementation of cloud computing arrangements, including overhead costs and costs of service agreements, will be expensed in the period they are incurred. The amortization expense of such capitalized costs will be presented under communication, technology and information services on the condensed consolidated statement of operations.

Effective January 1, 2020, the Company adopted ASU 2018-15, “Goodwill and Other —Internal Use Software” using a prospective approach (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in cloud computing arrangements with the requirements for capitalizing costs to develop or obtain internal-use software. ~~As of March 31, 2020,~~See Note 4—Fixed and Intangible Assets below for further details on the ~~Company~~Company’s capitalized ~~approximately $202 in implementation costs related to its~~ cloud computing ~~arrangements~~arrangements..

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

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

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

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

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

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

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

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

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

The Company has a retirement plan whereby a retiring employee generally will not forfeit certain qualifying incentive RSUs granted during employment if at retirement the employee meets certain requirements. For qualifying awards, 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 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 ”~~Taxes” (“ASC 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s condensed consolidated statements of financial condition as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.

ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, 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 months ended March 31, ~~2020~~2021 and ~~2019,~~2020, no such amounts were recorded.

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

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

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

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

	March 31,			December 31,			March 31,			December 31,
	2020			2019			2021			2020
Office equipment	$	11,860		$	13,593		$	13,286		$	13,267
Furniture and fixtures		5,017			5,054			10,529			10,409
Leasehold improvements		15,199			15,294			36,548			36,286
Construction in progress		15,258			2,108			18,078			14,943
Total		47,334			36,049			78,441			74,905
Less accumulated depreciation and amortization		(21,400	)		(22,057	)		(26,374	)		(24,928	)
Equipment and leasehold improvements, net	$	25,934		$	13,992		$	52,067		$	49,977

Depreciation and amortization expenses for fixed assets totaled ~~$1,199~~$1,449 and ~~$1,155~~$1,199 for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively.

As of March 31, ~~2020,~~2021, there were ~~$202~~$2,493 of costs capitalized within prepaid expenses and other assets on our condensed consolidated statement of financial position related to the implementation of cloud computing arrangements. ~~Such arrangements are still in development~~The amortization expense of the capitalized costs was $122 and ~~are not yet subject to amortization.~~$0 for the three months ended March 31, 2021 and 2020, respectively, and was recorded within communication, technology and information services on the condensed consolidated statement of operations.

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

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

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

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

The estimated fair values of ~~government~~money market securities ~~money markets,~~and U.S. Treasury instruments ~~and government debt securities as of March 31, 2020 and December 31, 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 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.

The following table summarizes the levels of the fair value hierarchy into which the Company’s financial assets fall as of March 31, ~~2020:~~2021:

	Total		Level 1			Level 2			Level 3			Total		Level 1			Level 2		Level 3
Financial assets:
Included in cash and cash equivalents
U.S. treasury instruments	$	62,564	$	—		$		62,564	$	—		$	17,000	$	—		$	17,000	$	—
Government securities money market		22,619		—				22,619		—
Money market securities													40,503		—			40,503		—
Investments
U.S. treasury instruments		21,227			—			21,227		—			72,262			—		72,262		—
Common stock		302			302		—				—
Total financial assets	$	106,712	$		302	$		106,410	$		—	$	129,765	$		—	$	129,765	$		—

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

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

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

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~~$172,640 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, 2019.2020.

Equity-method investments are contained within the balance of investments on the Company’s condensed consolidated statements of financial condition. On April 1, 2010, the Company entered into a 50-50 joint venture in Moelis Australia Holdings PTY Limited, investing a combination of cash and certain net assets in exchange for its interests. On April 10, 2017, Moelis Australia Holdings PTY Limited consummated their initial public offering and became listed on the Australian Securities Exchange as Moelis Australia Limited (ASX: MOE). As a result of the offering, the Company’s ownership interest in Moelis Australia was diluted and continues to be accounted for under the equity method of accounting. ~~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~~17, 2021 and February ~~20, 2019,~~19, 2020, Moelis Australia declared dividends, of which the Company received ~~$1,942~~$2,279 and ~~$2,848~~$1,942 on March 4, ~~2020~~2021 and March ~~6, 2019,~~4, 2020, respectively. The Company accounted for the dividends as a return on investment and reduced the carrying value of the investment in Moelis Australia by $2,279 and $1,942, ~~and $2,848,~~ respectively.

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~~2021 and December 31, ~~2019~~2020 were ~~$37,352~~$38,754 and ~~$38,944,~~$38,143, respectively, and are included within investments on the condensed consolidated statements of financial condition. The Company’s share of earnings on this investment is recorded in other income and expenses on the condensed consolidated statements of operations.

The calculations of basic and diluted net income (loss) per share attributable to holders of shares of Class A common stock for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 are presented below.

	Three Months Ended March 31,						Three Months Ended March 31,
(dollars in thousands, except per share amounts)	2020			2019			2021			2020
Numerator:
Net income (loss) attributable to holders of shares of Class A common stock—basic	$	25,130		$	13,570		$	66,529		$	25,130
Add (deduct) dilutive effect of:
Noncontrolling interests related to Class A partnership units			(a)			(a)			(a)			(a)
Net income (loss) attributable to holders of shares of Class A common stock—diluted	$	25,130		$	13,570		$	66,529		$	25,130
Denominator:
Weighted average shares of Class A common stock outstanding—basic		52,666,457			48,309,358			60,932,966			52,666,457
Add (deduct) dilutive effect of:
Noncontrolling interests related to Class A partnership units			(a)			(a)			(a)			(a)
Weighted average number of incremental shares issuable from unvested restricted stock, RSUs and stock options, as calculated using the treasury stock method		4,426,525	(b)		6,798,977	(b)
Weighted average number of incremental shares issuable from unvested RSUs and stock options, as calculated using the treasury stock method								5,427,251	(b)		4,426,525	(b)
Weighted average shares of Class A common stock outstanding—diluted		57,092,982			55,108,335			66,360,217			57,092,982
Net income (loss) per share attributable to holders of shares of Class A common stock
Basic	$	0.48		$	0.28		$	1.09		$	0.48
Diluted	$	0.44		$	0.25		$	1.00		$	0.44

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

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~~units 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.~~holding units. 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 1 share of Moelis & Company Class A common stock and represents the Company’s noncontrolling interests. ~~As of March 31, 2020, partners held 12,958,022 Class A partnership units, 36,634 of which were unvested and will continue to vest over their service life.~~

~~In relation to the units that continue to vest, the~~The Company recognized compensation expenses of ~~$30~~$0 and ~~$109~~$30 for the three months ended March 31, 2021 and 2020, ~~and 2019, respectively.As of March 31, 2020, there was $9 of unrecognized compensation expense related~~respectively, in relation to ~~unvested Class A~~these pre-IPO partnership ~~units which is expected to be recognized over a weighted-average period of 0.1 years, using the graded vesting method.~~units.

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

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

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 $80.9 million as of March 31, 2020.

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

Pursuant to the Plan and in connection with the Company’s annual compensation process and ongoing hiring process, the Company issues RSUs and other stock-based awards which generally vest over a service life of four to five years. For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, the Company recognized expense of ~~$38,225~~$50,963 and ~~$38,282,~~$38,225, respectively, in relation to these ~~RSUs.~~awards.

The following table summarizes activity related to ~~restricted stock~~RSUs and ~~RSUs~~other stock-based awards for the three months ended March 31, ~~2020~~2021 and ~~2019.~~

	Restricted Stock & RSUs										RSUs and Other Stock-based Awards
	2020					2019					2021					2020
				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,		8,414,130		$	42.19		8,761,224		$	37.59		8,742,695		$	41.45		8,414,130		$	42.19
Granted		3,585,725			37.93		3,495,863			46.08		3,100,355			54.74		3,585,725			37.93
Forfeited		(48,512	)		37.00		(14,415	)		46.84		(34,974	)		48.44		(48,512	)		37.00
Vested		(2,894,992	)		38.67		(2,787,084	)		36.62		(3,689,539	)		42.86		(2,894,992	)		38.67
Unvested Balance at March 31,		9,056,351		$	41.53		9,455,588		$	41.04		8,118,537		$	46.43		9,056,351		$	41.53

As of March 31, ~~2020,~~2021, the total compensation expense related to unvested ~~restricted stock~~RSUs and ~~RSUs~~other stock-based awards not yet recognized was ~~$204,253.~~$221,171. The weighted-average period over which this compensation expense is expected to be recognized at March 31, ~~2020~~2021 is ~~2.0~~2.2 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~~During the six year life of the options, the Company paid special dividends of $9.05, in ~~aggregate, through March 31, 2020.~~aggregate. As required under Section 5 of the Company’s 2014 Omnibus Incentive Plan, the Compensation Committee of the Company’s Board of Directors equitably reduced the exercise price of the Company’s outstanding options to purchase common stock by $9.05 from $25.00 per share to $15.95 per share.

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

	Stock Options Outstanding										Stock Options Outstanding
	2020					2019					2020
				Weighted					Weighted					Weighted
				Average					Average					Average
	Number			Exercise Price		Number			Exercise Price		Number			Exercise Price
	Outstanding			Per Share		Outstanding			Per Share		Outstanding			Per Share
Outstanding at January 1,		728,534		$	15.95		2,017,067		$	15.95		728,534		$	15.95
Exercises		(722,034	)		15.95		(29,439	)		15.95		(722,034	)		15.95
Forfeitures or expirations		—			15.95		(2,000	)		15.95		—			—
Outstanding at March 31,		6,500		$	15.95		1,985,628		$	15.95		6,500		$	15.95

For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, the Company recognized 0 expenses ~~of $0 and $495, respectively, related~~in relation to these stock options. As of April 2020, no0 stock options remain outstanding.

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

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~~aggregate increase to Class A common stock as a result of ~~these~~such offerings ~~are displayed below.~~was 24,923,349 shares. The Company did not retain any proceeds from the sale of its Class A common stock.

As of March 31, ~~2020,~~2021, there were ~~57,076,395~~66,648,561 shares of Class A common stock issued, ~~3,627,337~~5,323,017 shares of treasury stock, and ~~53,449,058~~61,325,544 shares outstanding, and as of December 31, ~~2019,~~2020, there were ~~52,773,617~~61,986,927 shares of Class A common stock issued, ~~2,757,558~~3,959,083 shares of treasury stock, and ~~50,016,059~~58,027,844 shares outstanding. The changes in Class A common stock are due primarily to the IPO, ~~and~~ offering transactions described above, ~~in addition to~~exchanges of Class A partnership units, the exercise of stock options and vesting of restricted stock units in connection with the Company’s annual compensation process and ongoing hiring process.

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

As of March 31, ~~2020,~~2021, and December 31, ~~2019, 10,397,915~~2020, 4,899,457 and 5,948,750 shares of Class B common stock were issued and outstanding, respectively, due primarily to the IPO, offering transactions, and Class B conversions described above.

During the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, the Company repurchased ~~869,779~~1,363,934 and ~~616,796~~869,779 shares, respectively, pursuant to the Company’s share repurchase program and shares repurchased from its employees for the purpose of settling tax liabilities incurred upon the delivery of equity-based compensation awards. The result of the repurchases was an increase of ~~$31,636~~$74,211 and ~~$26,970,~~$31,636, respectively, in the treasury stock balance on the Company’s condensed consolidated statements of changes in equity as of March 31, ~~2020~~2021 and ~~2019.~~2020.

A Group LP Class A partnership unit (not held by Moelis & Company or its subsidiaries) is exchangeable into 1 share of Moelis & Company Class A common stock and represents the Company’s noncontrolling interests (non-redeemable). As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, partners held ~~12,958,022~~7,855,398 and ~~12,958,022~~8,508,857 Group LP partnership units, respectively, representing ~~a 20%~~an 11% and ~~21%~~13% 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 ~~53,449,058~~61,325,544 shares of Class A common stock outstanding at March 31, ~~2020 (50,016,059~~2021 (58,027,844 as of December 31, ~~2019)~~2020), 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 was used and operated by the Company pursuant to a dry lease with Manager. The terms of the dry lease were comparable to the market rates of leasing from an independent third party. Pursuant to this dry lease arrangement, the lessee is obligated to bear its share of the costs of operating the aircraft. In addition, Mr. Moelis was the other lessee of the aircraft and shared the operating and related costs of the plane in proportion to his respective use pursuant to a cost sharing and operating agreement. On July 12, 2019, the Company terminated its aircraft dry lease with Manager, the lessor, and Mr. Moelis, the other lessee (the “Old Lease”) and the related cost sharing agreement with Mr. Moelis, which were set to expire by their terms on December 31, 2019, and entered into a new dry lease with Manager, the lessor, and Mr. Moelis, the other lessee (the “New Lease”) and cost sharing agreement with Mr. Moelis, which terminate on December 31, 2022. The terms of the New Lease and new cost sharing agreement are substantially similar to the Old Lease and related cost sharing agreement.

For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, the Company incurred $324 and ~~$468~~$324 in aircraft lease costs to be paid to Manager, respectively.

Promissory Notes —As of March 31, ~~2020,~~2021, there were ~~$189~~$319 of unsecured promissory notes from employees held by the Company (December 31, ~~2019: $189)~~2020: $389). Any outstanding balances are reflected in accrued and other receivables on the condensed consolidated statements of financial condition. The notes ~~held as of March 31, 2020 and December 31, 2019~~ bear a fixed interest ~~rate of~~rates ranging from 3.00% to 4.00%. During ~~each of~~ the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, the Company received $70 and $0 of principal repayments and recognized interest income of $5 and $2, on such notes, respectively, which is included in other income and expenses on the condensed consolidated statements of operations.

Services Agreement —In connection with the Company’s IPO, the Company entered into a services agreement with a related party, Moelis Asset Management LP, whereby the Company provides certain administrative services to Moelis Asset Management LP for a fee. This fee totaled ~~$110~~$57 and ~~$62~~$110 for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The amount of the fee is based upon the estimated usage and related expense of all shared services between the Company and Moelis Asset Management LP during the relevant period, and will be assessed periodically by management as per the terms of the agreement. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had 0 balances due from Moelis Asset Management LP.

Affiliated SPACs—During 2020, the Company began providing office space, secretarial, administrative and other corporate services for a fee of $10 a month to Atlas Crest I. In February 2021, the Company began providing these services to Atlas Crest II and is expected to begin providing these services to the other Atlas Crest Entities upon consummation of their initial public offerings, in each case for a fee of $10 per month. For the three months ended March 31, 2021, these fees totaled $50. This arrangement shall continue with each Atlas Crest Entity until such Atlas Crest Entity consummates a business combination or is liquidated. As of March 31, 2021 and December 31, 2020, the Company had 0 balance due from the Atlas Crest Entities or their sponsors.

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

Moelis Australia —As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had 0a balance of $5 due ~~from~~to Moelis Australia which is reflected in accrued and other receivables on the condensed consolidated statements of financial condition. These balances consist of amounts due to or from Moelis Australia for advisory services performed as well as billable expenses incurred by the Company on behalf of Moelis Australia during the period. The relationship between the Company and Moelis Australia is governed by a services agreement.

Revenues —From time to time, the Company enters into advisory transactions with Moelis Asset Management LP and its affiliates. The Company earned revenues associated with such transactions of $0 ~~and $201~~ for each of the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, 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 March 31, ~~2020,~~2021, Moelis U.S. had net capital of ~~$81,893,~~$101,232, which was ~~$81,643~~$100,982 in excess of its required net capital. At December 31, ~~2019,~~2020, Moelis U.S. had net capital of ~~$160,401~~$96,800 which was ~~$160,151~~$96,550 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 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 $11,978, which exceeded the minimum requirement by $11,922.

Certain other non-U.S. subsidiaries are subject to various securities and banking regulations and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. These subsidiaries have exceeded their local capital adequacy requirements at March 31, 2021.

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

Borrowings on the facility bear interest at the greater of a fixed rate of 3.50% per annum or at the borrower’s option of (i) LIBOR plus 1% or (ii) Prime minus 1.50%. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had 0 borrowings under the credit facility.

As of March 31, ~~2020,~~2021, the Company’s available credit under this facility was ~~$60,069~~$60,507 as a result of the issuance of an aggregate amount of ~~$4,931~~$4,493 of various standby letters of credit, which were required in connection with certain office lease and other agreements. The Company incurs a 1% per annum fee on the outstanding balance of issued letters of credit.

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

	Three Months Ended			Three Months Ended			Three Months Ended
	March 31,			March 31,			March 31,
($ in thousands)	2020			2019			2021			2020
Supplemental Income Statement Information:

Operating lease cost	$	6,365		$	4,133		$	7,154		$	6,365

Supplemental Cash Flow Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	5,299		$	4,868
Net operating cash outflows for operating leases							$	5,980		$	5,299

Right-of-use assets obtained in exchange for lease obligations (e.g. new leases commenced during the period):	$	2,414		$	1,172
Right-of-use assets obtained in exchange for lease obligations (e.g. new leases and amendments commenced during the period):							$	321		$	2,414

Other Information
Weighted-average remaining lease term - operating leases		13.82	years		5.18	years		13.69	years		13.82	years
Weighted-average discount rate - operating leases		3.53	%		4.00	%		3.52	%		3.53	%

The future sublease income and maturities of our operating lease liabilities as of March 31, ~~2020,~~2021, are as follows:

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 March 31, ~~2020~~2021 and ~~2019,~~2020, in the amounts of $715 and $696, ~~and $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 certain other foreign, state, and local taxes (for example, the New York City unincorporated business tax (“UBT”) ~~and certain other foreign, state, and local taxes. The~~). In addition, the Company is subject to U.S. corporate federal, state, and local income tax on its allocable share of results of operations from Group LP.

The Company’s ~~provision~~provisions for income taxes and effective tax ~~rate~~rates were a benefit of $176 and (0.2%) and a benefit of $7,344 and ~~(32%) and a benefit of $4,458 and (38%~~(32.2%), for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The ~~Company’s~~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 ~~taxes includes a~~tax rates offset by the effect of the excess tax benefit recognized in connection with the delivery of equity-based compensation at an appreciated price above the grant date price for such equity. The excess tax benefits for the three months ended March 31, 2021 and 2020 were $17,542 and $7,337, respectively.

There was an exchange of ~~$7,337, and~~Class A partnership units for Class A common stock in February 2021 that resulted in an increase to our deferred tax asset related to a ~~benefit of $5,740 in connection with certain tax relief provisions provided under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) enacted~~step-up in the ~~United States on March 27, 2020. The~~ tax ~~benefit from~~basis in Group LP assets. Approximately $19,392 of the ~~CARES Act~~increase to this deferred tax asset is ~~primarily~~ attributable to exchanges by certain partners of Group LP who are party to the ~~Company’s ability~~tax receivable agreement. Pursuant 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~~this agreement, 85% (or $16,483) of the ~~calculated~~ tax benefits ~~relate~~associated with this portion of the deferred tax asset are payable to ~~deductions subject to~~such exchanging partners over the ~~Company’s Tax Receivable Agreement, the Company’s liability~~next 15 years and recorded as amount due pursuant to ~~the Tax Receivable Agreement was also re-measured and the estimated impact was recorded within other income and expenses on~~tax receivable agreement in the condensed consolidated ~~statement~~statements of ~~operations.~~financial condition. The remaining tax benefit is allocable to the Company and is recorded in additional paid-in-capital.

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

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

	Three Months Ended March 31,				Three Months Ended March 31,
	2020		2019		2021		2020
Revenues:
United States	$	129,185	$	122,680	$	206,252	$	129,185
Europe		16,256		6,716		43,716		16,256
Rest of World		8,265		8,387		13,898		8,265
Total	$	153,706	$	137,783	$	263,866	$	153,706

	March 31,		December 31,		March 31,		December 31,
	2020		2019		2021		2020
Assets:
United States	$	783,002	$	934,654	$	899,075	$	1,012,831
Europe		43,351		67,247		87,404		78,470
Rest of World		63,333		69,798		84,618		105,143
Total	$	889,686	$	1,071,699	$	1,071,097	$	1,196,444

As of March 31, ~~2020,~~2021, and December 31, ~~2019,~~2020, the Company had deferred revenues of ~~$4,450~~$8,105 and ~~$3,023,~~$2,692, respectively. These amounts primarily consist of upfront fees and retainers for our services. During the three months ended March 31, ~~2020, $1,167~~2021, $1,682 of revenues were recognized from the opening balance of deferred revenues.

Due to the factors that may delay or terminate a transaction (see Note 2), the Company does not estimate constrained transaction fees for revenue recognition. Quantitative disclosures of constrained variable consideration are not provided for remaining, wholly unsatisfied, performance obligations. ~~These~~The remaining performance obligations related to retainers, upfront fees and announcement fees are typically associated with contracts that have durations of one year or less.

~~On April 20, 2020, the~~The Board of Directors of Moelis & Company declared a special dividend of ~~$0.255~~$2.00 per share in addition to a regular quarterly dividend of $0.55 per share. The $2.55 per share towill be paid on June ~~30, 2020~~18, 2021 to shareholders of record as of May ~~4, 2020.~~

~~In April 2020, the Company extended its $65,000 revolving credit facility to June 30,~~10, 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, ~~2019.~~2020.

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~~statements You can identify these forward looking statements by ~~forward-looking~~the use of words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “predict,” “potential” or “continue,” the negative of these terms and other comparable terminology. These ~~forward-looking~~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. 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.events 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~~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~~forward looking statements. You should not rely upon ~~forward-looking~~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~~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 2022 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 March 31, ~~2020,~~2021, we served our clients globally with ~~591~~613 advisory bankers. 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 months ended March 31, ~~2020~~2021 and ~~2019,~~2020, referenced throughout this Form 10-Q was obtained from Refinitiv, formerly known as Thomson Financial as of April ~~4, 2020,~~5, 2021, and April 4, ~~2019.~~2020.

For the first three months of ~~2020,~~2021, we earned revenues of ~~$153.7~~$263.9 million ~~an increase of 12% from the $137.8~~compared with $153.7 million earned during the same period in ~~2019.~~2020. This represents an increase of 72% year over year and compares favorably with ~~a 23% decrease~~an 18% increase in the number of global completed M&A transactions greater than $100 million in the same period. The increase in revenues was driven by an increase in the number of transaction completions, as well as an increase in average fees earned per completed transaction as compared with the prior year period.

Our team of investment banking professionals continues to be very active, providing high quality advice to a growing number of clients around the globe. ~~While our current conversations with clients remain strong, we caution that given~~In the uncertainty and volatility in the world caused by COVID-19, there may be a 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 firstfourth quarter of 2020 the global M&A market experienced the strongest quarter of announced transactions ~~have generally been put~~in history. The same elevated pace of announcements continued into 2021, starting the year with a very robust environment for deal announcements. This strong activity should allow for a positive M&A environment in the near to intermediate term. As a result, our M&A activity for both strategics and financial sponsors remains elevated versus the prior year. While the health of the global economy has improved dramatically since last year, our restructuring activity continues to be steady as companies in certain parts of the economy are continuing to experience ongoing financial issues as a result of the business disruption caused by COVID-19. In addition, the record levels of corporate debt issued in the past year should also provide a solid level of restructuring activity over the longer-term. Combined with our growing capital markets business, which benefits from our SPAC expertise, we believe we are well positioned to provide advice to companies across all sectors on ~~hiatus~~their capital and ~~fewer new transactions are launching due to market volatility, and a general uncertain~~liquidity needs.

Our talented employees have adapted to the work from home 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 ofWe believe that while COVID-19 may continue to add uncertainty to the business ~~cessation caused by COVID-19. Our restructuring activity has increased tremendously as companies across most sectors are seeking~~environment, our ~~advice on their capital~~Firm remains well positioned due to our business continuity planning, experienced management team, 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 the pandemic, the timing and speed of the economic recovery, and the 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 emerge from the current environment better than how we came into it.~~client coverage.

The following is a discussion of our results of operations for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.

	Three Months Ended March 31,									Three Months Ended March 31,
($ in thousands)	2020			2019			Variance			2021			2020			Variance
Revenues	$	153,706		$	137,783			12	%	$	263,866		$	153,706		72%
Expenses:
Compensation and benefits		95,120			90,161			6	%		156,499			95,120		65%
Non-compensation expenses		34,144			37,993			-10	%		34,924			34,144		2%
Total operating expenses		129,264			128,154			1	%		191,423			129,264		48%
Operating income (loss)		24,442			9,629			154	%		72,443			24,442		196%
Other income and (expenses)		(1,660	)		2,090		N/M				3,179			(1,660	)	N/M
Income (loss) before income taxes		22,782			11,719			94	%		75,622			22,782		232%
Provision (benefit) for income taxes		(7,344	)		(4,458	)		65	%		(176	)		(7,344	)	-98%
Net income (loss)	$	30,126		$	16,177			86	%	$	75,798		$	30,126		152%

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 period are not necessarily predictive of continued high levels of revenues in future periods. To develop new business, our professionals maintain an active 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 ~~$153.7~~$263.9 million for the three months ended March 31, ~~2020~~2021 as compared with ~~$137.8~~$153.7 million for the same period in ~~2019,~~2020, representing an increase of ~~12%~~72%. The increase in revenues was primarily driven by ~~an increase in the number of~~greater transaction completions as ~~well as an increase in average fees earned per completed transaction as~~ compared ~~with~~to 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 March 31, 2021 and 2020, ~~and 2019 there were~~the number of fee-paying clients increased to 178 clients from 117 ~~and 90 fee-paying~~ clients, respectively, and the number of clients ~~who~~that paid fees equal to or greater than $1 million increased to 3968 clients from 2939 clients for the same period of ~~2019.~~2020.

	Three Months Ended March 31,									Three Months Ended March 31,
($ in thousands)	2020			2019			Variance			2021			2020			Variance
Expenses:
Compensation and benefits	$	95,120		$	90,161			6	%	$	156,499		$	95,120			65	%
% of revenues		62	%		65	%					59	%		62	%
Non-compensation expenses	$	34,144		$	37,993			-10	%	$	34,924		$	34,144			2	%
% of revenues		22	%		28	%					13	%		22	%
Total operating expenses	$	129,264		$	128,154			1	%	$	191,423		$	129,264			48	%
% of revenues		84	%		93	%					73	%		84	%

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 ~~$129.3~~$191.4 million for the three months ended March 31, ~~2020~~2021 and represented ~~84%~~73% of revenues, compared with ~~$128.2~~$129.3 million for the same period in ~~2019~~2020 which represented ~~93%~~84% of revenues. The increase in operating expenses was primarily driven by ~~increased~~higher compensation and benefits ~~expenses.~~expenses associated with greater revenues.

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. As a result, our compensation expenses may fluctuate materially in any particular period. Accordingly, the amount of compensation expenses recognized in any particular period may not be consistent with prior periods or indicative of future periods.

Our compensation expenses consist of base salary and benefits, annual incentive compensation payable as cash bonus awards, including certain amounts subject to clawback and contingent upon a required period of service (“contingent cash awards”) and amortization of ~~equity-based~~equity‑based compensation awards. Base salary and benefits are paid ratably throughout the year. Equity awards are amortized into compensation expenses on a graded basis (based upon the fair value of the award at the time of grant) during the service period over which the award vests, which is typically four or five years. The awards are recorded within equity as they are expensed. Contingent cash awards are amortized into compensation expenses over the required service period. Cash bonuses, which are accrued throughout the year, are discretionaryand dependent upon a number of factors including the performance of the Company and are generally paid during the first two months of 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 March 31, ~~2020,~~2021, compensation related expenses of ~~$95.1~~$156.5 million represented ~~62%~~59% of revenues, compared with ~~$90.2~~$95.1 million ~~of compensation-related expenses~~ which represented ~~65%~~62% of revenues in the prior year period. The increase in compensation expenses was primarily ~~driven by increased headcount compared~~related 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 $95.1 million and $90.2 million for the three months ended March 31, 2020 and 2019, respectively. The increase in fixed compensation costs relates to increased headcounthigher discretionary bonus expense associated with greater revenues as compared to the prior year period. Discretionary cash bonus expenses generally represent the excess amount of total compensation over base compensation and amortization of equity and contingent cash awards. For the three months ended March 31, 2020 and 2019, there was no accrued discretionary cash bonus expense. The combination of the discretionary and fixed compensation expenses represents the overall compensation expense pool.

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 (prior to COVID-19), 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 March 31, ~~2020,~~2021, non‑compensation expenses of ~~$34.1~~$34.9 million represented ~~22%~~13% of revenues, compared with ~~$38.0~~$34.1 million which represented ~~28%~~22% of revenues in the prior year period. The ~~decrease in non-compensation expenses were~~marginal increase is primarily related to increased transaction related costs associated with certain revenues, partially offset by decreased travel and other business development expenses related to COVID-19 social distancing ~~restrictions due to the COVID-19 virus, in addition to our continued and focused expense discipline.~~restrictions.

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

Other income and expenses were anincome of $3.2 million and expense of $1.7 ~~million and income of $2.0~~ million for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The ~~decrease~~increase in other income and expenses is primarily related to ~~amounts due pursuant to~~ the ~~Company's Tax Receivable Agreement~~Company’s share of earnings from its investment in ~~connection with the CARES Act during the three months ended March 31, 2020~~Moelis Australia.

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

The Company’s provision for income taxes and effective tax rates were a benefit of ~~$7.3~~$0.2 million and ~~(32%~~(0.2%), and a benefit of ~~$4.5~~$7.3 million and ~~(38%~~(32.2%), for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The income tax provision and effective tax rate for the aforementioned periods primarily reflect the Company’s allocable share of ~~earnings~~operating results from Group LP at the prevailing U.S. federal, state, and local corporate income tax rate, ~~and~~offset by the ~~effect~~impact of the excess tax benefit recognized in connection with ~~the delivery of~~ equity-based compensation delivered at ~~an appreciated~~a price above the grant date ~~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.~~price.

Our current assets have historically been comprised of cash, 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 with respect to 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 March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had cash equivalents of ~~$85.2~~$57.5 million and ~~$96.0~~$119.0 million, respectively, invested in U.S. Treasury instruments and ~~government securities~~ money ~~market.~~market securities. Additionally, as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had cash of ~~$39.0~~$97.9 million and ~~$71.8~~$83.5 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 March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company held ~~$21.2~~$72.3 million and ~~$174.0~~$172.7 million of U.S. treasury instruments classified 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 March 31, ~~2020~~2021 and December 31, ~~2019~~2020 accounts receivable were ~~$38.4~~$71.8 million and ~~$45.1~~$89.3 million, respectively, net of allowances of $6.2 million and $3.8 million, ~~and $4.1 million,~~ respectively.

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,~~facility. Unless the ~~Company renewed its $65.0 million revolving credit facility which extended~~lender issues a notice of termination at least 60 days prior to the maturity date of June 30, 2021, this facility will automatically extend to June 30, ~~2021.~~2022. 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 March 31, ~~2020,~~2021, the Company had no borrowings under the credit facility.

As of March 31, ~~2020,~~2021, the Company’s available credit under this facility was ~~$60.1~~$60.5 million as a result of the issuance of an aggregate amount of ~~$4.9~~$4.5 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 special dividend of ~~$0.255~~$2.00 per share in addition to a regular quarterly dividend of $0.55 per share. The $2.55 per share will be paid on June ~~30, 2020~~18, 2021 to Class A common shareholders of record on 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.~~10, 2021. During the three months ended March 31, ~~2020~~2021 the Company paid aggregate dividends of ~~$1.26 per share, which included a special dividend of $0.75 per share and a regular quarterly dividend of $0.51~~$0.55 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 three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, the Company repurchased ~~869,779~~1,363,934 and ~~616,796~~869,779 shares, respectively, pursuant to the Company’s share repurchase program and shares repurchased from its employees for the purpose of settling tax liabilities incurred upon delivery of equity-based compensation awards. The remaining balance of shares authorized for repurchase under the program was ~~$80.9~~$73.6 million as of March 31, ~~2020.~~2021.

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 10 of the condensed consolidated financial statements as of March 31, ~~2020~~2021 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:

	Three Months Ended						Three Months Ended
($ in thousands)	2020			2019			2021			2020
Cash Provided By (Used In)
Operating Activities:
Net income (loss)	$	30,126		$	16,177		$	75,798		$	30,126
Non-cash charges		35,348			51,551			74,191			35,348
Other operating activities		(138,567	)		(190,074	)		(172,956	)		(138,567	)
Total operating activities		(73,093	)		(122,346	)		(22,967	)		(73,093	)
Investing Activities		139,958			69,142			90,854			139,958
Financing Activities		(108,506	)		(140,212	)		(113,896	)		(108,506	)
Effect of exchange rate changes		(2,176	)		1,126			(792	)		(2,176	)
Net increase (decrease) in cash		(43,817	)		(192,290	)		(46,801	)		(43,817	)
Cash, cash equivalents, and restricted cash, beginning of period		168,572			261,771			203,284			168,572
Cash, cash equivalents, and restricted cash, end of period	$	124,755		$	69,481		$	156,483		$	124,755

Cash, cash equivalents and restricted cash were $156.5 million at March 31, 2021, a decrease of $46.8 million from $203.3 million at December 31, 2020. Operating activities resulted in a net outflow of $23.0million primarily attributable to cash collected from clients, net of cash operating outflows, including discretionary bonuses paid during the period. Investing activities resulted in a net inflow of $90.9 million primarily attributable to cash inflows for net sales of investments. Financing activities resulted in a net outflow of $113.9 million primarily related to treasury stock purchases and the payment of dividends and tax distributions.

Cash, cash equivalents and restricted cash were $124.8 million at 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 $192.3 million from $261.8 million at December 31, 2018. Operating activities resulted in a net outflow of $122.3million 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 $69.1 million primarily attributable to net sales of investments. Financing activities resulted in a net outflow of $140.2 million primarily related to the payment of dividends and tax distributions.

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

As of March 31, ~~2020,~~2021, the Company has a total payable of ~~$300.9~~$324.1 million due pursuant to the tax receivable agreement in the ~~condensed~~ consolidated financial statements ~~which represents~~and of this amount an estimated $2.8 million will be due in less than one year. These amounts represent management’s best estimate of the amounts currently expected to be owed under the tax receivable agreement. Payments made under the tax receivable agreement are required to be made within 225 days of the filing of our tax returns. 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 three months of ~~2020.~~2021.

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

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 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 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 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 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 and other income from investments may be affected by movements in the rate of exchange between the pound sterling, euro, Brazilian real, Hong Kong dollar, rupee, Australian dollar, and the U.S. dollar, in which our financial statements are denominated. For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, the net impact of the fluctuation of foreign currencies in other comprehensive income (loss) in the condensed statements of comprehensive income were ~~a loss~~losses of ~~$1.6~~$0.7 million and ~~a gain of $0.5~~$1.6 million, 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 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.

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

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. 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~~two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, no unrecognized tax benefit was recorded. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, 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~~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, ~~2019~~2020 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.

							Approximate Dollar									Approximate Dollar
							Value of Shares									Value of Shares
					Shares Purchased		that May Yet be							Shares Purchased		that May Yet be
	Total Number				as Part of Publicly		Purchased Under			Total Number				as Part of Publicly		Purchased Under
	of Shares		Average Price		Announced Plans		the Plan			of Shares		Average Price		Announced Plans		the Plan
Period	Purchased(1)		Paid per Share		or Programs(2)		Or Programs(2)			Purchased(1)		Paid per Share		or Programs(2)		Or Programs(2)
January 1 - January 31		61,248	$	31.69		61,248	$	84.5	million		—	$	—		—	$	75.2 million
February 1 - February 29		765,791		37.01		90,000		81.1	million
February 1 - February 28											1,279,818		54.42		29,938		73.6 million
March 1 - March 31		42,740		31.75	��	6,099		80.9	million		84,116		54.22		—		73.6 million
Total		869,779	$	36.38		157,347	$	80.9	million		1,363,934	$	54.41		29,938	$	73.6 million

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 29^th day of April, ~~2020.~~2021.

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	2524
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3432
Item 4.	Controls and Procedures	3432
Part II. Other Information
Item 1.	Legal Proceedings	3533
Item 1A.	Risk Factors	3533
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3633
Item 3.	Defaults Upon Senior Securities	3633
Item 4.	Mine Safety Disclosures	3633
Item 5.	Other Information	3633
Item 6.	Exhibits	3734
Signatures		3835


		Page

Condensed Consolidated Statements of Financial Condition as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020		4
Condensed Consolidated Statements of Operations for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020		5
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020		6
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020		7
Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020		8
Notes to Condensed Consolidated Financial Statements		9

	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


☒	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 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

Fiscal year ended	Sublease Income			Operating Leases
Remainder of 2021	$	(689	)	$	14,323
2022		(919	)		24,214
2023		(919	)		20,971
2024		(919	)		19,085
2025		(459	)		16,326
Thereafter		-			177,587
Total Payments	$	(3,905	)	$	272,506

Less: Tenant improvement allowances					(18,440	)
Less: Present value adjustment					(60,190	)
Total				$	193,876

	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 $4,331 of committed sublease income)	$	280,911	$	16,565	$	41,003	$	36,658	$	186,685
Amount due pursuant to Tax Receivable Agreement		300,871		22,014		45,204		37,248		196,405
Total	$	581,782	$	38,579	$	86,207	$	73,906	$	383,090

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, dated April 28, 2021 by and between Moelis & Company Group LP, Moelis Asset Management LP and certain subsidiaries of Moelis Asset Management LP ~~(incorporated by reference to Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K filed on February 26, 2020)~~

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