Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 16, 2020 | |
Entity Registrant Name | Moelis & Co | |
Entity Central Index Key | 0001596967 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MC | |
Entity File Number | 001-36418 | |
Entity Tax Identification Number | 46-4500216 | |
Entity Address, Address Line One | 399 Park Avenue | |
Entity Address, Address Line Two | 5th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10022 | |
City Area Code | 212 | |
Local Phone Number | 883-3800 | |
Title of 12(b) Security | Class A Common Stock | |
Security Exchange Name | NYSE | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Class A Common Stock | ||
Entity Common Stock, Shares Outstanding | 53,419,336 | |
Class B Common Stock | ||
Entity Common Stock, Shares Outstanding | 10,397,915 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 124,158 | $ 167,812 |
Restricted cash | 597 | 760 |
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 |
Accrued and other receivables | 13,680 | 10,722 |
Total receivables | 52,031 | 55,796 |
Deferred compensation | 16,592 | 11,748 |
Investments | 58,881 | 213,231 |
Right-of-use assets | 186,524 | 190,763 |
Equipment and leasehold improvements, net | 25,934 | 13,992 |
Deferred tax asset | 408,095 | 400,496 |
Prepaid expenses and other assets | 16,874 | 17,101 |
Total assets | 889,686 | 1,071,699 |
Liabilities and Equity | ||
Compensation payable | 12,424 | 163,131 |
Accounts payable, accrued expenses and other liabilities | 24,778 | 16,107 |
Amount due pursuant to tax receivable agreement | 300,871 | 297,986 |
Deferred revenue | 4,450 | 3,023 |
Lease liabilities | 194,607 | 197,625 |
Total liabilities | 537,130 | 677,872 |
Commitments and Contingencies (See Note 11) | ||
Treasury stock, at cost; 3,627,337 and 2,757,558 shares as of March 31, 2020 and December 31, 2019, respectively | (139,472) | (107,836) |
Additional paid-in-capital | 933,094 | 872,791 |
Retained earnings (accumulated deficit) | (378,817) | (324,192) |
Accumulated other comprehensive income (loss) | 128 | 1,432 |
Total Moelis & Company equity | 415,608 | 442,827 |
Noncontrolling interests | (63,052) | (49,000) |
Total equity | 352,556 | 393,827 |
Total liabilities and equity | 889,686 | 1,071,699 |
Class A Common Stock | ||
Liabilities and Equity | ||
Common stock, par value $0.01 per share | 571 | 528 |
Total equity | 571 | 528 |
Class B Common Stock | ||
Liabilities and Equity | ||
Common stock, par value $0.01 per share | 104 | 104 |
Total equity | $ 104 | $ 104 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts receivable, allowance for credit losses | $ 3,776 | $ 4,088 |
Treasury stock, shares | 3,627,337 | 2,757,558 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 57,076,395 | 52,773,617 |
Common stock, shares outstanding | 53,449,058 | 50,016,059 |
Treasury stock, shares | 3,627,337 | 2,757,558 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 10,397,915 | 10,397,915 |
Common stock, shares outstanding | 10,397,915 | 10,397,915 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | $ 153,706 | $ 137,783 |
Expenses | ||
Compensation and benefits | 95,120 | 90,161 |
Occupancy | 7,231 | 4,819 |
Professional fees | 4,236 | 5,179 |
Communication, technology and information services | 8,392 | 7,962 |
Travel and related expenses | 7,944 | 11,497 |
Depreciation and amortization | 1,199 | 1,155 |
Other expenses | 5,142 | 7,381 |
Total expenses | 129,264 | 128,154 |
Operating income (loss) | 24,442 | 9,629 |
Other income and (expenses) | (1,660) | 2,090 |
Income (loss) before income taxes | 22,782 | 11,719 |
Provision (benefit) for income taxes | (7,344) | (4,458) |
Net income (loss) | 30,126 | 16,177 |
Net income (loss) attributable to noncontrolling interests | 4,996 | 2,607 |
Net income (loss) attributable to Moelis & Company | 25,130 | 13,570 |
Class A Common Stock | ||
Expenses | ||
Net income (loss) attributable to Moelis & Company | $ 25,130 | $ 13,570 |
Weighted-average shares of Class A common stock outstanding | ||
Basic (in shares) | 52,666,457 | 48,309,358 |
Diluted (in shares) | 57,092,982 | 55,108,335 |
Net income (loss) per share attributable to holders of shares of Class A common stock | ||
Basic (in dollars per share) | $ 0.48 | $ 0.28 |
Diluted (in dollars per share) | $ 0.44 | $ 0.25 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 30,126 | $ 16,177 |
Foreign currency translation adjustment, net of tax | (1,630) | 540 |
Other comprehensive income (loss) | (1,630) | 540 |
Comprehensive income (loss) | 28,496 | 16,717 |
Less: Comprehensive income attributable to noncontrolling interests | 4,670 | 2,726 |
Comprehensive income (loss) attributable to Moelis & Company | $ 23,826 | $ 13,991 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net income (loss) | $ 30,126 | $ 16,177 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Bad debt expense | 518 | 1,288 |
Depreciation and amortization | 1,199 | 1,155 |
Equity-based compensation | 38,255 | 38,886 |
Deferred tax provision | (6,723) | 10,638 |
Other | 2,099 | (416) |
Changes in assets and liabilities: | ||
Accounts receivable | 5,565 | 8,720 |
Accrued and other receivables | (1,899) | 3,626 |
Prepaid expenses and other assets | 117 | (183) |
Deferred compensation | (4,925) | (2,616) |
Compensation payable | (150,260) | (186,519) |
Accounts payable, accrued expenses and other liabilities | 9,454 | (19,021) |
Deferred revenue | 1,439 | 3,071 |
Dividends received | 1,942 | 2,848 |
Net cash provided by (used in) operating activities | (73,093) | (122,346) |
Cash flows from investing activities | ||
Purchase of investments | (28,152) | (9,245) |
Proceeds from sales of investments | 181,249 | 80,559 |
Purchase of equipment and leasehold improvements | (13,139) | (2,172) |
Net cash provided by (used in) investing activities | 139,958 | 69,142 |
Cash flows from financing activities | ||
Dividends and distributions | (88,689) | (113,734) |
Proceeds from exercise of stock options | 11,819 | 492 |
Treasury stock purchases | (31,636) | (26,970) |
Net cash provided by (used in) financing activities | (108,506) | (140,212) |
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash | (2,176) | 1,126 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (43,817) | (192,290) |
Cash, cash equivalents, and restricted cash, beginning of period | 168,572 | 261,771 |
Cash, cash equivalents, and restricted cash, end of period | 124,755 | 69,481 |
Cash paid during the period for: | ||
Income taxes | 1,560 | 11,895 |
Other non-cash activity | ||
Cumulative effect adjustment upon adoption of ASU 2016-13 | 364 | |
Dividend equivalents issued | 12,125 | 19,484 |
Class A Partnership Units or other equity converted into Class A Common Stock | 786 | 240 |
Dividend declared not paid | $ 657 | |
Forfeiture of fully-vested Group LP units or other equity units | $ 96 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Class A Common Stock | Class B Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests |
Balance at beginning of the period at Dec. 31, 2018 | $ 371,753 | $ 470 | $ 105 | $ (56,661) | $ 697,938 | $ (237,782) | $ 291 | $ (32,608) |
Balance at beginning of the period (in shares) at Dec. 31, 2018 | 47,031,095 | 10,493,358 | (1,426,115) | |||||
Changes in Equity | ||||||||
Net income (loss) | 16,177 | 13,570 | 2,607 | |||||
Equity-based compensation | 38,886 | $ 24 | 38,753 | 109 | ||||
Equity-based compensation (in shares) | 2,397,164 | |||||||
Other comprehensive income (loss) | 540 | 421 | 119 | |||||
Dividends declared and distributions | (114,391) | 19,484 | (103,436) | (30,439) | ||||
Treasury Stock Purchases | $ (26,970) | $ (26,970) | ||||||
Treasury stock purchases (in shares) | (616,796) | (616,796) | ||||||
Exercise of Stock options | $ 492 | 492 | ||||||
Exercise of stock options (in shares) | 29,439 | |||||||
Equity-based payments to non-employees | 416 | 416 | ||||||
Other | 240 | (734) | 974 | |||||
Balance at end of the period at Mar. 31, 2019 | 287,143 | $ 494 | $ 105 | $ (83,631) | 756,349 | (327,648) | 712 | (59,238) |
Balance at end of the period (in shares) at Mar. 31, 2019 | 49,457,698 | 10,493,358 | (2,042,911) | |||||
Balance at beginning of the period at Dec. 31, 2019 | 393,827 | $ 528 | $ 104 | $ (107,836) | 872,791 | (324,192) | 1,432 | (49,000) |
Balance at beginning of the period (in shares) at Dec. 31, 2019 | 52,773,617 | 10,397,915 | (2,757,558) | |||||
Cumulative effect adjustment upon adoption of ASU 2016-13 (ASU 2016-13) at Dec. 31, 2019 | (364) | (364) | ||||||
Balance at beginning of the period, as adjusted at Dec. 31, 2019 | 393,463 | $ 528 | $ 104 | $ (107,836) | 872,791 | (324,556) | 1,432 | (49,000) |
Changes in Equity | ||||||||
Net income (loss) | 30,126 | 25,130 | 4,996 | |||||
Equity-based compensation | 38,255 | $ 36 | 38,189 | 30 | ||||
Equity-based compensation (in shares) | 3,581,294 | |||||||
Other comprehensive income (loss) | (1,630) | (1,304) | (326) | |||||
Dividends declared and distributions | (88,689) | 12,125 | (79,391) | (21,423) | ||||
Treasury Stock Purchases | $ (31,636) | $ (31,636) | ||||||
Treasury stock purchases (in shares) | (869,779) | (869,779) | ||||||
Exercise of Stock options | $ 11,819 | $ 7 | 11,812 | |||||
Exercise of stock options (in shares) | 721,484 | |||||||
Equity-based payments to non-employees | 158 | 158 | ||||||
Other | 690 | (1,981) | 2,671 | |||||
Balance at end of the period at Mar. 31, 2020 | $ 352,556 | $ 571 | $ 104 | $ (139,472) | $ 933,094 | $ (378,817) | $ 128 | $ (63,052) |
Balance at end of the period (in shares) at Mar. 31, 2020 | 57,076,395 | 10,397,915 | (3,627,337) |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Class A Common Stock | ||
Dividends declared per share of Class A common stock | $ 1.26 | $ 1.75 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. ORGANIZATION AND BASIS OF PRESENTATION Moelis & Company and its consolidated subsidiaries (the “Company,” “we,” “our,” or “us”) is a leading global investment bank, incorporated in Delaware. Prior to the Company’s IPO, the business operated as a Delaware limited partnership that commenced operations during 2007. Following the IPO, the operations are owned by Moelis & Company Group LP (“Group LP”), a U.S. Delaware limited partnership, and Group LP is controlled by Moelis & Company. Moelis & Company’s shareholders are entitled to receive a portion of Group LP’s economics through their direct ownership interests in shares of Class A common stock of Moelis & Company. The noncontrolling interest owners of Group LP (not Moelis & Company) receive economics of the operations primarily through their ownership interests in Group LP partnership units. The Company’s activities as an investment banking advisory firm constitute a single business segment offering clients, including corporations, governments and financial sponsors, a range of advisory services with expertise across all major industries in mergers and acquisitions, recapitalizations and restructurings and other corporate finance matters. Basis of Presentation —The condensed consolidated financial statements of Moelis & Company include its partnership interests in Group LP, its equity interest in the sole general partner of Group LP, Moelis & Company Group GP LLC (“Group GP”), and its interests in its subsidiaries. Moelis & Company will operate and control all of the business and affairs of Group LP and its operating entity subsidiaries indirectly through its equity interest in Group GP. The Company operates through the following subsidiaries: • Moelis & Company LLC (“Moelis U.S.”), a Delaware limited liability company, a registered broker-dealer with the U.S. Securities and Exchange Commission (“SEC”) and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). • Moelis & Company International Holdings LLC (“Moelis International”), a Delaware limited liability company, owns the following entities and investments, directly or indirectly: • Moelis & Company UK LLP (“Moelis UK”), a limited liability partnership registered under the laws of England and Wales. In addition to the United Kingdom, Moelis UK maintains operations through the following branches: • Moelis & Company UK LLP, French Branch (French branch) • Moelis & Company Europe Limited, Frankfurt am Main Branch (German branch) • Moelis & Company UK LLP, DIFC Branch (Dubai branch) • Moelis & Company Asia Limited (“Moelis Asia”), a limited company incorporated in Hong Kong licensed under the Hong Kong Securities and Futures Ordinance to provide financial advisory services. In addition to Hong Kong, Moelis Asia maintains operations in Beijing China through a wholly-owned Chinese subsidiary, Moelis & Company Consulting (Beijing) Company Limited. • Moelis & Company Netherlands BV, a private limited company incorporated in Amsterdam, Netherlands. • Moelis & Company India Private Limited, a private limited company incorporated in Mumbai, India. • Moelis & Company Assessoria Financeira Ltda. (“Moelis Brazil”), a limited liability company incorporated in São Paulo, Brazil. • An equity method investment in Moelis Australia Limited (“Moelis Australia”), a public company listed on the Australian Securities Exchange |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting —The Company prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). As permitted by the interim reporting rules and regulations set forth by the SEC, the condensed consolidated financial statements presented exclude certain financial information and footnote disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to fairly present the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. Consolidation —The Company’s policy is to consolidate (i) entities in which it has a controlling financial interest, (ii) variable interest entities where the Company has a variable interest and is deemed to be the primary beneficiary and (iii) limited partnerships where the Company has ownership of the majority of voting interests. When the Company does not have a controlling interest in an entity, but exerts significant influence over the entity’s operating and financial decisions, the Company applies the equity method of accounting in which it records in earnings its share of income or losses of the entity. All intercompany balances and transactions with the Company’s subsidiaries have been eliminated in consolidation. Use of Estimates —The preparation of condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period in which they are determined to be necessary. In preparing the condensed consolidated financial statements, management makes estimates and assumptions regarding: • the adequacy of the allowance for credit losses; • the assessment of whether revenues from variable consideration should be constrained due to the probability of a significant revenue reversal; • the assessment of probable lease terms and the measurement of the present value of such obligations; • the measurement and realization of deferred taxes; • the measurement of amount due pursuant to tax receivable agreement; and • other matters that affect the reported amounts and disclosures of contingencies in the financial statements. Cash, Cash Equivalents and Restricted Cash —Cash and cash equivalents include all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase. The Company’s cash is maintained in U.S. and non-U.S. bank accounts, of which most bank account balances had little or no insurance coverage (most balances are held in U.S. and U.K. accounts which exceeded the U.S. Federal Deposit Insurance Corporation and U.K. Financial Services Compensation Scheme coverage limits). The Company’s cash equivalents are invested primarily in U.S. Treasury instruments and government securities money markets. The Company’s restricted cash is comprised of collateral deposits primarily held by certain non-U.S. subsidiaries. These deposits are required for certain direct debit accounts and are also used to satisfy future medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of March 31, 2020 and 2019, is presented below. March 31, 2020 2019 Cash $ 38,975 $ 32,703 Cash equivalents 85,183 36,429 Restricted cash 597 349 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 124,755 $ 69,481 Additionally, as of December 31, 2019, the Company held cash of $71,798 and cash equivalents of $96,014. 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 and December 31, 2019 were $21,341 and $19,879 of long term receivables related to private funds advisory capital raising engagements, which are generally paid in installments over a period of three to four years. These long term receivables generated interest income of $188 and $275 for the three months ended March 31, 2020 and 2019, 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 co nsiderations of historical charge -offs and current economic co nditions. 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 credit loss allowance activity for the three months ended March 31, 2020: Three Months Ended March 31, 2020 Accounts Receivable Short-term Receivables Private Funds Advisory Receivables Total Allowance for Credit Losses, beginning balance $ 4,088 $ - $ 4,088 Adjustment for adoption of ASU 2016-13 260 199 459 Allowance for Credit Losses, adjusted beginning balance 4,348 199 4,547 Charge-offs (1,289 ) - (1,289 ) Recoveries (724 ) (26 ) (750 ) Reduction to allowance (2,013 ) (26 ) (2,039 ) Provision for credit losses 1,216 52 1,268 Allowance for credit losses, ending balance $ 3,551 $ 225 $ 3,776 Deferred Compensation —Deferred compensation costs represent arrangements with certain employees whereby cash payments are subject to a required period of service subsequent to payment by the Company. These amounts are charged to expenses over the period that the employee is required to provide services in order to vest in the payment. Financial Instruments at Fair Value —Fair value is generally based on quoted prices, however if quoted market prices are not available, fair value is determined based on other relevant factors, including dealer price quotations, price activity for equivalent instruments and valuation pricing models. The Company established a fair value hierarchy which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of instrument, the characteristics specific to the instrument and the state of the marketplace (including the existence and transparency of transactions between market participants). Financial instruments with readily-available actively quoted prices or for which fair value can be measured from actively-quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories (from highest to lowest) based on inputs: Level 1 —Quoted prices (unadjusted) are available in active markets for identical instruments that the Company has the ability to access as of the reporting date. The Company, to the extent that it holds such instruments, does not adjust the quoted price for these instruments, even in situations in which the Company holds a large position and a sale could reasonably affect the quoted price. Level 2 —Pricing inputs are observable for the instruments, either directly or indirectly, as of the reporting date, but are not the same as those used in Level 1. Fair value is determined through the use of models or other valuation methodologies. Level 3 —Pricing inputs are unobservable for the instruments and include situations where there is little, if any, market activity for the investments. The inputs into the determination of fair value require significant judgment or estimation by the Company’s management. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the instrument. For level 3 investments in which pricing inputs are unobservable and limited market activity exists, management’s determination of fair value is based on the best information available, may incorporate management’s own assumptions and involves a significant degree of judgment. 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. Adoption of ASU 2016-02 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, the Company capitalized approximately $202 in implementation costs related to its cloud computing arrangements Equipment and Leasehold Improvements —Office equipment and furniture and fixtures are stated at cost less accumulated depreciation, which is determined using the straight-line method over the estimated useful lives of the assets, ranging from three to seven years, respectively. Leasehold improvements are stated at cost less accumulated amortization, which is determined using the straight-line method over the lesser of the term of the lease or the estimated useful life of the asset. Major renewals and improvements are capitalized and minor replacements, maintenance and repairs are charged to expenses as incurred. Upon retirement or disposal of assets, the cost and related accumulated depreciation or amortization are removed from the condensed consolidated statements of financial condition and any gain or loss is reflected in the condensed consolidated statements of operations. Deferred Tax Asset and Amount Due Pursuant to Tax Receivable Agreement —In conjunction with the IPO, the Company was treated for U.S. federal income tax purposes as having directly purchased Class A partnership units in Group LP from the existing unitholders. Additional Group LP Class A partnership units may be exchanged for shares of Class A common stock in the Company. The initial purchase and future exchanges are expected to result in an increase in the tax basis of Group LP’s assets attributable to the Company’s interest in Group LP. These increases in the tax basis of Group LP’s assets attributable to the Company’s interest in Group LP would not have been available but for the initial purchase and future exchanges. Such increases in tax basis are likely to increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of income tax the Company would otherwise be required to pay in the future. As a result, the Company records a deferred tax asset for such increase in tax basis. The Company has entered into a tax receivable agreement with its eligible Managing Directors that will provide for the payment by the Company to its eligible Managing Directors of 85% of the amount of cash savings, if any, in U.S. federal, state, and local income tax or franchise tax that the Company actually realizes as a result of (a) the increases in tax basis attributable to exchanges by its eligible Managing Directors and (b) tax benefits related to imputed interest deemed to be paid by the Company as a result of this tax receivable agreement. The Company expects to benefit from the remaining 15% of cash savings, if any, in income tax that it realizes and record any such estimated tax benefits as an increase to additional paid-in-capital. For purposes of the tax receivable agreement, cash savings in income tax will be computed by comparing the Company’s actual income tax liability to the amount of such taxes that it would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Group LP as a result of the exchanges and had it not entered into the tax receivable agreement. The term of the tax receivable agreement commenced upon consummation of the IPO and will continue until all such tax benefits have been utilized or expired, unless the Company exercises its right to terminate the tax receivable agreement for an amount based on an agreed value of payments remaining to be made under the agreement. The Company has recorded the estimated tax benefits related to the increase in tax basis and imputed interest as a result of the initial purchase and subsequent exchanges described above as a deferred tax asset in the condensed consolidated statements of financial condition. The amount due to its eligible Managing Directors related to the tax receivable agreement as a result of the initial purchase and subsequent exchanges described above is recorded as amount due pursuant to tax receivable agreement in the condensed consolidated statements of financial condition. The amounts recorded for the deferred tax asset and the liability for our obligations under the tax receivable agreement are estimates. Any adjustments to our estimates subsequent to their initial establishment will be included in net income (loss). Future exchanges of Class A partnership units in Group LP for Class A common shares in the Company will be accounted for in a similar manner. Revenue and Expense Recognition —We earn substantially all of our revenues from advisory engagements and, in many cases, we are not paid until the completion of an underlying transaction. The Company recognizes revenues from providing advisory services when or as our obligations are fulfilled and collection is reasonably assured. The vast majority of our advisory revenues, which include reimbursements for certain out-of-pocket expenses, are recognized over time; however, a small number of transactions may be recognized at a point in time. We provide our advisory service on an ongoing basis which, for example, may include evaluating and selecting one of multiple strategies. During such engagements, our clients are continuously benefitting from our counsel and the over time recognition matches the transfer of such benefits. However, the recognition of transaction fees is constrained until substantially all services have been provided, specified conditions have been met and it is probable that a significant reversal of revenue 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 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 ” (“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 and 2019, 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 and 2019, 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. 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. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | 3. RECENT ACCOUNTING PRONOUNCEMENTS In March 2020, the FASB issued Accounting Standards Update No. 2020-04, “Reference Rate Reform” (“ASU 2020-04”). ASU 2020-04 provides optional guidance for entities that are impacted by interest rate reform. Specifically, ASU 2020-04 allows for contracts under the scope of Topic 310—Receivables to be accounted for prospectively with the updated interest rate, among other specifications for debt, derivative instruments, and other contracts. ASU 2020-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early application is permitted. Upon initial evaluation, we do not anticipate any material changes to our condensed consolidated financial statements. |
Fixed and Intangible Assets
Fixed and Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Fixed and Intangible Assets | 4. FIXED AND INTANGIBLE ASSETS Equipment and leasehold improvements, net consists of the following: March 31, December 31, 2020 2019 Office equipment $ 11,860 $ 13,593 Furniture and fixtures 5,017 5,054 Leasehold improvements 15,199 15,294 Construction in progress 15,258 2,108 Total 47,334 36,049 Less accumulated depreciation and amortization (21,400 ) (22,057 ) Equipment and leasehold improvements, net $ 25,934 $ 13,992 Depreciation and amortization expenses for fixed assets totaled $1,199 and $1,155 for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, there were $202 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 and are not yet subject to amortization. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2020 | |
Investments All Other Investments [Abstract] | |
Investments | 5. INVESTMENTS Fair value investments are contained within the balance of investments on the Company’s condensed consolidated statements of financial condition. The Company established a fair value hierarchy which prioritizes and ranks the level of market price observability used in measuring investments at fair value. Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories (from highest to lowest) based on inputs: Level 1—Quoted prices (unadjusted) are available in active markets for identical instruments that the Company has the ability to access as of the reporting date. The Company, to the extent that it holds such instruments, does not adjust the quoted price for these instruments, even in situations in which the Company holds a large position and a sale could reasonably affect the quoted price. Level 2—Pricing inputs are observable for the instruments, either directly or indirectly, as of the reporting date, but are not the same as those used in level 1. Fair value is determined through the use of models or other valuation methodologies. Level 3—Pricing inputs are unobservable for the instruments and include situations in which there is little, if any, market activity for the investments. The inputs into the determination of fair value require significant judgment or estimation by the Company’s management. The estimated fair values of government securities money markets, U.S. Treasury instruments, and government debt securities as of Marc h 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: Total Level 1 Level 2 Level 3 Financial assets: Included in cash and cash equivalents U.S. treasury instruments $ 62,564 $ — $ 62,564 $ — Government securities money market 22,619 — 22,619 — Investments U.S. treasury instruments 21,227 — 21,227 — Common stock 302 302 — — Total financial assets $ 106,712 $ 302 $ 106,410 $ — For the three months ended March 31, 2020, unrealized losses of $25 were recognized in other income and expenses on the condensed consolidated statement of operations related to common stock held at the reporting date. The cost basis of the financial assets recorded at fair value included in investments on the condensed consolidated statement of financial condition was $21,745 as of March 31, 2020. The following table summarizes the levels of the fair value hierarchy into which the Company’s financial assets fall as of December 31, 2019: Total Level 1 Level 2 Level 3 Financial assets: Included in cash and cash equivalents U.S. treasury instruments $ 62,949 $ — $ 62,949 $ — Government securities money market 33,065 — 33,065 — Investments U.S. treasury instruments 173,960 — 173,960 — Common stock 327 327 — — Total financial assets $ 270,301 $ 327 $ 269,974 $ — For the three months ended March 31, 2019, unrealized gains of $41 were recognized in other income and expenses on the condensed consolidated statement of operations related to common stock held at the reporting date. The cost basis of the financial assets recorded at fair value included in investments on the condensed consolidated statement of financial condition was $173,806 as of December 31, 2019. Equity-method investments are contained within the balance of investments on the Company’s condensed consolidated statements of financial condition. On April 1, 2010, the Company entered into a 50-50 joint venture in Moelis Australia Holdings PTY Limited, investing a combination of cash and certain net assets in exchange for its interests. On April 10, 2017, Moelis Australia Holdings PTY Limited consummated their initial public offering and became listed on the Australian Securities Exchange as Moelis Australia Limited (ASX: MOE). As a result of the offering, the Company’s ownership interest in Moelis Australia was diluted and continues to be accounted for under the equity method of accounting. Please see Note 4 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for additional information. On February 19, 2020 and February 20, 2019, Moelis Australia declared dividends, of which the Company received $1,942 and $2,848 on March 4, 2020 and March 6, 2019, respectively. The Company accounted for the dividends as a return on investment and reduced the carrying value of the investment in Moelis Australia by $1,942 and $2,848, respectively. On September 2, 2019 and November 4, 2019, the Company sold 12.5 million and 8.0 million shares of Moelis Australia common stock, respectively. These transactions resulted in gains of $ 12,631 and $ 8,083 , respectively, recorded in other income and expenses on the condensed consolidated statements of operations. As a result, the Company’s ownership interest in Moelis Australia was reduced. The balances of the Company’s equity method investment as of March 31, 2020 and December 31, 2019 were $37,352 and $38,944, respectively, and are included within investments on the condensed consolidated statements of financial condition. The Company’s share of earnings on this investment is recorded in other income and expenses on the condensed consolidated statements of operations. |
Net Income (Loss) Per Share Att
Net Income (Loss) Per Share Attributable to Class A Common Shareholders | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share Attributable to Class A Common Shareholders | 6. NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS The calculations of basic and diluted net income (loss) per share attributable to holders of shares of Class A common stock for the three months ended March 31, 2020 and 2019 are presented below. Three Months Ended March 31, (dollars in thousands, except per share amounts) 2020 2019 Numerator: Net income (loss) attributable to holders of shares of Class A common stock—basic $ 25,130 $ 13,570 Add (deduct) dilutive effect of: Noncontrolling interests related to Class A partnership units (a) (a) Net income (loss) attributable to holders of shares of Class A common stock—diluted $ 25,130 $ 13,570 Denominator: Weighted average shares of Class A common stock outstanding—basic 52,666,457 48,309,358 Add (deduct) dilutive effect of: Noncontrolling interests related to Class A partnership units (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 shares of Class A common stock outstanding—diluted 57,092,982 55,108,335 Net income (loss) per share attributable to holders of shares of Class A common stock Basic $ 0.48 $ 0.28 Diluted $ 0.44 $ 0.25 We have not included the impact of Class B common stock because these shares are entitled to an insignificant amount of economic participation. (a) Class A partnership units may be exchanged for Moelis & Company Class A common stock on a one-for-one basis, subject to applicable lock-up, vesting and transfer restrictions. If all Class A partnership units were to be exchanged for Class A common stock, fully diluted Class A common stock outstanding would be 70,051,004 and 68,161,800 for the three months ended March 31, 2020 and 2019, respectively. (b) During the three months ended March 31, 2020 and 2019, certain shares of Moelis & Company’s Class A common stock assumed to be issued pursuant to certain RSUs as calculated using the treasury stock method were antidilutive and therefore have been excluded from the calculation of diluted net income (loss) per share attributable to Moelis & Company. During the three months ended March 31, 2020 and 2019, the additional weighted average amount of RSUs that would have been included in this calculation if the effect were dilutive would have been 1,613,603 and 1,340,404 units, respectively. |
Equity-Based Compensation
Equity-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity-Based Compensation | 7. EQUITY-BASED COMPENSATION Partnership Units Prior to the Company’s restructuring and IPO, the business operated as a partnership and its ownership structure was comprised of common partners (principally outside investors) holding units. The common partners contributed capital to the partnership and were not subject to vesting. Units granted to Managing Directors upon joining the Company and as part of annual incentive compensation generally vested based on service over five to eight years. Certain non-Managing Director employees were granted units as part of their incentive arrangements and these units generally vested based on service ratably over four years. In connection with the Company’s restructuring and IPO, substantially all of the Managing Director partner equity subject to vesting was accelerated. Units granted to non-Managing Director employees were not accelerated in connection with the Company’s restructuring and IPO and continue to vest based on the original terms of the grant. In connection with the reorganization and IPO, Group LP issued Class A partnership units to Moelis & Company and to certain existing unit holders. Following the reorganization, a Class A partnership unit (not held by Moelis & Company or its subsidiaries) is exchangeable into one share of Moelis & Company Class A common stock and represents the Company’s noncontrolling interests. As of 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 Company recognized compensation expenses of $30 and $109 for the three months ended March 31, 2020 and 2019, respectively. 2014 Omnibus Incentive Plan In connection with the IPO, the Company adopted the Moelis & Company 2014 Omnibus Incentive Plan (the “Plan”) to provide additional incentives to selected officers, employees, Managing Directors, non-employee directors, independent contractors, partners, senior advisors and consultants. The Plan provides for the issuance of incentive stock options (“ISOs”), nonqualified stock options, stock appreciation rights (“SARs”), restricted stock, RSUs, stock bonuses, other stock-based awards and cash awards. Share Repurchase Plan 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) Pursuant to the Plan and in connection with the Company’s annual compensation process and ongoing hiring process, the Company issues RSUs which generally vest over a service life of four to five years. For the three months ended March 31, 2020 and 2019, the Company recognized expense of $38,225 and $38,282, respectively, in relation to these RSUs. The following table summarizes activity related to restricted stock and RSUs for the three months ended March 31, 2020 and 2019. Restricted Stock & RSUs 2020 2019 Weighted Weighted Average Average Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair Value Unvested Balance at January 1, 8,414,130 $ 42.19 8,761,224 $ 37.59 Granted 3,585,725 37.93 3,495,863 46.08 Forfeited (48,512 ) 37.00 (14,415 ) 46.84 Vested (2,894,992 ) 38.67 (2,787,084 ) 36.62 Unvested Balance at March 31, 9,056,351 $ 41.53 9,455,588 $ 41.04 As of March 31, 2020, the total compensation expense related to unvested restricted stock and RSUs not yet recognized was $204,253. The weighted-average period over which this compensation expense is expected to be recognized at March 31, 2020 is 2.0 years. Stock Options Pursuant to the Plan, the Company issued 3,501,881 stock options in 2014 which vest over a five-year Assumptions Expected life (in years) 6 Weighted-average risk free interest rate 1.91 % Expected volatility 35 % Dividend yield 2.72 % Weighted-average fair value at grant date $ 6.70 The Company paid special dividends of $9.05, in aggregate, through March 31, 2020. As required under Section 5 of the Company’s 2014 Omnibus Incentive Plan, the Compensation Committee of the Company’s Board of Directors equitably reduced the exercise price of the Company’s outstanding options to purchase common stock by $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. Stock Options Outstanding 2020 2019 Weighted Weighted Average Average Number Exercise Price Number Exercise Price Outstanding Per Share Outstanding Per Share Outstanding at January 1, 728,534 $ 15.95 2,017,067 $ 15.95 Exercises (722,034 ) 15.95 (29,439 ) 15.95 Forfeitures or expirations — 15.95 (2,000 ) 15.95 Outstanding at March 31, 6,500 $ 15.95 1,985,628 $ 15.95 For the three months ended March 31, 2020 and 2019, the Company recognized expenses of $0 and $495, respectively, related to stock options. As of April 2020, no stock options remain outstanding. |
Stockholders Equity
Stockholders Equity | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders Equity Note [Abstract] | |
Stockholders Equity | 8. STOCKHOLDERS EQUITY Class A Common Stock In April 2014, the Company issued 15,263,653 shares of Class A common stock in connection with the IPO and reorganization. Since its IPO, the Company has conducted several offerings of Class A common stock in order to facilitate organized liquidity and increase the public float of its Class A common stock. The details of these offerings are displayed below. The Company did not retain any proceeds from the sale of its Class A common stock. 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 As of March 31, 2020, there were 57,076,395 shares of Class A common stock issued, 3,627,337 shares of treasury stock, and 53,449,058 shares outstanding, and as of December 31, 2019, there were 52,773,617 shares of Class A common stock issued, 2,757,558 shares of treasury stock, and 50,016,059 shares outstanding. The changes in Class A common stock are due primarily to the IPO and offering transactions described above, in addition to the exercise of stock options and vesting of restricted stock units in connection with the Company’s annual compensation process and ongoing hiring process. Class B Common Stock In conjunction with Moelis & Company’s IPO of its Class A common stock, the Company issued 36,158,698 shares of Class B common stock. Moelis & Company Partner Holdings LP (“Partner Holdings”) holds all shares of Class B common stock, enabling it initially to exercise majority voting control over the Company. 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. 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 As of March 31, 2020, and December 31, 2019, 10,397,915 shares of Class B common stock were issued and outstanding, due primarily to the IPO, offering transactions, and Class B conversions described above. Treasury Stock During the three months ended March 31, 2020 and 2019, the Company repurchased 869,779 and 616,796 shares, respectively, pursuant to the Company’s share repurchase program and shares repurchased from its employees for the purpose of settling tax liabilities incurred upon the delivery of equity-based compensation awards. The result of the repurchases was an increase of $31,636 and $26,970, respectively, in the treasury stock balance on the Company’s condensed consolidated statements of changes in equity as of March 31, 2020 and 2019. Noncontrolling Interests A Group LP Class A partnership unit (not held by Moelis & Company or its subsidiaries) is exchangeable into one share of Moelis & Company Class A common stock and represents the Company’s noncontrolling interests (non-redeemable). As of March 31, 2020 and December 31, 2019, partners held 12,958,022 and 12,958,022 Controlling Interests Moelis & Company operates and controls all of the business and affairs of Group LP and its operating entity subsidiaries indirectly through its equity interest in Group GP, and thus the 53,449,058 shares of Class A common stock outstanding at March 31, 2020 (50,016,059 as of December 31, 2019), represents the controlling interest. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 9. RELATED-PARTY TRANSACTIONS Aircraft Lease— On August 30, 2014, a related party, Moelis & Company Manager LLC ("Manager"), acquired an aircraft with funds received solely from its managing member (Mr. Moelis). The aircraft was used and operated by the Company pursuant to a dry lease with Manager. The terms of the dry lease were comparable to the market rates of leasing from an independent third party. Pursuant to this dry lease arrangement, the lessee is obligated to bear its share of the costs of operating the aircraft. In addition, Mr. Moelis was the other lessee of the aircraft and shared the operating and related costs of the plane in proportion to his respective use pursuant to a cost sharing and operating agreement. On July 12, 2019, the Company terminated its aircraft dry lease with Manager, the lessor, and Mr. Moelis, the other lessee (the “Old Lease”) and the related cost sharing agreement with Mr. Moelis, which were set to expire by their terms on December 31, 2019, and entered into a new dry lease with Manager, the lessor, and Mr. Moelis, the other lessee (the “New Lease”) and cost sharing agreement with Mr. Moelis, which terminate on December 31, 2022. The terms of the New Lease and new cost sharing agreement are substantially similar to the Old Lease and related cost sharing agreement. For the three months ended March 31, 2020 and 2019, the Company incurred $324 and $468 in aircraft lease costs to be paid to Manager, respectively. Promissory Notes —As of March 31, 2020, there were $189 of unsecured promissory notes from employees held by the Company (December 31, 2019: $189). Any outstanding balances are reflected in accrued and other receivables on the condensed consolidated statements of financial condition. The notes held as of March 31, 2020 and December 31, 2019 bear a fixed interest rate of 4.00%. During each of the three months ended March 31, 2020 and 2019, the Company received $0 $2 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 and $62 for the three months ended March 31, 2020 and 2019, 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 and December 31, 2019, the Company had no balances due from Moelis Asset Management LP. Moelis Australia —As of March 31, 2020 and December 31, 2019, the Company had no balance due from 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 the three months ended March 31, 2020 and 2019, respectively. |
Regulatory Requirements
Regulatory Requirements | 3 Months Ended |
Mar. 31, 2020 | |
Regulatory Capital Requirements [Abstract] | |
Regulatory Requirements | 10. REGULATORY REQUIREMENTS Under the SEC Uniform Net Capital Rule (SEC Rule 15c3-1) Alternative Standard under Section (a)(1)(ii), the minimum net capital requirement is $250. At March 31, 2020, Moelis U.S. had net capital of $81,893, which was $81,643 in excess of its required net capital. At December 31, 2019, Moelis U.S. had net capital of $160,401 which was $160,151 in excess of its required net capital. Moelis U.S. does not carry customer accounts and does not otherwise hold funds or securities for, or owe money or securities to, customers and accordingly is exempt under Section (k)(2)(ii) of SEC Rule 15c3-3. At 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. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. COMMITMENTS AND CONTINGENCIES Bank Line of Credit — In April 2020, the Company renewed its $65,000 revolving credit facility which extended the maturity date to June 30, 2021. Unless the lender issues a notice of termination at least 60 days prior to such maturity date, this facility will automatically extend to June 30, 2022. Borrowings on the facility bear interest at the greater of a fixed rate of 3.50% per annum or at the borrower’s option of (i) LIBOR plus 1% or (ii) Prime minus 1.50%. As of March 31, 2020 and December 31, 2019, the Company had no borrowings under the credit facility. As of March 31, 2020, the Company’s available credit under this facility was $60,069 as a result of the issuance of an aggregate amount of $4,931 of various standby letters of credit, which were required in connection with certain office lease and other agreements. The Company incurs a 1% per annum fee on the outstanding balance of issued letters of credit. Leases —The Company maintains operating leases for corporate offices and an aircraft with various expiration dates, some of which extend through 2036. Some leases include options to terminate or to extend the lease terms. The Company records lease liabilities measured at the present value of anticipated lease payments over the lease term, including options to extend or terminate the lease when it is reasonably certain such options will be exercised. The implicit discount rates used to determine the present value of the Company’s leases are not readily determinable, thus the Company uses its secured borrowing rate, which was determined with reference to our available credit line. See below for additional information about the Company’s leases. Three Months Ended Three Months Ended March 31, March 31, ($ in thousands) 2020 2019 Supplemental Income Statement Information: Operating lease cost $ 6,365 $ 4,133 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 Right-of-use assets obtained in exchange for lease obligations (e.g. new leases commenced during the period): $ 2,414 $ 1,172 Other Information Weighted-average remaining lease term - operating leases 13.82 years 5.18 years Weighted-average discount rate - operating leases 3.53 % 4.00 % The future sublease income and maturities of our operating lease liabilities as of March 31, 2020, are as follows: Fiscal year ended Sublease Income Operating Leases Remainder of 2020 $ (619 ) $ 12,525 2021 (825 ) 18,955 2022 (825 ) 23,309 2023 (825 ) 20,315 2024 (825 ) 18,695 Thereafter (412 ) 191,443 Total Payments $ (4,331 ) $ 285,242 Less: Tenant improvement allowances (24,128 ) Less: Present value adjustment (66,507 ) Total $ 194,607 Contractual Arrangements —In the normal course of business, the Company enters into contracts that contain a variety of representations and warranties and which provide indemnification for specified losses, including certain indemnification of certain officers, directors and employees. Legal —In the ordinary course of business, from time to time the Company and its affiliates are involved in judicial or regulatory proceedings, arbitration or mediation concerning matters arising in connection with the conduct of its businesses, including contractual and employment matters. In addition, government agencies and self-regulatory organizations conduct periodic examinations and initiate administrative proceedings regarding the Company’s business, including, among other matters, compliance, accounting and operational matters, that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer, investment advisor, or its directors, officers or employees. In view of the inherent difficulty of determining whether any loss in connection with such matters is probable and whether the amount of such loss can be reasonably estimated, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, the Company cannot estimate the amount of such loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, fine, penalty or other relief, if any, might be. Subject to the foregoing, the Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | 12. EMPLOYEE BENEFIT PLANS The Company covers substantially all U.S. salaried employees with a defined contribution 401(k) plan. Each salaried employee of the Company who has attained the age of 21 is eligible to participate in the 401(k) plan on their first day of employment. Any employer contributions to the 401(k) plan are entirely at the discretion of the Company. The Company accrued expenses relating to employer matching contributions to the 401(k) plan for the three months ended March 31, 2020 and 2019, in the amounts of $696 and $683, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. INCOME TAXES The Company’s operations are comprised of entities that are organized as limited liability companies and limited partnerships. For U.S. federal income tax purposes, taxes related to income earned by these entities represent obligations of their interest holders, except for the New York City unincorporated business tax (“UBT”) and certain other foreign, state, and local taxes. 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 rate were a benefit of $7,344 and (32%) and a benefit of $4,458 and (38%), for the three months ended March 31, 2020 and 2019, respectively. The Company’s provision for income taxes includes a tax benefit recognized in connection with the delivery of equity-based compensation of $7,337, and a benefit of $5,740 in connection with certain tax relief provisions provided under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) enacted in the United States on March 27, 2020. The tax benefit from the CARES Act is primarily attributable to the Company’s ability to carry back net operating losses to offset taxable income generated in the five preceding years, some of which were taxed at a federal income tax rate higher than the current enacted rate. As some of the calculated tax benefits relate to deductions subject to the Company’s Tax Receivable Agreement, the Company’s liability pursuant to the Tax Receivable Agreement was also re-measured and the estimated impact was recorded within other income and expenses on the condensed consolidated statement of operations. |
Revenues and Business Informati
Revenues and Business Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Revenues and Business Information | 14. REVENUES AND BUSINESS INFORMATION The Company’s activities as an investment banking advisory firm constitute a single business segment offering clients, including corporations, governments, sovereign wealth funds, and financial sponsors, a range of advisory services with expertise across all major industries in mergers and acquisitions, recapitalizations and restructurings, capital markets and other corporate finance matters. Since the financial markets are global in nature, the Company generally manages its business based on the operating results of the enterprise taken as whole, not by geographic region. The following table disaggregates the revenues and assets based on the location of the office that generates the revenues or holds the assets, and therefore may not be reflective of the geography in which our clients are located. Three Months Ended March 31, 2020 2019 Revenues: United States $ 129,185 $ 122,680 Europe 16,256 6,716 Rest of World 8,265 8,387 Total $ 153,706 $ 137,783 March 31, December 31, 2020 2019 Assets: United States $ 783,002 $ 934,654 Europe 43,351 67,247 Rest of World 63,333 69,798 Total $ 889,686 $ 1,071,699 As of March 31, 2020, and December 31, 2019, the Company had deferred revenues of $4,450 and $3,023, respectively. These amounts primarily consist of upfront fees and retainers for our services. During the three months ended March 31, 2020, $1,167 of revenues were recognized from the opening balance of deferred revenues. Due to the factors that may delay or terminate a transaction (see Note 2), the Company does not estimate constrained transaction fees for revenue recognition. Quantitative disclosures of constrained variable consideration are not provided for remaining, wholly unsatisfied, performance obligations. These remaining performance obligations related to retainers, upfront fees and announcement fees are typically associated with contracts that have durations of one year or less. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. SUBSEQUENT EVENTS On April 20, 2020, the Board of Directors of Moelis & Company declared a dividend of $0.255 per share In April 2020, the Company extended its $65,000 revolving credit facility to June 30, 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting —The Company prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). As permitted by the interim reporting rules and regulations set forth by the SEC, the condensed consolidated financial statements presented exclude certain financial information and footnote disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to fairly present the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. |
Consolidation | Consolidation —The Company’s policy is to consolidate (i) entities in which it has a controlling financial interest, (ii) variable interest entities where the Company has a variable interest and is deemed to be the primary beneficiary and (iii) limited partnerships where the Company has ownership of the majority of voting interests. When the Company does not have a controlling interest in an entity, but exerts significant influence over the entity’s operating and financial decisions, the Company applies the equity method of accounting in which it records in earnings its share of income or losses of the entity. All intercompany balances and transactions with the Company’s subsidiaries have been eliminated in consolidation. |
Use of Estimates | Use of Estimates —The preparation of condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period in which they are determined to be necessary. In preparing the condensed consolidated financial statements, management makes estimates and assumptions regarding: • the adequacy of the allowance for credit losses; • the assessment of whether revenues from variable consideration should be constrained due to the probability of a significant revenue reversal; • the assessment of probable lease terms and the measurement of the present value of such obligations; • the measurement and realization of deferred taxes; • the measurement of amount due pursuant to tax receivable agreement; and • other matters that affect the reported amounts and disclosures of contingencies in the financial statements. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash —Cash and cash equivalents include all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase. The Company’s cash is maintained in U.S. and non-U.S. bank accounts, of which most bank account balances had little or no insurance coverage (most balances are held in U.S. and U.K. accounts which exceeded the U.S. Federal Deposit Insurance Corporation and U.K. Financial Services Compensation Scheme coverage limits). The Company’s cash equivalents are invested primarily in U.S. Treasury instruments and government securities money markets. The Company’s restricted cash is comprised of collateral deposits primarily held by certain non-U.S. subsidiaries. These deposits are required for certain direct debit accounts and are also used to satisfy future medical claims. A reconciliation of the Company’s cash, cash equivalents and restricted cash as of March 31, 2020 and 2019, is presented below. March 31, 2020 2019 Cash $ 38,975 $ 32,703 Cash equivalents 85,183 36,429 Restricted cash 597 349 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 124,755 $ 69,481 Additionally, as of December 31, 2019, the Company held cash of $71,798 and cash equivalents of $96,014. |
Receivables | Receivables —The accompanying condensed consolidated statements of financial condition present accounts receivable balances net of allowance for credit losses based on the Company’s assessment of the collectability of customer accounts. Included in the accounts receivable balances at March 31, 2020 and December 31, 2019 were $21,341 and $19,879 of long term receivables related to private funds advisory capital raising engagements, which are generally paid in installments over a period of three to four years. These long term receivables generated interest income of $188 and $275 for the three months ended March 31, 2020 and 2019, 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 co nsiderations of historical charge -offs and current economic co nditions. 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 credit loss allowance activity for the three months ended March 31, 2020: Three Months Ended March 31, 2020 Accounts Receivable Short-term Receivables Private Funds Advisory Receivables Total Allowance for Credit Losses, beginning balance $ 4,088 $ - $ 4,088 Adjustment for adoption of ASU 2016-13 260 199 459 Allowance for Credit Losses, adjusted beginning balance 4,348 199 4,547 Charge-offs (1,289 ) - (1,289 ) Recoveries (724 ) (26 ) (750 ) Reduction to allowance (2,013 ) (26 ) (2,039 ) Provision for credit losses 1,216 52 1,268 Allowance for credit losses, ending balance $ 3,551 $ 225 $ 3,776 |
Deferred Compensation | Deferred Compensation —Deferred compensation costs represent arrangements with certain employees whereby cash payments are subject to a required period of service subsequent to payment by the Company. These amounts are charged to expenses over the period that the employee is required to provide services in order to vest in the payment. |
Financial Instruments at Fair Value | Financial Instruments at Fair Value —Fair value is generally based on quoted prices, however if quoted market prices are not available, fair value is determined based on other relevant factors, including dealer price quotations, price activity for equivalent instruments and valuation pricing models. The Company established a fair value hierarchy which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of instrument, the characteristics specific to the instrument and the state of the marketplace (including the existence and transparency of transactions between market participants). Financial instruments with readily-available actively quoted prices or for which fair value can be measured from actively-quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories (from highest to lowest) based on inputs: Level 1 —Quoted prices (unadjusted) are available in active markets for identical instruments that the Company has the ability to access as of the reporting date. The Company, to the extent that it holds such instruments, does not adjust the quoted price for these instruments, even in situations in which the Company holds a large position and a sale could reasonably affect the quoted price. Level 2 —Pricing inputs are observable for the instruments, either directly or indirectly, as of the reporting date, but are not the same as those used in Level 1. Fair value is determined through the use of models or other valuation methodologies. Level 3 —Pricing inputs are unobservable for the instruments and include situations where there is little, if any, market activity for the investments. The inputs into the determination of fair value require significant judgment or estimation by the Company’s management. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the instrument. For level 3 investments in which pricing inputs are unobservable and limited market activity exists, management’s determination of fair value is based on the best information available, may incorporate management’s own assumptions and involves a significant degree of judgment. |
Equity Method Investments | Equity Method Investments —The Company accounts for its equity method investments under the equity method of accounting as the Company does not control these entities but has the ability to exercise significant influence. The amounts recorded in investments on the condensed consolidated statements of financial condition reflect the Company’s share of contributions made to, distributions received from, and the equity earnings and losses of, the investments. The Company reflects its share of gains and losses of the investment in other income and expenses in the condensed consolidated statements of operations using the most recently available earnings data at the end of the period. |
Leases | Leases — The Company maintains operating leases for corporate offices and an aircraft. The Company determines if a contract contains a lease at inception. Operating leases are recorded as right-of-use (“ROU”) assets and lease liabilities on the condensed consolidated statements of financial condition. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease liabilities are recognized at the lease commencement date and are measured at the present value of anticipated lease payments over the lease term. The operating lease ROU assets are equal to the lease liabilities, adjusted for certain lease incentives, accrued rents, and prepaid rents. Typically, our borrowing rate is used to determine the present value of lease payments because the implicit rate is not readily determinable. Our lease terms may include options to extend or terminate the lease. These options are factored into our present value calculations when it is reasonably certain that such options will be exercised. Operating lease expense is recognized on a straight-line basis over the lease term. Adoption of ASU 2016-02 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 | 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, the Company capitalized approximately $202 in implementation costs related to its cloud computing arrangements |
Equipment and Leasehold Improvements | Equipment and Leasehold Improvements —Office equipment and furniture and fixtures are stated at cost less accumulated depreciation, which is determined using the straight-line method over the estimated useful lives of the assets, ranging from three to seven years, respectively. Leasehold improvements are stated at cost less accumulated amortization, which is determined using the straight-line method over the lesser of the term of the lease or the estimated useful life of the asset. Major renewals and improvements are capitalized and minor replacements, maintenance and repairs are charged to expenses as incurred. Upon retirement or disposal of assets, the cost and related accumulated depreciation or amortization are removed from the condensed consolidated statements of financial condition and any gain or loss is reflected in the condensed consolidated statements of operations. |
Deferred Tax Asset and Amount Due Pursuant to Tax Receivable Agreement | Deferred Tax Asset and Amount Due Pursuant to Tax Receivable Agreement —In conjunction with the IPO, the Company was treated for U.S. federal income tax purposes as having directly purchased Class A partnership units in Group LP from the existing unitholders. Additional Group LP Class A partnership units may be exchanged for shares of Class A common stock in the Company. The initial purchase and future exchanges are expected to result in an increase in the tax basis of Group LP’s assets attributable to the Company’s interest in Group LP. These increases in the tax basis of Group LP’s assets attributable to the Company’s interest in Group LP would not have been available but for the initial purchase and future exchanges. Such increases in tax basis are likely to increase (for tax purposes) depreciation and amortization deductions and therefore reduce the amount of income tax the Company would otherwise be required to pay in the future. As a result, the Company records a deferred tax asset for such increase in tax basis. The Company has entered into a tax receivable agreement with its eligible Managing Directors that will provide for the payment by the Company to its eligible Managing Directors of 85% of the amount of cash savings, if any, in U.S. federal, state, and local income tax or franchise tax that the Company actually realizes as a result of (a) the increases in tax basis attributable to exchanges by its eligible Managing Directors and (b) tax benefits related to imputed interest deemed to be paid by the Company as a result of this tax receivable agreement. The Company expects to benefit from the remaining 15% of cash savings, if any, in income tax that it realizes and record any such estimated tax benefits as an increase to additional paid-in-capital. For purposes of the tax receivable agreement, cash savings in income tax will be computed by comparing the Company’s actual income tax liability to the amount of such taxes that it would have been required to pay had there been no increase to the tax basis of the tangible and intangible assets of Group LP as a result of the exchanges and had it not entered into the tax receivable agreement. The term of the tax receivable agreement commenced upon consummation of the IPO and will continue until all such tax benefits have been utilized or expired, unless the Company exercises its right to terminate the tax receivable agreement for an amount based on an agreed value of payments remaining to be made under the agreement. The Company has recorded the estimated tax benefits related to the increase in tax basis and imputed interest as a result of the initial purchase and subsequent exchanges described above as a deferred tax asset in the condensed consolidated statements of financial condition. The amount due to its eligible Managing Directors related to the tax receivable agreement as a result of the initial purchase and subsequent exchanges described above is recorded as amount due pursuant to tax receivable agreement in the condensed consolidated statements of financial condition. The amounts recorded for the deferred tax asset and the liability for our obligations under the tax receivable agreement are estimates. Any adjustments to our estimates subsequent to their initial establishment will be included in net income (loss). Future exchanges of Class A partnership units in Group LP for Class A common shares in the Company will be accounted for in a similar manner. |
Revenue and Expense Recognition | Revenue and Expense Recognition —We earn substantially all of our revenues from advisory engagements and, in many cases, we are not paid until the completion of an underlying transaction. The Company recognizes revenues from providing advisory services when or as our obligations are fulfilled and collection is reasonably assured. The vast majority of our advisory revenues, which include reimbursements for certain out-of-pocket expenses, are recognized over time; however, a small number of transactions may be recognized at a point in time. We provide our advisory service on an ongoing basis which, for example, may include evaluating and selecting one of multiple strategies. During such engagements, our clients are continuously benefitting from our counsel and the over time recognition matches the transfer of such benefits. However, the recognition of transaction fees is constrained until substantially all services have been provided, specified conditions have been met and it is probable that a significant reversal of revenue will not occur in a future period. Upfront fees and retainers specified in our engagement letters that meet the over time criteria will be recognized on a systematic basis over the estimated period where the related services are performed. Revenues may be recognized at a point in time if the engagement represents a singular objective that does not transfer any notable value until formally completed, such as when issuing a fairness opinion. In these instances, the point in time recognition appropriately matches the transfer and consumption of our services. Incremental costs of obtaining a contract are expensed as incurred since such costs are generally not recoverable and the typical duration of our advisory contracts is less than one year. Costs to fulfill contracts consist of out-of-pocket expenses that are part of performing our advisory services and are typically expensed as incurred, except where the transfer and consumption of our services occurs at a point in time. For engagements recognized at a point in time, out-of-pocket expenses are capitalized and subsequently expensed in the condensed consolidated statement of operations upon completion of the engagement. The Company records deferred revenues when it receives fees from clients that have not yet been earned (e.g. an upfront fee) or when the Company has an unconditional right to consideration before all performance obligations are complete (e.g. upon satisfying conditions to earn an announcement fee, but before the transaction is consummated). Complications that may terminate or delay a transaction include failure to agree upon final terms with the counterparty, failure to obtain required regulatory consents, failure to obtain board or stockholder approvals, failure to secure financing, adverse market conditions or unexpected operating or financial problems related to either party to the transaction. In these circumstances, we often do not receive advisory fees that would have been received if the transaction had been completed, despite the fact that we may have devoted considerable time and resources to the transaction. Barriers to the completion of a restructuring transaction may include a lack of anticipated bidders for the assets of our client, the inability of our client to restructure its operations, or indebtedness due to a failure to reach agreement with its creditors. In these circumstances, our fees are generally limited to monthly retainer fees and reimbursement of certain out - of - pocket expenses. We do not allocate our revenue by the type of advice we provide because of the complexity of the transactions on which we may earn revenue and our holistic approach to client service. For example, a restructuring engagement may evolve to require a sale of all or a portion of the client, M&A assignments can develop from relationships established on prior restructuring engagements, and capital markets expertise can be instrumental on both M&A and restructuring assignments. |
Equity-based Compensation | Equity-based Compensation — The Company recognizes the cost of services received in exchange for equity instrument awards. The cost is based on its grant-date fair value based on quoted market prices at the time of grant amortized over the service period required by the award’s vesting terms. The Company 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 | Income Taxes — The Company accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes ” (“ASC 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s condensed consolidated statements of financial condition as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. For the three months ended March 31, 2020 and 2019, 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 and 2019, 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. |
Foreign Currency Translation | Foreign Currency Translation — Assets and liabilities held in non-U.S. dollar denominated currencies are translated into U.S. dollars at exchange rates in effect at the end of the reporting period. Revenues and expenses are translated at average exchange rates during the reporting period. A charge or credit is recorded to other comprehensive income to reflect the translation of these amounts to the extent the non-U.S. currency is designated the functional currency of the subsidiary. Non-functional currency related transaction gains and losses are immediately recorded in the condensed consolidated statements of operations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Cash, Cash Equivalents and Restricted Cash | A reconciliation of the Company’s cash, cash equivalents and restricted cash as of March 31, 2020 and 2019, is presented below. March 31, 2020 2019 Cash $ 38,975 $ 32,703 Cash equivalents 85,183 36,429 Restricted cash 597 349 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 124,755 $ 69,481 |
Summary of Credit Loss Allowance Activity | The following table summarizes credit loss allowance activity for the three months ended March 31, 2020: Three Months Ended March 31, 2020 Accounts Receivable Short-term Receivables Private Funds Advisory Receivables Total Allowance for Credit Losses, beginning balance $ 4,088 $ - $ 4,088 Adjustment for adoption of ASU 2016-13 260 199 459 Allowance for Credit Losses, adjusted beginning balance 4,348 199 4,547 Charge-offs (1,289 ) - (1,289 ) Recoveries (724 ) (26 ) (750 ) Reduction to allowance (2,013 ) (26 ) (2,039 ) Provision for credit losses 1,216 52 1,268 Allowance for credit losses, ending balance $ 3,551 $ 225 $ 3,776 |
Fixed and Intangible Assets (Ta
Fixed and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Schedule of Equipment and Leasehold Improvements, Net | Equipment and leasehold improvements, net consists of the following: March 31, December 31, 2020 2019 Office equipment $ 11,860 $ 13,593 Furniture and fixtures 5,017 5,054 Leasehold improvements 15,199 15,294 Construction in progress 15,258 2,108 Total 47,334 36,049 Less accumulated depreciation and amortization (21,400 ) (22,057 ) Equipment and leasehold improvements, net $ 25,934 $ 13,992 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments All Other Investments [Abstract] | |
Summary of the Levels of the Fair Value Hierarchy into Which the Company's Financial Assets Fall | The following table summarizes the levels of the fair value hierarchy into which the Company’s financial assets fall as of March 31, 2020: The following table summarizes the levels of the fair value hierarchy into which the Company’s financial assets fall as of December 31, 2019: Total Level 1 Level 2 Level 3 Financial assets: Included in cash and cash equivalents U.S. treasury instruments $ 62,949 $ — $ 62,949 $ — Government securities money market 33,065 — 33,065 — Investments U.S. treasury instruments 173,960 — 173,960 — Common stock 327 327 — — Total financial assets $ 270,301 $ 327 $ 269,974 $ — |
Net Income (Loss) Per Share A_2
Net Income (Loss) Per Share Attributable to Class A Common Shareholders (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share | The calculations of basic and diluted net income (loss) per share attributable to holders of shares of Class A common stock for the three months ended March 31, 2020 and 2019 are presented below. Three Months Ended March 31, (dollars in thousands, except per share amounts) 2020 2019 Numerator: Net income (loss) attributable to holders of shares of Class A common stock—basic $ 25,130 $ 13,570 Add (deduct) dilutive effect of: Noncontrolling interests related to Class A partnership units (a) (a) Net income (loss) attributable to holders of shares of Class A common stock—diluted $ 25,130 $ 13,570 Denominator: Weighted average shares of Class A common stock outstanding—basic 52,666,457 48,309,358 Add (deduct) dilutive effect of: Noncontrolling interests related to Class A partnership units (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 shares of Class A common stock outstanding—diluted 57,092,982 55,108,335 Net income (loss) per share attributable to holders of shares of Class A common stock Basic $ 0.48 $ 0.28 Diluted $ 0.44 $ 0.25 We have not included the impact of Class B common stock because these shares are entitled to an insignificant amount of economic participation. (a) Class A partnership units may be exchanged for Moelis & Company Class A common stock on a one-for-one basis, subject to applicable lock-up, vesting and transfer restrictions. If all Class A partnership units were to be exchanged for Class A common stock, fully diluted Class A common stock outstanding would be 70,051,004 and 68,161,800 for the three months ended March 31, 2020 and 2019, respectively. (b) During the three months ended March 31, 2020 and 2019, certain shares of Moelis & Company’s Class A common stock assumed to be issued pursuant to certain RSUs as calculated using the treasury stock method were antidilutive and therefore have been excluded from the calculation of diluted net income (loss) per share attributable to Moelis & Company. During the three months ended March 31, 2020 and 2019, the additional weighted average amount of RSUs that would have been included in this calculation if the effect were dilutive would have been 1,613,603 and 1,340,404 units, respectively. |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Activity Related to Restricted Stock and RSUs | The following table summarizes activity related to restricted stock and RSUs for the three months ended March 31, 2020 and 2019. Restricted Stock & RSUs 2020 2019 Weighted Weighted Average Average Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair Value Unvested Balance at January 1, 8,414,130 $ 42.19 8,761,224 $ 37.59 Granted 3,585,725 37.93 3,495,863 46.08 Forfeited (48,512 ) 37.00 (14,415 ) 46.84 Vested (2,894,992 ) 38.67 (2,787,084 ) 36.62 Unvested Balance at March 31, 9,056,351 $ 41.53 9,455,588 $ 41.04 |
Schedule of Assumptions Used to Estimate the Fair Value of Stock Option Using the Black-Scholes Valuation model | The Company estimated the fair value of stock option awards at grant using the Black-Scholes valuation model with the following assumptions: Assumptions Expected life (in years) 6 Weighted-average risk free interest rate 1.91 % Expected volatility 35 % Dividend yield 2.72 % Weighted-average fair value at grant date $ 6.70 |
Summary of Activity Related to Stock Options | The following table summarizes activity related to stock options for the three months ended March 31, 2020 and 2019. Stock Options Outstanding 2020 2019 Weighted Weighted Average Average Number Exercise Price Number Exercise Price Outstanding Per Share Outstanding Per Share Outstanding at January 1, 728,534 $ 15.95 2,017,067 $ 15.95 Exercises (722,034 ) 15.95 (29,439 ) 15.95 Forfeitures or expirations — 15.95 (2,000 ) 15.95 Outstanding at March 31, 6,500 $ 15.95 1,985,628 $ 15.95 |
Stockholders Equity (Tables)
Stockholders Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Class A Common Stock | |
Schedule of Shares Offered and Increase in Shares Outstanding in Follow-on Offerings | 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 Common Stock | |
Schedule of Shares Offered and Increase in Shares Outstanding in Follow-on Offerings | 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 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Additional Leases Information | . See below for additional information about the Company’s leases. Three Months Ended Three Months Ended March 31, March 31, ($ in thousands) 2020 2019 Supplemental Income Statement Information: Operating lease cost $ 6,365 $ 4,133 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 Right-of-use assets obtained in exchange for lease obligations (e.g. new leases commenced during the period): $ 2,414 $ 1,172 Other Information Weighted-average remaining lease term - operating leases 13.82 years 5.18 years Weighted-average discount rate - operating leases 3.53 % 4.00 % |
Schedule of Future Sublease Income and Maturities of Our Operating Lease Liabilities | The future sublease income and maturities of our operating lease liabilities as of March 31, 2020, are as follows: Fiscal year ended Sublease Income Operating Leases Remainder of 2020 $ (619 ) $ 12,525 2021 (825 ) 18,955 2022 (825 ) 23,309 2023 (825 ) 20,315 2024 (825 ) 18,695 Thereafter (412 ) 191,443 Total Payments $ (4,331 ) $ 285,242 Less: Tenant improvement allowances (24,128 ) Less: Present value adjustment (66,507 ) Total $ 194,607 |
Revenues and Business Informa_2
Revenues and Business Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Geographical Distribution of Revenues and Assets | Three Months Ended March 31, 2020 2019 Revenues: United States $ 129,185 $ 122,680 Europe 16,256 6,716 Rest of World 8,265 8,387 Total $ 153,706 $ 137,783 March 31, December 31, 2020 2019 Assets: United States $ 783,002 $ 934,654 Europe 43,351 67,247 Rest of World 63,333 69,798 Total $ 889,686 $ 1,071,699 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Cash and Cash Equivalents | ||||
Cash | $ 38,975 | $ 71,798 | $ 32,703 | |
Cash equivalents | 85,183 | 96,014 | 36,429 | |
Restricted cash | 597 | 760 | 349 | |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 124,755 | $ 168,572 | $ 69,481 | $ 261,771 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jan. 01, 2019 |
Accounting Policies [Line Items] | |||||
Cash | $ 38,975 | $ 32,703 | $ 71,798 | ||
Cash equivalents | 85,183 | 36,429 | 96,014 | ||
Account receivables | 21,341 | 19,879 | |||
Interest Income | 188 | 275 | |||
Assets and Liabilities, Lessee | |||||
Operating Lease, Liability | 194,607 | 197,625 | |||
Operating lease, right-of-use asset | $ 186,524 | $ 190,763 | |||
Percentage of tax benefits payable to partners under tax receivable agreement | 85.00% | ||||
Remaining percentage of cash savings realized by the Company (as a percent) | 15.00% | ||||
Income Taxes | |||||
Unrecognized tax benefits | $ 0 | $ 0 | |||
Issued Prior to December 1, 2016 | |||||
Revenue and Expense Recognition and Equity-Based Compensation | |||||
Minimum age of retiring employees required so that certain qualifying awards granted during employment will not be forfeited | 54 years | ||||
Consecutive years of service of retiring employees required so that certain qualifying awards granted during employment will not be forfeited | 8 years | ||||
Issued on or After December 1, 2016 | |||||
Revenue and Expense Recognition and Equity-Based Compensation | |||||
Minimum age of retiring employees required so that certain qualifying awards granted during employment will not be forfeited | 56 years | ||||
Consecutive years of service of retiring employees required so that certain qualifying awards granted during employment will not be forfeited | 5 years | ||||
Minimum total age and consecutive years of service of retiring employees required so that certain qualifying awards granted during employment will not be forfeited | 65 years | ||||
ASU 2016-13 | |||||
Accounting Policies [Line Items] | |||||
Cumulative effect on retained earnings, before tax | $ (459) | ||||
Cumulative effect on retained earnings, tax | 95 | ||||
Cumulative effect on retained earnings, net | $ (364) | ||||
ASU 2016-02 | |||||
Assets and Liabilities, Lessee | |||||
Operating Lease, Liability | $ 63,252 | ||||
Operating lease, right-of-use asset | 63,252 | ||||
ASU 2016-02 | Adjustment For Prepaid Rent | |||||
Assets and Liabilities, Lessee | |||||
Operating lease, right-of-use asset | 1,666 | ||||
ASU 2016-02 | Adjustment For Accrued Rent | |||||
Assets and Liabilities, Lessee | |||||
Operating lease, right-of-use asset | $ 7,139 | ||||
ASU 2018-15 | |||||
Assets and Liabilities, Lessee | |||||
Capitalized implementation cost of software | $ 202 | ||||
Minimum | |||||
Accounting Policies [Line Items] | |||||
Installment Period | 3 years | ||||
Minimum | Office Equipment and Furniture and Fixtures | |||||
Assets and Liabilities, Lessee | |||||
Useful lives | 3 years | ||||
Maximum | |||||
Accounting Policies [Line Items] | |||||
Installment Period | 4 years | ||||
Maximum | Office Equipment and Furniture and Fixtures | |||||
Assets and Liabilities, Lessee | |||||
Useful lives | 7 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Credit Loss Allowance Activity (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Financing Receivable Allowance For Credit Losses [Line Items] | |
Allowance for Credit Losses, beginning balance | $ 4,088 |
Allowance for Credit Losses, adjusted beginning balance | 4,547 |
Charge-offs | (1,289) |
Recoveries | (750) |
Reduction to allowance | (2,039) |
Provision for credit losses | 1,268 |
Allowance for credit losses, ending balance | 3,776 |
ASU 2016-13 | |
Financing Receivable Allowance For Credit Losses [Line Items] | |
Allowance for Credit Losses, beginning balance | 459 |
Short-term Receivables | |
Financing Receivable Allowance For Credit Losses [Line Items] | |
Allowance for Credit Losses, adjusted beginning balance | 4,348 |
Charge-offs | (1,289) |
Recoveries | (724) |
Reduction to allowance | (2,013) |
Provision for credit losses | 1,216 |
Allowance for credit losses, ending balance | 3,551 |
Short-term Receivables | ASU 2016-13 | |
Financing Receivable Allowance For Credit Losses [Line Items] | |
Allowance for Credit Losses, beginning balance | 260 |
Private Funds Advisory Receivables | |
Financing Receivable Allowance For Credit Losses [Line Items] | |
Allowance for Credit Losses, adjusted beginning balance | 199 |
Recoveries | (26) |
Reduction to allowance | (26) |
Provision for credit losses | 52 |
Allowance for credit losses, ending balance | 225 |
Private Funds Advisory Receivables | ASU 2016-13 | |
Financing Receivable Allowance For Credit Losses [Line Items] | |
Allowance for Credit Losses, beginning balance | 199 |
Previously Reported | |
Financing Receivable Allowance For Credit Losses [Line Items] | |
Allowance for Credit Losses, beginning balance | 4,088 |
Previously Reported | Short-term Receivables | |
Financing Receivable Allowance For Credit Losses [Line Items] | |
Allowance for Credit Losses, beginning balance | $ 4,088 |
Fixed and Intangible Assets - S
Fixed and Intangible Assets - Schedule of Equipment and Leasehold Improvements, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Equipment and Leasehold Improvements, Net | ||
Total | $ 47,334 | $ 36,049 |
Less accumulated depreciation and amortization | (21,400) | (22,057) |
Equipment and leasehold improvements, net | 25,934 | 13,992 |
Office Equipment | ||
Equipment and Leasehold Improvements, Net | ||
Total | 11,860 | 13,593 |
Furniture and Fixtures | ||
Equipment and Leasehold Improvements, Net | ||
Total | 5,017 | 5,054 |
Leasehold Improvements | ||
Equipment and Leasehold Improvements, Net | ||
Total | 15,199 | 15,294 |
Construction in progress | ||
Equipment and Leasehold Improvements, Net | ||
Total | $ 15,258 | $ 2,108 |
Fixed and Intangible Assets - A
Fixed and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equipment and Leasehold Improvements, Net | ||
Depreciation and amortization expenses | $ 1,199 | $ 1,155 |
Prepaid Expenses and Other Assets | ||
Equipment and Leasehold Improvements, Net | ||
Costs capitalized | $ 202 |
Investments - Summary of the Le
Investments - Summary of the Levels of the Fair Value Hierarchy into Which the Company's Financial Assets Fall (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair value measurements | ||
Total financial assets | $ 106,712 | $ 270,301 |
U.S. Treasury Instruments | ||
Fair value measurements | ||
Cash and cash equivalents | 62,564 | 62,949 |
Investments in securities | 21,227 | 173,960 |
Level 1 | ||
Fair value measurements | ||
Total financial assets | 302 | 327 |
Level 2 | ||
Fair value measurements | ||
Total financial assets | 106,410 | 269,974 |
Level 2 | U.S. Treasury Instruments | ||
Fair value measurements | ||
Cash and cash equivalents | 62,564 | 62,949 |
Investments in securities | 21,227 | 173,960 |
Government Securities Money Market | ||
Fair value measurements | ||
Cash and cash equivalents | 22,619 | 33,065 |
Government Securities Money Market | Level 2 | ||
Fair value measurements | ||
Cash and cash equivalents | 22,619 | 33,065 |
Common Stock | ||
Fair value measurements | ||
Investments in securities | 302 | 327 |
Common Stock | Level 1 | ||
Fair value measurements | ||
Investments in securities | $ 302 | $ 327 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) $ in Thousands, shares in Millions | Feb. 19, 2020 | Nov. 04, 2019 | Sep. 02, 2019 | Feb. 20, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Apr. 01, 2010 |
Schedule of Investments | ||||||||
Investments at fair value, cost basis | $ 21,745 | $ 173,806 | ||||||
Dividends received | 1,942 | $ 2,848 | ||||||
Equity method investments | 37,352 | $ 38,944 | ||||||
Corporate Joint Venture | ||||||||
Schedule of Investments | ||||||||
Ownership percentage | 50.00% | |||||||
Dividends received | $ 1,942 | $ 2,848 | ||||||
Common Stock shares sold | 8 | 12.5 | ||||||
Gain from sale of equity method investment | $ 8,083 | $ 12,631 | ||||||
Common Stock | ||||||||
Schedule of Investments | ||||||||
Unrealized gain (loss) on equity securities | $ 25 | $ 41 |
Net Income (Loss) Per Share A_3
Net Income (Loss) Per Share Attributable to Class A Common Shareholders - Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net income (loss) attributable to holders of shares of Class A common stock—basic | $ 25,130 | $ 13,570 |
Class A Common Stock | ||
Numerator: | ||
Net income (loss) attributable to holders of shares of Class A common stock—basic | 25,130 | 13,570 |
Add (deduct) dilutive effect of: | ||
Net income (loss) attributable to holders of shares of Class A common stock—diluted | $ 25,130 | $ 13,570 |
Denominator: | ||
Weighted average shares of Class A common stock outstanding—basic | 52,666,457 | 48,309,358 |
Add (deduct) dilutive effect of: | ||
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 | 6,798,977 |
Weighted average shares of Class A common stock outstanding—diluted | 57,092,982 | 55,108,335 |
Net income (loss) per share attributable to holders of shares of Class A common stock | ||
Basic (in dollars per share) | $ 0.48 | $ 0.28 |
Diluted (in dollars per share) | $ 0.44 | $ 0.25 |
Net Income (Loss) Per Share A_4
Net Income (Loss) Per Share Attributable to Class A Common Shareholders - Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share (Parenthetical) (Details) - Class A Common Stock - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share Basic [Line Items] | ||
Number of shares of common stock to be issued upon exchange of a partnership unit | 1 | |
Fully diluted shares of common stock outstanding if all Class A partnership units were to be exchanged for common stock immediately following the reorganization | 70,051,004 | 68,161,800 |
Restricted Stock and RSUs | ||
Earnings Per Share Basic [Line Items] | ||
Number of antidilutive securities excluded from calculation of diluted income (loss) per share | 1,613,603 | 1,340,404 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | 72 Months Ended | ||||||
Apr. 30, 2014 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2014 | Mar. 31, 2020 | Dec. 31, 2019 | Feb. 28, 2019 | Dec. 31, 2018 | Mar. 31, 2015 | Nov. 09, 2014 | |
Equity-Based Compensation | ||||||||||
Compensation expenses | $ 38,225 | $ 38,282 | ||||||||
Class A Common Stock | ||||||||||
Equity-Based Compensation | ||||||||||
Number of shares of common stock to be issued upon exchange of a partnership unit | 1 | 1 | ||||||||
Partnership Units | ||||||||||
Equity-Based Compensation | ||||||||||
Compensation expenses | $ 30 | $ 109 | ||||||||
Unrecognized compensation expenses | $ 9 | $ 9 | ||||||||
Weighted average period to recognize unrecognized compensation expense | 1 month 6 days | |||||||||
Partnership and Employees | ||||||||||
Equity-Based Compensation | ||||||||||
Units held by partners and employees | 12,958,022 | 12,958,022 | ||||||||
Unvested units held by partners and employees | 36,634 | 36,634 | ||||||||
Share Repurchase Plan | Class A Common Stock | ||||||||||
Equity-Based Compensation | ||||||||||
Share value authorized for repurchase | $ 100,000 | $ 25,000 | ||||||||
Value of remaining shares authorized for repurchase | $ 80,900 | $ 80,900 | ||||||||
RSUs | Minimum | ||||||||||
Equity-Based Compensation | ||||||||||
Vesting period | 4 years | |||||||||
RSUs | Maximum | ||||||||||
Equity-Based Compensation | ||||||||||
Vesting period | 5 years | |||||||||
Restricted Stock and RSUs | ||||||||||
Equity-Based Compensation | ||||||||||
Unvested units held by partners and employees | 9,056,351 | 9,455,588 | 9,056,351 | 8,414,130 | 8,761,224 | |||||
Unrecognized compensation expenses | $ 204,253 | $ 204,253 | ||||||||
Weighted average period to recognize unrecognized compensation expense | 2 years | |||||||||
Stock Options | ||||||||||
Equity-Based Compensation | ||||||||||
Vesting period | 5 years | |||||||||
Compensation expenses | $ 0 | $ 495 | ||||||||
Grants (in shares) | 3,501,881 | |||||||||
Special dividends paid (in dollars per share) | $ 9.05 | |||||||||
Reduction to exercise price of options outstanding due to special dividend paid (in dollars per share) | 9.05 | |||||||||
Exercise price (in dollars per share) | $ 15.95 | $ 15.95 | $ 15.95 | $ 15.95 | $ 15.95 | $ 25 | ||||
Managing Directors | Partnership Units | Minimum | ||||||||||
Equity-Based Compensation | ||||||||||
Vesting period | 5 years | |||||||||
Managing Directors | Partnership Units | Maximum | ||||||||||
Equity-Based Compensation | ||||||||||
Vesting period | 8 years | |||||||||
Non-Managing Director Employees | Partnership Units | ||||||||||
Equity-Based Compensation | ||||||||||
Vesting period | 4 years |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Activity Related to Restricted Stock and RSUs (Details) - Restricted Stock and RSUs - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Number of Shares | ||
Unvested Balance at the beginning of the period | 8,414,130 | 8,761,224 |
Granted | 3,585,725 | 3,495,863 |
Forfeited | (48,512) | (14,415) |
Vested | (2,894,992) | (2,787,084) |
Unvested Balance at the end of the period | 9,056,351 | 9,455,588 |
Weighted Average Grant Date Fair Value | ||
Unvested Balance at the beginning of the period | $ 42.19 | $ 37.59 |
Granted | 37.93 | 46.08 |
Forfeited | 37 | 46.84 |
Vested | 38.67 | 36.62 |
Unvested Balance at the end of the period | $ 41.53 | $ 41.04 |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of Assumptions Used to Estimate the Fair Value of Stock Option Using Black-Scholes Valuation Model (Details) | 3 Months Ended |
Mar. 31, 2020$ / shares | |
Assumptions Used to Estimate Fair Value | |
Expected life (in years) | 6 years |
Weighted-average risk free interest rate | 1.91% |
Expected volatility | 35.00% |
Dividend yield | 2.72% |
Weighted-average fair value at grant date | $ 6.70 |
Equity-Based Compensation - S_2
Equity-Based Compensation - Summary of Activity Related to Stock Options (Details) - Stock Options - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Number Outstanding | ||
Outstanding at January 1, | 728,534 | 2,017,067 |
Exercises | (722,034) | (29,439) |
Forfeitures or expirations | (2,000) | |
Outstanding at March 31, | 6,500 | 1,985,628 |
Weighted-Average Exercise Price Per Share | ||
Outstanding at January 1, | $ 15.95 | $ 15.95 |
Exercises | 15.95 | 15.95 |
Forfeitures or expirations | 15.95 | 15.95 |
Outstanding at March 31, | $ 15.95 | $ 15.95 |
Stockholders Equity - Additiona
Stockholders Equity - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 60 Months Ended | |||||||
Aug. 31, 2018shares | Mar. 31, 2018shares | Jul. 31, 2017shares | Jan. 31, 2017shares | Nov. 30, 2014shares | Apr. 30, 2014shares | Mar. 31, 2020USD ($)shares | Mar. 31, 2019USD ($)shares | Sep. 30, 2019shares | Dec. 31, 2019shares | |
Class Of Stock [Line Items] | ||||||||||
Treasury stock, shares | 3,627,337 | 2,757,558 | ||||||||
Treasury stock shares acquired (in shares) | 869,779 | 616,796 | ||||||||
Treasury stock shares acquired | $ | $ 31,636 | $ 26,970 | ||||||||
Number of units held by noncontrolling interest holders | 12,958,022 | 12,958,022 | ||||||||
Group LP | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Noncontrolling interests (as a percent) | 20.00% | 21.00% | ||||||||
Class A Common Stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Aggregate stock issuance (in shares) | 15,263,653 | |||||||||
Common stock, shares issued | 57,076,395 | 52,773,617 | ||||||||
Treasury stock, shares | 3,627,337 | 2,757,558 | ||||||||
Common stock, shares outstanding | 53,449,058 | 50,016,059 | ||||||||
Increase in shares outstanding | 4,685,217 | 4,689,295 | 5,680,903 | 5,356,876 | 4,511,058 | 24,923,349 | ||||
Number of shares of common stock to be issued upon exchange of a partnership unit | 1 | |||||||||
Class A Common Stock | Group LP | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Common stock, shares outstanding | 53,449,058 | 50,016,059 | ||||||||
Class B Common Stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Common stock, shares issued | 10,397,915 | 10,397,915 | ||||||||
Common stock, shares outstanding | 10,397,915 | 10,397,915 | ||||||||
Increase in shares outstanding | 36,158,698 | |||||||||
Ratio of subscription price to the initial public offering price of shares of common stock | 0.00055 | |||||||||
Dividends payable ratio to outstanding shares of publicly traded common stock | 0.00055 |
Stockholders Equity - Schedule
Stockholders Equity - Schedule of Shares Offered and Increase in Shares Outstanding in Follow-on Offerings (Details) - USD ($) $ in Thousands | 1 Months Ended | 60 Months Ended | |||||
Aug. 31, 2018 | Mar. 31, 2018 | Jul. 31, 2017 | Jan. 31, 2017 | Nov. 30, 2014 | Apr. 30, 2014 | Sep. 30, 2019 | |
Class A Common Stock | |||||||
Class Of Stock [Line Items] | |||||||
Total Shares Offered | 5,000,000 | 5,000,000 | 6,000,000 | 5,750,000 | 6,325,000 | 28,075,000 | |
Total Increase in Shares Outstanding | 4,685,217 | 4,689,295 | 5,680,903 | 5,356,876 | 4,511,058 | 24,923,349 | |
Class B Common Stock | |||||||
Class Of Stock [Line Items] | |||||||
Total Increase in Shares Outstanding | 36,158,698 | ||||||
Stock Purchased/Surrendered | 4,685,217 | 4,689,295 | 5,680,903 | 5,356,876 | 4,507,453 | 24,919,744 | |
Purchase Cost | $ 158 | $ 135 | $ 128 | $ 101 | $ 28 | $ 550 |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Manager | Aircraft Lease Entered into During August 2014 | |||
Related-party transactions | |||
Expenses | $ 324 | $ 468 | |
Employees | |||
Related-party transactions | |||
Unsecured promissory notes from employees | $ 189 | $ 189 | |
Employees | Unsecured Promissory Notes | |||
Related-party transactions | |||
Interest rates (as a percent) | 4.00% | 4.00% | |
Principal repayments | $ 0 | 0 | |
Interest income recognized | 2 | 2 | |
Moelis Asset Management LP | |||
Related-party transactions | |||
Fee for services | 110 | 62 | |
Due from related party | 0 | $ 0 | |
Revenue from related parties | 0 | $ 201 | |
Corporate Joint Venture | |||
Related-party transactions | |||
Due to related party | $ 0 | $ 0 |
Regulatory Requirements - Addit
Regulatory Requirements - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Regulatory Requirements | ||
Minimum net capital requirement | $ 250 | |
Moelis US | ||
Regulatory Requirements | ||
Net capital | 81,893 | $ 160,401 |
Net capital in excess of required net capital | 81,643 | 160,151 |
Moelis UK | ||
Regulatory Requirements | ||
Net capital | 5,967 | 11,978 |
Net capital in excess of required net capital | $ 5,911 | $ 11,922 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | Apr. 20, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Bank line of credit | ||||
Available credit under the facility | $ 60,069,000 | |||
Revolving Credit Facility | ||||
Bank line of credit | ||||
Fixed rate of interest (as a percent) | 3.50% | |||
Borrowings under the credit facility | $ 0 | $ 0 | ||
Standby Letters of Credit | ||||
Bank line of credit | ||||
Letters of credit outstanding | $ 4,931,000 | |||
Fee on the outstanding balances (as a percent) | 1.00% | |||
LIBOR | Revolving Credit Facility | ||||
Bank line of credit | ||||
Interest rate margin (as a percent) | 1.00% | |||
Reference rate (as a percent) | LIBOR | |||
Prime | Revolving Credit Facility | ||||
Bank line of credit | ||||
Interest rate margin (as a percent) | (1.50%) | |||
Reference rate (as a percent) | Prime | |||
Subsequent Event | ||||
Bank line of credit | ||||
Commitment amount | $ 65,000,000 | |||
Subsequent Event | Secured Bank Line of Credit | ||||
Bank line of credit | ||||
Commitment amount | $ 65,000,000 | |||
Minimum Days To Issues Termination Notice | 60 days |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Additional Leases Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Supplemental Income Statement Information: | ||
Operating lease cost | $ 6,365 | $ 4,133 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | 5,299 | 4,868 |
Right-of-use assets obtained in exchange for lease obligations (e.g. new leases commenced during the period): | $ 2,414 | $ 1,172 |
Other Information | ||
Weighted-average remaining lease term - operating leases | 13 years 9 months 25 days | 5 years 2 months 4 days |
Weighted-average discount rate - operating leases | 3.53% | 4.00% |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Future Minimum Rental Payments Required Under Operating Leases in Place (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Sublease Income | ||
Remainder of 2020 | $ (619) | |
2021 | (825) | |
2022 | (825) | |
2023 | (825) | |
2024 | (825) | |
Thereafter | (412) | |
Total Payments | (4,331) | |
Operating Leases | ||
Remainder of 2020 | 12,525 | |
2021 | 18,955 | |
2022 | 23,309 | |
2023 | 20,315 | |
2024 | 18,695 | |
Thereafter | 191,443 | |
Total Payments | 285,242 | |
Less: Tenant improvement allowances | (24,128) | |
Less: Present value adjustment | (66,507) | |
Operating Lease, Liability | $ 194,607 | $ 197,625 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Minimum age required to be eligible to participate in the 401(k) plan | 21 years | |
Expenses accrued relating to employer matching contributions | $ 696 | $ 683 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Provision (benefit) for income taxes | $ 7,344 | $ 4,458 |
Effective tax rate (as a percent) | 32.00% | 38.00% |
Excess tax benefits | $ 7,337 | |
Tax benefit from CARES Act | $ 5,740 |
Revenues and Business Informa_3
Revenues and Business Information - Schedule of Geographical Distribution of Revenues and Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenues | $ 153,706 | $ 137,783 | |
Total assets | 889,686 | $ 1,071,699 | |
United States | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenues | 129,185 | 122,680 | |
Total assets | 783,002 | 934,654 | |
Europe | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenues | 16,256 | 6,716 | |
Total assets | 43,351 | 67,247 | |
Rest of World | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenues | 8,265 | $ 8,387 | |
Total assets | $ 63,333 | $ 69,798 |
Revenues and Business Informa_4
Revenues and Business Information - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting [Abstract] | ||
Deferred revenue | $ 4,450 | $ 3,023 |
Revenues recognized from opening balance of deferred revenues | $ 1,167 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event $ / shares in Units, $ in Thousands | Apr. 20, 2020USD ($)$ / shares |
Subsequent Event [Line Items] | |
Dividends declared per share | $ / shares | $ 0.255 |
Dividend declared date | Apr. 20, 2020 |
Dividend payable date | Jun. 30, 2020 |
Dividend payable record date | May 4, 2020 |
Commitment amount | $ | $ 65,000 |