Moelis & Company

Good day and welcome to the Moelis & Company Q3 2020 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would like now to turn the conference over to Mr. Chet Mendel. Head of Investor Relations, please go ahead.

Good afternoon, and thank you for joining us for Moelis & Company's third quarter 2020 financial results conference call. On the phone today are Ken Moelis, Chairman and CEO, and Joe Steinman, Chief Financial Officer. Before we begin, I'd like to note that the remarks made on this call may contain certain forward-looking statements, which are subject to various risks and uncertainties, including those identified from time to time in the risk factor section of Moelis & Company's filings with the SEC In our earnings release, actual results could differ materially from those currently anticipated. The firm undertakes no obligation to update any forward-looking statements. Our comments today include references to certain adjusted financial measures. We believe these measures, when presented together with comparable gap measures, are useful to investors to compare our results across several periods to better understand our operating results. The reconciliation of these adjusted financial measures with the relevant GAAP financial information and other information required by Reg G is provided in the firm's earnings release, which can be found on our investor relations website at investors.moelis.com. I will now turn the call over to Joe to discuss our results. Joe?

Thanks, Jack. Good afternoon, everyone. On today's call, I'll go through our financial results, and then Ken will discuss our business further. We achieved a strong third quarter, earning $208 million of revenues. This resulted in sequential growth for the second consecutive quarter since the onset of COVID-19. The general M&A landscape dramatically improved in the third quarter, leading to a solid contribution from both strategics and sponsors. Our restructuring-related activity was the highest it's ever been, exceeding last year's record third quarter contribution. We experienced particular strength in out-of-court restructurings, a specialty of ours. We continue to excel in offering innovative solutions, which in certain cases can accelerate the timeline to resolution and avoid a lengthy Chapter 11 process. In addition, our restructuring retainers remain significantly elevated over the prior year, and our capital markets business continues to make a steady contribution to revenues. Moving to expenses, adjusted compensation expense was accrued at 61% in the third quarter. Our non-comp ratio was 14% in the third quarter and we've reported 28 million of non-comp expenses due to continued low travel and continued expense discipline. Our normalized corporate tax rate remained at approximately 25%. This quarter's effective tax rate was higher than the normalized rate due to the reversal of some CARES benefits previously accrued due to current quarter profitability. Regarding capital allocation, the Board declared a dividend of 38.25 cents per share, an increase of 50% from the second quarter which is halfway back to our former regular dividend. We have always operated from a position of financial discipline and remain committed to returning 100% of our excess capital. And lastly, we continue to maintain a fortress balance sheet with substantial liquidity and no debt. We ended the quarter with $266 million of cash and liquid investments and an undrawn revolver. And I'll now turn the call over to Ken.