Moelis & Company

All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Mr. Matt Sucraw. Please go ahead.

Good afternoon. Good afternoon, and thank you for joining us for Molson Company's third quarter 2023 financial results conference call. On the phone today are Ken Mollis, Chairman and CEO, and Joe Simon, Chief Financial Officer. Before we begin, I would 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 Molson Company's filings with the SEC. 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 and to better understand our operating results. The reconciliation of these adjusted financial measures with the relevant gap 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.mullis.com. I'll now turn the call over to Joe. Thanks, Matt.

Good afternoon, everyone. On today's call, I'll go through our financial results, and then Ken will comment further on the business. We reported $278 million of adjusted revenues in the third quarter, an increase of 19% versus the prior year. The revenue increase was driven by our restructuring business and some particularly large restructuring fee events. We do not expect this to recur next quarter. Our year-to-date adjusted revenues were $645 million, representing a decrease of 16% from the prior year period. The decline in revenues is primarily attributable to a decrease in M&A transaction completions. Moving to expenses, our year-to-date compensation expense was accrued at 83%, which is our best estimate of a full year ratio. Our elevated compensation ratio is a function of a revenue dislocation driven by the still challenging M&A environment and our decision to aggressively invest in talent during this downturn. Our third quarter adjusted non-comp expenses were $50 million, which includes approximately $8 million of co-advisor and legal fee expense related to completed transactions, which includes our transitional SVB fee sharing agreement related to certain pre-selected mandates. Our non-compensation expenses are expected to remain elevated through the first quarter of 2024 when our SVB fee sharing agreement terminates. However, the underlying quarterly run rate continued to be approximately $42 million. Based on our updated full-year projection of income, we accrued tax expense to equal an effective rate of 1.7%. Our non-deductible expenses are large relative to our pre-tax book income. Over the longer term, we expect to reflect a tax rate more consistent with our recent history once normalized productivity can be restored. Regarding capital allocation, the Board declared a regular quarterly dividend of $0.60 per share, consistent with the prior period. And lastly, we continue to maintain a strong balance sheet with $297.8 million of cash and no debt. And I'll now turn the call over to Ken.