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Edited Transcript of GHL.N earnings conference call or presentation 4-Feb-21 9:30pm GMT

·30 min read

Q4 2020 Greenhill & Co Inc Earnings Call NEW YORK Feb 4, 2021 (Thomson StreetEvents) -- Edited Transcript of Greenhill & Co Inc earnings conference call or presentation Thursday, February 4, 2021 at 9:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Patrick J. Suehnholz Greenhill & Co., Inc. - MD, Director of IR & COO of Investment Banking * Scott Lee Bok Greenhill & Co., Inc. - Chairman & CEO ================================================================================ Conference Call Participants ================================================================================ * Devin Patrick Ryan JMP Securities LLC, Research Division - MD and Equity Research Analyst * James Edwin Yaro Goldman Sachs Group, Inc., Research Division - Research Analyst * Michael C. Brown Keefe, Bruyette, & Woods, Inc., Research Division - Associate ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good afternoon, and welcome to the Greenhill & Co., Inc. Fourth Quarter 2020 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Patrick Suehnholz, Director of Investor Relations. Please go ahead. -------------------------------------------------------------------------------- Patrick J. Suehnholz, Greenhill & Co., Inc. - MD, Director of IR & COO of Investment Banking [2] -------------------------------------------------------------------------------- Thank you. Good afternoon, and thank you all for joining us today for Greenhill's Fourth Quarter 2020 Financial Results Conference call. I am Patrick Suehnholz, Greenhill's Head of Investor Relations. Joining me on the call today is Scott Bok, our Chairman and Chief Executive Officer. Today's call may include forward-looking statements. These statements are based on our current expectations regarding future events that, by their nature, are outside of the firm's control and are subject to known and unknown risks, uncertainties and assumptions. The firm's actual results and financial condition may differ possibly materially from what is indicated in those forward-looking statements. For a discussion of some of the risks and factors that could affect the firm's future results, please see our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date on which they are made. I would now like to turn the call over to Scott Bok. -------------------------------------------------------------------------------- Scott Lee Bok, Greenhill & Co., Inc. - Chairman & CEO [3] -------------------------------------------------------------------------------- Thank you, Patrick. We reported fourth quarter revenue of $140.7 million, which was our best quarterly performance ever; an operating margin of 57%; and net income of $2.71 per share. For the year, we had revenue of $311.7 million, an operating margin of 18% and net income of $1.36 per share. Our quarterly revenue was up 32%, and earnings per share was up 158% from the same period last year. For the full year, our revenue was up 4% and earnings per share was up 202% from the prior year. In sum, we had a very strong finish to the year, resulting in very respectable pandemic year results on the top and bottom line, all consistent with our commentary on the past couple of quarterly investor calls. Clearly, quarterly revenue of the scale we achieved requires a lot of things to go right. We generated multiple very significant M&A completion fees, multiple very significant restructuring completion fees and a long list of smaller fees to go with them. We also benefited more than usual from accounting rules in relation to revenue recognition that came into effect a few years ago and sometimes require revenue from completion fees to be booked before the transaction, triggering that fee is fully completed. But just to make it clear that our very strong quarter was not simply a matter of transaction timing. Our earnings per share for the quarter was greater than the analyst consensus forecast for the fourth quarter and the next 4 quarters ahead combined. In other words, our profit in 1 quarter exceeded what was expected for 5 quarters. Looking at our full year results, we benefited from particularly strong results from our European M&A business and our U.S. restructuring business. We also benefited from an expanding array of financing advisory roles that are neither traditional M&A nor traditional restructuring. Our private capital advisory business made a meaningful contribution as well, albeit considerably less so than in the prior year. Our revenue for the year was highly concentrated in a few busy areas, as many regions and sectors were heavily impacted by the pandemic and related constraints in economic activity, and thus produced only modest revenue. Importantly, we see nearly all of those areas is poised for significant improvement in 2021 given current market conditions and what we can see in our pipeline of assignments. Turning to our costs. Our compensation ratio for the year was 62%, moderately above our target level as we invested much of our noncompensation savings in rewarding our strong performers in what was a challenging year for all. For the quarter, the compensation ratio was unusually low as we work to achieve a reasonable full year cost level. We did similarly in last year's fourth quarter. As noted in the past, we will have some quarterly volatility but aim to manage annual compensation costs to a target level. Our noncompensation costs were down 18% from the prior year, despite the fact that we incurred rent expense on 2 New York headquarters locations for much of the year as we built out new space. Some of those cost savings flowed from reduced travel due to pandemic-related restrictions, and we believe those cost savings will continue for much of this year. Even after that, we expect to have considerably lower travel expense than we had historically. Separate from travel, our cost savings resulted from a wide variety of management initiatives, and we expect the benefits of those moves to be sustained for the long term. As a result, we expect our 2021 noncompensation cost to be materially lower than they were in 2020, when in turn, they were substantially below the level in 2019. As one example, the rent expense for our headquarters in 2021 should be $7 million less than it was in 2020 given we had both more expensive space in some months of duplication in the year just ended. Notwithstanding those savings, we will have a higher quality space and room for more bankers than we did in our prior headquarters location. Given the significant opportunities we have to reduce noncompensation costs, we see increased potential to attain our goal of a 25% operating margin like we achieved for many years of our history, and that is our goal. Our interest expense for the year was $15.5 million, well below last year's level as we benefited from a lower interest rate premium post our refinancing last year, lower market interest rate levels, reduced debt outstanding and the absence of a refinancing charge. For the quarter, interest expense was $3.5 million as we continue to benefit from low market rates and debt reduction. And our borrowing costs, currently around 3.4%, should remain low based on market expectations of continued low interest rates, and our interest expense should continue to decline in line with our paydown of debt. Our income taxes were considerably lower than last year as our income was skewed to lower rate jurisdictions, the opposite of last year when it was skewed to higher rate jurisdictions. We also benefited, to some degree, from various tax law changes that were put in place during 2020 as a result of the pandemic. Going forward, we continue to expect an effective tax rate of around 25%, excluding any charge or benefit relating to the impact of share settlements on vesting restricted stock and assuming no major changes in tax laws in the primary places we operate. The actual rate could end up somewhat higher or lower in any given year depending on where we earned most of our income in such a year. We ended the year with $112.7 million of cash and debt of $326.9 million, meaning we had net debt of $214.2 million. During 2020, we made principal payments of $38.8 million on our term loan, including a discretionary payment of $20 million at year-end. There are no mandatory principal payments due until March of 2022, but we intend to continue paying down our debt on an accelerated basis as our cash flow allows. Given the uncertainty created by the pandemic, we purchased only 489,704 shares in the open market in 2020, plus another 764,529 share equivalents in connection with tax withholding on vesting restricted stock units for a total cost of $23.3 million. Our Board has authorized $50 million in repurchases of shares and share equivalents for the year ahead through January 2022. While our principal focus will be on deleveraging, we intend to purchase shares in a prudent manner in an effort to further enhance the upside potential for continuing shareholders. In that regard, note that our employees own about half of the economics of the firm through stock and restricted stock, so we are fully aligned with shareholders as we seek to maximize value through the prudent use of the cash that we generate. We also declared our usual quarterly dividend of $0.05 per share. We entered 2021 in what feels like a favorable environment for our business. With respect to M&A, a positive economic outlook driven by unprecedented fiscal and monetary stimulus, combined with high stock prices, low borrowing costs, very substantial dry powder at private equity funds, a plethora of special purpose acquisition companies looking for deals and a variety of other factors, should drive increased deal activity. In particular, we expect increased M&A revenue in most of our international offices as well as in certain sectors like industrials where activity was low in 2020. At the same time, while restructuring activity has cooled considerably from 2020's frenetic pace, more debt restructuring should be needed for the many industries and companies adversely affected by the continuing pandemic. In addition, we are seeing significant opportunity to advise on various kinds of debt and equity financings and expect those assignments to provide a meaningful part of our near-term revenue. In sum, we would be very disappointed if we failed to generate meaningful revenue growth in 2021. And given our expectations of lower costs, higher revenue should result in margin expansion and increased earnings. I'll now make a few comments on our strategy. Our overarching objective is to increase the scale, diversity and consistency of our revenue sources while maintaining appropriate discipline on expenses. As always, we will look to recruit M&A bankers who bring us incremental industry sector expertise or regional capabilities. We have an active pipeline of good prospects in that regard. With respect to restructuring advice, we see our strategic initiative over the past few years to significantly expand our team as a major success, but we believe there remains the potential to expand even further. In particular, we want to play more advisory roles on debt and equity financing transactions. We've had increasing success in broadening the range of transactions on which we advise, and we see this as an opportunity that will continue even in periods where there's much less bankruptcy-related activity than we have seen of late. In our private capital advisory business, we have strong teams in Europe and Asia and are in the process of rebuilding in the U.S., with an increased focus on higher value-added transactions. In terms of strategic initiatives, we are aiming to enhance our focus on advising financial sponsors on a wide variety of transactions. Historically, we focused heavily on serving public companies, and we've enjoyed great success with that constituency. However, over time, we came to realize that we've had increasing interaction with financial sponsors across our M&A, restructuring and private capital advisory businesses. We're now aiming to organize those efforts in a more systematic way designed to generate more revenue, and we have already put significant resources into this initiative. We are hopeful that it will be at least as successful as the restructuring advisory team expansion that was our primary strategic focus over the last couple of years. In closing, I want to mention 2 landmark events in the life of our firm. First, this week, we are opening our new headquarters in the newly renovated Rockefeller Center building on Sixth Avenue that is known to many as the old-time life building. We look forward to welcoming clients there once the pandemic has subsided. Second, a couple of weeks ago, we passed the 25-year mark in the life of our firm. It is obviously not the time for celebrations of any kind, but it is worth noting the fact that our firm has proven resilient through numerous challenges over that quarter of a century, the dot.com bubble bursting, the September 11 terrorist attacks, the financial crisis of 2008 and now a major pandemic. Our strong culture is the source of our resilience in both our global team, and our brand will emerge from the pandemic stronger than ever. With that, I'm happy to take any questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Our first question comes from Devin Ryan with JMP Securities. -------------------------------------------------------------------------------- Devin Patrick Ryan, JMP Securities LLC, Research Division - MD and Equity Research Analyst [2] -------------------------------------------------------------------------------- Maybe to start. Obviously, a terrific quarter. I'd love to just get a little bit more perspective on kind of how the tone of business evolved. And if you can, can you give some perspective around the various new businesses that Greenhill was in? And really, what I'm trying to just think about is the commentary around expectations for improved productivity. And I know it's probably hard to give an exact target of where you guys would like to be on productivity, but if there's anything you can share around how you think about whether it's managing director productivity or employee productivity, kind of what's a range that you feel like is both achievable but kind of reasonable for the business today. -------------------------------------------------------------------------------- Scott Lee Bok, Greenhill & Co., Inc. - Chairman & CEO [3] -------------------------------------------------------------------------------- Okay. There's a lot in that question, a lot of elements to it. And starting with 2020 was a year -- I mean people talk about cycles in the last 3 years. I think we had cycles that lasted for months. Essentially the first quarter, the first 10 weeks, maybe of the year, it seemed like it was going to be a good year in M&A, a good year in capital advisory, kind of a normal to quiet year in restructuring. Obviously, when the pandemic sort of shut things down in mid-March, you had a few months period where certainly things in the economy and the markets looked pretty grim. There was an explosion of restructuring opportunities. We won a tremendous amount of business. Obviously, many of our peers did as well. There were a lot of opportunities out there. M&A really slowed down, and capital advisory essentially stopped because that's very closely tied to markets and people didn't want to transact when markets were moving around and, frankly, falling so dramatically. That changed, in turn, again, really very quickly by the time you got to the third and fourth quarter. Suddenly, M&A started coming back to life, especially in the sectors that were less impacted, consumer, health care, technology, telecom infrastructure, things like that stayed quiet, of course, in some of the areas that are more impacted. Capital advisory came back to life, actually had a decent fourth quarter for us. And restructuring, while there's still plenty to sort of work through the pipeline and finish, the sort of the arising of new opportunities certainly slowed a lot as we got to the later parts of the year. So it really was kind of a year was kind of 3 completely different pieces to it. As we go into 2021, and I think what gives us probably the greatest enthusiasm was potential for increased productivity. It's just that there's much more broad-based opportunity. I mean we had many parts of our firm that really did not have good years at all last year. I mean there were some parts of the world and there were some sectors, like I would note industrial is probably our biggest sector in terms of number of MDs, where there just was very little activity. And I think in some of those parts of the world, Canada, Australia, some of those sectors like industrials, we think it's going to be a very different year. Certainly, it looks like that right now. So I think the biggest factor in getting to higher productivity is just a more broad-based participation in the revenue production in any given year. And last year was very, very skewed and kind of shifted a few different times, whereas in 2021, it feels like a more broad-based positive environment for, frankly, almost every business that we're in, including I would say -- and I've highlighted a couple of times in my sort of written remarks, the financing advisory. I mean I do think there's going to be considerably less bankruptcy and bankruptcy-like transactions for the near term, but we think we can offset a lot of that and find new opportunity in helping companies with financing. We obviously don't underwrite. We're not going to do somebody's leveraged loan offering. But increasingly, the nonbank banks, the shadow banks, whatever you want to call them, the new form of lenders or many of which you cover in your research I know, are very active in lending. And companies don't have the same access to those that they do with maybe the bulge bracket bank that they typically have a revolving credit facility with. So we find increasing opportunities to help them do that. So that's a long-winded answer, but hopefully answers a good part of your question. -------------------------------------------------------------------------------- Devin Patrick Ryan, JMP Securities LLC, Research Division - MD and Equity Research Analyst [4] -------------------------------------------------------------------------------- Yes. Scott, I appreciate all the color there. And then maybe just one follow-up here on some of the operating margin commentary and just trying to think about going from the, call it, 18% in 2020 to call it the mid-20s or, let's just say, 25%. You highlighted some of the kind of expense levers, and then clearly, there's a revenue assumption in there as well. But in a reasonable revenue environment or maybe, say, a healthy revenue environment where you have a full year of healthy revenues, is that enough to get there? Or is that more of an aspirational you're kind of moving towards that, you're investing in the business and you feel like that as the firm scales and productivity improves, that that's ultimately kind of where you get back to? I'm just trying to think about is that something that the business kind of gets to relatively quickly as some of these expense savings manifest and revenues get back to something maybe a little bit more normalized? Or are there other kind of factors in there as well? -------------------------------------------------------------------------------- Scott Lee Bok, Greenhill & Co., Inc. - Chairman & CEO [5] -------------------------------------------------------------------------------- I'd say we're -- look, last year shifted so many times, one hates to make long-term predictions even for a full year ahead. But no, we're more optimistic about getting back to the 25% margin. We had it for a lot of years in our history not even that many years ago. We -- you certainly need a certain level of revenue productivity to get there. But I do think the reduction in noncomp expense is kind of a game changer. And clearly, we're getting a lot of savings right now with travel and entertainment and other things like that. But we do think a lot of that is going to continue post-pandemic. And some of the other savings, we've just done a lot of little things that add up to a fair amount. And clearly, things like our New York headquarters, that's a fairly meaningful number for us. So I think the reduction in noncomp gives us increasing confidence that even with paying out a higher comp ratio than we did for many years of our history when we had very, very high margins, I mean, today, I think you have to have higher comp ratio to be competitive in terms of talent. But we think we're getting closer to the point where we can do both and get back toward those high margins in the past. -------------------------------------------------------------------------------- Operator [6] -------------------------------------------------------------------------------- The next question is from James Yaro with Goldman Sachs. -------------------------------------------------------------------------------- James Edwin Yaro, Goldman Sachs Group, Inc., Research Division - Research Analyst [7] -------------------------------------------------------------------------------- So I guess my first one is I'm trying to tie together your point that the restructuring business has cooled relative to 2020, but also the fact that you expect to be able to grow the business further in 2021. Maybe you could help contextualize how you expect the full year 2021 restructuring revenue to sort of perform relative to 2020. And then as a corollary, maybe you could just talk about whether you're targeting more of the creditor side assignments or debtor side and maybe the split across those if you're able to. -------------------------------------------------------------------------------- Scott Lee Bok, Greenhill & Co., Inc. - Chairman & CEO [8] -------------------------------------------------------------------------------- I think like most of our competitors, we do quite a mix these days of debtor and creditor and also of kind of more plain vanilla financing, along with more bankruptcy-oriented type stuff. I mean, clearly, I think like most of our peers are now saying as well, there's going to be less bankruptcy activity real near term. But there's still a fair amount working its way through the pipeline, so that's going to happen. We think there will be, in today's very robust financing environment, more kind of alternative capital source financing transactions that we can get involved in. But my comment about really getting bigger in restructuring is more of a medium-term comment. I mean, conceivably, we'll grow the team further this year. But certainly, I think, over time, we will. We -- this is really a landmark year for us in 2020. We've always had a restructuring team, very high quality but not very big. And we took a big step up in terms of size. And I think now, 2020, it was great to add a lot of really high-margin revenue in restructuring transactions. But I think equally important, we added a lot of great credentials. So now in almost any relevant sector, we have far more credentials than we once did. I think we're much more in the game, much more in the flow, and yet we're not at the very top tier of restructuring advisers in any sort of league table sense. So I think there is potential to grow further there. Whether we actually see revenue growth in 2021, I'd probably say that 2021 feels to me right now like it's much more of an M&A-oriented environment than restructuring. So If you ask which business I'm sort of most optimistic on in terms of growth, it would certainly be M&A just given high stock prices, low borrowing costs, et cetera. But we feel pretty good about both actually. -------------------------------------------------------------------------------- James Edwin Yaro, Goldman Sachs Group, Inc., Research Division - Research Analyst [9] -------------------------------------------------------------------------------- Okay. And then just thinking about the capital advisory business. I think some peers have talked about that being an area of strength heading into 2021 as well. Maybe you could help us think about that one relative to -- in that matrix of restructuring versus M&A. Is it sort of in between those 2 or closer to 1 versus the other? -------------------------------------------------------------------------------- Scott Lee Bok, Greenhill & Co., Inc. - Chairman & CEO [10] -------------------------------------------------------------------------------- I think that business is probably more restructuring size, maybe even a little smaller than that today. But we're in the process of building that up. So I think we'd like to see capital advisory probably be more in line with restructuring in terms of sort of size of the business. I mean restructuring is going to be much more volatile. You have some real booms and busts, of course, whereas capital advisory should be probably a little bit steadier. But we do think there's quite a lot of potential in that business. We've got good pipelines in Europe and Asia. We've got some expansion ideas in the U.S. to rebuild the team and really focus on higher value-added transactions, more work for private equity sponsors as opposed to just the limited partner sale transactions from one institutional investor to another. But that's good business too, and we want to do that. But it's not as complex, large or high margin as the general partner restructuring-oriented transaction. So that's how we -- we're excited about that business as well. But again, I'd highlight, I think what really looks like it's in an extraordinary environment is the M&A business. And we're going to really focus on taking a lot of advantage of that while we continue to build out restructuring and capital advisory. -------------------------------------------------------------------------------- James Edwin Yaro, Goldman Sachs Group, Inc., Research Division - Research Analyst [11] -------------------------------------------------------------------------------- Got it. And then the last one is just maybe you could touch on the hiring environment at this point for senior bankers and how it compares to maybe 3 to 6 months ago. And then what are your aspirations for growing that business? I know a few years ago, you did sort of target growth rate for the MDs over the course of the year, but maybe you could update us on how you're thinking about that. -------------------------------------------------------------------------------- Scott Lee Bok, Greenhill & Co., Inc. - Chairman & CEO [12] -------------------------------------------------------------------------------- Yes. I'd still like to aim and obviously a pandemic is a peculiar year. But I think a part in more normal years, I'd still like to see sort of 10% managing director head count growth. Right now, I would say it's a pretty interesting environment for recruiting as it seems it always is the case on Wall Street. There is a fair amount of movement around. We're having people reach out to us. We're having headhunters reach out to us. We're having dialogues that we're initiating in quite a few different areas around the world, and I'd say, particularly in the U.S. with -- and particularly probably more M&A-oriented people, although clearly, capital advisory as well and some selected international opportunities as well. So I'm pretty optimistic this will be a significant MD recruiting year for us. -------------------------------------------------------------------------------- Operator [13] -------------------------------------------------------------------------------- The last question comes from Michael Brown with KBW. -------------------------------------------------------------------------------- Michael C. Brown, Keefe, Bruyette, & Woods, Inc., Research Division - Associate [14] -------------------------------------------------------------------------------- So I thought I would start with the fourth quarter and just wanted to kind of parse out the revenues there. Could you just share how much of the revenues were associated with deals that were pre-COVID versus transactions that were part of kind of the M&A recovery that started in the summertime? And then the second part of that question is what proportion of the revenues were from restructuring or kind of liability management-related transactions? -------------------------------------------------------------------------------- Scott Lee Bok, Greenhill & Co., Inc. - Chairman & CEO [15] -------------------------------------------------------------------------------- Okay. A few different questions there. I would say a lot -- our revenue in the fourth quarter was a mix of really 2 things. It was -- I mean, there certainly were M&A transactions that arose and had very short kind of time lines and got done very quickly. But I would say a lot of the revenue was from M&A transactions that were certainly well in process before the pandemic and then from restructuring assignments that were new to us in sort of March, April, May, when there was the big rush of opportunity. We have seen a significant pickup in M&A dialogues, I would say, starting in the fall and then ramping up through the winter. But a lot of those, of course, haven't even reached the announcement stage yet. Some of those will get announced and then closed very quickly. Others will have a little bit longer time frame to close. But I think that's a good way to describe fourth quarter 2020's revenue. As far as how much of our revenue is sort of restructuring related, if you said it -- putting aside what teams worked on and what parts of the firm and all that, but what really related to sort of a bankruptcy or a bankruptcy type or maybe a financing advisory, debt financing advisory-type role, I would say it was about probably 1/3 of our revenue for the year. I've not typically quantified that all that much, but look, this was a big year in that space, so it's worth highlighting. I don't think most investors have seen us as a firm that has that kind of scale to our restructuring business. So clearly, it's grown a lot over the last couple of years as we've invested. And I'd say, in rough terms, it's very hard, of course, to parse out at the margin what is kind of an M&A transaction versus a restructuring transaction in many cases. But I'd say if you said roughly 1/3 of our revenue in 2020 came from something related to debt restructuring, that would be a fair estimate. -------------------------------------------------------------------------------- Michael C. Brown, Keefe, Bruyette, & Woods, Inc., Research Division - Associate [16] -------------------------------------------------------------------------------- Yes. I appreciate the candor there. I know it's always challenging to split that out. And then a follow-up there. You had talked about some of the accounting you launched from the revenue recognition rule changes from a couple of years ago. And it sounded like that had a more outsized impact this quarter. Can you quantify that? And was that associated with kind of 1 transaction? Or was it a few deals? Just trying to make sure that we think about this correctly when we look at the public data and what's on your website when we think about 2021. -------------------------------------------------------------------------------- Scott Lee Bok, Greenhill & Co., Inc. - Chairman & CEO [17] -------------------------------------------------------------------------------- Sure. We've never really quantified that kind of issue, so I'd hesitate to do that now. But I'll say this. Look, I think -- I mean this change, which we had nothing to do with, of course, and no one else in our industry do as well, it just sort of was handed to us, occurred a number of years ago. So everything is apples-to-apples now. We had the same thing in the fourth quarter of the prior year, and we do in every quarter. You have -- just like we have some -- you'll know that reimbursed expenses didn't use to count as an offset against the cost. Now cost as a piece of revenue and our accounts as a piece of revenue, and that's a piece that was missing in 2020, obviously, because there weren't many expenses to get reimbursed. And then likewise, there are some nuances in terms of how revenue gets booked on completed transactions and also some deferral really of revenue on certain kinds of retainers, where you have to wait until there's kind of a completed transaction to book retainers even if you've been paid on them. So there's pluses and minuses in every given quarter. The pluses were a little higher this time around. So I wanted to make that clear to people, just so there's no confusion that it was a more material thing. But again, that's why I wanted to highlight also that this is not some sort of pulling a little revenue out of one quarter and putting it in another. I mean the EPS was more than what analysts were forecasting for 5 quarters. And as you've heard, we're pretty excited about what 2021 can bring as well. So we're hopeful for -- to build on 2020's results rather than see 2020 as something that's been diminished by the way 2020 ended for us. -------------------------------------------------------------------------------- Michael C. Brown, Keefe, Bruyette, & Woods, Inc., Research Division - Associate [18] -------------------------------------------------------------------------------- Okay. And I just had -- kind of segue to maybe one more question for me. I saw that you guys closed a large lucrative transaction earlier this week. And then what I can see from your public pipeline is that, that kind of depleted a lot of the expected revenues that we can see. Obviously, every day it changes. But you've certainly made some very constructive or bullish comments about the M&A outlook. And so what I was hoping is could you just share maybe a little more color about what you are seeing in the nonpublic pipeline for Greenhill specifically? Just to give us a glimpse of what could be coming near term as we think about the first quarter and then maybe the second quarter here. And then how do you think about the cadence of revenues in 2021? Do you expect it to become a normal year where you kind of build into the second half of the year and the fourth quarter typically being seasonally strongest? -------------------------------------------------------------------------------- Scott Lee Bok, Greenhill & Co., Inc. - Chairman & CEO [19] -------------------------------------------------------------------------------- Okay. Again, a number of things tucked into that one. I see 2021, if I had to guess today, is looking more normal than the last 2 years. The last 2 years for whatever reason, we had a very strong finish to the year. And it sort of got us to a good outcome in the fourth quarter with really a lopsided positive results in the fourth quarter. I see 2021 as being a little more normal in terms of revenue sort of spread across the year. Secondly, I would say that I think it's going to be a much more normal year in the sense of sort of a more higher granularity to the revenue, not as dependent on as few businesses like European M&A and U.K. -- or I'm sorry, U.S. restructuring, as I said, were really strong in 2020. Many other areas were very quiet. I think we're going to see much broader participation. And so when I look at our pipeline, sort of our internal pipeline of assignments, I see lots more M&A deals. I see different kinds of deals like financings. I see us, obviously, finishing up a lot of restructurings where most of the work was done last year. But they will end up closing in, call it, the first half of this year, in most cases, just given the time line those normally take. And many of those M&A transactions we're working on will have -- because they're not all huge blockbuster deals, they will have shorter approval time lines from a regulatory and shareholder point of view and, therefore, have a pretty quick move from sort of announcement to close. So if I add up all that, it's just a year of broader participation, higher granularity, at least as it looks right now. And I think that will lead to what is probably a bit more normal looking year than the last couple were. -------------------------------------------------------------------------------- Operator [20] -------------------------------------------------------------------------------- This concludes our question-and-answer session. I would like to turn the conference back over to Scott Bok, Chairman and CEO, for any closing remarks. -------------------------------------------------------------------------------- Scott Lee Bok, Greenhill & Co., Inc. - Chairman & CEO [21] -------------------------------------------------------------------------------- Okay. I'll just close by saying thank you, everybody, for your time. And I wish everybody good health as we work our way through the pandemic and look forward to speaking to you again on our next call. -------------------------------------------------------------------------------- Operator [22] -------------------------------------------------------------------------------- The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.