NEW YORK, July 29 /PRNewswire-FirstCall/ -- Highlights -- Second
Quarter Financial Summary: -- Adjusted Pro Forma Net Revenues of
$71.3 million, up 21% versus the same period in 2008 -- Adjusted
Pro Forma earnings of $3.6 million, or $0.10 per share -- Earnings
adversely affected by one-time expenses, including $8.5 million
related to the hiring of the new Chief Executive Officer and other
Corporate actions, and $3.8 million unrealized loss associated with
U.S. Private Equity portfolio company valuations -- U.S. GAAP Net
Revenues of $71.0 million, Net Loss Attributable to Evercore
Partners Inc. of $6.0 million or $0.43 per share -- #1 M&A
Advisory boutique both in the U.S. and globally -- Ralph
Schlosstein, co-founder and former President of BlackRock, joined
at the end of May as President and Chief Executive Officer; Roger
Altman to continue as Chairman and work full-time in the Advisory
business -- Advised General Motors on the largest restructuring
transaction of the year and Wyeth on the largest M&A
transaction of the year Evercore Partners Inc. (NYSE:EVR) today
announced that its Adjusted Pro Forma Net Revenues were $71.3
million and $121.9 million for the three and six months ended June
30, 2009, respectively, compared to Adjusted Pro Forma Net Revenues
of $58.9 million and $102.9 million for the three and six months
ended June 30, 2008, respectively. Adjusted Pro Forma Net Income
Attributable to Evercore Partners Inc. was $3.6 million and $5.4
million or $0.10 and $0.15 per share for the three and six months
ended June 30, 2009, respectively, compared to Adjusted Pro Forma
Net Income Attributable to Evercore Partners Inc. of $5.8 million
and $10.3 million or $0.17 and $0.30 per share for the three and
six months ended June 30, 2008, respectively. The results for the
quarter were driven by strong revenue growth in the Advisory
business, particularly restructuring. These results were offset by
one-time costs of $8.5 million associated with recruiting the new
Chief Executive Officer and other one-time Corporate actions, as
well as a $3.8 million unrealized loss relating principally to the
valuation of an energy investment in Evercore Capital Partners
("ECP") II. The combined impact of the Corporate actions and the
unrealized loss was to decrease net income by $7.1 million, or
$0.20 per share. Excluding the effect of the above items, Adjusted
Pro Forma Net Income would be $10.7 million or $0.30 per share for
the three months ended June 30, 2009. U.S. GAAP Net Revenues were
$71.0 million and $120.8 million for the three and six months ended
June 30, 2009, respectively, compared to U.S. GAAP Net Revenues of
$60.1 million and $104.6 million for the three and six months ended
June 30, 2008, respectively. U.S. GAAP Net Loss Attributable to
Evercore Partners Inc. was $6.0 million and $5.9 million or $0.43
and $0.42 per share for the three and six months ended June 30,
2009, respectively, compared to a U.S. GAAP Net Income Attributable
to Evercore Partners Inc. of $2.1 million and $1.1 million or $0.16
and $0.08 per share for the three and six months ended June 30,
2008, respectively. The U.S. GAAP net loss for the three and six
months ended June 30, 2009 reflects a previously disclosed $16.1
million charge primarily for U.S. Private Equity restructuring
related to equity that existing Senior Managing Directors have
forfeited in connection with downsizing ECP and other cost reducing
steps, in addition to the items described above. U.S. GAAP results
would reflect a profit excluding these items. Evercore's quarterly
results may fluctuate significantly due to the timing and amount of
Advisory fees earned, as well as gains or losses relating to the
Firm's Investment Management business and other factors.
Accordingly, financial results in any particular quarter may not be
representative of future results over a longer period of time. "The
results for the quarter reflect both the potential of the Evercore
franchise and the work that needs to be done to ensure that our
revenue growth is reflected in our earnings," said Ralph
Schlosstein, President and Chief Executive Officer. "Our partners
are among the very best and brightest senior advisors in the
business; a key differentiator in the marketplace. We continue to
attract new partners, broadening our capabilities in key market
sectors, with the addition of George Ackert (Transportation),
Robert Pacha (Mid-stream Energy and MLP), Mark Friedman
(Transportation, Shipping and Infrastructure) and Mark Burton
(Depository Financial Institutions). These recent additions
increase expenses and depress earnings in the short run, but should
position the firm to participate more fully in the recovery of
merger and acquisition activity when that recovery occurs." Mr.
Schlosstein continued, "Our Investment Management business results
continue to reflect the start-up nature of these businesses. While
assets under management and revenues are growing, these businesses
generate significantly less revenue than their costs, depressing
earnings and adversely affecting both our margins and our
compensation ratios. This business will receive significant
attention in the near term. Our management team is deeply committed
to ensuring that more of our revenue success is translated into
earnings growth in the coming quarters." "The business environment
for Evercore continues to be challenging," said Roger Altman,
Chairman. "But, between Ralph's joining as CEO, and the improving
financing climate, I am quite optimistic for the Firm over the
medium term. We just had a strong revenue performance but must
start converting more of that into earnings. I believe that, with
the newly strengthened management, we can do that." In the
discussion below of Evercore and the business segments, information
is presented on an adjusted pro forma basis which is a
non-generally accepted accounting principles ("non-GAAP") measure
and is unaudited. Adjusted pro forma results begin with information
prepared in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP") adjusted to
exclude certain items. Evercore believes that the disclosed
adjusted pro forma measures and any adjustments thereto, when
presented in conjunction with comparable U.S. GAAP measures, are
useful to investors to compare Evercore's results across several
periods and better reflect what management views as ongoing
operations. These measures should not be considered a substitute
for, or superior to, measures of financial performance prepared in
accordance with U.S. GAAP. For more information about the adjusted
pro forma basis of reporting used by management to evaluate the
performance of Evercore and each line of business, including
reconciliations of U.S. GAAP results to an adjusted pro forma
basis, see pages A-1 through A-9 included in Annex I. These
adjusted pro forma amounts are allocated to the Company's two
business segments: Advisory and Investment Management. Consolidated
Adjusted Pro Forma and U.S. GAAP Results Three Months Ended June
30, ----------------------------------------------------- Adjusted
Pro Forma U.S. GAAP -------------------------
------------------------- % % 2009 2008 Change 2009 2008 Change
------- ------- ------ ------- ------- ------ (dollars in
thousands) Net Revenues (1) $71,312 $58,865 21% $71,043 $60,118 18%
------- ------- ------- ------- Expenses: Employee Compensation and
Benefits 51,859 38,512 35% 51,859 38,512 35% Non-compensation Costs
(1) 13,376 10,699 25% 32,121 13,737 134% ------ ------ ------
------ Total Expenses 65,235 49,211 33% 83,980 52,249 61% ------
------ ------ ------ Operating Income (Loss) 6,077 9,654 (37%)
(12,937) 7,869 NM Interest Expense on Long-term Debt (2) 1,897 - NM
- - NM ----- --- --- --- Pre-Tax Income (Loss) 4,180 9,654 (57%)
(12,937) 7,869 NM Provision for Income Taxes 1,757 3,877 (55%)
1,373 2,461 (44%) ----- ----- ----- ----- Net Income (Loss) 2,423
5,777 (58%) (14,310) 5,408 NM Noncontrolling Interest (1,127) - NM
(8,267) 3,352 NM ------ --- ------ ----- Net Income (Loss)
Attributable to Evercore Partners Inc. $3,550 $5,777 (39%) $(6,043)
$2,056 NM ====== ====== ======= ====== Earnings (Loss) Per Share
$0.10 $0.17 (41%) $(0.43) $0.16 NM ===== ===== ====== ===== Six
Months Ended June 30,
------------------------------------------------------ Adjusted Pro
Forma U.S. GAAP --------------------------
-------------------------- % % 2009 2008 Change 2009 2008 Change
-------- -------- ------- -------- -------- ------ (dollars in
thousands) Net Revenues (1) $121,918 $102,900 18% $120,769 $104,606
15% -------- -------- -------- -------- Expenses: Employee
Compensation and Benefits 87,713 64,315 36% 87,713 71,767 22%
Non-compensation Costs (1) 24,023 22,478 7% 44,538 27,572 62%
------ ------ ------ ------ Total Expenses 111,736 86,793 29%
132,251 99,339 33% ------- ------ ------- ------ Operating Income
(Loss) 10,182 16,107 (37%) (11,482) 5,267 NM Interest Expense on
Long-term Debt (2) 3,789 - NM - - NM ----- --- --- --- Pre-Tax
Income (Loss) 6,393 16,107 (60%) (11,482) 5,267 NM Provision for
Income Taxes 2,693 5,835 (54%) 2,431 2,167 12% ----- ----- -----
----- Net Income (Loss) 3,700 10,272 (64%) (13,913) 3,100 NM
Noncontrolling Interest (1,655) - NM (8,061) 2,009 NM ------ ---
------ ----- Net Income (Loss) Attributable to Evercore Partners
Inc. $5,355 $10,272 (48%) $(5,852) $1,091 NM ====== ======= =======
====== Earnings (Loss) Per Share $0.15 $0.30 (50%) $(0.42) $0.08 NM
===== ===== ====== ===== (1) For Adjusted Pro Forma purposes
reimbursable client related expenses and expenses associated with
revenue sharing arrangements with third parties have been presented
as a reduction from the associated Non- compensation Costs for all
periods. In prior years, such amounts were included in Net
Revenues. Included in the U.S. GAAP non- compensation costs are
Special Charges which are discussed further under "Other U.S. GAAP
Expenses." (2) Interest Expense on Long-term Debt represents
interest expense on the Senior Notes and is presented below
Operating Income (Loss) on an Adjusted Pro Forma basis. Business
Line Reporting A discussion of Adjusted Pro Forma revenues and
expenses is presented below for the Advisory and Investment
Management segments. Unless otherwise stated, all the financial
measures presented in this discussion are Adjusted Pro Forma
measures. Advisory Evercore continues to strengthen its Advisory
business adding high quality partners, expanding its industry
coverage (transportation and infrastructure, midstream oil and gas,
shipping and depository financial institutions) and geographic
coverage (opening a Houston office), and enhancing its
restructuring business, which is now among the market leaders.
Three Months Ended Six Months Ended June 30, June 30,
-------------------------- ------------------------- 2009 2008 %
Change 2009 2008 % Change ------- ------- -------- ------- -------
--------- (dollars in thousands) Net Revenues: Advisory (1) $68,439
$56,566 21% $116,488 $96,964 20% Other Revenue, net (71) 727 NM 531
1,509 (65%) --- --- --- ----- Net Revenues 68,368 57,293 19%
117,019 98,473 19% ------ ------ ------- ------ Expenses: Employee
Compensation and Benefits 39,682 34,095 16% 68,894 55,232 25%
Non-compensation Costs (1) 8,468 8,313 2% 15,759 17,977 (12%) -----
----- ------ ------ Total Expenses 48,150 42,408 14% 84,653 73,209
16% ------ ------ ------ ------ Adjusted Pro Forma Operating Income
20,218 14,885 36% 32,366 25,264 28% Interest Expense on Long-term
Debt (2) 683 - NM 683 - NM --- --- --- --- Adjusted Pro Forma
Pre-Tax Income $19,535 $14,885 31% $31,683 $25,264 25% =======
======= ======= ======= (1) Reimbursable client related expenses
and expenses associated with revenue sharing arrangements with
third parties have been presented as a reduction from the
associated Non-compensation Costs for all periods. In prior years,
such amounts were included in Net Revenues. (2) Interest expense
related to the Senior Notes is presented in Interest Expense on
Long-term Debt in order to clearly reflect the operating results of
the business. Revenues Advisory revenue was $68.4 million and
$117.0 million for the three and six months ended June 30, 2009,
respectively, compared to $57.3 million and $98.5 million for the
three and six months ended June 30, 2008, respectively. The
increase in revenues reflects the growing contribution from
restructuring assignments including General Motors, MGM Mirage,
LyondellBasell and CIT Group and participation on prominent
advisory transactions including advising Frontier Communications on
its transaction with Verizon Communications, and in the first
quarter, advising Wyeth on its proposed transaction with Pfizer.
Industry-wide M&A volumes continue to be down from 2008 levels
with the dollar value of global completed M&A transactions down
48% and U.S. completed M&A transactions down 29% during the
first six months of 2009 over the prior year according to
ThomsonReuters. Restructuring activity levels remain high.
According to ThomsonReuters, among boutiques, Evercore was ranked
number one both globally and in the U.S. as measured by the value
of announced transactions during the first half of 2009. The
Company earned Advisory revenues in excess of $1 million from ten
clients during the second quarter of 2009, down slightly from the
second quarter of 2008 but up from seven last quarter. The number
of fee paying clients for the first half of 2009 grew to 103 in
comparison with 97 in the first half of 2008. Expenses Compensation
costs for the Advisory segment for the three and six months ended
June 30, 2009, were $39.7 million and $68.9 million, respectively,
up from $34.1 million and $55.2 million for the three and six
months ended June 30, 2008, respectively. The year-on-year increase
in compensation is due to higher revenues earned this quarter and
the impact of new senior executive hires. For the three and six
months ended June 30, 2009, Evercore's Advisory compensation ratio
was 58.0% and 58.9%, respectively, versus the compensation ratio
reported for the three and six months ended June 30, 2008 of 59.5%
and 56.1%, respectively. Excluding stock compensation costs of $3.8
million and $7.5 million for the three and six months ended June
30, 2009, respectively, related to new Advisory Senior Managing
Directors(1), the ratio would have been 52.5% for both periods.
Non-compensation costs for the three months ended June 30, 2009 of
$8.5 million increased slightly from the same period last year due
to higher professional and regulatory filing fees. Through the
first six months of the year, non-compensation expenses declined
12% from the same period last year driven by lower travel and
professional fees and reflecting our ongoing focus on cost control.
(1) Defined as Senior Managing Directors hired in the past
twenty-four months Investment Management The results for the
Investment Management business reflect the start-up nature of
operations for many of the segment's operating units and the
restructuring of its U.S. Private Equity business as disclosed in
the first quarter. Assets under management ("AUM") grew to
approximately $3 billion, including AUM from the Wealth Management
business of $1 billion. These new business initiatives, including
the acquisition of Bank of America's Special Fiduciary Services
("SFS") business, the consolidation of the results of Evercore
Asset Management and the ongoing growth of Evercore Wealth
Management drove the growth in revenues and expenses for the three
and six month periods. Three Months Ended Six Months Ended June 30,
June 30, ------------------------ ------------------------- % %
2009 2008 Change 2009 2008 Change ------- ------- ------ -------
------- -------- (dollars in thousands) Net Revenues: Private
Equity (1) $(1,812) $3,305 NM $(342) $5,431 NM Institutional Asset
Management 3,450 (1,603) NM 2,380 (1,314) NM Wealth Management 522
- NM 688 - NM --- - --- - Investment Management Revenues 2,160
1,702 27% 2,726 4,117 (34%) Other Revenue, net (2) 784 (130) NM
2,173 310 601% --- ---- ----- --- Net Revenues 2,944 1,572 87%
4,899 4,427 11% ----- ----- ----- ----- Expenses: Employee
Compensation and Benefits 12,177 4,417 176% 18,819 9,083 107%
Non-compensation Costs (1) 4,908 2,386 106% 8,264 4,501 84% -----
----- ----- ----- Total Expenses 17,085 6,803 151% 27,083 13,584
99% ------ ----- ------ ------ Adjusted Pro Forma Operating Income
(Loss) (14,141) (5,231) (170%) (22,184) (9,157) (142%) Interest
Expense on Long-term Debt (2) 1,214 - NM 3,106 - NM ----- - ----- -
Adjusted Pro Forma Pre-Tax Income (Loss) $(15,355) $(5,231) (194%)
$(25,290) $(9,157) (176%) ======== ======= ======== ======= (1)
Reimbursable client related expenses have been presented as a
reduction from the associated Non-compensation Costs for all
periods. In prior years, such amounts were included in Net
Revenues. (2) Other Revenue, net includes interest income and
expense on short-term reverse repurchase and repurchase agreements.
Interest expense related to the Senior Notes is presented in
Interest Expense on Long- term Debt in order to clearly reflect the
operating results of the business. Investment Management Revenue
Components Three Months Ended Six Months Ended
--------------------------- --------------------------- % % 2Q 2009
2Q 2008 Change 2Q 2009 2Q 2008 Change ------- ------- ------
------- ------- ------ Management Fees (dollars in thousands)
Wealth Management $707 $- NM $1,077 $- NM Institutional Asset
Management 3,311 561 490% 4,316 2,018 114% Private Equity 2,002
1,934 4% 4,149 3,753 11% ----- ----- ----- ----- Total Management
Fees 6,020 2,495 141% 9,542 5,771 65% ----- ----- ----- -----
Realized and Unrealized Gains Institutional Asset Management 139
(2,089) NM (682) (3,057) 78% Private Equity (3,814) 1,371 NM
(4,491) 1,678 NM ------ ----- ------ ----- Total Realized and
Unrealized Gains (3,675) (718) (412%) (5,173) (1,379) (275%) ------
---- ------ ------ Highview - - NM (920) - NM Equity in EAM Losses
- (75) NM (334) (275) (21%) Equity in Pan Losses (185) - NM (389) -
NM ---- --- ---- --- Investment Management Revenues $2,160 $1,702
27% $2,726 $4,117 (34%) ====== ====== ====== ====== Revenues
Management Fees earned from the management of client portfolios and
other investment advisory services increased by 141% and 65% for
the three and six months ended June 30, 2009 compared to the prior
periods. The growth was driven by the new business initiatives.
Revenue growth from management fees was offset by mark-to-market
losses relating to investments in the private equity funds we
sponsor. During the second quarter and first half of 2009 the
Company recognized a loss of $3.8 million and $4.5 million,
respectively, relating principally to a reduction in carrying value
of an energy investment in ECP II due to the weak commodity price
environment and the associated reversal in previously recognized
carried interest income. At June 30, 2009, Evercore had $11.9
million invested in the private equity funds it sponsors, which
includes $0.5 million of previously recognized carry. Expenses The
growth in expenses was driven by the acquisition of the SFS
business, the consolidation of EAM and the growth of the Wealth
Management business, as well as the impact of Corporate actions.
Other U.S. GAAP Expenses Included in the three and six months ended
June 30, 2009 and 2008 U.S. GAAP results are the following expenses
that have been excluded from the Adjusted Pro Forma results: --
$16.1 million of Special Charges for the three months ended June
30, 2009 incurred in conjunction with Evercore's decision to
suspend capital raising for ECP and other ongoing strategic cost
management initiatives. The charge relates to the expense required
to be recorded under U.S. GAAP for stock-based compensation awards
that are voluntarily forfeited by employees who remain with the
Company. During the second quarter of 2009 employees voluntarily
forfeited 416,878 unvested restricted stock units and 250,230
Evercore LP partnership units. -- In addition, the Company incurred
$1.3 million and $2.4 million of charges for the three and six
months ended June 30, 2008, respectively, as Special Charges in
connection with employee severance, accelerated share-based
vesting, facilities costs associated with the closing of the Los
Angeles office and the write-off of certain capitalized costs
associated with capital raising initiatives for ECP. -- The
amortization of intangibles associated with the acquisitions of
Protego, Braveheart, SFS and EAM. -- $7.5 million in expense
included in Employee Compensation and Benefits for the six months
ended June 30, 2008, resulting from the issuance of shares as
additional deferred consideration pursuant to the Sale and Purchase
Agreement associated with the Braveheart acquisition. This was the
final payment relating to this acquisition. -- $0.4 million and
$0.7 million of charges for the three and six months ended June 30,
2009, respectively, as Acquisition and Transition Costs for costs
incurred in connection with the acquisition of SFS and formation of
Evercore Trust Company. This charge reflects the change in
accounting for deal-related costs required by SFAS No. 141(R),
Business Combinations, which was effective January 1, 2009. In
addition, reimbursable client related expenses and expenses
associated with revenue sharing engagements with third parties have
been presented as a reduction from Revenues and the associated
Non-compensation costs of $1.6 million and $2.6 million in the
Adjusted Pro Forma results for the three and six months ended June
30, 2009, respectively, and $1.3 million and $1.7 million for the
three and six months ended June 30, 2008, respectively. Income
Taxes For the three and six months ended June 30, 2009, Evercore's
adjusted pro forma effective tax rate was approximately 42% for
both periods compared to an effective tax rate of approximately 40%
and 36% for the three and six months ended June 30, 2008,
respectively. The adjusted pro forma effective tax rate assumes
that the Company has adopted a conventional corporate tax structure
and is taxed as a C Corporation in the U.S. at the prevailing
corporate rate, that all deferred tax assets relating to foreign
operations are fully realizable within that structure on a
consolidated basis and that adjustments for deferred tax assets
related to tax deductions for equity-based compensation awards are
made directly to stockholders' equity. Balance Sheet The Company
continues to maintain a strong balance sheet, holding liquid assets
available for operations and investments of $271 million at June
30, 2009. Amounts due related to the Long-Term Notes Payable were
$96 million. During the quarter the Company repurchased
approximately 65,000 shares of Class A common stock pursuant to the
net settlement of stock-based compensation awards. Dividend On July
27, 2009 the Board of Directors of Evercore declared a quarterly
dividend of $0.12 per share to be paid on September 11, 2009 to
common stockholders of record on August 28, 2009. Equity
Arrangements On July 27, 2009, the limited partnership agreement of
Evercore LP was amended and restated for the primary purpose of
better aligning employees' interests with shareholders' interests.
In particular, the event-based vesting terms for unvested
partnership units that were triggered if two of the three Evercore
founders did not continue to be employed by or serve as a director
of the Company or its affiliates or if two founders and certain
affiliated entities ceased to beneficially own a specified
percentage of their Evercore equity, were deleted and replaced with
more traditional time-based vesting provisions. The unvested
partnership units will now vest ratably on December 31, 2011, 2012
and 2013 so long as the equity holder remains employed with
Evercore on such dates. In addition, to better manage Evercore's
public float and equity overhang, the transfer restrictions, which
previously specified August 11, 2011 as the date when most vested
partnership units would be permitted to be exchanged for shares of
Class A Common stock have been amended to provide for a release of
the transfer restrictions on vested partnership units in 20%
increments on each of December 31, 2009, 2010, 2011, 2012 and 2013.
In conjunction with these changes, the Company also adopted minimum
equity ownership guidelines for all Senior Managing Directors.
Conference Call Evercore will host a conference call to discuss its
results for the second quarter on Wednesday, July 29, 2009, at 8:00
a.m. Eastern Time with access available via the Internet and
telephone. Investors and analysts may participate in the live
conference call by dialing (877) 941-6013 (toll-free domestic) or
(480) 629-9738 (international); passcode: 4118644. Please register
at least 10 minutes before the conference call begins. A replay of
the call will be available for one week via telephone starting
approximately one hour after the call ends. The replay can be
accessed at (800) 406-7325 (toll-free domestic) or (303) 590-3030
(international); passcode: 4118644. A live webcast of the
conference call will be available on the Investor Relations section
of Evercore's Web site at http://www.evercore.com/. The webcast
will be archived on Evercore's Web site for 30 days after the call.
About Evercore Partners Evercore Partners is a leading investment
banking boutique and investment management firm. Evercore's
Advisory business counsels its clients on mergers, acquisitions,
divestitures, restructurings and other strategic transactions.
Evercore's Investment Management business comprises wealth
management, institutional asset management and private equity
investing. Evercore serves a diverse set of clients around the
world from its offices in New York, San Francisco, Boston,
Washington D.C., Los Angeles, Houston, London, Mexico City and
Monterrey, Mexico. More information about Evercore can be found on
the Company's Web site at http://www.evercore.com/. EVR-X Basis of
Alternative Financial Statement Presentation Adjusted pro forma
results are a non-GAAP measure. Evercore believes that the
disclosed adjusted pro forma measures and any adjustments thereto,
when presented in conjunction with comparable U.S. GAAP measures,
are useful to investors to compare Evercore's results across
several periods and better reflect what management views as ongoing
operations. These measures should not be considered a substitute
for, or superior to, measures of financial performance prepared in
accordance with U.S. GAAP. A reconciliation of U.S. GAAP results to
adjusted pro forma results is presented in the tables included in
Annex I. Forward-Looking Statements This release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934, which reflect our current views with respect to, among
other things, Evercore's operations and financial performance. In
some cases, you can identify these forward-looking statements by
the use of words such as "outlook", "believes", "expects",
"potential", "continues", "may", "will", "should", "seeks",
"approximately", "predicts", "intends", "plans", "estimates",
"anticipates" or the negative version of these words or other
comparable words. All statements other than statements of
historical fact included in this presentation are forward-looking
statements and are based on various underlying assumptions and
expectations and are subject to known and unknown risks,
uncertainties and assumptions, and may include projections of our
future financial performance based on our growth strategies and
anticipated trends in Evercore's business. Accordingly, there are
or will be important factors that could cause actual outcomes or
results to differ materially from those indicated in these
statements. Evercore believes these factors include, but are not
limited to, those described under "Risk Factors" discussed in
Evercore's Annual Report on Form 10-K for the year ended December
31, 2008 and subsequent quarterly reports on Form 10-Q. These
factors should not be construed as exhaustive and should be read in
conjunction with the other cautionary statements that are included
in this release. In addition, new risks and uncertainties emerge
from time to time, and it is not possible for Evercore to predict
all risks and uncertainties, nor can Evercore assess the impact of
all factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
Accordingly, you should not rely upon forward-looking statements as
a prediction of actual results and Evercore does not assume any
responsibility for the accuracy or completeness of any of these
forward-looking statements. Evercore undertakes no obligation to
publicly update or review any forward-looking statement, whether as
a result of new information, future developments or otherwise. With
respect to any securities offered by any private equity fund
referenced herein, such securities have not been and will not be
registered under the Securities Act of 1933, as amended, and may
not be offered or sold in the United States absent registration or
an applicable exemption from registration requirements. ANNEX I
Schedule Page Number Unaudited Condensed Consolidated Statements of
Operations A-1 for the Three and Six Months Ended June 30, 2009 and
2008 Adjusted Pro Forma: Adjusted Pro Forma Results A-2 Unaudited
Condensed Consolidated Adjusted Pro Forma A-3 Statement of
Operations for the Three Months Ended June 30, 2009 Unaudited
Condensed Consolidated Adjusted Pro Forma A-4 Statement of
Operations for the Three Months Ended June 30, 2008 Unaudited
Condensed Consolidated Adjusted Pro Forma A-5 Statement of
Operations for the Six Months Ended June 30, 2009 Unaudited
Condensed Consolidated Adjusted Pro Forma A-6 Statement of
Operations for the Six Months Ended June 30, 2008 Adjusted Pro
Forma Segment Reconciliation to U.S. GAAP A-7 for the Three Months
ended June 30, 2009 and 2008 Adjusted Pro Forma Segment
Reconciliation to U.S. GAAP A-8 for the Six Months ended June 30,
2009 and 2008 Notes to Unaudited Condensed Consolidated Adjusted
Pro A-9 Forma Statements of Operations EVERCORE PARTNERS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS THREE AND SIX
MONTHS ENDED JUNE 30, 2009 AND 2008 (dollars in thousands, except
per share data) (UNAUDITED) Three Months Six Months Ended June 30,
Ended June 30, ---------------- --------------- 2009 2008 2009 2008
------- ------- ------ ------- REVENUES Advisory Revenue $70,067
$57,731 $119,125 $98,423 Investment Management Revenue 2,160 1,790
2,729 4,364 Other Revenue 5,025 7,709 13,615 14,923 ----- -----
------ ------ TOTAL REVENUES 77,252 67,230 135,469 117,710 Interest
Expense (1) 6,209 7,112 14,700 13,104 ----- ----- ------ ------ NET
REVENUES 71,043 60,118 120,769 104,606 ------ ------ -------
------- EXPENSES Employee Compensation and Benefits 51,859 38,512
87,713 71,767 Occupancy and Equipment Rental 3,476 3,062 6,638
6,372 Professional Fees 5,114 3,795 8,938 7,272 Travel and Related
Expenses 2,457 2,378 4,055 5,122 Communications and Information
Services 955 731 1,689 1,373 Depreciation and Amortization 1,141
1,055 2,198 2,136 Special Charges 16,138 1,310 16,138 2,437
Acquisition and Transition Costs 422 - 712 - Other Operating
Expenses 2,418 1,406 4,170 2,860 ----- ----- ----- ----- TOTAL
EXPENSES 83,980 52,249 132,251 99,339 ------ ------ ------- ------
INCOME (LOSS) BEFORE INCOME TAXES (12,937) 7,869 (11,482) 5,267
Provision for Income Taxes 1,373 2,461 2,431 2,167 ----- -----
----- ----- NET INCOME (LOSS) (14,310) 5,408 (13,913) 3,100 Net
Income (Loss) Attributable to Noncontrolling Interest (8,267) 3,352
(8,061) 2,009 ------ ----- ------ ----- NET INCOME (LOSS)
ATTRIBUTABLE TO EVERCORE PARTNERS INC. $(6,043) $2,056 $(5,852)
$1,091 ======= ====== ======= ====== Net Income (Loss) Attributable
to Evercore Partners Inc. Common Shareholders $(6,043) $2,056
$(5,852) $1,091 Weighted Average Shares of Class A Common Stock
Outstanding: Basic 13,925 12,895 13,814 12,826 Diluted 13,925
13,171 13,814 13,057 Net Income (Loss) Per Share Attributable to
Evercore Partners Inc. Common Shareholders: Basic $(0.43) $0.16
$(0.42) $0.09 Diluted $(0.43) $0.16 $(0.42) $0.08 (1) Includes
interest expense on long-term debt and interest expense on
short-term repurchase agreements. Adjusted Pro Forma Results
Evercore prepares its Condensed Consolidated Financial Statements
using U.S. GAAP. In addition to analyzing the Company's results on
a U.S. GAAP basis, management reviews the Company's and business
segments' results on an adjusted pro forma basis, which is a
non-GAAP financial measure. These measures should not be considered
a substitute for, or superior to, measures of financial performance
prepared in accordance with U.S. GAAP. The adjusted pro forma
results reflect the following adjustments, which management
believes are not reflective of ongoing operations, and therefore
exclusion of these charges enhances understanding of the Company's
operating performance. Exclusion of deferred consideration related
to Braveheart acquisition. The former shareholders of Braveheart
were issued $7.5 million of restricted stock in the first quarter
of 2008 as additional deferred consideration pursuant to the Sale
and Purchase Agreement associated with the Braveheart acquisition.
Special Charges. The Company has reflected charges in conjunction
with the Company's decision to suspend capital raising for ECP and
other ongoing strategic cost management initiatives. The charge
relates to the expense required to be recorded under U.S. GAAP for
stock-based compensation awards that are voluntarily forfeited by
employees who remain with the Company. During the second quarter of
2009 employees voluntarily forfeited 416,878 unvested restricted
stock units and 250,230 partnership units. The Company has
reflected charges for the three and six months ended June 30, 2008
as Special Charges in connection with employee severance,
accelerated share-based vesting, facilities costs associated with
the closing of the Los Angeles office and the write-off of certain
capitalized costs associated with fundraising initiatives for ECP.
Evercore expects to realize cost savings in the future due to these
changes. Acquisition and Transition Costs. The Company has
reflected Acquisition and Transition Costs for costs incurred in
connection with the acquisition of SFS and the formation of ETC.
This charge reflects the change in accounting for deal-related
costs required by SFAS No. 141(R), Business Combinations, which was
effective January 1, 2009. Exclusion of amortization of intangible
assets acquired with Protego, Braveheart, SFS and EAM. The Protego
acquisition was undertaken in contemplation of the IPO. The
Braveheart acquisition occurred on December 19, 2006. Also excluded
is amortization of intangible assets associated with the recent
acquisitions of SFS and EAM. Client Expenses. The Company has
reflected the reclassification of reimbursable expenses and
expenses associated with revenue sharing engagements with third
parties from revenue. Vesting of unvested equity. Management
believes that it is useful to provide the per-share effect
associated with the vesting of previously granted but unvested
equity, and thus the adjusted pro forma results reflect the vesting
of all unvested event-based Evercore LP partnership units and
stock-based awards. However, management has concluded that at the
current time it is not probable that the conditions relating to the
vesting of the remaining event-based unvested stock-based awards
will be achieved or satisfied. The unaudited condensed consolidated
adjusted pro forma financial information is included for
informational purposes only and should not be relied upon as being
indicative of the Company's results of operations or financial
condition had the transactions contemplated in connection with the
internal reorganization been completed on the dates assumed. The
unaudited condensed consolidated adjusted pro forma financial
information also does not project the results of operations or
financial position for any future period or date. EVERCORE PARTNERS
INC. CONDENSED CONSOLIDATED ADJUSTED PRO FORMA STATEMENT OF
OPERATIONS THREE MONTHS ENDED JUNE 30, 2009 (dollars in thousands,
except per share data) (UNAUDITED) Evercore Evercore Partners
Partners Inc. Inc. U.S. Pro Forma Adjusted GAAP Adjustments Pro
Forma --------- ------------ --------- REVENUES Advisory Revenue
$70,067 $(1,628)(a) $68,439 Investment Management Revenue 2,160 -
2,160 Other Revenue 5,025 (4,312)(b) 713 ----- ------ --- TOTAL
REVENUES 77,252 (5,940) 71,312 Interest Expense 6,209 (6,209)(b) -
----- ------ --- NET REVENUES 71,043 269 71,312 ------ --- ------
EXPENSES Employee Compensation and Benefits 51,859 - 51,859
Occupancy and Equipment Rental 3,476 - 3,476 Professional Fees
5,114 (743)(a) 4,371 Travel and Related Expenses 2,457 (791)(a)
1,666 Communications and Information Services 955 (21)(a) 934
Depreciation and Amortization 1,141 (557)(c) 584 Special Charges
16,138 (16,138)(d) - Acquisition and Transition Costs 422 (422)(e)
- Other Operating Expenses 2,418 (73)(a) 2,345 ----- --- -----
TOTAL EXPENSES 83,980 (18,745) 65,235 ------ ------- ------ INCOME
(LOSS) BEFORE INTEREST EXPENSE ON LONG-TERM DEBT AND INCOME TAXES
(12,937) 19,014 6,077 Interest Expense on Long-term Debt - 1,897
(b) 1,897 --- ----- ----- INCOME (LOSS) BEFORE INCOME TAXES
(12,937) 17,117 4,180 Provision for Income Taxes 1,373 384 (f)
1,757 ----- --- ----- NET INCOME (LOSS) (14,310) 16,733 2,423 Net
Income (Loss) Attributable to Noncontrolling Interest (8,267) 7,140
(g) (1,127) ------ ----- ------ NET INCOME (LOSS) ATTRIBUTABLE TO
EVERCORE PARTNERS INC. $(6,043) $9,593 $3,550 ======= ====== ======
Adjusted Class A Common Stock Outstanding Basic and Diluted
Weighted Average Shares of Class A Common Stock Outstanding 12,296
- 12,296 Vested Partnership Units - 15,386 (h) 15,386 Unvested
Partnership Units - 4,603 (h) 4,603 Vested Restricted Stock Units -
Event Based 1,209 - 1,209 Unvested Restricted Stock Units - Event
Based - 780 (h) 780 Vested Restricted Stock Units - Service Based
420 - 420 Unvested Restricted Stock Units - Service Based - 911 (h)
911 Unvested Restricted Stock - Service Based - 86 (h) 86 - -- --
Total Shares 13,925 21,766 35,691 ====== ====== ====== Net Income
(Loss) Per Share Attributable to Evercore Partners Inc. Common
Shareholders: Basic $(0.43) $0.10 Diluted $(0.43) $0.10 EVERCORE
PARTNERS INC. CONDENSED CONSOLIDATED ADJUSTED PRO FORMA STATEMENT
OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2008 (dollars in
thousands, except per share data) (UNAUDITED) Evercore Evercore
Partners Partners Inc. Inc. U.S. Pro Forma Adjusted GAAP
Adjustments Pro Forma --------- ------------ --------- REVENUES
Advisory Revenue $57,731 $(1,165) (a) $56,566 Investment Management
Revenue 1,790 (88) (a) 1,702 Other Revenue 7,709 (7,112) (b) 597
----- ------ --- TOTAL REVENUES 67,230 (8,365) 58,865 Interest
Expense 7,112 (7,112) (b) - ----- ------ --- NET REVENUES 60,118
(1,253) 58,865 ------ ------ ------ EXPENSES Employee Compensation
and Benefits 38,512 - 38,512 Occupancy and Equipment Rental 3,062 -
3,062 Professional Fees 3,795 (857) (a) 2,938 Travel and Related
Expenses 2,378 (330) (a) 2,048 Communications and Information
Services 731 (12) (a) 719 Depreciation and Amortization 1,055 (475)
(c) 580 Special Charges 1,310 (1,310) (d) - Acquisition and
Transition Costs - - - Other Operating Expenses 1,406 (54) (a)
1,352 ----- --- ----- TOTAL EXPENSES 52,249 (3,038) 49,211 ------
------ ------ INCOME BEFORE INTEREST EXPENSE ON LONG-TERM DEBT AND
INCOME TAXES 7,869 1,785 9,654 Interest Expense on Long- term Debt
- - - - - - INCOME BEFORE INCOME TAXES 7,869 1,785 9,654 Provision
for Income Taxes 2,461 1,416 (f) 3,877 ----- ----- ----- NET INCOME
5,408 369 5,777 Net Income (Loss) Attributable to Noncontrolling
Interest 3,352 (3,352)(g) - ----- ------ --- NET INCOME
ATTRIBUTABLE TO EVERCORE PARTNERS INC. $2,056 $3,721 $5,777 ======
====== ====== Adjusted Class A Common Stock Outstanding Basic and
Diluted Weighted Average Shares of Class A Common Stock Outstanding
11,458 - 11,458 Vested Partnership Units - 15,205 (h) 15,205
Unvested Partnership Units 77 4,776 (h) 4,853 Vested Restricted
Stock Units -Event Based 1,210 - 1,210 Unvested Restricted Stock
Units - Event Based - 827 (h) 827 Vested Restricted Stock Units -
Service Based 227 - 227 Unvested Restricted Stock Units - Service
Based 8 - 8 Unvested Restricted Stock -Service Based 191 - 191 ---
--- --- Total Shares 13,171 20,808 33,979 ====== ====== ====== Net
Income Per Share Attributable to Evercore Partners Inc. Common
Shareholders: Basic $0.16 $0.17 Diluted $0.16 $0.17 EVERCORE
PARTNERS INC. CONDENSED CONSOLIDATED ADJUSTED PRO FORMA STATEMENT
OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2009 (dollars in thousands,
except per share data) (UNAUDITED) Evercore Evercore Partners
Partners Inc. Inc. U.S. Pro Forma Adjusted GAAP Adjustments Pro
Forma ----------- ----------- --------- REVENUES Advisory Revenue
$119,125 $(2,637)(a) $116,488 Investment Management Revenue 2,729
(3)(a) 2,726 Other Revenue 13,615 (10,911)(b) 2,704 ------ -------
----- TOTAL REVENUES 135,469 (13,551) 121,918 Interest Expense
14,700 (14,700)(b) - ------ ------- --- NET REVENUES 120,769 1,149
121,918 ------- ----- ------- EXPENSES Employee Compensation and
Benefits 87,713 - 87,713 Occupancy and Equipment Rental 6,638 -
6,638 Professional Fees 8,938 (1,212)(a) 7,726 Travel and Related
Expenses 4,055 (1,223)(a) 2,832 Communications and Information
Services 1,689 (38)(a) 1,651 Depreciation and Amortization 2,198
(1,025)(c) 1,173 Special Charges 16,138 (16,138)(d) - Acquisition
and Transition Costs 712 (712)(e) - Other Operating Expenses 4,170
(167)(a) 4,003 ----- ---- ----- TOTAL EXPENSES 132,251 (20,515)
111,736 ------- ------- ------- INCOME (LOSS) BEFORE INTEREST
EXPENSE ON LONG-TERM DEBT AND INCOME TAXES (11,482) 21,664 10,182
Interest Expense on Long-term Debt - 3,789 (b) 3,789 - ----- -----
INCOME (LOSS) BEFORE INCOME TAXES (11,482) 17,875 6,393 Provision
for Income Taxes 2,431 262 (f) 2,693 ----- --- ----- NET INCOME
(LOSS) (13,913) 17,613 3,700 Net Income (Loss) Attributable to
Noncontrolling Interest (8,061) 6,406 (g) (1,655) ------ -----
------ NET INCOME (LOSS) ATTRIBUTABLE TO EVERCORE PARTNERS INC.
$(5,852) $11,207 $5,355 ======= ======= ====== Adjusted Class A
Common Stock Outstanding Basic and Diluted Weighted Average Shares
of Class A Common Stock Outstanding 12,212 - 12,212 Vested
Partnership Units - 15,132 (h) 15,132 Unvested Partnership Units -
4,603 (h) 4,603 Vested Restricted Stock Units - Event Based 1,209 -
1,209 Unvested Restricted Stock Units - Event Based - 780 (h) 780
Vested Restricted Stock Units - Service Based 393 - 393 Unvested
Restricted Stock Units - Service Based - 575 (h) 575 Unvested
Restricted Stock - Service Based - 80 (h) 80 --- --- --- Total
Shares 13,814 21,170 34,984 ====== ====== ====== Net Income (Loss)
Per Share Attributable to Evercore Partners Inc. Common
Shareholders: Basic $(0.42) $0.15 Diluted $(0.42) $0.15 EVERCORE
PARTNERS INC. CONDENSED CONSOLIDATED ADJUSTED PRO FORMA STATEMENT
OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2008 (dollars in thousands,
except per share data) (UNAUDITED) Evercore Evercore Partners
Partners Inc. Inc. Adjusted U.S. Pro Forma Pro GAAP Adjustments
Forma -------- ----------- --------- REVENUES Advisory Revenue
$98,423 $(1,459)(a) $96,964 Investment Management Revenue 4,364
(247)(a) 4,117 Other Revenue 14,923 (13,104)(b) 1,819 ------
------- ----- TOTAL REVENUES 117,710 (14,810) 102,900 Interest
Expense 13,104 (13,104)(b) - ------ ------- --- NET REVENUES
104,606 (1,706) 102,900 ------- ------ ------- EXPENSES Employee
Compensation and Benefits 71,767 (7,452)(i) 64,315 Occupancy and
Equipment Rental 6,372 - 6,372 Professional Fees 7,272 (1,065)(a)
6,207 Travel and Related Expenses 5,122 (515)(a) 4,607
Communications and Information Services 1,373 (28)(a) 1,345
Depreciation and Amortization 2,136 (951)(c) 1,185 Special Charges
2,437 (2,437)(d) - Acquisition and Transition Costs - - - Other
Operating Expenses 2,860 (98)(a) 2,762 ----- --- ----- TOTAL
EXPENSES 99,339 (12,546) 86,793 ------ ------- ------ INCOME BEFORE
INTEREST EXPENSE ON LONG-TERM DEBT AND INCOME TAXES 5,267 10,840
16,107 Interest Expense on Long-term Debt - - - --- --- --- INCOME
BEFORE INCOME TAXES 5,267 10,840 16,107 Provision for Income Taxes
2,167 3,668 (f) 5,835 ----- ----- ----- NET INCOME 3,100 7,172
10,272 Net Income Attributable to Noncontrolling Interest 2,009
(2,009)(g) - ----- ------ --- NET INCOME ATTRIBUTABLE TO EVERCORE
PARTNERS INC. $1,091 $9,181 $10,272 ====== ====== ======= Adjusted
Class A Common Stock Outstanding Basic and Diluted Weighted Average
Shares of Class A Common Stock Outstanding 11,389 171 (h) 11,560
Vested Partnership Units - 15,209 (h) 15,209 Unvested Partnership
Units 77 4,776 (h) 4,853 Vested Restricted Stock Units - Event
Based 1,213 - 1,213 Unvested Restricted Stock Units - Event Based -
827 (h) 827 Vested Restricted Stock Units - Service Based 224 - 224
Unvested Restricted Stock Units - Service Based 7 - 7 Unvested
Restricted Stock - Service Based 147 - 147 --- --- --- Total Shares
13,057 20,983 34,040 ====== ====== ====== Net Income Per Share
Attributable to Evercore Partners Inc. Common Shareholders: Basic
$0.09 $0.30 Diluted $0.08 $0.30 EVERCORE PARTNERS INC. ADJUSTED PRO
FORMA SEGMENT RECONCILIATION TO U.S. GAAP THREE MONTHS ENDED JUNE
30, 2009 AND 2008 (dollars in thousands) (UNAUDITED) Three Months
Ended June 30, 2009
------------------------------------------------------- Adjusted
Pro Forma U.S. GAAP Basis Basis --------------------- ----------
Investment Consolidated Advisory Management Adjustments Results
-------- ----------- ----------- ---------- REVENUES Advisory
Revenue $68,439 $- $1,628 (a) $70,067 Investment Management Revenue
- 2,160 - 2,160 Other Revenue (71) 784 4,312 (b) 5,025 --- ---
----- ----- TOTAL REVENUES 68,368 2,944 5,940 77,252 Interest
Expense - - 6,209 (b) 6,209 --- --- ----- ----- NET REVENUES 68,368
2,944 (269) 71,043 ------ ----- ---- ------ EXPENSES Employee
Compensation and Benefits 39,682 12,177 - 51,859 Non-compensation
Costs 8,468 4,908 18,745 (a)(c) 32,121 (d)(e) ----- ----- ------
------ TOTAL EXPENSES 48,150 17,085 18,745 83,980 ------ ------
------ ------ Income (Loss) Before Interest Expense on Long-term
Debt and Income Taxes 20,218 (14,141) (19,014) (12,937) Interest
Expense on Long-term Debt 683 1,214 (1,897) (b) - --- ----- ------
--- Income (Loss) Before Income Taxes $19,535 $(15,355) $(17,117)
$(12,937) ======= ======== ======== ======== Three Months Ended
June 30, 2008 -------------------------------- Adjusted Pro Forma
U.S. GAAP Basis Basis --------------------- ------------ Investment
Consolidated Advisory Management Adjustments Results --------
----------- ----------- ------------ REVENUES Advisory Revenue
$56,566 $- $1,165 (a) $57,731 Investment Management Revenue - 1,702
88 (a) 1,790 Other Revenue 727 (130) 7,112 (b) 7,709 --- ---- -----
----- TOTAL REVENUES 57,293 1,572 8,365 67,230 Interest Expense - -
7,112 (b) 7,112 --- --- ----- ----- NET REVENUES 57,293 1,572 1,253
60,118 ------ ----- ----- ------ EXPENSES Employee Compensation and
Benefits 34,095 4,417 - 38,512 Non-compensation Costs 8,313 2,386
3,038 (a)(c)(d) 13,737 ----- ----- ----- ------ TOTAL EXPENSES
42,408 6,803 3,038 52,249 ------ ----- ----- ------ Income (Loss)
Before Interest Expense on Long-term Debt and Income Taxes 14,885
(5,231) (1,785) 7,869 Interest Expense on Long-term Debt - - - -
--- --- --- --- Income (Loss) Before Income Taxes $14,885 $(5,231)
$(1,785) $7,869 ======= ======= ======= ====== EVERCORE PARTNERS
INC. ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAP SIX
MONTHS ENDED JUNE 30, 2009 AND 2008 (dollars in thousands)
(UNAUDITED) Six Months Ended June 30, 2009
------------------------------ Adjusted Pro Forma U.S. GAAP Basis
Basis -------------------- ------------ Investment Consolidated
Advisory Management Adjustments Results -------- -----------
----------- ------------ REVENUES Advisory Revenue $116,488 $-
$2,637 (a) $119,125 Investment Management Revenue - 2,726 3 (a)
2,729 Other Revenue 531 2,173 10,911 (b) 13,615 --- ----- ------
------ TOTAL REVENUES 117,019 4,899 13,551 135,469 Interest Expense
- - 14,700 (b) 14,700 - - ------ ------ NET REVENUES 117,019 4,899
(1,149) 120,769 ------- ----- ------ ------- EXPENSES Employee
Compensation and Benefits 68,894 18,819 - 87,713 Non-compensation
Costs 15,759 8,264 20,515 (a)(c) 44,538 (d)(e) ------ ----- ------
------ TOTAL EXPENSES 84,653 27,083 20,515 132,251 ------ ------
------ ------- Income (Loss) Before Interest Expense on Long-term
Debt and Income Taxes 32,366 (22,184) (21,664) (11,482) Interest
Expense on Long-term Debt 683 3,106 (3,789) (b) - --- ----- ------
--- Income (Loss) Before Income Taxes $31,683 $(25,290) $(17,875)
$(11,482) ======= ======== ======== ======== Six Months Ended June
30, 2008 ------------------------------ Adjusted Pro Forma U.S.
GAAP Basis Basis -------------------- ------------- Investment
Consolidated Advisory Management Adjustments Results --------
----------- ----------- ------------ REVENUES Advisory Revenue
$96,964 $- $1,459 (a) $98,423 Investment Management Revenue - 4,117
247 (a) 4,364 Other Revenue 1,509 310 13,104 (b) 14,923 ----- ---
------ ------ TOTAL REVENUES 98,473 4,427 14,810 117,710 Interest
Expense - - 13,104 (b) 13,104 - - ------ ------ NET REVENUES 98,473
4,427 1,706 104,606 ------ ----- ----- ------- EXPENSES Employee
Compensation and Benefits 55,232 9,083 7,452 (i) 71,767
Non-compensation Costs 17,977 4,501 5,094 (a)(c)(d) 27,572 ------
----- ----- ------ TOTAL EXPENSES 73,209 13,584 12,546 99,339
------ ------ ------ ------ Income (Loss) Before Interest Expense
on Long-term Debt and Income Taxes 25,264 (9,157) (10,840) 5,267
Interest Expense on Long-term Debt - - - - --- --- --- --- Income
(Loss) Before Income Taxes $25,264 $(9,157) $(10,840) $5,267
======= ======= ======== ====== Notes to Unaudited Condensed
Consolidated Adjusted Pro Forma Statements of Operations 1. The
Company has reflected the reclassification of reimbursable expenses
and expenses associated with revenue sharing engagements with third
parties from revenue. 2. Adjusted Pro Forma segment information
classifies interest expense on short-term repurchase agreements
within the Investment Management segment as Other Revenue, net,
whereas U.S. GAAP results reflect this in Interest Expense.
Interest Expense on Long-term Debt is presented as a separate line
on a segment basis and is included in Interest Expense on a U.S.
GAAP Basis. 3. Reflects expenses associated with amortization of
intangible assets acquired in the Protego, Braveheart, SFS and EAM
acquisitions. 4. The Company has reflected charges in conjunction
with Evercore's decision to suspend capital raising for ECP and
other ongoing strategic cost management initiatives. The charge
relates to the expense required to be recorded under U.S. GAAP for
stock-based compensation awards that are voluntarily forfeited by
employees who remain with the Company. During the second quarter of
2009 employees voluntarily forfeited 416,878 unvested restricted
stock units and 250,230 Evercore LP partnership units. The Company
has reflected charges in the first quarter of 2008, as Special
Charges in connection with the write-off of certain capitalized
costs associated with ECP capital raising initiatives, employee
severance, accelerated share-based vesting and facilities costs
associated with the closing of the Los Angeles office. 5. The
Company has reflected Acquisition and Transition Costs for costs
incurred in connection with the acquisition of SFS and the
formation of ETC. This charge reflects the change in accounting for
deal-related costs required by SFAS No. 141(R) Business
Combinations, which was effective January 1, 2009. 6. Evercore is
organized as a series of Limited Liability Companies, Partnerships,
a C-Corporation and a Public Corporation and therefore, not all of
the Company's income is subject to corporate level taxes. As a
result, adjustments have been made to increase Evercore's effective
tax rate to approximately 42.0% and 42.1% for the three and six
months ended June 30, 2009. The effects of these adjustments
increased the effective tax rate to approximately 40.2% for the
three months ended June 30, 2008 and decreased the effective tax
rate to 36.2% for the six months ended June 30, 2008. These
adjustments assume that the Company has adopted a conventional
corporate tax structure and is taxed as a C Corporation in the U.S.
at the prevailing corporate rates, that all deferred tax assets
relating to foreign operations are fully realizable within the
structure on a consolidated basis and that adjustments for deferred
tax assets related to tax deductions for equity-based compensation
awards are made directly to stockholders' equity. The decrease in
the effective tax rate for the six months ended June 30, 2008
resulted from a discrete net tax benefit that was realized during
the quarter. The Company's effective tax rate would have been 40.2%
excluding that benefit. 7. Reflects adjustment to eliminate
noncontrolling interest related to all Evercore LP partnership
units which are assumed to be converted to Class A common stock. 8.
Assumes the vesting of all Evercore LP partnership units and
restricted stock unit event-based awards and reflects on a weighted
average basis, the dilution of unvested service-based awards. In
the computation of outstanding common stock equivalents for U.S.
GAAP net income per share, the unvested Evercore LP partnership
units and event-based restricted stock units are excluded from the
calculation. 9. Reflects an adjustment for a reduction of
compensation expense associated with the issuance of restricted
stock to the former shareholders of Braveheart in the first quarter
of 2008 as additional deferred consideration pursuant to the Sale
and Purchase Agreement associated with the Braveheart acquisition.
DATASOURCE: Evercore Partners Inc. CONTACT: Investor, Robert B.
Walsh, Chief Financial Officer, Evercore Partners, +1-212-857-3100;
Media, Kenny Juarez, The Abernathy MacGregor Group, for Evercore
Partners, +1-212-371-5999 Web Site: http://www.evercore.com/
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