Highlights NEW YORK, Oct. 30 /PRNewswire-FirstCall/ -- Evercore
Partners Inc. (NYSE: EVR) today announced that for the third
quarter and nine months ended September 30, 2008 its Adjusted Pro
Forma Net Income was $2.3 million and $12.5 million or $0.07 and
$0.37 per share, respectively, compared to Adjusted Pro Forma Net
Income of $9.8 million and $42.6 million or $0.29 and $1.30 per
share for the prior year third quarter and nine months,
respectively. Adjusted Pro Forma Net Revenues were $56.8 million
and $161.4 million for the third quarter and nine months ended
September 30, 2008, respectively, compared to Adjusted Pro Forma
Net Revenues of $72.4 million and $227.8 million for the third
quarter and nine months ended September 30, 2007, respectively. For
the third quarter and nine months ended September 30, 2008,
Evercore's U.S. GAAP Net Income (Loss) was $(0.5) million and $0.6
million or $(0.04) and $0.05 per share, respectively, compared to
Net Income (Loss) of $2.3 million and $(37.6) million or $0.19 and
$(3.97) per share for the quarter and nine months ended September
30, 2007, respectively. Evercore also announced today that Les
Fabuss has joined the firm's Advisory business as a Senior Managing
Director based in New York. He comes to Evercore after a 25-year
career at Lehman Brothers, where he most recently served as a Vice
Chairman of Global Investment Banking. At Evercore, Mr. Fabuss will
advise corporate clients on mergers and acquisitions and other
strategic transactions. He will apply his extensive experience in
the aerospace and defense industry and in working with private
equity firms. Evercore has previously announced the addition of Jed
Sherwindt to its M&A practice, Dan Celentano to the
Restructuring Group and Chip Newton to the Private Equity group.
"Our Advisory business is performing well in the most challenging
market environment which I can remember," said Roger C. Altman,
Chairman and Chief Executive Officer of Evercore Partners. "Our
franchise is actually becoming stronger, as we continue to add
talented new partners while many of our competitors struggle. Both
our M&A and Restructuring teams continue to add new engagements
and clients. Additionally, the appointments of Les Fabuss and Jed
Sherwindt as new partners in our advisory business strengthen the
Firm. We also continue to make progress towards our goal of better
balancing the Firm between its advising activities and its
investing ones. Mizuho's investment enhances our ability to pursue
strategic growth initiatives in private equity, institutional asset
management and wealth management. We have announced our commitment
to join Ralph Schlosstein as a strategic partner in the HighView
Investment Group and look forward to announcing additional
commitments before the end of the year. We also are pleased that
Chip Newton has joined our Private Equity team as a Senior Managing
Director and that we have resumed capital raising." Business Line
Reporting In the discussion below of the business segments and
Evercore, 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 non-recurring charges.
For more information about the adjusted pro forma basis of
reporting used by management to evaluate the performance of each
line of business, including reconciliations of U.S. GAAP results to
an adjusted pro forma basis, see pages A-8 and A-9 included in
Annex I. These adjusted pro forma amounts are allocated to the
Company's two business segments: Advisory and Investment
Management. Advisory Three Months Ended Nine Months Ended September
30, September 30, ------------------- ------------------ % % 2008
2007 Change 2008 2007 Change ---- ---- ------ ---- ---- ------
(dollars in thousands) Net Revenues: Advisory $51,447 $67,135 (23%)
$149,870 $207,927 (28%) Interest Income And Other Revenue, net
1,071 1,849 (42%) 2,580 3,231 (20%) ----- ----- ----- ----- Net
Revenues 52,518 68,984 (24%) 152,450 211,158 (28%) ------ ------
------- ------- Expenses: Employee Compensation And Benefits 35,172
33,974 4% 90,403 98,631 (8%) Non-compensation Costs 10,529 12,176
(14%) 29,966 32,614 (8%) ------ ------ ------ ------ Total Expenses
45,701 46,150 (1%) 120,369 131,245 (8%) ------ ------ -------
------- Adjusted Pro Forma Pre-Tax Income $6,817 $22,834 (70%)
$32,081 $79,913 (60%) ====== ======= ======= ======= Revenues
Advisory Revenue was $51.4 million and $149.9 million for the third
quarter and nine months ended September 30, 2008, respectively,
compared to Advisory Revenue of $67.1 million and $207.9 million
for the third quarter and nine months ended September 30, 2007,
respectively. These results include revenue related to Evercore's
restructuring engagements, where the Firm has seen a rise in client
activity in 2008. Among the transactions announced during the third
quarter of 2008 on which Evercore is advising are: -- Haights Cross
Communications on the sale of Oakstone Publishing to Boston
Ventures * -- CIT Group on the sale of its Home Lending business to
Lone Star Funds * -- ION Geophysical on its acquisition of ARAM --
Gillig Corporation on its sale to CC Industries * -- ISE on the
merger of ISE Stock Exchange with Direct Edge -- Wolters Kluwer on
its acquisition of UpToDate -- Centerplate's Board of Directors on
the sale of Centerplate to Kohlberg & Co. Additional
transactions that closed during the third quarter of 2008 on which
Evercore advised included: -- EDS on its sale to Hewlett-Packard --
Aquila on its sale to Great Plains Energy -- Creditex Group Inc. on
its sale to IntercontinentalExchange Advisory revenues derived from
clients located in the U.S. represented 69% and 76% of Advisory
revenues for the three and nine months ended September 30, 2008,
respectively, compared to 85% and 77% for the three and nine months
ended September 30, 2007, respectively. Note: * Transactions were
announced and closed during the third quarter Expenses Compensation
costs for the third quarter and nine months ended September 30,
2008 for the Advisory segment reflect Evercore's plan to maintain
competitive compensation levels to retain key personnel in a
challenging business environment and increased headcount in
comparison with prior periods. As of September 30, 2008, Evercore's
total headcount in its Advisory segment was 204 employees, compared
with 172 as of September 30, 2007. Non-compensation costs for the
third quarter and nine months ended September 30, 2008 declined in
the aggregate on an adjusted pro forma basis from the prior year
consistent with Evercore's plans. The most significant reductions
were a result of decreases in Professional Fees and Occupancy and
Equipment Rental. The decline in Professional Fees in the Advisory
segment is largely due to allocated expenses associated with
becoming a public company, which were higher in 2007. These savings
were partially offset by increases in costs associated with serving
clients, which were $2.4 million and $6.7 million of client related
costs for the third quarter and nine months ended September 30,
2008, respectively, compared to $2.0 million and $5.6 million for
the quarter and nine months ended September 30, 2007, respectively.
These costs are billable to clients depending on contract terms and
the extent of transactions closing. Evercore continues to focus on
identifying additional cost savings and is on target to achieve its
previously announced cost control initiative. Investment Management
Three Months Ended Nine Months Ended September 30, September 30,
------------------- ------------------ % % 2008 2007 Change 2008
2007 Change ---- ---- ------ ---- ---- ------ (dollars in
thousands) Net Revenues: Private Equity $3,564 $4,007 (11%) $9,242
$15,042 (39%) Institutional Asset Management and Other 737 (722) NM
(577) 769 NM Interest Income and Other Revenue, net (6) 130 NM 304
838 (64%) -- --- --- --- Net Revenues 4,295 3,415 26% 8,969 16,649
(46%) ----- ----- ----- ------ Expenses: Employee Compensation and
Benefits 5,139 6,528 (21%) 14,223 14,762 (4%) Non-compensation
Costs 1,944 3,431 (43%) 6,691 11,246 (41%) ----- ----- ----- ------
Total Expenses 7,083 9,959 (29%) 20,914 26,008 (20%) ----- -----
------ ------ Adjusted Pro Forma Pre-Tax Income (Loss) $(2,788)
$(6,544) 57% $(11,945) $(9,359) (28%) ======= ======= ========
======= Revenues Private Equity Three Months Ended Nine Months
Ended September 30, September 30, -------------------
------------------ % % 2008 2007 Change 2008 2007 Change ---- ----
------ ---- ---- ------ (dollars in thousands) Net Revenues:
Management Fees Including Portfolio Company Fees $2,785 $3,639
(23%) $6,785 $10,752 (37%) Realized and Unrealized Gains (Losses)
Including Carried Interest 779 368 112% 2,457 4,290 (43%) --- ---
----- ----- Total Net Revenues $3,564 $4,007 (11%) $9,242 $15,042
(39%) ====== ====== ====== ======= Private Equity revenues declined
compared to those in the third quarter of 2007 due to the step-down
in Evercore Capital Partners II management fees beginning in 2008
from 2% of committed capital to 1% of invested capital in
accordance with the partnership agreement. As of September 30,
2008, management fee calculations were based on $519.9 million of
Invested Capital at 1%. As of September 30, 2007, the management
fee was based on $653.1 million of Committed Capital at 2%.
Realized and unrealized gains have increased compared to the
results for the third quarter of 2007 due to a higher level of
gains and carried interest in the third quarter of 2008.
Institutional Asset Management and Other Three Months Ended Nine
Months Ended September 30, September 30, -------------------
------------------ % % 2008 2007 Change 2008 2007 Change ---- ----
------ ---- ---- ------ (dollars in thousands) Net Revenues:
Management Fees $375 $237 58% $1,102 $607 82% Realized and
Unrealized Gains (Losses) Including Performance Fees 362 (959) NM
(1,679) 162 NM --- ---- ------ --- Total Net Revenues $737 $(722)
NM $(577) $769 NM ==== ===== ===== ==== Evercore's fixed income
asset management business continues to grow, driving the growth in
Management Fees. As of September 30, 2008, assets under management
at Evercore Mexico's Protego Casa de Bolsa ("PCB") were $786.6
million compared to $613.4 million as of September 30, 2007. In the
U.S., difficult equity markets continue to be a challenge for
Evercore Asset Management ("EAM"), resulting in realized and
unrealized net losses for the three and nine month periods ended
September 30, 2008. As of September 30, 2008, assets under
management declined to $258.7 million from $447.6 million as of
September 30, 2007 due to client re-balancing and poor fund-level
performance. Expenses Compensation costs decreased compared to
prior periods primarily as a result of decreased headcount.
Non-compensation costs for the third quarter and nine months ended
September 30, 2008 declined in the aggregate on an adjusted pro
forma basis from the prior year consistent with Evercore's plans
and reflecting the reduced headcount which resulted from the
consolidation of Private Equity operations in New York. The most
significant reductions were a result of decreases in Professional
Fees and Occupancy and Equipment Rental, partially offset by
non-compensation costs of $0.2 million related to launching the
Firm's new business initiatives. The decline in Professional Fees
is largely due to allocated expenses associated with becoming a
public company which were higher in 2007. Corporate Reporting Other
U.S. GAAP Expenses Included in the third quarter and nine months of
2008 and 2007 U.S. GAAP results are the following expenses that
have been excluded from the adjusted pro forma results: -- The
Company has reflected $1.7 million and $4.1 million of charges in
the third quarter and nine months of 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 write-off of certain capitalized
costs associated with fundraising initiatives for ECP III. No
additional charges related to this matter are expected. -- The
amortization of intangibles associated with the acquisitions of
Protego and Braveheart. -- A $7.5 million expense included in
Employee Compensation and Benefits for the nine months ended
September 30, 2008, relating to the first quarter charge 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. -- A $128.2 million expense included in Employee
Compensation and Benefits for the nine months ended September 30,
2007, relating to the vesting of contingently vested Evercore LP
partnership units and stock-based awards as well as a severance
agreement recognized in the third quarter of 2007. Income Taxes For
the nine months ended September 30, 2008, Evercore's adjusted pro
forma effective tax rate was approximately 38% compared to an
effective tax rate of approximately 40% for the nine months ended
September 30, 2007. Dividend On October 28, 2008 the Board of
Directors of Evercore declared a quarterly dividend of $0.12 per
share to be paid on December 12, 2008 to common stockholders of
record on November 28, 2008. Conference Call Evercore will host a
conference call to discuss its results for the third quarter and
first nine months of 2008 on October 30, 2008, at 8 a.m. Eastern
Daylight Time with access available via the Internet and telephone.
Investors and analysts may participate in the live conference call
by dialing (800) 762-8932 (toll-free domestic) or (480) 629-9041
(international); passcode: 3933459. 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: 3933459. 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 the
Web site 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
private equity investing, institutional asset management and wealth
management. Evercore serves a diverse set of clients around the
world from its offices in New York, San Francisco, 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 and are provided principally
to give additional information about the per-share effect of
previously issued but unvested equity and to exclude charges
associated with the amortization of intangible assets acquired with
Protego and Braveheart, the compensation charge resulting from
equity awards that vested in conjunction with Evercore's May 2007
follow-on offering, charges relating to the payment of deferred
consideration for the Braveheart acquisition, charges related to
the write-off of certain capitalized costs associated with fund
raising initiatives for ECP III and employee severance, accelerated
share-based vesting and other costs related to exiting the Los
Angeles office, the vesting of all LP partnership units and
restricted stock unit event-based awards as well as a severance
agreement recognized in the third quarter of 2007 and certain tax
adjustments. Evercore believes that the disclosed adjusted pro
forma measures and any adjustments thereto, when presented in
conjunction with comparable U.S. GAAP measures, provide a
meaningful basis for comparison among present, historical and
future periods. 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, as well as a description of how
management believes the adjusted pro forma results provide useful
information in evaluating Evercore's ongoing operations. Evercore's
revenues and net income can fluctuate materially depending on the
number, size and timing of the completed transactions on which it
advises, the number and size of Investment Management gains or
losses and other factors. Accordingly, the revenues and net income
in any particular quarter may not be indicative of future results.
Evercore believes that annual results are the most meaningful.
Forward-Looking Statements This discussion 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, 2007. These factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included in this discussion.
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 for the
Three and Nine Months Ended September 30, 2008 and 2007 A-1
Adjusted Pro Forma: Adjusted Pro Forma Results and Adjusted Pro
Forma Net Income (Loss) per Common Share A-2 Unaudited Condensed
Consolidated Adjusted Pro Forma Statements of Operations for the
Three Months Ended September 30, 2008 A-4 Unaudited Condensed
Consolidated Adjusted Pro Forma Statements of Operations for the
Three Months Ended September 30, 2007 A-5 Unaudited Condensed
Consolidated Adjusted Pro Forma Statements of Operations for the
Nine Months Ended September 30, 2008 A-6 Unaudited Condensed
Consolidated Adjusted Pro Forma Statements of Operations for the
Nine Months Ended September 30, 2007 A-7 Adjusted Pro Forma Segment
Reconciliation to U.S. GAAP for the Three Months ended September
30, 2008 and 2007 A-8 Adjusted Pro Forma Segment Reconciliation to
U.S. GAAP for the Nine Months ended September 30, 2008 and 2007 A-9
Notes to Unaudited Condensed Consolidated Adjusted Pro Forma
Statements of Operations A-10 EVERCORE PARTNERS INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007 (dollars in thousands, except per share
data) (UNAUDITED) Three Months Ended Nine Months Ended September
30, September 30, ----------------- ----------------- 2008 2007
2008 2007 ---- ---- ---- ---- REVENUES Advisory Revenue $51,447
$67,135 $149,870 $207,927 Investment Management Revenue (1) 4,301
3,285 8,665 15,811 Interest Income and Other Revenue (1) 9,970
7,693 24,893 15,712 ----- ----- ------ ------ TOTAL REVENUES 65,718
78,113 183,428 239,450 Interest Expense 8,905 5,714 22,009 11,643
----- ----- ------ ------ NET REVENUES 56,813 72,399 161,419
227,807 ------ ------ ------- ------- EXPENSES Employee
Compensation and Benefits 40,311 42,777 112,078 241,576 Occupancy
and Equipment Rental (1) 3,167 3,820 9,539 9,475 Professional Fees
4,474 7,185 11,746 19,382 Travel and Related Expenses (1) 2,177
2,098 7,299 6,627 Communications and Information Services 936 568
2,309 1,636 Depreciation and Amortization 1,028 4,510 3,164 13,295
Special Charges 1,695 - 4,132 - Other Operating Expenses (1) 1,155
1,077 4,015 5,002 ----- ----- ----- ----- TOTAL EXPENSES 54,943
62,035 154,282 296,993 ------ ------ ------- ------- INCOME (LOSS)
BEFORE INCOME TAXES AND MINORITY INTEREST 1,870 10,364 7,137
(69,186) Provision for Income Taxes 1,475 3,217 3,642 8,795
Minority Interest 863 4,828 2,872 (40,348) --- ----- ----- -------
NET INCOME (LOSS) $(468) $2,319 $623 $(37,633) ===== ====== ====
======== Net Income (Loss) Available to Holders of Shares of Class
A Common Stock $(468) $2,319 $623 $(37,633) Weighted Average Shares
of Class A Common Stock Outstanding: Basic 13,085 12,352 12,914
9,478 Diluted 13,085 12,406 13,163 9,478 Net Income (Loss) Per
Share Available to Holders of Shares of Class A Common Stock: Basic
$(0.04) $0.19 $0.05 $(3.97) Diluted $(0.04) $0.19 $0.05 $(3.97) (1)
The above reflects a reclassification of certain balances for prior
periods that have been reclassified to conform to their current
presentation. These reclassifications include the reclassification
of $398 and $607 for the three and nine months ended September 30,
2007, respectively, of certain fees within Evercore's Institutional
Asset Management business from Interest Income and Other Revenue to
Investment Management Revenue and the reclassification of $227 and
$514 for the three and nine months ended September 30, 2007,
respectively, of certain expenses from Other Operating Expenses to
Occupancy and Equipment Rental and Travel and Related Expenses.
Adjusted Pro Forma Results and Adjusted Pro Forma Net Income (Loss)
per Common Share 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 as
shown in the tables below: 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. Management believes that these charges are not
reflective of ongoing operations, and therefore exclusion of these
charges enhances understanding of the Company's operating
performance. Special Charges. The Company has reflected $1.7
million and $4.1 million of charges in the third quarter and nine
months of 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 III. Evercore expects to realize cost savings
in the future due to these changes. Management believes that these
charges are not reflective of ongoing operations, and therefore
exclusion of these charges enhances understanding of the Company's
operating performance. Exclusion of compensation charges associated
with the vesting of contingently vested Evercore LP partnership
units and Stock-Based Awards. Evercore issued partnership units and
stock-based awards which vest upon the occurrence of specified
vesting events rather than merely the passage of time and continued
service. In periods prior to the completion of the May 2007
follow-on offering we concluded that it was not probable that the
vesting conditions would be achieved. Accordingly, we had not been
accruing compensation expense relating to these unvested
partnership units or stock-based awards. The completion of our May
2007 follow-on offering resulted in Messrs. Altman, Beutner and
Aspe, and trusts benefiting their families and permitted
transferees, collectively, ceasing to beneficially own at least 90%
of the aggregate Evercore LP partnership units owned by them on the
date of the internal reorganization resulting in the vesting of
certain partnership units and stock-based awards. The vesting of
these awards resulted in a non-cash compensation expense that was
the result of the successful completion of Evercore's equity
offering in May 2007, as well as an adjustment that was recognized
in the fourth quarter of 2007 and a severance agreement recognized
in the third quarter of 2007. Exclusion of amortization of
intangible assets acquired with Protego and Braveheart. The Protego
acquisition was undertaken in contemplation of the IPO. The
Braveheart acquisition occurred on December 19, 2006. Management
believes that these charges are not reflective of ongoing
operations, and therefore exclusion of these charges enhances
understanding of the Company's operating performance. 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 partnership units or 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
Evercore'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 SEPTEMBER 30, 2008 (dollars in thousands, except
per share data) (UNAUDITED) Evercore Evercore Partners Partners
Inc. Inc. Pro Forma Adjusted U.S. GAAP Adjustments Pro Forma
--------- ------------ --------- REVENUES Advisory Revenue $51,447
$- $51,447 Investment Management Revenue 4,301 - 4,301 Interest
Income and Other Revenue 9,970 - 9,970 ----- - ----- TOTAL REVENUES
65,718 - 65,718 Interest Expense 8,905 - 8,905 ----- - ----- NET
REVENUES 56,813 - 56,813 ------ - ------ EXPENSES Employee
Compensation and Benefits 40,311 - 40,311 Occupancy and Equipment
Rental 3,167 - 3,167 Professional Fees 4,474 - 4,474 Travel and
Related Expenses 2,177 - 2,177 Communications and Information
Services 936 - 936 Depreciation and Amortization 1,028 (464) (c)
564 Special Charges 1,695 (1,695) (d) - Other Operating Expenses
1,155 - 1,155 ----- - ----- TOTAL EXPENSES 54,943 (2,159) 52,784
------ ------ ------ INCOME BEFORE INCOME TAXES AND MINORITY
INTEREST 1,870 2,159 4,029 Provision for Income Taxes 1,475 284 (e)
1,759 Minority Interest 863 (863) (f) - --- ---- - NET INCOME
(LOSS) $(468) $2,738 $2,270 ===== ====== ====== Adjusted Class A
Common Stock Outstanding Basic and Diluted Weighted Average Shares
of Class A Common Stock Outstanding 11,627 - 11,627 Vested
Partnership Units - 15,146 (g) 15,146 Unvested Partnership Units -
4,853 (g) 4,853 Vested Restricted Stock Units - Event Based 1,209 -
1,209 Unvested Restricted Stock Units - Event Based - 803 (g) 803
Vested Restricted Stock Units - Service Based 249 - 249 Unvested
Restricted Stock Units - Service Based - 44 (g) 44 Unvested
Restricted Stock - Service Based - 140 (g) 140 - --- --- Total
Shares 13,085 20,986 34,071 ====== ====== ====== Net Income (Loss)
per Share: Basic $(0.04) $0.07 Diluted $(0.04) $0.07 EVERCORE
PARTNERS INC. CONDENSED CONSOLIDATED ADJUSTED PRO FORMA STATEMENT
OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2007 (dollars in
thousands, except per share data) (UNAUDITED) Evercore Evercore
Partners Partners Inc. Inc. Pro Forma Adjusted U.S. GAAP
Adjustments Pro Forma --------- ------------ --------- REVENUES
Advisory Revenue $67,135 $- $67,135 Investment Management Revenue
3,285 - 3,285 Interest Income and Other Revenue 7,693 - 7,693 -----
- ----- TOTAL REVENUES 78,113 - 78,113 Interest Expense 5,714 -
5,714 ----- - ----- NET REVENUES 72,399 - 72,399 ------ - ------
EXPENSES Employee Compensation and Benefits 42,777 (2,275) (b)
40,502 Occupancy and Equipment Rental 3,820 - 3,820 Professional
Fees 7,185 - 7,185 Travel and Related Expenses 2,098 - 2,098
Communications and Information Services 568 - 568 Depreciation and
Amortization 4,510 (3,651) (c) 859 Special Charges - - - Other
Operating Expenses 1,077 - 1,077 ----- - ----- TOTAL EXPENSES
62,035 (5,926) 56,109 ------ ------ ------ INCOME BEFORE INCOME
TAXES AND MINORITY INTEREST 10,364 5,926 16,290 Provision for
Income Taxes 3,217 3,247 (e) 6,464 Minority Interest 4,828 (4,828)
(f) - ----- ------ - NET INCOME $2,319 $7,507 $9,826 ====== ======
====== Adjusted Class A Common Stock Outstanding Basic and Diluted
Weighted Average Shares of Class A Common Stock Outstanding 11,108
- 11,108 Vested Partnership Units - 15,335 (g) 15,335 Unvested
Partnership Units 31 4,823 (g) 4,854 Vested Restricted Stock Units
- Event Based 1,244 - 1,244 Unvested Restricted Stock Units - Event
Based - 888 (g) 888 Vested Restricted Stock Units - Service Based -
- - Unvested Restricted Stock Units - Service Based 11 - 11
Unvested Restricted Stock - Service Based 12 - 12 -- - -- Total
Shares 12,406 21,046 33,452 ====== ====== ====== Net Income per
Share: Basic $0.19 $0.29 Diluted $0.19 $0.29 EVERCORE PARTNERS INC.
CONDENSED CONSOLIDATED ADJUSTED PRO FORMA STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2008 (dollars in thousands, except
per share data) (UNAUDITED) Evercore Evercore Partners Partners
Inc. Inc. Pro Forma Adjusted U.S. GAAP Adjustments Pro Forma
--------- ------------ --------- REVENUES Advisory Revenue $149,870
$- $149,870 Investment Management Revenue 8,665 - 8,665 Interest
Income and Other Revenue 24,893 - 24,893 ------ - ------ TOTAL
REVENUES 183,428 - 183,428 Interest Expense 22,009 - 22,009 ------
- ------ NET REVENUES 161,419 - 161,419 ------- - ------- EXPENSES
Employee Compensation and Benefits 112,078 (7,452) (a) 104,626
Occupancy and Equipment Rental 9,539 - 9,539 Professional Fees
11,746 - 11,746 Travel and Related Expenses 7,299 - 7,299
Communications and Information Services 2,309 - 2,309 Depreciation
and Amortization 3,164 (1,415) (c) 1,749 Special Charges 4,132
(4,132) (d) - Other Operating Expenses 4,015 - 4,015 ----- - -----
TOTAL EXPENSES 154,282 (12,999) 141,283 ------- ------- -------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 7,137 12,999
20,136 Provision for Income Taxes 3,642 3,952 (e) 7,594 Minority
Interest 2,872 (2,872) (f) - ----- ------ - NET INCOME $623 $11,919
$12,542 ==== ======= ======= Adjusted Class A Common Stock
Outstanding Basic and Diluted Weighted Average Shares of Class A
Common Stock Outstanding 11,469 113 (g) 11,582 Vested Partnership
Units - 15,188 (g) 15,188 Unvested Partnership Units 77 4,776 (g)
4,853 Vested Restricted Stock Units - Event Based 1,212 (3) (g)
1,209 Unvested Restricted Stock Units - Event Based - 803 (g) 803
Vested Restricted Stock Units - Service Based 233 - 233 Unvested
Restricted Stock Units - Service Based 38 - 38 Unvested Restricted
Stock - Service Based 134 - 134 --- - --- Total Shares 13,163
20,877 34,040 ====== ====== ====== Net Income per Share: Basic
$0.05 $0.37 Diluted $0.05 $0.37 EVERCORE PARTNERS INC. CONDENSED
CONSOLIDATED ADJUSTED PRO FORMA STATEMENT OF OPERATIONS NINE MONTHS
ENDED SEPTEMBER 30, 2007 (dollars in thousands, except per share
data) (UNAUDITED) Evercore Evercore Partners Partners Inc. Inc. Pro
Forma Adjusted U.S. GAAP Adjustments Pro Forma ---------
------------ --------- REVENUES Advisory Revenue $207,927 $-
$207,927 Investment Management Revenue 15,811 - 15,811 Interest
Income and Other Revenue 15,712 - 15,712 ------ - ------ TOTAL
REVENUES 239,450 - 239,450 Interest Expense 11,643 - 11,643 ------
- ------ NET REVENUES 227,807 - 227,807 ------- - ------- EXPENSES
Employee Compensation and Benefits 241,576 (128,183) (b) 113,393
Occupancy and Equipment Rental 9,475 - 9,475 Professional Fees
19,382 - 19,382 Travel and Related Expenses 6,627 - 6,627
Communications and Information Services 1,636 - 1,636 Depreciation
and Amortization 13,295 (11,557) (c) 1,738 Special Charges - - -
Other Operating Expenses 5,002 - 5,002 ----- - ----- TOTAL EXPENSES
296,993 (139,740) 157,253 ------- -------- ------- INCOME (LOSS)
BEFORE INCOME TAXES AND MINORITY INTEREST (69,186) 139,740 70,554
Provision for Income Taxes 8,795 19,201 (e) 27,996 Minority
Interest (40,348) 40,348 (f) - ------- ------ - NET INCOME (LOSS)
$(37,633) $80,191 $42,558 ======== ======= ======= Adjusted Class A
Common Stock Outstanding Basic and Diluted Weighted Average Shares
of Class A Common Stock Outstanding 8,741 54 (g) 8,795 Vested
Partnership Units - 16,823 (g) 16,823 Unvested Partnership Units -
4,854 (g) 4,854 Vested Restricted Stock Units - Event Based 737 511
(g) 1,248 Unvested Restricted Stock Units - Event Based - 888 (g)
888 Vested Restricted Stock Units - Service Based - - - Unvested
Restricted Stock Units - Service Based - 37 (g) 37 Unvested
Restricted Stock - Service Based - 28 (g) 28 - -- -- Total Shares
9,478 23,195 32,673 ===== ====== ====== Net Income (Loss) per
Share: Basic $(3.97) $1.30 Diluted $(3.97) $1.30 EVERCORE PARTNERS
INC. ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAP THREE
MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (dollars in thousands)
(UNAUDITED) Three Months Ended September 30, 2008
------------------------------------- Adjusted Pro Forma U.S. GAAP
Basis Basis ------------------ --------- Investment Consolidated
Advisory Management Adjustments Results -------- -----------
----------- ------------ REVENUES Advisory Revenue $51,447 $- $-
$51,447 Investment Management Revenue - 4,301 - 4,301 Interest
Income And Other Revenue, net 1,071 (6) - 1,065 ----- -- - -----
NET REVENUES 52,518 4,295 - 56,813 ------ ----- - ------ EXPENSES
Employee Compensation and Benefits 35,172 5,139 - 40,311
Non-compensation Costs 10,529 1,944 2,159 (c)(d) 14,632 ------
----- ----- ------ TOTAL EXPENSES 45,701 7,083 2,159 54,943 ------
----- ----- ------ Income (Loss) Before Income Taxes and Minority
Interest $6,817 $(2,788) $(2,159) $1,870 ------ ------- -------
------ Three Months Ended September 30, 2007
------------------------------------- Adjusted Pro Forma U.S. GAAP
Basis Basis ------------------ --------- Investment Consolidated
Advisory Management Adjustments Results -------- -----------
----------- ------------ REVENUES Advisory Revenue $67,135 $- $-
$67,135 Investment Management Revenue - 3,285 - 3,285 Interest
Income And Other Revenue, net 1,849 130 - 1,979 ----- --- - -----
NET REVENUES 68,984 3,415 - 72,399 ------ ----- - ------ EXPENSES
Employee Compensation and Benefits 33,974 6,528 2,275 (b) 42,777
Non-compensation Costs 12,176 3,431 3,651 (c) 19,258 ------ -----
----- ------ TOTAL EXPENSES 46,150 9,959 5,926 62,035 ------ -----
----- ------ Income (Loss) Before Income Taxes and Minority
Interest $22,834 $(6,544) $(5,926) $10,364 ------- ------- -------
------- EVERCORE PARTNERS INC. ADJUSTED PRO FORMA SEGMENT
RECONCILIATION TO U.S. GAAP NINE MONTHS ENDED SEPTEMBER 30, 2008
AND 2007 (dollars in thousands) (UNAUDITED) Nine Months Ended
September 30, 2008 ------------------------------------ Adjusted
Pro Forma U.S. GAAP Basis Basis ------------------ ---------
Investment Consolidated Advisory Management Adjustments Results
-------- ----------- ----------- ------------ REVENUES Advisory
Revenue $149,870 $- $- $149,870 Investment Management Revenue -
8,665 - 8,665 Interest Income And Other Revenue, net 2,580 304 -
2,884 ----- --- - ----- NET REVENUES 152,450 8,969 - 161,419
------- ----- - ------- EXPENSES Employee Compensation and Benefits
90,403 14,223 7,452 (a) 112,078 Non-compensation Costs 29,966 6,691
5,547 (c)(d) 42,204 ------ ----- ----- ------ TOTAL EXPENSES
120,369 20,914 12,999 154,282 ------- ------ ------ ------- Income
(Loss) Before Income Taxes and Minority Interest $32,081 $(11,945)
$(12,999) $7,137 ------- -------- -------- ------ Nine Months Ended
September 30, 2007 ------------------------------------ Adjusted
Pro Forma U.S. GAAP Basis Basis ------------------ ---------
Investment Consolidated Advisory Management Adjustments Results
-------- ----------- ----------- ------------ REVENUES Advisory
Revenue $207,927 $- $- $207,927 Investment Management Revenue -
15,811 - 15,811 Interest Income And Other Revenue, net 3,231 838 -
4,069 ----- --- - ----- NET REVENUES 211,158 16,649 - 227,807
------- ------ - ------- EXPENSES Employee Compensation and
Benefits 98,631 14,762 128,183 (b) 241,576 Non-compensation Costs
32,614 11,246 11,557 (c) 55,417 ------ ------ ------ ------ TOTAL
EXPENSES 131,245 26,008 139,740 296,993 ------- ------ -------
------- Income (Loss) Before Income Taxes and Minority Interest
$79,913 $(9,359) $(139,740) $(69,186) ------- ------- ---------
-------- Notes to Unaudited Condensed Consolidated Adjusted Pro
Forma Statements of Operations (a) Reflects an adjustment for a
reduction of $7.5 million 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. (b) Adjustment for
reduction of compensation associated with event-based vesting of
stock-based awards related to the follow-on offering ($125.9
million), as well as a severance agreement recognized in the third
quarter of 2007 ($2.3 million). (c) Reflects expenses associated
with amortization of intangible assets acquired in the Protego and
Braveheart acquisitions. (d) The Company has reflected $1.7 million
and $4.1 million of charges in the third quarter and nine months of
2008, respectively, as Special Charges in connection with the
write-off of certain capitalized costs associated with ECP III fund
raising initiatives, employee severance, accelerated share-based
vesting and facilities costs associated with the closing of the Los
Angeles office. (e) Evercore is organized as a series of Limited
Liability Companies, Partnerships 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 in order to
reflect Evercore's effective tax rate as 44% and 38% for the three
and nine months ended September 30, 2008, respectively, and 40% for
both the three and nine months ended September 30, 2007. These
adjustments assume that the Company is taxed as a C corporation at
the prevailing corporate tax rates and that certain deferred tax
adjustments related to the realization of tax deductions for
equity-based compensation awards are made directly to shareholders'
equity. The decrease in the effective tax rate for the nine months
ended September 30, 2008 is due to discrete net tax adjustments
that were realized during the first nine months. The Company's
effective tax rate would have been approximately 41% for the nine
months ended September 30, 2008, excluding these discrete items.
(f) Reflects adjustment to eliminate minority interest as all
Evercore LP partnership units are assumed to be converted to Class
A common stock. (g) Assumes the vesting of all 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. DATASOURCE: Evercore Partners Inc.
CONTACT: Investors, Robert B. Walsh, Chief Financial Officer,
Evercore Partners, +1-212-857-3100; or Media, Kenny Juarez of The
Abernathy MacGregor Group, for Evercore Partners, +1-212-371-5999
Web Site: http://www.evercore.com/
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