Highlights NEW YORK, April 30 /PRNewswire-FirstCall/ -- Evercore
Partners Inc. (NYSE: EVR) today announced that its Adjusted Pro
Forma Net Revenues were $50.6 million for the three months ended
March 31, 2009, compared to Adjusted Pro Forma Net Revenues of
$44.0 million for the three months ended March 31, 2008. Adjusted
Pro Forma Net Income Attributable to Evercore Partners Inc. was
$1.8 million or $0.05 per share for the three months ended March
31, 2009, compared to Adjusted Pro Forma Net Income Attributable to
Evercore Partners Inc. of $4.5 million or $0.13 per share for the
three months ended March 31, 2008. U.S. GAAP Net Revenues were
$49.7 million for the three months ended March 31, 2009, compared
to U.S. GAAP Net Revenues of $44.5 million for the three months
ended March 31, 2008. U.S. GAAP Net Income Attributable to Evercore
Partners Inc. was $0.2 million or $0.01 per share for the three
months ended March 31, 2009, compared to a U.S. GAAP Net Loss
Attributable to Evercore Partners Inc. of $(1.0) million or $(0.08)
per share for the three months ended March 31, 2008. 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. "Our
revenue performance was relatively strong, and we are quite pleased
here," said Roger Altman, Chairman and Chief Executive Officer.
"This reflected both the excellent results in our Restructuring
Advisory business and Evercore having participated in several of
the most important global M&A transactions for the quarter. We
also added three new Senior Managing Directors in Advisory -
expanding both our sectoral and geographic coverage - and will add
more this year." "Evercore's Adjusted Pro Forma Net Income was down
versus the first quarter of 2008, but considerably better than the
last quarter of 2008. Compared to the first quarter of 2008, our
Advisory earnings were up but the loss in Investment Management
widened considerably. This reflected start-up expenses associated
with Evercore Wealth Management and Evercore Trust Company. It also
reflected the halt in fundraising for Evercore Capital Partners and
HighView, as well as portfolio-company related mark downs." "I
should say that we are quite pleased with the progress of Evercore
Wealth Management, which is ahead of plan and with the formation of
Evercore Trust Company and the related acquisition of the Special
Fiduciary Services business from Bank of America, which is
immediately accretive to earnings." 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-6 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 March 31,
----------------------------------------------------- Adjusted Pro
Forma U.S. GAAP ------------------------- ------------------------
2009 2008 % Change 2009 2008 % Change ---- ---- -------- ---- ----
-------- (dollars in thousands) Net Revenues (1) $50,606 $44,035
15% $49,726 $44,488 12% ------- ------- ------- ------- Expenses:
Employee Compensation and Benefits 35,854 25,803 39% 35,854 33,255
8% Non-compensation Costs (1) 10,647 11,779 (10%) 12,417 13,835
(10%) ------ ------ ------ ------ Total Expenses 46,501 37,582 24%
48,271 47,090 3% ------ ------ ------ ------ Operating Income
(Loss) 4,105 6,453 (36%) 1,455 (2,602) NM Interest Expense on
Long-term Debt (2) 1,892 - NM - - NM ----- --- --- --- Pre-Tax
Income (Loss) 2,213 6,453 (66%) 1,455 (2,602) NM Provision
(Benefit) for Income Taxes 936 1,958 (52%) 1,058 (294) NM --- -----
----- ---- Net Income (Loss) 1,277 4,495 (72%) 397 (2,308) NM
Noncontrolling Interest (528) - NM 206 (1,343) NM ---- --- ---
------ Net Income (Loss) Attributable to Evercore Partners Inc.
$1,805 $4,495 (60%) $191 $(965) NM ====== ====== ==== =====
Earnings Per Share $0.05 $0.13 (62%) $0.01 $(0.08) NM (1) For
Adjusted Pro Forma purposes 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) 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. Evercore continued to increase its global reach during the
first quarter of 2009 with 22% of total revenue being sourced from
outside of the United States. Business Line Reporting A discussion
of Adjusted Pro Forma revenues and expenses is presented below for
the Advisory and Investment Management segments. Advisory Three
Months Ended March 31, ---------------------------- 2009 2008 %
Change ---- ---- -------- (dollars in thousands) Net Revenues:
Advisory (1) $48,049 $40,398 19% Other Revenue, net 602 782 (23%)
--- --- Net Revenues 48,651 41,180 18% ------ ------ Expenses:
Employee Compensation and Benefits 29,212 21,137 38%
Non-compensation Costs (1) 7,291 9,664 (25%) ----- ----- Total
Expenses 36,503 30,801 19% ------ ------ Adjusted Pro Forma Pre-Tax
Income $12,148 $10,379 17% ======= ======= (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. Revenues Advisory
revenue was $48.0 million for the three months ended March 31,
2009, compared to $40.4 million for the three months ended March
31, 2008, an increase of 19%. This was accomplished despite a
decrease of 42% in the dollar value of global completed M&A
transactions and an increase of 7% in the dollar value of U.S.
completed M&A transactions during the first quarter of 2009
over the prior year. Evercore continues to secure restructuring
advisory assignments, as the number of companies in financial
difficulty also continues to increase. Evercore has also seen an
emergence in M&A activity for distressed assets and has
received mandates to advise in these situations. Evercore has been
retained as the advisor on several large, noteworthy engagements,
including General Motors, LyondellBasell, and MGM Mirage among
others. Announced M&A transactions during the first quarter of
2009 include: -- Swiss Reinsurance Company on its capital
investment from Berkshire Hathaway -- Sirius XM Radio on a
two-phase capital investment from Liberty Media -- The Copley Press
on its sale of The San Diego Union-Tribune -- LoopNet in connection
with its sale of convertible preferred stock -- infoGROUP on its
sale of Macro International According to Thomson Financial, among
boutiques, Evercore was the number one ranked firm during the first
quarter of 2009 as measured by the value of U.S. announced
transactions. In particular, we advised Wyeth on the Pfizer/Wyeth
transaction, the largest U.S. transaction announced during the
quarter. Evercore earned Advisory revenues from 69 clients during
the first quarter of 2009, up from 60 clients during the first
quarter of 2008. In keeping with Evercore's stated Advisory
strategy to build a global footprint and add talented senior
bankers, Evercore has established a cooperation agreement with
CITIC Securities, a leading Chinese investment banking firm
headquartered in Beijing, and, separately Evercore expanded its
M&A and restructuring teams with productive senior bankers.
Evercore is pleased to announce that it hired three new Advisory
Senior Managing Directors during the first quarter (two of which
will start later in the year), thereby expanding coverage in
transportation and infrastructure, oil and gas and in Europe.
Expenses Compensation costs for the Advisory segment for the first
quarter ended March 31, 2009, increased by $8.1 million due, in
part, to higher revenues and an increase in banker headcount. This
increase in banker headcount reflects Evercore's decision to
strategically grow its Advisory business during this downturn,
particularly its efforts to globalize and to continue to build its
restructuring group. For the three months ended March 31, 2009,
Evercore's Advisory compensation ratio was 60%; down from the
compensation ratio reported for the full year 2008 of 62%.
Excluding the stock compensation costs related to Advisory Senior
Managing Directors hired in 2007, 2008 and 2009, the ratio would
have been 52%. Non-compensation costs for the first quarter ended
March 31, 2009, declined in the aggregate by $2.4 million from the
first quarter of 2008, reflecting Evercore's continued cost
reduction efforts including, among others, the disciplined
management of travel and travel-related expenses. Investment
Management Three Months Ended March 31,
---------------------------- 2009 2008 % Change ---- ---- --------
(dollars in thousands) Net Revenues: Private Equity (1) $1,470
$2,126 (31%) Institutional Asset Management (1,070) 289 NM Wealth
Management 166 - NM --- --- Investment Management Revenues 566
2,415 (77%) Other Revenue, net (2) 1,389 440 216% ----- --- Net
Revenues 1,955 2,855 (32%) ----- ----- Expenses: Employee
Compensation and Benefits 6,642 4,666 42% Non-compensation Costs
(1) 3,356 2,115 59% ----- ----- Total Expenses 9,998 6,781 47%
----- ----- Adjusted Pro Forma Operating Income (Loss) (8,043)
(3,926) (105%) Interest Expense on Long-term Debt (2) 1,892 - NM
----- --- Adjusted Pro Forma Pre-Tax Income (Loss) $(9,935)
$(3,926) (153%) ======= ======= (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.
Institutional Asset Private Equity Management --------------
-------------- For the three months ended March 31,
----------------------------------- 2009 2008 2009 2008 ---- ----
---- ---- (dollars in thousands) Management Fees $2,147 $1,819 $671
$1,257 Realized and Unrealized Gain (Loss) (677) 307 (821) (968)
Investment in HighView - - (920) - --- --- ---- --- Investment
Management Revenues $1,470 $2,126 $(1,070) $289 ====== ======
======= ==== Investment Wealth Management Management Revenues
-------------- -------------- For the three months ended March 31,
------------------------------------ 2009 2008 2009 2008 ---- ----
---- ---- (dollars in thousands) Management Fees $166 $- $2,984
$3,076 Realized and Unrealized Gain (Loss) - - (1,498) (661)
Investment in HighView - - (920) - --- --- ---- --- Investment
Management Revenues $166 $- $566 $2,415 ==== === ==== ======
Evercore has made progress in Investment Management in both
building early stage businesses and taking steps to improve the
profitability of the segment. On April 29, Evercore announced the
formation of Evercore Trust Company in conjunction with the pending
consummation of its acquisition of Bank of America's Special
Fiduciary Services Division. Evercore Trust Company, a newly
chartered national trust bank, will focus on providing specialized
investment management, independent fiduciary and trustee services
to employee benefit plans of large corporations and will commence
operations with approximately $12.8 billion in assets under
management and administration. The addition of this business is
immediately accretive on an adjusted pro forma basis and will be
strategic to both the Institutional Asset Management and the Wealth
Management businesses. Due to the significant dislocations
experienced across the alternative investment markets, Evercore has
decided to delay capital raising for Evercore Capital Partners and
focus on the management and realization of the existing portfolio.
HighView Investment Group ("HighView") has also decided against
proceeding with its business. None of the capital HighView raised
was invested, and HighView has agreed to release the founding
partners, including Evercore, from their capital commitments.
Revenues Investment Management Revenues declined to $0.6 million
for the first quarter ended March 31, 2009, compared to revenue of
$2.4 million for the first quarter ended March 31, 2008. The
decline in revenues versus the prior period primarily reflects the
adverse impact the current market environment had on the realized
and unrealized gains and losses of our institutional asset
management and private equity businesses, and Evercore's share of
the losses associated with HighView's decision to cease
fundraising. Management fee revenue also decreased slightly from
$3.1 million to $3.0 million year-over-year. Other Revenues
increased due to higher returns from our investments in high grade
corporate securities held as Marketable Securities. These returns
partially offset the cost of the Long-term Debt issued to Mizuho.
Expenses Investment Management compensation and non-compensation
costs of $10.0 million for the first quarter of 2009 include $2.9
million of costs incurred in connection with the build out of
Evercore Wealth Management and Evercore Trust Company. Cost
Management Initiatives In conjunction with Evercore's decision to
delay capital raising for Evercore Capital Partners, and other
ongoing strategic cost management initiatives, Evercore expects to
record a pre-tax charge in the Adjusted Pro Forma results of
approximately $1.6 million related to the modification of certain
equity compensation arrangements and downsizing in the second
quarter of this year. The pre-tax charge on a U.S. GAAP basis will
be approximately $19.9 million. The difference in amount relates to
the expense required to be recorded under U.S. GAAP for stock
compensation awards that are voluntarily forfeited by employees who
remain with the Company. During the second quarter we expect such
employees to forfeit voluntarily approximately 762,000 of unvested
restricted stock units and partnership units. Balance Sheet We
continue to maintain a strong balance sheet, holding liquid assets
available for operations and investments of $218.6 million. During
the quarter we repurchased approximately 170,000 shares of Class A
common stock pursuant to our Share Repurchase Program and net
settlement of stock-based compensation awards. Corporate Reporting
Other U.S. GAAP Expenses Included in the first quarter 2009 and
2008 U.S. GAAP results are the following expenses that have been
excluded from the Adjusted Pro Forma results: -- $1.1 million of
charges for the three months ended March 31, 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. -- The
amortization of intangibles associated with the acquisitions of
Protego and Braveheart. -- $7.5 million in expense included in
Employee Compensation and Benefits for the three months ended March
31, 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. -- $0.3 million of charges
for the three months ended March 31, 2009, as Acquisition and
Transition Costs for costs incurred in connection with acquisitions
currently in process. 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 have been presented as a
reduction from the Revenues and the associated Non-compensation
Costs of $1.0 million and $0.5 million in the Adjusted Pro Forma
results for the three months ended March 31, 2009 and 2008,
respectively. Income Taxes For the three months ended March 31,
2009, Evercore's adjusted pro forma effective tax rate was
approximately 42% compared to an effective tax rate of
approximately 30% for the three months ended March 31, 2008. 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. Dividend On April 28, 2009 the Board of Directors of
Evercore declared a quarterly dividend of $0.12 per share to be
paid on June 12, 2009 to common stockholders of record on May 29,
2009. Conference Call Evercore will host a conference call to
discuss its results for the first quarter on Thursday, April 30,
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) 941-2928 (toll-free
domestic) or (480) 629-9722 (international); passcode: 4065036.
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: 4065036. 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
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, Boston, 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. 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, 2008. 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 Months Ended March 31, 2009 and 2008 A-1 Adjusted Pro Forma:
Adjusted Pro Forma Results A-2 Unaudited Condensed Consolidated
Adjusted Pro Forma Statement of Operations for the Three Months
Ended March 31, 2009 A-3 Unaudited Condensed Consolidated Adjusted
Pro Forma Statement of Operations for the Three Months Ended March
31, 2008 A-4 Adjusted Pro Forma Segment Reconciliation to U.S. GAAP
for the Three Months ended March 31, 2009 and 2008 A-5 Notes to
Unaudited Condensed Consolidated Adjusted Pro Forma Statements of
Operations A-6 EVERCORE PARTNERS INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2009 AND 2008
(dollars in thousands, except per share data) (UNAUDITED) Three
Months Ended March 31, --------------- 2009 2008 ---- ---- REVENUES
Advisory Revenue $49,058 $40,692 Investment Management Revenue 569
2,574 Other Revenue 8,590 7,214 ----- ----- TOTAL REVENUES 58,217
50,480 Interest Expense (1) 8,491 5,992 ----- ----- NET REVENUES
49,726 44,488 ------ ------ EXPENSES Employee Compensation and
Benefits 35,854 33,255 Occupancy and Equipment Rental 3,162 3,310
Professional Fees 3,824 3,477 Travel and Related Expenses 1,598
2,744 Communications and Information Services 734 642 Depreciation
and Amortization 1,057 1,081 Special Charges - 1,127 Acquisition
and Transition Costs 290 - Other Operating Expenses 1,752 1,454
----- ----- TOTAL EXPENSES 48,271 47,090 ------ ------ INCOME
(LOSS) BEFORE INCOME TAXES 1,455 (2,602) Provision (Benefit) for
Income Taxes 1,058 (294) ----- ---- NET INCOME (LOSS) 397 (2,308)
Net Income (Loss) Attributable to Noncontrolling Interest 206
(1,343) --- ------ NET INCOME (LOSS) ATTRIBUTABLE TO EVERCORE
PARTNERS INC. $191 $(965) ==== ===== Net Income (Loss) Attributable
to Evercore Partners Inc. Common Shareholders $191 $(965) Weighted
Average Shares of Class A Common Stock Outstanding: Basic 13,701
12,757 Diluted 13,992 12,757 Net Income (Loss) Per Share
Attributable to Evercore Partners Inc. Common Shareholders: Basic
$0.01 $(0.08) Diluted $0.01 $(0.08) (1) Includes interest expense
on long-term debt and interest expense on short-term repurchase
agreements. A-1 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 $1.1 million of charges
in 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. Acquisition and Transition Costs. The Company has
reflected $0.3 million of charges for the three months ended March
31, 2009, as Acquisition and Transition Costs for costs incurred in
connection with acquisitions currently in process. 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 and Braveheart. The Protego acquisition was
undertaken in contemplation of the IPO. The Braveheart acquisition
occurred on December 19, 2006. Reimbursable Expenses. The Company
has reflected the reclassification of $1.0 million and $0.5 million
of reimbursable expenses from revenue for the three months ended
March 31, 2009 and 2008, respectively. 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. A-2 EVERCORE PARTNERS INC. CONDENSED
CONSOLIDATED ADJUSTED PRO FORMA STATEMENT OF OPERATIONS THREE
MONTHS ENDED MARCH 31, 2009 (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 $49,058 (1,009) (a)
$48,049 Investment Management Revenue 569 (3) (a) 566 Other Revenue
8,590 (6,599) (b) 1,991 ----- ------ ----- TOTAL REVENUES 58,217
(7,611) 50,606 Interest Expense 8,491 (8,491) (b) - ----- ------
--- NET REVENUES 49,726 880 50,606 ------ --- ------ EXPENSES
Employee Compensation and Benefits 35,854 - 35,854 Occupancy and
Equipment Rental 3,162 - 3,162 Professional Fees 3,824 (469) (a)
3,355 Travel and Related Expenses 1,598 (432) (a) 1,166
Communications and Information Services 734 (17) (a) 717
Depreciation and Amortization 1,057 (468) (c) 589 Special Charges -
- - Acquisition and Transition Costs 290 (290) (d) - Other
Operating Expenses 1,752 (94) (a) 1,658 ----- --- ----- TOTAL
EXPENSES 48,271 (1,770) 46,501 ------ ------ ------ INCOME BEFORE
INTEREST EXPENSE ON LONG-TERM DEBT AND INCOME TAXES 1,455 2,650
4,105 Interest Expense on Long-term Debt - 1,892 (b) 1,892 ---
----- ----- INCOME BEFORE INCOME TAXES 1,455 758 2,213 Provision
for Income Taxes 1,058 (122) (e) 936 ----- ---- --- NET INCOME 397
880 1,277 Net Income (Loss) Attributable to Noncontrolling Interest
206 (734) (f) (528) --- ---- ---- NET INCOME ATTRIBUTABLE TO
EVERCORE PARTNERS INC. $191 $1,614 $1,805 ==== ====== ======
Adjusted Class A Common Stock Outstanding Basic and Diluted
Weighted Average Shares of Class A Common Stock Outstanding 12,127
- 12,127 Vested Partnership Units - 14,875 (g) 14,875 Unvested
Partnership Units 77 4,776 (g) 4,853 Vested Restricted Stock Units
- Event Based 1,209 - 1,209 Unvested Restricted Stock Units - Event
Based - 800 (g) 800 Vested Restricted Stock Units - Service Based
365 - 365 Unvested Restricted Stock Units - Service Based 141 - 141
Unvested Restricted Stock - Service Based 73 - 73 --- --- --- Total
Shares 13,992 20,451 34,443 ====== ====== ====== Net Income Per
Share Attributable to Evercore Partners Inc. Common Shareholders:
Basic $0.01 $0.05 Diluted $0.01 $0.05 A-3 EVERCORE PARTNERS INC.
CONDENSED CONSOLIDATED ADJUSTED PRO FORMA STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 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 $40,692 (294) (a)
$40,398 Investment Management Revenue 2,574 (159) (a) 2,415 Other
Revenue 7,214 (5,992) (b) 1,222 ----- ------ ----- TOTAL REVENUES
50,480 (6,445) 44,035 Interest Expense 5,992 (5,992) (b) - -----
------ --- NET REVENUES 44,488 (453) 44,035 ------ ---- ------
EXPENSES Employee Compensation and Benefits 33,255 (7,452) (h)
25,803 Occupancy and Equipment Rental 3,310 - 3,310 Professional
Fees 3,477 (208) (a) 3,269 Travel and Related Expenses 2,744 (185)
(a) 2,559 Communications and Information Services 642 (16) (a) 626
Depreciation and Amortization 1,081 (476) (c) 605 Special Charges
1,127 (1,127) (i) - Acquisition and Transition Costs - - - Other
Operating Expenses 1,454 (44) (a) 1,410 ----- --- ----- TOTAL
EXPENSES 47,090 (9,508) 37,582 ------ ------ ------ INCOME (LOSS)
BEFORE INTEREST EXPENSE ON LONG-TERM DEBT AND INCOME TAXES (2,602)
9,055 6,453 Interest Expense on Long-term Debt - - - - - - INCOME
(LOSS) BEFORE INCOME TAXES (2,602) 9,055 6,453 Provision (Benefit)
for Income Taxes (294) 2,252 (e) 1,958 ---- ----- ----- NET INCOME
(LOSS) (2,308) 6,803 4,495 Net Income (Loss) Attributable to
Noncontrolling Interest (1,343) 1,343 (f) - ------ ----- --- NET
INCOME (LOSS) ATTRIBUTABLE TO EVERCORE PARTNERS INC. $(965) $5,460
$4,495 ===== ====== ====== Adjusted Class A Common Stock
Outstanding Basic and Diluted Weighted Average Shares of Class A
Common Stock Outstanding 11,319 341 (g) 11,660 Vested Partnership
Units - 15,214 (g) 15,214 Unvested Partnership Units - 4,853 (g)
4,853 Vested Restricted Stock Units - Event Based 1,216 - 1,216
Unvested Restricted Stock Units - Event Based - 900 (g) 900 Vested
Restricted Stock Units - Service Based 222 - 222 Unvested
Restricted Stock Units - Service Based - 8 (g) 8 Unvested
Restricted Stock - Service Based - 120 (g) 120 --- --- --- Total
Shares 12,757 21,436 34,193 ====== ====== ====== Net Income (Loss)
Per Share Attributable to Evercore Partners Inc. Common
Shareholders: Basic $(0.08) $0.13 Diluted $(0.08) $0.13 A-4
EVERCORE PARTNERS INC. ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO
U.S. GAAP THREE MONTHS ENDED MARCH 31, 2009 AND 2008 (dollars in
thousands) (UNAUDITED) Three Months Ended March 31, 2009
------------------------------------------------- Adjusted Pro U.S.
GAAP Forma Basis Basis ----------------- --------- Investment
Consolidated Advisory Management Adjustments Results --------
---------- ----------- ------------ REVENUES Advisory Revenue
$48,049 $- $1,009 (a) $49,058 Investment Management Revenue - 566 3
(a) 569 Other Revenue 602 1,389 6,599 (b) 8,590 --- ----- -----
----- TOTAL REVENUES 48,651 1,955 7,611 58,217 Interest Expense - -
8,491 (b) 8,491 --- --- ----- ----- NET REVENUES 48,651 1,955 (880)
49,726 ------ ----- ---- ------ EXPENSES Employee Compensation and
Benefits 29,212 6,642 - 35,854 Non-compensation Costs 7,291 3,356
1,770 (a)(c)(d) 12,417 ----- ----- ----- ------ TOTAL EXPENSES
36,503 9,998 1,770 48,271 ------ ----- ----- ------ Income (Loss)
Before Interest Expense on Long- term Debt and Income Taxes 12,148
(8,043) (2,650) 1,455 Interest Expense on Long- term Debt - 1,892
(1,892) (b) - --- ----- ------ --- Income (Loss) Before Income
Taxes $12,148 $(9,935) $(758) $1,455 ======= ======= ===== ======
Three Months Ended March 31, 2008
------------------------------------------------- Adjusted Pro U.S.
GAAP Forma Basis Basis -------------------- --------- Investment
Consolidated Advisory Management Adjustments Results --------
---------- ----------- ------------ REVENUES Advisory Revenue
$40,398 $- $294 (a) $40,692 Investment Management Revenue - 2,415
159 (a) 2,574 Other Revenue 782 440 5,992 (b) 7,214 --- --- -----
----- TOTAL REVENUES 41,180 2,855 6,445 50,480 Interest Expense - -
5,992 (b) 5,992 --- --- ----- ----- NET REVENUES 41,180 2,855 453
44,488 ------ ----- --- ------ EXPENSES Employee Compensation and
Benefits 21,137 4,666 7,452 (h) 33,255 Non-compensation Costs 9,664
2,115 2,056 (a)(c)(i) 13,835 ----- ----- ----- ------ TOTAL
EXPENSES 30,801 6,781 9,508 47,090 ------ ----- ----- ------ Income
(Loss) Before Interest Expense on Long- term Debt and Income Taxes
10,379 (3,926) (9,055) (2,602) Interest Expense on Long- term Debt
- - - - --- --- --- --- Income (Loss) Before Income Taxes $10,379
$(3,926) $(9,055) $(2,602) ======= ======= ======= ======= A-5
Notes to Unaudited Condensed Consolidated Adjusted Pro Forma
Statements of Operations (a) The Company has reflected the
reclassification of $1.0 million and $0.5 million of reimbursable
expenses from revenue for the three months ended March 31, 2009 and
2008, respectively. (b) 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. (c) Reflects expenses associated with amortization of
intangible assets acquired in the Protego and Braveheart
acquisitions. (d) The Company has reflected $0.3 million of charges
for the three months ended March 31, 2009, as Acquisition and
Transition Costs for costs incurred in connection with acquisitions
currently in process. 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. (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, an
adjustment has been made to decrease Evercore's effective tax rate
to approximately 42% for the three months ended March 31, 2009 and
increase the effective tax rate to 30% for the three months ended
March 31, 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 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. Included in the effect tax rate for the three months ended
March 31, 2008 is a one-time net tax benefit that was realized
during the first quarter. The Company's effective tax rate would
have been approximately 41% excluding the benefit. (f) Reflects
adjustment to eliminate noncontrolling interest related to all
Evercore LP partnership units which 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. (h) 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. (i) The Company has
reflected $1.1 million of charges in the first quarter of 2008, 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.
DATASOURCE: Evercore Partners Inc. CONTACT: Investor Contact,
Robert B. Walsh, Chief Financial Officer, Evercore Partners,
+1-212-857-3100, Media Contact, Kenny Juarez, The Abernathy
MacGregor Group, for Evercore Partners, +1-212-371-5999 Web Site:
http://www.evercore.com/
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