Highlights
- Evercore reports third quarter Net Revenues of
- Progress towards strategic objectives:
o Deepening Advisory sector coverage with addition of two new Senior Managing Directors
o Ongoing build out of Investment Management platform, including commitment of
o Extension of strategic alliance with Mizuho in
- Long-term investment of
- Quarterly dividend of
For the third quarter and nine months ended
Evercore also announced today that
"Our Advisory business is performing well in the most challenging market environment which I can remember," said
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
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
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
Note: * Transactions were announced and closed during the third quarter
Expenses
Compensation costs for the third quarter and nine months ended
Non-compensation costs for the third quarter and nine months ended
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
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
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
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
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
Dividend
On
Conference Call
Evercore will host a conference call to discuss its results for the third quarter and first nine months of 2008 on
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
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
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
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
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
Special Charges. The Company has reflected
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
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
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
(b) Adjustment for reduction of compensation associated with event-based vesting of stock-based awards related to the follow-on offering (
(c) Reflects expenses associated with amortization of intangible assets acquired in the Protego and Braveheart acquisitions.
(d) The Company has reflected
(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
(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.
SOURCE Evercore Partners Inc.