Evercore Partners Reports Third Quarter 2012 Results; Increases Quarterly Dividend To $0.22 Per Share

Throughout the discussion of Evercore’s business segments, information is presented on an Adjusted Pro Forma basis, which is an unaudited non-generally accepted accounting principles (“non-GAAP”) measure. Adjusted Pro Forma results begin with information prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and then those results are adjusted to exclude certain items and reflect the conversion of vested and unvested Evercore LP Units into Class A shares. 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 facilitate an understanding of Evercore’s operating results. Evercore uses these measures to evaluate its operating performance, as well as the performance of individual employees. 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-2 through A-11 included in Annex I. These Adjusted Pro Forma amounts are allocated to the Company’s two business segments: Investment Banking and Investment Management.

Business Line Reporting

A discussion of Adjusted Pro Forma revenues and expenses from continuing operations is presented below for the Investment Banking and Investment Management segments. Unless otherwise stated, all of the financial measures presented in this discussion are Adjusted Pro Forma measures. For a reconciliation of the Adjusted Pro Forma segment data to U.S. GAAP results, see pages A-2 to A-11 in Annex I.

Investment Banking

For the third quarter, Evercore’s Investment Banking segment reported net revenues of $128.2 million, which represents a decrease of 7% year-over-year and 15% sequentially. Operating income of $27.4 million decreased by 12% from the third quarter of last year and 23% sequentially. Operating margins were 21% in comparison to 22% this time last year. For the nine months ended September 30, 2012, Investment Banking reported net revenues of $364.4 million, an increase of 10% from last year. Year-to-date operating income was $70.4 million compared to $76.8 million last year. Year-to-date operating margins were 19%, compared to 23% last year. The Company had 61 Investment Banking Senior Managing Directors as of September 30, 2012.

	Adjusted Pro Forma
	Three Months Ended												Nine Months Ended
	September 30,				June 30,				September 30,				September 30,				September 30,
	2012				2012				2011				2012				2011
	(dollars in thousands)
Net Revenues:
Investment Banking	$	127,588			$	151,397			$	138,121			$	363,605			$	330,169
Other Revenue, net		647				(187	)			230				820				949
Net Revenues		128,235				151,210				138,351				364,425				331,118
Expenses:
Employee Compensation and Benefits		77,331				89,829				85,945				221,622				200,723
Non-compensation Costs		23,504				25,858				21,301				72,373				53,568
Total Expenses		100,835				115,687				107,246				293,995				254,291
Operating Income	$	27,400			$	35,523			$	31,105			$	70,430			$	76,827
Compensation Ratio		60	%			59	%			62	%			61	%			61	%
Operating Margin		21	%			23	%			22	%			19	%			23	%
	U.S. GAAP
	Three Months Ended												Nine Months Ended
	September 30,				June 30,				September 30,				September 30,				September 30,
	2012				2012				2011				2012				2011
	(dollars in thousands)
Net Revenues:
Investment Banking	$	133,850			$	154,426			$	139,995			$	372,771			$	337,743
Other Revenue, net		(435	)			(1,262	)			(829	)			(2,407	)			(2,222	)
Net Revenues		133,415				153,164				139,166				370,364				335,521
Expenses:
Employee Compensation and Benefits		88,774				100,754				98,059				257,757				232,766
Non-compensation Costs		30,180				29,165				25,660				86,199				65,481
Special Charges		-				662				2,626				662				2,626
Total Expenses		118,954				130,581				126,345				344,618				300,873
Operating Income	$	14,461			$	22,583			$	12,821			$	25,746			$	34,648
Compensation Ratio		67	%			66	%			70	%			70	%			69	%
Operating Margin		11	%			15	%			9	%			7	%			10	%

Revenues

During the quarter, Investment Banking earned advisory fees from 147 clients (vs. 112 in Q3 2011 and 137 in Q2 2012) and fees in excess of $1 million from 30 transactions (vs. 26 in Q3 2011 and 30 in Q2 2012). For the first nine months of the year, Investment Banking earned advisory fees from 247 clients (vs. 188 last year) and fees in excess of $1 million from 77 transactions (vs. 65 last year).

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