NEW YORK--(BUSINESS WIRE)--Evercore Partners Inc. (NYSE: EVR) today announced that its Adjusted Pro Forma Net Revenues were $520.4 million for the twelve months ended December 31, 2011, compared to $372.9 million for the twelve months ended December 31, 2010. Adjusted Pro Forma Net Revenues were $111.6 million for the three months ended December 31, 2011, compared to $101.6 million and $163.1 million for the three months ended December 31, 2010 and September 30, 2011, respectively. Adjusted Pro Forma Net Income from Continuing Operations Attributable to Evercore Partners Inc. was $63.1 million, or $1.48 per share, for the twelve months ended December 31, 2011, compared to $38.1 million, or $0.95 per share, for the twelve months ended December 31, 2010. Adjusted Pro Forma Net Income from Continuing Operations Attributable to Evercore Partners Inc. was $14.1 million, or $0.32 per share, for the three months ended December 31, 2011, compared to $10.9 million, or $0.27 per share, for the three months ended December 31, 2010 and $19.8 million, or $0.46 per share, for the three months ended September 30, 2011.
U.S. GAAP Net Revenues were $524.3 million for the twelve months ended December 31, 2011, compared to $375.9 million for the twelve months ended December 31, 2010. U.S. GAAP Net Revenues were $112.8 million for the three months ended December 31, 2011, compared to $101.5 million and $163.2 million for the three months ended December 31, 2010 and September 30, 2011, respectively. U.S. GAAP Net Income from Continuing Operations Attributable to Evercore Partners Inc. was $7.9 million, or $0.27 per share, for the twelve months ended December 31, 2011, compared to $9.5 million, or $0.41 per share, for the twelve months ended December 31, 2010. U.S. GAAP Net Income (Loss) from Continuing Operations Attributable to Evercore Partners Inc. was ($3) thousand for the three months ended December 31, 2011, compared to $3.5 million, or $0.14 per share, for the three months ended December 31, 2010 and $2.0 million, or $0.06 per share, for the three months ended September 30, 2011.
The Adjusted Pro Forma compensation ratio for the trailing twelve months was 59%, down from 61% in 2010 and 60% for the twelve months ended September 30, 2011. The Adjusted Pro Forma compensation ratio for the three months ended December 31, 2011 was 56%, compared to 61% for the same period in 2010 and 62% for the three months ended September 30, 2011. The U.S. GAAP trailing twelve-month compensation ratio of 68% compares to 66% in 2010 and 68% for the twelve months ended September 30, 2011. The U.S. GAAP compensation ratio for the three months ended December 31, 2011, December 31, 2010 and September 30, 2011 was 66%, 66% and 70%, respectively.
Evercore’s quarterly results may fluctuate significantly due to the timing and amount of transaction fees earned, as well as other factors. Accordingly, financial results in any particular quarter may not be representative of future results over a longer period of time.
“2011 was a year of milestones for Evercore. Through strong teamwork among our professionals, we served a record number of clients, reinforcing our strong culture of excellence and integrity,” said Ralph Schlosstein, President and Chief Executive Officer. “We delivered record results in each of our businesses with strong top line and bottom line growth. In Investment Banking, we consistently gained market share while maintaining high levels of productivity. We invested in the future growth of our business, significantly expanding our capacity to serve clients in Europe and in strategically important industries, including energy and technology. Our early stage businesses in both Investment Banking and Investment Management are steadily increasing revenues and moving towards the black. We also continued our program of inorganic expansion, welcoming Lexicon into our Investment Banking business in the third quarter and ABS Investment Management, a leading fund of equity hedge funds manager, to Evercore at the end of the year. At the same time, we maintained our focus on delivering value to our shareholders. Our full year compensation ratio declined for the third consecutive year and our operating margins exceeded 20% in 2011, the highest level since 2007. We acquired 1.6 million shares of stock in treasury stock transactions, more than offsetting the dilutive effect of bonus equity awards, and increased our dividend for the third consecutive year. These accomplishments and the dedicated work of our team have created strong momentum as we enter 2012, and we look forward to another strong year.”
“The past year demonstrated that Evercore has become one of the strongest and most consistent investment banking firms in the world,” said Roger Altman, Executive Chairman. “We have had an exceptional record in recruiting. The Firm’s global reach has widened impressively, as we added a presence in India and South Korea last year. Our brand has never been stronger. In light of these factors, it’s not surprising that we had a record result in 2011.”
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Consolidated U.S. GAAP and Adjusted Pro Forma Selected Financial Data (Unaudited) |
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| U.S. GAAP | |||||||||||||||||||||||||||||
| Three Months Ended | % Change vs. | Twelve Months Ended | |||||||||||||||||||||||||||
| December 31, | September 30, | December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | % Change | ||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||
| Net Revenues | $ | 112,781 | $ | 163,181 | $ | 101,452 | (31 | %) | 11 | % | $ | 524,264 | $ | 375,905 | 39 | % | |||||||||||||
| Operating Income (Loss) | $ | (1,009 | ) | $ | 13,442 | $ | 9,658 | NM | NM | $ | 35,812 | $ | 36,860 | (3 | %) | ||||||||||||||
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Net Income (Loss) from Continuing |
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Operations Attributable to Evercore |
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| Partners Inc. | $ | (3 | ) | $ | 1,957 | $ | 3,519 | NM | NM | $ | 7,918 | $ | 9,471 | (16 | %) | ||||||||||||||
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Diluted Earnings Per Share from |
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Continuing Operations |
$ | - | $ | 0.06 | $ | 0.14 | NM | NM | $ | 0.27 | $ | 0.41 | (34 | %) | |||||||||||||||
| Compensation Ratio | 66 | % | 70 | % | 66 | % | 68 | % | 66 | % | |||||||||||||||||||
| Operating Margin | (1 | %) | 8 | % | 10 | % | 7 | % | 10 | % | |||||||||||||||||||
| Adjusted Pro Forma | |||||||||||||||||||||||||||||
| Three Months Ended | % Change vs. | Twelve Months Ended | |||||||||||||||||||||||||||
| December 31, | September 30, | December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | % Change | ||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||
| Net Revenues | $ | 111,624 | $ | 163,094 | $ | 101,622 | (32 | %) | 10 | % | $ | 520,352 | $ | 372,944 | 40 | % | |||||||||||||
| Operating Income | $ | 19,605 | $ | 33,383 | $ | 17,166 | (41 | %) | 14 | % | $ | 105,845 | $ | 67,026 | 58 | % | |||||||||||||
| Net Income from Continuing | |||||||||||||||||||||||||||||
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Operations Attributable to Evercore |
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Partners Inc. |
$ | 14,067 | $ | 19,792 | $ | 10,924 | (29 | %) | 29 | % | $ | 63,129 | $ | 38,122 | 66 | % | |||||||||||||
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Diluted Earnings Per Share from |
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Continuing Operations |
$ | 0.32 | $ | 0.46 | $ | 0.27 | (30 | %) | 19 | % | $ | 1.48 | $ | 0.95 | 56 | % | |||||||||||||
| Compensation Ratio | 56 | % | 62 | % | 61 | % | 59 | % | 61 | % | |||||||||||||||||||
| Operating Margin | 18 | % | 20 | % | 17 | % | 20 | % | 18 | % | |||||||||||||||||||
The above U.S. GAAP and Adjusted Pro Forma results present the continuing operations of the Company, which exclude amounts related to Evercore Asset Management (“EAM”), whose operations were discontinued during the fourth quarter of 2011. During the fourth quarter of 2011, the Company announced its plan to liquidate EAM’s business, resulting in a $1.0 million charge related to the write-off of EAM’s intangible assets in the third quarter of 2011. The Company completed the liquidation of EAM prior to December 31, 2011. See page A-1 for the full financial results of the Company including its discontinued operations.
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”) 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-10 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-10 in Annex I.
Investment Banking
Investment Banking had a record year in 2011. Net revenues of $421.4 million increased 42% in comparison to 2010, while operating income of $95.6 million increased by 45%. Operating margins increased to 23%. The Company significantly expanded its ability to serve clients during the year through the addition of new partners and the acquisition of Lexicon Partners. For the year, the Company earned advisory fees from 245 clients (183 in 2010), including fees in excess of $1 million from 94 clients (62 in 2010). The Company had 60 Investment Banking Senior Managing Directors at December 31, 2011.
| Adjusted Pro Forma | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Net Revenues: | ||||||||||||||||||||
| Investment Banking | $ | 89,485 | $ | 138,121 | $ | 75,653 | $ | 419,654 | $ | 292,001 | ||||||||||
| Other Revenue, net | 816 | 230 | 460 | 1,765 | 4,085 | |||||||||||||||
| Net Revenues | 90,301 | 138,351 | 76,113 | 421,419 | 296,086 | |||||||||||||||
| Expenses: | ||||||||||||||||||||
| Employee Compensation and Benefits | 49,008 | 85,945 | 47,604 | 249,731 | 178,376 | |||||||||||||||
| Non-compensation Costs | 22,543 | 21,301 | 14,563 | 76,111 | 51,990 | |||||||||||||||
| Total Expenses | 71,551 | 107,246 | 62,167 | 325,842 | 230,366 | |||||||||||||||
| Operating Income | $ | 18,750 | $ | 31,105 | $ | 13,946 | $ | 95,577 | $ | 65,720 | ||||||||||
| Compensation Ratio | 54 | % | 62 | % | 63 | % | 59 | % | 60 | % | ||||||||||
| Operating Margin | 21 | % | 22 | % | 18 | % | 23 | % | 22 | % | ||||||||||
| U.S. GAAP | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Net Revenues: | ||||||||||||||||||||
| Investment Banking | $ | 92,854 | $ | 139,995 | $ | 77,137 | $ | 430,597 | $ | 301,931 | ||||||||||
| Other Revenue, net | (251 | ) | (829 | ) | (590 | ) | (2,473 | ) | (84 | ) | ||||||||||
| Net Revenues | 92,603 | 139,166 | 76,547 | 428,124 | 301,847 | |||||||||||||||
| Expenses: | ||||||||||||||||||||
| Employee Compensation and Benefits | 61,304 | 98,059 | 51,986 | 294,070 | 195,908 | |||||||||||||||
| Non-compensation Costs | 30,032 | 25,660 | 16,532 | 95,513 | 63,812 | |||||||||||||||
| Special Charges | 1,268 | 2,626 | - | 3,894 | - | |||||||||||||||
| Total Expenses | 92,604 | 126,345 | 68,518 | 393,477 | 259,720 | |||||||||||||||
| Operating Income (Loss) | $ | (1 | ) | $ | 12,821 | $ | 8,029 | $ | 34,647 | $ | 42,127 | |||||||||
| Compensation Ratio | 66 | % | 70 | % | 68 | % | 69 | % | 65 | % | ||||||||||
| Operating Margin | (0 | %) | 9 | % | 10 | % | 8 | % | 14 | % | ||||||||||
Evercore’s Investment Banking segment reported net revenues this quarter of $90.3 million, up 19% from Q4 2010 but down 35% from last quarter’s record. Operating Income of $18.8 million increased 34% compared to Q4 2010 and decreased 40% compared to Q3 2011.
Revenues
Revenues were $89.5 million in the fourth quarter, an 18% increase in comparison with the prior year’s quarter and a 35% decrease in comparison with the prior quarter. Investment Banking earned advisory fees from 127 clients in the fourth quarter (91 in Q4 2010), and fees in excess of $1 million from 26 clients during Q4 2011 (20 in Q4 2010). During the quarter we advised on several of the most prominent announced transactions, including Kinder Morgan’s acquisition of El Paso, ITOCHU on its acquisition of Samson Investment Corporation and Forsakrings AB Skandia’s sale to Livforsakrings AB Skandia. The Institutional Equities business continued to gain traction with clients, both in terms of research coverage and fee-paying clients and the Private Funds Group closed three capital raises during the quarter.
Expenses
For the three months ended December 31, 2011, compensation costs were $49.0 million, an increase of 3% from Q4 2010 and a decrease of 43% from Q3 2011. The trailing twelve-month compensation ratio was 59%, down from 60% in Q4 2010 and 61% in Q3 2011. For the three months ended December 31, 2011, Evercore’s Investment Banking compensation ratio was 54%, versus the compensation ratio reported for the three months ended December 31, 2010 and September 30, 2011 of 63% and 62%, respectively.
Non-compensation costs for the three months ended December 31, 2011 of $22.5 million increased from the same period last year and in comparison to last quarter. The ratio of non-compensation costs to revenue for the three and twelve months ended December 31, 2011 were 25% and 18%, respectively. The increase in costs was attributable to the inclusion of Lexicon personnel in our consolidated results, the addition of other experienced personnel and higher occupancy and travel costs reflecting our growth.
New Business Update
The Institutional Equities business is now composed of 67 professionals. The Research team has expanded the number of companies under coverage to 227 and the sales force has now opened accounts with 234 clients. For the three months ended December 31, 2011 the business generated $4.7 million in revenues, a 7% increase over the prior quarter. Expenses were $10.5 million for the quarter, an increase of 13% in comparison to the prior quarter due to a full quarter’s effect of recent headcount growth.
Investment Management
Investment Management also had a record year in 2011, reporting net revenues and operating income of $98.9 million and $10.3 million, respectively. The operating margin of 10% for fiscal 2011 increased five-fold in comparison to the year ended December 31, 2010. Investment Management continued to expand its client service capability in 2011, adding a Midwest coverage team at Evercore Wealth Management and completing its investment in ABS Investment Management, a leading fund of equity hedge funds managers with $3.5 billion of AUM, in December 2011. At December 31, 2011 Investment Management had $13.0 billion of AUM.
| Adjusted Pro Forma | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
| Net Revenues: | (dollars in thousands) | |||||||||||||||||||
| Investment Management Revenues | $ | 21,251 | $ | 24,557 | $ | 25,362 | $ | 98,375 | $ | 73,885 | ||||||||||
| Other Revenue, net | 72 | 186 | 147 | 558 | 2,973 | |||||||||||||||
| Net Revenues | 21,323 | 24,743 | 25,509 | 98,933 | 76,858 | |||||||||||||||
| Expenses: | ||||||||||||||||||||
| Employee Compensation and Benefits | 13,022 | 14,834 | 14,274 | 58,235 | 48,540 | |||||||||||||||
| Non-compensation Costs | 7,446 | 7,631 | 8,015 | 30,430 | 27,012 | |||||||||||||||
| Total Expenses | 20,468 | 22,465 | 22,289 | 88,665 | 75,552 | |||||||||||||||
| Operating Income | $ | 855 | $ | 2,278 | $ | 3,220 | $ | 10,268 | $ | 1,306 | ||||||||||
| Compensation Ratio | 61 | % | 60 | % | 56 | % | 59 | % | 63 | % | ||||||||||
| Operating Margin | 4 | % | 9 | % | 13 | % | 10 | % | 2 | % | ||||||||||
| U.S. GAAP | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
| Net Revenues: | (dollars in thousands) | |||||||||||||||||||
| Investment Management Revenues | $ | 21,007 | $ | 24,723 | $ | 25,646 | $ | 99,161 | $ | 74,610 | ||||||||||
| Other Revenue, net | (829 | ) | (708 | ) | (741 | ) | (3,021 | ) | (552 | ) | ||||||||||
| Net Revenues | 20,178 | 24,015 | 24,905 | 96,140 | 74,058 | |||||||||||||||
| Expenses: | ||||||||||||||||||||
| Employee Compensation and Benefits | 13,576 | 15,575 | 15,026 | 63,610 | 51,829 | |||||||||||||||
| Non-compensation Costs | 7,610 | 7,819 | 8,250 | 31,365 | 27,496 | |||||||||||||||
| Total Expenses | 21,186 | 23,394 | 23,276 | 94,975 | 79,325 | |||||||||||||||
| Operating Income (Loss) | $ | (1,008 | ) | $ | 621 | $ | 1,629 | $ | 1,165 | $ | (5,267 | ) | ||||||||
| Compensation Ratio | 67 | % | 65 | % | 60 | % | 66 | % | 70 | % | ||||||||||
| Operating Margin | (5 | %) | 3 | % | 7 | % | 1 | % | (7 | %) | ||||||||||
Investment Management Net Revenues of $21.3 million for the quarter decreased 16% and 14% from Q4 2010 and Q3 2011, respectively. Operating income of $0.9 million for the fourth quarter decreased relative to last year’s fourth quarter due primarily to realized and unrealized gains in last year’s quarter from the private equity portfolio. AUM of $13.0 billion represents a decrease of 1% from Q3 2011 on net outflows of $0.8 billion, partially offset by $0.6 billion of market appreciation, and a decrease of 23% from the prior year end.
Revenues
| Investment Management Revenue Components | ||||||||||||||||||||
| Adjusted Pro Forma | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
| Management Fees | (dollars in thousands) | |||||||||||||||||||
| Wealth Management | $ | 4,137 | $ | 3,927 | $ | 2,894 | $ | 15,296 | $ | 9,826 | ||||||||||
| Institutional Asset Management (1) | 13,828 | 16,016 | 17,304 | 65,220 | 48,542 | |||||||||||||||
| Private Equity | 2,437 | 1,678 | 1,915 | 7,544 | 8,396 | |||||||||||||||
| Total Management Fees | 20,402 | 21,621 | 22,113 | 88,060 | 66,764 | |||||||||||||||
| Realized and Unrealized Gains (Losses) | ||||||||||||||||||||
| Institutional Asset Management | 871 | 1,269 | 1,670 | 4,297 | 5,546 | |||||||||||||||
| Private Equity | (348 | ) | 1,728 | 1,711 | 6,200 | 2,148 | ||||||||||||||
| Total Realized and Unrealized Gains (Losses) | 523 | 2,997 | 3,381 | 10,497 | 7,694 | |||||||||||||||
| Equity in Affiliate Managers (2) | 326 | (61 | ) | (132 | ) | (182 | ) | (573 | ) | |||||||||||
| Investment Management Revenues | $ | 21,251 | $ | 24,557 | $ | 25,362 | $ | 98,375 | $ | 73,885 | ||||||||||
| (1) Management fees from Institutional Asset Management were $13.9 million, $16.1 million and $65.8 million for the three months ended December 31, 2011, September 30, 2011 and twelve months ended December 31, 2011, respectively, on a U.S. GAAP basis, excluding the reduction of revenues for client-related expenses. |
| (2) Equity in Pan, G5 and ABS on a U.S. GAAP basis are reclassified from Investment Management Revenue to Income (Loss) from Equity Method Investments. |
Management and Investment Advisory fees of $20.4 million decreased for the three months ended December 31, 2011 compared to the same period of 2010, as higher management fees in Private Equity were offset by lower AUM in Institutional Asset Management. Management fees earned in the fourth quarter declined in comparison to the fees earned in the third quarter of 2011 reflecting the decline in AUM reported at the end of the third quarter.
Expenses
Fourth quarter expenses decreased modestly in comparison to last quarter. Non-compensation costs included $1.6 million related to the amortization of acquired intangible assets for the three months ended December 31, 2011.
Other U.S. GAAP Expenses
Evercore’s Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. for the three and twelve months ended December 31, 2011 was higher than U.S. GAAP as a result of the exclusion of expenses associated with the vesting of IPO equity awards and awards granted in conjunction with the Lexicon acquisition and certain business acquisition related costs, including certain Lexicon costs that are included for U.S. GAAP purposes because such costs were contingent upon the closing of the acquisition. In addition, for Adjusted Pro Forma purposes, client related expenses and expenses associated with revenue-sharing engagements with third parties have been presented as a reduction from Revenues and Non-compensation costs. Further details of these expenses, as well as an explanation of similar expenses for the three and twelve months ended December 31, 2010 and the three months ended September 30, 2011, are included in Annex I, pages A-2 to A-10.
Noncontrolling Interests
Noncontrolling Interests in certain subsidiaries are owned by the principals and strategic investors in these businesses. Evercore’s equity ownership percentages in these businesses range from 51% to 86%. For the periods ended December 31, 2011 and 2010 and September 30, 2011 the gain (loss) allocated to noncontrolling interests was as follows:
| Net Gain (Loss) Allocated to Noncontrolling Interests | |||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||
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Segment |
(dollars in thousands) | ||||||||||||||||||||
| Investment Banking (1) | $ | (2,112 | ) | $ | (1,754 | ) | $ | (2,752 | ) | $ | (5,553 | ) | $ | (4,678 | ) | ||||||
| Investment Management (1) | (1 | ) | 822 | 661 | 2,616 | 974 | |||||||||||||||
| Total | $ | (2,113 | ) | $ | (932 | ) | $ | (2,091 | ) | $ | (2,937 | ) | $ | (3,704 | ) | ||||||
| (1) The difference between Adjusted Pro Forma and U.S. GAAP Noncontrolling Interests relates primarily to intangible amortization expense which is eliminated for ETC. |
Income Taxes
For the three and twelve months ended December 31, 2011, Evercore’s Adjusted Pro Forma effective tax rate was 32.2% and 38.6%, respectively, compared to 42.0% for the three and twelve months ended December 31, 2010.
For the three and twelve months ended December 31, 2011, Evercore’s U.S. GAAP effective tax rate was approximately (143.2%) and 61.9%, respectively, compared to 46.2% and 44.6% for the three and twelve months ended December 31, 2010, respectively. The effective tax rate for U.S. GAAP purposes reflects significant adjustments relating to the tax treatment of certain compensation transactions, as well as the noncontrolling interest associated with Evercore LP Units.
Balance Sheet
The Company continues to maintain a strong balance sheet, holding cash, cash equivalents and marketable securities of $264.2 million at December 31, 2011. Current assets exceed current liabilities by $180.5 million at December 31, 2011. Amounts due related to the Long-Term Notes Payable were $99.7 million at December 31, 2011.
During the quarter the Company repurchased approximately 366,000 shares at an average cost of $27.39 per share.
Dividend
On January 31, 2012, the Board of Directors of Evercore declared a quarterly dividend of $0.20 per share to be paid on March 9, 2012 to common stockholders of record on February 24, 2012.
Conference Call
Investors and analysts may participate in the live conference call by dialing (866) 831-6291 (toll-free domestic) or (617) 213-8860 (international); passcode: 36614063. 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 (888) 286-8010 (toll-free domestic) or (617) 801-6888 (international); passcode: 55939850. A live webcast of the conference call will be available on the Investor Relations section of Evercore’s website at www.evercore.com. The webcast will be archived on Evercore’s website for 30 days after the call.
About Evercore Partners
Evercore Partners is a leading independent investment banking advisory firm. Evercore’s Investment Banking business advises its clients on mergers, acquisitions, divestitures, restructurings, financings, public offerings, private placements and other strategic transactions and also provides institutional investors with high quality research, sales and trading execution that is free of the conflicts created by proprietary activities; Evercore’s Investment Management business comprises wealth management, institutional asset management and private equity investing. Evercore serves a diverse set of clients around the world from its offices in New York, Boston, Chicago, Houston, Los Angeles, Minneapolis, San Francisco, Washington D.C., London, Aberdeen, Scotland, Mexico City and Monterrey, Mexico, Hong Kong and Rio de Janeiro and São Paulo, Brazil. More information about Evercore can be found on the Company’s website at www.evercore.com.
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 management’s view of operating results. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation of U.S. GAAP results to Adjusted Pro Forma results is presented in the tables included in Annex I.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect our current views with respect to, among other things, Evercore’s operations and financial performance. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. All statements other than statements of historical fact included in this presentation are forward-looking statements and are based on various underlying assumptions and expectations and are subject to known and unknown risks, uncertainties and assumptions, and may include projections of our future financial performance based on our growth strategies and anticipated trends in Evercore’s business. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Evercore believes these factors include, but are not limited to, those described under “Risk Factors” discussed in Evercore’s Annual Report on Form 10-K for the year ended December 31, 2010, subsequent quarterly reports on Form 10-Q, current reports in Form 8-K and Registration Statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release. In addition, new risks and uncertainties emerge from time to time, and it is not possible for Evercore to predict all risks and uncertainties, nor can Evercore assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Accordingly, you should not rely upon forward-looking statements as a prediction of actual results and Evercore does not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. Evercore undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
With respect to any securities offered by any private equity fund referenced herein, such securities have not been and will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
|
ANNEX I |
|
| Schedule | Page Number |
| Unaudited Condensed Consolidated Statements of Operations for the | A-1 |
| Three and Twelve Months Ended December 31, 2011 and 2010 | |
| Adjusted Pro Forma: | |
| Adjusted Pro Forma Results | A-2 |
| U.S. GAAP Reconciliation to Adjusted Pro Forma (Unaudited) | A-4 |
| Adjusted Pro Forma Segment Reconciliation to U.S. GAAP for the Three | A-6 |
| and Twelve Months ended December 31, 2011 (Unaudited) | |
| Adjusted Pro Forma Segment Reconciliation to U.S. GAAP for the Three | A-7 |
| Months ended September 30, 2011 (Unaudited) | |
| Adjusted Pro Forma Segment Reconciliation to U.S. GAAP for the Three | A-8 |
| and Twelve Months ended December 31, 2010 (Unaudited) | |
| Notes to Unaudited Condensed Consolidated Adjusted Pro Forma | A-9 |
| Financial Data | |
| EVERCORE PARTNERS INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010 | ||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||
| (UNAUDITED) | ||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenues | ||||||||||||||||
| Investment Banking Revenue | $ | 92,854 | $ | 77,137 | $ | 430,597 | $ | 301,931 | ||||||||
| Investment Management Revenue | 21,007 | 25,646 | 99,161 | 74,610 | ||||||||||||
| Other Revenue | 2,895 | 4,120 | 13,897 | 22,205 | ||||||||||||
| Total Revenues | 116,756 | 106,903 | 543,655 | 398,746 | ||||||||||||
| Interest Expense (1) | 3,975 | 5,451 | 19,391 | 22,841 | ||||||||||||
| Net Revenues | 112,781 | 101,452 | 524,264 | 375,905 | ||||||||||||
| Expenses | ||||||||||||||||
| Employee Compensation and Benefits | 74,880 | 67,012 | 357,680 | 247,737 | ||||||||||||
| Occupancy and Equipment Rental | 6,730 | 5,183 | 23,497 | 18,081 | ||||||||||||
| Professional Fees | 8,112 | 7,699 | 33,516 | 28,035 | ||||||||||||
| Travel and Related Expenses | 7,387 | 4,771 | 23,172 | 16,475 | ||||||||||||
| Communications and Information Services | 2,755 | 1,715 | 8,303 | 5,664 | ||||||||||||
| Depreciation and Amortization | 6,864 | 3,361 | 17,746 | 9,921 | ||||||||||||
| Special Charges | 1,268 | - | 3,894 | - | ||||||||||||
| Acquisition and Transition Costs | 1,153 | 278 | 3,465 | 3,399 | ||||||||||||
| Other Operating Expenses | 4,641 | 1,775 | 17,179 | 9,733 | ||||||||||||
| Total Expenses | 113,790 | 91,794 | 488,452 | 339,045 | ||||||||||||
|
Income (Loss) Before Income (Loss) from Equity Method |
||||||||||||||||
|
Investments and Income Taxes |
(1,009 | ) | 9,658 | 35,812 | 36,860 | |||||||||||
| Income (Loss) from Equity Method Investments | 255 | (116 | ) | 919 | (557 | ) | ||||||||||
| Income (Loss) Before Income Taxes | (754 | ) | 9,542 | 36,731 | 36,303 | |||||||||||
| Provision for Income Taxes | 1,080 | 4,413 | 22,724 | 16,177 | ||||||||||||
| Net Income (Loss) from Continuing Operations | (1,834 | ) | 5,129 | 14,007 | 20,126 | |||||||||||
| Discontinued Operations | ||||||||||||||||
| Income (Loss) from Discontinued Operations | (1,443 | ) | (799 | ) | (4,198 | ) | (2,618 | ) | ||||||||
| Provision (Benefit) for Income Taxes | 61 | (41 | ) | (722 | ) | (297 | ) | |||||||||
| Net Income (Loss) Attributable to Noncontrolling Interest | (851 | ) | (526 | ) | (2,510 | ) | (1,804 | ) | ||||||||
| Net Income (Loss) from Discontinued Operations | (653 | ) | (232 | ) | (966 | ) | (517 | ) | ||||||||
| Net Income (Loss) | (2,487 | ) | 4,897 | 13,041 | 19,609 | |||||||||||
| Net Income (Loss) Attributable to Noncontrolling Interest | (1,831 | ) | 1,610 | 6,089 | 10,655 | |||||||||||
| Net Income (Loss) Attributable to Evercore Partners Inc. | $ | (656 | ) | $ | 3,287 | $ | 6,952 | $ | 8,954 | |||||||
| Net Income (Loss) Attributable to Evercore | ||||||||||||||||
| Partners Inc. Common Shareholders: | ||||||||||||||||
| From Continuing Operations | $ | (24 | ) | $ | 3,498 | $ | 7,834 | $ | 9,397 | |||||||
| From Discontinued Operations | (653 | ) | (232 | ) | (966 | ) | (517 | ) | ||||||||
| Net Income (Loss) Attributable to Evercore Partners Inc. | $ | (677 | ) | $ | 3,266 | $ | 6,868 | $ | 8,880 | |||||||
| Weighted Average Shares of Class A Common | ||||||||||||||||
| Stock Outstanding: | ||||||||||||||||
| Basic | 28,609 | 21,892 | 26,019 | 19,655 | ||||||||||||
| Diluted | 28,609 | 25,353 | 29,397 | 22,968 | ||||||||||||
|
Basic Net Income (Loss) Per Share Attributable to Evercore |
||||||||||||||||
|
Partners Inc. Common Shareholders: |
||||||||||||||||
| From Continuing Operations | $ | - | $ | 0.16 | $ | 0.30 | $ | 0.47 | ||||||||
| From Discontinued Operations | (0.02 | ) | (0.01 | ) | (0.04 | ) | (0.02 | ) | ||||||||
| Net Income Attributable to Evercore Partners Inc. | $ | (0.02 | ) | $ | 0.15 | $ | 0.26 | $ | 0.45 | |||||||
|
Diluted Net Income (Loss) Per Share Attributable to Evercore |
||||||||||||||||
|
Partners Inc. Common Shareholders: |
||||||||||||||||
| From Continuing Operations | $ | - | $ | 0.14 | $ | 0.27 | $ | 0.41 | ||||||||
| From Discontinued Operations | (0.02 | ) | (0.01 | ) | (0.04 | ) | (0.02 | ) | ||||||||
| Net Income (Loss) Attributable to Evercore Partners Inc. | $ | (0.02 | ) | $ | 0.13 | $ | 0.23 | $ | 0.39 | |||||||
1 Includes interest expense on long-term debt and interest expense on short-term repurchase agreements.
Adjusted Pro Forma Results
Throughout the discussion of Evercore’s business segments, information is presented on an Adjusted Pro Forma basis, which is a 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”), adjusted to exclude certain items and reflect the conversion of vested and unvested Evercore LP Units, and other IPO related restricted stock unit awards, 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. The Company 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. These Adjusted Pro Forma amounts are allocated to the Company’s two business segments: Investment Banking and Investment Management. The differences between Adjusted Pro Forma and U.S. GAAP results are as follows:
| 1. |
Assumed Vesting of Evercore LP Units and Exchange into Class A Shares. The Company incurred expenses, primarily, in Employee Compensation and Benefits, resulting from the modification of Evercore LP Units, which will vest generally over a five-year period. The Adjusted Pro Forma results assume these LP Units have vested and have been exchanged for Class A shares. Accordingly, any expense associated with these units and related awards is excluded from Adjusted Pro Forma results and the noncontrolling interest related to these units is converted to controlling interest. The Company’s Management believes that it is useful to provide the per-share effect associated with the assumed conversion of these previously granted but unvested equity, and thus the Adjusted Pro Forma results reflect the vesting of all unvested Evercore LP partnership units and IPO related restricted stock unit awards. |
|||||
| 2. |
Vesting of Contingently Vested Equity Awards. The Company incurred expenses in Employee Compensation and Benefits, resulting from the vesting of awards issued at the time of the IPO. These awards 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 June 2011 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 stock-based awards. The completion of the June 2011 offering resulted in Messrs. Altman, Beutner and Aspe, and trusts benefiting their families and permitted transferees, collectively, ceasing to beneficially own at least 50% of the aggregate Evercore LP partnership units owned by them on the date of the internal reorganization, resulting in the vesting of these awards. |
|||||
| 3. |
Expenses Associated with Business Combinations. The following expenses resulting from business combinations have been excluded from Adjusted Pro Forma results because the Company’s Management believes that operating performance is more comparable across periods excluding the effects of these acquisition-related charges; |
|||||
|
a. Amortization of Intangible Assets. Amortization of intangible assets related to the Protego acquisition, the Braveheart acquisition and the acquisitions of SFS and Lexicon. |
||||||
|
b. Compensation Charges. Expenses for deferred share-based and cash consideration and retention awards associated with the acquisition of Lexicon, as well as base salary adjustments for Lexicon employees for the period preceding the acquisition. |
||||||
|
c. Special Charges. Expenses related to the charge associated with lease commitments for exited office space in conjunction with the acquisition of Lexicon as well as for other professional fees in connection with the Lexicon acquisition. |
||||||
| 4. |
Client Related Expenses. The Company has reflected the reclassification of client related expenses, expenses associated with revenue sharing engagements with third parties and provisions for uncollected receivables, as a reduction of revenue. The Company’s Management believes that this adjustment results in more meaningful key operating ratios, such as compensation to net revenues and operating margin. |
|||||
| 5. |
Income Taxes. Evercore is organized as a series of Limited Liability Companies, Partnerships, a C-Corporation and a Public Corporation and therefore, not all of the Company’s income is subject to corporate-level taxes. As a result, adjustments have been made to the Adjusted Pro Forma earnings to assume that the Company has adopted a conventional corporate tax structure and is taxed as a C-Corporation in the U.S. at the prevailing corporate rates, that all deferred tax assets relating to foreign operations are fully realizable within the structure on a consolidated basis and that adjustments for deferred tax assets related to the ultimate tax deductions for equity-based compensation awards are made directly to stockholders’ equity. This assumption is consistent with the assumption that all Evercore LP Units are vested and exchanged into Class A shares, as discussed in Item 1 above, as the assumed exchange would change the tax structure of the Company. |
|||||
| 6. |
Presentation of Interest Expense. The Adjusted Pro Forma results present interest expense on short-term repurchase agreements, within the Investment Management segment, in Other Revenues, net, as the Company’s Management believes it is more meaningful to present the spread on net interest resulting from the matched financial assets and liabilities. In addition, Adjusted Pro Forma Investment Banking and Investment Management Operating Income is presented before interest expense on long-term debt, which is included in interest expense on a U.S. GAAP basis. |
|||||
| 7. |
Presentation of Income (Loss) from Equity Method Investments. The Adjusted Pro Forma results present Income (Loss) from Equity Method Investments within Revenue as the Company’s Management believes it is a more meaningful presentation. |
| EVERCORE PARTNERS INC. | ||||||||||||||||||||
| U.S. GAAP RECONCILIATION TO ADJUSTED PRO FORMA | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
||||||||||||||||
|
2011 |
2011 |
2010 | 2011 |
2010 |
||||||||||||||||
| Net Revenues - U.S. GAAP (a) | $ | 112,781 | $ | 163,181 | $ | 101,452 | $ | 524,264 | $ | 375,905 | ||||||||||
| Client Related Expenses (1) | (3,380 | ) | (2,235 | ) | (1,652 | ) | (12,648 | ) | (10,098 | ) | ||||||||||
| Income (Loss) from Equity Method Investments (2) | 255 | 195 | (116 | ) | 919 | (557 | ) | |||||||||||||
| Interest Expense on Long-term Debt (3) | 1,968 | 1,953 | 1,938 | 7,817 | 7,694 | |||||||||||||||
| Net Revenues - Adjusted Pro Forma (a) | $ | 111,624 | $ | 163,094 | $ | 101,622 | $ | 520,352 | $ | 372,944 | ||||||||||
| Compensation Expense - U.S. GAAP (a) | $ | 74,880 | $ | 113,634 | $ | 67,012 | $ | 357,680 | $ | 247,737 | ||||||||||
| Amortization of LP Units and Certain Other Awards (4) | (5,961 | ) | (5,126 | ) | (5,134 | ) | (23,707 | ) | (20,821 | ) | ||||||||||
| IPO Related Restricted Stock Unit Awards (5) | - | - | - | (11,389 | ) | - | ||||||||||||||
| Acquisition Related Compensation Charges (6) | (6,889 | ) | (7,729 | ) | - | (14,618 | ) | - | ||||||||||||
| Compensation Expense - Adjusted Pro Forma (a) | $ | 62,030 | $ | 100,779 | $ | 61,878 | $ | 307,966 | $ | 226,916 | ||||||||||
| Operating Income (Loss) - U.S. GAAP (a) | $ | (1,009 | ) | $ | 13,442 | $ | 9,658 | $ | 35,812 | $ | 36,860 | |||||||||
| Income (Loss) from Equity Method Investments (2) | 255 | 195 | (116 | ) | 919 | (557 | ) | |||||||||||||
| Pre-Tax Income (Loss) - U.S. GAAP (a) | (754 | ) | 13,637 | 9,542 | 36,731 | 36,303 | ||||||||||||||
| Amortization of LP Units and Certain Other Awards (4) | 6,279 | 5,321 | 5,134 | 24,220 | 20,821 | |||||||||||||||
| IPO Related Restricted Stock Unit Awards (5) | - | - | - | 11,389 | - | |||||||||||||||
| Acquisition Related Compensation Charges (6) | 6,889 | 7,729 | - | 14,618 | - | |||||||||||||||
| Special Charges (7) | 1,268 | 2,626 | - | 3,894 | - | |||||||||||||||
| Intangible Asset Amortization (8) | 3,955 | 2,117 | 552 | 7,176 | 2,208 | |||||||||||||||
| Pre-Tax Income - Adjusted Pro Forma (a) | 17,637 | 31,430 | 15,228 | 98,028 | 59,332 | |||||||||||||||
| Interest Expense on Long-term Debt (3) | 1,968 | 1,953 | 1,938 | 7,817 | 7,694 | |||||||||||||||
| Operating Income - Adjusted Pro Forma (a) | $ | 19,605 | $ | 33,383 | $ | 17,166 | $ | 105,845 | $ | 67,026 | ||||||||||
| Provision for Income Taxes - U.S. GAAP (a) | $ | 1,080 | $ | 11,144 | $ | 4,413 | $ | 22,724 | $ | 16,177 | ||||||||||
| Income Taxes (9) | 4,603 | 1,426 | 1,982 | 15,112 | 8,737 | |||||||||||||||
| Provision for Income Taxes - Adjusted Pro Forma (a) | $ | 5,683 | $ | 12,570 | $ | 6,395 | $ | 37,836 | $ | 24,914 | ||||||||||
| Net Income (Loss) from Continuing Operations (a) | $ | (1,834 | ) | $ | 2,493 | $ | 5,129 | $ | 14,007 | $ | 20,126 | |||||||||
| Net Income (Loss) Attributable to Noncontrolling Interest (a) | (1,831 | ) | 536 | 1,610 | 6,089 | 10,655 | ||||||||||||||
|
Net Income (Loss) from Continuing Operations Attributable to Evercore |
||||||||||||||||||||
|
Partners Inc. - U.S. GAAP (a) |
(3 | ) | 1,957 | 3,519 | 7,918 | 9,471 | ||||||||||||||
| Amortization of LP Units and Certain Other Awards (4) | 6,279 | 5,321 | 5,134 | 24,220 | 20,821 | |||||||||||||||
| IPO Related Restricted Stock Unit Awards (5) | - | - | - | 11,389 | - | |||||||||||||||
| Acquisition Related Compensation Charges (6) | 6,889 | 7,729 | - | 14,618 | - | |||||||||||||||
| Special Charges (7) | 1,268 | 2,626 | - | 3,894 | - | |||||||||||||||
| Intangible Asset Amortization (8) | 3,955 | 2,117 | 552 | 7,176 | 2,208 | |||||||||||||||
| Income Taxes (9) | (4,603 | ) | (1,426 | ) | (1,982 | ) | (15,112 | ) | (8,737 | ) | ||||||||||
| Noncontrolling Interest (10) | 282 | 1,468 | 3,701 | 9,026 | 14,359 | |||||||||||||||
|
Net Income from Continuing Operations Attributable to Evercore Partners Inc. - |
||||||||||||||||||||
| Adjusted Pro Forma (a) | $ | 14,067 | $ | 19,792 | $ | 10,924 | $ | 63,129 | $ | 38,122 | ||||||||||
| Diluted Shares Outstanding - U.S. GAAP | 28,609 | 31,235 | 25,353 | 29,397 | 22,968 | |||||||||||||||
| Warrants (11) | 844 | - | - | - | - | |||||||||||||||
| Vested Partnership Units (11) | 6,475 | 6,444 | 9,795 | 7,918 | 11,914 | |||||||||||||||
| Unvested Partnership Units (11) | 4,389 | 4,447 | 4,540 | 4,473 | 4,540 | |||||||||||||||
| Unvested Restricted Stock Units - Event Based (11) | 12 | 12 | 633 | 276 | 633 | |||||||||||||||
| Acquisition Related Share Issuance (6) | 2,018 | 815 | - | 569 | - | |||||||||||||||
| Unvested Restricted Stock - Service Based (11) | 1,552 | - | - | - | - | |||||||||||||||
| Diluted Shares Outstanding - Adjusted Pro Forma | 43,899 | 42,953 | 40,321 | 42,633 | 40,055 | |||||||||||||||
|
Key Metrics: (b) |
||||||||||||||||||||
| Diluted Earnings Per Share from Continuing Operations - U.S. GAAP (c) | $ | (0.00 | ) | $ | 0.06 | $ | 0.14 | $ | 0.27 | $ | 0.41 | |||||||||
| Diluted Earnings Per Share from Continuing Operations - Adjusted Pro Forma (c) | $ | 0.32 | $ | 0.46 | $ | 0.27 | $ | 1.48 | $ | 0.95 | ||||||||||
| Compensation Ratio - U.S. GAAP | 66 | % | 70 | % | 66 | % | 68 | % | 66 | % | ||||||||||
| Compensation Ratio - Adjusted Pro Forma | 56 | % | 62 | % | 61 | % | 59 | % | 61 | % | ||||||||||
| Operating Margin - U.S. GAAP | -1 | % | 8 | % | 10 | % | 7 | % | 10 | % | ||||||||||
| Operating Margin - Adjusted Pro Forma | 18 | % | 20 | % | 17 | % | 20 | % | 18 | % | ||||||||||
| Effective Tax Rate - U.S. GAAP | -143 | % | 82 | % | 46 | % | 62 | % | 45 | % | ||||||||||
| Effective Tax Rate - Adjusted Pro Forma | 32 | % | 40 | % | 42 | % | 39 | % | 42 | % | ||||||||||
| (a) Represents the Company's results from Continuing Operations. | |
| (b) Reconciliations of the key metrics from U.S. GAAP to Adjusted Pro Forma are a derivative of the reconciliations of their components above. | |
| (c) For Earnings Per Share purposes, Net Income Attributable to Evercore Partners Inc. is reduced by $21 of accretion for the three months ended December 31, 2011, September 30, 2011 and December 31, 2010, respectively, and $84 and $74 of accretion for the twelve months ended December 31, 2011 and 2010, respectively, related to the Company's noncontrolling interest in Trilantic Capital Partners. | |
| EVERCORE PARTNERS INC. | ||||||||||||
| U.S. GAAP RECONCILIATION TO ADJUSTED PRO FORMA | ||||||||||||
| TRAILING TWELVE MONTHS | ||||||||||||
| (dollars in thousands) | ||||||||||||
| (UNAUDITED) | ||||||||||||
| Consolidated | ||||||||||||
| Twelve Months Ended | ||||||||||||
| December 31, |
September 30, |
December 31, |
||||||||||
| 2011 |
2011 |
2010 |
||||||||||
| Net Revenues - U.S. GAAP | $ | 524,264 | $ | 512,935 | $ | 375,905 | ||||||
| Client Related Expenses (1) | (12,648 | ) | (10,920 | ) | (10,098 | ) | ||||||
| Income (Loss) from Equity Method Investments (2) | 919 | 548 | (557 | ) | ||||||||
| Interest Expense on Long-term Debt (3) | 7,817 | 7,787 | 7,694 | |||||||||
| Net Revenues - Adjusted Pro Forma | $ | 520,352 | $ | 510,350 | $ | 372,944 | ||||||
| Compensation Expense - U.S. GAAP | $ | 357,680 | $ | 349,812 | $ | 247,737 | ||||||
| Amortization of LP Units and Certain Other Awards (4) | (23,707 | ) | (22,880 | ) | (20,821 | ) | ||||||
| IPO Related Restricted Stock Unit Awards (5) | (11,389 | ) | (11,389 | ) | - | |||||||
| Acquisition Related Compensation Charges (6) | (14,618 | ) | (7,729 | ) | - | |||||||
| Compensation Expense - Adjusted Pro Forma | $ | 307,966 | $ | 307,814 | $ | 226,916 | ||||||
| Compensation Ratio - U.S. GAAP (a) | 68 | % | 68 | % | 66 | % | ||||||
| Compensation Ratio - Adjusted Pro Forma (a) | 59 | % | 60 | % | 61 | % | ||||||
| Investment Banking | ||||||||||||
| Twelve Months Ended | ||||||||||||
| December 31, |
September 30, |
December 31, |
||||||||||
| 2011 |
2011 |
2010 |
||||||||||
| Net Revenues - U.S. GAAP | $ | 428,124 | $ | 412,068 | $ | 301,847 | ||||||
| Client Related Expenses (1) | (12,044 | ) | (10,246 | ) | (9,946 | ) | ||||||
| Income from Equity Method Investments (2) | 1,101 | 1,188 | 16 | |||||||||
| Interest Expense on Long-term Debt (3) | 4,238 | 4,221 | 4,169 | |||||||||
| Net Revenues - Adjusted Pro Forma | $ | 421,419 | $ | 407,231 | $ | 296,086 | ||||||
| Compensation Expense - U.S. GAAP | $ | 294,070 | $ | 284,752 | $ | 195,908 | ||||||
| Amortization of LP Units and Certain Other Awards (4) | (20,815 | ) | (19,790 | ) | (17,532 | ) | ||||||
| IPO Related Restricted Stock Unit Awards (5) | (8,906 | ) | (8,906 | ) | - | |||||||
| Acquisition Related Compensation Charges (6) | (14,618 | ) | (7,729 | ) | - | |||||||
| Compensation Expense - Adjusted Pro Forma | $ | 249,731 | $ | 248,327 | $ | 178,376 | ||||||
| Compensation Ratio - U.S. GAAP (a) | 69 | % | 69 | % | 65 | % | ||||||
| Compensation Ratio - Adjusted Pro Forma (a) | 59 | % | 61 | % | 60 | % | ||||||
| (a) Reconciliations of the key metrics from U.S. GAAP to Adjusted Pro Forma are a derivative of the reconciliations of their components above. |
| EVERCORE PARTNERS INC. | ||||||||||||||||||||||||
| ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAP | ||||||||||||||||||||||||
| FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2011 | ||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||||
| Investment Banking Segment | ||||||||||||||||||||||||
| Three Months Ended December 31, 2011 | Twelve Months Ended December 31, 2011 | |||||||||||||||||||||||
|
|
||||||||||||||||||||||||
| Non-GAAP |
Non-GAAP |
|||||||||||||||||||||||
| Adjusted Pro | U.S. GAAP |
Adjusted Pro |
U.S. GAAP | |||||||||||||||||||||
| Forma Basis | Adjustments | Basis |
Forma Basis |
Adjustments | Basis | |||||||||||||||||||
| Net Revenues: | ||||||||||||||||||||||||
|
Investment Banking |
||||||||||||||||||||||||
|
Revenue |
$ | 89,485 | $ | 3,369 | (1)(2) | $ | 92,854 | $ | 419,654 | $ | 10,943 | (1)(2) | $ | 430,597 | ||||||||||
| Other Revenue, net | 816 | (1,067 | ) | (3) | (251 | ) | 1,765 | (4,238 | ) | (3) | (2,473 | ) | ||||||||||||
| Net Revenues | 90,301 | 2,302 | 92,603 | 421,419 | 6,705 | 428,124 | ||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||
|
Employee Compensation |
||||||||||||||||||||||||
| and Benefits | 49,008 | 12,296 | (4)(5)(6) | 61,304 | 249,731 | 44,339 | (4)(5)(6) | 294,070 | ||||||||||||||||
| Non-compensation Costs | 22,543 | 7,489 | (4)(8) | 30,032 | 76,111 | 19,402 | (4)(8) | 95,513 | ||||||||||||||||
| Special Charges | - | 1,268 |
(7) |
1,268 | - | 3,894 | (7) | 3,894 | ||||||||||||||||
| Total Expenses | 71,551 | 21,053 | 92,604 | 325,842 | 67,635 | 393,477 | ||||||||||||||||||
|
Operating Income (Loss) |
||||||||||||||||||||||||
|
from Continuing |
||||||||||||||||||||||||
| Operations | $ | 18,750 | $ | (18,751 | ) | $ | (1 | ) | $ | 95,577 | $ | (60,930 | ) | $ | 34,647 | |||||||||
| Compensation Ratio (a) | 54 | % | 66 | % | 59 | % | 69 | % | ||||||||||||||||
| Operating Margin (a) | 21 | % | (0 | %) | 23 | % | 8 | % | ||||||||||||||||
| Investment Management Segment | ||||||||||||||||||||||||
| Three Months Ended December 31, 2011 | Twelve Months Ended December 31, 2011 | |||||||||||||||||||||||
|
|
||||||||||||||||||||||||
| Non-GAAP |
Non-GAAP |
|||||||||||||||||||||||
| Adjusted Pro | U.S. GAAP |
Adjusted Pro |
U.S. GAAP | |||||||||||||||||||||
| Forma Basis | Adjustments | Basis |
Forma Basis |
Adjustments | Basis | |||||||||||||||||||
| Net Revenues: | ||||||||||||||||||||||||
|
Investment Management |
||||||||||||||||||||||||
| Revenue | $ | 21,251 | $ | (244 | ) | (1)(2) | $ | 21,007 | $ | 98,375 | $ | 786 | (1)(2) | $ | 99,161 | |||||||||
| Other Revenue, net | 72 | (901 | ) | (3) | (829 | ) | 558 | (3,579 | ) | (3) | (3,021 | ) | ||||||||||||
| Net Revenues | 21,323 | (1,145 | ) | 20,178 | 98,933 | (2,793 | ) | 96,140 | ||||||||||||||||
| Expenses: | ||||||||||||||||||||||||
|
Employee Compensation |
||||||||||||||||||||||||
| and Benefits | 13,022 | 554 | (4)(5) | 13,576 | 58,235 | 5,375 | (4)(5) | 63,610 | ||||||||||||||||
| Non-compensation Costs | 7,446 | 164 | (8) | 7,610 | 30,430 | 935 | (8) | 31,365 | ||||||||||||||||
| Total Expenses | 20,468 | 718 | 21,186 | 88,665 | 6,310 | 94,975 | ||||||||||||||||||
|
Operating Income (Loss) |
||||||||||||||||||||||||
|
from Continuing |
||||||||||||||||||||||||
| Operations | $ | 855 | $ | (1,863 | ) | $ | (1,008 | ) | $ | 10,268 | $ | (9,103 | ) | $ | 1,165 | |||||||||
| Compensation Ratio (a) | 61 | % | 67 | % | 59 | % | 66 | % | ||||||||||||||||
| Operating Margin (a) | 4 | % | (5 | %) | 10 | % | 1 | % | ||||||||||||||||
| (a) Reconciliations of the key metrics from U.S. GAAP to Adjusted Pro Forma are a derivative of the reconciliations of their components above. |
| EVERCORE PARTNERS INC. | ||||||||||||
| ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAP | ||||||||||||
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 | ||||||||||||
| (dollars in thousands) | ||||||||||||
| (UNAUDITED) | ||||||||||||
| Investment Banking Segment | ||||||||||||
| Three Months Ended September 30, 2011 | ||||||||||||
|
Non-GAAP |
||||||||||||
|
Adjusted Pro |
U.S. GAAP | |||||||||||
|
Forma Basis |
Adjustments | Basis | ||||||||||
| Net Revenues: | ||||||||||||
|
Investment Banking |
||||||||||||
| Revenue | $ | 138,121 | $ | 1,874 | (1)(2) | $ | 139,995 | |||||
| Other Revenue, net | 230 | (1,059 | ) | (3) | (829 | ) | ||||||
| Net Revenues | 138,351 | 815 | 139,166 | |||||||||
| Expenses: | ||||||||||||
|
Employee Compensation |
||||||||||||
| and Benefits | 85,945 | 12,114 | (4)(5)(6) | 98,059 | ||||||||
| Non-compensation Costs | 21,301 | 4,359 | (4)(8) | 25,660 | ||||||||
| Special Charges | - | 2,626 | (7) | 2,626 | ||||||||
| Total Expenses | 107,246 | 19,099 | 126,345 | |||||||||
|
Operating Income from |
||||||||||||
|
Continuing Operations |
$ | 31,105 | $ | (18,284 | ) | $ | 12,821 | |||||
| Compensation Ratio (a) | 62 | % | 70 | % | ||||||||
| Operating Margin (a) | 22 | % | 9 | % | ||||||||
| Investment Management Segment | ||||||||||||
| Three Months Ended September 30, 2011 | ||||||||||||
|
Non-GAAP |
||||||||||||
|
Adjusted Pro |
U.S. GAAP | |||||||||||
|
Forma Basis |
Adjustments | Basis | ||||||||||
| Net Revenues: | ||||||||||||
|
Investment Management |
||||||||||||
| Revenue | $ | 24,557 | $ | 166 | (1)(2) | $ | 24,723 | |||||
| Other Revenue, net | 186 | (894 | ) | (3) | (708 | ) | ||||||
| Net Revenues | 24,743 | (728 | ) | 24,015 | ||||||||
| Expenses: | ||||||||||||
|
Employee Compensation |
||||||||||||
| and Benefits | 14,834 | 741 | (4)(5) | 15,575 | ||||||||
| Non-compensation Costs | 7,631 | 188 | (8) | 7,819 | ||||||||
| Total Expenses | 22,465 | 929 | 23,394 | |||||||||
|
Operating Income from |
||||||||||||
|
Continuing Operations |
$ | 2,278 | $ | (1,657 | ) | $ | 621 | |||||
| Compensation Ratio (a) | 60 | % | 65 | % | ||||||||
| Operating Margin (a) | 9 | % | 3 | % | ||||||||
| (a) Reconciliations of the key metrics from U.S. GAAP to Adjusted Pro Forma are a derivative of the reconciliations of their components above. |
| EVERCORE PARTNERS INC. | ||||||||||||||||||||||||
| ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAP | ||||||||||||||||||||||||
| FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2010 | ||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||||
| Investment Banking Segment | ||||||||||||||||||||||||
| Three Months Ended December 31, 2010 | Twelve Months Ended December 31, 2010 | |||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
|
Non-GAAP |
U.S. |
Non-GAAP |
||||||||||||||||||||||
|
Adjusted Pro |
GAAP |
Adjusted Pro |
U.S. GAAP | |||||||||||||||||||||
|
Forma Basis |
Adjustments | Basis |
Forma Basis |
Adjustments | Basis | |||||||||||||||||||
| Net Revenues: | ||||||||||||||||||||||||
|
Investment Banking |
||||||||||||||||||||||||
| Revenue | $ | 75,653 | $ | 1,484 | (1)(2) | $ | 77,137 | $ | 292,001 | $ | 9,930 | (1)(2) | $ | 301,931 | ||||||||||
| Other Revenue, net | 460 | (1,050 | ) | (3) | (590 | ) | 4,085 | (4,169 | ) | (3) | (84 | ) | ||||||||||||
| Net Revenues | 76,113 | 434 | 76,547 | 296,086 | 5,761 | 301,847 | ||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||
|
Employee Compensation |
||||||||||||||||||||||||
| and Benefits | 47,604 | 4,382 | (4) | 51,986 | 178,376 | 17,532 | (4) | 195,908 | ||||||||||||||||
| Non-compensation Costs | 14,563 | 1,969 | (8) | 16,532 | 51,990 | 11,822 | (8) | 63,812 | ||||||||||||||||
| Total Expenses | 62,167 | 6,351 | 68,518 | 230,366 | 29,354 | 259,720 | ||||||||||||||||||
|
Operating Income from |
||||||||||||||||||||||||
|
Continuing Operations |
$ | 13,946 | $ | (5,917 | ) | $ | 8,029 | $ | 65,720 | $ | (23,593 | ) | $ | 42,127 | ||||||||||
| Compensation Ratio (a) | 63 | % | 68 | % | 60 | % | 65 | % | ||||||||||||||||
| Operating Margin (a) | 18 | % | 10 | % | 22 | % | 14 | % | ||||||||||||||||
| Investment Management Segment | ||||||||||||||||||||||||
| Three Months Ended December 31, 2010 | Twelve Months Ended December 31, 2010 | |||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
|
Non-GAAP |
U.S. |
Non-GAAP |
||||||||||||||||||||||
|
Adjusted Pro |
GAAP |
Adjusted Pro |
U.S. GAAP | |||||||||||||||||||||
|
Forma Basis |
Adjustments | Basis |
Forma Basis |
Adjustments | Basis | |||||||||||||||||||
| Net Revenues: | ||||||||||||||||||||||||
|
Investment Management |
||||||||||||||||||||||||
| Revenue | $ | 25,362 | $ | 284 | (1)(2) | $ | 25,646 | $ | 73,885 | $ | 725 | (1)(2) | $ | 74,610 | ||||||||||
| Other Revenue, net | 147 | (888 | ) | (3) | (741 | ) | 2,973 | (3,525 | ) | (3) | (552 | ) | ||||||||||||
| Net Revenues | 25,509 | (604 | ) | 24,905 | 76,858 | (2,800 | ) | 74,058 | ||||||||||||||||
| Expenses: | ||||||||||||||||||||||||
|
Employee Compensation |
||||||||||||||||||||||||
| and Benefits | 14,274 | 752 | (4) | 15,026 | 48,540 | 3,289 | (4) | 51,829 | ||||||||||||||||
| Non-compensation Costs | 8,015 | 235 | (8) | 8,250 | 27,012 | 484 | (8) | 27,496 | ||||||||||||||||
| Total Expenses | 22,289 | 987 | 23,276 | 75,552 | 3,773 | 79,325 | ||||||||||||||||||
|
Operating Income (Loss) |
||||||||||||||||||||||||
|
from Continuing |
||||||||||||||||||||||||
| Operations | $ | 3,220 | $ | (1,591 | ) | $ | 1,629 | $ | 1,306 | $ | (6,573 | ) | $ | (5,267 | ) | |||||||||
| Compensation Ratio (a) | 56 | % | 60 | % | 63 | % | 70 | % | ||||||||||||||||
| Operating Margin (a) | 13 | % | 7 | % | 2 | % | (7 | %) | ||||||||||||||||
| (a) Reconciliations of the key metrics from U.S. GAAP to Adjusted Pro Forma are a derivative of the reconciliations of their components above. |
Notes to Unaudited Condensed Consolidated Adjusted Pro Forma Financial Data
| (1) | The Company has reflected the reclassification of client related expenses and expenses associated with revenue sharing engagements with third parties as a reduction of revenue. | |
| (2) | Income (Loss) from Equity Method Investments is included within Revenue as the Company’s Management believes it is a more meaningful presentation. | |
| (3) | Interest Expense on Long-term Debt is excluded from the Adjusted Pro Forma Investment Banking and Investment Management segment results and is included in Interest Expense in the segment results on a U.S. GAAP Basis. | |
| (4) | The Company incurred expenses from the modification of Evercore LP Units and related awards, which primarily vest over a five-year period. | |
| (5) | The Company incurred expenses from the vesting of IPO related restricted stock unit awards relating to the June 2011 offering. | |
| (6) | Expenses for deferred share-based and cash consideration and retention awards associated with the acquisition of Lexicon, as well as base salary adjustments for Lexicon employees for the period preceding the acquisition. | |
| (7) | Expenses related to the charge associated with lease commitments for exited office space in conjunction with the acquisition of Lexicon as well as for an introducing fee in connection with the Lexicon acquisition. | |
| (8) | Non-compensation Costs on an Adjusted Pro Forma basis reflect the following adjustments; |
| Three Months Ended December 31, 2011 | ||||||||||||||||
| Investment | Investment | Total |
|
U.S. | ||||||||||||
| Banking | Management | Segments |
Adjustments |
GAAP | ||||||||||||
| Occupancy and Equipment Rental | $ | 5,389 | $ | 1,341 | $ | 6,730 | $ | - | $ | 6,730 | ||||||
| Professional Fees | 5,003 | 1,460 | 6,463 | 1,649 | (1) | 8,112 | ||||||||||
| Travel and Related Expenses | 5,379 | 594 | 5,973 | 1,414 | (1) | 7,387 | ||||||||||
| Communications and Information Services | 2,232 | 483 | 2,715 | 40 | (1) | 2,755 | ||||||||||
| Depreciation and Amortization | 1,265 | 1,644 | 2,909 | 3,955 | (8a) | 6,864 | ||||||||||
| Acquisition and Transition Costs | 225 | 928 | 1,153 | - | 1,153 | |||||||||||
| Other Operating Expenses | 3,050 | 996 | 4,046 | 595 | (1) | 4,641 | ||||||||||
|
Total Non-compensation Costs from |
||||||||||||||||
|
Continuing Operations |
$ | 22,543 | $ | 7,446 | $ | 29,989 | $ | 7,653 | $ | 37,642 | ||||||
| Three Months Ended September 30, 2011 | ||||||||||||||||
| Investment | Investment | Total | U.S. | |||||||||||||
| Banking | Management | Segments | Adjustments | GAAP | ||||||||||||
| Occupancy and Equipment Rental | $ | 4,331 | $ | 1,645 | $ | 5,976 | $ | - | $ | 5,976 | ||||||
| Professional Fees | 6,143 | 2,445 | 8,588 | 807 | (1) | 9,395 | ||||||||||
| Travel and Related Expenses | 4,309 | 525 | 4,834 | 1,022 | (1) | 5,856 | ||||||||||
| Communications and Information Services | 1,185 | 360 | 1,545 | 29 | (1) | 1,574 | ||||||||||
| Depreciation and Amortization | 1,120 | 1,649 | 2,769 | 2,117 | (8a) | 4,886 | ||||||||||
| Acquisition and Transition Costs | 1,053 | 125 | 1,178 | - | 1,178 | |||||||||||
| Other Operating Expenses | 3,160 | 882 | 4,042 | 572 | (1) | 4,614 | ||||||||||
|
Total Non-compensation Costs from |
||||||||||||||||
|
Continuing Operations |
$ | 21,301 | $ | 7,631 | $ | 28,932 | $ | 4,547 | $ | 33,479 | ||||||
| Three Months Ended December 31, 2010 | ||||||||||||||||
| Investment | Investment | Total | U.S. | |||||||||||||
| Banking | Management | Segments | Adjustments | GAAP | ||||||||||||
| Occupancy and Equipment Rental | $ | 3,705 | $ | 1,478 | $ | 5,183 | $ | - | $ | 5,183 | ||||||
| Professional Fees | 4,546 | 2,329 | 6,875 | 824 | (1) | 7,699 | ||||||||||
| Travel and Related Expenses | 3,541 | 558 | 4,099 | 672 | (1) | 4,771 | ||||||||||
| Communications and Information Services | 1,228 | 446 | 1,674 | 41 | (1) | 1,715 | ||||||||||
| Depreciation and Amortization | 1,094 | 1,715 | 2,809 | 552 | (8a) | 3,361 | ||||||||||
| Acquisition and Transition Costs | 273 | 5 | 278 | - | 278 | |||||||||||
| Other Operating Expenses | 176 | 1,484 | 1,660 | 115 | (1) | 1,775 | ||||||||||
|
Total Non-compensation Costs from |
||||||||||||||||
|
Continuing Operations |
$ | 14,563 | $ | 8,015 | $ | 22,578 | $ | 2,204 | $ | 24,782 | ||||||
| Twelve Months Ended December 31, 2011 | ||||||||||||||||
| Investment | Investment | Total | U.S. | |||||||||||||
| Banking | Management | Segments | Adjustments | GAAP | ||||||||||||
| Occupancy and Equipment Rental | $ | 17,135 | $ | 6,362 | $ | 23,497 | $ | - | $ | 23,497 | ||||||
| Professional Fees | 19,486 | 7,931 | 27,417 | 6,099 | (1) | 33,516 | ||||||||||
| Travel and Related Expenses | 15,918 | 2,226 | 18,144 | 5,028 | (1) | 23,172 | ||||||||||
| Communications and Information Services | 6,301 | 1,848 | 8,149 | 154 | (1) | 8,303 | ||||||||||
| Depreciation and Amortization | 3,921 | 6,649 | 10,570 | 7,176 | (8a) | 17,746 | ||||||||||
| Acquisition and Transition Costs | 2,192 | 1,273 | 3,465 | - | 3,465 | |||||||||||
| Other Operating Expenses | 11,158 | 4,141 | 15,299 | 1,880 | (1) | 17,179 | ||||||||||
|
Total Non-compensation Costs from |
||||||||||||||||
|
Continuing Operations |
$ | 76,111 | $ | 30,430 | $ | 106,541 | $ | 20,337 | $ | 126,878 | ||||||
| Twelve Months Ended December 31, 2010 | ||||||||||||||||
| Investment | Investment | Total | U.S. | |||||||||||||
| Banking | Management | Segments | Adjustments | GAAP | ||||||||||||
| Occupancy and Equipment Rental | $ | 12,832 | $ | 5,249 | $ | 18,081 | $ | - | $ | 18,081 | ||||||
| Professional Fees | 14,174 | 7,861 | 22,035 | 6,000 | (1) | 28,035 | ||||||||||
| Travel and Related Expenses | 11,191 | 1,624 | 12,815 | 3,660 | (1) | 16,475 | ||||||||||
| Communications and Information Services | 4,177 | 1,360 | 5,537 | 127 | (1) | 5,664 | ||||||||||
| Depreciation and Amortization | 3,414 | 4,299 | 7,713 | 2,208 | (8a) | 9,921 | ||||||||||
| Acquisition and Transition Costs | 1,456 | 1,943 | 3,399 | - | 3,399 | |||||||||||
| Other Operating Expenses | 4,746 | 4,676 | 9,422 | 311 | (1) | 9,733 | ||||||||||
|
Total Non-compensation Costs from |
||||||||||||||||
|
Continuing Operations |
$ | 51,990 | $ | 27,012 | $ | 79,002 | $ | 12,306 | $ | 91,308 | ||||||
| (8a) | Reflects expenses associated with amortization of intangible assets acquired in the Protego, Braveheart, SFS and Lexicon acquisitions. | ||
| (9) | Evercore is organized as a series of Limited Liability Companies, Partnerships, a C-Corporation and a Public Corporation and therefore, not all of the Company’s income is subject to corporate level taxes. As a result, adjustments have been made to decrease Evercore’s effective tax rate to approximately 32% and 39% for the three and twelve months ended December 31, 2011, respectively. These adjustments assume that the Company has adopted a conventional corporate tax structure and is taxed as a C-Corporation in the U.S. at the prevailing corporate rates, that all deferred tax assets relating to foreign operations are fully realizable within the structure on a consolidated basis and that, historically, adjustments for deferred tax assets related to the ultimate tax deductions for equity-based compensation awards are made directly to stockholders’ equity | . | |
| (10) | Reflects adjustment to eliminate noncontrolling interest related to all Evercore LP partnership units which are assumed to be converted to Class A common stock. | ||
| (11) | Assumes the vesting of all Evercore LP partnership units and IPO related restricted stock unit awards. In the computation of outstanding common stock equivalents for U.S. GAAP net income per share, the unvested Evercore LP partnership units are anti-dilutive and the IPO related restricted stock unit awards are excluded from the calculation prior to the June 2011 offering. |