SEC Filing - Evercore Inc.

EVERCORE PARTNERS INC.

Date: August 3, 2010

/s/ ROBERT B. WALSH

Robert B. Walsh

Chief Financial Officer

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Form 8-K

UNITED STATES

SECURITIES EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 3, 2010

EVERCORE PARTNERS INC.

(Exact name of registrant as specified in its charter)

Delaware

001-32975

20-4748747

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

55 East 52^nd Street

New York, New York

10055

(Address of principal executive offices)

(Zip Code)

(212) 857-3100

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.

Results of Operations and Financial Condition

On August 3, 2010, Evercore Partners Inc. issued a press release announcing financial results for its second quarter ended June 30, 2010.

A copy of the press release is attached hereto as Exhibit 99.1. All information in the press release is furnished but not filed.

Item 9.01

Financial Statements and Exhibits

(d) Exhibits.


99.1		Press release of Evercore Partners Inc. dated August 3, 2010.

Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are included in the attached press release. These non-GAAP financial measures should be considered in addition to and not as a substitute for, or superior to, financial measures presented in accordance with GAAP.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Press release

Exhibit 99.1

EVERCORE PARTNERS REPORTS SECOND QUARTER 2010 RESULTS;

DECLARES QUARTERLY DIVIDEND OF $0.15 PER SHARE

Highlights

•

Second Quarter Financial Summary

Net Revenues of $64.8 million, down 9% compared to the same period in 2009 and 26% from Q1 2010

Adjusted Pro Forma Net Income of $2.0 million, or $0.05 per share, down 43% compared to the second quarter of 2009 and 81% from Q1 2010

U.S. GAAP Net Income of $0.1 million in contrast to a Net Loss of $6.0 million in the same period last year

•

First Half Financial Summary

Net revenues of $149.9 million, up 23% compared to the same period in 2009

Adjusted Pro Forma Net Income of $12.4 million, up 131% compared to the first half of 2009 or $0.31 per share up 107%

U.S. GAAP Net Income of $2.1 million or $0.10 per share, up significantly from the same period last year

•

Investment Banking revenue negatively impacted by timing of deal fees and closings

In July:

•

$23.5 million of revenue relating to LyondellBasell’s emergence from bankruptcy, most of which was invoiced and paid in June, was recognized following bankruptcy court approval

•

Frontier Communications’ acquisition of certain assets from Verizon and Babcock International Group’s acquisition of VT Group, among others, closed

Advisory transactions completed during the second quarter included Carlyle Group’s sale of Vought Aircraft and RiskMetrics’ sale to MSCI

Participated in two securities offerings during the quarter

•

Investment Management revenues increased significantly to $16.3 million; operating income near break even for the quarter

•

Continued investments in future growth:

Closed Atalanta Sosnoff acquisition on May 31, 2010, increasing Assets Under Management to $15.2 billion at June 30, 2010

Expanded sector coverage in Chemicals and Energy with the addition of Phil Kassin as an Advisory Senior Managing Director, complementing the addition of Marty Cicco, Perk Hixon and Alejandro Reynoso earlier in the second quarter

Institutional Equity Research coverage commencing in the third quarter in Technology, Media & Telecommunication and Financial Institutions sectors

•

Declares quarterly dividend of $0.15 per share

•

Repurchased 551 thousand shares and share equivalents during the quarter

NEW YORK, August 3, 2010—Evercore Partners Inc. (NYSE: EVR) today announced that its Adjusted Pro Forma Net Revenues were $64.8 million for the three months ended June 30, 2010, compared to Adjusted Pro Forma Net Revenues of $71.3 million and $85.1 million for the three months ended June 30, 2009 and March 31, 2010, respectively. Adjusted Pro Forma Net Revenues were $149.9 million for the six months ended June 30, 2010, compared to $121.9 million for the six months ended June 30, 2009. Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. was $2.0 million, or $0.05 per share, for the three months ended June 30, 2010, compared to an Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. of $3.6 million, or $0.10 per share for the three months ended June 30, 2009 and $10.4 million, or $0.26 per share for the three months ended March 31, 2010. Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. was $12.4 million, or $0.31 per share, for the six months ended June 30, 2010, compared to an Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. of $5.4 million, or $0.15 per share for the six months ended June 30, 2009.

Results for the second quarter of 2010 were negatively impacted by the closing in July of several large M&A transactions which were originally scheduled to close in late June or early July. Revenues of $23.5 million relating to LyondellBasell’s emergence from bankruptcy, most of which was invoiced and paid in June, were recognized in July, following bankruptcy court approval.

U.S. GAAP Net Revenues were $64.8 million for the three months ended June 30, 2010, compared to U.S. GAAP Net Revenues of $71.0 million and $87.8 million for the three months ended June 30, 2009 and March 31, 2010, respectively. U.S. GAAP Net Revenues were $152.7 million for the six months ended June 30, 2010, compared to U.S. GAAP Net Revenues of $120.8 million for the six months ended June 30, 2009. U.S. GAAP Net Income Attributable to Evercore Partners Inc. was $0.1 million, or $0.00 per share, for the three months ended June 30, 2010, compared to U.S. GAAP Net Income (Loss) Attributable to Evercore Partners Inc. of ($6.0) million, or ($0.43) per share, for the three months ended June 30, 2009 and $2.0 million, or $0.09 per share for the three months ended March 31, 2010. U.S. GAAP Net Income Attributable to Evercore Partners Inc. was $2.1 million, or $0.10 per share, for the six months ended June 30, 2010, compared to a U.S. GAAP Net Loss Attributable to Evercore Partners Inc. of ($5.9) million, or ($0.42) per share, for the six months ended June 30, 2009.

The Adjusted Pro Forma compensation ratio for the three months ended June 30, 2010 was 63%, compared to 73% for the same period in 2009 and 59% for the three months ended March 31, 2010. The Adjusted Pro Forma Q2 2010 compensation ratio on a trailing twelve month basis of 60% improved from Q1 2010 of 62% and Q2 2009 of 77%. The U.S. GAAP compensation ratio for the three months ended June 30, 2010, June 30, 2009 and March 31, 2010 was 71%, 73% and 63%, respectively. The U.S. GAAP Q2 2010 compensation ratio on a trailing twelve month basis of 65% improved from Q1 2010 of 66% and Q2 2009 of 77%.

Evercore’s quarterly results may fluctuate significantly due to the timing and amount of transaction and performance 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.

“The fundamentals of our business are improving and our strategic initiatives are on track. Our Investment Banking business is well positioned, having experienced an improved first half relative to last year and beginning the second half of the year very strongly. We continue to pursue strategic investments in Investment Management and are making steady progress in the launch of our

Institutional Equities business,” said Ralph Schlosstein, President and Chief Executive Officer. “We are recruiting exceptional talent to our Advisory, Institutional Equities and Investment Management teams, laying the groundwork for the future growth of the Company. At the same time we are highly focused on delivering returns in the coming quarters, growing revenues and improving both our compensation ratio and our operating margins. I am particularly pleased with the performance of the Investment Management business, which delivered near break even results on an operating basis for the quarter.”

“The M&A environment continues to improve at a moderate rate this year, as we anticipated. Evercore’s M&A advisory activity has increased at a faster rate than that of the overall market, and gives us confidence in our results for the second half of this year,” said Roger Altman, Executive Chairman. “Revenues achieved thus far in the third quarter, which reflect advisory work for LyondellBasell, Frontier and Babcock International, among others, affirms our view that the environment is improving. I am also pleased with the confidence our clients are placing in our Capital Markets capabilities.”

Consolidated U.S. GAAP and Adjusted Pro Forma Selected Financial Data


	U.S. GAAP
	Three Months Ended									% Change vs.				Six Months Ended
	June 30, 2010			March 31, 2010			June 30, 2009			March 31, 2010		June 30, 2009		June 30, 2010			June 30, 2009			% Change
	(dollars in thousands)
Net Revenues	$	64,840		$	87,841		$	71,043		(26	)%	(9	)%	$	152,681		$	120,769		26	%
Operating Income (Loss)	$	(3,251	)	$	10,628		$	(12,937	)	NM		75	%	$	7,377		$	(11,482	)	NM
Net Income (Loss) Attributable to Evercore Partners Inc.	$	117		$	2,020		$	(6,043	)	(94	)%	NM		$	2,137		$	(5,852	)	NM
Diluted Earnings (Loss) Per Share	$	0.00		$	0.09		$	(0.43	)	NM		NM		$	0.10		$	(0.42	)	NM
Compensation Ratio		71	%		63	%		73	%						66	%		73	%
Operating Margin		(5	)%		12	%		(18	)%						5	%		(10	)%


	Adjusted Pro Forma
	Three Months Ended									% Change vs.				Six Months Ended
	June 30, 2010			March 31, 2010			June 30, 2009			March 31, 2010		June 30, 2009		June 30, 2010			June 30, 2009			% Change
	(dollars in thousands)
Net Revenues	$	64,769		$	85,103		$	71,312		(24	)%	(9	)%	$	149,872		$	121,918		23	%
Operating Income	$	4,249		$	18,852		$	6,077		(77	)%	(30	)%	$	23,101		$	10,182		127	%
Net Income Attributable to Evercore Partners Inc.	$	2,018		$	10,373		$	3,550		(81	)%	(43	)%	$	12,391		$	5,355		131	%
Diluted Earnings Per Share	$	0.05		$	0.26		$	0.10		(81	)%	(50	)%	$	0.31		$	0.15		107	%
Compensation Ratio		63	%		59	%		73	%						61	%		72	%
Operating Margin		7	%		22	%		9	%						15	%		8	%

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 and is unaudited. Adjusted pro forma results begin with information prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) adjusted to exclude certain items 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 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

Results for Evercore’s Investment Banking business this quarter were down from Q2 2009 and Q1 2010 on lower advisory revenues, predominantly reflecting the timing of deal closings in both the United States and Europe; investments in the growth of the Institutional Equities and Private Funds groups; and costs associated with overall growth of the Advisory business. As a result of these factors, Investment Banking reported a 9% operating margin on an Adjusted Pro Forma basis, which is down from 30% in Q1 2010 and Q2 2009. The segment reported an operating loss on a U.S. GAAP basis for the quarter driven by expenses associated with the new businesses.


	Adjusted Pro Forma
	Three Months Ended									Six Months Ended
	June 30, 2010			March 31, 2010			June 30, 2009			June 30, 2010			June 30, 2009
	(dollars in thousands)
Net Revenues:
Investment Banking	$	45,511		$	71,274		$	68,439		$	116,785		$	116,488
Other Revenue, net		1,562			1,628			(71	)		3,190			531

Net Revenues		47,073			72,902			68,368			119,975			117,019

Expenses:
Employee Compensation and Benefits		29,360			40,565			39,682			69,925			68,894
Non-compensation Costs		13,430			10,682			8,468			24,112			15,759

Total Expenses		42,790			51,247			48,150			94,037			84,653

Operating Income	$	4,283		$	21,655		$	20,218		$	25,938		$	32,366

Compensation Ratio		62	%		56	%		58	%		58	%		59	%
Operating Margin		9	%		30	%		30	%		22	%		28	%


	U.S. GAAP
	Three Months Ended									Six Months Ended
	June 30, 2010			March 31, 2010			June 30, 2009			June 30, 2010			June 30, 2009
	(dollars in thousands)
Net Revenues:
Investment Banking	$	47,505		$	75,922		$	70,067		$	123,427		$	119,125
Other Revenue, net		520			593			(754	)		1,113			(152	)

Net Revenues		48,025			76,515			69,313			124,540			118,973

Expenses:
Employee Compensation and Benefits		33,550			45,424			39,682			78,974			68,894
Non-compensation Costs		15,893			15,799			10,566			31,692			19,334
Special Charges		—			—			3,951			—			3,951

Total Expenses		49,443			61,223			54,199			110,666			92,179

Operating Income (Loss)	$	(1,418	)	$	15,292		$	15,114		$	13,874		$	26,794

Compensation Ratio		70	%		59	%		57	%		63	%		58	%
Operating Margin		(3	)%		20	%		22	%		11	%		23	%

Revenues

Investment Banking reported second quarter 2010 Adjusted Pro Forma net revenues of $47.1 million, a decrease of 31% from the prior year and 35% from Q1 2010. The decrease in revenues this quarter predominantly reflects the timing of the closing of transactions in the United States and Europe. The Company earned advisory fees in excess of $1 million from 12 clients during the second quarter of 2010, and completed two underwriting assignments. The number of fee paying clients for the first half of 2010 increased to 105 compared to 103 last year.

Expenses

Q2 2010 Adjusted Pro Forma expenses increased from Q1 2010 driven by continued investments in the Institutional Equities business, the acquisition of the Private Funds Group and continued growth of the Advisory business. Compensation costs for the Investment Banking segment on an Adjusted Pro Forma basis for the three months ended June 30, 2010 were $29.4 million, a decrease of 26% from the prior year and 28% decrease from Q1 2010. For the three months ended June 30, 2010, Evercore’s Investment Banking Adjusted Pro Forma compensation ratio was 62%, versus the compensation ratio reported for the three months ended June 30, 2009 of 58% and 56% for the three months ended March 31, 2010. Excluding stock compensation costs of $4.6 million for the three months ended June 30, 2010 related to new Senior Managing Directors¹, the ratio would have been 52.7%. The fluctuations in compensation costs reflect the revenue performance of the business and investments in new businesses.

Non-compensation costs on an Adjusted Pro Forma basis for the three months ended June 30, 2010 of $13.4 million increased 59% from the same period last year and 26% from last quarter. $1.9 million of this cost increase from the three months ended June 30, 2009, is directly attributable to operating costs associated with Institutional Equities and the Private Funds Group, as well as the

¹	Stock compensation costs for Senior Managing Directors hired in the past twenty-four months

acquisition costs related to MJC Associates, and the ongoing pursuit of strategic opportunities. The remaining cost increases are driven by the growth of our Advisory business.

New Businesses

The Institutional Equities team is comprised of 37 professionals as of July 31, 2010, including 10 experienced research analysts and 10 senior sales and sales/trading professionals. The senior professionals, together with the strategic investors own slightly more than 23% of the Institutional Equities business. The senior team for 2010 is substantially complete, and we expect to employ between 40 and 45 professionals by year end. Revenues in this business are expected to grow as the research product is rolled out, as clients’ trading volume grows and as we increasingly participate in underwriting transactions. The business is expected to break even by the end of the fourth quarter of 2011 and to contribute to earnings in 2012. The Private Funds Group is currently expected to report a small loss for the year and to contribute to earnings in 2011, as closings for certain fund-raisings have slipped to early 2011. For the three and six months ended June 30, 2010, these new businesses generated $0.5 million and $1.7 million in revenues and $5.4 million and $7.9 million in expenses, respectively.

Investment Management

The Investment Management segment reported substantial revenue growth and a modest Operating Loss for the second quarter reflecting continued improvements in operating results for the early stage businesses and one month of Atalanta Sosnoff’s results, comprising $3.9 million of revenues and $3.1 million of expenses (including $0.5 million of amortization of intangibles). Assets Under Management (AUM) increased to $15.2 billion, up significantly from the first quarter of 2010, reflecting the addition of assets from Atalanta Sosnoff. Excluding those assets, the business had approximately $460 million of net inflows partially offset by approximately $140 million of market depreciation.


	Adjusted Pro Forma
	Three Months Ended									Six Months Ended
	June 30, 2010			March 31, 2010			June 30, 2009			June 30, 2010			June 30, 2009
	(dollars in thousands)
Net Revenues:
Investment Management Revenues	$	16,295		$	11,051		$	2,160		$	27,346		$	2,726
Other Revenue, net		1,401			1,150			784			2,551			2,173

Net Revenues		17,696			12,201			2,944			29,897			4,899

Expenses:
Employee Compensation and Benefits		11,409			9,426			12,177			20,835			18,819
Non-compensation Costs		6,321			5,578			4,908			11,899			8,264

Total Expenses		17,730			15,004			17,085			32,734			27,083

Operating Income (Loss)	$	(34	)	$	(2,803	)	$	(14,141	)	$	(2,837	)	$	(22,184	)

Compensation Ratio		64	%		77	%		414	%		70	%		384	%
Operating Margin		(0	)%		(23	)%		(480	)%		(9	)%		(453	)%


	U.S. GAAP
	Three Months Ended									Six Months Ended
	June 30, 2010			March 31, 2010			June 30, 2009			June 30, 2010			June 30, 2009
	(dollars in thousands)
Net Revenues:
Investment Management Revenues	$	16,295		$	11,051		$	2,160		$	27,346		$	2,729
Other Revenue, net		520			275			(430	)		795			(933	)

Net Revenues		16,815			11,326			1,730			28,141			1,796

Expenses:
Employee Compensation and Benefits		12,212			10,297			12,177			22,509			18,819
Non-compensation Costs		6,436			5,693			5,417			12,129			9,066
Special Charges		—			—			12,187			—			12,187

Total Expenses		18,648			15,990			29,781			34,638			40,072

Operating Income (Loss)	$	(1,833	)	$	(4,664	)	$	(28,051	)	$	(6,497	)	$	(38,276	)

Compensation Ratio		73	%		91	%		704	%		80	%		NM
Operating Margin		(11	)%		(41	)%		NM			(23	)%		NM

Revenues

Investment Management Revenue Components


	Adjusted Pro Forma
	Three Months Ended									Six Months Ended
	June 30, 2010			March 31, 2010			June 30, 2009			June 30, 2010			June 30, 2009
	(dollars in thousands)
Management Fees
Wealth Management	$	2,442		$	1,917		$	707		$	4,359		$	1,077
Institutional Asset Management		9,719			6,719			3,311			16,438			4,316
Private Equity (1)		2,202			1,978			2,002			4,180			4,149

Total Management Fees		14,363			10,614			6,020			24,977			9,542

Realized and Unrealized Gains (Losses)
Institutional Asset Management		1,581			1,203			139			2,784			(682	)
Private Equity		481			(586	)		(3,814	)		(105	)		(4,491	)

Total Realized and Unrealized Gains (Losses)		2,062			617			(3,675	)		2,679			(5,173	)

HighView		—			—			—			—			(920	)
Equity in EAM Gains (Losses)		—			—			—			—			(334	)
Equity in Pan Losses		(130	)		(180	)		(185	)		(310	)		(389	)

Investment Management Revenues	$	16,295		$	11,051		$	2,160		$	27,346		$	2,726

(1)	Management fees from Private Equity were $4.2 million for the six months ended June 30, 2009 on a U.S. GAAP basis, excluding the reduction of revenues for reimbursable client-related expenses.

Fees earned from the management of client portfolios and other investment advisory services of $14.4 million increased significantly for the three months ended June 30, 2010 compared to the second quarter of 2009, reflecting the addition of Atalanta Sosnoff for one month, the inclusion of fees associated with Trilantic for a full quarter and continued growth in AUM within Wealth Management and the other Institutional Asset Management businesses.

Expenses

The growth in expenses in the second quarter of 2010 was directly attributable to Atalanta Sosnoff.

Other U.S. GAAP Expenses

Evercore’s Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. for the three and six months ended June 30, 2010 was higher than U.S. GAAP as a result of the exclusion of expenses associated with IPO equity awards and the amortization of intangibles principally related to Braveheart and Protego. In addition, for Adjusted Pro Forma purposes, reimbursable 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 six months ended June 30, 2009, are included in Annex I, pages A-2 to A-11.

Noncontrolling Interests

Non-controlling Interests in certain subsidiaries, principally within Investment Management, 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 June 30, 2010 and 2009 and March 31, 2010 the loss allocated to noncontrolling interests was as follows:


	Net Loss Allocated to Non-controlling Interests
	Three Months Ended									Six Months Ended
Segment	June 30, 2010			March 31, 2010			June 30, 2009			June 30, 2010			June 30, 2009
Investment Banking (1)	$	(644	)	$	—		$	—		$	(644	)	$	—
Investment Management (1)		(194	)		(377	)		(1,127	)		(571	)		(1,655	)

Total	$	(838	)	$	(377	)	$	(1,127	)	$	(1,215	)	$	(1,655	)

(1)	The difference between Adjusted Pro Forma and U.S. GAAP Non-controlling Interests relates primarily to intangible amortization expense which is eliminated for ETC and EAM.

Income Taxes

For the three and six months ended June 30, 2010, Evercore’s Adjusted Pro Forma effective tax rate was approximately 49% and 42%, respectively, compared to 42% for the three and six months ended June 30, 2009. The effective tax rate increased to 42% (versus 41% for the first quarter of 2010) for the six months ended June 30, 2010 as a result of the lower tax rate associated with the Institutional Equities and Atalanta Sosnoff noncontrolling interests which were reported for the first time in the second quarter. The effective tax rate for the second quarter of 2010 includes a true-up to reflect the full six month results at the higher effective tax rate.

For the three and six months ended June 30, 2010, Evercore’s U.S. GAAP effective tax rate was approximately 52% and 40%, respectively, compared to (11%) and (21%) for the three and six months ended June 30, 2009. 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 non-controlling 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 $222.6 million at June 30, 2010. Current assets exceed current liabilities by $193.1 million at June 30, 2010. Amounts due related to the Long-Term Notes Payable were $97.3 million at June 30, 2010.

During the quarter the Company repurchased approximately 551,000 shares and share equivalents at an average cost of $28.15 per share.

Dividend

On August 2, 2010 the Board of Directors of Evercore declared a quarterly dividend of $0.15 per share to be paid on September 10, 2010 to common stockholders of record on August 27, 2010.

Conference Call

Evercore will host a conference call to discuss its results for the second quarter on Tuesday, August 3, 2010, at 8:00 a.m. Eastern Time with access available via the Internet and telephone. Investors and analysts may participate in the live conference call by dialing (866) 783-2144 (toll-free domestic) or (857) 350-1603 (international); passcode: 64536254. 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: 58823153. A live webcast of the conference call will be available on the Investor Relations section of Evercore’s Web site at www.evercore.com. The webcast will be archived on Evercore’s Web site for 30 days after the call.

About Evercore Partners

Evercore Partners is a leading independent investment banking 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 proprietary conflicts; 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, Houston, Los Angeles, San Francisco, Washington D.C., London, Mexico City and Monterrey, Mexico. More information about Evercore can be found on the Company’s Web site at www.evercore.com.

# # #


Investor Contact:		Robert B. Walsh
		Chief Financial Officer, Evercore Partners
		212-857-3100

Media Contact:		Kenny Juarez
		The Abernathy MacGregor Group, for Evercore Partners
		212-371-5999

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, 2009 and subsequent quarterly reports on Form 10-Q. 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


		Page Number
Schedule
Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2010 and 2009		A-1
Adjusted Pro Forma:
Adjusted Pro Forma Results		A-2
U.S. GAAP Reconciliation to Adjusted Pro Forma		A-4
Adjusted Pro Forma Segment Reconciliation to U.S. GAAP for the Three and Six Months ended June 30, 2010		A-6
Adjusted Pro Forma Segment Reconciliation to U.S. GAAP for the Three Months ended March 31, 2010		A-7
Adjusted Pro Forma Segment Reconciliation to U.S. GAAP for the Three and Six Months ended June 30, 2009		A-8
Notes to Unaudited Condensed Consolidated Adjusted Pro Forma Financial Data		A-9
Additional Information		A-11

EVERCORE PARTNERS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009

(dollars in thousands, except per share data)

(UNAUDITED)


	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010		2009
REVENUES
Investment Banking Revenue	$	47,505		$	70,067		$	123,427	$	119,125
Investment Management Revenue		16,295			2,160			27,346		2,729
Other Revenue		6,973			5,025			13,445		13,615

TOTAL REVENUES		70,773			77,252			164,218		135,469
Interest Expense (1)		5,933			6,209			11,537		14,700

NET REVENUES		64,840			71,043			152,681		120,769

EXPENSES
Employee Compensation and Benefits		45,762			51,859			101,483		87,713
Occupancy and Equipment Rental		4,631			3,476			7,958		6,638
Professional Fees		6,351			5,114			14,716		8,938
Travel and Related Expenses		3,979			2,457			7,349		4,055
Communications and Information Services		1,762			955			2,791		1,689
Depreciation and Amortization		1,948			1,141			3,298		2,198
Special Charges		—			16,138			—		16,138
Acquisition and Transition Costs		1,280			422			2,736		712
Other Operating Expenses		2,378			2,418			4,973		4,170

TOTAL EXPENSES		68,091			83,980			145,304		132,251

INCOME (LOSS) BEFORE INCOME TAXES		(3,251	)		(12,937	)		7,377		(11,482	)
Provision for Income Taxes		(1,698	)		1,373			2,961		2,431

NET INCOME (LOSS)		(1,553	)		(14,310	)		4,416		(13,913	)
Net Income (Loss) Attributable to Non-controlling Interest		(1,670	)		(8,267	)		2,279		(8,061	)

NET INCOME (LOSS) ATTRIBUTABLE TO EVERCORE PARTNERS INC.	$	117		$	(6,043	)	$	2,137	$	(5,852	)

Net Income (Loss) Attributable to Evercore Partners Inc. Common Shareholders:	$	96		$	(6,043	)	$	2,105	$	(5,852	)

Weighted Average Shares of Class A Common Stock Outstanding:
Basic		19,016			13,925			18,846		13,814
Diluted		22,363			13,925			22,392		13,814
Net Income (Loss) Per Share Attributable to Evercore Partners Inc. Common Shareholders:
Basic	$	0.01		$	(0.43	)	$	0.11	$	(0.42	)
Diluted	$	0.00		$	(0.43	)	$	0.09	$	(0.42	)

1	Includes interest expense on long-term debt and interest expense on short-term repurchase agreements.

A-1

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 and is unaudited. Adjusted pro forma results begin with information prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), adjusted to exclude certain items and reflect the conversion of vested and unvested Evercore LP Units, and other event-based 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:

Assumed Vesting of Evercore LP Units and Exchange into Class A Shares. The Company incurred expenses in Employee Compensation and Benefits, resulting from the modification of Evercore LP Units, which will vest 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 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 event-based stock-based awards.

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;

Acquisition and Transition Costs. The Company has reflected Acquisition and Transition Costs for expenses incurred during the first quarter of 2009 in connection with the acquisition of SFS and the formation of ETC. This charge reflects the change in accounting for deal-related costs required by SFAS No. 141(R), Business Combinations, codified under ASC 805, which was effective January 1, 2009.

Amortization of Intangible Assets. Amortization of intangible assets related to the Protego acquisition was undertaken in contemplation of the IPO. The Braveheart acquisition occurred on December 19, 2006. Also excluded is amortization of intangible assets associated with the recent acquisitions of SFS and EAM.

Special Charges. The Company has reflected charges in conjunction with its decision to suspend capital raising for ECP and other ongoing strategic cost management initiatives, which it has excluded from adjusted pro forma results. These charges relate to the expense required to be recorded under U.S. GAAP for stock-based compensation awards that are voluntarily forfeited by employees who remain with the Company. During 2009 employees voluntarily forfeited 738,000 unvested restricted stock units and 250,000 partnership units. The Company’s Management believes that excluding the effects of these Special Charges improves the comparability of operating performance across periods.

Client Expenses. The Company has reflected the reclassification of reimbursable expenses and expenses associated with revenue sharing engagements with third parties as a reduction of

A-2

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.

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.

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 Advisory 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.

A-3

EVERCORE PARTNERS INC.

U.S. GAAP RECONCILIATION TO ADJUSTED PRO FORMA

(dollars in thousands)

(UNAUDITED)


	Three Months Ended									Six Months Ended
	June 30, 2010			March 31, 2010			June 30, 2009			June 30, 2010			June 30, 2009
Net Revenues—U.S. GAAP	$	64,840		$	87,841		$	71,043		$	152,681		$	120,769
Reimbursable Expenses (1)		(1,994	)		(4,648	)		(1,628	)		(6,642	)		(2,640	)
Interest Expense on Long-term Debt (2)		1,923			1,910			1,897			3,833			3,789

Net Revenues—Adjusted Pro Forma	$	64,769		$	85,103		$	71,312		$	149,872		$	121,918


Compensation Expense—U.S. GAAP	$	45,762		$	55,721		$	51,859		$	101,483		$	87,713
Amortization of LP Units and Certain Other Awards (3)		(4,993	)		(5,730	)		—			(10,723	)		—

Compensation Expense—Adjusted Pro Forma	$	40,769		$	49,991		$	51,859		$	90,760		$	87,713


Operating Income (Loss)—U.S. GAAP	$	(3,251	)	$	10,628		$	(12,937	)	$	7,377		$	(11,482	)
Amortization of LP Units and Certain Other Awards (3)		4,993			5,730			—			10,723			—
Special Charges (4)		—			—			16,138			—			16,138
Acquisition and Transition Costs (5)		—			—			422			—			712
Intangible Asset Amortization (5)		584			584			557			1,168			1,025

Pre-Tax Income—Adjusted Pro Forma		2,326			16,942			4,180			19,268			6,393
Interest Expense on Long-term Debt (2)		1,923			1,910			1,897			3,833			3,789

Operating Income—Adjusted Pro Forma	$	4,249		$	18,852		$	6,077		$	23,101		$	10,182


Provision (Benefit) for Income Taxes—U.S. GAAP	$	(1,698	)	$	4,659		$	1,373		$	2,961		$	2,431
Income Taxes (6)		2,844			2,287			384			5,131			262

Provision for Income Taxes—Adjusted Pro Forma	$	1,146		$	6,946		$	1,757		$	8,092		$	2,693


Net Income (Loss) Attributable to Evercore Partners Inc.—U.S. GAAP	$	117		$	2,020		$	(6,043	)	$	2,137		$	(5,852	)
Amortization of LP Units and Certain Other Awards (3)		4,993			5,730			—			10,723			—
Special Charges (4)		—			—			16,138			—			16,138
Acquisition and Transition Costs (5)		—			—			422			—			712
Intangible Asset Amortization (5)		584			584			557			1,168			1,025
Income Taxes (6)		(2,844	)		(2,287	)		(384	)		(5,131	)		(262	)
Noncontrolling Interest (7)		(832	)		4,326			(7,140	)		3,494			(6,406	)

Net Income Attributable to Evercore Partners Inc.—Adjusted Pro Forma	$	2,018		$	10,373		$	3,550		$	12,391		$	5,355


Diluted Shares Outstanding—U.S. GAAP		22,363			22,328			13,925			22,392			13,814
Warrants (8)		—			—			—			—			—
Vested Partnership Units (8)		12,782			12,630			15,386			12,706			15,132
Unvested Partnership Units (8)		4,540			4,540			4,603			4,540			4,603
Unvested Restricted Stock Units—Event Based (8)		648			676			780			648			780
Unvested Restricted Stock Units—Service Based (8)		—			—			911			—			575
Unvested Restricted Stock—Service Based (8)		—			—			86			—			80

Diluted Shares Outstanding—Adjusted Pro Forma		40,333			40,174			35,691			40,286			34,984

Key Metrics: (a)
Diluted Earnings (Loss) Per Share—U.S. GAAP	$	0.00		$	0.09		$	(0.43	)	$	0.10		$	(0.42	)
Diluted Earnings Per Share—Adjusted Pro Forma	$	0.05		$	0.26		$	0.10		$	0.31		$	0.15

Compensation Ratio—U.S. GAAP		71	%		63	%		73	%		66	%		73	%
Compensation Ratio—Adjusted Pro Forma		63	%		59	%		73	%		61	%		72	%

Operating Margin—U.S. GAAP		(5	%)		12	%		(18	%)		5	%		(10	%)
Operating Margin—Adjusted Pro Forma		7	%		22	%		9	%		15	%		8	%

Effective Tax Rate—U.S. GAAP		52	%		44	%		(11	%)		40	%		(21	%)
Effective Tax Rate—Adjusted Pro Forma		49	%		41	%		42	%		42	%		42	%

(a)	Reconciliations of the key metrics from U.S. GAAP to Adjusted Pro Forma is a derivative of the reconciliations of their components above.

A-4

EVERCORE PARTNERS INC.

U.S. GAAP RECONCILIATION TO ADJUSTED PRO FORMA

TRAILING TWELVE MONTHS

(dollars in thousands)

(UNAUDITED)


	Twelve Months Ended
	June 30, 2010			March 31, 2010			June 30, 2009
Net Revenues—U.S. GAAP	$	345,051		$	351,254		$	210,818
Reimbursable Expenses (1)		(10,296	)		(9,930	)		(4,757	)
Interest Expense on Long-term Debt (2)		7,639			7,613			6,343

Net Revenues—Adjusted Pro Forma	$	342,394		$	348,937		$	212,404


Compensation Expense—U.S. GAAP	$	224,588		$	230,685		$	162,609
Amortization of LP Units and Certain Other Awards (3)		(20,123	)		(15,130	)		—

Compensation Expense—Adjusted Pro Forma	$	204,465		$	215,555		$	162,609


Compensation Ratio—U.S. GAAP		65	%		66	%		77	%
Compensation Ratio—Adjusted Pro Forma		60	%		62	%		77	%

A-5

EVERCORE PARTNERS INC.

ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAP

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010

(dollars in thousands)

(UNAUDITED)


	Investment Banking Segment
	Three Months Ended June 30, 2010									Six Months Ended June 30, 2010
	Non-GAAP Adjusted Pro Forma Basis			Adjustments			U.S. GAAP Basis			Non-GAAP Adjusted Pro Forma Basis			Adjustments			U.S. GAAP Basis
Net Revenues:
Investment Banking Revenue	$	45,511		$	1,994	(1)	$	47,505		$	116,785		$	6,642	(1)	$	123,427
Other Revenue, net		1,562			(1,042	)(2)		520			3,190			(2,077	)(2)		1,113

Net Revenues		47,073			952			48,025			119,975			4,565			124,540

Expenses:
Employee Compensation and Benefits		29,360			4,190	(3)		33,550			69,925			9,049	(3)		78,974
Non-compensation Costs		13,430			2,463	(5)		15,893			24,112			7,580	(5)		31,692

Total Expenses		42,790			6,653			49,443			94,037			16,629			110,666

Operating Income (Loss)	$	4,283		$	(5,701	)	$	(1,418	)	$	25,938		$	(12,064	)	$	13,874


	Investment Management Segment
	Three Months Ended June 30, 2010									Six Months Ended June 30, 2010
	Non-GAAP Adjusted Pro Forma Basis			Adjustments			U.S. GAAP Basis			Non-GAAP Adjusted Pro Forma Basis			Adjustments			U.S. GAAP Basis
Net Revenues:
Investment Management Revenue	$	16,295		$	—		$	16,295		$	27,346		$	—		$	27,346
Other Revenue, net		1,401			(881	)(2)		520			2,551			(1,756	)(2)		795

Net Revenues		17,696			(881	)		16,815			29,897			(1,756	)		28,141

Expenses:
Employee Compensation and Benefits		11,409			803	(3)		12,212			20,835			1,674	(3)		22,509
Non-compensation Costs		6,321			115	(5)		6,436			11,899			230	(5)		12,129

Total Expenses		17,730			918			18,648			32,734			1,904			34,638

Operating Income (Loss)	$	(34	)	$	(1,799	)	$	(1,833	)	$	(2,837	)	$	(3,660	)	$	(6,497	)

A-6

EVERCORE PARTNERS INC.

ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAP

FOR THE THREE MONTHS ENDED MARCH 31, 2010

(dollars in thousands)

(UNAUDITED)


	Investment Banking Segment
	Three Months Ended March 31, 2010
	Non-GAAP Adjusted Pro Forma Basis			Adjustments			U.S. GAAP Basis
Net Revenues:
Investment Banking Revenue	$	71,274		$	4,648	(1)	$	75,922
Other Revenue, net		1,628			(1,035	)(2)		593

Net Revenues		72,902			3,613			76,515

Expenses:
Employee Compensation and Benefits		40,565			4,859	(3)		45,424
Non-compensation Costs		10,682			5,117	(5)		15,799

Total Expenses		51,247			9,976			61,223

Operating Income	$	21,655		$	(6,363	)	$	15,292


	Investment Management Segment
	Three Months Ended March 31, 2010
	Non-GAAP Adjusted Pro Forma Basis			Adjustments			U.S. GAAP Basis
Net Revenues:
Investment Management Revenue	$	11,051		$	—		$	11,051
Other Revenue, net		1,150			(875	)(2)		275

Net Revenues		12,201			(875	)		11,326

Expenses:
Employee Compensation and Benefits		9,426			871	(3)		10,297
Non-compensation Costs		5,578			115	(5)		5,693

Total Expenses		15,004			986			15,990

Operating Income (Loss)	$	(2,803	)	$	(1,861	)	$	(4,664	)

A-7

EVERCORE PARTNERS INC.

ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAP

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009

(dollars in thousands)

(UNAUDITED)


	Investment Banking Segment
	Three Months Ended June 30, 2009									Six Months Ended June 30, 2009
	Non-GAAP Adjusted Pro Forma Basis			Adjustments			U.S. GAAP Basis			Non-GAAP Adjusted Pro Forma Basis		Adjustments			U.S. GAAP Basis
Net Revenues:
Investment Banking Revenue	$	68,439		$	1,628	(1)	$	70,067		$	116,488	$	2,637	(1)	$	119,125
Other Revenue, net		(71	)		(683	)(2)		(754	)		531		(683	)(2)		(152	)

Net Revenues		68,368			945			69,313			117,019		1,954			118,973

Expenses:
Employee Compensation and Benefits		39,682			—			39,682			68,894		—			68,894
Non-compensation Costs		8,468			2,098	(5)		10,566			15,759		3,575	(5)		19,334
Special Charges		—			3,951	(4)		3,951			—		3,951	(4)		3,951

Total Expenses		48,150			6,049			54,199			84,653		7,526			92,179

Operating Income	$	20,218		$	(5,104	)	$	15,114		$	32,366	$	(5,572	)	$	26,794


	Investment Management Segment
	Three Months Ended June 30, 2009									Six Months Ended June 30, 2009
	Non-GAAP Adjusted Pro Forma Basis			Adjustments			U.S. GAAP Basis			Non-GAAP Adjusted Pro Forma Basis			Adjustments			U.S. GAAP Basis
Net Revenues:
Investment Management Revenue	$	2,160		$	—		$	2,160		$	2,726		$	3	(1)	$	2,729
Other Revenue, net		784			(1,214	)(2)		(430	)		2,173			(3,106	)(2)		(933	)

Net Revenues		2,944			(1,214	)		1,730			4,899			(3,103	)		1,796

Expenses:
Employee Compensation and Benefits		12,177			—			12,177			18,819			—			18,819
Non-compensation Costs		4,908			509	(5)		5,417			8,264			802	(5)		9,066
Special Charges		—			12,187	(4)		12,187			—			12,187	(4)		12,187

Total Expenses		17,085			12,696			29,781			27,083			12,989			40,072

Operating Income (Loss)	$	(14,141	)	$	(13,910	)	$	(28,051	)	$	(22,184	)	$	(16,092	)	$	(38,276	)

A-8

Notes to Unaudited Condensed Consolidated Adjusted Pro Forma Financial Data

(1)	The Company has reflected the reclassification of reimbursable expenses and expenses associated with revenue sharing engagements with third parties as a reduction of revenue.

(2)	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.

(3)	The Company incurred expenses for the three and six months ended June 30, 2010 and three months ended March 31, 2010, from the modification of Evercore LP Units, which will vest over a five-year period.

(4)

The Company has reflected charges in conjunction with Evercore’s decision to suspend capital raising for ECP and other ongoing strategic cost management initiatives. The charges relate to the expense required to be recorded under U.S. GAAP for stock-based compensation awards that are voluntarily forfeited by employees who remain with the Company. During 2009 employees voluntarily forfeited 738,000 unvested restricted stock units and 250,000 Evercore LP partnership units.

(5)	Non-compensation Costs on an Adjusted Pro Forma basis reflect the following adjustments:


	Three Months Ended June 30, 2010
	Investment Banking		Investment Management		Total Segments		Adjustments			U.S. GAAP
Occupancy and Equipment Rental	$	3,325	$	1,306	$	4,631	$	—		$	4,631
Professional Fees		3,547		2,019		5,566		785	(1)		6,351
Travel and Related Expenses		2,512		355		2,867		1,112	(1)		3,979
Communications and Information Services		1,260		469		1,729		33	(1)		1,762
Depreciation and Amortization		683		681		1,364		584	(5a)		1,948
Acquisition and Transition Costs		604		676		1,280		—			1,280
Other Operating Expenses		1,499		815		2,314		64	(1)		2,378

Total Non-compensation Costs	$	13,430	$	6,321	$	19,751	$	2,578		$	22,329


	Three Months Ended March 31, 2010
	Investment Banking		Investment Management		Total Segments		Adjustments			U.S. GAAP
Occupancy and Equipment Rental	$	2,308	$	1,019	$	3,327	$	—		$	3,327
Professional Fees		2,866		1,688		4,554		3,811	(1)		8,365
Travel and Related Expenses		2,332		272		2,604		766	(1)		3,370
Communications and Information Services		679		333		1,012		17	(1)		1,029
Depreciation and Amortization		532		234		766		584	(5a)		1,350
Acquisition and Transition Costs		295		1,161		1,456		—			1,456
Other Operating Expenses		1,670		871		2,541		54	(1)		2,595

Total Non-compensation Costs	$	10,682	$	5,578	$	16,260	$	5,232		$	21,492

A-9


	Three Months June 30, 2009
	Investment Banking		Investment Management		Total Segments		Adjustments			U.S. GAAP
Occupancy and Equipment Rental	$	2,143	$	1,333	$	3,476	$	—		$	3,476
Professional Fees		2,414		1,957		4,371		743	(1)		5,114
Travel and Related Expenses		1,388		278		1,666		791	(1)		2,457
Communications and Information Services		619		315		934		21	(1)		955
Depreciation and Amortization		376		208		584		557	(5a)		1,141
Acquisition and Transition Costs		—		—		—		422	(5b)		422
Other Operating Expenses		1,528		817		2,345		73	(1)		2,418

Total Non-compensation Costs	$	8,468	$	4,908	$	13,376	$	2,607		$	15,983


	Six Months June 30, 2010
	Investment Banking		Investment Management		Total Segments		Adjustments			U.S. GAAP
Occupancy and Equipment Rental	$	5,633	$	2,325	$	7,958	$	—		$	7,958
Professional Fees		6,413		3,707		10,120		4,596	(1)		14,716
Travel and Related Expenses		4,844		627		5,471		1,878	(1)		7,349
Communications and Information Services		1,939		802		2,741		50	(1)		2,791
Depreciation and Amortization		1,215		915		2,130		1,168	(5a)		3,298
Acquisition and Transition Costs		899		1,837		2,736		—			2,736
Other Operating Expenses		3,169		1,686		4,855		118	(1)		4,973

Total Non-compensation Costs	$	24,112	$	11,899	$	36,011	$	7,810		$	43,821


	Six Months June 30, 2009
	Investment Banking		Investment Management		Total Segments		Adjustments			U.S. GAAP
Occupancy and Equipment Rental	$	4,284	$	2,354	$	6,638	$	—		$	6,638
Professional Fees		4,710		3,016		7,726		1,212	(1)		8,938
Travel and Related Expenses		2,442		390		2,832		1,223	(1)		4,055
Communications and Information Services		1,157		494		1,651		38	(1)		1,689
Depreciation and Amortization		753		420		1,173		1,025	(5a)		2,198
Acquisition and Transition Costs		—		—		—		712	(5b)		712
Other Operating Expenses		2,413		1,590		4,003		167	(1)		4,170

Total Non-compensation Costs	$	15,759	$	8,264	$	24,023	$	4,377		$	28,400

(5a)	Reflects expenses associated with amortization of intangible assets acquired in the Protego, Braveheart, SFS and EAM acquisitions.

(5b)

The Company has reflected Acquisition and Transition Costs for costs incurred during the first quarter of 2009 in connection with the acquisition of SFS and the formation of ETC. This charge reflects the change in accounting for deal-related costs required by SFAS No. 141(R), Business Combinations, codified under ASC 805, which was effective January 1, 2009.

(6)

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 increase Evercore’s effective tax rate to approximately 49% and 42% for the three and six months ended June 30, 2010. 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 adjustments for deferred tax assets related to the ultimate tax deductions for equity-based compensation awards are made directly to stockholders’ equity.

(7)	Reflects adjustment to eliminate noncontrolling interest related to all Evercore LP partnership units which are assumed to be converted to Class A common stock.

(8)

Assumes the vesting of all Evercore 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 are anti-dilutive and the event-based restricted stock units are excluded from the calculation.

A-10

Additional Information

Incremental Earnings per share of $0.17 would have been earned in Q2 2010 had the fee for LyondellBassell been recognized in the period, assuming a 50% compensation ratio and a tax rate of 42%.

The forecasted marginal loss per share of $0.07 and $0.08, which relates to the Institutional Equities business in Q3 and Q4 2010, respectively, assumes a 42% tax rate, noncontrolling interests of approximately 29% and a sharecount approximating Q2 2010 throughout the remainder of the year. On a U.S. GAAP basis, the corresponding assumptions for noncontrolling interest and sharecount were applied. The U.S. GAAP tax rate is approximately 38%, slightly less than the rate in effect at the end of Q2 2010.

A-11