SEC Filing - Evercore Inc.

EVERCORE PARTNERS INC.

Date: July 26, 2012

/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): July 26, 2012

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 July 26, 2012, Evercore Partners Inc. issued a press release announcing financial results for its second quarter ended June 30, 2012.

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 July 26, 2012.

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

EVERCORE PARTNERS REPORTS SECOND QUARTER 2012 RESULTS;

QUARTERLY DIVIDEND OF $0.20 PER SHARE

Highlights

•

Second Quarter Financial Summary

–

Record Adjusted Pro Forma Net Revenues of $172.1 million, up 23% year-over-year and 63% in comparison to the prior quarter

–

Record Adjusted Pro Forma Net Income from Continuing Operations of $21.2 million, or $0.49 per share, up 19% and 391% compared to Q2 2011 and Q1 2012, respectively

–

U.S. GAAP Net Revenues of $172.5 million, up 22% and 68% compared to Q2 2011 and Q1 2012, respectively

–

U.S. GAAP Net Income from Continuing Operations of $7.9 million, or $0.25 per share, up from $2.3 million or $0.08 per share in the same period last year

•

Year-to-Date Financial Summary

–

Record Adjusted Pro Forma Net Revenues of $277.6 million, up 13% compared to the same period in 2011

–

Adjusted Pro Forma Net Income from Continuing Operations of $25.5 million, or $0.58 per share, down 13% compared to the same period in 2011

–

U.S. GAAP Net Revenues of $275.3 million, up 11% compared to the same period in 2011

–

U.S. GAAP Net Income from Continuing Operations of $4.6 million, or $0.14 per share, down from $6.0 million, or $0.22 per share, in the same period last year

•

Investment Banking

–

Announced the expansion of Evercore into Canada

•

George Estey will join as a Senior Managing Director and Head of Canada

–

Continued to advise on prominent Advisory transactions, including:

•

Bristol-Myers Squibb’s announced $6.8 billion acquisition of Amylin Pharmaceuticals and the sale of 50% of its interest ($3.4 billion) in Amlyin to AstraZeneca

•

Suburban Propane Partners LP’s announced acquisition of Inergy Propane LLC for $1.8 billion

•

AOL’s sale of its patent portfolio to Microsoft for $1.1 billion

•

Investment Management

–

Assets Under Management in consolidated businesses were down 8% to $11.8 billion

•

Repurchased 1,015,000 shares during the quarter

•

Quarterly dividend of $0.20 per share

NEW YORK, July 26, 2012 – Evercore Partners Inc. (NYSE: EVR) today announced that its Adjusted Pro Forma Net Revenues were $172.1 million for the quarter ended June 30, 2012, compared with $140.2 million and $105.5 million for the quarters ended June 30, 2011 and March 31, 2012, respectively. Adjusted Pro Forma Net Revenues of $277.6 million were a record for the first six months of the year, compared to $245.6 million for the six months ended June 30, 2011. Adjusted Pro Forma Net Income from Continuing Operations Attributable to Evercore Partners Inc. was $21.2 million, or $0.49 per share, for the quarter ended June 30, 2012, compared to $17.8 million, or $0.43 per share, for the quarter ended June 30, 2011 and $4.3 million, or $0.10 per share, for the quarter ended March 31, 2012. Adjusted Pro Forma Net Income from Continuing Operations Attributable to Evercore Partners Inc. was $25.5 million, or $0.58 per share, for the six months ended June 30, 2012, compared to $29.3 million, or $0.71 per share, for the six months ended June 30, 2011.

U.S. GAAP Net Revenues were $172.5 million for the quarter ended June 30, 2012, compared to $141.2 million and $102.8 million for the quarters ended June 30, 2011 and March 31, 2012, respectively. U.S. GAAP Net Revenues were $275.3 million for the six months ended June 30, 2012, compared to $248.3 million for the six months ended June 30, 2011. U.S. GAAP Net Income (Loss) from Continuing Operations Attributable to Evercore Partners Inc. was $7.9 million, or $0.25 per share for the quarter ended June 30, 2012, compared to $2.3 million, or $0.08 per share, for the quarter ended June 30, 2011 and ($3.4) million, or ($0.12) per share, for the quarter ended March 31, 2012. U.S. GAAP Net Income from Continuing Operations Attributable to Evercore Partners Inc. was $4.6 million, or $0.14 per share, for the six months ended June 30, 2012, compared to $6.0 million, or $0.22 per share, for the six months ended June 30, 2011.

The Adjusted Pro Forma compensation ratio for the current quarter was 60%, compared to 59% for the same period in 2011 and 63% for the quarter ended March 31, 2012. The Adjusted Pro Forma compensation ratio for the trailing twelve months was 60%, flat from the same period in 2011 and for the twelve months ended March 31, 2012. The U.S. GAAP compensation ratio for the three months ended June 30, 2012, June 30, 2011 and March 31, 2012 was 66%, 71% and 79%, respectively. The U.S. GAAP trailing twelve-month compensation ratio of 70% compares to 67% for the same period in 2011 and 71% for the twelve months ended March 31, 2012.

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.

“We are generally pleased with our results, reporting record revenues for both the second quarter and the first half of 2012, and record net income for the quarter,” said Ralph Schlosstein, President and Chief Executive Officer. “Our Advisory business delivered particularly strong results, earning fees in excess of $1 million dollars from 30 transactions, also a record. In addition, each of our early stage Investment Banking businesses contributed positively to Operating Income in the quarter. Our international Investment Banking efforts continued to strengthen, as 32% of our revenues were generated serving clients outside of the United States in the first half of the year. Our independent, advice based, operating model continues to perform extremely well despite the challenging market environment, as we build market share, add talent and deliver value to our clients. And, our significant share repurchase volumes during the quarter demonstrate our commitment to providing strong returns to shareholders.”

“It’s impressive that our Investment Banking revenues for the first half of 2012 grew 23% while the global, dollar volume of completed transactions fell 30%. That signifies that Evercore continues to grow and gain market share. And, in turn, it reflects our steady and scrupulous recruiting of additional Senior Managing Directors. We have now entered the important Canadian market, with the addition of George Estey and the commitment to open a Toronto office. And, we expect to announce three additional Senior Managing Directors in overall banking during the next three months,” said Roger Altman, Executive Chairman. “Yes, the financial market environment is a challenging one, but our own backlog is strong.”

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


	U.S. GAAP
	Three Months Ended									% Change vs.						Six Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011			% Change
	(dollars in thousands)
Net Revenues	$	172,497		$	102,798		$	141,204			68	%		22	%	$	275,295		$	248,302			11	%
Operating Income (Loss)	$	21,195		$	(12,143	)	$	11,615			NM			82	%	$	9,052		$	23,379			(61	%)
Net Income (Loss) from Continuing Operations Attributable to Evercore Partners Inc.	$	7,934		$	(3,368	)	$	2,346			NM			238	%	$	4,566		$	5,964			(23	%)
Diluted Earnings (Loss) Per Share from Continuing Operations	$	0.25		$	(0.12	)	$	0.08			NM			213	%	$	0.14		$	0.22			(36	%)
Compensation Ratio		66	%		79	%		71	%								71	%		68	%
Operating Margin		12	%		(12	%)		8	%								3	%		9	%

	Adjusted Pro Forma
	Three Months Ended									% Change vs.						Six Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011			% Change
	(dollars in thousands)
Net Revenues	$	172,115		$	105,521		$	140,164			63	%		23	%	$	277,636		$	245,634			13	%
Operating Income	$	36,452		$	8,931		$	31,495			308	%		16	%	$	45,383		$	52,857			(14	%)
Net Income from Continuing Operations Attributable to Evercore Partners Inc.	$	21,185		$	4,317		$	17,833			391	%		19	%	$	25,502		$	29,270			(13	%)
Diluted Earnings Per Share from Continuing Operations	$	0.49		$	0.10		$	0.43			390	%		14	%	$	0.58		$	0.71			(18	%)
Compensation Ratio		60	%		63	%		59	%								61	%		59	%
Operating Margin		21	%		8	%		22	%								16	%		22	%

The U.S. GAAP and Adjusted Pro Forma results for June 30, 2011 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. 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-11 included in Annex I. These Adjusted Pro Forma amounts are allocated to the Company’s two business segments: Investment Banking and Investment Management.

Business Line Reporting

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

Investment Banking

For the quarter ended June 30, 2012, Evercore’s Investment Banking segment reported net revenues of $151.2 million, which represents an increase of 35% year-over-year and 78% sequentially. Operating income of $35.5 million increased by 32% from the same quarter last year and 373% from the prior quarter. Operating margins decreased to 23% from 24% in the second quarter of 2011. The Company had 58 Investment Banking Senior Managing Directors as of June 30, 2012.


	Adjusted Pro Forma
	Three Months Ended									Six Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
	(dollars in thousands)
Net Revenues:
Investment Banking	$	151,397		$	84,620		$	111,847		$	236,017		$	192,048
Other Revenue, net		(187	)		360			339			173			719

Net Revenues		151,210			84,980			112,186			236,190			192,767

Expenses:
Employee Compensation and Benefits		89,829			54,462			67,303			144,291			114,778
Non-compensation Costs		25,858			23,011			18,054			48,869			32,267

Total Expenses		115,687			77,473			85,357			193,160			147,045

Operating Income	$	35,523		$	7,507		$	26,829		$	43,030		$	45,722

Compensation Ratio		59	%		64	%		60	%		61	%		60	%
Operating Margin		23	%		9	%		24	%		18	%		24	%


	U.S. GAAP
	Three Months Ended									Six Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
	(dollars in thousands)
Net Revenues:
Investment Banking	$	154,426		$	84,495		$	114,696		$	238,921		$	197,748
Other Revenue, net		(1,262	)		(710	)		(720	)		(1,972	)		(1,393	)

Net Revenues		153,164			83,785			113,976			236,949			196,355

Expenses:
Employee Compensation and Benefits		100,754			68,229			81,345			168,983			134,707
Non-compensation Costs		29,165			26,854			21,506			56,019			39,821
Special Charges		662			—			—			662			—

Total Expenses		130,581			95,083			102,851			225,664			174,528

Operating Income (Loss)	$	22,583		$	(11,298	)	$	11,125		$	11,285		$	21,827

Compensation Ratio		66	%		81	%		71	%		71	%		69	%
Operating Margin		15	%		(13	%)		10	%		5	%		11	%

Revenues

For the three months ended June 30, 2012, Investment Banking revenues were $151.4 million, an increase of 35% from the second quarter of last year and 79% from the previous quarter. Investment Banking earned advisory fees from 137 clients (vs. 77 in Q2 2011 and 104 in Q1 2012) and fees in excess of $1 million from 30 transactions (vs. 21 in Q2 2011 and 17 in Q1 2012). The Institutional Equities business contributed revenues of $6.7 million, a 29% increase over the prior quarter. The Private Funds Group closed two capital raises during the quarter. Both of these businesses contributed marginally to profitability in the quarter.

Expenses

For the quarter ended June 30, 2012, compensation costs were $89.8 million, an increase of 33% from the second quarter of last year and 65% from the previous quarter. The trailing twelve-month compensation ratio was 60%, down from 61% in Q2 2011 and flat from Q1 2012. For the three months ended June 30, 2012, Evercore’s Investment Banking compensation ratio was 59%, versus the compensation ratio reported for the three months ended June 30, 2011 and March 31, 2012 of 60% and 64%, respectively.

Non-compensation costs for the current quarter of $25.9 million increased 43% from the same period last year and 12% from last quarter. The year-over-year increase in costs reflects the Lexicon acquisition and continued growth of the Investment Banking business. The sequential quarter-over-quarter increase was driven principally by higher occupancy and business development costs. The ratio of non-compensation costs to revenue for the current quarter was 17%, compared to 16% in the same quarter last year and 27% in the previous quarter. Expenses in the Institutional Equities business were $6.6 million for the second quarter, in line with first quarter expenses.

Investment Management

For the quarter ended June 30, 2012, Investment Management reported net revenues and operating income of $20.9 million and $0.9 million, respectively. Investment Management reported an operating margin of 4% for the current quarter. As of June 30, 2012, Investment Management had $11.8 billion of AUM.


	Adjusted Pro Forma
	Three Months Ended									Six Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
	(dollars in thousands)
Net Revenues:
Investment Management Revenues	$	20,699		$	20,388		$	27,843		$	41,087		$	52,567
Other Revenue, net		206			153			135			359			300

Net Revenues		20,905			20,541			27,978			41,446			52,867

Expenses:
Employee Compensation and Benefits		12,962			11,972			15,460			24,934			30,379
Non-compensation Costs		7,014			7,145			7,852			14,159			15,353

Total Expenses		19,976			19,117			23,312			39,093			45,732

Operating Income	$	929		$	1,424		$	4,666		$	2,353		$	7,135

Compensation Ratio		62	%		58	%		55	%		60	%		57	%
Operating Margin		4	%		7	%		17	%		6	%		13	%


	U.S. GAAP
	Three Months Ended									Six Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
	(dollars in thousands)
Net Revenues:
Investment Management Revenues	$	20,036		$	19,764		$	27,987		$	39,800		$	53,431
Other Revenue, net		(703	)		(751	)		(759	)		(1,454	)		(1,484	)

Net Revenues		19,333			19,013			27,228			38,346			51,947

Expenses:
Employee Compensation and Benefits		13,536			12,498			18,724			26,034			34,459
Non-compensation Costs		7,185			7,360			8,014			14,545			15,936

Total Expenses		20,721			19,858			26,738			40,579			50,395

Operating Income (Loss)	$	(1,388	)	$	(845	)	$	490		$	(2,233	)	$	1,552

Compensation Ratio		70	%		66	%		69	%		68	%		66	%
Operating Margin		(7	%)		(4	%)		2	%		(6	%)		3	%

Revenues

For the quarter ended June 30, 2012, Investment Management reported revenue of $20.7 million, which reflects a decrease from the same period last year of 26% and an increase from the previous quarter of 2%. AUM of $11.8 billion declined 8% in comparison to the first quarter on net outflows of ($0.7) billion and market depreciation of ($0.4) billion. AUM decreased by 27% from the same period last year, due primarily to outflows in our institutional business.

Investment Management Revenue Components


	Adjusted Pro Forma
	Three Months Ended									Six Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
	(dollars in thousands)
Investment Advisory and Management Fees
Wealth Management	$	4,906		$	4,525		$	3,764		$	9,431		$	7,232
Institutional Asset Management (1)		12,415			12,466			17,562			24,881			35,376
Private Equity		1,810			1,735			1,714			3,545			3,429

Total Investment Advisory and Management Fees		19,131			18,726			23,040			37,857			46,037

Realized and Unrealized Gains (Losses)
Institutional Asset Management		1,117			1,212			990			2,329			2,157
Private Equity		(301	)		(307	)		3,878			(608	)		4,820

Total Realized and Unrealized Gains		816			905			4,868			1,721			6,977

Equity in Earnings (Loss) of Affiliates (2)		752			757			(65	)		1,509			(447	)

Investment Management Revenues	$	20,699		$	20,388		$	27,843		$	41,087		$	52,567

(1)	Management fees from Institutional Asset Management were $12.5 million, $12.6 million and $25.1 million for the three months ended June 30, 2012, March 31, 2012 and six months ended June 30, 2012, 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 from Equity Method Investments.

The decline in revenue relative to the prior year was due to a decrease in both Investment Advisory and Management Fees, and in Realized and Unrealized Gains on investments. Investment Advisory and Management Fees of $19.1 million for the quarter ended June 30, 2012 declined compared to the same period a year ago, as higher fees in Wealth Management were offset by declines in Institutional Asset Management. Fees earned in the current quarter increased in comparison to the previous quarter driven principally by increased AUM in Wealth Management.

Realized and Unrealized Gains of $0.8 million in the quarter declined by $4.1 million relative to the prior year, when significant gains were recognized from investments in Trilantic, and were down moderately, relative to the prior quarter.

Equity in earnings of affiliates of $0.8 million in the quarter was in line with the first quarter, but increased relative to the prior year, reflecting an increased contribution from ABS Investment Management.

Expenses

Expenses for the quarter ended June 30, 2012 of $20.0 million decreased 14% from the same period last year and increased 4% from the previous quarter. The year-over-year decrease primarily reflects lower performance-based compensation expense consistent with the year-over-year decline in revenue. The sequential quarterly increase in expenses primarily reflects an increase in compensation based on the performance of individual business lines.

Other U.S. GAAP Expenses

Evercore’s Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. for the three months ended June 30, 2012 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 Special Charges. 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 months ended June 30, 2011 and the three months ended March 31, 2012, are included in Annex I, pages A-2 to A-11.

Non-controlling Interests

Non-controlling 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 June 30, 2012 and 2011 and March 31, 2012 the gain (loss) allocated to non-controlling interests was as follows:


	Net Gain (Loss) Allocated to Noncontrolling Interests
	Three Months Ended								Six Months Ended
	June 30, 2012		March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
	(dollars in thousands)
Segment
Investment Banking (1)	$	15	$	(278	)	$	(973	)	$	(263	)	$	(1,687	)
Investment Management (1)		170		274			866			444			1,795

Total	$	185	$	(4	)	$	(107	)	$	181		$	108

(1)	The difference between Adjusted Pro Forma and U.S. GAAP Noncontrolling Interests relates primarily to intangible amortization expense for certain acquisitions which we excluded from the Adjusted Pro Forma results.

Income Taxes

For the three and six months ended June 30, 2012, Evercore’s Adjusted Pro Forma effective tax rate was 38%, compared to 40% for the three and six months ended June 30, 2011.

For the three and six months ended June 30, 2012, Evercore’s U.S. GAAP effective tax rate was approximately 45% and 42%, respectively, compared to 52% and 44%, respectively, for the three and six months ended June 30, 2011. The effective tax rate for U.S. GAAP purposes reflects significant adjustments relating to the tax treatment of certain compensation transactions, valuation allowances on deferred tax assets of non-U.S. subsidiaries 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 $197.7 million at June 30, 2012. Current assets exceed current liabilities by $188.8 million at June 30, 2012. Amounts due related to the Long-Term Notes Payable were $100.5 million at June 30, 2012.

During the quarter the Company repurchased approximately 1,015,000 shares at an average cost of $25.12 per share.

Dividend

On July 24, 2012, the Board of Directors of Evercore declared a quarterly dividend of $0.20 per share to be paid on September 7, 2012 to common stockholders of record on August 31, 2012.

Conference Call

Investors and analysts may participate in the live conference call by dialing (877) 261-8990 (toll-free domestic) or (847) 619-6441 (international); passcode: 32913532. 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) 843-7419 (toll-free domestic) or (630) 652-3042 (international); passcode: 32913532. 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.


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

Media Contact:		Carina Davidson
		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, 2011, subsequent quarterly reports on Form 10-Q, current reports on 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 Three and Six Months Ended June 30, 2012 and 2011			A-1
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 and Six Months ended June 30, 2012 (Unaudited)			A-6
Adjusted Pro Forma Segment Reconciliation to U.S. GAAP for the Three Months ended March 31, 2012 (Unaudited)			A-7
Adjusted Pro Forma Segment Reconciliation to U.S. GAAP for the Three and Six Months ended June 30, 2011 (Unaudited)			A-8
Notes to Unaudited Condensed Consolidated Adjusted Pro Forma Financial Data			A-9

EVERCORE PARTNERS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011

(dollars in thousands, except per share data)

(UNAUDITED)


	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Revenues
Investment Banking Revenue	$	154,426	$	114,696		$	238,921	$	197,748
Investment Management Revenue		20,036		27,987			39,800		53,431
Other Revenue		1,593		4,270			3,889		7,966

Total Revenues		176,055		146,953			282,610		259,145
Interest Expense (1)		3,558		5,749			7,315		10,843

Net Revenues		172,497		141,204			275,295		248,302

Expenses
Employee Compensation and Benefits		114,290		100,069			195,017		169,166
Occupancy and Equipment Rental		9,146		5,673			17,391		10,791
Professional Fees		8,272		8,028			15,328		16,009
Travel and Related Expenses		7,648		5,416			14,381		9,929
Communications and Information Services		3,028		1,930			5,816		3,974
Depreciation and Amortization		3,680		3,039			9,042		5,996
Special Charges		662		—			662		—
Acquisition and Transition Costs		75		601			148		1,134
Other Operating Expenses		4,501		4,833			8,458		7,924

Total Expenses		151,302		129,589			266,243		224,923

Income Before Income from Equity Method Investments and Income Taxes		21,195		11,615			9,052		23,379
Income from Equity Method Investments		719		69			3,104		469

Income Before Income Taxes		21,914		11,684			12,156		23,848
Provision for Income Taxes		9,773		6,064			5,135		10,500

Net Income from Continuing Operations		12,141		5,620			7,021		13,348

Discontinued Operations
Income (Loss) from Discontinued Operations		—		(448	)		—		(1,037	)
Provision (Benefit) for Income Taxes		—		(87	)		—		(265	)
Net Income (Loss) Attributable to Noncontrolling Interest		—		(276	)		—		(657	)

Net Income (Loss) from Discontinued Operations		—		(85	)		—		(115	)

Net Income		12,141		5,535			7,021		13,233
Net Income Attributable to Noncontrolling Interest		4,207		3,274			2,455		7,384

Net Income Attributable to Evercore Partners Inc.	$	7,934	$	2,261		$	4,566	$	5,849

Net Income (Loss) Attributable to Evercore Partners Inc. Common Shareholders:
From Continuing Operations	$	7,913	$	2,325		$	4,524	$	5,922
From Discontinued Operations		—		(85	)		—		(115	)

Net Income Attributable to Evercore Partners Inc.	$	7,913	$	2,240		$	4,524	$	5,807

Weighted Average Shares of Class A Common Stock Outstanding:
Basic		29,213		23,724			29,169		23,204
Diluted		31,664		27,364			32,106		26,956

Basic Net Income Per Share Attributable to Evercore Partners Inc. Common Shareholders:
From Continuing Operations	$	0.27	$	0.09		$	0.16	$	0.25
From Discontinued Operations		—		—			—		—

Net Income Attributable to Evercore Partners Inc.	$	0.27	$	0.09		$	0.16	$	0.25

Diluted Net Income Per Share Attributable to Evercore Partners Inc. Common Shareholders:
From Continuing Operations	$	0.25	$	0.08		$	0.14	$	0.22
From Discontinued Operations		—		—			—		—

Net Income Attributable to Evercore Partners Inc.	$	0.25	$	0.08		$	0.14	$	0.22

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. 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, other IPO related restricted stock unit awards, as well as Acquisition Related Share Issuances and Unvested Restricted Stock Units granted to Lexicon employees, 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, 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.

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.

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;

Amortization of Intangible Assets. Amortization of intangible assets related to the Protego acquisition, the Braveheart acquisition and the acquisitions of SFS and Lexicon.

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.

Special Charges. Expenses primarily related to exiting the legacy office space in the UK.

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.

A-2

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 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.

Presentation of Income from Equity Method Investments. The Adjusted Pro Forma results present Income from Equity Method Investments within Revenue as the Company’s Management believes it is a more meaningful presentation.

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, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Net Revenues - U.S. GAAP (a)	$	172,497		$	102,798		$	141,204		$	275,295		$	248,302
Client Related Expenses (1)		(3,085	)		(1,636	)		(3,062	)		(4,721	)		(7,033	)
Income from Equity Method Investments (2)		719			2,385			69			3,104			469
Interest Expense on Long-term Debt (3)		1,984			1,974			1,953			3,958			3,896

Net Revenues - Adjusted Pro Forma (a)	$	172,115		$	105,521		$	140,164		$	277,636		$	245,634

Compensation Expense - U.S. GAAP (a)	$	114,290		$	80,727		$	100,069		$	195,017		$	169,166
Amortization of LP Units and Certain Other Awards (4)		(5,147	)		(4,648	)		(5,917	)		(9,795	)		(12,620	)
IPO Related Restricted Stock Unit Awards (5)		—			—			(11,389	)		—			(11,389	)
Acquisition Related Compensation Charges (6)		(6,352	)		(9,645	)		—			(15,997	)		—

Compensation Expense - Adjusted Pro Forma (a)	$	102,791		$	66,434		$	82,763		$	169,225		$	145,157

Operating Income (Loss) - U.S. GAAP (a)	$	21,195		$	(12,143	)	$	11,615		$	9,052		$	23,379
Income from Equity Method Investments (2)		719			2,385			69			3,104			469

Pre-Tax Income (Loss) - U.S. GAAP (a)		21,914			(9,758	)		11,684			12,156			23,848
Amortization of LP Units and Certain Other Awards (4)		5,069			4,742			5,917			9,811			12,620
IPO Related Restricted Stock Unit Awards (5)		—			—			11,389			—			11,389
Acquisition Related Compensation Charges (6)		6,352			9,645			—			15,997			—
Special Charges (7)		662			—			—			662			—
Intangible Asset Amortization (8a)		471			2,328			552			2,799			1,104

Pre-Tax Income - Adjusted Pro Forma (a)		34,468			6,957			29,542			41,425			48,961
Interest Expense on Long-term Debt (3)		1,984			1,974			1,953			3,958			3,896

Operating Income - Adjusted Pro Forma (a)	$	36,452		$	8,931		$	31,495		$	45,383		$	52,857

Provision (Benefit) for Income Taxes - U.S. GAAP (a)	$	9,773		$	(4,638	)	$	6,064		$	5,135		$	10,500
Income Taxes (9)		3,325			7,282			5,752			10,607			9,083

Provision for Income Taxes - Adjusted Pro Forma (a)	$	13,098		$	2,644		$	11,816		$	15,742		$	19,583

Net Income (Loss) from Continuing Operations (a)	$	12,141		$	(5,120	)	$	5,620		$	7,021		$	13,348
Net Income (Loss) Attributable to Noncontrolling Interest (a)		4,207			(1,752	)		3,274			2,455			7,384

Net Income (Loss) from Continuing Operations Attributable to Evercore Partners Inc. - U.S. GAAP (a)		7,934			(3,368	)		2,346			4,566			5,964
Amortization of LP Units and Certain Other Awards (4)		5,069			4,742			5,917			9,811			12,620
IPO Related Restricted Stock Unit Awards (5)		—			—			11,389			—			11,389
Acquisition Related Compensation Charges (6)		6,352			9,645			—			15,997			—
Special Charges (7)		662			—			—			662			—
Intangible Asset Amortization (8a)		471			2,328			552			2,799			1,104
Income Taxes (9)		(3,325	)		(7,282	)		(5,752	)		(10,607	)		(9,083	)
Noncontrolling Interest (10)		4,022			(1,748	)		3,381			2,274			7,276

Net Income from Continuing Operations Attributable to Evercore Partners Inc. - Adjusted Pro Forma (a)	$	21,185		$	4,317		$	17,833		$	25,502		$	29,270

Diluted Shares Outstanding - U.S. GAAP		31,664			29,101			27,364			32,106			26,956
Warrants (11a)		—			1,186			—			—			—
Vested Partnership Units (11b)		7,559			7,656			9,193			7,611			9,398
Unvested Partnership Units (11b)		2,926			2,987			4,496			2,953			4,511
Unvested Restricted Stock Units - Event Based (11b)		12			12			511			12			546
Acquisition Related Share Issuance (11c)		1,208			1,915			—			1,276			—
Unvested Restricted Stock Units - Service Based (11a, 11c)		78			1,578			—			85			—

Diluted Shares Outstanding - Adjusted Pro Forma		43,447			44,435			41,564			44,043			41,411

Key Metrics: (b)
Diluted Earnings (Loss) Per Share from Continuing Operations - U.S. GAAP (c)	$	0.25		$	(0.12	)	$	0.08		$	0.14		$	0.22
Diluted Earnings Per Share from Continuing Operations - Adjusted Pro Forma (c)	$	0.49		$	0.10		$	0.43		$	0.58		$	0.71

Compensation Ratio - U.S. GAAP		66	%		79	%		71	%		71	%		68	%
Compensation Ratio - Adjusted Pro Forma		60	%		63	%		59	%		61	%		59	%

Operating Margin - U.S. GAAP		12	%		(12	%)		8	%		3	%		9	%
Operating Margin - Adjusted Pro Forma		21	%		8	%		22	%		16	%		22	%

Effective Tax Rate - U.S. GAAP		45	%		48	%		52	%		42	%		44	%
Effective Tax Rate - Adjusted Pro Forma		38	%		38	%		40	%		38	%		40	%

(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 June 30, 2012, March 31, 2012 and June 30, 2011, and $42 of accretion for the six months ended June 30, 2012 and 2011, related to the Company’s noncontrolling interest in Trilantic Capital Partners.

A-4

EVERCORE PARTNERS INC.

U.S. GAAP RECONCILIATION TO ADJUSTED PRO FORMA

TRAILING TWELVE MONTHS

(dollars in thousands)

(UNAUDITED)


	Consolidated
	Twelve Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011
Net Revenues - U.S. GAAP	$	551,257		$	519,964		$	472,779
Client Related Expenses (1)		(10,336	)		(10,313	)		(10,489	)
Income from Equity Method Investments (2)		3,554			2,904			222
Interest Expense on Long-term Debt (3)		7,879			7,848			7,757

Net Revenues - Adjusted Pro Forma	$	552,354		$	520,403		$	470,269

Compensation Expense - U.S. GAAP	$	383,531		$	369,310		$	317,340
Amortization of LP Units and Certain Other Awards (4)		(20,882	)		(21,652	)		(22,718	)
IPO Related Restricted Stock Unit Awards (5)		—			(11,389	)		(11,389	)
Acquisition Related Compensation Charges (6)		(30,615	)		(24,263	)		—

Compensation Expense - Adjusted Pro Forma	$	332,034		$	312,006		$	283,233

Compensation Ratio - U.S. GAAP (a)		70	%		71	%		67	%
Compensation Ratio - Adjusted Pro Forma (a)		60	%		60	%		60	%

	Investment Banking
	Twelve Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011
Net Revenues - U.S. GAAP	$	468,718		$	429,530		$	373,662
Client Related Expenses (1)		(9,927	)		(9,914	)		(9,920	)
Income from Equity Method Investments (2)		1,780			1,947			932
Interest Expense on Long-term Debt (3)		4,271			4,255			4,204

Net Revenues - Adjusted Pro Forma	$	464,842		$	425,818		$	368,878

Compensation Expense - U.S. GAAP	$	328,346		$	308,937		$	251,641
Amortization of LP Units and Certain Other Awards (4)		(18,487	)		(19,050	)		(19,506	)
IPO Related Restricted Stock Unit Awards (5)		—			(8,906	)		(8,906	)
Acquisition Related Compensation Charges (6)		(30,615	)		(24,263	)		—

Compensation Expense - Adjusted Pro Forma	$	279,244		$	256,718		$	223,229

Compensation Ratio - U.S. GAAP (a)		70	%		72	%		67	%
Compensation Ratio - Adjusted Pro Forma (a)		60	%		60	%		61	%

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

A-5

EVERCORE PARTNERS INC.

ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAP

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2012

(dollars in thousands)

(UNAUDITED)


	Investment Banking Segment
	Three Months Ended June 30, 2012											Six Months Ended June 30, 2012
	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	$	151,397		$	3,029		(1	)(2)	$	154,426		$	236,017		$	2,904		(1	)(2)	$	238,921
Other Revenue, net		(187	)		(1,075	)	(3	)		(1,262	)		173			(2,145	)	(3	)		(1,972	)

Net Revenues		151,210			1,954					153,164			236,190			759					236,949

Expenses:
Employee Compensation and Benefits		89,829			10,925		(4	)(6)		100,754			144,291			24,692		(4	)(6)		168,983
Non-compensation Costs		25,858			3,307		(4	)(8)		29,165			48,869			7,150		(4	)(8)		56,019
Special Charges		—			662		(7	)		662			—			662		(7	)		662

Total Expenses		115,687			14,894					130,581			193,160			32,504					225,664

Operating Income from Continuing Operations	$	35,523		$	(12,940	)			$	22,583		$	43,030		$	(31,745	)			$	11,285

Compensation Ratio (a)		59	%							66	%		61	%							71	%
Operating Margin (a)		23	%							15	%		18	%							5	%

	Investment Management Segment
	Three Months Ended June 30, 2012											Six Months Ended June 30, 2012
	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	$	20,699		$	(663	)	(1	)(2)	$	20,036		$	41,087		$	(1,287	)	(1	)(2)	$	39,800
Other Revenue, net		206			(909	)	(3	)		(703	)		359			(1,813	)	(3	)		(1,454	)

Net Revenues		20,905			(1,572	)				19,333			41,446			(3,100	)				38,346

Expenses:
Employee Compensation and Benefits		12,962			574		(4	)		13,536			24,934			1,100		(4	)		26,034
Non-compensation Costs		7,014			171		(8	)		7,185			14,159			386		(8	)		14,545

Total Expenses		19,976			745					20,721			39,093			1,486					40,579

Operating Income (Loss) from Continuing Operations	$	929		$	(2,317	)			$	(1,388	)	$	2,353		$	(4,586	)			$	(2,233	)

Compensation Ratio (a)		62	%							70	%		60	%							68	%
Operating Margin (a)		4	%							(7	%)		6	%							(6	%)

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

A-6

EVERCORE PARTNERS INC.

ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAP

FOR THE THREE MONTHS ENDED MARCH 31, 2012

(dollars in thousands)

(UNAUDITED)


	Investment Banking Segment
	Three Months Ended March 31, 2012
	Non-GAAP Adjusted Pro Forma Basis			Adjustments					U.S. GAAP Basis
Net Revenues:
Investment Banking Revenue	$	84,620		$	(125	)	(1	)(2)	$	84,495
Other Revenue, net		360			(1,070	)	(3	)		(710	)

Net Revenues		84,980			(1,195	)				83,785

Expenses:
Employee Compensation and Benefits		54,462			13,767		(4	)(6)		68,229
Non-compensation Costs		23,011			3,843		(4	)(8)		26,854

Total Expenses		77,473			17,610					95,083

Operating Income (Loss) from Continuing Operations	$	7,507		$	(18,805	)			$	(11,298	)

Compensation Ratio (a)		64	%							81	%
Operating Margin (a)		9	%							(13	%)

	Investment Management Segment
	Three Months Ended March 31, 2012
	Non-GAAP Adjusted Pro Forma Basis			Adjustments					U.S. GAAP Basis
Net Revenues:
Investment Management Revenue	$	20,388		$	(624	)	(1	)(2)	$	19,764
Other Revenue, net		153			(904	)	(3	)		(751	)

Net Revenues		20,541			(1,528	)				19,013

Expenses:
Employee Compensation and Benefits		11,972			526		(4	)		12,498
Non-compensation Costs		7,145			215		(8	)		7,360

Total Expenses		19,117			741					19,858

Operating Income (Loss) from Continuing Operations	$	1,424		$	(2,269	)			$	(845	)

Compensation Ratio (a)		58	%							66	%
Operating Margin (a)		7	%							(4	%)

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

A-7

ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAP

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011

(dollars in thousands)

(UNAUDITED)


	Investment Banking Segment
	Three Months Ended June 30, 2011											Six Months Ended June 30, 2011
	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	$	111,847		$	2,849		(1	)(2)	$	114,696		$	192,048		$	5,700		(1	)(2)	$	197,748
Other Revenue, net		339			(1,059	)	(3	)		(720	)		719			(2,112	)	(3	)		(1,393	)

Net Revenues		112,186			1,790					113,976			192,767			3,588					196,355

Expenses:
Employee Compensation and Benefits		67,303			14,042		(4	)(5)		81,345			114,778			19,929		(4	)(5)		134,707
Non-compensation Costs		18,054			3,452		(8	)		21,506			32,267			7,554		(8	)		39,821

Total Expenses		85,357			17,494					102,851			147,045			27,483					174,528

Operating Income from Continuing Operations	$	26,829		$	(15,704	)			$	11,125		$	45,722		$	(23,895	)			$	21,827

Compensation Ratio (a)		60	%							71	%		60	%							69	%
Operating Margin (a)		24	%							10	%		24	%							11	%

	Investment Management Segment
	Three Months Ended June 30, 2011											Six Months Ended June 30, 2011
	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	$	27,843		$	144		(1	)(2)	$	27,987		$	52,567		$	864		(1	)(2)	$	53,431
Other Revenue, net		135			(894	)	(3	)		(759	)		300			(1,784	)	(3	)		(1,484	)

Net Revenues		27,978			(750	)				27,228			52,867			(920	)				51,947

Expenses:
Employee Compensation and Benefits		15,460			3,264		(4	)(5)		18,724			30,379			4,080		(4	)(5)		34,459
Non-compensation Costs		7,852			162		(8	)		8,014			15,353			583		(8	)		15,936

Total Expenses		23,312			3,426					26,738			45,732			4,663					50,395

Operating Income from Continuing Operations	$	4,666		$	(4,176	)			$	490		$	7,135		$	(5,583	)			$	1,552

Compensation Ratio (a)		55	%							69	%		57	%							66	%
Operating Margin (a)		17	%							2	%		13	%							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.

A-8

Notes to Unaudited Condensed Consolidated Adjusted Pro Forma Financial Data

For further information on these Adjusted Pro Forma adjustments see page A-2.

(1)	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.

(2)	The Company has reflected the reclassification of Income from Equity Method Investments to Revenue.

(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 exiting the legacy office space in the UK.

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

A-9


	Three Months Ended June 30, 2012
	Investment Banking		Investment Management		Total Segments		Adjustments				U.S. GAAP
Occupancy and Equipment Rental	$	7,604	$	1,542	$	9,146	$	—			$	9,146
Professional Fees		4,943		1,961		6,904		1,368	(1	)		8,272
Travel and Related Expenses		5,870		564		6,434		1,214	(1	)		7,648
Communications and Information Services		2,431		563		2,994		34	(1	)		3,028
Depreciation and Amortization		1,559		1,650		3,209		471	(8a	)		3,680
Acquisition and Transition Costs		23		52		75		—				75
Other Operating Expenses		3,428		682		4,110		391	(1	)		4,501

Total Non-compensation Costs from Continuing Operations	$	25,858	$	7,014	$	32,872	$	3,478			$	36,350


	Three Months Ended March 31, 2012
	Investment Banking		Investment Management		Total Segments		Adjustments				U.S. GAAP
Occupancy and Equipment Rental	$	6,594	$	1,651	$	8,245	$	—			$	8,245
Professional Fees		4,698		1,871		6,569		487	(1	)		7,056
Travel and Related Expenses		5,036		573		5,609		1,124	(1	)		6,733
Communications and Information Services		2,220		501		2,721		67	(1	)		2,788
Depreciation and Amortization		1,350		1,684		3,034		2,328	(8a	)		5,362
Acquisition and Transition Costs		19		54		73		—				73
Other Operating Expenses		3,094		811		3,905		52	(1	)		3,957

Total Non-compensation Costs from Continuing Operations	$	23,011	$	7,145	$	30,156	$	4,058			$	34,214


	Three Months Ended June 30, 2011
	Investment Banking		Investment Management		Total Segments		Adjustments				U.S. GAAP
Occupancy and Equipment Rental	$	3,942	$	1,731	$	5,673	$	—			$	5,673
Professional Fees		4,920		2,147		7,067		961	(1	)		8,028
Travel and Related Expenses		3,338		593		3,931		1,485	(1	)		5,416
Communications and Information Services		1,432		466		1,898		32	(1	)		1,930
Depreciation and Amortization		806		1,681		2,487		552	(8a	)		3,039
Acquisition and Transition Costs		507		94		601		—				601
Other Operating Expenses		3,109		1,140		4,249		584	(1	)		4,833

Total Non-compensation Costs from Continuing Operations	$	18,054	$	7,852	$	25,906	$	3,614			$	29,520


	Six Months Ended June 30, 2012
	Investment Banking		Investment Management		Total Segments		Adjustments				U.S. GAAP
Occupancy and Equipment Rental	$	14,198	$	3,193	$	17,391	$	—			$	17,391
Professional Fees		9,641		3,832		13,473		1,855	(1	)		15,328
Travel and Related Expenses		10,906		1,137		12,043		2,338	(1	)		14,381
Communications and Information Services		4,651		1,064		5,715		101	(1	)		5,816
Depreciation and Amortization		2,909		3,334		6,243		2,799	(8a	)		9,042
Acquisition and Transition Costs		42		106		148		—				148
Other Operating Expenses		6,522		1,493		8,015		443	(1	)		8,458

Total Non-compensation Costs from Continuing Operations	$	48,869	$	14,159	$	63,028	$	7,536			$	70,564


	Six Months Ended June 30, 2011
	Investment Banking		Investment Management		Total Segments		Adjustments				U.S. GAAP
Occupancy and Equipment Rental	$	7,415	$	3,376	$	10,791	$	—			$	10,791
Professional Fees		8,340		4,026		12,366		3,643	(1	)		16,009
Travel and Related Expenses		6,230		1,107		7,337		2,592	(1	)		9,929
Communications and Information Services		2,884		1,005		3,889		85	(1	)		3,974
Depreciation and Amortization		1,536		3,356		4,892		1,104	(8a	)		5,996
Acquisition and Transition Costs		914		220		1,134		—				1,134
Other Operating Expenses		4,948		2,263		7,211		713	(1	)		7,924

Total Non-compensation Costs from Continuing Operations	$	32,267	$	15,353	$	47,620	$	8,137			$	55,757

A-10

(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 38% for the three and six months ended June 30, 2012, 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.

(11a)

Reflects adjustments to include the dilutive effect of the Warrants and Unvested Restricted Stock Units – Service Based, which have been excluded for U.S. GAAP as a result of the Company having a loss for the period.

(11b)

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.

(11c)

Assumes the vesting of all Acquisition Related Share Issuance and Unvested Restricted Stock Units granted to Lexicon employees. In the computation of outstanding common stock equivalents for U.S. GAAP, these Shares and Restricted Stock Units are reflected using the Treasury Stock Method.

A-11