SEC Filing - Evercore Inc.

EVERCORE PARTNERS INC.

Date: July 27, 2016

/s/ Robert B. Walsh

Robert B. Walsh

Chief Financial Officer

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Form 8-K

UNITED STATES

SECURITIES AND 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 27, 2016

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 27, 2016, Evercore Partners Inc. issued a press release announcing financial results for its second quarter ended June 30, 2016.

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 27, 2016.

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.

EX-99.1

Exhibit 99.1

E V E R C O R E

EVERCORE REPORTS SECOND QUARTER 2016 RESULTS;

QUARTERLY DIVIDEND OF $0.31 PER SHARE

Highlights

•

Second Quarter Financial Summary

•

U.S. GAAP Net Revenues of $350.7 million, up 31% compared to Q2 2015

•

U.S. GAAP Net Income Attributable to Evercore Partners Inc. of $24.1 million, up 124% compared to Q2 2015, or $0.55 per share, up 112% compared to Q2 2015

•

Adjusted Net Revenues of $348.3 million, up 30% compared to Q2 2015; 32% after adjusting for the deconsolidation of an Investment Management affiliate

•

Adjusted Net Income Attributable to Evercore Partners Inc. of $53.4 million, up 57% compared to Q2 2015, or $1.04 per share, up 60% compared to Q2 2015

•

Year-to-Date Financial Summary

•

U.S. GAAP Net Revenues of $608.4 million, up 20% compared to the same period in 2015

•

U.S. GAAP Net Income Attributable to Evercore Partners Inc. of $29.4 million, up 95% compared to the same period in 2015, or $0.66 per share, up 89% compared to the same period in 2015

•

Adjusted Net Revenues of $605.5 million, up 20% compared to the same period in 2015; 22% after adjusting for the deconsolidation of an Investment Management affiliate

•

Adjusted Net Income Attributable to Evercore Partners Inc. of $86.2 million, up 35% compared to the same period in 2015, or $1.67 per share, up 39% compared to the same period in 2015

•

Investment Banking

•

Announced the addition of Mike Palm as an Advisory SMD, strengthening our capabilities in the Industrials sector

•

Advising clients on significant transactions globally, including:

•

Abbott Laboratories’ announced agreement to acquire St. Jude Medical in cash and stock for ~$31 billion total enterprise value

•

The Special Committee of the Board of Facebook, Inc. on its proposed multi-class recapitalization

•

Active bookrunner on MGM Growth Properties’ $1.2 billion IPO

•

Medivation on the unsolicited approach from Sanofi

•

The Special Committee of the Board of Directors of NorthStar Asset Management Group on its $18.7 billion three-way merger with NorthStar Realty Finance Corp. and Colony Capital, Inc.

•

Envision Healthcare Holdings, Inc. on its $15 billion all-stock transaction with AmSurg Corp.

•

Investment Management

•

Announced the plan to transfer ownership and control of the Mexican Private Equity Business to a newly formed entity controlled by the principals of the business

•

Assets Under Management in consolidated businesses were $8.5 billion

•

Returned $188.0 million of capital to shareholders for the first six months through dividends and repurchases, including repurchases of 3.4 million shares at an average price of $47.56. Declared quarterly dividend of $0.31 per share

Note: The Company has renamed its unaudited non-generally accepted accounting principle (“non-GAAP”) measure presented in its quarterly earnings release and other supplementary information from “Adjusted Pro Forma” to “Adjusted.” See Page 4 for further information.

NEW YORK, July 27, 2016 – Evercore Partners Inc. (NYSE: EVR) today announced its results for the second quarter ended June 30, 2016.

U.S. GAAP Results:


	U.S. GAAP
	Three Months Ended									% Change vs.						Six Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015			March 31, 2016			June 30, 2015			June 30, 2016			June 30, 2015			% Change
	(dollars in thousands)
Net Revenues	$	350,656		$	257,713		$	268,096			36	%		31	%	$	608,369		$	506,079			20	%
Operating Income	$	62,605		$	16,125		$	31,111			288	%		101	%	$	78,730		$	42,109			87	%
Net Income Attributable to Evercore Partners Inc.	$	24,087		$	5,318		$	10,764			353	%		124	%	$	29,405		$	15,064			95	%
Diluted Earnings Per Share	$	0.55		$	0.12		$	0.26			358	%		112	%	$	0.66		$	0.35			89	%
Compensation Ratio		63.1	%		69.8	%		64.6	%								66.0	%		66.4	%
Operating Margin		17.9	%		6.3	%		11.6	%								12.9	%		8.3	%

Net Revenues were $350.7 million for the quarter ended June 30, 2016, an increase of 31% compared to $268.1 million for the quarter ended June 30, 2015. Net Revenues were $608.4 million for the six months ended June 30, 2016, an increase of 20% compared to $506.1 million for the six months ended June 30, 2015. Net Income Attributable to Evercore Partners Inc. for the quarter ended June 30, 2016 was $24.1 million, up 124% compared to $10.8 million a year ago. Earnings Per Share was $0.55 for the quarter ended June 30, 2016, up 112% in comparison to the prior year period. Net Income Attributable to Evercore Partners Inc. for the six months ended June 30, 2016 was $29.4 million, up 95% compared to $15.1 million for the same period last year. Earnings Per Share was $0.66 for the six months ended June 30, 2016, up 89% in comparison to the prior year period.

The trailing twelve-month compensation ratio of 64.4% compares to 63.0% for the same period in 2015. The compensation ratio for the quarter ended June 30, 2016 was 63.1%, compared to 64.6% for the quarter ended June 30, 2015.

For the three and six months ended June 30, 2016, Evercore’s effective tax rate was approximately 47.7% and 49.5%, respectively, compared to 50.5% and 50.7%, respectively, for the three and six months ended June 30, 2015. The effective tax rate is impacted by the non-deductible treatment of compensation associated with Evercore LP Units/Interests.

Adjusted Results:


	Adjusted
	Three Months Ended									% Change vs.						Six Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015			March 31, 2016			June 30, 2015			June 30, 2016			June 30, 2015			% Change
	(dollars in thousands)
Net Revenues	$	348,272		$	257,203		$	268,500			35	%		30	%	$	605,475		$	506,659			20	%
Operating Income	$	90,980		$	54,670		$	58,756			66	%		55	%	$	145,650		$	109,229			33	%
Net Income Attributable to Evercore Partners Inc.	$	53,363		$	32,815		$	33,931			63	%		57	%	$	86,178		$	63,656			35	%
Diluted Earnings Per Share	$	1.04		$	0.63		$	0.65			65	%		60	%	$	1.67		$	1.20			39	%
Compensation Ratio		57.6	%		57.6	%		57.4	%								57.6	%		57.4	%
Operating Margin		26.1	%		21.3	%		21.9	%								24.1	%		21.6	%

Net Revenues were $348.3 million for the quarter ended June 30, 2016, an increase of 30% compared to $268.5 million for the quarter ended June 30, 2015. Assuming the restructuring of Atalanta Sosnoff had occurred on December 31, 2014, Net Revenues would have increased 32% compared to the second quarter of 2015. Net Revenues were $605.5 million for the six months ended June 30, 2016, an increase of 20% compared to $506.7 million for the six months ended

June 30, 2015. Assuming the restructuring of Atalanta Sosnoff had occurred on December 31, 2014, Net Revenues would have increased 22% compared to the six months ended June 30, 2015. Net Income Attributable to Evercore Partners Inc. was $53.4 million for the quarter ended June 30, 2016, up 57% compared to $33.9 million a year ago. Earnings Per Share was $1.04 for the quarter ended June 30, 2016, up 60% in comparison to the prior year period. Net Income Attributable to Evercore Partners Inc. was $86.2 million for the six months ended June 30, 2016, up 35% compared to $63.7 million for the same period last year. Earnings Per Share was $1.67 for the six months ended June 30, 2016, up 39% in comparison to the prior year period.

The compensation ratio for the trailing twelve months was 57.9%, compared to 58.3% for the same period in 2015. The compensation ratio for the quarter ended June 30, 2016 was 57.6%, compared to 57.4% for the quarter ended June 30, 2015.

For the three and six months ended June 30, 2016, Evercore’s effective tax rate was 37.5%, compared to 37.3% for the three and six months ended June 30, 2015. Changes in the effective tax rate are principally driven by the level of earnings in businesses with minority owners and earnings generated outside of the U.S.

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.

“Evercore maintained very strong momentum in the second quarter, increasing our Advisory market share, growing the Equities business, maintaining cost discipline and returning significant capital to our shareholders. And despite the episodic volatility in the marketplace, activity levels remained quite high, adding to our backlogs. We reported strong results in both the second quarter and the first half, with significant growth in both revenue and earnings from the prior year, and we believe that we are well positioned as we begin the second half of the year,” said Ralph Schlosstein, President and Chief Executive Officer. “We continue to advance our strategic objectives, adding seasoned bankers and research analysts to our Investment Banking business in the United States and Europe. We continue to streamline our Investment Management business, announcing the plan to transfer ownership and control of our private equity business in Mexico to the management team, and we continue to return significant capital to our shareholders through meaningful share repurchases and competitive dividend distributions.”

“The financial market environment continues to favor our business and our model. And, all of our Investment Banking activities contributed to these record results,” said Roger C. Altman, Executive Chairman. “While there has been considerable public debate as to whether Brexit would slow U.K. and European M&A volume, we have yet to see evidence of that.”

Non-GAAP Measures:

Throughout this release certain information is presented on an Adjusted basis, which is a non-GAAP measure. Adjusted results begin with information prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and then those results are adjusted to exclude certain items and reflect the conversion of vested and unvested Evercore LP Units and Interests into Class A shares. Evercore believes that the disclosed Adjusted 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.

Evercore’s Adjusted Net Income Attributable to Evercore Partners Inc. for the three and six months ended June 30, 2016 was higher than U.S. GAAP as a result of the exclusion of expenses associated with awards granted in conjunction with certain of the Company’s acquisitions, and certain other business acquisition-related charges and professional fees.

Acquisition-related compensation charges for 2016 include expenses associated with performance-based awards granted in conjunction with the Company’s acquisition of ISI. The amount of expense is based on the determination that it is probable that Evercore ISI will achieve certain earnings and margin targets in future periods. Acquisition and Transition charges for 2016 include professional fees incurred, as well as the reversal of a provision for certain settlements. Acquisition-related charges for 2016 also include adjustments for contingent consideration related to certain acquisitions.

In addition, for Adjusted purposes, client related expenses have been presented as a reduction from Revenues and Non-compensation costs.

Evercore’s Adjusted Diluted Shares Outstanding for the three and six months ended June 30, 2016 were higher than U.S. GAAP as a result of the inclusion of Evercore LP partnership units, as well as the assumed vesting of LP Units/Interests and unvested restricted stock units granted to ISI employees.

Further details of these adjustments, as well as an explanation of similar amounts for the three and six months ended June 30, 2015 and the three months ended March 31, 2016, are included in Annex I, pages A-2 to A-13.

Business Line Reporting – Discussion of U.S. GAAP Results

The following is a discussion of Evercore’s segment results on a U.S. GAAP basis.

Investment Banking


	U.S. GAAP
	Three Months Ended									% Change vs.						Six Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015			March 31, 2016			June 30, 2015			June 30, 2016			June 30, 2015			% Change
	(dollars in thousands)
Net Revenues:
Investment Banking Revenues	$	327,174		$	240,626		$	246,550			36	%		33	%	$	567,800		$	464,188			22	%
Other Revenue, net		983			(913	)		(2,173	)		NM			NM			70			(3,231	)		NM

Net Revenues		328,157			239,713			244,377			37	%		34	%		567,870			460,957			23	%

Expenses:
Employee Compensation and Benefits		208,916			169,718			159,677			23	%		31	%		378,634			308,317			23	%
Non-compensation Costs		61,404			57,574			57,535			7	%		7	%		118,978			110,204			8	%
Special Charges		—			—			(139	)		NM			NM			—			2,151			NM

Total Expenses		270,320			227,292			217,073			19	%		25	%		497,612			420,672			18	%

Operating Income	$	57,837		$	12,421		$	27,304			366	%		112	%	$	70,258		$	40,285			74	%

Compensation Ratio		63.7	%		70.8	%		65.3	%								66.7	%		66.9	%
Operating Margin		17.6	%		5.2	%		11.2	%								12.4	%		8.7	%

For the second quarter, Evercore’s Investment Banking segment reported Net Revenues of $328.2 million, which represents an increase of 34% year-over-year. Operating Income of $57.8 million increased 112% from the second quarter of last year. The Operating Margin was 17.6%, in comparison to 11.2% for the second quarter of last year. For the six months ended June 30, 2016, Investment Banking reported Net Revenues of $567.9 million, an increase of 23% from last year. Year-to-date Operating Income of $70.3 million increased 74% compared to $40.3 million last year. The year-to-date Operating Margin was 12.4% compared to 8.7% last year.

Revenues


	U.S. GAAP
	Three Months Ended						% Change vs.						Six Months Ended
	June 30, 2016		March 31, 2016		June 30, 2015		March 31, 2016			June 30, 2015			June 30, 2016		June 30, 2015		% Change
	(dollars in thousands)
Advisory Fees	$	256,758	$	180,102	$	172,288		43	%		49	%	$	436,860	$	331,090		32	%
Commissions and Related Fees		57,178		57,218		53,031		—	%		8	%		114,396		106,099		8	%
Underwriting Fees		13,238		3,306		21,231		300	%		(38	%)		16,544		26,999		(39	%)

Total Investment Banking Revenue	$	327,174	$	240,626	$	246,550		36	%		33	%	$	567,800	$	464,188		22	%

During the quarter, Investment Banking earned advisory fees from 201 client transactions (vs. 179 in Q2 2015) and fees in excess of $1 million from 58 client transactions (vs. 42 in Q2 2015). For the first six months of the year, Investment Banking earned advisory fees from 296 clients (vs. 261 last year) and fees in excess of $1 million from 99 transactions (vs. 77 last year).

During the second quarter of 2016, Commissions and Related Fees of $57.2 million increased 8% from last year on higher trading volume. Underwriting Fees of $13.2 million for the three months ended June 30, 2016 decreased 38% versus the prior year. During the six months ended June 30, 2016, Commissions and Related Fees of $114.4 million increased 8% from last year on higher trading volume. Underwriting Fees of $16.5 million for the six months ended June 30, 2016 decreased 39% versus the prior year.

months of 2015. Operating margins as contemplated for the performance targets of the Class G and H LP Interests, giving effect to just Commissions and Related Fees, for the six months ended June 30, 2016 were consistent with those assumed at the time of the closing of the transactions.

Expenses

Compensation costs were $208.9 million for the second quarter, an increase of 31% year-over-year. The trailing twelve-month compensation ratio was 65.0%, up from 63.2% a year ago. Evercore’s Investment Banking compensation ratio was 63.7% for the second quarter, down versus the compensation ratio reported for the three months ended June 30, 2015 of 65.3%. Year-to-date compensation costs were $378.6 million, an increase of 23% from the prior year.

Compensation costs include $20.6 million and $52.3 million of expense for the three and six months ended June 30, 2016, respectively, and $18.1 million and $43.3 million of expense for the three and six months ended June 30, 2015, respectively, related to the Class E, G and H LP Units/Interests issued in conjunction with the acquisition of ISI. The amount of expense related to the Class G and H LP Interests is based on the determination that it is probable that Evercore ISI will achieve certain earnings and margin targets in future periods.

Assuming the maximum thresholds for the Class G and H LP Interests were considered probable of achievement at June 30, 2016, an additional $21.6 million of expense would have been incurred in the second quarter ended June 30, 2016 and the remaining expense to be accrued over the future vesting period extending from July 1, 2016 to February 15, 2020 would be $141.9 million. In that circumstance, the total number of Class G and H LP Interests that would vest and become exchangeable to Class E LP Units would be 5.0 million.

Non-compensation costs for the current quarter were $61.4 million, up 7% from the same period last year. The increase in non-compensation costs versus the same period in the prior year reflects the addition of personnel within most parts of the business and increased new business costs associated with higher levels of global transaction activity. The ratio of non-compensation costs to net revenue for the current quarter was 18.7%, compared to 23.5% in the same quarter last year. Year-to-date non-compensation costs were $119.0 million, up 8% from the prior year. The ratio of non-compensation costs to net revenue for the six months ended June 30, 2016 was 21.0%, compared to 23.9% last year.

Investment Management


	U.S. GAAP
	Three Months Ended									% Change vs.						Six Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015			March 31, 2016			June 30, 2015			June 30, 2016			June 30, 2015			% Change
	(dollars in thousands)
Net Revenues:
Investment Management Revenues	$	22,255		$	18,429		$	24,505			21	%		(9	%)	$	40,684		$	46,586			(13	%)
Other Revenue, net		244			(429	)		(786	)		NM			NM			(185	)		(1,464	)		87	%

Net Revenues		22,499			18,000			23,719			25	%		(5	%)		40,499			45,122			(10	%)

Expenses:
Employee Compensation and Benefits		12,418			10,197			13,467			22	%		(8	%)		22,615			27,953			(19	%)
Non-compensation Costs		5,313			4,099			6,445			30	%		(18	%)		9,412			11,997			(22	%)
Special Charges		—			—			—			NM			NM			—			3,348			NM

Total Expenses		17,731			14,296			19,912			24	%		(11	%)		32,027			43,298			(26	%)

Operating Income	$	4,768		$	3,704		$	3,807			29	%		25	%	$	8,472		$	1,824			364	%

Compensation Ratio		55.2	%		56.7	%		56.8	%								55.8	%		61.9	%
Operating Margin		21.2	%		20.6	%		16.1	%								20.9	%		4.0	%
Assets Under Management (in millions) (1)	$	8,545		$	8,455		$	14,077			1	%		(39	%)	$	8,545		$	14,077			(39	%)

(1)	Assets Under Management reflect end of period amounts from our consolidated subsidiaries and therefore exclude AUM of $4,921 million and $5,090 million from Atalanta Sosnoff at June 30, 2016 and March 31, 2016, respectively, following the restructuring of our investment on December 31, 2015.

For the second quarter, Evercore’s Investment Management segment reported Net Revenues of $22.5 million and Operating Income of $4.8 million. The Operating Margin was 21.2%. For the six months ended June 30, 2016, Investment Management reported Net Revenues of $40.5 million and Operating Income of $8.5 million. The year-to-date Operating Margin was 20.9%, compared to 4.0% last year.

As of June 30, 2016, Investment Management reported $8.5 billion of AUM, an increase of 1% from March 31, 2016.

Revenues


	U.S. GAAP
	Three Months Ended						% Change vs.						Six Months Ended
	June 30, 2016		March 31, 2016		June 30, 2015		March 31, 2016			June 30, 2015			June 30, 2016		June 30, 2015		% Change
	(dollars in thousands)
Investment Advisory and Management Fees
Wealth Management	$	9,090	$	8,779	$	8,733		4	%		4	%	$	17,869	$	17,178		4	%
Institutional Asset Management		5,906		5,679		11,721		4	%		(50	%)		11,585		22,814		(49	%)
Private Equity		1,348		1,349		1,414		—	%		(5	%)		2,697		2,822		(4	%)

Total Investment Advisory and Management Fees		16,344		15,807		21,868		3	%		(25	%)		32,151		42,814		(25	%)

Realized and Unrealized Gains
Institutional Asset Management		1,147		1,255		822		(9	%)		40	%		2,402		2,446		(2	%)
Private Equity		4,764		1,367		1,815		249	%		162	%		6,131		1,326		362	%

Total Realized and Unrealized Gains		5,911		2,622		2,637		125	%		124	%		8,533		3,772		126	%

Investment Management Revenues	$	22,255	$	18,429	$	24,505		21	%		(9	%)	$	40,684	$	46,586		(13	%)

On December 31, 2015, the Company restructured its investment in Atalanta Sosnoff such that, following the restructuring, its results are reflected on the equity method of accounting.

On July 20, 2016, the Company announced its plan to transfer ownership and control of the Mexican Private Equity Business to a newly formed entity, Glisco Partners Inc., which is controlled by the principals of the business. As of June 30, 2016, the Company’s consolidated AUM included $267 million related to the businesses being transferred.

Investment Advisory and Management Fees of $16.3 million for the quarter ended June 30, 2016 decreased 25% compared to the same period a year ago, driven primarily by lower fees in Institutional Asset Management related to our deconsolidation of Atalanta Sosnoff, partially offset by higher fees in Wealth Management.

Realized and Unrealized Gains of $5.9 million in the quarter increased relative to the prior year, with the change relative to the prior period driven principally by higher gains and performance fees in Private Equity.

Expenses

Investment Management’s second quarter expenses were $17.7 million, down 11% compared to the second quarter of 2015. Year-to-date Investment Management expenses were $32.0 million, down 26% from a year ago.

Business Line Reporting – Discussion of Adjusted Results

The following is a discussion of Evercore’s segment results on an Adjusted basis. See Annex I, pages A-2 to A-13 for further information and reconciliations of these metrics to our U.S. GAAP results.

Investment Banking


	Adjusted
	Three Months Ended									% Change vs.						Six Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015			March 31, 2016			June 30, 2015			June 30, 2016			June 30, 2015			% Change
	(dollars in thousands)
Net Revenues:
Investment Banking Revenues	$	320,924		$	236,432		$	243,007			36	%		32	%	$	557,356		$	456,979			22	%
Other Revenue, net		3,859			565			(380	)		583	%		NM			4,424			312			NM

Net Revenues		324,783			236,997			242,627			37	%		34	%		561,780			457,291			23	%

Expenses:
Employee Compensation and Benefits		188,178			137,959			140,532			36	%		34	%		326,137			262,637			24	%
Non-compensation Costs		52,198			50,383			49,393			4	%		6	%		102,581			95,023			8	%

Total Expenses		240,376			188,342			189,925			28	%		27	%		428,718			357,660			20	%

Operating Income	$	84,407		$	48,655		$	52,702			73	%		60	%	$	133,062		$	99,631			34	%

Compensation Ratio		57.9	%		58.2	%		57.9	%								58.1	%		57.4	%
Operating Margin		26.0	%		20.5	%		21.7	%								23.7	%		21.8	%

For the second quarter, Evercore’s Investment Banking segment reported Net Revenues of $324.8 million, which represents an increase of 34% year-over-year. Operating Income of $84.4 million increased 60% from the second quarter of last year. The Operating Margin was 26.0%, in comparison to 21.7% for the second quarter of last year. For the six months ended June 30, 2016, Investment Banking reported Net Revenues of $561.8 million, an increase of 23% from last year. Year-to-date Operating Income of $133.1 million increased 34% compared to $99.6 million last year. The year-to-date Operating Margin was 23.7% compared to 21.8% last year.

Revenues


	Adjusted
	Three Months Ended						% Change vs.						Six Months Ended
	June 30, 2016		March 31, 2016		June 30, 2015		March 31, 2016			June 30, 2015			June 30, 2016		June 30, 2015		% Change
	(dollars in thousands)
Advisory Fees (1)	$	250,508	$	175,908	$	168,745		42	%		48	%	$	426,416	$	323,881		32	%
Commissions and Related Fees		57,178		57,218		53,031		—	%		8	%		114,396		106,099		8	%
Underwriting Fees		13,238		3,306		21,231		300	%		(38	%)		16,544		26,999		(39	%)

Total Investment Banking Revenue	$	320,924	$	236,432	$	243,007		36	%		32	%	$	557,356	$	456,979		22	%

(1)

Advisory Fees on an Adjusted basis reflect the reduction of revenues for client-related expenses and provisions for uncollected receivables of $6,540, $3,922 and $4,346 for the three months ended June 30, 2016, March 31, 2016 and June 30, 2015, respectively, and $10,462 and $7,975 for the six months ended June 30, 2016 and 2015, respectively, as well as the reclassification of earnings (losses) related to our equity investment in G5 | Evercore - Advisory of $290, ($272) and $803 for the three months ended June 30, 2016, March 31, 2016 and June 30, 2015, respectively, and $18 and $766 for the six months ended June 30, 2016 and 2015, respectively.

Within the above results, Evercore ISI, our U.S. equities business, reported Net Revenues of $122.0 million, including allocated U.S. underwriting revenues of $7.8 million for the six months ended June 30, 2016 and Operating Margins of 20.7%, compared to 16.6% for the first six months of 2015. Operating margins as contemplated for the performance targets of the Class G and H LP Interests, giving effect to just Commissions and Related Fees, for the six months ended June 30, 2016 were consistent with those assumed at the time of the closing of the transactions.

Expenses

Compensation costs were $188.2 million for the second quarter, an increase of 34% year-over-year. The trailing twelve-month compensation ratio was 58.4%, down from 58.6% a year ago. Evercore’s Investment Banking compensation ratio was 57.9% for the second quarter, flat versus the compensation ratio reported for the three months ended June 30, 2015. Year-to-date compensation costs were $326.1 million, an increase of 24% from the prior year.

Non-compensation costs for the current quarter were $52.2 million, up 6% from the same period last year. The increase in non-compensation costs versus the same period in the prior year reflects the addition of personnel within most parts of the business and increased new business costs associated with higher levels of global transaction activity. The ratio of non-compensation costs to net revenue for the current quarter was 16.1%, compared to 20.4% in the same quarter last year. Year-to-date non-compensation costs were $102.6 million, up 8% from the prior year. The ratio of non-compensation costs to net revenue for the six months ended June 30, 2016 was 18.3%, compared to 20.8% last year.

Investment Management


	Adjusted
	Three Months Ended									% Change vs.						Six Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015			March 31, 2016			June 30, 2015			June 30, 2016			June 30, 2015			% Change
	(dollars in thousands)
Net Revenues:
Investment Management Revenues	$	23,245		$	19,965		$	25,700			16	%		(10	%)	$	43,210		$	48,920			(12	%)
Other Revenue, net		244			241			173			1	%		41	%		485			448			8	%

Net Revenues		23,489			20,206			25,873			16	%		(9	%)		43,695			49,368			(11	%)

Expenses:
Employee Compensation and Benefits		12,418			10,197			13,467			22	%		(8	%)		22,615			27,953			(19	%)
Non-compensation Costs		4,498			3,994			6,352			13	%		(29	%)		8,492			11,817			(28	%)

Total Expenses		16,916			14,191			19,819			19	%		(15	%)		31,107			39,770			(22	%)

Operating Income	$	6,573		$	6,015		$	6,054			9	%		9	%	$	12,588		$	9,598			31	%

Compensation Ratio		52.9	%		50.5	%		52.1	%								51.8	%		56.6	%
Operating Margin		28.0	%		29.8	%		23.4	%								28.8	%		19.4	%
Assets Under Management (in millions) (1)	$	8,545		$	8,455		$	14,077			1	%		(39	%)	$	8,545		$	14,077			(39	%)

(1)	Assets Under Management reflect end of period amounts from our consolidated subsidiaries and therefore exclude AUM of $4,921 million and $5,090 million from Atalanta Sosnoff at June 30, 2016 and March 31, 2016, respectively, following the restructuring of our investment on December 31, 2015.

For the second quarter, Evercore’s Investment Management segment reported Net Revenues of $23.5 million and Operating Income of $6.6 million. The Operating Margin was 28.0%. For the six months ended June 30, 2016, Investment Management reported Net Revenues of $43.7 million and Operating Income $12.6 million. The year-to-date Operating Margin was 28.8%, compared to 19.4% last year.

As of June 30, 2016, Investment Management reported $8.5 billion of AUM, an increase of 1% from March 31, 2016.

Revenues


	Adjusted
	Three Months Ended						% Change vs.						Six Months Ended
	June 30, 2016		March 31, 2016		June 30, 2015		March 31, 2016			June 30, 2015			June 30, 2016		June 30, 2015		% Change
	(dollars in thousands)
Investment Advisory and Management Fees
Wealth Management	$	9,090	$	8,779	$	8,733		4	%		4	%	$	17,869	$	17,178		4	%
Institutional Asset Management (1)		5,522		5,656		11,721		(2	%)		(53	%)		11,178		22,809		(51	%)
Private Equity		1,348		1,349		1,414		—	%		(5	%)		2,697		2,822		(4	%)

Total Investment Advisory and Management Fees		15,960		15,784		21,868		1	%		(27	%)		31,744		42,809		(26	%)

Realized and Unrealized Gains
Institutional Asset Management		1,147		1,255		822		(9	%)		40	%		2,402		2,446		(2	%)
Private Equity		4,764		1,367		1,815		249	%		162	%		6,131		1,326		362	%

Total Realized and Unrealized Gains		5,911		2,622		2,637		125	%		124	%		8,533		3,772		126	%

Equity in Earnings of Affiliates (2)		1,374		1,559		1,195		(12	%)		15	%		2,933		2,339		25	%

Investment Management Revenues	$	23,245	$	19,965	$	25,700		16	%		(10	%)	$	43,210	$	48,920		(12	%)

(1)

Management fees from Institutional Asset Management on an Adjusted basis reflect the reduction of revenues for client-related expenses of $384 and $23 for the three months ended June 30, 2016 and March 31, 2016, respectively, and $407 and $5 for the six months ended June 30, 2016 and 2015, respectively.

(2)	Equity in G5 \| Evercore - Wealth Management, ABS and Atalanta Sosnoff (after its deconsolidation on December 31, 2015) on a U.S. GAAP basis are reclassified from Investment Management Revenue to Income from Equity Method Investments.

Investment Advisory and Management Fees of $16.0 million for the quarter ended June 30, 2016 decreased 27% compared to the same period a year ago, driven primarily by lower fees in Institutional Asset Management related to our deconsolidation of Atalanta Sosnoff, partially offset by higher fees in Wealth Management.

On December 31, 2015, the Company restructured its investment in Atalanta Sosnoff such that, following the restructuring, its results are reflected on the equity method of accounting. Assuming the restructuring of Atalanta Sosnoff had occurred on December 31, 2014, Investment Management Revenues would have increased 14% when compared to the second quarter of 2015.

Equity in Earnings of Affiliates of $1.4 million in the quarter increased relative to the prior year principally as a result of the inclusion of Atalanta Sosnoff’s income in the second quarter of 2016.

Expenses

Investment Management’s second quarter expenses were $16.9 million, down 15% compared to the second quarter of 2015. Assuming the restructuring of Atalanta Sosnoff had occurred on December 31, 2014, Investment Management expenses would have increased 16% when compared to the second quarter of 2015. Year-to-date Investment Management expenses were $31.1 million, down 22% from a year ago. Assuming the restructuring of Atalanta Sosnoff had occurred on December 31, 2014, Investment Management expenses would have increased 6% when compared to the six months ended June 30, 2015.

Balance Sheet

The Company continues to maintain a strong balance sheet, holding cash, cash equivalents and marketable securities of $316.0 million at June 30, 2016. Current assets exceed current liabilities by $334.8 million at June 30, 2016. Amounts due related to the Long-Term Notes Payable and Subordinated Borrowings were $184.5 million at June 30, 2016.

Capital Transactions

On July 26, 2016, the Board of Directors of Evercore declared a quarterly dividend of $0.31 per share to be paid on September 9, 2016 to common stockholders of record on August 26, 2016.

During the three months ended June 30, 2016 the Company repurchased approximately 1.0 million shares at an average cost per share of $49.74. During the six months ended June 30, 2016, the Company repurchased a total of 3.4 million shares at an average price of $47.56.

Conference Call

Evercore will host a related conference call beginning at 8:00 a.m. Eastern Time, Wednesday, July 27, 2016, accessible via telephone and the internet. Investors and analysts may participate in the live conference call by dialing (877) 359-9508 (toll-free domestic) or (224) 357-2393 (international); passcode: 50327013. 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 (855) 859-2056 (toll-free domestic) or (404) 537-3406 (international); passcode: 50327013. 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

Established in 1995, Evercore is a leading global independent investment banking advisory firm. Evercore advises a diverse set of investment banking clients on a wide range of transactions and issues and provides institutional investors with high quality equity research, sales and trading execution that is free of the conflicts created by proprietary activities. The firm also offers investment management services to high net worth and institutional investors. With 28 offices in North America, Europe, South America and Asia, Evercore has the scale and strength to serve clients globally through a focused and tailored approach designed to meet their unique needs. 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 +1.212.857.3100

Media Contact:		Dana Gorman
		The Abernathy MacGregor Group, for Evercore +1.212.371.5999

Basis of Alternative Financial Statement Presentation

Our Adjusted results are a non-GAAP measure. Evercore believes that the disclosed Adjusted 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 our U.S. GAAP results to Adjusted 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,” “probable,” “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, 2015, 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, 2016 and 2015		A-1
Adjusted:
Adjusted Results (Unaudited)		A-2
U.S. GAAP Reconciliation to Adjusted Results (Unaudited)		A-4
U.S. GAAP Segment Reconciliation to Adjusted Results for the Three and Six Months ended June 30, 2016 (Unaudited)		A-7
U.S. GAAP Segment Reconciliation to Adjusted Results for the Three Months ended March 31, 2016 (Unaudited)		A-8
U.S. GAAP Segment Reconciliation to Adjusted Results for the Three and Six Months ended June 30, 2015 (Unaudited)		A-9
U.S. GAAP Segment Reconciliation to Consolidated Results (Unaudited)		A-10
Notes to Unaudited Condensed Consolidated Adjusted Financial Data		A-11

EVERCORE PARTNERS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015

(dollars in thousands, except per share data)

(UNAUDITED)


	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Revenues
Investment Banking Revenue	$	327,174		$	246,550		$	567,800		$	464,188
Investment Management Revenue		22,255			24,505			40,684			46,586
Other Revenue		5,764			1,852			7,141			4,559

Total Revenues		355,193			272,907			615,625			515,333
Interest Expense (1)		4,537			4,811			7,256			9,254

Net Revenues		350,656			268,096			608,369			506,079

Expenses
Employee Compensation and Benefits		221,334			173,144			401,249			336,270
Occupancy and Equipment Rental		10,582			11,684			21,356			23,914
Professional Fees		13,751			13,164			24,453			22,597
Travel and Related Expenses		15,989			13,400			29,818			26,570
Communications and Information Services		9,786			9,738			19,789			18,300
Depreciation and Amortization		6,626			6,313			13,008			12,714
Special Charges		—			(139	)		—			5,499
Acquisition and Transition Costs		(329	)		917			(329	)		1,401
Other Operating Expenses		10,312			8,764			20,295			16,705

Total Expenses		288,051			236,985			529,639			463,970

Income Before Income from Equity Method Investments and Income Taxes		62,605			31,111			78,730			42,109
Income from Equity Method Investments		1,664			1,998			2,951			3,105

Income Before Income Taxes		64,269			33,109			81,681			45,214
Provision for Income Taxes		30,676			16,723			40,410			22,935

Net Income		33,593			16,386			41,271			22,279
Net Income Attributable to Noncontrolling Interest		9,506			5,622			11,866			7,215

Net Income Attributable to Evercore Partners Inc.	$	24,087		$	10,764		$	29,405		$	15,064

Net Income Attributable to Evercore Partners Inc. Common Shareholders	$	24,087		$	10,764		$	29,405		$	15,064

Weighted Average Shares of Class A Common Stock Outstanding:
Basic		39,249			36,445			39,435			36,584
Diluted		43,603			42,165			44,261			42,479
Net Income Per Share Attributable to Evercore Partners Inc. Common Shareholders:
Basic	$	0.61		$	0.30		$	0.75		$	0.41
Diluted	$	0.55		$	0.26		$	0.66		$	0.35

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

A - 1

Adjusted Results

Throughout the discussion of Evercore’s business segments, information is presented on an Adjusted basis (formerly called “Adjusted Pro Forma”), which is a non-generally accepted accounting principles (“non-GAAP”) measure. Adjusted 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, as well as Acquisition Related Share Issuances and Unvested Restricted Stock Units granted to Lexicon and ISI employees, into Class A shares. Evercore believes that the disclosed Adjusted 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 amounts are allocated to the Company’s two business segments: Investment Banking and Investment Management. The differences between the Adjusted 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 vesting of Class E LP Units issued in conjunction with the acquisition of ISI, as well as Class G and H LP Interests. The amount of expense for the Class G and H LP Interests is based on the determination that it is probable that Evercore ISI will achieve certain earnings and margin targets in 2016 and in future periods. The Adjusted results assume these LP Units and certain Class G and H LP Interests have vested and have been exchanged for Class A shares. Accordingly, any expense associated with these units, and related awards, is excluded from the Adjusted results, and the noncontrolling interest related to these units is converted to a 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 equity interests, and thus the Adjusted results reflect the exchange of certain vested and unvested Evercore LP partnership units and interests and IPO related restricted stock unit awards into Class A shares.

Adjustments Associated with Business Combinations. The following charges resulting from business combinations have been excluded from the Adjusted 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 and Other Purchase Accounting-related Amortization. Amortization of intangible assets and other purchase accounting-related amortization from the acquisitions of ISI, SFS and certain other acquisitions.

Compensation Charges. Expenses for deferred consideration issued to the sellers of certain of the Company’s acquisitions.

Acquisition and Transition Costs. Primarily professional fees incurred, as well as the reversal of a provision for certain settlements in 2016 and costs related to transitioning acquisitions or divestitures.

Fair Value of Contingent Consideration. The expense associated with changes in the fair value of contingent consideration issued to the sellers of certain of the Company’s acquisitions is excluded from the Adjusted results.

Client Related Expenses. Client related expenses and provisions for uncollected receivables have been classified as a reduction of revenue in the Adjusted presentation. 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

Special Charges. Expenses during 2015 include separation benefits and costs associated with the termination of certain contracts within the Company’s Evercore ISI business, as well as the finalization of a matter associated with the wind-down of the Company’s U.S. Private Equity business.

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 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 certain Evercore LP Units and interests 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. In addition, the Adjusted presentation can reflect the netting of changes in the Company’s Tax Receivable Agreement against Income Tax Expense.

Presentation of Interest Expense. The Adjusted 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 Investment Banking and Investment Management Operating Income are presented before interest expense on debt, which is included in interest expense on a U.S. GAAP basis.

Presentation of Income from Equity Method Investments. The Adjusted 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 RESULTS

(dollars in thousands)

(UNAUDITED)


	Three Months Ended									Six Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015			June 30, 2016			June 30, 2015
Net Revenues - U.S. GAAP	$	350,656		$	257,713		$	268,096		$	608,369		$	506,079
Client Related Expenses (1)		(6,924	)		(3,945	)		(4,346	)		(10,869	)		(7,980	)
Income from Equity Method Investments (2)		1,664			1,287			1,998			2,951			3,105
Interest Expense on Debt (3)		2,876			2,148			2,752			5,024			5,349
Other Purchase Accounting-related Amortization (7a)		—			—			—			—			106

Net Revenues - Adjusted	$	348,272		$	257,203		$	268,500		$	605,475		$	506,659

Compensation Expense - U.S. GAAP	$	221,334		$	179,915		$	173,144		$	401,249		$	336,270
Amortization of LP Units / Interests and Certain Other Awards (4)		(20,738	)		(31,759	)		(18,193	)		(52,497	)		(44,143	)
Other Acquisition Related Compensation Charges (5)		—			—			(952	)		—			(1,537	)

Compensation Expense - Adjusted	$	200,596		$	148,156		$	153,999		$	348,752		$	290,590

Operating Income - U.S. GAAP	$	62,605		$	16,125		$	31,111		$	78,730		$	42,109
Income from Equity Method Investments (2)		1,664			1,287			1,998			2,951			3,105

Pre-Tax Income - U.S. GAAP		64,269			17,412			33,109			81,681			45,214
Amortization of LP Units / Interests and Certain Other Awards (4)		20,738			31,759			18,193			52,497			44,143
Other Acquisition Related Compensation Charges (5)		—			—			952			—			1,537
Special Charges (6)		—			—			(139	)		—			5,499
Intangible Asset Amortization / Other Purchase Accounting-related Amortization (7a)		2,845			3,245			2,972			6,090			6,086
Acquisition and Transition Costs (7b)		(329	)		—			917			(329	)		1,401
Fair Value of Contingent Consideration (7c)		581			106			—			687			—

Pre-Tax Income - Adjusted		88,104			52,522			56,004			140,626			103,880
Interest Expense on Debt (3)		2,876			2,148			2,752			5,024			5,349

Operating Income - Adjusted	$	90,980		$	54,670		$	58,756		$	145,650		$	109,229

Provision for Income Taxes - U.S. GAAP	$	30,676		$	9,734		$	16,723		$	40,410		$	22,935
Income Taxes (8)		2,364			9,961			4,139			12,325			15,763

Provision for Income Taxes - Adjusted	$	33,040		$	19,695		$	20,862		$	52,735		$	38,698

Net Income Attributable to Evercore Partners Inc. - U.S. GAAP	$	24,087		$	5,318		$	10,764		$	29,405		$	15,064
Amortization of LP Units / Interests and Certain Other Awards (4)		20,738			31,759			18,193			52,497			44,143
Other Acquisition Related Compensation Charges (5)		—			—			952			—			1,537
Special Charges (6)		—			—			(139	)		—			5,499
Intangible Asset Amortization / Other Purchase Accounting-related Amortization (7a)		2,845			3,245			2,972			6,090			6,086
Acquisition and Transition Costs (7b)		(329	)		—			917			(329	)		1,401
Fair Value of Contingent Consideration (7c)		581			106			—			687			—
Income Taxes (8)		(2,364	)		(9,961	)		(4,139	)		(12,325	)		(15,763	)
Noncontrolling Interest (9)		7,805			2,348			4,411			10,153			5,689

Net Income Attributable to Evercore Partners Inc. - Adjusted	$	53,363		$	32,815		$	33,931		$	86,178		$	63,656

Diluted Shares Outstanding - U.S. GAAP		43,603			44,920			42,165			44,261			42,479
LP Units (10a)		7,617			7,106			10,199			7,363			10,282
Unvested Restricted Stock Units - Event Based (10a)		12			12			12			12			12
Acquisition Related Share Issuance (10b)		—			—			96			—			106

Diluted Shares Outstanding - Adjusted		51,232			52,038			52,472			51,636			52,879

Key Metrics: (a)
Diluted Earnings Per Share - U.S. GAAP	$	0.55		$	0.12		$	0.26		$	0.66		$	0.35
Diluted Earnings Per Share - Adjusted	$	1.04		$	0.63		$	0.65		$	1.67		$	1.20

Compensation Ratio - U.S. GAAP		63.1	%		69.8	%		64.6	%		66.0	%		66.4	%
Compensation Ratio - Adjusted		57.6	%		57.6	%		57.4	%		57.6	%		57.4	%

Operating Margin - U.S. GAAP		17.9	%		6.3	%		11.6	%		12.9	%		8.3	%
Operating Margin - Adjusted		26.1	%		21.3	%		21.9	%		24.1	%		21.6	%

Effective Tax Rate - U.S. GAAP		47.7	%		55.9	%		50.5	%		49.5	%		50.7	%
Effective Tax Rate - Adjusted		37.5	%		37.5	%		37.3	%		37.5	%		37.3	%

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

A - 4

EVERCORE PARTNERS INC.

RECONCILIATION TO ATALANTA SOSNOFF ADJUSTED RESULTS

(dollars in thousands)

(UNAUDITED)


	Three Months Ended								Six Months Ended
	June 30, 2016		June 30, 2015			% Change			June 30, 2016		June 30, 2015			% Change
Adjusted Net Revenues (a)	$	348,272	$	268,500			30	%	$	605,475	$	506,659			20	%
Atalanta Sosnoff Deconsolidation (11)		—		(5,309	)		NM			—		(10,714	)		NM

Adjusted Net Revenues - Including Atalanta Sosnoff Adjustment	$	348,272	$	263,191			32	%	$	605,475	$	495,945			22	%

Adjusted Investment Management Revenues (a)	$	23,245	$	25,700			(10	%)	$	43,210	$	48,920			(12	%)
Atalanta Sosnoff Deconsolidation (11)		—		(5,309	)		NM			—		(10,713	)		NM

Adjusted Investment Management Revenues - Including Atalanta Sosnoff Adjustment	$	23,245	$	20,391			14	%	$	43,210	$	38,207			13	%

Adjusted Investment Management Expenses (a)	$	16,916	$	19,819			(15	%)	$	31,107	$	39,770			(22	%)
Atalanta Sosnoff Deconsolidation (11)		—		(5,200	)		NM			—		(10,482	)		NM

Adjusted Investment Management Expenses - Including Atalanta Sosnoff Adjustment	$	16,916	$	14,619			16	%	$	31,107	$	29,288			6	%

(a)	See page A-4 for reconciliations of U.S. GAAP to Adjusted results.

A - 5

EVERCORE PARTNERS INC.

U.S. GAAP RECONCILIATION TO ADJUSTED RESULTS

TRAILING TWELVE MONTHS

(dollars in thousands)

(UNAUDITED)


	Consolidated
	Twelve Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015
Net Revenues - U.S. GAAP	$	1,325,563		$	1,243,003		$	1,055,128
Client Related Expenses (1)		(25,514	)		(22,936	)		(18,711	)
Income from Equity Method Investments (2)		5,896			6,230			6,006
Interest Expense on Debt (3)		9,292			9,168			9,605
Other Purchase Accounting-related Amortization (7a)		—			—			317

Net Revenues - Adjusted	$	1,315,237		$	1,235,465		$	1,052,345

Compensation Expense - U.S. GAAP	$	853,154		$	804,964		$	665,048
Amortization of LP Units / Interests and Certain Other Awards (4)		(92,027	)		(89,482	)		(47,542	)
Other Acquisition Related Compensation Charges (5)		—			(952	)		(3,697	)

Compensation Expense - Adjusted	$	761,127		$	714,530		$	613,809

Compensation Ratio - U.S. GAAP (a)		64.4	%		64.8	%		63.0	%
Compensation Ratio - Adjusted (a)		57.9	%		57.8	%		58.3	%

	Investment Banking
	Twelve Months Ended
	June 30, 2016			March 31, 2016			June 30, 2015
Net Revenues - U.S. GAAP	$	1,237,828		$	1,154,048		$	961,420
Client Related Expenses (1)		(25,038	)		(22,844	)		(18,673	)
Income from Equity Method Investments (2)		230			743			758
Interest Expense on Debt (3)		6,958			5,875			5,787
Other Purchase Accounting-related Amortization (7a)		—			—			317

Net Revenues - Adjusted	$	1,219,978		$	1,137,822		$	949,609

Compensation Expense - U.S. GAAP	$	804,395		$	755,156		$	607,587
Amortization of LP Units / Interests and Certain Other Awards (4)		(92,027	)		(89,482	)		(47,542	)
Other Acquisition Related Compensation Charges (5)		—			(952	)		(3,697	)

Compensation Expense - Adjusted	$	712,368		$	664,722		$	556,348

Compensation Ratio - U.S. GAAP (a)		65.0	%		65.4	%		63.2	%
Compensation Ratio - Adjusted (a)		58.4	%		58.4	%		58.6	%

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

A - 6

EVERCORE PARTNERS INC.

U.S. GAAP SEGMENT RECONCILIATION TO ADJUSTED RESULTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2016

(dollars in thousands)

(UNAUDITED)


	Investment Banking Segment
	Three Months Ended June 30, 2016										Six Months Ended June 30, 2016
	U.S. GAAP Basis			Adjustments				Non-GAAP Adjusted Basis			U.S. GAAP Basis			Adjustments				Non-GAAP Adjusted Basis
Net Revenues:
Investment Banking Revenue	$	327,174		$	(6,250	)	(1)(2)	$	320,924		$	567,800		$	(10,444	)	(1)(2)	$	557,356
Other Revenue, net		983			2,876		(3)		3,859			70			4,354		(3)		4,424

Net Revenues		328,157			(3,374	)			324,783			567,870			(6,090	)			561,780

Expenses:
Employee Compensation and Benefits		208,916			(20,738	)	(4)		188,178			378,634			(52,497	)	(4)		326,137
Non-compensation Costs		61,404			(9,206	)	(7)		52,198			118,978			(16,397	)	(7)		102,581

Total Expenses		270,320			(29,944	)			240,376			497,612			(68,894	)			428,718

Operating Income (a)	$	57,837		$	26,570			$	84,407		$	70,258		$	62,804			$	133,062

Compensation Ratio (b)		63.7	%						57.9	%		66.7	%						58.1	%
Operating Margin (b)		17.6	%						26.0	%		12.4	%						23.7	%

	Investment Management Segment
	Three Months Ended June 30, 2016										Six Months Ended June 30, 2016
	U.S. GAAP Basis			Adjustments				Non-GAAP Adjusted Basis			U.S. GAAP Basis			Adjustments				Non-GAAP Adjusted Basis
Net Revenues:
Investment Management Revenue	$	22,255		$	990		(1)(2)	$	23,245		$	40,684		$	2,526		(1)(2)	$	43,210
Other Revenue, net		244			—		(3)		244			(185	)		670		(3)		485

Net Revenues		22,499			990				23,489			40,499			3,196				43,695

Expenses:
Employee Compensation and Benefits		12,418			—				12,418			22,615			—				22,615
Non-compensation Costs		5,313			(815	)	(7)		4,498			9,412			(920	)	(7)		8,492

Total Expenses		17,731			(815	)			16,916			32,027			(920	)			31,107

Operating Income (a)	$	4,768		$	1,805			$	6,573		$	8,472		$	4,116			$	12,588

Compensation Ratio (b)		55.2	%						52.9	%		55.8	%						51.8	%
Operating Margin (b)		21.2	%						28.0	%		20.9	%						28.8	%

(a)	Operating Income for U.S. GAAP excludes Income (Loss) from Equity Method Investments.

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

A - 7

EVERCORE PARTNERS INC.

U.S. GAAP SEGMENT RECONCILIATION TO ADJUSTED RESULTS

FOR THE THREE MONTHS ENDED MARCH 31, 2016

(dollars in thousands)

(UNAUDITED)


	Investment Banking Segment
	Three Months Ended March 31, 2016
	U.S. GAAP Basis			Adjustments				Non-GAAP Adjusted Basis
Net Revenues:
Investment Banking Revenue	$	240,626		$	(4,194	)	(1)(2)	$	236,432
Other Revenue, net		(913	)		1,478		(3)		565

Net Revenues		239,713			(2,716	)			236,997

Expenses:
Employee Compensation and Benefits		169,718			(31,759	)	(4)		137,959
Non-compensation Costs		57,574			(7,191	)	(7)		50,383

Total Expenses		227,292			(38,950	)			188,342

Operating Income (a)	$	12,421		$	36,234			$	48,655

Compensation Ratio (b)		70.8	%						58.2	%
Operating Margin (b)		5.2	%						20.5	%

	Investment Management Segment
	Three Months Ended March 31, 2016
	U.S. GAAP Basis			Adjustments				Non-GAAP Adjusted Basis
Net Revenues:
Investment Management Revenue	$	18,429		$	1,536		(1)(2)	$	19,965
Other Revenue, net		(429	)		670		(3)		241

Net Revenues		18,000			2,206				20,206

Expenses:
Employee Compensation and Benefits		10,197			—				10,197
Non-compensation Costs		4,099			(105	)	(7)		3,994

Total Expenses		14,296			(105	)			14,191

Operating Income (a)	$	3,704		$	2,311			$	6,015

Compensation Ratio (b)		56.7	%						50.5	%
Operating Margin (b)		20.6	%						29.8	%

(a)	Operating Income for U.S. GAAP excludes Income (Loss) from Equity Method Investments.

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

A - 8

EVERCORE PARTNERS INC.

U.S. GAAP SEGMENT RECONCILIATION TO ADJUSTED RESULTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2015

(dollars in thousands)

(UNAUDITED)


	Investment Banking Segment
	Three Months Ended June 30, 2015										Six Months Ended June 30, 2015
	U.S. GAAP Basis			Adjustments				Non-GAAP Adjusted Basis			U.S. GAAP Basis			Adjustments				Non-GAAP Adjusted Basis
Net Revenues:
Investment Banking Revenue	$	246,550		$	(3,543	)	(1)(2)	$	243,007		$	464,188		$	(7,209	)	(1)(2)	$	456,979
Other Revenue, net		(2,173	)		1,793		(3)		(380	)		(3,231	)		3,543		(3)(7a)		312

Net Revenues		244,377			(1,750	)			242,627			460,957			(3,666	)			457,291

Expenses:
Employee Compensation and Benefits		159,677			(19,145	)	(4)(5)		140,532			308,317			(45,680	)	(4)(5)		262,637
Non-compensation Costs		57,535			(8,142	)	(7)		49,393			110,204			(15,181	)	(7)		95,023
Special Charges		(139	)		139		(6)		—			2,151			(2,151	)	(6)		—

Total Expenses		217,073			(27,148	)			189,925			420,672			(63,012	)			357,660

Operating Income (a)	$	27,304		$	25,398			$	52,702		$	40,285		$	59,346			$	99,631

Compensation Ratio (b)		65.3	%						57.9	%		66.9	%						57.4	%
Operating Margin (b)		11.2	%						21.7	%		8.7	%						21.8	%

	Investment Management Segment
	Three Months Ended June 30, 2015										Six Months Ended June 30, 2015
	U.S. GAAP Basis			Adjustments				Non-GAAP Adjusted Basis			U.S. GAAP Basis			Adjustments				Non-GAAP Adjusted Basis
Net Revenues:
Investment Management Revenue	$	24,505		$	1,195		(1)(2)	$	25,700		$	46,586		$	2,334		(1)(2)	$	48,920
Other Revenue, net		(786	)		959		(3)		173			(1,464	)		1,912		(3)		448

Net Revenues		23,719			2,154				25,873			45,122			4,246				49,368

Expenses:
Employee Compensation and Benefits		13,467			—				13,467			27,953			—				27,953
Non-compensation Costs		6,445			(93	)	(7)		6,352			11,997			(180	)	(7)		11,817
Special Charges		—			—				—			3,348			(3,348	)	(6)		—

Total Expenses		19,912			(93	)			19,819			43,298			(3,528	)			39,770

Operating Income (a)	$	3,807		$	2,247			$	6,054		$	1,824		$	7,774			$	9,598

Compensation Ratio (b)		56.8	%						52.1	%		61.9	%						56.6	%
Operating Margin (b)		16.1	%						23.4	%		4.0	%						19.4	%

(a)	Operating Income for U.S. GAAP excludes Income (Loss) from Equity Method Investments.

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

A - 9

EVERCORE PARTNERS INC.

U.S. GAAP SEGMENT RECONCILIATION TO CONSOLIDATED RESULTS

(dollars in thousands)

(UNAUDITED)


	U.S. GAAP
	Three Months Ended								Six Months Ended
	June 30, 2016		March 31, 2016			June 30, 2015			June 30, 2016			June 30, 2015
Investment Banking
Net Revenues:
Investment Banking Revenue	$	327,174	$	240,626		$	246,550		$	567,800		$	464,188
Other Revenue, net		983		(913	)		(2,173	)		70			(3,231	)

Net Revenues		328,157		239,713			244,377			567,870			460,957

Expenses:
Employee Compensation and Benefits		208,916		169,718			159,677			378,634			308,317
Non-compensation Costs		61,404		57,574			57,535			118,978			110,204
Special Charges		—		—			(139	)		—			2,151

Total Expenses		270,320		227,292			217,073			497,612			420,672

Operating Income (a)	$	57,837	$	12,421		$	27,304		$	70,258		$	40,285

Investment Management
Net Revenues:
Investment Management Revenue	$	22,255	$	18,429		$	24,505		$	40,684		$	46,586
Other Revenue, net		244		(429	)		(786	)		(185	)		(1,464	)

Net Revenues		22,499		18,000			23,719			40,499			45,122

Expenses:
Employee Compensation and Benefits		12,418		10,197			13,467			22,615			27,953
Non-compensation Costs		5,313		4,099			6,445			9,412			11,997
Special Charges		—		—			—			—			3,348

Total Expenses		17,731		14,296			19,912			32,027			43,298

Operating Income (a)	$	4,768	$	3,704		$	3,807		$	8,472		$	1,824

Total
Net Revenues:
Investment Banking Revenue	$	327,174	$	240,626		$	246,550		$	567,800		$	464,188
Investment Management Revenue		22,255		18,429			24,505			40,684			46,586
Other Revenue, net		1,227		(1,342	)		(2,959	)		(115	)		(4,695	)

Net Revenues		350,656		257,713			268,096			608,369			506,079

Expenses:
Employee Compensation and Benefits		221,334		179,915			173,144			401,249			336,270
Non-compensation Costs		66,717		61,673			63,980			128,390			122,201
Special Charges		—		—			(139	)		—			5,499

Total Expenses		288,051		241,588			236,985			529,639			463,970

Operating Income (a)	$	62,605	$	16,125		$	31,111		$	78,730		$	42,109

(a)	Operating Income excludes Income (Loss) from Equity Method Investments.

A - 10

Notes to Unaudited Condensed Consolidated Adjusted Financial Data

For further information on these adjustments, see page A-2.

(1)	Client related expenses and provisions for uncollected receivables have been reclassified as a reduction of Revenue in the Adjusted presentation.

(2)	Income (Loss) from Equity Method Investments has been reclassified to Revenue in the Adjusted presentation.

(3)	Interest Expense on Debt is excluded from the Adjusted Investment Banking and Investment Management segment results and is included in Interest Expense in the segment results on a U.S. GAAP Basis.

(4)	Expenses incurred from the assumed vesting of Class E LP Units and Class G and H LP Interests issued in conjunction with the acquisition of ISI are excluded from the Adjusted presentation.

(5)	Expenses for deferred consideration issued to the sellers of certain of the Company’s acquisitions are excluded from the Adjusted presentation.

(6)	Expenses during 2015 primarily related to separation benefits and costs associated with the termination of certain contracts within the Company’s Evercore ISI business, and the finalization of a matter associated with the wind-down of the Company’s U.S. Private Equity business.

A - 11

(7)	Non-compensation Costs on an Adjusted basis reflect the following adjustments:


	Three Months Ended June 30, 2016
	U.S. GAAP			Adjustments				Adjusted
Occupancy and Equipment Rental	$	10,582		$	—			$	10,582
Professional Fees		13,751			(2,988	)	(1)		10,763
Travel and Related Expenses		15,989			(3,234	)	(1)		12,755
Communications and Information Services		9,786			(22	)	(1)		9,764
Depreciation and Amortization		6,626			(2,845	)	(7a)		3,781
Acquisition and Transition Costs		(329	)		329		(7b)		—
Other Operating Expenses		10,312			(1,261	)	(1)(7c)		9,051

Total Non-compensation Costs	$	66,717		$	(10,021	)		$	56,696


	Three Months Ended March 31, 2016
	U.S. GAAP			Adjustments				Adjusted
Occupancy and Equipment Rental	$	10,774		$	—			$	10,774
Professional Fees		10,702			(1,382	)	(1)		9,320
Travel and Related Expenses		13,829			(2,384	)	(1)		11,445
Communications and Information Services		10,003			(17	)	(1)		9,986
Depreciation and Amortization		6,382			(3,245	)	(7a)		3,137
Other Operating Expenses		9,983			(268	)	(1)(7c)		9,715

Total Non-compensation Costs	$	61,673		$	(7,296	)		$	54,377


	Three Months Ended June 30, 2015
	U.S. GAAP			Adjustments				Adjusted
Occupancy and Equipment Rental	$	11,684		$	—			$	11,684
Professional Fees		13,164			(1,884	)	(1)		11,280
Travel and Related Expenses		13,400			(2,348	)	(1)		11,052
Communications and Information Services		9,738			(14	)	(1)		9,724
Depreciation and Amortization		6,313			(2,972	)	(7a)		3,341
Acquisition and Transition Costs		917			(917	)	(7b)		—
Other Operating Expenses		8,764			(100	)	(1)		8,664

Total Non-compensation Costs	$	63,980		$	(8,235	)		$	55,745


	Six Months Ended June 30, 2016
	U.S. GAAP			Adjustments				Adjusted
Occupancy and Equipment Rental	$	21,356		$	—			$	21,356
Professional Fees		24,453			(4,370	)	(1)		20,083
Travel and Related Expenses		29,818			(5,618	)	(1)		24,200
Communications and Information Services		19,789			(39	)	(1)		19,750
Depreciation and Amortization		13,008			(6,090	)	(7a)		6,918
Acquisition and Transition Costs		(329	)		329		(7b)		—
Other Operating Expenses		20,295			(1,529	)	(1)(7c)		18,766

Total Non-compensation Costs	$	128,390		$	(17,317	)		$	111,073


	Six Months Ended June 30, 2015
	U.S. GAAP			Adjustments				Adjusted
Occupancy and Equipment Rental	$	23,914		$	—			$	23,914
Professional Fees		22,597			(2,583	)	(1)		20,014
Travel and Related Expenses		26,570			(5,188	)	(1)		21,382
Communications and Information Services		18,300			(24	)	(1)		18,276
Depreciation and Amortization		12,714			(5,980	)	(7a)		6,734
Acquisition and Transition Costs		1,401			(1,401	)	(7b)		—
Other Operating Expenses		16,705			(185	)	(1)		16,520

Total Non-compensation Costs	$	122,201		$	(15,361	)		$	106,840

A - 12

(7a)	The exclusion from the Adjusted presentation of expenses associated with amortization of intangible assets and other purchase accounting-related amortization from the acquisitions of ISI, SFS and certain other acquisitions.

(7b)	Primarily professional fees incurred, as well as the reversal of a provision for certain settlements in 2016 and costs related to transitioning acquisitions or divestitures.

(7c)	The expense associated with changes in the fair value of contingent consideration issued to the sellers of certain of the Company’s acquisitions is excluded from the Adjusted results.

(8)

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 Evercore’s effective tax rate assuming 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. In addition, the Adjusted presentation can reflect the netting of changes in the Company’s Tax Receivable Agreement against Income Tax Expense.

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

(10a)

Assumes the vesting, and exchange into Class A shares, of certain Evercore LP partnership units and interests and IPO related restricted stock unit awards in the Adjusted presentation. In the computation of outstanding common stock equivalents for U.S. GAAP net income per share, the Evercore LP partnership units are anti-dilutive.

(10b)

Assumes the vesting of all Acquisition Related Share Issuances and Unvested Restricted Stock Units granted to Lexicon employees in the Adjusted presentation. 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.

(11)

Assumes the restructuring of Atalanta Sosnoff had occurred as of the beginning of the prior period presented and reflects adjustments to eliminate the revenue and expenses that were previously consolidated from Atalanta Sosnoff and the addition of income from Atalanta Sosnoff if its results had been reflected on the equity method of accounting. Management believes this adjustment is useful to investors to compare Evercore’s results across periods.

A - 13