Evercore Reports First Quarter 2016 Results; Quarterly Dividend Of $0.31 Per Share

NEW YORK, April 27, 2016 /PRNewswire/ --

Highlights

• First Quarter Financial Summary
  • U.S. GAAP Net Revenues of $257.7 million, up 8% compared to Q1 2015
  • U.S. GAAP Net Income Attributable to Evercore Partners Inc. of $5.3 million, up 24% compared to Q1 2015, or $0.12 per share, up 20% compared to Q1 2015
  • Record First Quarter Adjusted Pro Forma Net Revenues of $257.2 million, up 8% compared to Q1 2015; 11% after adjusting for the deconsolidation of an Investment Management affiliate
  • Record First Quarter Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. of $32.8 million, up 10% compared to Q1 2015, or $0.63 per share, up 13% compared to Q1 2015
• Investment Banking
  • Advising clients on significant transactions globally, including:
    • Abbott Laboratories on its $8.4 billion acquisition of Alere Inc.
    • ArcelorMittal, the world's largest steel producer, on the sale of three steel facilities in the U.S.
    • Nuance Communications Inc. on its repurchase of common stock from Carl Icahn and certain of his affiliates
    • EFH on the largest ongoing U.S. bankruptcy
  • Hired three Advisory SMDs - Bill Anderson to lead our activist and strategic shareholder advisory practice, Jim Renwick to lead our European ECM advisory practice and Dan Ward to be a senior banker in our Energy practice
  • Hired Tom Gallagher, an Institutional Investor #2 ranked Insurance analyst, to broaden our equity research capabilities
• Investment Management
  • Assets Under Management in consolidated businesses were $8.5 billion
• Issued $170.0 million of fixed rate senior notes during the quarter through a private placement, using a portion of the proceeds to repay the outstanding variable rate senior notes with Mizuho
• The Board refreshed the share buyback program, which now has a maximum of $450 million (7.5 million shares) authorized for repurchase
• Returned $123.1 million of capital to shareholders during the quarter through dividends and repurchases, including repurchases of 2.3 million shares at an average price of $46.61. Quarterly dividend of $0.31 per share

Evercore Partners Inc. (NYSE: EVR) today announced that its U.S. GAAP Net Revenues were $257.7 million for the quarter ended March 31, 2016, an increase of 8% compared to $238.0 million for the quarter ended March 31, 2015. U.S. GAAP Net Income Attributable to Evercore Partners Inc. for the first quarter was $5.3 million, or $0.12 per share, compared to $4.3 million, or $0.10 per share, a year ago.

Adjusted Pro Forma Net Revenues were $257.2 million for the quarter ended March 31, 2016, an increase of 8% compared to $238.2 million for the quarter ended March 31, 2015. Assuming the restructuring of Atalanta Sosnoff had occurred on December 31, 2014, Adjusted Pro Forma Net Revenues would have increased 11% compared to the first quarter of 2015. Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. was $32.8 million for the first quarter, up 10% compared to $29.7 million a year ago. Adjusted Pro Forma earnings per share was $0.63 for the quarter, up 13% in comparison to the prior year period.

The U.S. GAAP trailing twelve-month compensation ratio of 64.8% compares to 61.8% for the same period in 2015. The U.S. GAAP compensation ratio for the three months ended March 31, 2016 was 69.8%, compared to 68.5% for the quarter ended March 31, 2015. The Adjusted Pro Forma compensation ratio for the trailing twelve months was 57.8%, compared to 58.6% for the same period in 2015. The Adjusted Pro Forma compensation ratio for the current quarter was 57.6%, compared to 57.4% for the quarter ended March 31, 2015. 

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's record first quarter results mark a strong start to 2016, with revenues and earnings up 11% and 10%, respectively, over last year on a comparable basis. We continue to benefit from a unique environment in which our restructuring activity is robust in energy and commodities sensitive sectors, while at the same time, our M&A pipeline remains strong in healthcare; technology, media and telecommunications; financial services and other sectors.  While equity markets were challenging for ECM activity in the quarter, market volatility and strong client service helped Evercore ISI grow secondary revenues 8% year over year," said Ralph Schlosstein, President and Chief Executive Officer. "In the first quarter we returned $123.1 million of capital to shareholders through dividends and repurchases, substantially offsetting the dilution of shares granted related to 2015 annual bonuses." 

"We remain focused on adding talent and expanding our capabilities, and have done so this quarter with the addition of four new Senior Managing Directors in Investment Banking. Bill Anderson joined us from Goldman Sachs, bringing his expertise in activism, shareholder defense and strategic shareholder matters; Jim Renwick now leads our new ECM advisory team in Europe; Dan Ward joins us from Deutsche Bank to be a senior banker in our energy advisory practice; and Tom Gallagher, an Institutional Investor #2 ranked Insurance analyst, broadens our equity research capabilities. We will continue to assure we have the best resources in the market to address clients' needs by recruiting or promoting talented individuals, expanding and deepening our advisory capabilities and broadening and deepening our research coverage," said Roger C. Altman, Executive Chairman.

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

Throughout the discussion of Evercore's business segments, information is presented on an Adjusted Pro Forma basis, which is an unaudited non-generally accepted accounting principles ("non-GAAP") measure. Adjusted Pro Forma results begin with information prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), and then those results are adjusted to exclude certain items and reflect the conversion of vested and unvested Evercore LP Units and Interests 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-12 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

Investment Banking

For the first quarter, Evercore's Investment Banking segment reported Net Revenues of $237.0 million, which represents an increase of 10% year-over-year. Operating Income of $48.7 million increased 4% from the first quarter of last year. Operating Margins were 20.5% in comparison to 21.9% for the first quarter of last year.

Revenues

During the quarter, Investment Banking earned advisory fees from 173 client transactions (vs. 151 in Q1 2015) and fees in excess of $1 million from 41 client transactions (vs. 35 in Q1 2015).

During the first quarter of 2016, Commissions and Related Fees of $57.2 million increased 8% from last year. Underwriting Fees of $3.3 million for the three months ended March 31, 2016 decreased 43% versus the prior year.

Evercore ISI, our U.S. equities business, reported Net Revenues of $58.3 million, including allocated U.S. underwriting revenues of $1.2 million for the three months ended March 31, 2016. Operating Margins in the first quarter were 19.7%, compared to 15.2% in the first quarter 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 three months ended March 31, 2016 were consistent with those assumed at the time of the closing of the transactions.

Expenses

Compensation costs were $138.0 million for the first quarter, an increase of 13% year-over-year. The trailing twelve-month compensation ratio was 58.4%, down from 58.9% a year ago. Evercore's Investment Banking compensation ratio was 58.2% for the first quarter, up versus the compensation ratio reported for the three months ended March 31, 2015 of 56.9%.

Non-compensation costs for the current quarter were $50.4 million, up 10% 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, increased new business costs associated with higher levels of global transaction activity and higher professional fees. The ratio of non-compensation costs to net revenue for the current quarter was 21.3%, flat compared the same quarter last year.

Investment Management

For the first quarter, Investment Management reported Net Revenues and Operating Income of $20.2 million and $6.0 million, respectively, and an Operating Margin of 29.8%.  

As of March 31, 2016, Investment Management reported $8.5 billion of AUM, an increase of 4% from December 31, 2015.

Revenues

Investment Management Revenue

Investment Advisory and Management Fees of $15.8 million for the quarter ended March 31, 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.

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 12% when compared to the first quarter of 2015.

Realized and Unrealized Gains of $2.6 million in the quarter increased relative to the prior year, with the change relative to the prior period driven principally by higher gains in Private Equity, partially offset by lower gains in Institutional Asset Management.

Equity in Earnings of Affiliates of $1.6 million in the quarter increased relative to the prior year principally as a result of the inclusion of Atalanta Sosnoff's income in the first quarter of 2016, as well as higher income earned in the first quarter of 2016 by ABS and G5 ǀ Evercore.

Expenses

Investment Management's first quarter expenses were $14.2 million, down 29% compared to the first quarter of 2015. Assuming the restructuring of Atalanta Sosnoff had occurred on December 31, 2014, Investment Management expenses would have decreased 3% when compared to the first quarter of 2015.

Other U.S. GAAP Adjustments

Evercore's Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. for the three months ended March 31, 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-related charges for 2016 also include adjustments for contingent consideration related to certain acquisitions.

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

Evercore's Adjusted Pro Forma Diluted Shares Outstanding for the three months ended March 31, 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 certain acquisition-related shares, 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 months ended March 31, 2015 and the three months ended December 31, 2015, are included in Annex I, pages A-2 to A-12. 

Non-controlling Interests

Non-controlling Interests in certain operating subsidiaries are owned by the principals and strategic investors in these businesses. Evercore's equity ownership percentages in these operating businesses range from 61% to 62%. For the periods ended March 31, 2016, December 31, 2015 and March 31, 2015 the gain (loss) allocated to non-controlling interests was as follows:

On January 29, 2016, we purchased at fair value the remaining 28% of Evercore Casa de Bolsa we did not already own for $6.5 million.

Income Taxes

For the three months ended March 31, 2016, Evercore's Adjusted Pro Forma effective tax rate was 37.5%, compared to 37.3% for the three months ended March 31, 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. 

For the three months ended March 31, 2016, Evercore's U.S. GAAP effective tax rate was approximately 55.9%, compared to 51.3% for the three months ended March 31, 2015. The effective tax rate for U.S. GAAP purposes for 2016 reflects significant adjustments relating to the tax treatment of compensation associated with Evercore LP Units/Interests, state, local and foreign taxes, and other adjustments.

Balance Sheet

The Company continues to maintain a strong balance sheet, holding cash, cash equivalents and marketable securities of $338.4 million at March 31, 2016. Current assets exceed current liabilities by $329.1 million at March 31, 2016. Amounts due related to the Long-Term Notes Payable and Subordinated Borrowings were $190.5 million at March 31, 2016.

Capital Transactions

On April 25, 2016, the Board of Directors of Evercore declared a quarterly dividend of $0.31 per share to be paid on June 10, 2016 to common stockholders of record on May 27, 2016.

During the three months ended March 31, 2016 the Company repurchased approximately 2.3 million shares at an average cost per share of $46.61.

Conference Call

Evercore will host a related conference call beginning at 8:00 a.m. Eastern Time, Wednesday, April 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: 94978789.  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: 94978789.  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

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, 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

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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, 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 Pro Forma measures and any adjustments thereto, when presented in conjunction with comparable U.S. GAAP measures, are useful to investors to compare Evercore's results across several periods and facilitate an understanding of Evercore's operating results. The Company uses these measures to evaluate its operating performance, as well as the performance of individual employees. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. These Adjusted Pro Forma amounts are allocated to the Company's two business segments: Investment Banking and Investment Management. The differences between Adjusted Pro Forma and U.S. GAAP results are as follows:

1.  Assumed Vesting of Evercore LP Units and Exchange into Class A Shares.  The Company incurred expenses, 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 Pro Forma 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 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 equity interests, and thus the Adjusted Pro Forma 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.

2.   Adjustments Associated with Business Combinations.  The following charges resulting from business combinations have been excluded from Adjusted Pro Forma results because the Company's Management believes that operating performance is more comparable across periods excluding the effects of these acquisition-related charges:

a. Amortization of Intangible Assets 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.

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

c.  Acquisition and Transition Costs.  Primarily professional fees incurred and costs related to transitioning ISI's infrastructure, including certain regulatory settlements, in 2015.

d.  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 Adjusted Pro Forma results.

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

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4.   Special Charges.  Expenses during the first quarter of 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. Expenses during the fourth quarter of 2015 include a charge related to the finalization of the impairment of goodwill in the Institutional Asset Management reporting unit and charges related to the restructuring of our investment in Atalanta Sosnoff, primarily related to the conversion of certain of Atalanta Sosnoff's profits interests held by management to equity interests.

5.   Income Taxes.  Evercore is organized as a series of Limited Liability Companies, Partnerships, a C-Corporation and a Public Corporation and therefore, not all of the Company's income is subject to corporate-level taxes. As a result, adjustments have been made to the Adjusted Pro Forma earnings to assume that the Company has adopted a conventional corporate tax structure and is taxed as a C-Corporation in the U.S. at the prevailing corporate rates, that all deferred tax assets relating to foreign operations are fully realizable within the structure on a consolidated basis and that adjustments for deferred tax assets related to the ultimate tax deductions for equity-based compensation awards are made directly to stockholders' equity. This assumption is consistent with the assumption that 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 Pro Forma presentation reflects the netting of changes in the Company's Tax Receivable Agreement against Income Tax Expense.

6.      Presentation of Interest Expense.  The Adjusted Pro Forma results present interest expense on short-term repurchase agreements, within the Investment Management segment, in Other Revenues, net, as the Company's Management believes it is more meaningful to present the spread on net interest resulting from the matched financial assets and liabilities. In addition, Adjusted Pro Forma Investment Banking and Investment Management Operating Income is presented before interest expense on debt, which is included in interest expense on a U.S. GAAP basis. 

7.      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.

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Notes to Unaudited Condensed Consolidated Adjusted Pro Forma Financial Data

For further information on these Adjusted Pro Forma 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 Pro Forma presentation.

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

(3)   Interest Expense on 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)   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 Pro Forma presentation.

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

(6)   Expenses during the first quarter of 2015 primarily related to charges of $2.2 million related to separation benefits and costs associated with the termination of certain contracts within the Company's Evercore ISI business, as well as $3.3 million related to the finalization of a matter associated with the wind-down of the Company's U.S. Private Equity business. Expenses during the fourth quarter of 2015 include a $0.5 million charge related to the finalization of the impairment of goodwill in the Institutional Asset Management reporting unit and charges of $7.1 million related to the restructuring of our investment in Atalanta Sosnoff, primarily related to the conversion of certain of Atalanta Sosnoff's profits interests held by management to equity interests.

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

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(7a)  The exclusion from the Adjusted Pro Forma 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 and costs related to transitioning ISI's infrastructure, including certain regulatory settlements, in 2015.

(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 Adjusted Pro Forma 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 Pro Forma presentation reflects 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 Pro Forma 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 Pro Forma 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.

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(10b)   Assumes the vesting of all Acquisition Related Share Issuances and Unvested Restricted Stock Units granted to Lexicon employees in the Adjusted Pro Forma 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)  This adjustment 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.

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