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Press release from Business Wire

Evercore Partners Reports Higher Third Quarter 2010 Results; Increases Quarterly Dividend to $0.18 Per Share

Thursday, October 28, 2010

Evercore Partners Reports Higher Third Quarter 2010 Results; Increases Quarterly Dividend to $0.18 Per Share06:00 EDT Thursday, October 28, 2010 NEW YORK (Business Wire) -- Evercore Partners Inc. (NYSE: EVR) HighlightsThird Quarter Financial SummaryNet Revenues of $124 million, up 48% compared to the same period in 2009 and 91% from Q2 2010Adjusted Pro Forma Net Income of $14.6 million, or $0.38 per share, up 33% compared to the same period in 2009 and 626% from Q2 2010U.S. GAAP Net Income of $3.5 million in contrast to Net Income of $2.6 million in the same period last yearYear-to-Date Financial SummaryAdjusted Pro Forma Net Revenues of $274 million, up 33% compared to the same period in 2009Adjusted Pro Forma Net Income of $27.0 million, or $0.68 per share, up 65% compared to the first nine months of 2009U.S. GAAP Net Revenues of $276 million, up 35% compared to the same period in 2009U.S. GAAP Net Income of $5.7 million or $0.25 per share up significantly from a Net Loss of ($3.2) million or ($0.22) per share in the same period last yearRecord quarterly revenues in both Investment Banking and Investment ManagementInvestment BankingCompleted $8.6 billion acquisition by Frontier Communications of access lines from VerizonAdvising sanofi-aventis on its $18.8 billion offer for Genzyme and advising Danaos on its restructuringInvestment ManagementAssets Under Management increased 9% to $16.6 billionStrengthened geographic capability with the acquisition of a 50% interest in G5 advisors, a boutique investment banking firm in BrazilIncreases quarterly dividend to $0.18 per shareAuthorizes two million share repurchase program Evercore Partners Inc. (NYSE: EVR) today announced that its Adjusted Pro Forma Net Revenues were $123.7 million for the three months ended September 30, 2010, compared to Adjusted Pro Forma Net Revenues of $83.4 million and $64.8 million for the three months ended September 30, 2009 and June 30, 2010, respectively. Adjusted Pro Forma Net Revenues were $273.6 million for the nine months ended September 30, 2010, compared to $205.3 million for the nine months ended September 30, 2009. Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. was $14.6 million, or $0.38 per share, for the three months ended September 30, 2010, compared to an Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. of $11.0 million, or $0.29 per share for the three months ended September 30, 2009 and $2.0 million, or $0.05 per share for the three months ended June 30, 2010. Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. was $27.0 million, or $0.68 per share, for the nine months ended September 30, 2010, compared to an Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. of $16.3 million, or $0.45 per share for the nine months ended September 30, 2009. U.S. GAAP Net Revenues were $123.6 million for the three months ended September 30, 2010, compared to U.S. GAAP Net Revenues of $83.2 million and $64.8 million for the three months ended September 30, 2009 and June 30, 2010, respectively. U.S. GAAP Net Revenues were $276.3 million for the nine months ended September 30, 2010, compared to U.S. GAAP Net Revenues of $204.0 million for the nine months ended September 30, 2009. U.S. GAAP Net Income Attributable to Evercore Partners Inc. was $3.5 million, or $0.17 per share, for the three months ended September 30, 2010, compared to U.S. GAAP Net Income Attributable to Evercore Partners Inc. of $2.6 million, or $0.14 per share, for the three months ended September 30, 2009 and $0.1 million, or $0.00 per share for the three months ended June 30, 2010. U.S. GAAP Net Income Attributable to Evercore Partners Inc. was $5.7 million, or $0.25 per share, for the nine months ended September 30, 2010, compared to a U.S. GAAP Net Loss Attributable to Evercore Partners Inc. of ($3.2) million, or ($0.22) per share, for the nine months ended September 30, 2009. The Adjusted Pro Forma compensation ratio for the three months ended September 30, 2010 was 62%, compared to 61% for the same period in 2009 and 63% for the three months ended June 30, 2010. The Adjusted Pro Forma Q3 2010 compensation ratio on a trailing twelve month basis of 60% was consistent with Q2 2010 of 60% and improved from Q3 2009 of 72%. The U.S. GAAP compensation ratio for the three months ended September 30, 2010, September 30, 2009 and June 30, 2010 was 67%, 66% and 71%, respectively. The U.S. GAAP Q3 2010 compensation ratio on a trailing twelve month basis of 65% was consistent with Q2 2010 of 65% and improved from Q3 2009 of 75%. Evercore's quarterly results may fluctuate significantly due to the timing and amount of transaction and performance fees earned, as well as other factors. Accordingly, financial results in any particular quarter may not be representative of future results over a longer period of time. “Evercore is seizing the opportunity to build a high quality independent investment banking and investment management advisory firm. Record revenues in both Investment Banking and Investment Management highlight the steady progress we continue to make in building our business. Our investments in future growth are on track, including the Institutional Equities business which continues to add new clients and build momentum. We continue to explore additional opportunities to invest in high quality investment managers and to expand our geographic capabilities,” said Ralph Schlosstein, President and Chief Executive Officer. “Despite these investments, we remain highly focused on translating top line growth into bottom line performance and on delivering those returns to our shareholders through the 20% increase in our dividend and a new share repurchase authorization.” “Our core Advisory business is performing strongly. We are adding clients and assignments at a good pace. And we are consistently expanding our sector coverage and geographic reach,” said Roger Altman, Executive Chairman. “In that regard, we are very pleased with our recent acquisition of a 50% interest in G5 advisors, a Brazilian boutique advisory and investment management firm, led by Corrado Varoli, the former Partner and Head of Latin America for Goldman Sachs.” Consolidated U.S. GAAP and Adjusted Pro Forma Selected Financial Data     U.S. GAAPThree Months Ended   % Change vs.   Nine Months EndedSeptember 30, 2010   June 30, 2010   September 30, 2009June 30, 2010   September 30, 2009September 30, 2010   September 30, 2009   % Change (dollars in thousands) Net Revenues $ 123,587 $ 64,840 $ 83,196 91 % 49 % $ 276,268 $ 203,965   35 % Operating Income (Loss) $ 17,565 $ (3,251 ) $ 12,286 NM 43 % $ 24,942 $ 804 NM Net Income (Loss) Attributable to Evercore Partners Inc. $ 3,530 $ 117 $ 2,633 NM 34 % $ 5,667 $ (3,219 ) NM Diluted Earnings (Loss) Per Share $ 0.17 $ - $ 0.14 NM 21 % $ 0.25 $ (0.22 ) NM Compensation Ratio 67 % 71 % 66 % 67 % 70 % Operating Margin 14 % (5 %) 15 % 9 % 0 %     Adjusted Pro FormaThree Months Ended% Change vs.Nine Months EndedSeptember 30, 2010June 30, 2010September 30, 2009June 30, 2010September 30, 2009September 30, 2010September 30, 2009   % Change (dollars in thousands) Net Revenues $ 123,706 $ 64,769 $ 83,382 91 % 48 % $ 273,578 $ 205,300 33 % Operating Income $ 25,036 $ 4,249 $ 19,176 489 % 31 % $ 48,137 $ 29,358 64 % Net Income Attributable to Evercore Partners Inc. $ 14,648 $ 2,018 $ 10,992 626 % 33 % $ 27,039 $ 16,347 65 % Diluted Earnings Per Share $ 0.38 $ 0.05 $ 0.29 660 % 31 % $ 0.68 $ 0.45 51 % Compensation Ratio 62 % 63 % 61 % 61 % 67 % Operating Margin 20 % 7 % 23 % 18 % 14 % Throughout the discussion of Evercore's business segments, information is presented on an Adjusted Pro Forma basis, which is a non-generally accepted accounting principles (“non-GAAP”) measure and is unaudited. Adjusted Pro Forma results begin with information prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) adjusted to exclude certain items and reflect the conversion of vested and unvested Evercore LP Units into Class A shares. Evercore believes that the disclosed Adjusted Pro Forma measures and any adjustments thereto, when presented in conjunction with comparable U.S. GAAP measures, are useful to investors to compare Evercore's results across several periods and facilitate an understanding of Evercore's operating results. Evercore uses these measures to evaluate its operating performance, as well as the performance of individual employees. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP.For more information about the Adjusted Pro Forma basis of reporting used by management to evaluate the performance of Evercore and each line of business, including reconciliations of U.S. GAAP results to an Adjusted Pro Forma basis, see pages A-2 through A-10 included in Annex I.These Adjusted Pro Forma amounts are allocated to the Company's two business segments: Investment Banking and Investment Management. Business Line Reporting A discussion of Adjusted Pro Forma revenues and expenses is presented below for the Investment Banking and Investment Management segments. Unless otherwise stated, all of the financial measures presented in this discussion are Adjusted Pro Forma measures. For a reconciliation of the Adjusted Pro Forma segment data to U.S. GAAP results, see pages A-2 to A-10 in Annex I. Investment Banking Evercore's Investment Banking business reported record revenues this quarter, up 119% from Q2 2010 and 39% from Q3 2009 reflecting fees from clients across multiple industries and geographies. Operating Income of $25.8 million increased 503% and 13% when compared to Q2 2010 and Q3 2009, respectively. The Operating Margin for the quarter was 26% reflecting strong Advisory results, offset by our investments in Institutional Equities and the Private Funds Group. The segment reported Operating Income of $20.2 million on a U.S. GAAP basis for the quarter.   Adjusted Pro FormaThree Months Ended   Nine Months EndedSeptember 30, 2010   June 30, 2010   September 30, 2009September 30, 2010   September 30, 2009 (dollars in thousands) Net Revenues: Investment Banking $ 99,563 $ 45,511 $ 71,596 $ 216,348 $ 188,084 Other Revenue, net   435     1,562     1,208     3,625     1,739   Net Revenues   99,998     47,073     72,804     219,973     189,823     Expenses: Employee Compensation and Benefits 60,847 29,360 41,119 130,772 110,013 Non-compensation Costs   13,315     13,430     8,812     37,427     24,571   Total Expenses   74,162     42,790     49,931     168,199     134,584     Operating Income $ 25,836   $ 4,283   $ 22,873   $ 51,774   $ 55,239     Compensation Ratio 61 % 62 % 56 % 59 % 58 % Operating Margin 26 % 9 % 31 % 24 % 29 %     U.S. GAAPThree Months EndedNine Months EndedSeptember 30, 2010June 30, 2010September 30, 2009September 30, 2010September 30, 2009 (dollars in thousands) Net Revenues: Investment Banking $ 101,367 $ 47,505 $ 73,306 $ 224,794 $ 192,431 Other Revenue, net   (607 )   520     184     506     32   Net Revenues   100,760     48,025     73,490     225,300     192,463     Expenses: Employee Compensation and Benefits 64,948 33,550 44,904 143,922 113,798 Non-compensation Costs 15,588 15,893 10,990 47,280 30,324 Special Charges   -     -     -     -     3,951   Total Expenses   80,536     49,443     55,894     191,202     148,073     Operating Income (Loss) $ 20,224   $ (1,418 ) $ 17,596   $ 34,098   $ 44,390     Compensation Ratio 64 % 70 % 61 % 64 % 59 % Operating Margin 20 % (3 %) 24 % 15 % 23 % Revenues Investment Banking reported third quarter 2010 Adjusted Pro Forma net revenues of $100.0 million, an increase of 37% from the prior year and 112% from Q2 2010. The Company earned advisory fees in excess of $1 million from 15 clients during the third quarter of 2010, and completed one underwriting assignment. During the quarter we provided advice on major M&A transactions including sanofi-aventis' offer to acquire Genzyme, Intel's acquisition of Infineon's Wireless Solutions business, Pace plc's acquisition of 2Wire, Cavalier Telephone's sale to PAETEC Holdings and Movetis NV's sale to Shire plc, among others. The number of fee-paying clients for the first nine months of 2010 increased to 143 compared to 126 last year. Expenses Q3 2010 Adjusted Pro Forma expenses increased from Q2 2010 driven by the significant increase in Investment Banking revenues and the continued investments in new businesses. Compensation costs for the Investment Banking segment on an Adjusted Pro Forma basis for the three months ended September 30, 2010 were $60.8 million, an increase of 48% from the prior year and 107% from Q2 2010. For the three months ended September 30, 2010, Evercore's Investment Banking Adjusted Pro Forma compensation ratio was 61%, versus the compensation ratio reported for the three months ended September 30, 2009 of 56% and 62% for the three months ended June 30, 2010. The Adjusted Pro Forma compensation ratio on a trailing twelve month basis was 58% this quarter, up from 56% in Q2 2010. The U.S. GAAP compensation ratio on a trailing twelve month basis was 62% this quarter, up from 61% in Q2 2010. Non-compensation costs on an Adjusted Pro Forma basis for the three months ended September 30, 2010 of $13.3 million increased 51% from the same period last year and was essentially unchanged in comparison to last quarter. New Business The Institutional Equities business is now composed of 41 professionals including 12 senior research analysts and 11 sales and sales trading professionals. The Research team now covers 84 companies across Technology, Media and Telecommunications and Financial Institutions and has begun to generate increased trading volumes in the fourth quarter, as our research coverage expands and as more institutions commence trading with us. For the three and nine months ended September 30, the business generated $0.7 million and $2.3 million in revenues and $6.6 million and $11.3 million in expenses, respectively. Investment Management The Investment Management segment reported substantial revenue growth for the third quarter reflecting the first full quarter of Atalanta Sosnoff and continued improvements in operating results for our early stage businesses. Atalanta Sosnoff's results comprised more than $11 million of revenues and $9 million of expenses (including $1.5 million of amortization of intangibles). Assets Under Management (AUM) for the segment increased to $16.6 billion on approximately $450 million of net inflows and approximately $930 million of market appreciation.   Adjusted Pro FormaThree Months Ended   Nine Months EndedSeptember 30, 2010   June 30, 2010   September 30, 2009September 30, 2010   September 30, 2009 Net Revenues: (dollars in thousands) Investment Management Revenues $ 23,412 $ 16,295 $ 9,785 $ 50,758 $ 12,511 Other Revenue, net   296     1,401     793     2,847     2,966   Net Revenues   23,708     17,696     10,578     53,605     15,477     Expenses: Employee Compensation and Benefits 16,456 11,409 9,574 37,291 28,393 Non-compensation Costs   8,052     6,321     4,701     19,951     12,965   Total Expenses   24,508     17,730     14,275     57,242     41,358     Operating Income (Loss) $ (800 ) $ (34 ) $ (3,697 ) $ (3,637 ) $ (25,881 )   Compensation Ratio 69 % 64 % 91 % 70 % 183 % Operating Margin (3 %) (0 %) (35 %) (7 %) (167 %)     U.S. GAAPThree Months EndedNine Months EndedSeptember 30, 2010June 30, 2010September 30, 2009September 30, 2010September 30, 2009 Net Revenues: (dollars in thousands) Investment Management Revenues $ 23,412 $ 16,295 $ 9,785 $ 50,758 $ 12,514 Other Revenue, net   (585 )   520     (79 )   210     (1,012 ) Net Revenues   22,827     16,815     9,706     50,968     11,502     Expenses: Employee Compensation and Benefits 17,319 12,212 10,200 39,828 29,019 Non-compensation Costs 8,167 6,436 4,816 20,296 13,882 Special Charges   -     -     -     -     12,187   Total Expenses   25,486     18,648     15,016     60,124     55,088     Operating Income (Loss) $ (2,659 ) $ (1,833 ) $ (5,310 ) $ (9,156 ) $ (43,586 )   Compensation Ratio 76 % 73 % 105 % 78 % 252 % Operating Margin (12 %) (11 %) (55 %) (18 %) (379 %) RevenuesInvestment Management Revenue Components   Adjusted Pro FormaThree Months Ended   Nine Months EndedSeptember 30, 2010   June 30, 2010   September 30, 2009September 30, 2010   September 30, 2009Management Fees (dollars in thousands) Wealth Management $ 2,573 $ 2,442 $ 1,144 $ 6,932 $ 2,221 Institutional Asset Management 17,035 9,719 5,851 33,473 10,167 Private Equity   2,301     2,202     2,970     6,481     7,119   Total Management Fees   21,909     14,363     9,965     46,886     19,507     Realized and Unrealized Gains (Losses) Institutional Asset Management 1,092 1,581 625 3,876 (57 ) Private Equity   542     481     (616 )   437     (5,107 ) Total Realized and Unrealized Gains (Losses)   1,634     2,062     9     4,313     (5,164 )   HighView - - - - (920 ) Equity in EAM Gains (Losses) - - - - (334 ) Equity in Pan Losses   (131 )   (130 )   (189 )   (441 )   (578 ) Investment Management Revenues $ 23,412   $ 16,295   $ 9,785   $ 50,758   $ 12,511   Fees earned from the management of client portfolios and other investment advisory services of $21.9 million increased significantly for the three months ended September 30, 2010 compared to the third quarter of 2009, reflecting a full quarter of Atalanta Sosnoff, the inclusion of fees associated with Trilantic and continued growth in AUM within Wealth Management and the other Institutional Asset Management businesses. Expenses The reported growth in expenses in the third quarter of 2010 was primarily attributable to Atalanta Sosnoff. Other U.S. GAAP Expenses Evercore's Adjusted Pro Forma Net Income Attributable to Evercore Partners Inc. for the three and nine months ended September 30, 2010 was higher than U.S. GAAP as a result of the exclusion of expenses associated with IPO equity awards and the amortization of intangibles principally related to Braveheart and Protego. In addition, for Adjusted Pro Forma purposes, reimbursable client-related expenses and expenses associated with revenue sharing engagements with third parties have been presented as a reduction from Revenues and Non-compensation costs. Further details of these expenses, as well as an explanation of similar expenses for the three and nine months ended September 30, 2009, are included in Annex I, pages A-2 to A-10. Noncontrolling Interests Noncontrolling Interests in certain subsidiaries are owned by the principals and strategic investors in these businesses. Evercore's equity ownership percentages in these businesses range from 51% to 86%. For the periods ended September 30, 2010 and 2009 and June 30, 2010 the gain (loss) allocated to noncontrolling interests was as follows:   Net Loss Allocated to Noncontrolling InterestsThree Months Ended   Nine Months EndedSegmentSeptember 30, 2010   June 30, 2010   September 30, 2009September 30, 2010   September 30, 2009 (dollars in thousands) Investment Banking (1) $ (1,282 ) $ (644 ) $ - $ (1,926 ) $ - Investment Management (1)   39     (194 )   (976 )   (532 )   (2,631 ) Total $ (1,243 ) $ (838 ) $ (976 ) $ (2,458 ) $ (2,631 )   (1) The difference between Adjusted Pro Forma and U.S. GAAP Noncontrolling Interests relates primarily to intangible amortization expense which is eliminated for ETC and EAM. Income Taxes For the three and nine months ended September 30, 2010, Evercore's Adjusted Pro Forma effective tax rate was approximately 42%. For the three and nine months ended September 30, 2010, Evercore's U.S. GAAP effective tax rate was approximately 49% and 46%, respectively, compared to 37% and 875% for the three and nine months ended September 30, 2009. The effective tax rate for U.S. GAAP purposes reflects significant adjustments relating to the tax treatment of certain compensation transactions, as well as the noncontrolling interest associated with Evercore LP Units. Balance Sheet The Company continues to maintain a strong balance sheet, holding cash, cash equivalents and marketable securities of $242.4 million at September 30, 2010. Current assets exceed current liabilities by $190.1 million at September 30, 2010. Amounts due related to the Long-Term Notes Payable were $97.7 million at September 30, 2010. During the quarter the Company completed its prior repurchase program and repurchased approximately 446,000 shares and share equivalents at an average cost of $24.58 per share. Share Repurchase Program Evercore also announced that its Board of Directors has authorized the repurchase of up to 2 million shares of Evercore Class A Common Stock and/or Evercore LP partnership units. Under this share repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of shares repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. This program may be suspended or discontinued at any time and does not have a specified expiration date. Dividend On October 26, 2010 the Board of Directors of Evercore declared a quarterly dividend of $0.18 per share to be paid on December 10, 2010 to common stockholders of record on November 26, 2010. Conference Call Evercore will host a conference call to discuss its results for the third quarter on Thursday, October 28, 2010, at 8:00 a.m. Eastern Time with access available via the Internet and telephone. Investors and analysts may participate in the live conference call by dialing (800) 561-2718 (toll-free domestic) or (617) 614-3525 (international); passcode: 38462999. Please register at least 10 minutes before the conference call begins. A replay of the call will be available for one week via telephone starting approximately one hour after the call ends. The replay can be accessed at (888) 286-8010 (toll-free domestic) or (617) 801-6888 (international); passcode: 49037915. A live webcast of the conference call will be available on the Investor Relations section of Evercore's Web site at www.evercore.com. The webcast will be archived on Evercore's Web site for 30 days after the call. About Evercore Partners Evercore Partners is a leading independent investment banking advisory firm. Evercore's Investment Banking business advises its clients on mergers, acquisitions, divestitures, restructurings, financings, public offerings, private placements and other strategic transactions and also provides institutional investors with high quality research, sales and trading execution that is free of the conflicts created by proprietary activities; Evercore's investment management business comprises wealth management, institutional asset management and private equity investing. Evercore serves a diverse set of clients around the world from its offices in New York, Boston, Houston, Los Angeles, San Francisco, Washington D.C., London, Mexico City and Monterrey, Mexico and Rio de Janeiro and São Paulo, Brazil. More information about Evercore can be found on the Company's Web site at www.evercore.com. Basis of Alternative Financial Statement Presentation Adjusted Pro Forma results are a non-GAAP measure. Evercore believes that the disclosed Adjusted Pro Forma measures and any adjustments thereto, when presented in conjunction with comparable U.S. GAAP measures, are useful to investors to compare Evercore's results across several periods and better reflect management's view of operating results. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation of U.S. GAAP results to Adjusted Pro Forma results is presented in the tables included in Annex I. Forward-Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect our current views with respect to, among other things, Evercore's operations and financial performance. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. All statements other than statements of historical fact included in this presentation are forward-looking statements and are based on various underlying assumptions and expectations and are subject to known and unknown risks, uncertainties and assumptions, and may include projections of our future financial performance based on our growth strategies and anticipated trends in Evercore's business. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Evercore believes these factors include, but are not limited to, those described under “Risk Factors” discussed in Evercore's Annual Report on Form 10-K for the year ended December 31, 2009 and subsequent quarterly reports on Form 10-Q. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release. In addition, new risks and uncertainties emerge from time to time, and it is not possible for Evercore to predict all risks and uncertainties, nor can Evercore assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Accordingly, you should not rely upon forward-looking statements as a prediction of actual results and Evercore does not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. Evercore undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. With respect to any securities offered by any private equity fund referenced herein, such securities have not been and will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. ANNEX I Schedule     Page Number Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2010 and 2009     A-1 Adjusted Pro Forma:       Adjusted Pro Forma Results     A-2 U.S. GAAP Reconciliation to Adjusted Pro Forma     A-4 Adjusted Pro Forma Segment Reconciliation to U.S. GAAP for the Three and Nine Months ended September 30, 2010     A-6 Adjusted Pro Forma Segment Reconciliation to U.S. GAAP for the Three Months ended June 30, 2010     A-7 Adjusted Pro Forma Segment Reconciliation to U.S. GAAP for the Three and Nine Months ended September 30, 2009     A-8 Notes to Unaudited Condensed Consolidated Adjusted Pro Forma Financial Data     A-9   EVERCORE PARTNERS INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSTHREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 (dollars in thousands, except per share data) (UNAUDITED)     Three Months Ended September 30,   Nine Months Ended September 30,2010   20092010   2009   REVENUES Investment Banking Revenue $ 101,367 $ 73,306 $ 224,794 $ 192,431 Investment Management Revenue 23,412 9,785 50,758 12,514 Other Revenue   4,661   4,603   18,106   18,218   TOTAL REVENUES 129,440 87,694 293,658 223,163 Interest Expense (1)   5,853   4,498   17,390   19,198   NET REVENUES   123,587   83,196   276,268   203,965     EXPENSES Employee Compensation and Benefits 82,267 55,104 183,750 142,817 Occupancy and Equipment Rental 5,129 3,434 13,087 10,072 Professional Fees 5,935 5,673 20,651 14,611 Travel and Related Expenses 4,441 2,445 11,790 6,500 Communications and Information Services 1,455 1,026 4,246 2,715 Depreciation and Amortization 3,379 1,155 6,677 3,353 Special Charges - - - 16,138 Acquisition and Transition Costs 385 - 3,121 712 Other Operating Expenses   3,031   2,073   8,004   6,243   TOTAL EXPENSES   106,022   70,910   251,326   203,161     INCOME BEFORE INCOME TAXES 17,565 12,286 24,942 804 Provision for Income Taxes   8,547   4,602   11,508   7,033   NET INCOME (LOSS) 9,018 7,684 13,434 (6,229 ) Net Income (Loss) Attributable to Noncontrolling Interest   5,488   5,051   7,767   (3,010 ) NET INCOME (LOSS) ATTRIBUTABLE TO EVERCORE PARTNERS INC. $ 3,530 $ 2,633 $ 5,667 $ (3,219 )   Net Income (Loss) Attributable to Evercore Partners Inc. Common Shareholders: $ 3,509 $ 2,633 $ 5,614 $ (3,219 )   Weighted Average Shares of Class A Common Stock Outstanding: Basic 18,973 16,340 18,901 14,665 Diluted 21,091 18,353 22,086 14,665 Net Income (Loss) Per Share Attributable to Evercore Partners Inc. Common Shareholders: Basic $ 0.18 $ 0.16 $ 0.30 $ (0.22 ) Diluted $ 0.17 $ 0.14 $ 0.25 $ (0.22 )       1 Includes interest expense on long-term debt and interest expense on short-term repurchase agreements.   Adjusted Pro Forma Results Throughout the discussion of Evercore's business segments, information is presented on an Adjusted Pro Forma basis, which is a non-generally accepted accounting principles (“non-GAAP”) measure and is unaudited. Adjusted Pro Forma results begin with information prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), adjusted to exclude certain items and reflect the conversion of vested and unvested Evercore LP Units, and other event-based awards, into Class A shares. Evercore believes that the disclosed Adjusted Pro Forma measures and any adjustments thereto, when presented in conjunction with comparable U.S. GAAP measures, are useful to investors to compare Evercore's results across several periods and facilitate an understanding of Evercore's operating results. The Company uses these measures to evaluate its operating performance, as well as the performance of individual employees. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. These Adjusted Pro Forma amounts are allocated to the Company's two business segments: Investment Banking and Investment Management. The differences between Adjusted Pro Forma and U.S. GAAP results are as follows: 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 modification of Evercore LP Units, which will vest over a five-year period. The Adjusted Pro Forma results assume these LP Units have vested and have been exchanged for Class A shares. Accordingly, any expense associated with these units is excluded from Adjusted Pro Forma results and the noncontrolling interest related to these units is converted to controlling interest. The Company's Management believes that it is useful to provide the per-share effect associated with the assumed conversion of these previously granted but unvested equity, and thus the Adjusted Pro Forma results reflect the vesting of all unvested Evercore LP partnership units and event-based stock-based awards. 2. Expenses Associated with Business Combinations. The following expenses resulting from business combinations have been excluded from Adjusted Pro Forma results because the Company's Management believes that operating performance is more comparable across periods excluding the effects of these acquisition-related charges; a. Acquisition and Transition Costs. The Company has reflected Acquisition and Transition Costs for expenses incurred during the first quarter of 2009 in connection with the acquisition of SFS and the formation of ETC. This charge reflects the change in accounting for deal-related costs required by SFAS No. 141(R), Business Combinations, codified under ASC 805, which was effective January 1, 2009. b. Amortization of Intangible Assets. Amortization of intangible assets related to the Protego acquisition was undertaken in contemplation of the IPO. The Braveheart acquisition occurred on December 19, 2006. Also excluded is amortization of intangible assets associated with the recent acquisitions of SFS and EAM. 3. Special Charges. The Company has reflected charges in conjunction with its decision to suspend capital raising for ECP and other ongoing strategic cost management initiatives, which it has excluded from Adjusted Pro Forma results. These charges relate to the expense required to be recorded under U.S. GAAP for stock-based compensation awards that are voluntarily forfeited by employees who remain with the Company. During 2009 employees voluntarily forfeited 738,000 unvested restricted stock units and 250,000 partnership units. The Company's Management believes that excluding the effects of these Special Charges improves the comparability of operating performance across periods. 4. Client Expenses. The Company has reflected the reclassification of reimbursable expenses and expenses associated with revenue sharing engagements with third parties as a reduction of revenue. The Company's Management believes that this adjustment results in more meaningful key operating ratios, such as compensation to net revenues and operating margin. 5. Income Taxes. Evercore is organized as a series of Limited Liability Companies, Partnerships, a C-Corporation and a Public Corporation and therefore, not all of the Company's income is subject to corporate level taxes. As a result, adjustments have been made to the Adjusted Pro Forma earnings to assume that the Company has adopted a conventional corporate tax structure and is taxed as a C Corporation in the U.S. at the prevailing corporate rates, that all deferred tax assets relating to foreign operations are fully realizable within the structure on a consolidated basis and that adjustments for deferred tax assets related to the ultimate tax deductions for equity-based compensation awards are made directly to stockholders' equity. This assumption is consistent with the assumption that all Evercore LP Units are vested and exchanged into Class A shares, as discussed in Item 1 above, as the assumed exchange would change the tax structure of the Company. 6. Presentation of Interest Expense. The Adjusted Pro Forma results present interest expense on short-term repurchase agreements, within the Investment Management segment, in Other Revenues, net, as the Company's Management believes it is more meaningful to present the spread on net interest resulting from the matched financial assets and liabilities. In addition, Adjusted Pro Forma Advisory and Investment Management Operating Income is presented before interest expense on long-term debt, which is included in interest expense on a U.S. GAAP basis.   EVERCORE PARTNERS INC.U.S. GAAP RECONCILIATION TO ADJUSTED PRO FORMA (dollars in thousands) (UNAUDITED)     Three Months Ended   Nine Months EndedSeptember 30, 2010   June 30, 2010   September 30, 2009September 30, 2010   September 30, 2009Net Revenues - U.S. GAAP $ 123,587 $ 64,840 $ 83,196 $ 276,268 $ 203,965 Reimbursable Expenses (1) (1,804 ) (1,994 ) (1,710 ) (8,446 ) (4,350 ) Interest Expense on Long-term Debt (2)   1,923     1,923     1,896     5,756     5,685   Net Revenues - Adjusted Pro Forma $ 123,706   $ 64,769   $ 83,382   $ 273,578   $ 205,300     Compensation Expense - U.S. GAAP $ 82,267 $ 45,762 $ 55,104 $ 183,750 $ 142,817 Amortization of LP Units and Certain Other Awards (3)   (4,964 )   (4,993 )   (4,411 )   (15,687 )   (4,411 ) Compensation Expense - Adjusted Pro Forma $ 77,303   $ 40,769   $ 50,693   $ 168,063   $ 138,406     Operating Income (Loss) - U.S. GAAP $ 17,565 $ (3,251 ) $ 12,286 $ 24,942 $ 804 Amortization of LP Units and Certain Other Awards (3) 4,964 4,993 4,411 15,687 4,411 Special Charges (4) - - - - 16,138 Acquisition and Transition Costs (5) - - - - 712 Intangible Asset Amortization (5)   584     584     583     1,752     1,608   Pre-Tax Income - Adjusted Pro Forma 23,113 2,326 17,280 42,381 23,673 Interest Expense on Long-term Debt (2)   1,923     1,923     1,896     5,756     5,685   Operating Income - Adjusted Pro Forma $ 25,036   $ 4,249   $ 19,176   $ 48,137   $ 29,358     Provision (Benefit) for Income Taxes - U.S. GAAP $ 8,547 $ (1,698 ) $ 4,602 $ 11,508 $ 7,033 Income Taxes (6)   1,161     2,844     2,662     6,292     2,924   Provision for Income Taxes - Adjusted Pro Forma $ 9,708   $ 1,146   $ 7,264   $ 17,800   $ 9,957     Net Income (Loss) Attributable to Evercore Partners Inc. - U.S. GAAP $ 3,530 $ 117 $ 2,633 $ 5,667 $ (3,219 ) Amortization of LP Units and Certain Other Awards (3) 4,964 4,993 4,411 15,687 4,411 Special Charges (4) - - - - 16,138 Acquisition and Transition Costs (5) - - - - 712 Intangible Asset Amortization (5) 584 584 583 1,752 1,608 Income Taxes (6) (1,161 ) (2,844 ) (2,662 ) (6,292 ) (2,924 ) Noncontrolling Interest (7)   6,731     (832 )   6,027     10,225     (379 ) Net Income Attributable to Evercore Partners Inc. - Adjusted Pro Forma $ 14,648   $ 2,018   $ 10,992   $ 27,039   $ 16,347     Diluted Shares Outstanding - U.S. GAAP 21,091 22,363 18,353 22,086 14,665 Vested Partnership Units (8) 12,473 12,782 14,061 12,627 14,771 Unvested Partnership Units (8) 4,540 4,540 4,603 4,540 4,603 Vested Restricted Stock Units - Event Based (8) - - (10 ) - (19 ) Unvested Restricted Stock Units - Event Based (8) 639 648 743 639 743 Unvested Restricted Stock Units - Service Based (8) - - - - 1,061 Unvested Restricted Stock - Service Based (8)   -     -     -     -     107   Diluted Shares Outstanding - Adjusted Pro Forma   38,743     40,333     37,750     39,892     35,931     Key Metrics: (a) Diluted Earnings (Loss) Per Share - U.S. GAAP (b) $ 0.17 $ - $ 0.14 $ 0.25 $ (0.22 ) Diluted Earnings Per Share - Adjusted Pro Forma (b) $ 0.38 $ 0.05 $ 0.29 $ 0.68 $ 0.45   Compensation Ratio - U.S. GAAP 67 % 71 % 66 % 67 % 70 % Compensation Ratio - Adjusted Pro Forma 62 % 63 % 61 % 61 % 67 %   Operating Margin - U.S. GAAP 14 % -5 % 15 % 9 % 0 % Operating Margin - Adjusted Pro Forma 20 % 7 % 23 % 18 % 14 %   Effective Tax Rate - U.S. GAAP 49 % 52 % 37 % 46 % 875 % Effective Tax Rate - Adjusted Pro Forma 42 % 49 % 42 % 42 % 42 %   (a) Reconciliations of the key metrics from U.S. GAAP to Adjusted Pro Forma are a derivative of the reconciliations of their components above. (b) For Earnings Per Share purposes, Net Income (Loss) Attributable to Evercore Partners Inc. is reduced by $21 of accretion for the three months ended September 30, 2010 and June 30, 2010 and $53 for the nine months ended September 30, 2010, related to the Company's noncontrolling interest in Trilantic Capital Partners.   EVERCORE PARTNERS INC.U.S. GAAP RECONCILIATION TO ADJUSTED PRO FORMATRAILING TWELVE MONTHS (dollars in thousands) (UNAUDITED)     ConsolidatedTwelve Months EndedSeptember 30, 2010   June 30, 2010   September 30, 2009Net Revenues - U.S. GAAP $ 385,442 $ 345,051 $ 237,201 Reimbursable Expenses (1) (10,390 ) (10,296 ) (5,012 ) Interest Expense on Long-term Debt (2)   7,666     7,639     7,569   Net Revenues - Adjusted Pro Forma $ 382,718   $ 342,394   $ 239,758     Compensation Expense - U.S. GAAP $ 251,751 $ 224,588 $ 177,402 Amortization of LP Units and Certain Other Awards (3)   (20,676 )   (20,123 )   (4,411 ) Compensation Expense - Adjusted Pro Forma $ 231,075   $ 204,465   $ 172,991     Compensation Ratio - U.S. GAAP (a) 65 % 65 % 75 % Compensation Ratio - Adjusted Pro Forma (a) 60 % 60 % 72 %   Investment BankingTwelve Months EndedSeptember 30, 2010June 30, 2010September 30, 2009Net Revenues - U.S. GAAP $ 325,471 $ 298,201 $ 226,641 Reimbursable Expenses (1) (10,145 ) (10,051 ) (5,000 ) Interest Expense on Long-term Debt (2)   4,154     4,136     1,707   Net Revenues - Adjusted Pro Forma $ 319,480   $ 292,286   $ 223,348     Compensation Expense - U.S. GAAP $ 201,303 $ 181,259 $ 139,828 Amortization of LP Units and Certain Other Awards (3)   (17,275 )   (16,959 )   (3,785 ) Compensation Expense - Adjusted Pro Forma $ 184,028   $ 164,300   $ 136,043     Compensation Ratio - U.S. GAAP (a) 62 % 61 % 62 % Compensation Ratio - Adjusted Pro Forma (a) 58 % 56 % 61 %   (a) Reconciliations of the key metrics from U.S. GAAP to Adjusted Pro Forma are a derivative of the reconciliations of their components above.   EVERCORE PARTNERS INC.ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAPFOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 (dollars in thousands) (UNAUDITED)     Investment Banking SegmentThree Months Ended September 30, 2010   Nine Months Ended September 30, 2010Non-GAAP Adjusted Pro Forma Basis   AdjustmentsU.S. GAAP BasisNon-GAAP Adjusted Pro Forma Basis   AdjustmentsU.S. GAAP Basis Net Revenues: Investment Banking Revenue $ 99,563 $ 1,804 (1) $ 101,367 $ 216,348 $ 8,446 (1) $ 224,794 Other Revenue, net   435     (1,042 ) (2)   (607 )   3,625     (3,119 ) (2)   506   Net Revenues   99,998     762     100,760     219,973     5,327     225,300     Expenses: Employee Compensation and Benefits 60,847 4,101 (3) 64,948 130,772 13,150 (3) 143,922 Non-compensation Costs   13,315     2,273   (5)   15,588     37,427     9,853   (5)   47,280   Total Expenses   74,162     6,374     80,536     168,199     23,003     191,202     Operating Income $ 25,836   $ (5,612 ) $ 20,224   $ 51,774   $ (17,676 ) $ 34,098     Compensation Ratio (a) 61 % 64 % 59 % 64 % Operating Margin (a) 26 % 20 % 24 % 15 %   Investment Management SegmentThree Months Ended September 30, 2010Nine Months Ended September 30, 2010Non-GAAP Adjusted Pro Forma BasisAdjustmentsU.S. GAAP BasisNon-GAAP Adjusted Pro Forma BasisAdjustmentsU.S. GAAP Basis Net Revenues: Investment Management Revenue $ 23,412 $ - $ 23,412 $ 50,758 $ - $ 50,758 Other Revenue, net   296     (881 ) (2)   (585 )   2,847     (2,637 ) (2)   210   Net Revenues   23,708     (881 )   22,827     53,605     (2,637 )   50,968     Expenses: Employee Compensation and Benefits 16,456 863 (3) 17,319 37,291 2,537 (3) 39,828 Non-compensation Costs   8,052     115   (5)   8,167     19,951     345   (5)   20,296   Total Expenses   24,508     978     25,486     57,242     2,882     60,124     Operating Income (Loss) $ (800 ) $ (1,859 ) $ (2,659 ) $ (3,637 ) $ (5,519 ) $ (9,156 )   Compensation Ratio (a) 69 % 76 % 70 % 78 % Operating Margin (a) (3 %) (12 %) (7 %) (18 %)   (a) Reconciliations of the key metrics from U.S. GAAP to Adjusted Pro Forma are a derivative of the reconciliations of their components above.   EVERCORE PARTNERS INC.ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAPFOR THE THREE MONTHS ENDED JUNE 30, 2010 (dollars in thousands) (UNAUDITED)     Investment Banking SegmentThree Months Ended June 30, 2010Non-GAAP Adjusted Pro Forma Basis   Adjustments   U.S. GAAP Basis Net Revenues: Investment Banking Revenue $ 45,511 $ 1,994 (1) $ 47,505 Other Revenue, net   1,562     (1,042 ) (2)   520   Net Revenues   47,073     952     48,025     Expenses: Employee Compensation and Benefits 29,360 4,190 (3) 33,550 Non-compensation Costs   13,430     2,463   (5)   15,893   Total Expenses   42,790     6,653     49,443     Operating Income (Loss) $ 4,283   $ (5,701 ) $ (1,418 )   Compensation Ratio (a) 62 % 70 % Operating Margin (a) 9 % (3 %)   Investment Management SegmentThree Months Ended June 30, 2010Non-GAAP Adjusted Pro Forma BasisAdjustmentsU.S. GAAP Basis Net Revenues: Investment Management Revenue $ 16,295 $ - $ 16,295 Other Revenue, net   1,401     (881 ) (2)   520   Net Revenues   17,696     (881 )   16,815     Expenses: Employee Compensation and Benefits 11,409 803 (3) 12,212 Non-compensation Costs   6,321     115   (5)   6,436   Total Expenses   17,730     918     18,648     Operating Income (Loss) $ (34 ) $ (1,799 ) $ (1,833 )   Compensation Ratio (a) 64 % 73 % Operating Margin (a) (0 %) (11 %)   (a) Reconciliations of the key metrics from U.S. GAAP to Adjusted Pro Forma area derivative of the reconciliations of their components above.   EVERCORE PARTNERS INC.ADJUSTED PRO FORMA SEGMENT RECONCILIATION TO U.S. GAAPFOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 (dollars in thousands) (UNAUDITED)     Investment Banking SegmentThree Months Ended September 30, 2009   Nine Months Ended September 30, 2009Non-GAAP Adjusted Pro Forma Basis   Adjustments   U.S. GAAP BasisNon-GAAP Adjusted Pro Forma Basis   Adjustments   U.S. GAAP Basis Net Revenues: Investment Banking Revenue $ 71,596 $ 1,710 (1) $ 73,306 $ 188,084 $ 4,347 (1) $ 192,431 Other Revenue, net   1,208     (1,024 ) (2)   184     1,739     (1,707 ) (2)   32   Net Revenues   72,804     686     73,490     189,823     2,640     192,463     Expenses: Employee Compensation and Benefits 41,119 3,785 (3) 44,904 110,013 3,785 (3) 113,798 Non-compensation Costs 8,812 2,178 (5) 10,990 24,571 5,753 (5) 30,324 Special Charges   -     -     -     -     3,951   (4)   3,951   Total Expenses   49,931     5,963     55,894     134,584     13,489     148,073     Operating Income $ 22,873   $ (5,277 ) $ 17,596   $ 55,239   $ (10,849 ) $ 44,390     Compensation Ratio (a) 56 % 61 % 58 % 59 % Operating Margin (a) 31 % 24 % 29 % 23 %   Investment Management SegmentThree Months Ended September 30, 2009Nine Months Ended September 30, 2009Non-GAAP Adjusted Pro Forma BasisAdjustmentsU.S. GAAP BasisNon-GAAP Adjusted Pro Forma BasisAdjustmentsU.S. GAAP Basis Net Revenues: Investment Management Revenue $ 9,785 $ - $ 9,785 $ 12,511 $ 3 (1) $ 12,514 Other Revenue, net   793     (872 ) (2)   (79 )   2,966     (3,978 ) (2)   (1,012 ) Net Revenues   10,578     (872 )   9,706     15,477     (3,975 )   11,502     Expenses: Employee Compensation and Benefits 9,574 626 (3) 10,200 28,393 626 (3) 29,019 Non-compensation Costs 4,701 115 (5) 4,816 12,965 917 (5) 13,882 Special Charges   -     -     -     -     12,187   (4)   12,187   Total Expenses   14,275     741     15,016     41,358     13,730     55,088     Operating Income (Loss) $ (3,697 ) $ (1,613 ) $ (5,310 ) $ (25,881 ) $ (17,705 ) $ (43,586 )   Compensation Ratio (a) 91 % 105 % 183 % 252 % Operating Margin (a) (35 %) (55 %) (167 %) (379 %)   (a) Reconciliations of the key metrics from U.S. GAAP to Adjusted Pro Forma are a derivative of the reconciliations of their components above. Notes to Unaudited Condensed Consolidated Adjusted Pro Forma Financial Data (1)   The Company has reflected the reclassification of reimbursable expenses and expenses associated with revenue sharing engagements with third parties as a reduction of revenue. (2) Interest Expense on Long-term Debt is excluded from the Adjusted Pro Forma Investment Banking and Investment Management segment results and is included in Interest Expense in the segment results on a U.S. GAAP Basis. (3) The Company incurred expenses from the modification of Evercore LP Units, which will vest over a five-year period. (4) The Company has reflected charges in conjunction with Evercore's decision to suspend capital raising for ECP and other ongoing strategic cost management initiatives. The charges relate to the expense required to be recorded under U.S. GAAP for stock-based compensation awards that are voluntarily forfeited by employees who remain with the Company. During 2009 employees voluntarily forfeited 738,000 unvested restricted stock units and 250,000 Evercore LP partnership units. (5) Non-compensation Costs on an Adjusted Pro Forma basis reflect the following adjustments   Three Months Ended September 30, 2010Investment Banking   Investment Management   Total Segments   Adjustments   U.S. GAAP Occupancy and Equipment Rental $ 3,494 $ 1,635 $ 5,129 $ - $ 5,129 Professional Fees 3,215 2,140 5,355 (1) 580 5,935 Travel and Related Expenses 2,806 525 3,331 (1) 1,110 4,441 Communications and Information Services 1,010 409 1,419 (1) 36 1,455 Depreciation and Amortization 1,105 1,690 2,795 (5a) 584 3,379 Acquisition and Transition Costs 284 101 385 - 385 Other Operating Expenses   1,401   1,552   2,953 (1)   78   3,031 Total Non-compensation Costs $ 13,315 $ 8,052 $ 21,367 $ 2,388 $ 23,755   Three Months Ended June 30, 2010Investment BankingInvestment ManagementTotal SegmentsAdjustmentsU.S. GAAP Occupancy and Equipment Rental $ 3,325 $ 1,306 $ 4,631 $ - $ 4,631 Professional Fees 3,547 2,019 5,566 (1) 785 6,351 Travel and Related Expenses 2,512 355 2,867 (1) 1,112 3,979 Communications and Information Services 1,260 469 1,729 (1) 33 1,762 Depreciation and Amortization 683 681 1,364 (5a) 584 1,948 Acquisition and Transition Costs 604 676 1,280 - 1,280 Other Operating Expenses   1,499   815   2,314 (1)   64   2,378 Total Non-compensation Costs $ 13,430 $ 6,321 $ 19,751 $ 2,578 $ 22,329   Three Months September 30, 2009Investment BankingInvestment ManagementTotal SegmentsAdjustmentsU.S. GAAP Occupancy and Equipment Rental $ 2,099 $ 1,335 $ 3,434 $ - $ 3,434 Professional Fees 3,062 1,866 4,928 (1) 745 5,673 Travel and Related Expenses 1,279 310 1,589 (1) 856 2,445 Communications and Information Services 721 283 1,004 (1) 22 1,026 Depreciation and Amortization 374 198 572 (5a) 583 1,155 Acquisition and Transition Costs - - - - - Other Operating Expenses   1,277   709   1,986 (1)   87   2,073 Total Non-compensation Costs $ 8,812 $ 4,701 $ 13,513 $ 2,293 $ 15,806   Nine Months September 30, 2010Investment BankingInvestment ManagementTotal SegmentsAdjustmentsU.S. GAAP Occupancy and Equipment Rental $ 9,127 $ 3,960 $ 13,087 $ - $ 13,087 Professional Fees 9,628 5,847 15,475 (1) 5,176 20,651 Travel and Related Expenses 7,650 1,152 8,802 (1) 2,988 11,790 Communications and Information Services 2,949 1,211 4,160 (1) 86 4,246 Depreciation and Amortization 2,320 2,605 4,925 (5a) 1,752 6,677 Acquisition and Transition Costs 1,183 1,938 3,121 - 3,121 Other Operating Expenses   4,570   3,238   7,808 (1)   196   8,004 Total Non-compensation Costs $ 37,427 $ 19,951 $ 57,378 $ 10,198 $ 67,576   Nine Months September 30, 2009Investment BankingInvestment ManagementTotal SegmentsAdjustmentsU.S. GAAP Occupancy and Equipment Rental $ 6,383 $ 3,689 $ 10,072 $ - $ 10,072 Professional Fees 7,772 4,882 12,654 (1) 1,957 14,611 Travel and Related Expenses 3,721 700 4,421 (1) 2,079 6,500 Communications and Information Services 1,878 777 2,655 (1) 60 2,715 Depreciation and Amortization 1,127 618 1,745 (5a) 1,608 3,353 Acquisition and Transition Costs - - - (5b) 712 712 Other Operating Expenses   3,690   2,299   5,989 (1)   254   6,243 Total Non-compensation Costs $ 24,571 $ 12,965 $ 37,536 $ 6,670 $ 44,206 (5a)   Reflects expenses associated with amortization of intangible assets acquired in the Protego, Braveheart, SFS and EAM acquisitions. (5b) The Company has reflected Acquisition and Transition Costs for costs incurred during the first quarter of 2009 in connection with the acquisition of SFS and the formation of ETC. This charge reflects the change in accounting for deal-related costs required by SFAS No. 141(R), Business Combinations, codified under ASC 805, which was effective January 1, 2009. (6) Evercore is organized as a series of Limited Liability Companies, Partnerships, a C-Corporation and a Public Corporation and therefore, not all of the Company's income is subject to corporate level taxes. As a result, adjustments have been made to increase Evercore's effective tax rate to approximately 42% for the three and nine months ended September 30, 2010. These adjustments assume that the Company has adopted a conventional corporate tax structure and is taxed as a C Corporation in the U.S. at the prevailing corporate rates, that all deferred tax assets relating to foreign operations are fully realizable within the structure on a consolidated basis and that adjustments for deferred tax assets related to the ultimate tax deductions for equity-based compensation awards are made directly to stockholders' equity. (7) Reflects adjustment to eliminate noncontrolling interest related to all Evercore LP partnership units which are assumed to be converted to Class A common stock. (8) Assumes the vesting of all Evercore LP partnership units and restricted stock unit event-based awards and reflects on a weighted average basis, the dilution of unvested service-based awards. In the computation of outstanding common stock equivalents for U.S. GAAP net income per share, the unvested Evercore LP partnership units are anti-dilutive and the event-based restricted stock units are excluded from the calculation. InvestorsEvercore Partners Inc.Robert B. Walsh, 212-857-3100Chief Financial OfficerorMediaThe Abernathy MacGregor Group, for Evercore PartnersKenny Juarez, 212-371-5999