Evercore Partners Inc. (Parent Company Only) Financial Statements

EVERCORE PARTNERS INC.

(parent company only)

CONDENSED STATEMENTS OF FINANCIAL CONDITION



	December 31,
	2013			2012
ASSETS
Equity Investment in Subsidiary	$	531,380		$	490,856
Deferred Tax Asset	254,486			225,741
Other Assets	6,656			—
TOTAL ASSETS	$	792,522		$	716,597
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Payable to Related Party	$	8,881		$	7,282
Taxes Payable	—			11,872
Amounts Due Pursuant to Tax Receivable Agreement	175,771			165,350
Long-term Debt - Notes Payable	103,226			101,375
Other Liabilities	2,063			2,212
TOTAL LIABILITIES	289,941			288,091
Stockholders' Equity
Common Stock
Class A, par value $0.01 per share (1,000,000,000 shares authorized, 40,772,434 and 35,040,501 issued at December 31, 2013 and 2012, respectively, and 33,069,534 and 29,576,986 outstanding at December 31, 2013 and 2012, respectively)	408			350
Class B, par value $0.01 per share (1,000,000 shares authorized, 42 and 43 issued and outstanding at December 31, 2013 and 2012, respectively)	—			—
Additional Paid-In-Capital	799,233			654,275
Accumulated Other Comprehensive Income (Loss)	(10,784		)	(9,086		)
Retained Earnings (Deficit)	(59,896		)	(77,079		)
Treasury Stock at Cost (7,702,900 and 5,463,515 shares at December 31, 2013 and 2012, respectively)	(226,380		)	(139,954		)
TOTAL STOCKHOLDERS' EQUITY	502,581			428,506
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	792,522		$	716,597

See notes A to E to parent company only financial statements.

EVERCORE PARTNERS INC.

(parent company only)

CONDENSED STATEMENTS OF OPERATIONS



	For the Years Ended December 31,
	2013		2012		2011
REVENUES
Interest Income	$	14,993	$	7,955	$	7,817
TOTAL REVENUES	14,993		7,955		7,817
Interest Expense	8,088		7,955		7,817
NET REVENUES	6,905		—		—
EXPENSES
TOTAL EXPENSES	—		—		—
OPERATING INCOME	6,905		—		—
Equity in Income of Subsidiary	87,317		53,229		21,083
Provision for Income Taxes	40,960		24,340		14,131
NET INCOME	$	53,262	$	28,889	$	6,952

See notes A to E to parent company only financial statements.

EVERCORE PARTNERS INC.

(parent company only)

CONDENSED STATEMENTS OF CASH FLOWS



	For the Years Ended December 31,
	2013			2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	53,262		$	28,889		$	6,952
Undistributed Income of Subsidiary	(87,317		)	(53,229		)	(21,083		)
Deferred Taxes	(28,745		)	—			—
Accretion on Long-term Debt	1,851			1,711			1,582
(Increase) Decrease in Operating Assets:
Other Assets	(6,656		)	14,310			12,105
Increase (Decrease) in Operating Liabilities:
Payable to Uncombined Affiliates	—			—			957
Taxes Payable	11,872			11,872			—
Other Liabilities	1,706			(3,101		)	(574		)
Net Cash Provided by (Used in) Operating Activities	(54,027		)	452			(61		)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash Paid for Acquisitions, net of cash acquired	—			—			(30,397		)
Investment in Subsidiary	90,949			24,239			(22,994		)
Net Cash Provided by (Used in) Investing Activities	90,949			24,239			(53,391		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Equity Offering	—			—			168,140
Purchase of Evercore LP Units	(6,832		)	(395		)	(95,342		)
Dividends	(30,090		)	(24,296		)	(19,346		)
Net Cash Provided by (Used in) Financing Activities	(36,922		)	(24,691		)	53,452
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	—			—			—
CASH AND CASH EQUIVALENTS—Beginning of Year	—			—			—
CASH AND CASH EQUIVALENTS—End of Year	$	—		$	—		$	—

See notes A to E to parent company only financial statements.

EVERCORE PARTNERS INC.

(parent company only)

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note A – Organization

Evercore Partners Inc. (the “Company”) was incorporated as a Delaware corporation on July 21, 2005. The Company did not begin meaningful operations until the reorganization discussed below. Pursuant to a reorganization into a holding company structure, the Company became a holding company and its sole asset is a controlling equity interest in Evercore LP. As the sole general partner of Evercore LP, the Company operates and controls all of the business and affairs of Evercore LP and, through Evercore LP and its subsidiaries, continues to conduct the business now conducted by these subsidiaries.

Note B – Significant Accounting Policies

Basis of Presentation. The Statements of Financial Condition, Operations and Cash Flows have been prepared in accordance with U.S. GAAP.

Equity in Income of Subsidiary. The Equity in Income of Subsidiary represents the Company’s share of income from Evercore LP.

Note C – Stockholders’ Equity

The Company is authorized to issue 1,000,000 Class A Shares, par value $0.01 per share, and 1,000 shares of Class B common stock, par value $0.01 per share. All Class A Shares and shares of Class B common stock vote together as a single class. At December 31, 2013, the Company has issued 40,772 Class A Shares. The Company canceled three shares and granted two shares of Class B common stock in exchange for $1.00, which were held by certain limited partners of Evercore LP during the twelve months ended December 31, 2013. During 2013, the Company purchased 983 Class A Shares primarily from employees at values ranging from $22.24 to $55.12 per share primarily for the net settlement of stock-based compensation awards and 1,298 Class A Shares at market values ranging from $36.00 to $41.00 per share pursuant to the Company’s share repurchase program. The result of these purchases was an increase in Treasury Stock of $87,620 on the Company’s Statement of Financial Condition as of December 31, 2013. During 2013, the Company issued 39 Class A Shares from treasury stock as payment of contingent consideration in connection with the MJC Associates Agreement and 3 Class A Shares to a former employee. The result of these issuances was a decrease in Treasury stock of $1,194 on the Company's Statement of Financial Condition as of December 31, 2013. During the year ended December 31, 2013, the Company declared and paid dividends of $0.91 per share, totaling $30,090 which were wholly funded by the Company’s sole subsidiary, Evercore LP.

As discussed in Note 17 to the consolidated financial statements, both the LP Units and RSUs are exchangeable into Class A Shares on a one-for-one basis once vested.

Note D – Issuance of Notes Payable and Warrants

On August 21, 2008, the Company entered into a Purchase Agreement with Mizuho pursuant to which Mizuho purchased from the Company Senior Notes and Warrants expiring 2020. See Note 12 to the consolidated financial statements.

Note E – Commitments and Contingencies

As of December 31, 2013, as discussed in Note 12 to the consolidated financial statements, the Company estimates the contractual obligations related to the Senior Notes to be $163,680. Pursuant to the Senior Notes, we expect to make payments to the notes’ holder of $6,240 within one year or less, $12,480 in one to three years, $12,480 in three to five years and $132,480 after five years.

As of December 31, 2013, as discussed in Note 18 to the consolidated financial statements, the Company estimates the contractual obligations related to the Tax Receivable Agreements to be $184,643. The company expects to pay to the counterparties to the Tax Receivable Agreement $8,872 within one year or less, $29,928 in one to three years, $33,330 in three to five years and $112,513 after five years. Interest Income on the Company's Statement of Operations includes $6,905 from changes in amounts due pursuant to the Company's tax receivable agreement for the year ended December 31, 2013.