Evercore Partners Inc. (Parent Company Only) Financial Statements

EVERCORE PARTNERS INC.

(parent company only)

CONDENSED STATEMENTS OF FINANCIAL CONDITION



	December 31,
	2015			2014
ASSETS
Equity Investment in Subsidiary	$	534,258		$	571,649
Deferred Tax Asset	287,281			270,373
Goodwill	15,236			15,236
Other Assets	—			3,402
TOTAL ASSETS	$	836,775		$	860,660
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current Liabilities
Payable to Related Party	$	11,638		$	10,833
Taxes Payable	14,761			—
Other Current Liabilities	538			2,067
Total Current Liabilities	26,937			12,900
Amounts Due Pursuant to Tax Receivable Agreement	186,036			191,253
Long-term Debt - Notes Payable	119,250			105,226
TOTAL LIABILITIES	332,223			309,379
Stockholders' Equity
Common Stock
Class A, par value $0.01 per share (1,000,000,000 shares authorized, 55,249,559 and 46,414,240 issued at December 31, 2015 and 2014, respectively, and 39,623,271 and 36,255,124 outstanding at December 31, 2015 and 2014, respectively)	552			464
Class B, par value $0.01 per share (1,000,000 shares authorized, 25 and 27 issued and outstanding at December 31, 2015 and 2014, respectively)	—			—
Additional Paid-In-Capital	1,210,742			950,147
Accumulated Other Comprehensive Income (Loss)	(34,539		)	(20,387		)
Retained Earnings (Deficit)	(27,791		)	(17,814		)
Treasury Stock at Cost (15,626,288 and 10,159,116 shares at December 31, 2015 and 2014, respectively)	(644,412		)	(361,129		)
TOTAL STOCKHOLDERS' EQUITY	504,552			551,281
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	836,775		$	860,660

See notes to parent company only financial statements.

EVERCORE PARTNERS INC.

(parent company only)

CONDENSED STATEMENTS OF OPERATIONS



	For the Years Ended December 31,
	2015		2014		2013
REVENUES
Interest Income	$	7,818	$	8,341	$	14,993
TOTAL REVENUES	7,818		8,341		14,993
Interest Expense	7,818		8,341		8,088
NET REVENUES	—		—		6,905
EXPENSES
TOTAL EXPENSES	—		—		—
OPERATING INCOME	—		—		6,905
Equity in Income of Subsidiary	103,931		141,612		87,317
Provision for Income Taxes	61,068		54,738		40,960
NET INCOME	$	42,863	$	86,874	$	53,262

See notes to parent company only financial statements.

EVERCORE PARTNERS INC.

(parent company only)

CONDENSED STATEMENTS OF CASH FLOWS



	For the Years Ended December 31,
	2015			2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	42,863		$	86,874		$	53,262
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Undistributed Income of Subsidiary	(103,931		)	(141,612		)	(87,317		)
Deferred Taxes	(1,685		)	(15,887		)	(28,745		)
Accretion on Long-term Debt	1,603			2,000			1,851
(Increase) Decrease in Operating Assets:
Other Assets	3,402			3,255			(6,656		)
Increase (Decrease) in Operating Liabilities:
Taxes Payable	14,761			—			11,872
Other Liabilities	—			—			1,706
Net Cash Provided by (Used in) Operating Activities	(42,987		)	(65,370		)	(54,027		)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in Subsidiary	82,703			105,600			90,949
Net Cash Provided by Investing Activities	82,703			105,600			90,949
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of Evercore LP Units	—			(1,476		)	(6,832		)
Exercise of Warrants, Net	6,416			—			—
Dividends	(46,132		)	(38,754		)	(30,090		)
Net Cash Provided by (Used in) Financing Activities	(39,716		)	(40,230		)	(36,922		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	—			—			—
CASH AND CASH EQUIVALENTS—Beginning of Year	—			—			—
CASH AND CASH EQUIVALENTS—End of Year	$	—		$	—		$	—

SUPPLEMENTAL CASH FLOW DISCLOSURE
Dividend Equivalents Issued	$	6,514		$	6,038		$	5,989
Exchange of Notes Payable as Consideration for Exercise of Warrants	$	118,347		$	—		$	—

See notes 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, 2015, the Company has issued 55,250 Class A Shares. The Company canceled four shares of Class B common stock, which were held by certain limited partners of Evercore LP during the twelve months ended December 31, 2015. During 2015, the Company purchased 996 Class A Shares primarily from employees at values ranging from $47.56 to $59.02 per share primarily for the net settlement of stock-based compensation awards and 4,471 Class A Shares at market values ranging from $47.10 to $57.03 per share pursuant to the Company’s share repurchase program. The result of these purchases was an increase in Treasury Stock of $283,283 on the Company’s Statement of Financial Condition as of December 31, 2015. During the year ended December 31, 2015, the Company declared and paid dividends of $1.15 per share, totaling $46,326 which were wholly funded by the Company’s sole subsidiary, Evercore LP. Dividends are paid and treasury shares are repurchased by a subsidiary of Evercore Partners Inc.

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 the Purchase Agreement with Mizuho pursuant to which Mizuho purchased from the Company Senior Notes and Warrants expiring 2020. Mizuho exercised in full the outstanding Warrants in November 2015 and paid the exercise price by surrender of the entire issue of the Senior Notes and payment of $11,020 in cash. On November 2, 2015 the Company entered into a senior credit facility with the New York branch of Mizuho pursuant to which it borrowed, concurrently with the closing of the offering, $120,000 in a new term loan. See Note 12 to the consolidated financial statements.

Note E – Commitments and Contingencies

As of December 31, 2015, as discussed in Note 12 to the consolidated financial statements, the Company estimates the contractual obligations related to the New Loan to be $133,514. Pursuant to the New Loan, we expect to make payments to the notes’ holder of $3,101 within one year or less, $42,162 in one to three years and $88,251 in three to five years.

As of December 31, 2015, as discussed in Note 18 to the consolidated financial statements, the Company estimates the contractual obligations related to the Tax Receivable Agreements to be $197,674. The company expects to pay to the counterparties to the Tax Receivable Agreement $11,638 within one year or less, $23,713 in one to three years, $25,590 in three to five years and $136,733 after five years.