Evercore Inc. (Parent Company Only) Financial Statements

EVERCORE INC.

(parent company only)

CONDENSED STATEMENTS OF FINANCIAL CONDITION



	December 31,
	2017			2016
ASSETS
Equity Investment in Subsidiary	$	612,453		$	598,279
Deferred Tax Assets	180,487			291,827
Goodwill	15,236			15,236
Other Assets	9,689			—
TOTAL ASSETS	$	817,865		$	905,342
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current Liabilities
Payable to Related Party	$	12,821		$	12,201
Taxes Payable	—			21,341
Other Current Liabilities	2,358			2,296
Total Current Liabilities	15,179			35,838
Amounts Due Pursuant to Tax Receivable Agreements	90,375			174,109
Long-term Debt - Notes Payable	168,347			168,097
TOTAL LIABILITIES	273,901			378,044
Stockholders' Equity
Common Stock
Class A, par value $0.01 per share (1,000,000,000 shares authorized, 62,119,904 and 58,292,567 issued at December 31, 2017 and 2016, respectively, and 39,102,154 and 39,190,856 outstanding at December 31, 2017 and 2016, respectively)	621			582
Class B, par value $0.01 per share (1,000,000 shares authorized, 82 and 24 issued and outstanding at December 31, 2017 and 2016, respectively)	—			—
Additional Paid-In-Capital	1,600,699			1,368,122
Accumulated Other Comprehensive Income (Loss)	(31,411		)	(50,096		)
Retained Earnings	79,461			20,343
Treasury Stock at Cost (23,017,750 and 19,101,711 shares at December 31, 2017 and 2016, respectively)	(1,105,406		)	(811,653		)
TOTAL STOCKHOLDERS' EQUITY	543,964			527,298
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	817,865		$	905,342

See notes to parent company only financial statements.

EVERCORE INC.

(parent company only)

CONDENSED STATEMENTS OF OPERATIONS



	For the Years Ended December 31,
	2017		2016		2015
REVENUES
Other Revenue, Including Interest	$	86,784	$	8,385	$	7,818
TOTAL REVENUES	86,784		8,385		7,818
Interest Expense	9,249		8,385		7,818
NET REVENUES	77,535		—		—
EXPENSES
TOTAL EXPENSES	—		—		—
OPERATING INCOME	77,535		—		—
Equity in Income of Subsidiary	287,440		209,841		103,931
Provision for Income Taxes	239,521		102,313		61,068
NET INCOME	$	125,454	$	107,528	$	42,863

See notes to parent company only financial statements.

EVERCORE INC.

(parent company only)

CONDENSED STATEMENTS OF CASH FLOWS



	For the Years Ended December 31,
	2017			2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	125,454		$	107,528		$	42,863
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Undistributed Income of Subsidiary	(209,905		)	(209,841		)	(103,931		)
Adjustment to Tax Receivable Agreement	(77,535		)	—			—
Deferred Taxes	153,344			12,453			(1,685		)
Accretion on Long-term Debt	250			180			1,603
(Increase) Decrease in Operating Assets:
Other Assets	(9,689		)	—			3,402
Increase (Decrease) in Operating Liabilities:
Taxes Payable	(21,341		)	6,580			14,761
Net Cash Provided by (Used in) Operating Activities	(39,422		)	(83,100		)	(42,987		)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in Subsidiary	95,943			84,658			82,703
Net Cash Provided by Investing Activities	95,943			84,658			82,703
CASH FLOWS FROM FINANCING ACTIVITIES
Exercise of Warrants, Net	—			—			6,416
Payment of Notes Payable - Mizuho	—			(120,000		)	—
Issuance of Notes Payable	—			170,000			—
Dividends	(56,521		)	(51,558		)	(46,132		)
Net Cash Provided by (Used in) Financing Activities	(56,521		)	(1,558		)	(39,716		)
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
Accrued Dividends	$	9,815		$	7,836		$	6,514
Exchange of Notes Payable as Consideration for Exercise of Warrants	$	—		$	—		$	118,347

See notes to parent company only financial statements.

EVERCORE INC.

(parent company only)

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note A – Organization

Evercore Inc. (the "Company," formerly known as Evercore Partners Inc.) 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 accounting principles generally accepted in the United States of America ("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 shares of Class A common stock ("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, 2017, the Company has issued 62,120 Class A Shares. The Company canceled six shares of Class B common stock, which were held by a limited partner of Evercore LP during the twelve months ended December 31, 2017. During 2017, the Company purchased 1,159 Class A Shares primarily from employees at values ranging from $50.90 to $90.50 per share primarily for the net settlement of stock-based compensation awards and 2,757 Class A Shares at market values ranging from $67.37 to $78.81 per share pursuant to the Company's share repurchase program. The result of these purchases was an increase in Treasury Stock of $293,753 on the Company's Statement of Financial Condition as of December 31, 2017. During the year ended December 31, 2017, the Company declared and paid dividends of $1.42 per share, totaling $56,521, which were wholly funded by the Company's sole subsidiary, Evercore LP, and accrued deferred cash dividends on unvested RSUs, totaling $9,815. Dividends are paid and treasury shares are repurchased by a subsidiary of Evercore Inc.

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

Note D – Issuance of Notes Payable

On March 30, 2016, the Company issued an aggregate of $170,000 of senior notes (the "Private Placement Notes"), including: $38,000 aggregate principal amount of its 4.88% Series A senior notes due 2021, $67,000 aggregate principal amount of its 5.23% Series B senior notes due 2023, $48,000 aggregate principal amount of its 5.48% Series C senior notes due 2026 and $17,000 aggregate principal amount of its 5.58% Series D senior notes due 2028, pursuant to a note purchase agreement dated as of March 30, 2016, among the Company and the purchasers party thereto in a private placement exempt from registration under the Securities Act of 1933.

The Company used $120,000 of the net proceeds from the Private Placement Notes to repay outstanding borrowings under the senior credit facility with Mizuho Bank, Ltd. on March 30, 2016 and used the remaining net proceeds for general corporate purposes.

Note E – Commitments and Contingencies

As of December 31, 2017, as discussed in Note 12 to the consolidated financial statements, the Company estimates the contractual obligations related to the Private Placement Notes to be $228,080. Pursuant to the Private Placement Notes, we expect to make payments to the notes' holders of $8,937 within one year or less, $17,874 in one to three years, $53,093 in three to five years and $148,176 after five years.

As discussed in Note 18 to the consolidated financial statements, in conjunction with the enactment of the Tax Cuts and Jobs Act on December 22, 2017, which reduced income tax rates in the U.S. in future years, the Company's liability for amounts due pursuant to the tax receivable agreement was re-measured, which resulted in a reduction of $77,535 to the liability. As of December 31, 2017, the Company estimates the contractual obligations related to the Tax Receivable Agreement to be $103,196. The company expects to pay to the counterparties to the Tax Receivable Agreement $12,821 within one year or less, $17,421 in one to three years, $18,437 in three to five years and $54,517 after five years.

Note F – Income Taxes

In conjunction with the enactment of the Tax Cuts and Jobs Act on December 22, 2017, which reduced income tax rates in the U.S. in future years, the Company's tax provision for 2017 includes a charge resulting from the estimated re-measurement of net deferred tax assets. In addition, Other Revenue, Including Interest includes an estimated gain of $77,535 related to a reduction in the liability for amounts due pursuant to the Company's tax receivable agreement. See Note 20 to the consolidated financial statements for further information.