Evercore Inc. (Parent Company Only) Financial Statements

EVERCORE INC.

(parent company only)

CONDENSED STATEMENTS OF FINANCIAL CONDITION



	December 31,
	2018			2017
ASSETS
Equity Investment in Subsidiary	$	824,239		$	612,453
Deferred Tax Assets	223,936			180,487
Goodwill	15,236			15,236
Other Assets	—			9,689
TOTAL ASSETS	$	1,063,411		$	817,865
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current Liabilities
Payable to Related Party	$	9,161		$	12,821
Taxes Payable	30,749			—
Other Current Liabilities	2,358			2,358
Total Current Liabilities	42,268			15,179
Amounts Due Pursuant to Tax Receivable Agreements	94,411			90,375
Long-term Debt - Notes Payable	168,612			168,347
TOTAL LIABILITIES	305,291			273,901
Stockholders' Equity
Common Stock
Class A, par value $0.01 per share (1,000,000,000 shares authorized, 65,872,014 and 62,119,904 issued at December 31, 2018 and 2017, respectively, and 39,748,576 and 39,102,154 outstanding at December 31, 2018 and 2017, respectively)	659			621
Class B, par value $0.01 per share (1,000,000 shares authorized, 86 and 82 issued and outstanding at December 31, 2018 and 2017, respectively)	—			—
Additional Paid-In-Capital	1,818,100			1,600,699
Accumulated Other Comprehensive Income (Loss)	(30,434		)	(31,411		)
Retained Earnings	364,882			79,461
Treasury Stock at Cost (26,123,438 and 23,017,750 shares at December 31, 2018 and 2017, respectively)	(1,395,087		)	(1,105,406		)
TOTAL STOCKHOLDERS' EQUITY	758,120			543,964
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,063,411		$	817,865

See notes to parent company only financial statements.

EVERCORE INC.

(parent company only)

CONDENSED STATEMENTS OF OPERATIONS



	For the Years Ended December 31,
	2018		2017		2016
REVENUES
Other Revenue, Including Interest and Investments	$	9,202	$	86,784	$	8,385
TOTAL REVENUES	9,202		86,784		8,385
Interest Expense	9,202		9,249		8,385
NET REVENUES	—		77,535		—
EXPENSES
TOTAL EXPENSES	—		—		—
OPERATING INCOME	—		77,535		—
Equity in Income of Subsidiary	473,978		287,440		209,841
Provision for Income Taxes	96,738		239,521		102,313
NET INCOME	$	377,240	$	125,454	$	107,528

See notes to parent company only financial statements.

EVERCORE INC.

(parent company only)

CONDENSED STATEMENTS OF CASH FLOWS



	For the Years Ended December 31,
	2018			2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	377,240		$	125,454		$	107,528
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Undistributed Income of Subsidiary	(473,978		)	(209,905		)	(209,841		)
Adjustment to Tax Receivable Agreement	—			(77,535		)	—
Deferred Taxes	(5,311		)	153,344			12,453
Accretion on Long-term Debt	265			250			180
(Increase) Decrease in Operating Assets:
Other Assets	9,689			(9,689		)	—
Increase (Decrease) in Operating Liabilities:
Taxes Payable	30,749			(21,341		)	6,580
Net Cash Provided by (Used in) Operating Activities	(61,346		)	(39,422		)	(83,100		)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in Subsidiary	138,648			95,943			84,658
Net Cash Provided by Investing Activities	138,648			95,943			84,658
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of Notes Payable - Mizuho	—			—			(120,000		)
Issuance of Notes Payable	—			—			170,000
Dividends	(77,302		)	(56,521		)	(51,558		)
Net Cash Provided by (Used in) Financing Activities	(77,302		)	(56,521		)	(1,558		)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	—			—			—
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of Year	—			—			—
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of Year	$	—		$	—		$	—

SUPPLEMENTAL CASH FLOW DISCLOSURE
Accrued Dividends	$	12,288		$	9,815		$	7,836

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") 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 Investment in Subsidiary and Equity in Income of Subsidiary. Equity Investment in Subsidiary includes the Company's receivable from Evercore LP for senior notes owed by Evercore LP to the Company having similar terms as described below in Note D – issuance of Notes Payable. 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, 2018, the Company has issued 65,872 Class A Shares. The Company canceled one share of Class B common stock, which was held by a limited partner of Evercore LP during the twelve months ended December 31, 2018. During 2018, the Company purchased 1,085 Class A Shares primarily from employees at values ranging from $79.47 to $115.30 per share primarily for the net settlement of stock-based compensation awards and 2,021 Class A Shares at market values ranging from $80.05 to $112.30 per share pursuant to the Company's share repurchase program. The result of these purchases was an increase in Treasury Stock of $289,681 on the Company's Statement of Financial Condition as of December 31, 2018. During the year ended December 31, 2018, the Company declared and paid dividends of $1.90 per share, totaling $77,302, which were wholly funded by the Company's sole subsidiary, Evercore LP, and accrued deferred cash dividends on unvested RSUs, totaling $12,288. Dividends are paid and treasury shares are repurchased by a subsidiary of Evercore Inc.

As discussed in Note 18 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, 2018, as discussed in Note 13 to the consolidated financial statements, the Company estimates the contractual obligations related to the Private Placement Notes to be $219,142. Pursuant to the Private Placement Notes, we expect to make payments to the notes' holders of $8,937 within one year or less, $54,947 in one to three years, $79,414 in three to five years and $75,844 after five years.

As of December 31, 2018, as discussed in Note 19 to the consolidated financial statements, the Company estimates the contractual obligations related to the Tax Receivable Agreement to be $103,572. The company expects to pay to the counterparties to the Tax Receivable Agreement $9,161 within one year or less, $19,304 in one to three years, $20,002 in three to five years and $55,105 after five years.