Evercore Inc. (NYSE: EVR):
Fourth Quarter Results
Full Year Results
U.S. GAAP
Adjusted
U.S. GAAP
Adjusted
Q4 2023
Q4 2022
Q4 2023
Q4 2022
2023
2022
2023
2022
Net Revenues ($ mm)
$
784.2
$
831.3
$
790.3
$
836.7
$
2,425.9
$
2,762.0
$
2,449.3
$
2,785.6
Operating Income ($ mm)
$
117.7
$
210.1
$
123.9
$
218.0
$
359.1
$
696.0
$
385.4
$
722.7
Net Income Attributable to Evercore Inc.
($ mm)
$
82.7
$
140.4
$
87.8
$
152.4
$
255.5
$
476.5
$
276.9
$
528.7
Diluted Earnings Per Share
$
2.03
$
3.44
$
2.02
$
3.50
$
6.37
$
11.61
$
6.46
$
12.01
Compensation Ratio
71.4
%
62.9
%
70.8
%
62.5
%
68.3
%
61.5
%
67.6
%
60.9
%
Operating Margin
15.0
%
25.3
%
15.7
%
26.1
%
14.8
%
25.2
%
15.7
%
25.9
%
Effective Tax Rate
23.1
%
27.7
%
25.3
%
28.2
%
22.0
%
24.5
%
23.4
%
24.5
%
Business and Financial
Highlights
■
Fourth Quarter and Full Year Net Revenues
were $784.2 million and $2.4 billion, respectively, on a U.S. GAAP
basis and $790.3 million and $2.4 billion, respectively, on an
Adjusted basis. Full Year 2023 Net Revenues decreased 12% on both a
U.S. GAAP and an Adjusted basis versus 2022
■
In 2023, we were involved in four of the
10 largest global deals, all of which were announced in the second
half of the year. In the fourth quarter, we advised Chevron on its
$60 billion acquisition of Hess, U.S. Steel on its sale to Nippon
Steel for $14.9 billion and NFP on its sale to Aon for $13.4
billion
■
In the early weeks of 2024, we continue to
see strong momentum as we have advised on some of the largest
strategic transactions, including Synopsys on its $35 billion
acquisition of Ansys, Global Infrastructure Partners on its sale to
BlackRock for $12.5 billion and Chesapeake Energy on its merger
with Southwestern Energy for $7.4 billion
■
Our market-leading Private Capital
Advisory and Fundraising group had a strong year driven by robust
continuation fund activity and our resilient fundraising practice.
In the fourth quarter, Evercore priced its first ever
Collateralized Fund Obligation ("CFO"), which marks the successful
addition of a new product capability for this business
■
In 2023, Evercore was a bookrunner on
nearly all of its underwritten equity offerings and was lead-left
bookrunner on a $2.2 billion offering for GE HealthCare
Technologies. Our ECM business continued to diversify across
sectors and products
■
Evercore’s Equities business had its
strongest fourth quarter revenue in the past five years
Talent
■
All of the 11 Advisory Senior Managing
Directors that committed to Evercore in 2023 have joined the
Firm
■
Since last quarter, Tammy Kiely joined in
our Technology group, focusing primarily on the semiconductor
sector
■
In January, Neil Wolitzer joined in our
Real Estate group, a sector that is a growth area for our firm
■
Promoted seven Advisory Managing Directors
and one Equities Managing Director to Senior Managing Director in
January 2024, representing our focus on developing internal
talent
Capital Return
■
Quarterly dividend of $0.76 per share
■
Returned $523.5 million to shareholders
during 2023 through dividends and repurchases of 3.0 million shares
at an average price of $129.04
Evercore Inc. (NYSE: EVR) today announced its results for the
fourth quarter and full year ended December 31, 2023.
LEADERSHIP COMMENTARY
John S. Weinberg, Chairman and Chief Executive Officer,
"As we start a new year, we continue to be encouraged by the
strengthening of market activity and our internal dialogue levels.
While 2023 presented a challenging operating environment, we
continued to invest heavily in our business and we are committed to
do so over the near and long-term."
Roger C. Altman, Founder and Senior Chairman, "We begin
2024 by having advised on three of the four largest global
transactions to date and with an exceptional group of newly
promoted and externally hired SMDs. We believe we are better
positioned than at any point in our history to gain market share
across our businesses."
Evercore's quarterly results may fluctuate significantly due to
the timing and amount of transaction 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.
Business Segments:
Evercore's business results are categorized into two segments:
Investment Banking & Equities and Investment Management.
Investment Banking & Equities includes providing advice to
clients on mergers, acquisitions, divestitures and other strategic
corporate transactions, as well as services related to securities
underwriting, private placement services and commissions for
agency-based equity trading services and equity research.
Investment Management includes Wealth Management and interests in
private equity funds which are not managed by the Company, as well
as advising third-party investors through affiliates. See pages A-2
to A-7 for further information and reconciliations of these segment
results to our U.S. GAAP consolidated results.
Non-GAAP Measures:
Throughout this release certain information is presented on an
adjusted basis, which is a non-GAAP measure. Adjusted results begin
with information prepared in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP"),
and then those results are adjusted to exclude certain items and
reflect the conversion of certain Evercore LP Units into Class A
shares. Evercore believes that the disclosed adjusted 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.
Special Charges, Including Business Realignment Costs, have been
excluded from Adjusted Net Income Attributable to Evercore Inc.
These charges in 2023 relate to the write-off of non-recoverable
assets in connection with the wind-down of the Company's operations
in Mexico.
Evercore's Adjusted Diluted Shares Outstanding for the three and
twelve months ended December 31, 2023 were higher than U.S. GAAP as
a result of the inclusion of certain Evercore LP Units and Unvested
Restricted Stock Units.
Further details of these adjustments, as well as an explanation
of similar amounts for the three and twelve months ended December
31, 2022 are included in pages A-2 to A-7.
Selected Financial Data – U.S. GAAP
Results
The following is a discussion of Evercore's consolidated results
on a U.S. GAAP basis. See pages A-4 to A-6 for our business segment
results.
Net Revenues
U.S. GAAP
Three Months Ended
Twelve Months Ended
December 31, 2023
December 31, 2022
% Change
December 31, 2023
December 31, 2022
% Change
(dollars in thousands)
Investment Banking & Equities:
Advisory Fees
$
659,338
$
703,957
(6
%)
$
1,963,857
$
2,392,990
(18
%)
Underwriting Fees
19,119
44,077
(57
%)
111,016
122,596
(9
%)
Commissions and Related Revenue
55,979
53,624
4
%
202,789
206,207
(2
%)
Investment Management:
Asset Management and Administration
Fees
17,204
15,759
9
%
67,041
64,483
4
%
Other Revenue, net
32,527
13,923
134
%
81,246
(24,228
)
NM
Net Revenues
$
784,167
$
831,340
(6
%)
$
2,425,949
$
2,762,048
(12
%)
Three Months Ended
Twelve Months Ended
December 31, 2023
December 31, 2022
% Change
December 31, 2023
December 31, 2022
% Change
Total Number of Fees from Advisory and
Underwriting Client Transactions(1)
310
279
11
%
666
651
2
%
Total Number of Fees of at Least $1
million from Advisory and Underwriting Client Transactions(1)
137
124
10
%
378
409
(8
%)
Total Number of Underwriting
Transactions(1)
7
15
(53
%)
47
49
(4
%)
Total Number of Underwriting Transactions
as a Bookrunner(1)
7
15
(53
%)
43
44
(2
%)
1. Includes Equity and Debt Underwriting
Transactions.
As of December 31,
2023
2022
% Change
Assets Under Management ($ mm)(1)
$
12,272
$
10,537
16
%
1. Assets Under Management reflect end of
period amounts from our consolidated Wealth Management
business.
Advisory Fees – Fourth quarter Advisory Fees decreased
$44.6 million, or 6%, year-over-year, and full year Advisory Fees
decreased $429.1 million, or 18%, year-over-year, reflecting a
decline in revenue earned from large transactions during 2023.
Underwriting Fees – Fourth quarter Underwriting Fees
decreased $25.0 million, or 57%, year-over-year, and full year
Underwriting Fees decreased $11.6 million, or 9%, year-over-year,
reflecting a decrease in the number of transactions we participated
in during 2023.
Commissions and Related Revenue – Fourth quarter
Commissions and Related Revenue increased $2.4 million, or 4%,
year-over-year, primarily reflecting higher trading revenues. Full
year Commissions and Related Revenue decreased $3.4 million, or 2%,
year-over-year, primarily reflecting lower trading revenues.
Asset Management and Administration Fees – Fourth quarter
Asset Management and Administration Fees increased $1.4 million, or
9%, year-over-year, driven by an increase in fees from Wealth
Management clients, as associated AUM increased 16%, primarily from
market appreciation. Full year Asset Management and Administration
Fees increased $2.6 million, or 4%, year-over-year, driven by an
increase in fees from Wealth Management clients, as associated AUM
increased 16%, primarily from market appreciation.
Other Revenue – Fourth quarter Other Revenue, net,
increased $18.6 million, or 134%, year-over-year, primarily
reflecting higher returns on our fixed income investment
portfolios, which primarily consist of U.S. treasury bills, and
higher performance of our investment funds portfolio. Full year
Other Revenue, net, increased $105.5 million year-over-year,
primarily reflecting a shift from losses of $29.8 million in 2022
to gains of $34.3 million in 2023 on our investment funds portfolio
due to overall market appreciation, as well as higher returns on
our fixed income investment portfolios, which primarily consist of
U.S. treasury bills. The investment funds portfolio is used as an
economic hedge against our deferred cash compensation program.
Expenses
U.S. GAAP
Three Months Ended
Twelve Months Ended
December 31, 2023
December 31, 2022
% Change
December 31, 2023
December 31, 2022
% Change
(dollars in thousands)
Employee Compensation and Benefits
$
559,899
$
523,019
7
%
$
1,656,875
$
1,697,519
(2
%)
Compensation Ratio
71.4
%
62.9
%
68.3
%
61.5
%
Non-Compensation Costs
$
106,579
$
95,630
11
%
$
407,018
$
365,361
11
%
Non-Compensation Ratio
13.6
%
11.5
%
16.8
%
13.2
%
Special Charges, Including Business
Realignment Costs
$
—
$
2,594
NM
$
2,921
$
3,126
(7
%)
Employee Compensation and Benefits – Fourth quarter
Employee Compensation and Benefits increased $36.9 million, or 7%,
year-over-year, reflecting a compensation ratio of 71.4% for the
fourth quarter of 2023 versus 62.9% for the prior year period. The
increase in Employee Compensation and Benefits compared to the
prior year period principally reflects higher amortization of prior
period deferred compensation awards, a higher accrual for incentive
compensation and higher base salaries. The Compensation Ratio was
impacted by lower net revenues, as described above, during the
current year period compared to the prior year period. Full year
Employee Compensation and Benefits decreased $40.6 million, or 2%,
year-over-year, reflecting a full year compensation ratio of 68.3%
versus 61.5% for the prior year period. The decrease in Employee
Compensation and Benefits compared to the prior year period
principally reflects a lower accrual for incentive compensation,
partially offset by higher amortization of prior period deferred
compensation awards and higher base salaries. The Compensation
Ratio was impacted by lower net revenues, as described above,
during the current year period compared to the prior year period.
See "Deferred Compensation" for more information.
Non-Compensation Costs – Fourth quarter Non-Compensation
Costs increased $10.9 million, or 11%, year-over-year, primarily
driven by increases in travel and related expenses, as well as
communications and information services, principally reflecting
higher research services and license fees in the fourth quarter of
2023. The increase was also attributed to the reversal of expense
in the fourth quarter of 2022 associated with the decline in the
fair value of contingent consideration owed to former equity
interest holders in our RECA business. The fourth quarter
Non-Compensation ratio of 13.6% increased from 11.5% for the prior
year period. The Non-Compensation Ratio was also impacted by lower
net revenues, as described above, during the current year period
compared to the prior year period. Full year Non-Compensation Costs
increased $41.7 million, or 11%, year-over-year, primarily driven
by increases in travel and related expenses, as well as
communications and information services, principally reflecting
higher license fees and research services in 2023. The increase was
also attributed to the reversal of expense in 2022 associated with
the decline in the fair value of contingent consideration owed to
former equity interest holders in our RECA business. The full year
Non-Compensation ratio of 16.8% increased from 13.2% for the prior
year period. The Non-Compensation Ratio was also impacted by lower
net revenues, as described above, during the current year period
compared to the prior year period.
Special Charges, Including Business Realignment Costs –
Full year 2023 Special Charges, Including Business Realignment
Costs, relate to the write-off of non-recoverable assets in
connection with the wind-down of the Company's operations in
Mexico.
Fourth quarter 2022 Special Charges, Including Business
Realignment Costs, relate to separation benefits and other charges
related to the wind-down of the Company's operations in Mexico.
Full year 2022 Special Charges, Including Business Realignment
Costs, relate to charges associated with the prepayment of the
Company's $67 million aggregate principal amount of its 5.23%
Series B senior notes, originally due March 30, 2023 (the "Series B
Notes"), during the second quarter, as well as certain professional
fees, separation benefits and other charges related to the
wind-down of the Company's operations in Mexico.
Effective Tax Rate
The fourth quarter effective tax rate was 23.1% versus 27.7% for
the prior year period. The full year effective tax rate was 22.0%
versus 24.5% for the prior year period. The effective tax rate for
the year is principally impacted by the deduction associated with
the appreciation in the Firm's share price upon vesting of employee
share-based awards above the original grant price. The full year
provision for income taxes for 2023 reflects an additional tax
benefit of $13.7 million versus $19.6 million for the prior year
period, due to the net impact associated with the appreciation in
our share price upon vesting of employee share-based awards above
the original grant price.
Selected Financial Data – Adjusted
Results
The following is a discussion of Evercore's consolidated results
on an Adjusted basis. See pages 3 and A-2 to A-7 for further
information and reconciliations of these metrics to our U.S. GAAP
results. See pages A-4 to A-6 for our business segment results.
Adjusted Net Revenues
Adjusted
Three Months Ended
Twelve Months Ended
December 31, 2023
December 31, 2022
% Change
December 31, 2023
December 31, 2022
% Change
(dollars in thousands)
Investment Banking & Equities:
Advisory Fees(1)
$
659,564
$
704,185
(6
%)
$
1,964,477
$
2,394,207
(18
%)
Underwriting Fees
19,119
44,077
(57
%)
111,016
122,596
(9
%)
Commissions and Related Revenue
55,979
53,624
4
%
202,789
206,207
(2
%)
Investment Management:
Asset Management and Administration
Fees(2)
18,959
16,717
13
%
73,076
71,265
3
%
Other Revenue, net
36,708
18,077
103
%
97,963
(8,672
)
NM
Net Revenues
$
790,329
$
836,680
(6
%)
$
2,449,321
$
2,785,603
(12
%)
1.
Advisory Fees on an Adjusted basis reflect
the reclassification of earnings related to our equity method
investments in Luminis and Seneca Evercore of $0.2 million and $0.6
million for the three and twelve months ended December 31, 2023,
respectively, and $0.2 million and $1.2 million for the three and
twelve months ended December 31, 2022, respectively.
2.
Asset Management and Administration Fees
on an Adjusted basis reflect the reclassification of earnings
related to our equity method investments in Atalanta Sosnoff and
ABS of $1.8 million and $6.0 million for the three and twelve
months ended December 31, 2023, respectively, and $1.0 million and
$6.8 million for the three and twelve months ended December 31,
2022, respectively.
See page 4 for additional business metrics.
Advisory Fees – Fourth quarter adjusted Advisory Fees
decreased $44.6 million, or 6%, year-over-year, and full year
adjusted Advisory Fees decreased $429.7 million, or 18%,
year-over-year, reflecting a decline in revenue earned from large
transactions during 2023.
Underwriting Fees – Fourth quarter Underwriting Fees
decreased $25.0 million, or 57%, year-over-year, and full year
Underwriting Fees decreased $11.6 million, or 9%, year-over-year,
reflecting a decrease in the number of transactions we participated
in during 2023.
Commissions and Related Revenue – Fourth quarter
Commissions and Related Revenue increased $2.4 million, or 4%,
year-over-year, primarily reflecting higher trading revenues. Full
year Commissions and Related Revenue decreased $3.4 million, or 2%,
year-over-year, primarily reflecting lower trading revenues.
Asset Management and Administration Fees – Fourth quarter
adjusted Asset Management and Administration Fees increased $2.2
million, or 13%, year-over-year, primarily driven by an increase in
fees from Wealth Management clients, as associated AUM increased
16%, primarily from market appreciation. The increase was also
driven by an 83% increase in equity in earnings of affiliates. Full
year adjusted Asset Management and Administration Fees increased
$1.8 million, or 3%, year-over-year, primarily driven by an
increase in fees from Wealth Management clients, as associated AUM
increased 16%, primarily from market appreciation. This was
partially offset by an 11% decrease in equity in earnings of
affiliates.
Other Revenue – Fourth quarter adjusted Other Revenue,
net, increased $18.6 million, or 103%, year-over-year, primarily
reflecting higher returns on our fixed income investment
portfolios, which primarily consist of U.S. treasury bills, and
higher performance of our investment funds portfolio. Full year
adjusted Other Revenue, net, increased $106.6 million
year-over-year, primarily reflecting a shift from losses of $29.8
million in 2022 to gains of $34.3 million in 2023 on our investment
funds portfolio due to overall market appreciation, as well as
higher returns on our fixed income investment portfolios, which
primarily consist of U.S. treasury bills. The investment funds
portfolio is used as an economic hedge against our deferred cash
compensation program.
Adjusted Expenses
Adjusted
Three Months Ended
Twelve Months Ended
December 31, 2023
December 31, 2022
% Change
December 31, 2023
December 31, 2022
% Change
(dollars in thousands)
Employee Compensation and Benefits
$
559,899
$
523,019
7
%
$
1,656,875
$
1,697,519
(2
%)
Compensation Ratio
70.8
%
62.5
%
67.6
%
60.9
%
Non-Compensation Costs
$
106,579
$
95,630
11
%
$
407,018
$
365,361
11
%
Non-Compensation Ratio
13.5
%
11.4
%
16.6
%
13.1
%
Employee Compensation and Benefits – Fourth quarter
adjusted Employee Compensation and Benefits increased $36.9
million, or 7%, year-over-year, reflecting an adjusted compensation
ratio of 70.8% for the fourth quarter of 2023 versus 62.5% for the
prior year period. The increase in adjusted Employee Compensation
and Benefits compared to the prior year period principally reflects
higher amortization of prior period deferred compensation awards, a
higher accrual for incentive compensation and higher base salaries.
The adjusted Compensation Ratio was impacted by lower net revenues,
as described above, during the current year period compared to the
prior year period. Full year adjusted Employee Compensation and
Benefits decreased $40.6 million, or 2%, year-over-year, reflecting
a full year adjusted compensation ratio of 67.6% versus 60.9% for
the prior year period. The decrease in adjusted Employee
Compensation and Benefits compared to the prior year period
principally reflects a lower accrual for incentive compensation,
partially offset by higher amortization of prior period deferred
compensation awards and higher base salaries. The adjusted
Compensation Ratio was impacted by lower net revenues, as described
above, during the current year period compared to the prior year
period. See "Deferred Compensation" for more information.
Non-Compensation Costs – Fourth quarter adjusted
Non-Compensation Costs increased $10.9 million, or 11%,
year-over-year, primarily driven by increases in travel and related
expenses, as well as communications and information services,
principally reflecting higher research services and license fees in
the fourth quarter of 2023. The increase was also attributed to the
reversal of expense in the fourth quarter of 2022 associated with
the decline in the fair value of contingent consideration owed to
former equity interest holders in our RECA business. The fourth
quarter adjusted Non-Compensation ratio of 13.5% increased from
11.4% for the prior year period. The adjusted Non-Compensation
Ratio was also impacted by lower net revenues, as described above,
during the current year period compared to the prior year period.
Full year adjusted Non-Compensation Costs increased $41.7 million,
or 11%, year-over-year, primarily driven by increases in travel and
related expenses, as well as communications and information
services, principally reflecting higher license fees and research
services in 2023. The increase was also attributed to the reversal
of expense in 2022 associated with the decline in fair value of
contingent consideration owed to former equity interest holders in
our RECA business. The full year adjusted Non-Compensation ratio of
16.6% increased from 13.1% for the prior year period. The adjusted
Non-Compensation Ratio was also impacted by lower net revenues, as
described above, during the current year period compared to the
prior year period.
Adjusted Effective Tax Rate
The fourth quarter adjusted effective tax rate was 25.3% versus
28.2% for the prior year period. The full year adjusted effective
tax rate was 23.4% versus 24.5% for the prior year period. The
adjusted effective tax rate for the year is principally impacted by
the deduction associated with the appreciation in the Firm's share
price upon vesting of employee share-based awards above the
original grant price. The full year adjusted provision for income
taxes for 2023 reflects an additional tax benefit of $14.8 million
versus $20.2 million for the prior year period, due to the net
impact associated with the appreciation in our share price upon
vesting of employee share-based awards above the original grant
price.
Liquidity
The Company continues to maintain a strong balance sheet. As of
December 31, 2023, cash and cash equivalents were $596.9 million,
investment securities and certificates of deposit were $1.4 billion
and current assets exceeded current liabilities by $1.7 billion.
Amounts due related to the Notes Payable were $373.9 million at
December 31, 2023.
Headcount
As of December 31, 2023 and 2022, the Company employed
approximately 2,195 and 2,120 people, respectively, worldwide.
As of December 31, 2023 and 2022, the Company employed 174(1)
and 169(2) total Senior Managing Directors, respectively, in its
Investment Banking & Equities segment, of which 136(1) and
130(2), respectively, were Advisory Senior Managing Directors.
(1)
Senior Managing Director headcount as of
December 31, 2023, adjusted to include one additional Advisory
Senior Managing Director that joined in January 2024.
(2)
Senior Managing Director headcount as of
December 31, 2022, adjusted to include one additional Advisory
Senior Managing Director that joined in the first quarter of
2023.
Deferred Compensation
During 2023, the Company granted to certain employees 2.5
million unvested restricted stock units ("RSUs") (which were
primarily granted in conjunction with the 2022 bonus awards) with a
grant date fair value of $338.4 million.
In addition, during 2023, the Company granted $163 million of
deferred cash awards to certain employees, related to our deferred
cash compensation program, principally pursuant to 2022 bonus
awards.
The Company recognized compensation expense related to RSUs and
our deferred cash compensation program of $103.6 million and $439.1
million for the three and twelve months ended December 31, 2023,
respectively, and $87.8 million and $369.4 million for the three
and twelve months ended December 31, 2022, respectively.
As of December 31, 2023, the Company had 5.7 million unvested
RSUs with an aggregate grant date fair value of $709.7 million.
RSUs are expensed over the service period of the award, subject to
retirement eligibility, and generally vest over four years.
As of December 31, 2023, the Company expects to pay an aggregate
of $366.9 million related to our deferred cash compensation program
at various dates through 2027, subject to certain vesting events.
Amounts due pursuant to this program are expensed over the service
period of the award, subject to retirement eligibility, and are
reflected in Accrued Compensation and Benefits, a component of
current liabilities.
Capital Return
Transactions
On January 30, 2024, the Board of Directors of Evercore declared
a quarterly dividend of $0.76 per share to be paid on March 8, 2024
to common stockholders of record on February 23, 2024.
During the fourth quarter, the Company repurchased 16 thousand
shares from employees for the net settlement of stock-based
compensation awards at an average price per share of $143.17.
During 2023, the Company repurchased 1.0 million shares from
employees for the net settlement of stock-based compensation awards
at an average price per share of $131.53, and 2.0 million shares at
an average price per share of $127.85 in open market transactions
pursuant to the Company's share repurchase program. The aggregate
3.0 million shares were acquired at an average price per share of
$129.04.
Conference Call
Evercore will host a related conference call beginning at 8:00
a.m. Eastern Time, Wednesday, January 31, 2024, accessible via
telephone and webcast. Investors and analysts may participate in
the live conference call by dialing (800) 274-8461 (toll-free
domestic) or (203) 518-9814 (international); passcode: EVRQ423.
Please register at least 10 minutes before the conference call
begins.
A live audio webcast of the conference call will be available on
the For Investors section of Evercore’s website at
www.evercore.com. The webcast will be archived on Evercore’s
website for 30 days.
About Evercore
Evercore (NYSE: EVR) is a premier global independent investment
banking advisory firm. We are dedicated to helping our clients
achieve superior results through trusted independent and innovative
advice on matters of strategic significance to boards of directors,
management teams and shareholders, including mergers and
acquisitions, strategic shareholder advisory, restructurings, and
capital structure. Evercore also assists clients in raising public
and private capital and delivers equity research and equity sales
and agency trading execution, in addition to providing wealth and
investment management services to high net worth and institutional
investors. Founded in 1995, the Firm is headquartered in New York
and maintains offices and affiliate offices in major financial
centers in the Americas, Europe, the Middle East and Asia. For more
information, please visit www.evercore.com.
Basis of Alternative Financial
Statement Presentation
Our Adjusted results are a non-GAAP measure. As discussed
further under "Non-GAAP Measures", Evercore believes that the
disclosed Adjusted 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 reflects how management views its 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 our U.S. GAAP
results to Adjusted results is presented in the tables included in
the following pages.
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," "backlog," "believes," "expects," "potential,"
"probable," "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 release 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, 2022, subsequent quarterly reports on Form 10-Q, current
reports on Form 8-K and Registration Statements. 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.
EVERCORE INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
THREE AND TWELVE MONTHS ENDED
DECEMBER 31, 2023 AND 2022
(dollars in thousands, except per
share data)
(UNAUDITED)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Revenues
Investment Banking & Equities:
Advisory Fees
$
659,338
$
703,957
$
1,963,857
$
2,392,990
Underwriting Fees
19,119
44,077
111,016
122,596
Commissions and Related Revenue
55,979
53,624
202,789
206,207
Asset Management and Administration
Fees
17,204
15,759
67,041
64,483
Other Revenue, Including Interest and
Investments
36,708
18,077
97,963
(7,378
)
Total Revenues
788,348
835,494
2,442,666
2,778,898
Interest Expense(1)
4,181
4,154
16,717
16,850
Net Revenues
784,167
831,340
2,425,949
2,762,048
Expenses
Employee Compensation and Benefits
559,899
523,019
1,656,875
1,697,519
Occupancy and Equipment Rental
20,335
19,972
84,329
78,437
Professional Fees
28,809
27,081
108,801
108,288
Travel and Related Expenses
18,437
14,709
64,527
50,183
Communications and Information
Services
19,597
16,897
71,603
62,642
Depreciation and Amortization
5,975
6,941
24,348
27,713
Execution, Clearing and Custody Fees
3,430
2,539
12,275
10,345
Special Charges, Including Business
Realignment Costs
—
2,594
2,921
3,126
Other Operating Expenses
9,996
7,491
41,135
27,753
Total Expenses
666,478
621,243
2,066,814
2,066,006
Income Before Income from Equity Method
Investments and Income Taxes
117,689
210,097
359,135
696,042
Income from Equity Method Investments
1,981
1,186
6,655
7,999
Income Before Income Taxes
119,670
211,283
365,790
704,041
Provision for Income Taxes
27,622
58,492
80,567
172,626
Net Income
92,048
152,791
285,223
531,415
Net Income Attributable to Noncontrolling
Interest
9,300
12,352
29,744
54,895
Net Income Attributable to Evercore
Inc.
$
82,748
$
140,439
$
255,479
$
476,520
Net Income Attributable to Evercore
Inc. Common Shareholders
$
82,748
$
140,439
$
255,479
$
476,520
Weighted Average Shares of Class A
Common Stock Outstanding:
Basic
37,871
38,777
38,101
39,224
Diluted
40,679
40,841
40,099
41,037
Net Income Per Share Attributable to
Evercore Inc. Common Shareholders:
Basic
$
2.18
$
3.62
$
6.71
$
12.15
Diluted
$
2.03
$
3.44
$
6.37
$
11.61
(1) Includes interest expense on long-term debt.
Adjusted Results
Throughout the discussion of Evercore's business and elsewhere
in this release, information is presented on an Adjusted basis,
which is a non-generally accepted accounting principles
("non-GAAP") measure. Adjusted 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 certain
Evercore LP Units, as well as Unvested Restricted Stock Units, into
Class A shares. Evercore believes that the disclosed Adjusted
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 amounts are allocated to the Company's two business
segments: Investment Banking & Equities and Investment
Management. The differences between the Adjusted and U.S. GAAP
results are as follows:
- Assumed Exchange of Evercore LP Units
into Class A Shares. The Adjusted results assume
substantially all Evercore LP Units have been exchanged for Class A
shares. Accordingly, the noncontrolling interest related to these
units is converted to a controlling interest. The Company's
management believes that it is useful to provide the per-share
effect associated with the assumed conversion of substantially all
of these previously granted equity interests and IPO related
restricted stock units, and thus the Adjusted results reflect their
exchange into Class A shares.
- Adjustments Associated with Business
Combinations and Divestitures. The following charges
resulting from business combinations and divestitures have been
excluded from the Adjusted results because the Company's Management
believes that operating performance is more comparable across
periods excluding the effects of these charges:
- Gain on Sale of Interests in ABS.
The gain on the sale of a portion of the Company's interests in ABS
in the first quarter of 2022 is excluded from the Adjusted
presentation.
- Special Charges, Including Business
Realignment Costs. Expenses during 2023 that are excluded
from the Adjusted presentation relate to the write-off of
non-recoverable assets in connection with the wind-down of the
Company's operations in Mexico. Expenses during 2022 that are
excluded from the Adjusted presentation relate to charges
associated with the prepayment of the Company's Series B Notes
during the second quarter, as well as certain professional fees,
separation benefits and other charges related to the wind-down of
the Company's operations in Mexico.
- Income Taxes. Evercore is
organized as a series of Limited Liability Companies, Partnerships,
C-Corporations and a Public Corporation in the U.S. as the ultimate
parent. Certain of the subsidiaries, particularly Evercore LP, have
noncontrolling interests held by management or former members of
management. As a result, not all of the Company’s income is subject
to corporate level taxes and certain other state and local taxes
are levied. The assumption in the Adjusted earnings presentation is
that substantially all of the noncontrolling interest is eliminated
through the exchange of Evercore LP units into Class A common stock
of the ultimate parent. As a result, the Adjusted earnings
presentation assumes that the allocation of earnings to Evercore
LP’s noncontrolling interest holders is substantially eliminated
and is therefore subject to statutory tax rates of a C-Corporation
under a conventional tax structure in the U.S. and that certain
state and local taxes are reduced accordingly.
- Presentation of Interest Expense.
The Adjusted results present Adjusted Investment Banking &
Equities Operating Income before interest expense on debt, which is
included in interest expense on a U.S. GAAP basis.
- Presentation of Income from Equity Method
Investments. The Adjusted results present Income from Equity
Method Investments within Revenue as the Company's Management
believes it is a useful presentation.
EVERCORE INC.
U.S. GAAP RECONCILIATION TO
ADJUSTED RESULTS
(dollars in thousands, except per
share data)
(UNAUDITED)
Three Months Ended
Twelve Months Ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Net Revenues - U.S. GAAP
$
784,167
$
831,340
$
2,425,949
$
2,762,048
Income from Equity Method Investments
(1)
1,981
1,186
6,655
7,999
Interest Expense on Debt (2)
4,181
4,154
16,717
16,850
Gain on Sale of Interests in ABS (3)
—
—
—
(1,294
)
Net Revenues - Adjusted
$
790,329
$
836,680
$
2,449,321
$
2,785,603
Other Revenue, net - U.S. GAAP
$
32,527
$
13,923
$
81,246
$
(24,228
)
Interest Expense on Debt (2)
4,181
4,154
16,717
16,850
Gain on Sale of Interests in ABS (3)
—
—
—
(1,294
)
Other Revenue, net - Adjusted
$
36,708
$
18,077
$
97,963
$
(8,672
)
Operating Income - U.S. GAAP
$
117,689
$
210,097
$
359,135
$
696,042
Income from Equity Method Investments
(1)
1,981
1,186
6,655
7,999
Pre-Tax Income - U.S. GAAP
119,670
211,283
365,790
704,041
Gain on Sale of Interests in ABS (3)
—
—
—
(1,294
)
Special Charges, Including Business
Realignment Costs (4)
—
2,594
2,921
3,126
Pre-Tax Income - Adjusted
119,670
213,877
368,711
705,873
Interest Expense on Debt (2)
4,181
4,154
16,717
16,850
Operating Income - Adjusted
$
123,851
$
218,031
$
385,428
$
722,723
Provision for Income Taxes - U.S.
GAAP
$
27,622
$
58,492
$
80,567
$
172,626
Income Taxes (5)
2,624
1,913
5,739
108
Provision for Income Taxes -
Adjusted
$
30,246
$
60,405
$
86,306
$
172,734
Net Income Attributable to Evercore
Inc. - U.S. GAAP
$
82,748
$
140,439
$
255,479
$
476,520
Gain on Sale of Interests in ABS (3)
—
—
—
(1,294
)
Special Charges, Including Business
Realignment Costs (4)
—
2,594
2,921
3,126
Income Taxes (5)
(2,624
)
(1,913
)
(5,739
)
(108
)
Noncontrolling Interest (6)
7,700
11,307
24,263
50,502
Net Income Attributable to Evercore
Inc. - Adjusted
$
87,824
$
152,427
$
276,924
$
528,746
Diluted Shares Outstanding - U.S.
GAAP
40,679
40,841
40,099
41,037
LP Units (7)
2,715
2,650
2,769
2,970
Unvested Restricted Stock Units - Event
Based (7)
12
12
12
12
Diluted Shares Outstanding -
Adjusted
43,406
43,503
42,880
44,019
Key Metrics: (a)
Diluted Earnings Per Share - U.S. GAAP
$
2.03
$
3.44
$
6.37
$
11.61
Diluted Earnings Per Share - Adjusted
$
2.02
$
3.50
$
6.46
$
12.01
Operating Margin - U.S. GAAP
15.0
%
25.3
%
14.8
%
25.2
%
Operating Margin - Adjusted
15.7
%
26.1
%
15.7
%
25.9
%
Effective Tax Rate - U.S. GAAP
23.1
%
27.7
%
22.0
%
24.5
%
Effective Tax Rate - Adjusted
25.3
%
28.2
%
23.4
%
24.5
%
(a) Reconciliations of the key metrics
from U.S. GAAP to Adjusted results are a derivative of the
reconciliations of their components above.
EVERCORE INC.
U.S. GAAP SEGMENT
RECONCILIATION TO ADJUSTED RESULTS
FOR THE THREE AND TWELVE
MONTHS ENDED DECEMBER 31, 2023
(dollars in thousands)
(UNAUDITED)
Investment Banking &
Equities Segment
Three Months Ended December
31, 2023
Twelve Months Ended December
31, 2023
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
659,338
$
226
(1)
$
659,564
$
1,963,857
$
620
(1)
$
1,964,477
Underwriting Fees
19,119
—
19,119
111,016
—
111,016
Commissions and Related Revenue
55,979
—
55,979
202,789
—
202,789
Other Revenue, net
31,809
4,181
(2)
35,990
78,281
16,717
(2)
94,998
Net Revenues
766,245
4,407
770,652
2,355,943
17,337
2,373,280
Expenses:
Employee Compensation and Benefits
550,763
—
550,763
1,617,449
—
1,617,449
Non-Compensation Costs
103,141
—
103,141
393,308
—
393,308
Special Charges, Including Business
Realignment Costs
—
—
—
2,921
(2,921
)
(4)
—
Total Expenses
653,904
—
653,904
2,013,678
(2,921
)
2,010,757
Operating Income (a)
$
112,341
$
4,407
$
116,748
$
342,265
$
20,258
$
362,523
Compensation Ratio (b)
71.9
%
71.5
%
68.7
%
68.2
%
Operating Margin (b)
14.7
%
15.1
%
14.5
%
15.3
%
Investment Management
Segment
Three Months Ended December
31, 2023
Twelve Months Ended December
31, 2023
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
Net Revenues:
Asset Management and Administration
Fees
$
17,204
$
1,755
(1)
$
18,959
$
67,041
$
6,035
(1)
$
73,076
Other Revenue, net
718
—
718
2,965
—
2,965
Net Revenues
17,922
1,755
19,677
70,006
6,035
76,041
Expenses:
Employee Compensation and Benefits
9,136
—
9,136
39,426
—
39,426
Non-Compensation Costs
3,438
—
3,438
13,710
—
13,710
Total Expenses
12,574
—
12,574
53,136
—
53,136
Operating Income (a)
$
5,348
$
1,755
$
7,103
$
16,870
$
6,035
$
22,905
Compensation Ratio (b)
51.0
%
46.4
%
56.3
%
51.8
%
Operating Margin (b)
29.8
%
36.1
%
24.1
%
30.1
%
(a) Operating Income for U.S. GAAP
excludes Income (Loss) from Equity Method Investments.
(b) Reconciliations of the key metrics
from U.S. GAAP to Adjusted results are a derivative of the
reconciliations of their components above.
EVERCORE INC.
U.S. GAAP SEGMENT
RECONCILIATION TO ADJUSTED RESULTS
FOR THE THREE AND TWELVE
MONTHS ENDED DECEMBER 31, 2022
(dollars in thousands)
(UNAUDITED)
Investment Banking &
Equities Segment
Three Months Ended December
31, 2022
Twelve Months Ended December
31, 2022
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
703,957
$
228
(1)
$
704,185
$
2,392,990
$
1,217
(1)
$
2,394,207
Underwriting Fees
44,077
—
44,077
122,596
—
122,596
Commissions and Related Revenue
53,624
—
53,624
206,207
—
206,207
Other Revenue, net
14,398
4,154
(2)
18,552
(25,668
)
16,850
(2)
(8,818
)
Net Revenues
816,056
4,382
820,438
2,696,125
18,067
2,714,192
Expenses:
Employee Compensation and Benefits
513,070
—
513,070
1,658,076
—
1,658,076
Non-Compensation Costs
92,132
—
92,132
351,837
—
351,837
Special Charges, Including Business
Realignment Costs
2,594
(2,594
)
(4)
—
3,126
(3,126
)
(4)
—
Total Expenses
607,796
(2,594
)
605,202
2,013,039
(3,126
)
2,009,913
Operating Income (a)
$
208,260
$
6,976
$
215,236
$
683,086
$
21,193
$
704,279
Compensation Ratio (b)
62.9
%
62.5
%
61.5
%
61.1
%
Operating Margin (b)
25.5
%
26.2
%
25.3
%
25.9
%
Investment Management
Segment
Three Months Ended December
31, 2022
Twelve Months Ended December
31, 2022
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
Net Revenues:
Asset Management and Administration
Fees
$
15,759
$
958
(1)
$
16,717
$
64,483
$
6,782
(1)
$
71,265
Other Revenue, net
(475
)
—
(475
)
1,440
(1,294
)
(3)
146
Net Revenues
15,284
958
16,242
65,923
5,488
71,411
Expenses:
Employee Compensation and Benefits
9,949
—
9,949
39,443
—
39,443
Non-Compensation Costs
3,498
—
3,498
13,524
—
13,524
Total Expenses
13,447
—
13,447
52,967
—
52,967
Operating Income (a)
$
1,837
$
958
$
2,795
$
12,956
$
5,488
$
18,444
Compensation Ratio (b)
65.1
%
61.3
%
59.8
%
55.2
%
Operating Margin (b)
12.0
%
17.2
%
19.7
%
25.8
%
(a) Operating Income for U.S. GAAP
excludes Income (Loss) from Equity Method Investments.
(b) Reconciliations of the key metrics
from U.S. GAAP to Adjusted results are a derivative of the
reconciliations of their components above.
EVERCORE INC.
U.S. GAAP SEGMENT AND
CONSOLIDATED RESULTS
(dollars in thousands)
(UNAUDITED)
U.S. GAAP
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Investment Banking &
Equities
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
659,338
$
703,957
$
1,963,857
$
2,392,990
Underwriting Fees
19,119
44,077
111,016
122,596
Commissions and Related Revenue
55,979
53,624
202,789
206,207
Other Revenue, net
31,809
14,398
78,281
(25,668
)
Net Revenues
766,245
816,056
2,355,943
2,696,125
Expenses:
Employee Compensation and Benefits
550,763
513,070
1,617,449
1,658,076
Non-Compensation Costs
103,141
92,132
393,308
351,837
Special Charges, Including Business
Realignment Costs
—
2,594
2,921
3,126
Total Expenses
653,904
607,796
2,013,678
2,013,039
Operating Income (a)
$
112,341
$
208,260
$
342,265
$
683,086
Investment Management
Net Revenues:
Asset Management and Administration
Fees
$
17,204
$
15,759
$
67,041
$
64,483
Other Revenue, net
718
(475
)
2,965
1,440
Net Revenues
17,922
15,284
70,006
65,923
Expenses:
Employee Compensation and Benefits
9,136
9,949
39,426
39,443
Non-Compensation Costs
3,438
3,498
13,710
13,524
Total Expenses
12,574
13,447
53,136
52,967
Operating Income (a)
$
5,348
$
1,837
$
16,870
$
12,956
Total
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
659,338
$
703,957
$
1,963,857
$
2,392,990
Underwriting Fees
19,119
44,077
111,016
122,596
Commissions and Related Revenue
55,979
53,624
202,789
206,207
Asset Management and Administration
Fees
17,204
15,759
67,041
64,483
Other Revenue, net
32,527
13,923
81,246
(24,228
)
Net Revenues
784,167
831,340
2,425,949
2,762,048
Expenses:
Employee Compensation and Benefits
559,899
523,019
1,656,875
1,697,519
Non-Compensation Costs
106,579
95,630
407,018
365,361
Special Charges, Including Business
Realignment Costs
—
2,594
2,921
3,126
Total Expenses
666,478
621,243
2,066,814
2,066,006
Operating Income (a)
$
117,689
$
210,097
$
359,135
$
696,042
(a) Operating Income excludes Income
(Loss) from Equity Method Investments.
Notes to Unaudited Condensed Consolidated Adjusted Financial
Data
For further information on these adjustments, see page A-2.
(1)
Income (Loss) from Equity Method
Investments has been reclassified to Revenue in the Adjusted
presentation.
(2)
Interest Expense on Debt is excluded from
Net Revenues and presented below Operating Income in the Adjusted
results and is included in Interest Expense on a U.S. GAAP
basis.
(3)
The gain on the sale of a portion of the
Company's interests in ABS in the first quarter of 2022 is excluded
from the Adjusted presentation.
(4)
Expenses during 2023 that are excluded
from the Adjusted presentation relate to the write-off of
non-recoverable assets in connection with the wind-down of the
Company's operations in Mexico. Expenses during 2022 that are
excluded from the Adjusted presentation relate to charges
associated with the prepayment of the Company's Series B Notes
during the second quarter, as well as certain professional fees,
separation benefits and other charges related to the wind-down of
the Company's operations in Mexico.
(5)
Evercore is organized as a series of
Limited Liability Companies, Partnerships, C-Corporations and a
Public Corporation in the U.S. as the ultimate parent. Certain of
the subsidiaries, particularly Evercore LP, have noncontrolling
interests held by management or former members of management. As a
result, not all of the Company’s income is subject to corporate
level taxes and certain other state and local taxes are levied. The
assumption in the Adjusted earnings presentation is that
substantially all of the noncontrolling interest is eliminated
through the exchange of Evercore LP units into Class A common stock
of the ultimate parent. As a result, the Adjusted earnings
presentation assumes that the allocation of earnings to Evercore
LP’s noncontrolling interest holders is substantially eliminated
and is therefore subject to statutory tax rates of a C-Corporation
under a conventional tax structure in the U.S. and that certain
state and local taxes are reduced accordingly.
(6)
Reflects an adjustment to eliminate
noncontrolling interest related to substantially all Evercore LP
partnership units which are assumed to be converted to Class A
common stock in the Adjusted presentation.
(7)
Assumes the exchange into Class A shares
of substantially all Evercore LP Units and IPO related restricted
stock unit awards in the Adjusted presentation. In the computation
of outstanding common stock equivalents for U.S. GAAP net income
per share, the Evercore LP Units are anti-dilutive.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240130128466/en/
Investor Contact: Katy Haber Head of Investor Relations
& ESG InvestorRelations@Evercore.com
Media Contacts: Jamie Easton Head of Communications &
External Affairs Communications@Evercore.com
Shree Dhond / Zach Kouwe Dukas Linden Public Relations
Evercore@DLPR.com (646) 722-6531
Evercore (NYSE:EVR)
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Evercore (NYSE:EVR)
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