Evercore Inc. (NYSE: EVR):
First Quarter Results
U.S. GAAP
Adjusted
Q1 2024
Q1 2023
Q1 2024
Q1 2023
Net Revenues ($ mm)
$
580.8
$
572.1
$
587.3
$
577.8
Operating Income ($ mm)
$
84.1
$
106.9
$
90.6
$
115.5
Net Income Attributable to Evercore Inc.
($ mm)
$
85.7
$
83.4
$
92.9
$
93.3
Diluted Earnings Per Share
$
2.09
$
2.06
$
2.13
$
2.16
Compensation Ratio
66.8
%
64.1
%
66.0
%
63.5
%
Operating Margin
14.5
%
18.7
%
15.4
%
20.0
%
Effective Tax Rate
(7.7
%)
14.9
%
(9.3
%)
15.2
%
Business and Financial
Highlights
■
First Quarter Net Revenues of $580.8
million on a U.S. GAAP basis and $587.3 million on an Adjusted
basis increased 2% on both a U.S. GAAP and an Adjusted basis versus
First Quarter 2023
■
In the first quarter, we advised on five
of the 15 largest global transactions, including:
■
General Electric on its $37 billion
spin-off of GE Vernova
■
Synopsys on its acquisition of Ansys for
$35 billion
■
Clayton Dubilier & Rice on its
acquisition, alongside Stone Point Capital, of Truist Insurance
from Truist Financial for $15.5 billion
■
Global Infrastructure Partners on its sale
to BlackRock for $12.5 billion
■
Chesapeake Energy on its combination with
Southwestern Energy for $11.3 billion
■
Our Underwriting business gained momentum
in the quarter with its strongest quarterly revenue since the
fourth quarter of 2021 as the equity capital markets experienced
stronger activity levels, particularly amongst IPOs
■
Our Private Capital Advisory, Private
Funds Group and Real Estate Strategic Advisory teams received
multiple awards in the quarter from several publications, including
Private Equity International, Private Debt Investor, Infrastructure
Investor and Private Equity Real Estate, showcasing Evercore’s
expertise in the space
Talent
■
One Investment Banking Senior Managing
Director is committed to join Evercore in the second quarter,
covering the asset and wealth management sector
■
Three Equities Senior Managing Directors
joined Evercore in the first quarter and in April; Sarah Bianchi,
as Chief Strategist of International Political Affairs and Public
Policy; Marcelo Pizzimbono, as Head of Sales; and Mark Lipacis, to
lead research coverage of Semiconductor and Capital Equipment
companies
Capital Return
■
Increased quarterly dividend 5% to $0.80
per share
■
Returned $308.5 million to shareholders
during the quarter through dividends and repurchases of 1.5 million
shares at an average price of $177.04
Evercore Inc. (NYSE: EVR) today announced its results for the
first quarter ended March 31, 2024.
LEADERSHIP COMMENTARY
John S. Weinberg, Chairman and Chief Executive Officer,
"We begin 2024 on a strong note, having advised on some of the
largest announced transactions year-to-date and we expect our
activities to continue to build through the year. We are
experiencing momentum in our businesses, and believe we are
well-positioned to serve our clients as the environment continues
to improve."
Roger C. Altman, Founder and Senior Chairman, "Evercore
ended the first quarter ranked #4, among all firms, in the global
league tables. That is one of the best starts we have ever had. And
this market position reflects the steady expansion of the Firm and
further broadening of our platform."
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.
Evercore's Adjusted Diluted Shares Outstanding for the three
months ended March 31, 2024 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 months ended March 31, 2023 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
March 31, 2024
March 31, 2023
% Change
(dollars in thousands)
Investment Banking & Equities:
Advisory Fees
$
429,838
$
462,562
(7
%)
Underwriting Fees
55,535
22,883
143
%
Commissions and Related Revenue
48,238
48,065
—
%
Investment Management:
Asset Management and Administration
Fees
18,699
15,958
17
%
Other Revenue, net
28,505
22,675
26
%
Net Revenues
$
580,815
$
572,143
2
%
Three Months Ended
March 31, 2024
March 31, 2023
% Change
Total Number of Fees from Advisory and
Underwriting Client Transactions(1)
227
217
5
%
Total Number of Fees of at Least $1
million from Advisory and Underwriting Client Transactions(1)
91
78
17
%
Total Number of Underwriting
Transactions(1)
19
14
36
%
Total Number of Underwriting Transactions
as a Bookrunner(1)
16
12
33
%
1. Includes Equity and Debt Underwriting Transactions.
As of March 31,
2024
2023
% Change
Assets Under Management ($ mm)(1)
$
12,999
$
11,017
18
%
1. Assets Under Management reflect end of period amounts from
our consolidated Wealth Management business.
Advisory Fees – First quarter Advisory Fees decreased
$32.7 million, or 7%, year-over-year, reflecting a decline in
revenue earned from large transactions during the first quarter of
2024.
Underwriting Fees – First quarter Underwriting Fees
increased $32.7 million, or 143%, year-over-year, reflecting an
increase in the number of transactions we participated in during
the first quarter of 2024.
Commissions and Related Revenue – First quarter
Commissions and Related Revenue increased $0.2 million
year-over-year, primarily reflecting higher subscription fees,
partially offset by lower trading commissions.
Asset Management and Administration Fees – First quarter
Asset Management and Administration Fees increased $2.7 million, or
17%, year-over-year, driven by an increase in fees from Wealth
Management clients, as associated AUM increased 18%, primarily from
market appreciation.
Other Revenue – First quarter Other Revenue, net,
increased $5.8 million, or 26%, year-over-year, primarily
reflecting higher performance of 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
March 31, 2024
March 31, 2023
% Change
(dollars in thousands)
Employee Compensation and Benefits
$
387,705
$
366,872
6
%
Compensation Ratio
66.8
%
64.1
%
Non-Compensation Costs
$
108,990
$
95,446
14
%
Non-Compensation Ratio
18.8
%
16.7
%
Special Charges, Including Business
Realignment Costs
$
—
$
2,921
NM
Employee Compensation and Benefits – First quarter
Employee Compensation and Benefits increased $20.8 million, or 6%,
year-over-year, reflecting a compensation ratio of 66.8% for the
first quarter of 2024 versus 64.1% for the prior year period. The
increase in Employee Compensation and Benefits compared to the
prior year period principally reflects higher base salaries, higher
compensation expense related to senior new hires and higher
amortization of prior period deferred compensation awards. See
"Deferred Compensation" for more information.
Non-Compensation Costs – First quarter Non-Compensation
Costs increased $13.5 million, or 14%, year-over-year, primarily
driven by increases in professional fees and travel and related
expenses, as well as communications and information services,
principally reflecting higher license fees and research services in
the first quarter of 2024. This was partially offset by a decrease
in bad debt expense. The first quarter Non-Compensation ratio of
18.8% increased from 16.7% for the prior year period.
Special Charges, Including Business Realignment Costs –
First quarter 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.
Effective Tax Rate
The first quarter effective tax rate was (7.7%) versus 14.9% for
the prior year period. The effective tax rate 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 first quarter provision for
income taxes for 2024 reflects an additional tax benefit of $29.5
million versus $13.7 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
March 31, 2024
March 31, 2023
% Change
(dollars in thousands)
Investment Banking & Equities:
Advisory Fees(1)
$
430,526
$
462,633
(7
%)
Underwriting Fees
55,535
22,883
143
%
Commissions and Related Revenue
48,238
48,065
—
%
Investment Management:
Asset Management and Administration
Fees(2)
20,336
17,355
17
%
Other Revenue, net
32,693
26,846
22
%
Net Revenues
$
587,328
$
577,782
2
%
- Advisory Fees on an Adjusted basis reflect the reclassification
of earnings related to our equity method investments in Luminis and
Seneca Evercore of $0.7 million and $0.1 million for the three
months ended March 31, 2024 and 2023, respectively.
- 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 $1.6 million and $1.4 million for the three months ended
March 31, 2024 and 2023, respectively.
See page 4 for additional business metrics.
Advisory Fees – First quarter adjusted Advisory Fees
decreased $32.1 million, or 7%, year-over-year, reflecting a
decline in revenue earned from large transactions during the first
quarter of 2024.
Underwriting Fees – First quarter Underwriting Fees
increased $32.7 million, or 143%, year-over-year, reflecting an
increase in the number of transactions we participated in during
the first quarter of 2024.
Commissions and Related Revenue – First quarter
Commissions and Related Revenue increased $0.2 million
year-over-year, primarily reflecting higher subscription fees,
partially offset by lower trading commissions.
Asset Management and Administration Fees – First quarter
adjusted Asset Management and Administration Fees increased $3.0
million, or 17%, year-over-year, primarily driven by an increase in
fees from Wealth Management clients, as associated AUM increased
18%, primarily from market appreciation. The increase was also
driven by a 17% increase in equity in earnings of affiliates.
Other Revenue – First quarter adjusted Other Revenue,
net, increased $5.8 million, or 22%, year-over-year, primarily
reflecting higher performance of 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
March 31, 2024
March 31, 2023
% Change
(dollars in thousands)
Employee Compensation and Benefits
$
387,705
$
366,872
6
%
Compensation Ratio
66.0
%
63.5
%
Non-Compensation Costs
$
108,990
$
95,446
14
%
Non-Compensation Ratio
18.6
%
16.5
%
Employee Compensation and Benefits – First quarter
adjusted Employee Compensation and Benefits increased $20.8
million, or 6%, year-over-year, reflecting an adjusted compensation
ratio of 66.0% for the first quarter of 2024 versus 63.5% for the
prior year period. The increase in adjusted Employee Compensation
and Benefits compared to the prior year period principally reflects
higher base salaries, higher compensation expense related to senior
new hires and higher amortization of prior period deferred
compensation awards. See "Deferred Compensation" for more
information.
Non-Compensation Costs – First quarter adjusted
Non-Compensation Costs increased $13.5 million, or 14%,
year-over-year, primarily driven by increases in professional fees
and travel and related expenses, as well as communications and
information services, principally reflecting higher license fees
and research services in the first quarter of 2024. This was
partially offset by a decrease in bad debt expense. The first
quarter adjusted Non-Compensation ratio of 18.6% increased from
16.5% for the prior year period.
Adjusted Effective Tax Rate
The first quarter adjusted effective tax rate was (9.3%) versus
15.2% for the prior year period. The adjusted effective tax rate 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 first
quarter adjusted provision for income taxes for 2024 reflects an
additional tax benefit of $31.7 million versus $14.6 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.
Liquidity
The Company continues to maintain a strong balance sheet. As of
March 31, 2024, cash and cash equivalents were $569.8 million,
investment securities and certificates of deposit were $865.3
million and current assets exceeded current liabilities by $1.5
billion. Amounts due related to the Notes Payable were $373.8
million at March 31, 2024.
Headcount
As of March 31, 2024 and 2023, the Company employed
approximately 2,225 and 2,135 people, respectively, worldwide.
As of March 31, 2024 and 2023, the Company employed 183(1) and
178(2) total Senior Managing Directors, respectively, in its
Investment Banking & Equities segment, of which 142(1) and
138(2), respectively, were Investment Banking Senior Managing
Directors.
(1)
Senior Managing Director headcount as of
March 31, 2024, adjusted to include one additional Investment
Banking Senior Managing Director committed to join in the second
quarter of 2024.
(2)
Senior Managing Director headcount as of
March 31, 2023, adjusted to include three additional Investment
Banking Senior Managing Directors that joined in the second and
third quarters of 2023.
Deferred Compensation
During the first quarter of 2024, the Company granted to certain
employees 1.6 million unvested restricted stock units ("RSUs")
(which were primarily granted in conjunction with the 2023 bonus
awards) with a grant date fair value of $300.5 million.
In addition, during the first quarter of 2024, the Company
granted $143.2 million of deferred cash awards to certain
employees, related to our deferred cash compensation program,
principally pursuant to 2023 bonus awards.
The Company recognized compensation expense related to RSUs and
our deferred cash compensation program of $118.0 million and $106.8
million for the three months ended March 31, 2024 and 2023,
respectively.
As of March 31, 2024, the Company had 5.3 million unvested RSUs
with an aggregate grant date fair value of $764.2 million. RSUs are
expensed over the service period of the award, subject to
retirement eligibility, and generally vest over four years.
As of March 31, 2024, the Company expects to pay an aggregate of
$375.4 million related to our deferred cash compensation program at
various dates through 2028, 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 April 23, 2024, the Board of Directors of Evercore declared a
quarterly dividend of $0.80 per share to be paid on June 14, 2024
to common stockholders of record on May 31, 2024.
During the first quarter, the Company repurchased 0.9 million
shares from employees for the net settlement of stock-based
compensation awards at an average price per share of $176.35, and
0.6 million shares at an average price per share of $178.21 in open
market transactions pursuant to the Company's share repurchase
program. The aggregate 1.5 million shares were acquired at an
average price per share of $177.04.
Conference Call
Evercore will host a related conference call beginning at 8:00
a.m. Eastern Time, Wednesday, April 24, 2024, accessible via
telephone and webcast. Investors and analysts may participate in
the live conference call by dialing (800) 225-9448 (toll-free
domestic) or (203) 518-9708 (international); passcode: EVRQ124.
Please register at least 10 minutes before the conference call
begins.
A live audio webcast of the conference call will be available on
the Investor Relations 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, 2023, 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 MONTHS ENDED MARCH 31,
2024 AND 2023
(dollars in thousands, except per
share data)
(UNAUDITED)
Three Months Ended March
31,
2024
2023
Revenues
Investment Banking & Equities:
Advisory Fees
$
429,838
$
462,562
Underwriting Fees
55,535
22,883
Commissions and Related Revenue
48,238
48,065
Asset Management and Administration
Fees
18,699
15,958
Other Revenue, Including Interest and
Investments
32,693
26,846
Total Revenues
585,003
576,314
Interest Expense(1)
4,188
4,171
Net Revenues
580,815
572,143
Expenses
Employee Compensation and Benefits
387,705
366,872
Occupancy and Equipment Rental
21,944
20,379
Professional Fees
31,219
24,137
Travel and Related Expenses
19,222
15,203
Communications and Information
Services
19,167
15,735
Depreciation and Amortization
6,293
6,573
Execution, Clearing and Custody Fees
3,341
2,765
Special Charges, Including Business
Realignment Costs
—
2,921
Other Operating Expenses
7,804
10,654
Total Expenses
496,695
465,239
Income Before Income from Equity Method
Investments and Income Taxes
84,120
106,904
Income from Equity Method Investments
2,325
1,468
Income Before Income Taxes
86,445
108,372
Provision (Benefit) for Income Taxes
(6,679
)
16,131
Net Income
93,124
92,241
Net Income Attributable to Noncontrolling
Interest
7,431
8,863
Net Income Attributable to Evercore
Inc.
$
85,693
$
83,378
Net Income Attributable to Evercore
Inc. Common Shareholders
$
85,693
$
83,378
Weighted Average Shares of Class A
Common Stock Outstanding:
Basic
38,438
38,510
Diluted
41,080
40,439
Net Income Per Share Attributable to
Evercore Inc. Common Shareholders:
Basic
$
2.23
$
2.17
Diluted
$
2.09
$
2.06
(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.
- 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.
- 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
March 31, 2024
March 31, 2023
Net Revenues - U.S. GAAP
$
580,815
$
572,143
Income from Equity Method Investments
(1)
2,325
1,468
Interest Expense on Debt (2)
4,188
4,171
Net Revenues - Adjusted
$
587,328
$
577,782
Other Revenue, net - U.S. GAAP
$
28,505
$
22,675
Interest Expense on Debt (2)
4,188
4,171
Other Revenue, net - Adjusted
$
32,693
$
26,846
Operating Income - U.S. GAAP
$
84,120
$
106,904
Income from Equity Method Investments
(1)
2,325
1,468
Pre-Tax Income - U.S. GAAP
86,445
108,372
Special Charges, Including Business
Realignment Costs (3)
—
2,921
Pre-Tax Income - Adjusted
86,445
111,293
Interest Expense on Debt (2)
4,188
4,171
Operating Income - Adjusted
$
90,633
$
115,464
Provision (Benefit) for Income Taxes -
U.S. GAAP
$
(6,679
)
$
16,131
Income Taxes (4)
(1,330
)
774
Provision (Benefit) for Income Taxes -
Adjusted
$
(8,009
)
$
16,905
Net Income Attributable to Evercore
Inc. - U.S. GAAP
$
85,693
$
83,378
Special Charges, Including Business
Realignment Costs (3)
—
2,921
Income Taxes (4)
1,330
(774
)
Noncontrolling Interest (5)
5,844
7,726
Net Income Attributable to Evercore
Inc. - Adjusted
$
92,867
$
93,251
Diluted Shares Outstanding - U.S.
GAAP
41,080
40,439
LP Units (6)
2,609
2,756
Unvested Restricted Stock Units - Event
Based (6)
12
12
Diluted Shares Outstanding -
Adjusted
43,701
43,207
Key Metrics:
(a)
Diluted Earnings Per Share - U.S. GAAP
$
2.09
$
2.06
Diluted Earnings Per Share - Adjusted
$
2.13
$
2.16
Operating Margin - U.S. GAAP
14.5
%
18.7
%
Operating Margin - Adjusted
15.4
%
20.0
%
Effective Tax Rate - U.S. GAAP
(7.7
%)
14.9
%
Effective Tax Rate - Adjusted
(9.3
%)
15.2
%
(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 MONTHS ENDED
MARCH 31, 2024
(dollars in thousands)
(UNAUDITED)
Investment Banking &
Equities Segment
Three Months Ended March 31,
2024
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
429,838
$
688
(1)
$
430,526
Underwriting Fees
55,535
—
55,535
Commissions and Related Revenue
48,238
—
48,238
Other Revenue, net
28,117
4,188
(2)
32,305
Net Revenues
561,728
4,876
566,604
Expenses:
Employee Compensation and Benefits
377,287
—
377,287
Non-Compensation Costs
105,551
—
105,551
Total Expenses
482,838
—
482,838
Operating Income (a)
$
78,890
$
4,876
$
83,766
Compensation Ratio (b)
67.2
%
66.6
%
Operating Margin (b)
14.0
%
14.8
%
Investment Management
Segment
Three Months Ended March 31,
2024
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
Net Revenues:
Asset Management and Administration
Fees
$
18,699
$
1,637
(1)
$
20,336
Other Revenue, net
388
—
388
Net Revenues
19,087
1,637
20,724
Expenses:
Employee Compensation and Benefits
10,418
—
10,418
Non-Compensation Costs
3,439
—
3,439
Total Expenses
13,857
—
13,857
Operating Income (a)
$
5,230
$
1,637
$
6,867
Compensation Ratio (b)
54.6
%
50.3
%
Operating Margin (b)
27.4
%
33.1
%
(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 MONTHS ENDED
MARCH 31, 2023
(dollars in thousands)
(UNAUDITED)
Investment Banking &
Equities Segment
Three Months Ended March 31,
2023
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
462,562
$
71
(1)
$
462,633
Underwriting Fees
22,883
—
22,883
Commissions and Related Revenue
48,065
—
48,065
Other Revenue, net
21,301
4,171
(2)
25,472
Net Revenues
554,811
4,242
559,053
Expenses:
Employee Compensation and Benefits
357,071
—
357,071
Non-Compensation Costs
92,009
—
92,009
Special Charges, Including Business
Realignment Costs
2,921
(2,921
)
(3)
—
Total Expenses
452,001
(2,921
)
449,080
Operating Income (a)
$
102,810
$
7,163
$
109,973
Compensation Ratio (b)
64.4
%
63.9
%
Operating Margin (b)
18.5
%
19.7
%
Investment Management
Segment
Three Months Ended March 31,
2023
U.S. GAAP Basis
Adjustments
Non-GAAP Adjusted
Basis
Net Revenues:
Asset Management and Administration
Fees
$
15,958
$
1,397
(1)
$
17,355
Other Revenue, net
1,374
—
1,374
Net Revenues
17,332
1,397
18,729
Expenses:
Employee Compensation and Benefits
9,801
—
9,801
Non-Compensation Costs
3,437
—
3,437
Total Expenses
13,238
—
13,238
Operating Income (a)
$
4,094
$
1,397
$
5,491
Compensation Ratio (b)
56.5
%
52.3
%
Operating Margin (b)
23.6
%
29.3
%
(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 March
31,
2024
2023
Investment Banking &
Equities
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
429,838
$
462,562
Underwriting Fees
55,535
22,883
Commissions and Related Revenue
48,238
48,065
Other Revenue, net
28,117
21,301
Net Revenues
561,728
554,811
Expenses:
Employee Compensation and Benefits
377,287
357,071
Non-Compensation Costs
105,551
92,009
Special Charges, Including Business
Realignment Costs
—
2,921
Total Expenses
482,838
452,001
Operating Income (a)
$
78,890
$
102,810
Investment Management
Net Revenues:
Asset Management and Administration
Fees
$
18,699
$
15,958
Other Revenue, net
388
1,374
Net Revenues
19,087
17,332
Expenses:
Employee Compensation and Benefits
10,418
9,801
Non-Compensation Costs
3,439
3,437
Total Expenses
13,857
13,238
Operating Income (a)
$
5,230
$
4,094
Total
Net Revenues:
Investment Banking & Equities:
Advisory Fees
$
429,838
$
462,562
Underwriting Fees
55,535
22,883
Commissions and Related Revenue
48,238
48,065
Asset Management and Administration
Fees
18,699
15,958
Other Revenue, net
28,505
22,675
Net Revenues
580,815
572,143
Expenses:
Employee Compensation and Benefits
387,705
366,872
Non-Compensation Costs
108,990
95,446
Special Charges, Including Business
Realignment Costs
—
2,921
Total Expenses
496,695
465,239
Operating Income (a)
$
84,120
$
106,904
(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)
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.
(4)
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.
(5)
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.
(6)
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/20240423814881/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
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