Business Wire | Oct 21, 2020 06:03AM EDT

Evercore Reports Third Quarter 2020 Results; Increases Quarterly Dividend to $0.61 Per Share

Oct. 21, 2020

NEW YORK--(BUSINESS WIRE)--Oct. 21, 2020--Evercore Inc. (NYSE: EVR) today announced its results for the third quarter ended September 30, 2020.

Third Quarter 2020 Results 2020 Year to Date Results

U.S. GAAP Adjusted U.S. GAAP Adjusted

vs. vs. vs. vs. Q3 Q3 YTD YTD 2019 2019 2019 2019

Net Revenues $ 402.5 -% $ 408.5 -% $ 1,336.6 (1%) $ 1,357.4 -%($ millions)

OperatingIncome ($ $ 63.7 (9%) $ 77.7 (8%) $ 199.7 (29%) $ 262.9 (18%)millions)

Net IncomeAttributableto Evercore $ 42.6 (2%) $ 52.6 (13%) $ 130.2 (32%) $ 182.2 (25%)Inc. ($millions)

DilutedEarnings Per $ 1.01 -% $ 1.11 (12%) $ 3.09 (30%) $ 3.85 (23%)Share

Operating 15.8 % (167) 19.0 % (175) 14.9 % (589) 19.4 % (401)Margin bps bps bps bps

Business and Financial Highlights

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Third quarter Net Revenues were flat on both a U.S. GAAP and an Adjusted basis versus the prior year period. For the first nine months of 2020, Net Revenues decreased 1% on a U.S. GAAP basis and were flat on an Adjusted basis versus the prior year period

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Underwriting Revenue of $66.5 million in the third quarter increased 278% versus the prior year period. For the first nine months of 2020, Underwriting Revenue of $181.2 million increased 195% versus the prior year period, a record for the period

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Maintained #1 league table ranking for announced M&A transaction volume among independents and #4 position in the U.S. among all firms over the last twelve months

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Served as active bookrunner or co-manager on six of the 11 largest U.S. IPOs in the first nine months of 2020; played a key role in 30 underwriting transactions in the third quarter, including the lead left role on the innovative CAPS transaction

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Evercore ISI recognized as the top independent research firm in the Institutional Investor All-America Equity Research team rankings for the seventh consecutive year and #3 among all firms

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Evercore Wealth Management named to Barron's annual ranking of top independent U.S. Registered Investment Advisors

Talent

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Michael Meyers joined Evercore ISI in July as a Senior Managing Director, helping to expand the firm's capital raising and distribution capabilities with convertible debt

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Building pipeline of senior level recruits

Strategic Transactions

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Announced strategic alliance with Seneca Evercore, an independent strategic advisory firm in Brazil

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Announced transition of Evercore's Advisory presence in Mexico to a strategic alliance model with TACTIV, a newly formed firm by leaders of the business in Mexico

Capital Return

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Quarterly dividend increased 5% to $0.61 per share

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Returned $233.9 million to shareholders for the first nine months of 2020 through dividends and repurchases of 1.9 million shares at an average price of $76.07

LEADERSHIP COMMENTARY

Ralph Schlosstein, Co-Chairman and Co-Chief Executive Officer, "Our broad capabilities to serve our clients drove solid results for both the third quarter and first nine months of this year, as these capabilities largely offset the expected decline in revenues from M&A activity. During the quarter, we added significantly to our year-to-date record underwriting revenues and we continued to see momentum across our capital advisory and underwriting businesses. We are extraordinarily proud of the strong Institutional Investor results our Evercore ISI team achieved - #3 among all firms and #1 by far among independent firms - and we thank our institutional investor clients for their strong and ongoing support. And our wealth management team continued to deliver exceptional returns and client service to our clients. We are benefiting materially from the investments that we have made in broadening and diversifying our platform over the past several years, and we are demonstrating to our clients and our shareholders that Evercore is an all-weather firm that can engage with clients on all of their most important strategic, financial and capital needs, and that can deliver to our shareholders meaningful revenues and earnings even when M&A activity is not robust. Our cash position and balance sheet continue to remain strong, and our capital return strategies remain on track."

John S. Weinberg, Co-Chairman and Co-Chief Executive Officer, "As the merger market begins to recover, we are pleased with the pace of activity that we are experiencing throughout our business. We maintained our #1 league table ranking among independents for announced M&A and the #4 position in the U.S. among all firms over the last twelve months. Our diverse capabilities allow us to advise our clients on their most important objectives, including mergers, as well as capital advisory, restructuring and refinancing needs. We continue to have constructive discussions with senior level professionals who can add breadth and depth to our capabilities that serve our clients."

Roger C. Altman, Founder and Senior Chairman, "This quarter demonstrated the importance of the broader and more diverse platform of investment banking services, which Evercore has built over many years. While the traditional M&A market was not as strong, the Firm, nevertheless, performed quite well."

Selected Financial Data - U.S. GAAP Results:

The following is a discussion of Evercore's results on a U.S. GAAP basis.



Third quarter Net Revenues were flat on both a U.S. GAAP and an Adjusted basis versus the prior year period. For the first ? nine months of 2020, Net Revenues decreased 1% on a U.S. GAAP basis and were flat on an Adjusted basis versus the prior year period

Underwriting Revenue of $66.5 million in the third quarter increased 278% versus the prior year period. For the first ? nine months of 2020, Underwriting Revenue of $181.2 million increased 195% versus the prior year period, a record for the period

Maintained #1 league table ranking for announced M&ABusiness and ? transaction volume among independents and #4 position in theFinancial U.S. among all firms over the last twelve monthsHighlights Served as active bookrunner or co-manager on six of the 11 largest U.S. IPOs in the first nine months of 2020; played a ? key role in 30 underwriting transactions in the third quarter, including the lead left role on the innovative CAPS transaction

Evercore ISI recognized as the top independent research firm ? in the Institutional Investor All-America Equity Research team rankings for the seventh consecutive year and #3 among all firms

? Evercore Wealth Management named to Barron's annual ranking of top independent U.S. Registered Investment Advisors





Michael Meyers joined Evercore ISI in July as a Senior ? Managing Director, helping to expand the firm's capitalTalent raising and distribution capabilities with convertible debt

? Building pipeline of senior level recruits





? Announced strategic alliance with Seneca Evercore, an independent strategic advisory firm in BrazilStrategicTransactions Announced transition of Evercore's Advisory presence in Mexico ? to a strategic alliance model with TACTIV, a newly formed firm by leaders of the business in Mexico





? Quarterly dividend increased 5% to $0.61 per shareCapitalReturn Returned $233.9 million to shareholders for the first nine ? months of 2020 through dividends and repurchases of 1.9 million shares at an average price of $76.07



LEADERSHIP COMMENTARY

Ralph Schlosstein, Co-Chairman and Co-Chief Executive Officer, "Our broad capabilities to serve our clients drove solid results for both the third quarter and first nine months of this year, as these capabilities largely offset the expected decline in revenues from M&A activity. During the quarter, we added significantly to our year-to-date record underwriting revenues and we continued to see momentum across our capital advisory and underwriting businesses. We are extraordinarily proud of the strong Institutional Investor results our Evercore ISI team achieved - #3 among all firms and #1 by far among independent firms - and we thank our institutional investor clients for their strong and ongoing support. And our wealth management team continued to deliver exceptional returns and client service to our clients. We are benefiting materially from the investments that we have made in broadening and diversifying our platform over the past several years, and we are demonstrating to our clients and our shareholders that Evercore is an all-weather firm that can engage with clients on all of their most important strategic, financial and capital needs, and that can deliver to our shareholders meaningful revenues and earnings even when M&A activity is not robust. Our cash position and balance sheet continue to remain strong, and our capital return strategies remain on track."

John S. Weinberg, Co-Chairman and Co-Chief Executive Officer, "As the merger market begins to recover, we are pleased with the pace of activity that we are experiencing throughout our business. We maintained our #1 league table ranking among independents for announced M&A and the #4 position in the U.S. among all firms over the last twelve months. Our diverse capabilities allow us to advise our clients on their most important objectives, including mergers, as well as capital advisory, restructuring and refinancing needs. We continue to have constructive discussions with senior level professionals who can add breadth and depth to our capabilities that serve our clients."

Roger C. Altman, Founder and Senior Chairman, "This quarter demonstrated the importance of the broader and more diverse platform of investment banking services, which Evercore has built over many years. While the traditional M&A market was not as strong, the Firm, nevertheless, performed quite well."

Selected Financial Data - U.S. GAAP Results:

The following is a discussion of Evercore's results on a U.S. GAAP basis.

U.S. GAAP

Three Months Ended Nine Months Ended

September September % September 30, September 30, % 30, 2020 30, 2019 Change 2020 2019 Change

(dollars in thousands, except per share data)

Net Revenues $ 402,515 $ 402,198 - % $ 1,336,597 $ 1,348,571 (1 %)

Operating $ 63,686 $ 70,344 (9 %) $ 199,718 $ 280,988 (29 %)Income^(1)

Net IncomeAttributable $ 42,610 $ 43,278 (2 %) $ 130,197 $ 192,252 (32 %)to EvercoreInc.

DilutedEarnings Per $ 1.01 $ 1.01 - % $ 3.09 $ 4.43 (30 %)Share

Compensation 64.5 % 60.1 % 64.7 % 59.6 % Ratio

Operating 15.8 % 17.5 % 14.9 % 20.8 % Margin

Effective 23.5 % 28.0 % 24.5 % 20.9 % Tax Rate

TrailingTwelve Month 63.2 % 58.2 % CompensationRatio

(1)

Operating Income includes Special Charges, Including Business Realignment Costs, of $7.4 million recognized in the Investment Banking segment for the three months ended September 30, 2020 and $39.6 million and $0.03 million recognized in the Investment Banking and Investment Management segment, respectively, for the nine months ended September 30, 2020. Operating Income for the three and nine months ended September 30, 2019 includes Special Charges, Including Business Realignment Costs, of $1.0 million and $3.1 million, respectively, recognized in the Investment Banking segment. See "Special Charges, Including Business Realignment Costs" below and page 7 for further information.

Net RevenuesFor the three months ended September 30, 2020, Net Revenues of $402.5 million were flat versus the three months ended September 30, 2019, reflecting decreases in Advisory Fees and Commissions and Related Fees of $50.2 million and $3.0 million, respectively, predominantly offset by an increase in Underwriting Fees of $48.9 million, and higher performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program. For the nine months ended September 30, 2020, Net Revenues of $1.34 billion decreased 1% versus the nine months ended September 30, 2019, reflecting a decrease in Advisory Fees of $124.6 million and lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program, and legacy private equity investments. These decreases were predominantly offset by increases in Underwriting Fees and Commissions and Related Fees of $119.8 million and $15.9 million, respectively. See the Business Line Reporting - Discussion of U.S. GAAP Results below for further information.

CompensationFor the three months ended September 30, 2020, the compensation ratio was 64.5% versus 60.1% for the three months ended September 30, 2019. The compensation ratio for the three months ended September 30, 2020 is 66.3% when the $7.3 million of separation and transition benefits expense, which is presented within Special Charges, Including Business Realignment Costs, is also included. For the nine months ended September 30, 2020, the compensation ratio was 64.7% versus 59.6% for the nine months ended September 30, 2019. The compensation ratio for the nine months ended September 30, 2020 is 67.5% when the $37.4 million of separation and transition benefits expense, which is presented within Special Charges, Including Business Realignment Costs, is also included. See "Special Charges, Including Business Realignment Costs" below for further information. The increase in the amount of compensation recognized in the three and nine months ended September 30, 2020 is primarily driven by higher levels of incentive compensation recognized this year, higher amortization of unvested share-based and deferred cash awards and higher base salaries, primarily due to promotions. The resulting compensation ratios are higher than the comparable periods for 2019 due to these increases, as well as lower Other Revenue earned during the nine months ended September 30, 2020 resulting from lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program, and legacy private equity investments. The compensation ratio in any given period is subject to fluctuation based, in part, on the amount of revenue earned in that period.

Non-Compensation CostsFor the three months ended September 30, 2020, Non-Compensation Costs of $71.6 million decreased 20% versus the three months ended September 30, 2019, primarily driven by decreased travel and related expenses related to prolonged travel restrictions. For the nine months ended September 30, 2020, Non-Compensation Costs of $232.7 million decreased 11% versus the nine months ended September 30, 2019, primarily driven by decreased travel and related expenses, related to prolonged travel restrictions, and decreased professional fees, partially offset by increased bad debt expense.

Special Charges, Including Business Realignment CostsIn the first quarter of 2020, the Company substantially completed a review of operations focused on markets, sectors and people which have delivered lower levels of productivity in an effort to attain greater flexibility of operations and better position itself for future growth.

This review, which began in the fourth quarter of 2019, will generate reductions of approximately 8% of our headcount. In conjunction with the employment reductions, the Company expects to incur separation and transition benefits and related costs of approximately $43 million, $37.6 million of which has been recorded as Special Charges, Including Business Realignment Costs, in the first nine months of 2020 and are excluded from our Adjusted results. The Company believes these actions will best position it to continue to provide clients with the highest quality of independent advice while delivering value to our shareholders.

In conjunction with this review, in the second quarter of 2020 we entered into an agreement for the leaders of our business in Mexico to purchase Evercore Casa de Bolsa, S.A. de C.V. ("ECB"), our Mexico based broker-dealer focused principally on providing Investment Management services. In addition, in October we announced the decision to transition our Advisory presence in Mexico to a strategic alliance model.

The Company's estimates of charges are based on a number of assumptions. Actual results may differ materially if actual activity deviates from these assumptions.

Special Charges, Including Business Realignment Costs, for the three and nine months ended September 30, 2020 also reflect the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the previously announced expansion of our headquarters in New York and our business realignment initiatives of $0.1 million and $2.1 million, respectively. Special Charges, Including Business Realignment Costs, for the three and nine months ended September 30, 2019 reflect the acceleration of depreciation expense for leasehold improvements in conjunction with the previously announced expansion of our headquarters in New York.

Effective Tax RateFor the three months ended September 30, 2020, the effective tax rate was 23.5% versus 28.0% for the three months ended September 30, 2019. For the nine months ended September 30, 2020, the effective tax rate was 24.5% versus 20.9% for the nine months ended September 30, 2019. The effective tax rate is impacted by the non-deductible treatment of compensation associated with Evercore LP Units, as well as the deduction associated with the appreciation or depreciation in the Firm's share price upon vesting of employee share-based awards above or below the original grant price.

Selected Financial Data - Adjusted Results:

The following is a discussion of Evercore's results on an Adjusted basis. See pages 7 and A-2 to A-11 for further information and reconciliations of these non-GAAP metrics to our U.S. GAAP results.

Operating Income includes Special Charges, Including Business Realignment Costs, of $7.4 million recognized in the Investment Banking segment for the three months ended September 30, 2020 and $39.6 million and $0.03 million recognized in the Investment Banking and Investment Management(1) segment, respectively, for the nine months ended September 30, 2020. Operating Income for the three and nine months ended September 30, 2019 includes Special Charges, Including Business Realignment Costs, of $1.0 million and $3.1 million, respectively, recognized in the Investment Banking segment. See "Special Charges, Including Business Realignment Costs" below and page 7 for further information.

Net RevenuesFor the three months ended September 30, 2020, Net Revenues of $402.5 million were flat versus the three months ended September 30, 2019, reflecting decreases in Advisory Fees and Commissions and Related Fees of $50.2 million and $3.0 million, respectively, predominantly offset by an increase in Underwriting Fees of $48.9 million, and higher performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program. For the nine months ended September 30, 2020, Net Revenues of $1.34 billion decreased 1% versus the nine months ended September 30, 2019, reflecting a decrease in Advisory Fees of $124.6 million and lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program, and legacy private equity investments. These decreases were predominantly offset by increases in Underwriting Fees and Commissions and Related Fees of $119.8 million and $15.9 million, respectively. See the Business Line Reporting - Discussion of U.S. GAAP Results below for further information.

CompensationFor the three months ended September 30, 2020, the compensation ratio was 64.5% versus 60.1% for the three months ended September 30, 2019. The compensation ratio for the three months ended September 30, 2020 is 66.3% when the $7.3 million of separation and transition benefits expense, which is presented within Special Charges, Including Business Realignment Costs, is also included. For the nine months ended September 30, 2020, the compensation ratio was 64.7% versus 59.6% for the nine months ended September 30, 2019. The compensation ratio for the nine months ended September 30, 2020 is 67.5% when the $37.4 million of separation and transition benefits expense, which is presented within Special Charges, Including Business Realignment Costs, is also included. See "Special Charges, Including Business Realignment Costs" below for further information. The increase in the amount of compensation recognized in the three and nine months ended September 30, 2020 is primarily driven by higher levels of incentive compensation recognized this year, higher amortization of unvested share-based and deferred cash awards and higher base salaries, primarily due to promotions. The resulting compensation ratios are higher than the comparable periods for 2019 due to these increases, as well as lower Other Revenue earned during the nine months ended September 30, 2020 resulting from lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program, and legacy private equity investments. The compensation ratio in any given period is subject to fluctuation based, in part, on the amount of revenue earned in that period.

Non-Compensation CostsFor the three months ended September 30, 2020, Non-Compensation Costs of $71.6 million decreased 20% versus the three months ended September 30, 2019, primarily driven by decreased travel and related expenses related to prolonged travel restrictions. For the nine months ended September 30, 2020, Non-Compensation Costs of $232.7 million decreased 11% versus the nine months ended September 30, 2019, primarily driven by decreased travel and related expenses, related to prolonged travel restrictions, and decreased professional fees, partially offset by increased bad debt expense.

Special Charges, Including Business Realignment CostsIn the first quarter of 2020, the Company substantially completed a review of operations focused on markets, sectors and people which have delivered lower levels of productivity in an effort to attain greater flexibility of operations and better position itself for future growth.

This review, which began in the fourth quarter of 2019, will generate reductions of approximately 8% of our headcount. In conjunction with the employment reductions, the Company expects to incur separation and transition benefits and related costs of approximately $43 million, $37.6 million of which has been recorded as Special Charges, Including Business Realignment Costs, in the first nine months of 2020 and are excluded from our Adjusted results. The Company believes these actions will best position it to continue to provide clients with the highest quality of independent advice while delivering value to our shareholders.

In conjunction with this review, in the second quarter of 2020 we entered into an agreement for the leaders of our business in Mexico to purchase Evercore Casa de Bolsa, S.A. de C.V. ("ECB"), our Mexico based broker-dealer focused principally on providing Investment Management services. In addition, in October we announced the decision to transition our Advisory presence in Mexico to a strategic alliance model.

The Company's estimates of charges are based on a number of assumptions. Actual results may differ materially if actual activity deviates from these assumptions.

Special Charges, Including Business Realignment Costs, for the three and nine months ended September 30, 2020 also reflect the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the previously announced expansion of our headquarters in New York and our business realignment initiatives of $0.1 million and $2.1 million, respectively. Special Charges, Including Business Realignment Costs, for the three and nine months ended September 30, 2019 reflect the acceleration of depreciation expense for leasehold improvements in conjunction with the previously announced expansion of our headquarters in New York.

Effective Tax RateFor the three months ended September 30, 2020, the effective tax rate was 23.5% versus 28.0% for the three months ended September 30, 2019. For the nine months ended September 30, 2020, the effective tax rate was 24.5% versus 20.9% for the nine months ended September 30, 2019. The effective tax rate is impacted by the non-deductible treatment of compensation associated with Evercore LP Units, as well as the deduction associated with the appreciation or depreciation in the Firm's share price upon vesting of employee share-based awards above or below the original grant price.

Selected Financial Data - Adjusted Results:

The following is a discussion of Evercore's results on an Adjusted basis. See pages 7 and A-2 to A-11 for further information and reconciliations of these non-GAAP metrics to our U.S. GAAP results.

Adjusted

Three Months Ended Nine Months Ended

September September % September 30, September 30, % 30, 2020 30, 2019 Change 2020 2019 Change

(dollars in thousands, except per share data)

Net Revenues $ 408,489 $ 408,546 - % $ 1,357,388 $ 1,364,151 - %

Operating $ 77,663 $ 84,809 (8 %) $ 262,933 $ 318,960 (18 %)Income

Net IncomeAttributable $ 52,628 $ 60,473 (13 %) $ 182,213 $ 243,169 (25 %)to EvercoreInc.

DilutedEarnings Per $ 1.11 $ 1.26 (12 %) $ 3.85 $ 4.99 (23 %)Share

Compensation 63.6 % 58.0 % 63.6 % 58.0 % Ratio

Operating 19.0 % 20.8 % 19.4 % 23.4 % Margin

Effective 27.2 % 24.9 % 26.1 % 20.9 % Tax Rate

TrailingTwelve Month 62.0 % 56.9 % CompensationRatio



Adjusted Net RevenuesFor the three months ended September 30, 2020, Adjusted Net Revenues of $408.5 million were flat versus the three months ended September 30, 2019, reflecting decreases in Advisory Fees and Commissions and Related Fees of $49.9 million and $3.0 million, respectively, predominantly offset by an increase in Underwriting Fees of $48.9 million and higher performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program. For the nine months ended September 30, 2020, Adjusted Net Revenues of $1.36 billion were flat versus the nine months ended September 30, 2019, reflecting a decrease in Advisory Fees of $124.2 million and lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program, and legacy private equity investments. These decreases were predominantly offset by increases in Underwriting Fees and Commissions and Related Fees of $119.8 million and $15.9 million, respectively. See the Business Line Reporting - Discussion of Adjusted Results below for further information.

Adjusted CompensationFor the three months ended September 30, 2020, the Adjusted compensation ratio was 63.6% versus 58.0% for the three months ended September 30, 2019. For the nine months ended September 30, 2020, the Adjusted compensation ratio was 63.6% versus 58.0% for the nine months ended September 30, 2019. The increase in the amount of Adjusted compensation recognized in the three and nine months ended September 30, 2020 is primarily driven by higher levels of incentive compensation recognized this year, higher amortization of unvested share-based and deferred cash awards and higher base salaries, primarily due to promotions. The resulting Adjusted compensation ratios are higher than the comparable periods for 2019 due to these increases, as well as lower Other Revenue earned during the nine months ended September 30, 2020 resulting from lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program, and legacy private equity investments. The Adjusted compensation ratio in any given period is subject to fluctuation based, in part, on the amount of revenue earned in that period.

Adjusted Non-Compensation CostsFor the three months ended September 30, 2020, Adjusted Non-Compensation Costs of $71.0 million decreased 18% versus the three months ended September 30, 2019, primarily driven by decreased travel and related expenses related to prolonged travel restrictions. For the nine months ended September 30, 2020, Adjusted Non-Compensation Costs of $230.9 million decreased 9% versus the nine months ended September 30, 2019, primarily driven by decreased travel and related expenses, related to prolonged travel restrictions, and decreased professional fees, partially offset by increased bad debt expense.

Adjusted Operating ExpensesAdjusted Operating Expenses exclude adjustments relating to Special Charges, Including Business Realignment Costs, as described in more detail on page 4.

Adjusted Effective Tax RateFor the three months ended September 30, 2020, the Adjusted effective tax rate was 27.2% versus 24.9% for the three months ended September 30, 2019. For the nine months ended September 30, 2020, the Adjusted effective tax rate was 26.1% versus 20.9% for the nine months ended September 30, 2019. The Adjusted effective tax rate is impacted by the deduction associated with the appreciation or depreciation in the Firm's share price upon vesting of employee share-based awards above or below the original grant price.

COVID-19 Update

The worldwide COVID-19 pandemic has posed, and is expected to continue to pose, significant challenges for our business. Our revenues and cash flows have been adversely impacted to date, although our broad and diverse capabilities, including underwriting, restructuring, capital markets advisory and equity commissions and related fees, have enabled us to predominantly offset weakened M&A activity and offer relevant services to our clients. Our teams, the substantial majority of which are working remotely, continue to work diligently, though there remains uncertainty as to how the pandemic and government response may impact the markets and our clients' needs in the future. We continue to monitor our cash levels, liquidity, regulatory capital requirements, debt covenants and our other contractual obligations regularly, as well as decisions related to capital projects and returning capital to investors. Please see Section 1.A, entitled "Risk Factors", of our Form 10-Q for the quarterly period ended March 31, 2020 for more information.

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.

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 vested and certain unvested 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 Net Income Attributable to Evercore Inc. for the three and nine months ended September 30, 2020 was higher than U.S. GAAP as a result of the exclusion of expenses associated with awards granted in conjunction with certain of the Company's acquisitions, and certain other business acquisition-related charges and Special Charges, Including Business Realignment Costs.

Acquisition-related compensation charges for 2020 include expenses associated with awards granted in conjunction with the Company's acquisition of ISI. Acquisition-related charges for 2020 also include professional fees incurred and amortization of intangible assets.

Special Charges, Including Business Realignment Costs, for 2020 relate to separation and transition benefits and related costs as a result of the Company's review of its operations and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the previously announced expansion of our headquarters in New York and our business realignment initiatives.

Gains resulting from the sale of the ECB Trust business in the third quarter of 2020 have also been excluded from Revenues.

Evercore's Adjusted Diluted Shares Outstanding for the three and nine months ended September 30, 2020were higher than U.S. GAAP, as a result of the inclusion of certain Evercore LP Units.

Further details of these adjustments, as well as an explanation of similar amounts for the three and nine months ended September 30, 2019 are included in Annex I, pages A-2 to A-11.

Business Line Reporting - Discussion of U.S. GAAP Results

The following is a discussion of Evercore's segment results on a U.S. GAAP basis.

Investment Banking

U.S. GAAP

Three Months Ended Nine Months Ended

September September % September September 30, % 30, 2020 30, 2019 Change 30, 2020 2019 Change

(dollars in thousands)

Net Revenues:

Investment Banking:

Advisory Fees $ 270,662 $ 320,885 (16 %) $ 965,662 $ 1,090,309 (11 %)

Underwriting 66,499 17,598 278 % 181,182 61,428 195 %Fees

Commissions and 43,853 46,820 (6 %) 153,353 137,417 12 %Related Fees

Other Revenue, 4,449 2,709 64 % (5,704 ) 16,432 NM net

Net Revenues 385,463 388,012 (1 %) 1,294,493 1,305,586 (1 %)



Expenses:

EmployeeCompensation and 250,856 233,078 8 % 838,553 778,078 8 %Benefits

Non-Compensation 68,122 85,507 (20 %) 221,883 249,904 (11 %)Costs

Special Charges,IncludingBusiness 7,380 1,029 617 % 39,582 3,087 NMRealignmentCosts

Total Expenses 326,358 319,614 2 % 1,100,018 1,031,069 7 %



Operating Income $ 59,105 $ 68,398 (14 %) $ 194,475 $ 274,517 (29 %)



Compensation 65.1 % 60.1 % 64.8 % 59.6 % Ratio

Non-Compensation 17.7 % 22.0 % 17.1 % 19.1 % Ratio

Operating Margin 15.3 % 17.6 % 15.0 % 21.0 %



Total Number ofFees from 206 213 (3 %) 475 489 (3 %)Advisory ClientTransactions^(1)

InvestmentBanking Fees ofat Least $1 74 74 - % 224 223 - %million fromAdvisory ClientTransactions^(1)

(1)

Includes Advisory and Underwriting Transactions.

Revenues

During the three months ended September 30, 2020, fees from Advisory services decreased $50.2 million, or 16%, versus the three months ended September 30, 2019, reflecting a decrease in the number of Advisory fees earned and a decline in revenue earned from large transactions. Underwriting Fees of $66.5 million for the three months ended September 30, 2020 increased $48.9 million, or 278%, versus the three months ended September 30, 2019, as underwriting activity remained elevated from prior year levels. We participated in 30 underwriting transactions during the three months ended September 30, 2020 (vs. 18 in Q3 2019); 23 as a bookrunner (vs. 10 in Q3 2019). Commissions and Related Fees for the three months ended September 30, 2020 decreased $3.0 million, or 6%, versus the three months ended September 30, 2019.

During the nine months ended September 30, 2020, fees from Advisory services decreased $124.6 million, or 11%, versus the nine months ended September 30, 2019, reflecting a decrease in the number of Advisory fees earned and a decline in revenue earned from large transactions. Underwriting Fees of $181.2 million for the nine months ended September 30, 2020 increased $119.8 million, or 195%, versus the nine months ended September 30, 2019, as we closed several of the largest deals in our history. We participated in 78 underwriting transactions during the nine months ended September 30, 2020 (vs. 57 in 2019); 52 as a bookrunner (vs. 37 in 2019). Commissions and Related Fees for the nine months ended September 30, 2020 increased $15.9 million, or 12%, versus the nine months ended September 30, 2019, as a result of elevated volatility during the first half of 2020.

Other Revenue, net, for the three months ended September 30, 2020 increased versus the three months ended September 30, 2019, primarily reflecting gains on the investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program, as the market continued to improve during the quarter. Other Revenue, net, for the nine months ended September 30, 2020 decreased versus the nine months ended September 30, 2019, primarily reflecting lower performance of the investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program.

Expenses

Compensation costs were $250.9 million for the three months ended September 30, 2020, an increase of 8% from the third quarter of last year. The compensation ratio was 65.1% for the three months ended September 30, 2020, compared to 60.1% for the three months ended September 30, 2019. The compensation ratio for the three months ended September 30, 2020 is 67.0% when the $7.3 million of separation and transition benefits expense, which is presented within Special Charges, Including Business Realignment Costs, is also included. Compensation costs were $838.6 million for the nine months ended September 30, 2020, an increase of 8% compared to the nine months ended September 30, 2019. The compensation ratio was 64.8% for the nine months ended September 30, 2020, compared to 59.6% for the nine months ended September 30, 2019. The compensation ratio for the nine months ended September 30, 2020 is 67.7% when the $37.4 million of separation and transition benefits expense, which is presented within Special Charges, Including Business Realignment Costs, is also included. See page 4 for further information. The increase in the amount of compensation recognized in the three and nine months ended September 30, 2020 is primarily driven by higher levels of incentive compensation recognized this year, higher amortization of unvested share-based and deferred cash awards and higher base salaries, primarily due to promotions. The resulting compensation ratios are higher than the comparable periods for 2019 due to these increases, as well as lower Other Revenue earned during the nine months ended September 30, 2020 resulting from lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program. The compensation ratio in any given period is subject to fluctuation based, in part, on the amount of revenue earned in that period.

Non-Compensation Costs for the three months ended September 30, 2020 were $68.1 million, a decrease of 20% compared to the third quarter of last year. The decrease in Non-Compensation Costs from last year primarily reflects decreased travel and related expenses related to prolonged travel restrictions. The ratio of Non-Compensation Costs to Net Revenues for the three months ended September 30, 2020 of 17.7% decreased from 22.0% for the third quarter of last year. Non-Compensation Costs for the nine months ended September 30, 2020 were $221.9 million, a decrease of 11% compared to the nine months ended September 30, 2019. The decrease in Non-Compensation Costs versus last year primarily reflects decreased travel and related expenses, related to prolonged travel restrictions, and decreased professional fees, partially offset by increased bad debt expense. The ratio of Non-Compensation Costs to Net Revenues for the nine months ended September 30, 2020 of 17.1% decreased from 19.1% for the nine months ended September 30, 2019.

Special Charges, Including Business Realignment Costs, for the three and nine months ended September 30, 2020 reflect $7.3 million and $37.5 million, respectively, for separation and transition benefits and related costs as a result of the Company's review of its operations and $0.1 million and $2.1 million, respectively, for the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the previously announced expansion of our headquarters in New York and our business realignment initiatives. See page 4 for further information. Special Charges, Including Business Realignment Costs, for the three and nine months ended September 30, 2019, reflect the acceleration of depreciation expense for leasehold improvements in conjunction with the previously announced expansion of our headquarters in New York.

Investment Management

(1) Includes Advisory and Underwriting Transactions.

Revenues

During the three months ended September 30, 2020, fees from Advisory services decreased $50.2 million, or 16%, versus the three months ended September 30, 2019, reflecting a decrease in the number of Advisory fees earned and a decline in revenue earned from large transactions. Underwriting Fees of $66.5 million for the three months ended September 30, 2020 increased $48.9 million, or 278%, versus the three months ended September 30, 2019, as underwriting activity remained elevated from prior year levels. We participated in 30 underwriting transactions during the three months ended September 30, 2020 (vs. 18 in Q3 2019); 23 as a bookrunner (vs. 10 in Q3 2019). Commissions and Related Fees for the three months ended September 30, 2020 decreased $3.0 million, or 6%, versus the three months ended September 30, 2019.

During the nine months ended September 30, 2020, fees from Advisory services decreased $124.6 million, or 11%, versus the nine months ended September 30, 2019, reflecting a decrease in the number of Advisory fees earned and a decline in revenue earned from large transactions. Underwriting Fees of $181.2 million for the nine months ended September 30, 2020 increased $119.8 million, or 195%, versus the nine months ended September 30, 2019, as we closed several of the largest deals in our history. We participated in 78 underwriting transactions during the nine months ended September 30, 2020 (vs. 57 in 2019); 52 as a bookrunner (vs. 37 in 2019). Commissions and Related Fees for the nine months ended September 30, 2020 increased $15.9 million, or 12%, versus the nine months ended September 30, 2019, as a result of elevated volatility during the first half of 2020.

Other Revenue, net, for the three months ended September 30, 2020 increased versus the three months ended September 30, 2019, primarily reflecting gains on the investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program, as the market continued to improve during the quarter. Other Revenue, net, for the nine months ended September 30, 2020 decreased versus the nine months ended September 30, 2019, primarily reflecting lower performance of the investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program.

Expenses

Compensation costs were $250.9 million for the three months ended September 30, 2020, an increase of 8% from the third quarter of last year. The compensation ratio was 65.1% for the three months ended September 30, 2020, compared to 60.1% for the three months ended September 30, 2019. The compensation ratio for the three months ended September 30, 2020 is 67.0% when the $7.3 million of separation and transition benefits expense, which is presented within Special Charges, Including Business Realignment Costs, is also included. Compensation costs were $838.6 million for the nine months ended September 30, 2020, an increase of 8% compared to the nine months ended September 30, 2019. The compensation ratio was 64.8% for the nine months ended September 30, 2020, compared to 59.6% for the nine months ended September 30, 2019. The compensation ratio for the nine months ended September 30, 2020 is 67.7% when the $37.4 million of separation and transition benefits expense, which is presented within Special Charges, Including Business Realignment Costs, is also included. See page 4 for further information. The increase in the amount of compensation recognized in the three and nine months ended September 30, 2020 is primarily driven by higher levels of incentive compensation recognized this year, higher amortization of unvested share-based and deferred cash awards and higher base salaries, primarily due to promotions. The resulting compensation ratios are higher than the comparable periods for 2019 due to these increases, as well as lower Other Revenue earned during the nine months ended September 30, 2020 resulting from lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program. The compensation ratio in any given period is subject to fluctuation based, in part, on the amount of revenue earned in that period.

Non-Compensation Costs for the three months ended September 30, 2020 were $68.1 million, a decrease of 20% compared to the third quarter of last year. The decrease in Non-Compensation Costs from last year primarily reflects decreased travel and related expenses related to prolonged travel restrictions. The ratio of Non-Compensation Costs to Net Revenues for the three months ended September 30, 2020 of 17.7% decreased from 22.0% for the third quarter of last year. Non-Compensation Costs for the nine months ended September 30, 2020 were $221.9 million, a decrease of 11% compared to the nine months ended September 30, 2019. The decrease in Non-Compensation Costs versus last year primarily reflects decreased travel and related expenses, related to prolonged travel restrictions, and decreased professional fees, partially offset by increased bad debt expense. The ratio of Non-Compensation Costs to Net Revenues for the nine months ended September 30, 2020 of 17.1% decreased from 19.1% for the nine months ended September 30, 2019.

Special Charges, Including Business Realignment Costs, for the three and nine months ended September 30, 2020 reflect $7.3 million and $37.5 million, respectively, for separation and transition benefits and related costs as a result of the Company's review of its operations and $0.1 million and $2.1 million, respectively, for the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the previously announced expansion of our headquarters in New York and our business realignment initiatives. See page 4 for further information. Special Charges, Including Business Realignment Costs, for the three and nine months ended September 30, 2019, reflect the acceleration of depreciation expense for leasehold improvements in conjunction with the previously announced expansion of our headquarters in New York.

Investment Management

U.S. GAAP

Three Months Ended Nine Months Ended

September September % September September % 30, 2020 30, 2019 Change 30, 2020 30, 2019 Change

(dollars in thousands)

Net Revenues:

Asset Managementand Administration $ 14,025 $ 12,650 11 % $ 39,725 $ 37,452 6 %Fees

Other Revenue, net 3,027 1,536 97 % 2,379 5,533 (57 %)

Net Revenues 17,052 14,186 20 % 42,104 42,985 (2 %)



Expenses:

EmployeeCompensation and 8,956 8,624 4 % 26,047 25,579 2 %Benefits

Non-Compensation 3,515 3,616 (3 %) 10,782 10,935 (1 %)Costs

Special Charges,Including Business - - NM 32 - NMRealignment Costs

Total Expenses 12,471 12,240 2 % 36,861 36,514 1 %



Operating Income $ 4,581 $ 1,946 135 % $ 5,243 $ 6,471 (19 %)



Compensation Ratio 52.5 % 60.8 % 61.9 % 59.5 %

Non-Compensation 20.6 % 25.5 % 25.6 % 25.4 % Ratio

Operating Margin 26.9 % 13.7 % 12.5 % 15.1 %



Assets UnderManagement (in millions)^(1)

Wealth Management^ $ 9,517 $ 8,629 10 % $ 9,517 $ 8,629 10 %(2)

Institutional 1,420 1,627 (13 %) 1,420 1,627 (13 %)Asset Management

Total Assets Under $ 10,937 $ 10,256 7 % $ 10,937 $ 10,256 7 %Management

(1)

Assets Under Management reflect end of period amounts from our consolidated subsidiaries.

(2)

Assets Under Management includes Evercore assets which are managed by Evercore Wealth Management of $223.4 million and $318.5 million as of September 30, 2020 and 2019, respectively.

Revenues

(1) Assets Under Management reflect end of period amounts from our consolidated subsidiaries.

Assets Under Management includes Evercore assets which are managed by(2) Evercore Wealth Management of $223.4 million and $318.5 million as of September 30, 2020 and 2019, respectively.

Revenues

U.S. GAAP

Three Months Ended Nine Months Ended

September September % September September % 30, 2020 30, 2019 Change 30, 2020 30, 2019 Change

(dollars in thousands)

Asset Managementand AdministrationFees:

Wealth $ 13,664 $ 12,155 12 % $ 38,624 $ 35,408 9 %Management

Institutional 361 495 (27 %) 1,101 2,044 (46 %)Asset Management

Total AssetManagement and $ 14,025 $ 12,650 11 % $ 39,725 $ 37,452 6 %AdministrationFees

Asset Management and Administration Fees of $14.0 million for the three months ended September 30, 2020 increased 11% compared to the third quarter of last year, principally driven by an increase in fees from Wealth Management clients, which increased 12% compared to the third quarter of last year, as associated AUM increased 10%.

Asset Management and Administration Fees of $39.7 million for the nine months ended September 30, 2020 increased 6% compared to the nine months ended September 30, 2019, principally driven by an increase in fees from Wealth Management clients, which increased 9% compared to the nine months ended September 30, 2019, as associated AUM increased 10%.

Other Revenue, net, which includes income from our legacy private equity investments, increased 97% versus the three months ended September 30, 2019 and decreased 57% versus the nine months ended September 30, 2019.

Expenses

Investment Management's expenses for the three months ended September 30, 2020 were $12.5 million, an increase of 2% compared to the third quarter of last year, primarily due to an increase in compensation costs, partially offset by a decrease in Non-Compensation Costs. Investment Management's expenses for the nine months ended September 30, 2020 were $36.9 million, an increase of 1% compared to the nine months ended September 30, 2019, primarily due to an increase in compensation costs, partially offset by a decrease in Non-Compensation Costs.

Special Charges, Including Business Realignment Costs, for the nine months ended September 30, 2020 primarily reflect separation and transition benefits. See page 4 for further information.

Business Line Reporting - Discussion of Adjusted Results

The following is a discussion of Evercore's segment results on an Adjusted basis. See pages 7 and A-2 to A-11 for further information and reconciliations of these metrics to our U.S. GAAP results.

Investment Banking

Adjusted

Three Months Ended Nine Months Ended

September September % September September 30, % 30, 2020 30, 2019 Change 30, 2020 2019 Change

(dollars in thousands)

Net Revenues:

Investment Banking:

Advisory Fees^ $ 271,232 $ 321,167 (16 %) $ 966,833 $ 1,091,065 (11 %)(1)

Underwriting 66,499 17,598 278 % 181,182 61,428 195 %Fees

Commissions and 43,853 46,820 (6 %) 153,353 137,417 12 %Related Fees

Other Revenue, 8,667 6,495 33 % 7,890 24,786 (68 %)net

Net Revenues 390,251 392,080 - % 1,309,258 1,314,696 - %



Expenses:

EmployeeCompensation and 250,856 228,527 10 % 837,486 765,732 9 %Benefits

Non-Compensation 67,799 83,170 (18 %) 220,440 243,253 (9 %)Costs

Total Expenses 318,655 311,697 2 % 1,057,926 1,008,985 5 %



Operating Income $ 71,596 $ 80,383 (11 %) $ 251,332 $ 305,711 (18 %)



Compensation 64.3 % 58.3 % 64.0 % 58.2 % Ratio

Non-Compensation 17.4 % 21.2 % 16.8 % 18.5 % Ratio

Operating Margin 18.3 % 20.5 % 19.2 % 23.3 %



Total Number ofFees from 206 213 (3 %) 475 489 (3 %)Advisory ClientTransactions^(2)

InvestmentBanking Fees ofat Least $1 74 74 - % 224 223 - %million fromAdvisory ClientTransactions^(2)

(1)

Advisory Fees on an Adjusted basis reflect the reclassification of earnings related to our equity investment in Luminis of $570 and $1,171 for the three and nine months ended September 30, 2020, respectively, and $282 and $756 for the three and nine months ended September 30, 2019, respectively.

(2)

Includes Advisory and Underwriting Transactions.

Adjusted Revenues

During the three months ended September 30, 2020, fees from Advisory services decreased $49.9 million, or 16%, versus the three months ended September 30, 2019, reflecting a decrease in the number of Advisory fees earned and a decline in revenue earned from large transactions. Underwriting Fees of $66.5 million for the three months ended September 30, 2020 increased $48.9 million, or 278%, versus the three months ended September 30, 2019, as underwriting activity remained elevated from prior year levels. We participated in 30 underwriting transactions during the three months ended September 30, 2020 (vs. 18 in Q3 2019); 23 as a bookrunner (vs. 10 in Q3 2019). Commissions and Related Fees for the three months ended September 30, 2020 decreased $3.0 million, or 6%, versus the three months ended September 30, 2019.

During the nine months ended September 30, 2020, fees from Advisory services decreased $124.2 million, or 11%, versus the nine months ended September 30, 2019, reflecting a decrease in the number of Advisory fees earned and a decline in revenue earned from large transactions. Underwriting Fees of $181.2 million for the nine months ended September 30, 2020 increased $119.8 million, or 195%, versus the nine months ended September 30, 2019, as we closed several of the largest deals in our history. We participated in 78 underwriting transactions during the nine months ended September 30, 2020 (vs. 57 in 2019); 52 as a bookrunner (vs. 37 in 2019). Commissions and Related Fees for the nine months ended September 30, 2020 increased $15.9 million, or 12%, versus the nine months ended September 30, 2019, as a result of elevated volatility during the first half of 2020.

Other Revenue, net, for the three months ended September 30, 2020 increased versus the three months ended September 30, 2019, primarily reflecting gains on the investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program, as the market continued to improve during the quarter. Other Revenue, net, for the nine months ended September 30, 2020 decreased versus the nine months ended September 30, 2019, primarily reflecting lower performance of the investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program.

Adjusted Expenses

Adjusted compensation costs were $250.9 million for the three months ended September 30, 2020, an increase of 10% from the third quarter of last year. The Adjusted compensation ratio was 64.3% for the three months ended September 30, 2020, compared to 58.3% for the three months ended September 30, 2019. Adjusted compensation costs were $837.5 million for the nine months ended September 30, 2020, an increase of 9% compared to the nine months ended September 30, 2019. The Adjusted compensation ratio was 64.0% for the nine months ended September 30, 2020, compared to 58.2% for the nine months ended September 30, 2019. The increase in the amount of Adjusted compensation recognized in the three and nine months ended September 30, 2020 is primarily driven by higher levels of incentive compensation recognized this year, higher amortization of unvested share-based and deferred cash awards and higher base salaries, primarily due to promotions. The resulting Adjusted compensation ratios are higher than the comparable periods for 2019 due to these increases, as well as lower Other Revenue earned during the nine months ended September 30, 2020 resulting from lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program. The Adjusted compensation ratio in any given period is subject to fluctuation based, in part, on the amount of revenue earned in that period.

Adjusted Non-Compensation Costs for the three months ended September 30, 2020 were $67.8 million, a decrease of 18% from the third quarter of last year. The decrease in Adjusted Non-Compensation Costs versus last year primarily reflects decreased travel and related expenses related to prolonged travel restrictions. The ratio of Adjusted Non-Compensation Costs to Adjusted Net Revenues for the three months ended September 30, 2020 of 17.4% decreased from 21.2% for the third quarter of last year. Adjusted Non-Compensation Costs for the nine months ended September 30, 2020 were $220.4 million, a decrease of 9% from the nine months ended September 30, 2019. The decrease in Non-Compensation Costs versus last year primarily reflects decreased travel and related expenses, related to prolonged travel restrictions, and decreased professional fees, partially offset by increased bad debt expense. The ratio of Adjusted Non-Compensation Costs to Adjusted Net Revenues for the nine months ended September 30, 2020 of 16.8% decreased from 18.5% for the nine months ended September 30, 2019.

Investment Management

Advisory Fees on an Adjusted basis reflect the reclassification of earnings related to our equity investment in Luminis of $570 and $1,171(1) for the three and nine months ended September 30, 2020, respectively, and $282 and $756 for the three and nine months ended September 30, 2019, respectively.

(2) Includes Advisory and Underwriting Transactions.

Adjusted Revenues

During the three months ended September 30, 2020, fees from Advisory services decreased $49.9 million, or 16%, versus the three months ended September 30, 2019, reflecting a decrease in the number of Advisory fees earned and a decline in revenue earned from large transactions. Underwriting Fees of $66.5 million for the three months ended September 30, 2020 increased $48.9 million, or 278%, versus the three months ended September 30, 2019, as underwriting activity remained elevated from prior year levels. We participated in 30 underwriting transactions during the three months ended September 30, 2020 (vs. 18 in Q3 2019); 23 as a bookrunner (vs. 10 in Q3 2019). Commissions and Related Fees for the three months ended September 30, 2020 decreased $3.0 million, or 6%, versus the three months ended September 30, 2019.

During the nine months ended September 30, 2020, fees from Advisory services decreased $124.2 million, or 11%, versus the nine months ended September 30, 2019, reflecting a decrease in the number of Advisory fees earned and a decline in revenue earned from large transactions. Underwriting Fees of $181.2 million for the nine months ended September 30, 2020 increased $119.8 million, or 195%, versus the nine months ended September 30, 2019, as we closed several of the largest deals in our history. We participated in 78 underwriting transactions during the nine months ended September 30, 2020 (vs. 57 in 2019); 52 as a bookrunner (vs. 37 in 2019). Commissions and Related Fees for the nine months ended September 30, 2020 increased $15.9 million, or 12%, versus the nine months ended September 30, 2019, as a result of elevated volatility during the first half of 2020.

Other Revenue, net, for the three months ended September 30, 2020 increased versus the three months ended September 30, 2019, primarily reflecting gains on the investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program, as the market continued to improve during the quarter. Other Revenue, net, for the nine months ended September 30, 2020 decreased versus the nine months ended September 30, 2019, primarily reflecting lower performance of the investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program.

Adjusted Expenses

Adjusted compensation costs were $250.9 million for the three months ended September 30, 2020, an increase of 10% from the third quarter of last year. The Adjusted compensation ratio was 64.3% for the three months ended September 30, 2020, compared to 58.3% for the three months ended September 30, 2019. Adjusted compensation costs were $837.5 million for the nine months ended September 30, 2020, an increase of 9% compared to the nine months ended September 30, 2019. The Adjusted compensation ratio was 64.0% for the nine months ended September 30, 2020, compared to 58.2% for the nine months ended September 30, 2019. The increase in the amount of Adjusted compensation recognized in the three and nine months ended September 30, 2020 is primarily driven by higher levels of incentive compensation recognized this year, higher amortization of unvested share-based and deferred cash awards and higher base salaries, primarily due to promotions. The resulting Adjusted compensation ratios are higher than the comparable periods for 2019 due to these increases, as well as lower Other Revenue earned during the nine months ended September 30, 2020 resulting from lower performance of our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program. The Adjusted compensation ratio in any given period is subject to fluctuation based, in part, on the amount of revenue earned in that period.

Adjusted Non-Compensation Costs for the three months ended September 30, 2020 were $67.8 million, a decrease of 18% from the third quarter of last year. The decrease in Adjusted Non-Compensation Costs versus last year primarily reflects decreased travel and related expenses related to prolonged travel restrictions. The ratio of Adjusted Non-Compensation Costs to Adjusted Net Revenues for the three months ended September 30, 2020 of 17.4% decreased from 21.2% for the third quarter of last year. Adjusted Non-Compensation Costs for the nine months ended September 30, 2020 were $220.4 million, a decrease of 9% from the nine months ended September 30, 2019. The decrease in Non-Compensation Costs versus last year primarily reflects decreased travel and related expenses, related to prolonged travel restrictions, and decreased professional fees, partially offset by increased bad debt expense. The ratio of Adjusted Non-Compensation Costs to Adjusted Net Revenues for the nine months ended September 30, 2020 of 16.8% decreased from 18.5% for the nine months ended September 30, 2019.

Investment Management

Adjusted

Three Months Ended Nine Months Ended

September September % September September % 30, 2020 30, 2019 Change 30, 2020 30, 2019 Change

(dollars in thousands)

Net Revenues:

Asset Managementand $ 16,566 $ 14,930 11 % $ 47,106 $ 43,922 7 %AdministrationFees

Other Revenue, 1,672 1,536 9 % 1,024 5,533 (81 %)net

Net Revenues 18,238 16,466 11 % 48,130 49,455 (3 %)



Expenses:

EmployeeCompensation and 8,956 8,624 4 % 26,047 25,579 2 %Benefits

Non-Compensation 3,215 3,416 (6 %) 10,482 10,627 (1 %)Costs

Total Expenses 12,171 12,040 1 % 36,529 36,206 1 %



Operating Income $ 6,067 $ 4,426 37 % $ 11,601 $ 13,249 (12 %)



Compensation 49.1 % 52.4 % 54.1 % 51.7 % Ratio

Non-Compensation 17.6 % 20.7 % 21.8 % 21.5 % Ratio

Operating Margin 33.3 % 26.9 % 24.1 % 26.8 %



Assets UnderManagement (in millions)^(1)

Wealth $ 9,517 $ 8,629 10 % $ 9,517 $ 8,629 10 %Management^(2)

Institutional 1,420 1,627 (13 %) 1,420 1,627 (13 %)Asset Management

Total Assets $ 10,937 $ 10,256 7 % $ 10,937 $ 10,256 7 %Under Management

(1)

Assets Under Management reflect end of period amounts from our consolidated subsidiaries.

(2)

Assets Under Management includes Evercore assets which are managed by Evercore Wealth Management of $223.4 million and $318.5 million as of September 30, 2020 and 2019, respectively.

Adjusted Revenues

(1) Assets Under Management reflect end of period amounts from our consolidated subsidiaries.

Assets Under Management includes Evercore assets which are managed by(2) Evercore Wealth Management of $223.4 million and $318.5 million as of September 30, 2020 and 2019, respectively.

Adjusted Revenues

Adjusted

Three Months Ended Nine Months Ended

September September % September September % 30, 2020 30, 2019 Change 30, 2020 30, 2019 Change

(dollars in thousands)

Asset Managementand AdministrationFees:

Wealth $ 13,664 $ 12,155 12 % $ 38,624 $ 35,408 9 %Management

Institutional 361 495 (27 %) 1,101 2,044 (46 %)Asset Management

Equity inEarnings of 2,541 2,280 11 % 7,381 6,470 14 %Affiliates^(1)

Total AssetManagement and $ 16,566 $ 14,930 11 % $ 47,106 $ 43,922 7 %AdministrationFees

(1)

Equity in ABS and Atalanta Sosnoff on a U.S. GAAP basis are reclassified from Asset Management and Administration Fees to Income from Equity Method Investments.

Adjusted Asset Management and Administration Fees of $16.6 million for the three months ended September 30, 2020 increased 11% compared to the third quarter of last year, principally driven by an increase in fees from Wealth Management clients, which increased 12% compared to the third quarter of last year, as associated AUM increased 10%.

Equity in Earnings of Affiliates of $2.5 million for the three months ended September 30, 2020 increased 11% relative to the third quarter of last year, driven principally by higher income earned in the third quarter of 2020 by Atalanta Sosnoff.

Adjusted Asset Management and Administration Fees of $47.1 million for the nine months ended September 30, 2020 increased 7% compared to the nine months ended September 30, 2019, principally driven by an increase in fees from Wealth Management clients, which increased 9% compared to the nine months ended September 30, 2019, as associated AUM increased 10%.

Equity in Earnings of Affiliates of $7.4 million for the nine months ended September 30, 2020 increased 14% relative to the nine months ended September 30, 2019, driven by higher income earned by Atalanta Sosnoff and ABS in 2020.

Other Revenue, net, which includes income from our legacy private equity investments, increased 9% versus the three months ended September 30, 2019 and decreased 81% versus the nine months ended September 30, 2019.

Adjusted Expenses

Investment Management's Adjusted expenses for the three months ended September 30, 2020 were $12.2 million, an increase of 1% compared to the third quarter of last year, primarily due to an increase in compensation costs, partially offset by a decrease in Non-Compensation Costs. Investment Management's Adjusted expenses for the nine months ended September 30, 2020 were $36.5 million, an increase of 1% compared to the nine months ended September 30, 2019, primarily due to an increase in compensation costs, partially offset by a decrease in Non-Compensation Costs.

Liquidity

The Company continues to maintain a strong balance sheet, holding cash and cash equivalents of $1.1 billion and investment securities of $100.8 million at September 30, 2020. Current assets exceed current liabilities by $1.0 billion at September 30, 2020. Amounts due related to the Notes Payable were $374.5 million at September 30, 2020.

Deferred Compensation

During the nine months ended September 30, 2020, the Company granted to certain employees approximately 1.9 million unvested RSUs. In June 2020, the Company's stockholders approved the Amended and Restated 2016 Evercore Inc. Stock Incentive Plan (the "Amended 2016 Plan"). The total shares available to be granted in the future under the Amended 2016 Plan was approximately 7.0 million as of September 30, 2020.

The Company recognized compensation expense related to our deferred cash compensation program and restricted stock units of $27.4 million and $46.9 million, respectively, for the three months ended September 30, 2020 and $85.3 million and $147.4 million, respectively, for the nine months ended September 30, 2020. The Company recognized compensation expense related to our deferred cash compensation program and restricted stock units of $15.3 million and $50.2 million, respectively, for the three months ended September 30, 2019 and $50.8 million and $162.3 million, respectively, for the nine months ended September 30, 2019.

Capital Return Transactions

On October 20, 2020, the Board of Directors of Evercore declared a quarterly dividend of $0.61 per share to be paid on December 11, 2020 to common stockholders of record on November 27, 2020.

During the three months ended September 30, 2020, the Company repurchased approximately 16 thousand shares from employees for the net settlement of stock-based compensation awards at an average price per share of $58.37. During the nine months ended September 30, 2020, the Company repurchased approximately 1.0 million shares from employees for the net settlement of stock-based compensation awards at an average price per share of $76.18, and approximately 0.9 million shares at an average price per share of $75.93 in open market transactions pursuant to the Company's share repurchase program. The aggregate approximately 1.9 million shares were acquired at an average price per share of $76.07.

Conference Call

Evercore will host a related conference call beginning at 8:00 a.m. Eastern Time, Wednesday, October 21, 2020, accessible via telephone and the Internet. Investors and analysts may participate in the live conference call by dialing (877) 359-9508 (toll-free domestic) or (224) 357-2393 (international); passcode: 2882467. Please register at least 10 minutes before the conference call begins. A replay of the call will be available for one week via telephone starting approximately one hour after the call ends. The replay can be accessed at (855) 859-2056 (toll-free domestic) or (404) 537-3406 (international); passcode: 2882467. 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 after the call.

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 North America, 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 reflect management's view of 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 Annex I.

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 presentation are forward-looking statements, including with respect to the worldwide COVID-19 pandemic, 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, 2019, 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, including those statements herein with respect to the adverse impact that the COVID-19 pandemic has had, and may continue to have, on our business. 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.

With respect to any securities offered by any private equity fund referenced herein, such securities have not been, and will not be registered, under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

ANNEX I

Equity in ABS and Atalanta Sosnoff on a U.S. GAAP basis are reclassified(1) from Asset Management and Administration Fees to Income from Equity Method Investments.

Adjusted Asset Management and Administration Fees of $16.6 million for the three months ended September 30, 2020 increased 11% compared to the third quarter of last year, principally driven by an increase in fees from Wealth Management clients, which increased 12% compared to the third quarter of last year, as associated AUM increased 10%.

Equity in Earnings of Affiliates of $2.5 million for the three months ended September 30, 2020 increased 11% relative to the third quarter of last year, driven principally by higher income earned in the third quarter of 2020 by Atalanta Sosnoff.

Adjusted Asset Management and Administration Fees of $47.1 million for the nine months ended September 30, 2020 increased 7% compared to the nine months ended September 30, 2019, principally driven by an increase in fees from Wealth Management clients, which increased 9% compared to the nine months ended September 30, 2019, as associated AUM increased 10%.

Equity in Earnings of Affiliates of $7.4 million for the nine months ended September 30, 2020 increased 14% relative to the nine months ended September 30, 2019, driven by higher income earned by Atalanta Sosnoff and ABS in 2020.

Other Revenue, net, which includes income from our legacy private equity investments, increased 9% versus the three months ended September 30, 2019 and decreased 81% versus the nine months ended September 30, 2019.

Adjusted Expenses

Investment Management's Adjusted expenses for the three months ended September 30, 2020 were $12.2 million, an increase of 1% compared to the third quarter of last year, primarily due to an increase in compensation costs, partially offset by a decrease in Non-Compensation Costs. Investment Management's Adjusted expenses for the nine months ended September 30, 2020 were $36.5 million, an increase of 1% compared to the nine months ended September 30, 2019, primarily due to an increase in compensation costs, partially offset by a decrease in Non-Compensation Costs.

Liquidity

The Company continues to maintain a strong balance sheet, holding cash and cash equivalents of $1.1 billion and investment securities of $100.8 million at September 30, 2020. Current assets exceed current liabilities by $1.0 billion at September 30, 2020. Amounts due related to the Notes Payable were $374.5 million at September 30, 2020.

Deferred Compensation

During the nine months ended September 30, 2020, the Company granted to certain employees approximately 1.9 million unvested RSUs. In June 2020, the Company's stockholders approved the Amended and Restated 2016 Evercore Inc. Stock Incentive Plan (the "Amended 2016 Plan"). The total shares available to be granted in the future under the Amended 2016 Plan was approximately 7.0 million as of September 30, 2020.

The Company recognized compensation expense related to our deferred cash compensation program and restricted stock units of $27.4 million and $46.9 million, respectively, for the three months ended September 30, 2020 and $85.3 million and $147.4 million, respectively, for the nine months ended September 30, 2020. The Company recognized compensation expense related to our deferred cash compensation program and restricted stock units of $15.3 million and $50.2 million, respectively, for the three months ended September 30, 2019 and $50.8 million and $162.3 million, respectively, for the nine months ended September 30, 2019.

Capital Return Transactions

On October 20, 2020, the Board of Directors of Evercore declared a quarterly dividend of $0.61 per share to be paid on December 11, 2020 to common stockholders of record on November 27, 2020.

During the three months ended September 30, 2020, the Company repurchased approximately 16 thousand shares from employees for the net settlement of stock-based compensation awards at an average price per share of $58.37. During the nine months ended September 30, 2020, the Company repurchased approximately 1.0 million shares from employees for the net settlement of stock-based compensation awards at an average price per share of $76.18, and approximately 0.9 million shares at an average price per share of $75.93 in open market transactions pursuant to the Company's share repurchase program. The aggregate approximately 1.9 million shares were acquired at an average price per share of $76.07.

Conference Call

Evercore will host a related conference call beginning at 8:00 a.m. Eastern Time, Wednesday, October 21, 2020, accessible via telephone and the Internet. Investors and analysts may participate in the live conference call by dialing (877) 359-9508 (toll-free domestic) or (224) 357-2393 (international); passcode: 2882467. Please register at least 10 minutes before the conference call begins. A replay of the call will be available for one week via telephone starting approximately one hour after the call ends. The replay can be accessed at (855) 859-2056 (toll-free domestic) or (404) 537-3406 (international); passcode: 2882467. 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 after the call.

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 North America, 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 reflect management's view of 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 Annex I.

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 presentation are forward-looking statements, including with respect to the worldwide COVID-19 pandemic, 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, 2019, 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, including those statements herein with respect to the adverse impact that the COVID-19 pandemic has had, and may continue to have, on our business. 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.

With respect to any securities offered by any private equity fund referenced herein, such securities have not been, and will not be registered, under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

ANNEX I

Schedule Page Number

Unaudited Condensed Consolidated Statements of Operations for the A-1Three and Nine Months Ended September 30, 2020 and 2019

Adjusted:

Adjusted Results (Unaudited) A-2

U.S. GAAP Reconciliation to Adjusted Results (Unaudited) A-4

U.S. GAAP Reconciliation to Adjusted Results for the Trailing Twelve A-5Months (Unaudited)

U.S. GAAP Segment Reconciliation to Adjusted Results for the Three A-6and Nine Months ended September 30, 2020 (Unaudited)

U.S. GAAP Segment Reconciliation to Adjusted Results for the Three A-7and Nine Months ended September 30, 2019 (Unaudited)

U.S. GAAP Segment Reconciliation to Consolidated Results (Unaudited) A-8

Notes to Unaudited Condensed Consolidated Adjusted Financial Data A-9

EVERCORE INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019(dollars in thousands, except per share data) (UNAUDITED)

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019

Revenues

Investment Banking:

Advisory Fees

$

270,662

$

320,885

$

965,662

$

1,090,309

Underwriting Fees

66,499

17,598

181,182

61,428

Commissions and Related Fees

43,853

46,820

153,353

137,417

Asset Management and Administration Fees

14,025

12,650

39,725

37,452

Other Revenue, Including Interest and Investments

12,479

9,911

13,047

35,886

Total Revenues

407,518

407,864

1,352,969

1,362,492

Interest Expense(1)

5,003

5,666

16,372

13,921

Net Revenues

402,515

402,198

1,336,597

1,348,571

Expenses

Employee Compensation and Benefits

259,812

241,702

864,600

803,657

Occupancy and Equipment Rental

18,043

16,946

54,318

51,225

Professional Fees

17,324

21,577

53,165

60,912

Travel and Related Expenses

3,182

17,589

23,089

54,650

Communications and Information Services

13,868

12,146

40,704

34,773

Depreciation and Amortization

6,214

8,419

20,060

23,123

Execution, Clearing and Custody Fees

2,840

3,265

10,230

9,483

Special Charges, Including Business Realignment Costs

7,380

1,029

39,614

3,087

Acquisition and Transition Costs

454

380

560

488

Other Operating Expenses

9,712

8,801

30,539

26,185

Total Expenses

338,829

331,854

1,136,879

1,067,583

Income Before Income from Equity Method Investments and Income Taxes

63,686

70,344

199,718

280,988

Income from Equity Method Investments

3,111

2,562

8,552

7,226

Income Before Income Taxes

66,797

72,906

208,270

288,214

Provision for Income Taxes

15,677

20,402

51,042

60,253

Net Income

51,120

52,504

157,228

227,961

Net Income Attributable to Noncontrolling Interest

8,510

9,226

27,031

35,709

Net Income Attributable to Evercore Inc.

$

42,610

$

43,278

$

130,197

$

192,252

Net Income Attributable to Evercore Inc. Common Shareholders

$

42,610

$

43,278

$

130,197

$

192,252

Weighted Average Shares of Class A Common Stock Outstanding:

Basic

40,694

39,704

40,441

40,246

Diluted

42,343

42,789

42,185

43,437

Net Income Per Share Attributable to Evercore Inc. Common Shareholders:

Basic

$

1.05

$

1.09

$

3.22

$

4.78

Diluted

$

1.01

$

1.01

$

3.09

$

4.43

EVERCORE INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSTHREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019(dollars in thousands, except per share data)(UNAUDITED)



Three Months Ended Nine Months Ended September September 30, 30,

2020 2019 2020 2019



Revenues

Investment Banking:

Advisory Fees $ 270,662 $ 320,885 $ 965,662 $ 1,090,309

Underwriting Fees 66,499 17,598 181,182 61,428

Commissions and 43,853 46,820 153,353 137,417 Related Fees

Asset Management and 14,025 12,650 39,725 37,452 Administration Fees

Other Revenue,Including Interest and 12,479 9,911 13,047 35,886 Investments

Total Revenues 407,518 407,864 1,352,969 1,362,492

Interest Expense^(1) 5,003 5,666 16,372 13,921

Net Revenues 402,515 402,198 1,336,597 1,348,571



Expenses

Employee Compensation 259,812 241,702 864,600 803,657 and Benefits

Occupancy and 18,043 16,946 54,318 51,225 Equipment Rental

Professional Fees 17,324 21,577 53,165 60,912

Travel and Related 3,182 17,589 23,089 54,650 Expenses

Communications and 13,868 12,146 40,704 34,773 Information Services

Depreciation and 6,214 8,419 20,060 23,123 Amortization

Execution, Clearing 2,840 3,265 10,230 9,483 and Custody Fees

Special Charges,Including Business 7,380 1,029 39,614 3,087 Realignment Costs

Acquisition and 454 380 560 488 Transition Costs

Other Operating 9,712 8,801 30,539 26,185 Expenses

Total Expenses 338,829 331,854 1,136,879 1,067,583



Income Before Incomefrom Equity Method 63,686 70,344 199,718 280,988 Investments and IncomeTaxes

Income from Equity 3,111 2,562 8,552 7,226 Method Investments

Income Before Income 66,797 72,906 208,270 288,214 Taxes

Provision for Income 15,677 20,402 51,042 60,253 Taxes

Net Income 51,120 52,504 157,228 227,961

Net IncomeAttributable to 8,510 9,226 27,031 35,709 NoncontrollingInterest

Net IncomeAttributable to $ 42,610 $ 43,278 $ 130,197 $ 192,252 Evercore Inc.



Net IncomeAttributable to $ 42,610 $ 43,278 $ 130,197 $ 192,252 Evercore Inc. CommonShareholders



Weighted AverageShares of Class A Common StockOutstanding:

Basic 40,694 39,704 40,441 40,246

Diluted 42,343 42,789 42,185 43,437



Net Income Per ShareAttributable to Evercore Inc. CommonShareholders:

Basic $ 1.05 $ 1.09 $ 3.22 $ 4.78

Diluted $ 1.01 $ 1.01 $ 3.09 $ 4.43

(1)

Includes interest expense on long-term debt and interest expense on short-term repurchase agreements.

Adjusted Results

Throughout the discussion of Evercore's business segments 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 vested and unvested Class A Evercore LP Units, as well as Acquisition Related Class E and J Evercore LP Units and Unvested Restricted Stock Units granted to ISI employees, 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 and Investment Management. The differences between the Adjusted and U.S. GAAP results are as follows:

* Assumed Vesting of Evercore LP Units and Exchange into Class A Shares. The Company incurred expenses, in Employee Compensation and Benefits, resulting from the vesting of Class E and Class J Evercore LP Units issued in conjunction with the acquisition of ISI. The Adjusted results assume these LP Units have vested and have been exchanged for Class A shares. Accordingly, any expense associated with these units, and related awards, is excluded from the Adjusted results, and 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 these previously granted equity interests, and thus the Adjusted results reflect the exchange of vested and unvested Class A and E Evercore LP Units and IPO related restricted stock unit awards 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 acquisition-related charges: Amortization of Intangible Assets and Other Purchase Accounting-related Amortization. Amortization of intangible assets and other purchase accounting-related amortization from the acquisition of ISI and certain other acquisitions. Acquisition and Transition Costs. Primarily professional fees incurred and costs related to transitioning acquisitions or divestitures. Gain on Sale of ECB Trust Business. The gain resulting from the sale of the ECB Trust business in the third quarter of 2020 is excluded from the Adjusted presentation. * Special Charges, Including Business Realignment Costs. Expenses during 2020 that are excluded from the Adjusted presentation relate to separation and transition benefits and related costs as a result of the Company's review of its operations and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the previously announced expansion of our headquarters in New York and our business realignment initiatives. Expenses during 2019 that are excluded from the Adjusted presentation relate to the acceleration of depreciation expense for leasehold improvements in conjunction with the previously announced expansion of our headquarters in New York. * Income Taxes. Evercore is organized as a series of Limited Liability Companies, Partnerships, C-Corporations and a Public Corporation and therefore, not all of the Company's income is subject to corporate-level taxes. As a result, adjustments have been made to the Adjusted earnings to assume that the Company is subject to the statutory tax rates of a C-Corporation under a conventional corporate tax structure in the U.S. at the prevailing corporate rates and that all deferred tax assets relating to foreign operations are fully realizable within the structure on a consolidated basis. This assumption is consistent with the assumption that certain Evercore LP Units are vested and exchanged into Class A shares, as discussed in Item 1 above, as the assumed exchange would change the tax structure of the Company. * Presentation of Interest Expense. The Adjusted results present interest expense on short-term repurchase agreements, within the Investment Management segment, in Other Revenues, net, as the Company's Management believes it is more meaningful to present the spread on net interest resulting from the matched financial assets and liabilities. In addition, Adjusted Investment Banking and Investment Management Operating Income are presented 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 more meaningful presentation.(1) Includes interest expense on long-term debt and interest expense on short-term repurchase agreements.

Adjusted Results

Throughout the discussion of Evercore's business segments 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 vested and unvested Class A Evercore LP Units, as well as Acquisition Related Class E and J Evercore LP Units and Unvested Restricted Stock Units granted to ISI employees, 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 and Investment Management. The differences between the Adjusted and U.S. GAAP results are as follows:

* Assumed Vesting of Evercore LP Units and Exchange into Class A Shares. The Company incurred expenses, in Employee Compensation and Benefits, resulting from the vesting of Class E and Class J Evercore LP Units issued in conjunction with the acquisition of ISI. The Adjusted results assume these LP Units have vested and have been exchanged for Class A shares. Accordingly, any expense associated with these units, and related awards, is excluded from the Adjusted results, and 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 these previously granted equity interests, and thus the Adjusted results reflect the exchange of vested and unvested Class A and E Evercore LP Units and IPO related restricted stock unit awards 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 acquisition-related charges: Amortization of Intangible Assets and Other Purchase Accounting-related Amortization. Amortization of intangible assets and other purchase accounting-related amortization from the acquisition of ISI and certain other acquisitions. Acquisition and Transition Costs. Primarily professional fees incurred and costs related to transitioning acquisitions or divestitures. Gain on Sale of ECB Trust Business. The gain resulting from the sale of the ECB Trust business in the third quarter of 2020 is excluded from the Adjusted presentation. * Special Charges, Including Business Realignment Costs. Expenses during 2020 that are excluded from the Adjusted presentation relate to separation and transition benefits and related costs as a result of the Company's review of its operations and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the previously announced expansion of our headquarters in New York and our business realignment initiatives. Expenses during 2019 that are excluded from the Adjusted presentation relate to the acceleration of depreciation expense for leasehold improvements in conjunction with the previously announced expansion of our headquarters in New York. * Income Taxes. Evercore is organized as a series of Limited Liability Companies, Partnerships, C-Corporations and a Public Corporation and therefore, not all of the Company's income is subject to corporate-level taxes. As a result, adjustments have been made to the Adjusted earnings to assume that the Company is subject to the statutory tax rates of a C-Corporation under a conventional corporate tax structure in the U.S. at the prevailing corporate rates and that all deferred tax assets relating to foreign operations are fully realizable within the structure on a consolidated basis. This assumption is consistent with the assumption that certain Evercore LP Units are vested and exchanged into Class A shares, as discussed in Item 1 above, as the assumed exchange would change the tax structure of the Company. * Presentation of Interest Expense. The Adjusted results present interest expense on short-term repurchase agreements, within the Investment Management segment, in Other Revenues, net, as the Company's Management believes it is more meaningful to present the spread on net interest resulting from the matched financial assets and liabilities. In addition, Adjusted Investment Banking and Investment Management Operating Income are presented 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 more meaningful presentation.EVERCORE INC.

U.S. GAAP RECONCILIATION TO ADJUSTED RESULTS

(dollars in thousands, except per share data)

(UNAUDITED)



Three Months Ended Nine Months Ended

September September September 30, September 30, 30, 2020 30, 2019 2020 2019

Net Revenues - U.S. $ 402,515 $ 402,198 $ 1,336,597 $ 1,348,571 GAAP

Income from EquityMethod Investments 3,111 2,562 8,552 7,226 (1)

Interest Expense on 4,218 3,786 13,594 8,354 Debt (2)

Gain on Sale of ECB (1,355 ) - (1,355 ) - Trust Business (3)

Net Revenues - $ 408,489 $ 408,546 $ 1,357,388 $ 1,364,151 Adjusted



Compensation Expense $ 259,812 $ 241,702 $ 864,600 $ 803,657 - U.S. GAAP

Amortization of LPUnits and Certain - (4,551 ) (1,067 ) (12,346 )Other Awards (4)

Compensation Expense $ 259,812 $ 237,151 $ 863,533 $ 791,311 - Adjusted



Operating Income - $ 63,686 $ 70,344 $ 199,718 $ 280,988 U.S. GAAP

Income from EquityMethod Investments 3,111 2,562 8,552 7,226 (1)

Pre-Tax Income - 66,797 72,906 208,270 288,214 U.S. GAAP

Gain on Sale of ECB (1,355 ) - (1,355 ) - Trust Business (3)

Amortization of LPUnits and Certain - 4,551 1,067 12,346 Other Awards (4)

Special Charges,Including Business 7,380 1,029 39,614 3,087 Realignment Costs(5)

Intangible AssetAmortization / OtherPurchase 169 2,157 1,183 6,471 Accounting-relatedAmortization (6a)

Acquisition andTransition Costs 454 380 560 488 (6b)

Pre-Tax Income - 73,445 81,023 249,339 310,606 Adjusted

Interest Expense on 4,218 3,786 13,594 8,354 Debt (2)

Operating Income - $ 77,663 $ 84,809 $ 262,933 $ 318,960 Adjusted



Provision for Income $ 15,677 $ 20,402 $ 51,042 $ 60,253 Taxes - U.S. GAAP

Income Taxes (7) 4,292 (235 ) 14,002 4,555

Provision for Income $ 19,969 $ 20,167 $ 65,044 $ 64,808 Taxes - Adjusted



Net IncomeAttributable to $ 42,610 $ 43,278 $ 130,197 $ 192,252 Evercore Inc. - U.S.GAAP

Gain on Sale of ECB (1,355 ) - (1,355 ) - Trust Business (3)

Amortization of LPUnits and Certain - 4,551 1,067 12,346 Other Awards (4)

Special Charges,Including Business 7,380 1,029 39,614 3,087 Realignment Costs(5)

Intangible AssetAmortization / OtherPurchase 169 2,157 1,183 6,471 Accounting-relatedAmortization (6a)

Acquisition andTransition Costs 454 380 560 488 (6b)

Income Taxes (7) (4,292 ) 235 (14,002 ) (4,555 )

Noncontrolling 7,662 8,843 24,949 33,080 Interest (8)

Net IncomeAttributable to $ 52,628 $ 60,473 $ 182,213 $ 243,169 Evercore Inc. -Adjusted



Diluted SharesOutstanding - U.S. 42,343 42,789 42,185 43,437 GAAP

LP Units (9) 5,071 5,310 5,161 5,237

Unvested RestrictedStock Units - Event 12 12 12 12 Based (9)

Diluted SharesOutstanding - 47,426 48,111 47,358 48,686 Adjusted



Key Metrics: (a)

Diluted Earnings Per $ 1.01 $ 1.01 $ 3.09 $ 4.43 Share - U.S. GAAP

Diluted Earnings Per $ 1.11 $ 1.26 $ 3.85 $ 4.99 Share - Adjusted



Compensation Ratio - 64.5 % 60.1 % 64.7 % 59.6 %U.S. GAAP

Compensation Ratio - 63.6 % 58.0 % 63.6 % 58.0 %Adjusted



Operating Margin - 15.8 % 17.5 % 14.9 % 20.8 %U.S. GAAP

Operating Margin - 19.0 % 20.8 % 19.4 % 23.4 %Adjusted



Effective Tax Rate - 23.5 % 28.0 % 24.5 % 20.9 %U.S. GAAP

Effective Tax Rate - 27.2 % 24.9 % 26.1 % 20.9 %Adjusted

(a)

Reconciliations of the key metrics from U.S. GAAP to Adjusted results are a derivative of the reconciliations of their components above.

(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 RECONCILIATION TO ADJUSTED RESULTS

TRAILING TWELVE MONTHS

(dollars in thousands)

(UNAUDITED)

Consolidated

Twelve Months Ended

September 30, 2020

September 30, 2019

Net Revenues - U.S. GAAP

$

1,996,724

$

2,119,977

Income from Equity Method Investments (1)

12,322

9,678

Interest Expense on Debt (2)

18,157

10,694

Gain on Sale of ECB Trust Business (3)

(1,355

)

-

Net Revenues - Adjusted

$

2,025,848

$

2,140,349

Compensation Expense - U.S. GAAP

$

1,261,920

$

1,234,293

Amortization of LP Units and Certain Other Awards (4)

(6,904

)

(16,117

)

Compensation Expense - Adjusted

$

1,255,016

$

1,218,176

Compensation Ratio - U.S. GAAP (a)

63.2

%

58.2

%

Compensation Ratio - Adjusted (a)

62.0

%

56.9

%

Investment Banking

Twelve Months Ended

September 30, 2020

September 30, 2019

Net Revenues - U.S. GAAP

$

1,940,702

$

2,064,900

Income from Equity Method Investments (1)

1,331

977

Interest Expense on Debt (2)

18,157

10,694

Net Revenues - Adjusted

$

1,960,190

$

2,076,571

Compensation Expense - U.S. GAAP

$

1,227,270

$

1,201,095

Amortization of LP Units and Certain Other Awards (4)

(6,904

)

(16,117

)

Compensation Expense - Adjusted

$

1,220,366

$

1,184,978

Compensation Ratio - U.S. GAAP (a)

63.2

%

58.2

%

Compensation Ratio - Adjusted (a)

62.3

%

57.1

%

EVERCORE INC.

U.S. GAAP RECONCILIATION TO ADJUSTED RESULTS

TRAILING TWELVE MONTHS

(dollars in thousands)

(UNAUDITED)

Consolidated

Twelve Months Ended

September 30, September 30, 2020 2019

Net Revenues - U.S. GAAP $ 1,996,724 $ 2,119,977

Income from Equity Method Investments (1) 12,322 9,678

Interest Expense on Debt (2) 18,157 10,694

Gain on Sale of ECB Trust Business (3) (1,355 ) -

Net Revenues - Adjusted $ 2,025,848 $ 2,140,349



Compensation Expense - U.S. GAAP $ 1,261,920 $ 1,234,293

Amortization of LP Units and Certain Other (6,904 ) (16,117 )Awards (4)

Compensation Expense - Adjusted $ 1,255,016 $ 1,218,176



Compensation Ratio - U.S. GAAP (a) 63.2 % 58.2 %

Compensation Ratio - Adjusted (a) 62.0 % 56.9 %



Investment Banking

Twelve Months Ended

September 30, September 30, 2020 2019

Net Revenues - U.S. GAAP $ 1,940,702 $ 2,064,900

Income from Equity Method Investments (1) 1,331 977

Interest Expense on Debt (2) 18,157 10,694

Net Revenues - Adjusted $ 1,960,190 $ 2,076,571



Compensation Expense - U.S. GAAP $ 1,227,270 $ 1,201,095

Amortization of LP Units and Certain Other (6,904 ) (16,117 )Awards (4)

Compensation Expense - Adjusted $ 1,220,366 $ 1,184,978



Compensation Ratio - U.S. GAAP (a) 63.2 % 58.2 %

Compensation Ratio - Adjusted (a) 62.3 % 57.1 %

(a)

Reconciliations of the key metrics from U.S. GAAP to Adjusted results are a derivative of the reconciliations of their components above.

(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 NINE MONTHS ENDED SEPTEMBER 30, 2020

(dollars in thousands)

(UNAUDITED)

Investment Banking Segment

Three Months Ended September 30, 2020

Nine Months Ended September 30, 2020

U.S. GAAP Basis

Adjustments

Non-GAAP Adjusted Basis

U.S. GAAP Basis

Adjustments

Non-GAAP Adjusted Basis

Net Revenues:

Investment Banking:

Advisory Fees

$

270,662

$

570

(1)

$

271,232

$

965,662

$

1,171

(1)

$

966,833

Underwriting Fees

66,499

-

66,499

181,182

-

181,182

Commissions and Related Fees

43,853

-

43,853

153,353

-

153,353

Other Revenue, net

4,449

4,218

(2)

8,667

(5,704

)

13,594

(2)

7,890

Net Revenues

385,463

4,788

390,251

1,294,493

14,765

1,309,258

Expenses:

Employee Compensation and Benefits

250,856

-

250,856

838,553

(1,067

)

(4)

837,486

Non-Compensation Costs

68,122

(323

)

(6)

67,799

221,883

(1,443

)

(6)

220,440

Special Charges, Including Business Realignment Costs

7,380

(7,380

)

(5)

-

39,582

(39,582

)

(5)

-

Total Expenses

326,358

(7,703

)

318,655

1,100,018

(42,092

)

1,057,926

Operating Income (a)

$

59,105

$

12,491

$

71,596

$

194,475

$

56,857

$

251,332

Compensation Ratio (b)

65.1

%

64.3

%

64.8

%

64.0

%

Operating Margin (b)

15.3

%

18.3

%

15.0

%

19.2

%

Investment Management Segment

Three Months Ended September 30, 2020

Nine Months Ended September 30, 2020

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

$

14,025

$

2,541

(1)

$

16,566

$

39,725

$

7,381

(1)

$

47,106

Other Revenue, net

3,027

(1,355

)

(3)

1,672

2,379

(1,355

)

(3)

1,024

Net Revenues

17,052

1,186

18,238

42,104

6,026

48,130

Expenses:

Employee Compensation and Benefits

8,956

-

8,956

26,047

-

26,047

Non-Compensation Costs

3,515

(300

)

(6)

3,215

10,782

(300

)

(6)

10,482

Special Charges, Including Business Realignment Costs

-

-

-

32

(32

)

(5)

-

Total Expenses

12,471

(300

)

12,171

36,861

(332

)

36,529

Operating Income (a)

$

4,581

$

1,486

$

6,067

$

5,243

$

6,358

$

11,601

Compensation Ratio (b)

52.5

%

49.1

%

61.9

%

54.1

%

Operating Margin (b)

26.9

%

33.3

%

12.5

%

24.1

%

EVERCORE INC.

U.S. GAAP SEGMENT RECONCILIATION TO ADJUSTED RESULTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020

(dollars in thousands)

(UNAUDITED)



Investment Banking Segment

Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020

U.S. GAAP Non-GAAP U.S. GAAP Non-GAAP Basis Adjustments Adjusted Basis Adjustments Adjusted Basis Basis

Net Revenues:

Investment Banking:

Advisory Fees $ 270,662 $ 570 (1) $ 271,232 $ 965,662 $ 1,171 (1) $ 966,833

Underwriting 66,499 - 66,499 181,182 - 181,182 Fees

Commissions and 43,853 - 43,853 153,353 - 153,353 Related Fees

Other Revenue, 4,449 4,218 (2) 8,667 (5,704 ) 13,594 (2) 7,890 net

Net Revenues 385,463 4,788 390,251 1,294,493 14,765 1,309,258



Expenses:

EmployeeCompensation and 250,856 - 250,856 838,553 (1,067 ) (4) 837,486 Benefits

Non-Compensation 68,122 (323 ) (6) 67,799 221,883 (1,443 ) (6) 220,440 Costs

Special Charges,IncludingBusiness 7,380 (7,380 ) (5) - 39,582 (39,582 ) (5) - RealignmentCosts

Total Expenses 326,358 (7,703 ) 318,655 1,100,018 (42,092 ) 1,057,926



Operating Income $ 59,105 $ 12,491 $ 71,596 $ 194,475 $ 56,857 $ 251,332 (a)



Compensation 65.1 % 64.3 % 64.8 % 64.0 %Ratio (b)

Operating Margin 15.3 % 18.3 % 15.0 % 19.2 %(b)



Investment Management Segment

Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020

U.S. GAAP Non-GAAP U.S. GAAP Non-GAAP Basis Adjustments Adjusted Basis Adjustments Adjusted Basis Basis

Net Revenues:

Asset Managementand $ 14,025 $ 2,541 (1) $ 16,566 $ 39,725 $ 7,381 (1) $ 47,106 AdministrationFees

Other Revenue, 3,027 (1,355 ) (3) 1,672 2,379 (1,355 ) (3) 1,024 net

Net Revenues 17,052 1,186 18,238 42,104 6,026 48,130



Expenses:

EmployeeCompensation and 8,956 - 8,956 26,047 - 26,047 Benefits

Non-Compensation 3,515 (300 ) (6) 3,215 10,782 (300 ) (6) 10,482 Costs

Special Charges,IncludingBusiness - - - 32 (32 ) (5) - RealignmentCosts

Total Expenses 12,471 (300 ) 12,171 36,861 (332 ) 36,529



Operating Income $ 4,581 $ 1,486 $ 6,067 $ 5,243 $ 6,358 $ 11,601 (a)



Compensation 52.5 % 49.1 % 61.9 % 54.1 %Ratio (b)

Operating Margin 26.9 % 33.3 % 12.5 % 24.1 %(b)

(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.

(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 NINE MONTHS ENDED SEPTEMBER 30, 2019

(dollars in thousands)

(UNAUDITED)

Investment Banking Segment

Three Months Ended September 30, 2019

Nine Months Ended September 30, 2019

U.S. GAAP Basis

Adjustments

Non-GAAP Adjusted Basis

U.S. GAAP Basis

Adjustments

Non-GAAP Adjusted Basis

Net Revenues:

Investment Banking:

Advisory Fees

$

320,885

$

282

(1)

$

321,167

$

1,090,309

$

756

(1)

$

1,091,065

Underwriting Fees

17,598

-

17,598

61,428

-

61,428

Commissions and Related Fees

46,820

-

46,820

137,417

-

137,417

Other Revenue, net

2,709

3,786

(2)

6,495

16,432

8,354

(2)

24,786

Net Revenues

388,012

4,068

392,080

1,305,586

9,110

1,314,696

Expenses:

Employee Compensation and Benefits

233,078

(4,551

)

(4)

228,527

778,078

(12,346

)

(4)

765,732

Non-Compensation Costs

85,507

(2,337

)

(6)

83,170

249,904

(6,651

)

(6)

243,253

Special Charges, Including Business Realignment Costs

1,029

(1,029

)

(5)

-

3,087

(3,087

)

(5)

-

Total Expenses

319,614

(7,917

)

311,697

1,031,069

(22,084

)

1,008,985

Operating Income (a)

$

68,398

$

11,985

$

80,383

$

274,517

$

31,194

$

305,711

Compensation Ratio (b)

60.1

%

58.3

%

59.6

%

58.2

%

Operating Margin (b)

17.6

%

20.5

%

21.0

%

23.3

%

Investment Management Segment

Three Months Ended September 30, 2019

Nine Months Ended September 30, 2019

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

$

12,650

$

2,280

(1)

$

14,930

$

37,452

$

6,470

(1)

$

43,922

Other Revenue, net

1,536

-

1,536

5,533

-

5,533

Net Revenues

14,186

2,280

16,466

42,985

6,470

49,455

Expenses:

Employee Compensation and Benefits

8,624

-

8,624

25,579

-

25,579

Non-Compensation Costs

3,616

(200

)

(6)

3,416

10,935

(308

)

(6)

10,627

Total Expenses

12,240

(200

)

12,040

36,514

(308

)

36,206

Operating Income (a)

$

1,946

$

2,480

$

4,426

$

6,471

$

6,778

$

13,249

Compensation Ratio (b)

60.8

%

52.4

%

59.5

%

51.7

%

Operating Margin (b)

13.7

%

26.9

%

15.1

%

26.8

%

EVERCORE INC.

U.S. GAAP SEGMENT RECONCILIATION TO ADJUSTED RESULTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019

(dollars in thousands)

(UNAUDITED)



Investment Banking Segment

Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019

U.S. GAAP Non-GAAP U.S. GAAP Non-GAAP Basis Adjustments Adjusted Basis Adjustments Adjusted Basis Basis

Net Revenues:

Investment Banking:

Advisory Fees $ 320,885 $ 282 (1) $ 321,167 $ 1,090,309 $ 756 (1) $ 1,091,065

Underwriting 17,598 - 17,598 61,428 - 61,428 Fees

Commissions and 46,820 - 46,820 137,417 - 137,417 Related Fees

Other Revenue, 2,709 3,786 (2) 6,495 16,432 8,354 (2) 24,786 net

Net Revenues 388,012 4,068 392,080 1,305,586 9,110 1,314,696



Expenses:

EmployeeCompensation and 233,078 (4,551 ) (4) 228,527 778,078 (12,346 ) (4) 765,732 Benefits

Non-Compensation 85,507 (2,337 ) (6) 83,170 249,904 (6,651 ) (6) 243,253 Costs

Special Charges,IncludingBusiness 1,029 (1,029 ) (5) - 3,087 (3,087 ) (5) - RealignmentCosts

Total Expenses 319,614 (7,917 ) 311,697 1,031,069 (22,084 ) 1,008,985



Operating Income $ 68,398 $ 11,985 $ 80,383 $ 274,517 $ 31,194 $ 305,711 (a)



Compensation 60.1 % 58.3 % 59.6 % 58.2 %Ratio (b)

Operating Margin 17.6 % 20.5 % 21.0 % 23.3 %(b)



Investment Management Segment

Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019

U.S. GAAP Non-GAAP U.S. GAAP Non-GAAP Basis Adjustments Adjusted Basis Adjustments Adjusted Basis Basis

Net Revenues:

Asset Managementand $ 12,650 $ 2,280 (1) $ 14,930 $ 37,452 $ 6,470 (1) $ 43,922 AdministrationFees

Other Revenue, 1,536 - 1,536 5,533 - 5,533 net

Net Revenues 14,186 2,280 16,466 42,985 6,470 49,455



Expenses:

EmployeeCompensation and 8,624 - 8,624 25,579 - 25,579 Benefits

Non-Compensation 3,616 (200 ) (6) 3,416 10,935 (308 ) (6) 10,627 Costs

Total Expenses 12,240 (200 ) 12,040 36,514 (308 ) 36,206



Operating Income $ 1,946 $ 2,480 $ 4,426 $ 6,471 $ 6,778 $ 13,249 (a)



Compensation 60.8 % 52.4 % 59.5 % 51.7 %Ratio (b)

Operating Margin 13.7 % 26.9 % 15.1 % 26.8 %(b)

(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.

(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 CONSOLIDATED RESULTS

(dollars in thousands)

(UNAUDITED)

U.S. GAAP

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019

Investment Banking

Net Revenues:

Investment Banking:

Advisory Fees

$

270,662

$

320,885

$

965,662

$

1,090,309

Underwriting Fees

66,499

17,598

181,182

61,428

Commissions and Related Fees

43,853

46,820

153,353

137,417

Other Revenue, net

4,449

2,709

(5,704

)

16,432

Net Revenues

385,463

388,012

1,294,493

1,305,586

Expenses:

Employee Compensation and Benefits

250,856

233,078

838,553

778,078

Non-Compensation Costs

68,122

85,507

221,883

249,904

Special Charges, Including Business Realignment Costs

7,380

1,029

39,582

3,087

Total Expenses

326,358

319,614

1,100,018

1,031,069

Operating Income (a)

$

59,105

$

68,398

$

194,475

$

274,517

Investment Management

Net Revenues:

Asset Management and Administration Fees

$

14,025

$

12,650

$

39,725

$

37,452

Other Revenue, net

3,027

1,536

2,379

5,533

Net Revenues

17,052

14,186

42,104

42,985

Expenses:

Employee Compensation and Benefits

8,956

8,624

26,047

25,579

Non-Compensation Costs

3,515

3,616

10,782

10,935

Special Charges, Including Business Realignment Costs

-

-

32

-

Total Expenses

12,471

12,240

36,861

36,514

Operating Income (a)

$

4,581

$

1,946

$

5,243

$

6,471

Total

Net Revenues:

Investment Banking:

Advisory Fees

$

270,662

$

320,885

$

965,662

$

1,090,309

Underwriting Fees

66,499

17,598

181,182

61,428

Commissions and Related Fees

43,853

46,820

153,353

137,417

Asset Management and Administration Fees

14,025

12,650

39,725

37,452

Other Revenue, net

7,476

4,245

(3,325

)

21,965

Net Revenues

402,515

402,198

1,336,597

1,348,571

Expenses:

Employee Compensation and Benefits

259,812

241,702

864,600

803,657

Non-Compensation Costs

71,637

89,123

232,665

260,839

Special Charges, Including Business Realignment Costs

7,380

1,029

39,614

3,087

Total Expenses

338,829

331,854

1,136,879

1,067,583

Operating Income (a)

$

63,686

$

70,344

$

199,718

$

280,988

EVERCORE INC.

U.S. GAAP SEGMENT RECONCILIATION TO CONSOLIDATED RESULTS

(dollars in thousands)

(UNAUDITED)



U.S. GAAP

Three Months Ended Nine Months Ended September September 30, 30,

2020 2019 2020 2019

Investment Banking

Net Revenues:

Investment Banking:

Advisory Fees $ 270,662 $ 320,885 $ 965,662 $ 1,090,309

Underwriting Fees 66,499 17,598 181,182 61,428

Commissions and 43,853 46,820 153,353 137,417 Related Fees

Other Revenue, net 4,449 2,709 (5,704 ) 16,432

Net Revenues 385,463 388,012 1,294,493 1,305,586



Expenses:

Employee Compensation 250,856 233,078 838,553 778,078 and Benefits

Non-Compensation Costs 68,122 85,507 221,883 249,904

Special Charges,Including Business 7,380 1,029 39,582 3,087 Realignment Costs

Total Expenses 326,358 319,614 1,100,018 1,031,069



Operating Income (a) $ 59,105 $ 68,398 $ 194,475 $ 274,517



Investment Management

Net Revenues:

Asset Management and $ 14,025 $ 12,650 $ 39,725 $ 37,452 Administration Fees

Other Revenue, net 3,027 1,536 2,379 5,533

Net Revenues 17,052 14,186 42,104 42,985



Expenses:

Employee Compensation 8,956 8,624 26,047 25,579 and Benefits

Non-Compensation Costs 3,515 3,616 10,782 10,935

Special Charges,Including Business - - 32 - Realignment Costs

Total Expenses 12,471 12,240 36,861 36,514



Operating Income (a) $ 4,581 $ 1,946 $ 5,243 $ 6,471



Total

Net Revenues:

Investment Banking:

Advisory Fees $ 270,662 $ 320,885 $ 965,662 $ 1,090,309

Underwriting Fees 66,499 17,598 181,182 61,428

Commissions and 43,853 46,820 153,353 137,417 Related Fees

Asset Management and 14,025 12,650 39,725 37,452 Administration Fees

Other Revenue, net 7,476 4,245 (3,325 ) 21,965

Net Revenues 402,515 402,198 1,336,597 1,348,571



Expenses:

Employee Compensation 259,812 241,702 864,600 803,657 and Benefits

Non-Compensation Costs 71,637 89,123 232,665 260,839

Special Charges,Including Business 7,380 1,029 39,614 3,087 Realignment Costs

Total Expenses 338,829 331,854 1,136,879 1,067,583



Operating Income (a) $ 63,686 $ 70,344 $ 199,718 $ 280,988

(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.

(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.

Interest Expense on Debt is excluded from Net Revenues and presented(2) below Operating Income in the Adjusted results and is included in Interest Expense on a U.S. GAAP basis.

(3) The gain resulting from the sale of the ECB Trust business in the third quarter of 2020 is excluded from the Adjusted presentation.

Expenses incurred from the assumed vesting of Class J Evercore LP Units(4) issued in conjunction with the acquisition of ISI are excluded from the Adjusted presentation.

Expenses during 2020 that are excluded from the Adjusted presentation relate to separation and transition benefits and related costs as a result of the Company's review of its operations and the acceleration of depreciation expense for leasehold improvements and certain other fixed(5) assets in conjunction with the previously announced expansion of our headquarters in New York and our business realignment initiatives. Expenses during 2019 that are excluded from the Adjusted presentation relate to the acceleration of depreciation expense for leasehold improvements in conjunction with the previously announced expansion of our headquarters in New York.

(6) Non-Compensation Costs on an Adjusted basis reflect the following adjustments:

Three Months Ended September 30, 2020

U.S. GAAP

Adjustments

Adjusted

(dollars in thousands)

Occupancy and Equipment Rental

$

18,043

$

-

$

18,043

Professional Fees

17,324

-

17,324

Travel and Related Expenses

3,182

-

3,182

Communications and Information Services

13,868

-

13,868

Depreciation and Amortization

6,214

(169

)

(6a)

6,045

Execution, Clearing and Custody Fees

2,840

-

2,840

Acquisition and Transition Costs

454

(454

)

(6b)

-

Other Operating Expenses

9,712

-

9,712

Total Non-Compensation Costs

$

71,637

$

(623

)

$

71,014

Three Months Ended September 30, 2019

U.S. GAAP

Adjustments

Adjusted

(dollars in thousands)

Occupancy and Equipment Rental

$

16,946

$

-

$

16,946

Professional Fees

21,577

-

21,577

Travel and Related Expenses

17,589

-

17,589

Communications and Information Services

12,146

-

12,146

Depreciation and Amortization

8,419

(2,157

)

(6a)

6,262

Execution, Clearing and Custody Fees

3,265

-

3,265

Acquisition and Transition Costs

380

(380

)

(6b)

-

Other Operating Expenses

8,801

-

8,801

Total Non-Compensation Costs

$

89,123

$

(2,537

)

$

86,586

Nine Months Ended September 30, 2020

U.S. GAAP

Adjustments

Adjusted

(dollars in thousands)

Occupancy and Equipment Rental

$

54,318

$

-

$

54,318

Professional Fees

53,165

-

53,165

Travel and Related Expenses

23,089

-

23,089

Communications and Information Services

40,704

-

40,704

Depreciation and Amortization

20,060

(1,183

)

(6a)

18,877

Execution, Clearing and Custody Fees

10,230

-

10,230

Acquisition and Transition Costs

560

(560

)

(6b)

-

Other Operating Expenses

30,539

-

30,539

Total Non-Compensation Costs

$

232,665

$

(1,743

)

$

230,922

Nine Months Ended September 30, 2019

U.S. GAAP

Adjustments

Adjusted

(dollars in thousands)

Occupancy and Equipment Rental

$

51,225

$

-

$

51,225

Professional Fees

60,912

-

60,912

Travel and Related Expenses

54,650

-

54,650

Communications and Information Services

34,773

-

34,773

Depreciation and Amortization

23,123

(6,471

)

(6a)

16,652

Execution, Clearing and Custody Fees

9,483

-

9,483

Acquisition and Transition Costs

488

(488

)

(6b)

-

Other Operating Expenses

26,185

-

26,185

Total Non-Compensation Costs

$

260,839

$

(6,959

)

$

253,880

Three Months Ended September 30, 2020

U.S. GAAP Adjustments Adjusted

(dollars in thousands)

Occupancy and Equipment Rental $ 18,043 $ - $ 18,043

Professional Fees 17,324 - 17,324

Travel and Related Expenses 3,182 - 3,182

Communications and Information 13,868 - 13,868 Services

Depreciation and Amortization 6,214 (169 ) (6a) 6,045

Execution, Clearing and Custody Fees 2,840 - 2,840

Acquisition and Transition Costs 454 (454 ) (6b) -

Other Operating Expenses 9,712 - 9,712

Total Non-Compensation Costs $ 71,637 $ (623 ) $ 71,014



Three Months Ended September 30, 2019

U.S. GAAP Adjustments Adjusted

(dollars in thousands)

Occupancy and Equipment Rental $ 16,946 $ - $ 16,946

Professional Fees 21,577 - 21,577

Travel and Related Expenses 17,589 - 17,589

Communications and Information 12,146 - 12,146 Services

Depreciation and Amortization 8,419 (2,157 ) (6a) 6,262

Execution, Clearing and Custody Fees 3,265 - 3,265

Acquisition and Transition Costs 380 (380 ) (6b) -

Other Operating Expenses 8,801 - 8,801

Total Non-Compensation Costs $ 89,123 $ (2,537 ) $ 86,586



Nine Months Ended September 30, 2020

U.S. GAAP Adjustments Adjusted

(dollars in thousands)

Occupancy and Equipment Rental $ 54,318 $ - $ 54,318

Professional Fees 53,165 - 53,165

Travel and Related Expenses 23,089 - 23,089

Communications and Information 40,704 - 40,704 Services

Depreciation and Amortization 20,060 (1,183 ) (6a) 18,877

Execution, Clearing and Custody Fees 10,230 - 10,230

Acquisition and Transition Costs 560 (560 ) (6b) -

Other Operating Expenses 30,539 - 30,539

Total Non-Compensation Costs $ 232,665 $ (1,743 ) $ 230,922



Nine Months Ended September 30, 2019

U.S. GAAP Adjustments Adjusted

(dollars in thousands)

Occupancy and Equipment Rental $ 51,225 $ - $ 51,225

Professional Fees 60,912 - 60,912

Travel and Related Expenses 54,650 - 54,650

Communications and Information 34,773 - 34,773 Services

Depreciation and Amortization 23,123 (6,471 ) (6a) 16,652

Execution, Clearing and Custody Fees 9,483 - 9,483

Acquisition and Transition Costs 488 (488 ) (6b) -

Other Operating Expenses 26,185 - 26,185

Total Non-Compensation Costs $ 260,839 $ (6,959 ) $ 253,880

(6a)

The exclusion from the Adjusted presentation of expenses associated with amortization of intangible assets and other purchase accounting-related amortization from the acquisition of ISI and certain other acquisitions.

(6b)

Primarily the exclusion from the Adjusted presentation of professional fees incurred and costs related to transitioning acquisitions or divestitures.

(7)

Evercore is organized as a series of Limited Liability Companies, Partnerships, C-Corporations and a Public Corporation and therefore, not all of the Company's income is subject to corporate-level taxes. As a result, adjustments have been made to the Adjusted earnings to assume that the Company is subject to the statutory tax rates of a C-Corporation under a conventional corporate tax structure in the U.S. at the prevailing corporate rates and that all deferred tax assets relating to foreign operations are fully realizable within the structure on a consolidated basis. This assumption is consistent with the assumption that certain Evercore LP Units are vested and exchanged into Class A shares, as the assumed exchange would change the tax structure of the Company.

(8)

Reflects an adjustment to eliminate noncontrolling interest related to all Evercore LP partnership units which are assumed to be converted to Class A common stock in the Adjusted presentation.

(9)

Assumes the vesting, and exchange into Class A shares, of Class A and E 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.

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CONTACT: Investor Contact: Hallie Miller Head of Investor Relations, Evercore 917-386-7856 Media Contact: Dana Gorman Abernathy MacGregor, for Evercore 212-371-5999