Greenhill & Co. Reports First Quarter Earnings Per Share Of $0.45

      Greenhill & Co. Reports First Quarter Earnings Per Share Of $0.45

- Advisory revenues of $81.4 million, up 11% from first quarter of prior year

- Compensation ratio for the first quarter at 53% of total revenues consistent
with full year 2012 rate, compared to 50% in first quarter of prior year

- Pre-tax profit margin of 27% for the first quarter, compared to 30% in first
quarter of prior year

- Total revenues, as well as cost ratios and profit margins, negatively
impacted in the quarter by an investment loss of $1.9 million as compared to
an investment gain of $9.4 million in first quarter of prior year principally
due to mark-to-market value change of our investment in Iridium Communications
Inc. (NASDAQ: IRDM)

- Repurchased 347,778 shares of our common stock during the first quarter
through open market transactions and from employees in settlement of tax
liabilities due upon vesting of restricted stock

- Recruited three Managing Directors during the quarter, expanding our global
coverage of the financial institutions, insurance and industrial sectors

- Recruited Senior Advisor focused on expanding relationships with major
French and other European companies

PR Newswire

NEW YORK, April 17, 2013

NEW YORK, April 17, 2013 /PRNewswire/ -- Greenhill & Co., Inc. (NYSE: GHL)
today reported revenues of $79.5 million, net income allocated to common
stockholders of $13.6 million and diluted earnings per share of $0.45 for the
three months ended March31, 2013.

The Firm's first quarter 2013 revenues compare with revenues of $82.7 million
for the first quarter of 2012, which represents a decrease of $3.1 million, or
4%. Advisory revenues for the quarter were $81.4 million compared to $73.3
million for the first quarter of 2012. Investment revenues for the first
quarter of 2013 were negative $1.9 million compared to $9.4 million in the
first quarter of the prior year.

The Firm's first quarter 2013 net income allocated to common stockholders of
$13.6 million and diluted earnings per share of $0.45 compare to net income
allocated to common stockholders of $16.1 million and diluted earnings per
share of $0.53 for the first quarter of 2012.

The Firm's revenues and net income can fluctuate materially depending on the
number and size of completed transactions on which it advised, the size of
investment gains (or losses), and other factors. Accordingly, the revenues
and net income in any particular period may not be indicative of future
results.

"The first quarter saw a return to the difficult market conditions that have
prevailed over much of the past 5 to 6 years, and in that context we are
pleased with our financial results for the quarter. Our advisory revenues
were up 11% compared to the prior year first quarter. Within that, we
benefited from transaction completion fees at a higher level than the
quarterly pace for the full year 2012, while transaction announcement fees
were meaningfully lower than the full year rate for 2012. Similarly, fund
placement fees, which tend to be weighted toward year end, were down from the
full year rate for 2012. It is encouraging that our number of active clients
and total retainer fees were consistent with last year's results, indicating a
continued high level of active assignments, but as with the market more
broadly we saw relatively few transactions get to the announcement stage.
Nonetheless, our revenues were sufficient to allow us to achieve a 27% pre-tax
profit margin, driven by continued discipline on compensation and
non-compensation costs. With the data now clear that we continue to be in a
relatively slow transaction environment, we believe our high profit margin,
strong dividend and flat share count relative to our large and small
competitors will continue to be important distinguishing factors for us, as
they have been throughout our 9 years as a public company," Robert F.
Greenhill, Chairman, said.

"The data for M&A transactions globally shows a relatively weak level of
activity for the first quarter, which has surprised many after a very strong
quarter ending last year. While data bases show global announced transaction
volume up slightly versus last year, that data is skewed by duplicative
entries and a few very large transactions. Data for transactions completed in
the quarter shows similar anomalies, with just two transactions, one a spinoff
and one a domestic Russian transaction, comprising approximately a quarter of
the total global deal volume. The decline in the number of announced
transactions, down 12% versus the prior year first quarter, is more indicative
of true current activity levels. And given that last year the early part of
the year was the weakest, if the first quarter pace were to continue for the
full year the comparison would be even weaker, with 15% fewer transactions,
and deal volume would be down even without any adjustment for the data
anomalies referred to above," Scott L. Bok, Chief Executive Officer, said.

"In a market as diverse as the M&A market, where nearly every transaction is
driven by a unique set of circumstances, there is no simple answer as to why
activity paused after its strong pace late last year. One possible
explanation is that the recent sharp rise in equity markets may have resulted
in an increased gap between the valuation hopes of those looking to sell
assets and the willingness to pay of those looking to purchase them. And
undoubtedly memories of the financial crisis have resulted in a lingering
conservatism in corporate boardrooms. While we were reluctant in recent
months to join those who were heralding a sudden return to peak levels of M&A
activity, we remain hopeful as to how the full year will develop," Mr. Bok
added.

"Regardless of the reasons for the relatively quiet quarter, and regardless of
when the market again sees more normal levels of transaction activity, we are
keeping our focus on the things we are able to impact. Most importantly, that
is to continue to increase our share of the global advisory fee pool by
demonstrating to clients our uniquely independent and unconflicted approach to
the business, the geographic reach of our unified global team of bankers and
our deep industry sector expertise. Based on what we can see internally and
in the broader market, we see encouraging signs that 2013 should prove to be
yet another year of meaningful market share gains for our Firm," Mr. Bok
further commented.

Revenues

Revenues by Source

The following provides a breakdown of total revenues by source for the three
month periods ended March31, 2013 and 2012, respectively:

                    For the Three Months Ended
                    March31, 2013       March31, 2012
                    Amount   % of Total  Amount   % of Total
                    (in millions, unaudited)
Advisory revenues   $ 81.4   102    %    $ 73.3   89     %
Investment revenues (1.9)    (2)    %    9.4      11     %
Total revenues      $ 79.5   100    %    $ 82.7   100    %



Advisory Revenues

For the three months ended March31, 2013, advisory revenues were $81.4
million compared to $73.3 million in 2012, an increase of 11%. The increase
in our advisory revenues in the first quarter of 2013 as compared to first
quarter of 2012, resulted from an increase in the number and size of completed
engagements. At the same time, worldwide completed M&A volume, influenced by
the factors discussed above, increased 22% from $414.6 billion in the first
quarter of 2012 to $503.9 billion in the first quarter of 2013^1.

^1 Global M&A completed transaction volume for the three months ended
March31, 2013 and March31, 2012. Source: Thomson Financial as of April16,
2013.

Completed assignments in the first quarter of 2013 included:

  othe acquisition by Advantage Partners, LLP of Sanyo DI Solutions, Co.,
    Ltd, a subsidiary of Panasonic;
  othe sale of Aegis Group plc to Dentsu Inc.;
  othe merger of Aurelian Oil & Gas plc with San Leon Energy plc;
  othe acquisition by AvalonBay Communities, Inc., along with Equity
    Residential, of Archstone Enterprise LP;
  othe sale of Performance Coatings, a division of E.I. DuPont de Nemours and
    Company, to an affiliate of The Carlyle Group;
  othe sale of Goodman Fielder Limited's Champion flour milling business to
    Nisshin Seifun Group Inc.;
  othe sale by The Hartford Financial Services Group, Inc. of its Individual
    Life Insurance business to Prudential Financial, Inc.;
  othe acquisition by Inchcape plc of Trivett Automotive Group;
  othe sale by SUPERVALU Inc. of its New Albertsons, Inc. subsidiary to an
    investor group led by Cerberus Capital Management L.P.;
  othe sale of TNS, Inc. to Siris Capital Group, LLC; and
  othe acquisition by the Toronto-Dominion Bank Group of the REDcard credit
    card portfolio from the Target Corporation.

During the first quarter of 2013, our Capital Advisory Group served as global
placement agent on behalf of private equity and real estate funds for one
interim closing of the sale of limited partnership interests in such funds.
We also advised on the secondary market sale of a limited partnership
interest.

In addition to the recruitment of Stephen A. Cruise as a Managing Director for
our Chicago office, which was reported in our year-end earnings release, the
Firm announced in the first quarter the recruitment of two additional Managing
Directors. Anne Eastep (most recently a Managing Director with Citigroup)
joined the Firm's New York office, where she will focus primarily on the
insurance sector. Carl-Georg Bauer-Schlichtegroll (most recently with Credit
Suisse, where he was Vice-Chairman and co-head of Financial Institutions Group
EMEA), has joined the Firm in London to lead an expanded focus on financial
institutions across Europe.

In addition, the Firm recently announced the recruitment of Jean-Michel Steg
as a Senior Advisor to assist in the expansion of the Firm's client
relationships with major French and other European companies.

Investment Revenues

For the first quarter of 2013, the Firm recorded investment revenues of
negative $1.9 million compared to investment revenues of $9.4 million in the
first quarter of 2012. The decrease in investment revenues of $11.3 million
resulted predominately from a decline in the quoted market value of Iridium
Communications Inc. ("Iridium") and is described in more detail below.

The following table sets forth additional information relating to our
investment revenues for the three month periods ended March31, 2013 and 2012:



                                                  Three months ended March 31,
                                                  2013             2012
                                                  (in millions, unaudited)
Net realized and unrealized gains on investments  $   —            $   0.7
in merchant banking funds
Deferred gain on sale of certain merchant banking —                0.1
assets
Net realized and unrealized gain/(loss) in        (2.1)            8.3
Iridium
Interest income                                   0.2              0.3
Total investment revenues                         $   (1.9)        $   9.4

For the first quarter of 2013, the Firm recorded investment revenues of
negative $2.1 million on our investment in Iridium due to a decline in the
quoted market value during the quarter. During the first quarter of 2012, the
quoted market value of our investment in Iridium increased by $8.3 million,
which resulted in a change in investment revenues of $10.4 million period to
period.

Also, during the first quarter of 2013, the fair value of the Firm's
investment in previously sponsored merchant banking funds remained unchanged
as compared to a gain in fair value of $0.7 million recorded in the first
quarter of 2012.

During the first quarter of 2013, we continued the liquidation of our
investment in Iridium with the sale of 840,000 shares at an average price of
$6.69 per share for proceeds of $5.6 million.

At March31, 2013, our remaining investments consisted principally of our
investment in Iridium, which had a value of $25.6 million, and our remaining
investments in previously sponsored and other merchant banking funds of $16.6
million.

The investment gains (or losses) from our investment in Iridium and our
investments in our historic merchant banking funds may fluctuate significantly
over time due to factors beyond our control, such as performance of each
company in our merchant banking portfolio, equity market valuations, and
merger and acquisition opportunities. Revenues recognized from gains (or
losses) recorded in any particular period are not necessarily indicative of
revenues that may be realized and/or recognized in future periods.

Expenses

Operating Expenses

Our total operating expenses for the first quarters of both 2013 and 2012
remained constant at $57.9 million. In the first quarter of 2013 our
compensation expense increased slightly and our non-compensation declined as
compared to the first quarter of 2012, as described in more detail below. Our
pre-tax margin was 27% for the first quarter of 2013 as compared to 30% for
the first quarter of 2012.

The following table sets forth information relating to our operating expenses
for the three months ended March31, 2013 and 2012, which are reported net of
reimbursements of certain expenses by our clients:

                                             Three months ended March 31, 2013
                                             2013               2012
                                             (in millions, unaudited)
Employee compensation and benefits           $    42.2          $   41.2
expense.....
% of revenues                              53          %      50         %
Non-compensation expense                     15.7               16.6
% of revenues                              20          %      20         %
Total operating expense                      57.9               57.9
% of revenues                              73          %      70         %
Total income before tax                      21.7               24.8
Pre-tax profit margin                        27          %      30         %



Compensation and Benefits Expenses

Our employee compensation and benefits expenses in the first quarter of 2013
were $42.2 million, which reflected a 53% ratio of compensation to revenues.
This amount compared to $41.2 million for the first quarter of 2012, which
reflected a 50% ratio of compensation to revenues. The increase of $1.0
million, or 2%, resulted from an increase in accrued compensation. We
increased the ratio of compensation to revenues in the first quarter of 2013
as compared to the first quarter of the prior year to remain consistent with
the compensation ratio we incurred for calendar year 2012.

Our compensation expense is generally based upon revenue and can fluctuate
materially in any particular period depending upon the changes in headcount,
amount of revenues recognized, as well as other factors. Accordingly, the
amount of compensation expense recognized in any particular period may not be
indicative of compensation expense in a future period.

Non-Compensation Expenses

Our non-compensation expenses were $15.7 million in the first quarter of 2013
compared to $16.6 million in the first quarter of 2012, reflecting a decrease
of $0.9 million, or 5%. The decrease in non-compensation expenses principally
resulted from lower amortization of the Australian intangible assets and
slightly lower travel costs, professional fees and other operating costs as
compared to the first quarter of 2012.

Non-compensation expenses as a percentage of revenues for the three months
ended March31, 2013 and 2012 remained constant at 20%. For the first quarter
of 2013, lower non-compensation expenses as compared to the first quarter of
2012 were spread over slightly lower revenues in the first quarter of 2013,
resulting in comparable ratios of non-compensation expenses to revenues for
each period.

The Firm's non-compensation expenses as a percentage of revenues can vary as a
result of a variety of factors including fluctuation in revenue amounts,
changes in headcount, the amount of recruiting and business development
activity, the amount of office expansion, the amount of reimbursement of
engagement-related expenses by clients, the amount of short-term borrowings,
interest rate and currency movements and other factors. Accordingly, the
non-compensation expenses as a percentage of revenues in any particular period
may not be indicative of the non-compensation expenses as a percentage of
revenues in future periods.

Provision for Income Taxes

During the first quarter of 2013, the provision for income taxes was $8.1
million, which reflected an effective rate of 37%. This compared to a
provision for income taxes in the first quarter of 2012 of $8.7 million, which
reflected an effective tax rate of 35%. The decrease in the provision for
income taxes in the first quarter of 2013 as compared to the same period in
the prior year was attributable to slightly lower pre-tax income allocated to
common shareholders in addition to a higher effective rate due to an increase
in the proportion of income earned in relatively high tax rate jurisdictions.

The effective tax rate can fluctuate as a result of variations in the relative
amounts of advisory and investment income earned and the tax rate imposed in
the tax jurisdictions in which the Firm operates and invests. Accordingly, the
effective tax rate in any particular period may not be indicative of the
effective tax rate in future periods.

Liquidity and Capital Resources

As of March31, 2013, we had cash of $34.0 million, investments of $42.2
million and short-term debt of $26.5 million.

During the first quarter, the Firm repurchased 169,809 shares of its common
stock in open market purchases and, in addition, repurchased from employees
177,969 restricted stock units at the time of vesting to settle tax
liabilities. In aggregate during the quarter, the Firm repurchased 347,778
shares of its common stock at an average price of $58.90 per share, for a
total cost of $20.5 million.

Dividend

The Board of Directors of Greenhill & Co., Inc. has declared a dividend of
$0.45 per share to be paid on June19, 2013 to common stockholders of record
on June5, 2013.

Earnings Call

Greenhill will host a conference call beginning at 4:30 p.m. Eastern Time on
Wednesday, April 17, 2013, accessible via telephone and the internet. Scott
L. Bok, Chief Executive Officer, and Christopher T. Grubb, Chief Financial
Officer, will review the Firm's first quarter 2013 financial results and
related matters. Following the review, there will be a question and answer
session.

Investors and analysts may participate in the live conference call by dialing
(888) 317-6003 (toll-free domestic) or (412) 317-6061 (international);
passcode: 0252186. Please register at least 10 minutes before the conference
call begins. The conference call will also be accessible as an audio webcast
through the Investor Relations section of Greenhill's website at
www.greenhill.com. There is no charge to access the call.

For those unable to listen to the live broadcast, a replay of the call will be
available for one month via telephone starting approximately one hour after
the call ends. The replay can be accessed at (877) 344-7529 (toll-free
domestic) or (412) 317 - 0088 (international); passcode: 10027260. The
webcast will be archived on Greenhill's website for 30 days after the call.

Greenhill & Co., Inc. is a leading independent investment bank focused on
providing financial advice on significant mergers, acquisitions,
restructurings, financings and capital raising to corporations, partnerships,
institutions and governments. It acts for clients located throughout the
world from its offices in New York, London, Frankfurt, Stockholm, Sydney,
Tokyo, Toronto, Chicago, Houston, Los Angeles, Melbourne and San Francisco.

Cautionary Note Regarding Forward-Looking Statements

The preceding discussion should be read in conjunction with our condensed
consolidated financial statements and the related notes that appear below. We
have made statements in this discussion that are forward-looking statements.
In some cases, you can identify these statements by forward-looking words such
as "may", "might", "will", "should", "expect", "plan", "anticipate",
"believe", "estimate", "intend", "predict", "potential" or "continue", the
negative of these terms and other comparable terminology. These
forward-looking statements, which are subject to risks, uncertainties and
assumptions about us, may include projections of our future financial
performance, based on our growth strategies and anticipated trends in our
business. These statements are only predictions based on our current
expectations and projections about future events. There are important factors
that could cause our actual results, level of activity, performance or
achievements to differ materially from the results, level of activity,
performance or achievements expressed or implied by the forward-looking
statements. In particular, you should consider the numerous risks outlined
under ''Risk Factors'' in our Report on Form 10-K for the fiscal year 2012.
We are under no duty and we do not undertake any obligation to update or
review any of these forward-looking statements after the date on which they
are made, whether as a result of new information, future developments or
otherwise.

Greenhill & Co., Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except share and per share data)

                                                      For the Three Months
                                                      Ended March 31,
                                                      2013         2012
Revenues
Advisory revenues                                     $  81,447    $  73,255
Investment revenues                                   (1,856)      9,435
Total revenues                                        79,591       82,690
Expenses
Employee compensation and benefits                    42,183       41,237
Occupancy and equipment rental                        4,320        4,265
Depreciation and amortization                         1,727        1,971
Information services                                  2,065        1,884
Professional fees                                     1,114        1,350
Travel related expenses                               3,244        3,445
Interest expense                                      281          219
Other operating expenses                              2,984        3,506
Total expenses                                        57,918       57,877
Income before taxes                                   21,673       24,813
Provision for taxes                                   8,055        8,677
Consolidated net income                               13,618       16,136
Less: Net income (loss) allocated to noncontrolling   —            —
interests
Net income allocated to common stockholders           $  13,618    $  16,136
Average shares outstanding:
Basic                                                 30,171,840   30,522,767
Diluted                                               30,260,963   30,532,162
Earnings per share:
Basic                                                 $  0.45      $  0.53
Diluted                                               $  0.45      $  0.53
Dividends declared and paid per share                 $  0.45      $  0.45



Contact: Christopher T. Grubb
Chief Financial Officer
Greenhill & Co., Inc.
(212) 389-1800



SOURCE Greenhill & Co., Inc.

Website: http://www.greenhill.com
 
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