Moelis & Company Reports Record Full Year 2014 Financial Results; Quarterly Dividend of $0.20 Per Share

Moelis & Company (“we” or the “Firm”) (NYSE:MC) today reported financial results for the year ended December 31, 2014. The Firm’s annual revenues of $518.8 million represented an increase of 26% over the prior year, exceeding a 12% increase in the number of global completed M&A transactions and a 16% increase in global completed M&A volume in the same period.¹ Adjusted Pro Forma net income for the year was $94.4 million or $1.72 per share (diluted). These results exclude $112.4 million of pre-tax one-time charges primarily associated with accelerating the vesting of equity in connection with the Firm’s IPO completed in April.

Fourth quarter revenues of $143.9 million represented our second highest quarter of revenues since inception and were down 7% from the fourth quarter of 2013, our highest quarter on record. Adjusted Pro Forma net income was $28.4 million or $0.51 per share (diluted) for the quarter.

On a GAAP basis, the Firm reported full year net income of $32.6 million, which represented a $0.19 per share (diluted) loss for shareholders, and fourth quarter net income of $38.3 million or $0.52 per share (diluted). The GAAP results for the full year period are impacted by the one-time acceleration of equity vesting in connection with our IPO and the fact that the allocation of income to shareholders only began following our IPO closing on April 22, 2014.

“2014 was a tremendous year for Moelis & Company, from many transformational advisory assignments for our clients, to our IPO and continued growth, to our strong financial performance as demonstrated by our record results and disciplined return of capital to shareholders,” said Ken Moelis, Chairman and Chief Executive Officer.

“This year, we advised our clients on a wide range of complex strategic decisions. Our activity was broad across sectors, geographies and advisory services demonstrating our deep bench of talent and the power of our holistic model. Our focus on providing global solutions and connectivity to clients contributed to continued momentum in our U.S. business as well as significant revenue growth internationally, with non-U.S. revenues up 37% over 2013.”

“We remained focused on profitable growth and were very active in building our team in 2014. We enhanced our advisory expertise in the U.S. and Europe, launched our Private Funds Advisory business and opened offices in Melbourne, São Paulo and Washington DC. This activity led to the addition of eight Managing Directors on a net basis, and we ended the year with 94 Managing Directors based in 17 offices around the globe. We have since promoted four advisory professionals to Managing Director consistent with our commitment to developing our talent internally.”

“We manage our business with a long-term outlook consistent with the strategic advice we provide to our clients and believe our performance is best evaluated over a longer term horizon. While our fourth quarter results were impacted by fewer transaction completions from what was a record quarter at the end of last year, we continue to see improvement in the M&A environment and our strategic dialogue with clients remains robust. As the M&A market continues to rebound, we believe our unique One Firm model and strategy for profitable expansion position us well to benefit from what continues to be a compelling opportunity to drive growth for our Firm and our shareholders.”

The Firm’s revenues and net income can fluctuate materially depending on the number, size and timing of completed transactions on which it advised 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.

Moelis & Company completed its IPO on April 22, 2014 and introduced a new corporate structure. Currently 36% of the operating partnership (Moelis & Company Group LP) is owned by the corporation (Moelis & Company) and is taxed as a corporation. The Adjusted Pro Forma results included herein remove the impact of charges related to the Firm’s IPO and assume all outstanding Class A partnership units of Moelis & Company Group LP have been exchanged into Class A common stock of Moelis & Company such that 100% of the Firm’s income is taxed as a corporation from January 1, 2014. We believe the Adjusted Pro Forma results, when presented together with comparable GAAP results, are useful to investors to compare our performance across periods and to better understand our operating results. A reconciliation of our GAAP results to our Adjusted Pro Forma results is presented in the Appendix to this press release.

Revenues

For the year ended December 31, 2014, revenues were $518.8 million, as compared with $411.4 million in 2013, representing an increase of 26%. This compares favorably with a 12% increase in the number of global completed M&A transactions and a 16% increase in global completed M&A volume in the same period and demonstrates our continued advisory market share gains.¹

Our record annual revenues were driven by increased transaction completions as the M&A environment continued to improve and clients evaluated and executed a wide range of strategic alternatives. The increase in transaction completions is demonstrated by the growth in the number of clients who paid fees equal to or greater than $1 million, which increased to 130 clients in 2014 from 109 clients in the prior year.

Revenues of $143.9 million in the fourth quarter of 2014 represented our second highest quarter of revenues since inception, down 7% from $154.3 million earned in the fourth quarter of 2013, our highest quarter of revenues on record. The decrease in quarterly revenues was the result of fewer transaction closings, primarily due to a softer restructuring environment.

In early 2015, we increased the number of our Managing Directors with the promotion of four advisory professionals: Carlos Jimenez (US/Media), Alexander Hageman (EMEA/Equity Capital Markets Advisory), Tarik Rguem (US/Mergers & Acquisitions) and Rami Touma (EMEA/Middle East coverage). Our hiring pipeline remains robust.

Expenses

The following tables set forth information relating to the Firm’s operating expenses, which are reported net of client expense reimbursements.

Total operating expenses on an Adjusted Pro Forma basis were $361.1 million in 2014 as compared with GAAP operating expenses of $341.3 million in 2013. The increase in operating expenses in 2014 primarily resulted from increased compensation and benefits expenses consistent with increased revenues as well as increased non-compensation expenses reflecting a more active business and recruiting environment and expenses incurred in connection with operating as a public company.

For the fourth quarter of 2014, Adjusted Pro Forma operating expenses were $97.1 million as compared with GAAP operating expenses of $120.6 million for the same period of 2013. The decrease in Adjusted Pro Forma operating expenses during the fourth quarter of 2014 as compared with the prior year resulted from reduced compensation and benefits expenses due to lower revenues earned during the period. The pre-tax income margin improved from 18% on a GAAP basis in 2013 to 31% on an Adjusted Pro Forma basis in 2014 and from 23% on a GAAP basis in the fourth quarter of 2013 to 33% on an Adjusted Pro Forma basis in the same period of 2014.

In 2014, compensation and benefits expenses on an Adjusted Pro Forma basis were $271.0 million, or 52% of revenues, which compares with GAAP compensation and benefits expenses of $264.9 million, or 64% of revenues, in 2013. In the fourth quarter of 2014, compensation and benefits expenses on an Adjusted Pro Forma basis were $75.0 million, or 52% of revenues, which compares with GAAP compensation and benefits expenses of $98.0 million, or 64% of revenues, for the fourth quarter of 2013. Adjusted Pro Forma compensation and benefits expenses for the year exclude $106.2 million of compensation charges primarily driven by the vesting acceleration of equity held by Managing Directors, which occurred in connection with our IPO. As annual equity compensation granted in the future accumulates and amortizes, we expect that our compensation expense ratio will increase toward our targeted long-term compensation ratio of approximately 57% to 58% of revenues.

Adjusted Pro Forma non-compensation expenses were $90.1 million for the year ended December 31, 2014 and $22.1 million for the fourth quarter of 2014 and compare with GAAP non-compensation expenses of $76.3 million for the year and $22.7 million for the fourth quarter of 2013. The full year 2014 Adjusted Pro Forma amount excludes $3.7 million of one-time charges primarily related to the acceleration of vesting of equity held by non-employees of the Firm, including employees of our joint venture in Australia and members of our former Global Advisory Board. Our Adjusted Pro Forma non-compensation expense ratio was 17% for the year and 15% in the fourth quarter of 2014, in-line with our long-term target of approximately 15% to 18% of revenues. This compares with a GAAP non-compensation expense ratio of 19% for the year and 15% in the fourth quarter of 2013.

Provision for Income Taxes

Prior to our IPO, the Firm was not subject to federal income taxes, but was primarily subject to New York City unincorporated business tax. As a result of completing our IPO in April, we have a new corporate structure and currently 36% of the operating partnership (Moelis & Company Group LP) is owned by the corporation (Moelis & Company) and is subject to U.S. federal income tax as a corporation. For Adjusted Pro Forma purposes, we have assumed all outstanding Class A partnership units of Moelis & Company Group LP have been exchanged into Class A common stock of Moelis & Company such that 100% of the Firm’s income is taxed at our current corporate effective tax rate of 40.5% from January 1, 2014. On a GAAP and Adjusted Pro Forma basis, our provision for income taxes was $13.7 million and $64.3 million for the year ended December 31, 2014, respectively, and $8.0 million and $19.3 million, respectively, for the fourth quarter of 2014.

Capital Management and Balance Sheet

Moelis & Company continues to maintain a strong financial position and as of December 31, 2014, we held cash and short term investments of $237.9 million and had no debt on our balance sheet.

We returned $76.2 million of capital to shareholders since our IPO through regular and special dividends aggregating to $1.40 per share.

On February 3, 2015, the Board of Directors of Moelis & Company declared a quarterly dividend of $0.20 per share. The dividend will be paid on March 6, 2015 to common stockholders of record on February 20, 2015.

The Board of Directors has also authorized the repurchase of up to $25 million of shares of Class A common stock of Moelis & Company and/or Class A partnership units of Moelis & Company Group LP with no expiration date. Under this share repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of shares repurchased will be opportunistic and measured in nature and will depend on a variety of factors, including price and market conditions.

Earnings Call

We will host a conference call beginning at 4:30pm ET on Thursday, February 5, 2015, accessible via telephone and the internet. Ken Moelis, Chairman and Chief Executive Officer, and Joe Simon, Chief Financial Officer, will review our full year and fourth quarter 2014 financial results. Following the review, there will be a question and answer session.

Investors and analysts may participate in the live conference call by dialing 1-877-510-3938 (domestic) or 1-412-902-4137 (international) and referencing the Moelis & Company Fourth Quarter 2014 Earnings Call. Please dial in 15 minutes before the conference call begins. The conference call will also be accessible as a listen-only audio webcast through the Investor Relations section of the Moelis & Company website at www.moelis.com.

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 live call ends. The replay can be accessed at 1-877-344-7529 (domestic) or 1-412-317-0088 (international); the conference number is 10058931.

About Moelis & Company

Moelis & Company is a leading global independent investment bank that provides innovative strategic advice and solutions to a diverse client base, including corporations, governments and financial sponsors. The Firm assists its clients in achieving their strategic goals by offering comprehensive integrated financial advisory services across all major industry sectors. Moelis & Company’s experienced professionals advise clients on their most critical decisions, including mergers and acquisitions, recapitalizations and restructurings and other corporate finance matters. The Firm serves its clients with over 550 employees based in 17 offices in North and South America, Europe, the Middle East, Asia and Australia. For further information about Moelis & Company, please visit www.moelis.com.

Forward-Looking Statements

This presentation contains forward-looking statements, which reflect the Firm’s current views with respect to, among other things, its operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “target,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. For a further discussion of such factors, you should read the Firm’s filings with the Securities and Exchange Commission. The Firm undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Non-GAAP Financial Measures

Adjusted Pro Forma results are a non-GAAP measure which better reflect management’s view of operating results. We believe that the disclosed Adjusted Pro Forma measures and any adjustments thereto, when presented in conjunction with comparable GAAP measures, are useful to investors to understand the Firm’s operating results by removing the significant accounting impact of one-time charges associated with the Firm’s IPO and assuming all Class A partnership units have been exchanged into Class A common stock. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation of GAAP results to Adjusted Pro Forma results is presented in the Appendix.

¹ Source: Thomson Financial as of January 5, 2015; includes all transactions greater than $100 million in value

Appendix

GAAP Condensed Consolidated and Combined Statement of Operations Unaudited

GAAP Reconciliation to Adjusted Pro Forma Financial Information Unaudited