Moelis & Company Reports Third Quarter 2015 Financial Results; Quarterly Dividend of $0.30 Per Share

Moelis & Company (“we” or the “Firm”) (NYSE:MC) today reported financial results for the third quarter ended September 30, 2015. The Firm’s total revenues of $151.8 million for the third quarter represented an increase of 18% from the third quarter of 2014. Adjusted Pro Forma net income was $25.1 million or $0.45 per share (diluted) for the third quarter of 2015, as compared with $23.2 million or $0.42 per share (diluted) in the prior year period.

For the first nine months of 2015, revenues were $377.1 million, increasing 1% from the prior year period and resulting in $61.2 million of Adjusted Pro Forma net income, or $1.11 per share (diluted). This compares with $66.0 million of Adjusted Pro Forma net income or $1.20 per share (diluted) in the first nine months of 2014.

On a GAAP basis, the Firm reported net income of $34.6 million or $0.47 per share (diluted) for the third quarter and $81.4 million or $1.07 per share (diluted) for the first nine months of 2015. This compares to GAAP net income of $32.8 million and a net loss of $5.7 million for the third quarter and first nine months of 2014, respectively, or a net loss of $0.82 per share (diluted) for the period from the IPO closing on April 22, 2014 through September 30, 2014.

“Our third quarter revenues reflect accelerated growth in our M&A related activity driven by new business and clients and the continued maturation of our Managing Directors. We continue to attract top talent and ended the quarter with 104 Managing Directors and over 460 advisory professionals. Despite recent market volatility, we remain optimistic about our opportunities to grow our Firm and deliver value to our shareholders,” said Ken Moelis, Chairman and Chief Executive Officer.

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 37% of the operating partnership (Moelis & Company Group LP) is owned by the corporation (Moelis & Company) and is taxed as a corporation. The remaining 63% is owned by partners and is primarily subject to tax at the partner level (except for certain state and local and foreign income taxes). The Adjusted Pro Forma results included herein remove the impact of adjustments to the Company’s Tax Receivable Agreement and compensation expenses specifically related to the Firm’s IPO awards, and apply the corporate tax rate to all earnings under the assumption that all outstanding Class A partnership units of Moelis & Company Group LP have been exchanged into Class A common stock of Moelis & Company. 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 between our GAAP results and our Adjusted Pro Forma results is presented in the Appendix to this press release.

Revenues

For the third quarter of 2015, revenues were $151.8 million as compared with $128.7 million in the third quarter of 2014, representing an increase of 18%. Our quarterly revenue growth was primarily driven by both increased M&A related activity and higher fees per completed M&A transaction.

For the first nine months of 2015, revenues were $377.1 million as compared with $374.9 million in the same period of 2014. We advised 213 total clients in the first nine months of 2015 (104 of whom paid fees equal to or greater than $1 million) as compared with 206 clients (99 of whom paid fees equal to or greater than $1 million) during the same period in 2014.

We continued to execute on our strategy of profitable expansion. Since our last earnings release, we hired two Managing Directors to strengthen our industry expertise in consumer and technology, media and telecommunications, resulting in a total of four Managing Directors in the U.S. and one Managing Director in the U.K. who started during the quarter.

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 $110.4 million for the third quarter of 2015 as compared with $91.4 million for the third quarter of 2014. For the first nine months of 2015, Adjusted Pro Forma operating expenses were $278.7 million as compared with $264.0 million in the same period of 2014. The increase in operating expenses in 2015 is primarily attributable to an increase in headcount with the addition of 85 advisory professionals since the third quarter of 2014. This headcount growth is reflected in higher compensation and benefits expenses and non-compensation expenses. The pre-tax income margin was 28% on an Adjusted Pro Forma basis for the third quarter and 27% for first nine months of 2015 as compared with 30% for both the third quarter and first nine months of 2014.

In the third quarter of 2015, compensation and benefits expenses on an Adjusted Pro Forma basis were $84.8 million, or 56% of revenues, which compares with $66.7 million of compensation and benefits expenses and 52% of revenues in 2014. In the first nine months of 2015, compensation and benefits expenses on an Adjusted Pro Forma basis were $207.0 million, or 55% of revenues, which compares with Adjusted Pro Forma compensation and benefits expense of $196.0 million, or 52% of revenues in the first nine months of 2014. The increased compensation ratio is attributable to the additional tranche of equity awarded in early 2015 and the increase in headcount combined with modest revenue growth.

Adjusted Pro Forma non-compensation expenses were $25.6 million for the third quarter of 2015 as compared with $24.7 million for the same period of the prior year. Our Adjusted Pro Forma non-compensation expense ratio decreased to 17% from 19% in the same period of the prior year, primarily driven by increased revenues plus the timing of our annual client event, which was held during the third quarter of 2014 versus the fourth quarter of 2015. For the first nine months of 2015, Adjusted Pro Forma non-compensation expenses were $71.7 million as compared with $68.0 million for the same period of the prior year. The Adjusted Pro Forma non-compensation expense ratio increased to 19% from 18% primarily driven by flat revenues and increases in headcount related non-compensation expenses, partially offset by the timing of our annual client event.

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 and certain foreign income taxes. As a result of completing our IPO in April 2014, we have a new corporate structure and currently 37% 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. Income tax on the remaining 63% continues to be subject to New York City unincorporated business tax and certain foreign income taxes and is accounted for at the partner level through our non-controlling interest adjustment. 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 third quarter 2015 income was taxed at our current corporate effective tax rate of 40.0%, versus a corporate effective tax rate of 40.5% for the third quarter of 2014.

Capital Management and Balance Sheet

Moelis & Company continues to maintain a strong financial position and as of September 30, 2015, we held cash and short term investments of $200.8 million and had no debt on our balance sheet.

On October 28, 2015, the Board of Directors of Moelis & Company declared a quarterly dividend of $0.30 per share. The dividend will be paid on December 8, 2015 to common stockholders of record on November 23, 2015.

Earnings Call

We will host a conference call beginning at 4:30pm ET on Wednesday, October 28, 2015, accessible via telephone and the internet. Ken Moelis, Chairman and Chief Executive Officer, and Joe Simon, Chief Financial Officer, will review our third quarter 2015 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 Third Quarter 2015 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 10074017.

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 650 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 press release 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.

Appendix

GAAP Consolidated and Combined Statement of Operations (Unaudited)

GAAP Reconciliation to Adjusted Pro Forma Financial Information (Unaudited)

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