Greenhill & Co. Reports Second Quarter Earnings Per Share of $0.07

NEW YORK, July 18, 2012

The Firm's second quarter revenues compare with revenues of $90.8 million for the second quarter of 2011, down 48%.  Advisory revenues for the quarter were $45.1 million compared to $85.6 million in the second quarter of 2011.  Investment revenues for the second quarter of 2012 were $2.2 million compared to $5.2 million in the second quarter of 2011.

For the six months ended June 30, 2012, revenues were $130.0 million compared to $139.1 million for the comparable period in 2011, a decline of 7%. Advisory revenues for the six months ended June 30, 2012 were $118.4 million compared to $134.1 million over the same year-to-date period in 2011.  Investment revenues for the six months ended June 30, 2012 were $11.6 million compared to $5.0 million for the same period in the prior year.

The Firm's second quarter net income allocated to common stockholders compare to net income allocated to common stockholders of $21.5 million and diluted earnings per share of $0.69 in the second quarter of 2011.  On a year-to-date basis, net income allocated to common stockholders was $18.4 million through June 30, 2012 compared to $19.9 million for the comparable period in 2011, which represents a decrease of $1.5 million, or 8%.  Diluted earnings per share for the six months ended June 30, 2012 were $0.60 compared to $0.64 for the same period in 2011.

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.

"Global transaction activity continued to decline in the second quarter, and that is reflected in our results. While the quarterly outcome was disappointing in absolute terms, we are pleased that we continued to gain market share in the pool of advisory fees globally. Our year to date 12% decline in advisory revenue versus last year compares favorably to a 30% decline in global completed transaction volume and 19% decline in global announced transaction volume. Based on results reported to date, it also compares favorably to the decline in advisory revenue for the group of large banks which are our primary competitors. Within our business, we have seen US advisory revenue comparable to last year and significant improvement in Europe, while activity in Australia has declined significantly from last year's strong pace. In terms of type of advice, financing and restructuring advisory work has been a strong contributor alongside M&A, while our capital advisory (fund placement) business is up versus last year but still being negatively impacted by continued market volatility and uncertainty. The slow revenue quarter resulted in a high quarterly compensation ratio, although the 54% year to date ratio remains well below that of our peers and should decline as revenue rebounds. Meanwhile, our non-compensation expense declined from the first quarter as we had expected and for the year to date is up only slightly versus last year," Robert F. Greenhill, Chairman, said.

"We remain positive on the outlook for our business despite a soft second quarter. Year to date, we have recognized revenue from more clients than last year, but a continued weak transaction environment has meant that most of these have generated modest retainers rather than more significant transaction related fees. While the likelihood and timing of specific transactions is inevitably uncertain, recent transaction announcements combined with our book of current assignments suggest that advisory revenue similar to or better than last year continues to be the most likely outcome for the full year 2012, and that in turn should have a favorable impact on our cost ratios. Taken together, our outlook for the advisory business, continued cost control and continued liquidation of our historic investments give us the confidence for continued share repurchases as well as maintaining our strong dividend. Looking further ahead, we remain even more positive. As we foreshadowed in our last quarterly announcement, we have added some very high quality senior recruits in the US and Europe, who we expect will start to impact revenue next year.  And we expect that the many challenges facing our large bank competitors will continue to drive both clients and talented bankers toward unconflicted, client-focused firms like Greenhill. As the only major firm focused entirely on client advisory work, we believe we are well positioned to benefit from that trend," Scott L. Bok, Chief Executive Officer, commented.