10-K 1 evr1231201510k.htm 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015

OR

¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO .

Commission File Number 001-32975
_____________________________________________________
EVERCORE PARTNERS INC.
(Exact name of registrant as specified in its charter)
_____________________________________________________

Delaware |  | 20-4748747
(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)
55 East 52nd Street, New York, New York |  | 10055
(Address of Principal Executive Offices) |  | (Zip Code)

Registrant’s telephone number, including area code: (212) 857-3100
Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Name of each exchange on which registered
Class A Common Stock, $0.01 par value |  | New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of the registrant’s knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer x |  | Accelerated Filer ¨ |  | Non-Accelerated Filer ¨ |  | Smaller Reporting Company ¨
|  |  |  | (do not check if a smaller reporting company) |  |

Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý
The aggregate market value of the voting and nonvoting common equity of the registrant held by non-affiliates as of June 30, 2015 was approximately $2.0 billion, based on the closing price of the registrant’s Class A common stock reported on the New York Stock Exchange on such date of $53.96 per share and on the par value of the registrant’s Class B common stock, par value $0.01 per share.
The number of shares of the registrant’s Class A common stock, par value $0.01 per share, outstanding as of February 17, 2016, was 39,724,730. The number of shares of the registrant’s Class B common stock, par value $0.01 per share, outstanding as of February 17, 2016 was 25 (excluding 75 shares of Class B common stock held by a subsidiary of the registrant).
Documents Incorporated by Reference
Portions of the definitive Proxy Statement of Evercore Partners Inc. to be filed pursuant to Regulation 14A of the general rules and regulations under the Securities Exchange Act of 1934, as amended, for the 2016 annual meeting of stockholders ("Proxy Statement") are incorporated by reference into Part III of this Form 10-K.

Table of Contents
EVERCORE PARTNERS INC.
TABLE OF CONTENTS

|  | Page
Part I. |
Item 1. | Business | 2
Item 1A. | Risk Factors | 9
Item 1B. | Unresolved Staff Comments | 24
Item 2. | Properties | 24
Item 3. | Legal Proceedings | 24
Item 4. | Mine Safety Disclosures | 25
Part II. |
Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 26
Item 6. | Selected Financial Data | 28
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 29
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 51
Item 8. | Financial Statements and Supplemental Data | 52
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 104
Item 9A. | Controls and Procedures | 104
Item 9B. | Other Information | 107
Part III. |
Item 10. | Directors, Executive Officers and Corporate Governance | 108
Item 11. | Executive Compensation | 108
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 108
Item 13. | Certain Relationships and Related Transactions and Director Independence | 108
Item 14. | Principal Accountant Fees and Services | 108
Part IV. |  |
Item 15. | Exhibits and Financial Statement Schedules | 109

Table of Contents
PART I
Available Information
Our website address is www.evercore.com. We make available free of charge on the Investor Relations section of our website (http://ir.evercore.com) our Annual Report on Form 10-K ("Form 10-K"), Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed or furnished with the Securities and Exchange Commission (the "SEC") pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934; as amended (the "Exchange Act"). We also make available through our website other reports filed with or furnished to the SEC under the Exchange Act, including our Proxy Statements and reports filed by officers and directors under Section 16(a) of that Act, as well as our Code of Business Conduct and Ethics. From time to time we may use our website as a channel of distribution of material company information. Financial and other material information regarding the Company is routinely posted on and accessible at http://ir.evercore.com. In addition, you may automatically receive email alerts and other information about us by enrolling your email by visiting the "Email Alert" section at http://ir.evercore.com. We do not intend for information contained in our website to be part of this Form 10-K.
Any materials we file with the SEC may be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC, 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
In this report, references to "Evercore", the "Company", "we", "us" and "our" refer to Evercore Partners Inc., a Delaware corporation, and its consolidated subsidiaries. Unless the context otherwise requires, references to (1) "Evercore Partners Inc." refer solely to Evercore Partners Inc., and not to any of its consolidated subsidiaries and (2) "Evercore LP" refer solely to Evercore LP, a Delaware limited partnership, and not to any of its consolidated subsidiaries. References to the "IPO" refer to our initial public offering on August 10, 2006 of 4,542,500 shares of our Class A common stock, including shares issued to the underwriters of the IPO pursuant to their election to exercise in full their overallotment option.
Forward-Looking Statements
This report contains or incorporates by reference forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act, which reflect our current views with respect to, among other things, our operations and financial performance. In some cases, you can identify these forward-looking statements by the use of words such as "outlook", "believes", "expects", "potential", "continues", "may", "should", "seeks", "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. All statements other than statements of historical fact are forward-looking statements and, based on various underlying assumptions and expectations, 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. We believe these factors include, but are not limited to, those described under "Risk Factors" in this report. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included or incorporated by reference in this report. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise except as required by law. You should, however, consult further disclosures we may make in future filings of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any amendments thereto or in future press releases or other public statements.
We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management 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.
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Item 1. | Business

Overview
Evercore is one of the leading independent investment banking advisory firms in the world based on the dollar volume of announced worldwide merger and acquisition ("M&A") transactions on which we have advised since 2000. When we use the term independent investment banking advisory firm, we mean an investment banking firm that directly, or through its affiliates, does not engage in commercial banking or significant proprietary trading activities. We were founded on the belief that there is an opportunity within the investment banking industry for a firm free of the potential conflicts of interest created within large, multi-product capital intensive financial institutions. We believe that maintaining standards of excellence and integrity in our core businesses demands a spirit of cooperation and hands-on participation more commonly found in smaller organizations. Since our inception, we have set out to build—in the employees we choose and in the projects we undertake—an organization dedicated to the highest caliber of professionalism and integrity.
We operate globally through two business segments:

• | Investment Banking; and

• | Investment Management.

Our Investment Banking segment includes our advisory services, through which we provide advice to clients on significant mergers, acquisitions, divestitures and other strategic corporate transactions, with a particular focus on advising prominent multinational corporations and substantial private equity firms on large, complex transactions. We also provide restructuring advice to companies in financial transition, as well as to creditors, shareholders and potential acquirers. In addition, we provide our clients with capital markets advice relating to both debt and equity securities, we underwrite securities offerings and we raise funds for financial sponsors and advise on secondary transactions for private funds interests. Our Investment Banking segment also includes Evercore ISI services through which we offer equity research and agency-only securities sales and trading for institutional investors.
Our Investment Management segment focuses on Institutional Asset Management, through which we manage financial assets for sophisticated institutional investors and provide independent fiduciary services to corporate employee benefit plans; Wealth Management, through which we provide wealth management services for high net-worth individuals; and Private Equity, through which we manage private equity funds. Each of these businesses is led by senior investment professionals with extensive experience in their respective fields.
Investment Banking
At December 31, 2015, our Investment Banking segment had 79 Advisory Senior Managing Directors with expertise and client relationships in a wide variety of industry sectors and broad geographic reach, as well as 88 senior research and distribution professionals in Evercore ISI.
In 2015, our Investment Banking segment generated $1.134 billion, or 92% of our revenues, excluding Other Revenue, net, ($821.4 million, or 89%, in 2014 and $666.8 million, or 87%, in 2013) and earned advisory fees from 484 client transactions.
Advisory
We provide confidential, strategic and tactical advice to both public and private companies, with a particular focus on large, multinational corporations, as well as for select institutional investors and government institutions. By virtue of their prominence, size and sophistication, many of our clients are more likely to require expertise relating to larger and more complex situations. We are advising or have advised on numerous noteworthy transactions during the past three years, including:
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• EMC on its sale to Dell and its owners, Michael S. Dell, MSD Capital and Silver Lake |  | • DuPont in its announced merger with Dow Chemical; its spinoff of Chemours and its successful proxy fight with Trian Fund Management
• Shire on its pending acquisition of Baxalta as well as its acquisition of Dyax |  | • The Special Committee of the Board of Directors of Broadcom on its sale to Avago Technologies
• The Bazalgette Consortium of infrastructure investors on its successful bid to finance, deliver, and own the Thames Tideway Tunnel, a major greenfield sewerage pipeline project in London, England |  | • CVS Health on its acquisition of Omnicare
• Tokio Marine on its acquisition of HCC Insurance Holdings |  | • Abbott Laboratories on its acquisition of Alere
• Energy Future Holdings on the restructuring of its debt |  | • Cable & Wireless Communications on its acquisition of Columbus International and on its sale to Liberty Global
• SilverLake Partners on its sale of IPC Systems to Centerbridge Partners |  | • Old Mutual on the IPO of OM Asset Management
• AstraZeneca on its successful defense against Pfizer’s unsolicited approach |  | • Macquarie Infrastructure Fund IV and Wren House Infrastructure on the acquisition of E.ON’s operations in Spain and Portugal
• The Disinterested Directors of the Board of Chrysler Group on the purchase of the VEBA's 41.5% member interests by Fiat |  | • AT&T on its acquisition of Leap Wireless International
• CLP Holdings on the acquisition, together with China Southern Power Grid, of ExxonMobil's majority stake in its Hong Kong electricity business |  | • Primaris Retail REIT on its defense from a hostile suitor and ultimate sale to H&R REIT

Our approach is to work as a trusted senior advisor to top corporate officers and boards of directors, helping them devise strategies for enhancing shareholder value:

• | Objective Advice with a Long-Term Perspective. We seek to recommend shareholder value enhancement strategies or other financial strategies that we would pursue ourselves were we acting in management’s capacity. This approach often includes advising our clients against pursuing transactions that we believe do not meet that standard.

• | Transaction Excellence. Since the beginning of 2000, we have advised on over $2.0 trillion of announced transactions, including acquisitions, sale processes, mergers of equals, special committee advisory assignments, recapitalizations and restructurings.

• | Senior Level Attention and Experience. The Senior Managing Directors in our advisory business participate in all facets of client interaction, from the initial evaluation phase to the final stage of executing our recommendations.

We advise clients in a number of different situations across many industries and geographies, each of which may require various services:

• | Mergers and Acquisitions. When we advise companies about the potential acquisition of another company or certain assets, our services include evaluating potential acquisition targets, providing valuation analyses, evaluating and proposing financial and strategic alternatives and rendering, if appropriate, fairness opinions. We also may advise as to the timing, structure, financing and pricing of a proposed acquisition and assist in negotiating and closing the acquisition.

• | Divestitures and Sale Transactions. When we advise clients that are contemplating the sale of certain businesses, assets or their entire company, our services include evaluating and recommending financial and strategic alternatives with respect to a sale, advising on valuation issues and the appropriate sales process for the situation, assisting in

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preparing an offering memorandum or other appropriate sales materials and rendering, if appropriate, fairness opinions. We also identify and contact selected qualified acquirers and assist in negotiating and closing the sale.

• | Special Committee and Fairness Opinion Assignments. We are well known for our independence, quality and thoroughness and devoting senior-level attention throughout the project lifecycle. We believe our objectivity, integrity and discretion allow us to provide an unbiased perspective.

• | Restructuring. We provide financial advice and investment banking services to companies in financial transition, as well as to creditors, shareholders and potential acquirers. Our services may include reviewing and analyzing the business, financial condition and prospects of the company or providing advice on strategic transactions, capital raising or restructurings. We also may provide advisory services to companies that have sought or are planning to seek protection under Chapter 11 of the U.S. Bankruptcy Code or other similar processes in non-U.S. jurisdictions.

• | Capital Markets. We serve as an objective advisor to corporations and financial sponsors on a broad array of financing issues. We have developed an expertise in assisting clients with respect to the entire spectrum of capital structure decisions. In addition, we act as an underwriter in public offerings and private placements of debt and equity securities in the U.S. and internationally.

• | Private Funds. We advise fund sponsors in the U.S. and internationally on all aspects of the fundraising process and have expanded our platform to include advising on secondary transactions for private funds interests.

We strive to earn repeat business from our clients. However, we operate in a highly competitive environment in which there are no long-term contracted sources of revenue. Each revenue-generating engagement is separately negotiated and awarded. To develop new client relationships and to develop new engagements from historical client relationships, we maintain an active dialogue with a large number of clients and potential clients, as well as with their financial and legal advisors, on an ongoing basis. We have gained new clients each year through our business development initiatives, through recruiting additional senior professionals who bring with them client relationships and through referrals from directors, attorneys and other third parties with whom we have relationships.
Equities
Evercore ISI's leading analysts and distribution organization provides fundamental, macroeconomic and policy research and transaction execution excellence to the largest and most significant institutional and sovereign investors globally.

• | Equity Research. Our research analysts perform research to help our clients understand the dynamics that drive the industries and companies under coverage. We seek to differentiate ourselves through originality of perspective, depth of insight and ability to uncover industry trends. Our research analysts cover major industry developments, publish research on industry sectors, provide fundamental, company-specific coverage and identify and evaluate investment opportunities in publicly-traded companies.

• | Institutional Sales and Trading. Our professionals provide equity and listed option securities sales and trading services to institutional investors and seek to develop strong relationships with the portfolio managers and traders they serve by working closely with our equity research professionals.

Investment Management
Our Investment Management segment includes Institutional Asset Management, in the United States through Evercore Trust Company, N.A. ("ETC"), Atalanta Sosnoff Capital, LLC ("Atalanta Sosnoff") and ABS Investment Management, LLC ("ABS") and in Mexico through Evercore Casa de Bolsa, S.A. de C.V. ("ECB"); Wealth Management, through Evercore Wealth Management ("EWM") and G5 Holdings S.A. ("G5 ǀ Evercore"); personal trust services through Evercore Trust Company of Delaware, established in 2016; and Private Equity. Our Investment Management business principally manages and invests capital on behalf of third parties, including a broad range of institutional investors such as corporate and public pension funds, endowments, foundations, insurance companies, family offices and high net-worth individuals. Our Investment Management business is led by highly-experienced Portfolio and Client Relationship Managers.
In 2015, our Investment Management segment generated revenue of $95.1 million or 8% of our revenues, excluding Other Revenue, net, ($98.8 million, or 11%, in 2014 and $95.8 million, or 13%, in 2013). As of December 31, 2015, we had $8.2 billion of assets under management ("AUM"), excluding any AUM from our non-consolidated affiliates, of which $1.7 billion was attributable to Institutional Asset Management, $6.2 billion was attributable to Wealth Management and $0.3 billion was attributable to Private Equity clients.
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Institutional Asset Management
Within our Institutional Asset Management business, ETC provides specialized investment management, independent fiduciary and trustee services and ECB primarily manages Mexican fixed income products and offers fiduciary and trust services. Atalanta Sosnoff manages large-capitalization U.S. equity and balanced products and ABS is an institutionally focused hedge fund-of-funds manager. Atalanta Sosnoff and ABS are each investments reported on the equity method of accounting.
Wealth Management
Wealth Management provides services through EWM and G5 ǀ Evercore and personal trust services through Evercore Trust Company of Delaware, established in 2016. EWM targets clients with more than $5 million in investable assets and offers services such as investment policy creation, asset allocation, customized investment management, manager selection, performance reporting and financial planning.
Private Equity
Private Equity manages value-oriented, middle-market private equity funds in Mexico. The Company previously managed funds in the U.S. While we do not intend to raise Evercore-sponsored successor funds in the United States or Europe, we maintain a strategic alliance to pursue private equity investment opportunities with Trilantic Capital Partners ("Trilantic").
In connection with the issuance of certain limited partnership interests in Trilantic, the Company became a limited partner of Trilantic and is entitled to receive 10% of the aggregate amount of carried interest in respect to all of the portfolio investments made by Trilantic IV, up to $15.0 million. The Company and its affiliates are passive investors and do not participate in the management of any Trilantic-sponsored funds. Trilantic also agreed to pay an annual fee to the Company equal to $2.0 million per year for a period of five years, ending in 2014, as consideration for services to be performed by the Company. In addition, as part of the strategic alliance, the Company agreed to commit $5.0 million of the total capital commitments of Trilantic Capital Partners V L.P. ("Trilantic V").
Our Strategies for Growth
We intend to continue to grow and diversify our businesses, and to further enhance our profile and competitive position, through the following strategies:

• | Add Highly Qualified Investment Banking Professionals with Industry and Product Expertise. We hired 10 new Senior Managing Directors in 2015, expanding our capabilities in the U.S. and Europe and increasing our presence in Technology, Healthcare, Energy, and Power and Utilities. We intend to continue to recruit high-caliber advisory, capital markets advisory, funds placement, research and distribution professionals to add depth in industry sectors and products and services in areas that we believe we already have strength, and to extend our reach to sectors or new business lines we have identified as particularly attractive. On occasion these additions result from the acquisition of boutique independent advisory firms with leading professionals in a market or sector.

• | Achieve Organic Growth and Improved Profitability in Investment Management. We are focused on managing our current Investment Management business towards growth and improved profitability. We also continue to selectively evaluate opportunities to expand Wealth Management.

• | Expand In New Geographic Markets. We are expanding in new geographic markets where we believe the business environment will be receptive to the strengths of our Investment Banking business model or where we believe our clients have or may develop a significant presence. Our expansion in Germany, Spain and Singapore, as well as our advisory affiliates and alliances in Brazil, Japan, China, South Korea, India and Australia, represent important steps in this strategy. We are actively seeking to strengthen, expand and deepen these alliances. We may hire groups of talented professionals or pursue additional strategic acquisitions or alliances with highly-regarded regional or local firms whose cultures and operating principles are similar to ours.

Results by Segment and Geographic Location
See Note 22 to our consolidated financial statements for additional information regarding our segment results and the geographic areas from which we derive our revenues.
People
As of December 31, 2015, we employed approximately 1,400 people worldwide. Our senior professionals play a significant role in driving growth and are measured by their productivity either through revenue per Advisory Senior Managing
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Director or other metrics including asset growth for Portfolio and Client Relationship Managers. None of our employees are subject to any collective bargaining agreements, and we believe we have good relations with our employees.
As a leading independent investment banking firm, our core asset is our professional staff, including their intellectual capital and their dedication to providing the highest quality services to our clients. Prior to joining Evercore, many of our Advisory Senior Managing Directors, Senior Research and Sales and Trading Professionals and Portfolio and Client Relationship Managers held senior level positions with other leading corporations, financial services firms or investment firms.
Competition
The financial services industry is intensely competitive, and we expect it to remain so. Our competitors are other investment banking, financial advisory and investment management firms. We compete both globally and on a regional, product or niche basis. We compete on the basis of a number of factors, including transaction execution skills, investment performance, quality of equity research, our range of products and services, innovation, reputation and price.
Evercore is predominantly an independent investment banking advisory firm, and its competitors can be categorized into three main groups: (1) large universal banks and bulge bracket firms such as Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and UBS, (2) independent advisory firms such as Lazard and Rothschild and (3) boutiques, such as Centerview, Greenhill, Moelis, Perella Weinberg and PJT Partners, among others. We believe, and our clients have informed us, that firms which also engage in acquisition financing, significant proprietary trading in clients’ securities and the management of large private equity funds that often compete with clients can cause such firms to develop interests that may be in conflict with the interests of advisory clients. Since Evercore is able to avoid potential conflicts associated with these types of activities, we believe that Evercore is better able to develop more trusted and long-term relationships with its clients than those of its competitors which provide such services. In addition, we have a larger global presence and deeper sector expertise than many of the boutiques. Evercore ISI's business is also subject to competition from investment banks and other large and small financial institutions who offer similar services.
We believe that we face a range of competitors in our Investment Management business, with numerous other firms providing competitive services in each of our sectors. In Institutional Asset Management, each of Atalanta Sosnoff, ABS, ECB and ETC face substantial competition from a large number of asset management and trust companies, many of which are larger, more established firms with greater brand name recognition and more extensive client networks and product offerings. Wealth Management competes with domestic and global private banks, regional broker-dealers, independent broker-dealers, registered investment advisors, commercial banks, trust companies and other financial services firms offering wealth management services to clients, many of which have substantially greater resources and offer a broader range of services. In Private Equity, our competition includes private equity funds of all sizes.
Competition is also intense for the attraction and retention of qualified employees. Our ability to continue to compete effectively in our businesses will depend upon our ability to attract new employees and retain and motivate our existing employees.
Regulation
United States
Our business, as well as the financial services industry generally, is subject to extensive regulation in the United States and elsewhere. As a matter of public policy, regulatory bodies in the United States and the rest of the world are charged with safeguarding the integrity of the securities and other financial markets and with protecting the interests of customers participating in those markets. In the United States, the SEC is the federal agency responsible for the administration of the federal securities laws. Evercore Group L.L.C. ("EGL"), a wholly-owned subsidiary of ours through which we conduct our investment banking business, is registered as a broker-dealer with the SEC and the Financial Industry Regulatory Authority ("FINRA"), and is registered as a broker-dealer in various states and the District of Columbia. EGL is subject to regulation and oversight by the SEC. FINRA, a self-regulatory organization that is subject to oversight by the SEC, adopts and enforces rules governing the conduct, and examines the activities, of its member firms, including EGL. The SEC, FINRA, and regulators in various non-U.S. jurisdictions impose both conduct-based and disclosure-based requirements with respect to research reports and research analysts. State securities regulators also have regulatory or oversight authority over EGL. On December 31, 2015, the operations of International Strategy & Investment Group L.L.C. were transferred to EGL. The Private Funds Group is impacted by various state and local regulations that restrict or prohibit the use of placement agents in connection with
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investments by public pension funds, including regulations in New York, Illinois, Ohio, California and New Mexico. Similar measures are being considered or have been implemented in other jurisdictions.
Broker-dealers are subject to regulations that cover all aspects of the securities business, including sales methods, trade practices, use and safekeeping of customers’ funds and securities, capital structure, record-keeping, the financing of customers’ purchases and the conduct and qualifications of directors, officers and employees. In particular, as a registered broker-dealer and member of a self-regulatory organization, we are subject to the SEC’s uniform net capital rule, Rule 15c3-1. Rule 15c3-1 specifies the minimum level of net capital a broker-dealer must maintain and also requires that a significant part of a broker-dealer’s assets be kept in relatively liquid form. The SEC and various self-regulatory organizations impose rules that require notification when net capital falls below certain predefined criteria, limit the ratio of subordinated debt to equity in the regulatory capital composition of a broker-dealer and constrain the ability of a broker-dealer to expand its business under certain circumstances. Additionally, the SEC’s uniform net capital rule imposes certain requirements that may have the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to the SEC for certain withdrawals of capital. EGL is also subject to the SEC's Market Access Rule, Rule 15c3-5. The Market Access Rule requires EGL to have controls and procedures in place to limit financial exposure caused by having direct market access. Our broker-dealer subsidiaries are also subject to regulations, including the USA PATRIOT Act of 2001 (the "Patriot Act"), which impose obligations regarding the prevention and detection of money-laundering activities, including the establishment of customer due diligence and other compliance policies and procedures. Failure to comply with these requirements may result in monetary, regulatory and, in certain cases, criminal penalties.
We are also subject to the U.S. Foreign Corrupt Practices Act, which prohibits offering, promising, giving, or authorizing others to give anything of value, either directly or indirectly, to a non-U.S. government official in order to influence official action or otherwise gain an unfair business advantage, such as to obtain or retain business.
Three of our affiliates, EWM, ABS and Atalanta Sosnoff, are registered as investment advisors with the SEC. Registered investment advisors are subject to the requirements and regulations of the Investment Advisers Act of 1940. Such requirements relate to, among other things, fiduciary duties to clients, maintaining an effective compliance program, solicitation agreements, conflicts of interest, recordkeeping and reporting requirements, disclosure requirements, limitations on agency cross and principal transactions between an advisor and advisory clients, state and local political contributions, as well as general anti-fraud prohibitions. EWM is also an investment advisor to a mutual fund, which subjects EWM to additional regulations under the Investment Company Act of 1940 (the "1940 Act"). ETC, which is limited to fiduciary activities, is regulated by the Office of the Comptroller of the Currency ("OCC"), is a member bank of the Federal Reserve System and is subject to the Patriot Act and to the state laws in the jurisdictions in which it operates. Evercore Trust Company of Delaware ("ETCDE"), established in 2016, is a limited purpose trust company regulated by the Office of the Delaware State Bank Commissioner. ETCDE is subject to the rules and regulations applicable to limited purpose trust companies operating in Delaware.
Mexico
ECB is authorized by the Mexican Ministry of Finance to act as a broker-dealer and financial advisor in accordance with the Mexican Securities Market Law. ECB is subject to regulation and oversight by the Mexican Ministry of Finance and the Mexican National Banking and Securities Commission, including the maintenance of minimum capital requirements. In addition, the Mexican Broker Dealer Association, a self-regulatory organization that is subject to oversight by the Mexican National Banking and Securities Commission, adopts and enforces rules governing the conduct, and examines the activities of, its member broker-dealers, including ECB. ECB has been authorized by the Mexican National Banking and Securities Commission to act as a trustee and to operate in the equity markets.
United Kingdom
Authorization by the Financial Conduct Authority ("FCA"). The FCA is responsible for regulating Evercore Partners International LLP ("Evercore UK") and International Strategy & Investment (UK) Limited ("ISI UK"), the London vehicle of the recently acquired ISI business. The Financial Services and Markets Act 2000 ("FSMA") is the basis for the UK’s financial services regulatory regime. FSMA is supported by secondary legislation and other rules made under FSMA, including the FCA Handbook of Rules and Guidance. A key FSMA provision is section 19, which contains a "general prohibition" against any person carrying on a "regulated activity" (or purporting to do so) in the UK unless he is an authorized or exempt person. It is a criminal offense to breach this general prohibition and certain agreements made in breach may not be enforceable. The "regulated activities" are set out in the FSMA (Regulated Activities) Order 2001 (as amended). Evercore UK is authorized to carry out regulated activities including: advising on investments; arranging (bringing about) deals in investments and making arrangements with a view to transactions in investments. ISI UK is also authorized to carry out these activities and, additionally,
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is authorized to carry out the regulated activity of dealing in investments as agent. As UK authorized persons, Evercore UK and ISI UK are subject to the FCA’s high level principles for businesses, conduct of business obligations and organizational requirements. The FCA has extensive powers to supervise and intervene in the affairs of the firms. It can take a range of disciplinary enforcement actions, including public censure, restitution, fines or sanctions and the award of compensation.
FSMA also has a civil penalty regime for market abuse, supplemented by the FCA's Code of Market Conduct, which exists independently of a separate criminal regime for insider dealing. The civil regime implements the Market Abuse Directive ("MAD") in the UK. MAD is being replaced by a new Markets Abuse Regulation ("MAR"), which will expand and develop the existing EU market abuse regime. MAR will apply from July 3, 2016.
Regulatory Capital. Regulatory capital requirements form an integral part of the FCA’s prudential supervision of FCA authorized firms. The regulatory capital rules oblige firms to hold a certain amount of capital at all times (taking into account the particular risks to which the firm may be exposed given its business activities), thereby helping to ensure that firms can meet their liabilities as they fall due and safeguarding their (and their counterparties’) financial stability. The FCA also expects firms to take a proactive approach to monitoring and managing risks, consistent with its high level requirement for firms to have adequate financial resources. However, as a so-called "exempt-CAD firm", Evercore UK is subject only to limited minimum capital requirements. ISI UK is a so-called "BIPRU investment firm". As a result, it is potentially subject to a greater minimum regulatory capital requirement, currently based on its annual fixed expenditure (its "fixed overhead requirement"). The FCA may impose a higher capital requirement than the minimum requirement on BIPRU investment firms.
Anti-Money Laundering, Counter-Terrorist Financing and Anti-Bribery. The Money Laundering Regulations 2007 came into force on December 15, 2007 and implement the Third EU Money Laundering Directive ("MLD 3"). The MLD 3 harmonizes standards across the EU with higher-level, risk-based requirements and require relevant firms to have procedures in place to prevent money laundering and to take a risk-based approach to focus the efforts where they are most needed. This approach includes client due diligence, monitoring, staff training and awareness. Failure to maintain the necessary procedures is a criminal offense. The Fourth EU Money Laundering Directive (“MLD 4”), which entered into force on June 25, 2015 amends and replaces MLD 3. MLD 4 is designed to reinforce the efficacy of EU law in countering money laundering and terrorist financing and to ensure that the EU framework is aligned with the International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation adopted by the Financial Action Task Force's anti-money in 2012. Member states are required to bring into force the laws, regulations and administrative provisions necessary to comply with MLD 4 by June 26, 2017 although the Commission of the European Union has called on member states to agree to bring forward the date for effective transposition and application of MLD 4 to the fourth quarter of 2016. The Commission has also announced that it intends to publish a legislative proposal with amendments to MLD 4 by the second quarter of 2016.
The Proceeds of Crime Act 2002 and the Terrorism Act 2000 also contain a number of offenses in relation to money laundering and terrorist financing, respectively. Evercore UK, ISI UK (and potentially other Evercore entities with a ‘close connection’ to the UK) are also subject to the UK Bribery Act 2010 which came into force on July 1, 2011. It provides for criminal penalties for bribery of, or receipt of a bribe from, public officials, corporations and individuals, as well as for the failure of an organization to prevent a person with whom it is associated from providing bribes for the organization’s benefit.
Regulatory Framework in the European Union. Both Evercore UK and ISI UK have obtained the appropriate European investment services passport rights to provide cross-border services into a number of other members of the European Economic Area ("EEA"). Evercore UK has also obtained a passport to provide specific investment services from a Spanish branch. These "passports" derive from the pan-European regime established by the EU Markets in Financial Instruments Directive ("MiFID"), which regulates the provision of investment services and activities throughout the EEA. MiFID provides investment firms which are authorized in any one EEA member state the right to provide investment services on a cross-border basis, or through the establishment of a branch to clients located in other EEA member states (known as "host member states") on the basis of their home member state authorization without the need for separate authorization by the competent authorities in the relevant host member state. This practice is known as "passporting".
MiFID has been recast and replaced with a new directive ("MiFID 2") and a new Markets in Financial Instruments Regulation ("MiFIR"). Among the measures introduced by MiFID 2 and MiFIR are enhanced investor protection and conduct of business rules. One aspect of the enhanced conduct of business rules is stricter restrictions on investment firms making or receiving so-called "inducements" including dealing (or broker) commissions. MiFID 2 and MiFIR also introduce a harmonized regime for access by non-European firms to the EU investment services market. This could impact the ability of Evercore entities outside of Europe to provide investment services within Europe. Both MiFID 2 and MiFIR entered into force on July 2, 2014 and must generally be applied by member states by January 3, 2017 (although this application date is expected to be postponed by at least one year).
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Hong Kong
In Hong Kong, the Securities and Futures Commission ("SFC") regulates our subsidiary, Evercore Asia Limited ("Evercore Asia"). The compliance requirements of the SFC include, among other things, net capital requirements and stockholders’ equity requirements. The SFC regulates the activities of the officers, directors, employees and other persons affiliated with Evercore Asia, and require the registration of such persons.
Singapore
In Singapore, corporate finance advisory activities are regulated by the Monetary Authority of Singapore ("MAS") and subject to licensing requirements. Evercore Asia (Singapore) Pte. Ltd. maintains a Capital Market Services license issued by the MAS for dealing in securities and advising on corporate finance matters.
General
Certain of our businesses are subject to compliance with laws and regulations of U.S. federal and state governments, non-U.S. governments, their respective agencies and/or various self-regulatory organizations or exchanges relating to, among other things, the privacy of client information, and any failure to comply with these regulations could expose us to liability and/or reputational damage. Additional legislation, changes in rules promulgated by financial authorities and self-regulatory organizations or changes in the interpretation or enforcement of existing laws and rules, either in the United States or elsewhere, may directly affect our mode of operation and profitability.
The U.S. and non-U.S. government agencies and self-regulatory organizations, as well as state securities commissions in the United States and Mexican Financial Authorities, are empowered to conduct periodic examinations and initiate administrative proceedings that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a regulated entity or its directors, officers or employees.

Item 1A. | Risk Factors

Risks Related to Our Business
Difficult market conditions may adversely affect our business in many ways, including reducing the volume of the transactions involving our Investment Banking business and reducing the value of the assets we manage in our Investment Management businesses, which, in each case, may materially reduce our revenue or income.
As a financial services firm, our businesses are materially affected by conditions in the global financial markets and economic conditions throughout the world. Global financial markets and economic conditions are negatively impacted by many factors beyond our control, including the inability to access credit markets, rising interest rates or inflation, terrorism, political uncertainty, uncertainty in the U.S. federal fiscal policy and the fiscal policy of foreign governments and the timing and nature of regulatory reform. Financial market and economic conditions have been volatile in the last several years, and challenging conditions have persisted. Concerns over the rate of economic recovery, the level of U.S. national debt and foreign debt, unemployment, the availability and cost of credit, the global housing market, inflation levels, currency fluctuations, energy costs (including significant declines in oil prices) and geopolitical issues have contributed to increased volatility, uncertainty and diminished expectations for the economy and for the markets. These conditions could reduce the demand for our services and present new challenges. Revenue generated by our Investment Banking business is related to the volume and value of the transactions in which we are involved. The majority of our bankers are focused on covering clients in the context of providing M&A services and those activities generate a substantial portion of our revenues. During periods of unfavorable market and economic conditions, our operating results may be adversely affected by a decrease in the volume and value of M&A transactions and increasing price competition among financial services companies seeking advisory engagements. Additionally, our clients engaging in M&A transactions often rely on access to the credit and/or capital markets to finance their transactions. The uncertainty of available credit and the volatility of the capital markets can adversely affect the size, volume, timing and ability of such clients to successfully complete M&A transactions and adversely affect our Investment Banking business.
In the event of a decline in M&A activity we may seek to generate greater business from our restructuring and capital markets services and our Evercore ISI business. However, it is unlikely that we will be able to offset lower revenues in their entirety from our M&A activities with revenues generated from restructuring and capital markets services or from our Evercore ISI business. Our restructuring services, which provide financial advice and investment banking services to companies in financial transition, as well as to creditors, shareholders and potential acquirers, our capital markets services, which provide
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corporations and financial sponsors with advice relating to a broad array of financing issues and our Evercore ISI business, which provides equity research and agency-only securities sales and trading for institutional investors, are intentionally smaller than our M&A advisory business and we expect that they will remain that way for the foreseeable future.
Unfavorable market conditions also may lead to a reduction in revenues from our trading, underwriting and placement agent activities. In addition, Europe’s ongoing debt crisis could have a material adverse effect on our U.K. advisory business. The European sovereign debt crisis has continued to negatively impact economic conditions and global markets. The uncertainty over the outcome of international and the EU’s financial support programs and the possibility that other EU member states may experience similar financial troubles could further disrupt global markets. See "-A portion of our revenues are derived from our international operations, which are subject to certain risks."
During a market or general economic downturn, our Institutional Asset Management and Wealth Management businesses would also be expected to generate lower revenue because the management fees we receive are typically based on the market value of the securities that comprise the assets we manage. In addition, due to uncertainty or volatility in the market or in response to difficult market conditions, clients may withdraw funds from these businesses in favor of investments they perceive as offering greater opportunity or lower risk. Difficult market conditions can also materially adversely affect our ability to launch new products or offer new services in our Institutional Asset Management or Wealth Management businesses, which could negatively affect our ability to increase AUM. In each case, management fees based on AUM would be negatively affected. Moreover, difficult market conditions may negatively impact the private equity funds that we manage by further reducing valuations and curtailing opportunities to exit and realize value from their investments.
Certain aspects of our cost structure are largely fixed, and we may incur costs associated with new or expanded lines of business prior to these lines of business generating significant revenue. If our revenue declines or fails to increase commensurately with the expenses associated with new or expanded lines of business, our profitability may be materially adversely affected.
We may incur costs associated with new or expanded lines of business, including guaranteed or fixed compensation costs, prior to these lines of business generating significant revenue. In addition, certain aspects of our cost structure, such as costs for occupancy and equipment rentals, communication and information technology services, and depreciation and amortization are largely fixed, and we may not be able to timely adjust these costs to match fluctuations in revenue. If our revenue declines, or fails to increase commensurately with the expenses associated with new or expanded lines of business, our profitability may be materially adversely affected.
We depend on our senior professionals, including our executive officers, and the loss of their services could have a material adverse effect on us.
Our senior leadership team’s expertise, skill, reputation and relationships with clients and potential clients are critical elements in maintaining and expanding our businesses. For example, our Investment Banking business, including Advisory and Evercore ISI, is dependent on our senior Investment Banking professionals and on a small number of senior research analysts, traders and executives. In addition, EWM and ETC are dependent on a small number of senior portfolio managers and executives. Further, the operations and performance of G5 ǀ Evercore, ABS and Atalanta Sosnoff are dependent on a small number of senior executives. Our professionals possess substantial experience and expertise and strong client relationships. However, they are not obligated to remain employed with us. If these personnel were to retire, join an existing competitor, form a competing company or otherwise leave us, it could jeopardize our relationships with clients and result in the loss of client engagements and revenues.
If we are unable to successfully identify and hire productive individuals to join our firm or consummate additional acquisitions, alliances or joint ventures on attractive terms, we may not be able to implement our growth strategy successfully.
Our growth strategy is based, in part, on expanding our various businesses through additional acquisitions, entering into joint ventures and strategic alliances, and internally developing new opportunities that are complementary to our existing businesses and where we think we can add substantial value or generate substantial returns. The success of this strategy will depend on, among other things:

• | the availability of suitable opportunities and capital resources to effect our strategy;

• | the level of competition from other companies that may have greater financial resources than we do or may not require the same level of disclosure of these activities;

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• | our ability to value acquisition and investment candidates accurately and negotiate acceptable terms for those acquisitions and investments; and

• | our ability to identify and enter into mutually beneficial relationships with joint venture partners.

Our growth strategy also relies on our ability to attract and retain profitable senior finance professionals across all of our businesses. To the extent we award compensation based on our business performance, we may not be able to retain our professionals, which could result in increased recruiting expenses or our recruiting professionals at higher compensation levels. For example, in connection with the formation of Evercore ISI, we issued to a large number of employees Class G and H limited partnership interests of Evercore LP ("Class G and H LP Interests") that become exchangeable for common stock only upon the satisfaction of multi-year performance conditions. If business and economic conditions are such that satisfaction of these conditions becomes less likely, the effectiveness of these interests in retaining employees, including key senior employees, may be reduced.
Due to the early stage of development of certain of our businesses and competition from other firms, we may face difficulties in recruiting and retaining professionals of a caliber consistent with our business strategy. In particular, many of our competitors may be able to offer more attractive compensation packages or broader career opportunities. Additionally, it may take more than one year for us to determine whether new advisory professionals will be profitable or effective, during which time we may incur significant expenses and expend significant time and resources on training, integration and business development.
If we are not successful in implementing our growth strategy, our business and results and the market price for our Class A common stock may be adversely affected.
Our inability to develop, integrate and manage recently added capabilities, joint ventures, alliances and acquired businesses successfully could have adverse consequences to our business.
Integrating acquired businesses, providing a platform for new businesses and partnering with other firms involve a number of risks and present financial, managerial and operational challenges, including the following factors, among others:

• | loss of key employees or customers;

• | possible inconsistencies in or conflicts between standards, controls, procedures and policies and the need to implement company-wide financial, accounting, information technology and other systems;

• | failure to maintain the quality of services that have historically been provided;

• | failure to coordinate geographically diverse organizations;

• | compliance with regulatory requirements in regions in which new businesses and ventures are located; and

• | the diversion of management’s attention from our day-to-day business as a result of the need to manage any disruptions and difficulties and the need to add management resources to do so.

For example, acquisitions and internally developed initiatives generally result in increased operating and administrative costs as the necessary infrastructure, IT, legal and compliance systems, controls and personnel are put in place. Our inability to develop, integrate and manage acquired companies, joint ventures or other strategic relationships and growth initiatives in an efficient and cost-effective manner, or at all, could have material adverse short- and long-term effects on our operating results, financial condition and liquidity.
We may not realize the cost savings, revenue enhancements or other benefits that we expected from our acquisitions and other growth initiatives.
Our analyses of the benefits and costs of expanding our businesses necessarily involve assumptions as to future events, including general business and industry conditions, the longevity of specific customer engagements and relationships, operating costs and competitive factors, many of which are beyond our control and may not materialize. While we believe our analyses and their underlying assumptions to be reasonable, they are estimates that are necessarily speculative in nature. In addition, new regulatory requirements and conflicts may reduce the synergies that we expect to result from our growth initiatives. Even if we achieve the expected benefits, we may not be able to achieve them within the anticipated time frame. Also, the cost savings and other synergies from these acquisitions may be offset by costs incurred in integrating the companies, increases in other expenses or problems in the business unrelated to these acquisitions. In the case of joint ventures, we are subject to additional risks and uncertainties in that we may be dependent upon, and subject to liability, losses or reputational damage relating to personnel, systems and activities that are not under our direct and sole control, and conflicts and disagreements between us and our joint venture partners may negatively impact our business.
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Additionally, acquiring the equity of an existing business or substantially all of the assets of a company may expose us to liability for actions taken by an acquired business and its management before the acquisition. The due diligence we conduct in connection with an acquisition and any contractual guarantees or indemnities that we receive from the sellers of acquired companies may not be sufficient to protect us from, or compensate us for, actual liabilities. A material liability associated with an acquisition, especially where there is no right to indemnification, could adversely affect our operating results, financial condition and liquidity.
Our growth has placed, and will continue to place, significant demands on our administrative, operational and financial resources.
We have experienced significant growth in the past several years, including in our Investment Banking business, by expanding into sales, trading, research and underwriting activities, entering into strategic alliances, acquiring ISI and The Lexicon Partnership LLP ("Lexicon") and the hiring of additional senior professionals in our advisory group, and in our Investment Management business through the acquisitions of Atalanta Sosnoff and Mt. Eden Investment Advisors, LLC and our investment in ABS. Supporting this growth has placed significant demands on our operational, legal, regulatory and financial systems and resources for integration, training and business development efforts. We are often required to commit additional resources to maintain appropriate operational, legal, regulatory and financial systems to adequately support expansion, even when we only partner, enter into strategic alliances or take minority stakes in other businesses. We expect our growth to continue, which could place additional demands on our resources and increase our expenses. We cannot provide assurance that our financial controls, the level of knowledge of our personnel, our operational abilities, our legal and compliance controls and our other corporate support systems will be adequate to manage our expanding operations effectively. Any failure to do so could adversely affect our ability to pursue our growth strategy, generate revenue and control expenses.
Our revenue and profits are highly volatile, which may make it difficult for us to achieve steady earnings growth on a quarterly basis and may cause the price of our Class A common stock to decline.
Our revenue and profits are highly volatile and we can experience significant fluctuations in quarterly results. We generally derive Investment Banking revenue from engagements that generate significant fees at key transaction milestones, such as closing, and the timing of these milestones is outside of our control. As a result, our financial results will likely fluctuate from quarter to quarter based on the timing of when those fees are earned. It may be difficult for us to achieve steady earnings growth on a quarterly basis, which could, in turn, lead to large adverse movements in the price of our Class A common stock or increased volatility in our stock price generally.
We earn a majority of our revenue from advisory engagements, and, in many cases, we are not paid until the successful consummation of the transactions. As a result, our Investment Banking revenue is highly dependent on market conditions and the decisions and actions of our clients, interested third parties and governmental authorities. For example, a client could delay or terminate an acquisition transaction because of a failure to agree upon final terms with the counterparty, failure to obtain necessary regulatory consents or board or stockholder approvals, failure to secure necessary financing, adverse market conditions or because the target’s business is experiencing unexpected operating or financial problems. Anticipated bidders for assets of a client during a restructuring transaction may not materialize or our client may not be able to restructure its operations or indebtedness due to a failure to reach agreement with its principal creditors. In these circumstances, we often do not receive any advisory fees other than the reimbursement of certain out-of-pocket expenses, despite the fact that we have devoted considerable resources to these transactions.
In Institutional Asset Management and Wealth Management, our revenue includes management fees from assets we manage. These revenues are dependent upon the amount of AUM, which can decline as a result of market depreciation, withdrawals or otherwise, as well as the performance of the assets. The timing of flows, contributions and withdrawals are often out of our control, can occur on short notice, and may be inconsistent from quarter to quarter. See "—The amount and mix of our AUM are subject to significant fluctuations." In addition, a portion of our Institutional Asset Management revenue is derived from performance fees, which vary depending on the performance of the investments we select for the funds and clients we manage, which could cause our revenue and profits to fluctuate. Even in the absence of a market downturn, below-market investment performance by our funds and portfolio managers could reduce AUM and asset management revenues.
In Private Equity, we record revenue from performance fees, or carried interest, upon the earlier of the termination of the investment fund or when the likelihood of clawback is mathematically improbable. Our Private Equity revenue also includes our allocable share, based on our investments in the funds managed by our Private Equity business, of unrealized ("mark-to-market") as well as realized gains and losses reported by such funds. As a result, because the investment returns of our Private
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Equity funds are uncertain and difficult to predict, the revenue we derive from our Private Equity business can be volatile from quarter to quarter and year to year.
Our failure to deal appropriately with conflicts of interest could damage our reputation and materially adversely affect our business.
As we have expanded the scope of our businesses and client base, we increasingly confront actual and potential conflicts of interest relating to our Investment Banking and Investment Management businesses. It is possible that actual, potential or perceived conflicts could give rise to client dissatisfaction, litigation or regulatory enforcement actions. Appropriately identifying and managing actual or perceived conflicts of interest is complex and difficult, and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with one or more potential or actual conflicts of interest. Regulatory scrutiny of, or litigation in connection with, conflicts of interest would have a material adverse effect on our reputation which would materially adversely affect our business in a number of ways, including an inability to raise additional assets and a reluctance of potential clients and counterparties to do business with us. Additionally, client-imposed conflicts requirements could place additional limitations on us, for example, by limiting our ability to accept Investment Banking advisory engagements or provide fiduciary services to our Investment Management clients.
Policies, controls and procedures that we may be required to implement to address additional regulatory requirements, including as a result of Evercore ISI's business and our expansion into underwriting activities, or to mitigate actual or potential conflicts of interest, may result in increased costs, including for additional personnel and infrastructure and IT improvements, as well as limit our activities and reduce the positive synergies that we seek to cultivate across our businesses. For example, due to our expanded equity research activities through Evercore ISI, we face an increased potential for conflicts of interest, including situations where our provision or publication of research conflicts with the interests of a client, or allegations that research objectivity is being inappropriately impacted by client considerations. Such conflicts may also arise if our Investment Banking advisory business has access to material non-public information that may not be shared with our equity research business or vice versa. In addition, ETC may seek independent fiduciary assignments which might present an actual or perceived conflict with our Advisory business.
Certain of our executive officers and employees responsible for managing Discovery Americas I, L.P. (the "Discovery Fund") have invested their own capital in side-by-side investments in specific portfolio companies along with the Discovery Fund. These side-by-side investments are not subject to management fees or carried interest. As a result, some of our executive officers and private equity portfolio managers have a different economic interest in the performance of investments in certain portfolio companies compared to the interests of investors in our private equity funds. This lack of a total alignment of interests and incentives could result in our executive officers and private equity portfolio managers devoting a disproportionate amount of time and attention to certain investments, and could result in the underperformance of our private equity fund as a whole.
Employee misconduct, which is difficult to detect and deter, could harm us by impairing our ability to attract and retain clients while subjecting us to significant legal liability and reputational harm.
There have been a number of highly-publicized cases involving fraud or other misconduct by employees in the financial services industry, and there is a risk that our employees could engage in misconduct that adversely affects our business. Our Investment Banking business also often requires that we deal with confidential matters of great significance to our clients. If our employees were to improperly use or disclose confidential information provided by our clients, we could be subject to regulatory sanctions and suffer serious harm to our reputation, financial position, current client relationships and ability to attract future clients and employees. We are also subject to a number of obligations and standards arising from our Investment Management business and our authority over the assets managed by our Investment Management business. The violation of these obligations and standards by any of our employees would adversely affect our clients and us. It is not always possible to deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in all cases. If our employees engage in misconduct, our business may be adversely affected.
In addition, in recent years, the U.S. Department of Justice and the SEC have also devoted greater resources to the enforcement of the Foreign Corrupt Practices Act, and the United Kingdom has recently significantly expanded the reach of its anti-bribery laws. While we have developed and implemented policies and procedures designed to ensure strict compliance with anti-bribery and other laws, such policies and procedures may not be effective in all instances to prevent violations. Any determination that any of our employees have violated these laws (or similar laws of other jurisdictions in which we do business) could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunction on future conduct, securities litigation and reputational damage, any one of which could adversely affect our business, financial position or results of operations.
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The financial services industry faces substantial litigation risks, and we may face damage to our professional reputation and legal liability if our services are not regarded as satisfactory or for other reasons.
As a financial services firm, we depend to a large extent on our relationships with our clients and our reputation for integrity and high-caliber professional services to attract and retain clients. As a result, if a client is not satisfied with our services or if there are allegations of improper conduct by private litigants or regulators, whether the ultimate outcome is favorable or unfavorable to us, as well as negative publicity and press speculation about us, whether or not valid, may harm our reputation and may be more damaging to our business than to other types of businesses. Moreover, our role as advisor to our clients on important mergers and acquisitions or restructuring transactions often involves complex analysis and the exercise of professional judgment, including, if appropriate, rendering fairness opinions in connection with mergers and other transactions.
In recent years, particularly in highly volatile markets, the volume of claims and amount of damages claimed in litigation and regulatory proceedings against M&A financial advisors has been increasing. Our business is also subject to regulation in the countries in which it operates. As this regulatory environment continues to change (in some cases potentially significantly) it is difficult to assess future litigation and regulatory risks. This regulatory change also makes it harder for our clients to estimate future potential losses that may be incurred. Our M&A advisory activities may subject us to the risk of significant legal liability to our clients and third parties, including our clients’ stockholders, under securities or other laws for materially false or misleading statements made in connection with securities and other transactions and potential liability for the fairness opinions and other advice provided to participants in corporate transactions. In addition, a portion of our M&A advisory fees are obtained from restructuring clients, and often these clients do not have sufficient resources to indemnify us for costs and expenses associated with third-party subpoenas and, to the extent claims are not barred as part of the reorganization process, direct claims. Our engagements typically include broad indemnities from our clients and provisions designed to limit our exposure to legal claims relating to our services, but these provisions may not protect us or may not be adhered to in all cases. As a result, we may incur significant legal expenses in defending against litigation. In our Investment Management business, we make investment decisions on behalf of our clients that could result in substantial losses. This also may subject us to the risk of legal liability or actions alleging negligent misconduct, breach of fiduciary duty or breach of contract. These risks often may be difficult to assess or quantify and their existence and magnitude often remain unknown for substantial periods of time. Substantial legal liability or legal expenses incurred in defending against litigation could materially adversely affect our business, financial condition, operating results or liquidity or cause significant reputational harm to us, which could seriously harm our business.
Extensive and evolving regulation of our businesses exposes us to the potential for significant penalties and fines due to compliance failures, increases our costs and limits our ability to engage in certain activities.
The financial services industry is subject to extensive regulation, as described further under "Business - Regulation" above. We are subject to regulation by governmental and self-regulatory organizations in the jurisdictions in which we operate. Our failure to comply with applicable laws or regulations could result in adverse publicity and reputational harm as well as fines, suspensions of personnel or other sanctions, including revocation of the registration of us or any of our subsidiaries as an investment adviser or broker-dealer. For example, we are subject to extensive bribery and anti-corruption regulation, which can present heightened risks for us due to certain jurisdictions in which we operate and our significant client relationships with governmental entities and certain businesses that receive support from government agencies. Our businesses are subject to periodic examination by various regulatory authorities, and we cannot predict the outcome of any such examinations or estimate the amount of monetary fines or penalties which could be assessed. In addition, adverse regulatory scrutiny of any of our strategic partners could have a material adverse effect on our business and reputation. For example, the SEC has recently focused on investment advisers, investigating and bringing enforcement actions where such advisers have breached or are alleged to have breached their fiduciary duties to clients. Any investigation by the SEC, even in the absence of wrongdoing, could damage our reputation with clients and adversely affect our operations.
In recent years, the U.S. and other governments have taken actions, and may continue to take further actions, including expanding current or enacting new standards, requirements and rules that may be applicable to us and our subsidiaries and in particular our Investment Management business. For example, several states and municipalities in the United States have adopted "pay-to-play" rules, which could limit our ability to charge advisory fees, and could therefore affect the profitability of that portion of our business. In addition, the use of "soft dollars", where a portion of commissions paid to broker-dealers in connection with the execution of trades also pays for research and other services provided to advisors, is periodically reexamined and may in the future be limited or modified. Although a substantial portion of the research relied on by our Investment Management business in the investment decision-making process is generated internally by our investment analysts, external research, including external research paid for with soft dollars, is important to the process. This external research
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generally is used for information gathering or verification purposes, and includes broker-provided research, as well as third-party provided databases and research services. If the use of soft dollars is limited, we may have to bear some of these costs. Furthermore, new regulations regarding the management of hedge funds and the use of certain investment products may impact our Investment Management business and result in increased costs. For example, many regulators around the world adopted disclosure and reporting requirements relating to the hedge fund businesses or other businesses, and changes to the laws, rules and regulations in the U.S. related to the over-the-counter swaps and derivatives markets require additional registration, recordkeeping and reporting obligations.
Over the last several years, global financial markets have experienced extraordinary disruption and volatility, and there have been a number of highly-publicized financial scandals involving misconduct by financial market participants and their employees. As a result, various U.S. and foreign government agencies and regulatory bodies have taken, and may take further, actions to expand laws, rules, regulations and standards that may be applicable to our activities. Our ability to conduct business and our operating results, including compliance costs, may be adversely affected as a result of any new requirements imposed by the SEC, other U.S. or foreign governmental regulatory authorities or self-regulatory organizations that regulate financial services firms or supervise financial markets. We also may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and self-regulatory organizations. In addition, some of our clients or prospective clients may adopt policies that exceed regulatory requirements and impose additional restrictions. For example, certain public pension funds will not invest in funds where a placement agent or other solicitor was involved.
The full extent of the effects of governmental economic and regulatory involvement in the wake of disruption and volatility in global financial markets remains uncertain.
As a result of market volatility and disruption in the last several years, the U.S. and other governments have taken unprecedented steps to try to stabilize the financial system, including investing in financial institutions and taking certain regulatory actions. The full extent of the effects of these actions and legislative and regulatory initiatives (including the Dodd-Frank Act) effected in connection with, and as a result of, such extraordinary disruption and volatility is uncertain, both as to the financial capital markets and participants in general, and as to us in particular. Furthermore, there can be no assurance that governmental or other measures to aid economic recovery, including economic stimulus legislation, will be effective. As these conditions persist, our business, financial condition, results of operation and ability to make distributions to our stockholders could be materially adversely affected.
Our business is subject to various operational risks.
We face various operational risks related to our businesses on a day-to-day basis. We rely heavily on financial, accounting, communication and other data processing systems. These systems, including the systems of third parties on whom we rely, may fail to operate properly or become disabled as a result of tampering or a breach of our network security systems or otherwise, including for reasons beyond our control. In addition, our systems and those of third parties on which we rely have been, and we expect they will continue to be, subject to cyberattacks. Breaches of our network security systems could involve attacks that are intended to obtain unauthorized access to our proprietary information, destroy data or disable, degrade or sabotage our systems, often through the introduction of computer viruses, cyberattacks and other means and could originate from a wide variety of sources, including state actors or other unknown third parties outside the firm. The increased use of mobile technologies can heighten these and other operational risks. Although we take various measures to ensure the integrity of our systems, there can be no assurance that these measures will provide adequate protection, and we expect to incur significant costs in maintaining and enhancing appropriate protections to keep pace with developing methods of attack. Although cyber attacks have not, to date, had a material impact on our operations, if our systems are compromised, do not operate properly or are disabled, we could suffer a disruption of our business, financial losses, liability to clients, regulatory sanctions and damage to our reputation.
We operate in businesses that are highly dependent on information systems and technology. In Evercore ISI, and our Institutional Asset Management and Wealth Management businesses in particular, we must consistently and reliably obtain securities pricing information, properly execute and process client transactions and provide reports and other customer service to our clients. The expansion of our equities business has increased the size and scope of our trading activities and, accordingly, increased the opportunities for trade errors and other operational errors in connection with the processing of transactions. The occurrence of trade or other operational errors or the failure to keep accurate books and records can render us liable to disciplinary action by governmental and self-regulatory authorities, as well as to claims by our clients. We also rely on third-party service providers for certain aspects of our business. Any interruption or deterioration in the performance of these third parties or failures of their information systems and technology could impair our operations, affect our reputation and adversely affect our businesses.
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In providing services to clients, we may manage, utilize and store sensitive or confidential client or employee data, including personal data. As a result, we may be subject to numerous laws and regulations designed to protect this information, such as the U.S. federal and state laws governing the protection of health or other personally identifiable information and international laws. These laws and regulations are increasing in complexity and number. If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to client or employee data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution. In addition, unauthorized disclosure of sensitive or confidential client or employee data, whether through systems failure, employee negligence, fraud or misappropriation, could damage our reputation and cause us to lose clients and their related revenue in the future. Potential liability in the event of a security breach of client data could be significant and depending on the circumstances giving rise to the breach, this liability may not be subject to a contractual limit of liability or an exclusion of consequential or indirect damages.
In addition, if we were to experience a disaster or other business continuity problem, such as a pandemic, other man-made or natural disaster or disruption involving electronic communications or other services used by us or third parties with whom we conduct business, our continued success will depend, in part, on the availability of our personnel and office facilities and the proper functioning of our computer, telecommunications, transaction processing and other related systems and operations, as well as those of third parties on whom we rely. In particular, we depend on our headquarters in New York City, where a large number of our personnel are located, for the continued operation of our business. A disaster or a disruption in the infrastructure that supports our businesses, a disruption involving electronic communications or other services used by us or third parties with whom we conduct business, or directly affecting our headquarters, could have a material adverse impact on our ability to continue to operate our business without interruption. Any such event could lead us to experience operational challenges, and our inability to timely and successfully recover could materially disrupt our businesses and cause material financial loss, regulatory actions, reputational harm or legal liability.
We may not be able to generate sufficient cash to service all of our indebtedness.
Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance. We cannot provide assurance that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal of, and interest on, our indebtedness, including the $120.0 million principal amount of the senior credit facility issued to Mizuho Corporate Bank, Ltd. ("Mizuho") subject to annual amortization of principal beginning in the second year, with the final payment of all amounts outstanding, plus accrued interest, being due 2020 (the "New Loan") and $22.6 million principal amount of subordinated borrowings with an executive officer of the Company due 2019 with a 5.5% coupon. If our cash flows and capital resources are insufficient to fund our debt service obligations, including the principal noted above and quarterly and semi-annual interest payments of $0.8 million and $0.6 million, respectively, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness, including the New Loan, subordinated borrowings and other contractual commitments.
Goodwill and other intangible assets represent a significant portion of our assets, and an impairment of these assets could have a material adverse effect on our financial condition and results of operation.
Goodwill and other intangible assets represent a significant portion of our assets. We may need to perform impairment tests more frequently if events occur or circumstances indicate that the carrying amount of these assets may not be recoverable. These events or circumstances could include a significant change in the business climate, attrition of key personnel, a prolonged decline in our stock price and market capitalization, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of one of our businesses and other factors. During the third quarter of 2015, the Institutional Asset Management reporting unit was impacted by adverse market and operating conditions, including a decline in AUM that was greater than anticipated at the time of the Company’s previous impairment assessment, investment performance below benchmarks and lower market multiples for asset managers in response to market volatility. As a result, the Company determined that these events indicated that the carrying amount of these assets may not be recoverable. The Company performed Step 1 and Step 2 impairment assessments, as contemplated by Accounting Standards Codification ("ASC") 350, "Intangibles - Goodwill and Other" ("ASC 350") and recorded a goodwill impairment charge of $28.5 million in 2015 in its Institutional Asset Management reporting unit as a result of this assessment. The valuation of the reporting units requires judgment in estimating future cash flows, discount rates and other factors. In making these judgments, we evaluate the financial health of our reporting units, including such factors as market performance, changes in our client base and projected growth rates. Because these factors are ever changing, due to market and general business conditions, we cannot predict whether, and to what extent, our goodwill and long-lived intangible assets may be impaired in future periods.
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A change in relevant income tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities could result in an audit adjustment or revaluation of our net deferred tax assets that may cause our effective tax rate and tax liability to be higher than what is currently presented in the consolidated financial statements.
As part of the process of preparing our consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. This process requires us to estimate our actual current tax liability and to assess temporary differences resulting from differing book versus tax treatment of items, such as deferred revenue, compensation and benefits expense, unrealized gains and losses on long-term investments and depreciation. Our effective tax rate and tax liability is based on the application of current income tax laws, regulations and treaties. These laws, regulations and treaties are complex, and the manner which they apply to our facts and circumstances is sometimes open to interpretation. Management believes its application of current laws, regulations and treaties to be correct and sustainable upon examination by the tax authorities. However, the tax authorities could challenge our interpretation resulting in additional tax liability or adjustment to our income tax provision that could increase our effective tax rate. In addition, tax laws, regulations or treaties enacted in the future may cause us to revalue our net deferred tax assets and have a material change to our effective tax rate.
Risks Related to Our Investment Banking Business
A majority of our revenue is derived from advisory assignments for Investment Banking clients, which are not long-term contracted sources of revenue and are subject to intense competition, and declines in these engagements could have a material adverse effect on our financial condition and operating results.
We historically have earned a substantial portion of our revenue from fees paid to us by our Investment Banking clients for advisory services. These fees are typically payable upon the successful completion of a particular transaction or restructuring. Investment Banking services accounted for 93%, 90% and 87% of Net Revenues in 2015, 2014 and 2013, respectively, a substantial portion of which represents fees generated by our advisory services. We expect that we will continue to rely on Investment Banking fees from advisory services for a substantial portion of our revenue for the foreseeable future. Accordingly, a decline in our Investment Banking advisory engagements or the market for advisory services would adversely affect our business.
In addition, our Advisory professionals operate in a highly-competitive environment where typically there are no long-term contracted sources of revenue. Each revenue-generating engagement typically is separately solicited, awarded and negotiated. In addition, many businesses do not routinely engage in transactions requiring our services. As a consequence, our fee-paying engagements with many clients are not likely to be predictable and high levels of revenue in one quarter are not necessarily predictive of continued high levels of revenue in future periods. We also lose clients each year as a result of the sale or merger of a client, a change in a client’s senior management, competition from other financial advisors and financial institutions and other causes. As a result, our advisory fees could decline materially due to such changes in the volume, nature and scope of our engagements.
A high percentage of our net revenue is derived from a small number of Investment Banking clients, and the termination of any one advisory engagement could reduce our revenue and harm our operating results.
Our top five Investment Banking clients accounted for 9%, 14% and 14% of Net Revenues in 2015, 2014 and 2013, respectively. The composition of the group comprising our largest Investment Banking clients varies significantly from year to year, and a relatively small number of clients may account for a significant portion of our Investment Banking Revenues. As a result, our operating results, financial condition and liquidity may be significantly affected by even one lost mandate or the failure of one advisory assignment to be completed, however, no clients accounted for more than 10% of our Net Revenues for the years ended December 31, 2015, 2014 and 2013.
We face strong competition from other financial advisory firms, many of which have the ability to offer clients a wider range of products and services than we can offer, which could cause us to fail to win advisory mandates and subject us to pricing pressures that could materially adversely affect our revenue and profitability.
The financial advisory industry is intensely competitive, and we expect it to remain so. We compete on the basis of a number of factors, including the quality of our employees, transaction execution, our products and services, innovation, reputation and price. We have experienced intense competition over obtaining advisory mandates in recent years, and we may
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experience pricing pressures in our Investment Banking business in the future as some of our competitors seek to obtain increased market share by reducing fees.
Several of our competitors include large financial institutions, many of which have far greater financial and other resources than us and, unlike us, have the ability to offer a wider range of products, which may enhance their competitive position. They also regularly support services we do not provide, such as commercial lending and other financial services and products, which puts us at a competitive disadvantage and could result in pricing pressures or lost opportunities, which could materially adversely affect our revenue and profitability. In addition, we may be at a competitive disadvantage with regard to certain of our competitors who are able to provide financing or market making services that are often a crucial component of the Investment Banking transactions on which we advise. In addition to our larger competitors, over the last few years a number of independent investment banks that offer only independent advisory services have emerged, with several showing rapid growth, stressing their lack of other businesses as a competitive advantage. As these independent firms or new entrants into the market seek to gain market share, there could be pricing and competitive pressures, which could adversely affect our revenues and earnings.
Evercore ISI's business relies on non-affiliated third-party service providers.
Evercore ISI has entered into service agreements with third-party service providers for client order management and the execution and settlement of client securities transactions. This business faces the risk of operational failure of any of our clearing agents, the exchanges, clearing houses or other intermediaries we use to facilitate our securities transactions. Our senior management and officers oversee and manage these relationships. Poor oversight and control or inferior performance or service on the part of the service provider could result in loss of customers and violations of applicable rules and regulations. Any such failure could adversely affect our ability to effect transactions and to manage our exposure to risk.
Underwriting and trading activities expose us to risks.
We may incur losses and be subject to reputational harm to the extent that, for any reason, we are unable to sell securities we purchased as an underwriter at the anticipated price levels. As an underwriter, we also are subject to liability for material misstatements or omissions in prospectuses and other offering documents relating to offerings we underwrite. In such cases, any indemnification provisions in the applicable underwriting agreement may not be available to us or may not be sufficient to protect us against losses arising from such liability. In addition, through indemnification provisions in our agreement with our clearing organization, customer activities may expose us to off-balance sheet credit risk. Securities may have to be purchased or sold at prevailing market prices in the event a customer fails to settle a trade on its original terms. We seek to manage the risks associated with customer trading activities through customer screening and trading procedures, but such procedures and processes may not be effective.
If the number of debt defaults or bankruptcies declines or other factors affect demand for our restructuring services, our restructuring revenue could be adversely affected.
We provide financial advice and investment banking services to companies in financial transition, as well as to creditors, shareholders and potential acquirers. Our services may include reviewing and analyzing the business, financial condition and prospects of the company or providing advice on strategic transactions, capital raising or restructurings. We also may provide advisory services to companies that have sought or are planning to seek protection under Chapter 11 of the U.S. Bankruptcy Code or other similar processes in non-U.S. jurisdictions. A number of factors affect demand for these advisory services, including general economic conditions, the availability and cost of debt and equity financing, governmental policy and changes to laws, rules and regulations, including those that protect creditors. In addition, providing restructuring advisory services entails the risk that the transaction will be unsuccessful or take considerable time and be subject to a bankruptcy court’s authority to disallow or discount our fees. If the number of debt defaults or bankruptcies declines or other factors affect the demand for our restructuring advisory services, our restructuring business would be adversely affected.
Risks Relating to Our Investment Management Business
The amount and mix of our AUM are subject to significant fluctuations.
The revenues and profitability of our Institutional Asset Management and Wealth Management businesses are derived from providing investment management and related services. The level of our revenues depends largely on the level and mix of AUM. Fluctuations in the amount and mix of our AUM may be attributable in part to market conditions outside of our control that have had, and in the future could have, a negative impact on our revenues and income. Any decrease in the value or amount
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of our AUM because of market volatility or other factors negatively impacts our revenues and income. We are subject to an increased risk of asset volatility from changes in the global financial and equity markets. Individual financial and equity markets may be adversely affected by economic, political, financial, or other instabilities that are particular to the country or regions in which a market is located, including without limitation local acts of terrorism, health emergencies, economic crises or other business, social or political crises. Declines in these markets have caused in the past, and may cause in the future, a decline in our revenues and income. Global economic conditions, exacerbated by war or terrorism, health emergencies or financial crises, changes in the equity market place, currency exchange rates, commodity prices, interest rates, inflation rates, the yield curve, and other factors that are difficult to predict affect the mix, market values and levels of our AUM. A decline in the price of stocks or bonds, or in particular market segments, or in the securities market generally, could cause the value and returns on our AUM to decline, resulting in a decline in our revenues and income. Moreover, changing market conditions may cause a shift in our asset mix between international and U.S. assets, potentially resulting in a decline in our revenue and income depending upon the nature of our AUM and the level of management fees we earn based on them. Additionally, changing market conditions may cause a shift in our asset mix towards fixed-income products and a related decline in our revenue and income, as in the U.S. we generally derive higher fee revenues and income from equity assets than from fixed-income products we manage.
If the investments we make on behalf of our funds and clients perform poorly, we will suffer a decline in our investment management revenue and earnings, and our Investment Management business may be adversely affected.
Revenue from our Institutional Asset Management and Wealth Management businesses is derived from fees earned for the management of client assets, generally based on the market value of AUM. Poor investment performance by these businesses, on an absolute basis or as compared to third-party benchmarks or competitors, could stimulate higher redemptions, thereby lowering AUM and reducing the fees we earn, even in periods when securities prices are generally rising. In addition, if the investments we make on behalf of our funds and clients perform poorly, it may be more difficult for us to attract new investors, launch new products or offer new services in our Institutional Asset Management or Wealth Management businesses. Furthermore, if the volatility in the U.S. and global markets cause a decline in the price of securities that constitutes a significant portion of our AUM, our clients could withdraw funds from, or be hesitant to invest in, our Investment Management business due to the uncertainty or volatility in the market or in favor of investments they perceive as offering greater opportunity or lower risk, which would also result in lower investment management revenue. In our Private Equity business, our revenues include management fees based on committed or invested capital and performance fees. If our private equity investments perform poorly, whether on a realized or unrealized basis, our revenues and earnings will suffer. Poor performance by our private equity investments may also make it more difficult for us to raise any new funds in the future, may result in such fundraising taking longer to complete than anticipated or may prevent us from raising such funds. In addition, to the extent that, over the life of the funds, we have received an amount of carried interest that exceeds a specified percentage of distributions made to the third-party investors in our funds, we may be obligated to repay the amount of this excess to the third-party investors.
Our Investment Management business’ reliance on non-affiliated third-party service providers subjects the Company to operational risks.
We have entered into services agreements with third-party service providers for custodial services and trust and investment administration processing and reporting services. Our officers oversee and manage these relationships; however, poor oversight and control on our part or inferior performance or service on the part of the service providers could result in loss of customers, violation of applicable rules and regulations, including, but not limited to, privacy and anti-money laundering laws and otherwise adversely affect our business and operations.
Our agreements with the OCC require us to maintain and segregate certain assets, and our failure to comply with these agreements (including if we are required to access these assets for other purposes) could adversely affect us.
In connection with the organization of ETC, the OCC required the Company and Evercore LP to enter into a Capital and Liquidity Support Agreement, a Capital and Liquidity Maintenance Agreement and other related agreements (collectively, the "OCC Agreements"). The OCC Agreements require the Company’s and Evercore LP’s continuing obligation to provide ETC necessary capital and liquidity support in order to ensure that ETC continues to operate safely and soundly and in accordance with applicable laws and regulations. In particular, the OCC Agreements require that the Company and Evercore LP (1) maintain at least $5 million in Tier 1 capital in ETC or such other amount as the OCC may require, (2) maintain liquid assets in ETC in an amount at least equal to the greater of $3.5 million or 90 days coverage of ETC’s operating expenses and (3) provide at least $10 million of certain collateral held in a segregated account at a third-party depository institution.
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If we fail to comply with any of the OCC Agreements, we could become subject to civil money penalties, regulatory enforcement actions, payment of damages and, if the OCC deems it likely that we are unable to fulfill our obligations or breach the OCC Agreements, a forced disposition of ETC. The occurrence of any of these events or the disclosure that these events are probable or under consideration may cause reputational harm and erosion of client trust, due to a perception that we are unable to comply with applicable regulatory requirements, unable to successfully launch new initiatives and businesses, or that our reputation for integrity and high-caliber professional services is no longer valid, any of which could adversely affect our business and operations.
Valuation methodologies for certain assets in our private equity funds can be subject to significant subjectivity, and the values of assets established pursuant to such methodologies may never be realized, which could result in significant losses for our funds.
We have made principal investments in Evercore Mexico Capital Partners II, L.P. ("EMCP II"), Evercore Mexico Capital Partners III, L.P. ("EMCP III"), the Discovery Fund, CITIC Securities International Partners, LTD, Trilantic IV and Trilantic V. These funds generally invest in relatively high-risk, illiquid assets. In addition, some of these investments are, or may in the future be, in industries or sectors which are unstable, in distress or undergoing some uncertainty. Such investments may be subject to rapid changes in value caused by sudden company-specific or industry-wide developments. Contributing capital to these funds is risky, and we may lose some or all of the principal amount of our investments. There are no regularly quoted market prices for a number of investments in our funds. The value of the investments of our funds is determined using fair value methodologies described in the funds’ valuation policies, which may consider, among other things, the nature of the investment, the expected cash flows from the investment, bid or ask prices provided by third parties for the investment and the trading price of recent sales of securities (in the case of publicly-traded securities), restrictions on transfer and other recognized valuation methodologies. The methodologies we use in valuing individual investments are based on estimates and assumptions specific to the particular investments. Therefore, the value of our investments does not necessarily reflect the prices that would actually be obtained by us on behalf of the fund when such investments are sold. Realizations at values significantly lower than the values at which investments have been reflected in fund values would result in losses for the applicable fund and the loss of potential incentive income and principal investments.
The limited partners of the private equity funds we manage may terminate their relationship with us at any time.
The limited partnership agreements of the funds we manage provide that the limited partners of each fund may terminate their relationship with us without cause with a simple majority vote of each fund’s limited partners. If the limited partners of the funds we manage terminate their relationship with us, we would lose fees earned for our management of the funds and carried interest from those funds.
Risks Related to Our International Operations
A portion of our revenues are derived from our international operations, which are subject to certain risks.
In 2015, we earned 27% of our Total Revenues, excluding Other Revenue, and 27% of our Investment Banking Revenues from clients and private equity funds located outside of the United States. We intend to grow our non-U.S. business, and this growth is critical to our overall success. In addition, many of our larger clients for our Investment Banking business are non-U.S. entities seeking to enter into transactions involving U.S. businesses. Our international operations carry special financial and business risks, which could include the following:

• | greater difficulties managing and staffing foreign operations;

• | language and cultural differences;

• | fluctuations in foreign currency exchange rates that could adversely affect our results;

• | unexpected and costly changes in trading policies, regulatory requirements, tariffs and other barriers;

• | greater difficulties in collecting accounts receivable;

• | longer transaction cycles;

• | higher operating costs;

• | adverse consequences or restrictions on the repatriation of earnings;

• | potentially adverse tax consequences, such as trapped foreign losses;

• | less stable political and economic environments, including the sovereign debt crisis in Europe; and

• | civil disturbances or other catastrophic events that reduce business activity.

If our international business increases relative to our total business, these factors could have a more pronounced effect on our operating results. See also "—Difficult market conditions may adversely affect our business in many ways, including
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reducing the volume of the transactions involving our Investment Banking business and reducing the value of the assets we manage in our Investment Management businesses, which, in each case, may materially reduce our revenue or income."
Fluctuations in foreign currency exchange rates could adversely affect our results.
Because our financial statements are denominated in U.S. dollars and we receive a portion of our net revenue from continuing operations in other currencies, predominantly in Mexican pesos, Euros, British pounds, Brazilian real, Canadian dollars, Singapore dollars and Hong Kong dollars, we are exposed to fluctuations in foreign currencies. In addition, we pay certain of our expenses in such currencies. We have not entered into any transactions to hedge our exposure to these foreign exchange fluctuations through the use of derivative instruments or otherwise. An appreciation or depreciation of any of these currencies relative to the U.S. dollar would result in an adverse or beneficial impact, respectively, to our financial results. Fluctuations in foreign currency exchange rates may also affect the levels of our AUM and, as a result, our investment advisory fees.
Adverse economic conditions and political events in Mexico may result in disruptions to our business operations and adversely affect our revenue.
Our Mexican company has all of its assets located in Mexico and most of its revenue derived from operations in Mexico. As a financial services firm, our businesses in Mexico are materially affected by Mexico’s financial markets and economic conditions. For example, for our ECB business, a lack of liquidity in Mexican government bonds could have a material adverse effect on ECB’s business. Historically, interest rates in Mexico have been volatile, particularly in times of economic unrest and uncertainty. Mexico has had, and may continue to have, high real and nominal interest rates. In addition, because the Mexican government exercises significant influence over many aspects of the Mexican economy, political events in Mexico, including a change in state and municipal political leadership, may result in disruptions to our business operations and adversely affect its revenue. Any action by the government, including changes in the regulation of Mexico’s financial sector, could have an adverse effect on the operations of our Mexican business, especially on its asset management business.
Our Mexican business derives a significant portion of its revenue from advisory contracts with state and local governments in Mexico. The term limit system in Mexico may prevent us from maintaining relationships with the same clients in the same political positions beyond these periods. After an election takes place, there is no guarantee that we will be able to remain as advisors of the new government, even if the new administration is of the same political party as the previous one.
The cost of compliance with international broker dealer, employment, labor, benefits and tax regulations may adversely affect our business and hamper our ability to expand internationally.
Since we operate our business both in the United States and internationally, we are subject to many distinct broker dealer, employment, labor, benefits and tax laws in each country in which we operate, including regulations affecting our employment practices and our relations with our employees and service providers. If we are required to comply with new regulations or new interpretations of existing regulations, or if we are unable to comply with these regulations or interpretations, our business could be adversely affected or the cost of compliance may make it difficult to expand into new international markets. Additionally, our competitiveness in international markets may be adversely affected by regulations requiring, among other things, the awarding of contracts to local contractors, the employment of local citizens and/or the purchase of services from local businesses or that favor or require local ownership.
Risks Related to Our Organizational Structure
We are required to pay some of our Senior Managing Directors for most of the benefits relating to any additional tax depreciation or amortization deductions we may claim as a result of the tax basis step-up we received in connection with exchanges of Evercore LP partnership units ("LP Units") for shares and related transactions.
As of December 31, 2015, there were 4,189,348 vested Class A partnership units in Evercore LP ("Class A LP Units") held by some of our Senior Managing Directors that may in the future be exchanged for shares of our Class A common stock. The exchanges may result in increases in the tax basis of the assets of Evercore LP that otherwise would not have been available. These increases in tax basis may reduce the amount of tax that we would otherwise be required to pay in the future, although the IRS may challenge all or part of that tax basis increase, and a court could sustain such a challenge.
We have entered into a tax receivable agreement with some of our Senior Managing Directors that provides for the payment by us to these Senior Managing Directors of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of these increases in tax basis. While the actual increase in tax
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basis, as well as the amount and timing of any payments under this agreement, will vary depending upon a number of factors, including the timing of exchanges, the price of shares of our Class A common stock at the time of the exchange, the extent to which such exchanges are taxable, and the amount and timing of our income, we expect that, as a result of the size of the increases in the tax basis of the tangible and intangible assets of Evercore LP attributable to our interest in Evercore LP, during the expected term of the tax receivable agreement, the payments that we may make to our Senior Managing Directors could be substantial.
Although we are not aware of any issue that would cause the IRS to challenge a tax basis increase, Senior Managing Directors who receive payments will not reimburse us for any payments that may previously have been made under the tax receivable agreement. As a result, in certain circumstances we could make payments to some of the Senior Managing Directors under the tax receivable agreement in excess of our cash tax savings. Our ability to achieve benefits from any tax basis increase, and the payments to be made under this agreement, will depend upon a number of factors, as discussed above, including the timing and amount of our future income.
Our only material asset is our interest in Evercore LP, and we are accordingly dependent upon distributions from Evercore LP to pay dividends and taxes and other expenses.
The Company is a holding company and has no material assets other than its ownership of partnership units in Evercore LP. The Company has no independent means of generating revenue. We intend to cause Evercore LP to make distributions to its partners in an amount sufficient to cover all applicable taxes payable, other expenses and dividends, if any, declared by us.
Payments of dividends, if any, will be at the sole discretion of the Company’s board of directors after taking into account various factors, including:

• | economic and business conditions;

• | our financial condition and operating results;

• | our available cash and current and anticipated cash needs;

• | our capital requirements;

• | applicable contractual, legal, tax and regulatory restrictions;

• | implications of the payment of dividends by us to our stockholders or by our subsidiaries (including Evercore LP) to us; and

• | such other factors as our board of directors may deem relevant.

In addition, Evercore LP is generally prohibited under Delaware law from making a distribution to a partner to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of Evercore LP (with certain exceptions) exceed the fair value of its assets. Furthermore, certain subsidiaries of Evercore LP may be subject to similar legal limitations on their ability to make distributions to Evercore LP. Moreover, our regulated subsidiaries may be subject to regulatory capital requirements that limit the distributions that may be made by those subsidiaries.
Deterioration in the financial condition, earnings or cash flow of Evercore LP and its subsidiaries for any reason could limit or impair their ability to pay such distributions. Additionally, to the extent that the Company requires funds and Evercore LP is restricted from making such distributions under applicable law or regulation or under the terms of financing arrangements, or is otherwise unable to provide such funds, our liquidity and financial condition could be materially adversely affected.
As of December 31, 2015, Evercore LP and its consolidated subsidiaries had approximately $388.8 million in cash and cash equivalents available for distribution without prior regulatory approval.
If Evercore Partners Inc. were deemed an "investment company" under the 1940 Act as a result of its ownership of Evercore LP, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.
If Evercore Partners Inc. were to cease participation in the management of Evercore LP, its interest in Evercore LP could be deemed an "investment security" for purposes of the 1940 Act. Generally, a person is deemed to be an "investment company" if it owns investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items), absent an applicable exemption. Evercore Partners Inc. will have no material assets other than its equity interest in Evercore LP. A determination that this interest was an investment security could result in Evercore Partners Inc. being an investment company under the 1940 Act and becoming subject to the registration and other requirements of the 1940 Act.
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The 1940 Act and the rules thereunder contain detailed parameters for the organization and operations of investment companies. Among other things, the 1940 Act and the rules thereunder limit or prohibit transactions with affiliates, impose limitations on the issuance of debt and equity securities, prohibit the issuance of stock options, and impose certain governance requirements. We intend to conduct our operations so that Evercore Partners Inc. will not be deemed to be an investment company under the 1940 Act. However, if anything were to happen which would cause Evercore Partners Inc. to be deemed to be an investment company under the 1940 Act, requirements imposed by the 1940 Act, including limitations on our capital structure, ability to transact business with affiliates and ability to compensate key employees, could make it impractical for us to continue our business as currently conducted, impair the agreements and arrangements between and among Evercore Partners Inc., Evercore LP or our Senior Managing Directors, or any combination thereof and materially adversely affect our business, financial condition and results of operations.
Certain of our affiliates and businesses operate with relative autonomy, which limits our ability to alter their management practices and policies.
Although we are represented on the management committees of Atalanta Sosnoff, G5 ǀ Evercore and ABS, we are not able to exercise significant operational control over these affiliates and are not directly involved in managing their day-to-day activities, including investment management policies and procedures, fee levels, marketing and product development and client relationships. Moreover, the founders of these affiliates have certain protective and participating rights, including the ability to block certain major corporate actions and approval of the annual budget and compensation arrangements. In addition, the executive committee of Evercore ISI is responsible for conducting the day-to-day business and guiding the strategic direction of Evercore ISI, and is controlled by senior management of that business, with representation on the committee by senior management of Evercore. As a consequence, our reputation, financial condition and results of operations may be adversely affected by problems arising from the day-to-day operations of one of these businesses, or from other matters regarding one of these businesses over which we cannot exercise full control. Future acquisitions of, and investments in, investment management or investment banking businesses may be structured in a similar manner.
Risks Related to Our Class A Common Stock
Our Senior Managing Directors control a significant portion of the voting power in Evercore Partners Inc., which may give rise to conflicts of interests.
Our Senior Managing Directors own shares of our Class A common stock and our Class B common stock. Our certificate of incorporation provides that the holders of the shares of our Class B common stock are entitled to a number of votes that is determined pursuant to a formula that relates to the number of LP Units held by such holders. Each holder of Class B common stock is entitled, without regard to the number of shares of Class B common stock held by such holder, to one vote for each partnership unit in Evercore LP held by such holder. Our Senior Managing Directors, and certain trusts benefiting their families, collectively have a significant portion of the voting power in Evercore Partners Inc. As a result, our Senior Managing Directors have the ability to exercise influence over the election of the members of our board of directors and, therefore, influence over our management and affairs, including determinations with respect to acquisitions, dispositions, borrowings, issuances of common stock or other securities, and the declaration and payment of dividends. In addition, they are able to exercise influence over the outcome of all matters requiring stockholder approval. This concentration of ownership could deprive our Class A stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our Class A common stock.
Our share price may decline or we may have a significant increase in the number of shares of common stock outstanding due to the large number of shares eligible for future sale and for exchange.
The market price of our Class A common stock could decline as a result of sales of a large number of shares of Class A common stock in the market or the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
Further, we have historically repurchased in the open market a significant number of shares of our Class A common stock. If we were to cease or were unable to repurchase shares of Class A common stock, or choose to allocate available capital to the repayment of borrowings, the number of shares outstanding would increase over time, diluting the ownership of existing stockholders.
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At December 31, 2015, we had a total of 39,623,271 shares of our Class A common stock outstanding. In addition, our current and former Senior Managing Directors own an aggregate of 4,189,348 Class A LP Units, which were all fully vested as of December 31, 2015. Further, in conjunction with our acquisition of the operating businesses of ISI and our acquisition of the noncontrolling interest in our Institutional Equities business that we did not already own, we issued consideration in the form of vested and unvested Class E limited partnership units of Evercore LP ("Class E LP Units") and vested and unvested Class G and H LP Interests (which convert into Class E LP Units based on the satisfaction of multi-year performance goals). At December 31, 2015, there were 2,114,545 vested and unvested Class E LP Units and 5,366,694 vested and unvested Class G and H LP Interests outstanding. Our amended and restated certificate of incorporation allows the exchange of Class A and Class E LP Units (other than those held by us) for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. The shares of Class A common stock issuable upon exchange of the partnership units that are held by our Senior Managing Directors and certain other employees of the Company are eligible for resale from time to time, subject to certain contractual and Securities Act restrictions.
As of February 17, 2016, we had a total of 51,512,371 shares of Class A common stock outstanding and units and interests which were convertible, or potentially convertible, into Class A common stock. This is comprised of 39,724,730 shares of our Class A common stock outstanding, 4,189,348 Class A LP Units, 2,325,885 Class E LP Units and 5,272,408 Class G and H LP Interests.
Further, as part of annual bonuses and incentive compensation, we award restricted stock units ("RSUs") to employees, as well as to new hires. As of December 31, 2015, 5,787,480 RSUs issued pursuant to the Evercore Partners Inc. 2006 Stock Incentive Plan were outstanding. Of these RSUs, 141,090 were fully vested and 5,646,390 were unvested. Each restricted stock unit represents the holder's right to receive one share of our Class A common stock following the applicable vesting date. Should we issue RSUs in excess of the amount remaining as authorized for issuance under the Evercore Partners Inc. 2006 Stock Incentive Plan, these awards would be accounted for as liability awards, with changes in the fair value of these awards reflected as compensation expense until authorization is obtained.
Some of our Senior Managing Directors are parties to registration rights agreements with us. Under these agreements, these persons have the ability to cause us to register the shares of our Class A common stock they could acquire.
The market price of our Class A common stock may be volatile, which could cause the value of our Class A common stock to decline.
Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could reduce the market price of our Class A common stock in spite of our operating performance. In addition, our operating results could be below the expectations of public market analysts and investors, and in response, the market price of our Class A common stock could decrease significantly.
Anti-takeover provisions in our charter documents and Delaware law could delay or prevent a change in control.
Our certificate of incorporation and by-laws may delay or prevent a merger or acquisition that a stockholder may consider favorable by permitting our board of directors to issue one or more series of preferred stock, requiring advance notice for stockholder proposals and nominations and placing limitations on convening stockholder meetings. In addition, we are subject to provisions of the Delaware General Corporation Law that restrict certain business combinations with interested stockholders. These provisions may also discourage acquisition proposals or delay or prevent a change in control, which could harm our stock price.

Item 1B. | Unresolved Staff Comments

None.

Item 2. | Properties

Our principal offices are located in leased office space at 55 East 52nd Street, New York, New York, at 666 Fifth Avenue, New York, New York, at Pedregal 24, 15th Floor, Col. Molino del Rey, Del. Miguel Hidalgo in Mexico City, Mexico and at 15 Stanhope Gate in London, UK. We do not own any real property.

Item 3. | Legal Proceedings

In the normal course of business, from time to time the Company and its affiliates are involved in judicial or regulatory proceedings, arbitration or mediation concerning matters arising in connection with the conduct of its businesses, including
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contractual and employment matters. In addition, Mexican, United Kingdom, Hong Kong, Singapore, Canadian and United States government agencies and self-regulatory organizations, as well as state securities commissions in the United States, conduct periodic examinations and initiate administrative proceedings regarding the Company’s business, including, among other matters, accounting and operational matters, that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer, investment advisor, or its directors, officers or employees. In view of the inherent difficulty of determining whether any loss in connection with such matters is probable and whether the amount of such loss can be reasonably estimated, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, the Company cannot estimate the amount of such loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, fine, penalty or other relief, if any, might be. Subject to the foregoing, the Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company. Provisions for losses are established in accordance with ASC 450, "Contingencies" when warranted. Once established, such provisions are adjusted when there is more information available or when an event occurs requiring a change.
In January 2015, Donna Marie Coburn filed a proposed class action complaint against ETC in the U.S. District Court for the District of Columbia, in which she purports to represent a class of participants in the J.C. Penney Corporation Inc. Savings, Profit-Sharing and Stock Ownership Plan (the "Plan") whose participant accounts held J.C. Penney stock at any time between May 15, 2012 and the present. The complaint alleges that ETC breached its fiduciary duties under the Employee Retirement Income Security Act by causing the Plan to invest in J.C. Penney stock during that period and claims the Plan suffered losses of approximately $300 million due to declines in J.C. Penney stock. The plaintiff seeks the recovery of alleged Plan losses, attorneys’ fees, other costs, and other injunctive and equitable relief. The Company believes that it has meritorious defenses against these claims and intends to vigorously defend against them. ETC is indemnified by J.C. Penney, and ultimately the Plan, for reasonable attorneys’ fees and other legal expenses, which would be refunded should ETC not prevail. On April 13, 2015, ETC filed an answer along with a motion to dismiss. On June 13, 2015 Plaintiffs filed an opposition to ETC’s motion to dismiss and on July 13, 2015, ETC filed its reply to Plaintiffs’ opposition. On February 17, 2016, the U.S. District Court for the District of Columbia granted Evercore’s motion to dismiss without prejudice.

Item 4. | Mine Safety Disclosures

Not applicable.
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PART II

Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Price Range of Evercore Class A Common Stock
Our Class A common stock is listed on the NYSE and is traded under the symbol "EVR." At the close of business on February 17, 2016, there were five Class A common stockholders of record. This is not the actual number of beneficial owners of the Company's common stock, as shares are held in "street name" by brokers and others on behalf of individual owners.
The following table sets forth for the periods indicated the high and low reported intra-day sale prices per share for the Class A common stock, as reported on the NYSE:

| 2015 |  | 2014
| High |  | Low |  | High |  | Low
First Quarter | $ | 53.63 |  |  | $ | 46.67 |  |  | $ | 63.66 |  |  | $ | 51.71 |
Second Quarter | $ | 56.42 |  |  | $ | 46.75 |  |  | $ | 59.43 |  |  | $ | 48.61 |
Third Quarter | $ | 59.40 |  |  | $ | 46.08 |  |  | $ | 58.50 |  |  | $ | 45.43 |
Fourth Quarter | $ | 60.63 |  |  | $ | 47.91 |  |  | $ | 54.54 |  |  | $ | 44.67 |

There is no trading market for the Evercore Partners Inc. Class B common stock. As of February 17, 2016, there were 25 holders of record of the Class B common stock.
Dividend Policy
The Company paid quarterly cash dividends of $0.31 per share of Class A common stock for the quarter ended December 31, 2015, $0.28 per share for the quarters ended September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, and $0.25 per share of Class A common stock for the quarters ended September 30, 2014, June 30, 2014 and March 31, 2014.
We pay dividend equivalents, in the form of unvested RSU awards, concurrently with the payment of dividends to the holders of Class A common shares, on all unvested RSU grants awarded in conjunction with annual bonuses and new hire awards granted after April 2012, as well as awards issued in conjunction with the acquisition of Lexicon in 2011. The dividend equivalents have the same vesting and delivery terms as the underlying RSU award.
The declaration and payment of any future dividends will be at the sole discretion of our board of directors. Our board of directors will take into account: general economic and business conditions; our financial condition and operating results; our available cash and current and anticipated cash needs; capital requirements; contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries (including Evercore LP) to us; and such other factors as our board of directors may deem relevant.
We are a holding company and have no material assets other than our ownership of partnership units in Evercore LP. We intend to cause Evercore LP to make distributions to us in an amount sufficient to cover dividends, if any, declared by us and tax distributions. If Evercore LP makes such distributions, the limited partners of Evercore LP will be entitled to receive equivalent distributions from Evercore LP on their partnership units.
Recent Sales of Unregistered Securities
None
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Share Repurchases for the period January 1, 2015 through December 31, 2015

2015 |  | Total Number of Shares (or Units) Purchased(1) |  | Average Price Paid Per Share |  | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs(2) |  | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs(2)
January 1 to January 31 |  | 145,965 |  |  | $ | 50.37 |  |  | 134,045 |  |  | 6,758,425 |
February 1 to February 28 |  | 1,551,660 |  |  | 51.12 |  |  | 663,459 |  |  | 6,094,966 |
March 1 to March 31 |  | 49,193 |  |  | 50.82 |  |  | 41,614 |  |  | 6,053,352 |
Total |  | 1,746,818 |  |  | $ | 51.05 |  |  | 839,118 |  |  | 6,053,352 |
April 1 to April 30 |  | 385,705 |  |  | $ | 48.24 |  |  | 380,820 |  |  | 5,672,532 |
May 1 to May 31 |  | 314,630 |  |  | 49.17 |  |  | 307,000 |  |  | 5,365,532 |
June 1 to June 30 |  | 28,103 |  |  | 51.22 |  |  | 20,000 |  |  | 5,345,532 |
Total |  | 728,438 |  |  | $ | 48.76 |  |  | 707,820 |  |  | 5,345,532 |
July 1 to July 31 |  | 18,109 |  |  | $ | 54.47 |  |  | — |  |  | 5,345,532 |
August 1 to August 31 |  | 323,883 |  |  | 54.35 |  |  | 309,796 |  |  | 5,035,736 |
September 1 to September 30 |  | 184,742 |  |  | 51.08 |  |  | 176,134 |  |  | 4,859,602 |
Total |  | 526,734 |  |  | $ | 53.21 |  |  | 485,930 |  |  | 4,859,602 |
October 1 to October 31 |  | 21,534 |  |  | $ | 49.20 |  |  | — |  |  | 4,859,602 |
November 1 to November 30 (3) |  | 2,477,167 |  |  | 52.63 |  |  | 2,474,545 |  |  | 2,385,057 |
December 1 to December 31 |  | 2,839 |  |  | 52.05 |  |  | — |  |  | 2,385,057 |
Total |  | 2,501,540 |  |  | $ | 52.60 |  |  | 2,474,545 |  |  | 2,385,057 |

(1) | These include treasury transactions arising from net settlement of equity awards to satisfy minimum tax obligations.

(2) | In October 2014, our Board authorized the repurchase of shares of additional Class A common stock ("Class A Shares") and/or LP Units so that we will be able to repurchase an aggregate of seven million Class A Shares and/or LP Units for up to $350.0 million. 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 amount of shares repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. This program may be suspended or discontinued at any time and does not have a specified expiration date.

(3) | Includes the repurchase of 2.35 million shares of stock in conjunction with Mizuho's exercise of its warrants to acquire 5.45 million Class A Shares.

Information relating to compensation plans under which the Company's equity securities are authorized for issuance is set forth in Part III, Item 12 of this report.
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Item 6. | Selected Financial Data

The following table sets forth the historical selected financial data for the Company for all periods presented. For more information on our historical financial information, see Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and Item 8 "Financial Statements and Supplementary Data." On December 31, 2015, the Operating Agreement of Atalanta Sosnoff was amended such that, as a result of the amendments, the Company has deconsolidated assets and liabilities of Atalanta Sosnoff and will account for its interest in Atalanta Sosnoff as an equity method investment going forward. See Note 4 of the Company's consolidated financial statements for further information.

| 2015 |  | 2014 |  | 2013 |  | 2012 |  | 2011
| (dollars in thousands, except per share data)
STATEMENT OF OPERATIONS DATA |  |  |  |  |  |  |  |  |
Revenues |  |  |  |  |  |  |  |  |
Investment Banking Revenue | $ | 1,133,860 |  |  | $ | 821,359 |  |  | $ | 666,806 |  |  | $ | 568,238 |  |  | $ | 430,597 |
Investment Management Revenue | 95,129 |  |  | 98,751 |  |  | 95,759 |  |  | 79,790 |  |  | 99,161 |
Other Revenue | 11,259 |  |  | 11,292 |  |  | 16,868 |  |  | 9,646 |  |  | 13,897 |
Total Revenues | 1,240,248 |  |  | 931,402 |  |  | 779,433 |  |  | 657,674 |  |  | 543,655 |
Interest Expense | 16,975 |  |  | 15,544 |  |  | 14,005 |  |  | 15,301 |  |  | 19,391 |
Net Revenues | 1,223,273 |  |  | 915,858 |  |  | 765,428 |  |  | 642,373 |  |  | 524,264 |
Expenses |  |  |  |  |  |  |  |  |
Operating Expenses | 946,532 |  |  | 719,474 |  |  | 598,806 |  |  | 523,386 |  |  | 427,155 |
Other Expenses | 148,071 |  |  | 25,437 |  |  | 36,447 |  |  | 53,452 |  |  | 61,297 |
Total Expenses | 1,094,603 |  |  | 744,911 |  |  | 635,253 |  |  | 576,838 |  |  | 488,452 |
Income before Income from Equity Method Investments and Income Taxes | 128,670 |  |  | 170,947 |  |  | 130,175 |  |  | 65,535 |  |  | 35,812 |
Income from Equity Method Investments | 6,050 |  |  | 5,180 |  |  | 8,326 |  |  | 4,852 |  |  | 919 |
Income before Income Taxes | 134,720 |  |  | 176,127 |  |  | 138,501 |  |  | 70,387 |  |  | 36,731 |
Provision for Income Taxes | 77,030 |  |  | 68,756 |  |  | 63,689 |  |  | 30,908 |  |  | 22,724 |
Net Income from Continuing Operations | 57,690 |  |  | 107,371 |  |  | 74,812 |  |  | 39,479 |  |  | 14,007 |
Net Income (Loss) from Discontinued Operations | — |  |  | — |  |  | (2,790 | ) |  | — |  |  | (3,476 | )
Net Income | 57,690 |  |  | 107,371 |  |  | 72,022 |  |  | 39,479 |  |  | 10,531 |
Net Income Attributable to Noncontrolling Interest | 14,827 |  |  | 20,497 |  |  | 18,760 |  |  | 10,590 |  |  | 3,579 |
Net Income Attributable to Evercore Partners Inc. | $ | 42,863 |  |  | $ | 86,874 |  |  | $ | 53,262 |  |  | $ | 28,889 |  |  | $ | 6,952 |
Dividends Declared per Share | $ | 1.15 |  |  | $ | 1.03 |  |  | $ | 0.91 |  |  | $ | 0.82 |  |  | $ | 0.74 |
Diluted Net Income (Loss) Per Share Attributable to Evercore Partners Inc. Common Shareholders: |  |  |  |  |  |  |  |  |
From Continuing Operations | $ | 0.98 |  |  | $ | 2.08 |  |  | $ | 1.42 |  |  | $ | 0.89 |  |  | $ | 0.27 |
From Discontinued Operations | — |  |  | — |  |  | (0.04 | ) |  | — |  |  | (0.04 | )
Net Income Per Share Attributable to Evercore Partners Inc. Common Shareholders | $ | 0.98 |  |  | $ | 2.08 |  |  | $ | 1.38 |  |  | $ | 0.89 |  |  | $ | 0.23 |
STATEMENT OF FINANCIAL CONDITION DATA |  |  |  |  |  |  |  |  |
Total Assets | $ | 1,479,171 |  |  | $ | 1,446,556 |  |  | $ | 1,180,783 |  |  | $ | 1,145,218 |  |  | $ | 1,043,592 |
Long-term Liabilities | $ | 363,906 |  |  | $ | 345,229 |  |  | $ | 296,661 |  |  | $ | 283,836 |  |  | $ | 252,602 |
Total Long-term Debt | $ | 141,800 |  |  | $ | 127,776 |  |  | $ | 103,226 |  |  | $ | 101,375 |  |  | $ | 99,664 |
Total Liabilities | $ | 771,955 |  |  | $ | 730,309 |  |  | $ | 580,820 |  |  | $ | 604,742 |  |  | $ | 555,499 |
Noncontrolling Interest | $ | 202,664 |  |  | $ | 164,966 |  |  | $ | 97,382 |  |  | $ | 111,970 |  |  | $ | 80,429 |
Total Equity | $ | 707,216 |  |  | $ | 712,233 |  |  | $ | 563,158 |  |  | $ | 490,749 |  |  | $ | 465,826 |

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Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Evercore Partners Inc.’s consolidated financial statements and the related notes included elsewhere in this Form 10-K.
Key Financial Measures
Revenue
Total revenues reflect revenues from our Investment Banking and Investment Management business segments that include fees for services, transaction-related client reimbursements plus other revenue. Net revenues reflect total revenues less interest expense related to repurchase agreements, the $120.0 million principal amount of 5.20% Senior Notes, due 2020 ("Senior Notes"), the New Loan and other financing arrangements.
Investment Banking. Our Investment Banking business earns fees from our clients for providing advice on mergers, acquisitions, divestitures, leveraged buyouts, restructurings and similar corporate finance matters, and from underwriting and private placement activities, as well as commissions from our sales and trading activities. The amount and timing of the fees paid vary by the type of engagement or services provided. In general, advisory fees are paid at the time we sign an engagement letter, during the course of the engagement or when an engagement is completed. The majority of our investment banking revenue consists of advisory fees that are dependent on the successful completion of a transaction. A transaction can fail to be completed for many reasons, including failure of parties to agree upon final terms with the counterparty, to secure necessary board or shareholder approvals, to secure necessary financing or to achieve necessary regulatory approvals. In the case of bankruptcy engagements, fees are subject to approval of the court. Underwriting fees are recognized when the offering has been deemed to be completed, placement fees are generally recognized at the time of the client’s acceptance of capital or capital commitments. Commissions and Related Fees includes commissions, which are recorded on a trade-date basis or, in the case of payments under commission sharing arrangements, on the date earned. Commissions and Related Fees also include subscription fees for the sales of research. Cash received before the subscription period ends is initially recorded as deferred revenue and recognized as revenue over the remaining subscription period.
Revenue trends in our advisory business generally are correlated to the volume of M&A activity and/or restructuring activity, which tends to be counter-cyclical to M&A. However, deviations from this trend can occur in any given year or quarter for a number of reasons. For example, changes in our market share or the ability of our clients to close certain large transactions can cause our revenue results to diverge from the level of overall M&A or restructuring activity. Revenue trends in our equities business are correlated to market volumes, which generally decrease in periods of unfavorable market or economic conditions.
Investment Management. Our Investment Management business includes operations related to the management of the Institutional Asset Management, Wealth Management and Private Equity businesses. Revenue sources primarily include management fees, which include fees earned from portfolio companies, fiduciary and consulting fees, performance fees (including carried interest) and gains (or losses) on our investments.
Management fees for third party clients generally represent a percentage of AUM. Fiduciary and consulting fees, which are generally a function of the size and complexity of each engagement, are individually negotiated. Management fees from private equity operations are generally a percentage of committed capital or invested capital at rates agreed with the investment funds we manage or with the individual client. Performance fees, or carried interest, from private equity funds are earned when specified benchmarks are exceeded. In certain circumstances, such fees are subject to "claw-back" provisions. During 2014, the Company changed its method of recording performance fees such that the Company records performance fees upon the earlier of the termination of the investment fund or when the likelihood of clawback is mathematically improbable. Portfolio company fees include monitoring, director and transaction fees associated with services provided to the portfolio companies of the private equity funds we manage. Gains and losses include both realized and unrealized gains and losses on principal investments, including those arising from our equity interest in investment partnerships.
Transaction-Related Client Reimbursements. In both our Investment Banking and Investment Management segments, we make various transaction-related expenditures, such as travel and professional fees, on behalf of our clients. Pursuant to the engagement letters with our advisory clients or the contracts with the limited partners in the private equity funds we manage, these expenditures may be reimbursable. We define these expenses as transaction-related expenses and record such expenditures as incurred and record revenue when it is determined that clients have an obligation to reimburse us for such transaction-related expenses. Client expense reimbursements are recorded as revenue on the Consolidated Statements of Operations on the later of the date an engagement letter is executed or the date we pay or accrue the expense.
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Other Revenue and Interest Expense. Other Revenue and Interest Expense is derived primarily from investing customer funds in financing transactions. These transactions are principally repurchases and resales of Mexican government and government agency securities. Revenue and expenses associated with these transactions are recognized over the term of the repurchase or resale transaction. Other Revenue includes income earned on marketable securities, cash and cash equivalents and assets segregated for regulatory purposes, as well as adjustments to amounts due pursuant to our tax receivable agreements, subsequent to its initial establishment, related to changes in state and local tax rates. Interest Expense includes interest expense associated with the Senior Notes, the New Loan and other financing arrangements.
Operating Expenses
Employee Compensation and Benefits Expense. We include all payments for services rendered by our employees, as well as profits interests in our businesses that have been accounted for as compensation, in employee compensation and benefits expense.
We maintain compensation programs, including base salary, cash, deferred cash and equity bonus awards and benefits programs and manage compensation to estimates of competitive levels based on market conditions and performance. Our level of compensation reflects our plan to maintain competitive compensation levels to retain key personnel, and it reflects the impact of newly-hired senior professionals, including related grants of equity awards which are generally valued at their grant date.
Increasing the number of high-caliber, experienced senior level employees is critical to our growth efforts. In our advisory businesses, these hires generally do not begin to generate significant revenue in the year they are hired.
Our annual compensation program includes share-based compensation awards and deferred cash awards as a component of the annual bonus awards for certain employees. These awards are generally subject to annual vesting requirements over a four-year period beginning at the date of grant, which occurs in the first quarter of each year; accordingly, the expense is generally amortized over the stated vesting period. With respect to the annual awards granted in February 2012 and thereafter, the Company adopted new retirement eligibility criteria, which stipulates that if an employee has at least five years of continuous service, is at least 55 years of age and has a combined age and years of service of at least 65 years, the employee is eligible for retirement (prior year’s awards required combined years of service and age of at least 70 years). Retirement eligibility allows for continued vesting of awards after employees depart from the Company, provided they give the minimum advance notice, which is generally one year. As a consequence of these changes, a greater number of employees will become retirement eligible and the related requisite service period over which we will expense these awards will be shorter than the stated vesting period.
Non-Compensation Expenses. The balance of our operating expenses includes costs for occupancy and equipment rental, professional fees, travel and related expenses, communications and information technology services, depreciation and amortization, acquisition and transition costs and other operating expenses. We refer to all of these expenses as non-compensation expenses.
Other Expenses
Other Expenses include the following:

• | Amortization of LP Units/Interests and Certain Other Awards - Includes amortization costs associated with the modification and vesting of Class A LP Units, the vesting of Class E LP Units and Class G and H LP Interests issued in conjunction with the acquisition of ISI and certain other related awards.

• | Other Acquisition Related Compensation Charges - Includes compensation charges associated with deferred consideration, retention awards and related compensation for Lexicon employees.

• | Special Charges - Includes expenses in 2015 primarily related to an impairment charge associated with the impairment of goodwill in the Company's Institutional Asset Management reporting unit and charges related to the restructuring of our investment in Atalanta Sosnoff, primarily related to the conversion of certain of Atalanta Sosnoff’s profits interests held by management to equity interests. Special Charges for 2015 also include separation benefits and costs associated with the termination of certain contracts within the Company’s Evercore ISI business, as well as the finalization of a matter associated with the wind-down of the Company’s U.S. Private Equity business. Special Charges in 2014 primarily related to separation benefits and certain exit costs related to combining the equities business upon the ISI acquisition during 2014 and a provision recorded in 2014 against contingent consideration due on the 2013 disposition of Evercore Pan-Asset Capital Management ("Pan"). Special Charges in 2013 includes expenses related to the write-off of intangible assets from the Company’s acquisition of Morse, Williams and Company, Inc.

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• | Professional Fees - Includes expense associated with share based awards resulting from increases in the share price, which is required upon change in employment status.

• | Acquisition and Transition Costs - Includes professional fees for legal and other services incurred related to the Company’s acquisitions, as well as costs related to certain regulatory settlements and transitioning ISI’s infrastructure.

• | Fair Value of Contingent Consideration - Includes expense associated with changes in the fair value of contingent consideration issued to the sellers of certain of the Company’s acquisitions.

• | Intangible Asset and Other Amortization - Includes amortization of intangible assets and other purchase accounting-related amortization associated with certain acquisitions.

Income from Equity Method Investments
Our share of the income (loss) from our equity interests in G5 ǀ Evercore, ABS and Pan (consolidated on March 15, 2013 and sold on December 3, 2013) are included within Income from Equity Method Investments, as a component of Income Before Income Taxes, on the Consolidated Statements of Operations. On December 31, 2015 the Company deconsolidated the assets and liabilities of Atalanta Sosnoff and will account for its interest as an equity method investment from that date forward.
Provision for Income Taxes
We account for income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax basis of our assets and liabilities.
Discontinued Operations
We completed the sale of Pan in December 2013. Accordingly, the historical results of Pan have been included within Discontinued Operations on the Consolidated Statements of Operations.
Noncontrolling Interest
We record noncontrolling interest relating to the ownership interests of our current and former Senior Managing Directors and other officers, their estate planning vehicles and Trilantic (through October 2013) in Evercore LP, as well as the portions of our operating subsidiaries not owned by Evercore. As described in Note 15 to our consolidated financial statements herein, Evercore Partners Inc. is the sole general partner of Evercore LP and has a majority economic interest in Evercore LP. As a result, Evercore Partners Inc. consolidates Evercore LP and records a noncontrolling interest for the economic interest in Evercore LP held by the limited partners.
We generally allocate net income or loss to noncontrolling interests held at Evercore LP and at the operating entity level, where required, by multiplying the relative ownership interest of the noncontrolling interest holders for the period by the net income or loss of the entity to which the noncontrolling interest relates. In circumstances where the governing documents of the entity to which the noncontrolling interest relates require special allocations of profits or losses to the controlling and noncontrolling interest holders, then the net income or loss of these entities will be allocated based on these special allocations.
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Results of Operations
The following is a discussion of our results from continuing operations for the years ended December 31, 2015, 2014 and 2013. For a more detailed discussion of the factors that affected the revenue and operating expenses of our Investment Banking and Investment Management business segments in these periods, see the discussion in "Business Segments" below.

| For the Years Ended December 31, |  | Change
| 2015 |  | 2014 |  | 2013 |  | 2015 v. 2014 |  | 2014 v. 2013
| (dollars in thousands, except per share data)
Revenues |  |  |  |  |  |  |  |  |
Investment Banking Revenue | $ | 1,133,860 |  |  | $ | 821,359 |  |  | $ | 666,806 |  |  | 38 | % |  | 23 | %
Investment Management Revenue | 95,129 |  |  | 98,751 |  |  | 95,759 |  |  | (4 | %) |  | 3 | %
Other Revenue | 11,259 |  |  | 11,292 |  |  | 16,868 |  |  | — | % |  | (33 | %)
Total Revenues | 1,240,248 |  |  | 931,402 |  |  | 779,433 |  |  | 33 | % |  | 19 | %
Interest Expense | 16,975 |  |  | 15,544 |  |  | 14,005 |  |  | 9 | % |  | 11 | %
Net Revenues | 1,223,273 |  |  | 915,858 |  |  | 765,428 |  |  | 34 | % |  | 20 | %
Expenses |  |  |  |  |  |  |  |  |
Operating Expenses | 946,532 |  |  | 719,474 |  |  | 598,806 |  |  | 32 | % |  | 20 | %
Other Expenses | 148,071 |  |  | 25,437 |  |  | 36,447 |  |  | 482 | % |  | (30 | %)
Total Expenses | 1,094,603 |  |  | 744,911 |  |  | 635,253 |  |  | 47 | % |  | 17 | %
Income Before Income from Equity Method Investments and Income Taxes | 128,670 |  |  | 170,947 |  |  | 130,175 |  |  | (25 | %) |  | 31 | %
Income from Equity Method Investments | 6,050 |  |  | 5,180 |  |  | 8,326 |  |  | 17 | % |  | (38 | %)
Income Before Income Taxes | 134,720 |  |  | 176,127 |  |  | 138,501 |  |  | (24 | %) |  | 27 | %
Provision for Income Taxes | 77,030 |  |  | 68,756 |  |  | 63,689 |  |  | 12 | % |  | 8 | %
Net Income from Continuing Operations | 57,690 |  |  | 107,371 |  |  | 74,812 |  |  | (46 | %) |  | 44 | %
Discontinued Operations |  |  |  |  |  |  |  |  |
Income (Loss) from Discontinued Operations | — |  |  | — |  |  | (4,260 | ) |  | NM |  |  | NM |
Provision (Benefit) for Income Taxes | — |  |  | — |  |  | (1,470 | ) |  | NM |  |  | NM |
Net Income (Loss) from Discontinued Operations | — |  |  | — |  |  | (2,790 | ) |  | NM |  |  | NM |
Net Income | 57,690 |  |  | 107,371 |  |  | 72,022 |  |  | (46 | %) |  | 49 | %
Net Income Attributable to Noncontrolling Interest | 14,827 |  |  | 20,497 |  |  | 18,760 |  |  | (28 | %) |  | 9 | %
Net Income Attributable to Evercore Partners Inc. | $ | 42,863 |  |  | $ | 86,874 |  |  | $ | 53,262 |  |  | (51 | %) |  | 63 | %
Diluted Net Income (Loss) Per Share Attributable to Evercore Partners Inc. Common Shareholders |  |  |  |  |  |  |  |  |  |  |  |
From Continuing Operations | $ | 0.98 |  |  | $ | 2.08 |  |  | $ | 1.42 |  |  | (53 | %) |  | 46 | %
From Discontinued Operations | — |  |  | — |  |  | (0.04 | ) |  | NM |  |  | NM |
Diluted Net Income Per Share Attributable to Evercore Partners Inc. Common Shareholders | $ | 0.98 |  |  | $ | 2.08 |  |  | $ | 1.38 |  |  | (53 | %) |  | 51 | %

2015 versus 2014
Net Revenues were $1.223 billion in 2015, an increase of $307.4 million, or 34%, versus Net Revenues of $915.9 million in 2014. Investment Banking Revenue increased 38% and Investment Management Revenue decreased 4% compared to 2014. Investment Banking Revenue includes the results of ISI following its acquisition on October 31, 2014. See the segment discussion below for further information. Other Revenue in 2015 was flat from 2014. Net Revenues include interest expense on our Senior Notes, New Loan, subordinated borrowings and line of credit.
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Total Operating Expenses were $946.5 million in 2015, as compared to $719.5 million in 2014, an increase of $227.0 million, or 32%. Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $703.0 million in 2015, an increase of $164.8 million, or 31%, versus expense of $538.2 million in 2014. The increase was primarily due to the acquisition of ISI and other increased compensation costs resulting from the expansion of our businesses, and higher costs from share-based and other deferred compensation arrangements. Non-compensation expenses as a component of Operating Expenses were $243.5 million in 2015, an increase of $62.2 million, or 34%, over non-compensation operating expenses of $181.3 million in 2014. Non-compensation operating expenses increased compared to 2014 primarily driven by the acquisition of ISI, as well as increased headcount, increased new business costs associated with higher levels of global transaction activity and higher professional fees.
Total Other Expenses of $148.1 million in 2015 included compensation costs associated with the vesting of LP Units and Interests and certain other awards of $83.7 million, primarily related to Evercore LP units and interests granted in conjunction with the acquisition of ISI, other acquisition related compensation costs of $1.5 million, special charges of $41.1 million, primarily related to an impairment charge associated with the impairment of goodwill in the Company's Institutional Asset Management reporting unit, acquisition and transition costs of $4.9 million, changes to the fair value of contingent consideration of $2.7 million and intangible asset and other amortization of $14.1 million. Total Other Expenses of $25.4 million in 2014 included compensation costs associated with the vesting of LP Units and certain other awards of $3.4 million, other acquisition related compensation costs of $7.9 million, special charges of $4.9 million, professional fees of $1.7 million, acquisition and transition costs of $4.7 million and intangible asset and other amortization of $2.8 million.
As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 64% for the year ended December 31, 2015, compared to 60% for the year ended December 31, 2014.
Income from Equity Method Investments was $6.1 million in 2015, an increase of 17% as compared to $5.2 million in 2014. The increase was a result of an increase in earnings from ABS and G5 ǀ Evercore.
The provision for income taxes in 2015 was $77.0 million, which reflected an effective tax rate of 57%. The provision for income taxes in 2014 was $68.8 million, which reflected an effective tax rate of 39%. The provision for income taxes for 2015 and 2014 reflects the effect of certain nondeductible expenses, including expenses related to Class E LP Units, Class G and H LP Interests and the equity interest issued by Atalanta Sosnoff in 2015, as well as the noncontrolling interest associated with LP Units and other adjustments.
Noncontrolling Interest was $14.8 million in 2015 compared to $20.5 million in 2014.
2014 versus 2013
Net Revenues were $915.9 million in 2014, an increase of $150.4 million, or 20%, versus Net Revenues of $765.4 million in 2013. Investment Banking Revenue increased 23% and Investment Management Revenue increased 3% compared to 2013. Investment Banking Revenue includes the results of ISI following its acquisition on October 31, 2014. See the segment discussion below for further information. Other Revenue in 2014 was 33% lower than in 2013 primarily as a result of changes in state and local tax rates in 2013, which resulted in a $6.9 million adjustment in amounts due pursuant to tax receivable agreements during 2013. Net Revenues include interest expense on our Senior Notes.
Total Operating Expenses were $719.5 million in 2014 as compared to $598.8 million in 2013, an increase of $120.7 million, or 20%. Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $538.2 million in 2014, an increase of $88.4 million, or 20%, versus expense of $449.8 million in 2013. The increase was primarily due to increased compensation costs resulting from the expansion of our businesses and higher costs from share-based and other deferred compensation arrangements. Non-compensation expenses as a component of Operating Expenses were $181.3 million in 2014, an increase of $32.3 million, or 22%, over non-compensation operating expenses of $149.0 million in 2013. Non-compensation operating expenses increased compared to 2013 primarily as a result of the addition of personnel, increased new business costs associated with higher levels of global transaction activity and higher professional fees associated with a limited number of investment bankers serving under consulting contracts.
Total Other Expenses of $25.4 million in 2014 included compensation costs associated with the vesting of LP Units and certain other awards of $3.4 million, other acquisition related compensation costs of $7.9 million, special charges of $4.9 million, professional fees of $1.7 million, acquisition and transition costs of $4.7 million and intangible asset and other amortization of $2.8 million. Total Other Expenses of $36.4 million in 2013 included compensation costs associated with the vesting of LP Units and certain other awards of $20.0 million, other acquisition related compensation costs of $15.9 million, special charges of $0.2 million and amortization of intangibles of $0.3 million.
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As a result of the factors noted above, Employee Compensation and Benefits Expense as a percentage of Net Revenues was 60% for the year ended December 31, 2014, compared to 63% for the year ended December 31, 2013.
Income from Equity Method Investments was $5.2 million in 2014, as compared to $8.3 million in 2013. The decrease was primarily a result of a decrease in earnings from G5 ǀ Evercore and ABS.
The provision for income taxes in 2014 was $68.8 million, which reflected an effective tax rate of 39%. The provision was impacted by the noncontrolling interest associated with LP Units, state, local, and foreign taxes and other adjustments. The provision for income taxes in 2013 was $63.7 million, which reflected an effective tax rate of 46%. The provision was impacted by the vesting of LP Units, which were fully vested as of December 31, 2013, as well as the noncontrolling interest associated with LP Units and the release of valuation allowances for certain deferred tax assets.
Noncontrolling Interest was $20.5 million in 2014 compared to $18.8 million in 2013 (which included noncontrolling interest related to discontinued operations of ($1.2) million).
Impairment of Assets
At November 30, 2015, in accordance with ASC 350, we performed our annual Goodwill impairment assessment. We concluded that the fair value of our reporting units substantially exceeded their carrying values as of November 30, 2015, with the exception of our Institutional Asset Management reporting unit, which exceeded its carrying value by greater than 15% as of November 30, 2015.
During the third quarter of 2015, the Institutional Asset Management reporting unit was impacted by adverse market and operating conditions, including a decline in AUM that was greater than anticipated at the time of the Company’s previous Step 1 impairment assessment, investment performance below benchmarks and lower market multiples for asset managers in response to market volatility during the third quarter. As a result, the Company determined that the Step 1 impairment assessment criteria were satisfied, as contemplated by ASC 350 for the goodwill in its Institutional Asset Management reporting unit as of August 31, 2015.
The amount of Goodwill allocated to the Institutional Asset Management reporting unit was $94.7 million as of August 31, 2015, of which $27.3 million was related to noncontrolling interest. In determining the fair value of this reporting unit, the Company utilized both a market multiple approach and a discounted cash flow methodology based on the adjusted cash flows from operations. The market multiple approach included applying the average earnings multiples of comparable public companies, multiplied by the forecasted earnings of the reporting unit, to yield an estimate of fair value. The discounted cash flow methodology began with the forecasted cash flows of the reporting unit and applied a discount rate of 15%, which reflected the weighted average cost of capital adjusted for the risks inherent in the future cash flows. The forecast inherent in the valuation assumes a stabilization of AUM flows by the end of 2015, with AUM from client flows beginning to increase in the first half of 2016 and, over the longer term, assumes a compound annual growth rate in revenues of 9% from the trailing twelve month period ended August 31, 2015.
As a result of the above analysis, the Company determined that the fair value of the Institutional Asset Management reporting unit was less than its carrying value as of August 31, 2015. As a result, during the third quarter of 2015, the Company began a Step 2 impairment assessment, which it completed during the fourth quarter of 2015. The Company recorded a goodwill impairment charge of $28.5 million in the Investment Management segment, which is included within Special Charges on the Consolidated Statement of Operations for the year ended December 31, 2015. This charge resulted in a decrease of $9.8 million to Net Income Attributable to Evercore Partners Inc. (after adjustments for noncontrolling interest and income taxes).
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Business Segments
The following data presents revenue, expenses and contributions from our equity method investments included within continuing operations by business segment.
Investment Banking
The following table summarizes the operating results of the Investment Banking segment.

| For the Years Ended December 31, |  | Change
| 2015 |  | 2014 |  | 2013 |  | 2015 v. 2014 |  | 2014 v. 2013
| (dollars in thousands)
Revenues |  |  |  |  |  |  |  |  |
Investment Banking Revenue: |  |  |  |  |  |  |  |  |
Advisory Fees | $ | 865,494 |  |  | $ | 727,678 |  |  | $ | 602,256 |  |  | 19 | % |  | 21 | %
Commissions and Related Fees | 228,229 |  |  | 65,580 |  |  | 30,741 |  |  | 248 | % |  | 113 | %
Underwriting Fees | 40,137 |  |  | 28,101 |  |  | 33,809 |  |  | 43 | % |  | (17 | %)
Total Investment Banking Revenue (1) | 1,133,860 |  |  | 821,359 |  |  | 666,806 |  |  | 38 | % |  | 23 | %
Other Revenue, net (2) | (2,945 | ) |  | (1,722 | ) |  | 3,979 |  |  | (71 | %) |  | NM |
Net Revenues | 1,130,915 |  |  | 819,637 |  |  | 670,785 |  |  | 38 | % |  | 22 | %
Expenses |  |  |  |  |  |  |  |  |
Operating Expenses | 869,301 |  |  | 632,927 |  |  | 516,921 |  |  | 37 | % |  | 22 | %
Other Expenses | 108,739 |  |  | 25,109 |  |  | 33,740 |  |  | 333 | % |  | (26 | %)
Total Expenses | 978,040 |  |  | 658,036 |  |  | 550,661 |  |  | 49 | % |  | 19 | %
Operating Income (3) | 152,875 |  |  | 161,601 |  |  | 120,124 |  |  | (5 | %) |  | 35 | %
Income from Equity Method Investments | 978 |  |  | 495 |  |  | 2,906 |  |  | 98 | % |  | (83 | %)
Pre-Tax Income from Continuing Operations | $ | 153,853 |  |  | $ | 162,096 |  |  | $ | 123,030 |  |  | (5 | %) |  | 32 | %

(1) | Includes client related expenses of $22.6 million, $17.7 million and $15.2 million for the years ended December 31, 2015, 2014 and 2013, respectively.

(2) | Includes interest expense on the Senior Notes, New Loan, subordinated borrowings and line of credit of $6.0 million, $4.5 million and $4.4 million for the years ended December 31, 2015, 2014 and 2013, respectively.

(3) | Includes Noncontrolling Interest of $2.0 million, ($2.9) million and $0.1 million for the years ended December 31, 2015, 2014 and 2013, respectively.

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For 2015, the dollar value of North American announced and completed M&A activity increased 58% and 26%, respectively, compared to 2014, while the dollar value of Global announced and completed M&A activity for 2015 increased 43% and 26%, respectively, compared to 2014:

| For the Years Ended December 31, |  | Change
| 2015 |  | 2014 |  | 2013 |  | 2015 v. 2014 |  | 2014 v. 2013
Industry Statistics ($ in billions) * |  |  |  |  |  |  |  |  |
Value of North American M&A Deals Announced | $ | 2,385 |  |  | $ | 1,508 |  |  | $ | 1,059 |  |  | 58 | % |  | 42 | %
Value of North American M&A Deals Completed | $ | 1,582 |  |  | $ | 1,251 |  |  | $ | 957 |  |  | 26 | % |  | 31 | %
Value of Global M&A Deals Announced | $ | 4,696 |  |  | $ | 3,278 |  |  | $ | 2,284 |  |  | 43 | % |  | 44 | %
Value of Global M&A Deals Completed | $ | 3,141 |  |  | $ | 2,495 |  |  | $ | 2,112 |  |  | 26 | % |  | 18 | %
Evercore Statistics ** |  |  |  |  |  |  |  |  |
Total Number of Advisory Client Transactions | 484 |  |  | 418 |  |  | 358 |  |  | 16 | % |  | 17 | %
Investment Banking Fees of at Least $1 million from Advisory Client Transactions | 180 |  |  | 173 |  |  | 132 |  |  | 4 | % |  | 31 | %

* | Source: Thomson Reuters January 4, 2016

** | Includes revenue generating clients only

Investment Banking Results of Operations
2015 versus 2014
Net Investment Banking Revenues were $1.131 billion in 2015 compared to $819.6 million in 2014, which represented an increase of 38%. We earned advisory fees from 484 client transactions in 2015 compared to 418 in 2014, representing a 16% increase. We had 180 fees in excess of $1.0 million in 2015, compared to 173 in 2014, representing a 4% increase. The increase in revenues from 2014 primarily reflects an increase in our Commissions and Related Fees following our acquisition of ISI on October 31, 2014 and an increase of 19% in Advisory Fees, principally driven by higher volume and value of deals in our U.S. and U.K. businesses. Underwriting fees increased 43% from 2014 primarily due to an increase in fees from our U.S. and Mexico businesses.
Operating Expenses were $869.3 million in 2015 compared to $632.9 million in 2014, an increase of $236.4 million, or 37%. Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $648.9 million in 2015, as compared to $481.3 million in 2014, an increase of $167.6 million, or 35%. The increase was primarily due to the acquisition of ISI and other increased compensation costs resulting from the expansion of our businesses, and higher costs from share-based and other deferred compensation arrangements. Non-compensation expenses, as a component of Operating Expenses, were $220.4 million in 2015, as compared to $151.6 million in 2014, an increase of $68.8 million, or 45%. Non-compensation operating expenses increased from the prior year primarily driven by the acquisition of ISI, as well as increased headcount within the business, increased new business costs associated with higher levels of global transaction activity and higher professional fees.
Other Expenses of $108.7 million in 2015 included compensation costs associated with the vesting of LP Units and Interests and certain other awards of $83.7 million, primarily related to Evercore LP units and interests granted in conjunction with the acquisition of ISI, other acquisition related compensation costs of $1.5 million, special charges of $2.2 million, acquisition and transition costs of $4.9 million, changes to the fair value of contingent consideration of $2.7 million and intangible asset and other amortization of $13.8 million. Other Expenses of $25.1 million in 2014 included compensation costs associated with the vesting of LP Units and certain other awards of $3.4 million, other acquisition related compensation costs of $7.9 million, special charges of $4.9 million, professional fees of $1.7 million, acquisition and transition costs of $4.7 million and intangible asset and other amortization of $2.5 million.
2014 versus 2013
Net Investment Banking Revenues were $819.6 million in 2014 compared to $670.8 million in 2013, which represented an increase of 22%. We earned advisory fees from 418 client transactions in 2014 compared to 358 in 2013, representing a 17% increase. We had 173 fees in excess of $1.0 million in 2014, compared to 132 in 2013, representing a 31% increase. The increase in revenues from 2013 primarily reflects an increase in Advisory Fees in 2014 in our U.S. and U.K. businesses.
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Commissions and Related Fees increased 113% from 2013 primarily from our acquisition of ISI, which closed on October 31, 2014. Underwriting Fees decreased 17% from 2013 primarily due to a decrease in underwriting deals in our Mexico business.
Operating Expenses were $632.9 million in 2014 compared to $516.9 million in 2013, an increase of $116.0 million, or 22%. Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $481.3 million in 2014, as compared to $396.8 million in 2013, an increase of $84.5 million, or 21%. The increase was primarily due to increased compensation costs resulting from the expansion of our businesses, including our acquisition of ISI, and higher costs from share-based and other deferred compensation arrangements. Non-compensation expenses, as a component of Operating Expenses, were $151.6 million in 2014, as compared to $120.1 million in 2013, an increase of $31.5 million, or 26%. Non-compensation operating expenses increased from the prior year primarily driven by the addition of personnel within the business, increased new business costs associated with high levels of global transaction activity and higher professional fees associated with a limited number of investment bankers serving under consulting contracts.
Other Expenses of $25.1 million in 2014 included compensation costs associated with the vesting of LP Units and certain other awards of $3.4 million, other acquisition related compensation costs of $7.9 million, special charges of $4.9 million, intangible asset and other amortization of $2.5 million, professional fees of $1.7 million and acquisition and transition costs of $4.7 million. Other Expenses of $33.7 million in 2013 included compensation costs associated with the vesting of LP Units and certain other awards of $17.8 million and other acquisition related compensation costs of $15.9 million.
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Investment Management
The following table summarizes the operating results of the Investment Management segment.

| For the Years Ended December 31, |  | Change
| 2015 |  | 2014 |  | 2013 |  | 2015 v. 2014 |  | 2014 v. 2013
| (dollars in thousands)
Revenues |  |  |  |  |  |  |  |  |
Investment Advisory and Management Fees: |  |  |  |  |  |  |  |  |
Wealth Management | $ | 34,659 |  |  | $ | 30,827 |  |  | $ | 27,179 |  |  | 12 | % |  | 13 | %
Institutional Asset Management | 46,100 |  |  | 45,872 |  |  | 43,971 |  |  | — | % |  | 4 | %
Private Equity | 5,603 |  |  | 8,127 |  |  | 10,622 |  |  | (31 | %) |  | (23 | %)
Total Investment Advisory and Management Fees | 86,362 |  |  | 84,826 |  |  | 81,772 |  |  | 2 | % |  | 4 | %
Realized and Unrealized Gains: |  |  |  |  |  |  |  |  |
Institutional Asset Management | 3,681 |  |  | 6,067 |  |  | 5,927 |  |  | (39 | %) |  | 2 | %
Private Equity | 5,086 |  |  | 7,858 |  |  | 8,060 |  |  | (35 | %) |  | (3 | %)
Total Realized and Unrealized Gains | 8,767 |  |  | 13,925 |  |  | 13,987 |  |  | (37 | %) |  | — | %
Investment Management Revenue (1) | 95,129 |  |  | 98,751 |  |  | 95,759 |  |  | (4 | %) |  | 3 | %
Other Revenue, net (2) | (2,771 | ) |  | (2,530 | ) |  | (1,116 | ) |  | (10 | %) |  | (127 | %)
Net Investment Management Revenues | 92,358 |  |  | 96,221 |  |  | 94,643 |  |  | (4 | %) |  | 2 | %
Expenses |  |  |  |  |  |  |  |  |
Operating Expenses | 77,231 |  |  | 86,547 |  |  | 81,885 |  |  | (11 | %) |  | 6 | %
Other Expenses (3) | 39,332 |  |  | 328 |  |  | 2,707 |  |  | NM |  |  | (88 | %)
Total Expenses | 116,563 |  |  | 86,875 |  |  | 84,592 |  |  | 34 | % |  | 3 | %
Operating Income (Loss) (4) | (24,205 | ) |  | 9,346 |  |  | 10,051 |  |  | NM |  |  | (7 | %)
Income from Equity Method Investments (5) | 5,072 |  |  | 4,685 |  |  | 5,420 |  |  | 8 | % |  | (14 | %)
Pre-Tax Income (Loss) from Continuing Operations | $ | (19,133 | ) |  | $ | 14,031 |  |  | $ | 15,471 |  |  | NM |  |  | (9 | %)

(1) | Includes client related expenses of $0.07 million, $0.05 million and $0.1 million for the years ended December 31, 2015, 2014 and 2013, respectively.

(2) | Includes interest expense on the Senior Notes, New Loan and line of credit of $3.6 million, $3.8 million and $3.7 million for the years ended December 31, 2015, 2014 and 2013, respectively.

(3) | Includes an impairment charge associated with the impairment of goodwill in the Company's Institutional Asset Management reporting unit of $28.5 million and charges of $7.1 million related to the restructuring of our investment in Atalanta Sosnoff for the year ended December 31, 2015, and an impairment charge associated with the impairment of intangible assets of $0.2 million for the year ended December 31, 2013.

(4) | Includes Noncontrolling Interest of $4.0 million, $4.0 million and $1.1 million for the years ended December 31, 2015, 2014 and 2013, respectively.

(5) | Equity in G5 ǀ Evercore and ABS is classified as Income from Equity Method Investments.

Investment Management Results of Operations
Our Wealth Management business includes the results of EWM. Our Institutional Asset Management business includes the results of ETC, ECB and Atalanta Sosnoff. Fee-based revenues from EWM, Atalanta Sosnoff and ECB are primarily earned on a percentage of AUM, while ETC primarily earns fees from negotiated trust services and fiduciary consulting arrangements. On December 31, 2015, we amended the Operating Agreement of Atalanta Sosnoff, resulting in the deconsolidation of its assets and liabilities, and we will account for its interest as an equity method investment from that date forward. See Note 4 of our consolidated financial statements for further information.
In 2013, the Company held a fourth and final closing on EMCP III, a private equity fund focused on middle market investments in Mexico. See Note 9 of our consolidated financial statements for further information.
Evercore Capital Partners II L.P. and its affiliated entities ("ECP II") earned management fees of 1% of invested capital through December 21, 2013, the technical termination of the fund. No management fees were earned by the Company in 2013,
38

2014 or 2015. We earn management fees on EMCP II and EMCP III of 2.25% and 2.0%, respectively, per annum of committed capital during its investment period, and 2.25% and 2.0%, respectively, per annum on net funded capital thereafter. In addition, the general partner of the private equity funds earns carried interest of 20% based on the fund’s performance, provided it exceeds preferred return hurdles to its limited partners. We owned 8%-9% of the carried interest earned by the general partner of ECP II up until the fund's termination on December 31, 2014. A significant portion of any gains recognized related to ECP II, EMCP II and EMCP III, and any carried interest recognized by them, are distributed to certain of our private equity professionals.
In the event the funds perform below certain thresholds we may be obligated to repay certain carried interest previously distributed. As of December 31, 2015, there was no previously distributed carried interest that was subject to repayment.
We made investments accounted for under the equity method of accounting in G5 ǀ Evercore and ABS during the fourth quarters of 2010 and 2011, respectively, the results of which are included within Income from Equity Method Investments.
Assets Under Management
AUM for our Investment Management business of $8.2 billion at December 31, 2015 decreased compared to $14.0 billion at December 31, 2014, primarily due to the deconsolidation of Atalanta Sosnoff on December 31, 2015. The amounts of AUM presented in the table below reflect the assets for which we charge a management fee. These assets reflect the fair value of assets managed on behalf of Institutional Asset Management and Wealth Management clients, and the amount of either the invested or committed capital of the Private Equity funds. As defined in ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820"), valuations performed for Level I investments are based on quoted prices obtained from active markets generated by third parties and Level II investments are valued through the use of models based on either direct or indirect observable inputs in the use of models or other valuation methodologies performed by third parties to determine fair value. For both the Level I and Level II investments, we obtain both active quotes from nationally recognized exchanges and third-party pricing services to determine market or fair value quotes, respectively. Wealth Management maintained 66% of Level I investments and 34% of Level II investments as of December 31, 2015 and 2014, and Institutional Asset Management maintained 87% of Level I investments and 13% of Level II investments as of December 31, 2015 and 2014. As noted above, Private Equity AUM is not presented at fair value, but reported at either invested or committed capital in line with fee arrangements.
The fees that we receive for providing investment advisory and management services are primarily driven by the level and composition of AUM. Accordingly, client flows, market movements, foreign currency fluctuations and changes in our product mix will impact the level of management fees we receive from our investment management businesses. Fees vary with the type of assets managed and the channel in which they are managed, with higher fees earned on equity assets, alternative investment funds, such as hedge funds and private equity funds, and lower fees earned on fixed income and cash management products. Clients will increase or reduce the aggregate amount of AUM that we manage for a number of reasons, including changes in the level of assets that they have available for investment purposes, their overall asset allocation strategy, our relative performance versus competitors offering similar investment products and the quality of our service. The fees we earn are also impacted by our investment performance, as the appreciation or depreciation in the value of the assets that we manage directly impacts our fees.
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| Wealth Management |  | Institutional Asset Management |  | Private Equity |  | Total
Balance at December 31, 2013 | $ | 4,874 |  |  | $ | 8,374 |  |  | $ | 385 |  |  | $ | 13,633 |
Inflows | 936 |  |  | 2,920 |  |  | — |  |  | 3,856 |
Outflows | (534 | ) |  | (3,525 | ) |  | (69 | ) |  | (4,128 | )
Market Appreciation | 389 |  |  | 298 |  |  | — |  |  | 687 |
Balance at December 31, 2014 | $ | 5,665 |  |  | $ | 8,067 |  |  | $ | 316 |  |  | $ | 14,048 |
Inflows | 1,024 |  |  | 1,805 |  |  | 1 |  |  | 2,830 |
Outflows | (446 | ) |  | (2,739 | ) |  | (13 | ) |  | (3,198 | )
Deconsolidation of Atalanta Sosnoff (December 31, 2015) | — |  |  | (5,297 | ) |  | — |  |  | (5,297 | )
Market Appreciation (Depreciation) | (34 | ) |  | (181 | ) |  | — |  |  | (215 | )
Balance at December 31, 2015 | $ | 6,209 |  |  | $ | 1,655 |  |  | $ | 304 |  |  | $ | 8,168 |
Unconsolidated Affiliates - Balance at December 31, 2015: |  |  |  |  |  |  |
Atalanta Sosnoff | $ | — |  |  | $ | 5,297 |  |  | $ | — |  |  | $ | 5,297 |
G5 ǀ Evercore | $ | 1,537 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,537 |
ABS | $ | — |  |  | $ | 5,122 |  |  | $ | — |  |  | $ | 5,122 |

The following table represents the composition of our AUM for Wealth Management and Institutional Asset Management as of December 31, 2015:

| Wealth Management |  | Institutional Asset Management
Equities | 56 | % |  | 19 | %
Fixed Income | 33 | % |  | 81 | %
Liquidity (1) | 10 | % |  | — | %
Alternatives | 1 | % |  | — | %
Total | 100 | % |  | 100 | %

(1) Includes cash, cash equivalents and U.S. Treasury securities.
Our Wealth Management business serves individuals, families and related institutions delivering customized investment management, financial planning, and trust and custody services. Investment portfolios are tailored to meet the investment objectives of individual clients and reflect a blend of equity, fixed income and other products. Fees charged to clients reflect the composition of the assets managed and the services provided. Investment performance in the Wealth Management businesses is measured against appropriate indices based on the AUM, most frequently the S&P 500 and a composite fixed income index principally reflecting BarCap and MSCI indices.
In 2015, AUM for Wealth Management increased 10%, reflecting a 10% increase due to flows, partially offset by a slight decrease due to market depreciation. Wealth Management lagged the S&P 500 on a 1 year basis by 3% and outperformed the S&P 500 on a 3 year basis by 2% during the period and lagged the fixed income composite on a 1 year basis by 40 bps and tracked the fixed income composite on a 3 year basis. For the period, the S&P 500 was up 1%, while the fixed income composite increased by 3%.
In 2014, AUM for Wealth Management increased 16%, reflecting an 8% increase due to flows and an 8% increase due to market appreciation. Wealth Management outperformed the S&P 500 on a 1 and 3 year basis by 3% and 2%, respectively, during the period and outperformed the fixed income composite by 30 bps. For the period, the S&P 500 was up 14%, while the fixed income composite increased by 4%.
Our Institutional Asset Management business reflects assets managed by Atalanta Sosnoff (deconsolidated on December 31, 2015) and ECB. Atalanta Sosnoff manages large-capitalization U.S. equity and balanced products, while, ECB primarily manages Mexican Government and corporate fixed income securities. ECB also manages equity products.
ECB utilizes the IPC Index, which is a capitalization weighted index of leading equities traded on the Mexican Stock Exchange and the Cetes 28 Index, which is an index of Treasury Bills issued by the Mexican Government, as benchmarks in reviewing their performance and managing their investment decisions.
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In 2015, AUM for Institutional Asset Management decreased 79%, primarily reflecting a 66% decrease due to the deconsolidation of Atalanta Sosnoff on December 31, 2015, as well as an 11% decrease due to flows and a 2% decrease due to market depreciation. ECB's AUM decrease primarily reflects the impact of the fluctuation of foreign currency and net outflows.
In 2014, AUM for Institutional Asset Management decreased 4%, reflecting a 7% decrease due to flows partially offset by a 3% increase due to market appreciation. This reflects a decrease in AUM for Atalanta Sosnoff and ECB. ECB's AUM decrease primarily reflects market depreciation. AUM for Atalanta Sosnoff decreased primarily related to negative flows, as their three year performance continued to lag the benchmarks.
Our Private Equity business includes the assets of funds which our Private Equity professionals manage. These funds include ECP II (terminated on December 31, 2014), the Discovery Fund, EMCP II and EMCP III. AUM for Private Equity decreased 4% in 2015 from net outflows related to the continued wind-down of the U.S. Private Equity business.
AUM from our unconsolidated affiliates increased 77% from 2014 primarily related to the addition of Atalanta Sosnoff as an equity method investment as of December 31, 2015, as well as positive performance in ABS, partially offset by negative performance in G5 ǀ Evercore.
2015 versus 2014
Net Investment Management Revenues were $92.4 million in 2015, compared to $96.2 million in 2014. Investment Advisory and Management Fees earned from the management of client portfolios and other investment advisory services increased 2% from 2014, primarily reflecting an increase in AUM in Wealth Management, partially offset by a decrease in Private Equity fees. Fee-based revenues included $0.9 million of revenues from performance fees during 2015 compared to $0.2 million during 2014. Realized and Unrealized Gains decreased 37% from the prior year primarily resulting from lower gains in our private equity funds and Institutional Asset Management. Income from Equity Method Investments increased from 2014 as a result of an increase in earnings from our investments in ABS and G5 ǀ Evercore.
Operating Expenses were $77.2 million in 2015, as compared to $86.5 million in 2014, a decrease of $9.3 million, or 11%. Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $54.1 million in 2015, as compared to $56.9 million in 2014, a decrease of $2.8 million, or 5%. Non-compensation expenses, as a component of Operating Expenses, were $23.1 million in 2015, as compared to $29.7 million in 2014, a decrease of $6.6 million, or 22%.
Other Expenses of $39.3 million in 2015 primarily included special charges of $28.5 million related to an impairment charge associated with the impairment of goodwill in the Company's Institutional Asset Management reporting unit. See "Impairment of Assets" above for further information. Other Expenses of $0.3 million in 2014 were related to intangible asset amortization.
2014 versus 2013
Net Investment Management Revenues were $96.2 million in 2014, compared to $94.6 million in 2013. Investment Advisory and Management Fees earned from the management of client portfolios and other investment advisory services increased 4% from 2013, primarily reflecting an increase in AUM in Wealth Management, partially offset by a decrease in Private Equity fees. Fee-based revenues included $0.2 million of revenues from performance fees during 2014 compared to $0.5 million during 2013. Realized and Unrealized Gains were flat from the prior year primarily resulting from increased gains in Institutional Asset Management, which were partially offset by decreased gains in our private equity funds. Income from Equity Method Investments decreased from 2013 primarily as a result of a decrease in earnings from our investment in ABS.
Operating Expenses were $86.5 million in 2014, as compared to $81.9 million in 2013, an increase of $4.7 million, or 6%. Employee Compensation and Benefits Expense, as a component of Operating Expenses, was $56.9 million in 2014, as compared to $53.1 million in 2013, an increase of $3.8 million, or 7%. The increase was due primarily to higher costs from share-based and other deferred compensation arrangements. Non-compensation expenses, as a component of Operating Expenses, were $29.7 million in 2014, as compared to $28.8 million in 2013, an increase of $0.9 million, or 3%.
Other Expenses of $0.3 million in 2014 were related to amortization of intangibles. Other Expenses of $2.7 million in 2013 included compensation costs associated with the vesting of LP Units and certain other awards of $2.2 million, special charges of $0.2 million and amortization of intangibles of $0.3 million.
Cash Flows
Our operating cash flows are primarily influenced by the timing and receipt of investment banking and investment management fees, and the payment of operating expenses, including bonuses to our employees and interest expense on our Senior Notes and New Loan. Investment Banking advisory fees are generally collected within 90 days of billing. However,
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placement fees may be collected within 180 days of billing, with certain fees being collected in a period exceeding one year. Management fees from our private equity investment management activities are generally billed in advance but collected at the end of a half year period from billing. Fees from our Wealth Management and Institutional Asset Management businesses are generally billed and collected within 90 days. We traditionally pay a substantial portion of incentive compensation to personnel in the Investment Banking business and to executive officers during the first three months of each calendar year with respect to the prior year’s results. Our investing and financing cash flows are primarily influenced by activities to deploy capital to fund investments and acquisitions, raise capital through the issuance of stock or debt, repurchase of outstanding Class A Shares, and/or noncontrolling interest in Evercore LP, as well as our other subsidiaries, payment of dividends and other periodic distributions to our stakeholders. We generally make dividend payments and other distributions on a quarterly basis. We periodically draw down on our line of credit to balance the timing of our operating, investing and financing cash flow needs. A summary of our operating, investing and financing cash flows is as follows:

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
| (dollars in thousands)
Cash Provided By (Used In) |  |  |  |  |
Operating activities: |  |  |  |  |
Net income | $ | 57,690 |  |  | $ | 107,371 |  |  | $ | 72,022 |
Non-cash charges | 271,691 |  |  | 147,857 |  |  | 149,933 |
Other operating activities | 27,470 |  |  | (39,256 | ) |  | (23,241 | )
Operating activities | 356,851 |  |  | 215,972 |  |  | 198,714 |
Investing activities | (26,117 | ) |  | 25,035 |  |  | (8,864 | )
Financing activities | (223,803 | ) |  | (179,595 | ) |  | (149,796 | )
Effect of exchange rate changes | (10,327 | ) |  | (7,705 | ) |  | (1,032 | )
Net Increase in Cash and Cash Equivalents | 96,604 |  |  | 53,707 |  |  | 39,022 |
Cash and Cash Equivalents |  |  |  |  |
Beginning of Period | 352,160 |  |  | 298,453 |  |  | 259,431 |
End of Period | $ | 448,764 |  |  | $ | 352,160 |  |  | $ | 298,453 |

2015. Cash and Cash Equivalents were $448.8 million at December 31, 2015, an increase of $96.6 million versus Cash and Cash Equivalents of $352.2 million at December 31, 2014. Operating activities resulted in a net inflow of $356.9 million, primarily related to earnings. Cash of $26.1 million was used in investing activities primarily related to purchases of furniture, equipment and leasehold improvements and net purchases of marketable securities and corporate investments, partially offset by distributions from private equity investments. Financing activities during the period used cash of $223.8 million, primarily for the payment of dividends and distributions to noncontrolling interest holders, as well as treasury stock purchases.
2014. Cash and Cash Equivalents were $352.2 million at December 31, 2014, an increase of $53.7 million versus Cash and Cash Equivalents of $298.5 million at December 31, 2013. Operating activities resulted in a net inflow of $216.0 million, primarily related to earnings. Cash of $25.0 million was provided by investing activities primarily related to cash acquired from acquisitions and net proceeds from maturities and sales of our marketable securities, partially offset by investments purchased and purchases of furniture, equipment and leasehold improvements. Financing activities during the period used cash of $179.6 million, primarily for the payment of dividends and distributions to noncontrolling interest holders, as well as treasury stock and noncontrolling interest purchases.
2013. Cash and Cash Equivalents were $298.5 million at December 31, 2013, an increase of $39.0 million versus Cash and Cash Equivalents of $259.4 million at December 31, 2012. Operating activities resulted in a net inflow of $198.7 million, primarily related to earnings. Cash of $8.9 million was used in investing activities primarily related to net purchases of marketable securities and investments and purchases of furniture, equipment and leasehold improvements. Financing activities during the period used cash of $149.8 million, primarily for the payment of dividends and distributions to noncontrolling interest holders, as well as treasury stock and noncontrolling interest purchases.
Liquidity and Capital Resources
General
Our current assets include Cash and Cash Equivalents, Marketable Securities and Accounts Receivable relating to Investment Banking and Investment Management revenues. Our current liabilities include accrued expenses, accrued employee
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compensation and short-term borrowings. We traditionally have made payments for employee bonus awards and year-end distributions to partners in the first quarter of the year with respect to the prior year’s results. From time to time, advances may also be made in satisfaction of commitments to new employees, at or near the date they begin employment. Cash distributions related to partnership tax allocations are made to the partners of Evercore LP and EWM in accordance with our corporate estimated payment calendar; these payments are made prior to the end of each calendar quarter. In addition, dividends on Class A Shares, and related distributions to partners of Evercore LP, are paid when and if declared by the Board of Directors, which is generally quarterly.
We regularly monitor our liquidity position, including cash, other significant working capital, current assets and liabilities, long-term liabilities, lease commitments and related fixed assets, principal investment commitments related to our Investment Management business, dividends on Class A Shares, partnership distributions and other capital transactions, as well as other matters relating to liquidity and compliance with regulatory requirements. Our liquidity is highly dependent on our revenue stream from our operations, principally from our Investment Banking business, which is a function of closing transactions and earning success fees, the timing and realization of which is irregular and dependent upon factors that are not subject to our control. Our revenue stream funds the payment of our expenses, including annual bonus payments, a portion of which are guaranteed, interest expense on our Senior Notes, New Loan and other financing arrangements and income taxes. Payments made for income taxes may be reduced by deductions taken for the increase in tax basis of our investment in Evercore LP. These tax deductions, when realized, require payment under our long-term liability, Amounts Due Pursuant to Tax Receivable Agreements. We intend to fund these payments from cash and cash equivalents on hand, principally derived from cash flows from operations. These tax deductions, when realized, will result in cash otherwise required to satisfy tax obligations becoming available for other purposes. Our Management Committee meets regularly to monitor our liquidity and cash positions against our short and long-term obligations, as well as our capital requirements and commitments. The result of this review contributes to management’s recommendation to the Board of Directors as to the level of quarterly dividend payments, if any.
As a financial services firm, our businesses are materially affected by conditions in the global financial markets and economic conditions throughout the world. Revenue generated by our advisory activities is related to the number and value of the transactions in which we are involved. In addition, revenue related to our equities business is driven by market volumes. During periods of unfavorable market or economic conditions, the number and value of M&A transactions, as well as market volumes in equities, generally decrease, and they generally increase during periods of favorable market or economic conditions. Restructuring activity generally is counter-cyclical to M&A activity. In addition, during periods of unfavorable market conditions our Investment Management business may be impacted by reduced equity valuations and generate relatively lower revenue because fees we receive, either directly or through our affiliates, typically are in part based on the market value of underlying publicly-traded securities. Our profitability may also be adversely affected by our fixed costs and the possibility that we would be unable to scale back other costs within a time frame and in an amount sufficient to match any decreases in revenue relating to changes in market and economic conditions. Reduced equity valuations resulting from future adverse economic events and/or market conditions may impact our performance and may result in future net redemptions of AUM from our clients, which would generally result in lower revenues and cash flows. These adverse conditions could also have an impact on our goodwill impairment assessment, which is done annually, as of November 30th, or more frequently if circumstances indicate impairment may have occurred. For a further discussion of risks related to our business, refer to "Risk Factors" elsewhere in this Form 10-K.
We periodically repurchase Class A Shares and/or LP Units into Treasury in order to reduce the dilutive effect of equity awards granted. In addition, we may from time to time, purchase noncontrolling interests in subsidiaries.
In October 2014, our Board of Directors authorized the repurchase of additional Class A Shares and/or LP Units so that going forward Evercore will be able to repurchase an aggregate of seven million Class A Shares and/or LP Units for up to $350.0 million. 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 amount of shares repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. This program may be suspended or discontinued at any time and does not have a specified expiration date. During 2015, we repurchased 4,507,413 shares/units, at an average cost per share of $51.82, for $233.6 million pursuant to our repurchase program.
In addition, periodically, we buy shares into treasury from our employees in order to allow them to satisfy their minimum tax requirements for share deliveries under our share equity plan. During 2015, we repurchased 996,117 shares, at an average cost per share of $50.92, for $50.7 million primarily related to minimum tax withholding requirements of share deliveries.
On August 21, 2008, we entered into a Purchase Agreement with Mizuho pursuant to which Mizuho purchased from us $120.0 million principal amount of 5.20% Senior Notes, due 2020, and Warrants to purchase 5,454,545 Class A Shares at
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$22.00 per share (the "Warrant") expiring in 2020. The exercise price for the Warrants was payable, at the option of the holder of the Warrants, either in cash or by tender of Senior Notes at the Accreted Amount, at any point in time. Mizuho exercised in full the outstanding Warrants in November 2015 and paid the exercise price by surrendering the Senior Notes and paying $11.0 million in cash. The Company conducted a public offering for the resale of the 5,454,545 shares of Class A common stock issuable upon exercise of the Warrants on behalf of Mizuho, in which 3,100,000 shares were offered to the public. The Company purchased from the underwriters the remaining 2,354,545 shares of Class A common stock that were subject to the offering (the "Share Repurchase"), at a price per share equal to the price paid by the underwriters to the selling stockholder in the offering.
On November 2, 2015 the Company entered into a senior credit facility with the New York branch of Mizuho pursuant to which it borrowed, concurrently with the closing of the offering, $120.0 million in a New Loan. The principal amount of the New Loan is subject to annual amortization of principal beginning in the second year, with the final payment of all amounts outstanding, plus accrued interest, being due five years after the closing date. The New Loan bears interest at LIBOR or a base rate (at the Company’s election) plus an applicable margin (determined according to a leverage-based pricing grid), and is guaranteed by certain of the Company’s material domestic subsidiaries. The New Loan contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio, a minimum tangible net worth and a minimum ratio of liquid assets to debt, and customary events of default. As of December 31, 2015, we were in compliance with all of these covenants. The Company used the proceeds of the New Loan, together with the cash portion of the exercise price of the Warrants, to fund the Share Repurchase. We intend to explore refinancing the New Loan with fixed rate, privately placed, long-term debt in 2016.
Mizuho, Mizuho Securities Co. Ltd., and the Company also revised the alliance between their advisory businesses to include geographies globally and extended for an initial three year term, with automatic one-year renewals thereafter.
As of December 31, 2015, the Company had $22.6 million in subordinated borrowings, principally with an executive officer of the Company, due on October 31, 2019. These borrowings have a coupon of 5.5%, payable semi-annually.
We have made certain capital commitments, with respect to our investment activities, as well as commitments related to redeemable noncontrolling interest and contingent consideration from our acquisitions, which are included in the Contractual Obligations section below.
On June 26, 2015, Evercore Partners Services East L.L.C. ("East"), a wholly-owned subsidiary of the Company, increased its line of credit from First Republic Bank to an aggregate principal amount of up to $75.0 million, to be used for working capital and other corporate activities, including, but not limited to, the repurchase of the Company's stock from time to time. This facility is secured by (i) cash and cash equivalents of East held in a designated account with First Republic Bank, (ii) certain of East's intercompany receivables and (iii) third party accounts receivable of EGL. Drawings under this facility bear interest at the prime rate. The facility was renewed on June 26, 2015 and the maturity date was extended to June 27, 2016. The Company drew down $45.0 million on this facility on February 5, 2015, which was repaid as of June 30, 2015. On January 15, 2016, the line of credit from First Republic Bank was decreased to an aggregate principal amount of up to $50.0 million. In addition, the agreement was modified to impose similar quarterly financial covenants as the Company agreed to in the New Loan with Mizuho, including (i) a Minimum Consolidated Tangible Net Worth, (ii) a Minimum Unencumbered Liquid Asset Ratio and (iii) a Maximum Consolidated Leverage Ratio. On January 27, 2016, the Company drew down $50.0 million on this facility.
ECB maintains a line of credit with BBVA Bancomer to fund its trading activities on an intra-day and overnight basis. The facility has a maximum aggregate principal amount of approximately $11.6 million and is secured by trading securities. No interest is charged on the intra-day facility. The overnight facility is charged the Inter-Bank Balance Interest Rate plus 10 basis points. There have been no significant draw downs on ECB’s line of credit since August 10, 2006. The line of credit is renewable annually.
During the first quarter of 2015, in conjunction with the Company entering into a strategic alliance with Luminis Partners ("Luminis"), the Company committed to loan Luminis $5.5 million. The Company paid Luminis $3.5 million pursuant to the loan agreement during the year ended December 31, 2015, with the remaining $2.0 million due from the Company on demand. The Company may acquire a 20% interest in Luminis in 2017.
Pursuant to deferred compensation and deferred consideration arrangements, we are obligated to make cash payments in future periods. For further information see Note 17 to our consolidated financial statements.
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Certain of our subsidiaries are regulated entities and are subject to capital requirements. For further information see Note 19 to our consolidated financial statements.
Collateralized Financing Activity at ECB
ECB enters into repurchase agreements with clients seeking overnight money market returns whereby ECB transfers to the clients Mexican government securities in exchange for cash and concurrently agrees to repurchase the securities at a future date for an amount equal to the cash exchanged plus a stipulated premium or interest factor. ECB deploys the cash received from, and acquires the securities deliverable to, clients under these repurchase arrangements by purchasing securities in the open market or by entering into reverse repurchase agreements with unrelated third parties. We account for these repurchase and reverse repurchase agreements as collateralized financing transactions. We record a liability on our Consolidated Statements of Financial Condition in relation to repurchase transactions executed with clients as Securities Sold Under Agreements to Repurchase. We record as assets on our Consolidated Statements of Financial Condition, Financial Instruments Owned and Pledged as Collateral at Fair Value (where we have acquired the securities deliverable to clients under these repurchase arrangements by purchasing securities in the open market) and Securities Purchased Under Agreements to Resell (where we have acquired the securities deliverable to clients under these repurchase agreements by entering into reverse repurchase agreements with unrelated third parties). These Mexican government securities included in Financial Instruments Owned and Pledged as Collateral at Fair Value on the Consolidated Statements of Financial Condition have an estimated average time to maturity of approximately 0.9 years, as of December 31, 2015, and are pledged as collateral against repurchase agreements, which are collateralized financing agreements. Generally, collateral is posted equal to the contract value at inception and is subject to market changes. These repurchase agreements are primarily with institutional customer accounts managed by ECB, generally mature within one business day and permit the counterparty to pledge the securities. Increases and decreases in asset and liability levels related to these transactions are a function of growth in ECB’s AUM, as well as clients’ investment allocations requiring positioning in repurchase transactions.
ECB has procedures in place to monitor the daily risk limits for positions taken, as well as the credit risk based on the collateral pledged under these agreements against their contract value from inception to maturity date. The daily risk measure is Value at Risk ("VaR"), which is a statistical measure, at a 98% confidence level, of the potential daily losses from adverse market movements in an ordinary market environment based on a historical simulation using the prior year’s historical data. ECB’s Risk Management Committee (the "Committee") has established a policy to maintain VaR at levels below 0.1% of the value of the portfolio. If at any point in time the threshold is exceeded, ECB personnel are alerted by an automated interface with ECB’s trading systems and begin to make adjustments in the portfolio in order to mitigate the risk and bring the portfolio in compliance. Concurrently, ECB personnel must notify the Committee of the variance and the actions taken to reduce the exposure to loss.
In addition to monitoring VaR, ECB periodically performs discrete stress tests ("Stress Tests") to assure that the level of potential losses that would arise from extreme market movements that may not be anticipated by VaR measures are within acceptable levels. The table below includes a key stress test monitored by the Committee, noted as the sensitivity to a 100 basis point change in interest rates. This analysis assists ECB in understanding the impact of an extreme move in rates, assuring the Collateralized Financing portfolio is structured to maintain risk at an acceptable level, even in extreme circumstances.
The Committee meets monthly to analyze the overall market risk exposure based on positions taken, as well as the credit risk, based on the collateral pledged under these agreements against the contract value from inception to maturity date. In these meetings the Committee evaluates risk from an operating perspective, VaR, and an exceptional perspective, Stress Tests, to determine the appropriate level of risk limits in the current environment.
We periodically assess the collectability or credit quality related to securities purchased under agreements to resell.
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As of December 31, 2015 and 2014, a summary of ECB’s assets, liabilities and risk measures related to its collateralized financing activities is as follows:

| December 31, 2015 |  | December 31, 2014
| Amount |  | Market Value of Collateral Received or (Pledged) |  | Amount |  | Market Value of Collateral Received or (Pledged)
| (dollars in thousands)
Assets |  |  |  |  |  |  |
Financial Instruments Owned and Pledged as Collateral at Fair Value | $ | 41,742 |  |  |  |  | $ | 98,688 |  |  |
Securities Purchased Under Agreements to Resell | 2,191 |  |  | $ | 2,192 |  |  | 7,669 |  |  | $ | 7,671 |
Total Assets | 43,933 |  |  |  |  | 106,357 |  |  |
Liabilities |  |  |  |  |  |  |
Securities Sold Under Agreements to Repurchase | (44,000 | ) |  | $ | (44,063 | ) |  | (106,499 | ) |  | $ | (106,632 | )
Net Liabilities | $ | (67 | ) |  |  |  | $ | (142 | ) |  |
Risk Measures |  |  |  |  |  |  |
VaR | $ | 4 |  |  |  |  | $ | 29 |  |  |
Stress Test: |  |  |  |  |  |  |
Portfolio sensitivity to a 100 basis point increase in the interest rate | $ | (20 | ) |  |  |  | $ | (70 | ) |  |
Portfolio sensitivity to a 100 basis point decrease in the interest rate | $ | 20 |  |  |  |  | $ | 70 |  |  |

Contractual Obligations
The following table summarizes our contractual obligations as of December 31, 2015:

| Payment Due by Period
| Total |  | Less than 1 year |  | 1-3 years |  | 3-5 years |  | More than 5 years
| (dollars in thousands)
Operating Lease Obligations | $ | 194,839 |  |  | $ | 29,305 |  |  | $ | 55,959 |  |  | $ | 54,547 |  |  | $ | 55,028 |
Tax Receivable Agreements | 197,674 |  |  | 11,638 |  |  | 23,713 |  |  | 25,590 |  |  | 136,733 |
Notes Payable and Subordinated Borrowings, Including Interest | 160,826 |  |  | 4,345 |  |  | 44,642 |  |  | 111,839 |  |  | — |
Investment Banking Commitments | 76,530 |  |  | 38,349 |  |  | 26,807 |  |  | 11,374 |  |  | — |
Investment Management Commitments | 8,162 |  |  | 8,162 |  |  | — |  |  | — |  |  | — |
Total | $ | 638,031 |  |  | $ | 91,799 |  |  | $ | 151,121 |  |  | $ | 203,350 |  |  | $ | 191,761 |

We had total commitments (not reflected on our Consolidated Statements of Financial Condition) relating to future capital contributions to private equity funds of $8.2 million and $8.7 million as of December 31, 2015 and 2014, respectively. We expect to fund these commitments with cash flows from operations. We may be required to fund these commitments at any time through June 2022, depending on the timing and level of investments by our private equity funds.
We also had commitments related to our redeemable noncontrolling interests. The value of our redeemable noncontrolling interests, which principally included noncontrolling interests held by the principals of Atalanta Sosnoff, was $4.0 million as of December 31, 2014, as recorded on our Consolidated Statement of Financial Condition.
Off-Balance Sheet Arrangements
We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any leasing activities that expose us to any liability that is not reflected in our consolidated financial statements.
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Market Risk and Credit Risk
We, in general, are not a capital-intensive organization and as such, are not subject to significant market or credit risks. Nevertheless, we have established procedures to assess both the market and credit risk, as well as specific investment risk, exchange rate risk and credit risk related to receivables.
Market and Investment Risk
Institutional Asset Management
We invest in funds managed by EWM which principally hold equity securities. As of December 31, 2015, the fair value of our investments with these products, based on closing prices, was $4.0 million.
We estimate that a hypothetical 10% adverse change in the market value of the investments would have resulted in a decrease in pre-tax income of approximately $0.4 million for the year ended December 31, 2015.
See "-Liquidity and Capital Resources" above for a discussion of collateralized financing transactions at ECB.
Private Equity Funds
Through our principal investments in our private equity funds and our ability to earn carried interest from these funds, we face exposure to changes in the estimated fair value of the companies in which these funds invest. Our professionals devote considerable time and resources to work closely with the portfolio company’s management to assist in designing a business strategy, allocating capital and other resources and evaluating expansion or acquisition opportunities. On a quarterly basis, we perform a comprehensive analysis and valuation of all of the portfolio companies. Our analysis includes reviewing the current market conditions and valuations of each portfolio company. Valuations and analysis regarding our investments in CSI Capital and Trilantic are performed by their respective professionals, and thus we are not involved in determining the fair value for the portfolio companies of such funds.
We estimate that a hypothetical 10% adverse change in the value of the private equity funds would have resulted in a decrease in pre-tax income of approximately $1.2 million for the year ended December 31, 2015.
Exchange Rate Risk
We have foreign operations, through our subsidiaries and affiliates, primarily in Mexico and the United Kingdom, as well as provide services to clients in other jurisdictions, which creates foreign exchange rate risk. We have not entered into any transactions to hedge our exposure to these foreign exchange fluctuations through the use of derivative instruments or otherwise. An appreciation or depreciation of any of these currencies relative to the U.S. dollar would result in an adverse or beneficial impact to our financial results. A significant portion of our Latin American revenues have been, and will continue to be, derived from contracts denominated in Mexican pesos and Brazilian real and Evercore Partners Limited's revenue and expenses are denominated primarily in British pounds sterling and euro. Historically, the value of these foreign currencies has fluctuated relative to the U.S. dollar. For the year ended December 31, 2015, the net impact of the fluctuation of foreign currencies recorded in Other Comprehensive Income within the Consolidated Statement of Comprehensive Income was ($16.3) million. It is currently not our intention to hedge our foreign currency exposure, and we will reevaluate this policy from time to time.
Credit Risks
We maintain cash and cash equivalents with financial institutions with high credit ratings. At times, we may maintain deposits in federally insured financial institutions in excess of federally insured ("FDIC") limits or enter into sweep arrangements where banks will periodically transfer a portion of the Company's excess cash position to a money market fund. However, we believe that we are not exposed to significant credit risk due to the financial position of the depository institution or investment vehicles in which those deposits are held.
Accounts Receivable consists primarily of advisory fees and expense reimbursements billed to our clients. Receivables are reported net of any allowance for doubtful accounts. We maintain an allowance for bad debts to provide coverage for probable losses from our customer receivables and derive the estimate through specific identification for the allowance for doubtful accounts and an assessment of the client’s creditworthiness. As of December 31, 2015 and 2014, total receivables amounted to $175.5 million and $136.3 million, respectively, net of an allowance. The Investment Banking and Investment Management receivables collection periods generally are within 90 days of invoice, with the exception of placement fees,
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which are generally collected within 180 days of invoice. The collection period for restructuring transactions and private equity fee receivables may exceed 90 days. We recorded minimal bad debt expense for each of the years ended December 31, 2015 and 2014.
With respect to our Marketable Securities portfolio, which is comprised primarily of highly-rated corporate and municipal bonds, mutual funds and securities investments, we manage our credit risk exposure by limiting concentration risk and maintaining investment grade credit quality. As of December 31, 2015, we had Marketable Securities of $43.8 million, of which 90% were corporate and municipal securities, primarily with S&P ratings ranging from AAA to BB+.
Critical Accounting Policies and Estimates
The consolidated financial statements included in this report are prepared in conformity with accounting principles generally accepted in the United States of America, which requires management to make estimates and assumptions regarding future events that affect the amounts reported in our consolidated financial statements and their notes, including reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We base these estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the presentation of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments.
Revenue Recognition
Investment Banking Revenue
We earn investment banking fees from our clients for providing advisory services on mergers, acquisitions, divestitures, leveraged buyouts, restructurings and similar corporate finance matters. It is our accounting policy to recognize revenue when (i) there is persuasive evidence of an arrangement with a client, (ii) fees are fixed or determinable, (iii) the agreed-upon services have been completed and delivered to the client or the transaction or events contemplated in the engagement letter are determined to be substantially completed and (iv) collectability is reasonably assured. We record Investment Banking Revenue on the Consolidated Statements of Operations for the following:
In general, advisory fees are paid at the time we sign an engagement letter, during the course of the engagement or when an engagement is completed. In some circumstances, and as a function of the terms of an engagement letter, we may receive retainer fees for financial advisory services concurrent with, or soon after, the execution of the engagement letter where the engagement letter will specify a future service period associated with that fee. In such circumstances, these retainer fees are initially recorded as deferred revenue, which is recorded within Other Current Liabilities on the Consolidated Statements of Financial Condition, and subsequently recognized as revenue during the applicable time period within which the service is rendered. Revenues related to fairness or valuation opinions are recognized when the opinion has been rendered and delivered to the client and all other requirements for revenue recognition are satisfied. Success fees for advisory services, such as M&A advice, are recognized when the transaction(s) or event(s) are determined to be completed or substantially completed and all other requirements for revenue recognition are satisfied. In the event the Company were to receive an opinion or success fee in advance of the completion conditions noted above, such fee would initially be recorded as deferred revenue and subsequently recognized as advisory fee revenue when the conditions of completion have been satisfied.
Placement fee revenues are attributable to capital raising on both a primary and secondary basis. We recognize placement advisory fees at the time of the client’s acceptance of capital or capital commitments in accordance with the terms of the engagement letter.
Underwriting fees are attributable to public and private offerings of equity and debt securities and are recognized when the offering has been deemed to be completed by the lead manager of the underwriting group, pursuant to applicable regulatory rules. When the offering is completed, we recognize the applicable management fee, selling concession and underwriting fee, the latter net of estimated offering expenses.
Commissions and Related Fees include commissions received from customers on agency-based brokerage transactions in listed and over-the-counter equities and are recorded on a trade-date basis or, in the case of payments under commission sharing arrangements, when earned. Commissions and Related Fees also include subscription fees for the sales of research. Cash received before the subscription period ends is initially recorded as deferred revenue and recognized as revenue over the remaining subscription period.
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Investment Management Revenue
Our Investment Management business generates revenues from the management of client assets and the private equity funds.
Investment management fees generated for third-party clients are generally based on the value of the AUM and any performance fees that may be negotiated with the client. These fees are generally recognized over the period that the related services are provided, based upon the beginning, ending or average value of the assets for the relevant period. Fees paid in advance of services rendered are initially recorded as deferred revenue, which is recorded in Other Current Liabilities on the Consolidated Statements of Financial Condition, and is recognized in Investment Management Revenue on the Consolidated Statements of Operations ratably over the period in which the related service is rendered. Generally, to the extent performance fee arrangements have been negotiated, these fees are earned when the return on assets exceeds certain benchmark returns.
Management fees for private equity funds are contractual and are typically based on committed capital during the private equity funds’ investment period, and on invested capital thereafter. Management fees are recognized ratably over the period during which services are provided. We also record performance fee revenue from the private equity funds when the returns on the private equity funds’ investments exceed certain threshold minimums. These performance fees, or carried interest, are computed in accordance with the underlying private equity funds’ partnership agreements and are based on investment performance over the life of each investment partnership. Historically, the Company recorded performance fee revenue from its managed private equity funds when the private equity funds’ investment values exceeded certain threshold minimums. During 2014, the Company changed its method of recording performance fees such that the Company records performance fees upon the earlier of the termination of the investment fund or when the likelihood of clawback is mathematically improbable. This method is considered the more preferable of the two methods accepted under ASC 605-20-S99-1.
Fees for serving as an independent fiduciary and/or trustee are either based on a flat fee or are based on the value of assets under administration. For ongoing engagements, fees are billed quarterly either in advance or in arrears. Fees paid in advance of services rendered are initially recorded as deferred revenue in Other Current Liabilities on the Consolidated Statements of Financial Condition, and are recognized in Investment Management Revenue on the Consolidated Statements of Operations ratably over the period in which the related services are rendered.
Net Interest revenue is derived from investing customer funds in financing transactions. These transactions are primarily repurchases and resales of Mexican government securities. Revenue and expenses associated with these transactions are recognized over the term of the repurchase or resale transaction.
Valuation
The valuation of our investments in securities and of our financial investments in the funds we manage impacts both the carrying value of direct investments and the determination of management and performance fees, including carried interest. Effective January 1, 2008, we adopted ASC 820, which among other things requires enhanced disclosures about financial instruments carried at fair value. See Note 10 to the consolidated financial statements for further information. Level I investments include financial instruments owned and pledged as collateral and readily-marketable equity securities. Level II investments include our investments in corporate and municipal bonds and other debt securities. Level III investments include an equity security in a private company which is accounted for on the cost basis.
We adopted ASC 825, "Financial Instruments," which permits entities the option to measure most financial instruments and certain other items at fair value at specified election dates and to report related unrealized gains and losses in earnings. We have not elected to apply the fair value option to any specific financial assets or liabilities.
Certain of our commitments related to our redeemable noncontrolling interests, included within Redeemable Noncontrolling Interest on the Consolidated Statements of Financial Condition, are initially recorded at fair value and may be subject to periodic adjustment to reflect changes in the estimate of the amount due.
Marketable Securities
Investments in corporate and municipal bonds and other debt securities are accounted for as available-for-sale under ASC 320-10, "Accounting for Certain Investments in Debt and Equity Securities". These securities are carried at fair value on the Consolidated Statements of Financial Condition. Unrealized gains and losses are reported as net increases or decreases to Accumulated Other Comprehensive Income (Loss), net of tax, while realized gains and losses on these securities are determined using the specific identification method and are included in Other Revenue on the Consolidated Statements of
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Operations. We invest in readily-marketable debt and equity securities which are managed by EWM. These securities are valued using quoted market prices on applicable exchanges or markets. The realized and unrealized gains and losses on these securities are included in the Consolidated Statements of Operations in Investment Management Revenue. Marketable Securities also include investments in municipal bonds and mutual funds, which are carried at fair value, with changes in fair value recorded in Other Revenue on the Consolidated Statements of Operations.
Marketable Securities transactions are recorded as of the trade date.
Financial Instruments Owned and Pledged as Collateral at Fair Value
Our Financial Instruments Owned and Pledged as Collateral at Fair Value consist principally of foreign government obligations, which are recorded on a trade-date basis and are stated at quoted market values. Related gains and losses are reflected in Other Revenue on the Consolidated Statements of Operations. We pledge our Financial Instruments Owned and Pledged as Collateral at Fair Value to collateralize certain financing arrangements which permits the counterparty to pledge the securities.
Equity Compensation
Share-Based Payments – We account for share-based payments in accordance with Financial Accounting Standards Board issued ASC 718, "Compensation – Stock Compensation" ("ASC 718"). We grant employees performance-based awards that vest upon the occurrence of certain performance criteria being achieved. Compensation cost is accrued if it is probable that the performance condition will be achieved and is not accrued if it is not probable that the performance condition will be achieved. Significant judgment is required in determining the probability that the performance criteria will be achieved. The fair value of awards that vest from one to five years are amortized over the vesting period or requisite substantive service period, as required by ASC 718. See Note 17 to the consolidated financial statements for more information.
Income Taxes
As part of the process of preparing our consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. This process requires us to estimate our actual current tax liability and to assess temporary differences resulting from differing book versus tax treatment of items, such as deferred revenue, compensation and benefits expense, unrealized gains and losses on long-term investments and depreciation. These temporary differences result in deferred tax assets and liabilities, which are included within our Consolidated Statements of Financial Condition. We must then assess the likelihood that deferred tax assets will be recovered from future taxable income, and, to the extent we believe that recovery is not more-likely-than-not, we must establish a valuation allowance. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. Management considers the level of historical taxable income, scheduled reversals of deferred taxes, projected future taxable income and tax planning strategies that can be implemented by us in making this assessment. If actual results differ from these estimates or we adjust these estimates in future periods, we may need to adjust our valuation allowance, which could materially impact our consolidated financial condition and results of operations.
The Company adopted ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17") prospectively as of December 31, 2015 and changed its presentation of deferred income tax assets and liabilities on its consolidated statement of financial condition such that the Company classifies all deferred income tax assets and liabilities as noncurrent. Historically, the Company presented deferred income tax assets and liabilities as current and noncurrent on the Consolidated Statements of Financial Condition. This change in accounting policy had no effect on the prior period information included on the Consolidated Statements of Financial Condition in this Form 10-K, or the Company’s 2014 Form 10-K.
In addition, in order to determine the quarterly tax rate, we are required to estimate full year pre-tax income and the related annual income tax expense in each jurisdiction. Changes in the geographic mix or estimated level of annual pre-tax income can affect our overall effective tax rate. Furthermore, our interpretation of complex tax laws may impact our measurement of current and deferred income taxes.
ASC 740 provides a benefit recognition model with a two-step approach consisting of "more-likely-than-not" recognition criteria, and a measurement attribute that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. This standard also requires the recognition of liabilities created by differences
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between tax positions taken in a tax return and amounts recognized in the financial statements. See Note 20 to our consolidated financial statements herein in regard to the impact of the adoption of this standard on the consolidated financial statements.
The majority of the deferred tax assets relate to the U.S. operations of the Company. The realization of the deferred tax assets is primarily dependent on the amount of the Company’s historic and projected future taxable income for its U.S. and foreign operations. In 2015 and 2014, we performed an assessment of the ultimate realization of our deferred tax assets and determined that the Company should have sufficient future taxable income in the normal course of business to fully realize the portion of the deferred tax assets associated with its U.S. operations and management has concluded that it is more-likely-than-not the deferred tax assets will be realized.
The Company estimates that Evercore Partners Inc. must generate approximately $764 million of future taxable income to realize the U.S. deferred tax asset balance of approximately $298 million. The deferred tax balance is expected to reverse over a period ranging of 5 to 15 taxable years. The Company evaluated Evercore Partners Inc.’s historical U.S. taxable income, which has averaged approximately $36.7 million per year, as well as the current anticipated profitability of approximately $60.8 million and taxable income in the future, which indicates sufficient taxable income to support the realization of these deferred tax assets. To the extent enough taxable income is not generated in the 15 year estimated reversal period, the Company will have an additional 20 years to utilize any net operating loss carry forwards created, as well as the relevant net operating loss carry back period in effect at the time of a taxable loss.
Impairment of Assets
In accordance with ASC 350, we test Goodwill for impairment annually, as of November 30 th, or more frequently if circumstances indicate impairment may have occurred. In this process, we make estimates and assumptions in order to determine the fair value of our reporting units and to project future earnings using valuation techniques. We use our best judgment and information available to us at the time to perform this review. Because our assumptions and estimates are used in projecting future earnings as part of the valuation, actual results could differ. Intangible assets with finite lives are amortized over their estimated useful lives which are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable as prescribed by ASC 360, "Property, Plant, and Equipment."
We test goodwill for impairment at the reporting unit level. In determining the fair value for each reporting unit, we utilize either a market multiple approach and/or a discounted cash flow methodology based on the adjusted cash flows from operations. The market multiple approach includes applying the average earnings multiples of comparable public companies for their respective reporting segment multiplied by the forecasted earnings of the respective reporting unit to yield an estimate of fair value. The discounted cash flow methodology begins with the adjusted cash flows from each of the reporting units and uses a discount rate that reflects the weighted average cost of capital adjusted for the risks inherent in the future cash flows.
In addition to Goodwill and Intangible Assets, we annually assess our Equity Method Investments for impairment (or more frequently if circumstances indicate impairment may have occurred) per ASC 323-10-35 "Subsequent Measurement."
We recorded a Goodwill impairment charge of $28.5 million for the year ended December 31, 2015 related to the Goodwill in our Institutional Asset Management reporting unit and concluded there was no impairment of Intangible Assets and Equity Method Investments during the year ended December 31, 2015. This charge resulted in a decrease of $9.8 million to Net Income Attributable to Evercore Partners Inc. (after adjustments for noncontrolling interest and income taxes).We recorded impairment charges of $2.9 million for Goodwill and Intangible Assets during 2013. See Note 4 to our consolidated financial statements for further information.
Recently Issued Accounting Standards
For a discussion of recently issued accounting standards and their impact or potential impact on the Company's consolidated financial statements, see Note 3 to our consolidated financial statements.

Item 7A. | Quantitative and Qualitative Disclosures About Market Risk

See "Management’s Discussion and Analysis of Financial Condition and Results of Operations – Market Risk and Credit Risk." We do not believe we face any material interest rate risk, foreign currency exchange risk, equity price risk or other market risk except as disclosed in Item 7 " – Market Risk and Credit Risk" above.
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Item 8. | Financial Statements and Supplemental Data

Index to Financial Statements | Page
Report of Independent Registered Public Accounting Firm | 53
Consolidated Statements of Financial Condition | 54
Consolidated Statements of Operations | 55
Consolidated Statements of Comprehensive Income | 56
Consolidated Statements of Changes in Equity | 57
Consolidated Statements of Cash Flows | 58
Notes to Consolidated Financial Statements | 59
Supplemental Financial Information |
Consolidated Quarterly Results of Operations (unaudited) | 103

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Evercore Partners Inc.
New York, New York
We have audited the accompanying consolidated statements of financial condition of Evercore Partners Inc. and subsidiaries (the "Company") as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2015. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Evercore Partners Inc. and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2016 expressed an unqualified opinion on the Company's internal control over financial reporting.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 24, 2016
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EVERCORE PARTNERS INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except share data)

| December 31,
| 2015 |  | 2014
Assets |  |  |
Current Assets |  |  |
Cash and Cash Equivalents | $ | 448,764 |  |  | $ | 352,160 |
Marketable Securities | 43,787 |  |  | 37,985 |
Financial Instruments Owned and Pledged as Collateral at Fair Value | 41,742 |  |  | 98,688 |
Securities Purchased Under Agreements to Resell | 2,191 |  |  | 7,669 |
Accounts Receivable (net of allowances of $1,313 and $1,362 at December 31, 2015 and 2014, respectively) | 175,497 |  |  | 136,280 |
Receivable from Employees and Related Parties | 21,189 |  |  | 17,327 |
Deferred Tax Assets - Current | — |  |  | 13,096 |
Other Current Assets | 16,294 |  |  | 19,751 |
Total Current Assets | 749,464 |  |  | 682,956 |
Investments | 126,651 |  |  | 126,587 |
Deferred Tax Assets - Non-Current | 298,115 |  |  | 265,901 |
Furniture, Equipment and Leasehold Improvements (net of accumulated depreciation and amortization of $42,656 and $33,980 at December 31, 2015 and 2014, respectively) | 47,980 |  |  | 42,527 |
Goodwill | 166,461 |  |  | 218,232 |
Intangible Assets (net of accumulated amortization of $21,754 and $33,735 at December 31, 2015 and 2014, respectively) | 41,010 |  |  | 69,544 |
Assets Segregated for Bank Regulatory Requirements | 10,200 |  |  | 10,200 |
Other Assets | 39,290 |  |  | 30,609 |
Total Assets | $ | 1,479,171 |  |  | $ | 1,446,556 |
Liabilities and Equity |  |  |
Current Liabilities |  |  |
Accrued Compensation and Benefits | $ | 263,862 |  |  | $ | 212,334 |
Accounts Payable and Accrued Expenses | 43,878 |  |  | 37,104 |
Securities Sold Under Agreements to Repurchase | 44,000 |  |  | 106,499 |
Payable to Employees and Related Parties | 28,392 |  |  | 18,875 |
Taxes Payable | 20,886 |  |  | 2,515 |
Other Current Liabilities | 7,031 |  |  | 7,753 |
Total Current Liabilities | 408,049 |  |  | 385,080 |
Notes Payable | 119,250 |  |  | 105,226 |
Subordinated Borrowings | 22,550 |  |  | 22,550 |
Amounts Due Pursuant to Tax Receivable Agreements | 186,036 |  |  | 191,253 |
Other Long-term Liabilities | 36,070 |  |  | 26,200 |
Total Liabilities | 771,955 |  |  | 730,309 |
Commitments and Contingencies (Note 18) |  |  |
Redeemable Noncontrolling Interest | — |  |  | 4,014 |
Equity |  |  |
Evercore Partners Inc. Stockholders' Equity |  |  |
Common Stock |  |  |
Class A, par value $0.01 per share (1,000,000,000 shares authorized, 55,249,559 and 46,414,240 issued at December 31, 2015 and 2014, respectively, and 39,623,271 and 36,255,124 outstanding at December 31, 2015 and 2014, respectively) | 552 |  |  | 464 |
Class B, par value $0.01 per share (1,000,000 shares authorized, 25 and 27 issued and outstanding at December 31, 2015 and 2014, respectively) | — |  |  | — |
Additional Paid-In-Capital | 1,210,742 |  |  | 950,147 |
Accumulated Other Comprehensive Income (Loss) | (34,539 | ) |  | (20,387 | )
Retained Earnings (Deficit) | (27,791 | ) |  | (17,814 | )
Treasury Stock at Cost (15,626,288 and 10,159,116 shares at December 31, 2015 and 2014, respectively) | (644,412 | ) |  | (361,129 | )
Total Evercore Partners Inc. Stockholders' Equity | 504,552 |  |  | 551,281 |
Noncontrolling Interest | 202,664 |  |  | 160,952 |
Total Equity | 707,216 |  |  | 712,233 |
Total Liabilities and Equity | $ | 1,479,171 |  |  | $ | 1,446,556 |

See Notes to Consolidated Financial Statements.
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EVERCORE PARTNERS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars and share amounts in thousands, except per share data)

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Revenues |  |  |  |  |
Investment Banking Revenue | $ | 1,133,860 |  |  | $ | 821,359 |  |  | $ | 666,806 |
Investment Management Revenue | 95,129 |  |  | 98,751 |  |  | 95,759 |
Other Revenue, Including Interest | 11,259 |  |  | 11,292 |  |  | 16,868 |
Total Revenues | 1,240,248 |  |  | 931,402 |  |  | 779,433 |
Interest Expense | 16,975 |  |  | 15,544 |  |  | 14,005 |
Net Revenues | 1,223,273 |  |  | 915,858 |  |  | 765,428 |
Expenses |  |  |  |  |
Employee Compensation and Benefits | 788,175 |  |  | 549,516 |  |  | 485,794 |
Occupancy and Equipment Rental | 47,703 |  |  | 41,202 |  |  | 34,708 |
Professional Fees | 50,817 |  |  | 45,429 |  |  | 36,450 |
Travel and Related Expenses | 55,388 |  |  | 40,015 |  |  | 31,937 |
Communications and Information Services | 36,372 |  |  | 18,818 |  |  | 13,373 |
Depreciation and Amortization | 27,927 |  |  | 16,263 |  |  | 14,537 |
Special Charges | 41,144 |  |  | 4,893 |  |  | 170 |
Acquisition and Transition Costs | 4,890 |  |  | 5,828 |  |  | 58 |
Other Operating Expenses | 42,187 |  |  | 22,947 |  |  | 18,226 |
Total Expenses | 1,094,603 |  |  | 744,911 |  |  | 635,253 |
Income Before Income from Equity Method Investments and Income Taxes | 128,670 |  |  | 170,947 |  |  | 130,175 |
Income from Equity Method Investments | 6,050 |  |  | 5,180 |  |  | 8,326 |
Income Before Income Taxes | 134,720 |  |  | 176,127 |  |  | 138,501 |
Provision for Income Taxes | 77,030 |  |  | 68,756 |  |  | 63,689 |
Net Income from Continuing Operations | 57,690 |  |  | 107,371 |  |  | 74,812 |
Discontinued Operations |  |  |  |  |
Income (Loss) from Discontinued Operations | — |  |  | — |  |  | (4,260 | )
Provision (Benefit) for Income Taxes | — |  |  | — |  |  | (1,470 | )
Net Income (Loss) from Discontinued Operations | — |  |  | — |  |  | (2,790 | )
Net Income | 57,690 |  |  | 107,371 |  |  | 72,022 |
Net Income Attributable to Noncontrolling Interest | 14,827 |  |  | 20,497 |  |  | 18,760 |
Net Income Attributable to Evercore Partners Inc. | $ | 42,863 |  |  | $ | 86,874 |  |  | $ | 53,262 |
Net Income (Loss) Attributable to Evercore Partners Inc. Common Shareholders: |  |  |  |  |  |
From Continuing Operations | $ | 42,863 |  |  | $ | 86,874 |  |  | $ | 54,799 |
From Discontinued Operations | — |  |  | — |  |  | (1,605 | )
Net Income Attributable to Evercore Partners Inc. Common Shareholders | $ | 42,863 |  |  | $ | 86,874 |  |  | $ | 53,194 |
Weighted Average Shares of Class A Common Stock Outstanding |  |  |  |  |
Basic | 37,161 |  |  | 35,827 |  |  | 32,208 |
Diluted | 43,699 |  |  | 41,843 |  |  | 38,481 |
Basic Net Income (Loss) Per Share Attributable to Evercore Partners Inc. Common Shareholders: |  |  |  |  |  |  |
From Continuing Operations | $ | 1.15 |  |  | $ | 2.42 |  |  | $ | 1.70 |
From Discontinued Operations | — |  |  | — |  |  | (0.05 | )
Net Income Per Share Attributable to Evercore Partners Inc. Common Shareholders | $ | 1.15 |  |  | $ | 2.42 |  |  | $ | 1.65 |
Diluted Net Income (Loss) Per Share Attributable to Evercore Partners Inc. Common Shareholders: |  |  |  |  |  |  |
From Continuing Operations | $ | 0.98 |  |  | $ | 2.08 |  |  | $ | 1.42 |
From Discontinued Operations | — |  |  | — |  |  | (0.04 | )
Net Income Per Share Attributable to Evercore Partners Inc. Common Shareholders | $ | 0.98 |  |  | $ | 2.08 |  |  | $ | 1.38 |
Dividends Declared per Share of Class A Common Stock | $ | 1.15 |  |  | $ | 1.03 |  |  | $ | 0.91 |

See Notes to Consolidated Financial Statements.
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EVERCORE PARTNERS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands)

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Net Income | $ | 57,690 |  |  | $ | 107,371 |  |  | $ | 72,022 |
Other Comprehensive Income (Loss), net of tax: |  |  |  |  |
Unrealized Gain (Loss) on Marketable Securities and Investments, net | (1,751 | ) |  | (2,668 | ) |  | (1,236 | )
Foreign Currency Translation Adjustment Gain (Loss), net | (16,287 | ) |  | (9,543 | ) |  | (690 | )
Other Comprehensive Income (Loss) | (18,038 | ) |  | (12,211 | ) |  | (1,926 | )
Comprehensive Income | 39,652 |  |  | 95,160 |  |  | 70,096 |
Comprehensive Income Attributable to Noncontrolling Interest | 10,941 |  |  | 17,889 |  |  | 18,532 |
Comprehensive Income Attributable to Evercore Partners Inc. | $ | 28,711 |  |  | $ | 77,271 |  |  | $ | 51,564 |

See Notes to Consolidated Financial Statements.
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EVERCORE PARTNERS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(dollars in thousands, except share data)

|  |  |  |  |  |  | Accumulated |  |  |  |  |  |  |  |  |  |
|  |  |  |  | Additional |  | Other |  | Retained |  |  |  |  |  |  |  |
| Class A Common Stock |  | Paid-In |  | Comprehensive |  | Earnings |  | Treasury Stock |  | Noncontrolling |  | Total
| Shares |  | Dollars |  | Capital |  | Income (Loss) |  | (Deficit) |  | Shares |  | Dollars |  | Interest |  | Equity
Balance at December 31, 2012 | 35,040,501 |  |  | $ | 350 |  |  | $ | 654,275 |  |  | $ | (9,086 | ) |  | $ | (77,079 | ) |  | (5,463,515 | ) |  | $ | (139,954 | ) |  | $ | 62,243 |  |  | $ | 490,749 |
Net Income | — |  |  | — |  |  | — |  |  | — |  |  | 53,262 |  |  | — |  |  | — |  |  | 18,760 |  |  | 72,022 |
Other Comprehensive Income (Loss) | — |  |  | — |  |  | — |  |  | (1,698 | ) |  | — |  |  | — |  |  | — |  |  | (228 | ) |  | (1,926 | )
Treasury Stock Purchases | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,281,326 | ) |  | (87,620 | ) |  | — |  |  | (87,620 | )
Evercore LP Units Purchased or Converted into Class A Common Stock | 2,913,266 |  |  | 29 |  |  | 28,986 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (21,414 | ) |  | 7,601 |
Equity-based Compensation Awards | 2,818,667 |  |  | 29 |  |  | 100,058 |  |  | — |  |  | — |  |  | 2,600 |  |  | 65 |  |  | 20,365 |  |  | 120,517 |
Shares Issued as Consideration for Acquisitions and Investments | — |  |  | — |  |  | 365 |  |  | — |  |  | — |  |  | 39,341 |  |  | 1,129 |  |  | — |  |  | 1,494 |
Dividends and Equivalents | — |  |  | — |  |  | 5,989 |  |  | — |  |  | (36,079 | ) |  | — |  |  | — |  |  | — |  |  | (30,090 | )
Noncontrolling Interest (Note 15) | — |  |  | — |  |  | 9,560 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (19,149 | ) |  | (9,589 | )
Balance at December 31, 2013 | 40,772,434 |  |  | 408 |  |  | 799,233 |  |  | (10,784 | ) |  | (59,896 | ) |  | (7,702,900 | ) |  | (226,380 | ) |  | 60,577 |  |  | 563,158 |
Net Income | — |  |  | — |  |  | — |  |  | — |  |  | 86,874 |  |  | — |  |  | — |  |  | 20,497 |  |  | 107,371 |
Other Comprehensive Income (Loss) | — |  |  | — |  |  | — |  |  | (9,603 | ) |  | — |  |  | — |  |  | — |  |  | (2,608 | ) |  | (12,211 | )
Treasury Stock Purchases | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,706,666 | ) |  | (142,850 | ) |  | — |  |  | (142,850 | )
Evercore LP Units Purchased or Converted into Class A Common Stock | 1,421,493 |  |  | 14 |  |  | 17,235 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (11,686 | ) |  | 5,563 |
Equity-based Compensation Awards | 4,220,313 |  |  | 42 |  |  | 133,354 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,593 |  |  | 136,989 |
Shares Issued as Consideration for Acquisitions and Investments | — |  |  | — |  |  | 11,073 |  |  | — |  |  | — |  |  | 131,243 |  |  | 4,245 |  |  | 72,344 |  |  | 87,662 |
Dividends and Equivalents | — |  |  | — |  |  | 6,038 |  |  | — |  |  | (44,792 | ) |  | — |  |  | — |  |  | — |  |  | (38,754 | )
Noncontrolling Interest (Note 15) | — |  |  | — |  |  | (16,786 | ) |  | — |  |  | — |  |  | 119,207 |  |  | 3,856 |  |  | 18,235 |  |  | 5,305 |
Balance at December 31, 2014 | 46,414,240 |  |  | 464 |  |  | 950,147 |  |  | (20,387 | ) |  | (17,814 | ) |  | (10,159,116 | ) |  | (361,129 | ) |  | 160,952 |  |  | 712,233 |
Net Income | — |  |  | — |  |  | — |  |  | — |  |  | 42,863 |  |  | — |  |  | — |  |  | 14,827 |  |  | 57,690 |
Other Comprehensive Income (Loss) | — |  |  | — |  |  | — |  |  | (14,152 | ) |  | — |  |  | — |  |  | — |  |  | (3,886 | ) |  | (18,038 | )
Treasury Stock Purchases | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (5,467,172 | ) |  | (283,283 | ) |  | — |  |  | (283,283 | )
Evercore LP Units Purchased or Converted into Class A Common Stock | 585,723 |  |  | 6 |  |  | 11,046 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (12,012 | ) |  | (960 | )
Equity-based Compensation Awards | 2,795,051 |  |  | 28 |  |  | 123,357 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 82,734 |  |  | 206,119 |
Dividends and Equivalents | — |  |  | — |  |  | 6,514 |  |  | — |  |  | (52,840 | ) |  | — |  |  | — |  |  | — |  |  | (46,326 | )
Noncontrolling Interest (Note 15) | — |  |  | — |  |  | 1,331 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (39,951 | ) |  | (38,620 | )
Exercise of Warrants | 5,454,545 |  |  | 54 |  |  | 118,347 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 118,401 |
Balance at December 31, 2015 | 55,249,559 |  |  | $ | 552 |  |  | $ | 1,210,742 |  |  | $ | (34,539 | ) |  | $ | (27,791 | ) |  | (15,626,288 | ) |  | $ | (644,412 | ) |  | $ | 202,664 |  |  | $ | 707,216 |

See Notes to Consolidated Financial Statements.
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EVERCORE PARTNERS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Cash Flows From Operating Activities |  |  |  |  |
Net Income | $ | 57,690 |  |  | $ | 107,371 |  |  | $ | 72,022 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |  |  |  |  |
Net (Gains) Losses on Investments, Marketable Securities and Contingent Consideration | 5,517 |  |  | (2,505 | ) |  | (2,172 | )
Equity Method Investments | 2,818 |  |  | 4,476 |  |  | (1,454 | )
Equity-Based and Other Deferred Compensation | 207,533 |  |  | 111,771 |  |  | 121,608 |
Impairment of Goodwill | 28,500 |  |  | — |  |  | — |
Depreciation, Amortization and Accretion | 29,636 |  |  | 18,773 |  |  | 16,699 |
Bad Debt Expense | 1,314 |  |  | 1,027 |  |  | 2,099 |
Adjustment to Tax Receivable Agreements | — |  |  | — |  |  | (6,905 | )
Deferred Taxes | (3,627 | ) |  | 14,315 |  |  | 20,058 |
Decrease (Increase) in Operating Assets: |  |  |  |  |
Marketable Securities | 556 |  |  | 550 |  |  | 234 |
Financial Instruments Owned and Pledged as Collateral at Fair Value | 46,018 |  |  | (54,032 | ) |  | 65,045 |
Securities Purchased Under Agreements to Resell | 4,726 |  |  | 10,303 |  |  | (19,578 | )
Accounts Receivable | (46,442 | ) |  | (51,166 | ) |  | 1,460 |
Receivable from Employees and Related Parties | (3,937 | ) |  | (6,646 | ) |  | (4,542 | )
Other Assets | (3,903 | ) |  | (7,651 | ) |  | (19,945 | )
(Decrease) Increase in Operating Liabilities: |  |  |  |  |
Accrued Compensation and Benefits | 51,732 |  |  | 27,251 |  |  | 12,435 |
Accounts Payable and Accrued Expenses | 5,418 |  |  | 6,231 |  |  | 258 |
Securities Sold Under Agreements to Repurchase | (50,803 | ) |  | 43,771 |  |  | (45,543 | )
Payables to Employees and Related Parties | 8,704 |  |  | (2,601 | ) |  | 4,451 |
Taxes Payable | 17,850 |  |  | (2,650 | ) |  | (15,591 | )
Other Liabilities | (2,449 | ) |  | (2,616 | ) |  | (1,925 | )
Net Cash Provided by Operating Activities | 356,851 |  |  | 215,972 |  |  | 198,714 |
Cash Flows From Investing Activities |  |  |  |  |
Investments Purchased | (819 | ) |  | (10,944 | ) |  | (3,012 | )
Distributions of Private Equity Investments | 6,821 |  |  | 672 |  |  | 1,300 |
Marketable Securities: |  |  |  |  |
Proceeds from Sales and Maturities | 32,318 |  |  | 34,719 |  |  | 31,106 |
Purchases | (39,101 | ) |  | (28,760 | ) |  | (35,187 | )
Cash Paid for Acquisitions and Deconsolidation of Atalanta Sosnoff, net of Cash Acquired | (5,647 | ) |  | 42,869 |  |  | 218 |
Proceeds from Sale of Business | — |  |  | — |  |  | 1,198 |
Loans Receivable | (3,500 | ) |  | — |  |  | — |
Purchase of Furniture, Equipment and Leasehold Improvements | (16,189 | ) |  | (13,521 | ) |  | (4,487 | )
Net Cash Provided by (Used in) Investing Activities | (26,117 | ) |  | 25,035 |  |  | (8,864 | )
Cash Flows From Financing Activities |  |  |  |  |
Issuance of Noncontrolling Interests | 594 |  |  | 2,135 |  |  | 3,589 |
Distributions to Noncontrolling Interests | (23,723 | ) |  | (10,655 | ) |  | (18,950 | )
Payments Under Tax Receivable Agreement | (11,045 | ) |  | (9,086 | ) |  | (7,651 | )
Cash Paid for Deferred and Contingent Consideration | — |  |  | (2,255 | ) |  | (3,396 | )
Short-Term Borrowing | 45,000 |  |  | 75,000 |  |  | — |
Repayment of Short-Term Borrowing | (45,000 | ) |  | (75,000 | ) |  | — |
Exercise of Warrants, net | 6,416 |  |  | — |  |  | — |
Purchase of Treasury Stock and Noncontrolling Interests | (160,733 | ) |  | (156,242 | ) |  | (102,277 | )
Excess Tax Benefits Associated with Equity-Based Awards | 10,820 |  |  | 35,262 |  |  | 8,979 |
Dividends - Class A Stockholders | (46,132 | ) |  | (38,754 | ) |  | (30,090 | )
Net Cash Provided by (Used in) Financing Activities | (223,803 | ) |  | (179,595 | ) |  | (149,796 | )
Effect of Exchange Rate Changes on Cash | (10,327 | ) |  | (7,705 | ) |  | (1,032 | )
Net Increase in Cash and Cash Equivalents | 96,604 |  |  | 53,707 |  |  | 39,022 |
Cash and Cash Equivalents-Beginning of Period | 352,160 |  |  | 298,453 |  |  | 259,431 |
Cash and Cash Equivalents-End of Period | $ | 448,764 |  |  | $ | 352,160 |  |  | $ | 298,453 |
SUPPLEMENTAL CASH FLOW DISCLOSURE |  |  |  |  |
Payments for Interest | $ | 16,035 |  |  | $ | 13,725 |  |  | $ | 12,807 |
Payments for Income Taxes | $ | 47,820 |  |  | $ | 18,283 |  |  | $ | 57,178 |
Increase (Decrease) in Fair Value of Redeemable Noncontrolling Interest | $ | (1,331 | ) |  | $ | 3,261 |  |  | $ | (12,985 | )
Dividend Equivalents Issued | $ | 6,514 |  |  | $ | 6,038 |  |  | $ | 5,989 |
Receipt of Securities in Settlement of Accounts Receivable | $ | 1,079 |  |  | $ | 2,083 |  |  | $ | 2,278 |
Contingent Consideration Accrued | $ | 13,699 |  |  | $ | 1,979 |  |  | $ | — |
Atalanta Sosnoff Assets Deconsolidated | $ | 2,053 |  |  | $ | — |  |  | $ | — |
Atalanta Sosnoff Liabilities Deconsolidated | $ | 2,074 |  |  | $ | — |  |  | $ | — |
Decrease in Redeemable Noncontrolling Interest from Atalanta Sosnoff Deconsolidation | $ | 2,683 |  |  | $ | — |  |  | $ | — |
Decrease in Noncontrolling Interest from Atalanta Sosnoff Deconsolidation | $ | 16,090 |  |  | $ | — |  |  | $ | — |
Decrease in Goodwill from Atalanta Sosnoff Deconsolidation | $ | 27,274 |  |  | $ | — |  |  | $ | — |
Decrease in Intangible Assets from Atalanta Sosnoff Deconsolidation | $ | 13,924 |  |  | $ | — |  |  | $ | — |
Exchange of Notes Payable as Consideration for Exercise of Warrants | $ | 118,347 |  |  | $ | — |  |  | $ | — |
Purchase of Treasury Stock in Exchange for Notes Issuance and Warrant Proceeds | $ | 123,673 |  |  | $ | — |  |  | $ | — |
Settlement of Contingent Consideration | $ | — |  |  | $ | 7,232 |  |  | $ | 2,494 |
Purchase of Noncontrolling Interest | $ | — |  |  | $ | 7,100 |  |  | $ | — |
Reclassification from Redeemable Noncontrolling Interest to Noncontrolling Interest | $ | — |  |  | $ | 27,477 |  |  | $ | — |
Shares and LP Units Issued as Consideration for Acquisitions and Investments | $ | — |  |  | $ | 79,576 |  |  | $ | — |
Assets Acquired in Acquisitions | $ | — |  |  | $ | 106,848 |  |  | $ | — |
Liabilities Assumed in Acquisitions | $ | — |  |  | $ | 64,864 |  |  | $ | — |
Notes Exchanged for Equity in Subsidiary | $ | — |  |  | $ | — |  |  | $ | 1,042 |

See Notes to Consolidated Financial Statements.
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Note 1 – Organization
Evercore Partners Inc. and subsidiaries (the "Company") is an investment banking and investment management firm, incorporated in Delaware on July 21, 2005 and headquartered in New York, New York. The Company is a holding company which owns a controlling interest in Evercore LP, a Delaware limited partnership ("Evercore LP"). Subsequent to the Company’s initial public offering ("IPO"), the Company became the sole general partner of Evercore LP. The Company operates from its offices and through its affiliates in North America, Europe, South America and Asia.
The Investment Banking business includes the advisory business through which the Company provides advice to clients on significant mergers, acquisitions, divestitures and other strategic corporate transactions, with a particular focus on advising prominent multinational corporations and substantial private equity firms on large, complex transactions. The Company also provides restructuring advice to companies in financial transition, as well as to creditors, shareholders and potential acquirers. In addition, the Company provides its clients with capital markets advice, underwrites securities offerings, raises funds for financial sponsors and provides advisory services focused on secondary transactions for private funds interests. The Investment Banking business also includes the Evercore ISI business through which the Company offers macroeconomic, policy and fundamental equity research and agency-based equity securities trading for institutional investors.
The Investment Management business includes the institutional asset management business through which the Company, directly and through affiliates, manages financial assets for sophisticated institutional investors and provides independent fiduciary services to corporate employee benefit plans and high net-worth individuals, the wealth management business through which the Company provides investment advisory and wealth management services for high net-worth individuals and associated entities, and the private equity business through which the Company, directly and through affiliates, manages private equity funds.
Note 2 – Significant Accounting Policies
Basis of Presentation – The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP").
The consolidated financial statements of the Company are comprised of the consolidation of Evercore LP and Evercore LP’s wholly-owned and majority-owned direct and indirect subsidiaries, including Evercore Group L.L.C. ("EGL"), a registered broker-dealer in the U.S. The Company’s policy is to consolidate all subsidiaries in which it has a controlling financial interest, as well as any variable interest entities ("VIEs") where the Company is deemed to be the primary beneficiary, when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE, except for certain VIEs that qualify for accounting purposes as investment companies. The Company reviews factors, including the rights of the equity holders and obligations of equity holders to absorb losses or receive expected residual returns, to determine if the investment is a VIE. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly or indirectly by the Company. The consolidation analysis is generally performed qualitatively. This analysis, which requires judgment, is performed at each reporting date.
Per the above, the Company has concluded that Evercore Asia Limited ("Evercore Asia"), Evercore Asia (Singapore) PTE. LTD ("Evercore Singapore") and Evercore ISI UK Limited ("Evercore ISI UK") are VIEs pursuant to Accounting Standards Codification ("ASC") No. 810, "Consolidation" ("ASC 810") and that the Company is the primary beneficiary of these VIEs. Specifically, the Company provides financial support through cost plus transfer pricing agreements with these entities, which exposes the Company to losses that are potentially significant to the entities, and has decision making authority that significantly affects the economic performance of the entities. The Company included in its Consolidated Statements of Financial Condition Evercore Asia, Evercore Singapore and Evercore ISI UK assets of $31,100 and liabilities of $10,914 at December 31, 2015 and assets of $10,487 and liabilities of $7,487 at December 31, 2014.
In February 2010, Accounting Standards Update ("ASU") No. 2010-10, "Amendments for Certain Investment Funds," was issued. This ASU defers the application of the revised consolidation rules for a reporting entity’s interest in an entity if certain conditions are met, including if the entity has the attributes of an investment company and is not a securitization or asset-backed financing entity. An entity that qualifies for the deferral will continue to be assessed for consolidation under the overall guidance on VIEs, before its amendment, and other applicable consolidation guidance. Generally, the Company would consolidate those entities when it absorbs a majority of the expected losses or a majority of the expected residual returns, or both, of the entities.
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
For entities (principally funds) that the Company has concluded are not VIEs, the Company then evaluates whether the fund is a partnership or similar entity. If the fund is a partnership or similar entity, the Company evaluates the fund under the partnership consolidation guidance. Pursuant to that guidance, the Company consolidates funds in which it is the general partner and/or manages through a contract, unless presumption of control by the Company can be overcome. This presumption is overcome only when unrelated investors in the fund have the substantive ability to liquidate the fund or otherwise remove the Company as the general partner without cause, based on a simple majority vote of unaffiliated investors, or have other substantive participating rights. If the presumption of control can be overcome, the Company accounts for its interest in the fund pursuant to the equity method of accounting.
All intercompany balances and transactions with the Company’s subsidiaries have been eliminated upon consolidation.
At the time of the formation transaction, the members of Evercore LP (the "Members") received Class A limited partnership units of Evercore LP ("Class A LP Units") in consideration for their contribution of the various entities included in the historical combined financial statements of the Company. The Class A LP Units were subject to vesting requirements and transfer restrictions and are exchangeable on a one-for-one basis for shares of Class A common stock ("Class A Shares"). At December 31, 2013, all Class A LP Units were fully vested. On October 31, 2014, in conjunction with the acquisition of the operating businesses of International Strategy & Investment ("ISI"), the Company issued vested and unvested Class E limited partnership units of Evercore LP ("Class E LP Units") and vested and unvested Class G and H limited partnership interests of Evercore LP ("Class G and H LP Interests"). See Note 4 for further information. The Company accounts for exchanges of LP Units for Class A Shares based on the carrying amounts of the Members’ LP Units immediately before the exchange.
The Company’s interest in Evercore LP is within the scope of ASC 810-20, "Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights". The Company consolidates Evercore LP and records noncontrolling interest for the economic interest in Evercore LP held directly by others, which includes the Members.
Accounts Receivable – Accounts Receivable consists primarily of investment banking fees and expense reimbursements charged to the Company’s clients. The Company records Accounts Receivable net of any allowance for doubtful accounts. The Company maintains an allowance for bad debts to provide coverage for estimated losses from its client receivables. The Company determines the adequacy of the allowance by estimating the probability of loss based on the Company’s analysis of the client’s creditworthiness and specifically reserves against exposure where the Company determines the receivables are impaired, which may include situations where a fee is in dispute or litigation has commenced.
Furniture, Equipment and Leasehold Improvements – Fixed assets, including office equipment, hardware and software and leasehold improvements, are stated at cost, net of accumulated depreciation and amortization. Furniture, equipment and computer hardware and software are depreciated using the straight-line method over the estimated useful lives of the assets, ranging from three to seven years. Leasehold improvements are amortized over the shorter of the term of the lease or the useful life of the asset.
Investment Banking Revenue – The Company earns investment banking fees from clients for providing advisory services on mergers, acquisitions, divestitures, leveraged buyouts, restructurings and similar corporate finance matters. The Company’s Investment Banking services also include services related to securities underwriting, private fund placement services and commissions for agency-based equity trading services and equity research. It is the Company’s accounting policy to recognize revenue when (i) there is persuasive evidence of an arrangement with a client, (ii) fees are fixed or determinable, (iii) the agreed-upon services have been completed and delivered to the client or the transaction or events contemplated in the engagement letter are determined to be substantially completed and (iv) collection is reasonably assured. The Company records Investment Banking Revenue on the Consolidated Statements of Operations for the following:
Advisory Fees – In general, advisory fees are paid at the time the Company signs an engagement letter, during the course of the engagement or when an engagement is completed. In some circumstances, and as a function of the terms of an engagement letter, the Company may receive retainer fees for financial advisory services concurrent with, or soon after, the execution of the engagement letter where the engagement letter will specify a future service period associated with that fee. In such circumstances, these retainer fees are initially recorded as deferred revenue, which is recorded in Other Current Liabilities on the Consolidated Statements of Financial Condition, and subsequently recognized as revenue on the Consolidated Statements of Operations during the applicable time period within which the service is rendered. Revenues related to fairness or valuation opinions are recognized when the opinion has been rendered and delivered to the client and all other requirements for revenue recognition are satisfied. Success fees for advisory services, such as merger and acquisition advice, are recognized when the transaction(s) or event(s) are determined to be completed or substantially completed and all other requirements for
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
revenue recognition are satisfied. In the event the Company were to receive an opinion or success fee in advance of the completion conditions noted above, such fee would initially be recorded as deferred revenue and subsequently recognized as advisory fee revenue when the conditions of completion have been satisfied.
Placement Fees – Placement fee revenues are attributable to capital raising on both a primary and secondary basis. The Company recognizes placement advisory fees at the time of the client’s acceptance of capital or capital commitments in accordance with the terms of the engagement letter.
Underwriting Fees – Underwriting fees are attributable to public and private offerings of equity and debt securities and are recognized when the offering has been deemed to be completed by the lead manager of the underwriting group. When the offering is completed, the Company recognizes the applicable management fee, selling concession and underwriting fee, the latter net of estimated offering expenses.
Commissions and Related Fees – Commissions and Related Fees include commissions received from customers for the execution of agency-based brokerage transactions in listed and over-the-counter equities and are recorded on a trade-date basis or, in the case of payments under commission sharing arrangements, when earned. The Company earns subscription fees for the sales of research. Cash received before the subscription period ends is initially recorded as deferred revenue in Other Current Liabilities on the Consolidated Statements of Financial Condition, and is recognized in Investment Banking Revenue on the Consolidated Statements of Operations ratably over the period in which the related services are rendered.
Taxes collected from customers and remitted to governmental authorities are presented on a net basis on the Consolidated Statements of Operations.
Investment Management Revenue – The Company’s Investment Management business generates revenues from the management of client assets and the private equity funds.
Investment management fees for third-party clients are generally based on the value of the assets under management and any performance fees that may be negotiated with the client. These fees are generally recognized over the period that the related services are provided, based upon the beginning, ending or average value of the assets for the relevant period. Fees paid in advance of services rendered are initially recorded as deferred revenue, which is recorded in Other Current Liabilities on the Consolidated Statements of Financial Condition, and are recognized in Investment Management Revenue on the Consolidated Statements of Operations ratably over the period in which the related service is rendered. Generally, to the extent performance fee arrangements have been negotiated, these fees are earned when the return on assets exceeds certain benchmark returns.
Management fees for private equity funds are contractual and are typically based on committed capital during the private equity funds’ investment period, and on invested capital, thereafter. Management fees are recognized ratably over the period during which services are provided. The management fees may provide for a management fee offset for certain portfolio company fees the Company earns. The Company also records performance fee revenue from the private equity funds when the returns on the private equity funds’ investments exceed certain threshold minimums. These performance fees, or carried interest, are computed in accordance with the underlying private equity funds’ partnership agreements and are based on investment performance over the life of each investment partnership. Historically, the Company recorded performance fee revenue from its managed private equity funds when the private equity funds’ investment values exceeded certain threshold minimums. During 2014, the Company changed its method of recording performance fees such that the Company records performance fees upon the earlier of the termination of the investment fund or when the likelihood of clawback is mathematically improbable. This method is considered the more preferable of the two methods accepted under ASC 605-20-S99-1.
Fees generated for serving as an independent fiduciary and/or trustee are either based on a flat fee, are pre-negotiated with the client or are based on the value of assets under administration. For ongoing engagements, fees are billed quarterly either in advance or in arrears. Fees paid in advance of services rendered are initially recorded as deferred revenue in Other Current Liabilities on the Consolidated Statements of Financial Condition, and are recognized in Investment Management Revenue on the Consolidated Statements of Operations ratably over the period in which the related services are rendered.
Other Revenue, Including Interest and Interest Expense – Other Revenue, Including Interest and Interest Expense is derived primarily from financing transactions. These transactions are principally repurchases and resales of Mexican government securities. Revenue and expenses associated with these transactions are recognized over the term of the repurchase transaction. Other Revenue, Including Interest and Interest Expense also includes interest expense associated with the $120,000 principal amount of senior unsecured notes ("Senior Notes"), the $120,000 new term loan (the "New Loan") and other financing
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
arrangements, as well as income earned on marketable securities and cash deposited with financial institutions and changes in amounts due pursuant to the Company's tax receivable agreements.
Client Expense Reimbursement – In the conduct of its financial advisory service engagements and in advising the private equity funds, the Company receives reimbursement for certain expenses incurred by the Company on behalf of its clients and the funds. Transaction-related expenses, which are billable to clients, are recognized as revenue and recorded in Accounts Receivable on the later of the date of an executed engagement letter or the date the expense is incurred.
Noncontrolling Interest – Noncontrolling interest recorded in the consolidated financial statements of the Company relates to the portions of the subsidiaries not owned by the Company. The Company allocates net income to noncontrolling interests held at Evercore LP and at the operating entity level, where required, by multiplying the relative ownership interest of the noncontrolling interest holders for the period by the net income or loss for the entity which the noncontrolling interest relates. In circumstances where the governing documents of the entity to which the noncontrolling interest relates require special allocations of profits (losses) to the controlling and noncontrolling interest holders, then the net income or loss of these entities will be allocated based on these special allocations.
ASC 810 requires reporting entities to present noncontrolling (minority) interests as equity (as opposed to as a liability or mezzanine equity) and provides guidance on the accounting for transactions between an entity and noncontrolling interests. Noncontrolling Interest is presented as a component of Total Equity on the Consolidated Statements of Financial Condition and below Net Income on the Consolidated Statements of Operations. In addition, there is an allocation of the components of Total Comprehensive Income between controlling interests and noncontrolling interests. Changes in a parent's ownership interest while the parent retains control of its subsidiary are accounted for as equity transactions.
Cash and Cash Equivalents – Cash and Cash Equivalents consist of short-term highly-liquid investments with original maturities of three months or less.
Fair Value of Financial Instruments – The majority of the Company’s assets and liabilities are recorded at fair value or at amounts that approximate fair value. Such assets and liabilities include cash and cash equivalents, investments, marketable securities, financial instruments owned and pledged as collateral, repurchase and reverse repurchase agreements, receivables and payables and accruals. See Note 10 for further information.
Marketable Securities – Marketable Securities include investments in corporate, municipal and other debt securities, as well as investments in readily-marketable equity securities, which are accounted for as available-for-sale under ASC 320-10, "Accounting for Certain Investments in Debt and Equity Securities". These securities are carried at fair value on the Consolidated Statements of Financial Condition. Unrealized gains and losses are reported as net increases or decreases to Accumulated Other Comprehensive Income (Loss), net of tax, while realized gains and losses on these securities are determined using the specific identification method and are included in Other Revenue, Including Interest on the Consolidated Statements of Operations. The readily-marketable debt and equity securities are valued using quoted market prices on applicable exchanges or markets. Marketable Securities also include investments in municipal bonds held at EGL and mutual funds, which are carried at fair value, with changes in fair value recorded in Other Revenues, Including Interest on the Consolidated Statements of Operations. Marketable Securities transactions are recorded as of the trade date.
Financial Instruments Owned and Pledged as Collateral at Fair Value – The Company’s Financial Instruments Owned and Pledged as Collateral at Fair Value consist principally of foreign government obligations, which are recorded on a trade-date basis and are stated at quoted market values. Related gains and losses are reflected in Other Revenue, Including Interest on the Consolidated Statements of Operations. The Company pledges the Financial Instruments Owned and Pledged as Collateral at Fair Value to collateralize certain financing arrangements, which permits the counterparty to pledge the securities.
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase – Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase are treated as collateralized financing transactions. The agreements provide that the transferor will receive substantially the same securities in return at the maturity of the agreement. These transactions are carried at the amounts at which the related securities will be subsequently resold or repurchased, plus accrued interest payable or receivable. As the maturities on these transactions are short-term in nature (i.e. mature on the next business day) and the underlying securities are debt instruments of the Mexican Governments or its agencies, their carrying amounts approximate fair value. The Company periodically assesses the collectability or credit quality related to securities purchased under agreements to resell.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Investments – The Company’s investments include investments in private equity partnerships, the Company’s equity interests in G5 Holdings S.A. ("G5 ǀ Evercore"), ABS Investment Management, LLC ("ABS") and Evercore Pan-Asset Capital Management ("Pan", consolidated on March 15, 2013 and sold on December 3, 2013), which are accounted for under the equity method of accounting and Trilantic Capital Partners ("Trilantic"). On December 31, 2015 the Company deconsolidated the assets and liabilities of Atalanta Sosnoff Capital, LLC ("Atalanta Sosnoff") and will account for its interest as an equity method investment from that date forward.
Private Equity – The investments of private equity funds consist primarily of investments in marketable and non-marketable securities of the portfolio companies. The underlying investments held by the private equity funds are valued based on quoted market prices or estimated fair value if there is no public market. The Company determines fair value of non-marketable securities by giving consideration to a range of factors, including but not limited to, market conditions, operating performance (current and projected) and subsequent financing transactions. Due to the inherent uncertainty in the valuation of these non-marketable securities, estimated values may materially differ from the values that would have been used had a ready market existed for these investments. Investments in publicly-traded securities held by the private equity funds are valued using quoted market prices. The Company recognizes its allocable share of the changes in fair value of the private equity funds’ underlying investments as realized and unrealized gains (losses) within Investment Management Revenue in the Consolidated Statements of Operations.
Affiliates – The Company’s equity interests in G5 ǀ Evercore, ABS and Pan (consolidated on March 15, 2013 and sold on December 3, 2013) include its share of the income (losses) within Income (Loss) from Equity Method Investments, as a component of Income Before Income Taxes, on the Consolidated Statements of Operations. On December 31, 2015 the Company deconsolidated the assets and liabilities of Atalanta Sosnoff and will account for its interest as an equity method investment from that date forward. See Note 4 for further information.
The Company assesses its Equity Method Investments annually for impairment, or more frequently if circumstances indicate impairment may have occurred.
The Company also maintains an investment in Trilantic. See Note 9 for further information.
Goodwill and Intangible Assets – Goodwill is tested for impairment annually, as of November 30 th, or more frequently if circumstances indicate impairment may have occurred. The Company assesses whether any goodwill recorded by its applicable reporting unit is impaired by comparing the fair value of each reporting unit with its respective carrying amount. For acquired businesses, contingent consideration is recognized and measured at fair value as of the acquisition date and at subsequent reporting periods.
Intangible assets with finite lives are amortized over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable as prescribed by ASC 360, "Property, Plant, and Equipment" ("ASC 360").
The Company tests goodwill for impairment at the reporting unit level. In determining the fair value for each reporting unit the Company utilizes either a market multiple approach or a discounted cash flow methodology based on the adjusted cash flows from operations, or a weighted combination of both a market multiple approach and discounted cash flow methodology. The market multiple approach includes applying the average earnings multiples of comparable public companies for their respective reporting unit multiplied by the forecasted earnings of the respective reporting unit to yield an estimate of fair value. The discounted cash flow methodology begins with the forecasted adjusted cash flows from each of the reporting units and uses a discount rate that reflects the weighted average cost of capital adjusted for the risks inherent in the future cash flows.
See Note 4 for further information.
Compensation and Benefits – Compensation includes salaries, bonuses (discretionary awards and guaranteed amounts), severance, deferred cash and share-based compensation. Cash bonuses are accrued over the respective service periods to which they relate and deferred cash and share-based bonuses are expensed prospectively over their requisite service period.
Share-Based Payments –The Company accounts for share-based payments in accordance with ASC 718, "Compensation – Stock Compensation" ("ASC 718"). See Note 17 for further information.
Compensation expense recognized pursuant to share-based awards is based on the grant date fair value of the award. The fair value (as measured on the grant date) of awards that vest from one to five years ("Service-based Awards") is amortized over the vesting periods or requisite service periods as required under ASC 718, however, the vesting of some Service-based Awards
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(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
will accelerate upon the occurrence of certain events. The Company amortizes the grant-date fair value of share-based compensation awards made to employees, who are or will become retirement eligible prior to the stated vesting date, over the expected substantive service period. For the purposes of calculating diluted net income per share attributable to Evercore Partners Inc. common shareholders, unvested Service-based Awards are included in the diluted weighted average Class A Shares outstanding using the treasury stock method. Once vested, restricted stock units ("RSUs") and restricted stock are included in the basic and diluted weighted average Class A Shares outstanding. Expense relating to RSUs and restricted stock is charged to Employee Compensation and Benefits within the Consolidated Statements of Operations.
Compensation expense is recognized pursuant to performance-based awards if it is probable that the performance condition will be achieved. See Note 17 for a discussion of the awards issued in conjunction with the Company's acquisition of the operating businesses of ISI.
Awards classified as liabilities as required under ASC 718, such as cash settled share-based awards, are re-measured at fair value at each reporting period.
Foreign Currency Translation – Foreign currency assets and liabilities have been translated at rates of exchange prevailing at the end of the periods presented. Income and expenses transacted in foreign currency have been translated at average monthly exchange rates during the period. Translation gains and losses are included in the foreign currency translation adjustment as a component of Accumulated Other Comprehensive Income (Loss) in the Consolidated Statements of Changes in Equity and Other Comprehensive Income (Loss) in the Consolidated Statements of Comprehensive Income. Exchange gains and losses arising from translating intercompany balances of a long-term investment nature are recorded in the foreign currency translation account while transactional exchange gains and losses are included in Other Revenue, Including Interest on the Consolidated Statements of Operations.
Income Taxes –The Company accounts for income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities, as disclosed in Note 20.
Deferred income taxes reflect the net tax effects of temporary differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. Such temporary differences are reflected on the Company’s Consolidated Statements of Financial Condition as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. Significant management judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against the Company’s net deferred tax assets.
The Company adopted ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17") prospectively as of December 31, 2015 and changed its presentation of deferred income tax assets and liabilities on its consolidated statement of financial condition such that the Company classifies all deferred income tax assets and liabilities as noncurrent. Historically, the Company presented deferred income tax assets and liabilities as current and noncurrent on the Consolidated Statements of Financial Condition. This change in accounting policy had no effect on the prior period information included on the Consolidated Statements of Financial Condition in this Annual Report on Form 10-K, or the Company’s 2014 Annual Report on Form 10-K.
ASC 740 provides a benefit recognition model with a two-step approach consisting of "more-likely-than-not" recognition criteria, and a measurement attribute that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. ASC 740 also requires the recognition of liabilities created by differences between tax positions taken in a tax return and amounts recognized in the financial statements. See Note 20 for further information.
Note 3 – Recent Accounting Pronouncements
ASU 2014-08 – In April 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" ("ASU 2014-08"). ASU 2014-08 provides amendments to ASC No. 205, "Presentation of Financial Statements," and ASC 360, which change the requirements for reporting discontinued operations. The amendments in this update improve the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. The amendments also require expanded disclosures for
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(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
discontinued operations and also require an entity to disclose the pretax profit or loss of an individually significant component of an entity that does not qualify for discontinued operations reporting. The amendments in this update are effective prospectively during interim and annual periods beginning after December 15, 2014, with early adoption permitted. The adoption of ASU 2014-08 did not have a material impact on the Company’s financial condition, results of operations and cash flows, or disclosures thereto.
ASU 2014-09 – In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). ASU 2014-09 provides amendments to ASC No. 605, "Revenue Recognition" and creates ASC No. 606, "Revenue from Contracts with Customers," which changes the requirements for revenue recognition and amends the disclosure requirements. In August 2015, the FASB issued ASU No. 2015-14, "Deferral of the Effective Date," which provides amendments that defer the effective date of ASU 2014-09 by one year. The amendments in this update are effective either retrospectively to each prior reporting period presented, or as a cumulative-effect adjustment as of the date of adoption, during interim and annual periods beginning after December 15, 2017, with early adoption permitted beginning after December 15, 2016. The Company is currently assessing the impact of the adoption of this update on the Company's financial condition, results of operations and cash flows, or disclosures thereto.
ASU 2014-11 – In June 2014, the FASB issued ASU No. 2014-11, "Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures" ("ASU 2014-11"). ASU 2014-11 provides amendments to ASC No. 806, "Transfers and Servicing," which expand secured borrowing accounting for certain repurchase agreements and require that in a repurchase financing arrangement the repurchase agreement be accounted for separately from the initial transfer of the financial asset. The amendments also require additional disclosures for certain transactions accounted for as sale and repurchase agreements, and for securities lending transactions, and repurchase-to-maturity transactions accounted for as secured borrowings. The amendments in this update for the additional disclosures for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions accounted for as secured borrowings are effective prospectively during annual periods beginning after December 15, 2014 and interim periods beginning after March 15, 2015, and all other amendments in this update are effective prospectively during interim and annual periods beginning after December 15, 2014, with early adoption not permitted. The adoption of ASU 2014-11 did not have a material impact on the Company’s financial condition, results of operations and cash flows, or disclosures thereto.
ASU 2014-12 – In June 2014, the FASB issued ASU No. 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period" ("ASU 2014-12"). ASU 2014-12 provides amendments to ASC No. 718, "Compensation - Stock Compensation," which clarify the guidance for whether to treat a performance target that could be achieved after the requisite service period as a performance condition that affects vesting or as a nonvesting condition that affects the grant-date fair value of an award. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The amendments in this update are effective either prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter, during interim and annual periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the adoption of this update on the Company's financial condition, results of operations and cash flows, or disclosures thereto.
ASU 2014-17 – In November 2014, the FASB issued ASU No. 2014-17, "Pushdown Accounting" ("ASU 2014-17"). ASU 2014-17 provides amendments to ASC No. 805, "Business Combinations," which provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The amendments in this update were effective on November 18, 2014. The adoption of ASU 2014-17 did not have a material impact on the Company’s financial condition, results of operations and cash flows, or disclosures thereto.
ASU 2015-01 – In January 2015, the FASB issued ASU No. 2015-01, "Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items" ("ASU 2015-01"). ASU 2015-01 provides amendments to ASC No. 225-20, "Income Statement - Extraordinary and Unusual Items," which eliminate the concept of extraordinary items. The amendments in this update are effective either prospectively or retrospectively during interim and annual periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the adoption of this update on the Company's financial condition, results of operations and cash flows, or disclosures thereto.
ASU 2015-02 - In February 2015, the FASB issued ASU No. 2015-02, "Amendments to the Consolidation Analysis" ("ASU 2015-02"). ASU 2015-02 provides amendments to ASC 810, which include the following: 1. Modify the
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(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, 2. Eliminate the presumption that a general partner should consolidate a limited partnership, 3. Affect the consolidation analysis of reporting entities that are involved with VIEs, and 4. Provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The amendments in this update are effective during interim and annual periods beginning after December 15, 2015, with early adoption permitted, and may be applied retrospectively or using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. The Company is currently assessing the impact of the adoption of this update on the Company's financial condition, results of operations and cash flows, or disclosures thereto.
ASU 2015-05 - In April 2015, the FASB issued ASU No. 2015-05, "Customer's Accounting for Fees Paid in a Cloud Computing Arrangement" ("ASU 2015-05"). ASU 2015-05 provides amendments to ASC No. 350, "Intangibles - Goodwill and Other," Subtopic 350-40, "Internal-Use Software" which help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement and determine whether an arrangement includes the sale or license of software. The amendments in this update are effective either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively during interim and annual periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the adoption of this update on the Company's financial condition, results of operations and cash flows, or disclosures thereto.
ASU 2015-16 - In September 2015, the FASB issued ASU No. 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments" ("ASU 2015-16"). ASU 2015-16 provides amendments to ASC No. 805, "Business Combinations," which simplify the accounting for adjustments made to provisional amounts recognized in a business combination by eliminating the requirement to retrospectively account for those adjustments and require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments also require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments in this update are effective prospectively during interim and annual periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the adoption of this update on the Company's financial condition, results of operations and cash flows, or disclosures thereto.
ASU 2015-17 - In November 2015, the FASB issued ASU 2015-17. ASU 2015-17 provides amendments to ASC No. 740, "Income Taxes," which simplify the presentation of deferred income taxes by eliminating the requirement to separate deferred income tax assets and liabilities into current and noncurrent amounts in a classified statement of financial position and requiring deferred tax assets and liabilities to be classified as noncurrent in a classified statement of financial position. The amendments in this update are effective either prospectively or retrospectively during interim and annual periods beginning after December 15, 2016, with early adoption permitted. The Company adopted ASU 2015-17 prospectively as of December 31, 2015 and changed its presentation of deferred income tax assets and liabilities on its consolidated statement of financial condition such that the Company classifies all deferred income tax assets and liabilities as noncurrent. This change had no effect on the prior period information included on the Consolidated Statements of Financial Condition in this Annual Report on Form 10-K, or the Company’s 2014 Annual Report on Form 10-K.
ASU 2016-01 - In January 2016, the FASB issued ASU No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"). ASU 2016-01 provides amendments to ASC No. 740, "Financial Instruments," which changes the requirements for certain aspects of recognition, measurement and presentation of financial assets and liabilities and amends the disclosure requirements. The amendments in this update should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values are effective prospectively during interim and annual periods beginning after December 15, 2017, with early adoption not permitted. The Company is currently assessing the impact of the adoption of this update on the Company's financial condition, results of operations and cash flows, or disclosures thereto.
Note 4 – Business Changes and Developments
Atalanta Sosnoff - On December 31, 2015, the Operating Agreement of Atalanta Sosnoff was amended such that, following the amendment, the Company is entitled to one of the three seats on the Management Committee of Atalanta Sosnoff, which is the governing committee with decision making power over Atalanta Sosnoff’s operations (previously the Company held three out of five seats on the Management Committee). In addition, Atalanta Sosnoff exchanged the profits interests held by key employees for Series A-3 and A-4 Capital Interests. The Series A-4 Capital Interests remain profits interests for
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(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
accounting purposes since they entitle the holder to distributions of future profits and are subject to forfeiture. The Company continues to own Series A-1 Capital Interests, representing a 49% economic interest. Excluding the remaining profits interests, the Company’s equity interest in Atalanta Sosnoff is 56.3% at December 31, 2015.
The amendments give the Company a noncontrolling voting interest in the Management Committee of Atalanta Sosnoff. The Management Committee of Atalanta Sosnoff controls the operations of Atalanta Sosnoff, including actions such as the appointment and termination of key management members of Atalanta Sosnoff, the approval of Atalanta Sosnoff’s budget as well as any material expenditure outside of its budget, the launch of new products or material changes in the pricing of existing products, and entering or exiting lines of business. Responsibility for the day-to-day operations remains with the management of Atalanta Sosnoff, including managing client relationships and making discretionary investment decisions. The Company, through the supermajority voting rights of the Management Committee, retains customary protective rights over specified matters that may arise outside of the ordinary course of business and/or where the probability of occurrence is remote.
As a result of the above amendments, the Company has deconsolidated the assets and liabilities of Atalanta Sosnoff of $4,726 and $2,074, respectively, at December 31, 2015, and will account for its interest in Atalanta Sosnoff as an equity method investment. See Note 9 for further information. Furthermore, this resulted in a decrease in Goodwill in the Company’s Institutional Asset Management reporting unit, in the Investment Management segment, of $27,274, as well as a decrease in Intangible Assets of $13,924, Noncontrolling Interest of $16,090 and Redeemable Noncontrolling Interest of $2,683. In addition, the amendments resulted in a charge related to the conversion of certain of Atalanta Sosnoff’s profits interests held by key employees to equity of $6,333 and a loss on deconsolidation of $812, each included in Special Charges on the Consolidated Statement of Operations.
Kuna & Co. KG - On July 2, 2015, the Company acquired a 100% interest in Kuna & Co. KG, a Frankfurt-based investment banking advisory boutique, for $8,400. The Company’s consideration for this transaction included the payment of €3,000, or $3,335, of cash at closing, as well as deferred cash consideration of €2,000, or $2,223, payable €500 on each of the four anniversary dates of the closing beginning in 2017, and contingent cash consideration which will be settled at various dates through 2020. The contingent consideration has a fair value of $2,221 as of December 31, 2015. Payment of the contingent consideration is dependent on the business meeting certain revenue performance targets. This transaction resulted in the Company recognizing goodwill of $5,476 and intangible assets relating to advisory backlog of $2,900, recognized in the Investment Banking Segment. The intangible assets are being amortized over an estimated useful life of one year. The Company recognized $2,211 of amortization expense related to these intangible assets for the year ended December 31, 2015. The Company did not consider the acquisition of Kuna & Co. KG to be significant to its financial condition, results of operations or cash flows.
International Strategy & Investment - On October 31, 2014, the Company completed its acquisition of all of the outstanding equity interests of the operating businesses of ISI, a leading independent research-driven equity sales and agency trading firm, as well as the noncontrolling interest in the Company's Institutional Equities business that it did not already own. Following the closing of the transactions, the Company combined ISI's business with the Company's existing Institutional Equities business within the Investment Banking segment. See below for a discussion of the Company's acquisition of the portion of the Company's Institutional Equities business that it did not already own.
The Company's acquisition of ISI had a purchase price of $90,234. The terms of the Company’s acquisition included consideration in the form of noncontrolling interests, specifically partnership interests of Evercore LP, of which a value of $62,614 was reflected in the purchase price of the acquisition. This consideration included 947 Class E LP Units that were vested and exchangeable into Class A Shares of the Company on a one-for-one basis and an allocation of the value, attributed to pre-combination service, of 710 Class E LP Units that were unvested and vest ratably on October 31, 2015, 2016 and 2017 and become exchangeable once vested, subject to continued employment with the Company. The purchase price of the acquisition also included the Company's assumption of a subordinated borrowing arrangement with a value of $22,550 and other long-term liabilities with a value of $5,070.
A portion of the consideration issued by the Company was Evercore LP units and interests which will be treated as compensation going forward, including 710 Class E LP Units, an allocation of the value, attributed to post-combination service, of an additional 710 Class E LP Units, as well as 1,078 Class G LP Interests and 4,095 Class H LP Interests. Certain of these units/interests are vested and are subject to clawback and/or forfeiture pursuant to liquidated damages provisions and, in the case of Class G and H LP Interests, the achievement of certain earnings and operating margin targets. In addition, unvested units/interests are subject to continued employment and, in the case of Class G and H LP Interests, the achievement of certain earnings and operating margin targets. See Note 17 for further information.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
In conjunction with the Company’s acquisition of the operating businesses of ISI, the Company purchased, at fair value, the noncontrolling interest in the Company's Institutional Equities business that it did not already own. The Company purchased these interests, for cash of $11,086, from employees who were exiting the Institutional Equities business. The sellers of the Institutional Equities business, who did not receive cash, received 199 vested and 17 unvested Class E LP Units that are exchangeable on a one-for-one basis into Class A Shares of the Company subject to timing and other limitations, and 57 vested Class G LP Interests and 217 vested Class H LP Interests in Evercore LP. These interests will become exchangeable into Class A Shares of the Company subject to certain performance requirements that are similar to the interests issued to the sellers of ISI.
This transaction resulted in the Company recognizing goodwill of $29,638 and intangible assets of $47,320, recognized in the Investment Banking Segment. The intangible assets include client relationships, trade names and favorable leases with values of $40,000, $2,000 and $5,320, respectively, which are being amortized over estimated useful lives of five years, three years and seven years, respectively. The Company recognized $9,428 and $1,571 of amortization expense related to these intangible assets for the years ended December 31, 2015 and 2014, respectively.
Other Acquisitions - During the third quarter of 2014, the Company acquired a 100% interest in a boutique advisory business for $6,900. The Company’s consideration for this transaction included the issuance of 72 Class A LP Units at closing and contingent consideration. The contingent consideration has a fair value of $6,765 as of December 31, 2015 and will be settled in the first quarter of 2017, based on the business meeting certain performance targets. This transaction resulted in the Company recognizing goodwill of $3,401 and intangible assets relating to advisory backlog and client relationships of $2,450 and $1,050, respectively, recognized in the Investment Banking Segment. The intangible assets are being amortized over estimated useful lives of two years. The Company recognized $1,983 and $877 of amortization expense related to these intangible assets for the years ended December 31, 2015 and 2014, respectively.
Goodwill and Intangible Assets
Goodwill associated with the Company’s acquisitions is as follows:

| Investment Banking |  | Investment Management |  | Total
Balance at December 31, 2013 | $ | 87,028 |  |  | $ | 102,246 |  |  | $ | 189,274 |
Acquisitions | 33,039 |  |  | — |  |  | 33,039 |
Foreign Currency Translation and Other | (6,060 | ) |  | 1,979 |  |  | (4,081 | )
Balance at December 31, 2014 | 114,007 |  |  | 104,225 |  |  | 218,232 |
Acquisitions | 5,476 |  |  | — |  |  | 5,476 |
Impairment of Goodwill | — |  |  | (28,500 | ) |  | (28,500 | )
Deconsolidation of Atalanta Sosnoff | — |  |  | (27,274 | ) |  | (27,274 | )
Foreign Currency Translation and Other | (4,207 | ) |  | 2,734 |  |  | (1,473 | )
Balance at December 31, 2015: |  |  |  |  |  |  |  |
Goodwill | 115,276 |  |  | 79,685 |  |  | 194,961 |
Accumulated Impairment Losses | — |  |  | (28,500 | ) |  | (28,500 | )
| $ | 115,276 |  |  | $ | 51,185 |  |  | $ | 166,461 |

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Intangible assets associated with the Company’s acquisitions are as follows:

| December 31, 2015
| Gross Carrying Amount |  | Accumulated Amortization
| Investment Banking |  | Investment Management |  | Total |  | Investment Banking |  | Investment Management |  | Total
Client Related | $ | 50,700 |  |  | $ | 6,130 |  |  | $ | 56,830 |  |  | $ | 17,201 |  |  | $ | 3,391 |  |  | $ | 20,592 |
Non-compete/Non-solicit Agreements | — |  |  | 169 |  |  | 169 |  |  | — |  |  | 108 |  |  | 108 |
Other | 5,320 |  |  | 445 |  |  | 5,765 |  |  | 887 |  |  | 167 |  |  | 1,054 |
Total | $ | 56,020 |  |  | $ | 6,744 |  |  | $ | 62,764 |  |  | $ | 18,088 |  |  | $ | 3,666 |  |  | $ | 21,754 |
| December 31, 2014
| Gross Carrying Amount |  | Accumulated Amortization
| Investment Banking |  | Investment Management |  | Total |  | Investment Banking |  | Investment Management |  | Total
Client Related | $ | 47,800 |  |  | $ | 45,830 |  |  | $ | 93,630 |  |  | $ | 4,006 |  |  | $ | 27,110 |  |  | $ | 31,116 |
Non-compete/Non-solicit Agreements | 135 |  |  | 1,949 |  |  | 2,084 |  |  | 121 |  |  | 1,709 |  |  | 1,830 |
Other | 5,320 |  |  | 2,245 |  |  | 7,565 |  |  | 127 |  |  | 662 |  |  | 789 |
Total | $ | 53,255 |  |  | $ | 50,024 |  |  | $ | 103,279 |  |  | $ | 4,254 |  |  | $ | 29,481 |  |  | $ | 33,735 |

The decrease in the gross carrying amount and accumulated amortization of intangible assets above includes a decrease of $43,280 and $29,356, respectively, related to the deconsolidation of the assets and liabilities of Atalanta Sosnoff.
Expense associated with the amortization of intangible assets was $17,458, $8,007 and $7,994 for the years ended December 31, 2015, 2014 and 2013, respectively.
Based on the intangible assets above, as of December 31, 2015, annual amortization of intangibles for each of the next five years is as follows:

2016 | $ | 11,680 |
2017 | $ | 9,833 |
2018 | $ | 9,201 |
2019 | $ | 7,868 |
2020 | $ | 1,182 |

At November 30, 2015, in accordance with ASC 350, "Intangibles - Goodwill and Other" ("ASC 350"), we performed our annual Goodwill impairment assessment. We concluded that the fair value of our reporting units substantially exceeded their carrying values as of November 30, 2015, with the exception of our Institutional Asset Management reporting unit, which exceeded its carrying value by greater than 15% as of November 30, 2015.
During the third quarter of 2015, the Institutional Asset Management reporting unit was impacted by adverse market and operating conditions, including a decline in AUM that was greater than anticipated at the time of the Company’s previous Step 1 impairment assessment, investment performance below benchmarks and lower market multiples for asset managers in response to market volatility during the third quarter. As a result, the Company determined that the Step 1 impairment assessment criteria were satisfied, as contemplated by ASC 350, for the goodwill in its Institutional Asset Management reporting unit as of August 31, 2015.
The amount of Goodwill allocated to the Institutional Asset Management reporting unit was $94,700 as of August 31, 2015, of which $27,271 was related to noncontrolling interest. In determining the fair value of this reporting unit, the Company utilized both a market multiple approach and a discounted cash flow methodology based on the adjusted cash flows from operations. The market multiple approach included applying the average earnings multiples of comparable public companies, multiplied by the forecasted earnings of the reporting unit, to yield an estimate of fair value. The discounted cash flow
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
methodology began with the forecasted cash flows of the reporting unit and applied a discount rate of 15%, which reflected the weighted average cost of capital adjusted for the risks inherent in the future cash flows. The forecast inherent in the valuation assumes a stabilization of AUM flows by the end of 2015, with AUM from client flows beginning to increase in the first half of 2016 and, over the longer term, assumes a compound annual growth rate in revenues of 9% from the trailing twelve month period ended August 31, 2015.
As a result of the above analysis, the Company determined that the fair value of the Institutional Asset Management reporting unit was less than its carrying value as of August 31, 2015. Accordingly, during the third quarter of 2015, the Company began a Step 2 impairment assessment, which it completed during the fourth quarter of 2015. The Company recorded a goodwill impairment charge of $28,500 in the Investment Management segment, which is included within Special Charges on the Consolidated Statement of Operations for the year ended December 31, 2015. This charge resulted in an impact of $9,785 on Net Income Attributable to Evercore Partners Inc. (after adjustments for noncontrolling interest and income taxes). The Company concluded that there was no impairment of Intangible Assets during the year ended December 31, 2015.
The Company recorded impairment charges of $2,888 for Goodwill and Intangible Assets during the year ended December 31, 2013. During December 2013, the founder and key member of management of Morse, Williams and Company, Inc. left the Company pursuant to a separation agreement, which among other provisions, allowed him to solicit a limited number of former clients without violating his post-employment restrictive covenant agreements. As a result, the Company experienced an outflow of client assets, and the Company performed a Step 1 impairment assessment under ASC 360 for the identifiable intangible assets that the Company recorded related to Client Relationships from the acquisition of Morse, Williams and Company, Inc., which were recognized in the Investment Management segment. The Company determined that the recoverability of the intangible assets would not be achieved and recorded an impairment charge of $170 within Special Charges on the Company's Consolidated Statement of Operations for the year ended December 31, 2013. Further, during 2013, the Company sold its interest in Pan, resulting in an impairment charge related to goodwill of $2,718 within Income (Loss) from Discontinued Operations on the Company’s Consolidated Statement of Operations for the year ended December 31, 2013.
Note 5 – Acquisition and Transition Costs and Special Charges
Acquisition and Transition Costs
The Company recognized $4,890, $5,828 and $58 for the years ended December 31, 2015, 2014 and 2013, respectively, as Acquisition and Transition Costs incurred in connection with acquisitions and other ongoing business development initiatives. These costs are primarily comprised of professional fees for legal and other services. In addition, in 2015, the Company incurred costs related to transitioning ISI’s infrastructure, including certain regulatory settlements.
Special Charges
The Company recognized $41,144 for the year ended December 31, 2015, as Special Charges incurred primarily related to an impairment charge of $28,500 associated with the impairment of goodwill in the Company's Institutional Asset Management reporting unit and charges of $7,145 related to the restructuring of our investment in Atalanta Sosnoff, primarily related to the conversion of certain of Atalanta Sosnoff’s profits interests held by management to equity interests. Special Charges for the year ended December 31, 2015 also included a charge of $2,151 for separation benefits and costs associated with the termination of certain contracts within the Company’s Evercore ISI business as well as $3,348 for the finalization of a matter associated with the wind-down of the Company’s U.S. Private Equity business. See Note 4 for further information.
The Company recognized $4,893 for the year ended December 31, 2014, as Special Charges incurred related to separation benefits and certain exit costs related to combining the equities business upon the ISI acquisition during 2014 and a provision recorded in 2014 against contingent consideration due on the 2013 disposition of Pan. The Company recognized $170 for the year ended December 31, 2013, as Special Charges incurred related to the write-off of client-related intangible assets in Evercore Wealth Management ("EWM").
Note 6 – Related Parties
The Company remits payment for expenses on behalf of the private equity funds and is reimbursed accordingly. For the years ended December 31, 2015, 2014 and 2013, the Company disbursed $1,795, $1,282 and $1,218, respectively, on behalf of these entities.
Investment Management Revenue includes income from related parties earned from the Company’s private equity funds for portfolio company fees, management fees, expense reimbursements and realized and unrealized gains and losses of private
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
equity fund investments. Total Investment Management revenues from related parties amounted to $8,876, $10,302 and $11,557 for the years ended December 31, 2015, 2014 and 2013, respectively.
Investment Banking Revenue includes advisory fees earned from clients that have a Senior Managing Director as a member of their Board of Directors of $1,251 and $14,090 for the years ended December 31, 2014 and 2013, respectively.
Other Assets on the Consolidated Statements of Financial Condition includes the long-term portion of loans receivable from certain employees of $6,967 and $10,484 as of December 31, 2015 and 2014, respectively.
As of December 31, 2015, the Company had $22,550 in subordinated borrowings, principally with an executive officer of the Company. See Note 12 for further information.
Receivable from Employees and Related Parties on the Consolidated Statements of Financial Condition consisted of the following at December 31, 2015 and 2014:

| December 31,
| 2015 |  | 2014
Advances to Employees | $ | 17,344 |  |  | $ | 14,613 |
Personal Expenses Paid on Behalf of Employees and Related Parties | 144 |  |  | 94 |
Receivable from Affiliates | 1,266 |  |  | 1,589 |
Reimbursable Expenses Due From Portfolio Companies of the Company's Private Equity Funds | 213 |  |  | 215 |
Reimbursable Expenses Relating to the Private Equity Funds | 2,222 |  |  | 816 |
Receivable from Employees and Related Parties | $ | 21,189 |  |  | $ | 17,327 |

Payable to Employees and Related Parties on the Consolidated Statements of Financial Condition consisted of the following at December 31, 2015 and 2014:

| December 31,
| 2015 |  | 2014
Board of Director Fees | $ | 200 |  |  | $ | 215 |
Amounts Due to UK Members | 16,554 |  |  | 7,832 |
Amounts Due Pursuant to Tax Receivable Agreements (a) | 11,638 |  |  | 10,828 |
Payable to Employees and Related Parties | $ | 28,392 |  |  | $ | 18,875 |

(a) | Relates to the current portion of the Member exchange of Class A LP Units for Class A Shares. The long-term portion of $186,036 and $191,253 is disclosed in Amounts Due Pursuant to Tax Receivable Agreements on the Consolidated Statements of Financial Condition at December 31, 2015 and 2014, respectively.

Note 7 – Marketable Securities
The amortized cost and estimated fair value of the Company’s Marketable Securities as of December 31, 2015 and 2014 were as follows:

| December 31, 2015 |  | December 31, 2014
| Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Securities Investments | $ | 6,463 |  |  | $ | 10 |  |  | $ | 2,523 |  |  | $ | 3,950 |  |  | $ | 6,354 |  |  | $ | 11 |  |  | $ | 2,173 |  |  | $ | 4,192 |
Debt Securities Carried by EGL | 37,404 |  |  | 94 |  |  | 8 |  |  | 37,490 |  |  | 28,014 |  |  | 80 |  |  | 3 |  |  | 28,091 |
Mutual Funds | 2,291 |  |  | 155 |  |  | 99 |  |  | 2,347 |  |  | 4,765 |  |  | 1,053 |  |  | 116 |  |  | 5,702 |
Total | $ | 46,158 |  |  | $ | 259 |  |  | $ | 2,630 |  |  | $ | 43,787 |  |  | $ | 39,133 |  |  | $ | 1,144 |  |  | $ | 2,292 |  |  | $ | 37,985 |

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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Scheduled maturities of the Company’s available-for-sale debt securities within the Securities Investments portfolio as of December 31, 2015 and 2014 were as follows:

| December 31, 2015 |  | December 31, 2014
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Due within one year | $ | 204 |  |  | $ | 204 |  |  | $ | 303 |  |  | $ | 305 |
Due after one year through five years | 1,537 |  |  | 1,545 |  |  | 1,229 |  |  | 1,236 |
Due after five years through 10 years | — |  |  | — |  |  | 100 |  |  | 101 |
Total | $ | 1,741 |  |  | $ | 1,749 |  |  | $ | 1,632 |  |  | $ | 1,642 |

Since the Company has the ability and intent to hold available-for-sale securities until a recovery of fair value is equal to an amount approximating its amortized cost, which may be at maturity, and has not incurred credit losses on its securities, it does not consider such unrealized loss positions to be other-than-temporarily impaired at December 31, 2015.
Securities Investments
Securities Investments include equity and debt securities, which are classified as available-for-sale securities within Marketable Securities on the Consolidated Statements of Financial Condition. These securities are stated at fair value with unrealized gains and losses included in Accumulated Other Comprehensive Income (Loss) and realized gains and losses included in earnings. The Company had net realized gains (losses) of ($47), $856 and ($45) for the years ended December 31, 2015, 2014 and 2013, respectively.
Debt Securities Carried by EGL
EGL invests in a fixed income portfolio consisting primarily of municipal bonds. These securities are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest, on the Consolidated Statements of Operations, as required for broker-dealers in securities. The Company had net realized and unrealized gains (losses) of ($556), ($550) and ($234) for the years ended December 31, 2015, 2014 and 2013, respectively.
Mutual Funds
The Company invests in a portfolio of mutual funds as an economic hedge against the Company’s deferred compensation program. See Note 17 for further information. These securities are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest, on the Consolidated Statements of Operations. The Company had net realized and unrealized gains (losses) of ($26), $138 and $1,344 for the years ended December 31, 2015, 2014 and 2013, respectively.
Note 8 – Financial Instruments Owned and Pledged as Collateral at Fair Value, Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase
The Company, through Evercore Casa de Bolsa, S.A. de C.V. ("ECB"), enters into repurchase agreements with clients seeking overnight money market returns whereby ECB transfers to the clients Mexican government securities in exchange for cash and concurrently agrees to repurchase the securities at a future date for an amount equal to the cash exchanged plus a stipulated premium or interest factor. ECB deploys the cash received from, and acquires the securities deliverable to, clients under these repurchase arrangements by purchasing securities in the open market, which the Company reflects as Financial Instruments Owned and Pledged as Collateral at Fair Value on the Consolidated Statements of Financial Condition, or by entering into reverse repurchase agreements with unrelated third parties. The Company accounts for these repurchase and reverse repurchase agreements as collateralized financing transactions, which are carried at their contract amounts, which approximate fair value given that the contracts mature the following business day. The Company records a liability on its Consolidated Statements of Financial Condition in relation to repurchase transactions executed with clients as Securities Sold Under Agreements to Repurchase. The Company records as assets on its Consolidated Statements of Financial Condition, Financial Instruments Owned and Pledged as Collateral at Fair Value (where the Company has acquired the securities deliverable to clients under these repurchase arrangements by purchasing securities in the open market) and Securities Purchased Under Agreements to Resell (where the Company has acquired the securities deliverable to clients under these repurchase agreements by entering into reverse repurchase agreements with unrelated third parties). These Mexican government securities had an estimated average time to maturity of approximately 0.9 years, as of December 31, 2015, and are pledged as collateral against repurchase agreements. Generally, collateral is posted equal to the contract value at inception and is subject to
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
market changes. These repurchase agreements are primarily with institutional customer accounts managed by ECB and permit the counterparty to pledge the securities.
ECB has procedures in place to monitor the daily risk limits for positions taken, as well as the credit risk based on the collateral pledged under these agreements against their contract value from inception to maturity date. The daily risk measure is Value at Risk ("VaR"), which is a statistical measure, at a 98% confidence level, of the potential daily losses from adverse market movements in an ordinary market environment based on a historical simulation using the prior year’s historical data. ECB’s Risk Management Committee (the "Committee") has established a policy to maintain VaR at levels below 0.1% of the value of the portfolio. If at any point in time the threshold is exceeded, ECB personnel are alerted by an automated interface with ECB’s trading systems and begin to make adjustments in the portfolio in order to mitigate the risk and bring the portfolio in compliance. Concurrently, ECB personnel must notify the Committee of the variance and the actions taken to reduce the exposure to loss.
In addition to monitoring VaR, ECB periodically performs discrete stress tests to assure that the level of potential losses that would arise from extreme market movements that may not be anticipated by VaR measures are within acceptable levels.
As of December 31, 2015 and 2014, a summary of the Company’s assets, liabilities and collateral received or pledged related to these transactions was as follows:

| December 31, 2015 |  | December 31, 2014
| Asset (Liability) Balance |  | Market Value of Collateral Received or (Pledged) |  | Asset (Liability) Balance |  | Market Value of Collateral Received or (Pledged)
Assets |  |  |  |  |  |  |
Financial Instruments Owned and Pledged as Collateral at Fair Value | $ | 41,742 |  |  |  |  | $ | 98,688 |  |  |
Securities Purchased Under Agreements to Resell | 2,191 |  |  | $ | 2,192 |  |  | 7,669 |  |  | $ | 7,671 |
Total Assets | $ | 43,933 |  |  |  |  | $ | 106,357 |  |  |
Liabilities |  |  |  |  |  |  |
Securities Sold Under Agreements to Repurchase | $ | (44,000 | ) |  | $ | (44,063 | ) |  | $ | (106,499 | ) |  | $ | (106,632 | )

Note 9 – Investments
The Company’s investments reported on the Consolidated Statements of Financial Condition consist of investments in private equity partnerships, Trilantic and other investments in unconsolidated affiliated companies. The Company’s investments are relatively high-risk and illiquid assets.
The Company’s investments in private equity partnerships consist of investment interests in private equity funds which are voting interest entities. Realized and unrealized gains and losses on the private equity investments are included within Investment Management Revenue, as the Company considers this activity integral to its Private Equity business.
The Company also has investments in G5 ǀ Evercore, ABS and Atalanta Sosnoff, which are voting interest entities. The Company's investment in Pan became a VIE and was subsequently sold in December 2013. The Company’s share of earnings (losses) on its investments in G5 ǀ Evercore, ABS, Pan (prior to its consolidation on March 15, 2013) and Atalanta Sosnoff (after its deconsolidation on December 31, 2015; see Note 4 for further information) are included within Income from Equity Method Investments on the Consolidated Statements of Operations.
Investments in Private Equity
Private Equity Funds
The Company’s investments related to private equity partnerships and associated entities include investments in Evercore Capital Partners II, L.P. ("ECP II"), Discovery Americas I, L.P. (the "Discovery Fund"), Evercore Mexico Capital Partners II, L.P. ("EMCP II"), Evercore Mexico Capital Partners III, L.P. ("EMCP III"), CSI Capital, L.P. ("CSI Capital"), Trilantic Capital Partners Associates IV, L.P. ("Trilantic IV") and Trilantic Capital Partners V, L.P. ("Trilantic V"). Portfolio holdings of the private equity funds are carried at fair value. Accordingly, the Company reflects its pro rata share of the unrealized gains and losses occurring from changes in fair value. Additionally, the Company reflects its pro rata share of realized gains, losses and carried interest associated with any investment realizations.
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
On December 31, 2014, ECP II was terminated. The Company's investment at December 31, 2015 of $983 is comprised of remaining interest in the general partner, including $748 in cash, $87 in cash escrow balances, $66 in a seller note and $82 in securities.
In 2013, the Company held a fourth and final closing on EMCP III, a private equity fund focused on middle market investments in Mexico. The total subscribed capital commitments of $201,000 included a capital commitment of $10,750 by the general partner of EMCP III, Evercore Mexico Partners III ("EMP III"), of which $1,000 relates to the Company and $9,750 relates to noncontrolling interest holders. At December 31, 2015, unfunded commitments of EMP III were $4,665, including $391 due from the Company.
A summary of the Company’s investment in the private equity funds as of December 31, 2015 and 2014 was as follows:

| December 31,
| 2015 |  | 2014
ECP II | $ | 983 |  |  | $ | 4,043 |
Discovery Fund | 6,632 |  |  | 2,867 |
EMCP II | 6,091 |  |  | 12,630 |
EMCP III | 5,786 |  |  | 7,272 |
CSI Capital | 35 |  |  | 3,030 |
Trilantic IV | 2,829 |  |  | 3,798 |
Trilantic V | 4,117 |  |  | 2,911 |
Total Private Equity Funds | $ | 26,473 |  |  | $ | 36,551 |

Net realized and unrealized gains on private equity fund investments were $5,086, $7,858 and $8,060 for the years ended December 31, 2015, 2014 and 2013, respectively. During the year ended December 31, 2015, ECP II, EMCP II, CSI Capital and Trilantic IV made distributions of $3,000, $3,194, $2,909 and $2,907, respectively. In the event the funds perform poorly, the Company may be obligated to repay certain carried interest previously distributed. As of December 31, 2015, there was no previously distributed carried interest that was subject to repayment.
General Partners of Private Equity Funds which are VIEs
The Company has concluded that Evercore Partners II, L.L.C. ("EP II L.L.C."), the general partner of ECP II, is a VIE pursuant to ASC 810. The Company owned 8%-9% of the carried interest earned by the general partner of ECP II. The Company’s assessment of the design of EP II L.L.C. resulted in the determination that the Company is not acting as an agent for other members of the general partner and is a passive holder of interests in the fund, evidenced by the fact that the Company is a non-voting, non-managing member of the general partner and, therefore, has no authority in directing the management operations of the general partner. Furthermore, the Company does not have the obligation to absorb significant losses or the right to receive benefits that could potentially have a significant impact to EP II L.L.C. Accordingly, the Company has concluded that it is not the primary beneficiary of EP II L.L.C. and has not consolidated EP II L.L.C. in the Company's consolidated financial statements.
In 2013, EMP III amended and restated its Limited Partnership Agreement and admitted certain limited partners, which are related parties of the Company. The Company viewed this modification as a reconsideration event under ASC 810-10, "Noncontrolling Interest in Consolidated Financial Statements - an amendment of ARB No. 51," and concluded that EMP III is a VIE and that the Company is the primary beneficiary of this VIE. Specifically, the Company's general partner interests in EMP III provide the Company the ability to make decisions that significantly impact the economic performance of EMP III, while the limited partners do not possess substantive participating rights over EMP III. The Company's assessment of the primary beneficiary of EMP III included assessing which parties have the power to significantly impact the economic performance of EMP III and the obligation to absorb losses, which could be potentially significant to EMP III, or the right to receive benefits from EMP III that could be potentially significant. The Company had previously consolidated EMP III as a voting interest entity; accordingly, consolidating as a VIE had no impact on the assets and liabilities of the Company. The Company consolidated EMP III assets of $6,030 and liabilities of $164 at December 31, 2015 and assets of $7,327 and liabilities of $75 at December 31, 2014, in the Company's Consolidated Statements of Financial Condition. The assets retained by EMP III are for the benefit of the interest holders of EMP III and the liabilities are generally non-recourse to the Company.
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Investment in Trilantic Capital Partners and Others
In 2010, the Company made a limited partnership investment in Trilantic in exchange for 500 Class A LP Units having a fair value of $16,090. This investment gave the Company the right to invest in Trilantic’s current and future private equity funds, beginning with Trilantic Fund IV. The Company accounts for this investment under the cost method, subject to impairment. The Company allocates the cost of this investment to its investments in current and future Trilantic funds, as the Company satisfies the capital calls of these funds. The Company bases this allocation on its expectation of Trilantic’s future fundraising ability and performance. During 2015, $636 and $8 of this investment was allocated to Trilantic Fund V and IV, respectively. During 2014, $689 of this investment was allocated to Trilantic Fund V. During 2013, $825 and $29 of this investment was allocated to Trilantic Fund V and Trilantic Fund IV, respectively. From 2010 to 2012, $1,091 of this investment was allocated to Trilantic Fund IV. This investment had a balance of $12,812 and $13,455 as of December 31, 2015 and 2014, respectively. The Company has a $5,000 commitment to invest in Trilantic Fund V, of which $3,246 was unfunded at December 31, 2015. The Company and Trilantic anticipate that the Company will participate in the successor funds to Trilantic Fund V. The Company further anticipates that participation in the successor fund will be at approximately $12,000.
In the second quarter of 2015, the Company received an equity security in a private company with a fair value of $1,079 in exchange for advisory services. This investment is accounted for on the cost basis.
Equity Method Investments
A summary of the Company’s other investments accounted for under the equity method of accounting as of December 31, 2015 and 2014 was as follows:

| December 31,
| 2015 |  | 2014
G5 ǀ Evercore | $ | 20,730 |  |  | $ | 32,756 |
ABS | 41,567 |  |  | 43,825 |
Atalanta Sosnoff | 23,990 |  |  | — |
Total | $ | 86,287 |  |  | $ | 76,581 |

G5 ǀ Evercore
In 2010, the Company made an investment accounted for under the equity method of accounting in G5 ǀ Evercore. During the second quarter of 2014, the Company settled its contingent consideration arrangement entered into in conjunction with its initial investment in G5 ǀ Evercore. Accordingly, in June 2014 the Company issued 131 shares of restricted Class A common stock, with a fair value of $7,232, and $7,916 of cash to the owners of G5 ǀ Evercore.
At December 31, 2015, the Company’s economic ownership interest in G5 ǀ Evercore was 49%. This investment resulted in earnings (losses) of $662, ($48) and $2,126 for the years ended December 31, 2015, 2014 and 2013, respectively, included within Income from Equity Method Investments on the Consolidated Statements of Operations. In addition, the investment is subject to currency translation from Brazilian Real to the U.S. Dollar.
ABS
In 2011, the Company made an investment accounted for under the equity method of accounting in ABS. At December 31, 2015, the Company’s economic ownership interest in ABS was 45%. This investment resulted in earnings of $5,388, $5,228 and $6,255 for the years ended December 31, 2015, 2014 and 2013, respectively, included within Income from Equity Method Investments on the Consolidated Statements of Operations.
Atalanta Sosnoff
On December 31, 2015, the Company amended the Operating Agreement with Atalanta Sosnoff and deconsolidated its assets and liabilities. The Company will account for its interest in Atalanta Sosnoff under the equity method of accounting from that date forward. The carrying amount of the investment of $23,990, at December 31, 2015, represents its fair value on that date. At December 31, 2015, the Company’s economic ownership interest in Atalanta Sosnoff was 49%. See Note 4 for further information related to this transaction.
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Pan
In 2008, the Company made an investment accounted for under the equity method of accounting of $4,158 in Pan. This investment resulted in earnings (losses) of ($55) for the year ended December 31, 2013, included within Income from Equity Method Investments on the Consolidated Statement of Operations. The Company consolidated its investment in Pan on March 15, 2013 and subsequently sold its investment on December 3, 2013.
Other
The Company allocates the purchase price of its equity method investments, in part, to the inherent finite-lived identifiable intangible assets of the investees. The Company’s share of the earnings of the investees has been reduced by the amortization of these identifiable intangible assets inherent in the investments of $2,484, $2,586 and $2,586 for the years ended December 31, 2015, 2014 and 2013, respectively.
Note 10 – Fair Value Measurements
ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820") establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily-available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
Investments measured and reported at fair value are classified and disclosed in one of the following categories:
Level I – Quoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level I include listed equities and listed derivatives. As required by ASC 820, the Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.
Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. The estimated fair values of the Corporate Bonds, Municipal Bonds, Other Debt Securities and Securities Investments held at December 31, 2015 and 2014 are based on quoted market prices provided by external pricing services.
Level III – Pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation.
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
The following table presents the categorization of investments and certain other financial assets measured at fair value on a recurring basis as of December 31, 2015 and 2014:

| December 31, 2015
| Level I |  | Level II |  | Level III |  | Total
Corporate Bonds, Municipal Bonds and Other Debt Securities (1) | $ | — |  |  | $ | 44,144 |  |  | $ | — |  |  | $ | 44,144 |
Securities Investments (1) | 5,200 |  |  | 1,749 |  |  | — |  |  | 6,949 |
Mutual Funds | 2,347 |  |  | — |  |  | — |  |  | 2,347 |
Financial Instruments Owned and Pledged as Collateral at Fair Value | 41,742 |  |  | — |  |  | — |  |  | 41,742 |
Total Assets Measured At Fair Value | $ | 49,289 |  |  | $ | 45,893 |  |  | $ | — |  |  | $ | 95,182 |
| December 31, 2014
| Level I |  | Level II |  | Level III |  | Total
Corporate Bonds, Municipal Bonds and Other Debt Securities (1) | $ | — |  |  | $ | 34,343 |  |  | $ | — |  |  | $ | 34,343 |
Securities Investments (1) | 5,550 |  |  | 1,642 |  |  | — |  |  | 7,192 |
Mutual Funds | 5,702 |  |  | — |  |  | — |  |  | 5,702 |
Financial Instruments Owned and Pledged as Collateral at Fair Value | 98,688 |  |  | — |  |  | — |  |  | 98,688 |
Total Assets Measured At Fair Value | $ | 109,940 |  |  | $ | 35,985 |  |  | $ | — |  |  | $ | 145,925 |

(1) | Includes $9,653 and $9,252 of treasury bills, municipal bonds and commercial paper classified within Cash and Cash Equivalents on the Consolidated Statements of Financial Condition as of December 31, 2015 and 2014, respectively.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.
The Company had no transfers between fair value levels during the years ended December 31, 2015 or 2014.
During the fourth quarter of 2015, the Company determined that the fair value of the goodwill in its Institutional Asset Management reporting unit was $66,200. The fair value of the reporting unit was estimated by utilizing both a market multiple approach and a discounted cash flow methodology based on the adjusted cash flows from operations. Goodwill is measured at fair value on a non-recurring basis as a Level III asset. See Note 4 for further information.
The carrying amount and estimated fair value of the Company’s financial instrument assets and liabilities, which are not measured at fair value on the Consolidated Statements of Financial Condition, are listed in the tables below.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)

|  |  | December 31, 2015
| Carrying |  | Estimated Fair Value
| Amount |  | Level I |  | Level II |  | Level III |  | Total
Financial Assets: |  |  |  |  |  |  |  |  |
Cash and Cash Equivalents | $ | 439,111 |  |  | $ | 439,111 |  |  | $ | — |  |  | $ | — |  |  | $ | 439,111 |
Securities Purchased Under Agreements to Resell | 2,191 |  |  | — |  |  | 2,191 |  |  | — |  |  | 2,191 |
Accounts Receivable | 175,497 |  |  | — |  |  | 175,497 |  |  | — |  |  | 175,497 |
Receivable from Employees and Related Parties | 21,189 |  |  | — |  |  | 21,189 |  |  | — |  |  | 21,189 |
Assets Segregated for Bank Regulatory Requirements | 10,200 |  |  | 10,200 |  |  | — |  |  | — |  |  | 10,200 |
Closely-held Equity Security | 1,079 |  |  | — |  |  | — |  |  | 1,079 |  |  | 1,079 |
Loans Receivable | 3,500 |  |  | — |  |  | 3,666 |  |  | — |  |  | 3,666 |
Financial Liabilities: |  |  |  |  |  |  |  |  |
Accounts Payable and Accrued Expenses | $ | 43,878 |  |  | $ | — |  |  | $ | 43,878 |  |  | $ | — |  |  | $ | 43,878 |
Securities Sold Under Agreements to Repurchase | 44,000 |  |  | — |  |  | 44,000 |  |  | — |  |  | 44,000 |
Payable to Employees and Related Parties | 28,392 |  |  | — |  |  | 28,392 |  |  | — |  |  | 28,392 |
Notes Payable | 119,250 |  |  | — |  |  | 120,373 |  |  | — |  |  | 120,373 |
Subordinated Borrowings | 22,550 |  |  | — |  |  | 23,076 |  |  | — |  |  | 23,076 |
|  |  | December 31, 2014
| Carrying |  | Estimated Fair Value
| Amount |  | Level I |  | Level II |  | Level III |  | Total
Financial Assets: |  |  |  |  |  |  |  |  |
Cash and Cash Equivalents | $ | 342,908 |  |  | $ | 342,908 |  |  | $ | — |  |  | $ | — |  |  | $ | 342,908 |
Securities Purchased Under Agreements to Resell | 7,669 |  |  | — |  |  | 7,669 |  |  | — |  |  | 7,669 |
Accounts Receivable | 136,280 |  |  | — |  |  | 136,280 |  |  | — |  |  | 136,280 |
Receivable from Employees and Related Parties | 17,327 |  |  | — |  |  | 17,327 |  |  | — |  |  | 17,327 |
Assets Segregated for Bank Regulatory Requirements | 10,200 |  |  | 10,200 |  |  | — |  |  | — |  |  | 10,200 |
Financial Liabilities: |  |  |  |  |  |  |  |  |
Accounts Payable and Accrued Expenses | $ | 37,104 |  |  | $ | — |  |  | $ | 37,104 |  |  | $ | — |  |  | $ | 37,104 |
Securities Sold Under Agreements to Repurchase | 106,499 |  |  | — |  |  | 106,499 |  |  | — |  |  | 106,499 |
Payable to Employees and Related Parties | 18,875 |  |  | — |  |  | 18,875 |  |  | — |  |  | 18,875 |
Notes Payable | 105,226 |  |  | — |  |  | 131,340 |  |  | — |  |  | 131,340 |
Subordinated Borrowings | 22,550 |  |  | — |  |  | 22,550 |  |  | — |  |  | 22,550 |

The following methods and assumptions were used to estimate the fair value of these financial assets and liabilities:
The fair value of the Company’s Closely-held Equity Security is based on recent comparable market transactions executed by the issuer.
The fair value of the Company’s Loans Receivable is estimated based on a present value analysis utilizing aggregate market yields obtained from independent pricing sources for similar financial instruments.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
The fair value of the Company’s Notes Payable is estimated based on a present value analysis utilizing aggregate market yields obtained from independent pricing sources for similar financial instruments.
The fair value of the Company’s Subordinated Borrowings as of December 31, 2015 is estimated based on a present value analysis utilizing aggregate market yields obtained from independent pricing sources for similar financial instruments. The carrying amount reported on the Consolidated Statement of Financial Condition for Subordinated Borrowings approximates fair value as of December 31, 2014.
The carrying amounts reported on the Consolidated Statements of Financial Condition for Cash and Cash Equivalents, Securities Purchased Under Agreements to Resell, Securities Sold Under Agreements to Repurchase, Accounts Receivable, Receivable from Employees and Related Parties, Accounts Payable and Accrued Expenses, Payable to Employees and Related Parties and Assets Segregated for Bank Regulatory Requirements approximate fair value due to the short-term nature of these items.
Note 11 – Furniture, Equipment and Leasehold Improvements
Furniture, Equipment and Leasehold Improvements consisted of the following:

| December 31,
| 2015 |  | 2014
Furniture and Office Equipment | $ | 20,484 |  |  | $ | 14,678 |
Leasehold Improvements | 52,253 |  |  | 45,489 |
Computer and Computer-related Equipment | 17,899 |  |  | 16,340 |
Total | 90,636 |  |  | 76,507 |
Less: Accumulated Depreciation and Amortization | (42,656 | ) |  | (33,980 | )
Furniture, Equipment and Leasehold Improvements, Net | $ | 47,980 |  |  | $ | 42,527 |

Depreciation and amortization expense for Furniture, Equipment and Leasehold Improvements totaled $10,469, $8,256 and $6,543 for the years ended December 31, 2015, 2014 and 2013, respectively.
Note 12 – Notes Payable, Warrants and Subordinated Borrowings
On August 21, 2008, the Company entered into a purchase agreement (the "Purchase Agreement") with Mizuho Corporate Bank, Ltd. (currently known as Mizuho Bank, Ltd.) ("Mizuho") pursuant to which Mizuho purchased from the Company $120,000 principal amount of Senior Notes, due 2020 with a 5.20% coupon, and warrants to purchase 5,455 shares of the Company's Class A common stock, par value $0.01 per share ("Class A Shares") at $22.00 per share (the "Warrant") expiring in 2020. The exercise price for the Warrants was payable, at the option of the holder of the Warrants, either in cash or by tender of Senior Notes at the Accreted Amount, at any point in time. Based on their relative fair value at issuance, plus accretion, the Senior Notes and Warrants were reflected in Notes Payable and Additional Paid-In-Capital on the Consolidated Statements of Financial Condition. The Senior Notes had an effective yield of 7.94%.
Mizuho exercised in full the outstanding Warrants in November 2015 and paid the exercise price by surrender of the entire issue of the Senior Notes and payment of $11,020 in cash. The Company conducted a public offering for the resale of the 5,455 shares of Class A common stock issuable upon exercise of the Warrants on behalf of Mizuho, in which 3,100 shares were offered to the public. The Company purchased from the underwriters the remaining 2,355 Class A Shares that were subject to the offering (the "Share Repurchase"), at a price per share equal to the price paid by the underwriters to the selling stockholder in the offering.
On November 2, 2015 the Company entered into a senior credit facility with the New York branch of Mizuho pursuant to which it borrowed, concurrently with the closing of the offering, $120,000 in a new term loan. The principal amount of the New Loan is subject to annual amortization of principal beginning in the second year, with the final payment of all amounts outstanding, plus accrued interest, being due five years after the closing date. The New Loan bears interest at LIBOR or a base rate (at the Company’s election) plus an applicable margin (determined according to a leverage-based pricing grid), and is guaranteed by certain of the Company’s material domestic subsidiaries. The New Loan contains customary covenants, including financial covenants requiring compliance with a maximum leverage ratio, a minimum tangible net worth and a minimum ratio of liquid assets to debt, and customary events of default. As of December 31, 2015, the Company was in
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
compliance with all of these covenants. The Company used the proceeds of the New Loan, together with the cash portion of the exercise price of the Warrants, to fund the Share Repurchase.
Mizuho, Mizuho Securities Co. Ltd., and the Company also revised the alliance between their advisory businesses to include geographies globally and extended for an additional three year term, with automatic one-year renewals thereafter.
As of December 31, 2015, the Company had $22,550 in subordinated borrowings, principally with an executive officer of the Company, due on October 31, 2019. These borrowings have a coupon of 5.5%, payable semi-annually.
As of December 31, 2015, the future payments required on the Notes Payable and Subordinated Borrowings, including principal and interest were as follows:

2016 | $ | 4,345 |
2017 | 16,341 |
2018 | 28,301 |
2019 | 62,179 |
2020 | 49,660 |
Thereafter | — |
Total | $ | 160,826 |

Note 13 – Employee Benefit Plans
Defined Contribution Retirement Plan – The Company, through a subsidiary, provides certain retirement benefits to employees through a qualified retirement plan. The Evercore Partners Services East L.L.C. Retirement Plan (the "Evercore Plan") is a defined contribution plan with a salary deferral feature under Section 401(k) of the Internal Revenue Code. It also includes a discretionary profit sharing feature. The Evercore Plan was formed on February 1, 1996 and subsequently amended. The Evercore Plan's year ends on December 31 of each year. The Company, at its sole discretion, determines the amount, if any, of profit to be contributed to the Evercore Plan.
The Company made no contributions for the years ended December 31, 2015, 2014 and 2013.
Evercore Europe Defined Contribution Benefit Plan – Evercore Partners Limited ("Evercore Europe") established the Evercore Partners Limited Group Personal Pension Plan (the "Evercore Europe Plan"), a defined contribution benefit plan, in November 2006 for Evercore Europe employees and members.
The Evercore Europe Plan, for employees starting between November 2006 and July 2011, has a salary deferral feature as permitted under existing tax guidelines for HM Customs and Revenue, the Inland Revenue Service in the United Kingdom. Evercore Europe employees must have elected to participate in the plan prior to July 2011, and Evercore Europe has a minimum annualized contribution of 15% to 50% of an employee’s salary for all the employees who participated, depending on the respective employee’s level within the Company. These employees are also eligible to contribute up to 10% of their salary to the Evercore Europe Plan and under the terms of the Evercore Europe Plan, if an employee contributes a minimum of 7.5% to 10% of their salary to the plan, Evercore Europe must make a matching contribution of 5% to 10% of the employee’s salary depending on the employee’s level within the Company.
The Evercore Europe Plan, for employees starting after July 2011, has a salary deferral feature as permitted under existing tax guidelines for HM Customs and Revenue, the Inland Revenue Service in the United Kingdom. Evercore Europe has a minimum annualized contribution of 17.5% of an employee’s salary. Employees are also eligible to contribute a percentage of their salary to the Evercore Europe Plan; however, any contribution made does not entitle them to a matching contribution from Evercore Europe.
For employees of ISI UK, a personal pension plan is available for all employees to contribute a percentage of their salary. The Company does not contribute to this plan.
The Company made contributions to the Evercore Europe Plan for the years ended December 31, 2015, 2014 and 2013 totaling $3,808, $4,167 and $3,632, respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Note 14 – Evercore Partners Inc. Stockholders’ Equity
Dividends – The Company’s Board of Directors declared on February 1, 2016, a quarterly cash dividend of $0.31 per share, to the holders of Class A Shares as of February 26, 2016, which will be paid on March 11, 2016. During the year ended December 31, 2015, the Company declared and paid dividends of $1.15 per share, totaling $46,326. During the year ended December 31, 2014, the Company declared and paid dividends of $1.03 per share, totaling 38,754.
Treasury Stock – During the year ended December 31, 2015, the Company purchased 996 Class A Shares primarily from employees at values ranging from $47.56 to $59.02 per share (at an average cost per share of $50.92), primarily for the net settlement of stock-based compensation awards, and 4,471 Class A Shares at market values ranging from $47.10 to $57.03 per share (at an average cost per share of $51.82) pursuant to the Company’s share repurchase program. The result of these purchases was an increase in Treasury Stock of $283,283 on the Company’s Consolidated Statement of Financial Condition as of December 31, 2015. During 2014, the Company purchased 1,661 Class A Shares primarily from employees at values ranging from $45.82 to $61.82 per share, (at an average cost per share of $53.61) primarily for the net settlement of stock-based compensation awards, and 1,046 Class A Shares at market values ranging from $47.99 to $55.00 per share (at an average cost per share of $50.75) pursuant to the Company’s share repurchase program. The result of these purchases was an increase in Treasury Stock of $142,850 on the Company’s Consolidated Statement of Financial Condition as of December 31, 2014. During the year ended December 31, 2014, the Company issued 131 Class A Shares from treasury stock as an earnout payment to certain G5 ǀ Evercore employees and 119 Class A Shares to certain EWM employees in exchange for their noncontrolling interest in EWM. The result of these issuances was a decrease in Treasury Stock of $8,101 on the Company's Consolidated Statement of Financial Condition as of December 31, 2014.
LP Units – During the year ended December 31, 2015, 586 LP Units were exchanged for Class A Shares, resulting in an increase to Common Stock and Additional Paid-In-Capital of $6 and $12,833, respectively, on the Company’s Consolidated Statement of Financial Condition as of December 31, 2015. During 2014, 1,421 LP Units were exchanged for Class A Shares, resulting in an increase to Common Stock and Additional Paid-In-Capital of $14 and $16,254, respectively, on the Company’s Consolidated Statement of Financial Condition as of December 31, 2014. See Note 4 for further information on the LP Units.
During the year ended December 31, 2015, the Company purchased 26 LP Units and certain other rights from a noncontrolling interest holder, resulting in a decrease to Noncontrolling Interest of $353 and a decrease to Additional Paid-In Capital of $770, on the Company's Consolidated Statement of Financial Condition as of December 31, 2015.
Accumulated Other Comprehensive Income (Loss) – As of December 31, 2015, Accumulated Other Comprehensive Income (Loss) on the Company’s Consolidated Statement of Financial Condition includes an accumulated Unrealized Gain (Loss) on Marketable Securities and Investments, net, and a Foreign Currency Translation Adjustment Gain (Loss), net, of ($4,764) and ($29,775), respectively.
Income (Loss) from Discontinued Operations, and the Provision (Benefit) for Income Taxes from Discontinued Operations on the Consolidated Statement of Operations for the year ended December 31, 2013 includes ($1,683) and ($573), respectively, reclassified from Accumulated Other Comprehensive Income (Loss) related to the recognition of a cumulative foreign exchange translation loss as a result of the consolidation of Pan. Income (Loss) from Discontinued Operations, and the Provision (Benefit) for Income Taxes from Discontinued Operations on the Consolidated Statement of Operations for the year ended December 31, 2013 includes $409 and $135, respectively, reclassified from Accumulated Other Comprehensive Income (Loss) related to the recognition of a cumulative foreign exchange translation gain as a result of the sale of Pan.
Note 15 – Noncontrolling Interest
Noncontrolling Interest recorded in the consolidated financial statements of the Company relates to a 14% interest in Evercore LP, a 28% interest in ECB, a 38% interest in EWM, a 34% equity interest in Atalanta Sosnoff (deconsolidated on December 31, 2015), a 39% interest in Evercore Private Capital Advisory L.P. ("PCA"), a 38% interest in Institutional Equities through October 31, 2014, a 14% interest in Evercore Trust Company, N.A. ("ETC") through the second quarter of 2013, a 32% interest in Pan through December 3, 2013 and other private equity partnerships. The Atalanta Sosnoff interest excludes the Series C Profits Interest, which has been reflected in Employee Compensation and Benefits Expense on the Consolidated Statements of Operations. The Noncontrolling Interests for Evercore LP, EWM, Atalanta Sosnoff and PCA have rights, in certain circumstances, to convert into Class A Shares.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Changes in Noncontrolling Interest for the years ended December 31, 2015, 2014 and 2013 were as follows:

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Beginning balance | $ | 160,952 |  |  | $ | 60,577 |  |  | $ | 62,243 |
Comprehensive income (loss): |  |  |  |  |
Net Income Attributable to Noncontrolling Interest | 14,827 |  |  | 20,497 |  |  | 18,760 |
Other comprehensive income (loss) | (3,886 | ) |  | (2,608 | ) |  | (228 | )
Total comprehensive income | 10,941 |  |  | 17,889 |  |  | 18,532 |
Evercore LP Units Purchased or Converted into Class A Shares | (12,012 | ) |  | (11,686 | ) |  | (21,414 | )
Amortization and Vesting of LP Units/Interests | 82,734 |  |  | 3,593 |  |  | 20,365 |
Issuance of Noncontrolling Interest for Acquisitions and Investments | — |  |  | 72,344 |  |  | — |
Other Items: |  |  |  |  |
Distributions to Noncontrolling Interests | (23,723 | ) |  | (10,655 | ) |  | (18,950 | )
Fair value of Noncontrolling Interest in Pan | — |  |  | — |  |  | 309 |
Deconsolidation of Atalanta Sosnoff | (16,090 | ) |  | — |  |  | — |
Net Reclassification to/from Redeemable Noncontrolling Interest | — |  |  | 27,477 |  |  | — |
Issuance of Noncontrolling Interest | 594 |  |  | 2,449 |  |  | 4,021 |
Purchase of Noncontrolling Interest | — |  |  | — |  |  | (4,529 | )
Other, net | (732 | ) |  | (1,036 | ) |  | — |
Total other items | (39,951 | ) |  | 18,235 |  |  | (19,149 | )
Ending balance | $ | 202,664 |  |  | $ | 160,952 |  |  | $ | 60,577 |

Discontinued Operations - Net Income (Loss) Attributable to Noncontrolling Interest related to Pan from Discontinued Operations was ($1,185) for the year ended December 31, 2013.
Other Comprehensive Income - Other comprehensive income (loss) attributed to Noncontrolling Interest includes Unrealized Gain (Loss) on Marketable Securities and Investments, net, of ($1,083), ($981) and ($180) for the years ended December 31, 2015, 2014 and 2013, respectively, and Foreign Currency Translation Adjustment Gain (Loss), net, of ($2,803), ($1,627) and ($48) for the years ended December 31, 2015, 2014 and 2013, respectively.
Atalanta Sosnoff - In conjunction with the Company’s purchase agreement with Atalanta Sosnoff, the Company issued a management member of Atalanta Sosnoff certain capital interests in Atalanta Sosnoff, which were redeemable for cash, at their fair value. Accordingly, these capital interests were reflected at their fair value of $4,014 within Redeemable Noncontrolling Interest on the Consolidated Statement of Financial Condition at December 31, 2014. Changes in the fair value of these redeemable noncontrolling interests resulted in an increase to Additional Paid-in Capital of $269 for the year ended December 31, 2014. On December 31, 2015, the Company deconsolidated the assets and liabilities of Atalanta Sosnoff, as well as related redeemable noncontrolling interests. See Note 4 for further information.
Interests Purchased - During 2015, the Company purchased 26 LP Units and certain other rights from a noncontrolling interest holder, resulting in a decrease to Noncontrolling Interest of $353 and a decrease to Additional Paid-In Capital of $770, on the Company's Consolidated Statement of Financial Condition as of December 31, 2015.
In May 2014, the Company purchased 3 units, or 22%, of the aggregate amount of the outstanding EWM Class A units held by members of EWM for 119 Class A Shares and 11 LP Units of the Company, at a fair value of $7,100. This transaction resulted in an increase in the Company's ownership in EWM to 62%. In conjunction with this purchase, the Company amended the Amended and Restated Limited Liability Company Agreement of EWM. Per the amended agreement, the holders of certain
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
EWM interests no longer have the option to redeem these capital interests for cash upon the event of the death or disability of the holder. Accordingly, the value of these interests had been reclassified from Redeemable Noncontrolling Interest to Noncontrolling Interest on the Unaudited Condensed Consolidated Statement of Financial Condition as of June 30, 2014. The above transactions had the effect of reducing Redeemable Noncontrolling Interest and Treasury Stock by $34,577 and $3,856, respectively, and increasing Noncontrolling Interest and Additional Paid-in Capital by $27,477 and $3,244, respectively, at June 30, 2014. These interests were reflected at their fair value of $34,577 within Redeemable Noncontrolling Interest on the Unaudited Condensed Consolidated Statement of Financial Condition at March 31, 2014. Changes in the fair value of these redeemable noncontrolling interests resulted in a decrease to Additional Paid-in Capital of $4,116 for the year ended December 31, 2014.
During 2013, the Company purchased, at fair value, all of the noncontrolling interest in ETC for $7,890. This purchase was settled on July 19, 2013. The purchase of this noncontrolling interest resulted in a decrease to Additional Paid-in Capital of $3,362 for the year ended December 31, 2013.
On January 29, 2016, the Company purchased, at fair value, all of the noncontrolling interest in ECB for $6,528.
ISI Transaction - As discussed in Note 4, the value of the Class E LP Units exchanged as consideration for the Company's acquisition of the operating businesses of ISI, as well as the value of Class E LP Units exchanged for the interest in its Institutional Equities business it did not own, resulted in an increase to Noncontrolling Interest of $68,835 as of December 31, 2014. Further, the purchase of the remaining noncontrolling interest in the Institutional Equities business, including the portion exchanged for cash, resulted in a reduction of Additional Paid-in Capital of $17,307 for the year ended December 31, 2014. Further, as discussed in Note 4, the Company's acquisition of a small advisory boutique firm resulted in an increase in Noncontrolling Interest of $3,509 as of December 31, 2014.
Other - In addition, Noncontrolling Interest was reduced and Additional Paid-in Capital was increased by the net effect of $1,124 as of December 31, 2014, reflecting other adjustments resulting from changes in ownership in the Company's subsidiaries.
During 2013, the Company had an issuance of noncontrolling interest related to EMP III. See Note 9 for further information.
Trilantic - In February 2010, Evercore LP issued 500 Class A LP Units to Trilantic. The original terms were such that at December 31, 2014, at the option of the holder, these Class A LP Units were exchangeable on a one-for-one basis for Class A Shares or may be redeemed for cash of $16,500. Accordingly, this value was being accreted to the minimum redemption value of $16,500 over the five-year period ending December 31, 2014. Accretion was $68 for the year ended December 31, 2013. In October of 2013, the Board of Directors of the Company agreed to release the transfer restrictions associated with these Class A LP Units and the holders of these units exchanged them into Class A Shares. See Note 14 for a further discussion of exchanges of LP Units for Class A Shares of the Company.
Note 16 – Net Income (Loss) Per Share Attributable to Evercore Partners Inc. Common Shareholders
The calculations of basic and diluted net income (loss) per share attributable to Evercore Partners Inc. common shareholders for the years ended December 31, 2015, 2014 and 2013 are described and presented below.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Basic Net Income (Loss) Per Share Attributable to Evercore Partners Inc. Common Shareholders |  |  |  |  |
Numerator: |  |  |  |  |
Net income from continuing operations attributable to Evercore Partners Inc. common shareholders | $ | 42,863 |  |  | $ | 86,874 |  |  | $ | 54,867 |
Associated accretion of redemption price of noncontrolling interest in Trilantic (See Note 15) | — |  |  | — |  |  | (68 | )
Net income from continuing operations attributable to Evercore Partners Inc. common shareholders | 42,863 |  |  | 86,874 |  |  | 54,799 |
Net income (loss) from discontinued operations attributable to Evercore Partners Inc. common shareholders | — |  |  | — |  |  | (1,605 | )
Net income attributable to Evercore Partners Inc. common shareholders | $ | 42,863 |  |  | $ | 86,874 |  |  | $ | 53,194 |
Denominator: |  |  |  |  |
Weighted average Class A Shares outstanding, including vested RSUs | 37,161 |  |  | 35,827 |  |  | 32,208 |
Basic net income per share from continuing operations attributable to Evercore Partners Inc. common shareholders | $ | 1.15 |  |  | $ | 2.42 |  |  | $ | 1.70 |
Basic net income (loss) per share from discontinued operations attributable to Evercore Partners Inc. common shareholders | — |  |  | — |  |  | (0.05 | )
Basic net income per share attributable to Evercore Partners Inc. common shareholders | $ | 1.15 |  |  | $ | 2.42 |  |  | $ | 1.65 |
Diluted Net Income (Loss) Per Share Attributable to Evercore Partners Inc. Common Shareholders |  |  |  |  |
Numerator: |  |  |  |  |
Net income from continuing operations attributable to Evercore Partners Inc. common shareholders | $ | 42,863 |  |  | $ | 86,874 |  |  | $ | 54,799 |
Noncontrolling interest related to the assumed exchange of LP Units for Class A Shares | (a) |  |  | (a) |  |  | (a) |
Associated corporate taxes related to the assumed elimination of Noncontrolling Interest described above | (a) |  |  | (a) |  |  | (a) |
Diluted net income from continuing operations attributable to Evercore Partners Inc. common shareholders | 42,863 |  |  | 86,874 |  |  | 54,799 |
Net income (loss) from discontinued operations attributable to Evercore Partners Inc. common shareholders | — |  |  | — |  |  | (1,605 | )
Diluted net income attributable to Evercore Partners Inc. common shareholders | $ | 42,863 |  |  | $ | 86,874 |  |  | $ | 53,194 |
Denominator: |  |  |  |  |
Weighted average Class A Shares outstanding, including vested RSUs | 37,161 |  |  | 35,827 |  |  | 32,208 |
Assumed exchange of LP Units for Class A Shares | (a) |  |  | (a) |  |  | (a) |
Additional shares of the Company's common stock assumed to be issued pursuant to non-vested RSUs and deferred consideration, as calculated using the Treasury Stock Method | 2,162 |  |  | 2,723 |  |  | 3,585 |
Shares that are contingently issuable (b) | 1,747 |  |  | 88 |  |  | — |
Assumed conversion of Warrants issued (c) | 2,629 |  |  | 3,205 |  |  | 2,688 |
Diluted weighted average Class A Shares outstanding | 43,699 |  |  | 41,843 |  |  | 38,481 |
Diluted net income per share from continuing operations attributable to Evercore Partners Inc. common shareholders | $ | 0.98 |  |  | $ | 2.08 |  |  | $ | 1.42 |
Diluted net income (loss) per share from discontinued operations attributable to Evercore Partners Inc. common shareholders | — |  |  | — |  |  | (0.04 | )
Diluted net income per share attributable to Evercore Partners Inc. common shareholders | $ | 0.98 |  |  | $ | 2.08 |  |  | $ | 1.38 |

(a) | The Company has outstanding LP Units in its subsidiary, Evercore LP, which give the holders the right to receive Class A Shares upon exchange on a one-for-one basis. During the years ended December 31, 2015, 2014 and 2013, the LP Units were antidilutive and consequently the effect of their exchange into Class A Shares has been excluded from the calculation of diluted net income per share attributable to Evercore Partners Inc. common shareholders. The units that would have been included in the denominator of the computation of diluted net income per share attributable to Evercore Partners Inc. common shareholders if the effect would have been dilutive were 6,606, 5,161 and 6,433 for the years ended December 31,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
2015, 2014 and 2013, respectively. The adjustment to the numerator, diluted net income attributable to Class A common shareholders, if the effect would have been dilutive, would have been $7,697, $12,912 and $12,804 for the years ended December 31, 2015, 2014 and 2013, respectively. In computing this adjustment, the Company assumes that all vested Class A LP Units and all Class E LP Units are converted into Class A Shares, all unvested Class A LP Units (as of December 31, 2013 all Class A LP Units were fully vested) after applying the treasury stock method are converted into Class A Shares, that all earnings attributable to those shares are attributed to Evercore Partners Inc. and, that it has adopted a conventional corporate tax structure and is taxed as a C Corporation in the U.S. at prevailing corporate tax rates. The Company does not anticipate that the LP Units will result in a dilutive computation in future periods.

(b) | At December 31, 2015, the Company has outstanding Class G and H LP Interests which are contingently exchangeable into Class E LP Units, and ultimately Class A Shares, as they are subject to certain performance thresholds being achieved. See Note 17 for a further discussion. For the purposes of calculating diluted net income per share attributable to Evercore Partners Inc. common shareholders, the Company’s Class G and H LP Interests will be included in diluted weighted average Class A Shares outstanding as of the beginning of the period in which all necessary performance conditions have been satisfied. If all necessary performance conditions have not been satisfied by the end of the period, the number of shares that will be included in diluted weighted average Class A Shares outstanding will be based on the number of shares that would be issuable if the end of the reporting period were the end of the performance period. For year ended December 31, 2015, 1,747 of these interests were assumed to be converted to an equal number of Class A Shares for purposes of computing diluted EPS.

(c) | In November 2015, Mizuho exercised in full its outstanding Warrants to purchase 5,455 Class A Shares, of which the Company repurchased 2,355 shares. See Note 12 for further information.

The shares of Class B common stock have no right to receive dividends or a distribution on liquidation or winding up of the Company. The shares of Class B common stock do not share in the earnings of the Company and no earnings are allocable to such class. Accordingly, basic and diluted net income per share of Class B common stock have not been presented.
Note 17 – Share-Based and Other Deferred Compensation
LP Units
Class A
At the time of the Company’s formation and IPO, collectively referred to as the reorganization ("Reorganization"), Members and certain trusts benefiting certain of their families received 13,548 vested and 9,589 unvested Class A LP Units. The Class A LP Units are exchangeable into Class A Shares of the Company on a one-for-one basis once vested.
The unvested Class A LP Units vested ratably on December 31, 2011, 2012 and 2013 so long as the equity holder remained employed with Evercore Partners Inc., Evercore LP or their affiliates on such dates. The Class A LP Units were all fully vested as of December 31, 2013. The Company expensed the fair value of the awards, prospectively, over the service period. Expense related to the amortization of these Class A LP Units was $20,063 for the year ended December 31, 2013.
Acquisition-related
Equities business - In conjunction with the acquisition of the operating businesses of ISI in 2014, the Company issued Evercore LP interests which have been treated as compensation, including 710 vested Class E LP Units and an allocation of the value, attributed to post-combination service, of 710 Class E LP Units that were unvested and vest ratably on October 31, 2015, 2016 and 2017 and become exchangeable once vested, subject to continued employment with the Company. The units will become exchangeable into Class A common shares of the Company subject to certain liquidated damages and continued employment provisions. Compensation expense related to Class E LP Units was $21,425 and $3,399 for the years ended December 31, 2015 and 2014, respectively.
The Company also issued 538 vested and 540 unvested Class G LP Interests, which will vest ratably on February 15, 2016, 2017 and 2018, and 2,044 vested and 2,051 unvested Class H LP Interests, which will vest ratably on February 15, 2018, 2019 and 2020. The Company’s vested Class G and Class H LP Interests will become exchangeable into Class A common shares of the Company subject to the achievement of certain performance targets. The Company’s vested Class G LP Interests will become exchangeable in February 2016, 2017 and 2018 if certain earnings before interest and taxes, excluding underwriting, ("Management Basis EBIT") margin thresholds within a range of 12% to 16%, are achieved for the calendar year preceding the date the interests become exchangeable. The Company’s vested Class H LP Interests will become exchangeable
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
February 2018, 2019 and 2020 if certain average Management Basis EBIT and Management Basis EBIT margin thresholds, within ranges of $8,000 to $48,000 and 7% to 17%, respectively, are achieved for the three calendar years preceding the date the interests become exchangeable. In the event of death, disability or termination of employment without cause, unvested Class G and H LP Interests will be canceled or may vest based on determination of expected performance, based on a decision by Management.
Based on Evercore ISI’s results for the year ended December 31, 2015, the Company determined that the achievement of certain of the performance thresholds for the Class G and H LP Interests was probable at December 31, 2015. This determination assumes Management Basis EBIT margin of 15.2% and annual Management Basis EBIT of $34,395 over the performance period for Evercore ISI, consistent with 2015 results. Accordingly, $61,111 of expense was recorded for the year ended December 31, 2015 for the Class G and H LP Interests.
In February 2016, 373 Class G LP Interests were converted to the same number of Class E LP Units.
As of December 31, 2014, the Company determined that the achievement of the above performance thresholds associated with the Class G and H LP Interests was not probable. Accordingly, no expense was recorded for the year ended December 31, 2014 for the Class G and H LP Interests.
The following tables summarize activity related to the Acquisition-related Awards for the Company's equities business during the year ended December 31, 2015. In these tables, awards whose performance conditions have not yet been achieved are reflected as unvested:

| Class E LP Units
| Number of Units |  | Grant Date Weighted Average Fair Value
Unvested Balance at January 1, 2015 | 1,173 |  |  | $ | 59,977 |
Granted | — |  |  | — |
Modified | (3 | ) |  | (203 | )
Forfeited | — |  |  | — |
Vested/Performance Achieved | (399 | ) |  | (20,249 | )
Unvested Balance at December 31, 2015 | 771 |  |  | $ | 39,525 |

| Class G LP Interests |  | Class H LP Interests
| Number of Interests |  | Grant Date Weighted Average Fair Value |  | Number of Interests |  | Grant Date Weighted Average Fair Value
Unvested Balance at January 1, 2015 | 1,077 |  |  | $ | 55,738 |  |  | 4,091 |  |  | $ | 211,801 |
Granted | 12 |  |  | 592 |  |  | 44 |  |  | 2,251 |
Modified | (7 | ) |  | (332 | ) |  | (24 | ) |  | (1,262 | )
Forfeited | — |  |  | — |  |  | — |  |  | — |
Vested/Performance Achieved | (7 | ) |  | (375 | ) |  | (28 | ) |  | (1,425 | )
Unvested Balance at December 31, 2015 | 1,075 |  |  | $ | 55,623 |  |  | 4,083 |  |  | $ | 211,365 |

As of December 31, 2015, the total compensation cost not yet recognized related to these Acquisition-related Awards, including awards which are subject to performance conditions, was $237,767. The weighted-average period over which this compensation cost is expected to be recognized is 38 months.
Other Acquisition Related
Lexicon - During 2011, in connection with the acquisition of The Lexicon Partnership LLP ("Lexicon"), the Company committed to issue 1,883 restricted Class A Shares, including dividend equivalent units, ("Lexicon Acquisition-related Awards") and deferred cash consideration. Compensation expense related to the Lexicon Acquisition-related Awards and deferred cash consideration was $1,237 and $301, respectively, for the year ended December 31, 2015, $5,255 and $1,626, respectively, for the year ended December 31, 2014, and $10,960 and $3,937, respectively, for the year ended December 31, 2013.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
The following table summarizes activity related to Lexicon Acquisition-related Awards during the year ended December 31, 2015:

| Lexicon Acquisition-related Awards
| Number of Shares |  | Grant Date Weighted Average Fair Value
Unvested Balance at January 1, 2015 | 460 |  |  | $ | 10,648 |
Granted | 5 |  |  | 238 |
Modified | — |  |  | — |
Forfeited | — |  |  | — |
Vested | (465 | ) |  | (10,886 | )
Unvested Balance at December 31, 2015 | — |  |  | $ | — |

As of December 31, 2015, all compensation costs related to unvested Lexicon Acquisition-related Awards and deferred cash consideration were recognized.
In addition, certain Lexicon employees received deferred compensation of $1,892, which vested over two years. Compensation expense related to these awards was $211 for the year ended December 31, 2013.
In February 2015, the Company agreed to release the transfer restrictions on £3,190 in deferred cash consideration paid and 531 shares granted in connection with the acquisition of Lexicon, in each case which vested on June 30, 2014 and otherwise became freely transferable on June 30, 2015.
2006 Stock Incentive Plan
In 2006 the Company’s stockholders and board of directors adopted the Evercore Partners Inc. 2006 Stock Incentive Plan (the "2006 Plan"). The 2006 Plan permits the Company to grant to key employees, directors and consultants incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, RSUs and other awards based on the Company’s Class A Shares. The total number of Class A Shares which may be issued under the 2006 Plan is 20,000 and the Company intends to use newly-issued Class A Shares to satisfy any awards under the 2006 Plan. Class A Shares underlying any award granted under the 2006 Plan that expire, terminate or are canceled or satisfied for any reason without being settled in stock again become available for awards under the 2006 Plan. During the second quarter of 2013, the Company's stockholders approved the amended and restated 2006 Evercore Partners Inc. Stock Incentive Plan. The amended and restated plan, among other things, authorizes an additional 5,000 shares of the Company's Class A Shares. The total shares available to be granted in the future under the 2006 Plan were 2,865 and 5,392 as of December 31, 2015 and 2014, respectively.
The Company also grants dividend equivalents, in the form of unvested RSU awards, concurrently with the payment of dividends to the holders of Class A Shares, on all unvested RSU grants awarded in conjunction with annual bonuses as well as new hire awards granted after April 2012. The dividend equivalents have the same vesting and delivery terms as the underlying RSU award.
The Company had 141 RSUs which were fully vested but not delivered as of December 31, 2015.
Deferred Cash Program
During the first quarter of 2011, the Company launched a deferred compensation program providing participants the ability to elect to receive a portion of their deferred compensation in cash, which is indexed to a notional investment portfolio. The Company awarded deferred cash compensation of $3,926 and $9,153, during the first quarters of 2012 and 2011, respectively, which will vest ratably over four years and require payment upon vesting. Compensation expense related to this deferred compensation program was $1,476, $3,683 and $3,804 for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, the total compensation cost related to the deferred compensation program not yet recognized was $126. The weighted-average period over which this compensation cost is expected to be recognized is one month.
Long-term Incentive Plan
During the third quarter of 2013, the Board of Directors of the Company approved the Long-term Incentive Plan, which provides for incentive compensation awards to Advisory Senior Managing Directors, excluding executive officers of the
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Company, who exceed defined benchmark results over a four-year performance period beginning January 1, 2013. These awards will be paid, in cash or Class A Shares, at the Company's discretion, in the two years following the performance period, to Senior Managing Directors employed by the Company at the time of payment. These awards are subject to retirement eligibility requirements. The Company periodically assesses the probability of the benchmarks being achieved and expenses the probable payout over the requisite service period of the award. The compensation expense related to these awards was $6,192, $5,700 and $1,584 for the years ended December 31, 2015, 2014 and 2013, respectively.
Equity Grants
2015 Equity Grants. During 2015, pursuant to the 2006 Plan, the Company granted employees 2,712 RSUs that are Service-based Awards. Service-based Awards granted during 2015 had grant date fair values of $48.41 to $58.47 per share. During 2015, 2,259 Service-based Awards vested and 167 Service-based Awards were forfeited. Compensation expense related to Service-based Awards was $105,496 for the year ended December 31, 2015.
The following table summarizes activity related to Service-based Awards during the year ended December 31, 2015:

| Service-based Awards
| Number of Shares |  | Grant Date Weighted Average Fair Value
Unvested Balance at January 1, 2015 | 5,348 |  |  | $ | 208,632 |
Granted | 2,712 |  |  | 142,912 |
Modified | — |  |  | — |
Forfeited | (167 | ) |  | (7,105 | )
Vested | (2,259 | ) |  | (82,836 | )
Unvested Balance at December 31, 2015 | 5,634 |  |  | $ | 261,603 |

As of December 31, 2015, the total compensation cost related to unvested Service-based Awards, excluding Acquisition-related Awards, not yet recognized was $140,709. The ultimate amount of such expense is dependent upon the actual number of Service-based Awards that vest. The Company periodically assesses the forfeiture rates used for such estimates. A change in estimated forfeiture rates would cause the aggregate amount of compensation expense recognized in future periods to differ from the estimated unrecognized compensation expense described herein. The weighted-average period over which this compensation cost is expected to be recognized is 20 months.
2014 Equity Grants. During 2014, pursuant to the 2006 Plan, the Company granted employees 2,071 RSUs that are Service-based Awards. Service-based Awards granted during 2014 had grant date fair values of $46.59 to $58.67 per share. During 2014, 3,245 Service-based Awards vested and 158 Service-based Awards were forfeited. Compensation expense related to Service-based Awards was $90,597 for the year ended December 31, 2014.
2013 Equity Grants. During 2013, pursuant to the 2006 Plan, the Company granted employees 2,398 RSUs that are Service-based Awards. Service-based Awards granted during 2013 had grant date fair values of $26.60 to $55.24 per share. During 2013, 2,188 Service-based Awards vested and 60 Service-based Awards were forfeited. Compensation expense related to Service-based Awards, excluding compensation expense related to the amortization of LP Units, was $79,678 for the year ended December 31, 2013.
Employee Loans Receivable
Periodically, the Company provides new and existing employees with cash payments in the form of loans and/or other cash awards which are subject to ratable vesting terms with service requirements ranging from one to five years. Generally, the terms of these awards include a requirement of either full or partial repayment of these awards based on the terms of their employment agreements with the Company. In circumstances where the employee meets the Company's minimum credit standards, the Company amortizes these awards to compensation expense over the relevant service period which is generally the period they are subject to forfeiture. Compensation expense related to these awards was $14,564, $13,851 and $7,433 for the years ended December 31, 2015, 2014 and 2013, respectively. The remaining unamortized amount of these awards was $24,311 as of December 31, 2015.
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(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Other
In conjunction with the restructuring of our investment in Atalanta Sosnoff, the Company incurred expense included in Special Charges of $6,333 related to the conversion of certain of Atalanta Sosnoff’s profits interests to equity, resulting in an increase to Additional Paid in Capital of $6,333 for the year ended December 31, 2015.
The total income tax benefit related to share-based compensation arrangements recognized in the Company’s Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013 was $36,755, $34,375 and $29,497, respectively.
During the fourth quarter of 2013, the Board of Directors of the Company agreed to release the transfer restrictions associated with 1,267 Class A LP Units and 610 Restricted Class A Shares held by certain employees of the Company.
During the first quarter of 2016, as part of the 2015 bonus awards, the Company granted to certain employees approximately 2,600 unvested RSUs pursuant to the 2006 Plan. These awards will generally vest over four years. In addition, during the first quarter of 2016, the Company granted approximately $40,000 of deferred cash to certain employees, a portion of which is pursuant to the deferred cash compensation programs and a portion of which is subject to claw-back provisions.
Separation Benefits
The Company granted separation benefits to certain employees, resulting in expense included in Employee Compensation and Benefits of approximately $6,766, $5,671 and $4,834 for the years ended December 31, 2015, 2014 and 2013, respectively. In conjunction with these arrangements, the Company distributed cash payments of $3,805, $3,415 and $3,314 for the years ended December 31, 2015, 2014 and 2013, respectively. The Company also granted separation benefits to certain employees, resulting in expense included in Special Charges of approximately $1,863 and $3,372 for the years ended December 31, 2015 and 2014, respectively. In conjunction with these arrangements, the Company distributed cash payments of $487 and $238 for the years ended December 31, 2015 and 2014, respectively. See Note 5 for further information.
Note 18 – Commitments and Contingencies
Operating Leases – The Company leases office space under non-cancelable lease agreements, which expire on various dates through 2025. The Company reflects lease expense over the lease terms on a straight-line basis. Occupancy lease agreements, in addition to base rentals, generally are subject to escalation provisions based on certain costs incurred by the landlord. Occupancy and Equipment Rental on the Consolidated Statements of Operations includes occupancy rental expense relating to operating leases of $34,180, $27,375 and $23,905 for the years ended December 31, 2015, 2014 and 2013, respectively.
In conjunction with the lease of office space, the Company has entered into letters of credit in the amounts of approximately $5,086 and $3,308, which are secured by cash and included in Other Assets on the Company’s Consolidated Statements of Financial Condition as of December 31, 2015 and 2014, respectively.
The Company has entered into various operating leases for the use of certain office equipment. Rental expense for office equipment totaled $1,990, $1,640 and $1,049 for the years ended December 31, 2015, 2014 and 2013, respectively. Rental expense for office equipment is included in Occupancy and Equipment Rental on the Consolidated Statements of Operations.
As of December 31, 2015, the approximate aggregate minimum future payments required on the operating leases are as follows:

2016 | 29,305 |
2017 | 28,395 |
2018 | 27,564 |
2019 | 27,640 |
2020 | 26,907 |
Thereafter | 55,028 |
Total | $ | 194,839 |

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Private Equity
As of December 31, 2015, the Company had unfunded commitments for capital contributions of $8,162 to private equity funds. These commitments will be funded as required through the end of each private equity fund’s investment period, subject to certain conditions. Such commitments are satisfied in cash and are generally required to be made as investment opportunities are consummated by the private equity funds.
On February 11, 2010, the Company announced the formation of a strategic alliance to pursue private equity investment opportunities with Trilantic and to collaborate on the future growth of Trilantic’s business. See Note 9 for further information.
Under the terms of the acquisition agreement for Protego, the Company is obligated to pay the partners that sold Protego 90% of the return proceeds and performance fees received from Protego's investment in the general partner of the Discovery Fund. During 2014, the Company received distributions from Discovery Americas Associated L.P., the general partner of the Discovery Fund. Accordingly, as of December 31, 2015, the Company recorded Goodwill of $4,713 pursuant to this agreement. The carrying value of the Company's investment in the Discovery Fund is $6,632 at December 31, 2015. See Note 9 for further information.
Lines of Credit
ECB maintains a line of credit with BBVA Bancomer to fund its trading activities on an intra-day and overnight basis. The intra-day facility has a maximum aggregate principal amount of approximately $11,560 and is secured by trading securities. No interest is charged on the intra-day facility. The overnight facility is charged the Inter-Bank Balance Interest Rate plus 10 basis points. There have been no significant draw downs on ECB’s line of credit since August 10, 2006. The line of credit is renewable annually.
On June 26, 2015, Evercore Partners Services East L.L.C. ("East"), a wholly-owned subsidiary of the Company, increased its line of credit from First Republic Bank to an aggregate principal amount of up to $75,000, to be used for working capital and other corporate activities, including, but not limited to, the repurchase of the Company's stock from time to time. This facility is secured by (i) cash and cash equivalents of East held in a designated account with First Republic Bank, (ii) certain of East's intercompany receivables and (iii) third party accounts receivable of EGL. Drawings under this facility bear interest at the prime rate. The facility was renewed on June 26, 2015 and the maturity date was extended to June 27, 2016. The Company drew down $45,000 on this facility on February 5, 2015, which was repaid as of June 30, 2015. On January 15, 2016, the line of credit from First Republic Bank was decreased to an aggregate principal amount of up to $50,000. In addition, the agreement was modified to impose similar quarterly financial covenants as the Company agreed to in the New Loan with Mizuho, including (i) a Minimum Consolidated Tangible Net Worth, (ii) a Minimum Unencumbered Liquid Asset Ratio and (iii) a Maximum Consolidated Leverage Ratio. On January 27, 2016, the Company drew down $50,000 on this facility.
Tax Receivable Agreements - As of December 31, 2015, the Company estimates the contractual obligations related to the Tax Receivable Agreements to be $197,674. The Company expects to pay to the counterparties to the Tax Receivable Agreements $11,638 within one year or less, $23,713 in one to three years, $25,590 in three to five years and $136,733 after five years.
Other Commitments
During the first quarter of 2015, in conjunction with the Company entering into a strategic alliance with Luminis Partners ("Luminis"), the Company committed to loan Luminis $5,500. The Company paid Luminis $3,500 pursuant to the loan agreement during the year ended December 31, 2015, which is included within Other Assets on the Company's Consolidated Statement of Financial Condition as of December 31, 2015, with the remaining $2,000 due from the Company on demand. The Company may acquire a 20% interest in Luminis in 2017.
On October 31, 2014, the Company closed on its acquisition of the operating businesses of ISI. Following the closing of the transactions, the Company combined ISI's business with the Company's existing Institutional Equities business within the Investment Banking segment. See Note 4 for further information related to our commitment in this transaction.
In addition, the Company enters into commitments to pay contingent consideration related to certain of its acquisitions. At December 31, 2015, the Company had a remaining commitment for contingent consideration related to its acquisition of Protego in 2006, as well as commitments related to its acquisition of a boutique advisory business in 2014 and its acquisition of Kuna & Co. KG in July 2015.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Contingencies
In the normal course of business, from time to time the Company and its affiliates are involved in judicial or regulatory proceedings, arbitration or mediation concerning matters arising in connection with the conduct of its businesses, including contractual and employment matters. In addition, Mexican, United Kingdom, Hong Kong, Singapore, Canadian and United States government agencies and self-regulatory organizations, as well as state securities commissions in the United States, conduct periodic examinations and initiate administrative proceedings regarding the Company’s business, including, among other matters, accounting and operational matters, that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer, investment advisor, or its directors, officers or employees. In view of the inherent difficulty of determining whether any loss in connection with such matters is probable and whether the amount of such loss can be reasonably estimated, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, the Company cannot estimate the amount of such loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, fine, penalty or other relief, if any, might be. Subject to the foregoing, the Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company. Provisions for losses are established in accordance with ASC 450, "Contingencies" when warranted. Once established, such provisions are adjusted when there is more information available or when an event occurs requiring a change.
In January 2015, Donna Marie Coburn filed a proposed class action complaint against ETC in the U.S. District Court for the District of Columbia, in which she purports to represent a class of participants in the J.C. Penney Corporation Inc. Savings, Profit-Sharing and Stock Ownership Plan (the "Plan") whose participant accounts held J.C. Penney stock at any time between May 15, 2012 and the present. The complaint alleges that ETC breached its fiduciary duties under the Employee Retirement Income Security Act by causing the Plan to invest in J.C. Penney stock during that period and claims the Plan suffered losses of approximately $300 million due to declines in J.C. Penney stock. The plaintiff seeks the recovery of alleged Plan losses, attorneys’ fees, other costs, and other injunctive and equitable relief. The Company believes that it has meritorious defenses against these claims and intends to vigorously defend against them. ETC is indemnified by J.C. Penney, and ultimately the Plan, for reasonable attorneys’ fees and other legal expenses, which would be refunded should ETC not prevail. On April 13, 2015, ETC filed an answer along with a motion to dismiss. On June 13, 2015 Plaintiffs filed an opposition to ETC’s motion to dismiss and on July 13, 2015, ETC filed its reply to Plaintiffs’ opposition. On February 17, 2016, the U.S. District Court for the District of Columbia granted Evercore’s motion to dismiss without prejudice.
Note 19 – Regulatory Authorities
EGL is a U.S. registered broker-dealer and is subject to the net capital requirements of Rule 15c3-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Under the Alternative Net Capital Requirement, EGL's minimum net capital requirement is $250. EGL’s regulatory net capital as of December 31, 2015 and 2014 was $79,019 and $74,080, respectively, which exceeded the minimum net capital requirement by $78,769 and $73,830, respectively.
On December 31, 2015, the operations of International Strategy & Investment Group L.L.C. were transferred to EGL.
Certain other non-U.S. subsidiaries are subject to various securities and banking regulations and capital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in which they operate. These subsidiaries are in excess of their local capital adequacy requirements at December 31, 2015.
ETC, which is limited to fiduciary activities, is regulated by the Office of the Comptroller of the Currency ("OCC") and is a member bank of the Federal Reserve System. The Company, Evercore LP and ETC are subject to written agreements with the OCC that, among other things, require the Company and Evercore LP to (1) maintain at least $5,000 in Tier 1 capital in ETC (or such other amount as the OCC may require), (2) maintain liquid assets in ETC in an amount at least equal to the greater of $3,500 or 90 days coverage of ETC’s operating expenses and (3) provide at least $10,000 of certain collateral held in a segregated account at a third-party depository institution. The collateral is included in Assets Segregated for Bank Regulatory Requirements on the Consolidated Statements of Financial Condition. The Company was in compliance with the aforementioned agreements as of December 31, 2015.
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Note 20 – Income Taxes
As a result of the Reorganization, the operating business entities of the Company were restructured and a portion of the Company’s income is subject to U.S. federal, state, local and foreign income taxes and is taxed at the prevailing corporate tax rates. Taxes Payable as of December 31, 2015 and 2014 were $20,886 and $2,515, respectively.
The following table presents the U.S. and non-U.S. components of Income before income tax expense:

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
U.S. | $ | 81,157 |  |  | $ | 124,747 |  |  | $ | 89,821 |
Non-U.S. | 38,736 |  |  | 30,883 |  |  | 28,735 |
Income before Income Tax Expense (a) | $ | 119,893 |  |  | $ | 155,630 |  |  | $ | 118,556 |

(a) | From continuing operations, net of Noncontrolling Interest from continuing operations.

The components of the provision for income taxes from continuing operations reflected on the Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013 consist of:

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Current: |  |  |  |  |
Federal | $ | 56,064 |  |  | $ | 33,814 |  |  | $ | 24,607 |
Foreign | 9,798 |  |  | 10,513 |  |  | 11,982 |
State and Local | 14,795 |  |  | 10,114 |  |  | 7,541 |
Total Current | 80,657 |  |  | 54,441 |  |  | 44,130 |
Deferred: |  |  |  |  |
Federal | (1,196 | ) |  | 15,104 |  |  | 5,992 |
Foreign | 659 |  |  | (3,080 | ) |  | 4,733 |
State and Local | (3,090 | ) |  | 2,291 |  |  | 8,834 |
Total Deferred | (3,627 | ) |  | 14,315 |  |  | 19,559 |
Total | $ | 77,030 |  |  | $ | 68,756 |  |  | $ | 63,689 |

A reconciliation between the federal statutory income tax rate from continuing operations and the Company’s effective income tax rate for the years ended December 31, 2015, 2014 and 2013 is as follows:

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Reconciliation of Federal Statutory Tax Rates: |  |  |  |  |
U.S. Statutory Tax Rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Increase Due to State and Local Taxes | 7.0 | % |  | 6.0 | % |  | 5.3 | %
Rate Benefits as a Limited Liability Company/Flow Through | (5.9 | )% |  | (4.2 | )% |  | (7.0 | )%
Foreign Taxes | 1.5 | % |  | 0.4 | % |  | 3.2 | %
Non-Deductible Expenses (1) | 19.9 | % |  | 1.1 | % |  | 3.4 | %
Valuation Allowances | — | % |  | 0.9 | % |  | — | %
Write Down of Deferred Tax Asset | — | % |  | — | % |  | 6.8 | %
Other Adjustments | (0.3 | )% |  | (0.2 | )% |  | (0.7 | )%
Effective Income Tax Rate | 57.2 | % |  | 39.0 | % |  | 46.0 | %

(1) | Primarily related to non-deductible share-based compensation expense.

Undistributed earnings of certain foreign subsidiaries totaled approximately $5,378 as of December 31, 2015. Deferred taxes have not been provided on the undistributed earnings of certain foreign subsidiaries, as the Company considers these amounts to be indefinitely reinvested to finance international growth and expansion. As of December 31, 2015, unrecognized net deferred tax liability attributable to those reinvested earnings would have aggregated approximately $1,598. In the event
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
that such amounts were ever remitted, loaned to the Company, or if the stock in the foreign subsidiary was sold, these earnings could become subject to U.S. Federal tax and an income tax provision, if any, would be recognized at that time.
Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the Consolidated Statements of Financial Condition. These temporary differences result in taxable or deductible amounts in future years. Details of the Company’s deferred tax assets and liabilities as of December 31, 2015 and 2014 were as follows:

| December 31,
| 2015 |  | 2014
Current Deferred Tax Assets (1): |  |  |
Step up in tax basis due to the exchange of LP Units for Class A Shares | $ | — |  |  | $ | 13,096 |
Total Current Deferred Tax Asset | $ | — |  |  | $ | 13,096 |
Long-term Deferred Tax Assets: |  |  |
Depreciation and Amortization | $ | 29,498 |  |  | $ | 25,978 |
Compensation and Benefits | 35,120 |  |  | 32,535 |
Step up in tax basis due to the exchange of LP Units for Class A Shares | 215,827 |  |  | 208,970 |
Other | 38,349 |  |  | 27,419 |
Total Long-term Deferred Tax Assets | $ | 318,794 |  |  | $ | 294,902 |
Long-term Deferred Tax Liabilities: |  |  |
Goodwill, Intangible Assets and Other | $ | 19,169 |  |  | $ | 27,396 |
Total Long-term Deferred Tax Liabilities | $ | 19,169 |  |  | $ | 27,396 |
Net Long-term Deferred Tax Assets Before Valuation Allowance | $ | 299,625 |  |  | $ | 267,506 |
Valuation Allowance | (1,510 | ) |  | (1,605 | )
Net Long-term Deferred Tax Assets | $ | 298,115 |  |  | $ | 265,901 |

(1) | The Company adopted ASU 2015-17 prospectively as of December 31, 2015 and changed its presentation of deferred tax assets and liabilities such that the Company classifies all deferred tax assets and liabilities as noncurrent. See Note 2 for further information.

The increase in net deferred tax assets from December 31, 2014 to December 31, 2015 was partially attributable to an increase in the tax basis of the tangible and intangible assets of Evercore LP, which resulted from the 2015 LP Unit exchanges. During 2015, the LP holders exchanged 314 Class A LP Units for Class A Shares, which resulted in an increase in the tax basis of the tangible and intangible assets of Evercore LP. Further, the exchange of 277 of such Class A LP Units triggered an additional liability under the tax receivable agreement that was entered into in 2006 between the Company and the LP Unit holders. The agreement provides for a payment to the LP Unit holders of 85% of the cash tax savings (if any), resulting from the increased tax benefits from the exchange and for the Company to retain 15% of such benefits. Accordingly, Deferred Tax Assets – Non-Current, Amounts Due Pursuant to Tax Receivable Agreements and Additional Paid-In-Capital increased $7,812, $6,641 and $1,172, respectively, on the Company’s Consolidated Statement of Financial Condition as of December 31, 2015. See Note 14 for further discussion. This amount was offset by a $13,701 reduction in deferred tax assets related to the 2015 amortization of the tax basis in the tangible and intangible assets of Evercore LP.
Additionally, the increase in net deferred tax assets from December 31, 2014 to December 31, 2015 was also attributable to an increase of $3,520 related to the depreciation of fixed assets and amortization of intangible assets.
There was a net decrease of $8,227 in the deferred tax liabilities from December 31, 2014 to December 31, 2015, primarily related to the goodwill impairment in the Investment Management segment.
The Company reported an increase in deferred tax assets of $455 associated with changes in Unrealized Gain (Loss) on Marketable Securities and an increase of $8,492 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the year ended December 31, 2015. The Company reported an increase in deferred tax assets of $1,072 associated with changes in Unrealized Gain (Loss) on Marketable Securities and an increase of $5,129 associated with changes in Foreign Currency Translation Adjustment Gain (Loss), in Accumulated Other Comprehensive Income (Loss) for the year ended December 31, 2014.
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
The Company's affiliates generated approximately $5,054 of NYC unincorporated business tax credit carryforwards, which are set to expire in 2017. Management has weighed both the positive and negative evidence and determined that it was appropriate to establish a valuation allowance of $1,510, on the amount of credits that are not expected to be realized.
A reconciliation of the changes in tax positions for the years ended December 31, 2015, 2014 and 2013 is as follows:

| December 31,
| 2015 |  | 2014 |  | 2013
Beginning unrecognized tax benefit | $ | — |  |  | $ | 624 |  |  | $ | 98 |
Additions for tax positions of prior years | — |  |  | 276 |  |  | 526 |
Reductions for tax positions of prior years | — |  |  | — |  |  | — |
Lapse of Statute of Limitations | — |  |  | (98 | ) |  | — |
Decrease due to settlement with Taxing Authority | — |  |  | (802 | ) |  | — |
Ending unrecognized tax benefit | $ | — |  |  | $ | — |  |  | $ | 624 |

The Company classifies interest relating to tax matters and tax penalties as a component of income tax expense in its Consolidated Statements of Operations. Related to the unrecognized tax benefits, the Company did not recognize any interest and penalties during the year ended December 31, 2015. The Company recognized $191 of interest and penalties during the year ended December 31, 2014, prior to the settlement of the NYC UBT audit. The Company has $229 accrued for the payment of interest and penalties as of December 31, 2014, prior to the settlement of the audit.
The Company is subject to taxation in the U.S. and various state, local and foreign jurisdictions. The Company’s tax years for 2011 to present are subject to examination by the taxing authorities. The Company is currently under examination by New York City for tax years 2011 through 2013. With a few exceptions, the Company is no longer subject to U.S. federal, state, local or foreign examinations by taxing authorities for years before 2012.
Note 21 – Concentrations of Credit Risk
Financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, foreign government obligations and receivables from clients. The Company has placed substantially all of its Cash and Cash Equivalents in interest-bearing deposits in U.S. commercial banks and U.S. investment banks that meet certain rating and capital requirements. The Company’s foreign subsidiaries maintain substantially all of their Cash and Cash Equivalents in interest bearing accounts at large commercial banking institutions domiciled in their respective countries of operation. Concentrations of credit risk are limited due to the quality of the Company’s clients.
Credit Risks
The Company maintains its cash and cash equivalents with financial institutions with high credit ratings. At times, the Company may maintain deposits in federally insured financial institutions in excess of federally insured ("FDIC") limits or enter into sweep arrangements where banks will periodically transfer a portion of the Company's excess cash position to a money market fund. However, the Company believes that it is not exposed to significant credit risk due to the financial position of the depository institutions or investment vehicles in which those deposits are held.
As of December 31, 2015, the Company has securities purchased under agreements to resell of $2,191 for which the Company has received collateral with a fair value of $2,192. Additionally, the Company has securities sold under agreements to repurchase of $44,000, for which the Company has pledged collateral with a fair value of $44,063. The Company has established risk management procedures to monitor the exposure to concentrations of credit from Securities Purchased Under Agreements to Resell. The collateral for the receivables is primarily secured by Mexican government bonds and the Company monitors the collateral pledged under these agreements against their contract value from inception to maturity date.
Accounts Receivable consists primarily of advisory fees and expense reimbursements billed to clients. Receivables are reported net of any allowance for doubtful accounts. The Company maintains an allowance for bad debts to provide coverage for probable losses from customer receivables and derives the estimate through specific identification for the allowance for doubtful accounts and an assessment of the client’s creditworthiness. At December 31, 2015 and 2014 total receivables amounted to $175,497 and $136,280, respectively, net of an allowance. The Investment Banking and Investment Management receivables collection periods generally are within 90 days of invoice. The collection period for restructuring transactions and
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
private equity fee receivables may exceed 90 days. The Company recorded bad debt expense of approximately $1,314, $1,027 and $2,099 for the years ended December 31, 2015, 2014 and 2013, respectively.
With respect to the Company’s Marketable Securities portfolio, which is comprised of highly-rated corporate and municipal bonds, mutual funds and Seed Capital Investments, the Company manages its credit risk exposure by limiting concentration risk and maintaining investment grade credit quality. As of December 31, 2015, the Company had Marketable Securities of $43,787, of which 86% were corporate and municipal securities, primarily with S&P ratings ranging from AAA to BB+, and 14% were Seed Capital Investments and mutual funds.
Periodically, the Company provides compensation to new and existing employees in the form of loans and/or other cash awards, which include a requirement of either full or partial repayment of these awards based on the terms of their employment agreements with the Company. See Note 17 for further information.
Note 22 – Segment Operating Results
Business Segments – The Company’s business results are categorized into the following two segments: Investment Banking and Investment Management. Investment Banking includes providing advice to clients on significant mergers, acquisitions, divestitures and other strategic corporate transactions, as well as services related to securities underwriting, private fund placement services and commissions for agency-based equity trading services and equity research. Investment Management includes advising third-party investors in the Institutional Asset Management, Wealth Management and Private Equity sectors. On December 31, 2015 the Company deconsolidated the assets and liabilities of Atalanta Sosnoff and will account for its interest as an equity method investment from that date forward. On October 31, 2014, the Company acquired the operating businesses of ISI, which is included in the Investment Banking segment. On December 3, 2013, the Company sold its investment in Pan and the results are presented within Discontinued Operations. The following segment information reflects the Company's results from its continuing operations.
The Company’s segment information for the years ended December 31, 2015, 2014 and 2013 is prepared using the following methodology:

• | Revenue, expenses and income (loss) from equity method investments directly associated with each segment are included in determining pre-tax income.

• | Expenses not directly associated with specific segments are allocated based on the most relevant measures applicable, including headcount, square footage and other performance and time-based factors.

• | Segment assets are based on those directly associated with each segment, or for certain assets shared across segments; those assets are allocated based on the most relevant measures applicable, including headcount and other factors.

• | Investment gains and losses, interest income and interest expense are allocated between the segments based on the segment in which the underlying asset or liability is held.

Each segment’s Operating Expenses include: a) employee compensation and benefits expenses that are incurred directly in support of the segment and b) non-compensation expenses, which include expenses for premises and occupancy, professional fees, travel and entertainment, communications and information services, equipment and indirect support costs (including compensation and other operating expenses related thereto) for administrative services. Such administrative services include, but are not limited to, accounting, tax, legal, facilities management and senior management activities.
Other Expenses include the following:

• | Amortization of LP Units/Interests and Certain Other Awards - Includes amortization costs associated with the modification and vesting of Class A LP Units, the vesting of Class E LP Units and Class G and H LP Interests issued in conjunction with the acquisition of ISI and certain other related awards.

• | Other Acquisition Related Compensation Charges - Includes compensation charges associated with deferred consideration, retention awards and related compensation for Lexicon employees.

• | Special Charges - Includes expenses in 2015 primarily related to an impairment charge associated with the impairment of goodwill in the Company's Institutional Asset Management reporting unit and charges related to the restructuring of our investment in Atalanta Sosnoff, primarily related to the conversion of certain of Atalanta Sosnoff’s profits interests held by management to equity interests. Special Charges for 2015 also include separation benefits and costs associated with the termination of certain contracts within the Company’s Evercore ISI business, as well as the finalization of a matter associated with the wind-down of the Company’s U.S. Private Equity business. Special Charges in 2014

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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
primarily related to separation benefits and certain exit costs related to combining the equities business upon the ISI acquisition during 2014 and a provision recorded in 2014 against contingent consideration due on the 2013 disposition of Pan. Special Charges in 2013 includes expenses related to the write-off of intangible assets from the Company’s acquisition of Morse, Williams and Company, Inc.

• | Professional Fees - Includes expense associated with share based awards resulting from increases in the share price, which is required upon change in employment status.

• | Acquisition and Transition Costs - Includes professional fees for legal and other services incurred related to the Company’s acquisitions, as well as costs related to certain regulatory settlements and transitioning ISI’s infrastructure.

• | Fair Value of Contingent Consideration - Includes expense associated with changes in the fair value of contingent consideration issued to the sellers of certain of the Company’s acquisitions.

• | Intangible Asset and Other Amortization - Includes amortization of intangible assets and other purchase accounting-related amortization associated with certain acquisitions.

The Company evaluates segment results based on net revenues and pre-tax income, both including and excluding the impact of the Other Expenses.
The following information presents each segment’s contribution.

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Investment Banking |  |  |  |  |
Net Revenues (1) | $ | 1,130,915 |  |  | $ | 819,637 |  |  | $ | 670,785 |
Operating Expenses | 869,301 |  |  | 632,927 |  |  | 516,921 |
Other Expenses (2) | 108,739 |  |  | 25,109 |  |  | 33,740 |
Operating Income | 152,875 |  |  | 161,601 |  |  | 120,124 |
Income from Equity Method Investments | 978 |  |  | 495 |  |  | 2,906 |
Pre-Tax Income from Continuing Operations | $ | 153,853 |  |  | $ | 162,096 |  |  | $ | 123,030 |
Identifiable Segment Assets | $ | 1,097,373 |  |  | $ | 934,648 |  |  | $ | 693,890 |
Investment Management |  |  |  |  |
Net Revenues (1) | $ | 92,358 |  |  | $ | 96,221 |  |  | $ | 94,643 |
Operating Expenses | 77,231 |  |  | 86,547 |  |  | 81,885 |
Other Expenses (2) | 39,332 |  |  | 328 |  |  | 2,707 |
Operating Income (Loss) | (24,205 | ) |  | 9,346 |  |  | 10,051 |
Income from Equity Method Investments | 5,072 |  |  | 4,685 |  |  | 5,420 |
Pre-Tax Income (Loss) from Continuing Operations | $ | (19,133 | ) |  | $ | 14,031 |  |  | $ | 15,471 |
Identifiable Segment Assets | $ | 381,798 |  |  | $ | 511,908 |  |  | $ | 486,893 |
Total |  |  |  |  |
Net Revenues (1) | $ | 1,223,273 |  |  | $ | 915,858 |  |  | $ | 765,428 |
Operating Expenses | 946,532 |  |  | 719,474 |  |  | 598,806 |
Other Expenses (2) | 148,071 |  |  | 25,437 |  |  | 36,447 |
Operating Income | 128,670 |  |  | 170,947 |  |  | 130,175 |
Income from Equity Method Investments | 6,050 |  |  | 5,180 |  |  | 8,326 |
Pre-Tax Income from Continuing Operations | $ | 134,720 |  |  | $ | 176,127 |  |  | $ | 138,501 |
Identifiable Segment Assets | $ | 1,479,171 |  |  | $ | 1,446,556 |  |  | $ | 1,180,783 |

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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)

(1) | Net revenues include Other Revenue, net, allocated to the segments as follows:

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Investment Banking (A) | $ | (2,945 | ) |  | $ | (1,722 | ) |  | $ | 3,979 |
Investment Management (B) | (2,771 | ) |  | (2,530 | ) |  | (1,116 | )
Total Other Revenue, net | $ | (5,716 | ) |  | $ | (4,252 | ) |  | $ | 2,863 |

(A) | Investment Banking Other Revenue, net, includes interest expense on the Senior Notes, New Loan, subordinated borrowings and line of credit of $6,041, $4,470 and $4,386 for the years ended December 31, 2015, 2014 and 2013, respectively, and changes in amounts due pursuant to the Company's tax receivable agreement of $5,524 for the year ended December 31, 2013.

(B) | Investment Management Other Revenue, net, includes interest expense on the Senior Notes, New Loan and line of credit of $3,576, $3,770 and $3,702 for the years ended December 31, 2015, 2014 and 2013, respectively, and changes in amounts due pursuant to the Company's tax receivable agreement of $1,381 for the year ended December 31, 2013.

(2) | Other Expenses are as follows:

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Investment Banking |  |  |  |  |
Amortization of LP Units / Interests and Certain Other Awards | $ | 83,673 |  |  | $ | 3,399 |  |  | $ | 17,817 |
Other Acquisition Related Compensation Charges | 1,537 |  |  | 7,939 |  |  | 15,923 |
Special Charges | 2,151 |  |  | 4,893 |  |  | — |
Professional Fees | — |  |  | 1,672 |  |  | — |
Acquisition and Transition Costs | 4,879 |  |  | 4,712 |  |  | — |
Fair Value of Contingent Consideration | 2,704 |  |  | — |  |  | — |
Intangible Asset and Other Amortization | 13,795 |  |  | 2,494 |  |  | — |
Total Investment Banking | 108,739 |  |  | 25,109 |  |  | 33,740 |
Investment Management |  |  |  |  |
Amortization of LP Units and Certain Other Awards | — |  |  | — |  |  | 2,209 |
Special Charges | 38,993 |  |  | — |  |  | 170 |
Acquisition and Transition Costs | 11 |  |  | — |  |  | — |
Intangible Asset and Other Amortization | 328 |  |  | 328 |  |  | 328 |
Total Investment Management | 39,332 |  |  | 328 |  |  | 2,707 |
Total Other Expenses | $ | 148,071 |  |  | $ | 25,437 |  |  | $ | 36,447 |

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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Geographic Information – The Company manages its business based on the profitability of the enterprise as a whole.
The Company’s revenues were derived from clients and private equity funds located and managed in the following geographical areas:

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Net Revenues: (1) |  |  |  |  |
United States | $ | 900,672 |  |  | $ | 608,631 |  |  | $ | 532,615 |
Europe and Other | 287,884 |  |  | 248,815 |  |  | 145,267 |
Latin America | 40,433 |  |  | 62,664 |  |  | 84,683 |
Total | $ | 1,228,989 |  |  | $ | 920,110 |  |  | $ | 762,565 |

(1) Excludes Other Revenue and Interest Expense.
The Company’s total assets are located in the following geographical areas:

| For the Years Ended December 31,
| 2015 |  | 2014
Total Assets: |  |  |
United States | $ | 1,135,570 |  |  | $ | 1,099,363 |
Europe and Other | 221,358 |  |  | 160,934 |
Latin America | 122,243 |  |  | 186,259 |
Total | $ | 1,479,171 |  |  | $ | 1,446,556 |

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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
Note 23 – Evercore Partners Inc. (Parent Company Only) Financial Statements
EVERCORE PARTNERS INC.
(parent company only)
CONDENSED STATEMENTS OF FINANCIAL CONDITION

| December 31,
| 2015 |  | 2014
ASSETS |  |  |
Equity Investment in Subsidiary | $ | 534,258 |  |  | $ | 571,649 |
Deferred Tax Asset | 287,281 |  |  | 270,373 |
Goodwill | 15,236 |  |  | 15,236 |
Other Assets | — |  |  | 3,402 |
TOTAL ASSETS | $ | 836,775 |  |  | $ | 860,660 |
LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |
Liabilities |  |  |
Current Liabilities |  |  |
Payable to Related Party | $ | 11,638 |  |  | $ | 10,833 |
Taxes Payable | 14,761 |  |  | — |
Other Current Liabilities | 538 |  |  | 2,067 |
Total Current Liabilities | 26,937 |  |  | 12,900 |
Amounts Due Pursuant to Tax Receivable Agreement | 186,036 |  |  | 191,253 |
Long-term Debt - Notes Payable | 119,250 |  |  | 105,226 |
TOTAL LIABILITIES | 332,223 |  |  | 309,379 |
Stockholders' Equity |  |  |
Common Stock |  |  |
Class A, par value $0.01 per share (1,000,000,000 shares authorized, 55,249,559 and 46,414,240 issued at December 31, 2015 and 2014, respectively, and 39,623,271 and 36,255,124 outstanding at December 31, 2015 and 2014, respectively) | 552 |  |  | 464 |
Class B, par value $0.01 per share (1,000,000 shares authorized, 25 and 27 issued and outstanding at December 31, 2015 and 2014, respectively) | — |  |  | — |
Additional Paid-In-Capital | 1,210,742 |  |  | 950,147 |
Accumulated Other Comprehensive Income (Loss) | (34,539 | ) |  | (20,387 | )
Retained Earnings (Deficit) | (27,791 | ) |  | (17,814 | )
Treasury Stock at Cost (15,626,288 and 10,159,116 shares at December 31, 2015 and 2014, respectively) | (644,412 | ) |  | (361,129 | )
TOTAL STOCKHOLDERS' EQUITY | 504,552 |  |  | 551,281 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 836,775 |  |  | $ | 860,660 |

See notes to parent company only financial statements.
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
EVERCORE PARTNERS INC.
(parent company only)
CONDENSED STATEMENTS OF OPERATIONS

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
REVENUES |  |  |  |  |
Interest Income | $ | 7,818 |  |  | $ | 8,341 |  |  | $ | 14,993 |
TOTAL REVENUES | 7,818 |  |  | 8,341 |  |  | 14,993 |
Interest Expense | 7,818 |  |  | 8,341 |  |  | 8,088 |
NET REVENUES | — |  |  | — |  |  | 6,905 |
EXPENSES |  |  |  |  |
TOTAL EXPENSES | — |  |  | — |  |  | — |
OPERATING INCOME | — |  |  | — |  |  | 6,905 |
Equity in Income of Subsidiary | 103,931 |  |  | 141,612 |  |  | 87,317 |
Provision for Income Taxes | 61,068 |  |  | 54,738 |  |  | 40,960 |
NET INCOME | $ | 42,863 |  |  | $ | 86,874 |  |  | $ | 53,262 |

See notes to parent company only financial statements.
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
EVERCORE PARTNERS INC.
(parent company only)
CONDENSED STATEMENTS OF CASH FLOWS

| For the Years Ended December 31,
| 2015 |  | 2014 |  | 2013
CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |  |
Net Income | $ | 42,863 |  |  | $ | 86,874 |  |  | $ | 53,262 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |  |  |  |  |
Undistributed Income of Subsidiary | (103,931 | ) |  | (141,612 | ) |  | (87,317 | )
Deferred Taxes | (1,685 | ) |  | (15,887 | ) |  | (28,745 | )
Accretion on Long-term Debt | 1,603 |  |  | 2,000 |  |  | 1,851 |
(Increase) Decrease in Operating Assets: |  |  |  |  |
Other Assets | 3,402 |  |  | 3,255 |  |  | (6,656 | )
Increase (Decrease) in Operating Liabilities: |  |  |  |  |
Taxes Payable | 14,761 |  |  | — |  |  | 11,872 |
Other Liabilities | — |  |  | — |  |  | 1,706 |
Net Cash Provided by (Used in) Operating Activities | (42,987 | ) |  | (65,370 | ) |  | (54,027 | )
CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |  |
Investment in Subsidiary | 82,703 |  |  | 105,600 |  |  | 90,949 |
Net Cash Provided by Investing Activities | 82,703 |  |  | 105,600 |  |  | 90,949 |
CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |  |
Purchase of Evercore LP Units | — |  |  | (1,476 | ) |  | (6,832 | )
Exercise of Warrants, Net | 6,416 |  |  | — |  |  | — |
Dividends | (46,132 | ) |  | (38,754 | ) |  | (30,090 | )
Net Cash Provided by (Used in) Financing Activities | (39,716 | ) |  | (40,230 | ) |  | (36,922 | )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | — |  |  | — |  |  | — |
CASH AND CASH EQUIVALENTS—Beginning of Year | — |  |  | — |  |  | — |
CASH AND CASH EQUIVALENTS—End of Year | $ | — |  |  | $ | — |  |  | $ | — |
SUPPLEMENTAL CASH FLOW DISCLOSURE |  |  |  |  |
Dividend Equivalents Issued | $ | 6,514 |  |  | $ | 6,038 |  |  | $ | 5,989 |
Exchange of Notes Payable as Consideration for Exercise of Warrants | $ | 118,347 |  |  | $ | — |  |  | $ | — |

See notes to parent company only financial statements.
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
EVERCORE PARTNERS INC.
(parent company only)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note A – Organization
Evercore Partners Inc. (the "Company") was incorporated as a Delaware corporation on July 21, 2005. The Company did not begin meaningful operations until the reorganization discussed below. Pursuant to a reorganization into a holding company structure, the Company became a holding company and its sole asset is a controlling equity interest in Evercore LP. As the sole general partner of Evercore LP, the Company operates and controls all of the business and affairs of Evercore LP and, through Evercore LP and its subsidiaries, continues to conduct the business now conducted by these subsidiaries.
Note B – Significant Accounting Policies
Basis of Presentation. The Statements of Financial Condition, Operations and Cash Flows have been prepared in accordance with U.S. GAAP.
Equity in Income of Subsidiary. The Equity in Income of Subsidiary represents the Company’s share of income from Evercore LP.
Note C – Stockholders’ Equity
The Company is authorized to issue 1,000,000 Class A Shares, par value $0.01 per share, and 1,000 shares of Class B common stock, par value $0.01 per share. All Class A Shares and shares of Class B common stock vote together as a single class. At December 31, 2015, the Company has issued 55,250 Class A Shares. The Company canceled four shares of Class B common stock, which were held by certain limited partners of Evercore LP during the twelve months ended December 31, 2015. During 2015, the Company purchased 996 Class A Shares primarily from employees at values ranging from $47.56 to $59.02 per share primarily for the net settlement of stock-based compensation awards and 4,471 Class A Shares at market values ranging from $47.10 to $57.03 per share pursuant to the Company’s share repurchase program. The result of these purchases was an increase in Treasury Stock of $283,283 on the Company’s Statement of Financial Condition as of December 31, 2015. During the year ended December 31, 2015, the Company declared and paid dividends of $1.15 per share, totaling $46,326 which were wholly funded by the Company’s sole subsidiary, Evercore LP. Dividends are paid and treasury shares are repurchased by a subsidiary of Evercore Partners Inc.
As discussed in Note 17 to the consolidated financial statements, both the LP Units and RSUs are exchangeable into Class A Shares on a one-for-one basis once vested.
Note D – Issuance of Notes Payable and Warrants
On August 21, 2008, the Company entered into the Purchase Agreement with Mizuho pursuant to which Mizuho purchased from the Company Senior Notes and Warrants expiring 2020. Mizuho exercised in full the outstanding Warrants in November 2015 and paid the exercise price by surrender of the entire issue of the Senior Notes and payment of $11,020 in cash. On November 2, 2015 the Company entered into a senior credit facility with the New York branch of Mizuho pursuant to which it borrowed, concurrently with the closing of the offering, $120,000 in a new term loan. See Note 12 to the consolidated financial statements.
Note E – Commitments and Contingencies
As of December 31, 2015, as discussed in Note 12 to the consolidated financial statements, the Company estimates the contractual obligations related to the New Loan to be $133,514. Pursuant to the New Loan, we expect to make payments to the notes’ holder of $3,101 within one year or less, $42,162 in one to three years and $88,251 in three to five years.
As of December 31, 2015, as discussed in Note 18 to the consolidated financial statements, the Company estimates the contractual obligations related to the Tax Receivable Agreements to be $197,674. The company expects to pay to the counterparties to the Tax Receivable Agreement $11,638 within one year or less, $23,713 in one to three years, $25,590 in three to five years and $136,733 after five years.
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EVERCORE PARTNERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars and share / unit amounts in thousands, except per share amounts, unless otherwise noted)
SUPPLEMENTAL FINANCIAL INFORMATION
(dollars in thousands, except per share data)
Consolidated Quarterly Results of Operations (unaudited)
The following represents the Company’s unaudited quarterly results for the years ended December 31, 2015 and 2014. These quarterly results were prepared in accordance with U.S. GAAP and reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results.

| For the Three Months Ended
| December 31, 2015 |  | September 30, 2015 |  | June 30, 2015 |  | March 31, 2015
Net Revenues | $ | 408,243 |  |  | $ | 308,951 |  |  | $ | 268,096 |  |  | $ | 237,983 |
Total Expenses | 333,580 |  |  | 297,053 |  |  | 236,985 |  |  | 226,985 |
Income Before Income from Equity Method Investments and Income Taxes | 74,663 |  |  | 11,898 |  |  | 31,111 |  |  | 10,998 |
Income from Equity Method Investments | 2,016 |  |  | 929 |  |  | 1,998 |  |  | 1,107 |
Income Before Income Taxes | 76,679 |  |  | 12,827 |  |  | 33,109 |  |  | 12,105 |
Provision for Income Taxes | 46,703 |  |  | 7,392 |  |  | 16,723 |  |  | 6,212 |
Net Income | 29,976 |  |  | 5,435 |  |  | 16,386 |  |  | 5,893 |
Net Income (Loss) Attributable to Noncontrolling Interest | 9,374 |  |  | (1,762 | ) |  | 5,622 |  |  | 1,593 |
Net Income Attributable to Evercore Partners Inc. | $ | 20,602 |  |  | $ | 7,197 |  |  | $ | 10,764 |  |  | $ | 4,300 |
Net Income Per Share Attributable to Evercore Partners Inc. Common Shareholders |  |  |  |  |  |  |
Basic | $ | 0.53 |  |  | $ | 0.20 |  |  | $ | 0.30 |  |  | $ | 0.12 |
Diluted | $ | 0.45 |  |  | $ | 0.16 |  |  | $ | 0.26 |  |  | $ | 0.10 |
Dividends Declared Per Share of Class A Common Stock | $ | 0.31 |  |  | $ | 0.28 |  |  | $ | 0.28 |  |  | $ | 0.28 |

| For the Three Months Ended
| December 31, 2014 |  | September 30, 2014 |  | June 30, 2014 |  | March 31, 2014
Net Revenues | $ | 321,888 |  |  | $ | 227,161 |  |  | $ | 217,696 |  |  | $ | 149,113 |
Total Expenses | 254,036 |  |  | 187,815 |  |  | 174,661 |  |  | 128,399 |
Income Before Income from Equity Method Investments and Income Taxes | 67,852 |  |  | 39,346 |  |  | 43,035 |  |  | 20,714 |
Income from Equity Method Investments | 1,799 |  |  | 1,102 |  |  | 2,038 |  |  | 241 |
Income Before Income Taxes | 69,651 |  |  | 40,448 |  |  | 45,073 |  |  | 20,955 |
Provision for Income Taxes | 30,542 |  |  | 15,264 |  |  | 15,387 |  |  | 7,563 |
Net Income | 39,109 |  |  | 25,184 |  |  | 29,686 |  |  | 13,392 |
Net Income Attributable to Noncontrolling Interest | 11,377 |  |  | 875 |  |  | 5,421 |  |  | 2,824 |
Net Income Attributable to Evercore Partners Inc. | $ | 27,732 |  |  | $ | 24,309 |  |  | $ | 24,265 |  |  | $ | 10,568 |
Net Income Per Share Attributable to Evercore Partners Inc. Common Shareholders |  |  |  |  |  |  |
Basic | $ | 0.76 |  |  | $ | 0.67 |  |  | $ | 0.68 |  |  | $ | 0.30 |
Diluted | $ | 0.66 |  |  | $ | 0.58 |  |  | $ | 0.58 |  |  | $ | 0.25 |
Dividends Declared Per Share of Class A Common Stock | $ | 0.28 |  |  | $ | 0.25 |  |  | $ | 0.25 |  |  | $ | 0.25 |

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Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. | Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act as of the end of the period covered by this report. Based upon that evaluation and subject to the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective to accomplish their objectives at the reasonable assurance level.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is identified in Exchange Act Rules 13a-15(f). Management has assessed the effectiveness of its internal control over financial reporting as of December 31, 2015 based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as the "COSO" criteria. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In making the assessment, management used the framework in Internal Control - Integrated Framework" (2013) promulgated by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our internal controls over financial reporting were effective as of December 31, 2015.
The Company’s independent registered public accounting firm has issued its written attestation report on the Company’s internal control over financial reporting, as included below.
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Evercore Partners Inc.:
New York, New York
We have audited the internal control over financial reporting of Evercore Partners Inc. and subsidiaries (the "Company") as of December 31, 2015, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2015 of the Company and our report dated February 24, 2016 expressed an unqualified opinion on those financial statements.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 24, 2016
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Changes in Internal Controls over Financial Reporting
During the fourth quarter of 2015, the Company completed the integration of ISI’s financial systems and processes. There were no changes during the three months ended December 31, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act).
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Item 9B. | Other Information

None.
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PART III

Item 10. | Directors, Executive Officers and Corporate Governance

The information regarding directors and executive officers set forth under the caption "Election of Directors" and "Executive Officers" in the Proxy Statement is incorporated herein by reference.
The information regarding compliance with Section 16(a) of the Exchange Act set forth under the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy Statement is incorporated herein by reference.
The information regarding our Code of Business Conduct and Ethics, our audit committee and our audit committee financial expert under the caption "Corporate Governance" in the Proxy Statement is incorporated herein by reference.
The Company posts its Code of Business Conduct and Ethics on the Corporate Governance webpage within the Investor Relations section of its website at http://ir.evercore.com under the link "Governance Documents". The Company’s Code of Business Conduct and Ethics applies to all directors, officers and employees, including our chairmans, president and chief executive officer, our chief financial officer and our principal accounting officer. We will post any amendments to the Code of Business Conduct and Ethics, and any waivers that are required to be disclosed by the rules of either the SEC or the NYSE, on our website within the required periods.

Item 11. | Executive Compensation

The information contained in the sections captioned "Compensation of Our Named Executive Officers", "Director Compensation" and "Compensation Committee Report" of the Proxy Statement is incorporated herein by reference.
Information regarding our compensation committee and compensation committee interlocks under the caption "Corporate Governance – Committees of the Board" is incorporated herein by reference.

Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Securities Authorized for Issuance under Equity Compensation Plans at December 31, 2015

|  | Number of Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |  | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights(1) |  | Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column)
Equity compensation plans approved by shareholders |  | 5,800,552 |  |  | — |  |  | 2,864,885 |
Equity compensation plans not approved by shareholders |  | — |  |  | — |  |  | — |
Total |  | 5,800,552 |  |  | — |  |  | 2,864,885 |

(1) | To date, we have issued RSUs which by their nature have no exercise price.

The information contained in the section captioned "Security Ownership of Certain Beneficial Owners and Management" of the Proxy Statement is incorporated herein by reference.

Item 13. | Certain Relationships and Related Transactions and Director Independence

The information contained in the sections captioned "Related Person Transactions and Other Information" and "Corporate Governance-Director Independence" in the Proxy Statement is incorporated herein by reference.

Item 14. | Principal Accountant Fees and Services

The information regarding our independent registered public accounting firm fees and services in the section captioned "Ratification of Independent Registered Public Accounting Firm" of the Proxy Statement is incorporated herein by reference.
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PART IV

Item 15. | Exhibits and Financial Statement Schedules

1. | Financial Statements

The consolidated financial statements required to be filed in the Form 10-K are listed in Part II, Item 8 hereof.

2. | Financial Data Schedules

All schedules have been omitted because they are not applicable, not required, or the information required is included in the financial statements or notes thereto.

3. | Exhibits

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
Exhibit Index

Exhibit Number |  | Description
2.1 |  | Deed, dated as of June 7, 2011, by and between Evercore Partners Inc. and the Sellers named therein, regarding the sale and purchase of The Lexicon Partnership LLP(22)
3.1 |  | Amended and Restated Certificate of Incorporation of the Registrant(1)
3.2 |  | Amended and Restated Bylaws of the Registrant(13)
4.1 |  | Equity Holders Agreement by and between Evercore Partners Inc. and Mizuho Corporate Bank, dated as of August 21, 2008(10)
4.2 |  | Indenture between Evercore Partners Inc. and The Bank of New York Mellon, as trustee, dated as of August 28, 2008(11)
4.3 |  | Warrant, dated as of August 28, 2008(11)
10.1 |  | Tax Receivable Agreement, dated as of August 10, 2006(2)
10.2 |  | Registration Rights Agreement, dated as of August 10, 2006(2)
10.3 |  | *Employment Agreement between the Registrant and Roger C. Altman(2)
10.4 |  | *Employment Agreement between the Registrant and Pedro Aspe(2)
10.5 |  | *Employment Agreement between the Registrant and Robert B. Walsh(6)
10.6 |  | *Evercore Partners Inc. 2006 Stock Incentive Plan(1)

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10.7 |  | *Evercore Partners Inc. 2006 Stock Incentive Plan(3)
10.8 |  | *Evercore Partners Inc. 2006 Annual Incentive Plan(1)
10.9 |  | *Employment Agreement between the Registrant and Adam B. Frankel(1)
10.10 |  | Form of Indemnification Agreement between the Registrant and each of its directors(1)
10.11 |  | Evercore Partners II L.L.C. Limited Liability Company Agreement(1)
10.12 |  | *Service Agreement between Bernard J. Taylor and Braveheart Financial Services Limited, dated as of July 31, 2006(9)
10.13 |  | Amended and Restated Limited Partnership Agreement with Evercore Mexico Partners II, L.P.(15)
10.14 |  | *Amendment to Employment Agreement dated November 7, 2008 with Dr. Pedro Carlos Aspe Armella(12)
10.15 |  | *Amendment to Employment Agreement dated February 12, 2008 with Roger C. Altman(8)
10.16 |  | *Amendment to Employment Agreement dated February 12, 2008 with Austin M. Beutner(8)
10.17 |  | * Amendment to Restricted Stock Unit Award Agreement with Adam B. Frankel(15)
10.18 |  | Purchase Agreement by and between Evercore Partners Inc. and Mizuho Corporate Bank, dated as of August 21, 2008(10)
10.19 |  | *Amendment to Employment Agreement dated March 26, 2009 with Roger C. Altman and Pedro Aspe(16)
10.20 |  | Subscription Agreement between the Registrant and Ralph L. Schlosstein(17)
10.20.1 |  | *Employment Agreement between the Registrant and Ralph L. Schlosstein(17)
10.21 |  | Contribution and Exchange Agreement, dated February 11, 2010(18)
10.22 |  | Purchase and Sale Agreement, dated as of March 4, 2010, by and among Evercore Partners Inc., Atalanta Sosnoff Capital LLC ("Atalanta Sosnoff"), Representative, LLC, in its capacity as the representative, the sellers and Martin T. Sosnoff(19)
10.23 |  | Registration Rights Agreement, dated May 28, 2010(20)
10.24 |  | *2011 Form Cash Unit Award Agreement(21)
10.25 |  | Amended and Restated Limited Liability Partnership Deed In Relation to Evercore Partners International LLP and Lexicon Partnership LLP, dated August 19, 2011(23)

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10.26 |  | Purchase and Sale Agreement, dated as of November 11, 2011, by and among Evercore, the Company, the Representative, in its capacity as the representative and the Sellers, regarding the purchase of a non-controlling interest in ABS Investment Management, LLC(24)
10.27 |  | *2012 Form Restricted Stock Unit Award Agreement for U.S. Employees(25)
10.28 |  | *2012 Form Restricted Stock Unit Award Agreement for the members of Evercore Partners International LLP(25)
10.29 |  | *2012 Form Restricted Stock Unit Award Agreement for non-U.S. Employees and non-members of Evercore Partners International LLP(25)
10.30 |  | *2012 Confidentiality, Non-Solicitation and Proprietary Information Agreement for Senior Managing Directors(25)
10.31 |  | *2012 Form Cash Unit Award Agreement(25)
10.32 |  | *Employment Agreement between the Registrant and Andrew Sibbald(27)
10.33 |  | Second Amended and Restated Limited Partnership Agreement with Evercore Mexico Partners III, L.P.(29)
10.34 |  | *Restricted Stock Unit Award Agreement effective as of January 29, 2013 between Evercore Partners Inc. and Ralph L. Schlosstein(26)
10.35 |  | *Amended and Restated Evercore Partners Inc. 2006 Stock Incentive Plan(28)
10.36 |  | *Form Restricted Stock Unit Award Agreement for U.S. Employees(29)
10.37 |  | *Form Restricted Stock Unit Award Agreement for the members of Evercore Partners International LLP(29)
10.38 |  | *Form Restricted Stock Unit Award Agreement for non-U.S. Employees and non-members of Evercore Partners International LLP(29)
10.39 |  | Contribution and Exchange Agreement, dated as of August 3, 2014, among ISI Holding, Inc., ISI Holding II, Inc., ISI Management Holdings LLC, ISI Holding, LLC, Edward S. Hyman, the holders of the Management Holdings management units set forth on Annex A thereto, Evercore LP, Evercore Partners Inc. and the Founder, solely in his capacity as the holders' representative(30)
10.40 |  | Fourth Amended and Restated Limited Partnership Agreement of Evercore LP, effective as of October 31, 2014(31)
10.41 |  | Supplement to Fourth Amended and Restated Limited Partnership Agreement of Evercore LP, effective as of October 31, 2014(31)
10.42 |  | *Employment Agreement between the Registrant and Edward S. Hyman(32)
10.43 |  | $120,000,000 Term Loan and Guarantee Agreement among Evercore Partners Inc. as Borrower, The Guarantors from time to time Party Thereto, The Several Lenders from time to time Parties Thereto, and Mizuho Bank, Ltd., as Administrative Agent, Dated as of November 2, 2015(33)

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10.44 |  | Modification Agreement, dated as of January 15, 2016, between Evercore Partners Services East L.L.C., as borrower, and First Republic Bank, as lender(34)
10.45 |  | Third Amended and Restated Promissory Note, dated as of January 15, 2016, made by Evercore Partners Services East L.L.C., as borrower(34)
10.46 |  | *Cash Unit Award Agreement(filed herewith)
10.47 |  | *Form Restricted Stock Unit Award Agreement for U.S. Employees(filed herewith)
11 |  | Not included as a separate exhibit - earnings per share can be determined from Note 16 to the consolidated financial statements included in Item 8 – Financial Statements and Supplemental Data.
21.1 |  | Subsidiaries of the Registrant (filed herewith)
23.1 |  | Consent of Deloitte & Touche LLP (filed herewith)
24.1 |  | Power of Attorney (included on signature page hereto)
31.1 |  | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) (filed herewith)
31.2 |  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) (filed herewith)
32.1 |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2 |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101 |  | The following materials from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2015, are formatted in XBRL (eXtensible Business Reporting Language); (i) Consolidated Statements of Financial Condition as of December 31, 2015 and 2014, (ii) Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013, (iv) Consolidated Statements of Changes In Equity for the years ended December 31, 2015, 2014 and 2013, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013, and (vi) Notes to Consolidated Financial Statements (filed herewith)

(1) | Incorporated by Reference to the Registrant’s Registration Statement on Form S-1 (Registration No. 333-134087), as amended, originally filed with the SEC on May 12, 2006.

(2) | Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-32975), for the period ended June 30, 2006.

(3) | Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-32975), for the period ended September 30, 2006.

(4) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 21, 2006.

(5) | Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-32975), for the period ended March 31, 2007.

(6) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on June 8, 2007.

(7) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on July 6, 2007.

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(8) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on February 12, 2008.

(9) | Incorporated by Reference to the Registrant’s Annual Report on Form 10-K (Commission File No. 001-32975), filed with the SEC on March 14, 2008.

(10) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on August 21, 2008.

(11) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on August 28, 2008.

(12) | Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-32975), for the period ended September 30, 2008.

(13) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on February 6, 2009.

(14) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on July 27, 2009.

(15) | Incorporated by Reference to the Registrant’s Annual Report on Form 10-K (Commission File No. 001-32975), filed with the SEC on March 13, 2009.

(16) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on March 27, 2009.

(17) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on May 22, 2009.

(18) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on February 16, 2010.

(19) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on March 5, 2010.

(20) | Incorporated by Reference to the Registrant’s Registration Statement on Form S-3 (Registration No. 833-171487), as amended, originally filed with the SEC on December 30, 2010.

(21) | Incorporated by Reference to the Registrant’s Annual Report on Form 10-K (Commission File No. 001-32975), filed with the SEC on March 9, 2011.

(22) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on June 9, 2011.

(23) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on August 25, 2011.

(24) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on November 14, 2011.

(25) | Incorporated by Reference to the Registrant’s Annual Report on Form 10-K (Commission File No. 001-32975), filed with the SEC on February 29, 2012.

(26) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on January 29, 2013.

(27) | Incorporated by Reference to the Registrant’s Annual Report on Form 10-K (Commission File No. 001-32975), filed with the SEC on February 27, 2013.

(28) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on June 20, 2013.

(29) | Incorporated by Reference to the Registrant’s Annual Report on Form 10-K (Commission File No. 001-32975), filed with the SEC on February 28, 2014.

(30) | Incorporated by Reference to the Registrant's Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on August 4, 2014.

(31) | Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-32975), for the period ended September 30, 2014.

(32) | Incorporated by Reference to the Registrant’s Annual Report on Form 10-K (Commission File No. 001-32975), filed with the SEC on February 27, 2015.

(33) | Incorporated by Reference to the Registrant’s Quarterly Report on Form 10-Q (Commission File No. 001-32975), for the period ended September 30, 2015.

(34) | Incorporated by Reference to the Registrant’s Current Report on Form 8-K (Commission File No. 001-32975), filed with the SEC on January 22, 2016.

* | Management contract or compensatory plan.

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Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| Evercore Partners Inc.
| By: | /S/ R OBERT B. W ALSH
| Name: | Robert B. Walsh
| Title: | Chief Financial Officer

Date: February 24, 2016
Each of the officers and directors of Evercore Partners Inc. whose signature appears below, in so signing, also makes, constitutes and appoints each of Ralph Schlosstein, Roger C. Altman, Robert B. Walsh, Adam B. Frankel and Paul Pensa, and each of them, his true and lawful attorneys-in-fact, with full power and substitution, for him in any and all capacities, to execute and cause to be filed with the SEC any and all amendments to the Report on Form 10-K, with exhibits thereto and other documents connected therewith and to perform any acts necessary to be done in order to file such documents, and hereby ratifies and confirms all that said attorneys-in-fact or their substitute or substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the 24th day of February, 2016.

Signature |  | Title
/s/ RALPH SCHLOSSTEIN |  | Chief Executive Officer (Principal Executive Officer) and Director
Ralph Schlosstein |  |
/s/ ROGER C. ALTMAN |  | Chairman
Roger C. Altman |
/s/ RICHARD I. BEATTIE |  | Director
Richard I. Beattie |
/s/ FRANCOIS DE ST. PHALLE |  | Director
Francois de St. Phalle |
/s/ GAIL BLOCK HARRIS |  | Director
Gail Block Harris |
/s/ CURT HESSLER |  | Director
Curt Hessler |
/s/ ROBERT B. MILLARD |  | Director
Robert B. Millard |
/s/ WILLARD J. OVERLOCK, JR. |  | Director
Willard J. Overlock, Jr. |
/s/ WILLIAM J. WHEELER |  | Director
William J. Wheeler |  |
/s/ ROBERT B. WALSH |  | Chief Financial Officer (Principal Financial Officer)
Robert B. Walsh |
/s/ PAUL PENSA |  | Controller (Principal Accounting Officer)
Paul Pensa |  |

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