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Business Changes and Developments Business Changes and Developments | 12 Months Ended
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Dec. 31, 2015
Business Combinations [Abstract] |
Business Changes and Developments | 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 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. 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 |
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 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.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1497-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1490-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1392-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1486-128463 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4845-128472 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1500-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1524-128463 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4922-128472 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4934-128472 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4926-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1383-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 + Details
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