RELATED-PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2017

RELATED-PARTY TRANSACTIONS

RELATED-PARTY TRANSACTIONS

10. RELATED‑PARTY TRANSACTIONS

Aircraft Lease—On August 30, 2014, a related party, Moelis & Company Manager LLC ("Manager"), acquired an aircraft with funds received solely from its managing member (Mr. Moelis). The aircraft is used and operated by the Company pursuant to a dry lease with Manager which terminates on December 31, 2019. The terms of the dry lease are comparable to the market rates of leasing from an independent third party. Pursuant to this dry lease arrangement, the lessee is obligated to bear its share of the costs of operating the aircraft. For the three months ended September 30, 2017 and 2016, the Company incurred $468 and $312 in aircraft lease costs to be paid to Manager, respectively, and $1,404 and $936 in aircraft costs for the nine months ended September 30, 2017 and 2016, respectively. In addition, Mr. Moelis is the other lessee of the aircraft and shares the operating and related costs of the plane in proportion to his respective use pursuant to a cost sharing and operating agreement.

Promissory Notes—As of September 30, 2017, there were $626 of unsecured promissory notes from employees held by the Company (December 31, 2016: $922). Any outstanding balances are reflected in other receivables on the condensed consolidated statements of financial condition. The notes held as of September 30, 2017 and December 31, 2016 bear a fixed interest rate of 4.00%. During each of the nine months ended September 30, 2017 and 2016, the Company received $705 and $0 of principal repayments and recognized interest income of $20 and $15, respectively, on such notes, which is included in other income and expenses on the condensed consolidated statements of operations.

Services Agreement—In connection with the Company’s IPO, the Company entered into a services agreement with a related party, Moelis Asset Management LP, whereby the Company provides certain administrative services, technology, and office space to Moelis Asset Management LP for a fee. This fee totaled $264 and $285 for the three months ended September 30, 2017 and 2016, respectively, and $868 and $996 for the nine months ended September 30, 2017 and 2016, respectively. The amount of the fee is based upon the estimated usage and related expense of all shared services between the Company and Moelis Asset Management LP during the relevant period, and will be assessed periodically by Management as per the terms of the agreement. As of September 30, 2017 and December 31, 2016, the Company had no balance due from Moelis Asset Management LP.

Moelis Australia—As of September 30, 2017 and December 31, 2016, the Company had a balance due from Moelis Australia of $438 and a net balance due to Moelis Australia of $38, respectively, which are reflected in other receivables on the condensed consolidated statements of financial condition. These balances consist of amounts due from or to Moelis Australia for advisory services performed as well as billable expenses incurred by the Company on behalf of Moelis Australia during the period. The relationship between the Company and Moelis Australia is governed by a services agreement.

Other Equity Method Investment—In June of 2014, the Company made an investment of $265 into an entity controlled by a related party, Moelis Asset Management LP. The Company has determined that it should account for this investment as an equity method investment on the condensed consolidated financial statements. For the three and nine months ended September 30, 2016, a loss of $9 and income of $1,721 was recorded on this investment, respectively, and the Company received cash distributions from this entity of $813. The investment was substantially liquidated during 2016. See Note 4 of the condensed consolidated financial statements included in this Form 10-Q for further information.

Revenues—From time to time, the Company enters into advisory transactions with Moelis Asset Management LP and its affiliates. The Company earned revenues associated with such transactions of $94 and $170 for the three months ended September 30, 2017 and 2016, respectively, and revenues of $1,240 and $7,186 for the nine months ended September 30, 2017 and 2016, respectively.