Partnership Capital Subject to Mandatory Redemption

12 Months Ended

Dec. 31, 2016

Partnership Capital Subject to Mandatory Redemption

NOTE 7 – PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION

The Partnership makes loans available to those general partners and, in limited circumstances, subordinated limited partners (in each case, other than members of the Executive Committee, as defined in the Partnership Agreement, which consists of the executive officers of the Partnership) who require financing for some or all of their Partnership capital contributions. In limited circumstances a general partner may withdraw from the Partnership and become a subordinated limited partner while he or she still has an outstanding Partnership loan. It is anticipated that, of the future general and subordinated limited partnership capital contributions (in each case, other than for Executive Committee members) requiring financing, the majority will be financed through Partnership loans. Loans made by the Partnership to such partners are generally for a period of one year but are expected to be renewed and bear interest at the interest rate defined in the loan documents. The Partnership recognizes interest income for the interest earned related to these loans. The outstanding amount of Partnership loans is reflected as a reduction to total Partnership capital. As of December 31, 2016 and 2015, the outstanding amount of Partnership loans was $266 and $218, respectively. Interest income earned from these loans, which is included in interest and dividends in the Consolidated Statements of Income, was $10, $8 and $7 for the years ended December 31, 2016, 2015 and 2014, respectively.

The minimum 7.5% annual return on the face amount of limited partnership capital was $68, $69 and $48 for the years ended December 31, 2016, 2015 and 2014, respectively. These amounts are included as a component of interest expense in the Consolidated Statements of Income.

The following table shows the roll forward of outstanding Partnership loans for the years ended December 31, 2016 and 2015:

	2016			2015
Partnership loans outstanding at beginning of year	$	218		$	198
Partnership loans issued during the year		146			119
Repayment of Partnership loans during the year		(98	)		(99	)
Total Partnership loans outstanding	$	266		$	218

The Partnership filed a Registration Statement on Form S-8 with the Securities and Exchange Commission ("SEC") on January 17, 2014, to register $350 of Interests to be issued pursuant to the Partnership's 2014 Employee Limited Partnership Interest Purchase Plan (the "Plan"). The Partnership previously issued $293 of Interests under the Plan. The remaining $57 of Interests may be issued under the Plan at the discretion of the Partnership in the future.