2006 HIGHLIGHTS AND ACHIEVEMENTS

“New York’s Law Firm of the Year”LAW BUSINESS RESEARCH, 2006

“Top 10 Family-Friendly Firm”YALE LAW WOMEN, 2006

2 B A N K I N G A N D A C Q U I S I T I O N F I N A N C E

4 C A P I T A L M A R K E T S

5 M E R G E R S & A C Q U I S I T I O N S

6 P R I V A T E E Q U I T Y

7 R E A L E S T A T E

8 L I T I G A T I O N

1 2 E U R O P E A N P R A C T I C E

1 4 A S I A N P R A C T I C E

1 6 L A T I N A M E R I C A N P R A C T I C E

1 8 B A N K R U P T C Y

1 8 T A X

1 8 E X E C U T I V E C O M P E N S A T I O N

1 9 E X E M P T O R G A N I Z A T I O N S

1 9 P R O B O N O

2 0 O U R A S S O C I A T E S

2 0 W O M E N ’ S I N I T I A T I V E

2 1 O U R N E W P A R T N E R S

ATTORNEY ADVERTISING

March 1, 2007

Dear Friends,

As we enter another exciting year for our Firm, we are reminded of the remark-

able success of our clients. We are invigorated by their many challenges and endless

innovations, and we are proud to support them with all of the talent of the Firm.

We are privileged to advise some of the world’s largest financial institutions,

insurers, manufacturers and service providers. Last year, we participated in the most

sophisticated mergers and financings of the year; litigated, successfully, the most complex

corporate disputes; and assisted the poor and the needy and the country’s great schools,

museums and hospitals. Our clients are leaders in the communities in which they

participate, from New York City, to California, to Europe and to Asia.

Our partners are recognized leaders in their fields. Two of them have been named

“Deal Makers of the Year” for 2006 and one has been named a “Rising Star” by a well

known legal journal. The head of our litigation practice has been named “Best Trial

Lawyer” and another partner, the “Best Antitrust Lawyer”. Needless to say, we are

proud of all our partners and the ongoing efforts they regularly make for our clients.

Perhaps most important, though, is our commitment to excellence in hiring

and developing our associate attorneys, who consistently rank as the top graduates

of the nation’s top law schools. They are the engine of our success, and we thank them,

again, for their professional commitment, resourcefulness and efficiency in client matters.

With more than seven hundred lawyers practicing in seven offices around the

world, we commit to you our integrity, professionalism and can-do approach.

We look forward to assisting you in the endeavors and challenges of 2007.

Sincerely,

Pete Ruegger Dick BeattieChairman of the Executive Committee Chairman

L E T T E R F R O M T H E F I R M

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#1 Overall Law Firm

#1 Borrower Law Firm

#1 Lender Law FirmLOAN PRICING CORPORATION, 2006

B A N K I N G R A N K I N G S

BANKING ANDACQUISITION FINANCE Simpson Thacher’s banking practice earned the most top rankings in the 2006 Loan Pricing Corporation year-end survey. During the year, the group advised on 140 lending transactions with an aggregate value of over $240 billion.

Recent credit representations included:

• Ford Motor Company, in connection with its $18.5

billion of secured credit facilities and $4.9 billion

of unsecured senior convertible notes. The transac-

tion closed in December 2006 and represents a

significant financing milestone both for Ford and

Simpson Thacher. The secured credit facilities

mark the largest leveraged financing of its kind

and the convertible notes offering is one of the

largest ever by a non-investment grade company.

• Citicorp USA, Inc. and JPMorgan Chase Bank,

N.A., as co-lead arrangers of a syndicate of lenders

in connection with $4.6 billion of bank financing

for General Motors Corporation and its subsidiary,

GM Canada, through a multicurrency, revolving

credit and letter of credit facility. This transaction

represented a major change in the structure of

GM’s bank facilities, as it was the first time the

automaker agreed to provide collateral to secure

its syndicated revolving credit facility.

• A consortium of Kohlberg Kravis Roberts & Co.

(“KKR”), Bain Capital LLC, Silver Lake Partners,

Apax Partners and AlpInvest that acquired NXP

B.V. (formerly known as Philips Semiconductors

International) in relation to $5 billion of bank and

bridge financings and $4.5 billion of high-yield

bond financing. The high-yield bond offering was

the largest European high-yield bond financing

and was the largest globally since RJR Nabisco’s

bond offering in 1989; the bridge financing was

the largest bridge-to-high yield ever funded.

• Goldman, Sachs & Co. Inc., American International

Group, Inc., The Carlyle Group, Riverstone Capital

Partners, company founder and management

in $8.6 billion of bank financing related to the

acquisition of Kinder Morgan, Inc., a US energy

infrastructure provider. This was the largest

energy-related buyout transaction to date.

• A consortium of buyers with respect to the acqui-

sition of TDC A/S, Denmark’s largest telecom

company, including multiple US-law and English-

law governed financing agreements. Debt

facilities included $9.6 billion of senior facilities,

$2.3 billion of bridge loans and $350 million of

pay-in-kind debt facilities.

• Lucite International, a UK-based international

specialty chemicals company, in approximately

$1.3 billion of borrowings in the form of a

pay-in-kind loan, designed for hedge fund and

high-yield bond investors, and more conventional

term and revolving credit facilities.

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CAPITAL MARKETS The Firm was active in 2006 representing issuers, investment banks and financial sponsors in numerous domestic and international equity, debt and other securities offerings. The Firm ranked number one as issuer’s counsel for US and Global IPOs, Global Equity Issuance and High-Yield Corporate Debt.*

Significant capital markets transactions

in 2006 included the representation of:

• MasterCard Incorporated, in connection with

its $2.6 billion initial public offering of Class A

common stock, which began trading on the

NYSE in May 2006. At the time, this IPO marked

the largest initial public offering in the US since

2004. MasterCard operates as a payment solutions

com-pany serving approximately 25,000 financial

institutions worldwide.

• KKR, in connection with the formation and

structuring of KKR Private Equity Investors, L.P.

(“KKR PEI”). KKR PEI’s investment objectives

are to invest in KKR’s private equity funds, to make

direct co-investments in portfolio companies of

KKR’s private equity funds and to pursue opportu-

nistic investments identified by KKR. The transac-

tion, completed in May 2006, was structured as a

$5 billion private offering of non-voting common

units in the US and abroad. This ground-breaking

transaction was the first in which a major US

leveraged buyout firm provided an opportunity

to invest indirectly in its private equity funds

and related transactions in the form of a publicly

listed security.

• Wachovia Capital Markets LLC, and the other under-

writers in the November 2006 initial public offering

of Eaton Vance Tax-Managed Diversified Equity

Income Fund. The offering raised $2.6 billion, and

was the largest NYSE-listed IPO of the year and

the largest closed-end fund offering in history.

• Goldman Sachs, sole underwriter of the $2 billion

follow-on common stock offering by Google Inc.,

the Mountain View, California-based technology

company. (We also represented the underwriters

in Google’s IPO in 2004.)

• JPMorgan, as underwriter and initial purchaser,

in a number of securities offerings, including for

Expedia, Inc., the online travel company, in a

$500 million Rule 144A senior note offering.

• Lehman Brothers, as underwriter and initial

purchaser, in a number of equity and debt deals,

including for Wal-Mart Stores, Inc., the global

retailer, in a $1.5 billion floating rate note offering.

*Thomson Financial, 2006

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“Global M&A Law Firm of the Year” Who’s Who Legal AwardsLAW BUSINESS RESEARCH, 2006

“M&A Team of the Year” (advising on a number of blockbuster deals)IFLR AMERICAS AWARDS, 2006

MERGERS & ACQUISITIONS Simpson Thacher plays a leading role in many of the most significant M&A deals in the world. In 2006, the Firm advised on more than 130 announced deals with an aggregate value of more than $520 billion.

Significant recent merger and acquisition

transactions included the representation of:

• Mellon Financial Corporation in its announced

$16.8 billion merger with The Bank of New York,

which will create the world’s largest securities

servicing and asset management firm.

• The independent directors, and a special committee

of the board of directors, of Biomet, Inc. in connec-

tion with Biomet’s announced $10.9 billion acquisi-

tion by a private equity consortium. Biomet is a

worldwide leader in the design and manufacture

of products for small joint replacements.

• KeySpan Corporation in its $7.3 billion sale to

National Grid plc, a transaction that will create

the third largest energy delivery utility in the US.

KeySpan is the fifth largest distributor of natural

gas in the US, and the largest generator of electri-

city in New York State.

• UBS AG, a premier global financial services firm,

in its $2.6 billion acquisition of Banco Pactual S.A.,

Brazil’s leading independent investment bank.

• Google Inc., the worldwide internet search leader,

in its $1.6 billion stock-for-stock acquisition of

YouTube, Inc., the online video-swapping service.

• Travelport Inc., the travel distribution services

leader, in its announced $1.4 billion acquisition

of Worldspan L.P.

• Barr Pharmaceuticals Inc. in its announced $2.2

billion acquisition of Pliva d.d., central Europe’s

largest drugmaker.

• VNU N.V., the global information and media

company, in its $10.3 billion sale to a private

equity consortium.

• Sirius Satellite Radio, in its pending $13 billion

stock-for-stock merger of equals with XM

Satellite Radio.

Defensive Advice

The Firm is also active in representing companies

worldwide in defending against unsolicited acquisi-

tion offers, including:

• Rinker Group, an Australian company, in defend-

ing against a $12 billion hostile tender offer by

Cemex, a Mexican company.

• Portugal Telecom, the leading fixed line, cellular

and cable provider in Portugal, against a $16

billion hostile bid by Sonaecom, a Portuguese

telecom company.

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PRIVATEEQUITY Simpson Thacher is the leading law firm in private equity transactions, advising on more than 50 deals in 2006 with an aggregate value of more than $200 billion.

The Firm has advised the acquirors on

the four largest buyouts in history:

• A consortium led by KKR and Texas Pacific Group

in the $45 billion pending acquisition of TXU

Corporation, the largest announced LBO in history.

• The Blackstone Group in its $39 billion acquisition

of Equity Office Properties Trust, the largest US

office-building owner and manager. This is the

largest completed LBO and the largest real estate

transaction in history.

• A group of private equity firms and founders

led by affiliates of Bain, KKR, Merrill Lynch Global

Private Equity and Dr. Thomas F. Frist, Jr., in their

$33 billion acquisition of HCA Inc., the largest

for-profit hospital operator in the US.

• KKR in its $31 billion acquisition of RJR Nabisco,

completed in 1989.

Other recent significant private equity deals

included the representation of:

• A consortium (including KKR, Silver Lake Partners

and AlpInvest Partners NV) in its $10.6 billion

acquisition of Royal Philips Electronics NV’s

semiconductor business, a world leader in silicon

systems and products.

• A consortium (including Thomas H. Lee Partners,

Warburg Pincus LLC, Goldman Sachs Capital

Partners and J.P. Morgan Partners, LLC) in its

$8.3 billion acquisition of ARAMARK Corp., a

major foodservice provider and uniform supplier.

• The Blackstone Group in its $4.3 billion acquisition

of Cendant Corp.’s Travelport Inc. unit, which

operates one of the world’s largest travel manage-

ment services.

• A management-led investor group in its $3.6 billion

acquisition of Kerzner International Limited, a

NYSE-listed company that owns and operates

Atlantis, a destination hotel and casino resort

on Paradise Island, Bahamas.

• A management-led investor group in its announced

$3.8 billion acquisition of Laureate Education, Inc.,

a provider of career-oriented programs to over

240,000 students throughout Latin America, Europe

and Asia.

Private Equity Funds Practice

Expert in fund formation for a wide variety of private

equity, hedge, real estate and mutual fund and other

investment products, the Firm served as fund counsel

during 2006 in the establishment of:

• Blackstone Capital Partners V (the largest single

private equity fund ever raised).

• Carlyle Asia Partners II (one of the largest pan-Asian

private equity funds ever raised).

• First Reserve Fund XI (the largest private equity fund

ever formed to make investments in the energy

industry) and J.C. Flowers II (the largest private

equity fund focused on financial institutions).

“#1 Private Equity Deals”BLOOMBERG, 2006

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REAL ESTATE In 2006, our Real Estate Group had an outstanding year, advising on US and worldwide realty transactions with an aggregate deal value in excess of $65 billion, including the acquisition of Equity Office Properties Trust by The Blackstone Group.

Noteworthy transactions included representation of:

• The Blackstone Group in its joint $8.9 billion acqui-

sition of Trizec Properties, Inc. with Brookfield

Properties Corporation, an office property corpo-

ration that owns, develops, and operates premier

assets in high-growth North American cities, in

the largest REIT acquisition of 2006.

• The Blackstone Group in its $5.6 billion acquisition

of CarrAmerica Realty Corporation, a publicly

traded real estate investment trust, in the largest

completed buyout of a public REIT.

• The Carlyle Group in connection with the $1.1 billion

recapitalization of several development sites within

Riverside South, a residential project in Manhattan.

• The Carlyle Group in connection with the $350

million sale of two Hilton Hotels in Manhattan.

• The Blackstone Group in connection with the

$440 million sale of Westin St. Francis Hotel in

San Francisco.

• The Blackstone Group in connection with approxi-

mately $3.5 billion of acquisitions of over 70 hotels

and resorts in Belgium, Czech Republic, France,

Germany, Netherlands, Sweden, and the United

Kingdom.

• Dune Real Estate Fund, a real estate investment

firm, in connection with the formation of a joint

venture to acquire and develop a new luxury

hotel in the meatpacking district of Manhattan.

L I T I G A T I O N

“ ‘Top-Tier’ Rankings for Commercial Litigation, Antitrust,

Insurance and Securities Litigation” CHAMBERS AND PARTNERS USA, 2006

Barry R. Ostrager, Head of Litigation, named “Business Litigation Trial Lawyer of the Year”

CHAMBERS AND PARTNERS, 2006

Kevin Arquit, Head of Antitrust, named “Antitrust Lawyer of the Year.”

CHAMBERS AND PARTNERS, 2006

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LITIGATION Our Litigation practice had another banner year in 2006, with significant successes in all of our major practice areas: antitrust, securities, general commercial, insurance, international arbitration, product liability and intellectual property.

Among other noteworthy successes in 2006, the Firm’s

litigators distinguished themselves having represented:

ANTITRUST

• Weyerhaeuser Company, one of the top US forest

products companies, in a series of monopolization

cases concerning its purchases of logs in the Pacific

Northwest. The Supreme Court vacated the original

jury verdict in a unanimous decision which estab-

lished the standard for evaluating the legality of a

predatory buying claim.

• adidas AG, the #2 maker of sporting goods world-

wide, in all aspects of its acquisition of Reebok,

including the antitrust regulatory review process.

The US Federal Trade Commission cleared the

acquisition without issuing a Second Request and

the European Commission cleared the acquisition

unconditionally at the close of the first phase.

• Virgin Atlantic Airways, the international jet fleet

owned by Richard Branson, in connection with the

inquiry by the US Department of Justice into the

pricing of fuel surcharges in the airline industry

and in the related class action litigation.

• Chevron Corp., the energy giant, in a Congressionally

mandated industry-wide investigation of pricing

practices.

SECURITIES

• American Electric Power Company, the largest

private utility holding company in the US, and

certain of its current and former directors and officers,

in winning the dismissal of a consolidated ERISA

class action relating to allegations of wash trades

and false reporting of natural gas pricing data.

This dismissal culminated four years of litigation

in which the Firm successfully achieved the dismis-

sal of federal court securities class actions, state

and federal court derivative actions, as well as

the federal court ERISA actions relating to these

same claims.

• Investment banking and issuer clients, including

JPMorgan, Lehman Brothers, Goldman Sachs,

Merrill Lynch, Sears/K-Mart, Toys “R” Us, HCA,

Sirius Satellite Radio, drugstore.com and NYFIX,

in obtaining dismissals of numerous securities and

shareholder derivative suits.

• Five of the six underwriters for Royal Ahold NV,

one of the world’s largest grocery retailers, in obtain-

ing the dismissal of all securities and ERISA class

actions based on Royal Ahold’s highly publicized

earnings restatements totaling $24.8 billion.

• Certain outside directors of HealthSouth Corporation,

a leading provider of physical therapy and rehabilita-

tion services, in settling all claims against them in

connection with a multi-billion dollar accounting

scandal, with bar orders prohibiting future claims,

and at no additional monetary expense to our client.

In addition to years of federal securities and ERISA

litigation, our representation also included clients’

testimony before Congress and a special board

committee investigating the accounting scandal, as

well as SEC and federal grand jury investigations.

ARBITRATION

• Major Korean and Japanese trading companies in

a multi-billion dollar ICC arbitration concerning the

Korea Deposit Insurance Corporation’s refusal to

honor purchase options.

• The New York Knicks basketball team and its owner

Cablevision Systems Corporation, in a highly

publicized arbitration with fired Knicks coach,

Larry Brown.

• ACE Bermuda, a global property and casualty insur-

ance and reinsurance organization, in a centi-million

dollar arbitration against World Omni in a two month

arbitration panel.

• Oil Basins Ltd., an Australian oil company, in an

arbitration award against the world’s largest mining

company related to Australian oil and gas royalties.

INSURANCE

• Swiss Re, the world’s largest reinsurer, in the

affirmance of the World Trade Center trial verdict

after a two month trial in which Simpson Thacher

acted as lead counsel for the insurer group.

• AIG, the leading international insurance organiza-

tion, in a centi-million dollar London arbitration

against one of the world’s largest pharmaceutical

companies involving insurance coverage for a

drug that the pharmaceutical company ultimately

pulled from the market after failing to disclose prior

knowledge of its hazards.

• Travelers Casualty and Surety Co., in the reversal by

the Second Circuit of a summary judgment decision

by the District of Connecticut on an issue of funda-

mental significance to the reinsurance industry:

whether a reinsurer is required by the follow-the-

fortunes doctrine to reimburse its reinsured for

payment of settled claims, as allocated by the rein-

sured. The Second Circuit additionally remanded

the case to the District Court for entry of summary

judgment in favor of our client.

• Citibank and JPMorgan Chase, in obtaining a sum-

mary judgment for full recovery on $50 million in

surety bonds.

• Trygg-Hansa AB, a Danish life insurance company,

in major multi-million dollar reinsurance arbitration

victories against the Burlington insurance companies.

INTELLECTUAL PROPERTY

• Intel Corp., the foremost semiconductor maker in

the world, in patent infringement actions in Federal

courts in Delaware and Texas, involving strained

silicon technology in processors and chipsets.

• Biosynexus, Inc., a marketer of bio-medical research

products and services, in the preliminary injunction

against two major pharmaceutical companies, halting

the transfer of valuable intellectual property.

• Weight Watchers International, Inc., the worldwide

provider of weight management services, in the

Second Circuit affirmance of a trademark infringe-

ment judgment.

PRODUCT LIABILITY

• Heineken USA Inc. and other major alcohol beverage

companies, in obtaining the dismissal of six class

action lawsuits for allegedly enticing underage

people with alcohol advertising.

• Argenbright Security, Inc., the manager of airport

security at Dulles International and Newark

International airports, in hundreds of cases related to

the 9/11 plane crashes into the World Trade Center

towers.

GOVERNMENT INVESTIGATIONS

• Individuals, business entities and special committees

in a wide-range of significant civil and criminal

government investigations and proceedings. These

included Federal and State grand jury proceedings,

SEC Enforcement proceedings and Department of

Justice and FTC antitrust investigations.

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TOP TIER RANKINGS

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C H A M B E R S G L O B A L 2 0 0 7 T O P T I E R R A N K I N G S

Banking & Finance

Capital Markets: Debt & Equity

Capital Markets: High Yield Products

Corporate / M&A

Private Equity: Buyouts

Private Equity: Funds

Capital Markets: Foreign (Japan)

Corporate / M&A: Foreign (Japan and South Korea)

C H A M B E R S U S A 2 0 0 6 T O P T I E R R A N K I N G S

Litigation: General Commercial

Litigation: Securities

Insurance: Dispute Resolution

Antitrust

Employee Benefits & Executive Compensation

Banking & Finance

Corporate / M&A

Capital Markets: Debt & Equity

Private Equity: Buyouts

Private Equity: Funds

“US Law Firm of the Year”THE LAWYER, 2006

Nominated “Best US or International Law Firm”

LEGAL BUSINESS AND LEGAL WEEK, 2006

“Best Global Legal Advisor”GLOBAL FINANCE, 2006

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The Firm represented private equity consortia

in four of Europe’s largest leveraged buy-outs:

• The 48.2 billion acquisition of NXP, the semi-

conductors business of Philips Electronics.

• The 44.0 billion acquisition of PagesJaunes Groupe,

the French Yellow Pages.

• The 44.0 billion acquisition of Kion Group, the

forklift business of German company Linde AG.

• The pending acquisition of German media company

ProSiebenSat.1, which, when completed, could

exceed 45 billion.

Other significant achievements of our

European practice in 2006 included:

• Augmenting the work of the acquisition finance

team on leveraged buy-outs with a range of other

credit transactions, such as Lucite’s $1.3 billion

recapitalization and NTL Inc.’s loan of £1.8 billion

for its merger with Telewest Global Inc.

• Ranking at the top of high-yield bond league

tables as a result both of issuers’ work and under-

writers’ representations in transactions such as

Impress Holdings’ $1.3 billion re-financing.

• Handling over $39 billion in debt offerings for

Kreditanstalt für Wiederaufbau, a German govern-

ment-owned development bank, as well as numerous

other debt and equity offerings for underwriters

and issuers.

• Advising on initial public offerings for Galp Energia,

the Portuguese national oil company, and for the

German manufacturers Demag Cranes AG and

Zumtobel AG.

• Representing Blackstone Real Estate Partners in more

than eight real estate acquisitions across Europe,

including the £1.1 billion purchase of Center Parcs

in the UK.

• Handling the worldwide merger control work for

adidas’ acquisition of Reebok and other noteworthy

transatlantic deals.

EUROPEANPRACTICE The past year saw a high level of merger and acquisition activity in Europe, with the Firm’s London office handling key M&A, financing and competition roles in many of Europe’s biggest deals.

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ASIAN PRACTICE The Firm’s Hong Kong and Tokyo offices are leaders in securi-ties and M&A transactions focused on the key markets of Greater China, Japan and Korea.

Recent activity included representation of:

• KKR in the formation of a $3.1 billion joint venture

with the Australian media company, Seven Network

Limited, in its $1.4 billion acquisition of Cleanaway

and Brambles Industrial Services in Australia;

and in the $900 million acquisition of the software

development and solutions business of Flextronics

AB in India.

• The issuer or underwriters in $11.5 billion of bank-

capital raising by Japanese banks, including all three

of Japan’s “mega banks”—Mizuho Financial Group,

Mitsubishi UFJ Financial Group and Sumitomo

Mitsui Financial Group.

• The underwriters in the largest Japanese IPO of 2006,

the $3 billion offering by Aozora Bank and secondary

offering by shareholders including the Government

of Japan.

• China Life Insurance Company, China’s largest

insurer, in a Citigroup-led consortium to acquire

Guangdong Development Bank Co., Ltd. for

$3.1 billion. This transaction was the largest acquisi-

tion to date of a majority stake in a Chinese financial

institution and one of the largest takeover battles in

China’s history.

• The initial purchasers, led by Goldman Sachs

International and Nomura Securities, in connection

with the initial public offering of Lotte Shopping Co.,

Korea’s largest department store chain. This was

the largest IPO ever by a Korean company, one

of the ten largest IPOs from Asia, and was named

“Deal of the Year” by Asian Counsel magazine.

• Focus Media Holding Ltd. in its announced $325

million merger with Target Media Holdings Ltd.

The transaction is one of the first private sector

mergers between two Chinese companies, each of

which has US backing. Focus Media operates the

largest out-of-home advertising network in China.

• Suntech Power Holdings Co., Ltd., a leading

NYSE-listed PV cell manufacturer based in China,

in its acquisition of MSK Corporation, one of Japan’s

largest PV manufacturers. This transaction marks

the first cross border acquisition by Suntech Power

and is one of the largest cross border acquisitions

by a non-government owned company out of

China to date.

• Best Buy Co., Inc., the specialty retailer of consumer

electronics, in its acquisition of a control stake in

Jiangsu Five Star, China’s fourth-largest appliance

and consumer electronics retailer.

• Mizuho Financial Group in its listing on the New

York Stock Exchange and registration with the

US Securities and Exchange Commission, the first

by a Japanese company since the enactment of the

Sarbanes-Oxley Act of 2002.

Simpson Thacher continues its growth in China, with plans to open its office in Beijing in Spring 2007. Our mission is to continue meeting the challenges and

needs of our clients as their businesses expand in the global market.

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“Asian-Counsel Deal of the Year 2006”—Lotte Shopping Co.

PACIFIC BUSINESS PRESS LTD, 2006

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“Latin American Deal of the Year 2006”—Cap Cana

LATIN LAWYER MAGAZINE, 2006

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LATIN AMERICAN PRACTICE Simpson Thacher enjoyed a record year in 2006 for its Latin American practice. The breadth of our practice refl ects the depth of our team and our ability to draw upon practitioners fl uent in Spanish and Portuguese with broad experience in the region.

Recent highlights included:

• In Brazil, the Firm played a leading role in the devel-

opment of the burgeoning Brazilian capital markets

by participating in 17 equity offerings over the past

two years, as well as debt offerings and acquisitions,

including the purchase of Banco Pactual by UBS.

• In Argentina, the Firm advised in the first successful

international equity offering since the convertibility

crisis.

• Representation of the sellers in connection with the

multi-jurisdictional sale to Citibank N.A. of Grupo

Financiero Uno, the largest credit card provider

in Central America with operations in Panama,

Guatemala, Nicaragua, Honduras and El Salvador.

Also included were the representations of:

• Perdigão S.A., a Brazilian food manufacturer, in a

$375 million, SEC-registered global offering of com-

mon shares and ADSs.

• Cap Cana, the premier golf resort, in a $250 million

note offering in connection with the development of

a luxury, multi-use resort in the Dominican Republic.

This transaction was named a 2006 Deal of the

Year by Latin Lawyer Magazine.

• SONDA S.A., the primary systems integrators and

IT service providers in Latin America, in connection

with its $213 million initial equity offering and

listing on the Santiago Stock Exchange.

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BANKRUPTCY Simpson Thacher plays a leading role in finding solu-tions for the complicated and unique problems that often arise in large multi-party cases.

Recent bankruptcy matters included representation of:

• Deutsche Bank and Credit Suisse First Boston in a

$2 billion DIP financing for Calpine, North America’s

leading geothermal power producer.

• JPMorgan in the $2.2 billion rights offering backstop

for Owens Corning, a major producer of insulation,

roofing and siding.

• JPMorgan Chase Bank, as Agent, under a $2 billion

secured bank facility in connection with an asbestos-

related Chapter 11 filing with over 100 entities,

filed in both the US and UK for Federal-Mogul

Corporation, one of the world’s largest makers

of autoparts.

• JPMorgan Chase Bank, as Agent, under a

$600 million senior credit facility, in connection with

the Chapter 11 case of Interstate Bakeries, the maker

of Wonder Bread, Hostess brand cakes and other

baked goods.

• Wachovia, as Agent, under an $830 million senior credit

facility in connection with multi-billion dollar adver-

sary proceedings against the former lenders to, and

investment banks for, Adelphia Inc., formerly one of

the largest cable television companies in the country.

TAX Simpson Thacher tax lawyers play a critical role in structuring mergers and acquisitions, real estate deals, capital markets transactions, the formation of investment pools and the settlement of litigations.

In the past year, their work was instrumental in:

• Blackstone’s acquisition of Equity Office Properties

• The formation of KKR PEI

• The acquisition of HCA

• The development of hybrid securities that provide

high equity credit to issuers

EXECUTIVE COMPENSATION The Executive Compensation and Employee Bene-fits practice group plays a vital role in all areas of our commercial practice.

Particularly in connection with the Firm’s mergers &

acquisitions and private equity funds practices, the

group advises on the structuring and implementation

of executive and employee compensation and equity

arrangements, deferred compensation and other

executive compensation, employment and severance

programs. They also offer expertise with respect to tax,

accounting and securities law issues related to the

implementation of qualified and non-qualified compen-

sation arrangements and the management of ERISA

fiduciary, plan assets, prohibited transaction and

potential Title IV concerns arising in connection with

venture capital investments and corporate transactions.

19

EXEMPT ORGANIZATIONS The Exempt Organizations group has advised a diverse group of clients, including Open Society Institute, Princeton University, Memorial Sloan-Ketter-ing Cancer Center, the Robin Hood Foundation, Doctors Without Borders USA, the Hearst Foundations and Channel 13.

Representations included:

• Advising clients on endowment investments in

over 100 private funds.

• Advising The Atlantic Philanthropies on charitable

grant-making questions, among various matters.

• Counseling the Global Alliance for Vaccination and

Immunization (GAVI) and American Friends of the

Louvre, on cross-border transactions.

• Advising clients with respect to the implications

of, and compliance with, the sweeping reforms

of interest to charitable organizations and their

donors in the Pension Protection Act of 2006,

signed into law by President Bush in August 2006.

PRO BONO Our commitment to public service and pro bono work is deep and abiding, and our recent achievements are of special impor-tance to us, our clients and the community at large.

In recent years, we have devoted more than 36,000

hours annually to pro bono projects, and our efforts

have been recognized with awards from a variety of

distinguished organizations. Such efforts range from

personal projects that are individually spearheaded by

Firm associates to large firm-wide representations that

are vital to the city, the nation and international affairs.

Recent highlights included:

• Serving as the lead trial and appellate counsel over the

past 12 years for the Campaign for Fiscal Equity in a

litigation seeking to secure the right to a constitution-

ally adequate education for New York City children.

The New York Court of Appeals issued a landmark

decision affirming the trial court’s ruling (after a

seven-month trial) that the New York City school

system did not provide students with the opportunity

to obtain a sound basic education as required by the

State constitution. As a result of this decision and

subsequent decisions in the case, billions of additional

dollars will be made available to support the educa-

tion of New York City public school children.

• Being honored with the first “Law Firm Pro Bono

Award” by The City Bar Justice Center in March

2006, in recognition of the Firm’s historic leadership

in the pro bono area, including our championing

such causes as the Justice Center’s Refugee Assis-

tance Project, the Vance Center for International

Justice Initiatives and the decade-long Campaign for

Fiscal Equity case referenced above.

City Bar Pro Bono AwardTHE CITY BAR JUSTICE CENTER, 2006

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OURASSOCIATES There is no typical Simpson Thacher lawyer. But they do share many common qualities.

We hire people of exceptional intelligence, academic

achievement and personal character who seek the

greatest of legal challenges. They are personable and

well-rounded. More than half of our new lawyers in

2006 had worked between college and law school.

Our lawyers come from big cities and small towns;

they come from six continents and speak over 35 lan-

guages. They are distinguished graduates of more than

50 of the top law schools and nearly 170 of the best

colleges and universities from around the world.

As part of our common commitment to excellence,

we believe diversity is essential to the long-term vitality

of the Firm in the global community and to our ability

to continue to provide the highest service to our clients.

And our lawyers are truly diverse—roughly half

of our associates are women; nearly 35 percent of our

new associates are people of color.

Across the Firm, we are committed to the hiring,

retention and success of lawyers of all backgrounds.

This takes the form of concerted efforts to ensure that

our lawyers share equally in opportunities for challeng-

ing work, for focused mentoring and networking and

for professional development. Improved diversity

fosters collaboration and team work. It encourages new

ideas and fresh viewpoints that promote creativity. It

improves our ability to serve our clients and their needs.

WOMEN’S INITIATIVE In May 2006, the Firm established the Women’s Committee, to provide top-level strategic direc-ion for our longstanding efforts to promote gender equality at the Firm. The Committee focuses on issues of recruiting, training and mentoring, work-family balance, election to partnership and leadership within the Firm and in the legal community, with the goal of attracting, retaining and promoting the country’s top female legal talent.

Within the first year, the Women’s Committee:

• Studied and reported on work/family issues and

mentoring initiatives

• Joined Catalyst and Flex Time Lawyers LLC

• Strengthened the Firm’s ties to women’s groups

in bar associations and law schools

• Hosted panels, speaker series and social events

for women attorneys

• Sponsored women client events

• Created on-site amenities for newly-returning mothers.

“Top 10 Family-Friendly Firm”YALE LAW WOMEN, 2006

OUR NEW PARTNERS Simpson Thacher

invited 13 associates to become new

partners of the Firm, effective the first

of January, 2007. Congratulations to all:

Barrie B. Covit Corporate, NY

John C. Ericson Corporate, NY

Michael J. Garvey Litigation, NY

Gregory T. Grogan Employee Benefits, NY

Farhad M. Karim Real Estate, London

Patrick E. King Litigation, Palo Alto

Sasan S. Mehrara Real Estate, NY

Arman Y. Oruc Litigation, DC

Ellen Reilly Patterson Corporate, NY

Nicholas J. Shaw Corporate, London

Chad A. Skinner Corporate, Palo Alto

Kathryn King Sudol Corporate, NY

George S. Wang Litigation, NY

In March 2006, the Firm also welcomed

Leiming Chen Corporate, Hong Kong

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www.simpsonthacher.com

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