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Segment Operating Results | 9 Months Ended
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Sep. 30, 2013
Segment Reporting [Abstract] |
Segment Operating Results | 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 a dvising third-party investors in the Institutional Asset Management, Wealth Management and Private Equity sectors. On December 28, 2012, the Company, through EWM, acquired Mt. Eden Investment Advisors, LLC (“Mt. Eden”), which is included in the Investment Management segment. The Company has determined Pan met the criteria to be classified as Held for Sale and to be presented within Discontinued Operations. The following segment information reflects the Company's results from its continuing operations. The Company’s segment information for the three and nine months ended September 30, 2013 and 2012 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: a) amortization costs associated with the modification and vesting of LP Units and certain other awards, b) the amortization of intangible assets associated with certain acquisitions, c) Special Charges incurred in connection with exiting facilities in the UK and d) compensation charges associated with deferred consideration, retention awards and related compensation for Lexicon employees. The Company evaluates segment results based on net revenue and pre-tax income, both including and excluding the impact of the Other Expenses. One client accounted for more than 10% of the Company’s consolidated Net Revenues for the three months ended September 30, 2013. The following information provides a reasonable representation of each segment’s contribution.
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2013 |  | 2012 |  | 2013 |  | 2012
Investment Banking |  |  |  |  |  |  |
Net Revenues (1) | $ | 163,645 |  |  | $ | 133,415 |  |  | $ | 477,846 |  |  | $ | 370,364 |
Operating Expenses | 126,472 |  |  | 106,897 |  |  | 369,927 |  |  | 304,556 |
Other Expenses (2) | 7,427 |  |  | 12,057 |  |  | 26,738 |  |  | 40,062 |
Operating Income | 29,746 |  |  | 14,461 |  |  | 81,181 |  |  | 25,746 |
Income (Loss) from Equity Method Investments | — |  |  | (200 | ) |  | 460 |  |  | 1,395 |
Pre-Tax Income from Continuing Operations | $ | 29,746 |  |  | $ | 14,261 |  |  | $ | 81,641 |  |  | $ | 27,141 |
Identifiable Segment Assets | $ | 611,266 |  |  | $ | 519,000 |  |  | $ | 611,266 |  |  | $ | 519,000 |
Investment Management |  |  |  |  |  |  |
Net Revenues (1) | $ | 23,683 |  |  | $ | 19,614 |  |  | $ | 68,910 |  |  | $ | 57,960 |
Operating Expenses | 20,968 |  |  | 19,152 |  |  | 61,853 |  |  | 58,467 |
Other Expenses (2) | 593 |  |  | 678 |  |  | 1,939 |  |  | 1,942 |
Operating Income (Loss) | 2,122 |  |  | (216 | ) |  | 5,118 |  |  | (2,449 | )
Income from Equity Method Investments | 562 |  |  | 615 |  |  | 1,873 |  |  | 2,124 |
Pre-Tax Income (Loss) from Continuing Operations | $ | 2,684 |  |  | $ | 399 |  |  | $ | 6,991 |  |  | $ | (325 | )
Identifiable Segment Assets | $ | 492,075 |  |  | $ | 509,764 |  |  | $ | 492,075 |  |  | $ | 509,764 |
Total |  |  |  |  |  |  |
Net Revenues (1) | $ | 187,328 |  |  | $ | 153,029 |  |  | $ | 546,756 |  |  | $ | 428,324 |
Operating Expenses | 147,440 |  |  | 126,049 |  |  | 431,780 |  |  | 363,023 |
Other Expenses (2) | 8,020 |  |  | 12,735 |  |  | 28,677 |  |  | 42,004 |
Operating Income | 31,868 |  |  | 14,245 |  |  | 86,299 |  |  | 23,297 |
Income from Equity Method Investments | 562 |  |  | 415 |  |  | 2,333 |  |  | 3,519 |
Pre-Tax Income from Continuing Operations | $ | 32,430 |  |  | $ | 14,660 |  |  | $ | 88,632 |  |  | $ | 26,816 |
Identifiable Segment Assets | $ | 1,103,341 |  |  | $ | 1,028,764 |  |  | $ | 1,103,341 |  |  | $ | 1,028,764 |
(1) | Net revenues include Other Revenue, net, allocated to the segments as follows:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2013 |  | 2012 |  | 2013 |  | 2012
Investment Banking (A) | $ | (330 | ) |  | $ | (435 | ) |  | $ | (966 | ) |  | $ | (2,407 | )
Investment Management (B) | (555 | ) |  | (820 | ) |  | (1,854 | ) |  | (2,274 | )
Total Other Revenue, net | $ | (885 | ) |  | $ | (1,255 | ) |  | $ | (2,820 | ) |  | $ | (4,681 | )
(A) | Investment Banking Other Revenue, net, includes interest expense on the Senior Notes of $1,098 and $3,281 for the three and nine months ended September 30, 2013, respectively, and $1,082 and $3,227 for the three and nine months ended September 30, 2012, respectively.
(B) | Investment Management Other Revenue, net, includes interest expense on the Senior Notes of $927 and $2,770 for the three and nine months ended September 30, 2013, respectively, and $914 and $2,727 for the three and nine months ended September 30, 2012, respectively.
(2) | Other Expenses are as follows:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2013 |  | 2012 |  | 2013 |  | 2012
Investment Banking |  |  |  |  |  |  |
Amortization of LP Units and Certain Other Awards | $ | 4,304 |  |  | $ | 4,866 |  |  | $ | 13,513 |  |  | $ | 13,577 |
Acquisition Related Compensation Charges | 3,123 |  |  | 6,802 |  |  | 13,225 |  |  | 22,799 |
Special Charges | — |  |  | — |  |  | — |  |  | 662 |
Intangible Asset Amortization | — |  |  | 389 |  |  | — |  |  | 3,024 |
Total Investment Banking | 7,427 |  |  | 12,057 |  |  | 26,738 |  |  | 40,062 |
Investment Management |  |  |  |  |  |  |
Amortization of LP Units and Certain Other Awards | 511 |  |  | 596 |  |  | 1,693 |  |  | 1,696 |
Intangible Asset Amortization | 82 |  |  | 82 |  |  | 246 |  |  | 246 |
Total Investment Management | 593 |  |  | 678 |  |  | 1,939 |  |  | 1,942 |
Total Other Expenses | $ | 8,020 |  |  | $ | 12,735 |  |  | $ | 28,677 |  |  | $ | 42,004 |
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 Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2013 |  | 2012 |  | 2013 |  | 2012
Net Revenues: (1) |  |  |  |  |  |  |
United States | $ | 131,499 |  |  | $ | 114,018 |  |  | $ | 379,950 |  |  | $ | 315,085 |
Europe and Other | 37,465 |  |  | 30,860 |  |  | 112,331 |  |  | 90,491 |
Latin America | 19,249 |  |  | 9,406 |  |  | 57,295 |  |  | 27,429 |
Total | $ | 188,213 |  |  | $ | 154,284 |  |  | $ | 549,576 |  |  | $ | 433,005 |
(1) | Excludes Other Revenue and Interest Expense.
The substantial majority of the Company’s long-lived assets are located in the United States and the United Kingdom.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 + Details
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