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Segment Operating Results
 3 Months Ended
Mar. 31, 2016
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 advising third-party investors in the Institutional Asset Management, Wealth Management and Private Equity sectors. On December 31, 2015, the Company deconsolidated the assets and liabilities of Atalanta Sosnoff, which was in the Investment Management segment, and accounted for its interest as an equity method investment from that date.
The Company’s segment information for the three months ended March 31, 2016 and 2015 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 the following:
•
Amortization of LP Units/Interests and Certain Other Awards - Includes amortization costs associated with the vesting of Class E LP Units and Class G and H LP Interests issued in conjunction with the acquisition of ISI and certain other related awards.
•
Other Acquisition Related Compensation Charges - Includes compensation charges in 2015 associated with deferred consideration, retention awards and related compensation for Lexicon employees.
•
Special Charges - Includes expenses in 2015 primarily related to separation benefits and costs associated with the termination of certain contracts within the Company’s Evercore ISI business, as well as the finalization of a matter associated with the wind-down of the Company’s U.S. Private Equity business.
•
Acquisition and Transition Costs - Includes professional fees for legal and other services incurred related to the Company’s acquisitions, as well as costs related to transitioning ISI’s infrastructure in 2015.
•
Fair Value of Contingent Consideration - Includes expense associated with changes in the fair value of contingent consideration issued to the sellers of certain of the Company’s acquisitions.
•
Intangible Asset and Other Amortization - Includes amortization of intangible assets and other purchase accounting-related amortization associated with certain acquisitions.
The Company evaluates segment results based on net revenues and pre-tax income, both including and excluding the impact of the Other Expenses.
No client accounted for more than 10% of the Company's consolidated Net Revenues for the three months ended March 31, 2016.
The following information presents each segment’s contribution.
 
For the Three Months Ended March 31,
 
2016
 
2015
Investment Banking
 
 
 
Net Revenues (1)
$
239,713

 
$
216,580

Operating Expenses
192,264

 
171,364

Other Expenses (2)
35,028

 
32,235

Operating Income
12,421

 
12,981

Income (Loss) from Equity Method Investments
(272
)
 
(37
)
Pre-Tax Income
$
12,149

 
$
12,944

Identifiable Segment Assets
$
940,859

 
$
769,746

Investment Management
 
 
 
Net Revenues (1)
$
18,000

 
$
21,403

Operating Expenses
14,214

 
19,956

Other Expenses (2)
82

 
3,430

Operating Income (Loss)
3,704

 
(1,983
)
Income from Equity Method Investments
1,559

 
1,144

Pre-Tax Income (Loss)
$
5,263

 
$
(839
)
Identifiable Segment Assets
$
343,818

 
$
519,463

Total
 
 
 
Net Revenues (1)
$
257,713

 
$
237,983

Operating Expenses
206,478

 
191,320

Other Expenses (2)
35,110

 
35,665

Operating Income
16,125

 
10,998

Income from Equity Method Investments
1,287

 
1,107

Pre-Tax Income
$
17,412

 
$
12,105

Identifiable Segment Assets
$
1,284,677

 
$
1,289,209

(1)
Net revenues include Other Revenue, net, allocated to the segments as follows:
 
For the Three Months Ended March 31,
 
2016
 
2015
Investment Banking (A)
$
(913
)
 
$
(1,058
)
Investment Management (B)
(429
)
 
(678
)
Total Other Revenue, net
$
(1,342
)
 
$
(1,736
)
(A)
Investment Banking Other Revenue, net, includes interest expense on the Notes Payable, subordinated borrowings and the line of credit of $1,478 and $1,644 for the three months ended March 31, 2016 and 2015, respectively.
(B)
Investment Management Other Revenue, net, includes interest expense on the Notes Payable and the line of credit of $670 and $953 for the three months ended March 31, 2016 and 2015, respectively.
(2)
Other Expenses are as follows:
 
For the Three Months Ended March 31,
 
2016
 
2015
Investment Banking
 
 
 
Amortization of LP Units / Interests and Certain Other Awards
$
31,759

 
$
25,950

Other Acquisition Related Compensation Charges
—

 
585

Special Charges
—

 
2,290

Acquisition and Transition Costs
—

 
484

Fair Value of Contingent Consideration
106

 
—

Intangible Asset and Other Amortization
3,163

 
2,926

Total Investment Banking
35,028

 
32,235

Investment Management
 
 
 
Special Charges
—

 
3,348

Intangible Asset and Other Amortization
82

 
82

Total Investment Management
82

 
3,430

Total Other Expenses
$
35,110

 
$
35,665


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 March 31,
 
2016
 
2015
Net Revenues: (1)
 
 
 
United States
$
173,910

 
$
161,822

Europe and Other
72,211

 
71,211

Latin America
12,934

 
6,686

Total
$
259,055

 
$
239,719

(1) Excludes Other Revenue and Interest Expense.
The Company’s total assets are located in the following geographical areas:
 
March 31, 2016
 
December 31, 2015
Total Assets:
 
 
 
United States
$
976,865

 
$
1,135,570

Europe and Other
203,069

 
221,358

Latin America
104,743

 
122,243

Total
$
1,284,677

 
$
1,479,171