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Segment Operating Results | 9 Months Ended
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Sep. 30, 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 September 30, 2016, the Company deconsolidated the assets and liabilities of its Mexican Private Equity business, which was in the Investment Management segment (see Note 8 for further information). 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 forward. The Company’s segment information for the three and nine months ended September 30, 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 an impairment charge associated with the impairment of goodwill in the Company's Institutional Asset Management reporting unit, separation benefits and costs associated with the termination of certain contracts within the Company’s Evercore ISI business and the finalization of a matter associated with the wind-down of the Company’s U.S. Private Equity business.
• | Acquisition and Transition Costs - Includes costs incurred in connection with acquisitions and other ongoing business development initiatives, primarily comprised of professional fees for legal and other services, as well as the reversal of a provision for certain settlements in 2016 previously established in the fourth quarter of 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. One client accounted for more than 10% (11%) of the Company's consolidated Net Revenues for the three months ended September 30, 2016. The following information presents each segment’s contribution.
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
Investment Banking |  |  |  |  |  |  |
Net Revenues (1) | $ | 368,634 |  |  | $ | 285,918 |  |  | $ | 936,504 |  |  | $ | 746,875 |
Operating Expenses | 268,666 |  |  | 220,565 |  |  | 707,846 |  |  | 586,200 |
Other Expenses (2) | 17,422 |  |  | 30,131 |  |  | 75,854 |  |  | 85,168 |
Operating Income | 82,546 |  |  | 35,222 |  |  | 152,804 |  |  | 75,507 |
Income (Loss) from Equity Method Investments | (112 | ) |  | (528 | ) |  | (94 | ) |  | 238 |
Pre-Tax Income | $ | 82,434 |  |  | $ | 34,694 |  |  | $ | 152,710 |  |  | $ | 75,745 |
Identifiable Segment Assets | $ | 1,114,565 |  |  | $ | 919,000 |  |  | $ | 1,114,565 |  |  | $ | 919,000 |
Investment Management |  |  |  |  |  |  |
Net Revenues (1) | $ | 17,680 |  |  | $ | 23,033 |  |  | $ | 58,179 |  |  | $ | 68,155 |
Operating Expenses | 14,843 |  |  | 18,275 |  |  | 46,357 |  |  | 58,050 |
Other Expenses (2) | 298 |  |  | 28,082 |  |  | 811 |  |  | 31,605 |
Operating Income (Loss) | 2,539 |  |  | (23,324 | ) |  | 11,011 |  |  | (21,500 | )
Income from Equity Method Investments | 1,290 |  |  | 1,457 |  |  | 4,223 |  |  | 3,796 |
Pre-Tax Income (Loss) | $ | 3,829 |  |  | $ | (21,867 | ) |  | $ | 15,234 |  |  | $ | (17,704 | )
Identifiable Segment Assets | $ | 347,065 |  |  | $ | 411,389 |  |  | $ | 347,065 |  |  | $ | 411,389 |
Total |  |  |  |  |  |  |
Net Revenues (1) | $ | 386,314 |  |  | $ | 308,951 |  |  | $ | 994,683 |  |  | $ | 815,030 |
Operating Expenses | 283,509 |  |  | 238,840 |  |  | 754,203 |  |  | 644,250 |
Other Expenses (2) | 17,720 |  |  | 58,213 |  |  | 76,665 |  |  | 116,773 |
Operating Income | 85,085 |  |  | 11,898 |  |  | 163,815 |  |  | 54,007 |
Income from Equity Method Investments | 1,178 |  |  | 929 |  |  | 4,129 |  |  | 4,034 |
Pre-Tax Income | $ | 86,263 |  |  | $ | 12,827 |  |  | $ | 167,944 |  |  | $ | 58,041 |
Identifiable Segment Assets | $ | 1,461,630 |  |  | $ | 1,330,389 |  |  | $ | 1,461,630 |  |  | $ | 1,330,389 |
(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,
| 2016 |  | 2015 |  | 2016 |  | 2015
Investment Banking (A) | $ | 200 |  |  | $ | 357 |  |  | $ | 270 |  |  | $ | (2,874 | )
Investment Management (B) | 522 |  |  | (779 | ) |  | 337 |  |  | (2,243 | )
Total Other Revenue, net | $ | 722 |  |  | $ | (422 | ) |  | $ | 607 |  |  | $ | (5,117 | )
(A) | Investment Banking Other Revenue, net, includes interest expense on the Notes Payable, subordinated borrowings and the line of credit of $2,592 and $6,946 for the three and nine months ended September 30, 2016, respectively, and $1,452 and $4,889 for the three and nine months ended September 30, 2015, respectively.
(B) | Investment Management Other Revenue, net, includes interest expense on the Notes Payable and the line of credit of $670 for the nine months ended September 30, 2016 and $962 and $2,874 for the three and nine months ended September 30, 2015, respectively.
(2) | Other Expenses are as follows:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
Investment Banking |  |  |  |  |  |  |
Amortization of LP Units / Interests and Certain Other Awards | $ | 13,859 |  |  | $ | 21,980 |  |  | $ | 66,356 |  |  | $ | 66,123 |
Other Acquisition Related Compensation Charges | — |  |  | — |  |  | — |  |  | 1,537 |
Special Charges | — |  |  | — |  |  | — |  |  | 2,151 |
Acquisition and Transition Costs | 41 |  |  | 538 |  |  | (692 | ) |  | 1,928 |
Fair Value of Contingent Consideration | 984 |  |  | 2,797 |  |  | 1,671 |  |  | 2,797 |
Intangible Asset and Other Amortization | 2,538 |  |  | 4,816 |  |  | 8,519 |  |  | 10,632 |
Total Investment Banking | 17,422 |  |  | 30,131 |  |  | 75,854 |  |  | 85,168 |
Investment Management |  |  |  |  |  |  |
Special Charges | — |  |  | 28,000 |  |  | — |  |  | 31,348 |
Acquisition and Transition Costs | 298 |  |  | — |  |  | 702 |  |  | 11 |
Intangible Asset and Other Amortization | — |  |  | 82 |  |  | 109 |  |  | 246 |
Total Investment Management | 298 |  |  | 28,082 |  |  | 811 |  |  | 31,605 |
Total Other Expenses | $ | 17,720 |  |  | $ | 58,213 |  |  | $ | 76,665 |  |  | $ | 116,773 |
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,
| 2016 |  | 2015 |  | 2016 |  | 2015
Net Revenues: (1) |  |  |  |  |  |  |
United States | $ | 322,128 |  |  | $ | 238,231 |  |  | $ | 714,983 |  |  | $ | 603,239 |
Europe and Other | 54,690 |  |  | 61,838 |  |  | 247,371 |  |  | 189,976 |
Latin America | 8,774 |  |  | 9,304 |  |  | 31,722 |  |  | 26,932 |
Total | $ | 385,592 |  |  | $ | 309,373 |  |  | $ | 994,076 |  |  | $ | 820,147 |
(1) Excludes Other Revenue and Interest Expense. The Company’s total assets are located in the following geographical areas:
| September 30, 2016 |  | December 31, 2015
Total Assets: |  |  |
United States | $ | 1,196,511 |  |  | $ | 1,135,570 |
Europe and Other | 179,333 |  |  | 221,358 |
Latin America | 85,786 |  |  | 122,243 |
Total | $ | 1,461,630 |  |  | $ | 1,479,171 |

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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 34 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8981-108599 Reference 2: 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=51669610&loc=d3e9038-108599 Reference 3: 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=51669610&loc=d3e8971-108599 Reference 4: 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=51669610&loc=d3e8595-108599 Reference 5: 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=51669610&loc=d3e8380-108599 Reference 6: 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=51669610&loc=d3e8933-108599 Reference 7: 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=51669610&loc=d3e8844-108599 Reference 8: 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=51669610&loc=d3e8984-108599 Reference 9: 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=51669610&loc=d3e9031-108599 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=51669610&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 10 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8538-108599 Reference 12: 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=51669610&loc=d3e8864-108599 Reference 13: 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=51669610&loc=d3e8924-108599 Reference 14: 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=51669610&loc=d3e8906-108599 + Details
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