XML 23 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Business Developments, Acquisition and Transition Costs, Special Charges and Intangible Asset Amortization
9 Months Ended
Sep. 30, 2018
Business Combinations [Abstract]  
Acquisition and Transition Costs and Special Charges
Business Developments, Acquisition and Transition Costs, Special Charges and Intangible Asset Amortization
Business Developments

Real Estate Capital Advisory - On April 23, 2018, the Company announced the expansion of its global investment banking platform by establishing a Real Estate Capital Advisory business within its existing PCA business. This business is focused on secondary transactions for real estate oriented financial sponsors and private equity investors in conjunction with PCA’s existing fund monetization and recapitalization expertise. Certain RECA employees purchased interests in PCA, at fair value, resulting in an increase to Noncontrolling Interest of $770 on the Company's Unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2018. See Note 13 for further information.

In conjunction with the establishment of the RECA business, the Company hired certain employees and entered into an arrangement with the former employer of these employees, which, among other things, provides for contingent consideration to be paid to the former employer of up to $4,463, based on the completion of certain client engagements. The Company accounted for this transaction as an asset acquisition and will recognize the contingent consideration paid as an expense in Professional Fees on the Company's Unaudited Condensed Consolidated Statements of Operations as the related revenue from the underlying engagements is realized. The Company recognized $2,938 and $3,971 pursuant to this arrangement for the three and nine months ended September 30, 2018, respectively.

The Company is the general partner of PCA. Concurrent with this transaction, the Company performed an assessment under ASC 810, "Consolidation," ("ASC 810"), and concluded that PCA remains a VIE following this transaction and determined that the Company is still the primary beneficiary of this VIE. Specifically, the Company's general partner interest provides the Company with the ability to make decisions that significantly impact the economic performance of PCA, while the limited partners do not possess substantive participating rights over PCA. The Company's assessment of the primary beneficiary included assessing which parties have the power to significantly impact the economic performance and the obligation to absorb losses, which could be potentially significant to the entity, or the right to receive benefits from the entity that could be potentially significant. The assets of PCA are not generally available to the Company and the liabilities are generally non-recourse to the Company.

Acquisition and Transition Costs

The Company recognized $21 for the nine months ended September 30, 2018 and $599 and $976 for the three and nine months ended September 30, 2017, respectively, as Acquisition and Transition Costs incurred in connection with acquisitions, divestitures, and other ongoing business development initiatives. These costs are primarily comprised of professional fees for legal and other services.
Special Charges
The Company recognized $1,967 and $3,864 for the three and nine months ended September 30, 2018, respectively, as Special Charges incurred related to separation benefits and costs for the termination of certain contracts associated with closing the Company's agency trading platform in the U.K. and separation benefits and related charges associated with the Company's businesses in Mexico, as well as the acceleration of depreciation expense for leasehold improvements in conjunction with the previously announced expansion of the Company's headquarters in New York. The Company recognized $21,507 for the nine months ended September 30, 2017, as Special Charges incurred related to an impairment charge of $7,107 associated with the impairment of goodwill in the Company's Institutional Asset Management reporting unit and an impairment charge of $14,400 associated with the impairment of the Company's investment in G5 Holdings S.A. ("G5").
Intangible Asset Amortization
Expense associated with the amortization of intangible assets for Investment Banking was $2,191 and $6,571 for the three and nine months ended September 30, 2018, respectively, and $2,357 and $7,071 for the three and nine months ended September 30, 2017, respectively, included within Depreciation and Amortization expense on the Unaudited Condensed Consolidated Statements of Operations. Expense associated with the amortization of intangible assets for Investment Management was $110 and $328 for the three and nine months ended September 30, 2018, respectively, and $118 and $354 for the three and nine months ended September 30, 2017, respectively, included within Depreciation and Amortization expense on the Unaudited Condensed Consolidated Statements of Operations.