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Segment Information
 12 Months Ended
Dec. 31, 2012
Segment Information  
Segment Information

29.   Segment Information

        Management has assessed and determined that the Company operates in three business segments representing the Company's three principal distribution channels: Institutional, Mutual Fund and High Net Worth, each of which has different client relationships.

        Revenue in the Institutional distribution channel is earned from relationships with public and private client entities, including pension plans, foundations, endowments and sovereign wealth funds. Revenue in the Mutual Fund distribution channel is earned from advisory and sub-advisory relationships with all domestically-registered investment products as well as non-institutional investment products that are registered abroad. Revenue in the High Net Worth distribution channel is earned from relationships with wealthy individuals, family trusts and managed account programs.

        Revenue earned from client relationships managed by Affiliates accounted for under the equity method is not consolidated with the Company's reported Revenue but instead is included (net of operating expenses, including amortization) in Income from equity method investments, and reported in the distribution channel in which the Affiliate operates. Income tax attributable to the profits of the Company's equity method Affiliates is reported within the Company's consolidated income tax provision.

        In firms with revenue sharing arrangements, a certain percentage of revenue is allocated for use by management of an Affiliate in paying operating expenses of that Affiliate, including salaries and bonuses, and is called an "Operating Allocation." In reporting segment operating expenses, Affiliate expenses are allocated to a particular segment on a pro rata basis with respect to the revenue generated by that Affiliate in such segment. Generally, as revenue increases, additional compensation is typically paid to Affiliate management partners from the Operating Allocation. As a result, the contractual expense allocation pursuant to a revenue sharing arrangement may result in the characterization of any growth in profit margin beyond the Company's Owners' Allocation as an operating expense. All other operating expenses (excluding intangible amortization) and interest expense have been allocated to segments based on the proportion of cash flow distributions reported by Affiliates in each segment.

Statements of Income

 
   Year Ended December 31, 2010  
 
   Institutional   Mutual Fund   High Net Worth   Total  

Revenue

   $ 649.2   $ 578.8   $ 130.2   $ 1,358.2  

Operating expenses:

                          

Depreciation, intangible amortization and impairments

     49.6     15.3     9.2     74.1  

Other operating expenses

     424.9     401.2     84.0     910.1  
                   

 

     474.5     416.5     93.2     984.2  
                   

Operating income

     174.7     162.3     37.0     374.0  
                   

Income from equity method investments

    
(70.4
)		  
0.4		    
(7.5
)		  
(77.5
)
                   

Other non-operating (income) and expenses:

                          

Investment and other (income) loss

     (10.8 )   (7.6 )   —     (18.4 )

Interest expense

     36.1     23.5     6.6     66.2  

Imputed interest and contingent payment arrangements

     13.5     8.9     2.5     24.9  
                   

 

     38.8     24.8     9.1     72.7  
                   

Income before income taxes

     206.3     137.1     35.4     378.8  

Income taxes

     47.1     36.2     8.2     91.5  
                   

Net income

     159.2     100.9     27.2     287.3  

Net income (non-controlling interests)

     (81.4 )   (54.6 )   (12.7 )   (148.7 )
                   

Net income (controlling interest)

   $ 77.8   $ 46.3   $ 14.5   $ 138.6  
                   

Total assets

   $ 2,997.4   $ 1,848.4   $ 434.0   $ 5,279.8  

Goodwill

   $ 1,073.6   $ 786.7   $ 261.6   $ 2,121.9  

 

 
   Year Ended December 31, 2011  
 
   Institutional   Mutual Fund   High Net Worth   Total  

Revenue

   $ 841.4   $ 723.7   $ 139.7   $ 1,704.8  

Operating expenses:

                          

Depreciation, intangible amortization and impairments

     76.9     28.0     7.8     112.7  

Other operating expenses

     524.9     492.4     88.7     1,106.0  
                   

 

     601.8     520.4     96.5     1,218.7  
                   

Operating income

    
239.6		    
203.3		    
43.2		    
486.1		  
                   

Income from equity method investments

    
(57.2
)		  
(7.9
)		  
(7.6
)		  
(72.7
)
                   

Other non-operating (income) and expenses:

                          

Investment and other (income) loss

     (6.9 )   0.6     11.3     5.0  

Interest expense

     39.7     27.7     6.4     73.8  

Imputed interest and contingent payment arrangements

     15.1     9.9     2.3     27.3  
                   

 

     47.9     38.2     20.0     106.1  
                   

Income before income taxes

     248.9     173.0     30.8     452.7  

Income taxes

     53.4     34.4     5.3     93.1  
                   

Net income

     195.5     138.6     25.5     359.6  

Net income (non-controlling interests)

     (105.3 )   (73.1 )   (16.3 )   (194.7 )
                   

Net income (controlling interest)

   $ 90.2   $ 65.5   $ 9.2   $ 164.9  
                   

Total assets

   $ 2,836.2   $ 1,920.6   $ 462.1   $ 5,218.9  

Goodwill

   $ 1,071.4   $ 785.0   $ 260.9   $ 2,117.3  

 

 
   Year Ended December 31, 2012  
 
   Institutional   Mutual Fund   High Net Worth   Total  

Revenue

   $ 861.3   $ 774.4   $ 169.8     1,805.5  

Operating expenses:

                          

Depreciation, intangible amortization and impairments

     75.4     128.9     9.8     214.1  

Other operating expenses

     554.2     526.5     110.3     1,191.0  
                   

 

     629.6     655.4     120.1     1,405.1  
                   

Operating income

     231.7     119.0     49.7     400.4  
                   

Income from equity method investments

    
(103.9
)		  
(12.7
)		  
(13.1
)		  
(129.7
)
                   

Other non-operating (income) and expenses:

                          

Investment and other (income) loss

     (13.6 )   (6.6 )   (1.8 )   (22.0 )

Interest expense

     50.7     24.0     8.3     83.0  

Imputed interest and contingent payment arrangements

     (8.1 )   (19.5 )   1.5     (26.1 )
                   

 

     29.0     (2.1 )   8.0     34.9  
                   

Income before income taxes

     306.6     133.8     54.8     495.2  

Income taxes

     63.7     10.7     9.4     83.8  
                   

Net income

     242.9     123.1     45.4     411.4  

Net income (non-controlling interests)

     (116.9 )   (95.8 )   (24.7 )   (237.4 )
                   

Net income (controlling interest)

   $ 126.0   $ 27.3   $ 20.7   $ 174.0  
                   

Total assets

   $ 3,176.5   $ 2,354.8   $ 655.8   $ 6,187.1  

Goodwill

   $ 1,078.5   $ 939.5   $ 337.2   $ 2,355.2  

        In 2010, 2011 and 2012, revenue attributable to clients domiciled outside the U.S. was approximately 33%, 39% and 41% of total revenue, respectively.

        As of December 31, 2010, equity method investments of $630.1 million, $9.1 million and $39.7 million were included in the total assets of the Institutional, Mutual Fund and High Net Worth segments, respectively. As of December 31, 2011, equity method investments of $490.6 million, $75.6 million and $49.6 million were included in the total assets of the Institutional, Mutual Fund and High Net Worth segments, respectively. As of December 31, 2012, equity method investments of $879.6 million, $81.2 million and $70.5 million were included in the total assets of the Institutional, Mutual Fund and High Net Worth segments, respectively.