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

16. Segment Information

The Company has determined its reportable segments based on the Company’s method of internal reporting, which disaggregates its retail business by branch and its proprietary and investment banking businesses by product. The Company’s segments are: Private Client which includes commission and fee income earned on client transactions, net interest earnings on client margin loans and cash balances, stock loan activities and financing activities; Capital Markets which includes investment banking, market-making activities in over-the-counter equities, institutional trading in both fixed income and equities, structured assets transactions, bond trading, trading in mortgage-backed securities, corporate underwriting activities, public finance activities, syndicate participation, mortgage brokerage and servicing as well as the Company’s operations in the United Kingdom, Hong Kong, and Israel; and Asset Management which includes fees from money market funds and the investment management services of Oppenheimer Asset Management Inc. and Oppenheimer’s asset management divisions employing various programs to professionally manage client assets either in individual accounts or in funds. The Company evaluates the performance of its segments and allocates resources to them based upon profitability.

The table below presents information about the reported revenue and profit before income taxes of the Company for the years ended December 31, 2012, 2011 and 2010. Asset information by reportable segment is not reported, since the Company does not produce such information for internal use.

 

Expressed in thousands of dollars.

 

     Year ended December 31,  
     2012     2011     2010  

Revenue:

       

Private Client (1) (2)

    $ 547,583      $ 538,441      $ 572,590   

Capital Markets

      312,088        346,588        390,903   

Asset Management (1)

      92,941        73,963        72,780   
  

 

 

    

 

 

    

 

 

  

Total

    $ 952,612      $ 958,992      $ 1,036,273   
  

 

 

    

 

 

    

 

 

  

Profit (loss) before income taxes:

       

Private Client (2)

    $ 25,014      $ 18,196      $ 27,953   

Capital Markets (3)

      (51,334 )      (15,740 )      19,867   

Asset Management

      25,793        15,392        20,171   
  

 

 

    

 

 

    

 

 

  

Total

    $ (527 )    $ 17,848      $ 67,991   
  

 

 

    

 

 

    

 

 

  

 

(1) For the year ended December 31, 2012, the Asset Management and the Private Client segments earned performance fees of approximately $3.5 million and $7.6 million, respectively ($2.0 million and $1.0 million, respectively, in 2011 and $6.8 million and $6.1 million, respectively, in 2010). These fees are based on participation as general partner in various alternative investments.
(2) For the years ended December 31, 2012, the Private Client segment continued to be negatively impacted by the low interest rate environment. Revenue from margin interest, money fund products and sponsored FDIC-covered deposits totaled $35.1 million ($33.9 million in 2011 and $37.7 million in 2010).
(3) Includes $30 million award against the Company in U.S. Airways matter. See note 18.

Revenues, classified by the major geographic areas in which they were earned for the years ended December 31, 2012, 2011 and 2010, were as follows:

Expressed in thousands of dollars.

 

     2012      2011      2010  

United States

    $ 908,869       $ 909,662       $ 976,402   

Europe / Middle East

      28,431         28,858         28,077   

Asia

      7,613         11,301         16,511   

South America

      7,699         9,171         15,283   
  

 

 

     

 

 

     

 

 

  

Total

    $ 952,612       $ 958,992       $ 1,036,273