18. SEGMENT AND GEOGRAPHIC INFORMATION

Segment Information

The Company operates within three business segments: Capital Markets, Asset Management, and Principal Investing. See note 1.

The Company’s business segment information for the six and three months ended June 30, 2013 and June 30, 2012 was prepared using the following methodologies and generally represents the information that is relied upon by management in its decision making processes:

(a) Revenues and expenses directly associated with each business segment are included in determining net income / (loss) by segment.

(b) Indirect expenses (such as general and administrative expenses including executive and indirect overhead costs) not directly associated with specific business segments are not allocated to the business segments’ statements of operations. Accordingly, the Company presents segment information consistent with internal management reporting. See note (1) in the table below for more detail on unallocated items. The following tables present the financial information for the Company’s segments for the periods indicated.

Beginning with the fourth quarter of 2012, the Company reclassified the investment in certain equity method affiliates as well as the income / (loss) from these equity method affiliates from the Principal Investing business segment to the Asset Management business segment. Relevant prior period amounts have been reclassified to conform to the current period presentation.



SEGMENT INFORMATION
Statement of Operations Information
Six Months Ended June 30, 2013

	Capital		Asset		Principal		Segment		Unallocated
	Markets		Management		Investing		Total		(1)		Total
Net trading	$	24,689	$	-	$	-	$	24,689	$	-	$	24,689
Asset management		-		8,917		-		8,917		-		8,917
New issue and advisory		1,567		-		-		1,567		-		1,567
Principal transactions and other income		144		898		(8,455)		(7,413)		-		(7,413)
Total revenues		26,400		9,815		(8,455)		27,760		-		27,760
Total operating expenses		28,536		5,613		162		34,311		6,419		40,730
Operating income / (loss)		(2,136)		4,202		(8,617)		(6,551)		(6,419)		(12,970)
Income / (loss) from equity method affiliates		-		332		1,282		1,614		-		1,614
Other non-operating income / (expense)		(109)		(7)		-		(116)		(1,948)		(2,064)
Income / (loss) before income taxes		(2,245)		4,527		(7,335)		(5,053)		(8,367)		(13,420)
Income tax expense / (benefit)		(42)		-		-		(42)		88		46
Net income / (loss)		(2,203)		4,527		(7,335)		(5,011)		(8,455)		(13,466)
Less: Net income / (loss) attributable to the
non-controlling interest		(15)		-		-		(15)		(4,249)		(4,264)
Net income / (loss) attributable to IFMI	$	(2,188)	$	4,527	$	(7,335)	$	(4,996)	$	(4,206)	$	(9,202)

Other statement of operations data
Depreciation and amortization (included in
total operating expense)	$	390	$	131	$	-	$	521	$	148	$	669



SEGMENT INFORMATION
Statement of Operations Information
Six Months Ended June 30, 2012

	Capital		Asset		Principal		Segment		Unallocated
	Markets		Management		Investing		Total		(1)		Total
Net trading	$	37,642	$	-	$	-	$	37,642	$	-	$	37,642
Asset management		-		9,545		-		9,545		-		9,545
New issue and advisory		1,266		-		-		1,266		-		1,266
Principal transactions and other income		(34)		393		(5,015)		(4,656)		-		(4,656)
Total revenues		38,874		9,938		(5,015)		43,797		-		43,797
Total operating expenses		37,676		2,842		156		40,674		7,496		48,170
Operating income / (loss)		1,198		7,096		(5,171)		3,123		(7,496)		(4,373)
Income / (loss) from equity method affiliates		-		698		1,344		2,042		-		2,042
Other non-operating income / (expense)		(4,224)		-		-		(4,224)		(2,449)		(6,673)
Income / (loss) before income taxes		(3,026)		7,794		(3,827)		941		(9,945)		(9,004)
Income tax expense / (benefit)		-		-		-		-		54		54
Net income / (loss)		(3,026)		7,794		(3,827)		941		(9,999)		(9,058)
Less: Net income / (loss) attributable to the
non-controlling interest		(238)		-		-		(238)		(2,883)		(3,121)
Net income / (loss) attributable to IFMI	$	(2,788)	$	7,794	$	(3,827)	$	1,179	$	(7,116)	$	(5,937)

Other statement of operations data
Depreciation and amortization (included in
total operating expense)	$	452	$	7	$	-	$	459	$	275	$	734



SEGMENT INFORMATION
Statement of Operations Information
Three Months Ended June 30, 2013

	Capital		Asset		Principal		Segment		Unallocated
	Markets		Management		Investing		Total		(1)		Total
Net trading	$	11,630	$	-	$	-	$	11,630	$	-	$	11,630
Asset management		-		4,155		-		4,155		-		4,155
New issue and advisory		572		-		-		572		-		572
Principal transactions and other income		89		388		(3,100)		(2,623)		-		(2,623)
Total revenues		12,291		4,543		(3,100)		13,734		-		13,734
Total operating expenses		14,021		2,681		83		16,785		2,847		19,632
Operating income / (loss)		(1,730)		1,862		(3,183)		(3,051)		(2,847)		(5,898)
Income / (loss) from equity method affiliates		-		122		(27)		95		-		95
Other non-operating income / (expense)		(55)		(4)		-		(59)		(976)		(1,035)
Income / (loss) before income taxes		(1,785)		1,980		(3,210)		(3,015)		(3,823)		(6,838)
Income tax expense / (benefit)		(17)		-		-		(17)		51		34
Net income / (loss)		(1,768)		1,980		(3,210)		(2,998)		(3,874)		(6,872)
Less: Net income / (loss) attributable to the
non-controlling interest		(12)		-		-		(12)		(2,158)		(2,170)
Net income / (loss) attributable to IFMI	$	(1,756)	$	1,980	$	(3,210)	$	(2,986)	$	(1,716)	$	(4,702)

Other statement of operations data
Depreciation and amortization (included in
total operating expense)	$	193	$	93	$	-	$	286	$	73	$	359



SEGMENT INFORMATION
Statement of Operations Information
Three Months Ended June 30, 2012

	Capital		Asset		Principal		Segment		Unallocated
	Markets		Management		Investing		Total		(1)		Total
Net trading	$	19,951	$	-	$	-	$	19,951	$	-	$	19,951
Asset management		-		4,608		-		4,608		-		4,608
New issue and advisory		189		-		-		189		-		189
Principal transactions and other income		(7)		233		63		289		-		289
Total revenues		20,133		4,841		63		25,037		-		25,037
Total operating expenses		18,806		1,762		75		20,643		3,564		24,207
Operating income / (loss)		1,327		3,079		(12)		4,394		(3,564)		830
Income / (loss) from equity method affiliates		-		358		1,168		1,526		-		1,526
Other non-operating income / (expense)		(4,289)		-		-		(4,289)		(1,172)		(5,461)
Income / (loss) before income taxes		(2,962)		3,437		1,156		1,631		(4,736)		(3,105)
Income tax expense / (benefit)		-		-		-		-		63		63
Net income / (loss)		(2,962)		3,437		1,156		1,631		(4,799)		(3,168)
Less: Net income / (loss) attributable to the
non-controlling interest		(109)		-		-		(109)		(981)		(1,090)
Net income / (loss) attributable to IFMI	$	(2,853)	$	3,437	$	1,156	$	1,740	$	(3,818)	$	(2,078)

Other statement of operations data
Depreciation and amortization (included in
total operating expense)	$	223	$	3	$	-	$	226	$	117	$	343

(1) Unallocated includes certain expenses incurred by indirect overhead and support departments (such as the executive, finance, legal, information technology, human resources, risk, compliance, and other similar overhead and support departments). Some of the items not allocated include: (1) operating expenses (such as cash compensation and benefits, equity-based compensation expense, professional fees, travel and entertainment, consulting fees, and rent) related to support departments excluding certain departments that directly support the Capital Markets business segment; (2) interest expense on corporate debt; and (3) income taxes. Management does not consider these items necessary for an understanding of the operating results of these business segments and such amounts are excluded in business segment reporting to the Chief Operating Decision Maker.



Balance Sheet Data
As of June 30, 2013

	Capital		Asset		Principal		Segment		Unallocated
	Markets		Management		Investing		Total		(1)		Total
Total Assets	$	309,897	$	8,888	$	28,707	$	347,492	$	9,629	$	357,121

Included within total assets:
Investment in equity method affiliates	$	-	$	(69)	$	17	$	(52)	$	-	$	(52)
Goodwill (2)	$	7,937	$	3,176	$	-	$	11,113	$	-	$	11,113
Intangible assets (2)	$	332	$	302	$	-	$	634	$	-	$	634



Balance Sheet Data
As of June 30, 2012

	Capital		Asset		Principal		Segment		Unallocated
	Markets		Management		Investing		Total		(1)		Total
Total Assets	$	444,297	$	7,774	$	39,440	$	491,511	$	11,524	$	503,035

Included within total assets:
Investment in equity method affiliates	$	-	$	555	$	1,835	$	2,390	$	-	$	2,390
Goodwill (2)	$	7,937	$	3,176	$	-	$	11,113	$	-	$	11,113
Intangible assets (2)	$	538	$	-	$	-	$	538	$	-	$	538

(1) Unallocated assets primarily include (1) amounts due from related parties; (2) furniture and equipment, net; and (3) other assets that are not considered necessary for an understanding of business segment assets and such amounts are excluded in business segment reporting to the Chief Operating Decision Maker.

(2) Goodwill and intangible assets as of June 30, 2013 and 2012 are allocated to the Capital Markets and Asset Management business segments as indicated in the table from above.

Geographic Information

The Company conducts its business activities through offices in the following locations: (1) United States; (2) United Kingdom and other; and (3) Asia. Total revenues by geographic area are summarized as follows:



GEOGRAPHIC DATA
(Dollars in Thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Total Revenues:
United States	$	9,812	$	20,390	$	21,209	$	37,503
United Kingdom & Other		3,140		4,647		5,496		6,294
Asia		782		-		1,055		-
Total	$	13,734	$	25,037	$	27,760	$	43,797

Long-lived assets attributable to an individual country, other than the United States, are not material.