Segment Reporting

9 Months Ended

Sep. 30, 2013

Segment Reporting

12. SEGMENT REPORTING

We operate two segments: Advisory and Trust. These segments are managed separately based on the types of products and services offered and their related client bases. We evaluate the performance of our segments based primarily on income before income taxes. Westwood Holdings Group, Inc. (“Westwood Holdings”), the parent company of our Advisory and Trust segments, does not have revenues or employees and is the entity in which we record stock-based compensation expense.

Advisory

Our Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals and the Westwood Funds™, as well as investment subadvisory services to mutual funds and our Trust segment. Westwood Management and Westwood International, which provide investment advisory services to clients of similar type, are included in our Advisory segment.

Trust

Trust provides trust and custodial services and participation in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Trust is included in our Trust segment.

There are no separate segment accounting policies. Intersegment balances that eliminate in consolidation have been applied to the appropriate segment.

	Advisory		Trust		Westwood Holdings			Eliminations			Consolidated
		(in thousands)
Three months ended September30, 2013
Net revenues from external sources	$	18,325	$	4,673	$	—		$	—		$	22,998
Net intersegment revenues		2,937		—		—			(2,937	)		—
Income before income taxes		8,701		771		(2,706	)		—			6,766
Segment assets		103,526		13,849		(12,449	)		—			104,926
Segment goodwill		5,219		6,036		—			—			11,255
Three months ended September30, 2012
Net revenues from external sources	$	15,226	$	3,715	$	—		$	—		$	18,941
Net intersegment revenues		1,564		3		—			(1,567	)		—
Income before income taxes		6,666		551		(2,886	)		—			4,331
Segment assets		83,744		13,932		(5,733	)		—			91,943
Segment goodwill		5,219		6,036		—			—			11,255
Nine months ended September30, 2013
Net revenues from external sources	$	53,108	$	13,465	$	—		$	—		$	66,573
Net intersegment revenues		7,194		9		—			(7,203	)		—
Income before income taxes		25,203		2,072		(8,057	)		—			19,218
Nine months ended September30, 2012
Net revenues from external sources	$	45,927	$	10,944	$	—		$	—		$	56,871
Net intersegment revenues		4,020		12		—			(4,032	)		—
Income before income taxes		20,091		1,712		(7,636	)		—			14,167