SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2012

SEGMENT INFORMATION

19. SEGMENT INFORMATION

The Company’s reportable segments offer different products and services and are managed separately as different levels and types of expertise are required to effectively manage the segments’ transactions. Each segment is reviewed to determine the allocation of resources and to assess its performance. The Company’s principal operating activities are included in two business segments as described in Note 1 above - Financial Advisory and Asset Management. In addition, as described in Note 1 above, the Company records selected other activities in its Corporate segment.

The Company’s segment information for the three month and nine month periods ended September 30, 2012 and 2011 is prepared using the following methodology:

• Revenue and expenses directly associated with each segment are included in determining operating income.

• Expenses not directly associated with specific segments are allocated based on the most relevant measures applicable, including revenue, headcount, square footage and other factors.

• Segment assets are based on those directly associated with each segment, and include an allocation of certain assets relating to various segments, based on the most relevant measures applicable, including headcount, square footage and other factors.

The Company allocates investment gains and losses, interest income and interest expense among the various segments based on the segment in which the underlying asset or liability is reported.

Each segment’s operating expenses include (i) compensation and benefits expenses incurred directly in support of the businesses and (ii) other operating expenses, which include directly incurred expenses for occupancy and equipment, marketing and business development, technology and information services, professional services, fund administration and outsourced services and indirect support costs (including compensation and other operating expenses related thereto) for administrative services. Such administrative services include, but are not limited to, accounting, tax, legal, facilities management and senior management activities.

Management evaluates segment results based on net revenue and operating income (loss) and believes that the following information provides a reasonable representation of each segment’s contribution with respect to net revenue, operating income (loss) and total assets:

		Three Months Ended September 30,						Nine Months Ended September 30,
		2012			2011			2012			2011
Financial Advisory
	Net Revenue	$	219,973		$	253,585		$	739,793		$	731,621
	Operating Expenses		212,449			213,614			693,546			641,397
	Operating Income	$	7,524		$	39,971		$	46,247		$	90,224
Asset Management
	Net Revenue	$	221,516		$	219,077		$	647,096		$	690,785
	Operating Expenses		160,869			156,709			477,989			466,827
	Operating Income	$	60,647		$	62,368		$	169,107		$	223,958
Corporate
	Net Revenue	$	(12,683	)	$	(10,243	)	$	(35,134	)	$	(44,672	)
	Operating Expenses		8,762			4,358			51,138			19,124
	Operating Loss	$	(21,445	)	$	(14,601	)	$	(86,272	)	$	(63,796	)
Total
	Net Revenue	$	428,806		$	462,419		$	1,351,755		$	1,377,734
	Operating Expenses		382,080			374,681			1,222,673			1,127,348
	Operating Income	$	46,726		$	87,738		$	129,082		$	250,386

	As Of
	September 30, 2012		December 31, 2011
Total Assets
Financial Advisory	$	760,366	$	767,699
Asset Management		487,635		583,524
Corporate		1,746,945		1,730,713
Total	$	2,994,946	$	3,081,936