Segment Information

9 Months Ended

Sep. 30, 2019

21.	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 its Financial Advisory and Asset Management business segments as described in Note 1. In addition, as described in Note 1, 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, 2019 and 2018 is prepared using the following methodology:

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

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

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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, human resources, 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						Nine Months Ended
		September 30,						September 30,
		2019			2018			2019			2018
Financial Advisory	Net Revenue	$	305,982		$	310,418		$	973,964		$	1,141,628
	Operating Expenses (a)		307,147			250,651			863,646			893,524
	Operating Income	$	(1,165	)	$	59,767		$	110,318		$	248,104
Asset Management	Net Revenue	$	300,015		$	325,240		$	917,439		$	1,032,111
	Operating Expenses (a)		225,819			211,564			652,188			670,794
	Operating Income	$	74,196		$	113,676		$	265,251		$	361,317
Corporate	Net Revenue	$	(14,929	)	$	(9,177	)	$	(25,971	)	$	(34,622	)
	Operating Expenses (a)		5,729			25,585			75,877			50,350
	Operating Loss	$	(20,658	)	$	(34,762	)	$	(101,848	)	$	(84,972	)
Total	Net Revenue	$	591,068		$	626,481		$	1,865,432		$	2,139,117
	Operating Expenses (a)		538,695			487,800			1,591,711			1,614,668
	Operating Income	$	52,373		$	138,681		$	273,721		$	524,449

(a) See Note 16 for information regarding business realignment.

	As Of
	September 30, 2019		December 31, 2018
Total Assets
Financial Advisory	$	1,075,851	$	859,306
Asset Management		703,744		728,220
Corporate		3,772,284		3,409,715
Total	$	5,551,879	$	4,997,241