Segment Operating Results

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Operating Results

Segment Operating Results

Business Segments – The Company’s business results are categorized into the following two segments: Investment Banking and Investment Management. Investment Banking includes providing advice to clients on significant mergers, acquisitions, divestitures and other strategic corporate transactions, as well as services related to securities underwriting, private fund placement services and commissions for agency-based equity trading services and equity research. Investment Management includes advising third-party investors in the Institutional Asset Management, Wealth Management and Private Equity sectors. On October 31, 2014, the Company acquired the operating businesses of ISI, which is included in the Investment Banking segment.

The Company’s segment information for the three months ended March 31, 2015 and 2014 is prepared using the following methodology:

• Revenue, expenses and income (loss) from equity method investments directly associated with each segment are included in determining pre-tax income.

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

• Segment assets are based on those directly associated with each segment, or for certain assets shared across segments; those assets are allocated based on the most relevant measures applicable, including headcount and other factors.

• Investment gains and losses, interest income and interest expense are allocated between the segments based on the segment in which the underlying asset or liability is held.

Each segment’s Operating Expenses include: a) employee compensation and benefits expenses that are incurred directly in support of the segment and b) non-compensation expenses, which include expenses for premises and occupancy, professional fees, travel and entertainment, communications and information services, equipment 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.

Other Expenses include the following:

• Amortization of LP Units/Interests and Certain Other Awards - Includes amortization costs associated with the vesting of Class E LP Units issued in conjunction with the acquisition of ISI, as well as Class G and H LP Interests and certain other related awards.

• Other Acquisition Related Compensation Charges - Includes compensation charges associated with deferred consideration, retention awards and related compensation for The Lexicon Partnership LLP ("Lexicon") employees.

• Special Charges - Includes expenses primarily related to separation benefits and costs associated with the termination of certain contracts within the Company’s Evercore ISI business, and the finalization of a matter associated with the wind-down of the Company’s U.S. Private Equity business.

• Intangible Asset and Other Amortization - Includes amortization of intangible assets and other purchase accounting-related amortization associated with certain acquisitions.

• Acquisition and Transition Costs - Includes professional fees for legal and other services incurred related to the Company’s acquisition of all of the outstanding equity interests of the operating businesses of ISI.

The Company evaluates segment results based on net revenues and pre-tax income, both including and excluding the impact of the Other Expenses.

No client accounted for more than 10% of the Company’s consolidated Net Revenues for the three months ended March 31, 2015.

The following information presents each segment’s contribution.

	For the Three Months Ended March 31,
	2015			2014
Investment Banking
Net Revenues (1)	$	216,580		$	127,851
Operating Expenses	171,364			105,532
Other Expenses (2)	32,235			3,214
Operating Income	12,981			19,105
Income (Loss) from Equity Method Investments	(37		)	(310		)
Pre-Tax Income	$	12,944		$	18,795
Identifiable Segment Assets	$	769,746		$	590,956
Investment Management
Net Revenues (1)	$	21,403		$	21,262
Operating Expenses	19,956			19,571
Other Expenses (2)	3,430			82
Operating Income (Loss)	(1,983		)	1,609
Income from Equity Method Investments	1,144			551
Pre-Tax Income (Loss)	$	(839	)	$	2,160
Identifiable Segment Assets	$	519,463		$	453,961
Total
Net Revenues (1)	$	237,983		$	149,113
Operating Expenses	191,320			125,103
Other Expenses (2)	35,665			3,296
Operating Income	10,998			20,714
Income from Equity Method Investments	1,107			241
Pre-Tax Income	$	12,105		$	20,955
Identifiable Segment Assets	$	1,289,209		$	1,044,917

(1) Net revenues include Other Revenue, net, allocated to the segments as follows:

	For the Three Months Ended March 31,
	2015			2014
Investment Banking (A)	$	(1,058	)	$	(653	)
Investment Management (B)	(678		)	(653		)
Total Other Revenue, net	$	(1,736	)	$	(1,306	)

(A) Investment Banking Other Revenue, net, includes interest expense on the Senior Notes, subordinated borrowings and line of credit of $1,644 and $1,105for the three months ended March 31, 2015 and 2014, respectively

(B) Investment Management Other Revenue, net, includes interest expense on the Senior Notes, subordinated borrowings and line of credit of $953 and $932for the three months ended March 31, 2015 and 2014, respectively

(2) Other Expenses are as follows:

	For the Three Months Ended March 31,
	2015		2014
Investment Banking
Amortization of LP Units / Interests and Certain Other Awards	$	25,950	$	—
Other Acquisition Related Compensation Charges	585		3,214
Special Charges	2,290		—
Intangible Asset and Other Amortization	2,926		—
Acquisition and Transition Costs	484		—
Total Investment Banking	32,235		3,214
Investment Management
Special Charges	3,348		—
Intangible Asset and Other Amortization	82		82
Total Investment Management	3,430		82
Total Other Expenses	$	35,665	$	3,296

Geographic Information – The Company manages its business based on the profitability of the enterprise as a whole.

The Company’s revenues were derived from clients and private equity funds located and managed in the following geographical areas:

	For the Three Months Ended March 31,
	2015		2014
Net Revenues: (1)
United States	$	161,822	$	107,927
Europe and Other	71,211		36,788
Latin America	6,686		5,704
Total	$	239,719	$	150,419

(1) Excludes Other Revenue and Interest Expense.

The Company’s total assets are located in the following geographical areas:

	March 31, 2015		December 31, 2014
Total Assets:
United States	$	970,037	$	1,099,363
Europe and Other	150,744		160,934
Latin America	168,428		186,259
Total	$	1,289,209	$	1,446,556