Segment Operating Results

6 Months Ended

Jun. 30, 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 and six months ended June 30, 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 and Class G and H LP Interests issued in conjunction with the acquisition of ISI 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, as well as costs related to transitioning ISI’s infrastructure.

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 and six months endedJune 30, 2015.

The following information presents each segment’s contribution.

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2015		2014		2015		2014
Investment Banking
Net Revenues (1)	$	244,377	$	191,323	$	460,957	$	319,174
Operating Expenses	194,271		148,751		365,635		254,283
Other Expenses (2)	22,802		4,237		55,037		7,451
Operating Income	27,304		38,335		40,285		57,440
Income from Equity Method Investments	803		813		766		503
Pre-Tax Income	$	28,107	$	39,148	$	41,051	$	57,943
Identifiable Segment Assets	$	848,750	$	671,290	$	848,750	$	671,290
Investment Management
Net Revenues (1)	$	23,719	$	26,373	$	45,122	$	47,635
Operating Expenses	19,819		21,591		39,775		41,162
Other Expenses (2)	93		82		3,523		164
Operating Income	3,807		4,700		1,824		6,309
Income from Equity Method Investments	1,195		1,225		2,339		1,776
Pre-Tax Income	$	5,002	$	5,925	$	4,163	$	8,085
Identifiable Segment Assets	$	450,797	$	476,607	$	450,797	$	476,607
Total
Net Revenues (1)	$	268,096	$	217,696	$	506,079	$	366,809
Operating Expenses	214,090		170,342		405,410		295,445
Other Expenses (2)	22,895		4,319		58,560		7,615
Operating Income	31,111		43,035		42,109		63,749
Income from Equity Method Investments	1,998		2,038		3,105		2,279
Pre-Tax Income	$	33,109	$	45,073	$	45,214	$	66,028
Identifiable Segment Assets	$	1,299,547	$	1,147,897	$	1,299,547	$	1,147,897

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

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2015			2014			2015			2014
Investment Banking (A)	$	(2,173	)	$	(928	)	$	(3,231	)	$	(1,581	)
Investment Management (B)	(786		)	(428		)	(1,464		)	(1,081		)
Total Other Revenue, net	$	(2,959	)	$	(1,356	)	$	(4,695	)	$	(2,662	)

(A) Investment Banking Other Revenue, net, includes interest expense on the Senior Notes, subordinated borrowings and line of credit of $1,793 and $3,437for the three and six months ended June 30, 2015, respectively, and $1,105 and $2,210for the three and six months ended June 30, 2014, respectively.

(B) Investment Management Other Revenue, net, includes interest expense on the Senior Notes and line of credit of $959 and $1,912for the three and six months ended June 30, 2015, respectively, and $932 and $1,864for the three and six months ended June 30, 2014, respectively.

(2) Other Expenses are as follows:

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2015			2014		2015		2014
Investment Banking
Amortization of LP Units / Interests and Certain Other Awards	$	18,193		$	—	$	44,143	$	—
Other Acquisition Related Compensation Charges	952			2,565		1,537		5,779
Special Charges	(139		)	—		2,151		—
Intangible Asset and Other Amortization	2,890			—		5,816		—
Professional Fees	—			1,672		—		1,672
Acquisition and Transition Costs	906			—		1,390		—
Total Investment Banking	22,802			4,237		55,037		7,451
Investment Management
Special Charges	—			—		3,348		—
Acquisition and Transition Costs	11			—		11		—
Intangible Asset and Other Amortization	82			82		164		164
Total Investment Management	93			82		3,523		164
Total Other Expenses	$	22,895		$	4,319	$	58,560	$	7,615

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 June 30,				For the Six Months Ended June 30,
	2015		2014		2015		2014
Net Revenues: (1)
United States	$	203,186	$	142,502	$	365,008	$	250,429
Europe and Other	56,927		47,997		128,138		84,785
Latin America	10,942		28,553		17,628		34,257
Total	$	271,055	$	219,052	$	510,774	$	369,471

(1) Excludes Other Revenue and Interest Expense.

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

	June 30, 2015		December 31, 2014
Total Assets:
United States	$	970,784	$	1,099,363
Europe and Other	173,340		160,934
Latin America	155,423		186,259
Total	$	1,299,547	$	1,446,556