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Segment Operating Results
12 Months Ended
Dec. 31, 2021
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 placement services and commissions for agency-based equity trading services and equity research. Investment Management includes Wealth Management and interests in private equity funds which are not managed by the Company, and the historical results include Institutional Asset Management. The Company completed the sales of its ECB businesses in 2020. In addition, in 2020, the Company completed the transition of its advisory presence in Mexico to a strategic alliance relationship with a newly-formed independent strategic advisory firm founded by certain former employees. See Note 5 for further information.
The Company's segment information for the years ended December 31, 2021, 2020 and 2019 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.
Other Revenue, net, included in each segment's Net Revenues includes the following:
Interest income and income (losses) on investment securities, including the Company's investment funds and futures contracts which are used as an economic hedge against the Company's deferred cash compensation program, certificates of deposit, cash and cash equivalents, long-term accounts receivable and on the Company’s debt security investment in G5 (through June 25, 2021, the date G5 repaid its outstanding debentures with the Company in full. See Note 10 for further information.)
Gains (losses) resulting from foreign currency fluctuations
Realized and unrealized gains and losses on interests in private equity funds which are not managed by the Company
Interest expense associated with the Company’s Notes Payable and lines of credit, as well as revenue and expenses associated with repurchase or resale transactions (prior to the sale of the Company's ECB business in December 2020)
A net loss on the sales of the Company's businesses at ECB, as well as a loss related to the release of cumulative foreign exchange losses resulting from the sale and wind-down of the Company's businesses in Mexico in 2020
Adjustments to amounts due pursuant to the Company’s tax receivable agreement, subsequent to its initial establishment, related to changes in enacted tax rates
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, execution, clearing and custody fees, 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, technology, human capital, facilities management and senior management activities.
Other Expenses include the following:
Amortization of LP Units and Certain Other Awards – Includes amortization costs associated with the vesting of Class J LP Units issued in conjunction with the acquisition of ISI and certain other related awards.
Special Charges, Including Business Realignment Costs – Includes the following expenses:
2021 Includes expenses related to the write-down of certain assets associated with a legacy private equity investment relationship which, consistent with the Company's current investment strategy, the Company decided to wind-down during 2021
2020 Includes expenses related to separation and transition benefits and related costs as a result of the Company's review of its operations and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the expansion of the Company's headquarters in New York and the Company's business realignment initiatives, as well as charges related to the impairment of assets resulting from the wind-down of the Company's businesses in Mexico
2019 – Includes expenses related to the acceleration of depreciation expense for leasehold improvements in conjunction with the expansion of the Company's headquarters in New York, the impairment of goodwill in the Company's Institutional Asset Management reporting unit and separation and transition benefits for certain employees terminated as a result of the Company's review of its operations
Acquisition and Transition Costs – Includes costs incurred in connection with acquisitions, divestitures and other ongoing business development initiatives, primarily comprised of professional fees for legal and other services, including costs in 2020 associated with the sale of the Company's ECB businesses.
Intangible Asset and Other Amortization – Includes amortization of intangible assets and other purchase accounting-related amortization associated with certain acquisitions.
The Company evaluates segment results based on net revenues and pre-tax income, both including and excluding the impact of the Other Expenses.
The following information presents each segment's contribution.
 For the Years Ended December 31,
 202120202019
Investment Banking
Net Revenues(1)
$3,223,889 $2,217,386 $1,951,795 
Operating Expenses2,125,871 1,637,542 1,485,477 
Other Expenses(2)
49,112 33,618 
Operating Income1,098,011 530,732 432,700 
Income from Equity Method Investments1,337 1,546 916 
Pre-Tax Income $1,099,348 $532,278 $433,616 
Identifiable Segment Assets$3,605,332 $3,186,864 $2,393,647 
Investment Management
Net Revenues(1)
$65,610 $46,519 $56,903 
Operating Expenses52,629 50,473 48,645 
Other Expenses(2)
8,554 345 3,247 
Operating Income (Loss)4,427 (4,299)5,011 
Income from Equity Method Investments12,824 12,852 10,080 
Pre-Tax Income$17,251 $8,553 $15,091 
Identifiable Segment Assets$197,325 $184,024 $204,966 
Total
Net Revenues(1)
$3,289,499 $2,263,905 $2,008,698 
Operating Expenses2,178,500 1,688,015 1,534,122 
Other Expenses(2)
8,561 49,457 36,865 
Operating Income1,102,438 526,433 437,711 
Income from Equity Method Investments14,161 14,398 10,996 
Pre-Tax Income$1,116,599 $540,831 $448,707 
Identifiable Segment Assets$3,802,657 $3,370,888 $2,598,613 
(1)Net Revenues include Other Revenue, net, allocated to the segments as follows:
 For the Years Ended December 31,
 202120202019
Investment Banking(A)
$19,370 $(20,770)$18,431 
Investment Management(B)
(174)(7,878)6,292 
Total Other Revenue, net$19,196 $(28,648)$24,723 
(A)Other Revenue, net, from Investment Banking includes interest expense on the Notes Payable and lines of credit of $17,586, $18,197 and $12,917 for the years ended December 31, 2021, 2020 and 2019, respectively. Other Revenue, net, also includes a loss of $21,070 related to the release of cumulative foreign exchange losses resulting from the sale and wind-down of the Company's businesses in Mexico for the year ended December 31, 2020.
(B)Other Revenue, net, from Investment Management includes a net loss of $3,441 related to the sale of the Company's ECB businesses and a loss of $6,295 related to the release of cumulative foreign exchange losses resulting from the sale and wind-down of the Company's businesses in Mexico for the year ended December 31, 2020.
(2)Other Expenses are as follows:
 For the Years Ended December 31,
 202120202019
Investment Banking
Amortization of LP Units and Certain Other Awards$— $1,067 $18,183 
Special Charges, Including Business Realignment Costs— 46,600 7,202 
Acquisition and Transition Costs262 705 
Intangible Asset and Other Amortization— 1,183 7,528 
Total Investment Banking49,112 33,618 
Investment Management
Special Charges, Including Business Realignment Costs8,554 45 2,939 
Acquisition and Transition Costs— 300 308 
Total Investment Management8,554 345 3,247 
Total Other Expenses$8,561 $49,457 $36,865 
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 located and managed in the following geographical areas:
 For the Years Ended December 31,
 202120202019
Net Revenues:(1)
United States$2,553,806 $1,768,901 $1,465,143 
Europe and Other710,660 497,102 501,425 
Latin America5,837 26,550 17,407 
Total$3,270,303 $2,292,553 $1,983,975 
(1)Excludes Other Revenue, Including Interest and Investments, and Interest Expense.
The Company's total assets are located in the following geographical areas:
December 31,
20212020
Total Assets:
United States$3,199,435 $2,862,343 
Europe and Other603,222 508,545 
Total$3,802,657 $3,370,888