Segments (Tables)

9 Months Ended

Sep. 30, 2019

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

The following table presents the financial data for the Company’s three segments for the three months ended September 30, 2019 (in millions):



	Three Months Ended September 30, 2019
	Quant & Solutions		Alter-natives		Liquid Alpha		Other			Reconciling Adjustments				Total U.S. GAAP⁽¹⁾
ENI revenue	$	93.1	$	37.4	$	65.2	$	0.1		$	2.0		(a)	$	197.8

ENI operating expenses	40.8		16.1		18.5		8.3			5.5			(b)	89.2
Earnings before variable compensation	52.3		21.3		46.7		(8.2		)	(3.5		)		108.6
Variable compensation	18.8		7.8		15.6		1.9			—				44.1
ENI operating earnings (after variable comp)	33.5		13.5		31.1		(10.1		)	(3.5		)		64.5
Affiliate key employee distributions	1.5		5.0		6.1		—			—				12.6
Earnings after Affiliate key employee distributions	32.0		8.5		25.0		(10.1		)	(3.5		)		51.9
Net interest income (expense)	—		—		—		(5.7		)	(2.2		)	(d)	(7.9		)
Net investment income	—		—		—		—			7.0			(e)	7.0
Net income attributable to non-controlling interests in consolidated Funds	—		—		—		—			(7.6		)	(e)	(7.6		)
Income tax (expense) benefit	—		—		—		(12.3		)	44.3			(f)	32.0
Economic net income	$	32.0	$	8.5	$	25.0	$	(28.1	)	$	38.0			$	75.4

The following table presents the financial data for the Company’s three segments for the three months ended September 30, 2018 (in millions):



	Three Months Ended September 30, 2018
	Quant & Solutions		Alter-natives		Liquid Alpha		Other			Reconciling Adjustments				Total U.S. GAAP⁽¹⁾
ENI revenue	$	97.0	$	54.6	$	76.9	$	0.1		$	1.5		(a)	$	230.1

ENI operating expenses	37.5		15.5		21.0		9.6			55.5			(b)	139.1
Earnings before variable compensation	59.5		39.1		55.9		(9.5		)	(54.0		)		91.0
Variable compensation	21.1		14.3		18.6		3.2			—				57.2
ENI operating earnings (after variable comp)	38.4		24.8		37.3		(12.7		)	(54.0		)		33.8
Affiliate key employee distributions	2.4		10.1		8.0		—			—				20.5
Earnings after Affiliate key employee distributions	36.0		14.7		29.3		(12.7		)	(54.0		)		13.3
Net interest income (expense)	—		—		—		(3.1		)	(2.3		)	(d)	(5.4		)
Net investment income (loss)	—		—		—		—			2.8			(e)	2.8
Net (income) loss attributable to non-controlling interests in consolidated Funds	—		—		—		—			(0.2		)	(e)	(0.2		)
Income tax (expense) benefit	—		—		—		(15.4		)	58.8			(f)	43.4
Gain (loss) on disposal of discontinued operations, net of tax	—		—		—		—			0.1			(e)	0.1
Economic net income	$	36.0	$	14.7	$	29.3	$	(31.2	)	$	5.2			$	54.0

The following table presents the financial data for the Company’s three segments for the nine months ended September 30, 2019 (in millions):



	Nine Months Ended September 30, 2019
	Quant & Solutions		Alter-natives		Liquid Alpha		Other			Reconciling Adjustments				Total U.S. GAAP⁽¹⁾
ENI revenue	$	277.3	$	125.7	$	202.8	$	0.3		$	6.0		(a)	$	612.1

ENI operating expenses	120.4		49.4		60.0		25.4			4.8			(b)	260.0
Earnings before variable compensation	156.9		76.3		142.8		(25.1		)	1.2				352.1
Variable compensation	57.6		28.0		48.1		7.5			4.6			(c)	145.8
ENI operating earnings (after variable comp)	99.3		48.3		94.7		(32.6		)	(3.4		)		206.3
Affiliate key employee distributions	4.1		17.1		18.6		—			—				39.8
Earnings after Affiliate key employee distributions	95.2		31.2		76.1		(32.6		)	(3.4		)		166.5
Net interest income (expense)	—		—		—		(15.4		)	(6.9		)	(d)	(22.3		)
Net investment income (loss)	—		—		—		—			25.2			(e)	25.2
Net (income) loss attributable to non-controlling interests in consolidated Funds	—		—		—		—			(9.6		)	(e)	(9.6		)
Income tax (expense) benefit	—		—		—		(36.9		)	33.2			(f)	(3.7		)
Economic net income	$	95.2	$	31.2	$	76.1	$	(84.9	)	$	38.5			$	156.1

The following table presents the financial data for the Company’s three segments for the nine months ended September 30, 2018 (in millions:



	Nine Months Ended September 30, 2018
	Quant & Solutions		Alter-natives		Liquid Alpha		Other			Reconciling Adjustments				Total U.S. GAAP⁽¹⁾
ENI revenue	$	295.2	$	170.0	$	241.6	$	0.3		$	6.6		(a)	$	713.7

ENI operating expenses	107.2		46.7		64.1		31.6			164.6			(b)	414.2
Earnings before variable compensation	188.0		123.3		177.5		(31.3		)	(158.0		)		299.5
Variable compensation	67.0		45.7		58.2		11.5			—				182.4
ENI operating earnings (after variable comp)	121.0		77.6		119.3		(42.8		)	(158.0		)		117.1
Affiliate key employee distributions	8.4		28.5		26.0		—			—				62.9
Earnings after Affiliate key employee distributions	112.6		49.1		93.3		(42.8		)	(158.0		)		54.2
Net interest income (expense)	—		—		—		(10.8		)	(5.9		)	(d)	(16.7		)
Net investment income	—		—		—		—			62.8			(e)	62.8
Net loss attributable to non-controlling interests in consolidated Funds	—		—		—		—			1.9			(e)	1.9
Income tax (expense) benefit	—		—		—		(47.2		)	58.3			(f)	11.1
Gain on disposal of discontinued operations, net of tax	—		—		—		—			0.1			(e)	0.1
Economic net income	$	112.6	$	49.1	$	93.3	$	(100.8	)	$	(40.8	)		$	113.4

(1)

The U.S. GAAP equivalent of ENI revenue is U.S. GAAP revenue. The U.S. GAAP equivalent of ENI operating expenses is U.S. GAAP operating expenses, which is comprised of ENI operating expenses, variable compensation and Affiliate key employee distributions above. The U.S. GAAP equivalent of earnings after Affiliate key employee distributions is U.S. GAAP operating Income. The U.S. GAAP equivalent of Economic Net Income is U.S. GAAP net income attributable to controlling interests.

Reconciling Adjustments:


(a)	Adjusted to exclude earnings from equity-accounted Affiliates, which are included in U.S. GAAP investment income, and to include consolidated Funds revenues and the separate revenues recorded for certain Fund expenses reimbursed by customers, which are included in U.S. GAAP revenue.


(b)	Adjusted to include non-cash amortization expense for acquisition-related consideration and pre-acquisition employee equity, non-cash expenses for key employee equity and profit interest revaluations, capital transaction costs, restructuring costs, consolidated Funds’ operating expenses and the Fund expenses reimbursed by customers, each of which are included in U.S. GAAP operating expenses.


(c)	Adjusted to include restructuring costs, which are included in U.S. GAAP compensation expense.


(d)	Adjusted to include the cost of seed financing, which is included in U.S. GAAP interest expense.


(e)	Adjusted to include net investment income (loss), net income (loss) attributable to non-controlling interests in consolidated Funds, and the gain on disposal of discontinued operations, all of which are included in U.S. GAAP net income attributable to controlling interests.


(f)	Adjusted to include the impact of deferred taxes resulting from changes in tax law and the amortization of goodwill and acquired intangibles. Also adjusted to include tax expense or benefits relating to uncertain tax positions, the tax impact of certain ENI adjustments and other unusual items that are not included in current operating results for ENI purposes.

Management fee revenue by principal geographic area is comprised of the following for the three and nine months ended September 30 (in millions):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
U.S.	$	148.2	$	173.7	$	459.4	$	533.8
Non-U.S.	48.2		55.9		150.4		167.2
Management fee revenue	$	196.4	$	229.6	$	609.8	$	701.0

Revenue from External Customers by Geographic Areas [Table Text Block]

Management fee revenue by principal geographic area is comprised of the following for the three and nine months ended September 30 (in millions):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
U.S.	$	148.2	$	173.7	$	459.4	$	533.8
Non-U.S.	48.2		55.9		150.4		167.2
Management fee revenue	$	196.4	$	229.6	$	609.8	$	701.0