Variable Interest Entities and Consolidation of Investment Vehicles (Tables)

12 Months Ended

Mar. 31, 2013

Mar. 31, 2012

Mar. 13, 2013

Variable Interest Entities and Consolidation of Investment Vehicles [Abstract]

Impact of Consolidated Investment Entities on Consolidated Financial Statements

Consolidating Balance Sheets

	March 31, 2013									March 31, 2012
	Balance Before Consolidation of CIVs		CIVs		Eliminations			Consolidated Totals		Balance Before Consolidation of CIVs		CIVs		Eliminations			Consolidated Totals
Current assets	$	1,908,932	$	73,320	$	(39,390	)	$	1,942,862	$	2,439,161	$	58,040	$	(39,407	)	$	2,457,794
Non-current assets	5,115,181		211,617		—			5,326,798		5,801,681		296,272		—			6,097,953
Total assets	$	7,024,113	$	284,937	$	(39,390	)	$	7,269,660	$	8,240,842	$	354,312	$	(39,407	)	$	8,555,747
Current liabilities	$	692,261	$	10,539	$	(334	)	$	702,466	$	971,803	$	4,467	$	(488	)	$	975,782
Long-term debt of CIVs	—		207,835		—			207,835		—		271,707		—			271,707
Other non-current liabilities	1,517,069		2,930		—			1,519,999		1,603,064		3,872		—			1,606,936
Total liabilities	2,209,330		221,304		(334		)	2,430,300		2,574,867		280,046		(488		)	2,854,425
Redeemable non-controlling interests	1,355		—		19,654			21,009		996		—		23,035			24,031
Total stockholders’ equity	4,813,428		63,633		(58,710		)	4,818,351		5,664,979		74,266		(61,954		)	5,677,291
Total liabilities and equity	$	7,024,113	$	284,937	$	(39,390	)	$	7,269,660	$	8,240,842	$	354,312	$	(39,407	)	$	8,555,747

Consolidating Statements of Income (Loss)

	Fiscal Year Ended
	March 31, 2013
	Balance Before Consolidation of CIVs			CIVs			Eliminations			As Reported
Total operating revenues	$	2,615,047		$	—		$	(2,397	)	$	2,612,650
Total operating expenses	3,046,587			2,965			(2,403		)	3,047,149
Operating income (loss)	(431,540		)	(2,965		)	6			(434,499		)
Total other non-operating income (expense)	(72,177		)	(2,864		)	(1,067		)	(76,108		)
Income (loss) before income tax provision (benefit)	(503,717		)	(5,829		)	(1,061		)	(510,607		)
Income tax provision (benefit)	(150,859		)	—			—			(150,859		)
Net income (loss)	(352,858		)	(5,829		)	(1,061		)	(359,748		)
Less:  Net income (loss) attributable to noncontrolling interests	469			—			(6,890		)	(6,421		)
Net income (loss) attributable to Legg Mason, Inc.	$	(353,327	)	$	(5,829	)	$	5,829		$	(353,327	)

	Fiscal Year Ended
	March 31, 2012
	Balance Before Consolidation of CIVs			CIVs			Eliminations			As Reported
Total operating revenues	$	2,665,668		$	—		$	(3,094	)	$	2,662,574
Total operating expenses	2,323,213			3,709			(3,101		)	2,323,821
Operating income (loss)	342,455			(3,709		)	7			338,753
Total other non-operating income (expense)	(49,236		)	18,336			(4,770		)	(35,670		)
Income (loss) before income tax provision (benefit)	293,219			14,627			(4,763		)	303,083
Income tax provision (benefit)	72,052			—			—			72,052
Net income (loss)	221,167			14,627			(4,763		)	231,031
Less:  Net income (loss) attributable to noncontrolling interests	350			—			9,864			10,214
Net income (loss) attributable to Legg Mason, Inc.	$	220,817		$	14,627		$	(14,627	)	$	220,817

	Fiscal Year Ended
	March 31, 2011
	Balance Before Consolidation of CIVs			CIVs			Eliminations			As Reported
Total operating revenues	$	2,788,450		$	—		$	(4,133	)	$	2,784,317
Total operating expenses	2,396,938			4,704			(4,133		)	2,397,509
Operating income (loss)	391,512			(4,704		)	—			386,808
Total other non-operating income (expense)	(17,931		)	1,704			(5,384		)	(21,611		)
Income (loss) before income tax provision (benefit)	373,581			(3,000		)	(5,384		)	365,197
Income tax provision (benefit)	119,434			—			—			119,434
Net income (loss)	254,147			(3,000		)	(5,384		)	245,763
Less:  Net income (loss) attributable to noncontrolling interests	224			—			(8,384		)	(8,160		)
Net income (loss) attributable to Legg Mason, Inc.	$	253,923		$	(3,000	)	$	3,000		$	253,923

Fair Value Assets and Liabilities Measured on Recurring Basis of Consolidated Investments Entities

	Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			Value as of March 31, 2013
Assets:
Trading investments:
Hedge funds	$	2,076	$	3,268		$	19,448		$	24,792
Investments:
CLO loans	—		172,519			—			172,519
CLO bonds	—		11,052			—			11,052
Private equity funds	—		—			26,982			26,982
Total investments	—		183,571			26,982			210,553
	$	2,076	$	186,839		$	46,430		$	235,345
Liabilities:
CLO debt	$	—	$	—		$	(207,835	)	$	(207,835	)
Derivative liabilities	—		(2,930		)	—			(2,930		)
	$	—	$	(2,930	)	$	(207,835	)	$	(210,765	)

	As of March 31, 2012
	Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			Total
Assets:
Trading investments:
Hedge funds	$	1,016	$	6,443		$	24,116		$	31,575
Investments:
CLO loans	—		260,690			—			260,690
CLO bonds	—		9,092			—			9,092
Private equity funds	—		—			25,071			25,071
Total investments	—		269,782			25,071			294,853
	$	1,016	$	276,225		$	49,187		$	326,428
Liabilities:
CLO debt	$	—	$	—		$	(271,707	)	$	(271,707	)
Derivative liabilities	—		(3,872		)	—			(3,872		)
	$	—	$	(3,872	)	$	(271,707	)	$	(275,579	)

Fair Value Inputs Assets Liabilities Quantitative Information

Value as of March 31, 2013			Valuation technique	Unobservable input	Range (weighted-average)
$	(207,835	)	Discounted cash flow	Discount rate	1.1	%	-	11.0	%	(2.3%)
				Default rate	3.0	%	-	4.0	%	(3.5%)
				Constant prepayment rate				25.0	%

Value as of March 31, 2012			Valuation technique	Unobservable input	Range (weighted-average)
$	(271,707	)	Discounted cash flow	Discount rate	1.7	%	-	24.5	%	(3.8%)
				Default rate	2.5	%	-	4.0	%	(3.4%)
				Constant prepayment rate				15.0	%

	Projected Cash Flow Growth Rates	Discount Rate
Indefinite-life fund management contracts	(35)% to 11% (weighted-average - 6% )	16.0%
	Projected Revenue Growth Rates
Contingent consideration	(23)% to 3% (weighted-average - (6)%)	2.0%

Fair Value Assets and Liabilities of Consolidated Investment Entities Measured on Recurring Basis, Unobservable Input, Reconciliation

	Value as of March 31, 2012			Purchases		Sales			Settlements / Other		Transfers		Realized and unrealized gains/(losses), net			Value as of March 31, 2013
Assets:
Hedge funds	$	24,116		$	1,980	$	(6,602	)	$	—	$	—	$	(46	)	$	19,448
Private equity funds	25,071			2,622		(2,030		)	—		—		1,319			26,982
	$	49,187		$	4,602	$	(8,632	)	$	—	$	—	$	1,273		$	46,430
Liabilities:
CLO debt	$	(271,707	)	$	—	$	—		$	75,798	$	—	$	(11,926	)	$	(207,835	)
Total realized and unrealized gains (losses), net													$	(10,653	)

	Value as of March 31, 2011			Purchases		Sales			Transfers In		Transfers Out			Realized and unrealized gains, net		Value as of March 31, 2012
Assets:
Hedge funds	$	34,272		$	17,018	$	(32,058	)	$	3,302	$	(3,316	)	$	4,898	$	24,116
Private equity funds	17,879			4,889		(762		)	—		—			3,065		25,071
	$	52,151		$	21,907	$	(32,820	)	$	3,302	$	(3,316	)	$	7,963	$	49,187
Liabilities:
CLO debt	$	(278,320	)	$	—	$	—		$	—	$	—		$	6,613	$	(271,707	)
Total realized and unrealized gains, net														$	14,576

Consolidated Investment Vehicles, Fair Value, Investments Entities that Calculate Net Asset Value Per Share

		Fair Value Determined  Using NAV						As of March 31, 2013
Category of Investment	Investment Strategy	March 31, 2013			March 31, 2012			Unfunded Commitments		Remaining Term
Hedge funds	Global macro, fixed income, long/short equity, systematic, emerging market, U.S. and European hedge	$	24,792	(1)	$	31,575	(2)	n/a		n/a
Private equity funds	Long/short equity	26,982		(3)	25,071		(3)	$	5,549	6 years
Total		$	51,774		$	56,646		$	5,549

n/a – not applicable

(1) 11% daily redemption; 8% monthly redemption; 2% quarterly redemption; and 79% are subject to three to five year lock-up or side pocket provisions.

(2) 5% daily redemption; 6% monthly redemption; 5% quarterly redemption; and 84% are subject to three to five year lock-up or side pocket provisions.

(3) Liquidations are expected over the remaining term.

Fair Value, Option, Quantitative Disclosures

The following table presents the fair value and unpaid principal balance of CLO loans, bonds and debt carried at fair value under the fair value option as of March 31, 2013 and March 31, 2012:

	March 31, 2013			March 31, 2012
CLO loans and bonds
Unpaid principal balance	$	186,839		$	277,156
Unpaid principal balance in excess of fair value	(3,268		)	(7,374		)
Fair value	$	183,571		$	269,782
Unpaid principal balance of loans that are more than 90 days past due and also in nonaccrual status	$	—		$	2,963
Unpaid principal balance in excess of fair value for loans that are more than 90 days past due and also in nonaccrual status	—			(1,023		)
Fair value of loans more than 90 days past due and in nonaccrual status	$	—		$	1,940
CLO debt
Principal amounts outstanding	$	225,161		$	300,959
Excess unpaid principal over fair value	(17,326		)	(29,252		)
Fair value	$	207,835		$	271,707

Schedule of Variable Interest Entities Assets Liabilities and Maximum Risk of Loss

	As of March 31, 2013
	Equity Interests on the Consolidated Balance Sheet		Maximum Risk of Loss (1)
CLOs	$	—	$	496
Real Estate Investment Trust	989		2,644
Other sponsored investment funds	43,104		87,121
Total	$	44,093	$	90,261

	As of March 31, 2012
	Equity Interests on the Consolidated Balance Sheet		Maximum Risk of Loss (1)
CLO	$	—	$	442
Public-Private Investment Program (2)	282		282
Other sponsored investment funds	54,161		93,521
Total	$	54,443	$	94,245

(1) Includes equity investments the Company has made or is required to make and any earned but uncollected management fees.

(2) Upon liquidation of the fund, Legg Mason's investment was fully redeemed in the quarter ended December 31, 2012.