21.

Segment and Geographic Information

Segment Information

The Company’s business segments are determined based on the products and services provided and reflect the manner in which financial information is evaluated by management. Prior to the quarter ended June 30, 2012, the Company had one reportable segment. Following the acquisition of substantially all of the assets of Grubb & Ellis, the Company changed its segment reporting structure. As a result, beginning with the quarter ended June 30, 2012, the Company’s operations consisted of two reportable segments, Financial Services and Real Estate Services.

Accordingly, all segment information presented herein reflects the Company’s revised segment reporting structure for all periods presented. The Company’s Financial Services segment specializes in the brokerage of a broad range of products, including fixed income securities, interest rate swaps, foreign exchange, equities, equity derivatives, credit derivatives, commodities, futures and structured products. It also provides a full range of services, including trade execution, broker-dealer services, clearing, processing, information, and other back-office services to a broad range of financial and non-financial institutions. The Company’s Real Estate Services segment offers commercial real estate tenants, owners, investors and developers a wide range of services, including leasing; capital markets services, including investment sales, debt placement, appraisal and valuation services; commercial mortgage brokerage services; as well as consulting, project and development management, leasing and corporate advisory services and property and corporate facilities management services.

The Company evaluates the performance and reviews the results of the segments based on each segment’s “Income (loss) from operations before income taxes.”

The amounts shown below for the Financial Services and Real Estate Services segments reflect the amounts that are used by management to allocate resources and assess performance, which is based on each segment’s “Income (loss) from operations before income taxes.” In addition to the two business segments, the tables below include a “Corporate Items” category. Corporate revenues include fees from related parties and interest income as well as gains that are not considered part of the Company’s ordinary, ongoing business such as the gain related to the NASDAQ OMX Transaction. Corporate expenses include non-cash compensation expenses (such as the grant of exchangeability to limited partnership units; redemption/exchange of partnership units, issuance of restricted shares and reduction of compensation-related partnership loans; and allocations of net income to founding/working partner units and limited partnership units) as well as unallocated expenses such as certain professional and consulting fees, executive compensation and interest expense, which are managed separately at the corporate level.

Certain financial information for the Company’s segments is presented below. See Note 15—“Goodwill and Other Intangible Assets, Net,” for goodwill by reportable segment.

Three months ended September 30, 2013 (in thousands):


	Financial Services		Real Estate Services		Corporate Items			Total
Brokerage revenues:
Rates	$	109,110	$	—	$	—		$	109,110
Credit		54,410		—		—			54,410
Foreign Exchange		47,393		—		—			47,393
Equities and Other Asset Classes		34,862		—		—			34,862
Real Estate		—		105,303		—			105,303
Real estate management services		—		40,447		—			40,447
Fees from related parties		13		—		8,058			8,071
Market data		1,178		—		—			1,178
Software solutions		444		—		—			444
Other revenues		32,935		—		334			33,269
Losses on equity investments		—		—		(2,705	)		(2,705	)

Total non-interest revenues		280,345		145,750		5,687			431,782
Interest income		262		87		1,214			1,563

Total revenues		280,607		145,837		6,901			433,345
Interest expense		410		—		8,754			9,164
Non-interest expenses		226,613		132,238		22,667			381,518

Income (loss) from operations before income taxes	$	53,584	$	13,599	$	(24,520	)	$	42,663

For the three months ended September 30, 2013, the Financial Services segment revenues include $31.9 million related to the earn-out portion of the NASDAQ OMX Transaction consideration. For the three months ended September 30, 2013, the Real Estate Services segment income (loss) from operations before income taxes excludes $1.9 million related to the collection of receivables and associated expenses that were recognized at fair value as part of acquisition accounting.

Three months ended September 30, 2012 (in thousands):


	Financial Services		Real Estate Services		Corporate Items			Total
Brokerage revenues:
Rates	$	131,359	$	—	$	—		$	131,359
Credit		67,926		—		—			67,926
Foreign Exchange		48,910		—		—			48,910
Equities and Other Asset Classes		34,545		—		—			34,545
Real Estate		—		96,551		—			96,551
Real estate management services		—		39,672		—			39,672
Fees from related parties		2,774		—		10,328			13,102
Market data		4,166		—		—			4,166
Software solutions		2,485		—		—			2,485
Other revenues		237		55		2,907			3,199
Losses on equity investments		—		—		(2,995	)		(2,995	)

Total non-interest revenues		292,402		136,278		10,240			438,920
Interest income		190		14		1,193			1,397

Total revenues		292,592		136,292		11,433			440,317
Interest expense		1,650		4		8,104			9,758
Non-interest expenses		246,700		126,474		53,773			426,947

Income (loss) from operations before income taxes	$	44,242	$	9,814	$	(50,444	)	$	3,612

For the three months ended September 30, 2012, the Real Estate Services segment income (loss) from operations before income taxes excludes $6.3 million related to the collection of receivables and associated expenses that were recognized at fair value as part of acquisition accounting.

Nine months ended September 30, 2013 (in thousands):


	Financial Services		Real Estate Services		Corporate Items			Total
Brokerage revenues:
Rates	$	392,401	$	—	$	—		$	392,401
Credit		190,895		—		—			190,895
Foreign Exchange		167,433		—		—			167,433
Equities and Other Asset Classes		115,524		—		—			115,524
Real Estate		—		281,707		—			281,707
Real estate management services		—		119,608		—			119,608
Fees from related parties		5,693		—		27,768			33,461
Market data		8,946		—		—			8,946
Software solutions		5,540		—		—			5,540
Other revenues		33,558		32		1,684			35,274
Gain on divestiture		—		—		723,147			723,147
Losses on equity investments		—		—		(7,217	)		(7,217	)

Total non-interest revenues		919,990		401,347		745,382			2,066,719
Interest income		800		240		3,722			4,762

Total revenues		920,790		401,587		749,104			2,071,481
Interest expense		2,894		1		25,958			28,853
Non-interest expenses		743,895		381,844		652,278			1,778,017

Income (loss) from operations before income taxes	$	174,001	$	19,742	$	70,868		$	264,611

For the nine months ended September 30, 2013, the Financial Services segment revenues include $31.9 million related to the earn-out portion of the NASDAQ OMX Transaction consideration. For the nine months ended September 30, 2013, the Real Estate Services segment income (loss) from operations before income taxes excludes $9.2 million related to the collection of receivables and associated expenses that were recognized at fair value as part of acquisition accounting. For the nine months ended September 30, 2013, Corporate Items income (loss) from operations before income taxes includes a $723.1 million gain on divestiture related to the NASDAQ OMX Transaction and approximately $465 million in compensation expense related to the Global Partnership Restructuring Program.

Nine months ended September 30, 2012 (in thousands):


	Financial Services		Real Estate Services		Corporate Items			Total
Brokerage revenues:
Rates	$	412,645	$	—	$	—		$	412,645
Credit		222,381		—		—			222,381
Foreign Exchange		160,881		—		—			160,881
Equities and Other Asset Classes		120,082		—		—			120,082
Real Estate		—		226,518		—			226,518
Real estate management services		—		81,563		—			81,563
Fees from related parties		8,754		—		30,389			39,143
Market data		13,120		—		—			13,120
Software solutions		7,421		—		—			7,421
Other revenues		283		520		3,227			4,030
Losses on equity investments		—		—		(8,103	)		(8,103	)

Total non-interest revenues		945,567		308,601		25,513			1,279,681
Interest income		904		305		3,926			5,135

Total revenues		946,471		308,906		29,439			1,284,816
Interest expense		4,730		262		19,902			24,894
Non-interest expenses		762,572		294,933		175,443			1,232,948

Income (loss) from operations before income taxes	$	179,169	$	13,711	$	(165,906	)	$	26,974

For the nine months ended September 30, 2012, the Real Estate Services segment income (loss) from operations before income taxes excludes $17.7 million related to the collection of receivables and associated expenses that were recognized at fair value as part of acquisition accounting.

Total assets by reportable segment (in thousands):


Total Assets (1)	Financial Services		Real Estate Services		Total
At September 30, 2013	$	2,640,339	$	307,708	$	2,948,047

At December 31, 2012	$	1,357,838	$	281,101	$	1,638,939

(1)	Corporate assets have been fully allocated to the Company’s business segments.

Geographic Information

The Company offers products and services in the U.S., U.K., Asia (including Australia), France, Other Americas, Other Europe, and the Middle East and Africa region (defined as the “MEA” region). Information regarding revenues for the three and nine months ended September 30, 2013 and 2012, respectively, and information regarding long-lived assets (defined as loans, forgivable loans and other receivables from employees and partners, net; fixed assets, net; certain other investments; goodwill; other intangible assets, net of accumulated amortization; and rent and other deposits) in the geographic areas as of September 30, 2013 and December 31, 2012, respectively, were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Revenues:
U.S.	$	212,165	$	218,074	$	1,372,073	$	582,177
U.K.		140,284		131,861		422,912		409,231
Asia		43,264		51,368		142,147		160,175
France		19,627		22,360		69,208		73,613
Other Americas		8,034		9,684		29,013		32,391
Other Europe/MEA		9,971		6,970		36,128		27,229

Total revenues	$	433,345	$	440,317	$	2,071,481	$	1,284,816


	September 30, 2013		December 31, 2012
Long-lived assets:
U.S.	$	281,423	$	319,185
U.K.		111,781		148,922
Asia		40,350		52,675
France		9,275		12,310
Other Americas		14,601		16,066
Other Europe/MEA		2,130		10,210

Total long-lived assets	$	459,560	$	559,368