Segment Information

12 Months Ended

Dec. 31, 2018

21.	SEGMENT INFORMATION

The Company’s reportable segments offer different products and services and are managed separately as different levels and types of expertise are required to effectively manage the segments’ transactions. Each segment is reviewed to determine the allocation of resources and to assess its performance. The Company’s principal operating activities are included in its Financial Advisory and Asset Management business segments as described in Note 1. In addition, as described in Note 1, the Company records selected other activities in its Corporate segment.

The Company’s segment information for the years ended December 31, 2018, 2017 and 2016 is prepared using the following methodology:

•

Revenue and expenses directly associated with each segment are included in determining operating income.

•

Expenses not directly associated with specific segments are allocated based on the most relevant measures applicable, including headcount, square footage and other factors.

•

Segment assets are based on those directly associated with each segment, and include an allocation of certain assets relating to various segments, based on the most relevant measures applicable, including headcount, square footage and other factors.

The Company allocates investment gains and losses, interest income and interest expense among the various segments based on the segment in which the underlying asset or liability is reported.

Each segment’s operating expenses include (i) compensation and benefits expenses incurred directly in support of the businesses and (ii) other operating expenses, which include directly incurred expenses for occupancy and equipment, marketing and business development, technology and information services, professional services, fund administration and outsourced services 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, human resources, legal, facilities management and senior management activities.

For the years ended December 31, 2018, 2017 and 2016, no individual client constituted more than 10% of the net revenue of any of the Company’s business segments.

Management evaluates segment results based on net revenue and operating income (loss) and believes that the following information provides a reasonable representation of each segment’s contribution with respect to net revenue, operating income (loss) and total assets:

		As of or for the Year Ended December 31,
		2018			2017			2016
Financial Advisory	Net Revenue	$	1,555,526		$	1,387,682		$	1,301,044
	Operating Expenses (a)		1,198,807			1,143,586			1,017,055
	Operating Income	$	356,719		$	244,096		$	283,989
	Total Assets	$	859,306		$	843,142		$	907,035
Asset Management	Net Revenue	$	1,331,801		$	1,255,820		$	1,051,316
	Operating Expenses (a)		912,110			810,870			769,737
	Operating Income	$	419,691		$	444,950		$	281,579
	Total Assets	$	728,220		$	756,398		$	645,653
Corporate	Net Revenue	$	(60,975	)	$	809		$	(18,989	)
	Operating Expenses (a)/(b)		34,669			(135,591	)		29,118
	Operating Income (Loss)	$	(95,644	)	$	136,400		$	(48,107	)
	Total Assets	$	3,409,715		$	3,329,137		$	3,003,820
Total	Net Revenue	$	2,826,352		$	2,644,311		$	2,333,371
	Operating Expenses (a)		2,145,586			1,818,865			1,815,910
	Operating Income	$	680,766		$	825,446		$	517,461
	Total Assets	$	4,997,241		$	4,928,677		$	4,556,508

(a)	Operating expenses include depreciation and amortization of property as set forth in table below.

	Year Ended December 31,
	2018		2017		2016
Financial Advisory	$	7,720	$	6,596	$	5,661
Asset Management		3,253		2,830		3,666
Corporate		23,130		22,072		23,937
Total	$	34,103	$	31,498	$	33,264

(b)	Operating expenses include a benefit of $6,495 and $202,546 for the years ended December 31, 2018 and 2017, respectively, recorded for the benefit pursuant to the tax receivable agreement. See Note 19 for information regarding the tax receivable agreement obligation.

Geographic Information

Due to the highly integrated nature of international financial markets, the Company manages its business based on the profitability of the enterprise as a whole. Accordingly, management believes that profitability by geographic region is not necessarily meaningful. The Company’s revenue and identifiable assets are generally allocated based on the country or domicile of the legal entity providing the service.

The following table sets forth the net revenue from, and identifiable assets for, the Company and its consolidated subsidiaries by geographic region allocated on the basis described above.

	As of or for the Year Ended December 31,
	2018		2017		2016
Net Revenue:
Americas	$	1,615,736	$	1,558,070	$	1,399,285
EMEA		1,022,994		903,525		795,932
Asia Pacific		187,622		182,716		138,154
Total	$	2,826,352	$	2,644,311	$	2,333,371
Operating Income:
Americas (a)	$	434,111	$	596,044	$	335,887
EMEA		206,578		193,781		168,745
Asia Pacific		40,077		35,621		12,829
Total	$	680,766	$	825,446	$	517,461
Identifiable Assets:
Americas	$	2,557,904	$	2,600,412	$	3,015,267
EMEA		2,150,597		2,039,385		1,286,149
Asia Pacific		288,740		288,880		255,092
Total	$	4,997,241	$	4,928,677	$	4,556,508

(a)

Operating income includes a benefit of $6,495 and $202,546 for the years ended December 31, 2018 and 2017, respectively, recorded for the benefit pursuant to the tax receivable agreement. See Note 19 for information regarding the tax receivable agreement obligation.