Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2020

Segment Reporting Information, by Segment


	Three Months Ended March 31, 2020
							Adjustments
	Operating Company		Asset Company		Total Economic Income (Loss)		Funds Consolidation		Other Adjustments			US GAAP Net Income (Loss)
	(dollars in thousands)
Revenues
Investment banking	$	98,759	$	—	$	98,759	$	—	$	6,269	(a)	$	105,028
Brokerage	132,672		—		132,672		—		6,690		(b)(g)	139,362
Management fees	14,711		204		14,915		(678)		(2,633)		(c)	11,604
Incentive income (loss)	(2,487)		(2,402)		(4,889)		—		4,889		(c)	—
Investment income (loss)	(19,449)		(11,655)		(31,104)		—		31,104		(d)(g)	—
Interest and dividends	—		—		—		—		42,077		(b)(d)	42,077
Reimbursement from affiliates	—		—		—		(25)		286		(e)	261
Reinsurance premiums	—		—		—		—		10,471		(f)	10,471
Other revenue	562		—		562		—		1,288		(f)	1,850
Consolidated Funds revenues	—		—		—		3,156		—			3,156
Total revenues	224,768		(13,853)		210,915		2,453		100,441			313,809
Interest expense (Economic Income/(Loss)) / Interest and dividend expense (US GAAP)	6,343		1,435		7,778		—		31,014		(b)(d)	38,792
Total net revenues	218,425		(15,288)		203,137		2,453		69,427			275,017
Expenses
Non interest expense	211,066		859		211,925		—		16,514		(a)(e)(h)(i)	228,439

Consolidated Funds expenses	—		—		—		2,714		—			2,714
Total expenses	211,066		859		211,925		2,714		16,514			231,153
Total other income (loss)	—		—		—		(62,054)		(55,094)		(c)(d)(i)	(117,148)
Income taxes expense / (benefit)	—		—		—		—		(1,173)		(h)	(1,173)
Income (loss) attributable to non-controlling interests in consolidated subsidiaries and investment funds	1,740		—		1,740		(62,315)		(1,613)			(62,188)
Income (loss) attributable to Cowen Inc.	5,619		(16,147)		(10,528)		—		605			$	(9,923)
Less: Preferred stock dividends	1,358		340		1,698		—		—			1,698
Economic Income (Loss)/ Income (loss) attributable to Cowen Inc. common stockholders	4,261		(16,487)		(12,226)		$	—	$	605		$	(11,621)
Add back: Depreciation and amortization expense	5,428		6		5,434
Economic operating income (loss)	$	9,689	$	(16,481)	$	(6,792)



	Three Months Ended March 31, 2019
							Adjustments
	Operating Company		Asset Company		Total Economic Income (Loss)		Funds Consolidation		Other Adjustments			US GAAP Net Income (Loss)
	(dollars in thousands)
Revenues
Investment banking	$	82,991	$	—	$	82,991	$	—	$	(2,885)	(a)	$	80,106
Brokerage	111,872		—		111,872		—		(14,409)		(b)(g)	97,463
Management fees	9,728		703		10,431		(501)		(2,789)		(c)	7,141
Incentive income (loss)	16,637		110		16,747		(544)		(16,188)		(c)	15
Investment income (loss)	9,427		842		10,269		—		(10,269)		(d)(g)	—
Interest and dividends	—		—		—		—		29,092		(b)(d)	29,092
Reimbursement from affiliates	—		—		—		(34)		322		(e)	288

Reinsurance premiums	—		—		—		—		6,591		(f)	6,591
Other revenue	1,123		36		1,159		—		(98)		(f)	1,061
Consolidated Funds revenues	—		—		—		2,340		—			2,340
Total revenues	231,778		1,691		233,469		1,261		(10,633)			224,097
Interest expense (Economic Income/(Loss)) / Interest and dividend expense (US GAAP)	5,317		1,247		6,564		—		22,520		(d)	29,084
Total net revenues	226,461		444		226,905		1,261		(33,153)			195,013
Expenses
Non interest expense	206,531		2,379		208,910		—		12,091		(a)(e)(h)(i)	221,001

Consolidated Funds expenses	—		—		—		1,482		—			1,482
Total expenses	206,531		2,379		208,910		1,482		12,091			222,483
Total other income (loss)	—		—		—		621		40,321		(c)(d)(i)	40,942
Income taxes expense / (benefit)	—		—		—		—		3,177		(h)	3,177
Income (loss) attributable to non-controlling interests in consolidated subsidiaries and investment funds	1,023		—		1,023		400		(911)			512
Income (loss) attributable to Cowen Inc.	18,907		(1,935)		16,972		—		(7,189)			9,783
Less: Preferred stock dividends	1,375		323		1,698		—		—			1,698
Economic Income (Loss)/ Income (loss) attributable to Cowen Inc. common stockholders	17,532		(2,258)		15,274		$	—	$	(7,189)		$	8,085
Add back: Depreciation and amortization expense	4,939		17		4,956
Economic operating income (loss)	$	22,471	$	(2,241)	$	20,230

The following is a summary of the adjustments made to US GAAP net income (loss) to arrive at Economic Income (Loss):

Funds Consolidation: The impacts of consolidation and the related elimination entries of the Consolidated Funds are not included in Economic Income (Loss). Adjustments to reconcile to US GAAP net income (loss) included elimination of incentive income and management fees earned from the Consolidated Funds and addition of investment fund expenses excluding management fees paid, investment fund revenues and investment income (loss).

Other Adjustments:


(a)			Economic Income (Loss) presents underwriting expenses net of investment banking revenues, expenses reimbursed from clients within their respective expense category. Economic Income (Loss) also records retainer fees, relating to investment banking activities, collectible during the period that would otherwise be deferred until closing for US GAAP reporting.

(b)			Economic Income (Loss) brokerage revenues included net securities borrowed and securities loaned activities which are shown gross in interest income and interest expense for US GAAP.

(c)			Economic Income (Loss) recognizes revenues (i) net of fund start-up costs and distribution fees paid to agents, (ii) records income from uncrystallized incentive fees and (iii) the Company's proportionate share of management and incentive fees of certain real estate operating entities, the healthcare royalty business and the activist business.

(d)			Economic Income (Loss) recognizes Company income from proprietary trading (including interest and dividends) for which the majority of this activity is shown in other income (loss) for US GAAP reporting.

(e)			Reimbursement from affiliates is shown as a reduction of Economic Income expenses, but is included as a part of revenues under US GAAP.

(f)			Economic Income (Loss) recognizes underwriting income from the Company's insurance related activities, net of expenses, within other revenue. The costs are recorded within expenses for US GAAP reporting.

(g)			Economic Income (Loss) recognizes gains and losses on investments held as part of the Company's facilitation and trading business within brokerage revenues as these investments are directly related to the markets business activities.

(h)			Economic Income (Loss) excludes income taxes and acquisition related adjustments as management does not consider these items when evaluating the performance of the segment.

(i)			Economic Income (Loss) recognizes the Company's proportionate share of expenses, for certain real estate operating entities and the activist business, for which the investments are recorded under the equity method of accounting for investments.