Segment Reporting

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company has two reportable business segments: Op Co and Asset Co. The Op Co segment consists of Cowen Investment Management ("CIM"), Investment Banking, Markets and Research. The Asset Co segment consists of the Company's private investments, private real estate investments and other legacy investment strategies.

Segment Measures

The measure of profit or loss for these segments is Economic Income (Loss), which management uses to evaluate the financial performance of and make operating decisions for the segments including determining appropriate compensation levels. Expenses not directly associated with specific segments are allocated based on the most relevant measures applicable, including headcount, square footage and other factors.

In general, Economic Income (Loss) is a pre-tax measure that (i) includes management reclassifications which the Company believes provides additional insight into the performance of the Company’s core businesses and divisions (ii) eliminates the impact of consolidation for Consolidated Funds and (iii) excludes (1) goodwill and certain other impairments (2) certain other transaction-related adjustments and/or reorganization expenses and (3) certain costs associated with debt.

The Company does not disclose total asset information for its business segments as the information is not reviewed by the Chief Operating Decision Maker ("CODM"). The Op Co and Asset Co segments do not conduct inter-segment transactions.

The following table sets forth operating results for the Company's consolidated US GAAP net income (loss) and related reclassifications and adjustments necessary to reconcile to the Company's Economic Income (Loss) measure which represents the Company's Op Co and Asset Co segments' results:

	Year Ended December 31,
	2020	2019	2018
	(dollars in thousands)
Economic Income
Op Co	329,381	53,257	77,935
Asset Co	(16,136)	(9,560)	(9,034)
Adjustments made to arrive at Income (loss) before income taxes
Noncontrolling Interest	(9,299)	31,239	37,060
Preferred stock dividends	6,792	6,792	6,792
Amortization of (discount)/premium on convertible debt	(4,499)	(4,297)	(4,010)
Transaction-related and other costs	(9,098)	(2,608)	(2,778)
Goodwill and other impairment	(2,423)	(4,100)	—
Unrealized gain (loss) on conversion option (a)	—	—	(7,416)
Debt extinguishment gain / loss	2,719	—	(556)
Exited business cost	—	—	(2,395)
Income (loss) before income taxes	297,437	70,723	95,598

(a) Prior to the Company's June 26, 2018 stockholder meeting, the embedded conversion option feature associated with its December 2022 Convertible Notes was recognized at fair value in accordance with US GAAP as a derivative liability. The profit and loss movement related to that liability was associated with the movement of the per share price of the Company's Class A common stock. Subsequent to receiving stockholder approval for share settlement the embedded conversion option was reclassified to equity and will no longer result in profit and loss movements.

Economic Income (Loss) information provided and reviewed by the CODM includes (i) non-interest revenue, (ii) interest revenue, (iii) interest expense and (iv) depreciation and amortization expense presented on an Economic Income (Loss) basis by Segment. The following table sets forth the included segment information on a US GAAP basis with reconciliations to consolidated amounts.

	Year Ended December 31,
	2020	2019	2018
	(dollars in thousands)
OpCo
Non-Interest Revenue	1,447,595	874,506	856,285
Interest Revenue	169,358	165,443	96,535
Interest Revenue, Consolidated funds	2,683	6,746	4,413
Total Revenues	1,619,636	1,046,695	957,233
Interest Expense	173,537	155,974	94,555
Interest Expense, Consolidated funds	1,376	3,553	4,606
Depreciation and Amortization	22,655	20,424	11,402
Asset Co
Non-Interest Revenue	2,889	2,455	8,447
Interest Revenue	770	284	1,224
Interest Revenue, Consolidated funds	9	9	12
Total Revenues	3,668	2,748	9,683
Interest Expense	6,120	3,835	2,920
Interest Expense, Consolidated funds	—	—	—
Depreciation and Amortization	22	36	1,034
Total Segment
Non-Interest Revenue *	1,450,484	876,961	864,732
Interest Revenue	170,128	165,727	97,759
Interest Revenue, Consolidated funds	2,692	6,755	4,425
Total Revenues	1,623,304	1,049,443	966,916
Interest and Dividend Expense (includes dividend expense of $8.1 million, $8.8 million and $6.6 million for the years ended December 31, 2020, 2019, and 2018, respectively)	187,725	168,628	104,116
Interest and Dividend Expense, Consolidated funds (includes dividend expense of $0.7 million, $1.0 million and $1.9 million for the years ended December 31, 2020, 2019, and 2018, respectively)	2,064	4,602	6,534
Depreciation and Amortization	22,677	20,460	12,436

* Includes dividend revenue of $17.3 million, $9.2 million and $10.2 million for the years ended December 31, 2020, 2019, and 2018, respectively. In addition, includes dividend revenue, consolidated funds, of $2.5 million, $3.0 million and $5.4 million for the years ended December 31, 2020, 2019, and 2018, respectively.