Segment Operating Results | Segment Operating Results Business Segments – The Company’s business results are categorized into the following two segments: Investment Banking and Investment Management. Investment Banking includes providing advice to clients on significant mergers, acquisitions, divestitures and other strategic corporate transactions, as well as services related to securities underwriting, private fund placement services and commissions for agency-based equity trading services and equity research. Investment Management includes advising third-party investors in the Institutional Asset Management, Wealth Management and Private Equity sectors. On October 31, 2014, the Company acquired the operating businesses of ISI, which is included in the Investment Banking segment. The Company’s segment information for the three and six months ended June 30, 2015 and 2014 is prepared using the following methodology: • Revenue, expenses and income (loss) from equity method investments directly associated with each segment are included in determining pre-tax income. • Expenses not directly associated with specific segments are allocated based on the most relevant measures applicable, including headcount, square footage and other performance and time-based factors. • Segment assets are based on those directly associated with each segment, or for certain assets shared across segments; those assets are allocated based on the most relevant measures applicable, including headcount and other factors. • Investment gains and losses, interest income and interest expense are allocated between the segments based on the segment in which the underlying asset or liability is held. Each segment’s Operating Expenses include: a) employee compensation and benefits expenses that are incurred directly in support of the segment and b) non-compensation expenses, which include expenses for premises and occupancy, professional fees, travel and entertainment, communications and information services, equipment 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, legal, facilities management and senior management activities. Other Expenses include the following: • Amortization of LP Units/Interests and Certain Other Awards - Includes amortization costs associated with the vesting of Class E LP Units and Class G and H LP Interests issued in conjunction with the acquisition of ISI and certain other related awards. • Other Acquisition Related Compensation Charges - Includes compensation charges associated with deferred consideration, retention awards and related compensation for The Lexicon Partnership LLP ("Lexicon") employees. • Special Charges - Includes expenses primarily related to separation benefits and costs associated with the termination of certain contracts within the Company’s Evercore ISI business, and the finalization of a matter associated with the wind-down of the Company’s U.S. Private Equity business. • Intangible Asset and Other Amortization - Includes amortization of intangible assets and other purchase accounting-related amortization associated with certain acquisitions. • Acquisition and Transition Costs - Includes professional fees for legal and other services incurred related to the Company’s acquisition of all of the outstanding equity interests of the operating businesses of ISI, as well as costs related to transitioning ISI’s infrastructure. The Company evaluates segment results based on net revenues and pre-tax income, both including and excluding the impact of the Other Expenses. No client accounted for more than 10% of the Company’s consolidated Net Revenues for the three and six months ended June 30, 2015 . The following information presents each segment’s contribution. For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Investment Banking Net Revenues (1) $ 244,377 $ 191,323 $ 460,957 $ 319,174 Operating Expenses 194,271 148,751 365,635 254,283 Other Expenses (2) 22,802 4,237 55,037 7,451 Operating Income 27,304 38,335 40,285 57,440 Income from Equity Method Investments 803 813 766 503 Pre-Tax Income $ 28,107 $ 39,148 $ 41,051 $ 57,943 Identifiable Segment Assets $ 848,750 $ 671,290 $ 848,750 $ 671,290 Investment Management Net Revenues (1) $ 23,719 $ 26,373 $ 45,122 $ 47,635 Operating Expenses 19,819 21,591 39,775 41,162 Other Expenses (2) 93 82 3,523 164 Operating Income 3,807 4,700 1,824 6,309 Income from Equity Method Investments 1,195 1,225 2,339 1,776 Pre-Tax Income $ 5,002 $ 5,925 $ 4,163 $ 8,085 Identifiable Segment Assets $ 450,797 $ 476,607 $ 450,797 $ 476,607 Total Net Revenues (1) $ 268,096 $ 217,696 $ 506,079 $ 366,809 Operating Expenses 214,090 170,342 405,410 295,445 Other Expenses (2) 22,895 4,319 58,560 7,615 Operating Income 31,111 43,035 42,109 63,749 Income from Equity Method Investments 1,998 2,038 3,105 2,279 Pre-Tax Income $ 33,109 $ 45,073 $ 45,214 $ 66,028 Identifiable Segment Assets $ 1,299,547 $ 1,147,897 $ 1,299,547 $ 1,147,897 (1) Net revenues include Other Revenue, net, allocated to the segments as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Investment Banking (A) $ (2,173 ) $ (928 ) $ (3,231 ) $ (1,581 ) Investment Management (B) (786 ) (428 ) (1,464 ) (1,081 ) Total Other Revenue, net $ (2,959 ) $ (1,356 ) $ (4,695 ) $ (2,662 ) (A) Investment Banking Other Revenue, net, includes interest expense on the Senior Notes, subordinated borrowings and line of credit of $1,793 and $3,437 for the three and six months ended June 30, 2015, respectively , and $1,105 and $2,210 for the three and six months ended June 30, 2014, respectively . (B) Investment Management Other Revenue, net, includes interest expense on the Senior Notes and line of credit of $959 and $1,912 for the three and six months ended June 30, 2015, respectively , and $932 and $1,864 for the three and six months ended June 30, 2014, respectively . (2) Other Expenses are as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Investment Banking Amortization of LP Units / Interests and Certain Other Awards $ 18,193 $ — $ 44,143 $ — Other Acquisition Related Compensation Charges 952 2,565 1,537 5,779 Special Charges (139 ) — 2,151 — Intangible Asset and Other Amortization 2,890 — 5,816 — Professional Fees — 1,672 — 1,672 Acquisition and Transition Costs 906 — 1,390 — Total Investment Banking 22,802 4,237 55,037 7,451 Investment Management Special Charges — — 3,348 — Acquisition and Transition Costs 11 — 11 — Intangible Asset and Other Amortization 82 82 164 164 Total Investment Management 93 82 3,523 164 Total Other Expenses $ 22,895 $ 4,319 $ 58,560 $ 7,615 Geographic Information – The Company manages its business based on the profitability of the enterprise as a whole. The Company’s revenues were derived from clients and private equity funds located and managed in the following geographical areas: For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2014 2015 2014 Net Revenues: (1) United States $ 203,186 $ 142,502 $ 365,008 $ 250,429 Europe and Other 56,927 47,997 128,138 84,785 Latin America 10,942 28,553 17,628 34,257 Total $ 271,055 $ 219,052 $ 510,774 $ 369,471 (1) Excludes Other Revenue and Interest Expense. The Company’s total assets are located in the following geographical areas: June 30, 2015 December 31, 2014 Total Assets: United States $ 970,784 $ 1,099,363 Europe and Other 173,340 160,934 Latin America 155,423 186,259 Total $ 1,299,547 $ 1,446,556 |