Segment Reporting

12 Months Ended

Dec. 31, 2012

Segment Reporting

Segment Reporting

(23) Segment Reporting

        The Company is organized into four operating segments through which the Company's chief operating decision makers manage the Company's business. The U.S. Operations segment provides electronic and high-touch trade execution, trade order and execution management, network connectivity, analytical products and investment research services. The Canadian and Asia Pacific Operations segments provides electronic and high-touch trade execution, trade execution management, network connectivity, analytical products and investment research services. The European Operations segment provides electronic and high-touch trade execution, trade order and execution management, network connectivity and analytical products and includes a technology research and development facility in Israel.

        The accounting policies of the reportable segments are the same as those described in Note 2, Summary of Significant Accounting Policies. The Company allocates resources to, and evaluates the performance of, its reportable segments based on income or loss before income tax expense. Consistent with the Company's resource allocation and operating performance evaluation approach, the effects of inter-segment activities are eliminated except in limited circumstances where certain technology related costs are allocated to a segment to support that segment's revenue producing activities. Commissions and fees revenue for trade executions and commission share revenues are principally attributed to each segment based upon the location of execution of the related transaction. Recurring revenues are principally attributed based upon the location of the client using the respective service.

        A summary of the segment financial information is as follows (dollars in thousands):

	U.S. Operations			Canadian Operations		European Operations			Asia Pacific Operations			Consolidated
2012
Total revenues	$	321,379		$	76,913	$	67,266		$	38,878		$	504,436
(Loss) income before income tax expense (1) (2) (3)		(248,101	)		10,397		(24,350	)		(8,401	)		(270,455	)
Identifiable assets		1,238,822			99,625		518,335			339,977			2,196,759
Capital purchases		29,159			2,575		923			767			33,424
Depreciation and amortization		44,585			3,711		6,918			1,279			56,493
Share-based compensation		10,449			2,543		2,091			545			15,628
2011
Total revenues	$	375,521		$	85,550	$	70,670		$	40,296		$	572,037
(Loss) income before income tax expense (4) (5)		(222,337	)		20,035		2,263			(6,589	)		(206,628	)
Identifiable assets		1,351,062			83,453		336,454			407,100			2,178,069
Capital purchases		18,684			1,525		1,448			1,200			22,857
Depreciation and amortization		47,004			2,882		7,636			1,535			59,057
Share-based compensation		16,436			1,076		1,509			1,135			20,156
2010
Total revenues	$	385,690		$	78,479	$	73,277		$	33,308		$	570,754
Income (loss) before income tax expense (6) (7)		45,000			21,119		4,043			(20,829	)		49,333
Identifiable assets		1,486,022			113,356		404,789			526,686			2,530,853
Capital purchases		15,472			1,724		1,660			424			19,280
Depreciation and amortization		50,089			2,425		8,169			1,690			62,373
Share-based compensation		14,336			1,344		1,380			946			18,006

(1)

Loss before tax expense in 2012 includes the impact of a $274.3 million goodwill impairment charge. The segment breakdown of this charge is as follows: U.S. Operations—$245.1 million, European Operations—$28.5 million and Asia Pacific Operations—$0.7 million.

(2)

(Loss) income before income tax expense in 2012 includes the impact of a $9.5 million restructuring charge to reduce costs. The segment breakdown of this charge is as follows: U.S. Operations—$6.8 million, Canadian Operations—$1.1 million, European Operations—$0.6 million and Asia Pacific Operations—$1.0 million.

(3)

Loss before tax expense for the U.S. Operations for 2012 includes the impact of $1.4 million in duplicate rent charges.

(4)

Loss before tax expense for the U.S. Operations for 2011 includes the impact of a $229.3 million goodwill and other asset impairment charge.

(5)

(Loss) income before income tax expense in 2011 includes the impact of a $24.4 million restructuring charge to reduce costs. The segment breakdown of this charge is as follows: U.S. Operations—$22.5 million, Canadian Operations—$0.6 million, European Operations—$1.0 million and Asia Pacific Operations—$0.3 million.

(6)

Income before income tax expense for the U.S. Operations for 2010 includes the impact of a $6.1 million charge to write-off certain capitalized software initiatives, restructuring charges of $2.3 million related to closing the Company's Westchester, NY office, including employee separation costs and $2.4 million of acquisition-related charges associated with the purchases of Majestic.

(7)

Loss before income tax expense for the Asia Pacific Operations for 2010 includes the impact of a $5.4 million impairment charge related to Australian goodwill and a restructuring charge of $2.1 million to close the Company's on-shore Japanese operations.

        Long-lived assets, classified by the geographic region in which the Company operates, are as follows (dollars in thousands):

	2012		2011		2010
Long-lived Assets at December 31,
United States	$	115,726	$	360,309	$	554,879
Canada		7,174		6,873		7,237
Europe		10,260		40,052		42,121
Asia Pacific		2,305		3,162		3,132
Total	$	135,465	$	410,396	$	607,369

        The Company's long-lived assets primarily consist of premises and equipment, capitalized software, goodwill, other intangibles and debt issuance costs.