Segment Reporting

12 Months Ended

Dec. 31, 2015

Segment Reporting

Segment Reporting

(22) Segment Reporting

        The Company is organized into four geographic operating segments through which the Company's chief operating decision maker manages the Company's business. The U.S., Canadian, European and Asia Pacific Operations segments provide the following categories of products and services:

•           Electronic Brokerage—includes self-directed trading by clients using algorithms, smart routing and matching through POSIT in cash equities (including single stocks and portfolio lists), futures and options;

•           Research, Sales and Trading—includes (a) differentiated, unbiased, data-driven equity research through the use of innovative data harvesting and analysis and (b) portfolio trading and high-touch trading desks providing execution expertise and trading ideas based on investment research;

•           Platforms—includes trade order and execution management software applications in addition to network connectivity; and

•           Analytics—includes tools enabling portfolio managers and traders to improve pre-trade and real-time execution performance, portfolio construction and optimization decisions and securities valuation.

        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 except that commissions and fees for trade executions by Canadian clients in the U.S. market are attributed to the Canadian Operations instead of the U.S. Operations. 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			Corporate			Consolidated
2015
Total revenues	$	285,230	$	63,028	$	129,729	$	48,179		$	108,637		$	634,803
Income (loss) before income tax expense(1)(2)		16,000		10,643		28,244		1,620			64,719			121,226
Identifiable assets		1,304,995		76,561		262,095		65,371			—			1,709,022
Capital purchases		7,748		2,175		1,334		648			—			11,905
Depreciation and amortization		33,971		2,247		6,560		1,373			—			44,151
Non-cash share-based compensation		10,725		1,466		4,505		866			(895	)		16,667
2014
Total revenues	$	306,540	$	77,633	$	127,410	$	46,926			1,305		$	559,814
Income (loss) before income tax expense		35,803		17,259		34,081		(1,690	)		(20,466	)		64,987
Identifiable assets		929,062		105,898		249,702		66,187			—			1,350,849
Capital purchases		10,645		1,656		1,114		383			—			13,798
Depreciation and amortization		38,659		3,153		6,422		1,150			—			49,384
Non-cash share-based compensation		10,107		695		2,891		979			687			15,359
2013
Total revenues	$	317,876	$	74,156	$	91,600	$	45,711			1,458		$	530,801
(Loss) income before income tax expense(3)(4)(5)		40,433		10,653		20,000		(2,126	)		(25,905	)		43,055
Identifiable assets		1,183,986		88,503		202,015		64,968			—			1,539,472
Capital purchases		28,367		1,188		3,323		671			—			33,549
Depreciation and amortization		43,017		3,437		6,012		1,140			—			53,606
Non-cash share-based compensation		9,463		—		2,074		854			1,148			13,539

(1)	In December 2015, the Company completed the sale of the subsidiaries conducting its energy research business to an affiliate of Warburg Pincus, a global private equity firm, for $120.5 million. The pre-tax gain of $107.7 million is net of a working capital adjustment on the closing balance sheet, direct costs related to the sale including share-based compensation costs, and the carrying value of the net assets disposed.
(2)	In August 2015, the Company reached a final settlement with the SEC to pay an aggregate amount of $20.3 million in connection with the SEC's investigation into a proprietary trading pilot operated during 2010 and 2011. During 2015, the Company incurred $4.9 million in legal and other related costs associated with this matter.
(3)	In the second quarter of 2013, the Company incurred $1.6 million to implement a restructuring plan to close its technology research and development facility in Israel and migrate that function to an outsourced service provider model effective January 1, 2014. This plan primarily focused on reducing costs by limiting ITG's geographic footprint while maintaining the necessary technological expertise via a consulting arrangement. The Company also reduced previously-recorded 2012 and 2011 restructuring accruals of $1.6 million to reflect the sub-lease of previously-vacated office space and certain legal and other employee-related charges deemed unnecessary.
(4)	During the fourth quarter of 2012, ITG began its build-out of its new lower Manhattan headquarters while continuing to occupy its then-existing headquarters in midtown Manhattan. As a result, ITG incurred duplicate rent charges of $2.6 million during the first half of 2013.
(5)	In the second quarter of 2013, ITG moved into its new headquarters and incurred a one-time charge of $3.9 million, which includes a reserve for the remaining lease obligation at the previous midtown Manhattan headquarters.

        The table below details the total revenues for the categories of products and services provided by the Company (dollars in thousands):

	2015		2014		2013
Revenues:
Electronic Brokerage	$	268,818	$	294,529	$	279,829
Research, Sales and Trading		117,340		122,042		107,383
Platforms		94,117		95,926		96,127
Analytics		45,891		46,012		46,004
Corporate (non-product)		108,637		1,305		1,458
Total Revenues	$	634,803	$	559,814	$	530,801

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

	2015		2014		2013
Long-lived Assets at December 31,
United States	$	97,226	$	107,746	$	116,812
Canada		6,357		7,070		5,676
Europe		27,226		29,531		11,413
Asia Pacific		3,162		2,377		2,046
Total	$	133,971	$	146,724	$	135,947

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