(3) Restructuring Charges

2013 Restructuring

In the second quarter of 2013, the Company implemented a strategic plan to close its technology research and development facility in Israel and outsource that function to a third party service provider effective January 1, 2014. This plan is primarily focused on reducing costs through limiting the Company’s geographic footprint while maintaining the necessary technological expertise via a consulting arrangement.

The following table summarizes the pre-tax charges incurred in the European Operating segment (dollars in thousands). Employee severance costs relate to the termination of approximately 40 employees. These charges are classified as restructuring charges in the Condensed Consolidated Statements of Operations.

	Total
Employee separation and related	$	1,452
Consolidation of leased facilities	100
Balance at June 30, 2013	$	1,552

Activity and liability balances recorded as part of the 2013 restructuring plan through June 30, 2013 are as follows (dollars in thousands):

	Employee separation costs			Consolidation of leased facilities		Total
Restructuring charges recognized in 2013	$	1,452		$	100	$	1,552
Cash payments	—			—		—
Acceleration of share-based compensation in additional paid-in capital	(357		)	—		(357		)
Other	(4		)	—		(4		)
Balance at June 30, 2013	$	1,091		$	100	$	1,191

The remaining accrued costs are expected to be paid by the first quarter of 2014.

2012 Restructuring

In the fourth quarter of 2012, the Company implemented a restructuring plan to reduce annual operating costs by approximately $20 million. The initiative was designed to improve financial performance and enhance stockholder returns while maintaining ITG’s competitiveness and high standard of client service. This plan primarily focused on reducing workforce, market data and other general and administrative costs across ITG’s businesses. During the second quarter of 2013, the Company reversed $0.8 million of expense as actual payments made were less than originally estimated.

The following table summarizes the changes in the Company’s liability balance related to the 2012 restructuring plan, which is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition (dollars in thousands):

	Employee separation costs
Balance at December 31, 2012	$	6,908
Utilized—cash	(4,472		)
Other	(1,532		)
Balance at June 30, 2013	$	904

The remaining accrued employee separation costs reflect payments for severance and health benefits as well as the settlement of restricted share awards, which will continue through May 2014 and February 2015, respectively.

2011 Restructuring

In the second and fourth quarters of 2011, the Company implemented restructuring plans to improve margins and enhance stockholder returns. The restructuring charges consisted of employee separation costs ($19.2 million) and lease abandonment costs ($4.3 million). During the second quarter of 2013, the Company reversed $0.8 million of expense as the Company sub-let vacated office space and actual payments made were less than originally estimated.

The following table summarizes the changes in the Company’s liability balance related to the 2011 restructuring plans, which is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition (dollars in thousands):

	Employee separation costs			Consolidation of leased facilities			Total
Balance at December 31, 2012	$	117		$	3,098		$	3,215
Adjustment for sub-lease	—			(700		)	(700		)
Utilized - cash	(12		)	(365		)	(377		)
Other	(98		)	—			(98		)
Balance at June 30, 2013	$	7		$	2,033		$	2,040

The remaining accrued employee separation costs reflect the settlement of restricted share awards, which will continue through February 2014. The payment of the remaining accrued costs related to the vacated leased facilities will continue through December 2016.

2010 Restructuring

In the fourth quarter of 2010, the Company closed its Westchester, NY office, relocated the staff, primarily sales traders and support, to its New York City office, and incurred a restructuring charge of $2.3 million. The restructuring charge consisted of lease abandonment costs ($2.2 million) and employee separation costs ($0.1 million). During 2011, an additional charge of $0.8 million was recorded after the Company reevaluated the potential of sub-leasing the vacated office space.

The following table summarizes the changes in the Company’s liability balance related to the 2010 restructuring plan, which is included in accounts payable and accrued expenses in the Condensed Consolidated Statements of Financial Condition (dollars in thousands):

	Consolidation of leased facilities
Balance at December 31, 2011	$	2,172
Utilized—cash	(195		)
Balance at June 30, 2013	$	1,977

The payment of the remaining accrued costs related to the vacated leased facilities will continue through December 2016.