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Segment Reporting (Tables)
 9 Months Ended
Sep. 30, 2016
Segment Reporting  
Summary of the segment financial information

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

U.S.

    

Canadian

    

European

    

Asia Pacific

    

 

 

    

 

 

 

 

    

Operations

    

Operations

    

Operations

    

Operations

    

Corporate

    

Consolidated

 

Three Months Ended September 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$
48,774

 

$
13,719

 

$
28,894

 

$
12,502

 

$
296

 

$
104,185

 

Income (loss) before income tax expense (1) (2) (3) (4)

 

 
(8,528)

 

 
1,496

 

 
4,709

 

 
901

 

 
(26,376)

 

 
(27,798)

 

Identifiable assets

 

 
418,357

 

 
108,647

 

 
328,731

 

 
61,367

 

 

 —

 

 
917,102

 

Three Months Ended September 30, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$
66,039

 

$
14,899

 

$
28,899

 

$
10,351

 

$
221

 

$
120,409

 

Income (loss) before income tax expense (5)

 

 
752

 

 
3,595

 

 
4,830

 

 
(411)

 

 
(5,576)

 

 
3,190

 

Identifiable assets

 

 
1,263,395

 

 
99,413

 

 
267,863

 

 
63,146

 

 

 —

 

 
1,693,817

 

Nine Months Ended September 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$
173,677

 

$
45,605

 

$
92,236

 

$
34,539

 

$
3,406

 

$
349,463

 

(Loss) income before income tax expense (1) (2) (3) (4) (6) (7)

 

 
(9,297)

 

 
7,616

 

 
16,672

 

 
208

 

 
(56,293)

 

 
(41,094)

 

Nine Months Ended September 30, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$
221,967

 

$
50,516

 

$
99,079

 

$
38,385

 

$
683

 

$
410,630

 

(Loss) income before income tax expense (5)

 

 
17,543

 

 
10,964

 

 
23,723

 

 
2,298

 

 
(37,947)

 

 
16,581

 

The following notes relate to Corporate activity:

 

(1)

In the third quarter of 2016, the Company accrued $22.1 million for a potential settlement with the SEC with respect to an inquiry involving pre-released American Depositary Receipts and incurred legal fees related to this matter of $1.6 million. For more information, see Note 18, Contingencies – Legal Matters.

 

(2)

The Company’s new Chief Executive Officer was granted cash and stock awards upon the commencement of his employment in January 2016, a significant portion of which replaced awards he forfeited at his former employer. The amount expensed for these awards during the three and nine month periods ended September 30, 2016 was $0.5 million and $3.8 million, respectively. Due to U.S. tax regulations, only a small portion of the amount expensed for these awards was eligible for a tax deduction.

 

(3)

In the third quarter of 2016, the Company substantially completed the liquidation of its investment in its Israel entity that ceased operations in December 2013. During the Company’s period of ownership and through December 2013, the Company had $1.1 million in accumulated foreign exchange translation gains as a component of equity, which have been reclassified as a gain that reduced other general and administrative expenses in the Condensed Consolidated Statement of Operations.

 

(4)

In the first half of 2016, the Company incurred a charge of $4.8 million, net of an insurance recovery of $0.5 million, to settle an arbitration case with its former CEO and incurred legal fees of $2.7 million. During the three months ended September 30, 2016, the Company recorded a reimbursement of $0.9 million of these legal fees from its insurance carrier. For more information, see Note 18, Contingencies – Legal Matters.

 

(5)

In the third quarter of 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. The Company fully reserved for this matter and incurred associated legal and related costs of $2.3 million in the second quarter of 2015. In the third quarter of 2015, the Company incurred $2.6 million in legal and related costs to finalize the settlement order. For more information, see Note 18, Contingencies – Legal Matters.

 

(6)

In the second quarter of 2016, the Company received insurance proceeds of $2.4 million from its corporate insurance carrier to settle a claim for lost profits arising from an August 2015 outage in its outsourced primary data center in the U.S. Additionally, the Company generated a nominal gain on the completion of the sale of Investment Research in May 2016.

 

(7)

During the second quarter of 2016, the Company incurred $4.4 million in restructuring charges related to (a) the reduction in its high-touch trading and sales organizations and (b) the closing of its U.S. matched-book securities lending operations and its Canadian arbitrage trading desk.
Schedule of total revenues for the products and services provided by our geographic segments

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2016

    

2015

    

2016

    

2015

 

Revenues:

    

 

    

    

 

    

 

 

    

    

 

    

 

Execution Services

 

$
70,240

 

$
85,734

 

$
243,441

 

$
304,128

 

Workflow Technology

 

 
22,723

 

 
22,837

 

 
69,410

 

 
71,460

 

Analytics

 

 
10,926

 

 
11,617

 

 
33,206

 

 
34,359

 

Corporate (non-product)

 

 
296

 

 
221

 

 
3,406

 

 
683

 

Total Revenues

 

$
104,185

 

$
120,409

 

$
349,463

 

$
410,630