(23) Supplementary Financial Information (unaudited)

The following tables set forth certain unaudited financial data for the Company’s quarterly operations in 2016 and 2015. The following information has been prepared on the same basis as the annual information presented elsewhere in this report and, in the opinion of management, includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the information for the quarterly periods presented. The operating results for any quarter are not necessarily indicative of results for any future period.


	(Unaudited) December 31, 2016								(Unaudited) December 31, 2015
$ in thousands, expect per share	Fourth		Third		Second		First		Fourth		Third		Second		First
amounts	Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter
Total revenues	$	119,589		104,185		120,610		124,668	$	224,173	$	120,409	$	140,494	$	149,727
Expenses:
Compensation and employee benefits		42,980		45,127		48,315		52,464		51,711		46,305		53,899		57,408
Transaction processing		24,540		20,799		22,098		22,834		20,111		21,621		25,187		24,573
Occupancy and equipment		14,296		13,849		14,066		13,978		14,424		14,229		14,470		14,372
Telecommunications and data processing services		13,302		13,720		14,848		14,773		12,961		12,779		13,011		12,772
Restructuring charges		5,265		—		4,355		—		—		—		—		—
Other general and administrative		20,803		37,927		26,014		23,722		19,894		21,856		42,408		17,757
Interest expense		549		561		572		535		427		429		468		505
Total expenses		121,735		131,983		130,268		128,306		119,528		117,219		149,443		127,387
(Loss) income before income tax (benefit) expense		(2,146)		(27,798)		(9,658)		(3,638)		104,645		3,190		(8,949)		22,340
Income tax (benefit) expense		(7,862)		(3,887)		(4,441)		(1,132)		22,308		480		1,261		5,607
Net income (loss)	$	5,716	$	(23,911)	$	(5,217)	$	(2,506)	$	82,337	$	2,710	$	(10,210)	$	16,733
Basic income (loss) per share	$	0.18	$	(0.73)	$	(0.16)	$	(0.08)	$	2.46	$	0.08	$	(0.30)	$	0.49
Diluted income (loss) per share	$	0.17	$	(0.73)	$	(0.16)	$	(0.08)	$	2.40	$	0.08	$	(0.30)	$	0.47
Basic weighted average number of common shares outstanding		32,607		32,725		33,189		33,106		33,433		33,859		34,076		34,268
Diluted weighted average number of common shares outstanding		33,988		32,725		33,189		33,106		34,359		34,547		34,076		34,451

Earnings per share for quarterly periods are based on the weighted average common shares outstanding in individual quarters; thus, the sum of earnings per share of the quarters may not equal the amounts reported for the full year.


	(Unaudited) December 31, 2016								(Unaudited) December 31, 2015
	Fourth		Third		Second		First		Fourth		Third		Second		First
As a percentage of Total Revenues	Quarter (a)(b)(c)		Quarter (a)		Quarter (b)(d)		Quarter (d)		Quarter (e)		Quarter (f)		Quarter (f)		Quarter
Total revenues	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Expenses:
Compensation and employee benefits	35.9		43.3		40.1		42.1		23.1		38.4		38.4		38.3
Transaction processing	20.5		20.0		18.3		18.3		9.0		18.0		17.9		16.4
Occupancy and equipment	12.0		13.3		11.7		11.2		6.4		11.8		10.3		9.6
Telecommunications and data processing services	11.1		13.2		12.3		11.8		5.8		10.6		9.3		8.5
Restructuring charges	4.4		—		3.6		—		—		—		—		—
Other general and administrative	17.4		36.4		21.6		19.0		8.9		18.2		30.2		11.9
Interest expense	0.5		0.5		0.5		0.4		0.2		0.4		0.3		0.3
Total expenses	101.8		126.7		108.1		102.8		53.4		97.4		106.4		85.0
(Loss) income before income tax (benefit) expense	(1.8)		(26.7)		(8.1)		(2.8)		46.6		2.6		(6.4)		15.0
Income tax (benefit) expense	(6.6)		(3.7)		(3.7)		(0.9)		10		0.4		0.9		3.7
Net income (loss)	4.8	%	(23.0)	%	(4.4)	%	(1.9)	%	36.6	%	2.2	%	(7.3)	%	11.3	%

(a)

During the third and fourth quarters of 2016, the Company accrued $22.1 million and $2.4 million, respectively, for a settlement with the SEC with respect to an inquiry involving pre-released ADRs and incurred legal and other related costs associated with this matter of $1.6 million and $1.3 million, respectively.

(b)

During the fourth quarter of 2016, the Company incurred restructuring charges of $5.3 million related to management delayering and the elimination of certain positions. During the second quarter of 2016, the Company incurred restructuring charges of $4.3 million 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.

(c)

During the fourth quarter of 2016, the Company resolved a multi-year tax contingency in the U.S. and reduced tax reserves by $7.3 million.

(d)

During the first and second quarters 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. In the third quarter of 2016, the Company recorded a reimbursement of $0.9 million of these legal fees from its insurance carrier.

(e)

Fourth quarter of 2015 results include the gain on the sale of the subsidiaries conducting the Company’s energy research operations to an affiliate of Warburg Pincus (see Note 4, Divestitures and Acquisitions) as well as a tax charge resulting from the amendment of the capital structure of the Company’s principal holding company outside North America (see Note 9, Income Taxes).

(f)

Second quarter of 2015 results include the 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. The Company incurred legal and other related fees for this matter of $2.3 million and $2.6 million during the second quarter of 2015 and the third quarter of 2015, respectively.