
	(Unaudited) December 31, 2017								(Unaudited) December 31, 2016
$ in thousands, expect per share	Fourth		Third		Second		First		Fourth		Third		Second		First
amounts	Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter
Total revenues	$	126,747	$	114,531	$	121,581	$	120,835	$	119,589	$	104,185	$	120,610	$	124,668
Expenses:
Compensation and employee benefits		45,283		46,755		45,994		46,684		42,980		45,127		48,315		52,464
Transaction processing		26,981		23,428		25,482		24,856		24,540		20,799		22,098		22,834
Occupancy and equipment		23,316		14,945		14,680		15,622		14,296		13,849		14,066		13,978
Telecommunications and data processing services		12,132		12,189		12,129		12,027		13,302		13,720		14,848		14,773
Restructuring charges		—		—		—		—		5,265		—		4,355		—
Other general and administrative		18,957		18,670		17,699		17,315		20,803		37,927		26,014		23,722
Interest expense		496		499		510		520		549		561		572		535
Total expenses		127,165		116,486		116,494		117,024		121,735		131,983		130,268		128,306
(Loss) income before income tax expense (benefit)		(418)		(1,955)		5,087		3,811		(2,146)		(27,798)		(9,658)		(3,638)
Income tax (benefit) expense		2,000		45,012		444		(1,491)		(7,862)		(3,887)		(4,441)		(1,132)
Net (loss) income	$	(2,418)	$	(46,967)	$	4,643	$	5,302	$	5,716	$	(23,911)	$	(5,217)	$	(2,506)
Basic (loss) income per share	$	(0.07)	$	(1.42)	$	0.14	$	0.16	$	0.18	$	(0.73)	$	(0.16)	$	(0.08)
Diluted (loss) income per share	$	(0.07)	$	(1.42)	$	0.14	$	0.16	$	0.17	$	(0.73)	$	(0.16)	$	(0.08)
Basic weighted average number of common shares outstanding		32,855		33,105		33,125		32,949		32,607		32,725		33,189		33,106
Diluted weighted average number of common shares outstanding		32,855		33,105		34,222		34,130		33,988		32,725		33,189		33,106

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, 2017								(Unaudited) December 31, 2016
	Fourth		Third		Second		First		Fourth		Third		Second		First
As a percentage of Total Revenues	Quarter (a)(b)(c)		Quarter (c)(d)		Quarter		Quarter		Quarter (e)(f)(g)		Quarter (e)		Quarter (h)		Quarter (h)
Total revenues	100	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Expenses:
Compensation and employee benefits	35.7		40.8		37.8		38.6		35.9		43.3		40.1		42.1
Transaction processing	21.3		20.5		21.0		20.6		20.5		20.0		18.3		18.3
Occupancy and equipment	18.4		13.0		12.1		12.9		12.0		13.3		11.7		11.2
Telecommunications and data processing services	9.6		10.6		10.0		10.0		11.1		13.2		12.3		11.8
Restructuring charges	—		—		—		—		4.4		—		3.6		—
Other general and administrative	15.0		16.3		14.6		14.3		17.4		36.4		21.6		19.0
Interest expense	0.4		0.4		0.4		0.4		0.5		0.5		0.5		0.4
Total expenses	100.4		101.6		95.9		96.8		101.8		126.7		108.1		102.8
(Loss) income before income tax expense (benefit)	(0.4)		(1.6)		4.1		3.2		(1.8)		(26.7)		(8.1)		(2.8)
Income tax (benefit) expense	1.6		39.3		0.4		(1.2)		(6.6)		(3.7)		(3.7)		(0.9)
Net (loss) income	(2.0)	%	(40.9)	%	3.7	%	4.4	%	4.8	%	(23.0)	%	(4.4)	%	(1.9)	%

(a)

In the fourth quarter of 2017, the Company incurred an $8.1 million charge for the write-off of fixed assets and other costs associated with the consolidation of ITG’s New York office space.

(b)

In the fourth quarter of 2017, the Company reduced the amount recorded for a deferred tax liability in the U.S. due to the passing of the Tax Cuts and Jobs Act, which lowered the U.S. corporate income tax rate from 35% to 21%.

(c)

In the third quarter of 2017, the Company determined that it was appropriate to establish a full valuation allowance on its U.S. deferred tax assets, of which $42.3 million related to periods prior to the third quarter of 2017. In the fourth quarter of 2017, the Company reduced the valuation allowance by $0.9 million as a portion of these U.S. deferred tax assets were realized following a tax method change.

(d)

In the third quarter of 2017, the Company deemed the remaining value of a customer intangible asset recorded in ITG Derivatives of $0.3 million fully impaired and incurred legal fees related to the planned formation of the Matrix derivatives venture of $0.8 million.

(e)

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.

(f)

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 single stock sales trading and sales organizations and (b) the closing of its U.S. matched-book securities lending operations and its Canadian arbitrage trading desk.

(g)

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.

(h)

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.