(16) 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:

Execution Services — includes (a) liquidity matching through POSIT, (b) self-directed trading using algorithms (including single stocks and portfolio lists) and smart routing, (c) portfolio trading and single stock sales trading desks providing execution expertise and (d) futures and options trading

Workflow Technology — includes trade order and execution management software applications in addition to network connectivity

Analytics — includes (a) tools enabling portfolio managers and traders to improve pre-trade, real-time and post-trade execution performance, (b) portfolio construction and optimization decisions and (c) securities valuation

The accounting policies of the reportable segments are the same as those described in Note 2, Summary of Significant Accounting Policies, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The Company allocates resources to, and evaluates the performance of, its reportable segments based on income or loss before income tax expense (benefit). 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 costs are allocated to a segment to support that segment’s 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.

Regional segment results exclude the impact of Corporate activity, which is presented separately and includes investment income from treasury activity, certain non-operating revenues and other gains as well as costs not associated with operating the businesses within the Company’s regional segments. These costs include, among others, (a) the costs of being a public company, such as certain staff costs, a portion of external audit fees, and reporting, filing and listing costs, (b) intangible asset amortization, (c) interest expense, (d) professional fees associated with the Company's global transfer pricing structure, (e) foreign exchange gains or losses and (f) certain non-operating expenses.

In 2018, the Company changed the way it measures the profitability of its regional segments to reflect the global nature of its business operations. Certain costs for senior management, product management, marketing, management information systems and infrastructure that are incurred in the U.S. on behalf of the entire Company are now being allocated to the international segments. For comparability purposes, the Company has restated previously reported segment results for the three and six months ended June 30, 2017 to reflect these changes.

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 June 30, 2018
Total revenues	$	48,026	$	17,730	$	42,911	$	19,430	$	380	$	128,477
(Loss) income before income tax (benefit) expense (1)		(988)		3,050		10,440		4,000		(16,756)		(254)
Identifiable assets		400,709		110,536		341,736		73,953		—		926,934
Three Months Ended June 30, 2017
Total revenues	$	52,763	$	15,984	$	38,739	$	13,720	$	375	$	121,581
(Loss) income before income tax (benefit) expense (2)		(2,370)		2,465		9,570		799		(5,377)		5,087
Identifiable assets		456,071		108,698		339,337		52,570		—		956,676
Six Months Ended June 30, 2018
Total revenues	$	96,512	$	35,777	$	87,741	$	39,037	$	894	$	259,961
(Loss) income before income tax (benefit) expense (1)(3)		(2,354)		6,879		22,349		8,680		(29,911)		5,643
Six Months Ended June 30, 2017
Total revenues	$	106,156	$	32,466	$	75,451	$	27,663	$	680	$	242,416
(Loss) income before income tax (benefit) expense (4)		(6,313)		5,296		19,508		1,913		(11,506)		8,898

Notes:

(1)

During the three and six months ended June 30, 2018, the Company incurred a charge to establish an accrual of $12.0 million for a potential settlement with the SEC of an investigation into the operational features of U.S. POSIT and access to U.S. POSIT data, together with certain related disclosures, and incurred related legal fees of $0.2 million. For more information, see Note 19, Contingencies – Legal Matters.

(2)

The Company has restated segment results for the three months ended June 30, 2017, resulting in a decrease in U.S. expenses of $2.7 million and increases in expenses in Canada, Europe and Asia Pacific of $0.7 million, $1.3 million and $0.7 million, respectively.

(3)

During the six months ended June 30, 2018, the Company incurred restructuring charges of $7.2 million related to the elimination of certain positions in the U.S.

(4)

The Company has restated segment results for the six months ended June 30, 2017, resulting in a decrease in U.S. expenses of $5.3 million and increases in expenses in Canada, Europe and Asia Pacific of $1.3 million, $2.5 million and $1.5 million, respectively.

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Revenues:
Execution Services	$	89,959	$	86,797	$	184,315		173,084
Workflow Technology		27,112		23,352		53,687		46,452
Analytics		11,026		11,057		21,065		22,200
Corporate (non-product)		380		375		894		680
Total Revenues	$	128,477	$	121,581	$	259,961	$	242,416

The product group revenues noted above are consistent with the revenues recognized under ASC 606, except that the table includes revenue of $0.6 million and $1.1 million, respectively, for the three and six months ended June 30, 2018 in Analytics for functionality that is not a separate performance obligation from products and services provided by Workflow Technology and Execution Services.