(24) 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, our Alternative Trading System (“ATS”), (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. 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 technology related costs are allocated to a segment to support that segment’s revenue producing 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.

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
2018
Total revenues	$	191,391	$	71,973	$	168,643	$	74,465	$	3,004	$	509,476
(Loss) income before income tax expense (benefit) (1) (2) (3) (4)		(7,885)		13,224		40,251		14,181		(49,672)		10,099
Identifiable assets		478,254		132,815		325,660		84,346		—		1,021,075
Capital purchases		6,701		1,413		3,332		2,355		—		13,801
Depreciation and amortization		31,818		2,187		6,416		2,357		1,082		43,860
Non-cash share-based compensation		11,446		3,108		6,468		1,508		7,232		29,762
2017
Total revenues	$	204,990	$	63,294	$	151,472	$	62,218	$	1,720	$	483,694
(Loss) income before income tax expense (benefit) (4) (5) (6)		(13,830)		7,942		36,061		8,745		(32,393)		6,525
Identifiable assets		342,487		108,457		274,836		59,076		—		784,856
Capital purchases		13,278		1,183		3,289		1,652		—		19,402
Depreciation and amortization		33,307		2,420		6,094		1,994		1,338		45,153
Non-cash share-based compensation		9,543		2,390		5,267		959		2,079		20,238
2016
Total revenues	$	229,655	$	61,822	$	125,945	$	47,919	$	3,711	$	469,052
(Loss) income before income tax expense (7) (8) (9) (10) (11) (12) (13)		1,319		8,474		19,198		(1,537)		(70,694)		(43,240)
Identifiable assets		396,419		80,943		236,071		61,852		—		775,285
Capital purchases		15,547		2,549		1,886		1,333		—		21,315
Depreciation and amortization		32,896		2,402		6,741		1,484		—		43,523
Non-cash share-based compensation		10,642		2,383		5,948		925		5,722		25,620

(1)

In the second quarter of 2018, the Company incurred a charge to establish an accrual of $12.0 million for a potential settlement with the SEC, which was finalized in the fourth quarter of 2018, related to 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 $1.2 million. Due to the non-deductibility of the settlement charge and the full valuation allowance on U.S. deferred tax assets, there is no tax effect on this adjustment.

(2)

In the fourth quarter of 2018, the Company incurred costs of $8.0 million related to the acquisition of the Company by Virtu.

(3)

In 2018, the Company incurred restructuring charges of $10.6 million related to the elimination of certain positions in the U.S. and the reduction of office space in Los Angeles.

(4)

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. In 2018, we incurred an additional charge for the New York office space consolidation of $0.4 million.

(5)

The Company has restated segment results for the year ended December 31, 2017, resulting in a decrease in U.S. expenses of $10.7 million and increases in expenses in Canada, Europe and Asia Pacific of $2.7 million, $5.1 million and $2.9 million, respectively.

(6)

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.

(7)

The Company has restated segment results for the year ended December 31, 2016, resulting in a decrease in U.S. expenses of $12.5 million and increases in expenses in Canada, Europe and Asia Pacific of $3.1 million, $6.3 million and $3.1 million, respectively.

(8)

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 its investment research operations in May 2016.

(9)

In the second half of 2016, the Company incurred $24.5 million 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 $2.9 million.

(10)

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

(11)

The Company’s Chief Executive Officer, who departed the Company in connection with the Merger, 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. Due to U.S. tax regulations, only a small portion of the amount expensed for these awards was eligible for a tax deduction.

(12)

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 whose employment with the Company was terminated in August 2015 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.

(13)

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 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 Consolidated Statements of Operations.

The table below details the total revenues for the categories of products and services provided by the Company for the years ended December 31, 2018, 2017 and 2016 (dollars in thousands):


	December 31,
	2018		2017		2016
Revenues:
Execution Services	$	359,300	$	344,192	$	328,252
Workflow Technology		104,064		92,533		92,891
Analytics		43,108		45,249		44,198
Corporate (non-product)		3,004		1,720		3,711
Total Revenues	$	509,476	$	483,694	$	469,052

The product group revenues noted above are consistent with the revenues recognized under ASC 606, except that the table includes revenue of $2.1 million for the year ended December 31, 2018 in Analytics for functionality that is not a separate performance obligation from products and services provided by Workflow Technology and Execution Services.

Long‑lived assets, classified by the geographic region in which the Company operates, are as follows (dollars in thousands):


	2018		2017		2016
Long-lived Assets at December 31,
United States	$	80,081	$	86,345	$	92,509
Canada		3,235		3,841		6,972
Europe		25,907		26,130		22,883
Asia Pacific		5,081		4,060		3,726
Total	$	114,304	$	120,376	$	126,090

The Company’s long‑lived assets primarily consist of premises and equipment, capitalized software, goodwill, other intangibles and debt issuance costs.