Investment Technology Group Reports Second Quarter 2008 Results

NEW YORK--(Business Wire)--
Investment Technology Group, Inc. (NYSE: ITG), a leading provider
of technology-based trading services and transaction research, today
announced that for the second quarter ended June 30, 2008, net income
was $25.7 million, down five percent from net income of $27.2 million
in the second quarter of 2007. Earnings were $0.58 per diluted share,
down three percent versus earnings of $0.60 per diluted share in the
second quarter of last year. ITG's total revenue for the second
quarter of 2008 was $180.4 million, three percent greater than total
revenue of $175.7 million for the second quarter of 2007. Pre-tax
margins in the second quarter were 24.4 percent in 2008, down from
26.5 percent realized in 2007.

"ITG's second quarter revenues showed continued strength despite
the softening of the US equities market in April and May," said Bob
Gasser, ITG's Chief Executive Officer and President. "We have been
successful in our efforts to drive more volume through our systems and
increase the penetration of our product lines. By design, the trading
continuum approach to our product suite has allowed us to diversify
our revenue streams over time to include recurring revenues and
additional asset classes. This portfolio approach provides us with
opportunities for ongoing US growth."

ITG's non-US revenues were $48.7 million in the second quarter of
2008, a 15 percent increase over revenues of $42.1 million in the
second quarter of 2007. Non-US pre-tax income decreased to $4.0
million in the second quarter of 2008 from $5.8 million in the second
quarter of 2007.

"Although major international market indices were down double
digits, our non-US business delivered solid revenues in the second
quarter and we remain confident about our future growth in Asia,
Canada and Europe," said Mr. Gasser. "We are encouraged by the secular
trends in these regions, particularly the further fragmentation of
European market structure, and believe that our global product
offering is particularly well positioned in an increasingly electronic
marketplace."

Year to Date Results

For the six months ended June 30, 2008, revenues increased 12
percent from the prior year period to $384.6 million, net income
increased 13 percent to $58.7 million and diluted earnings per share
increased 15 percent to $1.33.

Conference Call

ITG has scheduled a conference call today at 11:00 a.m. ET to
discuss second quarter results. Those wishing to listen to the call
should dial 1-866-770-7120 and enter the pass code 92490563 at least
10 minutes prior to the start of the call to ensure connection. The
conference call and webcast will also be accessible through ITG's web
site at www.itg.com. For those unable to listen to the live broadcast
of the call, a replay will be available for one week by dialing
1-888-286-8010 and entering the pass code 57236827. The replay will be
available starting approximately two hours after the completion of the
conference call.

About ITG

Investment Technology Group, Inc. (ITG), is a specialized
brokerage firm that partners with clients globally to provide
innovative solutions spanning the entire trading process. A pioneer in
electronic trading, ITG has a unique approach that combines pre-trade,
order management, trade execution, and post-trade tools to provide
continuous improvements in trading and cost efficiency. The firm is
headquartered in New York and maintains offices in North America,
Europe and the Asia Pacific regions. For additional information, visit
www.itg.com.

In addition to historical information, this press release may
contain "forward-looking" statements, as defined in the Private
Securities Litigation Reform Act of 1995, that reflect management's
expectations for the future. A variety of important factors could
cause results to differ materially from such statements. These factors
include the company's ability to achieve expected future levels of
sales; the actions of both current and potential new competitors;
rapid changes in technology; financial market volatility; general
economic conditions in the United States and elsewhere; evolving
industry regulation; cash flows into or redemption from equity funds;
effects of inflation; customer trading patterns; and new products and
services. These and other risks are described in greater detail in the
company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2007, and other documents filed with the Securities and
Exchange Commission and available on the company's web site.

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INVESTMENT TECHNOLOGY GROUP, INC.
Consolidated Statements of Income (unaudited)
(In thousands, except per share amounts)

Three Months Six Months Ended
Ended June 30, June 30,
----------------- -----------------
2008 2007 2008 2007
-------- -------- -------- --------
Revenues:
Commissions $153,217 $148,838 $329,444 $292,751
Recurring 22,285 20,951 43,930 40,133
Other 4,855 5,862 11,261 11,695
-------- -------- -------- --------
Total revenues 180,357 175,651 384,635 344,579
-------- -------- -------- --------

Expenses:
Compensation and employee
benefits 58,482 59,630 126,110 118,145
Transaction processing 24,333 24,330 48,682 49,656
Occupancy and equipment 14,655 11,220 27,755 22,440
Telecommunications and data
processing services 12,438 9,900 25,188 19,034
Other general and administrative 24,636 21,353 49,821 40,959
Interest expense 1,743 2,664 3,956 5,449
-------- -------- -------- --------
Total expenses 136,287 129,097 281,512 255,683
-------- -------- -------- --------
Income before income tax expense 44,070 46,554 103,123 88,896
Income tax expense 18,330 19,343 44,395 36,975
-------- -------- -------- --------
Net income $ 25,740 $ 27,211 $ 58,728 $ 51,921
======== ======== ======== ========

Earnings per share:
Basic $ 0.59 $ 0.61 $ 1.34 $ 1.17
======== ======== ======== ========
Diluted $ 0.58 $ 0.60 $ 1.33 $ 1.16
======== ======== ======== ========

Basic weighted average number of
common shares outstanding 43,705 44,338 43,667 44,207
Diluted weighted average number of
common shares outstanding 44,256 45,047 44,252 44,940
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INVESTMENT TECHNOLOGY GROUP, INC.
Consolidated Statements of Financial Condition
(In thousands, except share amounts)

June 30, December 31,
2008 2007
------------- -----------------
(unaudited)
Assets
Cash and cash equivalents $ 290,888 $ 183,757
Cash restricted or segregated under
regulations and other 60,630 71,300
Deposits with clearing organizations 29,852 43,284
Securities owned, at fair value 9,345 8,022
Receivables from brokers, dealers and
clearing organizations 1,182,081 551,059
Receivables from customers 1,136,728 676,522
Premises and equipment, net 48,205 45,886
Capitalized software, net 60,716 50,892
Goodwill 422,597 422,774
Other intangibles, net 29,946 31,318
Deferred taxes 3,281 2,282
Other assets 11,071 13,791
------------- -----------------
Total assets $3,285,340 $2,100,887
============= =================

Liabilities and Stockholders' Equity
Liabilities:
Accounts payable and accrued expenses $ 199,366 $ 186,463
Short-term bank loans 45,000 101,400
Payables to brokers, dealers and
clearing organizations 732,491 497,124
Payables to customers 1,409,182 457,105
Securities sold, not yet purchased,
at fair value 326 859
Income taxes payable 18,199 18,320
Deferred taxes 2,245 2,821
Long term debt 113,500 132,500
------------- -----------------
Total liabilities 2,520,309 1,396,592
------------- -----------------

Commitments and contingencies

Stockholders' Equity:
Preferred stock, $0.01 par value;
1,000,000 shares authorized; no
shares issued or outstanding -- --
Common stock, $0.01 par value;
100,000,000 shares authorized;
51,540,282 and 51,503,221 shares
issued at June 30, 2008 and December
31, 2007, respectively, and;
43,569,322 and 43,462,885 shares
outstanding at June 30, 2008 and
December 31, 2007, respectively 515 515
Additional paid-in capital 214,769 210,071
Retained earnings 710,405 651,677
Common stock held in treasury, at
cost; 7,970,960 and 8,040,336 shares
at June 30, 2008 and December 31,
2007, respectively (181,292) (177,928)
Accumulated other comprehensive
income (net of tax) 20,634 19,960
------------- -----------------
Total stockholders' equity 765,031 704,295
------------- -----------------
Total liabilities and stockholders'
equity $3,285,340 $2,100,887
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Investor and Media Relations:
For Investment Technology Group, Inc.
Alicia Curran, 212-444-6130

Copyright Business Wire 2008