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EX-99.1 - EX-99.1 - Virtu KCG Holdings LLCd620793dex991.htm

Exhibit 99.2

KCG ANNOUNCES THIRD QUARTER 2013 RESULTS

KCG net income of $98.9 million included a one-time deferred tax benefit

of $103.5 million related to a change in tax status at the merger close

Pre-tax loss from continuing operations of $8.1 million

includes $25.6 million in severance and merger-related expenses

JERSEY CITY, New Jersey – October 30, 2013 – KCG Holdings, Inc. (NYSE: KCG) today reported GAAP net income of $98.9 million, or $0.86 per diluted share, for the third quarter of 2013.

The third quarter 2013 GAAP net income includes net income from continuing operations of $99.6 million, or $0.87 per diluted share. Included in the net income from continuing operations is a deferred income tax benefit of $103.5 million, or $0.90 per diluted share. Also included in the net income from continuing operations are pre-tax expenses related to severance, certain professional fees and lease loss accruals totaling $25.6 million. Excluding these expenses, on a non-GAAP basis, third quarter 2013 income from continuing operations before income taxes was $17.5 million. A reconciliation of GAAP to non-GAAP results is included in Exhibit 5.

KCG was formed July 1, 2013 as a result of the merger between Knight Capital Group, Inc. and GETCO Holding Company, LLC. Financial results for the periods prior to the third quarter of 2013 contained herein solely represent the results of GETCO Holding Company, LLC as the accounting acquirer.

Select Financial Results

 

     3Q 2013  

Revenues ($ thousands)

     339,847   

Trading revenues, net

     230,471   

Commissions and fees

     109,079   

GAAP EPS from continuing operations ($)

   $ 0.87   

GAAP pre-tax loss from continuing operations ($ thousands)

     (8,118

Non-GAAP pre-tax income from continuing operations ($ thousands)

     17,528   

Third Quarter Highlights

 

    KCG’s market making accounted for approximately 14.0% of consolidated U.S. equity share volume*

 

    The Market Making segment reported the highest quarterly revenue capture per U.S. equity dollar value traded in the period dating back to the first quarter of 2012 (see Exhibit 1)

 

* Consolidated U.S. equity share volume based on Tape A, B and C volume published by BATS Global Markets.


Third Quarter Highlights (continued)

 

    In aggregate, KCG EMS, Knight Direct and GETAlpha accounted for approximately 4.7% of consolidated U.S. equity share volume**

 

    KCG Hotspot accounted for approximately 12.8% of institutional spot FX volume among reporting venues

 

    KCG BondPoint accounted for approximately 17.4% of interdealer corporate bond transactions reported to TRACE under 250 bonds

 

    KCG announced the sale of subsidiary Urban Financial Group, Inc., which is expected to close in the fourth quarter of 2013

Daniel Coleman, Chief Executive Officer of KCG, said, “At the start of the third quarter, integration work shifted from planning to execution. KCG’s core capabilities encompass market making and trading through agency execution and venues. A priority of the integration is to share new technologies, intellectual capital and infrastructure costs to create advantages and efficiencies that we believe KCG’s competitors will have difficulty matching. During the quarter, we made significant progress while delivering positive financial results on an operating basis. I’m pleased with the individual and collective initiative across the new firm.”

Market Making

KCG’s Market Making segment covers direct market making to clients as well as providing market making liquidity on public markets. During the third quarter, the Market Making segment generated total revenues of $240.1 million and pre-tax income of $47.9 million. Expenses during the quarter included approximately $2.4 million in severance from reductions in headcount and a lease loss accrual. Excluding the severance expense and lease loss accrual, non-GAAP pre-tax earnings from continuing operations was $50.3 million.

KCG market making is an active participant in all major cash and futures markets in the U.S. and Europe across equities, options, fixed income, foreign exchange and commodities. During the quarter, KCG accounted for approximately 14.0% of consolidated U.S. equity share volume and average revenue capture per U.S. equity dollar value traded of 1.01 basis points withstood the expected seasonality as well as the muted volatility. The financial results are due to operational improvements as well as a market-wide increase in retail U.S. equity volume year over year. Related to the integration, the market making team began work to rationalize infrastructure, optimize order routing and realize better volume-based rates.

Select Trade Statistics: U.S. Equity Market Making

 

     3Q 2013  

Average daily dollar volume traded ($ millions)

     25,365   

Average daily trades (thousands)

     3,809   

Average daily shares traded (millions)

     4,148   

NYSE and NASDAQ shares traded

     805   

OTC Bulletin Board and OTC Market shares traded

     3,343   

Average revenue capture per U.S. equity dollar value traded (bps)

     1.01   

Global Execution Services

The Global Execution Services segment is comprised of agency execution services and trading venues. During the third quarter, the Global Execution Services segment generated total revenues of $91.4 million and a pre-tax loss of $16.4 million. Expenses during the quarter included approximately $15.1 million in severance from reductions in headcount. Excluding the severance expense, the non-GAAP pre-tax loss from continuing operations was $1.2 million.

KCG is a leading execution-only trading firm, primarily in U.S. equities, providing clients with access to sophisticated algorithms and experienced traders. In addition, KCG operates advanced multi-asset class venues that facilitate trading between market participants. During the

 

** Consolidated U.S. equity share volume based on Tape A, B and C volume published by BATS Global Markets. KCG EMS, Knight Direct and GETAlpha average daily equities share volume includes U.S. exchange-listed shares traded by the execution management system and algorithmic trading strategies.


quarter, KCG posted record highs for market share in the categories covering algorithmic and EMS U.S. equity execution, institutional spot foreign exchange and interdealer corporate bond transactions. Financial results for the segment in the third quarter, however, were hampered by the reorganization of the ETF team as well as a seasonal, market-wide decline in institutional U.S. equity volume. Related to the integration, the Global Execution Services team combined all capabilities in algorithmic and EMS execution as well as the sales function of KCG ATS’ Knight Match and GETMatched.

Select Trade Statistics: Agency Execution and Trading Venues

 

     3Q 2013  

Average daily aggregate KCG EMS, Knight Direct and GETAlpha U.S. equity shares traded ($ millions)*

     269.7   

Average daily KCG Hotspot notional foreign exchange dollar value traded ($ billions)

     28.4   

Average daily KCG BondPoint fixed income par value traded ($ millions)

     129.1   

 

* KCG EMS, Knight Direct and GETAlpha average daily equities share volume includes U.S. exchange listed shares traded by the execution management system and algorithmic trading strategies.

Corporate and Other

The Corporate and Other segment includes strategic investments and corporate overhead expenses. During the third quarter, the Corporate and Other segment recorded total revenues of $8.4 million and a pre-tax loss of $39.6 million. Expenses during the quarter included approximately $8.1 million in professional fees related to the merger and Knight’s August 1st technology issue, as well as a lease-loss accrual.

The July 1, 2013 merger whereby Knight Capital Group, Inc. and GETCO Holding Company, LLC were combined as part of KCG resulted in GETCO becoming subject to U.S. corporate income taxes. As a result of this change in tax status, KCG recorded a nonrecurring $103.5 million deferred tax benefit and corresponding deferred tax asset relating to existing GETCO tax attributes.

KCG’s strategic investments include a 15.2 percent stake in BATS Global Markets Inc. and a 19.9 percent stake in Direct Edge Holdings LLC. During the third quarter, BATS and Direct Edge agreed to merge.

Financial Condition

As of September 30, 2013, KCG had approximately $798.7 million in cash and cash equivalents. Aggregate long- and short-term debt was approximately $970 million. The company had $1.5 billion in stockholders’ equity equivalent to a book value of $12.34 per share and tangible book value of $10.63 per share.

KCG’s headcount at September 30, 2013 was 1,304 full-time employees, excluding employees affected by the announced sale of Urban Financial Group.

Subsequent Events

Subsequent to the third quarter of 2013:

 

    On October 16, Knight Capital Americas LLC reached a settlement with the SEC, without admitting or denying the findings, relating to the Market Access Rule, and Rules 200(g) and 203(b) of Regulation SHO

 

    KCG completed a prepayment on October 23 of $200 million on the 5.75% first lien term loan in the amount of $535 million entered into on July 1, 2013

 

    KCG disclosed in an 8-K dated October 28 a charge of approximately $9.4 million in severance from reductions in headcount


In addition, KCG today announced the appointment of Charles Haldeman as non-executive Chairman of the Board effective November 1, 2013.

Conference Call

KCG will hold a conference call to discuss third quarter 2013 financial results starting at 9:00 a.m. Eastern Time today, October 30, 2013. To access the call, dial 888-218-8059 (domestic) or 913-312-0964 (international) and enter passcode 1599997. In addition, the call will be webcast at http://investors.kcg.com/phoenix.zhtml?c=105070&p=irol-EventDetails&EventId=5046806. Following the conclusion of the call, a replay will be available by dialing 888-203-1112 (domestic) or 719-457-0820 (international) and entering passcode 1599997.

Additional information for investors can be found at http://investors.kcg.com.

Non-GAAP Financial Presentations

KCG believes that certain non-GAAP financial presentations, when taken into consideration with the corresponding GAAP financial presentations, are important in understanding operating results. Selected financial information is included in the non-GAAP financial presentations for the three and nine months ended September 30, 2013 and 2012. KCG believes the presentations provide a meaningful summary of results of operations for the three and nine month periods ended September 30, 2013 and 2012. Reconciliations of GAAP to non-GAAP results are included in the schedules in Exhibit 5.

About KCG

KCG is a leading independent securities firm offering investors a range of services designed to address trading needs across asset classes, product types and time zones. The firm combines advanced technology with exceptional client service across market making, agency execution and venues. KCG has multiple access points to trade global equities, fixed income, currencies and commodities via voice or automated execution. www.kcg.com

Certain statements contained herein may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “prospects” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could” or “may,” or by variations of such words or by similar expressions. These “forward-looking statements” are not historical facts and are based on current expectations, estimates and projections about KCG’s industry, management beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Any forward-looking statement contained herein speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. Accordingly, readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict including, without limitation, risks associated with: (i) the strategic combination of Knight Capital Group, Inc. (“Knight”) and GETCO Holding Company, LLC (“GETCO”), including, among other things, (a) difficulties and delays in integrating the Knight and GETCO businesses or fully realizing cost savings and other benefits, (b) the inability to sustain revenue and earnings growth, and (c) customer and client reactions; (ii) the August 1, 2012 technology issue that resulted in Knight’s broker-dealer subsidiary sending numerous erroneous orders in NYSE-listed and NYSE Arca securities into the market and the impact to Knight’s capital structure and business as well as actions taken in response thereto and consequences thereof; (iii) the costs and risks associated with the sale of Knight’s institutional fixed income sales and trading business, the pending sale of KCG’s reverse mortgage origination and securitization business and the departure of the managers of KCG’s listed derivatives group; (iv) the ability of KCG’s broker-dealer subsidiary to recover all or a portion of the damages that are attributable to the manner in which NASDAQ OMX handled the Facebook IPO; (v) changes in market structure, legislative, regulatory or financial reporting rules, including the continuing legislative and regulatory scrutiny of high-frequency trading; (vi) past or future changes to organizational structure and management; (vii) KCG’s ability to develop competitive new products and services in a timely manner and the acceptance of such products and services by KCG’s customers and potential customers; (viii) KCG’s ability to keep up with technological changes; (ix) KCG’s ability to effectively identify and manage market risk, operational risk, legal risk, liquidity risk, reputational risk, counterparty risk, international risk, regulatory risk, and compliance risk; (x) the cost and other effects of material contingencies, including litigation contingencies, and any adverse judicial, administrative or arbitral rulings or proceedings; and (xi) the effects of increased competition and KCG’s ability to maintain and expand market share. The list above is not exhaustive. Readers should carefully review the risks and uncertainties disclosed in KCG’s and Knight’s reports with the SEC, including, without limitation, those detailed under “Certain Factors Affecting Results of Operations” in KCG’s Quarterly Report on Form 10-Q for the period ended June 30, 2013, under “Risk Factors” in Knight’s Annual Report on Form 10-K for the year-ended December 31, 2012 and the Current Report on Form 8-K filed by KCG on August 9, 2013, and in other reports or documents KCG files with, or furnishes to, the SEC from time to time.


CONTACTS

 

Sophie Sohn    Jonathan Mairs
Communications & Marketing    Investor Relations
312-931-2299    201-356-1529
media@kcg.com    jmairs@kcg.com


Exhibit 1

KCG HOLDINGS, INC.

AVERAGE DAILY U.S. EQUITIES MARKET MAKING VOLUME AND AVERAGE REVENUE CAPTURE PER U.S. EQUITY DOLLAR VALUE TRADED*

 

    Q1 2012(1)     Q2 2012(1)(2)     Q3 2012(1)(3)     Q4 2012(1)     Q1 2013(1)     Q2 2013(1)     Q3 2013  

Market Making

             

Average daily dollar volume traded ($ millions)

    33,891        32,306        25,962        28,659        30,134        29,660        25,365   

Average daily trades (thousands)

    5,973        6,048        4,582        4,547        4,625        4,572        3,809   

Average daily shares traded (millions)

    3,892        3,744        3,296        3,093        3,996        3,624        4,148   

NYSE and NASDAQ shares traded

    1,130        1,095        895        929        944        911        805   

OTC Bulletin Board and OTC Market shares traded

    2,762        2,649        2,401        2,164        3,052        2,713        3,343   

Average revenue capture per U.S. equity dollar value traded (bps)

    0.85        0.85        0.88        0.89        0.88        0.96        1.01   

 

* In August 2013, KCG modified the reporting to remove certain equity stats of GETCO Holding Company, LLC to align with historical reporting practices.
(1) Trade volumes and statistics are for KCG Holdings, Inc for Q3 2013. For all other periods presented, trade volumes and statistics are the combination of Knight Capital Group, Inc. and GETCO Holding Company, LLC.
(2) Average revenue capture per U.S. equity dollar value traded excludes $26.0 million in trading losses related to the Facebook IPO.
(3) Average revenue capture per U.S. equity dollar value traded excludes $456.6 million in trading losses related to the August 1, 2012 technology issue.


KCG HOLDINGS, INC.    Exhibit 2
CONSOLIDATED STATEMENTS OF OPERATIONS(1)
(Unaudited)   

 

    For the three months ended September 30,     For the nine months ended September 30,  
    2013     2012     2013     2012  
    (In thousands, except per share amounts)  

Revenues

       

Trading revenues, net

  $ 230,471      $ 92,556      $ 415,495      $ 333,737   

Commissions and fees

    109,079        25,542        164,391        79,487   

Interest, net

    (177     (781     (970     (1,998

Investment income (loss) and other, net

    474        13,285        (8,765     14,015   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    339,847        130,602        570,151        425,241   
 

 

 

   

 

 

   

 

 

   

 

 

 

Expenses

       

Employee compensation and benefits

    129,631        31,875        229,883        111,395   

Execution and clearance fees

    81,023        42,267        167,931        144,656   

Communications and data processing

    44,046        21,681        86,040        67,380   

Interest

    23,870        706        26,515        2,002   

Depreciation and amortization

    20,091        7,574        36,004        27,180   

Payments for order flow

    16,431        717        17,468        2,128   

Professional fees

    9,077        2,575        38,928        7,690   

Occupancy and equipment rentals

    8,898        3,240        15,454        8,865   

Business development

    2,644        6        2,686        19   

Writedown of assets and lease loss accrual

    936        —          4,248        —     

Other

    11,318        5,349        30,028        19,002   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    347,965        115,990        655,185        390,317   
 

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from continuing operations before income taxes

    (8,118     14,612        (85,034     34,924   

Income tax (benefit) expense

    (107,767     4,805        (102,478     10,368   
 

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations, net of tax

    99,649        9,807        17,444        24,556   

Loss from discontinued operations, net of tax

    (784     —          (784     —     
 

 

 

   

 

 

   

 

 

   

 

 

 

Net income

  $ 98,865      $ 9,807      $ 16,660      $ 24,556   
 

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share from continuing operations

  $ 0.87      $ 0.21      $ 0.25      $ 0.49   
 

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share from continuing operations

  $ 0.87      $ 0.21      $ 0.25      $ 0.49   
 

 

 

   

 

 

   

 

 

   

 

 

 

Basic loss per share from discontinued operations

  $ (0.01   $ —        $ (0.01   $ —     
 

 

 

   

 

 

   

 

 

   

 

 

 

Diluted loss per share from discontinued operations

  $ (0.01   $ —        $ (0.01   $ —     
 

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

  $ 0.87      $ 0.21      $ 0.24      $ 0.49   
 

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

  $ 0.86      $ 0.21      $ 0.24      $ 0.49   
 

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in computation of basic earnings (loss) per share

    114,113        46,411        68,632        49,619   
 

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in computation of diluted earnings (loss) per share

    114,773        46,411        68,855        49,619   
 

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)  Third quarter 2013 includes the results of KCG Holdings Inc . Year to date 2013 includes three months of results of KCG Holdings, Inc. plus six months of GETCO Holding Company, LLC. All of 2012 reflect the results of GETCO Holding Company, LLC.


KCG HOLDINGS, INC.    Exhibit 3
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)   

 

    September 30, 2013     December 31, 2012(1)  
    (In thousands)  

ASSETS

   

Cash and cash equivalents

  $ 798,712      $ 427,631   

Cash and securities segregated under federal and other regulations

    216,442        —     

Financial instruments owned, at fair value:

   

Equities

    2,156,466        378,933   

Listed equity options

    288,227        92,305   

Debt securities

    79,284        183,637   
 

 

 

   

 

 

 

Total financial instruments owned, at fair value

    2,523,977        654,875   

Collateralized agreements:

   

Securities borrowed

    1,370,921        52,261   

Receivable from brokers, dealers and clearing organizations

    1,330,113        142,969   

Fixed assets and leasehold improvements, less accumulated depreciation and amortization

    161,865        83,341   

Investments

    125,889        248,438   

Goodwill

    18,398        4,645   

Intangible assets, less accumulated amortization

    192,045        46,123   

Deferred tax asset

    169,619        4,180   

Assets of business held for sale

    6,056,302        —     

Assets within discontinued operations

    41,997        —     

Other assets

    287,015        23,073   
 

 

 

   

 

 

 

Total assets

  $ 13,293,295      $ 1,687,536   
 

 

 

   

 

 

 

LIABILITIES & EQUITY

   

Liabilities

   

Financial instruments sold, not yet purchased, at fair value:

   

Equities

  $ 1,848,728      $ 423,740   

Listed equity options

    229,722        69,757   

Debt securities

    79,057        19,056   

Other financial instruments

    5,431        —     
 

 

 

   

 

 

 

Total financial instruments sold, not yet purchased, at fair value

    2,162,938        512,553   

Collateralized financings:

   

Securities loaned

    543,451        —     

Financial instruments sold under agreements to repurchase

    595,029        —     
 

 

 

   

 

 

 

Total collateralized financings

    1,138,480        —     

Payable to brokers, dealers and clearing organizations

    666,178        24,185   

Payable to customers

    486,136        —     

Accrued compensation expense

    130,158        27,728   

Accrued expenses and other liabilities

    220,648        118,068   

Capital lease obligations

    12,453        24,191   

Liabilities of business held for sale

    5,987,308        —     

Liabilities within discontinued operations

    18,716        —     

Short-term debt

    235,000        —     

Long-term debt

    722,259        15,000   
 

 

 

   

 

 

 

Total liabilities

    11,780,274        721,725   
 

 

 

   

 

 

 

Equity

   

Members’ equity

    —          965,811   

Class A common stock

    1,235        —     

Additional paid-in capital

    1,427,879        —     

Retained earnings

    98,865        —     

Treasury stock, at cost

    (9,811     —     

Accumulated other comprehensive (loss) income

    (5,147     —     
 

 

 

   

 

 

 

Total equity

    1,513,021        965,811   
 

 

 

   

 

 

 

Total liabilities and equity

  $ 13,293,295      $ 1,687,536   
 

 

 

   

 

 

 

 

(1)  GETCO Holding Company, LLC.


KCG HOLDINGS, INC.      Exhibit 4   
PRE-TAX EARNINGS FROM CONTINUING OPERATIONS BY BUSINESS SEGMENT*   
(In thousands)   
(Unaudited)   

 

     For the three months ended     For the nine months ended  
     September 30,     September 30,  
     2013     2012     2013     2012  

Market Making

        

Revenues

   $ 240,110      $ 107,672      $ 455,678      $ 383,203   

Expenses

     192,257        99,458        400,070        345,227   
  

 

 

   

 

 

   

 

 

   

 

 

 

Pre-tax earnings

     47,853        8,214        55,608        37,976   
  

 

 

   

 

 

   

 

 

   

 

 

 

Global Execution Services

        

Revenues

     91,366        9,258        113,701        27,248   

Expenses

     107,720        10,378        134,949        31,087   
  

 

 

   

 

 

   

 

 

   

 

 

 

Pre-tax loss

     (16,354     (1,120     (21,248     (3,839
  

 

 

   

 

 

   

 

 

   

 

 

 

Corporate and Other

        

Revenues

     8,371        13,672        772        14,790   

Expenses

     47,988        6,154        120,166        14,003   
  

 

 

   

 

 

   

 

 

   

 

 

 

Pre-tax earnings (loss)

     (39,617     7,518        (119,394     787   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

        

Revenues

     339,847        130,602        570,151        425,241   

Expenses

     347,965        115,990        655,185        390,317   
  

 

 

   

 

 

   

 

 

   

 

 

 

Pre-tax (loss) earnings

   $ (8,118   $ 14,612      $ (85,034   $ 34,924   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

* Totals may not add due to rounding.

Third quarter 2013 includes the results of KCG Holdings, Inc. Year to date 2013 includes three months of results of KCG Holdings, Inc. plus six months of GETCO Holding Company, LLC. All of 2012 reflect the results of GETCO Holding Company, LLC.


KCG HOLDINGS, INC.      Exhibit 5   
Regulation G Reconciliation of Non-GAAP financial measures (Continuing operations)(1)   
(in thousands)   

 

            Global              
            Execution     Corporate and        
Three months ended September 30, 2013    Market Making      Services     Other     Consolidated  

Reconciliation of GAAP Pre-Tax to Non-GAAP Pre-Tax:

         

GAAP Income (Loss) from continuing operations before income taxes

   $ 47,853       $ (16,354   $ (39,617   $ (8,118

Compensation and other expenses related to reduction in workforce

     2,309         15,132        —          17,441   

Professional and other fees related to Mergers and August 1st technology issue

     —           —          7,269        7,269   

Write down of assets and lease loss accrual

     108         —          828        936   
  

 

 

    

 

 

   

 

 

   

 

 

 

Non GAAP Income (Loss) from continuing operations before income taxes

   $ 50,270       $ (1,222   $ (31,520   $ 17,528   
  

 

 

    

 

 

   

 

 

   

 

 

 
            Global              
            Execution     Corporate and        
Nine months ended September 30, 2013    Market Making      Services     Other     Consolidated  

Reconciliation of GAAP Pre-Tax to Non-GAAP Pre-Tax:

         

GAAP Income (Loss) from continuing operations before income taxes

   $ 55,608       $ (21,248   $ (119,394   $ (85,034

Professional and other fees related to Mergers and August 1st technology issue

     —           —          44,398        44,398   

Compensation and other expenses related to reduction in workforce

     6,264         15,997        —          22,261   

Unit acceleration due to Mergers

     —           —          14,931        14,931   

Strategic asset impairment

     —           —          9,184        9,184   

Write down of assets and lease loss accrual

     108         —          4,525        4,633   
  

 

 

    

 

 

   

 

 

   

 

 

 

Non GAAP Income (Loss) from continuing operations before income taxes

   $ 61,980       $ (5,251   $ (46,356   $ 10,373  
  

 

 

    

 

 

   

 

 

   

 

 

 
            Global              
            Execution     Corporate and        
Three months ended September 30, 2012    Market Making      Services     Other     Consolidated  

Reconciliation of GAAP Pre-Tax to Non-GAAP Pre-Tax:

         

GAAP Income (Loss) from continuing operations before income taxes

   $ 8,214       $ (1,120   $ 7,518      $ 14,612   

Investment gain

     —           —          (11,354     (11,354
  

 

 

    

 

 

   

 

 

   

 

 

 

Non GAAP Income (Loss) from continuing operations before income taxes

   $ 8,214       $ (1,120   $ (3,836   $ 3,258   
  

 

 

    

 

 

   

 

 

   

 

 

 
            Global              
            Execution     Corporate and        
Nine months ended September 30, 2012    Market Making      Services     Other     Consolidated  

Reconciliation of GAAP Pre-Tax to Non-GAAP Pre-Tax:

         

GAAP Income (Loss) from continuing operations before income taxes

   $ 37,976       $ (3,839   $ 787      $ 34,924   

Investment gain

     —           —          (11,354     (11,354
  

 

 

    

 

 

   

 

 

   

 

 

 

Non GAAP Income (Loss) from continuing operations before income taxes

   $ 37,976       $ (3,839   $ (10,567   $ 23,570   
  

 

 

    

 

 

   

 

 

   

 

 

 

 

* Totals may not add due to rounding
(1) Third quarter 2013 includes the results of KCG Holdings, Inc. Year to date 2013 includes three months of results of KCG Holdings, Inc. plus six months of GETCO Holding Company, LLC. All of 2012 reflect the results of GETCO Holding Company, LLC.