Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Virtu KCG Holdings LLC | d769138d8k.htm |
| EX-99.1 - EX-99.1 - Virtu KCG Holdings LLC | d769138dex991.htm |
 KCG Holdings, Inc. (NYSE: KCG)
2
Quarter
2014
Earnings
Presentation
August 1, 2014
nd
Exhibit 99.2 |
 Safe Harbor
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’s
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.
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
business
combination
(the
“Mergers”)
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
to
the
Mergers;
(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
sale
of
KCG’s
reverse
mortgage
origination
and
securitization
business
and
the
departure
of
the
managers
of
KCG’s
listed
derivatives
group;
(iv)
changes
in
market
structure,
legislative,
regulatory
or
financial
reporting
rules,
including
the
increased
focus
by
regulators,
the
New
York
Attorney
General,
Congress
and
the
media
on
market
structure
issues,
and
in
particular,
the
scrutiny
of
high
frequency
trading,
alternative
trading
systems,
market
fragmentation,
colocation,
access
to
market
data
feeds,
and
remuneration
arrangements
such
as
payment
for
order
flow
and
exchange
fee
structures;
(v)
past
or
future
changes
to
organizational
structure
and
management;
(vi)
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;
(vii)
KCG’s
ability
to
keep
up
with
technological
changes;
(viii)
KCG’s
ability
to
effectively
identify
and
manage
market
risk,
operational
and
technology
risk,
legal
risk,
liquidity
risk,
reputational
risk,
counterparty
and
credit
risk,
international
risk,
regulatory
risk,
and
compliance
risk;
(ix)
the
cost
and
other
effects
of
material
contingencies,
including
litigation
contingencies,
and
any
adverse
judicial,
administrative
or
arbitral
rulings
or
proceedings;
and
(x)
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
reports
with
the
SEC,
including,
without
limitation,
those
detailed
under
“Risk
Factors”
in
KCG’s
Annual
Report
on
Form
10-K
for
the
year-ended
December
31,
2013,
under
“Certain
Factors
Affecting
Results
of
Operations”
in
KCG’s
Quarterly
Report
on
Form
10-Q
for
the
period
ended
March
31,
2014,
and
other
reports
or
documents
KCG
files
with,
or
furnishes
to,
the
SEC
from
time
to
time.
For
additional
disclosures,
please
see
https://www.kcg.com/legal/global-disclosures. |
 2nd Quarter 2014 Summary
KCG
financial
results
affected
by
the
deterioration
in
market
conditions
across
asset classes
Strong
revenue
capture
per
U.S.
equity
dollar
value
traded
in
market
making
despite the
market
conditions
Modest
market
share
gains
across
market
making,
agency
execution
and
trading
venues
Added
quantitative-based
trading
strategy
and
analysis
to
the
client
offering
Combined
primary
U.K.
broker
dealers
Named
Phil
Allison
CEO
of
KCG
Europe
Limited*
Completed
an
additional
$50
million
debt
repayment
Repurchased
4.5
million
shares
for
$52.9
million
1
* Employment commences
September 22,
2014 |
 Market Conditions
2
Market
conditions
reflect
the
continuing
after
effects
of
the
2008
financial
crisis
Sources: BATS Global Markets, VistaOne Solutions, OCC, CSI, Bloomberg,
Reuters, EBS, SIFMA, TRACE, MSRB; * 2Q14 SEC Rule 605 share volume includes an estimate of June 2014 data based on proprietary
information
-
Reduced
trading
activity
among
global
banks
in
response
to
the
implementation
of
new
regulations
-
Dampened
volatility
from
more
than
four
years
of
near
zero
interest rates
-
Avg.
daily
consolidated
U.S.
equity
volume
declined
13%
while
retail
share
volume
fell
approximately
20%
and
realized
volatility
for
the
S&P
500
averaged
just
9.2
In
2Q14,
global
markets
posted
sequential
declines
across
several
major
asset
classes
Avg. daily volume in select securities markets
2Q13
3Q13
4Q13
1Q14
2Q14
Consolidated U.S. equity dollar volume
$232.4 bn
$207.8 bn
$229.8 bn
$275.8 bn
$242.8 bn
Consolidated U.S. equity share volume
6.5 bn
5.8 bn
6.1 bn
6.9 bn
6.1 bn
SEC Rule 605 “retail”
U.S. equity share volume*
801.1 mn
730.2 mn
783.0 mn
854.1 mn
686.3 mn
U.S. equity futures contracts
3.6 mn
2.7 mn
2.2 mn
2.9 mn
2.3 mn
U.S. options contracts
17.5 mn
15.0 mn
16.2 mn
17.9 mn
15.8 mn
European equity notional value traded (USD)
$950 bn
$906 bn
$944 bn
$1,197 bn
$1,080 bn
Asian equity share volume
8.9 bn
7.9 bn
7.2 bn
7.4 bn
6.1 bn
FX notional value traded (USD) among reporting venues
$264.3 bn
$222.0 bn
$202.5 bn
$232.2 bn
$189.4 bn
U.S. Treasuries
$583.4 bn
$520.9 bn
$520.7 bn
$522.1 bn
$490.7 bn
U.S. corporate bonds
$19.2 bn
$16.5 bn
$17.1 bn
$20.8 bn
$20.2 bn
Transactions under 250 bonds
14,653
13,578
13,011
13,334
12, 372
Market conditions in U.S. equities
15,000
12,500
10,000
7,500
5,000
2,500
90
75
60
45
30
15
0
Realized volatility for the S&P 500
Consolidated U.S. equity share volume
0 |
 KCG Financial Results
Pre-Tax Earnings (Loss) from Continuing Operations By Business
Segment (in thousands)
(unaudited)
Market Making
Revenues
Expenses
Pre-tax earnings
Global Execution Services
Revenues
Expenses
Pre-tax earnings
Corporate and Other
Revenues
Expenses
Pre-tax earnings
Consolidated
Revenues
Expenses
Pre-tax earnings
3
For the three months ended
December 31, 2013
March 31, 2014
For the trailing
four quarters ended
June 30, 2014
240,110
192,257
47,853
$
91,366
107,720
(16,354)
137,862
47,988
89,874
469,338
347,965
121,373
$
232,519
47,951
84,065
88,557
(4,491)
6,790
66,949
(60,159)
323,374
340,075
(16,699)
184,569
$
$
277,346
76,032
87,220
85,204
2,016
19,091
37,755
(18,664)
383,657
324,273
59,384
201,314
$
$
218,446
36,004
85,903
85,167
736
9,784
(22,233)
314,133
299,626
14,507
182,442
32,017
$
$
968,421
207,840
348,554
366,648
(18,093)
173,527
184,709
(11,182)
1,490,502
1,311,939
178,563
760,582
$
$
3rd quarter 2013 results include a gain of $128.0 million on
GETCO’s investment in Knight as well as expenses of $25.6 million related to the merger, integration and reduction in
workforce
4th quarter 2013 results include a gain of $1.4 million on a strategic
asset as well as expenses of $37.9 million related to the merger, integration, reduction in workforce and debt
reduction
1st quarter 2014 results include a gain of $9.6 million from the merger
of BATS and Direct Edge as well as expenses of $7.8 million related to the merger, integration and debt
reduction
2nd quarter 2014 results include expenses of $7.0 million related to
the integration, reduction in workforce and debt reduction June
30, 2014 September 30, 2013
Notes: |
 Market Making
U.S. equities
Non-U.S. equities
Market Making revenue distribution
(trailing four quarters ended June 30, 2014)
4
Sources: KCG, SEC, VistaOne Solutions; KCG dollar volume and revenue
capture prior to July 1, 2013 represent combined activity from affiliated broker dealers of GETCO Holding Company, LLC and Knight Capital
Group, Inc.
0
4
8
12
16
20
0
200
400
600
800
1,000
2Q13
3Q13
4Q13
1Q14
2Q14
Retail trading activity and realized volatility
SEC Rule 605
-eligible "retail" U.S equity share volume
Realized volatility for the S&P 500
0.85
0.85
0.88
0.89
0.88
0.96
1.01
0.98
1.26
1.07
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
KCG dollar volume and revenue capture
Avg. daily dollar volume
Avg. revenue capture per dollar value traded
73%
27%
KCG performed well in 2Q14 despite the abrupt market
wide decline qoq in retail U.S. equity market volume as
well as realized volatility
-
KCG dollar volume declined 8% qoq compared to a 12%
decrease for the consolidated U.S. equity market
-
Avg. revenue capture per dollar value traded remained strong
despite the market conditions
-
Modest market share gains in both retail and consolidated U.S.
equity volume
Contributions from market making in global equities and
FICC negatively affected by the market conditions
|
 Global Execution Services
KCG revenue from agency execution and trading
venues in 2Q14 largely static qoq despite the
deterioration in market conditions
Adjustments and enhancements to institutional equities
are demonstrating results
5
Sources: KCG, BATS Global Markets, Reuters, EBS, TRACE, MSRB; KCG
algorithmic services ADV and market share prior to July 1, 2013 represent combined activity from affiliated broker dealers of GETCO Holding
Company, LLC and Knight Capital Group, Inc.
4.22%
4.68%
4.20%
4.05%
4.38%
3.50%
3.65%
3.80%
3.95%
4.10%
4.25%
4.40%
4.55%
4.70%
4.85%
5.00%
200
220
240
260
280
300
2Q13
3Q13
4Q13
1Q14
2Q14
KCG algorithmic services ADV and market share
Avg. daily U.S. equity share volume
Pct. (%) of consolidated U.S. equity volume
-
More effective alignment of institutional equity sales
-
Improved performance of global ETF team
-
KCG algorithmic services gained market share in U.S. and
European equities
KCG BondPoint continued to steadily gain market share
in corporates and munis
KCG Hotspot ADV and market share
KCG BondPoint ADV and market share
17%
15%
13%
11%
9%
7%
2Q13
3Q13
4Q13
1Q14
2Q14
Avg. daily notional FX dollar volume
2Q13
3Q13
4Q13
1Q14
2Q14
$20
$24
$28
$32
$36
$40
$0
$8
$12
$16
$4
Market share of notional FX dollar volume among reporting venues
Market share of muni bond transactions under 250 bonds
Market share of corporate bond transactions under 250 bonds
Avg. daily fixed income par value traded
11.11%
12.82%
14.33%
13.88%
13.83%
$90
$105
$120
$135
$150
$165
2.5%
5.0%
12.5%
15.0%
17.5%
25.0%
22.5%
20.0%
10.0%
7.5%
0.0%
15.9%
17.4%
17.3%
18.2%
18.6%
3.8%
4.6%
4.9%
5.8%
6.4% |
 International
KCG is well positioned for adjacent growth in
Europe where the firm is underpenetrated
A rapidly shifting landscape in Europe presents
numerous opportunities aligned with KCG strengths
6
Global revenue distribution
(trailing four quarters ended June 30, 2014)
Pct. growth of KCG algorithmic services
European equity notional value traded
0%
50%
100%
150%
200%
250%
2Q13
3Q13
4Q13
1Q14
2Q14
87%
9%
4%
Americas
Europe
Asia
–
Redrew reporting lines, consolidated European
equities sales, moved into the top 15 broker ranking
in 2H13 and recently named a CEO for the region*
–
In discussions with banks to provide outsourced
trade execution in U.S. and European equities
–
European institutions increasing usage of algorithms
to execute orders
First half 2014 broker ranking
in the Stoxx Europe 600 Index
Rank
Broker
Pct.
(%)
of
notional
value traded
1
Credit Suisse
12.3%
2
Morgan Stanley
11.1%
3
Deutsche Bank
9.2%
4
Merrill Lynch
7.7%
5
JP Morgan
7.6%
6
Barclays Capital
7.0%
7
Citigroup
6.6%
8
Société
Général
6.1%
9
UBS
4.8%
10
Instinet
3.9%
11
Goldman Sachs
3.7%
12
HSBC
2.1%
13
KCG
1.7%
14
Exane
1.4%
15
RBC
1.0%
Sources: Bloomberg, KCG; KCG algorithmic services ADV and market share
prior to July 1, 2013 represent combined activity from
affiliated broker dealers of GETCO Holding Company, LLC and Knight Capital Group, Inc.; * Employment commences
September 22, 2014 |
 Consolidated Expenses
Decrease in compensation and benefits driven
by a nearly 14% reduction in headcount in the
first year of operation
Initial reduction in communications and data
processing of approximately $23.5 million* on
an annualized run-rate basis since the merger
close
Cut the quarterly debt interest expense by
more
than
50%
as
a
result
of
a
series
of
debt
repayments
Decline in occupancy and equipment rentals
expense
of
10%
from
2H13
to
1H14
attributable
to the consolidation of offices in Chicago and
London
Other expenses can vary based on corporate
insurance costs, recruiting fees, moving costs
and general office expenses
7
Compensation and benefits
Communications and data processing
Depreciation and amortization
Debt interest expense
Professional
fees
Occupancy and equipment rentals
Business
development
Other
$0
$25
$50
$75
$100
$125
$150
$175
$200
$225
$250
3Q13
4Q13
1Q14
2Q14
First year expense trends
See addendum for a reconciliation of GAAP to non-GAAP
financial results. * In an investor presentation dated November 19, 2013 available at
http://investors.kcg.com,
the pre-merger pro forma 1H13 expense from communications and data
processing was $86.8 million. In comparison to the 1H14 actual
combined expense from communications and data processing, the annualized savings on a run-rate basis amounts to $23.5 million. |
 Debt Interest Expense
(in $ millions)
July 1, 2013
June 30, 2014
3.50%
convertible
notes
*
375
117
5.75% term credit agreement
535
0
8.25%
senior
secured
notes
†
305
305
Total debt
1,215
422
* The convertible notes mature on March 15, 2015
†
The senior secured notes mature on June 15, 2018; certain restrictions
governing redemptions expire on June 15, 2015
KCG aggressively paid down debt in the first year
of operation
The firm fully retired the term credit agreement
ahead of the December 2017 maturity date saving
$66 million in future interest expense
KCG substantially achieved its target capital
structure
The convertible notes are due to mature in March
2015
8
Source: KCG
$1,215
$422
$250
$500
$750
$1,000
$1,250
Jul
-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan
-14
Feb-14
Mar-14
Apr-14
May-14
Jun
-14
Debt
$16.2mn
$12.8mn
$9.4mn
$7.3mn
$2
$4
$6
$8
$10
$12
$14
$16
$18
3Q13
4Q13
1Q14
2Q14
Quarterly debt interest expense
$0
$0 |
 Additional Financials
(in $ millions)
June 30, 2014
March 31, 2014
Cash and cash equivalents
$ 600.9
$ 651.1
Debt
422.3
472.3
Stockholders’
equity
1,533.7
1,566.2
-----
Debt-to-tangible equity ratio
0.32
0.35
Tangible book value per share
$11.04
$10.85
Book value per share
$12.66
$12.46
Conservative management of the balance sheet
Released $200 million in excess capital from the
integration of the predecessor firms and sale of
assets in the first year of operation
Generated $186.5 million in free cash flow from
operating income over the past four quarters
In 2Q14 began to return capital to stockholders
through share repurchases
See addendum for a reconciliation of GAAP to non-GAAP financial
results. Net revenues represent total revenues less execution and clearance fees, payment for order flow and collateralized financing interest as well as
any one-time gains. Free cash flow represents income from
continuing operations less capital expenditures plus non-cash items such as depreciation and amortization, stock-based compensation and non-GAAP adjustments
included in the Regulation G tables.
9
3Q13
4Q13
1Q14
2Q14
Total revenues
Net revenues
$0
$50
$150
$200
$250
$300
$350
$400
$100
$0
$10
$20
$30
$40
$50
$60
$70
3Q13
4Q13
1Q14
2Q14
Non-
GAAP pre-tax income from continuing operations
Free cash flow from operating income
Total revenues and net revenues
Earnings and free cash flow
–
Liquidity buffer of $350 million
–
Regular stress tests for extreme scenarios
|
 Summary of First Year Activities
Integrated
direct-to-client
and
non-client,
exchange-based
U.S.
equity
market
making
Combined overlapping units including
algorithmic
services,
options
market
making,
DMM
and
LMM
Restructured the institutional ETF desk
Consolidated European equity sales
Combined offices in Chicago and London
Recruited Charles Haldeman to serve as Non-
Executive Chairman of the Board of Directors
Added quantitative-based trading strategy and
analysis to the client offering
Reduced overall headcount nearly 14%
Reduced debt by $793 million
Consolidated institutional U.S. equity sales
Recruited Global Head of FICC Trading, Co-
Head
of
Global
Execution
Services
and
Platforms,
and
CEO
of
KCG
Europe
Ltd.*
Combined support functions including
Technology,
Finance,
Legal,
Compliance,
Risk,
HR
and
Facilities
Brought all U.S. equity clearing in house
Consolidated broker-dealers in the U.S. (KCG
Americas LLC) and U.K. (KCG Europe Limited)
Sold Urban Financial of America
Established a share repurchase program
10
* Employment commences September 22, 2014
|
 SEC Market Structure Priorities
Equity Markets
Market Instability
High Frequency Trading
-
Require certain market participants to register as dealers
and members of FINRA
-
Develop rules to eliminate disruptive trading practices
-
Update market making requirements by developing
affirmative or negative trading obligations
Market Transparency
-
Develop rules to increase transparency around ATSs and
determine whether rules are necessary to reduce
fragmentation
Broker Conflicts
-
Enhance order routing disclosures
-
Require Exchanges to review of order types
Liquidity for smaller companies
-
Proposed tick size pilot for stocks of smaller companies
11
Fixed Income Markets
Price quality and transparency
-
Develop a workable best execution rule for both the
corporate and municipal bond markets
-
Develop rules regarding disclosure of markups in
“riskless
principal”
transactions
for
both
corporate
and
municipal bonds
-
Focus on regulatory initiatives to enhance the public
availability of pre-trade pricing information in the fixed
income markets, particularly with respect to smaller
retail-size orders
-
Proposed Reg SCI |
 KCG Stockholder Base
General Atlantic
Jefferies
Insiders
Institutional (active)
Index / ETF (passive)
Retail
A legacy investor in GETCO, General Atlantic
increased its stake in the combined firm at the
merger close
A
legacy
investor
in
Knight,
Jefferies
increased
its
stake in the combined firm in the year since the
merger close
‘Insiders’
is comprised of members of the KCG
Management Committee and Board of Directors,
excluding representatives of General Atlantic
As a category, ‘Retail’
includes current KCG
employees as well as former management and
employees of the predecessor firms
Estimated ownership breakdown based on the weighted average shares
outstanding of 117.6 million during the second quarter of 2014. Excludes outstanding warrants.
12
24.2%
19.1%
16.9%
16.3%
9.4%
14.1% |
 |
 Regulation G Reconciliation of Non-GAAP
Financial Measures (Continuing Operations)
13
3 months ended June 30, 2014
Market Making
Global Execution
Services
Corporate and
Other
Consolidated
Reconciliation of GAAP pre-tax to non-GAAP pre-tax:
GAAP income (loss) from continuing operations before income taxes
$ 36,004
$ 736
$ (22,233)
$ 14,507
Writedown of capitalized debt costs
-
-
1,995
1,995
Compensation related to reduction in workforce
383
1,886
800
3,069
Writedown of assets and lease loss accrual, net
452
-
1,489
1,941
$ 36,839
$ 2,622
$ (17,949)
$ 21,512
3 months ended March 31, 2014
Market Making
Global Execution
Services
Corporate and
Other
Consolidated
Reconciliation of GAAP pre-tax to non-GAAP pre-tax:
GAAP income (loss) from continuing operations before income taxes
$ 76,032
$ 2,016
$ (18,664)
$ 59,384
Writedown of capitalized debt costs
-
-
7,557
7,557
Income resulting from the merger of BATS and Direct Edge, net
-
-
(9,644)
(9,644)
Writedown of assets and lease loss accrual, net
359
-
(93)
266
Non-GAAP income (loss) from continuing operations before income
taxes $ 76,391
$ 2,016
$ (20,844)
$ 57,563
Non-GAAP income (loss) from continuing operations before income
taxes |
 3 months ended September 30, 2013
Market Making
Global Execution
Services
Corporate and 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)
$ 89,874
$ 121,373
Gain on investment in Knight Capital Group, Inc.
-
-
(127,972)
(127,972)
Compensation and other expenses related to reduction in workforce
2,309
15,132
-
17,441
Professional
and
other
fees
related
to
Mergers
and
August
1
st
technology
issue
-
-
7,269
7,269
Writedown of assets and lease loss accrual, net
108
-
828
936
Non-GAAP income (loss) from continuing operations before income
taxes $ 50,270
$ (1,222)
$ (30,001)
$ 19,048
Regulation G Reconciliation of Non-GAAP
Financial Measures (Continuing Operations)
3 months ended December 31, 2013
Market Making
Global Execution
Services
Corporate and Other
Consolidated
Reconciliation of GAAP pre-tax to non-GAAP pre-tax:
GAAP income (loss) from continuing operations before income taxes
$ 47,951
$ (4,491)
$ (60,159)
$ (16,699)
Compensation and other expenses related to reduction in workforce
5,254
5,447
708
11,409
-
-
2,785
2,785
Writedown of capitalized debt costs
-
-
13,209
13,209
Gain on strategic asset
-
-
(1,359)
(1,359)
Writedown of assets and lease loss accrual
-
1,681
8,819
10,500
Non-GAAP income (loss) from continuing operations before income
taxes $ 53,205
$ 2,637
$ (35,997)
$ 19,845
14
Professional and
other
fees
related
to
Mergers
and
August
1
st
technology
issue |
 3 months ended June 30, 2014
GAAP
Adjustments for
non-GAAP presentation
KCG adjusted, normalized
expenses
Employee compensation and benefits
103,430
3,069
100,361
Communications and data processing
38,279
-
38,279
Depreciation and amortization
19,823
-
19,823
Debt interest expense
7,497
-
7,497
Professional fees
7,337
-
7,337
Occupancy and equipment rentals
8,235
-
8,235
Business development
2,609
-
2,609
Writedown of assets, lease loss accrual and capitalized debt
costs 3,936
3,936
-
Other
10,767
-
10,767
Total expenses
$ 201,913
$ 7,005
$ 194,908
Regulation G Reconciliation of Non-GAAP
Financial Measures (Continuing Operations)
15
Reconciliation of GAAP expenses to normalized non-GAAP expenses:
|
 3 months ended March 31, 2014
GAAP
Adjustments for
non-GAAP presentation
KCG adjusted, normalized
expenses
Reconciliation of GAAP expenses to normalized non-GAAP
expenses: Employee compensation and benefits
122,319
-
122,319
Communications and data processing
36,796
-
36,796
Depreciation and amortization
20,103
-
20,103
Debt interest expense
9,524
-
9,524
Professional fees
5,402
-
5,402
Occupancy and equipment rentals
8,285
-
8,285
Business development
1,683
-
1,683
Writedown of assets, lease loss accrual and capitalized debt
costs 7,823
7,823
-
Other
8,643
-
8,643
Total expenses
$ 220,578
$ 7,823
$ 212,755
Regulation G Reconciliation of Non-GAAP
Financial Measures (Continuing Operations)
16 |
 Regulation G Reconciliation of Non-GAAP
Financial Measures (Continuing Operations)
17
3 months ended December 31, 2013
GAAP
Adjustments for
KCG adjusted, normalized
expenses
Reconciliation of GAAP expenses to normalized non-GAAP
expenses: Employee compensation and benefits
112,209
11,409
100,800
Communications and data processing
37,512
-
37,512
Depreciation and amortization
19,566
-
19,566
Debt interest expense
12,943
-
12,943
Professional fees
7,734
2,491
5,243
Occupancy and equipment rentals
9,358
-
9,358
Business development
1,923
-
1,923
Writedown of assets, lease loss accrual and capitalized debt
costs 23,709
23,709
-
Other
13,066
294
12,772
Total expenses
$ 238,020
$ 37,903
$ 200,117
non-GAAP presentation |
 Regulation G Reconciliation of Non-GAAP
Financial Measures (Continuing Operations)
3 months ended September 30, 2013
GAAP
Adjustments for
non-GAAP presentation
KCG adjusted, normalized
expenses
Reconciliation of GAAP expenses to normalized non-GAAP
expenses: Employee compensation and benefits
129,631
17,441
112,190
Communications and data processing
44,046
-
44,046
Depreciation and amortization
20,091
-
20,091
Debt interest expense
19,350
2,982
16,368
Professional fees
9,077
4,087
4,990
Occupancy and equipment rentals
8,898
-
8,898
Business development
2,644
200
2,444
Writedown of assets and lease loss accrual, net
936
936
-
Other
11,318
-
11,318
Total expenses
$ 245,991
$ 25,647
$ 220,345
18 |
 |