We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Kcg Holdings Class A | NYSE:KCG | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 20.00 | 0 | 01:00:00 |
ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Title of each class
|
Name of each exchange on which registered
|
Class A Common Stock, $0.01 par value
|
New York Stock Exchange
|
Large accelerated filer
|
|
ý
|
Accelerated filer
|
|
¨
|
|
|
|
|
|
|
Non-accelerated filer
|
|
¨
|
Smaller reporting company
|
|
¨
|
|
|
Page
|
|
|
|
PART I
|
|
|
Item 1.
|
Business
|
|
Item 1A.
|
Risk Factors
|
|
Item 1B.
|
Unresolved Staff Comments
|
|
Item 2.
|
Properties
|
|
Item 3.
|
Legal Proceedings
|
|
Item 4.
|
Mine Safety Disclosures
|
|
|
|
|
PART II
|
|
|
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Item 6.
|
Selected Financial Data
|
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosures
|
|
Item 9A.
|
Controls and Procedures
|
|
Item 9B.
|
Other Information
|
|
|
|
|
PART III
|
|
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
|
Item 11.
|
Executive Compensation
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
|
Item 14.
|
Principal Accountant Fees and Services
|
|
|
|
|
PART IV
|
|
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
|
Item 16.
|
Form 10-K Summary
|
|
Signatures
|
|
|
Certifications
|
|
|
Exhibit Index
|
|
|
Item 1.
|
Business
|
•
|
Market Making
- Our Market Making segment principally consists of market making in the cash, futures and options markets across global equities, options, fixed income, currencies and commodities. As a market maker, we commit capital on a principal basis by offering to buy securities from, or sell securities to, broker dealers, banks and institutions. We engage in principal trading in the Market Making segment direct to clients as well as in a supplemental capacity on exchanges, electronic communications networks (“ECNs”) and alternative trading systems (“ATSs”). We are an active participant on all major global equity and futures exchanges and we also trade on substantially all domestic electronic options exchanges. As a complement to electronic market making, our cash trading business handles specialized orders and also transacts on the OTC Bulletin Board marketplaces operated by the OTC Markets Group Inc. and the Alternative Investment Market of the London Stock Exchange ("AIM").
|
•
|
Global Execution Services
- Our Global Execution Services segment comprises agency-based trading and trading venues, offering execution services in global equities, options, futures and fixed income on behalf of institutions, banks and broker dealers. We earn commissions as an agent on behalf of clients as well as between principals to transactions; in addition, we will commit capital on behalf of clients as needed. Agency-based, execution-only trading in the segment is done primarily through a variety of access points including: (i) algorithmic trading and order routing in global equities and options; (ii) institutional sales traders executing program, block and riskless principal trades in global equities and exchange traded funds ("ETFs"); (iii) a fixed income ECN that also offers trading applications; and (iv) an ATS for U.S. equities.
|
•
|
Corporate and Other
- Our Corporate and Other segment contains our investments, principally in strategic trading-related opportunities; manages the deployment of capital across the organization; houses executive management functions; and maintains corporate overhead expenses and all other income and expenses that are not attributable to our other segments. Our Corporate and Other segment also contains functions that support the Company’s other segments such as self-clearing services, including stock lending activities.
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Market Making
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
775,173
|
|
|
$
|
884,858
|
|
|
$
|
901,152
|
|
Expenses
|
|
681,441
|
|
|
760,830
|
|
|
754,439
|
|
|||
Pre-tax earnings
|
|
93,732
|
|
|
124,028
|
|
|
146,713
|
|
|||
Global Execution Services
|
|
|
|
|
|
|
||||||
Revenues
|
|
283,756
|
|
|
667,723
|
|
|
345,710
|
|
|||
Expenses
|
|
271,748
|
|
|
298,766
|
|
|
334,654
|
|
|||
Pre-tax earnings
|
|
12,008
|
|
|
368,957
|
|
|
11,056
|
|
|||
Corporate and Other
|
|
|
|
|
|
|
||||||
Revenues
|
|
395,483
|
|
|
46,529
|
|
|
69,369
|
|
|||
Expenses
|
|
104,795
|
|
|
159,552
|
|
|
141,951
|
|
|||
Pre-tax earnings (loss)
|
|
290,688
|
|
|
(113,023
|
)
|
|
(72,582
|
)
|
|||
Consolidated
|
|
|
|
|
|
|
||||||
Revenues
|
|
1,454,412
|
|
|
1,599,110
|
|
|
1,316,232
|
|
|||
Expenses
|
|
1,057,984
|
|
|
1,219,148
|
|
|
1,231,045
|
|
|||
Pre-tax earnings
|
|
$
|
396,428
|
|
|
$
|
379,962
|
|
|
$
|
85,187
|
|
Item 1A.
|
Risk Factors
|
•
|
increasing its vulnerability to general adverse economic and industry conditions;
|
•
|
requiring it to dedicate a portion of its cash flow from operations to payments on its indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes;
|
•
|
making it difficult for KCG to optimally manage the cash flow for its businesses;
|
•
|
limiting its flexibility in planning for, or reacting to, changes in its businesses and the markets in which it operates;
|
•
|
placing it at a competitive disadvantage compared to its competitors that have less debt;
|
•
|
subjecting it to a number of restrictive covenants that, among other things, limit its ability to pay dividends and distributions, issue and repurchase its capital stock, make acquisitions and dispositions, borrow additional funds, and make capital expenditures and other investments, and
|
•
|
exposing it to interest rate risk due to the variable interest rate on borrowings under any revolving credit agreement.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
High
|
|
Low
|
||||
2016
|
|
|
|
||||
First Quarter
|
$
|
12.33
|
|
|
$
|
10.22
|
|
Second Quarter
|
14.27
|
|
|
11.70
|
|
||
Third Quarter
|
15.60
|
|
|
13.14
|
|
||
Fourth Quarter
|
15.52
|
|
|
12.32
|
|
||
2015
|
|
|
|
||||
First Quarter
|
$
|
12.92
|
|
|
$
|
11.55
|
|
Second Quarter
|
13.63
|
|
|
12.24
|
|
||
Third Quarter
|
12.49
|
|
|
9.88
|
|
||
Fourth Quarter
|
12.98
|
|
|
11.24
|
|
|
|
Period Ending
|
||||||||||||||||||||||
Index
|
|
07/05/13
|
|
|
12/31/13
|
|
|
06/30/14
|
|
|
12/31/14
|
|
|
06/30/15
|
|
|
12/31/15
|
|
|
06/30/16
|
|
|
12/31/16
|
|
KCG Holdings, Inc.
|
|
100.00
|
|
|
107.17
|
|
|
106.45
|
|
|
104.39
|
|
|
110.48
|
|
|
110.30
|
|
|
119.18
|
|
|
118.73
|
|
Russell 2000
|
|
100.00
|
|
|
115.74
|
|
|
118.66
|
|
|
119.82
|
|
|
124.72
|
|
|
112.98
|
|
|
119.37
|
|
|
141.67
|
|
SNL Broker/Dealer
|
|
100.00
|
|
|
113.26
|
|
|
120.12
|
|
|
126.17
|
|
|
141.08
|
|
|
130.82
|
|
|
119.68
|
|
|
172.40
|
|
Period
|
|
Total Number of
Shares Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
(1)
|
|
Approximate Dollar
Value of Shares That
May Yet Be Purchased
Under the Plans or
Programs
|
||||||
October 1, 2016 - October 31, 2016
|
|
|
|
|
|
|
|
|
||||||
Common stock repurchases
|
|
16
|
|
|
|
|
16
|
|
|
$
|
138,320
|
|
||
Employee transactions
(2)
|
|
—
|
|
|
|
|
—
|
|
|
|
||||
Total
|
|
16
|
|
|
$
|
13.77
|
|
|
16
|
|
|
|
||
November 1, 2016 - November 30, 2016
|
|
|
|
|
|
|
|
|
||||||
Common stock repurchases
(3)
|
|
18,981
|
|
|
|
|
272
|
|
|
$
|
134,856
|
|
||
Employee transactions
(2)
|
|
26
|
|
|
|
|
—
|
|
|
|
||||
Total
|
|
19,007
|
|
|
$
|
13.67
|
|
|
272
|
|
|
|
||
December 1, 2016 - December 31, 2016
|
|
|
|
|
|
|
|
|
||||||
Common stock repurchases
|
|
—
|
|
|
|
|
—
|
|
|
$
|
134,856
|
|
||
Employee transactions
(2)
|
|
2
|
|
|
|
|
—
|
|
|
|
||||
Total
|
|
2
|
|
|
$
|
13.88
|
|
|
—
|
|
|
|
||
Total
|
|
|
|
|
|
|
|
|
||||||
Common stock repurchases
|
|
18,997
|
|
|
|
|
288
|
|
|
$
|
134,856
|
|
||
Employee transactions
(2)
|
|
29
|
|
|
|
|
—
|
|
|
|
||||
Total
|
|
19,026
|
|
|
$
|
13.67
|
|
|
288
|
|
|
|
Plan Category
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
|
|
Weighted-average exercise
price of outstanding
options, warrants and rights
|
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
|
||||
|
(In thousands, except weighted-average exercise price)
|
||||||||
|
( a )
|
|
( b )
|
|
( c )
|
||||
Equity compensation plans approved by security holders
|
6,298
|
|
|
$
|
18.88
|
|
|
13,221
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
6,298
|
|
|
$
|
18.88
|
|
|
13,221
|
|
Item 6.
|
Selected Financial Data
|
|
For the years ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Consolidated Statements of Operations Data:
|
(In thousands, except per share amounts)
|
||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading revenues, net
|
$
|
668,003
|
|
|
$
|
803,181
|
|
|
$
|
837,357
|
|
|
$
|
628,304
|
|
|
$
|
421,063
|
|
Commissions and fees
|
391,419
|
|
|
376,673
|
|
|
437,022
|
|
|
275,474
|
|
|
105,518
|
|
|||||
Interest, net
|
1,625
|
|
|
(2,128
|
)
|
|
621
|
|
|
(537
|
)
|
|
(2,357
|
)
|
|||||
Investment income and other, net
|
393,365
|
|
|
421,384
|
|
|
41,232
|
|
|
124,095
|
|
|
27,010
|
|
|||||
Total revenues
|
1,454,412
|
|
|
1,599,110
|
|
|
1,316,232
|
|
|
1,027,336
|
|
|
551,234
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Employee compensation and benefits
|
295,120
|
|
|
405,609
|
|
|
437,269
|
|
|
349,192
|
|
|
157,855
|
|
|||||
Execution and clearance fees
|
295,312
|
|
|
265,186
|
|
|
305,177
|
|
|
246,414
|
|
|
185,790
|
|
|||||
Communications and data processing
|
147,986
|
|
|
139,263
|
|
|
150,595
|
|
|
123,552
|
|
|
90,623
|
|
|||||
Depreciation and amortization
|
88,790
|
|
|
90,231
|
|
|
81,448
|
|
|
55,570
|
|
|
34,938
|
|
|||||
Payments for order flow
|
54,765
|
|
|
61,741
|
|
|
70,183
|
|
|
35,711
|
|
|
2,964
|
|
|||||
Collateralized financing interest
|
40,423
|
|
|
34,678
|
|
|
27,860
|
|
|
9,847
|
|
|
—
|
|
|||||
Occupancy and equipment rentals
|
37,875
|
|
|
30,128
|
|
|
32,707
|
|
|
24,812
|
|
|
12,804
|
|
|||||
Debt interest expense
|
37,216
|
|
|
40,291
|
|
|
36,121
|
|
|
38,561
|
|
|
2,665
|
|
|||||
Professional fees
|
19,827
|
|
|
27,055
|
|
|
25,596
|
|
|
46,662
|
|
|
14,072
|
|
|||||
Business development
|
5,324
|
|
|
8,479
|
|
|
9,763
|
|
|
4,609
|
|
|
23
|
|
|||||
Debt extinguishment charges
|
—
|
|
|
25,006
|
|
|
9,552
|
|
|
13,209
|
|
|
—
|
|
|||||
Writedown of assets and other real estate related charges
|
—
|
|
|
56,642
|
|
|
8,625
|
|
|
14,748
|
|
|
—
|
|
|||||
Other
|
35,346
|
|
|
34,839
|
|
|
36,149
|
|
|
39,471
|
|
|
23,073
|
|
|||||
Total expenses
|
1,057,984
|
|
|
1,219,148
|
|
|
1,231,045
|
|
|
1,002,358
|
|
|
524,807
|
|
|||||
Income from continuing operations before income taxes
|
396,428
|
|
|
379,962
|
|
|
85,187
|
|
|
24,978
|
|
|
26,427
|
|
|||||
Income tax expense (benefit)
|
140,731
|
|
|
130,858
|
|
|
22,753
|
|
|
(101,114
|
)
|
|
10,276
|
|
|||||
Income from continuing operations, net of tax
|
255,697
|
|
|
249,104
|
|
|
62,434
|
|
|
126,092
|
|
|
16,151
|
|
|||||
(Loss) income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
(1,332
|
)
|
|
80
|
|
|
—
|
|
|||||
Net income
|
$
|
255,697
|
|
|
$
|
249,104
|
|
|
$
|
61,102
|
|
|
$
|
126,172
|
|
|
$
|
16,151
|
|
Net (loss) income allocated to preferred and participating units
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(21,565
|
)
|
|
$
|
1,092
|
|
Net income attributable to common shareholders
|
$
|
255,697
|
|
|
$
|
249,104
|
|
|
$
|
61,102
|
|
|
$
|
147,737
|
|
|
$
|
15,059
|
|
Basic earnings per common share from continuing operations
|
$
|
3.03
|
|
|
$
|
2.48
|
|
|
$
|
0.55
|
|
|
$
|
1.84
|
|
|
$
|
0.31
|
|
Diluted earnings per common share from continuing operations
|
$
|
2.97
|
|
|
$
|
2.42
|
|
|
$
|
0.54
|
|
|
$
|
1.82
|
|
|
$
|
0.31
|
|
Basic loss per common share from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Diluted loss per common share from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Basic earnings per common share
|
$
|
3.03
|
|
|
$
|
2.48
|
|
|
$
|
0.54
|
|
|
$
|
1.84
|
|
|
$
|
0.31
|
|
Diluted earnings per common share
|
$
|
2.97
|
|
|
$
|
2.42
|
|
|
$
|
0.52
|
|
|
$
|
1.82
|
|
|
$
|
0.31
|
|
Shares used in computation of basic earnings (loss) per common share
|
84,405
|
|
|
100,437
|
|
|
112,854
|
|
|
80,143
|
|
|
48,970
|
|
|||||
Shares used in computation of diluted earnings (loss) per common share
|
86,160
|
|
|
102,922
|
|
|
116,534
|
|
|
81,015
|
|
|
48,970
|
|
|
December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Consolidated Statements of Financial Condition Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
632,234
|
|
|
$
|
581,313
|
|
|
$
|
578,768
|
|
|
$
|
674,281
|
|
|
$
|
427,631
|
|
Financial instruments owned, at fair value
|
2,539,861
|
|
|
2,444,400
|
|
|
2,707,371
|
|
|
2,721,839
|
|
|
654,875
|
|
|||||
Total assets
|
6,261,287
|
|
|
6,040,535
|
|
|
6,821,375
|
|
|
6,976,317
|
|
|
1,687,536
|
|
|||||
Financial instruments sold, not yet purchased, at fair value
|
2,046,140
|
|
|
2,113,404
|
|
|
2,285,707
|
|
|
2,165,500
|
|
|
512,553
|
|
|||||
Debt
|
454,353
|
|
|
484,989
|
|
|
412,980
|
|
|
636,572
|
|
|
15,000
|
|
|||||
Redeemable preferred member's equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
311,139
|
|
|||||
Equity
|
1,357,283
|
|
|
1,444,098
|
|
|
1,522,577
|
|
|
1,509,537
|
|
|
654,672
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Market Making— Our Market Making segment principally consists of market making in the cash, futures and options markets across global equities, options, fixed income, currencies and commodities. As a market maker, we commit capital on a principal basis by offering to buy securities from, or sell securities to, broker dealers, banks and institutions. We engage in principal trading in the Market Making segment direct to clients as well as in a supplemental capacity on exchanges, ECNs and ATSs. We are an active participant on all major global equity and futures exchanges and we also trade on substantially all domestic electronic options exchanges. As a complement to electronic market making, our cash trading business handles specialized orders and also transacts on the OTC Bulletin Board marketplaces operated by the OTC Markets Group Inc. and the AIM.
|
•
|
Global Execution Services— Our Global Execution Services segment comprises agency-based trading and trading venues, offering execution services in global equities, options, futures and fixed income on behalf of institutions, banks and broker dealers. We earn commissions as an agent on behalf of clients as well as between principals to transactions; in addition, we will commit capital on behalf of clients as needed. Agency-based, execution-only trading in the segment is done primarily through a variety of access points including: (i) algorithmic trading and order routing in global equities and options; (ii) institutional sales traders executing program, block and riskless principal trades in global equities and ETFs; (iii) a fixed income ECN that also offers trading applications; and (iv) an ATS for U.S. equities.
|
•
|
Corporate and Other— Our Corporate and Other segment contains our investments, principally in strategic trading-related opportunities; manages the deployment of capital across the organization; houses executive management functions; and maintains corporate overhead expenses and all other income and expenses that are not attributable to our other segments. Our Corporate and Other segment also contains functions that support the Company’s other segments such as self-clearing services, including stock lending activities.
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Market Making
|
|
|
|
|
|
||||||
Revenues
|
$
|
775,173
|
|
|
$
|
884,858
|
|
|
$
|
901,152
|
|
Expenses
|
681,441
|
|
|
760,830
|
|
|
754,439
|
|
|||
Pre-tax earnings
|
93,732
|
|
|
124,028
|
|
|
146,713
|
|
|||
Global Execution Services
|
|
|
|
|
|
||||||
Revenues
|
283,756
|
|
|
667,723
|
|
|
345,710
|
|
|||
Expenses
|
271,748
|
|
|
298,766
|
|
|
334,654
|
|
|||
Pre-tax earnings
|
12,008
|
|
|
368,957
|
|
|
11,056
|
|
|||
Corporate and Other
|
|
|
|
|
|
||||||
Revenues
|
395,483
|
|
|
46,529
|
|
|
69,369
|
|
|||
Expenses
|
104,795
|
|
|
159,552
|
|
|
141,951
|
|
|||
Pre-tax earnings (loss)
|
290,688
|
|
|
(113,023
|
)
|
|
(72,582
|
)
|
|||
Consolidated
|
|
|
|
|
|
||||||
Revenues
|
1,454,412
|
|
|
1,599,110
|
|
|
1,316,232
|
|
|||
Expenses
|
1,057,984
|
|
|
1,219,148
|
|
|
1,231,045
|
|
|||
Pre-tax earnings
|
$
|
396,428
|
|
|
$
|
379,962
|
|
|
$
|
85,187
|
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Reconciliation of Total revenues to Net revenues:
|
|
|
|
|
|
||||||
Total revenues per Consolidated Statements of Operations
|
$
|
1,454,412
|
|
|
$
|
1,599,110
|
|
|
$
|
1,316,232
|
|
Less:
|
|
|
|
|
|
||||||
Execution and clearance fees
|
295,312
|
|
|
265,186
|
|
|
305,177
|
|
|||
Payments for order flow
|
54,765
|
|
|
61,741
|
|
|
70,183
|
|
|||
Collateralized financing interest
|
40,423
|
|
|
34,678
|
|
|
27,860
|
|
|||
Gain from the sale of substantially all of the Company's investment in Bats
|
364,404
|
|
|
—
|
|
|
—
|
|
|||
Gain from the sale of KCG Hotspot
|
—
|
|
|
385,026
|
|
|
—
|
|
|||
Gain on sale of investments
|
—
|
|
|
19,751
|
|
|
—
|
|
|||
Writedown of investments
|
—
|
|
|
(3,224
|
)
|
|
—
|
|
|||
Net gain related to tradeMONSTER combination with OptionsHouse
|
—
|
|
|
—
|
|
|
15,105
|
|
|||
Income resulting from the merger of BATS and Direct Edge, net
|
—
|
|
|
—
|
|
|
9,644
|
|
|||
Gain on sale of FCM
|
—
|
|
|
—
|
|
|
2,116
|
|
|||
Net revenues
|
$
|
699,508
|
|
|
$
|
835,952
|
|
|
$
|
886,147
|
|
•
|
Market Making
— Our pre-tax earnings from Market Making for 2016 was
$93.7 million
, compared to pre-tax earnings of
$124.0 million
for 2015. Results for 2016 were affected by the decline in the performance of our Market Making strategies, both domestically and internationally, which were impacted by lower volumes and volatility offset, in part, by lower expenses. The results for 2015 included a $19.8 million charge related to the acceleration of stock-based compensation as well as a $14.0 million writedown of goodwill.
|
•
|
Global Execution Services
— Our pre-tax earnings from Global Execution Services for 2016 was
$12.0 million
, compared to pre-tax earnings of
$369.0 million
for 2015. The results for 2015 included a $373.8 million net gain from the sale of KCG Hotspot (net of direct costs associated with the sale) and earnings from the operation of KCG Hotspot up until its sale, in March 2015. Results for 2016 reflected improved results from our ETF and fixed income ECN activities.
|
•
|
Corporate and Other
— Our pre-tax earnings from Corporate and Other was
$290.7 million
for 2016, compared to a pre-tax loss of
$113.0 million
for 2015. The results for 2016 included a $364.4 million gain from the sale of substantially all of our investment in Bats. The results for 2015 included a $25.0 million charge related to the early redemption of debt including a contractual make-whole premium and $35.2 million in various real estate charges comprising the accelerated amortization of leasehold improvements for excess real estate in the Jersey City and Chicago offices.
|
•
|
Clients continue to focus on statistics measuring the quality of their executions (including speed of execution and amount of price improvement). In an effort to improve the quality of their executions as well as increase efficiencies, market makers continue to increase the level of sophistication and automation within their operations and the extent of price improvement they provide to their clients. The continued focus on execution quality has resulted in greater price competition in the marketplace, which, along with market structure changes and market conditions, has negatively impacted the performance of our trading models and margin metrics and those of other market making firms.
|
•
|
Market Making and Global Execution Services transaction volumes executed by clients have fluctuated over the past few years due to market conditions, retail and institutional investor sentiment and a variety of other factors. Market Making and Global Execution Services transaction volumes are not predictable and may not be sustainable.
|
•
|
There continues to be growth in electronic trading, including direct market access platforms, algorithmic and program trading, high frequency trading, ECNs, ATSs and dark liquidity pools. In addition, electronic trading continues to expand to other asset classes, including options, currencies and fixed income. The expansion of electronic trading may result in the growth of innovative electronic products and competition for order flow and may further reduce demand for traditional institutional voice services.
|
•
|
Over the past several years, exchanges have become far more competitive, and market participants have created ATSs, ECNs and other execution venues which compete with the OTC and listed trading venues. Initiatives by these and other market participants could draw market share away from the Company, and thus negatively impact our business. In addition, while there is the possibility for consolidation among trading venues, there are many new entrants into the market, including ATSs, Multilateral Trading Facilities, systematic internalizers, dark liquidity pools, high frequency trading firms and market making firms competing for retail and institutional order flow. Some of these new entrants are proposing features that may affect internalization practices and trading strategies of current market participants, and recently, some exchanges have introduced “speed bump” rules and other proposals designed to remove advantages of market participants that have invested in the low latency high speed technology. Further, many broker dealers offer their own internal crossing networks. These factors continue to create further fragmentation and competition in the marketplace.
|
•
|
Market structure changes, competition, market conditions and a steady increase in electronic trading have resulted in a reduction in institutional commission rates and volumes which may continue in the future. Additionally, many institutional clients allocate commissions to broker dealers based not only on the quality of executions, but also in exchange for research or participation in soft dollar and commission recapture programs.
|
•
|
Market structure changes, competition and technology advancements have led to an industry focus on increasing execution speeds and a dramatic increase in electronic message traffic. Increases in execution speeds and message traffic require additional expenditures for technology infrastructure and place heavy strains on the technology resources, bandwidth and capacities of market participants. Additionally, the expansion by market participants into trading of non-equities products offers similar challenges.
|
•
|
There has been increased scrutiny of the capital markets industry by the regulatory and legislative authorities, both in the U.S. and abroad, which could result in increased regulatory costs in the future particularly as it relates to the trading of equities, fixed income, commodities, and currencies. As has been widely reported, there has been an increased focus by securities regulators, federal and state law enforcement agencies, Congress and the media on market structure issues, and, in particular, high frequency trading, best execution, ATS manner of operations, market fragmentation, public disclosures around order types and execution protocols, market structure complexity, colocation, access to market data feeds and remuneration arrangements such as payment for order flow and exchange fee structures. New legislation or new or modified regulations and rules could occur in the future. Members of the U.S. Congress continue to ask the SEC and other regulators to closely review the financial markets regulatory structure and make the changes necessary to insure the rule framework governing the U.S. financial markets is comprehensive and complete. The SEC and other regulators, both in the U.S. and abroad, have adopted and will continue to propose and adopt rules and take other policy actions where necessary, on a variety of marketplace issues – including, but not limited to: high frequency trading, market fragmentation and complexity, transaction taxes, off-exchange trading, dark liquidity pools, internalization, post-trade attribution, colocation, market access, short sales, consolidated audit trails, policies and procedures relating to technology controls and systems, optimal tick sizes, and market volatility rules. The SEC has recently enacted a pilot program for certain securities to increase the minimum trading increment and to include a “trade at” component, requiring that certain of these transactions occur only on an exchange, which could lead to increased costs for certain transactions.
|
•
|
Unique instances of trading volatility impact our businesses. For example, on October 15, 2014, the market for U.S. Treasury securities, futures and other closely related financial markets experienced an unusually high level of volatility. Additionally, on August 24, 2015, the securities markets experienced an unusually high level of volatility that contributed to the delayed opening of securities on primary exchanges, sharp price moves in the major indices and in ETFs, and frequent triggering of trading halts. Market structure changes that may ensue as a result of these events and their effect on the Company are difficult to forecast.
|
•
|
There could be continued fluctuations, including possible substantial increases, in Section 31 fees and fees imposed by other regulators. In addition, clearing corporations are considering various proposals which could require substantial increases in clearing margin, liquidity and collateral requirements, and financial transaction taxes have been introduced in certain jurisdictions and may be introduced in others.
|
•
|
The Dodd-Frank Act affects nearly all financial institutions that operate in the U.S. While the weight of the Dodd-Frank Act falls more heavily on large, complex financial institutions, smaller institutions will continue to face a more complicated and expensive regulatory framework.
|
•
|
The Fiduciary Rule, if implemented, could affect many financial institutions that operate in the U.S. Although the Fiduciary Rule would primarily affect institutions that provide investment advice to retirement plans and accounts, changes that such institutions may make in response to the Fiduciary Rule can have a broader effect.
|
•
|
There has recently been an increased focus and increased sanction levels by regulators on broker-dealers’ controls and surveillance for Anti-Money Laundering and sanctions compliance by broker-dealers and similar entities, as well as an enhanced interest on suspicious activity reporting and transactions involving microcap securities.
|
|
|
For the years ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Revenues
|
|
|
|
|
|
|
|||
Trading revenues, net
|
|
45.9
|
%
|
|
50.2
|
%
|
|
63.6
|
%
|
Commissions and fees
|
|
26.9
|
|
|
23.6
|
|
|
33.2
|
|
Interest, net
|
|
0.1
|
|
|
(0.1
|
)
|
|
0.0
|
|
Investment income and other, net
|
|
27.0
|
|
|
26.4
|
|
|
3.1
|
|
Total revenues
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Expenses
|
|
|
|
|
|
|
|||
Employee compensation and benefits
|
|
20.3
|
%
|
|
25.4
|
%
|
|
33.2
|
%
|
Execution and clearance fees
|
|
20.3
|
|
|
16.6
|
|
|
23.2
|
|
Communications and data processing
|
|
10.2
|
|
|
8.7
|
|
|
11.4
|
|
Depreciation and amortization
|
|
6.1
|
|
|
5.6
|
|
|
6.2
|
|
Payments for order flow
|
|
3.8
|
|
|
3.9
|
|
|
5.3
|
|
Collateralized financing interest
|
|
2.8
|
|
|
2.2
|
|
|
2.1
|
|
Occupancy and equipment rentals
|
|
2.6
|
|
|
1.9
|
|
|
2.5
|
|
Debt interest expense
|
|
2.6
|
|
|
2.5
|
|
|
2.7
|
|
Professional fees
|
|
1.4
|
|
|
1.7
|
|
|
1.9
|
|
Business development
|
|
0.4
|
|
|
0.5
|
|
|
0.7
|
|
Debt extinguishment charges
|
|
0.0
|
|
|
1.6
|
|
|
0.7
|
|
Writedown of assets and other real estate related charges
|
|
0.0
|
|
|
3.5
|
|
|
0.7
|
|
Other
|
|
2.4
|
|
|
2.2
|
|
|
2.7
|
|
Total expenses
|
|
72.7
|
%
|
|
76.2
|
%
|
|
93.5
|
%
|
Income from continuing operations before income taxes
|
|
27.3
|
%
|
|
23.8
|
%
|
|
6.5
|
%
|
Income tax expense
|
|
9.7
|
%
|
|
8.2
|
%
|
|
1.7
|
%
|
Income from continuing operations, net of tax
|
|
17.6
|
%
|
|
15.6
|
%
|
|
4.7
|
%
|
Income (loss) from discontinued operations, net of tax
|
|
0.0
|
%
|
|
0.0
|
%
|
|
-0.1
|
%
|
Net income
|
|
17.6
|
%
|
|
15.6
|
%
|
|
4.6
|
%
|
|
For the years ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|
% of Change
|
|||||||
Trading revenues, net (thousands)
|
$
|
635,515
|
|
|
$
|
767,951
|
|
|
$
|
(132,436
|
)
|
|
(17.2
|
)%
|
Commissions and fees (thousands)
|
140,029
|
|
|
122,516
|
|
|
17,514
|
|
|
14.3
|
%
|
|||
Interest, net and other (thousands)
|
(372
|
)
|
|
(5,609
|
)
|
|
5,237
|
|
|
N/M
|
|
|||
Total revenues from Market Making (thousands)
|
$
|
775,173
|
|
|
$
|
884,858
|
|
|
(109,685
|
)
|
|
(12.4
|
)%
|
|
U.S. equity Market Making statistics:
|
|
|
|
|
|
|
|
|||||||
Average daily dollar volume traded ($ millions)
|
27,887
|
|
|
29,814
|
|
|
(1,927
|
)
|
|
(6.5
|
)%
|
|||
Average daily trades (thousands)
|
3,644
|
|
|
3,797
|
|
|
(153
|
)
|
|
(4.0
|
)%
|
|||
Average daily NYSE and Nasdaq shares traded (millions)
|
1,006
|
|
|
931
|
|
|
75
|
|
|
8.1
|
%
|
|||
Average daily OTC Bulletin Board and OTC Market shares traded (millions)
|
3,920
|
|
|
4,156
|
|
|
(236
|
)
|
|
(5.7
|
)%
|
|||
Average revenue capture per U.S. equity dollar value traded (bps)
|
0.93
|
|
|
0.95
|
|
|
(0.02
|
)
|
|
(2.1
|
)%
|
|
For the years ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|
% of Change
|
|||||||
Commissions and fees (thousands)
|
$
|
251,388
|
|
|
$
|
254,157
|
|
|
$
|
(2,769
|
)
|
|
(1.1
|
)%
|
Trading revenues, net (thousands)
|
35,679
|
|
|
35,121
|
|
|
558
|
|
|
1.6
|
%
|
|||
Interest, net and other (thousands)
|
(3,310
|
)
|
|
378,445
|
|
|
(381,755
|
)
|
|
(100.9
|
)%
|
|||
Total revenues from Global Execution Services (thousands)
|
$
|
283,756
|
|
|
$
|
667,723
|
|
|
(383,966
|
)
|
|
(57.5
|
)%
|
|
Average daily KCG Institutional Equities U.S. equities shares traded (millions)
(1)
|
230.6
|
|
|
230.4
|
|
|
0.2
|
|
|
0.1
|
%
|
|||
Average daily KCG BondPoint fixed income par value traded ($ millions)
|
201.7
|
|
|
141.1
|
|
|
60.6
|
|
|
42.9
|
%
|
(1)
|
KCG Institutional Equities average daily U.S. National Market System (NMS) equity share volume represents trading on behalf of clients covering algorithmic trading and high touch sales trading in single stocks, ETFs and programs. In 2016, KCG modified the reporting of trading volumes within the Global Execution Services segment to remove internal volume generated by KCG trading desks and add volume from sales trading. Prior periods have been recast for this new presentation.
|
|
For the years ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|
% of Change
|
|||||||
Total revenues from Corporate and Other (thousands)
|
$
|
395,485
|
|
|
$
|
46,529
|
|
|
$
|
348,956
|
|
|
750.0
|
%
|
|
For the years ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
% of Change
|
|||||||
Trading revenues, net (thousands)
|
$
|
767,951
|
|
|
$
|
809,371
|
|
|
$
|
(41,420
|
)
|
|
(5.1
|
)%
|
Commissions and fees (thousands)
|
122,516
|
|
|
117,058
|
|
|
5,458
|
|
|
4.7
|
%
|
|||
Interest, net and other (thousands)
|
(5,609
|
)
|
|
(25,277
|
)
|
|
19,669
|
|
|
N/M
|
|
|||
Total revenues from Market Making (thousands)
|
$
|
884,858
|
|
|
$
|
901,152
|
|
|
(16,294
|
)
|
|
(1.8
|
)%
|
|
U.S. equity Market Making statistics:
|
|
|
|
|
|
|
|
|||||||
Average daily dollar volume traded ($ millions)
|
29,814
|
|
|
27,197
|
|
|
2,617
|
|
|
9.6
|
%
|
|||
Average daily trades (thousands)
|
3,797
|
|
|
3,732
|
|
|
65
|
|
|
1.7
|
%
|
|||
Average daily NYSE and Nasdaq shares traded (millions)
|
931
|
|
|
820
|
|
|
111
|
|
|
13.5
|
%
|
|||
Average daily OTC Bulletin Board and OTC Market shares traded (millions)
|
4,156
|
|
|
8,317
|
|
|
(4,161
|
)
|
|
(50.0
|
)%
|
|||
Average revenue capture per U.S. equity dollar value traded (bps)
|
0.95
|
|
|
1.00
|
|
|
(0.05
|
)
|
|
(5.0
|
)%
|
|
For the years ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
% of Change
|
|||||||
Commissions and fees (thousands)
|
$
|
254,157
|
|
|
$
|
319,964
|
|
|
$
|
(65,807
|
)
|
|
(20.6
|
)%
|
Trading revenues, net (thousands)
|
35,121
|
|
|
28,355
|
|
|
6,766
|
|
|
23.9
|
%
|
|||
Interest, net and other (thousands)
|
378,445
|
|
|
(2,609
|
)
|
|
381,054
|
|
|
N/M
|
|
|||
Total revenues from Global Execution Services (thousands)
|
$
|
667,723
|
|
|
$
|
345,710
|
|
|
322,013
|
|
|
93.1
|
%
|
|
Average daily KCG algorithmic trading and order routing U.S. equities shares traded (millions)
(1)
|
230.4
|
|
|
245.5
|
|
|
(15.1
|
)
|
|
(6.2
|
)%
|
|||
Average daily KCG BondPoint fixed income par value traded ($ millions)
|
141.1
|
|
|
133.6
|
|
|
7.5
|
|
|
5.6
|
%
|
(1)
|
KCG Institutional Equities average daily U.S. NMS equity share volume represents trading on behalf of clients covering algorithmic trading
|
|
For the years ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
% of Change
|
|||||||
Total revenues from Corporate and Other (thousands)
|
$
|
46,529
|
|
|
$
|
69,369
|
|
|
$
|
(22,840
|
)
|
|
(32.9
|
)%
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Cash and cash equivalents
|
$
|
632,234
|
|
|
$
|
581,313
|
|
Financial instruments owned, at fair value:
|
|
|
|
||||
Equities
|
2,343,033
|
|
|
2,129,208
|
|
||
Debt Securities
|
177,698
|
|
|
136,387
|
|
||
Listed Options
|
19,100
|
|
|
178,360
|
|
||
Collateralized agreements:
|
|
|
|
||||
Securities borrowed
|
1,688,222
|
|
|
1,636,284
|
|
||
Receivable from brokers, dealers and clearing organizations
(1)
|
641,257
|
|
|
571,222
|
|
||
Total cash and assets readily convertible to cash
|
$
|
5,501,544
|
|
|
$
|
5,232,774
|
|
(1)
|
Excludes
$191.5 million
and
$110.0 million
of securities failed to deliver as of
December 31, 2016
and
December 31, 2015
, respectively.
|
|
For the years ended ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
119,552
|
|
|
$
|
12,984
|
|
|
$
|
242,524
|
|
Investing activities
|
62,465
|
|
|
328,478
|
|
|
11,472
|
|
|||
Financing activities
|
(130,231
|
)
|
|
(337,336
|
)
|
|
(349,925
|
)
|
|
|
Net Capital
|
|
Net Capital
Requirement |
|
Excess Net
Capital |
||||||
KCG Americas LLC
|
|
$
|
342,919
|
|
|
$
|
1,000
|
|
|
$
|
341,919
|
|
|
|
Financial
Resources
|
|
Resource
Requirement
|
|
Excess
Financial
Resources
|
||||||
KCG Europe Limited
|
|
$
|
140,797
|
|
|
$
|
111,101
|
|
|
$
|
29,696
|
|
(1)
|
See Footnote 11, “Debt” included in Part II, Item 8. "Financial Statements and Supplementary Data" of this Form 10-K for further information.
|
(2)
|
See Footnote 21, “Commitments and Contingent Liabilities” included in Part II, Item 8. "Financial Statements and Supplementary Data" of this Form 10-K for further information.
|
•
|
Level 1-Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
|
•
|
Level 2-Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
|
•
|
Level 3-Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
•
|
the inability to manage trading strategy performance and grow revenues and earnings;
|
•
|
changes in market structure, legislative, regulatory or financial reporting rules, including the increased focus by Congress, federal and state regulators, the SROs 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;
|
•
|
future changes to our organizational structure and management;
|
•
|
our ability to develop competitive new products and services in a timely manner and the acceptance of such products and services by our customers and potential customers;
|
•
|
our ability to keep up with technological changes;
|
•
|
our ability to effectively identify and manage market risk, operational and technology risk, cybersecurity risk, legal risk, liquidity risk, reputational risk, counterparty and credit risk, international risk, regulatory risk, and compliance risk;
|
•
|
the effects of increased competition and our ability to maintain and expand market share;
|
•
|
changes in discount and growth rates used by us in our fair value models; and
|
•
|
our ability to manage our costs.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
Aggregate of
Long and Short
Positions
|
|
Net of Long
and Short
Positions
|
|
Aggregate of
Long and Short
Positions
|
|
Net of Long
and Short
Positions
|
|
Aggregate of
Long and Short
Positions
|
|
Net of Long
and Short
Positions
|
||||||||||||
Average month-end
|
$
|
4,818,070
|
|
|
$
|
476,175
|
|
|
$
|
5,050,512
|
|
|
$
|
415,058
|
|
|
$
|
5,155,626
|
|
|
$
|
431,355
|
|
Highest month-end
|
5,397,378
|
|
|
758,114
|
|
|
5,862,353
|
|
|
691,202
|
|
|
5,901,615
|
|
|
805,837
|
|
||||||
Lowest month-end
|
4,363,099
|
|
|
173,895
|
|
|
4,556,914
|
|
|
98,204
|
|
|
4,671,405
|
|
|
40,708
|
|
|
December 31,
2016 |
|
December 31, 2015
|
||||
Liquidity Pool Composition
|
|
|
|
||||
Holding company
|
|
|
|
||||
Cash held at banks
|
$
|
3,674
|
|
|
$
|
3,283
|
|
Money market and other highly liquid investments
|
366,208
|
|
|
330,698
|
|
||
KCGA
|
|
|
|
||||
Cash held at banks
|
28,891
|
|
|
28,485
|
|
||
Money market and other highly liquid investments
|
121,109
|
|
|
121,515
|
|
||
Total Liquidity Pool
|
$
|
519,882
|
|
|
$
|
483,981
|
|
Cash and other highly liquid investments held by other subsidiary entities
|
$
|
78,205
|
|
|
$
|
73,779
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Page
|
Management’s Report on Internal Control over Financial Reporting
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Statements of Financial Condition as of December 31, 2016 and 2015
|
|
Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Changes in Equity for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014
|
|
Notes to Consolidated Financial Statements
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of KCG;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of KCG; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
|
|
December 31,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
Assets
|
(In thousands)
|
||||||
Cash and cash equivalents
|
$
|
632,234
|
|
|
$
|
581,313
|
|
Cash and cash equivalents segregated under federal and other regulations
|
3,000
|
|
|
3,000
|
|
||
Financial instruments owned, at fair value, including securities pledged to counterparties that had the right to deliver or repledge of $314,720 at December 31, 2016 and $324,146 at December 31, 2015:
|
|
|
|
||||
Equities
|
2,343,033
|
|
|
2,129,208
|
|
||
Debt securities
|
177,698
|
|
|
136,387
|
|
||
Listed options
|
19,100
|
|
|
178,360
|
|
||
Other financial instruments
|
30
|
|
|
445
|
|
||
Total financial instruments owned, at fair value
|
2,539,861
|
|
|
2,444,400
|
|
||
Collateralized agreements:
|
|
|
|
||||
Securities borrowed
|
1,688,222
|
|
|
1,636,284
|
|
||
Receivable from brokers, dealers and clearing organizations
|
832,785
|
|
|
681,211
|
|
||
Fixed assets and leasehold improvements, less accumulated depreciation and amortization
|
151,645
|
|
|
94,858
|
|
||
Investments
|
30,979
|
|
|
98,943
|
|
||
Goodwill and Intangible assets, less accumulated amortization
|
100,338
|
|
|
100,471
|
|
||
Deferred tax asset, net
|
109,861
|
|
|
151,225
|
|
||
Assets of businesses held for sale
|
8,194
|
|
|
25,999
|
|
||
Other assets
|
164,168
|
|
|
222,831
|
|
||
Total assets
|
$
|
6,261,287
|
|
|
$
|
6,040,535
|
|
Liabilities and equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Financial instruments sold, not yet purchased, at fair value:
|
|
|
|
||||
Equities
|
$
|
1,821,957
|
|
|
$
|
1,856,171
|
|
Debt securities
|
211,222
|
|
|
105,340
|
|
||
Listed options
|
12,961
|
|
|
151,893
|
|
||
Total financial instruments sold, not yet purchased, at fair value
|
2,046,140
|
|
|
2,113,404
|
|
||
Collateralized financings:
|
|
|
|
||||
Securities loaned
|
372,631
|
|
|
463,377
|
|
||
Financial instruments sold under agreements to repurchase
|
1,027,775
|
|
|
954,902
|
|
||
Other collateralized financings
|
100,000
|
|
|
—
|
|
||
Total collateralized financings
|
1,500,406
|
|
|
1,418,279
|
|
||
Payable to brokers, dealers and clearing organizations
|
518,900
|
|
|
273,805
|
|
||
Payable to customers
|
23,580
|
|
|
17,387
|
|
||
Accrued compensation expense
|
132,406
|
|
|
154,547
|
|
||
Accrued expenses and other liabilities
|
156,828
|
|
|
134,026
|
|
||
Income taxes payable
|
71,391
|
|
|
—
|
|
||
Debt
|
454,353
|
|
|
484,989
|
|
||
Total liabilities
|
4,904,004
|
|
|
4,596,437
|
|
||
Commitments and Contingent Liabilities (Note 21)
|
|
|
|
|
|
||
Equity
|
|
|
|
||||
Class A Common Stock
|
|
|
|
||||
Shares authorized: 1,000,000 at December 31, 2016 and December 31, 2015; Shares issued: 90,309 at December 31, 2016 and 106,025 at December 31, 2015; Shares outstanding: 67,192 at December 31, 2016 and 90,156 at December 31, 2015
|
903
|
|
|
1,060
|
|
||
Additional paid-in capital
|
1,439,412
|
|
|
1,436,671
|
|
||
Retained earnings
|
192,064
|
|
|
192,120
|
|
||
Treasury stock, at cost; 23,116 shares at December 31, 2016 and 15,869 shares at December 31, 2015
|
(277,343
|
)
|
|
(186,103
|
)
|
||
Accumulated other comprehensive income
|
2,247
|
|
|
350
|
|
||
Total equity
|
1,357,283
|
|
|
1,444,098
|
|
||
Total liabilities and equity
|
$
|
6,261,287
|
|
|
$
|
6,040,535
|
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands, except per share amounts)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Trading revenues, net
|
$
|
668,003
|
|
|
$
|
803,181
|
|
|
$
|
837,357
|
|
Commissions and fees
|
391,419
|
|
|
376,673
|
|
|
437,022
|
|
|||
Interest, net
|
1,625
|
|
|
(2,128
|
)
|
|
621
|
|
|||
Investment income and other, net
|
393,365
|
|
|
421,384
|
|
|
41,232
|
|
|||
Total revenues
|
1,454,412
|
|
|
1,599,110
|
|
|
1,316,232
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
295,120
|
|
|
405,609
|
|
|
437,269
|
|
|||
Execution and clearance fees
|
295,312
|
|
|
265,186
|
|
|
305,177
|
|
|||
Communications and data processing
|
147,986
|
|
|
139,263
|
|
|
150,595
|
|
|||
Depreciation and amortization
|
88,790
|
|
|
90,231
|
|
|
81,448
|
|
|||
Payments for order flow
|
54,765
|
|
|
61,741
|
|
|
70,183
|
|
|||
Collateralized financing interest
|
40,423
|
|
|
34,678
|
|
|
27,860
|
|
|||
Occupancy and equipment rentals
|
37,875
|
|
|
30,128
|
|
|
32,707
|
|
|||
Debt interest expense
|
37,216
|
|
|
40,291
|
|
|
36,121
|
|
|||
Professional fees
|
19,827
|
|
|
27,055
|
|
|
25,596
|
|
|||
Business development
|
5,324
|
|
|
8,479
|
|
|
9,763
|
|
|||
Debt extinguishment charges
|
—
|
|
|
25,006
|
|
|
9,552
|
|
|||
Writedown of assets and other real estate related charges
|
—
|
|
|
56,642
|
|
|
8,625
|
|
|||
Other
|
35,346
|
|
|
34,839
|
|
|
36,149
|
|
|||
Total expenses
|
1,057,984
|
|
|
1,219,148
|
|
|
1,231,045
|
|
|||
Income from continuing operations before income taxes
|
396,428
|
|
|
379,962
|
|
|
85,187
|
|
|||
Income tax expense
|
140,731
|
|
|
130,858
|
|
|
22,753
|
|
|||
Income from continuing operations, net of tax
|
255,697
|
|
|
249,104
|
|
|
62,434
|
|
|||
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
(1,332
|
)
|
|||
Net income
|
$
|
255,697
|
|
|
$
|
249,104
|
|
|
$
|
61,102
|
|
Basic earnings per share from continuing operations
|
$
|
3.03
|
|
|
$
|
2.48
|
|
|
$
|
0.55
|
|
Diluted earnings per share from continuing operations
|
$
|
2.97
|
|
|
$
|
2.42
|
|
|
$
|
0.54
|
|
Basic loss per share from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
Diluted loss per share from discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
Basic earnings per share
|
$
|
3.03
|
|
|
$
|
2.48
|
|
|
$
|
0.54
|
|
Diluted earnings per share
|
$
|
2.97
|
|
|
$
|
2.42
|
|
|
$
|
0.52
|
|
Shares used in computation of basic earnings per share
|
84,405
|
|
|
100,437
|
|
|
112,854
|
|
|||
Shares used in computation of diluted earnings per share
|
86,160
|
|
|
102,922
|
|
|
116,534
|
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Net income
|
$
|
255,697
|
|
|
$
|
249,104
|
|
|
$
|
61,102
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Unrealized gain (loss) on available for sale securities, net of tax
|
3,136
|
|
|
(202
|
)
|
|
316
|
|
|||
Cumulative translation adjustment, net of tax
|
(1,239
|
)
|
|
(1,581
|
)
|
|
416
|
|
|||
Comprehensive income
|
$
|
257,594
|
|
|
$
|
247,321
|
|
|
$
|
61,834
|
|
|
|
Class A Common
Stock
|
|
|
|
|
|
Treasury Stock
|
|
|
|
|
||||||||||||||||||
(in thousands)
|
|
Shares
|
|
Amount
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Shares
|
|
Amount
|
|
Accumulated
other
comprehensive
income
|
|
Total
Equity
|
||||||||||||||
Balance, January 1, 2014
|
|
123,317
|
|
|
$
|
1,233
|
|
|
$
|
1,306,549
|
|
|
$
|
211,678
|
|
|
(1,079
|
)
|
|
$
|
(11,324
|
)
|
|
$
|
1,401
|
|
|
$
|
1,509,537
|
|
KCG Class A Common Stock repurchased
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,570
|
)
|
|
(111,585
|
)
|
|
—
|
|
|
(111,585
|
)
|
||||||
Stock-based compensation
|
|
4,191
|
|
|
42
|
|
|
61,865
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,907
|
|
||||||
Income tax provision-stock based compensation
|
|
—
|
|
|
—
|
|
|
884
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
884
|
|
||||||
Unrealized gain on available for sale securities, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|
316
|
|
||||||
Cumulative translation adjustment, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
416
|
|
|
416
|
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,102
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,102
|
|
||||||
Balance, December 31, 2014
|
|
127,508
|
|
|
1,275
|
|
|
1,369,298
|
|
|
272,780
|
|
|
(10,649
|
)
|
|
(122,909
|
)
|
|
2,133
|
|
|
1,522,577
|
|
||||||
KCG Class A Common Stock repurchased and retired via Tender Offer
|
|
(23,571
|
)
|
|
(236
|
)
|
|
—
|
|
|
(329,764
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(330,000
|
)
|
||||||
KCG Class A Common Stock repurchased
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,220
|
)
|
|
(63,194
|
)
|
|
—
|
|
|
(63,194
|
)
|
||||||
Stock-based compensation and Options & Warrants exercised
|
|
2,088
|
|
|
21
|
|
|
69,167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69,188
|
|
||||||
Income tax provision-stock based compensation
|
|
—
|
|
|
—
|
|
|
2,647
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,647
|
|
||||||
Warrants repurchased
|
|
—
|
|
|
—
|
|
|
(4,441
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,441
|
)
|
||||||
Unrealized loss on available for sale securities, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(202
|
)
|
|
(202
|
)
|
||||||
Cumulative translation adjustment, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,581
|
)
|
|
(1,581
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249,104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249,104
|
|
||||||
Balance, December 31, 2015
|
|
106,025
|
|
|
$
|
1,060
|
|
|
$
|
1,436,671
|
|
|
$
|
192,120
|
|
|
(15,869
|
)
|
|
$
|
(186,103
|
)
|
|
$
|
350
|
|
|
$
|
1,444,098
|
|
KCG Class A Common Stock repurchased and retired and Warrants repurchased via GA swap
|
|
(18,709
|
)
|
|
(187
|
)
|
|
(22,100
|
)
|
|
(255,753
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(278,040
|
)
|
||||||
KCG Class A Common Stock repurchased
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,247
|
)
|
|
(91,240
|
)
|
|
—
|
|
|
(91,240
|
)
|
||||||
Stock-based compensation and Options & Warrants exercised
|
|
2,993
|
|
|
30
|
|
|
39,338
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,368
|
|
||||||
Income tax provision-stock based compensation
|
|
—
|
|
|
—
|
|
|
1,412
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,412
|
|
||||||
Warrants repurchased
|
|
—
|
|
|
—
|
|
|
(15,909
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,909
|
)
|
||||||
Unrealized gain on available for sale securities, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,136
|
|
|
3,136
|
|
||||||
Cumulative translation adjustment, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,239
|
)
|
|
(1,239
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
255,697
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
255,697
|
|
||||||
Balance, December 31, 2016
|
|
90,309
|
|
|
$
|
903
|
|
|
$
|
1,439,412
|
|
|
$
|
192,064
|
|
|
(23,116
|
)
|
|
$
|
(277,343
|
)
|
|
$
|
2,247
|
|
|
$
|
1,357,283
|
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities
|
(In thousands)
|
||||||||||
Net income
|
$
|
255,697
|
|
|
$
|
249,104
|
|
|
$
|
61,102
|
|
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
(1,332
|
)
|
|||
Income from continuing operations, net of tax
|
255,697
|
|
|
249,104
|
|
|
62,434
|
|
|||
Adjustments to reconcile Income from continuing operations, net of tax to net cash provided by operating activities
|
|
|
|
|
|
||||||
Realized gain on sale of KCG Hotspot
|
—
|
|
|
(385,026
|
)
|
|
—
|
|
|||
Realized gain from the sale of substantially all of the investment in Bats
|
(364,404
|
)
|
|
—
|
|
|
—
|
|
|||
Depreciation and amortization
|
88,790
|
|
|
90,231
|
|
|
81,448
|
|
|||
Stock and unit-based compensation
|
20,459
|
|
|
84,663
|
|
|
58,940
|
|
|||
Realized gain on sale of assets and investments
|
(2,798
|
)
|
|
(19,751
|
)
|
|
—
|
|
|||
Unrealized gain on investments
|
(11,715
|
)
|
|
(10,173
|
)
|
|
(36,456
|
)
|
|||
Deferred taxes
|
41,363
|
|
|
9,976
|
|
|
19,397
|
|
|||
Writedown of assets and other real estate related charges
|
—
|
|
|
56,642
|
|
|
8,625
|
|
|||
Other
|
11,984
|
|
|
12,305
|
|
|
12,958
|
|
|||
(Increase) decrease in operating assets
|
|
|
|
|
|
||||||
Cash and cash equivalents segregated under federal and other regulations
|
—
|
|
|
361
|
|
|
(54,955
|
)
|
|||
Financial instruments owned, at fair value
|
(95,461
|
)
|
|
265,763
|
|
|
14,468
|
|
|||
Securities borrowed
|
(50,443
|
)
|
|
(4,223
|
)
|
|
(274,675
|
)
|
|||
Receivable from brokers, dealers and clearing organizations
|
(142,608
|
)
|
|
507,623
|
|
|
(321,087
|
)
|
|||
Other assets
|
39,312
|
|
|
(26,340
|
)
|
|
(6,459
|
)
|
|||
Increase (decrease) in operating liabilities
|
|
|
|
|
|
||||||
Financial instruments sold, not yet purchased, at fair value
|
(67,265
|
)
|
|
(172,302
|
)
|
|
120,207
|
|
|||
Securities loaned
|
(90,745
|
)
|
|
(244,368
|
)
|
|
(25,486
|
)
|
|||
Financial instruments sold under agreements to repurchase
|
72,873
|
|
|
21,327
|
|
|
292,625
|
|
|||
Other collateralized financing
|
100,000
|
|
|
—
|
|
|
—
|
|
|||
Payable to brokers, dealers and clearing organizations
|
239,292
|
|
|
(402,285
|
)
|
|
268,563
|
|
|||
Payable to customers
|
5,816
|
|
|
(4,724
|
)
|
|
92,096
|
|
|||
Accrued compensation expense
|
(7,317
|
)
|
|
21,726
|
|
|
(29,536
|
)
|
|||
Accrued expenses and other liabilities
|
(12,301
|
)
|
|
(37,545
|
)
|
|
(40,583
|
)
|
|||
Income taxes payable
|
89,023
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by operating activities
|
119,552
|
|
|
12,984
|
|
|
242,524
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Cash received from sale of substantially all of the investment in Bats
|
170,258
|
|
|
—
|
|
|
—
|
|
|||
Cash received from sale of KCG Hotspot, net of cash provided
|
6,552
|
|
|
360,928
|
|
|
—
|
|
|||
Cash received from sale of Futures Commission Merchant
|
—
|
|
|
—
|
|
|
2,000
|
|
|||
Cash received from sale of assets
|
21,220
|
|
|
—
|
|
|
554
|
|
|||
Cash received from sale of investments and redemptions from investments
|
6,691
|
|
|
34,620
|
|
|
58,660
|
|
|||
Purchases of fixed assets and leasehold improvements
|
(102,130
|
)
|
|
(34,581
|
)
|
|
(34,139
|
)
|
|||
Capitalization of software development costs
|
(31,998
|
)
|
|
(24,530
|
)
|
|
(14,859
|
)
|
|||
Purchases of investments
|
(5,877
|
)
|
|
(7,959
|
)
|
|
(744
|
)
|
|||
Purchase of business, net of cash acquired
|
(2,251
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by investing activities
|
62,465
|
|
|
328,478
|
|
|
11,472
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Repurchase of 6.875% Senior Secured Notes
|
(30,288
|
)
|
|
—
|
|
|
—
|
|
|||
Repayment of 8.25% Senior Secured Notes
|
—
|
|
|
(305,000
|
)
|
|
—
|
|
|||
Repayment of convertible notes
|
—
|
|
|
(117,259
|
)
|
|
—
|
|
|||
Payment of debt issuance costs
|
—
|
|
|
(12,645
|
)
|
|
—
|
|
|||
Borrowings under capital lease obligations
|
7,497
|
|
|
—
|
|
|
5,892
|
|
|||
Principal payments on capital lease obligations
|
(2,056
|
)
|
|
(4,033
|
)
|
|
(9,232
|
)
|
|||
Cost of common stock repurchased - Tender Offer
|
—
|
|
|
(330,000
|
)
|
|
—
|
|
|||
Cost of common stock repurchased
|
(91,240
|
)
|
|
(63,194
|
)
|
|
(111,585
|
)
|
|||
Stock options exercised
|
353
|
|
|
1,247
|
|
|
—
|
|
|||
Warrants exercised
|
—
|
|
|
532
|
|
|
—
|
|
|||
Cost of warrants repurchased
|
(15,909
|
)
|
|
(4,441
|
)
|
|
—
|
|
|||
Income tax provision on stock awards exercised
|
1,412
|
|
|
2,647
|
|
|
—
|
|
|||
Proceeds from issuance of 6.875% Senior Secured Notes
|
—
|
|
|
494,810
|
|
|
—
|
|
|||
Partial repayment of Credit Agreement
|
—
|
|
|
—
|
|
|
(235,000
|
)
|
|||
Net cash used in financing activities
|
(130,231
|
)
|
|
(337,336
|
)
|
|
(349,925
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(865
|
)
|
|
(1,581
|
)
|
|
416
|
|
|||
(Decrease) Increase in cash and cash equivalents
|
50,921
|
|
|
2,545
|
|
|
(95,513
|
)
|
|||
Cash and cash equivalents at beginning of period
|
581,313
|
|
|
578,768
|
|
|
674,281
|
|
|||
Cash and cash equivalents at end of period
|
$
|
632,234
|
|
|
$
|
581,313
|
|
|
$
|
578,768
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
81,766
|
|
|
$
|
81,349
|
|
|
$
|
76,003
|
|
Cash paid for income taxes
|
$
|
16,200
|
|
|
$
|
124,461
|
|
|
$
|
16,975
|
|
Non-cash investing activities - Contribution of fixed assets to joint venture
|
$
|
353
|
|
|
$
|
3,370
|
|
|
$
|
—
|
|
Non-cash investing activities - Purchases of fixed assets and leasehold improvements that were paid for subsequent to year end
|
$
|
10,272
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash investing activities - Compensation capitalized for internal use software that was paid subsequent to year end
|
$
|
3,494
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash financing activities - KCG Class A Common Stock and Warrants repurchased via GA Swap - See Footnote 9 "Investments"
|
$
|
275,113
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
|
•
|
Level 2—Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
|
•
|
Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
•
|
Securities borrowed and securities loaned transactions are recorded at the amount of cash collateral advanced or received. Securities borrowed transactions facilitate the securities settlement process and require the Company to deposit cash or other collateral with the lender. Securities loaned transactions help finance the Company’s securities inventory whereby the Company lends stock to counterparties in exchange for the receipt of cash or other collateral from the borrower. In these transactions, the Company receives or posts cash or other collateral in an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of securities borrowed or loaned on a daily basis, and obtains additional collateral or refunds excess collateral as necessary.
|
•
|
Financial instruments sold under agreements to repurchase and other collateralized financings are used to finance inventories of securities and other financial instruments and are recorded at their contractual amount.
|
•
|
the inability to manage trading strategy performance and grow revenues and earnings;
|
•
|
changes in market structure, legislative, regulatory or financial reporting rules, including the increased focus by Congress, federal and state regulators, the self-regulatory organizations 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;
|
•
|
future changes to the Company’s organizational structure and management;
|
•
|
the Company’s ability to develop competitive new products and services in a timely manner and the acceptance of such products and services by the Company’s customers and potential customers;
|
•
|
the Company’s ability to keep up with technological changes;
|
•
|
the Company’s ability to effectively identify and manage market risk, operational and technology risk, cybersecurity risk, legal risk, liquidity risk, reputational risk, counterparty and credit risk, international risk, regulatory risk, and compliance risk;
|
•
|
the effects of increased competition and the Company’s ability to maintain and expand market share;
|
•
|
changes in discount and growth rates used by the Company in its fair value models; and
|
•
|
the Company's ability to manage its costs.
|
|
|
Carrying Amount
|
|
Maximum Exposure to loss
|
|
|
||||||||||
|
|
Asset
|
|
Liability
|
|
|
VIEs' assets
|
|||||||||
Equity investment
|
|
$
|
14,822
|
|
|
$
|
500
|
|
|
$
|
14,822
|
|
|
$
|
36,715
|
|
|
For the year ended December 31, 2014
|
||
Revenues and gain (adjustment to gain) on sale
|
$
|
(1,148
|
)
|
|
|
||
Expenses:
|
|
||
Compensation
|
$
|
70
|
|
Other expenses
|
930
|
|
|
Total expenses
|
1,000
|
|
|
Pre-tax loss from discontinued operations
|
(2,148
|
)
|
|
Income tax benefit
|
816
|
|
|
Loss from discontinued operations, net of tax
|
$
|
(1,332
|
)
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Assets:
|
|
|
|
||||
Intangible assets, net of accumulated amortization
|
$
|
8,194
|
|
|
$
|
25,999
|
|
Total assets of businesses held for sale
|
$
|
8,194
|
|
|
$
|
25,999
|
|
|
|
Assets and Liabilities Measured at
Fair Value on a Recurring Basis
|
||||||||||||||
December 31, 2016
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Financial instruments owned, at fair value:
|
|
|
|
|
|
|
|
|
||||||||
Equities
|
|
$
|
2,343,033
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,343,033
|
|
Corporate debt
|
|
127,237
|
|
|
—
|
|
|
—
|
|
|
127,237
|
|
||||
U.S. government and Non-U.S. government obligations
|
|
50,461
|
|
|
—
|
|
|
—
|
|
|
50,461
|
|
||||
Listed options
|
|
19,100
|
|
|
—
|
|
|
—
|
|
|
19,100
|
|
||||
Foreign currency forward contracts
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
||||
Total Financial instruments owned, at fair value
|
|
2,539,831
|
|
|
30
|
|
|
—
|
|
|
2,539,861
|
|
||||
Investments
(1)
|
|
9,198
|
|
|
—
|
|
|
—
|
|
|
9,198
|
|
||||
Other
(2)
|
|
—
|
|
|
62,824
|
|
|
2,846
|
|
|
65,670
|
|
||||
Total assets held at fair value
|
|
$
|
2,549,029
|
|
|
$
|
62,854
|
|
|
$
|
2,846
|
|
|
$
|
2,614,729
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Financial instruments sold, not yet purchased, at fair value:
|
|
|
|
|
|
|
|
|
||||||||
Equities
|
|
$
|
1,821,957
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,821,957
|
|
Corporate debt
|
|
123,561
|
|
|
—
|
|
|
—
|
|
|
123,561
|
|
||||
U.S. government and Non-U.S. government obligations
|
|
87,661
|
|
|
—
|
|
|
—
|
|
|
87,661
|
|
||||
Listed options
|
|
12,961
|
|
|
—
|
|
|
—
|
|
|
12,961
|
|
||||
Total liabilities held at fair value
|
|
$
|
2,046,140
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,046,140
|
|
(1)
|
Investments comprise our investments in CME Group and Bats and are included within Investments on the Consolidated Statements of Financial Condition. See Footnote 9 "Investments" for additional information.
|
(2)
|
Other primarily consists of a
$60.5 million
receivable from Bats related to the sale of KCG Hotspot and a
$2.8 million
receivable from the sale of an investment, both of which are included within Other Assets, and
$2.3 million
primarily related to deferred compensation investments which is included within Investments on the Consolidated Statements of Financial Condition.
|
|
|
Assets and Liabilities Measured at
Fair Value on a Recurring Basis
|
||||||||||||||
December 31, 2015
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Financial instruments owned, at fair value:
|
|
|
|
|
|
|
|
|
||||||||
Equities
|
|
$
|
2,129,208
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,129,208
|
|
Listed options
|
|
178,360
|
|
|
—
|
|
|
—
|
|
|
178,360
|
|
||||
U.S. government and Non-U.S. government obligations
|
|
41,706
|
|
|
—
|
|
|
—
|
|
|
41,706
|
|
||||
Corporate debt
|
|
94,681
|
|
|
—
|
|
|
—
|
|
|
94,681
|
|
||||
Foreign currency forward contracts
|
|
—
|
|
|
445
|
|
|
—
|
|
|
445
|
|
||||
Total Financial instruments owned, at fair value
|
|
2,443,955
|
|
|
445
|
|
|
—
|
|
|
2,444,400
|
|
||||
Investment in CME Group
(1)
|
|
1,814
|
|
|
—
|
|
|
—
|
|
|
1,814
|
|
||||
Other
(2)
|
|
—
|
|
|
65,732
|
|
|
5,789
|
|
|
71,521
|
|
||||
Total assets held at fair value
|
|
$
|
2,445,769
|
|
|
$
|
66,177
|
|
|
$
|
5,789
|
|
|
$
|
2,517,735
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Financial instruments sold, not yet purchased, at fair value:
|
|
|
|
|
|
|
|
|
||||||||
Equities
|
|
$
|
1,856,171
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,856,171
|
|
Listed options
|
|
151,893
|
|
|
—
|
|
|
—
|
|
|
151,893
|
|
||||
U.S. government obligations
|
|
21,056
|
|
|
—
|
|
|
—
|
|
|
21,056
|
|
||||
Corporate debt
|
|
84,284
|
|
|
—
|
|
|
—
|
|
|
84,284
|
|
||||
Total liabilities held at fair value
|
|
$
|
2,113,404
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,113,404
|
|
(1)
|
Investment in CME Group is included within Investments on the Consolidated Statements of Financial Condition. See Footnote 9 "Investments" for additional information.
|
(2)
|
Other primarily consists of a
$64.2 million
receivable from Bats related to the sale of KCG Hotspot and a
$5.8 million
receivable from the sale of an investment, both of which are included in Other assets, and
$1.5 million
primarily related to deferred compensation investments which is included within Investments on the Consolidated Statements of Financial Condition.
|
|
Level 3 Financial Assets for the year ended December 31, 2016
|
||||||||||||||||||||||||||||||||||
|
Balance at January
1, 2016
|
|
Realized gains(losses) during period
|
|
Unrealized gains (losses) during the period
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Issuances
|
|
Transfers in or (out) of Level 3
|
|
Balance at December 31, 2016
|
||||||||||||||||||
Receivable from sold investment
|
$
|
5,789
|
|
|
$
|
—
|
|
|
$
|
980
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3,923
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,846
|
|
|
Level 3 Financial Assets for the year ended December 31, 2015
|
||||||||||||||||||||||||||||||||||
|
Balance at January 1, 2015
|
|
Realized gains(losses) during period
|
|
Unrealized gains (losses) during the period
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Issuances
|
|
Transfers in or (out) of Level 3
|
|
Balance at December 31, 2015
|
||||||||||||||||||
Receivable from sold investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,789
|
|
|
$
|
—
|
|
|
$
|
5,789
|
|
|
|
|
December 31, 2016
|
||||||||||||
|
Financial Statements
|
|
Assets
|
|
Liabilities
|
||||||||||
|
Location
|
|
Fair Value
|
|
Contracts
|
|
Fair Value
|
|
Contracts
|
||||||
Foreign currency
|
|
|
|
|
|
|
|
|
|
||||||
Futures contracts
|
Receivable from brokers, dealers and clearing organizations
|
|
$
|
360
|
|
|
1,285
|
|
|
$
|
1,663
|
|
|
6,495
|
|
Forward contracts
(1)
|
Financial instruments owned, at fair value
|
|
30
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||
Equity
|
|
|
|
|
|
|
|
|
|
||||||
Futures contracts
|
Receivable from brokers, dealers and clearing organizations
|
|
1,451
|
|
|
2,056
|
|
|
1,644
|
|
|
2,944
|
|
||
Swap contracts
|
Receivable from brokers, dealers and clearing organizations
|
|
16
|
|
|
1
|
|
|
154
|
|
|
1
|
|
||
Listed options
|
Financial instruments owned/sold, not yet purchased, at fair value
|
|
19,100
|
|
|
85,797
|
|
|
12,961
|
|
|
90,063
|
|
||
Forward contracts
(2)
|
Accrued expenses and other liabilities
|
|
—
|
|
|
—
|
|
|
1,599
|
|
|
1
|
|
||
Fixed income
|
|
|
|
|
|
|
|
|
|
||||||
Futures contracts
|
Receivable from brokers, dealers and clearing organizations
|
|
4,627
|
|
|
8,590
|
|
|
5,541
|
|
|
5,165
|
|
||
Commodity
|
|
|
|
|
|
|
|
|
|
||||||
Futures contracts
|
Receivable from brokers, dealers and clearing organizations
|
|
86,393
|
|
|
31,800
|
|
|
86,100
|
|
|
31,906
|
|
||
Gross derivative assets/liabilities, before netting
|
|
$
|
111,977
|
|
|
|
|
$
|
109,662
|
|
|
|
|||
Less: Legally enforceable master netting agreements
|
|
|
|
|
|
|
|
|
|||||||
Exchange traded
(3)
|
|
(92,572
|
)
|
|
|
|
(94,948
|
)
|
|
|
|||||
Bi-lateral over-the-counter
(4)
|
|
—
|
|
|
|
|
(154
|
)
|
|
|
|||||
Net amounts per Consolidated Statement of Financial Condition
(5)
|
|
$
|
19,405
|
|
|
|
|
$
|
14,560
|
|
|
|
|
|
|
December 31, 2015
|
||||||||||||
|
Financial Statements
|
|
Assets
|
|
Liabilities
|
||||||||||
|
Location
|
|
Fair Value
|
|
Contracts
|
|
Fair Value
|
|
Contracts
|
||||||
Foreign currency
|
|
|
|
|
|
|
|
|
|
||||||
Futures contracts
|
Receivable from brokers, dealers and clearing organizations
|
|
$
|
578
|
|
|
3,675
|
|
|
$
|
955
|
|
|
6,586
|
|
Forward contracts
(1)
|
Financial instruments owned, at fair value
|
|
445
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||
Equity
|
|
|
|
|
|
|
|
|
|
||||||
Futures contracts
|
Receivable from brokers, dealers and clearing organizations
|
|
1,558
|
|
|
4,038
|
|
|
1,743
|
|
|
3,432
|
|
||
Swap contracts
|
Receivable from brokers, dealers and clearing organizations
|
|
—
|
|
|
—
|
|
|
281
|
|
|
2
|
|
||
Listed options
|
Financial instruments owned/sold, not yet purchased, at fair value
|
|
178,360
|
|
|
360,469
|
|
|
151,893
|
|
|
390,949
|
|
||
Fixed income
|
|
|
|
|
|
|
|
|
|
||||||
Futures contracts
|
Receivable from brokers, dealers and clearing organizations
|
|
4,265
|
|
|
6,195
|
|
|
4,037
|
|
|
4,891
|
|
||
Commodity
|
|
|
|
|
|
|
|
|
|
||||||
Futures contracts
|
Receivable from brokers, dealers and clearing organizations
|
|
35,441
|
|
|
22,424
|
|
|
35,814
|
|
|
24,261
|
|
||
Gross derivative assets/liabilities, before netting
|
|
$
|
220,647
|
|
|
|
|
$
|
194,723
|
|
|
|
|||
Less: Legally enforceable master netting agreements
|
|
|
|
|
|
|
|
|
|||||||
Exchange traded
(3)
|
|
(41,146
|
)
|
|
|
|
(42,549
|
)
|
|
|
|||||
Bi-lateral over-the-counter
(4)
|
|
—
|
|
|
|
|
(281
|
)
|
|
|
|||||
Net amounts per Consolidated Statement of Financial Condition
(5)
|
|
$
|
179,501
|
|
|
|
|
$
|
151,893
|
|
|
|
(1)
|
The foreign currency forward contract represents a net investment hedge and is designated as a hedging instrument.
|
(2)
|
The equity forward contract represents a liability to deliver shares of Bats common stock to General Atlantic as described in Footnote 9 "Investments".
|
(3)
|
Exchange traded instruments comprise futures contracts.
|
(4)
|
Bi-lateral over-the-counter instruments comprise swaps and forward contracts.
|
(5)
|
The Company has not received or pledged additional collateral under master netting agreements and or other credit support agreements that is eligible to be offset beyond what is offset in the Consolidated Statements of Financial Condition.
|
|
|
|
|
Gain (Loss) Recognized
|
||||||||||
|
|
Financial Statements
|
|
For the years ended December 31,
|
||||||||||
|
|
Location
|
|
2016
|
|
2015
|
|
2014
|
||||||
Derivative instruments not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||
Foreign currency
|
|
|
|
|
|
|
|
|
||||||
Futures contracts
|
|
Trading revenues, net
|
|
$
|
3,043
|
|
|
$
|
4,273
|
|
|
$
|
10,535
|
|
Forward contracts
|
|
Investment income and other, net
|
|
—
|
|
|
(10
|
)
|
|
526
|
|
|||
Equity
|
|
|
|
|
|
|
|
|
||||||
Futures contracts
|
|
Trading revenues, net
|
|
3,725
|
|
|
30,479
|
|
|
25,247
|
|
|||
Swap contracts
|
|
Trading revenues, net
|
|
3,872
|
|
|
3,789
|
|
|
5,277
|
|
|||
Listed options
|
|
Trading revenues, net
|
|
(1,916
|
)
|
|
(14,278
|
)
|
|
(37,439
|
)
|
|||
Fixed income
|
|
|
|
|
|
|
|
|
||||||
Futures contracts
|
|
Trading revenues, net
|
|
26,409
|
|
|
37,710
|
|
|
31,277
|
|
|||
Commodity
|
|
|
|
|
|
|
|
|
||||||
Futures contracts
|
|
Trading revenues, net
|
|
36,281
|
|
|
48,604
|
|
|
55,295
|
|
|||
|
|
|
|
$
|
71,414
|
|
|
$
|
110,567
|
|
|
$
|
90,718
|
|
Derivative instruments designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange - forward contract
|
|
Accumulated other comprehensive income
|
|
$
|
(540
|
)
|
|
$
|
208
|
|
|
$
|
—
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Collateral permitted to be delivered or repledged
|
$
|
1,634,979
|
|
|
$
|
1,640,145
|
|
Collateral that was delivered or repledged
|
1,550,755
|
|
|
1,570,921
|
|
||
Collateral permitted to be further repledged by the receiving counterparty
|
41,730
|
|
|
188,345
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Financial instruments owned, at fair value, pledged to counterparties that have the right to deliver or repledge
|
$
|
314,720
|
|
|
$
|
324,146
|
|
Financial instruments owned, at fair value, pledged to counterparties that do not have the right to deliver or repledge
|
1,291,979
|
|
|
1,027,847
|
|
December 31, 2016
|
|
|
|
Financial instruments sold under agreements to repurchase
|
|
Other collateralized financings
|
||||||
Asset Class
|
|
Securities Loaned
|
|
|
||||||||
Equities
|
|
$
|
369,168
|
|
|
$
|
989,812
|
|
|
$
|
76,176
|
|
U.S. government obligations
|
|
—
|
|
|
12,775
|
|
|
—
|
|
|||
Corporate debt
|
|
3,463
|
|
|
25,188
|
|
|
23,824
|
|
|||
Total
|
|
$
|
372,631
|
|
|
$
|
1,027,775
|
|
|
$
|
100,000
|
|
December 31, 2015
|
|
|
|
Financial instruments sold under agreements to repurchase
|
|
Other collateralized financings
|
||||||
Asset Class
|
|
Securities Loaned
|
|
|
||||||||
Equities
|
|
$
|
451,085
|
|
|
$
|
855,632
|
|
|
$
|
—
|
|
U.S. government obligations
|
|
—
|
|
|
54,902
|
|
|
—
|
|
|||
Corporate debt
|
|
12,292
|
|
|
44,368
|
|
|
—
|
|
|||
Total
|
|
$
|
463,377
|
|
|
$
|
954,902
|
|
|
$
|
—
|
|
December 31, 2016
|
Gross Amounts Recognized
|
|
Gross Amounts Offset in the Statements of Financial Condition
|
|
Net Amounts Presented in the Statements of Financial Condition
|
|
Gross Amounts Not Offset in the Statement of Financial Condition
|
|
Net Amount
|
|||||||||||||||
Available Collateral
(1)
|
|
Counterparty Netting
(2)
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Securities borrowed
|
$
|
1,688,222
|
|
|
$
|
—
|
|
|
$
|
1,688,222
|
|
|
$
|
1,623,281
|
|
|
$
|
4,581
|
|
|
$
|
60,360
|
|
|
Receivable from brokers, dealers and clearing organizations
(3)
|
21,832
|
|
|
—
|
|
|
21,832
|
|
|
21,797
|
|
|
—
|
|
|
35
|
|
|||||||
Total assets
|
$
|
1,710,054
|
|
|
$
|
—
|
|
|
$
|
1,710,054
|
|
|
$
|
1,645,078
|
|
|
$
|
4,581
|
|
|
$
|
60,395
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Securities loaned
|
$
|
372,631
|
|
|
$
|
—
|
|
|
$
|
372,631
|
|
|
$
|
358,023
|
|
|
$
|
4,581
|
|
|
$
|
10,027
|
|
|
Financial instruments sold under agreements to repurchase
|
1,027,775
|
|
|
—
|
|
|
1,027,775
|
|
|
1,027,775
|
|
|
—
|
|
|
—
|
|
|||||||
Other collateralized financings
|
100,000
|
|
|
—
|
|
|
100,000
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|||||||
Total liabilities
|
$
|
1,500,406
|
|
|
$
|
—
|
|
|
$
|
1,500,406
|
|
|
$
|
1,485,798
|
|
|
$
|
4,581
|
|
|
$
|
10,027
|
|
(1)
|
Includes securities received or delivered under collateral arrangements with counterparties that could be liquidated in the event of a counterparty default and thus offset against a counterparty's rights and obligations under the respective repurchase agreements or securities borrowing or lending arrangements.
|
(2)
|
Under master netting agreements with its counterparties, the Company has the legal right of offset with a counterparty, which incorporates all of the counterparty's outstanding rights and obligations under the arrangement. These balances reflect additional credit risk mitigation that is available by counterparty in the event of a counterparty's default, but which are not netted in the Consolidated Statement of Financial Condition because other netting provisions under U.S. GAAP are not met.
|
(3)
|
Represents financial instruments purchased under agreement to resell.
|
December 31, 2015
|
Gross Amounts Recognized
|
|
Gross Amounts Offset in the Statements of Financial Condition
|
|
Net Amounts Presented in the Statements of Financial Condition
|
|
Gross Amounts Not Offset in the Statement of Financial Condition
|
|
Net Amount
|
|||||||||||||||
Available Collateral
(1)
|
|
Counterparty Netting
(2)
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Securities borrowed
|
$
|
1,636,284
|
|
|
$
|
—
|
|
|
$
|
1,636,284
|
|
|
$
|
1,575,568
|
|
|
$
|
8,277
|
|
|
$
|
52,439
|
|
|
Receivable from brokers, dealers and clearing organizations
(3)
|
65,433
|
|
|
—
|
|
|
65,433
|
|
|
62,580
|
|
|
—
|
|
|
2,853
|
|
|||||||
Total assets
|
$
|
1,701,717
|
|
|
$
|
—
|
|
|
$
|
1,701,717
|
|
|
$
|
1,638,148
|
|
|
$
|
8,277
|
|
|
$
|
55,292
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Securities loaned
|
$
|
463,377
|
|
|
$
|
—
|
|
|
$
|
463,377
|
|
|
$
|
440,486
|
|
|
$
|
8,277
|
|
|
$
|
14,614
|
|
|
Financial instruments sold under agreements to repurchase
|
954,902
|
|
|
—
|
|
|
954,902
|
|
|
954,902
|
|
|
—
|
|
|
—
|
|
|||||||
Total liabilities
|
$
|
1,418,279
|
|
|
$
|
—
|
|
|
$
|
1,418,279
|
|
|
$
|
1,395,388
|
|
|
$
|
8,277
|
|
|
$
|
14,614
|
|
(1)
|
Includes securities received or delivered under collateral arrangements with counterparties that could be liquidated in the event of a counterparty default and thus offset against a counterparty's rights and obligations under the respective repurchase agreements or securities borrowing or lending arrangements.
|
(2)
|
Under master netting agreements with its counterparties, the Company has the legal right of offset with a counterparty, which incorporates all of the counterparty's outstanding rights and obligations under the arrangement. These balances reflect additional credit risk mitigation that is available by a counterparty in the event of a counterparty's default, but which are not netted in the Consolidated Statement of Financial Condition because other netting provisions under U.S. GAAP are not met.
|
(3)
|
Represents financial instruments purchased under agreement to resell.
|
As of December 31, 2016
|
Overnight
|
|
0 - 30 days
|
|
31 - 60 days
|
|
61 - 90 days
|
|
Total
|
||||||||||
Securities loaned
|
$
|
372,631
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
372,631
|
|
Financial instruments sold under agreements to repurchase
|
12,775
|
|
|
410,000
|
|
|
465,000
|
|
|
140,000
|
|
|
1,027,775
|
|
|||||
Other collateralized financings
|
—
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|||||
Total
|
$
|
385,406
|
|
|
$
|
510,000
|
|
|
$
|
465,000
|
|
|
$
|
140,000
|
|
|
$
|
1,500,406
|
|
As of December 31, 2015
|
Overnight
|
|
0 - 30 days
|
|
31 - 60 days
|
|
61 - 90 days
|
|
Total
|
||||||||||
Securities loaned
|
$
|
463,377
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
463,377
|
|
Financial instruments sold under agreements to repurchase
|
54,902
|
|
|
635,000
|
|
|
150,000
|
|
|
115,000
|
|
|
954,902
|
|
|||||
Total
|
$
|
518,279
|
|
|
$
|
635,000
|
|
|
$
|
150,000
|
|
|
$
|
115,000
|
|
|
$
|
1,418,279
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Receivable:
|
|
|
|
||||
Clearing organizations and other
|
$
|
619,425
|
|
|
$
|
505,789
|
|
Financial instruments purchased under agreement to resell
|
21,832
|
|
|
65,433
|
|
||
Securities failed to deliver
|
191,528
|
|
|
109,989
|
|
||
Total receivable
|
$
|
832,785
|
|
|
$
|
681,211
|
|
Payable:
|
|
|
|
||||
Clearing organizations and other
|
$
|
458,341
|
|
|
$
|
240,985
|
|
Securities failed to receive
|
60,559
|
|
|
32,820
|
|
||
Total payable
|
$
|
518,900
|
|
|
$
|
273,805
|
|
|
Depreciation
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
Period
|
|
|
||||||
Computer hardware and software
|
3 years
|
|
$
|
260,647
|
|
|
$
|
253,113
|
|
Leasehold improvements
|
*
|
|
153,899
|
|
|
108,173
|
|
||
Telephone systems and equipment
|
5 years
|
|
4,158
|
|
|
3,651
|
|
||
Furniture and fixtures
|
7 years
|
|
17,036
|
|
|
12,216
|
|
||
|
|
|
435,740
|
|
|
377,153
|
|
||
Less - Accumulated depreciation and amortization
|
|
|
(284,095
|
)
|
|
(282,295
|
)
|
||
|
|
|
$
|
151,645
|
|
|
$
|
94,858
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Strategic investments:
|
|
|
|
||||
Investments accounted for under the equity method
|
$
|
16,707
|
|
|
$
|
86,853
|
|
Investments held at fair value
|
9,198
|
|
|
1,814
|
|
||
Investments held at cost, less impairment
|
2,789
|
|
|
8,746
|
|
||
Total strategic investments
|
28,694
|
|
|
97,413
|
|
||
Other investments
|
2,285
|
|
|
1,530
|
|
||
Total investments
|
$
|
30,979
|
|
|
$
|
98,943
|
|
|
December 31,
2016
(1)
|
|
December 31,
2015
(1)
|
||||
Market Making
|
|
|
|
||||
Technology
|
$
|
39,536
|
|
|
$
|
38,151
|
|
Trading rights
|
7,027
|
|
|
8,530
|
|
||
Total
|
46,563
|
|
|
46,681
|
|
||
Global Execution Services
|
|
|
|
||||
Technology
|
20,694
|
|
|
21,446
|
|
||
Customer relationships
|
7,944
|
|
|
9,389
|
|
||
Trade names
|
650
|
|
|
750
|
|
||
Total
|
29,288
|
|
|
31,585
|
|
||
Corporate and Other
|
|
|
|
||||
Technology
|
8,084
|
|
|
5,801
|
|
||
Total
|
$
|
83,935
|
|
|
$
|
84,067
|
|
(1)
|
Excluded from the December 31, 2016 and December 31, 2015 balance is
$8.2 million
and
$26.0 million
, respectively, of intangibles related to businesses which meet the requirements to be considered held for sale. As noted above and in Footnote 3 "Discontinued Operations, Assets of Businesses Held for Sale & Sales of Businesses", such amounts are included in Assets of businesses held for sale.
|
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Technology
(1)
|
Gross carrying amount
|
$
|
157,188
|
|
|
$
|
120,256
|
|
|
Accumulated amortization
|
(88,874
|
)
|
|
(54,858
|
)
|
||
|
Net carrying amount
|
68,314
|
|
|
65,398
|
|
||
Trading rights
(2)
|
Gross carrying amount
|
7,509
|
|
|
9,209
|
|
||
|
Accumulated amortization
|
(482
|
)
|
|
(679
|
)
|
||
|
Net carrying amount
|
7,027
|
|
|
8,530
|
|
||
Customer relationships
(3)
|
Gross carrying amount
|
13,000
|
|
|
13,000
|
|
||
|
Accumulated amortization
|
(5,056
|
)
|
|
(3,611
|
)
|
||
|
Net carrying amount
|
7,944
|
|
|
9,389
|
|
||
Trade names
(4)
|
Gross carrying amount
|
1,000
|
|
|
1,000
|
|
||
|
Accumulated amortization
|
(350
|
)
|
|
(250
|
)
|
||
|
Net carrying amount
|
650
|
|
|
750
|
|
||
Total
|
Gross carrying amount
|
178,697
|
|
|
143,465
|
|
||
|
Accumulated amortization
|
(94,762
|
)
|
|
(59,398
|
)
|
||
|
Net carrying amount
|
$
|
83,935
|
|
|
$
|
84,067
|
|
(1)
|
The weighted average remaining life for technology, including capitalized internal use software, was approximately
two
years as of both
December 31, 2016
and
December 31, 2015
. Excluded from the December 31, 2016 and December 31, 2015 balances are
$8.2 million
and
$8.8 million
, respectively, of technology assets related to Assets of businesses held for sale. As noted in Footnote 3 "Discontinued Operations, Assets of Businesses Held for Sale & Sales of Businesses", these assets are included in Assets of businesses held for sale.
|
(2)
|
Trading rights provide the Company with the rights to trade on certain exchanges. The weighted average remaining life of trading rights with definite useful lives was approximately
4
and
5
years as of
December 31, 2016
and
December 31, 2015
, respectively. As of
December 31, 2016
and December 31, 2015,
$6.9 million
of trading rights had indefinite useful lives. Excluded from the December 31, 2015 balance is
$17.2 million
of trading rights related to Assets of businesses held for sale.
|
(3)
|
Customer relationships relate to KCG BondPoint. The weighted average remaining life was approximately
6
and
7
years as of
December 31, 2016
and
December 31, 2015
, respectively. Lives may be reduced depending upon actual retention rates.
|
(4)
|
Trade names relate to KCG BondPoint. The weighted average remaining life was approximately
7
years as of both
December 31, 2016
and
December 31, 2015
.
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Amortization expense
|
$
|
34,356
|
|
|
$
|
35,244
|
|
|
$
|
35,592
|
|
|
Amortization
expense
|
||
For the year ended December 31, 2017
|
$
|
38,579
|
|
For the year ended December 31, 2018
|
26,402
|
|
|
For the year ended December 31, 2019
|
8,066
|
|
|
For the year ended December 31, 2020
|
1,561
|
|
|
For the year ended December 31, 2021
|
1,544
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
6.875% Senior Secured Notes
|
$
|
461,899
|
|
|
$
|
466,628
|
|
|
$
|
495,632
|
|
|
$
|
450,000
|
|
Debt issuance costs
(1)
|
(7,546
|
)
|
|
—
|
|
|
(10,643
|
)
|
|
—
|
|
||||
Total
|
$
|
454,353
|
|
|
$
|
466,628
|
|
|
$
|
484,989
|
|
|
$
|
450,000
|
|
(1)
|
As discussed in Footnote 2 "Significant Accounting Policies", in 2016 the Company retrospectively adopted a new ASU which requires debt issuance costs be presented as a direct deduction from the carrying amount of the debt liability.
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Interest expense
|
$
|
33,119
|
|
|
$
|
35,591
|
|
|
$
|
31,724
|
|
Debt extinguishment charges
|
—
|
|
|
25,006
|
|
|
9,552
|
|
|||
Amortization of debt issuance costs
(1)
|
3,206
|
|
|
3,537
|
|
|
3,665
|
|
|||
Commitment fee
(2)
|
1,452
|
|
|
1,506
|
|
|
1,575
|
|
|||
Accelerated amortization of debt issuance costs
(3)
|
738
|
|
|
—
|
|
|
—
|
|
|||
Accelerated interest expense on repurchase of debt
(3)
|
298
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
38,813
|
|
|
$
|
65,640
|
|
|
$
|
46,516
|
|
(1)
|
Included within Interest expense on the Consolidated Statements of Operations.
|
(2)
|
Included within Other expense on the Consolidated Statements of Operations.
|
(3)
|
In conjunction with the repurchase of debt in the open market, the Company accelerated a prorated portion of its original issue discount and capitalized debt issuance costs. These costs have been netted against the gain on repurchase within Investment income and other, net on the Consolidated Statements of Operations for the year ended December 31, 2016.
|
|
For the years ended December 31,
|
||||||||||
Statements of Operations
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues
|
|
|
|
|
|
||||||
Commissions and fees
|
$
|
31,716
|
|
|
$
|
15,844
|
|
|
$
|
14,528
|
|
Trading revenues, net
|
1,839
|
|
|
6,468
|
|
|
3,862
|
|
|||
Interest, net
|
581
|
|
|
914
|
|
|
651
|
|
|||
Total revenues from related parties
|
$
|
34,136
|
|
|
$
|
23,226
|
|
|
$
|
19,041
|
|
Expenses
|
|
|
|
|
|
||||||
Execution and clearance fees
(1)
|
$
|
12,464
|
|
|
$
|
(15,472
|
)
|
|
$
|
(10,261
|
)
|
Communications and data processing
|
18,613
|
|
|
6,351
|
|
|
—
|
|
|||
Payment for order flow
|
5
|
|
|
2,685
|
|
|
585
|
|
|||
Collateralized financing interest
|
237
|
|
|
399
|
|
|
529
|
|
|||
Professional fees
|
—
|
|
|
5,507
|
|
|
—
|
|
|||
Other expense
|
231
|
|
|
2,349
|
|
|
1,719
|
|
|||
Total expenses incurred with respect to related parties
|
$
|
31,550
|
|
|
$
|
1,819
|
|
|
$
|
(7,428
|
)
|
(1)
|
Represents net volume based fees paid or received by KCG for taking or providing liquidity to related trading venues. Volume based fees will vary period to period based on usage. The volume with the Company's related party are part of its overall trading strategies, and in 2016, net volume based fees with such party resulted in more taking of liquidity as compared to 2015, when the Company provided more liquidity to such party.
|
Statements of Financial Condition
|
December 31,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
||||
Securities borrowed
|
$
|
5,293
|
|
|
$
|
10,573
|
|
Receivable from brokers, dealers and clearing organizations
|
2,106
|
|
|
1,987
|
|
||
Other assets
|
62,906
|
|
|
67,652
|
|
||
Liabilities
|
|
|
|
||||
Securities loaned
|
$
|
2,594
|
|
|
$
|
3,844
|
|
Payable to brokers, dealers and clearing organizations
|
188
|
|
|
61
|
|
||
Accrued expenses and other liabilities
|
3,708
|
|
|
4,159
|
|
Name
|
|
Relationship/ Title
|
|
Number of Shares Purchased
|
|
Total Purchase Price
|
|||
Stephen Schuler and related entities
(1)
|
|
Stockholder/ Former Director
|
|
1,708
|
|
|
$
|
23,918
|
|
Daniel Tierney and related entities
(2)
|
|
Stockholder/Former Director
|
|
1,798
|
|
|
25,176
|
|
|
General Atlantic
(3)
|
|
Former Stockholder
|
|
8,285
|
|
|
115,989
|
|
|
Jefferies
|
|
Stockholder
|
|
6,533
|
|
|
91,458
|
|
(1)
|
Includes (i) Stephen Schuler, (ii) Serenity Investments, LLC, a limited liability company organized under the laws of the state of Alaska (“Serenity”), of which Mr. Schuler and his wife separately hold equity interests that together represent a controlling interest and with respect to which Mr. Schuler may be deemed to share voting and dispositive power and (iii) the Schuler Family GST Trust (the "Schuler Family Trust") dated June 6, 2003, a trust that holds securities with respect to which Mr. Schuler may be deemed to share voting and dispositive power. Mr. Schuler disclaims beneficial ownership of the securities held by Serenity except to the extent of his pecuniary interest therein. In May 2016, Stephen Schuler resigned from his position as a director of the Company. Serenity and the Schuler Family Trust no longer hold shares of KCG Class A Common Stock.
|
(2)
|
Includes (i) Daniel Tierney and (ii) the Daniel V. Tierney 2011 Trust (the “Tierney Trust”), a trust of which Daniel Tierney is the settlor and beneficiary. Mr. Tierney does not have or share voting or dispositive power over the securities held by the Tierney Trust, but does have the power to revoke the Tierney Trust and acquire beneficial ownership of such securities within
60 days
. Mr. Tierney disclaims beneficial ownership of the securities held by the Tierney Trust. In November, 2015, Daniel Tierney resigned from his position as a director of the Company. The Tierney Trust no longer holds shares of KCG Class A Common Stock.
|
(3)
|
General Atlantic appointed two directors to the Company’s board of directors (Rene Kern, an employee of General Atlantic and John C. (Hans) Morris, a former employee of General Atlantic). Neither director participated in the Tender Offer with respect to shares they hold directly. Following the completion of the Swap Transaction, General Atlantic no longer holds shares of KCG Class A Common Stock.
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Stock award compensation expense
(1)
|
$
|
19,451
|
|
|
$
|
81,496
|
|
|
$
|
55,402
|
|
Income tax benefit
|
7,391
|
|
|
30,968
|
|
|
21,053
|
|
(1)
|
Included in the year ended December 31, 2015 is
$28.8 million
of accelerated stock compensation expense related to the Outstanding Annual RSUs as a result of implementing the Continued Vesting Amendment.
|
|
|
Restricted Stock Units
|
|||||
|
|
Number of
Units
|
|
Weighted-
Average
Grant date
Fair Value
|
|||
Outstanding at December 31, 2015
|
|
6,737
|
|
|
$
|
11.29
|
|
Granted
|
|
3,296
|
|
|
10.86
|
|
|
Vested
|
|
(4,111
|
)
|
|
10.99
|
|
|
Forfeited
|
|
(359
|
)
|
|
11.32
|
|
|
Outstanding at December 31, 2016
|
|
5,563
|
|
|
$
|
11.25
|
|
|
2016
|
|
Dividend yield
|
—
|
%
|
Expected volatility
|
25.0
|
%
|
Risk-free interest rate
|
0.7
|
%
|
Expected life (in years)
|
3.5
|
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Stock option and SAR compensation expense
|
$
|
746
|
|
|
$
|
2,999
|
|
|
$
|
3,807
|
|
Income tax benefit
|
284
|
|
|
1,140
|
|
|
1,447
|
|
|
|
Number of Stock Awards
|
|
Weighted-
Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value
|
|
Weighted-
Average
Remaining
Life (years)
|
|||||
Outstanding at December 31, 2015
(1)
|
|
4,371
|
|
|
$
|
17.36
|
|
|
|
|
|
||
Granted
|
|
2,059
|
|
|
23.35
|
|
|
|
|
|
|||
Exercised
|
|
(43
|
)
|
|
8.24
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(89
|
)
|
|
49.64
|
|
|
|
|
|
|||
Outstanding at December 31, 2016
(1)
|
|
6,298
|
|
|
$
|
18.88
|
|
|
$
|
6,224
|
|
|
2.33
|
Exercisable at December 31, 2016
|
|
4,906
|
|
|
$
|
17.66
|
|
|
$
|
6,224
|
|
|
1.80
|
Available for future grants at December 31, 2016
(2)
|
|
13,221
|
|
|
|
|
|
|
|
(1)
|
Includes
1.7 million
SARs.
|
(2)
|
Represents shares available for grant of options, SARs, RSUs and other awards under the Amended 2015 Plan.
|
|
|
Options and SARs Outstanding
|
|
Options and SARs Exercisable
|
||||||||||||
Range of Exercise Prices
|
|
Outstanding
at 12/31/16
|
|
Weighted-
Average
Remaining
Contractual
Life
|
|
Weighted-
Average
Exercise
Price
|
|
Number
Exercisable
at 12/31/16
|
|
Weighted-
Average
Exercise
Price
|
||||||
$8.24 - $8.25
|
|
697
|
|
|
0.96
|
|
$
|
8.24
|
|
|
697
|
|
|
$
|
8.24
|
|
$11.65 - $11.65
|
|
1,700
|
|
|
1.51
|
|
11.65
|
|
|
1,700
|
|
|
11.65
|
|
||
$14.45 - $14.45
|
|
58
|
|
|
1.73
|
|
14.45
|
|
|
—
|
|
|
—
|
|
||
$22.50 - $22.50
|
|
1,700
|
|
|
1.51
|
|
22.50
|
|
|
1,700
|
|
|
22.50
|
|
||
$23.35 - $53.91
|
|
2,143
|
|
|
4.08
|
|
25.20
|
|
|
809
|
|
|
28.25
|
|
||
|
|
6,298
|
|
|
2.33
|
|
$
|
18.84
|
|
|
4,906
|
|
|
$
|
17.66
|
|
|
Vested
|
|
Incentive units at December 31, 2015
|
30
|
|
Issued
|
—
|
|
Vested
|
(11
|
)
|
Exercised
|
(3
|
)
|
Canceled
|
—
|
|
Incentive units at December 31, 2016
|
16
|
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Incentive units
|
$
|
262
|
|
|
$
|
168
|
|
|
$
|
(269
|
)
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Total expense
|
$
|
8,919
|
|
|
$
|
9,765
|
|
|
$
|
10,093
|
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
U.S. federal
|
$
|
101,443
|
|
|
$
|
106,700
|
|
|
$
|
709
|
|
U.S. state and local
|
(2,245
|
)
|
|
19,665
|
|
|
4,081
|
|
|||
Non U.S.
|
471
|
|
|
958
|
|
|
(828
|
)
|
|||
|
$
|
99,669
|
|
|
$
|
127,323
|
|
|
$
|
3,962
|
|
Deferred:
|
|
|
|
|
|
||||||
U.S. federal
|
$
|
32,635
|
|
|
25,221
|
|
|
30,331
|
|
||
U.S. state and local
|
13,673
|
|
|
(16,803
|
)
|
|
(10,997
|
)
|
|||
Non U.S.
|
(5,246
|
)
|
|
(4,883
|
)
|
|
(543
|
)
|
|||
|
$
|
41,062
|
|
|
$
|
3,535
|
|
|
$
|
18,791
|
|
|
|
|
|
|
|
||||||
Provision for income taxes
|
$
|
140,731
|
|
|
$
|
130,858
|
|
|
$
|
22,753
|
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
U.S. federal income tax expense at statutory rate
|
$
|
138,750
|
|
|
$
|
132,987
|
|
|
$
|
29,815
|
|
U.S. state and local income tax expense (benefit), net of U.S. federal income tax effect
|
7,428
|
|
|
18,101
|
|
|
(4,495
|
)
|
|||
Recognition of state deferred tax assets and net operating losses, net of U.S. federal income tax effect
|
—
|
|
|
(16,242
|
)
|
|
—
|
|
|||
Nondeductible expenses
(1)
|
2,980
|
|
|
3,223
|
|
|
230
|
|
|||
Federal research & development tax credits
|
(2,153
|
)
|
|
(3,753
|
)
|
|
(1,241
|
)
|
|||
Deduction for domestic production activities
|
(5,525
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign taxes
|
471
|
|
|
(3,927
|
)
|
|
(1,371
|
)
|
|||
Other, net
|
(1,220
|
)
|
|
469
|
|
|
(185
|
)
|
|||
Income tax expense
|
$
|
140,731
|
|
|
$
|
130,858
|
|
|
$
|
22,753
|
|
|
December 31,
2016
|
|
December 31,
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Employee compensation and benefit plans
|
$
|
32,719
|
|
|
$
|
41,447
|
|
Fixed assets and other amortizable assets
|
52,206
|
|
|
79,765
|
|
||
Accrued expenses and other
|
16,140
|
|
|
7,875
|
|
||
Valuation of investments
|
8,108
|
|
|
13,590
|
|
||
Net operating loss carryforwards and tax credits
|
42,476
|
|
|
43,419
|
|
||
Less: Valuation allowance on net operating loss carryforwards and tax credits
|
(9,715
|
)
|
|
(9,715
|
)
|
||
Total deferred tax assets
|
$
|
141,934
|
|
|
$
|
176,381
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
||||||
Fixed assets and other amortizable assets
|
$
|
2,191
|
|
|
$
|
243
|
|
Valuation of investments
|
—
|
|
|
280
|
|
||
Reduction in foreign tax credit for Non-U.S. NOL carryforwards
|
29,882
|
|
|
24,633
|
|
||
Total deferred tax liabilities
|
32,073
|
|
|
25,156
|
|
||
Net deferred tax assets
|
$
|
109,861
|
|
|
$
|
151,225
|
|
|
December 31,
2016
|
|
December 31,
2015
|
||||
Balance at beginning of period
|
$
|
3,644
|
|
|
$
|
2,312
|
|
Increases based on tax positions related to prior periods
|
1,751
|
|
|
1,332
|
|
||
Decreases based on tax positions related to prior periods
|
(1,217
|
)
|
|
—
|
|
||
Increases based on tax positions related to current periods
|
917
|
|
|
—
|
|
||
Balance at the end of the period
|
$
|
5,095
|
|
|
$
|
3,644
|
|
|
|
Unrealized Gains (Losses) on Available-for-Sale Securities
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||
Balance January 1, 2014
|
|
$
|
36
|
|
|
$
|
1,365
|
|
|
$
|
1,401
|
|
Other comprehensive income
|
|
316
|
|
|
416
|
|
|
732
|
|
|||
Balance, December 31, 2014
|
|
352
|
|
|
1,781
|
|
|
2,133
|
|
|||
Other comprehensive income (loss)
|
|
106
|
|
|
(1,581
|
)
|
|
(1,475
|
)
|
|||
Reclassification of investment to trading security
|
|
(308
|
)
|
|
—
|
|
|
(308
|
)
|
|||
Net current-period other comprehensive loss
|
|
(202
|
)
|
|
(1,581
|
)
|
|
(1,783
|
)
|
|||
Balance, December 31, 2015
|
|
150
|
|
|
200
|
|
|
350
|
|
|||
Other comprehensive income (loss)
|
|
3,136
|
|
|
(1,239
|
)
|
|
1,897
|
|
|||
Balance, December 31, 2016
|
|
$
|
3,286
|
|
|
$
|
(1,039
|
)
|
|
$
|
2,247
|
|
Details about Accumulated Other Comprehensive Income Components
|
|
Amounts Reclassified from Other Comprehensive Income
|
|
Affected Line Item in the Consolidated Statement of Operations where Net Income is Presented
|
||
Available-for-sale securities:
|
|
|
|
|
||
Reclassification of unrealized net gains
|
|
497
|
|
|
Investment income and other, net
|
|
Related income tax expense
|
|
(189
|
)
|
|
Income tax expense
|
|
|
|
$
|
308
|
|
|
Net of tax
|
|
Class A
|
|
Class B
|
|
Class C
|
|
|
|||||||
Original Exercise Price
|
$
|
12.00
|
|
|
$
|
13.50
|
|
|
$
|
15.00
|
|
|
|
|
Adjusted Exercise Price
|
$
|
11.70
|
|
|
$
|
13.16
|
|
|
$
|
14.63
|
|
|
|
|
Initial term (years)
|
4
|
|
|
5
|
|
|
6
|
|
|
|
||||
Expiration
|
7/1/2017
|
|
|
7/1/2018
|
|
|
7/1/2019
|
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
Total
|
|||||||
Warrants - Outstanding at December 31, 2015
|
7,097
|
|
|
7,254
|
|
|
7,254
|
|
|
21,605
|
|
|||
Exercised
|
(55
|
)
|
|
(18
|
)
|
|
—
|
|
|
(73
|
)
|
|||
Repurchased
|
(5,016
|
)
|
|
(5,167
|
)
|
|
(5,167
|
)
|
|
(15,350
|
)
|
|||
Warrants - Outstanding at December 31, 2016
|
2,026
|
|
|
2,069
|
|
|
2,087
|
|
|
6,182
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Balance as of beginning of period
|
$
|
18,892
|
|
|
$
|
5,897
|
|
Real estate charges incurred
|
390
|
|
|
23,186
|
|
||
Payments made, net
|
(3,750
|
)
|
|
(8,921
|
)
|
||
Other charges
|
(1,281
|
)
|
|
(1,270
|
)
|
||
Balance as of end of period
|
$
|
14,251
|
|
|
$
|
18,892
|
|
|
For the years ended December 31,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
Numerator /
net income |
|
Denominator /
shares
|
|
Numerator /
net income
|
|
Denominator /
shares
|
|
Numerator /
net income |
|
Denominator /
shares |
||||||||||||
Income and shares used in basic calculations
|
$
|
255,697
|
|
|
84,405
|
|
|
$
|
249,104
|
|
|
100,437
|
|
|
61,102
|
|
|
112,854
|
|
||||
Effect of dilutive stock based awards
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restricted awards
|
|
|
876
|
|
|
|
|
1,955
|
|
|
|
|
3,579
|
|
|||||||||
Stock options and SARs
|
|
|
490
|
|
|
|
|
316
|
|
|
|
|
101
|
|
|||||||||
Warrants
|
|
|
389
|
|
|
|
|
214
|
|
|
|
|
—
|
|
|||||||||
Income and shares used in diluted calculations
|
$
|
255,697
|
|
|
86,160
|
|
|
$
|
249,104
|
|
|
102,922
|
|
|
$
|
61,102
|
|
|
116,534
|
|
|||
Income attributable to common stockholders
|
$
|
255,697
|
|
|
|
|
$
|
249,104
|
|
|
|
|
$
|
61,102
|
|
|
|
||||||
Basic earnings per common share
|
|
|
$
|
3.03
|
|
|
|
|
$
|
2.48
|
|
|
|
|
$
|
0.54
|
|
||||||
Diluted earnings per common share
|
|
|
$
|
2.97
|
|
|
|
|
$
|
2.42
|
|
|
|
|
$
|
0.52
|
|
|
Minimum Payments
|
||
2017
|
$
|
2,908
|
|
2018
|
2,861
|
|
|
2019
|
2,861
|
|
|
Total
|
$
|
8,630
|
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Interest expense - Capital leases
|
$
|
66
|
|
|
$
|
189
|
|
|
$
|
370
|
|
|
Gross Lease
Obligations
|
|
Sublease
Income
|
|
Net Lease
Obligations
|
||||||
Year ending December 31, 2017
|
$
|
28,502
|
|
|
$
|
5,213
|
|
|
$
|
23,289
|
|
Year ending December 31, 2018
|
26,799
|
|
|
4,917
|
|
|
21,882
|
|
|||
Year ending December 31, 2019
|
24,380
|
|
|
4,337
|
|
|
20,043
|
|
|||
Year ending December 31, 2020
|
22,918
|
|
|
2,974
|
|
|
19,944
|
|
|||
Year ending December 31, 2021
|
22,412
|
|
|
2,957
|
|
|
19,455
|
|
|||
Thereafter through December 31, 2031
|
152,911
|
|
|
7,391
|
|
|
145,520
|
|
|||
Total
|
$
|
277,922
|
|
|
$
|
27,789
|
|
|
$
|
250,133
|
|
|
|
Net Capital
|
|
Net Capital
Requirement |
|
Excess Net
Capital |
||||||
KCG Americas LLC
|
|
$
|
342,919
|
|
|
$
|
1,000
|
|
|
$
|
341,919
|
|
|
|
Financial
Resources
|
|
Resource
Requirement
|
|
Excess
Financial
Resources
|
||||||
KCG Europe Limited
|
|
$
|
140,797
|
|
|
$
|
111,101
|
|
|
$
|
29,696
|
|
|
Market
Making
|
|
Global Execution Services
|
|
Corporate
and Other
|
|
Consolidated
Total
|
||||||||
For the year ended December 31, 2016:
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
775,173
|
|
|
$
|
283,756
|
|
|
$
|
395,483
|
|
|
$
|
1,454,412
|
|
Pre-tax earnings
|
93,732
|
|
|
12,008
|
|
|
290,688
|
|
|
396,428
|
|
||||
Total assets
|
5,400,530
|
|
|
703,426
|
|
|
157,331
|
|
|
6,261,287
|
|
||||
For the year ended December 31, 2015:
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
884,858
|
|
|
$
|
667,723
|
|
|
$
|
46,529
|
|
|
$
|
1,599,110
|
|
Pre-tax earnings
|
124,028
|
|
|
368,957
|
|
|
(113,023
|
)
|
|
379,962
|
|
||||
Total assets
|
4,855,482
|
|
|
727,029
|
|
|
458,024
|
|
|
6,040,535
|
|
||||
For the year ended December 31, 2014:
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
901,152
|
|
|
$
|
345,710
|
|
|
$
|
69,369
|
|
|
$
|
1,316,232
|
|
Pre-tax earnings
|
146,713
|
|
|
11,056
|
|
|
(72,582
|
)
|
|
85,187
|
|
||||
Total assets
|
4,401,021
|
|
|
786,734
|
|
|
1,633,620
|
|
|
6,821,375
|
|
|
U.S.
|
|
International
|
|
Consolidated
Total
|
||||||
For the year ended December 31, 2016:
|
|
|
|
|
|
||||||
Revenues
|
$
|
1,351,242
|
|
|
$
|
103,170
|
|
|
$
|
1,454,412
|
|
For the year ended December 31, 2015:
|
|
|
|
|
|
||||||
Revenues
|
$
|
1,449,370
|
|
|
$
|
149,740
|
|
|
$
|
1,599,110
|
|
For the year ended December 31, 2014:
|
|
|
|
|
|
||||||
Revenues
|
$
|
1,127,088
|
|
|
$
|
189,144
|
|
|
$
|
1,316,232
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
369,882
|
|
|
$
|
333,982
|
|
Receivable from subsidiaries
|
—
|
|
|
212,336
|
|
||
Investments in subsidiaries
|
1,509,526
|
|
|
1,039,250
|
|
||
Fixed assets and leasehold improvements, at cost, less
accumulated depreciation and amortization
|
88,822
|
|
|
2,755
|
|
||
Goodwill and intangible assets, less accumulated amortization
|
—
|
|
|
218
|
|
||
Deferred tax asset, net
|
87,847
|
|
|
76,747
|
|
||
Subordinated loans to subsidiaries
|
300,000
|
|
|
280,000
|
|
||
Other assets
|
13,181
|
|
|
41,178
|
|
||
Total assets
|
$
|
2,369,258
|
|
|
$
|
1,986,466
|
|
Liabilities and equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Accrued compensation expense
|
$
|
13,812
|
|
|
$
|
21,775
|
|
Payable to subsidiaries
|
405,414
|
|
|
—
|
|
||
Accrued expenses and other liabilities
|
64,279
|
|
|
35,604
|
|
||
Income taxes payable
|
74,117
|
|
|
—
|
|
||
Debt
|
454,353
|
|
|
484,989
|
|
||
Total liabilities
|
1,011,975
|
|
|
542,368
|
|
||
Total equity
|
1,357,283
|
|
|
1,444,098
|
|
||
Total liabilities and equity
|
$
|
2,369,258
|
|
|
$
|
1,986,466
|
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Investment income and other, net
|
$
|
9,469
|
|
|
$
|
7,341
|
|
|
$
|
3,415
|
|
Total revenues
|
9,469
|
|
|
7,341
|
|
|
3,415
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
32,660
|
|
|
48,863
|
|
|
50,256
|
|
|||
Debt interest expense
|
19,823
|
|
|
39,419
|
|
|
15,604
|
|
|||
Depreciation and amortization
|
633
|
|
|
—
|
|
|
—
|
|
|||
Professional fees
|
10,188
|
|
|
15,728
|
|
|
9,211
|
|
|||
Business development
|
964
|
|
|
2,759
|
|
|
3,625
|
|
|||
Occupancy and equipment rentals
|
12,904
|
|
|
2,059
|
|
|
—
|
|
|||
Communications and data processing
|
2,008
|
|
|
—
|
|
|
—
|
|
|||
Other
|
17,898
|
|
|
27,795
|
|
|
21,795
|
|
|||
Total expenses
|
97,078
|
|
|
136,623
|
|
|
100,491
|
|
|||
Loss before income taxes and equity in earnings of subsidiaries
|
(87,609
|
)
|
|
(129,282
|
)
|
|
(97,076
|
)
|
|||
Income tax expense (benefit)
|
69,654
|
|
|
(75,784
|
)
|
|
(35,972
|
)
|
|||
Loss before equity in earnings of subsidiaries
|
(157,263
|
)
|
|
(53,498
|
)
|
|
(61,104
|
)
|
|||
Equity in earnings of subsidiaries
|
412,960
|
|
|
302,602
|
|
|
122,206
|
|
|||
Net income
|
255,697
|
|
|
249,104
|
|
|
61,102
|
|
|||
Other comprehensive income (loss)
|
1,897
|
|
|
(1,783
|
)
|
|
732
|
|
|||
Comprehensive income
|
$
|
257,594
|
|
|
$
|
247,321
|
|
|
$
|
61,834
|
|
|
For the years ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
255,697
|
|
|
$
|
249,104
|
|
|
$
|
61,102
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
||||||
Equity in earnings of subsidiaries, net of tax
|
(412,960
|
)
|
|
(302,602
|
)
|
|
(122,206
|
)
|
|||
Deferred taxes
|
17,322
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation
|
3,729
|
|
|
14,942
|
|
|
16,997
|
|
|||
Debt discount accretion and other debt related expenses
|
3,327
|
|
|
12,103
|
|
|
12,548
|
|
|||
Realized gain on repurchase of debt
|
(3,676
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
464
|
|
|
—
|
|
|
—
|
|
|||
Dividends received from subsidiaries
|
95,000
|
|
|
85,323
|
|
|
224,524
|
|
|||
Decrease (increase) in operating assets
|
|
|
|
|
|
||||||
Subordinated loan receivable
|
(20,000
|
)
|
|
—
|
|
|
(30,000
|
)
|
|||
Deferred tax asset
|
(11,100
|
)
|
|
60,262
|
|
|
6,019
|
|
|||
Other assets
|
15,392
|
|
|
(17,255
|
)
|
|
(25,897
|
)
|
|||
(Decrease) increase in operating liabilities
|
|
|
|
|
|
||||||
Income taxes payable
|
87,475
|
|
|
—
|
|
|
—
|
|
|||
Accrued compensation expense
|
(1,930
|
)
|
|
5,050
|
|
|
13,208
|
|
|||
Accrued expenses and other liabilities
|
14,020
|
|
|
20,063
|
|
|
3,178
|
|
|||
Net cash provided by operating activities
|
42,760
|
|
|
126,990
|
|
|
159,473
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchases of investments
|
(583
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase of fixed assets and leasehold improvements
|
(75,579
|
)
|
|
(2,972
|
)
|
|
—
|
|
|||
Capital contributions to subsidiaries
|
(11,466
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(87,628
|
)
|
|
(2,972
|
)
|
|
—
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Repurchase of 6.875% Senior Secured Notes
|
(30,288
|
)
|
|
—
|
|
|
—
|
|
|||
Borrowings under capital lease obligations
|
7,497
|
|
|
—
|
|
|
—
|
|
|||
Partial payment of Credit Agreement
|
—
|
|
|
—
|
|
|
(235,000
|
)
|
|||
Proceeds from issuance of 6.875% Senior Secured Notes, net
|
—
|
|
|
494,810
|
|
|
—
|
|
|||
Repayment of 8.25% Senior Secured Notes
|
—
|
|
|
(305,000
|
)
|
|
—
|
|
|||
Payment of debt issuance costs
|
—
|
|
|
(12,645
|
)
|
|
—
|
|
|||
Cost of common stock repurchased - Tender Offer
|
—
|
|
|
(330,000
|
)
|
|
—
|
|
|||
Cost of common stock repurchased
|
(91,240
|
)
|
|
(63,194
|
)
|
|
(111,585
|
)
|
|||
Cash funding transactions with subsidiaries
|
208,943
|
|
|
123,308
|
|
|
236,795
|
|
|||
Stock options exercised
|
353
|
|
|
1,247
|
|
|
—
|
|
|||
Warrants exercised
|
—
|
|
|
532
|
|
|
—
|
|
|||
Cost of warrants repurchased
|
(15,909
|
)
|
|
(4,441
|
)
|
|
—
|
|
|||
Income tax provision on stock awards exercised
|
1,412
|
|
|
2,647
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
80,768
|
|
|
(92,736
|
)
|
|
(109,790
|
)
|
|||
Increase in cash and cash equivalents
|
35,900
|
|
|
31,282
|
|
|
49,683
|
|
|||
Cash and cash equivalents at beginning of period
|
333,982
|
|
|
302,700
|
|
|
253,017
|
|
|||
Cash and cash equivalents at end of period
|
$
|
369,882
|
|
|
$
|
333,982
|
|
|
$
|
302,700
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
34,554
|
|
|
$
|
33,878
|
|
|
$
|
28,426
|
|
Cash paid for income taxes
|
$
|
16,200
|
|
|
$
|
124,461
|
|
|
$
|
15,456
|
|
Non-cash investing activities - Purchases of fixed assets and leasehold improvements that were paid for subsequent to year end
|
$
|
10,272
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash investing activities - Compensation capitalized for internal use software that was paid subsequent to year end
|
$
|
632
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash net funding financing activities with subsidiaries
|
$
|
318,731
|
|
|
$
|
54,510
|
|
|
$
|
131,840
|
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosures
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 15.
|
Exhibits and Financial Statements Schedule
|
NUMBER ASSIGNED
TO EXHIBIT (I.E. 601
OF REGULATION S-K)
|
|
DESCRIPTION OF EXHIBITS
|
|
|
|
2.1
|
|
Amended and Restated Agreement and Plan of Merger, dated as of December 19, 2012 and amended and restated as of April 15, 2013, by and among GETCO Holding Company, LLC, GA-GTCO, LLC, Knight Capital Group, Inc., Knight Holdco, Inc., Knight Acquisition Corp, GETCO Acquisition, LLC and GA-GTCO Acquisition, LLC (exhibits excluded) - Incorporated herein by reference to Exhibit 2.1 of the Registrant's Form 8-K12G3 Current Report filed on July 1, 2013.
|
|
|
|
2.2
|
|
Stock Purchase Agreement, dated July 29, 2013, by and among Knight Libertas Holdings LLC, KCG Holdings, Inc. and UFG Holdings LLC - Incorporated herein by reference to Exhibit 2.1 of the Registrant's Quarterly Report on Form 10-Q filed on August 9, 2013.
|
|
|
|
2.3
|
|
Securities Purchase Agreement, dated January 27, 2015, between Knight Capital Group, Inc. and BATS Global Markets, Inc. - Incorporated herein by reference to Exhibit 2.1 of the Registrant's Form 8-K Current Report filed on January 29, 2015.
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of KCG Holdings, Inc. - Incorporated herein by reference to Exhibit 3.1 of the Registrant's Form 8-K12G3 Current Report filed on July 1, 2013.
|
|
|
|
3.2
|
|
Second Amended and Restated Bylaws of KCG Holdings, Inc. - Incorporated herein by reference to Exhibit 3.2 of the Registrant's Current Report on Form 8-K filed on December 4, 2015.
|
|
|
|
4.1
|
|
Form of Certificate of Class A Common Stock of KCG Holdings, Inc. - Incorporated herein by reference to Exhibit 4.1 of the Registrant's Form 8-K12G3 Current Report filed on July 1, 2013.
|
|
|
|
4.2
|
|
Warrant Agreement, dated July 1, 2013, between KCG Holdings, Inc and Computershare Shareowner Services LLC. - Incorporated herein by reference to Exhibit 4.3 of the Registrant's Form 8-K12G3 Current Report filed on July 1, 2013.
|
|
|
|
4.3
|
|
Form of Class A Warrant Certificate (included in Exhibit 4.3)
|
|
|
|
4.4
|
|
Form of Class B Warrant Certificate (included in Exhibit 4.3)
|
|
|
|
4.5
|
|
Form of Class C Warrant Certificate (included in Exhibit 4.3)
|
|
|
|
4.6
|
|
Indenture, dated March 13, 2015, among KCG Holdings, Inc., the guarantors named therein and The Bank of New York Mellon, as trustee and collateral agent, in connection with the 6.875% senior secured notes due 2020 in the aggregate principal amount of $500,000,000 - Incorporated herein by reference to Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed on March 16, 2015.
|
|
|
|
10.1
|
|
Employment Agreement between the Company and Daniel Coleman - Incorporated herein by reference to Exhibit 10.4 of the Registrant's Form 8-K12G3 Current Report filed on July 1, 2013.
|
|
|
|
10.2
|
|
Amended and Restated Employment Agreement between the Company and Daniel Coleman - Incorporated herein by reference to Exhibit 10.1 of the Registrant's Form 8-K12G3 Current Report filed on April 22, 2016.
|
|
|
|
10.3
|
|
Form of Employment Agreement - Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 8-K Current Report filed August 9, 2013.
|
|
|
|
10.4
|
|
Term Schedule to Employment Agreement between the Company and John McCarthy - Incorporated herein by reference to Exhibit 10.4 of the Registrant's Form 8-K Current Report filed August 9, 2013.
|
|
|
|
10.5
|
|
Term Schedule to Employment Agreement between the Company and Nick Ogurtsov - Incorporated herein by reference to Exhibit 10.5 of the Registrant's Form 8-K Current Report filed August 9, 2013.
|
|
|
|
10.6
|
|
Revised Term Schedule to Employment Agreement between the Company and Jonathan Ross - Incorporated herein by reference to Exhibit 10.1 of the Registrant's Form 10-Q Quarterly Report filed November 12, 2013.
|
|
|
|
10.7
|
|
Term Schedule to Employment Agreement between the Company and Ryan Primmer - Incorporated herein by reference to Exhibit 10.9 of the Registrant's Form 10-K Annual Report filed March 3, 2014.
|
|
|
|
10.8
|
|
Term Schedule to Employment Agreement between the Company and Gregory Tusar - Incorporated herein by reference to Exhibit 10.10 of the Registrant's Form 10-K Annual Report filed March 3, 2014.
|
|
|
|
10.9
|
|
Term Schedule to Employment Agreement between the Company and Steffan Parratt - Incorporated herein by reference to Exhibit 10.12 of the Registrant's Form 10-K Annual Report filed March 2, 2015.
|
|
|
|
10.10
|
|
Employment Agreement, dated March 19, 2014, between KCG Europe Limited and Philip Allison - Incorporated herein by reference to Exhibit 10.2 of the Registrant's Form 8-K Current Report filed January 6, 2015.
|
|
|
|
10.11*
|
|
Term Schedule to Employment Agreement with Michael Blum
|
|
|
|
10.12
|
|
KCG Holdings, Inc. Amended and Restated Equity Incentive Plan - Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 10-Q Quarterly Report filed on August 10, 2015.
|
|
|
|
10.13
|
|
KCG Holdings, Inc. Amended and Restated Executive Incentive Plan - Incorporated herein by reference to Exhibit 10.7 of the Registrant’s Form 8-K12G3 Current Report filed on July 1, 2013.
|
|
|
|
10.14
|
|
KCG Holdings, Inc. Amended and Restated Equity Incentive Plan Form of Restricted Stock Unit Agreement- Incorporated herein by reference to Exhibit 10.8 of the Registrant’s Form 8-K12G3 Current Report filed on July 1, 2013.
|
|
|
|
10.15
|
|
KCG Holdings, Inc. Amended and Restated Equity Incentive Plan Form of Employee Stock Option Agreement- Incorporated herein by reference to Exhibit 10.9 of the Registrant’s Form 8-K12G3 Current Report filed on July 1, 2013.
|
|
|
|
10.16
|
|
KCG Holdings, Inc. Amended and Restated Equity Incentive Plan Form of Employee Stock Appreciation Right Agreement- Incorporated herein by reference to Exhibit 10.10 of the Registrant’s Form 8-K12G3 Current Report filed on July 1, 2013.
|
|
|
|
10.17
|
|
KCG Holdings, Inc. Compensation Recoupment Policy- Incorporated herein by reference to Exhibit 10.16 of the Registrant’s Form 8-K12G3 Current Report filed on July 1, 2013.
|
|
|
|
10.18
|
|
Amended and Restated Aircraft Timeshare Agreement, dated as of April 17, 2014, by and between KCG Holdings, Inc. and Redmont Holdings LLC - Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 10-Q Quarterly Report filed on May 12, 2014.
|
|
|
|
10.19
|
|
Credit Agreement, dated June 5, 2015, by and among KCG Americas LLC, as borrower, KCG Holdings, Inc., as guarantor, the lenders from time to time party thereto, BMO Harris Bank N.A., as administrative agent and collateral agent, Bank of America, N.A., as syndication agent, and BMO Capital Markets and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arrangers and joint book runners - Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on June 9, 2015.
|
|
|
|
10.20
|
|
Security Agreement, dated March 13, 2015 among KCG Holdings, Inc., the guarantors named therein and The Bank of New York Mellon, as trustee and collateral agent - Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on March 16, 2015.
|
|
|
|
10.21
|
|
Master Agreement to Lease Equipment, dated as of October 30, 2009, between Global Colocation Services LLC and Cisco Systems Capital Corporation - Incorporated herein by reference to Exhibit 10.2 of the Registrant’s Form 8-K12G3 Current Report filed on July 1, 2013.
|
|
|
|
10.22
|
|
Guaranty of GETCO Holding Company, LLC under the Master Agreement to Lease Equipment, dated as of October 30, 2009 - Incorporated herein by reference to Exhibit 10.3 of the Registrant’s Form 8-K12G3 Current Report filed on July 1, 2013.
|
|
|
|
10.23
|
|
Master Agreement to Lease Equipment, dated as of March 10, 2014, between KCG Americas LLC and Cisco Systems Capital Corporation - Incorporated herein by reference to Exhibit 10.2 of the Registrant’s 10-Q Quarterly Report filed on May 12, 2014.
|
|
|
|
10.24
|
|
Amendment No. 1 to Master Agreement to Lease Equipment, dated as of March 10, 2014, between KCG Americas LLC and Cisco Systems Capital Corporation - Incorporated herein by reference to Exhibit 10.3 of the Registrant’s 10-Q Quarterly Report filed on May 12, 2014.
|
|
|
|
10.25
|
|
Guaranty of KCG Holdings, Inc. under the Master Agreement to Lease Equipment, dated as of March 13, 2014 - Incorporated herein by reference to Exhibit 10.4 of the Registrant’s 10-Q Quarterly Report filed on May 12, 2014.
|
|
|
|
10.26
|
|
Lease Agreement between KCG Holdings, Inc. and BOP One North End LLC, dated July 31, 2015. - Incorporated herein by reference to Exhibit 10.1 of the Registrant’s 10-Q Quarterly Report filed on November 6, 2015.
|
|
|
|
10.27
|
|
Purchase Agreement, dated as of November 17, 2016, by and between KCG Holdings, Inc. and GA-GTCO Interholdco, LLC. - Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on November 18, 2016.
|
|
|
|
21.1*
|
|
Subsidiaries of the Registrant as of December 31, 2016.
|
|
|
|
23.1*
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
24.1
|
|
Powers of Attorney (included on signature page).
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.1*
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2*
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101**
|
|
The following financial statements from KCG Holdings, Inc's Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Financial Condition at December 31, 2016 and 2015, (ii) Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014 (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014, (iv) Consolidated Statements of Changes in Equity for the years ended December 31, 2016, 2015 and 2014 (v) Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014 and (vi) the Notes to Consolidated Financial Statements.
|
|
|
|
*
|
Filed herewith.
|
**
|
Pursuant to rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
Item 16.
|
Form 10-K Summary
|
KCG HOLDINGS, INC.
|
|
|
|
By:
|
/s/ DANIEL COLEMAN
|
|
Daniel Coleman
|
|
Chief Executive Officer
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ DANIEL COLEMAN
|
|
Chief Executive Officer
|
|
February 24, 2017
|
Daniel Coleman
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ STEFFEN PARRATT
|
|
Chief Financial Officer
|
|
February 24, 2017
|
Steffen Parratt
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ SEAN P. GALVIN
|
|
Chief Accounting Officer
|
|
February 24, 2017
|
Sean P. Galvin
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ CHARLES E. HALDEMAN JR.
|
|
Non-Executive Chairman of the Board
|
|
February 24, 2017
|
Charles E. Haldeman, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ DEBRA J. CHRAPATY
|
|
Director
|
|
February 24, 2017
|
Debra J. Chrapaty
|
|
|
|
|
|
|
|
|
|
/s/ PETER FISHER
|
|
Director
|
|
February 24, 2017
|
Peter Fisher
|
|
|
|
|
|
|
|
|
|
/s/ RENE KERN
|
|
Director
|
|
February 24, 2017
|
Rene Kern
|
|
|
|
|
|
|
|
|
|
/s/ JAMES T. MILDE
|
|
Director
|
|
February 24, 2017
|
James T. Milde
|
|
|
|
|
|
|
|
|
|
/s/ JOHN C. MORRIS
|
|
Director
|
|
February 24, 2017
|
John C. Morris
|
|
|
|
|
|
|
|
|
|
/s/ ALASTAIR RAMPELL
|
|
Director
|
|
February 24, 2017
|
Alastair Rampell
|
|
|
|
|
|
|
|
|
|
/s/ DANIEL F. SCHMITT
|
|
Director
|
|
February 24, 2017
|
Daniel F. Schmitt
|
|
|
|
|
|
|
|
|
|
/s/ LAURIE M. SHAHON
|
|
Director
|
|
February 24, 2017
|
Laurie M. Shahon
|
|
|
|
|
|
|
|
|
|
/s/ COLIN SMITH
|
|
Director
|
|
February 24, 2017
|
Colin Smith
|
|
|
|
|
|
|
|
|
|
/s/ HEATHER TOOKES ALEXOPOULOS
|
|
Director
|
|
February 24, 2017
|
Heather Tookes Alexopoulos
|
|
|
|
|
|
|
|
|
|
/s/ ADRIAN WELLER
|
|
Director
|
|
February 24, 2017
|
Adrian Weller
|
|
|
|
|
1 Year KCG Holdings, Inc. Chart |
1 Month KCG Holdings, Inc. Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions