JERSEY CITY, N.J., May 1,
2015 /PRNewswire/ -- KCG Holdings, Inc. (NYSE:
KCG) today reported consolidated earnings of $249.3 million, or $2.19 per diluted share, for the first quarter of
2015. Included in these results is a pre-tax gain of $373.8 million from the sale of KCG Hotspot net
of professional fees and compensation costs related to the sale.
Excluding these items, on a non-GAAP basis, first quarter 2015
pre-tax income from continuing operations was $32.4 million. A reconciliation of GAAP to
non-GAAP results is included in Exhibit 4.
Select Financial
Results
|
($ in thousands,
except EPS)
|
From Continuing
Operations
|
1Q15
|
|
4Q14
|
|
1Q14
|
Revenues
|
696,156
|
|
346,139
|
|
383,657
|
Non-GAAP
revenues*
|
311,130
|
|
344,023
|
|
374,013
|
Trading
revenues, net
|
208,795
|
|
221,415
|
|
258,297
|
Commissions and fees
|
99,961
|
|
117,326
|
|
112,257
|
GAAP pre-tax
income
|
406,128
|
|
26,531
|
|
59,384
|
GAAP EPS
|
2.19
|
|
0.23
|
|
0.31
|
Non-GAAP pre-tax
income*
|
32,427
|
|
30,532
|
|
57,563
|
* See Exhibit 4 for a reconciliation of GAAP to non-GAAP
results.
First Quarter Highlights
- Market making grew the percentage of consolidated U.S. equity
share and dollar volume on both a quarter over quarter and year
over year basis
- KCG BondPoint grew trade volumes across Corporates, Municipals
and CDs on both a quarter over quarter and year over year
basis
- Completed the sale of KCG Hotspot to BATS Global Markets,
Inc.
- Raised $500 million in 6.875%
Senior Secured Notes due in 2020, repaid $117 million in Convertible Notes upon maturity
in March 2015, and, subsequent to the
quarter, redeemed $305 million in
8.250% Senior Secured Notes due in 2018
- Subsequent to the quarter, announced plans to launch a modified
Dutch auction tender offer for up to $330
million of its common stock as part of an expanded share
repurchase program
"During the first quarter, we accomplished a great deal. On the
cost front, we've relentlessly focused on operating
expenses. On the client front, we continue to develop
strategic relationships. In addition, we closed the sale of KCG
Hotspot to BATS and initiated a process to rationalize our
long-term debt. We've done all this while continuing to build out
and optimize our trading businesses to position them for future
revenue growth," said CEO Daniel
Coleman. "Notwithstanding all of this, we believe we can do
more. We can support our firm's ability to grow with regard to
improving returns on equity and optimizing our capital
structure. To that end, we announced a planned $330 million tender offer at a range of
$13.50 to $14.00 per share. The offer
is a premium to current and historical prices our shares have
traded at since the merger. We believe this is an appropriate
recognition of our stockholders' patience as we have worked through
the integration and we believe this is the right use of
capital as we invest in our future as a new breed of
independent securities firm."
Market Making
The Market Making segment encompasses
direct-to-client and non-client, exchange-based market making
across multiple asset classes and is an active participant in all
major cash, options and futures markets in the U.S., Europe and Asia. During the first quarter of 2015, the
segment generated total revenues of $224.5
million and pre-tax income of $39.3
million.
During the first quarter of 2015, consolidated U.S equity share
and dollar volume posted modest declines quarter over quarter
despite the continued rise of leading market indexes. Retail
investors remained engaged as evidenced by the sustained average
daily SEC Rule 605 share volume and net flows into stocks during
the quarter. Market volumes for fixed income, currencies and
commodities during the quarter were mixed, punctuated by heightened
trading activity from macro events.
Mr. Coleman commented, "KCG's market making results reflect
lower consolidated U.S. equity market volumes compared to the
previous quarter and similar levels of realized volatility.
Anecdotally, we saw improvement in market making in European
equities to European clients, offset by a more difficult quarter in
U.S. options. During the quarter, KCG continued to make progress
building out direct-to-client market making in FX across
regions."
In the fourth quarter of 2014, the segment generated total
revenues of $238.7 million and
pre-tax income of $42.7
million. In the first quarter of 2014, the segment
generated total revenues of $277.3
million and pre-tax income of $76.0
million.
Select Trade Statistics: U.S. Equity Market Making
|
1Q15
|
|
4Q14
|
|
1Q14
|
Average daily dollar
volume traded ($ millions)
|
31,025
|
|
31,621
|
|
27,321
|
Average daily trades
(thousands)
|
3,947
|
|
4,036
|
|
3,958
|
Average daily shares
traded (millions)
|
5,048
|
|
5,241
|
|
14,907
|
NYSE and
NASDAQ shares traded
|
933
|
|
933
|
|
862
|
OTC
Bulletin Board and OTC Market shares traded
|
4,115
|
|
4,308
|
|
14,045
|
Average revenue
capture per U.S. equity dollar value traded (bps)
|
0.92
|
|
0.93
|
|
1.26
|
Global Execution Services
The Global Execution
Services segment comprises agency execution services and trading
venues. During the first quarter of 2015, the segment generated
total revenues of $464.3 million and
pre-tax income of $381.1 million.
Excluding the gain on the sale of KCG Hotspot and related
professional and compensation expenses, the segment generated total
revenues of $79.2 million and pre-tax
income of $7.2 million.
During the first quarter of 2015, KCG's algorithmic trading
continued to add leading institutions as clients. The ETF trading
team posted a strong quarter by developing existing clients and
converting additional prospects. KCG BondPoint generated record
average daily par value traded with growth in volumes of
Corporates, Municipals and CDs.
Mr. Coleman commented, "We believe algorithmic trading is a
real, emerging strength at KCG. The product development process
blends the firm's deep intellectual capital with our advanced
technologies. Client orders benefit from access to KCG's
naturally occurring liquidity from retail and institutional
clients. We continue to focus on growing our business with buyside
clients. During the first quarter, 10 asset management clients
began using KCG algorithms, and we onboarded an additional 16 new
asset management clients. The decline in volume quarter over
quarter reflects a decrease in low margin order routing flow, which
had a minimal impact on revenues."
As previously announced, during the quarter, KCG completed the
sale of KCG Hotspot to BATS Global Markets. First quarter 2015
financial results for the Global Execution Services segment
includes contributions from KCG Hotspot encompassing 50 trading
days until the completion of the sale on March 13, 2015.
In the fourth quarter of 2014, the segment generated total
revenues of $93.4 million and pre-tax
income of $10.0
million. Excluding a gain of $2.1 million from the sale of KCG's futures
commodity merchant (FCM), the segment generated total revenues of
$91.3 million and pre-tax income for
the quarter of $7.9 million. In
the first quarter of 2014, the segment generated total revenues of
$87.2 million and pre-tax income of
$2.0 million.
Select Trade Statistics: Agency Execution and Trading
Venues
|
1Q15
|
|
4Q14
|
|
1Q14
|
Average daily KCG
algorithmic trading and order routing
U.S. equities shares
traded (millions)
|
299.0
|
|
334.3
|
|
281.0
|
Average daily KCG
BondPoint fixed income par value
traded ($
millions)
|
145.8
|
|
130.8
|
|
144.2
|
Average daily KCG
Hotspot notional foreign exchange
dollar value traded
($ billions)*
|
31.1
|
|
31.6
|
|
32.2
|
* Represents KCG Hotspot ADV from January
1, 2015 to March 12, 2015.
Corporate and Other
The Corporate and Other segment
includes strategic investments and corporate overhead expenses.
During the first quarter of 2015, the segment generated total
revenues of $7.3 million and pre-tax
loss of $14.3 million.
In the fourth quarter of 2014, the segment generated total
revenues of $14.0 million and a
pre-tax loss of $26.1
million. Excluding net lease loss accruals of
$6.1 million, the pre-tax loss for
the quarter was $20.0
million. In the first quarter of 2014, the segment
generated total revenues of $19.1
million and a pre-tax loss of $18.7
million. Excluding revenue of $9.6 million from the merger of BATS and Direct
Edge and a write down of $7.6 million
in capitalized debt costs and net lease loss benefit of
$0.1 million, the pre-tax loss for
the quarter was $20.8 million.
Financial Condition
As of March
31, 2015, KCG had $990.5
million in cash and cash equivalents. Total outstanding debt
was $799.8 million (See Debt below).
The Company had $1.78 billion in
stockholders' equity, equivalent to a book value of $15.10 per share and tangible book value of
$13.86 per share based on total
shares outstanding of 118.1 million, including restricted stock
units.
KCG's headcount at March 31, 2015
was 1,038 full-time employees as compared to 1,093 full-time
employees at December 31, 2014, which
included 40 full-time employees of KCG Hotspot.
During the first quarter of 2015, KCG did not repurchase any
shares of KCG Class A Common Stock.
Debt
On March 13, 2015,
KCG provided 30 days' notice that it would call its 8.250%
$305.0 million Senior Secured Notes
due 2018 ("8.250% Notes"), effective April
13, 2015. KCG funded $330.2
million, an amount sufficient to redeem the outstanding
aggregate principal amount of the 8.250% Notes plus accrued
interest, a make whole premium and other costs into an escrow
account. As the 8.250% Notes were redeemed in April, the
$305.0 million remained on the
Consolidated Statement of Financial Condition as of March 31, 2015. The charges for the make-whole
premium of $16.5 million and the
acceleration of capitalized debt costs of $8.8 million will be recorded in the second
quarter of 2015. In addition, upon maturity on March 16, 2015, KCG repaid all of its outstanding
$117.3 million aggregate principal
amount of 3.50% Cash Convertible Senior Subordinated Notes.
Modified Dutch Auction Tender Offer
Subsequent to the
first quarter of 2015, on April 2,
2015, KCG's board of directors authorized an expanded share
repurchase program of up to $400
million of KCG common stock and warrants (including the
$55 million of remaining capacity
under the previously authorized repurchase program). As part of
this authority, KCG expects to commence, on May 4, 2015, a "modified Dutch auction" tender
offer that will remain open for at least 20 business days. Under
the proposed terms of the tender offer, stockholders will have the
opportunity to sell stock to KCG at a specified price per share not
less than $13.50 and not greater than
$14.00. Upon expiration of the tender
offer, and based on the number of shares tendered and the prices
specified by the tendering stockholders, KCG will determine the
lowest price within the range that will allow it to repurchase up
to $330 million of KCG's Class A
common stock (or all Shares properly tendered and not properly
withdrawn if the tender offer is not fully subscribed). All shares
purchased by KCG in the tender offer will be purchased at the same
price. If the aggregate purchase price for shares tendered at or
below the specified purchase price exceeds $330 million, allocations will be made on a
pro rata basis from stockholders tendering at or below the
purchase price, except as otherwise specified in the Offer to
Purchase. The tender offer range represents a premium of 5 percent
to 9 percent above the closing price of KCG's common stock on the
New York Stock Exchange of $12.84 on
April 30, 2015. Assuming the offer is
fully subscribed, KCG will repurchase a minimum of 23.6 million
shares, or 22 percent of its total shares outstanding excluding
restricted stock units (RSUs) as of April
29, 2015. Assuming the tender offer is fully subscribed,
approximately $70 million in
authority will remain in the share repurchase program.
Additional Information Regarding the Tender Offer
The
tender offer described in this press release has not yet commenced.
This press release is for informational purposes only, is not a
recommendation to buy or sell KCG common stock, and does not
constitute an offer to buy or the solicitation to sell shares of
KCG common stock. The tender offer will be made only pursuant to
the Offer to Purchase, Letter of Transmittal and related materials
that KCG expects to file Monday, May
4th with the Securities and Exchange Commission.
Stockholders should read carefully the Offer to Purchase, Letter of
Transmittal and related materials because they contain important
information, including the various terms of, and conditions to, the
tender offer. Once the tender offer is commenced, stockholders will
be able to obtain a free copy of the tender offer statement on
Schedule TO, the Offer to Purchase, Letter of Transmittal and other
documents that KCG will be filing with the Securities and Exchange
Commission at the Commission's website at www.sec.gov or the
investor information section of KCG's website at www.kcg.com.
Conference Call
KCG will hold a conference call to
discuss first quarter 2015 financial results starting at
9:00 a.m. Eastern Time today,
May 1, 2015. To access the call, dial
888-820-9418 (domestic) or 913-312-0399 (international) and enter
passcode 2590902. In addition, the call will be webcast at
http://www.media-server.com/m/acs/60eea8e00b3e41855fa9a4e355bdce2f.
Following the conclusion of the call, a replay will be available by
selecting a number based on country of origin from a list posted
at:
https://replaynumbers.conferencinghub.com/index.aspx?confid=7898269&passcode=7898269 and
entering passcode 2590902.
Additional information for investors, including a presentation
of the first quarter financial results, can be found at
http://investors.kcg.com.
Non-GAAP Financial Presentations
KCG believes that
certain non-GAAP financial presentations, when taken into
consideration with the corresponding GAAP financial presentations,
are important in understanding operating results. Selected
financial information is included in the non-GAAP financial
presentations for the three months ended March 31, 2015, December
31, 2014 and March 31, 2014.
KCG believes the presentations provide a meaningful summary of
revenues and results of operations for each of the three month
periods. Reconciliations of GAAP to non-GAAP results are included
in the schedules in Exhibit 4.
About KCG
KCG is a leading independent securities
firm offering investors and clients a range of services designed to
address trading needs across asset classes, product types and time
zones. The firm combines advanced technology with exceptional
client service across market making, agency execution and venues.
KCG has multiple access points to trade global equities, fixed
income, currencies and commodities via voice or automated
execution. www.kcg.com
Certain statements contained herein may constitute
"forward-looking statements" within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements are typically identified by words
such as "believe," "expect," "anticipate," "intend," "target,"
"estimate," "continue," "positions," "prospects" or "potential," by
future conditional verbs such as "will," "would," "should," "could"
or "may," or by variations of such words or by similar expressions.
These "forward-looking statements" are not historical facts and are
based on current expectations, estimates and projections about
KCG's industry, management's beliefs and certain assumptions made
by management, many of which, by their nature, are inherently
uncertain and beyond our control. Any forward-looking statement
contained herein speaks only as of the date on which it is made.
Accordingly, readers are cautioned that any such forward-looking
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult
to predict including, without limitation, risks associated with:
(i) the strategic business combination (the "Mergers") of Knight
Capital Group, Inc. ("Knight") and GETCO Holding Company, LLC
("GETCO"), including, among other things, (a) difficulties and
delays in integrating the Knight and GETCO businesses or fully
realizing cost savings and other benefits, (b) the inability to
sustain revenue and earnings growth, and (c) customer and client
reactions to the Mergers; (ii) the August 1, 2012 technology issue
that resulted in Knight's broker-dealer subsidiary sending numerous
erroneous orders in NYSE-listed and NYSE Arca securities into the
market and the impact to Knight's business as well as actions taken
in response thereto and consequences thereof; (iii) the sale of
KCG's reverse mortgage origination and securitization business,
sale of KCG's futures commission merchant and the sale of KCG
Hotspot; (iv) changes in market structure, legislative, regulatory
or financial reporting rules, including the increased focus by
regulators, the New York Attorney General, Congress and the media
on market structure issues, and in particular, the scrutiny of high
frequency trading, alternative trading systems, market
fragmentation, colocation, access to market data feeds, and
remuneration arrangements such as payment for order flow and
exchange fee structures; (v) past or future changes to
organizational structure and management; (vi) KCG's ability to
develop competitive new products and services in a timely manner
and the acceptance of such products and services by KCG's customers
and potential customers; (vii) KCG's ability to keep up with
technological changes; (viii) KCG's ability to effectively identify
and manage market risk, operational and technology risk, legal
risk, liquidity risk, reputational risk, counterparty and credit
risk, international risk, regulatory risk, and compliance risk;
(ix) the cost and other effects of material contingencies,
including litigation contingencies, and any adverse judicial,
administrative or arbitral rulings or proceedings; (x) the effects
of increased competition and KCG's ability to maintain and expand
market share; and (xi) the commencement and completion of the
proposed tender offer. The list above is not exhaustive. Readers
should carefully review the risks and uncertainties disclosed in
KCG's reports with the SEC, including, without limitation, those
detailed under "Risk Factors" in KCG's Annual Report on Form 10-K
for the year-ended December 31, 2014, and other reports or
documents KCG files with, or furnishes to, the SEC from time to
time.
KCG HOLDINGS,
INC.
|
|
|
|
|
|
|
|
Exhibit
1
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
|
|
|
March 31,
2015
|
|
|
December 31,
2014
|
|
|
March 31,
2014
|
|
|
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Trading revenues,
net
|
$
|
208,795
|
|
$
|
221,415
|
|
$
|
258,297
|
|
Commissions and
fees
|
|
99,961
|
|
|
117,326
|
|
|
112,257
|
|
Interest,
net
|
|
(23)
|
|
|
(177)
|
|
|
948
|
|
Investment income and
other, net
|
|
387,423
|
|
|
7,575
|
|
|
12,155
|
|
|
Total
revenues
|
|
696,156
|
|
|
346,139
|
|
|
383,657
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
106,718
|
|
|
116,214
|
|
|
122,319
|
|
Execution and
clearance fees
|
|
68,473
|
|
|
82,377
|
|
|
75,501
|
|
Communications and
data processing
|
|
33,764
|
|
|
36,945
|
|
|
36,796
|
|
Depreciation and
amortization
|
|
20,615
|
|
|
21,224
|
|
|
20,103
|
|
Payments for order
flow
|
|
15,221
|
|
|
14,698
|
|
|
22,032
|
|
Professional
fees
|
|
11,181
|
|
|
5,695
|
|
|
5,402
|
|
Debt interest
expense
|
|
8,463
|
|
|
7,721
|
|
|
9,524
|
|
Collateralized
financing interest
|
|
8,456
|
|
|
7,973
|
|
|
6,162
|
|
Occupancy and
equipment rentals
|
|
7,340
|
|
|
8,514
|
|
|
8,285
|
|
Business
development
|
|
1,857
|
|
|
2,308
|
|
|
1,683
|
|
Lease loss accrual,
net
|
|
132
|
|
|
6,117
|
|
|
266
|
|
Writedown of
capitalized debt costs
|
|
-
|
|
|
-
|
|
|
7,557
|
|
Other
|
|
7,808
|
|
|
9,822
|
|
|
8,643
|
|
|
Total
expenses
|
|
290,028
|
|
|
319,608
|
|
|
324,273
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
|
406,128
|
|
|
26,531
|
|
|
59,384
|
Income tax
expense
|
|
156,827
|
|
|
562
|
|
|
22,467
|
Income from
continuing operations, net of tax
|
|
249,301
|
|
|
25,969
|
|
|
36,917
|
Income (loss) from
discontinued operations, net of tax
|
|
-
|
|
|
165
|
|
|
(1,253)
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
$
|
249,301
|
|
$
|
26,134
|
|
$
|
35,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share from continuing operations
|
$
|
2.25
|
|
$
|
0.24
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share from continuing operations
|
$
|
2.19
|
|
$
|
0.23
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share
from discontinued operations
|
$
|
-
|
|
$
|
-
|
|
$
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per
share from discontinued operations
|
$
|
-
|
|
$
|
-
|
|
$
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
|
2.25
|
|
$
|
0.24
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
|
2.19
|
|
$
|
0.23
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computation of basic earnings (loss) per share
|
|
110,782
|
|
|
109,654
|
|
|
115,569
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computation of diluted earnings (loss) per share
|
|
113,615
|
|
|
112,224
|
|
|
117,898
|
|
|
|
|
|
|
|
|
|
|
|
KCG HOLDINGS,
INC.
|
|
|
|
Exhibit
2
|
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2015
|
|
|
December 31,
2014
|
|
|
|
|
|
(In
thousands)
|
ASSETS
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
990,542
|
|
$
|
578,768
|
|
Cash and cash
equivalents segregated under federal and other
regulations
|
|
|
3,000
|
|
|
3,361
|
|
Funds held in
escrow
|
|
|
330,163
|
|
|
-
|
|
Financial instruments
owned, at fair value:
|
|
|
|
|
|
|
|
|
Equities
|
|
|
2,366,225
|
|
|
2,479,910
|
|
|
Listed
options
|
|
|
87,412
|
|
|
144,586
|
|
|
Debt
securities
|
|
|
187,314
|
|
|
82,815
|
|
|
Other financial
instruments
|
|
|
-
|
|
|
60
|
|
Total financial
instruments owned, at fair value
|
|
|
2,640,951
|
|
|
2,707,371
|
|
Collateralized
agreements:
|
|
|
|
|
|
|
|
|
Securities
borrowed
|
|
|
1,685,850
|
|
|
1,632,062
|
|
Receivable from
brokers, dealers and clearing organizations
|
|
|
822,248
|
|
|
1,188,833
|
|
Fixed assets and
leasehold improvements,
|
|
|
|
|
|
|
less accumulated depreciation and amortization
|
|
|
129,171
|
|
|
134,051
|
|
Investments
|
|
|
105,624
|
|
|
100,726
|
|
Goodwill and
Intangible assets, less accumulated amortization
|
|
|
146,539
|
|
|
152,594
|
|
Deferred tax asset,
net
|
|
|
164,298
|
|
|
154,759
|
|
Assets of business
held for sale
|
|
|
-
|
|
|
40,484
|
|
Other
assets
|
|
|
217,408
|
|
|
137,645
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
7,235,794
|
|
$
|
6,830,654
|
|
|
|
|
|
|
|
|
|
LIABILITIES &
EQUITY
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Financial instruments
sold, not yet purchased, at fair value:
|
|
|
|
|
|
|
|
|
Equities
|
|
$
|
1,950,860
|
|
$
|
2,069,342
|
|
|
Listed
options
|
|
|
78,427
|
|
|
115,362
|
|
|
Debt
securities
|
|
|
112,763
|
|
|
101,003
|
|
|
Other financial
instruments
|
|
|
234
|
|
|
-
|
|
Total financial
instruments sold, not yet purchased, at fair value
|
|
|
2,142,284
|
|
|
2,285,707
|
|
Collateralized
financings:
|
|
|
|
|
|
|
|
|
Securities
loaned
|
|
|
792,887
|
|
|
707,744
|
|
|
Financial instruments
sold under agreements to repurchase
|
|
|
905,567
|
|
|
933,576
|
|
Total collateralized
financings
|
|
|
1,698,454
|
|
|
1,641,320
|
|
|
|
|
|
|
|
|
|
|
Payable to brokers,
dealers and clearing organizations
|
|
|
442,586
|
|
|
676,089
|
|
Payable to
customers
|
|
|
12,126
|
|
|
22,110
|
|
Accrued compensation
expense
|
|
|
41,831
|
|
|
114,559
|
|
Accrued expenses and
other liabilities
|
|
|
161,850
|
|
|
136,977
|
|
Income taxes
payable
|
|
|
148,481
|
|
|
-
|
|
Capital lease
obligations
|
|
|
5,080
|
|
|
6,700
|
|
Liabilities of
business held for sale
|
|
|
-
|
|
|
2,356
|
|
Debt
|
|
|
799,847
|
|
|
422,259
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
5,452,539
|
|
|
5,308,077
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Class A Common
Stock
|
|
|
1,296
|
|
|
1,275
|
|
|
Additional paid-in
capital
|
|
|
1,391,368
|
|
|
1,369,298
|
|
|
Retained
earnings
|
|
|
522,081
|
|
|
272,780
|
|
|
Treasury stock, at
cost
|
|
|
(133,188)
|
|
|
(122,909)
|
|
|
Accumulated other
comprehensive income
|
|
|
1,698
|
|
|
2,133
|
Total
equity
|
|
|
1,783,255
|
|
|
1,522,577
|
|
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
|
$
|
7,235,794
|
|
$
|
6,830,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KCG HOLDINGS,
INC.
|
|
|
|
|
|
|
|
|
Exhibit
3
|
PRE-TAX EARNINGS
(LOSS) FROM CONTINUING OPERATIONS BY BUSINESS
SEGMENT*
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months ended
|
|
|
|
March 31,
2015
|
|
|
December 31,
2014
|
|
|
March 31,
2014
|
Market
Making
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
224,548
|
|
$
|
238,740
|
|
$
|
277,346
|
Expenses
|
|
|
185,208
|
|
|
196,030
|
|
|
201,314
|
Pre-tax
earnings
|
|
|
39,340
|
|
|
42,710
|
|
|
76,032
|
|
|
|
|
|
|
|
|
|
|
Global Execution
Services
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
464,266
|
|
|
93,369
|
|
|
87,220
|
Expenses
|
|
|
83,208
|
|
|
83,401
|
|
|
85,204
|
Pre-tax
earnings
|
|
|
381,058
|
|
|
9,968
|
|
|
2,016
|
|
|
|
|
|
|
|
|
|
|
Corporate and
Other
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
7,342
|
|
|
14,030
|
|
|
19,091
|
Expenses
|
|
|
21,612
|
|
|
40,177
|
|
|
37,755
|
Pre-tax
loss
|
|
|
(14,270)
|
|
|
(26,147)
|
|
|
(18,664)
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
696,156
|
|
|
346,139
|
|
|
383,657
|
Expenses
|
|
|
290,028
|
|
|
319,608
|
|
|
324,273
|
Pre-tax
earnings
|
|
$
|
406,128
|
|
$
|
26,531
|
|
$
|
59,384
|
|
|
|
|
|
|
|
|
|
|
* Totals may not add
due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KCG HOLDINGS,
INC.
|
|
|
|
|
|
|
|
Exhibit
4
|
Regulation G
Reconciliation of Non-GAAP financial measures (Continuing
operations)*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2015
|
|
Market
Making
|
|
Global Execution
Services
|
|
Corporate and
Other
|
|
Consolidated
|
Reconciliation of
GAAP Revenues to Non-GAAP
Revenues:
|
|
|
|
|
|
|
|
|
GAAP
Revenues
|
|
$
224,548
|
|
$
464,266
|
|
$
7,342
|
|
$
696,156
|
Gain on sale of KCG
Hotspot
|
|
-
|
|
(385,026)
|
|
-
|
|
(385,026)
|
Non- GAAP
Revenues
|
|
$
224,548
|
|
$
79,240
|
|
$
7,342
|
|
$
311,130
|
|
|
|
|
|
|
|
|
|
|
|
Market
Making
|
|
Global Execution
Services
|
|
Corporate and
Other
|
|
Consolidated
|
Reconciliation of
GAAP Pre-Tax to Non-GAAP
Pre-Tax:
|
|
|
|
|
|
|
|
|
GAAP Income (loss)
from continuing operations before income taxes
|
|
$
39,340
|
|
$
381,058
|
|
$
(14,270)
|
|
$
406,128
|
Gain on sale of KCG
Hotspot
|
|
-
|
|
(385,026)
|
|
-
|
|
(385,026)
|
Professional fees
related to the sale of KCG Hotspot
|
|
-
|
|
6,736
|
|
-
|
|
6,736
|
Compensation expense
related to the sale of KCG Hotspot
|
|
-
|
|
4,457
|
|
-
|
|
4,457
|
Lease loss accrual,
net
|
|
-
|
|
-
|
|
132
|
|
132
|
Non-GAAP Income
(loss) from continuing operations before income
taxes
|
|
$
39,340
|
|
$
7,225
|
|
$
(14,138)
|
|
$
32,427
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2014
|
|
Market
Making
|
|
Global Execution
Services
|
|
Corporate and
Other
|
|
Consolidated
|
Reconciliation of
GAAP Revenues to Non-GAAP
Revenues:
|
|
|
|
|
|
|
|
|
GAAP
Revenues
|
|
$
238,740
|
|
$
93,369
|
|
$
14,030
|
|
$
346,139
|
Gain on sale of
FCM
|
|
-
|
|
(2,116)
|
|
-
|
|
(2,116)
|
Non- GAAP
Revenues
|
|
$
238,740
|
|
$
91,253
|
|
$
14,030
|
|
$
344,023
|
|
|
|
|
|
|
|
|
|
|
|
Market
Making
|
|
Global Execution
Services
|
|
Corporate and
Other
|
|
Consolidated
|
Reconciliation of
GAAP Pre-Tax to Non-GAAP
Pre-Tax:
|
|
|
|
|
|
|
|
|
GAAP Income (loss)
from continuing operations before income taxes
|
|
$
42,710
|
|
$
9,968
|
|
$
(26,147)
|
|
$
26,531
|
Gain on sale of
FCM
|
|
-
|
|
(2,116)
|
|
-
|
|
(2,116)
|
Lease loss accrual,
net
|
|
-
|
|
-
|
|
6,117
|
|
6,117
|
Non-GAAP Income
(loss) from continuing operations before income
taxes
|
|
$
42,710
|
|
$
7,852
|
|
$
(20,030)
|
|
$
30,532
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2014
|
|
Market
Making
|
|
Global Execution
Services
|
|
Corporate and
Other
|
|
Consolidated
|
Reconciliation of
GAAP Revenues to Non-GAAP
Revenues:
|
|
|
|
|
|
|
|
|
GAAP
Revenues
|
|
$
277,346
|
|
$
87,220
|
|
$
19,091
|
|
$
383,657
|
Income resulting from
the merger of BATS and Direct Edge, net
|
|
-
|
|
-
|
|
(9,644)
|
|
(9,644)
|
Non- GAAP
Revenues
|
|
$
277,346
|
|
$
87,220
|
|
$
9,447
|
|
$
374,013
|
|
|
|
|
|
|
|
|
|
|
|
Market
Making
|
|
Global Execution
Services
|
|
Corporate and
Other
|
|
Consolidated
|
Reconciliation of
GAAP Pre-Tax to Non-GAAP
Pre-Tax:
|
|
|
|
|
|
|
|
|
GAAP Income (loss)
from continuing operations before income taxes
|
|
$
76,032
|
|
$
2,016
|
|
$
(18,664)
|
|
$
59,384
|
Writedown of
capitalized debt costs
|
|
-
|
|
-
|
|
7,557
|
|
7,557
|
Income resulting from
the merger of BATS and Direct Edge, net
|
|
-
|
|
-
|
|
(9,644)
|
|
(9,644)
|
Lease loss accrual,
net
|
|
359
|
|
-
|
|
(93)
|
|
266
|
Non-GAAP Income
(loss) from continuing operations before income
taxes
|
|
$
76,391
|
|
$
2,016
|
|
$
(20,844)
|
|
$
57,563
|
|
|
|
|
|
|
|
|
|
* Totals may not
add due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/kcg-announces-consolidated-earnings-of-219-per-diluted-share-for-the-first-quarter-of-2015-300075789.html
SOURCE KCG Holdings, Inc.