KCG ANNOUNCES
CONSOLIDATED EARNINGS OF $2.47
PER DILUTED SHARE FOR THE FOURTH QUARTER OF
2016
During the quarter, KCG repurchased 19.0 million shares and
8.1 million warrants
for $281.7 million, primarily as
a result of a share exchange with General Atlantic
KCG's book value rose to $20.20 per
share,
tangible book value increased to
$18.71 per share
NEW YORK, New York - January 19,
2017 - KCG Holdings, Inc. (NYSE: KCG) today reported
consolidated earnings of $196.2 million, or $2.47 per diluted
share, for the fourth quarter of 2016. Included in the fourth
quarter pre-tax earnings of $309.9 million is a pre-tax gain of
$331.0 million from the sales of substantially all shares of Bats
Global Markets, Inc. ("Bats") owned by KCG.
Select Financial Results |
($ in thousands, except EPS) |
|
4Q16 |
|
3Q16 |
|
4Q15 |
Total
Revenues |
580,542 |
|
208,532 |
|
264,036 |
Trading revenues, net |
143,355 |
|
113,829 |
|
145,959 |
Commissions and fees |
102,516 |
|
87,842 |
|
94,315 |
Net
Revenues(1) |
147,461 |
|
111,999 |
|
157,686 |
Pre-tax
earnings (loss) |
309,872 |
|
(27,974) |
|
(4,471) |
EPS |
2.47 |
|
(0.13) |
|
(0.03) |
-
See Exhibit 4 for a reconciliation of Total revenues to Net
revenues. Net revenues is a non-GAAP measure the company uses to
measure its performance as well as make certain strategic
decisions.
Fourth Quarter Highlights
-
KCG recorded a pre-tax gain of $331.0 million
from the sales of shares in Bats
-
KCG Market Making increased market share of
retail SEC Rule 605 U.S. equity share volume 5.0 percent year over
year
-
KCG Algorithmic Trading grew average daily U.S.
equity share volume from the 25 largest U.S. asset managers 49.5
percent year over year
-
KCG BondPoint set a new quarterly record for
average daily fixed income par value traded with a 39.1 percent
rise year over year
-
KCG reduced total shares outstanding by 22
percent during the quarter
Daniel Coleman, Chief Executive Officer of KCG,
said, "During the fourth quarter, we monetized a longstanding
investment in Bats through a swap of substantially all of our stake
for all KCG shares and warrants owned by General Atlantic. After
the transaction plus additional open market purchases, KCG's shares
outstanding declined to 67.2 million from 86.2 million from the
prior quarter and the number of warrants outstanding decreased to
5.1 million from 13.2 million. Since the merger, KCG has returned a
cumulative $835.7 million to equity stakeholders. Our focus on
creating value for stockholders enabled KCG to increase tangible
book value per share to $18.71 as of the end of 2016. From an
operating perspective, revenues in the fourth quarter fell below
our expectations reflecting the continuation of a difficult trading
environment. However, a rise in revenues on an operating basis from
the prior quarter reflects the improved market conditions starting
in November."
Full Year 2016
In 2016, KCG continued to distinguish itself as an emerging,
independent, pure-play, technology-driven intermediary in liquid
financial instruments. Growth in core segments of market making and
agency-based trading outpaced market volumes. The firm undertook an
initiative to re-engineer the trading architecture. KCG reduced the
ratio of compensation to net revenues year over year to 42.2
percent. In addition, the firm returned $364.7 million to equity
stakeholders through repurchases of shares and warrants during the
year.
Mr. Coleman commented, "KCG's long-term growth is
aligned with profound, secular changes in technology, regulation
and competition. We are concentrating on attaining scale to enable
us to grow without creating significant costs. In the past
year, we've undertaken a re-engineering of the trading architecture
while managing revenues in a difficult operating
environment. In 2017, we're focused on returning our
revenues to previous levels, changing our infrastructure and
returning capital to shareholders when prudent."
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 fourth
quarter of 2016, the segment generated total revenues of $168.3
million and a pre-tax loss of $8.5 million.
In the fourth quarter of 2016, investors remained
defensive at the outset and continued to reduce exposure to U.S.
equities. A period of heightened trading activity around the U.S.
election dissipated quickly. For the quarter, consolidated U.S.
equity volume remained flat year over year while realized
volatility declined and bid-ask spreads tightened. Despite
continuing strong competition, KCG Market Making grew market share
of retail SEC Rule 605 U.S. equity share volume by 5.0 percent to
approximately 32.4 percent.
Mr. Coleman commented, "A predominantly one-way
market carried over from the third quarter, which can prove
difficult for quantitative trading models. The depressed market
volatility, however, was a surprise given events. While the
financial results for the quarter disappointed, KCG Market Making's
presence in the retail and broader U.S. equity market is as strong
as ever. Additionally, revenue capture per U.S. equity dollar value
traded returned to levels slightly above average in November and
December."
In the third quarter of 2016, the segment
generated total revenues of $136.1 million and a pre-tax loss of
$13.8 million.
In the fourth quarter of 2015, the segment
generated total revenues of $168.2 million and a pre-tax loss of
$5.1 million, which included charges related to asset writedowns of
$14.2 million.
Select Trade Statistics: U.S.
Equity Market Making
|
4Q16 |
|
3Q16 |
|
4Q15 |
Average daily dollar
volume traded ($ millions) |
28,414 |
|
26,352 |
|
28,842 |
Average daily trades
(thousands) |
3,497 |
|
3,288 |
|
3,667 |
Average daily shares
traded (millions) |
6,472 |
|
3,768 |
|
4,698 |
NYSE and NASDAQ
shares traded |
1,000 |
|
949 |
|
922 |
OTC Bulletin
Board and OTC Market shares traded |
5,472 |
|
2,820 |
|
3,775 |
Average revenue
capture per U.S. equity dollar value traded (bps) |
0.83 |
|
0.67 |
|
0.77 |
Global Execution
Services
The Global Execution Services segment comprises agency execution
services and trading venues. During the fourth quarter of 2016, the
segment generated total revenues of $75.5 million and pre-tax
income of $4.5 million.
In the fourth quarter of 2016, an upsurge in the
major market indexes failed to generate meaningful institutional
trading activity. Despite the market conditions, KCG Algorithmic
Trading grew U.S. equity share volume among the 25 largest U.S.
asset managers by 49.5 percent year over year. KCG MatchIt
increased average daily U.S. equity share volume by 30.5 percent
year over year. KCG BondPoint grew market share of corporate and
municipal bond transactions under 250 bonds by 1.8 percent and 3.1
percent, respectively, year over year.
Mr. Coleman commented, "At the start of the
quarter, institutional investors were mainly engaged in de-risking
and fence-sitting. Despite flat consolidated U.S. volume year over
year, KCG Algorithmic Trading increased share volume from strategic
clients. Additionally, KCG BondPoint continued to integrate with
institutional order management systems by launching on Bloomberg to
provide terminal users with access to the electronic fixed income
trading platform."
In the third quarter of 2016, the segment
generated total revenues of $63.7 million and a pre-tax loss of
$0.4 million.
In the fourth quarter of 2015, the segment
generated total revenues of $70.2 million and a pre-tax loss of
$1.1 million, which included a writedown of goodwill of $0.9
million.
Select Trade Statistics: Agency
Execution and Trading Venues
|
4Q16 |
|
3Q16 |
|
4Q15 |
Average daily KCG
Institutional Equities U.S. equities shares traded
(millions)(1) |
228.7 |
|
206.4 |
|
238.4 |
Average daily KCG
BondPoint fixed income par value
traded ($ millions) |
209.6 |
|
201.5 |
|
150.7 |
-
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.
Corporate and Other
The Corporate and Other segment includes strategic investments and
corporate overhead expenses. During the fourth quarter of 2016, the
segment generated total revenues of $336.7 million and pre-tax
income of $313.9 million. This includes a $331.0 million pre-tax
gain from the sales of substantially all shares owned of Bats.
In the third quarter of 2016, the segment
generated total revenues of $8.7 million and a pre-tax loss of
$13.8 million.
In the fourth quarter of 2015, the segment
generated total revenues of $25.6 million and pre-tax income of
$1.8 million which included gains on sales and writedowns of
investments of $19.8 million and $3.2 million, respectively and a
$1.0 million writedown of an intangible asset.
Share Exchange
On November 17, 2016, KCG announced that it entered into a
strategic transaction with General Atlantic. Under the terms
of the transaction, KCG sold 8.9 million shares it owned of Bats in
exchange for all of General Atlantic's 18.7 million shares and 8.1
million warrants of KCG.
Financial Condition
As of December 31, 2016, KCG had $632.2 million in cash and cash
equivalents and total outstanding debt of $454.4 million. KCG had
$1.36 billion in stockholders' equity, equivalent to a book value
of $20.20 per share and tangible book value of $18.71 per share
based on total shares outstanding of 67.2 million, including
restricted stock units.
In addition to the transaction with General
Atlantic, during the fourth quarter of 2016, KCG repurchased 0.3
million shares for approximately $3.7 million under the Company's
stock repurchase program.
KCG's headcount was 952 full-time employees at
December 31, 2016, compared to 981 at September 30, 2016.
Subsequent Events
Subsequent to the fourth quarter, on January 18, 2017, KCG's Board
of Directors authorized a program to repurchase up to a total of
$150 million in shares of the Company's outstanding Class A Common
Stock ("Common Stock") and warrants to purchase shares of Common
Stock ("Warrants"), subject to compliance with the covenants
contained in the Company's debt indenture. This authority replaces
and supersedes all previous board-granted authority. Under the
program, the Company may repurchase shares or Warrants from time to
time in open market transactions, accelerated stock buyback
programs, tender offers, privately-negotiated transactions or by
other means. Repurchases of shares may also be made under a Rule
10b5-1 plan. The timing and amount of repurchase transactions will
be based on market conditions, share price, legal requirements and
other factors. The program has no expiration date and may be
suspended, modified or discontinued at any time without prior
notice. There are no assurances that any repurchases of shares of
Common Stock or Warrants may actually occur.
KCG announced today that its Board of Directors
has appointed Peter Fisher, Colin Smith, Heather Tookes and Adrian
Weller as Directors, effective immediately. KCG also announced that
Rene M. Kern and John C. (Hans) Morris have informed the company
that they will not be seeking reelection at the 2017 Annual Meeting
of Stockholders. It is currently expected that 11 Directors will be
nominated for election at KCG's 2017 Annual Meeting of
Stockholders, 10 of whom would be independent.
Conference Call
KCG will hold a conference call to discuss fourth quarter 2016
financial results starting at 9:00 a.m. Eastern Time today, January
19, 2017. To access the call, dial 888-812-8589 (domestic) or
913-312-0949 (international) and enter passcode 3024760. In
addition, the call will be webcast at
http://edge.media-server.com/m/p/pbtshm7s. 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=3402400&passcode=3402400
and entering passcode 3024760.
Additional information for investors, including a
presentation of the fourth quarter financial results, can be found
at http://investors.kcg.com.
About KCG
KCG is a leading independent securities firm offering investors a
range of services designed to address trading needs across asset
classes, product types and time zones. The firm combines advanced
technology with specialized client service across market making,
agency execution and venues and also engages in principal trading
via exchange-based market making. KCG has multiple access points to
trade global equities, fixed income, options, currencies and
commodities via voice or automated execution. www.kcg.com
Certain statements
contained herein and the documents incorporated by reference
containing the words "believes," "intends," "expects,"
"anticipates," and words of similar meaning, may constitute
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. 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 inability to manage
trading strategy performance and sustain revenue and earnings
growth; (ii) the receipt of additional payments from the sale of
KCG Hotspot that are subject to certain contingencies; (iii)
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; (iv) past or future changes to KCG's organizational
structure and management; (v) 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; (vi) KCG's ability to keep up with technological
changes; (vii) KCG'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; (viii) the cost and other effects of material contingencies,
including litigation contingencies, and any adverse judicial,
administrative or arbitral rulings or proceedings; (ix) the effects
of increased competition and KCG's ability to maintain and expand
market share; (x) the relocation of KCG's global headquarters
from Jersey City, NJ to New York, NY; and (xi) KCG's
ability to complete the sale or disposition of any or all of the
assets or businesses that are classified as held for sale. The list
above is not exhaustive. Because forward looking statements involve
risks and uncertainties, the actual results and performance of KCG
may materially differ from the results expressed or implied by such
statements. Given these uncertainties, readers are cautioned not to
place undue reliance on such forward-looking statements. Unless
otherwise required by law, KCG also disclaims any obligation to
update its view of any such risks or uncertainties or to announce
publicly the result of any revisions to the forward-looking
statements made herein. Readers should carefully review the risks
and uncertainties disclosed in KCG's reports with the U.S.
Securities and Exchange Commission ("SEC"), including those
detailed in "Risk Factors" in Part I, Item 1A of KCG's Annual
Report on Form 10-K for the year ended December 31, 2015 and
in Part II, Item 1A of KCG's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2016, "Legal Proceedings" in Part I, Item 3,
under "Certain Factors Affecting Results of Operations" in
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in Part II, Item 7, in "Quantitative and
Qualitative Disclosures About Market Risk" in Part II, Item 7A, and
in other reports or documents KCG files with, or furnishes to,
the SEC from time to time. This information should be
read in conjunction with KCG's Consolidated Financial Statements
and the Notes thereto contained in its Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, and in other reports or documents
KCG files with, or furnishes to, the SEC from time to
time.
CONTACTS
Sophie
Sohn |
Jonathan
Mairs |
Communications & Marketing |
Investor
Relations |
312-931-2299 |
646-682-6403 |
media@kcg.com |
investors@kcg.com |
KCG HOLDINGS, INC. |
|
|
|
|
|
|
|
|
|
Exhibit
1 |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
For the
three months ended |
|
December 31, 2016 |
|
|
September 30, 2016 |
|
|
December 31, 2015 |
|
(In
thousands, except per share amounts) |
Revenues |
|
|
|
|
|
|
|
|
|
|
Trading revenues, net |
$ |
143,355 |
|
|
$ |
113,829 |
|
|
$ |
145,959 |
Commissions and fees |
|
102,516 |
|
|
|
87,842 |
|
|
|
94,315 |
Interest, net |
|
563 |
|
|
|
677 |
|
|
|
(429) |
Investment income and other, net |
|
334,108 |
|
|
|
6,184 |
|
|
|
24,191 |
Total revenues |
|
580,542 |
|
|
|
208,532 |
|
|
|
264,036 |
Expenses |
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
72,436 |
|
|
|
49,006 |
|
|
|
67,823 |
Execution and clearance fees |
|
75,941 |
|
|
|
71,995 |
|
|
|
66,613 |
Communications and data processing |
|
39,220 |
|
|
|
36,733 |
|
|
|
36,003 |
Depreciation and amortization |
|
22,775 |
|
|
|
21,876 |
|
|
|
25,077 |
Payments for order flow |
|
15,175 |
|
|
|
13,845 |
|
|
|
14,464 |
Collateralized financing interest |
|
10,958 |
|
|
|
10,693 |
|
|
|
8,746 |
Occupancy and equipment rentals |
|
9,781 |
|
|
|
9,275 |
|
|
|
7,842 |
Debt interest expense |
|
9,379 |
|
|
|
9,153 |
|
|
|
10,025 |
Professional fees |
|
4,330 |
|
|
|
4,139 |
|
|
|
5,774 |
Business development |
|
1,252 |
|
|
|
994 |
|
|
|
1,751 |
Writedown of assets and other real estate related
charges |
|
- |
|
|
|
- |
|
|
|
16,154 |
Other |
|
9,423 |
|
|
|
8,797 |
|
|
|
8,235 |
Total expenses |
|
270,670 |
|
|
|
236,506 |
|
|
|
268,507 |
Income (loss) before income taxes |
|
309,872 |
|
|
|
(27,974) |
|
|
|
(4,471) |
Income tax expense (benefit) |
|
113,680 |
|
|
|
(16,760) |
|
|
|
(1,500) |
Net income (loss) |
$ |
196,192 |
|
|
$ |
(11,214) |
|
|
$ |
(2,971) |
Basic earnings (loss) per share |
$ |
2.51 |
|
|
$ |
(0.13) |
|
|
$ |
(0.03) |
Diluted earnings (loss) per share |
$ |
2.47 |
|
|
$ |
(0.13) |
|
|
$ |
(0.03) |
Shares used in computation of basic earnings (loss)
per share |
|
78,089 |
|
|
|
85,009 |
|
|
|
89,184 |
Shares used in computation of diluted earnings
(loss) per share |
|
79,358 |
|
|
|
85,009 |
|
|
|
89,184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
years ended |
|
|
|
|
|
December 31, 2016 |
|
December 31, 2015 |
|
|
|
|
|
(In
thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
Trading revenues, net |
$ |
668,003 |
|
|
$ |
803,181 |
|
|
|
|
Commissions and fees |
|
391,419 |
|
|
|
376,673 |
|
|
|
|
Interest, net |
|
1,625 |
|
|
|
(2,128) |
|
|
|
|
Investment income and other, net |
|
393,365 |
|
|
|
421,384 |
|
|
|
|
Total revenues |
|
1,454,412 |
|
|
|
1,599,110 |
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
295,120 |
|
|
|
405,609 |
|
|
|
|
Execution and clearance fees |
|
295,312 |
|
|
|
265,186 |
|
|
|
|
Communications and data processing |
|
147,986 |
|
|
|
139,263 |
|
|
|
|
Depreciation and amortization |
|
88,790 |
|
|
|
90,231 |
|
|
|
|
Payments for order flow |
|
54,765 |
|
|
|
61,741 |
|
|
|
|
Collateralized financing interest |
|
40,423 |
|
|
|
34,678 |
|
|
|
|
Occupancy and equipment rentals |
|
37,875 |
|
|
|
30,128 |
|
|
|
|
Debt interest expense |
|
37,216 |
|
|
|
40,291 |
|
|
|
|
Professional fees |
|
19,827 |
|
|
|
27,055 |
|
|
|
|
Business development |
|
5,324 |
|
|
|
8,479 |
|
|
|
|
Debt extinguishment charges |
|
- |
|
|
|
25,006 |
|
|
|
|
Writedown of assets and other real estate related
charges |
|
- |
|
|
|
56,642 |
|
|
|
|
Other |
|
35,346 |
|
|
|
34,839 |
|
|
|
|
Total expenses |
|
1,057,984 |
|
|
|
1,219,148 |
|
|
|
|
Income before income taxes |
|
396,428 |
|
|
|
379,962 |
|
|
|
|
Income tax expense |
|
140,731 |
|
|
|
130,858 |
|
|
|
|
Net income |
$ |
255,697 |
|
|
$ |
249,104 |
|
|
|
|
Basic earnings per share |
$ |
3.03 |
|
|
$ |
2.48 |
|
|
|
|
Diluted earnings per share |
$ |
2.97 |
|
|
$ |
2.42 |
|
|
|
|
Shares used in computation of basic earnings per
share |
|
84,405 |
|
|
|
100,437 |
|
|
|
|
Shares used in computation of diluted earnings per
share |
|
86,160 |
|
|
|
102,922 |
|
|
|
|
KCG HOLDINGS,
INC. |
|
|
Exhibit
2 |
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION |
|
|
|
(In thousands) |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
December 31, 2016 |
|
December 31, 2015 |
ASSETS |
|
|
|
|
|
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: |
|
|
|
|
|
Equities |
|
2,343,033 |
|
|
2,129,208 |
Debt securities |
|
175,502 |
|
|
136,387 |
Listed options |
|
19,100 |
|
|
178,360 |
Other financial instruments |
|
30 |
|
|
445 |
Total financial instruments owned, at fair
value |
|
2,537,665 |
|
|
2,444,400 |
Collateralized agreements: |
|
|
|
|
|
Securities borrowed |
|
1,688,222 |
|
|
1,636,284 |
Receivable from brokers, dealers and clearing
organizations |
|
834,444 |
|
|
681,211 |
Fixed assets and leasehold improvements, less |
|
|
|
|
|
accumulated depreciation and amortization |
|
151,664 |
|
|
94,858 |
Investments |
|
30,979 |
|
|
98,943 |
Goodwill and Intangible assets, less accumulated
amortization |
|
100,319 |
|
|
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 |
$ |
6,260,750 |
|
$ |
6,040,535 |
LIABILITIES & 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 |
|
1,127,775 |
|
|
954,902 |
Total collateralized financings |
|
1,500,406 |
|
|
1,418,279 |
Payable to brokers, dealers and clearing
organizations |
|
518,363 |
|
|
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 |
|
4,903,467 |
|
|
4,596,437 |
Equity |
|
|
|
|
|
Class A Common Stock |
|
903 |
|
|
1,060 |
Additional paid-in capital |
|
1,439,412 |
|
|
1,436,671 |
Retained earnings |
|
192,064 |
|
|
192,120 |
Treasury stock, at cost |
|
(277,343) |
|
|
(186,103) |
Accumulated other comprehensive income |
|
2,247 |
|
|
350 |
Total equity |
|
1,357,283 |
|
|
1,444,098 |
Total liabilities and
equity |
$ |
6,260,750 |
|
$ |
6,040,535 |
|
|
|
|
|
|
KCG HOLDINGS, INC. |
|
|
|
|
|
|
|
|
Exhibit
3 |
PRE-TAX
EARNINGS (LOSS) BY BUSINESS SEGMENT |
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended |
|
|
December 31, 2016 |
|
September 30, 2016 |
|
December 31, 2015 |
Market Making |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
168,323 |
|
$ |
136,107 |
|
$ |
168,227 |
Expenses |
|
|
176,814 |
|
|
149,883 |
|
|
173,359 |
Pre-tax loss |
|
|
(8,491) |
|
|
(13,776) |
|
|
(5,132) |
|
|
|
|
|
|
|
|
|
|
Global Execution Services |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
75,510 |
|
|
63,713 |
|
|
70,221 |
Expenses |
|
|
71,009 |
|
|
64,152 |
|
|
71,336 |
Pre-tax earnings (loss) |
|
|
4,501 |
|
|
(439) |
|
|
(1,115) |
|
|
|
|
|
|
|
|
|
|
Corporate and Other |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
336,709 |
|
|
8,712 |
|
|
25,588 |
Expenses |
|
|
22,847 |
|
|
22,471 |
|
|
23,813 |
Pre-tax earnings (loss) |
|
|
313,862 |
|
|
(13,759) |
|
|
1,775 |
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
580,542 |
|
|
208,532 |
|
|
264,036 |
Expenses |
|
|
270,670 |
|
|
236,506 |
|
|
268,507 |
Pre-tax earnings (loss) |
|
$ |
309,872 |
|
$ |
(27,974) |
|
$ |
(4,471) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended |
|
|
|
|
|
December 31, 2016 |
|
December 31, 2015 |
|
|
|
Market Making |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
775,173 |
|
$ |
884,858 |
|
|
|
Expenses |
|
|
681,441 |
|
|
760,829 |
|
|
|
Pre-tax earnings |
|
|
93,732 |
|
|
124,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Execution Services |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
283,756 |
|
|
667,723 |
|
|
|
Expenses |
|
|
271,748 |
|
|
298,766 |
|
|
|
Pre-tax earnings |
|
|
12,008 |
|
|
368,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
395,483 |
|
|
46,529 |
|
|
|
Expenses |
|
|
104,795 |
|
|
159,553 |
|
|
|
Pre-tax earnings (loss) |
|
|
290,688 |
|
|
(113,023) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
1,454,412 |
|
|
1,599,110 |
|
|
|
Expenses |
|
|
1,057,984 |
|
|
1,219,148 |
|
|
|
Pre-tax earnings |
|
$ |
396,428 |
|
$ |
379,962 |
|
|
|
KCG HOLDINGS, INC. |
|
|
|
|
|
|
|
|
Exhibit
4 |
RECONCILIATION OF TOTAL REVENUES
TO NET REVENUES |
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended |
|
|
December 31, 2016 |
|
September 30, 2016 |
|
December 31, 2015 |
Total revenues per Consolidated
Statements of Operations |
|
$ |
580,542 |
|
$ |
208,532 |
|
$ |
264,036 |
Less: |
|
|
|
|
|
|
|
|
|
Execution and clearance fees |
|
|
75,941 |
|
|
71,995 |
|
|
66,613 |
Payments for order flow |
|
|
15,175 |
|
|
13,845 |
|
|
14,464 |
Collaterlaized financing interest |
|
|
10,958 |
|
|
10,693 |
|
|
8,746 |
Gain from the sale of a portion of the Company's
investment in Bats |
|
|
331,007 |
|
|
- |
|
|
- |
Gain on sale of investments |
|
|
- |
|
|
- |
|
|
19,751 |
Writedown of investments |
|
|
- |
|
|
- |
|
|
(3,224) |
Net revenues |
|
$ |
147,461 |
|
$ |
111,999 |
|
$ |
157,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended |
|
|
|
|
|
December 31, 2016 |
|
December 31, 2015 |
|
|
|
Total revenues per Consolidated
Statements of Operations |
|
$ |
1,454,412 |
|
$ |
1,599,110 |
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
Execution and clearance fees |
|
|
295,312 |
|
|
265,186 |
|
|
|
Payments for order flow |
|
|
54,765 |
|
|
61,741 |
|
|
|
Collaterlaized financing interest |
|
|
40,423 |
|
|
34,678 |
|
|
|
Gain from the sale of a portion of the Company's
investment in Bats |
|
|
364,404 |
|
|
- |
|
|
|
Gain on sale of KCG Hotspot |
|
|
- |
|
|
385,026 |
|
|
|
Gain on sale of investments |
|
|
- |
|
|
19,751 |
|
|
|
Writedown of investments |
|
|
- |
|
|
(3,224) |
|
|
|
Net revenues |
|
$ |
699,508 |
|
$ |
835,952 |
|
|
|
|
|
|
|
|
|
|
|
|
|
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: KCG Holdings, Inc. via Globenewswire
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