KCG ANNOUNCES
CONSOLIDATED LOSS OF $0.13 PER SHARE
FOR THE THIRD QUARTER OF 2016
JERSEY CITY, New Jersey - October
20, 2016 - KCG Holdings, Inc. (NYSE: KCG) today reported a
consolidated loss of $11.2 million, or $0.13 per share, for the
third quarter of 2016. The third quarter consolidated loss includes
an income tax benefit of approximately $6.1 million or $0.07 per
share primarily related to tax deductions and credits generated
from the company's software development activities.
Select Financial Results |
($ in thousands, except EPS) |
|
3Q16 |
|
2Q16 |
|
3Q15 |
Total
revenues |
208,532 |
|
319,914 |
|
377,036 |
Trading revenues, net |
113,829 |
|
186,882 |
|
277,677 |
Commissions and fees |
87,842 |
|
94,961 |
|
95,027 |
Net
revenues(1) |
111,999 |
|
190,076 |
|
283,796 |
Pre-tax
(loss) earnings |
(27,974) |
|
54,565 |
|
35,419 |
EPS |
(0.13) |
|
0.38 |
|
0.24 |
-
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.
|
Third Quarter Highlights
-
Averaged approximately 30 percent market share
of retail SEC Rule 605 U.S. equity share volume among the leading
market makers during the quarter
-
Averaged approximately 16 percent market share
of U.S. ETF share volume from market making and agency-based
trading activity during the quarter
-
Completed the migration of KCG MatchIt to a new
matching engine
-
Acquired Neonet Securities AB, an independent
agency broker and execution specialist based in Stockholm,
Sweden
-
Named Mike Blum Chief Technology Officer
effective October 1, 2016
Daniel Coleman, Chief Executive Officer of KCG,
said, "Market activity quickly died down after a brief post-Brexit
flurry to close the second quarter and remained subdued throughout
July and August with cautious trading and realized volatility near
all-time lows. Despite a modest pickup in September, the trading
environment proved challenging for our quantitative trading models.
Although KCG's financial results for the quarter were
disappointing, we nonetheless posted strong market share in core
segments of the market. In addition, we completed the acquisition
of Neonet, which expands KCG's agency-based electronic trading in
Europe ahead of anticipated opportunities from regulatory changes
with the implementation of MiFID II.
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 third
quarter of 2016, the segment generated total revenues of $136.1
million and a pre-tax loss of $13.8 million.
In the third quarter of 2016, market volumes,
realized volatility and bid-ask spreads in U.S. equities contracted
due in part to the uncertain outlook. During the quarter,
consolidated U.S. equity dollar volume declined 15 percent year
over year. Amid intensified competition for retail order flow, KCG
Market Making grew market share of retail U.S. equity share volume
to approximately 30 percent. Market volumes outside U.S. equities
were generally flat to down year over year, led by declines in
European equities and currencies.
Mr. Coleman commented, "The unusually low
volatility and generally poor market conditions combined with
renewed competition for retail order flow negatively impacted the
contribution from U.S. equities for the quarter. KCG market making
underperformed as reflected in the average revenue capture per U.S.
equity dollar value traded for the quarter. Market making outside
U.S. equities faced similarly difficult conditions. As we build
scale in select asset classes and regions, and market conditions
generally improve, we expect contributions outside U.S. equities to
become more significant to the segment revenues."
In the second quarter of 2016, the segment
generated total revenues of $211.8 million and pre-tax income of
$40.5 million.
In the third quarter of 2015, the segment
generated total revenues of $299.8 million and pre-tax income of
$85.4 million, which includes expenses related to asset writedowns
of $4.4 million.
Select Trade Statistics: U.S.
Equity Market Making
|
3Q16 |
|
2Q16 |
|
3Q15 |
Average daily dollar
volume traded ($ millions) |
26,352 |
|
26,046 |
|
31,517 |
Average daily trades
(thousands) |
3,288 |
|
3,577 |
|
4,025 |
Average daily shares
traded (millions) |
3,768 |
|
4,680 |
|
4,823 |
NYSE and NASDAQ
shares traded |
949 |
|
972 |
|
985 |
OTC Bulletin
Board and OTC Market shares traded |
2,820 |
|
3,708 |
|
3,838 |
Average revenue
capture per U.S. equity dollar value traded (bps) |
0.67 |
|
1.07 |
|
1.27 |
Global Execution
Services
The Global Execution Services segment comprises agency execution
services and trading venues. During 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 third quarter of 2016, institutional
trading activity was predominantly defensive given the historic
market valuations, negative outlook for corporate earnings and
potential for disruptive market events. Outflows from U.S. equity
mutual funds increased for the second straight quarter and
redemption pressures on U.S. equity hedge funds continued from the
first half of the year. Amid a 10 percent decline in consolidated
U.S. equity share volume for the quarter compared to a year ago,
KCG Algorithmic Trading grew U.S. equity share volume from the 25
largest U.S. asset managers by five percent. KCG BondPoint grew
fixed income par value traded more than 50 percent year over
year.
Mr. Coleman commented, "The results for agency
trading during the quarter generally follow the declines in market
volumes of U.S. equities and ETFs. Nonetheless, KCG Algorithmic
Trading and KCG BondPoint made further inroads with the leading
asset managers and retail brokers, respectively. As firms elevate
best execution as a fiduciary in trading decisions, I believe we
will become an even more important service provider to our
clients."
In the second quarter of 2016, the segment
generated total revenues of $68.1 million and pre-tax income of
$1.7 million.
In the third quarter of 2015, the segment
generated total revenues of $69.7 million and a pre-tax loss of
$1.1 million.
Select Trade Statistics: Agency
Execution and Trading Venues
|
3Q16 |
|
2Q16 |
|
3Q15 |
Average daily KCG
Institutional Equities U.S. equities shares traded
(millions)(1) |
206.4 |
|
217.5 |
|
236.3 |
Average daily KCG
BondPoint fixed income par value
traded ($ millions) |
201.5 |
|
203.3 |
|
130.5 |
-
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 third quarter of 2016, the
segment generated total revenues of $8.7 million and a pre-tax loss
of $13.8 million.
In the second quarter of 2016, the segment
generated total revenues of $40.0 million and pre-tax income of
$12.4 million. Included in these results is a gain of $33.4 million
from the sale of a portion of the company's investment in Bats
Global Markets, Inc. ("Bats"). Following the sale, KCG retained a
13.7 percent ownership stake in Bats.
In the third quarter of 2015, the segment
generated total revenues of $7.6 million and a pre-tax loss of
$49.0 million, which included a writedown of assets and other real
estate related charges of $29.7 million.
Financial Condition
As of September 30, 2016, KCG had $505.5 million in cash and cash
equivalents and total outstanding debt of $453.5 million. KCG had
$1.44 billion in stockholders' equity, equivalent to a book value
of $16.70 per share and tangible book value, which includes the
value of its assets of businesses held for sale, of $15.54 per
share based on total shares outstanding of 86.2 million, including
restricted stock units.
During the third quarter of 2016, KCG repurchased
warrants for $0.7 million.
KCG's headcount was 981 full-time employees at
September 30, 2016, including 51 employees from the acquisition of
Neonet Securities AB, compared to 942 at June 30, 2016.
Other Events
On September 26, 2016, CBOE Holdings, Inc. ("CBOE") and Bats
announced that they had entered into a definitive merger agreement
pursuant to which CBOE would acquire Bats. As of September 30,
2016, KCG held approximately 13.2 million shares of Bats Common
Stock or approximately 13.7 percent of total Bats Common Stock
outstanding (including the Bats non-voting common stock) based on
the shares outstanding as of July 31, 2016, as reported by Bats in
its Quarterly Report on Form 10-Q for the quarter ended June 30,
2016. In connection with its sale of shares in the IPO, KCG agreed
to a lock-up agreement that restricts KCG's ability to transfer
shares of Bats Common Stock for a period of time following the IPO.
Pursuant to the terms of the lock-up agreement, approximately 4.4
million shares of Bats Common Stock held by KCG have been released
from the lock-up. If the merger between CBOE and Bats is completed,
the lock-up agreement will terminate and any shares of CBOE common
stock that KCG receives in the transaction will be freely
transferable.
Conference Call
KCG will hold a conference call to discuss third quarter 2016
financial results starting at 9:00 a.m. Eastern Time today, October
20, 2016. To access the call, dial 888-596-2581 (domestic) or
913-312-0728 (international) and enter passcode 7871836. In
addition, the call will be webcast at
http://edge.media-server.com/m/p/k72g28av. 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 7871836.
Additional information for investors, including a
presentation of the third 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 grow
revenue and earnings; (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 announced plan to relocate 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 Form10-K for the year ended December 31, 2015, "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 |
201-356-1529 |
media@kcg.com |
jmairs@kcg.com |
KCG HOLDINGS, INC. |
|
|
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|
|
|
|
|
Exhibit
1 |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
For the
three months ended |
|
September 30, 2016 |
|
|
June 30, 2016 |
|
|
September 30, 2015 |
|
(In
thousands, except per share amounts) |
Revenues |
|
|
|
|
|
|
|
|
|
|
Trading revenues, net |
$ |
113,829 |
|
|
$ |
186,882 |
|
|
$ |
277,677 |
Commissions and fees |
|
87,842 |
|
|
|
94,961 |
|
|
|
95,027 |
Interest, net |
|
677 |
|
|
|
267 |
|
|
|
(1,080) |
Investment income and other, net |
|
6,184 |
|
|
|
37,804 |
|
|
|
5,412 |
Total revenues |
|
208,532 |
|
|
|
319,914 |
|
|
|
377,036 |
Expenses |
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
49,006 |
|
|
|
76,092 |
|
|
|
121,597 |
Execution and clearance fees |
|
71,995 |
|
|
|
73,742 |
|
|
|
67,502 |
Communications and data processing |
|
36,733 |
|
|
|
36,376 |
|
|
|
35,256 |
Depreciation and amortization |
|
21,876 |
|
|
|
22,234 |
|
|
|
23,813 |
Payments for order flow |
|
13,845 |
|
|
|
13,090 |
|
|
|
17,121 |
Collateralized financing interest |
|
10,693 |
|
|
|
9,609 |
|
|
|
8,617 |
Occupancy and equipment rentals |
|
9,275 |
|
|
|
9,829 |
|
|
|
7,472 |
Debt interest expense |
|
9,153 |
|
|
|
9,191 |
|
|
|
9,958 |
Professional fees |
|
4,139 |
|
|
|
5,301 |
|
|
|
4,406 |
Business development |
|
994 |
|
|
|
1,960 |
|
|
|
1,846 |
Writedown of assets and other real estate related
charges |
|
- |
|
|
|
- |
|
|
|
34,029 |
Other |
|
8,797 |
|
|
|
7,925 |
|
|
|
10,000 |
Total expenses |
|
236,506 |
|
|
|
265,349 |
|
|
|
341,617 |
(Loss) income before income taxes |
|
(27,974) |
|
|
|
54,565 |
|
|
|
35,419 |
Income tax (benefit) expense |
|
(16,760) |
|
|
|
21,011 |
|
|
|
13,482 |
Net (loss) income |
$ |
(11,214) |
|
|
$ |
33,554 |
|
|
$ |
21,937 |
Basic (loss) earnings per share |
$ |
(0.13) |
|
|
$ |
0.39 |
|
|
$ |
0.24 |
Diluted (loss) earnings per share |
$ |
(0.13) |
|
|
$ |
0.38 |
|
|
$ |
0.24 |
Shares used in computation of basic (loss) earnings
per share |
|
85,009 |
|
|
|
86,138 |
|
|
|
91,134 |
Shares used in computation of diluted (loss)
earnings per share |
|
85,009 |
|
|
|
88,214 |
|
|
|
92,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
nine months ended |
|
|
|
|
|
September 30, 2016 |
|
September 30, 2015 |
|
|
|
|
|
(In
thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
Trading revenues, net |
$ |
524,649 |
|
|
$ |
657,222 |
|
|
|
|
Commissions and fees |
|
288,904 |
|
|
|
282,358 |
|
|
|
|
Interest, net |
|
1,061 |
|
|
|
(1,699) |
|
|
|
|
Investment income and other, net |
|
59,256 |
|
|
|
397,193 |
|
|
|
|
Total revenues |
|
873,870 |
|
|
|
1,335,074 |
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
222,684 |
|
|
|
337,786 |
|
|
|
|
Execution and clearance fees |
|
219,371 |
|
|
|
198,573 |
|
|
|
|
Communications and data processing |
|
108,766 |
|
|
|
103,260 |
|
|
|
|
Depreciation and amortization |
|
66,015 |
|
|
|
65,154 |
|
|
|
|
Payments for order flow |
|
39,590 |
|
|
|
47,277 |
|
|
|
|
Collateralized financing interest |
|
29,465 |
|
|
|
25,932 |
|
|
|
|
Occupancy and equipment rentals |
|
28,094 |
|
|
|
22,286 |
|
|
|
|
Debt interest expense |
|
27,836 |
|
|
|
30,266 |
|
|
|
|
Professional fees |
|
15,497 |
|
|
|
21,281 |
|
|
|
|
Business development |
|
4,073 |
|
|
|
6,728 |
|
|
|
|
Debt extinguishment charges |
|
- |
|
|
|
25,006 |
|
|
|
|
Writedown of assets and other real estate related
charges |
|
- |
|
|
|
40,488 |
|
|
|
|
Other |
|
25,923 |
|
|
|
26,604 |
|
|
|
|
Total expenses |
|
787,314 |
|
|
|
950,641 |
|
|
|
|
Income before income taxes |
|
86,556 |
|
|
|
384,433 |
|
|
|
|
Income tax expense |
|
27,051 |
|
|
|
132,357 |
|
|
|
|
Net income |
$ |
59,505 |
|
|
$ |
252,076 |
|
|
|
|
Basic earnings per share |
$ |
0.69 |
|
|
$ |
2.42 |
|
|
|
|
Diluted earnings per share |
$ |
0.67 |
|
|
$ |
2.36 |
|
|
|
|
Shares used in computation of basic earnings per
share |
|
86,531 |
|
|
|
104,244 |
|
|
|
|
Shares used in computation of diluted earnings per
share |
|
88,481 |
|
|
|
106,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KCG HOLDINGS,
INC. |
|
|
Exhibit
2 |
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION |
|
|
|
(In thousands) |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
September 30, 2016 |
|
December 31, 2015 |
ASSETS |
|
|
|
|
|
Cash and cash equivalents |
$ |
505,462 |
|
$ |
581,313 |
Cash and cash equivalents segregated under federal
and other regulations |
|
3,000 |
|
|
3,000 |
Financial instruments owned, at fair value: |
|
|
|
|
|
Equities |
|
2,641,499 |
|
|
2,129,208 |
Debt securities |
|
251,264 |
|
|
136,387 |
Listed options |
|
12,190 |
|
|
178,360 |
Other financial instruments |
|
- |
|
|
445 |
Total financial instruments owned, at fair
value |
|
2,904,953 |
|
|
2,444,400 |
Collateralized agreements: |
|
|
|
|
|
Securities borrowed |
|
1,958,095 |
|
|
1,636,284 |
Receivable from brokers, dealers and clearing
organizations |
|
696,495 |
|
|
681,211 |
Fixed assets and leasehold improvements, less |
|
|
|
|
|
accumulated depreciation and amortization |
|
135,296 |
|
|
94,858 |
Investments |
|
93,775 |
|
|
98,943 |
Goodwill and Intangible assets, less accumulated
amortization |
|
100,235 |
|
|
100,471 |
Deferred tax asset, net |
|
151,024 |
|
|
151,225 |
Assets of businesses held for sale |
|
8,194 |
|
|
25,999 |
Other assets |
|
194,072 |
|
|
222,831 |
Total assets |
$ |
6,750,601 |
|
$ |
6,040,535 |
LIABILITIES & EQUITY |
|
|
|
|
|
Liabilities |
|
|
|
|
|
Financial instruments sold, not yet purchased, at
fair value: |
|
|
|
|
|
Equities |
$ |
1,927,864 |
|
$ |
1,856,171 |
Debt securities |
|
278,303 |
|
|
105,340 |
Listed options |
|
16,319 |
|
|
151,893 |
Other financial instruments |
|
302 |
|
|
- |
Total financial instruments sold, not yet
purchased, at fair value |
|
2,222,788 |
|
|
2,113,404 |
Collateralized financings: |
|
|
|
|
|
Securities loaned |
|
647,602 |
|
|
463,377 |
Financial instruments sold under agreements to
repurchase |
|
1,034,700 |
|
|
954,902 |
Other collateralized financings |
|
50,000 |
|
|
- |
Total collateralized financings |
|
1,732,302 |
|
|
1,418,279 |
Payable to brokers, dealers and clearing
organizations |
|
647,089 |
|
|
273,805 |
Payable to customers |
|
29,615 |
|
|
17,387 |
Accrued compensation expense |
|
96,087 |
|
|
154,547 |
Accrued expenses and other liabilities |
|
129,548 |
|
|
134,026 |
Debt |
|
453,524 |
|
|
484,989 |
Total liabilities |
|
5,310,953 |
|
|
4,596,437 |
Equity |
|
|
|
|
|
Class A Common Stock |
|
1,090 |
|
|
1,060 |
Additional paid-in capital |
|
1,460,313 |
|
|
1,436,671 |
Retained earnings |
|
251,625 |
|
|
192,120 |
Treasury stock, at cost |
|
(273,270) |
|
|
(186,103) |
Accumulated other comprehensive income |
|
(110) |
|
|
350 |
Total equity |
|
1,439,648 |
|
|
1,444,098 |
Total liabilities and
equity |
$ |
6,750,601 |
|
$ |
6,040,535 |
|
|
|
|
|
|
KCG HOLDINGS, INC. |
|
|
|
|
|
|
|
|
Exhibit
3 |
PRE-TAX
EARNINGS (LOSS) BY BUSINESS SEGMENT |
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended |
|
|
September 30, 2016 |
|
June 30, 2016 |
|
September 30, 2015 |
Market Making |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
136,107 |
|
$ |
211,824 |
|
$ |
299,755 |
Expenses |
|
|
149,883 |
|
|
171,314 |
|
|
214,336 |
Pre-tax (loss) earnings |
|
|
(13,776) |
|
|
40,510 |
|
|
85,419 |
|
|
|
|
|
|
|
|
|
|
Global Execution Services |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
63,713 |
|
|
68,138 |
|
|
69,713 |
Expenses |
|
|
64,152 |
|
|
66,454 |
|
|
70,763 |
Pre-tax (loss) earnings |
|
|
(439) |
|
|
1,684 |
|
|
(1,050) |
|
|
|
|
|
|
|
|
|
|
Corporate and Other |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
8,712 |
|
|
39,952 |
|
|
7,568 |
Expenses |
|
|
22,471 |
|
|
27,581 |
|
|
56,519 |
Pre-tax (loss) earnings |
|
|
(13,759) |
|
|
12,371 |
|
|
(48,951) |
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
208,532 |
|
|
319,914 |
|
|
377,036 |
Expenses |
|
|
236,506 |
|
|
265,349 |
|
|
341,617 |
Pre-tax (loss) earnings |
|
$ |
(27,974) |
|
$ |
54,565 |
|
$ |
35,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months
ended |
|
|
|
|
|
September 30, 2016 |
|
September 30, 2015 |
|
|
|
Market Making |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
606,849 |
|
$ |
716,631 |
|
|
|
Expenses |
|
|
504,626 |
|
|
587,471 |
|
|
|
Pre-tax earnings |
|
|
102,223 |
|
|
129,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Execution Services |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
208,245 |
|
|
597,502 |
|
|
|
Expenses |
|
|
200,739 |
|
|
227,430 |
|
|
|
Pre-tax earnings |
|
|
7,506 |
|
|
370,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
58,776 |
|
|
20,941 |
|
|
|
Expenses |
|
|
81,949 |
|
|
135,740 |
|
|
|
Pre-tax loss |
|
|
(23,173) |
|
|
(114,799) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
873,870 |
|
|
1,335,074 |
|
|
|
Expenses |
|
|
787,314 |
|
|
950,641 |
|
|
|
Pre-tax earnings |
|
$ |
86,556 |
|
$ |
384,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
KCG HOLDINGS, INC. |
|
|
|
|
|
|
|
|
Exhibit
4 |
RECONCILIATION OF TOTAL REVENUES
TO NET REVENUES |
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended |
|
|
September 30, 2016 |
|
June 30, 2016 |
|
September 30, 2015 |
Total revenues per Consolidated
Statements of Operations |
|
$ |
208,532 |
|
$ |
319,914 |
|
$ |
377,036 |
Less: |
|
|
|
|
|
|
|
|
|
Execution and clearance fees |
|
|
71,995 |
|
|
73,742 |
|
|
67,502 |
Payments for order flow |
|
|
13,845 |
|
|
13,090 |
|
|
17,121 |
Collaterlaized financing interest |
|
|
10,693 |
|
|
9,609 |
|
|
8,617 |
Gain from the sale of a portion of the Company's
investment in Bats |
|
|
- |
|
|
33,397 |
|
|
- |
Net revenues |
|
$ |
111,999 |
|
$ |
190,076 |
|
$ |
283,796 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months
ended |
|
|
|
|
|
September 30, 2016 |
|
September 30, 2015 |
|
|
|
Total revenues per Consolidated
Statements of Operations |
|
$ |
873,870 |
|
$ |
1,335,074 |
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
Execution and clearance fees |
|
|
219,371 |
|
|
198,573 |
|
|
|
Payments for order flow |
|
|
39,590 |
|
|
47,277 |
|
|
|
Collaterlaized financing interest |
|
|
29,465 |
|
|
25,932 |
|
|
|
Gain from the sale of a portion of the Company's
investment in Bats |
|
|
33,397 |
|
|
- |
|
|
|
Gain on sale of KCG Hotspot |
|
|
- |
|
|
385,026 |
|
|
|
Net revenues |
|
$ |
552,047 |
|
$ |
678,266 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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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