Form 8-K KCG Holdings, Inc. For: Sep 17
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 17, 2015
KCG HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE | 000-54991 | 38-3898306 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No. |
545 Washington Boulevard, Jersey City, NJ 07310
(Address of principal executive offices) (Zip Code)
(201) 222-9400
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 | Regulation FD Disclosure |
Exhibit 99.1 is a copy of a slide presentation to be used by Daniel Coleman, Chief Executive Officer of KCG Holdings, Inc. (KCG), at the Barclays Global Financial Services Conference held on September 17, 2015. The presentation will be webcast live at https://cc.talkpoint.com/barc002/091615a_ae/?entity=54_5ETLLFC (as announced by a press release dated September 15, 2015). A replay of Mr. Colemans presentation will be archived at http://investors.kcg.com. Exhibit 99.1 is incorporated by reference under this Item 7.01. In accordance with general instruction B.2. of Form 8-K, the slides are being furnished pursuant to Item 7.01 and the information contained therein shall not be deemed filed for purposes of Section 18 of the Securities and Exchange Act of 1934.
Item 9.01 | Financial Statements and Exhibits |
(d)
Exhibit 99.1 Slide Presentation for Barclays Global Financial Services Conference held on September 17, 2015.
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 KCGs industry, managements 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); (ii) difficulties and delays in fully realizing cost savings and other benefits of the Mergers and the inability to manage trading strategy performance and sustain revenue and earnings growth; (iii) the sale of KCG Hotspot; (iv) 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; (v) past or future changes to KCGs organizational structure and management; (vi) KCGs ability to develop competitive new products and services in a timely manner and the acceptance of such products and services by KCGs customers and potential customers; (vii) KCGs ability to keep up with technological changes; (viii) KCGs ability to effectively identify and manage market risk, operational and technology risk (such as the events that affected Knight on August 1, 2012), 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 KCGs ability to maintain and expand market share; and (xi) the announced plan to relocate KCGs global headquarters from Jersey City, NJ to New York, NY. 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 KCGs reports with the U.S. Securities and Exchange Commission (SEC), including those detailed under Certain Factors Affecting Results of Operations in the MD&A and in Risk Factors in Part I, Item 1A of KCG s Annual Report on Form 10-K for the year ended December 31, 2014, 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 KCGs Consolidated Financial Statements and the Notes thereto contained in the Quarterly Report on Form 10-Q for the quarter-ended June 30, 2015, and in other reports or documents KCG files with, or furnishes to, the SEC from time to time.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigneds duly authorized signatory.
Dated: September 17, 2015
KCG HOLDINGS, INC. | ||
By: |
/s/ John McCarthy | |
Name: |
John McCarthy | |
Title: |
General Counsel |
EXHIBIT INDEX
Exhibit |
Description | |
99.1 | Slide Presentation for Barclays Global Financial Services Conference held on September 17, 2015. |
KCG Holdings, Inc. (NYSE: KCG) Barclays Global Financial Services Conference September 17, 2015 Exhibit 99.1 |
Safe Harbor Certain statements contained herein may constitute forward-looking statements within the meaning of the safe
harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements are typically identified by words such as believe, expect, anticipate, intend, target, estimate, continue,
positions, prospects or potential, by future conditional verbs such as will, would, should, could or may, or by variations of such words or by similar expressions. These
forward-looking statements are not historical facts and are based on current expectations, estimates and projections about KCG's industry, management's beliefs and certain
assumptions made by management, many of which, by
their nature, are inherently uncertain and beyond our control. Any forward-looking statement contained herein speaks only as of the date on which it is made. Accordingly, readers are cautioned that any such forward-looking
statements are not guarantees of future performance
and are subject to certain risks, uncertainties and assumptions that are difficult to predict including, without limitation, risks associated with: (i) the strategic business combination (the Mergers) of Knight Capital Group, Inc.
(Knight) and GETCO Holding Company, LLC
(GETCO); (ii) difficulties and delays in fully realizing cost savings and other benefits of the Mergers and the inability to manage trading strategy performance and sustain revenue and earnings growth; (iii) the sale of KCG Hotspot; (iv) 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; (v) past or future changes to KCG's 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 (such as the events
that affected Knight on August 1, 2012), 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 announced plan to relocate KCGs global headquarters from Jersey City, NJ to New York, NY. 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 KCGs reports with the U.S.
Securities and Exchange Commission (SEC), including those detailed under Certain Factors Affecting Results of Operations in the MD&A and in Risk Factors in Part I, Item 1A of KCG 's Annual Report on Form 10-K for the year ended
December 31, 2014, 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 KCGs Consolidated Financial Statements and the Notes thereto contained in the Quarterly Report on Form 10-Q for the quarter-ended June
30, 2015, and in other reports or documents KCG
files with, or furnishes to, the SEC from time to time.
For additional disclosures, please see https://www.kcg.com/legal/global-disclosures. |
Investment Rationale 1. A better model for the emerging competitive landscape
pure-play,
execution-only, scalable, non-bank,
non-SIFI 2.
A developer of advanced technologies driving the shift in trading
from analog to digital across asset
classes 3.
Prospects for multiyear organic growth direct from core
capabilities 4.
Strong cash flow generation and demonstrated record of capital
return 5.
Long-term growth opportunities from the continuing after
effects of new regulations instituted in response to
the global financial crisis of 2008 1
|
The KCG Model Market Making Agency Execution Trading Venues KCG helps retail and institutional investors efficiently buy and sell liquid financial assets around the world. A leading, independent global securities firm dedicated exclusively to trading Developer of advanced technologies applicable to market making, agency execution and trading venues in multiple asset classes Delivers consistent, high-quality trade executions that drive trading performance for retail and institutional investors Contributes to better price discovery, deeper liquidity, tighter spreads and lower costs for all market participants Direct-to-client and non-client, exchange-based market making Agency-based trading on behalf of clients Agency-based trading between principals to transactions 2 |
The Competitive Landscape Global banks Proprietary Trading Groups EMSs / OMSs Exchanges ATSs Market Makers Institutional e-Brokers Mid-Size Institutional Brokers KCG¹ 3 Prime Brokers 1 KCG Holdings, Inc. was formed July 1, 2013 by the merger of GETCO Holding Company, LLC and Knight Capital Group,
Inc. Specialized
Full Service
Client Offering
Getting to the Right Strategic Spot in U.S. Trade
Execution Potential Disruptors
Market Leaders |
3Q15 Intra-Quarter Updates Average daily consolidated U.S. equity dollar volume Average realized volatility for the S&P 500 Market conditions in U.S. equities 20.8 9.4 10.3 U.S. equities Non-U.S. equities KCG consolidated revenues for the trailing four quarters 2 Strong market conditions in U.S. equities Consolidated U.S. equity volume and realized volatility for the S&P 500 quarter to date are elevated in comparison to prior reporting periods Retail trading activity QTD is tracking +12% compared to 2Q15 and +21% to 3Q14 Increased activity in global equities QTD Year over year, European equity notional volume up 17% while Asian equity share volume is up 10% Mixed market conditions in fixed income, currencies and commodities QTD Year over year, U.S. Treasuries are essentially flat while currencies are slightly lower As previously disclosed, during 3Q15, KCG will record non-recurring real-estate charges of $25 to $30 million as well as additional Depreciation and amortization of $4.5 to $5 million related to the corporate relocation 4 Sources: KCG, BATS Global Markets, Bloomberg, TRACE, EBS, Reuters
1
3Q15 consolidated U.S. equity volumes and realized volatility for
the S&P 500 represent quarter-to-date activity through September 15, 2015 2 As a category, non-U.S. equities includes European and Asian equities, fixed income, currencies and commodities; Revenues
for the trailing four quarters ended 2Q15 excluding Regulation G items 8,000 2 $400,000 6,000 $300,000 4,000 $200,000 2,000 $100,000 3Q14
2Q15
3Q15 69% 31% 1 Average daily consolidated U.S. equity share volume
|
Market Making 5 Avg. daily exchange-listed U.S. equity share volume Avg. daily U.S. equity dollar volume Direct-to-client market making A leading direct-to-client market maker serving retail brokers and banks globally in an expanding number of asset classes A scale operation with competition based on market coverage, execution quality, reliability and payment for order flow Currently offer liquidity in U.S. equities, listed U.S. options, European equities, U.S. fixed income and currencies Non-client, exchange-based market making A provider of bilateral liquidity best prices for buy and sell orders on public and private markets Active globally in select asset classes that are largely electronic, fairly liquid and centrally cleared Anticipated future growth from the modernization of markets for global equities, fixed income, currencies and commodities Sources: KCG, RegOne, BATS Global Markets, Bloomberg 1 3Q15 data as of September 15, 2015 unless otherwise noted 2 3Q15 SEC Rule 605 U.S. equity share volume includes estimates of August and month-to-date September 2015
activity based on public and proprietary data
2
3Q15 KCG U.S. equity market making trade volumes represent
quarter-to-date activity through August 2015
KCG U.S.
equity market making trade volumes
-25%
0%
25%
50%
75%
-$75
$0
$75
$150
$225
3Q14
2Q15
3Q15
1 Primary drivers of revenues from U.S. equities 1,200 2 $40,000 900 $30,000 600 $20,000 300 $10,000 3Q14
2Q15
3Q15 ³ KCG revenue from U.S. equity market making Avg. daily SEC Rule 605 U.S equity share volume ²
Avg. daily consolidated U.S equity dollar volume Avg. daily consolidated U.S equity share volume Avg. realized volatility for the S&P 500
|
Agency Execution and Trading Venues 6 Agency execution A leading execution-only broker serving mutual funds, hedge funds and pension funds in global equities Offer algorithmic trading as well as sales trading for more complex trades Anticipated future growth from increasing penetration of KCG algorithms among the leading asset managers Trading venues A developer and operator of marketplaces in strategic asset classes Anticipated future growth from the modernization of markets in particular fixed income that remain manual, non-transparent and illiquid A 16.7% stake in global exchange BATS 2 Sources: KCG, BATS Global Markets, TRACE 1 3Q15 consolidated U.S. equity share volume represents quarter-to-date activity through September 15, 2015 while KCG
algorithmic trading and order routing volume is
through August 31, 2015 2
KCGs strategic investment in BATS Global Markets, Inc. is
contained in the Corporate and Other segment
3
3Q15 KCG BondPoint trade volume and market share represents
quarter-to-date activity through August 31, 2015
KCG algorithmic trading and order routing
U.S. equity share volume
KCG BondPoint trade volume and market share
3Q14
2Q15
3Q15
3
3.0
4.0
5.0
6.0
8.0
7.0
200
240
280
320
360
400
3Q14
2Q15
3Q15
1
$90
$105
$120
$135
$150
$165
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
15.0%
17.5%
20.0%
22.5%
25.0%
Avg. daily fixed income par value traded
Market share of corporate bond transactions <250
bonds Market share of muni bond transactions
<250 bonds Avg. daily algorithmic trading and
order routing U.S equity share volume Avg. daily
consolidated U.S. equity share volume
248.2
287.0
318.8
6.1%
6.9%
7.5%
18.9%
19.9%
18.9% |
Cash Management: Deleveraging to Capital Return Debt level Cumulative share repurchases Cash (in $ millions) Sources Uses Approximate cash and cash equivalents at July 1, 2013 1
$ 730
Asset
sales
2
448
Free
cash
flow
3
300
Debt repayments
4
857
Funds received from issuance of debt, net
5
482
Distributions from investments, net
6
58
Share repurchases
7
95
Tender offer
8
330
Income taxes paid
80
Other, net
9
115
Cash and cash equivalents at June 30, 2015
541
Targeted liquidity pool of cash and highly liquid
financial instruments
10
350
Cash
in excess of targeted liquidity pool
11
$ 191
NOTE: Totals may not add due to rounding
7
1 Represents the aggregate cash and cash equivalents held by GETCO Holding Company, LLC and Knight Capital Group,
Inc. at June 30, 2013; also factors in cash activity related to the
Mergers on 7/1 including issuance of $535 million First
Lien Credit Facility, contribution of $55 million from GA offset by
payment to Knight shareholders of $720 million,
funding of escrow account to paydown
Knight Convertibles of $375 million, payment of debt (and interest
on debt) on GETCO's books and fees on
Merger-related debt issuances 2
Asset sales represent aggregate cash received to date from the
sales of Urban Financial of America, KCG's futures commission merchant (FCM) and KCG Hotspot; the value is a gross amount and is not net of taxes payable on the applicable gains; amount also excludes all future consideration 3 Free cash flow represents income from continuing operations less capital expenditures plus non-cash items such as
depreciation and amortization, stock-based compensation and non-GAAP adjustments included in Regulation G tables through 2Q15 4 Debt repayments represents total cash used to redeem 8.25% $305 million Senior Secured Notes plus its make-whole premium
plus $535 million First Lien Credit Facility ($117 million of the paydown of this facility came from the Collateral Account funded on 7/1; $117 million of KCG's cash was then used for the repayment of the remaining principal
outstanding of Knight's Convertible Notes
5 Funds received from issuance of debt, net represents issuance of 6.875% $500 million Senior Secured Notes, net of issuance
discount and fees paid to third parties directly attributable to the debt issuance 6 Distributions from investments, net represents cash received as returns on capital related to KCG's investments, net
of additional
investments
made
7 Represents share repurchases under the $400 million share repurchase program authorized by the KCG Board of Directors and
announced on May 1, 2015 8
Represents the dollar value of shares repurchased and retired under
the modified Dutch auction tender offer completed on June 9, 2015 9 Other represents net uses of cash not included in the other categories, including financing of our financial
instruments 10
Targeted liquidity pool, as described in KCG's quarterly report on
Form 10-Q for the quarter ended June 30, 2015 within Item 3 Quantitative and Qualitative Disclosures About Market Risk 11 Represents cash and other highly liquid financial instruments in excess of the targeted liquidity pool and included within Cash and cash equivalents on
the June 30, 2015 balance sheet $1,215
$495
$425
$250
$500
$750
$1,000
$1,250
KCG debt level and cumulative share repurchases
$0 |
Consolidated Expenses Compensation and benefits Communications and data processing Depreciation and amortization Debt interest expense Professional fees Occupancy and equipment rentals Business development Other 8 Compensation and benefits declined $39.8 million due to decreased headcount and reduced discretionary bonus accruals Communications and data processing decreased $7.1 million due to reduced market data and terminal fees, connectivity costs and maintenance expenses Among transaction-based expenses not included in the chart, Execution and clearance fees declined $17.7 million amid an increase in KCG trade volumes due to better tiered exchange pricing and reduced regulatory transaction fees Among future corporate relocation and other real estate-related expenses - Depreciation and amortization will increase approximately $4.5 to $5 million per quarter from 3Q15 through 4Q16 - Occupancy and equipment rentals will increase approximately $1.5 million per quarter from 4Q15 through 4Q16 1 See addendum for a reconciliation of GAAP to non-GAAP financial results
1H14
1H15
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
First
half
non-GAAP
expenses
$407.7
$359.0
1 |
Prospects for Multiyear Organic Growth 9 Market Making Agency Execution Trading Venues Market Making: Incremental market share gains in U.S. equities from strategic clients, Market making in global equities, fixed income, currencies and commodities, Expansion of the client network in Europe Agency Execution: Expansion of algorithmic trading among U.S. and European asset managers, The continued growth of ETF industry assets under management and trading volume, The potential for unbundling of commissions from other services Trading Venues: Expansion of the KCG BondPoint offering for institutional clients Industry consolidation among ATSs |
|
Regulation G Reconciliation of Non-GAAP Financial Measures (Continuing Operations) 10 Market Making Global Execution Services Corporate and Other Consolidated $ 4,402 $ (9,937) $ (51,579) $ (57,114) 19,844 8,202 803 28,849 - - 16,500 16,500 - - 8,506 8,506 - - 6,327 6,327 $ 24,246 $ (1,735) $ (19,443) $ 3,068 3 months ended June 30, 2015 Reconciliation of GAAP pre-tax to non-GAAP pre-tax:
GAAP income (loss) from continuing operations before
income taxes Accelerated stock-based
compensation Debt make-whole
premium Writedown of capitalized
debt costs Other real estate related
charges Non-GAAP income (loss) from
continuing operations before income taxes |
Regulation G Reconciliation of Non-GAAP Financial Measures (Continuing Operations) 11 Market Making Global Execution Services Corporate and Other Consolidated $ 39,340 $ 381,058 $ (14,270) $ 406,128 - (385,026) - (385,026) - 6,736 - 6,736 - 4,457 - 4,457 - - 132 132 $ 39,340 $ 7,225 $ (14,138) $ 32,427 3 months ended March 31, 2015 Reconciliation of GAAP pre-tax to non-GAAP pre-tax:
GAAP income (loss) from continuing operations before
income taxes Gain on sale of KCG Hotspot
Professional fees related to sale of KCG
Hotspot Compensation expense related
to sale of KCG Hotspot Other real
estate related charges Non-GAAP income (loss) from continuing operations
before income taxes |
Regulation G Reconciliation of Non-GAAP Financial Measures (Continuing Operations) 12 Market Making Global Execution Services Corporate and Other Consolidated $ 42,710 $ 9,968 $ (26,147) $ 26,531 - (2,116) - (2,116) - - 6,117 6,117 $ 42,710 $ 7,852 $ (20,030) $ 30,532 3 months ended December 31, 2014 Reconciliation of GAAP pre-tax to non-GAAP pre-tax:
GAAP income (loss) from continuing operations before
income taxes Gain on sale of FCM
Other real estate related charges
Non-GAAP income (loss) from
continuing operations before income taxes |
Regulation G Reconciliation of Non-GAAP Financial Measures (Continuing Operations) 13 Market Making Global Execution Services Corporate and Other Consolidated $ (8,033) $ (1,664) $ (5,538) $ (15,235) - - (15,105) (15,105) 2,786 3,577 4,158 10,521 - - 301 301 $ (5,247) $ 1,913 $ (16,184) $ (19,518) 3 months ended September 30, 2014 Reconciliation of GAAP pre-tax to non-GAAP pre-tax:
GAAP loss from continuing operations before income taxes
Net gain related to tradeMONSTER
combination with OptionsHouse Compensation
related to reduction in workforce and other employee separations Other real estate related charges Non-GAAP (loss) income from continuing operations before income taxes
|
Regulation G Reconciliation of Non-GAAP Financial Measures (Continuing Operations) Market Making Global Execution Services Corporate and Other Consolidated $ 36,004 $ 736 $ (22,233) $ 14,507 Writedown of capitalized debt costs - - 1,995 1,995 Compensation related to reduction in workforce 383 1,886 800 3,069 Other real estate related charges 452 - 1,489 1,941 $ 36,839 $ 2,622 $ (17,949) $ 21,512 14 3 months ended June 30, 2014 Reconciliation of GAAP pre-tax to non-GAAP pre-tax:
GAAP income (loss) from continuing operations before
income taxes Non-GAAP income (loss) from
continuing operations before income taxes |
Regulation G Reconciliation of Non-GAAP Financial Measures (Continuing Operations) Market Making Global Execution Services Corporate and Other Consolidated $ 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)
Other real estate related charges
359
-
(93)
266
$ 76,391
$ 2,016
$ (20,844)
$ 57,563
15
3 months ended March 31, 2014
Reconciliation of GAAP pre-tax to non-GAAP
pre-tax: GAAP income (loss) from
continuing operations before income taxes
Non-GAAP income (loss) from continuing operations
before income taxes |
Regulation G Reconciliation of Non-GAAP Financial Measures (Continuing Operations) GAAP Adjustments for non-GAAP presentation KCG non-GAAP, normalized expenses Employee compensation and benefits 109,471 28,849 80,622 Communications and data processing 34,240 - 34,240 Depreciation and amortization 20,726 - 20,726 Debt interest expense 9,989 - 9,989 Professional fees 5,694 - 5,694 Occupancy and equipment rentals 7,474 - 7,474 Business development 3,025 - 3,025 Other real estate and debt extinguishment charges 31,333 31,333 - Other 10,652 - 10,652 $ 232,604 $ 60,182 $ 172,422 1 Total expenses exclude transaction-based expenses which fluctuate based on market conditions and client activity.
16
3 months
ended
June
30,
2015
Reconciliation
of
GAAP
expenses
to
KCG
non-GAAP,
normalized expenses:
Total
expenses
1 |
Regulation G Reconciliation of Non-GAAP Financial Measures (Continuing Operations) GAAP Adjustments for non-GAAP presentation KCG non-GAAP, normalized expenses Reconciliation of GAAP expenses to KCG non-GAAP, normalized expenses: Employee compensation and benefits 106,718 4,457 102,261 Communications and data processing 33,764 - 33,764 Depreciation and amortization 20,615 - 20,615 Debt interest expense 8,463 - 8,463 Professional fees 11,181 6,736 4,445 Occupancy and equipment rentals 7,340 - 7,340 Business development 1,857 - 1,857 Other real estate related charges 132 132 - Other 7,808 - 7,808 $ 197,878 $ 11,325 $ 186,553 1 Total expenses exclude transaction-based expenses which fluctuate based on market conditions and client activity.
17
Total
expenses
1
3
months
ended
March
31,
2015 |
Regulation G Reconciliation of Non-GAAP Financial Measures (Continuing Operations) 1 Total expenses exclude transaction-based expenses which fluctuate based on market conditions and client activity.
18
GAAP
Adjustments for
non-GAAP presentation
KCG non-GAAP, normalized
expenses
116,214
-
116,214
36,945
-
36,945
21,224
-
21,224
7,721
-
7,721
5,695
-
5,695
8,514
-
8,514
2,308
-
2,308
6,117
6,117
-
9,822
-
9,822
$ 214,561
$ 6,117
$ 208,444
3 months ended December 31, 2014
Reconciliation of GAAP expenses to KCG
non-GAAP, normalized expenses:
Employee compensation and benefits
Communications and data processing
Depreciation and amortization
Debt interest expense
Professional fees
Occupancy and equipment rentals
Business development
Other real estate related charges
Other
Total expenses¹
|
Regulation G Reconciliation of Non-GAAP Financial Measures (Continuing Operations) 3 months ended September 30, 2014 GAAP Adjustments for non-GAAP presentation KCG non-GAAP, normalized expenses Reconciliation of GAAP expenses to KCG non-GAAP,
normalized expenses:
Employee compensation and benefits
95,307
10,521
84,786
Communications
and data processing
38,576
-
38,576
Depreciation and amortization
20,298
-
20,298
Debt interest expense
7,714
-
7,714
Professional fees
7,161
-
7,161
Occupancy and equipment rentals
7,672
-
7,672
Business development
3,163
-
3,163
Other real estate related charges
301
301
-
Other
10,580
-
10,580
$ 190,772
$ 10,822
$ 179,950
1 Total expenses exclude transaction-based expenses which fluctuate based on market conditions and client activity.
19
Total expenses
1 |
GAAP Adjustments for non-GAAP presentation KCG non-GAAP, normalized expenses Employee compensation and benefits 103,430 3,069 100,361 Communications and data processing 38,279 - 38,279 Depreciation and amortization 19,823 - 19,823 Debt interest expense 7,497 - 7,497 Professional fees 7,337 - 7,337 Occupancy and equipment rentals 8,235 - 8,235 Business development 2,609 - 2,609 Other real estate and debt extinguishment charges
3,936
3,936
-
Other
10,767
-
10,767
Total
expenses
1
$ 201,913
$ 7,005
$ 194,908
Regulation G Reconciliation of Non-GAAP
Financial Measures (Continuing Operations)
1 Total expenses exclude transaction-based expenses which fluctuate based on market conditions and client activity.
20
Reconciliation of GAAP expenses to KCG non-GAAP,
normalized expenses: 3 months ended June 30, 2014 |
GAAP Adjustments for non-GAAP presentation KCG non-GAAP, normalized expenses Employee compensation and benefits 122,319 - 122,319 Communications and data processing 36,796 - 36,796 Depreciation and amortization 20,103 - 20,103 Debt interest expense 9,524 - 9,524 Professional fees 5,402 - 5,402 Occupancy and equipment rentals 8,285 - 8,285 Business development 1,683 - 1,683 Other real estate and debt extinguishment charges
7,823
7,823
-
Other
8,643
-
8,643
Total
expenses
1
$ 220,578
$ 7,823
$ 212,755
Regulation G Reconciliation of Non-GAAP
Financial Measures (Continuing Operations)
1 Total expenses exclude transaction-based expenses which fluctuate based on market conditions and client activity.
21
Reconciliation of GAAP expenses to KCG non-GAAP,
normalized expenses: 3 months ended March 31, 2014 |
|
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