Knight Capital 8-K Pro Forma Condensed Consolidated Statement of Financial Condition

Exhibit 99.1

KNIGHT CAPITAL GROUP, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

(unaudited)

	December 31, 2006
	As Reported			Adjustments (Note 1)			Pro Forma
	(in thousands)
Assets
Cash and cash equivalents	$	214,760		$	1,000		$	215,760
Securities owned, held at clearing brokers, at market value		711,775						711,775
Receivable from brokers and dealers		372,897						372,897
Asset management fees receivable		112,204						112,204
Investment in Deephaven sponsored funds		187,573						187,573
Fixed assets and leasehold improvements, at cost, less accumulated depreciation and amortization		66,450						66,450
Strategic investments		49,437						49,437
Goodwill		133,043						133,043
Intangible assets, less accumulated amortization		63,701						63,701
Deferred compensation investments		31,586						31,586
Other assets		84,789						84,789
Total assets	$	2,028,215		$	1,000		$	2,029,215
Liabilities and Stockholders’ Equity
Liabilities
Securities sold, not yet purchased, at market value	$	693,071		$	—		$	693,071
Payable to brokers and dealers		47,853						47,853
Accrued compensation expense		227,847			(67,080	)		160,767
Accrued expenses and other liabilities		96,957						96,957
Total liabilities		1,065,728			(67,080	)		998,648
Minority interest in consolidated subsidiaries		—			68,080			68,080
Stockholders’ equity
Class A Common Stock		1,450						1,450
Additional paid-in capital		519,790						519,790
Retained earnings		811,859						811,859
Treasury stock, at cost		(370,612	)					(370,612	)
Total stockholders’ equity		962,487			—			962,487
Total liabilities and stockholders’ equity	$	2,028,215		$	1,000		$	2,029,215

See accompanying Notes to pro forma condensed consolidated financial statements.

KNIGHT CAPITAL GROUP, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

(unaudited)

	September 30, 2007
	As Reported			Adjustments (Note 1)			Pro Forma
	(in thousands)
Assets
Cash and cash equivalents	$	143,175		$	1,000		$	144,175
Securities owned, held at clearing brokers, at market value		371,373						371,373
Receivable from brokers and dealers		352,419						352,419
Asset management fees receivable		8,016						8,016
Investment in Deephaven sponsored funds		199,591						199,591
Fixed assets and leasehold improvements, at cost, less accumulated depreciation and amortization		60,982						60,982
Strategic investments		67,943						67,943
Goodwill		132,833						132,833
Intangible assets, less accumulated amortization		59,352						59,352
Deferred compensation investments		85,146						85,146
Other assets		110,792						110,792
Total assets	$	1,591,622		$	1,000		$	1,592,622
Liabilities and Stockholders’ Equity
Liabilities
Securities sold, not yet purchased, at market value	$	347,541		$	—		$	347,541
Payable to brokers and dealers		48,247						48,247
Accrued compensation expense		188,205			(20,656	)		167,549
Accrued expenses and other liabilities		92,281						92,281
Total liabilities		676,274			(20,656	)		655,618
Minority interest in consolidated subsidiaries		—			21,656			21,656
Stockholders’ equity
Class A Common Stock		1,505						1,505
Additional paid-in capital		576,592						576,592
Retained earnings		884,535						884,535
Treasury stock, at cost		(547,284	)					(547,284	)
Total stockholders’ equity		915,348			—			915,348
Total liabilities and stockholders’ equity	$	1,591,622		$	1,000		$	1,592,622

See accompanying Notes to pro forma condensed consolidated financial statements.

KNIGHT CAPITAL GROUP, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)

	For the year ended December 31, 2006
	As Reported		Adjustments (Note 2)			Pro Forma
	(in thousands, except per share amounts)
Revenues
Commissions and fees	$	410,394	$	—		$	410,394
Net trading revenue		243,761					243,761
Asset management fees, net		213,888					213,888
Interest, net		16,027					16,027
Investment income and other, net		72,219					72,219
Total revenues		956,289		—			956,289
Transaction-based expenses
Execution and clearance fees		106,908					106,908
Soft dollar and commission recapture expense		70,537					70,537
Payments for order flow and ECN rebates		42,191					42,191
Total transaction-based expenses		219,636		—			219,636
Revenues, net of transaction-based expenses		736,653		—			736,653
Other direct expenses
Employee compensation and benefits		352,353		(67,080	)		285,273
Communications and data processing		33,120					33,120
Professional fees		20,568					20,568
Depreciation and amortization		20,641					20,641
Occupancy and equipment rentals		13,536					13,536
Business development		14,343					14,343
Writedown of assets and lease loss accrual		8,480					8,480
Other		17,101					17,101
Total other direct expenses		480,142		(67,080	)		413,062
Income before income taxes and minority interest		256,511		67,080			323,591
Income tax expense		98,165					98,165
Income before minority interest		158,346		67,080			225,426
Minority interest in consolidated subsidiaries		—		(67,080	)		(67,080	)
Net income	$	158,346	$	—		$	158,346
Basic earnings per share	$	1.56	$	—		$	1.56
Diluted earnings per share	$	1.49	$	—		$	1.49
Shares used in computation of basic earnings per share		101,420		—			101,420
Shares used in computation of diluted earnings per share		106,243		—			106,243

See accompanying Notes to pro forma condensed consolidated financial statements.

KNIGHT CAPITAL GROUP, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)

	For the nine months ended September 30, 2007
	As Reported			Adjustments (Note 2)			Pro Forma
	(in thousands, except per share amounts)
Revenues
Commissions and fees	$	342,261		$	—		$	342,261
Net trading revenue		173,490						173,490
Asset management fees, net		88,593						88,593
Interest, net		13,612						13,612
Non-operating gain from subsidiary stock issuance		8,757						8,757
Investment income and other, net		21,274						21,274
Total revenues		647,987			—			647,987
Transaction-based expenses
Execution and clearance fees		95,656						95,656
Payments for order flow and ECN rebates		44,338						44,338
Soft dollar and commission recapture expense		44,261						44,261
Total transaction-based expenses		184,255			—			184,255
Revenues, net of transaction-based expenses		463,732			—			463,732
Other direct expenses
Employee compensation and benefits		252,716			(20,656	)		232,060
Communications and data processing		28,035						28,035
Depreciation and amortization		16,541						16,541
Professional fees		13,961						13,961
Occupancy and equipment rentals		10,691						10,691
Business development		11,805						11,805
Writedown of assets and lease loss accrual		(1,354	)					(1,354	)
Other		9,010						9,010
Total other direct expenses		341,405			(20,656	)		320,749
Income from continuing operations before income taxes		122,327			20,656			142,983
Income tax expense		48,215						48,215
Income from continuing operations before minority interest		74,112			20,656			94,768
Minority interest in income of consolidated subsidiaries		—			(20,656	)		(20,656	)
Net income from continuing operations		74,112			—			74,112
Loss from discontinued operations, net of tax		(1,437	)					(1,437	)
Net income	$	72,675		$	—		$	72,675
Basic earnings per share from continuing operations	$	0.75		$	—		$	0.75
Diluted earnings per share from continuing operations	$	0.73		$	—		$	0.73
Basic and diluted earnings per share from discontinued operations	$	(0.01	)	$	—		$	(0.01	)
Basic earnings per share	$	0.74		$	—		$	0.74
Diluted earnings per share	$	0.71		$	—		$	0.71
Shares used in computation of basic earnings per share		98,809			—			98,809
Shares used in computation of diluted earnings per share		102,081			—			102,081

See accompanying Notes to pro forma condensed consolidated financial statements.

KNIGHT CAPITAL GROUP, INC.

NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1 - The pro forma condensed consolidated statements of financial condition give effect to the contribution by the Company of Deephaven Capital Management, LLC and its subsidiaries (“Deephaven”) to Deephaven Holdings, LLC (“Deephaven Holdings”) in exchange for a 51% interest in Deephaven Holdings, as well as the contribution of $1.0 million of cash by Deephaven Partners LLC (“Deephaven Partners”) to Deephaven Holdings in exchange for a 49% interest in Deephaven Holdings. Amounts that had previously been reported as Accrued compensation expense for performance bonuses payable to the Deephaven managers have been reclassified to Minority interest in consolidated subsidiaries as such amounts are treated as undistributed allocations to Deephaven Partners for purposes of these pro forma statements. For purposes of these pro forma statements, it is assumed that undistributed allocations are paid to Deephaven Partners in January of the following year.

Note 2 - The pro forma condensed statements of operations give effect to the contribution by the Company of Deephaven to Deephaven Holdings in exchange for a 51% interest in Deephaven Holdings, as well as the contribution of $1.0 million of cash by Deephaven Partners to Deephaven Holdings in exchange for a 49% interest in Deephaven Holdings. Amounts that had previously been reported as Employee compensation and benefits have been reclassified to Minority interest in consolidated subsidiaries as such amounts are treated as allocations to Deephaven Partners for purposes of these pro forma statements.