Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 01, 2019 | Jun. 30, 2018 | |
Entity Information [Line Items] | |||
Entity Registrant Name | Virtu Financial, Inc. | ||
Entity Central Index Key | 1,592,386 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 1,770.2 | ||
Class A | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 107,284,814 | ||
Class C | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 13,509,886 | ||
Class D | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 69,091,740 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 736,047 | $ 532,887 |
Securities borrowed | 1,399,684 | 1,471,172 |
Securities purchased under agreements to resell | 15,475 | 0 |
Receivables from broker dealers and clearing organizations | 1,101,449 | 972,018 |
Trading assets, at fair value: | ||
Financial instruments owned | 1,848,806 | 2,117,579 |
Financial instruments owned and pledged | 791,115 | 595,043 |
Property, equipment and capitalized software (net of accumulated depreciation of $323,718 and $375,656 as of December 31, 2018 and December 31, 2017, respectively) | 113,322 | 137,018 |
Goodwill | 836,583 | 844,883 |
Intangibles (net of accumulated amortization of $148,644 and $123,408 as of December 31, 2018 and December 31, 2017, respectively) | 83,989 | 111,224 |
Deferred tax assets | 200,359 | 125,760 |
Assets of business held for sale | 0 | 55,070 |
Other assets ($48,273 and $98,364, at fair value, as of December 31, 2018 and December 31, 2017, respectively) | 254,149 | 357,352 |
Total assets | 7,380,978 | 7,320,006 |
Liabilities | ||
Short-term borrowings | 15,128 | 27,883 |
Securities loaned | 1,130,039 | 754,687 |
Securities sold under agreements to repurchase | 281,861 | 390,642 |
Payables to broker dealers and clearing organizations | 567,441 | 716,205 |
Trading liabilities, at fair value: | ||
Financial instruments sold, not yet purchased | 2,475,395 | 2,384,598 |
Tax receivable agreement obligations | 214,403 | 147,040 |
Accounts payable and accrued expenses and other liabilities | 294,975 | 358,825 |
Long-term borrowings | 907,037 | 1,388,548 |
Total liabilities | 5,886,279 | 6,168,428 |
Commitments and Contingencies (Note 15) | ||
Virtu Financial Inc. Stockholders' equity | ||
Treasury stock, at cost, 2,178,771 and 616,923 shares at December 31, 2018 and December 31, 2017, respectively | (55,005) | (11,041) |
Additional paid-in capital | 1,010,468 | 900,746 |
Retained earnings (accumulated deficit) | 96,513 | (62,129) |
Accumulated other comprehensive income | (82) | 2,991 |
Total Virtu Financial Inc. stockholders' equity | 1,051,896 | 830,569 |
Noncontrolling interest | 442,803 | 321,009 |
Total equity | 1,494,699 | 1,151,578 |
Total liabilities and equity | 7,380,978 | 7,320,006 |
Class A | ||
Virtu Financial Inc. Stockholders' equity | ||
Common stock (par value $0.00001) | 1 | 1 |
Class B | ||
Virtu Financial Inc. Stockholders' equity | ||
Common stock (par value $0.00001) | 0 | 0 |
Class C | ||
Virtu Financial Inc. Stockholders' equity | ||
Common stock (par value $0.00001) | 0 | 0 |
Class D | ||
Virtu Financial Inc. Stockholders' equity | ||
Common stock (par value $0.00001) | $ 1 | $ 1 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accumulated depreciation | $ 323,718 | $ 375,656 |
Intangibles, accumulated amortization | 148,644 | 123,408 |
Fair value of other assets | $ 48,273 | $ 98,364 |
Treasury stock, shares (in shares) | 2,178,771 | 616,923 |
Class A | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 108,955,048 | 90,415,532 |
Common stock, shares outstanding (in shares) | 106,776,277 | 89,798,609 |
Class B | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 175,000,000 | 175,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Class C | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 90,000,000 | 90,000,000 |
Common stock, shares issued (in shares) | 13,749,886 | 17,880,239 |
Common stock, shares outstanding (in shares) | 13,749,886 | 17,880,239 |
Class D | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 175,000,000 | 175,000,000 |
Common stock, shares issued (in shares) | 69,091,740 | 79,610,490 |
Common stock, shares outstanding (in shares) | 69,091,740 | 79,610,490 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Trading income, net | $ 1,266,682 | $ 766,027 | $ 665,465 |
Interest and dividends income | 87,508 | 50,407 | 26,419 |
Commissions, net and technology services | 184,339 | 116,503 | 10,352 |
Total revenue | 1,878,718 | 1,027,982 | 702,272 |
Operating Expenses: | |||
Brokerage, exchange and clearance fees, net | 301,779 | 256,926 | 221,214 |
Communication and data processing | 176,120 | 131,506 | 71,001 |
Employee compensation and payroll taxes | 215,556 | 177,489 | 85,295 |
Payments for order flow | 74,645 | 27,727 | 0 |
Interest and dividends expense | 141,814 | 91,993 | 56,557 |
Operations and administrative | 64,749 | 61,466 | 23,358 |
Depreciation and amortization | 61,154 | 47,327 | 29,703 |
Amortization of purchased intangibles and acquired capitalized software | 26,123 | 15,447 | 211 |
Termination of office leases | 23,357 | 3,671 | (319) |
Debt issue cost related to debt refinancing and prepayment | 11,727 | 10,460 | 5,579 |
Transaction advisory fees and expenses | 11,487 | 25,270 | 0 |
Reserve for legal matters | 2,020 | 657 | 0 |
Charges related to share based compensation at IPO | 24 | 772 | 1,755 |
Financing interest expense on long-term borrowings | 71,800 | 64,107 | 28,327 |
Total operating expenses | 1,182,355 | 914,818 | 522,681 |
Income before income taxes and noncontrolling interest | 696,363 | 113,164 | 179,591 |
Provision for income taxes | 76,171 | 94,266 | 21,251 |
Net income | 620,192 | 18,898 | 158,340 |
Noncontrolling interest | (330,751) | (15,959) | (125,360) |
Net income available for common stockholders | $ 289,441 | $ 2,939 | $ 32,980 |
Earnings per share | |||
Basic (in dollars per share) | $ 2.82 | $ 0.03 | $ 0.83 |
Diluted (in dollars per share) | $ 2.78 | $ 0.03 | $ 0.83 |
Weighted average common shares outstanding | |||
Basic (in shares) | 100,875,793 | 62,579,147 | 38,539,091 |
Diluted (in shares) | 102,089,139 | 62,579,147 | 38,539,091 |
Comprehensive income | |||
Net income | $ 620,192 | $ 18,898 | $ 158,340 |
Other comprehensive income | |||
Foreign exchange translation adjustment, net of taxes | (5,127) | 9,117 | (1,165) |
Comprehensive income | 615,065 | 28,015 | 157,175 |
Less: Comprehensive income attributable to noncontrolling interest | (328,697) | (21,833) | (124,546) |
Comprehensive income attributable to common stockholders | 286,368 | 6,182 | 32,629 |
Other, net | |||
Revenues: | |||
Total revenue | $ 340,189 | $ 95,045 | $ 36 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Total Virtu Financial Inc. Stockholders' Equity | Common StockClass A | Common StockClass C | Common StockClass D | Treasury Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Non-Controlling Interest |
Balance at beginning period (in shares) at Dec. 31, 2015 | 38,379,858 | 20,976,598 | 79,610,490 | 169,649 | ||||||
Balance at beginning of period at Dec. 31, 2015 | $ 557,870 | $ 130,708 | $ 0 | $ 0 | $ 1 | $ (3,819) | $ 130,902 | $ 3,525 | $ 99 | $ 427,162 |
Increase (decrease) in stockholder's/members' equity | ||||||||||
Share based compensation (in shares) | 953,054 | (58,070) | ||||||||
Share based compensation | 24,893 | 24,893 | 24,893 | |||||||
Repurchase of Class C common stock (in shares) | (4,153) | |||||||||
Repurchase of Class C common stock | (98) | (98) | (98) | |||||||
Treasury stock purchases (in shares) | (283,417) | |||||||||
Treasury stock purchases | (4,539) | (4,539) | $ (4,539) | |||||||
Net income | 158,340 | 32,980 | 32,980 | 125,360 | ||||||
Foreign exchange translation adjustment | (1,165) | (351) | (351) | (814) | ||||||
Distribution from Virtu Financial to non-controlling interest | (162,969) | (162,969) | ||||||||
Dividends | (37,759) | (37,759) | (37,759) | |||||||
Issuance of common stock in connection with secondary offering, net of offering costs (in shares) | 1,103,668 | |||||||||
Issuance of common stock in connection with secondary offering, net of offering costs | 16,677 | 16,677 | 16,677 | |||||||
Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with secondary offering (in shares) | (1,103,668) | |||||||||
Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with secondary offering | (17,383) | (17,383) | (17,383) | |||||||
Issuance of tax receivable agreements in connection with secondary offering | 545 | 545 | 545 | |||||||
Balance at end of period at Dec. 31, 2016 | 534,412 | 145,673 | $ 0 | $ 0 | $ 1 | $ (8,358) | 155,536 | (1,254) | (252) | 388,739 |
Balance at end of period (in shares) at Dec. 31, 2016 | 40,436,580 | 19,810,707 | 79,610,490 | 453,066 | ||||||
Increase (decrease) in stockholder's/members' equity | ||||||||||
Share based compensation (in shares) | 546,265 | (34,019) | ||||||||
Share based compensation | 16,846 | 16,846 | 16,846 | |||||||
Repurchase of Class C common stock (in shares) | (540,686) | |||||||||
Repurchase of Class C common stock | (9,143) | (9,143) | (9,143) | |||||||
Treasury stock purchases (in shares) | (163,857) | |||||||||
Treasury stock purchases | (2,683) | (2,683) | $ (2,683) | |||||||
Net income | 18,898 | 2,939 | 2,939 | 15,959 | ||||||
Foreign exchange translation adjustment | 9,117 | 3,243 | 3,243 | 5,874 | ||||||
Distribution from Virtu Financial to non-controlling interest | (89,563) | (89,563) | ||||||||
Dividends | (63,814) | (63,814) | (63,814) | |||||||
Issuance of Class A common stock (in shares) | 48,076,924 | |||||||||
Issuance of Class A common stock | 735,974 | 735,974 | $ 1 | 735,973 | ||||||
Issuance of common stock in connection with employee exchanges (in shares) | 1,355,763 | |||||||||
Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with employee exchanges (in shares) | (1,355,763) | |||||||||
Issuance of tax receivable agreements in connection with employee exchange | 1,534 | 1,534 | 1,534 | |||||||
Balance at end of period at Dec. 31, 2017 | 1,151,578 | 830,569 | $ 1 | $ 0 | $ 1 | $ (11,041) | 900,746 | (62,129) | 2,991 | 321,009 |
Balance at end of period (in shares) at Dec. 31, 2017 | 90,415,532 | 17,880,239 | 79,610,490 | (616,923) | ||||||
Increase (decrease) in stockholder's/members' equity | ||||||||||
Share based compensation (in shares) | 1,027,861 | |||||||||
Share based compensation | 34,909 | 34,909 | 34,909 | |||||||
Repurchase of Class C common stock (in shares) | (210,891) | |||||||||
Repurchase of Class C common stock | (8,216) | (8,216) | (8,216) | |||||||
Treasury stock purchases (in shares) | (1,007,230) | (1,561,848) | ||||||||
Treasury stock purchases | (66,218) | (66,218) | $ (43,964) | (22,254) | ||||||
Stock option exercised (in shares) | 4,080,673 | |||||||||
Stock option exercised | 76,754 | 76,754 | 76,754 | |||||||
Net income | 620,192 | 289,441 | 289,441 | 330,751 | ||||||
Foreign exchange translation adjustment | (5,127) | (3,073) | (3,073) | (2,054) | ||||||
Distribution from Virtu Financial to non-controlling interest | (206,903) | (206,903) | ||||||||
Dividends | (100,329) | (100,329) | (100,329) | |||||||
Issuance of common stock in connection with secondary offering, net of offering costs (in shares) | 10,518,750 | (10,518,750) | ||||||||
Issuance of common stock in connection with secondary offering, net of offering costs | (950) | (950) | (950) | |||||||
Issuance of common stock in connection with employee exchanges (in shares) | 3,919,462 | |||||||||
Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with employee exchanges (in shares) | (3,919,462) | |||||||||
Issuance of tax receivable agreements in connection with employee exchange | (991) | (991) | (991) | |||||||
Balance at end of period at Dec. 31, 2018 | $ 1,494,699 | $ 1,051,896 | $ 1 | $ 0 | $ 1 | $ (55,005) | $ 1,010,468 | $ 96,513 | $ (82) | $ 442,803 |
Balance at end of period (in shares) at Dec. 31, 2018 | 108,955,048 | 13,749,886 | 69,091,740 | (2,178,771) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||
Net Income (loss) | $ 620,192 | $ 18,898 | $ 158,340 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 61,154 | 47,327 | 29,703 |
Amortization of purchased intangibles and acquired capitalized software | 26,123 | 15,447 | 211 |
Debt issue cost related to debt refinancing and prepayment | 10,645 | 10,460 | 5,579 |
Amortization of debt issuance costs and deferred financing fees | 10,419 | 5,822 | 1,690 |
Termination of office leases | 23,357 | 3,671 | 0 |
Share based compensation | 31,934 | 26,259 | 22,866 |
Reserve for legal matters | 2,020 | 657 | 0 |
Write-down of assets | 3,239 | 1,216 | 428 |
Connectivity early termination | 2,000 | 0 | 0 |
Tax receivable agreement obligation reduction | 0 | (86,599) | 0 |
Deferred taxes | 4,131 | 102,973 | 13,313 |
Gain on sale of businesses | (335,211) | 0 | 0 |
Other | 418 | (4,577) | (1,070) |
Changes in operating assets and liabilities: | |||
Securities borrowed | 71,488 | 155,277 | 233,291 |
Securities purchased under agreements to resell | (15,475) | 16,894 | 14,981 |
Receivables from broker dealers and clearing organizations | (129,431) | 26,145 | 27,808 |
Trading assets, at fair value | 72,701 | 1,210,599 | (530,668) |
Other assets | 125,272 | 44,494 | 772 |
Securities loaned | 375,352 | 366,295 | (302,400) |
Securities sold under agreements to repurchase | (108,781) | (450,964) | 0 |
Payables to broker dealers and clearing organizations | (148,764) | (516,376) | 209,374 |
Trading liabilities, at fair value | 90,797 | (721,204) | 370,065 |
Accounts payable and accrued expenses and other liabilities | (78,985) | 17,860 | (14,684) |
Net cash provided by operating activities | 714,595 | 290,574 | 239,599 |
Cash flows from investing activities | |||
Development of capitalized software | (21,482) | (14,158) | (8,404) |
Acquisition of property and equipment | (26,467) | (18,932) | (11,859) |
Proceeds from sale of telecommunication assets | 600 | 0 | 0 |
Investment in joint ventures | (23,669) | 0 | 0 |
Investment in SBI Japannext | 0 | 0 | (38,754) |
Acquisition of KCG Holdings, net of cash acquired, described in Note 3 | 0 | (799,632) | 0 |
Acquisition of Teza Technologies | 0 | (5,594) | 0 |
Net cash provided by (used in) investing activities | 329,174 | (838,016) | (59,017) |
Cash flows from financing activities | |||
Distribution from Virtu Financial to non-controlling interest | (206,903) | (89,563) | (162,969) |
Dividends | (100,329) | (63,814) | (37,759) |
Repurchase of stock | (66,218) | (2,683) | (4,539) |
Stock option exercised | 76,754 | 0 | 0 |
Short-term borrowings, net | (15,000) | 7,000 | (20,000) |
Proceeds from long-term borrowings | 0 | 1,115,036 | 75,753 |
Repayment of long term borrowings | (500,000) | (256,473) | (3,825) |
Repayment of KCG Notes | 0 | (480,987) | 0 |
Tax receivable agreement obligations | (12,359) | (7,045) | 0 |
Debt issuance costs | (2,261) | (56,505) | (5,094) |
Issuance of common stock, net of offering costs | 0 | 735,974 | 0 |
Issuance of common stock in connection with secondary offering, net of offering costs | (950) | 0 | 16,677 |
Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with secondary offering | 0 | 0 | (17,383) |
Net cash provided by (used in) financing activities | (835,482) | 889,797 | (161,237) |
Effect of exchange rate changes on cash and cash equivalents | (5,127) | 9,117 | (1,165) |
Net increase (decrease) in cash and cash equivalents | 203,160 | 351,472 | 18,180 |
Cash and cash equivalents beginning of period | 532,887 | 181,415 | 163,235 |
Cash and cash equivalents, end of period | 736,047 | 532,887 | 181,415 |
Supplementary disclosure of cash flow information | |||
Cash paid for interest | 139,412 | 112,982 | 54,872 |
Cash paid for taxes | 93,991 | 5,976 | 16,175 |
Non-cash investing activities | |||
Share based compensation to developers relating to capitalized software | 2,936 | 1,605 | 2,750 |
Non-cash financing activities | |||
Tax receivable agreement described in Note 6 | (991) | 1,534 | 545 |
Discount on issuance of senior secured credit facility | 0 | 1,438 | 1,350 |
Secondary offerings described in Note 16 | 0 | 0 | 0 |
Class A-2 Interests | |||
Cash flows from financing activities | |||
Repurchase of stock | 0 | (11,143) | (2,000) |
Class C common stock | |||
Cash flows from financing activities | |||
Repurchase of stock | (8,216) | 0 | (98) |
BondPoint | |||
Cash flows from investing activities | |||
Proceeds from sale of business | 400,192 | 0 | 0 |
DMM Business | |||
Cash flows from investing activities | |||
Proceeds from sale of business | $ 0 | $ 300 | $ 0 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization The accompanying consolidated financial statements include the accounts and operations of Virtu Financial, Inc. (“VFI” or, collectively with its wholly owned or controlled subsidiaries, the “Company”) beginning with its initial public offering (“IPO”) in April of 2015, along with the historical accounts and operations of Virtu Financial LLC (“Virtu Financial”) prior to the Company’s IPO. VFI is a Delaware corporation whose primary asset is its ownership interest in Virtu Financial, which it acquired pursuant to and subsequent to certain reorganization transactions (the “Reorganization Transactions”) consummated in connection with its IPO. As of December 31, 2018 , VFI owned approximately 56.7% of the membership interests of Virtu Financial. VFI is the sole managing member of Virtu Financial and operates and controls all of the businesses and affairs of Virtu Financial and, through Virtu Financial and its subsidiaries (the “Group”), continues to conduct the business now conducted by such subsidiaries. The Company is a leading financial firm that leverages cutting edge technology to deliver liquidity to the global markets and innovative, transparent market making trading solutions to its clients. The Company has broad diversification, in combination with its proprietary technology platform and low-cost structure, which enables the Company to facilitate risk transfer between global capital markets participants by supplying competitive liquidity and execution services while at the same time earning attractive margins and returns. On July 20, 2017 (the “Closing Date”), the Company completed the all-cash acquisition of KCG Holdings, Inc. (“KCG”) (the “Acquisition of KCG”) . Pursuant to the terms of the Agreement and Plan of Merger, dated as of April 20, 2017, by and among the Company, Orchestra Merger Sub, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of the Company (“Merger Sub”), and KCG, Merger Sub merged with and into KCG (the “KCG Merger”), with KCG surviving the KCG Merger as a wholly owned subsidiary of the Company. See Note 3 “Acquisition of KCG” for further details. Virtu Financial’s principal subsidiaries include Virtu Financial BD LLC (“VFBD”), Virtu Americas LLC (“VAL”), and Virtu Financial Capital Markets LLC (“VFCM”, collectively with VFBD and VAL, the "broker-dealers"), which are self-clearing U.S. broker-dealers. Other principal subsidiaries include Virtu Financial Global Markets LLC, a U.S. trading entity focused on futures and currencies; Virtu Financial Ireland Limited, formed in Ireland; Virtu Financial Asia Pty Ltd, formed in Australia; and Virtu Financial Singapore Pte. Ltd., formed in Singapore, each of which are trading entities focused on asset classes in their respective geographic regions. On January 2, 2018, the Company completed the sale of its fixed income trading venue, BondPoint, to Intercontinental Exchange (“ICE”) for total gross proceeds of $400.2 million . See Note 4 "Sale of BondPoint" for further details. Prior to the Acquisition of KCG, the Company was managed and operated as one business, under one operating segment. As a result of the Acquisition of KCG, beginning in the third quarter of 2017 the Company has two operating segments: (i) Market Making and (ii) Execution Services; and one non-operating segment: Corporate. See Note 20 "Geographic Information and Business Segments" for a further discussion of the Company’s segments. Basis of Consolidation and Form of Presentation These consolidated financial statements are presented in U.S. dollars, have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding financial reporting with respect to Form 10-K and accounting standards generally accepted in the United States of America (“U.S. GAAP”) promulgated by the Financial Accounting Standards Board (“FASB”) in the Accounting Standards Codification (“ASC” or the “Codification”), and reflect all adjustments that, in the opinion of management, are normal and recurring, and that are necessary for a fair statement of the results for the periods presented. The consolidated financial statements of the Company include its equity interests in Virtu Financial and its subsidiaries. The Company operates and controls all business and affairs of Virtu Financial and its operating subsidiaries indirectly through its equity interest in Virtu Financial. Certain reclassifications have been made to the prior periods’ consolidated financial statements in order to conform to the current period presentation. Such reclassifications are immaterial, individually and in the aggregate, to both current and all previously issued financial statements taken as a whole and have no effect on previously reported consolidated net income available to common stockholders. The consolidated financial statements include the accounts of the Company and its majority and wholly owned subsidiaries. As sole managing member of Virtu Financial, the Company exerts control over the Group’s operations. The Company consolidates Virtu Financial and its subsidiaries’ financial statements and records the interests in Virtu Financial that the Company does not own as noncontrolling interests. All intercompany accounts and transactions have been eliminated in consolidation. As discussed in Note 3 “Acquisition of KCG”, the Company has accounted for the Acquisition of KCG under the acquisition method of accounting. Under the acquisition method of accounting, the assets and liabilities of KCG, as of the Closing Date, were recorded at their respective fair values and added to the carrying value of the Company's existing assets and liabilities. The reported financial condition, results of operations and cash flows of the Company for the periods following the Acquisition reflect KCG's and the Company's balances, and reflect the impact of purchase accounting adjustments. The financial results for the years ended December 31, 2017 and 2016 comprise the results of the Company for the entire applicable periods and results of KCG from the Closing Date through December 31, 2017. All periods prior to the Closing Date comprise solely results of the Company. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The Company's consolidated financial statements are prepared in conformity with U.S. GAAP, which require management to make estimates and assumptions regarding measurements including the fair value of trading assets and liabilities, goodwill and intangibles, compensation accruals, capitalized software, income tax, and other matters that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ materially from those estimates. Earnings Per Share Earnings per share (“EPS”) is calculated on both a basic and diluted basis. Basic EPS excludes dilution and is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is calculated by dividing the net income available for common stockholders by the diluted weighted average shares outstanding for that period. Diluted EPS includes the determinants of the basic EPS and, in addition, reflects the dilutive effect of shares of common stock estimated to be distributed in the future under the Company’s share based compensation plans. The Company grants restricted stock units (“RSUs”), which entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. As a result, the unvested RSUs meet the definition of a participating security requiring the application of the two-class method. Under the two-class method, earnings available to common shareholders, including both distributed and undistributed earnings, are allocated to each class of common stock and participating securities according to dividends declared and participating rights in undistributed earnings, which may cause diluted EPS to be more dilutive than the calculation using the treasury stock method. Cash and Cash Equivalents Cash and cash equivalents include money market accounts, which are payable on demand, and short-term investments with an original maturity of less than 90 days. The Company maintains cash in bank deposit accounts that, at times, may exceed federally insured limits. The Company manages this risk by selecting financial institutions deemed highly creditworthy to minimize the risk. Securities Borrowed and Securities Loaned The Company conducts securities borrowing and lending activities with external counterparties. In connection with these transactions, the Company receives or posts collateral, which comprises cash and/or securities. In accordance with substantially all of its stock borrow agreements, the Company is permitted to sell or repledge the securities received. Securities borrowed or loaned are recorded based on the amount of cash collateral advanced or received. The initial cash collateral advanced or received generally approximates or is greater than 102% of the fair value of the underlying securities borrowed or loaned. The Company monitors the fair value of securities borrowed and loaned, and delivers or obtains additional collateral as appropriate. Receivables and payables with the same counterparty are not offset in the consolidated statements of financial condition. Interest received or paid by the Company for these transactions is recorded gross on an accrual basis under interest and dividends income or interest and dividends expense in the consolidated statements of comprehensive income. Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase In a repurchase agreement, securities sold under agreements to repurchase are treated as collateralized financing transactions and are recorded at contract value, plus accrued interest, which approximates fair value. It is the Company's policy that its custodian take possession of the underlying collateral securities with a fair value approximately equal to the principal amount of the repurchase transaction, including accrued interest. For reverse repurchase agreements, the Company typically requires delivery of collateral with a fair value approximately equal to the carrying value of the relevant assets in the consolidated statements of financial condition. To ensure that the fair value of the underlying collateral remains sufficient, the collateral is valued daily with additional collateral obtained or excess collateral returned, as permitted under contractual provisions. The Company does not net securities purchased under agreements to resell transactions with securities sold under agreements to repurchase transactions entered into with the same counterparty. The Company has entered into bilateral and tri-party term and overnight repurchase and other collateralized financing agreements which bear interest at negotiated rates. The Company receives cash and makes delivery of financial instruments to a custodian who monitors the market value of these instruments on a daily basis. The market value of the instruments delivered must be equal to or in excess of the principal amount loaned under the repurchase agreements plus the agreed upon margin requirement. The custodian may request additional collateral, if appropriate. Interest received or paid by the Company for these transactions is recorded gross on an accrual basis under interest and dividends income or interest and dividends expense in the consolidated statements of comprehensive income. Receivables from/Payables to Broker-dealers and Clearing Organizations As of December 31, 2018 and 2017 , receivables from and payables to broker-dealers and clearing organizations primarily represented amounts due for unsettled trades, open equity in futures transactions, securities failed to deliver or failed to receive, deposits with clearing organizations or exchanges and balances due from or due to prime brokers in relation to the Company’s trading. Amounts receivable from broker-dealers and clearing organizations may be restricted to the extent that they serve as deposits for securities sold, not yet purchased. The Company presents its balances, including outstanding principal balances on all credit facilities, on a net by counterparty basis within receivables from and payables to broker-dealers and clearing organizations when the criteria for offsetting are met. In the normal course of business, a significant portion of the Company’s securities transactions, money balances, and security positions are transacted with several third-party brokers. The Company is subject to credit risk to the extent any broker with whom it conducts business is unable to fulfill contractual obligations on its behalf. The Company monitors the financial condition of such brokers and to minimize the risk of any losses from these counterparties. Financial Instruments Owned Including Those Pledged as Collateral and Financial Instruments Sold, Not Yet Purchased Financial instruments owned and Financial instruments sold, not yet purchased relate to market making and trading activities, and include listed and other equity securities, listed equity options and fixed income securities. The Company records financial instruments owned, including those pledged as collateral, and financial instruments sold, not yet purchased at fair value. Gains and losses arising from financial instrument transactions are recorded net on a trade-date basis in trading income, net, in the consolidated statements of comprehensive income. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. Fair value measurements are not adjusted for transaction costs. The recognition of “block discounts” for large holdings of unrestricted financial instruments where quoted prices are readily and regularly available in an active market is prohibited. The Company categorizes its financial instruments into a three level hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy level assigned to each financial instrument is based on the assessment of the transparency and reliability of the inputs used in the valuation of such financial instruments at the measurement date based on the lowest level of input that is significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories based on inputs: Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 — Quoted prices in markets that are not active and financial instruments for which all significant inputs are observable, either directly or indirectly; or Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Transfers in or out of levels are recognized based on the beginning fair value of the period in which they occurred. Fair Value Option The fair value option election allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are recorded in other, net in the consolidated statements of comprehensive income. The decision to elect the fair value option is determined on an instrument by instrument basis, which must be applied to an entire instrument and is irrevocable once elected. Derivative Instruments Derivative instruments are used for trading purposes, including economic hedges of trading instruments, are carried at fair value, and include futures, forward contracts, and options. Gains or losses on these derivative instruments are recognized currently within trading income, net in the consolidated statement of comprehensive income. Fair values for exchange-traded derivatives, principally futures, are based on quoted market prices. Fair values for over-the-counter derivative instruments, principally forward contracts, are based on the values of the underlying financial instruments within the contract. The underlying instruments are currencies, which are actively traded. The Company presents its derivatives balances on a net-by-counterparty basis when the criteria for offsetting are met. Cash flows associated with such derivative activities are included in cash flows from operating activities on the consolidated statements of cash flows. Property, Equipment and Occupancy Property and equipment are carried at cost, less accumulated depreciation, except for the assets acquired in connection with acquisitions using the purchase accounting method, which were recorded at fair value on the respective date of acquisitions. Depreciation is provided using the straight-line method over estimated useful lives of the underlying assets. Routine maintenance, repairs and replacement costs are expensed as incurred and improvements that appreciably extend the useful life of the assets are capitalized. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in income. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. Furniture, fixtures, and equipment are depreciated over three to seven years. Leasehold improvements are amortized over the lesser of the life of the improvement or the term of the lease. The Company recognizes rent expense under operating leases with fixed rent escalations, lease incentives and free rent periods on a straight-line basis over the lease term beginning on the date the Company takes possession of or controls the use of the space, including during free rent periods. Lease Loss Accrual The Company’s policy is to identify excess real estate capacity and where applicable, accrue for related future costs, net of projected sub-lease income upon the date the Company ceases to use the excess real estate, which is recorded under operating and administrative in the consolidated statements of comprehensive income. Such accrual is adjusted to the extent the actual terms of sub-leased property differ from the previous assumptions used in the calculation of the accrual. Capitalized Software The Company capitalizes costs of materials, consultants, and payroll and payroll related costs for employees incurred in developing internal-use software. Costs incurred during the preliminary project and post-implementation stages are charged to expense. Management’s judgment is required in determining the point at which various projects enter the stages at which costs may be capitalized, in assessing the ongoing value of the capitalized costs, and in determining the estimated useful lives over which the costs are amortized. Capitalized software development costs and related accumulated amortization are included in property, equipment and capitalized software in the accompanying consolidated statements of financial condition and are amortized over a period of 1.5 to 2.5 years , which represents the estimated useful lives of the underlying software. Goodwill Goodwill represents the excess of the purchase price over the underlying net tangible and intangible assets of the Company’s acquisitions. Goodwill is not amortized but is assessed for impairment on an annual basis and between annual assessments whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is assessed at the reporting unit level, which is defined as an operating segment or one level below the operating segment. The Company assesses goodwill for impairment on an annual basis on July 1 and on an interim basis when certain events or circumstances exist. In the impairment assessment as of July 1, 2018, the Company assessed qualitative factors as described in ASC 350-20 for each of its reporting units for any indicators that the fair values of the reporting units were less than their carrying values. Intangible Assets The Company amortizes finite-lived intangible assets over their estimated useful lives. Finite-lived intangible assets are tested for impairment when impairment indicators are present, and if impaired, they are written down to fair value. Exchange Memberships and Stock Exchange memberships are recorded at cost or, if any other than temporary impairment in value has occurred, at a value that reflects management’s estimate of fair value. Exchange memberships acquired in connection with the Acquisition of KCG were recorded at their fair value on the date of acquisition. Exchange stock includes shares that entitle the Company to certain trading privileges. The Company’s exchange memberships and stock are included in intangibles in the consolidated statements of financial condition. Trading Income, net Trading income, net is comprised of changes in the fair value of trading assets and liabilities (i.e., unrealized gains and losses) and realized gains and losses on trading assets and liabilities. Trading gains and losses on financial instruments owned and financial instruments sold, not yet purchased are recorded on the trade date and reported on a net basis in the consolidated statements of comprehensive income. Commissions, net and Technology Services Commissions, net, which primarily comprise commissions and commission equivalents earned on institutional client orders, are recorded on a trade date basis. Under a commission management program, the Company allows institutional clients to allocate a portion of their gross commissions to pay for research and other services provided by third parties. The Company recognizes the related revenue when the third party research services are rendered and payments are made. As the Company acts as an agent in these transactions, it records such expenses on a net basis within commissions, net and technology services in the consolidated statements of comprehensive income. Technology services revenues consist of technology licensing fees and agency commission fees. Technology licensing fees are earned from third parties for licensing of the Company’s proprietary risk management and trading infrastructure technology and the provision of associated management and hosting services. These fees include both upfront and annual recurring fees, as well as, in certain cases, contingent fees based on client revenues, which represent variable consideration. The services offered under these contracts have the same pattern of transfer; accordingly, they are being measured and recognized as a single performance obligation. The performance obligation is satisfied over time, and accordingly, revenue is recognized as time passes. Variable consideration has not been included in the transaction price as the amount of consideration is contingent on factors outside the Company’s control and thus it is not probable that a significant reversal of cumulative revenue recognized will not occur. Recurring fees, which exclude variable consideration, are billed and collected on a quarterly basis. Interest and Dividends Income/Interest and Dividends Expense Interest income and interest expense are accrued in accordance with contractual rates. Interest income consists of interest earned on collateralized financing arrangements and on cash held by brokers. Interest expense includes interest expense from collateralized transactions, margin and related lines of credit. Dividends on financial instruments owned including those pledged as collateral and financial instruments sold, not yet purchased are recorded on the ex-dividend date and interest is recognized on an accrual basis. Brokerage, Exchange and Clearance Fees, Net Brokerage, exchange and clearance fees, net, comprise the costs of executing and clearing trades and are recorded on a trade date basis. Rebates consist of volume discounts, credits or payments received from exchanges or other market places related to the placement and/or removal of liquidity from the order flow in the marketplace. Rebates are recorded on an accrual basis and included net within brokerage, exchange and clearance fees in the accompanying consolidated statements of comprehensive income. Payments for Order Flow Payments for order flow represent payments to broker-dealer clients, in the normal course of business, for directing their order flow in U.S. equities to the Company. Payments for order flow are recorded on a trade-date basis in the consolidated statements of comprehensive income. Income Taxes Subsequent to consummation of the Reorganization Transactions and the IPO, the Company is subject to U.S. federal, state and local income taxes on its taxable income. The Company's subsidiaries are subject to income taxes in the respective jurisdictions (including foreign jurisdictions) in which they operate. Prior to the consummation of the Reorganization Transactions and the IPO, no provision for United States federal, state and local income tax was required, as Virtu Financial is a limited liability company and is treated as a pass-through entity for United States federal, state, and local income tax purposes. The provision for income tax is comprised of current tax and deferred tax. Current tax represents the tax on current year tax returns, using tax rates enacted at the balance sheet date. The deferred tax assets are recognized in full and then reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be recognized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the applicable taxing authority, including resolution of the appeals or litigation processes, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit for each such position that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Many factors are considered when evaluating and estimating the tax positions and tax benefits. Such estimates involve interpretations of regulations, rulings, case law, etc. and are inherently complex. The Company’s estimates may require periodic adjustments and may not accurately anticipate actual outcomes as resolution of income tax treatments in individual jurisdictions typically would not be known for several years after completion of any fiscal year. Comprehensive Income and Foreign Currency Translation Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). The Company’s OCI is comprised of foreign currency translation adjustments. Assets and liabilities of operations having non-U.S. dollar functional currencies are translated at period-end exchange rates, and revenues and expenses are translated at weighted average exchange rates for the period. Gains and losses resulting from translating foreign currency financial statements, net of related tax effects, are reflected in accumulated other comprehensive income, a separate component of stockholders’ equity. The Company's foreign subsidiaries generally use the U.S. dollar as their functional currency. The Company also has subsidiaries that utilize a functional currency other than the U.S. dollar, primarily comprising its subsidiaries domiciled in Ireland, which utilize the Euro as the functional currency. The Company may seek to reduce the impact of fluctuations in foreign exchange rates on its net investment in certain non-U.S. operations through the use of foreign currency forward contracts. For foreign currency forward contracts designated as hedges, the Company assesses its risk management objectives and strategy, including identification of the hedging instrument, the hedged item and the risk exposure and how effectiveness is to be assessed prospectively and retrospectively. The effectiveness of the hedge is assessed based on the overall changes in the fair value of the forward contracts. For qualifying net investment hedges, any gains or losses, to the extent effective, are included in Accumulated other comprehensive income on the consolidated statements of financial condition and Cumulative translation adjustment, net of tax, on the consolidated statements of comprehensive income. The ineffective portion, if any, is recorded in investment income and other, net on the consolidated statements of operations. Share-Based Compensation The fair value of awards issued for compensation prior to the Reorganization Transactions and the IPO was determined by management, with the assistance of an independent third party valuation firm, using a projected annual forfeiture rate, where applicable, on the date of grant. Share-based awards issued for compensation in connection with or subsequent to the Reorganization Transactions and the IPO pursuant to the Virtu Financial, Inc. 2015 Management Incentive Plan, adopted by the Company's Board of Directors and stockholders effective upon consummation of the IPO (as amended, the “Amended and Restated 2015 Management Incentive Plan”) were in the form of stock options, Class A common stock, par value $0.00001 (the "Class A Common Stock") and RSUs. The fair value of the stock option grants is determined through the application of the Black-Scholes-Merton model. The fair value of the Class A Common Stock and RSUs are determined based on the volume weighted average price for the three days preceding the grant, and with respect to the RSUs, a projected annual forfeiture rate. The fair value of share-based awards granted to employees is expensed based on the vesting conditions and are recognized on a straight line basis over the vesting period. The Company records as treasury stock shares repurchased from its employees for the purpose of settling tax liabilities incurred upon the issuance of Class A Common Stock, the vesting of RSUs or the exercise of stock options. Variable Interest Entities A variable interest entity (“VIE”) is an entity that lacks one or more of the following characteristics (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The Company will be considered to have a controlling financial interest and will consolidate a VIE if it has both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. In October 2016, the Company invested in a joint venture (“JV”) with nine other parties. One of the parties was KCG. Upon the KCG Merger, KCG was required to relinquish their ownership in the JV. As of December 31, 2018 , each of the remaining parties owns approximately 11% of the voting shares and 11% of the equity of this JV. In addition, as a result of the Acquisition of KCG, the Company owns 50% of the voting shares and 50% of the equity of another JV. These two JVs build and maintain microwave communication networks in the U.S., Europe, and Asia. The Company and its JV partners each pay monthly fees for the use of the microwave communication networks in connection with their respective trading activities, and the JVs may sell excess bandwidth that is not utilized by the JV members to third parties. The JVs meet the criteria to be considered VIEs. In each of the JVs, the Company does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; therefore it does not have a controlling financial interest in and does not consolidate the JVs. The Company records its interest in each JV under the equity method of accounting and records its investment in the JVs within Other assets and its amounts payable for communication services provided by the JV within Accrued expenses and other liabilities on the consolidated statements of financial condition. The Company records its pro-rata share of each JV's earnings or losses within Other, net and fees related to the use of communication services provided by the JVs within communications and data processing on the consolidated statements of comprehensive income. The Company’s exposure to the obligations of these VIEs is generally limited to its interests in each respective JV, which is the carrying value of the equity investment in each JV. The following table presents the Company’s nonconsolidated VIEs at December 31, 2018 : Carrying Amount Maximum Exposure to Loss VIEs' assets (in thousands) Asset Liability Equity investment $ 18,254 $ — $ 18,254 $ 49,450 The following table presents the Company’s nonconsolidated VIEs at December 31, 2017 : Carrying Amount Maximum Exposure to Loss VIEs' assets (in thousands) Asset Liability Equity investment $ 18,799 $ — $ 18,799 $ 41,936 Accounting Pronouncements, Recently Adopted Revenue Recognition - In May 2014, the FASB issued Accounting Standard Update (“ASU”) 2014-9, Revenue from Contracts with Customers . ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The Company adopted the new revenue standard on January 1, 2018 by applying the modified retrospective method, which did not result in a transition adjustment. The new standard does not apply to revenue associated with financial instruments that are accounted for under other U.S. GAAP, and as a result, did not have a material impact on the Company’s consolidated financial statements, which are most closely associated with financial instruments, including trading income, net, and interest and dividends income. The new revenue standard primarily impacts revenues from technology services, commissions and soft-dollar arrangements generated by execution services. The additional disclosures required by the new standard have been included in Note 13 "Revenues from Contracts with Customers" . Financial Assets and Liabilities — In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The ASU affects the accounting for equity investments, financial liabilities under fair value option and presentation and disclosure requirements of financial instruments. The ASU affects all entities that hold financial assets or owe financial liabilities and is effective for annual reporting periods (including interim periods) beginning after December 15, 2017. The Company does not currently classify any equity securities as available for sale, and it does not apply the fair value option to its own debt issuances. The Company has adopted this ASU as of January 1, 2018, and it did not have a material impact on its consolidated financial statements. Income Taxes – In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 749): Intra-Entity Transfers of Assets Other Than Inventory . The ASU requires the reporting entity to recognize the tax expense from the sale of an asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of the transactions are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The ASU is effective for reporting periods beginning after December 15, 2017. The Company adopted this ASU on January 1, 2018, and it did not have a material impact on its consolidated financial statements. Business Combinations - In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business , to amend the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU is effective for reporting periods beginning after December 15, 2017. The Company adopted this ASU on January 1, 2018, and it did not have a material impact on its consolidated financial statements. Accounting Pronouncements, Not Yet Adopted as of December 31, 2018 Leases — In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Under the new ASU, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. The liability will be equal to the present value of the future lease payments. The asset, referred to as a “right-of-use asset” will be based on the liability, subject to adjustment, such as for initial direct costs. For statement of comprehensive income purposes, leases will be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases , which modified certain aspects of ASC Topic 842, including allowing entities to adopt the new leasing standard as of January 1, 2019, witho |
Acquisition of KCG
Acquisition of KCG | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisition of KCG | Acquisition of KCG As of the Closing Date of the Acquisition of KCG, each of KCG’s issued and outstanding shares of Class A common stock, par value $0.01 per share was cancelled and extinguished and converted into the right to receive $20.00 in cash, without interest, less any applicable withholding taxes. On the Closing Date, and in connection with the financing of the Acquisition of KCG, as described in Note 10 "Borrowings" , the Company issued to Aranda Investments Pte. Ltd. (“Aranda”), an affiliate of Temasek Holdings (Private) Limited (“Temasek”), 6,346,155 shares of the Company’s Class A Common Stock, pursuant to the investment agreement with Aranda (as amended, the “Aranda Investment Agreement”) for an aggregate purchase price of approximately $99.0 million . On August 10, 2017, the Company issued an additional 1,666,666 shares of its Class A Common Stock for an aggregate purchase price of $26.0 million (collectively, the “Temasek Investment”). On the Closing Date, and in connection with the financing of the Acquisition of KCG, the Company issued to North Island Holdings I, LP (the “North Island Stockholder”) 39,725,979 shares of the Company’s Class A Common Stock for an aggregate purchase price of approximately $613.5 million . On August 10, 2017 the Company issued an additional 338,124 shares of its Class A Common Stock for an aggregate purchase price of $5.2 million (collectively, the “North Island Investment”). In connection with the Temasek Investment and North Island Investment, the Company incurred approximately $7.8 million in fees which were recorded as a reduction to additional paid-in capital. On July 21, 2017, the outstanding 6.875% Senior Secured Notes due 2020 issued by KCG (the "KCG Notes") were redeemed at a redemption price equal to 103.438% of the $465.0 million principal amount, plus accrued and unpaid interest. The redemption was pursuant to the indenture, dated as of March 13, 2015 (as amended, restated, supplemented or otherwise modified), by and among KCG, the subsidiary guarantors party thereto and The Bank of New York Mellon, as trustee and collateral agent. See "Fourth Amended and Restated Credit Agreement" and "Senior Secured Second Lien Notes" in Note 10 "Borrowings" . Accounting treatment of the Acquisition of KCG The Acquisition of KCG has been accounted for as a purchase of KCG by the Company, pursuant to provisions of ASC 805, Business Combinations . Under the acquisition method of accounting, the assets and liabilities of KCG, as of the Closing Date, were recorded at their respective fair values and added to the carrying value of the Company's existing assets and liabilities. These fair values were determined with the assistance of third party valuation professionals. The reported financial condition, results of operations and cash flows of the Company for the periods following the Acquisition of KCG reflect KCG’s and the Company's balances and reflect the impact of purchase accounting adjustments. Certain former KCG management employees were terminated upon the Acquisition of KCG, and as a result were paid an aggregate of $6.4 million pursuant to their existing employment contracts. This amount was recognized as an expense by the Company and was included in Employee compensation and payroll taxes in the consolidated statements of comprehensive income for the year ending December 31, 2017. The Company also made annual incentive compensation payments in 2018 to former KCG employees who became employees of the Company following the Acquisition of KCG, and accrued related compensation expense of approximately $35.3 million during the year ended December 31, 2017, which was included in Employee compensation and payroll taxes in the consolidated statements of comprehensive income for the year ended December 31, 2017. Purchase price and goodwill The aggregate cash purchase price of $1.4 billion was determined as the sum of the fair value, at $20.00 per share, of KCG shares and warrants outstanding to former KCG stockholders at closing and the fair value of KCG employee stock based awards that were outstanding, and which vested at the Closing Date. The purchase price has been allocated to the assets acquired and liabilities assumed using their estimated fair values at the Closing Date of the Acquisition of KCG. Adjustments to the provisional values during the measurement period were recorded in the reporting period in which the adjustment amounts were determined. No further adjustments to the provisional values remain. The Company engaged third party specialists for the purchase price allocation. Amounts allocated to intangible assets, the amortization period and goodwill were as follows: (in thousands) Amount Amortization Years Technology $ 67,700 1-6 years Customer relationships 94,000 13 - 17 years Trade names 1,000 10 years Favorable leases 5,895 2-15 years Exchange memberships 6,400 Indefinite Intangible assets $ 174,995 Goodwill 128,286 Total $ 303,281 Of the total Goodwill of $128.3 million , $96.2 million has been assigned to the Market Making segment and $32.1 million has been assigned to the Execution Services segment. Such goodwill is attributable to the expansion of products offerings and expected synergies of the combined workforce, products and technologies of the Company and KCG. Tax treatment of the Acquisition of KCG The Company believes that the Acquisition of KCG will be treated as a tax-free transaction to the Company that does not result in a step up in tax basis in the acquired assets and, therefore, KCG’s tax basis in its assets and liabilities generally carries over to the Company following the Acquisition of KCG. None of the goodwill is expected to be deductible for tax purposes. The Company recorded net deferred tax assets of $23.9 million with respect to recording KCG’s assets and liabilities under the purchase method of accounting as described above as well as recording the value of other tax attributes acquired as a result of the Acquisition of KCG, as described in Note 14 "Income Taxes" . |
Sale of BondPoint
Sale of BondPoint | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of BondPoint | Sale of BondPoint In October 2017, the Company entered into an Asset Purchase Agreement with Intercontinental Exchange ("ICE") pursuant to which the Company has agreed to sell specified assets and to assign specified liabilities constituting its BondPoint division and fixed income venue (“BondPoint”). BondPoint is a provider of electronic fixed income trading solutions for the buy-side and sell-side offering access to centralized liquidity and automated trade execution services. As of December 31, 2017, the Company transferred the carrying value of BondPoint to assets held for sale. On January 2, 2018, the Company completed the sale of BondPoint to ICE for total gross proceeds of $400.2 million in cash. The Company incurred one-time transaction costs of $8.5 million , which included professional fees of $7.1 million related to the sale and $1.4 million of compensation expense, which is recorded in Transaction advisory fees and expenses and Employee compensation and payroll taxes , respectively, on the consolidated statement of comprehensive income. The Company recognized a gain on sale of $337.6 million , which is recorded in Other, net on the consolidated statement of comprehensive income for the year ended December 31, 2018 . A summary of the carrying value of BondPoint and gain on sale of BondPoint is as follows: (in thousands) Total sale proceeds received $ 400,192 Business assets and liabilities held for sale as of December 31, 2017: Receivables from broker dealers and clearing organizations 3,383 Intangibles and other assets 51,687 Liabilities (728 ) Total carrying value of BondPoint as of December 31, 2017: 54,342 Goodwill adjustment allocated to BondPoint 8,300 Gain on sale of BondPoint 337,550 Transaction costs 8,568 Gain on sale of BondPoint, net of transaction costs $ 328,982 |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The below table contains a reconciliation of net income before noncontrolling interest to net income available for common stockholders: Years Ended December 31, (in thousands) 2018 2017 2016 Income (loss) before income taxes and noncontrolling interest $ 696,363 $ 113,164 179,591 Provision for (benefit from) income taxes 76,171 94,266 21,251 Net income 620,192 18,898 158,340 Noncontrolling interest (330,751 ) (15,959 ) (125,360 ) Net income (loss) available for common stockholders $ 289,441 $ 2,939 $ 32,980 The calculation of basic and diluted earnings per share is presented below: Years Ended December 31, (in thousands, except for share or per share data) 2018 2017 2016 Basic earnings per share: Net income (loss) available for common stockholders $ 289,441 $ 2,939 $ 32,980 Less: Dividends and undistributed earnings allocated to participating securities (5,418 ) (1,326 ) (809 ) Net income (loss) available for common stockholders, net of dividends and undistributed earnings allocated to participating securities 284,023 1,613 32,171 Weighted average shares of common stock outstanding: Class A 100,875,793 62,579,147 38,539,091 Basic earnings per share $ 2.82 $ 0.03 0.83 Years Ended December 31, (in thousands, except for share or per share data) 2018 2017 2016 Diluted earnings per share: Net income (loss) available for common stockholders, net of dividends and undistributed earnings allocated to participating securities $ 284,023 $ 1,613 $ 32,171 Weighted average shares of common stock outstanding: Class A Issued and outstanding 100,875,793 62,579,147 38,539,091 Issuable pursuant to Amended and Restated 2015 Management Incentive Plan (1) 1,213,346 — — 102,089,139 62,579,147 38,539,091 Diluted earnings per share $ 2.78 $ 0.03 $ 0.83 (1) The dilutive impact of unexercised stock options excludes from the computation of EPS 1,740,630 and 743,096 options for the years ended December 31, 2017 and 2016 , respectively, because inclusion of the options would have been anti-dilutive. |
Tax Receivable Agreements
Tax Receivable Agreements | 12 Months Ended |
Dec. 31, 2018 | |
Tax Receivable Agreements [Abstract] | |
Tax Receivable Agreements | Tax Receivable Agreements In connection with the IPO and the Reorganization Transactions, the Company entered into tax receivable agreements to make payments to certain pre-IPO equityholders ("Virtu Members") that are generally equal to 85% of the applicable cash tax savings, if any, that the Company actually realizes as a result of favorable tax attributes that were and will continue to be available to the Company as a result of the Reorganization Transactions, exchanges of membership interests for Class A Common Stock or Class B common stock, par value $0.00001 per share (the "Class B Common Stock"), and payments made under the tax receivable agreements. Payments will occur only after the filing of the U.S. federal and state income tax returns and realization of the cash tax savings from the favorable tax attributes. The Company made its first payment of $7.0 million in February 2017 and its second payment of $12.4 million in September 2018. As a result of (i) the purchase of equity interests in Virtu Financial from certain Virtu Members in connection with the Reorganization Transactions, (ii) the purchase of non-voting common interest units in Virtu Financial (the “Virtu Financial Units”) (along with the corresponding shares of Class C common stock, par value $0.00001 per share (the "Class C Common Stock")) from certain of the Virtu Members in connection with the IPO, and (iii) the purchase of Virtu Financial Units (along with the corresponding shares of Class C Common Stock) and the exchange of Virtu Financial Units (along with the corresponding shares of Class C Common Stock) for shares of Class A Common Stock in connection with the secondary offerings completed in November 2015, September 2016 and May 2018 (the “Secondary Offerings”), payments to certain Virtu Members in respect of the purchases are expected to range from approximately $4.7 million to $17.0 million per year over the next 15 years . In connection with the employee exchanges and May 2018 secondary offering between the Company and TJMT Holdings LLC and employee exchanges, both as described in Note 16 "Capital Structure" , the Company recorded an additional deferred tax asset of $78.7 million and payment liability pursuant to the tax receivable agreements of $79.7 million , with the $1.0 million difference recorded as a decrease to additional paid-in capital. As a result of the reduction in the U.S. corporate income tax rate as described below, the aforementioned deferred tax asset and related payment liability were subsequently reduced as described below. The amounts recorded as of December 31, 2018 are based on best estimates available at the respective dates and may be subject to change after the filing of the Company’s U.S. federal and state income tax returns for the years in which tax savings were realized. The 2017 Tax Act includes, among other items, a permanent reduction to the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018 as further described in Note 14 "Income Taxes" . As a result, at December 31, 2017 , the Company recorded a reduction of its tax receivable agreement obligation of $86.6 million . As further described in Note 14 "Income Taxes" , the Company also recorded a reduction of its deferred tax assets, including the deferred tax assets described above. At December 31, 2018 and 2017 , the Company’s remaining deferred tax assets described above were approximately $167.1 million and $101.6 million , respectively, and the Company’s liabilities over the next 15 years pursuant to the tax receivable agreements are approximately $214.4 million and $147.0 million , respectively. For the tax receivable agreements discussed above, the cash savings realized by the Company are computed by comparing the actual income tax liability of the Company to the amount of such taxes the Company would have been required to pay had there been (i) no increase to the tax basis of the assets of Virtu Financial as a result of the purchase or exchange of Virtu Financial Units, (ii) no tax benefit from the tax basis in the intangible assets of Virtu Financial on the date of the IPO and (iii) no tax benefit as a result of the Net Operating Losses (“NOLs”) and other tax attributes of Virtu Financial. Subsequent adjustments of the tax receivable agreements obligations due to certain events (e.g., changes to the expected realization of NOLs or changes in tax rates) will be recognized within income before taxes and noncontrolling interests in the consolidated statements of comprehensive income. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Prior to the Acquisition of KCG, the Company was managed and operated as one business, and accordingly, operated under one operating segment. As a result of the Acquisition of KCG, beginning in the third quarter of 2017 the Company has two operating segments: (i) Market Making; (ii) Execution Services; and one non-operating segment: Corporate. The Company allocated goodwill to the new reporting units using a relative fair value approach. In addition, the Company performed an assessment of potential goodwill impairment for all reporting units immediately prior to the reallocation and determined that no impairment was indicated. The following table presents the details of goodwill by segment: (in thousands) Market Making Execution Services Corporate Total Balance as of December 31, 2017 $ 755,292 $ 89,591 $ — $ 844,883 Goodwill adjustment allocated to BondPoint — (8,300 ) — (8,300 ) Balance as of December 31, 2018 $ 755,292 $ 81,291 $ — $ 836,583 As of December 31, 2018 and 2017 , the Company’s total amount of goodwill recorded was $836.6 million and $844.9 million , respectively. As described in Note 4 "Sale of BondPoint" , the Company allocated $8.3 million of goodwill to BondPoint as part of the sale. No goodwill impairment was recognized during the years ended December 31, 2018 and 2017 . Acquired intangible assets consisted of the following as of December 31, 2018 and 2017 : As of December 31, 2018 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Useful Lives (Years) Purchased technology $ 110,000 $ 110,000 $ — 1.4 to 2.5 ETF issuer relationships 950 665 285 9 ETF buyer relationships 950 665 285 9 Technology 60,000 30,185 29,815 1 to 6 Customer relationships 49,000 5,905 43,095 12 Favorable occupancy leases 5,895 1,224 4,671 3 to 15 Exchange memberships 5,838 — 5,838 Indefinite $ 232,633 $ 148,644 $ 83,989 As of December 31, 2017 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Useful Lives Purchased technology $ 110,000 $ 110,000 $ — 1.4 to 2.5 ETF issuer relationships 950 559 391 9 ETF buyer relationships 950 559 390 9 Leases 1,800 397 1,403 3 FCC licenses 200 19 181 7 Technology 60,000 9,644 50,356 1 to 6 Customer relationships 49,000 1,822 47,178 12 to 17 Favorable occupancy leases 5,895 408 5,487 7 Exchange memberships 5,838 — 5,838 Indefinite $ 234,633 $ 123,408 $ 111,224 Amortization expense relating to finite-lived intangible assets was approximately $26.1 million , $15.4 million , and $0.2 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. This is included in amortization of purchased intangibles and acquired capitalized software in the accompanying consolidated statements of comprehensive income. In the third quarter of 2018, the Company sold certain assets to one of its joint ventures, including the intangible assets associated with leases with a net carrying value of $1.1 million at the time of sale. |
Receivables from_Payables to Br
Receivables from/Payables to Broker-Dealers and Clearing Organizations | 12 Months Ended |
Dec. 31, 2018 | |
Due to and from Broker-Dealers and Clearing Organizations [Abstract] | |
Receivables from/Payables to Broker-Dealers and Clearing Organizations | Receivables from/Payables to Broker-Dealers and Clearing Organizations The following is a summary of receivables from and payables to brokers-dealers and clearing organizations at December 31, 2018 and December 31, 2017 : (in thousands) December 31, 2018 December 31, 2017 Assets Due from prime brokers $ 302,152 $ 219,573 Deposits with clearing organizations 84,509 112,847 Net equity with futures commission merchants 294,884 203,711 Unsettled trades with clearing organization 193,544 173,778 Securities failed to deliver 218,663 248,088 Commissions and fees 7,697 14,021 Total receivables from broker-dealers and clearing organizations $ 1,101,449 $ 972,018 Liabilities Due to prime brokers $ 354,300 $ 197,439 Net equity with futures commission merchants 47,998 44,526 Unsettled trades with clearing organization 90,021 420,029 Securities failed to receive 73,547 51,143 Commissions and fees 1,575 3,068 Total payables to broker-dealers and clearing organizations $ 567,441 $ 716,205 Included as a deduction from “Due from prime brokers” and “Net equity with futures commission merchants” is the outstanding principal balance on all of the Company’s short-term credit facilities (described in Note 10 "Borrowings" ) of approximately $184.6 million and $205.7 million as of December 31, 2018 and 2017 , respectively. The loan proceeds from the credit facilities are available only to meet the initial margin requirements associated with the Company’s ordinary course futures and other trading positions, which are held in the Company’s trading accounts with an affiliate of the respective financial institutions. The credit facilities are fully collateralized by the Company’s trading accounts and deposit accounts with these financial institutions. “Securities failed to deliver” and “Securities failed to receive” include amounts with a clearing organization and other broker-dealers. |
Collateralized Transactions
Collateralized Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Collateralized Agreements [Abstract] | |
Collateralized Transactions | Collateralized Transactions The Company is permitted to sell or repledge securities received as collateral and use these securities to secure repurchase agreements, enter into securities lending transactions or deliver these securities to counterparties or clearing organizations to cover short positions. At December 31, 2018 and December 31, 2017 , substantially all of the securities received as collateral have been repledged. The fair value of the collateralized transactions at December 31, 2018 and December 31, 2017 are summarized as follows: (in thousands) December 31, 2018 December 31, 2017 Securities received as collateral: Securities borrowed $ 1,361,635 $ 1,415,793 Securities purchased under agreements to resell 15,475 — $ 1,377,110 $ 1,415,793 In the normal course of business, the Company pledges qualified securities with clearing organizations to satisfy daily margin and clearing fund requirements. Financial instruments owned and pledged, where the counterparty has the right to repledge, at December 31, 2018 and December 31, 2017 consisted of the following: (in thousands) December 31, 2018 December 31, 2017 Equities $ 748,846 $ 586,251 U.S. and Non-U.S. government obligations — 99 Exchange traded notes 42,269 8,693 $ 791,115 $ 595,043 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Broker-Dealer Credit Facilities The Company is a party to two secured credit facilities with a financial institution to finance overnight securities positions purchased as part of its ordinary course broker-dealer market making activities. One of the facilities (the “Uncommitted Facility”), is provided on an uncommitted basis collateralized by one of the Company’s broker-dealer subsidiaries trading and deposit account with the financial institution. On November 3, 2017, the Company entered the second credit facility (“Revolving Credit Facility”) with the same financial institution for an aggregated borrowing limit of $500.0 million . The Revolving Credit Facility consists two borrowing bases: Borrowing Base A Loan is to be used to finance the purchase and settlement of securities; Borrowing Base B Loan is to be used to fund margin deposit with the NSCC. Each of the three broker-dealers has a sublimit under Borrowing Base A Loan, from $25 million to $500 million , which bears interest at the adjusted LIBOR or base rate plus 1.25% per annum. Two out of the three broker-dealers have a sublimit under Borrowing Base B Loan, from $40 million to $100 million , which bears interest at the adjusted LIBOR or base rate plus 2.50% per annum. A commitment fee of 0.50% per annum on the average daily unused portion of this facility is payable quarterly in arrears. The following summarizes the Company’s broker-dealer credit facilities' carrying values, net of unamortized debt issuance costs, where applicable: At December 31, 2018 (in thousands) Interest Rate Financing Available Borrowing Outstanding Deferred Debt Issuance Cost Outstanding Borrowings, net Broker-dealer credit facilities: Uncommitted facility 3.40% $ 200,000 $ 10,000 $ (832 ) $ 9,168 Revolving credit facility 3.75% 500,000 7,000 (1,040 ) 5,960 $ 700,000 $ 17,000 $ (1,872 ) $ 15,128 At December 31, 2017 (in thousands) Interest Rate Financing Available Borrowing Outstanding Deferred Debt Issuance Cost Outstanding Borrowings, net Broker-dealer credit facilities: Uncommitted facility 2.42% $ 150,000 $ 25,000 $ — $ 25,000 Revolving credit facility 2.81% 500,000 7,000 (4,117 ) 2,883 $ 650,000 $ 32,000 $ (4,117 ) $ 27,883 The following summarizes interest expense for the broker-dealer facilities. Interest expense is included within interest and dividends expense in the accompanying consolidated statements of comprehensive income. Years Ended December 31, (in thousands) 2018 2017 2016 Broker-dealer credit facilities: Uncommitted facility $ 1,794 $ 1,667 $ 1,191 Committed facility (1) — 33 41 Revolving credit facility 306 19 — $ 2,100 $ 1,719 $ 1,232 (1) Facility was terminated in July 2017. Short-Term Credit Facilities The Company maintains short-term credit facilities with various prime brokers and other financial institutions from which it receives execution or clearing services. The proceeds of these facilities are used to meet margin requirements associated with the products traded by the Company in the ordinary course, and amounts borrowed are collateralized by the Company’s trading accounts with the applicable financial institution. At December 31, 2018 Weighted Average Financing Borrowing Short-Term Credit Facilities: Short-term credit facilities (2) 5.03% $ 566,000 $ 184,608 $ 566,000 $ 184,608 At December 31, 2017 Weighted Average Interest Rate Financing Available Borrowing Outstanding Short-Term Credit Facilities: Short-term credit facilities (2) 3.86% $ 543,000 $ 205,677 $ 543,000 $ 205,677 (2) Outstanding borrowings are included with Receivables from/ Payables to broker-dealers and clearing organizations within the consolidated statements of financial condition. Interest expense in relation to the facilities was approximately $7.1 million , $6.6 million , and $6.3 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. Long-Term Borrowings The following summarizes the Company’s long-term borrowings, net of unamortized discount and debt issuance costs, where applicable: At December 31, 2018 (in thousands) Maturity Interest Outstanding Principal Discount Deferred Debt Issuance Cost Outstanding Borrowings, net Long-term borrowings: Fourth Amended and Restated Credit Agreement December 2021 5.55% $ 400,000 $ (332 ) $ (6,704 ) $ 392,964 Senior Secured Second Lien Notes June 2022 6.75% 500,000 — (17,811 ) 482,189 SBI bonds January 2020 5.00% 31,908 — (24 ) 31,884 $ 931,908 $ (332 ) $ (24,539 ) $ 907,037 At December 31, 2017 (in thousands) Maturity Date Interest Rate Outstanding Principal Discount Deferred Debt Issuance Cost Outstanding Borrowings, net Long-term borrowings: Fourth Amended and Restated Credit Agreement December 2021 5.13% $ 900,000 $ (999 ) $ (18,504 ) $ 880,497 Senior secured Second Lien Notes June 2022 6.75% 500,000 — (22,961 ) 477,039 SBI bonds January 2020 5.00% 31,059 — (47 ) 31,012 $ 1,431,059 $ (999 ) $ (41,512 ) $ 1,388,548 Fourth Amended and Restated Credit Agreement To finance the Acquisition of KCG, on June 30, 2017, Virtu Financial and VFH Parent LLC (“VFH”) entered into a fourth amended and restated credit agreement (as amended on January 2, 2018 and September 19, 2018, the “Fourth Amended and Restated Credit Agreement”) with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, sole lead arranger and bookrunner, which amended and restated in its entirety the existing credit agreement, and upon the closing of the Acquisition of KCG, provided for an aggregate $1.15 billion of first lien secured term loans (the “Term Loan Facility”). For the year ended December 31, 2018 , $500.0 million of prepayments were made under the Fourth Amended and Restated Credit Agreement, for an aggregate total of $750.0 million of principal prepayments under the Term Loan Facility since its closing. As a result of these prepayments, the aggregate principal outstanding under the senior secured credit facility is $400.0 million . VFH also entered into a repricing transaction on January 2, 2018 to reprice the first lien secured term loans under the Fourth Amended and Restated Credit Agreement at LIBOR plus 3.25% , and another repricing transaction on September 19, 2018 to reprice such first lien secured term loans at LIBOR plus 2.75% . In connection with the debt refinancing and the debt prepayment, the Company accelerated approximately $10.6 million for unamortized financing costs incurred that were scheduled to be amortized over the term of the loan, including original issue discount and underwriting and legal fees, which is included within debt issue cost related to debt refinancing in the consolidated statements of comprehensive income. The Fourth Amended and Restated Credit Agreement contains certain customary covenants and certain customary events of default, including relating to a change of control. If an event of default occurs and is continuing, the lenders under the Fourth Amended and Restated Credit Agreement will be entitled to take various actions, including the acceleration of amounts outstanding under the Fourth Amended and Restated Credit Agreement and all actions permitted to be taken by a secured creditor in respect of the collateral securing the obligations under the Fourth Amended and Restated Credit Agreement. Senior Secured Second Lien Notes To finance the Acquisition of KCG, on June 16, 2017, the Escrow Issuer and Orchestra Co-Issuer, Inc. (the “Co-Issuer”) completed the offering of $500.0 million aggregate principal amount of 6.750% Senior Secured Second Lien Notes due 2022 (the “Notes”). The Notes were issued under an Indenture, dated June 16, 2017 (the “Indenture”), among the Escrow Issuer, the Co-Issuer and U.S. Bank National Association, as trustee and collateral agent. On July 20, 2017, VFH assumed all of the obligations of the Escrow Issuer under the Indenture and the Notes. The Notes are guaranteed by Virtu Financial and each of Virtu Financial’s wholly-owned domestic restricted subsidiaries that guarantees the Fourth Amended and Restated Credit Agreement. The Indenture imposes certain limitations on the Company, and contains certain customary events of default, including, among others, payment defaults related to the failure to pay principal or interest on the Notes, covenant defaults, final maturity default or cross-acceleration with respect to material indebtedness and certain bankruptcy events. The gross proceeds from the Notes were deposited into a segregated escrow account with an escrow agent. The proceeds were released from escrow as of the Closing Date and were used to finance, in part, the Acquisition of KCG, and to repay certain indebtedness of the Company and KCG. (See Note 3 “Acquisition of KCG” for further details). SBI Bonds On July 25, 2016, VFH issued Japanese Yen Bonds (collectively the “SBI Bonds”) in the aggregate principal amount of ¥3.5 billion ( $33.1 million at issuance date) to SBI Life Insurance Co., Ltd. and SBI Insurance Co., Ltd. The proceeds from the SBI Bonds were used to partially fund the investment in SBI (as described in Note 11 "Financial Assets and Liabilities" ). The SBI Bonds are guaranteed by Virtu Financial. The SBI Bonds are subject to fluctuations on the Japanese Yen currency rates relative to the Company’s reporting currency (U.S. Dollar) with the changes reflected in other, net in the consolidated statements of comprehensive income. The principal balance was ¥3.5 billion ( $31.9 million ) as of December 31, 2018 and ¥3.5 billion ( $31.1 million ) as of December 31, 2017 . The Company recorded a gain of $0.8 million , a gain of $1.1 million , and a loss of $3.2 million due to the change in currency rates during the years ended December 31, 2018 , 2017 and 2016 , respectively. Aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows: (in thousands) December 31, 2018 2019 $ — 2020 31,908 2021 400,000 2022 and thereafter 500,000 Total principal of long-term borrowings $ 931,908 |
Financial Assets and Liabilitie
Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities | Financial Assets and Liabilities Financial Instruments Measured at Fair Value The fair value of equities, options, on the run U.S. government obligations and exchange traded notes is estimated using recently executed transactions and market price quotations in active markets and are categorized as Level 1 with the exception of inactively traded equities and certain other financial instruments, which are categorized as Level 2. The Company’s corporate bonds, derivative contracts and other U.S. and non-U.S. government obligations have been categorized as Level 2. Fair value of the Company’s derivative contracts is based on the indicative prices obtained from a number of banks and broker dealers, as well as management’s own analyses. The indicative prices have been independently validated through the Company’s risk management systems, which are designed to check prices with information independently obtained from exchanges and venues where such financial instruments are listed or to compare prices of similar instruments with similar maturities for listed financial futures in foreign exchange. As of March 31, 2017, the Company began pricing certain financial instruments held for trading at fair value based on theoretical prices, which can differ from quoted market prices. The theoretical prices reflect price adjustments primarily caused by the fact that the Company continuously prices its financial instruments based on all available information. This information includes prices for identical and near-identical positions, as well as the prices for securities underlying the Company’s positions, on other exchanges that are open after the exchange on which the financial instruments is traded closes. The Company validates that all price adjustments can be substantiated with market inputs and checks the theoretical prices independently. Consequently, such financial instruments are classified as Level 2. The Company concluded that this is a change in accounting estimate and no retrospective adjustments were necessary. There were no transfers of financial instruments between levels during the years ended December 31, 2018 and 2017 . Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2018 : December 31, 2018 (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Counterparty and Cash Collateral Netting Total Fair Value Assets Financial instruments owned, at fair value: Equity securities $ 587,680 $ 1,022,221 $ — $ — $ 1,609,901 U.S. and Non-U.S. government obligations 91,466 14,547 — — 106,013 Corporate Bonds — 87,500 — — 87,500 Exchange traded notes 3,396 27,966 — — 31,362 Currency forwards — 2,792,373 — (2,790,242 ) 2,131 Options 11,899 — — — 11,899 694,441 3,944,607 — (2,790,242 ) 1,848,806 Financial instruments owned, pledged as collateral: Equity securities $ 389,810 $ 359,036 $ — $ — $ 748,846 Exchange traded notes 6,968 35,301 — — 42,269 396,778 394,337 — — 791,115 Other Assets Equity investment $ — $ — $ 45,856 $ — $ 45,856 Exchange stock 2,417 — — — 2,417 2,417 — 45,856 — 48,273 Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ 931,992 $ 1,336,338 $ — $ — $ 2,268,330 U.S. and Non-U.S. government obligations 112,058 3,054 — — 115,112 Corporate Bonds — 40,123 — — 40,123 Exchange traded notes 371 39,613 — — 39,984 Currency forwards — 2,720,749 — (2,719,954 ) 795 Options 11,051 — — — 11,051 $ 1,055,472 $ 4,139,877 $ — $ (2,719,954 ) $ 2,475,395 Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2017 : December 31, 2017 (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Counterparty and Cash Collateral Netting Total Fair Value Assets Financial instruments owned, at fair value: Equity securities $ 758,596 $ 1,167,995 $ — $ — $ 1,926,591 Non-U.S. government obligations 5,968 16,815 — — 22,783 Corporate Bonds — 60,975 — — 60,975 Exchange traded notes 13,576 68,819 — — 82,395 Currency forwards — 2,045,487 — (2,027,697 ) 17,790 Options 7,045 — — — 7,045 $ 785,185 $ 3,360,091 $ — $ (2,027,697 ) $ 2,117,579 Financial instruments owned, pledged as collateral: Equity securities $ 410,670 $ 175,581 $ — $ — $ 586,251 U.S. and Non-U.S. government obligations 99 — — — 99 Exchange traded notes 82 8,611 — — 8,693 $ 410,851 $ 184,192 $ — $ — $ 595,043 Other Assets Equity investment $ — $ — $ 40,588 $ — $ 40,588 Exchange stock 1,952 — — — 1,952 Other (1) — 55,824 — — 55,824 $ 1,952 $ 55,824 $ 40,588 $ — $ 98,364 Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ 847,816 $ 1,355,616 $ — $ — $ 2,203,432 U.S. and Non-U.S. government obligations 18,940 12,481 — — 31,421 Corporate Bonds — 81,118 — — 81,118 Exchange traded notes 1,514 54,248 — — 55,762 Currency forwards — 2,032,017 — (2,024,991 ) 7,026 Options 5,839 — — — 5,839 $ 874,109 $ 3,535,480 $ — $ (2,024,991 ) $ 2,384,598 (1) Other primarily consists of a $55.8 million receivable from BATS related to the sale of KCG Hotspot (see Receivable from Bats Global Markets, Inc. ("BATS") below). SBI Investment As of December 31, 2018 , the fair value of the Company's SBI Investment was determined using the discounted cash flow method, an income approach, with the discount rate of 15.0% applied to the cash flow forecasts. The Company also used a market approach based on 12.6 x average price/earnings multiples of comparable companies to corroborate the income approach. The fair value of the SBI Investment at December 31, 2018 was determined by taking the weighted average of enterprise valuations based on discounted cash flow on projected income from the next five years , the implied enterprise valuations on comparable companies, and the implied enterprise valuations on comparable transactions. The fair value measurement is highly sensitive to significant changes in the unobservable inputs and significant increases (decreases) in discount rate or decreases (increases) in price/earnings multiples would result in a significantly lower (higher) fair value measurement. Changes in the fair value of the SBI Investment are reflected in other, net in the consolidated statements of comprehensive income. Receivable from Bats Global Markets, Inc. (“BATS”) In March 2015, KCG sold KCG Hotspot, an institutional spot foreign exchange electronic communications networks (“ECN”), to BATS, which is now a subsidiary of CBOE Holdings, Inc. KCG and BATS agreed to share certain tax benefits, which comprised a $50.0 million payment and an annual payment of up to $6.6 million , both of which were paid to the Company in April 2018. Financial Instruments Not Measured at Fair Value The table below presents the carrying value, fair value and fair value hierarchy category of certain financial instruments that are not measured at fair value on the consolidated statement of financial condition. The table below excludes non-financial assets and liabilities. The carrying value of financial instruments not measured at fair value categorized in the fair value hierarchy as Level 1 and Level 2 approximates fair value due to the relatively short-term nature of the underlying assets. The fair value of the Company’s long-term borrowings is based on quoted prices from the market for similar instruments, and is categorized as Level 2 in the fair value hierarchy. The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of December 31, 2018 : December 31, 2018 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Carrying Value Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents $ 736,047 $ 736,047 $ 736,047 $ — $ — Securities borrowed 1,399,684 1,399,684 — 1,399,684 — Securities purchased under agreements to resell 15,475 15,475 — 15,475 — Receivables from broker dealers and clearing organizations 1,101,449 1,101,449 71,288 1,030,161 — Total Assets $ 3,252,655 $ 3,252,655 $ 807,335 $ 2,445,320 $ — Liabilities Short-term borrowings $ 15,128 $ 15,128 $ — $ 15,128 $ — Long-term borrowings 907,037 916,465 — 916,465 — Securities loaned 1,130,039 1,130,039 — 1,130,039 — Securities sold under agreements to repurchase 281,861 281,861 — 281,861 — Payables to broker dealer and clearing organizations 567,441 567,441 1,031 566,410 — Total Liabilities $ 2,901,506 $ 2,910,934 $ 1,031 $ 2,909,903 $ — The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of December 31, 2017 : December 31, 2017 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Carrying Value Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents $ 532,887 $ 532,887 $ 532,887 $ — $ — Securities borrowed 1,471,172 1,471,172 — 1,471,172 — Receivables from broker dealers and clearing organizations 972,018 972,018 36,513 935,505 — Total Assets $ 2,976,077 $ 2,976,077 $ 569,400 $ 2,406,677 $ — Liabilities Short-term borrowings $ 27,883 $ 27,883 $ — $ 27,883 $ — Long-term borrowings 1,388,548 1,465,489 — 1,465,489 — Securities loaned 754,687 754,687 — 754,687 — Securities sold under agreements to repurchase 390,642 390,642 — 390,642 — Payables to broker dealer and clearing organizations 716,205 716,205 2,925 713,280 — Total Liabilities $ 3,277,965 $ 3,354,906 $ 2,925 $ 3,351,981 $ — The following presents the changes in Level 3 financial instruments measured at fair value on a recurring basis: Year Ended December 31, 2018 (in thousands) Balance at December 31, 2017 Purchases Total Realized and Unrealized Gains / (Losses) Net Transfers into (out of) Level 3 Settlement Balance at December 31, 2018 Change in Net Unrealized Gains / (Losses) on Investments still held at December 31, 2018 Assets Other assets: Equity investment $ 40,588 $ — $ 5,268 $ — $ — $ 45,856 $ 5,268 Total $ 40,588 $ — $ 5,268 $ — $ — $ 45,856 $ 5,268 Year Ended December 31, 2017 (in thousands) Balance at December 31, 2016 Purchases Total Realized and Unrealized Gains / (Losses) Net Transfers into (out of) Level 3 Settlement Balance at December 31, 2017 Change in Net Unrealized Gains / (Losses) on Investments still held at December 31, 2017 Assets Other assets: Equity investment $ 36,031 $ — $ 4,557 $ — $ — $ 40,588 $ 4,557 Other — 3,000 — — (3,000 ) — — Total $ 36,031 $ 3,000 $ 4,557 $ — $ (3,000 ) $ 40,588 $ 4,557 Offsetting of Financial Assets and Liabilities The Company does not net securities borrowed and securities loaned, or securities purchased under agreements to resell and securities sold under agreements to repurchase. These financial instruments are presented on a gross basis in the consolidated statements of financial condition. In the tables below, the amounts of financial instruments owned that are not offset in the consolidated statements of financial condition, but could be netted against financial liabilities with specific counterparties under legally enforceable master netting agreements in the event of default, are presented to provide financial statement readers with the Company’s estimate of its net exposure to counterparties for these financial instruments. The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of December 31, 2018 and December 31, 2017 : December 31, 2018 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition Gross Amounts Not Offset In the Consolidated Statement of Financial Condition (in thousands) Financial Instruments Cash Collateral Received Net Amount Offsetting of Financial Assets: Securities borrowed $ 1,399,684 $ — $ 1,399,684 $ (1,361,635 ) $ (8,822 ) $ 29,227 Securities purchased under agreements to resell 15,475 — 15,475 (15,475 ) — — Trading assets, at fair value: Currency forwards 2,792,373 (2,790,242 ) 2,131 — — 2,131 Options 11,899 — 11,899 (11,899 ) — — Total $ 4,219,431 $ (2,790,242 ) $ 1,429,189 $ (1,389,009 ) $ (8,822 ) $ 31,358 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition Gross Amounts Not Offset In the Consolidated Statement of Financial Condition (in thousands) Financial Instruments Cash Collateral Pledged Net Amount Offsetting of Financial Liabilities: Securities loaned $ 1,130,039 $ — $ 1,130,039 $ (1,108,461 ) $ (8,822 ) $ 12,756 Securities sold under agreements to repurchase 281,861 — $ 281,861 (281,861 ) — — Trading liabilities, at fair value: Currency forwards 2,720,749 (2,719,954 ) 795 — (792 ) 3 Options 11,051 — 11,051 (11,051 ) — — Total $ 4,143,700 $ (2,719,954 ) $ 1,423,746 $ (1,401,373 ) $ (9,614 ) $ 12,759 December 31, 2017 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition Gross Amounts Not Offset In the Statement of Financial Condition (in thousands) Financial Instruments Cash Collateral Received Net Amount Offsetting of Financial Assets: Securities borrowed $ 1,471,172 $ — $ 1,471,172 $ (1,418,672 ) $ (13,318 ) $ 39,182 Trading assets, at fair value: Currency forwards 2,045,487 (2,027,697 ) 17,790 — — 17,790 Options 7,045 — 7,045 (45 ) — 7,000 Total $ 3,523,704 $ (2,027,697 ) $ 1,496,007 $ (1,418,717 ) $ (13,318 ) $ 63,972 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition Gross Amounts Not Offset In the Statement of Financial Condition (in thousands) Financial Instruments Cash Collateral Pledged Net Amount Offsetting of Financial Liabilities: Securities loaned $ 754,687 $ — $ 754,687 $ (737,731 ) $ (10,776 ) $ 6,180 Securities sold under agreements to repurchase 390,642 — 390,642 (390,642 ) — — Trading liabilities, at fair value: Currency forwards 2,032,017 (2,024,991 ) 7,026 — — 7,026 Options 5,839 — 5,839 (56 ) — 5,783 Total $ 3,183,185 $ (2,024,991 ) $ 1,158,194 $ (1,128,429 ) $ (10,776 ) $ 18,989 The following table presents gross obligations for securities sold under agreements to repurchase and for securities lending transactions by remaining contractual maturity and the class of collateral pledged: December 31, 2018 Remaining Contractual Maturity (in thousands) Overnight and Continuous Less than 30 days 30 - 60 days 61 - 90 Days Total Securities sold under agreements to repurchase: Equity securities $ — $ 45,000 $ 65,000 $ 160,000 $ 270,000 U.S. and Non-U.S. government obligations 11,861 — — — 11,861 Total 11,861 45,000 65,000 160,000 281,861 Securities loaned: Equity securities 1,130,039 — — — 1,130,039 Total $ 1,130,039 $ — $ — $ — $ 1,130,039 December 31, 2017 Remaining Contractual Maturity (in thousands) Overnight and Continuous Less than 30 days 30 - 60 days 61 - 90 Days Total Securities sold under agreements to repurchase: Equity securities $ — $ 100,000 $ 90,000 $ 200,000 $ 390,000 U.S. and Non-U.S. government obligations 642 — — — 642 Total 642 100,000 90,000 200,000 390,642 Securities loaned: Equity securities 754,687 — — — 754,687 Total $ 754,687 $ — $ — $ — $ 754,687 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The fair value of the Company’s derivative instruments on a gross basis consisted of the following at December 31, 2018 and December 31, 2017 : (in thousands) December 31, 2018 December 31, 2017 Derivatives Assets Financial Statements Location Fair Value Notional Fair Value Notional Derivative instruments not designated as hedging instruments: Equities futures Receivables from broker dealers and clearing organizations $ (15,382 ) $ 2,891,606 $ (505 ) $ 1,985,770 Commodity futures Receivables from broker dealers and clearing organizations 69,235 11,595,215 971 21,231,001 Currency futures Receivables from broker dealers and clearing organizations (9,432 ) 3,756,914 26,548 3,994,412 Fixed income futures Receivables from broker dealers and clearing organizations (28 ) 18,694 73 44,395 Options Financial instruments owned 11,899 659,101 7,045 682,369 Currency forwards Financial instruments owned 2,792,373 171,288,432 2,045,487 124,000,221 Derivatives Liabilities Financial Statements Location Fair Value Notional Fair Value Notional Derivative instruments not designated as hedging instruments: Equities futures Payables to broker dealers and clearing organizations $ 468 $ 106,487 $ (575 ) $ 142,658 Commodity futures Payables to broker dealers and clearing organizations (375 ) 54,782 (1,602 ) 130,042 Currency futures Payables to broker dealers and clearing organizations (30,643 ) 6,239,725 (13,947 ) 7,756,958 Fixed income futures Payables to broker dealers and clearing organizations 93 8,591 (1 ) 2,584 Options Financial instruments sold, not yet purchased 11,051 608,756 5,839 681,147 Currency forwards Financial instruments sold, not yet purchased 2,720,749 171,252,224 2,032,017 123,993,234 Derivative instruments designated as hedging instruments: Currency forwards Financial instruments sold, not yet purchased (792 ) 13,501 (514 ) 16,115 Amounts included in receivables from and payables to broker-dealers and clearing organizations represent net variation margin on long and short futures contracts. The following table summarizes the net gain from derivative instruments not designated as hedging instruments under ASC 815, which are recorded in trading income, net, and from those designated as hedging instrument under ASC 815, which are recorded in accumulated other comprehensive income in the accompanying consolidated statements of comprehensive income for the years ended December 31, 2018 , 2017 , and 2016 . Years Ended December 31, (in thousands) Financial Statements Location 2018 2017 2016 Derivative instruments not designated as hedging instruments: Futures Trading income, net $ (309,598 ) $ 290,609 $ 559,626 Currency forwards Trading income, net 174,310 2,603 1,915 Options Trading income, net (6,161 ) (7,166 ) (410 ) Others Trading income, net — — (6 ) $ (141,449 ) $ 286,046 $ 561,125 Derivative instruments designated as hedging instruments: Foreign exchange - forward contract Accumulated other comprehensive income $ 63 $ (642 ) — |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues from Contracts with Customers | Revenues from Contracts with Customers Revenue Recognition The Company adopted ASC Topic 606, Revenue from Contracts with Customers as of January 1, 2018 in the consolidated financial statements by applying the modified retrospective method. The Company’s revenue recognition methods for its contracts with customers prior to the adoption of Topic 606 are consistent with its methods after the adoption of Topic 606. Accordingly, the adoption of the new standard did not result in a transition adjustment to opening retained earnings, and as a result, revenues for contracts with customers would not have been adjusted in prior periods and are not presented herein on an adjusted basis. The new revenue guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other U.S. GAAP, and as a result, did not have an impact on the elements of the Company’s consolidated statement of comprehensive income most closely associated with financial instruments, including trading income, net and interest and dividend income. The new standard primarily impacts the presentation of the following revenue streams: • Commissions, net. The Company earns commission revenue by acting as an agent on behalf of customers. The Company’s performance obligations consist of trade execution and clearing services and are satisfied on the trade date; accordingly, commission revenues are recorded on the trade date. Commission revenues are paid on settlement date; therefore, a receivable is recognized as of the trade date. Under a commission management program, the Company allows institutional clients to allocate a portion of their gross commissions to pay for research and other services provided by third parties. As the Company acts as an agent in these transactions, it records such expenses on a net basis within Commissions and technology services in the consolidated statements of comprehensive income. • Technology services. The Company’s technology services revenues consist of technology licensing fees and agency commission fees. Technology licensing fees are earned from third parties for licensing of the Company’s proprietary risk management and trading infrastructure technology and the provision of associated management and hosting services. These fees include both upfront and annual recurring fees as well as, in certain cases, contingent fees based on customer revenues, which represent variable consideration. The services offered under these contracts are delivered as an integrated package and are interdependent and have the same pattern of transfer to the customer; accordingly, the Company measures and recognizes them as a single performance obligation. The performance obligation is satisfied over time, and, therefore, revenue is recognized as time passes. Variable consideration has not been included in the transaction price as the amount of consideration is contingent on factors outside the Company’s control and thus it is not probable that a significant reversal of cumulative revenue recognized will not occur. Recurring fees, which exclude variable consideration, are billed and collected on a quarterly basis and are included within Receivables from broker dealers and clearing organizations. Disaggregation of Revenues The following table presents the Company’s revenue from contracts with customers disaggregated by the services described above, by timing of revenue recognition, reconciled to the Company’s segments, for the year ended December 31, 2018 : Year Ended December 31, 2018 (in thousands) Market Making Execution Services Corporate Total Revenues from Contracts with Customers: Commissions, net $ 28,813 $ 150,206 $ — $ 179,019 Technology services — 5,320 — 5,320 Total revenue from contracts with customers 28,813 155,526 — 184,339 Other sources of revenue 1,355,662 340,807 (2,090 ) 1,694,379 Total revenues 1,384,475 496,333 (2,090 ) 1,878,718 Timing of revenue recognition: Services transferred at a point in time 1,384,475 491,013 (2,090 ) 1,873,398 Services transferred over time — 5,320 — 5,320 Total revenues $ 1,384,475 $ 496,333 $ (2,090 ) $ 1,878,718 Information on Remaining Performance Obligations and Revenue Recognized As of December 31, 2018 , the aggregate amount of the transaction price allocated to the performance obligations relating to Technology Services revenues that are unsatisfied (or partially unsatisfied) was not material. Contract Assets and Contract Liabilities The timing of the revenue recognition may differ from the timing of payment from customers. The Company records a receivable when revenue is recognized prior to payment, and when the Company has an unconditional right to payment. The Company records a contract liability when payment is received prior to the time at which the satisfaction of the service obligation occurs. Receivables related to revenues from contracts with customers amounted to $1.7 million and $7.1 million as of December 31, 2018 and December 31, 2017 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income before income taxes and noncontrolling interest is as follows for the years ended December 31, 2018 , 2017 , and 2016 : For the Year Ended December 31, 2018 2017 2016 (in thousands) U.S. operations $ 659,937 $ 70,484 $ 138,950 Non-U.S. operations 36,426 42,680 40,641 $ 696,363 $ 113,164 $ 179,591 The provision for income taxes consists of the following for the years ended December 31, 2018 , 2017 , and 2016 : For the Year Ended December 31, (in thousands) 2018 2017 2016 Current provision (benefit) Federal $ 49,047 $ (9,991 ) $ 2,690 State and Local 18,697 65 38 Foreign 4,276 1,219 5,210 Deferred provision (benefit) Federal 4,986 106,415 13,547 State and Local (1,599 ) (3,380 ) 194 Foreign 764 (62 ) (428 ) Provision for income taxes $ 76,171 $ 94,266 $ 21,251 The reconciliation of the tax provision at the U.S. Federal Statutory Rate to the provision for income taxes for the years ended December 31, 2018 , 2017 , and 2016 : For the Year Ended December 31, 2018 2017 2016 (in thousands, except percentages) Tax provision at the U.S. federal statutory rate 21.0 % 35.0 % 35.0 % Less: rate attributable to noncontrolling interest (10.2 ) (19.1 ) (24.4 ) State and local taxes, net of federal benefit 1.9 (1.9 ) 1.3 Impact of 2017 Tax Act on deferred tax assets — 80.1 — Impact of 2017 Tax Act on tax receivable agreement obligation — (12.9 ) — Non-deductible expenses, net (0.3 ) 1.9 — Other, net (1.5 ) 0.2 — Effective tax rate 10.9 % 83.3 % 11.9 % The components of the deferred tax assets and liabilities as of December 31, 2018 , and 2017 are as follows December 31, (in thousands) 2018 2017 Deferred income tax assets Tax Receivable Agreement $ 167,117 $ 101,594 Share-based compensation 9,419 5,213 Intangibles 12,738 14,547 Fixed assets and other 21,088 13,425 Tax credits and net operating loss carryforwards 44,972 50,867 Less: Valuation allowance on net operating loss carryforwards and tax credits (44,947 ) (43,544 ) Total deferred income tax assets $ 210,387 $ 142,102 Deferred income tax liabilities Intangibles 10,028 16,342 Total deferred income tax liabilities $ 10,028 $ 16,342 Subsequent to consummation of the Reorganization Transactions and the IPO, the Company is subject to U.S. federal, state and local income tax at the rate applicable to corporations less the rate attributable to the noncontrolling interest in Virtu Financial. These noncontrolling interests are subject to U.S. taxation as partnerships. Accordingly, for years ended December 31, 2018 , 2017 and 2016 , the income attributable to these noncontrolling interests is reported in the consolidated statements of comprehensive income, but the related U.S. income tax expense attributable to these noncontrolling interests is not reported by the Company as it is the obligation of the individual partners. Income tax expense is also affected by the differing effective tax rates in foreign, state and local jurisdictions where certain of the Company’s subsidiaries are subject to corporate taxation. Included in Other assets on the consolidated statements of financial condition at December 31, 2018 and December 31, 2017 are current income tax receivables of $41.1 million and $115.2 million , respectively. The balance at December 31, 2018 primarily comprises income taxes due to the Company from federal, state and local, and foreign tax jurisdictions based on income before taxes, and the balance at December 31, 2017 primarily comprises the income tax benefit of KCG net operating losses that were generated prior to the Acquisition of KCG and are eligible to be carried back by the Company. Included in Accounts payable and accrued expenses and other liabilities on the consolidated statements of financial condition at December 31, 2018 and December 31, 2017 are current tax liabilities of $10.3 million and $7.6 million , respectively. The balances primarily comprise income taxes owed to federal, state and local, and foreign tax jurisdictions based on income before taxes. Deferred income taxes arise primarily due to the amortization of the deferred tax assets recognized in connection with the IPO ( Note 6 "Tax Receivable Agreements" ) and the Acquisition of KCG ( Note 3 "Acquisition of KCG" ), differences in the valuation of financial assets and liabilities, and other temporary differences arising from the deductibility of compensation, depreciation, and other expenses in different time periods for book and income tax return purposes. There are no expiration dates on the deferred tax assets. The Company’s deferred tax asset at December 31, 2017 includes an alternative minimum tax credit carryforward of $0.6 million , which can be either refunded over a period of years or applied against future income tax liability pursuant to the 2017 Tax Act. The provisions of ASC 740 require that carrying amounts of deferred tax assets be reduced by a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically with appropriate consideration given to all positive and negative evidence related to the realization of the deferred tax assets. As a result of the Acquisition of KCG, the Company has non-U.S. net operating losses at December 31, 2018 and December 31, 2017 of $239.3 million and $231.8 million , respectively, and has recorded a related deferred tax asset of $44.9 million and $43.5 million , respectively. A full valuation allowance was also recorded against this deferred tax asset at December 31, 2018 and December 31, 2017 as it is more likely than not that this deferred tax asset will not be realized. No valuation allowance against the remaining deferred taxes was recorded as of December 31, 2018 and December 31, 2017 because it is more likely than not that these deferred tax assets will be fully realized. The Company is subject to taxation in U.S. federal, state, local and foreign jurisdictions. As of December 31, 2018 , the Company’s tax years for 2013 through 2017 and 2010 through 2017 are subject to examination by U.S. and non-U.S. tax authorities, respectively. As a result of the Acquisition of KCG, the Company has assumed any KCG tax exposures. KCG is currently subject to U.S. federal income tax examinations for 2013 through 2017, and to non-U.S. income tax examinations for the tax years 2007 through 2017. In addition, the Company is subject to state and local income tax examinations in various jurisdictions for the tax years 2013 through 2017. The final outcome of these examinations is not yet determinable. However, the Company anticipates that adjustments to the unrecognized tax benefits, if any, will not result in a material change to the financial condition, results of operations and cash flows. The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income or loss before income taxes and noncontrolling interest. Penalties, if any, are recorded in operations and administrative expense and interest received or paid is recorded in other, net or operations and administrative expense in the consolidated statement of comprehensive income. The Company had $7.3 million of unrecognized tax benefits as of December 31, 2018 , all of which would affect the Company’s effective tax rate if recognized. The Company has determined that there are no uncertain tax positions that would have a material impact on the Company’s financial position as of December 31, 2018 . December 31, (in thousands) 2018 Balance at December 31, 2017 $ 7,300 Increase from Acquisition of KCG — Decreases based on tax positions related to prior period (840 ) Increase based on tax positions related to current period 868 Balance at December 31, 2018 $ 7,333 The 2017 Tax Act was signed into law on December 22, 2017 and significantly revises the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, and eliminating certain deductions. As of December 31, 2017 , the Company recorded a reduction of its deferred tax assets for the impact of the 2017 Tax Act of approximately $90.6 million , which was primarily composed of the remeasurement of federal net deferred tax assets as a result of the permanent reduction in the U.S. statutory corporate tax rate from 35% to 21%. During the year ended December 31, 2018 , the Company did not make any further adjustments due to the 2017 Tax Act. The Company has completed its determination of the accounting implications of the 2017 Tax act on its tax balances. |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Guarantees | Commitments, Contingencies and Guarantees At December 31, 2018 , minimum rental commitments under non-cancellable leases are approximately as follows: Minimum Rental Commitments Year Ending December 31 Capital Operating Subleases Net Rental Commitments 2019 $ 21,983 $ 32,755 (8,979 ) 45,759 2020 11,283 30,473 (9,324 ) 32,432 2021 1,651 25,564 (8,844 ) 18,371 2022 — 22,710 (8,552 ) 14,158 2023 — 21,456 (8,695 ) 12,761 Thereafter — 113,779 (36,312 ) 77,467 Total minimum lease payments $ 34,917 $ 246,737 $ (80,706 ) $ 200,948 Total operating lease expense, net of amortization expense related to landlord incentives, for the years ended December 31, 2018 , 2017 , and 2016 , was approximately $12.7 million , $13.1 million , and $2.4 million , respectively. Occupancy lease expense for the years ended December 31, 2018 , 2017 , and 2016 of $12.5 million , $12.9 million , and $1.3 million , respectively, is included within operations and administrative expenses in the consolidated statements of comprehensive income. Communication equipment lease expense for the years ended December 31, 2018 , 2017 , and 2016 of $0.2 million , $0.2 million , and $1.1 million , respectively, is included within communication and data processing in the accompanying consolidated statements of comprehensive income. Legal Proceedings In the ordinary course of business, the nature of the Company’s business subjects it to claims, lawsuits, regulatory examinations or investigations and other proceedings. The Company and its subsidiaries are subject to several of these matters at the present time. Given the inherent difficulty of predicting the outcome of litigation and regulatory matters, particularly in regulatory examinations or investigations or other proceedings in which substantial or indeterminate damages or fines are sought, or where such matters are in the early stages, the Company cannot estimate losses or ranges of losses for such matters where there is only a reasonable possibility that a loss may be incurred. In addition, there are numerous factors that result in a greater degree of complexity in class-action lawsuits as compared to other types of litigation. There can be no assurance that these legal proceedings will not have a material adverse effect on the Company’s results of operations in any future period, and a material judgment, fine or sanction could have a material adverse impact on the Company’s financial condition, results of operations and cash flows. However, it is the opinion of management, after consultation with legal counsel that, based on information currently available, the ultimate outcome of these matters will not have a material adverse impact on the business, financial condition or operating results of the Company, although they might be material to the operating results for any particular reporting period. The Company carries directors’ and officers’ liability insurance coverage for potential claims, including securities actions, against the Company and its respective directors and officers. In connection with the Acquisition of KCG, a previously filed complaint, which was initially captioned Greenway v. KCG Holdings, Inc., et al., Case No. 2017-421-JTL and filed on behalf of a putative class in Delaware Chancery Court, was recaptioned Chester County Employees’ Retirement Fund v. KCG Holdings, Inc., et al. , amended and refiled on February 14, 2018 to include claims for the alleged breach of fiduciary duties against former KCG board members, claims against each of the Company and Jefferies LLC for allegedly aiding and abetting the KCG board members’ alleged breaches of fiduciary duty and a claim against the Company and Jefferies LLC for alleged civil conspiracy. The amended complaint was again amended on July 16, 2018 with the filing of the Verified Second Amended Class Action Complaint (the “Second Amended Complaint”) to include additional factual allegations. No amount of damages is stated in the Second Amended Complaint, against which Virtu intends to defend vigorously. On January 29, 2019, the Company was named as a defendant in Ford v. ProShares Trust II, et al. , No. 19-cv-886. The complaint was filed in federal district court in New York on behalf of a putative class, and asserts claims against the Company and numerous other financial institutions under Section 11 of the Securities Act of 1933 in connection with trading in a ProShares inverse-volatility ETF. The complaint does not specify the amount of alleged damages. The Company believes that the claims are without merit and intends to defend the lawsuit vigorously. Additionally, on February 27, 2019, the Company was named as a defendant in Bittner v. ProShares Trust, et al., No. 19-cv-1840. The complaint was filed in federal district court in New York on behalf of a putative class, and asserts substantially similar allegations to those in the Ford complaint. The complaint does not specify the amount of alleged damages. The Company believes that the claims are without merit and intends to defend the lawsuit vigorously. Other Legal and Regulatory Matters The Company owns subsidiaries including regulated entities that are subject to extensive oversight under federal, state and applicable international laws as well as self-regulatory organization ("SRO") rules. Changes in market structure and the need to remain competitive require constant changes to the Company's systems, order routing and order handling procedures. The Company makes these changes while continuously endeavoring to comply with many complex laws and rules. Compliance, surveillance and trading issues common in the securities industry are monitored by, reported to, and/or reviewed in the ordinary course of business by the Company's regulators in the U.S. and abroad. As a major order flow execution destination, the Company is named from time to time in, or is asked to respond to a number of regulatory matters brought by U.S. regulators, foreign regulators, SROs, as well as actions brought by private plaintiffs, which arise from its business activities. There has recently been an increased focus by regulators on Anti-Money Laundering and sanctions compliance by broker-dealers and similar entities, as well as an enhanced interest on suspicious activity reporting and transactions involving microcap securities. In addition, there has been an increased focus by Congress, federal and state regulators, SROs and the media on market structure issues, and in particular, high frequency trading, best execution, internalization, ATS manner of operations, market fragmentation and complexity, colocation, cybersecurity, access to market data feeds and remuneration arrangements, such as payment for order flow and exchange fee structures. From time to time, the Company is the subject of requests for information and documents from the SEC, FINRA and other regulators. It is the Company's practice to cooperate and comply with the requests for information and documents. The Company is currently the subject of various regulatory reviews and investigations by federal and foreign regulators and SROs, including the SEC and the Financial Industry Regulatory Authority. In some instances, these matters may rise to a disciplinary action and/or a civil or administrative action. For example, the Autorité des Marchés Financiers ("AMF") fined the Company’s European subsidiary in the amount of €5.0 million (approximately $5.4 million ) based on its allegations that the subsidiary of a predecessor entity engaged in price manipulation and violations of the AMF General Regulation and Euronext Market Rules. The fine was subsequently reduced in 2017 to €3.3 million (approximately $3.9 million ) and recently was reduced to €3.0 million . The Company has fully reserved for the monetary penalty as of December 31, 2018 and anticipates paying the fine during the year ended December 31, 2019. Representations and Warranties; Indemnification Arrangements In the normal course of its operations, the Company enters into contracts that contain a variety of representations and warranties in addition to indemnification obligations. The Company's maximum exposure under these arrangements is currently unknown, as any such exposure could relate to claims not yet brought or events which have not yet occurred. For example, in November 2013, KCG sold Urban Financial of America, LLC ("Urban"), the reverse mortgage origination and securitization business previously owned by Knight Capital Group, Inc., to an investor group now known as Finance of America Reverse, LLC ("FAR"). Pursuant to the terms of the Stock Purchase Agreement between KCG and FAR, Virtu has certain continuing obligations related to KCG's prior ownership of Urban and has been and, in the future may be, advised by FAR of potential claims thereunder. Consistent with standard business practices in the normal course of business, the Company has provided general indemnifications to its managers, officers, directors, employees, and agents against expenses, legal fees, judgments, fines, settlements, and other amounts actually and reasonably incurred by such persons under certain circumstances as more fully disclosed in its operating agreement. The overall maximum amount of the obligations (if any) cannot reasonably be estimated as it will depend on the facts and circumstances that give rise to any future claims. |
Capital Structure
Capital Structure | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Capital Structure | Capital Structure The Company has four classes of authorized common stock. The Class A Common Stock and the Class C Common Stock have one vote per share. The Class B Common Stock and the Class D common stock, par value $0.00001 per share (the "Class D Common Stock") have 10 votes per share. Shares of the Company’s common stock generally vote together as a single class on all matters submitted to a vote of the Company’s stockholders. During the period prior to the Reorganization Transactions and IPO, Class A-2 profits interests and Class B interests in Virtu Financial were issued to Employee Holdco (as defined below) on behalf of certain key employees and stakeholders. In connection with the Reorganization Transactions, all Class A-2 profits interests and Class B interests were reclassified into non-voting common interest units (the "Virtu Financial Units"). As of December 31, 2018 and December 31, 2017 , respectively, there were 8,760,755 and 12,301,067 Virtu Financial Units outstanding, respectively, and 3,540,312 , 1,930,468 , and 1,162,891 Virtu Financial Units and corresponding Class C Common Stock were exchanged into Class A Common Stock, forfeited or repurchased during the years ended December 31, 2018 , 2017 , and 2016 , respectively. Amended and Restated 2015 Management Incentive Plan The Company’s board of directors and stockholders adopted the 2015 Management Incentive Plan, which became effective upon consummation of the IPO, and was subsequently amended and restated following receipt of approval from the Company’s stockholders on June 30, 2017. The Amended and Restated 2015 Management Incentive Plan provides for the grant of stock options, restricted stock units, and other awards based on an aggregate of 16,000,000 shares of Class A Common Stock, subject to additional sublimits, including limits on the total option grant to any one participant in a single year and the total performance award to any one participant in a single year. Acquisition of KCG On the Closing Date and in connection with the financing of the Acquisition of KCG, the Company issued 6,346,155 shares of Class A Common Stock to Aranda for an aggregate purchase price of approximately $99.0 million and 39,725,979 shares of Class A Common Stock to the North Island Shareholder for an aggregate purchase price of approximately $613.5 million . On August 10, 2017, the Company issued an additional 1,666,666 shares of Class A Common Stock for an aggregate purchase price of $26.0 million and an additional 338,124 shares of Class A Common Stock for an aggregate purchase price of $5.2 million . See Note 3 "Acquisition of KCG" for further details. Share Repurchase Program In February 2018, the Company's board of directors authorized a new share repurchase program of up to $50.0 million in Class A Common Stock and Virtu Financial Units by March 31, 2019. The Company may repurchase shares from time to time in open market transactions, privately negotiated transactions or by other means. Repurchases may also be made under Rule 10b5-1 plans. The timing and amount of repurchase transactions will be determined by the Company's management based on its evaluation of market conditions, share price, legal requirements and other factors. The program may be suspended, modified or discontinued at any time without prior notice. On July 27, 2018, the Company's board of directors authorized the expansion of the Company's share repurchase program, increasing the total authorized amount by $50.0 million to $100.0 million and extending the duration of the program through September 30, 2019. Since the inception of the program in February 2018, the Company has repurchased approximately 2.6 million shares of Class A Common Stock and Virtu Financial Units for approximately $65.9 million . The Company now has approximately $34.1 million remaining capacity for future purchases of shares of Class A Common Stock and Virtu Financial Units under the program. Secondary Offerings In May 2018, the Company and certain selling stockholders completed a public offering (the “May 2018 Secondary Offering”) of 17,250,000 shares of Class A Common Stock by the Company and certain selling stockholders at a purchase price per share of $27.16 (the offering price to the public of $28.00 per share minus the underwriters’ discount), which included the exercise in full by the underwriters of their option to purchase additional shares in the May 2018 Secondary Offering. The Company sold 10,518,750 shares of Class A Common Stock in the offering, the net proceeds of which were used to purchase an equivalent number of Virtu Financial Units and corresponding shares of Class D Common Stock from TJMT Holdings LLC pursuant to that certain Member Purchase Agreement, entered into on May 15, 2018 by and between the Company and TJMT Holdings LLC. The selling stockholders sold 6,731,250 shares of Class A Common Stock in the May 2018 Secondary Offering, including 2,081,250 shares of Class A Common Stock issued by the Company upon the exercise of vested stock options. In connection with the May 2018 Secondary Offering, the Company, TJMT Holdings LLC, the North Island Stockholder, Havelock Fund Investments Pte. Ltd. (“Havelock”) and Aranda entered into that certain Amendment No. 1 to the Amended and Restated Registration Rights Agreement dated April 20, 2017, by and among the Company, TJMT Holdings LLC, the North Island Stockholder, Havelock, Aranda and certain direct or indirect equityholders of the Company (the “Amended and Restated Registration Rights Agreement”) to add Mr. Vincent Viola and Mr. Michael Viola and to confirm that certain other persons (including the Company’s CEO) remain parties to the Amended and Restated Registration Rights Agreement. Employee Exchanges During the years ended December 31, 2018 and 2017 , pursuant to the exchange agreement by and among the Company, Virtu Financial and holders of Virtu Financial Units, certain current and former employees elected to exchange 3,919,462 and 1,355,763 units, respectively in Virtu Financial held directly or on their behalf by Virtu Employee Holdco LLC (“Employee Holdco”) on a one -for-one basis for shares of Class A Common Stock. As a result of the completion of the IPO, the Reorganization Transactions, the Secondary Offerings, employee exchanges, and the share issuance in connection with the Acquisition of KCG, the Company holds approximately 56.7% interest in Virtu Financial at December 31, 2018 . |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | Share-based Compensation Pursuant to the Amended and Restated 2015 Management Incentive Plan as described in Note 16 "Capital Structure" , and in connection with the IPO, non-qualified stock options to purchase shares of Class A Common Stock were granted, each of which vests in equal annual installments over a period of the four years from grant date and expires not later than 10 years from the date of grant. The following table summarizes activity related to stock options for the year ended December 31, 2018 and 2017 : Options Outstanding Options Exercisable Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Number of Options Weighted Average Exercise Price Per Share At December 31, 2016 8,234,000 $ 19.00 8.29 2,058,500 $ 19.00 Granted — — — — — Exercised — — — — — Forfeited or expired (496,000 ) — — — — At December 31, 2017 7,738,000 $ 19.00 7.29 3,869,000 $ 19.00 Granted — — — — — Exercised (4,168,100 ) 19.00 — — — Forfeited or expired (83,750 ) — — — — At December 31, 2018 3,486,150 $ 19.00 6.30 1,660,400 $ 19.00 The expected life has been determined based on an average of vesting and contractual period. The risk-free interest rate was determined based on the yields available on U.S. Treasury zero-coupon issues. The expected stock price volatility was determined based on historical volatilities of comparable companies. The expected dividend yield was determined based on estimated future dividend payments divided by the IPO stock price. The Company recognized $5.8 million , $5.2 million , and $5.6 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively, of compensation expense in relation to the stock options issued and outstanding. As of December 31, 2018 and December 31, 2017 , total unrecognized share-based compensation expense related to unvested stock options was $1.6 million and $7.5 million , respectively, and these amounts are to be recognized over a weighted average period of 0.3 and 1.3 years, respectively. Class A Common Stock and Restricted Stock Units Pursuant to the Amended and Restated 2015 Management Incentive Plan as described in Note 16 "Capital Structure" , subsequent to the IPO, shares of immediately vested Class A Common Stock and restricted stock units were granted, the latter which vest over a period of up to 4 years . The fair value of the Class A Common Stock and RSUs was determined based on a volume weighted average price and is being recognized on a straight line basis over the vesting period. For the years ended December 31, 2018 , 2017 , and 2016 , respectively, there were 594,536 , 19,719 , and 656,019 shares of immediately vested Class A Common Stock granted as part of year-end compensation. In addition, the Company accrued compensation expense of $11.2 million and $11.0 million for the years ended December 31, 2018 and 2017 , respectively, related to immediately vested Class A Common Stock expected to be awarded as part of year-end incentive compensation, which was included in employee compensation and payroll taxes on the consolidated statements of comprehensive income and accounts payable and accrued expenses and other liabilities on the consolidated statements of financial condition. The following table summarizes activity related to the RSUs: Number of Shares Weighted Average Fair Value At December 31, 2016 1,573,441 18.28 Granted 64,402 18.09 Forfeited (258,250 ) 18.4 Vested (526,546 ) 18.75 At December 31, 2017 853,047 17.94 Granted 1,265,899 20.89 Forfeited (127,493 ) 18.30 Vested (612,531 ) 18.76 At December 31, 2018 1,378,922 $ 20.03 The Company recognized $17.9 million , $9.9 million , and $6.3 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively, of compensation expense in relation to the restricted stock units. As of December 31, 2018 and December 31, 2017 , total unrecognized share-based compensation expense related to unvested RSUs was $21.3 million and $14.3 million , respectively, and this amount is to be recognized over a weighted average period of 1.7 and 1.5 years, respectively. |
Property, Equipment and Capital
Property, Equipment and Capitalized Software | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment and Capitalized Software | Property, Equipment and Capitalized Software Property, equipment and capitalized software consisted of the following at December 31, 2018 and 2017 : (in thousands) 2018 2017 Capitalized software costs $ 108,220 $ 94,915 Leasehold improvements 67,995 93,624 Furniture and equipment 260,825 324,135 Total 437,040 512,674 Less: Accumulated depreciation and amortization (323,718 ) (375,656 ) Total property, equipment and capitalized software, net $ 113,322 $ 137,018 Depreciation expense for property and equipment for the years ended December 31, 2018 , 2017 , and 2016 was approximately $48.4 million , $36.8 million , and $19.6 million , respectively, and is included within depreciation and amortization expense in the consolidated statements of comprehensive income. The Company’s capitalized software development costs excluding the compensation charges recognized in relation to the IPO disclosed below were approximately $24.4 million , $15.7 million , and $11.1 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. The related amortization expense was approximately $20.4 million , $10.1 million , and $10.1 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively, and is included within depreciation and amortization expense in the consolidated statements of comprehensive income. Additionally, in connection with the compensation charges related to non-voting interest units (formerly Class B interests) recognized upon the IPO, the Company continuously capitalized the vesting of the interest units through December 31, 2017 as the non-voting interest units were fully vested. The Company capitalized approximately $0.04 million and $0.09 million for the years ended December 31, 2017 and 2016 , respectively. The amortization costs related to these capitalized compensation charges and previously capitalized compensation charges related to the Class B Interests of Virtu East MIP LLC and the Company's Class B interests were approximately $0.02 million , $0.07 million , and $0.7 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. |
Regulatory Requirement
Regulatory Requirement | 12 Months Ended |
Dec. 31, 2018 | |
Regulatory Capital Requirements [Abstract] | |
Regulatory Requirement | Regulatory Requirement As of December 31, 2018 and December 31, 2017 , broker-dealer subsidiaries of the Company are subject to the SEC Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum net capital of $1.0 million for each of the three broker-dealers. Pursuant to NYSE rules, VAL was also required to maintain $1.0 million of capital in connection with the operation of its designated market maker (“DMM”) business as of December 31, 2018 . The required amount is determined under the exchange rules as the greater of (i) $1 million or (ii) $75,000 for every 0.1% of NYSE transaction dollar volume in each of the securities for which the Company is registered as the DMM. The DMM business was transferred from VFCM to VAL during the second quarter of 2018. VFCM was required to maintain $4.1 million in connection with the operation of its DMM business as of December 31, 2017 . The regulatory capital and regulatory capital requirements of these subsidiaries as of December 31, 2018 were as follows: (in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital Virtu Americas LLC $ 381,211 $ 2,035 $ 379,176 Virtu Financial BD LLC 133,850 1,000 132,850 Virtu Financial Capital Markets LLC 9,457 1,000 8,457 The regulatory capital and regulatory capital requirements of these subsidiaries as of December 31, 2017 were as follows: (in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital Virtu Americas LLC $ 379,875 $ 1,000 $ 378,875 Virtu Financial BD LLC 40,683 1,000 39,683 Virtu Financial Capital Markets LLC 8,308 5,114 3,194 |
Geographic Information and Busi
Geographic Information and Business Segments | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Geographic Information and Business Segments | Geographic Information and Business Segments The Company operates its business in the U.S. and internationally, primarily in Europe and Asia. Significant transactions and balances between geographic regions occur primarily as a result of certain Company’s subsidiaries incurring operating expenses such as employee compensation, communications and data processing and other overhead costs, for the purpose of providing execution, clearing and other support services to affiliates. Charges for transactions between regions are designed to approximate full costs. Intra-region income and expenses and related balances have been eliminated in the geographic information presented below to accurately reflect the external business conducted in each geographical region. The revenues are attributed to countries based on the locations of the subsidiaries. The following table presents total revenues by geographic area for the years ended December 31, 2018 , 2017 , and 2016 : Years Ended December 31, (in thousands) 2018 2017 2016 Revenues: United States $ 1,644,641 $ 791,044 $ 455,418 Ireland 81,531 97,637 139,642 United Kingdom 15,681 21,143 — Singapore 136,161 113,891 106,813 Others 704 4,267 399 Total revenues $ 1,878,718 $ 1,027,982 $ 702,272 Prior to the Acquisition of KCG, the Company was managed and operated as one business, and, accordingly, operated under one reportable segment. As a result of the acquisition of KCG, beginning in the third quarter of 2017 the Company has two operating segments: (i) Market Making and (ii) Execution Services; and one non-operating segment: Corporate. The Market Making segment principally consists of market making in the cash, futures and options markets across global equities, options, fixed income, currencies and commodities. As a market maker, the Company commits capital on a principal basis by offering to buy securities from, or sell securities to, broker dealers, banks and institutions. The Company engages in principal trading in the Market Making segment direct to clients as well as in a supplemental capacity on exchanges, ECNs and alternative trading systems ATSs. The Company is an active participant on all major global equity and futures exchanges and also trades on substantially all domestic electronic options exchanges. As a complement to electronic market making, the cash trading business handles specialized orders and also transacts on the OTC Link ATS operated by OTC Markets Group Inc. and the AIM. The Execution Services segment comprises agency-based trading and trading venues, offering execution services in global equities, options, futures and fixed income on behalf of institutions, banks and broker dealers as well as technology services revenues. The Company earns commissions and commission equivalents as an agent on behalf of clients as well as between principals to transactions; in addition, the Company will commit capital on behalf of clients as needed. Agency-based, execution-only trading in the segment is done primarily through a variety of access points including: (i) algorithmic trading and order routing in global equities and options; (ii) institutional sales traders executing program, block and riskless principal trades in global equities and ETFs; and (iii) an ATS for U.S. equities. Technology licensing fees are earned from third parties for licensing of the Company’s proprietary risk management and trading infrastructure technology and the provision of associated management and hosting services. The Corporate segment contains the Company's investments, principally in strategic trading-related opportunities and maintains corporate overhead expenses and all other income and expenses that are not attributable to the Company's other segments. Management evaluates the performance of its segments on a pre-tax basis. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. The Company’s total revenues and income before income taxes and noncontrolling interest (“Pre-tax earnings”) by segment for the years ended December 31, 2018 , 2017 , and 2016 are summarized in the following table: (in thousands) Market Making Execution Services Corporate (1) Consolidated Total 2018 Total revenue $ 1,384,475 $ 496,333 $ (2,090 ) $ 1,878,718 Income before income taxes and noncontrolling interest 422,648 325,043 (51,328 ) 696,363 2017 Total revenue 836,707 99,135 92,140 1,027,982 Income (loss) before income taxes and noncontrolling interest 74,633 (12,519 ) 51,050 113,164 2016 Total revenue 691,884 10,352 36 702,272 Income (loss) before income taxes and noncontrolling interest 176,145 4,403 (957 ) 179,591 (1) Amounts shown in the Corporate segment include eliminations of income statement and balance sheet items included in the Company's other segments. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company incurs expenses and maintains balances with its affiliates in the ordinary course of business. As of December 31, 2018 , and December 31, 2017 the Company had a payable of $3.0 million to and a receivable of $0.1 million from its affiliates, respectively. The Company purchases network connections services from affiliates of Level 3 Communications (“Level 3”). An affiliate has a significant ownership interest in Level 3. The Company paid $1.5 million , $2.5 million , and $2.4 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively, to Level 3 for these services. The Company purchases and leases computer equipment and maintenance and support from affiliates of Dell Inc. (“Dell”). An affiliate has a significant ownership interest in Dell. The Company paid $0.8 million , $2.5 million , and $2.7 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively, to Dell for these purchases and leases. The Company purchases market data and software licenses from affiliates of Markit Group Holdings Limited (“MarkIt”). An affiliate has a significant ownership interest in MarkIt. For the year ended December 31, 2018 , the amount paid to MarkIt for these services was $0.4 million . The amounts paid to MarkIt were immaterial for the years ended December 31, 2017 and 2016 . The Company has held a minority interest in SBI since 2016 (See Note 11 "Financial Assets and Liabilities" ). The Company pays exchange fees to SBI for the trading activities conducted on its proprietary trading system. The Company paid $9.5 million , $6.0 million , and $2.2 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively, to SBI for these trading activities. The Company makes payments to two JVs (See Note 2, “Summary of Significant Accounting Policies”) to fund the construction of the microwave communication networks, and to purchase microwave communication networks, which are recorded within communications and data processing on the consolidated statements of comprehensive income. The Company made payments of $20.0 million , $8.3 million , and $0.6 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. Additionally, in the third quarter of 2018, the Company sold certain assets to one of its joint ventures, including the intangible assets associated with leases with a net carrying value of $1.1 million at the time of sale, for $0.6 million . |
Parent Company
Parent Company | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Parent Company | Parent Company VFI is the sole managing member of Virtu Financial, which guarantees the indebtedness of its direct subsidiary under the senior secured facility and the Notes (see Note 10 "Borrowings" ). VFI is limited to its ability to receive distributions (including for purposes of paying corporate and other overhead expenses and dividends) from Virtu Financial under its Fourth Amended and Restated Credit Agreement and the Notes. The following financial statements (the “Parent Company Only Financial Statements”) should be read in conjunction with the consolidated financial statements of the Company and the foregoing. Virtu Financial, Inc. (Parent Company Only) Condensed Statements of Financial Condition As of December 31, (In thousands except interest data) 2018 2017 Assets Cash $ 3,841 $ 60,193 Deferred tax asset 189,627 124,631 Investment in subsidiary 1,730,867 1,549,162 Other assets 35,998 10,731 Total assets $ 1,960,333 $ 1,744,717 Liabilities, redeemable membership interest and equity Liabilities Payable to affiliate $ 694,028 $ 767,101 Accounts payable and accrued expenses and other liabilities 6 7 Tax receivable agreement obligations 214,403 147,040 Total liabilities $ 908,437 $ 914,148 Virtu Financial Inc. Stockholders' equity Class A-1 — Authorized and Issued — 0 and 0 interests, Outstanding — 0 and 0 interests, at December 31, 2017 and 2016, respectively — — Class A-2 — Authorized and Issued — 0 and 0 interests, Outstanding — 0 and 0 interests, at December 31, 2017 and 2016, respectively — — Class A common stock (par value $0.00001), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 90,415,532 and 40,436,580 shares, Outstanding — 89,798,609 and 39,983,514 shares at December 31, 2017 and 2016, respectively 1 1 Class B common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 0 and 0 shares at December 31, 2017 and 2016, respectively — — Class C common stock (par value $0.00001), Authorized — 90,000,000 and 90,000,000 shares, Issued — 17,880,239 and 19,810,707 shares, Outstanding — 17,880,239 and 19,810,707, at December 31, 2017 and 2016, respectively — — Class D common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 79,610,490 and 79,610,490 shares at December 31, 2017 and 2016, respectively 1 1 Treasury stock, at cost, 616,923 and 453,066 shares at December 31, 2017 and 2016, respectively (55,005 ) (11,041 ) Additional paid-in capital 1,010,468 900,746 Accumulated deficit 96,513 (62,129 ) Accumulated other comprehensive income (loss) (82 ) 2,991 Total Virtu Financial Inc. stockholders' equity $ 1,051,896 $ 830,569 Total liabilities and stockholders' equity $ 1,960,333 $ 1,744,717 Virtu Financial, Inc. (Parent Company Only) Condensed Statements of Comprehensive Income For the Years Ended (in thousands) 2018 2017 2016 Revenues: Other Income — 86,599 — — 86,599 — Operating Expenses: Operations and administrative 1 181 198 Income (loss) before equity in income of subsidiary (1 ) 86,418 (198 ) Equity in income of subsidiary, net of tax 620,193 (83,479 ) 33,178 Net income $ 620,192 $ 2,939 $ 32,980 Net income attributable to common stockholders 620,192 2,939 32,980 Other comprehensive income (loss): Foreign currency translation adjustment, net of taxes (3,073 ) 3,243 (351 ) Comprehensive income $ 617,119 $ 6,182 $ 32,629 Virtu Financial, Inc. (Parent Company Only) Condensed Statements of Cash Flows For the Years Ended (in thousands) 2018 2017 2016 Cash flows from operating activities Net income $ 620,192 $ 2,939 $ 32,980 Adjustments to reconcile net income to net cash provided by operating activities: Equity in income of subsidiary, net of tax (305,936 ) (513,601 ) 157,975 Tax receivable agreement obligation reduction 79,722 (86,599 ) — Deferred taxes (64,996 ) 102,973 13,197 Other — (8,500 ) — Changes in operating assets and liabilities: (25,268 ) (8,832 ) (4,012 ) Net cash provided by (used in) operating activities 303,714 (511,620 ) 200,140 Cash flows from investing activities Acquisition of KCG, net of cash acquired, described in Note 3 — (23,908 ) — Investments in subsidiaries, equity basis 34,909 16,846 24,893 Net cash provided by (used in) investing activities 34,909 (7,062 ) 24,893 Cash flows from financing activities Distribution from Virtu Financial to non-controlling interest (206,903 ) (89,563 ) (162,969 ) Dividends (100,329 ) (63,814 ) (37,759 ) Payments on repurchase of non-voting common interest — (11,143 ) (2,000 ) Repurchase of Class C common stock (8,216 ) — (98 ) Purchase of treasury stock (66,218 ) (2,683 ) (4,539 ) Tax receivable agreement obligations (12,359 ) (7,045 ) — Issuance of common stock, net of offering costs — 735,974 — Issuance of common stock in connection with secondary offering, net of offering costs (950 ) — 16,677 Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with secondary offering — — (17,383 ) Net cash provided by (used in) financing activities $ (394,975 ) $ 561,726 $ (208,071 ) Net increase (decrease) in Cash $ (56,352 ) $ 43,044 $ 16,962 Cash, beginning of period 60,193 17,149 187 Cash, end of period $ 3,841 $ 60,193 $ 17,149 Supplemental disclosure of cash flow information: Taxes paid $ — $ 133 $ 8,813 Non-cash financing activities Tax receivable agreement described in Note 6 — 1,534 — Secondary offerings described in Note 16 — — 1,350 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events for adjustment to or disclosure in its consolidated financial statements through the date of this report, and has not identified any recordable or disclosable events, not otherwise reported in these consolidated financial statements or the notes thereto, except for the following: On February 7, 2019, the Company’s board of directors declared a dividend of $0.24 per share of Class A Common Stock and Class B Common Stock and per Restricted Stock Unit that will be paid on March 14, 2019 to holders of record as of February 28, 2019. On March 1, 2019 (the “ITG Closing Date”), the Company announced the completion of its previously announced acquisition of Investment Technology Group, Inc. (“ITG”) in a cash transaction valued at $30.30 per ITG share, or a total of approximately $1.0 billion (the “ITG Acquisition”). In connection with the ITG Acquisition, Virtu Financial, VFH and Impala Borrower LLC (the “Acquisition Borrower”), a subsidiary of the Company, entered into a Credit Agreement (the “New Credit Agreement”), with the lenders party thereto, Jefferies Finance LLC, as administrative agent and Jefferies Finance LLC and RBC Capital Markets, as joint lead arrangers and joint bookrunners. The New Credit Agreement provides (i) a senior secured first lien term loan in an aggregate principal amount of $1.5 billion , drawn in its entirety on the ITG Closing Date, with approximately $404.5 million being borrowed by VFH to repay all amounts outstanding under its existing term loan facility and the remaining approximately $1,095 million being borrowed by the Acquisition Borrower to finance the consideration and fees and expenses to be paid in connection with the ITG Acquisition, and (ii) a $50.0 million senior secured first lien revolving facility to VFH, with a $5.0 million letter of credit subfacility and a $5.0 million swingline subfacility. After the closing of ITG Acquisition, VFH will assume the obligations of the Acquisition Borrower in respect of the acquisition term loans. Additionally, on the ITG Closing Date, the Fourth Amended and Restated Credit Agreement was terminated. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The Company's consolidated financial statements are prepared in conformity with U.S. GAAP, which require management to make estimates and assumptions regarding measurements including the fair value of trading assets and liabilities, goodwill and intangibles, compensation accruals, capitalized software, income tax, and other matters that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ materially from those estimates. |
Earnings Per Share | Earnings Per Share Earnings per share (“EPS”) is calculated on both a basic and diluted basis. Basic EPS excludes dilution and is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is calculated by dividing the net income available for common stockholders by the diluted weighted average shares outstanding for that period. Diluted EPS includes the determinants of the basic EPS and, in addition, reflects the dilutive effect of shares of common stock estimated to be distributed in the future under the Company’s share based compensation plans. The Company grants restricted stock units (“RSUs”), which entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. As a result, the unvested RSUs meet the definition of a participating security requiring the application of the two-class method. Under the two-class method, earnings available to common shareholders, including both distributed and undistributed earnings, are allocated to each class of common stock and participating securities according to dividends declared and participating rights in undistributed earnings, which may cause diluted EPS to be more dilutive than the calculation using the treasury stock method. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include money market accounts, which are payable on demand, and short-term investments with an original maturity of less than 90 days. The Company maintains cash in bank deposit accounts that, at times, may exceed federally insured limits. The Company manages this risk by selecting financial institutions deemed highly creditworthy to minimize the risk. |
Securities Borrowed and Securities Loaned | Securities Borrowed and Securities Loaned The Company conducts securities borrowing and lending activities with external counterparties. In connection with these transactions, the Company receives or posts collateral, which comprises cash and/or securities. In accordance with substantially all of its stock borrow agreements, the Company is permitted to sell or repledge the securities received. Securities borrowed or loaned are recorded based on the amount of cash collateral advanced or received. The initial cash collateral advanced or received generally approximates or is greater than 102% of the fair value of the underlying securities borrowed or loaned. The Company monitors the fair value of securities borrowed and loaned, and delivers or obtains additional collateral as appropriate. Receivables and payables with the same counterparty are not offset in the consolidated statements of financial condition. Interest received or paid by the Company for these transactions is recorded gross on an accrual basis under interest and dividends income or interest and dividends expense in the consolidated statements of comprehensive income. |
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase | Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase In a repurchase agreement, securities sold under agreements to repurchase are treated as collateralized financing transactions and are recorded at contract value, plus accrued interest, which approximates fair value. It is the Company's policy that its custodian take possession of the underlying collateral securities with a fair value approximately equal to the principal amount of the repurchase transaction, including accrued interest. For reverse repurchase agreements, the Company typically requires delivery of collateral with a fair value approximately equal to the carrying value of the relevant assets in the consolidated statements of financial condition. To ensure that the fair value of the underlying collateral remains sufficient, the collateral is valued daily with additional collateral obtained or excess collateral returned, as permitted under contractual provisions. The Company does not net securities purchased under agreements to resell transactions with securities sold under agreements to repurchase transactions entered into with the same counterparty. The Company has entered into bilateral and tri-party term and overnight repurchase and other collateralized financing agreements which bear interest at negotiated rates. The Company receives cash and makes delivery of financial instruments to a custodian who monitors the market value of these instruments on a daily basis. The market value of the instruments delivered must be equal to or in excess of the principal amount loaned under the repurchase agreements plus the agreed upon margin requirement. The custodian may request additional collateral, if appropriate. Interest received or paid by the Company for these transactions is recorded gross on an accrual basis under interest and dividends income or interest and dividends expense in the consolidated statements of comprehensive income. |
Receivables from/Payables to Broker-dealers and Clearing Organizations | Receivables from/Payables to Broker-dealers and Clearing Organizations As of December 31, 2018 and 2017 , receivables from and payables to broker-dealers and clearing organizations primarily represented amounts due for unsettled trades, open equity in futures transactions, securities failed to deliver or failed to receive, deposits with clearing organizations or exchanges and balances due from or due to prime brokers in relation to the Company’s trading. Amounts receivable from broker-dealers and clearing organizations may be restricted to the extent that they serve as deposits for securities sold, not yet purchased. The Company presents its balances, including outstanding principal balances on all credit facilities, on a net by counterparty basis within receivables from and payables to broker-dealers and clearing organizations when the criteria for offsetting are met. In the normal course of business, a significant portion of the Company’s securities transactions, money balances, and security positions are transacted with several third-party brokers. The Company is subject to credit risk to the extent any broker with whom it conducts business is unable to fulfill contractual obligations on its behalf. The Company monitors the financial condition of such brokers and to minimize the risk of any losses from these counterparties. |
Financial Instruments Owned Including Those Pledged as Collateral and Financial Instruments Sold, Not Yet Purchased | Financial Instruments Owned Including Those Pledged as Collateral and Financial Instruments Sold, Not Yet Purchased Financial instruments owned and Financial instruments sold, not yet purchased relate to market making and trading activities, and include listed and other equity securities, listed equity options and fixed income securities. The Company records financial instruments owned, including those pledged as collateral, and financial instruments sold, not yet purchased at fair value. Gains and losses arising from financial instrument transactions are recorded net on a trade-date basis in trading income, net, in the consolidated statements of comprehensive income. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. Fair value measurements are not adjusted for transaction costs. The recognition of “block discounts” for large holdings of unrestricted financial instruments where quoted prices are readily and regularly available in an active market is prohibited. The Company categorizes its financial instruments into a three level hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy level assigned to each financial instrument is based on the assessment of the transparency and reliability of the inputs used in the valuation of such financial instruments at the measurement date based on the lowest level of input that is significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories based on inputs: Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 — Quoted prices in markets that are not active and financial instruments for which all significant inputs are observable, either directly or indirectly; or Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Transfers in or out of levels are recognized based on the beginning fair value of the period in which they occurred. |
Fair Value Option | Fair Value Option The fair value option election allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are recorded in other, net in the consolidated statements of comprehensive income. The decision to elect the fair value option is determined on an instrument by instrument basis, which must be applied to an entire instrument and is irrevocable once elected. |
Derivative Instruments | Derivative Instruments Derivative instruments are used for trading purposes, including economic hedges of trading instruments, are carried at fair value, and include futures, forward contracts, and options. Gains or losses on these derivative instruments are recognized currently within trading income, net in the consolidated statement of comprehensive income. Fair values for exchange-traded derivatives, principally futures, are based on quoted market prices. Fair values for over-the-counter derivative instruments, principally forward contracts, are based on the values of the underlying financial instruments within the contract. The underlying instruments are currencies, which are actively traded. The Company presents its derivatives balances on a net-by-counterparty basis when the criteria for offsetting are met. Cash flows associated with such derivative activities are included in cash flows from operating activities on the consolidated statements of cash flows |
Property, Equipment and Occupancy | Property, Equipment and Occupancy Property and equipment are carried at cost, less accumulated depreciation, except for the assets acquired in connection with acquisitions using the purchase accounting method, which were recorded at fair value on the respective date of acquisitions. Depreciation is provided using the straight-line method over estimated useful lives of the underlying assets. Routine maintenance, repairs and replacement costs are expensed as incurred and improvements that appreciably extend the useful life of the assets are capitalized. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in income. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. Furniture, fixtures, and equipment are depreciated over three to seven years. Leasehold improvements are amortized over the lesser of the life of the improvement or the term of the lease. The Company recognizes rent expense under operating leases with fixed rent escalations, lease incentives and free rent periods on a straight-line basis over the lease term beginning on the date the Company takes possession of or controls the use of the space, including during free rent periods. |
Lease Loss Accrual | Lease Loss Accrual The Company’s policy is to identify excess real estate capacity and where applicable, accrue for related future costs, net of projected sub-lease income upon the date the Company ceases to use the excess real estate, which is recorded under operating and administrative in the consolidated statements of comprehensive income. Such accrual is adjusted to the extent the actual terms of sub-leased property differ from the previous assumptions used in the calculation of the accrual. |
Capitalized Software | Capitalized Software The Company capitalizes costs of materials, consultants, and payroll and payroll related costs for employees incurred in developing internal-use software. Costs incurred during the preliminary project and post-implementation stages are charged to expense. Management’s judgment is required in determining the point at which various projects enter the stages at which costs may be capitalized, in assessing the ongoing value of the capitalized costs, and in determining the estimated useful lives over which the costs are amortized. Capitalized software development costs and related accumulated amortization are included in property, equipment and capitalized software in the accompanying consolidated statements of financial condition and are amortized over a period of 1.5 to 2.5 years , which represents the estimated useful lives of the underlying software. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the underlying net tangible and intangible assets of the Company’s acquisitions. Goodwill is not amortized but is assessed for impairment on an annual basis and between annual assessments whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is assessed at the reporting unit level, which is defined as an operating segment or one level below the operating segment. The Company assesses goodwill for impairment on an annual basis on July 1 and on an interim basis when certain events or circumstances exist. In the impairment assessment as of July 1, 2018, the Company assessed qualitative factors as described in ASC 350-20 for each of its reporting units for any indicators that the fair values of the reporting units were less than their carrying values. |
Intangible Assets | Intangible Assets The Company amortizes finite-lived intangible assets over their estimated useful lives. Finite-lived intangible assets are tested for impairment when impairment indicators are present, and if impaired, they are written down to fair value. |
Exchange Memberships and Stock | Exchange Memberships and Stock Exchange memberships are recorded at cost or, if any other than temporary impairment in value has occurred, at a value that reflects management’s estimate of fair value. Exchange memberships acquired in connection with the Acquisition of KCG were recorded at their fair value on the date of acquisition. Exchange stock includes shares that entitle the Company to certain trading privileges. The Company’s exchange memberships and stock are included in intangibles in the consolidated statements of financial condition. |
Trading Income, net | Trading Income, net Trading income, net is comprised of changes in the fair value of trading assets and liabilities (i.e., unrealized gains and losses) and realized gains and losses on trading assets and liabilities. Trading gains and losses on financial instruments owned and financial instruments sold, not yet purchased are recorded on the trade date and reported on a net basis in the consolidated statements of comprehensive income. |
Commissions, net and Technology Services | Commissions, net and Technology Services Commissions, net, which primarily comprise commissions and commission equivalents earned on institutional client orders, are recorded on a trade date basis. Under a commission management program, the Company allows institutional clients to allocate a portion of their gross commissions to pay for research and other services provided by third parties. The Company recognizes the related revenue when the third party research services are rendered and payments are made. As the Company acts as an agent in these transactions, it records such expenses on a net basis within commissions, net and technology services in the consolidated statements of comprehensive income. Technology services revenues consist of technology licensing fees and agency commission fees. Technology licensing fees are earned from third parties for licensing of the Company’s proprietary risk management and trading infrastructure technology and the provision of associated management and hosting services. These fees include both upfront and annual recurring fees, as well as, in certain cases, contingent fees based on client revenues, which represent variable consideration. The services offered under these contracts have the same pattern of transfer; accordingly, they are being measured and recognized as a single performance obligation. The performance obligation is satisfied over time, and accordingly, revenue is recognized as time passes. Variable consideration has not been included in the transaction price as the amount of consideration is contingent on factors outside the Company’s control and thus it is not probable that a significant reversal of cumulative revenue recognized will not occur. Recurring fees, which exclude variable consideration, are billed and collected on a quarterly basis. |
Interest and Dividends Income/Interest and Dividends Expense | Interest and Dividends Income/Interest and Dividends Expense Interest income and interest expense are accrued in accordance with contractual rates. Interest income consists of interest earned on collateralized financing arrangements and on cash held by brokers. Interest expense includes interest expense from collateralized transactions, margin and related lines of credit. Dividends on financial instruments owned including those pledged as collateral and financial instruments sold, not yet purchased are recorded on the ex-dividend date and interest is recognized on an accrual basis. |
Brokerage, Exchange and Clearance Fees, Net | Brokerage, Exchange and Clearance Fees, Net Brokerage, exchange and clearance fees, net, comprise the costs of executing and clearing trades and are recorded on a trade date basis. Rebates consist of volume discounts, credits or payments received from exchanges or other market places related to the placement and/or removal of liquidity from the order flow in the marketplace. Rebates are recorded on an accrual basis and included net within brokerage, exchange and clearance fees in the accompanying consolidated statements of comprehensive income. |
Payments for Order Flow | Payments for Order Flow Payments for order flow represent payments to broker-dealer clients, in the normal course of business, for directing their order flow in U.S. equities to the Company. Payments for order flow are recorded on a trade-date basis in the consolidated statements of comprehensive income. |
Income Taxes | Income Taxes Subsequent to consummation of the Reorganization Transactions and the IPO, the Company is subject to U.S. federal, state and local income taxes on its taxable income. The Company's subsidiaries are subject to income taxes in the respective jurisdictions (including foreign jurisdictions) in which they operate. Prior to the consummation of the Reorganization Transactions and the IPO, no provision for United States federal, state and local income tax was required, as Virtu Financial is a limited liability company and is treated as a pass-through entity for United States federal, state, and local income tax purposes. The provision for income tax is comprised of current tax and deferred tax. Current tax represents the tax on current year tax returns, using tax rates enacted at the balance sheet date. The deferred tax assets are recognized in full and then reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be recognized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the applicable taxing authority, including resolution of the appeals or litigation processes, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit for each such position that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Many factors are considered when evaluating and estimating the tax positions and tax benefits. Such estimates involve interpretations of regulations, rulings, case law, etc. and are inherently complex. The Company’s estimates may require periodic adjustments and may not accurately anticipate actual outcomes as resolution of income tax treatments in individual jurisdictions typically would not be known for several years after completion of any fiscal year. |
Comprehensive Income and Foreign Currency Translation | Comprehensive Income and Foreign Currency Translation Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). The Company’s OCI is comprised of foreign currency translation adjustments. Assets and liabilities of operations having non-U.S. dollar functional currencies are translated at period-end exchange rates, and revenues and expenses are translated at weighted average exchange rates for the period. Gains and losses resulting from translating foreign currency financial statements, net of related tax effects, are reflected in accumulated other comprehensive income, a separate component of stockholders’ equity. The Company's foreign subsidiaries generally use the U.S. dollar as their functional currency. The Company also has subsidiaries that utilize a functional currency other than the U.S. dollar, primarily comprising its subsidiaries domiciled in Ireland, which utilize the Euro as the functional currency. The Company may seek to reduce the impact of fluctuations in foreign exchange rates on its net investment in certain non-U.S. operations through the use of foreign currency forward contracts. For foreign currency forward contracts designated as hedges, the Company assesses its risk management objectives and strategy, including identification of the hedging instrument, the hedged item and the risk exposure and how effectiveness is to be assessed prospectively and retrospectively. The effectiveness of the hedge is assessed based on the overall changes in the fair value of the forward contracts. For qualifying net investment hedges, any gains or losses, to the extent effective, are included in Accumulated other comprehensive income on the consolidated statements of financial condition and Cumulative translation adjustment, net of tax, on the consolidated statements of comprehensive income. The ineffective portion, if any, is recorded in investment income and other, net on the consolidated statements of operations. |
Share-Based Compensation | Share-Based Compensation The fair value of awards issued for compensation prior to the Reorganization Transactions and the IPO was determined by management, with the assistance of an independent third party valuation firm, using a projected annual forfeiture rate, where applicable, on the date of grant. Share-based awards issued for compensation in connection with or subsequent to the Reorganization Transactions and the IPO pursuant to the Virtu Financial, Inc. 2015 Management Incentive Plan, adopted by the Company's Board of Directors and stockholders effective upon consummation of the IPO (as amended, the “Amended and Restated 2015 Management Incentive Plan”) were in the form of stock options, Class A common stock, par value $0.00001 (the "Class A Common Stock") and RSUs. The fair value of the stock option grants is determined through the application of the Black-Scholes-Merton model. The fair value of the Class A Common Stock and RSUs are determined based on the volume weighted average price for the three days preceding the grant, and with respect to the RSUs, a projected annual forfeiture rate. The fair value of share-based awards granted to employees is expensed based on the vesting conditions and are recognized on a straight line basis over the vesting period. The Company records as treasury stock shares repurchased from its employees for the purpose of settling tax liabilities incurred upon the issuance of Class A Common Stock, the vesting of RSUs or the exercise of stock options. |
Variable Interest Entities | Variable Interest Entities A variable interest entity (“VIE”) is an entity that lacks one or more of the following characteristics (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The Company will be considered to have a controlling financial interest and will consolidate a VIE if it has both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. In October 2016, the Company invested in a joint venture (“JV”) with nine other parties. One of the parties was KCG. Upon the KCG Merger, KCG was required to relinquish their ownership in the JV. As of December 31, 2018 , each of the remaining parties owns approximately 11% of the voting shares and 11% of the equity of this JV. In addition, as a result of the Acquisition of KCG, the Company owns 50% of the voting shares and 50% of the equity of another JV. These two JVs build and maintain microwave communication networks in the U.S., Europe, and Asia. The Company and its JV partners each pay monthly fees for the use of the microwave communication networks in connection with their respective trading activities, and the JVs may sell excess bandwidth that is not utilized by the JV members to third parties. The JVs meet the criteria to be considered VIEs. In each of the JVs, the Company does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; therefore it does not have a controlling financial interest in and does not consolidate the JVs. The Company records its interest in each JV under the equity method of accounting and records its investment in the JVs within Other assets and its amounts payable for communication services provided by the JV within Accrued expenses and other liabilities on the consolidated statements of financial condition. The Company records its pro-rata share of each JV's earnings or losses within Other, net and fees related to the use of communication services provided by the JVs within communications and data processing on the consolidated statements of comprehensive income. The Company’s exposure to the obligations of these VIEs is generally limited to its interests in each respective JV, which is the carrying value of the equity investment in each JV. |
Accounting Pronouncements, Recently Adopted and Accounting Pronouncements, Not Yet Adopted | Accounting Pronouncements, Recently Adopted Revenue Recognition - In May 2014, the FASB issued Accounting Standard Update (“ASU”) 2014-9, Revenue from Contracts with Customers . ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The Company adopted the new revenue standard on January 1, 2018 by applying the modified retrospective method, which did not result in a transition adjustment. The new standard does not apply to revenue associated with financial instruments that are accounted for under other U.S. GAAP, and as a result, did not have a material impact on the Company’s consolidated financial statements, which are most closely associated with financial instruments, including trading income, net, and interest and dividends income. The new revenue standard primarily impacts revenues from technology services, commissions and soft-dollar arrangements generated by execution services. The additional disclosures required by the new standard have been included in Note 13 "Revenues from Contracts with Customers" . Financial Assets and Liabilities — In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The ASU affects the accounting for equity investments, financial liabilities under fair value option and presentation and disclosure requirements of financial instruments. The ASU affects all entities that hold financial assets or owe financial liabilities and is effective for annual reporting periods (including interim periods) beginning after December 15, 2017. The Company does not currently classify any equity securities as available for sale, and it does not apply the fair value option to its own debt issuances. The Company has adopted this ASU as of January 1, 2018, and it did not have a material impact on its consolidated financial statements. Income Taxes – In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 749): Intra-Entity Transfers of Assets Other Than Inventory . The ASU requires the reporting entity to recognize the tax expense from the sale of an asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of the transactions are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The ASU is effective for reporting periods beginning after December 15, 2017. The Company adopted this ASU on January 1, 2018, and it did not have a material impact on its consolidated financial statements. Business Combinations - In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business , to amend the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU is effective for reporting periods beginning after December 15, 2017. The Company adopted this ASU on January 1, 2018, and it did not have a material impact on its consolidated financial statements. Accounting Pronouncements, Not Yet Adopted as of December 31, 2018 Leases — In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Under the new ASU, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. The liability will be equal to the present value of the future lease payments. The asset, referred to as a “right-of-use asset” will be based on the liability, subject to adjustment, such as for initial direct costs. For statement of comprehensive income purposes, leases will be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases , which modified certain aspects of ASC Topic 842, including allowing entities to adopt the new leasing standard as of January 1, 2019, without restating prior periods presented, and providing certain practical expedients including allowing lessors not to separate out lease and non-lease components when certain conditions are met. The Company adopted this ASU on January 1, 2019 using the modified retrospective method of implementation, and it is finalizing the impact on the financial statements. The Company elected to recognize the cumulative effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The Company does not plan to recognize lease assets and lease liabilities for leases with a determined lease term of twelve months or less and which are not expected to be renewed. Upon implementation, the Company estimated an impact of $334.0 million to $369.2 million in lease liabilities and $303.8 million to $335.7 million in right-of-use assets on its Statement of Financial Condition related to certain occupancy, equipment, communications and data processing, and other contractual arrangements under noncancelable operating lease agreements held under the Company's name, which currently are not reflected in its Statement of Financial Condition as of December 31, 2018. Goodwill - In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment . To simplify the subsequent measurement of goodwill, this ASU eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. This ASU is effective for public entities in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. Stock Compensation - In June 2018, the FASB issued ASU 2018-07, Compensation, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , with the objective of conforming the accounting for share-based awards to non-employees to the accounting for awards granted to employees. Previously, non-employee awards were measured at the vesting date, rather than the grant date, which effectively required the awards to be marked to market until the award vested. Under the new ASU, companies will be required to measure non-employee awards at the fair value of the instruments issued at the grant date. Entities will also be able to consider the probability of the recipient satisfying any performance conditions. The ASU is effective for periods beginning after December 15, 2018, including interim periods within that fiscal year. The Company does not currently make share-based awards to non-employees, and does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. Fair Value Measurement - In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement , which modified the disclosure requirements on fair value measurements in ASC Topic 820, Fair Value Measurement. Disclosure requirements were eliminated for the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. Disclosure requirements were modified for liquidation of investments in certain entities that calculate net asset value, and for measurement uncertainty disclosures. Disclosure requirements were added for changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The ASU is effective for periods beginning after December 15, 2019, including interim periods within that fiscal year. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. Consolidation - In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities , which modified how VIEs are assessed for consolidation purposes under ASC Topic 810, Consolidation. Under the update, indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The ASU is effective for periods beginning after December 15, 2019, including interim periods within that fiscal year. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. Measurement of Credit Losses on Financial Instruments - In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) -Measurement of Credit Losses on Financial Instruments. This ASU amends several aspects of the measurement of credit losses on financial instruments, including replacing the existing incurred credit loss model and other models with the Current Expected Credit Losses model ("CECL"). Under CECL, the allowance for losses for financial assets that are measured at amortized cost reflects management’s estimate of credit losses over the remaining expected life of the financial assets. Expected credit losses for newly recognized financial assets, as well as changes to expected credit losses during the period, would be recognized in earnings, and adoption of the ASU will generally result in earlier recognition of credit losses. Expected credit losses will be measured based on historical experience, current conditions and forecasts that affect the collectability of the reported amount, and credit losses are generally recognized earlier than under current GAAP. The ASU is effective for periods beginning after December 15, 2019, including interim periods within that fiscal year. The Company is currently in the process of identifying and developing the changes to the Company’s existing models and processes that will be required under CECL. As of December 31, 2018, the ASU is expected to impact only those financial instruments that are carried by the Company at amortized cost such as collateralized financing arrangements (repurchase agreements and securities borrowing/ lending transactions) and receivables from broker dealers and clearing organizations, and therefore the Company expects the ASU to have a limited impact on its financial condition, results of operations and cash flows. However, the ultimate impact of adoption of this ASU on the firm’s financial condition, results of operations and cash flows will depend on, among other things, the economic environment and the type of financial assets held by the firm on the date of adoption. |
Revenue Recognition | Revenue Recognition The Company adopted ASC Topic 606, Revenue from Contracts with Customers as of January 1, 2018 in the consolidated financial statements by applying the modified retrospective method. The Company’s revenue recognition methods for its contracts with customers prior to the adoption of Topic 606 are consistent with its methods after the adoption of Topic 606. Accordingly, the adoption of the new standard did not result in a transition adjustment to opening retained earnings, and as a result, revenues for contracts with customers would not have been adjusted in prior periods and are not presented herein on an adjusted basis. The new revenue guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other U.S. GAAP, and as a result, did not have an impact on the elements of the Company’s consolidated statement of comprehensive income most closely associated with financial instruments, including trading income, net and interest and dividend income. The new standard primarily impacts the presentation of the following revenue streams: • Commissions, net. The Company earns commission revenue by acting as an agent on behalf of customers. The Company’s performance obligations consist of trade execution and clearing services and are satisfied on the trade date; accordingly, commission revenues are recorded on the trade date. Commission revenues are paid on settlement date; therefore, a receivable is recognized as of the trade date. Under a commission management program, the Company allows institutional clients to allocate a portion of their gross commissions to pay for research and other services provided by third parties. As the Company acts as an agent in these transactions, it records such expenses on a net basis within Commissions and technology services in the consolidated statements of comprehensive income. • Technology services. The Company’s technology services revenues consist of technology licensing fees and agency commission fees. Technology licensing fees are earned from third parties for licensing of the Company’s proprietary risk management and trading infrastructure technology and the provision of associated management and hosting services. These fees include both upfront and annual recurring fees as well as, in certain cases, contingent fees based on customer revenues, which represent variable consideration. The services offered under these contracts are delivered as an integrated package and are interdependent and have the same pattern of transfer to the customer; accordingly, the Company measures and recognizes them as a single performance obligation. The performance obligation is satisfied over time, and, therefore, revenue is recognized as time passes. Variable consideration has not been included in the transaction price as the amount of consideration is contingent on factors outside the Company’s control and thus it is not probable that a significant reversal of cumulative revenue recognized will not occur. Recurring fees, which exclude variable consideration, are billed and collected on a quarterly basis and are included within Receivables from broker dealers and clearing organizations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of nonconsolidated VIE | The following table presents the Company’s nonconsolidated VIEs at December 31, 2018 : Carrying Amount Maximum Exposure to Loss VIEs' assets (in thousands) Asset Liability Equity investment $ 18,254 $ — $ 18,254 $ 49,450 The following table presents the Company’s nonconsolidated VIEs at December 31, 2017 : Carrying Amount Maximum Exposure to Loss VIEs' assets (in thousands) Asset Liability Equity investment $ 18,799 $ — $ 18,799 $ 41,936 |
Acquisition of KCG (Tables)
Acquisition of KCG (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of preliminary allocation of intangible assets, amortization period and goodwill | Amounts allocated to intangible assets, the amortization period and goodwill were as follows: (in thousands) Amount Amortization Years Technology $ 67,700 1-6 years Customer relationships 94,000 13 - 17 years Trade names 1,000 10 years Favorable leases 5,895 2-15 years Exchange memberships 6,400 Indefinite Intangible assets $ 174,995 Goodwill 128,286 Total $ 303,281 |
Sale of BondPoint (Tables)
Sale of BondPoint (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of assets and liabilities of businesses held for sale | A summary of the carrying value of BondPoint and gain on sale of BondPoint is as follows: (in thousands) Total sale proceeds received $ 400,192 Business assets and liabilities held for sale as of December 31, 2017: Receivables from broker dealers and clearing organizations 3,383 Intangibles and other assets 51,687 Liabilities (728 ) Total carrying value of BondPoint as of December 31, 2017: 54,342 Goodwill adjustment allocated to BondPoint 8,300 Gain on sale of BondPoint 337,550 Transaction costs 8,568 Gain on sale of BondPoint, net of transaction costs $ 328,982 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of net income before noncontrolling interest to net income available for common stockholders | The below table contains a reconciliation of net income before noncontrolling interest to net income available for common stockholders: Years Ended December 31, (in thousands) 2018 2017 2016 Income (loss) before income taxes and noncontrolling interest $ 696,363 $ 113,164 179,591 Provision for (benefit from) income taxes 76,171 94,266 21,251 Net income 620,192 18,898 158,340 Noncontrolling interest (330,751 ) (15,959 ) (125,360 ) Net income (loss) available for common stockholders $ 289,441 $ 2,939 $ 32,980 |
Schedule of basic earnings per share | The calculation of basic and diluted earnings per share is presented below: Years Ended December 31, (in thousands, except for share or per share data) 2018 2017 2016 Basic earnings per share: Net income (loss) available for common stockholders $ 289,441 $ 2,939 $ 32,980 Less: Dividends and undistributed earnings allocated to participating securities (5,418 ) (1,326 ) (809 ) Net income (loss) available for common stockholders, net of dividends and undistributed earnings allocated to participating securities 284,023 1,613 32,171 Weighted average shares of common stock outstanding: Class A 100,875,793 62,579,147 38,539,091 Basic earnings per share $ 2.82 $ 0.03 0.83 |
Schedule of diluted earnings per share | Years Ended December 31, (in thousands, except for share or per share data) 2018 2017 2016 Diluted earnings per share: Net income (loss) available for common stockholders, net of dividends and undistributed earnings allocated to participating securities $ 284,023 $ 1,613 $ 32,171 Weighted average shares of common stock outstanding: Class A Issued and outstanding 100,875,793 62,579,147 38,539,091 Issuable pursuant to Amended and Restated 2015 Management Incentive Plan (1) 1,213,346 — — 102,089,139 62,579,147 38,539,091 Diluted earnings per share $ 2.78 $ 0.03 $ 0.83 (1) The dilutive impact of unexercised stock options excludes from the computation of EPS 1,740,630 and 743,096 options for the years ended December 31, 2017 and 2016 , respectively, because inclusion of the options would have been anti-dilutive. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill by segment | The following table presents the details of goodwill by segment: (in thousands) Market Making Execution Services Corporate Total Balance as of December 31, 2017 $ 755,292 $ 89,591 $ — $ 844,883 Goodwill adjustment allocated to BondPoint — (8,300 ) — (8,300 ) Balance as of December 31, 2018 $ 755,292 $ 81,291 $ — $ 836,583 |
Schedule of acquired intangible assets | Acquired intangible assets consisted of the following as of December 31, 2018 and 2017 : As of December 31, 2018 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Useful Lives (Years) Purchased technology $ 110,000 $ 110,000 $ — 1.4 to 2.5 ETF issuer relationships 950 665 285 9 ETF buyer relationships 950 665 285 9 Technology 60,000 30,185 29,815 1 to 6 Customer relationships 49,000 5,905 43,095 12 Favorable occupancy leases 5,895 1,224 4,671 3 to 15 Exchange memberships 5,838 — 5,838 Indefinite $ 232,633 $ 148,644 $ 83,989 As of December 31, 2017 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Useful Lives Purchased technology $ 110,000 $ 110,000 $ — 1.4 to 2.5 ETF issuer relationships 950 559 391 9 ETF buyer relationships 950 559 390 9 Leases 1,800 397 1,403 3 FCC licenses 200 19 181 7 Technology 60,000 9,644 50,356 1 to 6 Customer relationships 49,000 1,822 47,178 12 to 17 Favorable occupancy leases 5,895 408 5,487 7 Exchange memberships 5,838 — 5,838 Indefinite $ 234,633 $ 123,408 $ 111,224 |
Receivables from_Payables to _2
Receivables from/Payables to Broker-Dealers and Clearing Organizations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Due to and from Broker-Dealers and Clearing Organizations [Abstract] | |
Summary of receivables from and payables to brokers-dealers and clearing organizations | The following is a summary of receivables from and payables to brokers-dealers and clearing organizations at December 31, 2018 and December 31, 2017 : (in thousands) December 31, 2018 December 31, 2017 Assets Due from prime brokers $ 302,152 $ 219,573 Deposits with clearing organizations 84,509 112,847 Net equity with futures commission merchants 294,884 203,711 Unsettled trades with clearing organization 193,544 173,778 Securities failed to deliver 218,663 248,088 Commissions and fees 7,697 14,021 Total receivables from broker-dealers and clearing organizations $ 1,101,449 $ 972,018 Liabilities Due to prime brokers $ 354,300 $ 197,439 Net equity with futures commission merchants 47,998 44,526 Unsettled trades with clearing organization 90,021 420,029 Securities failed to receive 73,547 51,143 Commissions and fees 1,575 3,068 Total payables to broker-dealers and clearing organizations $ 567,441 $ 716,205 |
Collateralized Transactions (Ta
Collateralized Transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Collateralized Agreements [Abstract] | |
Summary of the fair value of collateralized transactions | The fair value of the collateralized transactions at December 31, 2018 and December 31, 2017 are summarized as follows: (in thousands) December 31, 2018 December 31, 2017 Securities received as collateral: Securities borrowed $ 1,361,635 $ 1,415,793 Securities purchased under agreements to resell 15,475 — $ 1,377,110 $ 1,415,793 |
Schedule of financial instruments owned and pledged, where counterparty has right to repledge | Financial instruments owned and pledged, where the counterparty has the right to repledge, at December 31, 2018 and December 31, 2017 consisted of the following: (in thousands) December 31, 2018 December 31, 2017 Equities $ 748,846 $ 586,251 U.S. and Non-U.S. government obligations — 99 Exchange traded notes 42,269 8,693 $ 791,115 $ 595,043 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instrument [Line Items] | |
Outstanding borrowings and financing capacity or unused available capacity under the Company’s borrowing arrangements | The following summarizes the Company’s broker-dealer credit facilities' carrying values, net of unamortized debt issuance costs, where applicable: At December 31, 2018 (in thousands) Interest Rate Financing Available Borrowing Outstanding Deferred Debt Issuance Cost Outstanding Borrowings, net Broker-dealer credit facilities: Uncommitted facility 3.40% $ 200,000 $ 10,000 $ (832 ) $ 9,168 Revolving credit facility 3.75% 500,000 7,000 (1,040 ) 5,960 $ 700,000 $ 17,000 $ (1,872 ) $ 15,128 At December 31, 2017 (in thousands) Interest Rate Financing Available Borrowing Outstanding Deferred Debt Issuance Cost Outstanding Borrowings, net Broker-dealer credit facilities: Uncommitted facility 2.42% $ 150,000 $ 25,000 $ — $ 25,000 Revolving credit facility 2.81% 500,000 7,000 (4,117 ) 2,883 $ 650,000 $ 32,000 $ (4,117 ) $ 27,883 |
Schedule of interest expense on debt | The following summarizes interest expense for the broker-dealer facilities. Interest expense is included within interest and dividends expense in the accompanying consolidated statements of comprehensive income. Years Ended December 31, (in thousands) 2018 2017 2016 Broker-dealer credit facilities: Uncommitted facility $ 1,794 $ 1,667 $ 1,191 Committed facility (1) — 33 41 Revolving credit facility 306 19 — $ 2,100 $ 1,719 $ 1,232 (1) Facility was terminated in July 2017. |
Schedule of aggregate future required principal payments based on terms of loan | Aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows: (in thousands) December 31, 2018 2019 $ — 2020 31,908 2021 400,000 2022 and thereafter 500,000 Total principal of long-term borrowings $ 931,908 |
Short-Term Credit Facilities | |
Debt Instrument [Line Items] | |
Schedule of reconciliation of the senior secured credit facility | At December 31, 2018 Weighted Average Financing Borrowing Short-Term Credit Facilities: Short-term credit facilities (2) 5.03% $ 566,000 $ 184,608 $ 566,000 $ 184,608 At December 31, 2017 Weighted Average Interest Rate Financing Available Borrowing Outstanding Short-Term Credit Facilities: Short-term credit facilities (2) 3.86% $ 543,000 $ 205,677 $ 543,000 $ 205,677 (2) Outstanding borrowings are included with Receivables from/ Payables to broker-dealers and clearing organizations within the consolidated statements of financial condition. |
Senior Secured Credit Facility | |
Debt Instrument [Line Items] | |
Schedule of reconciliation of the senior secured credit facility | The following summarizes the Company’s long-term borrowings, net of unamortized discount and debt issuance costs, where applicable: At December 31, 2018 (in thousands) Maturity Interest Outstanding Principal Discount Deferred Debt Issuance Cost Outstanding Borrowings, net Long-term borrowings: Fourth Amended and Restated Credit Agreement December 2021 5.55% $ 400,000 $ (332 ) $ (6,704 ) $ 392,964 Senior Secured Second Lien Notes June 2022 6.75% 500,000 — (17,811 ) 482,189 SBI bonds January 2020 5.00% 31,908 — (24 ) 31,884 $ 931,908 $ (332 ) $ (24,539 ) $ 907,037 At December 31, 2017 (in thousands) Maturity Date Interest Rate Outstanding Principal Discount Deferred Debt Issuance Cost Outstanding Borrowings, net Long-term borrowings: Fourth Amended and Restated Credit Agreement December 2021 5.13% $ 900,000 $ (999 ) $ (18,504 ) $ 880,497 Senior secured Second Lien Notes June 2022 6.75% 500,000 — (22,961 ) 477,039 SBI bonds January 2020 5.00% 31,059 — (47 ) 31,012 $ 1,431,059 $ (999 ) $ (41,512 ) $ 1,388,548 |
Financial Assets and Liabilit_2
Financial Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of fair value measurements measured on a recurring basis | Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2018 : December 31, 2018 (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Counterparty and Cash Collateral Netting Total Fair Value Assets Financial instruments owned, at fair value: Equity securities $ 587,680 $ 1,022,221 $ — $ — $ 1,609,901 U.S. and Non-U.S. government obligations 91,466 14,547 — — 106,013 Corporate Bonds — 87,500 — — 87,500 Exchange traded notes 3,396 27,966 — — 31,362 Currency forwards — 2,792,373 — (2,790,242 ) 2,131 Options 11,899 — — — 11,899 694,441 3,944,607 — (2,790,242 ) 1,848,806 Financial instruments owned, pledged as collateral: Equity securities $ 389,810 $ 359,036 $ — $ — $ 748,846 Exchange traded notes 6,968 35,301 — — 42,269 396,778 394,337 — — 791,115 Other Assets Equity investment $ — $ — $ 45,856 $ — $ 45,856 Exchange stock 2,417 — — — 2,417 2,417 — 45,856 — 48,273 Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ 931,992 $ 1,336,338 $ — $ — $ 2,268,330 U.S. and Non-U.S. government obligations 112,058 3,054 — — 115,112 Corporate Bonds — 40,123 — — 40,123 Exchange traded notes 371 39,613 — — 39,984 Currency forwards — 2,720,749 — (2,719,954 ) 795 Options 11,051 — — — 11,051 $ 1,055,472 $ 4,139,877 $ — $ (2,719,954 ) $ 2,475,395 Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2017 : December 31, 2017 (in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Counterparty and Cash Collateral Netting Total Fair Value Assets Financial instruments owned, at fair value: Equity securities $ 758,596 $ 1,167,995 $ — $ — $ 1,926,591 Non-U.S. government obligations 5,968 16,815 — — 22,783 Corporate Bonds — 60,975 — — 60,975 Exchange traded notes 13,576 68,819 — — 82,395 Currency forwards — 2,045,487 — (2,027,697 ) 17,790 Options 7,045 — — — 7,045 $ 785,185 $ 3,360,091 $ — $ (2,027,697 ) $ 2,117,579 Financial instruments owned, pledged as collateral: Equity securities $ 410,670 $ 175,581 $ — $ — $ 586,251 U.S. and Non-U.S. government obligations 99 — — — 99 Exchange traded notes 82 8,611 — — 8,693 $ 410,851 $ 184,192 $ — $ — $ 595,043 Other Assets Equity investment $ — $ — $ 40,588 $ — $ 40,588 Exchange stock 1,952 — — — 1,952 Other (1) — 55,824 — — 55,824 $ 1,952 $ 55,824 $ 40,588 $ — $ 98,364 Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ 847,816 $ 1,355,616 $ — $ — $ 2,203,432 U.S. and Non-U.S. government obligations 18,940 12,481 — — 31,421 Corporate Bonds — 81,118 — — 81,118 Exchange traded notes 1,514 54,248 — — 55,762 Currency forwards — 2,032,017 — (2,024,991 ) 7,026 Options 5,839 — — — 5,839 $ 874,109 $ 3,535,480 $ — $ (2,024,991 ) $ 2,384,598 (1) Other primarily consists of a $55.8 million receivable from BATS related to the sale of KCG Hotspot (see Receivable from Bats Global Markets, Inc. ("BATS") below). The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of December 31, 2018 : December 31, 2018 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Carrying Value Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents $ 736,047 $ 736,047 $ 736,047 $ — $ — Securities borrowed 1,399,684 1,399,684 — 1,399,684 — Securities purchased under agreements to resell 15,475 15,475 — 15,475 — Receivables from broker dealers and clearing organizations 1,101,449 1,101,449 71,288 1,030,161 — Total Assets $ 3,252,655 $ 3,252,655 $ 807,335 $ 2,445,320 $ — Liabilities Short-term borrowings $ 15,128 $ 15,128 $ — $ 15,128 $ — Long-term borrowings 907,037 916,465 — 916,465 — Securities loaned 1,130,039 1,130,039 — 1,130,039 — Securities sold under agreements to repurchase 281,861 281,861 — 281,861 — Payables to broker dealer and clearing organizations 567,441 567,441 1,031 566,410 — Total Liabilities $ 2,901,506 $ 2,910,934 $ 1,031 $ 2,909,903 $ — The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of December 31, 2017 : December 31, 2017 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (in thousands) Carrying Value Fair Value (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents $ 532,887 $ 532,887 $ 532,887 $ — $ — Securities borrowed 1,471,172 1,471,172 — 1,471,172 — Receivables from broker dealers and clearing organizations 972,018 972,018 36,513 935,505 — Total Assets $ 2,976,077 $ 2,976,077 $ 569,400 $ 2,406,677 $ — Liabilities Short-term borrowings $ 27,883 $ 27,883 $ — $ 27,883 $ — Long-term borrowings 1,388,548 1,465,489 — 1,465,489 — Securities loaned 754,687 754,687 — 754,687 — Securities sold under agreements to repurchase 390,642 390,642 — 390,642 — Payables to broker dealer and clearing organizations 716,205 716,205 2,925 713,280 — Total Liabilities $ 3,277,965 $ 3,354,906 $ 2,925 $ 3,351,981 $ — |
Summary of changes in Level 3 financial instruments measured at fair value on a recurring basis | The following presents the changes in Level 3 financial instruments measured at fair value on a recurring basis: Year Ended December 31, 2018 (in thousands) Balance at December 31, 2017 Purchases Total Realized and Unrealized Gains / (Losses) Net Transfers into (out of) Level 3 Settlement Balance at December 31, 2018 Change in Net Unrealized Gains / (Losses) on Investments still held at December 31, 2018 Assets Other assets: Equity investment $ 40,588 $ — $ 5,268 $ — $ — $ 45,856 $ 5,268 Total $ 40,588 $ — $ 5,268 $ — $ — $ 45,856 $ 5,268 Year Ended December 31, 2017 (in thousands) Balance at December 31, 2016 Purchases Total Realized and Unrealized Gains / (Losses) Net Transfers into (out of) Level 3 Settlement Balance at December 31, 2017 Change in Net Unrealized Gains / (Losses) on Investments still held at December 31, 2017 Assets Other assets: Equity investment $ 36,031 $ — $ 4,557 $ — $ — $ 40,588 $ 4,557 Other — 3,000 — — (3,000 ) — — Total $ 36,031 $ 3,000 $ 4,557 $ — $ (3,000 ) $ 40,588 $ 4,557 |
Summary of netting of certain financial assets and financial liabilities | The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of December 31, 2018 and December 31, 2017 : December 31, 2018 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition Gross Amounts Not Offset In the Consolidated Statement of Financial Condition (in thousands) Financial Instruments Cash Collateral Received Net Amount Offsetting of Financial Assets: Securities borrowed $ 1,399,684 $ — $ 1,399,684 $ (1,361,635 ) $ (8,822 ) $ 29,227 Securities purchased under agreements to resell 15,475 — 15,475 (15,475 ) — — Trading assets, at fair value: Currency forwards 2,792,373 (2,790,242 ) 2,131 — — 2,131 Options 11,899 — 11,899 (11,899 ) — — Total $ 4,219,431 $ (2,790,242 ) $ 1,429,189 $ (1,389,009 ) $ (8,822 ) $ 31,358 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition Gross Amounts Not Offset In the Consolidated Statement of Financial Condition (in thousands) Financial Instruments Cash Collateral Pledged Net Amount Offsetting of Financial Liabilities: Securities loaned $ 1,130,039 $ — $ 1,130,039 $ (1,108,461 ) $ (8,822 ) $ 12,756 Securities sold under agreements to repurchase 281,861 — $ 281,861 (281,861 ) — — Trading liabilities, at fair value: Currency forwards 2,720,749 (2,719,954 ) 795 — (792 ) 3 Options 11,051 — 11,051 (11,051 ) — — Total $ 4,143,700 $ (2,719,954 ) $ 1,423,746 $ (1,401,373 ) $ (9,614 ) $ 12,759 December 31, 2017 Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition Gross Amounts Not Offset In the Statement of Financial Condition (in thousands) Financial Instruments Cash Collateral Received Net Amount Offsetting of Financial Assets: Securities borrowed $ 1,471,172 $ — $ 1,471,172 $ (1,418,672 ) $ (13,318 ) $ 39,182 Trading assets, at fair value: Currency forwards 2,045,487 (2,027,697 ) 17,790 — — 17,790 Options 7,045 — 7,045 (45 ) — 7,000 Total $ 3,523,704 $ (2,027,697 ) $ 1,496,007 $ (1,418,717 ) $ (13,318 ) $ 63,972 Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Statement of Financial Condition Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition Gross Amounts Not Offset In the Statement of Financial Condition (in thousands) Financial Instruments Cash Collateral Pledged Net Amount Offsetting of Financial Liabilities: Securities loaned $ 754,687 $ — $ 754,687 $ (737,731 ) $ (10,776 ) $ 6,180 Securities sold under agreements to repurchase 390,642 — 390,642 (390,642 ) — — Trading liabilities, at fair value: Currency forwards 2,032,017 (2,024,991 ) 7,026 — — 7,026 Options 5,839 — 5,839 (56 ) — 5,783 Total $ 3,183,185 $ (2,024,991 ) $ 1,158,194 $ (1,128,429 ) $ (10,776 ) $ 18,989 |
Summary of gross obligations for repurchase agreement and securities borrowed transactions by remaining contractual maturity and class of collateral pledged | The following table presents gross obligations for securities sold under agreements to repurchase and for securities lending transactions by remaining contractual maturity and the class of collateral pledged: December 31, 2018 Remaining Contractual Maturity (in thousands) Overnight and Continuous Less than 30 days 30 - 60 days 61 - 90 Days Total Securities sold under agreements to repurchase: Equity securities $ — $ 45,000 $ 65,000 $ 160,000 $ 270,000 U.S. and Non-U.S. government obligations 11,861 — — — 11,861 Total 11,861 45,000 65,000 160,000 281,861 Securities loaned: Equity securities 1,130,039 — — — 1,130,039 Total $ 1,130,039 $ — $ — $ — $ 1,130,039 December 31, 2017 Remaining Contractual Maturity (in thousands) Overnight and Continuous Less than 30 days 30 - 60 days 61 - 90 Days Total Securities sold under agreements to repurchase: Equity securities $ — $ 100,000 $ 90,000 $ 200,000 $ 390,000 U.S. and Non-U.S. government obligations 642 — — — 642 Total 642 100,000 90,000 200,000 390,642 Securities loaned: Equity securities 754,687 — — — 754,687 Total $ 754,687 $ — $ — $ — $ 754,687 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of derivative instruments on a gross basis | The fair value of the Company’s derivative instruments on a gross basis consisted of the following at December 31, 2018 and December 31, 2017 : (in thousands) December 31, 2018 December 31, 2017 Derivatives Assets Financial Statements Location Fair Value Notional Fair Value Notional Derivative instruments not designated as hedging instruments: Equities futures Receivables from broker dealers and clearing organizations $ (15,382 ) $ 2,891,606 $ (505 ) $ 1,985,770 Commodity futures Receivables from broker dealers and clearing organizations 69,235 11,595,215 971 21,231,001 Currency futures Receivables from broker dealers and clearing organizations (9,432 ) 3,756,914 26,548 3,994,412 Fixed income futures Receivables from broker dealers and clearing organizations (28 ) 18,694 73 44,395 Options Financial instruments owned 11,899 659,101 7,045 682,369 Currency forwards Financial instruments owned 2,792,373 171,288,432 2,045,487 124,000,221 Derivatives Liabilities Financial Statements Location Fair Value Notional Fair Value Notional Derivative instruments not designated as hedging instruments: Equities futures Payables to broker dealers and clearing organizations $ 468 $ 106,487 $ (575 ) $ 142,658 Commodity futures Payables to broker dealers and clearing organizations (375 ) 54,782 (1,602 ) 130,042 Currency futures Payables to broker dealers and clearing organizations (30,643 ) 6,239,725 (13,947 ) 7,756,958 Fixed income futures Payables to broker dealers and clearing organizations 93 8,591 (1 ) 2,584 Options Financial instruments sold, not yet purchased 11,051 608,756 5,839 681,147 Currency forwards Financial instruments sold, not yet purchased 2,720,749 171,252,224 2,032,017 123,993,234 Derivative instruments designated as hedging instruments: Currency forwards Financial instruments sold, not yet purchased (792 ) 13,501 (514 ) 16,115 |
Schedule of net gain from derivative instruments not designated as hedging instruments | The following table summarizes the net gain from derivative instruments not designated as hedging instruments under ASC 815, which are recorded in trading income, net, and from those designated as hedging instrument under ASC 815, which are recorded in accumulated other comprehensive income in the accompanying consolidated statements of comprehensive income for the years ended December 31, 2018 , 2017 , and 2016 . Years Ended December 31, (in thousands) Financial Statements Location 2018 2017 2016 Derivative instruments not designated as hedging instruments: Futures Trading income, net $ (309,598 ) $ 290,609 $ 559,626 Currency forwards Trading income, net 174,310 2,603 1,915 Options Trading income, net (6,161 ) (7,166 ) (410 ) Others Trading income, net — — (6 ) $ (141,449 ) $ 286,046 $ 561,125 Derivative instruments designated as hedging instruments: Foreign exchange - forward contract Accumulated other comprehensive income $ 63 $ (642 ) — |
Revenues from Contracts with _2
Revenues from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following table presents the Company’s revenue from contracts with customers disaggregated by the services described above, by timing of revenue recognition, reconciled to the Company’s segments, for the year ended December 31, 2018 : Year Ended December 31, 2018 (in thousands) Market Making Execution Services Corporate Total Revenues from Contracts with Customers: Commissions, net $ 28,813 $ 150,206 $ — $ 179,019 Technology services — 5,320 — 5,320 Total revenue from contracts with customers 28,813 155,526 — 184,339 Other sources of revenue 1,355,662 340,807 (2,090 ) 1,694,379 Total revenues 1,384,475 496,333 (2,090 ) 1,878,718 Timing of revenue recognition: Services transferred at a point in time 1,384,475 491,013 (2,090 ) 1,873,398 Services transferred over time — 5,320 — 5,320 Total revenues $ 1,384,475 $ 496,333 $ (2,090 ) $ 1,878,718 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of income before income taxes | Income before income taxes and noncontrolling interest is as follows for the years ended December 31, 2018 , 2017 , and 2016 : For the Year Ended December 31, 2018 2017 2016 (in thousands) U.S. operations $ 659,937 $ 70,484 $ 138,950 Non-U.S. operations 36,426 42,680 40,641 $ 696,363 $ 113,164 $ 179,591 |
Summary of provision for income taxes | The provision for income taxes consists of the following for the years ended December 31, 2018 , 2017 , and 2016 : For the Year Ended December 31, (in thousands) 2018 2017 2016 Current provision (benefit) Federal $ 49,047 $ (9,991 ) $ 2,690 State and Local 18,697 65 38 Foreign 4,276 1,219 5,210 Deferred provision (benefit) Federal 4,986 106,415 13,547 State and Local (1,599 ) (3,380 ) 194 Foreign 764 (62 ) (428 ) Provision for income taxes $ 76,171 $ 94,266 $ 21,251 |
Schedule of reconciliation of the tax provision at U.S. Federal Statutory Rate to the provision for income taxes | The reconciliation of the tax provision at the U.S. Federal Statutory Rate to the provision for income taxes for the years ended December 31, 2018 , 2017 , and 2016 : For the Year Ended December 31, 2018 2017 2016 (in thousands, except percentages) Tax provision at the U.S. federal statutory rate 21.0 % 35.0 % 35.0 % Less: rate attributable to noncontrolling interest (10.2 ) (19.1 ) (24.4 ) State and local taxes, net of federal benefit 1.9 (1.9 ) 1.3 Impact of 2017 Tax Act on deferred tax assets — 80.1 — Impact of 2017 Tax Act on tax receivable agreement obligation — (12.9 ) — Non-deductible expenses, net (0.3 ) 1.9 — Other, net (1.5 ) 0.2 — Effective tax rate 10.9 % 83.3 % 11.9 % |
Schedule of components of deferred tax assets and liabilities | The components of the deferred tax assets and liabilities as of December 31, 2018 , and 2017 are as follows December 31, (in thousands) 2018 2017 Deferred income tax assets Tax Receivable Agreement $ 167,117 $ 101,594 Share-based compensation 9,419 5,213 Intangibles 12,738 14,547 Fixed assets and other 21,088 13,425 Tax credits and net operating loss carryforwards 44,972 50,867 Less: Valuation allowance on net operating loss carryforwards and tax credits (44,947 ) (43,544 ) Total deferred income tax assets $ 210,387 $ 142,102 Deferred income tax liabilities Intangibles 10,028 16,342 Total deferred income tax liabilities $ 10,028 $ 16,342 |
Summary of reconciliation of the beginning and ending amount of unrecognized tax benefits | The Company had $7.3 million of unrecognized tax benefits as of December 31, 2018 , all of which would affect the Company’s effective tax rate if recognized. The Company has determined that there are no uncertain tax positions that would have a material impact on the Company’s financial position as of December 31, 2018 . December 31, (in thousands) 2018 Balance at December 31, 2017 $ 7,300 Increase from Acquisition of KCG — Decreases based on tax positions related to prior period (840 ) Increase based on tax positions related to current period 868 Balance at December 31, 2018 $ 7,333 |
Commitments, Contingencies an_2
Commitments, Contingencies and Guarantees (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum rental commitments under non-cancellable leases | At December 31, 2018 , minimum rental commitments under non-cancellable leases are approximately as follows: Minimum Rental Commitments Year Ending December 31 Capital Operating Subleases Net Rental Commitments 2019 $ 21,983 $ 32,755 (8,979 ) 45,759 2020 11,283 30,473 (9,324 ) 32,432 2021 1,651 25,564 (8,844 ) 18,371 2022 — 22,710 (8,552 ) 14,158 2023 — 21,456 (8,695 ) 12,761 Thereafter — 113,779 (36,312 ) 77,467 Total minimum lease payments $ 34,917 $ 246,737 $ (80,706 ) $ 200,948 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock options activity | The following table summarizes activity related to stock options for the year ended December 31, 2018 and 2017 : Options Outstanding Options Exercisable Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Number of Options Weighted Average Exercise Price Per Share At December 31, 2016 8,234,000 $ 19.00 8.29 2,058,500 $ 19.00 Granted — — — — — Exercised — — — — — Forfeited or expired (496,000 ) — — — — At December 31, 2017 7,738,000 $ 19.00 7.29 3,869,000 $ 19.00 Granted — — — — — Exercised (4,168,100 ) 19.00 — — — Forfeited or expired (83,750 ) — — — — At December 31, 2018 3,486,150 $ 19.00 6.30 1,660,400 $ 19.00 |
Schedule of activity related to restricted stock units | The following table summarizes activity related to the RSUs: Number of Shares Weighted Average Fair Value At December 31, 2016 1,573,441 18.28 Granted 64,402 18.09 Forfeited (258,250 ) 18.4 Vested (526,546 ) 18.75 At December 31, 2017 853,047 17.94 Granted 1,265,899 20.89 Forfeited (127,493 ) 18.30 Vested (612,531 ) 18.76 At December 31, 2018 1,378,922 $ 20.03 |
Property, Equipment and Capit_2
Property, Equipment and Capitalized Software (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, equipment and capitalized software | Property, equipment and capitalized software consisted of the following at December 31, 2018 and 2017 : (in thousands) 2018 2017 Capitalized software costs $ 108,220 $ 94,915 Leasehold improvements 67,995 93,624 Furniture and equipment 260,825 324,135 Total 437,040 512,674 Less: Accumulated depreciation and amortization (323,718 ) (375,656 ) Total property, equipment and capitalized software, net $ 113,322 $ 137,018 |
Regulatory Requirement (Tables)
Regulatory Requirement (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Regulatory Capital Requirements [Abstract] | |
Schedule of regulatory capital and regulatory capital requirements | The regulatory capital and regulatory capital requirements of these subsidiaries as of December 31, 2018 were as follows: (in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital Virtu Americas LLC $ 381,211 $ 2,035 $ 379,176 Virtu Financial BD LLC 133,850 1,000 132,850 Virtu Financial Capital Markets LLC 9,457 1,000 8,457 The regulatory capital and regulatory capital requirements of these subsidiaries as of December 31, 2017 were as follows: (in thousands) Regulatory Capital Regulatory Capital Requirement Excess Regulatory Capital Virtu Americas LLC $ 379,875 $ 1,000 $ 378,875 Virtu Financial BD LLC 40,683 1,000 39,683 Virtu Financial Capital Markets LLC 8,308 5,114 3,194 |
Geographic Information and Bu_2
Geographic Information and Business Segments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of total revenues by geographic area | The following table presents total revenues by geographic area for the years ended December 31, 2018 , 2017 , and 2016 : Years Ended December 31, (in thousands) 2018 2017 2016 Revenues: United States $ 1,644,641 $ 791,044 $ 455,418 Ireland 81,531 97,637 139,642 United Kingdom 15,681 21,143 — Singapore 136,161 113,891 106,813 Others 704 4,267 399 Total revenues $ 1,878,718 $ 1,027,982 $ 702,272 |
Schedule of revenues, income (loss) before income taxes (“Pre-tax earnings”) and total assets by segment | The Company’s total revenues and income before income taxes and noncontrolling interest (“Pre-tax earnings”) by segment for the years ended December 31, 2018 , 2017 , and 2016 are summarized in the following table: (in thousands) Market Making Execution Services Corporate (1) Consolidated Total 2018 Total revenue $ 1,384,475 $ 496,333 $ (2,090 ) $ 1,878,718 Income before income taxes and noncontrolling interest 422,648 325,043 (51,328 ) 696,363 2017 Total revenue 836,707 99,135 92,140 1,027,982 Income (loss) before income taxes and noncontrolling interest 74,633 (12,519 ) 51,050 113,164 2016 Total revenue 691,884 10,352 36 702,272 Income (loss) before income taxes and noncontrolling interest 176,145 4,403 (957 ) 179,591 (1) Amounts shown in the Corporate segment include eliminations of income statement and balance sheet items included in the Company's other segments. |
Parent Company (Tables)
Parent Company (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Statements of Financial Condition | Virtu Financial, Inc. (Parent Company Only) Condensed Statements of Financial Condition As of December 31, (In thousands except interest data) 2018 2017 Assets Cash $ 3,841 $ 60,193 Deferred tax asset 189,627 124,631 Investment in subsidiary 1,730,867 1,549,162 Other assets 35,998 10,731 Total assets $ 1,960,333 $ 1,744,717 Liabilities, redeemable membership interest and equity Liabilities Payable to affiliate $ 694,028 $ 767,101 Accounts payable and accrued expenses and other liabilities 6 7 Tax receivable agreement obligations 214,403 147,040 Total liabilities $ 908,437 $ 914,148 Virtu Financial Inc. Stockholders' equity Class A-1 — Authorized and Issued — 0 and 0 interests, Outstanding — 0 and 0 interests, at December 31, 2017 and 2016, respectively — — Class A-2 — Authorized and Issued — 0 and 0 interests, Outstanding — 0 and 0 interests, at December 31, 2017 and 2016, respectively — — Class A common stock (par value $0.00001), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 90,415,532 and 40,436,580 shares, Outstanding — 89,798,609 and 39,983,514 shares at December 31, 2017 and 2016, respectively 1 1 Class B common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 0 and 0 shares at December 31, 2017 and 2016, respectively — — Class C common stock (par value $0.00001), Authorized — 90,000,000 and 90,000,000 shares, Issued — 17,880,239 and 19,810,707 shares, Outstanding — 17,880,239 and 19,810,707, at December 31, 2017 and 2016, respectively — — Class D common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 79,610,490 and 79,610,490 shares at December 31, 2017 and 2016, respectively 1 1 Treasury stock, at cost, 616,923 and 453,066 shares at December 31, 2017 and 2016, respectively (55,005 ) (11,041 ) Additional paid-in capital 1,010,468 900,746 Accumulated deficit 96,513 (62,129 ) Accumulated other comprehensive income (loss) (82 ) 2,991 Total Virtu Financial Inc. stockholders' equity $ 1,051,896 $ 830,569 Total liabilities and stockholders' equity $ 1,960,333 $ 1,744,717 |
Condensed Statements of Comprehensive Income | Virtu Financial, Inc. (Parent Company Only) Condensed Statements of Comprehensive Income For the Years Ended (in thousands) 2018 2017 2016 Revenues: Other Income — 86,599 — — 86,599 — Operating Expenses: Operations and administrative 1 181 198 Income (loss) before equity in income of subsidiary (1 ) 86,418 (198 ) Equity in income of subsidiary, net of tax 620,193 (83,479 ) 33,178 Net income $ 620,192 $ 2,939 $ 32,980 Net income attributable to common stockholders 620,192 2,939 32,980 Other comprehensive income (loss): Foreign currency translation adjustment, net of taxes (3,073 ) 3,243 (351 ) Comprehensive income $ 617,119 $ 6,182 $ 32,629 |
Condensed Statements of Cash Flows | Virtu Financial, Inc. (Parent Company Only) Condensed Statements of Cash Flows For the Years Ended (in thousands) 2018 2017 2016 Cash flows from operating activities Net income $ 620,192 $ 2,939 $ 32,980 Adjustments to reconcile net income to net cash provided by operating activities: Equity in income of subsidiary, net of tax (305,936 ) (513,601 ) 157,975 Tax receivable agreement obligation reduction 79,722 (86,599 ) — Deferred taxes (64,996 ) 102,973 13,197 Other — (8,500 ) — Changes in operating assets and liabilities: (25,268 ) (8,832 ) (4,012 ) Net cash provided by (used in) operating activities 303,714 (511,620 ) 200,140 Cash flows from investing activities Acquisition of KCG, net of cash acquired, described in Note 3 — (23,908 ) — Investments in subsidiaries, equity basis 34,909 16,846 24,893 Net cash provided by (used in) investing activities 34,909 (7,062 ) 24,893 Cash flows from financing activities Distribution from Virtu Financial to non-controlling interest (206,903 ) (89,563 ) (162,969 ) Dividends (100,329 ) (63,814 ) (37,759 ) Payments on repurchase of non-voting common interest — (11,143 ) (2,000 ) Repurchase of Class C common stock (8,216 ) — (98 ) Purchase of treasury stock (66,218 ) (2,683 ) (4,539 ) Tax receivable agreement obligations (12,359 ) (7,045 ) — Issuance of common stock, net of offering costs — 735,974 — Issuance of common stock in connection with secondary offering, net of offering costs (950 ) — 16,677 Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with secondary offering — — (17,383 ) Net cash provided by (used in) financing activities $ (394,975 ) $ 561,726 $ (208,071 ) Net increase (decrease) in Cash $ (56,352 ) $ 43,044 $ 16,962 Cash, beginning of period 60,193 17,149 187 Cash, end of period $ 3,841 $ 60,193 $ 17,149 Supplemental disclosure of cash flow information: Taxes paid $ — $ 133 $ 8,813 Non-cash financing activities Tax receivable agreement described in Note 6 — 1,534 — Secondary offerings described in Note 16 — — 1,350 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) $ in Millions | Jan. 02, 2018USD ($) | Jul. 19, 2017businesssegment | Sep. 30, 2017segment | Dec. 31, 2018 |
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | ||||
Number of businesses managed and operated | business | 1 | |||
Number of operating segments | 1 | 2 | ||
Number of non-operating segments | 1 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | BondPoint | ||||
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | ||||
Proceeds from sale of business | $ | $ 400.2 | |||
Virtu Financial | ||||
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | ||||
Ownership interest (as a percent) | 56.70% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Securities Borrowed and Securities Loaned (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Minimum initial collateral advanced or received expressed as a percentage of fair value of the underlying securities borrowed or loaned | 102.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property, Equipment and Occupancy (Details) - Furniture and equipment | 12 Months Ended |
Dec. 31, 2018 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Capitalized Software (Details) - Capitalized software | 12 Months Ended |
Dec. 31, 2018 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 1 year 6 months |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 2 years 6 months |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Share-Based Compensation (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Number of days prior to the grant that common stock and restricted stock units fair value is determined based on | 3 days | |
Class A | ||
Class of Stock [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Variable Interest Entities (Details) $ in Thousands | 1 Months Ended | ||
Oct. 31, 2016party | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Variable Interest Entity [Line Items] | |||
Equity investment, Carrying Amount, Asset | $ 18,254 | $ 18,799 | |
Equity investment, Carrying Amount, Liability | 0 | 0 | |
Equity investment, Maximum Exposure to Loss | 18,254 | 18,799 | |
Equity investment, VIEs' assets | $ 49,450 | $ 41,936 | |
JV building microwave communication networks in US and Asia | |||
Variable Interest Entity [Line Items] | |||
Number of other investors in JV | party | 9 | ||
Ownership of voting shares of JV held be each investor (as a percent) | 11.00% | ||
Ownership of equity of JV held be each investor (as a percent) | 11.00% | ||
JV building microwave communication networks in US and Europe | |||
Variable Interest Entity [Line Items] | |||
Ownership of voting shares (as a percent) | 50.00% | ||
Ownership interest (as a percent) | 50.00% |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Accounting Pronouncements, Not Yet Adopted (Details) - Forecast - ASU 2016-02 $ in Millions | Jan. 01, 2019USD ($) |
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Lease liability | $ 334 |
Right-of-use asset | 303.8 |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Lease liability | 369.2 |
Right-of-use asset | $ 335.7 |
Acquisition of KCG - Narrative
Acquisition of KCG - Narrative (Details) - USD ($) | Aug. 10, 2017 | Jul. 21, 2017 | Jul. 20, 2017 | May 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||||
Aggregate purchase price | $ 735,974,000 | |||||
Employee compensation expense | 6,400,000 | |||||
Annual incentive compensation payments | 35,300,000 | |||||
Goodwill | $ 836,583,000 | 844,883,000 | ||||
Deferred tax assets | 200,359,000 | 125,760,000 | ||||
Market Making | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 96,200,000 | 755,292,000 | 755,292,000 | |||
Execution Services | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 32,100,000 | $ 81,291,000 | $ 89,591,000 | |||
Senior Secured Notes Due 2020 | ||||||
Business Acquisition [Line Items] | ||||||
Interest rate | 6.875% | |||||
Redemption price as a percentage of the principal amount | 103.438% | |||||
Face amount | $ 465,000,000 | |||||
Temasek Investment | ||||||
Business Acquisition [Line Items] | ||||||
Other offering costs | $ 7,800,000 | |||||
Class A | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | ||||
Number of shares of stock issued | 10,518,750 | |||||
Employee compensation expense | $ 11,200,000 | $ 11,000,000 | ||||
Class A | NIH Investment Agreement | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares of stock issued | 338,124 | |||||
Aggregate purchase price | $ 5,200,000 | |||||
KCG | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | |||||
Right to receive cash (in dollars per share) | $ 20 | |||||
Cash purchase price | $ 1,400,000,000 | |||||
Fair value (in dollars per share) | $ 20 | |||||
Goodwill | $ 128,286,000 | |||||
Deferred tax assets | $ 23,900,000 | |||||
KCG | NIH Investment Agreement | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares of stock issued | 39,725,979 | |||||
Aggregate purchase price | $ 613,500,000 | |||||
KCG | Class A | Aranda | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares of stock issued | 6,346,155 | |||||
Aggregate purchase price | $ 99,000,000 | |||||
KCG | Class A | Temasek Investment | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares of stock issued | 1,666,666 | |||||
Aggregate purchase price | $ 26,000,000 | |||||
KCG | Class A | NIH Investment Agreement | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares of stock issued | 338,124 | |||||
Aggregate purchase price | $ 5,200,000 |
Acquisition of KCG - Intangible
Acquisition of KCG - Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 20, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Intangible assets | $ 83,989 | $ 111,224 | |
Goodwill | 836,583 | 844,883 | |
Customer relationships | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Intangible assets | 43,095 | 47,178 | |
Favorable leases | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Intangible assets | $ 4,671 | $ 5,487 | |
KCG | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Intangible assets | $ 174,995 | ||
Goodwill | 128,286 | ||
Total | 303,281 | ||
KCG | Technology | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Intangible assets | 67,700 | ||
KCG | Customer relationships | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Intangible assets | 94,000 | ||
KCG | Trade names | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Intangible assets | $ 1,000 | ||
Amortization Years | 10 years | ||
KCG | Favorable leases | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Intangible assets | $ 5,895 | ||
KCG | Exchange memberships | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Intangible assets | $ 6,400 | ||
KCG | Minimum | Technology | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Amortization Years | 1 year | ||
KCG | Minimum | Customer relationships | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Amortization Years | 13 years | ||
KCG | Minimum | Favorable leases | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Amortization Years | 2 years | ||
KCG | Maximum | Technology | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Amortization Years | 6 years | ||
KCG | Maximum | Customer relationships | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Amortization Years | 17 years | ||
KCG | Maximum | Favorable leases | |||
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill | |||
Amortization Years | 15 years |
Sale of BondPoint - Narrative (
Sale of BondPoint - Narrative (Details) - BondPoint - Disposal Group, Disposed of by Sale, Not Discontinued Operations - USD ($) $ in Thousands | Jan. 02, 2018 | Dec. 31, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Proceeds from sale of BondPoint | $ 400,200 | |
Transaction costs | 8,568 | |
Professional fees | 7,100 | |
Compensation expense | 1,400 | |
Gain on sale of BondPoint, net of transaction costs | $ 337,550 | $ 337,600 |
Sale of BondPoint - Summary of
Sale of BondPoint - Summary of Carrying Value and Gain on Sale (Details) - USD ($) $ in Thousands | Jan. 02, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business assets and liabilities held for sale: | ||||
Goodwill adjustment allocated to BondPoint | $ 8,300 | |||
Gain on sale of BondPoint, net of transaction costs | 335,211 | $ 0 | $ 0 | |
BondPoint | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total sale proceeds received | $ 400,200 | |||
Business assets and liabilities held for sale: | ||||
Goodwill adjustment allocated to BondPoint | 8,300 | |||
Gain on sale of BondPoint | 337,550 | $ 337,600 | ||
Transaction costs | 8,568 | |||
Gain on sale of BondPoint, net of transaction costs | $ 328,982 | |||
BondPoint | Held for Sale | ||||
Business assets and liabilities held for sale: | ||||
Receivables from broker dealers and clearing organizations | 3,383 | |||
Intangibles and other assets | 51,687 | |||
Liabilities | (728) | |||
Total carrying value of BondPoint | $ 54,342 |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of net income before minority interest to net income available for common stockholders | |||
Income (loss) before income taxes and noncontrolling interest | $ 696,363 | $ 113,164 | $ 179,591 |
Provision for income taxes | 76,171 | 94,266 | 21,251 |
Net income | 620,192 | 18,898 | 158,340 |
Noncontrolling interest | (330,751) | (15,959) | (125,360) |
Net income available for common stockholders | $ 289,441 | $ 2,939 | $ 32,980 |
Earnings per Share - Basic (Det
Earnings per Share - Basic (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic earnings per share: | |||
Net income (loss) available for common stockholders | $ 289,441 | $ 2,939 | $ 32,980 |
Less: Dividends and undistributed earnings allocated to participating securities | (5,418) | (1,326) | (809) |
Net income (loss) available for common stockholders, net of dividends and undistributed earnings allocated to participating securities | $ 284,023 | $ 1,613 | $ 32,171 |
Weighted average shares of common stock outstanding: | |||
Outstanding (in shares) | 100,875,793 | 62,579,147 | 38,539,091 |
Basic earnings per share (in dollars per share) | $ 2.82 | $ 0.03 | $ 0.83 |
Class A | |||
Weighted average shares of common stock outstanding: | |||
Outstanding (in shares) | 100,875,793 | 62,579,147 | 38,539,091 |
Earnings per Share - Diluted (D
Earnings per Share - Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Diluted earnings per share: | |||
Net income (loss) available for common stockholders, net of dividends and undistributed earnings allocated to participating securities | $ 284,023 | $ 1,613 | $ 32,171 |
Weighted average shares of common stock outstanding: | |||
Issued and outstanding (in shares) | 100,875,793 | 62,579,147 | 38,539,091 |
Weighted average shares of common stock outstanding (in shares) | 102,089,139 | 62,579,147 | 38,539,091 |
Diluted earnings per share (in dollars per share) | $ 2.78 | $ 0.03 | $ 0.83 |
Anti-dilutive shares excluded from computation of EPS | 1,740,630 | 743,096 | |
Class A | |||
Weighted average shares of common stock outstanding: | |||
Issued and outstanding (in shares) | 100,875,793 | 62,579,147 | 38,539,091 |
Issuable pursuant to 2015 Management Incentive Plan (in shares) | 1,213,346 | 0 | 0 |
Weighted average shares of common stock outstanding (in shares) | 102,089,139 | 62,579,147 | 38,539,091 |
Tax Receivable Agreements (Deta
Tax Receivable Agreements (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 15, 2015 | Sep. 30, 2018 | May 31, 2018 | Feb. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Tax Receivable Agreements [Abstract] | |||||||
Payment on applicable cash tax savings (as a percent) | 85.00% | ||||||
First payment made | $ 12,400 | $ 7,000 | |||||
Minimum tax receivable agreement obligation over the agreed period | $ 4,700 | ||||||
Maximum tax receivable agreement obligation over the agreed period | $ 17,000 | ||||||
Period over which the obligations are to be settled | 15 years | ||||||
Deferred tax asset from tax receivable agreement | $ 78,700 | ||||||
Tax receivable agreement obligations | 79,700 | $ 214,403 | $ 147,040 | ||||
Issuance of tax receivable agreements in connection with employee exchange | $ 1,000 | $ 991 | $ (1,534) | ||||
U.S. federal statutory rate (as a percent) | 21.00% | 35.00% | 35.00% | ||||
Reduction to additional paid-in capital as a result of differences between estimate and tax returns | $ 86,600 | ||||||
Deferred tax assets | $ 167,100 | $ 101,600 | |||||
Class A | |||||||
Class of Stock [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) | Jan. 02, 2018USD ($) | Jul. 19, 2017businesssegment | Sep. 30, 2017segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||
Number of businesses managed and operated | business | 1 | ||||||
Number of operating segments | segment | 1 | 2 | |||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Amortization expense relating to finite-lived intangible assets | $ 26,123,000 | $ 15,447,000 | $ 211,000 | ||||
Intangible assets | 83,989,000 | 111,224,000 | |||||
Goodwill [Line Items] | |||||||
Goodwill | 836,583,000 | 844,883,000 | |||||
Goodwill adjustment allocated to BondPoint | 8,300,000 | ||||||
Goodwill impairment | $ 0 | 0 | |||||
Number of reportable segments | segment | 1 | ||||||
Leases | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Intangible assets | $ 1,403,000 | ||||||
Joint Venture | Leases | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Intangible assets | $ 1,100,000 | ||||||
BondPoint | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Goodwill [Line Items] | |||||||
Goodwill adjustment allocated to BondPoint | $ 8,300,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Changes in goodwill | |
Balance at the beginning of the period | $ 844,883 |
Goodwill adjustment allocated to BondPoint | (8,300) |
Balance at the end of the period | 836,583 |
Market Making | |
Changes in goodwill | |
Balance at the beginning of the period | 755,292 |
Goodwill adjustment allocated to BondPoint | 0 |
Balance at the end of the period | 755,292 |
Execution Services | |
Changes in goodwill | |
Balance at the beginning of the period | 89,591 |
Goodwill adjustment allocated to BondPoint | (8,300) |
Balance at the end of the period | 81,291 |
Corporate | |
Changes in goodwill | |
Balance at the beginning of the period | 0 |
Goodwill adjustment allocated to BondPoint | 0 |
Balance at the end of the period | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Acquired Intangible Assets [Line Items] | ||
Accumulated Amortization | $ 148,644 | $ 123,408 |
Net Carrying Amount | 83,989 | 111,224 |
Gross Carrying Amount | 232,633 | 234,633 |
Net Carrying Amount | 83,989 | 111,224 |
Exchange memberships | ||
Acquired Intangible Assets [Line Items] | ||
Indefinite-lived intangibles | 5,838 | 5,838 |
Purchased technology | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | 110,000 | 110,000 |
Accumulated Amortization | 110,000 | 110,000 |
Net Carrying Amount | $ 0 | $ 0 |
Purchased technology | Minimum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 1 year 4 months 24 days | 1 year 4 months 24 days |
Purchased technology | Maximum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 2 years 6 months | 2 years 6 months |
ETF issuer relationships | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 950 | $ 950 |
Accumulated Amortization | 665 | 559 |
Net Carrying Amount | $ 285 | $ 391 |
Useful Lives (Years) | 9 years | 9 years |
ETF buyer relationships | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 950 | $ 950 |
Accumulated Amortization | 665 | 559 |
Net Carrying Amount | $ 285 | $ 390 |
Useful Lives (Years) | 9 years | 9 years |
Leases | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,800 | |
Accumulated Amortization | 397 | |
Net Carrying Amount | $ 1,403 | |
Useful Lives (Years) | 3 years | |
FCC licenses | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 200 | |
Accumulated Amortization | 19 | |
Net Carrying Amount | $ 181 | |
Useful Lives (Years) | 7 years | |
Technology | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 60,000 | $ 60,000 |
Accumulated Amortization | 30,185 | 9,644 |
Net Carrying Amount | $ 29,815 | $ 50,356 |
Technology | Minimum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 1 year | 1 year |
Technology | Maximum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 6 years | 6 years |
Customer relationships | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 49,000 | $ 49,000 |
Accumulated Amortization | 5,905 | 1,822 |
Net Carrying Amount | $ 43,095 | $ 47,178 |
Useful Lives (Years) | 12 years | |
Customer relationships | Minimum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 12 years | |
Customer relationships | Maximum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 17 years | |
Favorable occupancy leases | ||
Acquired Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,895 | $ 5,895 |
Accumulated Amortization | 1,224 | 408 |
Net Carrying Amount | $ 4,671 | $ 5,487 |
Useful Lives (Years) | 7 years | |
Favorable occupancy leases | Minimum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 3 years | |
Favorable occupancy leases | Maximum | ||
Acquired Intangible Assets [Line Items] | ||
Useful Lives (Years) | 15 years |
Receivables from_Payables to _3
Receivables from/Payables to Broker-Dealers and Clearing Organizations (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Due from prime brokers | $ 302,152 | $ 219,573 |
Deposits with clearing organizations | 84,509 | 112,847 |
Net equity with futures commission merchants | 294,884 | 203,711 |
Unsettled trades with clearing organization | 193,544 | 173,778 |
Securities failed to deliver | 218,663 | 248,088 |
Commissions and fees | 7,697 | 14,021 |
Total receivables from broker-dealers and clearing organizations | 1,101,449 | 972,018 |
Liabilities | ||
Due to prime brokers | 354,300 | 197,439 |
Net equity with futures commission merchants | 47,998 | 44,526 |
Unsettled trades with clearing organization | 90,021 | 420,029 |
Securities failed to receive | 73,547 | 51,143 |
Commissions and fees | 1,575 | 3,068 |
Total payables to broker-dealers and clearing organizations | 567,441 | 716,205 |
Outstanding principal balance | $ 184,600 | $ 205,700 |
Collateralized Transactions (De
Collateralized Transactions (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Securities received as collateral: | ||
Securities borrowed | $ 1,361,635 | $ 1,415,793 |
Securities purchased under agreements to resell | 15,475 | 0 |
Securities received as collateral | 1,377,110 | 1,415,793 |
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Financial instruments owned and pledged | 791,115 | 595,043 |
Equities | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Financial instruments owned and pledged | 748,846 | 586,251 |
U.S. and Non-U.S. government obligations | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Financial instruments owned and pledged | 0 | 99 |
Exchange traded notes | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Financial instruments owned and pledged | $ 42,269 | $ 8,693 |
Borrowings - Broker-Dealer Cred
Borrowings - Broker-Dealer Credit Facilities, Narrative (Details) | Nov. 03, 2017USD ($)borrowing_basebroker_dealer | Dec. 31, 2018USD ($)broker_dealer | Dec. 31, 2017USD ($) | Nov. 02, 2017USD ($) |
Line of Credit Facility [Line Items] | ||||
Number of borrowing bases | borrowing_base | 2 | |||
Number of broker-dealer subsidiaries | 3 | 3 | ||
LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate margin (as a percent) | 1.25% | |||
Broker-dealer credit facilities | ||||
Line of Credit Facility [Line Items] | ||||
Number of secured credit facilities | 2 | |||
Aggregate borrowing | $ | $ 500,000,000 | $ 700,000,000 | $ 650,000,000 | $ 25,000,000 |
Number of broker-dealer subsidiaries the committed facility is available to | 2 | |||
Maximum borrowing capacity | $ | $ 100,000,000 | $ 40,000,000 | ||
Commitment fee (as a percent) | 0.50% | |||
Broker-dealer credit facilities | LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate margin (as a percent) | 2.50% | |||
Broker-dealer credit facility on an uncommitted basis | ||||
Line of Credit Facility [Line Items] | ||||
Number of secured credit facilities | 1 | |||
Aggregate borrowing | $ | $ 200,000,000 | $ 150,000,000 |
Borrowings - Broker-Dealer Cr_2
Borrowings - Broker-Dealer Credit Facilities Carrying Values, Net (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 03, 2017 | Nov. 02, 2017 |
Line of Credit Facility [Line Items] | ||||
Borrowing Outstanding | $ 931,908,000 | |||
Outstanding Borrowings, net | $ 907,037,000 | $ 1,388,548,000 | ||
Uncommitted facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest Rate | 3.40% | 2.42% | ||
Financing Available | $ 200,000,000 | $ 150,000,000 | ||
Borrowing Outstanding | 10,000,000 | 25,000,000 | ||
Deferred Debt Issuance Cost | (832,000) | 0 | ||
Outstanding Borrowings, net | $ 9,168,000 | $ 25,000,000 | ||
Revolving credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest Rate | 3.75% | 2.81% | ||
Financing Available | $ 500,000,000 | $ 500,000,000 | ||
Borrowing Outstanding | 7,000,000 | 7,000,000 | ||
Deferred Debt Issuance Cost | (1,040,000) | (4,117,000) | ||
Outstanding Borrowings, net | 5,960,000 | 2,883,000 | ||
Broker-dealer credit facilities | ||||
Line of Credit Facility [Line Items] | ||||
Financing Available | 700,000,000 | 650,000,000 | $ 500,000,000 | $ 25,000,000 |
Borrowing Outstanding | 17,000,000 | 32,000,000 | ||
Deferred Debt Issuance Cost | (1,872,000) | (4,117,000) | ||
Outstanding Borrowings, net | $ 15,128,000 | $ 27,883,000 |
Borrowings - Interest Expense o
Borrowings - Interest Expense on Broker-Dealer Facilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Line of Credit Facility [Line Items] | |||
Interest expense | $ 71,800 | $ 64,107 | $ 28,327 |
Broker-dealer credit facilities | |||
Line of Credit Facility [Line Items] | |||
Interest expense | 2,100 | 1,719 | 1,232 |
Uncommitted facility | |||
Line of Credit Facility [Line Items] | |||
Interest expense | 1,794 | 1,667 | 1,191 |
Committed facility | |||
Line of Credit Facility [Line Items] | |||
Interest expense | 0 | 33 | 41 |
Revolving credit facility | |||
Line of Credit Facility [Line Items] | |||
Interest expense | $ 306 | $ 19 | $ 0 |
Borrowings - Short-Term Credit
Borrowings - Short-Term Credit Facilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Short-term Debt [Line Items] | |||
Borrowing Outstanding | $ 931,908 | ||
Interest expense | $ 71,800 | $ 64,107 | $ 28,327 |
Short-Term Credit Facilities | |||
Short-term Debt [Line Items] | |||
Weighted Average Interest Rate | 5.03% | 3.86% | |
Financing Available | $ 566,000 | $ 543,000 | |
Borrowing Outstanding | 184,608 | 205,677 | |
Interest expense | $ 7,100 | $ 6,600 | $ 6,300 |
Borrowings - Long-Term Borrowin
Borrowings - Long-Term Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 16, 2017 |
Line of Credit Facility [Line Items] | |||
Outstanding Principal | $ 931,908 | ||
Outstanding Borrowings, net | $ 907,037 | $ 1,388,548 | |
Senior Secured Second Lien Notes | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 6.75% | ||
Senior Secured Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 5.55% | 5.13% | |
Outstanding Principal | $ 400,000 | $ 900,000 | |
Discount | (332) | (999) | |
Deferred Debt Issuance Cost | (6,704) | (18,504) | |
Outstanding Borrowings, net | $ 392,964 | $ 880,497 | |
Senior Secured Credit Facility | Senior Secured Second Lien Notes | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 6.75% | 6.75% | |
Outstanding Principal | $ 500,000 | $ 500,000 | |
Discount | 0 | 0 | |
Deferred Debt Issuance Cost | (17,811) | (22,961) | |
Outstanding Borrowings, net | $ 482,189 | $ 477,039 | |
SBI Bonds | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 5.00% | 5.00% | |
Outstanding Principal | $ 31,908 | $ 31,059 | |
Discount | 0 | 0 | |
Deferred Debt Issuance Cost | (24) | (47) | |
Outstanding Borrowings, net | 31,884 | 31,012 | |
Total Long-term borrowings | |||
Line of Credit Facility [Line Items] | |||
Outstanding Principal | 931,908 | 1,431,059 | |
Discount | (332) | (999) | |
Deferred Debt Issuance Cost | (24,539) | (41,512) | |
Outstanding Borrowings, net | $ 907,037 | $ 1,388,548 |
Borrowings - Fourth Amended and
Borrowings - Fourth Amended and Restated Credit Agreement (Details) - USD ($) $ in Thousands | Sep. 19, 2018 | Jan. 02, 2018 | Nov. 03, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Jun. 30, 2017 |
Debt Instrument [Line Items] | ||||||||
Outstanding principal amount | $ 931,908 | $ 931,908 | ||||||
Repayments of long-term debt | 500,000 | $ 256,473 | $ 3,825 | |||||
LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin (as a percent) | 1.25% | |||||||
Senior Secured Credit Facility Fourth Amendment | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding principal amount | 400,000 | 400,000 | $ 1,150,000 | |||||
Repayments of long-term debt | 500,000 | $ 750,000 | ||||||
Accelerated unamortized financing costs | $ 10,600 | |||||||
Senior Secured Credit Facility Fourth Amendment | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin (as a percent) | 2.75% | 3.25% |
Borrowings - Senior Secured Sec
Borrowings - Senior Secured Second Lien Notes (Details) - Senior Secured Second Lien Notes | Jun. 16, 2017USD ($) |
Debt Instrument [Line Items] | |
Face amount | $ 500,000,000 |
Interest rate | 6.75% |
Borrowings - SBI Bonds (Details
Borrowings - SBI Bonds (Details) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018JPY (¥) | Dec. 31, 2017JPY (¥) | Jul. 25, 2016USD ($) | Jul. 25, 2016JPY (¥) | |
Debt Instrument [Line Items] | |||||||
Outstanding principal amount | $ 931,908 | ||||||
SBI Bonds | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding principal amount | 31,908 | $ 31,059 | |||||
VFH | SBI Bonds | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 33,100 | ¥ 3,500,000,000 | |||||
Outstanding principal amount | 31,900 | 31,100 | ¥ 3,500,000,000 | ¥ 3,500,000,000 | |||
Gain (loss) due to change in currency rates | $ 800 | $ 1,100 | $ (3,200) |
Borrowings - Future Minimum Pri
Borrowings - Future Minimum Principal Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,019 | $ 0 |
2,020 | 31,908 |
2,021 | 400,000 |
2022 and thereafter | 500,000 |
Total principal of long-term borrowings | $ 931,908 |
Financial Assets and Liabilit_3
Financial Assets and Liabilities - Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Assets | ||
Financial instruments owned, at fair value | $ 1,848,806 | $ 2,117,579 |
Financial instruments owned, at fair value, counterparty and cash collateral netting | (2,790,242) | (2,027,697) |
Financial instruments owned and pledged | 791,115 | 595,043 |
Other assets | 48,273 | 98,364 |
Liabilities | ||
Financial instruments sold, not yet purchased | 2,475,395 | 2,384,598 |
Financial instruments sold, not yet purchased, at fair value, counterparty and cash collateral netting | (2,719,954) | (2,024,991) |
Currency forwards | ||
Assets | ||
Financial instruments owned, at fair value | 2,131 | 17,790 |
Financial instruments owned, at fair value, counterparty and cash collateral netting | (2,790,242) | (2,027,697) |
Liabilities | ||
Financial instruments sold, not yet purchased | 795 | 7,026 |
Financial instruments sold, not yet purchased, at fair value, counterparty and cash collateral netting | (2,719,954) | (2,024,991) |
Options | ||
Assets | ||
Financial instruments owned, at fair value | 11,899 | 7,045 |
Liabilities | ||
Financial instruments sold, not yet purchased | 11,051 | 5,839 |
Equity securities | ||
Assets | ||
Financial instruments owned, at fair value | 1,609,901 | 1,926,591 |
Financial instruments owned and pledged | 748,846 | 586,251 |
Liabilities | ||
Financial instruments sold, not yet purchased | 2,268,330 | 2,203,432 |
U.S. and Non-U.S. government obligations | ||
Assets | ||
Financial instruments owned, at fair value | 106,013 | |
Financial instruments owned and pledged | 0 | 99 |
Liabilities | ||
Financial instruments sold, not yet purchased | 115,112 | 31,421 |
Non-U.S. government obligations | ||
Assets | ||
Financial instruments owned, at fair value | 22,783 | |
Corporate Bonds | ||
Assets | ||
Financial instruments owned, at fair value | 87,500 | 60,975 |
Liabilities | ||
Financial instruments sold, not yet purchased | 40,123 | 81,118 |
Exchange traded notes | ||
Assets | ||
Financial instruments owned, at fair value | 31,362 | 82,395 |
Financial instruments owned and pledged | 42,269 | 8,693 |
Liabilities | ||
Financial instruments sold, not yet purchased | 39,984 | 55,762 |
Equity investment | ||
Assets | ||
Other assets | 45,856 | 40,588 |
Exchange stock | ||
Assets | ||
Other assets | 2,417 | 1,952 |
Other | ||
Assets | ||
Other assets | 55,824 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Financial instruments owned, at fair value | 694,441 | 785,185 |
Financial instruments owned and pledged | 396,778 | 410,851 |
Other assets | 2,417 | 1,952 |
Liabilities | ||
Financial instruments sold, not yet purchased | 1,055,472 | 874,109 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Currency forwards | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Liabilities | ||
Financial instruments sold, not yet purchased | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Options | ||
Assets | ||
Financial instruments owned, at fair value | 11,899 | 7,045 |
Liabilities | ||
Financial instruments sold, not yet purchased | 11,051 | 5,839 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities | ||
Assets | ||
Financial instruments owned, at fair value | 587,680 | 758,596 |
Financial instruments owned and pledged | 389,810 | 410,670 |
Liabilities | ||
Financial instruments sold, not yet purchased | 931,992 | 847,816 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. and Non-U.S. government obligations | ||
Assets | ||
Financial instruments owned, at fair value | 91,466 | |
Financial instruments owned and pledged | 99 | |
Liabilities | ||
Financial instruments sold, not yet purchased | 112,058 | 18,940 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Non-U.S. government obligations | ||
Assets | ||
Financial instruments owned, at fair value | 5,968 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate Bonds | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Liabilities | ||
Financial instruments sold, not yet purchased | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Exchange traded notes | ||
Assets | ||
Financial instruments owned, at fair value | 3,396 | 13,576 |
Financial instruments owned and pledged | 6,968 | 82 |
Liabilities | ||
Financial instruments sold, not yet purchased | 371 | 1,514 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity investment | ||
Assets | ||
Other assets | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Exchange stock | ||
Assets | ||
Other assets | 2,417 | 1,952 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other | ||
Assets | ||
Other assets | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Financial instruments owned, at fair value | 3,944,607 | 3,360,091 |
Financial instruments owned and pledged | 394,337 | 184,192 |
Other assets | 0 | 55,824 |
Liabilities | ||
Financial instruments sold, not yet purchased | 4,139,877 | 3,535,480 |
Significant Other Observable Inputs (Level 2) | Currency forwards | ||
Assets | ||
Financial instruments owned, at fair value | 2,792,373 | 2,045,487 |
Liabilities | ||
Financial instruments sold, not yet purchased | 2,720,749 | 2,032,017 |
Significant Other Observable Inputs (Level 2) | Options | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Liabilities | ||
Financial instruments sold, not yet purchased | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Equity securities | ||
Assets | ||
Financial instruments owned, at fair value | 1,022,221 | 1,167,995 |
Financial instruments owned and pledged | 359,036 | 175,581 |
Liabilities | ||
Financial instruments sold, not yet purchased | 1,336,338 | 1,355,616 |
Significant Other Observable Inputs (Level 2) | U.S. and Non-U.S. government obligations | ||
Assets | ||
Financial instruments owned, at fair value | 14,547 | |
Financial instruments owned and pledged | 0 | |
Liabilities | ||
Financial instruments sold, not yet purchased | 3,054 | 12,481 |
Significant Other Observable Inputs (Level 2) | Non-U.S. government obligations | ||
Assets | ||
Financial instruments owned, at fair value | 16,815 | |
Significant Other Observable Inputs (Level 2) | Corporate Bonds | ||
Assets | ||
Financial instruments owned, at fair value | 87,500 | 60,975 |
Liabilities | ||
Financial instruments sold, not yet purchased | 40,123 | 81,118 |
Significant Other Observable Inputs (Level 2) | Exchange traded notes | ||
Assets | ||
Financial instruments owned, at fair value | 27,966 | 68,819 |
Financial instruments owned and pledged | 35,301 | 8,611 |
Liabilities | ||
Financial instruments sold, not yet purchased | 39,613 | 54,248 |
Significant Other Observable Inputs (Level 2) | Equity investment | ||
Assets | ||
Other assets | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Exchange stock | ||
Assets | ||
Other assets | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Other | ||
Assets | ||
Other assets | 55,824 | |
Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Financial instruments owned and pledged | 0 | 0 |
Other assets | 45,856 | 40,588 |
Liabilities | ||
Financial instruments sold, not yet purchased | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Currency forwards | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Liabilities | ||
Financial instruments sold, not yet purchased | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Options | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Liabilities | ||
Financial instruments sold, not yet purchased | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Equity securities | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Financial instruments owned and pledged | 0 | 0 |
Liabilities | ||
Financial instruments sold, not yet purchased | 0 | 0 |
Significant Unobservable Inputs (Level 3) | U.S. and Non-U.S. government obligations | ||
Assets | ||
Financial instruments owned, at fair value | 0 | |
Financial instruments owned and pledged | 0 | |
Liabilities | ||
Financial instruments sold, not yet purchased | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Non-U.S. government obligations | ||
Assets | ||
Financial instruments owned, at fair value | 0 | |
Significant Unobservable Inputs (Level 3) | Corporate Bonds | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Liabilities | ||
Financial instruments sold, not yet purchased | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Exchange traded notes | ||
Assets | ||
Financial instruments owned, at fair value | 0 | 0 |
Financial instruments owned and pledged | 0 | 0 |
Liabilities | ||
Financial instruments sold, not yet purchased | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Equity investment | ||
Assets | ||
Other assets | 45,856 | 40,588 |
Significant Unobservable Inputs (Level 3) | Exchange stock | ||
Assets | ||
Other assets | $ 0 | 0 |
Significant Unobservable Inputs (Level 3) | Other | ||
Assets | ||
Other assets | $ 0 |
Financial Assets and Liabilit_4
Financial Assets and Liabilities - SBI Investment (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Transfers of financial instruments between levels | $ 0 | $ 0 |
SBI | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Discount rate applied to cash flow forecasts to determine initial fair value of equity method investment. | 15.00% | |
Market approach average price/earnings multiples of comparable companies to corroborate the income approach | 12.6 | |
Time period of projected income to determine fair value of equity method investment | 5 years |
Financial Assets and Liabilit_5
Financial Assets and Liabilities - Receivable from Bats (Details) $ in Millions | Mar. 31, 2015USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Payment receivable | $ 50 |
Maximum | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Annual payment receivable | $ 6.6 |
Financial Assets and Liabilit_6
Financial Assets and Liabilities - Not Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||||
Cash and cash equivalents | $ 736,047 | $ 532,887 | $ 181,415 | $ 163,235 |
Securities borrowed | 1,399,684 | 1,471,172 | ||
Securities purchased under agreements to resell | 15,475 | 0 | ||
Receivables from broker dealers and clearing organizations | 1,101,449 | 972,018 | ||
Total assets | 7,380,978 | 7,320,006 | ||
Liabilities | ||||
Short-term borrowings | 15,128 | 27,883 | ||
Long-term borrowings | 907,037 | 1,388,548 | ||
Securities loaned | 1,130,039 | 754,687 | ||
Securities sold under agreements to repurchase | 281,861 | 390,642 | ||
Payables to broker dealers and clearing organizations | 567,441 | 716,205 | ||
Total liabilities | 5,886,279 | 6,168,428 | ||
Carrying Value | ||||
Assets | ||||
Cash and cash equivalents | 736,047 | 532,887 | ||
Securities borrowed | 1,399,684 | 1,471,172 | ||
Securities purchased under agreements to resell | 15,475 | |||
Receivables from broker dealers and clearing organizations | 1,101,449 | 972,018 | ||
Total assets | 3,252,655 | 2,976,077 | ||
Liabilities | ||||
Short-term borrowings | 15,128 | 27,883 | ||
Long-term borrowings | 907,037 | 1,388,548 | ||
Securities loaned | 1,130,039 | 754,687 | ||
Securities sold under agreements to repurchase | 281,861 | 390,642 | ||
Payables to broker dealers and clearing organizations | 567,441 | 716,205 | ||
Total liabilities | 2,901,506 | 3,277,965 | ||
Fair Value | ||||
Assets | ||||
Cash and cash equivalents | 736,047 | 532,887 | ||
Securities borrowed | 1,399,684 | 1,471,172 | ||
Securities purchased under agreements to resell | 15,475 | |||
Receivables from broker dealers and clearing organizations | 1,101,449 | 972,018 | ||
Total assets | 3,252,655 | 2,976,077 | ||
Liabilities | ||||
Short-term borrowings | 15,128 | 27,883 | ||
Long-term borrowings | 916,465 | 1,465,489 | ||
Securities loaned | 1,130,039 | 754,687 | ||
Securities sold under agreements to repurchase | 281,861 | 390,642 | ||
Payables to broker dealers and clearing organizations | 567,441 | 716,205 | ||
Total liabilities | 2,910,934 | 3,354,906 | ||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||
Assets | ||||
Cash and cash equivalents | 736,047 | 532,887 | ||
Securities borrowed | 0 | 0 | ||
Securities purchased under agreements to resell | 0 | |||
Receivables from broker dealers and clearing organizations | 71,288 | 36,513 | ||
Total assets | 807,335 | 569,400 | ||
Liabilities | ||||
Short-term borrowings | 0 | 0 | ||
Long-term borrowings | 0 | 0 | ||
Securities loaned | 0 | 0 | ||
Securities sold under agreements to repurchase | 0 | 0 | ||
Payables to broker dealers and clearing organizations | 1,031 | 2,925 | ||
Total liabilities | 1,031 | 2,925 | ||
Fair Value | Significant Other Observable Inputs (Level 2) | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0 | ||
Securities borrowed | 1,399,684 | 1,471,172 | ||
Securities purchased under agreements to resell | 15,475 | |||
Receivables from broker dealers and clearing organizations | 1,030,161 | 935,505 | ||
Total assets | 2,445,320 | 2,406,677 | ||
Liabilities | ||||
Short-term borrowings | 15,128 | 27,883 | ||
Long-term borrowings | 916,465 | 1,465,489 | ||
Securities loaned | 1,130,039 | 754,687 | ||
Securities sold under agreements to repurchase | 281,861 | 390,642 | ||
Payables to broker dealers and clearing organizations | 566,410 | 713,280 | ||
Total liabilities | 2,909,903 | 3,351,981 | ||
Fair Value | Significant Unobservable Inputs (Level 3) | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0 | ||
Securities borrowed | 0 | 0 | ||
Securities purchased under agreements to resell | 0 | |||
Receivables from broker dealers and clearing organizations | 0 | 0 | ||
Total assets | 0 | 0 | ||
Liabilities | ||||
Short-term borrowings | 0 | 0 | ||
Long-term borrowings | 0 | 0 | ||
Securities loaned | 0 | 0 | ||
Securities sold under agreements to repurchase | 0 | 0 | ||
Payables to broker dealers and clearing organizations | 0 | 0 | ||
Total liabilities | $ 0 | $ 0 |
Financial Assets and Liabilit_7
Financial Assets and Liabilities - Level 3 financial instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 40,588 | $ 36,031 |
Purchases | 0 | 3,000 |
Total Realized and Unrealized Gains / (Losses) | 5,268 | 4,557 |
Net Transfers into (out of) Level 3 | 0 | 0 |
Settlement | 0 | (3,000) |
Ending Balance | 45,856 | 40,588 |
Change in Net Unrealized Gains / (Losses) on Investments still held at end of period | 5,268 | 4,557 |
Equity investment | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 40,588 | 36,031 |
Purchases | 0 | 0 |
Total Realized and Unrealized Gains / (Losses) | 5,268 | 4,557 |
Net Transfers into (out of) Level 3 | 0 | 0 |
Settlement | 0 | 0 |
Ending Balance | 45,856 | 40,588 |
Change in Net Unrealized Gains / (Losses) on Investments still held at end of period | 5,268 | 4,557 |
Other | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 0 | 0 |
Purchases | 3,000 | |
Total Realized and Unrealized Gains / (Losses) | 0 | |
Net Transfers into (out of) Level 3 | 0 | |
Settlement | (3,000) | |
Ending Balance | 0 | |
Change in Net Unrealized Gains / (Losses) on Investments still held at end of period | $ 0 |
Financial Assets and Liabilit_8
Financial Assets and Liabilities - Netting of Certain Financial Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Securities borrowed | ||
Gross Amounts of Recognized Assets | $ 1,399,684 | $ 1,471,172 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 1,399,684 | 1,471,172 |
Gross Amounts Not Offset In the Consolidated Statement of Financial Condition | ||
Financial Instruments | (1,361,635) | (1,418,672) |
Cash Collateral Received | (8,822) | (13,318) |
Net Amount | 29,227 | 39,182 |
Securities purchased under agreements to resell | ||
Gross Amounts of Recognized Assets | 15,475 | |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 15,475 | 0 |
Gross Amounts Not Offset In the Consolidated Statement of Financial Condition | ||
Financial Instruments | (15,475) | |
Cash Collateral Received | 0 | |
Net Amount | 0 | |
Total | ||
Gross Amounts of Recognized Assets | 4,219,431 | 3,523,704 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | (2,790,242) | (2,027,697) |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 1,429,189 | 1,496,007 |
Gross Amounts Not Offset In the Consolidated Statement of Financial Condition | ||
Financial Instruments | (1,389,009) | (1,418,717) |
Cash Collateral Received | (8,822) | (13,318) |
Net Amount | 31,358 | 63,972 |
Currency forwards | ||
Trading assets, at fair value: | ||
Gross Amounts of Recognized Assets | 2,792,373 | 2,045,487 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | (2,790,242) | (2,027,697) |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 2,131 | 17,790 |
Gross Amounts Not Offset In the Consolidated Statement of Financial Condition | ||
Financial Instruments | 0 | 0 |
Cash Collateral Received | 0 | 0 |
Net Amount | 2,131 | 17,790 |
Options | ||
Trading assets, at fair value: | ||
Gross Amounts of Recognized Assets | 11,899 | 7,045 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 11,899 | 7,045 |
Gross Amounts Not Offset In the Consolidated Statement of Financial Condition | ||
Financial Instruments | (11,899) | (45) |
Cash Collateral Received | 0 | 0 |
Net Amount | $ 0 | $ 7,000 |
Financial Assets and Liabilit_9
Financial Assets and Liabilities - Netting of Certain Financial Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Securities loaned | ||
Gross Amounts of Recognized Liabilities | $ 1,130,039 | $ 754,687 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 1,130,039 | 754,687 |
Gross Amounts Not Offset In the Consolidated Statement of Financial Condition | ||
Financial Instruments | (1,108,461) | (737,731) |
Cash Collateral Pledged | (8,822) | (10,776) |
Net Amount | 12,756 | 6,180 |
Securities sold under agreements to repurchase | ||
Gross Amounts of Recognized Liabilities | 281,861 | 390,642 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 281,861 | 390,642 |
Gross Amounts Not Offset In the Consolidated Statement of Financial Condition | ||
Financial Instruments | (281,861) | (390,642) |
Cash Collateral Pledged | 0 | 0 |
Net Amount | 0 | 0 |
Total | ||
Gross Amounts of Recognized Liabilities | 4,143,700 | 3,183,185 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | (2,719,954) | (2,024,991) |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 1,423,746 | 1,158,194 |
Gross Amounts Not Offset In the Consolidated Statement of Financial Condition | ||
Financial Instruments | (1,401,373) | (1,128,429) |
Cash Collateral Pledged | (9,614) | (10,776) |
Net Amount | 12,759 | 18,989 |
Currency forwards | ||
Trading liabilities, at fair value: | ||
Gross Amounts of Recognized Liabilities | 2,720,749 | 2,032,017 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | (2,719,954) | (2,024,991) |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 795 | 7,026 |
Gross Amounts Not Offset In the Consolidated Statement of Financial Condition | ||
Financial Instruments | 0 | 0 |
Cash Collateral Pledged | (792) | |
Net Amount | 3 | 7,026 |
Options | ||
Trading liabilities, at fair value: | ||
Gross Amounts of Recognized Liabilities | 11,051 | 5,839 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | 0 | 0 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 11,051 | 5,839 |
Gross Amounts Not Offset In the Consolidated Statement of Financial Condition | ||
Financial Instruments | (11,051) | (56) |
Cash Collateral Pledged | 0 | 0 |
Net Amount | $ 0 | $ 5,783 |
Financial Assets and Liabili_10
Financial Assets and Liabilities - Gross Obligations For Securities Lending Transactions (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | $ 281,861 | $ 390,642 |
Remaining contractual maturity for securities loaned | 1,130,039 | 754,687 |
Overnight and Continuous | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 11,861 | 642 |
Remaining contractual maturity for securities loaned | 1,130,039 | 754,687 |
Less than 30 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 45,000 | 100,000 |
Remaining contractual maturity for securities loaned | 0 | 0 |
30 - 60 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 65,000 | 90,000 |
Remaining contractual maturity for securities loaned | 0 | 0 |
61 - 90 Days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 160,000 | 200,000 |
Remaining contractual maturity for securities loaned | 0 | 0 |
Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 270,000 | 390,000 |
Remaining contractual maturity for securities loaned | 1,130,039 | 754,687 |
Equity securities | Overnight and Continuous | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 0 | 0 |
Remaining contractual maturity for securities loaned | 1,130,039 | 754,687 |
Equity securities | Less than 30 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 45,000 | 100,000 |
Remaining contractual maturity for securities loaned | 0 | 0 |
Equity securities | 30 - 60 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 65,000 | 90,000 |
Remaining contractual maturity for securities loaned | 0 | 0 |
Equity securities | 61 - 90 Days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 160,000 | 200,000 |
Remaining contractual maturity for securities loaned | 0 | 0 |
U.S. and Non-U.S. government obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 11,861 | 642 |
U.S. and Non-U.S. government obligations | Overnight and Continuous | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 11,861 | 642 |
U.S. and Non-U.S. government obligations | Less than 30 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 0 | 0 |
U.S. and Non-U.S. government obligations | 30 - 60 days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | 0 | 0 |
U.S. and Non-U.S. government obligations | 61 - 90 Days | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Remaining contractual maturity for securities sold under agreements to repurchase | $ 0 | $ 0 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Equities futures | Derivative instruments not designated as hedging instruments | Receivables from broker dealers and clearing organizations | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Assets, Fair Value | $ (15,382) | $ (505) |
Derivatives Assets, Notional | 2,891,606 | 1,985,770 |
Equities futures | Derivative instruments not designated as hedging instruments | Payables to broker dealers and clearing organizations | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Liabilities, Fair Value | 468 | (575) |
Derivatives Liabilities, Notional | 106,487 | 142,658 |
Commodity futures | Derivative instruments not designated as hedging instruments | Receivables from broker dealers and clearing organizations | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Assets, Fair Value | 69,235 | 971 |
Derivatives Assets, Notional | 11,595,215 | 21,231,001 |
Commodity futures | Derivative instruments not designated as hedging instruments | Payables to broker dealers and clearing organizations | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Liabilities, Fair Value | (375) | (1,602) |
Derivatives Liabilities, Notional | 54,782 | 130,042 |
Currency futures | Derivative instruments not designated as hedging instruments | Receivables from broker dealers and clearing organizations | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Assets, Fair Value | (9,432) | 26,548 |
Derivatives Assets, Notional | 3,756,914 | 3,994,412 |
Currency futures | Derivative instruments not designated as hedging instruments | Payables to broker dealers and clearing organizations | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Liabilities, Fair Value | (30,643) | (13,947) |
Derivatives Liabilities, Notional | 6,239,725 | 7,756,958 |
Fixed income futures | Derivative instruments not designated as hedging instruments | Receivables from broker dealers and clearing organizations | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Assets, Fair Value | (28) | 73 |
Derivatives Assets, Notional | 18,694 | 44,395 |
Fixed income futures | Derivative instruments not designated as hedging instruments | Payables to broker dealers and clearing organizations | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Liabilities, Fair Value | 93 | (1) |
Derivatives Liabilities, Notional | 8,591 | 2,584 |
Options | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Assets, Fair Value | 11,899 | 7,045 |
Derivatives Liabilities, Fair Value | 11,051 | 5,839 |
Options | Derivative instruments not designated as hedging instruments | Financial instruments owned | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Assets, Fair Value | 11,899 | 7,045 |
Derivatives Assets, Notional | 659,101 | 682,369 |
Options | Derivative instruments not designated as hedging instruments | Financial instruments sold, not yet purchased | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Liabilities, Fair Value | 11,051 | 5,839 |
Derivatives Liabilities, Notional | 608,756 | 681,147 |
Currency forwards | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Assets, Fair Value | 2,792,373 | 2,045,487 |
Derivatives Liabilities, Fair Value | 2,720,749 | 2,032,017 |
Currency forwards | Derivative instruments not designated as hedging instruments | Financial instruments owned | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Assets, Fair Value | 2,792,373 | 2,045,487 |
Derivatives Assets, Notional | 171,288,432 | 124,000,221 |
Currency forwards | Derivative instruments not designated as hedging instruments | Financial instruments sold, not yet purchased | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Liabilities, Fair Value | 2,720,749 | 2,032,017 |
Derivatives Liabilities, Notional | 171,252,224 | 123,993,234 |
Currency forwards | Derivative instruments designated as hedging instruments | Financial instruments sold, not yet purchased | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives Liabilities, Fair Value | (792) | (514) |
Derivatives Liabilities, Notional | $ 13,501 | $ 16,115 |
Derivative Instruments - Gain F
Derivative Instruments - Gain From Derivative Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Not designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain impact that derivative instruments not designated as hedging instruments had on results of operations | $ (141,449) | $ 286,046 | $ 561,125 |
Futures | Not designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain impact that derivative instruments not designated as hedging instruments had on results of operations | (309,598) | 290,609 | 559,626 |
Currency forwards | Not designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain impact that derivative instruments not designated as hedging instruments had on results of operations | 174,310 | 2,603 | 1,915 |
Options | Not designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain impact that derivative instruments not designated as hedging instruments had on results of operations | (6,161) | (7,166) | (410) |
Others | Not designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain impact that derivative instruments not designated as hedging instruments had on results of operations | 0 | 0 | (6) |
Foreign exchange - forward contract | Derivative instruments designed as hedging instruments: | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Net gain from derivative instruments, which are recorded in accumulated other comprehensive income | $ 63 | $ (642) | $ 0 |
Revenues from Contracts with _3
Revenues from Contracts with Customers (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||
Revenues from contract with customers | $ 184,339 | $ 116,503 | $ 10,352 |
Total revenue | 1,878,718 | 1,027,982 | 702,272 |
Receivables related to revenue from contracts with customers | 1,700 | 7,100 | |
Services transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,873,398 | ||
Services transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 5,320 | ||
Commissions, net | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contract with customers | 179,019 | ||
Technology services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contract with customers | 5,320 | ||
Other sources of revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,694,379 | ||
Market Making | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contract with customers | 28,813 | ||
Total revenue | 1,384,475 | 836,707 | 691,884 |
Market Making | Services transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,384,475 | ||
Market Making | Services transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | ||
Market Making | Commissions, net | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contract with customers | 28,813 | ||
Market Making | Technology services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contract with customers | 0 | ||
Market Making | Other sources of revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,355,662 | ||
Execution Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contract with customers | 155,526 | ||
Total revenue | 496,333 | 99,135 | 10,352 |
Execution Services | Services transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 491,013 | ||
Execution Services | Services transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 5,320 | ||
Execution Services | Commissions, net | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contract with customers | 150,206 | ||
Execution Services | Technology services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contract with customers | 5,320 | ||
Execution Services | Other sources of revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 340,807 | ||
Corporate | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contract with customers | 0 | ||
Total revenue | (2,090) | $ 92,140 | $ 36 |
Corporate | Services transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | (2,090) | ||
Corporate | Services transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | ||
Corporate | Commissions, net | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contract with customers | 0 | ||
Corporate | Technology services | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contract with customers | 0 | ||
Corporate | Other sources of revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ (2,090) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current income taxes receivable | $ 115.2 | $ 41.1 |
Current taxes payable | 7.6 | 10.3 |
Deferred tax asset, alternative minimum tax | 0.6 | |
Operating loss carryforwards | 231.8 | 239.3 |
Deferred tax asset, non-U.S. operating loss carryforward | 43.5 | 44.9 |
Unrecognized tax benefits that would impact effective tax rate | $ 7.3 | |
Tax Cuts and Jobs Act, incomplete accounting change in rate, provisional income tax expense | $ 90.6 |
Income Taxes - Income Before Ta
Income Taxes - Income Before Tax and Provision for Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net income (loss) before income taxes | |||
U.S. operations | $ 659,937 | $ 70,484 | $ 138,950 |
Non-U.S. operations | 36,426 | 42,680 | 40,641 |
Income before income taxes and noncontrolling interest | 696,363 | 113,164 | 179,591 |
Current provision (benefit) | |||
Federal | 49,047 | (9,991) | 2,690 |
State and Local | 18,697 | 65 | 38 |
Foreign | 4,276 | 1,219 | 5,210 |
Deferred provision (benefit) | |||
Federal | 4,986 | 106,415 | 13,547 |
State and Local | (1,599) | (3,380) | 194 |
Foreign | 764 | (62) | (428) |
Provision for income taxes | $ 76,171 | $ 94,266 | $ 21,251 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of tax provision | |||
Tax provision at the U.S. federal statutory rate | 21.00% | 35.00% | 35.00% |
Less: rate attributable to noncontrolling interest | (10.20%) | (19.10%) | (24.40%) |
State and local taxes, net of federal benefit | 1.90% | (1.90%) | 1.30% |
Impact of 2017 Tax Act on deferred tax assets | 0.00% | 80.10% | 0.00% |
Impact of 2017 Tax Act on tax receivable agreement obligation | 0.00% | (12.90%) | 0.00% |
Non-deductible expenses, net | (0.30%) | 1.90% | 0.00% |
Other, net | (1.50%) | 0.20% | 0.00% |
Effective tax rate | 10.90% | 83.30% | 11.90% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred income tax assets | ||
Tax Receivable Agreement | $ 167,117 | $ 101,594 |
Share-based compensation | 9,419 | 5,213 |
Intangibles | 12,738 | 14,547 |
Fixed assets and other | 21,088 | 13,425 |
Tax credits and net operating loss carryforwards | 44,972 | 50,867 |
Less: Valuation allowance on net operating loss carryforwards and tax credits | (44,947) | (43,544) |
Total deferred income tax assets | 210,387 | 142,102 |
Deferred income tax liabilities | ||
Intangibles | 10,028 | 16,342 |
Total deferred income tax liabilities | $ 10,028 | $ 16,342 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Balance at December 31, 2016 | $ 7,300 |
Increase from Acquisition of KCG | 0 |
Decreases based on tax positions related to prior period | (835) |
Increase based on tax positions related to current period | 868 |
Balance at December 31, 2017 | $ 7,333 |
Commitments, Contingencies an_3
Commitments, Contingencies and Guarantees - Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Minimum Rental Commitments, Capital | |||
2,019 | $ 21,983 | ||
2,020 | 11,283 | ||
2,021 | 1,651 | ||
Total minimum lease payments | 34,917 | ||
Minimum Rental Commitments, Operating | |||
2,019 | 32,755 | ||
2,020 | 30,473 | ||
2,021 | 25,564 | ||
2,022 | 22,710 | ||
2,023 | 21,456 | ||
Thereafter | 113,779 | ||
Total minimum lease payments | 246,737 | ||
Minimum Rental Commitments, Subleases | |||
2,019 | (8,979) | ||
2,020 | (9,324) | ||
2,021 | (8,844) | ||
2,022 | (8,552) | ||
2,023 | (8,695) | ||
Thereafter | (36,312) | ||
Total minimum lease payments | (80,706) | ||
Minimum Rental Commitments, Net Rental Commitments | |||
2,019 | 45,759 | ||
2,020 | 32,432 | ||
2,021 | 18,371 | ||
2,022 | 14,158 | ||
2,023 | 12,761 | ||
Thereafter | 77,467 | ||
Total minimum lease payments | 200,948 | ||
Operating lease expense, net of amortization expense related to landlord incentives | 12,700 | $ 13,100 | $ 2,400 |
Occupancy lease expense | 12,500 | 12,900 | 1,300 |
Communication equipment lease expense | $ 200 | $ 200 | $ 1,100 |
Commitments, Contingencies an_4
Commitments, Contingencies and Guarantees - Other Legal and Regulatory Matters (Details) € in Millions, $ in Millions | Dec. 31, 2018EUR (€) | Dec. 31, 2017USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2016USD ($) | Dec. 31, 2016EUR (€) |
Commitments and Contingencies Disclosure [Abstract] | |||||
Amount of fine | € 3 | $ 3.9 | € 3.3 | $ 5.4 | € 5 |
Capital Structure - Additional
Capital Structure - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2018classvote$ / sharesshares | Dec. 31, 2017$ / sharesshares | Dec. 31, 2016shares | |
Class of Stock [Line Items] | |||
Number of classes of common stock | class | 4 | ||
Non-voting common interest units outstanding (in shares) | shares | 8,760,755 | 12,301,067 | |
Number of non-voting common interest units forfeited or repurchased (in shares) | shares | 3,540,312 | 1,930,468 | 1,162,891 |
Class A common stock and Class C common stock | |||
Class of Stock [Line Items] | |||
Number of votes | vote | 1 | ||
Class D common stock | |||
Class of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | |
Class B common stock and Class D common stock | |||
Class of Stock [Line Items] | |||
Number of votes | vote | 10 |
Capital Structure - Amended and
Capital Structure - Amended and Restated 2015 Management Incentive Plan (Details) | Apr. 21, 2015shares |
2015 Management Incentive Plan | Class A | |
Class of Stock [Line Items] | |
Number of shares of stock authorized | 16,000,000 |
Capital Structure - Acquisition
Capital Structure - Acquisition of KCG (Details) - USD ($) $ in Thousands | Aug. 10, 2017 | Jul. 20, 2017 | May 31, 2018 | Dec. 31, 2017 |
Class of Stock [Line Items] | ||||
Aggregate purchase price | $ 735,974 | |||
Class A | ||||
Class of Stock [Line Items] | ||||
Number of shares of stock issued | 10,518,750 | |||
Class A | NIH Investment Agreement | ||||
Class of Stock [Line Items] | ||||
Number of shares of stock issued | 338,124 | |||
Aggregate purchase price | $ 5,200 | |||
KCG | NIH Investment Agreement | ||||
Class of Stock [Line Items] | ||||
Number of shares of stock issued | 39,725,979 | |||
Aggregate purchase price | $ 613,500 | |||
KCG | Class A | Aranda | ||||
Class of Stock [Line Items] | ||||
Number of shares of stock issued | 6,346,155 | |||
Aggregate purchase price | $ 99,000 | |||
KCG | Class A | NIH Investment Agreement | ||||
Class of Stock [Line Items] | ||||
Number of shares of stock issued | 338,124 | |||
Aggregate purchase price | $ 5,200 | |||
KCG | Class A | Temasek Investment | ||||
Class of Stock [Line Items] | ||||
Number of shares of stock issued | 1,666,666 | |||
Aggregate purchase price | $ 26,000 |
Capital Structure - Share Repur
Capital Structure - Share Repurchase Program (Details) - USD ($) shares in Millions | Jul. 27, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 28, 2018 |
Class of Stock [Line Items] | ||||||
Authorized repurchase amount | $ 100,000,000 | |||||
Increase in authorized repurchase amount | $ 50,000,000 | |||||
Value of shares repurchased | $ 66,218,000 | $ 2,683,000 | $ 4,539,000 | |||
Class A | ||||||
Class of Stock [Line Items] | ||||||
Authorized repurchase amount | $ 50,000,000 | |||||
Number of shares repurchased | 2.6 | |||||
Value of shares repurchased | $ 65,900,000 | |||||
Remaining capacity for future purchases | $ 34,100,000 | $ 34,100,000 |
Capital Structure - Secondary O
Capital Structure - Secondary Offerings (Details) - Class A | 1 Months Ended |
May 31, 2018$ / sharesshares | |
Class of Stock [Line Items] | |
Number of shares issued | 17,250,000 |
Purchase price per share (in dollars per share) | $ / shares | $ 27.16 |
Offering price per share (in dollars per share) | $ / shares | $ 28 |
Number of shares of stock issued | 10,518,750 |
Selling Stockholders | |
Class of Stock [Line Items] | |
Number of shares of stock issued | 6,731,250 |
Number of shares issued upon exercise of stock options | 2,081,250 |
Capital Structure - Employee Ex
Capital Structure - Employee Exchanges (Details) | 12 Months Ended | |
Dec. 31, 2018shares | Dec. 31, 2017shares | |
Virtu Financial | ||
Class of Stock [Line Items] | ||
Ownership interest (as a percent) | 56.70% | |
VFH | ||
Class of Stock [Line Items] | ||
Common stock exchange ratio | 1 | |
VFH | Class A | ||
Class of Stock [Line Items] | ||
Issuance of common stock in connection with employee exchanges (in shares) | 4,089,598 | 1,355,763 |
Share-based Compensation - Narr
Share-based Compensation - Narrative (Details) - USD ($) $ in Millions | Apr. 21, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expense recognized | $ 6.4 | |||
Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expense recognized | $ 11.2 | $ 11 | ||
Granted (in shares) | 594,536 | 19,719 | 656,019 | |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized share-based compensation expense | $ 21.3 | $ 14.3 | ||
Weighted average period for compensation expense expected to be recognized | 1 year 8 months 12 days | 1 year 6 months | ||
RSUs | Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expense recognized | $ 17.9 | $ 9.9 | $ 6.3 | |
2015 Management Incentive Plan | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Expiration period | 10 years | |||
Expense recognized | 5.8 | 5.2 | $ 5.6 | |
Unrecognized share-based compensation expense | $ 1.6 | $ 7.5 | ||
Weighted average period for compensation expense expected to be recognized | 3 months 19 days | 1 year 3 months 18 days | ||
2015 Management Incentive Plan | RSUs | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years |
Share-based Compensation - Summ
Share-based Compensation - Summary of Activity in Options (Details) - 2015 Management Incentive Plan - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Options | |||
Outstanding at beginning of period (in shares) | 7,738,000 | 8,234,000 | |
Exercised (in shares) | (4,168,100) | ||
Forfeited or expired (in shares) | (83,750) | (496,000) | |
Outstanding at end of period (in shares) | 3,486,150 | 7,738,000 | 8,234,000 |
Weighted Average Exercise Price Per Share | |||
Outstanding at beginning of period (in dollars per share) | $ 19 | $ 19 | |
Exercised (in dollars per share) | 19 | ||
Outstanding at end of period (in dollars per share) | $ 19 | $ 19 | $ 19 |
Weighted Average Remaining Contractual Life | |||
Weighted Average Remaining Life | 6 years 3 months 19 days | 7 years 3 months 15 days | 8 years 3 months 15 days |
Options Exercisable, Number of Options (in shares) | 1,660,400 | 3,869,000 | 2,058,500 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 19 | $ 19 | $ 19 |
Share-based Compensation - Su_2
Share-based Compensation - Summary of Activity in RSUs (Details) - 2015 Management Incentive Plan - RSUs - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | ||
Outstanding at beginning of period (in shares) | 853,047 | 1,573,441 |
Granted (in shares) | 1,265,899 | 64,402 |
Forfeited (in shares) | (127,493) | (258,250) |
Vested (in shares) | (612,531) | (526,546) |
Outstanding at end of period (in shares) | 1,378,922 | 853,047 |
Weighted Average Fair Value | ||
Outstanding at beginning of period (in dollars per share) | $ 17.94 | $ 18.28 |
Granted (in dollars per share) | 20.89 | 18.09 |
Forfeited (in dollars per share) | 18.30 | 18.40 |
Vested (in dollars per share) | 18.76 | 18.75 |
Outstanding at end of period (in dollars per share) | $ 20.03 | $ 17.94 |
Property, Equipment and Capit_3
Property, Equipment and Capitalized Software - Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Equipment and Capitalized Software | ||
Property, equipment and capitalized software, gross | $ 437,040 | $ 512,674 |
Less: Accumulated depreciation and amortization | (323,718) | (375,656) |
Total property, equipment and capitalized software, net | 113,322 | 137,018 |
Capitalized software costs | ||
Property, Equipment and Capitalized Software | ||
Property, equipment and capitalized software, gross | 108,220 | 94,915 |
Leasehold improvements | ||
Property, Equipment and Capitalized Software | ||
Property, equipment and capitalized software, gross | 67,995 | 93,624 |
Furniture and equipment | ||
Property, Equipment and Capitalized Software | ||
Property, equipment and capitalized software, gross | $ 260,825 | $ 324,135 |
Property, Equipment and Capit_4
Property, Equipment and Capitalized Software - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 48,400 | $ 36,800 | $ 19,600 |
Capitalized software development costs | 24,400 | 15,700 | 11,100 |
Amortization expense on capitalized software development costs | 20,400 | 10,100 | 10,100 |
Capitalized compensation charges | 40 | 90 | |
Compensation costs, amortization | $ 20 | $ 70 | $ 700 |
Regulatory Requirement - Narrat
Regulatory Requirement - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)broker_dealer | Dec. 31, 2017USD ($) | Nov. 03, 2017broker_dealer | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Regulatory capital | $ 1,000,000 | ||
Number of broker-dealer subsidiaries | broker_dealer | 3 | 3 | |
Virtu Financial Capital Markets LLC | |||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Regulatory capital | $ 9,457,000 | $ 8,308,000 | |
Minimum capital required to be maintained in connection with the operation of the Company's DMM business | 1,000,000 | $ 4,100,000 | |
Required amount under exchange rules | 1,000,000 | ||
Required amount under exchange rules for every 0.1% NYSE transaction dollar volume | $ 75,000 | ||
Percentage of NYSE transaction dollar volume | 0.10% |
Regulatory Requirement - Regula
Regulatory Requirement - Regulatory Capital and Capital Requirements (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Entity Information [Line Items] | ||
Regulatory Capital | $ 1,000,000 | |
Virtu Americas LLC | ||
Entity Information [Line Items] | ||
Regulatory Capital | 381,211,000 | $ 379,875,000 |
Regulatory Capital Requirement | 2,035,000 | 1,000,000 |
Excess Regulatory Capital | 379,176,000 | 378,875,000 |
Virtu Financial BD LLC | ||
Entity Information [Line Items] | ||
Regulatory Capital | 133,850,000 | 40,683,000 |
Regulatory Capital Requirement | 1,000,000 | 1,000,000 |
Excess Regulatory Capital | 132,850,000 | 39,683,000 |
Virtu Financial Capital Markets LLC | ||
Entity Information [Line Items] | ||
Regulatory Capital | 9,457,000 | 8,308,000 |
Regulatory Capital Requirement | 1,000,000 | 5,114,000 |
Excess Regulatory Capital | $ 8,457,000 | $ 3,194,000 |
Geographic Information and Bu_3
Geographic Information and Business Segments - Revenues by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers [Line Items] | |||
Total revenue | $ 1,878,718 | $ 1,027,982 | $ 702,272 |
United States | |||
Revenues from External Customers [Line Items] | |||
Total revenue | 1,644,641 | 791,044 | 455,418 |
Ireland | |||
Revenues from External Customers [Line Items] | |||
Total revenue | 81,531 | 97,637 | 139,642 |
United Kingdom | |||
Revenues from External Customers [Line Items] | |||
Total revenue | 15,681 | 21,143 | 0 |
Singapore | |||
Revenues from External Customers [Line Items] | |||
Total revenue | 136,161 | 113,891 | 106,813 |
Others | |||
Revenues from External Customers [Line Items] | |||
Total revenue | $ 704 | $ 4,267 | $ 399 |
Geographic Information and Bu_4
Geographic Information and Business Segments - Segments (Details) $ in Thousands | Jul. 19, 2017businesssegment | Sep. 30, 2017segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Segment Reporting Information [Line Items] | |||||
Number of businesses managed and operated | business | 1 | ||||
Number of reportable segments | segment | 1 | ||||
Number of operating segments | segment | 1 | 2 | |||
Number of non-operating segments | segment | 1 | ||||
Total revenue | $ 1,878,718 | $ 1,027,982 | $ 702,272 | ||
Income (loss) before income taxes and noncontrolling interest | 696,363 | 113,164 | 179,591 | ||
Market Making | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 1,384,475 | 836,707 | 691,884 | ||
Income (loss) before income taxes and noncontrolling interest | 422,648 | 74,633 | 176,145 | ||
Execution Services | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 496,333 | 99,135 | 10,352 | ||
Income (loss) before income taxes and noncontrolling interest | 325,043 | (12,519) | 4,403 | ||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | (2,090) | 92,140 | 36 | ||
Income (loss) before income taxes and noncontrolling interest | $ (51,328) | $ 51,050 | $ (957) |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)joint_venture | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | ||||
Payable to affiliates | $ 3,000 | $ 100 | ||
Intangible assets | 83,989 | 111,224 | ||
Leases | ||||
Related Party Transaction [Line Items] | ||||
Intangible assets | 1,403 | |||
SBI | ||||
Related Party Transaction [Line Items] | ||||
Payments to related party | 9,500 | 6,000 | $ 2,200 | |
Level 3 | ||||
Related Party Transaction [Line Items] | ||||
Payments for purchases | 1,500 | 2,500 | 2,400 | |
Dell | ||||
Related Party Transaction [Line Items] | ||||
Payments for purchases | 800 | 2,500 | 2,700 | |
MarkIt | ||||
Related Party Transaction [Line Items] | ||||
Payments for purchases | 400 | |||
Two microwave communication network JVs | ||||
Related Party Transaction [Line Items] | ||||
Payments to related party | $ 20,000 | $ 8,300 | $ 600 | |
Number of microwave communication network JVs the Company makes payments to | joint_venture | 2 | |||
Joint Venture | Leases | ||||
Related Party Transaction [Line Items] | ||||
Intangible assets | $ 1,100 | |||
Proceeds from sale of assets to joint venture | $ 600 |
Parent Company - Condensed Stat
Parent Company - Condensed Statements of Financial Condition (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2018 | May 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | |||||
Deferred tax assets | $ 200,359 | $ 125,760 | |||
Other assets | 254,149 | 357,352 | |||
Total assets | 7,380,978 | 7,320,006 | |||
Liabilities | |||||
Accounts payable and accrued expenses and other liabilities | 294,975 | 358,825 | |||
Tax receivable agreement obligations | 214,403 | $ 79,700 | 147,040 | ||
Total liabilities | 5,886,279 | 6,168,428 | |||
Virtu Financial Inc. Stockholders' equity | |||||
Treasury stock, at cost, 616,923 and 453,066 shares at December 31, 2017 and 2016, respectively | (55,005) | (11,041) | |||
Additional paid-in capital | 1,010,468 | 900,746 | |||
Accumulated deficit | 96,513 | (62,129) | |||
Accumulated other comprehensive income (loss) | (82) | 2,991 | |||
Total Virtu Financial Inc. stockholders' equity | 1,051,896 | 830,569 | |||
Total liabilities and equity | $ 7,380,978 | $ 7,320,006 | |||
Treasury stock, shares (in shares) | 2,178,771 | 616,923 | |||
Class A | |||||
Virtu Financial Inc. Stockholders' equity | |||||
Common stock | $ 1 | $ 1 | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |||
Common stock, shares issued (in shares) | 108,955,048 | 90,415,532 | |||
Common stock, shares outstanding (in shares) | 106,776,277 | 89,798,609 | |||
Class B | |||||
Virtu Financial Inc. Stockholders' equity | |||||
Common stock | $ 0 | $ 0 | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||
Common stock, shares authorized (in shares) | 175,000,000 | 175,000,000 | |||
Common stock, shares issued (in shares) | 0 | 0 | |||
Common stock, shares outstanding (in shares) | 0 | 0 | |||
Class C | |||||
Virtu Financial Inc. Stockholders' equity | |||||
Common stock | $ 0 | $ 0 | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||
Common stock, shares authorized (in shares) | 90,000,000 | 90,000,000 | |||
Common stock, shares issued (in shares) | 13,749,886 | 17,880,239 | |||
Common stock, shares outstanding (in shares) | 13,749,886 | 17,880,239 | |||
Class D | |||||
Virtu Financial Inc. Stockholders' equity | |||||
Common stock | $ 1 | $ 1 | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||
Common stock, shares authorized (in shares) | 175,000,000 | 175,000,000 | |||
Common stock, shares issued (in shares) | 69,091,740 | 79,610,490 | |||
Common stock, shares outstanding (in shares) | 69,091,740 | 79,610,490 | |||
VFH | |||||
Assets | |||||
Cash | $ 3,841 | $ 60,193 | $ 17,149 | $ 187 | |
Deferred tax assets | 189,627 | 124,631 | |||
Investment in subsidiary | 1,730,867 | 1,549,162 | |||
Other assets | 35,998 | 10,731 | |||
Total assets | 1,960,333 | 1,744,717 | |||
Liabilities | |||||
Payable to affiliate | 694,028 | 767,101 | |||
Accounts payable and accrued expenses and other liabilities | 6 | 7 | |||
Tax receivable agreement obligations | 214,403 | 147,040 | |||
Total liabilities | 908,437 | 914,148 | |||
Virtu Financial Inc. Stockholders' equity | |||||
Treasury stock, at cost, 616,923 and 453,066 shares at December 31, 2017 and 2016, respectively | (55,005) | (11,041) | |||
Additional paid-in capital | 1,010,468 | 900,746 | |||
Accumulated deficit | 96,513 | (62,129) | |||
Accumulated other comprehensive income (loss) | (82) | 2,991 | |||
Total Virtu Financial Inc. stockholders' equity | 1,051,896 | 830,569 | |||
Total liabilities and equity | $ 1,960,333 | $ 1,744,717 | |||
Treasury stock, shares (in shares) | 616,923 | 453,066 | |||
VFH | Class A-1 | |||||
Virtu Financial Inc. Stockholders' equity | |||||
Common stock | $ 0 | $ 0 | |||
Common stock, shares authorized (in shares) | 0 | 0 | |||
Common stock, shares issued (in shares) | 0 | 0 | |||
Common stock, shares outstanding (in shares) | 0 | 0 | |||
VFH | Class A-2 | |||||
Virtu Financial Inc. Stockholders' equity | |||||
Common stock | $ 0 | $ 0 | |||
Common stock, shares authorized (in shares) | 0 | 0 | |||
Common stock, shares issued (in shares) | 0 | 0 | |||
Common stock, shares outstanding (in shares) | 0 | 0 | |||
VFH | Class A | |||||
Virtu Financial Inc. Stockholders' equity | |||||
Common stock | $ 1 | $ 1 | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |||
Common stock, shares issued (in shares) | 90,415,532 | 40,436,580 | |||
Common stock, shares outstanding (in shares) | 89,798,609 | 39,983,514 | |||
VFH | Class B | |||||
Virtu Financial Inc. Stockholders' equity | |||||
Common stock | $ 0 | $ 0 | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||
Common stock, shares authorized (in shares) | 175,000,000 | 175,000,000 | |||
Common stock, shares issued (in shares) | 0 | 0 | |||
Common stock, shares outstanding (in shares) | 0 | 0 | |||
VFH | Class C | |||||
Virtu Financial Inc. Stockholders' equity | |||||
Common stock | $ 0 | $ 0 | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||
Common stock, shares authorized (in shares) | 90,000,000 | 90,000,000 | |||
Common stock, shares issued (in shares) | 17,880,239 | 19,810,707 | |||
Common stock, shares outstanding (in shares) | 17,880,239 | 19,810,707 | |||
VFH | Class D | |||||
Virtu Financial Inc. Stockholders' equity | |||||
Common stock | $ 1 | $ 1 | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||
Common stock, shares authorized (in shares) | 175,000,000 | 175,000,000 | |||
Common stock, shares issued (in shares) | 79,610,490 | 79,610,490 | |||
Common stock, shares outstanding (in shares) | 79,610,490 | 79,610,490 |
Parent Company - Condensed St_2
Parent Company - Condensed Statements of Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Total revenue | $ 1,878,718 | $ 1,027,982 | $ 702,272 |
Expenses | |||
Operations and administrative | 64,749 | 61,466 | 23,358 |
Net income | 620,192 | 18,898 | 158,340 |
Net income attributable to common stockholders | 289,441 | 2,939 | 32,980 |
Other comprehensive income (loss): | |||
Foreign exchange translation adjustment, net of taxes | (5,127) | 9,117 | (1,165) |
Comprehensive income attributable to common stockholders | 286,368 | 6,182 | 32,629 |
VFH | |||
Revenues: | |||
Total revenue | 0 | 86,599 | 0 |
Expenses | |||
Operations and administrative | 1 | 181 | 198 |
Income (loss) before equity in income of subsidiary | (1) | 86,418 | (198) |
Equity in income of subsidiary, net of tax | 620,193 | (83,479) | 33,178 |
Net income | 620,192 | 2,939 | 32,980 |
Net income attributable to common stockholders | 620,192 | 2,939 | 32,980 |
Other comprehensive income (loss): | |||
Foreign exchange translation adjustment, net of taxes | (3,073) | 3,243 | (351) |
Comprehensive income attributable to common stockholders | 617,119 | 6,182 | 32,629 |
Other | |||
Revenues: | |||
Total revenue | 340,189 | 95,045 | 36 |
Other | VFH | |||
Revenues: | |||
Total revenue | $ 0 | $ 86,599 | $ 0 |
Parent Company - Condensed St_3
Parent Company - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||
Net income | $ 620,192 | $ 18,898 | $ 158,340 |
Tax receivable agreement obligation reduction | 0 | (86,599) | 0 |
Deferred taxes | 4,131 | 102,973 | 13,313 |
Other | 418 | (4,577) | (1,070) |
Net cash provided by operating activities | 714,595 | 290,574 | 239,599 |
Cash flows from investing activities | |||
Acquisition of KCG, net of cash acquired, described in Note 3 | 0 | (799,632) | 0 |
Net cash provided by (used in) investing activities | 329,174 | (838,016) | (59,017) |
Cash flows from financing activities | |||
Distribution from Virtu Financial to non-controlling interest | (206,903) | (89,563) | (162,969) |
Dividends | (100,329) | (63,814) | (37,759) |
Purchase of treasury stock | (66,218) | (2,683) | (4,539) |
Tax receivable agreement obligations | (12,359) | (7,045) | 0 |
Issuance of common stock, net of offering costs | 0 | 735,974 | 0 |
Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with secondary offering | 0 | 0 | (17,383) |
Net cash provided by (used in) financing activities | (835,482) | 889,797 | (161,237) |
Supplementary disclosure of cash flow information | |||
Taxes paid | 93,991 | 5,976 | 16,175 |
Class C | |||
Cash flows from financing activities | |||
Purchase of treasury stock | (8,216) | 0 | (98) |
VFH | |||
Cash flows from operating activities | |||
Net income | 620,192 | 2,939 | 32,980 |
Equity in income of subsidiary, net of tax | (305,936) | (513,601) | 157,975 |
Tax receivable agreement obligation reduction | 79,722 | (86,599) | 0 |
Deferred taxes | (64,996) | 102,973 | 13,197 |
Other | 0 | (8,500) | 0 |
Changes in operating assets and liabilities: | (25,268) | (8,832) | (4,012) |
Net cash provided by operating activities | 303,714 | (511,620) | 200,140 |
Cash flows from investing activities | |||
Acquisition of KCG, net of cash acquired, described in Note 3 | 0 | (23,908) | 0 |
Investments in subsidiaries, equity basis | 34,909 | 16,846 | 24,893 |
Net cash provided by (used in) investing activities | 34,909 | (7,062) | 24,893 |
Cash flows from financing activities | |||
Distribution from Virtu Financial to non-controlling interest | (206,903) | (89,563) | (162,969) |
Dividends | (100,329) | (63,814) | (37,759) |
Payments on repurchase of non-voting common interest | 0 | (11,143) | (2,000) |
Purchase of treasury stock | (66,218) | (2,683) | (4,539) |
Tax receivable agreement obligations | (12,359) | (7,045) | 0 |
Issuance of common stock, net of offering costs | 0 | 735,974 | 0 |
Issuance of common stock in connection with secondary offering, net of offering costs | (950) | 0 | 16,677 |
Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with secondary offering | 0 | 0 | (17,383) |
Net cash provided by (used in) financing activities | (394,975) | 561,726 | (208,071) |
Net increase (decrease) in Cash | (56,352) | 43,044 | 16,962 |
Cash, beginning of period | 60,193 | 17,149 | 187 |
Cash, end of period | 3,841 | 60,193 | 17,149 |
Supplementary disclosure of cash flow information | |||
Taxes paid | 0 | 133 | 8,813 |
Non-cash financing activities | |||
Tax receivable agreement described in Note 6 | 0 | 1,534 | 0 |
Secondary offerings described in Note 16 | 0 | 0 | 1,350 |
VFH | Class C | |||
Cash flows from financing activities | |||
Repurchase of stock | $ (8,216) | $ 0 | $ (98) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) | Mar. 01, 2019 | Feb. 07, 2019 | Mar. 01, 2019 |
Revolving credit facility | |||
Subsequent Events [Line Items] | |||
Maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | |
Letter of credit | |||
Subsequent Events [Line Items] | |||
Maximum borrowing capacity | 5,000,000 | 5,000,000 | |
Swingline subfacility | |||
Subsequent Events [Line Items] | |||
Maximum borrowing capacity | 5,000,000 | 5,000,000 | |
First lien term loan | |||
Subsequent Events [Line Items] | |||
Face amount | 1,500,000,000 | $ 1,500,000,000 | |
Proceeds from borrowings | $ 404,500,000 | ||
ITG | |||
Subsequent Events [Line Items] | |||
Purchase price (in dollars per share) | $ 30.30 | $ 30.30 | |
Purchase price | $ 1,000,000,000 | $ 1,000,000,000 | |
ITG | First lien term loan | |||
Subsequent Events [Line Items] | |||
Proceeds from borrowings | $ 1,095,000,000 | ||
Class A | |||
Subsequent Events [Line Items] | |||
Dividends declared (in dollars per share) | $ 0.24 |