Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 25, 2016 | Jun. 30, 2015 | |
Entity Registrant Name | Virtu Financial, Inc. | ||
Entity Central Index Key | 1,592,386 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 735.6 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Class A | |||
Entity Common Stock, Shares Outstanding | 38,210,209 | ||
Class C | |||
Entity Common Stock, Shares Outstanding | 20,976,598 | ||
Class D | |||
Entity Common Stock, Shares Outstanding | 79,610,490 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Cash and cash equivalents | $ 163,235 | $ 75,864 |
Securities borrowed | 453,296 | 484,934 |
Securities purchased under agreements to resell | 14,981 | 31,463 |
Receivables from broker dealers and clearing organizations | 476,536 | 387,652 |
Trading assets, at fair value: | ||
Financial instruments owned | 1,038,039 | 1,307,933 |
Financial instruments owned and pledged | 259,175 | 236,375 |
Property, equipment and capitalized software (net of accumulated depreciation of $98,595 and $84,579 as of December 31, 2015 and 2014, respectively) | 37,501 | 44,644 |
Goodwill | 715,379 | 715,379 |
Intangibles (net of accumulated amortization) | 1,203 | 1,414 |
Deferred tax asset | 193,740 | 977 |
Other assets ($5,984 and $8,205, at fair value, as of December 31, 2015 and 2014, respectively) | 38,845 | 32,823 |
Total assets | 3,391,930 | 3,319,458 |
Liabilities | ||
Short-term borrowings | 45,000 | |
Securities loaned | 524,603 | 497,862 |
Securities sold under agreements to repurchase | 2,006 | |
Payables to broker dealers and clearing organizations | 486,604 | 686,203 |
Trading liabilities, at fair value: | ||
Financial instruments sold, not yet purchased | 979,090 | 1,037,634 |
Tax receivable agreement obligations | 218,399 | |
Accounts payable and accrued expenses and other liabilities | 86,775 | 93,331 |
Senior secured credit facility | 493,589 | 495,724 |
Total liabilities | 2,834,060 | 2,812,760 |
Stockholders' / Members' Equity | ||
Treasury stock, at cost, 169,649 and 0 shares at December 31, 2015 and 2014, respectively | (3,819) | |
Additional paid-in capital | 130,902 | |
Retained Earnings (Accumulated deficit) | 3,525 | (91,383) |
Accumulated other comprehensive income (loss) | 99 | (3,705) |
Total stockholders' / members' equity | 130,708 | |
Total stockholders' / members' equity | 212,265 | |
Noncontrolling interest | 427,162 | |
Total equity | 557,870 | 212,265 |
Total liabilities, redeemable membership interest and equity | $ 3,391,930 | $ 3,319,458 |
Class B | ||
Stockholders' / Members' Equity | ||
Common stock value | ||
Class C | ||
Stockholders' / Members' Equity | ||
Common stock value | ||
Class D | ||
Stockholders' / Members' Equity | ||
Common stock value | $ 1 | |
Class A-1 | ||
Redeemable membership interest | ||
Redeemable membership interest | $ 294,433 | |
Stockholders' / Members' Equity | ||
Membership interests | 19,648 | |
Class A-2 | ||
Stockholders' / Members' Equity | ||
Membership interests | $ 287,705 |
Consolidated Statements of Fin3
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Apr. 16, 2015 | Dec. 31, 2014 |
Accumulated depreciation (in dollars) | $ 98,595 | $ 84,579 | |
Other assets, fair value (in dollars) | $ 5,984 | $ 8,205 | |
Treasury stock shares | 169,649 | 0 | |
Class A | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0 |
Common stock shares authorized | 1,000,000,000 | 0 | |
Common stock shares issued | 38,379,858 | 0 | |
Common stock shares outstanding | 38,210,209 | 0 | |
Class B | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0 | |
Common stock shares authorized | 175,000,000 | 0 | |
Common stock shares issued | 0 | 0 | |
Common stock shares outstanding | 0 | 0 | |
Class C | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0 | |
Common stock shares authorized | 90,000,000 | 0 | |
Common stock shares issued | 20,976,598 | 0 | |
Common stock shares outstanding | 20,976,598 | 0 | |
Class D | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0 | |
Common stock shares authorized | 175,000,000 | 0 | |
Common stock shares issued | 79,610,490 | 0 | |
Common stock shares outstanding | 79,610,490 | 0 | |
Class A-1 | |||
Membership interests, authorized | 0 | 1,964,826 | |
Membership interests issued | 0 | 1,964,826 | |
Membership interests outstanding | 0 | 1,964,826 | |
Class A-2 | |||
Membership interests, authorized | 0 | 101,381,332 | |
Membership interests issued | 0 | 101,381,332 | |
Membership interests outstanding | 0 | 99,855,666 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | |||
Trading income, net | $ 757,455 | $ 685,150 | $ 623,733 |
Interest and dividends income | 28,136 | 27,923 | 31,090 |
Technology services | 10,622 | 9,980 | 9,682 |
Total revenue | 796,213 | 723,053 | 664,505 |
Operating Expenses: | |||
Brokerage, exchange and clearance fees, net | 232,469 | 230,965 | 195,146 |
Communication and data processing | 68,647 | 68,847 | 64,689 |
Employee compensation and payroll taxes | 88,026 | 84,531 | 78,353 |
Interest and dividends expense | 52,423 | 47,083 | 45,196 |
Operations and administrative | 25,991 | 21,923 | 27,215 |
Depreciation and amortization | 33,629 | 30,441 | 23,922 |
Amortization of purchased intangibles and acquired capitalized software | 211 | 211 | 1,011 |
Acquisition related retention bonus | 2,639 | 6,705 | |
Debt issue cost related to debt refinancing | 10,022 | ||
Initial public offering fees and expenses | 8,961 | ||
Transaction advisory fees and expenses | 3,000 | ||
Reserve for legal matter | 5,440 | ||
Charges related to share-based compensation at IPO | 44,194 | ||
Financing interest expense on senior secured credit facility | 29,254 | 30,894 | 24,646 |
Total operating expenses | 580,284 | 529,495 | 476,905 |
Income before income taxes and noncontrolling interest | 215,929 | 193,558 | 187,600 |
Provision for income taxes | 18,439 | 3,501 | 5,397 |
Net income | 197,490 | 190,057 | 182,203 |
Noncontrolling interest | (176,603) | ||
Net income available for common stockholders | $ 20,887 | ||
Earnings per share | |||
Basic (in dollars per share) | $ 0.60 | ||
Diluted (in dollars per share) | $ 0.59 | ||
Weighted average common shares outstanding | |||
Basic (in shares) | 34,964,312 | ||
Diluted (in shares) | 35,339,585 | ||
Comprehensive income | |||
Net income | $ 197,490 | 190,057 | 182,203 |
Other comprehensive income (loss) | |||
Foreign exchange translation adjustment, net of taxes | (4,255) | (5,032) | 1,382 |
Comprehensive income | 193,235 | $ 185,025 | $ 183,585 |
Less: Comprehensive income attributable to non-controlling interests | (172,249) | ||
Comprehensive income attributable to common stockholders | $ 20,986 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) | Common StockClass A | Common StockClass C | Common StockClass D | Treasury Stock | Additional paid-in Capital | Capital UnitsClass A-1 | Capital UnitsClass A-2 | Retained Earnings / (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Stockholders'/ Members' Equity | Noncontrolling Interest | Class A | Class C | Class D | Class A-1 | Class A-2 | Total |
Balance at Dec. 31, 2012 | $ 19,648,000 | $ 488,989,000 | $ (68,347,000) | $ (55,000) | $ 440,235,000 | $ 440,235,000 | |||||||||||
Balance (in shares) at Dec. 31, 2012 | 1,964,826 | 97,323,850 | |||||||||||||||
Balance for Redeemable Interest at Dec. 31, 2012 | $ 250,000,000 | ||||||||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||||||
Share based compensation | $ 13,441,000 | 13,441,000 | 13,441,000 | ||||||||||||||
Share based compensation (in shares) | 2,223,814 | ||||||||||||||||
Repurchase of interests | $ (573,000) | (573,000) | (573,000) | ||||||||||||||
Repurchase of interests (in shares) | (88,319) | ||||||||||||||||
Distribution to members / distributions to shareholders | $ (245,517,000) | (187,883,000) | (433,400,000) | (433,400,000) | |||||||||||||
Net income | 182,203,000 | 182,203,000 | 182,203,000 | ||||||||||||||
Foreign exchange translation adjustment | 1,382,000 | 1,382,000 | 1,382,000 | ||||||||||||||
Balance at Dec. 31, 2013 | $ 19,648,000 | $ 256,340,000 | (74,027,000) | 1,327,000 | 203,288,000 | 203,288,000 | |||||||||||
Balance (in shares) at Dec. 31, 2013 | 1,964,826 | 99,459,345 | |||||||||||||||
Balance for Redeemable Interest at Dec. 31, 2013 | $ 250,000,000 | ||||||||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||||||
Share based compensation | $ 15,953,000 | 15,953,000 | 15,953,000 | ||||||||||||||
Share based compensation (in shares) | 1,992,556 | ||||||||||||||||
Temasek transaction described in Note 13 | 44,433,000 | $ 17,707,000 | (62,140,000) | (44,433,000) | (44,433,000) | ||||||||||||
Repurchase of interests | $ (2,295,000) | (4,621,000) | (6,916,000) | (6,916,000) | |||||||||||||
Repurchase of interests (in shares) | (1,596,235) | ||||||||||||||||
Distribution to members / distributions to shareholders | (140,652,000) | (140,652,000) | (140,652,000) | ||||||||||||||
Net income | 190,057,000 | 190,057,000 | 190,057,000 | ||||||||||||||
Foreign exchange translation adjustment | (5,032,000) | (5,032,000) | (5,032,000) | ||||||||||||||
Balance at Dec. 31, 2014 | $ 19,648,000 | $ 287,705,000 | (91,383,000) | (3,705,000) | 212,265,000 | 212,265,000 | |||||||||||
Balance (in shares) at Dec. 31, 2014 | 1,964,826 | 99,855,666 | 1,964,826 | 99,855,666 | |||||||||||||
Balance at Dec. 31, 2014 | $ 212,265,000 | ||||||||||||||||
Balance (in shares) at Dec. 31, 2014 | 0 | 0 | 0 | ||||||||||||||
Treasury stock (in shares) at Dec. 31, 2014 | 0 | ||||||||||||||||
Balance for Redeemable Interest at Dec. 31, 2014 | $ 294,433,000 | $ 294,433,000 | |||||||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||||||
Share based compensation | $ 438,000 | 438,000 | $ 438,000 | ||||||||||||||
Share based compensation (in shares) | 6,418 | ||||||||||||||||
Repurchase of interests | $ (97,000) | (97,000) | (97,000) | ||||||||||||||
Repurchase of interests (in shares) | (13,495) | ||||||||||||||||
Distribution to members / distributions to shareholders | (130,000,000) | (130,000,000) | (130,000,000) | ||||||||||||||
Net income | 83,147,000 | 83,147,000 | 83,147,000 | ||||||||||||||
Foreign exchange translation adjustment | (4,633,000) | (4,633,000) | (4,633,000) | ||||||||||||||
Reorganization of equity structure | $ 1,000 | $ 63,261,000 | $ (19,648,000) | $ (288,046,000) | 138,236,000 | 8,338,000 | (97,858,000) | $ 392,291,000 | 294,433,000 | ||||||||
Reorganization of equity structure (in shares) | 18,763,664 | 36,746,041 | 79,610,490 | ||||||||||||||
Reorganization of equity structure (in shares) | (1,964,826) | (99,848,589) | |||||||||||||||
Reorganization of equity structure - Redeemable Interest | $ (294,433,000) | ||||||||||||||||
Balance at Apr. 15, 2015 | $ 1,000 | 63,261,000 | 63,262,000 | 392,291,000 | 455,553,000 | ||||||||||||
Balance (in shares) at Apr. 15, 2015 | 18,763,664 | 36,746,041 | 79,610,490 | ||||||||||||||
Balance at Dec. 31, 2014 | $ 19,648,000 | $ 287,705,000 | (91,383,000) | (3,705,000) | 212,265,000 | 212,265,000 | |||||||||||
Balance (in shares) at Dec. 31, 2014 | 1,964,826 | 99,855,666 | 1,964,826 | 99,855,666 | |||||||||||||
Balance at Dec. 31, 2014 | $ 212,265,000 | ||||||||||||||||
Balance (in shares) at Dec. 31, 2014 | 0 | 0 | 0 | ||||||||||||||
Treasury stock (in shares) at Dec. 31, 2014 | 0 | ||||||||||||||||
Balance for Redeemable Interest at Dec. 31, 2014 | $ 294,433,000 | $ 294,433,000 | |||||||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||||||
Net income | $ 197,490,000 | ||||||||||||||||
Balance (in shares) at Dec. 31, 2015 | 0 | 0 | |||||||||||||||
Balance at Dec. 31, 2015 | 130,708,000 | ||||||||||||||||
Balance at Dec. 31, 2015 | $ 1,000 | 130,902,000 | 3,525,000 | 99,000 | 130,708,000 | 427,162,000 | 557,870,000 | ||||||||||
Balance (in shares) at Dec. 31, 2015 | 38,379,858 | 20,976,598 | 79,610,490 | 38,210,209 | 20,976,598 | 79,610,490 | |||||||||||
Treasury stock at Dec. 31, 2015 | $ (3,819,000) | $ (3,819,000) | |||||||||||||||
Treasury stock (in shares) at Dec. 31, 2015 | (169,649) | (169,649) | |||||||||||||||
Balance at Apr. 15, 2015 | $ 1,000 | 63,261,000 | 63,262,000 | 392,291,000 | $ 455,553,000 | ||||||||||||
Balance (in shares) at Apr. 15, 2015 | 18,763,664 | 36,746,041 | 79,610,490 | ||||||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||||||
Share based compensation | $ 576,693 | 19,278,000 | 19,278,000 | 19,278,000 | |||||||||||||
Repurchase of interests | (277,153,000) | (277,153,000) | (277,153,000) | ||||||||||||||
Repurchase of interests (in shares) | (3,470,724) | (12,214,224) | |||||||||||||||
Distribution to members / distributions to shareholders | (17,362,000) | (17,362,000) | (17,362,000) | ||||||||||||||
Net income | 20,887,000 | 20,887,000 | 93,456,000 | 114,343,000 | |||||||||||||
Foreign exchange translation adjustment | 99,000 | 99,000 | 279,000 | 378,000 | |||||||||||||
Issuance of Common Stock, net of offering costs | 327,366,000 | 327,366,000 | 327,366,000 | ||||||||||||||
Issuance of Common Stock, net of offering costs (in shares) | 19,012,112 | ||||||||||||||||
Issuance of Common Stock in connection with secondary offering, net of offering costs | 7,782,000 | 7,782,000 | 7,782,000 | ||||||||||||||
Issuance of Common Stock in connection with secondary offering, net of offering costs (in shares) | 3,498,113 | ||||||||||||||||
Repurchase of units and corresponding number of common stock in connection with secondary offering | (8,805,000) | (8,805,000) | (8,805,000) | ||||||||||||||
Repurchase of units and corresponding number of common stock in connection with secondary offering (in shares) | (3,498,113) | ||||||||||||||||
Share based compensation vested upon IPO | 44,908,000 | 44,908,000 | 44,908,000 | ||||||||||||||
Adjustments for changes in proportionate ownership in Virtu Financial | (22,513,000) | (22,513,000) | 22,513,000 | ||||||||||||||
Issuance of tax receivable agreements | (23,041,000) | (23,041,000) | (23,041,000) | ||||||||||||||
Repurchase of common stock | (1,368,000) | (1,368,000) | (1,368,000) | ||||||||||||||
Repurchase of common stock (in shares) | (57,106) | ||||||||||||||||
Treasury stock purchases | $ (3,819,000) | (3,819,000) | (3,819,000) | ||||||||||||||
Treasury stock purchases (in shares) | (169,649) | ||||||||||||||||
Distribution from Virtu Financial to non-controlling interest | (81,377,000) | (81,377,000) | |||||||||||||||
Issuance of tax receivable agreements in connection with secondary offering | 1,187,000 | 1,187,000 | 1,187,000 | ||||||||||||||
Balance (in shares) at Dec. 31, 2015 | 0 | 0 | |||||||||||||||
Balance at Dec. 31, 2015 | 130,708,000 | ||||||||||||||||
Balance at Dec. 31, 2015 | $ 1,000 | $ 130,902,000 | $ 3,525,000 | $ 99,000 | $ 130,708,000 | $ 427,162,000 | 557,870,000 | ||||||||||
Balance (in shares) at Dec. 31, 2015 | 38,379,858 | 20,976,598 | 79,610,490 | 38,210,209 | 20,976,598 | 79,610,490 | |||||||||||
Treasury stock at Dec. 31, 2015 | $ (3,819,000) | $ (3,819,000) | |||||||||||||||
Treasury stock (in shares) at Dec. 31, 2015 | (169,649) | (169,649) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | |||
Net income | $ 197,490 | $ 190,057 | $ 182,203 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 33,629 | 30,441 | 23,922 |
Amortization of purchased intangibles and acquired capitalized software | 211 | 211 | 1,011 |
Debt issue cost related to debt refinancing | 10,022 | ||
Amortization of debt issuance costs and deferred financing fees | 1,755 | 1,334 | 3,861 |
Termination of office leases | 1,380 | ||
Share based compensation | 61,878 | 14,234 | 13,441 |
Reserve for legal matter | 5,440 | ||
Equipment writeoff | 559 | 378 | 1,968 |
Deferred taxes | 3,985 | ||
Other | 219 | (2,204) | 240 |
Changes in operating assets and liabilities: | |||
Securities borrowed | 31,638 | 223,169 | (278,784) |
Securities purchased under agreements to resell | 16,482 | 131,145 | (92,526) |
Receivables from broker dealers and clearing organizations | (88,884) | 40,089 | (61,598) |
Trading assets, at fair value | 247,094 | 259,105 | (290,848) |
Other assets ($5,984, $8,205 and $0, at fair value, as of December 31, 2015, 2014 and 2013, respectively) | (5,796) | 2,751 | (665) |
Securities loaned | 26,741 | (531,450) | 291,984 |
Securities sold under agreements to repurchase | (2,006) | (8,877) | (4,051) |
Payables to broker dealers and clearing organizations | (199,599) | 155,974 | 277,721 |
Trading liabilities, at fair value | (58,544) | (240,778) | 180,952 |
Accounts payable and accrued expenses and other liabilities | (13,392) | 7,120 | 508 |
Net cash provided by operating activities | 260,280 | 272,699 | 259,361 |
Cash flows from investing activities | |||
Development of capitalized software | (8,028) | (8,039) | (10,085) |
Acquisition of property and equipment | (16,271) | (28,120) | (21,931) |
Net cash used in investing activities | (24,299) | (36,159) | (32,016) |
Cash flows from financing activities | |||
Distribution to members through April 15, 2015 | (130,000) | (140,652) | (433,400) |
Distribution from Virtu Financial to non-controlling interest, after April 15, 2015 | (81,377) | ||
Dividends to Class A shareholders | (17,362) | ||
Proceeds from issuance | 327,366 | ||
Purchase of treasury stock | (3,819) | ||
Proceeds from short term borrowings | 45,000 | ||
Repayment of short term borrowings | 72,800 | 7,200 | |
Proceeds from senior secured credit facility | 253,792 | ||
Repayment of senior secured credit facility | (2,914) | (7,286) | (6,717) |
Debt issuance costs | (976) | (8,597) | |
Repurchase of Virtu Financial Units and corresponding number of Class A and C Common Stock | (277,153) | ||
Issuance of common stock in connection with secondary offering, net of offering costs | 7,782 | ||
Repurchase of Virtu Financial Units and corresponding number of Class A and C common stock in connection with secondary offering | (8,805) | ||
Net cash used in financing activities | (144,355) | (221,654) | (202,695) |
Effect of exchange rate changes on Cash and cash equivalents | (4,255) | (5,032) | 1,382 |
Net increase in Cash and cash equivalents | 87,371 | 9,854 | 26,032 |
Cash and cash equivalents, beginning of period | 75,864 | 66,010 | 39,978 |
Cash and cash equivalents, end of period | 163,235 | 75,864 | 66,010 |
Supplementary disclosure of cash flow information | |||
Cash paid for interest | 63,230 | 61,293 | 44,848 |
Cash paid for taxes | 12,875 | 3,764 | 4,559 |
Non-cash investing activities | |||
Compensation to developers subject to capitalization of software (of which $11,278, $1,719 and $1,633 were capitalized for the years ended December 31, 2015, 2014 and 2013, respectively) | 25,684 | 5,112 | 4,459 |
Non-cash financing activities | |||
Tax receivable agreement described in Note 4 | (21,854) | ||
Discount on issuance of senior secured credit facility | 2,925 | ||
Class A-2 | |||
Cash flows from financing activities | |||
Repurchase of interests | $ (2,097) | (916) | $ (573) |
Non-cash financing activities | |||
Repurchase of interests | (6,000) | ||
Class A-2 | Temasek Member | |||
Cash flows from financing activities | |||
Proceeds from issuance | 3,048 | ||
Repurchase of interests | $ (3,048) |
Consolidated Statements of Cas7
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Consolidated Statements of Cash Flows | |||
Fair value of other assets | $ 5,984 | $ 8,205 | $ 0 |
Compensation to software developers capitalized | $ 11,278 | $ 1,719 | $ 1,633 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Basis of Presentation | |
Organization and Basis of Presentation | 1. 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 VFI’s IPO. VFI is a Delaware corporation whose primary asset is its ownership of approximately 27.5% of the membership interests of Virtu Financial, which it acquired pursuant to and subsequent to certain reorganization transactions (the “Reorganization Transactions”) consummated in connection with its IPO. The Company 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. Virtu Financial was formed as a Delaware limited liability company on April 8, 2011 in connection with a corporate reorganization and acquisition of the outstanding equity interests of Madison Tyler Holdings, LLC (“MTH”), an electronic trading firm and market maker. In connection with the reorganization, the members of Virtu Financial’s predecessor entity, Virtu Financial Operating LLC (“VFO”), a Delaware limited liability company formed on March 19, 2008, exchanged their interests in VFO for interests in Virtu Financial and the members of MTH exchanged their interests in MTH for cash and/or interests in Virtu Financial. Virtu Financial’s principal subsidiaries include Virtu Financial BD LLC (“VFBD”), a self-clearing U.S. broker-dealer, Virtu Financial Capital Markets LLC (“VFCM”), a dual-clearing U.S. broker-dealer (which means it self-clears its proprietary transactions and introduces the accounts of its affiliates and non-affiliated broker-dealers on an agency basis to other clearing firms that clear and settle transactions in those accounts) and designated market maker on the New York Stock Exchange (“NYSE”) and the NYSE MKT (formerly NYSE Amex), Virtu Financial Global Markets LLC (“VFGM”), a U.S. trading entity focused on futures and currencies, Virtu Financial Ireland Limited (“VFIL”), formed in Ireland, Virtu Financial Asia Pty Ltd (“VFAP”), formed in Australia, and Virtu Financial Singapore Pte. Ltd. (“VFSing”), formed in Singapore, each of which are trading entities focused on asset classes in their respective geographic regions. The Company is a technology-enabled market maker and liquidity provider. The Company has developed a single, proprietary, multi-asset, multi-currency technology platform through which it provides quotations to buyers and sellers in equities, commodities, currencies, options, fixed income and other securities on numerous exchanges, markets and liquidity pools in numerous countries around the world. The Company is managed and operated as one business. Accordingly, the Company operates under one reportable segment. Basis of Presentation These consolidated financial statements are presented in U.S. dollars and 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 in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC” or the “Codification”). 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. Principles of Consolidation, including Noncontrolling Interests The consolidated financial statements include the accounts of VFI and its majority and wholly owned subsidiaries. As sole managing member of Virtu Financial, VFI exerts control over the Group’s operations. In accordance with ASC 810, Consolidation, the Company consolidates Virtu Financial and its subsidiaries’ consolidated financial statements and records the interests in Virtu Financial that VFI does not own as noncontrolling interests. All intercompany accounts and transactions have been eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The Company's consolidated financial statements are prepared in conformity with US GAAP, which require management to make estimates and assumptions regarding fair value measurements including trading assets and liabilities, goodwill and intangibles, compensation accruals, capitalized software, 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 computed in accordance with ASC 260, Earnings per Share. Basic EPS is computed by dividing the net income available for common stockholders by the weighted average number of shares outstanding for that 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, with no adjustments to net income available for common stockholders for dilutive potential common shares. Cash and Cash Equivalents The Company considers cash equivalents as highly liquid investments with original maturities of less than three months when acquired. The Company maintains cash in bank deposit accounts that, at times, may exceed federally insured limits. 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. These transactions are collateralized by cash 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 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. For these transactions, the interest received or paid by the Company 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 takes 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. Receivables from/Payables to Broker-dealers and Clearing Organizations 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. At December 31, 2015 and 2014, receivables from and payables to broker-dealers and clearing organizations primarily represent 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. The Company presents its balances, including outstanding principal balances on all credit facilities, on a net basis by counterparty within receivable from and payable to broker-dealers and clearing organizations when the criteria for offsetting are met. In the normal course of business, substantially all of the Company’s securities transactions, money balances, and security positions are transacted with several 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’s management monitors the financial condition of such brokers and does not anticipate any losses from these counterparties. Financial Instruments Owned Including Those Pledged as Collateral and Financial Instruments Sold, Not Yet Purchased The Company carries 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, on the consolidated statements of comprehensive income. Fair Value Measurements At December 31, 2015 and 2014, substantially all of Company’s financial assets and liabilities, except for long-term borrowings and certain exchange memberships, were carried at fair value based on published market prices and are marked to market daily or were short-term in nature and were carried at amounts that approximate fair value. The Company’s assets and liabilities have been categorized based upon a fair value hierarchy in accordance with ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value 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. ASC 820-10 requires 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; Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Transfers in or out are recognized based on the beginning fair value of the period in which they occurred. There were no transfers of financial instruments between levels during the years ended December 31, 2015, 2014, and 2013 . Derivative Instruments Derivative instruments used for trading purposes, including economic hedges of trading instruments, are carried at fair value. 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 derivative instruments are currencies which are actively traded. The Company presents its derivatives balances on a net basis by counterparty when the criteria for offsetting are met. Derivative instruments used for economic hedging purposes include futures, forward contracts, and options. Unrealized gains or losses on these derivative instruments are recognized currently in the consolidated statements of comprehensive income as trading income, net. The Company does not apply hedge accounting as defined in ASC 815, Derivatives and Hedging , and accordingly unrealized gains or losses on these derivative instruments are recognized currently in the consolidated statements of comprehensive income as trading income, net. Property and Equipment Property and equipment are carried at cost, less accumulated depreciation, except for the assets acquired in connection with the acquisition of MTH which were recorded at fair value on the date of acquisition. Depreciation is provided using the straight-line method over estimated useful lives of the underlying asset. 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. The useful lives of furniture, fixtures, equipment and leasehold improvements are as follows: Furniture, fixtures and equipment 3 to 7 years Leasehold improvements 7 years or length of lease term, whichever is shorter Capitalized Software The Company accounts for the costs of computer software developed or obtained for internal use in accordance with ASC 350-40, Internal-Use 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. The Company’s capitalized software development costs excluding the charges recognized in relation to the IPO disclosed below were approximately $10.1 million, $9.8 million, and $10.1 million for years ended December 31, 2015, 2014 and 2013 , respectively. The related amortization expense was approximately $9.6 million, $10.4 million, and $11.0 million for the years ended December 31, 2015, 2014, and 2013 , respectively. Additionally, in connection with charges related to share based compensation recognized upon the IPO (Note 13), the Company capitalized and amortized costs for employees in developing internal-use software, which were included within charges related to share based compensation at IPO in the consolidated statements of comprehensive income. The Company capitalized charges related to share based compensation at IPO of approximately $9.2 million for the year ended December 31, 2015. The related amortization expense was approximately $8.5 million for the year ended December 31, 2015. Capitalized software development costs and related accumulated amortization are included in property, equipment and capitalized software on the accompanying consolidated statements of financial condition and are amortized over a period of 1.4 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 our acquisitions. Goodwill is not amortized but is tested for impairment on an annual basis and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. The Company operates as one operating segment, which is our only reporting unit. The goodwill impairment test is a two-step process. The first step is used to identify potential impairment and compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test must be performed. The second step is used to measure the amount of impairment loss, if any, and compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount of reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss must be recognized in an amount equal to that excess. The Company tests goodwill for impairment on an annual basis on July 1 and on an interim basis when certain events or circumstances exist. In the impairment test as of July 1, 2015, the primary valuation method used to estimate the fair value of the Company’s reporting unit was the market capitalization approach based on the market price of its Class A Common Stock, which the management believes to be an appropriate indicator of its fair value. In the impairment test as of July 1, 2014, the primary valuation methods used to estimate the fair value of the Company’s reporting unit were the income and market approaches. In applying the income approach, projected available cash flows and the terminal value were discounted to present value to derive an indication of fair value of the business enterprise. The market approach compared the reporting unit to selected reasonably similar publicly-traded companies. Based on the results of the annual impairment tests performed, no goodwill impairment was recognized during the years ended December 31, 2015, 2014, and 2013 , respectively. Intangible Assets The Company amortizes finite-lived intangible assets over their estimated useful lives. Finite-lived intangible assets are tested for impairment annually or when impairment indicators are present, and if impaired, 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, in accordance with ASC 940-340, Financial Services — Broker and Dealers. Exchange stock includes shares that entitles the Company to certain trading privileges. The shares are marked to market with the corresponding gain or loss recorded in the consolidated statements of comprehensive income. The Company’s exchange memberships and stock are included in other assets on the consolidated statements of financial condition. Trading Income Trading income 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. 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 the accrual basis. Technology Services Technology services revenues consist of fees paid by third parties for licensing of our proprietary risk management and trading infrastructure technology and provision of associated management and hosting services. These fees include both upfront and annual recurring fees. Revenue from technology services is recognized once persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. Revenue is recognized ratably over the contractual service period. Rebates 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. 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, in accordance with ASC 740, Income Taxes 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. 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, 2015 and 2014 or the results of operations or cash flows for the years ended December 31, 2015, 2014, and 2013 . Comprehensive Income and Foreign Currency Translation The Company’s operating results are reported in the consolidated statements of comprehensive income pursuant to Accounting Standards Update 2011-05, Comprehensive Income. Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). OCI is comprised of revenues, expenses, gains and losses that are reported in the comprehensive income section of the consolidated statements of comprehensive income, but are excluded from reported net income. 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 income statement accounts 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 other comprehensive income, a separate component of members’ equity. Share-Based Compensation The Company accounts for share-based compensation transactions with employees under the provisions of ASC 718, Compensation: Stock Compensation. Share-based compensation transactions with employees are measured based on the fair value of equity instruments issued. 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 Transaction and the IPO pursuant to the VFI 2015 Management Incentive Plan (the “2015 Management Incentive Plan”) were in the form of stock options, Class A common stock and restricted stock units. The fair value of the stock option grants are determined through the application of the Black-Scholes-Merton model. The fair value of the Class A common stock and restricted stock units are determined based on the volume weighted average price for the three days preceding the grant, and with respect to the restricted stock units, 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 common stock, the vesting of restricted stock units or the exercise of stock options. Recent Accounting Pronouncements Revenue - In May 2014, the FASB issued ASU No. 2014-09, 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. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU No. 2015-14 defers the effective date of ASU No. 2014-09 by one year for public companies. ASU 2015-14 applies to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company has not yet determined the potential effects of the adoption of ASU 2014-09 and ASU 2015-14 on its consolidated financial statements. Repurchase Agreements - In June 2014, the FASB released ASU No. 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. The amendment changes the accounting for repurchase financing transactions and for repurchase-to-maturity transactions to secured borrowing accounting. The accounting changes were effective for the Company beginning in the first quarter of 2015. The effect of the accounting changes on transactions outstanding as of the effective date is required to be presented as a cumulative effect adjustment to retained earnings as of January 1, 2015. The amendment also requires additional disclosures for repurchase agreements and securities lending transactions regarding the class of collateral pledged and the remaining contractual maturity of the agreements, as well as a discussion on the potential risks associated with the agreements and the related collateral pledged, as well as how those risks are managed. Additional disclosures are required for repurchase agreements, securities lending transactions, sales with a total return swap, and other similar transfers of financial assets that are accounted for as a sale. The ASU did not have an impact on the Company’s consolidated financial statements except for the additional disclosures stated in Note 9. Compensation - In June 2014, the Emerging Issues Task Force (the ‘‘EITF’’) of the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The amendment requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 (fiscal year 2016 for the Company). Earlier adoption is permitted. This ASU is not expected to have an impact on the Company’s consolidated financial statements. Going Concern — In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The guidance will explicitly require management to assess an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. The new standard will be effective in the first annual period ending after December 15, 2016 (fiscal year 2017 for the Company). Earlier adoption is permitted. The Company will implement this new standard on the required effective date. This ASU is not expected to have an impact on the Company’s consolidated financial statements. Hybrid Financial Instruments — In November 2014, the EITF of the FASB issued ASU 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity. The ASU requires that for hybrid financial instruments issued in the form of a share, an entity should determine the nature of the host contract by considering all stated and implied substantive terms and features of the hybrid financial instrument, weighing each term and feature on the basis of relevant facts and circumstances. An entity should use judgment based on an evaluation of all the relevant terms and features, and should consider the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption, including adoption in an interim period, is permitted. This ASU did not have an impact on the Company’s consolidated financial statements. Debt Issuance Costs — In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. The ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, rather than as a deferred charge asset. The ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015 (fiscal year 2016 for the Company), and interim periods within those fiscal years. Early adoption of the amendment is permitted and the Company has elected to early adopt this ASU effective as of March 31 , 2015. The new guidance has been applied on a retrospective basis, wherein the accompanying consolidated statements of financial condition have been adjusted to reflect the period-specific effects of applying the new guidance. In August 2015, the FASB issued ASU 2015-15, Interest – Presentation and Subsequent Measurement of Debit Issuance Costs Associated with Line-of-Credit Arrangement. The ASU stated that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company reports debt issuance cost related to the senior secured credit facility as a direct deduction from the carrying amount of debt liability. Refer to Note 8 for additional information regarding the impact of ASU 2015-03 and ASU 2015-15 on the Company’s consolidated financial statements. 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 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 income statement 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. New quantitative and qualitative disclosures, including significant judgments made by management, will be required to provide greater information regarding the extent of revenue and expense recognized and expected to be recognized from existing contracts. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the potential effects of the adoption of ASU 2016-02 on the Company’s consolidated financial statements. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings per Share | |
Earnings per share | 3. Earnings per Share Historical earnings per share information is not applicable for reporting periods prior to the consummation of the Reorganization Transactions and the IPO because the ownership structure of the Company did not include a common unit of ownership. Net income available for common stockholders is based on the Company’s approximate 27.5% interest in Virtu Financial. The below table contains a reconciliation of net income before noncontrolling interest to net income available for common stockholders: For the Year ended December 31 (in thousands) 2015 Income before income taxes and noncontrolling interest $ Provision for income taxes Net income Net income allocable to members of Virtu Financial (for the period January 1, 2015 through April 15, 2015) Noncontrolling interest subsequent to April 15, 2015 Net income available for common stockholders $ The calculation of basic and diluted earnings per share is described below: Basic earnings per share are calculated utilizing net income available for common stockholders from the year ended December 31, 2015, divided by the weighted average number of shares of common stock outstanding during the same period: For the Year Ended December 31 (in thousands, except for share or per share data) 2015 Basic earnings per share: Net income available for common stockholders $ Weighted average shares of common stock outstanding: Class A Basic Earnings per share $ Diluted earnings per share are calculated utilizing net income available for common stockholders commencing on April 16, 2015, divided by the weighted average total number of shares of common stock outstanding during the year ended December 31, 2015 plus additional shares of common stock issued and issuable pursuant to the 2015 Management Incentive Plan (Note 13). For the Year Ended December 31 (in thousands, except for share or per share data) 2015 Diluted earnings per share: Net income available for common stockholders $ Weighted average shares of common stock outstanding: Class A Issued and outstanding Issuable pursuant to 2015 Management Incentive Plan Diluted Earnings per share $ |
Tax Receivable Agreements
Tax Receivable Agreements | 12 Months Ended |
Dec. 31, 2015 | |
Tax Receivable Agreements | |
Tax Receivable Agreements | 4. Tax Receivable Agreements In connection with the initial public offering and related reorganization transactions, the Company entered into Tax Receivable Agreements (“TRAs”) to make payments to both the Virtu Post-IPO Members and the Investor Post-IPO Stockholders, as defined in Note 13, that are generally equal to 85% of the applicable cash tax savings, if any, realized as a result of favorable tax attributes that will be available to the Company as a result of the reorganization transactions, exchanges of Virtu Financial interests for Class A common stock or Class B common stock and payments made under the TRAs. 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 first payment is due 120 days after the filing of the Company’s tax return for the year ended December 31, 2015, which was due March 15, 2016, but the due date has been extended until September 15, 2016. Future payments under the TRAs in respect of subsequent exchanges would be in addition to these amounts. As a result of the exchange of units of Virtu Financial from the IPO and the secondary offering, the Company recorded a deferred tax asset of $196.5 million associated with the increase in tax basis. Future payments to the Virtu Post-IPO Members and the Investor Post-IPO Stockholders in respect of the purchases, the exchanges and the Mergers described in Note 13 are expected to aggregate to approximately $218.4 million, ranging from approximately $8. 1 million to $16. 8 million per year over the next 15 years. The Company recorded a corresponding reduction to additional paid-in capital of approximately $21.9 million for the difference between the TRA liability and the related deferred tax asset. At December 31, 2015 , the Company’s remaining deferred tax asset and the payment liability pursuant to the TRAs were approximately $187.0 million and $218.4 million, respectively. The amounts recorded as of December 31, 2015 reflects the current estimates and are subject to change after the filing of the Company’s U.S. federal and state income tax returns for the year ended December 31, 2015 . For the TRAs 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 at Virtu Financial. Subsequent adjustments of the TRA obligations due to certain events (e.g., changes to the expected realization of NOLs or changes in tax rates) will be recognized within operating expenses in the consolidated statements of comprehensive income. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets There were no changes in the carrying amount of goodwill and no goodwill impairment was recognized for the years ended December 31, 2015, 2014, and 2013 . Acquired intangible assets consisted of the following as of December 31, 2015 and December 31, 2014 : As of December 31, 2015 Gross Carrying Accumulated Net Carrying Useful Lives (in thousands) Amount Amortization Amount (Years) Purchased technology $ $ $ — to 2.5 ETF issuer relationships 9 ETF buyer relationships 9 $ $ $ As of December 31, 2014 Gross Carrying Accumulated Net Carrying Useful Lives (in thousands) Amount Amortization Amount (Years) Purchased technology $ $ $ — to 2.5 ETF issuer relationships 9 ETF buyer relationships 9 $ $ $ Amortization expense relating to finite-lived intangible assets was approximately $0.2 million, $0. 2 million, and $1.0 million for the years ended December 31, 2015, 2014, and 2013 , respectively. This is included in amortization of purchased intangibles and acquired capitalized software in the accompanying consolidated statements of comprehensive income. |
Receivables from_Payables to Br
Receivables from/Payables to Broker-Dealers and Clearing Organizations | 12 Months Ended |
Dec. 31, 2015 | |
Receivables from/Payables to Broker-Dealers and Clearing Organizations | |
Receivables from/Payables to Broker-Dealers and Clearing Organizations | 6. 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, 2015 and December 31, 2014 : December 31, (in thousands) 2015 2014 Assets Due from prime brokers $ $ Deposits with clearing organizations Net equity with futures commission merchants Unsettled trades with clearing organization Securities failed to deliver Total receivables from broker-dealers and clearing organizations $ $ Liabilities Due to prime brokers $ $ Net equity with futures commission merchants Unsettled trades with clearing organization Securities failed to receive — Total payables to broker-dealers and clearing organizations $ $ 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 of approximately $219.1 million and $182.9 million as of December 31, 2015 and 2014, 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, 2015 | |
Collateralized Transactions | |
Collateralized Transactions | 7. 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, 2015 and December 31, 2014, substantially all of the securities received as collateral have been repledged. The fair value of the collateralized transactions at December 31, 2015 and December 31, 2014 are summarized as follows: December 31, (in thousands) 2015 2014 Securities received as collateral: Securities borrowed $ $ Securities purchased under agreements to resell $ $ 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, 2015 and December 31, 2014 consisted of the following: December 31, (in thousands) 2015 2014 Equities $ $ Exchange traded notes $ $ |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2015 | |
Borrowings | |
Borrowings | 8. Borrowings Broker-Dealer Credit Facilities The Company is a party to two secured credit facilities with the same 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 and is available for borrowings by the Company's broker-dealer subsidiaries up to a maximum amount of $125.0 million. In connection with this credit facility, the Company has entered into demand promissory notes dated February 20, 2013. The loans provided under the Uncommitted Facility are collateralized by the Company's broker-dealer trading and deposit accounts with the same financial institution and, bear interest at a rate set by the financial institution on a daily basis (1.25% at December 31, 2015 and 1.12% at December 31, 2014). The Company is party to another facility (the "Committed Facility") with the same financial institution dated July 22, 2013 and subsequently amended on March 26, 2014, July 21, 2014 and April 24, 2015, which is provided on a committed basis and is available for borrowings by one of the Company's broker-dealer subsidiaries up to a maximum of the lesser of $75.0 million or an amount determined based on agreed advance rates for pledged securities. The Committed Facility is subject to certain financial covenants, including a minimum tangible net worth, a maximum total assets to equity ratio, and a minimum excess net capital, each as defined. The Committed Facility bears interest at a rate per annum at the Company's election equal to either an adjusted LIBOR rate or base rate , plus a margin of 1.25% per annum, and has a term of 364 days. As of December 31, 2015 and 2014, the Company had $45.0 million and $0 outstanding principal balance on the Uncommitted Facility, respectively. As of December 31, 2015 and 2014, the Company did not have any outstanding principal balance on the Committed Facility. Interest expense for the year ended December 31, 2015, 2014, and 2013 was approximately $0.9 million, $0.5 million, and $0. 3 million, respectively. Interest expense is included within interest and dividends expense in the accompanying consolidated statements of comprehensive income. 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. The aggregate amount available for borrowing under these facilities was $478.0 million and $440.0 million and the outstanding principal was $219.1 million and $182.9 million as of December 31, 2015 and 2014, respectively, which were included within receivables from broker-dealers and clearing organizations within the consolidated statements of financial condition. Borrowings bore interest at a weighted average interest rate of 2.48% and 1.80% per annum, as of December 31, 2015 and 2014, respectively. Interest expense in relation to the facilities for the years ended December 31, 2015, 2014, and 2013 was approximately $5.5 million, $3.3 million, and $3.2 million, respectively. Interest expense is recorded within interest and dividends expense in the accompanying consolidated statements of comprehensive income. Senior Secured Credit Facility On July 8, 2011, Virtu Financial, its wholly owned subsidiary, VFH Parent LLC (“VFH” or, the “Borrower”), and each of its unregulated domestic subsidiaries entered into the credit agreement (the “Credit Agreement”) among the Borrower, Virtu Financial, Credit Suisse AG, as administrative agent, and the other parties thereto. The credit facility funded a portion of the MTH acquisition with a term loan in the amount of $320.0 million to VFH. The credit facility was issued at a discount of 2.0% or $313.6 million, net of $6.4 million discount. The credit facility was initially subject to quarterly principal payments beginning on December 31, 2011 with the unpaid principal payable on maturity on July 8, 2016. Under the terms of the loan, VFH is subject to certain financial covenants, including a total net leverage ratio and an interest coverage ratio, as defined in the Credit Agreement. VFH is also subject to contingent principal payments based on excess cash flow, as defined in the Credit Agreement, and certain other triggering events. Borrowings are collateralized by substantially all the assets of the Company, other than the equity interests in and assets of its registered broker-dealer, regulated and foreign subsidiaries, but including 100% of the non-voting stock and 65% of the voting stock of Virtu Financial’s or its domestic subsidiaries’ direct foreign subsidiaries. The Credit Agreement was amended on February 5, 2013, May 1, 2013 and November 8, 2013. The amendments resulted in a decreased interest rate, changes in certain operating covenants, and an increase in principal amount outstanding by $150.0 million on May 1, 2013 and $106.7 million on November 8, 2013, respectively. Additionally, the amendments reduced the annual amortization obligation from 15% of the original principal amount to approximately 1% of the outstanding principal amount as of November 8, 2013, which was $510.0 million. The terms of the amended credit facility are otherwise substantially similar to the original credit facility, except as set forth below. Term loans outstanding under the Credit Agreement bear interest at a rate per annum at the Company's election equal to either (i) the greatest of (a) the prime rate in effect, (b) the federal funds effective rate (as defined in the Credit Agreement) plus 0.5% (c) the adjusted LIBOR rate (as defined in the Credit Agreement) for a Eurodollar borrowing with an interest period of one month plus 1% , and (d) 2.25% plus, in each case, 3.0% , or (ii) the greater of (x) the adjusted LIBOR rate for the interest period in effect and (y) 1.25% , plus 4.0% . Pursuant to the Amendment (as defined below), each incremental spread was reduced by 0.50% upon the consummation of the Company’s IPO. The rate at December 31, 2015 was 5.25% . Aggregate future required minimum principal payments based on the terms of this loan at December 31, 2015 were as follows: (in thousands) 2016 $ 2017 2018 2019 and thereafter Total maturities of long-term debt $ Net carrying amount of deferred financing fees capitalized in connection with the financing were approximately $4. 7 million and $5.1 million, respectively, as of December 31, 2015 and 2014, which are included as a deduction to senior secured credit facility in the accompanying consolidated statements of financial condition. The Company retrospectively adopted ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , wherein the accompanying consolidated statements of financial condition have been adjusted to reflect the period specific effects of applying the new guidance. After retrospectively applying the new guidance, the Company reclassified approximately $5.1 million in deferred financing fees as of December 31, 2014 previously included within other assets to senior secured credit facility in the accompanying consolidated statements of financial condition. Amortization expense related to the deferred financing fees was approximately $1.0 million, $1.0 million, and $1.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. Amortization expense is included within financing interest expense on senior secured credit facility in the accompanying consolidated statements of comprehensive income. The net carrying amounts of debt discount were approximately $1. 5 million and $1.9 million as of December 31, 2015 and 2014, respectively. The accreted expenses were approximately $0. 4 million, $0.4 million, and $0.7 million for the years ended December 31, 2015, 2014, and 2013, respectively. The accretion is included within financing interest expense on senior secured credit facility in the accompanying consolidated statements of comprehensive income. On April 15, 2015, the Company, Virtu Financial, and each unregulated domestic subsidiary of Virtu Financial, entered into an amendment agreement (the “Amendment”) to the Credit Agreement. The Amendment provided for a revolving credit facility with aggregate commitments by revolving lenders of $100.0 million, available upon the consummation of the IPO and the payment of relevant fees and expenses. The revolving credit facility is secured pari passu with the term loans outstanding under the Credit Agreement and is subject to the same financial covenants and negative covenants. Borrowings under the revolving facility bear interest, at our election, at either (i) the greatest of (a) the prime rate in effect, (b) the federal funds effective rate plus 0.5% (c) an adjusted LIBOR rate for a Eurodollar borrowing with an interest period of one month plus 1% and (d) 2.25% , plus, in each case, 2.0% , or (ii) the greater of (x) an adjusted LIBOR rate for the interest period in effect and (y) 1.25% , plus , in each case, 3.0% . The Company will also pay a commitment fee of 0.50% per annum on the average daily unused portion of the facility. As of December 31, 2015 , the Company did not have any outstanding principal balance on the revolving credit facility. Interest expense in relation to the facilities for the year ended December 31, 2015 was $0.2 million. The net carrying amounts for the deferred financing fees capitalized in connection with the revolving credit facility were approximately $0.7 million as of December 31, 2015 , which was included as a deduction to senior secured credit facility in the accompanying consolidated statements of financial condition. Amortization expenses related to the deferred financing fees in connection with the revolving credit facility were approximately $0. 2 million for the year end December 31, 2015. |
Financial Assets and Liabilitie
Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Financial Assets and Liabilities | |
Financial Assets and Liabilities | 9. Financial Assets and Liabilities At December 31, 2015 and December 31, 2014 , substantially all of Company's financial assets and liabilities, except for the senior secured credit facility and certain exchange memberships, were carried at fair value based on published market prices and are marked to market daily or were short-term in nature and were carried at amounts that approximate fair value. The Company determined that the carrying value of the Company's senior secured credit facility approximates fair value as of December 31, 2015 and December 31, 2014 based on the quoted over-the-counter market prices provided by the issuer of the senior secured credit facility, which was categorized as Level 2. The fair value of equities, 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 which are categorized as Level 2. Fair value of the Company's derivative contracts is based on the indicative prices obtained from the banks that are counterparties to these contracts, 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. At December 31, 2015 and December 31, 2014 , the Company's derivative contracts and non-U.S. government obligations have been categorized as Level 2. Transfers in or out of levels are recognized based on the beginning fair value of the period in which they occurred. There were no transfers of financial instruments between levels during the years ended December 31, 2015 and 2014 . Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2015 : December 31, 2015 Quoted Prices Significant in Active Other Significant Counterparty Markets for Observable Unobservable and Cash Identical Assets Inputs Inputs Collateral Total Fair (in thousands) (Level 1) (Level 2) (Level 3) Netting Value Assets Financial instruments owned, at fair value: Equity securities $ $ $ — $ — $ U.S. and Non-U.S. government obligations — — — Exchange traded notes — — — Interest rate swaps — — — Currency forwards — — Options — — — $ $ $ — $ $ Financial instruments owned, pledged as collateral: Equity securities $ $ — $ — $ — $ Exchange traded notes — — — $ $ — $ — $ — $ Other Assets Exchange stock $ $ — $ — $ — $ $ $ — $ — $ — $ Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ $ $ — $ — $ U.S. and Non-U.S. government obligations — — — Exchange traded notes — — — Interest rate swaps — — — Currency forwards — — — Options — — — $ $ $ — $ $ Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2014 : December 31, 2014 Quoted Prices in Active Significant Markets for Other Significant Counterparty Identical Observable Unobservable and Cash Assets Inputs Inputs Collateral Total Fair (in thousands) (Level 1) (Level 2) (Level 3) Netting Value Assets Financial instruments owned, at fair value: Equity securities $ $ $ — $ — $ U.S. and non-U.S. government obligations — — — Exchange traded notes — — — Currency forwards — — Options — — — $ $ $ — $ $ Financial instruments owned, pledged as collateral: Equity securities $ $ — $ — $ — $ Exchange traded notes — — — $ $ — $ — $ — $ Other Assets Exchange stock $ $ — $ — $ — $ $ $ — $ — $ — $ Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ $ $ — $ — $ U.S. and non-U.S. government obligations — — — Exchange traded notes — — — Currency forwards — — Options — — — Interest rate swaps — — — $ $ $ — $ $ 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 netting of certain financial assets and financial liabilities as of December 31, 2015 and 2014, pursuant to the requirements of ASU 2011-11 and ASU 2013-01. December 31, 2015 Net Amounts of Gross Amounts Assets Presented Gross Amounts Not Offset In the Offset in the in the Consolidated Gross Amounts Consolidated Consolidated Statement of Financial Condition of Recognized Statement of Statement of Financial Cash Collateral (in thousands) Assets Financial Condition Financial Condition Instruments Received Net Amount Offsetting of Financial Assets: Securities borrowed $ $ — $ $ $ $ Securities purchased under agreements to resell — — — Trading assets, at fair value: Currency forwards — — Options — — Interest rate swaps — — — Total $ $ $ $ $ $ Net Amounts of Gross Amounts Assets Presented Gross Amounts Not Offset In the Offset in the in the Consolidated Gross Amounts Consolidated Consolidated Statement of Financial Condition of Recognized Statement of Statement of Financial Cash Collateral Assets Financial Condition Financial Condition Instruments Received Net Amount Offsetting of Financial Liabilities: Securities loaned $ $ — $ $ $ — $ Securities sold under agreements to repurchase — — — — — — Trading liabilities, at fair value: Currency forwards — — — — Options — — Interest rate swaps — — Total $ $ $ $ $ $ December 31, 2014 Net Amounts of Gross Amounts Assets Presented Gross Amounts Not Offset In the Offset in the in the Consolidated Gross Amounts Consolidated Consolidated Statement of Financial Condition of Recognized Statement of Statement of Financial Cash Collateral (in thousands) Assets Financial Condition Financial Condition Instruments Received Net Amount Offsetting of Financial Assets: Securities borrowed $ $ — $ $ $ — $ Securities purchased under agreements to resell — — — Trading assets, at fair value: Currency forwards — — Options — — Total $ $ $ $ $ — $ Net Amounts of Liabilities Gross Amounts Presented Gross Amounts Not Offset In the Offset in the in the Consolidated Gross Amounts Consolidated Consolidated Statement of Financial Condition of Recognized Statement of Statement of Financial Cash Collateral (in thousands) Liabilities Financial Condition Financial Condition Instruments Pledged Net Amount Offsetting of Financial Liabilities: Securities loaned $ — $ $ $ $ Securities sold under agreements to repurchase — — — Trading liabilities, at fair value: Currency forwards — — Options — — — Interest rate swaps — — — Total $ $ $ $ $ $ Excluded from the fair value and offsetting tables above is net unsettled fair value on long and short futures contracts in the amounts of $(8.1) million and $46.4 million, which are included within receivables from broker-dealers and clearing organizations as of December 31, 2015 and 2014, respectively, and $(11.7) million and $(3.6) million, which are included within payables to broker-dealers and clearing organizations as of December 31, 2015 and 2014, respectively. The following table presents gross obligations for securities lending transactions by remaining contractual maturity and the class of collateral pledged. December 31, 2015 Remaining Contractual Maturity Overnight and Less than 30 - 90 Over 90 (in thousands) Continuous 30 days days Days Total Securities lending transactions: Equity securities $ $ — $ — $ — $ Total $ $ — $ — $ — $ |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments | |
Derivative Instruments | 10. Derivative Instruments The fair value of the Company's derivative instruments on a gross basis consisted of the following at December 31, 2015 and December 31, 2014 : (in thousands) 2015 2014 Derivatives Assets Balance Sheet Classification Fair Value Notional Fair Value Notional Equities futures Receivables from broker dealers and clearing organizations $ $ $ $ Commodity futures Receivables from broker dealers and clearing organizations Currency futures Receivables from broker dealers and clearing organizations Treasury futures Receivables from broker dealers and clearing organizations Options Financial instruments owned Currency forwards Financial instruments owned Interest rate swaps Financial instruments owned — — Derivatives Liabilities Balance Sheet Classification Fair Value Notional Fair Value Notional Equities futures Payables to broker dealers and clearing organizations $ $ $ $ Commodity futures Payables to broker dealers and clearing organizations Currency futures Payables to broker dealers and clearing organizations Options Financial instruments sold, not yet purchased Currency forwards Financial instruments sold, not yet purchased Interest rate swaps Financial instruments sold, not yet purchased Amounts included in receivables from and payables to broker-dealers and clearing organizations represent net unsettled fair value on long and short futures contracts. The following table summarizes the gain from derivative instruments not designated as hedging instruments under ASC 815, which are recorded in trading income, net in the accompanying consolidated statements of comprehensive income for the years ended December 31, 2015, 2014, and 2013 . For the years ended December 31, (in thousands) 2015 2014 2013 Futures $ $ $ Currency forwards Options Interest rate swaps — $ $ $ |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | 11. Income Taxes Income before income taxes and noncontrolling interest is as follows for the years ended December 31, 2015, 2014 and 2013 : For the years ended December 31, 2015 2014 2013 (in thousands) U.S. operations $ $ $ Non-U.S. operations $ $ $ The provision for income taxes consists of the following for the years ended December 31, 2015, 2014 and 2013 . For the years ended December 31, (in thousands) 2015 2014 2013 Current provision Federal $ $ — $ — State and Local — — Foreign Deferred provision (benefit) Federal — — State and Local — — Foreign 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, 2015, 2014 and 2013 is as follows: December 31, 2015 2014 2013 (in thousands, except percentages) Tax provision at the U.S. federal statutory rate — — Less: rate attributable to noncontrolling interest — — State, local and foreign taxes, net of federal benefit % % % Provision for income taxes % % % The components of the deferred tax assets and liabilities as of December 31, 2015 and 2014 are as follows: December 31, (in thousands) 2015 2014 Deferred income tax assets Tax Receivable Agreement $ $ — Share-based compensation Fixed assets Total deferred income tax assets $ $ Deferred income tax liabilities Fixed assets — Total deferred income tax liabilities $ $ — Income tax expense for the years ended December 31, 2015, 2014, and 2013 differs from the U.S. federal statutory rate primarily due to the taxation treatment of income attributable to noncontrolling interests in Virtu Financial. These noncontrolling interests are subject to U.S. taxation as partnerships. Accordingly, 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. Deferred income taxes arise primarily due to the amortization of the deferred tax assets recognized in connection with the IPO (Note 13), differences in the valuation of financial assets and liabilities, and in connection with other temporary differences arising from the deductibility of compensation and depreciation expenses in different time periods for book and income tax return purposes. There are no expiration dates on the deferred tax assets. 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. A valuation allowance against deferred tax assets at the balance sheet date is not considered necessary because it is more likely than not the deferred tax asset will be fully realized. There are no unrecognized tax benefits as of December 31, 2015 and December 31, 2014 . The Company is subject to taxation in U.S. federal, state, local and foreign jurisdictions. As of December 31, 2015, the Company’s tax years for 2012 through 2014 and 2009 through 2014 are subject to examination by U.S. and non-U.S. tax authorities, respectively. |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 12 Months Ended |
Dec. 31, 2015 | |
Commitments, Contingencies and Guarantees | |
Commitments, Contingencies and Guarantees | 12. Commitments, Contingencies and Guarantees At December 31, 2015, minimum rental commitments under non-cancellable leases are approximately as follows: Minimum Rental Commitments Year Ending December 31 Capital Operating 2016 2017 2018 2019 — 2020 — Thereafter — Total minimum lease payments $ $ Total operating lease expense, net of amortization expense related to landlord incentives, for the years ended December 31, 2015, 2014 and 2013 was approximately $5.3 million, $3.5 million, and $4.3 million, respectively. Occupancy lease expense for the years ended December 31, 2015, 2014 and 2013 of $3.9 million, $1.7 million and $1.9 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, 2015, 2014 and 2013 of $1.4 million, $1.8 million and $2.4 million, respectively, is included within communication and data processing in the accompanying consolidated statements of comprehensive income. Employee Retention Plan In connection with the July 8, 2011 acquisition of MTH, the Company established an employee retention plan. Under the plan, approximately $21.5 million was paid to employees in five installments from July 8, 2011 through July 8, 2014. The Company recognized approximately $ 0, $2.6 million and $6.7 million, respectively, in compensation expense related to the plan, for the years ended December 31, 2015, 2014 and 2013 , in acquisition related retention bonus in the accompanying consolidated statements of comprehensive income. Litigation The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. The Company has also been, is currently, and may in the future be, the subject of one or more regulatory or self-regulatory organization enforcement actions, including but not limited to targeted and routine regulatory inquiries and investigations involving Regulation NMS, Regulation SHO, capital requirements and other domestic and foreign securities rules and regulations which may from time to time result in the imposition of penalties or fines. The Company has also been the subject of requests for information and documents from the SEC and the State of New York Office of the Attorney General (‘‘NYAG’’). Certain of these matters may result, or have resulted, in adverse judgments, settlements, fines, penalties, injunctions or other relief, and the Company’s business or reputation could be negatively impacted if it were determined that disciplinary or other enforcement actions were required. The ultimate effect on the Company from the pending proceedings and claims, if any, is presently unknown. Where available information indicates that it is probable a liability had been incurred at the date of the consolidated financial statements and the Company can reasonably estimate the amount of that loss, the Company accrues the estimated loss by a charge to income. In addition, in December 2015 the enforcement committee of the Autorité des marchés financiers (“AMF”) fined our European subsidiary in the amount of €5.0 million (approximately $5.4 million) based on its allegations that the subsidiary of MTH engaged in price manipulation and violations of the AMF General Regulation and Euronext Market Rules. In accordance with the foregoing, we have accrued an estimated loss of €5.0 million (approximately $5.4 million) in relation to the fine imposed by the AMF. Subject to the foregoing, based on information currently available, management believes it is not probable that the resolution of any known matters will result in a material adverse effect on the Company’s financial position, results of operations or cash flows although they might be material for any particular reporting period. The Company’s management believes that the relevant trading engaged in by the subsidiary of MTH was conducted in accordance with applicable French law and regulations and the Company is pursuing its rights of appeal. Indemnification Arrangements Consistent with standard business practices in the normal course of business, the Company has provided general indemnifications to its managers, officers, employees, and agents against expenses, 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, 2015 | |
Capital Structure | |
Capital Structure | 13. Capital Structure Capital structure prior to the Company’s Reorganization completed on April 15, 2015 and IPO completed on April 16, 2015: Virtu Financial had three classes of members interests: Class A-1 members interests; Class A-2 members interests; and Class B members interests. Class A-2 members interests included both Class A-2 capital interests and Class A-2 profits interests. Class A-1 Interests On July 8, 2011, 25,000,000 Class A-1 redeemable interests were issued to an affiliate of Silver Lake (“the Silver Lake Member”) and 1,964,826 Class A-1 interests were issued to an affiliate of Vincent Viola, which Class A-1 interests had an aggregate capital balance of approximately $270 million. On December 31, 2014, through a series of transactions, 5,376,603 and 12,242,173 of the Class A-1 redeemable interests previously held by the Silver Lake Member were transferred to Wilbur Investments LLC (the ‘‘Temasek Member’’), an indirect wholly owned subsidiary of Temasek Holdings (Private) Limited, (‘‘Temasek’’), and an affiliate of Silver Lake and Temasek, 57.9% of which is indirectly owned by affiliates of Silver Lake Partners and 42.1% of which is indirectly owned by an affiliate of Temasek (the “SLT Member” and together with the Silver Lake Member and the Temasek Member, the “Investor Members”), respectively, with the Silver Lake Member retaining 7,381,224 Class A-1 redeemable interests. Class A-1 interests that the holder thereof has the right to call for redemption were held by three members: (i) the Silver Lake Member, (ii) the Temasek Member and (iii) the SLT Member. The Silver Lake Member had the right to appoint one member on Virtu Financial’s board of directors and the Temasek Member had the right to either appoint one member on Virtu Financial’s board of directors (subject to obtaining certain regulatory approvals) or elect that the other members of the board of directors designate one member of Virtu Financial’s board of directors in consultation with the Temasek Member. The Silver Lake Member and the Temasek Member also possessed approval rights with respect to certain board actions and corporate events. Additionally, as part of the transaction consideration, a contingent payment agreement was entered into among Temasek, Silver Lake Partners, the Employee Holdco and the Company whereby additional payments will be made from Temasek to Silver Lake Partners and the selling members of management in the aggregate maximum amount of $3.9 million if the value of the interests acquired exceeds 1.7 times the transaction price prior to December 31, 2018, or December 31, 2019, the date depending on whether certain liquidity events occur. There were no additional Class A-1 interests granted, forfeited , distributed or redeemed during the years ended December 31, 2015, 2014, and 2013 . Class A-2 Interests Class A-2 interests included both Class A-2 capital interests and Class A-2 profits interests. No Class A-2 capital interests were issued and outstanding as of December 31, 2015 , and approximately 93,786,659 were issued and outstanding as of December 31, 2014 . On December 31, 2014, through a series of transactions, 1,614,322 of the Class A-2 capital interests previously held by certain members of the Company’s management were transferred to the Temasek Member, and 214,433 new Class A-2 capital interests were issued to the Temasek Member, with the proceeds of such issuance being used to redeem the same number of Class A-2 profits interests held by Employee Holdco LLC (“Employee Holdco”). On November 4, 2014, the Company repurchased 1,452,667 Class A-2 capital interests from a member of the Company’s management with an original carrying value of approximately $1.4 million for $6.0 million. The excess of repurchase price over the carrying value of approximately $4.6 million was recorded as a reduction in accumulated deficit and the carrying value of approximately $1.4 million was recorded as a reduction in Class A-2 capital interests in the accompanying consolidated statements of financial condition. Class A-2 profits interests were issued to Employee Holdco, a holding company which held the interests on behalf of certain key employees or stakeholders. Employee Holdco issued Class A-2 profits interests of Employee Holdco to such employees and stakeholders which corresponded to the underlying Class A-2 profits interests held by Employee Holdco. There were no Class A-2 profits interests issued and outstanding as of December 31, 2015 and 6,069,007 Class A-2 profits interests issued and outstanding as of December 31, 2014 . Holders of Class A-2 profits interests shared in distributions of available cash flow based on the ratio of interests held to the total number of Class A-1 and Class A-2 interests outstanding, and also shared on a pro rata basis in the proceeds of a liquidity event, subject to a valuation hurdle determined by Virtu Financial at the time of the grant based on a valuation performed by a third party valuation firm. Holders of the Class A-2 profits interests shared in the proceeds of a liquidity event above such valuation hurdle, and received a preference on such distributions above such valuation threshold until all holders of Class A-2 profits interests subject to such valuation threshold had been allocated capital proceeds equal to the deemed capital contribution attributable to such Class A-2 profits interests as determined by the Company at the time of the grant. Class B Interests Virtu Financial previously approved the Virtu Financial LLC Management Incentive Plan (the “MIP”). Participants of the MIP were entitled to receive either Class B interests of Virtu Financial or Class B interests of Employee Holdco, which holds directly the corresponding Class B interests in Virtu Financial. Upon a liquidity event, Class B interests under the MIP were entitled to share proportionately in distributions in excess of the applicable profits interest valuation hurdle, which was determined by Virtu Financial based on a valuation at the time of the grant performed by a third party valuation firm. Class B interests were non-voting interests which vested over a four year period and upon a sale, IPO or certain other capital transactions of Virtu Financial. Class B interests were subject to forfeiture and repurchase provisions upon certain termination events. There were no Class B interests outstanding as of December 31, 2015 and Class B interests representing a right to share in 12.915% of capital proceeds (on a fully diluted basis) were issued and outstanding as of December 31, 2014 . Class B interests of 0% , 0% and 2.65% were issued during the years ended December 31, 2015, 2014, and 2013 Distribution and Liquidation Rights Holders of Class A-1 and Class A-2 interests shared in distributions of available cash flow based on the ratio of interests held to the total number of Class A-1 and Class A-2 interests outstanding. Holders of Class B interests were not entitled to share in such distributions. Prior to the Reorganization Transactions, unless and until converted to Class A-2 members’ interests, upon occurrence of a capital transaction, Class A-1 interests were entitled to distributions of capital proceeds until Class A-1 members’ unrecovered capital balance (as defined) was reduced to zero . After distributions to Class A-1 members, capital proceeds would have been provided to Class A-2 capital members until Class A-2 capital members’ unrecovered capital balance (as defined) were reduced to zero . After distributions to Class A-1 and Class A-2 members, distributions of capital proceeds would have been provided to members in respect to their respective capital proceeds percentages (as defined), subject to the valuation hurdles and distribution preferences applicable to holders of Class A-2 profits interests. Holders of vested Class B interests would have shared in distributions of capital proceeds above the applicable valuation hurdle proportionately based on their capital proceeds percentages. In the event of any voluntary or involuntary liquidation, dissolution, winding up, merger or company sale, distributions would have been made, first, to Class A-1 members’ unrecovered capital balance (as defined) until they have been reduced to zero. Second, to Class A-2 capital members, in proportion to their unrecovered capital balance (as defined) until reduced to zero and then to members in respect to their capital proceeds percentages (as defined), subject to the valuation hurdles and distribution preferences applicable to holders of Class A-2 profits interests. Conversion Rights Prior to the Reorganization Transactions, the Class A-1 interests were convertible into Class A-2 interests at any time at the option of the Class A-1 member on a one -for-one basis. The Class A-1 interests automatically converted upon a qualified IPO or qualified sale. Qualified IPO was defined as an initial public offering on the New York Stock Exchange or NASDAQ National Market in which the gross proceeds raised equal or exceed $100.0 million and the valuation of the Company implies a return to the Silver Lake Member equal to at least (after taking into account previous distributions) 1.75 times the invested amount. Qualified sale was defined as a sale of all or a majority of the assets of the Company or all or a majority of the limited liability company interests of the Company to a third party that is not an affiliate or other permitted transferee of any member as long as the sale (i) is for consideration consisting entirely of cash and/or marketable securities and would satisfy certain minimum return requirements applicable to Silver Lake Partners and Temasek or (ii) was approved by the Silver Lake Member or, in certain circumstances, the Temasek Member. Redemption Rights Unless and until conversion occurred, the Investor Members were entitled to a number of rights and benefits, including the right to call for redemption of their Class A-1 interests. Any time on or after November 24, 2016, the Silver Lake Member could have exercised such redemption right in order to cause the Company to purchase all of the Class A-1 interests owned directly or indirectly by affiliates of Silver Lake Partners. Any time on or after May 16, 2020, the Temasek Member could have exercised such redemption right in order to cause the Company to purchase all of the Class A-1 interests owned directly or indirectly by affiliates of Temasek. Prior to the Reorganization Transactions, the redemption price for each unit of Class A-1 interests owned by the Investor Members was the greater of (i) a minimum purchase price and (ii) the fair market value of the Class A-1 interests on the date of redemption. The minimum purchase price with respect to the Class A-1 interests owned directly or indirectly by affiliates of Silver Lake Partners was equal to the purchase price paid by affiliates of Silver Lake Partners for such Class A-1 interests and the minimum purchase price with respect to the Class A-1 interests owned directly or indirectly by affiliates (as defined in the Second Amended and Restated Limited Liability Company Agreement of Virtu Financial) of Temasek was equal to the purchase price paid by affiliates (as defined in the Second Amended and Restated Limited Liability Company Agreement of Virtu Financial) of Temasek for such Class A-1 interests (in each case, less distributions received in respect of such Class A-1 interests). The Company could have redeemed the Class A-1 interests using redemption notes provided that all available cash flow and all capital proceeds were used to pay down the redemption note. In lieu of redemption, the Silver Lake Member or the Temasek Member could require the Company to purchase all of the equity securities of the affiliated entity or entities that directly or indirectly owned their Class A-1 interests on behalf of affiliates of Silver Lake Partners or Temasek, respectively, provided that any such entity had not conducted any business or operations since inception other than the direct or indirect ownership of the interests of the Company. The redeemable equity instrument was classified outside of permanent equity on the consolidated statements of financial condition. East Management Incentive Plan On July 8, 2011, 2,625,000 Class A-2 capital interests were contributed by Class A-2 members to Virtu East MIP LLC (“East MIP”). East MIP issued Class A interests to the members who contributed the Class A-2 capital interests, and Class B interests (“East MIP Class B interests”) to certain key employees. East MIP Class B interests were non-voting interests which vested over the four year period ending July 8, 2015, but in any event no earlier than upon the occurrence of a sale, IPO or certain other capital transactions of Virtu Financial. Vested East MIP Class B interests were entitled to participate in distributions of the proceeds received in respect of the Class A-2 capital interests held by East MIP upon a sale or certain other capital transactions of Virtu Financial. East MIP Class B interests were subject to forfeiture and repurchase provisions upon certain termination events. Capital structure after the Company’s Reorganization Completed on April 15, 2015 and IPO Commenced on April 16, 2015: Initial Public Offering On April 16, 2015, the Company commenced its IPO of 19,012,112 shares of its Class A common stock, par value $0.00001 per share, including 2,479,840 shares of Class A common stock sold in connection with the full exercise of the option to purchase additional shares granted to the underwriters, at a price to the public of $19.00 per share. The shares began trading on NASDAQ on April 16, 2015 under the ticker symbol “VIRT” and the offering was closed on April 21, 2015. Reorganization Transactions In connection with the IPO, a series of reorganization transactions was completed on April 15, 2015 (the “Reorganization Transactions”) among the Company, subsidiaries of Virtu Financial and equityholders of Virtu Financial which include the following persons (the ‘‘Virtu Pre-IPO Members’’): · three affiliates of the founding member, (collectively the ‘‘Founder Pre-IPO Members’’); · the Silver Lake Member; · the Temasek Member; · the SLT Member; · two entities, one of which was and the other of which is managed by the founding member, whose equityholders include certain members of the management of Virtu Financial, (the ‘‘Management Vehicles’’); and · certain current and former members of the management of the Company. and Madison Tyler Holdings and their affiliates, (the ‘‘Management Members’’) In the Reorganization Transactions: · the Company. became the sole managing member of Virtu Financial ; · in a series of transactions, one of the Management Vehicles liquidated, with its equity interests in Virtu Financial either being distributed to its members, including certain members of management, or contributed to the other Management Vehicle (“Virtu Employee Holdco”) and certain employees of Virtu Financial based outside the United States were distributed equity interests in Virtu Financial held by Virtu Employee Holdco on behalf of such employees and such equity interests were contributed to a trust (the ‘‘Employee Trust’’), whose trustee is one of Virtu Financial’s subsidiaries; · two of the Founder Pre-IPO Members liquidated and distributed their equity interests in Virtu Financial to their equityholders, one of whom is TJMT Holdings LLC, the third Founder Pre-IPO Member; · the SLT Member distributed its equity interests in Virtu Financial to its equityholders, which consist of investment funds and other entities affiliated with Silver Lake Partners and Temasek; · following a series of transactions, the Company acquired equity interests in Virtu Financial as a result of certain mergers involving wholly owned subsidiaries of Virtu Financial, an affiliate of Silver Lake Partners and Temasek, and the Temasek Member (the ‘‘Mergers’’), and in exchange the Company issued to an affiliate of Silver Lake Partners (the ‘‘Silver Lake Post-IPO Stockholder’’) and an affiliate of Temasek (the ‘‘Temasek Post-IPO Stockholder’’, collectively with the Silver Lake Post-IPO Stockholder, the ‘‘Investor Post-IPO Stockholders’’) shares of Class A common stock and rights to receive payments under a tax receivable agreement described below. The number of shares of Class A common stock issued to the Investor Post-IPO Stockholders was based on the value of the Virtu Financial equity interests that we acquired, which was determined based on a hypothetical liquidation of Virtu Financial and the initial public offering price per share of the Company’s Class A common stock in the IPO; · all of the existing equity interests in Virtu Financial were reclassified into non-voting common interest units (‘‘Virtu Financial Units’’). The number of Virtu Financial Units issued to each member of Virtu Financial was determined based on a hypothetical liquidation of Virtu Financial and the IPO price of $19 per share of the Company’s Class A common stock. The Virtu Financial Units received by Virtu Employee Holdco, the Employee Trust and the Management Members have the same vesting restrictions as the equity interests which were reclassified. Vested Virtu Financial Units will be entitled to receive distributions, if any, from Virtu Financial. Subject to certain exceptions, unvested Virtu Financial Units are not entitled to receive such distributions (other than tax distributions). If any unvested Virtu Financial Units are forfeited, they will be cancelled by Virtu Financial for no consideration (and the Company will cancel the related shares of Class C common stock (described below) for no consideration); · the Company amended and restated its certificate of incorporation and issued four classes of common stock: Class A common stock, Class B common stock, Class C common stock and Class D common stock (‘‘common stock’’). The Class A common stock and Class C common stock each provide holders with one vote on all matters submitted to a vote of stockholders, and the Class B common stock and Class D common stock each provide holders with 10 votes on all matters submitted to a vote of stockholders. The holders of Class C common stock and Class D common stock do not have any of the economic rights (including rights to dividends and distributions upon liquidation) provided to holders of Class A common stock and Class B common stock. Shares of the Company’s common stock will generally vote together as a single class on all matters submitted to a vote of stockholders. The remaining members of Virtu Financial after giving effect to the Reorganization Transactions, other than the Company, (collectively as the ‘‘Virtu Post-IPO Members’’), subscribed for and purchased shares of the Company’s common stock as follows, in each case at a purchase price of $0.00001 per share and in an amount equal to the number of Virtu Financial Units held by each such Virtu Post-IPO Member; · TJMT Holdings LLC (‘‘Founder Post-IPO Member’’), purchased 79,610,490 shares of the Company’s Class D common stock; and · affiliates of Silver Lake Partners (the ‘‘Silver Lake Post-IPO Members’’), Virtu Employee Holdco, the Employee Trust, the Management Members and the other Virtu Post-IPO Members purchased 36,746,041 shares of the Company’s Class C common stock; and the Founder Post-IPO Member was granted the right to exchange its Virtu Financial Units, together with a corresponding number of shares of the Company’s Class D common stock, for shares of the Company's Class B common stock, and the other Virtu Post-IPO Members was granted the right to exchange their Virtu Financial Units, together with a corresponding number of shares of the Company's Class C common stock, for shares of the Company’s Class A common stock. Each share of VFI’s Class B common stock and Class D common stock is convertible at any time, at the option of the holder, into one share of Class A common stock or Class C common stock, respectively. Distributions in Connection with the IPO On June 12, 2015, September 14, 2015 and November 20, 2015, Virtu Financial made cash distributions totaling $15.0 million to the holders of its outstanding equity interests prior to the consummation of the Reorganization Transactions (such holders, the “Virtu Financial Pre-IPO Members”) (funded from cash on hand). Additionally, Virtu Financial intends to make further cash distributions of up to $35.0 million to the Virtu Financial Pre-IPO Members. The Company expects that these further distributions will be funded from cash on hand and excess cash held as clearing deposits with broker dealers and clearing organizations. Use of Proceeds of the IPO Upon consummation of the IPO, the total gross proceeds of the offering were approximately $361.2 million. Of the proceeds, approximately $25.2 million was used to pay underwriting discounts and commissions, approximately $277.2 million was used to purchase 3,470,724 shares of Class A common stock from the Silver Lake Post-IPO Stockholder and 12,214,224 Virtu Financial Units and corresponding shares of Class C common stock from certain of the Virtu Post-IPO Members, including 4,862,609 Virtu Financial Units and corresponding shares of Class C common stock from the Silver Lake Post-IPO Members and 7,351,615 Virtu Financial Units and corresponding shares of Class C common stock from certain employees. The remaining $58.8 million of net proceeds was contributed by the Company to Virtu Financial, the operating company, which will be used for working capital and general corporate purposes. Other offering costs incurred were approximately $8.6 million and were paid by Virtu Financial. Secondary Offering In November 2015, an offering (the “Secondary Offering”) of 6,473,371 shares of the Company’s Class A common stock was completed by the Company and certain selling stockholders affiliated with Silver Lake Partners. The selling stockholders sold 6,075,837 shares of Class A common stock and the Company sold 397,534 shares of Class A common stock at a price to the public of $22.15 per share. The selling stockholders received all of the net proceeds from the sale of shares of Class A common stock by them in the offering. The Company used its net proceeds from the offering to purchase common units in Virtu Financial (and paired shares of Class C common stock) from one of its non-executive employees at a net price equal to the price paid by the underwriters for shares of its Class A common stock. As a result of the completion of the IPO, the Reorganization Transactions and the Secondary Offering, the Company holds approximately 27.5% interest in Virtu Financial at December 31, 2015. 2015 Management Incentive Plan VFI’s Board of Directors and stockholders adopted the 2015 Management Incentive Plan, which became effective upon consummation of the IPO. The 2015 Management Incentive Plan provides for the grant of stock options, restricted stock units, and other awards based on an aggregate of 12,000,000 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. |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Share-based Compensation | |
Share-based Compensation | 14. Share-based Compensation Share-based compensation prior to the Company’s Reorganization completed on April 15, 2015 and IPO commenced on April 16, 2015: During the years ended December 31, 2015, 2014, and 2013 , the Company recorded expense relating to non-voting members’ interests, which as described above (Note 13), were originally granted as Class A-2 profits interests and were reclassified into non-voting common interest units in connection with the Reorganization Transactions. The non-voting members’ interests are subject to the same vesting requirements as the prior Class A-2 profits interests, which vested immediately or over a period of up to four years, and in each case are subject to repurchase provisions upon certain termination events, as described above (Note 13). These awards are accounted for as equity awards and are measured at the date of grant. The Company recognized compensation expense of $1.5 million, $16.0 million, and $13.4 million for the years ended December 31, 2015, 2014, and 2013 , respectively, related to the non-voting members’ interests (formerly Class A-2 profits interests). As of December 31, 2015 , total unrecognized share-based compensation expense related to unvested non-voting members’ interests (formerly Class A-2 profits interests) was $2.2 million and this amount is expected to be recognized over a weighted average period of 1.6 years. Activity in the non-voting members’ interests (formerly Class A-2 profits interests) is as follows: Weighted Weighted Average Number of Average Fair Remaining Interests Value Life Outstanding December 31, 2013 $ Interests granted — Interests repurchased — Outstanding December 31, 2014 $ Interests granted Interests repurchased — Outstanding immediately prior to the Reorganization Transactions $ As indicated in Note 13, Class B and East MIP Class B interests were subject to time based vesting over four years and only fully vested upon the consummation of a qualifying capital transaction by the Company, including an IPO. Upon the consummation of the IPO, certain Class B and East MIP Class B interests became vested, resulting in a compensation expense of $41.4 million, which reflected the fair value of the outstanding time-vested Class B and East MIP Class B interests measured at the date of grant. Additional compensation expense in respect of Class B and East MIP Class B interests still subject to time vesting for the year ended December 31, 2015 was $3.5 million. The total expense for the year ended December 31, 2015 was $44.9 million. The compensation expense related to Class B and East MIP Class B interests was included within charges related to share based compensation at IPO in the consolidated statements of comprehensive income. As of December 31, 2014 , a capital transaction was not considered probable, and therefore none of the Class B or East MIP Class B interests were vested, and no compensation expense was recognized relating to these awards in the prior years. As of December 31, 2015, total unrecognized share-based compensation expense related to unvested Class B interests and East MIP Class B interest was $2.1 million and this amount is expected to be recognized over a weighted average period of 1.8 years. Additionally, in connection with the compensation charges related to Class B and East MIP Class B interests mentioned above, the Company capitalized $9.2 million for the year ended December 31, 2015. The related amortization costs were approximately $8.5 million for the year ended December 31, 2015. The costs attributable to employees incurred in development of software for internal use were included within charges related to share based compensation at IPO in the consolidated statements of comprehensive income. The fair value of the Class A-2 profits, Class B and East MIP Class B interests was estimated by the Company using an option pricing methodology based on expected volatility, risk-free rates and expected life. Expected volatility is calculated based on companies in the same peer group as the Company. The weighted-average assumptions used by the Company in estimating the grant date fair values of the Class A-2 profits, Class B and East MIP Class B interests for the years ended December 31, 2015, 2014 and 2013 are summarized below: Year Ended December 31, 2015 2014 2013 Expected life (in years) Weighted average risk free interest rate % % % Expected stock price volatility % % % Expected dividend yield — — — In connection with the Reorganization Transactions, all Class A-2 profits interests, Class B and East MIP Class B interests were reclassified into non-voting common interest units. As of December 31, 2015, there were 15,394,426 non-voting common interest units outstanding related to the aforementioned interests. Share-based compensation after the Company’s Reorganization completed on April 15, 2015 and IPO completed on April 16, 2015: Stock options Pursuant to the 2015 Management Incentive Plan as described above (Note 13) and in connection with the IPO, non-qualified stock options to purchase 9,228,000 shares of Class A Common Stock were granted, each of which vests in equal annual installments over a period of 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, 2015: Options Outstanding Options Exercisable Weighted Average Weighted Average Weighted Average Number of Exercise Price Remaining Number of Exercise Price Options Per Share Contractual Life Options Per Share At December 31, 2014 — $ — — — $ — Granted — — Exercised — — — — — Forfeited or expired — — At December 31, 2015 $ — $ — The fair value of the stock option grants was determined through the application of the Black-Scholes-Merton model with the following assumptions: Year Ended December 31, 2015 Expected life (in years) Weighted average risk free interest rate % Expected stock price volatility % Expected dividend yield % Weighted average fair value at grant date $ 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 $4.7 million of compensation expense in relation to the stock options issued and outstanding for the year ended December 31, 2015. As of December 31, 2015 , total unrecognized share-based compensation expense related to unvested stock options was $22.4 million and this amount is to be recognized over a weighted average period of 3. 3 years. Class A common stock and Restricted Stock Units Pursuant to the 2015 Management Incentive Plan as described above (Note 13) and in connection with and subsequent to the IPO, 576,693 shares of immediately vested Class A common stock and 984,466 restricted stock units were granted, which vest over a period of up to 4 years. The fair value of the Class A common stock and restricted stock units was determined based on the volume weighted average price during the three days preceding the grant and will be recognized on a straight line basis over the vesting period. The following table summarizes activity related to the restricted stock units for the year ended December 31, 2015: Weighted Number of Average Fair Shares Value At December 31, 2014 — $ — Granted Forfeited — — Vested — — At December 31, 2015 $ The Company recognized $13.7 million of compensation expense in relation to the Class A common stock and restricted stock units issued for the year ended December 31, 2015. As of December 31, 2015, total unrecognized share-based compensation expense related to unvested restricted stock units was $20.9 million, and this amount is to be recognized over a weighted average period of 3.0 years. |
Property, Equipment and Capital
Property, Equipment and Capitalized Software | 12 Months Ended |
Dec. 31, 2015 | |
Property, Equipment and Capitalized Software | |
Property, Equipment and Capitalized Software | 15. Property, Equipment and Capitalized Software Property, equipment and capitalized software consisted of the following at December 31, 2015 and 2014: December 31, (in thousands) 2015 2014 Capitalized software costs $ $ Leasehold improvements Furniture and equipment Land Less: Accumulated depreciation and amortization Total property, equipment and capitalized software, net $ $ Depreciation expense for property and equipment for the years ended December 31, 2015, 2014, and 2013 was approximately $24.0 million, $20.0 million and $12.9 million, respectively, and is included within depreciation and amortization expense in the accompanying consolidated statements of comprehensive income. Amortization expense for capitalized software for years ended December 31, 2015, 2014 and 2013 was approximately $9.6 million, $10.4 million and $11.0 million, respectively, and is included within depreciation and amortization expense in the accompanying consolidated statements of comprehensive income. |
Regulatory Requirement
Regulatory Requirement | 12 Months Ended |
Dec. 31, 2015 | |
Regulatory Requirement | |
Regulatory Requirement | 16. Regulatory Requirement As of December 31, 2015 , two 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 two broker-dealer subsidiaries. At December 31, 2015, the subsidiaries had net capital of approximately $64.2 million and $8.5 million, which was approximately $63.2 million and $7.5 million in excess of its required net capital of $1.0 million and $1.0 million, respectively. At December 31, 2014 , the subsidiaries had net capital of approximately $59.8 million and $8.1 million, which was approximately $58.8 million and $7.1 million in excess of its required net capital of $1.0 million and $1.0 million, respectively. Pursuant to NYSE and NYSE MKT (formerly NYSE Amex) rules, the Company was also required to maintain $1.9 million and $3.7 million of capital in connection with the operation of the Company's Designated Market Maker (“DMM”) business as of December 31, 2015 and 2014, respectively. The required amount is determined under the exchange rules as the greater of $1 million or 15% of the market value of 60 trading units for each symbol in which the Company is registered as the DMM. |
Geographic Information
Geographic Information | 12 Months Ended |
Dec. 31, 2015 | |
Geographic Information | |
Geographic Information | 17. Geographic Information 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 of our 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, 2015, 2014, and 2013 : For the Years Ended December 31, (in thousands) 2015 2014 2013 Revenues: United States $ $ $ Australia Ireland Singapore China — — United Kingdom — — Total revenues $ $ $ |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | |
Related Party Transactions | 18. Related Party Transactions As of December 31, 2015 , and December 31, 2014 , the Company had a payable of $ 0.2 million and $0.4 million to its affiliates, respectively. In the ordinary course of business, the Company purchases and leases computer equipment and maintenance and support from affiliates of Dell Inc. (“Dell”). Silver Lake and its affiliates have a significant ownership interest in Dell. During the years ended December 31, 2015, 2014, and 2013 , the Company paid $3.5 million, $ 1.0 million, and $1.4 million, respectively, to Dell for these purchases and leases. Similarly, in the ordinary course of business, the Company purchases market data and related services from Interactive Data Pricing and Reference Data, Inc (“Interactive Data”) and SunGard Securities Finance LLC (“SunGard”). Silver Lake and its affiliates have a significant ownership interest in Interactive Data and SunGard. During the years ended December 31, 2015, 2014, and 2013 , the Company paid $0.4 million, $0.3 million, and $0.2 million, respectively, to Interactive Data for these purchases. During the years ended December 31, 2015, 2014, and 2013 , the Company paid $0.2 million, $0. 2 million, $0.2 million, respectively, to Sungard for these purchases. Finally, in the ordinary course of business, the Company purchases telecommunications services from Singapore Telecommunications Limited (“Singtel”). Temasek and its affiliates have a significant ownership interest in Singtel. During the years ended December 31, 2015, 2014, and 2013 , the Company paid $0.1 million, $0.2 million, and $0.1 million, respectively, to Singtel for these purchases. The Company has employed the son of the Company’s Founder and Executive Chairman, as a trader. The Company paid approximately $0.8 million, $0.6 million, and $0.5 million for the years ended 2015, 2014 and 2013, respectively. This employee was also granted 60,000 stock options with respect to shares of our Class A common stock under the 2015 Management Incentive Plan. The Company has engaged a member of the Board of Directors to provide leadership consulting services. The Company has paid approximately $0.1 million, $0.1 million and $0.2 million for such engagement for the years ended 2015, 2014 and 2013, respectively. The Company entered into certain futures clearing transactions with a futures commission merchant owned by the Company’s Founder and Executive Chairman, in the ordinary course of business. In December 2013, Founder and Executive Chairman disposed of its interests in Pioneer Futures, Inc. Additionally, the Company entered into a sublease arrangement with an affiliate of the Company’s Founder and Executive Chairman for office space no longer used by the Company. For the year ended December 31, 2015, the Company recognized $0.1 million pursuant to this arrangement. |
Parent Company
Parent Company | 12 Months Ended |
Dec. 31, 2015 | |
Parent Company | |
Parent Company | 19. Parent Company VFI is a managing member of Virtu Financial, which guarantees the indebtedness of its direct subsidiary under the senior secured facility (Note 8). 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 the credit agreement. 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. The financial statements as of December 31, 2015 and for the year then ended relate to VFI for the period following the commencement of its IPO on April 16, and to Virtu Financial for period preceding. The condensed statement of financial condition as of December 31, 2015 reflects the financial condition of VFI and the condensed statement of financial condition as of December 31, 2014 reflects the financial condition of Virtu Financial. The condensed statements of comprehensive income and of cash flows for the year ended December 31, 2015 reflect the condensed operating results and cash flows of Virtu Financial prior to April 15, 2015 and reflect the condensed operating results and cash flows of VFI from April 16, 2015 through December 31, 2015. Virtu Financial, Inc. (Parent Company Only) Condensed Statements of Financial Condition As of December 31, (In thousands except interest data) 2015 2014 Assets Cash $ $ Deferred tax asset — Investment in subsidiary Other assets Receivable from subsidiaries Total assets $ $ Liabilities, redeemable membership interest and equity Liabilities Payable to affiliate $ — $ Accounts payable and accrued expenses and other liabilities Tax receivable agreement obligations — Total liabilities $ $ Class A-1 redeemable membership interest — Stockholders' / Members' equity Class A-1 — Authorized and Issued — 0 and 1,964,826 interests, Outstanding — 0 and 1,964,826 interests, at December 31, 2015 and 2014, respectively — Class A-2 — Authorized and Issued — 0 and 101,381,332 interests, Outstanding — 0 and 99,855,666 interests, at December 31, 2015 and 2014, respectively — Class A common stock (par value $0.00001) , Authorized — 1,000,000,000 and 0 shares, Issued — 38,379,858 and 0 shares, Outstanding — 38,210,209 and 0 shares at December 31, 2015 and 2014, respectively — — Class B common stock (par value $0.00001) , Authorized — 175,000,000 and 0 shares, Issued and Outstanding — 0 and 0 shares at December 31, 2015 and 2014, respectively — — Class C common stock (par value $0.00001) , Authorized — 90,000,000 and 0 shares, Issued and Outstanding — 20,976,598 and 0 shares at December 31, 2015 and 2014, respectively — — Class D common stock (par value $0.00001) , Authorized — 175,000,000 and 0 shares, Issued and Outstanding — 79,610,490 and 0 shares at December 31, 2015 and 2014, respectively — Treasury stock, at cost, 169,649 and 0 shares at December 31, 2015 and 2014, respectively — Additional paid-in capital — Retained Earnings (Accumulated deficit) Accumulated other comprehensive income (loss) Total stockholders' / members' equity $ $ Total liabilities, redeemable membership interest and equity $ $ Virtu Financial, Inc. (Parent Company Only) Condensed Statements of Comprehensive Income For the Years Ended December 31, (in thousands) 2015 2014 2013 Revenues: Service fee revenue $ $ $ Operating Expenses: Operations and administrative Income (loss) before equity in income of subsidiary — — Equity in income of subsidiary, net of tax Net income $ $ $ Net income attributable to common stockholders — — Other comprehensive income (loss): Foreign currency translation adjustment, net of taxes Comprehensive income $ $ $ Virtu Financial, Inc. (Parent Company Only) Condensed Statements of Cash Flows For the Years Ended December 31, (in thousands) 2015 2014 2013 Cash flows from operating activities Net income $ $ $ Adjustments to reconcile net income to net cash provided by operating activities: Equity in income of subsidiary, net of tax Deferred taxes — — Changes in operating assets and liabilities: Net cash provided by (used in) operating activities Cash flows from investing activities Investments in subsidiaries, equity basis Net cash provided by investing activities Cash flows from financing activities Distribution to members through April 15, 2015 Distribution from Virtu Financial to non-controlling interest, after April 15, 2015 — — Dividends to Class A shareholders — — Proceeds from issuance of Class A-2 interests in connection with the Temasek transaction described in Note 13 — — Repurchase of Class A-2 interests in connection with the Temasek transaction described in Note 13 — — Repurchase of Class A-2 interests Purchase of treasury stock — — Issuance of common stock, net of offering costs — — Repurchase of Virtu Financial Units and corresponding number of Class A and C common stock in connections with IPO — — Issuance of common stock in connection with secondary offering, net of offering costs — — Repurchase of Virtu Financial Units and corresponding number of Class A and C common stock in connection with secondary offering — — Net cash used in financing activities $ $ $ Net increase (decrease) in Cash $ $ $ Cash, beginning of period Cash, end of period $ $ $ Supplemental disclosure of cash flow information: Taxes paid $ $ — $ — Non-cash financing activities Tax receivable agreement described in Note 4 - - Secondary offering described in Note 13 - - - Temasek transaction described in Note 13 - - - Repurchase of Class A-2 interests - - |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events | |
Subsequent Events | 20. 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: Virtu Financial made distributions to its members, including the Company, in the amount of $55.0 million from January 1, 2016, to March 25, 2016. 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 was paid on March 15, 2016 to holders of record as of March 1, 2016. In January 2016 the Company renewed its arrangement to provide technology services to a third party for an additional one year period. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Use of Estimates | Use of Estimates The Company's consolidated financial statements are prepared in conformity with US GAAP, which require management to make estimates and assumptions regarding fair value measurements including trading assets and liabilities, goodwill and intangibles, compensation accruals, capitalized software, 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 computed in accordance with ASC 260, Earnings per Share. Basic EPS is computed by dividing the net income available for common stockholders by the weighted average number of shares outstanding for that 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, with no adjustments to net income available for common stockholders for dilutive potential common shares. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers cash equivalents as highly liquid investments with original maturities of less than three months when acquired. The Company maintains cash in bank deposit accounts that, at times, may exceed federally insured limits. |
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. These transactions are collateralized by cash 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 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. For these transactions, the interest received or paid by the Company 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 takes 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. |
Receivables from/Payables to Broker-dealers and Clearing Organizations | Receivables from/Payables to Broker-dealers and Clearing Organizations 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. At December 31, 2015 and 2014, receivables from and payables to broker-dealers and clearing organizations primarily represent 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. The Company presents its balances, including outstanding principal balances on all credit facilities, on a net basis by counterparty within receivable from and payable to broker-dealers and clearing organizations when the criteria for offsetting are met. In the normal course of business, substantially all of the Company’s securities transactions, money balances, and security positions are transacted with several 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’s management monitors the financial condition of such brokers and does not anticipate 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 The Company carries 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, on the consolidated statements of comprehensive income. |
Fair Value Measurements | Fair Value Measurements At December 31, 2015 and 2014, substantially all of Company’s financial assets and liabilities, except for long-term borrowings and certain exchange memberships, were carried at fair value based on published market prices and are marked to market daily or were short-term in nature and were carried at amounts that approximate fair value. The Company’s assets and liabilities have been categorized based upon a fair value hierarchy in accordance with ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value 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. ASC 820-10 requires 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; Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Transfers in or out are recognized based on the beginning fair value of the period in which they occurred. There were no transfers of financial instruments between levels during the years ended December 31, 2015, 2014, and 2013 . |
Derivative Instruments | Derivative Instruments Derivative instruments used for trading purposes, including economic hedges of trading instruments, are carried at fair value. 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 derivative instruments are currencies which are actively traded. The Company presents its derivatives balances on a net basis by counterparty when the criteria for offsetting are met. Derivative instruments used for economic hedging purposes include futures, forward contracts, and options. Unrealized gains or losses on these derivative instruments are recognized currently in the consolidated statements of comprehensive income as trading income, net. The Company does not apply hedge accounting as defined in ASC 815, Derivatives and Hedging , and accordingly unrealized gains or losses on these derivative instruments are recognized currently in the consolidated statements of comprehensive income as trading income, net. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost, less accumulated depreciation, except for the assets acquired in connection with the acquisition of MTH which were recorded at fair value on the date of acquisition. Depreciation is provided using the straight-line method over estimated useful lives of the underlying asset. 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. The useful lives of furniture, fixtures, equipment and leasehold improvements are as follows: Furniture, fixtures and equipment 3 to 7 years Leasehold improvements 7 years or length of lease term, whichever is shorter |
Capitalized Software | Capitalized Software The Company accounts for the costs of computer software developed or obtained for internal use in accordance with ASC 350-40, Internal-Use 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. The Company’s capitalized software development costs excluding the charges recognized in relation to the IPO disclosed below were approximately $10.1 million, $9.8 million, and $10.1 million for years ended December 31, 2015, 2014 and 2013 , respectively. The related amortization expense was approximately $9.6 million, $10.4 million, and $11.0 million for the years ended December 31, 2015, 2014, and 2013 , respectively. Additionally, in connection with charges related to share based compensation recognized upon the IPO (Note 13), the Company capitalized and amortized costs for employees in developing internal-use software, which were included within charges related to share based compensation at IPO in the consolidated statements of comprehensive income. The Company capitalized charges related to share based compensation at IPO of approximately $9.2 million for the year ended December 31, 2015. The related amortization expense was approximately $8.5 million for the year ended December 31, 2015. Capitalized software development costs and related accumulated amortization are included in property, equipment and capitalized software on the accompanying consolidated statements of financial condition and are amortized over a period of 1.4 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 our acquisitions. Goodwill is not amortized but is tested for impairment on an annual basis and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. The Company operates as one operating segment, which is our only reporting unit. The goodwill impairment test is a two-step process. The first step is used to identify potential impairment and compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test must be performed. The second step is used to measure the amount of impairment loss, if any, and compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount of reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss must be recognized in an amount equal to that excess. The Company tests goodwill for impairment on an annual basis on July 1 and on an interim basis when certain events or circumstances exist. In the impairment test as of July 1, 2015, the primary valuation method used to estimate the fair value of the Company’s reporting unit was the market capitalization approach based on the market price of its Class A Common Stock, which the management believes to be an appropriate indicator of its fair value. In the impairment test as of July 1, 2014, the primary valuation methods used to estimate the fair value of the Company’s reporting unit were the income and market approaches. In applying the income approach, projected available cash flows and the terminal value were discounted to present value to derive an indication of fair value of the business enterprise. The market approach compared the reporting unit to selected reasonably similar publicly-traded companies. Based on the results of the annual impairment tests performed, no goodwill impairment was recognized during the years ended December 31, 2015, 2014, and 2013 , respectively. |
Intangible Assets | Intangible Assets The Company amortizes finite-lived intangible assets over their estimated useful lives. Finite-lived intangible assets are tested for impairment annually or when impairment indicators are present, and if impaired, 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, in accordance with ASC 940-340, Financial Services — Broker and Dealers. Exchange stock includes shares that entitles the Company to certain trading privileges. The shares are marked to market with the corresponding gain or loss recorded in the consolidated statements of comprehensive income. The Company’s exchange memberships and stock are included in other assets on the consolidated statements of financial condition. |
Trading Income | Trading Income Trading income 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. |
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 the accrual basis. |
Technology Services | Technology Services Technology services revenues consist of fees paid by third parties for licensing of our proprietary risk management and trading infrastructure technology and provision of associated management and hosting services. These fees include both upfront and annual recurring fees. Revenue from technology services is recognized once persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. Revenue is recognized ratably over the contractual service period. |
Rebates | Rebates 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. |
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, in accordance with ASC 740, Income Taxes 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. 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, 2015 and 2014 or the results of operations or cash flows for the years ended December 31, 2015, 2014, and 2013 . |
Comprehensive Income and Foreign Currency Translation | Comprehensive Income and Foreign Currency Translation The Company’s operating results are reported in the consolidated statements of comprehensive income pursuant to Accounting Standards Update 2011-05, Comprehensive Income. Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). OCI is comprised of revenues, expenses, gains and losses that are reported in the comprehensive income section of the consolidated statements of comprehensive income, but are excluded from reported net income. 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 income statement accounts 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 other comprehensive income, a separate component of members’ equity. |
Share-Based Compensation | Share-Based Compensation The Company accounts for share-based compensation transactions with employees under the provisions of ASC 718, Compensation: Stock Compensation. Share-based compensation transactions with employees are measured based on the fair value of equity instruments issued. 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 Transaction and the IPO pursuant to the VFI 2015 Management Incentive Plan (the “2015 Management Incentive Plan”) were in the form of stock options, Class A common stock and restricted stock units. The fair value of the stock option grants are determined through the application of the Black-Scholes-Merton model. The fair value of the Class A common stock and restricted stock units are determined based on the volume weighted average price for the three days preceding the grant, and with respect to the restricted stock units, 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 common stock, the vesting of restricted stock units or the exercise of stock options. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue - In May 2014, the FASB issued ASU No. 2014-09, 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. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU No. 2015-14 defers the effective date of ASU No. 2014-09 by one year for public companies. ASU 2015-14 applies to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company has not yet determined the potential effects of the adoption of ASU 2014-09 and ASU 2015-14 on its consolidated financial statements. Repurchase Agreements - In June 2014, the FASB released ASU No. 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. The amendment changes the accounting for repurchase financing transactions and for repurchase-to-maturity transactions to secured borrowing accounting. The accounting changes were effective for the Company beginning in the first quarter of 2015. The effect of the accounting changes on transactions outstanding as of the effective date is required to be presented as a cumulative effect adjustment to retained earnings as of January 1, 2015. The amendment also requires additional disclosures for repurchase agreements and securities lending transactions regarding the class of collateral pledged and the remaining contractual maturity of the agreements, as well as a discussion on the potential risks associated with the agreements and the related collateral pledged, as well as how those risks are managed. Additional disclosures are required for repurchase agreements, securities lending transactions, sales with a total return swap, and other similar transfers of financial assets that are accounted for as a sale. The ASU did not have an impact on the Company’s consolidated financial statements except for the additional disclosures stated in Note 9. Compensation - In June 2014, the Emerging Issues Task Force (the ‘‘EITF’’) of the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The amendment requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015 (fiscal year 2016 for the Company). Earlier adoption is permitted. This ASU is not expected to have an impact on the Company’s consolidated financial statements. Going Concern — In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The guidance will explicitly require management to assess an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. The new standard will be effective in the first annual period ending after December 15, 2016 (fiscal year 2017 for the Company). Earlier adoption is permitted. The Company will implement this new standard on the required effective date. This ASU is not expected to have an impact on the Company’s consolidated financial statements. Hybrid Financial Instruments — In November 2014, the EITF of the FASB issued ASU 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity. The ASU requires that for hybrid financial instruments issued in the form of a share, an entity should determine the nature of the host contract by considering all stated and implied substantive terms and features of the hybrid financial instrument, weighing each term and feature on the basis of relevant facts and circumstances. An entity should use judgment based on an evaluation of all the relevant terms and features, and should consider the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption, including adoption in an interim period, is permitted. This ASU did not have an impact on the Company’s consolidated financial statements. Debt Issuance Costs — In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. The ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, rather than as a deferred charge asset. The ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015 (fiscal year 2016 for the Company), and interim periods within those fiscal years. Early adoption of the amendment is permitted and the Company has elected to early adopt this ASU effective as of March 31 , 2015. The new guidance has been applied on a retrospective basis, wherein the accompanying consolidated statements of financial condition have been adjusted to reflect the period-specific effects of applying the new guidance. In August 2015, the FASB issued ASU 2015-15, Interest – Presentation and Subsequent Measurement of Debit Issuance Costs Associated with Line-of-Credit Arrangement. The ASU stated that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company reports debt issuance cost related to the senior secured credit facility as a direct deduction from the carrying amount of debt liability. Refer to Note 8 for additional information regarding the impact of ASU 2015-03 and ASU 2015-15 on the Company’s consolidated financial statements. 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 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 income statement 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. New quantitative and qualitative disclosures, including significant judgments made by management, will be required to provide greater information regarding the extent of revenue and expense recognized and expected to be recognized from existing contracts. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the potential effects of the adoption of ASU 2016-02 on the Company’s consolidated financial statements. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Schedule of useful lives of furniture, fixtures, equipment and leasehold improvements | Furniture, fixtures and equipment 3 to 7 years Leasehold improvements 7 years or length of lease term, whichever is shorter |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings per Share | |
Schedule of reconciliation of net income before noncontrolling interest to net income available for common stockholders | For the Year ended December 31 (in thousands) 2015 Income before income taxes and noncontrolling interest $ Provision for income taxes Net income Net income allocable to members of Virtu Financial (for the period January 1, 2015 through April 15, 2015) Noncontrolling interest subsequent to April 15, 2015 Net income available for common stockholders $ |
Schedule of basic earnings per share | For the Year Ended December 31 (in thousands, except for share or per share data) 2015 Basic earnings per share: Net income available for common stockholders $ Weighted average shares of common stock outstanding: Class A Basic Earnings per share $ |
Schedule of diluted earnings per share | For the Year Ended December 31 (in thousands, except for share or per share data) 2015 Diluted earnings per share: Net income available for common stockholders $ Weighted average shares of common stock outstanding: Class A Issued and outstanding Issuable pursuant to 2015 Management Incentive Plan Diluted Earnings per share $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets | |
Schedule of acquired intangible assets | As of December 31, 2015 Gross Carrying Accumulated Net Carrying Useful Lives (in thousands) Amount Amortization Amount (Years) Purchased technology $ $ $ — to 2.5 ETF issuer relationships 9 ETF buyer relationships 9 $ $ $ As of December 31, 2014 Gross Carrying Accumulated Net Carrying Useful Lives (in thousands) Amount Amortization Amount (Years) Purchased technology $ $ $ — to 2.5 ETF issuer relationships 9 ETF buyer relationships 9 $ $ $ |
Receivables from_Payables to 32
Receivables from/Payables to Broker-Dealers and Clearing Organizations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables from/Payables to Broker-Dealers and Clearing Organizations | |
Summary of receivables from and payables to brokers-dealers and clearing organizations | December 31, (in thousands) 2015 2014 Assets Due from prime brokers $ $ Deposits with clearing organizations Net equity with futures commission merchants Unsettled trades with clearing organization Securities failed to deliver Total receivables from broker-dealers and clearing organizations $ $ Liabilities Due to prime brokers $ $ Net equity with futures commission merchants Unsettled trades with clearing organization Securities failed to receive — Total payables to broker-dealers and clearing organizations $ $ |
Collateralized Transactions (Ta
Collateralized Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Collateralized Transactions | |
Schedule of amounts related to collateralized transactions | December 31, (in thousands) 2015 2014 Securities received as collateral: Securities borrowed $ $ Securities purchased under agreements to resell $ $ |
Schedule of financial instruments owned and pledged, where counterparty has right to repledge | December 31, (in thousands) 2015 2014 Equities $ $ Exchange traded notes $ $ |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Borrowings | |
Schedule of aggregate future required principal payments based on terms of loan | (in thousands) 2016 $ 2017 2018 2019 and thereafter Total maturities of long-term debt $ |
Financial Assets and Liabilit35
Financial Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Financial Assets and Liabilities | |
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, 2015 : December 31, 2015 Quoted Prices Significant in Active Other Significant Counterparty Markets for Observable Unobservable and Cash Identical Assets Inputs Inputs Collateral Total Fair (in thousands) (Level 1) (Level 2) (Level 3) Netting Value Assets Financial instruments owned, at fair value: Equity securities $ $ $ — $ — $ U.S. and Non-U.S. government obligations — — — Exchange traded notes — — — Interest rate swaps — — — Currency forwards — — Options — — — $ $ $ — $ $ Financial instruments owned, pledged as collateral: Equity securities $ $ — $ — $ — $ Exchange traded notes — — — $ $ — $ — $ — $ Other Assets Exchange stock $ $ — $ — $ — $ $ $ — $ — $ — $ Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ $ $ — $ — $ U.S. and Non-U.S. government obligations — — — Exchange traded notes — — — Interest rate swaps — — — Currency forwards — — — Options — — — $ $ $ — $ $ Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2014 : December 31, 2014 Quoted Prices in Active Significant Markets for Other Significant Counterparty Identical Observable Unobservable and Cash Assets Inputs Inputs Collateral Total Fair (in thousands) (Level 1) (Level 2) (Level 3) Netting Value Assets Financial instruments owned, at fair value: Equity securities $ $ $ — $ — $ U.S. and non-U.S. government obligations — — — Exchange traded notes — — — Currency forwards — — Options — — — $ $ $ — $ $ Financial instruments owned, pledged as collateral: Equity securities $ $ — $ — $ — $ Exchange traded notes — — — $ $ — $ — $ — $ Other Assets Exchange stock $ $ — $ — $ — $ $ $ — $ — $ — $ Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ $ $ — $ — $ U.S. and non-U.S. government obligations — — — Exchange traded notes — — — Currency forwards — — Options — — — Interest rate swaps — — — $ $ $ — $ $ |
Summary of netting of certain financial assets and financial liabilities | December 31, 2015 Net Amounts of Gross Amounts Assets Presented Gross Amounts Not Offset In the Offset in the in the Consolidated Gross Amounts Consolidated Consolidated Statement of Financial Condition of Recognized Statement of Statement of Financial Cash Collateral (in thousands) Assets Financial Condition Financial Condition Instruments Received Net Amount Offsetting of Financial Assets: Securities borrowed $ $ — $ $ $ $ Securities purchased under agreements to resell — — — Trading assets, at fair value: Currency forwards — — Options — — Interest rate swaps — — — Total $ $ $ $ $ $ Net Amounts of Gross Amounts Assets Presented Gross Amounts Not Offset In the Offset in the in the Consolidated Gross Amounts Consolidated Consolidated Statement of Financial Condition of Recognized Statement of Statement of Financial Cash Collateral Assets Financial Condition Financial Condition Instruments Received Net Amount Offsetting of Financial Liabilities: Securities loaned $ $ — $ $ $ — $ Securities sold under agreements to repurchase — — — — — — Trading liabilities, at fair value: Currency forwards — — — — Options — — Interest rate swaps — — Total $ $ $ $ $ $ December 31, 2014 Net Amounts of Gross Amounts Assets Presented Gross Amounts Not Offset In the Offset in the in the Consolidated Gross Amounts Consolidated Consolidated Statement of Financial Condition of Recognized Statement of Statement of Financial Cash Collateral (in thousands) Assets Financial Condition Financial Condition Instruments Received Net Amount Offsetting of Financial Assets: Securities borrowed $ $ — $ $ $ — $ Securities purchased under agreements to resell — — — Trading assets, at fair value: Currency forwards — — Options — — Total $ $ $ $ $ — $ Net Amounts of Liabilities Gross Amounts Presented Gross Amounts Not Offset In the Offset in the in the Consolidated Gross Amounts Consolidated Consolidated Statement of Financial Condition of Recognized Statement of Statement of Financial Cash Collateral (in thousands) Liabilities Financial Condition Financial Condition Instruments Pledged Net Amount Offsetting of Financial Liabilities: Securities loaned $ — $ $ $ $ Securities sold under agreements to repurchase — — — Trading liabilities, at fair value: Currency forwards — — Options — — — Interest rate swaps — — — Total $ $ $ $ $ $ |
Summary of gross obligations for repurchase agreement and securities borrowed transactions by remaining contractual maturity and class of collateral pledged | December 31, 2015 Remaining Contractual Maturity Overnight and Less than 30 - 90 Over 90 (in thousands) Continuous 30 days days Days Total Securities lending transactions: Equity securities $ $ — $ — $ — $ Total $ $ — $ — $ — $ |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments | |
Schedule of fair value of derivative instruments on a gross basis | (in thousands) 2015 2014 Derivatives Assets Balance Sheet Classification Fair Value Notional Fair Value Notional Equities futures Receivables from broker dealers and clearing organizations $ $ $ $ Commodity futures Receivables from broker dealers and clearing organizations Currency futures Receivables from broker dealers and clearing organizations Treasury futures Receivables from broker dealers and clearing organizations Options Financial instruments owned Currency forwards Financial instruments owned Interest rate swaps Financial instruments owned — — Derivatives Liabilities Balance Sheet Classification Fair Value Notional Fair Value Notional Equities futures Payables to broker dealers and clearing organizations $ $ $ $ Commodity futures Payables to broker dealers and clearing organizations Currency futures Payables to broker dealers and clearing organizations Options Financial instruments sold, not yet purchased Currency forwards Financial instruments sold, not yet purchased Interest rate swaps Financial instruments sold, not yet purchased |
Schedule of gain from derivative instruments not designated as hedging instruments | For the years ended December 31, (in thousands) 2015 2014 2013 Futures $ $ $ Currency forwards Options Interest rate swaps — $ $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Summary of income before income taxes | For the years ended December 31, 2015 2014 2013 (in thousands) U.S. operations $ $ $ Non-U.S. operations $ $ $ |
Summary of provision for income taxes | For the years ended December 31, (in thousands) 2015 2014 2013 Current provision Federal $ $ — $ — State and Local — — Foreign Deferred provision (benefit) Federal — — State and Local — — Foreign Provision for income taxes $ $ $ |
Schedule of reconciliation of the tax provision at U.S. Federal Statutory Rate to the provision for income taxes | December 31, 2015 2014 2013 (in thousands, except percentages) Tax provision at the U.S. federal statutory rate — — Less: rate attributable to noncontrolling interest — — State, local and foreign taxes, net of federal benefit % % % Provision for income taxes % % % |
Schedule of components of deferred tax assets and liabilities | December 31, (in thousands) 2015 2014 Deferred income tax assets Tax Receivable Agreement $ $ — Share-based compensation Fixed assets Total deferred income tax assets $ $ Deferred income tax liabilities Fixed assets — Total deferred income tax liabilities $ $ — |
Commitments, Contingencies an38
Commitments, Contingencies and Guarantees (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments, Contingencies and Guarantees | |
Schedule of minimum rental commitments under non-cancellable leases | Minimum Rental Commitments Year Ending December 31 Capital Operating 2016 2017 2018 2019 — 2020 — Thereafter — Total minimum lease payments $ $ |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Class A-2 profits interests | |
Schedule of activity | Weighted Weighted Average Number of Average Fair Remaining Interests Value Life Outstanding December 31, 2013 $ Interests granted — Interests repurchased — Outstanding December 31, 2014 $ Interests granted Interests repurchased — Outstanding immediately prior to the Reorganization Transactions $ |
East MIP | Class A-2 profits interests and Class B interests | |
Schedule of weighted-average assumptions used in estimating the grant date fair values | Year Ended December 31, 2015 2014 2013 Expected life (in years) Weighted average risk free interest rate % % % Expected stock price volatility % % % Expected dividend yield — — — |
Non-qualified stock options | |
Schedule of activity | Options Outstanding Options Exercisable Weighted Average Weighted Average Weighted Average Number of Exercise Price Remaining Number of Exercise Price Options Per Share Contractual Life Options Per Share At December 31, 2014 — $ — — — $ — Granted — — Exercised — — — — — Forfeited or expired — — At December 31, 2015 $ — $ — |
Schedule of weighted-average assumptions used in estimating the grant date fair values | Year Ended December 31, 2015 Expected life (in years) Weighted average risk free interest rate % Expected stock price volatility % Expected dividend yield % Weighted average fair value at grant date $ |
Restricted stock units | |
Schedule of activity related to restricted stock units | Weighted Number of Average Fair Shares Value At December 31, 2014 — $ — Granted Forfeited — — Vested — — At December 31, 2015 $ |
Property, Equipment and Capit40
Property, Equipment and Capitalized Software (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Equipment and Capitalized Software | |
Schedule of property, equipment and capitalized software | December 31, (in thousands) 2015 2014 Capitalized software costs $ $ Leasehold improvements Furniture and equipment Land Less: Accumulated depreciation and amortization Total property, equipment and capitalized software, net $ $ |
Geographic Information (Tables)
Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Geographic Information | |
Schedule of total revenues by geographic area | For the Years Ended December 31, (in thousands) 2015 2014 2013 Revenues: United States $ $ $ Australia Ireland Singapore China — — United Kingdom — — Total revenues $ $ $ |
Parent Company (Tables)
Parent Company (Tables) - Virtu Financial, Inc. | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Statements of Financial Condition | As of December 31, (In thousands except interest data) 2015 2014 Assets Cash $ $ Deferred tax asset — Investment in subsidiary Other assets Receivable from subsidiaries Total assets $ $ Liabilities, redeemable membership interest and equity Liabilities Payable to affiliate $ — $ Accounts payable and accrued expenses and other liabilities Tax receivable agreement obligations — Total liabilities $ $ Class A-1 redeemable membership interest — Stockholders' / Members' equity Class A-1 — Authorized and Issued — 0 and 1,964,826 interests, Outstanding — 0 and 1,964,826 interests, at December 31, 2015 and 2014, respectively — Class A-2 — Authorized and Issued — 0 and 101,381,332 interests, Outstanding — 0 and 99,855,666 interests, at December 31, 2015 and 2014, respectively — Class A common stock (par value $0.00001) , Authorized — 1,000,000,000 and 0 shares, Issued — 38,379,858 and 0 shares, Outstanding — 38,210,209 and 0 shares at December 31, 2015 and 2014, respectively — — Class B common stock (par value $0.00001) , Authorized — 175,000,000 and 0 shares, Issued and Outstanding — 0 and 0 shares at December 31, 2015 and 2014, respectively — — Class C common stock (par value $0.00001) , Authorized — 90,000,000 and 0 shares, Issued and Outstanding — 20,976,598 and 0 shares at December 31, 2015 and 2014, respectively — — Class D common stock (par value $0.00001) , Authorized — 175,000,000 and 0 shares, Issued and Outstanding — 79,610,490 and 0 shares at December 31, 2015 and 2014, respectively — Treasury stock, at cost, 169,649 and 0 shares at December 31, 2015 and 2014, respectively — Additional paid-in capital — Retained Earnings (Accumulated deficit) Accumulated other comprehensive income (loss) Total stockholders' / members' equity $ $ Total liabilities, redeemable membership interest and equity $ $ |
Condensed Statements of Comprehensive Income | For the Years Ended December 31, (in thousands) 2015 2014 2013 Revenues: Service fee revenue $ $ $ Operating Expenses: Operations and administrative Income (loss) before equity in income of subsidiary — — Equity in income of subsidiary, net of tax Net income $ $ $ Net income attributable to common stockholders — — Other comprehensive income (loss): Foreign currency translation adjustment, net of taxes Comprehensive income $ $ $ |
Condensed Statements of Cash Flows | For the Years Ended December 31, (in thousands) 2015 2014 2013 Cash flows from operating activities Net income $ $ $ Adjustments to reconcile net income to net cash provided by operating activities: Equity in income of subsidiary, net of tax Deferred taxes — — Changes in operating assets and liabilities: Net cash provided by (used in) operating activities Cash flows from investing activities Investments in subsidiaries, equity basis Net cash provided by investing activities Cash flows from financing activities Distribution to members through April 15, 2015 Distribution from Virtu Financial to non-controlling interest, after April 15, 2015 — — Dividends to Class A shareholders — — Proceeds from issuance of Class A-2 interests in connection with the Temasek transaction described in Note 13 — — Repurchase of Class A-2 interests in connection with the Temasek transaction described in Note 13 — — Repurchase of Class A-2 interests Purchase of treasury stock — — Issuance of common stock, net of offering costs — — Repurchase of Virtu Financial Units and corresponding number of Class A and C common stock in connections with IPO — — Issuance of common stock in connection with secondary offering, net of offering costs — — Repurchase of Virtu Financial Units and corresponding number of Class A and C common stock in connection with secondary offering — — Net cash used in financing activities $ $ $ Net increase (decrease) in Cash $ $ $ Cash, beginning of period Cash, end of period $ $ $ Supplemental disclosure of cash flow information: Taxes paid $ $ — $ — Non-cash financing activities Tax receivable agreement described in Note 4 - - Secondary offering described in Note 13 - - - Temasek transaction described in Note 13 - - - Repurchase of Class A-2 interests - - |
Organization and Basis of Pre43
Organization and Basis of Presentation (Details) | 12 Months Ended |
Dec. 31, 2015segmentitem | |
Number of businesses Company is managed and operated as | item | 1 |
Number of reportable segments | segment | 1 |
Virtu Financial | |
Ownership interest (as a percent) | 27.50% |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and Equipment and Capitalized Software | |||
Capitalized software development costs, excluding charges recognized in relation to the IPO | $ 10.1 | $ 9.8 | $ 10.1 |
Capitalized software development costs recognized upon the IPO | 9.2 | ||
Amortization expense for capitalized software, excluding charges recognized in relation to the IPO | 9.6 | 10.4 | 11 |
Amortization expense for capitalized software recognized upon the IPO | $ 8.5 | ||
Securities Borrowed and Securities Loaned | |||
Minimum initial collateral advanced or received expressed as a percentage of fair value of the underlying securities borrowed or loaned | 102.00% | ||
Fair Value Measurements | |||
Transfers of financial instruments between levels | $ 0 | $ 0 | $ 0 |
Furniture, fixtures and equipment | Minimum | |||
Property and Equipment and Capitalized Software | |||
Estimated useful lives | 3 years | ||
Furniture, fixtures and equipment | Maximum | |||
Property and Equipment and Capitalized Software | |||
Estimated useful lives | 7 years | ||
Leasehold improvements | |||
Property and Equipment and Capitalized Software | |||
Estimated useful lives | 7 years | ||
Capitalized software | Minimum | |||
Property and Equipment and Capitalized Software | |||
Estimated useful lives | 1 year 4 months 24 days | ||
Capitalized software | Maximum | |||
Property and Equipment and Capitalized Software | |||
Estimated useful lives | 2 years 6 months |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Goodwil and Income Taxes (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Goodwill | |||
Number of operating segments | item | 1 | ||
Goodwill impairment | $ 0 | $ 0 | $ 0 |
Income Taxes | |||
Uncertain tax positions | $ 0 | $ 0 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation (Details) - USD ($) $ in Thousands | 4 Months Ended | 9 Months Ended | 12 Months Ended | ||
Apr. 15, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of net income before minority interest to net income available for common stockholders | |||||
Income before income taxes and non-controlling interest | $ 215,929 | $ 193,558 | $ 187,600 | ||
Provision for income taxes | 18,439 | 3,501 | 5,397 | ||
Net income | $ 83,147 | $ 114,343 | 197,490 | $ 190,057 | $ 182,203 |
Noncontrolling interest subsequent to April 15, 2015 | $ (93,456) | (176,603) | |||
Net income available for common stockholders | $ 20,887 | ||||
Virtu Financial | |||||
Ownership interest (as a percent) | 27.50% | 27.50% | |||
Reconciliation of net income before minority interest to net income available for common stockholders | |||||
Net income allocable to members of Virtu Financial (for the period January 1, 2015 through April 15, 2015) | $ (83,147) |
Earnings Per Share - Basic (Det
Earnings Per Share - Basic (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Basic earnings per share | |
Net income available for common stockholders | $ | $ 20,887 |
Weighted average shares of common stock outstanding | |
Outstanding | shares | 34,964,312 |
Basic Earnings per share | $ / shares | $ 0.60 |
Class A | |
Weighted average shares of common stock outstanding | |
Outstanding | shares | 34,964,312 |
Basic Earnings per share | $ / shares | $ 0.60 |
Earnings Per Share - Diluted (D
Earnings Per Share - Diluted (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Diluted earnings per share | |
Net income available for common stockholders | $ | $ 20,887 |
Weighted average shares of common stock outstanding | |
Issued and outstanding | 34,964,312 |
Weighted average number of shares of common stock outstanding | 35,339,585 |
Diluted Earnings per share | $ / shares | $ 0.59 |
Class A | |
Weighted average shares of common stock outstanding | |
Issued and outstanding | 34,964,312 |
Virtu Financial, Inc. | |
Diluted earnings per share | |
Net income available for common stockholders | $ | $ 20,887 |
2015 Management Incentive Plan | Class A | |
Weighted average shares of common stock outstanding | |
Issuable pursuant to 2015 Management Incentive Plan | 375,273 |
Tax Receivable Agreements (Deta
Tax Receivable Agreements (Details) $ in Thousands | Apr. 15, 2015USD ($) | Dec. 31, 2015USD ($) |
Tax Receivable Agreements | ||
Payment on applicable cash tax savings (as a percent) | 85 | |
First payment due after filing of company's tax return | 120 days | |
Deferred tax assets related to exchange of units | $ 196,500 | |
Payments to Virtu Post-IPO Members and Investor Post-IPO Stockholders | 218,400 | |
Minimum tax receivable agreement obligation over the agreed period | 8,100 | |
Maximum tax receivable agreement obligation over the agreed period | $ 16,800 | |
Period over which the obligations are to be settled | 15 years | |
Reduction of paid-in capital for the difference between TRA liability and related deferred tax asset. | $ 21,900 | |
Deferred tax assets | $ 187,000 | |
Tax receivable agreement obligations | $ 218,399 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill and Intangible Assets | |||
Changes in carrying amount of goodwill | $ 0 | $ 0 | $ 0 |
Goodwill impairment | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Acquired intangible assets | |||
Gross Carrying Amount | $ 111,900 | $ 111,900 | |
Accumulated Amortization | 110,697 | 110,486 | |
Net Carrying Amount | 1,203 | 1,414 | |
Amortization expense relating to finite-lived intangible assets | 211 | 211 | $ 1,011 |
Purchased technology | |||
Acquired intangible assets | |||
Gross Carrying Amount | 110,000 | 110,000 | |
Accumulated Amortization | $ 110,000 | $ 110,000 | |
Purchased technology | Minimum | |||
Acquired intangible assets | |||
Useful Lives | 1 year 4 months 24 days | 1 year 4 months 24 days | |
Purchased technology | Maximum | |||
Acquired intangible assets | |||
Useful Lives | 2 years 6 months | 2 years 6 months | |
ETF issuer relationships | |||
Acquired intangible assets | |||
Gross Carrying Amount | $ 950 | $ 950 | |
Accumulated Amortization | 349 | 243 | |
Net Carrying Amount | $ 601 | $ 707 | |
Useful Lives | 9 years | 9 years | |
ETF buyer relationships | |||
Acquired intangible assets | |||
Gross Carrying Amount | $ 950 | $ 950 | |
Accumulated Amortization | 348 | 243 | |
Net Carrying Amount | $ 602 | $ 707 | |
Useful Lives | 9 years | 9 years |
Receivables from_Payables to 52
Receivables from/Payables to Broker-Dealers and Clearing Organizations (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Due from prime brokers | $ 101,372 | $ 67,556 |
Deposits with clearing organizations | 31,908 | 29,595 |
Net equity with futures commission merchants | 174,615 | 155,060 |
Unsettled trades with clearing organization | 102,890 | 55,929 |
Securities failed to deliver | 65,751 | 79,512 |
Total receivables from broker-dealers and clearing organizations | 476,536 | 387,652 |
Liabilities | ||
Due to prime brokers | 294,691 | 313,623 |
Net equity with futures commission merchants | 46,537 | 60,973 |
Unsettled trades with clearing organization | 145,376 | 311,322 |
Securities failed to receive | 285 | |
Total payables to broker-dealers and clearing organizations | 486,604 | 686,203 |
Outstanding principal balance | $ 219,100 | $ 182,900 |
Collateralized Transactions (De
Collateralized Transactions (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Financial instruments owned and pledged | ||
Financial instruments owned and pledged, where counterparty has right to repledge | $ 259,175 | $ 236,375 |
Securities received as collateral: | ||
Securities borrowed | 437,220 | 470,553 |
Securities purchased under agreements to resell | 14,985 | 31,472 |
Total amounts related to collateralized transactions | 452,205 | 502,025 |
Equity securities | ||
Financial instruments owned and pledged | ||
Financial instruments owned and pledged, where counterparty has right to repledge | 232,731 | 219,159 |
Exchange traded notes | ||
Financial instruments owned and pledged | ||
Financial instruments owned and pledged, where counterparty has right to repledge | $ 26,444 | $ 17,216 |
Borrowings - Broker-Dealer Cred
Borrowings - Broker-Dealer Credit Facilities (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Apr. 24, 2015USD ($) | |
Credit Facilities | ||||
Interest expense | $ 29,254 | $ 30,894 | $ 24,646 | |
Broker-Dealer Credit Facilities | ||||
Credit Facilities | ||||
Number of secured credit facilities | item | 2 | |||
Broker-Dealer Credit Facility on an uncommitted basis | ||||
Credit Facilities | ||||
Maximum borrowing capacity | $ 125,000 | |||
Interest rate (as a percent) | 1.25% | 1.12% | ||
Interest expense | $ 900 | $ 500 | $ 0 | |
Outstanding principal balance | $ 45,000 | 0 | ||
Broker-Dealer Credit Facility on committed basis | ||||
Credit Facilities | ||||
Maximum borrowing capacity | $ 75,000 | |||
Credit facility term | 364 days | |||
Outstanding principal balance | $ 0 | $ 0 | ||
Broker-Dealer Credit Facility on committed basis | LIBOR rate | ||||
Credit Facilities | ||||
Interest rate margin (as a percent) | 1.25% | |||
Broker-Dealer Credit Facility on committed basis | Base rate | ||||
Credit Facilities | ||||
Interest rate margin (as a percent) | 1.25% |
Borrowings - Short-Term Credit
Borrowings - Short-Term Credit Facilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Short-Term Credit Facilities | |||
Interest expense | $ 29,254 | $ 30,894 | $ 24,646 |
Short-Term Credit Facilities | |||
Short-Term Credit Facilities | |||
Maximum borrowing capacity | 478,000 | 440,000 | |
Outstanding principal balance | $ 219,100 | $ 182,900 | |
Weighted average interest rate | 2.48% | 1.80% | |
Interest expense | $ 5,500 | $ 3,300 | $ 3,200 |
Borrowings - Senior Secured Cre
Borrowings - Senior Secured Credit Facility (Details) - USD ($) | Apr. 15, 2015 | Nov. 08, 2013 | May. 01, 2013 | Jul. 08, 2011 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Credit Facilities | |||||||
Discount | $ 2,925,000 | ||||||
Interest expense | $ 29,254,000 | $ 30,894,000 | 24,646,000 | ||||
Aggregate future required minimum principal payments based on the terms of loan | |||||||
Reclassification of deferred financing fees | 5,100,000 | ||||||
Senior Secured Credit Facility | |||||||
Credit Facilities | |||||||
Face amount | $ 320,000,000 | ||||||
Discount (as a percent) | 2.00% | ||||||
Issued amount | $ 313,600,000 | ||||||
Discount | $ 6,400,000 | 1,500,000 | 1,900,000 | ||||
Percentage of the non-voting stock of the entity's domestic subsidiaries' direct foreign subsidiaries collateralized | 100.00% | ||||||
Percentage of the voting stock of the entity's domestic subsidiaries' direct foreign subsidiaries as collateral | 65.00% | ||||||
Increase in principal amount outstanding | $ 106,700,000 | $ 150,000,000 | |||||
Annual amortization obligation as a percentage of original principal amount | 15.00% | ||||||
Annual amortization obligation as a percentage of outstanding principal amount | 1.00% | ||||||
Outstanding principal amount | $ 510,000,000 | $ 499,800,000 | |||||
Reduction in incremental spread upon consummation of qualifying initial public offering (as a percent) | 0.50% | ||||||
Interest rate (as a percent) | 5.25% | ||||||
Aggregate future required minimum principal payments based on the terms of loan | |||||||
2,016 | $ 5,100,000 | ||||||
2,017 | 5,100,000 | ||||||
2,018 | 5,100,000 | ||||||
2019 and thereafter | 484,500,000 | ||||||
Total maturities of long-term debt | $ 510,000,000 | 499,800,000 | |||||
Net carrying amount of deferred financing fees capitalized | 4,700,000 | 5,100,000 | |||||
Amortization expense related to the deferred financing fees | 1,000,000 | 1,000,000 | 1,600,000 | ||||
Accretion related to the net carrying amount of debt discount | $ 400,000 | $ 400,000 | $ 700,000 | ||||
Senior Secured Credit Facility | Prime rate | |||||||
Credit Facilities | |||||||
Additional interest margin added to fixed and variable rates (as a percent) | 3.00% | ||||||
Senior Secured Credit Facility | Federal funds effective rate | |||||||
Credit Facilities | |||||||
Additional interest margin added to fixed and variable rates (as a percent) | 3.00% | ||||||
Senior Secured Credit Facility | Eurodollar | |||||||
Credit Facilities | |||||||
Additional interest margin added to fixed and variable rates (as a percent) | 3.00% | ||||||
Senior Secured Credit Facility | First option | |||||||
Credit Facilities | |||||||
Fixed interest rate base (as a percent) | 2.25% | ||||||
Senior Secured Credit Facility | First option | Federal funds effective rate | |||||||
Credit Facilities | |||||||
Interest rate added to variable rate (as a percent) | 0.50% | ||||||
Senior Secured Credit Facility | First option | Eurodollar | |||||||
Credit Facilities | |||||||
Interest rate added to variable rate (as a percent) | 1.00% | ||||||
Senior Secured Credit Facility | Second option | |||||||
Credit Facilities | |||||||
Fixed interest rate base (as a percent) | 1.25% | ||||||
Senior Secured Credit Facility | LIBOR rate | |||||||
Credit Facilities | |||||||
Additional interest margin added to fixed and variable rates (as a percent) | 4.00% | ||||||
Revolving credit facility | |||||||
Credit Facilities | |||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||
Commitment fee (as a percent) | 0.50% | ||||||
Outstanding principal balance | $ 0 | ||||||
Interest expense | 200,000 | ||||||
Aggregate future required minimum principal payments based on the terms of loan | |||||||
Net carrying amount of deferred financing fees capitalized | 700,000 | ||||||
Amortization expense related to the deferred financing fees | $ 200,000 | ||||||
Revolving credit facility | Federal funds effective rate | |||||||
Credit Facilities | |||||||
Interest rate added to variable rate (as a percent) | 0.50% | ||||||
Additional interest margin added to fixed and variable rates (as a percent) | 3.00% | ||||||
Revolving credit facility | Eurodollar | |||||||
Credit Facilities | |||||||
Interest rate added to variable rate (as a percent) | 1.00% | ||||||
Revolving credit facility | First option | |||||||
Credit Facilities | |||||||
Fixed interest rate base (as a percent) | 2.25% | ||||||
Additional interest margin added to fixed and variable rates (as a percent) | 2.00% | ||||||
Revolving credit facility | Second option | |||||||
Credit Facilities | |||||||
Fixed interest rate base (as a percent) | 1.25% | ||||||
Additional interest margin added to fixed and variable rates (as a percent) | 3.00% |
Financial Assets and Liabilit57
Financial Assets and Liabilities - Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair value measurements measured on a recurring basis | ||
Transfers of financial assets between levels | $ 0 | $ 0 |
Assets | ||
Financial instruments owned, at fair value | 1,038,039 | 1,307,933 |
Financial instruments owned, pledged as collateral | 259,175 | 236,375 |
Other assets: exchange stock | 5,984 | 8,205 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 979,090 | 1,037,634 |
Equity securities | ||
Assets | ||
Financial instruments owned, pledged as collateral | 232,731 | 219,159 |
Exchange traded notes | ||
Assets | ||
Financial instruments owned, pledged as collateral | 26,444 | 17,216 |
Fair value measurements measured on a recurring basis | Total Fair Value | ||
Assets | ||
Financial instruments owned, at fair value | 1,038,039 | 1,307,933 |
Financial instruments owned, pledged as collateral | 259,175 | 236,375 |
Other assets: exchange stock | 5,984 | 8,205 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 979,090 | 1,037,634 |
Fair value measurements measured on a recurring basis | Total Fair Value | Currency forwards | ||
Assets | ||
Financial instruments owned, at fair value | 9,580 | 8 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 16,191 | |
Fair value measurements measured on a recurring basis | Total Fair Value | Options | ||
Assets | ||
Financial instruments owned, at fair value | 168 | 321 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 163 | 79 |
Fair value measurements measured on a recurring basis | Total Fair Value | Interest rate swaps | ||
Assets | ||
Financial instruments owned, at fair value | 311 | |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 319 | 12 |
Fair value measurements measured on a recurring basis | Total Fair Value | Equity securities | ||
Assets | ||
Financial instruments owned, at fair value | 948,091 | 1,233,698 |
Financial instruments owned, pledged as collateral | 232,731 | 219,159 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 936,851 | 907,732 |
Fair value measurements measured on a recurring basis | Total Fair Value | US and non-US government obligations | ||
Assets | ||
Financial instruments owned, at fair value | 10,513 | 8,222 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 3,996 | 21,107 |
Fair value measurements measured on a recurring basis | Total Fair Value | Exchange traded notes | ||
Assets | ||
Financial instruments owned, at fair value | 69,376 | 65,684 |
Financial instruments owned, pledged as collateral | 26,444 | 17,216 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 37,761 | |
Fair value measurements measured on a recurring basis | Total Fair Value | Exchange stock | ||
Assets | ||
Other assets: exchange stock | 5,984 | 8,205 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 92,513 | |
Fair value measurements measured on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Financial instruments owned, at fair value | 985,224 | 1,282,216 |
Financial instruments owned, pledged as collateral | 259,175 | 236,375 |
Other assets: exchange stock | 5,984 | 8,205 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 976,828 | 973,456 |
Fair value measurements measured on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities | ||
Assets | ||
Financial instruments owned, at fair value | 915,848 | 1,216,532 |
Financial instruments owned, pledged as collateral | 232,731 | 219,159 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 935,071 | 859,836 |
Fair value measurements measured on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | US and non-US government obligations | ||
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 3,996 | 21,107 |
Fair value measurements measured on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Exchange traded notes | ||
Assets | ||
Financial instruments owned, at fair value | 69,376 | 65,684 |
Financial instruments owned, pledged as collateral | 26,444 | 17,216 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 37,761 | |
Fair value measurements measured on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Exchange stock | ||
Assets | ||
Other assets: exchange stock | 5,984 | 8,205 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 92,513 | |
Fair value measurements measured on a recurring basis | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Financial instruments owned, at fair value | 838,670 | 1,655,346 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 748,276 | 1,693,807 |
Fair value measurements measured on a recurring basis | Significant Other Observable Inputs (Level 2) | Currency forwards | ||
Assets | ||
Financial instruments owned, at fair value | 795,435 | 1,629,637 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 746,014 | 1,645,820 |
Fair value measurements measured on a recurring basis | Significant Other Observable Inputs (Level 2) | Options | ||
Assets | ||
Financial instruments owned, at fair value | 168 | 321 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 163 | 79 |
Fair value measurements measured on a recurring basis | Significant Other Observable Inputs (Level 2) | Interest rate swaps | ||
Assets | ||
Financial instruments owned, at fair value | 311 | |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 319 | 12 |
Fair value measurements measured on a recurring basis | Significant Other Observable Inputs (Level 2) | Equity securities | ||
Assets | ||
Financial instruments owned, at fair value | 32,243 | 17,166 |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | 1,780 | 47,896 |
Fair value measurements measured on a recurring basis | Significant Other Observable Inputs (Level 2) | US and non-US government obligations | ||
Assets | ||
Financial instruments owned, at fair value | 10,513 | 8,222 |
Fair value measurements measured on a recurring basis | Counterparty and Cash Collateral Netting | ||
Assets | ||
Financial instruments owned, at fair value | (785,855) | (1,629,629) |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | (746,014) | (1,629,629) |
Fair value measurements measured on a recurring basis | Counterparty and Cash Collateral Netting | Currency forwards | ||
Assets | ||
Financial instruments owned, at fair value | (785,855) | (1,629,629) |
Liabilities | ||
Financial instruments sold, not yet purchased, at fair value | $ (746,014) | $ (1,629,629) |
Financial Assets and Liabilit58
Financial Assets and Liabilities - Netting of Certain Financial Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Securities borrowed | ||
Gross Amounts of Recognized Assets | $ 453,296 | $ 484,934 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 453,296 | 484,934 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (443,659) | (477,559) |
Cash collateral received | (281) | |
Net Amount | 9,356 | 7,375 |
Securities purchased under agreements to resell | ||
Gross Amounts of Recognized Assets | 14,981 | 31,463 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 14,981 | 31,463 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (14,981) | (31,463) |
Total | ||
Gross Amounts of Recognized Assets | 1,264,191 | 2,146,355 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | (785,855) | (1,629,629) |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 478,336 | 516,726 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (459,090) | (509,098) |
Cash collateral received | (281) | |
Net Amount | 18,965 | 7,628 |
Currency forwards | ||
Trading assets, at fair value | ||
Gross Amounts of Recognized Assets | 795,435 | 1,629,637 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | (785,855) | (1,629,629) |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 9,580 | 8 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Net Amount | 9,580 | 8 |
Options | ||
Trading assets, at fair value | ||
Gross Amounts of Recognized Assets | 168 | 321 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 168 | 321 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (139) | (76) |
Net Amount | 29 | $ 245 |
Interest rate swaps | ||
Trading assets, at fair value | ||
Gross Amounts of Recognized Assets | 311 | |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 311 | |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | $ (311) |
Financial Assets and Liabilit59
Financial Assets and Liabilities - Netting of Certain Financial Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Securities loaned | ||
Gross Amounts of Recognized Liabilities | $ 524,603 | $ 497,862 |
Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition | 524,603 | 497,862 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (521,407) | (490,768) |
Cash collateral received | (2,812) | |
Net Amount | 3,196 | 4,282 |
Securities sold under agreements to repurchase | ||
Gross Amounts of Recognized Liabilities | 2,006 | |
Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition | 2,006 | |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (2,006) | |
Total | ||
Gross Amounts of Recognized Liabilities | 1,271,099 | 2,145,779 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | (746,014) | (1,629,629) |
Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition | 525,085 | 516,150 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (521,857) | (492,853) |
Cash collateral received | (32) | (19,015) |
Net Amount | 3,196 | 4,282 |
Receivables from broker dealers and clearing organizations | ||
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Net variation margin on long and short futures contracts | (8,100) | 46,400 |
Payables to broker dealers and clearing organizations | ||
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Net variation margin on long and short futures contracts | (11,700) | (3,600) |
Currency forwards | ||
Trading liabilities, at fair value: | ||
Gross Amounts of Recognized Assets | 746,014 | 1,645,820 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | (746,014) | (1,629,629) |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 16,191 | |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Cash collateral received | (16,191) | |
Options | ||
Trading liabilities, at fair value: | ||
Gross Amounts of Recognized Assets | 163 | 79 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 163 | 79 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (139) | (79) |
Cash collateral received | (24) | |
Interest rate swaps | ||
Trading liabilities, at fair value: | ||
Gross Amounts of Recognized Assets | 319 | 12 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 319 | 12 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (311) | |
Cash collateral received | $ (8) | $ (12) |
Financial Assets and Liabilit60
Financial Assets and Liabilities - Gross Obligations For Securities Lending Transactions (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Fair value measurements measured on a recurring basis | |
Remaining contractual maturity for securities lending transactions | $ 524,603 |
Overnight and Continuous | |
Fair value measurements measured on a recurring basis | |
Remaining contractual maturity for securities lending transactions | 524,603 |
Equity securities | |
Fair value measurements measured on a recurring basis | |
Remaining contractual maturity for securities lending transactions | 524,603 |
Equity securities | Overnight and Continuous | |
Fair value measurements measured on a recurring basis | |
Remaining contractual maturity for securities lending transactions | $ 524,603 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Equities futures | Receivables from broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | $ (1,017) | $ 241 |
Derivatives Assets, Notional | 617,398 | 561,029 |
Equities futures | Payables to broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Liabilities, Fair Value | 202 | (268) |
Derivatives Liabilities, Notional | 75,428 | 122,948 |
Commodity futures | Receivables from broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | (8,431) | 42,489 |
Derivatives Assets, Notional | 18,635,531 | 28,823,081 |
Commodity futures | Payables to broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Liabilities, Fair Value | 585 | (295) |
Derivatives Liabilities, Notional | 25,932 | 15,727 |
Currency futures | Receivables from broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 1,358 | 3,180 |
Derivatives Assets, Notional | 3,059,575 | 2,916,222 |
Currency futures | Payables to broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Liabilities, Fair Value | (12,475) | (3,077) |
Derivatives Liabilities, Notional | 2,570,005 | 2,123,341 |
Treasury futures | Receivables from broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 30 | 504 |
Derivatives Assets, Notional | 232,473 | 857,363 |
Options | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 168 | 321 |
Derivatives Liabilities, Fair Value | 163 | 79 |
Options | Receivables from broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 168 | 321 |
Derivatives Assets, Notional | 24,453 | 39,802 |
Options | Financial instruments sold, not yet purchased | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Liabilities, Fair Value | 163 | 79 |
Derivatives Liabilities, Notional | 25,336 | 12,913 |
Currency forwards | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 795,435 | 1,629,637 |
Derivatives Liabilities, Fair Value | 746,014 | 1,645,820 |
Currency forwards | Financial instruments owned | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 795,435 | 1,629,637 |
Derivatives Assets, Notional | 69,614,513 | 127,021,198 |
Currency forwards | Financial instruments sold, not yet purchased | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Liabilities, Fair Value | 746,014 | 1,645,820 |
Derivatives Liabilities, Notional | 71,019,047 | 125,152,639 |
Interest rate swaps | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 311 | |
Derivatives Liabilities, Fair Value | 319 | 12 |
Interest rate swaps | Financial instruments owned | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 311 | |
Derivatives Assets, Notional | 82,010 | |
Interest rate swaps | Financial instruments sold, not yet purchased | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Liabilities, Fair Value | 319 | 12 |
Derivatives Liabilities, Notional | $ 82,010 | $ 164,020 |
Derivative Instruments - Gain F
Derivative Instruments - Gain From Derivative Instruments (Details) - Not designated as hedging instruments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Gain impact of derivative instruments not designated as hedging instruments | |||
Gain impact that derivative instruments not designated as hedging instruments had on results of operations | $ 1,162,272 | $ (112,018) | $ 191,909 |
Futures | |||
Gain impact of derivative instruments not designated as hedging instruments | |||
Gain impact that derivative instruments not designated as hedging instruments had on results of operations | 1,180,483 | (78,234) | 191,046 |
Currency forwards | |||
Gain impact of derivative instruments not designated as hedging instruments | |||
Gain impact that derivative instruments not designated as hedging instruments had on results of operations | (16,431) | (32,785) | (1,817) |
Options | |||
Gain impact of derivative instruments not designated as hedging instruments | |||
Gain impact that derivative instruments not designated as hedging instruments had on results of operations | (1,784) | (987) | $ 2,680 |
Interest rate swaps | |||
Gain impact of derivative instruments not designated as hedging instruments | |||
Gain impact that derivative instruments not designated as hedging instruments had on results of operations | $ 4 | $ (12) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net income (loss) before income taxes | |||
U.S. operations | $ 154,947 | $ 158,487 | $ 136,744 |
Non-U.S. operations | 60,982 | 35,071 | 50,856 |
Income before income taxes and non-controlling interest | 215,929 | 193,558 | 187,600 |
Current provision | |||
U.S. current provision | 7,584 | ||
State and Local provision | 108 | ||
Non-U.S. current provision | 6,762 | 4,263 | 3,660 |
Deferred benefit | |||
U.S. deferred provision (benefit) | 3,345 | ||
State and Local provision (benefit) | 48 | ||
Non-US deferred provision (benefit) | 592 | (762) | 1,737 |
Provision (benefit) for income taxes | $ 18,439 | $ 3,501 | $ 5,397 |
Reconciliation of tax provision | |||
Tax provision at the U.S. federal statutory rate (as a percent) | 35.00% | ||
Less: rate attributable to noncontrolling interest | (27.80%) | ||
State, local and foreign taxes, net of federal benefit | 1.40% | 1.80% | 2.90% |
Provision for income taxes (as a percent) | 8.60% | 1.80% | 2.90% |
Deferred income tax assets | |||
Tax Receivable Agreement | $ 187,010 | ||
Share-based compensation | 5,647 | $ 947 | |
Fixed assets | 1,083 | 30 | |
Total deferred income tax assets | 193,740 | 977 | |
Deferred income tax liabilities | |||
Fixed assets | 202 | ||
Total deferred income tax liabilities | 202 | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Commitments, Contingencies an64
Commitments, Contingencies and Guarantees - Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Minimum Rental Commitments, Capital | |||
2,016 | $ 9,746 | ||
2,017 | 2,652 | ||
2,018 | 628 | ||
Total minimum lease payments | 13,026 | ||
Minimum Rental Commitments, Operating | |||
2,016 | 9,526 | ||
2,017 | 8,532 | ||
2,018 | 7,484 | ||
2,019 | 5,891 | ||
2,020 | 4,789 | ||
Thereafter | 601 | ||
Total minimum lease payments | 36,823 | ||
Operating lease expense, net of amortization expense related to landlord incentives | 5,300 | $ 3,500 | $ 4,300 |
Occupancy lease expense | 3,900 | 1,700 | 1,900 |
Communication equipment lease expense | $ 1,400 | $ 1,800 | $ 2,400 |
Commitments, Contingencies an65
Commitments, Contingencies and Guarantees - Employee Retention Plan and Litigation (Details) $ in Thousands, € in Millions | 12 Months Ended | 36 Months Ended | |||
Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Jul. 08, 2014USD ($)installment | Dec. 31, 2015EUR (€) | Dec. 31, 2015USD ($) | |
Employee Retention Plan | |||||
Amount which has been paid or will be paid to employees | $ 21,500 | ||||
Number of installments in which amount has been paid or will be paid to employees | installment | 5 | ||||
Compensation expense | $ 2,639 | $ 6,705 | |||
Unfavorable regulatory action | |||||
Employee Retention Plan | |||||
Amount of fine | € 5 | $ 5,400 | |||
Accrual for estimated loss | € 5 | $ 5,400 |
Capital Structure - Prior to Re
Capital Structure - Prior to Reorganization and IPO (Details) $ / shares in Units, $ in Thousands | Dec. 31, 2014USD ($)shares | Nov. 04, 2014USD ($)shares | Jul. 08, 2011USD ($)itemshares | Sep. 30, 2015shares | Sep. 30, 2014shares | Sep. 30, 2015shares | Sep. 30, 2014shares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013shares | Jul. 08, 2015 | Nov. 30, 2015$ / sharesshares | Apr. 15, 2015USD ($)item |
Class A | |||||||||||||
Common stock offered for sale (in shares) | 397,534 | ||||||||||||
Virtu Financial Inc And Silver Lake Partners | Class A | |||||||||||||
Common stock offered for sale (in shares) | 6,473,371 | ||||||||||||
Price of stock (in dollars per share) | $ / shares | $ 22.15 | ||||||||||||
Silver Lake Post-IPO | Class A | |||||||||||||
Common stock offered for sale (in shares) | 6,075,837 | ||||||||||||
Class A-1 | |||||||||||||
Membership interests issued (in shares) | 1,964,826 | 0 | 1,964,826 | ||||||||||
Aggregate capital balance | $ | $ 19,648 | $ 19,648 | |||||||||||
Membership interests outstanding (in shares) | 1,964,826 | 0 | 1,964,826 | ||||||||||
Virtu Financial | |||||||||||||
Number of classes of members interests issued | item | 3 | ||||||||||||
Virtu Financial | Temasek | |||||||||||||
Maximum amount of payments to be made if value of interest acquired exceeds certain limit of transaction price | $ | $ 3,900 | ||||||||||||
Ratio of interest acquired over transaction price | 1.7 | ||||||||||||
Virtu Financial | Class A-1 | |||||||||||||
Number of members that haves the right to call for redemption | item | 3 | ||||||||||||
Members interests granted (in shares) | 0 | 0 | 0 | 0 | |||||||||
Members interests forfeited (in shares) | 0 | 0 | 0 | 0 | |||||||||
Members interests distributed (in shares) | 0 | 0 | 0 | 0 | |||||||||
Members interests redeemed (in shares) | 0 | 0 | 0 | 0 | |||||||||
Amount of unrecovered capital for entitlement of distributions of capital proceeds | $ | $ 0 | $ 0 | $ 0 | ||||||||||
Conversion ratio to convert from Class A-1 to Class A-2 | 1 | ||||||||||||
Virtu Financial | Class A-1 | Minimum | |||||||||||||
Threshold of gross proceeds raised from an initial public offering for a qualified IPO | $ | $ 100,000 | ||||||||||||
Number of times the invested amount to determine the valuation of the entity | 1.75 | ||||||||||||
Virtu Financial | Class A-1 | Silver Lake Member | |||||||||||||
Redeemable interests issued (in shares) | 25,000,000 | ||||||||||||
Redeemable interests held (in shares) | 7,381,224 | 7,381,224 | |||||||||||
Percentage of indirect ownership interest held in the entity | 57.90% | ||||||||||||
Number of members can be appointed in Entity's board | item | 1 | ||||||||||||
Virtu Financial | Class A-1 | Affiliate of Vincent Viola | |||||||||||||
Membership interests issued (in shares) | 1,964,826 | ||||||||||||
Aggregate capital balance | $ | $ 270,000 | ||||||||||||
Virtu Financial | Class A-1 | Temasek Member | |||||||||||||
Redeemable interests transferred from one member to another member (in shares) | 5,376,603 | ||||||||||||
Number of members can be appointed in Entity's board | item | 1 | ||||||||||||
Number of members can be appointed in Entity's board by other members in consultation with Temasek member | item | 1 | ||||||||||||
Virtu Financial | Class A-1 | SLT Member | |||||||||||||
Redeemable interests transferred from one member to another member (in shares) | 12,242,173 | ||||||||||||
Percentage of indirect ownership interest held in the entity | 42.10% | ||||||||||||
Virtu Financial | Class A-2 capital interests | |||||||||||||
Membership interests issued (in shares) | 93,786,659 | 0 | 93,786,659 | ||||||||||
Membership interests outstanding (in shares) | 93,786,659 | 0 | 93,786,659 | ||||||||||
Repurchase of capital interests (in shares) | 1,452,667 | ||||||||||||
Carrying value of repurchased capital interests | $ | $ 1,400 | ||||||||||||
Repurchase price of repurchased capital interests | $ | 6,000 | ||||||||||||
Reduction in accumulated deficit due to excess of repurchase price over carrying value | $ | 4,600 | ||||||||||||
Reduction in capital interests for carrying value of repurchased interests | $ | $ 1,400 | ||||||||||||
Amount of unrecovered capital for entitlement of distributions of capital proceeds | $ | $ 0 | $ 0 | |||||||||||
Virtu Financial | Class A-2 capital interests | East MIP | |||||||||||||
Contribution of capital interests to incentive plan (in shares) | 2,625,000 | ||||||||||||
Virtu Financial | Class A-2 capital interests | Temasek Member | |||||||||||||
Membership interests issued (in shares) | 214,433 | 214,433 | |||||||||||
Member's interests transferred from one entity to another entity (in shares) | 1,614,322 | ||||||||||||
Virtu Financial | Class A-2 profits interests | Employee Holdco | |||||||||||||
Membership interests issued (in shares) | 6,069,007 | 0 | 6,069,007 | ||||||||||
Membership interests outstanding (in shares) | 6,069,007 | 0 | 6,069,007 | ||||||||||
Virtu Financial | Class B interests | |||||||||||||
Members interests issued during the period (in shares) | 0 | 0 | 2.65 | ||||||||||
Membership interests outstanding (in shares) | 0 | 0 | |||||||||||
Non-voting interests vesting period | 4 years | ||||||||||||
Percentage of capital proceeds issued | 12.915% | 12.915% | |||||||||||
Percentage of capital proceeds outstanding | 12.915% | 12.915% | |||||||||||
Virtu Financial | Class B interests | East MIP | |||||||||||||
Non-voting interests vesting period | 4 years | ||||||||||||
Virtu Financial | |||||||||||||
Ownership interest (as a percent) | 27.50% |
Capital Structure - After Reorg
Capital Structure - After Reorganization and IPO (Details) $ / shares in Units, $ in Thousands | Apr. 21, 2015USD ($)shares | Apr. 16, 2015$ / sharesshares | Apr. 15, 2015itemshares | Nov. 20, 2015USD ($) | Dec. 31, 2015$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014$ / sharesshares |
Number of affiliates of the founder member | item | 3 | ||||||
Number of entities | item | 2 | ||||||
Number of entities managed by the founding member | item | 1 | ||||||
Number of founding members liquidating and distributing equity interests | item | 2 | ||||||
Number of classes of common stock | item | 4 | ||||||
Payments of dividends | $ | $ 17,362 | ||||||
Underwriting discount and commissions | $ | $ 25,200 | ||||||
Net proceeds from IPO contributed to VF | $ | 58,800 | ||||||
Options outstanding (in shares) | 8,994,000 | 8,994,000 | |||||
Maximum | |||||||
Remaining dividends payable | $ | $ 35,000 | ||||||
Virtu Financial | |||||||
Ownership interest (as a percent) | 27.50% | 27.50% | |||||
Virtu Financial | |||||||
Payments of dividends | $ | $ 15,000 | ||||||
Other offering costs | $ | 8,600 | ||||||
Silver Lake Post-IPO | |||||||
Payments to purchase shares of common stock and common units | $ | $ 277,200 | ||||||
Non-qualified stock options | |||||||
Grants (in shares) | 9,228,000 | ||||||
Non-qualified stock options | 2015 Management Incentive Plan | |||||||
Grants (in shares) | 9,228,000 | ||||||
Vesting period | 4 years | ||||||
Expiration period | 10 years | ||||||
Restricted stock units | |||||||
Granted (in shares) | 984,466 | ||||||
Restricted stock units | 2015 Management Incentive Plan | |||||||
Vesting period | 4 years | ||||||
Granted (in shares) | 984,466 | ||||||
Class A | |||||||
Number of shares of stock issued | 19,012,112 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0 | |||
Common stock sold in connection with full exercise of the option to purchase additional shares granted to underwriters (in shares) | 2,479,840 | ||||||
Common stock sold in connection with full exercise of the option to purchase additional shares granted to underwriters, at a price to public (in dollars per share) | $ / shares | $ 19 | ||||||
Sale of VFI's common stock | 38,379,858 | 38,379,858 | 0 | ||||
Gross proceeds from offering | $ | $ 361,200 | ||||||
Class A | 2015 Management Incentive Plan | |||||||
Number of shares of stock authorized | 12,000,000 | ||||||
Class A | Virtu Financial, Inc. | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | |||||
Sale of VFI's common stock | 38,379,858 | 38,379,858 | 0 | ||||
Payments of dividends | $ | $ 17,362 | ||||||
Class A | Silver Lake Post-IPO | |||||||
Purchase of common stock (in shares) | 3,470,724 | ||||||
Class B | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0 | ||||
Sale of VFI's common stock | 0 | 0 | 0 | ||||
Class B | Virtu Financial, Inc. | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | |||||
Sale of VFI's common stock | 0 | 0 | 0 | ||||
Class C | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0 | ||||
Sale of VFI's common stock | 20,976,598 | 20,976,598 | 0 | ||||
Class C | Virtu Employee Holdco, Employee Trust, Management Members and other Virtu Post IPO Members | |||||||
Purchase of common stock (in shares) | 36,746,041 | ||||||
Class C | Virtu Financial, Inc. | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | |||||
Sale of VFI's common stock | 20,976,598 | 20,976,598 | 0 | ||||
Class C | Silver Lake Post-IPO | |||||||
Purchase of common stock (in shares) | 4,862,609 | ||||||
Class C | Virtu Post-IPO | |||||||
Purchase of common stock (in shares) | 12,214,224 | ||||||
Class C | Certain employees | |||||||
Purchase of common stock (in shares) | 7,351,615 | ||||||
Class D | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0 | ||||
Sale of VFI's common stock | 79,610,490 | 79,610,490 | 0 | ||||
Class D | TJMT Holdings LLC | |||||||
Purchase of common stock (in shares) | 79,610,490 | ||||||
Class D | Virtu Financial, Inc. | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | |||||
Sale of VFI's common stock | 79,610,490 | 79,610,490 | |||||
Class A common stock and Class C common stock | |||||||
Number of votes provided to holders on all matters | item | 1 | ||||||
Conversion of VFI's common stock | 1 | ||||||
Class B common stock and Class D common stock | |||||||
Number of votes provided to holders on all matters | item | 10 | ||||||
Class A, B, C and D common stock | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 21, 2015 | Apr. 15, 2015 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation. | |||||||
Amortization expense for capitalized software | $ 9.6 | $ 10.4 | $ 11 | ||||
Non-voting common interest units outstanding | 15,394,426 | 15,394,426 | |||||
Forfeited or expired (in shares) | (234,000) | ||||||
Outstanding (in shares) | 8,994,000 | 8,994,000 | |||||
Class A-2 profits interests and Class B interests | East MIP | |||||||
Weighted-average assumptions used in estimating grant date fair values | |||||||
Expected life (in years) | 2 years 8 months 12 days | 6 months | 6 months | ||||
Weighted average risk free interest rate (as a percent) | 0.72% | 0.12% | 0.10% | ||||
Expected stock price volatility (as a percent) | 47.00% | 25.00% | 25.00% | ||||
Class A-2 profits interests | |||||||
Share-based Compensation. | |||||||
Expense recognized | $ 1.5 | $ 16 | $ 13.4 | ||||
Unrecognized share-based compensation expense | $ 2.2 | $ 2.2 | |||||
Weighted average period for compensation expense expected to be recognized | 1 year 7 months 6 days | ||||||
Activity | |||||||
Outstanding (in shares) | 6,069,007 | 6,069,007 | 6,069,007 | 4,434,452 | |||
Granted (in shares) | 6,418 | 1,992,556 | |||||
Repurchased (in shares) | (13,495) | (358,001) | |||||
Outstanding (in shares) | 6,061,930 | 6,069,007 | 4,434,452 | ||||
Weighted Average Fair Value | |||||||
Outstanding (in dollars per share) | $ 6.82 | $ 6.82 | $ 6.82 | $ 6.82 | |||
Granted (in dollars per share) | 7.52 | 7.52 | |||||
Repurchased (in dollars per share) | 7.17 | 6.51 | |||||
Outstanding (in dollars per share) | $ 6.82 | $ 6.82 | $ 6.82 | ||||
Weighted Average Remaining Life, outstanding | |||||||
Weighted Average Remaining Life | 2 years 3 months 7 days | 2 years 6 months 15 days | 3 years 4 months 24 days | ||||
Weighted average remaining contractual life, granted | 3 years | ||||||
Class A-2 profits interests | Maximum | |||||||
Share-based Compensation. | |||||||
Vesting period | 4 years | 4 years | 4 years | ||||
Class B interests | East MIP | |||||||
Share-based Compensation. | |||||||
One time expense recognized | $ 41.4 | ||||||
Additional expense recognized | 3.5 | ||||||
Expense recognized | 44.9 | $ 0 | |||||
Unrecognized share-based compensation expense | $ 2.1 | $ 2.1 | |||||
Weighted average period for compensation expense expected to be recognized | 1 year 9 months 18 days | ||||||
Capitalized software development costs | $ 9.2 | ||||||
Amortization expense for capitalized software | $ 8.5 | ||||||
Class B interests | East MIP | Time based vesting | |||||||
Share-based Compensation. | |||||||
Vesting period | 4 years | 4 years | |||||
Number of interests vested | 0 | 0 | |||||
Class A | 2015 Management Incentive Plan | |||||||
Share-based Compensation. | |||||||
Granted (in shares) | 576,693 | ||||||
Non-qualified stock options | |||||||
Share-based Compensation. | |||||||
Granted (in shares) | 9,228,000 | ||||||
Weighted Average Exercise Price Per Share | |||||||
Granted (in dollars per share) | $ 19 | ||||||
Forfeited or expired (in dollars per share) | 19 | ||||||
Outstanding (in dollars per share) | $ 19 | $ 19 | |||||
Weighted Average Remaining Life, outstanding | |||||||
Weighted Average Remaining Life | 9 years 3 months 15 days | ||||||
Weighted average remaining contractual life, granted | 10 years | ||||||
Non-qualified stock options | 2015 Management Incentive Plan | |||||||
Share-based Compensation. | |||||||
Vesting period | 4 years | ||||||
Expiration period | 10 years | ||||||
Expense recognized | $ 4.7 | ||||||
Unrecognized share-based compensation expense | $ 22.4 | $ 22.4 | |||||
Weighted average period for compensation expense expected to be recognized | 3 years 3 months 18 days | ||||||
Granted (in shares) | 9,228,000 | ||||||
Weighted-average assumptions used in estimating grant date fair values | |||||||
Expected life (in years) | 6 years 3 months | ||||||
Weighted average risk free interest rate (as a percent) | 1.52% | ||||||
Expected stock price volatility (as a percent) | 30.00% | ||||||
Expected dividend yield (as a percent) | 5.05% | ||||||
Weighted Average Fair Value | |||||||
Granted (in dollars per share) | $ 3.02 | ||||||
Restricted stock units | |||||||
Share-based Compensation. | |||||||
Unrecognized share-based compensation expense | $ 20.9 | $ 20.9 | |||||
Weighted average period for compensation expense expected to be recognized | 3 years | ||||||
Activity | |||||||
Granted (in shares) | 984,466 | ||||||
Outstanding (in shares) | 984,466 | 984,466 | |||||
Weighted Average Fair Value | |||||||
Granted (in dollars per share) | $ 22.32 | ||||||
Outstanding (in dollars per share) | $ 22.32 | $ 22.32 | |||||
Restricted stock units | 2015 Management Incentive Plan | |||||||
Share-based Compensation. | |||||||
Vesting period | 4 years | ||||||
Activity | |||||||
Granted (in shares) | 984,466 | ||||||
Restricted stock units | Class A | |||||||
Share-based Compensation. | |||||||
Expense recognized | $ 13.7 | ||||||
Restricted stock units | Class A | 2015 Management Incentive Plan | |||||||
Share-based Compensation. | |||||||
Time period used for the volume weighted average price to determine fair value | 3 days |
Property, Equipment and Capit69
Property, Equipment and Capitalized Software (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Equipment and Capitalized Software | |||
Property, equipment and capitalized software, gross | $ 136,096 | $ 129,223 | |
Less: Accumulated depreciation and amortization | (98,595) | (84,579) | |
Total property, equipment and capitalized software, net | 37,501 | 44,644 | |
Depreciation expense | 24,000 | 20,000 | $ 12,900 |
Amortization expense for capitalized software | 9,600 | 10,400 | $ 11,000 |
Capitalized software costs | |||
Property, Equipment and Capitalized Software | |||
Property, equipment and capitalized software, gross | 66,573 | 47,484 | |
Leasehold improvements | |||
Property, Equipment and Capitalized Software | |||
Property, equipment and capitalized software, gross | 3,567 | 8,799 | |
Furniture, fixtures and equipment | |||
Property, Equipment and Capitalized Software | |||
Property, equipment and capitalized software, gross | 65,879 | 72,863 | |
Land | |||
Property, Equipment and Capitalized Software | |||
Property, equipment and capitalized software, gross | $ 77 | $ 77 |
Regulatory Requirement (Details
Regulatory Requirement (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | |
Regulatory Requirement | ||
Number of broker-dealer subsidiaries | item | 2 | |
Broker Dealer Subsidiary One | ||
Regulatory Requirement | ||
Minimum net capital required to be maintained by broker-dealer subsidiaries | $ 1 | $ 1 |
Net capital | 64.2 | 59.8 |
Excess net capital over the required net capital | 63.2 | 58.8 |
Broker Dealer Subsidiary Two | ||
Regulatory Requirement | ||
Minimum net capital required to be maintained by broker-dealer subsidiaries | 1 | 1 |
Net capital | 8.5 | 8.1 |
Excess net capital over the required net capital | 7.5 | 7.1 |
VFCM | ||
Regulatory Requirement | ||
Minimum capital required to be maintained in connection with the operation of the Company's DMM business | 1.9 | $ 3.7 |
Required amount under exchange rules | $ 1 | |
Required amount under exchange rules as percentage of market value | 15.00% | |
Number of trading units whose market value is considered to calculate required net capital under exchange act | item | 60 |
Geographic Information (Details
Geographic Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Total revenues by geographic area | |||
Revenues | $ 796,213 | $ 723,053 | $ 664,505 |
United States | |||
Total revenues by geographic area | |||
Revenues | 537,310 | 509,105 | 432,900 |
Australia | |||
Total revenues by geographic area | |||
Revenues | 23 | 86 | 87 |
Ireland | |||
Total revenues by geographic area | |||
Revenues | 166,739 | 141,793 | 129,662 |
Singapore | |||
Total revenues by geographic area | |||
Revenues | 91,816 | $ 72,069 | 98,917 |
China | |||
Total revenues by geographic area | |||
Revenues | $ 325 | ||
United Kingdom | |||
Total revenues by geographic area | |||
Revenues | $ 2,939 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | Apr. 21, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Related Party Transactions | |||||
Payable to affiliates | $ 0.2 | $ 0.2 | $ 0.4 | ||
Non-qualified stock options | |||||
Related Party Transactions | |||||
Granted (in shares) | 9,228,000 | ||||
Non-qualified stock options | 2015 Management Incentive Plan | |||||
Related Party Transactions | |||||
Granted (in shares) | 9,228,000 | ||||
Class A | 2015 Management Incentive Plan | |||||
Related Party Transactions | |||||
Granted (in shares) | 576,693 | ||||
Dell | |||||
Related Party Transactions | |||||
Payments for purchases | $ 3.5 | 1 | $ 1.4 | ||
Interactive data | |||||
Related Party Transactions | |||||
Payments for purchases | 0.4 | 0.3 | 0.2 | ||
Sungard | |||||
Related Party Transactions | |||||
Payments for purchases | 0.2 | 0.2 | 0.2 | ||
Singtel | |||||
Related Party Transactions | |||||
Payments for purchases | 0.1 | 0.2 | 0.1 | ||
Son of Company's Founder and Executive Chairman | |||||
Related Party Transactions | |||||
Total compensation | $ 0.8 | 0.6 | 0.5 | ||
Son of Company's Founder and Executive Chairman | Class A | Non-qualified stock options | 2015 Management Incentive Plan | |||||
Related Party Transactions | |||||
Granted (in shares) | 60,000 | ||||
Member of Board of Directors | |||||
Related Party Transactions | |||||
Payments to related party | $ 0.1 | $ 0.1 | $ 0.2 | ||
Affiliate Of Founder And Executive Chairman | |||||
Related Party Transactions | |||||
Sublease revenue | $ 0.1 |
Parent Company - Condensed Stat
Parent Company - Condensed Statements of Financial Condition (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2015 | Apr. 16, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Assets | |||||
Deferred tax asset | $ 193,740 | $ 977 | |||
Other assets | 38,845 | 32,823 | |||
Total assets | 3,391,930 | 3,319,458 | |||
Liabilities | |||||
Accounts payable and accrued expenses and other liabilities | 86,775 | 93,331 | |||
Tax receivable agreement obligations | 218,399 | ||||
Total liabilities | 2,834,060 | 2,812,760 | |||
Stockholders' / Members' equity | |||||
Treasury stock, at cost, 169,649 and 0 shares at December 31, 2015 and 2014, respectively | (3,819) | ||||
Additional paid-in capital | 130,902 | ||||
Retained Earnings (Accumulated deficit) | 3,525 | (91,383) | |||
Accumulated other comprehensive income (loss) | 99 | (3,705) | |||
Total stockholders' / members' equity | 212,265 | $ 203,288 | $ 440,235 | ||
Total stockholders' / members' equity | 130,708 | ||||
Total liabilities, redeemable membership interest and equity | $ 3,391,930 | $ 3,319,458 | |||
Treasury Stock, Shares | 169,649 | 0 | |||
Class A-1 | |||||
Liabilities | |||||
Redeemable membership interest | $ 294,433 | ||||
Stockholders' / Members' equity | |||||
Membership interests | $ 19,648 | ||||
Membership interests authorized (in shares) | 0 | 1,964,826 | |||
Membership interests issued (in shares) | 0 | 1,964,826 | |||
Membership interests outstanding (in shares) | 0 | 1,964,826 | |||
Class A-2 | |||||
Stockholders' / Members' equity | |||||
Membership interests | $ 287,705 | ||||
Membership interests authorized (in shares) | 0 | 101,381,332 | |||
Membership interests issued (in shares) | 0 | 101,381,332 | |||
Membership interests outstanding (in shares) | 0 | 99,855,666 | |||
Virtu Financial, Inc. | |||||
Assets | |||||
Cash | $ 187 | $ 25,939 | $ 22 | $ 26 | |
Deferred tax asset | 193,153 | ||||
Receivable from subsidiaries | 15 | 12,865 | |||
Investment in subsidiary | 157,887 | 768,423 | |||
Other assets | 1 | 29 | |||
Total assets | 351,243 | 807,256 | |||
Liabilities | |||||
Payable to affiliates | 291,444 | ||||
Accounts payable and accrued expenses and other liabilities | 2,136 | 9,114 | |||
Tax receivable agreement obligations | 218,399 | ||||
Total liabilities | 220,535 | 300,558 | |||
Stockholders' / Members' equity | |||||
Treasury stock, at cost, 169,649 and 0 shares at December 31, 2015 and 2014, respectively | (3,819) | ||||
Additional paid-in capital | 130,902 | ||||
Retained Earnings (Accumulated deficit) | 3,525 | (91,383) | |||
Accumulated other comprehensive income (loss) | 99 | (3,705) | |||
Total stockholders' / members' equity | 212,265 | ||||
Total stockholders' / members' equity | 130,708 | ||||
Total liabilities, redeemable membership interest and equity | $ 351,243 | $ 807,256 | |||
Treasury Stock, Shares | 169,649 | 0 | |||
Virtu Financial, Inc. | Class A-1 | |||||
Liabilities | |||||
Redeemable membership interest | $ 294,433 | ||||
Stockholders' / Members' equity | |||||
Membership interests | $ 19,648 | ||||
Membership interests authorized (in shares) | 0 | 1,964,826 | |||
Membership interests issued (in shares) | 0 | 1,964,826 | |||
Membership interests outstanding (in shares) | 0 | 1,964,826 | |||
Virtu Financial, Inc. | Class A-2 | |||||
Stockholders' / Members' equity | |||||
Membership interests | $ 287,705 | ||||
Membership interests authorized (in shares) | 0 | 101,381,332 | |||
Membership interests issued (in shares) | 0 | 101,381,332 | |||
Membership interests outstanding (in shares) | 0 | 99,855,666 | |||
Class A | |||||
Stockholders' / Members' equity | |||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0 | ||
Common stock, authorized | 1,000,000,000 | 0 | |||
Common stock shares issued | 38,379,858 | 0 | |||
Common stock, outstanding | 38,210,209 | 0 | |||
Class A | Virtu Financial, Inc. | |||||
Stockholders' / Members' equity | |||||
Common stock, par value (in dollars per share) | $ 0.00001 | ||||
Common stock, authorized | 1,000,000,000 | 0 | |||
Common stock shares issued | 38,379,858 | 0 | |||
Common stock, outstanding | 38,210,209 | 0 | |||
Class B | |||||
Stockholders' / Members' equity | |||||
Common stock | |||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0 | |||
Common stock, authorized | 175,000,000 | 0 | |||
Common stock shares issued | 0 | 0 | |||
Common stock, outstanding | 0 | 0 | |||
Class B | Virtu Financial, Inc. | |||||
Stockholders' / Members' equity | |||||
Common stock, par value (in dollars per share) | $ 0.00001 | ||||
Common stock, authorized | 175,000,000 | 0 | |||
Common stock shares issued | 0 | 0 | |||
Common stock, outstanding | 0 | 0 | |||
Class C | |||||
Stockholders' / Members' equity | |||||
Common stock | |||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0 | |||
Common stock, authorized | 90,000,000 | 0 | |||
Common stock shares issued | 20,976,598 | 0 | |||
Common stock, outstanding | 20,976,598 | 0 | |||
Class C | Virtu Financial, Inc. | |||||
Stockholders' / Members' equity | |||||
Common stock, par value (in dollars per share) | $ 0.00001 | ||||
Common stock, authorized | 90,000,000 | 0 | |||
Common stock shares issued | 20,976,598 | 0 | |||
Common stock, outstanding | 20,976,598 | 0 | |||
Class D | |||||
Stockholders' / Members' equity | |||||
Common stock | $ 1 | ||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0 | |||
Common stock, authorized | 175,000,000 | 0 | |||
Common stock shares issued | 79,610,490 | 0 | |||
Common stock, outstanding | 79,610,490 | 0 | |||
Class D | Virtu Financial, Inc. | |||||
Stockholders' / Members' equity | |||||
Common stock | $ 1 | ||||
Common stock, par value (in dollars per share) | $ 0.00001 | ||||
Common stock, authorized | 175,000,000 | 0 | |||
Common stock shares issued | 79,610,490 | ||||
Common stock, outstanding | 0 | 0 |
Parent Company - Condensed St74
Parent Company - Condensed Statements of Comprehensive Income (Details) - USD ($) $ in Thousands | 4 Months Ended | 9 Months Ended | 12 Months Ended | ||
Apr. 15, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Expenses | |||||
Operations and administrative | $ 25,991 | $ 21,923 | $ 27,215 | ||
Net income | $ 83,147 | $ 114,343 | 197,490 | 190,057 | 182,203 |
Net income attributable to common stockholders | 20,887 | ||||
Foreign currency translation adjustment, net of taxes | (4,255) | (5,032) | 1,382 | ||
Comprehensive income attributable to common stockholders | 20,986 | ||||
Virtu Financial, Inc. | |||||
Revenues: | |||||
Service fee revenue | 445 | 13,492 | 2,089 | ||
Expenses | |||||
Operations and administrative | 447 | 13,492 | 2,089 | ||
Income (loss) before equity in income of subsidiary | (2) | ||||
Equity in income of subsidiary, net of tax | 104,036 | 190,057 | 182,203 | ||
Net income | 104,034 | 190,057 | 182,203 | ||
Net income attributable to common stockholders | 20,887 | ||||
Foreign currency translation adjustment, net of taxes | (4,534) | (5,032) | 1,382 | ||
Comprehensive income attributable to common stockholders | $ 16,353 | $ 185,025 | $ 183,585 |
Parent Company - Condensed St75
Parent Company - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 4 Months Ended | 9 Months Ended | 12 Months Ended | ||
Apr. 15, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | |||||
Net income | $ 83,147 | $ 114,343 | $ 197,490 | $ 190,057 | $ 182,203 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Deferred taxes | 3,985 | ||||
Net cash provided by operating activities | 260,280 | 272,699 | 259,361 | ||
Cash flows from investing activities | |||||
Cash flows used in investing activities | (24,299) | (36,159) | (32,016) | ||
Cash flows from financing activities | |||||
Distribution to members through April 15, 2015 | (130,000) | (140,652) | (433,400) | ||
Distribution from Virtu Financial to non-controlling interest, after April 15, 2015 | (81,377) | ||||
Dividends to Class A shareholders | (17,362) | ||||
Proceeds from issuance | 327,366 | ||||
Purchase of treasury stock | (3,819) | ||||
Repurchase of Virtu Financial Units and corresponding number of Class A and C Common Stock | (277,153) | ||||
Issuance of common stock in connection with secondary offering, net of offering costs | 7,782 | ||||
Repurchase of Virtu Financial Units and corresponding number of Class A and C common stock in connection with secondary offering | (8,805) | ||||
Net cash used in financing activities | (144,355) | (221,654) | (202,695) | ||
Supplementary disclosure of cash flow information | |||||
Tax receivable agreement described in Note 4 | (21,854) | ||||
Taxes paid | 12,875 | 3,764 | 4,559 | ||
Virtu Financial, Inc. | |||||
Cash flows from operating activities | |||||
Net income | 104,034 | 190,057 | 182,203 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Equity in income of subsidiary, net of tax | (18,237) | (24,469) | 244,854 | ||
Deferred taxes | 3,392 | ||||
Changes in operating assets and liabilities | 5,900 | (14,056) | (6,529) | ||
Net cash provided by operating activities | 95,089 | 151,532 | 420,528 | ||
Cash flows from investing activities | |||||
Investment in subsidiaries, equity basis | 64,624 | 15,953 | 13,441 | ||
Cash flows used in investing activities | 64,624 | 15,953 | 13,441 | ||
Cash flows from financing activities | |||||
Distribution to members through April 15, 2015 | (130,000) | (140,652) | (433,400) | ||
Distribution from Virtu Financial to non-controlling interest, after April 15, 2015 | (81,377) | ||||
Proceeds from issuance | 327,366 | ||||
Purchase of treasury stock | (3,819) | ||||
Repurchase of Virtu Financial Units and corresponding number of Class A and C Common Stock | (277,153) | ||||
Issuance of common stock in connection with secondary offering, net of offering costs | 7,782 | ||||
Repurchase of Virtu Financial Units and corresponding number of Class A and C common stock in connection with secondary offering | (8,805) | ||||
Net cash used in financing activities | (185,465) | (141,568) | (433,973) | ||
Net increase (decrease) in cash | (25,752) | 25,917 | (4) | ||
Cash, beginning of period | $ 25,939 | 25,939 | 22 | 26 | |
Cash, end of period | $ 187 | 187 | 25,939 | 22 | |
Supplementary disclosure of cash flow information | |||||
Tax receivable agreement described in Note 4 | (21,854) | ||||
Taxes paid | 5,615 | ||||
Class A | Virtu Financial, Inc. | |||||
Cash flows from financing activities | |||||
Dividends to Class A shareholders | (17,362) | ||||
Class A-2 | |||||
Cash flows from financing activities | |||||
Repurchase of interests | (2,097) | (916) | (573) | ||
Supplementary disclosure of cash flow information | |||||
Repurchase of interests | (6,000) | ||||
Class A-2 | Virtu Financial, Inc. | |||||
Cash flows from financing activities | |||||
Repurchase of interests | $ (2,097) | (916) | $ (573) | ||
Supplementary disclosure of cash flow information | |||||
Repurchase of interests | (6,000) | ||||
Class A-2 | Temasek Member | |||||
Cash flows from financing activities | |||||
Proceeds from issuance | 3,048 | ||||
Repurchase of interests | (3,048) | ||||
Class A-2 | Temasek Member | Virtu Financial, Inc. | |||||
Cash flows from financing activities | |||||
Proceeds from issuance | 3,048 | ||||
Repurchase of interests | $ (3,048) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 15, 2016 | Jan. 31, 2016 | Mar. 25, 2016 | Nov. 20, 2015 | Dec. 31, 2015 |
Subsequent events | |||||
Payments of dividends | $ 17,362 | ||||
Virtu Financial | |||||
Subsequent events | |||||
Payments of dividends | $ 15,000 | ||||
Subsequent Events. | |||||
Subsequent events | |||||
Period of renewal of an arrangement to provide technology services to third party | 1 year | ||||
Subsequent Events. | Virtu Financial | |||||
Subsequent events | |||||
Payments of dividends | $ 55,000 | ||||
Subsequent Events. | Class A | |||||
Subsequent events | |||||
Dividends declared (in dollars per share) | $ 0.24 |