Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 13, 2017 | Jun. 30, 2016 | |
Entity Registrant Name | Virtu Financial, Inc. | ||
Entity Central Index Key | 1,592,386 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
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 | Accelerated Filer | ||
Entity Public Float | $ 684 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Class A | |||
Entity Common Stock, Shares Outstanding | 40,667,276 | ||
Class C | |||
Entity Common Stock, Shares Outstanding | 19,081,435 | ||
Class D | |||
Entity Common Stock, Shares Outstanding | 79,610,490 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 181,415 | $ 163,235 |
Securities borrowed | 220,005 | 453,296 |
Securities purchased under agreements to resell | 14,981 | |
Receivables from broker dealers and clearing organizations | 448,728 | 476,536 |
Trading assets, at fair value: | ||
Financial instruments owned | 1,683,999 | 1,038,039 |
Financial instruments owned and pledged | 143,883 | 259,175 |
Property, equipment and capitalized software (net of accumulated depreciation of $113,184 and $98,595 as of December 31, 2016 and 2015, respectively) | 29,660 | 37,501 |
Goodwill | 715,379 | 715,379 |
Intangibles (net of accumulated amortization) | 992 | 1,203 |
Deferred tax asset | 193,859 | 193,740 |
Other assets ($36,480 and $5,984, at fair value, as of December 31, 2016 and 2015, respectively) | 74,470 | 38,845 |
Total assets | 3,692,390 | 3,391,930 |
Liabilities | ||
Short term borrowings | 25,000 | 45,000 |
Securities loaned | 222,203 | 524,603 |
Payables to broker dealers and clearing organizations | 695,978 | 486,604 |
Trading liabilities, at fair value: | ||
Financial instruments sold, not yet purchased | 1,349,155 | 979,090 |
Tax receivable agreement obligations | 231,404 | 218,399 |
Accounts payable and accrued expenses and other liabilities | 69,281 | 86,775 |
Long-term borrowings | 564,957 | 493,589 |
Total liabilities | 3,157,978 | 2,834,060 |
Stockholders' Equity | ||
Treasury stock, at cost, 453,066 and 169,649 shares at December 31, 2016 and 2015, respectively | (8,358) | (3,819) |
Additional paid-in capital | 155,536 | 130,902 |
Retained Earnings | (1,254) | 3,525 |
Accumulated other comprehensive income | (252) | 99 |
Total stockholders' equity | 145,673 | 130,708 |
Noncontrolling interest | 388,739 | 427,162 |
Total equity | 534,412 | 557,870 |
Total liabilities and equity | 3,692,390 | 3,391,930 |
Class D | ||
Stockholders' Equity | ||
Common stock value | $ 1 | $ 1 |
Consolidated Statements of Fin3
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 21, 2015 |
Accumulated depreciation (in dollars) | $ 113,184 | $ 98,595 | |
Fair value of other assets (in dollars) | $ 36,480 | $ 5,984 | |
Treasury stock shares | 453,066 | 169,649 | |
Class A | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 |
Common stock shares authorized | 1,000,000,000 | 1,000,000,000 | |
Common stock shares issued | 40,436,580 | 38,379,858 | |
Common stock shares outstanding | 39,983,514 | 38,210,209 | |
Class B | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |
Common stock shares authorized | 175,000,000 | 175,000,000 | |
Common stock shares issued | 0 | 0 | |
Common stock shares outstanding | 0 | 0 | |
Class C | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |
Common stock shares authorized | 90,000,000 | 90,000,000 | |
Common stock shares issued | 19,810,707 | 20,976,598 | |
Common stock shares outstanding | 19,810,707 | 20,976,598 | |
Class D | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |
Common stock shares authorized | 175,000,000 | 175,000,000 | |
Common stock shares issued | 79,610,490 | 79,610,490 | |
Common stock shares outstanding | 79,610,490 | 79,610,490 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Trading income, net | $ 665,465 | $ 757,455 | $ 685,150 |
Interest and dividends income | 26,419 | 28,136 | 27,923 |
Technology services | 10,352 | 10,622 | 9,980 |
Other, net | 36 | ||
Total revenue | 702,272 | 796,213 | 723,053 |
Operating Expenses: | |||
Brokerage, exchange and clearance fees, net | 221,214 | 232,469 | 230,965 |
Communication and data processing | 71,001 | 68,647 | 68,847 |
Employee compensation and payroll taxes | 85,295 | 88,026 | 84,531 |
Interest and dividends expense | 56,557 | 52,423 | 47,083 |
Operations and administrative | 23,039 | 25,991 | 21,923 |
Depreciation and amortization | 29,703 | 33,629 | 30,441 |
Amortization of purchased intangibles and acquired capitalized software | 211 | 211 | 211 |
Acquisition related retention bonus | 0 | 0 | 2,639 |
Amortization expense related to the deferred financing fees | 5,579 | ||
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 | 1,755 | 44,194 | |
Financing interest expense on long-term borrowings | 28,327 | 29,254 | 30,894 |
Total operating expenses | 522,681 | 580,284 | 529,495 |
Income before income taxes and noncontrolling interest | 179,591 | 215,929 | 193,558 |
Provision for income taxes | 21,251 | 18,439 | 3,501 |
Net income | 158,340 | 197,490 | 190,057 |
Noncontrolling interest | (125,360) | (176,603) | |
Net income available for common stockholders | $ 32,980 | $ 20,887 | |
Earnings per share | |||
Basic (in dollars per share) | $ 0.83 | $ 0.60 | |
Diluted (in dollars per share) | $ 0.83 | $ 0.59 | |
Weighted average common shares outstanding | |||
Basic (in shares) | 38,539,091 | 34,964,312 | |
Diluted (in shares) | 38,539,091 | 35,339,585 | |
Comprehensive income | |||
Net income | $ 158,340 | $ 197,490 | 190,057 |
Other comprehensive income (loss) | |||
Foreign exchange translation adjustment, net of taxes | (1,165) | (4,255) | (5,032) |
Comprehensive income | 157,175 | 193,235 | $ 185,025 |
Less: Comprehensive income attributable to non-controlling interests | (124,546) | (172,249) | |
Comprehensive income attributable to common stockholders | $ 32,629 | $ 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' Equity | Noncontrolling Interest | Class A | Class C | Class D | Total |
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) | ||||||||||||||
Dividends | (140,652,000) | (140,652,000) | (140,652,000) | ||||||||||||
Net income | 190,057,000 | 190,057,000 | 190,057,000 | ||||||||||||
Foreign exchange translation adjustment, net of taxes | (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 | |||||||||||||
Balance for Redeemable Interest at Dec. 31, 2014 | $ 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) | ||||||||||||||
Dividends | (130,000,000) | (130,000,000) | (130,000,000) | ||||||||||||
Net income | 83,147,000 | 83,147,000 | 83,147,000 | ||||||||||||
Foreign exchange translation adjustment, net of taxes | (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 | |||||||||||||
Balance for Redeemable Interest at Dec. 31, 2014 | $ 294,433,000 | ||||||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||||
Net income | 197,490,000 | ||||||||||||||
Foreign exchange translation adjustment, net of taxes | (4,255,000) | ||||||||||||||
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) | |||||||||||||
Dividends | (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, net of taxes | 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 in connection with secondary offering | 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 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) | |||||||||||||
Increase (decrease) in stockholder's/members' equity | |||||||||||||||
Share based compensation | 24,893,000 | 24,893,000 | $ 24,893,000 | ||||||||||||
Share based compensation (in shares) | 953,054 | (58,070) | |||||||||||||
Dividends | (37,759,000) | (37,759,000) | (37,759,000) | ||||||||||||
Net income | 32,980,000 | 32,980,000 | 125,360,000 | 158,340,000 | |||||||||||
Foreign exchange translation adjustment, net of taxes | (351,000) | (351,000) | (814,000) | (1,165,000) | |||||||||||
Issuance of Common Stock in connection with secondary offering, net of offering costs | 16,677,000 | 16,677,000 | 16,677,000 | ||||||||||||
Issuance of Common Stock in connection with secondary offering, net of offering costs (in shares) | 1,103,668 | ||||||||||||||
Repurchase of units and corresponding number of common stock in connection with secondary offering | (17,383,000) | (17,383,000) | (17,383,000) | ||||||||||||
Repurchase of units and corresponding number of common stock in connection with secondary offering (in shares) | (1,103,668) | ||||||||||||||
Issuance of tax receivable agreements in connection with secondary offering | (545,000) | (545,000) | (545,000) | ||||||||||||
Repurchase of common stock | (98,000) | (98,000) | (98,000) | ||||||||||||
Repurchase of common stock (in shares) | (4,153) | ||||||||||||||
Treasury stock purchases | $ (4,539,000) | (4,539,000) | (4,539,000) | ||||||||||||
Treasury stock purchases (in shares) | (283,417) | ||||||||||||||
Distribution from Virtu Financial to non-controlling interest | (162,969,000) | (162,969,000) | |||||||||||||
Balance at Dec. 31, 2016 | 145,673,000 | ||||||||||||||
Balance at Dec. 31, 2016 | $ 1,000 | $ 155,536,000 | $ (1,254,000) | $ (252,000) | $ 145,673,000 | $ 388,739,000 | 534,412,000 | ||||||||
Balance (in shares) at Dec. 31, 2016 | 40,436,580 | 19,810,707 | 79,610,490 | 39,983,514 | 19,810,707 | 79,610,490 | |||||||||
Treasury stock at Dec. 31, 2016 | $ (8,358,000) | $ (8,358,000) | |||||||||||||
Treasury stock (in shares) at Dec. 31, 2016 | (453,066) | (453,066) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net Income | $ 158,340 | $ 197,490 | $ 190,057 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 29,703 | 33,629 | 30,441 |
Amortization of purchased intangibles and acquired capitalized software | 211 | 211 | 211 |
Debt issue cost related to debt refinancing | 5,579 | ||
Amortization of debt issuance costs and deferred financing fees | 1,690 | 1,755 | 1,334 |
Termination of office leases | 1,380 | ||
Share based compensation | 22,866 | 61,878 | 14,234 |
Reserve for legal matter | 5,440 | ||
Equipment writeoff | 428 | 559 | 378 |
Deferred taxes | 13,313 | 3,985 | |
Other | (1,070) | 219 | (2,204) |
Changes in operating assets and liabilities: | |||
Securities borrowed | 233,291 | 31,638 | 223,169 |
Securities purchased under agreements to resell | 14,981 | 16,482 | 131,145 |
Receivables from broker dealers and clearing organizations | 27,808 | (88,884) | 40,089 |
Trading assets, at fair value | (530,668) | 247,094 | 259,105 |
Other Assets | 772 | (5,796) | 2,751 |
Securities loaned | (302,400) | 26,741 | (531,450) |
Securities sold under agreements to repurchase | (2,006) | (8,877) | |
Payables to broker dealers and clearing organizations | 209,374 | (199,599) | 155,974 |
Trading liabilities, at fair value | 370,065 | (58,544) | (240,778) |
Accounts payable and accrued expenses and other liabilities | (14,684) | (13,392) | 7,120 |
Net cash provided by operating activities | 239,599 | 260,280 | 272,699 |
Cash flows from investing activities | |||
Development of capitalized software | (8,404) | (8,028) | (8,039) |
Acquisition of property and equipment | (11,859) | (16,271) | (28,120) |
Investment in SBI Japannext described in Note 9 | (38,754) | ||
Net cash used in investing activities | (59,017) | (24,299) | (36,159) |
Cash flows from financing activities | |||
Distribution to members | (130,000) | (140,652) | |
Distribution from Virtu Financial to non-controlling interest | (162,969) | (81,377) | |
Dividends | (37,759) | (17,362) | |
Short-term borrowings, net | (20,000) | 45,000 | (72,800) |
Issuance of Common Stock, net of offering costs | 327,366 | ||
Purchase of treasury stock | (4,539) | (3,819) | |
Proceeds from long-term borrowings | 75,753 | ||
Repayment of senior secured credit facility | (3,825) | (2,914) | (7,286) |
Debt issuance costs | (5,094) | (976) | |
Repurchase of Virtu Financial Units and corresponding number of Class A and C Common Stock | (98) | (277,153) | |
Issuance of common stock, net of offering costs | 16,677 | 7,782 | |
Repurchase of Virtu Financial Units and corresponding number of Class A and C common stock in connection with IPO | (17,383) | (8,805) | |
Net cash used in financing activities | (161,237) | (144,355) | (221,654) |
Effect of exchange rate changes on Cash and cash equivalents | (1,165) | (4,255) | (5,032) |
Net (decrease) increase in Cash and cash equivalents | 18,180 | 87,371 | 9,854 |
Cash and cash equivalents, beginning of period | 163,235 | 75,864 | 66,010 |
Cash and cash equivalents, end of period | 181,415 | 163,235 | 75,864 |
Supplementary disclosure of cash flow information | |||
Cash paid for interest | 54,872 | 63,230 | 61,293 |
Cash paid for taxes | 16,175 | 12,875 | 3,764 |
Non-cash investing activities | |||
Share based compensation of developers relating to software capitalized | 2,750 | 11,278 | $ 1,719 |
Non-cash financing activities | |||
Tax receivable agreement described in Note 4 | (545) | $ 21,854 | |
Discount on issuance of senior secured credit facility | $ 1,350 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2016 | |
Organization and Basis of Presentation | |
Organization and Basis of Presentation | Virtu Financial, Inc. and Subsidiaries Notes to Consolidated Financial Statements (dollars in thousands, except shares and per share amounts, unless otherwise noted) 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 the Company’s IPO. VFI is a Delaware corporation whose primary asset is its ownership of approximately 29.6% 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”), an U.S. broker-dealer and customers, which 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 which is also a 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 the Company and its majority and wholly owned subsidiaries. As sole managing member of Virtu Financial, the Company exerts control over the Group’s operations. The Company consolidates Virtu Financial and its subsidiaries’ consolidated financial statements and records the interests in Virtu Financial that the Company does not own as noncontrolling interests. All intercompany accounts and transactions have been eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
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 U.S. GAAP, which require management to make estimates and assumptions regarding measurements including the fair value of trading assets and liabilities, goodwill and intangibles, compensation accruals, capitalized software, income tax, and other matters that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ materially from those estimates. Earnings Per Share Earnings per share (“EPS”) calculated on both a basic and diluted basis. Basic EPS excludes dilution and is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is calculated by dividing the net income available for common stockholders by the diluted weighted average shares outstanding for that period. Diluted EPS includes the determinants of the basic EPS and, in addition, reflects the dilutive effect of shares of common stock estimated to be distributed in the future under the Company’s share based compensation plans. The Company grants restricted stock units (“RSUs”), which entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. As a result, the unvested RSUs meet the definition of a participating security requiring the application of the two-class method. Under the two-class method, earnings available to common shareholders, including both distributed and undistributed, are allocated to each class of common stock and participating securities according to dividends declared and participating rights in undistributed earnings, which may cause diluted EPS to be more dilutive than the calculation using the treasury stock method. Cash and Cash Equivalents 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 cash collateral advanced or received generally approximates or is greater than 102% of the fair value of the underlying securities borrowed or loaned. The Company monitors the fair value of securities borrowed and loaned, and delivers or obtains additional collateral as appropriate. Receivables and payables with the same counterparty are not offset in the consolidated statements of financial condition. Interest received or paid by the Company for these transactions is recorded gross on an accrual basis under interest and dividends income or interest and dividends expense in the consolidated statements of comprehensive income. Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase In a repurchase agreement, securities sold under agreements to repurchase are treated as collateralized financing transactions and are recorded at contract value, plus accrued interest, which approximates fair value. It is the Company's policy that its custodian 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. Interest received or paid by the Company for these transactions is recorded gross on an accrual basis under interest and dividends income or interest and dividends expense in the consolidated statements of comprehensive income. Receivables from/Payables to Broker-dealers and Clearing Organizations 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, 2016 and 2015, 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 by counterparty basis 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 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 records financial instruments owned, including those pledged as collateral, and financial instruments sold, not yet purchased at fair value. Gains and losses arising from financial instrument transactions are recorded net on a trade-date basis in trading income, net, in the consolidated statements of comprehensive income. Fair Value Measurements Fair value is defined as 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. The Company categorizes its financial instruments into a three level hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy level assigned to each financial instrument is based on the assessment of the transparency and reliability of the inputs used in the valuation of such financial instruments at the measurement date based on the lowest level of input that is significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories based on inputs: Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 — Quoted prices in markets that are not active and financial instruments for which all significant inputs are observable, either directly or indirectly; Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Transfers in or out of levels are recognized based on the beginning fair value of the period in which they occurred. Fair Value Option The fair value option election that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are recorded in other revenues (losses) in the consolidated statements of comprehensive income. The decision to elect the fair value option is determined on an instrument by instrument basis and must be applied to an entire instrument and is irrevocable once elected. Derivative Instruments Derivative instruments used for trading purposes, including economic hedges of trading instruments, which are carried at fair value include futures, forward contracts, and options. Unrealized gains or losses on these derivative instruments are recognized currently within trading income, net in the consolidated statement of comprehensive income. Fair values for exchange-traded derivatives, principally futures, are based on quoted market prices. Fair values for over-the-counter derivative instruments, principally forward contracts, are based on the values of the underlying financial instruments within the contract. The underlying instruments are currencies which are actively traded. The Company presents its derivatives balances on a net-by-counterparty basis when the criteria for offsetting are met. 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. Furniture, fixtures, and equipment are depreciated over three to seven years. Leasehold improvements are amortized over the lesser of the length of the lease term or seven years. Capitalized Software The Company capitalizes costs of materials, consultants, and payroll and payroll related costs for employees incurred in developing internal-use software. Costs incurred during the preliminary project and post-implementation stages are charged to expense. Management’s judgment is required in determining the point at which various projects enter the stages at which costs may be capitalized, in assessing the ongoing value of the capitalized costs, and in determining the estimated useful lives over which the costs are amortized. Capitalized software development costs and related accumulated amortization are included in property, equipment and capitalized software in the accompanying consolidated statements of financial condition and are amortized over a period of 1.4 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 the Company’s 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 the Company’s only reporting unit. 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, 2016, 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 Company’s management believes to be an appropriate indicator of its fair value. Based on the results of the annual impairment tests performed, no goodwill impairment was recognized during the years ended December 31, 2016, 2015, and 2014, 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. Exchange stock includes shares that entitle the Company to certain trading privileges. The shares are marked to market with the corresponding gain or loss recorded under operating and administrative in the consolidated statements of comprehensive income. The Company’s exchange memberships and stock are included in other assets in 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 technology licensing fees and agency commission fees. Technology licensing fees are earned from third parties for licensing of the Company’s proprietary risk management and trading infrastructure technology and 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. Agency commission fees are earned from agency trades executed by the Company on behalf of third parties and recognized on a trade date basis. 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 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, 2016 and 2015 or the results of operations or cash flows for the years ended December 31, 2016, 2015, and 2014. Comprehensive Income and Foreign Currency Translation 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 revenue and expenses are translated at weighted average exchange rates for the period. Gains and losses resulting from translating foreign currency financial statements, net of related tax effects, are reflected in accumulated other comprehensive income, a separate component of stockholders’ equity. Share-Based Compensation The fair value of awards issued for compensation prior to the Reorganization Transactions and the IPO was determined by management, with the assistance of an independent third party valuation firm, using a projected annual forfeiture rate, where applicable, on the date of grant. Share-based awards issued for compensation in connection with or subsequent to the Reorganization 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 is 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 Accounting Standard Update (“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. In December 2016, FASB issued ASU 2016-20 Technical Correction and Improvement (Topic 606): Revenue from Contracts with Customers , which amends the guidance in ASU 2014-09. The effective date and transition requirements for the ASU are the same as ASU 2014-09. The Company is currently evaluating the potential effects of adoption of ASU 2014-09, ASU 2015-14, and ASU 2016-20 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 requires 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 is effective in the first annual period ending after December 15, 2016. The Company adopted this ASU effective as of December 31, 2016, and it did not have an impact on the Company’s consolidated financial statements. Financial Assets and Liabilities — In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The update intends to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The new standard affects all entities that hold financial assets or owe financial liabilities and is effective for annual reporting periods (including interim periods) beginning after December 15, 2017. Early adoption of the ASU is not permitted, e xcept for the amendments relating to the presentation of the change in the instrument-specific credit risk relating to a liability that an entity has elected to measure at fair value . The Company is currently evaluating the potential effects of the adoption of ASU 2016-01 on its 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. Compensation – Stock Compensation — In March 2016, FASB issued ASU 2016-09, Employee Share-Based Payment Accounting Improvements . The ASU makes a number of changes to accounting for share based payment programs, including the following principal changes: providing that all excess tax benefits and tax deficiencies arising from share-based payment programs should be recognized as income tax expense or benefit in the income statement; allowing companies to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (as is provided under current GAAP) or account for forfeitures when they occur; and providing that partial cash settlement of an award for tax-withholding purposes would not result, by itself, in liability classification of the award provided the amount withheld does not exceed the maximum statutory tax rate (as opposed to the current requirement which specifies the minimum statutory tax rate) for an employee in the applicable jurisdictions. The ASU also provides guidance on the classification of various items related to share based payment programs in the statement of cash flows. The ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and an entity that elects early adoption must adopt all of the amendments in the same period. The Company has elected to early adopt this ASU effective as of December 31, 2016 and it did not have a material impact on the Company’s consolidated financial statements. Statement of Cash Flows – In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The ASU intended to reduce diversity in practice how certain transactions are classified in the statement of cash flows by mandating classification of certain activities. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The Company is currently evaluating the potential effects of adoption of ASU 2016-15 on the Company’s consolidated financial statements. Income Taxes – In October 2016, FASB issued ASU 2016-16, Income Taxes (Topic 749): Intra-Entity Transfers of Assets Other Than Inventory . The ASU requires the reporting entity to recognize the tax expense from the sale of an asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of the transactions are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The ASU is effective for annual periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the potential effects of adoption of ASU 2016-16 on the Company’s consolidated financial statements. Goodwill - In January, 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment . To simplify the subsequent measurement of goodwill, the Company’s board of directors eliminated Step 2 from the goodwill impairment test. (In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company’s board of directors also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The ASU is effective for public entities in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the potential effects of adoption of ASU 2017-04 on the Company’s consolidated financial statements. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2016 | |
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 28.9% 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) 2016 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 Net income available for common stockholders $ $ The calculation of basic and diluted earnings per share is presented below: For the Year Ended December 31 (in thousands, except for share or per share data) 2016 2015 Basic earnings per share: Net income available for common stockholders $ $ Less: Dividends and undistributed earnings allocated to participating securities — Net income available for common stockholders, net of dividends and undistributed earnings allocated to participating securities Weighted average shares of common stock outstanding: Class A Basic Earnings per share $ $ For the Year Ended December 31 (in thousands, except for share or per share data) 2016 2015 Diluted earnings per share: Net income available for common stockholders, net of dividends and undistributed earnings allocated to participating securities $ $ Weighted average shares of common stock outstanding: Class A Issued and outstanding Issuable pursuant to 2015 Management Incentive Plan(1) — Diluted Earnings per share $ $ (1) The dilutive impact of unexercised stock options excludes from the computation of EPS 743,096 and 0 options for the years ended December 31, 2016 and 2015, respectively, because inclusion of the options would have been anti-dilutive. |
Tax Receivable Agreements
Tax Receivable Agreements | 12 Months Ended |
Dec. 31, 2016 | |
Tax Receivable Agreements | |
Tax Receivable Agreements | 4. Tax Receivable Agreements In connection with the IPO and the Reorganization Transactions, the Company entered into tax receivable agreements to make payments to certain Virtu Members, as defined in Note 13, that are generally equal to 85% of the applicable cash tax savings, if any, that the Company actually realizes as a result of favorable tax attributes that were and will continue to be available to the Company as a result of the Reorganization Transactions, exchanges of membership interests for Class A common stock or Class B common stock and payments made under the tax receivable agreements. Payments will occur only after the filing of the U.S. federal and state income tax returns and realization of the cash tax savings from the favorable tax attributes. The 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 was extended until September 15, 2016. Future payments under the tax receivable agreements in respect of subsequent exchanges would be in addition to these amounts. As a result of (i) the purchase of equity interests in Virtu Financial from certain Virtu Members in connection with the Reorganization Transactions, (ii) the purchase of non-voting common interest units in Virtu Financial (the “Virtu Financial Units”) (along with the corresponding shares of Class C common stock) from certain of the Virtu Members in connection with the IPO, (iii) the purchase of Virtu Financial Units (along with the corresponding shares of Class C common stock) and the exchange of Virtu Financial Units (along with the corresponding shares of Class C common stock) for shares of Class A common stock in connection with the Secondary Offerings, the Company recorded a deferred tax asset of $210.1 million associated with the increase in tax basis that results from such events. Payments to certain Virtu Members in respect of the purchases are expected to aggregate to approximately $231.4 million, ranging from approximately $0.7 million to $20.8 million per year over the next 15 years. The corresponding deduction to additional paid-in capital was approximately $21.3 million for the difference between the tax receivable agreements liability and the related deferred tax asset. In connection with the September 2016 Secondary Offering (as defined below), the Company recorded an additional deferred tax asset of $9.3 million and payment liability pursuant to the tax receivable agreements of $7.6 million, with the $1.7 million difference recorded as an increase to additional paid-in capital. The amounts recorded as of December 31, 2016 and December 31, 2015 are based on best estimates available at the respective dates and may be subject to change after the filing of the Company’s U.S. federal and state income tax returns for the years in which tax savings were realized. During the year ended December 31, 2016, the Company filed its 2015 U.S. federal and state tax returns and recorded increases of $4.2 million in deferred tax assets, $5.4 million in payment liability pursuant to the tax receivable agreements and a corresponding reduction of $1.2 million to additional paid-in capital as a result of differences between the estimate and the tax returns. At December 31, 2016 and 2015, the Company’s remaining deferred tax assets were approximately $185.6 million and $187.0 million, respectively, the Company’s payment liability pursuant to the tax receivable agreements were approximately $231.4 million and $218.4 million, respectively. For the tax receivable agreements discussed above, the cash savings realized by the Company are computed by comparing the actual income tax liability of the Company to the amount of such taxes the Company would have been required to pay had there been (i) no increase to the tax basis of the assets of Virtu Financial as a result of the purchase or exchange of Virtu Financial Units, (ii) no tax benefit from the tax basis in the intangible assets of Virtu Financial on the date of the IPO and (iii) no tax benefit as a result of the Net Operating Losses (“NOLs”) and other tax attributes of Virtu Financial. Subsequent adjustments of the tax receivable agreements obligations due to certain events (e.g., changes to the expected realization of NOLs or changes in tax rates) will be recognized within operating expenses in the consolidated statements of comprehensive income. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016, 2015, and 2014. Acquired intangible assets consisted of the following as of December 31, 2016 and December 31, 2015: As of December 31, 2016 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, 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 $ $ $ Amortization expense relating to finite-lived intangible assets was approximately $0.2 million, $0.2 million, and $0.2 million for the years ended December 31, 2016, 2015, and 2014, 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, 2016 | |
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, 2016 and December 31, 2015: (in thousands) 2016 2015 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 (described in Note 8) of approximately $309.1 million and $219.1 million as of December 31, 2016 and 2015, 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, 2016 | |
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, 2016 and December 31, 2015, substantially all of the securities received as collateral have been repledged. The fair value of the collateralized transactions at December 31, 2016 and December 31, 2015 are summarized as follows: (in thousands) 2016 2015 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, 2016 and December 31, 2015 consisted of the following: (in thousands) 2016 2015 Equities $ $ Exchange traded notes $ $ |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2016 | |
Borrowings | |
Borrowings | 8. Borrowings Outstanding borrowings and financing capacity or unused available capacity under the Company’s borrowing arrangements were as follows: At December 31, 2016 At December 31, 2015 Financing Borrowing Financing Borrowing (in thousands) Available Outstanding Available Outstanding Broker-dealer credit facilities: Uncommitted facility $ $ $ $ Committed facility — — $ $ $ $ Short-Term Credit Facilities: Short-term credit facilities (1) $ $ $ $ $ $ $ $ (1) Outstanding borrowings were included with receivable from broker-dealers and clearing organization within the consolidated statements of financial condition. At December 31, 2016 At December 31, 2015 Maturity Unused Available Borrowing Unused Available Borrowing (in thousands) Date Capacity Outstanding Capacity Outstanding Long-term borrowings: Senior secured credit facility October 2022 $ n/a $ $ n/a $ Revolving credit facility April 2018 — — SBI bonds January 2020 n/a n/a — $ $ $ $ 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 equal to 1.66% at December 31, 2016 and 1.25% at December 31, 2015. 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, April 24, 2015, and July 18, 2016, 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. Interest expense for the years ended December 31, 2016, 2015 and 2014 was approximately $1.2 million, $0.9 million, and $0.5 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. Borrowings bore interest at a weighted average interest rate of 3.12% and 2.48% per annum, as of December 31, 2016 and 2015, respectively. Interest expense in relation to the facilities for the years ended December 31, 2016, 2015 and 2014 was approximately $6.3 million, $5.5 million, and $3.3 million, respectively. Interest expense is recorded within interest and dividends expense in the accompanying consolidated statements of comprehensive income. Long-Term Borrowings Senior Secured Credit Facility On July 8, 2011, Virtu Financial, its wholly owned subsidiary, VFH Parent LLC (“VFH”) and each of its unregulated domestic subsidiaries entered into the credit agreement (the “Credit Agreement”) among VFH, Virtu Financial, Credit Suisse AG, as administrative agent, and the other parties thereto. The senior secured credit facility funded a portion of the MTH acquisition with a term loan in the amount of $320.0 million to VFH. The senior secured credit facility was issued at a discount of 2.0% or $313.6 million, net of $6.4 million discount. The senior secured 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 increases 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 minimum principal payments 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 senior secured credit facility are otherwise substantially similar to the original senior secured credit facility, except as set forth below. On October 27, 2016, Virtu Financial and VFH entered into a third amended and restated credit agreement with JPMorgan Chase Bank, N.A. as administrative agent, lead arranger and bookrunner and BMO Capital Markets Corp., as syndication agent (the “Refinancing Transaction”). The third amended and restated credit agreement amends and restated in its entirety the existing Credit Agreement. Under the third amended and restated credit agreement (i) VFH’s existing term loan facility was replaced by a senior secured first lien term loan in an aggregate principal amount of $540.0 million, drawn in its entirety on the closing date and (ii) VFH’s existing senior secured first lien revolving facility with aggregate commitments of $100.0 million remains in effect. The term loan borrowings under the third amended and restated credit agreement will bear interest, at the Company’s 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) 1.75%, plus, in each case, 2.50%, or (ii) the greater of (x) an adjusted LIBOR rate for the interest period in effect and (y) 0.75%, plus, in each case, 3.50%. In addition, the term loans were issued at a discount of 0.25%. Borrowings under the third amended and restated credit agreement continue to be secured by substantially all of VFH’s assets, other than the equity interests in and assets of its subsidiaries that are subject to, or potentially subject to, regulatory oversight, and its foreign subsidiaries, but including 100% of the non-voting stock and 65% of the voting stock of these subsidiaries. Under the terms of the third amended and restated credit agreement, term loans will mature on October 27, 2022, subject to certain exceptions and permitted extensions as set forth in the third amended and restated credit agreement. A portion of certain financing costs incurred in connection with the original credit facility that were scheduled to be amortized over the term of the loan, including original issue discount and underwriting and legal fees, were accelerated at the closing of the refinancing. The Company recognized $5.6 million expense on accelerated financing fees as a result of the refinancing, which is included within debt issue cost related to debt refinancing in the accompanying consolidated statement of comprehensive income. On April 15, 2015, the Company, Virtu Financial, and each unregulated domestic subsidiary of Virtu Financial, entered into an amendment agreement to the Credit Agreement, which provided for a revolving credit facility with aggregate commitments by revolving lenders of $100.0 million. 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 the Company’s 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. Under the terms of the third amended and restated credit agreement, revolving commitments will terminate and outstanding revolving loans will mature on April 15, 2018, subject to certain exceptions and permitted extensions as set forth in the third amended and restated credit agreement. SBI Bonds On July 25, 2016, VFH issued Japanese Yen Bonds (collectively the “SBI Bonds”) in the aggregate principal amount of ¥3.5 billion ($33.1 million at issuance date) to SBI Life Insurance Co., Ltd. and SBI Insurance Co., Ltd. The proceeds from the SBI Bonds were used to partially fund the investment in SBI (as described in Note 9). The SBI Bonds were issued bearing interest at the rate per annum of 4.0% until their scheduled maturity on January 6, 2020. Following the consummation of the Refinancing Transaction (as described in Note 18) and in accordance with the terms and conditions of the SBI Bonds, the rate per annum was increased to 5.0% as of October 2016. The SBI Bonds are guaranteed by Virtu Financial. The SBI Bonds are subject to fluctuations on the Japanese Yen currency rates relative to the Company’s reporting currency (U.S. Dollar) with the changes reflected in other revenues (losses) in the consolidated statements of comprehensive income. The principal balance was ¥3.5 billion ($29.9 million) as of December 31, 2016 and the Company recorded a loss of $3.2 million due to the change in currency rates during the year ended December 31, 2016. Aggregate future required minimum principal payments based on the terms of the long-term borrowings at December 31, 2016 were as follows: (in thousands) 2017 $ 2018 2019 2020 and thereafter Total principal of long-term borrowings $ The below table contains a reconciliation of the long-term borrowings principal amount to the secured credit facility recorded in the consolidated statements of financial condition: December 31, (in thousands) 2016 2015 Senior secured credit facility outstanding principal $ $ SBI Bonds outstanding principal — Net deferred financing fees Net discount on senior secured credit facility Long-term borrowings $ $ |
Financial Assets and Liabilitie
Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Financial Assets and Liabilities | |
Financial Assets and Liabilities | 9. Financial Assets and Liabilities At December 31, 2016 and December 31, 2015, substantially all of Company’s financial assets and liabilities, except for the long-term borrowings, short-term borrowings, securities borrowed and loaned, and certain exchange memberships which would all be categorized as Level 2, 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 long-term borrowings approximates fair value as of December 31, 2016 and December 31, 2015 based on the recent transaction date of the SBI Bonds and the quoted over-the-counter market prices provided by the issuer of the senior secured credit facility, and would be 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 broadly distributed bank and broker prices, 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, 2016 and December 31, 2015, the Company’s derivative contracts and non-U.S. government obligations have been categorized as Level 2. In July 2016, the Company made an additional minority investment in SBI, a proprietary trading system based in Tokyo, which is further described later in this footnote. The Company elected the fair value option to account for this equity method investment because it believes that fair value is the most relevant measurement attribute for this investment, as well as to reduce operational and accounting complexity. This investment has been categorized as Level 3. The valuation process involved for Level 3 measurements is completed on a quarterly basis. The Company employs two valuation methodologies when determining the fair value of investments categorized as Level 3, market comparable analysis and discounted cash flow analysis. The market comparable analysis considers key financial inputs, recent public and private transactions and other available measures. The discounted cash flow analysis incorporates significant assumptions and judgments and the estimates of key inputs used in this methodology include the discount rate for the investment and assumed inputs used to calculate terminal values, such as price/earnings multiples. Upon completion of the valuations conducted using these methodologies, a weighting is ascribed to each method and the ultimate fair value recorded for a particular investment will generally be within a range suggested by the two methodologies. When determining the weighting ascribed to each valuation methodology, the Company considers, among other factors, the availability of direct market comparables, the applicability of a discounted cash flow analysis and the expected holding period. There were no transfers of financial instruments between levels during the years ended December 31, 2016 and 2015. Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2016: December 31, 2016 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 $ $ $ — $ — $ Non-U.S. government obligations — — — Exchange traded notes — — — Currency forwards — — Options — — — $ $ $ — $ $ Financial instruments owned, pledged as collateral: Equity securities $ $ — $ — $ — $ Exchange traded notes — — — $ $ — $ — $ — $ Other Assets Equity investment $ — $ — $ $ — $ Exchange stock — — — $ $ — $ $ — $ Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ $ $ — $ — $ Exchange traded notes — — — Currency forwards — — — Options — — — $ $ $ — $ $ Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2015: December 31, 2015 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 — — — 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 — — — Currency forwards — — — Options — — — Interest rate swaps — — — $ $ $ — $ $ Investment in SBI Japannext Co., Ltd. On July 27, 2016, the Company purchased an additional minority interest (29.4%) in SBI Japannext, a proprietary trading system based in Tokyo, for $38.8 million in cash. In connection with the investment, VFH issued bonds to certain affiliates of SBI Japannext and used the proceeds to finance the transaction (Note 8). Subsequent to the Company’s incremental investment, the Company reclassified $0.4 million (0.5% interest) of existing SBI shares held prior to the transaction, which were historically recorded at cost within other assets in the consolidated statements of financial condition, to Level 3. The Company’s initial fair value of SBI was determined using the discounted cash flow method, an income approach, with the discount rate of 15.9% applied to the cash flow forecasts. The Company also used a market approach based on 19x average price/earnings multiples of comparable companies to corroborate the income approach. The fair value of SBI at December 31, 2016 was determined to approximate the purchase price paid for the SBI investment, adjusted for the changes in the Japanese Yen currency rate, given the proximity to the transaction date and lack of significant events subsequent to the transaction date. The fair value measurement is highly sensitive to significant changes in the unobservable inputs and significant increases (decreases) in discount rate or decreases (increases) in price/earnings multiples would result in a significantly lower (higher) fair value measurement. Changes in the fair value of SBI are reflected in other revenues, net in the consolidated statements of comprehensive income. The following presents the changes in Level 3 financial instruments measured at fair value on a recurring basis: Year Ended December 31, 2016 Change in Net Unrealized Gains / (Losses) on Investments Balance at Total Realized Net Transfers Balance at still held at December 31, and Unrealized into (out of) December 31, December 31, (in thousands) 2015 Purchases Gains / (Losses) Level 3 2016 2016 Assets Other assets: Equity investment $ - $ $ $ $ $ Total $ - $ $ $ $ $ Offsetting of Financial Assets and Liabilities The Company does not net securities borrowed and securities loaned, or securities purchased under agreements to resell and securities sold under agreements to repurchase. These financial instruments are presented on a gross basis in the consolidated statements of financial condition. In the tables below, the amounts of financial instruments owned that are not offset in the consolidated statements of financial condition, but could be netted against financial liabilities with specific counterparties under legally enforceable master netting agreements in the event of default, are presented to provide financial statement readers with the Company’s estimate of its net exposure to counterparties for these financial instruments. The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of December 31, 2016 and 2015.. December 31, 2016 Net Amounts of Gross Amounts Assets Presented Offset in the in the Gross Amounts Not Offset In the 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 $ $ — $ $ $ $ Trading assets, at fair value: Currency forwards — — Options — Total $ $ $ $ $ $ Net Amounts of Gross Amounts Liabilities Presented Offset in the in the Gross Amounts Not Offset In the Gross Amounts Consolidated Consolidated Statement of Financial Condition of Recognized Statement of Statement of Financial Cash Collateral Liabilities Financial Condition Financial Condition Instruments Pledged Net Amount Offsetting of Financial Liabilities: Securities loaned $ $ — $ $ $ — $ Trading liabilities, at fair value: Currency forwards — — — — Options — — — Total $ $ $ $ $ — $ December 31, 2015 Net Amounts of Gross Amounts Assets Presented Offset in the in the Gross Amounts Not Offset In the 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 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 $ $ — $ $ $ — $ 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 $18.0 million and $(8.1) million, which are included within receivables from broker-dealers and clearing organizations as of December 31, 2016 and 2015, respectively, and $(3.5) million and $(11.7) million, which are included within payables to broker-dealers and clearing organizations as of December 31, 2016 and 2015, respectively, and would be categorized as Level 1. The following table presents gross obligations for securities lending transactions by remaining contractual maturity and the class of collateral pledged. December 31, 2016 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, 2016 | |
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, 2016 and December 31, 2015: (in thousands) December 31, 2016 December 31, 2015 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 Fixed income 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 variation margin on long and short futures contracts. The following table summarizes the net gain from derivative instruments not designated as hedging instruments, which are recorded in trading income, net in the accompanying consolidated statements of comprehensive income for the years ended December 31, 2016, 2015, and 2014. December 31, (in thousands) 2016 2015 2014 Futures $ $ $ Currency forwards Options Interest rate swaps $ $ $ |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | 11. Income Taxes Income before income taxes and noncontrolling interest is as follows for the years ended December 31, 2016, 2015 and 2014: For the years ended December 31, 2016 2015 2014 (in thousands) U.S. operations $ $ $ Non-U.S. operations $ $ $ The provision for income taxes consists of the following for the years ended December 31, 2016, 2015 and 2014. For the years ended December 31, (in thousands) 2016 2015 2014 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, 2016, 2015 and 2014 is as follows: December 31, 2016 2015 2014 (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, 2016 and 2015 are as follows: December 31, (in thousands) 2016 2015 Deferred income tax assets Tax Receivable Agreement $ $ Share-based compensation Fixed assets and other Total deferred income tax assets $ $ Deferred income tax liabilities Fixed assets Total deferred income tax liabilities $ $ Prior to the consummation of the Reorganization Transactions and the IPO, the Company’s business was historically operated through a limited liability company that is treated as a partnership for U.S. federal income tax purposes, and as such most of its income is not subject to U.S. federal and certain state income taxes. Subsequent to consummation of the Reorganization Transactions and the IPO, the Company is subject to U.S. federal, state and local income tax at the rate applicable to corporations less the rate attributable to the noncontrolling interest in Virtu Financial. These noncontrolling interests are subject to U.S. taxation as partnerships. Accordingly, for years ended December 31, 2016, 2015 and 2014, 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 4 and 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, 2016 and December 31, 2015. The Company is subject to taxation in U.S. federal, state, local and foreign jurisdictions. As of December 31, 2016, the Company’s tax years for 2013 through 2015 and 2010 through 2015 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, 2016 | |
Commitments, Contingencies and Guarantees | |
Commitments, Contingencies and Guarantees | 12. Commitments, Contingencies and Guarantees At December 31, 2016, minimum rental commitments under non-cancellable leases are approximately as follows: Minimum Rental Commitments Year Ending December 31 Capital Operating 2017 2018 2019 2020 — 2021 — Thereafter — Total minimum lease payments $ $ Total operating lease expense, net of amortization expense related to landlord incentives, for the years ended December 31, 2016, 2015 and 2014 was approximately $2.4 million, $5.3 million, and $3.5 million, respectively. Occupancy lease expense for the years ended December 31, 2016, 2015 and 2014 of $1.3 million, $3.9 million and $1.7 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, 2016, 2015 and 2014 of $1.1 million, $1.4 million and $1.8 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, $0 and $2.6 million, respectively, in compensation expense related to the plan, for the years ended December 31, 2016, 2015 and 2014, 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 governmental, 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 the Company’s 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, the Company has accrued an estimated loss of €5.0 million (approximately $5.4 million) in relation to the fine imposed by the AMF. 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. 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 although they might be material for the Company’s results of operations or cash flows for any particular reporting period. 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, 2016 | |
Capital Structure | |
Capital Structure | 13. Capital Structure The Company has four classes of authorized common stock. The Class A common stock and the Class C common stock have one vote per share. The Class B common stock and the Class D common stock have 10 votes per share. Shares of the Company’s common stock generally vote together as a single class on all matters submitted to a vote of the Company’s stockholders. Initial Public Offering and Reorganization Transactions Prior to the IPO, the Company’s business was conducted through Virtu Financial and its subsidiaries. In a series of transactions that occurred in connection with the IPO, (i) the Company became the sole managing member of Virtu Financial and acquired Virtu Financial Units, (ii) certain direct or indirect equityholders of Virtu Financial acquired shares of the Company’s Class A common stock and (iii) certain direct or indirect equityholders of Virtu Financial had their interests reclassified into Virtu Financial Units and acquired shares of the Company’s Class C common stock or, in the case of the TJMT Holdings LLC (the “Founder Post-IPO Member”) only, shares of the Company’s Class D common stock (collectively, the “Virtu Members”). On April 21, 2015, the Company completed 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. In connection with the Reorganization Transactions, the Company sold 16,532,272 shares of Class A common stock. The Company used its net proceeds from its IPO to purchase shares of Class A common stock from an affiliate of Silver Lake Partners, purchase Virtu Financial Units and corresponding shares of Class C common stock from certain Virtu Members, and for working capital and general corporate purposes. 2015 Management Incentive Plan The Company’s board of directors and stockholders adopted the 2015 Management Incentive Plan, which became effective upon consummation of the IPO. 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. Secondary Offerings In November 2015, the Company and certain selling stockholders affiliated with Silver Lake Partners completed a public offering (the “November 2015 Secondary Offering”) of 6,473,371 shares of the Company’s Class A common stock. 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 November 2015 Secondary Offering. The Company used its net proceeds from the offering to purchase Virtu Financial Units (together with corresponding 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. Following the November 2015 Secondary Offering, Silver Lake Partners no longer holds any equity interest in us. In September 2016, the Company completed a public offering (the “September 2016 Secondary Offering,” collectively with the November 2015 Secondary Offering, the “Secondary Offerings”) of 1,103,668 shares of the Company’s Class A common stock. The Company sold 1,103,668 shares of Class A common stock at a price to the public of $15.75 per share. The Company used the net proceeds from the September 2016 Secondary Offering to purchase Virtu Financial Units (together with corresponding shares of Class C common stock) from certain employees at a net price equal to the price paid by the underwriters for shares of its Class A common stock, which was the price at which the shares were offered to the public less underwriting discounts and commissions of $0.10 per share. As a result of the completion of the IPO, the Reorganization Transactions and the Secondary Offerings, the Company holds approximately 29.6% interest in Virtu Financial at December 31, 2016. Distributions in Connection with the IPO In connection with the IPO, the holders of the outstanding equity interests in Virtu Financial prior to the consummation of the Reorganization Transactions (the “Virtu Financial Pre-IPO Members”) authorized the Company as the managing member of Virtu Financial to make distributions to the Virtu Financial Pre-IPO Members in an aggregate amount up to $50.0 million and on such dates as the Company determined in its sole discretion. Since the IPO, the Virtu Financial Pre-IPO Members have received distributions of $20.0 million. The Company has not recorded a liability as there is no obligation to make any further distributions to the Virtu Financial Pre-IPO Members and any such discretionary distributions will be funded from cash on hand. |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
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: Class A-2 profits interests were issued to Virtu Employee Holdco LLC (“Employee Holdco”), a holding company that holds the interests on behalf of certain key employees or stakeholders. During the years ended December 31, 2016, 2015 and 2014, the Company recorded expense relating to non-voting common interest units, which 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 common interest units are subject to the same vesting requirements as the prior Class A-2 profits interests, which were either fully vested upon issuance or vested over a period of up to four years, and in each case are subject to repurchase provisions upon certain termination events. These awards were accounted for as equity awards and were measured at fair value at the date of grant. The Company recognized compensation expense related to the vesting of non-voting common interest units (formerly Class A-2 profits interests) of $1. 3 million, $ 1.5 million and $16.0 million for the years ended December 31, 2016, 2015 and 2014, respectively. As of December 31, 2016 and 2015, total unrecognized share-based compensation expense related to unvested non-voting common interest units (formerly Class A-2 profits interests), was $0.8 million and $2.5 million, respectively; and this amount is expected to be recognized over a weighted average period of 0.8 years and 1.6 years, respectively. 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, 2014 $ Interests granted Interests repurchased — Outstanding immediately prior to the Reorganization Transactions $ 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. Additionally, Class B interests were issued to Employee Holdco on behalf of certain key employees and stakeholders on July 8, 2011, and on subsequent dates. East MIP Class B interests and Class B interests were each 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. In connection with the Reorganization Transactions, East MIP was liquidated and a portion of the Class A-2 capital interests held by East MIP were contributed to Virtu Employee Holdco on behalf of holders of East MIP Class B Interests (or, in the case of certain employees located outside the United States, contributed to a trust whose trustee is one of the Company’s subsidiaries), which Class A-2 capital interests were subsequently reclassified into non-voting common interest units. The Company recognized compensation expense in respect of non-voting common interest units (formerly Class B interests) vested of $1.1 million and $44.9 million for the years ended December 31, 2016 and 2015. The compensation expense related to non-voting common interest units (formerly 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, 2016 and 2015, total unrecognized share-based compensation expense related to unvested non-voting common interest units (formerly Class B interests) was $0.8 million and $2.1 million, respectively; and this amount is expected to be recognized over a weighted average period of 1.0 years and 1.8 years, respectively. Additionally, in connection with the compensation charges related to non-voting common interest units (formerly Class B interests) mentioned above, the Company capitalized $0.09 million and $9.2 million for the years ended December 31, 2016 and 2015. The amortization costs related to these capitalized compensation charges and previously capitalized compensation charges related to East MIP Class B interests and Class B interests were approximately $0.7 million and $8.5 million for the years ended December 31, 2016 and 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 profit, Class B and East MIP Class B interest 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 Class A-2 profits, Class B and East MIP Class B interests for the years ended December 31, 2015 and 2014 are summarized below: 2015 2014 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, 2016 and 2015, there were 14,231,535 and 15,394,426 non-voting common interest units outstanding, respectively, and 1,162,891 and 57,106 non-voting common interest units and corresponding Class C common stock were exchanged into Class A common stock, forfeited or repurchased during years ended December 31, 2016 and 2015. Share-based compensation after the Company’s Reorganization completed on April 15, 2015 and IPO completed on April 16, 2015: Pursuant to 2015 Management Incentive Plan as described above (Note 13) and in connection with the IPO, non-qualified stock options to purchase shares of Class A common stock were granted, each of which vests in equal annual installments over a period of the four years from grant date and expires not later than 10 years from the date of grant. The following table summarizes activity related to stock options for the year ended December 31, 2016 and 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 $ — $ — Granted — — — — — Exercised — — — — — Forfeited or expired — — — — At December 31, 2016 $ $ The fair value of the stock option grants in 2015 was determined through the application of the Black-Scholes-Merton model with the following assumptions: 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 $5.6 million and $4.7 million of compensation expense in relation to the stock options issued and outstanding for the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016 and 2015, total unrecognized share-based compensation expense related to unvested stock options was $14.2 million and $22.4 million, respectively, and these amounts are to be recognized over a weighted average period of 2.3 years and 3.3 years, respectively. Class A common stock and Restricted Stock Units Pursuant to the 2015 Management Incentive Plan as described above (Note 13) subsequent to the IPO, shares of immediately vested Class A common stock and 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 a volume weighted average price and will be recognized on a straight line basis over the vesting period. For the year ended December 31, 2016 and 2015, 656,019 and 576,693 shares of immediately vested Class A common stock were granted and the Company recorded compensation expense of $10.6 million and $13.2 million, respectively. The following table summarizes activity related to the restricted stock units for the years ended December 31, 2016 and 2015: Weighted Number of Average Fair Shares Value At December 31, 2014 — $ - Granted Forfeited — — Vested — — At December 31, 2015 $ Granted Forfeited Vested At December 31, 2016 $ The Company recognized $ 6.3 million and $0.5 million of compensation expense in relation to the restricted stock units for the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016 and 2015, total unrecognized share-based compensation expense related to unvested restricted stock units was $28.5 million and $20.9 million, respectively, and this amount is to be recognized over a weighted average period of 2.6 years and 3.0 years, respectively. |
Property, Equipment and Capital
Property, Equipment and Capitalized Software | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 and 2015: (in thousands) 2016 2015 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, 2016, 2015, and 2014 was approximately $19.6 million, $24.0 million and $20.0 million, respectively, and is included within depreciation and amortization expense in the accompanying consolidated statements of comprehensive income. The Company’s capitalized software development costs excluding the compensation charges recognized in relation to the IPO disclosed below were approximately $11.1 million, $10.1 million, and $9.8 million for years ended December 31, 2016, 2015 and 2014, respectively. The related amortization expense was approximately $10.1 million, $9.6 million, and $10.4 million for the years ended December 31, 2016, 2015, and 2014, respectively, and is included within depreciation and amortization expense in the accompanying consolidated statements of comprehensive income. Additionally, in connection with the compensation charges related to non-voting interest units (formerly Class B interests) recognized upon the IPO (Note 14), the Company capitalized approximately $0.09 million and $9.2 million for the years ended December 31, 2016 and 2015 respectively. The amortization costs related to these capitalized compensation charges and previously capitalized compensation charges related to East MIP Class B interests and Class B interests were approximately $0.7 million and $8.5 million for the years ended December 31, 2016 and 2015, respectively. |
Regulatory Requirement
Regulatory Requirement | 12 Months Ended |
Dec. 31, 2016 | |
Regulatory Requirement | |
Regulatory Requirement | 16. Regulatory Requirement As of December 31, 2016, two broker-dealer subsidiaries of the Company are subject to the SEC Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum net capital of $1.0 million for each of the two broker-dealer subsidiaries. At December 31 2016, the subsidiaries had net capital of approximately $74.5 million and $10.8 million, which was approximately $73.5 million and $9.8 million in excess of its required net capital of $1.0 million and $1.0 million, respectively. 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. Pursuant to NYSE and NYSE MKT (formerly NYSE Amex) rules, one of the broker-dealer subsidiaries was also required to maintain $1.9 million and $1.9 million of capital in connection with the operation of its Designated Market Maker (“DMM”) business as of December 31, 2016 and 2015, 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 broker-dealer subsidiary is registered as the DMM. |
Geographic Information
Geographic Information | 12 Months Ended |
Dec. 31, 2016 | |
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 Company’s subsidiaries incurring operating expenses such as employee compensation, communications and data processing and other overhead costs, for the purpose of providing execution, clearing and other support services to affiliates. Charges for transactions between regions are designed to approximate full costs. Intra-region income and expenses and related balances have been eliminated in the geographic information presented below to accurately reflect the external business conducted in each geographical region. The revenues are attributed to countries based on the locations of the subsidiaries. The following table presents total revenues by geographic area for the years ended December 31, 2016, 2015, and 2014 : For the Years Ended December 31, (in thousands) 2016 2015 2014 Revenues: United States $ $ $ Australia Ireland Singapore China — Total revenues $ $ $ |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Related Party Transactions | 18. Related Party Transactions As of December 31, 2016, and December 31, 2015, the Company had a payable of $0.2 million and $0. 2 million to its affiliates, respectively. In the ordinary course of business, the Company purchases network connections services from affiliates of Level 3 Communications (“Level 3”). Temasek Holdings (Private) Limted and its affiliates have a significant ownership interest in Level 3. During the years ended December 31, 2016, 2015 and 2014 the Company paid $2.4 million, $4.3 million, and $2.0 million, respectively, to Level 3 for these services. 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, 2016, 2015, and 2014, the Company paid $0.2 million, $0.1 million, and $0.2 million, respectively, to Singtel for these purchases. The Company employed the son of the Company’s Founder and Executive Chairman, as a trader during the years ended December 31, 2015 and 2014. The Company paid approximately $0.8 million and $0. 6 million of employee compensation for the years ended December 31, 2015 and 2014, respectively. This employee was also granted 60,000 stock options with respect to shares of the Company’s Class A common stock under the 2015 Management Incentive Plan. The Company had no such expense during the year ended December 31, 2016. The Company has engaged a member of the Board of Directors to provide leadership consulting services. The Company has paid approximately $0.03 million, $0.1 million and $0. 1 million for such engagement for the years ended December 31, 2016, 2015, and 2014, respectively. Additionally, the Company entered into sublease arrangements with affiliates of the Company’s Founder and Executive Chairman for office space no longer used by the Company. For the years ended December 31, 2016 and 2015, the Company recognized $0.04 million and $0.1 million, respectively, pursuant to these arrangements. |
Parent Company
Parent Company | 12 Months Ended |
Dec. 31, 2016 | |
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 our senior secured credit facility. 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 condensed statements of financial condition as of December 31, 2016 and 2015 reflect the financial condition of VFI. 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) 2016 2015 Assets Cash $ $ Deferred tax asset Investment in subsidiary Receivable from subsidiaries — Other assets 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 $ $ Stockholders' equity Class A common stock (par value $0.00001), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 40,436,580 and 38,379,858 shares, Outstanding — 39,983,514 and 38,210,209 shares at December 31, 2016 and 2015, respectively — — Class B common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 0 and 0 shares at December 31, 2016 and 2015, respectively — — Class C common stock (par value $0.00001), Authorized — 90,000,000 and 90,000,000 shares, Issued — 19,810,707 and 20,976,598 shares, Outstanding — 19,810,707 and 20,976,598, at December 31, 2016 and 2015, respectively — — Class D common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 79,610,490 and 79,610,490 shares at December 31, 2016 and 2015, respectively Treasury stock, at cost, 453,066 and 169,649 shares at December 31, 2016 and 2015, respectively Additional paid-in capital (Accumulated deficit) Retained earnings Accumulated other comprehensive (loss) income Total stockholders' equity $ $ Total liabilities and stockholders' equity $ $ Virtu Financial, Inc. (Parent Company Only) Condensed Statements of Comprehensive Income For the Years Ended December 31, (in thousands) 2016 2015 2014 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) 2016 2015 2014 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 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 — Dividends — 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 — — Payments on repurchase of non-voting common interest Repurchase of Class C common stock — — Purchase of treasury stock — Issuance of common stock, net of offering costs — — Repurchase of Virtu Financial Units and — — Issuance of common stock in connection with secondary offering, net of offering costs — Repurchase of Virtu Financial Units and corresponding number of Class 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 offerings 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, 2016 | |
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: On November 28, 2016, the Company agreed to acquire select strategic telecommunications assets from Teza Technologies. The closing of the transaction is pending regulatory approval. The Company anticipates that the transaction will close during the first half of 2017. On February 2, 2017, 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, 2017 to holders of record as of March 1, 2017. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Use of Estimates | Use of Estimates The Company's consolidated financial statements are prepared in conformity with U.S. GAAP, which require management to make estimates and assumptions regarding measurements including the fair value of trading assets and liabilities, goodwill and intangibles, compensation accruals, capitalized software, income tax, and other matters that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ materially from those estimates. |
Earnings Per Share | Earnings Per Share Earnings per share (“EPS”) calculated on both a basic and diluted basis. Basic EPS excludes dilution and is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is calculated by dividing the net income available for common stockholders by the diluted weighted average shares outstanding for that period. Diluted EPS includes the determinants of the basic EPS and, in addition, reflects the dilutive effect of shares of common stock estimated to be distributed in the future under the Company’s share based compensation plans. The Company grants restricted stock units (“RSUs”), which entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. As a result, the unvested RSUs meet the definition of a participating security requiring the application of the two-class method. Under the two-class method, earnings available to common shareholders, including both distributed and undistributed, are allocated to each class of common stock and participating securities according to dividends declared and participating rights in undistributed earnings, which may cause diluted EPS to be more dilutive than the calculation using the treasury stock method. |
Cash and Cash Equivalents | Cash and Cash Equivalents 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 cash collateral advanced or received generally approximates or is greater than 102% of the fair value of the underlying securities borrowed or loaned. The Company monitors the fair value of securities borrowed and loaned, and delivers or obtains additional collateral as appropriate. Receivables and payables with the same counterparty are not offset in the consolidated statements of financial condition. Interest received or paid by the Company for these transactions is recorded gross on an accrual basis under interest and dividends income or interest and dividends expense in the consolidated statements of comprehensive income. |
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase | Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase In a repurchase agreement, securities sold under agreements to repurchase are treated as collateralized financing transactions and are recorded at contract value, plus accrued interest, which approximates fair value. It is the Company's policy that its custodian 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. Interest received or paid by the Company for these transactions is recorded gross on an accrual basis under interest and dividends income or interest and dividends expense in the consolidated statements of comprehensive income. |
Receivables from/Payables to Broker-dealers and Clearing Organizations | Receivables from/Payables to Broker-dealers and Clearing Organizations 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, 2016 and 2015, 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 by counterparty basis 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 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 records financial instruments owned, including those pledged as collateral, and financial instruments sold, not yet purchased at fair value. Gains and losses arising from financial instrument transactions are recorded net on a trade-date basis in trading income, net, in the consolidated statements of comprehensive income. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as 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. The Company categorizes its financial instruments into a three level hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy level assigned to each financial instrument is based on the assessment of the transparency and reliability of the inputs used in the valuation of such financial instruments at the measurement date based on the lowest level of input that is significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories based on inputs: Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 — Quoted prices in markets that are not active and financial instruments for which all significant inputs are observable, either directly or indirectly; Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Transfers in or out of levels are recognized based on the beginning fair value of the period in which they occurred. |
Fair Value Option | Fair Value Option The fair value option election that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are recorded in other revenues (losses) in the consolidated statements of comprehensive income. The decision to elect the fair value option is determined on an instrument by instrument basis and must be applied to an entire instrument and is irrevocable once elected. |
Derivative Instruments | Derivative Instruments Derivative instruments used for trading purposes, including economic hedges of trading instruments, which are carried at fair value include futures, forward contracts, and options. Unrealized gains or losses on these derivative instruments are recognized currently within trading income, net in the consolidated statement of comprehensive income. Fair values for exchange-traded derivatives, principally futures, are based on quoted market prices. Fair values for over-the-counter derivative instruments, principally forward contracts, are based on the values of the underlying financial instruments within the contract. The underlying instruments are currencies which are actively traded. The Company presents its derivatives balances on a net-by-counterparty basis when the criteria for offsetting are met. |
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. Furniture, fixtures, and equipment are depreciated over three to seven years. Leasehold improvements are amortized over the lesser of the length of the lease term or seven years. |
Capitalized Software | Capitalized Software The Company capitalizes costs of materials, consultants, and payroll and payroll related costs for employees incurred in developing internal-use software. Costs incurred during the preliminary project and post-implementation stages are charged to expense. Management’s judgment is required in determining the point at which various projects enter the stages at which costs may be capitalized, in assessing the ongoing value of the capitalized costs, and in determining the estimated useful lives over which the costs are amortized. Capitalized software development costs and related accumulated amortization are included in property, equipment and capitalized software in the accompanying consolidated statements of financial condition and are amortized over a period of 1.4 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 the Company’s 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 the Company’s only reporting unit. 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, 2016, 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 Company’s management believes to be an appropriate indicator of its fair value. Based on the results of the annual impairment tests performed, no goodwill impairment was recognized during the years ended December 31, 2016, 2015, and 2014, 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. Exchange stock includes shares that entitle the Company to certain trading privileges. The shares are marked to market with the corresponding gain or loss recorded under operating and administrative in the consolidated statements of comprehensive income. The Company’s exchange memberships and stock are included in other assets in 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 technology licensing fees and agency commission fees. Technology licensing fees are earned from third parties for licensing of the Company’s proprietary risk management and trading infrastructure technology and 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. Agency commission fees are earned from agency trades executed by the Company on behalf of third parties and recognized on a trade date basis. |
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 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, 2016 and 2015 or the results of operations or cash flows for the years ended December 31, 2016, 2015, and 2014. |
Comprehensive Income and Foreign Currency Translation | Comprehensive Income and Foreign Currency Translation Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). 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 revenue and expenses are translated at weighted average exchange rates for the period. Gains and losses resulting from translating foreign currency financial statements, net of related tax effects, are reflected in accumulated other comprehensive income, a separate component of stockholders’ equity. |
Share-Based Compensation | Share-Based Compensation The fair value of awards issued for compensation prior to the Reorganization Transactions and the IPO was determined by management, with the assistance of an independent third party valuation firm, using a projected annual forfeiture rate, where applicable, on the date of grant. Share-based awards issued for compensation in connection with or subsequent to the Reorganization 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 is 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 Accounting Standard Update (“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. In December 2016, FASB issued ASU 2016-20 Technical Correction and Improvement (Topic 606): Revenue from Contracts with Customers , which amends the guidance in ASU 2014-09. The effective date and transition requirements for the ASU are the same as ASU 2014-09. The Company is currently evaluating the potential effects of adoption of ASU 2014-09, ASU 2015-14, and ASU 2016-20 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 requires 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 is effective in the first annual period ending after December 15, 2016. The Company adopted this ASU effective as of December 31, 2016, and it did not have an impact on the Company’s consolidated financial statements. Financial Assets and Liabilities — In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The update intends to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The new standard affects all entities that hold financial assets or owe financial liabilities and is effective for annual reporting periods (including interim periods) beginning after December 15, 2017. Early adoption of the ASU is not permitted, e xcept for the amendments relating to the presentation of the change in the instrument-specific credit risk relating to a liability that an entity has elected to measure at fair value . The Company is currently evaluating the potential effects of the adoption of ASU 2016-01 on its 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. Compensation – Stock Compensation — In March 2016, FASB issued ASU 2016-09, Employee Share-Based Payment Accounting Improvements . The ASU makes a number of changes to accounting for share based payment programs, including the following principal changes: providing that all excess tax benefits and tax deficiencies arising from share-based payment programs should be recognized as income tax expense or benefit in the income statement; allowing companies to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (as is provided under current GAAP) or account for forfeitures when they occur; and providing that partial cash settlement of an award for tax-withholding purposes would not result, by itself, in liability classification of the award provided the amount withheld does not exceed the maximum statutory tax rate (as opposed to the current requirement which specifies the minimum statutory tax rate) for an employee in the applicable jurisdictions. The ASU also provides guidance on the classification of various items related to share based payment programs in the statement of cash flows. The ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and an entity that elects early adoption must adopt all of the amendments in the same period. The Company has elected to early adopt this ASU effective as of December 31, 2016 and it did not have a material impact on the Company’s consolidated financial statements. Statement of Cash Flows – In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The ASU intended to reduce diversity in practice how certain transactions are classified in the statement of cash flows by mandating classification of certain activities. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The Company is currently evaluating the potential effects of adoption of ASU 2016-15 on the Company’s consolidated financial statements. Income Taxes – In October 2016, FASB issued ASU 2016-16, Income Taxes (Topic 749): Intra-Entity Transfers of Assets Other Than Inventory . The ASU requires the reporting entity to recognize the tax expense from the sale of an asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of the transactions are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The ASU is effective for annual periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the potential effects of adoption of ASU 2016-16 on the Company’s consolidated financial statements. Goodwill - In January, 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment . To simplify the subsequent measurement of goodwill, the Company’s board of directors eliminated Step 2 from the goodwill impairment test. (In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company’s board of directors also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The ASU is effective for public entities in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the potential effects of adoption of ASU 2017-04 on the Company’s consolidated financial statements. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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) 2016 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 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) 2016 2015 Basic earnings per share: Net income available for common stockholders $ $ Less: Dividends and undistributed earnings allocated to participating securities — Net income available for common stockholders, net of dividends and undistributed earnings allocated to participating securities 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) 2016 2015 Diluted earnings per share: Net income available for common stockholders, net of dividends and undistributed earnings allocated to participating securities $ $ Weighted average shares of common stock outstanding: Class A Issued and outstanding Issuable pursuant to 2015 Management Incentive Plan(1) — Diluted Earnings per share $ $ The dilutive impact of unexercised stock options excludes from the computation of EPS 743,096 and 0 options for the years ended December 31, 2016 and 2015, respectively, because inclusion of the options would have been anti-dilutive. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets | |
Schedule of acquired intangible assets | As of December 31, 2016 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, 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 $ $ $ |
Receivables from_Payables to 30
Receivables from/Payables to Broker-Dealers and Clearing Organizations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables from/Payables to Broker-Dealers and Clearing Organizations | |
Summary of receivables from and payables to brokers-dealers and clearing organizations | (in thousands) 2016 2015 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, 2016 | |
Collateralized Transactions | |
Summary of the fair value of collateralized transactions | (in thousands) 2016 2015 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 | (in thousands) 2016 2015 Equities $ $ Exchange traded notes $ $ |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Outstanding borrowings and financing capacity or unused available capacity under the Company’s borrowing arrangements | At December 31, 2016 At December 31, 2015 Financing Borrowing Financing Borrowing (in thousands) Available Outstanding Available Outstanding Broker-dealer credit facilities: Uncommitted facility $ $ $ $ Committed facility — — $ $ $ $ Short-Term Credit Facilities: Short-term credit facilities (1) $ $ $ $ $ $ $ $ (1) Outstanding borrowings were included with receivable from broker-dealers and clearing organization within the consolidated statements of financial condition. At December 31, 2016 At December 31, 2015 Maturity Unused Available Borrowing Unused Available Borrowing (in thousands) Date Capacity Outstanding Capacity Outstanding Long-term borrowings: Senior secured credit facility October 2022 $ n/a $ $ n/a $ Revolving credit facility April 2018 — — SBI bonds January 2020 n/a n/a — $ $ $ $ |
Senior Secured Credit Facility | |
Schedule of aggregate future required principal payments based on terms of loan | (in thousands) 2017 $ 2018 2019 2020 and thereafter Total principal of long-term borrowings $ |
Schedule of reconciliation of the senior secured credit facility | December 31, (in thousands) 2016 2015 Senior secured credit facility outstanding principal $ $ SBI Bonds outstanding principal — Net deferred financing fees Net discount on senior secured credit facility Long-term borrowings $ $ |
Financial Assets and Liabilit33
Financial Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016: December 31, 2016 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 $ $ $ — $ — $ Non-U.S. government obligations — — — Exchange traded notes — — — Currency forwards — — Options — — — $ $ $ — $ $ Financial instruments owned, pledged as collateral: Equity securities $ $ — $ — $ — $ Exchange traded notes — — — $ $ — $ — $ — $ Other Assets Equity investment $ — $ — $ $ — $ Exchange stock — — — $ $ — $ $ — $ Liabilities Financial instruments sold, not yet purchased, at fair value: Equity securities $ $ $ — $ — $ Exchange traded notes — — — Currency forwards — — — Options — — — $ $ $ — $ $ Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2015: December 31, 2015 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 — — — 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 — — — Currency forwards — — — Options — — — Interest rate swaps — — — $ $ $ — $ $ |
Summary of changes in Level 3 financial instruments measured at fair value on a recurring basis | Year Ended December 31, 2016 Change in Net Unrealized Gains / (Losses) on Investments Balance at Total Realized Net Transfers Balance at still held at December 31, and Unrealized into (out of) December 31, December 31, (in thousands) 2015 Purchases Gains / (Losses) Level 3 2016 2016 Assets Other assets: Equity investment $ - $ $ $ $ $ Total $ - $ $ $ $ $ |
Summary of netting of certain financial assets and financial liabilities | December 31, 2016 Net Amounts of Gross Amounts Assets Presented Offset in the in the Gross Amounts Not Offset In the 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 $ $ — $ $ $ $ Trading assets, at fair value: Currency forwards — — Options — Total $ $ $ $ $ $ Net Amounts of Gross Amounts Liabilities Presented Offset in the in the Gross Amounts Not Offset In the Gross Amounts Consolidated Consolidated Statement of Financial Condition of Recognized Statement of Statement of Financial Cash Collateral Liabilities Financial Condition Financial Condition Instruments Pledged Net Amount Offsetting of Financial Liabilities: Securities loaned $ $ — $ $ $ — $ Trading liabilities, at fair value: Currency forwards — — — — Options — — — Total $ $ $ $ $ — $ December 31, 2015 Net Amounts of Gross Amounts Assets Presented Offset in the in the Gross Amounts Not Offset In the 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 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 $ $ — $ $ $ — $ 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, 2016 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, 2016 | |
Derivative Instruments | |
Schedule of fair value of derivative instruments on a gross basis | (in thousands) December 31, 2016 December 31, 2015 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 Fixed income 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 net gain from derivative instruments not designated as hedging instruments | December 31, (in thousands) 2016 2015 2014 Futures $ $ $ Currency forwards Options Interest rate swaps $ $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Summary of income before income taxes | For the years ended December 31, 2016 2015 2014 (in thousands) U.S. operations $ $ $ Non-U.S. operations $ $ $ |
Summary of provision for income taxes | For the years ended December 31, (in thousands) 2016 2015 2014 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, 2016 2015 2014 (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) 2016 2015 Deferred income tax assets Tax Receivable Agreement $ $ Share-based compensation Fixed assets and other Total deferred income tax assets $ $ Deferred income tax liabilities Fixed assets Total deferred income tax liabilities $ $ |
Commitments, Contingencies an36
Commitments, Contingencies and Guarantees (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments, Contingencies and Guarantees | |
Schedule of minimum rental commitments under non-cancellable leases | Minimum Rental Commitments Year Ending December 31 Capital Operating 2017 2018 2019 2020 — 2021 — Thereafter — Total minimum lease payments $ $ |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Class A-2 profits interests | |
Schedule of activity | Weighted Weighted Average Number of Average Fair Remaining Interests Value Life 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 | 2015 2014 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 $ — $ — Granted — — — — — Exercised — — — — — Forfeited or expired — — — — At December 31, 2016 $ $ |
Schedule of weighted-average assumptions used in estimating the grant date fair values | 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 $ Granted Forfeited Vested At December 31, 2016 $ |
Property, Equipment and Capit38
Property, Equipment and Capitalized Software (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Equipment and Capitalized Software | |
Schedule of property, equipment and capitalized software | (in thousands) 2016 2015 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, 2016 | |
Geographic Information | |
Schedule of total revenues by geographic area | For the Years Ended December 31, (in thousands) 2016 2015 2014 Revenues: United States $ $ $ Australia Ireland Singapore China — Total revenues $ $ $ |
Parent Company (Tables)
Parent Company (Tables) - Virtu Financial, Inc. | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Statements of Financial Condition | As of December 31, (In thousands except interest data) 2016 2015 Assets Cash $ $ Deferred tax asset Investment in subsidiary Receivable from subsidiaries — Other assets 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 $ $ Stockholders' equity Class A common stock (par value $0.00001), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 40,436,580 and 38,379,858 shares, Outstanding — 39,983,514 and 38,210,209 shares at December 31, 2016 and 2015, respectively — — Class B common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 0 and 0 shares at December 31, 2016 and 2015, respectively — — Class C common stock (par value $0.00001), Authorized — 90,000,000 and 90,000,000 shares, Issued — 19,810,707 and 20,976,598 shares, Outstanding — 19,810,707 and 20,976,598, at December 31, 2016 and 2015, respectively — — Class D common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 79,610,490 and 79,610,490 shares at December 31, 2016 and 2015, respectively Treasury stock, at cost, 453,066 and 169,649 shares at December 31, 2016 and 2015, respectively Additional paid-in capital (Accumulated deficit) Retained earnings Accumulated other comprehensive (loss) income Total stockholders' equity $ $ Total liabilities and stockholders' equity $ $ |
Condensed Statements of Comprehensive Income | For the Years Ended December 31, (in thousands) 2016 2015 2014 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) 2016 2015 2014 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 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 — Dividends — 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 — — Payments on repurchase of non-voting common interest Repurchase of Class C common stock — — Purchase of treasury stock — Issuance of common stock, net of offering costs — — Repurchase of Virtu Financial Units and — — Issuance of common stock in connection with secondary offering, net of offering costs — Repurchase of Virtu Financial Units and corresponding number of Class 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 offerings described in Note 13 - - Temasek transaction described in Note 13 - - - Repurchase of Class A-2 interests - - |
Organization and Basis of Pre41
Organization and Basis of Presentation (Details) | 12 Months Ended |
Dec. 31, 2016segmentitem | |
Number of businesses Company is managed and operated as | item | 1 |
Number of reportable segments | segment | 1 |
Virtu Financial | |
Ownership interest (as a percent) | 29.60% |
Summary of Significant Accoun42
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property and Equipment and Capitalized Software | |||
Capitalized software development costs, excluding charges recognized in relation to the IPO | $ 11,100 | $ 10,100 | $ 9,800 |
Amortization expense for capitalized software, excluding charges recognized in relation to the IPO | $ 10,100 | 9,600 | $ 10,400 |
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% | ||
Class B interests | |||
Property and Equipment and Capitalized Software | |||
Capitalized software development costs recognized upon the IPO | $ 90 | 9,200 | |
Class B interests | East MIP | |||
Property and Equipment and Capitalized Software | |||
Amortization expense for capitalized software recognized upon the IPO | $ 700 | $ 8,500 | |
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 Accoun43
Summary of Significant Accounting Policies - Goodwill, Income Taxes and VIE (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
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, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of net income before minority interest to net income available for common stockholders | |||||
Income before income taxes and non-controlling interest | $ 179,591 | $ 215,929 | $ 193,558 | ||
Provision for income taxes | 21,251 | 18,439 | 3,501 | ||
Net income | $ 83,147 | $ 114,343 | 158,340 | 197,490 | $ 190,057 |
Noncontrolling interest | $ (93,456) | (125,360) | (176,603) | ||
Net income available for common stockholders | $ 32,980 | $ 20,887 | |||
Virtu Financial | |||||
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) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Basic earnings per share | ||
Net income available for common stockholders | $ 32,980 | $ 20,887 |
Less: Dividends and undistributed earnings allocated to participating securities | (809) | |
Net income available for common stockholders, net of dividends and undistributed earnings allocated to participating securities | $ 32,171 | $ 20,887 |
Weighted average shares of common stock outstanding | ||
Outstanding | 38,539,091 | 34,964,312 |
Basic Earnings per share | $ 0.83 | $ 0.60 |
Class A | ||
Weighted average shares of common stock outstanding | ||
Outstanding | 38,539,091 | 34,964,312 |
Basic Earnings per share | $ 0.83 | $ 0.60 |
Earnings Per Share - Diluted (D
Earnings Per Share - Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Diluted earnings per share | ||
Net income available for common stockholders, net of dividends and undistributed earnings allocated to participating securities | $ 32,171 | $ 20,887 |
Weighted average shares of common stock outstanding | ||
Issued and outstanding | 38,539,091 | 34,964,312 |
Weighted average number of shares of common stock outstanding | 38,539,091 | 35,339,585 |
Diluted Earnings per share | $ 0.83 | $ 0.59 |
Anti-dilutive shares excluded from computation of EPS | 743,096 | 0 |
Class A | ||
Weighted average shares of common stock outstanding | ||
Issued and outstanding | 38,539,091 | 34,964,312 |
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) - USD ($) $ in Thousands | Apr. 15, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 |
Tax Receivable Agreements | ||||
Payment on applicable cash tax savings (as a percent) | 85.00% | |||
First payment due after filing of company's tax return | 120 days | |||
Deferred tax assets related to exchange of units | $ 210,100 | |||
Payments to Virtu Post-IPO Members and Investor Post-IPO Stockholders | 231,400 | |||
Minimum tax receivable agreement obligation over the agreed period | 700 | |||
Maximum tax receivable agreement obligation over the agreed period | $ 20,800 | |||
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. | $ 21,300 | |||
Deferred tax asset recorded in connection with a stock offering | $ 9,300 | |||
Amount of payment liability pursuant to tax receivable agreements | 7,600 | |||
Increase in additional paid-in capital related to tax receivable agreements | $ 1,700 | |||
Increase in deferred tax assets as a result of differences between the estimate and the tax returns | $ 4,200 | |||
Increase in payment liability | 5,400 | |||
Reduction to additional paid-in capital as a result of differences between estimate and tax returns | 1,200 | |||
Deferred tax assets | 185,600 | $ 187,000 | ||
Tax receivable agreement obligations | $ 231,404 | $ 218,399 |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets | |||
Changes in carrying amount of goodwill | $ 0 | $ 0 | $ 0 |
Goodwill impairment | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Acquired intangible assets | |||
Gross Carrying Amount | $ 111,900 | $ 111,900 | |
Accumulated Amortization | 110,908 | 110,697 | |
Net Carrying Amount | 992 | 1,203 | |
Amortization expense relating to finite-lived intangible assets | 211 | 211 | $ 211 |
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 | 454 | 349 | |
Net Carrying Amount | $ 496 | $ 601 | |
Useful Lives | 9 years | 9 years | |
ETF buyer relationships | |||
Acquired intangible assets | |||
Gross Carrying Amount | $ 950 | $ 950 | |
Accumulated Amortization | 454 | 348 | |
Net Carrying Amount | $ 496 | $ 602 | |
Useful Lives | 9 years | 9 years |
Receivables from_Payables to 50
Receivables from/Payables to Broker-Dealers and Clearing Organizations (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Due from prime brokers | $ 91,476 | $ 101,372 |
Deposits with clearing organizations | 21,995 | 31,908 |
Net equity with futures commission merchants | 213,030 | 174,615 |
Unsettled trades with clearing organization | 44,312 | 102,890 |
Securities failed to deliver | 77,915 | 65,751 |
Total receivables from broker-dealers and clearing organizations | 448,728 | 476,536 |
Liabilities | ||
Due to prime brokers | 227,335 | 294,691 |
Net equity with futures commission merchants | 38,838 | 46,537 |
Unsettled trades with clearing organization | 429,800 | 145,376 |
Securities failed to receive | 5 | |
Total payables to broker-dealers and clearing organizations | 695,978 | 486,604 |
Outstanding principal balance | $ 309,100 | $ 219,100 |
Collateralized Transactions (De
Collateralized Transactions (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financial instruments owned and pledged | ||
Financial instruments owned and pledged, where counterparty has right to repledge | $ 143,883 | $ 259,175 |
Securities received as collateral: | ||
Securities borrowed | 213,203 | 437,220 |
Securities purchased under agreements to resell | 14,985 | |
Total amounts related to collateralized transactions | 213,203 | 452,205 |
Equity securities | ||
Financial instruments owned and pledged | ||
Financial instruments owned and pledged, where counterparty has right to repledge | 128,202 | 232,731 |
Exchange traded notes | ||
Financial instruments owned and pledged | ||
Financial instruments owned and pledged, where counterparty has right to repledge | $ 15,681 | $ 26,444 |
Borrowings - Broker-Dealer Cred
Borrowings - Broker-Dealer Credit Facilities (Details) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Oct. 27, 2016USD ($) | Jul. 18, 2016USD ($)item | Apr. 15, 2015USD ($) | Nov. 08, 2013USD ($) | |
Long-Term Borrowings | |||||||
Borrowing Outstanding | $ 569,925 | ||||||
Borrowing Outstanding | $ 564,957 | $ 493,589 | |||||
Number of broker-dealer subsidiaries | item | 2 | ||||||
Interest expense | $ 28,327 | 29,254 | $ 30,894 | ||||
Broker-Dealer Credit Facilities | |||||||
Long-Term Borrowings | |||||||
Financing Available | 200,000 | 200,000 | |||||
Borrowing Outstanding | $ 25,000 | 45,000 | |||||
Number of secured credit facilities | item | 2 | ||||||
Broker-Dealer Credit Facility on an uncommitted basis | |||||||
Long-Term Borrowings | |||||||
Financing Available | $ 125,000 | 125,000 | |||||
Borrowing Outstanding | 25,000 | $ 45,000 | |||||
Maximum borrowing capacity | $ 125,000 | ||||||
Interest rate (as a percent) | 1.66% | 1.25% | |||||
Interest expense | $ 1,200 | $ 900 | 0 | ||||
Broker-Dealer Credit Facility on committed basis | |||||||
Long-Term Borrowings | |||||||
Financing Available | $ 75,000 | 75,000 | |||||
Number of broker-dealer subsidiaries | item | 1 | ||||||
Maximum borrowing capacity | $ 75,000 | ||||||
Credit facility term | 364 days | ||||||
Broker-Dealer Credit Facility on committed basis | LIBOR rate | |||||||
Long-Term Borrowings | |||||||
Interest rate margin (as a percent) | 1.25% | ||||||
Broker-Dealer Credit Facility on committed basis | Base rate | |||||||
Long-Term Borrowings | |||||||
Interest rate margin (as a percent) | 1.25% | ||||||
Short-Term Credit Facilities | |||||||
Long-Term Borrowings | |||||||
Financing Available | $ 493,000 | 478,000 | |||||
Borrowing Outstanding | 309,086 | 219,089 | |||||
Interest expense | 6,300 | 5,500 | $ 3,300 | ||||
Total Short-term credit facilities | |||||||
Long-Term Borrowings | |||||||
Financing Available | 493,000 | 478,000 | |||||
Borrowing Outstanding | 309,086 | 219,089 | |||||
Senior Secured Credit Facility | |||||||
Long-Term Borrowings | |||||||
Borrowing Outstanding | 540,000 | 499,800 | $ 510,000 | ||||
Borrowing Outstanding | 535,104 | 493,589 | |||||
Revolving credit facility | |||||||
Long-Term Borrowings | |||||||
Financing Available | 100,000 | 100,000 | |||||
Maximum borrowing capacity | $ 100,000 | $ 100,000 | |||||
Total Long-term borrowings | |||||||
Long-Term Borrowings | |||||||
Financing Available | 100,000 | 100,000 | |||||
Borrowing Outstanding | 564,957 | $ 493,589 | |||||
SBI Bonds | |||||||
Long-Term Borrowings | |||||||
Borrowing Outstanding | 29,925 | ||||||
Borrowing Outstanding | $ 29,853 |
Borrowings - Short-Term Credit
Borrowings - Short-Term Credit Facilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Short-Term Credit Facilities | |||
Interest expense | $ 28,327 | $ 29,254 | $ 30,894 |
Short-Term Credit Facilities | |||
Short-Term Credit Facilities | |||
Weighted average interest rate | 3.12% | 2.48% | |
Interest expense | $ 6,300 | $ 5,500 | $ 3,300 |
Borrowings - Long-Term Borrowin
Borrowings - Long-Term Borrowings (Details) ¥ in Billions | Oct. 27, 2016USD ($) | Apr. 15, 2015USD ($) | Nov. 08, 2013USD ($) | May 01, 2013USD ($) | Jul. 08, 2011USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016JPY (¥) | Dec. 31, 2016USD ($) | Oct. 31, 2016 | Jul. 25, 2016JPY (¥) | Jul. 25, 2016USD ($) |
Long-Term Borrowings | |||||||||||||
Discount | $ 1,350,000 | ||||||||||||
Outstanding principal amount | 569,925,000 | ||||||||||||
Interest expense | $ 28,327,000 | $ 29,254,000 | $ 30,894,000 | ||||||||||
Deferred financing fees | 4,713,000 | 4,012,000 | |||||||||||
Reconciliation of senior secured credit facility | |||||||||||||
Outstanding principal | 569,925,000 | ||||||||||||
Net deferred financing fees | (4,713,000) | (4,012,000) | |||||||||||
Discount | (1,350,000) | ||||||||||||
Long term borrowings | 493,589,000 | 564,957,000 | |||||||||||
Aggregate future required minimum principal payments based on the terms of loan | |||||||||||||
2,017 | 5,400,000 | ||||||||||||
2,018 | 5,400,000 | ||||||||||||
2,019 | 5,400,000 | ||||||||||||
2020 and thereafter | 553,725,000 | ||||||||||||
Total principal of long-term borrowings | 569,925,000 | ||||||||||||
Amortization expense related to the deferred financing fees | 5,579,000 | ||||||||||||
Senior Secured Credit Facility | |||||||||||||
Long-Term Borrowings | |||||||||||||
Face amount | $ 540,000,000 | $ 320,000,000 | |||||||||||
Discount (as a percent) | 0.25% | 2.00% | |||||||||||
Issued amount | $ 313,600,000 | ||||||||||||
Discount | $ 6,400,000 | 1,498,000 | 956,000 | ||||||||||
Percentage of the non-voting stock of the entity's domestic subsidiaries' direct foreign subsidiaries collateralized | 100.00% | 100.00% | |||||||||||
Percentage of the voting stock of the entity's domestic subsidiaries' direct foreign subsidiaries as collateral | 65.00% | 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 | 540,000,000 | ||||||||||
Reconciliation of senior secured credit facility | |||||||||||||
Outstanding principal | 510,000,000 | 499,800,000 | 540,000,000 | ||||||||||
Discount | $ (6,400,000) | (1,498,000) | (956,000) | ||||||||||
Long term borrowings | 493,589,000 | 535,104,000 | |||||||||||
Aggregate future required minimum principal payments based on the terms of loan | |||||||||||||
Total principal of long-term borrowings | $ 510,000,000 | $ 499,800,000 | 540,000,000 | ||||||||||
Senior Secured Credit Facility | First option | |||||||||||||
Long-Term Borrowings | |||||||||||||
Fixed interest rate base (as a percent) | 1.75% | ||||||||||||
Additional interest margin added to fixed and variable rates (as a percent) | 2.50% | ||||||||||||
Senior Secured Credit Facility | Second option | |||||||||||||
Long-Term Borrowings | |||||||||||||
Fixed interest rate base (as a percent) | 0.75% | ||||||||||||
Additional interest margin added to fixed and variable rates (as a percent) | 3.50% | ||||||||||||
Senior Secured Credit Facility | Prime rate | |||||||||||||
Long-Term Borrowings | |||||||||||||
Interest rate added to variable rate (as a percent) | 0.50% | ||||||||||||
Senior Secured Credit Facility | Eurodollar | |||||||||||||
Long-Term Borrowings | |||||||||||||
Interest rate added to variable rate (as a percent) | 1.00% | ||||||||||||
Revolving credit facility | |||||||||||||
Long-Term Borrowings | |||||||||||||
Maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | |||||||||||
Commitment fee (as a percent) | 0.50% | ||||||||||||
Revolving credit facility | First option | |||||||||||||
Long-Term Borrowings | |||||||||||||
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 | |||||||||||||
Long-Term Borrowings | |||||||||||||
Fixed interest rate base (as a percent) | 1.25% | ||||||||||||
Additional interest margin added to fixed and variable rates (as a percent) | 3.00% | ||||||||||||
Revolving credit facility | Federal funds effective rate | |||||||||||||
Long-Term Borrowings | |||||||||||||
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 | |||||||||||||
Long-Term Borrowings | |||||||||||||
Interest rate added to variable rate (as a percent) | 1.00% | ||||||||||||
SBI Bonds | |||||||||||||
Long-Term Borrowings | |||||||||||||
Outstanding principal amount | 29,925,000 | ||||||||||||
Reconciliation of senior secured credit facility | |||||||||||||
Outstanding principal | 29,925,000 | ||||||||||||
Long term borrowings | 29,853,000 | ||||||||||||
Aggregate future required minimum principal payments based on the terms of loan | |||||||||||||
Total principal of long-term borrowings | 29,925,000 | ||||||||||||
VFH Parent LLC | SBI Bonds | |||||||||||||
Long-Term Borrowings | |||||||||||||
Face amount | ¥ 3.5 | $ 33,100,000 | |||||||||||
Interest rate (as a percent) | 5.00% | 4.00% | 4.00% | ||||||||||
Loss due to change in currency rates | $ 3,200,000 | ||||||||||||
Outstanding principal amount | ¥ 3.5 | 29,900,000 | |||||||||||
Reconciliation of senior secured credit facility | |||||||||||||
Outstanding principal | 3.5 | 29,900,000 | |||||||||||
Aggregate future required minimum principal payments based on the terms of loan | |||||||||||||
Total principal of long-term borrowings | ¥ 3.5 | $ 29,900,000 |
Financial Assets and Liabilit55
Financial Assets and Liabilities - Measured on a Recurring Basis (Details) $ in Thousands | Jul. 27, 2016USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Fair value measurements measured on a recurring basis | |||
Transfers of financial assets between levels | $ 0 | $ 0 | |
Assets | |||
Financial instruments owned, at fair value | 1,683,999 | 1,038,039 | |
Financial instruments owned, pledged as collateral | 143,883 | 259,175 | |
Other assets | 36,480 | 5,984 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 1,349,155 | 979,090 | |
Equity method investment | |||
Payment for minority interest | 38,754 | ||
Transfer to Level 3 | $ 400 | ||
Percent interest transferred to Level 3 | 0.50% | ||
SBI | |||
Equity method investment | |||
Ownership interest (as a percent) | 29.40% | ||
Payment for minority interest | $ 38,800 | ||
Discount rate applied to cash flow forecasts to determine initial fair value of equity method investment. | 15.90% | ||
Market approach average price/earnings multiples of comparable companies to corroborate the income approach | item | 19 | ||
Equity securities | |||
Assets | |||
Financial instruments owned, pledged as collateral | 128,202 | 232,731 | |
Exchange traded notes | |||
Assets | |||
Financial instruments owned, pledged as collateral | 15,681 | 26,444 | |
Fair value measurements measured on a recurring basis | |||
Assets | |||
Financial instruments owned, at fair value, counterparty and cash collateral netting | (1,140,239) | (785,855) | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value, counterparty and cash collateral netting | (1,009,038) | (746,014) | |
Fair value measurements measured on a recurring basis | Currency forwards | |||
Assets | |||
Financial instruments owned, at fair value, counterparty and cash collateral netting | (1,140,239) | (785,855) | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value, counterparty and cash collateral netting | (1,009,038) | ||
Fair value measurements measured on a recurring basis | Options | |||
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value, counterparty and cash collateral netting | (746,014) | ||
Fair value measurements measured on a recurring basis | Total Fair Value | |||
Assets | |||
Financial instruments owned, at fair value | 1,683,999 | 1,038,039 | |
Financial instruments owned, pledged as collateral | 143,883 | 259,175 | |
Other assets | 36,480 | 5,984 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 1,349,155 | 979,090 | |
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 | 163 | ||
Fair value measurements measured on a recurring basis | Total Fair Value | Currency forwards | |||
Assets | |||
Financial instruments owned, at fair value | 7,022 | 9,580 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 319 | ||
Fair value measurements measured on a recurring basis | Total Fair Value | Options | |||
Assets | |||
Financial instruments owned, at fair value | 141 | 168 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 80 | ||
Fair value measurements measured on a recurring basis | Total Fair Value | Equity securities | |||
Assets | |||
Financial instruments owned, at fair value | 1,629,037 | 948,091 | |
Financial instruments owned, pledged as collateral | 128,202 | 232,731 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 1,330,331 | 936,851 | |
Fair value measurements measured on a recurring basis | Total Fair Value | US and non-US government obligations | |||
Assets | |||
Financial instruments owned, at fair value | 10,765 | 10,513 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 3,996 | ||
Fair value measurements measured on a recurring basis | Total Fair Value | Exchange traded notes | |||
Assets | |||
Financial instruments owned, at fair value | 37,034 | 69,376 | |
Financial instruments owned, pledged as collateral | 15,681 | 26,444 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 18,744 | ||
Fair value measurements measured on a recurring basis | Total Fair Value | Exchange stock | |||
Assets | |||
Other assets | 449 | 5,984 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 37,761 | ||
Fair value measurements measured on a recurring basis | Total Fair Value | Equity investment | |||
Assets | |||
Other assets | 36,031 | ||
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 | 1,634,083 | 985,224 | |
Financial instruments owned, pledged as collateral | 143,883 | 259,175 | |
Other assets | 449 | 5,984 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 1,342,437 | 976,828 | |
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 | 1,597,049 | 915,848 | |
Financial instruments owned, pledged as collateral | 128,202 | 232,731 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 1,323,693 | 935,071 | |
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 | ||
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 | 37,034 | 69,376 | |
Financial instruments owned, pledged as collateral | 15,681 | 26,444 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 18,744 | ||
Fair value measurements measured on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Exchange stock | |||
Assets | |||
Other assets | 449 | 5,984 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 37,761 | ||
Fair value measurements measured on a recurring basis | Significant Other Observable Inputs (Level 2) | |||
Assets | |||
Financial instruments owned, at fair value | 1,190,155 | 838,670 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 1,015,756 | 748,276 | |
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 | 163 | ||
Fair value measurements measured on a recurring basis | Significant Other Observable Inputs (Level 2) | Currency forwards | |||
Assets | |||
Financial instruments owned, at fair value | 1,147,261 | 795,435 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 1,009,038 | 319 | |
Fair value measurements measured on a recurring basis | Significant Other Observable Inputs (Level 2) | Options | |||
Assets | |||
Financial instruments owned, at fair value | 141 | 168 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 80 | 746,014 | |
Fair value measurements measured on a recurring basis | Significant Other Observable Inputs (Level 2) | Equity securities | |||
Assets | |||
Financial instruments owned, at fair value | 31,988 | 32,243 | |
Liabilities | |||
Financial instruments sold, not yet purchased, at fair value | 6,638 | 1,780 | |
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 | 10,765 | $ 10,513 | |
Fair value measurements measured on a recurring basis | Significant Unobservable Inputs (Level 3) | |||
Assets | |||
Other assets | 36,031 | ||
Fair value measurements measured on a recurring basis | Significant Unobservable Inputs (Level 3) | Equity investment | |||
Assets | |||
Other assets | 36,031 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Purchases | 38,754 | ||
Total Realized and Unrealized Gains / (Losses) | (3,117) | ||
Net Transfers into (out of) Level 3 | 394 | ||
Ending Balance | 36,031 | ||
Change in Net Unrealized Gains / (Losses) On Investments Held | $ (3,117) |
Financial Assets and Liabilit56
Financial Assets and Liabilities - Netting of Certain Financial Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Securities borrowed | ||
Gross Amounts of Recognized Assets | $ 220,005 | $ 453,296 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 220,005 | 453,296 |
Gross Amounts Not Offset in the Statement of Financial Condition | ||
Financial instruments | (216,778) | (443,659) |
Cash collateral received | (248) | (281) |
Net Amount | 2,979 | 9,356 |
Securities purchased under agreements to resell | ||
Gross Amounts of Recognized Assets | 14,981 | |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 14,981 | |
Gross Amounts Not Offset in the Statement of Financial Condition | ||
Financial instruments | (14,981) | |
Total | ||
Gross Amounts of Recognized Assets | 1,367,407 | 1,264,191 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | (1,140,239) | (785,855) |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 227,168 | 478,336 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (216,858) | (459,090) |
Cash collateral received | (261) | (281) |
Net Amount | 10,049 | 18,965 |
Currency forwards | ||
Trading assets, at fair value | ||
Gross Amounts of Recognized Assets | 1,147,261 | 795,435 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | (1,140,239) | (785,855) |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 7,022 | 9,580 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Net Amount | 7,022 | 9,580 |
Options | ||
Trading assets, at fair value | ||
Gross Amounts of Recognized Assets | 141 | 168 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 141 | 168 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (80) | (139) |
Cash collateral received | (13) | |
Net Amount | $ 48 | 29 |
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 Liabilit57
Financial Assets and Liabilities - Netting of Certain Financial Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Securities loaned | ||
Gross Amounts of Recognized Liabilities | $ 222,203 | $ 524,603 |
Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition | 222,203 | 524,603 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (221,792) | (521,407) |
Net Amount | 411 | 3,196 |
Total | ||
Gross Amounts of Recognized Liabilities | 1,231,321 | 1,271,099 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | (1,009,038) | (746,014) |
Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition | 222,283 | 525,085 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (221,872) | (521,857) |
Cash collateral received | (32) | |
Net Amount | 411 | 3,196 |
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 | 18,000 | (8,100) |
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 | (3,500) | (11,700) |
Currency forwards | ||
Trading liabilities, at fair value: | ||
Gross Amounts of Recognized Liabilities | 1,009,038 | 746,014 |
Gross Amounts Offset in the Consolidated Statement of Financial Condition | (1,009,038) | (746,014) |
Options | ||
Trading liabilities, at fair value: | ||
Gross Amounts of Recognized Liabilities | 80 | 163 |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 80 | 163 |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | $ (80) | (139) |
Cash collateral received | (24) | |
Interest rate swaps | ||
Trading liabilities, at fair value: | ||
Gross Amounts of Recognized Liabilities | 319 | |
Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition | 319 | |
Gross Amounts Not Offset in the Consolidated Statement of Financial Condition | ||
Financial instruments | (311) | |
Cash collateral received | $ (8) |
Financial Assets and Liabilit58
Financial Assets and Liabilities - Gross Obligations For Securities Lending Transactions (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Fair value measurements measured on a recurring basis | |
Remaining contractual maturity for securities lending transactions | $ 222,203 |
Overnight and Continuous | |
Fair value measurements measured on a recurring basis | |
Remaining contractual maturity for securities lending transactions | 222,203 |
Equity securities | |
Fair value measurements measured on a recurring basis | |
Remaining contractual maturity for securities lending transactions | 222,203 |
Equity securities | Overnight and Continuous | |
Fair value measurements measured on a recurring basis | |
Remaining contractual maturity for securities lending transactions | $ 222,203 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Equities futures | Receivables from broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | $ 2,403 | $ (1,017) |
Derivatives Assets, Notional | 1,461,286 | 617,398 |
Equities futures | Payables to broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Liabilities, Fair Value | (43) | 202 |
Derivatives Liabilities, Notional | 62,417 | 75,428 |
Commodity futures | Receivables from broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 13,964 | (8,431) |
Derivatives Assets, Notional | 3,918,778 | 18,635,531 |
Commodity futures | Payables to broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Liabilities, Fair Value | 2,842 | 585 |
Derivatives Liabilities, Notional | 22,616,170 | 25,932 |
Currency futures | Receivables from broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 1,591 | 1,358 |
Derivatives Assets, Notional | 3,264,093 | 3,059,575 |
Currency futures | Payables to broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Liabilities, Fair Value | (6,282) | (12,475) |
Derivatives Liabilities, Notional | 1,137,908 | 2,570,005 |
Options | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 141 | 168 |
Derivatives Liabilities, Fair Value | 80 | 163 |
Options | Receivables from broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 141 | 168 |
Derivatives Assets, Notional | 6,844 | 24,453 |
Options | Financial instruments sold, not yet purchased | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Liabilities, Fair Value | 80 | 163 |
Derivatives Liabilities, Notional | 4,486 | 25,336 |
Currency forwards | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 1,147,261 | 795,435 |
Derivatives Liabilities, Fair Value | 1,009,038 | 746,014 |
Currency forwards | Financial instruments owned | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 1,147,261 | 795,435 |
Derivatives Assets, Notional | 94,192,414 | 69,614,513 |
Currency forwards | Financial instruments sold, not yet purchased | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Liabilities, Fair Value | 1,009,038 | 746,014 |
Derivatives Liabilities, Notional | 85,874,684 | 71,019,047 |
Interest rate swaps | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 311 | |
Derivatives Liabilities, Fair Value | 319 | |
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 | |
Derivatives Liabilities, Notional | 82,010 | |
Treasury futures | Receivables from broker dealers and clearing organizations | ||
Fair value of derivative instruments on a gross basis | ||
Derivatives Assets, Fair Value | 31 | 30 |
Derivatives Assets, Notional | $ 5,730 | $ 232,473 |
Derivative Instruments - Gain F
Derivative Instruments - Gain From Derivative Instruments (Details) - Not designated as hedging instruments - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
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 | $ 561,125 | $ 1,162,272 | $ (112,018) |
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 | 559,626 | 1,180,483 | (78,234) |
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 | 1,915 | (16,431) | (32,785) |
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 | (410) | (1,784) | (987) |
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 | $ (6) | $ 4 | $ (12) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income (loss) before income taxes | |||
U.S. operations | $ 138,950 | $ 154,947 | $ 158,487 |
Non-U.S. operations | 40,641 | 60,982 | 35,071 |
Income before income taxes and non-controlling interest | 179,591 | 215,929 | 193,558 |
Current provision | |||
U.S. current provision | 2,690 | 7,584 | |
State and Local provision | 38 | 108 | |
Non-U.S. current provision | 5,210 | 6,762 | 4,263 |
Deferred benefit | |||
U.S. deferred provision (benefit) | 13,547 | 3,345 | |
State and Local provision (benefit) | 194 | 48 | |
Non-US deferred provision (benefit) | (428) | 592 | (762) |
Provision (benefit) for income taxes | $ 21,251 | $ 18,439 | $ 3,501 |
Reconciliation of tax provision | |||
Tax provision at the U.S. federal statutory rate (as a percent) | 35.00% | 35.00% | |
Less: rate attributable to noncontrolling interest | (24.40%) | (27.80%) | |
State, local and foreign taxes, net of federal benefit (as a percent) | 1.30% | 1.40% | 1.80% |
Provision for income taxes (as a percent) | 11.90% | 8.60% | 1.80% |
Deferred income tax assets | |||
Tax Receivable Agreement | $ 185,677 | $ 187,010 | |
Share-based compensation | 5,664 | 5,647 | |
Fixed assets and other | 2,518 | 1,083 | |
Total deferred income tax assets | 193,859 | 193,740 | |
Deferred income tax liabilities | |||
Fixed assets | 84 | 202 | |
Total deferred income tax liabilities | 84 | 202 | |
Unrecognized tax benefits | $ 0 | $ 0 |
Commitments, Contingencies an62
Commitments, Contingencies and Guarantees - Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Minimum Rental Commitments, Capital | |||
2,017 | $ 4,532 | ||
2,018 | 1,763 | ||
2,019 | 576 | ||
Total minimum lease payments | 6,871 | ||
Minimum Rental Commitments, Operating | |||
2,017 | 9,472 | ||
2,018 | 7,995 | ||
2,019 | 6,723 | ||
2,020 | 5,198 | ||
2,021 | 683 | ||
Thereafter | 3 | ||
Total minimum lease payments | 30,074 | ||
Operating lease expense, net of amortization expense related to landlord incentives | 2,400 | $ 5,300 | $ 3,500 |
Occupancy lease expense | 1,300 | 3,900 | 1,700 |
Communication equipment lease expense | $ 1,100 | $ 1,400 | $ 1,800 |
Commitments, Contingencies an63
Commitments, Contingencies and Guarantees - Employee Retention Plan and Litigation (Details) $ in Thousands, € in Millions | 12 Months Ended | 36 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jul. 08, 2014USD ($)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 | $ 0 | $ 0 | $ 2,639 | |||
Unfavorable regulatory action | ||||||
Litigation | ||||||
Amount of fine | € 5 | $ 5,400 | ||||
Accrual for estimated loss | € 5 | $ 5,400 |
Capital Structure (Details)
Capital Structure (Details) $ / shares in Units, $ in Thousands | Apr. 21, 2015USD ($)$ / sharesshares | Apr. 15, 2015shares | Sep. 30, 2016$ / sharesshares | Nov. 30, 2015employee$ / sharesshares | Dec. 31, 2016USD ($)Voteitem$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2016USD ($)Vote$ / sharesshares | Dec. 31, 2016Vote$ / sharesshares |
Number of classes of common stock | item | 4 | |||||||
Payments of dividends | $ | $ 37,759 | $ 17,362 | $ 20,000 | |||||
Distributions authorized prior to reorganization transactions | $ | $ 50,000 | |||||||
Virtu Financial | ||||||||
Ownership interest (as a percent) | 29.60% | 29.60% | 29.60% | |||||
Non-qualified stock options | 2015 Management Incentive Plan | ||||||||
Vesting period | 4 years | |||||||
Options outstanding (in shares) | 8,234,000 | 8,994,000 | 8,234,000 | 8,234,000 | ||||
Expiration period | 10 years | |||||||
Restricted stock units | 2015 Management Incentive Plan | ||||||||
Granted (in shares) | 1,019,148 | 984,466 | ||||||
Restricted stock units | 2015 Management Incentive Plan | Maximum | ||||||||
Vesting period | 4 years | |||||||
Class A | ||||||||
Number of shares of stock issued | 19,012,112 | 16,532,272 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||
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 | |||||||
Common stock shares issued | 40,436,580 | 38,379,858 | 40,436,580 | 40,436,580 | ||||
Common stock, outstanding | 39,983,514 | 38,210,209 | 39,983,514 | 39,983,514 | ||||
Number of non-executive employees the Company purchased common units from | employee | 1 | |||||||
Common stock offered for sale (in shares) | 1,103,668 | 397,534 | ||||||
Price of stock (in dollars per share) | $ / shares | $ 15.75 | |||||||
Commission deducted from the price at which shares were offered to the public (in dollars per share) | $ / shares | $ 0.10 | |||||||
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 | $ 0.00001 | |||||
Common stock shares issued | 40,436,580 | 38,379,858 | 40,436,580 | 40,436,580 | ||||
Common stock, outstanding | 39,983,514 | 38,210,209 | 39,983,514 | 39,983,514 | ||||
Payments of dividends | $ | $ 37,759 | $ 17,362 | ||||||
Class A | Silver Lake Post-IPO | ||||||||
Common stock offered for sale (in shares) | 6,075,837 | |||||||
Class A | Virtu Financial Inc And Silver Lake Partners | ||||||||
Common stock offered for sale (in shares) | 6,473,371 | |||||||
Price of stock (in dollars per share) | $ / shares | $ 22.15 | |||||||
Class B | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Common stock shares issued | 0 | 0 | 0 | 0 | ||||
Common stock, outstanding | 0 | 0 | 0 | 0 | ||||
Class B | Virtu Financial, Inc. | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||
Common stock shares issued | 0 | 0 | 0 | 0 | ||||
Common stock, outstanding | 0 | 0 | 0 | 0 | ||||
Class C | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Common stock shares issued | 19,810,707 | 20,976,598 | 19,810,707 | 19,810,707 | ||||
Common stock, outstanding | 19,810,707 | 20,976,598 | 19,810,707 | 19,810,707 | ||||
Class C | Virtu Financial, Inc. | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||
Common stock shares issued | 19,810,707 | 19,810,707 | 19,810,707 | |||||
Common stock, outstanding | 19,810,707 | 20,976,598 | 19,810,707 | 19,810,707 | ||||
Class D | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Common stock shares issued | 79,610,490 | 79,610,490 | 79,610,490 | 79,610,490 | ||||
Common stock, outstanding | 79,610,490 | 79,610,490 | 79,610,490 | 79,610,490 | ||||
Class D | Virtu Financial, Inc. | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||
Common stock shares issued | 79,610,490 | 79,610,490 | 79,610,490 | 79,610,490 | ||||
Common stock, outstanding | 79,610,490 | 79,610,490 | 79,610,490 | 79,610,490 | ||||
Class A common stock and Class C common stock | ||||||||
Number of votes provided to holders on all matters | Vote | 1 | 1 | 1 | |||||
Class B common stock and Class D common stock | ||||||||
Number of votes provided to holders on all matters | Vote | 10 | 10 | 10 |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 21, 2015 | Apr. 15, 2015 | Apr. 15, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 |
Share-based Compensation. | |||||||
Non-voting common interest units outstanding | 14,231,535 | 15,394,426 | 14,231,535 | ||||
Number of non-voting common interest units forfeited or repurchased | 1,162,891 | 57,106 | |||||
Class A | |||||||
Share-based Compensation. | |||||||
Expense recognized | $ 10,600 | $ 13,200 | |||||
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 | |||||
Weighted average risk free interest rate (as a percent) | 0.72% | 0.12% | |||||
Expected stock price volatility (as a percent) | 47.00% | 25.00% | |||||
Class A-2 profits interests | |||||||
Activity | |||||||
Outstanding (in shares) | 6,069,007 | ||||||
Granted (in shares) | 6,418 | ||||||
Repurchased (in shares) | (13,495) | ||||||
Outstanding (in shares) | 6,061,930 | 6,061,930 | 6,069,007 | ||||
Weighted Average Fair Value | |||||||
Outstanding (in dollars per share) | $ 6.82 | ||||||
Granted (in dollars per share) | $ 7.52 | ||||||
Forfeited (in dollars per share) | 7.17 | ||||||
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 | |||||
Weighted average remaining contractual life, granted | 3 years | ||||||
Non-voting common interest units (formerly Class B interests) | |||||||
Share-based Compensation. | |||||||
Expense recognized | $ 1,100 | $ 44,900 | |||||
Unrecognized share-based compensation expense | $ 800 | $ 2,100 | $ 800 | ||||
Weighted average period for compensation expense expected to be recognized | 1 year | 1 year 9 months 18 days | |||||
Capitalized software development costs | $ 90 | $ 9,200 | |||||
Non-voting common interest units (formerly Class B interests) | East MIP | |||||||
Share-based Compensation. | |||||||
Amortization expense related to share based compensation | 700 | 8,500 | |||||
Non-voting common interest units (formerly Class A 2 profits interests) | |||||||
Share-based Compensation. | |||||||
Expense recognized | 1,300 | 1,500 | $ 16,000 | ||||
Unrecognized share-based compensation expense | $ 800 | $ 2,500 | 800 | ||||
Weighted average period for compensation expense expected to be recognized | 9 months 18 days | 1 year 7 months 6 days | |||||
Non-voting common interest units (formerly Class A 2 profits interests) | Maximum | |||||||
Share-based Compensation. | |||||||
Vesting period | 4 years | ||||||
Non-qualified stock options | 2015 Management Incentive Plan | |||||||
Share-based Compensation. | |||||||
Vesting period | 4 years | ||||||
Expiration period | 10 years | ||||||
Expense recognized | $ 5,600 | $ 4,700 | |||||
Unrecognized share-based compensation expense | $ 14,200 | $ 22,400 | $ 14,200 | ||||
Weighted average period for compensation expense expected to be recognized | 2 years 3 months 18 days | 3 years 3 months 18 days | |||||
Forfeited or repurchased (in shares) | 760,000 | 234,000 | |||||
Outstanding (in shares) | 8,994,000 | ||||||
Granted (in shares) | 9,228,000 | ||||||
Forfeited or expired (in shares) | (760,000) | (234,000) | |||||
Outstanding (in shares) | 8,234,000 | 8,994,000 | 8,234,000 | ||||
Weighted Average Exercise Price Per Share | |||||||
Outstanding (in dollars per share) | $ 19 | ||||||
Granted (in dollars per share) | $ 19 | ||||||
Outstanding (in dollars per share) | $ 19 | $ 19 | $ 19 | ||||
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 | ||||||
Weighted Average Remaining Life, outstanding | |||||||
Weighted Average Remaining Life | 8 years 3 months 15 days | 9 years 3 months 15 days | |||||
Weighted average remaining contractual life, granted | 10 years | ||||||
Options Exercisable, Number of Options (in shares) | 2,058,500 | 2,058,500 | |||||
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 19 | $ 19 | |||||
Restricted stock units | |||||||
Share-based Compensation. | |||||||
Unrecognized share-based compensation expense | $ 28,500 | $ 20,900 | $ 28,500 | ||||
Weighted average period for compensation expense expected to be recognized | 2 years 7 months 6 days | 3 years | |||||
Restricted stock units | Class A | |||||||
Share-based Compensation. | |||||||
Expense recognized | $ 6,300 | $ 500 | |||||
Restricted stock units | 2015 Management Incentive Plan | |||||||
Activity | |||||||
Outstanding (in shares) | 984,466 | ||||||
Granted (in shares) | 1,019,148 | 984,466 | |||||
Forfeited (in shares) | (133,138) | ||||||
Vested (in shares) | (297,035) | ||||||
Outstanding (in shares) | 1,573,441 | 984,466 | 1,573,441 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||||||
Outstanding (in dollars per share) | $ 22.32 | ||||||
Granted (in dollars per share) | 16.06 | $ 22.32 | |||||
Forfeited (in dollars per share) | 22.51 | ||||||
Vested (in dollars per share) | 16.48 | ||||||
Outstanding (in dollars per share) | $ 18.28 | $ 22.32 | $ 18.28 | ||||
Restricted stock units | 2015 Management Incentive Plan | Maximum | |||||||
Share-based Compensation. | |||||||
Vesting period | 4 years |
Property, Equipment and Capit66
Property, Equipment and Capitalized Software (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Equipment and Capitalized Software | |||
Property, equipment and capitalized software, gross | $ 142,844 | $ 136,096 | |
Less: Accumulated depreciation and amortization | (113,184) | (98,595) | |
Total property, equipment and capitalized software, net | 29,660 | 37,501 | |
Depreciation expense | 19,600 | 24,000 | $ 20,000 |
Capitalized software costs | |||
Property, Equipment and Capitalized Software | |||
Property, equipment and capitalized software, gross | 77,591 | 66,573 | |
Leasehold improvements | |||
Property, Equipment and Capitalized Software | |||
Property, equipment and capitalized software, gross | 3,636 | 3,567 | |
Furniture, fixtures and equipment | |||
Property, Equipment and Capitalized Software | |||
Property, equipment and capitalized software, gross | 61,540 | 65,879 | |
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, 2016USD ($)item | Dec. 31, 2015USD ($) | |
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 | 74.5 | 64.2 |
Excess net capital over the required net capital | 73.5 | 63.2 |
Broker Dealer Subsidiary Two | ||
Regulatory Requirement | ||
Minimum net capital required to be maintained by broker-dealer subsidiaries | 1 | 1 |
Net capital | 10.8 | 8.5 |
Excess net capital over the required net capital | 9.8 | 7.5 |
VFCM | ||
Regulatory Requirement | ||
Minimum capital required to be maintained in connection with the operation of the Company's DMM business | 1.9 | $ 1.9 |
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, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Total revenues by geographic area | |||
Revenues | $ 702,272 | $ 796,213 | $ 723,053 |
United States | |||
Total revenues by geographic area | |||
Revenues | 455,418 | 537,310 | 509,105 |
Australia | |||
Total revenues by geographic area | |||
Revenues | 6 | 23 | 86 |
Ireland | |||
Total revenues by geographic area | |||
Revenues | 139,642 | 166,739 | 141,793 |
Singapore | |||
Total revenues by geographic area | |||
Revenues | 106,813 | 91,816 | $ 72,069 |
China | |||
Total revenues by geographic area | |||
Revenues | $ 393 | $ 325 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transactions | |||
Payable to affiliates | $ 200 | $ 200 | |
Non-qualified stock options | 2015 Management Incentive Plan | |||
Related Party Transactions | |||
Granted (in shares) | 9,228,000 | ||
Level 3 | |||
Related Party Transactions | |||
Payments for purchases | 2,400 | $ 4,300 | $ 2,000 |
Singtel | |||
Related Party Transactions | |||
Payments for purchases | 200 | 100 | 200 |
Son of Company's Founder and Executive Chairman | |||
Related Party Transactions | |||
Total compensation | 0 | $ 800 | 600 |
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 | 30 | $ 100 | $ 100 |
Affiliate Of Founder And Executive Chairman | |||
Related Party Transactions | |||
Sublease revenue | $ 40 | $ 100 |
Parent Company - Condensed Stat
Parent Company - Condensed Statements of Financial Condition (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 21, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets | |||||
Deferred tax asset | $ 193,859 | $ 193,740 | |||
Other assets | 74,470 | 38,845 | |||
Total assets | 3,692,390 | 3,391,930 | |||
Liabilities | |||||
Accounts payable and accrued expenses and other liabilities | 69,281 | 86,775 | |||
Tax receivable agreement obligations | 231,404 | 218,399 | |||
Total liabilities | 3,157,978 | 2,834,060 | |||
Stockholders' / Members' equity | |||||
Treasury stock, at cost, 453,066 and 169,649 shares at December 31, 2016 and 2015, respectively | (8,358) | (3,819) | |||
Additional paid-in capital | 155,536 | 130,902 | |||
(Accumulated deficit) Retained earnings | (1,254) | 3,525 | |||
Accumulated other comprehensuve (loss) income | (252) | 99 | |||
Total stockholders' equity | 145,673 | 130,708 | |||
Total liabilities and equity | $ 3,692,390 | $ 3,391,930 | |||
Treasury stock shares | 453,066 | 169,649 | |||
Virtu Financial, Inc. | |||||
Assets | |||||
Cash | $ 17,149 | $ 187 | $ 25,939 | $ 22 | |
Deferred tax asset | 192,961 | 193,153 | |||
Receivable from subsidiaries | 1,892 | 1 | |||
Investment in subsidiary | 165,204 | 157,887 | |||
Other assets | 15 | ||||
Total assets | 377,206 | 351,243 | |||
Liabilities | |||||
Payable to affiliates | 129 | ||||
Accounts payable and accrued expenses and other liabilities | 2,136 | ||||
Tax receivable agreement obligations | 231,404 | 218,399 | |||
Total liabilities | 231,533 | 220,535 | |||
Stockholders' / Members' equity | |||||
Treasury stock, at cost, 453,066 and 169,649 shares at December 31, 2016 and 2015, respectively | (8,358) | (3,819) | |||
Additional paid-in capital | 155,536 | 130,902 | |||
(Accumulated deficit) Retained earnings | (1,254) | 3,525 | |||
Accumulated other comprehensuve (loss) income | (252) | 99 | |||
Total stockholders' equity | 145,673 | 130,708 | |||
Total liabilities and equity | $ 377,206 | $ 351,243 | |||
Treasury stock shares | 453,066 | 169,649 | |||
Class A | |||||
Stockholders' / Members' equity | |||||
Common stock | |||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||
Common stock, authorized | 1,000,000,000 | 1,000,000,000 | |||
Common stock shares issued | 40,436,580 | 38,379,858 | |||
Common stock, outstanding | 39,983,514 | 38,210,209 | |||
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 | 1,000,000,000 | |||
Common stock shares issued | 40,436,580 | 38,379,858 | |||
Common stock, outstanding | 39,983,514 | 38,210,209 | |||
Class B | |||||
Stockholders' / Members' equity | |||||
Common stock | |||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||
Common stock, authorized | 175,000,000 | 175,000,000 | |||
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 | 175,000,000 | |||
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 | $ 0.00001 | |||
Common stock, authorized | 90,000,000 | 90,000,000 | |||
Common stock shares issued | 19,810,707 | 20,976,598 | |||
Common stock, outstanding | 19,810,707 | 20,976,598 | |||
Class C | Virtu Financial, Inc. | |||||
Stockholders' / Members' equity | |||||
Common stock, par value (in dollars per share) | $ 0.00001 | ||||
Common stock, authorized | 90,000,000 | 90,000,000 | |||
Common stock shares issued | 19,810,707 | ||||
Common stock, outstanding | 19,810,707 | 20,976,598 | |||
Class D | |||||
Stockholders' / Members' equity | |||||
Common stock | $ 1 | $ 1 | |||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||
Common stock, authorized | 175,000,000 | 175,000,000 | |||
Common stock shares issued | 79,610,490 | 79,610,490 | |||
Common stock, outstanding | 79,610,490 | 79,610,490 | |||
Class D | Virtu Financial, Inc. | |||||
Stockholders' / Members' equity | |||||
Common stock | $ 1 | $ 1 | |||
Common stock, par value (in dollars per share) | $ 0.00001 | ||||
Common stock, authorized | 175,000,000 | 175,000,000 | |||
Common stock shares issued | 79,610,490 | 79,610,490 | |||
Common stock, outstanding | 79,610,490 | 79,610,490 |
Parent Company - Condensed St71
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, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Expenses | |||||
Operations and administrative | $ 23,039 | $ 25,991 | $ 21,923 | ||
Net income | $ 83,147 | $ 114,343 | 158,340 | 197,490 | 190,057 |
Net income attributable to common stockholders | 32,980 | 20,887 | |||
Foreign currency translation adjustment, net of taxes | $ (4,633) | $ 378 | (1,165) | (4,255) | (5,032) |
Comprehensive income attributable to common stockholders | 32,629 | 20,986 | |||
Virtu Financial, Inc. | |||||
Revenues: | |||||
Service fee revenue | 445 | 13,492 | |||
Expenses | |||||
Operations and administrative | 198 | 447 | 13,492 | ||
Income (loss) before equity in income of subsidiary | (198) | (2) | |||
Equity in income of subsidiary, net of tax | 33,178 | 104,036 | 190,057 | ||
Net income | 32,980 | 104,034 | 190,057 | ||
Net income attributable to common stockholders | 32,980 | 20,887 | |||
Foreign currency translation adjustment, net of taxes | (351) | (4,534) | (5,032) | ||
Comprehensive income attributable to common stockholders | $ 32,629 | $ 16,353 | $ 185,025 |
Parent Company - Condensed St72
Parent Company - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 4 Months Ended | 9 Months Ended | 12 Months Ended | 20 Months Ended | ||
Apr. 15, 2015 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | |
Cash flows from operating activities | ||||||
Net income | $ 83,147 | $ 114,343 | $ 158,340 | $ 197,490 | $ 190,057 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Deferred taxes | 13,313 | 3,985 | ||||
Net cash provided by operating activities | 239,599 | 260,280 | 272,699 | |||
Cash flows from investing activities | ||||||
Cash flows used in investing activities | (59,017) | (24,299) | (36,159) | |||
Cash flows from financing activities | ||||||
Distribution to members | (130,000) | (140,652) | ||||
Distribution from Virtu Financial to non-controlling interest | (162,969) | (81,377) | ||||
Dividends | (37,759) | (17,362) | $ (20,000) | |||
Proceeds from issuance | 327,366 | |||||
Purchase of treasury stock | (4,539) | (3,819) | ||||
Repurchase of Virtu Financial Units and corresponding number of Class A and C Common Stock | (98) | (277,153) | ||||
Issuance of common stock, net of offering costs | 16,677 | 7,782 | ||||
Repurchase of Virtu Financial Units and corresponding number of Class A and C common stock in connection with secondary offering | (17,383) | (8,805) | ||||
Net cash used in financing activities | (161,237) | (144,355) | (221,654) | |||
Supplementary disclosure of cash flow information | ||||||
Tax receivable agreement described in Note 4 | 545 | (21,854) | ||||
Discount on issuance of senior secured credit facility | 1,350 | 1,350 | ||||
Taxes paid | 16,175 | 12,875 | 3,764 | |||
Virtu Financial, Inc. | ||||||
Cash flows from operating activities | ||||||
Net income | 32,980 | 104,034 | 190,057 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Equity in income of subsidiary, net of tax | 157,975 | (18,237) | (24,469) | |||
Deferred taxes | 13,197 | 3,392 | ||||
Changes in operating assets and liabilities | (4,012) | 5,900 | (14,056) | |||
Net cash provided by operating activities | 200,140 | 95,089 | 151,532 | |||
Cash flows from investing activities | ||||||
Investment in subsidiaries, equity basis | 24,893 | 64,624 | 15,953 | |||
Cash flows used in investing activities | 24,893 | 64,624 | 15,953 | |||
Cash flows from financing activities | ||||||
Distribution to members | (130,000) | (140,652) | ||||
Distribution from Virtu Financial to non-controlling interest | (162,969) | (81,377) | ||||
Proceeds from issuance | 327,366 | |||||
Purchase of treasury stock | (4,539) | (3,819) | ||||
Repurchase of Virtu Financial Units and corresponding number of Class A and C Common Stock | (277,153) | |||||
Issuance of common stock, net of offering costs | 16,677 | 7,782 | ||||
Repurchase of Virtu Financial Units and corresponding number of Class A and C common stock in connection with secondary offering | (17,383) | (8,805) | ||||
Net cash used in financing activities | (208,071) | (185,465) | (141,568) | |||
Net increase (decrease) in cash | 16,962 | (25,752) | 25,917 | |||
Cash, beginning of period | $ 25,939 | 187 | 25,939 | 22 | ||
Cash, end of period | $ 187 | 17,149 | 187 | 25,939 | 17,149 | |
Supplementary disclosure of cash flow information | ||||||
Tax receivable agreement described in Note 4 | (21,854) | |||||
Discount on issuance of senior secured credit facility | 1,350 | $ 1,350 | ||||
Taxes paid | 8,813 | 5,615 | ||||
Class A | Virtu Financial, Inc. | ||||||
Cash flows from financing activities | ||||||
Dividends | (37,759) | (17,362) | ||||
Class C | Virtu Financial, Inc. | ||||||
Cash flows from financing activities | ||||||
Repurchase of Virtu Financial Units and corresponding number of Class A and C Common Stock | (98) | |||||
Class A-2 | ||||||
Cash flows from financing activities | ||||||
Payments on repurchase of non-voting common interest | (2,000) | (2,097) | (916) | |||
Supplementary disclosure of cash flow information | ||||||
Repurchase of interests | (6,000) | |||||
Class A-2 | Virtu Financial, Inc. | ||||||
Cash flows from financing activities | ||||||
Payments on repurchase of non-voting common interest | $ (2,000) | $ (2,097) | (916) | |||
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 | |||||
Payments on repurchase of non-voting common interest | (3,048) | |||||
Class A-2 | Temasek Member | Virtu Financial, Inc. | ||||||
Cash flows from financing activities | ||||||
Proceeds from issuance | 3,048 | |||||
Payments on repurchase of non-voting common interest | $ (3,048) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 07, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 |
Subsequent events | ||||
Payments of dividends | $ 37,759 | $ 17,362 | $ 20,000 | |
Class A | Subsequent Events. | ||||
Subsequent events | ||||
Dividends declared (in dollars per share) | $ 0.24 |