Business Segments

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Business segments

Business Segments

In the first quarter of 2013, the Company changed its reporting segments from four operating segments: (i) Market Making, (ii) Institutional Sales and Trading, (iii) Electronic Execution Services and (iv) Corporate and Other to three operating segments: (i) Market Making; (ii) Global Execution Services; and (iii) Corporate and Other. This change was made to reflect the Company's client offerings, changes in senior management, the combination of the institutional equities sales teams and how the businesses are managed.

The Market Making segment principally consists of market making in global equities and listed domestic options. Market Making primarily includes client, and to a lesser extent, non-client electronic market making and cash trading activities in which the Company operates as a market maker in equity securities. Market Making also includes the Company’s option market making business which trades on substantially all domestic electronic exchanges.

The Global Execution Services segment offers access via its electronic agency-based platforms to markets and self-directed trading in equities, options, fixed income, foreign exchange and futures. In contrast to the Market Making segment, the Global Execution Services segment generally does not act as a principal to transactions that are executed within this segment, however, it will commit capital on behalf of clients as needed, and generally earns commissions for acting as agent between the principals to the trade. Global Execution Services also includes equity sales and trading (including ETFs) and reverse mortgage origination and securitization. This segment also facilitates client orders through program, block, and riskless principal trades and provides capital markets services, including equity offerings as well as private placements. Additionally, the Global Execution Services segment includes the FCM business, which comprises certain assets and liabilities that the Company acquired or assumed from the futures division of Penson Financial Services, Inc. on June 1, 2012. This business provides execution and clearing services on major U.S. and European futures and options exchanges for clients.

The Corporate and Other segment invests in strategic financial services-oriented opportunities, allocates, deploys and monitors all capital, and maintains corporate overhead expenses and other expenses that are not attributable to the other segments. The Corporate and Other segment houses functions that support Knight’s other segments such as self-clearing services, including stock lending.

The Company’s revenues, income (loss) from continuing operations before income taxes (“Pre-tax earnings”) and total assets by segment are summarized in the following table (in thousands):

	Market Making		Global Execution Services		Corporate and Other			Consolidated Total
For the three months ended June 30, 2013:
Revenues	$	167,878	$	133,741	$	13,768		$	315,387
Pre-tax earnings	49,460		714		(71,952		)	(21,778		)
Total assets	3,568,889		5,738,023		2,017,295			11,324,207
For the three months ended June 30, 2012:
Revenues	$	113,490	$	118,876	$	19,728		$	252,094
Pre-tax earnings	5,933		6,341		(4,665		)	7,609
Total assets	1,779,364		4,033,626		2,924,453			8,737,443
For the six months ended June 30, 2013:
Revenues	$	318,607	$	255,261	$	25,822		$	599,690
Pre-tax earnings	86,010		11,989		(101,314		)	(3,315		)
Total assets	3,568,889		5,738,023		2,017,295			11,324,207
For the six months ended June 30, 2012:
Revenues	$	265,655	$	257,607	$	29,764		$	553,026
Pre-tax earnings	51,063		30,079		(22,543		)	58,599
Total assets	1,779,364		4,033,626		2,924,453			8,737,443

Total Assets do not include Assets within discontinued operations and Assets of business held for sale of $108.8 million and $457.5 million, respectively, at June, 2013 and 2012, respectively.