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Merger of GETCO and Knight (Tables)
 9 Months Ended
Sep. 30, 2013
Business Combinations [Abstract]  
Schedule of Business Acquisitions, by Acquisition
Amounts preliminarily allocated to intangible assets, the amortization period and goodwill were as follows (dollars in thousands):
 
 
 
 
Amortization
 
 
Amount
 
Years
Technology
 
$
110,000

 
 5 years
Customer relationships
 
35,000

 
 9 - 11 years
Trade names
 
4,000

 
 10 years
Trading rights
 
7,800

 
 7 years
Intangible assets
 
156,800

 
 
Goodwill
 
13,753

 
 
Total
 
$
170,553

 
 
The following table reflects the preliminary allocation of the purchase price to the assets acquired and liabilities assumed at the acquisition date (in thousands):
Identifiable Net Assets
 
 
 
 
Cash and cash equivalents
 
 
 
$
509,133

Cash and securities segregated under federal and other regulations
 
 
 
203,045

Financial instruments owned
 
 
 
1,937,929

Securities borrowed
 
 
 
1,158,981

Receivable from brokers, dealers and clearing organizations
 
 
 
1,366,974

Fixed assets and leasehold improvements, net
 
 
 
84,596

Investments
 
 
 
106,353

Intangible assets
 
 
 
156,800

Assets within discontinued operations
 
 
 
5,607,063

Other assets
 
 
 
211,735

Total Assets
 
 
 
$
11,342,609

 
 
 
 
 
Financial instruments sold, not yet purchased
 
 
 
$
1,512,983

Collateralized financings
 
 
 
1,166,211

Payable to brokers, dealers and clearing organizations
 
 
 
635,914

Payable to customers
 
 
 
527,918

Accrued compensation expense
 
 
 
107,409

Accrued expenses and other liabilities
 
 
 
139,624

Liabilities within discontinued operations
 
 
 
5,518,168

Long-term debt
 
 
 
375,000

Total Liabilities
 
 
 
$
9,983,227

 
 
 
 
 
Total identified assets acquired, net of assumed liabilities
 
 
 
1,359,382

 
 
 
 
 
Goodwill
 
 
 
13,753

 
 
 
 
 
Total Purchase Price
 
 
 
$
1,373,135
Business Acquisition, Pro Forma Information
Included in KCG results for the three months ended September 30, 2013 are results from the businesses acquired as a result of the Mergers as follows:
 
Three months ended September 30,
 
2013
Revenues
$
240,805

Income from continuing operations, before income taxes
21,164

 
 
Three months ended September 30, 2012
 
Nine months ended September 30, 2013
 
Nine months ended September 30, 2012
 
 
Reported
 
Pro Forma
 
Reported
 
Pro Forma
 
Reported
 
Pro Forma
 
 
(in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
130,602

 
$
(120,210
)
 
$
698,123

 
$
1,099,518

 
$
425,241

 
$
677,955

Net income from continuing operations
 
9,807

 
(303,413
)
 
138,316

 
(10,494
)
 
24,556

 
(274,981
)
Net income
 
9,807

 
(387,350
)
 
137,532

 
(39,554
)
 
24,556

 
(350,831
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share from continuing operations
 
$
0.21

 
$
(6.54
)
 
$
2.01

 
$
(0.15
)
 
$
0.49

 
$
(5.54
)
Diluted earnings (loss) per share
 
$
0.21

 
$
(8.35
)
 
$
2.00

 
$
(0.57
)
 
$
0.49

 
$
(7.07
)
The pro forma results are based on adding the pre-tax historical results of GETCO and Knight, and adjusting primarily for amortization of intangibles created in the Mergers, debt raised in conjunction with the Mergers and income taxes as if the Company was subject to U.S. corporate income taxes for all periods presented. The pro forma data assumes all GETCO units have been converted to KCG Class A Common Stock on January 1, 2012 and excludes any gain recognized on Knight Common Stock. The pro forma disclosures do not include adjustments to reflect the Company's operating costs or expected differences in the way funds generated by the Company are invested. The pro forma data is intended for informational purposes and is not indicative of the future results of operations.