21. Parent Company

VFI is the sole managing member of Virtu Financial, which guarantees the indebtedness of its direct subsidiary under the senior secured facility and senior secured second lien notes (Note 10 “Borrowings”). VFI is limited to its ability to receive distributions (including for purposes of paying corporate and other overhead expenses and dividends) from Virtu Financial under its Fourth Amended and Restated Credit Agreement and senior secured second lien notes. The following financial statements (the “Parent Company Only Financial Statements”) should be read in conjunction with the consolidated financial statements of the Company and the foregoing.

The condensed statements of financial condition as of December 31, 2017 and 2016 reflect the condensed 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,
	December 31,		December 31,
(In thousands except interest data)	2017		2016
Assets
Cash	$	60,193	$	17,149
Deferred tax asset		124,631		192,961
Investment in subsidiary		1,549,162		165,204
Other assets		10,731		1,892
Total assets	$	1,744,717	$	377,206

Liabilities, redeemable membership interest and equity
Liabilities
Payable to affiliate	$	767,101	$	129
Accounts payable and accrued expenses and other liabilities		7		—
Tax receivable agreement obligations		147,040		231,404
Total liabilities	$	914,148	$	231,533

Virtu Financial Inc. Stockholders' equity
Class A-1 — Authorized and Issued — 0 and 0 interests, Outstanding — 0 and 0 interests, at December 31, 2017 and 2016, respectively		—		—
Class A-2 — Authorized and Issued — 0 and 0 interests, Outstanding — 0 and 0 interests, at December 31, 2017 and 2016, respectively		—		—
Class A common stock (par value $0.00001), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 90,415,532 and 40,436,580 shares, Outstanding — 89,798,609 and 39,983,514 shares at December 31, 2017 and 2016, respectively		1		—
Class B common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 0 and 0 shares at December 31, 2017 and 2016, respectively		—		—
Class C common stock (par value $0.00001), Authorized — 90,000,000 and 90,000,000 shares, Issued — 17,880,239 and 19,810,707 shares, Outstanding — 17,880,239 and 19,810,707, at December 31, 2017 and 2016, respectively		—		—
Class D common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 79,610,490 and 79,610,490 shares at December 31, 2017 and 2016, respectively		1		1
Treasury stock, at cost, 616,923 and 453,066 shares at December 31, 2017 and 2016, respectively		(11,041)		(8,358)
Additional paid-in capital		900,746		155,536
Accumulated deficit		(62,129)		(1,254)
Accumulated other comprehensive income (loss)		2,991		(252)
Total Virtu Financial Inc. stockholders' equity	$	830,569	$	145,673

Total liabilities and stockholders' equity	$	1,744,717	$	377,206

Virtu Financial, Inc.

(Parent Company Only)

Condensed Statements of Comprehensive Income


	For the Years Ended
	December 31,
(in thousands)	2017		2016		2015
Revenues:
Service fee revenue	$	—	$	—	$	445
Other Income		86,599		—		—
		86,599		—		445

Operating Expenses:
Operations and administrative		181		198		447

Income (loss) before equity in income of subsidiary		86,418		(198)		(2)
Equity in income of subsidiary, net of tax		(83,479)		33,178		104,036
Net income	$	2,939	$	32,980	$	104,034
Net income attributable to common stockholders		2,939		32,980		20,887
Other comprehensive income (loss):
Foreign currency translation adjustment, net of taxes		3,243		(351)		(4,534)
Comprehensive income	$	6,182	$	32,629	$	16,353

Virtu Financial, Inc.

(Parent Company Only)

Condensed Statements of Cash Flows


	For the Years Ended
	December 31,
(in thousands)	2017		2016		2015
Cash flows from operating activities
Net income	$	2,939	$	32,980	$	104,034

Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of subsidiary, net of tax		(513,601)		157,975		(18,237)
Tax receivable agreement obligation reduction		(86,599)		—		—
Deferred taxes		102,973		13,197		3,392
Other		(8,500)		—		—
Changes in operating assets and liabilities:		(8,832)		(4,012)		5,900
Net cash provided by (used in) operating activities		(511,620)		200,140		95,089

Cash flows from investing activities
Acquisition of KCG Holdings, net of cash acquired, described in Note 3		(23,908)		—		—
Investments in subsidiaries, equity basis		16,846		24,893		64,624
Net cash provided by (used in) investing activities		(7,062)		24,893		64,624

Cash flows from financing activities
Distribution to members		—		—		(130,000)
Distribution from Virtu Financial to non-controlling interest		(89,563)		(162,969)		(81,377)
Dividends		(63,814)		(37,759)		(17,362)
Payments on repurchase of non-voting common interest		(11,143)		(2,000)		(2,097)
Repurchase of Class C common stock		—		(98)		—
Purchase of treasury stock		(2,683)		(4,539)		(3,819)
Tax receivable agreement obligations		(7,045)		—		—
Issuance of common stock, net of offering costs		735,974		—		327,366
Repurchase of Virtu Financial Units and corresponding number of Class A and C common stock in connections with IPO		—		—		(277,153)
Issuance of common stock in connection with secondary offering, net of offering costs		—		16,677		7,782
Repurchase of Virtu Financial Units and corresponding number of Class C common stock in connection with secondary offering		—		(17,383)		(8,805)
Net cash provided by (used in) financing activities	$	561,726	$	(208,071)	$	(185,465)

Net increase (decrease) in Cash	$	43,044	$	16,962	$	(25,752)
Cash, beginning of period		17,149		187		25,939
Cash, end of period	$	60,193	$	17,149	$	187

Supplemental disclosure of cash flow information:
Taxes paid	$	133	$	8,813	$	5,615

Non-cash financing activities
Tax receivable agreement described in Note 6		1,534		-		(21,854)
Secondary offerings described in Note 15		-		1,350		-