The following management's discussion and analysis covers the years ended
December 31, 2021, 2020 and 2019 and should be read in conjunction with the
audited consolidated financial statements of Virtu Financial, Inc. (the
"Company"). This management's discussion and analysis contains forward-looking
statements that involve risks and uncertainties. Our actual results could differ
materially from those discussed below. Unless otherwise stated, all amounts are
presented in thousands of dollars.


Forward-looking statements

This Annual Report on Form 10-K contains forward-looking statements. You should
not place undue reliance on forward-looking statements because they are subject
to numerous uncertainties and factors relating to our operations and business
environment, all of which are difficult to predict and many of which are beyond
our control. Forward-looking statements include information concerning our
possible or assumed future results of operations, including descriptions of our
business strategy. These forward-looking statements can be identified by the use
of forward-looking terminology, including the terms "may," "will," "should,"
"believe," "expect," "anticipate," "intend," "plan," "estimate," "project" or,
in each case, their negative, or other variations or comparable terminology and
expressions. These statements are based on assumptions that we have made in
light of our experience in the industry as well as our perceptions of historical
trends, current conditions, expected future developments and other factors we
believe are appropriate under the circumstances. As you read and consider this
Annual Report on Form 10-K, you should understand that forward-looking
statements are not guarantees of performance or results and that our actual
results of operations, financial condition and liquidity, and the development of
the industry in which we operate, may differ materially from those made in or
suggested by the forward-looking statements contained in this Annual Report on
Form 10-K. By their nature, forward-looking statements involve known and unknown
risks and uncertainties, including those described under the heading "Risk
Factors" in this Annual Report on Form 10-K, because they relate to events and
depend on circumstances that may or may not occur in the future. Although we
believe that the forward-looking statements contained in this Annual Report on
Form 10-K are based on reasonable assumptions, you should be aware that many
factors, including those described under the heading "Risk Factors" in this
Annual Report on Form 10-K, could affect our actual financial results or results
of operations and cash flows, and could cause actual results to differ
materially from those in such forward-looking statements, including but not
limited to:

•the continuing impacts of COVID-19 and the governmental and other responses
thereto, including but not limited to the risk of employees and executives
contracting COVID-19 and the deployment of our business continuity plan pursuant
to which a significant number of our employees may work remotely and our return
to office plan, each of which may increase operational risk, as well as
increases in market, counterparty and other forms of operational risk;

•volatility of overall business activity levels;

•reliance on trade counterparties and clearing houses to fulfill their obligations to us;

•breakdowns of our personalized trading platform;

•risks inherent in electronic market making and trading in general;

•enhanced regulatory media scrutiny, including attention to electronic trading,
wholesale market making and off-exchange trading, payment for order flow, and
other market structure topics and both the impact of potential changes in
regulation or law which could have an adverse effect on our business as well as
the potential impact upon public perception of us or of companies in our
industry;
•increased competition in market making activities and execution services;

•dependency on continued access to sources of liquidity;

•risks associated with self-clearing and other operational elements of our business, including but limited to funding and liquidity risks;

•obligations to comply with applicable regulatory capital requirements;

• litigation or other legal and regulatory liabilities;

•changes in laws, rules or regulations, including proposed legislation that
would impose taxes on certain financial transactions in the European Union, the
U.S. (and certain states therein) and other jurisdictions and other potential
changes which could increase our corporate or other tax obligations in one or
more jurisdictions;

• obligations to comply with the laws and regulations applicable to our operations in the we and abroad;

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•need to maintain and continue to develop proprietary technologies;

•the effect of the Acquisition of KCG and the ITG Acquisition (as defined below)
on ongoing business operations generally, including the assumption of potential
liabilities and risks relating to these historical acquisitions;

• capacity constraints, system failures and delays;

•dependency on third-party infrastructure or systems;

•use of open source software;

•failure to protect or enforce our intellectual property rights in our proprietary technology;

•failure to protect confidential and proprietary information;

•failure to protect our systems from internal or external cyber threats that
could result in damage to our computer systems, business interruption, loss of
data, monetary payment demands or other consequences;

•risks associated with international operations and expansion, including failed acquisitions or divestitures;

•the effects of and changes in economic conditions (such as volatility in the
financial markets, inflation, monetary conditions and foreign currency and
exchange rate fluctuations, foreign currency controls and/or government mandated
pricing controls, as well as in trade, monetary, fiscal and tax policies in
international markets), political conditions (such as military actions and
terrorist activities), and other global events such as fires, natural disasters,
pandemics or extreme weather;

•risks related to potential growth and associated securities transactions;

• inability to access or delay in accessing capital markets to sell shares or raise additional capital;

•loss of key executives and inability to recruit and retain qualified personnel; and

•the risks associated with the loss of access to a major stock exchange or other trading venue.

Our forward-looking statements made herein are made only as of the date of this
Annual Report on Form 10-K. We expressly disclaim any intent, obligation or
undertaking to update or revise any forward-looking statements made herein to
reflect any change in our expectations with regard thereto or any change in
events, conditions or circumstances on which any such statements are based. All
subsequent written and oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained in this Annual Report on Form 10-K.

Unless the context otherwise requires, the terms "we," "us," "our," "Virtu" and
the "Company" refer to Virtu Financial, Inc., a Delaware corporation, and its
consolidated subsidiaries and the term "Virtu Financial" refers to Virtu
Financial LLC, a Delaware limited liability company and a consolidated
subsidiary of ours.

Basis of preparation

Our consolidated financial statements for the years ended December 31, 2021 and
2020 reflect our operations and those of our consolidated subsidiaries. As
discussed in Note 1 "Organization and Basis of Presentation" and in Note 3 "ITG
Acquisition" of Part II Item 8 "Financial Statements and Supplementary Data" of
this Annual Report on Form 10-K, we have accounted for the ITG Acquisition under
the acquisition method of accounting. Under the acquisition method of
accounting, the assets and liabilities of ITG, as of March 1, 2019 (the "ITG
Closing Date"), were recorded at their respective fair values and added to the
carrying value of our existing assets and liabilities. Our reported financial
condition, results of operations and cash flows for the periods following the
ITG Closing Date reflect ITG's and our balances, and reflect the impact of
purchase accounting adjustments, including revised amortization and depreciation
expense for acquired assets.

                                       47
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Overview

We are a leading financial services firm that leverages cutting edge technology
to deliver liquidity to the global markets and innovative, transparent trading
solutions to our clients. Leveraging our global market structure expertise and
scaled, multi-asset technology infrastructure, we provide our clients with a
robust product suite including offerings in execution, liquidity sourcing,
analytics and broker-neutral, multi-dealer platforms in workflow technology. Our
product offerings allow our clients to trade on hundreds of venues across over
50 countries and in multiple asset classes, including global equities, ETFs,
foreign exchange, futures, fixed income, cryptocurrencies and other commodities.
Our integrated, multi-asset analytics platform provides a range of pre- and
post-trade services, data products and compliance tools that our clients rely
upon to invest, trade and manage risk across global markets. We believe that our
broad diversification, in combination with our proprietary technology platform
and low-cost structure gives us the scale necessary to grow our business around
the globe as we service clients and facilitate risk transfer between global
capital markets participants by providing liquidity, while at the same time
earning attractive margins and returns.

Technology and operational efficiency are at the core of our business, and our
focus on technology is a key element of our success. We have developed a
proprietary, multi-asset, multi-currency technology platform that is highly
reliable, scalable and modular, and we integrate directly with exchanges,
liquidity centers, and our clients. Our market data, order routing, transaction
processing, risk management and market surveillance technology modules manage
our market making and execution services activities in an efficient manner and
enable us to scale our activities globally across additional securities and
other financial instruments and asset classes without significant incremental
costs or third-party licensing or processing fees.

We believe that technology-enabled market makers and execution services
providers like Virtu serve an important role in maintaining and enhancing the
overall health and efficiency of the global capital markets by ensuring that
market participants have an efficient means to invest, transfer risk and analyze
the quality of executions. We believe that market participants benefit from the
increased liquidity, lower overall trading costs and execution transparency that
Virtu provides.

Our execution services and client solutions products are designed to be
transparent, because we believe transparency makes markets more efficient and
helps investors make better, more informed decisions. We use the latest
technology to create and deliver liquidity to global markets and innovative
trading solutions and analytics tools to our clients. We interact directly with
hundreds of retail brokers, Registered Investment Advisors, private client
networks, sell-side brokers, and buy-side institutions.

We have two operating segments: Market Making and Execution Services, and one
non-operating segment: Corporate. Our management allocates resources, assesses
performance and manages our business according to these segments.

Market creation

We leverage cutting edge technology to provide competitive and deep liquidity
that helps to create more efficient markets around the world. As a market maker
and liquidity provider, we stand ready, at any time, to buy or sell a broad
range of securities and other financial instruments, and we generate profits by
buying and selling large volumes of securities and other financial instruments
and earning small bid/ask spreads. Our market structure expertise, broad
diversification, and scalable execution technology enable us to provide
competitive bids and offers in over 25,000 securities and other financial
instruments, on over 235 venues, in 36 countries worldwide. We use the latest
technology to create and deliver liquidity to the global markets and automate
our market making, risk controls, and post-trade processes. As a market maker,
we interact directly with hundreds of retail brokers, Registered Investment
Advisors, private client networks, sell-side brokers, and buy-side institutions.

We believe the overall level of volumes and realized volatility in the various
markets we serve have the greatest impact on our market making businesses.
Increases in market volatility can cause bid/ask spreads to widen as market
participants are more willing to pay market makers like us to transact
immediately and as a result, market makers' capture rate per notional amount
transacted increases.

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Fulfillment Services

We offer client execution services and trading venues that provide transparent
trading in global equities, ETFs, fixed income, currencies, and commodities to
institutions, banks and broker-dealers. We generally earn commissions when
transacting as an agent for our clients. Client-based, execution-only trading
within this segment is done through a variety of access points including: (a)
algorithmic trading and order routing; (b) institutional sales traders who offer
portfolio trading and single stock sales trading which provides execution
expertise for program, block and riskless principal trades in global equities
and ETFs; and (c) matching of client conditional orders in POSIT Alert and in
our ATSs, including Virtu MatchIt and POSIT. We also earn revenues (a) by
providing our proprietary technology and infrastructure to select third parties
for a service fee, (b) through workflow technology and our integrated,
broker-neutral trading tools delivered across the globe, including order and
execution management systems and order management software applications and
network connectivity and (c) through trading analytics, including (1) tools
enabling portfolio managers and traders to improve pre-trade, real-time and
post-trade execution performance, (2) portfolio construction and optimization
decisions and (3) securities valuation. The segment also includes the results of
our capital markets business, in which we act as an agent for issuers in
connection with at-the-market offerings and buyback programs.

Business

Our Corporate segment contains investments principally in strategic financial
services-oriented opportunities and maintains corporate overhead expenses and
all other income and expenses that are not attributable to our other segments.

Acquisition of ITG

On March 1, 2019, the "ITG Closing Date", we announced the completion of
Investment Technology Group, Inc. and its subsidiaries ("ITG") in an all-cash
transaction (the "ITG Acquisition"). In connection with the ITG Acquisition,
Virtu Financial, VFH Parent LLC, a Delaware limited liability company and a
subsidiary of Virtu Financial ("VFH"), and Impala Borrower LLC (the "Acquisition
Borrower"), a subsidiary of the Company, entered into the Acquisition Credit
Agreement, with the lenders party thereto, Jefferies Finance LLC, as
administrative agent and Jefferies Finance LLC and RBC Capital Markets, as joint
lead arrangers and joint bookrunners. The Acquisition Credit Agreement provided
(i) the First Lien Term Loan Facility (as defined below) in an aggregate
principal amount of $1.5 billion, drawn in its entirety on the ITG Closing Date,
with approximately $404.5 million borrowed by VFH to repay all amounts
outstanding under its existing term loan facility and the remaining
approximately $1,095.0 million borrowed by the Acquisition Borrower to finance
the consideration and fees and expenses to be paid in connection with the ITG
Acquisition, and (ii) the First Lien Revolving Facility (as defined below), with
a $5.0 million letter of credit subfacility and a $5.0 million swingline
subfacility. After the closing of the ITG Acquisition, VFH assumed the
obligations of the Acquisition Borrower in respect of the acquisition term
loans. Additionally, on the ITG Closing Date, the Company's fourth amended and
restated credit agreement, dated as of June 30, 2017 (as amended on January 2,
2018 and September 19, 2018, the "Fourth Amended and Restated Credit Agreement")
was terminated.

As described below, the Acquisition Credit Agreement was amended on October 9,
2019, on which date VFH borrowed an additional $525.0 million of incremental
first lien term loans, the proceeds of which were used together with cash on
hand to redeem the Notes (as defined below). The Indenture (as defined below)
was fully terminated following such redemption. The Credit Agreement was further
amended on March 2, 2020 to, among other things, reduce the interest rate spread
over LIBOR or the applicable benchmark by 0.50%. On January 13, 2022, VFH and
Virtu Financial entered into the Credit Agreement, with the lenders party
thereto, JPMorgan Chase Bank, N.A. as administrative agent and JPMorgan Chase
bank, N.A., Goldman Sachs Bank USA, RBC Capital Markets, Barclays Bank plc,
Jefferies Finance LLC, BMO Capital Markets Corp., and CIBC World Markets Corp.,
as joint lead arrangers and bookrunners. The proceeds of the Credit Agreement
were used to pay off the Acquisition Credit Agreement. A further description of
the Credit Agreement is set forth below in Note 26 "Subsequent Events" of Part
II Item 8 "Financial Statements and Supplementary Data" of this Annual Report on
Form 10-K.

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Amended and Updated 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 Company's IPO
and was subsequently amended and restated following receipt of approval from the
Company's stockholders on June 30, 2017 (the "Amended and Restated 2015
Management Incentive Plan"). The Amended and Restated 2015 Management Incentive
Plan provides for the grant of stock options, restricted stock units, and other
awards based on an aggregate of 16,000,000 shares of Class A Common Stock, par
value $0.00001 per share (the "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. On April 23, 2020, the Company's Board of Directors adopted an amendment
to the Company's Amended and Restated 2015 Management Incentive Plan in order to
increase the number of shares of the Company's Class A Common Stock reserved for
issuance, and in respect of which awards may be granted under the Amended and
Restated 2015 Plan from 16,000,000 shares of Class A Common Stock to an
aggregate of 21,000,000 shares of Class A Common Stock and the amendment was
approved by the Company's shareholders at the Company's annual meeting of
shareholders on June 5, 2020.

In connection with the IPO, non-qualified stock options to purchase 9,228,000
shares were granted at the IPO per share price, each of which vests in equal
annual installments over a period of four years from the grant date and expires
not later than 10 years from the grant date. Subsequent to the IPO and through
December 31, 2021, options to purchase 1,628,750 shares in the aggregate were
forfeited and 5,722,095 options were exercised. The fair value of the stock
option grants was determined through the application of the Black-Scholes-Merton
model and was recognized on a straight-line basis over the vesting period. In
connection with and subsequent to the IPO, 1,677,318 shares of immediately
vested Class A Common Stock and 2,620,051 restricted stock units were granted,
which vest over a period of up to 4 years and are settled in shares of Class A
Common Stock. The fair value of the Class A Common Stock and restricted stock
units was determined based on the volume weighted average price for the three
days preceding the grant, and with respect to the restricted stock units is
recognized on a straight-line basis over the vesting period.

Changed and Updated Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan

On the ITG Closing Date, the Company assumed the Amended and Restated ITG 2007
Omnibus Equity Compensation Plan, dated as of June 8, 2017 (the "Amended and
Restated ITG 2007 Equity Plan") and certain stock option awards, restricted
stock unit awards, deferred stock unit awards and performance stock unit awards
granted under the Amended and Restated ITG 2007 Equity Plan (the "Assumed
Awards"). The Assumed Awards are subject to the same terms and conditions that
were applicable to them under the Amended and Restated ITG 2007 Equity Plan,
except that (i) the Assumed Awards relate to shares of the Company's Class A
Common Stock, (ii) the number of shares of Class A Common Stock subject to the
Assumed Awards was the result of an adjustment based upon an Exchange Ratio (as
defined in the Agreement and Plan of Merger by and between the Company, Impala
Merger Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary
of the Company, and ITG, dated as of November 6, 2018, the "ITG Merger
Agreement") and (iii) the performance share unit awards were converted into
service-based vesting restricted stock unit awards that were no longer subject
to any performance based vesting conditions. As of the ITG Closing Date, the
aggregate number of shares of Class A Common Stock subject to such Assumed
Awards was 2,497,028 and the aggregate number of shares of Class A Common Stock
that remained issuable pursuant to the Amended and Restated ITG 2007 Equity Plan
was 1,230,406. The Company filed a Registration Statement on Form S-8 on the ITG
Closing Date to register such shares of Class A Common Stock.

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Components of our operating results

The following table shows our i) Total revenue, ii) Total operating expenses,
and iii) Income before income taxes and noncontrolling interest by segment for
the years ended December 31, 2021, 2020 and 2019:

(in thousands)                                                         Years Ended December 31,
Market Making                                                              2021                 2020                 2019
Total revenue                                                         $

2,203,046 $2,593,342 $1,028,094
Total operating expenses

                                                1,277,078            1,352,029              918,904
Income before income taxes and noncontrolling
interest                                                                  925,968            1,241,313              109,190
Execution Services
Total revenue                                                             600,215              650,143              491,736
Total operating expenses                                                  530,196              475,526              618,667
Income (loss) before income taxes and
noncontrolling interest                                                    70,019              174,617             (126,931)
Corporate
Total revenue                                                               8,224               (4,154)              (2,338)
Total operating expenses                                                    7,307               28,939               95,903
Income (loss) before income taxes and
noncontrolling interest                                                       917              (33,093)             (98,241)

Consolidated

Total revenue                                                           2,811,485            3,239,331            1,517,492
Total operating expenses                                                1,814,581            1,856,494            1,633,474
Income (loss) before income taxes and
noncontrolling interest                                               $   

996 904 $1,382,837 ($115,982)



The following table shows our results of operations for the years ended December
31, 2021, 2020, and 2019:

                                                                       Years Ended December 31,
(in thousands)                                                             2021                 2020                2019

Revenues:
Trading income, net                                                   $

2,105,194 $2,493,248 $912,316
Interest and dividends

                                              75,384               62,119             108,778
Commissions, net and technology services                                  614,489              600,510             498,544
Other, net                                                                 16,418               83,454              (2,146)
Total revenue                                                           2,811,485            3,239,331           1,517,492

Operating Expenses:
Brokerage, exchange, clearance fees and payments
for order flow, net                                                       745,434              758,843             386,888
Communication and data processing                                         211,988              213,750             209,393
Employee compensation and payroll taxes                                   376,282              393,536             383,713

Interest and dividends expense                                            139,704              125,649             158,039
Operations and administrative                                              88,149               94,558             103,642
Depreciation and amortization                                              67,816               66,741              65,644
Amortization of purchased intangibles and
acquired capitalized software                                              69,668               74,254              70,595
Termination of office leases                                               28,138                9,608              66,452
Debt issue cost related to debt refinancing,
prepayment and commitment fees                                              6,590               28,879              41,132
Transaction advisory fees and expenses                                        843                2,941              26,117

Financing interest expense on long-term
borrowings                                                                 79,969               87,735             121,859
Total operating expenses                                                1,814,581            1,856,494           1,633,474
Income (loss) before income taxes and
noncontrolling interest                                                   996,904            1,382,837            (115,982)
Provision for (benefit from) income taxes                                 169,670              261,924             (12,277)
Net income (loss)                                                     $   827,234          $ 1,120,913          $ (103,705)


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Total revenue

Revenues are generated through market marking activities, commissions and fees
on execution services activities, which include recurring subscriptions on
workflow technology and analytic products. The majority of our revenues are
generated through market making activities, which are recorded as Trading
income, net and Interest and dividends income. Commissions and fees are derived
from commissions charged for trade executions in client execution services. We
earn commissions and commission equivalents, as well as, in certain cases,
contingent fees based on client revenues, which represent variable
consideration. The services offered under these contracts have the same pattern
of transfer; accordingly, they are being measured and recognized as a single
performance obligation. The performance obligation is satisfied over time, and
accordingly, revenue is recognized as time passes. Variable consideration has
not been included in the transaction price as the amount of consideration is
contingent on factors outside our control.

Recurring revenues are primarily derived from workflow technology connectivity
fees generated for matching client orders, and analytics services to select
third parties. Revenues from connectivity fees are recognized and billed to
clients on a monthly basis. Revenues from commissions attributable to analytic
products under bundled arrangements are recognized over the course of the year
as the performance obligations for those analytics products are satisfied.

Trading income, net. Trading income, net represents revenue earned from bid/ask
spreads. Trading income is generated in the normal course of our market making
activities and is typically proportional to the level of trading activity, or
volumes, and bid/ask spreads in the asset classes we serve. Our trading income
is highly diversified by asset class and geography and is comprised of small
amounts earned on millions of trades on various exchanges. Our trading income,
net, results from gains and losses associated with trading strategies, which are
designed to capture small bid ask spreads, while hedging risks. Trading income,
net, accounted for 75% and 77% of our total revenues for the years ended
December 31, 2021 and 2020, respectively.

Interest and dividends income. Our market making activities require us to hold
securities on a regular basis, and we generate revenues in the form of interest
and dividends income from these securities. Interest is also earned on
securities borrowed from other market participants pursuant to collateralized
financing arrangements and on cash held by brokers. Dividends income arises from
holding market making positions over dates on which dividends are paid to
shareholders of record.

Commissions, net and technology services. We earn revenues on transactions for
which we charge explicit commissions or commission equivalents, which include
the majority of our institutional client orders. Commissions and fees are
primarily affected by changes in our equities, fixed income and futures
transaction volumes with institutional clients, which vary based on client
relationships; changes in commission rates; client experience on the various
platforms; level of volume based fees from providing liquidity to other trading
venues; and the level of our soft dollar and commission recapture activity.
Client commission fees are charged for client trades executed by us on behalf of
third-party broker-dealers and other financial institutions. Revenue is
recognized on a trade date basis, which is the point at which the performance
obligation to the customer is satisfied, based on the trade being executed. In
addition, we offer workflow technology and analytics services to select third
parties. Revenues are derived from fees generated by matching sell-side and
buy-side clients orders, and from analytic products delivered to the clients.

Technology licensing fees are charged for the licensing of our proprietary
technology and the provision of related services, including hosting, management
and support. These fees include an up-front component and a recurring fee for
the relevant terms, which may include both fixed and variable components.
Revenue is recognized ratably for these services over the contractual term of
the agreement.

Other, net. We have interests in multiple strategic investments and
telecommunications joint ventures ("JVs"). We record our pro-rata share of each
JV's earnings or losses within other, net, while fees related to the use of
communication services provided by the JVs are recorded within communications
and data processing.

We have a noncontrolling investment (the "JNX Investment") in Japannext Co.,
Ltd. ("JNX"), a proprietary trading system based in Tokyo. In connection with
the investment, we issued bonds to certain affiliates of JNX and used the
proceeds to partially finance the transaction. Revenues or losses are recognized
due to the changes in fair value of the investment or fluctuations in Japanese
Yen conversion rates within Other, net.

Others, net, may also include gains on business sales, revenue from service contracts related to the sale of businesses and the gain or loss on the ineffective portion of derivatives used as cash flow hedging instruments. Treasury.

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Functionnary costs

Brokerage, exchange, clearance fees and payments for order flow, net. Brokerage,
exchange, clearance fees and payments for order flow are our most significant
expenses, which include the direct expenses of executing and clearing
transactions that we consummate in the course of our market making activities.
Brokerage, exchange, clearance fees and payments for order flow primarily
consist of fees charged by third parties for executing, processing and settling
trades. These fees generally increase and decrease in direct correlation with
the level of our trading activity. Execution fees are paid primarily to
exchanges and venues where we trade. Clearance fees are paid to clearing houses
and clearing agents. Payments for order flow represent payments to broker-dealer
clients, in the normal course of business, for directing their order flow in
U.S. equities to the Company. Rebates based on volume discounts, credits or
payments received from exchanges or other marketplaces are netted against
brokerage, exchange, clearance fees and payments for order flow.

Communication and data processing. Communication and data processing represent
primarily fixed expenses for leased equipment, equipment co-location, network
lines and connectivity for our trading centers and co-location facilities.
Communications expense consists primarily of the cost of voice and data
telecommunication lines supporting our business, including connectivity to data
centers, exchanges, markets and liquidity pools around the world, and data
processing expense consists primarily of market data subscription fees that we
pay to third parties to receive price quotes and related information.

Employee compensation and payroll taxes. Employee compensation and payroll taxes
include employee salaries, cash and non-cash incentive compensation, employee
benefits, payroll taxes, severance and other employee related costs. Employee
compensation and payroll taxes also includes non-cash compensation expenses with
respect to restricted stock units and restricted stock awards granted in
connection with and subsequent to the IPO pursuant to the Amended and Restated
2015 Management Incentive Plan and Class A Common Stock underlying certain
awards assumed pursuant to the Amended and Restated ITG 2007 Equity Plan.

Interest and dividends expense. We incur interest expense from loaning certain
equity securities in the general course of our market making activities pursuant
to collateralized lending transactions. Typically, dividend expense is incurred
when a dividend is paid on securities sold short.

Operations and administrative. Operations and administrative expense represents
occupancy, recruiting, travel and related expense, professional fees and other
expenses.

Depreciation and amortization. Depreciation and amortization expense results
from the depreciation of fixed assets, such as computing and communications
hardware, as well as amortization of leasehold improvements and capitalized
in-house software development. We depreciate our computer hardware and related
software, office hardware and furniture and fixtures on a straight-line basis
over a period of 3 to 7 years based on the estimated useful life of the
underlying asset, and we amortize our capitalized software development costs on
a straight-line basis over a period of 1.5 to 3 years, which represents the
estimated useful lives of the underlying software. We amortize leasehold
improvements on a straight-line basis over the lesser of the life of the
improvement or the term of the lease.

Amortization of purchased intangibles and acquired capitalized software.
Amortization of purchased intangibles and acquired capitalized software
represents the amortization of finite lived intangible assets acquired in
connection with the acquisition of certain assets from Nyenburgh Holding B.V.,
Teza Technologies, the Acquisition of KCG, and the ITG Acquisition. These assets
are amortized over their useful lives, ranging from 1 to 15 years, except for
certain assets which were categorized as having indefinite useful lives.

Termination of office leases. Termination of office leases represents write-off expense related to certain office space that we ceased to use as part of the effort to integrate and consolidate office space as part of the KCG acquisition and the acquisition of ITG. The total amount of the write-off includes depreciation of right-of-use assets relating to operating leases, leasehold improvements and fixed assets, as well as decay charges.

Debt issue costs related to debt refinancing, prepayment and commitment fees. As
a result of the refinancing or early termination of our long-term borrowings, we
accelerate the capitalized debt issue costs and the discount on the term loan
that would otherwise be amortized or accreted over the life of the term loan.
Premium paid in connection with retiring outstanding bonds, and commitment fees
paid for lines of credit are also included in this category.

Transaction advisory fees and expenses. Transaction advisory fees and expenses
primarily reflect professional fees incurred by us in connection with one or
more acquisitions or dispositions.

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Financing of interest charges on long-term borrowings. Interest expense on financing reflects accrued interest on outstanding debt under our long-term debt agreements.

Provision for (profit) income taxes

We are subject to we federal, state and local income tax at the applicable corporate rate less the rate attributable to the non-controlling interest in Virtual Financial.

Our effective tax rate is subject to significant variation due to several
factors, including variability in our pre-tax and taxable income and loss and
the jurisdictions to which they relate, changes in how we do business,
acquisitions and investments, audit-related developments, tax law developments
(including changes in statutes, regulations, case law, and administrative
practices), and relative changes of expenses or losses for which tax benefits
are not recognized. Additionally, our effective tax rate can be more or less
volatile based on the amount of pre-tax income or loss. For example, the impact
of discrete items and non-deductible expenses on our effective tax rate is
greater when our pre-tax income is lower.

We regularly assess whether it is more likely than not that we will realize our
deferred tax assets in each taxing jurisdiction in which we operate. In
performing this assessment with respect to each jurisdiction, we review all
available evidence, including actual and expected future earnings, capital
gains, and investment in such jurisdiction, the carry-forward periods available
to us for tax reporting purposes, and other relevant factors. See Note 15
"Income Taxes" of Part II Item 8 "Financial Statements and Supplementary Data"
of this Annual Report on Form 10-K for additional information.

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Non-GAAP Financial Measures and Other Items

To supplement our consolidated financial statements presented in accordance with
generally accepted accounting principles in the United States ("U.S. GAAP"), we
use the following non-U.S. GAAP ("Non-GAAP") financial measures of financial
performance:

•"Adjusted Net Trading Income", which is the amount of revenue we generate from
our market making activities, or Trading income, net, plus Commissions, net and
technology services, plus Interest and dividends income, less direct costs
associated with those revenues, including Brokerage, exchange, clearance fees
and payments for order flow, net, and Interest and dividends expense. Management
believes that this measurement is useful for comparing general operating
performance from period to period. Although we use Adjusted Net Trading Income
as a financial measure to assess the performance of our business, the use of
Adjusted Net Trading Income is limited because it does not include certain
material costs that are necessary to operate our business. Our presentation of
Adjusted Net Trading Income should not be construed as an indication that our
future results will be unaffected by revenues or expenses that are not directly
associated with our market making activities.

•"EBITDA", which measures our operating performance by adjusting net income to
exclude Financing interest expense on long-term borrowings, Debt issue cost
related to debt refinancing, prepayment, and commitment fees, Depreciation and
amortization, Amortization of purchased intangibles and acquired capitalized
software, and Income tax expense, and "Adjusted EBITDA", which measures our
operating performance by further adjusting EBITDA to exclude severance,
transaction advisory fees and expenses, termination of office leases, charges
related to share based compensation and other expenses, which includes reserves
for legal matters, COVID-19 one-time costs and donations and Other, net.

•"Normalized Adjusted Net Income", "Normalized Adjusted Net Income before income
taxes", "Normalized provision for income taxes", and "Normalized Adjusted EPS",
which we calculate by adjusting Net Income to exclude certain items and other
non-cash items, assuming that all vested and unvested Virtu Financial Units have
been exchanged for Class A Common Stock, and applying an effective tax rate,
which was approximately 24%.

•Operating margins, which are calculated by dividing net profit, EBITDA and adjusted EBITDA by adjusted net operating income.

Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Normalized Adjusted Net
Income, Normalized Adjusted Net Income before income taxes, Normalized provision
for income taxes, Normalized Adjusted EPS, and Operating Margins (collectively,
the "Company's Non-GAAP Measures") are non-GAAP financial measures used by
management in evaluating operating performance and in making strategic
decisions. In addition, the Company's Non-GAAP Measures or similar non-GAAP
financial measures are used by research analysts, investment bankers and lenders
to assess our operating performance. Management believes that the presentation
of the Company's Non-GAAP Measures provides useful information to investors
regarding our results of operations and cash flows because they assist both
investors and management in analyzing and benchmarking the performance and value
of our business. The Company's Non-GAAP Measures provide indicators of general
economic performance that are not affected by fluctuations in certain costs or
other items. Accordingly, management believes that these measurements are useful
for comparing general operating performance from period to period. Furthermore,
our Credit Agreement contains covenants and other tests based on metrics similar
to Adjusted EBITDA. Other companies may define Adjusted Net Trading Income,
Adjusted EBITDA, Normalized Adjusted Net Income, Normalized Adjusted Net Income
before income taxes, Normalized provision for income taxes, Normalized Adjusted
EPS, and Operating Margins differently, and as a result the Company's Non-GAAP
Measures may not be directly comparable to those of other companies. Although we
use the Company's Non-GAAP Measures as financial measures to assess the
performance of our business, such use is limited because they do not include
certain material costs necessary to operate our business.

The Company's Non-GAAP Measures should be considered in addition to, and not as
a substitute for, Net Income in accordance with U.S. GAAP as a measure of
performance. Our presentation of the Company's Non-GAAP Measures should not be
construed as an indication that our future results will be unaffected by unusual
or nonrecurring items. The Company's Non-GAAP Measures have limitations as
analytical tools, and you should not consider them in isolation or as
substitutes for analysis of our results as reported under U.S. GAAP. Some of
these limitations are:

•they do not reflect all cash expenditures, future investment needs or contractual commitments;

•our EBITDA-based measures do not reflect the significant interest expense or
the cash requirements necessary to service interest or principal payment on our
debt;

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•although depreciation and amortization are non-cash charges, the assets being
depreciated and amortized will often have to be replaced or require improvements
in the future, and our EBITDA-based measures do not reflect any cash requirement
for such replacements or improvements;

•they are not adjusted for all non-cash income or expense items that are reflected in our consolidated statements of cash flows;

•they do not reflect the impact of income or expense resulting from matters that we believe are not indicative of our current operations; and

•they do not reflect the limitations of our costs linked to the transfer of profits from our subsidiaries to us.

Because of these limitations, the Company's Non-GAAP Measures are not intended
as alternatives to Net Income as indicators of our operating performance and
should not be considered as measures of discretionary cash available to us to
invest in the growth of our business or as measures of cash that will be
available to us to meet our obligations. We compensate for these limitations by
using the Company's Non-GAAP Measures along with other comparative tools,
together with U.S. GAAP measurements, to assist in the evaluation of operating
performance. These U.S. GAAP measurements include operating Net Income, cash
flows from operations and cash flow data. See below a reconciliation of each of
the Company's Non-GAAP Measures to the most directly comparable U.S. GAAP
measure.

The following table reconciles the consolidated statements of comprehensive income to arrive at adjusted net operating income, EBITDA, adjusted EBITDA and operating margins for the years ended December 31, 20212020 and 2019.

                                                                           Years Ended December 31,
(in thousands)                                                                2021                 2020                2019

Reconciliation of trading income, net to adjusted net trading income Trading income, net

                                                      $ 

2,105,194 $2,493,248 $912,316
Interest and dividends

                                                 75,384               62,119             108,778
Commissions, net and technology services                                     614,489              600,510             498,544

Brokerage, FX, clearance and payments for order flow, net

                                                             (745,434)            (758,843)           (386,888)
Interest and dividends expense                                              (139,704)            (125,649)           (158,039)
Adjusted Net Trading Income                                              $ 

1,909,929 $2,271,385 $974,711

Reconciliation of net income to EBITDA and adjusted EBITDA Net income (loss)

                                                        $  

827 234 $1,120,913 ($103,705)
Financing of interest charges on long-term borrowings

                            79,969               87,735             121,859
Debt issue cost related to debt refinancing,
prepayment, and commitment fees                                                6,590               28,879              41,132
Depreciation and amortization                                                 67,816               66,741              65,644

Amortization of purchased intangible assets and acquired capitalized software

                                                          69,668               74,254              70,595
Provision for (benefit from) income taxes                                    169,670              261,924             (12,277)
EBITDA                                                                   $ 1,220,947          $ 1,640,446          $  183,248
Severance                                                                      6,112               10,286             102,768

Transaction advisory fees and expenses                                           843                2,941              26,117
Termination of office leases                                                  28,138                9,608              66,452

Gain on sale of MATCHNow                                                           -              (58,652)                  -

Other                                                                        (10,558)             (16,418)              2,651
Share based compensation                                                      55,751               59,838              50,627

Adjusted EBITDA                                                          $ 1,301,233          $ 1,648,049          $  431,863

Selected Operating Margins
Net Income Margin (1)                                                           43.3  %              49.3  %            (10.6) %
EBITDA Margin (2)                                                               63.9  %              72.2  %             18.8  %
Adjusted EBITDA Margin (3)                                                      68.1  %              72.6  %             44.3  %


(1) Calculated by dividing net income by adjusted net operating income. (2) Calculated by dividing EBITDA by adjusted net operating income. (3) Calculated by dividing adjusted EBITDA by adjusted net operating income.

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The following table reconciles Net Income to arrive at Normalized Adjusted Net
Income before income taxes, Normalized provision for income taxes, Normalized
Adjusted Net Income and Normalized Adjusted EPS for the years ended December 31,
2021, 2020 and 2019:

                                                                             Years Ended December 31,
(in thousands, except share and per share data)                                  2021                  2020                   2019

Reconciliation of net income to normalized adjusted net income Net income (loss)

$827,234 $1,120,913 ($103,705)
Provision for (profit) income taxes

                                        169,670               261,924                (12,277)
Income (loss) before income taxes                                                996,904             1,382,837               (115,982)

Amortization of purchased intangible assets and acquired capitalized software

                                                              69,668                74,254                 70,595

Debt issue cost related to debt refinancing,
prepayment, and commitment fees                                                    6,590                28,879                 41,132

Severance                                                                          6,112                10,286                102,768
Transaction advisory fees and expenses                                               843                 2,941                 26,117
Termination of office leases                                                      28,138                 9,608                 66,452

Gain on sale of MATCHNow                                                               -               (58,652)                     -

Other                                                                            (10,558)              (16,418)                 2,651
Share based compensation                                                          55,751                59,838                 50,627

Normalized Adjusted Net Income before income taxes                             1,153,448             1,493,573                244,360
Normalized provision for income taxes (1)                                        276,827               358,458                 58,646
Normalized Adjusted Net Income                                             

$876,621 $1,135,115 $185,714

Weighted Average Adjusted shares outstanding (2)                             191,958,870           196,929,673            193,153,745

Normalized Adjusted EPS                                                    $        4.57          $       5.76          $        0.96




(1)Reflects U.S. federal, state, and local income tax rate applicable to
corporations of approximately 24% for 2021, 2020, and 2019.
(2)Assumes that (1) holders of all vested and unvested non-vesting Virtu
Financial Units (together with corresponding shares of the Company's Class C
common stock, par value $0.00001 per share (the "Class C Common Stock")) have
exercised their right to exchange such Virtu Financial Units for shares of Class
A Common Stock on a one-for-one basis, (2) holders of all Virtu Financial Units
(together with corresponding shares of the Company's Class D common stock, par
value $0.00001 per share (the "Class D Common Stock")) have exercised their
right to exchange such Virtu Financial Units for shares of the Company's Class B
common stock, par value $0.00001 per share (the "Class B Common Stock") on a
one-for-one basis, and subsequently exercised their right to convert the shares
of Class B Common Stock into shares of Class A Common Stock on a one-for-one
basis. Includes additional shares from dilutive impact of options, restricted
stock units and restricted stock awards outstanding under the Amended and
Restated 2015 Management Incentive Plan and the Amended and Restated ITG 2007
Equity Plan during the years ended December 31, 2021, 2020 and 2019 as well as
warrants issued in connection with the Founder Member Loan during the year ended
December 31, 2020.

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The following tables reconcile trading income, net and adjusted net trading income by segment for the years ended December 31, 20212020 and 2019:



                                                                      Year Ended December 31, 2021
                                                                      Execution
(in thousands)                                Market Making            Services             Corporate              Total
Trading income, net                         $    2,079,653          $    25,541          $          -          $ 2,105,194
Commissions, net and technology
services                                            40,955              573,534                     -              614,489
Interest and dividends income                       75,311                   73                     -               75,384
Brokerage, exchange, clearance fees
and payments for order flow, net                  (634,783)            (110,651)                    -             (745,434)
Interest and dividends expense                    (133,584)              (6,120)                    -             (139,704)
Adjusted Net Trading Income                 $    1,427,552          $   482,377          $          -          $ 1,909,929



                                                                      Year Ended December 31, 2020
                                                                      Execution
(in thousands)                                Market Making            Services             Corporate              Total
Trading income, net                         $    2,455,182          $    38,066          $          -          $ 2,493,248
Commissions, net and technology
services                                            52,453              548,057                     -              600,510
Interest and dividends income                       61,485                  634                     -               62,119
Brokerage, exchange, clearance fees
and payments for order flow, net                  (662,994)             (95,849)                    -             (758,843)
Interest and dividends expense                    (123,715)              (1,934)                    -             (125,649)
Adjusted Net Trading Income                 $    1,782,411          $   488,974          $          -          $ 2,271,385


                                                                      Year Ended December 31, 2019
                                                                      Execution
                                              Market Making            Services             Corporate              Total
Trading income, net                         $      908,328          $     3,988          $          -          $  912,316
Commissions, net and technology
services                                            23,526              475,018                     -             498,544
Interest and dividends income                       96,197               12,581                     -             108,778
Brokerage, exchange, clearance fees
and payments for order flow, net                  (277,668)            (109,220)                    -            (386,888)
Interest and dividends expense                    (145,782)             (12,257)                    -            (158,039)
Adjusted Net Trading Income                 $      604,601          $   370,110          $          -          $  974,711





The following table shows our Adjusted Net Trading Income and average daily
Adjusted Net Trading Income by segment for the years ended December 31, 2021,
2020 and 2019:





(in thousands, except %)                             2021                                                    2020                                                   2019
Adjusted Net Trading                                  Average                                                 Average                                               Average
Income by Segment:                 Total               Daily              %                Total               Daily              %               Total              Daily              %

Market Making                  $ 1,427,552          $  5,665             74.7  %       $ 1,782,411          $  7,045             78.5  %       $ 604,601          $  2,390             62.0  %

Execution Services                 482,377             1,914             25.3  %           488,974             1,933             21.5  %         370,110             1,463             38.0  %

Adjusted Net Trading
Income                         $ 1,909,929          $  7,579            100.0  %       $ 2,271,385          $  8,978            100.0  %       $ 974,711          $  3,853            100.0  %



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Year ended December 31, 2021 Compared to the year ended December 31, 2020

Total revenue

Our total revenues decreased $427.8 million, or 13.2%, to $2,811.5 million for
the year ended December 31, 2021, compared to $3,239.3 million for the year
ended December 31, 2020. This decrease was primarily attributable to a decrease
of $388.1 million in Trading income, net, which was primarily driven by lower
market volatility during the year ended December 31, 2021 compared to the prior
period. Additionally, Other, net declined $67.0 million primarily attributable
to the sale of MATCHNow on August 4, 2020.

The following table shows total revenues by segment for the years ended
December 31, 2021 and 2020.

                                                            Years Ended 

the 31st of December,

   (in thousands, except for percentage)              2021              

2020 % change

Market creation

   Trading income, net                           $   2,079,653      $ 

2,455,182 (15.3)%

   Interest and dividends income                        75,311           

61,485 22.5%

   Commissions, net and technology services             40,955           

52,453 (21.9)%

   Other, net                                            7,127           

24,222 (70.6)%

   Total revenues from Market Making             $   2,203,046      $ 2,593,342        (15.0)%

   Execution Services
   Trading income, net                           $      25,541      $    38,066        (32.9)
   Interest and dividends income                            73              

634 (88.5)%

   Commissions, net and technology services            573,534          

548,057 4.6%

   Other, net                                            1,067           

63,386 (98)%

   Total revenues from Execution Services        $     600,215      $   650,143        (7.7)%

   Corporate

   Other, net                                    $       8,224      $    (4,154)         NM
   Total revenues from Corporate                 $       8,224      $    (4,154)         NM

   Consolidated
   Trading income, net                           $   2,105,194      $ 2,493,248        (15.6)%
   Interest and dividends income                        75,384           

62,119 21.4%

   Commissions, net and technology services            614,489          600,510         2.3%
   Other, net                                           16,418           83,454        (80.3)%
   Total revenues                                $   2,811,485      $ 3,239,331        (13.2)%



Trading income, net. Trading income, net was primarily earned by our Market
Making segment. Trading income, net, decreased $388.1 million, or 15.6%, to
$2,105.2 million for the year ended December 31, 2021, compared to $2,493.2
million for the year ended December 31, 2020. The decrease was primarily driven
by lower market volatility during the year ended December 31, 2021 compared to
2020, which experienced elevated levels of market volatility and trading volumes
largely due to the impacts of COVID-19 and the governmental and other responses
thereto. Average daily realized volatility of the S&P 500 Index decreased
57.27.2% compared to the prior period, and the average daily realized volatility
of the CVIX decreased 611.22 compared to prior period. Rather than analyzing
trading income, net, in isolation, we evaluate it in the broader context of our
Adjusted Net Trading Income, together with Interest and dividends income,
Interest and dividends expense, Commissions, net and technology services and
Brokerage, exchange, clearance fees and payments for order flow, net, each of
which are described below.

Interest and dividends income. Interest and dividends income was primarily
earned by our Market Making segment. Interest and dividends income increased
$13.3 million, or 21.4%, to $75.4 million for the year ended December 31, 2021,
compared to $62.1 million for the year ended December 31, 2020. This increase
was primarily attributable to higher interest income earned on cash collateral
posted as part of securities borrowed transactions driven by higher interest
rates for the period compared to the prior period. As indicated above, rather
than analyzing interest and dividends income in isolation, we evaluate it in the
broader context of our Adjusted Net Trading Income.
                                       59
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Commissions, net and technology services. Commissions, net and technology
services revenues were primarily earned by our Execution Services segment.
Commissions, net and technology services revenues increased $14.0 million, or
2.3%, to $614.5 million for the year ended December 31, 2021, compared to $600.5
million for the year ended December 31, 2020. The increase was primarily
attributable to higher trading volumes in U.S. equities. Average daily U.S.
equities consolidated volumes increased 4.4% compared to prior period. As
indicated above, rather than analyzing commissions, net and technology services
in isolation, we evaluate it in the broader context of our Adjusted Net Trading
Income.

Other, net. Other, net decreased $67.0 million, or 80.3%, to $16.4 million for
the year ended December 31, 2021, compared to $83.5 million for the year ended
December 31, 2020. The decrease was primarily due to a $56.2 million gain
recorded on the sale of MATCHNow in the third quarter 2020 (see Note 4 "Sale of
MATCHNow" of Part II Item 8 "Financial Statements and Supplementary Data" of
this Annual Report on Form 10-K for details on the MATCHNow sale).

Adjusted net trading income

Adjusted Net Trading Income decreased $361.5 million, or 15.9%, to $1,909.9
million for the year ended December 31, 2021, compared to $2,271.4 million for
the year ended December 31, 2020. This decrease was primarily attributable to
lower Trading Income, net (described above), driven by lower market volatility
during the year ended December 31, 2021 compared to the prior period, partially
offset by lower Brokerage, exchange, clearance fees and payments for order flow,
net (described below) incurred by Market Making. Average daily realized
volatility of the S&P 500 Index and average daily CVIX realized volatility
decreased 57.272% and 61.212%, respectively, compared to the prior period, while
average daily U.S. equity consolidated volumes increased 4.44.4%. Adjusted Net
Trading Income per day decreased $1.4 million, or 15.6%, to $7.6 million for the
year ended December 31, 2021, compared to $9.0 million for the year ended
December 31, 2020. The number of trading days was 252 days for the year ended
December 31, 2021 and 253 days for the year ended December 31, 2020. Adjusted
Net Trading Income is a non-GAAP measure. For a full description of Adjusted Net
Trading Income and a reconciliation of Adjusted Net Trading Income to trading
income, net, see "Non-GAAP Financial Measures and Other Items" in this "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations".

Functionnary costs

Our operating expenses decreased $41.9 million, or 2.3%, to $1,814.6 million for
the year ended December 31, 2021, compared to $1,856.5 million for the year
ended December 31, 2020. The decrease in operating expenses was primarily due to
lower Employee compensation and payroll taxes, Brokerage, exchange, clearance
fees and payments for order flow, net, and Debt issue cost related to debt
refinancing, prepayment, and commitment fees, offset by increases in Interest
and dividends expense and Termination of office leases as compared to the prior
year, described in more detail below.

Brokerage, exchange, clearance fees and payments for order flow, net. Brokerage,
exchange, clearance fees and payments for order flow, net, decreased $13.4
million, or 1.8%, to $745.4 million for the year ended December 31, 2021,
compared to $758.8 million for the year ended December 31, 2020. This decrease
was primarily attributable to decreases in market volatility in U.S. equities
markets offset by increases in volumes from our broker-dealer clients eligible
for payments for order flow, driven by higher participation of retail investors
in the market during the current year compared to the prior year. We evaluate
this category, representing direct costs associated with transacting our
business, in the broader context of our Adjusted Net Trading Income.

Communication and data processing. Communication and data processing expense
decreased $1.8 million, or 0.8%, to $212.0 million for the year ended December
31, 2021, compared to $213.8 million for the year ended December 31, 2020. This
decrease was primarily attributable to reductions in connectivity connections as
a result of an on-going effort to consolidate various communication and data
processing services and subscriptions.

Employee compensation and payroll taxes. Employee compensation and payroll taxes
decreased $17.3 million, or 4.4%, to $376.3 million for the year ended December
31, 2021, compared to $393.5 million for the year ended December 31, 2020. The
decrease in compensation levels was primarily attributable to a reduction in
accrued incentive compensation in the current period, relative to the prior
period, which is recorded at management's discretion and is generally accrued in
connection with the overall level of profitability, as well as a result of
one-time cash bonuses awarded in the first quarter of 2020 to certain employees
to mitigate the effects of the COVID-19 pandemic.

We have capitalized and therefore excluded employee compensation and benefits
related to software development of $35.8 million and $37.0 million for the years
ended December 31, 2021 and 2020, respectively.

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Interest and dividends expense. Interest and dividends expense increased $14.1
million, or 11.2%, to $139.7 million for the year ended December 31, 2021,
compared to $125.6 million for the year ended December 31, 2020. This increase
was primarily attributable to higher interest expense incurred on cash
collateral received driven by higher interest rates, as well as an increase in
securities lending transactions for the period compared to the same period
during the prior year. As indicated above, rather than analyzing interest and
dividends expense in isolation, we generally evaluate it in the broader context
of our Adjusted Net Trading Income.

Operations and administrative. Operations and administrative expense decreased
$6.4 million, or 6.8%, to $88.1 million for the year ended December 31, 2021,
compared to $94.6 million for the year ended December 31, 2020. The decrease was
primarily attributable to decreases in travel and entertainment due to the
on-going effects of the COVID-19 pandemic as well the on-going efforts to
consolidate office premises and professional services after the Acquisition of
KCG and the ITG Acquisition.

Depreciation and amortization. Depreciation increased $1.1 millioni.e. 1.6%, to $67.8 million for the year ended December 31, 2021compared to $66.7 million for the year ended December 31, 2020. This increase is mainly attributable to an increase in capital expenditures in telecommunications, networking and other assets.

Amortization of purchased intangibles and acquired capitalized software.
Amortization of purchased intangibles and acquired capitalized software
decreased $4.6 million, or 6.2%, to $69.7 million for the year ended December
31, 2021, compared to $74.3 million for the year ended December 31, 2020. This
decrease was primarily attributable to certain intangible assets being fully
amortized in 2020.

Termination of office leases. Termination of office leases was $28.1 million for
the year ended December 31, 2021, compared to $9.6 million for the year ended
December 31, 2020. Expense from termination of office leases resulted from the
impairment of operating lease right-of-use assets and leasehold improvements and
fixed assets for certain office space that we abandoned as part of our efforts
to integrate and consolidate office space, in connection with the Acquisition of
KCG and the ITG Acquisition. The 2021 expense included the impairment of the
lease and leasehold improvements of our former headquarters at One Liberty
Plaza.

Debt issue costs related to debt refinancing, prepayment and commitment fees.
Expense from debt issue costs related to debt refinancing, prepayment and
commitment fees decreased $22.3 million, or 77.2%, to $6.6 million for the year
ended December 31, 2021, compared to $28.9 million for the year ended December
31, 2020. The amount for the year ended December 31, 2020 was primarily driven
by the amortization of debt issue costs related to the addition of the Founder
Member Loan Facility in March 2020, which expired as of September 20, 2020,
costs incurred related to Amendment No. 2 to the Credit Agreement (as defined
below), and the acceleration of amortization as a result of the prepayment of
$288.5 million of long term borrowings made during the year ended December 31,
2020. See Note 10 "Borrowings" of Part II Item 8 "Financial Statements and
Supplementary Data" of this Annual Report on Form 10-K for additional details.

Transaction advisory fees and expenses. Transaction advisory fees and expenses
decreased $2.1 million, or 71.3%, to $0.8 million for the year ended December
31, 2021, compared to $2.9 million for the year ended December 31, 2020. The
expense incurred in 2020 was primarily related to the sale of MatchNOW. See Note
4 "Sale of MATCHNow" of this Annual Report on Form 10-K for additional details.

Financing interest expense on long term borrowings. Financing interest expense
on long-term borrowings decreased $7.8 million, or 8.9%, to $80.0 million for
the year ended December 31, 2021, compared to $87.7 million for the year ended
December 31, 2020. This decrease was primarily attributable to a decrease in
outstanding principal as a result of prepayments made during the year ended
December 31, 2020, as discussed in Note 10 "Borrowings" of Part II Item 8
"Financial Statements and Supplementary Data" of this Annual Report on Form
10-K, in addition to lower interest rates.

Provision for (profit) income taxes

We incur corporate tax at the U.S. federal income tax rate on our taxable
income, as adjusted for noncontrolling interest in Virtu Financial. Our income
tax expense reflects such U.S. federal income tax as well as taxes payable by
certain of our non-U.S. subsidiaries. Our provision for income taxes and
effective tax rates were $169.7 million, 17.0% for the year ended December 31,
2021, compared to a provision for income taxes of $261.9 million, 18.9% for the
year ended December 31, 2020.

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Year ended December 31, 2020 Compared to the year ended December 31, 2019

  For discussion around our results of operations for the year ended December
31, 2019 and for a comparison of our results of operations for the year ended
December 31, 2020 and year ended December 31, 2019, see Item 7, Management's
Discussion and Analysis of Financial Condition and Results of Operations, of our
Annual Report on Form 10-K for fiscal year ended December 31, 2020, filed with
the SEC on February 25, 2021.

Cash and capital resources

General

As of December 31, 2021, we had $1,071.5 million in Cash and cash equivalents.
This balance is maintained primarily to support operating activities for capital
expenditures and for short-term access to liquidity, and for other general
corporate purposes. As of December 31, 2021, we had borrowings under our prime
brokerage credit facilities of approximately $177.1 million, borrowings under
our broker dealer facilities of $58.0 million, short-term bank overdrafts of
$5.0 million, and long-term debt outstanding in an aggregate principal amount of
approximately $1,630.5 million.

The majority of our trading assets consist of exchange-listed marketable
securities, which are marked-to-market daily, and collateralized receivables
from broker-dealers and clearing organizations arising from proprietary
securities transactions. Collateralized receivables consist primarily of
securities borrowed, receivables from clearing houses for settlement of
securities transactions and, to a lesser extent, securities purchased under
agreements to resell. We actively manage our liquidity, and we maintain
significant borrowing facilities through the securities lending markets and with
banks and prime brokers. We have continually received the benefit of uncommitted
margin financing from our prime brokers globally. These margin facilities are
secured by securities in accounts held at the prime brokers. For purposes of
providing additional liquidity, we maintain a committed credit facility and an
uncommitted credit facility for our wholly-owned broker-dealer subsidiary, as
discussed in Note 10 "Borrowings" of Part II Item 8 "Financial Statements and
Supplementary Data" of this Annual Report on Form 10-K.

Short-term liquidity and capital resources

Based on our current level of operations, we believe our cash flows from
operations, available cash and cash equivalents, and available borrowings under
our broker-dealer credit facilities will be adequate to meet our future
liquidity needs for the next twelve months. We anticipate that our primary
upcoming cash and liquidity needs will be increased margin requirements from
increased trading activities in markets where we currently provide liquidity and
in new markets into which we plan to expand. We manage and monitor our margin
and liquidity needs on a real-time basis and can adjust our requirements both
intra-day and inter-day, as required.

We expect our principal sources of future liquidity to come from cash flows
provided by operating activities and financing activities. Certain of our cash
balances are insured by the Federal Deposit Insurance Corporation, generally up
to $250,000 per account but without a cap under certain conditions. From time to
time these cash balances may exceed insured limits, but we select financial
institutions deemed highly credit worthy to minimize risk. We consider highly
liquid investments with original maturities of less than three months, when
acquired, to be cash equivalents.

Long-term liquidity and capital resources

Our principal demand for funds beyond the next twelve months will be payments on
our long-term debt, operating lease payments, common stock repurchases under our
share repurchase program, and dividend payments. Based on our current level of
operations, we believe our cash flow from operations, and ability to raise
funding, notably the refinancing of our term loan in January 2022, will be
sufficient to fund capital demands. Our long-term debt was rated Ba3, and BB- by
Moody's Investors Service and Fitch Ratings, respectively, with both firms
giving an outlook of Stable.

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Agreements on tax claims

Generally, we are required under the tax receivable agreements entered into in
connection with our IPO to make payments to certain direct or indirect equity
holders of Virtu Financial that are generally equal to 85% of the applicable
cash tax savings, if any, that we realize as a result of favorable tax
attributes that are available to us as a result of the Reorganization
Transactions, for exchanges of membership interests for Class A Common Stock or
Class B Common Stock and payments made under the tax receivable agreements. We
will retain the remaining 15% of any such cash tax savings. We expect that
future payments to certain direct or indirect equity holders of Virtu Financial
described in Note 6 "Tax Receivable Agreements" of Part II Item 8 "Financial
Statements and Supplementary Data" of this Annual Report on Form 10-K are
expected to range from approximately $0.4 million to $22.0 million per year over
the next 15 years. Such payments will occur only after we have filed our U.S.
federal and state income tax returns and realized the cash tax savings from the
favorable tax attributes. We made our first payment of $7.0 million in February
2017, our second payment of $12.4 million in September 2018, our third payment
of $13.3 million in March 2020, and our fourth payment of $16.5 million in April
2021. Future payments under the tax receivable agreements in respect of
subsequent exchanges would be in addition to these amounts. We currently expect
to fund these payments from realized cash tax savings from the favorable tax
attributes.

Under the tax receivable agreements, as a result of certain types of
transactions and other factors, including a transaction resulting in a change of
control, we may also be required to make payments to certain direct or indirect
equity holders of Virtu Financial in amounts equal to the present value of
future payments we are obligated to make under the tax receivable agreements. We
would expect any acceleration of these payments to be funded from the realized
favorable tax attributes. However, if the payments under the tax receivable
agreements are accelerated, we may be required to raise additional debt or
equity to fund such payments. To the extent that we are unable to make payments
under the tax receivable agreements for any reason (including because our
Amended Credit Agreement restricts the ability of our subsidiaries to make
distributions to us) such payments will be deferred and will accrue interest
until paid.

Regulatory capital requirements

Our principal U.S. subsidiary, Virtu Americas LLC ("VAL") is subject to separate
regulation and capital requirements in the U.S. and other jurisdictions. VAL is
a registered U.S. broker-dealer, and its primary regulators include the SEC and
the Financial Industry Regulatory Authority ("FINRA").

The SEC and FINRA impose rules that require notification when regulatory capital
falls below certain pre-defined criteria. These rules also dictate the ratio of
debt-to-equity in the regulatory capital composition of a broker-dealer and
constrain the ability of a broker-dealer to expand its business under certain
circumstances. If a firm fails to maintain the required regulatory capital, it
may be subject to suspension or revocation of registration by the applicable
regulatory agency, and suspension or expulsion by these regulators could
ultimately lead to the firm's liquidation. Additionally, certain applicable
rules impose requirements that may have the effect of prohibiting a
broker-dealer from distributing or withdrawing capital and requiring prior
notice to and/or approval from the SEC and FINRA for certain capital
withdrawals. VAL is also subject to rules set forth by NYSE and is required to
maintain a certain level of capital in connection with the operation of its
designated market maker business.

Our Canadian subsidiaries, Virtu ITG Canada Corp. and Virtu Financial Canada
ULC, are subject to regulatory capital requirements and periodic requirements to
report their regulatory capital and submit other regulatory reports set forth by
the Investment Industry Regulatory Organization of Canada. Our Irish
subsidiaries, Virtu Financial Ireland Limited ("VFIL") and Virtu ITG Europe
Limited ("VIEL") are regulated by the Central Bank of Ireland as Investment
Firms and in accordance with European Union law are required to maintain a
minimum amount of regulatory capital based upon their positions, financial
conditions, and other factors. In addition to periodic requirements to report
their regulatory capital and submit other regulatory reports, VFIL and VIEL are
required to obtain consent prior to receiving capital contributions or making
capital distributions from their regulatory capital. Failure to comply with
their regulatory capital requirements could result in regulatory sanction or
revocation of their regulatory license. Virtu ITG UK Limited is regulated by the
Financial Conduct Authority in the United Kingdom and is subject to similar
prudential capital requirements. Virtu ITG Australia Limited, Virtu ITG Hong
Kong Limited, and Virtu ITG Singapore Pte Limited are also subject to local
regulatory capital requirements and are regulated by the Australian Securities
and Investments Commission, the Securities and Futures Commission of Hong Kong,
and the Monetary Authority of Singapore, respectively.

See Note 22 “Regulatory Requirements” in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for a discussion of the regulatory capital requirements of our regulated subsidiaries.

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Broker credit facilities, short-term bank loans and prime brokerage credit facilities

We maintain various broker-dealer facilities and short-term credit facilities as
part of our daily trading operations. See Note 10 "Borrowings" of Part II Item 8
"Financial Statements and Supplementary Data" of this Annual Report on Form 10-K
for details on our various credit facilities. As of December 31, 2021, the
outstanding principal balance on our broker-dealer facilities was $58.0 million
and the outstanding aggregate short-term credit facilities with various prime
brokers and other financial institutions from which the Company receives
execution or clearing services was approximately $177.1 million, which was
netted within Receivables from broker-dealers and clearing organizations on the
Consolidated Statements of Financial Condition of Part II Item 8 "Financial
Statements and Supplementary Data" of this Annual Report on Form 10-K.

On March 10, 2020, a broker-dealer subsidiary of the Company entered into a
short-term loan arrangement with Jefferies Financial Group, Inc., as lender, for
a $20 million demand loan (the "Demand Loan") repayable no later than ninety
(90) days after the date of borrowing. The Demand Loan bore interest at a rate
of 10% per annum, increased by 2.0% with respect to any principal amounts not
paid when due and payable. The Demand Loan was repaid in full as of April 17,
2020.

On March 20, 2020, a broker-dealer subsidiary of the Company entered into a loan
agreement (the "Founder Member Loan Facility") with TJMT Holdings LLC (the
"Founder Member"), as lender and administrative agent, providing for unsecured
term loans from time to time (the "Founder Member Loans") in an aggregate
original principal amount not to exceed $300 million. The Founder Member Loans
were available to be borrowed in one or more borrowings on or after March 20,
2020 and prior to September 20, 2020, though no borrowings were made during such
period, which is now expired. The Founder Member is an affiliate of Mr. Vincent
Viola, the Company's founder and Chairman Emeritus. Upon the execution of and in
consideration for the Lender's commitments under the Founder Member Loan
Facility, the Company delivered to the Founder Member a warrant to purchase
shares of the Company's Class A Common Stock, as described below.

On March 20, 2020, in connection with and in consideration of the Founder
Member's commitments under the Founder Member Loan Facility, the Company
delivered to the Founder Member a warrant (the "Warrant") to purchase shares of
the Company's Class A Common Stock. Pursuant to the Warrant, the Founder Member
was entitled to purchase up to 3,000,000 shares of Class A Common Stock on or
after May 22, 2020 up to and including January 15, 2022. If at any time during
the term of the Founder Member Loan Facility, the Founder Member Loans equal to
or greater than $100 million had remained outstanding for a certain period of
time specified in the Warrant, the number of shares would have increased to
10,000,000. The exercise price per share of the Class A Common Stock issuable
pursuant to the Warrant was $22.98. The Warrant was exercised on December 17,
2021 for the full 3,000,000 shares of the Company's Class A Common Stock. The
Warrant and Class A Common Stock issued pursuant to the Warrant were offered,
issued and sold, in reliance on the exemption from the registration requirements
of the Securities Act, set forth under Section 4(a)(2) of the Securities Act
relating to sales by an issuer not involving any public offering.

credit agreement

In connection with the ITG Acquisition, Virtu Financial, VFH and the Acquisition
Borrower entered into the Credit Agreement, with the lenders party thereto,
Jefferies Finance LLC, as administrative agent and Jefferies Finance LLC and RBC
Capital Markets, as joint lead arrangers and joint bookrunners.

The Acquisition Credit Agreement provided (i) the First Lien Term Loan Facility
(as defined below) in an aggregate principal amount of $1,500 million, drawn in
its entirety on the ITG Closing Date, of which approximately $404.5 million was
borrowed by VFH to repay all amounts outstanding under a previous term loan
facility and the remaining approximately $1,095 million was borrowed by the
Acquisition Borrower to finance the consideration and fees and expenses paid in
connection with the ITG Acquisition, and (ii) a $50.0 million senior secured
first lien revolving facility to VFH (the "First Lien Revolving Facility"), with
a $5.0 million letter of credit sub-facility and a $5.0 million swing-line
sub-facility. After the ITG Closing Date, VFH assumed the obligations of the
Acquisition Borrower in respect of the acquisition term loans.

On October 9, 2019, VFH entered into an amendment ("Amendment No. 1"), which
amended the Acquisition Credit Agreement dated as of March 1, 2019, to, among
other things, provide for $525.0 million in aggregate principal amount of
incremental term loans (the "Incremental Term Loans"), and amend the related
collateral agreement.

On March 2, 2020, VFH entered into a second amendment ("Amendment No. 2"), which
further amended the Credit Agreement (as amended by Amendment No. 1 and
Amendment No. 2, the "Amended Credit Agreement") to, among other things, reduce
the interest rate spread over adjusted LIBOR or the alternate base rate by 0.50%
per annum and eliminated any step-down in the spread based on VFH's first lien
leverage ratio. The term loan borrowings and revolver borrowings under the
Amended Credit Agreement bear interest at a per annum rate equal to, at the
Company's election, either (i) the greatest of (a)
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the prime rate in effect, (b) the greater of (1) the federal funds effective
rate and (2) the overnight bank funding rate, in each case plus 0.50%, (c) an
adjusted LIBOR rate for a Eurodollar borrowing with an interest period of one
month plus 1.00% and (d) 1.00%, plus, in each case, 2.00%, or (ii) the greater
of (x) an adjusted LIBOR rate for the interest period in effect and (y) 0%,
plus, in each case, 3.00%. In addition, a commitment fee accrues at a rate of
0.50% per annum on the average daily unused amount of the First Lien Revolving
Facility, with step-downs to 0.375% and 0.25% per annum based on VFH's first
lien leverage ratio, and is payable quarterly in arrears.

Under the Amended Credit Agreement, the term loans will mature on March 1, 2026.
The term loans amortize in annual installments equal to 1.0% of the original
aggregate principal amount of the term loans. The revolving commitments will
terminate on March 1, 2022.

The First Lien Revolving Facility under the Amended Credit Agreement is subject
to a springing net first lien leverage ratio which may spring into effect as of
the last day of a fiscal quarter if usage of the aggregate revolving commitments
exceeds a specified level as of such date. VFH is also subject to contingent
principal prepayments based on excess cash flow and certain other triggering
events. Borrowings under the Credit Agreement are guaranteed by Virtu Financial
and VFH's material non-regulated domestic restricted subsidiaries and secured by
substantially all of the assets of VFH and the guarantors, in each case, subject
to certain exceptions.

The Amended Credit Agreement contains certain customary covenants and events of
default, including relating to a change of control. If an event of default
occurs and is continuing, the lenders under the Amended Credit Agreement will be
entitled to take various actions, including the acceleration of amounts
outstanding under the Amended Credit Agreement and all actions permitted to be
taken by a secured creditor in respect of the collateral securing the
obligations under the Amended Credit Agreement.

In October 2019, we entered into a five-year $525.0 million floating-to-fixed
interest rate swap agreement. In January 2020, we entered into a five-year
$1,000.0 million floating-to-fixed interest rate swap agreement. These two
interest rate swaps met the criteria to be considered and were designated as
qualifying cash flow hedges under ASC 815 in the first quarter of 2020, and they
effectively fix interest payment obligations on $525.0 million and $1,000.0
million of principal under the First Lien Term Loan Facility at rates of 4.3%
and 4.4% through September 2024 and January 2025, respectively, based on the
interest rates set forth in the Amended Credit Agreement. In April 2021, each of
the swap agreements described above was novated to another counterparty and
amended in connection with such novation. The amendments included certain
changes to collateral posting obligations and also had the effect of increasing
the effective fixed interest payment obligations to rates of 4.5%, with respect
to the earlier maturing swap arrangement, and 4.6% with respect to the later
maturing swap arrangement.

In January 2022, we entered into a new senior secured first lien term loan for
$1,800.0 million of principal. The proceeds from this new loan were primarily
used to repay the First Lien Term Loan Facility. Refer to Note 26 "Subsequent
Events" of Part II Item 8 "Financial Statements and Supplementary Data" of this
Annual Report on Form 10-K.

We complied with all applicable covenants under the amended credit agreement at December 31, 2021.

Cash flow

Our primary sources of liquidity are cash flow from the operations of our subsidiaries, our broker credit facilities (as described above), margin funding provided by our prime brokers and cash on hand.

The table below summarizes our main sources and uses of cash for the years ended December 31, 20212020 and 2019.

                                                                      Years Ended December 31,
Net cash provided by (used in):                             2021                 2020                2019
Operating activities                                   $ 1,171,626          $ 1,060,884          $ 168,771
Investing activities                                       (87,349)              (2,559)          (899,643)
Financing activities                                      (957,859)            (839,918)           769,580
Effect of exchange rate changes on cash and cash
equivalents                                                (12,470)              15,318             (1,475)
Net increase in cash and cash equivalents              $   113,948          $   233,725          $  37,233



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Operational activities

Net cash provided by operating activities was $1,171.6 million for the year
ended December 31, 2021, compared to net cash provided by operating activities
of $1,060.9 million for the year ended December 31, 2020. The increase in net
cash provided by operating activities was primarily attributable to an increase
in Securities loaned, a decrease in Receivables from broker-dealers and clearing
organizations, and an increase in trading liabilities, at fair value, offset by
an increase in trading assets, at fair value, and a decrease in Payables to
broker-dealers and clearing organizations for the year ended December 31, 2021
compared to the prior period.

Investing Activities

Net cash used in investing activities was $87.3 million for the year ended
December 31, 2021, compared to net cash used in investing activities of $2.6
million for the year ended December 31, 2020. The increase in cash used in
investing activities for the year ended December 31, 2021 was primarily
attributable to an increase in contributions to our strategic investments in the
current year, shown in Other investing activities on our consolidated statement
of cash flows, offset by the sale of MATCHNow in the prior year.

Fundraising activities

Net cash used in financing activities was $957.9 million for the year ended
December 31, 2021, while net cash used in financing activities was $839.9
million for the year ended December 31, 2020. The cash used in financing
activities for the year ended December 31, 2021 was primarily attributable to
$548.0 million in dividends to stockholders and distributions made to
noncontrolling interests and $427.5 million in purchases of treasury stock,
partially offset by the proceeds of $68.9 million of Warrants exercised. The
cash used in financing activities of $839.9 million during the same period of
2020 primarily reflects net dividends to stockholders and distributions to
noncontrolling interests and repayment of long-term borrowings.

Share buyback program

On February 8, 2018, the Company's Board of Directors authorized a share
repurchase program of up to $50.0 million
in Class A Common Stock and Virtu Financial Units, which was expanded to $100.0
million on July 27, 2018. The Company repurchased approximately 2.6 million
shares of Class A Common Stock and Virtu Financial Units for approximately $65.9
million under this program, which expired on September 30, 2019.

On November 6, 2020, the Company's Board of Directors authorized a new share
repurchase program of up to $100.0 million in Class A common stock and Virtu
Financial Units by December 31, 2021.

At February 11, 2021the Board of Directors of the Company authorized the expansion of the Company’s share buyback program, increasing the total amount authorized by $70.0 million for $170.0 million in Class A common shares and in Virtu financial units up to December 31, 2021.

On May 4, 2021, the Company's Board of Directors authorized the expansion of the
Company's share repurchase program, increasing the total authorized amount by
$300 million to $470 million in Class A Common Stock and Virtu Financial Units
and extending the duration of the program through May 4, 2022.

On November 3, 2021, the Company's Board of Directors authorized the expansion
of the Company's current share repurchase program, increasing the total
authorized amount by $750 million to $1,220 million and extended the duration
through November 3, 2023. Since the inception of the program through November 3,
2021.

The share repurchase program authorizes the Company to repurchase shares from
time to time in open market transactions, privately negotiated transactions or
by other means. Repurchases are also permitted to be made under Rule 10b5-1
plans. The timing and amount of repurchase transactions are determined by the
Company's management based on its evaluation of market conditions, share price,
cash sources, legal requirements and other factors. From the inception of the
program through December 31, 2021, the Company repurchased approximately 16.1
million shares of Class A Common Stock and Virtu Financial Units for
approximately $439.1 million. As of December 31, 2021, the Company has
approximately of $780.9 million remaining capacity for future purchases of
shares of Class A Common Stock and Virtu Financial Units under the program.



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Contractual obligations

Our expected material cash requirements include the following contractual obligations:

Debt

As of December 31, 2021, we had $1,599.8 million of outstanding principal on our
First Lien Term Loan Facility. Subsequent to year end, we completed the issuance
of a $1.8 billion senior secured first lien term loan due in 2029 ("New Term
Loan"), and proceeds were used to repay the outstanding balance on the First
Lien Term Loan Facility. See Note 26 "Subsequent Events" in Part II Item 8
"Financial Statements and Supplementary Data" of this Annual Report on Form 10-K
for more details on this transaction. Additionally, $30.7 million of long-term
debt related to the SBI bonds is due in 2023. See Note 10 "Borrowings" in Part
II Item 8 "Financial Statements and Supplementary Data" of this Annual Report on
Form 10-K for more details.

Leases

We have lease agreements, primarily for office space, technology and equipment. From December 31, 2021we have had $66.6 million operating lease payments and $4.6 million finance lease payments at less than twelve months, and $268.1 million operating lease payments and $2.2 million financing rents due in more than twelve months

Agreement on tax claims

The contractual obligation table above excludes contractual amounts owed under
the tax receivable agreement as the ultimate amount and timing of the amounts
due are not presently known. As of December 31, 2021, a total of $259.3 million
has been recorded for amounts due pursuant to tax receivable agreements in the
consolidated financial statements representing management's best estimate of the
amounts currently expected to be owed under the tax receivable agreement, as
savings are realized as a result of favorable tax attributes.

Significant Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements, as well as the reported
amounts of revenue and expenses during the applicable reporting period. Critical
accounting policies are those that are the most important portrayal of our
financial condition, results of operations and cash flows, and that require our
most difficult, subjective and complex judgments as a result of the need to make
estimates about the effect of matters that are inherently uncertain.

While our significant accounting policies are described in more detail in the
notes to our consolidated financial statements, our most critical accounting
policies are discussed below. In applying such policies, we must use some
amounts that are based upon our informed judgments and best estimates.
Estimates, by their nature, are based upon judgments and available information.
The estimates that we make are based upon historical factors, current
circumstances and the experience and judgment of management. We evaluate our
assumptions and estimates on an ongoing basis. Our actual results may differ
from these estimates under different assumptions or conditions.

Valuation of Financial Instruments

Due to the nature of our operations, substantially all of our financial
instrument assets, comprised of financial instruments owned, securities
purchased under agreements to resell, and receivables from brokers, dealers and
clearing organizations are carried at fair value based on published market
prices and are marked to market daily, or are assets which are short-term in
nature and are reflected at amounts approximating fair value. Similarly, all of
our financial instrument liabilities that arise from financial instruments sold
but not yet purchased, securities sold under agreements to repurchase,
securities loaned, and payables to brokers, dealers and clearing organizations
are short-term in nature and are reported at quoted market prices or at amounts
approximating fair value.

Fair value is defined 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. Financial
instruments measured and reported at fair value are classified and disclosed in
one of the following categories based on inputs:

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Level 1 – Unadjusted quoted prices in active markets accessible at the measurement date for identical assets or liabilities without restriction;

Level 2 - Quoted prices in markets that are not active and financial instruments
for which all significant inputs are observable, either directly or indirectly;
or

Level 3 – Prices or valuations requiring inputs that are both significant to the fair value measurement and unobservable

The fair values for substantially all of our financial instruments owned and
financial instruments sold but not yet purchased are based on observable prices
and inputs and are classified in levels 1 and 2 of the fair value hierarchy.
Instruments categorized within level 3 of the fair value hierarchy are those
which require one or more significant inputs that are not observable. Estimating
the fair value of level 3 financial instruments requires judgments to be made.
Due to the relative immateriality of our financial instruments classified as
level 3, we do not believe that a significant change to the inputs underlying
the fair value of our level 3 financial instruments would have a material impact
on our consolidated financial statements See Note 11 "Financial Assets and
Liabilities" of Part II Item 8 "Financial Statements and Supplementary Data" of
this Annual Report on Form 10-K for further information about fair value
measurements.

Revenue Recognition

Trading Income, Net

Trading income, net, consists of trading gains and losses that are recorded on a
trade date basis and reported on a net basis. Trading income, net, is comprised
of changes in fair value of financial instruments owned and financial
instruments sold, not yet purchased assets and liabilities (i.e., unrealized
gains and losses) and realized gains and losses on equities, fixed income
securities, currencies and commodities.

Interest and dividend income/Interest and dividend expense

Interest income and interest expense are accrued in accordance with contractual
rates. Interest income consists of income earned on collateralized financing
arrangements and on cash held by brokers. Interest expense includes interest
expense from collateralized transactions, margin and related short-term lending
facilities. Dividends are recorded on the ex-dividend date, and interest is
recognized on an accrual basis.

Commissions, net services and technology

Commissions, net, which primarily comprise commissions and commission
equivalents earned on institutional client orders, are recorded on a trade date
basis, which is the point at which the performance obligation to the customer is
satisfied. Under a commission management program, we allow institutional clients
to allocate a portion of their gross commissions to pay for research and other
services provided by third parties. As we act as an agent in these transactions,
we record such expenses on a net basis within Commissions, net and technology
services in the Consolidated Statements of Comprehensive Income.

Workflow technology revenues consist of order and trade execution management and
order routing services we provide through our front-end workflow solutions and
network capabilities.

We provide trade order routing from our execution management system ("EMS") to
our execution services offerings, with each trade order routed through the EMS
representing a separate performance obligation that is satisfied at a point in
time. A portion of the commissions earned on the trade is then allocated to
Workflow Technology based on the stand-alone selling price paid by third-party
brokers for order routing. The remaining commission is allocated to commissions,
net using a residual allocation approach. Commissions earned are fixed and
revenue is recognized on the trade date.

We participate in commission share arrangements, where trade orders are routed
to third-party brokers from our EMS and our order management system ("OMS").
Commission share revenues from third-party brokers are generally fixed and
revenue is recognized at a point in time on the trade date.

We also provide OMS and related software products and connectivity services to
customers and recognize license fee revenues and monthly connectivity fees.
License fee revenues, generated for the use of our OMS and other software
products, are fixed and recognized at the point in time at which the customer is
able to use and benefit from the license. Connectivity
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revenue is variable in nature, depending on the number of live connections, and is recognized over time on a monthly basis using a time-based measure of progress.

Analytics revenues are earned from providing customers with analytics products
and services, including trading and portfolio analytics tools. We provide
analytics products and services to customers and recognize subscription fees,
which are fixed for the contract term, based on when the products and services
are delivered. Analytics services can be delivered either over time (when
customers are provided with distinct ongoing access to analytics data) or at a
point in time (when reports are only delivered to the customer on a periodic
basis). Over time performance obligations are recognized using a time-based
measure of progress on a monthly basis, since the analytics products and
services are continually provided to the client. Point in time performance
obligations are recognized when the analytics reports are delivered to the
client.

Analytics products and services can also be paid for through variable bundled
arrangements with trade execution services. Customers agree to pay for analytics
products and services with commissions generated from trade execution services,
and commissions are allocated to the analytics performance obligation(s) using:

(i)the commission value for each customer for the products and services it
receives, which is priced using the value for similar stand-alone subscription
arrangements; and
(ii)a calculated ratio of the commission value for the products and services
relative to the total amount of commissions generated from the customer.

For these bundled commission arrangements, the allocated commissions to each
analytics performance obligation are then recognized as revenue when the
analytics product is delivered, either over time or at a point in time. These
allocated commissions may be deferred if the allocated amount exceeds the amount
recognizable based on delivery.

Share-based compensation

We account for share-based compensation transactions with employees under the
provisions of the Financial Accounting Standards Board's Accounting Standards
Codification ("ASC") 718, Compensation: Stock Compensation. Share-based
compensation transactions with employees are measured based on the fair value of
equity instruments issued.

Share-based awards issued for compensation in connection with or subsequent to
the Reorganization Transactions and the IPO pursuant to our Amended and Restated
2015 Management Incentive Plan, and assumed pursuant to the Amended and Restated
ITG 2007 Equity Plan, were in the form of stock options, Class A Common Stock,
restricted stock awards ("RSAs") and restricted stock units ("RSUs"). 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 RSUs
is determined based on the volume weighted average price for the three days
preceding the grant. With respect to the RSUs, we account for forfeitures as
they occur. The fair value of RSAs is determined based on the closing price as
of the date of grant. The fair value of share-based awards granted to employees
is expensed based on the vesting conditions and is recognized on a straight-line
basis over the vesting period, or, in the case of RSAs subject to performance
conditions, from the date that achievement becomes probable through the
remainder of the vesting period. The assessment of the performance condition
becomes certain within the year of grant. At year end there is no future
assessment that would affect grants with a performance condition. We record as
treasury stock shares repurchased from employees for the purpose of settling tax
liabilities incurred upon the issuance of common stock, the vesting of RSUs or
the exercise of stock options.

Income taxes

We conduct our business globally through a number of separate legal entities.
Consequently, our effective tax rate is dependent upon the geographic
distribution of our earnings or losses and the tax laws and regulations of each
legal jurisdiction in which we operate.

Certain of our wholly owned subsidiaries are subject to income taxes in foreign
jurisdictions. 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. A deferred tax asset is recognized
only to the extent that it is probable that future taxable income will be
available against which the asset can be utilized.

We are currently subject to audit in various jurisdictions, and these
jurisdictions may assess additional income tax liabilities against us.
Developments in an audit, litigation, or the relevant laws, regulations,
administrative practices, principles, and interpretations could have a material
effect on our operating results or cash flows in the period or periods for which
that development occurs, as well as for prior and subsequent periods. We
recognize the tax benefit from an uncertain tax position in
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accordance with ASC 740, Income Taxes, only if it is more likely than not that
the tax position will be sustained on examination by the applicable taxing
authority, including resolution of the appeals or litigation processes, based on
the technical merits of the position. The tax benefits recognized in the
consolidated financial statements from such a position are measured based on the
largest benefit for each such position that has a greater than fifty percent
likelihood of being realized upon ultimate resolution. Many factors are
considered when evaluating and estimating the tax positions and tax benefits.
Such estimates involve interpretations of regulations, rulings, case law, etc.
and are inherently complex. Our 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. We believe the judgments and
estimates discussed above are reasonable. However, if actual results are not
consistent with our estimates or assumptions, we may be exposed to losses or
gains that could be material.

Agreements on tax claims

We are required under the tax receivable agreements entered into in connection
with our IPO to make payments to certain direct or indirect equity holders of
Virtu Financial that are generally equal to 85% of the applicable cash tax
savings, if any, that we realize as a result of favorable tax attributes that
are available to us as a result of the Reorganization Transactions, for
exchanges of membership interests for Class A Common Stock or Class B Common
Stock and payments made under the tax receivable agreements. An exchange of
membership interests by the Virtu Members for Class A Common Stock or Class B
Common Stock (an "Exchange") during the year will give rise to favorable tax
attributes that may generate cash tax savings specific to the Exchange, to be
realized over a specific period of time (generally 15 years). At each Exchange,
we estimate the cumulative tax receivable agreement obligations to be reported
on the consolidated financial statements. The tax attributes are computed as the
difference between our basis in the partnership interest ("outside basis") as
compared to our share of the adjusted tax basis of partnership property ("inside
basis"), at the time of each Exchange. The computation of inside basis requires
judgments in estimating the components included in the inside basis as of the
date of the Exchange (such as, cash received on hypothetical sale of assets,
allocation of gain/loss at the time of the Exchange taking into account complex
partnership tax rules). In addition, we estimate the period of time that may
generate cash tax savings of such tax attributes and the realizability of the
tax attributes.

Good will and intangible assets

Goodwill represents the excess of the purchase price over the underlying net
tangible and intangible assets of our acquisitions. Goodwill is not amortized
but is assessed for impairment on an annual basis and between annual assessments
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. Goodwill is assessed at the reporting unit level, which
is defined as an operating segment or one level below the operating segment.

When assessing impairment, an entity may perform an initial qualitative
assessment, under which it assesses qualitative factors to determine whether it
is more likely than not that the fair value of a reporting unit is less than its
carrying amount, including goodwill. In evaluating whether it is more likely
than not that the fair value of a reporting unit is less than its carrying
amount, an entity shall assess relevant events and circumstances, including the
following:

•general economic conditions;
•limitations on accessing capital;
•fluctuations in foreign exchange rates or other developments in equity and
credit markets;
•industry and market considerations such as a deterioration in the environment
in which an entity operates, an increased competitive environment, a decline in
market-dependent multiples or metrics (considered in both absolute terms and
relative to peers), a change in the market for an entity's products or services,
or a regulatory or political development;
•cost factors such as increases in raw materials, labor, or other costs that
have a negative effect on earnings and cash flows;
•overall financial performance such as negative or declining cash flows or a
decline in actual or planned revenue or earnings compared with actual and
projected results of relevant prior periods;
•other relevant entity-specific events such as changes in management, key
personnel, strategy, or customers, contemplation of bankruptcy, or litigation.

If, after evaluating all of these events or circumstances, an entity determines that it is no more likely than not that the fair value of a reporting unit is less than its carrying amount, no further impairment of goodwill is necessary.

If further testing is necessary, the fair value of the reporting unit is
compared to its carrying value; if the fair value of the reporting unit is less
than its carrying value, a goodwill impairment loss is recorded, equal to the
excess of the reporting unit's carrying amount over its fair value (not to
exceed the total goodwill allocated to that reporting unit). our estimate of
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goodwill impairment, if indicated based on the results of the qualitative assessment, is highly dependent on our estimate of a reporting unit’s fair value.

We test goodwill for impairment on an annual basis beginning on July, 1st and provisionally when certain events or circumstances exist. In the assessment of impairment at July 1, 2021, we performed a qualitative assessment as described above for each business unit. No impairment of goodwill has been identified.

Valuation of intangible assets involves the use of significant estimates and
assumptions with respect to the timing and amounts of revenue growth rates,
customer attrition rates, future tax rates, royalty rates, contributory asset
charges, discount rate and the resulting cash flows. We amortize finite-lived
intangible assets over their estimated useful lives. Our largest finite-lived
intangible asset is customer relationships, which is being amortized over an
estimated useful life of ten years. Had we used a shorter estimated useful life
of seven years, the Company would have recorded an additional $16.5 million of
amortization expense for the years ended 2021 and 2020, and an additional $7.0
million of expense for the year ended 2019. We test finite-lived intangible
assets for impairment when impairment indicators are present, and if impaired,
they are written down to fair value.

Recent accounting pronouncements

For a discussion of recently issued accounting developments and their impact or
potential impact on our consolidated financial statements, see Note 2 "Summary
of Significant Accounting Policies" of Part II Item 8 "Financial Statements and
Supplementary Data" of this Annual Report on Form 10-K.

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