Note 1: Organization and Description of the Business Note 2: Significant Accounting Policies Note 3: Securities Owned and Securities Sold, Not Yet Purchased Note 4: Receivable From/Payable to Brokers and Dealers Note 5: Goodwill and Intangible Assets Note 6: Investment in Deephaven Sponsored Fund Note 7: Significant Customers Note 8: International Charges Note 9: Writedown of Assets and Lease Loss Accrual Note 10: Fixed Assets and Leasehold Improvements Note 11: Commitments and Contingent Liabilities Note 12: Earnings Per Share Note 13: Employee Benefit Plan Note 14: Income Taxes Note 15: Long-Term Incentive Plans Note 16: Financial Instruments With Off-Balance Sheet Risk and Concentrations of Credit Risk Note 17: Net Capital Requirements Note 18: Subsequent Events Note 19: Business Segments Note 20: Condensed Financial Statements of Knight Trading Group, Inc. (Parent Only) Note 12: EARNINGS PER SHARE Basic earnings per common share (“EPS”) have been calculated by dividing net income by the weighted average shares of Class A Common Stock outstanding during each respective period. Diluted EPS reflects the potential reduction in EPS using the treasury stock method to reflect the impact of common share equivalents if stock awards such as stock options and restricted stock were exercised or converted into common stock. The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the years ended December 31, 2002, 2001 and 2000: For the year ended December 31, 2002, 1,374,689 shares of common stock equivalents were not included in the calculation of weighted average shares for diluted EPS because the Company incurred losses during the period and the effect of their inclusion would be anti-dilutive.