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Howard Lutnick, Chairman & CEORaymond James 32nd Annual Institutional Investors Conference
March 7, 2011
Notes & Disclaimers
2
Discussion of Forward-Looking Statements by BGC Partners
Information in this document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward looking statements include statements about the outlook
and prospects for the Company and for its industry as well as statements about its future financial and operating performance. Such statements
are based upon current expectations that involve risks and uncertainties. Actual results, performance or achievements could differ materially
from those contemplated, expressed or implied because of a number of risks and uncertainties that include, but are not limited to, the risks and
uncertainties identified in BGC Partners’ filings with the U.S. Securities and Exchange Commission. The Company believes that all forward-
looking statements are based upon reasonable assumptions when made. However, BGC Partners cautions that it is impossible to predict actual
results or outcomes or the effects of risks, uncertainties or other factors on anticipated results or outcomes and that accordingly you should
not place undue reliance on these statements. Forward-looking statements speak only as of the date when made and the Company undertakes
no obligation to update these statements in light of subsequent events or developments. Please refer to the complete disclaimer with respect to
forward looking statements and the risk factors set forth in BGC Partners’ public filings which are incorporated into this document by
reference.
Note Regarding Financial Tables and Metrics
An excel file with the Company’s quarterly financial results and metrics from full year 2008 through the fourth quarter of 2010 is accessible at
the “Investor Relations” section of http://www.bgcpartners.com. It is also available directly at http://www.bgcpartners.com/ir-news.
Distributable Earnings
This presentation should be read in conjunction with BGC’s most recent financial results press release. Unless otherwise stated, throughout this
presentation we refer to our results only on a distributable earnings basis. For a complete description of this term and how, when and why
management uses it, see the final page of this presentation. For both this description and a reconciliation to GAAP, see the sections of BGC’s
most recent financial results press release entitled “Distributable Earnings,” “Distributable Earnings Results Compared with GAAP Results”, and
“Reconciliation of GAAP Income to Distributable Earnings”, which are incorporated by reference, and available in the “Investor Relations”
section of our website at http://www.bgcpartners.com.
Overview
4
BGC Partners – A Leading Inter-Dealer Broker
Banks Trading FirmsI-Banks
Corporations InvestorsGovernments
Corporations InvestorsGovernments
Banks Trading FirmsI-Banks
5
Business Overview
5
Key products include:
• Rates
• Credit
• Foreign Exchange
• Equity Derivatives
• Other1,705 brokers and salespeopleOver 200 desksIn 24 cities
Develops and markets real-time proprietary pricing data
Provider of customized screen-based solutions which enable clients to develop electronic marketplaces
Voice / Hybrid Broking Electronic BrokingMarket Data/Software Solutions
Key products include:
• Treasuries
• Credit Default Swaps
• FX Derivatives
• European Government Bonds
• Spot FX
• Canadian SovereignsProprietary network
connected to the global financial communitySubstantial investments in
creating proprietary technology / network
6
Solid Business with Significant Opportunities
Diversified revenues by geography & product
Well positioned to take advantage of current market dynamics
Accretively hiring and acquiring
Investing for broker productivity & fully electronic trading
Highly leverageable business model
Deep and experienced management team with ability to attract and
retain key talent
Intermediary-oriented, low-risk business model
Attractive dividend yield
EMEA
56.8%
Americas
27.5%
APAC
15.7%
7
4Q2010 Global Revenue Breakdown
New York
Chicago
Toronto
Mexico City
London
Copenhagen
ParisNyon
Istanbul
Beijing Seoul Tokyo
Sydney
Singapore
Hong Kong
Johannesburg
São PauloRio de Janeiro
Moscow
Americas Revenue up 10.5% y-o-y
Asia Pacific Revenue up 4.5% y-o-y
Europe, Middle East & Africa Revenue up 7.1% y-o-y
Sarasota
4Q2010 Revenues
Dubai
Aspen
West Palm Beach
Garden City
Note: Based on Distributable Earnings. Totals may not sum due to rounding. See the second to last page of this presentation for average exchange rates
for the period.
8
Rates 42.1%
Credit 21.8%
Foreign Exchange
14.9%
Equities and Other Asset
Classes 13.5%
Market data & software
2.3%
Fees from related parties, interest & other
income5.4%
4Q2010 Revenue Breakdown by Product
Up 16.1% y-o-y
Revenues related to fully
electronic trading* =
10.0% of total DE
revenues in 4Q2010 vs.
9.2% in 4Q2009
* This includes fees captured in both the “total brokerage revenues” and “ fees from related party” line items related to fully electronic trading.
Note: percentages may not sum to 100% due to rounding.
9
Significant Leverage Through Scale and Technology
Hybrid Brokerage:
Hire and Acquire
Market Data & Software:
Distribute
Fully Electronic:
Convert
Pre-Tax Distributable Earnings Contribution
30%
Incremental
Margin
35-50%
or more
Incremental
Margin
45-75%
Incremental
Margin
Note: Incremental margin estimates based on BGC’s historical financial performance.
Strong Performance
-10%
0%
10%
20%
30%
40%
50% 45%
35%
15%
-6%
31%
3%
37%
20%
14%
Solid Revenue Growth Across Most Products and
Geographies
11
FY 2010 Revenue Growth
$200
$225
$250
$275
$300
$325
$350
$375
$400
Q4 2009 Q4 2010 Q1 2010 Q1 2011 low Q1 2011 high
$300
$322
$349$355
$370
($ m
illio
ns)
12
BGC Revenue Trend (millions)
Outlook
Up 2% - 6% y-o-y
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
$55
$60
4Q09 4Q10 1Q10 1Q11
Low
1Q11
High
$14.8
$39.8$38.1
$48.0
$54.0
($ m
illio
ns)
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
$55
$60
$65
$70
4Q09 4Q10 1Q10 1Q11
Low
1Q11
High
$23.0
$45.4 $44.8
$57.0
$63.0
($ m
illio
ns)
13
Distributable Earnings Growth
Pre-tax Distributable Earnings Growth Post-tax Distributable Earnings Growth
Fourth quarter pre-tax & post-tax distributable earnings per fully diluted share were up 73%
and 143% y-o-y, respectively
Outlook Outlook
Up 26% - 40% y-o-yUp 27% - 40% y-o-y
$0.06
$0.14 $0.14 $0.14 $0.14
6%
9%
10%
8%
6%
0%
2%
4%
6%
8%
10%
12%
$0.01
$0.03
$0.05
$0.07
$0.09
$0.11
$0.13
$0.15
4Q2009 1Q2010 2Q2010 3Q2010 4Q2010
Dividend Yield when Declared
14
Strong, Steady Dividend Growth
ICAP, 35.1%
Tullet, 18.8%
GFI, 10.8%
Tradition, 15.7%
BGC, 18.1%
ICE/Creditex, 1.4%TTM 2010 Market Share
ICAP, 33.7%
Tullet, 21.4%
GFI, 10.6%
Tradition, 16.8%
BGC, 15.8%
ICE/Creditex, 1.8%
TTM 2009 Market Share
15
BGC: Strongest Market Share Gain
Note: The above analysis uses revenue figures as reported by the above companies and converts them to US dollars at the relevant historical average exchange rates. 100% = total revenues for the 6 abovementioned companies at the relevant historical average exchange rates. TTM period for BGC, GFI, ICE, and Tradition is ended 12/31; for ICAP is ended 9/30; for Tullet it is for TTM ended 10/31. For both periods, ICE/Creditex revenues are for OTC Credit execution only. Note that the totals may not add to 100% due to rounding.
BGC gained ≈ 240 BP of market
share in $US terms y-o-y =
strongest relative performance
amongst public IDBs
BGC gained ≈ 230 BP of market
share in $US terms y-o-y =
strongest relative performance
amongst public IDBs
-300
-200
-100
0
100
200
300BG
C
ICA
P
GFI
ICE/C
reditex
Tra
ditio
n
Tulle
t
Share Gained (Lost) in Basis Points
16
Y-O-Y Revenue Growth (MRP Available) Y-O-Y EPS Growth (MRP Available)
Leading Financial Intermediary Operational comparison
Y-O-Y Pre-tax Profit Growth (MRP Available)Y-O-Y Pre-Tax
Margin Expansion (in BPS, MRP Available)
-2,000
-1,500
-1,000
-500
0
500
1,000
KCG ICAP GFI Tullett MF MKTX ITG
641
-1,151
-575
-254-102
75
492
829
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
KCG ITG Tullett MF ICAP GFI MKTX
7.6%
-16.4%
-8.3%-6.1%
-0.1%
6.1%8.0%
13.7%
-100%
-50%
0%
50%
100%
150%
KCG ITG GFI ICAP Tullett MF MKTX
143.0%
-77.3%-45.0%
-25.0%-12.0% -7.1%
6.4%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
GFI KCG ICAP Tullett MKTX ITG MF
97.4%
-75.3% -74.3%
-25.8%-11.5%
30.9%
Note: Source is Bloomberg or company filings. Data for calculations is sourced in US dollars from Bloomberg. MRP available is 3 Mos ended December 31 for BGC, GFI, ITG, KCG, MKTX, and MF. Most recent period available for ICAP, is 6 Mos ended Sept 30, and for TLPR, most recent period available is 6 Mos ended June 30.
NMF
NMF NMF
0
5
10
15
20
25
Tullet KCG GFI ICAP ITG MF MKTX
11.2x
8.9x10.1x
13.2x 13.2x14.9x
17.1x
21.0x
17
0
2
4
6
GFI MKTX ITG MF KCG Tullett ICAP
2.0
0.7 0.7 0.81.4 1.4 1.5
5.9
2011 P/E Multiple 3-Mos Avg. Daily Volume (in thousands)
0
500
1,000
1,500
2,000
2,500
3,000
MKTX GFI ITG Tullet KCG ICAP MF
574
117385 429
660
1,104
1,859
2,129
Leading Financial Intermediary Operational comparison (Continued)
Market Cap (in USD B)
Note: Source for all information above is Bloomberg. Market data is as of 2-17-11 close of market.
Implied Dividend Yield
0%
1%
2%
3%
4%
5%
6%
7%
8%
ITG KCG MF MKTX ICAP GFI Tullett
6.3%
0.0% 0.0% 0.0%
1.7%
3.6%3.7%4.0%
141%
12%
30%
69%
56%
-2%
5%
43%
24%
44%
-11%
44%
19%
27%
56% 55%
14%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
160%
TTM Total Return w/ Dividend Reinvestment
18
BGCP Solidly Outperforms the Market Structure
Group
Source: Bloomberg. Total Return = stock/index performance with dividend reinvestment as of 2/18/11 end of day.
19
Growth Drivers: Positive Momentum
MASSIVE
SOVERIEGN
ISSUANCE
Why Such Strong
Performance For BGC?
HEADCOUNT
GROWTH
&
MARKET
SHARE
GAINS
FULLY
ELECTONIC
TRADING
($300)
($200)
($100)
$0
$100
$200
$300
$400
$500
$600
I-2005 II III IV I-2006 II III IV I-2007 II III IV I-2008 II III IV I-2009 II III IV I -2010 II III IV I -2011 II
Borr
ow
ing
($ in b
illio
ns)
Treasury Quarterly Net Borrowing
Total Estimate
Over 10 year TIPS
5-10 year TIPS
Over 10 years
5-10 years
2-under 5 years
Bills
Estimate
20
Record US Treasury Issuance = Continued Tailwind
Source: US Department of the Treasury. Data for Q2 2011 is the projected estimate for net borrowing. Treasury Fiscal Year ends September 30th.
Short Term Bills Start Rolling
Over to Longer Dated
BGC generally trades 2-year or longer dated UST securities
62
64
66
68
70
72
74
76
78
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Debt Held by the Public Debt Held by the Public as a % of GDP
21
US Federal Debt Balance Should Keep Growing…
Source: Congressional Budget Office, “The Budget and Economic Outlook: Fiscal Years 2011 to 2021,” January 2011.
Perc
en
t of G
DP
Deb
t (i
n b
illio
ns
of
do
llars
)
Projections
Even as deficits begin to stabilize as a percentage of GDP, gross debt continues to rise
As national deficits rise, trading in both bonds and their related interest rate and credit derivatives
increases
0%
1%
2%
3%
4%
5%
6%
7%
8%
55%
60%
65%
70%
75%
80%
85%
2008 2009 2010 2011 2012
Debt (lef t axis) Def icit (right axis)
22
…As Should EU Deficits and Gross Debt
Source: European Commission. “European Economic Forecast-Autumn 2010,” published 11/29/10.
Perc
en
t of G
DP
Perc
en
t o
f G
DP
Estimates
23
BGC’s Ability to Attract and Retain Key Talent
Partnership structure tax efficient for both partners and public shareholders
Partnership is a key tool in attracting and retaining key producers
Unlike peers, large number of key employees have sizable and mostly restricted equity or unit stakes ( 38% of fully diluted shares*)
Fundamental alignment of employees’ interests with shareholders’
Structure combines best aspects of private partnership with public ownership
*Excluding shares associated with the Company’s Convertible Senior Notes due 2015
24
Strong Record of Successful, Accretive Acquisitions
Offices: New York, London
and Tokyo
~325 brokers
Leader in fixed income,
money market & derivatives
Maxcor / Eurobrokers
(May 2005)
Offices: Paris
~70 brokers
Presence in OTC &
exchange traded products
ETC Pollack
(September 2005)
Office: Paris
~75 brokers
Expertise in equity
derivatives
Aurel Leven
(November 2006)
Office: Istanbul
Gain access to Turkish
equities and electronic bond
market
AS Menkul
(December 2006)
Office: Singapore
OTC Energy broker
specializing in crude oil / fuel
oil/ naptha distillates
Radix Energy
(March 2008)
Offices: London,
Johannesburg
Expand equity derivatives
business in emerging
markets
Marex Financial (a)
(August 2007)
2005 2006 2007 2008
(a) BGC acquired Marex Financial’s emerging markets business.
(b) BGC acquired various assets and businesses of Mint Partners and Mint Equities.
Offices: Sao Paulo and Rio de
Janeiro
70 brokers
Leader in FX derivatives,
commodities, credit, equities,
and interest rate products
Liquidez
(June 2009)
2009 2010
Main Office: London
Mainly Equities, also Credit, Rates,
Foreign Exchange, Commodities
and Energy
~100 brokers
Mint Partners/Mint Equities (b)
(August 2010)
1,5531,551 1,612 1,721
1,705
0
500
1,000
1,500
2,000
4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010
(Fro
nt
Off
ice E
mp
loyees)
25
$0
$200
$400
$600
$800
$1,000
$1,200
2009 2010 4Q2009 4Q2010
$799.5$784.7
$188.2 $180.2
($ t
ho
usa
nd
s)
Historically, the Company’s average revenue per front office employee has declined for the periods following significant headcount increases. BGC Partners’ new front office employees generally achieve higher productivity levels in their second year with the Company
BGC Front Office Employee Growth
Front Office Productivity (in thousands)
Note: Front office productivity is calculated as “total brokerage revenue,” “market data and software sales revenue,” and the portion of “ fees from related
party” line items related to fully electronic trading divided by average front office headcount for the relevant period.
Front Office Headcount
26
Voice HybridFully Electronic
Property DerivativesExotic OptionsCommodity DerivativesCorporate ReposBasis SwapsUS CDSInterest Rate Swaps
European CorporatesStructured ProductsEuropean GovsEuropean Gov RepoUSD SovereignAsset BackedUK GiltsUST SwapsTIPs
FX OptionsEuropean SovereignsCanadian SovereignsEuropean CDS
U.S. TreasuriesSpot FX
Interest Rate DerivativesEmerging MarketsConvertiblesNDFsEquity-related
New
Pro
ducts
Vo
lum
e G
row
thBGC’s Product Spectrum in Late 2008 ≈ 20 e-brokered Desks
27
New
Pro
ducts
Vo
lum
e G
row
th
Voice Hybrid Fully Electronic
Q12011, More Than 75 Desks Offer Fully Electronic Trading
Money Markets
Property Derivatives
Exotic IR & FX Options
Commodity Derivatives
Shipping
Commodities
USD & EUR Sovereigns
New Issue Securities
Interest Rate Derivatives
Cash Equities
Basis Swaps
Inflation Swaps
Floating Rate Notes
Base Metals
Asset Backed Securities
Convertible Bonds
Covered Bonds
UST Curve SwapsUST Off-the-RunsEuropean Gov’t BondsEquity Derivatives (Global)UK GiltsEmerging Market Bonds
FX OptionsEuropean CorporatesSingle-Name CDS (Global)CDS Indices (Global)Sovereign CDS Euro Interest Rate SwapsUS Dollar IRSSGD IRS and INR IRSAsian Convertible BondsUS Dollar IR OptionsYen IR OptionsNon-deliverable ForwardsBase Metals OptionsPrecious Metals OptionsLiquidez DMA+ others
US TreasuriesSpot FXELX-CME Basis SwapsFutures RoutingCanadian Sovereigns
28
BGC Should Benefit from Proposed OTC Changes
We profitably broker OTC and exchange traded, centrally cleared products
We strongly favor open and non-discriminatory central clearing
We are generally paid significantly faster by central clearing organizations
Central clearing may lead to higher OTC volumes in certain markets
BGC has competitive advantage versus IDB peers if hybrid or electronic trading is
encouraged and/or required
BGC should qualify as an "swap execution facility” and other equivalent terms
29
Solid Business with Significant Opportunities
Diversified revenues by geography & product
Well positioned to take advantage of current market dynamics
Accretively hiring and acquiring
Investing for broker productivity & fully electronic trading
Highly leverageable business model
Deep and experienced management team with ability to attract and
retain key talent
Intermediary-oriented, low-risk business model
Attractive dividend yield
Q&A
Appendix
32
ELX Update
Offers US Treasury futures, Eurodollar Futures
• Recent records in single-day total volume and market share:
• 100K+ contracts traded on 1/5/2011
• Market share = nearly 5% on 1/10/2011.
• OI for Eurodollar futures = 235,501 contracts on 1/27/2011
• Options on Futures, other products in development
• Partners include nearly all the largest FCMs* and most active futures trading
firms: Bank of America Merrill Lynch, Barclays Capital, Breakwater, Citi, Credit
Suisse, Deutsche Bank Securities, GETCO, Goldman Sachs, JPMorgan, Morgan
Stanley, PEAK6 and The Royal Bank of Scotland
• Partners recently participated in capital raise
• Customers include top FCMs like MF & Newedge
• OCC provides clearing services
• CFTC is reviewing EFFs
* Ranked by FCM assets per “Financial Data for Futures Commission Merchants” at www.CFTC.gov
EMEA
54.0%
Americas
31.0%
APAC
15.0%
33
Full Year 2010 Global Revenue Breakdown
New York
Chicago
Toronto
Mexico City
London
Copenhagen
ParisNyon
Istanbul
Beijing Seoul Tokyo
Sydney
Singapore
Hong Kong
Note: Based on Distributable Earnings. Total may not sum due to rounding. See the second to last page of this presentation for average exchange rates
for the period.
Johannesburg
São PauloRio de Janeiro
Moscow
Americas Revenue up 36.9% y-o-y
Asia Pacific Revenue up 19.9% y-o-y
Europe, Middle East & Africa Revenue up 2.7% y-o-y
Sarasota
FY2010 Revenues
Dubai
Aspen
West Palm Beach
Garden City
34
Rates 41.7%
Credit 23.3%
Foreign Exchange
13.8%
Equities and Other Asset
Classes 13.3%
Market data & software
2.0%
Fees from related parties, interest & other
income6.0%
Full Year 2010 Revenue Breakdown by Product
Up 30.7% y-o-y
Revenues related to fully
electronic trading* =
9.4% of total DE
revenues in FY2010 vs.
8.2% in FY2009
* This includes fees captured in both the “total brokerage revenues” and “ fees from related party” line items related to fully electronic trading.
Note: percentages may not sum to 100% due to rounding.
Rates
42.1%
35
$0
$100
$200
$300
$400
$500
$600
FY 2009 FY 2010 Q4 2009 Q4 2010
$483.2
$556.2
$125.9 $135.9
(US
D m
illio
ns)
Brokerage Overview: Rates
• Interest rate derivatives
• US Treasuries
• Global Government Bonds
• Agencies
• Futures
• Dollar derivatives
• Repurchase agreements
• Non-deliverable swaps
• Interest rate swaps & options
Rates Revenue Growth
% of 4Q2010 Total Distributable Earnings RevenueExample of Products
• Voice & fully electronic cash rates business grew due to continuing strong fixed income issuance globally
• Global activity aided by heightened global levels of interest rate volatility
• BGC’s continued investment in its Rates franchise
Drivers
Credit
21.8%
$0
$100
$200
$300
$400
$500
FY 2009 FY 2010 Q4 2009 Q4 2010
$331.4$311.0
$70.4 $70.3
(US
D m
illio
ns)
36
Brokerage Overview: Credit
• Credit derivatives
• Asset-backed securities
• Convertibles
• Corporate bonds
• High yield bonds
• Emerging market bonds
Credit Revenue Growth
% of 4Q2010 Total Distributable Earnings Revenue
Example of Products
• Primarily lower industry-wide corporate bond and credit derivative activity
• Partially offset by a significant increase in revenues from fully electronic credit trading
• Strong y-o-y growth in sovereign CDS activity
Drivers
FX14.9%
37
$0
$25
$50
$75
$100
$125
$150
$175
FY 2009 FY 2010 Q4 2009 Q4 2010
$136.5
$183.8
$38.5$48.0
(US
D m
illio
ns)
Brokerage Overview: Foreign Exchange
• Foreign exchange options
• G-10
• Emerging markets
• Cross currencies
• Exotic options
• Spot FX
• Emerging market FX options
• Exotic FX options
• Non-deliverable forwards
Foreign Exchange Revenue Growth
% of 4Q2010 Total Distributable Earnings RevenueExample of Products
• Continuing rebound in global volumes particularly as credit issues continue to ease for customers of BGC’s Emerging Markets desks
• Growth in BGC’s market share
• Also driven by significant y-o-y growth in revenues from BGC’s fully electronic foreign exchange business
Drivers
Equities & Other
13.5%
38
Brokerage Overview: Equities & Other Asset Classes
Equities & Other Asset Classes Revenue Growth
$0
$25
$50
$75
$100
$125
$150
$175
$200
FY 2009 FY 2010 Q4 2009 Q4 2010
$122.5
$177.6
$38.7$43.5
(US
D m
illio
ns)
% of 4Q2010 Total Distributable Earnings Revenue
Example of Products
• Equity derivatives
• Cash Equities
• Index futures
• Commodities
• Energy derivatives
• Other derivatives and futures
• Strong growth globally from the Company’s increased investment in equity related products
• The addition of assets from Mint
• Growth from BGC’s energy and commodities desks
Drivers
39
BGC Partners Compensation Ratio
$560.0
$644.9 $719.6 $713.3$749.8
65.5%
57.7% 58.2% 60.9%
56.2%
0%
10%
20%
30%
40%
50%
60%
70%
$0
$100
$200
$300
$400
$500
$600
$700
$800
2006 2007 2008 2009 2010
($ m
illio
ns)
Compensation and Employee Benefits Compensation and Employee Benefits as % of Total Revenue
Compensation ratio was 53.8% in 4Q2010 vs. 61.5% in 4Q2009
40
Operating Leverage / Fixed Expense Base
(11%)
6%
11%10%
14%
30%29%31%
36%
46%
(20%)
(10%)
0%
10%
20%
30%
40%
50%
FY2006 FY 2007 FY 2008 FY 2009 FY2010
Pre-tax distributable earnings as % of Total Revenue Non-comp Expenses as a % of Total Revenue
Non-comp expenses were 32.1% of distributable earnings revenues in 4Q2010 versus 30.8% in 4Q2009
Pre-tax distributable earnings margin was 14.1% in 4Q2010 vs. 7.7% in 4Q2009
Post-tax distributable earnings margin was 11.7% in 4Q2010 vs. 5.0% in 4Q2009
Note: FY 2006 based on GAAP pre-tax margin.
100
85
101
96 95
10398
82
111 110
101
88
118
108
122
113
119
105
97
107
122
115 115
93
50
75
100
125
150
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2009 Revenue
2010 Revenue
41
94
83
96
82
89
10199
103
98100
98
75
110
102104
102 101104
81
118 118
89
81
126
50
75
100
125
150
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2007 Revenue
2008 Revenue
Strong Monthly Revenue Performance ($MM)
Note: January 2011 revenue number is preliminary.
BG
C M
on
thly
Dis
trib
uta
ble
Earn
ings
Reven
ues
($M
M)
January 2011
Revenue = 123, up 4%
y-o-y
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BGC Economic Ownership as of 12/31/2010
Public29%
Cantor34%
Employees, Executives, & Directors
37%
Note: Employee ownership figure attributes all PSIs, PSUs, RSUs, REUs, BGC units and distribution rights to founding partners & employees and includes all A
shares owned by executives and directors. Cantor ownership includes all Cantor A and B shares as well as all Cantor exchangeable units and distribution rights to
Cantor partners. Public ownership includes all A shares not owned by insiders. The above chart excludes shares related to convertible debt.
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Strong Balance Sheet
Simple Balance Sheet
Low leverage
Safe securities position – no “mark to model” assets
BGC brokers trades either on a name-give-up basis (≈70%) or on a matched principal basis (≈30%) • Generally do not have inventory
BGC does not generally engage in proprietary trading, have margin accounts with customers, or otherwise use its balance sheet for trading purposes
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Taxable Equivalent Yield AnalysisTAX ASSUMPTIONS BGCP STOCK ASSUMPTIONS
Qualified Ordinary
Annual
Dividend
BGCP
Price Pre-Tax Yield
Federal 15.0% 35.0% 0.56$ 8.77$ 6.4%
New York State 9.0% 9.0%
New York City 3.9% 3.9%
Net itemized deduction -4.5% -4.5%
effective rate 23.3% 43.3%
Scenario 1: 10 % is non-taxable XYZ Corporation = pays qualified dividend, 100% taxable
Scenario 2: 18 " " ABC Fund = pays distribution taxable as ordinary income
Scenario 3: 40 " "
Scenario 4: 80 " "
Scenario 5: 100 " "
BGCP VERSUS ALTERNATE INVESTMENTS
BGC Pre-
tax Yield
BGC
After-
Tax Yield
Required
Pre-Tax
Yield
"XYZ"
Required
Pre-Tax
Yield
"ABC"
10 6.2% 4.9% 6.4% 8.7%
18 6.2% 5.2% 6.7% 9.1%
40 6.2% 5.4% 7.0% 9.4%
80 6.2% 5.9% 7.7% 10.5%
100 6.2% 6.2% 8.1% 11.0%
% BGC
Dividend
Non-
Taxable
NON-TAXABLE PERCENTAGE OF BGCP
DIVIDEND ASSUMPTIONS
ASSUMPTIONS ABOUT ALTERNATIVE
INVESTMENTS
6.2% 6.2% 6.2% 6.2% 6.2%
4.9%5.2%
5.4%
5.9%6.2%
6.4%6.7%
7.0%
7.7%8.1%
8.7%
9.1%9.4%
10.5%
11.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
10 18 40 80 100
% BGC Dividend Non-Taxable
BGC Pre-tax Yield BGC After-Tax Yield Required Pre-Tax Yield "XYZ" Required Pre-Tax Yield "ABC"
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Taxable Equivalent Yield Analysis (Continued)
18% = Actual expected non-
taxable percentage for 2010
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Structure Creates Employee Retention and Lower
Effective Tax Rate
Public shareholders
Class A common stock
BGC Partners, Inc.
BGC Holdings, L.P.
General Partner Interest (controlling interest)
Special Voting Limited Partnership Interest
Limited Partnership Interests
General Partner Interest (controlling interest)
Special Voting Limited Partnership Interest
Limited Partnership Interests
Exchangeable Limited
Partnership Interests
Founding/
Working
Partners
Limited Partnership
Interests
Exchangeable Limited
Partnership Interests
U.S Opco
Global Opco
General Partner Interests (controlling
interest)
Special Voting Limited Partnership
Interest
Limited Partnership Interests Limited Partnership Interests
Cantor Fitzgerald, L.P.
Class A & B common stock
Our structure allows us to pay a significantly higher dividend than companies with ordinary corporate structures or companies with structures similar to ours that have tax receivable agreements
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Average Exchange Rates
Source: Oanda.com.
*Inverted.
Average
FY 2010 FY 2009 4Q2010 4Q2009 Jan. 2011 Jan. 2010
US Dollar 1 1 1 1 1 1
British Pound 1.546 1.566 1.582 1.633 1.577 1.615
Euro 1.328 1.395 1.360 1.477 1.336 1.426
Hong Kong Dollar 0.129 0.129 0.129 0.129 0.129 0.129
Singapore Dollar 0.734 0.689 0.768 0.717 0.777 0.715
Japanese Yen* 87.750 93.580 82.520 89.810 82.510 91.290
Distributable Earnings
48
BGC Partners uses non-GAAP financial measures including "Revenues for distributable earnings," "pre-tax distributable earnings" and "post-tax distributable earnings," which
are supplemental measures of operating performance that are used by management to evaluate the financial performance of the Company and its subsidiaries. BGC Partners
believes that distributable earnings best reflects the operating earnings generated by the Company on a consolidated basis and are the earnings which management considers
available for distribution to BGC Partners, Inc. and its common stockholders, as well as to holders of BGC Holdings partnership units during any period. As compared with
"income (loss) from operations before income taxes," "net income (loss) for fully diluted shares," and "fully diluted earnings (loss) per share," all prepared in accordance with
GAAP, distributable earnings calculations primarily exclude certain non-cash compensation and other expenses which generally do not involve the receipt or outlay of cash by
the Company, which do not dilute existing stockholders, and which do not have economic consequences, as described below. Revenues for distributable earnings are defined
as GAAP revenues excluding the impact of BGC Partners, Inc.'s non-cash earnings or losses related to its equity investments, such as in Aqua Securities, L.P. and ELX Futures,
L.P., and its holding company general partner, ELX Futures Holdings LLC. Pre-tax distributable earnings are defined as GAAP income (loss) from operations before income
taxes excluding items that are primarily non-cash, non-dilutive, and non-economic items, such as: Non-cash stock-based equity compensation charges for REUs granted or
issued prior to the merger of BGC Partners, Inc. with and into eSpeed, as well as post-merger non-cash, non-dilutive equity-based compensation related to partnership unit
exchange or conversion. Allocations of net income to founding/working partner and other units, including REUs, RPUs, PSUs and PSIs. Non-cash asset impairment charges,
if any. Acquisition-related costs not capitalized under GAAP. Distributable earnings calculations also exclude charges related to purchases, cancellations or redemptions of
partnership interests and certain one-time or non-recurring items, if any. Since distributable earnings are calculated on a pre-tax basis, management intends to also report
"post-tax distributable earnings" and "post-tax distributable earnings per fully diluted share“: "Post-tax distributable earnings" are defined as pre-tax distributable earnings
adjusted to assume that all pre-tax distributable earnings were taxed at the same effective rate. "Post-tax distributable earnings per fully diluted share" are defined as post-tax
distributable earnings divided by the weighted-average number of fully diluted shares for the period. In the event that there is a GAAP loss but positive distributable earnings,
the distributable earnings per share calculation will include all fully diluted shares that would be excluded under GAAP to avoid anti-dilution, but will exclude quarterly
interest expense, net of tax, associated with the convertible notes. Each quarter, the dividend to common stockholders is expected to be determined by the Company’s
Board of Directors with reference to post-tax distributable earnings per share. In addition to the Company’s quarterly dividend to common stockholders, BGC Partners
expects to pay a pro rata distribution of net income to BGC Holdings founding/working partner and other units, including REUs, RPUs, PSUs and PSIs, and to Cantor for its
noncontrolling interest. The amount of all of these payments is expected to be determined using the above definition of pre-tax distributable earnings per share. Most
employees who are holders of RSUs are granted pro-rata payments equivalent to the amount of dividends paid to common stockholders. Under GAAP, dividend equivalents
on RSUs are required to be taken as a compensation charge in the period paid. However, to the extent that they represent cash payments made from the prior period's
distributable earnings, they do not dilute existing stockholders and are therefore excluded from the calculation of distributable earnings. Distributable earnings is not meant to
be an exact measure of cash generated by operations and available for distribution, nor should it be considered in isolation or as an alternative to cash flow from operations
or income (loss) for fully diluted shares. The Company views distributable earnings as a metric that is not necessarily indicative of liquidity or the cash available to fund its
operations. Pre- and post-tax distributable earnings are not intended to replace the Company’s presentation of GAAP financial results. However, management believes that
they help provide investors with a clearer understanding of BGC Partners’ financial performance and offer useful information to both management and investors regarding
certain financial and business trends related to the Company’s financial condition and results of operations. Management believes that distributable earnings and the GAAP
measures of financial performance should be considered together. Management does not anticipate providing an outlook for GAAP revenues, “income (loss) from operations
before income taxes”, “net income (loss) for fully diluted shares,” and “fully diluted earnings (loss) per share”, because the items previously identified as excluded from pre-
tax distributable earnings and post-tax distributable earnings are difficult to forecast. Management will instead provide its outlook only as it relates to revenues for
distributable earnings, pre-tax distributable earnings and post-tax distributable earnings. For both this description and a reconciliation to GAAP, see the sections of BGC’s
most recent financial results press release titled “Distributable Earnings” and “Reconciliation of GAAP Income To Distributab le Earnings”, which are incorporated by
reference, and available in the “Investor Relations” section of our website at http://www.bgcpartners.com.