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8-K - FORM 8-K - Global Brokerage, Inc.c13341e8vk.htm
Exhibit 99.1
(FXCM LOGO)
FXCM Inc. Announces Fourth Quarter and Full Year 2010 Results
Fourth Quarter Highlights:
    2010 fourth quarter revenues of $96.1 million, up 29% versus the same period in 2009
    Adjusted Pro Forma EBITDA of $32.3 million, up 42% versus the same period in 2009
    Adjusted Pro Forma net income of $18.1 million or $0.24 per fully diluted share, up 37% versus the same period in 2009
    Customer equity of $641.2 million, up 81% from same period in 2009
    Tradeable accounts of 175,240, up 25% from the same period in 2009
    Completed acquisition of ODL Group Ltd., a U.K. — based FX broker
    Completed initial public offering of $242.5 million on New York Stock Exchange
Full-Year Highlights:
    Full year revenues of $360.3 million, up 12% compared to 2009
    Adjusted Pro Forma EBITDA of $120.5 million, up 16% compared to 2009
    Adjusted Pro Forma net income of $69.6 million or $0.92 per fully diluted share, up 13% compared to 2009
       
    Entered into a Memorandum of Understanding to acquire the retail FX business of GCI Capital of Japan, a FX provider with over 20,000 tradeable accounts and $100 million in customer equity
    Declaring a quarterly dividend of $0.06 per share of Class A common stock
NEW YORK, NY — March 2, 2011 — FXCM Inc (NYSE: FXCM), a leading online provider of foreign exchange, or FX, trading and related services, today announced for the quarter ended December 31, 2010, revenues increased $21.5 million or 29% to $96.1 million, compared to $74.6 million for the corresponding prior year quarter. Adjusted Pro Forma EBITDA for the quarter was $32.3 million, an increase of $9.5 million or 42%, compared to $22.8 million, for the prior year quarter. Adjusted Pro Forma Net Income was $18.1 million, or $0.24 per share on a fully exchanged, fully diluted basis, compared to $13.2 million, or $0.18 per share, for the corresponding prior year quarter, an increase of 37%.
Adjusted Pro Forma results assume the conversion and exchange of all FXCM Holdings, LLC units into FXCM Inc. Class A shares, resulting in the elimination of the non-controlling interest and the corresponding adjustment to the entity’s tax provision. In addition, Adjusted Pro Forma results eliminate certain non-recurring compensation charges relating to FXCM Inc.’s initial public offering.

 

 


 

For the year ended December 31, 2010, revenues increased $37.6 million or 12% to $360.3 million, compared to $322.7 million for the corresponding prior year. Adjusted Pro Forma EBITDA for the year was $120.5 million, an increase of $16.9 million or 16%, compared to $103.6 million, for the prior year. Adjusted Pro Forma Net Income was $69.6 million, or $0.92 on a fully exchanged, fully diluted basis, compared to $61.4 million, or $0.82 per share, for the corresponding prior year, an increase of 13%.
U.S. GAAP net income for the fourth quarter 2010 was $20.8 million of which $0.2 million or $0.01 per fully diluted share was attributable to FXCM Inc. for the post-IPO period of December 7, 2010 through December 31, 2010. Following the completion of FXCM Inc.’s initial public offering on December 7, 2010, FXCM Holdings, LLC is consolidated into the results of FXCM Inc. Prior to the initial public offering, FXCM Inc. did not engage in any business or activities except in connection with its formation.
“FXCM delivered strong growth in the quarter — growing tradeable accounts by 25%, revenues by 29% and Adjusted Pro Forma EBITDA by 42% versus the fourth quarter 2009,” said Drew Niv, Chief Executive Officer.
“We also expanded our presence geographically with the acquisition of ODL Group, the third largest FX operator in the U.K. which gives us a much stronger position in Europe,” he continued. “And we are pleased to announce today that we have entered into a Memorandum of Understanding to acquire the retail FX business of GCI Capital of Japan with over 20,000 active accounts and $100 million in customer equity. We intend to merge this business with the Japanese subsidiary of ODL, which would provide FXCM with a major presence in Japan — the world’s largest retail FX market.”
“Lastly, we are pleased to have completed our initial public offering on the New York Stock Exchange in the fourth quarter. We believe that being a public company will give our customers greater comfort in trading through FXCM and further demonstrate that our agency model differentiates us from our competition.”

 

 


 

Unaudited Consolidated Adjusted Pro Forma and U.S. GAAP Results
                                                 
    Adjusted Pro Forma (thousands except per share amounts)
    Three Months Ended December 31,   Twelve Months Ended December 31,
    2010     2009     % Change   2010     2009     % Change
 
                                               
Total Revenues
  $ 96,127     $ 74,629       29 %   $ 360,277     $ 322,730       12 %
 
                                               
Referring broker fees
    19,685       15,841       24 %     81,365       76,628       6 %
Compensation and benefits
    17,026       16,645       2 %     69,349       62,588       11 %
Other expenses
    27,145       19,361       40 %     89,101       79,959       11 %
 
                                       
 
                                               
EBITDA
    32,271       22,782       42 %     120,462       103,555       16 %
 
                                       
 
                                               
Depreciation and amortization
    4,014       1,742       130 %     9,306       6,542       42 %
 
                                               
Income before income taxes
    28,257       21,040       34 %     111,156       97,013       15 %
 
                                       
 
                                               
Income tax provision
    10,117       7,805       30 %     41,507       35,634       16 %
 
                                               
Net Income
    18,140       13,235       37 %     69,649       61,379       13 %
 
                                       
 
                                               
Net income attributable to non-controlling interest
                                   
 
                                       
 
                                               
Net Income Attributable to FXCM Inc.
  $ 18,140     $ 13,235       37 %   $ 69,649     $ 61,379       13 %
 
                                       
 
                                               
Pro forma fully exchanged, fully diluted shares outstanding
    75,300       75,300             75,300       75,300        
 
                                               
Earnings Per Share
  $ 0.24     $ 0.18       37 %   $ 0.92     $ 0.82       13 %
 
                                       

 

 


 

                                                 
    U.S. GAAP (thousands except per share amounts)
    Three Months Ended December 31,   Twelve Months Ended December 31,
    2010     2009     % Change   2010     2009     % Change
 
   
Total Revenues
  $ 96,127     $ 74,629       29 %   $ 360,277     $ 322,730       12 %
 
   
Referring broker fees
    19,685       15,841       24 %     81,365       76,628       6 %
Compensation and benefits
    23,872       16,645       43 %     76,195       62,588       22 %
Other expenses
    27,145       19,361       40 %     89,101       79,959       11 %
 
                                   
 
   
EBITDA
    25,425       22,782       12 %     113,616       103,555       10 %
 
                                   
 
   
Depreciation and amortization
    4,014       1,742       130 %     9,306       6,542       42 %
 
   
Income before income taxes
    21,411       21,040       2 %     104,310       97,013       8 %
 
                                   
 
   
Income tax provision
    632       2,420       -74 %     4,149       10,053       -59 %
 
   
Net Income
    20,779       18,620       12 %     100,161       86,960       15 %
 
                                   
 
   
Net income attributable to non-controlling interest
    20,633       18,620       11 %     100,015       86,960       15 %
 
                                   
 
   
Net Income Attributable to FXCM Inc.
  $ 146     $             $ 146     $          
 
                                   
         
    December 7,  
    2010  
    through  
    December 31,  
    2010  
 
       
Net Income (in thousands)
  $ 146  
 
     
 
       
Net Income per Class A Share Basic and Diluted
  $ 0.01  
 
     
 
       
Average Class A shares outstanding
    17,319  
 
     
Selected Operating Metrics
                                                 
    (Unaudited)
    Three Months Ended December 31,   Twelve Months Ended December 31,
    2010     2009     % Change   2010     2009     % Change
 
   
Total trading volume ($ in billions)
  $ 836     $ 835       0.1 %   $ 3,178     $ 3,504       -9 %
 
   
Total tradeable accounts
    175,240       140,565       25 %     175,240       140,565       25 %
— Standard account
    118,207       86,186       37 %     118,207       86,186       37 %
— Micro account
    57,033       54,379       5 %     57,033       54,379       5 %
 
   
Total active accounts
    136,427       116,919       17 %     136,427       116,919       17 %
 
   
Trading days in period
    66       65               260       259          
 
   
Daily average trades
    317,658       313,035       1 %     315,210       347,104       -9 %
 
   
Daily average trades per active account
    2.3       2.7       -15 %     2.5       3.4       -26 %
 
   
Retail trading revenue per million traded
  $ 100     $ 80       25 %   $ 100     $ 83       20 %
 
   
Total customer equity ($ in millions)
  $ 641     $ 354       81 %   $ 641     $ 354       81 %

 

 


 

Non-GAAP Financial Measures
Adjusted Pro Forma EBITDA, Adjusted Pro Forma Net Income and Adjusted Pro Forma Net Income per fully diluted share are non-GAAP financial measures. These measures do not represent and should not be considered as a substitute for net income, net income attributable to FXCM Inc. or net income per Class A share as determined in accordance with GAAP, and our calculations thereof may not be comparable to similarly entitled measures reported by other companies. See “Adjusted Pro Forma Results” beginning on A-3 of this release for additional information regarding these non-GAAP financial measures
Declaration of Quarterly Dividend
The company also announced today that its board of directors has declared a quarterly dividend of $0.06 per share on its outstanding Class A common stock. The dividend is payable on April 8, 2011 to Class A stockholders of record at the close of business on March 25, 2011.
Conference Call
As previously announced, FXCM Inc. will host a conference call to discuss the results at 8:30 a.m. (EST) today. This conference call will be available by dialing 888-680-0879 and 617-213-4856 for international participants. The conference ID number is 41994767. A live, audio webcast, a copy of FXCM Inc.’s earnings release, results presentation and replay of this conference call will also be available at http://ir.fxcm.com/. More information about FXCM can be found on the Company’s website at www.fxcm.com.
Disclosure Regarding Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect FXCM Inc.’s current views with respect to, among other things, its operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,“expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these

 

 


 

statements. FXCM Inc. believes these factors include but are not limited to evolving legal and regulatory requirements of the FX industry, the limited operating history of the FX industry, risks related to the protection of its proprietary technology, risks related to its dependence on FX market makers, market conditions and those other risks described under “Risk Factors” in FXCM Inc.’s prospectus dated December 1, 2010, filed with the Securities and Exchange Commission in accordance with Rule 424(b) of the Securities Act on December 3, 2010, as such factors may be updated from time to time in FXCM Inc.’s annual report on Form 10-K and other SEC filings, which are accessible on the SEC’s website at sec.gov. In particular, we note that our statements regarding an acquisition by us of GCI Capital of Japan are subject to a number of risks and uncertainties, including the risks that we will simply fail to reach a definitive agreement regarding the proposed acquisition, that the terms of any such agreement will not be favorable to us and that the proposed acquisition will not be completed even if a definitive agreement is entered into.
These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this presentation and in the prospectus. FXCM Inc. undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
About FXCM Inc.
FXCM Inc. (NYSE: FXCM) is a global online provider of foreign exchange (forex) trading and related services to retail and institutional customers world-wide.
At the heart of FXCM’s client offering is No Dealing Desk forex trading. Clients benefit from FXCM’s large network of forex liquidity providers enabling FXCM to offer competitive spreads on major currency pairs. Clients have the advantage of mobile trading, one-click order execution and trading from real-time charts. FXCM’s U.K. subsidiary, Forex Capital Markets Limited, also offers CFD products with no re-quote trading and allows clients to trade oil, gold, silver and stock indices along with forex on one platform. In addition, FXCM offers educational courses on forex trading and provides free news and market research through DailyFX.com.
Trading foreign exchange and CFDs on margin carries a high level of risk, and may not be suitable for all. Read full disclaimer.
For Media:
Jaclyn Sales, 646-432-2463
Vice-President, Corporate Communications
jsales@fxcm.com
or
For Investors:
Thomas Porac, 646-432-2986
Vice-President, Investor Relations
investorrelations@fxcm.com

 

 


 

ANNEX I
         
    Page  
Schedule   Number  
 
       
U.S. GAAP Results
       
Unaudited U.S. GAAP Consolidated Statements of Operations for the Three and Twelve Months Ended December 31, 2010 and 2009
    A-1  
Unaudited U.S. GAAP Consolidated Statements of Financial Conditions As of December 31, 2010 and 2009
    A-2  
 
       
Adjusted Pro Forma Results
    A-3  
Unaudited Adjusted Pro Forma and U.S. GAAP Consolidated Statements of Operations for the Three Months Ended December 31, 2010 and 2009
    A-4  
Unaudited Adjusted Pro Forma and U.S. GAAP Consolidated Statements of Operations for the Twelve Months Ended December 31, 2010 and 2009
    A-5  
 
       
Reconciliation of EBITDA to U.S. GAAP Net Income
    A-6  

 

 


 

FXCM Inc.
Consolidated Statement of Operations
(In thousands, except per share amounts)
(Unaudited)
                                 
    Three Months Ended December 31,     Years Ended December 31,  
    2010     2009     2010     2009  
Revenues
                               
 
                               
Retail trading revenues
  $ 83,865     $ 66,437     $ 318,472     $ 291,668  
Institutional trading revenues
    7,054       5,740       27,833       21,107  
Interest Income
    880       367       2,373       1,289  
Other Income
    4,328       2,085       11,599       8,666  
 
                       
 
                               
Total revenues
    96,127       74,629       360,277       322,730  
 
                       
 
                               
Expenses
                               
 
                               
Referring broker fees
    19,685       15,841       81,365       76,628  
Compensation and benefits
    23,872       16,645       76,195       62,588  
Advertising and marketing
    6,873       5,004       23,788       29,355  
Communication and technology
    7,948       6,429       27,120       24,026  
General and administrative
    12,285       7,903       38,077       26,453  
Depreciation and amortization
    4,014       1,742       9,306       6,542  
Interest expense
    39       25       116       125  
 
                       
 
                               
Total expenses
    74,716       53,589       255,967       225,717  
 
                       
 
                               
Income before income taxes
    21,411       21,040       104,310       97,013  
Income tax provision
    632       2,420       4,149       10,053  
 
                       
Net income
    20,779       18,620       100,161       86,960  
Net income attributable to non-controlling interest
    20,633       18,620       100,015       86,960  
 
                       
Net income attributable to FXCM Inc.
  $ 146     $     $ 146     $  
 
                       
 
                               
         
    December 7, 2010  
    through  
    December 31, 2010  
 
       
Net Income (in thousands)
  $ 146  
 
     
 
       
Net Income per Class A Share
       
Basic and Diluted
  $ 0.01  
 
     
 
       
Average Class A shares outstanding
    17,319  
 
     

 

A-1


 

FXCM Inc.
Consolidated Statements of Financial Condition
As of December 31, 2010 and 2009
(Amounts in thousands)
(Unaudited)
                 
    December 31,     December 31,  
    2010     2009  
 
               
Assets
               
 
               
Current assets
               
Cash and cash equivalents
  $ 193,330     $ 139,858  
Cash and cash equivalents, held for customers
    641,152       353,825  
Due from brokers
    125       1,581  
Accounts receivables
    18,324       2,892  
Deferred tax asset
    7,625        
 
           
 
               
Total current assets
    860,556       498,156  
 
               
Deferred tax asset
    90,107       480  
Tax receivable
    1,643        
Office, communication and computer equipment, net
    18,755       10,121  
Intangible assets and goodwill, net
    64,888       1,823  
Other assets
    12,368       7,356  
 
           
 
               
Total assets
  $ 1,048,317     $ 517,936  
 
           
 
               
Liabilities and Equity
               
 
               
Current liabilities
               
Customer account liabilities
  $ 641,152     $ 353,825  
Accounts payable and accrued expenses
    37,470       20,559  
Due to brokers
    13,314       764  
Deferred tax liability — current
    1,844        
Due to related parties — pursuant to tax receivable agreement
    3,817        
Deferred revenue
    6,000       6,000  
 
           
Total current liabilities
    703,597       381,148  
 
           
 
               
Deferred tax liability
    5,826        
Due to related parties — pursuant to tax receivable agreement
    70,419        
Deferred revenue
          6,000  
 
           
 
               
Total liabilities
    779,842       387,148  
 
           
 
               
Commitments and Contingencies
               
 
               
Stockholders’ equity
               
Class A common stock, par value $0.01 per share; 3,000,000 shares authorized, 17,319,000 and 0 shares issued and outstanding as of December 31, 2010 and 2009, respectively
    173        
Class B common stock, par value $0.01 per share; 1,000,000 shares authorized, 100 and 0 shares issued and outstanding as of December 31, 2010 and 2009, respectively
           
Additional paid-in-capital
    101,956        
Retained earnings
    146        
Accumulated other comprehensive income
    27        
 
           
 
Total stockholders’ equity of FXCM Inc.
    102,302        
 
Non-controlling interest
    166,173        
FXCM Holdings, LLC members’ equity prior to reorganization
            130,788  
 
           
 
               
Total stockholders’/members’ equity
    268,475       130,788  
 
           
 
               
Total liabilities and stockholders’/members’ equity
  $ 1,048,317     $ 517,936  
 
           

 

A-2


 

Adjusted Pro Forma Results
Throughout the discussion of FXCM Inc.’s results, information is presented on an Adjusted Pro Forma basis, which is a non-generally accepted accounting principles (“non-GAAP”) measure. Adjusted Pro Forma results begin with information prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), adjusted to exclude certain items relating to the initial public offering of FXCM Inc. and reflects the conversion of all units of FXCM Holdings, LLC for shares of Class A common stock of FXCM Inc. FXCM believes that the disclosed Adjusted Pro Forma measures and any adjustments thereto, when presented in conjunction with comparable U.S. GAAP measures, are useful to investors to compare FXCM’s results across several periods and facilitate an understanding of FXCM’s operating results. The Company uses these measures to evaluate its operating performance, as well as the performance of individual employees. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. The differences between Adjusted Pro Forma and U.S. GAAP results are as follows:
  1.  
Assumed Exchange of Units of FXCM Holdings, LLC for FXCM Inc. Class A Shares. As a result of the exchange of FXCM Holdings units, the non-controlling interest related to these units is converted to controlling interest. The Company’s management believes that it is useful to provide the per-share effect associated with the assumed exchange of all FXCM Holdings units.
 
  2.  
Initial Public Offering Related Expense. The Company has reflected charges in relation to its initial public offering. The Company’s management believes that this adjustment results in a more meaningful comparison with prior period results.
 
  3.  
Income Taxes. FXCM was prior to the initial public offering organized as a series of limited liability companies and foreign corporations, and even following the initial public offering not all of the Company’s income is subject to corporate-level taxes. As a result, adjustments have been made to the Adjusted Pro Forma earnings to assume that the Company has adopted a conventional corporate tax structure and is taxed as a C corporation in the U.S. at the prevailing corporate rates, that all deferred tax assets relating to foreign operations are fully realizable within the structure on a consolidated basis and that adjustments for deferred tax assets related to the ultimate tax deductions for equity-based compensation awards are made directly to stockholders’ equity. This assumption is consistent with the assumption that all FXCM Holdings units are exchanged for shares of FXCM Inc. Class A common stock, as discussed in Item 1 above, as the assumed exchange would change the tax structure of the Company.

 

A-3


 

FXCM Inc.
Adjusted Pro Forma Consolidated Statement of Operations
(In thousands, except per share amounts)
(Unaudited)
                                                 
    Three Months Ended December 31,  
    2010     2009  
    As             Adjusted     As             Adjusted  
    Reported     Adjustments     Pro Forma     Reported     Adjustments     Pro Forma  
Revenues
                                               
 
                                               
Retail trading revenues
  $ 83,865           $ 83,865     $ 66,437           $ 66,437  
Institutional trading revenues
    7,054             7,054       5,740             5,740  
Interest Income
    880             880       367             367  
Other Income
    4,328             4,328       2,085             2,085  
 
                                   
 
                                               
Total revenues
    96,127             96,127       74,629             74,629  
 
                                   
 
                                               
Expenses
                                               
 
                                               
Referring broker fees
    19,685             19,685       15,841             15,841  
Compensation and benefits
    23,872       (6,846 )(1)     17,026       16,645             16,645  
Advertising and marketing
    6,873             6,873       5,004             5,004  
Communication and technology
    7,948             7,948       6,429             6,429  
General and administrative
    12,285             12,285       7,903             7,903  
Depreciation and amortization
    4,014             4,014       1,742             1,742  
Interest expense
    39               39       25             25  
 
                                   
 
                                               
Total expenses
    74,716       (6,846 )     67,870       53,589             53,589  
 
                                   
 
                                               
Income before income taxes
    21,411       6,846       28,257       21,040             21,040  
Income tax provision
    632       9,485 (2)     10,117       2,420       5,385 (2)     7,805  
 
                                   
Net income
    20,779       (2,639 )     18,140       18,620       (5,385 )     13,235  
Net income attributable to non-controlling interest
    20,633       (20,633 )(3)           18,620       (18,620 )(3)      
 
                                   
Net income attributable to FXCM Inc.
  $ 146     $ 17,994     $ 18,140     $     $ 13,235     $ 13,235  
 
                                   
 
                                               
Pro Forma fully exchanged, fully diluted shares outstanding
                    75,300 (4)                     75,300 (4)
 
                                           
 
                                               
Adjusted Pro Forma net income per fully exchanged, fully diluted shares outstanding
                  $ 0.24                     $ 0.18  
 
                                           
(1)  
Represents the elimination of onetime charges associated with certain arrangements with a former employee and our CFO as a result of the IPO as well as the equity-based compensation associated with the IPO.
 
(2)  
Represents an adjustment to reflect the assumed effective corporate tax rate of approximately 35.8% and 37.1% for the three months ended December 31, 2010 and 2009, respectively, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. The adjustment assumes full exchange of existing unitholders membership units of Class B common stock of the Company into Class A common stock of the Company.
 
(3)  
Represents the elimination of the non-controlling interest associates with the ownership by existing unitholders of FXCM Holdings, LLC (excluding FXCM Inc.), as if the unitholders had fully exchanged their membership units and Class B common stock of the Company for shares of Class A common stock of the Company.
 
(4)  
Fully diluted shares assuming all unitholders had fully exchanged their membership units and Class B common stock of the Company for shares of Class A common stock of the Company.

 

A-4


 

FXCM Inc.
Adjusted Pro Forma Consolidated Statement of Operations
(In thousands, except per share amounts)
(Unaudited)
                                                 
    Year Ended December 31,  
    2010     2009  
    As             Adjusted     As             Adjusted  
    Reported     Adjustments     Pro Forma     Reported     Adjustments     Pro Forma  
Revenues
                                               
 
                                               
Retail trading revenues
  $ 318,472           $ 318,472     $ 291,668           $ 291,668  
Institutional trading revenues
    27,833             27,833       21,107             21,107  
Interest Income
    2,373             2,373       1,289             1,289  
Other Income
    11,599             11,599       8,666             8,666  
 
                                   
 
                                               
Total revenues
    360,277             360,277       322,730             322,730  
 
                                   
 
                                               
Expenses
                                               
 
                                               
Referring broker fees
    81,365             81,365       76,628             76,628  
Compensation and benefits
    76,195       (6,846 )(1)     69,349       62,588             62,588  
Advertising and marketing
    23,788             23,788       29,355             29,355  
Communication and technology
    27,120             27,120       24,026             24,026  
General and administrative
    38,077             38,077       26,453             26,453  
Depreciation and amortization
    9,306             9,306       6,542             6,542  
Interest expense
    116             116       125             125  
 
                                   
 
                                               
Total expenses
    255,967       (6,846 )     249,121       225,717             225,717  
 
                                   
 
                                               
Income before income taxes
    104,310       6,846       111,156       97,013             97,013  
Income tax provision
    4,149       37,358 (2)     41,507       10,053       25,581 (2)     35,634  
 
                                   
Net income
    100,161       (30,512 )     69,649       86,960       (25,581 )     61,379  
Net income attributable to non-controlling interest
    100,015       (100,015 )(3)           86,960       (86,960 )(3)      
 
                                   
Net income attributable to FXCM Inc.
  $ 146     $ 69,503     $ 69,649     $     $ 61,379     $ 61,379  
 
                                   
 
                                               
Pro Forma fully exchanged, fully diluted shares outstanding
                    75,300 (4)                     75,300 (4)
 
                                           
 
                                               
Adjusted Pro Forma net income per fully exchanged, fully diluted shares outstanding
                  $ 0.92                     $ 0.82  
 
                                           
(1)  
Represents the elimination of onetime charges associated with certain arrangements with a former employee and our CFO as a result of the IPO as well as the equity-based compensation associated with the IPO.
 
(2)  
Represents an adjustment to reflect the assumed effective corporate tax rate of approximately 37.3% and 36.7% for the twelve months ended December 31, 2010 and 2009, respectively, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. The adjustment assumes full exchange of existing unitholders membership units of Class B common stock of the Company into Class A common stock of the Company.
 
(3)  
Represents the elimination of the non-controlling interest associates with the ownership by existing unitholders of FXCM Holdings, LLC (excluding FXCM Inc.), as if the unitholders had fully exchanged their membership units and Class B common stock of the Company for shares of Class A common stock of the Company.
 
(4)  
Fully diluted shares assuming all unitholders had fully exchanged their membership units and Class B common stock of the Company for shares of Class A common stock of the Company.

 

A-5


 

FXCM Inc.
Reconciliation of EBITDA to Net Income
(In thousands)
(Unaudited)
                                                                 
    Three Months Ended December 31,     Twelve Months Ended December 31,  
    Adjusted Pro Forma     U.S. GAAP     Adjusted Pro Forma     U.S. GAAP  
    2010     2009     2010     2009     2010     2009     2010     2009  
 
Revenues
    96,127       74,629       96,127       74,629       360,277       322,730       360,277       322,730  
 
                                                               
Net income attributable to FXCM Inc.
    18,140       13,235       146             69,649       61,379       146        
Net income attributable to noncontrolling interest
                20,633       18,620                   100,015       86,960  
Provision for income taxes
    10,117       7,805       632       2,420       41,507       35,634       4,149       10,053  
Depreciation and amortization
    4,014       1,742       4,014       1,742       9,306       6,542       9,306       6,542  
 
                                               
EBITDA
    32,271       22,782       25,425       22,782       120,462       103,555       113,616       103,555  
 
                                               

 

A-6