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8-K - FORM 8-K - Global Brokerage, Inc. | c13341e8vk.htm |
Exhibit 99.1
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 entitys 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 worlds 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 Companys
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 SECs
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 FXCMs client offering is No Dealing Desk forex trading. Clients benefit from
FXCMs 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. FXCMs 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
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
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)
(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)
(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 FXCMs results across several
periods and facilitate an understanding of FXCMs 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 Companys 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 Companys 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 Companys 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)
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)
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)
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