SOURCE: GFI Group

GFI Group

February 22, 2011 16:15 ET

GFI Group Inc. Announces Fourth Quarter and Full Year 2010 Results

NEW YORK, NY--(Marketwire - February 22, 2011) - GFI Group Inc. (NYSE: GFIG)

--  Fourth Quarter
    -- GAAP Total Revenues: $222.0 Million; Non-GAAP Total Revenues: $217.1
       Million
    -- GAAP Net Revenues: $196.2 Million; Non-GAAP Net Revenues: $191.3
       Million
    -- GAAP Net Income: $4.3 Million or $0.03 per Diluted Share
    -- Non-GAAP Net Income: $3.6 Million or $0.03 per Diluted Share
--  Full Year
    -- GAAP Total Revenues: $862.1 Million; Non-GAAP Total Revenues: $861.1
       Million
    -- GAAP Net Revenues: $794.6 Million; Non-GAAP Net Revenues: $793.5
       Million
    -- GAAP Net Income: $25.6 Million or $0.20 per Diluted Share
    -- Non-GAAP Net Income: $33.6 Million or $0.27 per Diluted Share
--  Quarterly Cash Dividend Declared of $0.05 per Share

GFI Group Inc. (NYSE: GFIG), a leading provider of wholesale brokerage services, clearing services, electronic execution and trading support products for global financial markets, reported today its financial results for the fourth quarter and year ended December 31, 2010.

Highlights

--  GAAP total revenues for the fourth quarter of 2010 were $222.0 million
    compared with $185.6 million in the fourth quarter of 2009, an increase
    of 19.6% that was largely attributable to the July 2010 acquisition of
    the Kyte Group ("Kyte"). On a non-GAAP basis, total revenues increased
    17.9% to $217.1 million from $184.1 million in the fourth quarter of
    2009.

--  Beginning with this release GFI will report "net revenues," defined
    as total revenues net of certain direct incremental costs associated
    with those revenues, such as interest and transaction-based expenses.
    Included in transaction-based expenses are clearing fees, which were
    formerly part of the non-compensation expense category. This
    presentation is in line with comparable peer company practice related
    to clearing services. GAAP net revenues were $196.2 million for the
    fourth quarter of 2010, an increase of 9.9% from $178.6 million in the
    fourth quarter of 2009. On a non-GAAP basis, net revenues increased
    8.0% to $191.3 million from $177.2 million in the fourth quarter of
    2009.

--  Brokerage revenues for the fourth quarter of 2010 were up 4.9% to
    $176.8 million compared with $168.7 million in the fourth quarter
    of 2009.

--  Compensation and employee benefits expense in the fourth quarter of
    2010 was 70.9% of net revenues on a GAAP basis and 71.9% on a non-GAAP
    basis. This compares with 87.4% of net revenues on a GAAP basis and
    70.8% of net revenues on a non-GAAP basis in the fourth quarter of
    2009.

--  Non-compensation expenses were 28.7% of net revenues on a GAAP basis
    and 27.3% on a non-GAAP basis in the fourth quarter of 2010. This
    compares with 26.9% of net revenues on a GAAP basis and 25.9% on a
    non-GAAP basis in the fourth quarter of 2009. 

--  Net income for the fourth quarter of 2010 was $4.3 million, or $0.03
    per diluted share, compared with a net loss of $14.5 million, or a
    $0.12 net loss per diluted share, in the fourth quarter of 2009. On a
    non-GAAP basis, net income was $3.6 million, or $0.03 per diluted
    share, for the fourth quarter of 2010, compared with non-GAAP net
    income of $4.5 million, or $0.04 per diluted share in the fourth
    quarter of 2009.

--  For the full year 2010, GAAP total revenues were $862.1 million
    compared with $818.7 million for 2009. GAAP net revenues were $794.6
    million for full year 2010 compared to $788.4 million in 2009. GAAP net
    income for 2010 was $25.6 million or $0.20 per diluted share compared
    to $16.3 million or $0.13 per diluted share for 2009. On a non-GAAP
    basis, total revenues for full year 2010 were $861.1 million compared
    with $814.4 million in 2009, while net revenue was $793.5 million
    for full year compared with $784.0 million for 2009. Net income was
    $33.6 million or $0.27 per diluted share for full year 2010 on a
    non-GAAP basis, compared with $39.0 million or $0.32 per diluted share
    for 2009 on a non-GAAP basis.

Michael Gooch, Chairman and Chief Executive Officer of GFI, commented: "Our brokerage revenues for the fourth quarter grew by almost 5% and net revenues grew by 9.9% on a GAAP basis and 8% on a non-GAAP basis over the fourth quarter of 2009. Growth in financial and commodity product revenues was partially offset by lower revenues from cash fixed income and equity products.

"During the quarter, we continued to selectively hire and invest in trading technologies as we position GFI to be a significant participant in the new regulatory world for financial services. Over the past several quarters, we implemented matching technology on various fixed income and financial product desks globally and added significant functionality to our EnergyMatch® platforms in the U.S. and Europe. Additionally, we added new products and functionality to our leading Trayport® and Fenics® product suites. Although this investment was a drag on our bottom line in the latter half of 2010, we believe that the solid traction of GFI's proprietary trading technologies, matching sessions and request for quote systems, among other areas will be reflected in future operating results. Our strategy continues to focus on deploying technology and selectively recruiting brokerage staff to enhance market position and gain market share.

"We remain actively engaged with regulators in the U.S. and Europe on the implementation of new regulations for over-the-counter derivative markets. We are confident that GFI will successfully register with the SEC and CFTC as a swap execution facility or 'SEF' and provide institutional market participants with access to GFI's deep liquidity, market expertise and outstanding trading technology.

"Looking at our preliminary results through mid-February, excluding Kyte, brokerage revenues are tracking down approximately 3.5% compared with prior year results through the same period."

Mr. Gooch concluded: "We are pleased to declare a quarterly cash dividend of $0.05 per share to our shareholders."

Revenues

For the fourth quarter of 2010, total revenues were $222.0 million on a GAAP basis and $217.1 million on a non-GAAP basis. This compares with total revenues of $185.6 million on a GAAP basis and $184.1 million on a non-GAAP basis in the fourth quarter of 2009. Net revenues were $196.2 million on a GAAP basis and $191.3 million on a non-GAAP basis in the fourth quarter of 2010 compared with $178.6 million on a GAAP basis and $177.2 million on a non-GAAP basis in the fourth quarter of 2009. Brokerage revenues in the fourth quarter of 2010 were $176.8 million compared with $168.7 million in the fourth quarter of 2009.

Revenues from financial and commodity products increased 23.9% and 12%, respectively, while fixed income product revenues were flat and equity product revenues decreased 8.1%, in the fourth quarter of 2010 compared with the fourth quarter of 2009. By geographic region, brokerage revenues increased 29.4% in Asia-Pacific and 5.0% in EMEA, while remaining flat in the Americas, as compared to the fourth quarter of 2009.

Revenues from trading software, analytics and market data products for the fourth quarter of 2010 were $16.3 million, an increase of 11.4% from the same period of 2009.

Expenses

For the fourth quarter of 2010, compensation and employee benefits expense was $139.1 million and $137.5 million on a GAAP and non-GAAP basis, respectively. This compared with $156.1 million on a GAAP basis and $125.5 million on a non-GAAP basis in the fourth quarter of 2009. Non-GAAP compensation expense in the fourth quarter of 2010 excluded $1.6 million related to contract restructuring in connection with an acquisition completed in the quarter. Non-GAAP compensation and employee benefits expense in the fourth quarter of 2009 excluded $30.6 million in pre-tax charges related to a front-office restructuring and the renegotiation of certain employment agreements in the fourth quarter of 2009. Compensation and employee benefits expense was 70.9% of net revenues on a GAAP basis and 71.9% of net revenues on a non-GAAP basis in the fourth quarter of 2010 compared with 87.4% of net revenues on a GAAP basis and 70.8% of net revenues on a non-GAAP basis in the fourth quarter of 2009.

Non-compensation expenses for the fourth quarter of 2010 on a GAAP basis were $56.4 million or 28.7% of net revenues on a GAAP basis, compared with $48.0 million or 26.9% of total net revenues in the fourth quarter of 2009. On a non-GAAP basis, non-compensation expenses for the fourth quarter of 2010 were $52.3 million, or 27.3% of net revenues, compared with $45.8 million, or 25.9% of net revenues, in the fourth quarter of 2009.

The effective tax rate for 2010 was 18.5% on a GAAP basis and 25% on a non-GAAP basis, compared to 30.0% on a GAAP basis and 35.5% on a non-GAAP basis for 2009.

Earnings

On a GAAP basis, net income for the fourth quarter of 2010 was $4.3 million, or $0.03 per diluted share, compared with net loss of $14.5 million, or $0.12 per diluted share, in the fourth quarter of 2009. On a non-GAAP basis, net income for the fourth quarter of 2010 was $3.6 million, or $0.03 per diluted share, compared with $4.5 million, or $0.04 per diluted share, for the fourth quarter of 2009.

Full Year Results

Total revenues and net revenues for the year ended December 31, 2010 were $862.1 million and $794.6 million, respectively, on a GAAP basis, compared to total revenues and net revenues of $818.7 million and $788.4 million, respectively, for the year ended December 31, 2009. Net income was $25.6 million, or $0.20 per diluted share, for the year ended December 31, 2010 compared with net income of $16.3, million or $0.13 per diluted share, for 2009.

On a non-GAAP basis, total revenues and net revenues for the full year 2010 were $861.1 million and $793.5 million, respectively, compared to total revenues and net revenues of $814.4 million and $784.0 million, respectively, for the year ended December 31, 2009. Net income was $33.6 million, or $0.27 per diluted share, for the year ended December 31, 2010 compared with net income of $39.0 million, or $0.32 per diluted share, for 2009.

Non-GAAP Financial Measures

To supplement GFI's unaudited financial statements presented in accordance with GAAP, the Company uses certain non-GAAP measures of financial performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. The non-GAAP financial measures used by GFI include non-GAAP total revenues, non-GAAP net revenues, non-GAAP net income, non-GAAP diluted earnings per share and adjusted EBITDA. These non-GAAP financial measures currently exclude amortization of acquired intangibles and certain other items that management views as non-operating or non-recurring from the Company's statement of income as detailed in the reconciliation included in the financial tables attached to this release.

In addition, GFI may consider whether other significant non-operating or non-recurring items that arise in the future should also be excluded in calculating the non-GAAP financial measures it uses. The non-GAAP financial measures also take into account income tax adjustments with respect to the excluded items.

GFI believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding the Company's performance by excluding certain items that may not be indicative of the Company's core business, operating results or future outlook. GFI's management uses, and believes that investors benefit from referring to these non-GAAP financial measures in assessing the Company's operating results, as well as when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate comparisons of the Company's performance to prior periods.

In addition to the reasons stated above, which are generally applicable to each of the items GFI excludes from its non-GAAP financial measures, the Company believes it is appropriate to exclude amortization of acquired intangibles because when analyzing the operating performance of an acquired business, GFI's management focuses on the total return provided by the investment (i.e., operating profit generated from the acquired entity as compared to the purchase price paid) without taking into consideration any charges for allocations made for accounting purposes. Further, because the purchase price for an acquisition necessarily reflects the accounting value assigned to intangible assets, when analyzing the operating performance of an acquisition in subsequent periods, the Company's management excludes the GAAP impact of acquired intangible assets on its financial results. GFI believes that such an approach is useful in understanding the long-term return provided by an acquisition and that investors benefit from a supplemental non-GAAP financial measure that excludes the accounting expense associated with acquired intangible assets.

A reconciliation of the non-GAAP amounts to GAAP amounts is included in the financial tables attached to this release.

Dividend Declaration

The Board of Directors of GFI Group has declared a quarterly cash dividend of $0.05 per share payable on March 31, 2011 to shareholders of record on March 17, 2011.

Conference Call

GFI has scheduled an investor conference call to discuss its fourth quarter and year end results at 8:30 a.m. (Eastern Time) on Wednesday, February 23, 2011. Those wishing to listen to the live conference call via telephone should dial 866-356-3095 in North America, passcode 15943449; and +1 617-597-5391 in Europe, same passcode.

A live audio web cast of the conference call will be available on the Investor Relations section of GFI's Website. For web cast registration information, please visit: http://www.gfigroup.com. Following the conference call, an archived recording will be available at the same site.

Supplementary Financial Information

GFI Group has posted details of its historical monthly brokerage revenues on the Investor Relations page of its web site under the heading Supplementary Financial Information. The Company currently plans to post this information quarterly in conjunction with its announcement of earnings, but does not undertake a responsibility to continue to provide or update such information.

About GFI Group Inc.

GFI Group Inc. (NYSE: GFIG) is a leading provider of wholesale brokerage services, clearing services, electronic execution and trading support products for global financial markets. GFI Group Inc. provides brokerage services, market data, trading platform and analytics software products to institutional clients in markets for a range of fixed income, financial, equity and commodity instruments.

Headquartered in New York, GFI was founded in 1987 and employs more than 1,900 people with additional offices in London, Paris, Hong Kong, Seoul, Tokyo, Singapore, Sydney, Cape Town, Santiago, Bogota, Dubai, Dublin, Tel Aviv, Calgary, Los Angeles, Englewood (NJ) and Sugar Land (TX). GFI Group Inc. provides services and products to over 2,400 institutional clients, including leading investment and commercial banks, corporations, insurance companies and hedge funds. Its brands include GFI(SM), GFInet®, CreditMatch®, GFI ForexMatch®, EnergyMatch®, FENICS®, Starsupply®, Amerex®, Trayport® and Kyte®.

Forward-looking statement

Certain matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate," "believe," "estimate," "may," "might," "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of GFI Group Inc. (the "Company") and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: economic, political and market factors affecting trading volumes; securities prices or demand for the Company's brokerage services; competition from current and new competitors; the Company's ability to attract and retain key personnel, including highly-qualified brokerage personnel; the Company's ability to identify and develop new products and markets; changes in laws and regulations governing the Company's business and operations or permissible activities; the Company's ability to manage its international operations; financial difficulties experienced by the Company's customers or key participants in the markets in which the Company focuses its brokerage services; the Company's ability to keep up with technological changes; uncertainties relating to litigation and the Company's ability to assess and integrate acquisition prospects. Further information about factors that could affect the Company's financial and other results is included in the Company's filings with the Securities and Exchange Commission. The Company does not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

                      GFI Group Inc. and Subsidiaries
            Consolidated Statements of Operations (unaudited)
              (In thousands except share and per share data)



                           Three Months Ended       Twelve Months Ended
                              December 31,              December 31,
                        ------------------------  -------------------------
                            2010         2009         2010         2009
                        -----------  -----------  ------------ ------------
Revenues
   Agency commissions   $   127,774  $   115,043  $    534,239 $    481,326
   Principal
    transactions             49,064       53,608       215,563      270,378
                        -----------  -----------  ------------ ------------
        Total brokerage
         revenues           176,838      168,651       749,802      751,704
   Clearing services
    revenues                 20,325            -        41,878            -
   Interest income from
    clearing services           439            -           671            -
   Equity in earnings
    of unconsolidated
    brokerage
    businesses                1,853            -         3,485            -
   Software, analytics
    and market data          16,313       14,649        60,637       54,347
   Other income               6,235        2,260         5,640       12,656
                        -----------  -----------  ------------ ------------
     Total revenues         222,003      185,560       862,113      818,707
                        -----------  -----------  ------------ ------------

Interest and
 transaction-based
 expenses
   Transaction fees on
    clearing services        19,189            -        39,918            -
   Transaction fees on
    brokerage services        6,348        6,988        27,213       30,354
   Interest expense
    from clearing
    services                    289            -           427            -
                        -----------  -----------  ------------ ------------
     Total interest and
      transaction-based
      expenses               25,826        6,988        67,558       30,354
                        -----------  -----------  ------------ ------------
     Revenues, net of
      interest and
      transaction-based
      expenses              196,177      178,572       794,555      788,353
                        -----------  -----------  ------------ ------------

Expenses
   Compensation and
    employee benefits       139,131      156,053       558,248      583,315
   Communications and
    market data              13,210       11,864        49,579       46,263
   Travel and promotion      10,618        9,509        37,517       33,819
   Rent and occupancy         5,860        5,343        22,413       20,325
   Depreciation and
    amortization              9,552        7,959        34,431       31,493
   Professional fees          6,050        4,674        25,949       18,402
   Interest on
    borrowings                2,692        2,645        11,063       10,540
   Other expenses             8,369        6,046        23,552       20,926
                        -----------  -----------  ------------ ------------
     Total other
      expenses              195,482      204,093       762,752      765,083
                        -----------  -----------  ------------ ------------

Income (loss) before
 provision for (benefit
 from) income taxes             695      (25,521)       31,803       23,270

(Benefit from)
 provision for income
 taxes                       (3,759)     (11,070)        5,884        6,982

Net income (loss)
 before attribution to
 non-controlling
 shareholders                 4,454      (14,451)       25,919       16,288
                        -----------  -----------  ------------ ------------
 Less: Net income
  (loss) attributable
  to non-controlling
  interests                     153            -           304            -
                        -----------  -----------  ------------ ------------
GFI's net income (loss) $     4,301  $   (14,451) $     25,615 $     16,288
                        ===========  ===========  ============ ============


Basic earnings (loss)
 per share              $      0.04  $     (0.12) $       0.21 $       0.14
                        ===========  ===========  ============ ============
Diluted earnings (loss)
 per share              $      0.03  $     (0.12) $       0.20 $       0.13
                        ===========  ===========  ============ ============

Weighted average shares
 outstanding - basic    120,916,750  118,359,826   120,275,918  118,178,493

Weighted average shares
 outstanding - diluted  128,064,439  118,359,826   125,522,128  121,576,767





                        GFI Group Inc. and Subsidiaries
            Consolidated Statements of Operations (unaudited)
                      As a Percentage of Net Revenues

                                 Three Months Ended   Twelve Months Ended
                                    December 31,          December 31,
                                --------------------  --------------------
                                  2010       2009       2010       2009
                                ---------  ---------  ---------  ---------
Revenues
   Agency commissions                65.1%      64.4%      67.2%      61.1%
   Principal transactions            25.0%      30.0%      27.1%      34.3%
                                ---------  ---------  ---------  ---------
        Total brokerage
         revenues                    90.1%      94.4%      94.3%      95.4%
   Clearing services revenues        10.4%       0.0%       5.3%       0.0%
   Interest income from
    clearing services                 0.2%       0.0%       0.1%       0.0%
   Equity in earnings of
    unconsolidated brokerage
    businesses                        0.9%       0.0%       0.5%       0.0%
   Software, analytics and
    market data                       8.3%       8.2%       7.6%       6.9%
   Other income                       3.2%       1.3%       0.7%       1.6%
                                ---------  ---------  ---------  ---------
     Total revenues                 113.1%     103.9%     108.5%     103.9%
                                ---------  ---------  ---------  ---------

Interest and transaction-based
 expenses
   Transaction fees on clearing
    services                          9.8%       0.0%       5.0%       0.0%
   Transaction fees on
    brokerage services                3.2%       3.9%       3.4%       3.9%
   Interest expense from
    clearing services                 0.1%       0.0%       0.1%       0.0%
                                ---------  ---------  ---------  ---------
     Total interest and
      transaction-based expenses     13.1%       3.9%       8.5%       3.9%
                                ---------  ---------  ---------  ---------
     Revenues, net of interest
      and transaction-based
      expenses                      100.0%     100.0%     100.0%     100.0%
                                ---------  ---------  ---------  ---------

Expenses
   Compensation and employee
    benefits                         70.9%      87.4%      70.3%      74.0%
   Communications and market
    data                              6.7%       6.6%       6.2%       5.9%
   Travel and promotion               5.4%       5.3%       4.7%       4.3%
   Rent and occupancy                 3.0%       3.0%       2.8%       2.6%
   Depreciation and
    amortization                      4.8%       4.5%       4.3%       4.0%
   Professional fees                  3.1%       2.6%       3.3%       2.3%
   Interest on borrowings             1.4%       1.5%       1.4%       1.3%
   Other expenses                     4.3%       3.4%       3.0%       2.6%
                                ---------  ---------  ---------  ---------
     Total other expenses            99.6%     114.3%      96.0%      97.0%
                                ---------  ---------  ---------  ---------

Income (loss) before provision
 for (benefit from) income
 taxes                                0.4%     -14.3%       4.0%       3.0%

(Benefit from) provision for
 income taxes                        -1.9%      -6.2%       0.7%       0.9%

                                ---------  ---------  ---------  ---------
Net income (loss) before
 attribution to non-controlling
 shareholders                         2.3%      -8.1%       3.3%       2.1%
                                ---------  ---------  ---------  ---------

 Less: Net income (loss)
  attributable to
  non-controlling interests           0.1%       0.0%       0.0%       0.0%
                                ---------  ---------  ---------  ---------
GFI's net income (loss)               2.2%      -8.1%       3.3%       2.1%
                                =========  =========  =========  =========





                      GFI Group Inc. and Subsidiaries
                    Selected Financial Data (unaudited)
                          (Dollars in thousands)

                                    Three Months Ended  Twelve Months Ended
                                       December 31,        December 31,
                                    ------------------- -------------------
                                      2010      2009      2010      2009
                                    --------- --------- --------- ---------

Brokerage Revenues by Product
 Categories:
        Fixed Income                $  52,412 $  52,650 $ 237,681 $ 276,377
        Financial                      38,981    31,469   155,945   129,131
        Equity                         42,194    45,900   173,519   192,820
        Commodity                      43,251    38,632   182,657   153,376
                                    --------- --------- --------- ---------

           Total brokerage revenues $ 176,838 $ 168,651 $ 749,802 $ 751,704
                                    ========= ========= ========= =========


Brokerage Revenues by Geographic
 Region:
        Americas                    $  72,236 $  72,325 $ 293,344 $ 325,359
        Europe, Middle East, and
         Africa                        86,243    82,136   379,660   364,752
        Asia-Pacific                   18,359    14,190    76,798    61,593
                                    --------- --------- --------- ---------

           Total brokerage revenues $ 176,838 $ 168,651 $ 749,802 $ 751,704
                                    ========= ========= ========= =========


                                     December December
                                        31,      31,
                                       2010     2009
                                    --------- ---------
Consolidated Statement of Financial
 Condition Data:
        Cash and cash equivalents   $ 313,875 $ 342,379
        Deposits with clearing
         organizations                 26,845    11,065
                                    --------- ---------
        Total balance sheet cash on
         hand                         340,720   353,444
        Balance sheet cash per
         share                           2.79      2.98

        Total assets (1)            1,252,595   952,094
        Total debt, including
         current portion              192,446   173,688
        Stockholders' equity          490,711   484,102


Selected Statistical Data:
        Brokerage personnel
         headcount (2)                  1,161     1,082
        Employees                       1,990     1,768
        Broker productivity for the
         period (3)                 $     156 $     155



(1) Total assets include receivables from brokers, dealers and clearing
    organizations of $229.6 million and $87.7 million at December 31, 2010
    and December 31, 2009, respectively. These receivables primarily
    represent securities transactions entered into in connection with our
    matched principal business which have not settled as of their stated
    settlement dates, as well as balances with clearing organizations.
    These receivables are substantially offset by corresponding payables to
    brokers, dealers and clearing organizations for these unsettled
    transactions.

(2) Brokerage personnel headcount includes brokers, traders, trainees and
    clerks.

(3) Broker productivity is calculated as brokerage revenues divided by
    average monthly brokerage personnel headcount for the quarter.




                      GFI Group Inc. and Subsidiaries
     Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
               (In thousands except share and per share data)

                           Three Months Ended       Twelve Months Ended
                              December 31,              December 31,
                        ------------------------  ------------------------
                            2010         2009         2010         2009
                        -----------  -----------  -----------  -----------
GAAP revenues           $   222,003  $   185,560  $   862,113  $   818,707
  Mark-to-market (gain)
   loss on forward
   hedges of future
   foreign currency
   revenues                    (199)      (1,415)       2,882       (3,617)
  Fair value
   mark-to-market on
   future purchase
   commitment                (1,009)           -         (200)           -
  Remeasurement of
   previously held
   equity interest           (3,695)           -       (3,695)           -
  Gain on exchange of
   cost-method
   investments                    -            -            -         (697)
                        -----------  -----------  -----------  -----------
Total Non-GAAP revenues     217,100      184,145      861,100      814,393

GAAP Interest and
 transaction-based
 expenses                    25,826        6,988       67,558       30,354
                        -----------  -----------  -----------  -----------

Non-GAAP revenues, net
 of interest and
 transaction based
 expenses                   191,274      177,157      793,542      784,039
                        -----------  -----------  -----------  -----------

GAAP other expenses         195,482      204,093      762,752      765,083
  Amortization of
   intangibles               (2,874)      (1,381)      (7,815)      (5,465)
  Professional & other
   fees for business
   development
   activities                  (288)           -       (4,159)           -
  Contract restructuring
   in contemplation of
   acquisition               (1,597)           -       (1,597)           -
  Loss on settlement of
   pre-acquisition
   receivable                  (890)           -         (890)           -
  Severance and other
   restructuring                  -      (31,393)           -      (36,037)
                        -----------  -----------  -----------  -----------
Non-GAAP other expenses     189,833      171,319      748,291      723,581
                        -----------  -----------  -----------  -----------

  Income tax impact on
   Non-GAAP items             1,492       12,365        5,429       14,481
Non-GAAP (benefit from)
 provision for income
 taxes                       (2,267)       1,295       11,313       21,463

Net income (loss)
 attributable to
 non-controlling
 interests                      153            -          304            -
                        -----------  -----------  -----------  -----------

GFI's Non-GAAP net
 income (loss)          $     3,555  $     4,543  $    33,634  $    38,995
                        ===========  ===========  ===========  ===========

Non-GAAP diluted net
 income per share       $      0.03  $      0.04  $      0.27  $      0.32
                        ===========  ===========  ===========  ===========

Weighted average
 Non-GAAP shares
 outstanding - diluted  128,064,439  122,153,771  125,522,128  121,576,767



GFI Group Inc.
Adjusted EBITDA

($ in '000's,                                                   Last twelve
 except per share                                                 months
 amounts)           4Q09      1Q10     2Q10     3Q10     4Q10     (LTM)
                  --------  -------  -------  -------  -------  -----------

Net Income (loss)
 per U.S. GAAP
 before attribution
 to non-controlling
 interests        $(14,451) $13,376  $10,424  $(2,335) $ 4,454

Plus: Net (income)
 loss attributable
 to non-controlling
 interests               -        -        -     (151)    (153)
                  --------  -------  -------  -------  -------
  GFI's Net
   Income          (14,451)  13,376   10,424   (2,486)   4,301

Plus/Less:
 Extraordinary
 and other
 non-recurring
 (gains) and losses
 (i.e., non-GAAP
 adjustments)       31,359    1,495    2,195    9,012      746

Plus: Interest
 expense             2,645    2,575    2,730    3,204    2,981

Less: Interest
 income               (148)    (240)     (77)    (914)    (774)

Plus: Income tax
 expense
 (benefit)         (11,070)   6,738    3,955   (1,050)  (3,759)

Plus: Depreciation
 and amortization
 expense (excluding
 intangibles)        6,578    6,787    6,414    6,737    6,678

Plus: Amortization
 of RSU's            6,256    6,784    6,511    6,894    6,485

Plus: Amortization
 of cash sign-on
 bonuses             7,852    5,192    8,344    5,070    5,823

                  ========  =======  =======  =======  =======  ===========
Adjusted EBITDA   $ 29,021  $42,707  $40,496  $26,467  $22,481  $   132,151
                  ========  =======  =======  =======  =======  ===========

Weighted average
 shares
 outstanding -
 diluted                                                        125,522,128

Adjusted EBITDA
 per share
 (pre-tax)                                                      $      1.05

Contact Information

  • Investor Relations Contacts:
    Christopher Giancarlo
    Executive Vice President - Corporate Development
    Email Contact

    Chris Ann Casaburri
    Investor Relations Manager
    212-968-4167
    Email Contact

    Media Contact:
    Patricia Gutierrez
    Vice President - Public Relations
    212-968-2964
    Email Contact