NEW YORK, March 31, 2014 /PRNewswire/ -- BGC Partners, Inc. (NASDAQ: BGCP) ("BGC Partners," "BGC," or "the Company"), a leading global brokerage company servicing the financial and real estate markets, today announced that it has updated its outlook for the first quarter of 2014.

The Company expects its financial results for the quarter ending March 31, 2014 to be around the high-end of the range of its previously stated guidance for revenues and earnings. The Company's first quarter outlook was originally published in its financial results press release dated February 12, 2014 as follows:

First Quarter 2014 Outlook Compared with First Quarter 2013 Results



    *    The Company expected to
         generate distributable
         earnings revenues of
         between approximately $410
         million and $440 million
         compared with $449.8
         million.

    *    BGC Partners anticipated
         pre-tax distributable
         earnings to be between
         approximately $41 million
         and $52 million versus
         $45.1 million.

    *    BGC Partners expected its
         effective tax rate for
         distributable earnings to
         remain around 15 percent
         for the full year 2014.[1]

BGC's first quarter 2014 financial results announcement is currently expected to be issued before the market open on Thursday, May 1, 2014. Confirmation of this date and details of the related conference call will be forthcoming in a later press release.

Distributable Earnings Defined
BGC Partners uses non-GAAP financial measures including "revenues for distributable earnings," "pre-tax distributable earnings" and "post-tax distributable earnings," which are supplemental measures of operating performance that are used by management to evaluate the financial performance of the Company and its subsidiaries. BGC Partners believes that distributable earnings best reflect the operating earnings generated by the Company on a consolidated basis and are the earnings which management considers available for distribution to BGC Partners, Inc. and its common stockholders, as well as to holders of BGC Holdings partnership units during any period.

As compared with "income (loss) from operations before income taxes," "net income (loss) for fully diluted shares," and "fully diluted earnings (loss) per share," all prepared in accordance with GAAP, distributable earnings calculations primarily exclude certain non-cash compensation and other expenses which generally do not involve the receipt or outlay of cash by the Company, which do not dilute existing stockholders, and which do not have economic consequences, as described below. In addition, distributable earnings calculations exclude certain gains and charges that management believes do not best reflect the ordinary operating results of BGC.

Revenues for distributable earnings are defined as GAAP revenues excluding the impact of BGC Partners, Inc.'s non-cash earnings or losses related to its equity investments, such as in Aqua Securities, L.P. and ELX Futures, L.P., and its holding company general partner, ELX Futures Holdings LLC. Revenues for distributable earnings include the collection of receivables which would have been recognized for GAAP other than for the effect of acquisition accounting. Revenues for distributable earnings also exclude certain one-time or unusual gains that are recognized under GAAP, because the Company does not believe such gains are reflective of its ongoing, ordinary operations.

Pre-tax distributable earnings are defined as GAAP income (loss) from operations before income taxes excluding items that are primarily non-cash, non-dilutive, and non-economic, such as:



    *    Non-cash stock-based equity
         compensation charges for REUs
         granted or issued prior to the
         merger of BGC Partners, Inc. with
         and into eSpeed, as well as post-
         merger non-cash, non-dilutive
         equity-based compensation
         related to partnership unit
         exchange or conversion.

    *    Allocations of net income to
         founding/working partner and
         other limited partnership units,
         including REUs, RPUs, PSUs, LPUs,
         and PSIs.

    *    Non-cash asset impairment
         charges, if any.

Distributable earnings calculations also exclude charges related to purchases, cancellations or redemptions of partnership interests and certain unusual, one-time or non-recurring items, if any.

"Compensation and employee benefits" expense for distributable earnings will also include broker commission payouts relating to the aforementioned collection of receivables.

BGC's definition of distributable earnings also excludes certain gains and charges with respect to acquisitions, dispositions, or resolutions of litigation. This exclusion pertains to the one-time gain related to the NASDAQ OMX transaction. Management believes that excluding these gains and charges best reflects the operating performance of BGC. However, because NASDAQ OMX is expected to pay BGC in an equal amount of stock on a regular basis for 15 years as part of the transaction, the payments associated with BGC's receipt of such stock are expected to be included in the Company's calculation of distributable earnings. To make quarter-to-quarter comparisons more meaningful, one-quarter of the annual contingent earn-out amount will be included in the Company's calculation of distributable earnings each quarter as "other revenues."

Since distributable earnings are calculated on a pre-tax basis, management intends to also report "post-tax distributable earnings" and "post-tax distributable earnings per fully diluted share":



    *    "Post-tax distributable
         earnings" are defined
         as pre-tax
         distributable earnings
         adjusted to assume that
         all pre-tax
         distributable earnings
         were taxed at the same
         effective rate.

    *    "Post-tax distributable
         earnings per fully
         diluted share" are
         defined as post-tax
         distributable earnings
         divided by the
         weighted-average
         number of fully diluted
         shares for the period.

BGC's distributable earnings per share calculations assume either that: 



    *    The fully diluted share
         count includes the
         shares related to the
         dilutive instruments,
         such as the Convertible
         Senior Notes, but
         excludes the associated
         interest expense, net of
         tax, when the impact
         would be dilutive; or

    *    The fully diluted share
         count excludes the
         shares related to these
         instruments, but
         includes the associated
         interest expense, net of
         tax.

Each quarter, the dividend to common stockholders is expected to be determined by the Company's Board of Directors with reference to post-tax distributable earnings per fully diluted share. In addition to the Company's quarterly dividend to common stockholders, BGC Partners expects to pay a pro-rata distribution of net income to BGC Holdings founding/working partner and other limited partnership units, including REUs, RPUs, LPUs, PSUs and PSIs, and to Cantor for its noncontrolling interest. The amount of all of these payments is expected to be determined using the above definition of pre-tax distributable earnings per share.

Certain employees who are holders of RSUs are granted pro-rata payments equivalent to the amount of dividends paid to common stockholders. Under GAAP, a portion of the dividend equivalents on RSUs is required to be taken as a compensation charge in the period paid. However, to the extent that they represent cash payments made from the prior period's distributable earnings, they do not dilute existing stockholders and are therefore excluded from the calculation of distributable earnings.

Distributable earnings is not meant to be an exact measure of cash generated by operations and available for distribution, nor should it be considered in isolation or as an alternative to cash flow from operations or GAAP net income (loss). The Company views distributable earnings as a metric that is not necessarily indicative of liquidity or the cash available to fund its operations.

Pre- and post-tax distributable earnings are not intended to replace the Company's presentation of GAAP financial results. However, management believes that they help provide investors with a clearer understanding of BGC Partners' financial performance and offer useful information to both management and investors regarding certain financial and business trends related to the Company's financial condition and results of operations. Management believes that distributable earnings and the GAAP measures of financial performance should be considered together.

Management does not anticipate providing an outlook for GAAP "revenues," "income (loss) from operations before income taxes," "net income (loss) for fully diluted shares," and "fully diluted earnings (loss) per share," because the items previously identified as excluded from pre-tax distributable earnings and post-tax distributable earnings are difficult to forecast. Management will instead provide its outlook only as it relates to revenues for distributable earnings, pre-tax distributable earnings and post-tax distributable earnings.

For more information on this topic, please see the tables in our most recent financial results press release entitled "Reconciliation of Revenues Under GAAP and Distributable Earnings," and "Reconciliation of GAAP Income to Distributable Earnings" which provide a summary reconciliation between pre- and post-tax distributable earnings and the corresponding GAAP measures for the Company in the periods discussed in our most recent financial results press release.

About BGC Partners, Inc.
BGC Partners is a leading global brokerage company servicing the financial and real estate markets. Products include fixed income securities, interest rate swaps, foreign exchange, equities, equity derivatives, credit derivatives, commercial real estate, commodities, futures, and structured products. BGC also provides a wide range of services, including trade execution, broker-dealer services, clearing, processing, information, and other back-office services to a broad range of financial and non-financial institutions. Through its BGC Trader and BGC Market Data brands, BGC offers financial technology solutions, market data, and analytics related to numerous financial instruments and markets. Through the Newmark Grubb Knight Frank brand, the Company offers a wide range of commercial real estate services including leasing and corporate advisory, investment sales and financial services, consulting, project and development management, and property and facilities management. BGC's customers include many of the world's largest banks, broker-dealers, investment banks, trading firms, hedge funds, governments, corporations, property owners, real estate developers, and investment firms. For more information, please visit www.bgcpartners.com.

BGC, BGC Trader, Grubb & Ellis, Grubb and Newmark are trademarks and service marks of BGC Partners, Inc. and its affiliates. Knight Frank is a service mark of Knight Frank Limited Corp., used with permission.

Discussion of Forward-Looking Statements by BGC Partners
Statements in this document regarding BGC Partners' business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. Except as required by law, BGC undertakes no obligation to release any revisions to any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see BGC's Securities and Exchange Commission filings, including, but not limited to, the risk factors set forth in our public filings, including our most recent Form 10-K and any updates to such risk factors contained in subsequent Form 10-Q or Form 8-K filings.



    [1] BGC's post-tax
     distributable earnings
     per share calculations
     assume either that the
     fully diluted share
     count includes the
     shares related to the
     dilutive instruments,
     such as the Convertible
     Senior Notes, but
     excludes the associated
     interest expense when
     the impact would be
     dilutive, or that the
     fully diluted share
     count excludes the
     shares related to these
     instruments, but
     includes the associated
     interest expense.  In
     the first quarter of
     2014, the pre-tax
     interest expense
     associated with the
     Convertible Senior Notes
     was expected to be $6.2
     million while the post-
     tax interest expense was
     expected to be $5.3
     million, and the
     associated weighted-
     average share count was
     expected to be 40.0
     million, all based on
     distributable earnings.

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SOURCE BGC Partners, Inc.