BGC Partners Updates Its Outlook for the Second Quarter of 2014

NEW YORK, June 26, 2014 /CNW/ - 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 second quarter of 2014. 
The Company expects its financial results for the quarter ending June 30, 2014 
to be around the mid-point of the range of its previously stated guidance for 
revenues and earnings.  BGC's second quarter outlook was originally published 
in a press release dated May 1, 2014 as follows: 
Second Quarter 2014 Outlook Compared with Second Quarter 2013 Results 
*   The Company expected to generate distributable earnings revenues of 
between approximately $420 million and $440 million compared with $471.1 
million.  The year earlier figure was approximately $447 million, excluding 
eSpeed.(1 )*   BGC anticipated pre-tax distributable earnings to be between 
approximately $47 million and $55 million versus $53.8 million. The prior 
period amount was approximately $40 million, excluding eSpeed. *   The Company 
expected its effective tax rate for distributable earnings to be around 15 
percent, compared with 14.5 percent.(2) 
This guidance did not include any revenues or earnings from the planned 
acquisition of Cornish & Carey Commercial, which is expected to close in the 
middle of 2014.  BGC intends to report its second quarter financial results 
before the market open on July 31, 2014.  Further details regarding this 
announcement and the related conference call will be forthcoming. 
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 the most recent 
earnings 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 this document. 
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. BGC Partners is led by Chairman and Chief Executive Officer 
Howard W. Lutnick. 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) On June 28, 2013, BGC sold its fully electronic trading platform for 
benchmark U.S. Treasury Notes and Bonds to NASDAQ OMX Group, Inc ("NASDAQ 
OMX").  For the purposes of this document, the assets sold are referred to as 
"eSpeed." 
(2) Investors and analysts should note that 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 second 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 40.1 million, all 
based on distributable earnings. 
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SOURCE  BGC Partners, Inc. 
Media, Hannah Sloane, 212-294-7938, Sarah Laufer, 212-915-1008, Investors, 
Jason McGruder, 212-829-4988, Jason Chryssicas, 212-915-1987 
http://www.bgcpartners.com 
http://photos.prnewswire.com/prnh/20110720/MM38935LOGO 
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CO: BGC Partners, Inc.
ST: New York
NI: FIN REL EST ERN  
-0- Jun/26/2014 20:05 GMT
 
 
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