Bgc Group, Inc. · NASDAQ:BGC
Bgc — BGC Partners — Investor Presentation (September 2018)
80 slides from Bgc's investor presentation, September 2018
Slide 1: General Investor Presentation 3Q 2018
BGC PARTNERS, INC. NASDAQ: BGCP General Investor Presentation 3Q 2018
Slide 2: Disclaimer
DISCLAIMER 2 Discussion of Forward-Looking Statements Statements in this document regarding BGC and Newmark that are not historical facts are “forward-looking statements” that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking stat
Slide 3: Disclaimer (Continued)
DISCLAIMER (CONTINUED) 3 On June 28, 2013, BGC sold its eSpeed business to Nasdaq, Inc. (“Nasdaq”). The purchase consideration consisted of $750 million in cash paid upon closing, plus an expected payment of up to 14.9 million shares of Nasdaq common stock to be paid ratably over 15 years beginning
Slide 4: Disclaimer (Continued - for BGC Partners)
DISCLAIMER (CONTINUED - FOR BGC PARTNERS) 4 Highlights of Consolidated Results (USD millions) 2Q 2018 2Q 2017 Change Revenues $960.1 $848.9 13.1% GAAP income from operations before income taxes 65.9 94.3 (30.1)% GAAP net income for fully diluted shares 50.4 81.9 (38.4)% Pre-tax Adjusted Earnings bef
Slide 5: Disclaimer (for Newmark Group)
DISCLAIMER (FOR NEWMARK GROUP) 5 Certain reclassifications may have been made to previously reported amounts to conform to the current presentation and to show results on a consistent basis across periods. Any such changes would have had no impact on consolidated revenues or earnings for GAAP and wo
Slide 6: General Overview
BGC PARTNERS, INC. 7 bgc € 5! Fenios =3 NEWMARK GENERAL OVERVIEW
Slide 7: Solid Financial Services Business with Significant Opportunities
SOLID FINANCIAL SERVICES BUSINESS WITH SIGNIFICANT OPPORTUNITIES 7 Intermediary-oriented, low-risk business model Strong track record of accretive acquisitions and profitable hiring Diversified revenues by geography & product Dividend of $0.18 per share, for a 6.0% qualified dividend yield1
Slide 8: Consolidated Firm, 2 Companies, Many Businesses
CONSOLIDATED FIRM, 2 COMPANIES, MANY BUSINESSES 8 Financial Services Real Estate Services (BGCP) (NMRK) Voice/Hybrid Fenics Commercial Real Estate Key products include: Key products include: Brokerage & Financing Other Services: • Rates • Interest Rate Derivatives Services: • Global Corporat
Slide 9: Revenue Breakdown
REVENUE BREAKDOWN 9 TTM 2Q18 Segment Revenue Breakdown TTM 2Q18 & 2Q 2018 Global Revenue Breakdown Gains from Corporate, 1% mortgage banking Americas RE APAC activities/ 48% 7% originations, Management, TTM net, 5% Servicing Rates, 15% 2Q18 Americas RE APAC Fees and 7% Other, 13% 48% 2Q18 Corporate
Slide 10: BGC's Front Office Headcount & Productivity
BGC’S FRONT OFFICE HEADCOUNT & PRODUCTIVITY 10 FRONT OFFICE HEADCOUNT FRONT OFFICE PRODUCTIVITY (as of period-end) (period-average, USD Thousands) Yr/Yr change: 0% 4,033 4,047 4,045 4,033 4,034 1,494 1,532 1,554 1,565 1,569 725 660 2,539 2,515 2,491 2,468 2,465 184 198 2Q 2017 3Q 2017 4Q 2017 1Q 201
Slide 11: Financial Services
Overview FINANCIAL SERVICES
Slide 12: Business Overview: Financial Services Segment (2Q 2018)
BUSINESS OVERVIEW: FINANCIAL SERVICES SEGMENT (2Q 2018) 12 Highlights 2Q 2018 Revenue Breakdown (USD $000s) Total revenues increased 11% YoY $480,249 $1,404 – Double-digit percentage increase in brokerage $432,317 $15,370 $1,312 revenues across foreign exchange, and energy $13,322 $87,965 Other an
Slide 13: Business Overview: Fenics
BUSINESS OVERVIEW: FENICS 13 Fenics Net Revenue Growth1 2Q 2018 Fenics Revenue Breakdown2 (USD millions) $243 $223 Data, software $209 and post trade $192 (inter-company) Data, software 20% and post trade 19% FX 10% $101 $78 $81 $71 $48 Credit Rates 25% 27% FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 TT
Slide 14: Strong Record of Successful, Accretive Acquisitions: Financial Services
STRONG RECORD OF SUCCESSFUL, ACCRETIVE ACQUISITIONS: FINANCIAL SERVICES 14 R.P. Martin1 8 Financial Services London Sunrise Acquisitions Rates, FX Primarily Equity Derivatives Maxcor/Eurobrokers (2005) HEAT Energy1 ETC Pollack (2005) Perimeter New York / New Aurel Leven (2006) Electr
Slide 15: Small Slice of Global Execution Revenues = Huge Potential
SMALL SLICE OF GLOBAL EXECUTION REVENUES = HUGE POTENTIAL FOR TRADITIONAL IDBs AND WHOLESALE BROKERS 15 2017 Global Sales & Trading Revenues ≈ $213 BGC, other wholesale financial brokerages, and their execution (in USD billions) peers currently comprise only a small percentage of the total global
Slide 16: Select Financial Results of Post-Spin BGC
SELECT FINANCIAL RESULTS OF POST-SPIN BGC 16 (USD millions) Financial Results Highlights of post-spin BGC 6MTD 6MTD Change Change FY 2017 FY 2016 (USD millions, except per share data) 2018 2017 (%) (%) Revenues $1,015.8 $891.9 13.9% $1,751.0 $1,554.3 12.7% Pre-tax Adjusted Earnings before non-contro
Slide 17: Dividend and Implied Dividend Yield of Post-Spin BGC
DIVIDEND AND IMPLIED DIVIDEND YIELD OF POST-SPIN 17 Post-spin BGC Dividend and Dividend Yield Using Distribution Ratio of 0.4647 (for illustrative purposes only) BGCP stock price $11.93 NMRK stock price $11.52 Distribution ratio of NMRK shares per BGCP share 0.4647 Implied stock price of NMRK (using
Slide 18: Newmark
mE BGC PARTNERS, INC. == Newmark BE [ SBS CSnctecarey SZ/NEWMARK 32 24. Overview NEWMARK
Slide 19: Business Overview: Newmark Highlights
BUSINESS OVERVIEW: NEWMARK HIGHLIGHTS 19 Newmark Group, Inc. revenues increased by 22% YoY in 1H 2018 Newmark Group, Inc. Pre-tax Adjusted Earnings increased by 48% in 1H 2018 Newmark Group, Inc. Adjusted EBITDA before allocations to units increased by 51% in 1H 2018 Details regarding Newmar
Slide 20: Broad Service Offering and Highest Growth in US CRE Sector
BROAD SERVICE OFFERING AND HIGHEST GROWTH IN US CRE SECTOR 20 1 Walker & Marcus & Business Line CBRE JLL C&W Colliers HFF Dunlop Millichap Leasing ✔ ✔ ✔ ✔ ✔ Investment Sales & ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ Mortgage Brokerage Multifamily lending ✔ ✔ ✔ ✔ ✔ (GSE and FHA) Servicing ✔ ✔ ✔ ✔ ✔ Property & Facility ✔ ✔ ✔
Slide 21: YTD 2Q 2018 Revenue Performance
YTD 2Q 2018 REVENUE PERFORMANCE 21 Highlights YTD 2Q 2018 Revenue Growth (US$ millions) › YTD 2Q 2018 management services, servicing fees and other increased 58% YoY1 897.1 Management services, › YTD 2Q 2018 leasing and other commissions 737.7 275.7 servicing fees and other Gains from mortgage banki
Slide 22: Adjusted Earnings & Adjusted EBITDA Performance
ADJUSTED EARNINGS & ADJUSTED EBITDA PERFORMANCE 22 Adjusted EBITDA Pre-tax Adjusted Earnings1 before allocations to units1 (US$ millions) (US$ millions) $450 $400 $434 $400 $350 368 $350 $300 $300 3 $250 $250 $259 $200 217 $200 $150 $178 $150 139 $100 $100 $118 94 $50 $50 $0 $0 TTM 2Q17 TTM 2Q18 YTD
Slide 23: Long-Term Revenue and Productivity Growth
LONG-TERM REVENUE AND PRODUCTIVITY GROWTH 23 Newmark Revenues1 (US$ millions) $1,756 $230 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 TTM 2Q18 Revenue / Producer $474 $467 $622 $680 $707 $806 $826 ($’000) 74% growth from 2012 › Revenue has increased at a CAGR of 37% since FY 2011 › Reven
Slide 24: Successful Track Record of Accretive Acquisitions
SUCCESSFUL TRACK RECORD OF ACCRETIVE ACQUISITIONS 24 4 Acquisitions 9 Acquisitions • Excess Space 2 Acquisitions • Berkeley Point • Computerized Facility Financial Integration • Regency Capital • Frederick Ross • Cincinnati Commercial Partners • Smith Mack Real Estate • Spring11 • Steffner Commercia
Slide 25: Global CRE Services Market Opportunity
GLOBAL CRE SERVICES MARKET OPPORTUNITY 25 MASSIVE POTENTIAL GLOBAL MARKET FOR BROKERAGE AND SERVICES $220B+ 1 $220+ Bn Total Revenue Opportunity1 Large and Highly Total Revenue Fragmented Market Opportunity (FY 2017) TOP 6 COMPANIES The Top 6 CRE Brokerage & Services Firms $27B 2017 Market Share <15
Slide 26: Conclusion
ml BGC PARTNERS, INC. CONCLUSION
Slide 27: NMRK Intends to Complete Spin-Off from BGCP by Year-End 2018
NMRK INTENDS TO COMPLETE SPIN-OFF FROM BGCP BY YEAR-END 2018 27 • NMRK continues to make progress towards the planned spin-off, which BGCP and NMRK intend to complete by the end of 2018. • Newmark Group is working with the rating agencies to obtain its own credit rating and believes that it is well-
Slide 28: Solid Financial Services Business with Significant Opportunities
SOLID FINANCIAL SERVICES BUSINESS WITH SIGNIFICANT OPPORTUNITIES 28 Intermediary-oriented, low-risk business model Strong track record of accretive acquisitions and profitable hiring Diversified revenues by geography & product Dividend of $0.18 per share, for a 6.0% qualified dividend yield1
Slide 29: GAAP Financial Results
ml BGC PARTNERS, INC. GAAP FINANCIAL RESULTS
Slide 30: Select Consolidated GAAP Financial Results
SELECT CONSOLIDATED GAAP FINANCIAL RESULTS 30 Highlights of Consolidated GAAP Results (USD millions, except 2Q 2018 2Q 2017 Change (%) per share data) Revenues under both U.S. Generally Accepted Accounting $960.1 $848.9 13.1% Principles (“GAAP”) and Adjusted Earnings Income from operations before in
Slide 31: Condensed Consolidated Statements of Financial Condition
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) June 30, December 31, 31 2018 2017 Assets Cash and cash equivalents $ 398,469 $ 634,333 Cash segregated under regulatory requirements 423,556 162,457 Securities
Slide 32: Condensed Consolidated Statements of Operations
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended June 30, Six Months Ended June 30, Revenues: 2018 2017 2018 2017 32 Commissions $ 658,320 $ 577,172 $ 1,326,919 $ 1,122,892 Principal transactions 84,9
Slide 33: Newmark Group Condensed Consolidated Statements of Operations
NEWMARK GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) 33 Three Months Ended June 30, Six Months Ended June 30, Revenues: 2018 2017 2018 2017 Commissions 279,833 239,848 540,568 444,806 Gains from mortgage banking activities
Slide 34: Newmark Group Statements of Financial Condition
NEWMARK GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) 34 June 30, December 31, 2018 2017 Assets Current Assets: Cash and cash equivalents $ 60,274 $ 121,027 Restricted cash 314,991 52,347 Marketable securities 9,12
Slide 35: Appendix
ml BGC PARTNERS, INC. APPENDIX
Slide 36: Partnership Structure Creates Competitive Advantage
PARTNERSHIP STRUCTURE CREATES COMPETITIVE ADVANTAGE 36 Virtually all BGC and Newmark producers are partners • Partners sign long-term contracts; partnership units represent more than 20% of fully diluted share count of each of BGC and Newmark Up front consideration for hiring and acquisitions includ
Slide 37: Strongly Capitalized; Investment Grade Credit Profile
STRONGLY CAPITALIZED; INVESTMENT GRADE CREDIT PROFILE 37 (USD $000s) As of 6/30/2018 BGC Partners, Inc. Post-Spin BGC Partners, (Consolidated) Inc. Cash and Cash Equivalents $398,469 $338,195 Repurchase Agreements (3,108) (3,108) Securities Owned 57,414 57,414 Marketable Securities (net) 605 605 Tot
Slide 38: Strong Credit Profile
STRONG CREDIT PROFILE 38 ($ in '000s) Newmark Group, Inc. 6/30/2018 Cash and Cash Equivalents $60,274 Newmark Group, Inc. Interest Rate Maturity 6/30/2018 Converted Term Loan 4.307% 9/8/2019 $247,150 Long-term debt payable to related parties 1 8.125% 6/26/2042 112,500 Long-term debt payable to relat
Slide 39: BGC's Fully Diluted Share Count Summary
BGC’S FULLY DILUTED SHARE COUNT SUMMARY AS OF JUNE 30, 2018 39 BGC Partners, Inc. Fully Diluted Share Count Summary Fully-diluted Ownership (as of June 30, 2018) Shares (MN) (%) Class A owned by Public 260.1 54% Class A owned by executives, board members and employees (1) 19.8 4% (2,3) Partnership u
Slide 40: Newmark's Fully Diluted Share Count Summary
NEWMARK’S FULLY DILUTED SHARE COUNT SUMMARY AS OF JUNE 30, 2018 40 Newmark Group, Inc. Fully Diluted Share Count Summary Fully-diluted As of June 30, 2018 Shares (millions) Ownership (%) Class A owned by Public 23.3 9% 1 Limited partnership units owned by employees 57.6 22% Other owned by employees2
Slide 41: Differences Between Consolidated Results for Adjusted Earnings and GAAP
DIFFERENCES BETWEEN CONSOLIDATED RESULTS FOR ADJUSTED EARNINGS AND GAAP 41 Differences between Other income (losses), net, for Adjusted Earnings and GAAP In the second quarters of 2018 and 2017, non-cash gains of $1.1 million and $1.6 million, respectively, related to BGC’s investments accounted for
Slide 42: Differences Between Consolidated Results for Adjusted Earnings and GAAP
DIFFERENCES BETWEEN CONSOLIDATED RESULTS FOR ADJUSTED EARNINGS AND GAAP 42 Differences between Certain Non-compensation Expenses for Adjusted Earnings and GAAP The difference between non-compensation expenses in the second quarters of 2018 and 2017 as calculated for GAAP and Adjusted Earnings includ
Slide 43: Adjusted Earnings Defined
ADJUSTED EARNINGS DEFINED 43 Adjusted Earnings Defined BGC Partners uses non-GAAP financial measures including, but not limited to, “pre-tax Adjusted Earnings” and “post-tax Adjusted Earnings,” which are supplemental measures of operating results that are used by management to evaluate the financial
Slide 44: Adjusted Earnings Defined (Continued)
ADJUSTED EARNINGS DEFINED (CONTINUED) 44 When the Company issues limited partnership units, the shares of common stock into which the units can be ultimately exchanged are included in BGC’s fully diluted share count for Adjusted Earnings at the beginning of the subsequent quarter after the date of g
Slide 45: Adjusted Earnings Defined (Continued)
ADJUSTED EARNINGS DEFINED (CONTINUED) 45 To determine the non-GAAP tax provision, BGC first adjusts pre-tax Adjusted Earnings by recognizing any, and only, amounts for which a tax deduction applies under applicable law. The amounts include non-cash charges with respect to grants of exchangeability;
Slide 46: Adjusted Earnings Defined (Continued)
ADJUSTED EARNINGS DEFINED (CONTINUED) 46 Calculations of Pre-Tax and Post-Tax Adjusted Earnings per Common Share BGC’s Adjusted Earnings per common share calculations assume either that: – The fully diluted share count includes the shares related to any dilutive instruments, but excludes the associa
Slide 47: Adjusted Earnings Defined (Continued)
ADJUSTED EARNINGS DEFINED (CONTINUED) 47 BGC anticipates providing forward-looking guidance for GAAP revenues and for certain Adjusted Earnings measures from time to time. However, the Company does not anticipate providing an outlook for other GAAP results. This is because certain GAAP items, which
Slide 48: Adjusted EBITDA Defined
ADJUSTED EBITDA DEFINED 48 Adjusted EBITDA and Adjusted EBITDA Before Allocations to Units Defined BGC also provides an additional non-GAAP financial performance measure, “Adjusted EBITDA”, which it defines as GAAP “Net income (loss) available to common stockholders”, adjusted to add back the follow
Slide 49: Impact of ASC 606 on Newmark's Results
IMPACT OF ASC 606 NEWMARK’S RESULTS 49 Impact of ASC 606 on Newmark’s Future Results As was discussed in BGC’s financial results press release dated February 9, 2018: From 2014 through 2016, the Financial Accounting Standards Board (“FASB”) issued several accounting standard updates, which together
Slide 50: Proposed Spin-Off of Newmark
PROPOSED SPIN-OFF OF NEWMARK 50 Proposed Spin-Off of Newmark BGC expects to pursue a distribution to its stockholders of all of the Class A common shares and Class B common shares of Newmark (collectively, the “Newmark common shares”) that BGC then owns in a manner that is intended to qualify as gen
Slide 51: Post-Spin BGC
POST-SPIN BGC 51 These stand-alone results for BGC Partners excluding Newmark Group may be referred to as “post-spin BGC.” Post-spin BGC represents what BGC financial results would be had the spin-off of Newmark already occurred. Post-spin BGC can also be defined as the results for BGC’s Financial S
Slide 52: Dividend Policies
DIVIDEND POLICIES 52 BGC Partners Dividend Policy Our board of directors has authorized a dividend policy which provides that we expect to pay a quarterly cash dividend to our common stockholders based on our “post-tax adjusted earnings per fully diluted share.” Our board of directors declared a div
Slide 53: Reconciliation of GAAP Income to Adjusted Earnings and Post-Tax Adjusted EPS
RECONCILIATION OF GAAP INCOME (LOSS) TO ADJUSTED EARNINGS AND GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) Q2 2018 Q2 2017 53 GAAP income (loss) before income taxes $ 65,898 $ 94,283 Pre-tax adjustments: Non-cash (gains) losses related to equity i
Slide 54: Reconciliation of GAAP Income to Adjusted EBITDA
RECONCILIATION OF GAAP INCOME (LOSS) TO ADJUSTED EBITDA (IN THOUSANDS) (UNAUDITED) Q2 2018 Q2 2017 54 GAAP Net income (loss) available to common stockholders $ 35,203 $ 52,920 Add back: Provision (benefit) for income taxes 15,908 16,552 Net income (loss) attributable to noncontrolling interest in su
Slide 55: Liquidity Analysis
LIQUIDITY ANALYSIS (IN THOUSANDS) (UNAUDITED) 55 June 30, 2018 December 31, 2017 Cash and cash equivalents $ 398,469 $ 634,333 Repurchase agreements (3,108) - Securities owned 57,414 33,007 Marketable securities (1) 605 5,833 Total $ 453,380 $ 673,173 (1) As of June 30, 2018 and December 31, 2017, $
Slide 56: Reconciliation of BGC Consolidated to Post-Spin BGC for Revenues
RECONCILIATION OF BGC PARTNERS, INC. CONSOLIDATED TO POST- SPIN BGC PARTNERS, INC. FOR REVENUES (IN THOUSANDS) (UNAUDITED) 56 Q2 2018 Q2 2017 June YTD 2018 June YTD 2017 FY 2017 FY 2016 BGC Partners, Inc. consolidated revenues $ 960,076 $ 848,901 $ 1,916,722 $ 1,632,094 $ 3,353,356 $ 2,908,096 BGC R
Slide 57: Reconciliation to Post-Spin BGC for GAAP Income Before Income Taxes
RECONCILIATION OF BGC PARTNERS, INC. CONSOLIDATED TO POST- SPIN BGC PARTNERS, INC. FOR GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES (IN THOUSANDS) (UNAUDITED) 57 Q2 2018 Q2 2017 June YTD 2018 June YTD 2017 FY 2017 FY 2016 BGC Partners, Inc. consolidated income (loss) from operations before
Slide 58: Reconciliation to Post-Spin BGC for Pre-Tax Adjusted Earnings
RECONCILIATION OF BGC PARTNERS, INC. CONSOLIDATED TO POST-SPIN BGC PARTNERS, INC. FOR PRE-TAX ADJUSTED EARNINGS (IN THOUSANDS) (UNAUDITED) 58 Q2 2018 Q2 2017 June YTD 2018 June YTD 2017 FY 2017 FY 2016 BGC Partners, Inc. consolidated pre-tax adjusted earnings $ 175,841 $ 134,923 $ 360,526 $ 254,246
Slide 59: Reconciliation to Post-Spin BGC for Adjusted EBITDA
RECONCILIATION OF BGC PARTNERS, INC. CONSOLIDATED TO POST-SPIN BGC PARTNERS, INC. FOR ADJUSTED EBITDA BEFORE ALLOCATIONS TO LIMITED PARTNERSHIP UNITS AND FPUS (IN THOUSANDS) (UNAUDITED) 59 Q2 2018 Q2 2017 June YTD 2018 June YTD 2017 FY 2017 FY 2016 BGC Partners, Inc. consolidated adjusted EBITDA bef
Slide 60: Reconciliation to Post-Spin BGC for Liquidity
RECONCILIATION OF BGC PARTNERS, INC. CONSOLIDATED TO POST- SPIN BGC PARTNERS, INC. FOR LIQUIDITY (IN THOUSANDS) (UNAUDITED) 60 June 30, 2018 December 31, 2017 BGC Partners, Inc. Consolidated Liquidity $ 453,380 $ 673,173 Less Newmark Liquidity: Cash and cash equivalents (60,274) (121,027) Post-spin
Slide 61: Fully Diluted Weighted-Average Share Count
FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT FOR GAAP AND ADJUSTED EARNINGS (IN THOUSANDS) (UNAUDITED) 61 Q2 2018 Q2 2017 Common stock outstanding 321,199 286,840 Limited partnership units 96,161 98,483 Cantor units 50,439 51,183 Founding partner units 12,140 13,661 RSUs 311 409 Other 1,211 1,281 Full
Slide 62: Segment Disclosure – 2Q 2018 vs 2Q 2017
SEGMENT DISCLOSURE – 2Q 2018 VS 2Q 2017 (IN THOUSANDS) (UNAUDITED) 62 Q2 2018 Q2 2017 Financial Real Corporate Financial Real Corporate Services Estate Services Items Total Services Estate Services Items Total Total revenues $ 480,249 $ 469,034 $ 10,793 $ 960,076 $ 432,317 $ 406,243 $ 10,341 $ 848,9
Slide 63: Segment Disclosure – June YTD 2018 vs June YTD 2017
SEGMENT DISCLOSURE – JUNE YTD 2018 VS JUNE YTD 2017 (IN THOUSANDS) (UNAUDITED) 63 June YTD 2018 June YTD 2017 Financial Real Corporate Financial Real Corporate Services Estate Services Items Total Services Estate Services Items Total Total revenues $ 996,870 $ 900,905 $ 18,947 $ 1,916,722 $ 873,495
Slide 64: Reconciliation of BGC Real Estate Segment Revenues to Newmark Revenues
RECONCILIATION OF BGC REAL ESTATE SEGMENT REVENUES TO NEWMARK GROUP, INC. STAND-ALONE REVENUES (IN THOUSANDS) (UNAUDITED) 64 Q2 2018 Q2 2017 BGC Real Estate segment revenues $ 469,034 $ 406,243 Interest income (1) (2,415) (1,172) Newmark Group, Inc. stand-alone revenues $ 466,619 $ 405,071 (1) This
Slide 65: Reconciliation of Real Estate Segment to Newmark for GAAP Income
RECONCILIATION OF BGC REAL ESTATE SEGMENT TO NEWMARK GROUP, INC. STAND-ALONE FOR GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES (IN THOUSANDS) (UNAUDITED) 65 Q2 2018 Q2 2017 BGC Real Estate segment income (loss) from operations before income taxes $ 96,356 $ 83,027 BGC Corporate Items: Inter
Slide 66: Reconciliation of Real Estate Segment to Newmark for Pre-Tax Adjusted Earnings
RECONCILIATION OF BGC REAL ESTATE SEGMENT TO NEWMARK GROUP, INC. STAND-ALONE FOR PRE-TAX ADJUSTED EARNINGS (IN THOUSANDS) (UNAUDITED) 66 Q2 2018 Q2 2017 BGC Real Estate segment pre-tax adjusted earnings $ 91,448 $ 60,766 BGC Corporate Items: Interest income - 218 Compensation and employee benefits (
Slide 67: Differences Between Consolidated Results for Adjusted Earnings and GAAP
DIFFERENCES BETWEEN CONSOLIDATED RESULTS FOR ADJUSTED EARNINGS AND GAAP 67 Differences between Consolidated Results for Adjusted Earnings and GAAP The following sections describe the main differences between results as calculated for Adjusted Earnings and GAAP for the periods discussed herein. In th
Slide 68: Differences Between Consolidated Results for Adjusted Earnings and GAAP (Continued)
DIFFERENCES BETWEEN CONSOLIDATED RESULTS FOR ADJUSTED EARNINGS AND GAAP (CONTINUED) 68 Differences between Other income (loss) for Adjusted Earnings and GAAP GAAP income from operations before income taxes for the second quarter 2018 and first half of 2018 includes a $2.8 million non-cash loss attri
Slide 69: Adjusted Earnings Defined
ADJUSTED EARNINGS DEFINED 69 Adjusted Earnings Defined Newmark uses non-GAAP financial measures including, but not limited to, “pre-tax Adjusted Earnings” and “post-tax Adjusted Earnings,” which are supplemental measures of operating results that are used by management to evaluate the financial perf
Slide 70: Adjusted Earnings Defined (Continued)
ADJUSTED EARNINGS DEFINED (CONTINUED) 70 Additionally, Adjusted Earnings calculations exclude certain unusual, one-time or non-recurring items, if any. These items are excluded from Adjusted Earnings because the Company views excluding such items as a better reflection of the ongoing, ordinary opera
Slide 71: Adjusted Earnings Defined (Continued)
ADJUSTED EARNINGS DEFINED (CONTINUED) 71 Calculations of Pre-Tax and Post-Tax Adjusted Earnings per Share Newmark’s Adjusted Earnings per share calculations assume either that: • The fully diluted share count includes the shares related to any dilutive instruments, but excludes the associated intere
Slide 72: Adjusted EBITDA Defined
ADJUSTED EBITDA DEFINED 72 Adjusted EBITDA and Adjusted EBITDA Before Allocations to Units Defined Newmark provides a non-GAAP financial performance measure, “Adjusted EBITDA,” which the Company defines as “Net income (loss) for fully diluted shares” derived in accordance with GAAP and adjusted for
Slide 73: Proposed Spin-Off
PROPOSED SPIN-OFF 73 Proposed Spin-Off of Newmark BGC has advised Newmark that it currently expects to pursue a distribution to its stockholders of all of the Class A common shares and Class B common shares of Newmark that BGC then owns (the “spin-off”) in a manner that is intended to qualify as gen
Slide 74: Dividend Policy & ASC 606
DIVIDEND POLICY & ASC 606 74 Newmark Dividend Policy Newmark’s board of directors has authorized a dividend policy that reflects its intention to pay a quarterly dividend, starting with the first quarter of 2018. Any dividends to Newmark’s common stockholders will be calculated based on its expected
Slide 75: Reconciliation of GAAP Income to Adjusted EBITDA
RECONCILIATION OF GAAP INCOME (LOSS) TO ADJUSTED EBITDA (IN THOUSANDS)(UNAUDITED) 75 Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 GAAP Net income (loss) available to common stockholders $ 739 $ 55,145 $ 20,736 $ 91,856 Add back: Provision (benefit) for income taxes 10,82
Slide 76: TTM Reconciliation of GAAP Income to Adjusted EBITDA
TTM RECONCILIATION OF GAAP INCOME (LOSS) TO ADJUSTED EBITDA (IN THOUSANDS)(UNAUDITED) 76 TTM Ended June 30, 2018 2017 GAAP Net income (loss) available to common stockholders $ 73,372 $ 207,683 Add back: Provision (benefit) for income taxes 73,826 4,542 Net income (loss) attributable to noncontrollin
Slide 77: Reconciliation of GAAP Income to Adjusted Earnings and Post-Tax Adjusted EPS
RECONCILIATION OF GAAP INCOME (LOSS) TO ADJUSTED EARNINGS AND GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS 77 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income (loss) available to common stockholders $ 739 $ 55,1
Slide 78: TTM Reconciliation of GAAP Income to Adjusted Earnings
TTM RECONCILIATION OF GAAP INCOME (LOSS) TO ADJUSTED EARNINGS (IN THOUSANDS) (UNAUDITED) 78 TTM Ended June 30, 2018 2017 Net income (loss) available to common stockholders $ 73,372 $ 207,683 Provision (benefit) for income taxes 73,826 4,542 Net income (loss) attributable to noncontrolling interest i
Slide 79: Fully Diluted Weighted-Average Share Count
FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT FOR GAAP AND ADJUSTED EARNINGS (IN THOUSANDS) (UNAUDITED) 79 Three Months Ended June 30, Six Months Ended June 30, 2018 2017 (1) 2018 2017 (1) Common stock outstanding 155,157 N/A 155,447 N/A Limited partnership units - N/A 67,033 N/A Cantor units - N/A 23,
Slide 80: Media and Investor Contacts
80 80 Media Contact: Karen Laureano-Rikardsen +1 212-829-4975 Investor Contact: Jason McGruder Ujjal Basu Roy ir.bgcpartners.com twitter.com/bgcpartners +1 212-610-2426 +1 212-610-2426 linkedin.com/company/bgc-partners
BGC Partners — Investor Presentation (September 2018) on 6ix