Global Brokerage, Inc. Announces Fourth Quarter 2016 Results

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Global Brokerage Inc / Global Brokerage, Inc. Announces Fourth Quarter 2016 Results . Processed and transmitted by Nasdaq Corporate Solutions. The issuer is solely responsible for the content of this announcement.

Fourth Quarter 2016 Highlights & Updates:

  • U.S. GAAP net revenues from continuing operations of $80.6 million
  • U.S. GAAP net income attributable to Global Brokerage, Inc. from continuing operations of $10.7 million or $1.91 per diluted share, including a $6.4 million gain on derivative liability
  • U.S. GAAP net revenues from discontinued operations of $8.7 million
  • U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations of $11.1 million or $1.97 per diluted share
  • Adjusted EBITDA from continuing and discontinued operations of $30.8 million
  • Strong combined operating cash position of $226.2 million at December 31, 2016
  • In March 2017, repaid $30.0 million on the Leucadia Credit Agreement leaving $128.0 million outstanding

NEW YORK, March 20, 2017 (GLOBE NEWSWIRE) -- Global Brokerage, Inc. (NASDAQ:GLBR), today announced for the quarter ended December 31, 2016, U.S. GAAP trading revenue from continuing operations of $79.5 million, compared to $65.4 million for the quarter ended December 31, 2015. U.S. GAAP net income attributable to Global Brokerage, Inc. from continuing operations was $10.7 million (including a $6.4 million gain on derivative liabilities) for the quarter ended December 31, 2016, or $1.91 per diluted share, compared to U.S. GAAP net loss attributable to Global Brokerage, Inc. from continuing operations of $85.7 million (including a $99.9 million loss on derivative liabilities), or $15.75 per diluted share, for the quarter ended December 31, 2015.

For the twelve months ended December 31, 2016, U.S. GAAP trading revenue from continuing operations was $276.0 million, compared to $250.0 million for the twelve months ended December 31, 2015.  U.S. GAAP net income attributable to Global Brokerage, Inc. from continuing operations was $96.7 million for the twelve months ended December 31, 2016 or $17.24 per diluted share (including a $206.8 million net gain on derivative liabilities), compared to U.S. GAAP net loss attributable to Global Brokerage, Inc. from continuing operations of $513.6 million (including a $354.7 million loss on derivative liabilities), or $100.96 per diluted share, for the twelve months ended December 31, 2015.

The net gain/loss on derivative liabilities consists of non-cash changes in the value of embedded derivatives associated with the Leucadia Letter and Credit Agreements (as described further below).  The Letter Agreement is a component of the financing package provided by Leucadia National Corp. ("Leucadia"). On January 15, 2015, FXCM Group, LLC ("FXCM Group") customers suffered negative equity balances due to the unprecedented move in the Swiss Franc after the Swiss National Bank ("SNB") discontinued its peg of the Swiss Franc to the Euro.  On January 16, 2015, FXCM Group entered into a financing agreement with Leucadia that permitted FXCM Group's regulated subsidiaries to meet their regulatory capital requirements and continue normal operations after significant losses were incurred resulting from the events of January 15, 2015. 

On September 1, 2016 we completed the restructuring of the financing arrangements with Leucadia (the "Leucadia Restructuring Transaction"). We amended the terms of the Amended and Restated Credit Agreement (the "Credit Agreement") and replaced the Amended and Restated Letter Agreement (the "Letter Agreement") with a new Limited Liability Company Agreement. 

U.S. GAAP trading revenue from discontinued operations for the quarter ended December 31, 2016 was $8.5 million, compared to $11.3 million for the quarter ended December 31, 2015.  U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations was $11.1 million for the quarter ended December 31, 2016, or $1.97 per diluted share, compared to U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations of $19.3 million, or $3.54 per diluted share, for the quarter ended December 31, 2015.

U.S. GAAP trading revenue from discontinued operations for the twelve months ended December 31, 2016 was $31.1 million, compared to $71.5 million for the twelve months ended December 31, 2015.  U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations was $26.0 million for the twelve months ended December 31, 2016, or $4.64 per diluted share, compared to U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations of $40.3 million, or $7.93 per diluted share, for the twelve months ended December 31, 2015.

Adjusted EBITDA from continuing and discontinued operations for the quarter ended December 31, 2016 was $30.8 million, compared to $12.6 million for the quarter ended December 31, 2015.

Adjusted EBITDA from continuing and discontinued operations for the twelve months ended December 31, 2016 was $58.4 million, compared to $38.2 million for the twelve months ended December 31, 2015.

Adjusted EBITDA is a Non-GAAP financial measure. This measure does not represent and should not be considered as a substitute for net income, net income attributable to Global Brokerage, Inc. or net income per Class A share or as a substitute for cash flow from operating activities, each as determined in accordance with U.S. GAAP, and our calculations of these measures may not be comparable to similarly entitled measures reported by other companies. See "Non-GAAP Financial Measures" beginning on A-3 of this release for additional information regarding these Non-GAAP financial measures and for reconciliations of such measures to the most directly comparable measures calculated in accordance with U.S. GAAP.

Selected Customer Trading Metrics from Continuing Operations
       
   Three Months 
Ended December 31,
 Twelve Months 
Ended December 31,
 
    2016  2016 
       
Total Customer Trading Volume (in Billions US$ Equivalent) - Ex FXCM US LLC$798 $3,346 
Total Customer Trading Volume (in Billions US$ Equivalent) - FXCM US LLC$172 $722 
Total Customer Trading Volume (in Billions US$ Equivalent)$  970 $  4,068 
Retail Active Accounts - Ex FXCM US LLC 132,456  132,456 
Retail Active Accounts - FXCM US LLC 46,326  46,326 
Retail Active Accounts   178,782   178,782 
Trading days in period  64  259 
Daily Average Trades - Customers - Ex FXCM US LLC 481,713  506,238 
Daily Average Trades - Customers - FXCM US LLC 100,680  109,737 
Daily Average Trades - Customers  582,394   615,976 
Daily average trades per active account - Ex FXCM US LLC 3.6  3.8 
Daily average trades per active account - FXCM US LLC 2.2  2.4 
Daily average trades per active account  3.3   3.4 
Trading revenue per million traded$82 $68 
Total customer equity ($ in millions)$662 $662 
     

More information, including historical results for each of the above metrics, can be found on the investor relations page of Global Brokerage, Inc.'s website ir.globalbrokerage.info.

This operating data is preliminary and subject to revision and should not be taken as an indication of the financial performance of Global Brokerage, Inc. Global Brokerage, Inc. undertakes no obligation to publicly update or review previously reported operating data. Any updates to previously reported operating data will be reflected in the historical operating data that can be found on the Investor Relations page of the Company's corporate website ir.globalbrokerage.info.

Disclosure Regarding Forward-Looking Statements

In addition to historical information, this earnings release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and/or the Private Securities Litigation Reform Act of 1995, which reflect Global Brokerage's current views with respect to, among other things, its operations and financial performance in the future. These forward-looking statements are not historical facts and are based on current expectations, estimates and projections about Global Brokerage's industry, business plans, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict including, without limitation, risks associated with Global Brokerage's strategy to focus on its operations outside the United States, risks associated with the events that took place in the currency markets on January 15, 2015 and their impact on Global Brokerage's capital structure, risks associated with Global Brokerage's ability to recover all or a portion of any capital losses, risks relating to the ability of Global Brokerage to satisfy the terms and conditions of or make payments pursuant to the terms of the finance agreements with Leucadia, as well as risks associated with Global Brokerage's obligations under its other financing agreements, risks related to Global Brokerage's dependence on FX market makers, market conditions, risks associated with the outcome of any potential litigation or regulatory inquiries to which Global Brokerage may become subject, risks associated with potential reputational damage to Global Brokerage resulting from its sale of US customer accounts, and those other risks described under "Risk Factors" in Global Brokerage's Annual Report on Form 10-K, Global Brokerage's latest Quarterly Report on Form 10-Q, and other reports or documents Global Brokerage files with, or furnishes to, the SEC from time to time, which are accessible on the SEC website at sec.gov. This information should also be read in conjunction with Global Brokerage's Consolidated Financial Statements and the Notes thereto contained in Global Brokerage's Annual Report on Form 10-K, Global Brokerage's latest Quarterly Report on Form 10-Q, and in other reports or documents that Global Brokerage files with, or furnishes to, the SEC from time to time, which are accessible on the SEC website at sec.gov.

 About Global Brokerage, Inc.

Global Brokerage, Inc. (NASDAQ:GLBR) is a publicly traded company which owns 50.1% of FXCM Group, LLC (FXCM Group).

 

ANNEX I

Schedule  Page Number
    
U.S. GAAP Results   
Unaudited U.S. GAAP Condensed Consolidated Statements of Operations for the Three and Twelve Months Ended December 31, 2016 and 2015   A-1
Unaudited U.S. GAAP Condensed Consolidated Statements of Financial Condition As of December 31, 2016 and December 31, 2015   A-2
    
Non-GAAP Financial Measures   A-3
Reconciliation of U.S. GAAP Reported Net Income (Loss) to Adjusted EBITDA  A-4
Schedule of Cash and Cash Equivalents and Amounts Due to/from Brokers  A-5

 

Global Brokerage, Inc.  
Condensed Consolidated Statements of Operations  
(In thousands, except per share amounts)  
(Unaudited)  
         
 Three Months Ended December 31, Twelve Months Ended December 31, 
  2016   2015   2016   2015  
Revenues        
Trading revenue$79,450  $65,370  $276,000  $250,042  
Interest income 617   595   2,517   1,827  
Brokerage interest expense (233)  (229)  (888)  (818) 
Net interest revenue 384   366   1,629   1,009  
Other income 759   1,258   6,427   151,227  
Total net revenues 80,593   66,994   284,056   402,278  
Operating Expenses        
Compensation and benefits 17,978   20,969   91,377   93,413  
Referring broker fees 9,099   11,125   38,213   54,827  
Advertising and marketing 5,496   4,516   20,849   14,932  
Communication and technology 7,263   7,473   28,262   33,545  
Trading costs, prime brokerage and clearing fees 977   1,005   3,585   3,952  
General and administrative 22,164   19,202   75,790   58,436  
Bad debt (recovery) expense -   (353)  (141)  256,950  
Depreciation and amortization 6,140   7,195   27,289   28,331  
Goodwill impairment loss -   -   -   9,513  
Total operating expenses 69,117   71,132   285,224   553,899  
Operating income (loss) 11,476   (4,138)  (1,168)  (151,621) 
Other (Income) Expense        
(Gain) loss on derivative liabilities - Letter & Credit Agreement (6,402)  99,927   (206,777)  354,657  
Loss on equity method investments, net 2,575   168   3,053   467  
Gain on sale of investment (37,157)  -   (37,157)  -  
Interest on borrowings 15,915   22,736   77,143   126,560  
Income (loss) from continuing operations before income taxes 36,545   (126,969)  162,570   (633,305) 
Income tax provision (benefit) 719   (418)  777   181,198  
Income (loss) from continuing operations 35,826   (126,551)  161,793   (814,503) 
Loss from discontinued operations, net of tax (64,225)  (43,379)  (117,860)  (118,294) 
Net (loss) income (28,399)  (169,930)  43,933   (932,797) 
Net (loss) income attributable to non-controlling interest in Global Brokerage Holdings, LLC (3)  (49,945)  33,408   (324,595) 
Net income (loss) attributable to redeemable non-controlling interest in FXCM Group, LLC 4,073   -   (2,804)  -  
Net loss attributable to other non-controlling interests (32,110)  (15,035)  (57,314)  (54,273) 
Net (loss) income attributable to Global Brokerage, Inc.$(359) $(104,950) $70,643  $(553,929) 
         
Income (loss) from continuing operations attributable to Global Brokerage, Inc.$10,744  $(85,691) $96,680  $(513,600) 
Loss from discontinued operations attributable to Global Brokerage, Inc. (11,103)  (19,259)  (26,037)  (40,329) 
Net (loss) income attributable to Global Brokerage, Inc.$(359) $(104,950) $70,643  $(553,929) 
         
Weighted average shares of Class A common stock outstanding - Basic and Diluted 5,627   5,441   5,609   5,087  
         
Net (loss) income per share attributable to stockholders of Class A common stock of Global Brokerage, Inc. - Basic and Diluted        
Continuing operations$1.91  $(15.75) $17.24  $(100.96) 
Discontinued operations (1.97)  (3.54)  (4.64)  (7.93) 
Net (loss) income attributable to Global Brokerage, Inc.$(0.06) $(19.29) $12.60  $(108.89) 
         
A-1  

  

Global Brokerage, Inc.  
Condensed Consolidated Statements of Financial Condition  
As of December 31, 2016 and December 31, 2015  
(Amounts in thousands except share data)  
(Unaudited) 
  December 31, 
2016
 December 31, 
2015
 
Assets     
Current assets     
Cash and cash equivalents $200,914  $203,854  
Cash and cash equivalents, held for customers  661,936   685,043  
Due from brokers  3,363   3,781  
Accounts receivable, net  5,236   1,636  
Tax receivable  199   1,766  
Assets held for sale  97,103   233,937  
Total current assets  968,751   1,130,017  
Deferred tax asset  330   14  
Office, communication and computer equipment, net  32,815   35,891  
Goodwill  23,479   28,080  
Other intangible assets, net  6,285   13,782  
Notes receivable  -   7,881  
Other assets  7,364   11,421  
Total assets $1,039,024  $1,227,086  
Liabilities, Redeemable Non-Controlling Interest and Stockholders' Deficit     
Current liabilities     
Customer account liabilities $661,936  $685,043  
Accounts payable and accrued expenses  55,491   38,298  
Due to brokers  1,471   1,073  
Other liabilities  2,629   -  
Due to related parties pursuant to tax receivable agreement  -   145  
Liabilities held for sale  2,325   14,510  
Total current liabilities  723,852   739,069  
Deferred tax liability  215   719  
Senior convertible notes  161,425   154,255  
Credit Agreement - Related Party  150,516   147,262  
Derivative liability - Letter Agreement  -   448,458  
Other liabilities  7,319   16,044  
Total liabilities  1,043,327   1,505,807  
          
Redeemable non-controlling interest  46,364   -  
          
Stockholders' Deficit     
Class A common stock, par value $0.01 per share; 3,000,000,000 shares authorized, 6,143,297 and 5,602,534 shares issued and outstanding as of December 31, 2016 and 2015, respectively  61   56  
Class B common stock, par value $0.01 per share; 1,000,000 shares authorized, 8 and 25 shares issued and outstanding as of December 31, 2016 and 2015, respectively  1   1  
Additional paid-in capital  389,917   267,369  
Accumulated deficit  (460,907)  (531,550) 
Accumulated other comprehensive (loss) income  (2,312)  1,004  
Total stockholders' deficit, Global Brokerage, Inc.  (73,240)  (263,120) 
Non-controlling interests  22,573   (15,601) 
Total stockholders' deficit  (50,667)  (278,721) 
Total liabilities, redeemable non-controlling interest and stockholders' deficit $1,039,024  $1,227,086  
      
A-2 
  

NON-GAAP FINANCIAL MEASURES

In addition to financial results reported in accordance with U.S. GAAP, we have provided Adjusted EBITDA, a Non- GAAP financial measure. We believe this Non-GAAP measure, when presented in conjunction with the comparable U.S. GAAP measure, is useful to investors in better understanding our current financial performance as seen through the eyes of management and facilitates comparisons of our historical operating trends across several periods. We believe that investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in our industry that present similar measures, although the methods used by other companies in calculating Adjusted EBITDA may differ from our method, even if similar terms are used to identify such measure.

Adjusted EBITDA provides us with an understanding of the results from the primary operations of our business by excluding the effects of certain gains, losses or other charges that do not reflect the normal earnings of our core operations or that may not be indicative of our future outlook and prospects. Internally, Adjusted EBITDA is used by management for various purposes, including to evaluate our operating performance and operational strategies, as a basis for strategic planning and forecasting, and for compensation purposes.

Adjusted EBITDA does not represent and should not be considered as a substitute for net income or net income attributable to Global Brokerage, Inc., each as determined in accordance with U.S. GAAP.  Adjusted EBITDA reflects the following adjustments to net income:

1. Compensation Expense/Lucid Minority Interest. Our reported U.S. GAAP results reflect the portion of the 49.9% of Lucid earnings allocated among the non-controlling members of Lucid based on services provided as a component of compensation expense under Allocation of income to Lucid members for services provided within discontinued operationsAdjustments have been made to eliminate this allocation of Lucid's earnings attributable to non-controlling members.  We believe that this adjustment provides a more meaningful view of the Company's operating expenses and the Company's economic arrangement with Lucid's non-controlling members. This adjustment has no impact on net income from continuing operations as reported by the Company.

2. Regulatory and Legal Costs. Adjustments have been made to eliminate certain costs or recoveries (including client reimbursements, regulatory fines and settlements from lawsuits) associated with certain regulatory and legal matters. Given the nature of these expenses, they are not viewed by management as expenses incurred in the ordinary course of business and we believe it is useful to show the effects of eliminating these expenses.

3. SNB Costs. Adjustments have been made to eliminate certain costs/income (including the net losses associated with client debit balances, gains/losses on the derivative liabilities related to the Letter and Credit Agreements with Leucadia, costs related to the implementation of a Stockholder Rights Plan, costs related to the Leucadia Restructuring Transaction, professional costs, adjustments to the Company's tax receivable agreement contingent liability and insurance recoveries) associated with the January 15, 2015 SNB event. Given the nature of these expenses, they are not viewed by management as expenses incurred in the ordinary course of business and we believe it is useful to show the effects of eliminating these expenses.

4. Cybersecurity Incident. Adjustments have been made to eliminate certain costs/income related to investigative and other professional services, costs of communications with customers, remediation activities associated with the incident and insurance recoveries. Given the nature of these expenses, we believe it is useful to show the effects of eliminating these expenses.

5. Discontinued Operations. Adjustments have been made to eliminate the impact of goodwill impairments, gains or losses on classification as held for sale assets, gains or losses from completed asset sales and a gain related to the disposition of an equity method investment. Given the nature of these items, they are not viewed by management as activity in the ordinary course of business and we believe it is useful to show the effect of eliminating these items.

6. Provision for debt forgiveness. An adjustment has been made to eliminate the provision recorded against a notes receivable from the non-controlling members of Lucid that will not be required to be repaid and has been forgiven. Given the atypical nature of this expense for us, we believe it is useful to show the effect of eliminating this expense.                    

7. Impairment of equity method investments. An adjustment has been made to the equity interest in two developers of FX software which are accounted for using the equity method.  Given the nature of this expense, it is not viewed by management as an expense incurred in the ordinary course of business and we believe it is useful to show the effects of eliminating this expense.

A-3    

   
(Unaudited)Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA 
 Three Months Ended December 31, 
  2016   2015  
 Continuing 
Ops
Disc OpsCombined Continuing 
Ops
Disc OpsCombined 
Net income (loss)$  35,826 $  (64,225)$  (28,399) $  (126,551)$  (43,379)$  (169,930) 
Adjustments:        
Net Revenues(1) -  -  -   145  -  145  
Allocation of net income to Lucid members for services provided(2) -  (750) (750)  -  (1,852) (1,852) 
General and administrative(3) 8,688  -  8,688   7,313  1,453  8,766  
Bad debt recovery(4) -  -  -   (353) -  (353) 
Loss on equity method investments, net(5) 2,575  -  2,575   -  -  -  
Depreciation and amortization 6,140  -  6,140   7,195  -  7,195  
Loss on classification as held for sale -  69,419  69,419   -  38,840  38,840  
(Gain) loss on derivative liabilities - Letter & Credit Agreement (6,402) -  (6,402)  99,927  -  99,927  
Interest on borrowings 15,915  -  15,915   22,736  -  22,736  
Income tax provision (benefit) 719  54  773   (418) 443  25  
(Gain) loss on completed dispositions (37,157) -  (37,157)  -  7,114  7,114  
Total adjustments (9,522) 68,723  59,201   136,545  45,998  182,543  
Adjusted EBITDA$26,304 $4,498 $30,802  $9,994 $2,619 $12,613  
         

(1) Represents the $0.1 million charge in Q4 2015 for expected tax receivable payments.

(2) Represents the elimination of the 49.9% of Lucid's earnings allocated among the non-controlling interests recorded as compensation for U.S. GAAP purposes included in discontinued operations.

(3) Represents a CFTC regulatory fine of $7.0 million and $2.1 million of professional fees, partially offset by $0.4 million of insurance recoveries to reimburse for costs incurred related to the January 15, 2015 SNB event included in continuing operations for the three months ended December 31, 2016.  For the three months ended December 31, 2015, represents the elimination of a $6.8 million reserve recorded against an uncollected broker receivable, $0.8 million of legal fees resulting from the January 15, 2015 SNB event and other professional fees, $0.5 million of costs related to the cyber incident and a recovery of $0.8 million related to a settlement of a lawsuit, all recorded in continuing operations for Q4 2015, and a $1.5 million reserve for restitution related to pre-August 2010 trade execution practices recorded in discontinued operations in Q4 2015.

(4) Represents a recovery against the net bad debt expense related to client debit balances associated with the January 15, 2015 SNB event.

(5) Represents $2.6 million of impairments taken on equity method investments in the three months ended December 31, 2016.

         
(Unaudited)Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA 
 Twelve Months Ended December 31, 
  2016   2015  
 Continuing 
Ops
Disc OpsCombined Continuing 
Ops
Disc OpsCombined 
Net income (loss)$  161,793 $  (117,860)$  43,933  $  (814,503)$  (118,294)$  (932,797) 
Adjustments:       -  
Net Revenues(1) 44  -  44   (145,079) -  (145,079) 
Allocation of net income to Lucid members for services provided(2) -  3,029  3,029   -  5,064  5,064  
General and administrative(3) 21,265  513  21,778   11,654  1,453  13,107  
Bad debt (recovery) expense(4) (141) -  (141)  256,950  8,408  265,358  
Loss (gain) on equity method investments, net(5) 2,575  (679) 1,896   -  -  -  
Depreciation and amortization 27,289  -  27,289   28,331  12,359  40,690  
Goodwill impairment and loss on classification as held for sale -  126,511  126,511   9,513  121,525  131,038  
(Gain) loss on derivative liabilities - Letter & Credit Agreement (206,777) -  (206,777)  354,657  -  354,657  
Interest on borrowings 77,143  -  77,143   126,560  -  126,560  
Income tax provision 777  54  831   181,198  5,764  186,962  
Gain on completed dispositions (37,157) -  (37,157)  -  (7,313) (7,313) 
Total adjustments (114,982) 129,428  14,446   823,784  147,260  971,044  
Adjusted EBITDA$46,811 $11,568 $58,379  $9,281 $28,966 $38,247  
         

(1) Represents a $0.1 million charge in the twelve months ended December 31, 2016 for tax receivable agreement payments and the elimination of a $145.1 million noncash benefit in the twelve months ended December 31, 2015 attributable to the reduction of our tax receivable agreement contingent liability to zero.

(2) Represents the elimination of the 49.9% of Lucid's earnings allocated among the non-controlling interests recorded as compensation for U.S. GAAP purposes included in discontinued operations.

(3) Represents the provision for debt forgiveness of $8.2 million against the notes receivable from the non-controlling members of Lucid, a CFTC regulatory fine of $7.0 million and $7.4 million of  professional fees, including fees related to the  Leucadia Restructuring Transaction and the Stockholder Rights Plan, partially offset by $1.4 million of insurance recoveries to reimburse for costs incurred related to the January 15, 2015 SNB event and the cybersecurity incident, which is included in continuing operations in the twelve months ended December 31, 2016, and expense of $0.5 million included in discontinued operations in the twelve months ended December 31, 2016 related to pre-August 2010 trade execution practices and other regulatory fees and fines. For the twelve months ended December 31, 2015, represents the elimination of a $6.8 million reserve recorded against an uncollected broker receivable, $4.9 million of legal fees resulting from the January 15, 2015 SNB event and other professional fees, including the elimination of the expense related to the Stockholders Rights Plan,  $0.7 million of costs related to the cyber incident and a recovery of $0.8 million related to a settlement of a lawsuit, all recorded in continuing operations in the twelve months ended December 31, 2015, and a $1.5 million reserve for restitution related to pre-August 2010 trade execution practices recorded in discontinued operations in the twelve months ended December 31, 2015.

(4) Represents the net bad debt (recovery) expense related to client debit balances associated with the January 15, 2015 SNB event.  

(5) Represents $2.6 million of impairments taken on equity method investments in the twelve months ended December 31, 2016 included in continuing operations and a $0.7 million gain on the disposition of an equity method investment related to V3 in the twelve months ended December 31, 2016 included in discontinued operations.

A-4

Schedule of Cash and Cash Equivalents and Due to/from Brokers   

(Unaudited)December 31, 2016 December 31, 2015
 Continuing 
Ops
Disc OpsCombined Continuing 
Ops
Disc OpsCombined
Cash & Cash Equivalents$200,914 $9,378 $210,292  $203,854 $10,786$214,640 
Due From Brokers 3,363  14,090  17,453   3,781  22,234 26,015 
Due to Brokers (1,471) (45) (1,516)  (1,073) - (1,073)
Operating Cash$202,806 $23,423 $226,229  $206,562 $33,020$ 239,582 
        
A-5

  

Jaclyn Sales, 646-432-2463
Vice-President, Investor Relations
investorrelations@globalbrokerage.info



This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Global Brokerage Inc via Globenewswire

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Thomson Reuters: 10:00 GMT Monday 20th March 2017

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