Fifth graph under the section "Outlook for BGC and eSpeed Combined3" should read: The Combined Company expects to have an effective tax rate of approximately 28 percent in 2008, compared to the previous outlook of 27 percent, due to the increase in expected pre-tax income for 2008, which will allow for faster utilization of net operating loss carry forwards. The Combined Company expects to have an effective tax rate of approximately 32.5 percent for 2009 and thereafter. For 2008, this means that the Combined Company expects to have after-tax income in excess of $116 million available to fully diluted shares.
The corrected release reads:
ESPEED REPORTS THIRD QUARTER 2007 RESULTS
BGC updates preliminary 3Q 2007 results
BGC and eSpeed revise 2008 Outlook upward for the Combined Company
eSpeed, Inc. (NASDAQ: ESPD), a leading developer of electronic marketplaces and related trading technology for the global capital markets, today reported results for the third quarter ended September 30, 2007.
eSpeed's Third Quarter Results Summary | Â | Â | Â | Â | ||||
| Â | 3Q2007 Actual | Â | Â | 3Q2006 Actual | ||||
| GAAP Revenues | $ | 40.4 MM | Â | $ | 38.1 MM | Â | ||
| Non-GAAP Operating Revenues | $ | 40.2 MM | Â | $ | 38.1 MM | Â | ||
| GAAP Net Income (Loss) Per Diluted Share | Â | ($0.12 | ) | Â | ($0.01 | ) | ||
| Non-GAAP Net Operating Income (Loss) Per Diluted Share | $ | 0.01 | Â | $ | 0.02 | Â | ||
BGC's Preliminary Third Quarter Results Summary1
BGC announced the following financial highlights related to its preliminary results for the third quarter of 2007:
* BGC's third quarter 2007 pre-tax profits were approximately $32.4 million versus a pre-tax loss of $34.3 million in the third quarter of 2006;
* BGC's third quarter 2007 revenues increased by 41 percent year-over-year to approximately $272 million;
* BGC's third quarter 2007 revenue in Rates increased year-over-year by approximately 38 percent;
* BGC's third quarter 2007 Credit revenues were up by approximately 50 percent year-over-year; and
* BGC's third quarter 2007 Foreign Exchange revenues increased by approximately 59 percent year-over-year.
Howard W. Lutnick, Chairman, Chief Executive Officer and President of eSpeed, who will become Chairman and co-Chief Executive Officer of the combined company upon the completion of eSpeed's proposed merger with BGC, stated: "The tremendous growth in profitability for BGC clearly demonstrates the strength of its business model and its highly scalable platform, and also underscores the compelling strategic rationale of combining eSpeed with BGC."
eSpeed's Third Quarter Earnings
eSpeed reported a net loss of $6.0 million, or $0.12 per diluted share, for the third quarter of 2007 based on Generally Accepted Accounting Principles ("GAAP"). To reflect earnings generated from the Company's operations, eSpeed also reported non-GAAP net operating income of $0.6 million, or $0.01 per diluted share. The difference between non-GAAP net operating income and GAAP net loss for the quarter was primarily due to $4.9 million in patent litigation costs, $1.0 million in direct expenses associated with the proposed combination with BGC, $0.3 million in charitable contributions related to eSpeed's September 11, 2007 Charity Day, and $0.4 million in losses from Aqua, in which eSpeed has an equity stake and into which it contributed its previous Equities Direct Access business after the close of the quarter. All of these differences were net of tax.
In comparison, eSpeed reported a GAAP net loss of $0.5 million, or $0.01 per diluted share, for the third quarter of 2006. eSpeed also reported non-GAAP net operating income of $1.2 million, or $0.02 per diluted share. The difference between non-GAAP net operating income and the GAAP net loss for the quarter was primarily due to $1.3 million in acquisition-related costs, $0.5 million in patent litigation costs, a $0.2 million charitable contribution to the Cantor Fitzgerald Relief Fund, and a $0.1 million expense related to a tax settlement, partially offset by a payment of $0.5 million related to a litigation settlement. All of these differences were net of tax.
eSpeed's Third Quarter Revenues
eSpeed reported GAAP revenues of $40.4 million and non-GAAP operating revenues of $40.2 million for the third quarter of 2007. The difference between GAAP and non-GAAP revenues for the third quarter of 2007 reflected Equities Direct Access revenues of $0.2 million.
eSpeed's total GAAP and non-GAAP operating revenues for the third quarter of 2006 were $38.1 million.
Fully electronic revenues were $16.3 million dollars in the third quarter of 2007, compared with $16.8 million dollars in the third quarter of 2006. Excluding $1.9 million in revenues related to the Wagner patent and recorded as part of "Fully electronic transactions with unrelated parties", revenues from eSpeed's fully electronic business were up 10.2 percent from $14.8 million in the third quarter of 2006. Revenues from software solutions were $11.8 million in the quarter compared with $11.4 million in the year ago period. Excluding Wagner-related payments of $2.5 million in the third quarter 2006, and recorded as "Software Solutions and licensing fees from unrelated parties", software solutions revenues increased by 32.6 percent from $8.9 million in the third quarter of 2006. The Wagner patent expired in February of 2007.
Hybrid voice- and screen-assisted revenues totaled $9.6 million in the third quarter of 2007, up 27.1 percent compared with $7.5 million in the third quarter of 2006. eSpeed's non-GAAP pre-tax operating margin was 2.4 percent in the third quarter of 2007.
See "Non-GAAP Financial Measures" below for a detailed description of the Company's non-GAAP financial measures.
Items Impacting GAAP Revenues and Income
The year-over-year growth in quarterly GAAP revenues was due primarily to increases in hybrid screen- and voice-assisted revenues from BGC, partially offset by the loss of revenue related to the Wagner patent. The lost $2.0 million in net income from the Wagner patent, along with acquisition-related expenses and a $3.5 million reserve for the recent patent decision were the primary contributors to eSpeed's wider GAAP net loss in the third quarter of 2007.
eSpeed's Cash Flow and Cash
eSpeed generated cash flow from operations of $9.9 million during the third quarter of 2007, compared with $20.8 million during the third quarter of 2006.
The Company also reports free cash flow, which it defines as cash from operations less net cash used in investing activities, including capital expenditures. eSpeed's free cash flow was ($5.1) million for the third quarter of 2007, compared with $12.9 million in the prior year period.
Excluding related party receivables and payables, free cash flow was ($3.9) million for the third quarter of 2007, compared with $7.6 million for the third quarter of 2006.
The above cash flow measures were negatively impacted in the quarter primarily by a wider net loss and increased capital expenditures mainly related to the opening of an additional data center.
As of September 30, 2007, eSpeed's cash and cash equivalents were $103.5 million. eSpeed's short-term assets as of September 30, 2007 also included $2.4 million in marketable securities and an $80 million secured loan receivable.2 In comparison, as of December 31, 2006, eSpeed's cash and cash equivalents were $187.8 million.
Third Quarter Notional Volume and Transactions on the eSpeed System
Total volume on the eSpeed system in the third quarter of 2007 consisted of 3.1 million transactions with a notional value of $33.0 trillion, up 50.4 percent and 33.7 percent, respectively, from the 2.1 million transactions with a notional value of $24.7 trillion in the year-earlier period.
Fully electronic volume on the eSpeed system, excluding new products, was $12.7 trillion for the third quarter of 2007, up 35.3 percent from $9.4 trillion in the third quarter of 2006. Hybrid volume from BGC transacted on the eSpeed network, or the combined total of voice-assisted and screen-assisted volume, was $19.3 trillion for the third quarter of 2007, an increase of 36.9 percent from $14.1 trillion in the third quarter of 2006. Fully electronic volume on the eSpeed system for new products, which the Company defines as foreign exchange, interest rate swaps, futures, credit default swaps, and repurchase agreements, was $990 billion for the third quarter of 2007, down 16.0 percent from the $1.2 trillion reported in the third quarter of 2006 primarily due to a decrease in notional futures volume, partially offset by an increase in fully electronic credit default swap volume.
Preliminary BGC Results
For the third quarter of 2007, BGC's preliminary revenues were approximately $272 million, up 41% compared to the prior year quarter's $193 million. BGC recorded pre-tax profits of approximately $32.4 million compared to a pre-tax loss of $34.3 million in the prior-year period.
Continued high levels of global securities and derivatives volume and volatility led to strong organic growth in BGC's three largest asset class categories. BGC's revenues in Rates increased by approximately 38 percent, Credit by approximately 50 percent, and Foreign Exchange by approximately 59 percent, all compared to the third quarter of 2006. Revenues from Other Asset Classes increased by approximately 312 percent in the third quarter of 2007 compared to the year-ago quarter due primarily to the November 2006 acquisition of Aurel Leven.
For the third quarter of 2007, Rates represented 51 percent of BGC's revenues; Credit represented 21 percent; and Foreign Exchange represented 14 percent.
Outlook for BGC and eSpeed Combined3
BGC's revenues are expected to be at least $950 million in 2007, up at least 26 percent from $753.7 million in 2006. BGC's profits are expected to exceed $100 million in 2007. The Combined Company is expected to generate revenues of more than $1,050 million in 2007, up at least 23 percent from $853.6 million in 2006.
For 2008, the Combined Company's projected revenues are expected to increase by more than 12 percent and to exceed $1,175 million. The Combined Company expects to have 2008 net income before taxes for fully diluted shares (approximately 186 million shares) of at least $160 million or more than a 60 percent increase over 2007.
"Given BGC's strong results across our geographic and product categories, we remain confident that the Combined Company will experience significant revenue and profit growth in 2008," said Lee M. Amaitis, Chairman and Chief Executive Officer of BGC and Vice Chairman of eSpeed, who will become co-Chief Executive Officer of BGC Partners Inc. after the completion of the planned merger. "We expect to make further gains in broker productivity in Rates, Credit, and Foreign Exchange, as we continue to use BGC's strong relationships and eSpeed's world-class technology to provide outstanding service and execution to the word's largest banks, investments banks, broker dealers, and trading firms."
2008 Combined Company compensation expenses before BGC partnership profit distribution are expected to be between 55 and 60 percent of total revenue, while non-compensation expense is expected to be in the range of 27 to 32 percent of total revenue.
The Combined Company expects to have an effective tax rate of approximately 28 percent in 2008, compared to the previous outlook of 27 percent, due to the increase in expected pre-tax income for 2008, which will allow for faster utilization of net operating loss carry forwards. The Combined Company expects to have an effective tax rate of approximately 32.5 percent for 2009 and thereafter. For 2008, this means that the Combined Company expects to have after-tax income in excess of $116 million available to fully diluted shares.
The above outlook includes the elimination of revenues related to inter-company transactions of approximately $57 million in 2007 and $61 million in 2008, because of amounts that have historically been associated with inter-company revenue sharing transactions that will cease subsequent to the consummation of the proposed merger.
| Â | Â | Â |
| (1) | Â | The non-GAAP results for BGC reflect the effects of the full formation and final separation from Cantor and exclude any costs which may be associated with the formation, separation and merger (including, without limitation, redemption of partnership interests) as well as any one time (i) compensation and (ii) other accounting charges associated with transactions to facilitate repayment of loans to executive officers, exchangeability of BGC Holdings units and other structuring features of the formation, separation and merger. For comparison purposes, please see the results for "Pro Forma BGC Partners Stand-Alone" as contained in eSpeed's special merger proxy filed with SEC and dated November 6, 2007. |
| (2) | On July 26, 2007, eSpeed entered into a Secured Promissory Note and Pledge Agreement (the "Secured Loan") with Cantor in which eSpeed agreed to lend to Cantor up to $100 million (the "Secured Loan Amount") on a secured basis from time to time. The Secured Loan is guaranteed by a pledge of eSpeed Class A or Class B Common Stock owned by Cantor equal to 125% of the outstanding Secured Loan Amount, as determined on a next day basis. The Secured Loan bears interest at the market rate for equity repurchase agreements plus 0.25% and is payable on demand. The Secured Loan was approved by eSpeed's Audit Committee. At September 30, 2007, the outstanding balance of the Secured Loan was $80 million. | |
| (3) | Â | The non-GAAP outlook for the combined company and for BGC reflects the effects of the full formation and final separation from Cantor and excludes any costs which may be associated with the formation, separation and merger (including, without limitation, redemption of partnership interests) as well as any one time (i) compensation and (ii) other accounting charges associated with transactions to facilitate repayment of loans to executive officers, exchangeability of BGC Holdings units and other structuring features of the formation, separation and merger. For comparison purposes, please see the results for "Pro Forma BGC Partners Stand-Alone" as contained in eSpeed's special merger proxy filed with SEC and dated November 6, 2007. |
Third Quarter 2007 Conference Call for Analysts and Investors
eSpeed will host a conference call on Thursday, November 8, 2007 at 8:30 A.M. EST, to discuss the above results. To listen to the call via audio webcast, please visit www.espeed.com. Please note: listeners must have a Real Media or Windows Media plug in and headphones or speakers to listen to the webcast.
About eSpeed, Inc.
eSpeed, Inc. (NASDAQ: ESPD) is a leader in developing and deploying electronic marketplaces and related trading technology that offers traders access to the most liquid, efficient and neutral financial markets in the world. eSpeed operates multiple buyer, multiple seller real-time electronic marketplaces for the global capital markets, including the world's largest government bond markets and other fixed income and foreign exchange marketplaces. eSpeed's suite of marketplace tools provides end-to-end transaction solutions for the purchase and sale of financial products over eSpeed's global private network or via the Internet. eSpeed's neutral platform, reliable network, straight-through processing and superior products make it the trusted source for electronic trading at the world's largest fixed income and foreign exchange trading firms and major exchanges. To learn more, please visit www.espeed.com.
On May 29, 2007, eSpeed announced that it had entered into an Agreement and Plan of Merger, dated as of May 29, 2007 with BGC Partners, Inc. ("BGC Partners"); Cantor Fitzgerald, L.P. ("Cantor"); BGC Partners, L.P., a Delaware limited partnership; BGC Global Holdings, L.P., a Cayman Islands exempted limited partnership; and BGC Holdings, L.P., a Delaware limited partnership pursuant to which eSpeed will acquire BGC Partners through a merger of BGC Partners with and into eSpeed. For more information, see eSpeed's Report on Form 8-K dated May 29, 2007, and its preliminary proxy statement dated November 6, 2007, as well is its definitive proxy statement when it becomes available.
About BGC
BGC is a leading inter-dealer broker, providing integrated voice and electronic execution and other brokerage services to banks, brokerage houses and investment banks for a broad range of global financial products including fixed income securities, foreign exchange, equity derivatives, credit derivatives, futures, structured products and other instruments. This is complemented by market data products for selected financial instruments. Named after fixed income trading innovator B. Gerald Cantor, BGC has offices in London, New York, Copenhagen, Istanbul, Nyon, Paris, Mexico City, Toronto, Hong Kong, Seoul, Singapore, Sydney, Tokyo, Beijing (representative office). To learn more, please visit www.bgcpartners.com.
Important Information
In connection with the proposed Merger, the Company filed a preliminary proxy statement on November 6, 2007, and intends to file a definitive proxy statement and related materials with the U.S. Securities and Exchange Commission (the "SEC") for the meeting of stockholders to vote on the proposed Merger. BECAUSE THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION, HOLDERS OF THE COMPANY'S COMMON STOCK ARE URGED TO READ THEM CAREFULLY, IF AND WHEN THEY BECOME AVAILABLE. The preliminary proxy statement and related materials are, and the definitive proxy statement, when it becomes available, will be available for free (along with any other documents and reports filed by the Company with the SEC) at the SEC's website, www.sec.gov, and at the Company's website, www.espeed.com.
Participant Information
The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company's stockholders in connection with the proposed Merger. Certain information regarding the participants and their interests in the solicitation are set forth in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2006, which was filed with the SEC on August 23, 2007, and is set forth in the preliminary proxy statement filed with the SEC on November 6, 2007, and will be set forth in its definitive proxy statement when it becomes available for the Company's meeting of stockholders to vote on the proposed Merger. Stockholders may obtain additional information regarding the proposed Merger by reading the preliminary proxy statement and the definitive proxy statement and the related materials relating to the proposed Merger when they become available.
Non-GAAP Financial Measures
To supplement eSpeed's consolidated financial statements presented in accordance with GAAP and to better reflect the Company's quarter-over-quarter and comparative year-over-year operating performance, eSpeed uses non-GAAP financial measures of revenues, net income and earnings per share, which are adjusted to exclude certain expenses and gains. In addition, the Company provides a computation of free cash flow. These non-GAAP financial measurements do not replace the presentation of eSpeed's GAAP financial results but are provided to improve overall understanding of the Company's current financial performance and its prospects for the future. Specifically, eSpeed believes the non-GAAP financial results provide useful information to both management and investors regarding certain additional financial and business trends relating to the Company's financial condition and results from operations. In addition, eSpeed's management uses these measures for reviewing the Company's financial results and evaluating eSpeed's financial performance.
For the third quarter of 2007, the difference between GAAP net loss and non-GAAP net operating income was approximately $6.6 million, net of tax, while the difference between GAAP revenues and non-GAAP operating revenues was approximately $0.2 million. eSpeed considers "non-GAAP net operating income" to be after-tax income generated from the Company's continuing operations excluding certain non-recurring or non-core items such as, but not limited to, asset impairments, litigation judgments, costs or settlements, restructuring charges, costs related to potential acquisitions, charitable contributions, insurance proceeds, business partner securities, gains or losses on investments and similar events. eSpeed considers "non-GAAP operating revenues" to be net revenue excluding these same items.
The amortization of patent costs and associated licensing fees (including those made in settlement of litigation) from such patents are generally treated as operating items. Material judgments or settlement amounts paid or received and impairments to all or a portion of such assets are generally treated as non-operating items. Management does not provide guidance of GAAP net income because certain items identified as excluded from non-GAAP net operating income are difficult to forecast.
Discussion of Forward-Looking Statements
The information in this release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, words such as "may,""will," "should,""estimates," "predicts,""potential," "continue,""strategy," "believes,""anticipates," "plans,""expects," "intends" and similar expressions are intended to identify forward-looking statements.
The actual results of eSpeed, BGC or the combined company in the merger ("we","our" or the "combined company") and the outcome and timing of certain events may differ significantly from the expectations discussed in the forward-looking statements. Factors that might cause or contribute to such a discrepancy for eSpeed, BGC and/or the combined company include, but are not limited to, the combined company's relationship with Cantor and its affiliates and any related conflicts of interests, competition for and retention of brokers and other managers and key employees, pricing and commissions and market position with respect to any of our products, and that of the combined company's respective competitors, the effect of industry concentration and consolidation, and market conditions, including trading volume and volatility, as well as economic or geopolitical conditions or uncertainties. Results may also be impacted by the extensive regulation of our respective businesses and risks relating to compliance matters, as well as factors related to specific transactions or series of transactions, including credit, performance and unmatched principal risk as well as counterparty failure. Factors may also include the costs and expenses of developing, maintaining and protecting intellectual property, including judgments or settlements paid or received in connection with intellectual property or employment or other litigation and their related costs, and certain financial risks, including the possibility of future losses and negative cash flow from operations, risks of obtaining financing and risks of the resulting leverage, as well as interest and currency rate fluctuations.
Discrepancies may also result from such factors as the ability to enter new markets or develop new products, trading desks, marketplaces or services and to induce customers to use these products, trading desks, marketplaces or services, to secure and maintain market share, to enter into marketing and strategic alliances, and other transactions, including acquisitions, dispositions, reorganizations, partnering opportunities, and joint ventures, and the integration of any completed transactions, to hire new personnel, to expand the use of technology for screen-assisted, voice-assisted and fully electronic trading and to effectively manage any growth that may be achieved. Results are also subject to risks relating to the proposed merger and separation of the BGC businesses and the relationship between the various entities, financial reporting, accounting and internal control factors, including identification of any material weaknesses in our internal controls, our ability to prepare historical and pro forma financial statements and reports in a timely manner, and other factors, including those that are discussed under "Risk Factors" in each of eSpeed's Annual Report on Form 10-K/A for the year ended December 31, 2006, which was filed with the SEC on August 23, 2007 and BGC's Registration Statement on Form S-1 filed with the SEC on February 8, 2007 (Registration No. 333-140531) to the extent applicable.
We believe that all forward-looking statements are based upon reasonable assumptions when made. However, we caution that it is impossible to predict actual results or outcomes or the effects of risks, uncertainties or other factors on anticipated results or outcomes and that accordingly you should not place undue reliance on these statements. Forward-looking statements speak only as of the date when made and we undertake no obligation to update these statements in light of subsequent events or developments.
| eSpeed, Inc and Subsidiaries | ||||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited) | ||||||||
| (in thousands, except per share data) | ||||||||
| Â | Â | |||||||
September 30, 2007 | Â | December 31, 2006 | ||||||
| (Unaudited) | Restated | |||||||
| Â | ||||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 11,141 | $ | 21,838 | ||||
| Reverse repurchase agreements with related parties | Â | 92,326 | Â | Â | Â | 166,009 | Â | |
| Total cash and cash equivalents | 103,467 | 187,847 | ||||||
| Â | ||||||||
| Marketable securities | 2,393 | - | ||||||
| Secured loan receivable from related party | 80,000 | - | ||||||
| Fixed assets, net | 60,680 | 57,443 | ||||||
| Investments | 8,700 | 7,780 | ||||||
| Goodwill | 12,184 | 12,184 | ||||||
| Other intangible assets, net | 5,984 | 6,949 | ||||||
| Receivable from related parties | 14,325 | 7,145 | ||||||
| Other assets | Â | 13,862 | Â | Â | Â | 13,725 | Â | |
| Total assets | $ | 301,595 | Â | Â | $ | 293,073 | Â | |
| Â | ||||||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Payable to related parties | 9,457 | 7,751 | ||||||
| Accounts payable and accrued liabilities | Â | 40,907 | Â | Â | Â | 24,129 | Â | |
| Total current liabilities | 50,364 | 31,880 | ||||||
| Â | ||||||||
| Deferred income | Â | 7,069 | Â | Â | Â | 8,114 | Â | |
| Total liabilities | Â | 57,433 | Â | Â | Â | 39,994 | Â | |
| Â | ||||||||
| Stockholders' Equity: | ||||||||
Class A common stock, par value $0.01 per share; 200,000 shares authorized; 36,459 and 36,407 shares issued and 29,957 and 36,407 shares outstanding at September 30, 2007 and December 31, 2006, respectively | 365 | 364 | ||||||
Class B common stock, par value $0.01 per share; 100,000 shares authorized; 20,498 shares issued at September 30, 2007 and December 31, 2006, respectively | 205 | 205 | ||||||
| Additional paid-in capital | 302,555 | 299,682 | ||||||
Treasury stock, at cost; 6,502 and 6,488 shares of Class A common stock at September 30, 2007 and December 31, 2006 respectively | (62,597 | ) | (62,597 | ) | ||||
| Accumulated other comprehensive loss | (88 | ) | - | |||||
| Retained earnings | Â | 3,722 | Â | Â | Â | 15,425 | Â | |
| Total stockholders' equity | Â | 244,162 | Â | Â | Â | 253,079 | Â | |
| Â | ||||||||
| Total liabilities and stockholders' equity | $ | 301,595 | Â | Â | $ | 293,073 | Â | |
| eSpeed, Inc. and Subsidiaries | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME IN ACCORDANCE WITH GAAP (unaudited) | |||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||
| Â | Â | Â | Â | Â | |||||||||||||
| Â | |||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||||
| (Unaudited) | Restated | (Unaudited) | Restated | ||||||||||||||
| Revenues: | |||||||||||||||||
| Transaction revenues | |||||||||||||||||
| Fully electronic transactions with related parties | $ | 16,150 | $ | 14,598 | $ | 48,311 | $ | 45,983 | |||||||||
| Fully electronic transactions with unrelated parties | Â | 171 | Â | Â | 2,154 | Â | Â | 1,978 | Â | Â | 4,793 | ||||||
| Total fully electronic transactions | 16,321 | 16,752 | 50,289 | 50,776 | |||||||||||||
| Voice-assisted brokerage transactions with related parties | 7,214 | 6,125 | 20,993 | 20,028 | |||||||||||||
| Screen-assisted open outcry transactions with related parties | Â | 2,349 | Â | Â | 1,398 | Â | Â | 6,151 | Â | Â | 4,262 | ||||||
| Total transaction revenues | Â | 25,884 | Â | Â | 24,275 | Â | Â | 77,433 | Â | Â | 75,066 | ||||||
| Software Solutions fees from related parties | 9,257 | 7,444 | 26,947 | 22,893 | |||||||||||||
| Software Solutions and licensing fees from unrelated parties | 2,716 | 3,914 | 9,057 | 11,285 | |||||||||||||
| Insurance recovery | - | - | - | 3,500 | |||||||||||||
| Interest income | Â | 2,527 | Â | Â | 2,470 | Â | Â | 7,537 | Â | Â | 6,925 | ||||||
| Total revenues | Â | 40,384 | Â | Â | 38,103 | Â | Â | 120,974 | Â | Â | 119,669 | ||||||
| Â | |||||||||||||||||
| Expenses: | |||||||||||||||||
| Compensation and employee benefits | 16,022 | 13,616 | 45,235 | 39,846 | |||||||||||||
| Amortization of software development costs and other intangible assets | 4,800 | 5,691 | 15,171 | 18,078 | |||||||||||||
| Other occupancy and equipment | 8,510 | 8,130 | 26,916 | 28,409 | |||||||||||||
| Professional and consulting fees | 6,050 | 2,639 | 13,056 | 6,774 | |||||||||||||
| Loss contingency | 3,500 | - | 3,500 | ||||||||||||||
| Impairment of long lived assets | - | - | 4,010 | - | |||||||||||||
| Communications and client networks | 2,224 | 2,088 | 6,511 | 6,115 | |||||||||||||
| Marketing | 244 | 145 | 700 | 742 | |||||||||||||
| Administrative fees to related parties | 3,345 | 2,616 | 10,330 | 9,713 | |||||||||||||
| Amortization of business partner and non-employee securities | - | - | - | 19 | |||||||||||||
| Acquisition related costs | 1,598 | 2,026 | 5,305 | 2,026 | |||||||||||||
| Other expenses | Â | 3,372 | Â | Â | 1,888 | Â | Â | 8,244 | Â | Â | 5,848 | ||||||
| Total operating expenses | Â | 49,665 | Â | Â | 38,839 | Â | Â | 138,978 | Â | Â | 117,570 | ||||||
| Â | Â | Â | Â | ||||||||||||||
| (Loss) income before income taxes | Â | (9,281 | ) | Â | (736 | ) | Â | (18,004 | ) | Â | 2,099 | ||||||
| Â | |||||||||||||||||
| Income tax (benefit) provision | (3,276 | ) | (210 | ) | (6,510 | ) | 885 | ||||||||||
| Â | Â | Â | Â | ||||||||||||||
| Net (loss) income | $ | (6,005 | ) | $ | (526 | ) | $ | (11,494 | ) | $ | 1,214 | ||||||
| Â | |||||||||||||||||
| Per share data: | |||||||||||||||||
| Â | |||||||||||||||||
| Â | |||||||||||||||||
| Basic earnings per share | $ | (0.12 | ) | $ | (0.01 | ) | $ | (0.23 | ) | $ | 0.02 | ||||||
| Â | |||||||||||||||||
| Â | |||||||||||||||||
| Diluted earnings per share | $ | (0.12 | ) | $ | (0.01 | ) | $ | (0.23 | ) | $ | 0.02 | ||||||
| Â | |||||||||||||||||
| Â | |||||||||||||||||
| Basic weighted average shares of common stock outstanding | Â | 50,455 | Â | Â | 50,176 | Â | Â | 50,442 | Â | Â | 50,243 | ||||||
| Â | |||||||||||||||||
| Diluted weighted average shares of common stock outstanding | Â | 50,455 | Â | Â | 50,176 | Â | Â | 50,442 | Â | Â | 51,206 | ||||||
| eSpeed, Inc. and Subsidiaries | ||||||||||||||||||
| NON-GAAP CONSOLIDATED STATEMENTS OF INCOME (unaudited) | ||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||
| Â | Â | Â | Â | Â | ||||||||||||||
| Â | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||||
| (Unaudited) | Restated | (Unaudited) | Restated | |||||||||||||||
| Revenues: | ||||||||||||||||||
| Transaction revenues | ||||||||||||||||||
| Fully electronic transactions with related parties | $ | 16,150 | $ | 14,598 | $ | 48,311 | $ | 45,983 | ||||||||||
| Fully electronic transactions with unrelated parties | Â | 171 | Â | Â | 2,154 | Â | Â | 1,978 | Â | Â | 4,793 | Â | ||||||
| Total fully electronic transactions | 16,321 | 16,752 | 50,289 | 50,776 | ||||||||||||||
| Voice-assisted brokerage transactions with related parties | 7,214 | 6,125 | 20,993 | 20,028 | ||||||||||||||
| Screen-assisted open outcry transactions with related parties | Â | 2,349 | Â | Â | 1,398 | Â | Â | 6,151 | Â | Â | 4,262 | Â | ||||||
| Total transaction revenues | Â | 25,884 | Â | Â | 24,275 | Â | Â | 77,433 | Â | Â | 75,066 | Â | ||||||
| Software Solutions fees from related parties | 9,257 | 7,444 | 26,947 | 22,893 | ||||||||||||||
| Software Solutions and licensing fees from unrelated parties | 2,504 | 3,914 | 8,242 | 11,285 | ||||||||||||||
| Interest income | Â | 2,527 | Â | Â | 2,434 | Â | Â | 7,537 | Â | Â | 6,490 | Â | ||||||
| Total non-GAAP revenues | Â | 40,172 | Â | Â | 38,067 | Â | Â | 120,159 | Â | Â | 115,734 | Â | ||||||
| Â | ||||||||||||||||||
| Expenses: | ||||||||||||||||||
| Compensation and employee benefits | 15,877 | 13,379 | 44,723 | 39,810 | ||||||||||||||
| Amortization of software development costs and other intangibles | 4,714 | 5,691 | 14,847 | 16,915 | ||||||||||||||
| Other occupancy and equipment | 8,336 | 8,131 | 26,140 | 24,503 | ||||||||||||||
| Administrative fees to related parties | 3,302 | 2,616 | 10,080 | 9,713 | ||||||||||||||
| Professional and consulting fees | 2,113 | 1,789 | 5,380 | 4,387 | ||||||||||||||
| Communications and client networks | 2,224 | 2,088 | 6,454 | 6,115 | ||||||||||||||
| Marketing | 244 | 145 | 700 | 742 | ||||||||||||||
| Other expenses | Â | 2,400 | Â | Â | 2,198 | Â | Â | 7,075 | Â | Â | 6,159 | Â | ||||||
| Total non-GAAP operating expenses | Â | 39,210 | Â | Â | 36,037 | Â | Â | 115,399 | Â | Â | 108,344 | Â | ||||||
| Â | Â | Â | Â | |||||||||||||||
| Non-GAAP income before income taxes | Â | 962 | Â | Â | 2,030 | Â | Â | 4,760 | Â | Â | 7,390 | Â | ||||||
| Â | ||||||||||||||||||
| Non-GAAP provision for income taxes | 365 | 835 | 1,805 | 2,886 | ||||||||||||||
| Â | Â | Â | Â | |||||||||||||||
| Non-GAAP net operating income | Â | 597 | Â | Â | 1,195 | Â | Â | 2,955 | Â | Â | 4,504 | Â | ||||||
| Â | ||||||||||||||||||
| Non-operating loss: | ||||||||||||||||||
| Charitable contribution Re: 9/11, net of tax | (314 | ) | (242 | ) | (314 | ) | (242 | ) | ||||||||||
| Amortization of business partner and non-employee securities, net of tax | - | - | - | (11 | ) | |||||||||||||
| Litigation costs, net of tax | (4,916 | ) | (530 | ) | (7,183 | ) | (1,485 | ) | ||||||||||
| Loss on investment, net of tax | (376 | ) | - | (1,044 | ) | - | ||||||||||||
| Legal settlement, net of tax | - | 458 | - | 458 | ||||||||||||||
| Acquisition related costs, net of tax | (996 | ) | (1,260 | ) | (3,369 | ) | (1,260 | ) | ||||||||||
| Accelerated depreciation, net of tax | - | - | - | (689 | ) | |||||||||||||
| Office relocation cost, net of tax | - | - | - | (2,360 | ) | |||||||||||||
| Tax settlement, net of tax | - | (147 | ) | - | 226 | |||||||||||||
| Insurance recovery, net of tax | - | - | - | 2,073 | ||||||||||||||
| Impairment of long lived assets, net of tax | Â | - | Â | Â | - | Â | Â | (2,539 | ) | Â | - | Â | ||||||
| Total non-operating loss | Â | (6,602 | ) | Â | (1,721 | ) | Â | (14,449 | ) | Â | (3,290 | ) | ||||||
| Â | ||||||||||||||||||
| Net (loss) income | $ | (6,005 | ) | $ | (526 | ) | $ | (11,494 | ) | $ | 1,214 | Â | ||||||
| Â | ||||||||||||||||||
| Â | ||||||||||||||||||
| Per share data: | ||||||||||||||||||
| Â | ||||||||||||||||||
| Basic non-GAAP income before income taxes per share | $ | 0.02 | $ | 0.04 | $ | 0.09 | $ | 0.14 | ||||||||||
| Â | ||||||||||||||||||
| Basic non-GAAP provision for income taxes per share | $ | 0.01 | Â | $ | 0.02 | Â | $ | 0.03 | Â | $ | 0.06 | Â | ||||||
| Â | ||||||||||||||||||
| Basic non-GAAP net operating income per share | $ | 0.01 | $ | 0.02 | $ | 0.06 | $ | 0.08 | ||||||||||
| Â | ||||||||||||||||||
| Basic non-operating loss per share | $ | (0.13 | ) | $ | (0.03 | ) | $ | (0.29 | ) | $ | (0.06 | ) | ||||||
| Â | ||||||||||||||||||
| Basic GAAP earnings per share | $ | (0.12 | ) | $ | (0.01 | ) | $ | (0.23 | ) | $ | 0.02 | Â | ||||||
| Â | ||||||||||||||||||
| Â | ||||||||||||||||||
| Diluted non-GAAP income before income taxes per share | $ | 0.02 | $ | 0.04 | $ | 0.09 | $ | 0.14 | ||||||||||
| Â | ||||||||||||||||||
| Diluted non-GAAP provision for income taxes per share | $ | 0.01 | Â | $ | 0.02 | Â | $ | 0.03 | Â | $ | 0.06 | Â | ||||||
| Â | ||||||||||||||||||
| Diluted non-GAAP net operating income per share | $ | 0.01 | $ | 0.02 | $ | 0.06 | $ | 0.08 | ||||||||||
| Â | ||||||||||||||||||
| Diluted non-operating loss per share | $ | (0.13 | ) | $ | (0.03 | ) | $ | (0.29 | ) | $ | (0.06 | ) | ||||||
| Â | ||||||||||||||||||
| Diluted GAAP earnings per share | $ | (0.12 | ) | $ | (0.01 | ) | $ | (0.23 | ) | $ | 0.02 | Â | ||||||
| Â | ||||||||||||||||||
| Â | ||||||||||||||||||
| Basic weighted average shares of common stock outstanding | Â | 50,455 | Â | Â | 50,176 | Â | Â | 50,442 | Â | Â | 50,243 | Â | ||||||
| Â | ||||||||||||||||||
| Diluted weighted average shares of common stock outstanding | Â | 50,455 | Â | Â | 50,176 | Â | Â | 50,442 | Â | Â | 51,206 | Â | ||||||
| Â | ||||||||||||||||||
| Additional data: | ||||||||||||||||||
| Â | ||||||||||||||||||
| Non-GAAP pre-tax operating margin | Â | 2.4 | % | Â | 5.3 | % | Â | 4.0 | % | Â | 6.4 | % | ||||||
| eSpeed, Inc. & Subsidiaries | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| Â | Â | Â | Â | |||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (Unaudited) | Restated | (Unaudited) | Restated | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net (loss) income | $ | (6,005 | ) | $ | (526 | ) | $ | (11,494 | ) | $ | 1,214 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 7,196 | 8,841 | 23,559 | 27,564 | ||||||||||||
| Insurance recovery from related parties | - | - | - | (3,500 | ) | |||||||||||
| Impairment of long lived assets | - | - | 4,010 | - | ||||||||||||
| Equity in net loss of unconsolidated investments | 308 | 11 | 413 | (33 | ) | |||||||||||
| Deferred income tax expense | (3,311 | ) | (223 | ) | (6,792 | ) | (841 | ) | ||||||||
| Stock-based compensation | 814 | 637 | 2,513 | 1,719 | ||||||||||||
| Tax benefit from stock-based compensation | - | 13 | 44 | 106 | ||||||||||||
| Excess tax benefits from stock-based compensation | - | (8 | ) | (49 | ) | (47 | ) | |||||||||
| Recognition of deferred revenue | (1,556 | ) | (1,008 | ) | (3,915 | ) | (2,857 | ) | ||||||||
| Â | ||||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Receivable from related parties | (3,954 | ) | 3,932 | (7,180 | ) | (744 | ) | |||||||||
| Other assets | (1,130 | ) | 2,657 | (1,244 | ) | (4,573 | ) | |||||||||
| Payable to related parties | 2,791 | 1,374 | 1,706 | (2,115 | ) | |||||||||||
| Accounts payable and accrued expenses | 13,607 | 4,206 | 23,166 | 11,732 | ||||||||||||
| Deferred income | Â | 1,148 | Â | Â | 877 | Â | Â | 2,870 | Â | Â | 2,517 | Â | ||||
| Net cash provided by operating activities | Â | 9,908 | Â | Â | 20,783 | Â | Â | 27,607 | Â | Â | 30,142 | Â | ||||
| Â | ||||||||||||||||
| Cash flows (used in) investing activities: | ||||||||||||||||
| Secured loan to related party | (80,000 | ) | - | (80,000 | ) | - | ||||||||||
| Insurance proceeds from related parties | - | - | - | 3,500 | ||||||||||||
| Purchase of fixed assets | (9,701 | ) | (4,087 | ) | (12,944 | ) | (8,755 | ) | ||||||||
| Purchase of marketable securities | (147 | ) | - | (2,481 | ) | - | ||||||||||
| Capitalization of software development costs | (4,548 | ) | (3,358 | ) | (16,148 | ) | (11,658 | ) | ||||||||
| Capitalization of patent defense and registration costs | (566 | ) | (436 | ) | (1,332 | ) | (1,011 | ) | ||||||||
| Decrease in restricted cash | - | 1,827 | ||||||||||||||
| Purchase of investment | Â | - | Â | Â | Â | (750 | ) | Â | ||||||||
| Net cash used in investing activities | Â | (94,962 | ) | Â | (7,881 | ) | Â | (111,828 | ) | Â | (17,924 | ) | ||||
| Â | ||||||||||||||||
| Cash flows provided by (used in) provided by financing activities: | ||||||||||||||||
| Repurchase of Class A common stock | - | - | (373 | ) | - | |||||||||||
| Proceeds from exercises of stock options and warrants | - | 52 | 165 | 421 | ||||||||||||
| Excess tax benefit from stock based compensation | Â | - | Â | Â | 8 | Â | Â | 49 | Â | Â | 47 | Â | ||||
| Net cash provided by (used in) financing activities | Â | - | Â | Â | 60 | Â | Â | (159 | ) | Â | 468 | Â | ||||
| Â | ||||||||||||||||
| Net (decrease) increase in cash and cash equivalents | Â | (85,054 | ) | Â | 12,962 | Â | Â | (84,380 | ) | Â | 12,686 | Â | ||||
| Â | ||||||||||||||||
| Cash and cash equivalents at beginning of period | 3,624 | 37,495 | 21,838 | 37,070 | ||||||||||||
| Reverse repurchase agreements with related parties at beginning of period | Â | 184,897 | Â | Â | 140,666 | Â | Â | 166,009 | Â | Â | 141,365 | Â | ||||
| Total cash and cash equivalents at beginning of period | Â | 188,521 | Â | Â | 178,161 | Â | Â | 187,847 | Â | Â | 178,435 | Â | ||||
| Â | ||||||||||||||||
| Cash and cash equivalents at end of period | 11,141 | 94,149 | 11,141 | 94,149 | ||||||||||||
| Reverse repurchase agreements with related parties at end of period | Â | 92,326 | Â | Â | 96,972 | Â | Â | 92,326 | Â | Â | 96,972 | Â | ||||
| Total cash and cash equivalents at end of period | $ | 103,467 | Â | $ | 191,121 | Â | $ | 103,467 | Â | $ | 191,121 | Â | ||||
| Â | ||||||||||||||||
| Supplemental cash information: | ||||||||||||||||
| Cash paid for income taxes | $ | 87 | $ | 46 | $ | 122 | $ | 145 | ||||||||
| Supplemental disclosure of non-cash investing activities: | ||||||||||||||||
| Contribution of net fixed assets to related party | - | - | $ | (583 | ) | - | ||||||||||
| eSpeed, Inc. & Subsidiaries | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF FREE CASH FLOWS (unaudited) | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| Â | Â | Â | Â | Â | |||||||||||||
| Three Months Ended September 30, | Nine Months Ended September, 30 | ||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||||
| (Unaudited) | Restated | (Unaudited) | Restated | ||||||||||||||
| Â | |||||||||||||||||
| Non-GAAP income before income taxes | $ | 962 | $ | 2,030 | $ | 4,760 | $ | 7,390 | |||||||||
| Â | |||||||||||||||||
| Depreciation and amortization | $ | 7,196 | 8,841 | 23,559 | 27,564 | ||||||||||||
| Other non-cash and non-operating items | Â | (10,764 | ) | Â | (2,746 | ) | Â | (19,793 | ) | Â | (10,154 | ) | |||||
| Non-GAAP (loss) income before income taxes adjusted for depreciation, amortization and other | Â | (2,606 | ) | Â | 8,125 | Â | Â | 8,405 | Â | Â | 2400 | Â | |||||
| Â | |||||||||||||||||
| Â | |||||||||||||||||
| Provision for income taxes on non-GAAP operating income | (365 | ) | (835 | ) | (1,805 | ) | (2,886 | ) | |||||||||
| Income tax provision on non-operating income | 3,641 | 1,045 | 8,315 | 2,001 | |||||||||||||
| Deferred income tax expense | (3,311 | ) | (223 | ) | (6,792 | ) | (841 | ) | |||||||||
| Tax benefit from stock-based compensation | - | 13 | 44 | 106 | |||||||||||||
| Income taxes paid | Â | 87 | Â | Â | 46 | Â | Â | 122 | Â | Â | 145 | Â | |||||
| Increase (decrease) in current income tax payable | 52 | 46 | (116 | ) | (1,475 | ) | |||||||||||
| Â | |||||||||||||||||
| Changes in related party receivable and payable, net | (1,163 | ) | 5,306 | (5,474 | ) | (2,859 | ) | ||||||||||
| Changes in other operating assets and liabilities, net | Â | 13,625 | Â | Â | 7,306 | Â | Â | 24,792 | Â | Â | 9,676 | Â | |||||
| Net cash provided by operating activities | Â | 9,908 | Â | Â | 20,783 | Â | Â | 27,607 | Â | Â | 30,142 | Â | |||||
| Â | |||||||||||||||||
| Insurance proceeds from related parties | - | - | - | 3,500 | |||||||||||||
| Purchase of fixed assets | (9,701 | ) | (4,087 | ) | (12,944 | ) | (8,755 | ) | |||||||||
| Purchase of marketable securities | (147 | ) | - | (2,481 | ) | - | |||||||||||
| Capitalization of software development costs | (4,548 | ) | (3,358 | ) | (16,148 | ) | (11,658 | ) | |||||||||
| Capitalization of patent defense and registration costs | (566 | ) | (436 | ) | (1,332 | ) | (1,011 | ) | |||||||||
| Purchase of investment | - | - | (750 | ) | - | ||||||||||||
| Decrease in restricted cash | Â | - | Â | Â | - | Â | Â | 1,827 | Â | Â | - | Â | |||||
| Free cash flows | Â | (5,054 | ) | Â | 12,902 | Â | Â | (4,221 | ) | Â | 12,218 | Â | |||||
| Â | |||||||||||||||||
| Related party receivable and payable, net | Â | 1,163 | Â | Â | (5,306 | ) | Â | 5,474 | Â | Â | 6,359 | Â | |||||
| Free cash flows, net of related party activity | $ | (3,891 | ) | $ | 7,596 | Â | $ | 1,253 | Â | $ | 18,577 | Â | |||||
| Â | |||||||||||||||||
| eSpeed, Inc. and Subsidiaries | |||||||||||||||||
| RECONCILIATION of NON-GAAP FINANCIAL MEASURES TO GAAP (unaudited) | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| Â | Â | Â | Â | Â | |||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||||
| (Unaudited) | Restated | (Unaudited) | Restated | ||||||||||||||
| Â | |||||||||||||||||
| Revenues | $ | 40,172 | 38,067 | $ | 120,159 | 115,734 | |||||||||||
| Insurance recovery [a] | - | - | - | 3,500 | |||||||||||||
| Tax settlement [b] | - | - | - | 399 | |||||||||||||
| Legal settlement [d] | 36 | 36 | |||||||||||||||
| eSpeed Equities [c] | Â | 212 | Â | Â | - | Â | Â | 815 | Â | Â | - | Â | |||||
| GAAP revenues | $ | 40,384 | Â | $ | 38,103 | Â | $ | 120,974 | Â | $ | 119,669 | Â | |||||
| Â | |||||||||||||||||
| Operating expenses | $ | 39,210 | $ | 36,037 | $ | 115,399 | $ | 108,344 | |||||||||
| Amortization of business partner and non-employee securities [d] | - | - | - | 19 | |||||||||||||
| Litigation costs [e] | 7,436 | 850 | 11,176 | 2,387 | |||||||||||||
| Tax settlement [f] | - | 237 | - | 36 | |||||||||||||
| Legal settlement | (700 | ) | (700 | ) | |||||||||||||
| Accelerated amortization [g] | - | - | - | 1,162 | |||||||||||||
| Office relocation costs [h] | - | - | - | 3,907 | |||||||||||||
| Acquisition related costs [i] | 1,598 | 2,026 | 5,305 | 2,026 | |||||||||||||
| Impairment of long lived assets (j) | - | - | 4,010 | - | |||||||||||||
| Charitable contribution Re: 9/11[k] | 628 | 389 | 628 | 389 | |||||||||||||
| Loss on investment (l) | Â | 793 | Â | Â | - | Â | Â | 2,460 | Â | Â | - | Â | |||||
| GAAP expenses | $ | 49,665 | Â | $ | 38,839 | Â | $ | 138,978 | Â | $ | 117,570 | Â | |||||
| Â | |||||||||||||||||
| Pre-tax operating income | $ | 962 | $ | 2,030 | $ | 4,760 | $ | 7,390 | |||||||||
| Sum of reconciling items = [a] + [b] + [c] - [d] - [e] - [f] - [g] - [h] - [i] - [j] - [k] - [l] | Â | (10,243 | ) | Â | (2,766 | ) | Â | (22,764 | ) | Â | (5,291 | ) | |||||
| GAAP (loss) income before income tax provision | $ | (9,281 | ) | $ | (736 | ) | $ | (18,004 | ) | $ | 2,099 | Â | |||||
| Â | |||||||||||||||||
| Non-GAAP provision for income taxes | $ | 365 | $ | 835 | $ | 1,805 | $ | 2,886 | |||||||||
| Income tax benefit on non-operating income [m] | Â | (3,641 | ) | Â | (1,045 | ) | Â | (8,315 | ) | Â | (2,001 | ) | |||||
| GAAP (benefit) provision for income taxes | $ | (3,276 | ) | $ | (210 | ) | $ | (6,510 | ) | $ | 885 | Â | |||||
| Â | |||||||||||||||||
| Non-GAAP net operating income | $ | 597 | $ | 1,195 | $ | 2,955 | $ | 4,504 | |||||||||
| Sum of reconciling items = [a] + [b] + [c] - [d] - [e] - [f] - [g] - [h] - [i] - [j] - [k] - [l] - [m] | Â | (6,602 | ) | Â | (1,721 | ) | Â | (14,449 | ) | Â | (3,290 | ) | |||||
| GAAP net (loss) income | $ | (6,005 | ) | $ | (526 | ) | $ | (11,494 | ) | $ | 1,214 | Â | |||||
| eSpeed, Inc. and Subsidiaries | ||||||||||||||
| Quarterly Market Activity Report | ||||||||||||||
| Â | ||||||||||||||
| The following table provides certain volume and transaction count information on the eSpeed system for the periods indicated. | ||||||||||||||
| Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | % Change | Â | % Change | ||
| 3Q06 | 4Q06 | 1Q07 | 2Q07 | 3Q07 | 3Q07 vs 2Q07 | 3Q07 vs 3Q06 | ||||||||
| Volume (in billions) | ||||||||||||||
| Fully Electronic Volume - Excluding New Products | 9,381 | 9,813 | 11,809 | 10,281 | 12,689 | 23.4% | 35.3% | |||||||
| Fully Electronic Volume - New Products* | 1,179 | 1,335 | 1,415 | 1,066 | 990 | (7.1%) | (16.0%) | |||||||
| Total Fully Electronic Volume | 10,560 | 11,148 | 13,224 | 11,347 | 13,679 | 20.6% | 29.5% | |||||||
| Â | ||||||||||||||
| Voice-Assisted Volume | 8,217 | 7,933 | 8,884 | 9,820 | 10,883 | 10.8% | 32.5% | |||||||
| Screen-Assisted Volume | 5,898 | 6,111 | 7,486 | 7,317 | 8,438 | 15.3% | 43.1% | |||||||
| Total Voice/Screen-Assisted Volume | 14,115 | 14,044 | 16,370 | 17,137 | 19,321 | 12.7% | 36.9% | |||||||
| Â | Â | Â | Â | Â | Â | Â | ||||||||
| Total Volume | 24,675 | 25,192 | 29,594 | 28,484 | 33,000 | 15.9% | 33.7% | |||||||
| Â | ||||||||||||||
| Transaction Count | ||||||||||||||
| Fully Electronic Transactions - Excluding New Products | 1,687,779 | 1,764,930 | 2,062,341 | 1,749,219 | 2,660,756 | 52.1% | 57.6% | |||||||
| Fully Electronic Transactions - New Products* | 140,539 | 142,239 | 144,378 | 153,673 | 128,425 | (16.4%) | (8.6%) | |||||||
| Total Fully Electronic Transactions | 1,828,318 | 1,907,169 | 2,206,719 | 1,902,892 | 2,789,181 | 46.6% | 52.6% | |||||||
| Â | ||||||||||||||
| Voice-Assisted Transactions | 183,646 | 177,789 | 201,250 | 209,504 | 216,436 | 3.3% | 17.9% | |||||||
| Screen-Assisted Transactions | 66,451 | 62,977 | 92,496 | 114,320 | 119,370 | 4.4% | 79.6% | |||||||
| Total Voice/Screen-Assisted Volume | 250,097 | 240,766 | 293,746 | 323,824 | 335,806 | 3.7% | 34.3% | |||||||
| Â | Â | Â | Â | Â | Â | Â | ||||||||
| Total Transactions | 2,078,415 | 2,147,935 | 2,500,464 | 2,226,716 | 3,124,987 | 40.3% | 50.4% | |||||||
| Â | ||||||||||||||
| Trading Days | 63 | 62 | 62 | 64 | 63 | |||||||||
| Â | ||||||||||||||
| * New Products defined as Foreign Exchange, Interest Rate Swaps, Repos, Futures, and Credit Default Swaps. CBOT Futures volume calculated based on per contract notional value of $200,000 for the two year contract and $100,000 for all others. | ||||||||||||||
| Â | ||||||||||||||
| Â | ||||||||||||||
| Global Interest Rate Futures Volume (1) | ||||||||||||||
| Â | CBOT - US Treasury Contracts | 126,285,125 | 129,828,448 | 161,232,523 | 171,180,151 | 190,159,708 | 11.1% | 50.6% | ||||||
| CME - Euro $ Contracts | 127,101,116 | 130,341,959 | 152,724,717 | 148,244,973 | 180,358,177 | 21.7% | 41.9% | |||||||
| EUREX - Bund Contracts | 72,591,730 | 74,001,534 | 88,987,126 | 88,867,284 | 91,302,644 | 2.7% | 25.8% | |||||||
| Â | ||||||||||||||
| Fed UST Primary Dealer Volume (in billions) (2) | ||||||||||||||
| UST Volume | 32,171 | 30,742 | 34,437 | 33,100 | 39,414 | 19.1% | 22.5% | |||||||
| Average Daily UST Volume | 511 | 496 | 555 | 517 | 626 | 21.0% | 22.5% | |||||||
| Â | ||||||||||||||
| NYSE - Volume (shares traded) - in millions (3) | 108,825 | 114,434 | 123,765 | 127,755 | 145,470 | 13.9% | 33.7% | |||||||
| Transaction Value - in millions | 3,941,583 | 4,316,756 | 4,943,056 | 5,339,909 | 6,015,397 | 12.6% | 52.6% | |||||||
| Â | ||||||||||||||
| NASDAQ - Volume (shares traded) - in millions (4) | 116,510 | 121,477 | 131,410 | 134,007 | 136,916 | 2.2% | 17.5% | |||||||
| Transaction Value - in millions | 2,587,538 | 2,945,401 | 3,300,788 | 3,526,949 | 3,896,657 | 10.5% | 50.6% | |||||||
Sources(1) Futures Industry Association - Monthly Volume Report - (www.cbot.com, www.cme.com, www.eurexchange.com) | ||||||||||||||
(2) www.ny.frb.org/pihome/statistics/dealer - Federal Reserve Bank | ||||||||||||||
(3) NYSE - www.nyse.com | ||||||||||||||
(4) NASDAQ - www.marketdata.nasdaq.com | ||||||||||||||
| Trading Days | ||||||
| 2007 | ||||||
| Â | Â | Â | ||||
| Q1 | Q2 | Q3 | Q4 | |||
| 62 | 64 | 63 | 62 | |||
| Â | ||||||
| 2006 | ||||||
| Q1 | Q2 | Q3 | Q4 | |||
| 62 | 63 | 63 | 62 | |||
