4Q2010 Earnings Presentation4Q2010 Earnings Presentation

Notes & DisclaimersDiscussion of Forward-Looking Statements by BGC Partners Information in this document 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 forward looking statements include statements about the g goutlook and prospects for the Company and for its industry as well as statements about its future financial and operating performance. Such statements are based upon current expectations that involve risks and uncertainties. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied because of a number of risks and uncertainties that include, but are not limited to, the risks and uncertainties identified in BGC Partners’ filings with the U.S. Securities and Exchange Commission. The Company believes that all forward-looking statements are based upon reasonable assumptions when made. However, BGC Partners cautions that it is impossible to

di l l h ff f i k i i h f i i d l d h di l 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 the Company undertakes no obligation to update these statements in light of subsequent events or developments. Please refer to the complete disclaimer with respect to forward looking statements and the risk factors set forth in BGC Partners’ public filings which are incorporated into this document by reference.

Note Regarding Financial Tables and Metrics An excel file with the Company’s quarterly financial results and metrics from full year 2008 through the fourth quarter of 2010 is accessible at the “Investor Relations” section of http://www.bgcpartners.com. It is also available directly at http://www.bgcpartners.com/ir-news.

Distributable EarningsThis presentation should be read in conjunction with BGC’s most recent financial results press release. Unless otherwise stated, throughout this presentation we refer to our results only on a distributable earnings basis. For a complete description of this term and how, when and why management uses it, see the final page of this presentation. For both this description and a reconciliation to GAAP, see the sections of BGC’s most recent financial results press release entitled “Distributable Earnings,” “Distributable Earnings Results Compared with GAAP Results”, and “Reconciliation of GAAP Income to Distributable Earnings”, which are incorporated by reference, and available in the “Investor Relations” section of our website at http://www bgcpartners comsection of our website at http://www.bgcpartners.com.

2

Select 4Q2010 Results Compared to 4Q2009

Revenues were up 7.6% to $322.5 million versus $299.8 million

Pre tax earnings were up 97 4% to $45 4 million versus $23 0 million Pre-tax earnings were up 97.4% to $45.4 million versus $23.0 million

Pre-tax earnings per share were up 72.7% to $0.19

Post-tax earnings were up 168.1% to $39.8 million versus $14.8 million Post tax earnings were up 168.1% to $39.8 million versus $14.8 million

Post-tax earnings per fully diluted share were up 142.9% to $0.17

The pre-tax earnings margin improved to 14.1% of revenues from 7.7% while the p g g ppost-tax earnings margin improved to 12.3% from 5.0%

BGC Partners’ Board of Directors declared a quarterly cash dividend of $0.14 per share payable on March 11 2011 to Class A and Class B common stockholders of share payable on March 11, 2011 to Class A and Class B common stockholders of record as of February 25, 2011. This is an increase of 133.3% year-over-year.

3

1Q2011 Outlook Compared with 1Q2010

Revenues of between $355 million and $370 million, up approximately 2% -6% $348 9 illiversus $348.9 million

Pre-tax distributable earnings of approximately $57 million to $63 million, up 27% -40% versus $44.8 million40% versus $44.8 million

Post-tax distributable earnings of approximately $48 million to $54 million, up 26% - 40% versus $38.1 million

The Company anticipates its effective tax rate for distributable earnings to be approximately 15 percent for the first quarter and full year 2011

4

4Q2010 Global Revenue Breakdown

C i

Toronto London

Copenhagen

ParisNyon

Istanbul

Moscow

New YorkChicago

Mexico City

Istanbul

Beijing Seoul Tokyo

Hong Kong

Sarasota

4Q2010 Revenues

Dubai

Aspen

West Palm Beach

Garden City

EMEAAmericas

27 5%

APAC15.7%

Singapore

Johannesburg

São PauloRio de Janeiro

4Q2010 Revenues

EMEA56.8%

27.5%Sydney

Johannesburg

Americas Revenue up 10.5% y-o-yAsia Pacific Revenue up 4.5% y-o-yEurope Middle East & Africa Revenue up 7 1% y o y

5

Europe, Middle East & Africa Revenue up 7.1% y-o-y

Note: Based on Distributable Earnings. Totals may not sum due to rounding. See the second to last page of this presentation for average exchange rates for the period.

Full Year 2010 Global Revenue Breakdown

C i

Toronto London

Copenhagen

ParisNyon

Istanbul

Moscow

New YorkChicago

Mexico City

Istanbul

Beijing Seoul Tokyo

Hong Kong

Sarasota

FY2010 Revenues

Dubai

Aspen

West Palm Beach

Garden City

Americas31 0%

APAC15.0%

Singapore

Johannesburg

São PauloRio de Janeiro

FY2010 Revenues

EMEA54.0%

31.0% Sydney

Johannesburg

Americas Revenue up 36.9% y-o-yAsia Pacific Revenue up 19.9% y-o-yE ro e Middle East & Africa Re en e 2 7% o

6

Note: Based on Distributable Earnings. Total may not sum due to rounding. See the second to last page of this presentation for average exchange rates for the period.

Europe, Middle East & Africa Revenue up 2.7% y-o-y

4Q2010 Revenue Breakdown by Product

Equities and Market data & software

Fees from related

parties, interestOther Asset

Classes 13.5%

software2.3%

parties, interest & other income

5.4%

Revenues related to fully

Rates 42.1%

Foreign Exchange

14.9%

Revenues related to fully electronic trading* = 10.0% of total DE revenues in 4Q2010 vs. 9.2% in 4Q2009

Credit 21 8%21.8%

Up 16.1% y-o-y

7

* This includes fees captured in both the “total brokerage revenues” and “ fees from related party” line items related to fully electronic trading. Note: percentages may not sum to 100% due to rounding.

Full Year 2010 Revenue Breakdown by Product

Equities and Market data & software

Fees from related

parties, interest

Foreign

Other Asset Classes 13.3%

software2.0%

parties, interest & other income

6.0%

Revenues related to fully

Rates 41.7%

gExchange

13.8%

Revenues related to fully electronic trading* = 9.4% of total DE revenues in FY2010 vs. 8.2% in FY2009

Credit 23 3%23.3%

Up 30.7% y-o-y

8

* This includes fees captured in both the “total brokerage revenues” and “ fees from related party” line items related to fully electronic trading. Note: percentages may not sum to 100% due to rounding.

Brokerage Overview: Rates% of 4Q2010 Total Distributable Earnings % of 4Q2010 Total Distributable Earnings

• Interest rate derivatives• US Treasuries• Global Government Bonds

% of 4Q2010 Total Distributable Earnings Revenue

% of 4Q2010 Total Distributable Earnings RevenueExample of ProductsExample of Products

Rates42.1%

Global Government Bonds• Agencies• Futures• Dollar derivatives• Repurchase agreementsp g• Non-deliverable swaps• Interest rate swaps & options

Rates Revenue Growth Rates Revenue Growth DriversDrivers

$500

$600$483.2

$556.2

s)

• Voice & fully electronic cash rates business grew due to continuing strong fixed income issuance globally

• Global activity aided by heightened global levels

$0

$100

$200

$300

$400

$125.9 $135.9

(USD

mill

ions• Global activity aided by heightened global levels

of interest rate volatility

• BGC’s continued investment in its Rates franchise

9

$0FY 2009 FY 2010 Q4 2009 Q4 2010

Treasury Quarterly Net Borrowing

Record US Treasury Issuance = Continued Tailwind

$500

$600

Short Term Bills Start Rolling

Over to Longer Dated

$300

$400 Total Estimate

Over 10 year TIPS

5-10 year TIPS

Over 10 years

5-10 years

$100

$200

Borr

owin

g ($

in b

illio

ns) 2-under 5 years

Bills

($100)

$0

I-2005 II III IV I-2006 II III IV I-2007 II III IV I-2008 II III IV I-2009 II III IV I -2010 II III IV I -2011 II

Estimate

($300)

($200)

BGC generally trades 2-year or longer dated UST securities

10

Source: US Department of the Treasury. Data for Q2 2011 is the projected estimate for net borrowing. Treasury Fiscal Year ends September 30th.

7820,000

US Federal Debt Balance Should Keep Growing…

74

7618,000

s)

Projections

70

72

14,000

16,000 Percent olions

of d

olla

rs

66

6812,000

, of GD

PD

ebt

(in

bill

62

64

66

8,000

10,000

628,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Debt Held by the Public Debt Held by the Public as a % of GDP

11

Source: Congressional Budget Office, “The Budget and Economic Outlook: Fiscal Years 2011 to 2021,” January 2011.

8%85%

…As Should EU Deficits and Gross Debt

6%

7%

8%

80%

85%

4%

5%

70%

75% Percent of Gen

t of

GD

P

2%

3%

60%

65%

GD

PPe

rce

0%

1%

55%

60%

2008 2009 2010 2011 2012

Even as deficits begin to stabilize as a percentage of GDP, gross debt continues to riseA i l d fi i i di i b h b d d h i l d i d di d i i

Debt (lef t axis) Def icit (right axis)

Estimates

As national deficits rise, trading in both bonds and their related interest rate and credit derivatives increases

12

Source: European Commission. “European Economic Forecast-Autumn 2010,” published 11/29/10.

Brokerage Overview: Credit

• Credit derivatives

% of 4Q2010 Total Distributable Earnings Revenue

% of 4Q2010 Total Distributable Earnings RevenueExample of ProductsExample of Products

Credit21.8%

• Asset-backed securities

• Convertibles

• Corporate bonds

Hi h i ld b d• High yield bonds

• Emerging market bonds

Credit Revenue GrowthCredit Revenue GrowthDriversDrivers

$500

• Primarily lower industry-wide corporate bond and credit derivative activity

$100

$200

$300

$400 $331.4$311.0

$70.4 $70.3

(USD

mill

ions

)• Partially offset by a significant increase in revenues from fully electronic credit trading

• Strong y-o-y growth in sovereign CDS $0

FY 2009 FY 2010 Q4 2009 Q4 2010

13

Strong y o y growth in sovereign CDS activity

Sovereign CDS Activity Remains Strong

5 Year sovereign CDS spreads remained elevated in Q4

5 Year Sovereign CDS Spreadsg p

Sovereign risk has significantly increased over the last

decade

14

Source: Top Left: The Economist Magazine, The World in 2011 Special Edition.Bottom Right Bloomberg, 1/20/10 – 1/20/11.

Brokerage Overview: Foreign Exchange % f 4Q2010 T t l Di t ib t bl E i % f 4Q2010 T t l Di t ib t bl E i

FX

• Foreign exchange options• G-10• Emer in markets

% of 4Q2010 Total Distributable Earnings Revenue

% of 4Q2010 Total Distributable Earnings RevenueExample of ProductsExample of Products

14.9%• Emerging markets• Cross currencies• Exotic options• Spot FX

E i k FX i• Emerging market FX options• Exotic FX options• Non-deliverable forwards

Foreign Exchange Revenue GrowthForeign Exchange Revenue GrowthDriversDrivers

$175$183.8

g gg g

• Continuing rebound in global volumes particularly as credit issues continue to ease for customers of

$50

$75

$100

$125

$150 $136.5

$38.5 $48.0

(USD

mill

ions

)BGC’s Emerging Markets desks

• Growth in BGC’s market share

• Also driven by significant y-o-y growth in revenues from BGC’s fully

15

$0

$25

$

FY 2009 FY 2010 Q4 2009 Q4 2010

growth in revenues from BGC s fully electronic foreign exchange business

BGC Compares Favorably to Overall FX Industry

October 2010 Y-O-Y OTC

20%

15%14%

BGC 4Q2010 FX Revenues up 25% Y-O-Y

30%

25%23%

Central Bank FX Average Daily Volume Growth

10%

10%

(Gro

wth

)

20%

23%

14%wth

)

10% 7%(AD

V G

row

0%CME FX Futures

ICAP Spot FX Reuters Spot FX

0%UK Singapore US Canada

4Q2010 Y-O-Y Industry FX Volumes Growth

16

Left Graph: Source: ICAP, CME, Reuters websites. CME FX Futures growth based on total volume, ICAP Spot FX and Reuters Spot FX based on average daily volume. Right Graph: Central Bank FX average daily volume growth is calculated based on the sum of “Traditional FX” defined as spot, forwards, and FX swaps and “FX Derivatives” defined as currency swaps and FX options. FX Sources: New York Fed FX Committee, Canadian FX Committee, Singapore FX Market Committee, UK FX Joint Standing Committee. All Growth Percentages Based on Average Daily volumes in USD.

Brokerage Overview: Equities & Other Asset Classes

Equities &

% of 4Q2010 Total Distributable Earnings Revenue

% of 4Q2010 Total Distributable Earnings RevenueExample of ProductsExample of Products

• Equity derivatives qOther13.5%

• Cash Equities

• Index futures

• Commodities

Equities & Other Asset Classes Revenue GrowthEquities & Other Asset Classes Revenue Growth

• Energy derivatives

• Other derivatives and futures

DriversDrivers qq

$125$150$175$200

$122.5

$177.6

ons)

• Strong growth globally from the Company’s increased investment in equity related products

$0$25$50$75

$100$125

$38.7$43.5

(USD

mill

ioq y p

• The addition of assets from Mint

• Growth from BGC’s energy and commodities desks

17

FY 2009 FY 2010 Q4 2009 Q4 2010

FY 2010 Y-O-Y GrowthFY 2010 Y-O-Y Growth

“Equities and Other” Desks Outperform Overall Market

45%55%

65%

45%

25%

35%

45%

owth

)

8% 7%11%

15%

-15%5%

15%

25%

(Gro

15%

-15%

-5% OCC US Equity

Options Volumes

Eurex Equity Derivatives

Volumes (includes OTC)

CME Energy Volumes(includes

OTC)

ICE OTC Energy

Revenues

BGC’s “Equities and Other” Revenues

Total US EquitiesVolume (Tapes

A+B+C)-25%

Note: Cash equities growth percentages based on average daily shares traded for US exchanges. Equity Derivatives based on equity option

A+B+C)

18

average daily volume from OCC, for ICE growth percentages are based on average daily commissions, and for CME growth is based onaverage daily volume. For Eurex , growth is based on average daily total equity derivatives volume which includes single name and index. Sources: erdesk.com for US equities volumes, OCC for US Equity option volumes, Credit Suisse research for Eurex volumes, company press releases for CME volumes and ICE energy revenues.

BGC Front Office Employee Growth

$1,200

Front Office Productivity (in thousands)Front Office Productivity (in thousands)Front Office HeadcountFront Office Headcount

$800

$1,000

$799.5 $784.7

1,553 1,551 1,612 1,721 1,705

1 000

1,500

2,000

Em

ploy

ees)

$400

$600

($ t

hous

ands

)0

500

1,000

(Fro

nt O

ffice

$0

$200

$400

$188.2 $180.2

4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010$0

2009 2010 4Q2009 4Q2010

Historically, the Company’s average revenue per front office employee has declined for the periods following significant headcount increases. BGC Partners’ new front office employees generally achieve higher productivity levels in their second year with the Company

19

Note: Front office productivity is calculated as “total brokerage revenue,” “market data and software sales revenue,” and the portion of “ fees from related party” line items related to fully electronic trading divided by average front office headcount for the relevant period.

BGC Fully Electronic Growth

$40$15

Fully Electronic Revenues (in millions)*Fully Electronic Revenues (in millions)*Fully Electronic Volumes (in trillions)Fully Electronic Volumes (in trillions)

$30

$35

$27.7

$31.3 $31.6$30.3

$32.2

$11.6$11.9

$10.7

$11.8

$20

$25

($ m

illio

ns)

$10$8.9

($ t

rilli

ons)

$15

$

$104Q2009 1Q2010 2Q2010 3Q2010 4Q2010

$54Q2009 1Q2010 2Q2010 3Q2010 4Q2010

Over time, higher fully electronic revenues has = improved margins

20

* This includes fees captured in both the “total brokerage revenues” and “ fees from related party” line items related to fully electronic trading.

BGC Partners Compensation Ratio

$644 9 $719.6 $713.3

65.5%

57.7% 58.2% 60.9%56.2% 60%

70%

$600

$700

$800

$560.0

$644.9 $719.6 $713.3 $749.8

30%

40%

50%

$400

$500

$600

mill

ions

)

10%

20%

30%

$100

$200

$300 ($

0%$0

$

2006 2007 2008 2009 2010

Compensation and Employee Benefits Compensation and Employee Benefits as % of Total Revenue

Compensation ratio was 53.8% in 4Q2010 vs. 61.5% in 4Q2009

21

Operating Leverage / Fixed Expense Base

36%

46%

40%

50%

11% 10% 14%

30%29%31%

20%

30%

6% 10%

(10%)

0%

10%

(11%)(20%)

FY2006 FY 2007 FY 2008 FY 2009 FY2010Pre-tax distributable earnings as % of Total Revenue Non-comp Expenses as a % of Total Revenue

Non-comp expenses were 32.1% of distributable earnings revenues in 4Q2010 versus 30.8% in 4Q2009 Pre-tax distributable earnings margin was 14.1% in 4Q2010 vs. 7.7% in 4Q2009 Post-tax distributable earnings margin was 11.7% in 4Q2010 vs. 5.0% in 4Q2009

22

Note: FY 2006 based on GAAP pre-tax margin.

BGC Revenue Trend (millions)

$375

$400

$349$355

$370Outlook

Up 2% - 6% y-o-y

$325

$350

$322

$349

ns)

$300

$3 5$300

($ m

illio

n

$250

$275

$200

$225

$200Q4 2009 Q4 2010 Q1 2010 Q1 2011 low Q1 2011 high

23

Distributable Earnings Growth

Pre-tax Distributable Earnings GrowthPre-tax Distributable Earnings Growth Post-tax Distributable Earnings GrowthPost-tax Distributable Earnings Growth

Up 26% - 40% y-o-yUp 27% - 40% y-o-y

$45

$50

$55

$60

$39.8 $38 1

$48.0

$54.0

$55

$60

$65

$70

$57.0$63.0

Outlook Outlook

p y y

$25

$30

$35

$40

$39.8 $38.1

($ m

illio

ns)

$35

$40

$45

$50 $45.4 $44.8

$ m

illio

ns)

$10

$15

$20

$25

$14.8

(

$10

$15

$20

$25

$30 $23.0

($

$0

$5

4Q09 4Q10 1Q10 1Q11 Low

1Q11 High

$0

$5

$10

4Q09 4Q10 1Q10 1Q11 Low

1Q11 High

24

Fourth quarter pre-tax & post-tax distributable earnings per fully diluted share were up 73% and 143% y-o-y, respectively

150

Strong Monthly Revenue Performance ($MM)

9496

10199

10398 100 98

110

102 104102 101

104

118 118126

100

125

2007 Revenue

2008 Revenue

83 82

89

7581

89

81

75

2008 Revenue

buta

ble

($M

M)

150

50

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

hly

Dis

trib

Rev

enue

s

January 2011 Revenue = 123, up 4% y-o-y

100

85

10196 95

10398

111 110

101

88

118

108

122

113119

105

97

107

122

115 115

93100

125

2009 Revenue

2010 Revenue

GC

Mon

tE

arni

ngs

R

8582

50

75

BG E

50Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

25

Note: January 2011 revenue number is preliminary.

BGC Economic Ownership as of 12/31/2010

Employees,

Public29%

p oyees,Executives, & Directors

37%

29%

CantorCantor34%

26

Note: Employee ownership figure attributes all PSIs, PSUs, RSUs, REUs, BGC units and distribution rights to founding partners & employees and includes all A shares owned by executives and directors. Cantor ownership includes all Cantor A and B shares as well as all Cantor exchangeable units and distribution rights to Cantor partners. Public ownership includes all A shares not owned by insiders. The above chart excludes shares related to convertible debt.

Tax Equivalent Yield AnalysisTAX ASSUMPTIONS BGCP STOCK ASSUMPTIONS

Q lifi d O di

Annual Dividend

BGCP Price Pre Tax YieldQualified Ordinary Dividend Price Pre-Tax Yield

Federal 15.0% 35.0% 0.56$ 8.77$ 6.4%New York State 9.0% 9.0%New York City 3.9% 3.9%Net itemized deduction -4.5% -4.5%ff 23 3% 43 3%effective rate 23.3% 43.3%

Scenario 1: 10 % is non-taxable XYZ Corporation = pays qualified dividend, 100% taxableS i 2 18 " " ABC F d di ib i bl di i

NON-TAXABLE PERCENTAGE OF BGCP DIVIDEND ASSUMPTIONS

ASSUMPTIONS ABOUT ALTERNATIVE INVESTMENTS

Scenario 2: 18 " " ABC Fund = pays distribution taxable as ordinary income Scenario 3: 40 " "Scenario 4: 80 " "Scenario 5: 100 " "

BGCP VERSUS ALTERNATE INVESTMENTS

BGC Pre-tax Yield

BGC After-

Tax Yield

Required Pre-Tax

Yield "XYZ"

Required Pre-Tax

Yield "ABC"tax Yield Tax Yield XYZ ABC

10 6.2% 4.9% 6.4% 8.7%18 6.2% 5.2% 6.7% 9.1%40 6.2% 5.4% 7.0% 9.4%

80 6.2% 5.9% 7.7% 10.5%100 6 2% 6 2% 8 1% 11 0%

% BGC Dividend

Non-Taxable

27

100 6.2% 6.2% 8.1% 11.0%

BGC Pre tax Yield BGC After Tax Yield Required Pre Tax Yield "XYZ" Required Pre Tax Yield "ABC"

Tax Equivalent Yield Analysis (Continued)

10.5%11.0%

11.0%

12.0%

BGC Pre-tax Yield BGC After-Tax Yield Required Pre-Tax Yield XYZ Required Pre-Tax Yield ABC

18% = Actual expected non-taxable percentage for 2010

7 7%8.1%

8.7%9.1%

9.4%

8 0%

9.0%

10.0%

6.2% 6.2% 6.2% 6.2% 6.2%

5 4%

5.9%6.2%6.4%

6.7%7.0%

7.7%

6.0%

7.0%

8.0%

4.9%5.2% 5.4%

4.0%

5.0%

3.0%

10 18 40 80 100

% BGC Dividend Non-Taxable

28

Average Exchange Rates

Averageg

FY 2010 FY 2009 4Q2010 4Q2009 Jan. 2011 Jan. 2010

US Dollar 1 1 1 1 1 1

British Pound 1.546 1.566 1.582 1.633 1.577 1.615

Euro 1.328 1.395 1.360 1.477 1.336 1.426

Hong Kong Dollar 0.129 0.129 0.129 0.129 0.129 0.129

Singapore Dollar 0.734 0.689 0.768 0.717 0.777 0.715Singapore Dollar 0.734 0.689 0.768 0.717 0.777 0.715

Japanese Yen* 87.750 93.580 82.520 89.810 82.510 91.290

29

Source: Oanda.com. *Inverted.

Distributable EarningsBGC Partners uses non-GAAP financial measures including "Revenues for distributable earnings," "pre-tax distributable earnings" and "post-tax distributable earnings," which are supplemental measures of operating performance that are used by management to evaluate the financial performance of the Company and its subsidiaries. BGC Partners believes that distributable earnings best reflects the operating earnings generated by the Company on a consolidated basis and are the earnings which management considers believes that distributable earnings best reflects the operating earnings generated by the Company on a consolidated basis and are the earnings which management considers available for distribution to BGC Partners, Inc. and its common stockholders, as well as to holders of BGC Holdings partnership units during any period. As compared with "income (loss) from operations before income taxes," "net income (loss) for fully diluted shares," and "fully diluted earnings (loss) per share," all prepared in accordance with GAAP, distributable earnings calculations primarily exclude certain non-cash compensation and other expenses which generally do not involve the receipt or outlay of cash by the Company, which do not dilute existing stockholders, and which do not have economic consequences, as described below. Revenues for distributable earnings are defined as GAAP revenues excluding the impact of BGC Partners, Inc.'s non-cash earnings or losses related to its equity investments, such as in Aqua Securities, L.P. and ELX Futures, L.P., and its holding company general partner, ELX Futures Holdings LLC. Pre-tax distributable earnings are defined as GAAP income (loss) from operations before i l di i h i il h dil i d i i h N h k b d i i h f REU income taxes excluding items that are primarily non-cash, non-dilutive, and non-economic items, such as: Non-cash stock-based equity compensation charges for REUs granted or issued prior to the merger of BGC Partners, Inc. with and into eSpeed, as well as post-merger non-cash, non-dilutive equity-based compensation related to partnership unit exchange or conversion. Allocations of net income to founding/working partner and other units, including REUs, RPUs, PSUs and PSIs. Non-cash asset impairment charges, if any. Acquisition-related costs not capitalized under GAAP. Distributable earnings calculations also exclude charges related to purchases, cancellations or redemptions of partnership interests and certain one-time or non-recurring items, if any. Since distributable earnings are calculated on a pre-tax basis, management intends to also report "post-tax distributable earnings" and "post-tax distributable earnings per fully diluted share“: "Post-tax distributable earnings" are defined as pre-tax distributable earnings adjusted to assume that all pre-tax distributable earnings were taxed at the same effective rate. "Post-tax distributable earnings per fully diluted share" are defined as post-tax distributable earnings divided by the weighted-average number of fully diluted shares for the period. In the event that there is a GAAP loss but positive distributable earnings, the distributable earnings per share calculation will include all fully diluted shares that would be excluded under GAAP to avoid anti-dilution, but will exclude quarterly interest expense, net of tax, associated with the convertible notes. Each quarter, the dividend to common stockholders is expected to be determined by the Company’s Board of Directors with reference to post-tax distributable earnings per share. In addition to the Company’s quarterly dividend to common stockholders, BGC Partners expects to pay a pro rata distribution of net income to BGC Holdings founding/working partner and other units, including REUs, RPUs, PSUs and PSIs, and to Cantor for its noncontrolling interest. The amount of all of these payments is expected to be determined using the above definition of pre-tax distributable earnings per share. Most employees who are holders of RSUs are granted pro-rata payments equivalent to the amount of dividends paid to common stockholders. Under GAAP, dividend equivalents p y g p p y q p , qon RSUs are required to be taken as a compensation charge in the period paid. However, to the extent that they represent cash payments made from the prior period's distributable earnings, they do not dilute existing stockholders and are therefore excluded from the calculation of distributable earnings. Distributable earnings is not meant to be an exact measure of cash generated by operations and available for distribution, nor should it be considered in isolation or as an alternative to cash flow from operations or income (loss) for fully diluted shares. The Company views distributable earnings as a metric that is not necessarily indicative of liquidity or the cash available to fund its operations. Pre- and post-tax distributable earnings are not intended to replace the Company’s presentation of GAAP financial results. However, management believes that they help provide investors with a clearer understanding of BGC Partners’ financial performance and offer useful information to both management and investors regarding certain financial and business trends related to the Company’s financial condition and results of operations Management believes that distributable earnings and the GAAP certain financial and business trends related to the Company s financial condition and results of operations. Management believes that distributable earnings and the GAAP measures of financial performance should be considered together. Management does not anticipate providing an outlook for GAAP revenues, “income (loss) from operations before income taxes”, “net income (loss) for fully diluted shares,” and “fully diluted earnings (loss) per share”, because the items previously identified as excluded from pre-tax distributable earnings and post-tax distributable earnings are difficult to forecast. Management will instead provide its outlook only as it relates to revenues for distributable earnings, pre-tax distributable earnings and post-tax distributable earnings. For both this description and a reconciliation to GAAP, see the sections of BGC’s most recent financial results press release titled “Distributable Earnings” and “Reconciliation of GAAP Income To Distributable Earnings”, which are incorporated by reference, and available in the “Investor Relations” section of our website at http://www.bgcpartners.com.

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