MF Global Holdings Ltd. (NYSE: MF), a broker-dealer providing trading and hedging solutions, today reported results for its second fiscal quarter ended September 30, 2011.
Second Quarter Highlights
- Market volatility impacts net revenue. Revenue, net of interest and transaction-based expenses (net revenue), was $205.9 million for the second quarter 2012, compared with $240.3 million for the same period last year.
- Compensation ratio was higher on lower net revenues. Employee compensation and benefits (excluding non-recurring IPO awards) as a percentage of net revenue was 64.9 percent for the second quarter, compared with 58.0 percent for the same period last year. Adjusted employee compensation (excluding non-recurring IPO awards) as a percentage of net revenue was 62.3 percent for the second quarter, compared with 56.3 percent for the same period last year. 1
- Certain charges impact GAAP results. GAAP net loss applicable to common shareholders was $191.6 million, or $1.16 per basic and diluted share for the second quarter, compared with a loss of $94.3 million, or $0.59 per basic and diluted share for the same period last year. 2 Significant charges in the quarter included valuation allowances against deferred tax assets of $119.4 million, restructuring charges of $10.0 million and loss on extinguishment of debt of $16.1 million from retiring a portion of the firm’s 9 percent senior notes due 2038.
- Adjusted loss per fully diluted share was $0.09 for the quarter. Adjusted loss per fully diluted share was $0.09 for the second quarter 2012, compared with adjusted earnings per fully diluted share of $0.02 for the same period last year. 3
- Strengthened capital and liquidity position. As of September 30, 2011, the company has over $3.7 billion in available liquidity, including $1.3 billion in available committed revolving credit facilities and $2.5 billion in total capital. 4
“Reflecting the stressed markets in the quarter, we deliberately chose to reduce overall market exposure in most principal trading activities and focused on preserving capital and liquidity,” said Jon S. Corzine, chairman and chief executive officer, MF Global. “We also used the dislocation in the markets to add quality people for strategic roles, as well as expand our client relationships across our businesses.”