Pre-tax loss from continuing operations of $61.3 million for the year ended December 31, 2011 increased by $35.5 million compared to pre-tax loss from continuing operations of $25.8 million for the year ended December 31, 2010. Non-GAAP pre-tax income from continuing operations increased by $17.4 million to $20.9 million for the year ended December 31, 2011, compared to the comparable non-GAAP pre-tax income from continuing operations of $3.5 million for the year ended December 31, 2010.
|Business Segment Results (including Non-GAAP results)|
|Three Months Ended December 31,||Years Ended December 31,|
|MBS/ABS & Rates||$||14,301||$||32,147||$||99,933||$||117,144|
|Net revenues - operating segments||58,437||62,397||248,448||243,261|
|Pre-tax income/(loss) from continuing operations:|
|MBS/ABS & Rates||$||3,309||$6,120 *||$||31,452||$34,942 *|
|Corporate Credit||3,393||88 *||8,532||4,477 *|
|Investment Banking||(1,086||)||(4,801) *||7,458 *||4,640 *|
|Pre-tax income - operating segments||4,837||1,407 *||43,756 *||44,059 *|
|Other||(4,473||)||(10,032) *||(22,889) *||(40,528) *|
|Total||$||364||$(8,625) *||$20,867 *||$3,531 *|
|*Designates non-GAAP financial results. A reconciliation of the Company’s GAAP results to non-GAAP financial results is set forth below under the caption “Non-GAAP Financial Results.”|
MBS/ABS & Rates
Fourth Quarter 2011 vs. 2010
Net revenues declined by $17.8 million to $14.3 million for the quarter ended December 31, 2011, compared to $32.1 million in the fourth quarter of 2010. The decrease in net revenues was attributable to lower commissions and principal transactions revenues of $20.9 million due to losses of $2.5 million on asset-backed securities, compared to gains of $11.9 million in the prior year period, as well as lower trading volumes in the current period. Partially offsetting this decline was an increase in net interest income of $3.2 million due to higher inventory levels. Pre-tax income of $3.3 million for the quarter ended December 31, 2011 declined by $2.8 million, compared to non-GAAP pre-tax income of $6.1 million for the fourth quarter of 2010. This reduction is a direct result of the lower revenues, partially offset by lower variable compensation expense (as a result of the lower revenues). Non-GAAP pre-tax income of $6.1 million for the fourth quarter of 2010 was also impacted by higher compensation expense resulting from a change in vesting provisions to equity compensation awards expected to be granted as part of year-end compensation for services in 2010, which is further described below as part of the “Consolidated Compensation and Benefits Expenses” discussion.
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