First Quarter 2012 vs. 2011
Net revenues declined by $24.7 million to $64.7 million for the quarter ended March 31, 2012, compared to $89.4 million ($87.1 million on a non-GAAP basis) in the first quarter of 2011. This decline was primarily attributable to decreases of $31.4 million in the MBS/ABS & Rates segment and $3.1 million in the Investment Banking segment, partially offset by increases of $9.1 million in ClearPoint and $1.2 million in the Corporate Credit segment and higher investment gains of $0.8 million resulting from the change in value of the Company’s FATV investment.
Pre-tax (loss)/income from continuing operations of ($5.3) million for the quarter ended March 31, 2012 declined by $20.0 million compared to pre-tax (loss)/income from continuing operations of $14.7 million for the quarter ended March 31, 2011. Non-GAAP pre-tax (loss)/income from continuing operations of ($3.6) million declined by $16.0 million compared to non-GAAP pre-tax (loss)/income from continuing operations of $12.4 million in the first quarter of 2011.
|Business Segment Results (including Non-GAAP results)|
|Three Months Ended March 31,|
|MBS/ABS & Rates||$||20,331||$||51,706|
|Net revenues - operating segments||62,126||86,172|
|Pre-tax (loss)/income from continuing operations:|
|MBS/ABS & Rates||$||5,487||$||18,865|
|Pre-tax income - operating segments||4,175||*||21,220|
|*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 & RatesFirst Quarter 2012 vs. 2011 Net revenues declined by $31.4 million to $20.3 million for the quarter ended March 31, 2012, compared to $51.7 million in the first quarter of 2011. The decrease in net revenues was attributable to lower commissions and principal transactions revenues of $32.7 million, primarily resulting from gains on asset-backed securities of $36.2 million recognized in the first quarter of 2011. Partially offsetting this decline was an increase in net interest income of $1.3 million due to higher inventory levels and coupon interest. Pre-tax income of $5.5 million for the quarter ended March 31, 2012 declined by $13.4 million, compared to pre-tax income of $18.9 million for the first quarter of 2011. This reduction is a direct result of the lower revenues, partially offset by lower variable compensation expense (as a result of the lower revenues).
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