The following table presents a reconciliation of EBITDA, as adjusted, to net loss as reported.

      Three months ended September 30,       Nine months ended September 30,
(in thousands)

2011
     

2010

2011
     

2010
 
Total revenues $ 48,898 $ 48,363 $ 166,331 $ 139,918
Total expenses 51,684 51,341 167,841 149,101
Pre-tax loss (2,786 ) (2,978 ) (1,510 ) (9,183 )
Net loss (3,070 ) (3,205 ) (2,461 ) (9,837 )
 
Reconciliation of EBITDA, as adjusted, to
net loss:
EBITDA, as adjusted 287 (39 ) 7,053 1,371
Add:
Interest income (3 ) (11 ) 27 (29 )
Less:
Interest expense (820 ) (641 ) (2,468 ) (2,533 )
Income tax expense (284 ) (227 ) (951 ) (654 )
Depreciation and amortization (862 ) (996 ) (2,650 ) (3,030 )
Non-cash compensation (688 ) (1,291 ) (2,772 ) (4,656 )
Acquisition related expense (700 ) (700 )
Clearing conversion expense               (306 )
Net loss $ (3,070 ) $ (3,205 ) $ (2,461 ) $ (9,837 )
 

Earnings before interest, taxes, depreciation and amortization, or EBITDA, adjusted for gains or losses on sales of assets, non-cash compensation expense, acquisition related expense and clearing conversion expense is a key metric the Company uses in evaluating its business. EBITDA is considered a non-GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933, as amended. The Company considers EBITDA, as adjusted, important in evaluating its business on a consistent basis across various periods due to the significance of non-cash and non-recurring items. The Company uses EBITDA, as adjusted, as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions regarding future operating investments and potential acquisitions. The Company believes that EBITDA, as adjusted, eliminates items that are not part of its core operating performance, such as expenses related to Investacorp’s conversion to a single clearing firm as part of a new seven-year clearing agreement and expenses related to the acquisition of Securities America, or do not involve a cash outlay, such as stock-related compensation. The presentation of EBITDA, as adjusted, should not be construed as an inference that the Company's future results will be unaffected by unusual or non-recurring items or by non-cash items, such as non-cash compensation, which is expected to remain a key element in its long-term incentive compensation program. EBITDA, as adjusted, should be considered in addition to, rather than as a substitute for, pre-tax loss, net loss and cash flows from operating activities.

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