FXCM Inc. (NYSE: FXCM), a leading online provider of foreign exchange, or FX, trading and related services, today announced for the quarter ended September 30, 2011, revenues increased to $109.1 million, compared to $103.4 million for the second quarter 2011 and $90.5 million for the third quarter 2010, an increase of 5% and 20% respectively. Adjusted Pro Forma EBITDA for the third quarter 2011 was $31.4 million compared to $28.5 million for the second quarter 2011 and $27.9 million for the third quarter 2010, an increase of 10% and an increase of 13%, respectively. Adjusted Pro Forma Net Income was $17.1 million, or $0.23 per share on a fully exchanged, fully diluted basis, compared to $15.6 million, or $0.21 per share for the second quarter 2011 and $16.4 million, or $0.22 per share, for the third quarter 2010, an increase of 10% and 4% of Adjusted Pro Forma Net Income, respectively. U.S. GAAP net income for the third quarter 2011 was $3.4 million, or $0.21 cents per fully diluted Class A share.

Adjusted Pro Forma results assume the conversion and exchange of all FXCM Holdings, LLC units into FXCM Inc. Class A shares, resulting in the elimination of the non-controlling interest and the corresponding adjustment to the entity’s tax provision. In addition, Adjusted Pro Forma results eliminate certain non-recurring charges and equity based compensation expense.

For the nine months ended September 30, 2011 revenues increased 16% to $307.1 million, compared to $264.2 million for the corresponding period in 2010. Adjusted Pro Forma EBITDA for the year was $85.5 million, compared to $88.2 million, for the corresponding prior year period, a decrease of 3%. Adjusted Pro Forma Net Income was $46.5 million, or $0.62 per share on a fully exchanged, fully diluted basis, compared to $52.2 million, or $0.69 per share, for the corresponding prior year period, a decrease of 11%. U.S. GAAP net income for the nine months ended September 30, 2011 was $9.5 million, or $0.56 cents per fully diluted Class A share.

“FXCM delivered solid results in the third quarter. Our retail client volume of $1,042 billion was a quarterly record,” said Drew Niv, Chief Executive Officer of FXCM Inc. “We are particularly pleased that our US operations turned in a particularly solid performance with 38% sequential growth in volume from the second quarter 2011.”

“In addition, on October 7 th we closed our acquisition of Foreland Forex in Japan which more than doubles our presence in Japan, the world’s largest retail FX market, and will increase our customer equity in excess of $1 billion,” he continued.

In addition, FXCM Inc. today announced certain key operating metrics for October 2011 for its retail and institutional foreign exchange business. Monthly activities included:

October Monthly Metrics:

Retail Trading Metrics
  • Retail customer trading volume(1) of $339 billion in October 2011, 8% lower than September 2011 and 24% higher than October 2010.
  • Average retail customer trading volume(1) per day of $16.2 billion in October 2011, 4% lower than September 2011 and 24% higher than October 2010.
  • An average of 462,882 retail client trades per day in October 2011, 4% lower than September 2011 and 39% higher than October 2010.
  • Active accounts(2) of 161,991 as of October 31, 2011, an increase of 5,938, or 4% from September 2011, and an increase of 27,352, or 20%, from October 2010.

Institutional Trading Metrics
  • Institutional customer trading volume(1) of $174 billion in October 2011, 35% higher than September 2011 and 159% higher than October 2010.
  • Average institutional trading volume(1) per day of $8.3 billion in October 2011, 42% higher than September 2011 and 159% higher than October 2010.
  • An average of 43,213 institutional client trades per day in October 2011, 90% higher than September 2011 and 969% higher than October 2010.

More information, including historical results for each of the above metrics, can be found on the investor relations page of the Company's corporate website, www.fxcm.com.

This operating data is preliminary and subject to revision and should not be taken as an indication of the financial performance of FXCM Inc. FXCM undertakes no obligation to publicly update or review previously reported operating data. Any updates to previously reported operating data will be reflected in the historical operating data that can be found on the Investor Relations page of the Company’s corporate website, www.fxcm.com.

(1) Volume that FXCM customers traded in period translated into US dollars.

(2) An account that has traded at least once in the previous twelve months.
   
 

Consolidated Adjusted Pro Forma and U.S. GAAP Results
 
Adjusted Pro Forma (thousands except per share amounts)

Three Months Ended September 30,
   

Nine Months Ended September 30,

2011
   

2010
 

% Change

2011
   

2010
   

% Change
 
Total Revenues $

109,068

 
$ 90,531 20 % $ 307,119 $ 264,153 16 %
 
Referring broker fees 25,720

24,607
5 %

72,253

 

61,680

 
17 %
Compensation and benefits 20,835 17,826 17 %

62,142
52,325 19 %
Other expenses   31,088     20,179   54 %   87,254     61,957   41 %
 
EBITDA   31,425     27,919   13 %   85,470     88,191   -3 %
 
Depreciation and amortization 5,367 1,831 193 % 14,201 5,292 168 %
 
Income before income taxes   26,058     26,088   0 %   71,269     82,899   -14 %
 
Income tax provision 8,932 9,678 -8 % 24,820 30,667 -19 %
 
Net Income   17,126     16,410   4 %   46,449     52,232   -11 %
 
Net income attributable to non-controlling interest - - - - - -
       
Net Income Attributable to FXCM Inc. $ 17,126   $ 16,410   4 % $ 46,449   $ 52,232   -11 %
 
Pro forma fully exchanged, fully diluted shares outstanding 74,449 75,300 -1 % 74,978 75,300 0 %
 
Earnings Per Share $ 0.23   $ 0.22   6 % $ 0.62   $ 0.69   -11 %
 
 
 
Unaudited U.S. GAAP (thousands except per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

2011

2010

% Change

2011

2010

% Change
 
Total Revenues $ 109,068 $ 90,531 20 % $ 307,119 $ 264,153 16 %
 
Referring broker fees 25,720 24,607 5 % 72,253 61,680 17 %
Compensation and benefits 22,955 17,826 29 % 68,662 52,325 31 %
Other expenses   31,350     20,179   55 %   103,516     61,957   67 %
 
EBITDA   29,043     27,919   4 %   62,688     88,191   -29 %
 
Depreciation and amortization 5,367 1,831 193 % 14,201 5,292 168 %
 
Income before income taxes   23,676     26,088   -9 %   48,487     82,899   -42 %
 
Income tax provision 8,136 (1,449 ) -661 % 10,756 3,517 206 %
 
Net Income   15,540     27,537   -44 %   37,731     79,382   -52 %
 
Net income attributable to non-controlling interest 12,142 27,537 -56 % 28,222 79,382 -64 %
       
Net Income Attributable to FXCM Inc. $ 3,398   $ -   $ 9,509   $ -  
 
 
Net Income (in thousands) $ 3,398   $ 9,509  
 

Net Income per Class A Share Basic and Diluted
$ 0.21   $ 0.56  
 
Average Class A shares outstanding   16,468     16,997  
 
 

Selected Operating Metrics
   
(Unaudited)

Three Months Ended September 30,
   

Nine Months Ended September 30,

2011
 

2010
 

% Change

2011
 

2010
 

% Change
 
Total trading volume ($ in billions) $ 1,042 $ 776 34 % $ 2,802 $ 2,342 20 %
 
Total active accounts 156,053 134,478 16 % 156,053 134,478 16 %
 
Trading days in period 66 66 195 194
 
Daily average trades 438,599 302,438 45 % 366,902 314,337 17 %
 
Daily average trades per active account 2.8 2.3 22 % 2.5 2.5 0 %
 
Retail trading revenue per million traded $ 93 $ 104 -11 % $ 96 $ 100 -4 %
 
Total customer equity ($ in millions) $ 828.2 $ 424.6 95 % $ 828.2 $ 424.6 95 %
 

Non-GAAP Financial Measures

Adjusted Pro Forma EBITDA, Adjusted Pro Forma Net Income and Adjusted Pro Forma Net Income per fully diluted share are non-GAAP financial measures. These measures do not represent and should not be considered as a substitute for net income, net income attributable to FXCM Inc. or net income per Class A share or as a substitute for cash flow from operating activities, each as determined in accordance with GAAP, and our calculations of these measures may not be comparable to similarly entitled measures reported by other companies. See “Adjusted Pro Forma Results” beginning on A-3 of this release for additional information regarding these non-GAAP financial measures and for reconciliations of such measure to the most directly comparable measures calculated in accordance with GAAP.

Declaration of Quarterly Dividend

The company also announced today that its board of directors has declared a quarterly dividend of $0.06 per share on its outstanding Class A common stock. The dividend is payable on December 30, 2011 to Class A stockholders of record at the close of business on December 19, 2011.

Conference Call

As previously announced, FXCM Inc. will host a conference call to discuss its results at 8:15 a.m. (EST) today. This conference call will be available to domestic participants by dialing 866.788.0546 and 857.350.1684 for international participants. The conference ID number is 23809446.

A live, audio webcast, a copy of FXCM's earnings release, and a presentation and replay of this conference call will also be available at http://ir.fxcm.com/.

Disclosure Regarding Forward-Looking Statements

In addition to historical information, this earnings release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect FXCM Inc.’s current views with respect to, among other things, its operations and financial performance for the future. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. FXCM Inc. believes these factors include but are not limited to evolving legal and regulatory requirements of the FX industry, the limited operating history of the FX industry, risks related to the protection of its proprietary technology, risks related to its dependence on FX market makers, market conditions and those other risks described under “Risk Factors” in FXCM Inc.’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2011 and subsequently filed quarterly reports on Form 10-Q.

These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this presentation and in our SEC filings. FXCM Inc. undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

About FXCM Inc.

FXCM Inc. (NYSE: FXCM) is a global online provider of foreign exchange, or FX, trading and related services to retail and institutional customers world-wide.

At the heart of FXCM's client offering is No Dealing Desk FX trading. Clients benefit from FXCM's large network of forex liquidity providers enabling FXCM to offer competitive spreads on major currency pairs. Clients have the advantage of mobile trading, one-click order execution and trading from real-time charts. FXCM's U.K. subsidiary, Forex Capital Markets Limited, offers CFD products with no re-quote trading and allows clients to trade oil, gold, silver and stock indices along with FX on one platform. In addition, FXCM offers educational courses on FX trading and provides free news and market research through DailyFX.com.

Trading foreign exchange and CFDs on margin carries a high level of risk, and may not be suitable for all. Read full disclaimer.
 
 

ANNEX I
 
Schedule    

PageNumber
       
U.S. GAAP Results      

Unaudited U.S. GAAP Consolidated Statements of Operations for the Three andNine Months Ended September 30, 2011 and 2010
    A-1

Unaudited U.S. GAAP Consolidated Statements of Financial Condition As ofSeptember 30, 2011 and December 31, 2010
    A-2
       
Adjusted Pro Forma Results     A-3

Unaudited Adjusted Pro Forma and U.S. GAAP Consolidated Statements ofOperations for the Three Months Ended September 30, 2011 and 2010
    A-4

Unaudited Adjusted Pro Forma and U.S. GAAP Consolidated Statements ofOperations for the Nine Months Ended September 30, 2011 and 2010
    A-5
       
Reconciliation of EBITDA to U.S. GAAP Net Income     A-6
 
FXCM Inc.Consolidated Statement of Operations(In thousands, except per share amounts)(Unaudited )
 

Three Months Ended September 30,
 

Nine Months Ended September 30,
  2011       2010     2011       2010  
Revenues    
 
Retail trading revenues

$

97,017

 
$ 80,383

$

268,234

 

$

234,608

 
Institutional trading revenues 7,720 7,190 21,820 20,779
Interest Income 963 488 2,837 1,493
Other Income   3,368     2,470     14,228     7,273  
 
Total revenues   109,068     90,531     307,119     264,153  
 
Expenses
 
Referring broker fees 25,720 24,607 72,253 61,680
Compensation and benefits 22,955 17,826 68,662 52,325
Advertising and marketing 9,870 5,601 24,375 16,916
Communication and technology 8,190 6,373 23,559 19,171
General and administrative 13,197 8,178 55,356 25,792
Depreciation and amortization 5,367 1,831 14,201 5,292
Interest expense   93     27     226     78  
 
Total expenses   85,392     64,443     258,632     181,254  
 
Income before income taxes 23,676 26,088 48,487 82,899
Income tax provision   8,136     (1,449 )  

10,756
    3,517  
Net income 15,540 27,537 37,731 79,382
Net income attributable to non-controlling interest   12,142     27,537     28,222     79,382  
Net income attributable to FXCM, Inc. $ 3,398   $ -   $ 9,509   $ -  
 
 
 
Net Income (in thousands) $ 3,398   $ 9,509  
 

Net Income per Class A Share

Basic and Diluted
$ 0.21   $ 0.56  
 
Average Class A shares outstanding   16,468     16,997  
 

A-1
 
 
FXCM Inc.Consolidated Statements of Financial ConditionAs of September 30, 2011 and December 31, 2010(Amounts in thousands)(Unaudited)
      September 30,2011   December 31,2010
 
Assets
 
Current assets
Cash and cash equivalents

$

177,582

 

$

193,330

 
Cash and cash equivalents, held for customers 828,235 641,152
Due from brokers 8,136 125
Accounts receivables 16,143 18,324
Deferred tax asset 8,017 7,625
Tax receivable   546     1,643  
Total current assets 1,038,659 862,199
 
Deferred tax asset 83,474 90,107
Office, communication and computer equipment, net 32,386 18,709
Intangible assets and goodwill, net 62,284 64,409
Other assets   17,045     12,369  
Total assets $ 1,233,848   $ 1,047,793  
 
Liabilities and Equity
 
Current liabilities
Customer account liabilities $ 828,235 $ 641,152
Accounts payable and accrued expenses 52,273 37,470
Due to brokers 694 13,314
Deferred tax liability - current 1,650 1,844
Due to related parties - pursuant to tax receivable agreement 3,744 3,817
Deferred revenue   -     6,000  
Total current liabilities   886,596     703,597  
 
Deferred tax liability 4,735 5,770
Due to related parties - pursuant to tax receivable agreement   67,702     70,419  
Total liabilities   959,033     779,786  
 
Commitments and Contingencies
 
Stockholders' equity
Class A common stock, par value $0.01 per share;
3,000,000 shares authorized, 15,368,028 and 17,319,000 shares issuedand outstanding as of September 30, 2011, and December 31, 2010, respectively 154 173
Class B common stock, par value $0.01 per share;
1,000,000 shares authorized, 100 and 0 shares issuedand outstanding as of September 30, 2011, and December 31, 2010, respectively 1 1
Additional paid-in-capital 87,215 101,848
Retained earnings 6,661 146
Accumulated other comprehensive income   67     52  
Total stockholders' equity of FXCM, Inc. 94,098 102,220
Non-controlling interest   180,717     165,787  
Total stockholders' equity   274,815     268,007  
Total liabilities and stockholders' equity $ 1,233,848   $ 1,047,793  
 

A-2
 

Adjusted Pro Forma Results

Throughout the discussion of FXCM Inc.’s results, information is presented on an Adjusted Pro Forma basis, which is a non-generally accepted accounting principles (“non-GAAP”) measure. Adjusted Pro Forma results begin with information prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), adjusted to exclude certain items and reflects the conversion of all units of FXCM Holdings, LLC for shares of Class A common stock of FXCM Inc. FXCM believes that the disclosed Adjusted Pro Forma measures and any adjustments thereto, when presented in conjunction with comparable U.S. GAAP measures, are useful to investors to compare FXCM’s results across several periods and facilitate an understanding of FXCM’s operating results. The Company uses these measures to evaluate its operating performance, as well as the performance of individual employees. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. The differences between Adjusted Pro Forma and U.S. GAAP results are as follows:
  1.   Assumed Exchange of Units of FXCM Holdings, LLC for FXCM Inc. Class A Shares. As a result of the exchange of FXCM Holdings units, the non-controlling interest related to these units is converted to controlling interest. The Company’s management believes that it is useful to provide the per-share effect associated with the assumed exchange of all FXCM Holdings units.
 
2. Stock Based Compensation Expense. Adjustments have been made to the Adjusted Pro Forma Earnings to eliminate expense relating to stock based compensation. The Company’s management believes it is useful to provide the effects of eliminating these expenses.
 
3. Income Taxes. Prior to the initial public offering FXCM was organized as a series of limited liability companies and foreign corporations, and even following the initial public offering not all of the Company’s income is subject to corporate-level taxes. As a result, adjustments have been made to the Adjusted Pro Forma earnings to assume that the Company has adopted a conventional corporate tax structure and is taxed as a C corporation in the U.S. at the prevailing corporate rates, that all deferred tax assets relating to foreign operations are fully realizable within the structure on a consolidated basis and that adjustments for deferred tax assets related to the ultimate tax deductions for equity-based compensation awards are recorded directly to stockholders’ equity. This assumption is consistent with the assumption that all of FXCM Holdings’ units are exchanged for shares of FXCM Inc. Class A common stock, as discussed in Item 1 above, as the assumed exchange would change the tax structure of the Company.
 
4. Regulatory Reserve. During the nine months ended September 30, 2011, the Company established a reserve of $16.3 million regarding a settlement with the NFA and the CFTC relating to trade execution activities. Pursuant to an agreement with a subsidiary of FXCM Holdings LLC, certain founding members of FXCM Holdings agreed to reimburse the cost of these matters, up to $16.3 million. In July 2011 and August 2011, $16.0 million and $0.3 million of additional capital was provided by the respective founding members and their capital accounts were increased and decreased for the funding and expense, respectively, in accordance with their membership interest in Holdings. Consequently there was no impact to FXCM Inc.'s net income for the three and nine months ended September 30, 2011 as the expense was allocated to the respective members for such expenses as permitted under terms of Holdings’ LLC agreement. The Company believes it is useful to provide the effects of eliminating these expenses.
 

A-3
 
                   

FXCM Inc.Adjusted Pro Forma Consolidated Statements of Operations(In thousands, except per share amounts)(Unaudited)
 

Three Months Ended September 30,
2011 2010
AsReported Adjustments AdjustedPro Forma AsReported Adjustments AdjustedPro Forma
Revenues
 
Retail trading revenues $ 97,017 - $ 97,017 $ 80,383 - $ 80,383
Institutional trading revenues 7,720 - 7,720 7,190 - 7,190
Interest income 963 - 963 488 - 488
Other income   3,368   -     3,368   2,470     -     2,470
 
Total revenues   109,068   -     109,068   90,531     -     90,531
 
Expenses
 
Referring broker fees 25,720 - 25,720 24,607 - 24,607
Compensation and benefits 22,955 (2,120 )

(1)
20,835 17,826 - 17,826
Advertising and marketing 9,870 - 9,870 5,601 - 5,601
Communication and technology 8,190 - 8,190 6,373 - 6,373
General and administrative 13,197 (262 )

(2)
12,935 8,178 - 8,178
Depreciation and amortization 5,367 - 5,367 1,831 - 1,831
Interest expense   93   -     93   27     -     27
 
Total expenses   85,392   (2,382 )   83,010   64,443     -     64,443
 
Income before income taxes 23,676 2,382 26,058 26,088 - 26,088
Income tax provision   8,136   796  

(3)
  8,932   (1,449 )   11,127  

(3)
  9,678
Net income 15,540 1,586 17,126 27,537 (11,127 ) 16,410
Net income attributable to non-controlling interest   12,142   (12,142 )

(4)
  -   27,537     (27,537 )

(4)
  -
Net income attributable to FXCM Inc. $ 3,398 $ 13,728   $ 17,126 $ -   $ 16,410   $ 16,410
 
 
Pro Forma fully exchanged, fully diluted shares outstanding   74,449

(5)
  75,300

(5)
 
Adjusted Pro Forma net income per fully exchanged, fully diluted shares outstanding $ 0.23 $ 0.22
 
(1) Represents the elimination of equity-based compensation.
 
(2) Represents an adjustment to reflect a reserve established relating to a settlement with the NFA and CFTC regarding trade execution activities. Pursuant to an agreement with a subsidiary of FXCM Holdings, certain founding members of FXCM Holdings agreed to reimburse the cost of these matters up to $16.0 million plus additional amounts as approved by such founding members. $16.0 million and $0.3 million were recorded in July 2011 and August 2011, respectively. Consequently, there was no impact to FXCM Inc.'s net income for the three and nine months ended September 30, 2011 as the entire expense was allocated to such founding members. $16.3 million of additional capital was provided by the respective founding members.
 
(3) Represents an adjustment to reflect the assumed effective corporate tax rate of approximately 34.3% and 37.1% for the three months ended September 30, 2011 and 2010, respectively, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. The adjustment assumes full exchange of existing unitholders FXCM Holdings, LLC units for shares of Class A common stock of the Company.
 
(4) Represents the elimination of the non-controlling interest associated with the ownership by existing unitholders of FXCM Holdings, LLC (excluding FXCM, Inc.), as if the unitholders had fully exchanged their FXCM Holdings, LLC units for shares of Class A common stock of the Company.
 
(5) Fully diluted shares assuming all unitholders had fully exchanged their FXCM Holdings, LLC units for shares of Class A common stock of the Company.
 

A-4
 

 
                   

FXCM Inc.Adjusted Pro Forma Consolidated Statements of Operations(In thousands, except per share amounts)(Unaudited )
   
Nine Months Ended September 30,
2011 2010
AsReported Adjustments AdjustedPro Forma AsReported Adjustments AdjustedPro Forma
Revenues
 
Retail trading revenues $ 268,234 - $ 268,234 $ 234,608 - $ 234,608
Institutional trading revenues 21,820 - 21,820 20,779 - 20,779
Interest income 2,837 - 2,837 1,493 - 1,493
Other income   14,228   -     14,228   7,273   -     7,273
 
Total revenues   307,119   -     307,119   264,153   -     264,153
 
Expenses
 
Referring broker fees 72,253 - 72,253 61,680 - 61,680
Compensation and benefits 68,662 (6,520 )

(1)
62,142 52,325 - 52,325
Advertising and marketing 24,375 - 24,375 16,916 - 16,916
Communication and technology 23,559 - 23,559 19,171 - 19,171
General and administrative 55,356 (16,262 )

(2)
39,094 25,792 - 25,792
Depreciation and amortization 14,201 - 14,201 5,292 - 5,292
Interest expense   226   -     226   78   -     78
 
Total expenses   258,632   (22,782 )   235,850   181,254   -     181,254
 
Income before income taxes 48,487 22,782 71,269 82,899 - 82,899
Income tax provision   10,756   14,064  

(3)
  24,820   3,517   27,150  

(3)
  30,667
Net income 37,731 8,718 46,449 79,382 (27,150 ) 52,232
Net income attributable to non-controlling interest   28,222   (28,222 )

(4)
  -   79,382   (79,382 )

(4)
  -
Net income attributable to FXCM Inc. $ 9,509 $ 36,940   $ 46,449 $ - $ 52,232   $ 52,232
 
 
Pro Forma fully exchanged, fully diluted shares outstanding   74,978

(5)
  75,300

(5)
 
Adjusted Pro Forma net income per fully exchanged, fully diluted shares outstanding $ 0.62 $ 0.69
(1) Represents the elimination of equity-based compensation.
 
(2) Represents an adjustment to reflect a reserve established relating to a settlement with the NFA and the CFTC regarding trade execution activities. Pursuant to an agreement with a subsidiary of FXCM Holdings, certain founding members of FXCM Holdings agreed to reimburse the cost of these matters, up to $16.0 million plus additional amounts as approved by such founding members. Consequently, there was no impact to FXCM Inc.'s net income for the three and nine months ended September 30, 2011 as the entire expense was allocated to such founding members. $16.3 million of additional capital was provided by the respective founding members.
 
(3) Represents an adjustment to reflect the assumed effective corporate tax rate of approximately 34.8% and 37.0% for the nine months ended September 30, 2011 and 2010, respectively, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. The adjustment assumes full exchange of existing unitholders FXCM Holdings, LLC units for shares of Class A common stock of the Company.
 
(4) Represents the elimination of the non-controlling interest associated with the ownership by existing unitholders of FXCM Holdings, LLC (excluding FXCM, Inc.), as if the unitholders had fully exchanged their FXCM Holdings, LLC units for shares of Class A common stock of the Company.
 
(5) Fully diluted shares assuming all unitholders had fully exchanged their FXCM Holdings, LLC units for shares of Class A common stock of the Company.
 

A-5
 
 
FXCM Inc.Reconciliation of EBITDA to Net Income(In thousands)(Unaudited )
                 

Three Months Ended September 30,

Nine Months Ended September 30,
Adjusted Pro Forma U.S. GAAP Adjusted Pro Forma U.S. GAAP

2011

2010

2011

2010

2011

2010

2011

2010
 
Net income attributable to FXCM Inc. $ 17,126 $ 16,410 $ 3,398 $ - $ 46,449 $ 52,232 $ 9,509 $ -
Net income attributable to noncontrolling interest - - 12,142 27,537 - - 28,222 79,382
Provision for income taxes 8,932 9,678 8,136 (1,449 ) 24,820 30,667 10,756 3,517
Depreciation and amortization   5,367   1,831   5,367   1,831     14,201   5,292   14,201   5,292
EBITDA $ 31,425 $ 27,919 $ 29,043 $ 27,919   $ 85,470 $ 88,191 $ 62,688 $ 88,191
 
 
 

A-6

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