FXCM Inc. (NYSE: FXCM), a leading online provider of foreign exchange, or FX, trading and related services, today announced for the quarter ended December 31, 2011, revenues under US GAAP of $108.8 million, compared to $96.1 million for the quarter ended December 31, 2010, an increase of 13%. Adjusted Pro Forma EBITDA for the fourth quarter 2011 was $26.4 million, compared to $32.3 million for the fourth quarter 2010, a decrease of 18%. Adjusted Pro Forma Net Income was $20.7 million for the fourth quarter 2011, compared to $18.1 million, an increase of 14%. Adjusted Pro Forma fully diluted earnings per share for the fourth quarter 2011 of $0.28 on a fully exchanged, fully diluted basis, compared to $0.24 per share for the fourth quarter 2010, an increase of 17%. U.S. GAAP net income for the fourth quarter 2011 was $3.2 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 year ended December 31, 2011, revenues under US GAAP increased 15% to $415.9 million, compared to $360.3 million for the corresponding period in 2010. Adjusted Pro Forma EBITDA for the year was $111.9 million, compared to $120.5 million, for the corresponding period in 2010, a decrease of 7%. Adjusted Pro Forma Net Income was $67.2 million, or $0.90 per share on a fully exchanged, fully diluted basis, compared to $69.6 million, or $0.92 per share, for the corresponding period in 2010, a decrease of 4%. U.S. GAAP net income for the year ended December 31, 2011 was $12.7 million, or $0.77 cents per fully diluted Class A share.

In addition, FXCM Inc. today announced certain key operating metrics for February 2012 for its retail and institutional foreign exchange business. Monthly activities included:

February 2012 Operating Metrics

Retail Trading Metrics
  • Retail customer trading volume(2) of $347 billion in February 2012, 17% higher than January 2012 and 39% higher than February 2011.
  • Average retail customer trading volume per day of $16.5 billion in February 2012, 22% higher than January 2012 and 32% higher than February 2011.
  • An average of 396,979 retail client trades per day in February 2012, 15% higher than January 2012 and 34% higher than February 2011.
  • Tradeable accounts(3) of 197,766 as of February 29, 2012, an increase of 1,056 or 1% from January 2012, and an increase of 57,146 or 41% from February 2011.

Institutional Trading Metrics
  • Institutional customer trading volume(2) of $127 billion in February 2012, 16% higher than January 2012 and 106% higher than February 2011.
  • Average institutional trading volume per day of $6.1 billion in February 2012, 22% higher than January 2012 and 96% higher than February 2011.
  • An average of 29,534 institutional client trades per day in February 2012, 38% higher than January 2012 and 403% higher than February 2011.

“2011 was a strong year for FXCM. We grew our active retail account base by 20% to 163,094 accounts, increased retail customer trading volume by 19% to a record $3.8 trillion, increased institutional customer trading volume by 56% to a record $1.2 trillion and closed two acquisitions in Japan, considerably increasing our position in that region, the world’s largest retail FX market,” said Drew Niv, Chief Executive Officer.

“We are also pleased with February’s metrics. February average daily volume of $16.5 billion in our retail business was the third highest in FXCM history - helped by our Japanese business and solid levels of client profitability in the month.”

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) On December 7, 2010, FXCM Inc. completed an IPO. Prior to the IPO, FXCM Inc. had not engaged in any business or other activities except in connection with its formation and the IPO. Net income and fully diluted earnings per share attributable to FXCM Inc. under US GAAP for the full year and fourth quarter 2010 are not presented for comparison as they reflect only the period from December 7, 2010 to December 31, 2010.

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

(3) A Tradeable Account is an account with sufficient funds to place a trade in accordance with FXCM trading policies.

Consolidated Adjusted Pro Forma and U.S. GAAP Results
      Adjusted Pro Forma (thousands except per share amounts)
Three Months Ended December 31,   Twelve Months Ended December 31,

2011
 

2010

% Change

2011

2010

% Change
 
Total Revenues $ 105,474 $ 96,127 10 % $ 412,593 $ 360,277 15 %
 
Referring broker fees 20,579 19,685 5 % 92,832 81,365 14 %
Compensation and benefits 23,681 17,026 39 % 85,817 69,349 24 %
Other expenses   34,823     27,145 28 %   122,077   89,101 37 %
 
EBITDA   26,391     32,271 -18 %   111,867   120,462 -7 %
 
Depreciation and amortization 5,852 4,014 46 % 20,053 9,306 115 %
 
Income before income taxes   20,539     28,257 -27 %   91,814   111,156 -17 %
 
Income tax provision (161 ) 10,117 -102 % 24,660 41,507 -41 %
 
Net Income   20,700     18,140 14 %   67,154   69,649 -4 %
 
Net income attributable to non-controlling interest - - - - - -
       
Net Income Attributable to FXCM Inc. $ 20,700   $ 18,140 14 % $ 67,154 $ 69,649 -4 %
 
Pro forma fully exchanged, fully diluted shares outstanding 73,272 75,300 -3 % 74,548 75,300 -1 %
 
Earnings Per Share $ 0.28   $ 0.24 17 % $ 0.90 $ 0.92 -2 %
 
 
Unaudited U.S. GAAP (thousands except per share amounts)
Three Months Ended December 31, Twelve Months Ended December 31,

2011

2010

% Change

2011

2010

% Change
 
Total Revenues $ 108,788 $ 96,127 13 % $ 415,907 $ 360,277 15 %
 
Referring broker fees 20,579 19,685 5 % 92,832 81,365 14 %
Compensation and benefits 26,424 23,872 11 % 95,086 76,195 25 %
Other expenses   34,823     27,145 28 %   138,339   89,101 55 %
 
EBITDA   26,962     25,425 6 %   89,650   113,616 -21 %
 
Depreciation and amortization 5,852 4,014 46 % 20,053 9,306 115 %
 
Income before income taxes   21,110     21,411 -1 %   69,597   104,310 -33 %
 
Income tax provision 61 632 -90 % 10,816 4,149 161 %
 
Net Income   21,049     20,779 1 %   58,781   100,161 -41 %
 
Net income attributable to non-controlling interest 17,822 20,633 -14 % 46,045 100,015 -54 %
       
Net Income Attributable to FXCM Inc. $ 3,227   $ 146 $ 12,736 $ -
 
 
Net Income (in thousands) $ 3,227   $ 12,736
 
Net Income per Class A Share
Basic and Diluted $ 0.21   $ 0.77
 
Average Class A shares outstanding   15,291     16,567
   

Selected Operating Metrics
 
(Unaudited)
Three Months Ended December 31,   Twelve Months Ended December 31,  
2011 2010 % Change     2011   2010 % Change  
 
Total retail trading volume ($ in billions) $ 972 $ 836 16 % $ 3,775 $ 3,178 19 %
 
Total institutional trading volume ($ in billions) $ 429 $ 190 126 % $ 1,171 $ 751 56 %
 
Total active accounts 163,094 136,427 20 % 163,094 136,427 20 %
 
Trading days in period 65 66 260 260
 
Daily average trades 423,413 317,658 33 % 381,030 315,210 21 %
 
Daily average trades per active account 2.7 2.3 17 % 2.5 2.5 0 %
 
Retail trading revenue per million traded $ 98 $ 100 -2 % $ 96 $ 100 -4 %
 
Total customer equity ($ in millions) $ 1,047.0 $ 641.2 63 % $ 1,047.0 $ 641.2 63 %

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 April 30, 2012 to Class A stockholders of record at the close of business on April 19, 2012.

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 800-291-5365 and 617-614-3922 for international participants. The conference ID number is 64410473.

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 Annual Report on Form 10-K and other SEC filings, which are accessible on the SEC website at sec.gov.

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 Contract for Difference (“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 YearEnded December 31, 2011 and 2010
    A-1

Unaudited U.S. GAAP Consolidated Statements of Financial Condition As ofDecember 31, 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 December 31, 2011 and 2010
    A-4

Unaudited Adjusted Pro Forma and U.S. GAAP Consolidated Statements ofOperations for the Year Ended December 31, 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 December 31, Year Ended December 31,
2011 2010 2011 2010
Revenues
 
Retail trading revenues $ 95,540 $ 83,865 $ 363,774 $ 318,472
Institutional trading revenues 7,088 7,054 28,908 27,833
Interest Income 807 880 3,644 2,373
Other Income   5,353   4,328   19,581   11,599
 
Total revenues   108,788   96,127   415,907   360,277
 
Expenses
 
Referring broker fees 20,579 19,685 92,832 81,365
Compensation and benefits 26,424 23,872 95,086 76,195
Advertising and marketing 10,522 6,873 34,897 23,788
Communication and technology 8,310 7,948 31,869 27,120
General and administrative 15,888 12,285 71,244 38,077
Depreciation and amortization 5,852 4,014 20,053 9,306
Interest expense   103   39   329   116
 
Total expenses   87,678   74,716   346,310   255,967
 
Income before income taxes 21,110 21,411 69,597 104,310
Income tax provision   61   632   10,816   4,149
Net income 21,049 20,779 58,781 100,161

Net income attributable to non-controllinginterest
  17,822   20,633   46,045   100,015
Net income attributable to FXCM, Inc. $ 3,227 $ 146 $ 12,736 $ 146
 
 
 
Net Income (in thousands) $ 3,227 $ 146 $ 12,736
 
Net Income per Class A Share
Basic and Diluted $ 0.21 $ 0.01 $ 0.77
 
Average Class A shares outstanding   15,291   17,319   16,567

A-1
FXCM Inc.  
Consolidated Statements of Financial Condition
As of December 30, 2011 and December 31, 2010
(Amounts in thousands, except share data)
(Unaudited)
December 31, December 31,
  2011 2010
 
Assets
 
Current assets
Cash and cash equivalents $ 184,721 $ 193,330
Cash and cash equivalents, held for customers 1,046,983 641,152
Due from brokers 1,311 125
Accounts receivable, net 17,004 18,324
Deferred tax asset 6,982 7,625
Tax receivable   2,016   1,643
Total current assets 1,259,017 862,199
 
Deferred tax asset 88,556 90,107
Office, communication and computer equipment, net 39,686 18,709
Intangible assets and goodwill, net 80,656 64,409
Other assets   19,218   12,369
Total assets $ 1,487,133 $ 1,047,793
 
Liabilities and Equity
 
Current liabilities
Customer account liabilities $ 1,046,983 $ 641,152
Accounts payable and accrued expenses 56,723 37,470
Due to brokers 13,495 13,314
Deferred tax liability - current 2,241 1,844
Due to related parties - pursuant to tax receivable agreement 3,575 3,817
Deferred revenue   -   6,000
Total current liabilities   1,123,017   703,597
 
Deferred tax liability 7,044 5,770
Due to related parties - pursuant to tax receivable agreement   63,639   70,419
Total liabilities   1,193,700   779,786
 
Commitments and Contingencies
 
Stockholders' equity
Class A common stock, par value $0.01 per share;
3,000,000,000 shares authorized, 14,899,391 and 17,319,000 shares issued
and outstanding as of December 31, 2011, and December 31, 2010, respectively 149 173
Class B common stock, par value $0.01 per share;
1,000,000 shares authorized, 100 shares issued
and outstanding as of December 31, 2011, and December 31, 2010, respectively 1 1
Additional paid-in-capital 86,152 101,848
Retained earnings 8,977 146
Accumulated other comprehensive income   142   52
Total stockholders' equity, FXCM Inc. 95,421 102,220
Non-controlling interest   198,012   165,787
Total stockholders' equity   293,433   268,007
Total liabilities and stockholders' equity $ 1,487,133 $ 1,047,793
 
See accompanying notes to the consolidated financial statements.

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 and the deferred tax assets related to tax benefits for equity-based compensation awards are realized when the stock options are exercised. 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 twelve months ended December 31, 2011, the Company incurred costs 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 and additional capital in this amount was provided by the respective founding members. Consequently there was no impact to FXCM Inc.'s net income for the three months and year ended December 31, 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 share and per share data)
(Unaudited )
Three Months Ended December 31,
2011 2010
As Adjusted As

Adjusted
Reported Adjustments Pro Forma

Reported

Adjustments

Pro Forma
Revenues
 
Retail trading revenues $ 95,540 - $ 95,540 $ 83,865 - $ 83,865
Institutional trading revenues 7,088 - 7,088 7,054 - 7,054
Interest income 807 - 807 880 - 880

 
Other income   5,353   (3,314 )

(1)
  2,039     4,328   -     4,328
 
Total revenues   108,788   (3,314 )   105,474     96,127   -     96,127
 
Expenses
 
Referring broker fees 20,579 - 20,579 19,685 - 19,685
Compensation and benefits 26,424 (2,743 )

(2)
23,681 23,872 (6,846 )

(2)
17,026
Advertising and marketing 10,522 - 10,522 6,873 - 6,873
Communication and technology 8,310 - 8,310 7,948 - 7,948
General and administrative 15,888 - 15,888 12,285 - 12,285
Depreciation and amortization 5,852 - 5,852 4,014 - 4,014
Interest expense   103   -     103     39   -     39
 
Total expenses   87,678   (2,743 )   84,935     74,716   (6,846 )   67,870
 
Income before income taxes 21,110 (571 ) 20,539 21,411 6,846 28,257
Income tax provision   61   (222 )

(3)
 

(161
)   632   9,485  

(3)
  10,117
Net income 21,049 (349 ) 20,700 20,779 (2,639 ) 18,140

Net income attributable to non-controllinginterest
  17,822   (17,822 )

(4)
  -     20,633   (20,633 )

(4)

 
Net income attributable to FXCM Inc. $ 3,227 $ 17,473   $ 20,700   $ 146 $ 17,994   $ 18,140
 
 
Pro Forma fully exchanged, fully diluted shares outstanding   73,272  

(5)
  75,300

(5)
 

Adjusted Pro Forma net income per fully exchanged, fully diluted sharesoutstanding
$ 0.28   $ 0.24

 
 

(1) Represents the elimination of an amount related to the remeasurement of due to members pursuant to our tax receivable agreement. This non-recurring income is attributable to the change in our U.S. federal tax rate.
 
(2) Represents the elimination of equity-based compensation associated with the IPO.
 

(3) Represents an adjustment to reflect the assumed effective corporate tax rate of approximately 34.6% and 35.8% for the three months ended December31, 2011 and 2010, respectively, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to eachstate, local and/or foreign jurisdiction. The adjustment assumes full exchange of existing unitholders FXCM Holdings, LLC units for shares of Class Acommon stock of the Company.
 

(4) Represents the elimination of the non-controlling interest associated with the ownership by existing unitholders of FXCM Holdings, LLC (excludingFXCM, 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 theCompany.

 

 

 

A-4
FXCM Inc.          
Adjusted Pro Forma Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited )
Year Ended December 31,
2011 2010
As

 

Adjusted

 

As

 

Adjusted
Reported Adjustments

 

Pro Forma

 

Reported

Adjustments

 

Pro Forma
Revenues
 
Retail trading revenues $ 363,774 - $ 363,774 $ 318,472 - $ 318,472
Institutional trading revenues 28,908 - 28,908 27,833 - 27,833
Interest income 3,644 - 3,644 2,373 - 2,373
Other income   19,581   (3,314 )

(1)
  16,267   11,599   -     11,599
 
Total revenues   415,907   (3,314 )   412,593   360,277   -     360,277
 
Expenses
 
Referring broker fees 92,832 - 92,832 81,365 - 81,365
Compensation and benefits 95,086 (9,269 )

(2)
85,817 76,195 (6,846 )

(2)
69,349
Advertising and marketing 34,897 - 34,897 23,788 - 23,788
Communication and technology 31,869 - 31,869 27,120 - 27,120
General and administrative 71,244 (16,262 )

(3)
54,982 38,077 - 38,077
Depreciation and amortization 20,053 - 20,053 9,306 - 9,306
Interest expense   329   -     329   116   -     116
 
Total expenses   346,310   (25,531 )   320,779   255,967   (6,846 )   249,121
 
Income before income taxes 69,597 22,217 91,814 104,310 6,846 111,156
Income tax provision   10,816   13,844  

(4)
  24,660   4,149   37,358  

(4)
  41,507
Net income 58,781 8,373 67,154 100,161 (30,512 ) 69,649

Net income attributable to non-controllinginterest
  46,045   (46,045 )

(5)
  -   100,015   (100,015 )

(5)
  -
Net income attributable to FXCM Inc. $ 12,736 $ 54,418   $ 67,154 $ 146 $ 69,503   $ 69,649
 
 
Pro Forma fully exchanged, fully diluted shares outstanding   74,548

(6)
  75,300

(6)
 

Adjusted Pro Forma net income per fully exchanged, fully diluted sharesoutstanding
$ 0.90 $ 0.92
 
 

(1) Represents the elimination of an amount related to the remeasurement of due to members pursuant to our tax receivable agreement. This non-recurringincome is attributable to the change in our U.S. federal tax rate.
 

(2) Represents the elimination of equity-based compensation associated with the IPO and onetime charges in 2010 relating to certain arrangements with aformer employee and our CFO as a result of the IPO.
 

(3) Represents an adjustment to reflect costs relating to settlements with the NFA and the CFTC regarding trade execution activities. Pursuant to an agreementwith a subsidiary of FXCM Holdings, certain founding members of FXCM Holdings agreed to reimburse the cost of these matters, up to $16.3 million.Consequently, there was no impact to FXCM Inc.'s net income for year ended December 31, 2011 as the entire expense was allocated to such foundingmembers. $16.3 million of additional capital was provided by the respective founding members.
 

(4) Represents an adjustment to reflect the assumed effective corporate tax rate of approximately 26.8% and 37.3% for the years ended December 31, 2011 and2010, respectively, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/orforeign jurisdiction. The adjustment assumes full exchange of existing unitholders FXCM Holdings, LLC units for shares of Class A common stock of theCompany.
 

(5) 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.
 
(6) 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 December 31, Twelve Months Ended December 31,2011

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. $ 20,700 $ 18,140 $ 3,227 $ 146 $ 67,154 $ 69,649 $ 12,736 $ 146

Net income attributable to noncontrollinginterest
- - 17,822 20,633 - - 46,045 100,015
Provision for income taxes (161 ) 10,117 61 632 24,660 41,507 10,816 4,149
Depreciation and amortization   5,852     4,014   5,852   4,014   20,053   9,306   20,053   9,306
EBITDA $ 26,391   $ 32,271 $ 26,962 $ 25,425 $ 111,867 $ 120,462 $ 89,650 $ 113,616

A-6

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