Fourth Quarter 2016 Highlights & Updates:

  • U.S. GAAP net revenues from continuing operations of $80.6 million
  • U.S. GAAP net income attributable to Global Brokerage, Inc. from continuing operations of $10.7 million or $1.91 per diluted share, including a $6.4 million gain on derivative liability
  • U.S. GAAP net revenues from discontinued operations of $8.7 million
  • U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations of $11.1 million or $1.97 per diluted share
  • Adjusted EBITDA from continuing and discontinued operations of $30.8 million
  • Strong combined operating cash position of $226.2 million at December 31, 2016
  • In March 2017, repaid $30.0 million on the Leucadia Credit Agreement leaving $128.0 million outstanding

Global Brokerage, Inc. (NASDAQ:GLBR), today announced for the quarter ended December 31, 2016, U.S. GAAP trading revenue from continuing operations of $79.5 million, compared to $65.4 million for the quarter ended December 31, 2015. U.S. GAAP net income attributable to Global Brokerage, Inc. from continuing operations was $10.7 million (including a $6.4 million gain on derivative liabilities) for the quarter ended December 31, 2016, or $1.91 per diluted share, compared to U.S. GAAP net loss attributable to Global Brokerage, Inc. from continuing operations of $85.7 million (including a $99.9 million loss on derivative liabilities), or $15.75 per diluted share, for the quarter ended December 31, 2015.

For the twelve months ended December 31, 2016, U.S. GAAP trading revenue from continuing operations was $276.0 million, compared to $250.0 million for the twelve months ended December 31, 2015.  U.S. GAAP net income attributable to Global Brokerage, Inc. from continuing operations was $96.7 million for the twelve months ended December 31, 2016 or $17.24 per diluted share (including a $206.8 million net gain on derivative liabilities), compared to U.S. GAAP net loss attributable to Global Brokerage, Inc. from continuing operations of $513.6 million (including a $354.7 million loss on derivative liabilities), or $100.96 per diluted share, for the twelve months ended December 31, 2015.

The net gain/loss on derivative liabilities consists of non-cash changes in the value of embedded derivatives associated with the Leucadia Letter and Credit Agreements (as described further below).  The Letter Agreement is a component of the financing package provided by Leucadia National Corp. (“Leucadia”). On January 15, 2015, FXCM Group, LLC (“FXCM Group”) customers suffered negative equity balances due to the unprecedented move in the Swiss Franc after the Swiss National Bank (“SNB”) discontinued its peg of the Swiss Franc to the Euro.  On January 16, 2015, FXCM Group entered into a financing agreement with Leucadia that permitted FXCM Group’s regulated subsidiaries to meet their regulatory capital requirements and continue normal operations after significant losses were incurred resulting from the events of January 15, 2015. 

On September 1, 2016 we completed the restructuring of the financing arrangements with Leucadia (the “Leucadia Restructuring Transaction”). We amended the terms of the Amended and Restated Credit Agreement (the “Credit Agreement”) and replaced the Amended and Restated Letter Agreement (the “Letter Agreement”) with a new Limited Liability Company Agreement.

U.S. GAAP trading revenue from discontinued operations for the quarter ended December 31, 2016 was $8.5 million, compared to $11.3 million for the quarter ended December 31, 2015.  U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations was $11.1 million for the quarter ended December 31, 2016, or $1.97 per diluted share, compared to U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations of $19.3 million, or $3.54 per diluted share, for the quarter ended December 31, 2015.

U.S. GAAP trading revenue from discontinued operations for the twelve months ended December 31, 2016 was $31.1 million, compared to $71.5 million for the twelve months ended December 31, 2015.  U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations was $26.0 million for the twelve months ended December 31, 2016, or $4.64 per diluted share, compared to U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations of $40.3 million, or $7.93 per diluted share, for the twelve months ended December 31, 2015.

Adjusted EBITDA from continuing and discontinued operations for the quarter ended December 31, 2016 was $30.8 million, compared to $12.6 million for the quarter ended December 31, 2015.

Adjusted EBITDA from continuing and discontinued operations for the twelve months ended December 31, 2016 was $58.4 million, compared to $38.2 million for the twelve months ended December 31, 2015.

Adjusted EBITDA is a Non-GAAP financial measure. This measure does not represent and should not be considered as a substitute for net income, net income attributable to Global Brokerage, Inc. or net income per Class A share or as a substitute for cash flow from operating activities, each as determined in accordance with U.S. GAAP, and our calculations of these measures may not be comparable to similarly entitled measures reported by other companies. See “Non-GAAP Financial Measures” beginning on A-3 of this release for additional information regarding these Non-GAAP financial measures and for reconciliations of such measures to the most directly comparable measures calculated in accordance with U.S. GAAP.

Selected Customer Trading Metrics from Continuing Operations
   
      Three Months
Ended December 31,
Twelve Months
Ended December 31,
      2016 2016
     
Total Customer Trading Volume (in Billions US$ Equivalent) – Ex FXCM US LLC $ 798 $ 3,346
Total Customer Trading Volume (in Billions US$ Equivalent) – FXCM US LLC $ 172 $ 722
Total Customer Trading Volume (in Billions US$ Equivalent) $    970 $    4,068
Retail Active Accounts – Ex FXCM US LLC 132,456 132,456
Retail Active Accounts – FXCM US LLC 46,326 46,326
Retail Active Accounts    178,782   178,782
Trading days in period 64 259
Daily Average Trades – Customers – Ex FXCM US LLC 481,713 506,238
Daily Average Trades – Customers – FXCM US LLC 100,680 109,737
Daily Average Trades – Customers   582,394   615,976
Daily average trades per active account – Ex FXCM US LLC 3.6 3.8
Daily average trades per active account – FXCM US LLC 2.2 2.4
Daily average trades per active account   3.3   3.4
Trading revenue per million traded $ 82 $ 68
Total customer equity ($ in millions) $ 662 $ 662

More information, including historical results for each of the above metrics, can be found on the investor relations page of Global Brokerage, Inc.’s website ir.globalbrokerage.info.

This operating data is preliminary and subject to revision and should not be taken as an indication of the financial performance of Global Brokerage, Inc. Global Brokerage, Inc. 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 ir.globalbrokerage.info.

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