FXCM Inc.

CIK:0001499912|SEC Filings

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues
Trading revenue	$ 42,785	$ 48,042	$ 136,664	$ 161,614
Interest income	567	547	1,456	1,193
Brokerage interest expense	(185)	(228)	(586)	(655)
Net interest revenue	382	319	870	538
Other income	804	1,954	1,682	4,533
Total net revenues	43,971	50,315	139,216	166,685
Operating Expenses
Compensation and benefits	16,023	19,236	43,620	58,248
Referring broker fees	5,443	8,718	18,710	26,547
Advertising and marketing	4,017	2,736	11,644	9,322
Communication and technology	5,494	6,524	17,027	19,967
Trading costs, prime brokerage and clearing fees	996	587	2,511	1,853
General and administrative	11,364	11,814	32,954	43,061
Depreciation and amortization	4,877	6,037	15,222	18,360
Goodwill impairment loss	0	0	23,917	0
Total operating expenses	48,214	55,652	165,605	177,358
Operating loss	(4,243)	(5,337)	(26,389)	(10,673)
Other (Income) Expense
(Gain) loss on derivative liabilities — Letter & Credit Agreements	(4,668)	26,985	(6,172)	(200,375)
Loss (income) on equity method investments, net	0	140	(170)	478
Interest on borrowings	12,045	19,473	37,521	61,228
(Loss) income from continuing operations before income taxes	(11,620)	(51,935)	(57,568)	127,996
Income tax provision (benefit)	359	(89)	1,120	35
(Loss) income from continuing operations	(11,979)	(51,846)	(58,688)	127,961
Income (loss) from discontinued operations, net of tax	42,364	(23,501)	13,613	(55,629)
Net income (loss)	30,385	(75,347)	(45,075)	72,332
Net income (loss) attributable to redeemable non-controlling interest in FXCM Group, LLC			1,817
Net income (loss) attributable to Global Brokerage, Inc.	14,319	(39,134)	(19,060)	71,002
(Loss) income from continuing operations attributable to Global Brokerage, Inc.	(13,561)	(34,507)	(42,340)	87,627
Income (loss) from discontinued operations attributable to Global Brokerage, Inc.	$ 27,880	$ (4,627)	$ 23,280	$ (16,625)
Weighted average shares of Class A common stock outstanding — Basic and Diluted (in shares)	6,143	5,603	6,143	5,603
Global Brokerage Holdings, LLC
Other (Income) Expense
Net income (loss) attributable to non-controlling interest	$ 4,920	$ (18,493)	$ (6,425)	$ 33,411
FXCM Holdings LLC
Other (Income) Expense
Net income (loss) attributable to redeemable non-controlling interest in FXCM Group, LLC	22,174	(6,877)	1,817	(6,877)
Other Non-Controlling Interest
Other (Income) Expense
Net income (loss) attributable to non-controlling interest	(11,028)	(10,843)	(21,407)	(25,204)
Common Stock - Class A
Other (Income) Expense
Net income (loss) attributable to Global Brokerage, Inc.	$ 14,319	$ (39,134)	$ (19,060)	$ 71,002
Net income (loss) per share attributable to stockholders of Class A common stock of FXCM Inc. — Basic and Diluted
Continuing operations (USD per share)	$ (2.21)	$ (6.15)	$ (6.89)	$ 15.64
Discontinued operations (USD per share)	4.54	(0.83)	3.79	(2.97)
Net income (loss) attributable to Global Brokerage, Inc. (USD per share)	$ 2.33	$ (6.98)	$ (3.10)	$ 12.67

Condensed Consolidated Statements of Cash Flows (Unaudited)
$ in Thousands

9 Months Ended

Sep. 30, 2017

USD ($)

Sep. 30, 2016

USD ($)

Cash Flows From Operating Activities

Net income (loss)

$ (45,075)

$ 72,332

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities

Depreciation and amortization

15,922

21,149

Equity-based compensation

883

1,504

Deferred tax benefit

(317)

(518)

Goodwill impairment loss

23,917

Loss on classification as held for sale assets

34,618

57,092

Gain on derivative liabilities — Letter & Credit Agreements

(6,172)

(200,375)

Amortization of deferred bond discount

4,723

4,443

Amortization of deferred financing cost

907

906

Amortization of original issue discount — Credit Agreement

6,919

23,905

Amortization of issuance fee, deferred financing fee and acquisition costs — Credit Agreement

1,960

6,088

(Income) loss from equity method investments, net

(770)

236

Gain on sale of equity method investment

(56,973)

(679)

Transaction costs associated with sale of equity method investment

(152)

Gain on asset disposition

(300)

Provision for debt forgiveness

8,249

Gain on sale of customer accounts

(5,338)

Transaction costs associated with sale of customer accounts

(216)

Changes in operating assets and liabilities:

Cash and cash equivalents, held for customers

330,091

(39,929)

Due from brokers

16,656

11,463

Accounts receivable, net

4,687

935

Tax receivable, net

(64)

1,507

Other assets

(1,004)

1,364

Customer account liabilities

(330,489)

40,332

Accounts payable and accrued expenses

(23,018)

12,531

Other liabilities — Current

(2,229)

Other liabilities — Non-current

1,201

(3,275)

Payments for tax receivable agreement

(188)

Due to brokers

432

19,365

Securities sold, not yet purchased

(3,624)

Foreign currency remeasurement loss

(3,339)

(1,240)

Net cash (used in) provided by operating activities

(28,665)

33,617

Cash Flows From Investing Activities

Purchases of office, communication and computer equipment

(8,766)

(14,521)

Purchase of intangible assets

(1,500)

Proceeds from sale of customer accounts

7,185

Proceeds from asset disposition

300

Proceeds from sale of equity method investment

50,598

Payment of earn-out from sale of equity method investment

(3,668)

Net cash provided by (used in) investing activities

44,149

(16,021)

Cash Flows From Financing Activities

Distributions to non-controlling members

(4,990)

(104)

Principal payments on borrowings under the Credit Agreement

(92,770)

(141)

Net cash used in financing activities

(97,760)

(245)

Effect of foreign currency exchange rate changes on cash and cash equivalents

5,296

1,481

Net (decrease) increase in cash and cash equivalents

(76,980)

18,832

Cash and cash equivalents

Beginning of year

210,292

^[1]

214,640

^[1]

End of period

133,312

^[1]

233,472

^[1]

Supplemental disclosures of cash flow activities

Cash paid for taxes

1,251

194

Cash paid for interest

20,509

27,254

Supplemental disclosure of non-cash financing activities

Non-cash distribution — non-controlling members

1,099

Exchange of Letter Agreement for Redeemable non-controlling interest

Discontinued Operations

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities

Depreciation and amortization

700

2,789

Equity-based compensation

131

426

Loss on classification as held for sale assets

34,618

57,092

(Income) loss from equity method investments, net

600

242

Gain on sale of equity method investment

(56,973)

679

Transaction costs associated with sale of equity method investment

(152)

Gain on asset disposition

(300)

Gain on sale of customer accounts

(5,338)

Transaction costs associated with sale of customer accounts

(216)

Cash Flows From Investing Activities

Purchases of office, communication and computer equipment

(212)

(149)

Second Amendment

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities

Amortization of deferred waiver fee

2,908

Third Amendment

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities

Amortization of deferred waiver fee

$ 967

$ 0

[1]	Includes Cash and cash equivalents from continuing and discontinued operations

Condensed Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 121,942	$ 200,914
Cash and cash equivalents, held for customers	331,447	428,542
Due from brokers	33	3,363
Accounts receivable, net	16,258	5,236
Tax receivable	263	199
Assets held for sale	40,649	330,497
Total current assets	510,592	968,751
Deferred tax asset	887	330
Office, communication and computer equipment, net	27,921	32,815
Goodwill	0	23,479
Other intangible assets, net	2,347	6,285
Other assets	14,232	7,364
Total assets	555,979	1,039,024
Current liabilities
Customer account liabilities	331,447	428,542
Accounts payable and accrued expenses	31,656	55,491
Due to brokers	1,948	1,471
Convertible notes	167,055	0
Credit Agreement — Related Party	64,329	0
Other liabilities	400	2,629
Liabilities held for sale	2,976	235,719
Total current liabilities	599,811	723,852
Deferred tax liability	448	215
Convertible notes	0	161,425
Credit Agreement — Related Party	0	150,516
Other liabilities	7,034	7,319
Total liabilities	607,293	1,043,327
Commitments and Contingencies (See Notes 16 & 21)
Redeemable non-controlling interest	49,454	46,364
Stockholders’ Deficit
Additional paid-in capital	390,261	389,917
Accumulated deficit	(479,967)	(460,907)
Accumulated other comprehensive loss	(1,330)	(2,312)
Total stockholders’ deficit, Global Brokerage, Inc.	(90,974)	(73,240)
Non-controlling interests	(9,794)	22,573
Total stockholders’ deficit	(100,768)	(50,667)
Total liabilities, redeemable non-controlling interest and stockholders’ deficit	555,979	1,039,024
Common Stock - Class A
Stockholders’ Deficit
Common stock	61	61
Common Stock - Class B
Stockholders’ Deficit
Common stock	$ 1	$ 1