BGC PARTNERS : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

February 29, 2020 at 12:15 am EST

The following discussion of BGC Partners' financial condition and results of
operations should be read together with BGC Partners' consolidated financial
statements and notes to those statements, as well as the cautionary statements
relating to forward-looking statements within the meaning of Section 27A of the
Securities Act, and Section 21E of the Exchange Act, included in this report.

This discussion summarizes the significant factors affecting our results of
operations and financial condition as of and during the years ended December 31,
2019, 2018, and 2017. This discussion is provided to increase the understanding
of, and should be read in conjunction with, our consolidated financial
statements and the notes thereto included elsewhere in this report.

OVERVIEW AND BUSINESS ENVIRONMENT

We are a leading global brokerage and financial technology company servicing the global financial markets.



Through brands including BGC®, GFI®, Sunrise™, Besso™, Ed Broking®, Poten &
Partners™ and RP Martin™, among others, our businesses specialize in the
brokerage of a broad range of products, including fixed income such as
government bonds, corporate bonds, and other debt instruments, as well as
related interest rate derivatives and credit derivatives. We also broker
products across FX, equities, energy and commodities, insurance, and futures.
Our businesses also provide a wide variety of services, including trade
execution, brokerage services, clearing, trade compression, post-trade,
information, and other back-office services to a broad assortment of financial
and non-financial institutions. Our integrated platform is designed to provide
flexibility to customers with regard to price discovery, execution and
processing of transactions, and enables them to use Voice, Hybrid, or in many
markets, Fully Electronic brokerage services in connection with transactions
executed either OTC or through an exchange. Through our Fenics® group of
electronic brands, we offer a number of market infrastructure and connectivity
services, Fully Electronic marketplaces, and the Fully Electronic brokerage of
certain products that also may trade via Voice and Hybrid execution. The full
suite of Fenics® offerings include market data and related information services,
Fully Electronic brokerage, compression and other post-trade services, analytics
related to financial instruments and markets, and other financial technology
solutions. Fenics® brands operate under the names Fenics®, BGC Trader™,
CreditMatch®, Fenics MD™, BGC Market Data™, kACE2®, EMBonds®, Capitalab®,
Swaptioniser®, CBID® and Lucera®.

We previously offered real estate services through our publicly traded subsidiary, Newmark (NASDAQ: NMRK). On November 30, 2018, we completed the Spin-Off of Newmark (see "Newmark IPO, Separation Transaction and Spin-Off" for more information).



BGC, BGC Partners, BGC Trader, GFI, GFI Ginga, CreditMatch, Fenics, Fenics.com,
Sunrise Brokers, Besso, Ed Broking, Poten & Partners, RP Martin, kACE2, EMBonds,
Capitalab, Swaptioniser, CBID and Lucera are trademarks/service marks, and/or
registered trademarks/service marks of BGC Partners, Inc. and/or its affiliates.

Our customers include many of the world's largest banks, broker-dealers,
investment banks, trading firms, hedge funds, governments, corporations, and
investment firms. We have dozens of offices globally in major markets including
New York and London, as well as in Bahrain, Beijing, Bermuda, Bogotá, Brisbane,
Buenos Aires, Chicago, Copenhagen, Dubai, Dublin, Frankfurt, Geneva, Hong Kong,
Houston, Istanbul, Johannesburg, Madrid, Melbourne, Mexico City, Moscow, Nyon,
Paris, Rio de Janeiro, Santiago, São Paulo, Seoul, Shanghai, Singapore, Sydney,
Tel Aviv, Tokyo and Toronto.

As of December 31, 2019, we had over 2,900 brokers, salespeople, managers and other front-office personnel across our businesses.

Newmark IPO, Separation and Spin-Off



On December 13, 2017, prior to the Newmark IPO, pursuant to the Separation and
Distribution Agreement, we transferred substantially all of the assets and
liabilities relating to our Real Estate Services business to Newmark. In
connection with the Separation, Newmark assumed certain indebtedness and made a
proportional distribution of interests in Newmark Holdings to holders of
interests in BGC Holdings.

In December 2017, Newmark completed its IPO of an aggregate of 23 million shares of Newmark Class A common stock. Prior to the Newmark IPO, Newmark was our wholly owned subsidiary.



On November 30, 2018, we completed the Spin-Off of the shares of Newmark Class A
and Class B common stock held by us to our stockholders as of the close of
business on the Record Date through a special pro-rata stock dividend pursuant
to which shares of Newmark Class A common stock held by BGC were distributed to
holders of BGC Class A common stock and shares of Newmark Class B common stock
held by BGC were distributed to holders of BGC Class B common stock (which
holders of BGC Class B common stock were Cantor and another entity controlled by
our CEO, Howard W. Lutnick). Following the Spin-Off, BGC no longer holds any
shares of Newmark.

For more information about these transactions, see Note 1-"Organization and Basis of Presentation" to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.


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GFI Merger



On January 12, 2016, we completed our acquisition of GFI, a leading intermediary
and provider of trading technologies and support services to the global OTC and
listed markets, via the GFI Merger. GFI serves institutional clients in
operating electronic and hybrid markets for cash and derivative products across
multiple asset classes.

Nasdaq Transaction

On June 28, 2013, we completed the sale of certain assets to Nasdaq, which
purchased certain assets and assumed certain liabilities from us and our
affiliates, including the eSpeed brand name and various assets comprising the
Fully Electronic portion of our benchmark on-the-run U.S. Treasury brokerage,
market data and co-location service businesses, for cash consideration of $750
million paid at closing, plus an earn-out of up to 14,883,705 shares of Nasdaq
common stock to be paid ratably in each of the fifteen years following the
closing in which the consolidated gross revenue of Nasdaq is equal to or greater
than $25 million. During the third quarter of 2017, the Company transferred the
right to receive earn-out payments from Nasdaq to Newmark. Following the
Spin-Off, the right to receive earn-out payments from Nasdaq remains with
Newmark.

As a result of the sale of eSpeed, we only sold our on-the-run benchmark 2-, 3-,
5-, 7-, 10-, and 30-year Fully Electronic trading platform for U.S. Treasury
Notes and Bonds. We continue to offer Voice brokerage for on-the-run U.S.
Treasuries, as well as across various other products in rates, credit, FX,
market data and software solutions. As we continue to focus our efforts on
converting Voice and Hybrid desks to Fully Electronic execution, our
e-businesses and revenues from inter-company data, software, and post-trade
services, have continued to grow their revenues.

Going forward, we expect these businesses to become an even more valuable part of BGC as they continue to grow.

Fully Electronic (Fenics) and Hybrid Execution



For the purposes of this document and subsequent SEC filings, all of our Fully
Electronic businesses are referred to as Fenics. The Fenics business includes
our group of electronic brands offering a number of market infrastructure and
connectivity services, Fully Electronic marketplaces, and the Fully Electronic
brokerage of certain products that also may trade via Voice and Hybrid
execution. The full suite of Fenics offerings include market data and related
information services, Fully Electronic brokerage, compression and other
post-trade services, analytics related to financial instruments and markets, and
other financial technology solutions.

Historically, our technology-based product growth has led to higher margins and
greater profits over time for exchanges and wholesale financial intermediaries
alike, even if overall Company revenues remain consistent. This is largely
because automated and electronic trading efficiency allows the same number of
employees to manage a greater volume of trades as the marginal cost of
incremental trading activity falls. Over time, the conversion of exchange-traded
and OTC markets to Fully Electronic trading has also led, on average, to volumes
increasing by enough to offset commission declines, and thus often to similar or
higher overall revenues. We have been a pioneer in creating and encouraging
Hybrid and Fully Electronic execution, and we continually work with our
customers to expand such trading across more asset classes and geographies.

Outside of U.S. Treasuries and spot FX, the banks and financial firms that
dominate the OTC markets had, until recent years, generally been hesitant in
adopting electronically traded products. However, the banks, broker-dealers, and
other professional trading firms are now much more active in Hybrid and Fully
Electronically traded markets across various OTC products, including credit
derivative indices, FX derivatives, non-U.S. sovereign bonds, corporate bonds,
and interest rate derivatives. These electronic markets have grown as a
percentage of overall industry volumes for the past few years as firms like BGC
have invested in the kinds of technology favored by our customers. Regulation in
Asia, Europe and the U.S. regarding banking, capital markets, and OTC
derivatives has accelerated the adoption of Fully Electronic execution, and we
expect this to continue. We also believe that new clients, beyond our large bank
customer base, will primarily transact electronically across our Fenics
platform.

The combination of more market acceptance of Hybrid and Fully Electronic
execution and our competitive advantage in terms of technology and experience
has contributed to our strong gains in electronically traded products. We
continue to invest in Hybrid and Fully Electronic technology broadly across our
product categories, not only launching existing product pools but also launching
new platforms with market leading protocols and functionality, which we believe
will be game changing in the sector. Fenics has exhibited strong growth over the
past several years, and we believe that this growth has outpaced the wholesale
brokerage industry as a whole. We expect this trend to accelerate as we convert
more of our Voice and Hybrid brokerage into Fully Electronic brokerage across
our Fenics platform.

We expect to benefit from the secular trend towards electronic trading,
increased demand for market data, and the need for increased automation and
post-trade services. We continue to onboard new customers as the opportunities
created by electronic and algorithmic trading continue to transform our
industry. We continue to roll out our next-gen Fenics brokerage platforms across
more products and geographies with the goal of seamlessly integrating Voice
liquidity with customer electronic orders either by a graphical user interface
or application programming interface, and we expect to have continued success
converting Voice/Hybrid desks over time as we roll out these platforms across
more products and geographies.

We have continued to invest in our new Fenics stand-alone Fully Electronic offerings, which currently include:

• Fenics GO, our new electronic trading platform, which provides live,

real-time and tradeable two-way electronic liquidity for exchange-listed

futures and options, such as Eurex EURO STOXX 50 Index Options, NIKKEI

225, and related Delta One strategies. Fenics GO recently added Citadel


        Securities, who joined IMC, Maven Securities, and Optiver as electronic
        liquidity providers;


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• Fenics UST, which generated volume growth of approximately 230%

year-on-year in December 2019. This compares with a decline of 18% for

overall primary dealer U.S. Treasury volumes. Primary dealer volumes are

based on data from the Securities Industry and Financial Markets

Association. Over the same timeframe, Fenics UST increased its market

share of CLOB trading from approximately 2% to nearly 10% and is now the

second largest CLOB platform for U.S. Treasuries. CLOB market share is

based on data from Greenwich Associates for the U.S. Treasury volumes of

Fenics UST, CME BrokerTec, Nasdaq Fixed Income, and Dealerweb. Including

these CLOB platforms as well as the volumes of platforms using other fully

electronic U.S. Treasury trading protocols, Fenics UST increased its


        market share from 1.3% to 5.4% year-on-year in December 2019, per
        Greenwich Associates.

• Our expanded Fenics FX platforms, including MidFX, Spot, FX Options, and

non-deliverable and FX forwards;

• Lucera, which is our software-defined network, offering the trading


        community direct connectivity to each other; and


    •   Capitalab's Nikkei 225 options compression service, which is in
        partnership with the Singapore Exchange.


Collectively, our newer Fenics offerings, such as the five listed above, are not
yet fully up to scale, and are not yet generating significant revenues. The net
loss relating to investment in these new products and services was more than $55
million and $30 million for the years ended December 31, 2019 and 2018,
respectively. Looking ahead, we expect the net loss relating to these
investments in Fenics offerings to improve by $15 million in 2020 and for the
net loss to be approximately $40 million, and for these newer businesses to
break even during 2021. Over time, we expect these new products and services to
become profitable, high-margin businesses as their scale and revenues increase,
all else equal. We believe that our newer Fenics offerings have created
significant shareholder value.

As we continue to focus our efforts on converting Voice and Hybrid desks to
Fully Electronic execution, net revenues in our higher margin Fully Electronic
businesses across brokerage, data, software, and post-trade increased 12.2% to
$73.2 million for the year ended December 31, 2019. Going forward, we expect
Fenics to become an even more valuable part of BGC as it continues to grow. We
continue to analyze how to optimally configure our Voice/Hybrid and Fully
Electronic businesses.

Possible Restructuring



Before our first quarter 2020 earnings call, we expect to submit a proposal to
the Board and relevant committees with respect to converting our partnership
into a corporation. Our current target is to be positioned to begin executing a
conversion around the end of the third quarter of 2020, and expect to complete
the execution around year end 2020. Any such restructuring would be subject to
tax, accounting, regulatory, and other considerations and approvals.

Impact of ASC 606 on Results



From 2014 through 2016, the FASB issued several accounting standard updates,
which together comprise ASC Topic 606, Revenue from Contracts with Customers.
Beginning in the first quarter of 2018, the Company began recording its
financial results to conform to ASC 606. ASC 606 does not currently materially
impact the results of BGC. The consolidated Company has elected to adopt the
guidance using the modified retrospective approach to ASC 606, under which the
consolidated Company applied the new standard only to new contracts initiated on
or after January 1, 2018 and recorded the transition adjustments as part of
"Total equity".

Financial Services Industry



The financial services industry has grown historically due to several factors.
One factor was the increasing use of derivatives to manage risk or to take
advantage of the anticipated direction of a market by allowing users to protect
gains and/or guard against losses in the price of underlying assets without
having to buy or sell the underlying assets. Derivatives are often used to
mitigate the risks associated with interest rates, equity ownership, changes in
the value of FX, credit defaults by corporate and sovereign debtors and changes
in the prices of commodity products. Over this same timeframe, demand from
financial institutions, financial services intermediaries and large corporations
have increased volumes in the wholesale derivatives market, thereby increasing
the business opportunity for financial intermediaries.

Another key factor in the historical growth of the financial services industry
has been the increase in the number of new financial products. As market
participants and their customers strive to mitigate risk, new types of equity
and fixed income securities, futures, options and other financial instruments
have been developed. Most of these new securities and derivatives were not
immediately ready for more liquid and standardized electronic markets, and
generally increased the need for trading and required broker-assisted execution.

Due largely to the impacts of the global financial crises of 2008-2009, our
businesses had faced more challenging market conditions from 2009 until the
second half of 2016. Accommodative monetary policies were enacted by several
major central banks, including the Federal Reserve, Bank of England, Bank of
Japan and the European Central Bank, in response to the global financial crises.
These policies have resulted in historically low levels of volatility and
interest rates across many of the financial markets in which we operate. The
global credit markets also faced structural issues, such as increased bank
capital requirements under Basel III. Consequently, these factors contributed to
lower trading volumes in our rates and credit asset classes across most
geographies in which we operated.

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Since mid-2016, the overall financial services industry has benefited from
sustained economic growth, a lower unemployment rate, higher consumer spending,
the modification or repeal of certain U.S. regulations, and higher investment
income. In addition, the secular trend towards digitalization and
electronification within the industry has contributed to higher overall volumes
and transaction count in Fully Electronic execution. Looking ahead, concerns
about the future trade relationship between the U.K. and the EU after Brexit, a
slowdown in global growth driven by the outbreak of coronavirus in China, and an
increase in trade protectionism are tempered by expectations of monetary and
fiscal stimulus.

Brexit

On June 23, 2016, the U.K. held a referendum regarding continued membership in
the EU. The exit from the EU is commonly referred to as Brexit. The Brexit vote
passed by 51.9% to 48.1%. The U.K. subsequently formally left the EU on January
31, 2020, but its relationship with the bloc will remain in a transition period
until December 31, 2020. During this period, the U.K. will, with some
exceptions, remain subject to EU law. It will also maintain access to the EU's
single market. If both the U.K. and the EU agree, this transition period may be
extended once by up to two years, meaning it could remain in place until
December 31, 2022. Such an extension must, however, be agreed upon before July
1, 2020. The U.K. government has ruled out any extension to the transition
period and has legislated for a commitment not to agree to any extension. The
government would then only be able to reverse that provision through new
legislation.

The U.K. and EU are currently negotiating a trade deal which, once signed,
should determine the new bilateral trade relationship going forward. Given the
short time period involved, it is not certain that such trade deal will be
sufficiently comprehensive to encompass financial services. In case no new trade
deal (or one incorporating financial services) is in place by the end of the
transition period, absent mitigating legislative measures by individual EU
member states, the trade relationship between the U.K. and the EU would be
solely based on World Trade Organization terms. This could hinder current levels
of mutual market access. While other trade deals are being considered, for
example between the U.K. and the U.S., these may also prove challenging to
negotiate and are unlikely to replace or compensate for a reduction, if any, in
U.K. and EU trade at least in the short term. Further, the terms of a U.K. and
EU trade deal may adversely impact the negotiation and terms of such other deals
and vice versa.

Given the current uncertainty around the future trade relationship and/or the
length of the transition period, the consequences for the economies of the U.K.
and the EU member states as a result of the U.K.'s withdrawal from the EU are
unknown and unpredictable. Given the lack of comparable precedent, it is unclear
what the broader macro-economic and financial implications the U.K. leaving the
EU with no agreements in place would have.

This uncertainty could adversely impact investor confidence which could result
in additional market volatility. Historically, elevated volatility has often led
to increased volumes in the Financial Services markets in which we broker, which
could be beneficial for our businesses. At other times, increased volatility has
led to many market participants curtailing trading activity. Furthermore, any
future trade deal might lead to a fragmented regulatory environment, which could
increase the costs of our operations and loss of existing levels of cross-border
market access. While we have implemented plans to ensure continuity of service
in Europe and continue to have regulated entities and offices in place in many
of the major European markets in order to mitigate certain risks and
uncertainties created by political negotiations between the U.K. and EU, these
and other risks and uncertainties could have a material adverse effect on our
customers, counterparties, businesses, prospects, financial condition and
results of operations.

Regulation

See "Regulation" included in Part I, Item 1 of this Annual Report on Form 10-K for additional information related to our regulatory environment.

Industry Consolidation



In recent years, there has been significant consolidation among the
interdealer-brokers and wholesale brokers with which we compete. In addition to
our 2015 acquisition of GFI, Tullett and ICAP announced in November 2015 an
agreement whereby Tullett would purchase the vast majority of ICAP's global
Voice/Hybrid broking, as well as portions of its information businesses.
Following the completion of this deal in December 2016, ICAP changed its
corporate name to NEX, and Tullett changed its name to TP ICAP plc. CME
announced in March 2018 that it had agreed to acquire NEX and completed the
acquisition in November 2018. We expect to continue to compete with the
electronic markets, post-trade and information businesses of NEX, that are part
of CME now, through the various offerings on our Fenics platform. We will also
continue to compete with TP ICAP across various Voice/Hybrid brokerage
marketplaces as well as via Fenics. There has also been significant
consolidation among smaller non-public wholesale brokers, including our
acquisitions of RP Martin, Heat Energy Group, Remate Lince and Sunrise Brokers
Group. We view the recent consolidation in the industry favorably, as we expect
it to provide additional operating leverage to our businesses in the future.

Growth Drivers



As a wholesale intermediary in the financial services industry, our businesses
are driven primarily by overall industry volumes in the markets in which we
broker, the size and productivity of our front-office headcount (including
brokers, salespeople, managers and other front-office personnel), regulatory
issues, and the percentage of our revenues we are able to generate by Fully
Electronic means.

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Below is a brief analysis of the market and industry volumes for some of our products, including our overall Hybrid and Fully Electronic execution activities.

Overall Market Volumes and Volatility



Volume is driven by a number of factors, including the level of issuance for
financial instruments, price volatility of financial instruments, macro-economic
conditions, creation and adoption of new products, regulatory environment, and
the introduction and adoption of new trading technologies. Historically,
increased price volatility has often increased the demand for hedging
instruments, including many of the cash and derivative products that we broker.

Rates volumes in particular are influenced by market volumes and, in certain
instances, volatility. Historically low and negative interest rates across the
globe have significantly reduced the overall trading appetite for rates
products. As a result of central bank policies and actions, as well as continued
expectations of low inflation rates, many sovereign bonds continue to trade at
or close to negative yields, especially in real terms. In addition, also
weighing on yields and rates volumes are global central bank quantitative easing
programs. The programs depress rates volumes because they entail central banks
buying government securities or other securities in the open market -
particularly longer-dated instruments - in an effort to promote increased
lending and liquidity and bring down long-term interest rates. When central
banks hold these instruments, they tend not to trade or hedge, thus lowering
rates volumes across cash and derivatives markets industry-wide. Major central
banks such as the U.S. Federal Reserve, ECB, Bank of Japan, Bank of England, and
Swiss National Bank continue to maintain historically low interest rates through
quantitative easing programs, keeping key short-term interest rates low, or a
combination of both. Even with the Federal Reserve unwind, the overall dollar
value of balance sheets of the G-4 (the U.S., Eurozone, Japan, and U.K.) is
expected to remain high as a percentage of G-4 GDP over the near term. Largely
as a result of quantitative easing and expectations of continued low inflation,
the yield on Germany's 10-year bond was (0.19)% and the yield on Japan's 10-year
bond was (0.02)% as of the end of the fourth quarter of 2019.

Additional factors have weighed down market volumes in the products we broker.
For example, the Basel III accord, implemented in late 2010 by the G-20 central
banks, is a global regulatory framework on bank capital adequacy, stress testing
and market liquidity risk that was developed with the intention of making banks
more stable in the wake of the financial crisis by increasing bank liquidity and
reducing bank leverage. The accord, which is expected to be fully phased in as
of January 1, 2022, has already required most large banks in G-20 nations to
hold approximately three times as much Tier 1 capital as was required under the
previous set of rules. These capital rules have made it more expensive for banks
to hold non-sovereign debt assets on their balance sheets, and as a result,
analysts say that banks have reduced their proprietary trading activity in
corporate and asset-backed fixed income securities as well as in various other
OTC cash and derivative instruments. We believe that this has further reduced
overall market exposure and industry volumes in many of the products we broker,
particularly in credit.

For the year ended December 31, 2019, industry volumes were generally mixed
year-over-year across fixed income, and higher for commodities, while FX and
equities industry volumes were generally lower. Below is an expanded discussion
of the volume and growth drivers of our various brokerage product categories.

Rates Volumes and Volatility



Our rates business is influenced by a number of factors, including global
sovereign issuances, secondary trading and the hedging of these sovereign debt
instruments. The amount of global sovereign debt outstanding remains high by
historical standards, and the level of secondary trading and related hedging
activity was mixed during 2019. In addition, according to Bloomberg and the
Federal Reserve Bank of New York, the average daily volume of various U.S.
Treasuries, excluding Treasury bills, among primary dealers was 7% higher in
2019 as compared to a year earlier. Additionally, interest rate derivative
volumes were down 13% and up 4% at ICE and the CME, respectively, all according
to company press releases. In comparison, our revenue from Fenics Fully
Electronic rates increased 13.7%, while our overall rates revenues were up 8.2%
as compared to a year earlier to $594.9 million.

Our rates revenues, like the revenues for most of our products, are not fully
dependent on market volumes and, therefore, do not always fluctuate consistently
with industry metrics. This is largely because our Voice, Hybrid, and Fully
Electronic desks in rates often have volume discounts built into their price
structure, which results in our rates revenues being less volatile than the
overall industry volumes.

Overall, analysts and economists expect the absolute level of sovereign debt
outstanding to remain at elevated levels for the foreseeable future as
governments finance their future deficits and roll over their sizable existing
debt. Meanwhile, economists expect that the effects of various forms of
quantitative easing undertaken by the various major central banks over the past
several years will continue to negatively impact financial market volumes, as
economic growth remains weak in most OECD countries. As a result, we expect
long-term tailwinds in our rates business from continuing high levels of
government debt, but continued near-term headwinds due to the current low
interest rate environment and continued accommodative monetary policies
globally.

FX Volumes and Volatility

Global FX volumes were generally lower during 2019. Spot FX volumes at CME, Refinitiv (formerly the Financial & Risk business of Thomson Reuters), and EBS (CME formerly NEX) were down 14%, flat, and down 17%, respectively. In comparison, our overall FX revenues decreased by 6.5% to $370.3 million.


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Credit Volumes



The cash portion of our credit business is impacted by the level of global
corporate bond issuance, while both the cash and credit derivatives sides of
this business are impacted by sovereign and corporate issuance. The global
credit derivative market turnover has declined over the last few years due to
the introduction of rules and regulations around the clearing of credit
derivatives in the U.S. and elsewhere, along with non-uniform regulation across
different geographies. In addition, many of our large bank customers continue to
reduce their inventory of bonds and other credit products in order to comply
with Basel III and other international financial regulations. During 2019,
primary dealer average daily volume for corporate bonds (excluding commercial
paper) was up by 11% according to Bloomberg and the Federal Reserve Bank of New
York. Total notional traded credit derivatives as reported by the International
Swaps and Derivatives Association - a reflection of the OTC derivatives market -
were down by 12%, from a year earlier. In comparison, our overall credit
revenues were up by 5.0% to $306.7 million.

Energy and Commodities



Energy and commodities volumes were generally higher during 2019 compared with
the year earlier. According to the Futures Industry Association, the total
contracts traded in energy and commodities futures were up 14% in 2019 compared
to the previous year. Similarly, total contracts traded in energy and
commodities options were up 16% over the same period. In comparison, BGC's
energy and commodities revenues increased by 25.6% to $286.6 million, which was
driven by the acquisitions of Poten & Partners and Ginga Petroleum, as well as
organic growth, and partially offset by the sale of CSC.

Equities, Insurance, and Other Asset Classes



Global equity volumes were generally down during 2019. Research from Raymond
James indicates that the average daily volumes of U.S. cash equities and U.S.
options were down 4% and 5%, respectively, from a year ago. Over the same
timeframe, average daily volumes of European cash equities were down 18% (in
notional value), while Eurex average daily volumes of equity derivatives were up
4%. Our overall revenues from equities, insurance, and other asset classes
increased by 14.3% to $409.2 million, which was driven by the acquisition of Ed
Broking.



For the three and twelve months ended December 31, 2019, insurance brokerage
revenues increased by 185.6% and 126.0% to $43.3 million and $155.8 million,
respectively. Including interest income, total revenues associated with
insurance brokerage increased by 186.5% and 127.7% to $44.0 million and $158.0
million, respectively, for the three and twelve months ended December 31, 2019.



Our overall insurance brokerage business now includes Ed Broking, as well as our
newly acquired aviation and space insurance brokerage business, whose producers
are not yet generating meaningful revenue. Therefore, these newer insurance
businesses are not yet up to scale. The pre-tax loss relating to our insurance
brokerage business was $9.7 million and $18.0 million for the three and twelve
months ended December 31, 2019, respectively. The corresponding prior year
periods had a pre-tax loss of $2.8 million and pre-tax income of $5.3 million
for the three and twelve months ended December 31, 2018, respectively.



We currently expect our overall insurance brokerage business to operate around
breakeven for the next two years as we seek to double this division's current
revenues. We also expect our overall investment to turn profitable and deliver
margins in excess of 15% by 2022. This is similar to the trend in revenues and
profitability of our former real estate services business, Newmark, over its
first three years as part of BGC. We believe our insurance brokerage business is
worth materially more than our investment and are actively considering ways to
better express its value for the benefit of our investors.

Summary of Results from Continuing Operations



Our results from continuing operations exclude the results of Newmark for all
periods due to the Spin-Off. During the year ended December 31, 2019, BGC's
revenues increased 8.6%, to $2,104.2 million. This growth was largely due to an
increase in brokerage revenues, which were up by 7.8% to $1,967.7 million. In
addition, our data, software, and post-trade revenues increased by 12.2% from a
year ago to $73.2 million. Income from operations before income taxes decreased
by $41.7 million to $138.1 million for the year ended December 31, 2019.



FINANCIAL OVERVIEW

Revenues

Our revenues are derived primarily from brokerage commissions charged for either
agency or matched principal transactions, fees from related parties, fees
charged for market data, analytics and post-trade products, fees from software
solutions, and interest income.

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Brokerage



We earn revenues from our brokerage services on both an agency and matched
principal basis. In agency transactions, we charge a commission for connecting
buyers and sellers and assisting in the negotiation of the price and other
material terms of the transaction. After all material terms of a transaction are
agreed upon, we identify the buyer and seller to each other and leave them to
settle the trade directly. Principal transaction revenues are primarily derived
from matched principal transactions, whereby revenues are earned on the spread
between the buy and the sell price of the brokered security, commodity or
derivative. Customers either see the buy or sell price on a screen or are given
this information over the phone. The brokerage fee is then added to the buy or
sell price, which represents the spread we earn as principal transactions
revenues. On a limited basis, we enter into unmatched principal transactions to
facilitate a customer's execution needs for transactions initiated by such
customers. We also provide market data products for selected financial
institutions.

We offer our brokerage services in seven broad product categories: rates, credit, FX, energy & commodities, equities, insurance, and other asset classes. The chart below details brokerage revenues by product category and by Voice/Hybrid versus Fully Electronic (in thousands):





                                                      For the Year Ended December 31,
                                                   2019            2018            2017
Brokerage revenue by product:
Rates                                           $   594,884     $   549,825     $   510,880
FX                                                  370,318         396,256         324,386
Credit                                              306,713         292,171         284,551
Energy and commodities                              286,584         228,199         204,016

Equities, insurance, and other asset classes 409,242 358,124

328,406


Total brokerage revenues                        $ 1,967,741     $ 1,824,575     $ 1,652,239
Brokerage revenue by product (percentage):
Rates                                                  30.2 %          30.1 %          30.9 %
FX                                                     18.8            21.7            19.6
Credit                                                 15.6            16.0            17.2
Energy and commodities                                 14.6            12.6            12.4
Equities, insurance, and other asset classes           20.8            19.6            19.9
Total brokerage revenues                              100.0 %         100.0 %         100.0 %
Brokerage revenue by type:
Voice/Hybrid                                    $ 1,763,114     $ 1,628,653     $ 1,483,945
Fully Electronic                                    204,627         195,922         168,294
Total brokerage revenues                        $ 1,967,741     $ 1,824,575     $ 1,652,239
Brokerage revenue by type (percentage):
Voice/Hybrid                                           89.6 %          89.3 %          89.8 %
Fully Electronic                                       10.4            10.7            10.2
Total brokerage revenues                              100.0 %         100.0 %         100.0 %




As the above table indicates, our brokerage operations in the rates product
category produce a significant percentage of our total brokerage revenues. We
expect that revenues from our rates product brokerage operations will increase
in absolute terms, but decline as a percentage of our overall revenues as we
continue to invest in expanding in other asset classes.

Our position as a leading wholesale financial broker is enhanced by our Hybrid
brokerage platform. We believe that the more complex, less liquid markets on
which we focus often require significant amounts of personal and attentive
service from our brokers. In more mature markets, we offer Fully Electronic
execution capabilities to our customers through our platforms, including Fenics
and BGC Trader. Our Hybrid platform allows our customers to trade on a Voice,
Hybrid or, where available, Fully Electronic basis, regardless of whether the
trade is OTC or exchange-based, and to benefit from the experience and market
intelligence of our worldwide brokerage network. Our electronic capabilities
include clearing, settlement, post-trade, and other back-office services as well
as straight-through processing for our customers across several products.
Furthermore, we benefit from the operational leverage in our Fully Electronic
platform. We believe our Hybrid brokerage approach provides a competitive
advantage over competitors who do not offer this full range of technology.

Rates



Our rates business is focused on government debt, futures and currency, and both
listed and OTC interest rate derivatives, which are among the largest, most
global and most actively traded markets. The main drivers of these markets are
global macroeconomic forces such as growth, inflation, government budget
policies and new issuances.

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Credit

We provide our brokerage services in a wide range of credit instruments, including asset-backed securities, convertible bonds, corporate bonds, credit derivatives and high yield bonds.



The FX market is one of the largest financial markets in the world. FX
transactions can either be undertaken in the spot market, in which one currency
is sold and another is bought, or in the derivative market in which future
settlement of the identical underlying currencies are traded. We provide full
execution OTC brokerage services in most major currencies, including all G8
currencies, emerging market, cross and exotic options currencies.

Energy and Commodities

We provide brokerage services for most widely traded energy and commodities products, including futures and OTC products covering, refined and crude oil, liquid natural gas, coal, electricity, gold and other precious metals, base metals, emissions, and soft commodities. We also provide brokerage services associated with the shipping of certain energy and commodities products.

Equities, Insurance, and Other Asset Classes

We provide brokerage services in a range of markets for equity products, including cash equities, equity derivatives (both listed and OTC), equity index futures and options on equity products as well as insurance products.

Fees from Related Parties



We earn fees from related parties for technology services and software licenses
and for certain administrative and back-office services we provide to
affiliates, particularly from Cantor. These administrative and back-office
services include office space, utilization of fixed assets, accounting services,
operational support, human resources, legal services and information technology.

Data, software and post-trade



Fenics Market Data is a supplier of real-time, tradable, indicative, end-of-day
and historical market data. Our market data product suite includes fixed income,
interest rate derivatives, credit derivatives, FX, FX options, money markets,
energy and equity derivatives and structured market data products and services.
The data are sourced from the Voice, Hybrid and Fully Electronic broking
operations, as well as the market data operations, including BGC, GFI and RP
Martin, among others. It is made available to financial professionals, research
analysts and other market participants via direct data feeds and BGC-hosted FTP
environments, as well as via information vendors such as Bloomberg, Thomson
Reuters, ICE Data Services, QUICK Corp., and other select specialist vendors.

Through our software solutions business, we provide customized software to
broaden distribution capabilities and provide electronic solutions to financial
market participants. The software solutions business leverages our global
infrastructure, software, systems, portfolio of intellectual property, and
electronic trading expertise to provide customers with electronic marketplaces
and exchanges and real-time auctions to enhance debt issuance and to customize
trading interfaces. We take advantage of the scalability, flexibility and
functionality of our electronic trading system to enable our customers to
distribute products to their customers through online offerings and auctions,
including private and reverse auctions, via our trading platform and global
network. Using screen-based market solutions, customers are able to develop a
marketplace, trade with their customers, issue debt, trade odd lots, access
program trading interfaces and access our network and intellectual property. We
provide option pricing and analysis tools that deliver price discovery that is
supported with market data sourced from both our BGC and GFI trading systems.

In the fourth quarter of 2017, Capitalab completed its largest G-4 Interest
Rates IMO to date with more than 15 participating counterparties. The service
enabled these counterparties to multilaterally shrink delta, vega and curvature
bilateral counterparty risks and significantly reduce both non-cleared and
cleared initial margin at the Central Clearing Counterparty. In January of 2018,
Capitalab executed the first combined compression cycle in Swaptions, Caps,
Floors and cleared interest rate swaps due to its appointment as an Approved
Compression Service Provider at LCH's SwapClear. In the second quarter of 2019,
Capitalab launched its Nikkei 225 options compression service in partnership
with the Singapore Exchange.

Interest Income



We generate interest income primarily from the investment of our daily cash
balances, interest earned on securities owned and reverse repurchase agreements.
These investments and transactions are generally short-term in nature. We also
earn interest income from employee loans, and we earn dividend income on certain
marketable securities.

Other Revenues

We earn other revenues from various sources, including underwriting and advisory fees.



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Expenses

Compensation and Employee Benefits



The majority of our operating costs consist of cash and non-cash compensation
expenses, which include base salaries, broker bonuses based on broker
production, guaranteed bonuses, other discretionary bonuses, and all related
employee benefits and taxes. Our employees consist of brokers, salespeople,
executives and other administrative support. The majority of our brokers receive
a base salary and a formula bonus based primarily on a pool of brokers'
production for a particular product or sales desk, as well as on the individual
broker's performance. Members of our sales force receive either a base salary or
a draw on commissions. Less experienced salespeople typically receive base
salaries and bonuses.

As part of our compensation plans, certain employees are granted LPUs in BGC
Holdings which generally receive quarterly allocations of net income, that are
cash distributed on a quarterly basis and generally contingent upon services
being provided by the unit holders. As prescribed in U.S. GAAP guidance, the
quarterly allocations of net income on such LPUs are reflected as a component of
compensation expense under "Equity-based compensation and allocations of net
income to limited partnership units and FPUs" in our consolidated statements of
operations.

Certain of these LPUs entitle the holders to receive post-termination payments
equal to the notional amount in four equal yearly installments after the
holder's termination. These limited partnership units are accounted for as
post-termination liability awards under U.S. GAAP guidance, which requires that
we record an expense for such awards based on the change in value at each
reporting period and include the expense in our consolidated statements of
operations as part of "Equity-based compensation and allocations of net income
to limited partnership units and FPUs." The liability for LPUs with a
post-termination payout amount is included in "Accrued compensation" on our
consolidated statements of financial condition.

Certain LPUs are granted exchangeability into our Class A common stock on a
one-for-one basis (subject to adjustment). At the time exchangeability is
granted, the Company recognizes an expense based on the fair value of the award
on that date, which is included in "Equity-based compensation and allocations of
net income to limited partnership units and FPUs" in our consolidated statements
of operations.

In addition, Preferred Units are granted in connection with the grant of certain
LPUs, such as PSUs, that may be granted exchangeability or redemption in
connection with the grant of shares of common stock to cover the withholding
taxes owed by the unit holder upon such exchange or redemption. This is an
acceptable alternative to the common practice among public companies of issuing
the gross amount of shares to employees, subject to cashless withholding of
shares to pay applicable withholding taxes. Each quarter, the net profits of BGC
Holdings and Newmark Holdings are allocated to Preferred Units at a rate of
either 0.6875% (which is 2.75% per calendar year) or such other amount as set
forth in the award documentation. The Preferred Distribution is deducted before
the calculation and distribution of the quarterly partnership distribution for
the remaining partnership interests. The Preferred Units are not entitled to
participate in partnership distributions other than with respect to the
Preferred Distribution. Preferred Units may not be made exchangeable into our
Class A common stock and are only entitled to the Preferred Distribution, and
accordingly they are not included in our fully diluted share count. The
quarterly allocations of net income on Preferred Units are reflected in
compensation expense under "Equity-based compensation and allocations of net
income to limited partnership units and FPUs" in our consolidated statements of
operations.

We have entered into various agreements with certain of our employees and
partners, whereby these individuals receive loans which may be either wholly or
in part repaid from the distribution earnings that the individual receives on
their LPUs or may be forgiven over a period of time. The forgivable portion of
these loans is recognized as compensation expense over the life of the loan.
From time to time, we may also enter into agreements with employees and partners
to grant bonus and salary advances or other types of loans. These advances and
loans are repayable in the timeframes outlined in the underlying agreements.

In addition, we also enter into deferred compensation agreements with employees
providing services to us. The costs associated with such plans are generally
amortized over the period in which they vest. See Note 19-"Compensation" to our
consolidated financial statements.

Other Operating Expenses



We have various other operating expenses. We incur leasing, equipment and
maintenance expenses for our businesses worldwide. We also incur selling and
promotion expenses, which include entertainment, marketing and travel-related
expenses. We incur communication expenses for voice and data connections with
our clients, clearing agents and general usage; professional and consulting fees
for legal, audit and other special projects; and interest expense related to
short-term operational funding needs, and notes payable and collateralized
borrowings.

Primarily in the U.S., we pay fees to Cantor for performing certain
administrative and other support services, including charges for occupancy of
office space, utilization of fixed assets and accounting, operations, human
resources, legal services and technology infrastructure support. Management
believes that these charges are a reasonable reflection of the utilization of
services rendered. However, the expenses for these services are not necessarily
indicative of the expenses that would have been incurred if we had not obtained
these services from Cantor. In addition, these charges may not reflect the costs
of services we may receive from Cantor in the future. We incur commissions and
floor brokerage fees for clearing, brokerage and other transactional expenses
for clearing and settlement services. We also incur various other normal
operating expenses.

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Other Income (Losses), Net

Gain (Loss) on Divestiture and Sale of Investments

Gain (Loss) on divestiture and sale of investments represent the gain or loss we recognize for the divestiture or sale of our investments.

Gains (Losses) on Equity Method Investments



Gains (losses) on equity method investments represent our pro-rata share of the
net gains (losses) on investments over which we have significant influence but
which we do not control.

Other Income (Loss)

Other Income (loss) is primarily comprised of gains or losses related to fair
value adjustments on investments carried under the alternative method. Other
Income (loss) also includes realized and unrealized gains or losses related to
sales and mark-to-market adjustments on Marketable securities and any related
hedging transactions when applicable. Acquisition-related fair value adjustments
of contingent consideration and miscellaneous recoveries are also included in
Other Income (loss).

Provision (Benefit) for Income Taxes



We incur income tax expenses or benefit based on the location, legal structure
and jurisdictional taxing authorities of each of our subsidiaries. Certain of
the Company's entities are taxed as U.S. partnerships and are subject to the UBT
in New York City. U.S. federal and state income tax liability or benefit related
to the partnership income or loss, with the exception of UBT, rests with the
partners (see Note 2-"Limited Partnership Interests in BGC Holdings and Newmark
Holdings" for discussion of partnership interests), rather than the partnership
entity. The Company's consolidated financial statements include U.S. federal,
state and local income taxes on the Company's allocable share of the U.S.
results of operations. Outside of the U.S., we operate principally through
subsidiary corporations subject to local income taxes.

REGULATORY ENVIRONMENT

See "Regulation" in Part I, Item 1 of this Annual Report on Form 10-K for additional information related to our regulatory environment.

LIQUIDITY

See "Liquidity and Capital Resources" herein for information related to our liquidity and capital resources.

HIRING AND ACQUISITIONS



Key drivers of our revenue are front-office producer headcount and average
revenue per producer. We believe that our strong technology platform and unique
partnership structure have enabled us to use both acquisitions and recruiting to
profitably increase our front-office staff at a faster rate than our largest
competitors since our formation in 2004.

We have invested significantly to capitalize on the current business environment
through acquisitions, technology spending and the hiring of new brokers,
salespeople, managers and other front-office personnel. The business climate for
these acquisitions has been competitive, and it is expected that these
conditions will persist for the foreseeable future. We have been able to attract
businesses and brokers, salespeople, managers and other front-office personnel
to our platform as we believe they recognize that we have the scale, technology,
experience and expertise to succeed in the current business environment.

Our average revenue per front-office employee has historically declined
year-over-year for the period immediately following significant headcount
increases, and the additional brokers and salespeople generally achieve
significantly higher productivity levels in their second or third year with the
Company. Excluding our insurance brokerage business, as of December 31, 2019,
our front-office headcount was 2,570 brokers, salespeople, managers and other
front-office personnel, up 1% from 2,553 a year ago. Compared to the prior year,
average revenue per front-office employee for the year ended December 31, 2019
decreased by 1% to $750 thousand from $760 thousand. On a stand-alone basis, our
total insurance brokerage headcount increased by 122% to 591 from 266 a year
ago.

As of December 31, 2019, our front-office headcount, including our insurance
brokerage business, was 2,990 brokers, salespeople, managers and other
front-office personnel, up 13% from 2,654 a year ago. Our total technology
headcount increased by 8% year-on-year to 691, related primarily to our newer
Fenics stand-alone Fully Electronic offerings. Compared to the prior year,
average revenue per front-office employee, including our insurance brokerage
business, for the year ended December 31, 2019 decreased by 7% to $703 thousand
from $756 thousand. All figures mentioned in the previous two paragraphs exclude
Newmark.

Because revenue per broker is not a widely used or relevant statistic for the
insurance brokerage industry, BGC will provide statistics with respect to
front-office staff excluding this business beginning in the first quarter of
2020.

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The laws and regulations passed or proposed on both sides of the Atlantic
concerning OTC trading seem likely to favor increased use of technology by all
market participants, and are likely to accelerate the adoption of both Hybrid
and Fully Electronic execution. We believe these developments will favor the
larger inter-dealer brokers over smaller, non-public local competitors, as the
smaller players generally do not have the financial resources to invest the
necessary amounts in technology. We believe this will lead to further
consolidation across the wholesale financial brokerage industry, and thus allow
us to profitably grow our front-office headcount.

Since 2017, our acquisitions have included Besso, Poten & Partners, Ed Broking, Ginga Petroleum and several smaller acquisitions.

On January 31, 2017, we completed the acquisition of Micromega Securities, which operates in the South African fixed income, rates and FX markets.

On February 28, 2017, we completed the acquisition of Besso, an independent Lloyd's of London insurance broker with a strong reputation across property, casualty, marine, aviation, professional and financial risks and reinsurance.



On November 15, 2018, we acquired Poten & Partners, a leading ship brokerage,
consulting and business intelligence firm specializing in LNG, tanker and LPG
markets. Founded over 80 years ago and with 170 employees worldwide, Poten &
Partners provides its clients with valuable insight into the international oil,
gas and shipping markets.

On January 31, 2019, we completed the acquisition of Ed Broking, an independent
Lloyd's of London insurance broker with a strong reputation across accident and
health, aerospace, cargo, energy, financial and political risks, marine,
professional and executive risks, property and casualty, specialty and
reinsurance. Ed Broking has become part of the Company's overall insurance
brokerage business.

On March 12, 2019, we completed the acquisition of Ginga Petroleum. Ginga
Petroleum provides a comprehensive range of broking services for physical and
derivative energy products, including naphtha, liquefied petroleum gas, fuel
oil, biofuels, middle distillates, petrochemicals and gasoline.

FINANCIAL HIGHLIGHTS



For the year ended December 31, 2019, we had income (loss) from operations
before income taxes of $138.1 million compared to income (loss) from operations
before income taxes of $179.8 million in the year earlier period. Total revenues
for the year ended December 31, 2019 increased $166.4 million to
$2,104.2 million primarily led by our energy and commodities, equities,
insurance, and other asset classes, rates, and credit businesses.

Brokerage revenues for the year ended December 31, 2019 increased by $143.2
million. Our brokerage revenue growth was led by a 25.6% improvement in our
energy and commodities business, which was driven by the acquisitions of Poten &
Partners and Ginga Petroleum, partially offset by the sale of CSC Commodities.
Revenues from equities, insurance, and other asset classes increased 14.3%
primarily due to the acquisition of Ed Broking. Our insurance brokerage revenues
increased 126% for the full year 2019, largely due to the acquisition of Ed
Broking. Because of the significant growth of this business, we expect to break
out insurance brokerage revenues separately from equities and other asset
classes in the next quarter. We believe our insurance brokerage business is
worth materially more than our investment and are actively considering ways to
better express its value for the benefit of our investors. Within our Fenics
business, net revenues were up 6.4%. Our Fully Electronic brokerage revenues
increased 4.4%, which was primarily led by a 13.7% increase in our Fenics rates
business, while our revenues from our high margin data, software, and post-trade
business increased 12.2%. As our stand-alone Fenics offerings continue to gain
traction, we convert Voice and Hybrid revenue to higher margin Fully Electronic
execution, and as our recently added brokers and salespeople ramp up production,
we expect the Company's revenues and profits to grow.

Total expenses increased $205.8 million to $2,021.6 million, primarily due to a
$118.9 million increase in non-compensation expenses driven by the impact of
acquisitions; expenses related to the Company's previously disclosed settlements
with the CFTC and the NYAG; interest expense associated with increased
borrowing; and the Company's increased investment in technology. The increase in
non-compensation expenses was also impacted by rent during the build-out of
BGC's new U.K.-based headquarters, which was recently completed. Compensation
expenses increased by $86.8 million, which was primarily driven by the impact of
recent acquisitions.

On February 5, 2020, the Board declared a 14 cent dividend for the fourth quarter. We anticipate having substantial resources with which to pay dividends, repurchase shares and/or units, profitably hire, and make accretive acquisitions, all with the goal of maintaining our investment grade rating.


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RESULTS OF OPERATIONS



The following table sets forth our consolidated statements of operations data
expressed as a percentage of total revenues for the periods indicated (in
thousands):



                                                                          Year Ended December 31,
                                                   2019                             2018                             2017
                                                        Percentage                       Percentage                       Percentage
                                         Actual          of Total         Actual          of Total         Actual          of Total
                                         Results         Revenues         Results         Revenues         Results         Revenues
Revenues:
Commissions                            $ 1,645,818             78.2 %   $ 1,511,522             78.0 %   $ 1,334,383             76.2 %
Principal transactions                     321,923             15.3         313,053             16.2         317,856             18.2
Total brokerage revenues                 1,967,741             93.5       1,824,575             94.2       1,652,239             94.4
Fees from related parties                   29,442              1.4          24,076              1.2          27,094              1.5
Data, software and post-trade               73,166              3.5          65,185              3.4          54,557              3.1
Interest income                             18,319              0.9          14,404              0.7          14,557              0.8
Other revenues                              15,563              0.7           9,570              0.5           2,504              0.2
Total revenues                           2,104,231            100.0       1,937,810            100.0       1,750,951            100.0
Expenses:
Compensation and employee benefits       1,127,911             53.6       1,001,623             51.7         950,477             54.3
Equity-based compensation and
allocations of net
  income to limited partnership
units and FPUs 1                           165,612              7.9         205,070             10.6         233,241             13.3
Total compensation and employee
benefits                                 1,293,523             61.5       1,206,693             62.3       1,183,718             67.6
Occupancy and equipment                    184,807              8.8         149,594              7.7         142,884              8.2
Fees to related parties                     19,365              0.9          20,163              1.0          15,820              0.9
Professional and consulting fees            92,167              4.4          84,103              4.3          63,369              3.6
Communications                             119,982              5.7         118,014              6.1         119,379              6.8
Selling and promotion                       81,645              3.9          69,338              3.6          62,463              3.6
Commissions and floor brokerage             63,617              3.0          61,891              3.2          43,130              2.5
Interest expense                            59,077              2.8          41,733              2.2          76,958              4.4
Other expenses                             107,423              5.1          64,309              3.3          70,145              4.0
Total expenses                           2,021,606             96.1       1,815,838             93.7       1,777,866            101.6
Other income (losses), net:
Gains (losses) on divestitures and
sale of investments                         18,421              0.9               -                -             561              0.0
Gains (losses) on equity method
investments                                  4,115              0.2           7,377              0.4           4,627              0.3
Other income (loss)                         32,953              1.5          50,468              2.6          25,863              1.5
Total other income (losses), net            55,489              2.6          57,845              3.0          31,051              1.8
Income (loss) from continuing
operations
  before income taxes                      138,114              6.5         179,817              9.3           4,136              0.2
Provision (benefit) for income taxes        53,171              2.5          76,120              3.9          92,772              5.3
Consolidated net income (loss) from
continuing
  operations                                84,943              4.0         103,697              5.4         (88,636 )           (5.1 )

Consolidated net income (loss) from


  discontinued operations, net of
tax                                              -                -         176,169              9.0         170,365              9.8
Consolidated net income (loss)              84,943              4.0         279,866             14.4          81,729              4.7
Less: Net income (loss) from
continuing
  operations attributable to
noncontrolling
  interest in subsidiaries                  29,236              1.4          29,993              1.5          36,167              2.1
Less: Net income (loss) from
discontinued
 operations attributable to
noncontrolling
 interest in subsidiaries                        -                -          52,353              2.7          (5,913 )           (0.3 )

Net income (loss) available to


  common stockholders                  $    55,707              2.6 %   $   197,520             10.2 %   $    51,475              2.9 %

1 The components of Equity-based compensation and allocations of net income to


    limited partnership units and FPUs are as follows (in thousands):


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                                                                  Year Ended December 31,
                                              2019                          2018                          2017
                                                  Percentage                    Percentage                    Percentage
                                    Actual         of Total        Actual        of Total        Actual        of Total
                                    Results        Revenues        Results       Revenues        Results       Revenues
Issuance of common stock and
exchangeability
  expenses                         $ 100,948              4.8 %   $ 150,147             7.7 %   $ 176,463            10.1 %
Allocations of net income             20,491              1.0        38,352             2.0        51,008             2.9
LPU amortization                      36,708              1.7        11,359             0.6         1,194             0.1
RSU amortization                       7,465              0.4         5,212             0.3         4,576             0.2
Equity-based compensation and
allocations of net
  income to limited partnership
units and FPUs                     $ 165,612              7.9 %   $ 205,070            10.6 %   $ 233,241            13.3 %

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

Revenues

Brokerage Revenues



Total brokerage revenues increased by $143.2 million, or 7.8%, to
$1,967.7 million for the year ended December 31, 2019 as compared to the
year ended December 31, 2018. Commission revenues increased by $134.3 million,
or 8.9%, to $1,645.8 million for the year ended December 31, 2019 as compared to
the year ended December 31, 2018. Principal transactions revenues increased by
$8.9 million, or 2.8%, to $321.9 million for the year ended December 31, 2019 as
compared to the year ended December 31, 2018.

The increase in total brokerage revenues was primarily driven by increases in revenues from energy and commodities, equities, insurance, and other asset classes, rates, and credit, partially offset by a decrease in revenues from FX.



Our brokerage revenues from energy and commodities increased by $58.4 million,
or 25.6%, to $286.6 million for the year ended December 31, 2019. This increase
was primarily driven by the acquisitions of Poten & Partners and Ginga
Petroleum, as well as organic growth, partially offset by the sale of CSC
Commodities.

Our brokerage revenues from equities, insurance, and other asset classes increased by $51.1 million, or 14.3%, to $409.2 million for the year ended December 31, 2019. This increase was driven by the acquisition of Ed Broking.



Our brokerage revenues from rates increased by $45.1 million, or 8.2%, to
$594.9 million for the year ended December 31, 2019. The increase in rates
revenues was primarily driven by higher global volumes and improvement in our
Fully Electronic rates business, which was a result of our continued investment
in technology and the ongoing conversion of our businesses to more profitable
Fully Electronic execution.

Our credit revenues increased by $14.5 million, or 5.0%, to $306.7 million for
the year ended December 31, 2019. This increase was mainly due to higher global
volumes.

Our FX revenues decreased by $25.9 million, or 6.5%, to $370.3 million for the
year ended December 31, 2019. This decrease was primarily driven by lower global
volumes and a decrease in market volatility.

Fees from Related Parties



Fees from related parties increased by $5.4 million, or 22.3% to $29.4 million
for the year ended December 31, 2019 as compared to the year ended December 31,
2018.

Data, Software and Post-Trade



Data, software and post-trade revenues increased by $8.0 million, or 12.2%, to
$73.2 million for the year ended December 31, 2019 as compared to the year ended
December 31, 2018. This increase was primarily driven by the acquisition of
Poten & Partners, an increase in revenues from post-trade services and new
business contracts.

Interest Income



Interest income increased by $3.9 million, or 27.2%, to $18.3 million for the
year ended December 31, 2019 as compared to the year ended December 31, 2018.
This increase was primarily due to higher interest earned on deposits and an
increase in dividend income.

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Other Revenues



Other revenues increased by $6.0 million, or 62.6% to $15.6 million for the
year ended December 31, 2019 as compared to the year ended December 31, 2018.
This increase was primarily driven by revenues generated from the acquisitions
of Poten & Partners and Ed Broking.

Expenses

Compensation and Employee Benefits



Compensation and employee benefits expense increased by $126.3 million, or
12.6%, to $1,127.9 million for the year ended December 31, 2019 as compared to
the year ended December 31, 2018. The main drivers of this increase were the
acquisitions of Poten & Partners, Ed Broking, and Ginga Petroleum, as well as
the impact of higher brokerage revenues on variable compensation.

Equity-Based Compensation and Allocations of Net Income to Limited Partnership Units and FPUs



Equity-based compensation and allocations of net income to limited partnership
units and FPUs decreased by $39.5 million, or 19.2%, to $165.6 million for the
year ended December 31, 2019 as compared to the year ended December 31, 2018.
This decrease was primarily driven by a decrease in charges related to
equity-based compensation, as well as a decrease in allocations of net income to
limited partnership units and FPUs.

Occupancy and Equipment



Occupancy and equipment expense increased by $35.2 million, or 23.5%, to
$184.8 million for the year ended December 31, 2019 as compared to the
year ended December 31, 2018. This increase was primarily driven by increases
related to the acquisitions of Poten & Partners, Ed Broking, and Ginga
Petroleum, as well as rent expense related to the build-out phase of BGC's new
U.K.-based headquarters.

Fees to Related Parties

Fees to related parties decreased by $0.8 million, or 4.0%, to $19.4 million for
the year ended December 31, 2019 as compared to the year ended December 31,
2018. Fees to related parties are allocations paid to Cantor for administrative
and support services (such as accounting, occupancy, and legal).

Professional and Consulting Fees



Professional and consulting fees increased by $8.1 million, or 9.6%, to
$92.2 million for the year ended December 31, 2019 as compared to the year ended
December 31, 2018. This increase was primarily driven by fees attributed to the
acquisitions of Ed Broking and Poten & Partners, and an increase in legal fees,
which was partially offset by a decrease in consulting fees, notably with
regards to the implementation of MiFID II during the year ended December 31,
2018.

Communications

Communications expense increased by $2.0 million, or 1.7%, to $120.0 million for the year ended December 31, 2019 as compared to the year ended December 31, 2018. As a percentage of total revenues, communications expense slightly decreased from the prior year period.

Selling and Promotion



Selling and promotion expense increased by $12.3 million, or 17.7%, to
$81.6 million for the year ended December 31, 2019 as compared to the year ended
December 31, 2018. This increase was primarily driven by the acquisitions of
Poten & Partners, Ed Broking, and Ginga Petroleum.

Commissions and Floor Brokerage



Commissions and floor brokerage expense increased by $1.7 million, or 2.8%, to
$63.6 million for the year ended December 31, 2019 as compared to the year ended
December 31, 2018. This line item tends to move in line with brokerage revenues.

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Interest Expense



Interest expense increased by $17.3 million, or 41.6%, to $59.1 million for the
year ended December 31, 2019 as compared to the year ended December 31, 2018.
This increase was primarily driven by interest expense on the $450.0 million
5.375% Senior Notes due 2023 issued in July 2018, interest expense related to
the borrowings on the Revolving Credit Agreement, and interest expense on the
$300 million 3.750% Senior Notes issued in September 2019, partially offset by
lower interest expense on the $240.0 million 8.375% Senior Notes which were
repaid in July 2018.

Other Expenses



Other expenses increased by $43.1 million, or 67.0%, to $107.4 million for the
year ended December 31, 2019 as compared to the year ended December 31, 2018,
which was primarily related to our previously disclosed settlements with the
CFTC and the NYAG, as well as higher costs associated with the acquisitions of
Poten & Partners and Ed Broking.

Other Income (Losses), Net

Gains (Losses) on Divestitures and Sale of Investments

For the year ended December 31, 2019, there was a gain of $18.4 million as a result of the sale of CSC Commodities. We had no gains or losses from divestitures or sale of investments in the year ended December 31, 2018.

Gains (Losses) on Equity Method Investments



Gains (losses) on equity method investments decreased by $3.3 million, to a gain
of $4.1 million, for the year ended December 31, 2019 as compared to a gain of
$7.4 million for the year ended December 31, 2018. Gains (losses) on equity
method investments represent our pro-rata share of the net gains or losses on
investments over which we have significant influence, but which we do not
control.

Other Income (Loss)



Other income (loss) decreased by $17.5 million, or 34.7% to $33.0 million for
the year ended December 31, 2019 as compared to the year ended December 31,
2018. This was primarily driven by a decrease related to fair value adjustments
on investments carried under the measurement alternative. There was also a
decrease related the mark-to-market and/or hedging on the Nasdaq earn out
shares. This was partially offset by an increase in other recoveries related to
our insurance business.

Provision (Benefit) for Income Taxes



Provision (benefit) for income taxes decreased by $22.9 million, or 30.1%, to
$53.2 million for the year ended December 31, 2019 as compared to the year ended
December 31, 2018. This decrease was primarily driven by lower pre-tax earnings,
as well as a change in the geographical and business mix of earnings, which can
have an impact on our consolidated effective tax rate from period-to-period.

Net Income (Loss) From Continuing Operations Attributable to Noncontrolling Interest in Subsidiaries



Net income (loss) from continuing operations attributable to noncontrolling
interest in subsidiaries decreased by $0.8 million, or 2.5%, to $29.2 million
for the year ended December 31, 2019 as compared to the year ended December 31,
2018.

Net Income (Loss) From Discontinued Operations Attributable to Noncontrolling Interest in Subsidiaries



For the year ended December 31, 2019 there was no net income (loss) from
discontinued operations attributable to noncontrolling interest in subsidiaries.
For the year ended December 31, 2018, we had net income (loss) from discontinued
operations attributable to noncontrolling interest in subsidiaries of $52.4
million.

Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

Revenues

Brokerage Revenues



Total brokerage revenues increased by $172.3 million, or 10.4%, to $1,824.6
million for the year ended December 31, 2018 as compared to the year ended
December 31, 2017. Commission revenues increased by $177.1 million, or 13.3%, to
$1,511.5 million for the year ended December 31, 2018 as compared to the year
ended December 31, 2017. Principal transactions revenues decreased by $4.8
million, or 1.5%, to $313.1 million for the year ended December 31, 2018 as
compared to the year ended December 31, 2017.

The increase in brokerage revenues was primarily driven by increases in revenues
from rates, FX, equities, insurance, and other asset classes, and energy and
commodities.

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Our rates revenues increased by $38.9 million, or 7.6%, to $549.8 million in the
year ended December 31, 2018. The increase in rates revenues reflected strong
improvement in our Fully Electronic rates business, which was a result of our
continued investment in technology and the ongoing conversion of our businesses
to more profitable Fully Electronic execution.

Our FX revenues increased by $71.9 million, or 22.2%, to $396.3 million for the
year ended December 31, 2018. This increase was primarily driven by improved
global volumes and increased market volatility.

Our brokerage revenues from equities, insurance, and other asset classes increased by $29.7 million, or 9.0%, to $358.1 million for the year ended December 31, 2018. This increase was primarily driven by improved global volumes, and revenues generated by Besso, which was acquired on February 28, 2017.



Our brokerage revenues from energy and commodities increased by $24.2 million,
or 11.9%, to $228.2 million for the year ended December 31, 2018. This increase
was primarily driven by improved global volumes.

Our credit revenues increased by $7.6 million, or 2.7%, to $292.2 million in the year ended December 31, 2018. This increase was mainly due to higher global volumes and an uptick in Fully Electronic credit brokerage.

Fees from Related Parties



Fees from related parties decreased by $3.0 million, or 11.1%, to $24.1 million
for the year ended December 31, 2018 as compared to the year ended December 31,
2017.

Data, Software and Post-Trade



Data, software and post-trade revenues increased by $10.6 million, or 19.5%, to
$65.2 million for the year ended December 31, 2018 as compared to the year ended
December 31, 2017. This increase was primarily driven by new business contracts
in 2018.

Interest Income

Interest income decreased by $0.2 million, or 1.1%, to $14.4 million for the year ended December 31, 2018 as compared to the year ended December 31, 2017.

Other Revenues



Other revenues increased by $7.1 million, to $9.6 million for the year ended
December 31, 2018 as compared to the year ended December 31, 2017. This increase
was primarily driven by the acquisition of Poten & Partners in November 2018, as
well as a settlement of $2.5 million received and recognized during the year
ended December 31, 2018.

Expenses

Compensation and Employee Benefits



Compensation and employee benefits expense increased by $51.1 million, or 5.4%,
to $1,001.6 million for the year ended December 31, 2018 as compared to the year
ended December 31, 2017. The main drivers of this increase were the impact of
higher brokerage revenues on variable compensation, and the acquisition of Poten
& Partners in November 2018.

Equity-based compensation and allocations of net income to limited partnership units and FPUs



Equity-based compensation and allocations of net income to limited partnership
units and FPUs decreased by $28.2 million, or 12.1%, to $205.1 million for the
year ended December 31, 2018 as compared to the year ended December 31, 2017.
This decrease was primarily driven by a decrease in changes related to
exchangeability and issuances of common stock.

Occupancy and Equipment

Occupancy and equipment expense increased by $6.7 million, or 4.7%, to $149.6 million for the year ended December 31, 2018 as compared to the year ended December 31, 2017. This increase was primarily driven by increases in software, occupancy, and maintenance contracts.

Fees to Related Parties



Fees to related parties increased by $4.3 million, or 27.5%, to $20.2 million
for the year ended December 31, 2018 as compared to the year ended December 31,
2017. Fees to related parties are allocations paid to Cantor for administrative
and support services (such as accounting, occupancy, and legal).

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Professional and Consulting Fees

Professional and consulting fees increased by $20.7 million, or 32.7%, to $84.1 million for the year ended December 31, 2018 as compared to the year ended December 31, 2017. This increase was primarily driven by an increase in consulting services in 2018.

Communications



Communications expense decreased by $1.4 million, or 1.1%, to $118.0 million for
the year ended December 31, 2018 as compared to the year ended December 31,
2017. As a percentage of total revenues, communications slightly decreased from
the prior year period.

Selling and Promotion

Selling and promotion expense increased by $6.9 million, or 11.0%, to $69.3 million for the year ended December 31, 2018 as compared to the year ended December 31, 2017. As a percentage of total revenues, selling and promotion remained relatively unchanged across the two periods.

Commissions and Floor Brokerage



Commissions and floor brokerage expense increased by $18.8 million, or 43.5%, to
$61.9 million for the year ended December 31, 2018 as compared to the year ended
December 31, 2017. This line item tends to move in line with brokerage revenues.

Interest Expense



Interest expense decreased by $35.2 million, or 45.8%, to $41.7 million for the
year ended December 31, 2018 as compared to the year ended December 31, 2017.
The decrease was primarily driven by lower interest expense on the $300.0
million 5.375% Senior Notes, and the $112.5 million 8.125% Senior Notes, both of
which were assumed by Newmark as part of the December 2017 Separation Agreement,
as well as lower interest expense on the $240.0 million 8.375% Senior Notes
which were repaid in July 2018. In addition, lower interest expense on the
$575.0 million Senior Term Loan, and the $400.0 million credit facility,
partially offset by an increase in interest expense on the $450.0 million 5.375%
Senior Notes due 2023 issued in July 2018.

Other Expenses



Other expenses decreased by $5.8 million, or 8.3%, to $64.3 million for the year
ended December 31, 2018 as compared to the year ended December 31, 2017, which
was primarily related to lower costs associated with acquisitions in 2018 and a
decrease in impairment charges and other provisions.

Other Income (Losses), Net

Gain (Loss) on Divestiture and Sale of Investments



We had no gains or losses from divestitures or sale of investments in the year
ended December 31, 2018. For the year ended December 31, 2017, there was a gain
of $0.6 million related to the sale of investments.

Gains (Losses) on Equity Method Investments



Gains (losses) on equity method investments increased by $2.8 million, or 59.4%,
to a gain of $7.4 million, for the year ended December 31, 2018 as compared to a
gain of $4.6 million for the year ended December 31, 2017. Gains (losses) on
equity method investments represent our pro-rata share of the net gains or
losses on investments over which we have significant influence but which we do
not control.

Other Income (Loss)

Other income (loss) increased by $24.6 million, or 95.1%, to $50.5 million for
the year ended December 31, 2018 as compared to the year ended December 31,
2017. The increase was primarily due to a gain of $37.6 million related to a
fair value adjustment on an investment held. This was partially offset by a
decrease related to the mark-to-market and/or hedging on the Nasdaq shares and a
decrease in other recoveries.

Provision (Benefit) for Income Taxes



Provision (benefit) for income taxes decreased by $16.7 million, or 17.9%, to
$76.1 million for the year ended December 31, 2018 as compared to the year ended
December 31, 2017. This decrease was primarily driven by the effect of the Tax
Act in 2017 related to the remeasurement of deferred tax assets and liabilities
and the one-time transition tax on accumulated foreign earnings partially offset
by GILTI. In general, our consolidated effective tax rate can vary from period
to period depending on, among other factors, the geographic and business mix of
our earnings.

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Net Income (Loss) From Continuing Operations Attributable to Noncontrolling Interest in Subsidiaries



Net income (loss) from continuing operations attributable to noncontrolling
interest in subsidiaries decreased by $6.2 million, or 17.1%, to $30.0 million,
for the year ended December 31, 2018 as compared to the year ended December 31,
2017.

Net Income (Loss) From Discontinued Operations Attributable to Noncontrolling Interest in Subsidiaries



Net income (loss) from discontinued operations attributable to noncontrolling
interest in subsidiaries increased by $58.3 million to $52.4 million, for the
year ended December 31, 2018 as compared to the year ended December 31, 2017.
This increase was primarily driven by an increase in earnings.

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QUARTERLY RESULTS OF OPERATIONS



The following table sets forth our unaudited quarterly results of operations for
the indicated periods (in thousands). Results of any period are not necessarily
indicative of results for a full year and may, in certain periods, be affected
by seasonal fluctuations in our business. Certain reclassifications have been
made to prior period amounts to conform to the current period's presentation.



                                   December      September        June        March 31,       December      September         June        March 31,
                                   31, 2019       30, 2019      30, 2019         2019        31, 20181      30, 20181      30, 20181        20181
Revenues:
Commissions                        $ 382,897     $  409,765     $ 422,974     $  430,182     $  372,370     $  352,292     $  378,709     $  408,151
Principal transactions                71,725         75,536        90,432         84,230         62,787         73,360         84,988         91,918
Fees from related parties              8,218          8,208         7,221          5,795          5,022          6,821          5,934          6,299
Data, software and post-trade         18,151         18,364        18,741         17,910         18,169         16,547         15,370         15,099
Interest income                        2,865          3,976         7,813          3,665          3,919          2,870          4,940          2,675
Other revenues                         3,300          5,288         4,006          2,969          4,084          3,752          1,102            632
Total revenues                       487,156        521,137       551,187        544,751        466,351        455,642        491,043        524,774
Expenses:
Compensation and employee
benefits                             271,296        278,544       290,071        288,000        249,951        221,575        252,250        277,847
Equity-based compensation and
allocations
  of net income to limited
partnership units
  and FPUs                            69,389         40,330        43,752         12,141         85,178         34,901         45,602         39,389
Total compensation and employee
benefits                             340,685        318,874       333,823        300,141        335,129        256,476        297,852        317,236
Occupancy and equipment               48,987         44,709        45,109         46,002         38,934         39,148         34,365         37,147
Fees to related parties                2,858          7,123         6,457

2,927 4,586 5,644 5,882 4,051 Professional and consulting fees 27,553 21,262 23,347


      20,005         23,865         22,329         20,001         17,908
Communications                        29,715         29,882        29,974         30,411         26,808         29,078         30,729         31,399
Selling and promotion                 21,432         20,320        21,491

18,402 19,112 16,146 17,855 16,225 Commissions and floor brokerage 16,377 15,831 16,791


      14,618         17,549         15,082         15,345         13,915
Interest expense                      15,636         15,258        14,985         13,198         11,615         10,722         10,028          9,368
Other expenses                        18,886         42,757        21,765         24,015         17,541         14,882         14,548         17,338
Total expenses                       522,129        516,016       513,742        469,719        495,139        409,507        446,605        464,587
Other income (losses), net:
Gain (loss) on divestiture and
sale of
  investments                            (14 )            -        (1,619 )       20,054              -              -              -              -

Gains (losses) on equity method


  investments                          1,064          1,530           738

783 2,415 1,327 1,011 2,624 Other income (loss)

                    9,462          2,095           194

21,202 2,453 15,123 1,481 31,411 Total other income (losses), net 10,512 3,625 (687 )

42,039 4,868 16,450 2,492 34,035 Income (loss) from operations before


  income taxes                       (24,461 )        8,746        36,758

117,071 (23,920 ) 62,585 46,930 94,222 Provision (benefit) for income taxes

                                  2,095          6,186        14,993

29,897 16,980 23,019 14,571 21,550 Consolidated net income (loss) from


  continuing operations              (26,556 )        2,560        21,765

87,174 (40,900 ) 39,566 32,359 72,672 Consolidated net income (loss) from


  discontinued operations, net
of tax                                     -              -             -              -         11,041        122,738         17,631         24,759

Consolidated net income (loss) (26,556 ) 2,560 21,765

87,174 (29,859 ) 162,304 49,990 97,431 Less: Net income (loss) from continuing


  operations attributable to
noncontrolling
  interest in subsidiaries           (10,313 )        6,089         8,154

25,306 (18,995 ) 7,956 12,358 28,674 Less: Net income (loss) from discontinued


  operations attributable to
noncontrolling
  interest in subsidiaries                 -              -             -              -          5,879         34,062          2,429          9,983
Net income (loss) available to
common
  stockholders                     $ (16,243 )   $   (3,529 )   $  13,611     $   61,868     $  (16,743 )   $  120,286     $   35,203     $   58,774

1 Financial results have been retrospectively adjusted as a result of the

Spin-Off to reflect Newmark through November 30, 2018 as discontinued

operations for all periods presented.


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The table below details our brokerage revenues by product category for the indicated periods (in thousands):





                                         December 31,       September 30,      June 30,      March 31,       December 31,       September 30,      June 30,      March 31,
                                             2019               2019             2019           2019             2018               2018             2018           2018
Brokerage revenue by product:
Rates                                   $      129,549     $       156,765     $ 152,959     $  155,611     $      128,874     $       121,984     $ 141,400     $  157,567
FX                                              80,369              86,492       101,899        101,558             94,706              96,988       102,307        102,255
Credit                                          70,438              72,382        78,166         85,727             67,484              67,111        75,526         82,050
Energy and commodities                          70,954              72,335        73,430         69,865             53,799              57,974        56,277         60,149
Equities, insurance, and other
  asset classes                                103,312              97,327       106,952        101,651             90,294              81,595        88,187         98,048
Total brokerage revenues                $      454,622     $       485,301

$ 513,406 $ 514,412 $ 435,157 $ 425,652 $ 463,697 $ 500,069 Brokerage revenue by


  product (percentage):
Rates                                             28.5 %              32.3 %        29.8 %         30.2 %             29.6 %              28.6 %        30.5 %         31.5 %
FX                                                17.7                17.8          19.8           19.7               21.8                22.8          22.1           20.5
Credit                                            15.5                14.9          15.2           16.7               15.5                15.8          16.3           16.4
Energy and commodities                            15.6                14.9          14.3           13.6               12.4                13.6          12.1           12.0

Equities, insurance, and other


  asset classes                                   22.7                20.1          20.9           19.8               20.7                19.2          19.0           19.6
Total brokerage revenues                         100.0 %             100.0 %       100.0 %        100.0 %            100.0 %             100.0 %       100.0 %        100.0 %
Brokerage revenue by type:
Voice/Hybrid                            $      410,332     $       436,841

$ 460,359 $ 455,582 $ 389,203 $ 382,272 $ 410,376 $ 446,802 Fully Electronic

                                44,290              48,460        53,047         58,830             45,954              43,380        53,321         53,267
Total brokerage revenues                $      454,622     $       485,301

$ 513,406 $ 514,412 $ 435,157 $ 425,652 $ 463,697 $ 500,069 Brokerage revenue by type

(percentage):


Voice/Hybrid                                      90.3 %              90.0 %        89.7 %         88.6 %             89.4 %              89.8 %        88.5 %         89.3 %
Fully Electronic                                   9.7                10.0          10.3           11.4               10.6                10.2          11.5           10.7
Total brokerage revenues                         100.0 %             100.0 %       100.0 %        100.0 %            100.0 %             100.0 %       100.0 %        100.0 %

LIQUIDITY AND CAPITAL RESOURCES

Balance Sheet



Our balance sheet and business model are not capital intensive. Our assets
consist largely of cash, collateralized and uncollateralized short-dated
receivables and less liquid assets needed to support our business. Longer-term
capital (equity and notes payable) is held to support the less liquid assets and
potential capital investment opportunities. Total assets as of December 31, 2019
were $3.9 billion, an increase of 14.1% as compared to December 31, 2018. The
increase in total assets was driven primarily by increases in Cash segregated
under regulatory requirements, Accrued commissions and other receivables, net
and less liquid assets, including ROU assets for leases. We maintain a
significant portion of our assets in Cash and cash equivalents and Securities
owned, with our liquidity (which we define as Cash and cash equivalents, Reverse
repurchase agreements, Marketable securities and Securities owned, less
Securities loaned and Repurchase agreements) as of December 31, 2019 of $473.2
million. See "Liquidity Analysis" below for a further discussion of our
liquidity. Our Securities owned were $57.5 million as of December 31, 2019,
compared to $58.4 million as of December 31, 2018. Our Marketable securities
decreased to $14.2 million as of December 31, 2019, compared to $32.1 million as
of December 31, 2018. We did not have any Reverse repurchase agreements as of
December 31, 2019 and December 31, 2018. We had Securities loaned of $13.9
million and no Repurchase agreements as of December 31, 2019. As of December 31,
2018, we had Securities loaned of $15.1 million and Repurchase agreements of
$1.0 million.

On March 19, 2018, we entered into the BGC Credit Agreement with Cantor. The BGC
Credit Agreement provides for each party and certain of its subsidiaries to
issue loans to the other party or any of its subsidiaries in the lender's
discretion in an aggregate principal amount up to $250.0 million outstanding at
any time. The BGC Credit Agreement replaced the previous Credit Facility between
BGC and an affiliate of Cantor, and was approved by the Audit Committee. On
August 6, 2018, the Company entered into an amendment to the BGC Credit
Agreement, which increased the aggregate principal amount that can be loaned to
the other party or any of its subsidiaries from $250.0 million to $400.0 million
that can be outstanding at any time. The BGC Credit Agreement will mature on the
earlier to occur of (a) March 19, 2020, after which the maturity date of the BGC
Credit Agreement will continue to be extended for successive one-year periods
unless prior written notice of non-extension is given by a lending party to a
borrowing party at least six months in advance of such renewal date and (b) the
termination of the BGC Credit Agreement by either party pursuant to its terms.
The outstanding amounts under the BGC Credit Agreement will bear interest for
any rate period at a per annum rate equal to the higher of BGC's or Cantor's
short-term borrowing rate in effect at such time plus 1.00%. As of December 31,
2019, there were no borrowings by BGC or Cantor outstanding under this
Agreement.

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As part of our cash management process, we may enter into tri-party reverse
repurchase agreements and other short-term investments, some of which may be
with Cantor. As of December 31, 2019 and 2018, there were no reverse repurchase
agreements outstanding.

Additionally, in August 2013, the Audit Committee authorized us to invest up to
$350 million in an asset-backed commercial paper program for which certain
Cantor entities serve as placement agent and referral agent. The program issues
short-term notes to money market investors and is expected to be used from time
to time as a liquidity management vehicle. The notes are backed by assets of
highly rated banks. We are entitled to invest in the program so long as the
program meets investment policy guidelines, including policies relating to
ratings. Cantor will earn a spread between the rate it receives from the
short-term note issuer and the rate it pays to us on any investments in this
program. This spread will be no greater than the spread earned by Cantor for
placement of any other commercial paper note in the program. As of December 31,
2019 and 2018, we had no investments in the program.

Funding



Our funding base consists of longer-term capital (equity and notes payable),
collateralized financings, shorter-term liabilities and accruals that are a
natural outgrowth of specific assets and/or our business model, such as matched
fails and accrued compensation. We have limited need for short-term unsecured
funding in our regulated entities for their brokerage businesses. Contingent
liquidity needs are largely limited to potential cash collateral that may be
needed to meet clearing bank, clearinghouse, and exchange margins and/or to fund
fails. Capital expenditures tend to be cash neutral and approximately in line
with depreciation. Current cash balances exceed our potential normal course
contingent liquidity needs. We believe that cash in and available to our largest
regulated entities, inclusive of financing provided by clearing banks and cash
segregated under regulatory requirements, is adequate for potential cash demands
of normal operations, such as margin or fail financing. We expect our operating
activities going forward to generate adequate cash flows to fund normal
operations, including any dividends paid pursuant to our dividend policy.
However, we continually evaluate opportunities for us to maximize our growth and
further enhance our strategic position, including, among other things,
acquisitions, strategic alliances and joint ventures potentially involving all
types and combinations of equity, debt and acquisition alternatives. As a
result, we may need to raise additional funds to:

  • increase the regulatory net capital necessary to support operations;


  • support continued growth in our businesses;

• effect acquisitions, strategic alliances, joint ventures and other


        transactions;


  • develop new or enhanced products, services and markets; and


  • respond to competitive pressures.


Acquisitions and financial reporting obligations related thereto may impact our
ability to access longer-term capital markets funding on a timely basis and may
necessitate greater short-term borrowings in the interim. This may impact our
credit rating or the interest rates on our debt. We may need to access
short-term capital sources to meet business needs from time to time, including,
but not limited to, conducting operations; hiring or retaining brokers,
salespeople, managers and other front-office personnel; financing acquisitions;
and providing liquidity, including in situations where we may not be able to
access the capital markets in a timely manner when desired by us. Accordingly,
we cannot guarantee that we will be able to obtain additional financing when
needed on terms that are acceptable to us, if at all.

As described earlier in this document, on November 30, 2018, we completed the
Spin-Off of Newmark. (See "Newmark IPO, Separation Transaction and Spin-Off"
above for more information). As set forth in the Separation and Distribution
Agreement, Newmark assumed certain BGC indebtedness and repaid such
indebtedness. (See "Notes Payable, Other and Short-term Borrowings" below for
more information).

On January 12, 2016, we completed the two-step GFI Merger. The GFI Merger
allowed BGC to acquire the remaining approximately 33% of the outstanding shares
of GFI common stock that BGC did not already own. Following the closing of the
GFI Merger, BGC and its affiliates owned 100% of the outstanding shares of GFI's
common stock.

As of December 31, 2019, our liquidity, which we define as Cash and cash
equivalents, Reverse repurchase agreements, Marketable securities and Securities
owned, less Securities loaned and Repurchase agreements, was $473.2 million. We
expect to use our financial resources to repay debt, profitably hire, make
accretive acquisitions, pay dividends, and/or repurchase shares and units of
BGC, all while maintaining or improving our investment-grade rating.

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Notes Payable, Other and Short-term Borrowings

Unsecured Senior Revolving Credit Agreement



On September 8, 2017, we entered into a committed unsecured senior revolving
credit agreement with Bank of America, N.A., as administrative agent, and a
syndicate of lenders. The revolving credit agreement provided for revolving
loans of up to $400.0 million. The maturity date of the facility was September
8, 2019. On November 22, 2017, the Company and Newmark entered into an amendment
to the unsecured senior revolving credit agreement. Pursuant to the amendment,
the then-outstanding borrowings of the Company under the revolving credit
facility were converted into the Converted Term Loan. There was no change in the
maturity date or interest rate. Effective December 13, 2017, Newmark assumed the
obligations of the Company as borrower under the Converted Term Loan. We
remained a borrower under, and retained access to, the revolving credit facility
for any future draws, subject to availability which increased as Newmark repaid
the Converted Term Loan. During the year ended December 31, 2018, Newmark repaid
the outstanding balance of the Converted Term Loan. During the year ended
December 31, 2018, we borrowed $195.0 million under the committed unsecured
senior revolving credit agreement and repaid the $195.0 million during the year.
Therefore, there were no borrowings outstanding as of December 31, 2018.

On November 28, 2018, we entered into the Revolving Credit Agreement which
replaced the existing committed unsecured senior revolving credit agreement. The
maturity date of the new Revolving Credit Agreement was November 28, 2020 and
the maximum revolving loan balance has been reduced from $400.0 million to
$350.0 million. Borrowings under this agreement bear interest at either LIBOR or
a defined base rate plus additional margin. On December 11, 2019, we entered
into an amendment to the new unsecured Revolving Credit Agreement. Pursuant to
the amendment, the maturity date was extended to February 26, 2021. There was no
change to the interest rate or the maximum revolving loan balance. On February
26, 2020, the Company entered into a second amendment to the unsecured Revolving
Credit Agreement, pursuant to which, the maturity date was extended by two years
to February 26, 2023. The size of the Revolving Credit Agreement, along with the
interest rate on the borrowings therefrom, remained unchanged. As of
December 31, 2019, there was $68.9 million of borrowings outstanding, net of
deferred financing costs of $1.1 million, under the new unsecured Revolving
Credit Agreement. The average interest rate on the outstanding borrowings was
3.88% for the year ended December 31, 2019.

Unsecured Senior Term Loan Credit Agreement



On September 8, 2017, we entered into the Term Loan. The Term Loan provided for
loans of up to $575.0 million. The maturity date of the Term Loan was September
8, 2019. On November 22, 2017, we and Newmark entered into an amendment to the
Term Loan. Pursuant to the Term Loan amendment and effective as of December 13,
2017, Newmark assumed the obligations of the Company as borrower under the Term
Loan. There was no change in the maturity date or interest rate. As of December
31, 2017, Newmark had $270.7 million borrowings outstanding under the Term Loan.
During the year ended December 31, 2018, Newmark repaid the outstanding balance
of $270.7 million at which point the facility was terminated. As of December 31,
2019 and 2018, there were no borrowings outstanding under the Term Loan.

8.125% Senior Notes



On June 26, 2012, we issued an aggregate of $112.5 million principal amount of
8.125% Senior Notes due 2042. The 8.125% Senior Notes were senior unsecured
obligations. The 8.125% Senior Notes were redeemable for cash, in whole or in
part, on or after June 26, 2017, at our option, at any time and from time to
time, until maturity at a redemption price equal to 100% of the principal amount
to be redeemed, plus accrued but unpaid interest on the principal amount being
redeemed to, but not including, the redemption date. The 8.125% Senior Notes
were listed on the New York Stock Exchange under the symbol "BGCA." We used the
proceeds to repay short-term borrowings under our unsecured revolving credit
facility and for general corporate purposes, including acquisitions. In
connection with the issuance of the 8.125% Senior Notes, the Company lent the
proceeds of the 8.125% Senior Notes to BGC U.S. OpCo, and BGC U.S. OpCo issued
the 2042 Promissory Note.

The initial carrying value of the 8.125% Senior Notes was $108.7 million, net of
debt issuance costs of $3.8 million. On December 13, 2017, Newmark OpCo assumed
all of the BGC U.S. OpCo's rights and obligations under the 2042 Promissory
Note. During the year ended December 31, 2018, Newmark repaid the Company in
full for the 2042 Promissory Note, and the Company subsequently repaid the
8.125% Senior Notes on September 5, 2018.

5.375% Senior Notes



On December 9, 2014, we issued an aggregate of $300.0 million principal amount
of 5.375% Senior Notes. The 5.375% Senior Notes were general senior unsecured
obligations of the Company. These Senior Notes bore interest at a rate of 5.375%
per year, payable in cash on June 9 and December 9 of each year, commencing June
9, 2015. The interest rate payable on the notes was subject to adjustments from
time to time based on the debt rating assigned by specified rating agencies to
the notes, as set forth in the Indenture. The 5.375% Senior Notes were scheduled
to mature on December 9, 2019. In connection with the issuance of the 5.375%
Senior Notes, we lent the proceeds of the 5.375% Senior Notes to BGC U.S. OpCo,
and BGC U.S. OpCo issued the 2019 Promissory Note. On December 13, 2017, Newmark
OpCo assumed all of BGC U.S. OpCo's rights and obligations under the 2019
Promissory Note. The initial carrying value of the 5.375% Senior Notes was
$295.1 million, net of the discount and debt issuance costs of $4.9 million.
During the year ended December 31, 2018, Newmark repaid the Company in full for
the 2019 Promissory Note, and the Company subsequently redeemed the 5.375%
Senior Notes on December 5, 2018.

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8.375% Senior Notes



As part of the GFI acquisition, we assumed $240.0 million in aggregate principal
amount of 8.375% Senior Notes. Interest on these notes was payable,
semi-annually in arrears on the 19th of January and July. On July 19, 2018, the
Company repaid the $240.0 million principal amount of its 8.375% Senior Notes
upon their maturity.

5.125% Senior Notes

On May 27, 2016, we issued an aggregate of $300.0 million principal amount of
5.125% Senior Notes. The 5.125% Senior Notes are general senior unsecured
obligations of the Company. The 5.125% Senior Notes bear interest at a rate of
5.125% per year, payable in cash on May 27 and November 27 of each year,
commencing November 27, 2016. The 5.125% Senior Notes will mature on May 27,
2021. The Company may redeem some or all of the notes at any time or from time
to time for cash at certain "make-whole" redemption prices (as set forth in the
Indenture). If a "Change of Control Triggering Event" (as defined in the
Indenture) occurs, holders may require the Company to purchase all or a portion
of its notes for cash at a price equal to 101% of the principal amount of the
notes to be purchased plus any accrued and unpaid interest to, but excluding,
the purchase date. Cantor purchased $15.0 million of such senior notes and still
holds such notes as of December 31, 2019.

The initial carrying value of the 5.125% Senior Notes was $295.8 million, net of
the discount and debt issuance costs of $4.2 million. The carrying value of the
5.125% Senior Notes as of December 31, 2019 was $298.7 million.

5.375% Senior Notes due 2023



On July 24, 2018, we issued an aggregate of $450.0 million principal amount of
5.375% Senior Notes due 2023. The 5.375% Senior Notes due 2023 are general
senior unsecured obligations of the Company. The 5.375% Senior Notes due 2023
bear interest at a rate of 5.375% per year, payable in cash on January 24 and
July 24 of each year, commencing January 24, 2019. The 5.375% Senior Notes due
2023 will mature on July 24, 2023. We may redeem some or all of the 5.375%
Senior Notes due 2023 at any time or from time to time for cash at certain
"make-whole" redemption prices (as set forth in the indenture related to the
5.375% Senior Notes due 2023). If a "Change of Control Triggering Event" (as
defined in the indenture related to the 5.375% Senior Notes due 2023) occurs,
holders may require the Company to purchase all or a portion of their notes for
cash at a price equal to 101% of the principal amount of the notes to be
purchased plus any accrued and unpaid interest to, but excluding, the purchase
date. The initial carrying value of the 5.375% Senior Notes due 2023 was $444.2
million, net of the discount and debt issuance costs of $5.8 million, of which
$0.3 million were underwriting fees paid to CF&Co and $41 thousand were
underwriting fees paid to CastleOak Securities, L.P. We also paid CF&Co an
advisory fee of $0.2 million in connection with the issuance. The issuance costs
are amortized as interest expense and the carrying value of the 5.375% Senior
Notes due 2023 will accrete up to the face amount over the term of the notes.
The carrying value of the 5.375% Senior Notes as of December 31, 2019 was $445.2
million.

On July 31, 2018, we filed a Registration Statement on Form S-4 pursuant to which, upon being declared effective by the SEC, the holders of the 5.375% Senior Notes due 2023, issued in a private placement on July 24, 2018, exchanged such notes for new registered notes with substantially identical terms.

3.750% Senior Notes



On September 27, 2019, we issued an aggregate of $300.0 million principal amount
of 3.750% Senior Notes. The 3.750% Senior Notes are general unsecured
obligations of the Company. The 3.750% Senior Notes bear interest at a rate of
3.750% per annum, payable on each April 1 and October 1, commencing April 1,
2020. The initial carrying value of the 3.750% Senior Notes was $296.1
million, net of discount and debt issuance costs of $3.9 million, of which $0.2
million are underwriting fees payable to CF&Co and $36 thousand are underwriting
fees payable to CastleOak Securities, L.P. The issuance costs will be amortized
as interest expense and the carrying value of the 3.750% Senior Notes will
accrete up to the face amount over the term of the notes. The carrying value of
the 3.750% Senior Notes was $296.1 million as of December 31, 2019.

On October 11, 2019, we filed a Registration Statement on Form S-4, which was
declared effective by the SEC on October 24, 2019. On October 28, 2019, BGC
launched an exchange offer in which holders of the 3.750% Senior Notes, issued
in a private placement on September 27, 2019 may exchange such notes for new
registered notes with substantially identical terms. The exchange offer closed
on December 9, 2019 at which point the initial 3.750% Senior Notes were
exchanged for new registered notes with substantially identical terms.

Collateralized Borrowings



On March 13, 2015, we entered into a secured loan arrangement of $28.2 million
under which it pledged certain fixed assets as security for a loan. This
arrangement incurred interest at a fixed rate of 3.70% per year and matured on
March 13, 2019; therefore, there were no borrowings outstanding as of
December 31, 2019. As of December 31, 2018, we had $1.8 million outstanding
related to this secured loan agreement. The book value of the fixed assets
pledged as of December 31, 2018 was $0.1 million.

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On May 31, 2017, we entered into a secured loan arrangement of $29.9 million
under which it pledged certain fixed assets as security for a loan. This
arrangement incurs interest at a fixed rate of 3.44% and matures on May 31,
2021. As of December 31, 2019 and 2018, we had $11.7 million and $19.2 million,
respectively, outstanding related to this secured loan arrangement. The book
value of the fixed assets pledged as of December 31, 2019 was $2.3 million. The
book value of the fixed assets pledged as of December 31, 2018 was $6.5 million.

On April 8, 2019, we entered into a secured loan arrangement of $15.0 million,
under which it pledged certain fixed assets as security for a loan. This
arrangement incurs interest at a fixed rate of 3.77% and matures on April 8,
2023. As of December 31, 2019, we had $13.2 million outstanding related to this
secured loan arrangement. The net book value of the fixed assets pledged as of
December 31, 2019 was $8.1 million. Also, on April 19, 2019, we entered into a
secured loan arrangement of $10.0 million, under which it pledged certain fixed
assets as security for a loan. This arrangement incurs interest at a fixed rate
of 3.89% and matures on April 19, 2023. As of December 31, 2019, we had $8.8
million outstanding related to this secured loan arrangement. The book value of
the fixed assets pledged as of December 31, 2019 was $5.7 million.

Short-term Borrowings



On August 22, 2017, we entered into a committed unsecured loan agreement with
Itau Unibanco S.A. The credit agreement provides for short-term loans of up to
$5.0 million (BRL 20.0 million). The maturity date of the agreement is May 20,
2020. Borrowings under this facility bear interest at the Brazilian Interbank
offering rate plus 3.30%. As of December 31, 2019, there were $5.0 million (BRL
20.0 million) of borrowings outstanding under the facility. As of December 31,
2019, the interest rate was 7.8%.

On August 23, 2017, we entered into a committed unsecured credit agreement with
Itau Unibanco S.A. The credit agreement provides for an intra-day overdraft
credit line up to $12.4 million (BRL 50.0 million). The maturity date of the
agreement is March 13, 2020. This facility bears a fee of 1.00% per year. As of
December 31, 2019 and 2018, there were no borrowings outstanding under this
facility.

CREDIT RATINGS

As of December 31, 2019, our public long-term credit ratings and associated outlooks are as follows:





                     Rating   Outlook
Fitch Ratings Inc.    BBB-    Stable
Standard & Poor's     BBB-    Stable




Credit ratings and associated outlooks are influenced by a number of factors,
including, but not limited to: operating environment, earnings and profitability
trends, the prudence of funding and liquidity management practices, balance
sheet size/composition and resulting leverage, cash flow coverage of interest,
composition and size of the capital base, available liquidity, outstanding
borrowing levels and the firm's competitive position in the industry. A credit
rating and/or the associated outlook can be revised upward or downward at any
time by a rating agency if such rating agency decides that circumstances warrant
such a change. Any reduction in our credit ratings and/or the associated
outlooks could adversely affect the availability of debt financing on terms
acceptable to us, as well as the cost and other terms upon which we are able to
obtain any such financing. In addition, credit ratings and associated outlooks
may be important to customers or counterparties when we compete in certain
markets and when we seek to engage in certain transactions. In connection with
certain agreements, we may be required to provide additional collateral in the
event of a credit ratings downgrade.

LIQUIDITY ANALYSIS

We consider our liquidity to be comprised of the sum of Cash and cash equivalents, Reverse repurchase agreements, Marketable securities, and Securities owned, less Securities loaned and Repurchase agreements. The discussion below describes the key components of our liquidity analysis, including earnings, dividends and distributions, net investing and funding activities, including repurchases and redemptions of BGC Class A common stock and partnership units, security settlements, changes in securities held and marketable securities, and changes in our working capital.

We consider the following in analyzing changes in our liquidity.



Our liquidity analysis includes a comparison of our Consolidated net income
(loss) adjusted for Consolidated net income from discontinued operations, net of
tax and certain non-cash items (e.g., Equity-based compensation) as presented on
the cash flow statement. Dividends and distributions are payments made to our
holders of common shares and limited partnership interests and are related to
earnings from prior periods. These timing differences will impact our cash flows
in a given period.

Our investing and funding activities represent a combination of our capital
raising activities, including short-term borrowings and repayments, issuances of
shares under our CEO Program (net), BGC Class A common stock repurchases and
partnership unit redemptions, purchases and sales of securities, dispositions,
and other investments (e.g. acquisitions, forgivable loans to new brokers and
capital expenditures-all net of depreciation and amortization).

Our securities settlement activities primarily represent deposits with clearing
organizations. In addition, when advantageous, we may elect to facilitate the
settlement of matched principal transactions by funding failed trades, which
results in a temporary secured use of cash and is economically beneficial to us.

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Other changes in working capital represent changes primarily in receivables and payables and accrued liabilities that impact our liquidity.



Changes in Reverse repurchase agreements, Securities owned, and Marketable
securities may result from additional cash investments or sales, which will be
offset by a corresponding change in Cash and cash equivalents and, accordingly,
will not result in a change in our liquidity. Conversely, changes in the market
value of such securities are reflected in our earnings or other comprehensive
income (loss) and will result in changes in our liquidity.

At December 31, 2019, the Company completed the calculation of the one-time
transition tax on the deemed repatriation of foreign subsidiaries' earnings
pursuant to the Tax Act and previously recorded a net cumulative tax expense of
$25.0 million, net of foreign tax credits. An installment election can be made
to pay the taxes over eight years with 40% paid in equal installments over the
first five years and the remaining 60% to be paid in installments of 15%, 20%
and 25% in years six, seven and eight, respectively. The cumulative remaining
balance as of December 31, 2019 is $19.4 million.

As of December 31, 2019, the Company had $415.4 million of Cash and cash equivalents, and included in this amount was $286.7 million of Cash and cash equivalents held by foreign subsidiaries.

Discussion of the year ended December 31, 2019



The table below presents our Liquidity Analysis as of December 31, 2019 and
December 31, 2018:



                             December 31, 2019       December 31, 2018
(in millions)
Cash and cash equivalents   $             415.4     $             336.5
Securities owned                           57.5                    58.4
Marketable securities1                      0.3                    17.0
Repurchase agreements                         -                    (1.0 )
Total                       $             473.2     $             410.9




1   As of December 31, 2019 and 2018, $13.9 million and $15.1 million,

respectively, of Marketable securities on our balance sheet had been lent in

a Securities loaned transaction and, therefore, are not included in this

Liquidity Analysis.




The $62.3 million increase in our liquidity position from $410.9 million as of
December 31, 2018 to $473.2 million as of December 31, 2019 was primarily
related to the issuance of $300.0 million of the 3.750% Senior Notes, increased
collateralized and other net borrowings of $82.6 million, partially offset by
the financing of acquisitions, ordinary movements in working capital, and our
continued investment in new revenue generating hires.

Discussion of the year ended December 31, 2018



The table below presents our Liquidity Analysis as of December 31, 2018 and
December 31, 2017:



                             December 31, 2018       December 31, 2017
(in millions)
Cash and cash equivalents   $             336.5     $             513.3
Securities owned                           58.4                    33.0
Marketable securities1                     17.0                     5.8
Repurchase agreements                      (1.0 )                     -
Total                       $             410.9     $             552.1




1   As of December 31, 2018 and 2017, $15.1 million and $144.7 million,

respectively, of Marketable securities on our balance sheet had been lent in

a Securities loaned transaction and therefore are not included in this

Liquidity Analysis.




The $141.3 million decrease in our liquidity position from $552.1 million as of
December 31, 2017 to $410.9 million as of December 31, 2018 was primarily
related to our purchase of exchangeable limited partnership units in Newmark
Holdings in the Investment in Newmark, cash paid with respect to various
acquisitions throughout the year, our continued investment in revenue generating
hires, and ordinary movements in working capital.

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CLEARING CAPITAL



In November 2008, we entered into a clearing capital agreement with Cantor to
clear U.S. Treasury and U.S. government agency securities transactions on our
behalf. Pursuant to the terms of this agreement, so long as Cantor is providing
clearing services to us, Cantor shall be entitled to request from us, and we
shall post as soon as practicable, cash or other property acceptable to Cantor
in the amount reasonably requested by Cantor under the clearing capital
agreement. Cantor had not requested any cash or other property from us as
collateral as of December 31, 2019.

REGULATORY REQUIREMENTS



Our liquidity and available cash resources are restricted by regulatory
requirements of our operating subsidiaries. Many of these regulators, including
U.S. and non-U.S. government agencies and self-regulatory organizations, as well
as state securities commissions in the U.S., are empowered to conduct
administrative proceedings that can result in civil and criminal judgments,
settlements, fines, penalties, injunctions, enhanced oversight, remediation, or
other relief.

In addition, self-regulatory organizations, such as the FINRA and the NFA, along
with statutory bodies such as the FCA, the SEC, and the CFTC require strict
compliance with their rules and regulations. The requirements imposed by
regulators are designed to ensure the integrity of the financial markets and to
protect customers and other third parties who deal with broker-dealers and are
not designed to specifically protect stockholders. These regulations often serve
to limit our activities, including through net capital, customer protection and
market conduct requirements.

The final phase of Basel III (unofficially called "Basel IV") is a global
prudential regulatory standard designed to make banks more resilient and
increase confidence in the banking system. Its wide scope includes reviewing
market, credit and operational risk along with targeted changes to leverage
ratios. Basel IV includes updates to the calculation of bank capital
requirements with the aim of making outcomes more comparable across banks
globally. Most of the requirements are expected to be implemented by national
and regional authorities by around 2022. The adoption of these proposed rules
could restrict the ability of our large bank and broker-dealer customers to
operate trading businesses and to maintain current capital market exposures
under the present structure of their balance sheets, and will cause these
entities to need to raise additional capital in order to stay active in our
marketplaces.

The FCA is the relevant statutory regulator in the U.K. The FCA's objectives are
to protect customers, maintain the stability of the financial services industry
and promote competition between financial services providers. It has broad
rule-making, investigative and enforcement powers derived from the Financial
Services and Markets Act 2000 and subsequent and derivative legislation and
regulations.

In addition, the majority of our other foreign subsidiaries are subject to
similar regulation by the relevant authorities in the countries in which they do
business. Certain other of our foreign subsidiaries are required to maintain
non-U.S. net capital requirements. For example, in Hong Kong, BGC Securities
(Hong Kong), LLC, GFI (HK) Securities LLC and Sunrise Broker (Hong Kong) Limited
are regulated by the Securities and Futures Commission. BGC Capital Markets
(Hong Kong), Limited and GFI (HK) Brokers Ltd are regulated by The Hong Kong
Monetary Authority. All are subject to Hong Kong net capital requirements. In
France, Aurel BGC and BGC France Holdings; in Australia, BGC Partners
(Australia) Pty Limited, BGC (Securities) Pty Limited and GFI Australia Pty
Ltd.; in Japan, BGC Shoken Kaisha Limited's Tokyo branch and BGC Capital Markets
Japan LLC's Tokyo Branch; in Singapore, BGC Partners (Singapore) Limited, and
GFI Group Pte Ltd; in Korea, BGC Capital Markets & Foreign Exchange Broker
(Korea) Limited and GFI Korea Money Brokerage Limited; and in Turkey, BGC
Partners Menkul Degerler AS, all have net capital requirements imposed upon them
by local regulators. In addition, the LCH (LIFFE/LME) clearing organization, of
which BGC Brokers L.P. is a member, also imposes minimum capital requirements.
In Latin America, BGC Liquidez Distribuidora De Titulos E Valores Mobiliarios
Ltda. (Brazil) has net capital requirements imposed upon it by local regulators.

These subsidiaries may also be prohibited from repaying the borrowings of their
parents or affiliates, paying cash dividends, making loans to their parent or
affiliates or otherwise entering into transactions, in each case, that result in
a significant reduction in their regulatory capital position without prior
notification or approval from their principal regulator. See Note 22-"Regulatory
Requirements" to our consolidated financial statements for further details on
our regulatory requirements.

As of December 31, 2019, $561.9 million of net assets were held by regulated subsidiaries. As of December 31, 2019, these subsidiaries had aggregate regulatory net capital, as defined, in excess of the aggregate regulatory requirements, as defined, of $291.2 million.



In April 2013, the Board and Audit Committee authorized management to enter into
indemnification agreements with Cantor and its affiliates with respect to the
provision of any guarantees provided by Cantor and its affiliates from time to
time as required by regulators. These services may be provided from time to time
at a reasonable and customary fee.

BGC Derivative Markets and GFI Swaps Exchange, our subsidiaries, began operating
as SEFs on October 2, 2013. Both BGC Derivative Markets and GFI Swaps Exchange
received permanent registration approval from the CFTC as SEFs on January 22,
2016. Mandatory Dodd-Frank Act compliant execution on SEFs by eligible U.S.
persons commenced in February 2014 for "made available to trade" products, and a
wide range of other rules relating to the execution and clearing of derivative
products have been finalized with implementation periods in 2016 and beyond. We
also own ELX, which became a dormant contract market on July 1, 2017.

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Much of our global derivatives volumes continue to be executed by non-U.S. based
clients outside the U.S. and subject to local prudential regulations. As such,
we will continue to operate a number of EU regulated venues in accordance with
EU directives and licensed by the FCA and other EU-based national Competent
Authorities. These venues are also operated for non-derivative instruments for
these clients. MiFID II was published by the European Securities and Markets
Authority in September 2015, and implemented in January 2018 and introduced
important infrastructural changes.

MiFID II requires a significant part of the market in these instruments to trade
on trading venues subject to transparency regimes, not only in pre- and
post-trade prices, but also in fee structures and access. In addition, it has
impacted a number of key areas, including corporate governance, transaction
reporting, pre- and post-trade transparency, technology synchronization, best
execution and investor protection.

MiFID II is intended to help improve the functioning of the EU single market by
achieving a greater consistency of regulatory standards. By design, therefore,
it is intended that EU member states should have very similar regulatory regimes
in relation to the matters addressed to MiFID. MiFID II has also introduced a
new regulated execution venue category known as an OTF that captures much of the
Voice-and Hybrid-oriented trading in EU. Much of our existing EU derivatives and
fixed income execution business now take place on OTFs. Brexit may impact future
market structures and MiFID II rulemaking and implementation due to potential
changes in mutual passporting between the U.K. and EU member states.

In addition, the GDPR came into effect in the EU on May 25, 2018 and creates new
compliance obligations in relation to personal data. The GDPR may affect our
practices, and will increase financial penalties for non-compliance
significantly.

In September 2019, two of the Company's subsidiaries, BGC Financial L.P. and GFI
Group Inc., settled investigations conducted jointly by the CFTC and the NYAG.
The CFTC and NYAG alleged that, in 2014 and 2015, certain emerging markets FX
options (EFX options) brokers in the U.S. misrepresented that certain prices
posted to their electronic platform were immediately executable when in fact
they were not and that such brokers had communicated that transactions had been
matched when they had not. On October 9, 2019, the Company paid an aggregate of
$25.0 million in connection with the settlements and agreed to a monitor for two
years to assess regulatory compliance. The NYAG settlements include a
non-prosecution agreement, and there was no criminal penalty from either agency.

See "Regulation" included in Part I, Item 1 of this Annual Report on Form 10-K for additional information related to our regulatory environment.

EQUITY

Class A Common Stock



Changes in shares of the Company's Class A common stock outstanding were as
follows (in thousands):



                                                            Year Ended December 31,
                                                            2019                2018
Shares outstanding at beginning of period                     291,475

256,968


Share issuances:
Redemption/exchanges of limited partnership
interests¹                                                     15,008

18,288


Issuance of Class A common stock for general
corporate purposes                                                  -

24,924


Deferred stock awards                                               -

979


Vesting of restricted stock units (RSUs)                          435

528


Acquisitions                                                    1,039

1,744


Other issuances of Class A common stock                           213

101


Exchange from Class A to Class B common stock                       -            (11,036 )
Treasury stock repurchases                                       (233 )             (789 )
Forfeitures of restricted Class A common stock                    (22 )             (232 )
Shares outstanding at end of period                           307,915            291,475

1 Included in redemption/exchanges of limited partnership interests for the

year ended December 31, 2019, are 10.1 million shares of BGC Class A common

stock granted in connection with the cancellation of 11.5 million LPUs.

Included in redemption/exchanges of limited partnership interests for the

year ended December 31, 2018, are 6.8 million shares of BGC Class A common


    stock granted in connection with the cancellation of 7.6 million LPUs.
    Because LPUs are included in the Company's fully diluted share count, if
    dilutive, redemption/exchange in connection with the issuance of Class A

common shares would not impact the fully diluted number of shares and units


    outstanding.


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Class B Common Stock



On November 23, 2018, pursuant to the Exchange Agreement, BGC issued 10,323,366
shares of BGC Class B common stock to Cantor and 712,907 shares of BGC Class B
common stock to CFGM, an affiliate of Cantor, in each case in exchange for
shares of BGC Class A common stock from Cantor and CFGM, respectively, on a
one-to-one basis pursuant to Cantor's and CFGM's right to exchange such shares
under the Exchange Agreement. Pursuant to the Exchange Agreement, no additional
consideration was paid to BGC by Cantor or CFGM for the Class B Issuance. The
Class B Issuance was exempt from registration pursuant to Section 3(a)(9) of the
Securities Act.

The Company did not issue any shares of BGC Class B common stock during the year
ended December 31, 2019. As of December 31, 2019 and 2018, there were 45,884,380
shares of BGC Class B common stock outstanding.

Unit Redemptions and Share Repurchase Program

The Board and Audit Committee have authorized repurchases of BGC Class A common
stock and redemptions of limited partnership interests or other equity interests
in our subsidiaries. On August 1, 2018, the Company's Board and Audit Committee
increased the Company's share repurchase and unit redemption authorization to
$300.0 million, which may include purchases from Cantor, its partners or
employees or other affiliated persons or entities. As of December 31, 2019, the
Company had $256.7 million remaining from its share repurchase and unit
redemption authorization. From time to time, the Company may actively continue
to repurchase shares and/or redeem units.

The table below represents the units redeemed and/or shares repurchased for cash
and does not include units redeemed/cancelled in connection with the grant of
shares of BGC Class A common stock nor the limited partnership interests
exchanged for shares of BGC Class A common stock. The gross unit redemptions and
share repurchases of BGC Class A common stock during the year ended December 31,
2019 were as follows (in thousands, except weighted-average price data):



                                                                                          Approximate
                                                                                         Dollar Value
                                                Total Number                             of Units and
                                                  of Units           Weighted-          Shares That May
                                                  Redeemed         Average Price       Yet Be Redeemed/
                                                  or Shares        Paid per Unit           Purchased
Period                                           Repurchased         or Share          Under the Program
Redemptions1
January 1, 2019-March 31, 2019                          1,203     $

6.00

April 1, 2019-June 30, 2019                                97

5.45

July 1, 2019-September 30, 2019                            73

5.24

October 1, 2019-December 31, 2019                          35

5.57


Total Redemptions                                       1,408     $

5.91

Repurchases2


January 1, 2019-March 31, 2019                            233     $

5.30

April 1, 2019-June 30, 2019                                 -

July 1, 2019-September 30, 2019                             -

October 1, 2019-December 31, 2019                           -


Total Repurchases                                         233     $

5.30


Total Redemptions and Repurchases                       1,641     $          5.82     $           256,691

1 During the year ended December 31, 2019, the Company redeemed 1.4 million

LPUs at an aggregate redemption price of $8.0 million for a weighted-average

price of $5.92 per unit and 0.1 million FPUs at an aggregate redemption price

of $0.3 million for a weighted-average price of $5.64 per unit. During the

year ended December 31, 2018, the Company redeemed approximately 9.2 million

LPUs at an aggregate redemption price of approximately $116.5 million for a

weighted-average price of $12.61 per unit and approximately 0.1 million FPUs

at an aggregate redemption price of approximately $1.4 million for a

weighted-average price of $12.86 per unit. The table above does not include

units redeemed/cancelled in connection with the grant of 10.1 million and 6.8

million shares of BGC Class A common stock during the years ended December

31, 2019 and 2018, respectively, nor the limited partnership interests

exchanged for 4.4 million and 2.6 million shares of BGC Class A common stock

during the years ended December 31, 2019 and 2018, respectively.

2 During the year ended December 31, 2019, the Company repurchased 0.2 million

shares of BGC Class A common stock at an aggregate price of $1.2 million for

a weighted-average price of $5.30 per share. During the year ended December

31, 2018, the Company repurchased approximately 0.8 million shares of BGC

Class A common stock at an aggregate price of approximately $10.4 million for

a weighted-average price of $13.23 per share.




Following the Spin-Off, external data providers have restated the historical
prices of BGC Class A common stock (BGCP). As such, the nominal prices listed in
the footnotes above may not match the historical prices listed on such data
services following the Spin-Off.

                                      104



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The weighted-average share counts from continuing operations, including
securities that were anti-dilutive for our earnings per share calculations, for
the three months and year ended December 31, 2019 were as follows (in
thousands):



                                   Three
                                Months Ended        Year Ended
                                December 31,       December 31,
                                    2019               2019
Common stock outstanding1             351,431            344,332
Partnership units2                    178,343            178,813
RSUs (Treasury stock method)            1,204                 38
Other                                   1,039              1,367
Total3                                532,017            524,550




1   Common stock consisted of Class A shares, Class B shares and contingent

shares for which all necessary conditions have been satisfied except for the

passage of time. For the quarter ended December 31, 2019, the

weighted-average number of Class A shares was 305.5 million and Class B

shares was 45.9 million. For the year ended December 31, 2019, the

weighted-average number of Class A shares was 298.4 and Class B shares was

45.9 million.

2 Partnership units collectively include FPUs, LPUs, and Cantor units (see Note

2-"Limited Partnership Interests in BGC Holdings and Newmark Holdings" to our

consolidated financial statements in Part II, Item 8 of this Annual Report on

Form 10-K for more information).

3 Given the net loss during the quarter ended December 31, 2019, approximately

180.8 million potentially dilutive securities were not included in the

computation of fully diluted earnings per share because their effect would

have been anti-dilutive. For the year ended December 31, 2019, approximately

0.9 million potentially dilutive securities were not included in the

computation of fully diluted earnings per share because their effect would

have been anti-dilutive. Anti-dilutive securities for the year ended December

31, 2019 included, on a weighted-average basis, approximately 0.9 million

RSUs. As of December 31, 2019, approximately 15.8 million shares of

contingent Class A common stock and LPUs were excluded from fully diluted EPS

computations because the conditions for issuance had not been met by the end

of the period. The contingent Class A common stock is recorded as a liability

and included in "Accounts payable, accrued and other liabilities" in our


    consolidated statement of financial condition as of December 31, 2019.




The fully diluted period-end spot share count was as follows (in thousands):



                                   As of
                                December 31,
                                    2019
Common stock outstanding              353,799
Partnership units                     172,060
RSUs (Treasury stock method)            1,204
Other                                   3,308
Total                                 530,371




On June 5, 2015, we entered into the Exchange Agreement with Cantor providing
Cantor, CFGM and other Cantor affiliates entitled to hold BGC Class B common
stock the right to exchange from time to time, on a one-to-one basis, subject to
adjustment, up to an aggregate of 34,649,693 shares of BGC Class A common stock
now owned or subsequently acquired by such Cantor entities for up to an
aggregate of 34,649,693 shares of BGC Class B common stock. Such shares of BGC
Class B common stock, which currently can be acquired upon the exchange of
Cantor units owned in BGC Holdings, are already included in our fully diluted
share count and will not increase Cantor's current maximum potential voting
power in the common equity. The Exchange Agreement enabled the Cantor entities
to acquire the same number of shares of BGC Class B common stock that they were
already entitled to acquire without having to exchange its Cantor units in BGC
Holdings. The Audit Committee and Board have determined that it was in the best
interests of us and our stockholders to approve the Exchange Agreement because
it will help ensure that Cantor retains its Cantor units in BGC Holdings, which
is the same partnership in which our partner employees participate, thus
continuing to align the interests of Cantor with those of the partner employees.
On November 23, 2018, in the Class B Issuance, BGC issued 10,323,366 shares of
BGC Class B common stock to Cantor and 712,907 shares of BGC Class B common
stock to CFGM, an affiliate of Cantor, in each case in exchange for shares of
BGC Class A common stock from Cantor and CFGM, respectively, on a one-to-one
basis pursuant to the Exchange Agreement. Pursuant to the Exchange Agreement, no
additional consideration was paid to BGC by Cantor or CFGM for the Class B
Issuance. The Class B issuance was exempt from the Securities Act. Following
this exchange, Cantor and its affiliates only have the right to exchange under
the Exchange Agreement up to an aggregate of 23,613,420 shares of BGC Class A
common stock, now owned or subsequently acquired, or its Cantor units in BGC
Holdings, into shares of BGC Class B common stock. As of December 31, 2019,
Cantor and CFGM do not own any shares of BGC Class A common stock.

We and Cantor have agreed that any shares of BGC Class B common stock issued in
connection with the Exchange Agreement would be deducted from the aggregate
number of shares of BGC Class B common stock that may be issued to the Cantor
entities upon exchange of Cantor units in BGC Holdings. Accordingly, the Cantor
entities will not be entitled to receive any more shares of BGC Class B Stock
under this agreement than they were previously eligible to receive upon exchange
of Cantor units.

                                      105


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On November 4, 2015, partners of BGC Holdings created five new classes of
non-distributing partnership units (collectively with the NPSUs, "N Units").
These new N Units carry the same name as the underlying unit with the insertion
of an additional "N" to designate them as the N Unit type and are designated as
NREUs, NPREUs, NLPUs, NPLPUs and NPPSUs. The N Units are not entitled to
participate in partnership distributions, will not be allocated any items of
profit or loss and may not be made exchangeable into shares of BGC Class A
common stock. The Eleventh Amendment was approved by the Audit Committee and by
the Board.

Subject to the approval of the Compensation Committee or its designee, certain N
Units may be converted into the underlying unit type (i.e. an NREU will be
converted into an REU) and will then participate in partnership distributions,
subject to terms and conditions determined by the general partner of BGC
Holdings in its sole discretion, including that the recipient continue to
provide substantial services to the Company and comply with his or her
partnership obligations. Such N Units are not included in the fully diluted
share count.

On December 14, 2016, partners of BGC Holdings amended certain terms and
conditions of the partnership's N Units in order to provide flexibility to the
Company and the Partnership in using such N Units in connection with
compensation arrangements and practices. The amendment provides for a minimum
$5 million gross revenue requirement in a given quarter as a condition for an N
Unit to be replaced by another type of partnership unit in accordance with the
Partnership Agreement and the grant documentation. The amendment was approved by
the Audit Committee.

On December 13, 2017, the Amended and Restated BGC Holdings Partnership
Agreement was amended and restated a second time to include prior standalone
amendments and to make certain other changes related to the Separation. The
Second Amended and Restated BGC Holdings Partnership Agreement, among other
things, reflects changes resulting from the division in the Separation of BGC
Holdings into BGC Holdings and Newmark Holdings, including:

• an apportionment of the existing economic attributes (including, among

others, capital accounts and post-termination payments) of each BGC

Holdings limited partnership interests outstanding immediately prior to

the Separation between such Legacy BGC Holdings Unit and the fraction of a

Newmark Holdings LPU issued in the Separation in respect of such Legacy

BGC Holdings Unit, based on the relative value of BGC and Newmark as of


        after the Newmark IPO;




    •   an adjustment of the exchange mechanism between the Newmark IPO and the

Distribution so that one exchangeable BGC Holdings unit together with a

number of exchangeable Newmark Holdings units equal to 0.4545 divided by

the Newmark Holdings Exchange Ratio as of such time, must be exchanged in


        order to receive one share of BGC Class A common stock; and




    •   a right of the employer of a partner (whether it be Newmark or BGC) to

determine whether to grant exchangeability with respect to Legacy BGC

Holdings Units or Legacy Newmark Holdings Units held by such partner.




The Second Amended and Restated BGC Holdings Partnership Agreement also removes
certain classes of BGC Holdings units that are no longer outstanding, and
permits the general partner of BGC Holdings to determine the total number of
authorized BGC Holdings units. The Second Amended and Restated BGC Holdings
Limited Partnership Agreement was approved by the Audit Committee.

Registration Statements



We currently have in place an effective equity shelf registration statement on
Form S-3 filed on March 9, 2018 with respect to the issuance and sale of up to
an aggregate of $300.0 million of shares of BGC Class A common stock from time
to time on a delayed or continuous basis. On March 9, 2018, we entered into the
March 2018 Sales Agreement, pursuant to which we may offer and sell up to an
aggregate of $300.0 million of shares of BGC Class A common stock. Proceeds from
shares of BGC Class A common stock sold under this CEO Program Sales Agreement
may be used for redemptions of limited partnership interests in BGC Holdings, as
well as for general corporate purposes, including acquisitions and the repayment
of debt. CF&Co is a wholly owned subsidiary of Cantor and an affiliate of us.
Under this Sales Agreement, we have agreed to pay CF&Co 2% of the gross proceeds
from the sale of shares. For additional information on the Company's CEO Program
sales agreements, see Note 14-"Related Party Transactions."

As of December 31, 2019, we have issued and sold 17,401,431 shares of BGC Class
A common stock (or $209.8 million) under the March 2018 Sales Agreement. As of
December 31, 2017 and March 31, 2018, we had sold all 20 million shares of BGC
Class A common stock pursuant to each of the November 2014 Sales Agreement and
April 2017 Sales Agreement. We intend to use the net proceeds of any shares of
BGC Class A common stock sold for general corporate purposes for potential
acquisitions, redemptions of LPUs and FPUs in BGC Holdings and repurchases of
shares of BGC Class A common stock from partners, executive officers and other
employees of ours or our subsidiaries and of Cantor and its affiliates. Certain
of such partners will be expected to use the proceeds from such sales to repay
outstanding loans issued by, or credit enhanced by, Cantor, or BGC Holdings. In
addition to general corporate purposes, these sales along with our share
repurchase authorization are designed as a planning device in order to
facilitate the redemption process. Going forward, we may redeem units and reduce
our fully diluted share count under our repurchase authorization or later sell
shares of BGC Class A common stock under the March 2018 Sales Agreement.

                                      106



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Further, we have an effective registration statement on Form S-4 filed on
September 3, 2010, with respect to the offer and sale of up to 20 million shares
of BGC Class A common stock from time to time in connection with business
combination transactions, including acquisitions of other businesses, assets,
properties or securities. As of December 31, 2019, we have issued an aggregate
of 13.8 million shares of BGC Class A common stock under this Form S-4
registration statement. Additionally, on September 13, 2019, we filed a
registration statement on Form S-4, with respect to the offer and sale of up to
20 million shares of Class A common stock from time to time in connection with
business combination transactions, including acquisitions of other businesses,
assets, properties or securities. As of December 31, 2019, we have not issued
any shares of BGC Class A common stock under this Form S-4 registration
statement. We also have an effective shelf registration statement on Form S-3
pursuant to which we can offer and sell up to 10 million shares of BGC Class A
common stock under the BGC Partners, Inc. Dividend Reinvestment and Stock
Purchase Plan. As of December 31, 2019, we have issued approximately 0.6 million
shares of BGC Class A common stock under the Dividend Reinvestment and Stock
Purchase Plan.

The Compensation Committee may grant stock options, stock appreciation rights,
deferred stock such as RSUs, bonus stock, performance awards, dividend
equivalents and other equity-based awards, including to provide exchange rights
for shares of BGC Class A common stock upon exchange of LPUs. On June 22, 2016,
at our Annual Meeting of Stockholders, our stockholders approved our Equity Plan
to increase from 350 million to 400 million the aggregate number of shares of
BGC Class A common stock that may be delivered or cash-settled pursuant to
awards granted during the life of the Equity Plan. As of December 31, 2019, the
limit on the aggregate number of shares authorized to be delivered allowed for
the grant of future awards relating to 137.7 million shares of BGC Class A
common stock.

On July 31, 2018, we filed a registration statement on Form S-4 pursuant to which the holders of the 5.375% Senior Notes due 2023 which were issued in a private placement, exchanged such notes for new registered notes with substantially identical terms.

On October 11, 2019, we filed a registration statement on Form S-4 pursuant to which the holders of the 3.750% Senior Notes which were issued in a private placement, exchanged such notes for new registered notes with substantially identical terms.



On December 16, 2019, we filed a registration statement on Form S-3 pursuant to
which CF&Co may make offers and sales of our 5.125% Senior Notes, 5.375% Senior
Notes due 2023 and 3.750% Senior Notes in connection with ongoing market-making
transactions which may occur from time to time. Such market-making transactions
in these securities may occur in the open market or may be privately negotiated
at prevailing market prices at a time of resale or at related or negotiated
prices. Neither CF&Co, nor any other of our affiliates, has any obligation to
make a market in our securities, and CF&Co or any such other affiliate may
discontinue market-making activities at any time without notice.

CONTINGENT PAYMENTS RELATED TO ACQUISITIONS



Since 2016, the Company has completed acquisitions whose purchase price included
an aggregate of approximately 2.2 million shares of the Company's Class A common
stock (with an acquisition date fair value of approximately $9.2 million),
0.1 million LPUs (with an acquisition date fair value of approximately $0.2
million), 0.2 million RSUs (with an acquisition date fair value of approximately
$1.2 million) and $34.3 million in cash that may be issued contingent on certain
targets being met through 2022.

As of December 31, 2019, the Company has issued 0.3 million shares of its Class A common stock and paid $14.6 million in cash related to such contingent payments.

As of December 31, 2019, 1.9 million shares of the Company's Class A common stock and 0.2 million RSUs remain to be issued, and $24.1 million in cash remains to be paid, net of forfeitures and other adjustments, if the targets are met.



DERIVATIVE SUIT

On October 5, 2018, Roofers Local 149 Pension Fund filed a putative derivative
complaint in the Delaware Chancery Court, captioned Roofers Local 149 Pension
Fund vs. Howard Lutnick, et al. (Case No. 2018-0722), alleging breaches of
fiduciary duty against (i) the members of the Board, (ii) Howard Lutnick, CFGM,
and Cantor as controlling stockholders of BGC, and (iii) Howard Lutnick as an
officer of BGC. The complaint challenges the transactions by which BGC (i)
completed the Berkeley Point acquisition from CCRE for $875 million and (ii)
committed to invest $100 million for a 27% interest in Real Estate, L.P.
(collectively, the "Transaction"). Among other things, the complaint alleges
that (i) the price BGC paid in connection with the Transaction was unfair, (ii)
the process leading up to the Transaction was unfair, and (iii) the members of
the special committee of the Board were not independent. It seeks to recover for
the Company unquantified damages, disgorgement of any payments received by
defendants, and attorneys' fees.

A month later, on November 5, 2018, the same plaintiffs' firm filed an identical
putative derivative complaint against the same defendants seeking the same
relief on behalf of a second client, Northern California Pipe Trades Trust
Funds. The cases have been consolidated into a single action, captioned In re
BGC Partners, Inc. Derivative Litigation (Consolidated C.A. No. 2018-0722-AGB),
and the complaint filed by Roofers Local 149 Pension Fund on October 5, 2018 was
designated as the operative complaint.

                                      107



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In response to motions to dismiss filed by all defendants in December 2018,
Plaintiffs filed a motion for leave to amend the operative complaint in February
2019, requesting that the Court allow them to supplement their allegations,
which the Court granted. The amended complaint alleges the same purported
breaches of fiduciary duty as the operative complaint, raises no new claims, and
seeks identical relief, but includes additional allegations, including alleged
reasons for plaintiffs' failure to make a demand on the Board, which was the
basis of defendants' motion to dismiss. On March 19, 2019, all defendants filed
motions to dismiss the amended complaints, again on demand grounds. On September
30, 2019, the Court denied defendants' motions to dismiss, permitting the case
to move forward into discovery. In its ruling, the Court determined that the
amended complaint sufficiently pled that plaintiffs were not required to make
demand on the Board in order to file a derivative suit, but did not make
findings of fact with respect to the underlying merits of plaintiffs'
allegations concerning the Transaction.

The Company continues to believe that the allegations pled against the defendants in the amended complaint are without merit and intends to defend against them vigorously as the case moves forward. However, as in any litigated matter, the outcome cannot be determined with certainty.

PURCHASE OF LIMITED PARTNERSHIP INTERESTS



Cantor has the right to purchase limited partnership interests (Cantor units)
from BGC Holdings upon redemption of non-exchangeable FPUs redeemed by BGC
Holdings upon termination or bankruptcy of the Founding/Working Partner. In
addition, pursuant to Article Eight, Section 8.08, of the Second Amended and
Restated BGC Holdings Limited Partnership Agreement (previously the sixth
amendment) and Article Eight, Section 8.08, of the Newmark Holdings Limited
Partnership Agreement, where either current, terminating, or terminated partners
are permitted by the Company to exchange any portion of their FPUs and Cantor
consents to such exchangeability, the Company shall offer to Cantor the
opportunity for Cantor to purchase the same number of new exchangeable limited
partnership interests (Cantor units) in BGC Holdings at the price that Cantor
would have paid for the FPUs had the Company redeemed them. Any such Cantor
units purchased by Cantor are currently exchangeable for up to 23,613,420 shares
of BGC Class B common stock or, at Cantor's election or if there are no such
additional shares of BGC Class B common stock, shares of BGC Class A common
stock, in each case on a one-for-one basis (subject to customary anti-dilution
adjustments).

On November 7, 2016, the Company issued exchange rights with respect to, and
Cantor purchased, in transactions exempt from registration pursuant to Section
4(a)(2) of the Securities Act, an aggregate of 624,762 exchangeable limited
partnership units in BGC Holdings, as follows: In connection with the redemption
by BGC Holdings of an aggregate of 141,523 non-exchangeable founding partner
units from founding partners of BGC Holdings for an aggregate consideration of
$560,190, Cantor purchased 141,523 exchangeable limited partnership units from
BGC Holdings for an aggregate of $560,190. In addition, pursuant to the Sixth
Amendment, on November 7, 2016, Cantor purchased 483,239 exchangeable limited
partnership units from BGC Holdings for an aggregate consideration of $1,796,367
in connection with the grant of exchangeability and exchange for 483,239
founding partner units. As a result of the Newmark IPO and the related
Separation and Distribution Agreement, the aggregate exchangeable limited
partnership units represent 624,762 and 283,983 exchangeable limited partnership
units in BGC Holdings and Newmark Holdings, respectively.

On November 7, 2017, the Company issued exchange rights with respect to, and
Cantor purchased, in transactions exempt from registration pursuant to Section
4(a)(2) of the Securities Act, an aggregate of 1,179,788 exchangeable limited
partnership units in BGC Holdings, as follows: In connection with the redemption
by BGC Holdings of an aggregate of 823,178 non-exchangeable founding partner
units from founding partners of BGC Holdings for an aggregate consideration of
$2,828,629, Cantor purchased 823,178 exchangeable limited partnership units from
BGC Holdings for an aggregate of $2,828,629. In addition, pursuant to the Sixth
Amendment, on November 7, 2017, Cantor purchased 356,610 exchangeable limited
partnership units from BGC Holdings for an aggregate consideration of $1,091,175
in connection with the grant of exchangeability and exchange for 356,610
founding partner units. As a result of the Newmark IPO and the related
Separation and Distribution Agreement, the aggregate exchangeable limited
partnership units represent 1,179,788 and 536,267 exchangeable limited
partnership units in BGC Holdings and Newmark Holdings, respectively.

As of December 31, 2019, there were 1,749,347 FPUs in BGC Holdings remaining,
which the partnerships had the right to redeem or exchange and with respect to
which Cantor had the right to purchase an equivalent number of Cantor units.

JOINT SERVICES AGREEMENT WITH CANTOR



In February 2019, the Audit Committee authorized us to enter into a short-term
services agreement with Cantor pursuant to which Cantor would be responsible for
clearing, settling and processing certain transactions executed on behalf of
customers in exchange for a 33% revenue share based on net transaction revenue
and the payment by BGC of the fully allocated cost of certain salespersons
related thereto.

                                      108


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GUARANTEE AGREEMENT FROM CF&CO



Under rules adopted by the CFTC, all foreign introducing brokers engaging in
transactions with U.S. persons are required to register with the NFA and either
meet financial reporting and net capital requirements on an individual basis or
obtain a guarantee agreement from a registered Futures Commission Merchant. Our
European-based brokers engage from time to time in interest rate swap
transactions with U.S.-based counterparties, and therefore we are subject to the
CFTC requirements. CF&Co has entered into guarantees on our behalf (and on
behalf of GFI), and we are required to indemnify CF&Co for the amounts, if any,
paid by CF&Co on our behalf pursuant to this arrangement. During the years ended
December 31, 2019 and 2018, the Company recorded expenses of $125,000 with
respect to these guarantees.

EQUITY METHOD INVESTMENTS



The Company was authorized to enter into loans, investments or other credit
support arrangements for Aqua; such arrangements are proportionally and on the
same terms as similar arrangements between Aqua and Cantor. On February 5, 2020,
the Company's Board and Audit Committee increased the authorized amount by an
additional $2.0 million. The Company has been further authorized to provide
counterparty or similar guarantees on behalf of Aqua from time to time, provided
that liability for any such guarantees, as well as similar guarantees provided
by Cantor, would be shared proportionally with Cantor (see Note 14-"Related
Party Transactions," to our consolidated financial statements in Part II, Item 8
of this Annual Report on Form 10-K for more information).

UNIT REDEMPTIONS AND EXCHANGES-EXECUTIVE OFFICERS



On March 27, 2019, the Audit and Compensation Committees authorized the purchase
by the Company from Stephen M. Merkel of up to 250,000 shares of BGC Class A
common stock at the closing price on March 26, 2019. Pursuant to this
authorization, 233,172 shares of BGC Class A common stock were purchased by the
Company on March 27, 2019 at $5.30 per share, the closing price on March 26,
2019.

On February 27, 2019, the Audit Committee authorized the purchase by Mr.
Lutnick's retirement plan of up to $56,038 of BGC Class A common stock at the
closing price on March 4, 2019. Pursuant to this authorization, 8,980 shares of
BGC Class A common stock were purchased by the plan on March 5, 2019 at $6.24
per share, the closing price on March 4, 2019.

On October 3, 2018, Mr. Lutnick donated an aggregate of 53,368 shares of BGC
Class A common stock from his personal asset trust to a charitable foundation
for which his spouse serves as a director. The Company repurchased the 53,368
shares from the charitable foundation at a price of $11.73 per share, which was
the closing price of BGC Class A common stock on that date. The transaction was
approved by the Audit Committee.

On February 16, 2018, the Audit Committee authorized the purchase by Mr.
Lutnick's retirement plan of up to $105,000 of BGC Class A common stock at the
closing price on the date of purchase. Pursuant to this authorization, 7,883
shares of BGC Class A common stock were purchased by the plan on February 26,
2018 at $13.17 per share, the closing price on the date of purchase.

In connection with the Company's 2018 executive compensation process, the Company's executive officers received certain monetization of prior awards as set forth below.



On December 31, 2018, the Compensation Committee approved the cancellation of
113,032 non-exchangeable PSUs held by Mr. Merkel, and the cancellation of 89,225
non-exchangeable PPSUs (which had a determination price of $5.36 per unit). In
connection with these transactions, the Company issued $1,062,500 in BGC Class A
common stock, less applicable taxes and withholdings at a 45% tax rate,
resulting in 113,032 net shares of BGC Class A common stock at a price of $5.17
per share and the payment of $478,123 for taxes.

On December 31, 2018, the Compensation Committee approved the monetization of
760,797 PPSUs held by Mr. Lutnick (which at an average determination price of
$6.57 per share on such date, had a value of $5,000,000). On February 1, 2019,
the Compensation Committee approved a modification which consisted of the
following: (i) the right to exchange 376,651 non-exchangeable PSUs held by Mr.
Lutnick into 376,651 non-exchangeable HDUs (which, based on the closing price of
BGC Class A common stock of $6.21 per share on such date, had a value of
$2,339,000); and (ii) the right to exchange for cash 463,969 non-exchangeable
PPSUs held by Mr. Lutnick, for a payment of $2,661,000 for taxes when (i) is
exchanged.

On December 31, 2018, the Compensation Committee approved the grant of exchange
rights to Mr. Windeatt with respect to 139,265 non-exchangeable U.K. LPUs (which
at the closing price of $5.17 per share on such date, had a value of $720,000)
and the exchange for cash (at the average determination price of $4.388 per
unit) of 63,814 non-exchangeable PLPUs for a payment of $280,002 for taxes. On
February 22, 2019, the Compensation Committee approved the grant of exchange
rights to Mr. Windeatt with respect to an additional 22,020 non-exchangeable
U.K. LPUs (which at the closing price of $6.26 per share on such date, had a
value of $137,845) and the exchange for cash (at the average determination price
of $5.6457 per unit) of 9,495 non-exchangeable PLPUs for a payment of $53,606
for taxes.

On December 31, 2018, the Compensation Committee approved the grant of exchange
rights to Mr. Lynn with respect to 750,308 non-exchangeable U.K. LPUs (which at
the closing price of $5.17 per share on such date, had a value of $3,879,092)
and the exchange for cash (at the average determination price of $3.894 per
unit) of 287,888 non-exchangeable PLPUs for a payment of $1,120,909 for taxes.
On February 22, 2019, the Compensation Committee approved the grant of exchange
rights to Mr. Lynn with respect to an additional 43,131 non-exchangeable U.K.
LPUs (which at the closing price of $6.26 per share on such date, had a value of
$270,000) and the exchange for cash (at the average determination price of
$4.1239 per unit) of 25,461 non-exchangeable PLPUs for a payment of $105,000 for
taxes.

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On March 11, 2018, as part of 2017 year-end compensation, the BGC Compensation
Committee authorized the Company to issue Mr. Lutnick $30.0 million of BGC Class
A common stock, less applicable taxes and withholdings, based on a price of
$14.33 per share, which was the closing price of BGC Class A common stock on the
trading day prior to the date of issuance, which resulted in the net issuance of
979,344 shares of BGC Class A common stock. In exchange, the following
equivalent units were redeemed and cancelled: an aggregate of 2,348,479
non-exchangeable LPUs of BGC Holdings consisting of 1,637,215 non-exchangeable
BGC Holdings PSUs and 711,264 BGC Holdings PPSUs, having various determination
prices per unit based on the date of the grant, and associated non-exchangeable
LPUs of Newmark Holdings consisting of 774,566 of non-exchangeable Newmark
Holdings PSUs and 336,499 of non-exchangeable Newmark Holdings PPSUs.

EXECUTIVE COMPENSATION-INCENTIVE PLAN



On June 6, 2017, at the Annual Meeting of Stockholders of the Company, the
Company's stockholders approved the Company's Incentive Plan to approve the
material terms of the performance goals under the Incentive Plan for compliance
with Section 162(m) of the Internal Revenue Code of 1986, as amended, including
an amendment to those performance goals in order to broaden the stock price
performance goal to include dividends and/or total stockholder return.

MARKET SUMMARY

The following table provides certain volume and transaction count information for the quarterly periods indicated:





                                       December 31,       September 30,      June 30,       March 31,       December 31,
                                           2019               2019             2019           2019              2018
Notional Volume (in billions)
Total fully electronic volume         $        5,975     $         6,448     $   5,825     $     6,703     $        5,738
Total hybrid volume¹                          66,996              73,485        66,619          68,826             89,435
Total fully electronic and hybrid
volume                                $       72,971     $        79,933     $  72,444     $    75,529     $       95,173
Transaction Count (in thousands,
except for days)
Total fully electronic transactions            3,108               3,176         2,856           2,810              2,910
Total hybrid transactions                      1,165               1,265         1,283           1,265              1,191
Total transactions                             4,273               4,441         4,139           4,075              4,101
Trading days                                      64                  64            63              61                 64




1   Hybrid is defined as transactions involving some element of electronic

trading but executed by BGC's brokers, exclusive of voice-only transactions.

Fully electronic involves customer-to-customer trades, free from broker

execution.




Fully electronic volume, including new products, was $25.0 trillion for the year
ended December 31, 2019, compared to $23.2 trillion for the year ended December
31, 2018. Our hybrid volume for the year ended December 31, 2019 was $275.9
trillion, compared to $308.8 trillion for the year ended December 31, 2018.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

The following table summarizes certain of our contractual obligations at December 31, 2019 (in thousands):





                                                      Less Than                                    More Than
                                         Total          1 Year       1-3 Years      3-5 Years       5 Years
Long-term debt and collateralized
borrowings1                           $ 1,153,696     $   84,499     $  315,946     $  753,251     $        -
Operating leases2                         258,254         30,035         57,044         44,921        126,254
Interest on long-term debt and
collateralized borrowings3                167,263         55,967         77,980         33,316              -
Short-term borrowings4                      4,962          4,962              -              -              -
Interest on Short-term borrowings             186            186              -              -              -
One-time transition tax5                   19,431          1,266          2,533          6,384          9,248
Other6                                      3,999          3,999              -              -              -

Total contractual obligations $ 1,607,791 $ 180,914 $ 453,503 $ 837,872 $ 135,502

1 Long-term debt and collateralized borrowings reflect long-term borrowings of

$300.0 million of the 5.125% Senior Notes due on May 27, 2021 (the $300.0

million represents the principal amount of the debt; the carrying value of

the 5.125% Senior Notes as of December 31, 2019 was approximately $298.7

million), $450.0 million of the 5.375% Senior Notes due on July 24, 2023 (the

$450.0 million represents the principal amount of the debt; the carrying

value of the 5.375% Senior Notes as of December 31, 2019 was $445.2 million),

$300.0 million of the 3.750% Senior Notes due October 1, 2024 (the $300.0

million represents the principal amount of the debt; the carrying value of

the 3.750% Senior Notes as of December 31, 2019 was approximately $296.1

million), $70.0 million of borrowings under the committed unsecured senior


    Revolving Credit Agreement due February 26, 2021 (the $70.0 million
    represents


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the principal amount of the debt; the carrying value of the committed

unsecured senior Revolving Credit Agreement as of December 31, 2019 was

approximately $68.9 million), $11.7 million of collateralized borrowings due

May 31, 2021, $13.2 million of collateralized borrowings due April 8, 2023,

and $8.8 million of collateralized borrowings due April 19, 2023. See Note

18- "Notes Payable, Other and Short-term Borrowings" to our consolidated

financial statements in Part II, Item 8 of this Annual Report on Form 10-K


    for more information regarding these obligations, including timing of
    payments and compliance with debt covenants.

2 Operating leases are related to rental payments under various non-cancelable


    leases, principally for office space, net of sublease payments to be
    received. The total amount of sublease payments to be received is
    approximately $0.1 million over the life of the agreement.


3   Interest on long-term debt and collateralized borrowings also includes

interest on the undrawn portion of the committed unsecured senior Revolving

Credit Agreement which was calculated through the maturity date of the

facility, which is February 26, 2021. As of December 31, 2019, the undrawn

portion of the committed unsecured Revolving Credit Agreement was $280.0

million.

4 Short-term borrowings reflects approximately $5.0 million (BRL 20.0 million)

of borrowing under the Company's committed unsecured loan agreement. See Note

18- "Notes Payable, Other and Short-term Borrowings" for more information

regarding this obligation.

5 The Company completed the calculation of the one-time transition tax on the

deemed repatriation of foreign subsidiaries' earnings pursuant to the Tax Act

and previously recorded a net cumulative tax expense of $25.0 million, net of

foreign tax credits, with an election to pay the taxes over eight years with

40% to be paid in equal installments over the first five years and the

remaining 60% to be paid in installments of 15%, 20% and 25% in years six,


    seven and eight, respectively. The cumulative remaining balance as of
    December 31, 2019 is $19.4 million.


6   Other contractual obligations reflect commitments to make charitable

contributions, which are recorded as part of "Accounts payable, accrued and

other liabilities" in the Company's consolidated statements of financial


    condition. The amount payable each year reflects an estimate of future
    Charity Day obligations.

OFF-BALANCE SHEET ARRANGEMENTS

In the ordinary course of business, we enter into arrangements with unconsolidated entities, including variable interest entities. See Note 15-"Investments" to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information related to our investments in unconsolidated entities.

CRITICAL ACCOUNTING POLICIES and estimates



The preparation of our consolidated financial statements in conformity with U.S.
GAAP requires management to make estimates and assumptions that affect the
reported amounts of the assets and liabilities, revenues and expenses, and the
disclosure of contingent assets and liabilities in our consolidated financial
statements. These accounting estimates require the use of assumptions about
matters, some of which are highly uncertain at the time of estimation. To the
extent actual experience differs from the assumptions used, our consolidated
statements of financial condition, consolidated statements of operations and
consolidated statements of cash flows could be materially affected. We believe
that the following accounting policies involve a higher degree of judgment and
complexity.

Revenue Recognition

We derive our revenues primarily through commissions from brokerage services,
the spread between the buy and sell prices on matched principal transactions,
fees from related parties, data, software and post-trade services, and other
revenues. See Note 3-"Summary of Significant Accounting Policies" to our
consolidated financial statements in Part II, Item 8 of this Annual Report on
Form 10-K for further information regarding revenue recognition.

Equity-Based and Other Compensation



Discretionary Bonus: A portion of our compensation and employee benefits expense
is comprised of discretionary bonuses, which may be paid in cash, equity,
partnership awards or a combination thereof. We accrue expense in a period based
on revenues in that period and on the expected combination of cash, equity and
partnership units. Given the assumptions used in estimating discretionary
bonuses, actual results may differ.

Restricted Stock Units: We account for equity-based compensation under the fair
value recognition provisions of the U.S. GAAP guidance. RSUs provided to certain
employees are accounted for as equity awards, and in accordance with the U.S.
GAAP, we are required to record an expense for the portion of the RSUs that is
ultimately expected to vest. Further, forfeitures are estimated at the time of
grant and revised, if necessary, in subsequent periods if actual forfeitures
differ from those estimates. Because assumptions are used in estimating employee
turnover and associated forfeiture rates, actual results may differ from our
estimates under different assumptions or conditions.

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The fair value of RSU awards to employees is determined on the date of grant,
based on the fair value of BGC Class A common stock. Generally, RSUs granted by
us as employee compensation do not receive dividend equivalents; as such, we
adjust the fair value of the RSUs for the present value of expected forgone
dividends, which requires us to include an estimate of expected dividends as a
valuation input. This grant-date fair value is amortized to expense ratably over
the awards' vesting periods. For RSUs with graded vesting features, we have made
an accounting policy election to recognize compensation cost on a straight-line
basis. The amortization is reflected as part of "Equity-based compensation and
allocations of net income to limited partnership units and FPUs" in our
consolidated statements of operations.

Restricted Stock: Restricted stock provided to certain employees is accounted
for as an equity award, and as per the U.S. GAAP guidance, we are required to
record an expense for the portion of the restricted stock that is ultimately
expected to vest. We have granted restricted stock that is not subject to
continued employment or service; however, transferability is subject to
compliance with our and our affiliates' customary noncompete obligations. Such
shares of restricted stock are generally saleable by partners in five to ten
years. Because the restricted stock is not subject to continued employment or
service, the grant-date fair value of the restricted stock is expensed on the
date of grant. The expense is reflected as non-cash equity-based compensation
expense in our consolidated statements of operations.

Limited Partnership Units: LPUs in BGC Holdings and Newmark Holdings are
generally held by employees. Generally, such units receive quarterly allocations
of net income, which are cash distributed on a quarterly basis and generally
contingent upon services being provided by the unit holders. In addition,
Preferred Units are granted in connection with the grant of certain LPUs, such
as PSUs, that may be granted exchangeability or redeemed in connection with the
grant of shares of common stock to cover the withholding taxes owed by the unit
holder upon such exchange or grant. This is an acceptable alternative to the
common practice among public companies of issuing the gross amount of shares to
employees, subject to cashless withholding of shares to pay applicable
withholding taxes. Our Preferred Units are not entitled to participate in
partnership distributions other than with respect to a distribution at a rate of
either 0.6875% (which is 2.75% per calendar year) or such other amount as set
forth in the award documentation. The quarterly allocations of net income to
such LPUs are reflected as a component of compensation expense under
"Equity-based compensation and allocations of net income to limited partnership
units and FPUs" in our consolidated statements of operations.

Certain of these LPUs entitle the holders to receive post-termination payments
equal to the notional amount, generally in four equal yearly installments after
the holder's termination. These LPUs are accounted for as post-termination
liability awards under the U.S. GAAP. Accordingly, we recognize a liability for
these units on our consolidated statements of financial condition as part of
"Accrued compensation" for the amortized portion of the post-termination payment
amount, based on the current fair value of the expected future cash payout. We
amortize the post-termination payment amount, less an expected forfeiture rate,
over the vesting period, and record an expense for such awards based on the
change in value at each reporting period in our consolidated statements of
operations as part of "Equity-based compensation and allocations of net income
to limited partnership units and FPUs."

Certain LPUs are granted exchangeability into shares of BGC or Newmark Class A
common stock or are redeemed in connection with the grant of BGC or Newmark
Class A common stock issued; BGC Class A common stock is issued on a one-for-one
basis, and Newmark Class A common stock is issued based on the number of LPUs
exchanged or redeemed multiplied by the then Exchange Ratio. At the time
exchangeability is granted or shares of BGC or Newmark Class A common stock are
issued, we recognize an expense based on the fair value of the award on that
date, which is included in "Equity-based compensation and allocations of net
income to limited partnership units and FPUs" in our consolidated statements of
operations. During the years ended December 31, 2019, 2018 and 2017, we incurred
compensation expense of $100.9 million, $150.1 million and $176.5 million,
respectively.

Certain LPUs have a stated vesting schedule and do not receive quarterly
allocations of net income. Compensation expense related to these LPUs is
recognized over the stated service period, and these units generally vest
between two and five years. During the years ended December 31, 2019, 2018 and
2017, we incurred compensation expense related to these LPUs of $36.7 million,
$11.4 million, and $1.2 million, respectively. This expense is included in
"Equity-based compensation and allocations of net income to limited partnership
units and FPUs" in our consolidated statements of operations.

Employee Loans: We have entered into various agreements with certain employees
and partners, whereby these individuals receive loans that may be either wholly
or in part repaid from distributions that the individuals receive on some or all
of their limited partnership interests or may be forgiven over a period of time.
Cash advance distribution loans are documented in formal agreements and are
repayable in timeframes outlined in the underlying agreements. We intend for
these advances to be repaid in full from the future distributions on existing
and future awards granted. The distributions are treated as compensation expense
when made and the proceeds are used to repay the loan. The forgivable portion of
any loans is recognized as compensation expense in our consolidated statements
of operations over the life of the loan. We review the loan balances each
reporting period for collectability. If we determine that the collectability of
a portion of the loan balances is not expected, we recognize a reserve against
the loan balances. Actual collectability of loan balances may differ from our
estimates.

As of December 31, 2019 and 2018, the aggregate balance of employee loans, net
of reserve, was $315.6 million and $216.9 million, respectively, and is included
as "Loans, forgivable loans and other receivables from employees and partners,
net" in our consolidated statements of financial condition. Compensation expense
for the above-mentioned employee loans for the years ended December 31, 2019,
2018 and 2017 was $35.7 million, $13.0 million and $26.9 million, respectively.
The compensation expense related to these loans was included as part of
"Compensation and employee benefits" in our consolidated statements of
operations.

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Goodwill

Goodwill is the excess of the purchase price over the fair value of identifiable
net assets acquired in a business combination. As prescribed in the U.S. GAAP
guidance, Intangibles - Goodwill and Other, goodwill is not amortized, but
instead is periodically tested for impairment. We review goodwill for impairment
on an annual basis during the fourth quarter of each fiscal year or whenever an
event occurs or circumstances change that could reduce the fair value of a
reporting unit below its carrying amount.

When reviewing goodwill for impairment, we first assess qualitative factors to
determine whether it is more likely than not that the fair value of a reporting
unit is less than its carrying amount, including goodwill. If the results of the
qualitative assessment are not conclusive, or if we choose to bypass the
qualitative assessment, we perform a goodwill impairment analysis using a
two-step process as follows.

The first step involves comparing each reporting unit's estimated fair value to
its carrying value, including goodwill. To estimate the fair value of the
reporting units, we use a discounted cash flow model and data regarding market
comparables. The valuation process requires significant judgment and involves
the use of significant estimates and assumptions. These assumptions include cash
flow projections, estimated cost of capital and the selection of peer companies
and relevant multiples. Because assumptions and estimates are used in projecting
future cash flows, choosing peer companies and selecting relevant multiples,
actual results may differ from our estimates under different assumptions or
conditions. If the estimated fair value of a reporting unit exceeds its carrying
value, goodwill is deemed not to be impaired. If the carrying value exceeds
estimated fair value, there is an indication of potential impairment and the
second step is performed to measure the amount of potential impairment.

The second step of the process involves the calculation of an implied fair value
of goodwill for each reporting unit for which step one indicated a potential
impairment may exist. The implied fair value of goodwill is determined by
measuring the excess of the estimated fair value of the reporting unit, as
calculated in step one, over the estimated fair values of the individual assets,
liabilities and identified intangibles. Events such as economic weakness,
significant declines in operating results of reporting units, or significant
changes to critical inputs of the goodwill impairment test (e.g., estimates of
cash flows or cost of capital) could cause the estimated fair value of our
reporting units to decline, which could result in an impairment of goodwill in
the future.

Income Taxes

We account for income taxes using the asset and liability method as prescribed
in the U.S. GAAP guidance, Income Taxes. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to basis differences
between the consolidated financial statement carrying amounts of existing assets
and liabilities and their respective tax basis. Certain of our entities are
taxed as U.S. partnerships and are subject to UBT in the City of New York.
Therefore, the tax liability or benefit related to the partnership income or
loss except for UBT rests with the partners (see Note 2-"Limited Partnership
Interests in BGC Holdings and Newmark Holdings" for a discussion of partnership
interests), rather than the partnership entity. As such, the partners' tax
liability or benefit is not reflected in our consolidated financial statements.
The tax-related assets, liabilities, provisions or benefits included in our
consolidated financial statements also reflect the results of the entities that
are taxed as corporations, either in the U.S. or in foreign jurisdictions.

We provide for uncertain tax positions based upon management's assessment of
whether a tax benefit is more likely than not to be sustained upon examination
by tax authorities. Management is required to determine whether a tax position
is more likely than not to be sustained upon examination by tax authorities,
including resolution of any related appeals or litigation processes, based on
the technical merits of the position. Because significant assumptions are used
in determining whether a tax benefit is more likely than not to be sustained
upon examination by tax authorities, actual results may differ from our
estimates under different assumptions or conditions. We recognize interest and
penalties related to income tax matters in "Provision for income taxes" in our
consolidated statements of operations.

A valuation allowance is recorded against deferred tax assets if it is deemed
more likely than not that those assets will not be realized. In assessing the
need for a valuation allowance, we consider all available evidence, including
past operating results, the existence of cumulative losses in the most recent
fiscal years, estimates of future taxable income and the feasibility of tax
planning strategies.

The measurement of current and deferred income tax assets and liabilities is
based on provisions of enacted tax laws and involves uncertainties in the
application of tax regulations in the U.S. and other tax jurisdictions. Because
our interpretation of complex tax law may impact the measurement of current and
deferred income taxes, actual results may differ from these estimates under
different assumptions regarding the application of tax law.

The Tax Act was enacted on December 22, 2017, which includes the global
intangible low-taxed income, GILTI, provision. This provision requires inclusion
in the Company's U.S. income tax return the earnings of certain foreign
subsidiaries. The Company has elected to treat taxes associated with the GILTI
provision using the Period Cost Method and thus has not recorded deferred taxes
for basis differences under this regime.

See Note 3-"Summary of Significant Accounting Policies" to our consolidated
financial statements in Part II, Item 8 of this Annual Report on Form 10-K for
additional information regarding these critical accounting policies and other
significant accounting policies.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1-"Organization and Basis of Presentation" to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recent accounting pronouncements.


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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Credit Risk



Credit risk arises from potential non-performance by counterparties and
customers. BGC Partners has established policies and procedures to manage its
exposure to credit risk. BGC Partners maintains a thorough credit approval
process to limit exposure to counterparty risk and employs stringent monitoring
to control the counterparty risk from its matched principal and agency
businesses. BGC Partners' account opening and counterparty approval process
includes verification of key customer identification, anti-money laundering
verification checks and a credit review of financial and operating data. The
credit review process includes establishing an internal credit rating and any
other information deemed necessary to make an informed credit decision, which
may include correspondence, due diligence calls and a visit to the entity's
premises, as necessary.

Credit approval is granted subject to certain trading limits and may be subject to additional conditions, such as the receipt of collateral or other credit support. Ongoing credit monitoring procedures include reviewing periodic financial statements and publicly available information on the client and collecting data from credit rating agencies, where available, to assess the ongoing financial condition of the client.



In addition, BGC Partners incurs limited credit risk related to certain
brokerage activities. The counterparty risk relates to the collectability of the
outstanding brokerage fee receivables. The review process includes monitoring
both the clients and the related brokerage receivables. The review includes an
evaluation of the ongoing collection process and an aging analysis of the
brokerage receivables.

Principal Transaction Risk



Through its subsidiaries, BGC Partners executes matched principal transactions
in which it acts as a "middleman" by serving as counterparty to both a buyer and
a seller in matching back-to-back trades. These transactions are then settled
through a recognized settlement system or third-party clearing organization.
Settlement typically occurs within one to three business days after the trade
date. Cash settlement of the transaction occurs upon receipt or delivery of the
underlying instrument that was traded. BGC Partners generally avoids settlement
of principal transactions on a free-of-payment basis or by physical delivery of
the underlying instrument. However, free-of-payment transactions may occur on a
very limited basis.

The number of matched principal trades BGC Partners executes has continued to
grow as compared to prior years. Receivables from broker-dealers, clearing
organizations, customers and related broker-dealers and Payables to
broker-dealers, clearing organizations, customers and related broker-dealers on
the Company's consolidated statements of financial condition primarily represent
the simultaneous purchase and sale of the securities associated with those
matched principal transactions that have not settled as of their stated
settlement dates. BGC Partners' experience has been that substantially all of
these transactions ultimately settle at the contracted amounts.

Market Risk



Market risk refers to the risk that a change in the level of one or more market
prices, rates, indices or other factors will result in losses for a specified
position. BGC Partners may allow certain of its desks to enter into unmatched
principal transactions in the ordinary course of business and hold long and
short inventory positions. These transactions are primarily for the purpose of
facilitating clients' execution needs, adding liquidity to a market or
attracting additional order flow. As a result, BGC Partners may have market risk
exposure on these transactions. BGC Partners' exposure varies based on the size
of its overall positions, the risk characteristics of the instruments held and
the amount of time the positions are held before they are disposed of. BGC
Partners has limited ability to track its exposure to market risk and unmatched
positions on an intra-day basis; however, it attempts to mitigate its market
risk on these positions by strict risk limits, extremely limited holding periods
and hedging its exposure. These positions are intended to be held short term to
facilitate customer transactions. However, due to a number of factors, including
the nature of the position and access to the market on which it trades, BGC
Partners may not be able to unwind the position and it may be forced to hold the
position for a longer period than anticipated. All positions held longer than
intra-day are marked to market.

We also have investments in marketable equity securities, which are
publicly-traded, and which had a fair value of $14.2 million as of December 31,
2019. These include shares of common stock of Nasdaq that we received in
exchange for a portion of our electronic benchmark Treasury platform.
Investments in marketable securities carry a degree of risk, as there can be no
assurance that the marketable securities will not lose value and, in general,
securities markets can be volatile and unpredictable. As a result of these
different market risks, our holdings of marketable securities could be
materially and adversely affected. We may seek to minimize the effect of price
changes on a portion of our investments in marketable securities through the use
of derivative contracts. However, there can be no assurance that our hedging
activities will be adequate to protect us against price risks associated with
our investments in marketable securities. See Note 10-"Marketable Securities"
and Note 12-"Derivatives" to our consolidated financial statements in Part II,
Item 8 of this Annual Report on Form 10-K for further information regarding
these investments and related hedging activities.

Our risk management procedures and strict limits are designed to monitor and
limit the risk of unintended loss and have been effective in the past. However,
there is no assurance that these procedures and limits will be effective at
limiting unanticipated losses in the future. Adverse movements in the securities
positions or a downturn or disruption in the markets for these positions could
result in a substantial loss. In addition, principal gains and losses resulting
from these positions could on occasion have a disproportionate effect, positive
or negative, on BGC Partners' consolidated financial condition and results of
operations for any particular reporting period.

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Operational Risk



Our businesses are highly dependent on our ability to process a large number of
transactions across numerous and diverse markets in many currencies on a daily
basis. If any of our data processing systems do not operate properly or are
disabled or if there are other shortcomings or failures in our internal
processes, people or systems, we could suffer impairment to our liquidity,
financial loss, a disruption of our businesses, liability to clients, regulatory
intervention or reputational damage. These systems may fail to operate properly
or become disabled as a result of events that are wholly or partially beyond our
control, including cybersecurity incidents, a disruption of electrical or
communications services or our inability to occupy one or more of our buildings.
The inability of our systems to accommodate an increasing volume of transactions
could also constrain our ability to expand our businesses.

In addition, despite our contingency plans, our ability to conduct business may
be adversely impacted by a disruption in the infrastructure that supports our
businesses and the communities in which they are located. This may include a
disruption involving electrical, communications, transportation or other
services used by us or third parties with whom we conduct business.

Further, our operations rely on the secure processing, storage and transmission
of confidential and other information on our computer systems and networks.
Although we take protective measures such as software programs, firewalls and
similar technology to maintain the confidentiality, integrity and availability
of our and our clients' information, the nature of the threats continue to
evolve. As a result, our computer systems, software and networks may be
vulnerable to unauthorized access, loss or destruction of data (including
confidential client information), account takeovers, unavailability or
disruption of service, computer viruses, acts of vandalism, or other malicious
code, cyber-attacks and other events that could have an adverse security impact.
There have also been an increasing number of malicious cyber incidents in recent
years in various industries, including ours. Any such cyber incidents involving
our computer systems and networks, or those of third parties important to our
businesses, could present risks to our operations.

Foreign Currency Risk

BGC Partners is exposed to risks associated with changes in foreign exchange
rates. Changes in foreign exchange rates create volatility in the U.S. Dollar
equivalent of the Company's revenues and expenses. In addition, changes in the
remeasurement of BGC Partners' foreign currency denominated financial assets and
liabilities are recorded as part of its results of operations and fluctuate with
changes in foreign currency rates. BGC monitors the net exposure in foreign
currencies on a daily basis and hedges its exposure as deemed appropriate with
highly rated major financial institutions.

The majority of the Company's foreign currency exposure is related to the U.S.
Dollar versus the British Pound and the Euro. While our international results of
operations, as measured in U.S. Dollars, are subject to foreign exchange
fluctuations, we do not consider the related risk to be material to our results
of operations. For the financial assets and liabilities denominated in the
British Pound and Euro, including foreign currency hedge positions related to
these currencies, we evaluated the effects of a 10% shift in exchange rates
between those currencies and the U.S. Dollar, holding all other assumptions
constant. The analysis identified the worst case scenario as the U.S. Dollar
weakening against the Euro and strengthening against the British Pound. If as of
December 31, 2019, the U.S. Dollar had weakened against the Euro and
strengthened against the British Pound by 10%, the currency movements would have
had an aggregate negative impact on our net income of approximately $0.8
million.

Interest Rate Risk

BGC Partners had $1,073.7 million in fixed-rate debt outstanding as of December
31, 2019. These debt obligations are not currently subject to fluctuations in
interest rates, although in the event of refinancing or issuance of new debt,
such debt could be subject to changes in interest rates. In addition, as of
December 31, 2019, BGC Partners had $68.9 million of net borrowings outstanding
under its Revolving Credit Agreement. The interest rate on these borrowings is
based on LIBOR.

Disaster Recovery

Our processes address disaster recovery concerns. We operate most of our
technology from US and UK primary data centers. Either site alone is typically
capable of running all of our essential systems. Replicated instances of this
technology are maintained in our redundant data centers. Our data centers are
generally built and equipped to best-practice standards of physical security
with appropriate environmental monitoring and safeguards. Failover for the
majority of our systems is automated.



                                      115

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Market Closed - Nasdaq Other stock markets 04:00:00 2024-04-24 pm EDT			5-day change	1st Jan Change
8.08 ^USD	+3.86%		+7.45%	+82.39%

Apr. 12	Piper Sandler Adjusts Price Target on BGC to $9 From $8.50, Maintains Overweight Rating	MT
Mar. 28	BGC Group Affirms Q1 Guidance	MT

Piper Sandler Adjusts Price Target on BGC to $9 From $8.50, Maintains Overweight Rating	Apr. 12	MT
BGC Group Affirms Q1 Guidance	Mar. 28	MT
BGC Group, Inc.(NasdaqGS:BGC) added to S&P 1000	Mar. 17	CI
BGC Group, Inc.(NasdaqGS:BGC) added to S&P 600 Financials	Mar. 17	CI
BGC Group, Inc.(NasdaqGS:BGC) added to S&P Composite 1500	Mar. 17	CI
BGC Group, Inc.(NasdaqGS:BGC) added to S&P 600	Mar. 17	CI
BGC Group, Inc. Enters Into a Second Amendment to the Credit Agreement	Mar. 12	CI
Transcript : BGC Group, Inc. Presents at Bank of America Securities Financial Services Conference 2024, Feb-20-2024 01:20 PM	Feb. 20
Piper Sandler Adjusts Price Target on BGC Group to $8.50 From $8, Maintains Overweight Rating	Feb. 15	MT
Transcript : BGC Group, Inc., Q4 2023 Earnings Call, Feb 14, 2024	Feb. 14
BGC Group Q4 Adjusted Earnings, Revenue Rise; Q1 Guidance Set	Feb. 14	MT
BGC Group, Inc. provides Earnings Guidance for the First Quarter of 2024	Feb. 14	CI
BGC Group, Inc. Declares Quarterly Qualified Cash Dividend, Payable on March 19, 2024	Feb. 14	CI
BGC Group, Inc. Reports Earnings Results for the Fourth Quarter and Full Year Ended December 31, 2023	Feb. 14	CI
Sector Update: Financial Stocks Gain Premarket Tuesday	Jan. 23	MT
Sector Update: Financial	Jan. 23	MT
BGC Gets Regulatory Approval for FMX Futures Exchange	Jan. 22	DJ
BGC Group Gets Approval For FMX Exchange; Shares Rise	Jan. 22	MT
BGC Group, Inc. Announces Commodity Futures Trading Commission Approval for FMX Futures Exchange	Jan. 22	CI
Sector Update: Financial Stocks Lower Late Friday	Dec. 29	MT
Sector Update: Financial Stocks Decline Friday Afternoon	Dec. 29	MT
Sector Update: Financial	Dec. 29	MT
BGC Group Expects Fourth-Quarter Results at High-End of Guidance, Sees FMX Trading Platform Approval in Early 2024	Dec. 29	MT
Top Midday Gainers	Dec. 29	MT
Stocks Slightly Lower Friday, Easing from Record Highs Amid Modest Year-End Profit-Taking	Dec. 29	MT

	1st Jan change	Capi.
MORGAN STANLEY	+0.64%	153B
THE GOLDMAN SACHS GROUP, INC.	+9.66%	145B
CHARLES SCHWAB	+9.29%	137B
CITIC SECURITIES COMPANY LIMITED	-10.31%	34.61B
RAYMOND JAMES FINANCIAL, INC.	+14.39%	26.58B
CSC FINANCIAL CO., LTD.	-16.52%	20.09B
LPL FINANCIAL HOLDINGS INC.	+16.22%	19.94B
NOMURA HOLDINGS, INC.	+42.54%	17.36B
CHINA MERCHANTS SECURITIES CO., LTD.	+4.77%	15.63B

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