eSpeed Reports Fourth Quarter and Full Year 2007 Results

  
    
  
  
    
      eSpeed, Inc. (NASDAQ: ESPD), a leading developer of electronic 
      marketplaces and related trading technology for the global capital 
      markets, today reported results for the fourth quarter and full year 
      ended December 31, 2007.
    
    
      On May 29, 2007, eSpeed, Inc. and BGC Partners announced that eSpeed and 
      BGC planned to merge, and that the Combined Company would be named “BGC 
      Partners, Inc.” This merger is expected to 
      close by the end of the first quarter of 2008. This release discusses 
      fourth quarter and full year results for both companies, and the outlook 
      for the Combined Company.
    
    
      eSpeed’s Fourth Quarter and Full Year 
      Results Summary
    
    
      
        
           
        
        
          
            4Q2007
          
          
            Actual
          
        
        
           
        
        
          4Q2006

          
            Actual
          
        
        
           
        
        
          FY2007

          
            Actual
          
        
        
           
        
        
          FY2006

          
            Actual
          
        
      
      
        
          GAAP Revenues
        
        
          $38.2 MM
        
        
           
        
        
          $45.0 MM
        
        
           
        
        
          $159.2 MM
        
        
           
        
        
          $164.7 MM
        
      
      
        
          Non-GAAP Operating Revenues
        
        
          $38.2 MM
        
        
           
        
        
          $41.9 MM
        
        
           
        
        
          $158.4 MM
        
        
           
        
        
          $157.6 MM
        
      
      
        
          GAAP Net (Loss) Income Per Diluted Share
        
        
          ($0.42)
        
        
           
        
        
          $0.07
        
        
           
        
        
          ($0.64)
        
        
           
        
        
          $0.09
        
      
      
        
          Non-GAAP Net Operating (Loss) Income Per Diluted Share
        
        
          ($0.04)
        
        
           
        
        
          $0.06
        
        
           
        
        
          $0.02
        
        
           
        
        
          $0.15
        
      
    
    
      BGC’s Preliminary Fourth Quarter and Full 
      Year Results Summary1
    
    
      BGC announced the following financial highlights related to its 
      preliminary results for the fourth quarter and full year 2007:
    
    
      * BGC’s fourth quarter 2007 pre-tax profits 
      were approximately $20 million versus a pre-tax loss of $32 million in 
      the fourth quarter of 2006;
    
    
      * BGC’s full year 2007 pre-tax profits were 
      approximately $101 million versus a pre-tax loss of $87 million in 2006;
    
    
      * BGC’s fourth quarter 2007 revenues 
      increased by 33 percent year-over-year to approximately $253 million; and
    
    
      * BGC’s full year 2007 revenues increased by 
      37 percent year-over-year to approximately $1,029 million.
    
    
      “BGC had a strong fourth quarter, and given 
      its excellent performance year to date, we expect the Combined Company’s 
      pro forma pre-tax first quarter 2008 profits to increase by over 80 
      percent compared to the first quarter of 2007," said Howard W. Lutnick, 
      who is Chairman, Chief Executive Officer and President of eSpeed, and 
      who will become Chairman and co-Chief Executive Officer of the Combined 
      Company upon the completion of eSpeed’s 
      planned merger with BGC.
    
    
      “We expect the Combined Company’s 
      first quarter 2008 pro forma earnings per share to be approximately 450 
      percent higher than eSpeed’s stand-alone 
      non-GAAP net operating income per share of four cents in the first 
      quarter of 2007,” added Lee M. Amaitis, 
      Chairman and Chief Executive Officer of BGC and Vice Chairman of eSpeed, 
      who will become co-Chief Executive Officer of BGC Partners Inc. after 
      the completion of the planned merger. “This 
      extraordinary performance further demonstrates the strategic value to 
      our stockholders of this highly accretive combination.”
    
    
      eSpeed’s Fourth Quarter Earnings
    
    
      eSpeed reported a net loss of $21.0 million, or $0.42 per diluted share, 
      for the fourth quarter of 2007 based on Generally Accepted Accounting 
      Principles (“GAAP”). 
      To reflect earnings generated from the Company's operations, eSpeed also 
      reported a non-GAAP net operating loss of $2.0 million, or $0.04 per 
      diluted share. The difference between non-GAAP net operating loss and 
      GAAP net loss for the quarter was primarily due to $12.3 million in one 
      time pre-merger severance and stock based compensation expenses, $3.5 
      million in patent litigation costs, $1.8 million in deal-related 
      expenses, a $1.0 million charge for the impairment of fixed assets and 
      capitalized software costs, and $0.5 million in losses from Aqua, in 
      which eSpeed has an equity stake and into which it contributed its 
      previous Equities Direct Access business in October 2007. All of these 
      differences were net of tax.
    
    
      In comparison, eSpeed reported GAAP net income of $3.4 million, or $0.07 
      per diluted share, for the fourth quarter of 2006. eSpeed also reported 
      non-GAAP net operating income of $3.3 million, or $0.06 per diluted 
      share. The difference between non-GAAP net operating income and GAAP net 
      income for the quarter occurred primarily due to a September 11th-related 
      government grant of $1.9 million partially offset by a $1.2 million 
      charge for the impairment of fixed assets and capitalized software 
      costs, $0.5 million in patent litigation costs, and a $0.1 million 
      charge related to an office relocation, all net of tax.
    
    
      eSpeed’s Full Year Earnings
    
    
      For the full year 2007, eSpeed reported a GAAP net loss of $32.5 
      million, or $0.64 per diluted share, and non-GAAP net operating income 
      of $0.9 million, or $0.02 per diluted share. The difference between 
      non-GAAP net operating income and GAAP net loss for the year was 
      primarily due to $12.3 million in one time pre-merger severance and 
      stock based compensation expenses, $10.7 million in patent litigation 
      costs, $5.1 million in deal-related expenses, $3.5 million in charges 
      for the impairment of fixed assets and capitalized software costs, $1.6 
      million in losses from Aqua, and $0.3 million in charitable 
      contributions related to eSpeed’s September 
      11, 2007 Charity Day. All of these differences were net of tax.
    
    
      In comparison, eSpeed reported GAAP net income of $4.7 million, or $0.09 
      per diluted share, for the full year 2006. For the same timeframe, 
      eSpeed reported non-GAAP net operating income of $7.8 million, or $0.15 
      per diluted share. The difference between non-GAAP net operating income 
      and GAAP net income for the full year 2006 was primarily due to 
      insurance proceeds of $2.1 million, a September 11th 
      related government grant of $1.9 million, a payment to eSpeed of $0.5 
      million relating to a litigation settlement, and a $0.2 million net gain 
      related to tax settlements, partially offset by $2.5 million in expenses 
      relating to the relocation of the Company’s 
      London offices, $2.0 million in patent litigation costs, $1.3 million in 
      acquisition-related costs, a $1.2 million charge for the impairment of 
      fixed assets and capitalized software costs, $0.7 million in accelerated 
      amortization of capitalized software, and a $0.2 million charitable 
      contribution to the Cantor Fitzgerald Relief Fund, all net of tax.
    
    
      eSpeed’s Fourth Quarter Revenues
    
    
      eSpeed reported GAAP and non-GAAP operating revenues of $38.2 million 
      for the fourth quarter of 2007.
    
    
      eSpeed reported GAAP revenues of $45.0 million and non-GAAP operating 
      revenues of $41.9 million for the fourth quarter of 2006. The difference 
      between GAAP and non-GAAP revenues for the fourth quarter of 2006 was a 
      September 11th related government grant of 
      $3.1 million.
    
    
      Fully electronic revenues were $16.0 million in the fourth quarter of 
      2007, compared with $18.2 million in the fourth quarter of 2006. 
      Excluding $1.9 million in revenues related to the Wagner patent and 
      recorded in the fourth quarter of 2006 as part of “Fully 
      electronic transactions with unrelated parties”, 
      revenues from eSpeed’s fully electronic 
      business were flat compared to the fourth quarter of 2007 from $16.3 
      million in the year-earlier period. Revenues from software solutions 
      were $11.4 million in the quarter compared with $13.6 million in the 
      year ago period. Excluding Wagner-related payments of $4.2 million in 
      the fourth quarter 2006, recorded as “Software 
      Solutions and licensing fees from unrelated parties”, 
      software solutions revenues increased by 21.5 percent from $9.4 million 
      in the fourth quarter of 2006. The Wagner patent expired in February of 
      2007.
    
    
      Hybrid voice-assisted and screen-assisted revenues totaled $8.6 million 
      in the fourth quarter of 2007, up 16.2 percent compared with $7.4 
      million in the fourth quarter of 2006.
    
    
      eSpeed’s Full Year Revenues
    
    
      eSpeed reported GAAP revenues of $159.2 million and non-GAAP operating 
      revenues of $158.4 million for the full year 2007. The difference 
      between GAAP and non-GAAP revenues for the year of 2007 reflected $0.8 
      million in revenues from Aqua.
    
    
      eSpeed reported GAAP revenues of $164.7 million and non-GAAP operating 
      revenues of $157.6 million for the full year 2006. The difference 
      between GAAP and non-GAAP revenues for the full year 2006 was a gain 
      from insurance proceeds of $3.5 million, a September 11th-related 
      government grant of $3.1 million, and $0.4 million in interest income 
      related to the settlement of a tax-related matter.
    
    
      Fully electronic revenues were $66.3 million for the full year 2007, 
      compared with $69.0 million in 2006. Excluding $1.3 million in fully 
      electronic revenues related to the Wagner patent recognized in 2007 and 
      $6.2 million recognized in 2006, revenues from eSpeed’s 
      fully electronic business were up 3.6 percent in 2007 from $62.8 million 
      in 2006. Revenues from Software Solutions were $47.4 million for the 
      full year 2007 compared with $47.8 million in 2006. Excluding 
      Wagner-related Software Solutions from Unrelated Parties revenues of 
      $1.6 million recorded in 2007 and $11.7 million recorded in 2006, 
      Software Solutions revenues increased by 26.8 percent from $36.1 million 
      in 2006.
    
    
      Hybrid voice-assisted and screen-assisted revenues totaled $35.7 million 
      in 2007, up 13 percent from $31.7 million in 2006.
    
    
      See "Non-GAAP Financial Measures" below for a detailed description of 
      the Company’s non-GAAP financial measures.
    
    
      Items Impacting eSpeed’s GAAP Revenues and 
      Income
    
    
      The year-over-year decrease in quarterly GAAP revenues was due primarily 
      to the loss of revenue related to the Wagner patent, partially offset by 
      increases in hybrid screen-assisted and voice-assisted revenues from 
      BGC. The lost net income from the Wagner patent, which totaled $3.1 
      million for the fourth quarter of 2006, $8.0 million for full year 2006 
      and $1.9 million for full year 2007, along with the aforementioned 
      expenses related to compensation, litigation, and the BGC acquisition 
      were the primary contributors to eSpeed’s 
      wider GAAP net loss in the fourth quarter and full year 2007.
    
    
      eSpeed’s Full Year and Fourth Quarter Cash 
      Flow and Cash
    
    
      eSpeed used cash flow from operations of $8.8 million during the fourth 
      quarter of 2007, compared with the generation of $6.7 million during the 
      fourth quarter of 2006. For the full year 2007, eSpeed generated cash 
      flow from operations of $18.9 million, compared with $36.8 million in 
      2006.
    
    
      The Company also reports free cash flow, which it defines as cash from 
      operations less net cash used in investing activities, including capital 
      expenditures. eSpeed’s free cash flow was 
      ($19.4) million for the fourth quarter of 2007, compared with ($3.6) 
      million in the prior year period. For the full year 2007 eSpeed’s 
      free cash flow was ($23.6) million, compared with $8.6 million in the 
      prior year.
    
    
      Excluding related party receivables and payables, free cash flow was 
      ($18.4) million for the fourth quarter of 2007 and ($17.1) million for 
      the full year 2007, compared with ($0.4) million for the fourth quarter 
      of 2006 and $14.7 million for the full year 2006.
    
    
      The above cash flow measures were negatively impacted in the quarter and 
      year primarily by a wider net loss and increased capital expenditures 
      mainly related to the opening of an additional data center.
    
    
      As of December 31, 2007, eSpeed's cash and cash equivalents, marketable 
      securities, and secured loan receivable2 
      totaled $165.2 million. In comparison, as of December 31, 2006, eSpeed's 
      cash and cash equivalents were $187.8 million.
    
    
      Preliminary BGC Fourth Quarter Results
    
    
      For the fourth quarter of 2007, BGC’s 
      preliminary results were as follows: revenues were approximately $253 
      million, up 33 percent compared to the prior year quarter’s 
      $190 million. BGC recorded pre-tax profits of approximately $20 million 
      compared to a pre-tax loss of $32 million in the prior-year period.
    
    
      For the fourth quarter of 2007, BGC’s revenues 
      in Rates increased by approximately 10 percent, Credit by 
      approximately 27 percent, and Foreign Exchange by approximately 59 
      percent, all compared to the fourth quarter of 2006. Revenues from Other 
      Asset Classes increased by approximately 462 percent in the fourth 
      quarter of 2007 compared to the year-ago quarter due primarily to the 
      November 2006 acquisition of Aurel Leven.
    
    
      For the fourth quarter of 2007, Rates represented approximately 41 
      percent of BGC’s revenues, Credit 
      approximately 25 percent, Foreign Exchange approximately 13 percent, and 
      Other Asset Classes approximately 10 percent.
    
    
      Preliminary BGC Full Year Results
    
    
      BGC’s preliminary results were as follows for 
      the full year 2007: revenues were approximately $1,029 million, up 37 
      percent compared to $754 million in 2006. BGC recorded pre-tax profits 
      of approximately $101 million for full year 2007 compared to a pre-tax 
      loss of approximately $87 million in the prior year.
    
    
      For full year 2007, BGC’s revenues in 
      Rates increased by approximately 26 percent, Credit by approximately 
      36 percent, and Foreign Exchange by approximately 53 percent, and Other 
      Asset Classes by approximately 390 percent, all compared to full year 
      2006.
    
    
      For full year 2007, Rates represented approximately 49 percent of BGC’s 
      revenues, Credit approximately 22 percent, and Foreign Exchange 
      approximately 13 percent, and Other Asset Classes approximately 8 
      percent.
    
    
      Outlook for BGC and eSpeed Combined3
    
    
      The Combined Company intends to pursue accretive acquisitions and to 
      continue to profitably increase its brokerage headcount. It also expects 
      to increase the percentage of its revenues from fully electronic 
      trading, Software Solutions and Market Data. The Combined Company 
      believes that these developments would have a significant positive 
      effect on its profit margins and revenues. The outlook for the Combined 
      Company contained in this release does not include the potentially 
      accretive impact of any of these developments.
    
    
      The Combined Company is expected to generate revenues of approximately 
      $315 million in the first quarter of 2008, up 15 percent from 
      approximately $273 million in the prior year period. The Combined 
      Company expects first quarter 2008 pre-tax income to increase by over 80 
      percent when compared to the year-ago quarter to the range of $46 
      million to $49 million.
    
    
      “Given the highly scalable nature of BGC’s 
      global platform and the addition of eSpeed’s 
      world-class technology and the integration of BGCantor Market Data, we 
      anticipate tremendous leverage for the Combined Company in the first 
      quarter and full year 2008,” said Robert 
      West, who is Chief Financial Officer of BGC and who will hold the same 
      position post-merger. “We expect to see 
      incremental pre-tax margins of 30 percent or more as we continue to 
      leverage the growth of the Combined Company’s 
      revenues.”
    
    
      Historically, the businesses have typically generated approximately 52 
      percent of their revenues and 54 percent of their pre-tax profits in 
      first half of the year, and approximately 48 percent of their revenues 
      and 46 percent of their pre-tax profits in the seasonally slower second 
      half of the year. 2007 was an unusually positive year for inter-dealer 
      brokers and exchanges, however, due to higher than normal market 
      volatility in the second half of the year.
    
    
      For the full year 2008, the Combined Company’s 
      compensation and employee benefits are expected to be between 55 and 60 
      percent of total revenue. The Combined Company expects non-compensation 
      expenses to be between 28 and 32 percent of total revenue in 2008. The 
      Combined Company anticipates having an effective tax rate of 
      approximately 28 percent in 2008. The Combined Company expects to have 
      an effective tax rate of approximately 32.5 percent for 2009 and 
      thereafter. The Combined Company expects to have a fully diluted average 
      share count of approximately 188 million for 2008.
    
    
      The above results and outlook includes the elimination of revenues 
      related to inter-company transactions of approximately $50 million in 
      2007 and a similar figure in 2008, because of amounts that have 
      historically been associated with inter-company revenue sharing 
      transactions that will cease subsequent to the consummation of the 
      proposed merger.
    
    
      Fourth Quarter and Full Year 2007 Conference Call for Analysts and 
      Investors
    
    
      eSpeed will host a conference call on Thursday, February 28, 2008 at 
      8:30 A.M. EST, to discuss the above results and outlook. To listen to 
      the call via audio webcast, please visit www.espeed.com. 
      Please note: listeners must have a Real Media or Windows Media plug in 
      and headphones or speakers to listen to the webcast.
    
    
      
        
           
        
      
      
        
          
            1 The non-GAAP results for BGC in this 
            release reflect the effects of the full formation and final 
            separation from Cantor and exclude any costs which may be 
            associated with the formation, separation and merger (including, 
            without limitation, redemption of partnership interests) as well 
            as any one time (i) compensation and (ii) other accounting charges 
            associated with transactions to facilitate repayment of loans to 
            executive officers, exchangeability of BGC Holdings units and 
            other structuring features of the formation, separation and 
            merger. For comparison purposes, please see the results for the 
            year ended December 31, 2006 and for the nine months ended 
            September 30, 2007 for "Pro Forma BGC Partners Stand-Alone" as 
            contained in eSpeed's special merger proxy filed with the SEC and 
            dated February 11, 2008.
          
        
      
      
        
           
        
      
      
        
          
            2 On July 26, 2007, eSpeed entered into 
            a Secured Promissory Note and Pledge Agreement (the "Secured 
            Loan") with Cantor in which eSpeed agreed to lend to Cantor up to 
            $100 million (the "Secured Loan Amount") on a secured basis from 
            time to time. The Secured Loan is guaranteed by a pledge of eSpeed 
            Class A or Class B Common Stock owned by Cantor equal to 125% of 
            the outstanding Secured Loan Amount, as determined on a next day 
            basis. The Secured Loan bears interest at the market rate for 
            equity repurchase agreements plus 0.25% and is payable on demand. 
            The Secured Loan was approved by eSpeed's Audit Committee. At 
            December 31, 2007, the outstanding balance of the Secured Loan was 
            $65 million.
          
        
      
      
        
           
        
      
      
        
          
            3 The non-GAAP outlook for the Combined 
            Company in this release reflects the effects of the full formation 
            and final separation from Cantor and excludes any costs which may 
            be associated with the formation, separation and merger 
            (including, without limitation, redemption of partnership 
            interests) as well as any one time (i) compensation and (ii) other 
            accounting charges associated with transactions to facilitate 
            repayment of loans to executive officers, exchangeability of BGC 
            Holdings units and other structuring features of the formation, 
            separation and merger. The non-GAAP outlook for the Combined 
            Company also excludes the impact of its minority interest 
            investments, such as Aqua and the new futures exchange discussed 
            in eSpeed's Form 8-K filed with the SEC on December 27, 2007. For 
            comparison purposes, please see the results for the year ended 
            December 31, 2006 and for the nine months ended September 30, 2007 
            for "Pro Forma BGC Partners Stand-Alone" as contained in eSpeed's 
            special merger proxy filed with SEC and dated February 11, 2008.
          
        
      
    
    
      About eSpeed, Inc.
    
    
      eSpeed, Inc. (NASDAQ: ESPD) is a leader in developing and deploying 
      electronic marketplaces and related trading technology that offers 
      traders access to the most liquid, efficient and neutral financial 
      markets in the world. eSpeed operates multiple buyer, multiple seller 
      real-time electronic marketplaces for the global capital markets, 
      including the world's largest government bond markets and other fixed 
      income and foreign exchange marketplaces. eSpeed's suite of marketplace 
      tools provides end-to-end transaction solutions for the purchase and 
      sale of financial products over eSpeed's global private network or via 
      the Internet. eSpeed's neutral platform, reliable network, 
      straight-through processing and superior products make it the trusted 
      source for electronic trading at the world's largest fixed income and 
      foreign exchange trading firms and major exchanges. To learn more, 
      please visit www.espeed.com.
    
    
      On May 29, 2007, eSpeed announced that it had entered into an Agreement 
      and Plan of Merger, dated as of May 29, 2007 with BGC Partners, Inc. (“BGC 
      Partners”); Cantor Fitzgerald, L.P. (“Cantor”); 
      BGC Partners, L.P., a Delaware limited partnership; BGC Global Holdings, 
      L.P., a Cayman Islands exempted limited partnership; and BGC Holdings, 
      L.P., a Delaware limited partnership pursuant to which eSpeed will 
      acquire BGC Partners through a merger of BGC Partners with and into 
      eSpeed. For more information, see eSpeed’s 
      Report on Form 8-K dated May 29, 2007, and its definitive proxy 
      statement dated February 11, 2008.
    
    
      About BGC
    
    
      BGC is a leading inter-dealer broker, providing integrated voice and 
      electronic execution and other brokerage services to banks, brokerage 
      houses and investment banks for a broad range of global financial 
      products including fixed income securities, foreign exchange, equity 
      derivatives, credit derivatives, futures, structured products and other 
      instruments. This is complemented by market data products for selected 
      financial instruments. Named after fixed income trading innovator B. 
      Gerald Cantor, BGC has offices in London, New York, Copenhagen, 
      Istanbul, Nyon, Paris, Mexico City, Toronto, Hong Kong, Seoul, 
      Singapore, Sydney, Tokyo, Beijing (representative office). To learn 
      more, please visit www.bgcpartners.com.
    
    
      Important Information
    
    
      In connection with the proposed Merger, the Company filed a definitive 
      proxy statement on February 11, 2008 and related materials with the U.S. 
      Securities and Exchange Commission (the “SEC”) 
      for the meeting of stockholders to vote on the proposed Merger. BECAUSE 
      THOSE DOCUMENTS CONTAIN IMPORTANT INFORMATION, HOLDERS OF THE COMPANY’S 
      COMMON STOCK ARE URGED TO READ THEM CAREFULLY. The definitive proxy 
      statement and related materials are available for free (along with any 
      other documents and reports filed by the Company with the SEC) at the SEC’s 
      website, www.sec.gov, and at the Company’s 
      website, www.espeed.com.
    
    
      Participant Information
    
    
      The Company and its directors and executive officers may be deemed to be 
      participants in the solicitation of proxies from the Company’s 
      stockholders in connection with the proposed Merger. Certain information 
      regarding the participants and their interests in the solicitation are 
      set forth in the Company’s Annual Report on 
      Form 10-K/A for the year ended December 31, 2006, which was filed with 
      the SEC on August 23, 2007, and is set forth in the definitive proxy 
      statement filed with the SEC on February 11, 2008 for the Company’s 
      meeting of stockholders to vote on the proposed Merger. Stockholders may 
      obtain additional information regarding the proposed Merger by reading 
      the definitive proxy statement and the related materials relating to the 
      proposed Merger.
    
    
      Non-GAAP Financial Measures
    
    
      To supplement eSpeed's consolidated financial statements presented in 
      accordance with GAAP and to better reflect the Company's 
      quarter-over-quarter and comparative year-over-year operating 
      performance, eSpeed uses non-GAAP financial measures of revenues, net 
      income and earnings per share, which are adjusted to exclude certain 
      expenses and gains. In addition, the Company provides a computation of 
      free cash flow. These non-GAAP financial measurements do not replace the 
      presentation of eSpeed's GAAP financial results but are provided to 
      improve overall understanding of the Company's current financial 
      performance and its prospects for the future. Specifically, eSpeed 
      believes the non-GAAP financial results provide useful information to 
      both management and investors regarding certain additional financial and 
      business trends relating to the Company's financial condition and 
      results from operations. In addition, eSpeed's management uses these 
      measures for reviewing the Company's financial results and evaluating 
      eSpeed's financial performance.
    
    
      For the fourth quarter and full year 2007, the differences between GAAP 
      net loss and non-GAAP net operating income were approximately $19.0 
      million and $33.5 million, respectively, net of tax, while the 
      difference between GAAP revenues and non-GAAP operating revenues for the 
      full year 2007 was approximately $2.8 million. eSpeed considers 
      "non-GAAP net operating income" to be after-tax income generated from 
      the Company's continuing operations excluding certain non-recurring or 
      non-core items such as, but not limited to, asset impairments, 
      litigation judgments, costs or settlements, restructuring charges, costs 
      related to potential acquisitions, charitable contributions, insurance 
      proceeds, business partner securities, gains or losses on investments 
      and similar events. eSpeed considers “non-GAAP 
      operating revenues” to be net revenue 
      excluding these same items.
    
    
      The amortization of patent costs and associated licensing fees 
      (including those made in settlement of litigation) from such patents are 
      generally treated as operating items. Material judgments or settlement 
      amounts paid or received and impairments to all or a portion of such 
      assets are generally treated as non-operating items. Management does not 
      provide guidance of GAAP net income because certain items identified as 
      excluded from non-GAAP net operating income are difficult to forecast.
    
    
      Discussion of Forward-Looking Statements
    
    
      The information in this release contains forward-looking statements 
      within the meaning of Section 27A of the Securities Act of 1933, as 
      amended, and Section 21E of the Securities Exchange Act of 1934, as 
      amended. Such statements are based upon current expectations that 
      involve risks and uncertainties. Any statements contained herein that 
      are not statements of historical fact may be deemed to be 
      forward-looking statements. For example, words such as “may,” 
      “will,” “should,” 
      “estimates,” “predicts,” 
      “potential,” “continue,” 
      “strategy,” “believes,” 
      “anticipates,” “plans,” 
      “expects,” “intends” 
      and similar expressions are intended to identify forward-looking 
      statements.
    
    
      The actual results of eSpeed, BGC or the combined company in the merger (“we”, 
      “our” or the “combined 
      company”) and the outcome and timing of 
      certain events may differ significantly from the expectations discussed 
      in the forward-looking statements. Factors that might cause or 
      contribute to such a discrepancy for eSpeed, BGC and/or the combined 
      company include, but are not limited to, the combined company’s 
      relationship with Cantor and its affiliates and any related conflicts of 
      interests, competition for and retention of brokers and other managers 
      and key employees, pricing and commissions and market position with 
      respect to any of our products, and that of the combined company’s 
      respective competitors, the effect of industry concentration and 
      consolidation, and market conditions, including trading volume and 
      volatility, as well as economic or geopolitical conditions or 
      uncertainties. Results may also be impacted by the extensive regulation 
      of our respective businesses and risks relating to compliance matters, 
      as well as factors related to specific transactions or series of 
      transactions, including credit, performance and unmatched principal risk 
      as well as counterparty failure. Factors may also include the costs and 
      expenses of developing, maintaining and protecting intellectual 
      property, including judgments or settlements paid or received in 
      connection with intellectual property or employment or other litigation 
      and their related costs, and certain financial risks, including the 
      possibility of future losses and negative cash flow from operations, 
      risks of obtaining financing and risks of the resulting leverage, as 
      well as interest and currency rate fluctuations.
    
    
      Discrepancies may also result from such factors as the ability to enter 
      new markets or develop new products, trading desks, marketplaces or 
      services and to induce customers to use these products, trading desks, 
      marketplaces or services, to secure and maintain market share, to enter 
      into marketing and strategic alliances, and other transactions, 
      including acquisitions, dispositions, reorganizations, partnering 
      opportunities, and joint ventures, and the integration of any completed 
      transactions, to hire new personnel, to expand the use of technology for 
      screen-assisted, voice-assisted and fully electronic trading and to 
      effectively manage any growth that may be achieved. Results are also 
      subject to risks relating to the proposed merger and separation of the 
      BGC businesses and the relationship between the various entities, 
      financial reporting, accounting and internal control factors, including 
      identification of any material weaknesses in our internal controls, our 
      ability to prepare historical and pro forma financial statements and 
      reports in a timely manner, and other factors, including those that are 
      discussed under “Risk Factors” 
      in eSpeed’s Annual Report on Form 10-K/A for 
      the year ended December 31, 2006, which was filed with the SEC on August 
      23, 2007 and in the definitive proxy statement filed with the SEC on 
      February 11, 2008.
    
    
      We believe that all forward-looking statements are based upon reasonable 
      assumptions when made. However, we caution that it is impossible to 
      predict actual results or outcomes or the effects of risks, 
      uncertainties or other factors on anticipated results or outcomes and 
      that accordingly you should not place undue reliance on these 
      statements. Forward-looking statements speak only as of the date when 
      made and we undertake no obligation to update these statements in light 
      of subsequent events or developments.
    
    
      
        
          eSpeed, Inc and Subsidiaries
        
      
      
        
          CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)
        
      
      
        
          (in thousands, except per share data)
        
      
      
        
           
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
          December 31, 2007
        
        
        
        
          December 31, 2006
        
      
      
        
        
        
        
        
        
        
        
        
          (Unaudited)
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          Assets
        
        
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
        
        
          $
        
        
          38,051
        
        
        
        
        
        
          $
        
        
          21,838
        
        
        
      
      
        
          Reverse repurchase agreements with related parties
        
        
        
        
           
        
        
          59,806
        
        
           
        
        
        
        
           
        
        
          166,009
        
        
           
        
      
      
        
          Total cash and cash equivalents
        
        
        
        
        
        
          97,857
        
        
        
        
        
        
        
        
          187,847
        
        
        
      
      
        
          Loan receivable from related party
        
        
        
        
        
        
          65,000
        
        
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Marketable securities
        
        
        
        
        
        
          2,353
        
        
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Fixed assets, net
        
        
        
        
        
        
          61,257
        
        
        
        
        
        
        
        
          57,443
        
        
        
      
      
        
          Investments
        
        
        
        
        
        
          9,415
        
        
        
        
        
        
        
        
          7,780
        
        
        
      
      
        
          Goodwill
        
        
        
        
        
        
          12,184
        
        
        
        
        
        
        
        
          12,184
        
        
        
      
      
        
          Other intangible assets, net
        
        
        
        
        
        
          5,578
        
        
        
        
        
        
        
        
          6,949
        
        
        
      
      
        
          Receivable from related parties
        
        
        
        
        
        
          17,612
        
        
        
        
        
        
        
        
          7,145
        
        
        
      
      
        
          Other assets
        
        
        
        
           
        
        
          11,899
        
        
           
        
        
        
        
           
        
        
          13,725
        
        
           
        
      
      
        
        
        
          Total assets
        
        
        
        
          $
        
        
          283,155
        
        
           
        
        
        
        
          $
        
        
          293,073
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          Liabilities and Stockholders' Equity
        
        
        
        
        
        
        
        
        
      
      
        
          Current liabilities:
        
        
        
        
        
        
        
        
        
      
      
        
          Payable to related parties
        
        
        
        
          $
        
        
          10,154
        
        
        
        
        
        
          $
        
        
          7,751
        
        
        
      
      
        
          Accounts payable and accrued liabilities
        
        
        
        
           
        
        
          32,296
        
        
           
        
        
        
        
           
        
        
          24,129
        
        
           
        
      
      
        
          Total current liabilities
        
        
        
        
        
        
          42,450
        
        
        
        
        
        
        
        
          31,880
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Deferred revenue
        
        
        
        
           
        
        
          6,852
        
        
           
        
        
        
        
           
        
        
          8,114
        
        
           
        
      
      
        
          Total liabilities
        
        
        
        
           
        
        
          49,302
        
        
           
        
        
        
        
           
        
        
          39,994
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            Class A common stock, par value $0.01 per share; 200,000 shares 
            authorized; 36,796 and 36,407 shares issued at December 31, 2007 
            and December 31, 2006, respectively
          
        
        
        
        
        
        
          368
        
        
        
        
        
        
        
        
          364
        
        
        
      
      
        
          
            Class B common stock, par value $0.01 per share; 100,000 shares 
            authorized; 20,498 shares issued at December 31, 2007 and December 
            31, 2006, respectively
          
        
        
        
        
        
        
          205
        
        
        
        
        
        
        
        
          205
        
        
        
      
      
        
          Additional paid-in capital
        
        
        
        
        
        
          313,238
        
        
        
        
        
        
        
        
          299,682
        
        
        
      
      
        
          
            Treasury stock, at cost; 6,502 and 6,488 shares of Class A common 
            stock at December 31, 2007 and December 31, 2006 respectively
          
        
        
        
        
        
        
          (62,597
        
        
          )
        
        
        
        
        
        
          (62,597
        
        
          )
        
      
      
        
          Accumulated other comprehensive loss
        
        
        
        
        
        
          (61
        
        
          )
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Retained (deficit) earnings
        
        
        
        
           
        
        
          (17,300
        
        
          )
        
        
        
        
           
        
        
          15,425
        
        
           
        
      
      
        
        
        
          Total stockholders' equity
        
        
        
        
           
        
        
          233,853
        
        
           
        
        
        
        
           
        
        
          253,079
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total liabilities and stockholders' equity
        
        
        
        
          $
        
        
          283,155
        
        
           
        
        
        
        
          $
        
        
          293,073
        
        
           
        
      
    
    
      
        
          eSpeed, Inc. and Subsidiaries
        
      
      
        
          CONSOLIDATED STATEMENTS OF INCOME IN ACCORDANCE WITH GAAP 
          (unaudited)
        
      
      
        
          (in thousands, except per share data)
        
      
      
        
           
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
          Three Months Ended
        
        
        
        
          Twelve Months Ended
        
      
      
        
        
        
        
        
        
        
        
        
          December 31,
        
        
        
        
          December 31,
        
        
        
        
          December 31,
        
        
        
        
          December 31,
        
      
      
        
          Revenues:
        
        
        
        
          2007
        
        
        
        
          2006
        
        
        
        
          2007
        
        
        
        
          2006
        
      
      
        
        
        
          Transaction revenues with related parties
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          Fully electronic transactions with related parties
        
        
        
        
          $
        
        
          15,631
        
        
        
        
        
        
          $
        
        
          16,101
        
        
        
        
          $
        
        
          63,941
        
        
        
        
        
        
          $
        
        
          62,084
        
      
      
        
        
        
        
        
          Fully electronic transactions with unrelated parties
        
        
        
        
           
        
        
          417
        
        
           
        
        
        
        
           
        
        
          2,144
        
        
        
        
           
        
        
          2,395
        
        
           
        
        
        
        
           
        
        
          6,937
        
      
      
        
        
        
        
        
          Total fully electronic transactions
        
        
        
        
        
        
          16,048
        
        
        
        
        
        
        
        
          18,245
        
        
        
        
        
        
          66,336
        
        
        
        
        
        
        
        
          69,021
        
      
      
        
        
        
        
        
          Voice-assisted brokerage transactions with related parties
        
        
        
        
        
        
          6,829
        
        
        
        
        
        
        
        
          6,015
        
        
        
        
        
        
          27,822
        
        
        
        
        
        
        
        
          26,043
        
      
      
        
        
        
        
        
          Screen-assisted open outcry transactions with related parties
        
        
        
        
           
        
        
          1,736
        
        
           
        
        
        
        
           
        
        
          1,413
        
        
        
        
           
        
        
          7,887
        
        
           
        
        
        
        
           
        
        
          5,675
        
      
      
        
        
        
          Total transaction revenues
        
        
        
        
        
        
          24,613
        
        
        
        
        
        
        
        
          25,673
        
        
        
        
        
        
          102,045
        
        
        
        
        
        
        
        
          100,739
        
      
      
        
        
        
          Software Solutions fees from related parties
        
        
        
        
        
        
          9,467
        
        
        
        
        
        
        
        
          7,929
        
        
        
        
        
        
          36,414
        
        
        
        
        
        
        
        
          30,822
        
      
      
        
        
        
          Software Solutions and licensing fees from unrelated parties
        
        
        
        
        
        
          1,926
        
        
        
        
        
        
        
        
          5,696
        
        
        
        
        
        
          10,983
        
        
        
        
        
        
        
        
          16,981
        
      
      
        
        
        
          Insurance recovery
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          3,500
        
      
      
        
        
        
          Grant proceeds
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          3,100
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          3,100
        
      
      
        
        
        
          Interest income
        
        
        
        
           
        
        
          2,236
        
        
           
        
        
        
        
           
        
        
          2,616
        
        
        
        
           
        
        
          9,773
        
        
           
        
        
        
        
           
        
        
          9,541
        
      
      
        
        
        
        
        
          Total revenues
        
        
        
        
        
        
          38,242
        
        
        
        
        
        
        
        
          45,014
        
        
        
        
        
        
          159,215
        
        
        
        
        
        
        
        
          164,683
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Expenses:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Compensation and employee benefits
        
        
        
        
        
        
          27,984
        
        
        
        
        
        
        
        
          12,919
        
        
        
        
        
        
          73,219
        
        
        
        
        
        
        
        
          52,765
        
      
      
        
        
        
          Amortization of software development costs and other intangibles
        
        
        
        
        
        
          5,160
        
        
        
        
        
        
        
        
          5,733
        
        
        
        
        
        
          20,331
        
        
        
        
        
        
        
        
          23,811
        
      
      
        
        
        
          Other occupancy and equipment
        
        
        
        
        
        
          10,151
        
        
        
        
        
        
        
        
          8,871
        
        
        
        
        
        
          37,067
        
        
        
        
        
        
        
        
          37,280
        
      
      
        
        
        
          Professional and consulting fees
        
        
        
        
        
        
          4,305
        
        
        
        
        
        
        
        
          2,690
        
        
        
        
        
        
          17,361
        
        
        
        
        
        
        
        
          9,464
        
      
      
        
        
        
          Loss contigency
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
          3,500
        
        
        
        
        
        
        
      
      
        
        
        
          Impairment of long-lived assets
        
        
        
        
        
        
          747
        
        
        
        
        
        
        
        
          1,861
        
        
        
        
        
        
          4,757
        
        
        
        
        
        
        
        
          1,861
        
      
      
        
        
        
          Communications and client networks
        
        
        
        
        
        
          2,606
        
        
        
        
        
        
        
        
          1,986
        
        
        
        
        
        
          9,117
        
        
        
        
        
        
        
        
          8,101
        
      
      
        
        
        
          Marketing
        
        
        
        
        
        
          219
        
        
        
        
        
        
        
        
          110
        
        
        
        
        
        
          918
        
        
        
        
        
        
        
        
          852
        
      
      
        
        
        
          Administrative fees to related parties
        
        
        
        
        
        
          3,494
        
        
        
        
        
        
        
        
          2,885
        
        
        
        
        
        
          13,824
        
        
        
        
        
        
        
        
          12,598
        
      
      
        
        
        
          Amortization of business partner and non-employee securities
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          19
        
      
      
        
        
        
          Acquisition related costs
        
        
        
        
        
        
          1,336
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
          6,641
        
        
        
        
        
        
        
        
          2,026
        
      
      
        
        
        
          Other
        
        
        
        
           
        
        
          3,003
        
        
           
        
        
        
        
           
        
        
          2,441
        
        
        
        
           
        
        
          11,247
        
        
           
        
        
        
        
           
        
        
          8,289
        
      
      
        
        
        
        
        
          Total operating expenses
        
        
        
        
        
        
          59,005
        
        
        
        
        
        
        
        
          39,496
        
        
        
        
        
        
          197,982
        
        
        
        
        
        
        
        
          157,066
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Pre-tax operating (loss) income
        
        
        
        
        
        
          (20,763
        
        
          )
        
        
        
        
        
        
          5,518
        
        
        
        
        
        
          (38,767
        
        
          )
        
        
        
        
        
        
          7,617
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income tax provision (benefit)
        
        
        
        
        
        
          267
        
        
        
        
        
        
        
        
          2,080
        
        
        
        
        
        
          (6,243
        
        
          )
        
        
        
        
        
        
          2,965
        
      
      
        
        
        
        
        
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
      
      
        
          GAAP net (loss) income
        
        
        
        
          $
        
        
          (21,030
        
        
          )
        
        
        
        
          $
        
        
          3,438
        
        
        
        
          $
        
        
          (32,524
        
        
          )
        
        
        
        
          $
        
        
          4,652
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Per share data:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Basic GAAP (loss) earnings per share
        
        
        
        
          $
        
        
          (0.42
        
        
          )
        
        
        
        
          $
        
        
          0.07
        
        
        
        
          $
        
        
          (0.64
        
        
          )
        
        
        
        
          $
        
        
          0.09
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Diluted GAAP (loss) earnings per share
        
        
        
        
          $
        
        
          (0.42
        
        
          )
        
        
        
        
          $
        
        
          0.07
        
        
        
        
          $
        
        
          (0.64
        
        
          )
        
        
        
        
          $
        
        
          0.09
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Basic weighted average shares of common stock outstanding
        
        
        
        
           
        
        
          50,536
        
        
           
        
        
        
        
           
        
        
          50,327
        
        
        
        
           
        
        
          50,466
        
        
           
        
        
        
        
           
        
        
          50,214
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Diluted weighted average shares of common stock outstanding
        
        
        
        
           
        
        
          50,536
        
        
           
        
        
        
        
           
        
        
          51,453
        
        
        
        
           
        
        
          50,466
        
        
           
        
        
        
        
           
        
        
          51,258
        
      
    
    
      
        
          eSpeed, Inc. and Subsidiaries
        
      
      
        
          NON-GAAP CONSOLIDATED STATEMENTS OF INCOME (unaudited)
        
      
      
        
          (in thousands, except per share data)
        
      
      
        
           
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
          Three Months Ended
        
        
        
        
          Twelve Months Ended
        
      
      
        
        
        
        
        
        
        
        
        
          December 31,
        
        
        
        
          December 31,
        
        
        
        
          December 31,
        
        
        
        
          December 31,
        
      
      
        
        
        
        
        
        
        
        
        
          2007
        
        
        
        
          2006
        
        
        
        
          2007
        
        
        
        
          2006
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Revenues:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Transaction revenues with related parties
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          Fully electronic transactions with related parties
        
        
        
        
          $
        
        
          15,631
        
        
        
        
        
        
          $
        
        
          16,101
        
        
        
        
        
        
          $
        
        
          63,941
        
        
        
        
        
        
          $
        
        
          62,084
        
        
        
      
      
        
        
        
        
        
          Fully electronic transactions with unrelated parties
        
        
        
        
           
        
        
          417
        
        
           
        
        
        
        
           
        
        
          2,144
        
        
           
        
        
        
        
           
        
        
          2,395
        
        
           
        
        
        
        
           
        
        
          6,937
        
        
           
        
      
      
        
        
        
        
        
          Total fully electronic transactions
        
        
        
        
        
        
          16,048
        
        
        
        
        
        
        
        
          18,245
        
        
        
        
        
        
        
        
          66,336
        
        
        
        
        
        
        
        
          69,021
        
        
        
      
      
        
        
        
        
        
          Voice-assisted brokerage transactions with related parties
        
        
        
        
        
        
          6,829
        
        
        
        
        
        
        
        
          6,015
        
        
        
        
        
        
        
        
          27,822
        
        
        
        
        
        
        
        
          26,043
        
        
        
      
      
        
        
        
        
        
          Screen-assisted open outcry transactions with related parties
        
        
        
        
           
        
        
          1,736
        
        
           
        
        
        
        
           
        
        
          1,413
        
        
           
        
        
        
        
           
        
        
          7,887
        
        
           
        
        
        
        
           
        
        
          5,675
        
        
           
        
      
      
        
        
        
          Total transaction revenues
        
        
        
        
        
        
          24,613
        
        
        
        
        
        
        
        
          25,673
        
        
        
        
        
        
        
        
          102,045
        
        
        
        
        
        
        
        
          100,739
        
        
        
      
      
        
        
        
          Software Solutions fees from related parties
        
        
        
        
        
        
          9,467
        
        
        
        
        
        
        
        
          7,929
        
        
        
        
        
        
        
        
          36,414
        
        
        
        
        
        
        
        
          30,822
        
        
        
      
      
        
        
        
          Software Solutions and licensing fees from unrelated parties
        
        
        
        
        
        
          1,926
        
        
        
        
        
        
        
        
          5,696
        
        
        
        
        
        
        
        
          10,168
        
        
        
        
        
        
        
        
          16,981
        
        
        
      
      
        
        
        
          Interest income
        
        
        
        
           
        
        
          2,236
        
        
           
        
        
        
        
           
        
        
          2,614
        
        
           
        
        
        
        
           
        
        
          9,773
        
        
           
        
        
        
        
           
        
        
          9,104
        
        
           
        
      
      
        
        
        
        
        
          Total non-GAAP revenues
        
        
        
        
           
        
        
          38,242
        
        
           
        
        
        
        
           
        
        
          41,912
        
        
           
        
        
        
        
           
        
        
          158,400
        
        
           
        
        
        
        
           
        
        
          157,646
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Expenses:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Compensation and employee benefits
        
        
        
        
        
        
          15,707
        
        
        
        
        
        
        
        
          12,918
        
        
        
        
        
        
        
        
          60,430
        
        
        
        
        
        
        
        
          52,728
        
        
        
      
      
        
        
        
          Amortization of software development costs and other intangible 
          assets
        
        
        
        
        
        
          5,161
        
        
        
        
        
        
        
        
          5,734
        
        
        
        
        
        
        
        
          20,008
        
        
        
        
        
        
        
        
          22,649
        
        
        
      
      
        
        
        
          Other occupancy and equipment
        
        
        
        
        
        
          10,151
        
        
        
        
        
        
        
        
          8,663
        
        
        
        
        
        
        
        
          36,291
        
        
        
        
        
        
        
        
          33,166
        
        
        
      
      
        
        
        
          Professional and consulting fees
        
        
        
        
        
        
          1,480
        
        
        
        
        
        
        
        
          1,967
        
        
        
        
        
        
        
        
          6,860
        
        
        
        
        
        
        
        
          6,354
        
        
        
      
      
        
        
        
          Communications and client networks
        
        
        
        
        
        
          2,605
        
        
        
        
        
        
        
        
          1,986
        
        
        
        
        
        
        
        
          9,059
        
        
        
        
        
        
        
        
          8,101
        
        
        
      
      
        
        
        
          Marketing
        
        
        
        
        
        
          218
        
        
        
        
        
        
        
        
          110
        
        
        
        
        
        
        
        
          918
        
        
        
        
        
        
        
        
          852
        
        
        
      
      
        
        
        
          Administrative fees to related parties
        
        
        
        
        
        
          3,494
        
        
        
        
        
        
        
        
          2,885
        
        
        
        
        
        
        
        
          13,574
        
        
        
        
        
        
        
        
          12,598
        
        
        
      
      
        
        
        
          Other
        
        
        
        
           
        
        
          2,560
        
        
           
        
        
        
        
           
        
        
          2,441
        
        
           
        
        
        
        
           
        
        
          9,635
        
        
           
        
        
        
        
           
        
        
          8,600
        
        
           
        
      
      
        
        
        
        
        
          Total non-GAAP operating expenses
        
        
        
        
           
        
        
          41,376
        
        
           
        
        
        
        
           
        
        
          36,704
        
        
           
        
        
        
        
           
        
        
          156,775
        
        
           
        
        
        
        
           
        
        
          145,048
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Pre-tax operating (loss) income
        
        
        
        
        
        
          (3,134
        
        
          )
        
        
        
        
        
        
          5,208
        
        
        
        
        
        
        
        
          1,625
        
        
        
        
        
        
        
        
          12,598
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income tax (benefit) provision
        
        
        
        
        
        
          (1,119
        
        
          )
        
        
        
        
        
        
          1,878
        
        
        
        
        
        
        
        
          686
        
        
        
        
        
        
        
        
          4,764
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
      
      
        
          Net operating (loss) income
        
        
        
        
           
        
        
          (2,015
        
        
          )
        
        
        
        
           
        
        
          3,330
        
        
           
        
        
        
        
           
        
        
          939
        
        
           
        
        
        
        
           
        
        
          7,834
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Non-operating income (loss):
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          Amortization of business partner and non-employee securities, net of 
          tax
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (11
        
        
          )
        
      
      
        
        
        
          Litigation costs, net of tax
        
        
        
        
        
        
          (3,500
        
        
          )
        
        
        
        
        
        
          (500
        
        
          )
        
        
        
        
        
        
          (10,683
        
        
          )
        
        
        
        
        
        
          (1,985
        
        
          )
        
      
      
        
        
        
          Legal settlement, net of tax
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          458
        
        
        
      
      
        
        
        
          Compensation costs, net of tax
        
        
        
        
        
        
          (12,277
        
        
          )
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (12,277
        
        
          )
        
        
        
        
        
        
          -
        
        
        
      
      
        
        
        
          Acquisition related costs, net of tax
        
        
        
        
        
        
          (1,754
        
        
          )
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (5,122
        
        
          )
        
        
        
        
        
        
          (1,260
        
        
          )
        
      
      
        
        
        
          Impairment of long-lived assets, net of tax
        
        
        
        
        
        
          (965
        
        
          )
        
        
        
        
        
        
          (1,186
        
        
          )
        
        
        
        
        
        
          (3,504
        
        
          )
        
        
        
        
        
        
          (1,186
        
        
          )
        
      
      
        
        
        
          Loss on investment, net of tax
        
        
        
        
        
        
          (519
        
        
          )
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (1,563
        
        
          )
        
        
        
        
        
        
          -
        
        
        
      
      
        
        
        
          Accelerated amortization, net of tax
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (689
        
        
          )
        
      
      
        
        
        
          Office relocation cost, net of tax
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (130
        
        
          )
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (2,490
        
        
          )
        
      
      
        
        
        
          Tax settlement, net of tax
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          226
        
        
        
      
      
        
        
        
          Grant income, net of tax
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          1,924
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          1,924
        
        
        
      
      
        
        
        
          Insurance recovery, net of tax
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          2,073
        
        
        
      
      
        
        
        
          Charitable contribution Re: 9/11, net of tax
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (314
        
        
          )
        
        
        
        
        
        
          (242
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
           
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
      
      
        
        
        
        
        
          Total non-operating (loss) income
        
        
        
        
           
        
        
          (19,015
        
        
          )
        
        
        
        
           
        
        
          108
        
        
           
        
        
        
        
           
        
        
          (33,463
        
        
          )
        
        
        
        
           
        
        
          (3,182
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          GAAP net (loss) income
        
        
        
        
          $
        
        
          (21,030
        
        
          )
        
        
        
        
          $
        
        
          3,438
        
        
           
        
        
        
        
          $
        
        
          (32,524
        
        
          )
        
        
        
        
          $
        
        
          4,652
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Per share data:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Basic pre-tax operating (loss) income per share
        
        
        
        
          $
        
        
          (0.06
        
        
          )
        
        
        
        
          $
        
        
          0.10
        
        
        
        
        
        
          $
        
        
          0.03
        
        
        
        
        
        
          $
        
        
          0.25
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Basic tax (benefit) provision per share
        
        
        
        
          $
        
        
          (0.02
        
        
          )
        
        
        
        
          $
        
        
          0.04
        
        
           
        
        
        
        
          $
        
        
          0.01
        
        
           
        
        
        
        
          $
        
        
          0.09
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Basic net operating (loss) income per share
        
        
        
        
          $
        
        
          (0.04
        
        
          )
        
        
        
        
          $
        
        
          0.07
        
        
        
        
        
        
          $
        
        
          0.02
        
        
        
        
        
        
          $
        
        
          0.16
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Basic non-operating (loss) per share
        
        
        
        
          $
        
        
          (0.38
        
        
          )
        
        
        
        
          $
        
        
          0.00
        
        
           
        
        
        
        
          $
        
        
          (0.66
        
        
          )
        
        
        
        
          $
        
        
          (0.06
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Basic GAAP (loss) income per share
        
        
        
        
          $
        
        
          (0.42
        
        
          )
        
        
        
        
          $
        
        
          0.07
        
        
           
        
        
        
        
          $
        
        
          (0.64
        
        
          )
        
        
        
        
          $
        
        
          0.09
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Diluted pre-tax operating (loss) income per share
        
        
        
        
          $
        
        
          (0.06
        
        
          )
        
        
        
        
          $
        
        
          0.10
        
        
        
        
        
        
          $
        
        
          0.03
        
        
        
        
        
        
          $
        
        
          0.25
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Diluted tax (benefit) provision per share
        
        
        
        
          $
        
        
          (0.02
        
        
          )
        
        
        
        
          $
        
        
          0.04
        
        
           
        
        
        
        
          $
        
        
          0.01
        
        
           
        
        
        
        
          $
        
        
          0.09
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Diluted net operating (loss) income per share
        
        
        
        
          $
        
        
          (0.04
        
        
          )
        
        
        
        
          $
        
        
          0.06
        
        
        
        
        
        
          $
        
        
          0.02
        
        
        
        
        
        
          $
        
        
          0.15
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Diluted non-operating (loss) per share
        
        
        
        
          $
        
        
          (0.38
        
        
          )
        
        
        
        
          $
        
        
          0.00
        
        
           
        
        
        
        
          $
        
        
          (0.66
        
        
          )
        
        
        
        
          $
        
        
          (0.06
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Diluted GAAP (loss) income per share
        
        
        
        
          $
        
        
          (0.42
        
        
          )
        
        
        
        
          $
        
        
          0.07
        
        
           
        
        
        
        
          $
        
        
          (0.64
        
        
          )
        
        
        
        
          $
        
        
          0.09
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Basic weighted average shares of common stock outstanding
        
        
        
        
           
        
        
          50,536
        
        
           
        
        
        
        
           
        
        
          50,327
        
        
           
        
        
        
        
           
        
        
          50,466
        
        
           
        
        
        
        
           
        
        
          50,214
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Diluted weighted average shares of common stock outstanding
        
        
        
        
           
        
        
          50,536
        
        
           
        
        
        
        
           
        
        
          51,453
        
        
           
        
        
        
        
           
        
        
          50,466
        
        
           
        
        
        
        
           
        
        
          51,258
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Additional data:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
          Pre-tax operating margin
        
        
        
        
           
        
        
          -8.2
        
        
          %
        
        
        
        
           
        
        
          12.4
        
        
          %
        
        
        
        
           
        
        
          1.0
        
        
          %
        
        
        
        
           
        
        
          8.0
        
        
          %
        
      
    
    
      
        
          eSpeed, Inc. & Subsidiaries
        
      
      
        
          CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
        
      
      
        
          (in thousands)
        
      
      
        
           
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
          
            Three Months Ended
          
          
            December 31,
          
        
        
        
        
          
            Twelve Months Ended
          
          
            December 31,
          
        
      
      
        
        
        
        
        
        
        
        
        
          2007
        
        
        
        
          2006
        
        
        
        
          2007
        
        
        
        
          2006
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
          (Unaudited)
        
        
        
        
        
      
      
        
          Cash flows from operating activities:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          Net (loss) income
        
        
        
        
          $
        
        
          (21,030
        
        
          )
        
        
        
        
          $
        
        
          3,438
        
        
        
        
        
        
          $
        
        
          (32,524
        
        
          )
        
        
        
        
          $
        
        
          4,652
        
        
        
      
      
        
          
            Adjustments to reconcile net income to net cash provided by 
            operating activities:
          
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          Depreciation and amortization
        
        
        
        
        
        
          8,461
        
        
        
        
        
        
        
        
          8,901
        
        
        
        
        
        
        
        
          32,020
        
        
        
        
        
        
        
        
          36,465
        
        
        
      
      
        
        
        
        
        
          Insurance recovery from related parties
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (3,500
        
        
          )
        
      
      
        
        
        
        
        
          Impairment of long lived assets
        
        
        
        
        
        
          743
        
        
        
        
        
        
        
        
          1,861
        
        
        
        
        
        
        
        
          4,753
        
        
        
        
        
        
        
        
          1,861
        
        
        
      
      
        
        
        
        
        
          Equity in net loss of unconsolidated investments
        
        
        
        
        
        
          449
        
        
        
        
        
        
        
        
          (5
        
        
          )
        
        
        
        
        
        
          862
        
        
        
        
        
        
        
        
          (38
        
        
          )
        
      
      
        
        
        
        
        
          Deferred income tax expense
        
        
        
        
        
        
          2,129
        
        
        
        
        
        
        
        
          808
        
        
        
        
        
        
        
        
          (4,663
        
        
          )
        
        
        
        
        
        
          (33
        
        
          )
        
      
      
        
        
        
        
        
          Stock-based compensation
        
        
        
        
        
        
          10,422
        
        
        
        
        
        
        
        
          699
        
        
        
        
        
        
        
        
          12,935
        
        
        
        
        
        
        
        
          2,418
        
        
        
      
      
        
        
        
        
        
          Tax benefit from stock-based compensation
        
        
        
        
        
        
          240
        
        
        
        
        
        
        
        
          199
        
        
        
        
        
        
        
        
          284
        
        
        
        
        
        
        
        
          305
        
        
        
      
      
        
        
        
        
        
          Excess tax benefits from stock-based compensation
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          36
        
        
        
        
        
        
        
        
          (49
        
        
          )
        
        
        
        
        
        
          (11
        
        
          )
        
      
      
        
        
        
        
        
          Loss on disposal of property
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          127
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          127
        
        
        
      
      
        
        
        
        
        
          Deferred compensation plan expense
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          138
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          138
        
        
        
      
      
        
        
        
        
        
          Recognition of deferred revenue
        
        
        
        
        
        
          (1,497
        
        
          )
        
        
        
        
        
        
          (4,435
        
        
          )
        
        
        
        
        
        
          (5,412
        
        
          )
        
        
        
        
        
        
          (7,292
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Changes in operating assets and liabilities:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          Receivable from related parties
        
        
        
        
        
        
          (3,287
        
        
          )
        
        
        
        
        
        
          (2,029
        
        
          )
        
        
        
        
        
        
          (10,467
        
        
          )
        
        
        
        
        
        
          (2,773
        
        
          )
        
      
      
        
        
        
        
        
          Other assets
        
        
        
        
        
        
          1,244
        
        
        
        
        
        
        
        
          (568
        
        
          )
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (5,141
        
        
          )
        
      
      
        
        
        
        
        
          Payable to related parties
        
        
        
        
        
        
          2,258
        
        
        
        
        
        
        
        
          2,278
        
        
        
        
        
        
        
        
          3,964
        
        
        
        
        
        
        
        
          163
        
        
        
      
      
        
        
        
        
        
          Accounts payable and accrued expenses
        
        
        
        
        
        
          (10,167
        
        
          )
        
        
        
        
        
        
          (5,675
        
        
          )
        
        
        
        
        
        
          12,999
        
        
        
        
        
        
        
        
          6,057
        
        
        
      
      
        
        
        
        
        
          Deferred income
        
        
        
        
           
        
        
          1,280
        
        
           
        
        
        
        
           
        
        
          880
        
        
           
        
        
        
        
           
        
        
          4,150
        
        
           
        
        
        
        
           
        
        
          3,397
        
        
           
        
      
      
        
        
        
        
        
          Net cash (used in) provided by operating activities
        
        
        
        
           
        
        
          (8,755
        
        
          )
        
        
        
        
           
        
        
          6,653
        
        
           
        
        
        
        
           
        
        
          18,852
        
        
           
        
        
        
        
           
        
        
          36,795
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cash flows used in investing activities:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          Secured loan to related party
        
        
        
        
        
        
          15,000
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (65,000
        
        
          )
        
        
        
        
        
        
          -
        
        
        
      
      
        
        
        
        
        
          Insurance proceeds from related parties
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          3,500
        
        
        
      
      
        
        
        
        
        
          Purchase of fixed assets
        
        
        
        
        
        
          (5,786
        
        
          )
        
        
        
        
        
        
          (4,486
        
        
          )
        
        
        
        
        
        
          (18,730
        
        
          )
        
        
        
        
        
        
          (13,241
        
        
          )
        
      
      
        
        
        
        
        
          Purchase of marketable securities
        
        
        
        
        
        
          67
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (2,414
        
        
          )
        
        
        
        
        
        
          -
        
        
        
      
      
        
        
        
        
        
          Capitalization of software development costs
        
        
        
        
        
        
          (5,530
        
        
          )
        
        
        
        
        
        
          (5,555
        
        
          )
        
        
        
        
        
        
          (21,678
        
        
          )
        
        
        
        
        
        
          (17,213
        
        
          )
        
      
      
        
        
        
        
        
          Capitalization of patent defense and registration costs
        
        
        
        
        
        
          (173
        
        
          )
        
        
        
        
        
        
          (259
        
        
          )
        
        
        
        
        
        
          (1,505
        
        
          )
        
        
        
        
        
        
          (1,270
        
        
          )
        
      
      
        
        
        
        
        
          Decrease in restricted cash
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          1,827
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          Purchase of investment
        
        
        
        
           
        
        
          (613
        
        
          )
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          (1,363
        
        
          )
        
        
        
        
           
        
      
      
        
        
        
        
        
          Net cash provided by (used in) investing activities
        
        
        
        
           
        
        
          2,965
        
        
           
        
        
        
        
           
        
        
          (10,300
        
        
          )
        
        
        
        
           
        
        
          (108,863
        
        
          )
        
        
        
        
           
        
        
          (28,224
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cash flows provided by financing activities:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
          Repurchase of Class A common stock
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (93
        
        
          )
        
        
        
        
        
        
          (373
        
        
          )
        
        
        
        
        
        
          (93
        
        
          )
        
      
      
        
        
        
        
        
          Proceeds from exercises of stock options and warrants
        
        
        
        
        
        
          648
        
        
        
        
        
        
        
        
          925
        
        
        
        
        
        
        
        
          813
        
        
        
        
        
        
        
        
          1,346
        
        
        
      
      
        
        
        
        
        
          Excess tax benefit from stock based compensation
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (36
        
        
          )
        
        
        
        
        
        
          49
        
        
        
        
        
        
        
        
          11
        
        
        
      
      
        
        
        
        
        
          Cancellation of restricted stock units in satifaction of withholding 
          tax requirements
        
        
        
        
           
        
        
          (468
        
        
          )
        
        
        
        
           
        
        
          (423
        
        
          )
        
        
        
        
           
        
        
          (468
        
        
          )
        
        
        
        
           
        
        
          (423
        
        
          )
        
      
      
        
        
        
        
        
          Net cash provided by financing activities
        
        
        
        
           
        
        
          180
        
        
           
        
        
        
        
           
        
        
          373
        
        
           
        
        
        
        
           
        
        
          21
        
        
           
        
        
        
        
           
        
        
          841
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net (decrease) increase in cash and cash equivalents
        
        
        
        
           
        
        
          (5,610
        
        
          )
        
        
        
        
           
        
        
          (3,274
        
        
          )
        
        
        
        
           
        
        
          (89,990
        
        
          )
        
        
        
        
           
        
        
          9,412
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cash and cash equivalents at beginning of period
        
        
        
        
        
        
          11,141
        
        
        
        
        
        
        
        
          94,149
        
        
        
        
        
        
        
        
          21,838
        
        
        
        
        
        
        
        
          37,070
        
        
        
      
      
        
          Reverse repurchase agreements with related parties at beginning of 
          period
        
        
        
        
           
        
        
          92,326
        
        
           
        
        
        
        
           
        
        
          96,972
        
        
           
        
        
        
        
           
        
        
          166,009
        
        
           
        
        
        
        
           
        
        
          141,365
        
        
           
        
      
      
        
          Total cash and cash equivalents at beginning of period
        
        
        
        
           
        
        
          103,467
        
        
           
        
        
        
        
           
        
        
          191,121
        
        
           
        
        
        
        
           
        
        
          187,847
        
        
           
        
        
        
        
           
        
        
          178,435
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Cash and cash equivalents at end of period
        
        
        
        
        
        
          38,051
        
        
        
        
        
        
        
        
          21,838
        
        
        
        
        
        
        
        
          38,051
        
        
        
        
        
        
        
        
          21,838
        
        
        
      
      
        
          Reverse repurchase agreements with related parties at end of period
        
        
        
        
           
        
        
          59,806
        
        
           
        
        
        
        
           
        
        
          166,009
        
        
           
        
        
        
        
           
        
        
          59,806
        
        
           
        
        
        
        
           
        
        
          166,009
        
        
           
        
      
      
        
          Total cash and cash equivalents at end of period
        
        
        
        
          $
        
        
          97,857
        
        
           
        
        
        
        
          $
        
        
          187,847
        
        
           
        
        
        
        
          $
        
        
          97,857
        
        
           
        
        
        
        
          $
        
        
          187,847
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Supplemental cash information:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Cash paid for income taxes
        
        
        
        
        
        
          -
        
        
        
        
        
        
          $
        
        
          1,986
        
        
        
        
        
        
          $
        
        
          122
        
        
        
        
        
        
          $
        
        
          2,131
        
        
        
      
      
        
          Deemed dividend to Cantor
        
        
        
        
        
        
          -
        
        
        
        
        
        
          $
        
        
          1,500
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
          $
        
        
          1,500
        
        
        
      
      
        
          Contribution of license from Cantor
        
        
        
        
        
        
          -
        
        
        
        
        
        
          $
        
        
          1,500
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
          $
        
        
          1,500
        
        
        
      
      
        
          Supplemental disclosure of non-cash investing activities:
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Contribution of net fixed assets to related party
        
        
        
        
          $
        
        
          (583
        
        
          )
        
        
        
        
        
        
          -
        
        
        
        
        
        
          $
        
        
          (1,134
        
        
          )
        
        
        
        
        
        
          -
        
        
        
      
    
    
      
        
          eSpeed, Inc. & Subsidiaries
        
      
      
        
          
            CONSOLIDATED STATEMENTS OF FREE CASH FLOWS (unaudited)
          
        
      
      
        
          (in thousands)
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          
            Three Months Ended
          
          
            December 31,
          
        
        
        
        
          
            Twelve Months Ended
          
          
            December 31,
          
        
      
      
        
        
        
        
        
          2007
        
        
           
        
        
          2006
        
        
        
        
          2007
        
        
           
        
        
          2006
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Non-GAAP income before income taxes
        
        
        
        
          $
        
        
          (3,134
        
        
          )
        
        
        
        
          $
        
        
          5,208
        
        
        
        
        
        
          $
        
        
          1,625
        
        
        
        
        
        
          $
        
        
          12,598
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Depreciation and amortization
        
        
        
        
        
        
          8,461
        
        
        
        
        
        
        
        
          8,901
        
        
        
        
        
        
        
        
          32,020
        
        
        
        
        
        
        
        
          36,465
        
        
        
      
      
        
          Other non-cash and non-operating items
        
        
        
        
           
        
        
          (7,390
        
        
          )
        
        
        
        
           
        
        
          2,766
        
        
           
        
        
        
        
           
        
        
          (27,303
        
        
          )
        
        
        
        
           
        
        
          (7,388
        
        
          )
        
      
      
        
          Non-GAAP (loss) income before income taxes adjusted for 
          depreciation, amortization and other
        
        
        
        
           
        
        
          (2,063
        
        
          )
        
        
        
        
           
        
        
          16,875
        
        
           
        
        
        
        
           
        
        
          6,342
        
        
           
        
        
        
        
           
        
        
          41,675
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Benefit (provision) for income taxes on non-GAAP operating income
        
        
        
        
        
        
          1,119
        
        
        
        
        
        
        
        
          (1,878
        
        
          )
        
        
        
        
        
        
          (686
        
        
          )
        
        
        
        
        
        
          (4,764
        
        
          )
        
      
      
        
          Income tax provision on non-operating income
        
        
        
        
        
        
          (1,386
        
        
          )
        
        
        
        
        
        
          (202
        
        
          )
        
        
        
        
        
        
          6,929
        
        
        
        
        
        
        
        
          1,799
        
        
        
      
      
        
          Deferred income tax expense
        
        
        
        
        
        
          2,129
        
        
        
        
        
        
        
        
          808
        
        
        
        
        
        
        
        
          (4,663
        
        
          )
        
        
        
        
        
        
          (33
        
        
          )
        
      
      
        
          Tax benefit from stock-based compensation
        
        
        
        
        
        
          240
        
        
        
        
        
        
        
        
          199
        
        
        
        
        
        
        
        
          284
        
        
        
        
        
        
        
        
          305
        
        
        
      
      
        
          Income taxes paid
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          1,986
        
        
           
        
        
        
        
           
        
        
          122
        
        
           
        
        
        
        
           
        
        
          2,131
        
        
           
        
      
      
        
          Increase (decrease) in current income tax payable
        
        
        
        
        
        
          2,102
        
        
        
        
        
        
        
        
          913
        
        
        
        
        
        
        
        
          1,986
        
        
        
        
        
        
        
        
          (562
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Changes in related party receivable and payable, net
        
        
        
        
        
        
          (1,029
        
        
          )
        
        
        
        
        
        
          (3,251
        
        
          )
        
        
        
        
        
        
          (6,503
        
        
          )
        
        
        
        
        
        
          (6,110
        
        
          )
        
      
      
        
          Changes in other operating assets and liabilities, net
        
        
        
        
        
        
          (7,765
        
        
          )
        
        
        
        
        
        
          (7,495
        
        
          )
        
        
        
        
        
        
          17,027
        
        
        
        
        
        
        
        
          2,181
        
        
        
      
      
        
          Charitable contribution Re: 9/11
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          (389
        
        
          )
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          (389
        
        
          )
        
      
      
        
          Net cash (used in) provided by operating activities
        
        
        
        
           
        
        
          (8,755
        
        
          )
        
        
        
        
           
        
        
          6,653
        
        
           
        
        
        
        
           
        
        
          18,852
        
        
           
        
        
        
        
           
        
        
          36,795
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Insurance proceeds from related parties
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          3,500
        
        
        
      
      
        
          Purchase of fixed assets
        
        
        
        
        
        
          (5,786
        
        
          )
        
        
        
        
        
        
          (4,486
        
        
          )
        
        
        
        
        
        
          (18,730
        
        
          )
        
        
        
        
        
        
          (13,241
        
        
          )
        
      
      
        
          Purchase of marketable securities
        
        
        
        
        
        
          67
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (2,414
        
        
          )
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Capitalization of software development costs
        
        
        
        
        
        
          (5,530
        
        
          )
        
        
        
        
        
        
          (5,555
        
        
          )
        
        
        
        
        
        
          (21,678
        
        
          )
        
        
        
        
        
        
          (17,213
        
        
          )
        
      
      
        
          Capitalization of patent defense and registration costs
        
        
        
        
        
        
          (173
        
        
          )
        
        
        
        
        
        
          (259
        
        
          )
        
        
        
        
        
        
          (1,505
        
        
          )
        
        
        
        
        
        
          (1,270
        
        
          )
        
      
      
        
          Purchase of investment
        
        
        
        
        
        
          750
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Decrease in restricted cash
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          1,827
        
        
           
        
        
        
        
           
        
        
          -
        
        
           
        
      
      
        
          Free cash flows
        
        
        
        
           
        
        
          (19,427
        
        
          )
        
        
        
        
           
        
        
          (3,647
        
        
          )
        
        
        
        
           
        
        
          (23,648
        
        
          )
        
        
        
        
           
        
        
          8,571
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Related party receivable and payable, net
        
        
        
        
           
        
        
          1,029
        
        
           
        
        
        
        
           
        
        
          3,251
        
        
           
        
        
        
        
           
        
        
          6,503
        
        
           
        
        
        
        
           
        
        
          6,110
        
        
           
        
      
      
        
          Free cash flows, net of related party activity
        
        
        
        
          $
        
        
          (18,398
        
        
          )
        
        
        
        
          $
        
        
          (396
        
        
          )
        
        
        
        
          $
        
        
          (17,145
        
        
          )
        
        
        
        
          $
        
        
          14,681
        
        
           
        
      
    
    
      
        
          eSpeed, Inc. and Subsidiaries
        
      
      
        
          RECONCILIATION of NON-GAAP FINANCIAL MEASURES TO GAAP (unaudited)
        
      
      
        
          (in thousands)
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          Three Months Ended
        
        
        
        
          Twelve Months Ended
        
      
      
        
        
        
        
        
          December 31
        
        
        
        
          December 31
        
        
        
        
          December 31
        
        
        
        
          December 31
        
      
      
        
        
        
        
        
          2007
        
        
        
        
          2006
        
        
        
        
          2007
        
        
        
        
          2006
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Revenues
        
        
        
        
          $
        
        
          38,242
        
        
        
        
        
        
          $
        
        
          41,912
        
        
        
        
        
        
          $
        
        
          158,400
        
        
        
        
        
        
          $
        
        
          157,646
        
        
        
      
      
        
          Insurance recovery [a]
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          3,500
        
        
        
      
      
        
          Grant proceeds [b]
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          3,100
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          3,100
        
        
        
      
      
        
          Tax settlement [c]
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          399
        
        
        
      
      
        
          Legal settlement [d]
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          2
        
        
        
        
        
        
        
        
        
        
        
        
          38
        
        
        
      
      
        
          eSpeed Equities [e]
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          815
        
        
           
        
        
        
        
           
        
        
          -
        
        
           
        
      
      
        
          GAAP revenues
        
        
        
        
          $
        
        
          38,242
        
        
           
        
        
        
        
          $
        
        
          45,014
        
        
           
        
        
        
        
          $
        
        
          159,215
        
        
           
        
        
        
        
          $
        
        
          164,683
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating expenses
        
        
        
        
          $
        
        
          41,376
        
        
        
        
        
        
          $
        
        
          36,704
        
        
        
        
        
        
          $
        
        
          156,775
        
        
        
        
        
        
          $
        
        
          145,048
        
        
        
      
      
        
          Amortization of business partner and non-employee securities (f)
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          19
        
        
        
      
      
        
          Litigation costs [g]
        
        
        
        
        
        
          2,825
        
        
        
        
        
        
        
        
          725
        
        
        
        
        
        
        
        
          14,001
        
        
        
        
        
        
        
        
          3,112
        
        
        
      
      
        
          Tax settlement [h]
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          36
        
        
        
      
      
        
          Legal settlement [i]
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          (700
        
        
          )
        
      
      
        
          Accelereated amortization (j)
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          1,162
        
        
        
      
      
        
          Office relocation costs (k)
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          208
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          4,115
        
        
        
      
      
        
          Compensation Costs (l)
        
        
        
        
        
        
          12,277
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          12,277
        
        
        
        
        
        
        
        
          -
        
        
        
      
      
        
          Acquisition related costs [m]
        
        
        
        
        
        
          1,341
        
        
        
        
        
        
        
        
          (2
        
        
          )
        
        
        
        
        
        
          6,645
        
        
        
        
        
        
        
        
          2,024
        
        
        
      
      
        
          Impairment of long lived assets (n)
        
        
        
        
        
        
          745
        
        
        
        
        
        
        
        
          1,861
        
        
        
        
        
        
        
        
          4,755
        
        
        
        
        
        
        
        
          1,861
        
        
        
      
      
        
          Charitable contribution Re: 9/11[o]
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          628
        
        
        
        
        
        
        
        
          389
        
        
        
      
      
        
          Loss on investment (p)
        
        
        
        
           
        
        
          441
        
        
           
        
        
        
        
           
        
        
          -
        
        
           
        
        
        
        
           
        
        
          2,901
        
        
           
        
        
        
        
           
        
        
          -
        
        
           
        
      
      
        
          GAAP expenses
        
        
        
        
          $
        
        
          59,005
        
        
           
        
        
        
        
          $
        
        
          39,496
        
        
           
        
        
        
        
          $
        
        
          197,982
        
        
           
        
        
        
        
          $
        
        
          157,066
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Pre-tax operating income
        
        
        
        
          $
        
        
          (3,134
        
        
          )
        
        
        
        
          $
        
        
          5,208
        
        
        
        
        
        
          $
        
        
          1,625
        
        
        
        
        
        
          $
        
        
          12,598
        
        
        
      
      
        
          
            Sum of reconciling items = [a]+[b]+[c]+[d]+[e]-[f]-[g]-[h]-[i]-[j]-[k]-[l]-[m]-[n]-[o]-[p]
          
        
        
        
        
           
        
        
          (17,629
        
        
          )
        
        
        
        
           
        
        
          310
        
        
           
        
        
        
        
           
        
        
          (40,392
        
        
          )
        
        
        
        
           
        
        
          (4,981
        
        
          )
        
      
      
        
          GAAP (loss) income before income tax provision
        
        
        
        
          $
        
        
          (20,763
        
        
          )
        
        
        
        
          $
        
        
          5,518
        
        
           
        
        
        
        
          $
        
        
          (38,767
        
        
          )
        
        
        
        
          $
        
        
          7,617
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Non-GAAP provision for income taxes
        
        
        
        
          $
        
        
          (1,119
        
        
          )
        
        
        
        
          $
        
        
          1,878
        
        
        
        
        
        
          $
        
        
          686
        
        
        
        
        
        
          $
        
        
          4,764
        
        
        
      
      
        
          Income tax benefit/expense on non-operating income [q]
        
        
        
        
           
        
        
          1,386
        
        
           
        
        
        
        
           
        
        
          202
        
        
           
        
        
        
        
           
        
        
          (6,929
        
        
          )
        
        
        
        
           
        
        
          (1,799
        
        
          )
        
      
      
        
          GAAP provision for income taxes
        
        
        
        
          $
        
        
          267
        
        
           
        
        
        
        
          $
        
        
          2,080
        
        
           
        
        
        
        
          $
        
        
          (6,243
        
        
          )
        
        
        
        
          $
        
        
          2,965
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Non-GAAP net operating income
        
        
        
        
          $
        
        
          (2,015
        
        
          )
        
        
        
        
          $
        
        
          3,330
        
        
        
        
        
        
          $
        
        
          939
        
        
        
        
        
        
          $
        
        
          7,834
        
        
        
      
      
        
          Sum of reconciling items = [a]+[b]+[c]+[d]+[e]-[f]-[g]-[h]-[i]-[j]-[k]-[l]-[m]-[n]-[o]-[p]-[q]
        
        
        
        
           
        
        
          (19,015
        
        
          )
        
        
        
        
           
        
        
          108
        
        
           
        
        
        
        
           
        
        
          (33,463
        
        
          )
        
        
        
        
           
        
        
          (3,182
        
        
          )
        
      
      
        
          GAAP net income
        
        
        
        
          $
        
        
          (21,030
        
        
          )
        
        
        
        
          $
        
        
          3,438
        
        
           
        
        
        
        
          $
        
        
          (32,524
        
        
          )
        
        
        
        
          $
        
        
          4,652
        
        
           
        
      
    
    
      
        
          eSpeed, Inc. and Subsidiaries
        
      
      
        
          
            Quarterly Market Activity Report
          
        
      
      
        
           
        
      
      
        
          
            The following table provides certain volume and transaction count 
            information on the eSpeed system for the periods indicated.
          
        
      
      
        
           
        
        
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
          % Change
        
        
           
        
        
          % Change
        
        
        
        
           
        
        
        
        
           
        
        
           
        
        
          % Change
        
      
      
        
        
        
        
        
          4Q06
        
        
           
        
        
          1Q07
        
        
           
        
        
          2Q07
        
        
           
        
        
          3Q07
        
        
           
        
        
          4Q07
        
        
           
        
        
          4Q07 vs 3Q07
        
        
        
        
          4Q07 vs 4Q06
        
        
        
        
          2007
        
        
        
        
          2006
        
        
        
        
          07 vs 06
        
      
      
        
          
            Volume (in billions)
          
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Fully Electronic Volume - Excluding New Products
        
        
          9,813
        
        
        
        
          11,809
        
        
        
        
          10,281
        
        
        
        
          12,689
        
        
        
        
          11,364
        
        
        
        
          (10.4
        
        
          %)
        
        
        
        
          15.8
        
        
          %
        
        
        
        
          46,143
        
        
        
        
          38,385
        
        
        
        
          20.2
        
        
          %
        
      
      
        
          Fully Electronic Volume - New Products*
        
        
          1,335
        
        
           
        
        
          1,415
        
        
           
        
        
          1,066
        
        
           
        
        
          990
        
        
           
        
        
          1,335
        
        
           
        
        
          34.8
        
        
          %
        
        
           
        
        
          (0.0
        
        
          %)
        
        
        
        
          4,806
        
        
        
        
          3,783
        
        
           
        
        
          27.1
        
        
          %
        
      
      
        
          Total Fully Electronic Volume
        
        
          11,148
        
        
        
        
          13,224
        
        
        
        
          11,347
        
        
        
        
          13,679
        
        
        
        
          12,699
        
        
        
        
          (7.2
        
        
          %)
        
        
        
        
          13.9
        
        
          %
        
        
        
        
          50,949
        
        
        
        
          42,168
        
        
        
        
          20.8
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Voice-Assisted Volume
        
        
          7,933
        
        
        
        
          8,884
        
        
        
        
          9,820
        
        
        
        
          10,883
        
        
        
        
          9,769
        
        
        
        
          (10.2
        
        
          %)
        
        
        
        
          23.2
        
        
          %
        
        
        
        
          39,357
        
        
        
        
          32,860
        
        
        
        
          19.8
        
        
          %
        
      
      
        
          Screen-Assisted Volume
        
        
          6,111
        
        
           
        
        
          7,486
        
        
           
        
        
          7,317
        
        
           
        
        
          8,438
        
        
           
        
        
          7,503
        
        
           
        
        
          (11.1
        
        
          %)
        
        
           
        
        
          22.8
        
        
          %
        
        
        
        
          30,744
        
        
        
        
          22,887
        
        
           
        
        
          34.3
        
        
          %
        
      
      
        
          
            Total Voice/Screen-Assisted Volume
          
        
        
          14,044
        
        
        
        
          16,370
        
        
        
        
          17,137
        
        
        
        
          19,321
        
        
        
        
          17,272
        
        
        
        
          (10.6
        
        
          %)
        
        
        
        
          23.0
        
        
          %
        
        
        
        
          70,101
        
        
        
        
          55,747
        
        
        
        
          25.8
        
        
          %
        
      
      
        
        
        
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
           
        
        
           
        
      
      
        
          Total Volume
        
        
          25,192
        
        
           
        
        
          29,594
        
        
           
        
        
          28,484
        
        
           
        
        
          33,000
        
        
           
        
        
          29,971
        
        
           
        
        
          (9.2
        
        
          %)
        
        
           
        
        
          19.0
        
        
          %
        
        
        
        
          121,050
        
        
        
        
          97,915
        
        
           
        
        
          23.6
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            Transaction Count
          
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Fully Electronic Transactions - Excluding New Products
        
        
          1,764,930
        
        
        
        
          2,062,341
        
        
        
        
          1,749,219
        
        
        
        
          2,660,756
        
        
        
        
          2,810,937
        
        
        
        
          5.6
        
        
          %
        
        
        
        
          59.3
        
        
          %
        
        
        
        
          9,283,253
        
        
        
        
          7,459,514
        
        
        
        
          24.4
        
        
          %
        
      
      
        
          Fully Electronic Transactions - New Products*
        
        
          142,239
        
        
           
        
        
          144,378
        
        
           
        
        
          153,673
        
        
           
        
        
          128,425
        
        
           
        
        
          125,631
        
        
           
        
        
          (2.2
        
        
          %)
        
        
           
        
        
          (11.7
        
        
          %)
        
        
        
        
          552,107
        
        
        
        
          552,899
        
        
        
        
          (0.1
        
        
          %)
        
      
      
        
          
            Total Fully Electronic Transactions
          
        
        
          1,907,169
        
        
        
        
          2,206,719
        
        
        
        
          1,902,892
        
        
        
        
          2,789,181
        
        
        
        
          2,936,568
        
        
        
        
          5.3
        
        
          %
        
        
        
        
          54.0
        
        
          %
        
        
        
        
          9,835,360
        
        
        
        
          8,012,413
        
        
        
        
          22.8
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Voice-Assisted Transactions
        
        
          177,789
        
        
        
        
          201,250
        
        
        
        
          209,504
        
        
        
        
          216,436
        
        
        
        
          202,500
        
        
        
        
          (6.4
        
        
          %)
        
        
        
        
          13.9
        
        
          %
        
        
        
        
          829,690
        
        
        
        
          792,159
        
        
        
        
          4.7
        
        
          %
        
      
      
        
          Screen-Assisted Transactions
        
        
          62,977
        
        
           
        
        
          92,496
        
        
           
        
        
          114,320
        
        
           
        
        
          119,370
        
        
           
        
        
          116,826
        
        
           
        
        
          (2.1
        
        
          %)
        
        
           
        
        
          85.5
        
        
          %
        
        
        
        
          443,012
        
        
        
        
          268,894
        
        
        
        
          64.8
        
        
          %
        
      
      
        
          
            Total Voice/Screen-Assisted Volume
          
        
        
          240,766
        
        
        
        
          293,746
        
        
        
        
          323,824
        
        
        
        
          335,806
        
        
        
        
          319,326
        
        
        
        
          (4.9
        
        
          %)
        
        
        
        
          32.6
        
        
          %
        
        
        
        
          1,272,702
        
        
        
        
          1,061,053
        
        
        
        
          19.9
        
        
          %
        
      
      
        
        
        
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
      
      
        
          Total Transactions
        
        
          2,147,935
        
        
           
        
        
          2,500,464
        
        
           
        
        
          2,226,716
        
        
           
        
        
          3,124,987
        
        
           
        
        
          3,255,894
        
        
           
        
        
          4.2
        
        
          %
        
        
           
        
        
          51.6
        
        
          %
        
        
        
        
          11,108,062
        
        
        
        
          9,073,466
        
        
        
        
          22.4
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Trading Days
        
        
          62
        
        
        
        
          62
        
        
        
        
          64
        
        
        
        
          63
        
        
        
        
          62
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          
            * New Products defined as Foreign Exchange, Interest Rate Swaps, 
            Repos, Futures, and Credit Default Swaps. CBOT Futures volume 
            calculated based on per contract notional value of $200,000 for 
            the two year contract and $100,000 for all others.
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Global Interest Rate Futures Volume (1)
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          CBOT - US Treasury Contracts
        
        
          129,828,448
        
        
        
        
          161,232,523
        
        
        
        
          171,180,151
        
        
        
        
          190,159,708
        
        
        
        
          169,104,983
        
        
        
        
          (11.1
        
        
          %)
        
        
        
        
          30.3
        
        
          %
        
        
        
        
          691,677,365
        
        
        
        
          512,163,874
        
        
        
        
          35.1
        
        
          %
        
      
      
        
        
        
          CME - Euro $ Contracts
        
        
          130,341,959
        
        
        
        
          152,724,717
        
        
        
        
          148,244,973
        
        
        
        
          180,358,177
        
        
        
        
          140,142,461
        
        
        
        
          (22.3
        
        
          %)
        
        
        
        
          7.5
        
        
          %
        
        
        
        
          621,470,328
        
        
        
        
          502,077,391
        
        
        
        
          23.8
        
        
          %
        
      
      
        
        
        
          EUREX - Bund Contracts
        
        
          74,001,534
        
        
        
        
          88,987,126
        
        
        
        
          88,867,284
        
        
        
        
          91,302,644
        
        
        
        
          72,162,362
        
        
        
        
          (21.0
        
        
          %)
        
        
        
        
          (2.5
        
        
          %)
        
        
        
        
          341,319,416
        
        
        
        
          319,889,369
        
        
        
        
          6.7
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Fed UST Primary Dealer Volume (in billions) (2)
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          UST Volume
        
        
          30,742
        
        
        
        
          34,437
        
        
        
        
          33,100
        
        
        
        
          39,414
        
        
        
        
          35,044
        
        
        
        
          (11.1
        
        
          %)
        
        
        
        
          14.0
        
        
          %
        
        
        
        
          141,994
        
        
        
        
          131,410
        
        
        
        
          8.1
        
        
          %
        
      
      
        
        
        
          Average Daily UST Volume
        
        
          496
        
        
        
        
          555
        
        
        
        
          517
        
        
        
        
          626
        
        
        
        
          565
        
        
        
        
          (9.7
        
        
          %)
        
        
        
        
          14.0
        
        
          %
        
        
        
        
          566
        
        
        
        
          526
        
        
        
        
          7.6
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NYSE - Volume (shares traded) - in millions (3)
        
        
          114,434
        
        
        
        
          123,765
        
        
        
        
          127,755
        
        
        
        
          145,470
        
        
        
        
          135,045
        
        
        
        
          (7.2
        
        
          %)
        
        
        
        
          18.0
        
        
          %
        
        
        
        
          532,035
        
        
        
        
          453,289
        
        
        
        
          17.4
        
        
          %
        
      
      
        
        
        
          Transaction Value - in millions
        
        
          4,316,756
        
        
        
        
          4,943,056
        
        
        
        
          5,339,909
        
        
        
        
          6,015,397
        
        
        
        
          5,577,200
        
        
        
        
          (7.3
        
        
          %)
        
        
        
        
          29.2
        
        
          %
        
        
        
        
          21,875,562
        
        
        
        
          16,958,552
        
        
        
        
          29.0
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          NASDAQ - Volume (shares traded) - in millions (4)
        
        
          121,477
        
        
        
        
          131,410
        
        
        
        
          134,007
        
        
        
        
          136,916
        
        
        
        
          139,202
        
        
        
        
          1.7
        
        
          %
        
        
        
        
          14.6
        
        
          %
        
        
        
        
          541,535
        
        
        
        
          500,708
        
        
        
        
          8.2
        
        
          %
        
      
      
        
        
        
          Transaction Value - in millions
        
        
          2,945,401
        
        
        
        
          3,300,788
        
        
        
        
          3,526,949
        
        
        
        
          3,896,657
        
        
        
        
          4,536,801
        
        
        
        
          16.4
        
        
          %
        
        
        
        
          54.0
        
        
          %
        
        
        
        
          15,261,194
        
        
        
        
          11,635,148
        
        
        
        
          31.2
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
    
    
      
        
          Sources:
        
        
           
        
        
          (1) Futures Industry Association - Monthly Volume Report - 
          (www.cbot.com, www.cme.com, www.eurexchange.com)
        
      
      
        
        
        
        
        
          (2) www.ny.frb.org/pihome/statistics/dealer - Federal Reserve Bank
        
      
      
        
        
        
        
        
          (3) NYSE - www.nyse.com
        
      
      
        
        
        
        
        
          (4) NASDAQ - www.marketdata.nasdaq.com

          
             
          
        
      
    
    
      
        
          Trading Days
        
      
      
        
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
        
        
           
        
        
           
        
        
           
        
        
           
        
        
           
        
        
        
      
      
        
          2008
        
      
      
        
          Q1
        
        
        
        
        
        
        
        
        
        
        
        
          Q2
        
        
        
        
        
        
        
        
        
        
        
        
          Q3
        
        
        
        
        
        
        
        
        
        
        
        
          Q4
        
      
      
        
          61
        
        
        
        
        
        
        
        
        
        
        
        
          64
        
        
        
        
        
        
        
        
        
        
        
        
          64
        
        
        
        
        
        
        
        
        
        
        
        
          62
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          2007
        
      
      
        
          Q1
        
        
        
        
        
        
        
        
        
        
        
        
          Q2
        
        
        
        
        
        
        
        
        
        
        
        
          Q3
        
        
        
        
        
        
        
        
        
        
        
        
          Q4
        
      
      
        
          62
        
        
        
        
        
        
        
        
        
        
        
        
          64
        
        
        
        
        
        
        
        
        
        
        
        
          63
        
        
        
        
        
        
        
        
        
        
        
        
          62
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          2006
        
      
      
        
          Q1
        
        
        
        
        
        
        
        
        
        
        
        
          Q2
        
        
        
        
        
        
        
        
        
        
        
        
          Q3
        
        
        
        
        
        
        
        
        
        
        
        
          Q4
        
      
      
        
          62
        
        
        
        
        
        
        
        
        
        
        
        
          63
        
        
        
        
        
        
        
        
        
        
        
        
          63
        
        
        
        
        
        
        
        
        
        
        
        
          62