# BGC Group, Inc. (BGC) FY 2021 MD&A

Verbatim Item 7 Management's Discussion and Analysis from BGC Group, Inc.'s 10-K for fiscal year 2021.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1094831/000162828022004275/bgcp-20211231.htm
Accession: 0001628280-22-004275
Filing date: 2022-02-28
Report date: 2021-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

Company profile: /company/BGC/
All MD&A years: /company/BGC/mda/
Next year: /company/BGC/mda/fy2022/ (FY 2022)

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of BGC Partners’ financial condition and results of operations should be read together with BGC Partners, Inc.’s consolidated financial statements and notes to those statements, as well as the cautionary statements relating to forward-looking statements included in this report. When used herein, the terms “BGC Partners,” “BGC,” the “Company,” “we,” “us” and “our” refer to BGC Partners, Inc., including consolidated subsidiaries.

The objective of this Management’s Discussion and Analysis is to allow investors to view the Company from management’s perspective, considering items that would have a material impact on future operations. This discussion summarizes the significant factors affecting our results of operations and financial condition as of and during the years ended December 31, 2021, 2020, and 2019. This discussion is provided to increase the understanding of, and should be read in conjunction with, our consolidated financial statements and the notes thereto included elsewhere in this report.

FORWARD-LOOKING CAUTIONARY STATEMENTS

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Our actual results 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 include, but are not limited to, the factors set forth below:

•the impact of the COVID-19 pandemic, including possible successive waves or variants of the virus, on our operations, including the continued ability of our executives, employees, customers, clients, third-party service providers, exchanges and other facilities to perform their functions at normal levels and the availability of the requisite technology to execute trades in certain Fully Electronic offerings while working remotely;

•macroeconomic and other challenges and uncertainties resulting from the COVID-19 pandemic, such as the distribution of effective vaccines, public acceptance of the vaccines, and governmental and public reactions thereto, the U.S. and global economies, financial markets and consumer and corporate clients and customers, including economic activity, employment levels and market liquidity, as well as the various actions taken in response to the challenges and uncertainties by governments, central banks and others, including us;

•market conditions, including trading volume and volatility in the demand for the products and services we provide, resulting from the effects of COVID-19 or otherwise, possible disruptions in trading, potential deterioration of equity and debt capital markets, impact of significant changes in interest rates and our ability to access the capital markets as needed or on reasonable terms and conditions;

•pricing, commissions and fees, and market position with respect to any of our products and services and those of our competitors;

•the effect of industry concentration and reorganization, reduction of customers, and consolidation;

•liquidity, regulatory, cash and clearing capital requirements and the impact of credit market events, including the impact of COVID-19 and actions taken by governments and businesses in response thereto on the credit markets and interest rates;

•our relationships and transactions with Cantor and its affiliates, including CF&Co, and CCRE, our structure, including BGC Holdings, which is owned by us, Cantor, our employee partners and other partners, and the BGC OpCos, which are owned jointly by us and BGC Holdings, any possible changes to our structure, any related transactions, conflicts of interest or litigation, any impact of Cantor’s results on our credit ratings and associated outlooks, any loans to or from us or Cantor, BGC Holdings, or the BGC OpCos, including the balances and interest rates thereof from time to time and any convertible or equity features of any such loans, CF&Co’s acting as our sales agent or underwriter under our CEO program or other offerings, Cantor’s holdings of the Company’s Debt Securities, CF&Co’s acting as a market maker in the Company’s Debt Securities, CF&Co’s acting as our financial advisor in connection with potential acquisitions, dispositions, or other transactions and our participation in various investments, stock loans or cash management vehicles placed by or recommended by CF&Co;

•the integration of acquired businesses with our other businesses;

•the rebranding of our current businesses or risks related to any potential dispositions of all or any portion of our existing or acquired businesses;

•market volatility as a result of the effects of COVID-19, which may not be sustainable or predictable in future periods;

•economic or geopolitical conditions or uncertainties, the actions of governments or central banks, including the impact of COVID-19 on the global markets and governmental responses, and restrictions on business and commercial activity, uncertainty regarding the nature, timing and consequences of Brexit following the withdrawal process, including potential reduction in investment in the U.K., and the pursuit of trade, border control or other related policies by the U.S. and/or other countries (including U.S.-China trade relations), political and labor unrest in France, Hong Kong, China, and other jurisdictions, conflict in the Middle East, Russia, Ukraine or other jurisdictions, the impact of U.S. government shutdowns, elections, political unrest or stalemates in response to governmental mandates and other restrictions related to COVID-19 in the U.S. or abroad, and the impact of terrorist acts, acts of war or other violence or political unrest, as well as natural disasters or weather-related or similar events, including hurricanes as well as power failures, communication and transportation disruptions, and other interruptions of utilities or other essential services and the impacts of pandemics and other international health emergencies, including COVID-19;

•the effect on our businesses, our clients, the markets in which we operate, our possible restructuring, and the economy in general of changes in the U.S. and foreign tax and other laws, including changes in tax rates,

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repatriation rules, and deductibility of interest, potential policy and regulatory changes in Mexico and other countries, sequestrations, uncertainties regarding the debt ceiling and the federal budget, and other potential political policies;

•the effect on our businesses of changes in interest rates, changes in benchmarks, including the transition away from LIBOR, the level of worldwide governmental debt issuances, austerity programs, government stimulus packages, including those related to COVID-19, increases or decreases in deficits and the impact of increased government tax rates, and other changes to monetary policy, and potential political impasses or regulatory requirements, including increased capital requirements for banks and other institutions or changes in legislation, regulations and priorities;

•extensive regulation of our businesses and customers, changes in regulations relating to financial services companies and other industries, and risks relating to compliance matters, including regulatory examinations, inspections, investigations and enforcement actions, and any resulting costs, increased financial and capital requirements, enhanced oversight, remediation, fines, penalties, sanctions, and changes to or restrictions or limitations on specific activities, including potential delays in accessing markets, including due to our regulatory status and actions, operations, compensatory arrangements, and growth opportunities, including acquisitions, hiring, and new businesses, products, or services;

•factors related to specific transactions or series of transactions, including credit, performance, and principal risk, trade failures, counterparty failures, and the impact of fraud and unauthorized trading;

•the effect on our businesses of any extraordinary transactions, including the possible restructuring of our partnership into a corporate structure, including potential dilution and other impacts;

•costs and expenses of developing, maintaining, and protecting our intellectual property, as well as employment, regulatory, and other litigation and proceedings, and their related costs, including judgments, indemnities, fines, or settlements paid and the impact thereof on our financial results and cash flows in any given period;

•certain financial risks, including the possibility of future losses, reduced cash flows from operations, increased leverage, and the need for short- or long-term borrowings, including from Cantor, our ability to refinance our indebtedness, and changes to interest rates and liquidity or our access to other sources of cash relating to acquisitions, dispositions, or other matters, potential liquidity and other risks relating to our ability to maintain continued access to credit and availability of financing necessary to support our ongoing business needs, on terms acceptable to us, if at all, and risks associated with the resulting leverage, including potentially causing a reduction in our credit ratings and the associated outlooks and increased borrowing costs as well as interest rate and foreign currency exchange rate fluctuations;

•risks associated with the temporary or longer-term investment of our available cash, including in the BGC OpCos, defaults or impairments on our investments, joint venture interests, stock loans or cash management vehicles and collectability of loan balances owed to us by partners, employees, the BGC OpCos or others;

•our ability to enter new markets or develop new products, offerings, trading desks, marketplaces, or services for existing or new clients, including our ability to expand our cryptocurrency offerings including the launch of additional cryptocurrency and digital asset trading offerings in 2022 and efforts to convert certain existing products to a Fully Electronic trade execution, and to induce such clients to use these products, trading desks, marketplaces, or services and to secure and maintain market share, including changes to the likelihood or timing of such efforts due to COVID-19 or other measures;

•the impact of any restructuring or similar transactions on our ability to enter into marketing and strategic alliances and business combinations or other transactions in the financial services and other industries, including acquisitions, tender offers, dispositions, reorganizations, partnering opportunities and joint ventures, the failure to realize the anticipated benefits of any such transactions, relationships or growth and the future impact of any such transactions, relationships or growth on our other businesses and our financial results for current or future periods, the integration of any completed acquisitions and the use of proceeds of any completed dispositions, and the value of and any hedging entered into in connection with consideration received or to be received in connection with such dispositions and any transfers thereof;

•our estimates or determinations of potential value with respect to various assets or portions of our businesses, such as Fenics, including with respect to the accuracy of the assumptions or the valuation models or multiples used;

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•our ability to manage turnover and hire and retain personnel, including brokers, salespeople, managers, technology professionals and other front-office personnel, and departures of senior personnel;

•our ability to expand the use of technology for Hybrid and Fully Electronic trade execution in our product and service offerings;

•our ability to effectively manage any growth that may be achieved, while ensuring compliance with all applicable financial reporting, internal control, legal compliance, and regulatory requirements;

•our ability to identify and remediate any material weaknesses or significant deficiencies in our internal controls which could affect our ability to properly maintain books and records, prepare financial statements and reports in a timely manner, control our policies, practices and procedures, operations and assets, assess and manage our operational, regulatory and financial risks, and integrate our acquired businesses and brokers, salespeople, managers, technology professionals and other front-office personnel;

•the impact of unexpected market moves and similar events;

•information technology risks, including capacity constraints, failures, or disruptions in our systems or those of the clients, counterparties, exchanges, clearing facilities, or other parties with which we interact, including increased demands on such systems and on the telecommunications infrastructure from remote working during the COVID-19 pandemic, cyber-security risks and incidents, compliance with regulations requiring data minimization and protection and preservation of records of access and transfers of data, privacy risk and exposure to potential liability and regulatory focus;

•the effectiveness of our governance, risk management, and oversight procedures and impact of any potential transactions or relationships with related parties;

•the impact of our ESG or “sustainability” ratings on the decisions by clients, investors, ratings agencies, potential clients and other parties with respect to our businesses, investments in us or the market for and trading price of BGC Class A common stock, Company Debt Securities, or other matters;

•the fact that the prices at which shares of our Class A common stock are or may be sold in offerings, acquisitions, or other transactions may vary significantly, and purchasers of shares in such offerings or other transactions, as well as existing stockholders, may suffer significant dilution if the price they paid for their shares is higher than the price paid by other purchasers in such offerings or transactions;

•the impact of reductions to our dividends and distributions and the timing and amounts of any future dividends or distributions, including our ability to meet expectations with respect to payments of dividends and distributions and repurchases of shares of our Class A common stock and purchases or redemptions of limited partnership interests in BGC Holdings, or other equity interests in us or any of our other subsidiaries, including the BGC OpCos, including from Cantor, our executive officers, other employees, partners, and others, and the net proceeds to be realized by us from offerings of shares of BGC Class A common stock and Company Debt Securities; and

•the effect on the markets for and trading prices of our Class A common stock and Company Debt Securities due to COVID-19 and other market factors as well as on various offerings and other transactions, including offerings of our Class A common stock and convertible or exchangeable debt or other securities, our repurchases of shares of our Class A common stock and purchases or redemptions of BGC Holdings limited partnership interests or other equity interests in us or in our subsidiaries, any exchanges by Cantor of shares of our Class A common stock for shares of our Class B common stock, any exchanges or redemptions of limited partnership units and issuances of shares of our Class A common stock in connection therewith, including in corporate or partnership restructurings, our payment of dividends on our Class A common stock and distributions on limited partnership interests in BGC Holdings and the BGC OpCos, convertible arbitrage, hedging, and other transactions engaged in by us or holders of our outstanding shares, Company Debt Securities, share sales and stock pledge, stock loans, and other financing transactions by holders of our shares (including by Cantor or others), including of shares acquired pursuant to our employee benefit plans, unit exchanges and redemptions, corporate or partnership restructurings, acquisitions, conversions of shares of our Class B common stock and our other convertible securities into shares of our Class A common stock, stock pledge, stock loan, or other financing transactions, and distributions of our Class A common stock by Cantor to its partners, including the April 2008 and February 2012 distribution rights shares.

The foregoing risks and uncertainties, as well as those risks and uncertainties discussed under the headings “Item 1A—Risk Factors,” and “Item 7A—Quantitative and Qualitative Disclosures About Market Risk” and elsewhere in this Form 10-K, may cause actual results and events to differ materially from the forward-looking statements.

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OVERVIEW AND BUSINESS ENVIRONMENT

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

Through brands including BGC®, GFI®, Sunrise Brokers™, Poten & Partners®, RP Martin™, and Fenics®, among others, our businesses specialize in the brokerage of a broad range of products, including fixed income such as government bonds, corporate bonds, and other debt instruments, as well as related interest rate derivatives and credit derivatives. We also broker products across FX, equity derivatives and cash equities, energy and commodities, shipping, and futures and options. We have also recently announced our plans to develop new and comprehensive cryptocurrency brokerage offerings. Our businesses also provide a wide variety of services, including trade execution, connectivity solutions, brokerage services, clearing, trade compression, and other post-trade services, information, and other back-office services to a broad assortment of financial and non-financial institutions.

Our integrated platform is designed to provide flexibility to customers with regard to price discovery, execution and processing of transactions, and enables them to use voice, hybrid, or in many markets, fully electronic brokerage services in connection with transactions executed either OTC or through an exchange. Through our Fenics® group of electronic brands, we offer a number of market infrastructure and connectivity services, fully electronic marketplaces, and the fully electronic brokerage of certain products that also may trade via voice and hybrid execution. The full suite of Fenics® offerings includes fully electronic and hybrid brokerage, market data and related information services, trade compression and other post-trade services, analytics related to financial instruments and markets, and other financial technology solutions. Fenics® brands also operate under the names Fenics®, FMX™, BGC Trader™, CreditMatch®, Fenics Market Data™, Fenics GO™, BGC Market Data™, kACE2®, Capitalab®, Swaptioniser®, CBID®, Lucera® and LumeAlfa™.

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

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

As of December 31, 2021, we had approximately 2,100 brokers, salespeople, managers, technology professionals and other front-office personnel across our businesses.

Futures Exchange Group

On July 30, 2021, the Company completed the purchase of the Futures Exchange Group for a purchase price of $4.9 million at closing, plus the cash held at closing by the Futures Exchange Group, and an earn-out, only payable out of our portion of the profits of the Futures Exchange Group, capped at the amount Cantor contributed to the Futures Exchange Group prior to closing.

The Futures Exchange Group acquisition has been determined to be a combination of entities under common control that resulted in a change in the reporting entity. Accordingly, the financial results of the Company have been recast to include the financial results of the Futures Exchange Group in the current and prior periods as if the Futures Exchange Group had always been consolidated. The assets and liabilities of the Futures Exchange Group have been recorded in the Company's consolidated statements of financial condition at the seller's historical carrying value. The purchase of the Futures Exchange Group was accounted for as an equity transaction for the period ended September 30, 2021 (the period in which the transaction occurred).

The following tables summarize the impact of the Futures Exchange Group acquisition to the Company's consolidated statement of financial condition as of December 31, 2020, and to the Company's consolidated statements of operations for the years ended December 31, 2020 and 2019 (in thousands, except per share amounts):

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[[GREPCENT_TABLE]]
[["","December 31, 2020"],["","As Previously Reported","","Retrospective Adjustments","","As Adjusted"],["Total assets","$","3,949,300","","","$","3,942","","","$","3,953,242"],["Total liabilities","$","3,120,397","","","$","874","","","$","3,121,271"],["Total equity","$","808,229","","","$","3,068","","","$","811,297"],["Total liabilities, redeemable partnership interest, and equity","$","3,949,300","","","$","3,942","","","$","3,953,242"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","","Year Ended December 31, 2020","","Year Ended December 31, 2019"],["","","As Previously Reported","","Retrospective Adjustments","","As Adjusted","","As Previously Reported","","Retrospective Adjustments","","As Adjusted"],["Income (loss) from operations before income taxes","","$","77,905","","","$","(5,684)","","","$","72,221","","","$","122,064","","","$","(5,437)","","","$","116,627"],["Consolidated net income (loss)","","$","56,602","","","$","(5,684)","","","$","50,918","","","$","72,253","","","$","(5,437)","","","$","66,816"],["Net income (loss) attributable to noncontrolling interest in subsidiaries","","$","7,694","","","$","(1,838)","","","$","5,856","","","$","24,691","","","$","(1,776)","","","$","22,915"],["Net income (loss) available to common stockholders","","$","48,908","","","$","(3,846)","","","$","45,062","","","$","47,562","","","$","(3,661)","","","$","43,901"],["Basic earnings (loss) per share","","$","0.14","","","$","(0.02)","","","$","0.12","","","$","0.14","","","$","(0.01)","","","$","0.13"],["Diluted earnings (loss) per share","","$","0.13","","","$","(0.01)","","","$","0.12","","","$","0.13","","","$","(0.01)","","","$","0.12"]]
[[/GREPCENT_TABLE]]

Additionally, the consolidated statements of comprehensive income (loss), consolidated statements of cash flows and consolidated statements of changes in equity have been adjusted to reflect these retrospective adjustments.

Fenics

For the purposes of this document and subsequent SEC filings, all of our higher margin, technology driven businesses are referred to as Fenics. In the first quarter of 2021, we began to categorize our Fenics businesses as Fenics Markets and Fenics Growth Platforms and we have conformed our prior period comparisons of the components of our Fenics business to this new categorization. Fenics Markets includes the fully electronic portion of BGC's brokerage businesses, data, software and post-trade revenues that are unrelated to Fenics Growth Platforms, as well as Fenics Integrated revenues. Fenics Growth Platforms includes Fenics UST, Fenics GO, Lucera, Fenics FX and other newer standalone platforms. Revenue generated from data, software and post-trade attributable to Fenics Growth Platforms are included within their related businesses.

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

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

The combination of wider adoption of hybrid and fully electronic execution and our competitive advantage in terms of technology and experience has contributed to our strong growth in electronically traded products. We continue to invest in our

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high-growth, high-margin, technology-driven businesses, including our standalone fully electronic Fenics Growth Platforms. Fenics has exhibited strong growth over the past several years, and we believe that this growth has outpaced the wholesale brokerage industry. We expect this trend to accelerate as we continue to convert more of our Voice/Hybrid execution into higher-margin, technology-driven execution across our Fenics platforms and grow our Fenics Growth Platforms.

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

We continue to invest in our Fenics Growth Platforms, which currently include:

•Fenics UST, one of the largest CLOB platforms for U.S. Treasuries, had ADV growth of 65% during the fourth quarter of 2021, outpacing the overall market. Fenics UST CLOB market share increased approximately 600 basis points from a year ago to over 20% in the fourth quarter, and represented 21% of the CLOB market in December 2021. CLOB market share is from Greenwich Associates and BGC’s internal estimates. From the third quarter onward, Greenwich Associates updated its methodology for calculating CLOB market share to more accurately reflect CLOB-only trading volumes. Fenics UST is estimated to have saved our clients over $30 million in the fourth quarter and over $269 million from January 2019 through December 2021. Fenics UST's revenue growth was driven by new product offerings, more traders using the platform and higher volumes. Additionally, Fenics UST saw robust demand for its newer electronic T-bills offering, with a five-fold increase in ADV quarter-over-quarter, which represented as estimated 15% of the electronic U.S. Treasury Bill market.

•Fenics GO, our global options electronic trading platform, provides live, real-time, and tradeable two-way electronic liquidity for exchange-listed futures and options, such as Eurex Euro Stoxx 50 Index Options, Euro Stoxx Banks Index Options, Nikkei 225 Index Options, Hang Seng Chinese Enterprise Index Options (HSCEI), DAX Index Options, and Korea Composite Stock Price Index Options (KOSPI). Fenics GO electronic liquidity providers include Susquehanna International Securities (SIG), which joined DRW, Lighthouse, Citadel Securities, IMC, Maven Securities, Optiver and Akuna Capital as electronic liquidity providers. Fenics GO has integrated Fenics' existing electronic platform MatchBox into its client offering. MatchBox is an online platform that automates the trading, booking, and lifecycle management of global equity derivatives contracts. The integration of these two electronic platforms provides Fenics GO's clients with a comprehensive electronic equity solution. Fenics GO is the only anonymous multilateral electronic platform for block-sized listed equity index options, giving it a unique advantage in helping clients satisfy their best execution requirements. Additionally, Fenics GO launched new MSCI index options products in January 2022, and expects to launch new cryptocurrency options later in the year.

•Lucera, our infrastructure and software business, offers the trading community direct connectivity to each other. Lucera has a fully built, scalable infrastructure that provides clients electronic trading connectivity with their counterparties within days, as opposed to months, and at a significantly lower cost. Lucera is comprised of two main business lines, LUMEMarkets and LuceraConnect. LUMEMarkets is our low latency aggregator, providing a single access point across multiple fragmented marketplaces and exchanges (FX, Rates, Futures and Credit markets). LuceraConnect provides on-demand connectivity to over one thousand endpoints across buy-side clients, trading firms, marketplaces, and exchanges. LuceraConnect has quickly become the industry standard for the FX market and is rapidly expanding in other asset classes. Lucera also supports the distribution of Fenics trading platforms, including Fenics UST, Fenics FX and Fenics MIDFX. In the fourth quarter, Lucera onboarded new institutional and large bank clients, including in Lucera's cryptocurrency infrastructure business, which launched in the third quarter. Winning new clients and expanding existing relationships adds to Lucera's highly recurring and compounding subscription revenue model. Lucera is providing connectivity to the world's deepest crypto liquidity pools via its world-class infrastructure.

•Fenics' Credit offering, Portfolio Match, our recently deployed session-based, matching platform, currently supports U.S. and European investment grade credit, as well as European high yield credit sessions.

•Fenics FX, our ultra-low latency electronic FX trading platform, generated strong double-digit volume and revenue growth during the quarter, outpacing FX ECN peers and the overall market.

•Our expanded Fenics FX platforms, which has businesses included under both Fenics Markets and Fenics Growth Platforms, including MIDFX, Spot FX and FX Options, and non deliverable forwards.

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•Capitalab, which has businesses included under both Fenics Markets and Fenics Growth Platforms.

Revenue growth from Fenics Growth Platforms continued to significantly outpace the overall business. Fenics Growth Platforms revenue grew 89.3% to $13.7 million in the fourth quarter of 2021 compared to the year prior and 60.2% to $45.5 million for the year ended December 31, 2021. Collectively, our newer Fenics Growth Platform offerings, such as those listed above, are not yet fully up to scale, and are not yet generating significant revenues. Over time, we expect these new products and services to become profitable, high-margin businesses as their scale and revenues increase, all else equal.

Fenics Markets highlights for the fourth quarter of 2021 include:

•Fenics MIDFX, our leading wholesale FX hedging platform, grew its revenue by 20% versus the prior year, driven by strong volumes across spot FX and Asian NDFs. Fenics MID technology provides a highly efficient fully electronic platform for large global broker-dealers to hedge risk in a neutral environment.

•Fenics Market Data signed over 40 new contracts during the fourth quarter, with the total contracted value more than doubling compared to last year. Fenics Market Data has seen continued success in its new Regulatory Services offering, with a robust pipeline leading into 2022. Fenics Market Data which has a highly recurring and compounding subscription revenue model, continues to grow at a solid double-digit pace.

•Capitalab's NDF Match business, our advanced web-based matching platform that helps clients reduce foreign exchange exposure, more than doubled its ADV and revenue in the fourth quarter versus the prior year.

Fenics Markets revenue grew 13.7% to $87.7 million in the fourth quarter of 2021 compared to the year prior and 22.6% to $355.8 million for the year ended December 31, 2021.

Net Revenues in our Fenics businesses increased 20.2% to $101.4 million in the fourth quarter and 25.9% to $401.3 million for the year ended December 31, 2021 compared to the prior year period. Fenics revenue comprised 23.0% and 21.8% of overall revenue, excluding Insurance brokerage, for the fourth quarter of 2021 and for the year ended December 31, 2021, respectively.

Total revenues from our high-margin data, software, and post-trade business, which is predominately comprised of recurring revenue, were up 15.7% to $24.1 million in the fourth quarter of 2021 and 9.8% to $90.0 million for the year ended December 31, 2021 over the prior year period. Fenics brokerage revenues increased by 31.4% to $311.2 million for the year ended December 31, 2021. Going forward, we expect Fenics to become an even more valuable part of BGC as it continues to grow. We continue to analyze how to optimally configure our Voice/Hybrid and fully electronic businesses.

FMX

On November 3, 2021, we announced FMX, which combines Fenics UST’s leading cash U.S. Treasury business with a state-of-the-art U.S. Rates futures platform in development. Following the announcement and consultation with our global clients and potential strategic partners, FMX has expanded the scope of its futures product offering to cover the entire U.S. Rates Futures complex. This includes launching U.S. Treasury, Eurodollar, and SOFR futures contracts, concurrently, in the fourth quarter of 2022.

Cryptocurrency Initiatives

We continued to expand our cryptocurrency offerings during the quarter. Lucera onboarded new clients to its cryptocurrency connectivity and trade aggregation software. kACE, leveraging its award-winning Analytics, Pricing and Distribution software, onboarded new clients to its new cryptocurrency options offering. Furthermore, we will be launching additional cryptocurrency and digital asset trading products throughout 2022, which will be underpinned by Fenics' state-of-the-art technology. Our futures exchange was among the first exchanges to be permitted to list cryptocurrency derivative contracts. We are uniquely positioned to capitalize on the significant and growing cryptocurrency opportunity.

Possible Corporate Conversion

The Company continues to explore a possible conversion into a simpler corporate structure. Our board and committees have hired advisors and are reviewing the potential structure and details of such conversion.

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Cost Reduction Program

The Company is continuing to examine how best to operate our business with the goal of creating efficiencies and reducing expenses. During the first quarter of 2020, we implemented a $35.0 million cost reduction program to reduce our compensation-related cost base and streamline our operations, which resulted in $33.5 million of U.S. GAAP compensation charges recorded under this program for the year ended December 31, 2020. In addition, the Company incurred $32.1 million of U.S. GAAP compensation charges in the year ended December 31, 2021, as a result of continuing to examine how best to operate our business and working to further streamline our operations. U.S. GAAP items recorded include:

•Certain severance charges incurred in connection with headcount reductions as part of a broad cost reduction program; and

•Certain compensation and non-compensation-related charges incurred as part of a broad cost reduction program. Such U.S. GAAP items may include charges for exiting leases and/or other long-term contracts as part of cost-saving initiatives.

Insurance Disposition

On November 1, 2021, the Company successfully completed the Insurance Business Disposition and, after closing adjustments, received $534.9 million in gross cash proceeds, subject to limited post-closing adjustments. The investment in the Insurance brokerage business generated an internal rate of return of 21.2% for our shareholders. As of December 31, 2021, we have repurchased and redeemed 71.5 million shares and units since announcing the sale on May 26, 2021. The sale of the business did not represent a strategic shift that would have a major effect on the Company’s operations and financial results and was, therefore, not classified as discontinued operations. CF&Co served as advisor to the Company in connection with the transaction, and as a result, $4.4 million of banking fees was paid to Cantor upon closing of the transaction. For further information regarding the sale of our Insurance brokerage business, please see our Current Report on Form 8-K filed with the SEC on November 1, 2021, as well as Note 5—"Divestitures" to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.

The Insurance brokerage business contributed $19.9 million and $178.3 million in total revenues for the three and twelve months ended December 31, 2021, respectively. No impairment charge was recorded for the sale of the Insurance brokerage business for the three and twelve months ended December 31, 2021 as the carrying amount of the net assets was less than the fair value less costs to sell.

Unvested equity and other awards previously granted by BGC to employees of its Insurance brokerage business were converted into the right to receive a cash payment from BGC; a significant portion of these awards was 50% vested and paid in cash at closing, with the remaining 50% vesting and to be paid in cash two years after closing. The remaining portion of these awards will have been 100% vested and paid in cash by two years after the closing. The payments after closing are only made if the applicable employee remains an employee of the Insurance brokerage business.

Financial Services Industry

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

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

Due largely to the impacts of the global financial crisis of 2008-2009, our businesses faced more challenging market conditions from 2009 until the second half of 2016. Accommodative monetary policies were enacted by several major central banks, including the Federal Reserve, Bank of England, Bank of Japan and the European Central Bank, in response to the global financial crises. These policies resulted in historically low levels of volatility and interest rates across many of the financial markets in which we operate. The global credit markets also faced structural issues, such as increased bank capital

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requirements under Basel III. Consequently, these factors contributed to lower trading volumes in our Rates and Credit asset classes across most geographies in which we operated.

From mid-2016 until the first quarter of 2020, the overall financial services industry benefited from sustained economic growth, lower unemployment rates in most major economies, higher consumer spending, the modification or repeal of certain U.S. regulations, and higher overall corporate profitability. The trend towards digitalization and electronification within the industry contributed to higher overall volumes and transaction count in fully electronic execution. From the second quarter of 2020 onward, concerns about the future trade relationship between the U.K. and the EU after Brexit, a slowdown in global growth driven by the outbreak of COVID-19, inflation expectation impact on U.S. rates volumes, and an increase in trade protectionism were tempered by monetary and fiscal stimulus. In addition, during 2021, as the global economy recovered from the COVID-19 pandemic, higher inflation across the U.S. and other G8 countries led central banks to begin and/or announce tapering of asset purchases under quantitative easing programs, as well as drive market expectations of future central bank rate hikes.

Impact of COVID-19

In recent years, we have been adversely affected as a result of COVID-19 and its impact on the macroeconomic environment. For example, surges in global COVID-19 cases caused market-wide disruptions, particularly across our Voice/Hybrid business in December 2021. During the COVID-19 pandemic, our fully electronic businesses have been a key growth driver and competitive advantage as many of our brokers and clients have adapted to working remotely. Additional information with respect to the impact of COVID-19 on our businesses, results of operations and human capital resources is contained elsewhere in this Annual Report on Form 10-K.

Impact of COVID-19 on Employees

As a global intermediary to financial markets, BGC is considered an essential business in many of its various global locations where key employees are thus able to operate out of its primary offices around the world. We have nonetheless taken proactive measures intended to protect our employees and clients during this global pandemic. These policies and practices seek to protect the health, safety and welfare of our workforce while enabling employees to maintain a high level of performance. Certain of these items are summarized below:

•We activated our Business Continuity Plan in the first quarter of 2020. The vast majority of front-office personnel are working in a firm office and most BGC staff members are attending work in the office several days a week, while working remotely the other part of the week. We follow all applicable laws and regulations to ensure both compliance with the COVID-19 requirements and the safety of our employees.

•We provide ongoing informational COVID-19-related messages and notices. We disseminated our COVID-19 policies and FAQs on a regular basis; they are also posted on the Company's intranet sites.

•Where applicable, we are applying more frequent and vigorous cleaning and sanitation measures and providing personal protective equipment (PPE).

•Internal and external meetings are sometimes held in person, as well as conducted virtually and via phone calls.

•We have deferred some corporate events and participation in industry conferences.

•Our medical plans have waived applicable member cost sharing for all medically necessary diagnostic testing related to COVID-19.

•We have reminded employees about our Employee Assistance Program and the ways it can assist them during this challenging time.

•We provide paid leave in accordance with its policies and applicable COVID-19-related laws and regulations.

We continue to take significant steps to protect our employees and encourage them all to get vaccinated.

Impact of COVID-19 on the Company’s Results

Revenues

Voice/Hybrid and/or Higher-Margin, Technology-Driven Fenics Businesses

We recorded total revenue of $2,015.4 million for the year ended December 31, 2021, 2.0% lower than a year ago.

For the year ended December 31, 2021, Fenics net revenues of $401.3 million, increased 25.9% driven by a $65.5 million, or 22.6%, increase in Fenics Markets and a $17.1 million, or 60.2%, increase in Fenics Growth Platforms.

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Certain key items are summarized below:

•Revenues across Rates, Credit, FX, Equity derivatives and cash equities, Energy and commodities are generally correlated with corresponding industry volumes.

•Rates benefited from strong growth across BGC's U.S. government bonds, inflation products, listed rates, and emerging market rates.

•Energy & Commodities generated revenue growth, driven by strong performance in BGC's environmental brokerage business and heightened volatility across the energy markets.

•Concerns around U.S. inflation and the ease of asset purchases in the fourth quarter by the Federal Reserve, drove interest rate volatility higher and supported global Rates trading volumes.

•Conversely, quantitative easing measures taken by central banks around the world have lowered market volumes.

•Uncertainty around global energy supplies led to large price rallies and volatility in these products, which increased secondary market trading volumes.

We expect record levels of global debt issuance, interest rate volatility, tapering of central bank asset purchases, and an improving U.S. and global economy to provide tailwinds to our Rates business going forward.

Overall Fenics

•BGC’s Fenics net revenues increased 25.9% for the year ended December 31, 2021 compared to the prior year.

•Fenics has benefited and is expected to continue to benefit from trends towards electronic execution and opportunities created by algorithmic trading and automation.

•The dislocations caused by COVID-19 have resulted in an even greater demand for the Company’s electronic execution. We believe that the driver of this demand is the best-in-class market liquidity that only integrated global firms like BGC can provide.

•This benefit may be tempered by temporary shifts by traders toward voice execution in certain markets during periods of extreme market turbulence.

•BGC’s data, software, and post-trade businesses are predominantly comprised of recurring revenues.

Expenses

BGC’s compensation expenses increased for the year ended December 31, 2021, due to the sale of the Insurance brokerage business, which included one-off compensation charges and sale-related expenses totaling $168.6 million, the majority of which was non-cash. BGC’s non-compensation expenses decreased due to lower interest expense, professional and consulting fees, and other expenses. These expense reductions were partially offset by higher selling and promotion charges, as COVID-19 restrictions have relaxed across many of the major geographies in which BGC operates.

BGC has recorded or may potentially record amounts for certain expenses that are higher than they otherwise would have been due to the overall impact of the pandemic. Some of these items include:

•Non-cash impairment charges with respect to assets;

•Non-cash mark-to-market adjustments for non-marketable investments;

•Certain severance charges incurred in connection with headcount reductions as part of a broad cost reduction program;

•Certain compensation and non-compensation-related charges incurred as part of a broad cost reduction program. Such U.S. GAAP items may include charges for exiting leases and/or other long-term contracts as part of cost-saving initiatives;

•Expenses relating to setting up and maintaining remote and/or back-up locations; and

•Communication expenses related to additional voice and data connections.

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Some of the above items may be partially offset by certain tax benefits. It is difficult to predict the amounts of any these items or when they might be recorded because they may depend on the duration, severity, and overall impact of the pandemic.

Capital and Liquidity

On February 15, 2022, our Board declared a $0.01 dividend for the fourth quarter of 2021. Additionally, BGC Holdings continues to have reduced distributions to or on behalf of its partners. The distributions to or on behalf of partners will at least cover their related tax payments. Whether any given post-tax amount is equivalent to the amount received by a stockholder also on an after-tax basis depends upon stockholders’ and partners’ domiciles and tax status. Our 2022 capital allocation priorities are to return capital to stockholders and to continue investing in our high growth Fenics businesses. Previously, we were deeply dividend-centric; going forward, we plan to prioritize share and unit repurchases over dividends and distributions. The Board will reevaluate whether to increase the dividend in the first quarter of 2022.

For further information on the balance sheet, liquidity and capital, see "Liquidity and Capital Resources" herein.

Brexit

On January 1, 2021, the U.K. formally left the EU and U.K.-EU trade became subject to a new agreement that was concluded in December of 2020. The exit from the EU is commonly referred to as Brexit. Financial services fall outside of the scope of this trade agreement. Instead, the relationship will largely be determined by a series of “equivalence decisions,” each of which would grant mutual market access for a limited subset of financial services where either party finds the other party has a regulatory regime that achieves similar outcomes to its own. It is currently unknown if or when equivalence decisions will be taken. In March 2021, the U.K. and EU agreed a Memorandum of Understanding on Financial Services Regulatory Cooperation which creates a structure for dialogue but does not include commitments on equivalence.

In light of ongoing uncertainties, market participants are still adjusting. The exact impact of Brexit on the U.K.-EU flow of financial services therefore remains unknown. This same uncertainty applies to the consequences for the economies of the U.K. and the EU member states as a result of the U.K.’s withdrawal from the EU.

We implemented plans to ensure continuity of service in Europe and continue to have regulated offices in place in many of the major European markets. As part of our Brexit strategy, ownership of BGC Madrid, Copenhagen and Frankfurt & GFI Paris, Madrid and Dublin branches was transferred to Aurel BGC SAS (a French-based operation and therefore based in the EU) in July 2020. We have been generally increasing our footprint in the EU which includes the establishment of a new branch office of Aurel BGC SAS in Milan and a new office in Monaco under a new local Monaco subsidiary.

Regardless of these and other mitigating measures, our European headquarters and largest operations are in London, and market access risks and uncertainties have had and could continue to have a material adverse effect on our customers, counterparties, businesses, prospects, financial condition and results of operations. Furthermore, in the future the U.K. and EU’s regulation may diverge, which could disrupt and increase the costs of our operations, and result in a loss of existing levels of cross-border market access.

Industry Consolidation

In recent years, there has been significant consolidation among the interdealer-brokers and wholesale brokers with which we compete. We expect to continue to compete with the electronic markets, post-trade and information businesses of NEX, that are part of CME now, through the various offerings on our Fenics platform. We will also continue to compete with TP ICAP and Tradition across various Voice/Hybrid brokerage marketplaces as well as via Fenics.

Additionally, there has been an increase in acquisitions of OTC trading platforms by exchanges and electronic marketplaces such as ICE buying BondPoint, Deutsche Börse buying 360T, and CBOE buying Hotspot, MarketAxess buying LiquidityEdge, Tradeweb buying Nasdaq U.S. Fixed Income Electronic Trading Platform, etc. We view the recent consolidation in the industry favorably, as we expect it to provide additional operating leverage to our businesses in the future.

Growth Drivers

As a wholesale intermediary in the financial services industry, our businesses are driven primarily by secondary trading volumes in the markets in which we broker, the size and productivity of our front-office headcount including brokers, salespeople, managers, technology professionals and other front-office personnel, regulatory issues, and the percentage of our revenues we are able to generate by Fully Electronic means. BGC’s revenues tend to have low correlation in the short and medium-term with global bank and broker-dealer sales and trading revenues, which reflect bid-ask spreads and mark-to-market movements, as well as industry volumes in both the primary and secondary markets.

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

Overall Market Volumes and Volatility

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

Rates volumes in particular are influenced by market volumes and, in certain instances, volatility. Historically low and negative interest rates across the globe have significantly reduced the overall trading appetite for rates products. As a result of central bank policies and actions, many sovereign bonds continue to trade at or close to negative yields, especially in real terms. Also, weighing on yields and rates volumes are global central bank quantitative easing programs. The programs depress rates volumes because they entail central banks buying government securities or other securities in the open market in an effort to promote increased lending and liquidity and bring down long-term interest rates. When central banks hold these instruments, they tend not to trade or hedge, thus lowering rates volumes across cash and derivatives markets industry-wide. Following the market dislocation and ongoing pandemic, major central banks such as the U.S. Federal Reserve, ECB, Bank of Japan, Bank of England, and Swiss National Bank restarted quantitative easing programs in 2020, and continue to maintain historically low interest rates, keep key short-term interest rates low, or a combination of both. Recent heightened levels of inflation in 2020, meant major central banks have begun and/or expect to begin tapering asset purchases and plan to hike interest rates, which historically has led to an increase in rates volumes.

Additional factors have weighed on market volumes in the products we broker. For example, the Basel III accord, implemented in late 2010 by the G-20 central banks, is a global regulatory framework on bank capital adequacy, stress testing and market liquidity risk that was developed with the intention of making banks more stable in the wake of the financial crisis by increasing bank liquidity and reducing bank leverage. The accord, which will take effect on January 1, 2023, has already required most large banks in G-20 nations to hold approximately three times as much Tier 1 capital as was required under the previous set of rules. These capital rules have made it more expensive for banks to hold non-sovereign debt assets on their balance sheets, and as a result, analysts say that banks have reduced their proprietary trading activity in corporate and asset-backed fixed income securities as well as in various other OTC cash and derivative instruments. We believe that this has further reduced overall market exposure and industry volumes in many of the products we broker, particularly in Credit.

For the year ended December 31, 2021, industry volumes were higher year-over-year across Rates and Energy and Commodities, mixed across Equity derivatives and cash equities and generally lower across FX and Credit. BGC’s brokerage revenues, excluding Insurance, were down by 2.6% year-on-year. Below is an expanded discussion of the volume and growth drivers of our various brokerage product categories.

Rates Volumes and Volatility

Our Rates business is influenced by a number of factors, including global sovereign issuances, secondary trading and the hedging of these sovereign debt instruments. The amount of global sovereign debt outstanding remains at very high levels; the level of secondary trading and related hedging activity was higher during 2021, as the prior year was severely impacted by the COVID-19 pandemic, which led to the dislocations of traders and lower risk appetites. In addition, according to SIFMA and the Federal Reserve Bank of New York, the average daily volume of various U.S. Treasuries and Treasury bills, among primary dealers was 3% higher in 2021 as compared to a year earlier. Additionally, interest rate derivative volumes were up 13% and 15% at ICE and the CME, respectively, all according to company press releases. In comparison, our revenue from Fenics Rates increased 43.7%, while our overall Rates revenues were up 2.6% as compared to a year earlier to $558.5 million.

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

Overall, analysts and economists expect the absolute level of sovereign debt outstanding to remain at elevated levels for the foreseeable future as governments finance their future deficits and roll over their sizable existing debt. Additionally, yields on benchmark U.S. Treasuries exhibited volatility during the fourth quarter of 2021 on inflation concerns and central bank tapering plans. While most economists expect that the effects of various forms of quantitative easing being undertaken by the various major central banks will continue to negatively impact financial market volumes, the tapering of asset purchases by central banks, interest rate hikes, along with elevated levels of government debt issuance, are expected to provide tailwinds to our Rates business.

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FX Volumes and Volatility

Global FX volumes were generally lower during 2021. Volumes for CME FX futures and options and CME EBS spot FX were down 7%, and 14%, respectively. In comparison, revenue from our Fenics FX platforms increased 47.3%, while our overall FX revenues decreased by 4.4% to $301.3 million.

Insurance Brokerage

The overall Insurance brokerage business, which we sold to The Ardonagh Group on November 1, 2021, included Ed Broking and Besso, as well as our aviation and space insurance brokerage business, Piiq. The pre-tax loss relating to Insurance was $53.9 million and $25.6 million for the years ended December 31, 2021 and 2020, respectively. Insurance posted total revenues of $19.9 million and $178.3 million, respectively, for both the fourth quarter and full year 2021.

Equity derivatives and cash equities

Global equity volumes were higher during 2021. Research from Raymond James indicated that the average daily volumes of U.S. cash equities and U.S. options were up 4% and 33%, respectively, as compared to a year earlier, while average daily volume of European cash equities shares were down 6% (in notional value). Over the same timeframe, Eurex average daily volumes of equity derivatives were up 10%, while Euronext equity derivative index volumes decreased by 10%. BGC’s equity business primarily consists of equity derivatives. Our overall revenues from Equity derivatives and cash equities decreased by 2.8% to $247.7 million.

Credit Volumes

Our Credit business is impacted by the level of global corporate bond issuance and the direction of interest rates. Global credit derivative market turnover has declined over the last few years due to the introduction of rules and regulations around the clearing of credit derivatives in the U.S. and elsewhere, along with non-uniform regulation across different geographies. In addition, many of our large bank customers continue to reduce their inventory of bonds and other credit products in order to comply with Basel III and other international financial regulations. During 2021, primary dealer average daily volume for corporate bonds (excluding commercial paper) was down by 10% according to Bloomberg and the Federal Reserve Bank of New York. Total notional traded credit derivatives as reported by the International Swaps and Derivatives Association — a reflection of the OTC derivatives market — were down by 2%, from a year earlier. In comparison, our overall Credit revenues decreased by 12.8% to $287.6 million.

Energy and Commodities

Energy and commodities volumes were generally higher during 2021 compared with the year earlier. CME and ICE energy futures and options volumes were up 16% and 7%, respectively, driven by heightened volatility across the energy markets. In comparison, BGC’s energy and commodities revenues increased by 1.3% to $296.5 million.

FINANCIAL OVERVIEW

Revenues

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

Brokerage

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

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We offer our brokerage services in five broad product categories: Rates, FX, Credit, Energy & commodities, Equity derivatives and cash equities classes. We previously offered Insurance brokerage services, however, we sold our Insurance brokerage business to The Ardonagh Group on November 1, 2021. The chart below details brokerage revenues by product category and by Voice/Hybrid versus Fully Electronic (in thousands):

[[GREPCENT_TABLE]]
[["","For the Year Ended December 31,"],["","2021","","2020","","2019"],["Brokerage revenue by product:"],["Rates","$","558,507","","","$","544,094","","","$","594,884"],["FX","301,328","","","315,253","","","370,318"],["Energy and commodities","296,458","","","292,641","","","288,697"],["Credit","287,608","","","329,904","","","306,713"],["Equity derivatives and cash equities","247,673","","","254,702","","","251,339"],["Insurance","178,087","","","182,707","","","155,790"],["Total brokerage revenues","$","1,869,661","","","$","1,919,301","","","$","1,967,741"],["Brokerage revenue by product (percentage):"],["Rates","29.9","%","","28.3","%","","30.2","%"],["FX","16.1","","","16.4","","","18.8"],["Energy and commodities","15.9","","","15.2","","","14.7"],["Credit","15.4","","","17.2","","","15.6"],["Equity derivatives and cash equities","13.2","","","13.3","","","12.8"],["Insurance","9.5","","","9.6","","","7.9"],["Total brokerage revenues","100.0","%","","100.0","%","","100.0","%"],["Brokerage revenue by type:"],["Voice/Hybrid","$","1,558,503","","","$","1,682,521","","","$","1,763,114"],["Fully Electronic","311,158","","","236,780","","","204,627"],["Total brokerage revenues","$","1,869,661","","","$","1,919,301","","","$","1,967,741"],["Brokerage revenue by type (percentage):"],["Voice/Hybrid","83.4","%","","87.7","%","","89.6","%"],["Fully Electronic","16.6","","","12.3","","","10.4"],["Total brokerage revenues","100.0","%","","100.0","%","","100.0","%"]]
[[/GREPCENT_TABLE]]

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

Rates

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

FX

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

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Credit

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

Energy and Commodities

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

Insurance

We provided wholesale insurance and reinsurance broking solutions and underwriting services across the global marketplace, operating through the brands Ed Broking, Besso, Piiq Risk Partners and Junge, as well as the group’s managing general agents Cooper Gay, Globe Underwriting and Epsilon. We sold our Insurance brokerage business on November 1, 2021 (see Note 5—"Divestitures" to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information).

Equity Derivatives and Cash Equities

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

Fees from Related Parties

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

Data, software and post-trade

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

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

Our Capitalab NDF Match business is an advanced matching platform that helps clients offset their fixing risk in non-deliverable forward portfolios. Additionally, Capitalab provides compression services that are designed to bring greater capital and operational efficiency to the global derivatives market. It assists clients in managing the growing cost of holding derivatives, while helping them to meet their regulatory mandates. Through the Swaptioniser service for portfolio compression of Bilateral and Cleared Interest Rate Swaptions, Interest Rate Swaps, Caps and Floors and FX Products, Capitalab looks to simplify the complexities of managing large quantities of derivatives, to help promote sustainable growth, lower systemic risk and improve resiliency in the industry. Furthermore, as an approved compression services provider at LCH, a combined

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multiproduct Rates solution is provided across the entire cleared and non-cleared portfolio, increasing the overall efficiency, where delta offsets can be leveraged across Rates products and desks. Additionally, Capitalab’s Initial Margin Optimization service allows participants to reduce their bilateral initial margin and CCP IM with the efficiency of automated trade processing.

Interest Income

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

Other Revenues

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

Expenses

Compensation and Employee Benefits

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

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

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

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

Certain LPUs have a stated vesting schedule and do not receive quarterly allocations of net income. The grant-date fair value of these LPUs is amortized to expense ratably over the awards’ expected vesting periods. The non-cash equity-based amortization expense is reflected as a component of “Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our consolidated statements of operations.

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

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compensation and allocations of net income to limited partnership units and FPUs” in our consolidated statements of operations.

In addition, as part of our compensation plan, certain employees are granted RSUs. The grant-date fair value of RSUs is amortized to expense ratably over the awards’ stated vesting periods. The non-cash equity-based amortization expense is reflected as a component of “Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our consolidated statements of operations.

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

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

Other Operating Expenses

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

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

Other Income (Losses), Net

Gain (Loss) on Divestiture and Sale of Investments

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

Gains (Losses) on Equity Method Investments

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

Other Income (Loss)

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

Provision (Benefit) for Income Taxes

We incur income tax expenses or benefit based on the location, legal structure and jurisdictional taxing authorities of each of our subsidiaries. Certain of the Company’s entities are taxed as U.S. partnerships and are subject to the UBT in New York City. U.S. federal and state income tax liability or benefit related to the partnership income or loss, with the exception of UBT, rests with the partners (see Note 2—“Limited Partnership Interests in BGC Holdings and Newmark Holdings” for discussion of partnership interests), rather than the partnership entity. The Company’s consolidated financial statements include

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U.S. federal, state and local income taxes on the Company’s allocable share of the U.S. results of operations. Outside of the U.S., we operate principally through subsidiary corporations subject to local income taxes.

REGULATORY ENVIRONMENT

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

LIQUIDITY

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

HIRING AND ACQUISITIONS

Key drivers of our revenue are front-office producer headcount and average revenue per producer. We believe that our strong technology platform and unique compensation structure have enabled us to use both acquisitions and recruiting to profitably grow at a faster rate than our largest competitors since our formation in 2004. We reduced front office headcount with a focus on underperforming or less profitable brokers, which helped improve our average revenue per producer.

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

Our average revenue per front-office employee has historically declined year-over-year for the period immediately following significant headcount increases, and the additional brokers and salespeople generally achieve significantly higher productivity levels in their second or third year with the Company. Excluding Insurance brokerage, as of December 31, 2021, our front-office headcount was approximately 2,100 brokers, salespeople, managers, technology professionals and other front-office personnel, down 8.1% from 2,297 a year ago. Compared to the prior year, average revenue per front-office employee for the year ended December 31, 2021 increased by 8.1% to $811 thousand from $750 thousand.

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

Since 2019, our acquisitions have included Ed Broking, Ginga Petroleum, Algomi and the Futures Exchange Group.

On July 30, 2021, we completed the purchase of the Futures Exchange Group from Cantor, which represents our futures exchange and related clearinghouse.

On March 6, 2020, we completed the acquisition of Algomi, a software company operating under a SaaS model that provides technology to bond market participants to improve their workflow and liquidity by data aggregation, pre-trade information analysis and execution facilitation.

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

On January 31, 2019, we completed the acquisition of Ed Broking, an independent Lloyd's of London insurance broker with a strong reputation across accident and health, aerospace, cargo, energy, financial and political risks, marine, professional and executive risks, property and casualty, specialty and reinsurance. Ed Broking became part of the overall Insurance brokerage business and was subsequently sold to The Ardonagh Group on November 1, 2021 as part of the Insurance Business Disposition.

FINANCIAL HIGHLIGHTS

For the year ended December 31, 2021, income from operations before income taxes increased by $104.3 million, or 144.4%, to $176.5 million compared to the prior year period, primarily due to a $312.9 million gain on the sale of the Insurance brokerage business in the fourth quarter of 2021. Total revenues for the year ended December 31, 2021 decreased

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$41.4 million, or 2.0%, to $2,015.4 million compared to the prior year period. The first quarter of 2020 was unique in that it reflected record market volatility and volumes driven by the onset of the COVID-19 pandemic. We continued to make excellent progress this year with respect to our investments in Fenics. Our Fenics growth accelerated during the year ended December 31, 2021, with revenues increasing by 25.9%, to $401.3 million and represented a record 21.8% of our total revenues, excluding the Insurance brokerage business, increasing from 17.0% for the year ended December 31, 2020. The growth in our Fenics platforms continued to significantly outpace the overall business as we added new clients and expanded our product offerings. As we continue to grow our higher margin businesses, we are well positioned for increased profitability.

Brokerage revenues for the year ended December 31, 2021 decreased by $49.6 million, or 2.6%, to $1,869.7 million compared to the prior year period, which was primarily driven by Credit revenues, which decreased by $42.3 million, to $287.6 million, for the year ended December 31, 2021, due to significantly lower industry-wide trading volumes. For the year ended December 31, 2021, our FX revenues decreased $13.9 million, to $301.3 million, and revenues from Equity derivatives and cash equities decreased by $7.0 million, to $247.7 million. The Insurance brokerage business revenues decreased by $4.6 million, or 2.5%, to $178.1 million, for the year ended December 31, 2021, primarily due to the sale of the Insurance brokerage business during the fourth quarter of 2021. Rates revenues increased by $14.4 million, to $558.5 million, for the year ended December 31, 2021 as compared to the prior year period, driven by favorable trading environment across many of the Rates products BGC brokers, and revenues from Energy and commodities increased by $3.8 million, to $296.5 million for the year ended December 31, 2021, led by BGC's leading environmental brokerage business and heightened volatility across the energy complex. Revenues in our Fenics business increased 25.9% to $401.3 million for the year ended December 31, 2021, compared to the prior year period, driven by strong growth across both Fenics Markets and Fenics Growth Platforms.

Beginning in the first quarter of 2021, BGC categorized its Fenics businesses as Fenics Markets and Fenics Growth Platforms. Fenics Markets includes the Fully Electronic portions of BGC’s brokerage businesses, data, software and post-trade revenues that are unrelated to Fenics Growth Platforms, as well as Fenics Integrated revenues. Fenics Growth Platforms includes Fenics UST, Fenics GO, Lucera, Fenics FX and other newer standalone platforms. Revenues generated from data, software and post-trade attributable to Fenics Growth Platforms are included within their related businesses. Fenics Markets and Fenics Growth Platforms compete with companies such as CME, Tradeweb and MarketAxess. Fenics Markets revenues comprised $355.8 million, an improvement of $65.5 million, or 22.6%, which reflected higher conversion of Voice and Hybrid execution to Fenics brokerage, increased contribution from Fenics Integrated, and strong growth across Rates, FX and Market Data. Fenics Growth Platforms revenues comprised $45.5 million, an increase of $17.1 million, or 60.2%, driven by strong growth in Fenics UST, Lucera and Fenics GO. During the second quarter of 2020, we introduced Fenics Integrated, which seamlessly integrates hybrid liquidity with customer electronic orders. We believe that Fenics Integrated will enhance profit margins by further incentivizing the Company’s brokers and clients to automate execution. We believe that Fenics Integrated will create superior real-time information, improving the robustness and value of Fenics Market Data, which will accelerate our growth. As we expand our product offerings, optimize our commercial agreements, and add new clients across our electronic platforms, we continue to expect profitability in our newer Fenics Growth Platforms, which includes Fenics UST, Fenics GO, Lucera, Fenics FX and other newer standalone platforms. During the quarter we announced FMX, which combines Fenics UST's leading U.S. Treasury business with a state-of-the-art U.S. Rates futures platform in development. Following the announcement and consultation with our global clients and strategic partners, FMX will expand the scope of its futures product offering to cover the entire U.S. Rates Futures complex. This includes launching U.S. Treasury, Eurodollar, and SOFR futures contracts, concurrently, in the fourth quarter of 2022.

Total expenses for the year ended December 31, 2021 increased by $186.7 million to $2,178.2 million compared to the prior year period, primarily driven by a $211.4 million increase in total compensation expenses. Within total compensation, our Equity-based compensation and allocations of net income to limited partnership units and FPUs increased by $72.6 million due to an increase in charges related to grants of exchangeability and issuance of shares of BGC Class A common stock, while expenses for Compensation and employee benefits increased by $138.8 million, primarily due to the sale of the Insurance brokerage business, which included one-off compensation charges and sale related expenses totaling $168.6 million, the majority of which was non-cash, partially offset by the impact of lower commission revenues on variable compensation. Our non-compensation expenses decreased by $24.7 million, or 3.7%, primarily driven by a continued focus on tighter cost management as well as the impact of COVID-19, including lower occupancy and equipment expenses and reduced professional and consulting fees. There was also a decrease in other expenses related to a decrease in amortization expense on intangible assets, a decrease in other provisions, and a decrease in expenses due to the sale of the Insurance brokerage business, partially offset by an increase in legal settlement and litigation costs, as well as an increase related to Charity Day contributions. Further, there was a decrease in interest expense related to the 5.125% Senior Notes, which were repaid in May 2021, lower interest expense related to the borrowings on the Revolving Credit Agreement, partially offset by interest expense related to the 4.375% Senior Notes issued in July 2020.

Total other income (losses), net for the year ended December 31, 2021 increased $332.4 million to $339.4 million compared to the prior year period, primarily due to a $312.9 million gain on the sale of the Insurance brokerage business in the fourth quarter of 2021, an increase related to mark-to-market movements on other assets, a gain recognized on a litigation

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resolution in the first quarter of 2021, an increase due to an impairment of an equity-method investment recorded in the first quarter of 2020 compared to no impairment recorded in the year ended December 31, 2021, an increase in other recoveries related to a settlement recognized in the fourth quarter of 2021, an increase related to gains on equity method investments, and an increase related to fair value adjustments on investments held recorded in the year ended December 31, 2020, partially offset by a decrease related to COVID-19 recoveries in the year ended December 31, 2020.

On February 15, 2022, our Board declared a 0.01 dividend for the fourth quarter. Effective with the first quarter of 2020 dividend, and for all quarterly periods in 2020 and 2021, the Board reduced the quarterly dividend out of an abundance of caution in order to strengthen the Company’s balance sheet as the global capital markets faced difficult and unprecedented macroeconomic conditions related to the global pandemic. Additionally, BGC Holdings continues to have reduced distributions to or on behalf of its partners. The distributions to or on behalf of partners will at least cover their related tax payments. Whether any given post-tax amount is equivalent to the amount received by a stockholder also on an after-tax basis depends upon stockholders’ and partners’ domiciles and tax status. BGC believes that these steps will allow the Company to prioritize its financial strength. Our 2022 capital allocation priorities are to use the remaining proceeds from the Insurance Business Disposition and other sources of liquidity to return capital to stockholders and to continue investing in its high growth Fenics businesses. We plan to prioritize share and unit repurchases over dividends and distributions.

RESULTS OF OPERATIONS

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

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[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2021","","2020","","2019"],["","Actual Results","","Percentage of Total Revenues","","Actual Results","","Percentage of Total Revenues","","Actual Results","","Percentage of Total Revenues"],["Revenues:"],["Commissions","$","1,541,900","","","76.5","%","","$","1,567,668","","","76.2","%","","$","1,645,818","","","78.2","%"],["Principal transactions","327,761","","","16.3","","","351,633","","","17.1","","","321,923","","","15.3"],["Total brokerage revenues","1,869,661","","","92.8","","","1,919,301","","","93.3","","","1,967,741","","","93.5"],["Fees from related parties","14,856","","","0.7","","","25,754","","","1.3","","","29,442","","","1.4"],["Data, software and post-trade","89,963","","","4.5","","","81,920","","","4.0","","","73,166","","","3.5"],["Interest and dividend income","21,977","","","1.1","","","12,332","","","0.6","","","18,319","","","0.9"],["Other revenues","18,907","","","0.9","","","17,454","","","0.8","","","15,938","","","0.7"],["Total revenues","2,015,364","","","100.0","","","2,056,761","","","100.0","","","2,104,606","","","100.0"],["Expenses:"],["Compensation and employee benefits","1,271,340","","","63.1","","","1,132,557","","","55.1","","","1,127,041","","","53.6"],["Equity-based compensation and allocations of net income to limited partnership units and FPUs\u00b9","256,164","","","12.7","","","183,545","","","8.9","","","170,625","","","8.1"],["Total compensation and employee benefits","1,527,504","","","75.8","","","1,316,102","","","64.0","","","1,297,666","","","61.7"],["Occupancy and equipment","188,322","","","9.3","","","192,837","","","9.4","","","186,111","","","8.8"],["Fees to related parties","24,030","","","1.2","","","23,618","","","1.1","","","19,778","","","0.9"],["Professional and consulting fees","67,884","","","3.4","","","74,072","","","3.6","","","93,071","","","4.4"],["Communications","117,502","","","5.8","","","121,646","","","5.9","","","120,037","","","5.7"],["Selling and promotion","38,048","","","1.9","","","38,234","","","1.9","","","81,829","","","3.9"],["Commissions and floor brokerage","64,708","","","3.2","","","59,376","","","2.9","","","63,617","","","3.0"],["Interest expense","69,329","","","3.5","","","76,607","","","3.7","","","60,246","","","2.9"],["Other expenses","80,888","","","4.0","","","89,045","","","4.3","","","118,671","","","5.7"],["Total expenses","2,178,215","","","108.1","","","1,991,537","","","96.8","","","2,041,026","","","97.0"],["Other income (losses), net:"],["Gains (losses) on divestitures and sale of investments","312,941","","","15.5","","","394","","","0.0","","","18,421","","","0.9"],["Gains (losses) on equity method investments","6,706","","","0.3","","","5,023","","","0.2","","","4,115","","","0.2"],["Other income (loss)","19,705","","","1.0","","","1,580","","","0.1","","","30,511","","","1.4"],["Total other income (losses), net","339,352","","","16.8","","","6,997","","","0.3","","","53,047","","","2.5"],["Income (loss) from operations before income taxes","176,501","","","8.7","","","72,221","","","3.5","","","116,627","","","5.5"],["Provision (benefit) for income taxes","23,013","","","1.1","","","21,303","","","1.0","","","49,811","","","2.3"],["Consolidated net income (loss)","$","153,488","","","7.6","%","","$","50,918","","","2.5","%","","$","66,816","","","3.2","%"],["Less: Net income (loss) operations attributable to noncontrolling interest in subsidiaries","29,481","","","1.4","","","5,856","","","0.3","","","22,915","","","1.1"],["Net income (loss) available to common stockholders","$","124,007","","","6.2","%","","$","45,062","","","2.2","%","","$","43,901","","","2.1","%"]]
[[/GREPCENT_TABLE]]

________________________

1The components of Equity-based compensation and allocations of net income to limited partnership units and FPUs are as follows (in thousands):

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[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2021","","2020","","2019"],["","Actual Results","","Percentage of Total Revenues","","Actual Results","","Percentage of Total Revenues","","Actual Results","","Percentage of Total Revenues"],["Issuance of common stock and grants of exchangeability","$","128,107","","","6.4","%","","$","84,966","","","4.1","%","","$","100,948","","","4.8","%"],["Allocations of net income","34,335","","","1.7","","","14,006","","","0.7","","","20,491","","","1.0"],["LPU amortization","78,596","","","3.9","","","74,282","","","3.6","","","41,721","","","2.0"],["RSU amortization","15,126","","","0.7","","","10,291","","","0.5","","","7,465","","","0.3"],["Equity-based compensation and allocations of net income to limited partnership units and FPUs","$","256,164","","","12.7","%","","$","183,545","","","8.9","%","","$","170,625","","","8.1","%"]]
[[/GREPCENT_TABLE]]

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Revenues

Brokerage Revenues

Total brokerage revenues decreased by $49.6 million, or 2.6%, to $1,869.7 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. Commission revenues decreased by $25.8 million, or 1.6%, to $1,541.9 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. Principal transactions revenues decreased by $23.9 million, or 6.8%, to $327.8 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020.

The decrease in total brokerage revenues was primarily driven by decreases in Credit, FX, Equity derivatives and cash equities, and Insurance, partially offset by an increase in revenues from Rates, and Energy and commodities.

Our Credit revenues decreased by $42.3 million, or 12.8%, to $287.6 million for the year ended December 31, 2021, as compared to the year ended December 31, 2020. This decrease was mainly due to lower industry wide volumes.

Our FX revenues decreased by $13.9 million, or 4.4%, to $301.3 million for the year ended December 31, 2021, as compared to the year ended December 31, 2020. This decrease was primarily driven by lower industry volumes.

Our brokerage revenues from Equity derivatives and cash equities decreased by $7.0 million, or 2.8%, to $247.7 million for the year ended December 31, 2021, as compared to the year ended December 31, 2020. This decrease was primarily driven by lower volumes across European equity derivatives.

Our brokerage revenues from Insurance decreased by $4.6 million, or 2.5%, to $178.1 million for the year ended December 31, 2021, as compared to the year ended December 31, 2020. This decrease was primarily due to the sale of the Insurance brokerage business on November 1, 2021.

Our brokerage revenues from Rates increased by $14.4 million, or 2.6%, to $558.5 million for the year ended December 31, 2021, as compared to the year ended December 31, 2020. The increase in Rates revenues was primarily driven by improved activity across U.S. government bonds, inflation products, listed rates, and emerging market rates.

Our brokerage revenues from Energy and commodities increased by $3.8 million, or 1.3%, to $296.5 million for the year ended December 31, 2021, as compared to the year ended December 31, 2020. This increase was primarily driven by BGC's leading environmental brokerage business and heightened volatility across the energy complex.

Fees from Related Parties

Fees from related parties decreased by $10.9 million, or 42.3% to $14.9 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This was primarily driven by a decrease in technology service revenues in connection with services provided to Cantor.

Data, Software and Post-Trade

Data, software and post-trade revenues increased by $8.0 million, or 9.8%, to $90.0 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This increase was primarily driven by new business contracts and Lucera expanding its client base.

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Interest and Dividend Income

Interest and dividend income increased by $9.6 million, or 78.2%, to $22.0 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This increase was primarily driven by an increase in dividend income and higher interest income earned on employee loans.

Other Revenues

Other revenues increased by $1.5 million, or 8.3% to $18.9 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This increase was primarily driven by an increase in revenues from underwriting fees, partially offset by a decrease in both consulting and sublease income for Poten & Partners.

Expenses

Compensation and Employee Benefits

Compensation and employee benefits expense increased by $138.8 million, or 12.3%, to $1,271.3 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This increase was primarily due to the sale of the Insurance brokerage business, which included one-off compensation charges and sale related expenses totaling $168.6 million, the majority of which was non-cash, partially offset by the impact of lower commission revenues on variable compensation.

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

Equity-based compensation and allocations of net income to limited partnership units and FPUs increased by $72.6 million, or 39.6%, to $256.2 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This was primarily driven by an increase in grants of exchangeability and issuance of Class A common stock and an increase in allocations of net income to limited partnership units and FPUs due to the gain on sale of the Insurance brokerage business.

Occupancy and Equipment

Occupancy and equipment expense decreased by $4.5 million, or 2.3%, to $188.3 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This decrease was primarily driven by a decrease in rent and occupancy expenses, software licenses and maintenance, and decreases in office and utilities expenses, partially offset by an increase in fixed asset impairments and an increase in amortization expense on developed software.

Fees to Related Parties

Fees to related parties increased by $0.4 million, or 1.7%, to $24.0 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. Fees to related parties are allocations paid to Cantor for administrative and support services.

Professional and Consulting Fees

Professional and consulting fees decreased by $6.2 million, or 8.4%, to $67.9 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This decrease was primarily driven by a decrease in consulting fees, partially offset by an increase in legal fees.

Communications

Communications expense decreased by $4.1 million, or 3.4%, to $117.5 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. As a percentage of total revenues, communications expense remained relatively unchanged from the prior year period.

Selling and Promotion

Selling and promotion expense decreased by $0.2 million, or 0.5%, to $38.0 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020.

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Commissions and Floor Brokerage

Commissions and floor brokerage expense increased by $5.3 million, or 9.0%, to $64.7 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This increase was primarily driven by higher exchange fees in the year ended December 31, 2021 and an increase in trades executed compared to the year ended December 31, 2020.

Interest Expense

Interest expense decreased by $7.3 million, or 9.5%, to $69.3 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This decrease was primarily driven by lower interest expense related to the 5.125% Senior Notes, which were repaid in May 2021, lower interest expense related to borrowings on the Revolving Credit Agreement, partially offset by interest expense related to the 4.375% Senior Notes issued in July 2020.

Other Expenses

Other expenses decreased by $8.2 million, or 9.2%, to $80.9 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020, which was primarily related to a decrease in amortization expense on intangible assets, a decrease in other provisions, and a decrease in expenses related to the sale of the Insurance brokerage business during the fourth quarter of 2021, partially offset by an increase in settlements and an increase related to Charity Day contributions.

Other Income (Losses), Net

Gains (Losses) on Divestitures and Sale of Investments

For the year ended December 31, 2021 we had a gain of $312.9 million as a result of the sale of the Insurance brokerage business. For the year ended December 31, 2020, we had a gain of $394 thousand on divestitures.

Gains (Losses) on Equity Method Investments

Gains (losses) on equity method investments increased by $1.7 million, to a gain of $6.7 million, for the year ended December 31, 2021 as compared to a gain of $5.0 million for the year ended December 31, 2020. Gains (losses) on equity method investments represent our pro-rata share of the net gains or losses on investments over which we have significant influence, but which we do not control.

Other Income (Loss)

Other income (loss) increased by $18.1 million, to $19.7 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This was primarily driven by an increase related to mark-to-market movements on other assets, a gain recognized on a litigation resolution during the year ended December 31, 2021, an increase due to an impairment of an equity method investment recorded in the year ended December 31, 2020 compared to no impairment recorded in the year ended December 31, 2021, an increase in recoveries related to a settlement recognized in the fourth quarter of 2021, and an increase related to fair value adjustments on investments carried under the measurement alternative. These increases were partially offset by a decrease related to COVID-19 recoveries in the year ended December 31, 2020.

Provision (Benefit) for Income Taxes

Provision (benefit) for income taxes increased by $1.7 million, or 8.0%, to $23.0 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This increase was primarily driven by an increase in both pre-tax earnings and the ownership interest in the operating partnership, partially offset by the nontaxable gain on the disposition of the Insurance brokerage business as well as the release of historical tax positions related to periods for which the statute of limitations has expired. In addition, the change in the geographical and business mix of earnings can impact our consolidated effective tax rate from period-to-period.

Net Income (Loss) Attributable to Noncontrolling Interest in Subsidiaries

Net income (loss) attributable to noncontrolling interest in subsidiaries increased by $23.6 million, to $29.5 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020.

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Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

Revenues

Brokerage Revenues

Total brokerage revenues decreased by $48.4 million, or 2.5%, to $1,919.3 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. Commission revenues decreased by $78.2 million, or 4.7%, to $1,567.7 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. Principal transactions revenues increased by $29.7 million, or 9.2%, to $351.6 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019.

The decrease in total brokerage revenues was primarily driven by decreases in FX and Rates, partially offset by an increase in revenues from Insurance, Credit, Energy and commodities, and Equity derivatives and cash equities.

Our FX revenues decreased by $55.1 million, or 14.9%, to $315.3 million for the year ended December 31, 2020. This decrease was primarily driven by lower industry volumes due to quantitative easing undertaken by several major central banks and uniformly lower global interest rates.

Our brokerage revenues from Rates decreased by $50.8 million, or 8.5%, to $544.1 million for the year ended December 31, 2020. The decrease in Rates revenues was primarily driven by lower industry volumes in certain markets due to quantitative easing undertaken by several major central banks and uniformly lower global interest rates.

Our brokerage revenues from Insurance increased by $26.9 million, or 17.3%, to $182.7 million for the year ended December 31, 2020. This increase was primarily due to organic growth, as previously hired brokers and salespeople ramped up production and benefited from favorable pricing trends for insurance renewals.

Our Credit revenues increased by $23.2 million, or 7.6%, to $329.9 million for the year ended December 31, 2020. This increase was mainly due to greater trading volumes.

Our brokerage revenues from Energy and commodities increased by $3.9 million, or 1.4%, to $292.6 million for the year ended December 31, 2020. This increase was primarily driven by organic growth.

Our brokerage revenues from equity derivatives and cash equities increased by $3.4 million, or 1.3%, to $254.7 million for the year ended December 31, 2020. This was primarily driven by organic growth.

Fees from Related Parties

Fees from related parties decreased by $3.7 million, or 12.5% to $25.8 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019.

Data, Software and Post-Trade

Data, software and post-trade revenues increased by $8.8 million, or 12.0%, to $81.9 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. This increase was primarily driven by Lucera’s Connect platform winning new SaaS client contracts, the acquisition of Algomi, as well as an increase in revenues from post-trade services.

Interest and Dividend Income

Interest and dividend income decreased by $6.0 million, or 32.7%, to $12.3 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. This decrease was primarily due to a decrease in dividend income and lower interest earned on deposits.

Other Revenues

Other revenues increased by $1.5 million, or 9.5% to $17.5 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. This increase was primarily driven by an increase in consulting income for Poten & Partners.

Expenses

Compensation and Employee Benefits

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Compensation and employee benefits expense increased by $5.5 million, or 0.5%, to $1,132.6 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. The main drivers of this increase were costs associated with the implementation of a cost reduction program designed to reduce future expenses and streamline operations, partially offset by the impact of lower brokerage revenues on variable compensation.

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

Equity-based compensation and allocations of net income to limited partnership units and FPUs increased by $12.9 million, or 7.6%, to $183.5 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. This increase was primarily driven by an increase in equity award amortization.

Occupancy and Equipment

Occupancy and equipment expense increased by $6.7 million, or 3.6%, to $192.8 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. This increase was primarily driven by higher software license costs, amortization expense on developed software, and fixed asset impairments. This was partially offset by a decrease in rent expense related to the build-out phase of BGC’s new U.K. — based headquarters in the prior year period.

Fees to Related Parties

Fees to related parties increased by $3.8 million, or 19.4%, to $23.6 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. Fees to related parties are allocations paid to Cantor for administrative and support services, such as accounting, occupancy, and legal.

Professional and Consulting Fees

Professional and consulting fees decreased by $19.0 million, or 20.4%, to $74.1 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. This decrease was primarily driven by a decrease in legal and consulting fees.

Communications

Communications expense increased by $1.6 million, or 1.3%, to $121.6 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019.

Selling and Promotion

Selling and promotion expense decreased by $43.6 million, or 53.3%, to $38.2 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. This decrease was primarily a result of a reduction in travel and entertainment expenses due to a continued focus on tighter cost management as well as the impact of COVID-19.

Commissions and Floor Brokerage

Commissions and floor brokerage expense decreased by $4.2 million, or 6.7%, to $59.4 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. Commissions and floor brokerage expense tends to move in line with brokerage revenues.

Interest Expense

Interest expense increased by $16.4 million, or 27.2%, to $76.6 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. This increase was primarily driven by interest expense related to the 3.750% Senior Notes issued in September 2019 and interest expense on the 4.375% Senior Notes issued in July 2020, partially offset by lower interest expense related to the borrowings on BGC’s Revolving Credit Agreement.

Other Expenses

Other expenses decreased by $29.6 million, or 25.0%, to $89.0 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019, which was primarily related to a decrease in settlements, and partially offset by an increase in other provisions.

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Other Income (Losses), Net

Gains (Losses) on Divestitures and Sale of Investments

For the year ended December 31, 2020, we had a gain of $394 thousand on divestitures. For the year ended December 31, 2019, there was a gain of $18.4 million as a result of the sale of CSC Commodities.

Gains (Losses) on Equity Method Investments

Gains (losses) on equity method investments increased by $0.9 million, to a gain of $5.0 million, for the year ended December 31, 2020 as compared to a gain of $4.1 million for the year ended December 31, 2019. Gains (losses) on equity method investments represent our pro-rata share of the net gains or losses on investments over which we have significant influence, but which we do not control.

Other Income (Loss)

Other income (loss) decreased by $28.9 million, or 94.8%, to $1.6 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. This was primarily driven by a decrease related to fair value adjustments on investments carried under the measurement alternative. There was also a decrease related the mark-to-market and/or hedging on the Nasdaq shares.

Provision (Benefit) for Income Taxes

Provision (benefit) for income taxes decreased by $28.5 million, or 57.2%, to $21.3 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019. This decrease was primarily driven by lower pre-tax earnings, as well as a change in the geographical and business mix of earnings. In addition, our consolidated effective tax rate can vary from period-to-period depending on, among other factors, the geographic and business mix of our earnings.

Net Income (Loss) Attributable to Noncontrolling Interest in Subsidiaries

Net income (loss) attributable to noncontrolling interest in subsidiaries decreased by $17.1 million, or 74.4%, to $5.9 million for the year ended December 31, 2020 as compared to the year ended December 31, 2019, which was primarily driven by a decrease in earnings.

QUARTERLY RESULTS OF OPERATIONS

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

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[[GREPCENT_TABLE]]
[["","December 31, 2021","","September 30, 2021","","June 30, 2021","","March 31, 2021","","December 31, 2020","","September 30, 2020","","June 30, 2020","","March 31, 2020"],["Revenues:"],["Commissions","$","349,896","","","$","367,016","","","$","389,768","","","$","435,220","","","$","377,146","","","$","352,027","","","$","382,640","","","$","455,855"],["Principal transactions","73,004","","","73,997","","","81,997","","","98,763","","","73,687","","","65,182","","","99,453","","","113,311"],["Fees from related parties","3,356","","","3,470","","","4,245","","","3,785","","","4,857","","","8,814","","","6,562","","","5,521"],["Data, software and post-trade","24,137","","","22,238","","","21,602","","","21,986","","","20,860","","","21,523","","","20,139","","","19,398"],["Interest and dividend income","4,442","","","3,042","","","11,455","","","3,038","","","(783)","","","2,418","","","6,536","","","4,161"],["Other revenues","6,756","","","3,984","","","3,383","","","4,784","","","3,659","","","5,078","","","3,776","","","4,941"],["Total revenues","461,591","","","473,747","","","512,450","","","567,576","","","479,426","","","455,042","","","519,106","","","603,187"],["Expenses:"],["Compensation and employee benefits","434,807","","","257,604","","","270,586","","","308,343","","","258,866","","","244,648","","","283,949","","","345,094"],["Equity-based compensation and allocations of net income to limited partnership units and FPUs","85,889","","","78,490","","","58,290","","","33,495","","","80,515","","","33,007","","","27,819","","","42,204"],["Total compensation and employee benefits","520,696","","","336,094","","","328,876","","","341,838","","","339,381","","","277,655","","","311,768","","","387,298"],["Occupancy and equipment","46,724","","","46,049","","","47,159","","","48,390","","","47,763","","","45,924","","","47,652","","","51,498"],["Fees to related parties","8,456","","","5,674","","","4,518","","","5,382","","","5,028","","","7,728","","","5,335","","","5,527"],["Professional and consulting fees","14,813","","","16,836","","","20,029","","","16,206","","","18,233","","","15,755","","","19,994","","","20,090"],["Communications","27,611","","","29,305","","","30,776","","","29,810","","","30,481","","","30,097","","","30,538","","","30,530"],["Selling and promotion","12,356","","","9,586","","","8,618","","","7,488","","","6,896","","","5,942","","","6,673","","","18,723"],["Commissions and floor brokerage","16,563","","","15,908","","","14,308","","","17,929","","","13,646","","","12,933","","","13,520","","","19,277"],["Interest expense","16,061","","","16,735","","","18,680","","","17,853","","","21,811","","","19,665","","","17,625","","","17,506"],["Other expenses","16,465","","","24,614","","","23,772","","","16,037","","","21,600","","","28,367","","","21,508","","","17,570"],["Total expenses","679,745","","","500,801","","","496,736","","","500,933","","","504,839","","","444,066","","","474,613","","","568,019"],["Other income (losses), net:"],["Gain (loss) on divestiture and sale of investments","312,941","","","92","","","(92)","","","\u2014","","","403","","","(9)","","","\u2014","","","\u2014"],["Gains (losses) on equity method investments","2,101","","","1,816","","","1,323","","","1,466","","","1,354","","","1,527","","","1,119","","","1,023"],["Other income (loss)","7,862","","","4,513","","","1,924","","","5,406","","","1,687","","","4,779","","","1,129","","","(6,015)"],["Total other income (losses), net","322,904","","","6,421","","","3,155","","","6,872","","","3,444","","","6,297","","","2,248","","","(4,992)"],["Income (loss) from operations before income taxes","104,750","","","(20,633)","","","18,869","","","73,515","","","(21,969)","","","17,273","","","46,741","","","30,176"],["Provision (benefit) for income taxes","15,957","","","(6,692)","","","(1,191)","","","14,939","","","(6,729)","","","8,558","","","8,599","","","10,875"],["Consolidated net income (loss)","$","88,793","","","$","(13,941)","","","$","20,060","","","$","58,576","","","$","(15,240)","","","$","8,715","","","$","38,142","","","$","19,301"],["Less: Net income (loss) attributable to noncontrolling interest in subsidiaries","12,340","","","(2,539)","","","3,820","","","15,860","","","(11,211)","","","(135)","","","10,986","","","6,216"],["Net income (loss) available to common stockholders","$","76,453","","","$","(11,402)","","","$","16,240","","","$","42,716","","","$","(4,029)","","","$","8,850","","","$","27,156","","","$","13,085"]]
[[/GREPCENT_TABLE]]

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

[[GREPCENT_TABLE]]
[["","December 31, 2021","","September 30, 2021","","June 30, 2021","","March 31, 2021","","December 31, 2020","","September 30, 2020","","June 30, 2020","","March 31, 2020"],["Brokerage revenue by product:"],["Rates","$","131,732","","","$","128,508","","","$","136,474","","","$","161,793","","","$","124,495","","","$","119,325","","","$","133,034","","","$","167,240"],["FX","72,112","","","72,976","","","72,807","","","83,433","","","73,213","","","73,281","","","74,393","","","94,366"],["Energy and commodities","71,527","","","74,328","","","74,735","","","75,868","","","71,706","","","65,871","","","71,326","","","83,738"],["Credit","65,969","","","58,983","","","72,609","","","90,047","","","68,882","","","68,053","","","95,780","","","97,189"],["Equity derivatives and cash equities","61,671","","","54,715","","","60,825","","","70,462","","","63,718","","","47,410","","","61,777","","","81,797"],["Insurance","19,889","","","51,503","","","54,315","","","52,380","","","48,819","","","43,269","","","45,783","","","44,836"],["Total brokerage revenues","$","422,900","","","$","441,013","","","$","471,765","","","$","533,983","","","$","450,833","","","$","417,209","","","$","482,093","","","$","569,166"],["Brokerage revenue by product (percentage):"],["Rates","31.1","%","","29.1","%","","28.9","%","","30.3","%","","27.6","%","","28.6","%","","27.6","%","","29.4","%"],["FX","17.1","","","16.5","","","15.4","","","15.6","","","16.2","","","17.6","","","15.4","","","16.6"],["Energy and commodities","16.9","","","16.9","","","15.8","","","14.2","","","15.9","","","15.8","","","14.8","","","14.6"],["Credit","15.6","","","13.4","","","15.4","","","16.9","","","15.3","","","16.3","","","19.9","","","17.1"],["Equity derivatives and cash equities","14.6","","","12.4","","","12.9","","","13.2","","","14.2","","","11.3","","","12.8","","","14.4"],["Insurance","4.7","","","11.7","","","11.6","","","9.8","","","10.8","","","10.4","","","9.5","","","7.9"],["Total brokerage revenues","100.0","%","","100.0","%","","100.0","%","","100.0","%","","100.0","%","","100.0","%","","100.0","%","","100.0","%"],["Brokerage revenue by type:"],["Voice/Hybrid","$","345,681","","","$","367,992","","","$","396,480","","","$","448,350","","","$","387,305","","","$","358,418","","","$","423,697","","","$","513,101"],["Fully Electronic","77,219","","","73,021","","","75,285","","","85,633","","","63,528","","","58,791","","","58,396","","","56,065"],["Total brokerage revenues","$","422,900","","","$","441,013","","","$","471,765","","","$","533,983","","","$","450,833","","","$","417,209","","","$","482,093","","","$","569,166"],["Brokerage revenue by type (percentage):"],["Voice/Hybrid","81.7","%","","83.4","%","","84.0","%","","84.0","%","","85.9","%","","85.9","%","","87.9","%","","90.1","%"],["Fully Electronic","18.3","","","16.6","","","16.0","","","16.0","","","14.1","","","14.1","","","12.1","","","9.9"],["Total brokerage revenues","100.0","%","","100.0","%","","100.0","%","","100.0","%","","100.0","%","","100.0","%","","100.0","%","","100.0","%"]]
[[/GREPCENT_TABLE]]

LIQUIDITY AND CAPITAL RESOURCES

Balance Sheet

Our balance sheet and business model are not capital intensive. Our assets consist largely of cash and cash equivalents, collateralized and uncollateralized short-dated receivables and less liquid assets needed to support our business. Longer-term capital (equity and notes payable) is held to support the less liquid assets and potential capital investment opportunities. Total assets as of December 31, 2021 were $3.3 billion, a decrease of 15.5% as compared to December 31, 2020. The decrease in total assets was driven by a decrease in Cash segregated under regulatory requirements as well as Accrued commissions and other receivables, net primarily due to the Insurance Business Disposition. We maintain a significant portion of our assets in Cash and cash equivalents and Securities owned, with our liquidity (which we define as Cash and cash equivalents, Reverse repurchase agreements, Marketable securities and Securities owned, less Securities loaned and Repurchase Agreements) as of December 31, 2021 of $594.8 million. See “Liquidity Analysis” below for a further discussion of our liquidity. Our Securities owned were $40.8 million as of December 31, 2021, compared to $58.6 million as of December 31, 2020. Our Marketable securities were $0.4 million as of December 31, 2021 compared to $0.3 million as of December 31, 2020. We had no Repurchase agreements as of December 31, 2021 and 2020. Further, we did not have any Securities loaned or Reverse repurchase agreements as of December 31, 2021 and 2020.

As part of our cash management process, we may enter into tri-party reverse repurchase agreements and other short-term investments, some of which may be with Cantor. As of December 31, 2021 and 2020, there were no reverse repurchase agreements outstanding.

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Additionally, in August 2013, the Audit Committee authorized us to invest up to $350 million in an asset-backed commercial paper program for which certain Cantor entities serve as placement agent and referral agent. The program issues short-term notes to money market investors and is expected to be used from time to time as a liquidity management vehicle. The notes are backed by assets of highly rated banks. We are entitled to invest in the program so long as the program meets investment policy guidelines, including policies relating to ratings. Cantor will earn a spread between the rate it receives from the short-term note issuer and the rate it pays to us on any investments in this program. This spread will be no greater than the spread earned by Cantor for placement of any other commercial paper note in the program. As of December 31, 2021 and 2020, we had no investments in the program.

Funding

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

•increase the regulatory net capital necessary to support operations;

•support continued growth in our businesses;

•effect acquisitions, strategic alliances, joint ventures and other transactions;

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

•respond to competitive pressures.

Acquisitions and financial reporting obligations related thereto may impact our ability to access longer term capital markets funding on a timely basis and may necessitate greater short-term borrowings in the interim. This may impact our credit rating or our costs of borrowing. We may need to access short-term capital sources to meet business needs from time to time, including, but not limited to, conducting operations; hiring or retaining brokers, salespeople, managers, technology professionals and other front-office personnel; financing acquisitions; and providing liquidity, including in situations where we may not be able to access the capital markets in a timely manner when desired by us. Accordingly, we cannot guarantee that we will be able to obtain additional financing when needed on terms that are acceptable to us, if at all. In addition, as a result of regulatory actions, our registration statements under the Securities Act will be subject to SEC review prior to effectiveness, which may lengthen the time required for us to raise capital, potentially reducing our access to the capital markets or increasing our cost of capital.

As discussed above, our liquidity remains strong at $594.8 million as of December 31, 2021, which reflects, gross cash proceeds received for the Insurance Business Disposition, ordinary movements in working capital, repurchases of BGC Class A common stock and LPUs, cash paid with respect to employee bonuses, tax payments, our continued investment in Fenics Growth Platforms, and the maturity of the 5.125% Senior Notes paid in full.

On November 1, 2021, BGC closed the sale of its Insurance brokerage business to the Ardonagh Group for gross proceeds of $534.9 million, subject to limited post-closing adjustments. The investment in the Insurance brokerage business generated an internal rate of return of 21.2% for our shareholders. The proceeds from the Insurance Business Disposition provides us with significant resources to continue repurchasing shares and to accelerate Fenics growth. Since the announced sale of the Insurance brokerage business in May 2021, BGC has repurchased and redeemed 71.5 million shares of BGC Class A common stock and LPUs as of December 31, 2021. In addition, a portion of these proceeds was used to fully repay the $300.0 million outstanding borrowings under the Company's Revolving Credit Agreement on November 1, 2021, which had been borrowed during the year. This repayment along with the maturity of the 5.125% Senior Notes, which were paid in full on May 27, 2021, reduced our outstanding Notes payable and other borrowings by $263.1 million as of December 31, 2021 compared to the prior year.

On February 15, 2022, our Board declared a $0.01 dividend for the fourth quarter of 2021. Additionally, BGC Holdings continues to have reduced distributions to or on behalf of its partners. The distributions to or on behalf of partners will

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at least cover their related tax payments. Whether any given post-tax amount is equivalent to the amount received by a stockholder also on an after-tax basis depends upon stockholders’ and partners’ domiciles and tax status. BGC believes that these steps will allow the Company to prioritize its financial strength. Our 2022 capital allocation priorities are to return capital to stockholders and to continue investing in our high growth Fenics businesses. Previously, we were deeply dividend-centric; going forward, we plan to prioritize share and unit repurchases over dividends and distributions. The Board will reevaluate whether to increase the dividend in the first quarter of 2022.

Notes Payable, Other and Short-term Borrowings

Unsecured Senior Revolving Credit Agreement

On November 28, 2018, we entered into the Revolving Credit Agreement with Bank of America, N.A., as administrative agent, and a syndicate of lenders, which replaced the existing committed unsecured senior revolving credit agreement. The maturity date of the Revolving Credit Agreement was November 28, 2020 and the maximum revolving loan balance is $350.0 million. Borrowings under this agreement bear interest at either LIBOR or a defined base rate plus additional margin. On December 11, 2019, we entered into an amendment to the new unsecured Revolving Credit Agreement. Pursuant to the amendment, the maturity date was extended to February 26, 2021. On February 26, 2020, the Company entered into a second amendment to the unsecured revolving credit agreement, pursuant to which, the maturity date was extended by two years to February 26, 2023. The size of the Revolving Credit Agreement, along with the interest rate on the borrowings therefrom, remained unchanged. On November 1, 2021, the Company repaid in full the $300.0 million borrowings outstanding under the Revolving Credit Agreement, which had been borrowed during the year. As of December 31, 2021 and 2020, there were no borrowings outstanding under the new unsecured Revolving Credit Agreement. The average interest rate on the outstanding borrowings was 2.09% and 2.88% for the years ended December 31, 2021 and 2020, respectively. We may draw down on the Revolving Credit Agreement to provide flexibility in the normal course to meet ongoing operational cash needs, and other general corporate purposes including as necessary to manage through the current extraordinary macroeconomic/business environment as a result of the COVID-19 pandemic. Our liquidity remains strong, and was $594.8 million as of December 31, 2021, as discussed below.

5.125% Senior Notes

On May 27, 2016, we issued an aggregate of $300.0 million principal amount of 5.125% Senior Notes, which matured on May 27, 2021. The 5.125% Senior Notes were general senior unsecured obligations of the Company. The 5.125% Senior Notes bore interest at a rate of 5.125% per year, payable in cash on May 27 and November 27 of each year, commencing November 27, 2016 and ending on the maturity date. Prior to maturity, on August 5, 2020, the Company commenced a cash tender offer for any and all $300.0 million outstanding aggregate principal amount of its 5.125% Senior Notes. On August 11, 2020, the Company’s cash tender offer expired at 5:00 p.m., New York City time. As of the expiration time, $44.0 million aggregate principal amount of the 5.125% Senior Notes were validly tendered. These notes were redeemed on the settlement date of August 14, 2020. The Company retained CF&Co as one of the dealer managers for the tender offer. As a result of this transaction, $14 thousand in dealer management fees were paid to CF&Co. Cantor tendered $15.0 million of such senior notes in the tender offer, and did not hold such notes as of December 31, 2021.

The initial carrying value of the 5.125% Senior Notes was $295.8 million, net of the discount and debt issuance costs of $4.2 million, of which $0.5 million were underwriting fees payable to CF&Co.

On August 16, 2016, we filed a Registration Statement on Form S-4 which was declared effective by the SEC on September 13, 2016. On September 15, 2016, BGC launched an exchange offer in which holders of the 5.125% Senior Notes, issued in a private placement on May 27, 2016. could exchange such notes for new registered notes with substantially identical terms. The exchange offer closed on October 12, 2016, at which point the initial 5.125% Senior Notes were exchanged for new registered notes with substantially identical terms. On May 27, 2021, we repaid the remaining $256.0 million principal plus accrued interest on our 5.125% Senior Notes.

5.375% Senior Notes

On July 24, 2018, we issued an aggregate of $450.0 million principal amount of 5.375% Senior Notes The 5.375% Senior Notes are general senior unsecured obligations of the Company. The 5.375% Senior Notes bear interest at a rate of 5.375% per year, payable in cash on January 24 and July 24 of each year, commencing January 24, 2019. The 5.375% Senior Notes will mature on July 24, 2023. We may redeem some or all of the 5.375% Senior Notes at any time or from time to time for cash at certain “make-whole” redemption prices (as set forth in the indenture related to the 5.375% Senior Notes). If a “Change of Control Triggering Event” (as defined in the indenture related to the 5.375% Senior Notes) occurs, holders may

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require the Company to purchase all or a portion of their notes for cash at a price equal to 101% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date. The initial carrying value of the 5.375% Senior Notes was $444.2 million, net of the discount and debt issuance costs of $5.8 million, of which $0.3 million were underwriting fees paid to CF&Co. We also paid CF&Co an advisory fee of $0.2 million in connection with the issuance. The issuance costs are amortized as interest expense and the carrying value of the 5.375% Senior Notes will accrete up to the face amount over the term of the notes. The carrying value of the 5.375% Senior Notes as of December 31, 2021 was $447.9 million.

On July 31, 2018, we filed a Registration Statement on Form S-4 which was declared effective by the SEC on August 10, 2018. On August 10, 2018, BGC launched an exchange offer in which holders of the 5.375% Senior Notes , issued in a private placement on July 24, 2018, could exchange such notes for new registered notes with substantially identical terms. The exchange offer closed on September 17, 2018, at which point the initial 5.375% Senior Notes were exchanged for new registered notes with substantially identical terms.

3.750% Senior Notes

On September 27, 2019, we issued an aggregate of $300.0 million principal amount of 3.750% Senior Notes. The 3.750% Senior Notes are general unsecured obligations of the Company. The 3.750% Senior Notes bear interest at a rate of 3.750% per annum, payable in cash on each April 1 and October 1, commencing April 1, 2020. The 3.750% Senior Notes will mature on October 1, 2024. We may redeem some or all of the 3.750% Senior Notes at any time or from time to time for cash at certain “make-whole” redemption prices (as set forth in the indenture related to the 3.750% Senior Notes). If a “Change of Control Triggering Event” (as defined in the indenture related to the 3.750% Senior Notes) occurs, holders may require the Company to purchase all or a portion of their notes for cash at a price equal to 101% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date. The initial carrying value of the 3.750% Senior Notes was $296.1 million, net of discount and debt issuance costs of $3.9 million, of which $0.2 million were underwriting fees payable to CF&Co and $36 thousand were underwriting fees payable to CastleOak Securities, L.P. The issuance costs will be amortized as interest expense and the carrying value of the 3.750% Senior Notes will accrete up to the face amount over the term of the notes. The carrying value of the 3.750% Senior Notes was $297.7 million as of December 31, 2021.

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

4.375% Senior Notes

On July 10, 2020, we issued an aggregate of $300.0 million principal amount of 4.375% Senior Notes. The 4.375% Senior Notes are general unsecured obligations of the Company. The 4.375% Senior Notes bear interest at a rate of 4.375% per year, payable in cash on June 15 and December 15, commencing December 15, 2020. The 4.375% Senior Notes will mature on December 15, 2025. We may redeem some or all of the notes at any time or from time to time for cash at certain “make-whole” redemption prices (as set forth in the indenture related to the 4.375% Senior Notes). If a “Change of Control Triggering Event” (as defined in the indenture related to the 4.375% Senior Notes) occurs, holders may require the Company to purchase all or a portion of their notes for cash at a price equal to 101% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the purchase date. Cantor purchased $14.5 million of such senior notes and still holds such notes as of December 31, 2021. The initial carrying value of the 4.375% Senior Notes was $296.8 million, net of discount and debt issuance costs of $3.2 million, of which $0.2 million were underwriting fees payable to CF&Co. The carrying value of the 4.375% Senior Notes was $297.5 million as of December 31, 2021.

On August 28, 2020, we filed a Registration Statement on Form S-4, which was declared effective by the SEC on September 8, 2020. On September 9, 2020, BGC launched an exchange offer in which holders of the 4.375% Senior Notes, issued in a private placement on July 10, 2020, may exchange such notes for new registered notes with substantially identical terms. The exchange offer closed on October 14, 2020, at which point the initial 4.375% Senior Notes were exchanged for new registered notes with substantially identical terms.

Collateralized Borrowings

On May 31, 2017, we entered into a secured loan arrangement of $29.9 million under which we pledged certain fixed assets as security for a loan. This arrangement incurs interest at a fixed rate of 3.44% per year and matured on May 31, 2021,

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therefore, there were no borrowings outstanding as of December 31, 2021. As of December 31, 2020, we had $4.0 million outstanding related to this secured loan arrangement. The book value of the fixed assets pledged as of December 31, 2020 was $0.8 million.

On April 8, 2019, we entered into a secured loan arrangement of $15.0 million, under which we pledged certain fixed assets as security for a loan. This arrangement incurs interest at a fixed rate of 3.77% and matures on April 8, 2023.As of December 31, 2021 and 2020, the Company had $5.9 million and $9.6 million, respectively, outstanding related to this secured loan arrangement. The book value of the fixed assets pledged as of December 31, 2021 and 2020, was $0.1 million and $1.2 million, respectively.

On April 19, 2019, we entered into a secured loan arrangement of $10.0 million, under which we pledged certain fixed assets as security for a loan. This arrangement incurs interest at a fixed rate of 3.89% and matures on April 19, 2023. As of December 31, 2021 and 2020, we had $3.8 million and $6.3 million, respectively, outstanding related to this secured loan arrangement. The book value of the fixed assets pledged as of December 31, 2021 and 2020, was $1.0 million and $2.7 million, respectively.

Weighted-average Interest Rate

For the years ended December 31, 2021 and 2020, the weighted-average interest rate of our total Notes payable and other borrowings, which include our Unsecured Senior Revolving Credit Agreement, Senior Notes, and Collateralized Borrowings, was 4.62% and 4.71%, respectively.

Short-term Borrowings

On August 22, 2017, we entered into a committed unsecured loan agreement with Itau Unibanco S.A. The credit agreement provided for short-term loans of up to $3.6 million (BRL 20.0 million). The agreement was automatically renewed every 180 days until August 13, 2021, when it was repaid in full. Borrowings under this agreement bore interest at the Brazilian Interbank offering rate plus 4.75%. As of December 31, 2021 there were no borrowings outstanding under the facility. As of December 31, 2020, there were $3.8 million (BRL 20.0 million) of borrowings outstanding under the facility. As of December 31, 2021, the interest rate was 14.0%.

On August 23, 2017, we entered into a committed unsecured credit agreement with Itau Unibanco S.A. The credit agreement provided for an intra-day overdraft credit line up to $9.0 million (BRL 50.0 million). On August 20, 2021, the agreement was renegotiated, increasing the credit line to $10.8 million (BRL 60.0 million). The maturity date of the agreement is March 9, 2022. This agreement bears a fee of 1.75% per year. As of December 31, 2021 and December 31, 2020, there were no borrowings outstanding under this agreement

On January 25, 2021, we entered into a committed unsecured loan agreement with Banco Daycoval S.A., which provided for short-term loans of up to $1.8 million (BRL 10.0 million) and was renegotiated on June 1, 2021. The amended agreement provides for short-term loans of up to $3.6 million (BRL 20.0 million). The maturity date of the agreement is January 17, 2023. Borrowings under this agreement bear interest at the Brazilian Interbank offering rate plus 3.66%. As of December 31, 2021, there were $3.6 million (BRL 20.0 million) of borrowings outstanding under the agreement. As of December 31, 2021, the interest rate was 12.90%.

BGC Credit Agreement with Cantor

On March 19, 2018, we entered into the BGC Credit Agreement with Cantor. The BGC Credit Agreement provides for each party and certain of its subsidiaries to issue loans to the other party or any of its subsidiaries in the lender’s discretion in an aggregate principal amount up to $250.0 million outstanding at any time. The BGC Credit Agreement replaced the previous Credit Facility between BGC and an affiliate of Cantor, and was approved by the Audit Committee of BGC. On August 6, 2018, the Company entered into an amendment to the BGC Credit Agreement, which increased the aggregate principal amount that can be loaned to the other party or any of its subsidiaries from $250.0 million to $400.0 million that can be outstanding at any time. The BGC Credit Agreement will mature on the earlier to occur of (a) March 19, 2022, after which the maturity date of the BGC Credit Agreement will continue to be extended for successive one-year periods unless prior written notice of non-extension is given by a lending party to a borrowing party at least six months in advance of such renewal date and (b) the termination of the BGC Credit Agreement by either party pursuant to its terms. The outstanding amounts under the BGC Credit Agreement will bear interest for any rate period at a per annum rate equal to the higher of BGC’s or Cantor’s short-term borrowing rate in effect at such time plus 1.00%. As of December 31, 2021, there were no borrowings by BGC or Cantor outstanding under this Agreement.

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CREDIT RATINGS

As of December 31, 2021, our public long-term credit ratings and associated outlooks are as follows:

[[GREPCENT_TABLE]]
[["","Rating","","Outlook"],["Fitch Ratings Inc.","BBB-","","Stable"],["Standard & Poor\u2019s","BBB-","","Stable"],["Japan Credit Rating Agency, Ltd.","BBB+","","Stable"],["Kroll Bond Rating Agency","BBB","","Stable"]]
[[/GREPCENT_TABLE]]

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

LIQUIDITY ANALYSIS

We consider our liquidity to be comprised of the sum of Cash and cash equivalents, Reverse repurchase agreements, Marketable securities, and Securities owned, less Securities loaned and Repurchase agreements. The discussion below describes the key components of our liquidity analysis. Our cash, cash flows, and financing arrangements are sufficient to support our cash requirements for the next twelve months and beyond.

We consider the following in analyzing changes in our liquidity.

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

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

Our securities settlement activities primarily represent deposits with clearing organizations.

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

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

At December 31, 2019, the Company completed the calculation of the one-time transition tax on the deemed repatriation of foreign subsidiaries’ earnings pursuant to the Tax Act and previously recorded a net cumulative tax expense of $28.6 million, net of foreign tax credits. An installment election can be made to pay the taxes over eight years with 40% paid in equal installments over the first five years and the remaining 60% to be paid in installments of 15%, 20% and 25% in years six, seven and eight, respectively. The cumulative remaining balance as of December 31, 2021 is $20.2 million.

As of December 31, 2021, the Company and its consolidated subsidiaries had $553.6 million of Cash and cash equivalents. In addition, the Company and its consolidated subsidiaries also held securities of $41.2 million within their Liquidity position as of December 31, 2021.

Discussion of the year ended December 31, 2021

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The table below presents our Liquidity Analysis as of December 31, 2021 and December 31, 2020:

[[GREPCENT_TABLE]]
[["","December 31, 2021","","December 31, 2020"],["(in thousands)"],["Cash and cash equivalents","$","553,598","","","$","596,291"],["Securities owned","40,838","","","58,572"],["Marketable securities","406","","","349"],["Repurchase agreements","\u2014","","","\u2014"],["Total","$","594,842","","","$","655,212"]]
[[/GREPCENT_TABLE]]

The $60.4 million decrease in our liquidity position from $655.2 million as of December 31, 2020 to $594.8 million as of December 31, 2021 was primarily related to 72.9 million repurchases of Class A common stock and LPUs, cash paid with respect to annual employee bonuses, tax payments, our continued investment in Fenics Growth Platforms, and the maturity of the 5.125% Senior Notes paid in full, partially offset by the gross cash proceeds received for the Insurance Business Disposition, earnings, and other ordinary movements in working capital.

Discussion of the year ended December 31, 2020

The table below presents our Liquidity Analysis as of December 31, 2020 and December 31, 2019:

[[GREPCENT_TABLE]]
[["","December 31, 2020","","December 31, 2019"],["(in thousands)"],["Cash and cash equivalents","$","596,291","","","$","419,328"],["Securities owned","58,572","","","57,525"],["Marketable securities1","349","","","326"],["Total","$","655,212","","","$","477,179"]]
[[/GREPCENT_TABLE]]

__________________________

1As of December 31, 2019, $13.9 million of Marketable securities on our balance sheet had been lent in a Securities loaned transaction and, therefore, are not included in this Liquidity Analysis.

The $179.3 million increase in our liquidity position from $473.2 million as of December 31, 2019 to $652.6 million as of December 31, 2020 was primarily related to the issuance of $300.0 million of the 4.375% Senior Notes, partially reduced by the $68.9 million net payoff of the Revolving Credit Agreement and the $44.0 million cash tender offer on the 5.125% Senior Notes. This net increase was partially offset by ordinary movements in working capital (including settlement of payables to related parties), cash paid with respect to annual employee bonuses and associated tax and compensation expenses, cost reduction charges, tax payments, acquisitions and our continued investment in new revenue generating hires.

CLEARING CAPITAL

In November 2008, we entered into a clearing capital agreement with Cantor to clear U.S. Treasury and U.S. government agency securities transactions on our behalf. In June 2020, this clearing capital agreement was amended to cover Cantor providing clearing services in all eligible financial products to us and not just U.S. Treasury and U.S. government agency securities. Pursuant to the terms of this agreement, so long as Cantor is providing clearing services to us, Cantor shall be entitled to request from us cash or other collateral acceptable to Cantor in the amount reasonably requested by Cantor under the clearing capital agreement or Cantor will post cash or other collateral on our behalf for a commercially reasonable charge. Cantor had not requested any cash or other property from us as collateral as of December 31, 2021.

REGULATORY REQUIREMENTS

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

In addition, self-regulatory organizations, such as the FINRA and the NFA, along with statutory bodies such as the FCA, the SEC, and the CFTC require strict compliance with their rules and regulations. The requirements imposed by regulators are designed to ensure the integrity of the financial markets and to protect customers and other third parties who deal

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with broker-dealers and are not designed to specifically protect stockholders. These regulations often serve to limit our activities, including through net capital, customer protection and market conduct requirements.

The final phase of Basel III (unofficially called “Basel IV”) is a global prudential regulatory standard designed to make banks more resilient and increase confidence in the banking system. Its wide scope includes reviewing market, credit and operational risk along with targeted changes to leverage ratios. Basel IV includes updates to the calculation of bank capital requirements with the aim of making outcomes more comparable across banks globally. Most of the requirements are expected to be implemented by national and regional authorities by around 2023, with certain delays announced by regulators recently due to COVID-19. The adoption of these proposed rules could restrict the ability of our large bank and broker-dealer customers to operate trading businesses and to maintain current capital market exposures under the present structure of their balance sheets, and will cause these entities to need to raise additional capital in order to stay active in our marketplaces.

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

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

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

As of December 31, 2021, $667.2 million of net assets were held by regulated subsidiaries. As of December 31, 2021, these subsidiaries had aggregate regulatory net capital, as defined, in excess of the aggregate regulatory requirements, as defined, of $326.9 million.

In April 2013, the Board and Audit Committee authorized management to enter into indemnification agreements with Cantor and its affiliates with respect to the provision of any guarantees provided by Cantor and its affiliates from time to time as required by regulators. These services may be provided from time to time at a reasonable and customary fee. In 2020, the introducing broker guarantees were moved from CF&Co to Mint Brokers for the firm's stand alone and foreign NFA registered introducing brokers.

BGC Derivative Markets and GFI Swaps Exchange, our subsidiaries, operate as SEFs. Mandatory Dodd-Frank Act compliant execution on SEFs by eligible U.S. persons commenced in February 2014 for “made available to trade” products, and a wide range of other rules relating to the execution and clearing of derivative products have been finalized with implementation periods in 2016 and beyond. We also own ELX, which became a dormant contract market on July 1, 2017. As these rules require authorized execution facilities to maintain robust front-end and back-office IT capabilities and to make large and ongoing technology investments, and because these execution facilities may be supported by a variety of voice and auction-based execution methodologies, we expect our Hybrid and Fully Electronic trading capability to perform strongly in such an environment.

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

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

MiFID II is intended to help improve the functioning of the EU single market by achieving a greater consistency of regulatory standards. By design, therefore, it is intended that EU member states should have very similar regulatory regimes in relation to the matters addressed to MiFID. MiFID II has also introduced a new regulated execution venue category known as an OTF that captures much of the Voice-and Hybrid-oriented trading in EU. Much of our existing EU derivatives and fixed income execution business now take place on OTFs. Further to its decision to leave the EU, the U.K. has implemented MIFID II’s requirements into its own domestic legislation. Brexit may impact future market structures and MiFID II rulemaking and implementation due to potential changes in mutual passporting and equivalence arrangements between the U.K. and EU member states (for further information see "Overview and Business Environment—Brexit" herein).

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

On September 30, 2020, the SEC announced a settlement with BGC regarding alleged negligent disclosure violations related to one of BGC's non-GAAP financial measures for periods beginning with the first quarter of 2015 through the first quarter of 2016. All of the relevant disclosures related to those periods and pre-dated the SEC staff’s May 2016 detailed compliance and disclosure guidance with respect to non-GAAP presentations. BGC revised its non-GAAP presentation beginning with the second quarter of 2016 as a result of the SEC’s guidance, and the SEC has made no allegations with regard to any periods following the first quarter of 2016. In connection with the SEC settlement, BGC was ordered to cease and desist from any future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act, Section 13(a) of the Exchange Act and Rule 13a-11 thereunder, and Rule 100(b) of Regulation G, and agreed to pay a civil penalty of $1.4 million without admitting or denying the SEC’s allegations. See “Regulation” included in Part I, Item 1 of this Annual Report on Form 10-K for additional information related to our regulatory environment.

EQUITY

Class A Common Stock

Changes in shares of BGC Class A common stock outstanding were as follows (in thousands):

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["","2021","","2020"],["Shares outstanding at beginning of period","323,018","","","307,915"],["Share issuances:"],["Redemptions/exchanges of limited partnership interests\u00b9","58,025","","","13,190"],["Vesting of RSUs","2,167","","","1,134"],["Acquisitions","1,789","","","391"],["Other issuances of BGC Class A common stock","417","","","345"],["Issuance of BGC Class A common stock for general corporate purposes","\u2014","","","45"],["Treasury stock repurchases","(68,253)","","","(2)"],["Forfeitures of restricted BGC Class A common stock","(140)","","","\u2014"],["Shares outstanding at end of period","317,023","","","323,018"]]
[[/GREPCENT_TABLE]]

__________________________

1Included in redemptions/exchanges of limited partnership interests for the year ended December 31, 2021, are 27.5 million shares of BGC Class A common stock granted in connection with the cancellation of 29.7 million LPUs. Included in redemption/exchanges of limited partnership interests for the year ended December 31, 2020, are 9.5 million shares of BGC Class A common stock granted in connection with the cancellation of 9.2 million LPUs. Because LPUs are included in the Company’s fully diluted share count, if dilutive, redemptions/exchanges in connection with the issuance of BGC Class A common stock would not impact the fully diluted number of shares outstanding.

Class B Common Stock

The Company did not issue any shares of BGC Class B common stock during the years ended December 31, 2021 and 2020. As of December 31, 2021 and 2020, there were 45.9 million shares of BGC Class B common stock outstanding.

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Unit Redemptions and Share Repurchase Program

The Board and Audit Committee have authorized repurchases of BGC Class A common stock and redemptions of limited partnership interests or other equity interests in our subsidiaries. On August 3, 2021, the Board and Audit Committee increased the Company’s share repurchase and unit redemption authorization to $400.0 million, which may include purchases from Cantor, its partners or employees or other affiliated persons or entities. As of December 31, 2021, the Company had $191.8 million remaining from its share repurchase and unit redemption authorization. From time to time, the Company may actively continue to repurchase shares and/or redeem units.

The table below represents the units redeemed and/or shares repurchased for cash and does not include units redeemed/cancelled in connection with the grant of shares of BGC Class A common stock nor the limited partnership interests exchanged for shares of BGC Class A common stock. The unit redemptions and share repurchases of BGC Class A common stock during the year ended December 31, 2021 were as follows (in thousands, except for weighted-average price data):

[[GREPCENT_TABLE]]
[["Period","","Total Number of Units Redeemed or Shares Repurchased","","Weighted- Average Price Paid per Unit or Share","","Approximate Dollar Value of Units and Shares That May Yet Be Redeemed/ Purchased Under the Program"],["Redemptions1"],["January 1, 2021\u2014March 31, 2021","","20","","","$","4.40"],["April 1, 2021\u2014June 30, 2021","","4,715","","","5.82"],["July 1, 2021\u2014September 30, 2021","","73","","","5.14"],["October 1, 2021\u2014December 31, 2021","","38","","","5.37"],["Total Redemptions","","4,846","","","$","5.80"],["Repurchases2"],["January 1, 2021\u2014March 31, 2021","","965","","","$","4.56"],["April 1, 2021\u2014June 30, 2021","","16,542","","","6.25"],["July 1, 2021\u2014September 30, 2021","","24,433","","","5.19"],["October 1, 2021\u2014December 31, 2021","","26,313","","","4.97"],["Total Repurchases","","68,253","","","5.35"],["Total Redemptions and Repurchases","","73,099","","","$","5.38","","","$","191,809"]]
[[/GREPCENT_TABLE]]

__________________________

1During the year ended December 31, 2021, the Company redeemed 4.7 million LPUs at an aggregate redemption price of $27.5 million for a weighted-average price of $5.83 per unit and 0.1 million FPUs at an aggregate redemption price of $0.6 million for a weighted-average price of $4.86 per unit. During the year ended December 31, 2020, the Company redeemed 1.8 million LPUs at an aggregate redemption price of $5.5 million for a weighted-average price of $3.03 per unit and 0.7 million FPUs at an aggregate redemption price of $1.3 million for a weighted-average price of $1.79 per unit. The table above does not include units redeemed/cancelled in connection with the grant of 27.5 million shares and 9.5 million shares of BGC Class A common stock during the years ended December 31, 2021 and 2020, respectively, nor the limited partnership interests exchanged for 32.2 million and 3.7 million shares of BGC Class A common stock during the years ended December 31, 2021 and 2020, respectively.

2During the year ended December 31, 2021, the Company repurchased 68.3 million shares of BGC Class A common stock at an aggregate price of $365.4 million for a weighted-average price of $5.35 per share. During the year ended December 31, 2020, the Company repurchased 2 thousand shares of BGC Class A common stock at an aggregate price of $6 thousand for a weighted-average price of $2.58 per share.

The weighted-average share counts, including securities that were anti-dilutive for our earnings per share calculations, for the three months and year ended December 31, 2021 were as follows (in thousands):

[[GREPCENT_TABLE]]
[["","Three Months Ended December 31, 2021","","Year Ended December 31, 2021"],["Common stock outstanding1","370,476","","","379,215"],["Partnership units2","132,841","","","155,356"],["RSUs (Treasury stock method)","4,399","","","4,074"],["Other","1,437","","","1,375"],["Total3","509,153","","","540,020"]]
[[/GREPCENT_TABLE]]

__________________________

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1Common stock consisted of shares of BGC Class A common stock, shares of BGC Class B common stock and contingent shares of our Class A common stock for which all necessary conditions have been satisfied except for the passage of time. For the quarter ended December 31, 2021, the weighted-average number shares of BGC Class A common stock was 324.6 million and Class B shares was 45.9 million. For the year ended December 31, 2021, the weighted-average number shares of BGC Class A common stock was 333.3 million and Class B shares was 45.9 million.

2Partnership units collectively include FPUs, LPUs, including contingent units of BGC Holdings for which all necessary conditions have been satisfied except for the passage of time, and Cantor units (see Note 2—“Limited Partnership Interests in BGC Holdings and Newmark Holdings” to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for more information).

3For the quarter ended December 31, 2021, approximately 0.1 million potentially dilutive securities were not included in the computation of fully diluted EPS because their effect would have been anti-dilutive. Anti-dilutive securities for the quarter ended December 31, 2021 included, on a weighted-average basis, approximately 0.1 million RSUs. For the year ended December 31, 2021, approximately 0.1 million potentially dilutive securities were not included in the computation of fully diluted EPS because their effect would have been anti-dilutive. Anti-dilutive securities for the year ended December 31, 2021 included, approximately 0.1 million RSUs. As of December 31, 2021, approximately 36.4 million shares of contingent BGC Class A common stock, N units, RSUs, and LPUs were excluded from fully diluted EPS computations because the conditions for issuance had not been met by the end of the period. The contingent BGC Class A common stock is recorded as a liability and included in “Accounts payable, accrued and other liabilities” in our consolidated statement of financial condition as of December 31, 2021.

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

[[GREPCENT_TABLE]]
[["","As of December 31, 2021"],["Common stock outstanding","362,907"],["Partnership units","127,301"],["RSUs (Treasury stock method)","4,097"],["Other","3,196"],["Total","497,501"]]
[[/GREPCENT_TABLE]]

On June 5, 2015, we entered into the Exchange Agreement with Cantor providing Cantor, CFGM and other Cantor affiliates entitled to hold BGC Class B common stock the right to exchange from time to time, on a one-to-one basis, subject to adjustment, up to an aggregate of 34.6 million shares of BGC Class A common stock now owned or subsequently acquired by such Cantor entities for up to an aggregate of 34.6 million shares of BGC Class B common stock. Such shares of BGC Class B common stock, which currently can be acquired upon the exchange of Cantor units owned in BGC Holdings, are already included in our fully diluted share count and will not increase Cantor’s current maximum potential voting power in the common equity. The Exchange Agreement enabled the Cantor entities to acquire the same number of shares of BGC Class B common stock that they were already entitled to acquire without having to exchange its Cantor units in BGC Holdings. The Audit Committee and Board have determined that it was in the best interests of us and our stockholders to approve the Exchange Agreement because it will help ensure that Cantor retains its Cantor units in BGC Holdings, which is the same partnership in which our partner employees participate, thus continuing to align the interests of Cantor with those of the partner employees. On November 23, 2018, in the Class B Issuance, BGC issued 10.3 million shares of BGC Class B common stock to Cantor and 0.7 million shares of BGC Class B common stock to CFGM, an affiliate of Cantor, in each case in exchange for shares of BGC Class A common stock from Cantor and CFGM, respectively, on a one-to-one basis pursuant to the Exchange Agreement. Pursuant to the Exchange Agreement, no additional consideration was paid to BGC by Cantor or CFGM for the Class B Issuance. Following this exchange, Cantor and its affiliates only have the right to exchange under the Exchange Agreement up to an aggregate of 23.6 million shares of BGC Class A common stock, now owned or subsequently acquired, or its Cantor units in BGC Holdings, into shares of BGC Class B common stock. As of December 31, 2021, Cantor and CFGM do not own any shares of BGC Class A common stock.

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

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

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

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

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

•an apportionment of the existing economic attributes (including, among others, capital accounts and post-termination payments) of each BGC Holdings limited partnership interests outstanding immediately prior to the Separation between such Legacy BGC Holdings Unit and the fraction of a Newmark Holdings LPU issued in the Separation in respect of such Legacy BGC Holdings Unit, based on the relative value of BGC and Newmark as of after the Newmark IPO;

•an adjustment of the exchange mechanism between the Newmark IPO and the Distribution so that one exchangeable BGC Holdings unit together with a number of exchangeable Newmark Holdings units equal to 0.4545 divided by the Newmark Holdings Exchange Ratio as of such time, must be exchanged in order to receive one share of BGC Class A common stock; and

•a right of the employer of a partner (whether it be Newmark or BGC) to determine whether to grant exchangeability with respect to Legacy BGC Holdings Units or Legacy Newmark Holdings Units held by such partner.

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

Registration Statements

We had in place an effective equity shelf registration statement on Form S-3 filed on March 9, 2018 with respect to the issuance and sale of up to an aggregate of $300.0 million of shares of BGC Class A common stock from time to time on a delayed or continuous basis (the "March 2018 Form S-3"). On March 9, 2018, we entered into the March 2018 Sales Agreement, pursuant to which we could offer and sell up to an aggregate of $300.0 million of shares of BGC Class A common stock under the CEO Program. Proceeds from shares of BGC Class A common stock sold under this CEO Program Sales Agreement could be used for redemptions of limited partnership interests in BGC Holdings, as well as for general corporate purposes, including acquisitions and the repayment of debt. CF&Co is a wholly owned subsidiary of Cantor and an affiliate of us. Under this Sales Agreement, we have agreed to pay CF&Co 2% of the gross proceeds from the sale of shares. For certain transactions during 2020, we paid CF&Co 1% of the gross proceeds from the sale of shares of our Class A common stock in our CEO program. The March 2018 Form S-3 and the March 2018 Sales Agreement expired in September 2021. As of the date of expiration, we had sold 17.6 million shares of BGC Class A common stock (or $210.8 million) under the March 2018 Sales Agreement, and $89.2 million of stock remained unsold by us under the March 2018 Sales Agreement. For additional information on the Company’s CEO Program sales agreements, see Note 14—“Related Party Transactions” to our consolidated financial statements in Part 8, Item II of this Annual Report on Form 10-K. On March 8, 2021, we filed a replacement CEO Program shelf registration statement on Form S-3, which has not yet been declared effective, with respect to the issuance and sale of up to an aggregate of $300.0 million of shares of BGC Class A common stock from time to time on a delayed or continuous basis.

We intend to use the net proceeds of any shares of BGC Class A common stock sold for general corporate purposes for potential acquisitions, redemptions of LPUs and FPUs in BGC Holdings and repurchases of shares of BGC Class A common stock from partners, executive officers and other employees of ours or our subsidiaries and of Cantor and its affiliates. Certain of such partners will be expected to use the proceeds from such sales to repay outstanding loans issued by, or credit enhanced by, Cantor, or BGC Holdings. In addition to general corporate purposes, these sales along with our share repurchase

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authorization are designed as a planning device in order to facilitate the redemption process. Going forward, we may redeem units and reduce our fully diluted share count under our repurchase authorization or later sell shares of BGC Class A common stock under the replacement CEO Program shelf registration statement on Form S-3, which has not yet been declared effective.

Further, we have an effective registration statement on Form S-4 filed on September 3, 2010, with respect to the offer and sale of up to 20 million shares of BGC Class A common stock from time to time in connection with business combination transactions, including acquisitions of other businesses, assets, properties or securities. As of December 31, 2021, we have issued an aggregate of 16.0 million shares of BGC Class A common stock under this Form S-4 registration statement. Additionally, on September 13, 2019, we filed a registration statement on Form S-4, with respect to the offer and sale of up to 20 million shares of Class A common stock from time to time in connection with business combination transactions, including acquisitions of other businesses, assets, properties or securities. As of December 31, 2021, we have not issued any shares of BGC Class A common stock under this Form S-4 registration statement. We also have an effective shelf registration statement on Form S-3 pursuant to which we can offer and sell up to 10 million shares of BGC Class A common stock under the BGC Partners, Inc. Dividend Reinvestment and Stock Purchase Plan. As of December 31, 2021, we have issued 0.8 million shares of BGC Class A common stock under the Dividend Reinvestment and Stock Purchase Plan.

The Compensation Committee may grant stock options, stock appreciation rights, deferred stock such as RSUs, bonus stock, performance awards, dividend equivalents and other equity-based awards, including to provide exchange rights for shares of BGC Class A common stock upon exchange of LPUs. On November 22, 2021, at our Annual Meeting of Stockholders, our stockholders approved our Equity Plan to increase from 400 million to 500 million the aggregate number of shares of BGC Class A common stock that may be delivered or cash-settled pursuant to awards granted during the life of the Equity Plan, subject to adjustment, and to remove the annual per-participant limit of 15 million awards that may be granted under the Plan. As of December 31, 2021, the limit on the aggregate number of shares authorized to be delivered allowed for the grant of future awards relating to 164.5 million shares of BGC Class A common stock.

On October 20, 2020, we filed a registration statement on Form S-3, which was declared effective on October 28, 2020, pursuant to which CF&Co may make offers and sales of our 5.125% Senior Notes, 5.375% Senior Notes, 3.750% Senior Notes and 4.375% Senior Notes in connection with ongoing market-making transactions which may occur from time to time. Such market-making transactions in these securities may occur in the open market or may be privately negotiated at prevailing market prices at a time of resale or at related or negotiated prices. Neither CF&Co, nor any other of our affiliates, has any obligation to make a market in our securities, and CF&Co or any such other affiliate may discontinue market-making activities at any time without notice.

CONTINGENT PAYMENTS RELATED TO ACQUISITIONS

Since 2016, the Company has completed acquisitions whose purchase price included an aggregate of approximately 2.2 million shares of the Company’s Class A common stock (with an acquisition date fair value of approximately $9.2 million), 0.1 million LPUs (with an acquisition date fair value of approximately $0.2 million), 0.2 million RSUs (with an acquisition date fair value of approximately $1.2 million) and $37.5 million in cash that may be issued contingent on certain targets being met through 2023.

As of December 31, 2021, the Company has issued 0.5 million shares of BGC Class A common stock, 0.2 million of RSUs, and paid $30.4 million in cash related to such contingent payments.

As of December 31, 2021, 1.8 million shares of BGC Class A common stock, 0.1 million RSUs, and $20.9 million in cash remain to be issued if the targets are met, net of forfeitures and other adjustments.

DERIVATIVE SUIT

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

A month later, on November 5, 2018, the same plaintiffs’ firm filed an identical putative derivative complaint against the same defendants seeking the same relief on behalf of a second client, Northern California Pipe Trades Trust Funds. The cases were consolidated into a single action, captioned In re BGC Partners, Inc. Derivative Litigation (Consolidated C.A. No.

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2018-0722-AGB), and the complaint filed by Roofers Local 149 Pension Fund on October 5, 2018 was designated as the operative complaint.

In response to motions to dismiss filed by all defendants in December 2018, Plaintiffs filed a motion for leave to amend the operative complaint in February 2019, requesting that the Court allow them to supplement their allegations, which the Court granted. The amended complaint alleges the same purported breaches of fiduciary duty as the operative complaint, raises no new claims, and seeks identical relief, but includes additional allegations, including alleged reasons for plaintiffs’ failure to make a demand on the Board, which was the basis of defendants’ motion to dismiss. On March 19, 2019, all defendants filed motions to dismiss the amended complaints, again on demand grounds. On September 30, 2019, the Court denied defendants’ motions to dismiss, permitting the case to move forward into discovery. In its ruling, the Court determined that the amended complaint sufficiently pled that plaintiffs were not required to make demand on the Board in order to file a derivative suit, but did not make findings of fact with respect to the underlying merits of plaintiffs’ allegations concerning the Transaction. On February 11, 2021, following the close of discovery, the Company and the independent directors of the Board filed motions for summary judgment seeking dismissal of the case based on the discovery record, which plaintiffs opposed. Argument was held on defendants’ summary judgment motions on June 22, 2021. On September 20, 2021, the Court partially granted the summary judgment motions, dismissing directors Stephen Curwood and Linda Bell and permitting the trial to move forward against the remaining defendants. A trial was held before Vice Chancellor Lori Will on October 11, 2021, which concluded on October 15, 2021. The parties will submit post-trial briefing, after which the Court is expected to rule on all pending matters in or around the second quarter of 2022.

The Company continues to believe that the claims against the defendants are without merit and will continue to defend against them vigorously. However, as in any litigated matter, the outcome cannot be determined with certainty.

PURCHASE OF LIMITED PARTNERSHIP INTERESTS

Cantor has the right to purchase Cantor units from BGC Holdings upon redemption of non-exchangeable FPUs redeemed by BGC Holdings upon termination or bankruptcy of the Founding/Working Partner. In addition, pursuant to Article Eight, Section 8.08, of the Second Amended and Restated BGC Holdings Limited Partnership Agreement (previously the Sixth Amendment), where either current, terminating, or terminated partners are permitted by the Company to exchange any portion of their FPUs and Cantor consents to such exchangeability, the Company shall offer to Cantor the opportunity for Cantor to purchase the same number of Cantor units in BGC Holdings at the price that Cantor would have paid for Cantor units had the Company redeemed the FPUs. If Cantor acquires any Cantor units as a result of the purchase or redemption by BGC Holdings of any FPUs, Cantor will be entitled to the benefits (including distributions) of such units it acquires from the date of termination or bankruptcy of the applicable Founding/Working Partner. In addition, any such Cantor units purchased by Cantor are currently exchangeable for up to 23.6 million shares of BGC Class B common stock or, at Cantor’s election or if there are no such additional shares of BGC Class B common stock, shares of BGC Class A common stock, in each case on a one-for-one basis (subject to customary anti-dilution adjustments).

On March 31, 2021, Cantor purchased from BGC Holdings an aggregate of 1,149,684 Cantor units for aggregate consideration of $2,104,433 as a result of the redemption of 1,149,684 FPUs, and 1,618,376 Cantor units for aggregate consideration of $3,040,411 as a result of the exchange of 1,618,376 FPUs. Each Cantor unit in BGC Holdings held by Cantor is exchangeable by Cantor at any time on a one-for-one basis (subject to adjustment) for shares of BGC Class A common stock.

On October 28, 2021, Cantor purchased from BGC Holdings an aggregate of 460,929 Cantor units for an aggregate consideration of $715,605 as a result of the redemption of 460,929 FPUs, and 1,179,942 Cantor units for aggregate consideration of $2,033,838 as a result of the exchange of 1,179,942 FPUs. Each Cantor unit in BGC Holdings held by Cantor is exchangeable by Cantor at any time on a one-for-one basis (subject to adjustment) for shares of BGC Class A common stock.

As of December 31, 2021, there were no FPUs in BGC Holdings remaining, which BGC Holdings had the right to redeem or exchange and with respect to which Cantor will have the right to purchase an equivalent number of Cantor units following such redemption or exchange.

JOINT SERVICES AGREEMENT WITH CANTOR

In February 2019, the Audit Committee authorized us to enter into a short-term services agreement with Cantor pursuant to which Cantor would be responsible for clearing, settling and processing certain transactions executed on behalf of customers in exchange for a 33% revenue share based on net transaction revenue and the payment by BGC of the fully allocated cost of certain salespersons related thereto. In May 2020, the Audit Committee authorized us to extend the initial term of the short-term services agreement for an additional nine months.

GUARANTEE AGREEMENT FROM MINT BROKERS

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Under rules adopted by the CFTC, all foreign introducing brokers engaging in transactions with U.S. persons are required to register with the NFA and either meet financial reporting and net capital requirements on an individual basis or obtain a guarantee agreement from a registered Futures Commission Merchant. Our European-based brokers engage from time to time in interest rate swap transactions with U.S.-based counterparties, and therefore we are subject to the CFTC requirements. Mint Brokers has entered into guarantees on our behalf (and on behalf of GFI), and we are required to indemnify Mint Brokers for the amounts, if any, paid by Mint Brokers on our behalf pursuant to this arrangement. Effective April 1, 2020, these guarantees were transferred to Mint Brokers from CF&Co. During the years ended December 31, 2021 and 2020, the Company recorded expenses of $0.1 million with respect to these guarantees.

BGC SUBLEASE FROM NEWMARK

In May 2020, BGC U.S. OpCo entered into an arrangement to sublease excess space from RKF Retail Holdings LLC, a subsidiary of Newmark, which sublease was approved by the Audit Committee. The deal is a one-year sublease of approximately 21,000 rentable square feet in New York City. Under the terms of the sublease, BGC U.S. OpCo paid a fixed rent amount of $1.1 million in addition to all operating and tax expenses attributable to the lease. In May 2021, the sublease was amended to provide for a rate of $15 thousand per month based on the size of utilized space, with terms extending on a month-to-month basis. In connection with the sublease, BGC U.S. OpCo paid $0.5 million and $0.8 million for the years ended December 31, 2021 and 2020, respectively.

DEBT REPURCHASE PROGRAM

On June 11, 2020, the Company’s Board of Directors and its Audit Committee authorized a debt repurchase program for the repurchase by the Company of up to $50.0 million of Company Debt Securities. Repurchases of Company Debt Securities, if any, are expected to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption.

Under the authorization, the Company may make repurchases of Company Debt Securities for cash from time to time in the open market or in privately negotiated transactions upon such terms and at such prices as management may determine. Additionally, the Company is authorized to make any such repurchases of Company Debt Securities through CF&Co (or its affiliates), in its capacity as agent or principal, or such other broker-dealers as management shall determine to utilize from time to time, and such repurchases shall be subject to brokerage commissions which are no higher than standard market commission rates.

As of December 31, 2021, the Company had $50.0 million remaining from its debt repurchase authorization.

EQUITY METHOD INVESTMENTS

The Company was authorized to enter into loans, investments or other credit support arrangements for Aqua; such arrangements are proportionally and on the same terms as similar arrangements between Aqua and Cantor. On February 5, 2020 and February 25, 2021, the Company’s Board and Audit Committee increased the authorized amount by an additional $2.0 million and $1.0 million respectively, to an aggregate of $20.2 million. The Company has been further authorized to provide counterparty or similar guarantees on behalf of Aqua from time to time, provided that liability for any such guarantees, as well as similar guarantees provided by Cantor, would be shared proportionally with Cantor (see Note 14—“Related Party Transactions” to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for more information).

UNIT REDEMPTIONS AND EXCHANGES—EXECUTIVE OFFICERS

On February 22, 2021, the Company granted Sean A. Windeatt 123,713 exchange rights with respect to 123,713 non-exchangeable LPUs that were previously granted to Mr. Windeatt on February 22, 2019. The resulting 123,713 exchangeable LPUs are immediately exchangeable by Mr. Windeatt for an aggregate of 123,713 shares of BGC Class A common stock. The grant was approved by the Compensation Committee. Additionally, the Compensation Committee approved the right to exchange for cash 28,477 non-exchangeable PLPUs held by Mr. Windeatt, for a payment of $178,266 for taxes when the LPU units are exchanged.

On April 8, 2021, the Compensation Committee approved the repurchase by the Company on April 23, 2021 of 123,713 exchangeable BGC Holdings LPU-NEWs held by Mr. Windeatt at the price of $5.65, which was the closing price of our Class A common stock on April 23, 2021, and the redemption of 28,477 exchangeable BGC Holdings PLPU-NEWs held by Mr. Windeatt for $178,266, less applicable taxes and withholdings.

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On April 8, 2021, the Compensation Committee approved the repurchase by the Company of the remaining 62,211 exchangeable BGC Holdings LPUs held by Mr. Windeatt that were granted exchangeability on March 2, 2020 at the price of $5.38, the closing price of Class A common stock on April 8, 2020.

On April 28, 2021, the Compensation Committee approved an additional monetization opportunity for Mr. Merkel. Effective April 29, 2021, 108,350 of Mr. Merkel’s 273,612 non-exchangeable BGC Holdings PSUs were redeemed for zero, 101,358 of Mr. Merkel’s 250,659 non- exchangeable BGC Holdings PPSUs were redeemed for a cash payment of $575,687, and 108,350 shares of BGC Class A common stock were issued to Mr. Merkel. On April 29, 2021, the 108,350 shares of BGC Class A common stock were repurchased from Mr. Merkel at the closing price of our Class A common stock on that date, under our stock buyback program.

On June 28, 2021, (i) the Company exchanged 520,380 exchangeable LPUs held by Mr. Lutnick at the price of $5.86, which was the closing price of the Company's Class A common stock on June 28, 2021, for 520,380 shares of BGC Class A common stock, less applicable taxes and withholdings, resulting in the delivery of 365,229 net shares of BGC Class A common stock to Mr. Lutnick, and in connection with the exchange of these 520,380 exchangeable LPUs, 425,765 exchangeable PLPUs were redeemed for a cash payment of $1,525,705 towards taxes; (ii) 88,636 non-exchangeable LPUs were redeemed for zero, and in connection therewith the Company issued Mr. Lutnick 88,636 shares of BGC Class A common stock, less applicable taxes and withholdings, resulting in the delivery of 41,464 net shares of BGC Class A common stock to Mr. Lutnick; and (iii) 1,131,774 H Units held by Mr. Lutnick were redeemed for 1,131,774 HDUs with a capital account of $7,017,000, and in connection with the redemption of these 1,131,774 H Units, 1,018,390 Preferred H Units were redeemed for $7,983,000 for taxes.

On December 21, 2021, the Compensation Committee approved a monetization opportunity for Mr. Lutnick. Effective December 21, 2021, 1,939,896 of Mr. Lutnick’s non-exchangeable BGC Holding PPSUs were redeemed for a payment of $10,851,803. Mr. Lutnick also elected to redeem all of his 425,766 exchangeable BGC Holdings PPSUs for a payment of $1,525,706. In connection with the foregoing, Mr. Lutnick’s 2,011,731 non-exchangeable BGC Holdings PSUs were redeemed for zero and 2,011,731 shares of BGC Class A common stock were issued to Mr. Lutnick. In addition, 376,651 H Units held by Mr. Lutnick were redeemed for 376,651 HDUs with a capital account of $2,339,003, and in connection with the redemption of these 376,651 H Units, 463,969 Preferred H Units were redeemed for $2,661,000 for taxes.

On December 21, 2021, the Compensation Committee approved a monetization opportunity for Mr. Merkel. Effective December 21, 2021, 90,366 non-exchangeable BGC Holdings PSUs were redeemed for zero, 149,301 of Mr. Merkel’s non-exchangeable BGC Holdings PPSUs were redeemed for a cash payment of $555,990, and 90,366 shares of BGC Class A common stock were issued to Mr. Merkel.

On March 2, 2020, the Company granted Stephen M. Merkel 360,065 exchange rights with respect to 360,065 non-exchangeable PSUs that were previously granted to Mr. Merkel. The resulting 360,065 exchangeable PSUs were immediately exchangeable by Mr. Merkel for an aggregate of 360,065 shares of BGC Class A common stock. The grant was approved by the Compensation Committee. Additionally, the Compensation Committee approved the right to exchange for cash 265,568 non-exchangeable PPSUs held by Mr. Merkel, for a payment of $1,507,285 for taxes when the PSU units were exchanged. On March 20, 2020, the Company redeemed 185,300 of such 360,065 exchangeable PSUs held by Mr. Merkel at the average price of shares of BGC Class A common stock sold under BGC’s CEO Program from March 10, 2020 to March 13, 2020 less 1% (approximately $4.0024 per PSU, for an aggregate redemption price of approximately $741,644). This transaction was approved by the Compensation Committee. On July 30, 2020, the Company redeemed the remaining 174,765 exchangeable PSUs held by Mr. Merkel at the price of $2.76, the closing price of our Class A Common Stock on July 30, 2020. This transaction was approved by the Compensation Committee. In connection with the redemption of the 185,300 exchangeable PSUs on March 20, 2020, 122,579 PPSUs were redeemed for $661,303 for taxes. In connection with the redemption of the 174,765 PSUs on July 30, 2020, 142,989 PPSUs were redeemed for $846,182 for taxes.

On March 2, 2020, the Company granted Shaun D. Lynn 883,348 exchange rights with respect to 883,348 non-exchangeable LPUs that were previously granted to Mr. Lynn. The resulting 883,348 exchangeable LPUs were immediately exchangeable by Mr. Lynn for an aggregate of 883,348 shares of BGC Class A common stock. The grant was approved by the Compensation Committee. Additionally, the Compensation Committee approved the right to exchange for cash 245,140 non-exchangeable PLPUs held by Mr. Lynn, for a payment of $ 1,099,599 for taxes when the LPU units are exchanged. On July 30, 2020, the Company redeemed 797,222 exchangeable LPUs held by Mr. Lynn at the price of $2.76, the closing price of our Class A Common Stock on July 30, 2020. This transaction was approved by the Compensation Committee. In connection with the redemption of the 797,222 exchangeable LPUs, 221,239 exchangeable PLPUs were redeemed for $992,388 for taxes. In connection with the redemption, Mr. Lynn’s remaining 86,126 exchangeable LPUs and 23,901 exchangeable PLPUs were redeemed for zero upon exchange in connection with his LLP status.

On March 2, 2020, the Company granted Sean A. Windeatt 519,725 exchange rights with respect to 519,725 non-exchangeable LPUs that were previously granted to Mr. Windeatt. The resulting 519,725 exchangeable LPUs were immediately exchangeable by Mr. Windeatt for an aggregate of 519,725 shares of BGC Class A common stock. The grant was approved by the Compensation Committee. Additionally, the Compensation Committee approved the right to exchange for cash 97,656 non-

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exchangeable PLPUs held by Mr. Windeatt, for a payment of $645,779 for taxes when the LPU units are exchanged. On August 5, 2020, the Company redeemed 436,665 exchangeable LPUs held by Mr. Windeatt at the price of $2.90, the closing price of our Class A common stock on August 5, 2020. This transaction was approved by the Compensation Committee. In connection with the redemption of the 436,665 exchangeable LPUs, 96,216 exchangeable PLPUs were redeemed for $637,866 for taxes. In connection with the redemption, 20,849 exchangeable LPUs and 1,440 exchangeable PLPUs were redeemed for zero upon exchange in connection with Mr. Windeatt’s LLP status.

Additionally, on August 5, 2020, the Company granted Mr. Windeatt 40,437 exchange rights with respect to 40,437 non-exchangeable LPUs that were previously granted to Mr. Windeatt. The resulting 40,437 exchangeable LPUs were immediately exchangeable by Mr. Windeatt for an aggregate of 40,437 shares of BGC Class A common stock. The grant was approved by the Compensation Committee. Additionally, the Compensation Committee approved the right to exchange for cash 21,774 non-exchangeable PLPUs held by Mr. Windeatt. On August 5, 2020, the Company redeemed these 40,437 exchangeable LPUs held by Mr. Windeatt at the price of $2.90, the closing price of our Class A common stock on August 5, 2020. This transaction was approved by the Compensation Committee. In connection with the redemption of these 40,437 exchangeable LPUs, the 21,774 exchangeable PLPUs were redeemed for $136,305 for taxes.

In addition to the foregoing, on August 6, 2020, Mr. Windeatt was granted exchange rights with respect to 43,890 non-exchangeable Newmark Holding LPUs that were previously granted to Mr. Windeatt. Additionally, Mr. Windeatt was granted the right to exchange for cash 17,068 non-exchangeable Newmark Holdings PLPUs held by Mr. Windeatt. As these Newmark Holdings LPUs and PLPUs were previously non-exchangeable, the Company took a transaction charge of $381,961 upon grant of exchangeability. On August 6, 2020, Newmark redeemed the 40,209 Newmark Holdings exchangeable LPUs held by Mr. Windeatt for an amount equal to the closing price of Newmark’s Class A Common Stock on August 6, 2020 ($4.16) multiplied by 37,660 (the amount of shares of Newmark’s Class A Common Stock the 40,209 Newmark Holdings LPUs were exchangeable into based on the Exchange Ratio at August 6, 2020). In connection with the redemption of these 40,209 exchangeable Newmark Holdings LPUs, 15,637 exchangeable Newmark Holdings PLPUs were redeemed for $194,086 for taxes. In connection with the redemption, 3,681 exchangeable Newmark Holding LPUs and 1,431 exchangeable Newmark Holdings PLPUs were redeemed for zero upon exchange in connection with Mr. Windeatt’s LLP status.

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

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

MARKET SUMMARY

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

[[GREPCENT_TABLE]]
[["","December 31, 2021","","September 30, 2021","","June 30, 2021","","March 31, 2021","","December 31, 2020"],["Notional Volume (in billions)"],["Total Fully Electronic volume","$","10,908","","","$","10,059","","","$","10,049","","","$","11,605","","","$","8,736"],["Total Hybrid volume1","61,846","","","62,859","","","62,345","","","68,113","","","59,165"],["Total Fully Electronic and Hybrid volume","$","72,754","","","$","72,918","","","$","72,394","","","$","79,718","","","$","67,901"],["Transaction Count (in thousands, except for days)"],["Total Fully Electronic transactions","3,816","","","3,366","","","3,212","","","3,746","","","2,895"],["Total Hybrid transactions","1,205","","","1,070","","","1,113","","","1,348","","","1,129"],["Total Fully Electronic and Hybrid transactions","5,021","","","4,436","","","4,325","","","5,094","","","4,024"],["Trading days","64","","64","","63","","61","","64"]]
[[/GREPCENT_TABLE]]

_________________________

Note: Certain information may have been recast with current estimates to reflect changes in reporting methodology. Such revisions have no impact on the Company’s revenues or earnings.

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1Hybrid is defined as transactions involving some element of electronic trading but executed by BGC’s brokers, exclusive of voice-only transactions. Fully electronic involves customer-to-customer trades, free from broker execution.

Fully Electronic volume, including new products, was $42.6 trillion for the year ended December 31, 2021, compared to $32.4 trillion for the year ended December 31, 2020. Our Hybrid volume for the year ended December 31, 2021 was $255.2 trillion, compared to $263.7 trillion for the year ended December 31, 2020.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

The following table summarizes certain of our contractual obligations at December 31, 2021 (in thousands):

[[GREPCENT_TABLE]]
[["","Total","","Less Than 1 Year","","1-3 Years","","3-5 Years","","More Than 5 Years"],["Long-term debt and collateralized borrowings1","$","1,059,642","","","$","6,391","","","$","753,251","","","$","300,000","","","$","\u2014"],["Operating leases2","221,937","","","32,288","","","51,751","","","34,684","","","103,214"],["Interest on long-term debt and collateralized borrowings3","122,034","","","49,906","","","59,732","","","12,396","","","\u2014"],["Short-term borrowings4","3,584","","","3,584","","","\u2014","","","\u2014","","","\u2014"],["Interest on Short-term borrowings","505","","","484","","","21","","","\u2014","","","\u2014"],["One-time transition tax5","20,231","","","2,709","","","7,385","","","10,137","","","\u2014"],["Other6","21,776","","","10,038","","","11,738","","","\u2014","","","\u2014"],["Total contractual obligations","$","1,449,709","","","$","105,400","","","$","883,878","","","$","357,217","","","$","103,214"]]
[[/GREPCENT_TABLE]]

_________________________________

1Long-term debt and collateralized borrowings reflects long-term borrowings of $450.0 million of the 5.375% Senior Notes (the $450.0 million represents the principal amount of the debt; the carrying value of the 5.375% Senior Notes as of December 31, 2021 was $447.9 million), $300.0 million of the 3.750% Senior Notes (the $300.0 million represents the principal amount of the debt; the carrying value of the 3.750% Senior Notes as of December 31, 2021 was approximately $297.7 million), $300.0 million of the 4.375% Senior Notes (the $300.0 million represents the principal amount of the debt; the carrying value of the 4.375% Senior Notes as of December 31, 2021 was approximately $297.5 million), $5.9 million of collateralized borrowings due April 8, 2023, and $3.8 million of collateralized borrowings due April 19, 2023. See Note 18—“Notes Payable, Other and Short-term Borrowings” for more information regarding these obligations, including timing of payments and compliance with debt covenants.

2Operating leases are related to rental payments under various non-cancelable leases, principally for office space, net of sublease payments to be received. There are no sublease payments to be received over the life of the agreement.

3Interest on long-term debt and collateralized borrowings also includes interest on the undrawn portion of the committed unsecured senior Revolving Credit Agreement which was calculated through the maturity date of the facility, which is February 26, 2023. As of December 31, 2021, the undrawn portion of the committed unsecured Revolving Credit Agreement was $350.0 million.

4Short-term borrowings reflects approximately $3.6 million (BRL 20.0 million) of borrowing under the Company’s committed unsecured loan agreement. See Note 18—“Notes Payable, Other and Short-term Borrowings” for more information regarding this obligation.

5The Company completed the calculation of the one-time transition tax on the deemed repatriation of foreign subsidiaries’ earnings pursuant to the Tax Act and previously recorded a net cumulative tax expense of $28.6 million, net of foreign tax credits, with an election to pay the taxes over eight years with 40% to be paid in equal installments over the first five years and the remaining 60% to be paid in installments of 15%, 20% and 25% in years six, seven and eight, respectively. The cumulative remaining balance as of December 31, 2021 is $20.2 million.

6Other contractual obligations reflect commitments of $10.0 million to make charitable contributions, which are recorded as part of “Accounts payable, accrued and other liabilities” in the Company’s consolidated statements of financial condition. The amount payable each year reflects an estimate of future Charity Day obligations. In addition, as part of the Insurance Business Disposition, unvested equity and other awards previously granted by BGC to employees of its Insurance brokerage business were converted into the right to receive a cash payment from BGC; a significant portion of these awards was 50% vested and paid in cash at closing, with the remaining 50% vesting and to be paid in cash two years after closing. The remaining portion of these awards will have been 100% vested and paid in cash by two years after the closing. The payments after closing are only made if the applicable employee remains an employee of the Insurance brokerage business. The remaining portion of these awards is reflected as other contractual obligations, and is recorded as part of “Accounts payable, accrued and other liabilities” in the Company’s consolidated statements of financial condition.

OFF-BALANCE SHEET ARRANGEMENTS

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. These accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the time of estimation. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments, and we evaluate these estimates on an ongoing basis. To the extent actual experience differs from the assumptions used, our consolidated statements of financial condition, consolidated statements of operations and consolidated statements of cash flows could be materially affected. We believe that the following accounting policies involve a higher degree of judgment and complexity.

Revenue Recognition

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

Equity-Based and Other Compensation

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

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

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

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

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

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or such other amount as set forth in the award documentation. The quarterly allocations of net income to such LPUs are reflected as a component of compensation expense under “Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our consolidated statements of operations.

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

Certain LPUs are granted exchangeability into shares of BGC or Newmark Class A common stock or are redeemed in connection with the grant of BGC or Newmark Class A common stock issued; BGC Class A common stock is issued on a one-for-one basis, and Newmark Class A common stock is issued based on the number of LPUs exchanged or redeemed multiplied by the then Exchange Ratio. At the time exchangeability is granted or shares of BGC or Newmark Class A common stock are issued, we recognize an expense based on the fair value of the award on that date, which is included in “Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our consolidated statements of operations. During the years ended December 31, 2021, 2020 and 2019, we incurred equity-based compensation expense of $128.1 million, $85.0 million and $100.9 million, respectively, related to LPUs and issuance of common stock.

Certain LPUs have a stated vesting schedule and do not receive quarterly allocations of net income. Compensation expense related to these LPUs is recognized over the stated service period, and these units generally vest between two and five years. During the years ended December 31, 2021, 2020 and 2019, we incurred equity-based compensation expense related to these LPUs of $78.6 million, $74.3 million, and $41.7 million, respectively. This expense is included in “Equity-based compensation and allocations of net income to limited partnership units and FPUs” in our consolidated statements of operations.

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

As of December 31, 2021 and 2020 , the aggregate balance of employee loans, net of reserve, was $287.0 million and $408.1 million, respectively, and is included as “Loans, forgivable loans and other receivables from employees and partners, net” in our consolidated statements of financial condition. Compensation expense (benefit) for the above-mentioned employee loans for the years ended December 31, 2021, 2020 and 2019 was $217.7 million, $67.0 million and $35.7 million, respectively. The compensation expense related to these loans was included as part of “Compensation and employee benefits” in our consolidated statements of operations.

Goodwill

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

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

The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying

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amount of a reporting unit exceeds its fair value, an impairment loss should be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is deemed not to be impaired. To estimate the fair value of the reporting unit, we use a discounted cash flow model and data regarding market comparables. The valuation process requires significant judgment and involves the use of significant estimates and assumptions. These assumptions include cash flow projections, estimated cost of capital and the selection of peer companies and relevant multiples. Because assumptions and estimates are used in projecting future cash flows, choosing peer companies and selecting relevant multiples, actual results may differ from our estimates under different assumptions or conditions; and changes to these estimates and assumptions, as a result of changing economic and competitive conditions, could materially affect the determination of fair value and/or impairment.

CECL

We present financial assets that are measured at amortized cost net of an allowance for credit losses, which represents the amount expected to be collected over their estimated life. Expected credit losses for newly recognized financial assets carried at amortized cost, as well as changes to expected lifetime credit losses during the period, are recognized in earnings. The CECL methodology became effective for the Company on January 1, 2020, due to the adoption of the new FASB guidance on credit losses. The methodology’s impact on expected credit losses, among other things, reflects the Company’s view of the current state of the economy, forecasted macroeconomic conditions and BGC’s portfolios. The amount of the allowance is based on significant estimates and the ultimate losses may vary from such estimates as more information becomes available or conditions change.

Income Taxes

We account for income taxes using the asset and liability method as prescribed in the U.S. GAAP guidance, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to basis differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Certain of our entities are taxed as U.S. partnerships and are subject to UBT in the City of New York. Therefore, the tax liability or benefit related to the partnership income or loss except for UBT rests with the partners (see Note 2—“Limited Partnership Interests in BGC Holdings and Newmark Holdings” to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for a discussion of partnership interests), rather than the partnership entity. As such, the partners’ tax liability or benefit is not reflected in our consolidated financial statements. The tax-related assets, liabilities, provisions or benefits included in our consolidated financial statements also reflect the results of the entities that are taxed as corporations, either in the U.S. or in foreign jurisdictions.

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

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

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

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

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

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There have been no other significant changes to the Company's critical accounting policies and estimates during fiscal year 2021.

RECENT ACCOUNTING PRONOUNCEMENTS

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