eSpeed Reports Fourth Quarter and Full Year 2007 Results

Business Wire, Feb 27, 2008

BGC provides preliminary 4Q and FY2007 results;

Combined Company Provides 1Q2008 Outlook

NEW YORK -- eSpeed, Inc. (NASDAQ: ESPD), a leading developer of electronic marketplaces and related trading technology for the global capital markets, today reported results for the fourth quarter and full year ended December 31, 2007.

On May 29, 2007, eSpeed, Inc. and BGC Partners announced that eSpeed and BGC planned to merge, and that the Combined Company would be named "BGC Partners, Inc." This merger is expected to close by the end of the first quarter of 2008. This release discusses fourth quarter and full year results for both companies, and the outlook for the Combined Company.

eSpeed's Fourth Quarter and Full Year Results Summary

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BGC's Preliminary Fourth Quarter and Full Year Results Summary(1)

BGC announced the following financial highlights related to its preliminary results for the fourth quarter and full year 2007:

* BGC's fourth quarter 2007 pre-tax profits were approximately $20 million versus a pre-tax loss of $32 million in the fourth quarter of 2006;

* BGC's full year 2007 pre-tax profits were approximately $101 million versus a pre-tax loss of $87 million in 2006;

* BGC's fourth quarter 2007 revenues increased by 33 percent year-over-year to approximately $253 million; and

* BGC's full year 2007 revenues increased by 37 percent year-over-year to approximately $1,029 million.

"BGC had a strong fourth quarter, and given its excellent performance year to date, we expect the Combined Company's pro forma pre-tax first quarter 2008 profits to increase by over 80 percent compared to the first quarter of 2007," said Howard W. Lutnick, who is Chairman, Chief Executive Officer and President of eSpeed, and who will become Chairman and co-Chief Executive Officer of the Combined Company upon the completion of eSpeed's planned merger with BGC.

"We expect the Combined Company's first quarter 2008 pro forma earnings per share to be approximately 450 percent higher than eSpeed's stand-alone non-GAAP net operating income per share of four cents in the first quarter of 2007," added Lee M. Amaitis, Chairman and Chief Executive Officer of BGC and Vice Chairman of eSpeed, who will become co-Chief Executive Officer of BGC Partners Inc. after the completion of the planned merger. "This extraordinary performance further demonstrates the strategic value to our stockholders of this highly accretive combination."

eSpeed's Fourth Quarter Earnings

eSpeed reported a net loss of $21.0 million, or $0.42 per diluted share, for the fourth quarter of 2007 based on Generally Accepted Accounting Principles ("GAAP"). To reflect earnings generated from the Company's operations, eSpeed also reported a non-GAAP net operating loss of $2.0 million, or $0.04 per diluted share. The difference between non-GAAP net operating loss and GAAP net loss for the quarter was primarily due to $12.3 million in one time pre-merger severance and stock based compensation expenses, $3.5 million in patent litigation costs, $1.8 million in deal-related expenses, a $1.0 million charge for the impairment of fixed assets and capitalized software costs, and $0.5 million in losses from Aqua, in which eSpeed has an equity stake and into which it contributed its previous Equities Direct Access business in October 2007. All of these differences were net of tax.

In comparison, eSpeed reported GAAP net income of $3.4 million, or $0.07 per diluted share, for the fourth quarter of 2006. eSpeed also reported non-GAAP net operating income of $3.3 million, or $0.06 per diluted share. The difference between non-GAAP net operating income and GAAP net income for the quarter occurred primarily due to a September 11th-related government grant of $1.9 million partially offset by a $1.2 million charge for the impairment of fixed assets and capitalized software costs, $0.5 million in patent litigation costs, and a $0.1 million charge related to an office relocation, all net of tax.

eSpeed's Full Year Earnings

For the full year 2007, eSpeed reported a GAAP net loss of $32.5 million, or $0.64 per diluted share, and non-GAAP net operating income of $0.9 million, or $0.02 per diluted share. The difference between non-GAAP net operating income and GAAP net loss for the year was primarily due to $12.3 million in one time pre-merger severance and stock based compensation expenses, $10.7 million in patent litigation costs, $5.1 million in deal-related expenses, $3.5 million in charges for the impairment of fixed assets and capitalized software costs, $1.6 million in losses from Aqua, and $0.3 million in charitable contributions related to eSpeed's September 11, 2007 Charity Day. All of these differences were net of tax.

In comparison, eSpeed reported GAAP net income of $4.7 million, or $0.09 per diluted share, for the full year 2006. For the same timeframe, eSpeed reported non-GAAP net operating income of $7.8 million, or $0.15 per diluted share. The difference between non-GAAP net operating income and GAAP net income for the full year 2006 was primarily due to insurance proceeds of $2.1 million, a September 11th related government grant of $1.9 million, a payment to eSpeed of $0.5 million relating to a litigation settlement, and a $0.2 million net gain related to tax settlements, partially offset by $2.5 million in expenses relating to the relocation of the Company's London offices, $2.0 million in patent litigation costs, $1.3 million in acquisition-related costs, a $1.2 million charge for the impairment of fixed assets and capitalized software costs, $0.7 million in accelerated amortization of capitalized software, and a $0.2 million charitable contribution to the Cantor Fitzgerald Relief Fund, all net of tax.