4.	Earnings Per Share

FASB guidance on Earnings Per Share (“EPS”) establishes standards for computing and presenting EPS. Basic EPS excludes dilution and is computed by dividing net income available to common stockholders by the weighted-average shares of common stock outstanding and contingent shares for which all necessary conditions have been satisfied except for the passage of time. Net income is allocated to each of the economic ownership classes described above in Note 2—“Limited Partnership Interests in BGC Holdings,” and the Company’s outstanding common stock, based on each class’s pro rata economic ownership of the operating subsidiaries.

The Company’s earnings for the three and six months ended June 30, 2013 and 2012 were allocated as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Net income available to common stockholders	$	34,466	$	1,958	$	41,464	$	10,147
Allocation of income to limited partnership interests in BGC Holdings	$	140,068	$	3,034	$	151,026	$	13,471

The following is the calculation of the Company’s basic EPS (in thousands, except per share data):


	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Basic earnings per share:
Net income available to common stockholders	$	34,466	$	1,958	$	41,464	$	10,147

Basic weighted-average shares of common stock outstanding (1)		171,758		140,368		167,515		138,257

Basic earnings per share	$	0.20	$	0.01	$	0.25	$	0.07

(1)

For the three and six months ended June 30, 2013, basic weighted-average shares of common stock include, on a weighted-average basis, 45.2 million shares of the Company’s Class A common stock (of which approximately 39.1 million are restricted shares) that the Company granted and expects to issue in connection with the global partnership restructuring program (see Note 1—“Organization and Basis of Presentation”).

Fully diluted EPS is calculated utilizing net income available for common stockholders plus net income allocations to the limited partnership interests in BGC Holdings, as well as adjustments related to the interest expense on the Convertible Notes, if applicable (see Note 15—“Notes Payable, Collateralized and Short-Term Borrowings”), and expense related to dividend equivalents for certain RSUs, if applicable, as the numerator. The denominator is comprised of the Company’s weighted-average outstanding shares of common stock and, if dilutive, the weighted-average number of limited partnership interests and other contracts to issue shares of common stock, including Convertible Notes, stock options, RSUs and warrants. The limited partnership interests are potentially exchangeable into shares of Class A common stock; as a result, they are included in the fully diluted EPS computation to the extent that the effect would be dilutive.

The following is the calculation of the Company’s fully diluted EPS (in thousands, except per share data):


	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Fully diluted earnings per share:
Net income available to common stockholders	$	34,466	$	1,958	$	41,464	$	10,147
Allocation of net income to limited partnership interests in BGC Holdings, net of tax		31,618		1,836		39,361		9,373
Interest expense on convertible notes, net of tax		3,860		—		8,657		—
Dividend equivalent expense on RSUs, net of tax		—		84		3		148

Net income for fully diluted shares	$	69,944	$	3,878	$	89,485	$	19,668

Weighted-average shares:
Common stock outstanding		171,758		140,368		167,515		138,257
Limited partnership interests in BGC Holdings (1)		165,127		132,035		159,255		129,158
Convertible notes		39,780		—		39,722		—
RSUs (Treasury stock method)		630		585		339		765
Other		797		1,768		751		1,302

Fully diluted weighted-average shares of common stock outstanding		378,092		274,756		367,582		269,482

Fully diluted earnings per share	$	0.18	$	0.01	$	0.24	$	0.07

(1)

For the three and six months ended June 30, 2013, limited partnership interests in BGC Holdings exclude, on a weighted-average basis, 77.4 million limited partnership units that were redeemed or exchanged in June 2013 in connection with the global partnership restructuring program (see Note 1—“Organization and Basis of Presentation”).

For the three months ended June 30, 2013 and 2012, respectively, approximately 6.6 million and 48.4 million potentially dilutive securities were not included in the computation of fully diluted EPS because their effect would have been anti-dilutive.

Additionally, as of June 30, 2013 and 2012, respectively, approximately 5.9 million and 3.5 million shares of contingent Class A common stock were excluded from the computation of fully diluted EPS because the conditions for issuance had not been met by the end of the respective periods.