Welcome to the BGC Partners' Third Quarter 2017 Conference Call. My name is Shannon, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded. And I will now turn the call over to Jason McGruder, Head of Investor Relations. Sir, you may begin.

Good morning. Our third quarter 2017 financial results press release and presentation summarizing these results were issued this morning. These can be found at ir.bgcpartners.com. Newmark Grubb Inc's recently filed registration statement on Form S1 will also be available on this same website. Unless otherwise stated, the results provided on today's call compare only the third quarter of 2017 with the year earlier period. We will be referring to results on this call only on a distributable earnings basis unless otherwise stated. We may also refer to adjusted EBITDA. Please see today's press release for results under Generally Accepted Accounting Principles or GAAP. Please also see the section in the back of today's press release for the complete definitions of any such non-GAAP terms, reconciliation of these terms to the corresponding GAAP results and how, when and why management uses them. For the purposes of today's call, all the Company's fully electronic businesses are referred to as FENICS. These offerings include financial services segment, fully electronic brokerage products, as well as offerings of market data, software solutions and post-trade services. Also on today's call Newmark is synonymous with Newmark Knight Frank, NKF or Real Estate Services segment. BGC's financial results have been recast to include the results of Berkeley Point and Lucera for all prior periods discussed in today's call because these transactions involve reorganizations of entities under common control. Beginning with the third quarter of 2017, BGC began recording the receipt of payments from Nasdaq as part Real Estate Services. As result, the Nasdaq payment for the quarter just ended was recorded as other income for Newmark rather than as part of financial services. This change does not affect BGC's consolidated results for either GAAP or distributable earnings, but only adjusts the presentation of the consolidated Company's segments. I also remind you that the information regarding our business on today's call, they're not historical, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Such statements involve risks and uncertainties, except as required by law, BGC undertakes no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties which can cause actual results to differ from those contained in the forward-looking statements, see BGC's SEC, Securities and Exchange Commission filings, including, but not limited to, the risk factors set forth in the most recent Form 10-K and any updates to such risk factors contained in subsequent Form 10-Q or Form 8-K filings. I am now happy to turn the call over to Howard Lutnick, Chairman and CEO of BGC Partners.

Thank you, Jason. Good morning and thank you for joining us for our third quarter 2017 conference call. With me today are BGC's President, Shaun Lynn; our Chief Operating Officer, Sean Windeatt and Steve McMurray, our Chief Financial Officer. Earlier this week our subsidiary Newmark Group Inc, filed an S1 with respect to its IPO. We will not discuss this planned offering nor answer questions regarding it on today's call. As Jason mentioned, you can view the S1 on our website. BGC's revenues grew by nearly 13% to $827 million, while our post tax earnings were up by 25% to $131 million. Our improved revenues were led by Newmark in our rates and foreign exchange businesses. Our growth was also driven by solid performance from our FENICS fully electronic business. I'm also pleased to report that our Board declared $0.18 qualified dividend for the third quarter, which is up 12.5% compared to last year. At yesterday's closing stock price this translates into a 4.5% annualized yield. We believe that the inclusion of NASDAQ payments in Newmark will benefit our shareholders, as they will give Newmark additional resources to profitably hire, make accretive acquisitions and continue to grow its market share. With that I'll now turn the call over to Shaun.

Thanks Howard and good day, everyone. In the financial services business, revenues from equities, insurance and other asset classes more than doubled, due mainly to the additions of Sunrise and Besso. Our Rates business generated a top-line increase of nearly 10% driven by organic growth, including an over 40% improvement from FENICS fully electronic rates, our overall revenues for Financial Services increased by approximately 18% to $417 million. Financial Services pre-tax earnings were up by 33% to $88 million, while pre-tax margin expanded by approximately 240 basis points, all when excluding the NASDAQ payment from the prior year period. Excluding the NASDAQ payment, this year by including it for last year, financial services pre-tax earnings were up by approximately 6% to $88 million and improved operating profitability in financial services was led by the cost synergies we delivered over the course of the last two years and continued improvement in quarterly front office productivity, which was up by 11% year-on-year in the segment. Moving to our results for Real Estate Services, we generated strong growth in leasing, capital markets and management and servicing fees. Newmark's overall revenues for the quarter were up by 7% to $399 million. Excluding the Nasdaq payments, pre-tax earnings increased by nearly 18% for real estate service, while pre-tax margin expanded by approximately 160 basis points. Including the NASDAQ payments, Newmark's pre-tax earnings were up by 51% to $86.2 million. Gains from mortgage banking activities decreased in the third quarter of 2017, due to declines from record loan originations in the overall multifamily agency lending industry in the third quarter of 2016. And because Berkley Point had some [particular lost] [ph] transactions last year. However, Berkley Point's multifamily agency loan originations were up by 33% in the nine months ended - September 30, 2017, compared to a year earlier period. The timing of the company's low-end originations can vary from period to period. Over time we believe that the addition of Berkley Point will significantly increase the scale and scope of our real estate services business, and with the combination of mortgage broking multifamily business sales and agency multifamily lending will generate substantial revenue synergy. With that I'd now turn the call over to Steve.

Thank you, Shaun and hello, everyone. BGC generated consolidated quarterly revenues of $827 million up 12.5%. Our revenues from the America's grew by approximately 7%, while revenues from Europe, Middle East and Africa were up by 26%. Asia Pacific revenues increase by 23%. With respect to expenses, compensation increased by 12.1% with declines in the percentage of revenue. Our compensation ratio increased slightly to 57.2%. Our non-compensation expenses were $194.3 million, compared to $167.6 million at a year ago. As a percentage of revenue our non-compensation expenses were 23.5% versus 23.8% in the year ago period, which reflects the impact of increased interest expense associated with the Berkeley Point acquisition. Our overall expenses were $667.2 million in the third quarter 2017, compared to $589.3 million. Our pre-tax earnings before non-controlling interest in subsidiaries and taxes were up by 28.4% to $156.6 million. Our pre-tax margin expanded by more than 230 basis points to 18.9%. BGC's post tax earnings were up by 25.3% to $131.5 million. Our post tax margin was 15.9%, an expansion of more than 160 basis points. Our post tax earnings per share grew by 16% to $0.29. BGC's fully diluted weighted average share count was 457.3 million, with distributable earnings in GAAP. At the end of the third quarter of 2017, our spot fully diluted share count was 457.9 million. The increases were due to shares issued with respective to equity based compensation, front office hires and acquisitions. Additionally, BGC redeemed and/or repurchased 2.3 million shares and/or units net of the cost to BGC of $27 million or $11.52 per share or units during the first nine months of 2017. Moving on to the balance sheet, a number of balance sheet related items including total capital and book value per share were impacted by the recast of…

Thank you, Steve. Our outlook for the fourth quarter of 2017 compared with the recast figures for last year is as follows. We expect to generate revenues of between $800 and $850 million compared with our recast revenues of $755.8 million. Now, historical revenues for the fourth quarter of 2016 before the recast, was $673.2 million. We anticipate pre-tax earnings to be in the range of a $140 million and $160 million, as compared with our recast pre-tax earnings of $149.1 million. Our historical pre-tax earnings for the fourth quarter of 2016 before recast were $129.1 million. Our outlook includes, an additional $7.5 million of interest expense related to new debt for the Berkeley Point acquisition that was not included in our recast pre-tax earnings for the fourth quarter of 2016. We expect our provision for taxes on distributable earnings to be in the range of approximately $23 million to $27 million, compared with our recast provision from taxes on distributable earnings at $19.9 million for the fourth quarter of 2016. We anticipate updating our fourth quarter consolidating company guidance towards the end of December. So operator we now like to open the call for questions please.

Thank you, we will now begin the question-and-answer session. [Operator instructions] And I am currently showing no questions at this time. I'd like to turn the call back over to Mr. Howard Lutnick, Chairman and CEO for closing remarks.

No, you have another question.

Looks like we have a question from Rich Repetto with Sandler O'Neill, you may begin.

Sorry, Howard. I don't know how to get into being the only guy in the queue here. Anyway, I am trying to understand the seasonality of the businesses in 4Q versus 3Q and given your outlook of the 800 to 850. Could you give us a little bit more granularity of - like financial services normally goes down seasonally in the fourth quarter, real estate up, can you give us - how that is actually shaping out given what you've seen in October so far and what's built into the 800 to 850?

Sure, I'm going to let Shaun answer with respect to financial services for the quarter and then we'll talk about real estate.

The financial services, what was implied in the guidance in October, you may also remember, we spoke about this last quarter. Wee guide what we know or guide what we see. So far October has been stronger than the previous October. However, as we also mentioned, November last year included the US election, which exaggerates the November number. So, included in our guidance is our expectation, which has an overall revenues up [round about] [ph] by 10% year-on-year. This is just slightly softer because of the election than the first three quarters.

And with respect to real estate, the fourth quarter is the best quarter, and that is a less true for Berkeley Point, so that's a mitigating fact as the financing of multifamily tends to be more balanced across the year, but this year we have a one off anomaly I guess, which is the combination of hurricanes in both Texas and Florida, effectively softens those two markets now is horrible, the people in both Texas and Florida have dealt with a horrible circumstance and I don't mean to talk about these hurricanes just in business without commenting on how difficult that is and of course also for the people in Puerto Rico, it is really just dreadful and horrible, but, with respect to our business, what happens in the quarter is, they clean up and they do the work to make things get right again. And the transactions and the business of ordinary real estate sort of take a back seat, to cleaning up and moving forward. So, I think, a bit of the third quarter was affected by the hurricanes, that happened in September through the month. The fourth quarter in those two markets will definitely be softer than they otherwise would be. And that will start to dissipate, probably the first quarter will be a little softer and that would dissipate, as the year goes on. We do not view this as a lasting impact, what we do view it as is just a timing impact that slows things down as people clean it up, so I think when you may have seen in our fourth quarter is just a reality of two excellent markets with spectacular people in them, being hardly affected by terrible weather conditions. And that have really harmed them, and I just create the effect of creating a slowing in those two markets for everybody’s business.

And how would that impact be felt like on percentage basis, both at Berkeley Point the same as the overall real estate business in the fourth quarter impact?

I think those two markets are comparatively larger for Berkeley Point than they are for Newmark taken as a whole because there's just more multifamily in those particular markets than the business for instance taken as a whole. So, it would be slightly more exaggerated, it would be more exaggerated in the Berkeley Point, side of that equation. However, we do not view the financing the multifamily having any long-term impact whatsoever. It'll simply be they'll clean up afterward, take stock in the market and then those who wish to finance or re-finance or sell their multifamily buildings will do so and we will have our participation. So, we are very-very bullish on the business at Berkeley Point; we are very very bullish on the business at Berkeley Point together with ARA our sales organization of multifamily buildings and we are very disappointed in the horrible events that happened to these two communities. And, I don't mean to minimize it, but for our business it's a time issue and nothing else.

Understood, that's very helpful. I think I could probably back into this, but Shaun said that financial services was going to be up 10%, I think that was sort of the guidance, around 10% year-over-year. Would you have the same percentage for the fourth quarter for real estate, whether it's combined or Berkley Point and the rest of the business?

As we didn't do the math, so if you want to back into it, go ahead, I just don't have it on my fingertips.

Okay, okay. Then the next question is would you expect the, you know we can back into the overall expenses given in your guidance. But any color on the compensation ratio, given these movements I guess, in the next quarter, 4Q?

Now, I guess the number is lower because Berkeley Point carries with it, a lower compensation ratio because it's a different kind of business. And, therefore this will be this lower competition ratio, should be the new range that the accompanies it.

Got it, okay. And then I guess may be a broader question on the regulatory front, the treasury white paper report like, pretty much, I would be sort of de-regulation umbrella I guess or theme as you've talked about has been sort of a tailwind for the big banks and I guess, incrementally given what's to come out, would you expect any - that tailwind or to be about the same, given what you've read in the over 200-page treasury report in the recommendations, they were making?

Yeah, we still think the combination, the regulatory outlook and framework coupled with the United States no longer doing quantitative easing and starting to slowly reduce the scale of its balance sheet, with the probability that within e reasonable period of time, the European Central Bank might follow suit, granted it's behind and it's still growing. It's still - global treasure banks outside of the US are still growing their balance sheet. But as that stabilizes and shrinks, I think you really have a combination of just baseline underlying resource that is a tailwind for our business. But you have not seen in years and years and years. You know, you've seen the company successfully run into a headwind of quantitative easing low volatility, you know and as that wind subsides and were to shift to behind our backs, you'll see numbers that are just better from this company. This quarter was excellent, and I think just the underlying economics of our business are improving.

Okay, one last thing Howard, you've also stated another example of electronic businesses have spun out with the BondPoint sale to ICE, announced yesterday or the day before. But I guess, a couple of questions on that, how does that - that's a predominantly a retail system, but could you give us any color on the corporate, what you as a corporate - or municipal bond trading businesses. As far as automation, well that's the first question, I'll follow up from there. Does it mean anything to you?

What we've seen together, we started with a near 20 times sale of the E-speed in 2013. And, then we made a sale of Trayport at around 16 times and now BondPoint at around 20 times and that's a small revenue business. Its revenues are a fraction of the sales price. So, what you see is that when separated these businesses are tremendously, tremendously valuable. And each time one of these transactions happens, I can't help myself but point out that once upon a time, we had E-speed inside us which we sold, once upon a time we had Trayport inside of us that we sold. And I would like to point out that we own the business called [Indiscernible] which does over a quarter a billion dollars in revenue and has profits that are wildly higher than the revenues of BondPoint maybe three four times there. So, maybe more than that I think. I just think we are building valuable assets and our objective is to make those assets work for the benefit of our shareholders and I think this just points out the value of the assets that we’re building in side of us, and the value that these exchanges place on these kind of businesses because this is their future, these businesses we build and firms like us build them, and they buy them, and they operate them I think very well, so I think there is a nice model of firms like ours build them and these great exchanges buy them and operate them and that's an ecosystem that we are happy to live in. As you know, we sold one business to NASDAQ and we sold another business to the New York Stock Exchange. We like these exchanges, they are great operators and they are the healthy place for these things to end up, but we built them.

Understood and I'll keep asking questions. I know you've talked about - eventually you're trying to give us more transparency or information on some the electronic businesses that you house. And I guess the question is that - you may not be prepared for that, but I would ask, is there any other platforms that you would highlight within FENICS right now that are more dominant I guess?

I mean we have, there's a number of businesses. Our rates business, our non-benchmark rates business grew 40%, so rates is 25% of FENICS business. Data, software and prostrate was 20% of the business and I guess our FX business about 11%, credit about 25% and those businesses are - those are the areas that we electronically trade, and we'll get bigger at them. We're building a spot foreign exchange business as well as we're building a benchmark US treasury business. All these businesses continue to mature within the brand of - within the group of FENICS. We continue to invest, and we continue to innovate and expand through various contributors, pre-trade, post trade, execution, all things with respect to doing as a global footprint company and answering questions to the regulators with regards to them too. You saw, we announced this week as well going live, I think it was on Monday. But we continue to invest, so we're excited about the proposition of FENICS over the course of the next - the future.

Understood, okay, thanks for all the information guys. Thank you.

Thank you. We have no further questions at this time. I'll like to turn the call back over to Howard Lutnick for closing remarks.

Thank you all for joining us and we look forward to updating you around the end of the year. Thank you very much and have a great day today everybody.

Ladies and gentlemen, this concludes today's conference. Thanks for participating. You may now disconnect.