BGC Group, Inc’s (formerly BGC Partners, Inc.) common dividend paid to BGC stockholders is based on post-tax Adjusted Earnings per fully diluted share, which, due mainly to non-cash, non-dilutive, and non-economic GAAP charges, were higher than its earnings and profits under GAAP and U.S. Federal tax principles for certain years. In addition, BGC’s  net income for both GAAP and Adjusted Earnings includes income earned by foreign affiliates of the Company, corporate subsidiaries, and other entities generally not taxable under U.S. Federal tax principles. Therefore, a portion of dividends paid were treated as a nontaxable return of capital (or “non-dividend distributions”) for BGC’s common stockholders in some years. The breakout of taxable, qualified dividends for 2010 to date can be found in the table at the end of this page.

Note: The dividends shown in the table above paid by BGC are qualified dividends and are treated as such for tax purposes. BGC’s dividend for U.S. Federal income tax purposes will be reported to U.S. recipients on the IRS Forms 1099-DIV and to non-U.S. recipients on IRS Forms 1042-S. Common stockholders will not receive a Schedule K-1 related to BGC’s dividends.

Nontaxable Return of Capital

Under U.S. Federal income tax principles, a nontaxable return of capital, sometimes referred to as a “non-dividend distribution,” is a cash distribution that is not paid out of the taxable earnings and profits of a corporation. For common stockholders, a nontaxable return of capital reduces the cost basis of an investment. It is not taxed until the cost basis of said investment is fully recovered.

The remaining portion of the dividends are treated as a qualified dividend for U.S. Federal income tax purposes. This information has been reported to certain firms that provide U.S. recipients of BGC’s dividend with their IRS Forms 1099-DIV and non-U.S. recipients with their IRS Forms 1042-S.

The portion of dividends to common stockholders that will be taxable will not impact BGC’s financial results for either GAAP or Adjusted Earnings or the Company’s or its affiliates’ ability to pay distributions to all partnership units and dividend payments to common stockholders.

This information is not intended to be all-inclusive or to render specific professional tax advice.