Earnings Release • Jul 30, 2013
Earnings Release
Open in ViewerOpens in native device viewer
Amsterdam +31.20.550.4488 Brussels +32.2.509.1392 New York +1.212.656.5700 Please follow us at: Lisbon +351.217.900.029 London +44.20.7379.2789 Exchanges Blog New York +1.212.656.2411 Paris +33.1.49.27.11.33 Facebook
-- Second Quarter GAAP Diluted EPS of \$0.71 vs. \$0.49 in Prior Year --
-- Non-GAAP Diluted EPS of \$0.63, Up 24% Excluding Merger Expenses, Exit Costs and Discrete Items --
-- Global Leader in IPOs Year-to-Date; Share of Tech IPOs at 64% --
-- Cumulative \$161 Million in Project 14 Cost Savings Achieved; 64% of \$250 Million Project 14 Goal --
-- Significant Progress Made on the Proposed ICE Transaction --
-- Clearing for London-Based Derivatives Market Transitioned to ICE Clear Europe --
1All comparisons versus 2Q12 unless otherwise stated. Excludes merger expenses, exit costs, charge for fair value adjustment to RSU awards, disposal activities and discrete tax items.
2 A full reconciliation of our non-GAAP results to our GAAP results is included in the attached tables. See also our statement on non-GAAP financial measures at the end of this earnings release.
NEW YORK – July 30, 2013 – NYSE Euronext (NYX) today reported net income of \$173 million, or \$0.71 per diluted share on a GAAP basis, for the second quarter of 2013, compared to net income of \$125 million, or \$0.49 per diluted share, for the second quarter of 2012. Results for the second quarter of 2013 and 2012 included \$22 million and \$12 million, respectively, of pre-tax merger expenses and exit costs. Second quarter 2013 results also included a \$10 million gain recorded for non-operating items due to the sale of a portion of our equity stake in LCH.Clearnet and a reserve release related to a favorable settlement with certain European tax authorities which significantly reduced our GAAP effective tax rate. Excluding merger expenses, exit costs, disposal activity and discrete tax items, net income in the second quarter of 2013 was \$153 million, or \$0.63 per diluted share on a non-GAAP basis, compared to \$128 million, or \$0.51 per diluted share, in the second quarter of 2012.
"We continue to execute solidly against our business plan as we build momentum toward closing the ICE deal," said Duncan L. Niederauer, CEO, NYSE Euronext. "We successfully transitioned our Londonbased derivatives market to ICE Clear Europe and were ranked number one year-to-date in capital raising with our market share in technology listings increasing to 64%. The strength of our listings franchise continues to build and we are very pleased to welcome Oracle to the NYSE today to close the market. We were also appointed the administrator for LIBOR. Turning to our transaction with ICE, we are gratified that our shareholders and the European Commission have approved the transaction and we are working with the College of Regulators in Europe and other regulators to obtain all the appropriate remaining approvals."
| The table below summarizes the financial results1 | for the second | quarter of 2013: | |||||
|---|---|---|---|---|---|---|---|
| % Δ 2Q13 |
Year-to-Date | % Δ YTD '13 |
|||||
| (\$ in millions, except EPS) | 2Q13 | 1Q13 | 2Q12 | vs. 2Q12 | 2013 | 2012 | vs. YTD '12 |
| Total Revenues2 | \$995 | \$963 | \$986 | 1 % |
\$1,958 | \$1,938 | 1 % |
| Total Revenues, Less Transaction-Based Expenses 3 | 611 | 600 | 602 | 1 % |
1,211 | 1,203 | 1 % |
| Other Operating Expenses 4 | 382 | 380 | 396 | (4%) | 762 | 801 | (5%) |
| Operating Income 4 | \$229 | \$220 | \$206 | 11% | \$449 | \$402 | 12% |
| Net Income5 | \$153 | \$139 | \$128 | 20% | \$292 | \$249 | 17% |
| Diluted Earnings Per Share 5 | \$0.63 | \$0.57 | \$0.51 | 24% | \$1.19 | \$0.97 | 22% |
| Operating Margin | 37% | 37% | 34% | 3 ppts | 37% | 33% | 4 ppts |
| Adjusted EBITDA Margin | 48% | 47% | 45% | 3 ppts | 47% | 44% | 3 ppts |
1A full reconciliation of our non-GAAP results to our GAAP results is included in the attached tables. See also our statement on non-GAAP financial measures at the end of this earnings release.
2 Includes activity assessment fees.
3 Transaction-based expenses include Section 31 fees, liquidity payments and routing & clearing fees.
4 Excludes merger expenses, exit costs and charge for fair value adjustment to RSU awards.
5 Excludes merger expenses, exit costs, charge for fair value adjustment to RSU awards, disposal activities and discrete tax items.
"Our results for the second quarter reflect the actions we have taken to grow our businesses and diligently manage our cost base and capital," commented Michael S. Geltzeiler, Group Executive Vice President and CFO, NYSE Euronext. "On a constant dollar/portfolio basis, costs are down 7% year-to-date and we have already achieved 64% of the \$250 million Project 14 target for costs reductions, well ahead of the 60% promised by year-end 2013. Further cost savings will come online in the second-half of 2013 with the completed transition to ICE Clear Europe which will position us to easily surpass our full-year cost guidance target of \$1,525 million. Turning to capital, capital expenditures year-to-date are running 30% below the prior year period and we are on track to come in well below our 2013 guidance of \$150 million. We retired the \$414 million remaining on our \$750 million June 2013 notes, which combined with strong EBITDA generation, reduced our debt-to-EBITDA ratio to 1.9 times. The debt retirement will reduce interest expense in the second half of the year. All of these actions have helped bolster our business model and set the table for our proposed combination with ICE."
Total revenues, less transaction-based expenses, which include Section 31 fees, liquidity payments and routing and clearing fees (net revenue), were \$611 million in the second quarter of 2013, up 1% from the second quarter of 2012 and included a \$2 million negative impact from foreign currency fluctuations.
Other operating expenses, excluding merger expenses and exit costs, were \$382 million in the second quarter of 2013, down \$14 million, or 4% compared to the second quarter of 2012. Excluding the impact of new business initiatives and a \$2 million positive impact attributable to foreign currency fluctuations, other operating expenses were down \$20 million, or 5%, compared to the second quarter of 2012.
Cumulative Project 14 savings through the second quarter of 2013 were \$161 million, which represented 64% of the total \$250 million expected to be saved by the end of 2014.
Operating income, excluding merger expenses and exit costs, was \$229 million, up \$23 million, or 11% compared to the second quarter of 2012.
Adjusted EBITDA, excluding merger expenses and exit costs, was \$291 million, up \$19 million, or 7% compared to the second quarter of 2012. Adjusted EBITDA margin was 48% in the second quarter of 2013, compared to 45% in the second quarter of 2012.
Loss from associates is primarily related to New York Portfolio Clearing. Net (income) loss attributable to non-controlling interest consists primarily of net income attributable to NYSE Amex Options, which was partially offset by the net loss attributable to NYSE Liffe U.S.
The effective tax rate for the second quarter of 2013, excluding merger expenses, exit costs and discrete tax items, was 24% compared to approximately 25% for the second quarter of 2012.
The weighted average diluted shares outstanding in the second quarter of 2013 was 244 million, down from 253 million in second quarter of 2012.
At June 30, 2013, total debt was \$2.2 billion. The decline in total debt was driven by the retirement of the remaining \$414 million of our \$750 million 4.80% notes that were due in June 2013. Cash, cash equivalents and short term financial investments (including \$154 million related to Section 31 fees collected from market participants and due to the SEC) were \$0.3 billion and net debt was \$1.9 billion.
The ratio of debt-to-EBITDA at the end of the second quarter of 2013 was 1.9x, down from 2.5x at the end of 2012. The decline was driven by the retirement of the remaining \$414 million of our \$750 million 4.80% notes due in June 2013 and stronger adjusted EBITDA generation in the first half of 2013, compared to the second half of 2012.
Total capital expenditures were \$32 million in the second quarter of 2013, down from \$41 million in the second quarter of 2012.
The board of directors declared a cash dividend of \$0.30 per share for the third quarter of 2013 with a record date of September 16, 2013 and a payment date of September 30, 2013. The anticipated ex-date will be September 12, 2013. However, the third quarter 2013 dividend is payable on the payment date only if the ICE transaction has not been completed as of the record date.
| Below is a summary of business segment results: | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Derivatives | Cash Trading & Listings | Info. Svcs. & Tech. Solutions | |||||||
| (\$ in millions) | Net | Operating Adjusted | Net | Operating | Adjusted | Operating | Adjusted | ||
| Revenue1 | Income2 | EBITDA2 Revenue1 | Income2 | EBITDA2 | Revenue | Income2 | EBITDA2 | ||
| 2Q13 | \$195 | \$103 | \$111 | \$302 | \$128 | \$169 | \$114 | \$25 | \$38 |
| 1Q13 | \$201 | \$104 | \$113 | \$287 | \$114 | \$154 | \$112 | \$25 | \$38 |
| 2Q12 | \$182 | \$85 | \$95 | \$300 | \$127 | \$170 | \$119 | \$27 | \$40 |
| YTD 2013 | \$396 | \$207 | \$224 | \$589 | \$242 | \$323 | \$226 | \$50 | \$76 |
| YTD 2012 | \$358 | \$164 | \$184 | \$604 | \$246 | \$331 | \$240 | \$55 | \$82 |
1Net revenue defined as total revenues less transaction-based expenses including Section 31 fees, liquidity payments and routing & clearing fees. 2 Excludes merger expenses and exit costs.
Derivatives net revenue of \$195 million in the second quarter of 2013 increased \$13 million, or 7% compared to the second quarter of 2012 and included a \$3 million negative impact from foreign currency fluctuations. The \$16 million increase in derivatives net revenue, on a constant currency basis, compared to the second quarter of 2012, was driven by higher average daily trading volumes in European interest rate derivatives products. Highlights for the second quarter of 2013 included:
Global derivatives ADV, excluding Bclear, in the second quarter of 2013 of 7.7 million contracts increased 12% compared to the second quarter of 2012, but decreased 2% compared to first quarter of 2013 levels.
Cash Trading and Listings net revenue of \$302 million in the second quarter of 2013 increased \$2 million, or 1% compared to the second quarter of 2012 and included a \$1 million positive impact from foreign currency fluctuations. Highlights for the second quarter of 2013 included:
and \$105 billion in total global proceeds on 256 follow-ons. In the U.S., NYSE Euronext led the market with 47 IPOs raising \$15 billion in proceeds (excluding closed-end funds) and has steadily captured share in technology-based IPOs. NYSE Euronext has listed 64% of the technology IPOs in the U.S., through the second quarter of 2013, including Tableau Software, Gigamon, Light in the Box and ChannelAdvisor.
Information Services and Technology Solutions revenue was \$114 million in the second quarter of 2013, a decrease of \$5 million, or 4% compared to the second quarter of 2012 but increased \$2 million or 2% from the first quarter of 2013. The decrease in revenue was primarily due to the decline in the number of large, one-time managed services sales which was partially offset by higher market data revenue from previously announced market data initiatives. Highlights for the second quarter of 2013 included:
Exchange Commission (CVM) in Brazil to launch a new stock exchange in the Brazilian market. The formal request to approve ATS Brasil for trading in 2014 also includes provisions for the admission of new liquidity providers to the joint venture.
The accompanying tables include information integral to assessing the Company's financial performance.
NYSE Euronext Earnings News Release with Tables and Operating Data
A presentation and live audio webcast of the second quarter 2013 earnings conference call will be available on the Investor Relations section of NYSE Euronext's website, http://www.nyseeuronext.com/ir. Those wishing to listen to the live conference via telephone should dialin at least ten minutes before the call begins. An audio replay of the conference call will be available approximately one hour after the call on the Investor Relations section of NYSE Euronext's website, http://www.nyseeuronext.com/ir or by dial-in beginning approximately two hours following the conclusion of the live call.
United States: 877.280.4962 International: 857.244.7319 Passcode: 32047272
Replay Dial-in Information: United States: 888.286.8010 International: 617.801.6888 Passcode: 32457864
To supplement NYSE Euronext's consolidated financial statements prepared in accordance with GAAP and to better reflect period-over-period comparisons, NYSE Euronext uses non-GAAP financial measures of performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure, calculated and presented in accordance with GAAP. Non-GAAP financial measures do not replace and are not superior to the presentation of GAAP financial results, but are provided to (i) present the effects of certain merger expenses, exit costs, disposal activities, the BlueNext tax settlement, debt refinancing costs, charge for fair value adjustment to RSU awards and discrete tax items, and (ii) improve overall understanding of NYSE Euronext's current financial performance and its prospects for the future. Specifically, NYSE Euronext believes the non-GAAP financial results provide useful information to both management and investors regarding certain additional financial and business trends relating to financial condition and operating results. In addition, management uses these measures for reviewing financial results and evaluating financial performance. The non-GAAP adjustments for all periods presented are based upon information and assumptions available as of the date of this release.
NYSE Euronext (NYX) is a leading global operator of financial markets and provider of innovative trading technologies. The company's exchanges in Europe and the United States trade equities, futures, options, fixed-income and exchange-traded products. With approximately 8,000 listed issues (excluding European Structured Products), NYSE Euronext's equities markets - the New York Stock Exchange, NYSE Euronext, NYSE MKT, NYSE Alternext and NYSE Arca - represent one-third of the world's
equities trading, the most liquidity of any global exchange group. NYSE Euronext also operates NYSE Liffe, one of the leading European derivatives businesses and the world's second-largest derivatives business by value of trading. The company offers comprehensive commercial technology, connectivity and market data products and services through NYSE Technologies. NYSE Euronext is in the S&P 500 index. For more information, please visit: http://www.nyx.com.
This written communication contains "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "may," "hope," "will," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential," "continue," "could," "future" or the negative of those terms or other words of similar meaning. You should carefully read forward-looking statements, including statements that contain these words, because they discuss our future expectations or state other "forward-looking" information. Forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. ICE Group, ICE and NYSE Euronext caution readers that any forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement.
Forward-looking statements include, but are not limited to, statements about the benefits of the proposed merger involving ICE Group, ICE and NYSE Euronext, including future financial results, ICE's and NYSE Euronext's plans, objectives, expectations and intentions, the expected timing of completion of the transaction and other statements that are not historical facts. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in ICE's and NYSE Euronext's filings with the U.S. Securities and Exchange Commission (the "SEC"). These risks and uncertainties include, without limitation, the following: the inability to close the merger in a timely manner; the failure to satisfy other conditions to completion of the merger, including receipt of required regulatory and other approvals; the failure of the proposed transaction to close for any other reason; the possibility that any of the anticipated benefits of the proposed transaction will not be realized; the risk that integration of NYSE Euronext's operations with those of ICE will be materially delayed or will be more costly or difficult than expected; the challenges of integrating and retaining key employees; the effect of the announcement of the transaction on ICE's, NYSE Euronext's or the combined company's respective business relationships, operating results and business generally; the possibility that the anticipated synergies and cost savings of the merger will not be realized, or will not be realized within the expected time period; the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; general competitive, economic, political and market conditions and fluctuations; actions taken or conditions imposed by the United States and foreign governments or regulatory authorities; and adverse outcomes of pending or threatened litigation or government investigations. In addition, you should carefully consider the risks and uncertainties and other factors that may affect future results of the combined company, as are described in the section entitled "Risk Factors" in the joint proxy statement/prospectus filed by ICE Group with the SEC, and as described in ICE's and NYSE Euronext's respective filings with the SEC that are available on the SEC's web site located at www.sec.gov, including the sections entitled "Risk Factors" in ICE's Form 10-K for the fiscal year ended December 31, 2012, as filed with the SEC on February 6, 2013, and "Risk Factors" in NYSE Euronext's Form 10-K for the fiscal year ended December 31, 2012, as filed with the SEC on February 26, 2013. You should not place undue reliance on forward-looking statements, which speak only as of the date of this written communication. Except for any obligations to disclose material information under the Federal securities laws, ICE Group, ICE and NYSE Euronext undertake no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date of this written communication.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed transaction, ICE Group has filed with the SEC a registration statement on Form S−4, which the SEC has declared effective and which contains a joint proxy statement/prospectus with respect to the proposed acquisition of NYSE Euronext by ICE Group. The final joint proxy statement/prospectus has been delivered to the stockholders of ICE and NYSE Euronext. INVESTORS AND SECURITY HOLDERS OF BOTH ICE AND NYSE EURONEXT ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION CAREFULLY AND IN ITS ENTIRETY, INCLUDING ANY DOCUMENTS PREVIOUSLY FILED WITH THE SEC AND INCORPORATED BY REFERENCE INTO THE JOINT PROXY STATEMENT/PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE IT CONTAINS IMPORTANT INFORMATION REGARDING ICE, NYSE EURONEXT AND THE PROPOSED TRANSACTION. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus, as well as other filings containing information about ICE and NYSE Euronext, without charge, at the SEC's website at http://www.sec.gov. Investors may also obtain these documents, without charge, from ICE's website at http://www.theice.com and from NYSE Euronext's website at http://www.nyx.com.
(in millions, except per share data)
| Three months ended | Six months ended | ||||||
|---|---|---|---|---|---|---|---|
| June 30, 2013 | Mar. 31, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | |||
| Revenues | |||||||
| Transaction and clearing fees | \$ 657 |
\$ 634 |
\$ 649 |
\$ 1,291 |
\$ | 1,258 | |
| Market data | 91 | 83 | 87 | 174 | 178 | ||
| Listing | 111 | 110 | 112 | 221 | 222 | ||
| Technology services | 77 | 80 | 87 | 157 | 173 | ||
| Other revenues | 59 | 56 | 51 | 115 | 107 | ||
| Total revenues | 995 | 963 | 986 | 1,958 | 1,938 | ||
| Transaction-based expenses: | |||||||
| Section 31 fees | 78 | 75 | 86 | 153 | 152 | ||
| Liquidity payments, routing and clearing | 306 | 288 | 298 | 594 | 583 | ||
| Total revenues, less transaction-based expenses | 611 | 600 | 602 | 1,211 | 1,203 | ||
| Other operating expenses | |||||||
| Compensation | 154 | 161 | 152 | 315 | 312 | ||
| Depreciation and amortization | 62 | 62 | 66 | 124 | 132 | ||
| Systems and communications | 42 | 43 | 44 | 85 | 89 | ||
| Professional services | 67 | 69 | 69 | 136 | 142 | ||
| Selling, general and administrative | 57 | 55 | 65 | 112 | 126 | ||
| Merger expenses and exit costs | 22 | 8 | 12 | 30 | 43 | ||
| Total other operating expenses | 404 | 398 | 408 | 802 | 844 | ||
| Operating income | 207 | 202 | 194 | 409 | 359 | ||
| Net interest and investment income (loss) | (25) | (27) | (28) | (52) | (56) | ||
| Loss from associates | (3) | (2) | (2) | (5) | (3) | ||
| Net gain (loss) on disposal activities | 10 | - | (2) | 10 | (2) | ||
| Other income (loss) | 6 | (1) | 3 | 5 | 3 | ||
| Income before income taxes | 195 | 172 | 165 | 367 | 301 | ||
| Income tax (provision) benefit | (17) | (41) | (34) | (58) | (79) | ||
| Net income | 178 | 131 | 131 | 309 | 222 | ||
| Net (income) loss attributable to noncontrolling interest | (5) | (5) | (6) | (10) | (10) | ||
| Net income attributable to NYSE Euronext | \$ 173 |
\$ 126 |
\$ 125 |
\$ 299 |
\$ | 212 | |
| Basic earnings per share attributable to NYSE Euronext | \$ 0.71 |
\$ 0.52 |
\$ 0.50 |
\$ 1.23 |
\$ | 0.83 | |
| Diluted earnings per share attributable to NYSE Euronext | \$ 0.71 |
\$ 0.52 |
\$ 0.49 |
\$ 1.22 |
\$ | 0.83 | |
| Basic weighted average shares outstanding | 243 | 243 | 252 | 243 | 255 | ||
| Diluted weighted average shares outstanding | 244 | 244 | 253 | 244 | 256 |
We use non-GAAP financial measures of operating performance. Non-GAAP measures do not replace and are not superior to the presentation of our GAAP financial results but are provided to improve overall understanding of our current financial performance and our prospects for the future.
| Three months ended | Six months ended | |||||||
|---|---|---|---|---|---|---|---|---|
| Non-GAAP Reconciliation | June 30, 2013 | Mar. 31, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | |||
| Income (loss) before income taxes - GAAP | \$ 195 |
\$ 172 |
\$ | 165 | \$ | 367 | \$ | 301 |
| Excluding: | ||||||||
| Merger expenses and exit costs | 22 | 8 | 12 | 30 | 43 | |||
| Net (gain) loss on disposal activities | (10) | - | 2 | (10) | 2 | |||
| Fair value adjustment to RSU awards | - | 10 | - | 10 | - | |||
| Income before income taxes - as adjusted | 207 | 190 | 179 | 397 | 346 | |||
| Income tax provision | (49) | (46) | (45) | (95) | (87) | |||
| Net income - as adjusted | 158 | 144 | 134 | 302 | 259 | |||
| Net (income) loss attributable to noncontrolling interest | (5) | (5) | (6) | (10) | (10) | |||
| Net income attributable to NYSE Euronext - as adjusted | \$ 153 |
\$ 139 |
\$ | 128 | \$ | 292 | \$ | 249 |
| Diluted earnings per share attributable to NYSE Euronext | \$ 0.63 |
\$ 0.57 |
\$ | 0.51 | \$ | 1.19 | \$ | 0.97 |
| Three months ended | (in millions) | Segment Results (unaudited) | Three months ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Services and June 30, 2013 Information |
Corporate | Cash | June 30, 2012 Services and Information |
|||||||||||||
| Derivatives | Cash Trading and Listings |
Technology Solutions |
Eliminations and |
Consolidated | Derivatives | Trading and Listings |
Technology Solutions |
Corporate and Eliminations |
Consolidated | |||||||
| Transaction and clearing fees Revenues |
262 \$ |
\$ | 395 | \$ | \$ - |
- | \$ | 657 | 219 \$ |
\$ | 430 | - \$ |
\$ | - | 649 \$ |
|
| Market data Listing |
10 - |
44 111 |
37 - |
- - |
91 111 |
11 - |
44 112 |
32 - |
- - |
87 112 |
||||||
| Technology services | 13 - |
46 - |
77 | - | 59 77 |
10 - |
40 - |
87 | 1 - |
87 51 |
||||||
| Total revenues Other revenues |
285 | 596 | 114 - |
- - |
995 | 240 | 626 | 119 - |
1 | 986 | ||||||
| Transaction-based expenses: Section 31 fees |
- | 78 | - | - | 78 | - | 86 | - | - | 86 | ||||||
| Liquidity payments, routing and clearing | 90 195 |
302 216 |
114 - |
- - |
306 611 |
58 182 |
240 300 |
119 - |
1 - |
298 602 |
||||||
| [a] Total revenues, less transaction-based expenses Depreciation and amortization |
8 | 41 | 13 | - | 62 | 10 | 43 | 13 | - | 66 | ||||||
| [b] Merger expenses and exit costs (M&E) Other operating expenses |
3 84 |
3 133 |
1 76 |
15 27 |
22 320 |
7 87 |
7 130 |
79 | 4 | (6) 34 |
12 330 |
|||||
| [c] Operating income - GAAP |
100 \$ |
\$ | 125 | \$ | \$ 24 |
(42) | \$ | 207 | 78 \$ |
\$ | 120 | 23 \$ |
\$ | (27) | 194 \$ |
|
| [c] + [b] + [a] [c] + [b] Operating income excluding M&E |
103 111 \$ \$ |
\$ \$ |
128 169 |
\$ \$ |
\$ \$ 25 38 |
(27) (27) |
\$ \$ |
229 291 |
85 95 \$ \$ |
\$ \$ |
127 170 |
27 40 \$ \$ |
(33) (33) |
206 272 \$ \$ |
||
| Operating margin excluding M&E Adjusted EBITDA |
53% | 42% | 22% | N/M | 37% | 47% | 42% | 23% | N/M | 34% | ||||||
| Adjusted EBITDA margin | 57% | 56% | 33% | N/M | 48% | 52% | 57% | 34% | N/M | 45% | ||||||
| Six months ended | Six months ended | |||||||||||||||
| Services and June 30, 2013 Information |
Corporate | Cash | June 30, 2012 Services and Information |
|||||||||||||
| Derivatives | Cash Trading and Listings |
Technology Solutions |
Eliminations and |
Derivatives | Trading and Listings |
Technology Solutions |
Corporate and Eliminations |
|||||||||
| Revenues | Consolidated | Consolidated | ||||||||||||||
| Transaction and clearing fees | 533 \$ |
\$ | 758 | \$ | \$ - |
- | \$ | 1,291 | 425 \$ |
\$ | 833 | - \$ |
\$ | - | 1,258 \$ |
|
| Market data Listing |
20 - |
85 221 |
69 - |
- - |
174 221 |
22 - |
89 222 |
67 - |
- - |
178 222 |
||||||
| Technology services | - | - | 157 | - | 157 | - | - | 173 | - | 173 | ||||||
| Total revenues Other revenues |
25 578 |
90 1,154 |
226 - |
- - |
1,958 115 |
22 469 |
84 1,228 |
240 - |
1 1 |
107 1,938 |
||||||
| Transaction-based expenses: | - | 153 | - | - | 153 | - | 152 | - | - | 152 | ||||||
| Liquidity payments, routing and clearing Section 31 fees |
182 | 412 | - | - | 594 | 111 | 472 | - | - | 583 | ||||||
| Total revenues, less transaction-based expenses | 396 17 |
589 81 |
226 26 |
- - |
124 1,211 |
358 20 |
604 85 |
240 27 |
1 - |
132 1,203 |
||||||
| [a] [b] Merger expenses and exit costs (M&E) Depreciation and amortization |
5 | 7 | 4 | 14 | 30 | 8 | 13 | 10 | 12 | 43 | ||||||
| [c] Fair value adjustment to RSU awards Other operating expenses |
172 - |
266 - |
150 - |
10 50 |
10 638 |
174 - |
273 - |
158 - |
64 - |
669 - |
||||||
| [d] Operating income - GAAP |
202 \$ |
\$ | 235 | \$ | \$ 46 |
(74) | \$ | 409 | 156 \$ |
\$ | 233 | 45 \$ |
\$ | (75) | 359 \$ |
|
| [d] + [c] + [b] + [a] [d] + [c] + [b] Operating income excluding M&E and fair value adjustment to RSU awards Adjusted EBITDA |
207 224 \$ \$ |
\$ \$ |
242 323 |
\$ \$ |
\$ \$ 50 76 |
(50) (50) |
\$ \$ |
449 573 |
164 184 \$ \$ |
\$ \$ |
246 331 |
55 82 \$ \$ |
\$ \$ |
(63) (63) |
402 534 \$ \$ |
|
| Operating margin excluding M&E and fair value adjustment to RSU awards |
52% | 41% | 22% | N/M | 37% | 46% | 41% | 23% | N/M | 33% | ||||||
| Adjusted EBITDA margin | 57% | 55% | 34% | N/M | 47% | 51% | 55% | 34% | N/M | 44% | ||||||
| We use non-GAAP financial measures of operating performance. Non-GAAP measures do not replace and are not superior to the presentation of |
NYSE Euronext
N/M = Not meaningful
our GAAP financial results but are provided to improve overall understanding of our current financial performance and our prospects for the future.
| Expense Base Development on a Constant \$ / Constant Portfolio Basis | ||
|---|---|---|
| Fixed operating expenses for the three months ended June 30, 2013 - GAAP | \$ 404 |
|
| Less: Merger expenses and exit costs |
(22) \$ 382 |
|
| Excluding the impact of: | ||
| Currency translation New business initiatives |
2 (8) |
|
| Fixed operating expenses for the three months ended June 30, 2013 - as adjusted | \$ 376 |
[a] |
| Fixed operating expenses for the three months ended June 30, 2012 - GAAP Less: |
\$ 408 |
|
| Merger expenses and exit costs | (12) | |
| Fixed operating expenses for the three months ended June 30, 2012 - as adjusted | \$ 396 |
[b] |
| Variance (\$) Variance (%) |
\$ (20) -5% |
[a] - [b] = [c] [c] / [b] |
| Fixed operating expenses for the six months ended June 30, 2013 - GAAP Less: |
\$ 802 |
|
| Fair value adjustment to RSU awards Merger expenses and exit costs |
\$ (10) (30) |
|
| \$ 762 |
||
| Excluding the impact of: Currency translation New business initiatives |
3 (17) |
|
| Fixed operating expenses for the six months ended June 30, 2013 - as adjusted | \$ 748 |
[a] |
| Fixed operating expenses for the six months ended June 30, 2012 - GAAP Less: |
\$ 844 |
|
| Merger expenses and exit costs | (43) | |
| Fixed operating expenses for the six months ended June 30, 2012 - as adjusted Variance (\$) |
\$ 801 \$ (53) |
[b] [a] - [b] = [c] |
| Variance (%) | -7% | [c] / [b] |
| Expense Base Development Versus Project 14 Cost Savings Plan | ||
| Fixed operating expenses for the six months ended June 30, 2013 - GAAP | \$ 802 |
|
| Fixed operating expenses for the six months ended December 31, 2012 - GAAP Fixed operating expenses for the trailing twelve months ended June 30, 2013 - GAAP Less: |
871 \$ 1,673 |
|
| Fair value adjustment to RSU awards Merger expenses and exit costs |
\$ (13) (121) |
|
| \$ 1,539 |
||
| Excluding the impact of: New business initiatives Currency translation(1) |
(52) | |
| Fixed operating expenses for the the trailing twelve months ended June 30, 2013 - as adjusted | 18 \$ 1,505 |
[a] |
| Fixed operating expenses for the year ended December 31, 2011 - base year | \$ 1,666 |
[b] |
| Project 14 Cost Savings | \$ 161 |
[b]-[a] = [c] |
| Cumulative Project 14 Cost Savings to date as % of total \$250 million plan | 64% | [c] / \$250 |
(1) We measure the Project 14 cost savings utilizing constant currency rates of \$1.35 for the Euro and \$1.60 for the Pound Sterling.
We use non-GAAP financial measures of operating performance. Non-GAAP measures do not replace and are not superior to the presentation of our GAAP financial results but are provided to improve overall understanding of our current financial performance and our prospects for the future.
| June 30, 2013 |
Dec. 31, 2012 |
|
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash, cash equivalents, and short term financial investments | \$ 322 |
\$ 380 |
| Accounts receivable, net | 442 | 405 |
| Deferred income taxes | 65 | 67 |
| Other current assets | 119 | 156 |
| Total current assets | 948 | 1,008 |
| Property and equipment, net | 887 | 948 |
| Goodwill | 4,027 | 4,163 |
| Other intangible assets, net | 5,573 | 5,783 |
| Deferred income taxes | 70 | 74 |
| Other assets | 541 | 580 |
| Total assets | \$ 12,046 |
\$ 12,556 |
| Liabilities and equity | ||
| Accounts payable and accrued expenses | \$ 727 |
\$ 824 |
| Deferred revenue | 314 | 138 |
| Short term debt | 179 | 454 |
| Total current liabilities | 1,220 | 1,416 |
| Long term debt | 2,039 | 2,055 |
| Deferred income taxes | 1,401 | 1,435 |
| Accrued employee benefits | 562 | 602 |
| Deferred revenue | 375 | 378 |
| Other liabilities | 22 | 27 |
| Total liabilities | 5,619 | 5,913 |
| Redeemable noncontrolling interest | 286 | 274 |
| Equity | 6,141 | 6,369 |
| Total liabilities and equity | \$ 12,046 |
\$ 12,556 |
| Average Daily Volume | Total Volume | Total Volume | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| % ∆ 2Q13 | % ∆ 2Q13 | % ∆ 2Q13 | % ∆ 2Q13 | ||||||||||
| (Unaudited) | 2Q13 | 1Q13 | vs. 1Q13 2Q12 | vs. 2Q12 | 2Q13 | 1Q13 | vs. 1Q13 | 2Q12 | vs. 2Q12 | YTD 2013 | YTD 2012 | % ∆ | |
| Number of Trading Days - European Cash Number of Trading Days - European Derivatives Number of Trading Days - U.S. Markets |
63 64 64 |
62 62 60 |
62 63 63 |
63 64 64 |
62 65 60 |
62 63 63 |
125 126 124 |
127 128 125 |
|||||
| European Derivatives Products (contracts in thousands) | 4,048 4,515 | -10.3% 4,654 | -13.0% | 259,087 279,936 | -7.4% 293,182 | -11.6% | 539,024 | 509,777 | 5.7% | ||||
| of which Bclear Avg. Net Revenue Per Contract (ex. Bclear) Avg. Net Revenue Per Contract (ex. Bclear) - Currency Neutral |
749 | 883 \$ 0.610 \$ 0.622 \$ 0.610 \$ 0.618 |
-15.2% 1,743 -1.9% \$ 0.674 -1.3% \$ 0.656 |
-57.1% -9.5% -7.0% |
47,918 \$ 0.610 \$ 0.610 |
54,749 \$ 0.622 \$ 0.618 |
-12.5% 109,827 -1.9% \$ 0.674 -1.3% \$ 0.656 |
-56.4% -9.5% -7.0% |
102,666 | 153,556 | -33.1% | ||
| Total Interest Rate Products1 | 2,463 2,749 | -10.4% 1,953 | 26.1% | 157,654 170,433 | -7.5% 123,059 | 28.1% | 328,087 | 238,387 | 37.6% | ||||
| Short Term Interest Rate Products Medium and Long Term Interest Rate Products |
2,276 187 |
2,560 189 |
-1.1% | -11.1% 1,801 152 |
26.4% 22.9% |
145,688 11,965 |
158,710 11,723 |
2.1% | -8.2% 113,479 9,580 |
28.4% 24.9% |
304,398 23,689 |
218,917 19,469 |
39.0% 21.7% |
| Total Equity Products2 | 1,496 1,674 | -10.7% 2,622 | -43.0% | 95,732 103,802 | -7.8% 165,188 | -42.0% | 199,534 | 261,162 | -23.6% | ||||
| Individual Equity Products | 966 | 1,132 | -14.7% 2,065 | -53.2% | 61,801 | 70,179 | -11.9% 130,086 | -52.5% | 131,980 | 196,328 | -32.8% | ||
| Futures Options Equity Index Products |
606 359 530 |
660 471 542 |
-23.8% -2.2% |
-8.2% 1,603 462 557 |
-62.2% -22.3% -4.8% |
38,806 22,995 33,931 |
40,948 29,231 33,623 |
-21.3% 0.9% |
-5.2% 100,962 29,124 35,102 |
-61.6% -21.0% -3.3% |
79,755 52,226 67,554 |
134,137 62,191 64,834 |
-40.5% -16.0% 4.2% |
| of which Bclear Individual Equity Products |
748 650 |
881 758 |
-15.1% 1,743 -14.2% 1,667 |
-57.1% -61.0% |
47,918 41,625 |
54,749 47,008 |
-12.5% 109,827 -11.5% 105,025 |
-56.4% -60.4% |
102,666 88,633 |
153,556 144,023 |
-33.1% -38.5% |
||
| Futures Options |
579 72 |
649 109 |
-34.0% | -10.9% 1,561 107 |
-62.9% -32.7% |
37,032 4,593 |
40,267 6,742 |
-8.0% -31.9% |
98,312 6,713 |
-62.3% -31.6% |
77,299 11,334 |
130,972 13,051 |
-41.0% -13.2% |
| Equity Index Products | 98 | 123 | -20.5% | 76 | 28.4% | 6,262 | 7,630 | -17.9% | 4,801 | 30.4% | 13,892 | 9,533 | 45.7% |
| Commodity Products | 89 | 92 | -3.1% | 78 | 13.7% | 5,701 | 5,701 | 0.0% | 4,935 | 15.5% | 11,403 | 10,228 | 11.5% |
| U.S. Derivatives Products (contracts in thousands) | |||||||||||||
| Avg. Net Revenue Per Contract (ex. Liffe U.S. volumes) | \$ 0.156 \$ 0.150 | 4.0% \$ 0.150 | 4.0% | \$ 0.156 | \$ 0.150 | 4.0% \$ 0.150 | 4.0% | ||||||
| Equity Options Contracts3 Total Consolidated Options Contracts Share of Total Consolidated Options Contracts |
4,376 15,879 |
4,231 14,981 27.6% 28.2% |
3.4% 3,915 6.0% 14,911 26.3% |
11.8% 6.5% |
280,070 1,016,261 27.6% |
253,843 898,885 28.2% |
10.3% 246,634 13.1% 939,423 26.3% |
13.6% 8.2% |
533,914 1,915,146 27.9% |
502,556 1,923,930 26.1% |
6.2% 3.9% 1.8% |
||
| NYSE Liffe U.S. | |||||||||||||
| Futures and Futures Options Volume* | 63.3 | 58.7 | 7.7% | 73.4 | -13.8% | 4,111.7 | 3,641.1 | 12.9% | 4,769.3 | -13.8% | 7,752.8 | 10,930.6 | -29.1% |
| European Cash Products (trades in thousands) | 1,470 1,378 | 6.7% 1,709 | -14.0% | 92,600 | 85,419 | 8.4% 105,934 | -12.6% | 178,020 | 208,861 | -14.8% | |||
| Avg. Net Revenue Per Transaction Avg. Net Revenue Per Transaction - Currency Neutral |
\$ 0.562 \$ 0.620 \$ 0.562 \$ 0.616 |
-9.4% \$ 0.519 -8.8% \$ 0.530 |
8.3% 6.0% |
\$ 0.562 \$ 0.562 |
\$ 0.620 \$ 0.616 |
-9.4% \$ 0.519 -8.8% \$ 0.530 |
8.3% 6.0% |
||||||
| Equities Exchange-Traded Funds Structured Products Bonds |
15 32 5 |
1,418 1,326 14 33 6 |
8.1% -2.0% -14.9% |
7.0% 1,656 14 33 5 |
-14.4% 3.1% -3.9% -5.2% |
89,352 932 2,011 305 |
82,199 848 2,019 353 |
9.9% -0.4% -13.5% |
8.7% 102,668 890 2,059 317 |
-13.0% 4.8% -2.3% -3.7% |
171,551 1,780 4,030 658 |
202,107 1,831 4,294 628 |
-15.1% -2.8% -6.2% 4.9% |
| U.S. Cash Products (shares in millions) Avg. Net Revenue Per 100 Shares Handled |
1,626 1,545 \$ 0.0473 \$ 0.0431 |
5.2% 1,823 9.7% \$ 0.0428 |
-10.8% 10.5% |
104,043 | 92,721 \$ 0.0473 \$ 0.0431 |
12.2% 114,863 9.7% \$ 0.0428 |
-9.4% 10.5% |
196,764 | 225,100 | -12.6% | |||
| NYSE Listed (Tape A) Issues 4 | |||||||||||||
| Handled Volume 5 Matched Volume 6 Total NYSE Listed Consolidated Volume |
1,154 1,120 1,113 1,077 3,608 3,585 |
3.0% 1,304 3.4% 1,239 0.6% 3,885 |
-11.5% -10.2% -7.1% |
73,870 71,262 230,911 215,111 |
67,207 64,603 |
9.9% 10.3% |
82,157 78,081 7.3% 244,756 |
-10.1% -8.7% -5.7% |
141,077 135,865 446,022 |
161,180 152,613 488,556 |
-12.5% -11.0% -8.7% |
||
| Share of Total Consolidated Volume Handled Volume 5 |
32.0% 31.2% | 33.6% | 32.0% | 31.2% | 33.6% | 31.6% | 33.0% | ||||||
| Matched Volume 6 | 30.9% 30.0% | 31.9% | 30.9% | 30.0% | 31.9% | 30.5% | 31.2% | ||||||
| NYSE Arca, MKT and Regional (Tape B) Listed Issues | |||||||||||||
| Handled Volume 5 Matched Volume 6 Total NYSE Arca & NYSE MKT Listed Consolidated Volume |
286 263 1,248 |
224 207 994 |
27.4% 26.8% |
279 251 25.4% 1,188 |
2.4% 4.6% 5.0% |
18,298 16,823 79,841 |
13,466 12,435 59,667 |
35.9% 35.3% 33.8% |
17,582 15,826 74,843 |
4.1% 6.3% 6.7% |
31,764 29,258 139,508 |
34,023 30,497 144,466 |
-6.6% -4.1% -3.4% |
| Share of Total NYSE Arca & NYSE MKT Listed Consolidated Volume Handled Volume 5 Matched Volume 6 |
22.9% 22.6% 21.1% 20.8% |
23.5% 21.1% |
22.9% 21.1% |
22.6% 20.8% |
23.5% 21.1% |
22.8% 21.0% |
23.6% 21.1% |
||||||
| Nasdaq Listed Issues (Tape C) | |||||||||||||
| Handled Volume 5 | 186 | 201 | -7.6% | 240 | -22.7% | 11,875 | 12,048 | -1.4% | 15,123 | -21.5% | 23,923 | 30,218 | -20.8% |
| Matched Volume 6 Total Nasdaq Listed Consolidated Volume |
166 1,781 |
179 1,822 |
-7.5% | 206 -2.3% 1,802 |
-19.3% -1.2% |
10,610 113,979 |
10,758 109,316 |
-1.4% | 12,950 4.3% 113,554 |
-18.1% 0.4% |
21,368 223,295 |
25,726 224,885 |
-16.9% -0.7% |
| Share of Total Nasdaq Listed Consolidated Volume Handled Volume 5 Matched Volume 6 |
10.4% 11.0% 9.3% 9.8% |
13.3% 11.4% |
10.4% 9.3% |
11.0% 9.8% |
13.3% 11.4% |
10.7% 9.6% |
13.4% 11.4% |
||||||
| Exchange-Traded Funds 5,7 | |||||||||||||
| Handled Volume 5 | 267 | 212 | 25.9% | 265 | 0.8% | 17,094 | 12,733 | 34.2% | 16,693 | 2.4% | 29,827 | 32,100 | -7.1% |
| Matched Volume 6 Total ETF Consolidated Volume |
245 1,203 |
196 959 |
25.1% | 238 25.5% 1,167 |
3.0% 3.2% |
15,694 77,019 |
11,761 57,554 |
33.4% 33.8% |
14,995 73,495 |
4.7% 4.8% |
27,455 134,573 |
28,714 140,693 |
-4.4% -4.3% |
| Share of Total ETF Consolidated Volume Handled Volume 5 Matched Volume 6 |
22.2% 22.1% 20.4% 20.4% |
22.7% 20.4% |
22.2% 20.4% |
22.1% 20.4% |
22.7% 20.4% |
22.2% 20.4% |
22.8% 20.4% |
Data includes currency products.
2 Includes trading activities for Bclear, NYSE Liffe's service for Equity OTC derivatives.
3 Includes trading in U.S. equity options contracts, not equity-index options.
4 5 Includes all volume executed in NYSE Euronext's U.S. crossing sessions. Represents the total number of shares of equity securities and ETFs internally matched on the NYSE Euronext's U.S. exchanges or routed to and executed at an external market center. NYSE Arca routing includes odd-lots.
6 7 Represents the total number of shares of equity securities and ETFs executed on the NYSE Euronext's U.S. exchanges. Data included in previously identified categories.
* ADVs calculated with the appropriate number of NYSE Liffe U.S. trading days.
Source: NYSE Euronext, Options Clearing Corporation and Consolidated Tape as reported for equity securities.
All trading activity is single-counted, except European cash trading which is double counted to include both buys and sells.
| Three Months Ended | |||
|---|---|---|---|
| (Unaudited) | June 30, 2013 | Mar. 31, 2013 | June 30, 2012 |
| NYSE Euronext Listed Issuers | |||
| NYSE Listed Issuers | |||
| Issuers listed on U.S. Markets1 | 2,942 | 2,928 | 2,968 |
| Number of new issuer listings1 | 88 | 46 | 75 |
| Capital raised in connection with new listings (\$millions)2 | \$8,982 | \$5,746 | \$5,086 |
| Euronext Listed Issuers | |||
| Issuers listed on Euronext1 | 884 | 884 | 923 |
| Number of new issuer listings3 | 14 | 10 | 10 |
| Capital raised in connection with new listings (\$millions)2 | \$1,207 | \$6 | \$1,912 |
| NYSE Euronext Market Data | |||
| NYSE Market Data4 | |||
| Share of Tape A revenues (%) | 40.3% | 39.5% | 41.4% |
| Share of Tape B revenues (%) | 26.7% | 26.6% | 27.0% |
| Share of Tape C revenues (%) | 13.5% | 13.6% | 15.1% |
| Professional subscribers (Tape A) | 331,102 | 333,430 | 360,121 |
| Euronext Market Data | |||
| Number of terminals | 202,389 | 205,764 | 216,752 |
| NYSE Euronext Operating Expenses | |||
| NYSE Euronext employee headcount | |||
| NYSE Euronext headcount5 | 3,154 | 3,171 | 3,062 |
| NYSE Euronext Financial Statistics | |||
| NYSE Euronext foreign exchange rate | |||
| Average €/US\$ exchange rate | \$1.306 | \$1.320 | \$1.254 |
| Average £/US\$ exchange rate | \$1.536 | \$1.552 | \$1.583 |
1 Figures for NYSE listed issuers include listed operating companies, special-purpose acquisition companies and closed-end funds listed on the NYSE and NYSE MKT and do not include NYSE Arca or structured products listed on the NYSE. There w ere 1,385 ETPs exclusively listed on NYSE Arca as of June 30, 2013. There w ere 413 corporate structured products listed on the NYSE as of June 30, 2013. Figures for new issuer listings include NYSE new listings (including new operating companies, special-purpose acquisition companies and closedend funds listing on NYSE) and new ETP listings on NYSE Arca (NYSE MKT is excluded). Figures for Euronext present the operating companies w ere listed on Euronext and do not include NYSE Alternext, Free Market, closed-end funds, ETFs and structured product (w arrants and certificates). As of June 30, 2013, 181 companies w ere listed on NYSE Alternext, 252 on Free Market and 673 ETPs w ere listed on NextTrack.
2 Euronext figures show capital raised in millions of dollars by operating companies listed on Euronext, NYSE Alternext and Free Market and do not include closed-end funds, ETFs and structured products (w arrants and certificates). NYSE figures show capital raised in millions of dollars by operating companies listed on NYSE and NYSE Arca and do not include closed-end funds, ETFs and structured products.
3 Euronext figures include operating companies listed on Euronext, NYSE Alternext and Free Market and do not include closed-end funds, ETFs and structured products (w arrants and certificates).
4 "Tape A" represents NYSE listed securities, "Tape B" represents NYSE Arca and NYSE MKT listed securities, and "Tape C" represents Nasdaq listed securities. Per Regulation NMS, as of April 1, 2007, share of revenues is derived through a formula based on 25% share of trading, 25% share of value traded, and 50% share of quoting, as reported to the consolidated tape. Prior to April 1, 2007, share of revenues for Tape A and B w as derived based on number of trades reported to the consolidated tape, and share of revenue for Tape C w as derived based on an average of share of trades and share of volume reported to the consolidated tape. The consolidated tape refers to the collection and dissemination of market data that multiple markets make available on a consolidated basis. Share figures exclude transactions reported to the FINRA/NYSE Trade Reporting Facility.
5 Headcount as of March 31, 2013 included 120 employees from the insourcing of offshore resources as part of the January 2013 creation of NYSE Philippines.
Source: NYSE Euronext, Options Clearing Corporation and Consolidated Tape as reported for equity securities.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.