Earnings Release • Apr 30, 2013
Earnings Release
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‐‐ First Quarter GAAP Diluted EPS of \$0.52 vs. \$0.34 in Prior Year ‐‐
‐‐ Non‐GAAP Diluted EPS of \$0.57, Up 21% Excluding Merger Expenses, Exit Costs and Discrete Items ‐‐
1 All comparisons versus 1Q12 unless otherwise stated. Excludes merger expenses, exit costs, charge for fair value adjustment to RSU awards 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.
3 Cash balances include cash, cash equivalents and short term financial investments.
NEW YORK – April 30, 2013 – NYSE Euronext (NYX) today reported net income of \$126 million, or \$0.52 per diluted share, for the first quarter of 2013, compared to net income of \$87 million, or \$0.34 per diluted share, for the first quarter of 2012. Results for the first quarter of 2013 and 2012 include \$8 million and \$31 million, respectively, of pre‐tax merger expenses and exit costs. Additionally, the results for the first quarter of 2013 include a \$10 million pre‐tax charge for fair value adjustment to restricted stock unit (RSU) awards resulting from a shift to liability‐settled accounting and the subsequent increase in our stock price. Following shareholder approval of the amended stock incentive plan on April 25, 2013, outstanding RSU awards are once again fixed in value under equity‐settled accounting. As a result, equity compensation costs in the second quarter of 2013 will decline by \$10 million. Excluding merger expenses, exit costs, the stock‐based compensation charge and discrete tax items, net income in the first quarter of 2013 was \$139 million, or \$0.57 per diluted share, compared to \$121 million, or \$0.47 per diluted share, in the first quarter of 2012.
"Our first quarter results reflected improved trading volumes in our European Derivatives franchise and the benefit of the actions we have taken to strengthen the fundamental earnings power of the Company over the past year," said Duncan L. Niederauer, CEO, NYSE Euronext. "At the same time, we are moving forward with the requisite approvals and integration planning for the proposed combination with Intercontinental Exchange. The Hart‐Scott Rodino waiting period expired in February, we are actively engaged with our regulators in Europe to move all appropriate approvals forward, and we look forward to our respective shareholder votes on the acquisition in early June."
| % Δ 1Q13 | ||||
|---|---|---|---|---|
| (\$ in millions, except EPS) | 1Q13 | 4Q12 | 1Q12 | vs. 1Q12 |
| Total Revenues2 | \$963 | \$909 | \$952 | 1% |
| Total Revenues, Less Transaction-Based Expenses3 | 600 | 562 | 601 | (0%) |
| Other Operating Expenses 4 | 380 | 389 | 405 | (6%) |
| Operating Income 4 | \$220 | \$173 | \$196 | 12% |
| Net Income5 | \$139 | \$106 | \$121 | 15% |
| Diluted Earnings Per Share5 | \$0.57 | \$0.43 | \$0.47 | 21% |
| Operating Margin | 37% | 31% | 33% | 4 ppts |
| Adjusted EBITDA Margin | 47% | 42% | 44% | 3 ppts |
1 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. 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, debt refinancing costs and discrete tax items.
"Disciplined cost and capital management drove a rebound in earnings, both year‐over‐year and quarter‐ over‐quarter. We repurchased 17 million shares in 2012 and recorded recurring first quarter operating expenses of \$380 million, the lowest level since the merger with Euronext," commented Michael S. Geltzeiler, Group Executive Vice President and CFO, NYSE Euronext. "Based on our first quarter results and anticipated further cost savings, such as our move into ICE Clear Europe in the second half of 2013, we are on target to surpass our full‐year 2013 cost guidance target of \$1,525 million."
Total revenues, less transaction‐based expenses, which include Section 31 fees, liquidity payments and routing and clearing fees (net revenue), were \$600 million in the first quarter of 2013, in‐line with the first quarter of 2012 and included a \$1 million negative impact from foreign currency fluctuations. A \$13 million year‐over‐year increase in net trading revenue from higher trading volumes was offset by lower market data and technology services revenue.
Other operating expenses, excluding merger expenses, exit costs and a \$10 million pre‐tax charge for fair value adjustment to RSU awards, were \$380 million in the first quarter of 2013, down \$25 million, or 6% compared to the first quarter of 2012. Excluding the impact of new business initiatives and a \$1 million positive impact attributable to foreign currency fluctuations, other operating expenses were down \$33 million, or 8%, compared to the first quarter of 2012.
Cumulative Project 14 savings through the first quarter of 2013 were \$147 million, which represents 59% of the total \$250 million expected to be saved by the end of 2014.
Operating income, excluding merger expenses, exit costs and charge for fair value adjustment to RSU awards, was \$220 million, up \$24 million, or 12% compared to the first quarter of 2012.
Adjusted EBITDA, excluding merger expenses, exit costs and charge for fair value adjustment to RSU awards, was \$282 million, up \$20 million, or 8% compared to the first quarter of 2012. Adjusted EBITDA margin was 47% in the first quarter of 2013, compared to 44% in the first 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 first quarter 2013, excluding merger expenses, exit costs, charge for fair value adjustment to RSU awards and discrete tax items, was 24% compared to approximately 25% for the first quarter 2012.
The weighted average diluted shares outstanding in the first quarter of 2013 was 244 million, down from 259 million in first quarter of 2012.
At March 31, 2013, total debt was \$2.5 billion. Total debt includes \$0.4 billion remaining from the 4.8% June 2013 notes which we expect to retire in the second quarter of 2013. Cash, cash equivalents and short term financial investments (including \$76 million related to Section 31 fees collected from market participants and due to the SEC) were \$0.5 billion, an increase of \$147 million, and net debt was \$2.0 billion at the end of the first quarter of 2013. The ratio of debt‐to‐EBITDA at the end of the first quarter of 2013 was 2.3, down from 2.5 at the end of 2012.
Total capital expenditures were \$27 million in the first quarter of 2013, down from \$43 million in the first quarter of 2012.
The Board of Directors declared a cash dividend of \$0.30 per share for the second quarter of 2013. The second quarter 2013 dividend is payable on June 28, 2013 to shareholders of record as of the close of business on June 14, 2013. The anticipated ex‐date will be June 12, 2013.
The Company also set June 3, 2013 as the date of the special stockholder meeting to consider the ICE transaction with a record date of April 26, 2013.
| 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 | ||
| 1Q13 | \$201 | \$104 | \$113 | \$287 | \$114 | \$154 | \$112 | \$25 | \$38 |
| 4Q12 | \$160 | \$63 | \$72 | \$282 | \$100 | \$141 | \$120 | \$35 | \$49 |
| 1Q12 | \$176 | \$79 | \$89 | \$304 | \$119 | \$161 | \$121 | \$28 | \$42 |
1 Net 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 \$201 million in the first quarter of 2013 increased \$25 million, or 14% compared to the first quarter of 2012 and included a \$2 million negative impact from foreign currency fluctuations. The \$27 million increase in derivatives net revenue, on a constant currency basis, compared to the first quarter of 2012, was driven by higher average daily trading volumes. Highlights for the first quarter of 2013 included:
• Global derivatives ADV in the first quarter of 2013 of 8.8 million contracts increased 17% compared to the first quarter of 2012 and increased 16% compared to fourth quarter of 2012 levels.
Cash Trading and Listings net revenue of \$287 million in the first quarter of 2013 decreased \$17 million, or 6% compared to the first quarter of 2012 and included a \$1 million positive impact from foreign currency fluctuations. The \$18 million decrease in net revenue, on a constant currency basis, compared to the first quarter of 2012 was primarily driven by lower average daily trading volumes. Highlights for the first quarter of 2013 included:
In the U.S., cash trading ADV in the first quarter of 2013 decreased 13% to 1.5 billion shares from 1.8 billion shares in the first quarter of 2012 and was in‐line with the fourth quarter of 2012. Tape A matched market share was 30% in the first quarter of 2013, down from the 31% recorded both in the first quarter of 2012 and the fourth quarter of 2012. Trading off‐exchange, as reported by Trade Reporting Facilities ("TRF"), increased to 36% of overall consolidated average daily volume in the first quarter of 2013 from 34% in the first quarter of 2012.
NYSE Euronext ranked #1 globally in initial public offerings (IPOs) and follow‐ons globally in the first quarter of 2013. NYSE Euronext raised \$12.1 billion in total global proceeds on 26 IPOs and \$48.3 billion in total global proceeds on 140 follow‐ons. In the U.S., NYSE Euronext led the market with 17 IPOs (excluding closed‐end funds) and has steadily captured share in technology‐based IPOs. NYSE Euronext has listed 75% of the technology IPOs in the U.S., through March 2013, including Silver Spring Networks Inc., Model N Inc., and Marin Software Inc.
Information Services and Technology Solutions revenue was \$112 million in the first quarter of 2013, a decrease of \$9 million, or 7% compared to the first quarter of 2012. The \$9 million decrease was primarily due to the decline in the number of large, one‐time managed services sales. However, new market data initiatives are on track to build in the second quarter of 2013. Highlights for the first quarter of 2013 included:
The accompanying tables include information integral to assessing the Company's financial performance.
A presentation and live audio webcast of the first 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 dial‐in 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.
Live Dial‐in Information: United States: 800.901.5241 International: 617.786.2963 Passcode: 49326779
Replay Dial‐in Information: United States: 888.286.8010 International: 617.801.6888 Passcode: 38551192
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 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 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 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 inability to complete the merger due to the failure of NYSE Euronext stockholders to adopt the merger agreement or the failure of ICE stockholders to approve the issuance of ICE common stock in connection with the merger; 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 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, neither ICE nor NYSE Euronext undertakes any 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 has filed with the SEC a registration statement on Form S‐4, which includes a joint proxy statement/prospectus with respect to the proposed acquisition of NYSE Euronext. The final joint proxy statement/prospectus will be 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 WILL CONTAIN 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
ICE, NYSE Euronext and their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the transactions contemplated by the Merger Agreement.
You can find information about ICE and ICE's directors and executive officers in ICE's Annual Report on Form 10‐K for the year ended December 31, 2012, as filed with the SEC on February 6, 2013, and ICE's proxy statement for its 2013 annual meeting of stockholders, as filed with the SEC on March 28, 2013.
You can find information about NYSE Euronext and NYSE Euronext's directors and executive officers in NYSE Euronext's Annual Report on Form 10‐K for the year ended December 31, 2012, as filed with the SEC on February 26, 2013, and NYSE Euronext's proxy statement for its 2013 annual meeting of stockholders, filed with the SEC on March 22, 2013.
Additional information about the interests of potential participants will be included in the joint proxy statement/prospectuses, when it becomes available, and the other relevant documents filed by ICE and NYSE Euronext with the SEC.
| Three months ended | |||
|---|---|---|---|
| Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 | |
| Revenues | |||
| Transaction and clearing fees | \$ 634 |
\$ 565 |
\$ 609 |
| Market data | 83 | 85 | 91 |
| Listing | 110 | 114 | 110 |
| Technology services | 80 | 87 | 86 |
| Other revenues | 56 | 58 | 56 |
| Total revenues | 963 | 909 | 952 |
| Transaction-based expenses: | |||
| Section 31 fees | 75 | 75 | 66 |
| Liquidity payments, routing and clearing | 288 | 272 | 285 |
| Total revenues, less transaction-based expenses | 600 | 562 | 601 |
| Other operating expenses | |||
| Compensation | 161 | 144 | 160 |
| Depreciation and amortization | 62 | 64 | 66 |
| Systems and communications | 43 | 43 | 45 |
| Professional services | 69 | 81 | 73 |
| Selling, general and administrative | 55 | 60 | 61 |
| Merger expenses and exit costs | 8 | 73 | 31 |
| Total other operating expenses | 398 | 465 | 436 |
| Operating income | 202 | 97 | 165 |
| Net interest and investment income (loss) | (27) | (52) | (28) |
| Loss from associates | (2) | (3) | (1) |
| Other income (loss) | (1) | 3 | - |
| Income before income taxes | 172 | 45 | 136 |
| Income tax (provision) benefit | (41) | (14) | (45) |
| Net income | 131 | 31 | 91 |
| Net (income) loss attributable to noncontrolling interest | (5) | (3) | (4) |
| Net income attributable to NYSE Euronext | \$ 126 |
\$ 28 |
\$ 87 |
| Basic earnings per share attributable to NYSE Euronext | \$ 0.52 |
\$ 0.12 |
\$ 0.34 |
| Diluted earnings per share attributable to NYSE Euronext | \$ 0.52 |
\$ 0.12 |
\$ 0.34 |
| Basic weighted average shares outstanding | 243 | 243 | 258 |
| Diluted weighted average shares outstanding | 244 | 244 | 259 |
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 | |||
|---|---|---|---|
| Non-GAAP Reconciliation | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 |
| Income (loss) before income taxes - GAAP | \$ 172 |
\$ 45 |
\$ 136 |
| Excluding: | |||
| Debt refinancing costs | - | 24 | - |
| Fair value adjustment to RSU awards | 10 | 3 | - |
| Merger expenses and exit costs | 8 | 73 | 31 |
| Income before income taxes - as adjusted | 190 | 145 | 167 |
| Income tax provision | (46) | (36) | (42) |
| Net income - as adjusted | 144 | 109 | 125 |
| Net (income) loss attributable to noncontrolling interest | (5) | (3) | (4) |
| Net income attributable to NYSE Euronext - as adjusted | \$ 139 |
\$ 106 |
\$ 121 |
| Diluted earnings per share attributable to NYSE Euronext | \$ 0.57 |
\$ 0.43 |
\$ 0.47 |
| Three months ended March 31, 2013 |
Three months ended March 31, 2012 |
|||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Information | Information | |||||||||||||||
| Cash Trading | Services and Technology |
Corporate and |
Trading and Cash |
Services and Technology |
Corporate and | |||||||||||
| Derivatives | and Listings | Solutions | Eliminations | Consolidated | Derivatives | Listings | Solutions | Eliminations | Consolidated | |||||||
| Revenues | ||||||||||||||||
| Transaction and clearing fees | \$ 271 |
\$ | 363 | \$ | - | - \$ |
\$ | 634 | \$ 206 |
\$ 403 |
\$ - |
\$ | - | \$ | 609 | |
| Market data | 10 | 41 | 32 | - | 83 | 11 | 45 | 35 | - | 91 | ||||||
| Listing | - | 110 | - | - | 110 | - | 110 | - | - | 110 | ||||||
| Technology services | - | - | 80 | - | 80 | - | - | 86 | - | 86 | ||||||
| Other revenues | 12 | 44 | - | - | 56 | 12 | 44 | - | - | 56 | ||||||
| Total revenues | 293 | 558 | 112 | - | 963 | 229 | 602 | 121 | - | 952 | ||||||
| Transaction-based expenses: | ||||||||||||||||
| Section 31 fees | - | 75 | - | - | 75 | - | 66 | - | - | 66 | ||||||
| Liquidity payments, routing and clearing | 92 | 196 | - | - | 288 | 53 | 232 | - | - | 285 | ||||||
| Total revenues, less transaction-based expenses | 201 | 287 | 112 | - | 600 | 176 | 304 | 121 | - | 601 | ||||||
| Depreciation and amortization | [a] | 9 | 40 | 13 | - | 62 | 10 | 42 | 14 | - | 66 | |||||
| Merger expenses and exit costs (M&E) | [b] | 2 | 4 | 3 | (1) | 8 | 1 | 6 | 6 | 18 | 31 | |||||
| Fair value adjustment to RSU awards | [c] | - | - | - | 10 | 10 | - | - | - | - | - | |||||
| Other operating expenses | 88 | 133 | 74 | 23 | 318 | 87 | 143 | 79 | 30 | 339 | ||||||
| Operating income - GAAP | [d] | \$ 102 |
\$ | 110 | \$ | 22 | \$ | \$ (32) |
202 | \$ 78 |
\$ 113 |
\$ 22 |
\$ | (48) | \$ | 165 |
| Operating income excluding M&E and fair | ||||||||||||||||
| value adjustment to RSU awards | [d] + [c] + [b] | \$ 104 |
\$ | 114 | \$ | 25 | \$ | \$ (23) |
220 | \$ 79 |
\$ 119 |
\$ 28 |
\$ | (30) | \$ | 196 |
| Adjusted EBITDA | [d] + [c] + [b] + [a] | \$ 113 |
\$ | 154 | \$ | 38 | \$ | \$ (23) |
282 | \$ 89 |
\$ 161 |
\$ 42 |
\$ | (30) | \$ | 262 |
| Operating margin excluding M&E and fair | ||||||||||||||||
| value adjustment to RSU awards | 52% | 40% | 22% | N/M | 37% | 45% | 39% | 23% | N/M | 33% | ||||||
| Adjusted EBITDA margin | 56% | 54% | 34% | N/M | 47% | 51% | 53% | 35% | N/M | 44% | ||||||
NYSE Euronext Segment Results (unaudited) (in millions)
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. We use non-GAAP financial measures of operating performance. Non-GAAP measures do not replace and are not superior to the presentation of
| Expense Base Development on a Constant \$ / Constant Portfolio Basis | ||
|---|---|---|
| Fixed operating expenses for the three months ended March 31, 2013 - GAAP | \$ 398 |
|
| Less: | ||
| Fair value adjustment to RSU awards | \$ (10) |
|
| Merger expenses and exit costs | (8) | |
| \$ 380 |
||
| Excluding the impact of: | ||
| Currency translation | 1 | |
| New business initiatives | (9) | |
| Fixed operating expenses for the three months ended March 31, 2013 - as adjusted | \$ 372 |
[a] |
| Fixed operating expenses for the three months ended March 31, 2012 - GAAP | \$ 436 |
|
| Less: | ||
| Merger expenses and exit costs | (31) | |
| Fixed operating expenses for the three months ended March 31, 2012 - as adjusted | \$ 405 |
[b] |
| Variance (\$) | \$ (33) |
[a] - [b] = [c] |
| Variance (%) | -8% | [c] / [b] |
| Expense Base Development Versus Project 14 Cost Savings Plan | ||
| Fixed operating expenses for the three months ended March 31, 2013 - GAAP | \$ 398 |
|
| Fixed operating expenses for the nine months ended December 31, 2012 - GAAP | 1,279 | |
| Fixed operating expenses for the trailing twelve months ended March 31, 2013 - GAAP | \$ 1,677 |
|
| Less: | ||
| Fair value adjustment to RSU awards | \$ (13) |
|
| Merger expenses and exit costs | (111) | |
| \$ 1,553 |
||
| Excluding the impact of: | ||
| New business initiatives | (49) | |
| Currency translation(1) | 15 | |
| Fixed operating expenses for the the trailing twelve months ended March 31, 2013 - as adjusted | \$ 1,519 |
[a] |
| Fixed operating expenses for the year ended December 31, 2011 - base year | \$ 1,666 |
[b] |
| Project 14 Cost Savings | \$ 147 |
[b]-[a] = [c] |
| Cumulative Project 14 Cost Savings to date as % of total \$250 million plan | 59% | [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.
(in millions)
| Mar. 31, 2013 |
Dec. 31, 2012 |
|
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash, cash equivalents, and short term financial investments | \$ 527 |
\$ 380 |
| Accounts receivable, net | 447 | 405 |
| Deferred income taxes | 66 | 67 |
| Other current assets | 133 | 156 |
| Total current assets | 1,173 | 1,008 |
| Property and equipment, net | 906 | 948 |
| Goodwill | 4,011 | 4,163 |
| Other intangible assets, net | 5,548 | 5,783 |
| Deferred income taxes | 73 | 74 |
| Other assets | 567 | 580 |
| Total assets | \$ 12,278 |
\$ 12,556 |
| Liabilities and equity | ||
| Accounts payable and accrued expenses | \$ 687 |
\$ 824 |
| Deferred revenue | 396 | 138 |
| Short term debt | 478 | 454 |
| Total current liabilities | 1,561 | 1,416 |
| Long term debt | 2,021 | 2,055 |
| Deferred income taxes | 1,403 | 1,435 |
| Accrued employee benefits | 588 | 602 |
| Deferred revenue | 365 | 378 |
| Other liabilities | 25 | 27 |
| Total liabilities | 5,963 | 5,913 |
| Redeemable noncontrolling interest | 357 | 274 |
| Equity | 5,958 | 6,369 |
| Total liabilities and equity | \$ 12,278 |
\$ 12,556 |
| Average Daily Volume | Total Volume | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Unaudited) | 1Q13 | 4Q12 | % ∆ 1Q13 vs. 4Q12 |
1Q12 | % ∆ 1Q13 vs. 1Q12 |
1Q13 | 4Q12 | % ∆ 1Q13 vs. 4Q12 |
1Q12 | % ∆ 1Q13 vs. 1Q12 |
| Number of Trading Days - European Cash Number of Trading Days - European Derivatives |
62 62 |
64 64 |
65 62 |
62 62 |
64 65 |
65 65 |
||||
| Number of Trading Days - U.S. Markets | 60 | 62 | 62 | 60 | 62 | 62 | ||||
| European Derivatives Products (contracts in thousands) of which Bclear |
883 | 3,534 4,515 1,190 |
27.8% -25.8% |
3,332 673 |
35.5% 31.3% |
279,936 54,749 |
226,159 76,142 |
23.8% -28.1% |
216,595 43,730 |
29.2% 25.2% |
| Avg. Net Revenue Per Contract (ex. Bclear) Avg. Net Revenue Per Contract (ex. Bclear) - Currency Neutral |
\$ 0.622 \$ 0.673 \$ 0.622 \$ 0.650 |
-7.6% \$ 0.659 -4.3% \$ 0.651 |
-5.6% -4.5% |
\$ 0.622 \$ 0.622 |
\$ 0.673 \$ 0.650 |
-7.6% -4.3% |
\$ 0.659 \$ 0.651 |
-5.6% -4.5% |
||
| Total Interest Rate Products1 | 1,562 2,749 | 76.0% | 1,774 | 54.9% | 170,433 | 99,978 | 70.5% | 115,327 | 47.8% | |
| Short Term Interest Rate Products Medium and Long Term Interest Rate Products |
2,560 189 |
1,406 156 |
82.1% 21.0% |
1,622 152 |
57.8% 24.3% |
158,710 11,723 |
89,977 10,001 |
76.4% 17.2% |
105,438 9,889 |
50.5% 18.5% |
| Total Equity Products2 | 1,875 1,674 | -10.7% | 1,477 | 13.4% | 103,802 | 120,005 | -13.5% | 95,974 | 8.2% | |
| Individual Equity Products | 1,132 | 1,430 | -20.9% | 1,019 | 11.1% | 70,179 | 91,542 | -23.3% | 66,242 | 5.9% |
| Futures Options |
660 471 |
1,049 381 |
-37.0% 23.7% |
510 509 |
29.4% -7.3% |
40,948 29,231 |
67,140 24,402 |
-39.0% 19.8% |
33,175 33,068 |
23.4% -11.6% |
| Equity Index Products | 542 | 445 | 21.9% | 457 | 18.6% | 33,623 | 28,463 | 18.1% | 29,732 | 13.1% |
| of which Bclear | 881 | 1,190 | -25.9% | 673 | 31.0% | 54,749 | 76,142 | -28.1% | 43,730 | 25.2% |
| Individual Equity Products Futures |
758 649 |
1,106 1,038 |
-31.5% -37.4% |
600 502 |
26.4% 29.3% |
47,008 40,267 |
70,803 66,435 |
-33.6% -39.4% |
38,998 32,660 |
20.5% 23.3% |
| Options Equity Index Products |
109 123 |
68 83 |
59.3% 47.5% |
98 73 |
11.5% 69.1% |
6,742 7,630 |
4,368 5,339 |
54.3% 42.9% |
6,339 4,731 |
6.4% 61.3% |
| Commodity Products | 92 | 97 | -4.7% | 81 | 12.9% | 5,701 | 6,176 | -7.7% | 5,293 | 7.7% |
| U.S. Derivatives Products (contracts in thousands) | ||||||||||
| Avg. Net Revenue Per Contract (ex. Liffe U.S. volumes) | \$ 0.150 \$ 0.144 | 4.2% \$ 0.148 | 1.4% | \$ 0.150 | \$ 0.144 | 4.2% | \$ 0.148 | 1.4% | ||
| Equity Options Contracts3 Total Consolidated Options Contracts |
4,231 14,981 |
4,000 14,318 |
5.8% | 4,128 4.6% 15,879 |
2.5% -5.7% |
253,843 898,885 |
248,007 887,740 |
2.4% 1.3% |
255,922 984,508 |
-0.8% -8.7% |
| Share of Total Consolidated Options Contracts | 28.2% | 27.9% | 26.0% | 28.2% | 27.9% | 26.0% | ||||
| NYSE Liffe U.S. | ||||||||||
| Futures and Futures Options Volume* | 58.7 | 55.2 | 6.3% | 96.3 | -39.0% | 3,641.1 | 3,591.0 | 1.4% | 6,161.3 | -40.9% |
| European Cash Products (trades in thousands) Avg. Net Revenue Per Transaction |
\$ 0.620 \$ 0.583 | 1,179 1,378 | 16.9% | 1,583 6.3% \$ 0.573 |
-13.0% 8.2% |
85,419 \$ 0.620 |
75,457 \$ 0.583 |
13.2% 6.3% |
102,927 \$ 0.573 |
-17.0% 8.2% |
| Avg. Net Revenue Per Transaction - Currency Neutral | \$ 0.620 \$ 0.593 | 4.6% \$ 0.577 | 7.5% | \$ 0.620 | \$ 0.593 | 4.6% | \$ 0.577 | 7.5% | ||
| Equities | 1,134 1,326 | 16.9% | 1,530 | -13.3% | 82,199 | 72,560 | 13.3% | 99,439 | -17.3% | |
| Exchange-Traded Funds Structured Products |
14 33 |
12 28 |
14.9% 18.4% |
14 34 |
-5.6% -5.3% |
848 2,019 |
762 1,760 |
11.3% 14.7% |
942 2,235 |
-9.9% -9.7% |
| Bonds | 6 | 6 | -2.7% | 5 | 19.1% | 353 | 375 | -5.7% | 311 | 13.6% |
| U.S. Cash Products (shares in millions) Avg. Net Revenue Per 100 Shares Handled |
\$ 0.0431 \$ 0.0399 | 1,551 1,545 | -0.4% | 1,783 8.0% \$ 0.0425 |
-13.3% 1.4% |
92,721 \$ 0.0431 |
96,158 \$ 0.0399 |
-3.6% 8.0% |
110,557 \$ 0.0425 |
-16.1% 1.4% |
| NYSE Listed (Tape A) Issues 4 | ||||||||||
| Handled Volume 5 | 1,115 1,120 | 0.5% | 1,275 | -12.1% | 67,207 | 69,126 | -2.8% | 79,023 | -15.0% | |
| Matched Volume 6 Total NYSE Listed Consolidated Volume |
1,069 1,077 3,405 3,585 |
0.8% 5.3% |
1,202 3,932 |
-10.4% -8.8% |
64,603 215,111 |
66,250 211,117 |
-2.5% 1.9% |
74,532 243,800 |
-13.3% -11.8% |
|
| Share of Total Consolidated Volume | ||||||||||
| Handled Volume 5 Matched Volume 6 |
31.2% 30.0% |
32.7% 31.4% |
32.4% 30.6% |
31.2% 30.0% |
32.7% 31.4% |
32.4% 30.6% |
||||
| NYSE Arca, MKT and Regional (Tape B) Listed Issues | ||||||||||
| Handled Volume 5 | 224 | 225 | -0.1% | 265 | -15.4% | 13,466 | 13,928 | -3.3% | 16,441 | -18.1% |
| Matched Volume 6 Total NYSE Arca & NYSE MKT Listed Consolidated Volume |
207 | 208 971 994 |
-0.3% 2.4% |
237 1,123 |
-12.4% -11.4% |
12,435 59,667 |
12,889 60,182 |
-3.5% -0.9% |
14,670 69,623 |
-15.2% -14.3% |
| Share of Total NYSE Arca & NYSE MKT Listed Consolidated Volume | ||||||||||
| Handled Volume 5 Matched Volume 6 |
22.6% 20.8% |
23.1% 21.4% |
23.6% 21.1% |
22.6% 20.8% |
23.1% 21.4% |
23.6% 21.1% |
||||
| Nasdaq Listed Issues (Tape C) | ||||||||||
| Handled Volume 5 | 201 | 211 | -5.0% | 243 | -17.5% | 12,048 | 13,104 | -8.1% | 15,095 | -20.2% |
| Matched Volume 6 Total Nasdaq Listed Consolidated Volume |
179 1,822 |
189 1,736 |
-4.9% 5.0% |
206 1,796 |
-13.0% 1.5% |
10,758 109,316 |
11,688 107,620 |
-8.0% 1.6% |
12,776 111,330 |
-15.8% -1.8% |
| Share of Total Nasdaq Listed Consolidated Volume | ||||||||||
| Handled Volume 5 Matched Volume 6 |
11.0% 9.8% |
12.2% 10.9% |
13.6% 11.5% |
11.0% 9.8% |
12.2% 10.9% |
13.6% 11.5% |
||||
| Exchange-Traded Funds 5,7 | ||||||||||
| Handled Volume 5 | 212 | 213 | -0.3% | 248 | -14.6% | 12,733 | 13,193 | -3.5% | 15,407 | -17.4% |
| Matched Volume 6 Total ETF Consolidated Volume |
196 959 |
197 940 |
-0.6% 2.1% |
221 1,084 |
-11.4% -11.5% |
11,761 57,554 |
12,229 58,263 |
-3.8% -1.2% |
13,718 67,197 |
-14.3% -14.4% |
| Share of Total ETF Consolidated Volume Handled Volume 5 |
22.1% | 22.6% | 22.9% | 22.1% | 22.6% | 22.9% | ||||
| Matched Volume 6 | 20.4% | 21.0% | 20.4% | 20.4% | 21.0% | 20.4% |
Data includes currency products.
2 Includes trading activities for Bclear, NYSE Liffe's service for Equity OTC derivatives.
3 4 Includes all volume executed in NYSE Euronext's U.S. crossing sessions. Includes trading in U.S. equity options contracts, not equity-index options.
5 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
6 Represents the total number of shares of equity securities and ETFs executed on the NYSE Euronext's U.S. exchanges. k t t NYSE A ti i l d dd l t
Data included in previously identified categories.
* ADVs calculated w ith 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 w hich is double counted to include both buys and sells.
| Three Months Ended | |||
|---|---|---|---|
| (Unaudited) | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 |
| NYSE Euronext Listed Issuers | |||
| NYSE Listed Issuers | |||
| Issuers listed on U.S. Markets1 | 2,928 | 2,939 | 2,960 |
| Number of new issuer listings1 | 46 | 70 | 106 |
| Capital raised in connection with new listings (\$millions)2 | \$8,755 | \$6,004 | \$16,422 |
| Euronext Listed Issuers | |||
| Issuers listed on Euronext1 | 884 | 893 | 926 |
| Number of new issuer listings3 | 10 | 14 | 10 |
| Capital raised in connection with new listings (\$millions)2 | \$6 | \$36 | \$1,461 |
| NYSE Euronext Market Data | |||
| NYSE Market Data4 | |||
| Share of Tape A revenues (%) | 39.5% | 41.6% | 40.2% |
| Share of Tape B revenues (%) | 26.6% | 26.9% | 27.0% |
| Share of Tape C revenues (%) | 13.6% | 14.4% | 15.6% |
| Professional subscribers (Tape A) | 333,430 | 337,069 | 362,617 |
| Euronext Market Data | |||
| Number of terminals | 205,764 | 209,686 | 221,906 |
| NYSE Euronext Operating Expenses | |||
| NYSE Euronext employee headcount | |||
| NYSE Euronext headcount5 | 3,171 | 3,079 | 3,079 |
| NYSE Euronext Financial Statistics | |||
| NYSE Euronext foreign exchange rate | |||
| Average €/US\$ exchange rate | \$1.320 | \$1.298 | \$1.311 |
| Average £/US\$ exchange rate | \$1.552 | \$1.606 | \$1.571 |
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 1,360 ETPs exclusively listed on NYSE Arca as of March 31, 2013. There w ere 407 corporate structured products listed on the NYSE as of March 31, 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 March 31, 2013, 180 companies w ere listed on NYSE Alternext, 261 on Free Market and 665 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).
Source: NYSE Euronext, Options Clearing Corporation and Consolidated Tape as reported for equity securities.
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