NYSE Euronext (NYX) today reported net income of $154 million,
or $0.59 per diluted share, for the second quarter of 2011,
compared to net income of $184 million, or $0.70 per diluted share,
for the second quarter of 2010. Results for the second quarter of
2011 and 2010 include $18 million and $32 million, respectively, of
pre-tax merger expenses and exit costs. The $18 million in merger
expenses and exit costs in the second quarter of 2011 included $12
million related to the proposed merger with Deutsche Boerse. Second
quarter of 2010 results also included a net $54 million pre-tax
gain from disposal activities. Excluding merger expenses, exit
costs, disposal activities and discrete tax items, net income in
the second quarter of 2011 was $160 million, or $0.61 per diluted
share, compared to $167 million, or $0.64 per diluted share, in the
second quarter of 2010.
“Our solid results in the second quarter reflect our focus on
revenue diversification, disciplined cost management and balance
sheet strength as we continue to execute against our long-term
strategy in an extremely challenging environment,” said Duncan L.
Niederauer, CEO, NYSE Euronext. “NYSE Liffe U.S. continues to gain
traction with the launch of Eurodollar and U.S. treasury futures,
we closed the sale of stakes in NYSE Amex Options and we were the
global leader in IPOs for the second consecutive quarter, with a
growing share of technology IPOs selecting NYSE. Lastly, our
technology services business, which grew revenue 14%
year-over-year, launched the first cloud computing platform in
financial services.
“I would like to thank the shareholders of both NYSE Euronext
and Deutsche Boerse for their overwhelming support of our pending
combination. Integration planning is on schedule and we continue to
cooperate with all our regulators as we prepare for a closing by
end of 2011.”
The table below summarizes the financial results1 for the second
quarter of 2011:
% Δ
2Q11 Year-to-Date % Δ YTD 11 ($ in millions,
except EPS) 2Q11 1Q11
2Q10 vs. 2Q10 2011
2010 vs. YTD 10 Total Revenues2
$1,092 $1,148 $1,247 (12%)
$2,240 $2,330 (4%) Total Revenues, Less
Transaction-Based Expenses3 661 679
654 1% 1,340 1,299 3% Other
Operating Expenses4 419 415 407
3% 834 834 - Operating
Income4 $242 $264 $247 (2%)
$506 $465 9% Net Income4
$160 $177 $167 (4%) $337
$307 10% Diluted Earnings Per Share4
$0.61 $0.68 $0.64
(5%) $1.28 $1.18
9% Operating Margin 37% 39% 38%
(1 ppts) 38% 36% 2 ppts EBITDA
Margin 47% 49%
48% (1 ppts) 48%
46% 2 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, disposal activities and
discrete tax items.
Michael S. Geltzeiler, Group Executive Vice President and CFO,
NYSE Euronext commented, “In the second quarter, we continued to
deliver on our commitments to shareholders. Revenues year-to-date
are running 3% above prior year levels and fixed operating expenses
on a constant dollar/portfolio basis are running 4% below prior
year, despite increased costs accompanying higher technology
revenues. As a result of our strong free cash flow generation and
lower capital expenditures, we retired our outstanding commercial
paper which lowered our debt-to-EBITDA ratio to 1.7 times in the
second quarter. Our financial position continues to strengthen as
we move forward with the final phase of our combination with
Deutsche Boerse.”
SECOND QUARTER 2011 CONSOLIDATED
RESULTS
Total revenues, less transaction-based expenses, which include
Section 31 fees, liquidity payments and routing and clearing fees
(net revenue), was $661 million in the second quarter of 2011, up
$7 million, or 1% compared to the second quarter of 2010 and
included a $33 million positive impact from currency fluctuations.
The $7 million increase in net revenue compared to the second
quarter of 2010 was driven by a $30 million increase in non-trading
revenue which more than offset a $23 million decrease in net
trading revenues, driven primarily by declines in European
derivatives and U.S. cash equity average daily trading volume
(“ADV”). Second quarter of 2010 ADV across all venues was marked by
unseasonally strong trading volumes due to heightened market
volatility driven by the advent of the sovereign debt crisis in
Europe and the flash crash in the United States.
Other operating expenses, which exclude merger expenses and exit
costs, were $419 million in the second quarter of 2011, up $12
million, or 3% compared to the second quarter of 2010. Excluding
the impact of acquisitions, new initiatives and a $17 million
negative impact attributable to foreign currency fluctuations,
fixed operating expenses were down $14 million, or 3%, compared to
the second quarter of 2010.
Operating income, excluding merger expenses and exit costs, was
$242 million, down $5 million, or 2% compared to the second quarter
of 2010 and included a $16 million positive impact attributable to
foreign currency fluctuations.
Adjusted EBITDA, which excludes merger expenses and exit costs,
was $312 million, in-line with the second quarter of 2010. Adjusted
EBITDA margin was 47% in the second quarter of 2011, compared to
48% in the second quarter of 2010.
Non-operating income for the second quarter of 2011 and 2010
includes the impact of the New York Portfolio Clearing (loss/income
from associates) and NYSE Liffe U.S. (net loss/income attributable
to non-controlling interest) initiatives which are currently in a
loss position, but are moving toward profitability as trading
volumes and open interest continue to grow. Non-operating income in
the second quarter of 2010 includes a net pre-tax gain of $54
million related to disposal activities, primarily in connection
with the sale of our 5% stake in the National Stock Exchange of
India (other income). With the closing of the sale of stakes in the
NYSE Amex Options business, beginning with the third quarter of
2011, profits generated by NYSE Amex Options will be shared with
our partners (net loss/income attributable to non-controlling
interest). Had the sale closed on April 1, 2011, diluted earnings
per share would have decreased by $0.02 in the second quarter of
2011.
For the second quarter of 2011, the effective tax rate,
excluding merger expenses, exit costs, disposal activities and
discrete tax items, was approximately 26% compared to 27% in the
second quarter of 2010.
The weighted average diluted shares outstanding in the second
quarter of 2011 was 263 million, up from 261 million shares in the
second quarter of 2010. Approximately 0.3 million shares were
issued in the second quarter of 2011 to former Amex members in
connection with the sale of the former American Stock Exchange
headquarters.
At June 30, 2011, total debt of $2.2 billion was $0.2 million
below December 31, 2010 levels driven by the elimination of $0.2
billion in commercial paper during the second quarter of 2011.
Cash, cash equivalents, investments and other securities (including
$172 million related to Section 31 fees collected from market
participants and due to the SEC) was $0.4 billion and net debt was
$1.8 billion at the end of the second quarter 2011.
The ratio of debt-to-EBITDA in the second quarter of 2011
declined to 1.7 times, the lowest level since the establishment of
NYSE Euronext in April 2007.
Total capital expenditures in the second quarter of 2011 were
$31 million, compared to $70 million in the second quarter of 2010.
Through the first-half of 2011, capital expenditures were $67
million consistent with full-year 2011 guidance of capital
expenditures of less than $200 million.
Headcount as of June 30, 2011 was 2,988, down 1% from March 31,
2011 and down slightly from June 30, 2010 levels despite several
acquisitions.
The Board of Directors declared a cash dividend of $0.30 per
share for the third quarter of 2011. The third quarter 2011
dividend is payable September 30, 2011 to shareholders of record as
of the close of business on September 15, 2011. The anticipated
ex-date will be September 13, 2011.
SECOND QUARTER 2011 SEGMENT
RESULTS
Below is a summary of business segment results:
Derivatives Cash Trading
& Listings Info. Svcs. & Tech. Solutions
($ in millions) Net
Operating Adjusted Net
Operating Adjusted
Operating Adjusted
Revenue1
Income2
EBITDA2
Revenue1
Income2
EBITDA2
Revenue
Income2
EBITDA2
2Q11 $213 $112 $126 $327
$128 $174 $122 $36 $46
1Q11 $236 $146 $161 $328
$125 $171 $116 $28 $37
2Q10 $226 $140
$153 $321 $126
$171 $107 $20 $28
1 Net revenue defined as total revenue less transaction-based
expenses including Section 31 fees, liquidity payments and routing
& clearing fees.
2 Excludes merger expenses and exit costs.
DERIVATIVES
Derivatives net revenue of $213 million in the second quarter of
2011 decreased $13 million, or 6% compared to the second quarter of
2010 and included a $15 million positive impact from currency
fluctuations. The $13 million decrease in Derivatives net revenue
compared to the second quarter of 2010, was driven by a $13
million, or 8% decrease in European derivatives net trading revenue
on a 20% decline in ADV.
- Global Derivatives ADV in the second
quarter of 2011 was 9.4 million contracts, a decrease of 12%
compared to the second quarter of 2010 which benefited from
heightened market volatility driven by the advent of the sovereign
debt crisis in Europe.
- NYSE Euronext European derivatives
products ADV in the second quarter of 2011 of 5.3 million contracts
decreased 20% compared to the second quarter of 2010, but increased
14% from first quarter 2011 levels.
- NYSE Liffe U.S., the U.S. futures
exchange of NYSE Euronext, reached several key milestones in
customer participation with total open interest surpassing 750,000
contracts and approaching 800,000. In the four months since the
launch Eurodollar and U.S. Treasury futures on the exchange, open
interest in these two new products is just under 675,000 with more
than 6 million total contracts traded. The level of volume, open
interest and liquidity is evidence of the rapid acceptance of NYSE
Liffe U.S. by customers. Also during the second quarter, NYSE Liffe
U.S. successfully migrated futures contracts based on the
international flagship MSCI Emerging Markets and MSCI EAFE indices
from the Chicago Mercantile Exchange.
- NYSE Euronext completed the sale of a
52.8% equity interest in NYSE Amex Options to seven leading order
flow providers and market making firms: Bank of America Merrill
Lynch, Barclays Capital, Citadel Securities, Citi, Goldman Sachs,
TD Ameritrade and UBS AG. NYSE Euronext will remain the largest
single shareholder in the entity which will be supervised by a
separate board of directors.
- NYSE Euronext’s U.S. equity options
exchanges accounted for 26% of total consolidated U.S. equity
options trading in the second quarter of 2011, in-line with the
second quarter of 2010.
CASH TRADING AND LISTINGS
Cash Trading and Listings net revenue of $327 million in the
second quarter of 2011 increased $6 million, or 2% compared to the
second quarter of 2010 and included a $13 million positive impact
from currency fluctuations. The $6 million increase in net revenue
compared to the second quarter of 2010, was primarily driven by a
$14 million increase in non-trading related revenue, principally
listings and other revenue which more than offset a decline in net
trading revenue. The decline in net trading revenue was primarily
driven by a 36% decrease in U.S. cash equities ADV, partially
offset by a 32% increase in average net revenue per 100 shares
handled due to higher fees and favorable business mix.
- European cash ADV of 1.5 million
transactions in the second quarter of 2011 decreased 11% from 1.7
million transactions in the second quarter of 2010. European cash
market share (value traded) in NYSE Euronext’s four core markets
was 71% in the second quarter of 2011, down from 74% in the second
quarter of 2010, but up from 70% in the first quarter of 2011. In
the U.S., cash trading ADV declined 36% to 2.1 billion shares
traded from 3.2 billion in the second quarter of 2010. Tape A
matched market share was 35% in the second quarter of 2011, down
from 37% in the second quarter of 2010, but up slightly from first
quarter of 2011 levels.
- NYSE Euronext led the global market for
listing initial public offerings (IPOs) in the first half of 2011
with $25.4 billion in total capital raised on its European and U.S.
markets, more than any exchange group in the world. During the most
recent quarter, the New York Stock Exchange (NYSE) led the U.S. IPO
market, with 35 IPOs raising $10.6 billion, or 73% of total
proceeds raised from IPOs in the U.S.
- NYSE has steadily captured share in
technology-based IPOs with its commitment to partner with
growth companies. NYSE has listed 17 out of 31, or 55% of the tech
IPOs YTD, up from 44% in 2010. LinkedIn, Active Network, Fusion-io
and Pandora’s offerings came amid a recent fervor for high-profile
tech IPOs.
- The NYSE has welcomed 6 transfers from
Nasdaq with total market capitalization of $6.3 billion thus far in
2011, and lost none. SuccessFactors Inc. was the most recent
transfer from Nasdaq to the NYSE and cross-listed on the European
markets of NYSE Euronext. This follows the recent trend for
transfers, with 40 companies having transferred to the NYSE from
Nasdaq since 2007.
INFORMATION SERVICES AND TECHNOLOGY SOLUTIONS
Information Services and Technology Solutions revenue was $122
million in the second quarter of 2011, an increase of $15 million,
or 14% compared to the second quarter of 2010 and included a $5
million positive impact from currency fluctuations. The $15 million
increase in revenue compared to the second quarter of 2010, was
primarily driven by an increase in infrastructure revenue,
principally SFTI and data center fees.
- The Information Services and Technology
Solutions segment achieved its highest level of quarterly revenue
generation with an operating margin of 30% as the sales pipeline
continues to build.
- NYSE Technologies launched the
financial services industry’s first cloud platform, the Capital
Markets Community Platform. Designed to increase business agility,
simplify market access and reduce trading friction by utilizing
rapid on-demand computing resources, this enterprise-level platform
was developed in partnership with cloud computing experts VMware
(NYSE: VMW) and EMC (NYSE: EMC) to address the unique performance
and security requirements of financial services firms. The Capital
Markets Community Platform will offer a range of cloud-based
services that enable customers to easily purchase the computing
power required at a given time so they can focus on their core
business strategy rather than complex IT infrastructure design and
maintenance.
- NYSE Technologies was named the “Best
Data Provider” among global securities exchanges by Inside Market
Data. This recognition was awarded at the 2011 Inside Market Data
and Inside Reference Data Awards ceremony recently in New York. The
acknowledgement of NYSE Technologies as a leading innovator and
comprehensive data provider was determined by an online poll of
buy-side and sell-side professionals as well as investors at
financial institutions and securities firms globally.
The accompanying tables include information integral to
assessing the Company’s financial performance.
Analyst/Investor/Media Call: August 2,
2011 at 8:00 a.m. (NY/EDT)/2:00 p.m. (Paris/CEST)
A presentation and live audio webcast of the second quarter 2011
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: 866.713.8310
International: 617.597.5308
Passcode: 62542406
Replay Dial-in Information:
United States: 888.286.8010
International: 617.801.6888
Passcode: 16712451
Non-GAAP Financial Measures
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 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.
About NYSE Euronext
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 Amex, 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, and is the
only exchange operator in the Fortune 500. For more information,
please visit: http://www.nyx.com.
Safe Harbour Statement
In connection with the proposed business combination transaction
between NYSE Euronext and Deutsche Boerse AG, Alpha Beta
Netherlands Holding N.V. (“Holding”), a newly formed holding
company, filed, and the SEC declared effective on May 3, 2011, a
Registration Statement on Form F-4 with the U.S. Securities and
Exchange Commission (“SEC”) that includes (1) a proxy statement of
NYSE Euronext that also constitutes a prospectus for Holding used
in connection with NYSE Euronext special meeting of stockholders
held on July 7, 2011 and (2) an offering prospectus used in
connection with Holding’s offer to acquire Deutsche Boerse AG
shares held by U.S. holders. Holding has also filed an offer
document with the German Federal Financial Supervisory Authority
(Bundesanstalt fuer Finanzdienstleistungsaufsicht) (“BaFin”), which
was approved by the BaFin for publication pursuant to the German
Takeover Act (Wertpapiererwerbs-und Übernahmegesetz), and was
published on May 4, 2011.
Investors and security holders are urged to read the definitive
proxy statement/prospectus, the offering prospectus, the offer
document, as amended, and published additional accompanying
information in connection with the exchange offer regarding the
proposed business combination transaction because they contain
important information. You may obtain a free copy of the definitive
proxy statement/prospectus, the offering prospectus and other
related documents filed by NYSE Euronext and Holding with the SEC
on the SEC’s website at www.sec.gov. The definitive proxy
statement/prospectus and other documents relating thereto may also
be obtained for free by accessing NYSE Euronext’s website at
www.nyse.com. The offer document, as amended, and published
additional accompanying information in connection with the exchange
offer are available at Holding’s website at
www.global-exchange-operator.com.
This document is neither an offer to purchase nor a solicitation
of an offer to sell shares of Holding, Deutsche Boerse AG or NYSE
Euronext. The final terms and further provisions regarding the
public offer are disclosed in the offer document that has been
approved by the BaFin and in documents that have been filed with
the SEC.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended, and applicable European
regulations. The exchange offer and the exchange offer document as
amended, shall not constitute an issuance, publication or public
advertising of an offer pursuant to laws and regulations of
jurisdictions other than those of Germany, United Kingdom of Great
Britain and Northern Ireland and the United States of America. The
relevant final terms of the proposed business combination
transaction will be disclosed in the information documents reviewed
by the competent European market authorities.
Subject to certain exceptions, in particular with respect to
qualified institutional investors (tekikaku kikan toshika) as
defined in Article 2 para. 3 (i) of the Financial Instruments and
Exchange Act of Japan (Law No. 25 of 1948, as amended), the
exchange offer will not be made directly or indirectly in or into
Japan, or by use of the mails or by any means or instrumentality
(including without limitation, facsimile transmission, telephone
and the internet) of interstate or foreign commerce or any facility
of a national securities exchange of Japan. Accordingly, copies of
this announcement or any accompanying documents may not be,
directly or indirectly, mailed or otherwise distributed, forwarded
or transmitted in, into or from Japan.
The shares of Holding have not been, and will not be, registered
under the applicable securities laws of Japan. Accordingly, subject
to certain exceptions, in particular with respect to qualified
institutional investors (tekikaku kikan toshika) as defined in
Article 2 para. 3 (i) of the Financial Instruments and Exchange Act
of Japan (Law No. 25 of 1948, as amended), the shares of Holding
may not be offered or sold within Japan, or to or for the account
or benefit of any person in Japan.
Forward-Looking Statements
This document includes forward-looking statements about NYSE
Euronext, Deutsche Boerse AG, Holding, the enlarged group and other
persons, which may include statements about the proposed business
combination, the likelihood that such transaction could be
consummated, the effects of any transaction on the businesses of
NYSE Euronext or Deutsche Boerse AG, and other statements that are
not historical facts. By their nature, forward-looking statements
involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future performance
and actual results of operations, financial condition and
liquidity, and the development of the industries in which NYSE
Euronext and Deutsche Boerse AG operate may differ materially from
those made in or suggested by the forward-looking statements
contained in this document. Any forward-looking statements speak
only as at the date of this document. Except as required by
applicable law, none of NYSE Euronext, Deutsche Boerse AG or
Holding undertakes any obligation to update or revise publicly any
forward-looking statement, whether as a result of new information,
future events or otherwise.
NYSE Euronext Condensed consolidated statements of income
(unaudited) (in millions, except per share data)
Three months ended Six months ended June 30, June 30, 2011
March 31, 2011 June 30, 2010 2011 2010
Revenues Transaction and clearing fees $ 742 $ 815 $ 927 $ 1,557 $
1,689 Market data 92 96 93 188 184 Listing 112 109 105 221 210
Technology services 89 82 75 171 154 Other revenues
57 46
47 103
93 Total revenues 1,092 1,148 1,247 2,240 2,330
Transaction-based expenses: Section 31 fees 89 89 99 178 162
Liquidity payments, routing and clearing
342
380 494
722 869
Total revenues, less transaction-based expenses
661 679
654 1,340
1,299 Other operating expenses Compensation 158
161 160 319 332 Depreciation and amortization 70 70 66 140 132
Systems and communications 45 52 47 97 99 Professional services 73
69 66 142 124 Selling, general and administrative 73 63 68 136 147
Merger expenses and exit costs
18
21 32
39 45 Total other
operating expenses
437
436 439
873 879
Operating income 224 243 215 467 420 Net interest and investment
income (loss) (30 ) (29 ) (25 ) (59 ) (52 ) Loss from associates (2
) (1 ) (1 ) (3 ) (3 ) Other income
1
-
56 1
53 Income before income taxes 193
213 245 406 418 Income tax provision
(43
) (62 )
(66 ) (105
) (114 ) Net income
150 151 179 301 304 Net loss attributable to noncontrolling
interest 4 4 5 8
10 Net income attributable to NYSE Euronext $
154 $ 155 $ 184 $ 309 $ 314
Basic earnings per share attributable to NYSE Euronext $
0.59 $ 0.59 $ 0.70 $ 1.18 $ 1.20 Diluted earnings per share
attributable to NYSE Euronext $ 0.59 $ 0.59 $ 0.70 $ 1.17 $ 1.20
Basic weighted average shares outstanding 262 261 261 262
261 Diluted weighted average shares outstanding 263
262 261 263
261
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 June 30,
Non-GAAP
Reconciliation
June 30, 2011 March 31, 2011 June 30, 2010 2011
2010 Income before income taxes - GAAP $ 193 $ 213 $
245 $ 406 $ 418 Excluding: Net gain on disposal activities - - (54
) - (54 ) Merger expenses and exit costs
18
21 32
39 45 Income
before income taxes - as adjusted 211 234 223 445 409 Income tax
provision
(55 )
(61 ) (61
) (116 )
(112 ) Net income - as adjusted 156 173
162 329 297 Net loss attributable to noncontrolling interest
4 4
5 8
10 Net income attributable to NYSE Euronext -
as adjusted $ 160 $ 177 $ 167 $ 337 $
307 Diluted earnings per share attributable to NYSE
Euronext - as adjusted $ 0.61 $ 0.68 $ 0.64 $
1.28 $ 1.18 NYSE Euronext Segment Results
(unaudited) (in millions)
Three months ended
Three months ended June 30, 2011 June 30, 2010 Derivatives
Cash Tradingand Listings
InformationServices
andTechnologySolutions
CorporateandEliminations
Consolidated Derivatives
Cash Tradingand Listings
InformationServices
andTechnologySolutions
CorporateandEliminations
Consolidated Revenues Transaction and clearing fees $
251 $ 491 $ - $ - $ 742 $ 282 $ 645 $ - $ - $ 927 Market data 12 48
32 - 92 12 49 32 - 93 Listing - 112 - - 112 - 105 - - 105
Technology services - - 90 (1 ) 89 - - 75 - 75 Other revenues
13 44 - -
57 11 36 -
- 47 Total revenues 276 695 122 (1 )
1,092 305 835 107 - 1,247 Transaction-based expenses: Section 31
fees - 89 - - 89 - 99 -
- 99 Liquidity payments, routing and clearing 63
279 - - 342
79 415 - -
494 Total revenues, less transaction-based expenses
213 327 122 (1 ) 661 226 321 107 - 654 Depreciation and
amortization [a] 14 46 10 - 70 13 45 8 - 66 Merger expenses and
exit costs (M&E) [b] 1 2 1 14 18 5 19 8 - 32 Other operating
expenses 87 153 76
33 349 73 150
79 39 341 Operating
income - GAAP [c] $ 111 $ 126 $ 35 $ (48 ) $
224 $ 135 $ 107 $ 12 $ (39 ) $ 215
Operating income excluding M&E [c] + [b] $ 112 $
128 $ 36 $ (34 ) $ 242 $ 140 $ 126
$ 20 $ (39 ) $ 247 Adjusted EBITDA [c] + [a] +
[b] $ 126 $ 174 $ 46 $
(34 ) $ 312 $ 153 $ 171 $
28 $ (39 ) $ 313 Operating
margin excluding M&E 53 % 39 % 30 % N/M 37 % 62 % 39 % 19 % N/M
38 % Adjusted EBITDA margin 59 % 53 % 38 % N/M 47 % 68 % 53 % 26 %
N/M 48 %
Six months ended Six months ended June 30, 2011 June
30, 2010 Derivatives
Cash Tradingand Listings
InformationServices
andTechnologySolutions
CorporateandEliminations
Consolidated Derivatives
Cash Tradingand Listings
InformationServices
andTechnologySolutions
Corporate andEliminations
Consolidated Revenues Transaction and clearing fees $ 537 $
1,020 $ - $ - $ 1,557 $ 560 $ 1,129 $ - $ - $ 1,689 Market data 24
98 66 - 188 24 97 63 - 184 Listing - 221 - - 221 - 210 - - 210
Technology services - - 172 (1 ) 171 - - 154 - 154 Other revenues
22 82 - (1 )
103 19 75 -
(1 ) 93 Total revenues 583 1,421 238 (2 )
2,240 603 1,511 217 (1 ) 2,330
Transaction-based expenses:
Section 31 fees - 178 - - 178 - 162 -
- 162 Liquidity payments, routing and clearing 134
588 - - 722
153 716 - -
869 Total revenues, less transaction-based expenses
449 655 238 (2 ) 1,340 450 633 217 (1 ) 1,299 Depreciation and
amortization [a] 29 92 19 - 140 28 88 16 - 132 Merger expenses and
exit costs (M&E) [b] 2 5 2 30 39 8 26 10 1 45 Other operating
expenses 162 310 155
67 694 152 313
164 73 702
Operating income - GAAP [c] $ 256 $ 248 $ 62 $
(99 ) $ 467 $ 262 $ 206 $ 27 $ (75 ) $
420 Operating income excluding M&E [c] + [b] $ 258
$ 253 $ 64 $ (69 ) $ 506 $ 270 $
232 $ 37 $ (74 ) $ 465 Adjusted EBITDA [c] +
[a] + [b] $ 287 $ 345 $ 83
$ (69 ) $ 646 $ 298 $ 320
$ 53 $ (74 ) $ 597
Operating margin excluding M&E 57 % 39 % 27 % N/M 38 % 60 % 37
% 17 % N/M 36 % Adjusted EBITDA margin 64 % 53 % 35 % N/M 48 % 66 %
51 % 24 % N/M 46 % N/M = Not meaningful 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. NYSE Euronext Fixed operating expenses (unaudited)
(in millions) Fixed operating expenses for the three
months ended June 30, 2011 - GAAP $ 437 Less: Merger expenses and
exit costs (18 ) $ 419 Excluding the impact of: Currency
translation (17 ) Acquisitions and new business initiatives (9 ) *
Fixed operating expenses for the three months ended June 30,
2011 - as adjusted $ 393 [a] Fixed operating expenses
for the three months ended June 30, 2010 - GAAP $ 439 Less: Merger
expenses and exit costs (32 ) $ 407 [b]
Variance ($) $ (14 ) [a] - [b] = [c] Variance (%) -3 % [c] /
[b] Fixed operating expenses for the six months ended June
30, 2011 - GAAP $ 873 Less: Merger expenses and exit costs
(39 ) $ 834 Excluding the impact of: Currency translation (19 )
Acquisitions and new business initiatives (13 ) * Fixed
operating expenses for the six months ended June 30, 2011 - as
adjusted $ 802 [a] Fixed operating expenses for the
six months ended June 30, 2010 - GAAP $ 879 Less: Merger expenses
and exit costs (45 ) $ 834 [b] Variance ($) $
(32 ) [a] - [b] = [c] Variance (%) -4 % [c] / [b] *
Includes the contribution of APX, Corporate Board Member and new
business initiatives.
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.
NYSE Euronext Condensed consolidated
statements of financial condition (unaudited) (in millions)
June 30,2011
December31, 2010
Assets Current assets: Cash, cash equivalents and short term
financial investments $ 385 $ 379 Accounts receivable, net 532 526
Deferred income taxes 74 120 Other current assets 212
149 Total current assets 1,203 1,174 Property and equipment,
net 998 1,021 Goodwill 4,232 4,050 Other intangible assets, net
6,139 5,837 Deferred income taxes 582 633 Other assets 662
663 Total assets $ 13,816 $ 13,378 Liabilities and
equity Accounts payable and accrued expenses $ 821 $ 910 Deferred
revenue 346 176 Short term debt - 366 Deferred income taxes
24 2 Total current liabilities 1,191 1,454 Long term
debt 2,189 2,074 Deferred income taxes 2,033 2,007 Accrued employee
benefits 453 499 Deferred revenue 387 366 Other liabilities
63 134 Total liabilities 6,316 6,534
Redeemable noncontrolling interest 272 -
Equity 7,228 6,844 Total liabilities and equity $
13,816 $ 13,378
NYSE
Euronext
Selected
Statistical Data:
Volume
Summary
Average Daily Volume
Total Volume Total Volume (Unaudited)
2Q11 1Q11
% ∆ 2Q11vs.
1Q11
2Q10
% ∆ 2Q11vs.
2Q10
2Q11 1Q11
% ∆ 2Q11vs.
1Q11
2Q10
% ∆ 2Q11vs.
2Q10
YTD 2011 YTD 2010
% ∆ Number of Trading Days - European
Markets 63 64 63 63 64 63 127 126 Number of Trading Days - U.S.
Markets 63 62 63 63 62 63 125 124
European Derivatives
Products (contracts in thousands) 5,294 4,633
14.3 % 6,628 -20.1 %
333,522 296,529 12.5 % 417,597
-20.1 % 630,051 723,205 -12.9
% of which Bclear 2,125 771 175.7 % 2,651 -19.8 % 133,874
49,335 171.4 % 167,029 -19.8 % 183,210 228,263 -19.7 % Avg. Net
Rate Per Contract (ex. Bclear) $ 0.741 $ 0.692 7.1 % $ 0.643 15.2 %
$ 0.741 $ 0.692 7.1 % $ 0.643 15.2 % Avg. Net Rate Per Contract
(ex. Bclear) - Currency Neutral $ 0.741 $ 0.705 5.1 % $ 0.703 5.4 %
$ 0.741 $ 0.705 5.1 % $ 0.703 5.4 %
Total Interest Rate
Products1 2,147 2,700 -20.5
% 2,668 -19.5 % 135,231
172,792 -21.7 % 168,095 -19.6
% 308,023 338,916 -9.1 %
Short Term Interest Rate Products 2,006 2,568 -21.9 % 2,546 -21.2 %
126,347 164,371 -23.1 % 160,423 -21.2 % 290,718 323,841 -10.2 %
Medium and Long Term Interest Rate Products 141 132 7.2 % 122 15.8
% 8,884 8,421 5.5 % 7,672 15.8 % 17,305 15,075 14.8 %
Total Equity Products2 3,063 1,845
66.0 % 3,905 -21.6 %
192,980 118,110 63.4 % 246,021
-21.6 % 311,090 377,535 -17.6
% Individual Equity Products 2,535 1,266 100.3 %
3,197 -20.7 % 159,703 81,011 97.1 % 201,434 -20.7 % 240,714 293,777
-18.1 % Futures 1,984 575 245.2 % 2,402 -17.4 % 124,971 36,777
239.8 % 151,304 -17.4 % 161,748 197,016 -17.9 % Options 551 691
-20.2 % 796 -30.7 % 34,731 44,234 -21.5 % 50,130 -30.7 % 78,965
96,760 -18.4 % Equity Index Products 528 580 -8.9 % 708 -25.4 %
33,277 37,100 -10.3 % 44,587 -25.4 % 70,376 83,758 -16.0 %
of which Bclear 2,125 771 175.7 % 2,651 -19.8 % 133,874 49,335
171.4 % 167,029 -19.8 % 183,210 228,263 -19.7 % Individual Equity
Products 2,053 690 197.6 % 2,551 -19.5 % 129,324 44,152 192.9 %
160,737 -19.5 % 173,476 214,371 -19.1 % Futures 1,959 569 244.1 %
2,400 -18.4 % 123,429 36,437 238.7 % 151,223 -18.4 % 159,866
196,877 -18.8 % Options 94 121 -22.4 % 151 -38.0 % 5,895 7,715
-23.6 % 9,514 -38.0 % 13,610 17,495 -22.2 % Equity Index Products
72 81 -10.8 % 100 -27.7 % 4,551 5,183 -12.2 % 6,292 -27.7 % 9,734
13,892 -29.9 %
Commodity Products 84 88
-4.1 % 55 52.6 % 5,312
5,627 -5.6 % 3,481 52.6 %
10,938 6,754 62.0 % U.S.
Derivatives Products - Equity Options 3 (contracts in
thousands) Options Contracts 4,052 4,410 -8.1 % 4,077
-0.6 % 255,306 273,432 -6.6 % 256,820 -0.6 % 528,738 483,310 9.4 %
Avg. Net Rate Per Contract $ 0.165 $ 0.165 0.0 % $ 0.164 0.6 % $
0.165 $ 0.165 0.0 % $ 0.164 0.6 % Total Consolidated Options
Contracts 15,759 17,306 -8.9 % 15,722 0.2 % 992,810 1,072,961 -7.5
% 990,509 0.2 % 2,065,771 1,843,013 12.1 % Share of Total
Consolidated Options Contracts 25.7 % 25.5 % 25.9 % 25.7 % 25.5 %
25.9 % 25.6 % 26.2 %
NYSE Liffe U.S. Futures
and Futures Options Volume* 93.4 21.0 344.8 % 18.6 403.2 % 5,980.7
1,344.5 344.8 % 1,170.0 411.2 % 7,325.2 2,437.7 200.5 %
European Cash Products (trades in thousands) 1,540
1,803 -14.6 % 1,722 -10.6
% 96,999 115,377 -15.9 %
108,485 -10.6 % 212,376 194,709
9.1 % Avg. Net Revenue Per Transaction $ 0.742 $
0.667 11.2 % $ 0.654 13.5 % $ 0.742 $ 0.667 11.2 % $ 0.654 13.5 %
Avg. Net Revenue Per Transaction - Currency Neutral $ 0.742 $ 0.702
5.7 % $ 0.742 0.0 % $ 0.742 $ 0.702 5.7 % $ 0.742 0.0 %
Equities 1,482 1,732 -14.4 % 1,654 -10.4 % 93,350 110,841 -15.8 %
104,207 -10.4 % 204,191 186,904 9.2 % Exchange-Traded Funds 16 21
-20.4 % 22 -25.6 % 1,032 1,316 -21.6 % 1,361 -24.2 % 2,348 2,373
-1.1 % Structured Products 36 45 -18.8 % 40 -8.8 % 2,298 2,873
-20.0 % 2,532 -9.3 % 5,171 4,647 11.3 % Bonds 5 5 -6.6 % 6 -15.5 %
319 347 -8.1 % 385 -17.0 % 667 785 -15.0 %
U.S. Cash
Products (shares in millions) 2,075 2,309
-10.2 % 3,220 -35.6 %
130,722 143,183 -8.7 % 202,510
-35.4 % 273,905 357,865 -23.5
% Avg. Net Fee Per 100 Shares Handled $ 0.0390 $ 0.0370 5.4
% $ 0.0296 31.8 % $ 0.0390 $ 0.0370 5.4 % $ 0.0296 31.8 %
NYSE Listed (Tape A) Issues 4 Handled Volume 5
1,461 1,668 -12.4 % 2,372 -38.4 % 92,068 103,397 -11.0 % 149,467
-38.4 % 195,465 260,716 -25.0 % Matched Volume 6 1,384 1,578 -12.2
% 2,225 -37.8 % 87,216 97,806 -10.8 % 140,160 -37.8 % 185,021
243,355 -24.0 % Total NYSE Listed Consolidated Volume 3,935 4,568
-13.9 % 6,025 -34.7 % 247,909 283,211 -12.5 % 379,565 -34.7 %
531,121 676,383 -21.5 %
Share of Total Consolidated
Volume Handled Volume 5 37.1 % 36.5 % 0.6 % 39.4 % -2.3 % 37.1
% 36.5 % 0.6 % 39.4 % -2.3 % 36.8 % 38.5 % -1.7 % Matched Volume 6
35.2 % 34.5 % 0.7 % 36.9 % -1.7 % 35.2 % 34.5 % 0.7 % 36.9 % -1.7 %
34.8 % 36.0 % -1.1 %
NYSE Arca & Amex (Tape B) Listed
Issues Handled Volume 5 334 347 -3.6 % 483 -30.9 %
21,061 21,491 -2.0 % 30,460 -30.9 % 42,552 53,720 -20.8 % Matched
Volume 6 301 311 -3.1 % 434 -30.6 % 18,976 19,270 -1.5 % 27,327
-30.6 % 38,246 47,906 -20.2 % Total NYSE Arca & Amex Listed
Consolidated Volume 1,287 1,351 -4.7 % 1,842 -30.1 % 81,111 83,751
-3.2 % 116,057 -30.1 % 164,862 205,709 -19.9 %
Share of
Total NYSE Arca & NYSE Amex Listed Consolidated Volume
Handled Volume 5 26.0 % 25.7 % 75.8 % 26.2 % -0.2 % 26.0 % 25.7 %
0.3 % 26.2 % -0.2 % 25.8 % 26.1 % -0.3 % Matched Volume 6 23.4 %
23.0 % 65.8 % 23.5 % -0.1 % 23.4 % 23.0 % 0.4 % 23.5 % -0.1 % 23.2
% 23.3 % -0.1 %
Nasdaq Listed Issues (Tape C)
Handled Volume 5 279 295 -5.4 % 364 -23.3 % 17,593 18,295 -3.8 %
22,945 -23.3 % 35,888 43,428 -17.4 % Matched Volume 6 237 251 -5.7
% 307 -22.8 % 14,924 15,572 -4.2 % 19,337 -22.8 % 30,495 36,088
-15.5 % Total Nasdaq Listed Consolidated Volume 1,996 2,051 -2.7 %
2,529 -21.1 % 125,745 127,166 -1.1 % 159,309 -21.1 % 252,911
301,991 -16.3 %
Share of Total Nasdaq Listed Consolidated
Volume Handled Volume 5 14.0 % 14.4 % -0.4 % 14.4 % -0.4 % 14.0
% 14.4 % -0.4 % 14.4 % -0.4 % 14.2 % 14.4 % -0.2 % Matched Volume 6
11.9 % 12.2 % -0.3 % 12.1 % -0.2 % 11.9 % 12.2 % -0.3 % 12.1 % -0.2
% 12.1 % 11.9 % 0.2 %
Exchange-Traded Funds
5,7 Handled Volume 5 308 315 -2.5 % 465 -33.9 %
19,377 19,557 -0.9 % 29,317 -33.9 % 38,935 51,573 -24.5 % Matched
Volume 6 276 283 -2.4 % 418 -34.0 % 17,406 17,543 -0.8 % 26,361
-34.0 % 34,948 46,135 -24.2 % Total ETF Consolidated Volume 1,206
1,245 -3.2 % 1,826 -34.0 % 75,959 77,213 -1.6 % 115,020 -34.0 %
153,172 203,037 -24.6 %
Share of Total ETF Consolidated
Volume Handled Volume 5 25.5 % 25.3 % 0.2 % 25.5 % 0.0 % 25.5 %
25.3 % 0.2 % 25.5 % 0.0 % 25.4 % 25.4 % 0.0 % Matched Volume 6 22.9
% 22.7 % 0.2 % 22.9 % 0.0 % 22.9 % 22.7 % 0.2 % 22.9 % 0.0 % 22.8 %
22.7 % 0.1 % 1 Data includes currency products.
2
Includes all trading activities for Bclear, NYSE Liffe's clearing
service for wholesale derivatives. 3 Includes trading in U.S.
equity options contracts, not equity-index options. 4 Includes all
volume executed in NYSE Group crossing sessions. 5 Represents the
total number of shares of equity securities and ETFs internally
matched on the NYSE Group's exchanges or routed to and executed at
an external market center. NYSE Arca routing includes odd-lots. 6
Represents the total number of shares of equity securities and ETFs
executed on the NYSE Group's exchanges. 7 Data included in
previously identified categories. * Includes trading from Interest
rate futures over NYSE Liffe U.S. for 9 trading days in 1Q11. 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.
NYSE
Euronext
Selected
Statistical Data:
Other Operating
Statistics
Three Months Ended (Unaudited)
June 30, 2011 March 31,
2011 June 30, 2010 NYSE
Euronext Listed Issuers NYSE Listed Issuers
Issuers listed on U.S. Markets1 2,956 2,952 2,934 Number of
new issuer listings1 155 104 76 Capital raised in connection with
new listings ($millions)2 $ 11,709 $ 12,446 $ 3,575
Euronext Listed Issuers Issuers listed on Euronext1
964 974 1,013 Number of new issuer listings3 20 10 21 Capital
raised in connection with new listings ($millions)2 $ 72 $ 29 $ 81
NYSE Euronext Market Data NYSE
Market Data4 Share of Tape A revenues (%) 45.8 %
47.6 % 47.7 % Share of Tape B revenues (%) 30.2 % 31.1 % 33.4 %
Share of Tape C revenues (%) 18.4 % 19.7 % 18.8 % Professional
subscribers (Tape A) 383,606 374,285 382,133
Euronext
Market Data Number of terminals 231,544 233,289 239,919
NYSE Euronext Operating Expenses
NYSE Euronext employee headcount NYSE Euronext
headcount 2,988 3,028 2,993
NYSE Euronext
Financial Statistics NYSE Euronext foreign exchange
rate Average €/US$ exchange rate $ 1.439 $ 1.368 $ 1.274
Average £/US$ exchange rate $ 1.631 $ 1.602 $ 1.492 1
Figures for NYSE listed issuers include listed operating companies,
special-purpose acquisition companies and closed-end funds listed
on the NYSE and NYSE Amex and do not include NYSE Arca or
structured products listed on the NYSE. There were 1,291 ETFs and 2
operating companies exclusively listed on NYSE Arca as of June 30,
2011. There were 471 corporate structured products listed on the
NYSE as of June 30, 2011.
Figures for new issuer listings include
NYSE new listings (including new operating companies,
special-purpose acquisition companies and closed-end funds listing
on NYSE) and new ETP listings on NYSE Arca (NYSE Amex is excluded).
Figures for Euronext present the operating companies were listed on
Euronext and do not include NYSE Alternext, Free Market, closed-end
funds, ETFs and structured product (warrants and certificates). As
of June 30, 2011, 169 companies were listed on NYSE Alternext, 269
on Free Market and 661 ETFs were 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 (warrants 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
(warrants and certificates). 4 "Tape A" represents NYSE
listed securities, "Tape B" represents NYSE Arca and NYSE Amex
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 was derived based on number of trades
reported to the consolidated tape, and share of revenue for Tape C
was 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. Source: NYSE Euronext, Options Clearing
Corporation and Consolidated Tape as reported for equity
securities.
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