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
$0.51 per diluted share, in the second quarter of 2012.
“We continue to execute solidly against our business plan as we
build momentum toward closing the ICE deal,” said Duncan L.
Niederauer, CEO, NYSE Euronext. “We successfully transitioned our
London-based derivatives market to ICE Clear Europe and were ranked
number one year-to-date in capital raising with our market share in
technology listings increasing to 64%. The strength of our listings
franchise continues to build and we are very pleased to welcome
Oracle to the NYSE today to close the market. We were also
appointed the administrator for LIBOR. Turning to our transaction
with ICE, we are gratified that our shareholders and the European
Commission have approved the transaction and we are working with
the College of Regulators in Europe and other regulators to obtain
all the appropriate remaining approvals.”
The table below summarizes the financial results1 for the second
quarter of 2013:
% Δ 2Q13
Year-to-Date % Δ YTD '13 ($ 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
Expenses3 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 Share5
$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
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, 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.”
SECOND QUARTER 2013 CONSOLIDATED
RESULTS
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 $0.30 per
share for the third quarter of 2013 with a record date of September
16, 2013 and a payment date of September 30, 2013. The anticipated
ex-date will be September 12, 2013. However, the third quarter 2013
dividend is payable on the payment date only if the ICE transaction
has not been completed as of the record date.
SECOND QUARTER 2013 SEGMENT
RESULTS
Below is a summary of business segment results:
Derivatives
Cash Trading & Listings Info. Svcs.
& Tech. Solutions ($ in millions)
Net Operating Adjusted
Net Operating Adjusted
Operating Adjusted
Revenue1 Income2
EBITDA2 Revenue1
Income2 EBITDA2
Revenue Income2
EBITDA2 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 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
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.
- NYSE Euronext European derivatives
products ADV of 4.0 million contracts in the second quarter of 2013
decreased 13% compared to the second quarter of 2012 and decreased
10% from first quarter of 2013 levels. Excluding Bclear, European
derivatives products ADV in the second quarter of 2013 increased
13% compared to the second quarter of 2012, but decreased 9% from
the first quarter of 2013.
- U.S. equity options ADV in the second
quarter of 2013 increased 12% to 4.4 million contracts compared to
the second quarter of 2012 and increased 3% from the first quarter
of 2013. U.S. consolidated equity options ADV of 15.9 million
contracts increased 7% compared to the second quarter of 2012 and
increased 6% from the first quarter of 2013. NYSE Euronext’s U.S.
equity options exchanges accounted for 28% of total consolidated
U.S. equity options trading in the second quarter of 2013, up from
26% in the second quarter of 2012, and in-line with the first
quarter of 2013.
- NYSE Liffe and ICE Clear Europe, a
wholly-owned subsidiary of IntercontinentalExchange, completed the
clearing transition for the London-based derivatives market of NYSE
Liffe to ICE Clear Europe. The clearing transition involved 43
member firms with 75 million contract sides being transferred to
ICE Clear Europe along with $11.2 billion margin held at the
clearing house on the morning of July 1, 2013. The combined
guaranty fund for ICE Energy and NYSE Liffe Futures and Options is
set at $1.2 billion from July 1, 2013. In addition, the migration
covered over 1,300 products across bond, commodity, equity, index
and interest rate derivatives and ten new settlement currencies for
ICE Clear Europe.
- NYSE Euronext Rate Administration
Limited, a subsidiary of NYSE Euronext, announced that following a
rigorous selection process conducted by the independent Hogg
Tendering Advisory Committee, NYSE Euronext Rate Administration
Limited has been appointed as the new administrator for LIBOR. The
transfer of the administration from BBA LIBOR Ltd, the subsidiary
of the British Bankers’ Association is expected to be completed in
early 2014, once the Financial Conduct Authority’s authorization of
NYSE Euronext Rate Administration Limited is complete.
CASH TRADING AND
LISTINGS
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:
- European cash ADV of 1.5 million
transactions in the second quarter of 2013 decreased 14% from 1.7
million transactions in the second quarter of 2012, but increased
7% from first quarter of 2013 levels. European cash market share
(value traded) in NYSE Euronext’s four core markets was 67% in the
second quarter of 2013, up from 66% in the second quarter of 2012
and up from 65% in the first quarter of 2013.
- In the U.S., cash trading ADV in the
second quarter of 2013 decreased 11% to 1.6 billion shares from 1.8
billion shares in the second quarter of 2012, but increased 5% from
the first quarter of 2013. Tape A matched market share was 31% in
the second quarter of 2013, down from the 32% recorded in the
second quarter of 2012, but up from 30% recorded in the first
quarter of 2013. Trading off-exchange, as reported by Trade
Reporting Facilities (“TRF”), increased to 35% of overall
consolidated average daily volume in the second quarter of 2013 up
from 32% in the second quarter of 2012.
- NYSE Euronext ranked #1 globally in
initial public offerings (IPOs) and follow-ons globally through the
second quarter of 2013. NYSE Euronext raised $29 billion in total
global proceeds on 72 IPOs 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.
- NYSE was the leader in transfers – 4
companies with $168 billion in total market capitalization
transferred or announcing transfer to the NYSE in the first half of
2013, while 8 companies with $3.9 billion in total market
capitalization transferred away. Oracle Corp. (ORCL) announced
transfer to the NYSE on 6/20/2013, and began trading on the NYSE on
7/15/2013. ORCL is the largest transfer in history with $156
billion in market capitalization. Since 2010, five Nasdaq-100 Index
members have transferred to the NYSE, including two in 2013 (Oracle
Corp. and Perrigo Co.). Since 2000, 227 companies have transferred
to the NYSE with a total market capitalization of $706
billion.
- In the first half of 2013, NYSE
Euronext welcomed 23 new listings on its European markets. Key
listings included: Infosys (INFY), a global leader in consulting
and technology and the first Indian company admitted to trading on
NYSE Euronext’s London and Paris markets; Constellium (CSTM), a
global leader in innovative and high value‐added aluminum products;
and Bpost (BPOST), the leading postal operator in Belgium, and the
year’s second largest IPO in Europe and the largest non-finance
related IPO.
- NYSE Euronext opened EnterNext®, its
marketplace for SMEs. This new subsidiary is dedicated to companies
that have a capitalization of under €1 billion and already covers
over 750 SMEs listed on the regulated market of NYSE Euronext and
on NYSE Alternext.
- Euronext extended its range of stock
market indices with the addition of the CAC 40® Ext, which tracks
the market’s benchmark CAC 40®, but with extended calculation and
distribution hours. With the CAC 40® Ext index, investors can track
trends in the CAC 40®.
INFORMATION SERVICES AND TECHNOLOGY
SOLUTIONS
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:
- NYSE Technologies launched NYSE
BQT (Best Quote & Trades), a consolidated XDP feed that
provides a real-time, unified view of Level 1 market data,
including Best Bid/Offer and Last Sale information for the NYSE,
NYSE Arca, and NYSE MKT exchanges including NASDAQ issues traded on
NYSE Arca and NYSE MKT.
- Market Data initiatives continue to
build with approximately 84% of all clients registered for the new
non-display license agreements. This momentum will be further
reflected in the third quarter and on an annual basis is expected
to increase revenues by double digits.
- NYSE Technologies was named 'Best
Data Center Provider to the Sell Side' by Waters Technology.
The award was presented at the Waters Technology, Sell Side
Technology Awards.
- Americas Trading System Brasil (ATS
Brasil), a joint venture between Americas Trading Group (ATG) and
NYSE Euronext, has formally made an authorization request with the
Securities and 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.
Analyst/Investor/Media Call: July 30,
2013 at 8:00 a.m. (NY/EDT) / 2:00 p.m. (Paris/CEST)
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 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: 877.280.4962
International: 857.244.7319
Passcode: 32047272
Replay Dial-in Information:
United States: 888.286.8010
International: 617.801.6888
Passcode: 32457864
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, 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.
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 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.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING
STATEMENTS
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.
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND WHERE
TO FIND IT
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.
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NYSE Euronext
Condensed consolidated statements of income (unaudited) (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
NYSE Euronext Segment
Results (unaudited) (in millions)
Three months ended Three months
ended June 30, 2013 June 30, 2012 Derivatives
Cash Tradingand Listings
InformationServices
andTechnologySolutions
CorporateandEliminations
Consolidated Derivatives
CashTrading andListings
InformationServices
andTechnologySolutions
Corporate andEliminations
Consolidated Revenues Transaction and clearing fees $ 262 $
395 $ - $ - $ 657 $ 219 $ 430 $ - $ - $ 649 Market data 10 44 37 -
91 11 44 32 - 87 Listing - 111 - - 111 - 112 - - 112 Technology
services - - 77 - 77 - - 87 - 87 Other revenues 13
46 - - 59
10 40 - 1
51 Total 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
216 - - 306
58 240 - -
298 Total revenues, less transaction-based expenses 195 302
114 - 611 182 300 119 1 602 Depreciation and amortization [a] 8 41
13 - 62 10 43 13 - 66 Merger expenses and exit costs (M&E) [b]
3 3 1 15 22 7 7 4 (6 ) 12 Other operating expenses 84
133 76 27 320
87 130 79
34 330 Operating income - GAAP [c] $ 100
$ 125 $ 24 $ (42 ) $ 207 $ 78 $
120 $ 23 $ (27 ) $ 194 Operating income
excluding M&E [c] + [b] $ 103 $ 128 $ 25 $
(27 ) $ 229 $ 85 $ 127 $ 27 (33
) $ 206 Adjusted EBITDA [c] + [b] + [a] $ 111
$ 169 $ 38 $ (27 ) $ 291
$ 95 $ 170 $ 40
(33 ) $ 272 Operating margin excluding M&E
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 June 30, 2013 June 30, 2012
Derivatives
Cash Tradingand Listings
InformationServices
andTechnologySolutions
CorporateandEliminations
Consolidated Derivatives
CashTrading andListings
InformationServices
andTechnologySolutions
Corporate andEliminations
Consolidated Revenues Transaction and clearing fees $ 533 $
758 $ - $ - $ 1,291 $ 425 $ 833 $ - $ - $ 1,258 Market data 20 85
69 - 174 22 89 67 - 178 Listing - 221 - - 221 - 222 - - 222
Technology services - - 157 - 157 - - 173 - 173 Other revenues
25 90 - -
115 22 84 -
1 107 Total revenues 578 1,154 226 -
1,958 469 1,228 240 1 1,938 Transaction-based expenses: Section 31
fees - 153 - - 153 - 152 - - 152 Liquidity payments, routing and
clearing 182 412 -
- 594 111 472
- - 583 Total revenues,
less transaction-based expenses 396 589 226 - 1,211 358 604 240 1
1,203 Depreciation and amortization [a] 17 81 26 - 124 20 85 27 -
132 Merger expenses and exit costs (M&E) [b] 5 7 4 14 30 8 13
10 12 43 Fair value adjustment to RSU awards [c] - - - 10 10 - - -
- - Other operating expenses 172 266
150 50 638 174
273 158 64
669 Operating income - GAAP [d] $ 202 $ 235 $
46 $ (74 ) $ 409 $ 156 $ 233 $ 45
$ (75 ) $ 359 Operating income excluding M&E and
fair
value adjustment to RSU awards
[d] + [c] + [b] $ 207 $ 242 $ 50 $ (50 ) $ 449
$ 164 $ 246 $ 55 $ (63 ) $ 402
Adjusted EBITDA [d] + [c] + [b] + [a] $ 224 $ 323
$ 76 $ (50 ) $ 573 $ 184
$ 331 $ 82 $ (63 )
$ 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 ourGAAP financial results but are
provided to improve overall understanding of our current financial
performance and our prospects for the future.
N/M = Not meaningful
NYSE
Euronext Fixed operating expenses (unaudited) (in millions)
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 2 New business
initiatives (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 $ 408 Less: Merger expenses and exit costs (12 ) Fixed
operating expenses for the three months ended June 30, 2012 - as
adjusted $ 396 [b] Variance ($) $ (20 ) [a] - [b] =
[c] Variance (%) -5 % [c] / [b] Fixed operating
expenses for the six months ended June 30, 2013 - GAAP $ 802 Less:
Fair value adjustment to RSU awards $ (10 ) Merger expenses and
exit costs (30 ) $ 762 Excluding the impact of: Currency
translation 3 New business initiatives (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 $ 844 Less: Merger expenses and exit costs
(43 ) Fixed operating expenses for the six months ended June
30, 2012 - as adjusted $ 801 [b] Variance ($) $ (53 )
[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 871 Fixed
operating expenses for the trailing twelve months ended June 30,
2013 - GAAP $ 1,673 Less: Fair value adjustment to RSU awards $ (13
) Merger expenses and exit costs (121 ) $ 1,539 Excluding
the impact of: New business initiatives (52 ) Currency
translation(1) 18
Fixed operating expenses for the trailing
twelve months ended June 30, 2013 - as adjusted
$ 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 ofour 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, Dec. 31, 2013 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
NYSE
Euronext
Selected
Statistical Data:
Volume
Summary
Average Daily Volume
Total Volume Total Volume (Unaudited)
2Q13 1Q13
% ∆ 2Q13 vs.
1Q13
2Q12
% ∆ 2Q13 vs.
2Q12
2Q13 1Q13
% ∆ 2Q13 vs.
1Q13
2Q12
% ∆ 2Q13 vs.
2Q12
YTD 2013 YTD 2012
% ∆
Number of Trading Days - European Cash 63 62 62 63 62 62 125
127
Number of Trading Days - European Derivatives 64 62 63 64 65 63 126
128
Number of Trading Days - U.S. Markets 64 60 63 64 60 63 124 125
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 749 883 -15.2 % 1,743 -57.1 % 47,918 54,749 -12.5 %
109,827 -56.4 % 102,666 153,556 -33.1 % Avg. Net Revenue Per
Contract (ex. Bclear) $ 0.610 $ 0.622 -1.9 % $ 0.674 -9.5 % $ 0.610
$ 0.622 -1.9 % $ 0.674 -9.5 % Avg. Net Revenue Per Contract (ex.
Bclear) - Currency Neutral $ 0.610 $ 0.618 -1.3 % $ 0.656 -7.0 % $
0.610 $ 0.618 -1.3 % $ 0.656 -7.0 %
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 2,276 2,560 -11.1 % 1,801 26.4 % 145,688
158,710 -8.2 % 113,479 28.4 % 304,398 218,917 39.0 %
Medium and Long Term Interest Rate Products 187 189 -1.1 % 152 22.9
% 11,965 11,723 2.1 % 9,580 24.9 % 23,689 19,469 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 606 660 -8.2 % 1,603 -62.2 % 38,806 40,948 -5.2 % 100,962
-61.6 % 79,755 134,137 -40.5 %
Options 359 471 -23.8 % 462 -22.3 % 22,995 29,231 -21.3 % 29,124
-21.0 % 52,226 62,191 -16.0 %
Equity Index Products 530 542 -2.2 % 557 -4.8 % 33,931 33,623 0.9 %
35,102 -3.3 % 67,554 64,834 4.2 %
of which Bclear 748 881 -15.1 % 1,743 -57.1 % 47,918 54,749
-12.5 % 109,827 -56.4 % 102,666 153,556 -33.1 %
Individual Equity Products 650 758 -14.2 % 1,667 -61.0 % 41,625
47,008 -11.5 % 105,025 -60.4 % 88,633 144,023 -38.5 %
Futures 579 649 -10.9 % 1,561 -62.9 % 37,032 40,267 -8.0 % 98,312
-62.3 % 77,299 130,972 -41.0 %
Options 72 109 -34.0 % 107 -32.7 % 4,593 6,742 -31.9 % 6,713 -31.6
% 11,334 13,051 -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 4,376 4,231 3.4 % 3,915 11.8 % 280,070
253,843 10.3 % 246,634 13.6 % 533,914 502,556 6.2 %
Total Consolidated Options Contracts 15,879 14,981 6.0 % 14,911 6.5
% 1,016,261 898,885 13.1 % 939,423 8.2 % 1,915,146 1,923,930 3.9 %
Share of Total Consolidated Options Contracts 27.6 % 28.2 %
26.3 % 27.6 % 28.2 % 26.3 % 27.9 % 26.1 % 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 $ 0.562 $
0.620 -9.4 % $ 0.519 8.3 % $ 0.562 $ 0.620 -9.4 % $ 0.519 8.3 %
Avg. Net Revenue Per Transaction - Currency Neutral $ 0.562 $ 0.616
-8.8 % $ 0.530 6.0 % $ 0.562 $ 0.616 -8.8 % $ 0.530 6.0 %
Equities 1,418 1,326 7.0 % 1,656 -14.4 % 89,352 82,199 8.7 %
102,668 -13.0 % 171,551 202,107 -15.1 %
Exchange-Traded Funds 15 14 8.1 % 14 3.1 % 932 848 9.9 % 890 4.8 %
1,780 1,831 -2.8 %
Structured Products 32 33 -2.0 % 33 -3.9 % 2,011 2,019 -0.4 % 2,059
-2.3 % 4,030 4,294 -6.2 %
Bonds 5 6 -14.9 % 5 -5.2 % 305 353 -13.5 % 317 -3.7 % 658 628 4.9 %
U.S. Cash Products (shares in
millions) 1,626
1,545 5.2 %
1,823 -10.8 %
104,043 92,721
12.2 % 114,863
-9.4 %
196,764 225,100
-12.6 % Avg. Net Revenue Per 100 Shares Handled $
0.0473 $ 0.0431 9.7 % $ 0.0428 10.5 % $ 0.0473 $ 0.0431 9.7 % $
0.0428 10.5 %
NYSE Listed
(Tape A) Issues 4
Handled Volume 5 1,154 1,120 3.0 % 1,304 -11.5 % 73,870 67,207 9.9
% 82,157 -10.1 % 141,077 161,180 -12.5 %
Matched Volume 6 1,113 1,077 3.4 % 1,239 -10.2 % 71,262 64,603 10.3
% 78,081 -8.7 % 135,865 152,613 -11.0 %
Total NYSE Listed Consolidated Volume 3,608 3,585 0.6 % 3,885 -7.1
% 230,911 215,111 7.3 % 244,756 -5.7 % 446,022 488,556 -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 5 286 224 27.4 % 279 2.4 % 18,298 13,466 35.9 %
17,582 4.1 % 31,764 34,023 -6.6 %
Matched Volume 6 263 207 26.8 % 251 4.6 % 16,823 12,435 35.3 %
15,826 6.3 % 29,258 30,497 -4.1 %
Total NYSE Arca & NYSE MKT Listed Consolidated Volume 1,248 994
25.4 % 1,188 5.0 % 79,841 59,667 33.8 % 74,843 6.7 % 139,508
144,466 -3.4 %
Share of Total NYSE Arca & NYSE MKT Listed
Consolidated Volume Handled Volume 5 22.9 % 22.6 % 23.5 % 22.9
% 22.6 % 23.5 % 22.8 % 23.6 %
Matched Volume 6 21.1 % 20.8 % 21.1 % 21.1 % 20.8 % 21.1 % 21.0 %
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 6 166 179 -7.5 % 206 -19.3 % 10,610 10,758 -1.4 %
12,950 -18.1 % 21,368 25,726 -16.9 %
Total Nasdaq Listed Consolidated Volume 1,781 1,822 -2.3 % 1,802
-1.2 % 113,979 109,316 4.3 % 113,554 0.4 % 223,295 224,885 -0.7 %
Share of Total Nasdaq Listed Consolidated Volume
Handled Volume 5 10.4 % 11.0 % 13.3 % 10.4 % 11.0 % 13.3 % 10.7 %
13.4 %
Matched Volume 6 9.3 % 9.8 % 11.4 % 9.3 % 9.8 % 11.4 % 9.6 % 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 6 245 196 25.1 % 238 3.0 % 15,694 11,761 33.4 %
14,995 4.7 % 27,455 28,714 -4.4 %
Total ETF Consolidated Volume 1,203 959 25.5 % 1,167 3.2 % 77,019
57,554 33.8 % 73,495 4.8 % 134,573 140,693 -4.3 %
Share of Total ETF Consolidated Volume Handled Volume
5 22.2 % 22.1 % 22.7 % 22.2 % 22.1 % 22.7 % 22.2 % 22.8 %
Matched Volume 6 20.4 % 20.4 % 20.4 % 20.4 % 20.4 % 20.4 % 20.4 %
20.4 %
1
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 Includes all volume executed in NYSE
Euronext's U.S. crossing sessions. 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
market center. NYSE Arca routing includes odd-lots. 6 Represents
the total number of shares of equity securities and ETFs executed
on the NYSE Euronext's U.S. exchanges. 7 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.
NYSE Euronext
Selected
Statistical Data:
Other Operating
Statistics
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 were 1,385 ETPs exclusively listed on NYSE Arca
as of June 30, 2013. There were 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 closed-end funds listing
on NYSE) and new ETP listings on NYSE Arca (NYSE MKT 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, 2013, 181 companies were listed on NYSE Alternext, 252
on Free Market and 673 ETPs 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 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 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. 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.
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