-- Third Quarter GAAP Diluted EPS of $0.73 vs.
$0.44 in Prior Year ---- Non-GAAP Diluted EPS of $0.53, Up 21%
Excluding Merger Expenses, Exit Costs and Discrete Items –--
Renegotiated Continental Derivatives Clearing Agreement with
LCH.Clearnet SA ---- Global Leader in IPOs Year-to-Date --
Financial and Operating Highlights1, 2
- Diluted non-GAAP EPS of $0.53, up 21%
compared to 3Q12
- Net revenue of $574 million up 3%
compared to 3Q12
- Fixed operating expenses of $372
million, down 5% on constant dollar / portfolio basis vs. 3Q12
- Operating income of $202 million, up
18% compared to 3Q12
- Debt-to-EBITDA ratio 2.1 times, down
from 2.5 times at end of 2012
1 All comparisons versus 3Q12 unless otherwise stated. Excludes
merger expenses, exit costs, charge for fair value adjustment to
RSU awards, disposal activities and discrete tax items.
2 A full reconciliation of our non-GAAP results to our GAAP
results is included in the attached tables. See also our statement
on non-GAAP financial measures at the end of this earnings
release.
NYSE Euronext (NYX) today reported net income of $178 million,
or $0.73 per diluted share on a GAAP basis, for the third quarter
of 2013, compared to net income of $108 million, or $0.44 per
diluted share, for the third quarter of 2012. Results for the third
quarter of 2013 and 2012 included $24 million and $18 million,
respectively, of pre-tax merger expenses and exit costs. Third
quarter 2013 results included a $5 million pre-tax gain on the sale
of our 12% stake in the Qatar Exchange. Our third quarter 2013 and
2012 GAAP effective tax rate both included a discrete net deferred
tax benefit, principally related to the enacted reduction in the
corporate tax rate in the United Kingdom. Excluding merger
expenses, exit costs, disposal activity and discrete tax items, net
income in the third quarter of 2013 was $131 million, or $0.53 per
diluted share on a non-GAAP basis, compared to $108 million, or
$0.44 per diluted share on a non-GAAP basis, in the third quarter
of 2012.
“I would like to thank all of our clients, shareholders and
employees for their support while we worked through our
transformative deal with IntercontinentalExchange,” said Duncan L.
Niederauer, CEO, NYSE Euronext. “Throughout the process, we
continued to execute against our business plan by transitioning our
clearing operation, building substantial momentum in our Listings
business, achieving our cost saving commitments for 2013 early and
managing our capital in a disciplined way for our shareholders. We
are especially pleased that Twitter recently announced they will
list on the NYSE. What we accomplished has set an excellent
foundation for the combination of our two great companies.”
The table below summarizes the financial results1 for the third
quarter of 2013:
% Δ 3Q13
Year-to-Date % Δ YTD '13 ($ in
millions, except EPS) 3Q13
2Q13 3Q12
vs. 3Q12 2013
2012 vs. YTD '12 Total
Revenues2 $890
$995 $902
(1 %) $2,848
$2,840 0 % Total Revenues, Less
Transaction-Based Expenses3 574 611
559 3 % 1,785 1,762 1
% Other Operating Expenses 4 372
382 388 (4 %)
1,134 1,189 (5 %)
Operating Income 4 $202 $229
$171 18 % $651 $573 14
% Net Income5 $131 $153
$108 21 % $423 $357 18
% Diluted Earnings Per Share5
$0.53 $0.63
$0.44
22 % $1.73
$1.41 23 %
Operating Margin 35 % 37 %
31 % 4 ppts 36 % 33
% 3 ppts Adjusted EBITDA Margin
46 % 48 %
42 % 4
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.
THIRD 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 $574 million in the third quarter of 2013, up
3% from the third quarter of 2012 and included a $5 million
positive impact from foreign currency fluctuations.
Other operating expenses, excluding merger expenses and exit
costs, were $372 million in the third quarter of 2013, down $16
million, or 4% compared to the third quarter of 2012. Excluding the
impact of new business initiatives and a $1 million negative impact
attributable to foreign currency fluctuations, other operating
expenses were down $19 million, or 5%, compared to the third
quarter of 2012.
Realized Project 14 savings through the third quarter of 2013
were $175 million, which represented 70% of the total $250 million
expected to be saved by the end of 2014.
Operating income, excluding merger expenses and exit costs, was
$202 million, up $31 million, or 18% compared to the third quarter
of 2012 and included a $4 million positive impact from foreign
currency fluctuations.
Adjusted EBITDA, excluding merger expenses and exit costs, was
$266 million, up $31 million, or 13% compared to the third quarter
of 2012. Adjusted EBITDA margin was 46% in the third quarter of
2013, compared to 42% in the third quarter of 2012.
The decline in net interest and investment loss compared to the
second quarter of 2013 was driven by the retirement of the
remaining $414 million of the $750 million 4.80% notes in the
second quarter of 2013.
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 third quarter of 2013, excluding
merger expenses, exit costs and discrete tax items, was 24%
compared to approximately 21% for the third quarter of 2012.
The weighted average diluted shares outstanding in the third
quarter of 2013 was 245 million, down from 247 million in third
quarter of 2012.
At September 30, 2013, total debt was $2.3 billion. Cash, cash
equivalents and short term financial investments (including $21
million related to Section 31 fees collected from market
participants and due to the SEC) were $0.4 billion and net debt was
$1.9 billion. The cash balance as of September 30, 2013 included
$120 million received from our sale of the 12% stake in the Qatar
Exchange.
The ratio of debt-to-EBITDA at the end of the third quarter of
2013 was 2.1x, down from 2.5x at the end of 2012.
Total capital expenditures were $38 million in the third quarter
of 2013, down from $41 million in the third quarter of 2012.
Year-to-date capital expenditures of $97 million were well below
the $125 million recorded for the same period in 2012, and trending
below full-year 2013 guidance of $150 million.
SUBSEQUENT EVENT
On October 14, 2013 NYSE Euronext and LCH.Clearnet SA signed a
new five-year agreement to clear NYSE Euronext’s continental listed
derivatives, which included governance changes that will take
effect immediately and new commercial terms beginning in April
2014. Starting April 1, 2014, NYSE Euronext will begin recognizing
revenues as a result of this new agreement and will compensate
LCH.Clearnet SA for certain clearing and risk management
services.
THIRD QUARTER 2013 SEGMENT
RESULTS
Below is a summary of business segment results:
Derivatives
Cash Trading & Listings Info.
Svcs. & Tech. Solutions ($ in millions)
Net Operating
Adjusted Net
Operating Adjusted
Operating Adjusted
Revenue1
Income2 EBITDA2
Revenue1 Income2
EBITDA2 Revenue
Income2
EBITDA2 3Q13 $166 $85 $94
$295 $118 $160 $113 $25
$38 2Q13 $195 $103 $111
$302 $128 $169 $114 $25
$38 3Q12 $164
$68 $78
$282 $104
$145 $113
$23 $36 YTD 2013
$562 $292 $318 $884 $360
$483 $339 $75 $114 YTD 2012
$522
$232 $262
$886 $350
$476 $353
$78 $118 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 $166 million in the third quarter of
2013 increased $2 million, or 1% compared to the third quarter of
2012 and included a $1 million negative impact from foreign
currency fluctuations. The $3 million increase in derivatives net
revenue, on a constant currency basis, compared to the third
quarter of 2012, was driven by slightly higher average daily
trading volumes (“ADV”) in European interest rate derivatives
products, which increased 14%. The successful clearing transition
for the London-based derivatives market of NYSE Liffe to ICE Clear
Europe in the third quarter of 2013 resulted in a reduction in
costs of approximately $8 million in the quarter. Highlights for
the third quarter of 2013 included:
- Global derivatives ADV, excluding
Bclear, in the third quarter of 2013 of 6.7 million contracts
decreased 4% compared to the third quarter of 2012 and decreased
21% compared to second quarter of 2013 levels.
- NYSE Euronext European derivatives
products ADV of 3.1 million contracts in the third quarter of 2013
decreased 8% compared to the third quarter of 2012 and decreased
23% from second quarter of 2013 levels. Excluding Bclear, European
derivatives products ADV in the third quarter of 2013 increased 5%
compared to the third quarter of 2012, but decreased 19% from the
second quarter of 2013.
- U.S. equity options ADV in the third
quarter of 2013 decreased 1% to 3.5 million contracts compared to
the third quarter of 2012 and decreased 20% from the second quarter
of 2013. U.S. consolidated equity options ADV of 13.6 million
contracts decreased 1% compared to the third quarter of 2012 and
decreased 14% from the second quarter of 2013. NYSE Euronext’s U.S.
equity options exchanges accounted for 26% of total consolidated
U.S. equity options trading in the third quarter of 2013, in-line
with the third quarter of 2012, and down from 28% in the second
quarter of 2013.
- NYSE Liffe has introduced Universal
Stock Futures on Canadian and South African stocks on Bclear, the
Exchange’s trade administration and clearing service. The
geographical expansion of the Bclear product range will enhance the
diversity of the underlyings available to the Exchange’s customers,
with the possibility to trade futures on over 1,250 large and
mid-cap stocks denominated in 12 currencies. In Europe, NYSE Liffe
is the only exchange offering futures on Canadian and South African
stocks in their respective domestic currencies.
- NYSE Liffe U.S. announced the listing
of a new futures contract based on the widely followed NYSE Arca
Gold Miners Index (“GDF futures”), pending regulatory approval.
These innovative new futures will complement the existing market
for the Market Vectors®Gold Miners ETP (GDX®) listed on NYSE Arca
as well as options on GDX® traded on the NYSE Arca and NYSE Amex
options platforms.
CASH TRADING AND
LISTINGS
Cash Trading and Listings net revenue of $295 million in the
third quarter of 2013 increased $13 million, or 5% compared to the
third quarter of 2012 and included a $5 million positive impact
from foreign currency fluctuations. The $8 million increase in Cash
Trading and Listings net revenue, on a constant currency basis,
compared to the third quarter of 2012, was driven by higher
non-trading revenues. Highlights for the third quarter of 2013
included:
- European cash ADV of 1.3 million
transactions in the third quarter of 2013 increased 2% from the
third quarter of 2012, but decreased 9% from second quarter of 2013
levels. European cash market share (value traded) in NYSE
Euronext’s four core markets was 66% in the third quarter of 2013,
down from 68% in the third quarter of 2012 and down from 67% in the
second quarter of 2013.
- In the U.S., cash trading ADV in the
third quarter of 2013 decreased 11% to 1.4 billion shares from 1.6
billion shares in the third quarter of 2012 and decreased 13% from
the second quarter of 2013. Tape A matched market share was 31% in
the third quarter of 2013, down from the 32% recorded in the third
quarter of 2012, but in-line with the second quarter of 2013.
Trading off-exchange, as reported by Trade Reporting Facilities
(“TRF”), increased to 37% of overall consolidated average daily
volume in the third quarter of 2013, up from 32% in the third
quarter of 2012 and up from 35% in the second quarter of 2013.
- NYSE Euronext ranked #1 globally in
initial public offerings (IPOs) and follow-ons globally through the
third quarter of 2013. NYSE Euronext raised $36.5 billion in total
global proceeds on 104 IPOs and $131.1 billion in total global
proceeds on 397 follow-ons. In the U.S., NYSE Euronext led the
market with 74 IPOs raising $21.9 billion in proceeds (excluding
closed-end funds) and has steadily captured share in
technology-based IPOs. Twitter’s announcement that they will
list on NYSE is an examples of this trend. NYSE Euronext has listed
53% of the technology IPOs in the U.S., including Violin Memory,
RingCentral, MiX Telematics, Cvent, and YuMe in the third quarter
of 2013.
- NYSE was the leader in transfers – 7
companies with $160.9 billion in total market capitalization
transferred to the NYSE through the third quarter of 2013. Oracle
Corp. (ORCL) began trading on the NYSE on 7/15/2013. ORCL is the
largest transfer in history with $148.2 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, 230 companies have transferred to the
NYSE with a total market capitalization of $698.7 billion.
- In the third quarter of 2013, NYSE
Euronext listing activity on its European markets continued a
positive trend with 5 new listings, bringing the total to 23 in
2013. IPO activity in Belgium reopened with the listing of Cardio3
BioSciences, while NYSE Euronext London welcomed its third listing
with Norbert Dentressangle, a leading European logistics
company.
- NYSE Euronext announced a strategic
partnership with ACE, a leading transaction management platform for
private placements of equity, debt and other securities. NYSE
Euronext and ACE will establish an independent technology backbone
for new issuances of private securities, with the goal of bringing
greater transparency and efficiencies to the private market, just
as NYSE Euronext has brought to the public market.
INFORMATION SERVICES AND TECHNOLOGY
SOLUTIONS
Information Services and Technology Solutions revenue was $113
million in the third quarter of 2013, in-line with the third
quarter of 2012 and included a $1 million positive impact from
foreign currency fluctuations. Highlights for the third quarter of
2013 included:
- Russell Indexes, a leading global index
provider and NYSE Euronext, one of the world's premier exchange
operators and technology innovators, announced new enhancements to
RussellTick™, an index feed for real-time, intra-day values for the
Russell family of global indexes. These enhancements represent an
additional step in the growing global alliance between Russell
Indexes and NYSE Euronext.
- NYSE Technologies welcomed Banco
Carregosa, a private bank based in Porto, as its first Portuguese
SuperFeed™ customer. SuperFeed™ provides customers with
consolidated access to market data from major US, European and
Asian markets, in a single normalized format over NYSE
Technologies’ Secure Financial Transaction Infrastructure (SFTI)
network.
- First Derivatives, a leading provider
of software and consulting services to the capital markets
industry, and NYSE Technologies are working together to create a
new suite of historical data solutions. Combining NYSE
Technologies’ historical and real-time data expertise covering
cash, options, futures and corporate actions with First
Derivatives’ products and market expertise, the “Tick as a Service”
offering will build into a suite of innovative market services for
clients to gain efficient access to large data stores for
analytical back testing and compliance.
- NYSE Technologies has obtained approval
from the Chinese State Council Information Office (SCIO) to
distribute market data in China. With the license from the SCIO,
NYSE Technologies will disseminate financial information including
NYSE Euronext’s real-time and historical market data, as well as
SuperFeed services to market participants in mainland China.
- NYSE Technologies and KOSCOM, the
technology firm created by the Korean Ministry of Finance and Korea
Exchange, have signed a Global Trading Hub Connectivity Agreement.
The agreement will empower local traders and strengthen the
Memorandum of Understanding (MOU) signed by both organizations in
March 2012. In partnership with KOSCOM, NYSE Technologies has
agreed to cross-connect its 1,300 member MarketplaceTM trading
community to KOSCOM’s STP Hub of 130 key Korean firms.
- ASX and NYSE Technologies, the
commercial technology business of NYSE Euronext announced that they
have connected their respective global networks. The linking of ASX
Net Global and NYSE Technologies’ SFTI will initially provide
customers of NYSE Technologies cost-effective access to ASX markets
and market data services.
The accompanying tables include information integral to
assessing the Company’s financial performance.
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, 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. For more information, please visit:
http://www.nyx.com.
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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.
NYSE Euronext Condensed consolidated statements of income
(unaudited) (in millions, except per share data)
Three months ended
Nine months ended Sept. 30, 2013 June 30, 2013
Sept. 30, 2012 Sept. 30, 2013
Sept. 30, 2012 Revenues Transaction and clearing fees
$ 554 $ 657 $ 570 $ 1,845 $ 1,828 Market data 91 91 85 265 263
Listing 113 111 112 334 334 Technology services 74 77 81 231 254
Other revenues
58 59
54 173
161 Total revenues 890 995 902 2,848
2,840 Transaction-based expenses: Section 31 fees 61 78 74 214 226
Liquidity payments, routing and clearing
255
306 269
849 852
Total revenues, less transaction-based expenses
574 611
559 1,785
1,762 Other operating expenses Compensation 150
154 145 465 457 Depreciation and amortization 64 62 64 188 196
Systems and communications 40 42 44 125 133 Professional services
63 67 76 199 218 Selling, general and administrative 55 57 59 167
185 Merger expenses and exit costs
24
22 18
54 61 Total other
operating expenses
396
404 406
1,198 1,250
Operating income 178 207 153 587 512 Net interest and investment
income (loss) (23 ) (25 ) (28 ) (75 ) (84 ) Loss from associates (2
) (3 ) (2 ) (7 ) (5 ) Net gain (loss) on disposal activities 5 10 -
15 (2 ) Other income (loss)
-
6 1
5 4 Income before
income taxes 158 195 124 525 425 Income tax benefit (provision)
24 (17
) (12 )
(34 ) (91
) Net income 182 178 112 491 334 Net (income) loss
attributable to noncontrolling interest (4 ) (5 )
(4 ) (14 ) (14 ) Net income attributable to
NYSE Euronext $ 178 $ 173 $ 108 $ 477 $
320 Basic earnings per share attributable to NYSE
Euronext $ 0.73 $ 0.71 $ 0.44 $ 1.96 $ 1.27 Diluted earnings
per share attributable to NYSE Euronext $ 0.73 $ 0.71 $ 0.44 $ 1.95
$ 1.26 Basic weighted average shares outstanding 243 243 246
243 252 Diluted weighted average shares outstanding 245
244
247 245 253
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
Nine months ended
Non-GAAP
Reconciliation
Sept. 30, 2013 June 30, 2013
Sept. 30, 2012 Sept. 30, 2013 Sept. 30, 2012
Income (loss) before income taxes - GAAP $ 158 $ 195 $ 124 $
525 $ 425 Excluding: Merger expenses and exit costs 24 22 18 54 61
Net (gain) loss on disposal activities (5 ) (10 ) - (15 ) 2 Fair
value adjustment to RSU awards
-
- -
10 - Income before
income taxes - as adjusted 177 207 142 574 488 Income tax provision
(42 ) (49
) (30 )
(137 ) (117
) Net income - as adjusted 135 158 112 437 371 Net
(income) loss attributable to noncontrolling interest
(4 ) (5
) (4 )
(14 ) (14
) Net income attributable to NYSE Euronext - as
adjusted $ 131 $ 153 $ 108 $ 423 $ 357
Diluted earnings per share attributable to NYSE
Euronext $ 0.53 $ 0.63 $ 0.44 $ 1.73 $
1.41 NYSE Euronext Segment Results (unaudited) (in
millions) Three months
ended Three months ended September 30, 2013 September 30, 2012
Derivatives Cash Trading and Listings Information
Services and Technology Solutions Corporate and
Eliminations Consolidated Derivatives Cash
Trading and Listings Information Services and
Technology Solutions Corporate and Eliminations
Consolidated Revenues Transaction and clearing
fees $ 217 $ 337 $ - $ - $ 554 $ 198 $ 372 $ - $ - $ 570 Market
data 10 42 39 - 91 11 42 32 - 85 Listing - 113 - - 113 - 112 - -
112 Technology services - - 74 - 74 - - 81 - 81 Other revenues
9 49 - -
58 11 43 -
- 54 Total revenues 236 541 113 - 890
220 569 113 - 902 Transaction-based expenses: Section 31 fees - 61
- - 61 - 74 - - 74 Liquidity payments, routing and clearing
70 185 - -
255 56 213 -
- 269 Total revenues, less
transaction-based expenses 166 295 113 - 574 164 282 113 - 559
Depreciation and amortization [a] 9 42 13 - 64 10 41 13 - 64 Merger
expenses and exit costs (M&E) [b] 1 3 2 18 24 13 2 2 1 18 Other
operating expenses 72 135 75
26 308 86
137 77 24 324
Operating income - GAAP [c] $ 84 $ 115 $ 23 $
(44 ) $ 178 $ 55 $ 102 $ 21 $ (25 ) $
153 Operating income excluding M&E
[c] + [b]
$ 85 $ 118 $ 25 $ (26 ) $ 202 $ 68
$ 104 $ 23 (24 ) $ 171 Adjusted
EBITDA
[c] + [b] + [a]
$ 94 $ 160 $ 38
$ (26 ) $ 266 $ 78 $ 145
$ 36 (24 )
$ 235 Operating margin excluding M&E 51 % 40 % 22
% N/M 35 % 41 % 37 % 20 % N/M 31 % Adjusted EBITDA margin 57 % 54 %
34 % N/M 46 % 48 % 51 % 32 % N/M 42 %
Nine months ended Nine months ended September
30, 2013 September 30, 2012 Derivatives Cash Trading and
Listings Information Services and Technology
Solutions Corporate and Eliminations
Consolidated Derivatives Cash Trading and Listings
Information Services and Technology Solutions
Corporate and Eliminations Consolidated
Revenues Transaction and clearing fees $ 750 $ 1,095 $ - $ - $
1,845 $ 623 $ 1,205 $ - $ - $ 1,828 Market data 30 127 108 - 265 33
131 99 - 263 Listing - 334 - - 334 - 334 - - 334 Technology
services - - 231 - 231 - - 254 - 254 Other revenues 34
139 - - 173
33 127 - 1
161 Total revenues 814 1,695 339 - 2,848 689
1,797 353 1 2,840 Transaction-based expenses: Section 31 fees - 214
- - 214 - 226 - - 226 Liquidity payments, routing and clearing
252 597 - -
849 167 685 -
- 852 Total revenues, less
transaction-based expenses 562 884 339 - 1,785 522 886 353 1 1,762
Depreciation and amortization [a] 26 123 39 - 188 30 126 40 - 196
Merger expenses and exit costs (M&E) [b] 6 10 6 32 54 21 15 12
13 61 Fair value adjustment to RSU awards [c] - - - 10 10 - - - - -
Other operating expenses 244 401
225 76 946 260
410 235 88 993
Operating income - GAAP [d] $ 286 $ 350 $ 69
$ (118 ) $ 587 $ 211 $ 335 $ 66
$ (100 ) $ 512
Operating income excluding M&E and
fair
value adjustment to RSU
awards
[d] + [c] + [b] $ 292 $ 360 $ 75 $ (76 ) $ 651
$ 232 $ 350 $ 78 $ (87 ) $ 573
Adjusted EBITDA
[d] + [c] + [b] + [a] $ 318 $ 483
$ 114 $ (76 ) $ 839
$ 262 $ 476 $ 118
$ (87 ) $ 769
Operating margin excluding M&E and
fair
value adjustment to RSU
awards
52 % 41 % 22 % N/M 36 % 44 % 40 % 22 % N/M 33 % Adjusted EBITDA
margin 57 % 55 % 34 % N/M 47 % 50 % 54 % 33 % 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
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. 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 September 30, 2013 - GAAP $ 396
Less: Merger expenses and exit costs (24) $ 372 Excluding
the impact of: Currency translation (1) New business initiatives
(2) Fixed operating expenses for the three months ended
September 30, 2013 - as adjusted $ 369 [a] Fixed operating
expenses for the three months ended September 30, 2012 - GAAP $ 406
Less: Merger expenses and exit costs (18) Fixed operating
expenses for the three months ended September 30, 2012 - as
adjusted $ 388 [b] Variance ($) $ (19) [a] - [b] = [c]
Variance (%) -5% [c] / [b] Fixed operating
expenses for the nine months ended September 30, 2013 - GAAP $
1,198 Less: Fair value adjustment to RSU awards $ (10) Merger
expenses and exit costs (54) $ 1,134 Excluding the impact
of: Currency translation 2 New business initiatives (19)
Fixed operating expenses for the nine months ended September 30,
2013 - as adjusted $ 1,117 [a] Fixed operating expenses for
the nine months ended September 30, 2012 - GAAP $ 1,250 Less:
Merger expenses and exit costs (61) Fixed operating expenses
for the nine months ended September 30, 2012 - as adjusted $ 1,189
[b] Variance ($) $ (72) [a] - [b] = [c] Variance (%)
-6% [c] / [b]
Expense Base
Development Versus Project 14 Cost Savings Plan
Fixed operating expenses for the nine months
ended September 30, 2013 - GAAP $ 1,198 Fixed operating expenses
for the three months ended December 31, 2012 - GAAP 465
Fixed operating expenses for the trailing twelve months ended
September 30, 2013 - GAAP $ 1,663 Less: Fair value adjustment to
RSU awards $ (13) Merger expenses and exit costs (127) $
1,523 Excluding the impact of: New business initiatives (48)
Currency translation(1) 16 Fixed operating expenses for the
the trailing twelve months ended September 30, 2013 - as adjusted $
1,491 [a] Fixed operating expenses for the year ended
December 31, 2011 - base year $ 1,666 [b] Project 14
Cost Savings $ 175 [b]-[a] = [c] Cumulative Project 14 Cost
Savings to date as % of total $250 million plan 70% [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. NYSE Euronext Condensed
consolidated statements of financial condition (unaudited) (in
millions) Sept. 30,
Dec. 31, 2013 2012 Assets Current assets: Cash, cash
equivalents, and short term financial investments $ 437 $ 380
Accounts receivable, net 399 405 Deferred income taxes 65 67 Other
current assets 111 156 Total current assets 1,012
1,008 Property and equipment, net 893 948 Goodwill 4,191
4,163 Other intangible assets, net 5,803 5,783 Deferred income
taxes 67 74 Other assets 432 580 Total assets $
12,398 $ 12,556 Liabilities and equity Accounts payable and
accrued expenses $ 639 $ 824 Deferred revenue 225 138 Short term
debt 213 454 Total current liabilities 1,077 1,416
Long term debt 2,088 2,055 Deferred income taxes 1,362 1,435
Accrued employee benefits 560 602 Deferred revenue 384 378 Other
liabilities 22 27 Total liabilities 5,493
5,913 Redeemable noncontrolling interest 273
274 Equity 6,632 6,369 Total
liabilities and equity $ 12,398 $ 12,556
NYSE
Euronext
Selected
Statistical Data:
Volume
Summary
Average Daily Volume
Total Volume Total Volume
(Unaudited)
3Q13
2Q13 % ∆ 3Q13 vs.
2Q13 3Q12
% ∆ 3Q13 vs. 3Q12
3Q13 2Q13
% ∆ 3Q13 vs. 2Q13
3Q12 % ∆ 3Q13 vs.
3Q12 YTD 2013
YTD 2012 % ∆
Number of Trading Days - European Cash 66 63 65 66 63 65 191
192 Number of Trading Days - European Derivatives 66 64 65 66 64 65
192 193 Number of Trading Days - U.S. Markets 64 64 63 64 64 63 188
188
European Derivatives Products (contracts in
thousands) 3,127 4,048 -22.8 %
3,383 -7.6 % 206,355 259,087
-20.4 % 219,866 -6.1 %
745,379 729,643 2.2 % of which Bclear
446 749 -40.4 % 829 -46.2 % 29,432 47,918 -38.6 % 53,856 -45.3 %
132,099 207,412 -36.3 % Avg. Net Revenue Per Contract (ex. Bclear)
$ 0.622 $ 0.610 2.0 % $ 0.657 -5.3 % $ 0.622 $ 0.610 2.0 % $ 0.657
-5.3 % Avg. Net Revenue Per Contract (ex. Bclear) - Currency
Neutral $ 0.622 $ 0.614 1.3 % $ 0.644 -3.4 % $ 0.622 $ 0.614 1.3 %
$ 0.644 -3.4 %
Total Interest Rate Products1
1,967 2,463 -20.2 % 1,731
13.6 % 129,808 157,654 -17.7
% 112,531 15.4 % 457,895
350,918 30.5 % Short Term Interest Rate
Products 1,810 2,276 -20.5 % 1,583 14.3 % 119,441 145,688 -18.0 %
102,912 16.1 % 423,839 321,829 31.7 % Medium and Long Term Interest
Rate Products 157 187 -16.0 % 148 6.1 % 10,367 11,965 -13.4 % 9,619
7.8 % 34,056 29,089 17.1 %
Total Equity
Products2 1,065 1,496 -28.8
% 1,551 -31.3 % 70,311
95,732 -26.6 % 100,803 -30.2
% 269,845 361,965 -25.4 %
Individual Equity Products 638 966 -33.9 % 1,100 -42.0 % 42,134
61,801 -31.8 % 71,513 -41.1 % 174,114 267,841 -35.0 % Futures 285
606 -53.0 % 696 -59.1 % 18,803 38,806 -51.5 % 45,265 -58.5 % 98,557
179,402 -45.1 % Options 353 359 -1.6 % 404 -12.5 % 23,331 22,995
1.5 % 26,248 -11.1 % 75,557 88,439 -14.6 % Equity Index Products
427 530 -19.5 % 451 -5.3 % 28,177 33,931 -17.0 % 29,290 -3.8 %
95,731 94,124 1.7 % of which Bclear 444 748 -40.6 % 829
-46.4 % 29,432 47,918 -38.6 % 53,856 -45.3 % 132,099 207,412 -36.3
% Individual Equity Products 366 650 -43.7 % 754 -51.5 % 24,159
41,625 -42.0 % 49,014 -50.7 % 112,792 193,037 -41.6 % Futures 283
579 -51.0 % 670 -57.7 % 18,702 37,032 -49.5 % 43,560 -57.1 % 96,001
174,532 -45.0 % Options 83 72 15.2 % 84 -1.5 % 5,457 4,593 18.8 %
5,454 0.1 % 16,791 18,505 -9.3 % Equity Index Products 78 98 -20.1
% 74 5.0 % 5,162 6,262 -17.6 % 4,842 6.6 % 19,054 14,375 32.5 %
Commodity Products 94 89 6.1
% 100 -6.0 % 6,236 5,701
9.4 % 6,532 -4.5 % 17,639
16,761 5.2 % U.S. Derivatives
Products (contracts in thousands) Avg. Net Revenue Per
Contract (ex. Liffe U.S. volumes) $ 0.165 $ 0.156 5.8 % 0.144
14.6 % $ 0.165 $ 0.156 5.8 % 0.144 14.6 % Equity Options
Contracts3 3,513 4,376 -19.7 % 3,533 -0.6 % 224,809 280,070 -19.7 %
222,578 1.0 % 758,723 725,134 4.6 % Total Consolidated Options
Contracts 13,627 15,879 -14.2 % 13,812 -1.3 % 872,105 1,016,261
-14.2 % 870,150 0.2 % 2,787,252 2,794,081 51.2 % Share of
Total Consolidated Options Contracts 25.8 % 27.6 % 25.6 % 25.8 %
27.6 % 25.6 % 27.2 % 26.0 %
NYSE Liffe U.S.
Futures and Futures Options Volume* 46.1 63.3 -27.1 % 66.4 -30.5 %
3,043.2 4,111.7 -26.0 % 4,247.6 -28.4 % 10,796.0 15,178.2 -28.9 %
European Cash Products (trades in thousands)
1,339 1,470 -8.9 % 1,318
1.5 % 88,352 92,600 -4.6
% 85,695 3.1 % 266,371
294,556 -9.6 % Avg. Net Revenue Per
Transaction $ 0.543 $ 0.562 -3.4 % $ 0.537 1.1 % $ 0.543 $ 0.562
-3.4 % $ 0.537 1.1 % Avg. Net Revenue Per Transaction - Currency
Neutral $ 0.543 $ 0.570 -4.7 % $ 0.537 1.1 % $ 0.543 $ 0.570 -4.7 %
$ 0.570 -4.7 % Equities 1,295 1,418 -8.7 % 1,272 1.8 %
85,484 89,352 -4.3 % 82,698 3.4 % 257,036 284,805 -9.8 %
Exchange-Traded Funds 13 15 -14.4 % 13 0.5 % 835 932 -10.4 % 819
2.0 % 2,616 2,650 -1.3 % Structured Products 27 32 -15.5 % 28 -4.2
% 1,781 2,011 -11.5 % 1,831 -2.7 % 5,810 6,125 -5.1 % Bonds 4 5
-21.4 % 5 -28.8 % 251 305 -17.7 % 348 -27.7 % 910 976 -6.7 %
U.S. Cash Products (shares in millions) 1,413
1,626 -13.1 % 1,583 -10.8
% 90,413 104,043 -13.1 %
99,758 -9.4 % 287,177 325,180
-11.7 % Avg. Net Revenue Per 100 Shares Handled $
0.0490 $ 0.0473 3.6 % $ 0.0401 22.2 % $ 0.0490 $ 0.0473 3.6 % $
0.0401 22.2 %
NYSE Listed (Tape A) Issues 4
Handled Volume 5 1,004 1,154 -13.0 % 1,134 -11.5 % 64,233
73,870 -13.0 % 71,463 -10.1 % 205,310 232,644 -11.7 % Matched
Volume 6 970 1,113 -12.9 % 1,078 -10.0 % 62,092 71,262 -12.9 %
67,921 -8.6 % 197,956 220,535 -10.2 % Total NYSE Listed
Consolidated Volume 3,143 3,608 -12.9 % 3,412 -7.9 % 201,139
230,911 -12.9 % 214,981 -6.4 % 647,161 703,537 -8.0 %
Share of Total Consolidated Volume Handled Volume 5 31.9 %
32.0 % 33.2 % 31.9 % 32.0 % 33.2 % 31.7 % 33.1 % Matched Volume 6
30.9 % 30.9 % 31.6 % 30.9 % 30.9 % 31.6 % 30.6 % 31.3 %
NYSE Arca, MKT and Regional (Tape B) Listed Issues
Handled Volume 5 241 286 -15.7 % 222 8.5 % 15,430 18,298 -15.7 %
14,005 10.2 % 47,194 48,029 -1.7 % Matched Volume 6 223 263 -15.3 %
202 10.1 % 14,256 16,823 -15.3 % 12,741 11.9 % 43,514 43,238 0.6 %
Total NYSE Arca & NYSE MKT Listed Consolidated Volume 1,026
1,248 -17.7 % 939 9.2 % 65,684 79,841 -17.7 % 59,184 11.0 % 205,192
203,650 0.8 %
Share of Total NYSE Arca & NYSE MKT
Listed Consolidated Volume Handled Volume 5 23.5 % 22.9 % 23.7
% 23.5 % 22.9 % 23.7 % 23.0 % 23.6 % Matched Volume 6 21.7 % 21.1 %
21.5 % 21.7 % 21.1 % 21.5 % 21.2 % 21.2 %
Nasdaq Listed
Issues (Tape C) Handled Volume 5 168 186 -9.5 % 227
-25.9 % 10,750 11,875 -9.5 % 14,289 -24.8 % 34,673 44,507 -22.1 %
Matched Volume 6 150 166 -9.7 % 196 -23.6 % 9,578 10,610 -9.7 %
12,342 -22.4 % 30,946 38,067 -18.7 % Total Nasdaq Listed
Consolidated Volume 1,631 1,781 -8.4 % 1,661 -1.8 % 104,370 113,979
-8.4 % 104,663 -0.3 % 327,665 329,548 -0.6 %
Share of
Total Nasdaq Listed Consolidated Volume Handled Volume 5 10.3 %
10.4 % 13.7 % 10.3 % 10.4 % 13.7 % 10.6 % 13.5 % Matched Volume 6
9.2 % 9.3 % 11.8 % 9.2 % 9.3 % 11.8 % 9.4 % 11.6 %
Exchange-Traded Funds 5,7 Handled Volume 5 223
267 -16.5 % 205 8.8 % 14,266 17,094 -16.5 % 12,903 10.6 % 44,093
45,002 -2.0 % Matched Volume 6 206 245 -16.0 % 186 10.6 % 13,190
15,694 -16.0 % 11,739 12.4 % 40,645 40,453 0.5 % Total ETF
Consolidated Volume 964 1,203 -19.9 % 890 8.4 % 61,715 77,019 -19.9
% 56,048 10.1 % 196,288 196,741 -0.2 %
Share of Total ETF
Consolidated Volume Handled Volume 5 23.1 % 22.2 % 23.0 % 23.1
% 22.2 % 23.0 % 22.5 % 22.9 % Matched Volume 6 21.4 % 20.4 % 20.9 %
21.4 % 20.4 % 20.9 % 20.7 % 20.6 % 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)
Sept. 30, 2013
June 30, 2013 Sept. 30,
2012 NYSE Euronext Listed Issuers
NYSE Listed Issuers Issuers listed on U.S. Markets1
2,957 2,942 2,951 Number of new issuer listings1 61 88 44 Capital
raised in connection with new listings ($millions)2 $ 7,149 $ 8,982
$ 5,865
Euronext Listed Issuers Issuers listed
on Euronext1 880 884 906 Number of new issuer listings3 5 14 6
Capital raised in connection with new listings ($millions)2 $ 60 $
1,207 $ 3
NYSE Euronext Market Data
NYSE Market Data4 Share of Tape A revenues (%)
39.5 % 40.3 % 41.4 % Share of Tape B revenues (%) 27.3 % 26.7 %
27.2 % Share of Tape C revenues (%) 13.5 % 13.5 % 15.4 %
Professional subscribers (Tape A) 313,426 331,241 349,445
Euronext Market Data Number of terminals 195,914
202,389 211,850
NYSE Euronext Operating
Expenses NYSE Euronext employee headcount
NYSE Euronext headcount5 3,142 3,154 3,061
NYSE
Euronext Financial Statistics NYSE Euronext foreign
exchange rate Average €/US$ exchange rate $ 1.325 $
1.306 $ 1.252 Average £/US$ exchange rate $ 1.551 $ 1.536 $ 1.581
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 1,406 ETPs exclusively listed on NYSE Arca as of September 30,
2013. There were 360 corporate structured products listed on the
NYSE as of September 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 September 30, 2013, 181 companies were listed on NYSE Alternext,
242 on Free Market and 655 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.
Media:Amsterdam +31.20.550.4488Lisbon +351.217.900.029New
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Relations:New York +1.212.656.5700
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