The Nasdaq Stock Market, Inc. ("NASDAQ(r)"; (Nasdaq:NDAQ), today reported third quarter 2007 net income of $365.0 million, or $2.41 per diluted share, an increase of $334.8 million from $30.2 million, or $0.22 per diluted share, in the third quarter of 2006, and an increase of $308.9 million from $56.1 million, or $0.39 per diluted share, in the second quarter of 2007.
Included in third quarter results are pre-tax gains of $431.4 million associated with NASDAQ's sale of its share capital of the London Stock Exchange Group plc, and $35.2 million related to gains on foreign currency option contracts. Also included in third quarter 2007 results are the following pre-tax charges:
* $19.5 million associated with tax benefits shared with strategic investors, * $5.8 million related to the early extinguishment of debt, and * $1.1 million in workforce reduction expenses.
When excluding these items, net income on a non-GAAP basis was $62.1 million, or $0.42 per diluted share.
Revenues less liquidity rebates, brokerage, clearance and exchange fees ("net exchange revenues") were $210.0 million in the third quarter of 2007, an increase of 22.7% from $171.2 million in the year-ago period, and up 5.7% from $198.7 million reported in the second quarter of 2007.
"We are pleased to have once again reported record operating results, built largely on the success of new highs in trading volume and market share," commented Bob Greifeld, NASDAQ's President and Chief Executive Officer. "Our growth and liquidity has firmly established NASDAQ as the leader in the U.S. equities marketplace, driven largely by the pace at which we introduce new products and services designed to meet the needs of our customers. We know firsthand that working closely with customers to develop innovative products distinguishes NASDAQ from the competition and is a key driver behind our strong financial performance."
Recent Highlights
* NASDAQ expanded its leadership position as the largest single pool of liquidity in which to trade U.S. listed equities, matching 29.5% of all volume. NASDAQ also achieved new market share highs in the trading of NYSE-listed equities, matching a record high 18.0% of volume during the quarter. * Announced the proposed acquisition of the Boston Stock Exchange (BSE), providing NASDAQ with a second exchange license and, subject to SEC approval, utilization of the BSE Clearing Corporation. * NASDAQ has agreed to acquire all the shares of OMX that Borse Dubai has acquired or will acquire through its August 9 announced offer for OMX. NASDAQ's acquisition of OMX has received the support of the OMX Board and OMX's largest shareholders. * NASDAQ has agreed to acquire a 33 1/3% interest in DIFX, a subsidiary of Borse Dubai, and an international stock exchange located in Dubai. Working with DIFX, NASDAQ intends to develop DIFX into a regional center for capital formation. * Completed the sale of NASDAQ's share capital of the London Stock Exchange for a $431.4 million pre-tax gain. Of the $1.8 billion in proceeds generated from the sale, $1.1 billion was used to retire outstanding debt obligations. * Launched the Portal Market, NASDAQ's electronic trading platform for 144A private placement securities. This market is designed to encourage capital formation by improving the efficiency and transparency of the private placement market. * Began operation of The NASDAQ ETF Market, designed specifically for exchange traded funds (ETFs) and Index Linked Notes (ILNs), further strengthening NASDAQ's leadership position in the U.S. ETF sector. * Launched the Select Market Maker Program, a certification program designed to recognize market makers who offer the highest levels of quoting and execution quality in NASDAQ-listed securities. Investors, NASDAQ-listed companies, funds, and prospective public companies benefit from the Select Market Maker Program through the ability to identify which firms continuously provide high-quality liquidity. * Launched NASDAQ Data Store, which provides online access to innovative data tools for institutional and individual investors. NASDAQ was also recognized as the world's premier stock exchange for data feeds for the second consecutive year in the annual Waters Rankings.
2007 Outlook
NASDAQ expects the following results for the full-year 2007:
* Net income in the range of $501.0 million to $507.0 million for the year. * Net exchange revenues in the range of $800.0 million to $810.0 million. * Total operating expenses in the range of $435.0 million to $445.0 million.
These estimates include the impact of the pre-tax gain of $431.4 million and other non-recurring items noted above.
"NASDAQ is in its strongest financial condition since becoming a public company," commented NASDAQ's Chief Financial Officer, David Warren. "We've paid down our INET-bank debt in a little under two years and have $1.3 billion in cash on the balance sheet. Looking forward we will continue to focus on revenue growth and free cash flow generation, while maintaining our strict focus on cost control and leveraging our fixed-cost platform. The strength of our core businesses and our strong cash position give us the ability to continue to be opportunistic and invest in areas that will benefit our shareholders and customers."
Financial Review
Net exchange revenues increased 22.7% in the third quarter to $210.0 million, up from $171.2 million in the prior year quarter, and up 5.7% from $198.7 million reported in the second quarter of 2007.
Market Services
Market Services net exchange revenues increased to $136.7 million, up 22.8% from the prior year quarter, and up 6.9% from the prior quarter.
Three Months Ended % Variance from
--------------------------- ---------------
(in millions Sept 30 June 30 Sept 30 Prior Prior
of dollars) 2007 2007 2006 Quarter Year
------- ------- ------- ------- -----
NASDAQ Market Center
Execution and trade
reporting revenues $514.2 $426.1 $286.7 20.7% 79.4%
Access services
revenues 19.1 19.0 15.6 0.5% 22.4%
Tape fee revenue
sharing (6.5) (7.0) (5.4) (7.1)% 20.4%
-------- ------- -------
Total NASDAQ Market
Center revenues 526.8 438.1 296.9 20.2% 77.4%
Cost of revenues
Liquidity rebates (291.2) (238.3) (153.2) 22.2% 90.1%
Brokerage, clearance
and exchange fees (150.8) (121.2) (78.5) 24.4% 92.1%
-------- ------- -------
Total cost of revenues (442.0) (359.5) (231.7) 22.9% 90.8%
-------- ------- -------
Revenues less liquidity
rebates, brokerage,
clearance and exchange
fees from NASDAQ
Market Center 84.8 78.6 65.2 7.9% 30.1%
NASDAQ Market Services
Subscriptions
Proprietary revenues 22.8 21.1 18.0 8.1% 26.7%
Non-proprietary revenues 34.7 33.7 29.5 3.0% 17.6%
NASDAQ Revenue Sharing
Programs (1.4) (1.5) (2.0) (6.7)% (30.0)%
UTP Plan revenue
sharing (12.4) (11.6) (6.9) 6.9% 79.7%
-------- ------- -------
Total NASDAQ Market
Services 43.7 41.7 38.6 4.8% 13.2%
Subscriptions revenues
Other Market Services
revenues 8.2 7.6 7.5 7.9% 9.3%
-------- ------- -------
Revenues less
liquidity rebates,
brokerage, clearance
and exchange fees
from Market
Services $136.7 $127.9 $111.3 6.9% 22.8%
======== ======= =======
* Increases in NASDAQ Market Center net exchange revenues from the
prior year quarter are primarily due to increases in trade
execution market share of NYSE- and AMEX-listed equities. Total
NYSE-listed share volume reported to NASDAQ increased from 27.5% in
the third quarter of 2006 to 35.0% in the third quarter of 2007,
while total AMEX-listed share volume reported to NASDAQ increased
from 47.7% to 52.4% for the same period. Increases when compared
to the second quarter are primarily due to higher traded share
volume matched in the NASDAQ Market Center, which increased
19.6% during the quarter. Included in execution and trade
reporting revenues in the third quarter are $94.2 million in SEC
Section 31 fees, compared with $73.1 million in the second quarter
and $45.8 million in the third quarter of 2006. Corresponding cost
of revenues reflecting the reimbursement of these fees to the SEC
are included in brokerage, clearance and exchange fees.
* Market Services Subscriptions revenues increased from the prior
year quarter and second quarter of this year as growth in
subscriber populations drove proprietary and non-proprietary
revenues higher. Also contributing to the increase when compared
to the prior year quarter is a decline in the amount of revenues
shared through NASDAQ Revenue Sharing Programs, which resulted from
changes to the plan structure. Somewhat offsetting these increases
are higher revenues shared with UTP Plan participants due to higher
non-proprietary revenues as well as a decline in NASDAQ's total UTP
market share.
Issuer Services
During the third quarter Issuer Services revenues increased 22.4% to $73.2 million from the prior year quarter and increased 3.5% from prior quarter.
Three Months Ended % Variance from
--------------------------- ---------------
(in millions Sept 30 June 30 Sept 30 Prior Prior
of dollars) 2007 2007 2006 Quarter Year
------- ------- ------- ------- -----
Corporate Client Group
Annual renewal fees $31.6 $31.1 $27.3 1.6% 15.8%
Listing of additional
shares fees 10.4 10.1 9.4 3.0% 10.6%
Initial listing fees 5.6 5.5 5.6 1.8% --
Corporate Client
services 13.9 13.2 10.4 5.3% 33.7%
------- ------- -------
Total Corporate
Client Group
revenues 61.5 59.9 52.7 2.7% 16.7%
------- ------- -------
NASDAQ Financial
Products
Licensing revenues 10.6 9.0 6.0 17.8% 76.7%
Other revenues 1.1 1.8 1.1 (38.9)% --
-------- ------- -------
Total NASDAQ Financial
Products revenues 11.7 10.8 7.1 8.3% 64.8%
-------- ------- -------
Total Issuer Services
revenues $73.2 $70.7 $59.8 3.5% 22.4%
======== ======= =======
* Increases in Corporate Client Group revenues from prior year are
driven primarily by revised annual renewal fees introduced earlier
this year. Also contributing to the increase are higher revenues
generated within NASDAQ's Corporate Client services, which are due
to recent acquisitions and expanded customer use of services.
Increases from the prior quarter are driven by fees generated from
new listings as well as increasing customer utilization of NASDAQ's
Corporate Client services.
* NASDAQ Financial Products revenues increased from the prior year
quarter and the second quarter due to an increase in fees
associated with NASDAQ-licensed ETFs.
Total Operating Expenses
Total operating expenses increased 22.1% to $126.1 million from $103.3 million in the prior year quarter and increased 26.5% from $99.7 million in the prior quarter. Third quarter 2007 expenses increased from last year and prior quarter primarily due to a pre-tax charge of $19.5 million associated with tax benefits shared with strategic investors and a pre-tax charge of $5.8 million related to the early extinguishment of debt.
Earnings Per Share
Third quarter earnings per diluted share were $2.41 versus $0.22 per diluted share in the prior year quarter, and $0.39 in the second quarter of 2007. NASDAQ's weighted average shares outstanding used to calculate diluted earnings per share were 152.3 million in the quarter versus 150.8 million in the year-ago quarter and 152.0 million in the second quarter of 2007.
NASDAQ is the largest U.S. equities exchange. With over 3,100 companies, it lists more companies and, on average, trades more shares per day than any other U.S. market. It is home to companies that are leaders across all areas of business including technology, retail, communications, financial services, transportation, media and biotechnology. NASDAQ is the primary market for trading NASDAQ-listed stocks as well as a leading liquidity pool for trading NYSE-listed stocks. For more information about NASDAQ, visit the NASDAQ Web site at www.nasdaq.com or the NASDAQ Newsroom at www.nasdaq.com/newsroom/
Non-GAAP Information
In addition to disclosing results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), NASDAQ also discloses certain non-GAAP results of operations, including total expenses, operating income, net income and diluted earnings per share, that exclude certain charges and gains that are described in the reconciliation table of non-GAAP to GAAP information provided at the end of this release. Management believes that this non-GAAP information provides investors with additional information to assess NASDAQ's operating performance by excluding these costs and gains and assists investors in comparing our operating performance to prior periods. Management uses this non-GAAP information, along with GAAP information, in evaluating its historical operating performance.
The non-GAAP information is not prepared in accordance with GAAP and may not be comparable to non-GAAP information used by other companies. The non-GAAP information should not be viewed as a substitute for, or superior to, other data prepared in accordance with GAAP.
Cautionary Note Regarding Forward-Looking Statements
Information set forth in this communication contains forward-looking statements, which involve a number of risks and uncertainties. NASDAQ cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. Such forward-looking statements include, but are not limited to, projections about our future financial results and statements about the implementation dates and benefits of certain strategic initiatives, including the transactions contemplated by NASDAQ's agreements with Borse Dubai, OMX AB and the Boston Stock Exchange, and other statements that are not historical facts. Forward-looking statements involve a number of risks, uncertainties or other factors beyond NASDAQ's control. These factors include, but are not limited to, NASDAQ's ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors detailed in NASDAQ's filings with the U.S. Securities Exchange Commission, including its annual report on Form 10-K for the fiscal year ending December 31, 2006 which is available on NASDAQ's website at http://www.nasdaq.com and the SEC's website at www.sec.gov. NASDAQ undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
Notice to OMX shareholders
While NASDAQ's offer for OMX is being made to all holders of OMX shares, this document does not constitute an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities of OMX or an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities of NASDAQ in any jurisdiction in which the making of the offer or the acceptance of any tender of shares therein would not be made in compliance with the laws of such jurisdiction. In particular, NASDAQ's offer is not being made, directly or indirectly, in or into Australia, Canada, Japan or South Africa. While NASDAQ reserves the right to make the offer in or into the United Kingdom or any other jurisdiction pursuant to applicable exceptions or following appropriate filings and prospectus or equivalent document publication by NASDAQ in such jurisdictions, pending such filings or publications and in the absence of any such exception NASDAQ's offer is not made in any such jurisdiction.
Additional Information About the NASDAQ/OMX Transaction
On August 7, 2007, NASDAQ filed with the SEC a Registration Statement on Form S-4 that includes a preliminary proxy statement of NASDAQ that also constitutes a prospectus of NASDAQ. On October 12, 2007, NASDAQ filed with the SEC a preliminary proxy statement on Schedule 14A relating to the proposed transactions with Borse Dubai and OMX. Investors and security holders are urged to read the preliminary proxy statements, prospectus and the definitive proxy statement when it becomes available, as well as any amendments and other applicable documents regarding the proposed business combination because those documents contain, or will contain, important information. You may obtain a free copy of those documents and other related documents filed by NASDAQ with the SEC at the SEC's website at www.sec.gov. The preliminary proxy statements and prospectus and the other documents may also be obtained for free by accessing NASDAQ's website at http://www.nasdaq.com.
NASDAQ and its directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from NASDAQ stockholders in respect of the transactions described in this communication. You can find information about NASDAQ's executive officers and directors in NASDAQ's definitive proxy statement filed with the SEC on April 20, 2007. You can obtain free copies of these documents and of the preliminary proxy statements and prospectus from NASDAQ by accessing NASDAQ's website at http://www.nasdaq.com. Additional information regarding the interests of such potential participants is included in the preliminary proxy statements and prospectus and may be included in the other relevant documents filed with the SEC when they become available.
NDAQF
The Nasdaq Stock Market, Inc.
Unaudited Condensed Consolidated Statements of Income
(in millions, except per share amounts and other drivers)
Three Months Ended Nine Months Ended
--------------------------- ------------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
2007 2007 2006 2007 2006
-------- -------- -------- -------- --------
Revenues
Market Services $ 578.7 $ 487.4 $ 343.0 $1,561.6 $1,027.9
Issuer Services 73.2 70.7 59.8 210.3 182.0
Other 0.1 0.1 0.1 0.2 0.4
-------- -------- -------- -------- --------
Total revenues 652.0 558.2 402.9 1,772.1 1,210.3
Cost of revenues
Liquidity rebates (291.2) (238.3) (153.2) (754.7) (491.0)
Brokerage, clearance
and exchange fees (150.8) (121.2) (78.5) (416.7) (215.0)
-------- -------- -------- -------- --------
Total cost of
revenues (442.0) (359.5) (231.7) (1,171.4) (706.0)
-------- -------- -------- -------- --------
Revenues less
liquidity rebates,
brokerage,
clearance and
exchange fees 210.0 198.7 171.2 600.7 504.3
-------- -------- -------- -------- --------
Operating Expenses
Compensation and
benefits 52.0 49.7 47.5 145.9 144.5
Marketing and
advertising 4.1 4.2 3.5 13.2 12.3
Depreciation and
amortization 9.7 9.8 14.3 29.3 60.3
Professional and
contract services 6.4 8.7 6.8 23.5 23.0
Computer operations and
data communications 6.6 7.9 9.5 22.8 29.7
Provision for bad debts 0.2 (1.4) (2.2) 2.3 (0.3)
Occupancy 8.2 9.0 9.5 26.1 25.7
Regulatory 7.7 7.1 -- 21.5 --
General,
administrative
and other 31.2 4.7 5.8 52.0 37.3
-------- -------- -------- -------- --------
Total direct
expenses 126.1 99.7 94.7 336.6 332.5
Support costs from
related parties, net -- -- 8.6 -- 25.8
-------- -------- -------- -------- --------
Total operating
expenses 126.1 99.7 103.3 336.6 358.3
-------- -------- -------- -------- --------
Operating income 83.9 99.0 67.9 264.1 146.0
Interest income 9.5 7.7 7.6 22.9 18.3
Interest expense (23.4) (23.6) (25.7) (70.5) (66.5)
Dividend income -- 14.5 -- 14.5 9.2
Gain (loss) on foreign
currency option
contracts 35.2 (1.7) -- 25.7 --
Gain on sale of
strategic initiative 431.4 -- -- 431.4 --
Strategic initiative
costs -- (1.6) -- (26.5) --
Minority interest -- -- 0.1 0.1 0.6
-------- -------- -------- -------- --------
Income before
income taxes 536.6 94.3 49.9 661.7 107.6
Income tax provision 171.6 38.2 19.7 222.3 42.7
-------- -------- -------- -------- --------
Net income $ 365.0 $ 56.1 $ 30.2 $ 439.4 $ 64.9
======== ======== ======== ======== ========
Net income applicable
to common
stockholders:
Net income $ 365.0 $ 56.1 $ 30.2 $ 439.4 $ 64.9
Preferred stock:
Dividends
declared -- -- -- -- (0.4)
Accretion of
preferred stock -- -- -- -- (0.3)
-------- -------- -------- -------- --------
Net income applicable
to common
stockholders $ 365.0 $ 56.1 $ 30.2 $ 439.4 $ 64.2
======== ======== ======== ======== ========
Basic and diluted
earnings per share:
Basic $ 3.23 $ 0.50 $ 0.27 $ 3.90 $ 0.63
======== ======== ======== ======== ========
Diluted $ 2.41 $ 0.39 $ 0.22 $ 2.94 $ 0.51
======== ======== ======== ======== ========
Weighted average
common shares
outstanding for
earnings per share:
Basic 113.2 112.7 111.7 112.8 101.7
Diluted 152.3 152.0 150.8 151.9 141.7
Other Drivers
-------------
Average daily share
volume in NASDAQ
securities (mn) 2,181 2,135 1,852 2,158 2,038
Matched market share in
NASDAQ securities (a) 47.3% 46.1% 48.7% 46.3% 49.1%
Total market share in
NASDAQ securities (b) 70.5% 72.3% 76.6% 72.4% 78.2%
Matched market share in
NYSE securities (a) 18.0% 15.9% 12.1% 16.5% 9.1%
Total market share in
NYSE securities (b) 35.0% 34.5% 27.5% 34.4% 24.1%
Matched market share in
AMEX and regional
securities (a) 34.2% 32.4% 25.3% 32.5% 24.2%
Total market share in
AMEX and regional
securities (b) 52.4% 53.3% 47.7% 52.6% 45.9%
Listings
Initial public offerings 22 38 20 95 87
Secondary offerings 35 67 32 156 152
Number of listed
companies (c) 3,134 3,164 3,206 3,134 3,206
(a) Transactions executed on NASDAQ's systems.
(b) Transactions executed on NASDAQ's systems plus trades reported
through the Trade Reporting Facility, LLC for 2007. For 2006,
transactions executed on NASDAQ's systems and internal trades
reported to NASDAQ.
(c) At September 30, 2007 and June 30, 2007, number of listed
companies also includes separately listed ETFs.
The Nasdaq Stock Market, Inc.
Condensed Consolidated Balance Sheets
(in millions)
September 30, December 31,
2007 2006
------------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 1,258.7 $ 322.0
Available-for-sale investments, at
fair value 9.2 1,628.2
Receivables, net 274.1 233.3
Deferred tax assets 104.7 11.1
Other current assets 64.2 118.0
----------- -----------
Total current assets 1,710.9 2,312.6
Property and equipment, net 62.0 65.3
Non-current deferred tax assets 58.0 97.0
Goodwill 975.7 1,028.7
Intangible assets, net 186.5 199.6
Other assets 6.9 13.3
----------- -----------
Total assets $ 3,000.0 $ 3,716.5
=========== ===========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued
expenses $ 127.5 $ 110.6
Section 31 fees payable to SEC 19.7 60.1
Accrued personnel costs 47.1 55.6
Deferred revenue 93.8 56.4
Income tax payable 160.8 44.1
Other accrued liabilities 75.7 28.0
Deferred tax liabilities 0.2 95.0
Current portion of debt obligations -- 10.7
----------- -----------
Total current liabilities 524.8 460.5
Debt obligations 443.1 1,493.0
Non-current deferred tax liabilities 91.1 115.8
Non-current deferred revenue 93.8 90.6
Other liabilities 66.5 99.1
----------- -----------
Total liabilities 1,219.3 2,259.0
Minority interest -- 0.1
Stockholders' equity
Common stock 1.3 1.3
Preferred stock -- --
Additional paid-in capital 1,063.9 1,046.6
Common stock in treasury, at cost (225.2) (239.7)
Accumulated other comprehensive income (10.7) 136.2
Retained earnings 951.4 513.0
----------- -----------
Total stockholders' equity 1,780.7 1,457.4
----------- -----------
Total liabilities, minority interest
and stockholders' equity $ 3,000.0 $ 3,716.5
=========== ===========
The Nasdaq Stock Market, Inc.
Reconciliation of GAAP Earnings
(in millions, except per share amounts)
(unaudited)
Three Months Ended
-------------------------------------------
September 30, June 30, March 31,
2007 2007 2007
------------- -------- ---------
GAAP Total
Operating
Expenses: $ 126.1 $ 99.7 $ 110.7
----------
Adjustments:
Technology Review -- 0.9 0.7
Real Estate
Consolidation -- -- --
Workforce
Reductions 1.1 1.1 1.4
Extinguishment of
Credit Facility 5.8 -- --
Foreign Currency
Gain -- -- --
Pension Plan and
SERP Freeze -- 0.4 (6.5)
Clearing Contract -- -- 10.6
Debt Issuance
Costs -- -- --
Tax Sharing
Payment 19.5 -- --
----------- -------- --------
Total Adjustments 26.4 2.4 6.2
----------- -------- --------
Non-GAAP Total
Expenses $ 99.7 $ 97.3 $ 104.5
=========== ======== ========
GAAP Operating
Income: $ 83.9 $ 99.0 $ 81.4
--------------
Adjustments:
Technology Review -- 0.9 0.7
Real Estate
Consolidation -- -- --
Workforce
Reductions 1.1 1.1 1.4
Extinguishment of
Credit Facility 5.8 -- --
Foreign Currency
Gain -- -- --
Pension Plan and
SERP Freeze -- 0.4 (6.5)
Clearing Contract -- -- 10.6
Debt Issuance
Costs -- -- --
Tax Sharing
Payment 19.5 -- --
----------- -------- --------
Total Adjustments 26.4 2.4 6.2
----------- -------- --------
Non-GAAP Operating
Income $ 110.3 $101.4 $ 87.6
=========== ======== ========
GAAP Net Income: $ 365.0 $ 56.1 $ 18.3
----------------
Adjustments:
Technology Review -- 0.5 0.4
Real Estate
Consolidation -- -- --
Workforce
Reductions 0.7 0.7 0.8
Extinguishment of
Credit Facility 3.5 -- --
Foreign Currency
Gain -- -- --
Pension Plan and
SERP Freeze -- 0.2 (3.9)
Clearing Contract -- -- 6.4
Debt Issuance
Costs -- -- --
Dividend Income -- (9.4) --
Tax Sharing
Payment 11.8 -- --
(Gain) Loss on
Foreign Currency
Option Contracts (21.3) 1.0 4.7
Strategic
Initiative Costs -- 1.0 15.1
Gain on Sale of
Strategic
Initiative (297.6) -- --
----------- -------- --------
Total Adjustments (302.9) (6.0) 23.5
----------- -------- --------
Non-GAAP Net Income $ 62.1 $ 50.1 $ 41.8
=========== ======== ========
GAAP Earnings per
Common Share:
-----------------
Diluted Earnings
per Common Share $ 2.41 $ 0.39 $ 0.14
Adjustments:
Total Adjustments
from GAAP Net
Income Above: (1.99) (0.04) 0.15
----------- -------- --------
Non-GAAP Diluted
Earnings per
Common Share $ 0.42 $ 0.35 $ 0.29
=========== ======== ========
Three Months Ended
-------------------------------------------------
December 31, September 30, June 30, March 31,
2006 2006 2006 2006
------------ ------------- -------- ----------
GAAP Total
Operating
Expenses: $ 115.0 $ 103.3 $ 134.8 $ 120.2
----------
Adjustments:
Technology Review 3.3 3.4 9.9 11.9
Real Estate
Consolidation -- 0.5 5.4 --
Workforce
Reductions 1.3 0.9 2.6 1.7
Extinguishment of
Credit Facility -- -- 20.9 --
Foreign Currency
Gain -- -- (8.2) --
Pension Plan and
SERP Freeze -- -- -- --
Clearing Contract -- -- -- --
Debt Issuance
Costs 1.1 -- -- --
Tax Sharing
Payment -- -- -- --
------------ ------------- -------- ----------
Total Adjustments 5.7 4.8 30.6 13.6
------------ ------------- -------- ----------
Non-GAAP Total
Expenses $ 109.3 $ 98.5 $ 104.2 $ 106.6
============ ============= ======== ==========
GAAP Operating
Income: $ 68.1 $ 67.9 $ 36.3 $ 41.8
--------------
Adjustments:
Technology Review 3.3 3.4 9.9 11.9
Real Estate
Consolidation -- 0.5 5.4 --
Workforce
Reductions 1.3 0.9 2.6 1.7
Extinguishment of
Credit Facility -- -- 20.9 --
Foreign Currency
Gain -- -- (8.2) --
Pension Plan and
SERP Freeze -- -- -- --
Clearing Contract -- -- -- --
Debt Issuance
Costs 1.1 -- -- --
Tax Sharing
Payment -- -- -- --
------------ ------------- -------- ----------
Total Adjustments 5.7 4.8 30.6 13.6
------------ ------------- -------- ----------
Non-GAAP Operating
Income $ 73.8 $ 72.7 $ 66.9 $ 55.4
============ ============= ======== ==========
GAAP Net Income: $ 63.0 $ 30.2 $ 16.6 $ 18.0
----------------
Adjustments:
Technology Review 2.0 2.1 6.0 7.2
Real Estate
Consolidation -- 0.3 3.3 --
Workforce
Reductions 0.8 0.5 1.6 1.0
Extinguishment of
Credit Facility -- -- 12.7 --
Foreign Currency
Gain -- -- (5.0) --
Pension Plan and
SERP Freeze -- -- -- --
Clearing Contract -- -- -- --
Debt Issuance
Costs 0.7 -- -- --
Dividend Income (4.6) -- (6.0) --
Tax Sharing
Payment -- -- -- --
(Gain) Loss on
Foreign Currency
Option Contracts (29.4) -- -- --
Strategic
Initiative Costs -- -- -- --
Gain on Sale of
Strategic
Initiative -- -- -- --
------------ ------------- -------- ----------
Total Adjustments (30.5) 2.9 12.6 8.2
------------ ------------- -------- ----------
Non-GAAP Net Income $ 32.5 $ 33.1 $ 29.2 $ 26.2
============ ============= ======== ==========
GAAP Earnings per
Common Share:
-----------------
Diluted Earnings
per Common Share $ 0.43 $ 0.22 $ 0.13 $ 0.16
Adjustments:
Total Adjustments
from GAAP Net
Income Above: (0.20) 0.02 0.09 0.06
------------ ------------- -------- ----------
Non-GAAP Diluted
Earnings per
Common Share $ 0.23 $ 0.24 $ 0.22 $ 0.22
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