NYSE Euronext (NYX) today reported net income of $230 million, or $0.87 per diluted share, for the quarter ended Mar. 31, 2008, a $162 million or 238% increase as compared to net income of $68 million, or $0.43 per diluted share, for the quarter ended Mar. 31, 2007. These results are presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The comparative results for 2007 reflect the operations of NYSE Group only.
"Our strong performance in the first quarter of 2008 highlights the growing demand for our broad array of products and services across all of our business units and the inherent operating leverage in NYSE Euronext's diverse business model," said Duncan L. Niederauer, CEO, NYSE Euronext. "We are very pleased with the growth in our transaction-related revenues, which underscores our leadership position in an increasingly competitive environment. We remain focused on executing our global growth strategy, operating with the utmost efficiency, strengthening our competitive position, and providing exceptional customer and shareholder value."
Joost van der Does de Willebois, Acting CFO, NYSE Euronext, added, "In addition to producing strong revenue growth, we are well on target to achieve our annual $250 million in technology-run rate savings. In the first quarter, we achieved $70 million in annual IT run-rate savings, which exceeds our previously announced $50 million goal."
On a non-GAAP basis, giving effect to the Euronext transaction as if it occurred at the beginning of the earliest period presented, and excluding merger expenses and exit costs, the net income of NYSE Euronext for the quarter ended Mar. 31, 2008 would have been $241 million, or $0.91 per diluted share, an $83 million or 53% increase versus non-GAAP net income of $158 million, or $0.60 per diluted share, for the quarter ended Mar. 31, 2007. A full reconciliation of these non-GAAP results is included in the attached tables.
At constant US$/EUR and US$/GBP exchange rates, neutralizing the impact of acquisitions and dispositions of businesses and equity investments for the period, and on a non-GAAP basis, NYSE Euronext's revenues, net of activity assessment fees, for the quarter ended Mar. 31, 2008 increased $236 million, or 25%, while operating income increased $99 million, or 38%, compared to the quarter ended Mar. 31, 2007. In addition, on a normalized basis, revenues increased $129 million, or 12%, while operating income increased $93 million, or 34%, compared to the quarter ended Dec. 31, 2007. Please refer to the table entitled "Normalized operating income including non-GAAP financial measures."
During the first quarter of 2008, NYSE Euronext announced plans to acquire the American Stock Exchange, introduced NYSE Euronext Advanced Trading Solutions in connection with our acquisition of Wombat Financial Software, agreed to purchase a 5% stake in India's Multi Commodity Exchange, and entered the U.S. futures market through our acquisition of the CME Group precious metals complex.
Other Financial Highlights
-- On a non-GAAP basis, net transaction revenues, defined as cash
and derivatives trading revenues net of liquidity payments and
routing and clearing expenses, increased $138 million or 39%
for the three months ended Mar. 31, 2008 versus the year ago
period.
-- As a result of the NYSE Euronext merger, and following the
reorganization of certain of our businesses, the effective tax
rate of NYSE Euronext on a non-GAAP basis was 30.0% for the
three months ended Mar. 31, 2008 as compared to 35.0% for the
same period a year ago and 32.5% for the three months ended
Dec. 31, 2007.
-- As of Mar. 31, 2008, NYSE Euronext had a strong financial
position with $1,674 million of cash, cash equivalents,
investment and other securities (including $124 million
related to Section 31 fees collected from market participants
and due to the U.S. Securities and Exchange Commission) and
$3,034 million in debt obligations.
-- On Apr. 23, 2008, NYSE Euronext completed its offering of EUR
750 million in aggregate principal amount of 5.375% Notes due
2015 pursuant to Regulation S under the Securities Act of
1933.
-- On Mar. 11, 2008, NYSE Euronext announced a 20% increase in
its annual dividend to $1.20 per common share; the first $0.30
quarterly dividend payment will be made on Jun. 30, 2008 to
shareholders of record as of Jun. 16, 2008. NYSE Euronext's
newly adopted policy is to grow the dividend to its
shareholders, with a target payout ratio of 35% to 45 % of net
income, while maintaining high investment grade credit
ratings.
Business Highlights
NYSE Euronext, which is comprised of six cash equities exchanges in five countries and six derivatives exchanges in six countries, is a world leader for listings, trading in cash equities, equity and interest rate derivatives, and the distribution of market data. NYSE Euronext represents a $27.3 / EUR 17.3 trillion total market capitalization of listed companies and average daily trading value of $169.6 / EUR 113.2 billion (as of Mar. 31, 2008). NYSE Euronext's cash equity exchanges in Europe and the U.S. achieved new all-time quarterly volume records for the quarter ended Mar. 31, 2008 with 103 million transactions and 191 billion shares traded, respectively.
-- Liffe
-- NYSE Euronext's European derivatives trading platform, Liffe,
continued its strong 2007 performance with new all-time record
quarter for the three months ended March 31, 2008. Total trading
volume on Liffe was up 29% in the first quarter of 2008 compared
to the same period in 2007, with volumes in commodities products
up 56%, in total interest rate products up 41%, and BClear
trading up 53%.
-- Liffe, following approval from the board of LCH.Clearnet Group
Ltd, announced that it is to negotiate a new contract with
LCH.Clearnet. These negotiations are ongoing.
-- NYSE Arca Options
-- As the U.S. options industry's fastest growing exchange, NYSE
Arca Options experienced volume growth of 70% during the first
quarter of 2008 compared to the first quarter of 2007. NYSE Arca
Options share of trading in equity option contracts increased 1.8
percentage points to 14.5% during the first quarter of 2008
compared to the same period a year ago.
-- NYSE Arca Options continues to be a leader in the trading of
issues in the SEC Penny Pilot with a 17.6% share of trading
through March 2008, including an industry-leading 8.3 percentage
point increase in share of trading since the first quarter of
2007. In March 2008, the SEC expanded the options Penny Pilot
program to include 63 total issues representing approximately 58%
of industry-wide options volume.
-- European Cash Markets
-- During the first quarter of 2008, NYSE Euronext's European
equities markets registered a 39% increase in total volume led by
strong gains of 66% and 41% in ETFs and core equities trading,
respectively.
-- Euronext also reached a new record high in quarterly
transaction activity for the three months ended Mar. 31, 2008,
with record activity of 1.6 million transactions per day on
average.
-- U.S. Cash Markets
-- NYSE Group, NYSE Euronext's U.S. trading operations, achieved a
new record average daily volume of 3.6 billion shares traded per
day. Our U.S. cash markets also produced a substantial quarterly
handled volume increase of 26% in overall equities trading, which
included increases of 22% in NYSE listed securities, 145% in NYSE
Arca & Amex listed securities and 91% in ETFs.
-- NYSE Group markets also established several new trading records
with new all-time quarterly volume in the first quarter of 2008,
which included the second and sixth most active days in history.
-- On Mar. 31, NYSE Arca announced transaction pricing changes
designed to deliver the most competitive rates, including the
highest rebate and lowest "take" fee, among major U.S. equity
markets for trading all NYSE-listed (Tape A) and Nasdaq-listed
(Tape C) securities. Also, NYSE Arca Options reduced the
liquidity "take" rate for all market participants in penny pilot
issues and will provide a higher rebate for active liquidity
providers.
-- Listings
-- NYSE Euronext maintained its ETF leadership position with 548
ETFs listed in the U.S. and Europe combined. No other exchange
group lists more products or trades more shares around the world
than NYSE Euronext.
-- On Mar. 19, 2008, Visa Inc., the world's largest retail
electronic payment network, began trading on the NYSE under the
ticker symbol "V" after its historic initial public offering in
which it raised $17.86 billion. Visa's IPO is the largest
domestic initial public offering in U.S. history and the third
largest initial public offering worldwide.
-- Market Data
-- In the first three months of 2008, the number of NYSE (Tape A)
professional subscribers grew 6.0% to reach 456,752 as of Mar. 31,
2008, while the number of Euronext terminals grew 7.0% versus the
same period in 2007 to reach 222,630 as of Mar. 31, 2008.
Other Highlights for the First Quarter 2008
-- Jan. 7 - The Securities and Exchange Commission approved the
rules for NYSE MatchPoint, a new, portfolio-based,
point-in-time electronic facility of the NYSE that matches
aggregated orders at predetermined sessions throughout regular
hours and after hours of the Exchange.
-- Jan. 17 - NYSE Euronext announced its intent to acquire the
American Stock Exchange for $260 million in stock and
additional stock based on the net proceeds of the sale of the
Amex headquarters in a strategic transaction that strengthens
the company's U.S. options, ETF and cash product offerings.
-- Jan. 22 - NYSE Euronext, in a joint venture with Caisse des
Depots, launched BlueNext, the international exchange for the
environment, operating markets in carbon emission allowances
and credits.
-- Jan. 23 - Satyam Computer Services (NYSE: SAY/Euronext:
SAYE/NSE: SATY), a leading global information technology
solutions provider headquartered in Hyderabad, India, became
the first NYSE-listed company to cross-list on NYSE Euronext
in Europe and the U.S., using the convenient, cost-effective
fast-path process, which relies on existing U.S. registration
documents for its European listing. Phillip Morris
International (PM) also cross-listed on March 31.
-- Jan. 28 & 29 - NYSE Euronext continued its product and service
expansion in Asia by adding resources and personnel in the
Singapore and Tokyo offices.
-- Jan. 31 - Liffe announced a major expansion of its Bclear
wholesale service with the listing of flexible Universal Stock
Futures (USFs) on an additional 112 underlyings and flexible
Individual Equity Options on an additional 41 underlyings,
bringing the total number of underlyings on which futures and
options contracts are available on Bclear to 970, offering
Liffe customers more single stock futures on the Dow Jones
STOXX(R) 600 constituents than any other exchange.
-- Feb. 6 - The largest European IPO of the quarter took place on
NYSE Euronext's European market when Liberty International
raised EUR 600 million.
-- Feb. 15 - NYSE Euronext announced its intention to purchase,
subject to regulatory approvals, a 5% stake in India's Multi
Commodity Exchange (MCX), the country's leading commodity
marketplace.
-- Feb. 19 - NYSE Euronext announced the launch of Prime Source
NYSE Euronext, a new independent comprehensive valuation
service. This innovative solution is designed to meet
professional buy-side market participants' needs for valuation
of large, global portfolios of complex structured products and
illiquid securities. Customers' valuation needs will be
facilitated by efficient and sophisticated processes supported
by Prime Source's unique, web-based technical infrastructure.
-- Mar. 7 - Upon the completion of the Wombat Financial Software
acquisition, NYSE Euronext introduced a new commercial
technology business unit, NYSE Euronext Advanced Trading
Solutions, a combination of NYSE TransactTools, Wombat and
SFTI.
-- Mar. 12 -NYSE Arca launched a first-of-its-kind routing and
price improvement service offering clients access to
non-displayed liquidity through the addition of routing to
participating broker-dealers and Alternative Trading Systems
(ATSs).
-- Mar. 14 - NYSE Euronext acquired the CME Group Precious Metals
Complex, giving NYSE Euronext a point of entry in the U.S.
futures business.
-- Mar. 18 - NYSE Euronext and the Abu Dhabi Securities Market
(ADSM) entered into a cooperation agreement to jointly develop
and explore new opportunities in trading systems and other
related technology, investor and issuer services, and
investment products.
-- Mar. 18 - The NYSE Euronext board of directors authorized the
repurchase of up to $1 billion of NYSE Euronext's common
stock, subject to U.S. and European regulations, strategic
considerations, market conditions and other factors, and a 20%
increase in its annual dividend as part of a dividend policy
to grow the dividend, achieve a target payout ratio of 35-45%
of net income while maintaining high investment grade ratings.
-- Mar. 19 - Visa Inc., the largest domestic initial public
offering in U.S. history, began trading on the NYSE under the
ticker symbol "V".
-- Mar. 25 - NYSE Euronext's Alternext welcomed its first Chinese
company with the initial listing in Paris of China Corn Oil,
the largest specialist producer and exporter of edible corn
oil in China. Huacheng Real Estate followed as the second
Chinese company to list on its Alternext in April.
-- Mar. 25 - Liffe announced that it would negotiate a new
contract with LCH.Clearnet.
Analyst/Investor/Media Briefing: Tues., May 6, 2008, 8:00a.m. (NY/EST)/2:00p.m. (Paris, CET)
Live Dial-in Information: ---------------------------------------------------------------------- United States: (800) 798-2864 International: (617) 614-6206 Passcode: 41307791 Replay Dial-in Information: ---------------------------------------------------------------------- United States: (888) 286-8010 International: (617) 801-6888 Passcode: 94016917 available 5/6 - 5/13
The results of operations of Euronext N.V. for the three months ended Mar. 31, 2008 are reported under U.S. GAAP under the caption "European Operations" in the accompanying tables. Questions regarding Euronext N.V.'s results should be directed to Investor Relations (contact details provided above).
Note:
Based on first quarter 2008 non-GAAP net revenues (excluding activity assessment fees, and liquidity payments, routing and clearing fees), NYSE Euronext revenues from its primary business activities are represented below as a percentage of total net revenues:
-- Derivatives trading accounts for 25%
-- European cash trading accounts for 20%
-- U.S. cash trading accounts for 13%
-- Market data accounts for 12%
-- Listing accounts for 12%
-- Software and technology services accounts for 13%
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 and exit costs, and other non-recurring items, and (ii) to 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) operates the world's leading and most liquid exchange group, and seeks to provide the highest levels of quality, customer choice and innovation. Its family of exchanges, located in six countries, includes the New York Stock Exchange, the world's largest cash equities market; Euronext, the Eurozone's largest cash equities market; Liffe, Europe's leading derivatives exchange by value of trading; and NYSE Arca Options, one of the fastest growing U.S. options trading platforms. NYSE Euronext offers a diverse array of financial products and services for issuers, investors and financial institutions in cash equities, options and derivatives, ETFs, bonds, market data, and commercial technology solutions. NYSE Euronext's nearly 4,000 listed companies represent a combined $27.3 / EUR 17.3 trillion in total global market capitalization (as of March 31, 2008), more than four times that of any other exchange group. NYSE Euronext's equity exchanges transact an average daily trading value of approximately $169.6 / EUR 113.2 billion (as of March 31, 2008), which represents more than one-third of the world's cash equities trading. NYSE Euronext is part of the S&P 500 index and the only exchange operator in the S&P 100 index. For more information, please visit www.nyx.com.
Cautionary Note Regarding Forward-Looking Statements
This press release may contain forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning NYSE Euronext's plans, objectives, expectations and intentions and other statements that are not historical or current facts. Forward-looking statements are based on NYSE Euronext's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause NYSE Euronext's results to differ materially from current expectations include, but are not limited to: NYSE Euronext's ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk and U.S. and global competition, and other factors detailed in NYSE Euronext's reference document for 2006 ("document de reference") filed with the French Autorite des Marches Financiers (Registered on June 6, 2007 under No. R.07-0089), 2007 Annual Report on Form 10-K and other periodic reports filed with the U.S. Securities and Exchange Commission or the French Autorite des Marches Financiers. In addition, these statements are based on a number of assumptions that are subject to change. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by NYSE Euronext that the projections will prove to be correct. This press release speaks only as of this date. NYSE Euronext disclaims any duty to update the information herein.
NYSE Euronext
Condensed consolidated statements of income in accordance with U.S.
GAAP (unaudited)
(in millions, except per share data)
----------------------------
Three months ended March 31,
----------------------------
2008 2007
-------------- -------------
Revenues
Activity assessment $ 102 $ 185
Cash trading 563 250
Derivatives trading 270 13
Listing 98 90
Market data 104 63
Software and technology services 106 25
Regulatory 13 50
Other 37 26
-------------- -------------
Total revenues 1,293 702
Section 31 fees (102) (185)
Merger expenses and exit costs (17) (11)
Compensation (213) (105)
Liquidity payments (273) (136)
Routing and clearing (70) (45)
Systems and communications (93) (27)
Professional services (35) (21)
Depreciation and amortization (61) (35)
Occupancy (36) (21)
Marketing and other (47) (20)
Regulatory fine income 2 5
-------------- -------------
Operating income 348 101
Net interest and investment income (loss) (19) 9
Gain on sale of equity investment 1 -
Income from associates 1 -
Other income 10 4
-------------- -------------
Income before income tax provision and
minority interest 341 114
Income tax provision (102) (46)
Minority interest (9) -
-------------- -------------
Net income $ 230 $ 68
============== =============
Basic earnings per share $ 0.87 $ 0.43
Diluted earnings per share $ 0.87 $ 0.43
Basic weighted average shares outstanding 265 157
Diluted weighted average shares
outstanding 266 158
----------------------------
NYSE Euronext
Condensed combined statements of income including non-GAAP financial
measures (unaudited)
(in millions, except per share data)
We use non-GAAP financial measures of operating performance. Non-GAAP
measures do not replace and are not superior 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 March 31, (a)
--------------------------------
2008 2007
--------------- --------------
Pro Forma Pro Forma
Combined Combined
--------------- --------------
Revenues
Cash trading $ 563 $ 368
Derivatives trading 270 192
Listing 98 95
Market data 104 104
Software and technology services 106 83
Regulatory 13 50
Other 37 37
-------------- -----------
Total revenues 1,191 929
Compensation (213) (194)(b)
Liquidity payments (273) (164)
Routing and clearing (70) (44)
Systems and communications (93) (79)
Professional services (35) (31)
Depreciation and amortization (61) (c) (71)(c)
Occupancy (36) (35)
Marketing and other (47) (44)
Regulatory fine income 2 5
-------------- -----------
Operating income 365 272
Net interest and investment loss (19) (d) (19)(d)
Income from associates 1 2
Other income 10 1
-------------- -----------
Income before income tax provision
and minority interest 357 256
Income tax provision (107) (90)
Minority interest (9) (8)
-------------- -----------
Net income $ 241 $ 158
============== ===========
Basic earnings per share $ 0.91 $ 0.60
Diluted earnings per share $ 0.91 $ 0.60
Basic weighted average shares
outstanding 265 264
Diluted weighted average shares
outstanding 266 265
--------------------------------
(a) The results of operations on NYSE Euronext are presented as if the
merger with NYSE Group and Euronext N.V. had been completed at
the beginning of the earliest period presented.
Merger expenses and exit costs of $17 million and $20 million have
been eliminated from the results of operations for the three
months ended March 31, 2008 and 2007, respectively, as they
represent nonrecurring charges directly attributable to business
combinations.
Activity assessment fees and Section 31 fees have not been
presented as they have no impact on operating income or net
income.
In addition, gains on sale of businesses and equity investments of
$1 and $0 have been eliminated from the results of operations for
the three months ended March 31, 2008 and 2007, respectively, as
they represent nonrecurring items.
(b) Includes a $13 million net curtailment gain in connection with the
elimination of certain components of our postretirement plans in
the U.S.
(c) Includes amortization expense of $17 million and $25 million
related to the fair value of the identifiable intangible assets
of Euronext for each of the three months ended March 31, 2008 and
2007, respectively.
(d) Includes interest expense of $25 million and $33 million on the
NYSE Euronext debt incurred as part of the merger with Euronext
for the three months ended March 31, 2008 and 2007, respectively.
NYSE Euronext
Condensed combined statements of income including non-GAAP financial
measures (unaudited)
(in millions, except per share data)
We use non-GAAP financial measures of operating performance. Non-GAAP
measures do not replace and are not superior 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
March 31, 2008 (a)
----------------------------------------------------
US European Corporate Pro Forma
Operations Operations Items Combined
----------- ----------- --------- ---------
Revenues
Cash trading $ 393 $ 170 $ - $ 563
Derivatives
trading 38 232 - 270
Listing 90 8 - 98
Market data 53 51 - 104
Other revenues 59 97 - 156
----------- ----------- --------- ---------
Total revenues 633 558 - 1,191
Liquidity
payments (227) (46) (273)
Routing and
clearing (70) - - (70)
Other (b) (c)
operating
expenses, net (214) (259) (10) (483)
----------- ----------- --------- ---------
Operating income 122 253 (10) 365
Net interest and (d)
investment
income (loss) (19) (19)
Income from
associates 1 1
Other income 10 10
---------
Income before
income tax
provision and
minority
interest 357
Income tax
provision (107)
Minority interest (9)
---------
Net income $ 241
=========
Basic earnings
per share $ 0.91
Diluted earnings
per share $ 0.91
Basic weighted
average shares
outstanding 265
Diluted weighted
average shares
outstanding 266
Three months ended
March 31, 2007 (a)
----------------------------------------------------
US European Corporate Pro Forma
Operations Operations Items Combined
----------- ----------- --------- ---------
Revenues
Cash trading $ 250 $ 118 $ - $ 368
Derivatives
trading 13 179 - 192
Listing 90 5 - 95
Market data 62 42 - 104
Other revenues 101 69 - 170
----------- ----------- --------- ---------
Total revenues 516 413 - 929
Liquidity
payments (136) (28) (164)
Routing and
clearing (44) - - (44)
Other (b) (c)
operating
expenses, net (219) (220) (10) (449)
----------- ----------- --------- ---------
Operating income 117 165 (10) 272
Net interest and (d)
investment
income (loss) (19) (19)
Income from
associates 2 2
Other income 1 1
---------
Income before
income tax
provision and
minority
interest 256
Income tax
provision (90)
Minority interest (8)
---------
Net income $ 158
=========
Basic earnings
per share $ 0.60
Diluted earnings
per share $ 0.60
Basic weighted
average shares
outstanding 264
Diluted weighted
average shares
outstanding 265
(a) The results of operations of NYSE Euronext are presented as if the
merger with NYSE Group and Euronext had been completed at the
beginning of the earliest period presented. Merger expenses and
exit costs of $17 million and $20 million for the three months
ended March 31, 2008 and 2007, respectively, have been eliminated
as they represent nonrecurring charges attributable to business
combinations.
Activity assessment fees and Section 31 fees have not been
presented as they have no impact on operating income or net
income.
In addition, gains on sale of businesses and equity investments of
$1 and $0 have been eliminated from the results of operations for
the three months ended March 31, 2008 and 2007, respectively, as
they represent nonrecurring items.
(b) Includes regulatory fine income of $2 million and $5 million for
the three months ended March 31, 2008 and 2007, respectively.
Also includes a $13 million net curtailment gain in connection
with the elimination of certain components of our postretirement
plans in the U.S. during the three months ended March 31, 2007.
(c) Includes amortization expense of $17 million and $25 million
related to the fair value of the identifiable intangible assets
of Euronext for both the three months ended March 31, 2008 and
2007, respectively.
(d) Includes interest expense of $25 million and $33 million on the
NYSE Euronext debt incurred as part of the merger with Euronext
for the three months ended March 31, 2008 and 2007, respectively.
NYSE Euronext
Normalized operating income including non-GAAP financial measures
(unaudited)
(in millions)
We use non-GAAP financial measures of operating performance. Non-GAAP
measures do not replace and are not superior 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
March 31, 2008 (a)
Neutralizing the impact of
--------------------------------
Pro Forma Acquisitions & Currency Normalized
Combined Dispositions (b) Translation (c) Results
--------- ---------------- --------------- ----------
Revenues
Cash trading $ 563 $ - $ (21) $ 542
Derivatives
trading 270 - (7) 263
Listing 98 - (1) 97
Market data 104 - (5) 99
Other revenues 156 20 (12) 164
-------- --------------- --------------- ---------
Total revenues 1,191 20 (46) 1,165
Liquidity
payments (273) - 1 (272)
Routing and
clearing (70) - - (70)
Fixed
operating
expenses (485) (7) 25 (467)
Regulatory
fine income 2 - - 2
-------- ---------------- --------------- ----------
Operating income $ 365 $ 13 $ (20) $ 358
========= ================ ===============
Operating margin 30.6% 30.7%
Three months ended
March 31, 2008 (a)
Neutralizing the impact of
--------------------------------
Pro Forma Acquisitions & Currency Normalized
Combined Dispositions (b) Translation (c) Results
--------- ---------------- --------------- ----------
Revenues
Cash trading $ 563 $ - $ (6) $ 557
Derivatives
trading 270 - 5 275
Listing 98 - - 98
Market data 104 - (1) 103
Other revenues 156 (1) (3) 152
Total revenues 1,191 (1) (5) 1,185
Liquidity
payments (273) - (1) (274)
Routing and
clearing (70) - - (70)
Fixed
operating
expenses (485) 4 4 (477)
Regulatory
fine income 2 - - 2
Operating income $ 365 $ 3 $ (2) $ 366
========= ================ ===============
Operating margin 30.6% 30.9%
Three months ended
March 31, 2007 Variance %
------------------ --------------------
Revenues
Cash trading $ 368
Derivatives trading 192
Listing 95
Market data 104
Other revenues 170
Total revenues 929 25%
Liquidity payments (164)
Routing and clearing (44)
Fixed operating expenses (467)(d)
Regulatory fine income 5
Operating income $ 259 38%
Operating margin 27.9%
Three months ended
December 31, 2007 Variance %
------------------ --------------------
Revenues
Cash trading $ 475
Derivatives trading 220
Listing 99
Market data 101
Other revenues 161
Total revenues 1,056 12%
Liquidity payments (218)
Routing and clearing (62)
Fixed operating expenses (514)
Regulatory fine income 11
Operating income $ 273 34%
Operating margin 25.9%
(a) The pro forma combined results of operations of NYSE Euronext for
the three months ended March 31, 2008 are presented on a
normalized basis to neutralize the impact of acquisitions and
dispositions of businesses and equity investments for the
respective periods.
(b) Includes the impact of the Wombat acquisition and several GL Trade
acquisitions, and the disposition of the NYSE Regulation
operations transferred to FINRA.
(c) The pro forma combined results of operations of NYSE Euronext for
the three months ended March 31, 2008 are presented on a
normalized basis at constant US$/EUR and US$/GBP exchange
rates.
(d) Excludes a $13 million net curtailment gain recorded in connection
with the elimination of certain components of our postretirement
plans in the U.S.
NYSE Euronext
Reconciliation of non-GAAP financial measures to GAAP measures
(unaudited)
(in millions)
We use non-GAAP financial measures of operating performance. Non-GAAP
measures do not replace and are not superior 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.
U.S. GAAP Euronext Other Pro Forma Pro Forma
Results (a) Adjustments Combined
--------- -------- ---------------- ---------
Three months ended March
31, 2008
------------------------
Revenues $ 1,293 $ - $(102) (b) $ 1,191
Operating expenses, net (945) - 119 (b), (c) (826)
--------- -------- ------ ---------
Operating income 348 - 17 365
Net interest and
investment loss (19) - - (19)
Gain on sale of equity (f)
investment 1 (1) -
Income from associates 1 - - 1
Other income 10 - - 10
--------- -------- ------ ---------
Income before income tax
provision and minority
interest 341 - 16 357
Income tax provision (102) - (5) (107)
Minority interest (9) - - (9)
--------- -------- ------ ---------
Net income $ 230 $ - $ 11 $ 241
========= ======== ====== =========
Three months ended March
31, 2007
------------------------
Revenues $ 702 $ 412 $(185) (b) $ 929
Operating expenses, net (b),
(c),
(601) (237) 181 (d) (657)
--------- -------- ------ ---------
Operating income 101 175 (4) 272
Net interest and (e)
investment income
(loss) 9 5 (33) (19)
Gain on sale of equity (f)
investment - 1 (1) -
Income from associates - 2 - 2
Other income 4 (3) - 1
--------- -------- ------ ---------
Income before income tax
provision and minority
interest 114 180 (38) 256
Income tax provision (46) (57) 13 (f) (90)
Minority interest - (8) - (8)
--------- -------- ------ ---------
Net income $ 68 $ 115 $ (25) $ 158
========= ======== ====== =========
(a) Corresponding to the results of operations of Euronext for the
three months ended March 31, 2007, which preceded the April 4,
2007 merger with NYSE Group.
(b) Includes Activity assessment fees / Section 31 fees.
(c) Includes merger expenses and exit costs.
(d) Includes the amortization expense related to the fair value of the
identifiable intangible assets of Euronext.
(e) Includes the interest expense on the NYSE Euronext debt incurred
as part of the merger with Euronext.
(f) To eliminate gains on sale of equity investments as they represent
nonrecurring items.
NYSE Euronext
Condensed consolidated statements of financial condition (unaudited)
(in millions)
March 31, 2008 December 31, 2007
-------------- -----------------
Assets
Current assets:
Cash, cash equivalents,
investment and other securities $ 1,674 $ 1,532
Accounts receivable, net 740 566
Deferred income taxes 136 111
Other current assets 104 69
-------------- -----------------
Total current assets 2,654 2,278
Property and equipment, net 595 576
Goodwill 5,346 5,014
Other intangible assets, net 7,579 7,226
Investment in associates 320 337
Deferred income taxes 407 390
Other assets 820 797
-------------- -----------------
Total assets $ 17,721 $ 16,618
============== =================
Liabilities and stockholders' equity
Accounts payable and accrued
expenses $ 913 $ 1,012
Deferred revenue 457 205
Short term debt 2,515 2,192
Deferred income taxes 48 52
-------------- -----------------
Total current liabilities 3,933 3,461
Accrued employee benefits 312 312
Deferred revenue 355 349
Long term debt 519 521
Deferred income taxes 2,455 2,333
Other liabilities 26 27
-------------- -----------------
Total liabilities 7,600 7,003
Minority interest 259 231
Stockholders' equity 9,862 9,384
-------------- -----------------
Total liabilities and stockholders'
equity $ 17,721 $ 16,618
============== =================
NYSE Euronext
Selected Statistical Data:
----------------------------------------------------------------------
Volume Summary - Cash Products
----------------------------------------------------------------------
Average Daily Volume Total Volume
-------------------------------------------
(Unaudited) Q1 '08 Q1 '07 % Chg Q1 '08 Q1 '07 % Chg
------ ------ ------ ------- ------- ------
Number of Trading Days -
European Markets 62 64 -3.1% 62 64 -3.1%
Number of Trading Days -
U.S. Markets 61 61 - 61 61 -
European Cash Products
(trades in thousands) 1,662 1,155 43.9% 103,042 73,918 39.4%
Equities 1,602 1,103 45.2% 99,297 70,592 40.7%
Exchange-Traded Funds 9 5 71.1% 562 339 65.8%
Structured Products 46 40 14.7% 2,825 2,542 11.1%
Bonds 6 7 -17.0% 358 445 -19.6%
U.S. Cash Products (shares
in millions) 3,515 2,801 25.5% 214,433 170,859 25.5%
NYSE Listed Issues (1)
NYSE Group Handled
Volume (2) 2,624 2,144 22.4% 160,087 130,763 22.4%
NYSE Group Matched
Volume (3) 2,382 2,029 17.4% 145,282 123,765 17.4%
NYSE Group TRF Volume
(4) 217 13,210
Total NYSE Listed
Consolidated Volume 4,563 3,079 48.2% 278,340 187,835 48.2%
NYSE Group Share of
Total Consolidated
Volume
Handled Volume (2) 57.5% 69.6% -12.1% 57.5% 69.6% -12.1%
Matched Volume (3) 52.2% 65.9% -13.7% 52.2% 65.9% -13.7%
TRF Volume (4) 4.7% 4.7%
NYSE Arca & Amex Listed
Issues
NYSE Group Handled
Volume (2) 412 168 145.3% 25,118 10,241 145.3%
NYSE Group Matched
Volume (3) 357 146 144.7% 21,769 8,897 144.7%
NYSE Group TRF Volume
(4) 90 5,504
Total NYSE Arca & Amex
Listed Consolidated
Volume 1,173 424 176.5% 71,526 25,869 176.5%
NYSE Group Share of
Total Consolidated
Volume
Handled Volume (2) 35.1% 39.6% -4.5% 35.1% 39.6% -4.5%
Matched Volume (3) 30.4% 34.4% -4.0% 30.4% 34.4% -4.0%
TRF Volume (4) 7.7% 7.7%
Nasdaq Listed Issues
NYSE Group Handled
Volume (2) 479 489 -2.1% 29,229 29,856 -2.1%
NYSE Group Matched
Volume (3) 397 403 -1.4% 24,221 24,559 -1.4%
NYSE Group TRF Volume
(4) 212 12,908
Total Nasdaq Listed
Consolidated Volume 2,446 2,193 11.5% 149,220 133,772 11.5%
NYSE Group Share of
Total Consolidated
Volume
Handled Volume (2) 19.6% 22.3% -2.7% 19.6% 22.3% -2.7%
Matched Volume (3) 16.2% 18.4% -2.2% 16.2% 18.4% -2.2%
TRF Volume (4) 8.7% 8.7%
Exchange-Traded Funds
(1,5)
NYSE Group Handled
Volume (2) 442 231 91.3% 26,941 14,081 91.3%
NYSE Group Matched
Volume (3) 385 208 85.6% 23,492 12,659 85.6%
NYSE Group TRF Volume
(4) 104 - 6,355 -
Total ETF Consolidated
Volume 1,248 516 141.9% 76,134 31,472 141.9%
NYSE Group Share of
Total Consolidated
Volume
Handled Volume (2) 35.4% 44.7% -9.3% 35.4% 44.7% -9.3%
Matched Volume (3) 30.9% 40.2% -9.3% 30.9% 40.2% -9.3%
TRF Volume (4) 8.3% 8.3%
NYSE Euronext
----------------------------------------------------------------------
Selected Statistical Data:
----------------------------------------------------------------------
Volume Summary - Derivatives Products
----------------------------------------------------------------------
Average Daily Volume Total Volume
-------------------------------------------
(Unaudited; contracts in Q1 '08 Q1 '07 % Chg Q1 '08 Q1 '07 % Chg
thousands)
------ ------ ------ ------- ------- ------
Number of Trading Days -
European Markets 62 64 -3.1% 62 64 -3.1%
Number of Trading Days -
U.S. Markets 61 61 - 61 61 -
European Derivatives
Products 4,552 3,431 32.7% 282,245 219,602 28.5%
Total Interest Rate
Products 2,763 1,902 45.3% 171,290 121,727 40.7%
Short Term Interest
Rate Products 2,647 1,789 47.9% 164,107 114,516 43.3%
Medium and Long Term
Interest Rate
Products 116 113 2.8% 7,183 7,212 -0.4%
Total Equity Products(6) 1,721 1,486 15.8% 106,684 95,075 12.2%
Total Individual
Equity Products 1,004 887 13.1% 62,225 56,790 9.6%
Total Equity Index
Products 717 598 19.9% 44,459 38,285 16.1%
of which Bclear 531 338 57.1% 32,935 21,646 52.2%
Individual
Equity
Products 431 265 62.4% 26,722 16,990 57.3%
Equity Index
Products 100 73 37.7% 6,213 4,656 33.4%
Commodity Products 67 42 61.4% 4,175 2,670 56.4%
Currency Products 2 2 -23.2% 96 129 -25.6%
U.S. Derivatives Products
- Equity Options(7)
NYSE Arca Options
Contracts 1,945 1,139 70.8% 118,674 69,498 70.8%
Total Consolidated
Options Contracts 13,328 9,033 47.6% 813,022 550,998 47.6%
NYSE Group Share of
Total 14.6% 12.6% 2.0% 14.6% 12.6% 2.0%
(1) Includes all volume executed in NYSE Group crossing sessions.
(2) Represents the total number of shares of equity securities and
ETFs internally matched on NYSE Group's exchanges or routed to
and executed at an external market center. NYSE Arca routing
includes odd-lots.
(3) Represents the total number of shares of equity securities and
ETFs executed on NYSE Group's exchanges.
(4) Represents NYSE's volume in FINRA/NYSE Trade Reporting Facility
(TRF).
(5) Data included in previously identified categories.
(6) Includes all trading activities for Bclear, Euronext.liffe's
clearing service for wholesale equity derivatives.
(7) Includes trading in U.S. equity options contracts, not equity-
index options.
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) March 31, December March 31,
2008 31, 2007 2007
--------- --------- ---------
NYSE Euronext Listed Issuers
NYSE Listed Issuers
NYSE listed issuers(1) 2,509 2,526 2,585
Number of new issuer listings(1) 30 62 42
Capital raised in connection with new
listings ($mm)(2) $ 18,708 $ 9,815 $ 3,187
Euronext Listed Issuers
Euronext listed issuers(1) 1,141 1,155 1,199
Number of new issuer listings(3) 18 33 25
Capital raised in connection with new
listings ($mm)(2) $ 932 $ 5,535 $ 754
NYSE Euronext Market Data(4)
NYSE Market Data
Share of Tape A revenues (%) 57.0% 59.9% 77.2%
Share of Tape B revenues (%) 33.9% 31.9% 38.7%
Share of Tape C revenues (%) 19.3% 19.3% 22.0%
Professional subscribers (Tape A) 456,752 450,619 430,136
Euronext Market Data
Number of terminals 222,630 218,380 207,927
NYSE Euronext Operating Expenses
NYSE Euronext employee headcount(5)
NYSE Euronext headcount excluding GL
Trade 3,183 3,220 3,337
GL Trade headcount 1,395 1,398 1,297
NYSE Euronext Financial Statistics
NYSE Euronext foreign exchange rate (EUR
/US$)
Average EUR /US$ exchange rate for the
quarter $ 1.499 $ 1.449 $ 1.310
(1) Figures for NYSE listed issuers include listed operating
companies, closed-end funds, and do not include listed issuers on
NYSE Arca, Inc. or structured products listed on the NYSE. There
were 282 ETFs and 16 operating companies exclusively listed on
NYSE Arca, Inc. as of March 31, 2008. There were 481 structured
products listed on the NYSE as of March 31, 2008. NYSE listed
issuers as of March 31, 2007 exclude 156 ETFs that were
transferred to NYSE Arca by December 31, 2007.
Figures for Euronext present the operating companies listed on
Eurolist, Alternext, and Free Market, and do not include closed-
end funds, ETFs and structured product (warrants and
certificates). As of March 31, 2008, 121 companies were listed on
Alternext and 299 ETFs were listed on NextTrack.
(2) Euronext figures show capital raised in millions of euros by
operating companies listed on Eurolist and do not include
Alternext, Free Market and closed-end funds, ETFs and structured
products (warrants and certificates). NYSE figures show capital
raised in millions of USD by operating companies listed on NYSE
and Arca exchanges and do not include closed-end funds, ETFs and
structured products.
(3) Euronext figures include operating companies listed on Eurolist,
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 Amex listed securities, and "Tape C" represents
Nasdaq listed securities. Per the SEC's 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 Tapes A and B was derived
based on share 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 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) NYSE Euronext owns approximately 40% of the common equity of GL
Trade, which is listed separately on Eurolist by Euronext in
Paris. NYSE Euronext consolidates the results of GL Trade. NYSE
Euronext headcount as of March 31, 2007 excludes approximately
427 employees that, effective July 30, 2007, were transferred to
Financial Industry Regulatory Authority (FINRA) and are no longer
employees of NYSE Euronext. NYSE Euronext headcount includes the
employees of Wombat Financial Software for all periods presented.
