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Financial and Operating Highlights[1],[2],[3]
- Diluted EPS of $0.57, up 21% compared to 1Q12; Up 33% from 4Q12
- Net revenue of $600 million in-line with 1Q12; Up 7% from 4Q12
- Fixed operating expenses of $380 million, down 8% on constant dollar / portfolio basis vs. 1Q12
- Operating income of $220 million, up 12% compared to 1Q12; Up 27% from 4Q12
- Debt-to-EBITDA ratio 2.3 times, down from 2.5 times at end of 2012; Cash balances up $147 million
- Board declares second quarter 2013 cash dividend of $0.30 per share
[1] All comparisons versus 1Q12 unless otherwise stated. Excludes merger expenses, exit costs, charge for fair value adjustment to RSU awards 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.
[3] Cash balances include cash, cash equivalents and short term financial investments.
NYSE Euronext (NYX) today reported net income of $173 million, or $0.71 per diluted share on a GAAP basis, for the second quarter of 2013, compared to net income of $125 million, or $0.49 per diluted share, for the second quarter of 2012. Results for the second quarter of 2013 and 2012 included $22 million and $12 million, respectively, of pre-tax merger expenses and exit costs. Second quarter 2013 results also included a $10 million gain recorded for non-operating items due to the sale of a portion of our equity stake in LCH.Clearnet and a reserve release related to a favorable settlement with certain European tax authorities which significantly reduced our GAAP effective tax rate. Excluding merger expenses, exit costs, disposal activity and discrete tax items, net income in the second quarter of 2013 was $153 million, or $0.63 per diluted share on a non-GAAP basis, compared to $128 million, or $0.51per diluted share, in the second quarter of 2012.
“We continue to execute solidly against our business plan as we build momentum toward closing the ICE deal,” said Duncan L. Niederauer, CEO, NYSE Euronext. “We successfully transitioned our London-based derivatives market to ICE Clear Europe and were ranked number one year-to-date in capital raising with our market share in technology listings increasing to 64%. The strength of our listings franchise continues to build and we are very pleased to welcome Oracle to theNYSE today to close the market. We were also appointed the administrator for LIBOR. Turning to our transaction with ICE, we are gratified that our shareholders and the European Commission have approved the transaction and we are working with the College of Regulators in Europe and other regulators to obtain all the appropriate remaining approvals.”
The table below summarizes the financial results1 for the second quarter of 2013:
| % Δ 2Q13 | Year-to-Date | % Δ YTD '13 | ||||||||||||||
| ($ in millions, except EPS) | 2Q13 | 1Q13 | 2Q12 | vs. 2Q12 | 2013 | 2012 | vs. YTD '12 | |||||||||
| Total Revenues2 | $995 | $963 | $986 | 1% | $1,958 | $1,938 | 1% | |||||||||
| Total Revenues, Less Transaction-Based Expenses3 | 611 | 600 | 602 | 1% | 1,211 | 1,203 | 1% | |||||||||
| Other Operating Expenses 4 | 382 | 380 | 396 | (4%) | 762 | 801 | (5%) | |||||||||
| Operating Income 4 | $229 | $220 | $206 | 11% | $449 | $402 | 12% | |||||||||
| Net Income5 | $153 | $139 | $128 | 20% | $292 | $249 | 17% | |||||||||
| Diluted Earnings Per Share5 | $0.63 | $0.57 | $0.51 | 24% | $1.19 | $0.97 | 22% | |||||||||
| Operating Margin | 37% | 37% | 34% | 3 ppts | 37% | 33% | 4 ppts | |||||||||
| Adjusted EBITDA Margin | 48% | 47% | 45% | 3 ppts | 47% | 44% | 3 ppts | |||||||||
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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. |
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4 Excludes merger expenses, exit costs and charge for fair value adjustment to RSU awards. |
| 5 Excludes merger expenses, exit costs, charge for fair value adjustment to RSU awards, disposal activities and discrete tax items. |
“Our results for the second quarter reflect the actions we have taken to grow our businesses and diligently manage our cost base and capital,” commentedMichael S. Geltzeiler, Group Executive Vice President and CFO, NYSE Euronext. “On a constant dollar/portfolio basis, costs are down 7% year-to-date and we have already achieved 64% of the $250 million Project 14 target for costs reductions, well ahead of the 60% promised by year-end 2013. Further cost savings will come online in the second-half of 2013 with the completed transition to ICE Clear Europe which will position us to easily surpass our full-year cost guidance target of $1,525 million. Turning to capital, capital expenditures year-to-date are running 30% below the prior year period and we are on track to come in well below our 2013 guidance of $150 million. We retired the $414 million remaining on our $750 million June 2013 notes, which combined with strong EBITDA generation, reduced our debt-to-EBITDA ratio to 1.9 times. The debt retirement will reduce interest expense in the second half of the year. All of these actions have helped bolster our business model and set the table for our proposed combination with ICE.”
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