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Annual Highlights
Revenues, excluding Activity Assessment Fees and the SEC Activity Remittance1, of $1.076 billion, were essentially flat versus 2003. Listing fees of $320.9 million increased $26.3 million or 8.9%, reflecting 152 new listings compared to 107 in the prior year. This increase offset modest declines in data processing, market information, and trading fees and larger percentage declines in facility and equipment and membership fees.
Expenses of $1.039 billion increased 5.3% or $52.1 million, compared to the prior fiscal year. Professional services expense of $155.9 million increased $41.1 million or 35.8% due to added spending on legal, consulting, and other technology expenses, business-development investments and corporate-governance efforts. Depreciation expense of $74.0 million increased $6.4 million or 9.5% as a result of a review of depreciation policies. General and administrative expense, including advertising and promotional spending, increased $8.2 million or 11.6% to $78.9 million.
Fourth-Quarter Financial Highlights
Revenues, excluding Activity Assessment Fees and the SEC Activity Remittance, were $270.4 million, a decrease of $4.5 million or 1.6% lower than the fourth quarter 2003. Listing fees were $81.3 million, an increase of $4.7 million or 6.1%, reflecting 56 new listings compared to 36 in fourth-quarter 2003. Other modest increases in revenue from data-processing fees and facility and equipment fees offset declines in market information, trading fees and larger percentage declines in membership fees and other income from fourth quarter 2004 to fourth quarter 2003.
Expenses were $254.8 million, $8.9 million or 3.6% higher than fourth-quarter 2003. Depreciation and amortization of $25.4 million increased $7.6 million or 42.6% over fourth-quarter 2003, as a result of a review of depreciation policies. Also, general and administrative expense including advertising and promotional spending, rose to $19.9 million, an increase of 39.2% or $5.6 million over fourth-quarter 2003. Offsetting the increases were decreases in compensation and professional services from fourth-quarter 2004 to fourth-quarter 2003.
Income Taxes
The effective tax rate for 2004 was 30.6%, down from 41.7% in 2003. Non-taxable insurance recoveries drove the lower effective rate for the NYSE.
Capital
As of Dec. 31, 2004, total members’ equity was $986.1 million and equity per member having distributive rights equaled $722,000.
About the NYSE
The New York Stock Exchange is the world’s largest cash equities market. At Dec. 31, 2004, 2,768 companies aggregating $20 trillion in market capitalization listed their shares on the NYSE. The Exchange serves a wide spectrum of market participants, including individual and institutional investors, members, member firms and listed companies.
Key business drivers (pdf)
New York Stock Exchange Annual Report 2004 (pdf)
1Please refer to Note 2(g) of the 2004 annual report for full description of Activity Assessment Fees and SEC Activity Remittance. The NYSE pays SEC fees pursuant to Section 31 of the Securities and Exchange Act of 1934. These fees are designed to recover the costs to the government for the supervision and regulation of securities markets and securities professionals. In 2004, the SEC adopted new rules under Section 31 and provided updated guidance as to how the SEC charges the SROs, including the NYSE, for these fees, which affected how the NYSE receives the assessment from its members. Historically, member firms self-reported the amount owed. In turn, the Exchange served as a pass-through vehicle, recording a liability to the SEC for amounts collected from members and paying these amounts to the SEC, with no impact on the statement of income of the Exchange. Under the amended rules, the Exchange bills and collects Activity Fees from members and pays an Activity Remittance to the SEC based on fee schedules determined by the SEC. In light of the SEC action, the NYSE has adopted a change in its method of accounting for these fees. The NYSE now records Activity Assessment revenue and SEC Activity Remittance expense on its income statement while maintaining similar treatment within the balance sheet. The effect of this change had no impact on consolidated net income.
