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NYSE Euronext (NYSE: NYX) today reported net income of $643 million, or $2.70 per diluted share, for the year ended Dec. 31, 2007, a $438 million, or 214%, increase as compared to net income of $205 million, or $1.36 per diluted share, for the year ended Dec. 31, 2006. For the three months ended
NYSE Euronext’s strong performance in 2007 reflects the company’s significantly increased global presence, customer base, and product and service offerings following the successful merger of NYSE Group and Euronext N.V. on
“By offering customers the highest quality and broadest array of global products and services, NYSE Euronext produced record financial results in 2007,” said Duncan L. Niederauer, CEO, NYSE Euronext. “We reached new levels in trading volume, message traffic and global IPO proceeds, underscoring the value of our strong technology, compelling business model and unparalleled global presence.”
“We have a clear vision of the future and are focused on delivering the promised synergies to our shareholders. We will grow organically and through acquisitions that fit strategically and create value for our shareholders, as evidenced by our recently announced acquisitions of the American Stock Exchange and Wombat Financial Software. Additionally, our strategic decision to in-source our European trading and information technology operations through the AEMS transaction, which was announced in December, will give us control over all of our core technology platforms and greatly enhance our global exchange technology business.”
Joost van der Does de Willebois, Acting CFO, NYSE Euronext, added, “We are in the process of delivering the $100 million in revenue synergies and $275 million in cost savings we identified in connection with the NYSE-Euronext merger. As a result of the recently announced AEMS transaction, we now anticipate realizing over $200 million in annual run-rate technology cost savings by the first quarter of 2010, and by year-end 2010 we expect to realize the full $250 million of merger-related annual run-rate technology savings. Also, highlighting our ongoing focus on effective cost management, we remain confident that we will exceed our $25 million annual run-rate non-technology related savings target by the end of the first quarter of 2008.”
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, exit costs and other non-recurring items, the net income of NYSE Euronext for the year ended Dec. 31, 2007 would have been $705 million, or $2.65 per diluted share, a $221 million or 46% increase versus non-GAAP net income of $484 million, or $1.83 per diluted share, for the year ended Dec. 31, 2006. For the three months ended
At constant US$/€ and US$/£ 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 year ended Dec. 31, 2007 increased $689 million, or 21%, while fixed operating expenses (defined as operating expenses, net of Section 31 fees, merger expenses, exit costs, liquidity payments, routing and clearing fees, and excluding regulatory fine income) decreased $135 million, or 7%, compared to the year ended Dec. 31, 2006. Please refer to the table entitled "Normalized revenues and fixed operating expenses including non-GAAP financial measures.”
Other Financial Highlights
- On a non-GAAP basis, revenues for the full year 2007, net of activity assessment fees, liquidity payments, and routing and clearing fees, were $3,049 million, up 11.7% versus full year 2006.
- Excluding the effect of activity assessment fees and Section 31 fees, the pre-tax margin of NYSE Euronext on a non-GAAP basis reached 27.3% of total revenues for the year ended
- As of
- NYSE Euronext will make a $0.25 quarterly dividend payment on
- As a result of the recently announced AEMS transaction, below is an updated timetable for the expected realization of annual run-rate technology savings in connection with the NYSE-Euronext merger:
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 combined $30.4 trillion/€20.9 trillion total market capitalization of listed companies and average daily trading value of approximately $141.2 billion/€102.9 billion (as of Dec. 31, 2007). For a complete list of 2007 business segment highlights, go to: http://www.nyse.com/press/1199444909934.html
- LIFFE
- With 949.0 million contracts traded in 2007, Liffe set a record for trading activity, representing a 30% increase in volume compared to the prior year.
- Total volumes across Liffe’s product categories increased in 2007 compared to the year ended 2006: interest rate contracts grew 25.6%, equity products (single stocks and indices) grew 35.9%, and commodities grew 29.8%.
- NYSE Arca Options
- Continuing its rapid growth, in 2007 NYSE Arca Options traded a record 336 million equity options contracts, a 70.7% increase from 2006, ending the year with a record 16.3% share of trading in December, up 5.6 percentage points from the 2006 average of 10.7%.
- In December, 2007, 16.8 million contracts were traded on NYSE Arca Options in the recently-expanded SEC options penny pilot, with 11.6 million, or 69% traded electronically. Share of trading in the 35 penny pilot issues also set a record in December at 18.1% of industry volumes, ranking NYSE Arca third among all U.S. options exchanges for the month.
- With nearly 70% of volume executed electronically in fourth-quarter 2007, NYSE Arca Options utilizes superior technology and scalability to process up to 60,000 orders per second and 1 million quotes per second.
- European Cash Markets (Euronext)
- During 2007, NYSE Euronext’s European cash markets registered their third consecutive record year. For 2007, 322.6 million trades, representing a record average daily volume of 1.2 million transactions, were executed on NSC, NYSE Euronext’s European cash trading platform, a 47.0% increase versus 2006.
- Year-over-year, trading volume in 2007 increased in nearly every product category traded on Euronext: cash equities grew 47.6%, exchange-traded funds (ETFs) grew 126.2%, structured products grew 34.1%, and bonds declined 1.5%.
- NYSE Group achieved record volumes in 2007 with 2.6 billion shares traded daily, executing more matched volume than any other
- NYSE Group registered seven of its top ten all time daily volume records during 2007, including the highest ever of 5.8 billion shares traded on Aug. 16, and the highest volume month, quarter and year in history. Overall, average daily trading volume on the NYSE and NYSE Arca increased 16.0% in 2007 compared to 2006.
- In 2007, NYSE Arca added 105 new ETFs and 17 new exchange-traded notes (ETNs) to its roster of primary listings; this includes a record 101 IPOs, among them new listings from first-time NYSE Arca issuers Vanguard, Van Eck and Claymore.
- NYSE Group achieved record volumes in 2007 with 2.6 billion shares traded daily, executing more matched volume than any other
- Global IPO Listing Leadership
- In 2007, NYSE Euronext was the world’s leading marketplace in overall IPO proceeds with a total of US$80/€54 billion in proceeds in connection with listing on NYSE Euronext exchanges.
- In 2007, NYSE Euronext added a total of 428 new listings, including 140 on NYSE Euronext's European markets. Listings and IPO activity by non-US companies on the NYSE was its strongest since 2002, with 42 new listings, including 20 from
- Listings on NYSE Euronext’s Alternext grew to 119 companies by year-end, and these companies raised more than US$2.4/€1.6 billion (including funds raised on the secondary market) with total market capitalization equal to US$7.8/€5.3 billion.
- Market Data
- In 2007, the number of NYSE (Tape A) professional subscribers grew 6.5% to reach 450,619 as of
- In 2007, the number of NYSE (Tape A) professional subscribers grew 6.5% to reach 450,619 as of
Other Highlights for the Fourth Quarter and Full Year 2007
- Apr. 4 – Upon the completion of the merger of NYSE Group and Euronext N.V., shares of NYSE Euronext (NYX), the world’s largest exchange group, begin trading in
- Apr. 10 – NSC, NYSE Euronext's European cash equities platform, moves from non-stop to Linux-based hardware, reducing latency in the trading engine to 2 milliseconds.
- Apr. 23 – NYSE BondsSM begins full operation.
- Apr. 25 – NYSE Euronext launches NYSE TransactTools, the company’s commercial technology products group that combines the newly-acquired TransactTools with SIAC’s Sector and SFTI businesses.
- June 6 – The Board of Directors of NYSE Euronext declares an annual cash dividend of $1.00 per share, payable on a quarterly basis.
- June 27 – Listings on Alternext reach 100 with market capitalization totaling over €5 billion- more than €1 billion raised since market was launched.
- June 28 – Liffe introduces new trade matching algorithm for short term interest rate futures contracts.
- Aug. 1 – NASD and NYSE Member Regulation combine to form the Financial Industry Regulatory Authority (FINRA).
- Aug. 10 – NYSE Euronext reports record transaction volumes for the week ending Aug. 10 as NYSE Euronext cash equities exchanges reaches all-time daily volume records on Aug. 9 and NYSE Group and Euronext cash equities markets experience their busiest weeks ever-to-date.
- Sept. 4 – The China Securities Regulatory Commission (CSRC) approves an application by New York Stock Exchange LLC to become the first foreign exchange to open a representative office in
- Oct. 2 – Liffe becomes available via the NYSE TransactTools Secure Financial Transaction Infrastructure (SFTI).
- Oct. 22 – NYSE Euronext and Caisse des Dépôts join forces to form an international carbon trading market, BlueNext, which launched on
- Oct. 24 – NYSE Euronext becomes a new component in the S&P 500 index, and the only exchange group included in the S&P 100 index.
- Oct. 24 – NYSE Euronext announces “SmartPool”, the first European exchange-led electronic block-trading platform in partnership with BNP Paribas and HSBC.
- Oct. 30 – NYSE Euronext and BIDS Holdings, L.P. announced an agreement to form a 50/50 joint venture, to be launched in 2008, designed to improve execution quality and access to liquidity in block trading.
- Nov. 14 – The NYSE Euronext board of directors appoints Duncan Niederauer to be Chief Executive Officer, effective
- Dec. 4 – Lehman Brothers announces plans to establish a floor-based market making firm on the NYSE trading floor by acquiring certain assets related to the operations of Van der Moolen Specialists.
- Dec. 11 – Atos Origin and NYSE Euronext announce their agreement in principle for NYSE Euronext to acquire the 50% remaining stake in Atos Euronext Market Solutions (AEMS) currently owned by Atos Origin.
- Dec. 31 – The transfer of all ETFs and ETNs from the NYSE to NYSE Arca is completed.
NYSE Euronext Earnings News Release with Tables and Operating Data
Analyst/Investor/Media Briefing:
NYSE Euronext senior management representatives will host an analyst/investor and media call via teleconference today regarding this announcement. A live audio webcast of the conference call will be available on the Investor Relations section of NYSE Euronext’s website, http://www.nyseeuronext.com/ir. Those wishing to listen to the live conference via telephone should dial-in at least 10 minutes before the call begins. An investor presentation that will be referenced during the call will be posted to the Investor Relations section of the NYSE Euronext website.
Live Dial-in Information:
United States : (866) 800-8651
International: (617) 614-2704
Passcode: 23825140
Audio replays of the conference call will be available on the Investor Relations section of NYSE Euronext’s website, http://www.nyseeuronext.com/ir and by dial-in beginning approximately two hours following the conclusion of the live call.
Replay Dial-in Information:
United States : (888) 286-8010
International: (617) 801-6888
Passcode: 99463005
available
CONTACT : Media
+31.20.550.4488 (Amsterdam)
+32.2.509.1392 (Brussels)
+351.217.900.029 (Lisbon)
+44.20.7379.2789 (London)
+1.212.656.2411 (
+33.1.49.27.11.33 (
CONTACT: Investor Relations
+1.212.656.5700 (
+33.1.49.27.58.60 (
The results of operations of Euronext N.V. for the three and twelve months ended December 31, 2007 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 fourth quarter 2007 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 24%
-- European cash trading accounts for 19%
--
-- Market data accounts for 13%
-- Listing accounts for 13%
-- Software and technology services accounts for 14%
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, a holding company created by the combination of NYSE Group, Inc. and Euronext N.V., commenced trading on
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 référence") filed with the French Autorité des Marchés Financiers (Registered on June 6, 2007 under No. R.07-0089), 2006 Annual Report on Form 10-K, as amended, and other periodic reports filed with the U.S. Securities and Exchange Commission or the French Autorité des Marchés 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.
