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NYSE Euronext (NYSE Euronext: NYX) today reported net income of $161 million, or $0.62 per diluted share, for the three months ended June 30, 2007, a 164% increase as compared to net income of $61 million, or $0.39 per diluted share, for the three months ended June 30, 2006. These results are presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP).
Second quarter 2007 GAAP results include the operations of NYSE Group for the full quarter and the results of Euronext N.V. from April 4, 2007, the closing date of the combination between NYSE Group and Euronext N.V. The comparative results for 2006 reflect the operations of NYSE Group only.
Included in the results for the three months ended June 30, 2007 are $16 million in merger expenses and exit costs consisting primarily of professional and other fees incurred in connection with both the acquisition of Archipelago Holdings on March 7, 2006 and the combination with Euronext N.V. on April 4, 2007.
Giving effect to the combinations as if they had occurred at the beginning of the earliest period presented, but excluding merger expenses, exit costs and other non-recurring items, NYSE Euronext's net income on a non-GAAP basis for the three months ended June 30, 2007 would have been $172 million, or $0.65 per diluted share, a $39 million or 29% increase as compared to net income of $133 million, or $0.50 per diluted share, for the three months ended June 30, 2006. In addition, on a non-GAAP basis, operating income grew 27% to $275 million for the second quarter of 2007 from $217 million in the year-ago period. A full reconciliation of these non-GAAP results is included in the attached tables.
At constant USD/EUR exchange rates, excluding acquisitions and divestitures which occurred during the period from June 30, 2006 through June 30, 2007, and on a non-GAAP basis, combined NYSE Euronext revenues, net of activity assessment fees, for the three months ended June 30, 2007 increased 12% while fixed operating expenses (defined as operating expenses, net of Section 31 fees, merger expenses, exit costs, liquidity payments, routing and clearing fees) decreased 9% compared to the three months ended June 30, 2006.
"Record revenues in our European cash and derivatives trading, as well as balanced growth in other business lines, including listings and market data, produced a strong second quarter for NYSE Euronext," said Nelson Chai, Executive Vice President and Chief Financial Officer. "These results underscore NYSE Euronext's growing product and geographic diversity, as well as increasing user demand for our products and services on a global scale. Our business integration efforts are progressing well, and we remain focused on strategically advancing our global leadership position for the benefit of our customers and shareholders. Moreover, giving effect to foreign currency translations and recent acquisitions, we continue to reduce our fixed expense base through aggressive cost management, which is driving further expansion of our operating margin."
Other Second Quarter Financial and Corporate Highlights
-- On April 4, the shares of NYSE Euronext, the world's first and
largest global exchange group, began trading on NYSE
Euronext's exchanges in New York and Paris.
-- On June 6, NYSE Euronext declared an annual cash dividend of
$1.00 per share payable quarterly; the first dividend payment
of $0.25 was made on July 13.
-- As of June 30, NYSE Euronext had $1.4 billion of cash, cash
equivalents and short-term financial investments (excluding
Section 31 fees payable to the SEC), and $3.5 billion of debt.
Second Quarter Business Highlights
-- NYSE Euronext's cash markets, which trade more shares than any
other equities marketplace in the world and represent the
largest pools of liquidity in their respective markets,
realized record trading volumes during the three months ended
June 30, 2007.
-- NYSE Euronext's European cash markets had their best quarter
ever with 74.8 million trades, an increase of 27.7% compared
to the three months ended June 30, 2006 and more than double
the trading activity for the three months ended June 30,
2005. Through June 30, 2007, 148.7 million trades had been
processed by NSC (Euronext's cash trading platform) which
represented 1.18 million trades per day on average, the
highest figure ever. Year over year, the average daily
number of trades increased in every product category: cash
equities grew 28.3%, ETFs grew 76.8%, structured products
(warrants and certificates) grew 10.8% and bonds grew 2.9%.
-- NYSE Euronext's U.S. markets comprised the largest liquidity
pool in NYSE-listed cash trading with 63.7% of matched
trading volume for the three months ended June 30, 2007.
Total daily volume reached a new all-time record with nearly
5.2 billion shares traded on Friday, June 22, 2007,
including record Crossing Session II volume of nearly 1.4
billion shares traded. NYSE Euronext's U.S. exchanges also
registered new monthly and quarterly record volumes in June
2007 with 60.7 billion shares traded during the month and
166.3 billion shares traded for the three months ended
June 30, 2007.
-- NYSE Arca continues to be the largest single liquidity pool
for ETF trading in the U.S. with 42.3% of handled trading
volume for the three months ended June 30, 2007.
-- NYSE Euronext's derivative markets, Liffe and NYSE Arca
Options, continue to demonstrate solid growth in all product
areas.
-- With 232.6 million contracts traded for the three months
ended June 30, 2007, Liffe set a record for trading
activity, increasing by 13.7% compared to the same period a
year ago. All of Liffe's product categories increased
compared to the three months ended June 30, 2006: interest
rate contracts grew 5.4%, equity products (single stocks and
indices) grew 23.0%, commodities grew 39.5%, and currency
grew 13.8%.
-- With 116.4 million interest rate contracts traded on Liffe,
the three month period ended June 30, 2007 was the second
busiest period ever. Year-to-date, interest rate contracts
grew by 14% compared to the same period a year ago,
establishing a new record with an average of 1.88 million
contracts traded per day.
-- European equity derivatives have also reached a new record
of activity on Liffe with 112.8 million contracts traded for
the three months ended June 30, 2007. The six months ended
June 30, 2007 were by far the most active period for equity
derivative contracts traded on Liffe since its inception. A
large part of this growth is attributable to the success of
Bclear, Liffe's wholesale clearing service for OTC trades,
which processed 43.8 million contracts for the three months
ended June 30, 2007, a 71.4% increase compared to the
comparable period a year ago.
-- In June 2007, NYSE Arca Options submitted its detailed
report and recommendations to the SEC for expanding the
SEC's successful penny pilot program. With total volume for
all contracts in the penny pilot up over 50% year-to-date
and average daily volume up 89% year-over-year, NYSE Arca
Options has become one of the industry's fastest growing and
most efficient options trading platforms. With four new
market makers (MMs) added in the quarter, NYSE Arca Options
now has 29 MMs as of June 30.
-- More than 3,900 issuers are listed on NYSE Euronext; listed
operating companies represent over $30 trillion in total
global market capitalization, greater than the next four
largest equities marketplaces combined.
-- The 70 new listings on NYSE Euronext's U.S. markets for the
three months ended June 30, 2007 included 24 IPOs by
operating companies. Total IPO proceeds raised by operating
companies in connection with listings for the three months
ended June 30, 2007 were $12.8 billion, compared to $7.2
billion for the three months ended June 30, 2006.
-- For the six months ended June 30, 2007, NYSE Euronext's U.S.
markets produced a total of 142 new listings, including 6
transfers from Nasdaq, 3 transfers from the Amex, and 34
IPOs by operating companies, which raised total proceeds of
$16.0 billion. For the six months ended June 30, 2007, 27
closed-end fund IPOs raised a total of $23.8 billion in
proceeds in connection with their listing on the NYSE.
Year-to-date, U.S. domestic IPOs on NYSE Euronext's U.S.
markets raised approximately 90% of qualified IPO proceeds,
while non-US offerings on NYSE Euronext's U.S. markets
represented 100% of qualified proceeds raised.
-- For the six months ended June 30, 2007, NYSE Euronext's U.S.
markets listed 60 ETFs compared to 36 new ETF listings
during the same period a year ago.
-- For the three months ended June 30, 2007, Euronext listed 45
new issuers compared with 41 during for the comparable a
year ago. Capital raised in connection with listings during
the three-month period amounted to EUR 3.3 billion. Of these
new listings, NYSE Alternext listed 15 new issues, reaching
100 listed companies as of June 30, 2007. In just over two
years, companies listed on NYSE Alternext have raised more
than EUR 1 billion and now represent a total market
capitalization of over EUR 5 billion.
-- On April 2, 2007, NYSE Euronext announced the launch of high
capacity trading services for Cash and Derivatives products
trading on NSC and Liffe Connect which consist of new
high-speed broadband access to users, as well as a proposed
co-location service that will significantly reduce order
routing time.
-- NYSE Bonds(SM), which successfully launched on April 23, 2007
and is based on NYSE Arca's advanced order-matching
technology, provides investors with transparent and highly
efficient order executions for nearly 2,500 debt securities of
NYSE-listed companies.
-- On April 25, 2007, NYSE TransactTools, which operates a
rapidly expanding global network that connects the world's
securities markets and provides super-low latency access to
trading and market information, was combined with SIAC's
Sector and SFTI businesses. NYSE TransactTools also launched
the new SFTI FIX network connecting over 800 market
participants, including all of the NMS markets in the United
States.
-- On April 26, 2007, the FINRA/NYSE Trade Reporting Facility
(TRF) began processing initial trades and serving customers as
a low-cost, reliable competitive alternative for reporting
off-exchange transactions. In June 2007, the FINRA/NYSE TRF
continued to add customers and increase volume, and currently
processes more than 200 million shares daily for all NMS
listed securities, including 7% of trading in Nasdaq-listed
issues.
-- Elkins/McSherry in its May 2007 Global Trading Cost Analysis
reported that the NYSE produced the lowest all-in cost of
trading in the world for the fifth consecutive quarter, based
on first quarter 2007 data.
-- During the first half of 2007, enhancements to NYSE trading
systems and infrastructure reduced order flow latency from
around 290 milliseconds (ms) to approximately 110 ms.
Leveraging the high-performance TCM messaging server developed
by NYSE TransactTools, the new Common Customer Gateway (CCG),
scheduled to be implemented in the fourth quarter of 2007,
will replace the current Common Message Switch (CMS) for
interfacing with NYSE trading systems, including a 2008
expansion connecting the NYSE Arca, NYSE MatchPoint, NYSE
Bonds(SM) and NYSE Arca Options trading platforms.
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 April 4, 2007. NYSE Euronext (NYSE Euronext: NYX) operates the world's largest and most liquid exchange group and offers the most diverse array of financial products and services. NYSE Euronext, which brings together 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, bonds and the distribution of market data. Representing a combined $30.8 trillion/EUR 22.8 trillion total market capitalization of listed companies and average daily trading value of approximately $127.0 billion/EUR 94.0 billion (as of June 29, 2007), NYSE Euronext seeks to provide the highest standards of market quality and integrity, innovative products and services to investors, issuers, and all users of its markets.
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), 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 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 GAAP
(unaudited)
(in millions, except per share data)
Three months Six months
ended June 30, ended June 30,
--------------- ---------------
2007 2006 2007 2006
-------- ------ ------- -------
Revenues
Activity assessment $ 115 $ 190 $ 301 $ 329
Cash trading 387 187 637 261
Derivatives trading 185 11 197 13
Listing 99 89 189 177
Market data 106 60 169 109
Software and technology services 92 42 117 81
Regulatory 57 45 107 85
Licensing, facility and other 37 36 64 59
-------- ------ ------- -------
Total revenues 1,078 660 1,781 1,114
Section 31 fees (115) (190) (301) (329)
Merger expenses and exit costs (16) (10) (27) (12)
Compensation (207) (138) (313) (307)
Liquidity payments, routing and
clearing (218) (98) (398) (123)
Systems and communications (82) (30) (109) (60)
Professional services (32) (29) (53) (57)
Depreciation and amortization (71) (36) (106) (64)
Occupancy (34) (22) (55) (40)
Marketing and other (52) (29) (73) (48)
Regulatory fine income 4 6 9 23
-------- ------ ------- -------
Operating income 255 84 355 97
Net interest and investment income
(loss) (23) 9 (14) 19
Gain on sale of equity investment 2 - 2 21
Income from associates 2 - 3 -
Other income 9 8 13 15
-------- ------ ------- -------
Income before income tax provision
and minority interest 245 101 359 152
Income tax provision (78) (39) (124) (58)
Minority interest (6) (1) (6) (2)
-------- ------ ------- -------
Net income $ 161 $ 61 $ 229 $ 92
======== ====== ======= =======
Basic earnings per share $ 0.62 $0.39 $ 1.10 $ 0.65
Diluted earnings per share $ 0.62 $0.39 $ 1.09 $ 0.64
Basic weighted average shares
outstanding 259 156 208 142 (a)
Diluted weighted average shares
outstanding 260 157 209 143 (a)
(a) Adjusted to reflect the merger with Archipelago on March 7,
2006 giving retroactive effect to the issuance of shares to
former NYSE members.
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 to 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 June Six months ended June
30, (a) 30, (a)
----------------------- ----------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Pro Forma Pro Forma Pro Forma Pro Forma
Combined Combined Combined Combined
------------- ------------------------- ------------
Revenues
Cash trading $ 390 $ 282 $ 758 $ 533
Derivatives
trading 190 163 382 314
Listing 99 97 194 190
Market data 108 93 213 186
Software and
technology
services 94 98 178 192
Regulatory 57 45 107 87
Licensing,
facility and
other 37 49 74 88
--------- --------- --------- ---------
Total revenues 975 827 1,906 1,590
Compensation (210) (216)(b) (404) (438)(b)
Liquidity
payments,
routing and
clearing (220) (118) (429) (222)
Systems and
communications (84) (82) (163) (172)
Professional
services (33) (44) (66) (90)
Depreciation
and
amortization (72)(c) (68)(c) (143)(c) (135)(c)
Occupancy (35) (36) (71) (70)
Marketing and
other (50) (52) (92) (91)
Regulatory fine
income 4 6 9 23
--------- --------- --------- ---------
Operating income 275 217 547 395
Net interest and
investment
income (loss) (23)(d) (23)(d) (48)(d) (37)(d)
Income from
associates 2 4 (e) 7 9 (e)
Other income 9 10 16 18
--------- --------- --------- ---------
Income before
income tax
provision and
minority
interest 263 208 522 385
Income tax
provision (85) (70)(f) (174) (132)(f)
Minority interest (6) (5) (16) (12)
--------- --------- --------- ---------
Net income $ 172 $ 133 $ 332 $ 241
========= ========= ========= =========
Basic earnings
per share $0.65 $0.50 $ 1.26 $ 0.92
Diluted earnings
per share $0.65 $0.50 $ 1.25 $ 0.91
Basic weighted
average shares
outstanding 265 263 265 262 (g)
Diluted weighted
average shares
outstanding 266 265 266 265 (g)
-------------------------- -------------------------
(a) The results of operations on NYSE Euronext are presented as if
the following transactions had been completed at the beginning
of the earliest period presented:
1. The acquisition of PCX Holdings and subsidiaries by
Archipelago;
2. The disposition of Wave Securities by Archipelago,
3. The merger of Archipelago and NYSE, and
4. The merger of NYSE Group and Euronext.
Merger expenses and exit costs of $99 million and $32 million
have been eliminated from the results of operations for the
three months ended June 30, 2007 and 2006, respectively, and
$119 million and $36 million for the six months ended June 30,
2007 and 2006, respectively, as they represent nonrecurring
charges directly attributable to either the merger of the NYSE
and Archipelago or the merger of NYSE Group and Euronext N.V.
In addition, gains on sale of businesses and equity investments
of $2 million and $0 have been eliminated from the results of
operations for the three months ended June 30, 2007 and 2006,
respectively, and $3 million and $66 million for the six months
ended June 30, 2007 and 2006, respectively, as they represent
nonrecurring items.
Activity assessment fees and Section 31 fees have not been
presented as they have no impact on operating income or net
income.
(b) One-time compensation charges of $38 million recorded by NYSE
Group at the time of the merger with Archipelago and $2 million
acceleration of certain Archipelago stock options immediately
prior to the merger with NYSE Group were eliminated.
(c) Includes amortization expense of $25 million related to the fair
value of the identifiable intangible assets of Euronext for the
three months ended June 30, 2007 and 2006, respectively, and
$50 million for the six months ended June 30, 2007 and 2006,
respectively.
(d) Includes interest expense of $35 million and $28 million on the
NYSE Euronext $3.0 billion debt incurred as part of the merger
with Euronext for the three months ended June 30, 2007 and
2006, respectively, and $69 million and $55 million for the six
months ended June 30, 2007 and 2006, respectively.
(e) Following the fair value adjustment recorded at the Euronext
acquisition date, NYSE Euronext no longer accounts for its
share in LCH Clearnet's results of operations. As a result, the
$4 million and $17 million income from associates related to
LCH Clearnet for the three and six months ended June 30, 2006,
respectively, has been reversed.
(f) A nonrecurring $11 million tax benefit has been eliminated from
both the three and the six months ended June 30, 2006 which
corresponded to a change in tax rate on deferred capital gains
recorded by Euronext, including gains related to LCH Clearnet.
(g) Adjusted to reflect the merger with Archipelago on March 7, 2006
giving retroactive effect to the issuance of shares to former
NYSE members.
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 to 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.
------------------------- -----------
Six months
Three months ended ended
-------------------------
June 30, March 31, June 30,
2007 (a) 2007 (a) 2007 (a)
--------- --------- -----------
Pro Forma Pro Forma Pro Forma
Combined Combined Combined
------------ ------------ -----------
Revenues
Cash trading $ 390 $ 368 $ 758
Derivatives trading 190 192 382
Listing 99 95 194
Market data 108 105 213
Software and technology
services 94 84 178
Regulatory 57 50 107
Licensing, facility and other 37 37 74
--------- --------- -----------
Total revenues 975 931 1,906
Compensation (210) (194) (404)
Liquidity payments, routing
and clearing (220) (209) (429)
Systems and communications (84) (79) (163)
Professional services (33) (33) (66)
Depreciation and amortization (72)(b) (71)(b) (143)
Occupancy (35) (36) (71)
Marketing and other (50) (42) (92)
Regulatory fine income 4 5 9
--------- --------- -----------
Operating income 275 272 547
Net interest and investment
income (loss) (23)(c) (25)(c) (48)
Income from associates 2 5 7
Other income 9 7 16
--------- --------- -----------
Income before income tax
provision and minority interest 263 259 522
Income tax provision (85) (89) (174)
Minority interest (6) (10) (16)
--------- --------- -----------
Net income $ 172 $ 160 $ 332
========= ========= ===========
Basic earnings per share $ 0.65 $ 0.61 $ 1.26
Diluted earnings per share $ 0.65 $ 0.60 $ 1.25
Basic weighted average shares
outstanding 265 264 265
Diluted weighted average shares
outstanding 266 265 266
------------------------- -----------
(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 $99 million and $20 million for the three
months ended June 30, 2007 and March 31, 2007, respectively,
have been eliminated as they represent nonrecurring charges
attributable to business combinations. In addition, gains on
sale of businesses and equity investments of $2 million have
been eliminated from the results of operations for the three
months ended June 30, 2007 as they represent nonrecurring items.
Activity assessment fees and Section 31 fees have not been
presented as they have no impact on operating income or net
income.
(b) Includes amortization expense of $25 million related to the fair
value of the identifiable intangible assets of Euronext for both
the three months ended June 30, 2007 and the three months ended
March 31, 2007.
(c) Includes interest expense of $35 million and $34 million on the
NYSE Euronext $3.0 billion debt incurred as part of the merger
with Euronext for the three months ended June 30, 2007 and March
31, 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 to 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
June 30, 2007 (a)
-------------------------------------------------
US European Corporate Pro Forma
Operations Operations Items Combined
----------- -------------- ------------ ---------
Revenues
Cash trading $ 268 $ 122 $ - $ 390
Derivatives
trading 16 174 - 190
Listing 90 9 - 99
Market data 58 50 - 108
Other revenues 108 80 - 188
----------- ----------- --------- ---------
Total revenues 540 435 - 975
Liquidity
payments,
routing and
clearing (192) (28) - (220)
Other operating
expenses, net (237) (235)(b) (8) (480)
----------- ----------- --------- ---------
Operating income 111 172 (8) 275
Net interest and
investment income
(loss) (23)(c) (23)
Income from
associates 2 2
Other income 9 9
---------
Income before
income tax
provision and
minority interest 263
Income tax
provision (85)
Minority interest (6)
---------
Net income $ 172
=========
Basic earnings per
share $0.65
Diluted earnings
per share $0.65
Basic weighted
average shares
outstanding 265
Diluted weighted
average shares
outstanding 266
-------------------------------------------------
--------------------------------------------------
Three months ended
June 30, 2006 (a)
--------------------------------------------------
US European Corporate Pro Forma
Operations Operations Items Combined
----------- --------------- ------------ ---------
Revenues
Cash trading $ 187 $ 95 $ - $ 282
Derivatives
trading 11 152 - 163
Listing 89 8 - 97
Market data 60 33 - 93
Other revenues 123 69 - 192
----------- ----------- --------- ---------
Total revenues 470 357 - 827
Liquidity
payments, routing
and clearing (98) (20) - (118)
Other operating
expenses, net (271) (213)(b) (8) (492)
----------- ----------- --------- ---------
Operating income 101 124 (8) 217
Net interest and
investment income
(loss) (23)(c) (23)
Income from
associates 4 4
Other income 10 10
---------
Income before income
tax provision and
minority interest 208
Income tax provision (70)
Minority interest (5)
---------
Net income $ 133
=========
Basic earnings per
share $ 0.50
Diluted earnings per
share $ 0.50
Basic weighted
average shares
outstanding 263
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 $99 million and $32 million for
the three months ended June 30, 2007 and June 30, 2006,
respectively, have been eliminated as they represent
nonrecurring charges attributable to business combinations. In
addition, gains on sale of businesses and equity investments of
$2 million and $0 million have been eliminated from the results
of operations for the three months ended June 30, 2007 and 2006,
respectively, as they represent nonrecurring items.
Activity assessment fees and Section 31 fees have not been
presented as they have no impact on operating income or net
income.
(b) Includes amortization expense of $25 million related to the fair
value of the identifiable intangible assets of Euronext for both
the three months ended June 30, 2007 and the three months ended
June 30, 2006.
(c) Includes interest expense of $35 million and $28 million on the
NYSE Euronext $3.0 billion debt incurred as part of the merger
with Euronext for the three months ended June 30, 2007 and 2006,
respectively.
NYSE Euronext
Reconciliation of non-GAAP financial measures to GAAP measures
(in millions)
We use non-GAAP financial measures of operating performance. Non-GAAP
measures do not replace and are not superior to 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. Other Pro
GAAP Euronext Forma Pro Forma
Results (a) Adjustments Combined
-------- -------- ------------ ---------
Three months
ended June 30,
2007
-----------------
Revenues $ 1,078 $ 11 $(115) (b) $ 974
Operating
expenses (823) (90) 214 (b),(c) (699)
-------- -------- ------------ ---------
Operating income
(loss) 255 (79) 99 275
Net interest and
investment
income (loss) (23) - - (23)
Gain on sale of
equity
investment 2 - (2) -
Income from
associates 2 - - 2
Other income 9 - - 9
-------- -------- ------------ ---------
Income before
income tax
provision and
minority
interest 245 (79) 97 263
Income tax
provision (78) 14 (21) (85)
Minority interest (6) 1 (1) (6)
-------- -------- ------------ ---------
Net income $ 161 (64) 75 $ 172
======== ======== ============ =========
Three months
ended March 31,
2007
-----------------
Revenues $ 702 $ 414 $(185) (b) $ 931
Operating
expenses (601) (238) 180 (b),(c),(d) (659)
-------- -------- ------------ ---------
Operating income 101 176 (5) 272
Net interest and
investment
income (loss) 9 - (34) (e) (25)
Gain on sale of
equity
investment - - - -
Income from
associates - 5 - 5
Other income 4 3 - 7
-------- -------- ------------ ---------
Income before
income tax
provision and
minority
interest 114 184 (39) 259
Income tax
provision (46) (48) 5 (89)
Minority interest - (9) (1) (10)
-------- -------- ------------ ---------
Net income $ 68 $ 127 $ (35) $ 160
======== ======== ============ =========
Six months ended
June 30, 2007
-----------------
Revenues $ 1,780 $ 425 $(300) (b) $ 1,905
Operating
expenses (1,424) (328) 394 (b),(c),(d) (1,358)
-------- -------- ------------ ---------
Operating income 356 97 94 547
Net interest and
investment
income (loss) (14) - (34) (e) (48)
Gain on sale of
equity
investment 2 - (2) -
Income from
associates 2 5 - 7
Other income 13 3 - 16
-------- -------- ------------ ---------
Income before
income tax
provision and
minority
interest 359 105 58 522
Income tax
provision (124) (34) (16) (174)
Minority interest (6) (8) (2) (16)
-------- -------- ------------ ---------
Net income $ 229 $ 63 $ 40 $ 332
======== ======== ============ =========
(a) Corresponding to the results of operations of Euronext for the
period which preceded the 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 $3.0 billion
debt incurred as part of the merger with Euronext.
NYSE Euronext
Condensed consolidated statements of financial condition
(in millions)
June 30, December 31,
2007 2006
----------- -------------
(unaudited)
Assets
Current assets:
Cash, cash equivalents, investment and
other securities $ 1,731 $ 979
Accounts receivable, net 651 335
Deferred income taxes 99 108
Other current assets 342 21
----------- -------------
Total current assets 2,823 1,443
Property and equipment, net 596 378
Goodwill 4,824 536
Other intangible assets, net 7,019 584
Investment in associates 729 -
Deferred income taxes 383 366
Other assets 557 159
----------- -------------
Total assets $ 16,931 $3,466
=========== =============
Liabilities and stockholders' equity
Accounts payable and accrued expenses $ 1,132 $ 650
Deferred revenue 386 114
Short term debt 3,005 -
Deferred income taxes 78 68
----------- -------------
Total current liabilities 4,601 832
Accrued employee benefits 351 355
Deferred revenue 312 322
Long term debt 518 -
Deferred income taxes 2,306 265
Other liabilities 29 23
----------- -------------
Total liabilities 8,117 1,797
Minority interest 182 -
Stockholders' equity 8,632 1,669
----------- -------------
Total liabilities and stockholders' equity $ 16,931 $3,466
=========== =============
NYSE Euronext
Selected Statistical Data:
----------------------------------------------------------------------
Volume Summary - Cash Products
----------------------------------------------------------------------
Average Daily Volume Total Volume
-------------------- ----------------------
(Unaudited) Q2 '07 Q2 '06 % Chg Q2 '07 Q2 '06 % Chg
------ ------ ------ ------- ------- ------
Number of Trading Days -
European Markets 62 62 - 62 62 -
Number of Trading Days -
U.S. Markets 63 63 - 63 63 -
European Cash Products
(trades in thousands) 1,206 945 27.7% 74,798 58,584 27.7%
Equities 1,156 901 28.3% 71,689 55,857 28.3%
Exchange-Traded Funds 5 3 76.8% 320 181 76.8%
Structured Products 38 34 10.8% 2,356 2,126 10.8%
Bonds 7 7 2.9% 432 420 2.9%
U.S. Cash Products (shares
in millions)
NYSE Listed Issues (1)
NYSE Group Handled
Volume (2) 2,159 1,969 9.7% 136,002 124,024 9.7%
NYSE Group Matched
Volume (3) 2,011 1,930 4.2% 126,695 121,582 4.2%
NYSE Group TRF Volume
(4) 17 1,060 -
Total NYSE Listed
Consolidated Volume 3,155 2,579 22.3% 198,744 162,452 22.3%
NYSE Group Share of
Total Consolidated
Volume
Handled Volume (2) 68.4% 76.3% -7.9% 68.4% 76.3% -7.9%
Matched Volume (3) 63.7% 74.8% -11.1% 63.7% 74.8% -11.1%
TRF Volume (4) 0.5% 0.5%
NYSE Arca & Amex Listed
Issues
NYSE Group Handled
Volume (2) 174 144 20.8% 10,955 9,069 20.8%
NYSE Group Matched
Volume (3) 149 124 19.6% 9,382 7,843 19.6%
NYSE Group TRF Volume
(4) 10 638 -
Total NYSE Arca & Amex
Listed Consolidated
Volume 475 419 13.4% 29,902 26,366 13.4%
NYSE Group Share of
Total Consolidated
Volume
Handled Volume (2) 36.6% 34.4% 2.2% 36.6% 34.4% 2.2%
Matched Volume (3) 31.4% 29.7% 1.7% 31.4% 29.7% 1.7%
TRF Volume (4) 2.1% 2.1%
Nasdaq Listed Issues
NYSE Group Handled
Volume (2) 439 539 -18.7% 27,628 33,974 -18.7%
NYSE Group Matched
Volume (3) 356 442 -19.4% 22,430 27,844 -19.4%
NYSE Group TRF Volume
(4) 96 6,078
Total Nasdaq Listed
Consolidated Volume 2,141 2,142 -0.1% 134,889 134,959 -0.1%
NYSE Group Share of
Total Consolidated
Volume
Handled Volume (2) 20.5% 25.2% -4.7% 20.5% 25.2% -4.7%
Matched Volume (3) 16.6% 20.6% -4.0% 16.6% 20.6% -4.0%
TRF Volume (4) 4.5% 4.5%
Exchange-Traded Funds
(1,5)
NYSE Group Handled
Volume (2) 233 194 19.8% 14,682 12,253 19.8%
NYSE Group Matched
Volume (3) 207 176 17.9% 13,057 11,078 17.9%
NYSE Group TRF Volume
(4) 16 1,020
Total Nasdaq Listed
Consolidated Volume 551 454 21.5% 34,736 28,590 21.5%
NYSE Group Share of
Total Consolidated
Volume
Handled Volume (2) 42.3% 42.9% -0.6% 42.3% 42.9% -0.6%
Matched Volume (3) 37.6% 38.7% -1.1% 37.6% 38.7% -1.1%
TRF Volume (4) 2.9% 2.9%
Total Volume
-------------------
(Unaudited) % Chg vs.
YTD 2007 YTD 2006
--------- ---------
Number of Trading Days - European Markets 126 -
Number of Trading Days - U.S. Markets 124 -
European Cash Products (trades in thousands) 148,714 27.9%
Equities 142,280 28.2%
Exchange-Traded Funds 658 79.3%
Structured Products 4,898 20.1%
Bonds 877 -1.2%
U.S. Cash Products (shares in millions)
NYSE Listed Issues (1)
NYSE Group Handled Volume (2) 266,765 11.3%
NYSE Group Matched Volume (3) 250,460 6.5%
NYSE Group TRF Volume (4) 1,060
Total NYSE Listed Consolidated Volume 386,579 23.4%
NYSE Group Share of Total Consolidated Volume
Handled Volume (2) 69.0% -7.5%
Matched Volume (3) 64.8% -10.3%
TRF Volume (4)
NYSE Arca & Amex Listed Issues
NYSE Group Handled Volume (2) 21,196 32.6%
NYSE Group Matched Volume (3) 18,279 31.9%
NYSE Group TRF Volume (4) 638
Total NYSE Arca & Amex Listed Consolidated
Volume 55,772 18.1%
NYSE Group Share of Total Consolidated Volume
Handled Volume (2) 38.0% 4.1%
Matched Volume (3) 32.8% 3.4%
TRF Volume (4)
Nasdaq Listed Issues
NYSE Group Handled Volume (2) 57,484 -10.2%
NYSE Group Matched Volume (3) 46,989 -9.8%
NYSE Group TRF Volume (4) 6,078
Total Nasdaq Listed Consolidated Volume 268,661 1.1%
NYSE Group Share of Total Consolidated Volume
Handled Volume (2) 21.4% -2.7%
Matched Volume (3) 17.5% -2.1%
TRF Volume (4)
Exchange-Traded Funds (1,5)
NYSE Group Handled Volume (2) 28,763 31.8%
NYSE Group Matched Volume (3) 25,716 31.0%
NYSE Group TRF Volume (4) 1,020
Total Nasdaq Listed Consolidated Volume 66,208 29.9%
NYSE Group Share of Total Consolidated Volume
Handled Volume (2) 43.4% 0.6%
Matched Volume (3) 38.8% 0.3%
TRF Volume (4)
Please refer to footnotes on the following page.
NYSE Euronext
----------------------------------------------------------------------
Selected Statistical Data:
----------------------------------------------------------------------
Volume Summary - Derivatives Products
----------------------------------------------------------------------
Average Daily
Volume Total Volume
------------------- ---------------------
(Unaudited; contracts in
thousands) Q2 '07 Q2 '06 % Chg Q2 '07 Q2 '06 % Chg
------ ------ ----- ------- ------- -----
Number of Trading Days -
European Markets 62 62 - 62 62 -
Number of Trading Days -
U.S. Markets 63 63 - 63 63 -
European Derivatives
Products 3,752 3,300 13.7% 232,641 204,611 13.7%
Total Interest Rate Products 1,878 1,781 5.4% 116,439 110,437 5.4%
Short Term Interest Rate
Products 1,759 1,687 4.3% 109,065 104,585 4.3%
Medium and Long Term
Interest Rate Products 119 94 26.0% 7,374 5,852 26.0%
Total Equity Products (6) 1,820 1,480 23.0% 112,820 91,732 23.0%
Total Individual Equity
Products 1,244 929 33.9% 77,154 57,607 33.9%
Total Equity Index
Products 575 550 4.5% 35,666 34,125 4.5%
of which Bclear 707 412 71.4% 43,804 25,553 71.4%
Individual Equity
Products 629 348 81.0% 39,020 21,553 81.0%
Equity Index
Products 77 65 19.6% 4,785 4,000 19.6%
Commodity Products 53 38 39.5% 3,269 2,344 39.5%
Currency Products 2 2 13.8% 112 98 13.8%
U.S. Derivatives Products -
Equity Options (7)
NYSE Arca Options Contracts 1,115 702 58.9% 70,227 44,205 58.9%
Total Consolidated Options
Contracts 9,309 7,460 24.8% 586,471 469,983 24.8%
NYSE Group Share of Total 12.0% 9.4% 2.6% 12.0% 9.4% 2.6%
Total Volume
--------------------
(Unaudited; contracts in thousands) % Chg vs.
YTD 2007 YTD 2006
--------- ----------
Number of Trading Days - European Markets 126 -
Number of Trading Days - U.S. Markets 124 -
European Derivatives Products 452,243 16.9%
Total Interest Rate Products 238,166 13.5%
Short Term Interest Rate Products 223,580 12.8%
Medium and Long Term Interest Rate Products 14,586 25.3%
Total Equity Products (6) 207,895 20.7%
Total Individual Equity Products 133,944 22.9%
Total Equity Index Products 73,951 16.9%
of which Bclear 65,450 95.6%
Individual Equity Products 56,009 116.1%
Equity Index Products 9,441 25.1%
Commodity Products 5,940 28.6%
Currency Products 241 34.9%
U.S. Derivatives Products - Equity Options (7)
NYSE Arca Options Contracts 139,725 50.8%
Total Consolidated Options Contracts 1,137,469 24.1%
NYSE Group Share of Total 12.3% 2.2%
(1) Includes all volume executed in NYSE Group crossing sessions.
Represents the total number of shares of equity securities and
ETFs internally matched on the NYSE Group's exchanges or routed
to and executed at an external market center. NYSE Arca routing
(2) includes odd-lots.
Represents the total number of shares of equity securities and
(3) ETFs executed on the NYSE Group's exchanges.
Represents NYSE's volume in FINRA/NYSE Trade Reporting Facility
(4) (TRF).
(5) Data included in previously identified categories.
Includes all trading activities for Bclear, Liffe's clearing
(6) service for wholesale equity derivatives.
Includes trading in U.S. equity options contracts, not equity-
(7) 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) June March June
30, 31, 30,
2007 2007 2006
------- ------- -------
NYSE Euronext Listed Issuers
NYSE Listed Issuers
NYSE listed issuers(1) 2,735 2,741 2,697
Number of new issuer listings(1) 70 72 60
Capital raised in connection with new
listings ($mm)(2) $12,835 $3,188 $7,244
Euronext Listed Issuers
Euronext listed issuers(1) 1,197 1,199 1,224
Number of new issuer listings(3) 45 25 41
Capital raised in connection with new
listings ($mm)(2) $3,325 $575 $8,160
NYSE Euronext Market Data(4)
NYSE Market Data
Share of Tape A revenues (%) 69.5% 77.2% 86.1%
Share of Tape B revenues (%) 32.2% 38.7% 33.7%
Share of Tape C revenues (%) 23.7% 22.0% 24.2%
Professional subscribers (Tape A) 434,100 430,136 417,329
Euronext Market Data
Number of terminals 211,573 208,166 202,074
NYSE Euronext Operating Expenses
NYSE Euronext employee headcount(5)
NYSE Euronext headcount excluding GL Trade 3,643 3,710 4,082
GL Trade headcount 1,323 1,297 1,081
NYSE Euronext Financial Statistics
NYSE Euronext foreign exchange rate (EUR /US$)
Average EUR /US$ exchange rate for the
quarter $1.348 $1.310 $1.256
(1) Figures for NYSE listed issuers include listed operating
companies, closed-end funds, and ETFs, and do not include NYSE
Arca, Inc. or structured products listed on the NYSE. There were
33 ETFs and 12 operating companies exclusively listed on NYSE
Arca, Inc. as of June 30, 2007. There were 512 structured
products listed on the NYSE as of June 30, 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). At the end of June 2007, 100 companies were listed
on Alternext and 203 ETFs were listed on NextTrack.
(2) Euronext figures show capital raised in millions of euros by
operating companies listed on Eurolist, Alternext and Free Market
and do not include close-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.
(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 includes 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 excludes employees of MTS.
Source: NYSE Euronext
