NYSE Euronext Announces Second Quarter 2012 Financial Results

NYSE Euronext (NYX) today reported net income of $125 million, or $0.49 per diluted share, for the second quarter of 2012, compared to net income of $154 million, or $0.59 per diluted share, for the second quarter of 2011. Results for the second quarter of 2012 and 2011 include $12 million and $18 million, respectively, of pre-tax merger expenses and exit costs. Second quarter 2012 results also include a net $2 million loss from disposal activities related to the previously announced wind down of NYSE Blue. Excluding merger expenses, exit costs, disposal activities and discrete tax items, net income in the second quarter of 2012 was $128 million, or $0.51 per diluted share, compared to $160 million, or $0.61 per diluted share, in the second quarter of 2011.

“We made good progress in executing against our strategy to unlock the inherent value of our community,” said Duncan L. Niederauer, CEO, NYSE Euronext. “We have realigned our client facing and product teams to create a generalist sales force that brings to bear our full-suite of solutions for our clients. We have given notice that we will fully insource clearing and launch NYSE Clearing in June 2013, which will provide us with cost savings and ultimately provide new revenue and better position the Company for the OTC opportunity. Lastly, we made significant headway with our NYSE Liffe U.S. platform with the launch of our GCF repo futures product which fills the increasing market need for a reliable and transparent benchmark for bank funding costs.”

The table below summarizes the financial results 1 for the second quarter of 2012:
																		% Δ 2Q12				Year-to-Date								% Δ YTD '12
($ in millions, except EPS)						2Q12				1Q12				2Q11				vs. 2Q11					2012				2011			vs. YTD '11
Total Revenues 2						$	986			$	952			$	1,092			(10	%)			$	1,938			$	2,240			(13	%)
Total Revenues, Less Transaction-Based Expenses 3							602				601				661			(9	%)				1,203				1,340			(10	%)
Other Operating Expenses 4							396				405				419			(5	%)				801				834			(4	%)
Operating Income 4						$	206			$	196			$	242			(15	%)			$	402			$	506			(21	%)
Net Income 4						$	128			$	121			$	160			(20	%)			$	249			$	337			(26	%)
Diluted Earnings Per Share 4						$	0.51			$	0.47			$	0.61			(16	%)			$	0.97			$	1.28			(24	%)
Operating Margin							34	%			33	%			37	%		(3 ppts)					33	%			38	%		(5 ppts)
Adjusted EBITDA Margin							45	%			44	%			47	%		(2 ppts)					44	%			48	%		(4 ppts)

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.

4 Excludes merger expenses, exit costs, disposal activities and discrete tax items.

“We are making excellent progress on the efficiency and capital deployment streams of Project 14,” commented Michael S. Geltzeiler, Group Executive Vice President and CFO, NYSE Euronext. “Year-to-date, excluding investments and foreign exchange fluctuations, we have reduced operating costs by $35 million, or 4% which puts us on track to exceed our year-one cost savings commitments. On the capital front, we spent $304 million of the $552 million share repurchase authorization, purchasing 11 million shares year-to-date. Ongoing strategic initiatives, combined with our cost reduction plan and lower share count from stock repurchases, should position the Company for a return to earnings growth in 2013 and beyond.”

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