THIRD QUARTER 2012 CONSOLIDATED RESULTS
Total revenues, less transaction-based expenses, which include Section 31 fees, liquidity payments and routing and clearing fees (net revenue), were $559 million in the third quarter of 2012, down $145 million, or 21% compared to the third quarter of 2011 and included a $20 million negative impact from foreign currency fluctuations. The $125 million decrease in net revenue, on a constant currency basis, compared to the third quarter of 2011 was primarily driven by lower average daily volumes (“ADV”), mostly attributable to the derivatives business. Third quarter of 2011 financial results benefited from extreme market volatility in Europe and the U.S. driven by the European sovereign debt crisis and the U.S. debt ceiling issue. Market volatility since the third quarter of 2011 has significantly declined, reaching multi-year lows in August of 2012.
Other operating expenses, excluding merger expenses and exit costs, were $388 million in the third quarter of 2012, down $28 million, or 7% compared to the third quarter of 2011. Excluding the impact of new business initiatives and a $10 million positive impact attributable to foreign currency fluctuations, other operating expenses were down $29 million, or 7%, compared to the third quarter of 2011. Year-to-date on the same basis, other expenses are running $65 million, or 5% below prior year levels.
Year-to-date, Project 14 savings are $82 million, which represents 33% of the total $250 million expected to be saved by the end of 2014, running well above the 25%, or $63 million, expected for the full-year 2012.Operating income, excluding merger expenses and exit costs, was $171 million, down $117 million, or 41% compared to the third quarter of 2011 and included a $10 million negative impact attributable to foreign currency fluctuations. Adjusted EBITDA, excluding merger expenses and exit costs, was $235 million, down $125 million, or 35% compared to the third quarter of 2011. Adjusted EBITDA margin was 42% in the third quarter of 2012, compared to 51% in the third quarter of 2011.
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