As previously disclosed, the staff of the SEC's Division of Enforcement is conducting an investigation relating to these systems issues. Although the Commission has not reached a final conclusion, NASDAQ OMX may pay $10 million in connection with the potential resolution of this matter. As a result, non-GAAP diluted earnings per share in the first quarter of 2013 also exclude $10 million of expenses accrued for this estimated liability.
Non-GAAP diluted earnings per share in the first quarter of 2013 further exclude $10 million of non-cash asset impairment charges, $9 million of restructuring charges, $8 million of merger and strategic initiatives expenses, and $2 million of special legal expenses. On a GAAP basis, net income attributable to NASDAQ OMX for the first quarter of 2013 was $42 million, or $0.25 per diluted share, compared with $85 million, or $0.49 per diluted share, in the prior year quarter.
|1 Represents revenues less transaction rebates, brokerage, clearance and exchange fees.|
"The successful execution of our strategy has delivered solid first quarter results," said Bob Greifeld, CEO, NASDAQ OMX. "While the volume environment remained challenging, our portfolio of corporate, trading, technology, and information businesses continue to deliver consistent revenue and earnings performance. We remain focused on helping our clients manage the growing complexity and connectivity, which is required to optimize today's global business environment, by delivering products and services that enhance efficiency and productivity in the environments in which they operate."
Mr. Greifeld continued, "Looking forward in 2013, while we are confident that a recovering economy and increasing investor confidence will eventually lead to stronger tailwinds for our businesses, our diverse client base of investors, financial institutions, exchanges, and regulators, and public and private companies, are not waiting idly by, and are actively looking for solutions that deliver a more effective means of interacting with the capital markets. As such, we continue to dedicate significant resources towards both organic initiatives, in particular our growing GIFT program, as well as strategic acquisitions, to enhance the options and opportunities inherent in our global offering."Lee Shavel, EVP and CFO, NASDAQ OMX said: "We have realigned our business to better serve our customers and our revised business segments are intended to improve the transparency of our business model for investors. We have combined our Corporate Solutions and Market Technologies businesses to highlight the combined scale of our financial software businesses which will be further enhanced by the acquisition of the Thomson Reuters Corporate Services Business. Similarly, we have combined our Market Data and Index businesses to emphasize the strength of our information services businesses. The revenue and operating profit disclosures for these segments will facilitate comparisons to companies with similar revenue and profitability dynamics." Mr. Shavel continued, "While we have delivered substantial value to shareholders through our share repurchases and dividends, we will be focused in the near-term on reducing the leverage associated with our recently announced acquisitions of Thomson Reuters Corporate Services and eSpeed. Utilizing our strong and consistent cash flow, we believe NASDAQ OMX will return to pre-transaction leverage ratios within a year from closing these transactions. We remain focused on delivering on the objectives we set for the eSpeed and the Thomson Reuters Corporate Services businesses and believe they represent significant strategic and financial opportunities for our shareholders." At March 31, 2013, the company had cash and cash equivalents of $591 million and total debt of $1,966 million, resulting in net debt of $1,375 million. This compares to net debt of $1,479 million at December 31, 2012. During the first quarter of 2013, the company repurchased 0.3 million shares of outstanding common stock under a share repurchase program, for a total of $10 million. Since January 2010, NASDAQ OMX has repurchased $1,182 million of outstanding common stock, representing 53.7 million shares at an average price of $22.03.
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