BUSINESS HIGHLIGHTSMarket Services (64% of total net exchange revenues) - Net exchange revenues were $270 million in the fourth quarter of 2012, down $11 million when compared to the fourth quarter of 2011.
Cash Equities (11% of total net exchange revenues) – Total net cash equity trading revenues were $47 million in the fourth quarter of 2012, down $12 million compared to the fourth quarter of 2011. A lower level of industry trading volumes and a slightly lower market share were partially offset by positive revenue capture in both the U.S. and Nordic equity markets. Derivatives (18% of total net exchange revenues) – Total net derivative trading and clearing revenues were $75 million in the fourth quarter of 2012, up $2 million compared to the fourth quarter of 2011. U.S. derivative revenues increased 10% year-over-year on market share gains and positive revenue capture per traded contract. European derivative and clearing revenues declined $2 million on lower volumes. Access and Broker Services (15% of total net exchange revenues) – Access and broker services revenues totaled $65 million, up $4 million compared to the fourth quarter of 2011. The increase was primarily driven by the uptake of new products including 40G connectivity. Market Data (20% of total net exchange revenues) – Total Market Data revenues of $83 million reflect a $4 million decrease compared to the year ago quarter. The decrease was driven by a lower level of audit collections and lower U.S. tape revenues.Issuer Services (24% of total net exchange revenues) – Revenues were $101 million in the fourth quarter of 2012, up $10 million compared to the fourth quarter of 2011. The increase was driven by strength in the Corporate Solutions business which saw double digit revenue growth in the GlobeNewswire, Directors Desk and Surveillance businesses. In addition, Corporate Solutions revenues benefited from the acquisitions of BWise in May 2012 and Glide Technologies in October 2011. The Global Index Group's revenues increased by $1 million, or 8%, year-over-year driven by an increase in the underlying assets associated with licensed financial products due to product growth and newly executed product licenses. Market Technology (12% of total net exchange revenues) – Revenues of $48 million in the fourth quarter of 2012 were flat compared to the fourth quarter of 2011. The Market Technology segment had exceptionally strong order intake of $95 million in the fourth quarter of 2012, rounding out a record year for new business wins. COST GUIDANCE – For the full year of 2013, core operating expenses, including $50 million of expenses related to 2012 acquisitions, are expected to be in the range of $910 million to $930 million, with an additional $50 million to $60 million in incremental new initiative spending, resulting in total operating expenses in the range of $960 million to $990 million. This guidance excludes expenses related to our previously announced cost reduction plan, expenses for the proposed voluntary accommodation program and special legal expenses. We anticipate that the effective tax rate may increase in 2013, due to the potential loss of tax deductions resulting from changes in tax laws in certain jurisdictions. The impact of such tax law changes has not yet been determined. As a result, we expect a 2013 effective tax rate in the range of 34% to 37%. CORPORATE HIGHLIGHTS
- Agreement to Acquire Thomson Reuters' IR, PR and Multimedia businesses. Announced agreement with Thomson Reuters to acquire the Investor Relations, Public Relations and Multimedia Solutions businesses, which provide insight, analytics and communications solutions to more than 7,000 clients worldwide. Upon completion of the transaction, these complementary businesses will be integrated into NASDAQ OMX Corporate Solutions. The combination, which is subject to customary regulatory approvals, will create a global corporate services portfolio, with more diversified and comprehensive offerings to sell to NASDAQ OMX's listing and corporate clients.
- Acquired the Index Business of Mergent, Inc., including Indxis. Announced and closed on the first acquisition in the Global Index Group - the index business of Mergent, Inc., including Indxis. With this acquisition, the Global Index Group is one of the largest providers of dividend-themed indexes based on benchmarked assets.
- Appointment of Chief Information Officer. Appointed Bradley Peterson as Executive Vice President and Chief Information Officer. Mr. Peterson joins NASDAQ OMX from Charles Schwab. He will focus on driving the design and development of scalable and reliable solutions to further the growth and expansion of core products and services and underlying tools and technologies used by NASDAQ OMX customers.
- Combination of Market Technology and Corporate Solutions businesses. Announced the combination of the Market Technology and Corporate Solutions businesses, which will operate under the name Global Technology Solutions and will be led by Anna Ewing, Executive Vice President, Global Technology Solutions. The combination will enable increased focus, drive growth across the company's technology businesses and create a dedicated software and technology management structure.
- Combination of Global Data Products and Global Index Group businesses. Announced the combination of the Global Data Products and Global Index Group businesses, which will operate under the name Global Information Services and be led by John Jacobs, Executive Vice President, Global Information Services. The combination will enable greater customer focus and leverage of NASDAQ OMX's scalable technology, product innovation and robust distribution channels.