NYSE Euronext has reported net income of USD28m, or USD0.12 per diluted share, for the fourth quarter of 2012, compared to net income of USD110m, or USD0.43 per diluted share, for the fourth quarter of 2011.
Financial results for the fourth quarter of 2012 included a higher level of merger and exit costs, reflecting a write-off of clearing investments in connection with the decision to move to ICE Clear, the unwind of BlueNext and merger related expenses. Fourth quarter of 2012 financial results also included costs of USD24m, consisting primarily of the premium paid to former bondholders, to refinance a portion of company debt outstanding.
Excluding the impact of these items, net income in the fourth quarter of 2012 was USD105m, or USD0.43 per diluted share, compared to USD130m, or USD0.50 per diluted share, in the fourth quarter of 2011. For the full-year 2012, net income was USD462m, or USD1.84 per diluted share, compared to net income of USD653m, or USD2.48 per diluted share for full-year 2011.
Financial results for the full-year 2011 benefited from extreme levels of volatility in the third quarter which drove strong trading volumes across all trading venues, setting new quarterly records for orders and executions. Since the third quarter of 2011 and through 2012, market volatility declined to multi-year lows, driving significant declines in trading volumes.
“Our fourth quarter results reflect both the beneficial actions we took to refinance our debt and rationalise our clearing plans for Liffe in connection with the announced move to ICE Clear,” says Duncan L Niederauer (pictured), chief executive, NYSE Euronext. “Along with the continued progress we are making on reducing expenses as part of Project 14, we are focused on building momentum in our business prior to closing the deal with ICE, which we expect to close in the second half of this year. We believe that combining our highly complementary businesses will create a global exchange player with a particularly compelling and diverse global derivatives franchise, and an ‘end-to-end’ multi-asset business that would be very well positioned to compete and serve a global client base, while creating meaningful value for shareholders.”
Michael S. Geltzeiler, group executive vice president and chief financial officer, NYSE Euronext, says: “Our fourth quarter results were in line with the third quarter, but trailed prior year. The impact of lacklustre trading volumes was somewhat mitigated by lower costs and lower share count. Operating expenses declined USD24m, or six per cent in the fourth quarter and for the full-year 2012, excluding the impact of currency fluctuations and new business initiatives, core operating expenses were down USD115m from the 2011 expense base of USD1,666m, which far exceeded the initial guidance of USD63m in Project 14 savings. Furthermore, we are continuing to deliver on our commitment to optimise the business portfolio with the un-wind of BlueNext, the planned sale of all or part of our MCX stake and our decision to move to ICE Clear, which will increase savings and reduce investment costs in 2013.”