This excerpt taken from the NYX 8-K filed Feb 6, 2008.
NYSE Euronext Announces Fourth Quarter and Full Year 2007 Financial Results
Record trading volumes drive strong revenue growth
Fixed operating expenses reduced
Global customer base benefits from the most diverse array of products and services
NYSE Euronext Conference Call at 8:00a.m. (New York, EST)/2:00p.m. (Paris, CET)
NEW YORK Feb. 5, 2008 NYSE Euronext (NYSE: NYX) today reported net income of $643 million, or $2.70 per diluted share, for the year ended Dec. 31, 2007, a $438 million, or 214%, increase as compared to net income of $205 million, or $1.36 per diluted share, for the year ended Dec. 31, 2006. For the three months ended Dec. 31, 2007, net income and diluted earnings per share were $156 million and $0.59, respectively. This compares to net income and diluted earnings per share of $45 million and $0.29, respectively, for the three months ended Dec. 31, 2006. These results are presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The comparative results for 2006 reflect the operations of NYSE Group only.
NYSE Euronexts strong performance in 2007 reflects the companys significantly increased global presence, customer base, and product and service offerings following the successful merger of NYSE Group and Euronext N.V. on April 4, 2007, as well as ongoing expense management and record transaction volume growth across virtually all of the companys business lines in both Europe and the United States.
By offering customers the highest quality and broadest array of global products and services, NYSE Euronext produced record financial results in 2007, said Duncan L. Niederauer, CEO, NYSE Euronext. We reached new levels in trading volume, message traffic and global IPO proceeds, underscoring the value of our strong technology, compelling business model and unparalleled global presence.
We have a clear vision of the future and are focused on delivering the promised synergies to our shareholders. We will grow organically and through acquisitions that fit strategically and create value for our shareholders, as evidenced by our recently announced acquisitions of the American Stock Exchange and Wombat Financial Software. Additionally, our strategic decision to in-source our European trading and information technology operations through the AEMS transaction, which was announced in December, will give us control over all of our core technology platforms and greatly enhance our global exchange technology business.
Joost van der Does de Willebois, Acting CFO, NYSE Euronext, added, We are in the process of delivering the $100 million in revenue synergies and $275 million in cost savings we identified in connection with the NYSE-Euronext merger. As a result of the recently announced AEMS transaction, we now anticipate realizing over $200 million in annual run-rate technology cost savings by the first quarter of 2010, and by year-end 2010 we expect to realize the full $250 million of merger-related annual run-rate technology savings. Also, highlighting our ongoing focus on effective cost management, we remain confident that we will exceed our $25 million annual run-rate non-technology related savings target by the end of the first quarter of 2008.
On a non-GAAP basis, giving effect to the Euronext transaction as if it occurred at the beginning of the earliest period presented, and excluding merger expenses, exit costs and other non-recurring items, the net income of NYSE Euronext for the year ended Dec. 31, 2007 would have been $705 million, or $2.65 per diluted share, a $221 million or 46% increase versus non-GAAP net income of $484 million, or $1.83 per diluted share, for the year ended Dec. 31, 2006. For the three months ended Dec. 31, 2007, NYSE Euronexts net income on a non-GAAP basis would have been $175 million, or $0.66 per diluted share, a $49 million or 39% increase as compared to net income, on a non-GAAP basis, of $126 million, or $0.47 per diluted share, for the three months ended Dec. 31, 2006. A full reconciliation of these non-GAAP results is included in the attached tables.
At constant US$/ and US$/£ exchange rates, neutralizing the impact of acquisitions and dispositions of businesses and equity investments for the period, and on a non-GAAP basis, NYSE Euronexts revenues,
net of activity assessment fees, for the year ended Dec. 31, 2007 increased $689 million, or 21%, while fixed operating expenses (defined as operating expenses, net of Section 31 fees, merger expenses, exit costs, liquidity payments, routing and clearing fees, and excluding regulatory fine income) decreased $135 million, or 7%, compared to the year ended Dec. 31, 2006. Please refer to the table entitled Normalized revenues and fixed operating expenses including non-GAAP financial measures.