Nymex Holdings (NYSE: NMX), parent company of the New York Mercantile Exchange (NYMEX), today reported that total operating revenues for the fourth quarter ended December 31, 2007 rose 38% to a record $172.6 million compared to $124.8 million for the fourth quarter 2006.
Net income for the fourth quarter 2007 increased 50% to a record $63.5 million compared to $42.3 million for the fourth quarter 2006. Diluted earnings per share for the fourth quarter 2007 were $0.67, based on 94.9 million shares outstanding, compared to $0.48, for the fourth quarter 2006 based on 87.6 million shares outstanding.
For the year ended December 31, 2007, NYMEX reported record total operating revenues of $673.6 million, a 35% increase from $497.2 million for 2006. Net income rose 45% to $224.0 million versus $154.8 million in 2006. Excluding the one-time charge related to Optionable, Inc., in the second quarter of 2007, net income increased 54% to $238.8 million for the full year. Diluted earnings per share were $2.36 versus $1.90 in 2006, based on 94.9 million and 81.5 million shares outstanding, respectively. Excluding the one- time charge, diluted earnings per share for the full year was $2.52.
The Board of Directors approved a regular quarterly dividend of 10 cents per share to shareholders of record as of March 3, 2008, payable on March 28, 2008.
NYMEX Chairman Richard Schaeffer said, "We delivered a strong year of operating performance and profitability as we continued to execute on our strategic goals. Throughout the year we delivered dramatic volume growth through the successful adoption of electronic trading of our markets, while also expanding into new markets and establishing important alliances, such as the launch of our leading Dubai Mercantile Exchange (DME) joint venture in June. Our recent purchase of 15% stake in Imarex ASA, a leading Norwegian freight derivatives exchange, represents an important expansion into the substantial European derivatives market. In addition, we are proud of our leadership in creating The Green Exchange venture, which we expect will become the primary exchange for environmental markets contracts. We remain focused on expanding our distribution internationally, developing innovative product offerings and new ventures, and continuing to deliver profitable growth to shareholders."
NYMEX President and Chief Executive Officer James E. Newsome stated, "We improved profitability in 2007 through our expense reduction program and achieved a record 71% pre-tax margin for the fourth quarter and 65% pre-tax margin for the year. NYMEX continued to set multiple single-day electronic trading volume records on the CME Globex® electronic trading platform, as well as numerous volume and open interest records in our benchmark contracts. Our product innovation continues to lead the industry with the listing of electronic options on futures, carbon emissions, uranium, catastrophe risk futures, and the growing Oman Sour Crude contract, which now dominates Middle Eastern crude oil volume and open interest."Fourth Quarter Results
Clearing and transaction fees rose 38% for the fourth quarter 2007 to $144.9 million compared to $104.8 million for the year ago period. Market data fees increased 50% for the fourth quarter 2007 to $24.6 million versus $16.4 million for the fourth quarter 2006.
Average daily volume was 1.539 million contracts during the fourth quarter 2007, a 28% increase over the fourth quarter 2006. NYMEX electronic trading volume on CME Globex averaged 703,673 contracts per day and represented a 91% increase over fourth quarter 2006 electronic trading volume. NYMEX floor-traded energy futures and options averaged 228,678 contracts a day for the fourth quarter 2007 versus 362,259 contracts per day for the same period of 2006. COMEX electronic trading volume on CME Globex averaged 147,017 contracts per day, an increase of 808% over fourth quarter 2006 average daily electronic trading volume of 16,197 contracts.
NYMEX launched side-by-side trading of physically delivered futures for its COMEX division metals on CME Globex during open outcry hours on December 3, 2006. COMEX metals open outcry average daily volume was 42,095 contracts for the fourth quarter 2007 versus 75,790 contracts per day for the same period in 2006. Average daily volume on NYMEX ClearPort was 310,175 contracts in the fourth quarter 2007 as compared to 301,994 contracts in the same period of 2006. The remaining average daily volume of 107,400 contracts per day consisted of other transactions, which include position transfers and exchanges.
Total operating expenses, excluding direct transaction costs of $23.7 million, were $40.6 million for the fourth quarter 2007 compared to $38.5 million for the same period in 2006. Results for the fourth quarter 2007 included an additional $1.4 million of severance related to the Company's enterprise efficiency plan announced on November 1, 2007, while expenses in the fourth quarter 2006 were below their normal run-rate due to year-end adjustments of bonuses and other accruals.
Income before provision for income taxes was $110.6 million for the fourth quarter 2007 compared to $72.5 million for the fourth quarter 2006. Pre-tax margin, defined as income before provision for income taxes divided by operating revenues, investment income and interest income from securities lending (net of interest expense/fees from securities lending and direct transaction costs) was 71% in the fourth quarter 2007 compared to 64% in fourth quarter 2006.Full Year 2007 Results
Clearing and transaction fees rose 35% for the year ended December 31, 2007 to $565.8 million compared to $419.7 million in 2006. Market data fees were $96.0 million for 2007 versus $63.6 million in 2006, an increase of 51%.
Average daily volume for 2007 was 1.485 million contracts, a 25% increase over 2006. NYMEX electronic trading volume on CME Globex averaged 649,552 contracts per day which represented a 234% increase over 2006 electronic trading volume. NYMEX floor-traded energy futures and options averaged 260,160 contracts a day in 2007. COMEX electronic trading volume on CME Globex averaged 113,509 contracts per day, an increase of 755% over 2006 average daily electronic trading volume. COMEX metals open outcry average daily volume was 43,852 contracts a day in 2007. Average daily volume on NYMEX ClearPort was 335,460 contracts in 2007, up from 313,953 contracts in 2006. The remaining average daily volume of 82,226 per day consisted of other transactions, which include position transfers and exchanges.
Total operating expenses for 2007, excluding direct transaction costs of $96.8 million, decreased to $167.2 million versus $174.4 million in 2006, driven primarily by the Company's cost cutting initiatives.
Income before provision for income taxes was $394.8 million for 2007 compared to $278.9 million in 2006. Excluding the one-time charge, income before provision for income taxes was $420.7 million. Pre-tax margin was 65% in 2007 compared to 60% in 2006. Excluding the one-time charge, pre-tax margin in 2007 was 70%.
For the full year 2007, the Company declared dividends totaling $128.4 million, or $1.36 per common share, which included a special, one-time dividend per share of $1.05.
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