Nyse Euronext Q3 profits fall

Included in the results of operations for the quarter ended September 30, 2007 was a $32 million gain on the sale of the member firm regulatory functions of NYSE Regulation to FINRA, and a $55 million deferred tax benefit related to an enacted reduction of the UK corporate tax rate from 30% to 28%. These results are presented in accordance with U.S. generally accepted accounting principles (GAAP).

Following the decision to divest our interest in GL Trade, the business of GL Trade is presented as discontinued and the associated results of operations and financial position are reported separately for all periods presented.

"Despite turbulent markets and the global financial crisis, NYSE Euronext produced stable revenues in the third quarter and continued to drive down operating expenses," said Duncan L. Niederauer, Chief Executive Officer, NYSE Euronext. "We are delivering on our strategic plan and investing in future opportunities as demonstrated by the September roll-out of NYSE Liffe, our U.S. futures business, and the imminent launch of our two European initiatives, SmartPool and our pan-European MTF. The past year's technology upgrade of our trading systems served customers well as NYSE Euronext markets operated with great reliability and provided continuous access to liquidity during an especially volatile period."

On a pro forma non-GAAP basis, excluding the operations of GL Trade, merger expenses, exit costs and other non-recurring items, net income of NYSE Euronext for the quarter ended September 30, 2008 would have been $192 million, or $0.72 per diluted share, versus non-GAAP net income of $201 million, or $0.75 per diluted share, for the quarter ended September 30, 2007. On the same basis, total revenues for the three months ended September 30, 2008 were $1,159 million, a $164 million or 16% increase as compared to revenues of $995 million for the three months ended September 30, 2007. Net revenues (defined as total revenues less direct transaction costs comprised of activity assessment, liquidity payments, and routing and clearing fees) for the three months ended September 30, 2008 were $724 million, a $4 million or 1% increase as compared to net revenues of $720 million for the comparable period a year ago. A full reconciliation of these non-GAAP results is included in the attached tables.

Fixed operating expenses from continuing operations (defined as operating expenses less merger expenses and exit costs, direct transaction costs, and excluding regulatory fine income) were $428 million for the quarter ended September 30, 2008, an $11 million increase as compared to $417 million for the quarter ended September 30, 2007. Excluding the impact of currency translation, acquisitions and dispositions of businesses, and selected strategic initiatives, fixed operating expenses decreased $36 million, or 9%, year-over-year. A full reconciliation of these non-GAAP results is included in the attached tables.

"We remain focused on reducing fixed costs and delivering the technology savings related to the NYSE Euronext merger," said Michael S. Geltzeiler, Group Executive Vice President and Chief Financial Officer, NYSE Euronext. "Insourcing our European technology operations as a result of the AEMS acquisition further allows us to better control costs and generate new revenue opportunities. We are well down the path of integrating Amex into our operations. We expect to exceed the targeted $100 million in savings on the Amex acquisition, and we foresee the bulk of the related integration to be completed by the middle of next year."

Read the full statement here: