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Duncan Niederauer, chief executive of NYSE Euronext

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NYSE Euronext reports net income of USD110 million in Q4 2011

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NYSE Euronext (NYX) has reported net income of USD110 million, or USD0.43 per diluted share, for the fourth quarter of 2011, compared to net income of USD135 million, or USD0.51 per diluted share, for the fourth quarter of 2010. 

Results for the fourth quarter of 2011 and 2010 include USD46 million and USD18 million, respectively, of pre-tax merger expenses and exit costs. Fourth quarter 2011 results also include a net pre-tax charge of USD25 million related to the settlement of a tax matter with French authorities related to BlueNext, a joint venture with Caisse des Depots. 

The USD46 million in merger expenses and exit costs in the fourth quarter of 2011 included USD38 million related to the proposed merger with Deutsche Boerse AG. Excluding merger expenses, exit costs, the BlueNext tax settlement and discrete tax items, net income in the fourth quarter of 2011 was USD130 million, or USD0.50 per diluted share, compared to USD120 million, or USD0.46 per diluted share, in the fourth quarter of 2010.  For the full-year 2011, on the same basis, net income was USD653 million, or USD2.48 per diluted share compared to net income of USD548 million, or USD2.09 per diluted share for full-year 2010.
 
“Last week, the European Commission formally issued a prohibition against our merger with Deutsche Boerse and we have mutually agreed to terminate our business combination agreement,” says Duncan L Niederauer (pictured), CEO, NYSE Euronext.  “We are extremely disappointed with the decision, and as I have stated, we believe that it stems from a fundamentally different view of the competitive dynamics in the global markets.
 
“I would like to thank our shareholders and employees for their patience and support over the past year.  We have only become stronger as a company during this time, as evidenced by the double-digit growth in earnings we recorded in 2011 and our strengthened balance sheet.  The Board of Directors fully supports the management team and our strategy, and in recognition of the strong underlying fundamentals of our business model, we are resuming our previously announced stock repurchase program.”

“Despite challenging market conditions, our fourth quarter results were solid with an increasing contribution from non-trading revenue sources and continued cost discipline driving a 13% increase in operating income,” says Michael S Geltzeiler, Group Executive Vice President and CFO, NYSE Euronext.  “For the full-year, we recorded double-digit growth in operating income and earnings through a combination of business diversification and cost containment, with expenses down USD70 million, or 4% on a constant dollar, constant portfolio basis, exceeding our guidance for the year. 
 
“The progress that we have made over the past year has well-positioned us for 2012 and beyond.  While the near-term outlook for trading volumes and currencies remains clouded, we are continuing to focus on those areas of our business model that we control to create value for shareholders.  We are targeting a two-year plan that, with only modest improvement in the operating environment, will drive higher levels of earnings per share growth through a combination of targeted revenue growth initiatives, accelerated cost efficiency efforts and disciplined deployment of capital.  We will provide the investment community with details on our two-year plan at our investor day in April.”   

 

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