Nasdaq Reports Record Second Quarter 2015 Non-GAAP Results
(Thomson Reuters ONE) -
* Second quarter 2015 non-GAAP diluted EPS of $0.83. Record non-GAAP
operating, pre-tax and net income as well as record non-GAAP diluted EPS.
Second quarter 2015 GAAP diluted EPS was $0.77.
* Second quarter 2015 net revenues(1) were $518 million, down 1% year-over-
year. On an organic basis, excluding the impact of foreign exchange rates
and acquisitions, the company achieved 3% revenue growth.
* Listing Services and Information Services segments both produced record
quarterly revenue.
* Non-GAAP operating expenses were $281 million in the second quarter of
2015, down 3% as compared to the prior-year quarter. On an organic basis,
excluding the impact of foreign exchange and acquisitions, non-GAAP
operating expenses were unchanged in the first half of 2015 compared to the
prior year period.
* Non-GAAP operating margin was 46% in the second quarter of 2015, up from
45% in the prior year period.
* In the second quarter, Nasdaq returned $67 million to shareholders, 47% of
non-GAAP net income, including $25 million in share buybacks and $42 million
in dividends, reflecting a 67% increase in the quarterly dividend.
NEW YORK, July 23, 2015 (GLOBE NEWSWIRE) -- The NASDAQ OMX Group, Inc.
(NASDAQ:NDAQ) today reported results for the second quarter of 2015. Second
quarter net revenues were $518 million, down 1% from $523 million in the prior
year period, driven primarily by a $29 million negative impact from foreign
exchange rates. On an organic basis, excluding the impact of foreign exchange
rates and acquisitions, second quarter net revenues were up 3%, while across the
non-trading segments, organic revenue growth was also 3%.
"In the second quarter, Nasdaq delivered record results and solid earnings
growth despite a mixed backdrop for the industry and continued FX headwinds,"
said Bob Greifeld, CEO, Nasdaq. "Our customer focused approach to the capital
markets industry, including investors, intermediaries and issuers, delivered
solid organic revenue growth despite the low volatility environment."
Mr. Greifeld continued, "As we move into the second half of 2015, we look
forward to continuing our strong performance in foundational equity listings and
trading businesses, working to accelerate growth through product enhancements
and other initiatives, and to launching NFX, a broad-based partnership with
leading market participants to bring more significant choice to the energy
derivatives market. Nasdaq's strategic evolution and expanded capabilities have
multiplied the opportunities to meet the needs of our customers, and our focus
in meeting these challenges will continue to drive our growth."
On a non-GAAP basis, second quarter 2015 operating expenses were $281 million,
down 3% as compared to the prior year quarter, due to the impact of changes in
foreign exchange rates and the result of expense reduction initiatives. On an
organic basis excluding the impact of foreign exchange rates and acquisitions,
non-GAAP operating expenses were unchanged in the first half of 2015 compared to
the first half of 2014.
"Nasdaq's hallmark focus on efficiency, and in particular recent restructuring
efforts, have resulted in flat organic expense levels in the first half of the
year, meaningfully offsetting the significant impact of elevated foreign
exchange headwinds," said Lee Shavel, EVP and CFO, Nasdaq. "Growth in earnings
and cash flow has been coupled with a 67% increase in the dividend and
opportunistic buybacks on the capital return front, continued investment in
research and development, and the acquisition of Dorsey Wright, which is
performing well above initial expectations."
(1) Represents revenues less transaction-based expenses.
On a GAAP basis, operating expenses were $301 million in the second quarter of
2015, compared to $332 million in the prior year quarter, and include $20
million of expenses not reflected in non-GAAP operating expenses, including $15
million of amortization expense from acquired intangible assets, and $5 million
in charges related to strategic initiatives and restructuring.
On a non-GAAP basis, net income attributable to Nasdaq for the second quarter of
2015 was $143 million, or $0.83 per diluted share, up $0.07 compared to $0.76 in
the second quarter of 2014. On a GAAP basis, net income attributable to Nasdaq
for the second quarter of 2015 was $133 million, or $0.77 per diluted share,
compared with $101 million, or $0.59 per diluted share, in the prior year
quarter.
Please refer to our reconciliation of GAAP to non-GAAP net income, diluted
earnings per share, operating income and operating expenses included in the
attached schedules.
The company repurchased 0.5 million shares, or approximately $25 million of our
common stock, in the second quarter of 2015 at an average price of $50.06.
On June 30, 2015, the company had cash and cash equivalents of $324 million and
total debt of $2,281 million, resulting in net debt of $1,957 million. This
compares to net debt of $1,870 million at December 31, 2014.
BUSINESS HIGHLIGHTS
Market Services (36% of total net revenues) - Net revenues were $189 million in
the second quarter of 2015, down $8 million when compared to $197 million in the
second quarter of 2014. The $8 million year-over-year decrease reflects a $6
million operational increase which was more than offset by a $14 million
decrease due to changes in foreign exchange rates.
Equity Derivatives (8% of total net revenues) - Net equity derivative trading
and clearing revenues were $44 million in the second quarter of 2015, down $6
million compared to the second quarter of 2014. The decline in equity
derivatives revenue was driven by lower market share in U.S. options, and
changes in foreign exchange rates, which more than offset the impact of higher
volumes in European products.
Cash Equities (12% of total net revenues) - Net cash equity trading revenues
were $62 million in the second quarter of 2015, up $6 million compared to the
second quarter of 2014. The increase in cash equity revenue resulted from higher
U.S. cash equity average capture and U.S./European industry volumes, partially
offset by lower market shares and the impact of changes in foreign exchange
rates.
Fixed Income, Currency and Commodities (5% of total net revenues) - Net FICC
trading and clearing revenues were $24 million in the second quarter of 2015,
down $7 million from the second quarter of 2014, due to the impact of changes in
foreign exchange rates, volume declines in commodities and U.S. fixed income
products, and a scheduled end in licensing revenues from an eSpeed technology
customer.
Access and Broker Services (11% of total net revenues) - Access and broker
services revenues totaled $59 million in the second quarter of 2015, down $1
million compared to the second quarter of 2014, as organic revenue increases
were more than offset by the impact of changes in foreign exchange rates.
Information Services (25% of total net revenues) - Revenues were $128 million in
the second quarter of 2015, up $5 million from the second quarter of 2014. The
$5 million year-over-year increase reflects a $1 million operational increase
and an $8 million increase from Dorsey Wright, which was partially offset by a
$4 million decrease due to changes in foreign exchange rates.
Data Products (19% of total net revenues) - Data products revenues were $99
million in the second quarter of 2015, down $2 million compared to the second
quarter of 2014, as increased revenue from proprietary and shared tape revenue
plans, as well as the inclusion of revenue associated with the Dorsey Wright
acquisition were more than offset by lower audit collections, and the impact of
changes in foreign exchange rates.
Index Licensing and Services (6% of total net revenues) - Index licensing and
services revenues were $29 million in the second quarter of 2015, up $7 million
from the second quarter of 2014. The revenue growth was driven by the inclusion
of revenue associated with the Dorsey Wright acquisition, and higher revenue
derived from exchange traded products licensed to Nasdaq indexes due to
increases in Assets Under Management (AUM) in listed products.
Technology Solutions (26% of total net revenues) - Revenues were $135 million in
the second quarter of 2015, down $8 million from the second quarter of 2014. The
$8 million year-over-year decrease reflects an $8 million decrease due to
changes in foreign exchange rates.
Corporate Solutions (15% of total net revenues) - Corporate solutions revenues
were $76 million in the second quarter of 2015, down $4 million from the second
quarter of 2014. The corporate solutions revenue decline was due primarily to
the impact of changes in foreign exchange rates, as well as declines in revenues
from investor relations products, partially offset by organic growth in
governance products revenues.
Market Technology (11% of total net revenues) - Market technology revenues were
$59 million in the second quarter of 2015, down $4 million from the second
quarter of 2014. Declines were driven by an unfavorable impact from changes in
foreign exchange rates and declines in software licensing and support revenues,
partially offset by organic growth, in particular from expansion of SMARTS
surveillance. New order intake was $31 million for the second quarter of 2015,
and the order backlog at June 30, 2015 was $707 million.
Listing Services (13% of total net revenues) - Revenues were $66 million in the
second quarter of 2015, up $6 million compared to the second quarter of 2014.
The $6 million year-over-year increase reflects a $9 million operational
increase which was partially offset by a $3 million decrease due to changes in
foreign exchange rates. The operational improvement is due to certain pricing
actions and increases in the number of both U.S. and European listed companies.
CORPORATE HIGHLIGHTS
* Solid growth in assets tracking Nasdaq indexes, particularly in the smart
beta category. Overall AUM in exchange traded products (ETPs) benchmarked to
all Nasdaq indexes increased 13% to $108 billion as of June 30, 2015
compared to June 30, 2014. The Dorsey Wright acquisition continues to see
strong growth and contributed to the proportion of AUM in Nasdaq-licensed
ETPs in smart beta rising to an all-time high of 43% at quarter-end.
* The NASDAQ Stock Market (NASDAQ) Led U.S. Exchanges for IPOs in 2Q15. NASDAQ
welcomed 79 new listings, including 49 IPOs. Approximately 70% of all U.S.
IPOs listed with NASDAQ in 2Q15, including Etsy, David's Tea, Wing Stop,
Alarm.com, PennTEX, and Virtu Financial. Nasdaq European new listings
totaled 38, the highest quarterly number of new European listings in company
history.
* Continued momentum at Nasdaq Private Market (NPM). NPM added 25 new clients
in the second quarter of 2015 across ExactEquity, Outsourced Administration,
Structured Liquidity Programs, and NPM Membership. At June 30, 2015, there
were more than 100 NPM clients, with Pinterest, DocuSign, and Business
Insider among new additions. Also during the second quarter of 2015, NPM
announced a technology initiative to be piloted on ExactEquity in
partnership with Chain, a leading provider of blockchain technology.
* Nasdaq Futures (NFX) moves toward commercial launch with broad coalition of
market participants. NFX, Nasdaq's U.S. based energy futures market,
continues to move toward its launch with completion of market testing. NFX
is building a broad coalition of support and broad distribution including
16 futures commission merchants (FCMs), 6 independent software vendors, over
one dozen registered market makers, and 40 brokers registered to report
block trades. Committed FCMs include ABN AMRO Group, ADM Investor Services,
Advantage Futures, Citigroup Global Markets, ED&F Man Capital Markets,
Goldman Sachs, INTL FCStone, J.P. Morgan, Merrill Lynch, Mizuho Securities
USA, Phillip Capital, Rosenthal Collins Group, Societe Generale and Wedbush
Futures.
ABOUT NASDAQ
Nasdaq (Nasdaq:NDAQ) is a leading provider of trading, clearing, exchange
technology, listing, information and public company services across six
continents. Through its diverse portfolio of solutions, Nasdaq enables customers
to plan, optimize and execute their business vision with confidence, using
proven technologies that provide transparency and insight for navigating today's
global capital markets. As the creator of the world's first electronic stock
market, its technology powers more than 70 marketplaces in 50 countries, and 1
in 10 of the world's securities transactions. Nasdaq is home to more than 3,600
listed companies with a market value of approximately $9.6 trillion and more
than 10,000 corporate clients. To learn more, visit: nasdaq.com/ambition or
business.nasdaq.com.
NON-GAAP INFORMATION
In addition to disclosing results determined in accordance with GAAP, Nasdaq
also discloses certain non-GAAP results of operations, including, but not
limited to, net income attributable to Nasdaq, diluted earnings per share,
operating income, and operating expenses, that make certain adjustments or
exclude certain charges and gains that are described in the reconciliation table
of GAAP to non-GAAP information provided at the end of this release. Management
believes that this non-GAAP information provides investors with additional
information to assess Nasdaq's operating performance by making certain
adjustments or excluding costs or gains and assists investors in comparing our
operating performance to prior periods. Management uses this non-GAAP
information, along with GAAP information, in evaluating its historical operating
performance.
The non-GAAP information is not prepared in accordance with GAAP and may not be
comparable to non-GAAP information used by other companies. The non-GAAP
information should not be viewed as a substitute for, or superior to, other data
prepared in accordance with GAAP.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information set forth in this communication contains forward-looking statements
that involve a number of risks and uncertainties. Nasdaq cautions readers that
any forward-looking information is not a guarantee of future performance and
that actual results could differ materially from those contained in the forward-
looking information. Such forward-looking statements include, but are not
limited to (i) projections about our future financial results, growth, trading
volumes, products and services, taxes and achievement of synergy targets, (ii)
statements about the closing or implementation dates and benefits of certain
strategic, restructuring, technology, de-leveraging and capital return
initiatives, (iii) statements about our integrations of our recent acquisitions,
(iv) statements relating to any litigation or regulatory or government
investigation or action to which we are or could become a party, and (v) other
statements that are not historical facts. Forward-looking statements involve a
number of risks, uncertainties or other factors beyond Nasdaq's control. These
factors include, but are not limited to, Nasdaq's ability to implement its
strategic initiatives, economic, political and market conditions and
fluctuations, government and industry regulation, interest rate risk, U.S. and
global competition, and other factors detailed in Nasdaq's filings with the U.S.
Securities and Exchange Commission, including its annual reports on Form 10-K
and quarterly reports on Form 10-Q which are available on Nasdaq's investor
relations website at http://ir.nasdaq.com and the SEC's website at www.sec.gov.
Nasdaq undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or otherwise.
NDAQF
The NASDAQ OMX Group, Inc.
Condensed Consolidated Statements of Income
(in millions, except per share amounts)
Three Months Ended
------------------------------------
June 30, March 31, June 30,
2015 2015 2014
------------------------------------
(unaudited) (unaudited) (unaudited)
Revenues:
Market Services $ 478 $ 539 $ 539
Transaction-based expenses:
Transaction rebates (216) (261) (252)
Brokerage, clearance and exchange fees (73) (90) (90)
------------------------------------
Total Market Services revenues less
transaction-based expenses 189 188 197
Listing Services 66 64 60
Information Services 128 125 123
Technology Solutions 135 130 143
------------------------------------
Revenues less transaction-based expenses 518 507 523
------------------------------------
Operating Expenses:
Compensation and benefits 144 147 145
Marketing and advertising 6 7 9
Depreciation and amortization 34 34 35
Professional and contract services 42 33 42
Computer operations and data
communications 23 35 23
Occupancy 21 21 24
Regulatory 7 7 7
Merger and strategic initiatives 3 -- 14
General, administrative and other 19 46 33
Restructuring charges 2 150 --
------------------------------------
Total operating expenses 301 480 332
------------------------------------
Operating income 217 27 191
Interest income 1 1 1
Interest expense (27) (28) (30)
Net income from unconsolidated investees 1 14 --
------------------------------------
Income before income taxes 192 14 162
Income tax provision 60 5 61
------------------------------------
Net income 132 9 101
Net loss attributable to noncontrolling
interests 1 -- --
------------------------------------
Net income attributable to Nasdaq $ 133 $ 9 $ 101
------------------------------------
Per share information:
Basic earnings per share $ 0.79 $ 0.05 $ 0.60
------------------------------------
Diluted earnings per share $ 0.77 $ 0.05 $ 0.59
------------------------------------
Cash dividends declared per common share $ 0.25 $ 0.15 $ --
------------------------------------
Weighted-average common shares outstanding
for earnings per share:
Basic 168.7 169.0 169.3
Diluted 172.1 172.7 172.5
The NASDAQ OMX Group, Inc.
Revenue Detail
(in millions)
Three Months Ended
------------------------------------
June 30, March 31, June 30,
2015 2015 2014
------------------------------------
(unaudited) (unaudited) (unaudited)
MARKET SERVICES
Equity Derivative Trading and Clearing
Revenues $ 97 $ 116 $ 129
Transaction-based expenses:
Transaction rebates (49) (64) (71)
Brokerage, clearance and exchange fees (4) (6) (8)
------------------------------------
Total net equity derivative trading and
clearing revenues 44 46 50
Cash Equity Trading Revenues 297 339 318
Transaction-based expenses:
Transaction rebates (167) (197) (181)
Brokerage, clearance and exchange fees (68) (83) (81)
------------------------------------
Total net cash equity trading revenues 62 59 56
Fixed Income, Currency and Commodities
Trading and Clearing Revenues 25 25 32
Transaction-based expenses:
Brokerage, clearance and exchange fees (1) (1) (1)
------------------------------------
Total net fixed income, currency and
commodities trading and clearing revenues 24 24 31
------------------------------------
Access and Broker Services Revenues 59 59 60
------------------------------------
Total Net Market Services revenues 189 188 197
------------------------------------
LISTING SERVICES REVENUES 66 64 60
------------------------------------
INFORMATION SERVICES
Data Products revenues 99 100 101
Index Licensing and Services revenues 29 25 22
------------------------------------
Total Information Services revenues 128 125 123
------------------------------------
TECHNOLOGY SOLUTIONS
Corporate Solutions revenues 76 75 80
Market Technology revenues 59 55 63
------------------------------------
Total Technology Solutions revenues 135 130 143
------------------------------------
Total revenues less transaction-based
expenses $ 518 $ 507 $ 523
------------------------------------
The NASDAQ OMX Group, Inc.
Condensed Consolidated Balance Sheets
(in millions)
June 30, December 31,
2015 2014
-----------------------------
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 324 $ 427
Restricted cash 17 49
Financial investments, at fair value 264 174
Receivables, net 323 389
Deferred tax assets 35 16
Default funds and margin deposits 2,331 2,194
Other current assets 152 151
-----------------------------
Total current assets 3,446 3,400
Property and equipment, net 295 292
Non-current deferred tax assets 621 536
Goodwill 5,469 5,538
Intangible assets, net 2,009 2,077
Other non-current assets 264 228
-----------------------------
Total assets $ 12,104 $ 12,071
-----------------------------
Liabilities
Current liabilities:
Accounts payable and accrued expenses $ 188 $ 189
Section 31 fees payable to SEC 147 124
Accrued personnel costs 94 143
Deferred revenue 231 177
Other current liabilities 125 116
Deferred tax liabilities 30 37
Default funds and margin deposits 2,331 2,194
-----------------------------
Total current liabilities 3,146 2,980
Debt obligations 2,281 2,297
Non-current deferred tax liabilities 606 626
Non-current deferred revenue 208 215
Other non-current liabilities 147 159
-----------------------------
Total liabilities 6,388 6,277
-----------------------------
Commitments and contingencies
Equity
Nasdaq stockholders' equity:
Common stock 2 2
Additional paid-in capital 3,257 3,222
Common stock in treasury, at cost (104) (41)
Accumulated other comprehensive loss (805) (682)
Retained earnings 3,366 3,292
-----------------------------
Total Nasdaq stockholders' equity 5,716 5,793
Noncontrolling interests -- 1
-----------------------------
Total equity 5,716 5,794
-----------------------------
Total liabilities and equity $ 12,104 $ 12,071
-----------------------------
The NASDAQ OMX Group, Inc.
Reconciliation of GAAP Net Income, Diluted Earnings Per Share, Operating
Income and
Operating Expenses to Non-GAAP Net Income, Diluted Earnings Per Share,
Operating Income, and Operating Expenses
(in millions, except per share amounts)
(unaudited)
Three Months Ended
--------------------------------------------
June 30, March 31, June 30,
2015 2015 2014
--------------------------------------------
GAAP net income attributable to
Nasdaq $ 133 $ 9 $ 101
Non-GAAP adjustments:
Amortization of acquired
intangible assets ((1)) 15 15 18
Merger and strategic initiatives
((2)) 3 -- 14
Restructuring charges ((3)) 2 150 --
Other income from OCC equity
investment ((4)) -- (13) --
Special legal expenses ((5)) -- 31 1
Reversal of value added tax refund
((6)) -- 12 --
Extinguishment of debt ((7)) -- -- 9
--------------------------------------------
Total non-GAAP adjustments 20 195 42
Adjustment to the income tax
provision to reflect non-GAAP
adjustments (10) (66) (12)
--------------------------------------------
Total non-GAAP adjustments, net of
tax 10 129 30
Non-GAAP net income attributable
to Nasdaq $ 143 $ 138 $ 131
--------------------------------------------
GAAP diluted earnings per share $ 0.77 $ 0.05 $ 0.59
Total adjustments from non-GAAP
net income above 0.06 0.75 0.17
--------------------------------------------
Non-GAAP diluted earnings per
share $ 0.83 $ 0.80 $ 0.76
--------------------------------------------
(1) Amortization expense related to intangible assets results primarily from
business combinations. These non-cash expenses are fixed in connection with an
acquisition, are then amortized over a number of years after the acquisition
and generally cannot be changed or influenced by management after the
acquisition. Management does not consider these expenses for the purpose of
evaluating the performance of the business or its managers or when making
decisions to allocate resources. Therefore, such expenses are shown as a non-
GAAP adjustment.
(2) For the three months ended June 30, 2015, merger and strategic initiatives
expense primarily related to certain strategic initiatives and our acquisition
of Dorsey, Wright & Associates, LLC. For the three months ended June
30, 2014, merger and strategic initiatives expense primarily related to our
acquisition of the Investor Relations, Public Relations and Multimedia
Solutions businesses of Thomson Reuters, or the TR Corporate businesses, and
other strategic initiatives.
(3) During the first quarter of 2015, we performed a comprehensive review of
our processes, businesses and systems in a company-wide effort to improve
performance, cut costs, and reduce spending. We currently estimate that we
will recognize net pre-tax restructuring charges of $182 million, consisting
of the rebranding of our trade name, severance, asset impairments, facility-
related costs, and other costs. We recognized restructuring charges of $2
million for the three months ended June 30, 2015 and $150 million for the
three months ended March 31, 2015, with the remaining amount to be recognized
through June 2016. The restructuring charge for the three months ended June
30, 2015 includes the reversal of a previously recorded sublease loss reserve
of $10 million for space we lease in New York, New York located at 1500
Broadway. In June 2015, as part of our real estate reorganization plans,
management decided to occupy this space. Restructuring charges are recorded on
restructuring plans that have been committed to by management and are, in
part, based upon management's best estimates of future events. Changes to the
estimates may require future adjustments to the restructuring liabilities.
(4) We record our investment in The Options Clearing Corporation, or OCC, as
an equity method investment. Under the equity method of accounting, we
recognize our share of earnings or losses of an equity method investee based
on our ownership percentage. As a result of a new capital plan implemented by
OCC, we were not able to determine what our share of OCC's income was for the
year ended December 31, 2014 until the first quarter of 2015, when OCC
financial statements were made available to us. Therefore, we recorded other
income of $13 million in the first quarter of 2015 relating to our share of
OCC's income for the year ended December 31, 2014.
(5) Nasdaq has established a loss reserve of $31 million for litigation
arising from the Facebook initial public offering, or IPO, in May 2012. The
reserve is intended to cover the estimated amount of a settlement of class-
action litigation initiated on behalf of investors in Facebook common stock on
the date of its IPO. The reserve would also cover the anticipated cost of re-
opening Nasdaq's voluntary accommodation program to allow any Nasdaq member
that did not file for compensation in 2013 to submit a claim during the second
quarter of 2015, subject to the conditions and limitations that were
applicable to claims filed in 2013. Nasdaq expects that the reopening of the
accommodation program will fully resolve claims by UBS Securities against
Nasdaq. Nasdaq further anticipates that some or all of amounts paid from the
loss reserve will be reimbursed by applicable insurance coverage.
(6) We previously recorded receivables for expected value added tax, or VAT,
refunds based on an approach that had been accepted by the tax authorities in
prior years. The tax authorities have since challenged our approach, and the
revised position of the tax authorities was upheld in court during the first
quarter of 2015. As a result, in the first quarter of 2015, we recorded a
charge of $12 million for previously recorded receivables based on the court
decision.
(7) During the three months ended June 30, 2014, we recorded a $9 million
charge for the early extinguishment of senior notes due in 2015.
The NASDAQ OMX Group, Inc.
Reconciliation of GAAP Net Income, Diluted Earnings Per Share, Operating
Income and
Operating Expenses to Non-GAAP Net Income, Diluted Earnings Per Share,
Operating Income, and Operating Expenses
(in millions, except per share amounts)
(unaudited)
Three Months Ended
--------------------------------------------
June 30, March 31, June 30,
2015 2015 2014
--------------------------------------------
GAAP operating income $ 217 $ 27 $ 191
Non-GAAP adjustments:
Amortization of acquired
intangible assets ((1)) 15 15 18
Merger and strategic initiatives
((2)) 3 -- 14
Restructuring charges ((3)) 2 150 --
Special legal expenses ((4)) -- 31 1
Reversal of value added tax refund
((5)) -- 12 --
Extinguishment of debt ((6)) -- -- 9
--------------------------------------------
Total non-GAAP adjustments 20 208 42
--------------------------------------------
Non-GAAP operating income $ 237 $ 235 $ 233
--------------------------------------------
Revenues less transaction-based
expenses $ 518 $ 507 $ 523
Non-GAAP operating margin( (7)) 46% 46% 45%
(1) Amortization expense related to intangible assets results primarily from
business combinations. These non-cash expenses are fixed in connection with an
acquisition, are then amortized over a number of years after the acquisition
and generally cannot be changed or influenced by management after the
acquisition. Management does not consider these expenses for the purpose of
evaluating the performance of the business or its managers or when making
decisions to allocate resources. Therefore, such expenses are shown as a non-
GAAP adjustment.
(2) For the three months ended June 30, 2015, merger and strategic initiatives
expense primarily related to certain strategic initiatives and our acquisition
of Dorsey, Wright & Associates, LLC. For the three months ended June
30, 2014, merger and strategic initiatives expense primarily related to our
acquisition of the TR Corporate businesses and other strategic initiatives.
(3) During the first quarter of 2015, we performed a comprehensive review of
our processes, businesses and systems in a company-wide effort to improve
performance, cut costs, and reduce spending. We currently estimate that we
will recognize net pre-tax restructuring charges of $182 million, consisting
of the rebranding of our trade name, severance, asset impairments, facility-
related costs, and other costs. We recognized restructuring charges of $2
million for the three months ended June 30, 2015 and $150 million for the
three months ended March 31, 2015, with the remaining amount to be recognized
through June 2016. The restructuring charge for the three months ended June
30, 2015 includes the reversal of a previously recorded sublease loss reserve
of $10 million for space we lease in New York, New York located at 1500
Broadway. In June 2015, as part of our real estate reorganization plans,
management decided to occupy this space. Restructuring charges are recorded on
restructuring plans that have been committed to by management and are, in
part, based upon management's best estimates of future events. Changes to the
estimates may require future adjustments to the restructuring liabilities.
(4) Nasdaq has established a loss reserve of $31 million for litigation
arising from the Facebook IPO in May 2012. The reserve is intended to cover
the estimated amount of a settlement of class-action litigation initiated on
behalf of investors in Facebook common stock on the date of its IPO. The
reserve would also cover the anticipated cost of re-opening Nasdaq's voluntary
accommodation program to allow any Nasdaq member that did not file for
compensation in 2013 to submit a claim during the second quarter of 2015,
subject to the conditions and limitations that were applicable to claims filed
in 2013. Nasdaq expects that the reopening of the accommodation program will
fully resolve claims by UBS Securities against Nasdaq. Nasdaq further
anticipates that some or all of amounts paid from the loss reserve will be
reimbursed by applicable insurance coverage.
(5) We previously recorded receivables for expected VAT refunds based on an
approach that had been accepted by the tax authorities in prior years. The tax
authorities have since challenged our approach, and the revised position of
the tax authorities was upheld in court during the first quarter of 2015. As a
result, in the first quarter of 2015, we recorded a charge of $12 million for
previously recorded receivables based on the court decision.
(6) During the three months ended June 30, 2014, we recorded a $9 million
charge for the early extinguishment of senior notes due in 2015.
(7) Non-GAAP operating margin equals non-GAAP operating income divided by
total revenues less transaction-based expenses.
The NASDAQ OMX Group, Inc.
Reconciliation of GAAP Net Income, Diluted Earnings Per Share, Operating
Income and
Operating Expenses to Non-GAAP Net Income, Diluted Earnings Per Share,
Operating Income, and Operating Expenses
(in millions)
(unaudited)
Three Months Ended
--------------------------------------------
June 30, March 31, June 30,
2015 2015 2014
--------------------------------------------
GAAP operating expenses $ 301 $ 480 $ 332
Non-GAAP adjustments:
Amortization of acquired
intangible assets ((1)) (15) (15) (18)
Merger and strategic initiatives
((2)) (3) -- (14)
Restructuring charges ((3)) (2) (150) --
Special legal expenses ((4)) -- (31) (1)
Reversal of value added tax refund
((5)) -- (12) --
Extinguishment of debt ((6)) -- -- (9)
--------------------------------------------
Total non-GAAP adjustments (20) (208) (42)
--------------------------------------------
Non-GAAP operating expenses $ 281 $ 272 $ 290
--------------------------------------------
(1) Amortization expense related to intangible assets results primarily from
business combinations. These non-cash expenses are fixed in connection with an
acquisition, are then amortized over a number of years after the acquisition
and generally cannot be changed or influenced by management after the
acquisition. Management does not consider these expenses for the purpose of
evaluating the performance of the business or its managers or when making
decisions to allocate resources. Therefore, such expenses are shown as a non-
GAAP adjustment.
(2) For the three months ended June 30, 2015, merger and strategic initiatives
expense primarily related to certain strategic initiatives and our acquisition
of Dorsey, Wright & Associates, LLC. For the three months ended June
30, 2014, merger and strategic initiatives expense primarily related to our
acquisition of the TR Corporate businesses and other strategic initiatives.
(3) During the first quarter of 2015, we performed a comprehensive review of
our processes, businesses and systems in a company-wide effort to improve
performance, cut costs, and reduce spending. We currently estimate that we
will recognize net pre-tax restructuring charges of $182 million, consisting
of the rebranding of our trade name, severance, asset impairments, facility-
related costs, and other costs. We recognized restructuring charges of $2
million for the three months ended June 30, 2015 and $150 million for the
three months ended March 31, 2015, with the remaining amount to be recognized
through June 2016. The restructuring charge for the three months ended June
30, 2015 includes the reversal of a previously recorded sublease loss reserve
of $10 million for space we lease in New York, New York located at 1500
Broadway. In June 2015, as part of our real estate reorganization plans,
management decided to occupy this space. Restructuring charges are recorded on
restructuring plans that have been committed to by management and are, in
part, based upon management's best estimates of future events. Changes to the
estimates may require future adjustments to the restructuring liabilities.
(4) Nasdaq has established a loss reserve of $31 million for litigation
arising from the Facebook IPO in May 2012. The reserve is intended to cover
the estimated amount of a settlement of class-action litigation initiated on
behalf of investors in Facebook common stock on the date of its IPO. The
reserve would also cover the anticipated cost of re-opening Nasdaq's voluntary
accommodation program to allow any Nasdaq member that did not file for
compensation in 2013 to submit a claim during the second quarter of 2015,
subject to the conditions and limitations that were applicable to claims filed
in 2013. Nasdaq expects that the reopening of the accommodation program will
fully resolve claims by UBS Securities against Nasdaq. Nasdaq further
anticipates that some or all of amounts paid from the loss reserve will be
reimbursed by applicable insurance coverage.
(5) We previously recorded receivables for expected VAT refunds based on an
approach that had been accepted by the tax authorities in prior years. The tax
authorities have since challenged our approach, and the revised position of
the tax authorities was upheld in court during the first quarter of 2015. As a
result, in the first quarter of 2015, we recorded a charge of $12 million for
previously recorded receivables based on the court decision.
(6) During the three months ended June 30, 2014, we recorded a $9 million
charge for the early extinguishment of senior notes due in 2015.
The NASDAQ OMX Group, Inc.
Quarterly Key Drivers Detail
(unaudited)
Three Months Ended
---------------------------------------------
June 30, March 31, June 30,
2015 2015 2014
---------------------------------------------
Market Services
Equity Derivative Trading and
Clearing
U.S. Equity Options
Total industry average daily
volume (in millions) 13.9 14.8 14.2
Nasdaq PHLX matched market share 16.4% 17.6% 15.6%
The NASDAQ Options Market matched
market share 6.8% 9.5% 10.6%
Nasdaq BX Options Market matched
market share 0.8% 0.7% 0.8%
---------------------------------------------
Total matched market share
executed on Nasdaq's exchanges 24.0% 27.8% 27.0%
Nasdaq Nordic and Nasdaq Baltic
options and futures
Total average daily volume
options and futures
contracts((1)) 399,900 402,421 343,338
Cash Equity Trading
Total U.S.-listed securities
Total industry average daily
share volume (in billions) 6.35 6.92 6.05
Matched share volume (in
billions) 74.3 83.1 77.0
Matched market share executed on
NASDAQ 15.8% 16.9% 17.1%
Matched market share executed on
Nasdaq BX 1.9% 1.8% 2.6%
Matched market share executed on
Nasdaq PSX 0.9% 1.0% 0.5%
---------------------------------------------
Total matched market share
executed on Nasdaq's exchanges 18.6% 19.7% 20.2%
Market share reported to the
FINRA/NASDAQ Trade Reporting
Facility 32.9% 31.4% 32.5%
Total market share((2)) 51.5% 51.1% 52.7%
Nasdaq Nordic and Nasdaq Baltic
securities
Average daily number of equity
trades 424,915 439,938 331,546
Total average daily value of
shares traded (in billions) $ 5.4 $ 5.5 $ 4.9
Total market share executed on
Nasdaq's exchanges 67.7% 68.8% 69.8%
Fixed Income, Currency and
Commodities Trading and Clearing
Total U.S. Fixed Income
U.S. fixed income notional
trading volume (in billions) $ 8,281 $ 8,365 $ 9,582
Nasdaq Nordic and Nasdaq Baltic
fixed income
Total average daily volume fixed
income contracts 105,432 107,031 105,642
Nasdaq Commodities
Power contracts cleared
(TWh)((3)) 329 363 345
Listing Services
Initial public offerings
NASDAQ 49 27 51
Exchanges that comprise Nasdaq
Nordic and Nasdaq Baltic 31 17 17
New listings
NASDAQ((4)) 79 43 79
Exchanges that comprise Nasdaq
Nordic and Nasdaq Baltic((5)) 38 18 32
Number of listed companies
NASDAQ((6)) 2,828 2,779 2,709
Exchanges that comprise Nasdaq
Nordic and Nasdaq Baltic((7)) 835 804 782
Information Services
Indexes Nasdaq calculates and
distributes (in thousands) 42 42 42
Assets under management (in
billions)((8)) $ 108 $ 105 $ 96
Technology Solutions
Market Technology
Order intake (in millions)((9)) $ 31 $ 40 $ 32
Total order value (in
millions)((10)) $ 707 $ 728 $ 658
(1) Includes Finnish option contracts traded on EUREX Group.
(2) Includes transactions executed on NASDAQ's, Nasdaq BX's and Nasdaq PSX's
systems plus trades reported through the Financial Industry Regulatory
Authority/NASDAQ Trade Reporting Facility.
(3) Transactions executed on Nasdaq Commodities or OTC and reported for
clearing to Nasdaq Commodities measured by Terawatt hours (TWh).
(4) New listings include IPOs, including those completed on a best efforts
basis, issuers that switched from other listing venues, closed-end funds and
separately listed exchange traded funds (ETFs).
(5) New listings include IPOs and represent companies listed on the Nasdaq
Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of
Nasdaq First North.
(6) Number of listed companies for NASDAQ at period end, including separately
listed ETFs.
(7) Represents companies listed on the Nasdaq Nordic and Nasdaq Baltic
exchanges and companies on the alternative markets of Nasdaq First North at
period end.
(8) Represents assets under management in exchange traded products.
(9) Total contract value of orders signed during the period.
(10) Represents total contract value of orders signed that are yet to be
recognized as revenue.
CONTACT: MEDIA RELATIONS CONTACT:
Joseph Christinat
+1.646.441.5121
joseph.christinat(at)nasdaq.com
INVESTOR RELATIONS CONTACT:
Ed Ditmire, CFA
+1.212.401.8737
ed.ditmire(at)nasdaq.com
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: The NASDAQ OMX Group, Inc. via GlobeNewswire
[HUG#1940745]
Unternehmensinformation / Kurzprofil:
Datum: 23.07.2015 - 13:00 Uhr
Sprache: Deutsch
News-ID 408772
Anzahl Zeichen: 60500
contact information:
Town:
New York
Kategorie:
Business News
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"Nasdaq Reports Record Second Quarter 2015 Non-GAAP Results"
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