Nasdaq Reports Record Third Quarter 2015 Non-GAAP Results
(Thomson Reuters ONE) -
* Third quarter 2015 non-GAAP diluted EPS of $0.88, an increase of 13%
compared to the third quarter of 2014. Record revenues and non-GAAP
operating, pre-tax income, net income and diluted EPS. Third quarter 2015
GAAP diluted EPS was $0.80.
* Third quarter 2015 net revenues(1)were $529 million, up 6% year-over-year.
On an organic basis, excluding the impact of foreign exchange rates and
acquisitions, revenues increased 9%.
* Non-GAAP operating margin was 48% in the third quarter of 2015, up from 46%
in the prior year period.
* In the third quarter, Nasdaq repurchased approximately $255 million of
common stock. Through dividend payments and stock buybacks, the company
returned $418 million in capital to shareholders in the first nine months of
2015.
NEW YORK, Oct. 22, 2015 (GLOBE NEWSWIRE) -- Nasdaq, Inc. (NASDAQ:NDAQ) today
reported record results for the third quarter of 2015. Third quarter net
revenues were $529 million, up 6% from $497 million in the prior year period,
driven by a $55 million positive impact from operations, partially offset by a
$23 million negative impact from foreign exchange rates. On an organic basis,
excluding the impact of foreign exchange rates and acquisitions, third quarter
net revenues were up 9%, while across the non-trading segments, organic revenue
growth was 8%.
"As evidence of the ongoing successful execution of Nasdaq's strategy, the
company delivered broad-based organic growth, in both the transactional and
recurring segments, and demonstrated the operating leverage inherent in the
model," said Bob Greifeld, CEO, Nasdaq.
Mr. Greifeld continued, "I'm especially pleased that we were able to set this
new, higher bar, while continuing to invest in attractive growth initiatives,
like The NASDAQ Private Market, NFX, and IR Insight as well as returning a
significant amount of capital to shareholders. Looking forward, the company is
positioned to serve our customers across a wider spectrum of solutions than ever
before, and we remain focused on executing against this expanded opportunity set
to drive growth."
On a non-GAAP basis, third quarter 2015 operating expenses were $276 million, up
3% as compared to the prior year quarter, due to higher organic spend and the
impact of the Dorsey Wright acquisition partially offset by the favorable impact
of changes in foreign exchange rates.
"Nasdaq's hallmark focus on efficiency combined with healthy organic revenue
growth delivered robust cash flow in the quarter," said Lee Shavel, EVP and CFO,
Nasdaq. "Seeing opportunities to generate attractive returns for shareholders
through repurchases, the company took advantage of strong capital generation and
balance sheet flexibility to accelerate the buyback program. The company's
capital strategy will continue to evaluate all investment and capital return
opportunities with a goal of maximizing shareholder returns."
On a GAAP basis, operating expenses were $298 million in the third quarter of
2015, compared to $290 million in the prior year quarter, and include a net $22
million of expenses not reflected in non-GAAP operating expenses.
On a non-GAAP basis, net income attributable to Nasdaq for the third quarter of
2015 was $151 million, or $0.88 per diluted share, up $0.10 compared to $0.78 in
the third quarter of 2014. On a GAAP basis, net income attributable to Nasdaq
for the third quarter of 2015 was $138 million, or $0.80 per diluted share,
compared with $123 million, or $0.71 per diluted share, in the prior year
quarter.
(1) Represents revenues less transaction-based expenses.
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 4.9 million shares, or approximately $255 million of
common stock, in the third quarter of 2015 at an average price of $51.97. At
September 30, 2015, there is $226 million remaining on the buyback
authorization.
At September 30, 2015, the company had cash and cash equivalents of $290 million
and total debt of $2,435 million, resulting in net debt of $2,145 million. This
compares to net debt of $1,870 million at December 31, 2014.
BUSINESS HIGHLIGHTS
Market Services (38% of total net revenues) - Net revenues were $200 million in
the third quarter of 2015, up $11 million when compared to $189 million in the
third quarter of 2014. The $11 million year-over-year increase reflects a $22
million operational increase which was partially offset by an $11 million
decrease due to changes in foreign exchange rates.
Equity Derivatives (10% of total net revenues) - Net equity derivative
trading and clearing revenues were $51 million in the third quarter of
2015, up $1 million compared to the third quarter of 2014. The increase in
equity derivatives revenue was driven by higher average capture and industry
volumes in the U.S., partially offset by foreign exchange impact and lower
U.S. market share.
Cash Equities (13% of total net revenues) - Net cash equity trading revenues
were $67 million in the third quarter of 2015, up $16 million compared to
the third quarter of 2014. The increase in cash equity revenue resulted from
higher average capture and higher industry volumes, partially offset by
foreign exchange impact and lower U.S. market share.
Fixed Income, Currency and Commodities (4% of total net revenues) - Net FICC
trading and clearing revenues were $23 million in the third quarter of
2015, down $7 million from the third quarter of 2014, due to volume declines
in U.S. fixed income and commodities products, foreign exchange impact, and
the scheduled termination of an eSpeed technology licensing customer,
partially offset by higher European fixed income revenues.
Access and Broker Services (11% of total net revenues) - Access and broker
services revenues totaled $59 million in the third quarter of 2015, up $1
million compared to the third quarter of 2014, as organic revenue increases
were partially offset by the impact of changes in foreign exchange rates.
Information Services (25% of total net revenues) - Revenues were $132 million in
the third quarter of 2015, up $18 million from the third quarter of 2014. The
$18 million year-over-year increase reflects a $12 million operational increase
and a $9 million increase from Dorsey Wright, which was partially offset by a $3
million decrease due to changes in foreign exchange rates.
Data Products (19% of total net revenues) - Data products revenues were $103
million in the third quarter of 2015, up $11 million compared to the third
quarter of 2014, as increased revenue from proprietary and shared tape
revenue plans, higher audit collections, as well as the inclusion of revenue
associated with the Dorsey Wright acquisition were partially offset by the
negative 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 third quarter of 2015, up $7
million from the third quarter of 2014. The revenue growth was primarily
driven by the inclusion of revenue associated with the Dorsey Wright
acquisition.
Technology Solutions (25% of total net revenues) - Revenues were $131 million in
the third quarter of 2015, down $4 million from the third quarter of 2014. The
$4 million year-over-year decrease reflects a $2 million operational increase,
which was more than offset by a $6 million decrease due to changes in foreign
exchange rates.
Corporate Solutions (14% of total net revenues) - Corporate solutions
revenues were $72 million in the third quarter of 2015, down $3 million from
the third quarter of 2014. The corporate solutions revenue decline was due
primarily to the impact of changes in foreign exchange rates.
Market Technology (11% of total net revenues) - Market technology revenues
were $59 million in the third quarter of 2015, down $1 million from the
third quarter of 2014. Declines were driven by an unfavorable impact from
changes in foreign exchange rates, largely offset by organic growth. New
order intake was $83 million for the third quarter of 2015, and the order
backlog at September 30, 2015 was $738 million, up 16% from the prior year
period.
Listing Services (12% of total net revenues) - Revenues were $66 million in the
third quarter of 2015, up $7 million compared to the third quarter of 2014. The
$7 million year-over-year increase reflects a $10 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
* The NASDAQ Stock Market (NASDAQ) Led U.S. Exchanges for IPOs in 3Q15. NASDAQ
welcomed 80 new listings, including 35 IPOs. Approximately 80% of all U.S.
IPOs listed with NASDAQ in 3Q15. IPOs included companies from diverse
industries ranging from consumer, healthcare, energy and technology,
including TerraForm Global, NantKwest, Sunrun, Rapid7, MasterCraft, Ollie's
Bargain Outlet and Blue Buffalo.
* Continued momentum at The NASDAQ Private Market (NPM). During the third
quarter of 2015, NPM grew its client base across its diverse product
offering for equity management and liquidity programs to over 120 companies
with 20 new NPM clients such as Legal Zoom, Mixpanel, and Farfetch. Also
during the quarter, NPM and Morgan Stanley Wealth Management announced a
joint initiative to make available wealth management education and services
to employees and participants in private liquidity programs.
* Nasdaq Futures (NFX) launched on July 24, 2015 with a broad coalition of
market participants across different sectors of the industry. NFX, Nasdaq's
U.S. based energy futures market, launched trading across more than twenty
products, with initial focus on several benchmark energy derivative
products. Open interest steadily increased over the third quarter of 2015
and is now passing 300,000 contracts.
* Nasdaq Entrepreneurial Center Opens in San Francisco. Established by the
Nasdaq Educational Foundation as a non-profit organization, the Center will
serve as a central hub for entrepreneurs to learn to build and run
successful businesses, and connect with an established global ecosystem of
industry experts, academic institutions, mentors and other resources.
* Corporate Solutions launches Market and Peer Insight module of next
generation Nasdaq IR Insight desktop and mobile IR platform. Nasdaq IR
Insight is purpose-built for Investor Relations professionals and is slated
to fully replace Thomson One IR in 2016. The Market and Peer Insight module
released in July 2015 focuses on research and estimate capabilities, and
feedback from customers has been extremely encouraging. The full IR Insight
product, including the investors and contact management module, is in beta
testing with customers and is expected to launch in January 2016.
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 $8.8 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
Nasdaq, Inc.
Condensed Consolidated Statements of Income
(in millions, except per share amounts)
(unaudited)
Three Months Ended
September 30, June 30, September 30,
2015 2015 2014
Revenues:
Market Services $ 542 $ 478 $ 510
Transaction-based expenses:
Transaction rebates (256) (216) (236)
Brokerage, clearance and exchange fees (86) (73) (85)
Total Market Services revenues less 200 189 189
transaction-based expenses
Listing Services 66 66 59
Information Services 132 128 114
Technology Solutions 131 135 135
Revenues less transaction-based expenses 529 518 497
Operating Expenses:
Compensation and benefits 150 144 136
Marketing and advertising 6 6 5
Depreciation and amortization 34 34 34
Professional and contract services 33 42 37
Computer operations and data 23 23 22
communications
Occupancy 22 21 26
Regulatory 7 7 7
Merger and strategic initiatives 4 3 5
General, administrative and other 11 19 18
Restructuring charges 8 2 --
Total operating expenses 298 301 290
Operating income 231 217 207
Interest income 1 1 1
Interest expense (28) (27) (29)
Net income from unconsolidated investees 2 1 --
Income before income taxes 206 192 179
Income tax provision 68 60 56
Net income 138 132 123
Net loss attributable to noncontrolling -- 1 --
interests
Net income attributable to Nasdaq $ 138 $ 133 $ 123
Per share information:
Basic earnings per share $ 0.83 $ 0.79 $ 0.73
Diluted earnings per share $ 0.80 $ 0.77 $ 0.71
Cash dividends declared per common share $ 0.25 $ 0.25 $ 0.15
Weighted-average common shares
outstanding for earnings per share:
Basic 166.9 168.7 168.6
Diluted 171.5 172.1 173.2
Nasdaq, Inc.
Revenue Detail
(in millions)
(unaudited)
Three Months Ended
September 30, June 30, September 30,
2015 2015 2014
MARKET SERVICES REVENUES
Equity Derivative Trading and $ 109 $ 97 $ 125
Clearing Revenues
Transaction-based expenses:
Transaction rebates (53) (49) (68)
Brokerage, clearance and exchange (5) (4) (7)
fees
Total net equity derivative trading 51 44 50
and clearing revenues
Cash Equity Trading Revenues 349 297 296
Transaction-based expenses:
Transaction rebates (202) (167) (168)
Brokerage, clearance and exchange (80) (68) (77)
fees
Total net cash equity trading 67 62 51
revenues
Fixed Income, Currency and
Commodities Trading and Clearing 25 25 31
Revenues
Transaction-based expenses:
Transaction rebates (1) -- --
Brokerage, clearance and exchange (1) (1) (1)
fees
Total net fixed income, currency
and commodities trading and 23 24 30
clearing revenues
Access and Broker Services Revenues 59 59 58
Total Net Market Services revenues 200 189 189
LISTING SERVICES REVENUES 66 66 59
INFORMATION SERVICES REVENUES
Data Products revenues 103 99 92
Index Licensing and Services 29 29 22
revenues
Total Information Services 132 128 114
revenues
TECHNOLOGY SOLUTIONS REVENUES
Corporate Solutions revenues 72 76 75
Market Technology revenues 59 59 60
Total Technology Solutions 131 135 135
revenues
Total revenues less transaction- $ 529 $ 518 $ 497
based expenses
Nasdaq, Inc.
Condensed Consolidated Balance Sheets
(in millions)
September 30, December 31,
2015 2014
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 290 $ 427
Restricted cash 18 49
Financial investments, at fair value 193 174
Receivables, net 278 389
Deferred tax assets 49 16
Default funds and margin deposits 2,175 2,194
Other current assets 157 151
Total current assets 3,160 3,400
Property and equipment, net 305 292
Non-current deferred tax assets 630 536
Goodwill 5,421 5,538
Intangible assets, net 1,981 2,077
Other non-current assets 273 228
Total assets $ 11,770 $ 12,071
Liabilities
Current liabilities:
Accounts payable and accrued expenses $ 173 $ 189
Section 31 fees payable to SEC 25 124
Accrued personnel costs 121 143
Deferred revenue 164 177
Other current liabilities 147 116
Deferred tax liabilities 27 37
Default funds and margin deposits 2,175 2,194
Current portion of debt obligations 20 --
Total current liabilities 2,852 2,980
Debt obligations 2,415 2,297
Non-current deferred tax liabilities 603 626
Non-current deferred revenue 211 215
Other non-current liabilities 143 159
Total liabilities 6,224 6,277
Commitments and contingencies
Equity
Nasdaq stockholders' equity:
Common stock 2 2
Additional paid-in capital 3,032 3,222
Common stock in treasury, at cost (105) (41)
Accumulated other comprehensive loss (847) (682)
Retained earnings 3,464 3,292
Total Nasdaq stockholders' equity 5,546 5,793
Noncontrolling interests -- 1
Total equity 5,546 5,794
Total liabilities and equity $ 11,770 $ 12,071
Nasdaq, 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
September 30, June 30, September 30,
2015 2015 2014
GAAP net income $ 138 $ 133 $ 123
attributable to Nasdaq
Non-GAAP adjustments:
Amortization expense of
acquired intangible assets 15 15 17
((1))
Restructuring charges ((2)) 8 2 --
Merger and strategic 4 3 5
initiatives ((3))
Insurance recovery ((4)) (5) -- --
Other -- -- 1
Total non-GAAP adjustments 22 20 23
Adjustment to the income
tax provision to reflect (9) (10) (10)
non-GAAP adjustments
Total non-GAAP adjustments, 13 10 13
net of tax
Non-GAAP net income $ 151 $ 143 $ 136
attributable to Nasdaq
GAAP diluted earnings per $ 0.80 $ 0.77 $ 0.71
share
Total adjustments from non- 0.08 0.06 0.07
GAAP net income above
Non-GAAP diluted earnings $ 0.88 $ 0.83 $ 0.78
per share
(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) 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. In the first quarter of 2015, we
also decided to change our company name from The NASDAQ OMX Group, Inc., to
Nasdaq, Inc., which became effective in the third quarter of 2015. We
currently estimate that we will recognize net pre-tax restructuring charges of
$188 million, consisting of the rebranding of our trade name, severance, asset
impairments, facility-related and other costs. We recognized restructuring
charges of $8 million for the three months ended September 30, 2015, $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.
(3) For the three months ended September 30, 2015 and 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 September 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.
(4) In March 2015, we established a loss reserve of $31 million for litigation
arising from the Facebook IPO in May 2012, which was recorded in general,
administrative and other expense. 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 also covered the 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. The re-opened
accommodation program is now closed. The insurance recovery recognized during
the three months ended September 30, 2015 primarily represents amounts
reimbursed by applicable insurance coverage. Nasdaq anticipates that some or
all of remaining amounts paid from the loss reserve will be reimbursed by
applicable insurance coverage.
Nasdaq, 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
September 30, June 30, September 30,
2015 2015 2014
GAAP operating income $ 231 $ 217 $ 207
Non-GAAP adjustments:
Amortization expense of
acquired intangible assets 15 15 17
((1))
Restructuring charges ((2)) 8 2 --
Merger and strategic 4 3 5
initiatives ((3))
Insurance recovery ((4)) (5) -- --
Other -- -- 1
Total non-GAAP adjustments 22 20 23
Non-GAAP operating income $ 253 $ 237 $ 230
Revenues less transaction- $ 529 $ 518 $ 497
based expenses
Non-GAAP operating margin( 48% 46% 46%
(5))
(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) 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. In the first quarter of 2015, we
also decided to change our company name from The NASDAQ OMX Group, Inc., to
Nasdaq, Inc., which became effective in the third quarter of 2015. We
currently estimate that we will recognize net pre-tax restructuring charges of
$188 million, consisting of the rebranding of our trade name, severance, asset
impairments, facility-related and other costs. We recognized restructuring
charges of $8 million for the three months ended September 30, 2015, $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.
(3) For the three months ended September 30, 2015 and 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 September 30, 2014, merger and strategic initiatives
expense primarily related to our acquisition of the TR Corporate businesses
and other strategic initiatives.
(4) In March 2015, we established a loss reserve of $31 million for litigation
arising from the Facebook IPO in May 2012, which was recorded in general,
administrative and other expense. 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 also covered the 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. The re-opened
accommodation program is now closed. The insurance recovery recognized during
the three months ended September 30, 2015 primarily represents amounts
reimbursed by applicable insurance coverage. Nasdaq anticipates that some or
all of remaining amounts paid from the loss reserve will be reimbursed by
applicable insurance coverage.
(5) Non-GAAP operating margin equals non-GAAP operating income divided by
total revenues less transaction-based expenses.
Nasdaq, 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
September 30, June 30, September 30,
2015 2015 2014
GAAP operating expenses $ 298 $ 301 $ 290
Non-GAAP adjustments:
Amortization expense of
acquired intangible assets (15) (15) (17)
((1))
Restructuring charges ((2)) (8) (2) --
Merger and strategic (4) (3) (5)
initiatives ((3))
Insurance recovery ((4)) 5 -- --
Other -- -- (1)
Total non-GAAP adjustments (22) (20) (23)
Non-GAAP operating expenses $ 276 $ 281 $ 267
(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) 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. In the first quarter of 2015, we
also decided to change our company name from The NASDAQ OMX Group, Inc., to
Nasdaq, Inc., which became effective in the third quarter of 2015. We
currently estimate that we will recognize net pre-tax restructuring charges of
$188 million, consisting of the rebranding of our trade name, severance, asset
impairments, facility-related and other costs. We recognized restructuring
charges of $8 million for the three months ended September 30, 2015, $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.
(3) For the three months ended September 30, 2015 and 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 September 30, 2014, merger and strategic initiatives
expense primarily related to our acquisition of the TR Corporate businesses
and other strategic initiatives.
(4) In March 2015, we established a loss reserve of $31 million for litigation
arising from the Facebook IPO in May 2012, which was recorded in general,
administrative and other expense. 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 also covered the 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. The re-opened
accommodation program is now closed. The insurance recovery recognized during
the three months ended September 30, 2015 primarily represents amounts
reimbursed by applicable insurance coverage. Nasdaq anticipates that some or
all of remaining amounts paid from the loss reserve will be reimbursed by
applicable insurance coverage.
Nasdaq, Inc.
Quarterly Key Drivers Detail
(unaudited)
Three Months Ended
September 30, June 30, September 30,
2015 '2015 2014
Market Services
Equity Derivative Trading and
Clearing
U.S. Equity Options
Total industry average daily 16.0 13.9 14.7
volume (in millions)
Nasdaq PHLX matched market 15.8% 16.4% 16.3%
share
The NASDAQ Options Market 6.7% 6.8% 9.5%
matched market share
Nasdaq BX Options Market 0.9% 0.8% 0.8%
matched market share
Total matched market share 23.4% 24.0% 26.6%
executed on Nasdaq's exchanges
Nasdaq Nordic and Nasdaq
Baltic options and futures
Total average daily volume
options and futures 336,392 399,900 325,950
contracts((1))
Cash Equity Trading
Total U.S.-listed securities
Total industry average daily 7.32 6.35 5.68
share volume (in billions)
Matched share volume (in 88.2 74.3 71.1
billions)
Matched market share executed 15.7% 15.8% 16.6%
on NASDAQ
Matched market share executed 2.1% 1.9% 2.5%
on Nasdaq BX
Matched market share executed 1.0% 0.9% 0.5%
on Nasdaq PSX
Total matched market share 18.8% 18.6% 19.6%
executed on Nasdaq's exchanges
Market share reported to the
FINRA/NASDAQ Trade Reporting 30.2% 32.9% 32.3%
Facility
Total market share((2)) 49.0% 51.5% 51.9%
Nasdaq Nordic and Nasdaq
Baltic securities
Average daily number of equity 405,614 424,915 303,902
trades
Total average daily value of $ 4.4 $ 5.4 $ 4.0
shares traded (in billions)
Total market share executed on 69.7% 67.7% 70.4%
Nasdaq's exchanges
Fixed Income, Currency and
Commodities Trading and
Clearing
Total U.S. Fixed Income
U.S. fixed income notional $ 7,397 $ 8,281 $ 9,439
trading volume (in billions)
Nasdaq Nordic and Nasdaq
Baltic fixed income
Total average daily volume 116,563 105,432 76,134
fixed income contracts
Nasdaq Commodities
Power contracts cleared 385 329 376
(TWh)((3))
Listing Services
Initial public offerings
NASDAQ 35 49 41
Exchanges that comprise Nasdaq 7 31 5
Nordic and Nasdaq Baltic
New listings
NASDAQ((4)) 80 79 76
Exchanges that comprise Nasdaq 9 38 8
Nordic and Nasdaq Baltic((5))
Number of listed companies
NASDAQ((6)) 2,850 2,828 2,746
Exchanges that comprise Nasdaq 835 835 778
Nordic and Nasdaq Baltic((7))
Information Services
Number of licensed exchange 210 197 156
traded products
Assets under management (in $ 103 $ 108 $ 96
billions)((8))
Technology Solutions
Market Technology
Order intake (in $ 83 $ 31 $ 28
millions)((9))
Total order value (in $ 738 $ 707 $ 637
millions)((10))
(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 licensed 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
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(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: Nasdaq via GlobeNewswire
[HUG#1960706]
Unternehmensinformation / Kurzprofil:
Datum: 22.10.2015 - 13:00 Uhr
Sprache: Deutsch
News-ID 428838
Anzahl Zeichen: 49942
contact information:
Town:
New York
Kategorie:
Business News
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