- Generated quarterly record fourth quarter 2014
non-GAAP diluted EPS of $0.75, a 9% increase year-over-year. Fourth
quarter 2014 GAAP diluted EPS was $0.50.
- Fourth quarter 2014 net revenues1
were $517 million, down 1% year-over-year. On an organic basis,
excluding the impact of foreign exchange rates, fourth quarter net
revenues rose 3%.
- Non-GAAP operating expenses were $296 million in
the fourth quarter of 2014, down 5% year-over-year. On an organic
basis, excluding the impact of foreign exchange rates, non-GAAP
operating expenses fell 2%.
- Non-GAAP operating margin was 43% in the fourth
quarter, up from 40% in the prior year period.
- The company repurchased $58 million of stock in
the fourth quarter of 2014, bringing total repurchases to $178
million since the repurchase program was restarted in the second
quarter of 2014.
NEW YORK, Jan. 29, 2015 (GLOBE NEWSWIRE) -- The
NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today reported results for the
fourth quarter of 2014. Fourth quarter net revenues were $517
million, down 1% from $520 million in the prior year period, driven
by the impact of foreign exchange rates. On an organic basis,
excluding the impact of foreign exchange rates, fourth quarter net
revenues increased 3% year-over-year.
"Nasdaq's record profitability resulted from its
improved strategic positioning, successfully meeting the evolving
demands of our diverse client base, and maintaining the
organization's relentless focus on efficiency," said Bob Greifeld, CEO, Nasdaq. "Moreover, the strong
results in the fourth quarter, and 2014 overall, were driven by
both broad-based organic growth and the first full year of
contributions from our recent acquisitions."
Mr. Greifeld continued, "I'm
also pleased to say that we realized a sequential uptick in organic
growth in the fourth quarter. More importantly, we see clear
avenues to accelerate organic growth further from strategic
investments made in upgrading and launching several product
offerings within recently-acquired fixed income and corporate
solutions businesses. The 2015 environmental backdrop also shows
evidence of continued momentum and should bring us new
opportunities to serve customers."
On a non-GAAP basis, fourth quarter 2014 operating
expenses were $296 million, down 5% as compared to the prior year
quarter, due to the impact of changes in foreign exchange rates and
the result of the expense reduction initiatives in 2014. On an
organic basis, fourth quarter 2014 non-GAAP operating expenses were
down 2% compared to the prior year period. On a GAAP basis,
operating expenses were $344 million in the fourth quarter of 2014,
up 22% compared to $282 million in the prior year quarter.
Fourth quarter 2014 non-GAAP diluted earnings per
share was $0.75, compared to $0.69 in the prior year quarter.
Non-GAAP diluted earnings per share for the fourth quarter of 2014
excluded $97 million of pre-tax adjustments, including: $49 million
of asset impairment charges related to acquired intangible assets
associated with certain customer relationships and certain
technology assets, $35 million of merger and strategic initiatives
costs (including a charge of $23 million related to the reversal of
a receivable under a tax sharing agreement with an unrelated party
that is offset on the tax line, and $12 million primarily
associated with our acquisitions of the Thomson Reuters Corporate
businesses), $11 million of sublease loss reserve charges on space
we currently occupy due to excess capacity, and $2 million of debt
extinguishment costs incurred with the refinancing of the company's
credit facility.
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.
On a GAAP basis, net income attributable to Nasdaq
for the fourth quarter of 2014 was $87 million, or $0.50 per
diluted share, compared with $141 million, or $0.81 per diluted
share, in the prior year quarter.
"Our continued expense discipline offset foreign
exchange headwinds and helped deliver record earnings for our
shareholders," said Lee Shavel, EVP and CFO,
Nasdaq. "We anticipate the ongoing successful integration of
acquisitions, coupled with our broader expense management
philosophy, will create margin expansion opportunities throughout
2015."
Mr. Shavel continued,
"Additionally, we continue to balance the use of our capital to
create value for shareholders and clients. We have repurchased $178
million in stock since the second quarter while also enhancing our
profitability profile, growth dynamics and product offering through
the agreement to acquire Dorsey, Wright & Associates. We will
continue to utilize our capital with the goals of maximizing
returns for our shareholders and creating value for our
clients."
The company repurchased 1.4 million shares, or $58
million of stock, in the fourth quarter of 2014 at an average price
of $42.07.
On December 31, 2014, the company had cash and
cash equivalents of $427 million and total debt of $2,313 million,
resulting in net debt of $1,886 million. This compares to net debt
of $2,236 million at December 31, 2013.
1 Represents
revenues less transaction-based expenses.
BUSINESS HIGHLIGHTS
Market Services (39% of total net revenues) - Net revenues were $205
million in the fourth quarter of 2014, up $1 million when compared
to $204 million in the fourth quarter of 2013.
Equity Derivatives (10% of total
net revenues) - Net equity derivative trading and clearing
revenues were $53 million in the fourth quarter of 2014, down $1
million compared to the fourth quarter of 2013. The decline in
equity derivatives revenue was driven by changes in foreign
exchange rates. Excluding the impact of foreign exchange rates,
revenues rose on higher contract volumes in both U.S. and European
markets, partially offset by moderate declines in average
capture.
Cash Equities (11% of total net
revenues) - Net cash equity trading revenues were $59 million
in the fourth quarter of 2014, up $9 million compared to the fourth
quarter of 2013. The increase in cash equity trading revenue
resulted primarily from higher U.S. industry trading volume and an
increase in overall market share executed on Nasdaq's exchanges.
Revenues from European cash equities rose modestly, as higher
industry value traded, average capture and market share were
partially offset by the impact of changes in foreign exchange
rates.
Fixed Income, Currency and
Commodities (6% of total net revenues) - Net FICC trading
revenues were $29 million in the fourth quarter of 2014, down $7
million from the fourth quarter of 2013, due to declines across
most FICC product volumes, a scheduled reduction in payments from
an eSpeed technology customer, and the impact of changes in foreign
exchange rates.
Access and Broker Services (12%
of total net revenues) - Access and broker services revenues
totaled $64 million in the fourth quarter of 2014, unchanged
compared to the fourth quarter of 2013, as core revenue increases
were offset by the impact of changes in foreign exchange rates.
Information Services (22% of
total net revenues) - Revenues were $113 million in the fourth
quarter of 2014, up $6 million from the fourth quarter of 2013.
Data Products (18% of total net
revenues) - Data products revenues were $91 million in the
fourth quarter of 2014, up $4 million compared to the fourth
quarter of 2013, due primarily to increased revenues from Nasdaq
BASIC.
Index Licensing and Services (4%
of total net revenues) - Index licensing and services revenues
were $22 million in the fourth quarter of 2014, up $2 million from
the fourth quarter of 2013. The revenue growth was largely a
function of materially higher assets under management in licensed
exchange traded products.
Technology Solutions (27% of
total net revenues) - Revenues were $138 million in the fourth
quarter of 2014, down $13 million from the fourth quarter of
2013.
Corporate Solutions (15% of total
net revenues) - Corporate solutions revenues were $78 million
in the fourth quarter of 2014, down $5 million from the fourth
quarter of 2013. The corporate solutions revenue decline was due
primarily to IR product pricing actions designed to compensate for
subsidies previously provided to certain customers by a competitor,
as well as to maintain and promote broader customer relationships.
Additional declines in IR products and the impact of changes in
foreign exchange rates were partially offset by organic growth in
multimedia and governance solutions.
Market Technology (12% of total
net revenues) - Market technology revenues were $60 million in
the fourth quarter of 2014, down $8 million from the fourth quarter
of 2013. Declines were driven primarily by an unfavorable foreign
exchange impact and the recognition of $3 million of previously
deferred revenues at BWise in the fourth quarter of 2013, partially
offset by organic growth, in particular from expansion of SMARTS
Broker surveillance and BWise enterprise risk management solutions.
New order intake of $193 million for the fourth quarter of 2014 and
the $704 million backlog at December 31, 2014 each set new all-time
record highs.
Listing Services (12% of total
net revenues) - Revenues were $61 million in the fourth quarter
of 2014, up $3 million compared to the fourth quarter of 2013 due
to increases in the number of both U.S. and European listed
companies, and a higher number of initial public offerings (IPOs),
partially offset by the impact of changes in foreign exchange
rates.
INITIATING 2015 NON-GAAP EXPENSE
GUIDANCE - The company has initiated 2015 non-GAAP operating
expense guidance of $1,120-$1,150 million, which excludes
amortization of acquired intangibles. Included in this non-GAAP
operating expense guidance is an expected $30-$40 million in
R&D spending.
CORPORATE HIGHLIGHTS
- Salil Donde appointed as EVP to
Lead Information Services. Mr. Donde will join Nasdaq with
extensive experience leading technology and data companies, a
diverse background in the broader financial services industry, and
a proven track record of transforming companies and creating value
for shareholders. Most recently, Mr. Donde was CEO of Lewtan
Technologies Inc., where, in his three-year tenure, he developed
and executed a new strategy to broaden the client base, increase
revenues, and consolidate product platforms.
- NASDAQ Led U.S. Exchanges for
IPOs in 2014. Nasdaq announced it welcomed 327 new listings to
The NASDAQ Stock Market (NASDAQ) in 2014, including 189 IPOs, more
than any other U.S. exchange, representing a 50 percent increase
from the 126 IPOs that occurred on NASDAQ in 2013. 62 percent of
the top 100 best performing IPOs overall this year, including 8 of
the top 10, listed on NASDAQ and combined proceeds raised by
NASDAQ-listed IPOs in 2014 totaled more than $22 billion.
- Market Technology Sees Record
New Order Intake in the Fourth Quarter of 2014. Order Intake
was a record high at $193 million in the fourth quarter of 2014,
and the backlog stood at a record $704 million on December 31,
2014. Notable new business included The Japan Exchange Group, which
will upgrade to Genium INET Trading, including TradeGuard;
Singapore Exchange, which will upgrade its derivatives market to
Genium INET Trading & Clearing, including TradeGuard, and KSEI,
an Indonesian CSD, which will implement the X-stream CSD. In
addition, the BWise enterprise risk management solution saw record
new order intake, and sales of SMARTS Broker set a new quarterly
record.
- Agreement to Acquire Dorsey,
Wright & Associates (DWA), Strengthening its Position as a
Leader in Smart Beta. DWA is a market leader in data analytics,
passive indexing and smart beta strategies, and will add to
Nasdaq's robust index portfolio, bringing model-based strategies
and analysis to support the financial advisor community, and
further strengthening Nasdaq's position as a leading smart beta
index provider. As a result, Nasdaq Global Indexes will become one
of the largest providers of smart beta indexes with nearly $45
billion in assets benchmarked to its family of Smart Beta indexes
and more than $105 billion benchmarked to all Nasdaq Indexes, as of
December 31, 2014.
ABOUT NASDAQ
Nasdaq (Nasdaq:NDAQ) is a leading provider of
trading, clearing, exchange technology, regulatory, securities
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 3,500 listed companies with a market
value of over $9.1 trillion and more than 10,000 corporate clients.
To learn more, visit www.nasdaq.com/ambition or
www.nasdaqomx.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,
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 |
Year Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2014 |
2014 |
2013 |
2014 |
2013 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
Revenues: |
|
|
|
|
|
Market
Services |
$ 607 |
$ 515 |
$ 533 |
$ 2,247 |
$ 2,092 |
Transaction-based expenses: |
|
|
|
|
|
Transaction rebates |
(294) |
(236) |
(254) |
(1,065) |
(1,002) |
Brokerage, clearance and exchange fees |
(108) |
(85) |
(75) |
(368) |
(314) |
Total
Market Services revenues less transaction-based expenses |
205 |
194 |
204 |
814 |
776 |
|
|
|
|
|
|
Listing Services |
61 |
59 |
58 |
238 |
228 |
Information Services |
113 |
114 |
107 |
473 |
436 |
Technology Solutions |
138 |
130 |
151 |
542 |
455 |
|
|
|
|
|
|
Revenues less transaction-based expenses |
517 |
497 |
520 |
2,067 |
1,895 |
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
Compensation and benefits |
149 |
136 |
146 |
588 |
539 |
Marketing and advertising |
8 |
5 |
8 |
32 |
30 |
Depreciation and amortization |
33 |
34 |
34 |
137 |
122 |
Professional and contract services |
40 |
37 |
45 |
157 |
151 |
Computer operations and data communications |
24 |
22 |
25 |
92 |
82 |
Occupancy |
34 |
26 |
27 |
110 |
98 |
Regulatory |
6 |
7 |
7 |
27 |
30 |
Merger
and strategic initiatives |
35 |
5 |
(11) |
81 |
22 |
General, administrative and other |
15 |
18 |
19 |
89 |
80 |
Restructuring charges |
-- |
-- |
-- |
-- |
9 |
Voluntary accommodation program |
-- |
-- |
(18) |
-- |
44 |
Total operating expenses |
344 |
290 |
282 |
1,313 |
1,207 |
|
|
|
|
|
|
Operating income |
173 |
207 |
238 |
754 |
688 |
|
|
|
|
|
|
Interest income |
2 |
1 |
2 |
6 |
9 |
Interest expense |
(28) |
(29) |
(30) |
(117) |
(111) |
Gain
on sale of investment security |
-- |
-- |
30 |
-- |
30 |
Asset
impairment charges |
(49) |
-- |
(5) |
(49) |
(14) |
Loss
from unconsolidated investees, net |
-- |
-- |
-- |
-- |
(2) |
|
|
|
|
|
|
Income before income taxes |
98 |
179 |
235 |
594 |
600 |
Income
tax provision |
11 |
56 |
94 |
181 |
216 |
|
|
|
|
|
|
Net income |
87 |
123 |
141 |
413 |
384 |
|
|
|
|
|
|
Net
loss attributable to noncontrolling interests |
-- |
-- |
-- |
1 |
1 |
|
|
|
|
|
|
Net income attributable to Nasdaq |
$ 87 |
$ 123 |
$ 141 |
$ 414 |
$ 385 |
|
|
|
|
|
|
Per share information: |
|
|
|
|
|
Basic
earnings per share |
$ 0.52 |
$ 0.73 |
$ 0.84 |
$ 2.45 |
$ 2.30 |
Diluted earnings per share |
$ 0.50 |
$ 0.71 |
$ 0.81 |
$ 2.39 |
$ 2.25 |
Cash
dividends declared per common share |
$ 0.15 |
$ 0.15 |
$ 0.13 |
$ 0.58 |
$ 0.52 |
|
|
|
|
|
|
Weighted-average common shares outstanding for
earnings per share: |
|
|
|
|
|
Basic |
168.2 |
168.6 |
168.3 |
168.9 |
166.9 |
Diluted |
172.5 |
173.2 |
173.1 |
173.0 |
171.3 |
|
|
|
|
|
|
The NASDAQ OMX Group,
Inc. |
Revenue Detail |
(in millions) |
|
|
Three Months Ended |
Year Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2014 |
2014 |
2013 |
2014 |
2013 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
MARKET SERVICES |
|
|
|
|
|
Equity Derivative Trading and Clearing
Revenues |
$ 135 |
$ 125 |
$ 132 |
$ 525 |
$ 514 |
Transaction-based expenses: |
|
|
|
|
|
Transaction rebates |
(73) |
(68) |
(71) |
(285) |
(259) |
Brokerage, clearance and exchange fees |
(9) |
(7) |
(7) |
(32) |
(33) |
Total net equity derivative trading and clearing
revenues |
53 |
50 |
54 |
208 |
222 |
|
|
|
|
|
|
Cash Equity Trading Revenues |
378 |
296 |
300 |
1,335 |
1,212 |
Transaction-based expenses: |
|
|
|
|
|
Transaction rebates |
(221) |
(168) |
(183) |
(780) |
(743) |
Brokerage, clearance and exchange fees |
(98) |
(77) |
(67) |
(332) |
(279) |
Total net cash equity trading revenues |
59 |
51 |
50 |
223 |
190 |
|
|
|
|
|
|
Fixed Income, Currency and Commodities Trading and
Clearing Revenues |
30 |
31 |
37 |
130 |
111 |
Transaction-based expenses: |
|
|
|
|
|
Brokerage, clearance and exchange fees |
(1) |
(1) |
(1) |
(4) |
(2) |
Total net fixed income, currency and commodities
trading and clearing revenues |
29 |
30 |
36 |
126 |
109 |
|
|
|
|
|
|
Access and Broker Services Revenues |
64 |
63 |
64 |
257 |
255 |
|
|
|
|
|
|
Total Net Market Services revenues |
205 |
194 |
204 |
814 |
776 |
|
|
|
|
|
|
LISTING SERVICES REVENUES |
61 |
59 |
58 |
238 |
228 |
|
|
|
|
|
|
INFORMATION SERVICES |
|
|
|
|
|
Data Products revenues |
91 |
92 |
87 |
384 |
362 |
Index Licensing and Services revenues |
22 |
22 |
20 |
89 |
74 |
|
|
|
|
|
|
Total Information Services revenues |
113 |
114 |
107 |
473 |
436 |
|
|
|
|
|
|
TECHNOLOGY SOLUTIONS |
|
|
|
|
|
Corporate Solutions revenues |
78 |
75 |
83 |
314 |
230 |
Market Technology revenues |
60 |
55 |
68 |
228 |
225 |
|
|
|
|
|
|
Total Technology Solutions revenues |
138 |
130 |
151 |
542 |
455 |
|
|
|
|
|
|
Total revenues less transaction-based
expense |
$ 517 |
$ 497 |
$ 520 |
$ 2,067 |
$ 1,895 |
|
|
|
|
|
|
The NASDAQ OMX Group,
Inc. |
Revenue Detail |
(in millions) |
|
|
Three Months Ended |
Year Ended |
|
March 2014 |
June 2014 |
September 2014 |
December 2014 |
December 31, |
December 31, |
December 31, |
|
Actual |
Actual |
Actual |
Actual |
2014 |
2013 |
2012 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
|
MARKET SERVICES |
|
|
|
|
|
|
|
Equity Derivative Trading and Clearing
Revenues |
$ 138 |
$ 129 |
$ 125 |
$ 135 |
$ 525 |
$ 514 |
$ 507 |
Transaction-based expenses: |
|
|
|
|
|
|
|
Transaction rebates |
(75) |
(71) |
(68) |
(73) |
(285) |
(259) |
(250) |
Brokerage, clearance and exchange fees |
(7) |
(8) |
(7) |
(9) |
(32) |
(33) |
(34) |
Total net equity derivative trading and clearing
revenues |
56 |
50 |
50 |
53 |
208 |
222 |
223 |
|
|
|
|
|
|
|
|
Cash Equity Trading Revenues |
343 |
318 |
296 |
378 |
1,335 |
1,212 |
1,369 |
Transaction-based expenses: |
|
|
|
|
|
|
|
Transaction rebates |
(210) |
(181) |
(168) |
(221) |
(780) |
(743) |
(854) |
Brokerage, clearance and exchange fees |
(76) |
(81) |
(77) |
(98) |
(332) |
(279) |
(308) |
Total net cash equity trading revenues |
57 |
56 |
51 |
59 |
223 |
190 |
207 |
|
|
|
|
|
|
|
|
Fixed Income, Currency and Commodities Trading and
Clearing Revenues |
36 |
32 |
31 |
30 |
130 |
111 |
73 |
Transaction-based expenses: |
|
|
|
|
|
|
|
Brokerage, clearance and exchange fees |
(1) |
(1) |
(1) |
(1) |
(4) |
(2) |
-- |
Total net fixed income, currency and commodities
trading and clearing revenues |
35 |
31 |
30 |
29 |
126 |
109 |
73 |
|
|
|
|
|
|
|
|
Access and Broker Services Revenues |
65 |
65 |
63 |
64 |
257 |
255 |
257 |
|
|
|
|
|
|
|
|
Total Net Market Services revenues |
213 |
202 |
194 |
205 |
814 |
776 |
760 |
|
|
|
|
|
|
|
|
LISTING SERVICES REVENUES |
58 |
60 |
59 |
61 |
238 |
228 |
224 |
|
|
|
|
|
|
|
|
INFORMATION SERVICES |
|
|
|
|
|
|
|
Data Products revenues |
100 |
101 |
92 |
91 |
384 |
362 |
337 |
Index Licensing and Services revenues |
23 |
22 |
22 |
22 |
89 |
74 |
63 |
|
|
|
|
|
|
|
|
Total Information Services revenues |
123 |
123 |
114 |
113 |
473 |
436 |
400 |
|
|
|
|
|
|
|
|
TECHNOLOGY SOLUTIONS |
|
|
|
|
|
|
|
Corporate Solutions revenues |
82 |
80 |
75 |
78 |
314 |
230 |
89 |
Market Technology revenues |
53 |
58 |
55 |
60 |
228 |
225 |
201 |
|
|
|
|
|
|
|
|
Total Technology Solutions revenues |
135 |
138 |
130 |
138 |
542 |
455 |
290 |
|
|
|
|
|
|
|
|
Total revenues less transaction-based
expenses |
$ 529 |
$ 523 |
$ 497 |
$ 517 |
$ 2,067 |
$ 1,895 |
$ 1,674 |
|
|
|
|
|
|
|
|
The NASDAQ OMX Group,
Inc. |
Condensed Consolidated
Balance Sheets |
(in millions) |
|
|
December 31, |
December 31, |
|
2014 |
2013 |
Assets |
(unaudited) |
|
Current assets: |
|
|
Cash
and cash equivalents |
$ 427 |
$ 398 |
Restricted cash |
49 |
84 |
Financial investments, at fair value |
174 |
189 |
Receivables, net |
389 |
393 |
Deferred tax assets |
16 |
12 |
Default funds and margin deposits |
2,194 |
1,961 |
Other
current assets |
151 |
126 |
Total
current assets |
3,400 |
3,163 |
Property and equipment, net |
292 |
268 |
Non-current deferred tax assets |
536 |
404 |
Goodwill |
5,538 |
6,186 |
Intangible assets, net |
2,077 |
2,386 |
Other
non-current assets |
244 |
170 |
Total
assets |
$ 12,087 |
$ 12,577 |
|
|
|
Liabilities |
|
|
Current liabilities: |
|
|
Accounts payable and accrued expenses |
$ 189 |
$ 228 |
Section 31 fees payable to SEC |
124 |
82 |
Accrued personnel costs |
143 |
154 |
Deferred revenue |
177 |
151 |
Other
current liabilities |
116 |
141 |
Deferred tax liabilities |
37 |
38 |
Default funds and margin deposits |
2,194 |
1,961 |
Current portion of debt obligations |
-- |
45 |
Total
current liabilities |
2,980 |
2,800 |
Debt
obligations |
2,313 |
2,589 |
Non-current deferred tax liabilities |
626 |
708 |
Non-current deferred revenue |
215 |
143 |
Other
non-current liabilities |
159 |
153 |
Total
liabilities |
6,293 |
6,393 |
|
|
|
Commitments and contingencies |
|
|
Equity |
|
|
Nasdaq
stockholders' equity: |
|
|
Common
stock |
2 |
2 |
Additional paid-in capital |
3,222 |
4,278 |
Common
stock in treasury, at cost |
(41) |
(1,005) |
Accumulated other comprehensive loss |
(682) |
(67) |
Retained earnings |
3,292 |
2,976 |
Total
Nasdaq stockholders' equity |
5,793 |
6,184 |
Noncontrolling interests |
1 |
-- |
Total
equity |
5,794 |
6,184 |
Total
liabilities and equity |
$ 12,087 |
$ 12,577 |
|
|
|
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 |
Year Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2014 |
2014 |
2013 |
2014 |
2013 |
GAAP net income attributable to Nasdaq |
$ 87 |
$ 123 |
$ 141 |
$ 414 |
$ 385 |
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Asset
impairment charges (1) |
49 |
-- |
5 |
49 |
14 |
Merger
and strategic initiatives (2) |
35 |
5 |
(11) |
81 |
22 |
Sublease loss reserves |
11 |
-- |
-- |
11 |
-- |
Extinguishment of debt |
2 |
-- |
-- |
11 |
-- |
Gain
on sale of investment security |
-- |
-- |
(30) |
-- |
(30) |
Voluntary accommodation program |
-- |
-- |
(18) |
-- |
44 |
Securities and Exchange Commission matter |
-- |
-- |
-- |
-- |
10 |
Restructuring charges |
-- |
-- |
-- |
-- |
9 |
Special legal expenses |
-- |
-- |
1 |
2 |
3 |
Other |
-- |
1 |
(3) |
2 |
(3) |
Total
non-GAAP adjustments |
97 |
6 |
(56) |
156 |
69 |
|
|
|
|
|
|
Adjustment to the income tax provision to reflect non-GAAP
adjustments (3) |
(55) |
(2) |
33 |
(72) |
(13) |
Significant tax adjustments, net |
-- |
(2) |
1 |
1 |
4 |
Total
non-GAAP adjustments, net of tax |
42 |
2 |
(22) |
85 |
60 |
|
|
|
|
|
|
Non-GAAP net income attributable to
Nasdaq |
$ 129 |
$ 125 |
$ 119 |
$ 499 |
$ 445 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per share |
$ 0.50 |
$ 0.71 |
$ 0.81 |
$ 2.39 |
$ 2.25 |
Total
adjustments from non-GAAP net income above |
0.25 |
0.01 |
(0.12) |
0.49 |
0.35 |
|
|
|
|
|
|
Non-GAAP diluted earnings per share |
$ 0.75 |
$ 0.72 |
$ 0.69 |
$ 2.88 |
$ 2.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Year Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2014 |
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
|
GAAP operating income |
$ 173 |
$ 207 |
$ 238 |
$ 754 |
$ 688 |
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Merger
and strategic initiatives (2) |
35 |
5 |
(11) |
81 |
22 |
Sublease loss reserves |
11 |
-- |
-- |
11 |
-- |
Extinguishment of debt |
2 |
-- |
-- |
11 |
-- |
Voluntary accommodation program |
-- |
-- |
(18) |
-- |
44 |
Special legal expenses |
-- |
-- |
1 |
2 |
3 |
Securities and Exchange Commission matter |
-- |
-- |
-- |
-- |
10 |
Restructuring charges |
-- |
-- |
-- |
-- |
9 |
Other |
-- |
1 |
(3) |
2 |
(3) |
Total
non-GAAP adjustments |
48 |
6 |
(31) |
107 |
85 |
|
|
|
|
|
|
Non-GAAP operating income |
$ 221 |
$ 213 |
$ 207 |
$ 861 |
$ 773 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues less transaction-based expenses |
$ 517 |
$ 497 |
$ 520 |
$ 2,067 |
$ 1,895 |
|
|
|
|
|
|
Non-GAAP operating margin (4) |
43% |
43% |
40% |
42% |
41% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the three months and year ended December 31, 2014,
asset impairment charges of $49 million related to certain acquired
intangible assets associated with customer relationships ($38
million) and certain technology assets ($11 million). For the year
ended December 31, 2013, asset impairment charges of $14 million
related to certain acquired intangible assets associated with
customer relationships ($7 million) and a certain trade name ($7
million). |
|
(2) For the three months and year ended December 31, 2014,
merger and strategic initiatives expense primarily related to our
acquisitions of the TR Corporate businesses and eSpeed and a charge
of $23 million related to the reversal of a receivable under a tax
sharing agreement with an unrelated party. The $23 million charge
is offset by a tax benefit as described in note (3) below. For the
three months and year ended December 31, 2013, merger and strategic
initiatives expense primarily related to our acquisitions of the TR
Corporate businesses and eSpeed, offset by a credit of $23 million
associated with a receivable under a tax sharing agreement with an
unrelated party. The $23 million credit is offset by a tax expense
as described in note (3) below. Merger and strategic initiatives
costs for the year ended December 31, 2013 were partially offset by
the remeasurement of a contingent purchase price liability related
to the BWise acquisition due to changes in the anticipated
performance of BWise. |
|
(3) For the three months and year ended December 31, 2014,
includes $23 million associated with the recognition of a
previously unrecognized tax benefit. This amount is offset by the
reversal of the receivable described in note (2) above. For the
three months and year ended December 31, 2013, includes $23 million
associated with the derecognition of a previously recognized tax
benefit. This amount is offset by the receivable described in note
(2) above. |
|
(4) 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 |
Year Ended |
|
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
|
2014 |
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
|
GAAP operating expenses |
$ 344 |
$ 290 |
$ 282 |
$ 1,313 |
$ 1,207 |
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Merger
and strategic initiatives (1) |
(35) |
(5) |
11 |
(81) |
(22) |
Sublease loss reserves |
(11) |
-- |
-- |
(11) |
-- |
Extinguishment of debt |
(2) |
-- |
-- |
(11) |
-- |
Voluntary accommodation program |
-- |
-- |
18 |
-- |
(44) |
Special legal expenses |
-- |
-- |
(1) |
(2) |
(3) |
Securities and Exchange Commission matter |
-- |
-- |
-- |
-- |
(10) |
Restructuring charges |
-- |
-- |
-- |
-- |
(9) |
Other |
-- |
(1) |
3 |
(2) |
3 |
Total
non-GAAP adjustments |
(48) |
(6) |
31 |
(107) |
(85) |
|
|
|
|
|
|
Non-GAAP operating expenses |
$ 296 |
$ 284 |
$ 313 |
$ 1,206 |
$ 1,122 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the three months and year ended December 31, 2014,
merger and strategic initiatives expense primarily related to our
acquisitions of the TR Corporate businesses and eSpeed and a charge
of $23 million related to the reversal of a receivable under a tax
sharing agreement with an unrelated party. For the three months and
year ended December 31, 2013, merger and strategic initiatives
expense primarily related to our acquisitions of the TR Corporate
businesses and eSpeed, offset by a credit of $23 million associated
with a receivable under a tax sharing agreement with an unrelated
party. Merger and strategic initiatives costs for the year ended
December 31, 2013 were partially offset by the remeasurement of a
contingent purchase price liability related to the BWise
acquisition due to changes in the anticipated performance of
Bwise. |
|
|
|
|
|
|
The NASDAQ OMX Group,
Inc. |
Quarterly Key Drivers
Detail |
(unaudited) |
|
|
Three Months Ended |
|
December 31, |
September 30, |
December 31, |
|
2014 |
2014 |
2013 |
Market Services |
|
|
|
Equity Derivative Trading and Clearing |
|
|
|
U.S. Equity Options |
|
|
|
Total
industry average daily volume (in millions) |
16.1 |
14.7 |
14.7 |
Nasdaq
PHLX matched market share |
16.2% |
16.3% |
17.6% |
The
NASDAQ Options Market matched market share |
9.7% |
9.5% |
9.1% |
Nasdaq
BX Options Market matched market share |
0.7% |
0.8% |
0.8% |
Total
matched market share executed on Nasdaq's exchanges |
26.6% |
26.6% |
27.5% |
|
|
|
|
Nasdaq Nordic and Nasdaq Baltic Options and
Futures |
|
|
|
Total
average daily volume options and futures contracts(1) |
379,604 |
325,950 |
350,012 |
|
|
|
|
Cash Equity Trading |
|
|
|
Total U.S.-listed Securities |
|
|
|
Total
average daily share volume (in billions) |
7.00 |
5.68 |
6.01 |
Matched share volume (in billions) |
90.8 |
71.1 |
74.1 |
Matched market share executed on NASDAQ |
17.6% |
16.6% |
16.1% |
Matched market share executed on Nasdaq BX |
2.0% |
2.5% |
2.6% |
Matched market share executed on Nasdaq PSX |
0.7% |
0.5% |
0.5% |
Total
matched market share executed on Nasdaq's exchanges |
20.3% |
19.6% |
19.2% |
Market
share reported to the FINRA/NASDAQ Trade Reporting Facility |
30.2% |
32.3% |
33.1% |
Total
market share(2) |
50.5% |
51.9% |
52.3% |
|
|
|
|
Nasdaq Nordic and Nasdaq Baltic
Securities |
|
|
|
Average daily number of equity trades |
390,302 |
303,902 |
309,756 |
Total
average daily value of shares traded (in billions) |
$ 4.8 |
$ 4.0 |
$ 4.4 |
Total
market share executed on Nasdaq's exchanges |
69.6% |
72.2% |
68.3% |
|
|
|
|
Fixed Income, Currency and Commodities Trading and
Clearing |
|
|
|
U.S. Fixed Income |
|
|
|
Total
average daily volume On the Run U.S. Treasury contracts (in
billions) |
223.4 |
214.2 |
193.5 |
Total
market share |
30.0% |
33.6% |
34.4% |
|
|
|
|
Nasdaq Nordic and Nasdaq Baltic Fixed
Income |
|
|
|
Total
average daily volume fixed income contracts |
98,284 |
76,134 |
135,507 |
|
|
|
|
Nasdaq Commodities |
|
|
|
Power
contracts cleared (TWh)(3) |
413 |
376 |
436 |
|
|
|
|
Listing Services |
|
|
|
Initial public offerings |
|
|
|
NASDAQ |
49 |
41 |
35 |
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic |
20 |
5 |
8 |
|
|
|
|
New listings |
|
|
|
NASDAQ(4) |
95 |
76 |
80 |
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic(5) |
23 |
8 |
14 |
|
|
|
|
Number of listed companies |
|
|
|
NASDAQ(6) |
2,782 |
2,746 |
2,637 |
Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic(7) |
792 |
778 |
758 |
|
|
|
|
Technology Solutions |
|
|
|
Market Technology |
|
|
|
Order
intake (in millions)(8) |
$ 193 |
$ 28 |
$ 139 |
Total
order value (in millions)(9) |
$ 704 |
$ 621 |
$ 660 |
|
|
|
|
|
|
|
|
(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
FINRA/NASDAQ Trade Reporting Facility. |
(3) Primarily transactions executed on Nord Pool 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) Total contract value of orders signed during the
period. |
(9) 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@nasdaq.com
INVESTOR RELATIONS
CONTACT:
Ed Ditmire,
CFA
+1.212.401.8737
ed.ditmire@nasdaq.com
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: The NASDAQ OMX Group, Inc. via Globenewswire
HUG#1890297
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