-- GAAP Diluted EPS of $0.48; Pro Forma Non-GAAP Diluted EPS of $0.53 --
-- Announces Equity Investment by Leading Liquidity Providers in its U.S. Futures Exchange.
NEW YORK – October 30, 2009 – NYSE Euronext (NYX) today reported net income of $125 million, or $0.48 per diluted share, for the third quarter of 2009, compared to net income of $174 million, or $0.66 per diluted share for the third quarter of 2008. Third quarter 2009 GAAP results include the impact from merger expenses and exit costs, the impact of the disposition of Hugin Group B.V., the sale of our investment in BM&F Bovespa and a fair value adjustment to our investment in BIDS Holdings, L.P. Pro forma non-GAAP diluted earnings per share excluding these items was $0.53 in the third quarter of 2009, compared to $0.72 in the third quarter of 2008.

“We continue to see stabilization in our core businesses and significant progress on our new initiatives,” said Duncan L. Niederauer, CEO, NYSE Euronext. "We have successfully maintained market share in our U.S. (NYSE) and European cash markets and have grown market share in U.S. equity options. We have seen a strong increase in new issuances, where we lead the U.S. in both IPOs and secondaries. We significantly enhanced our global derivatives franchise with today’s announced semi-mutualization of our U.S. futures exchange. In addition, we announced a similar semi-mutualization of our NYSE Amex equity options business, launched NYSE Liffe Clearing in Europe and established New York Portfolio Clearing, a joint venture with DTCC. Lastly, our announced acquisition of NYFIX will greatly expand our NYSE Technologies product offering and client base.”

The table below summarizes our pro forma non-GAAP results:
($ in millions, except EPS) 3Q09 2Q09 3Q08
Gross Revenues $1,048 $1,125 $1,159
Net Revenues $624 $611 $724
Fixed Operating Expenses ($431) ($398) ($428)
Operating Income1 $197 $214 $297
Net Income $138 $132 $192
Diluted Earnings Per Share $0.53 $0.51 $0.72

1 Includes regulatory fine income Michael S. Geltzeiler, Group Executive Vice President and Chief Financial Officer, NYSE Euronext, commented, “Despite lower overall trading volumes, the contribution of NYSE Liffe Clearing revenue during the quarter drove higher net revenues and earnings per share compared to the second quarter. Additionally, we continue to focus on initiatives to reduce our fixed cost base. Underlying fixed operating expenses through the third quarter, excluding the impact of M&A, foreign exchange fluctuations and investments in new businesses, were down $121 million, or 10% compared to the same period last year. With the anniversary of the Amex acquisition, we expect our fourth quarter fixed operating expenses to be considerably below prior year levels and will end the year below our full-year 2009 fixed cost guidance of $1,728 million.”
Pro forma non-GAAP net income for the third quarter of 2009 was $138 million, or $0.53 per diluted share, compared to net income of $192 million, or $0.72 per diluted share, for the third quarter of 2008. Pro forma non-GAAP results for the third quarter of 2009 exclude $8 million in merger expenses and exit costs. The results also exclude the impact of the disposition of Hugin Group B.V., the sale of our investment in BM&F Bovespa and a fair value adjustment to our investment in BIDS Holdings, L.P. Pro forma non-GAAP results for the third quarter of 2008 exclude $30 million in pre-tax merger expenses and exit costs, primarily severance. In addition, pro forma non-GAAP results also exclude activity assessment and Section 31 fees. A full reconciliation of our pro forma non-GAAP results is included in the attached tables.
Financial highlights on a pro forma non-GAAP basis include:


Gross revenues, excluding activity assessment fees, were $1,048 million in the third quarter of 2009, a 10% decrease compared to the third quarter of 2008 and a 7% decrease compared to the second quarter of 2009. Third quarter 2009 gross revenues compared to both the third quarter of 2008 and the second quarter of 2009 were negatively impacted by a decline in global cash equities volumes and pricing changes across our European and U.S. cash businesses.

Net revenues, defined as gross revenues less direct transaction costs consisting of Section 31 fees, liquidity payments and routing and clearing fees, were $624 million, down 14% compared to $724 million in the third quarter of 2008, but up 2% compared to the $611 million in the second quarter of 2009. Third quarter 2009 net revenues compared to the third quarter of 2008 include a $30 million negative impact attributable to foreign currency fluctuations. NYSE Euronext net revenues from its primary business activities are represented below as a percentage of total net revenues for the third quarter:

Global derivatives trading accounts for 30%
European cash trading accounts for 13%
U.S. cash trading accounts for 9%
Global market data accounts for 16%
Global listings accounts for 16%
Software and technology services accounts for 8%
Other accounts for 8%

Fixed operating expenses, defined as operating expenses less merger expenses and exit costs, direct transaction costs, and excluding regulatory fine income, were $431 million, compared to $428 million in the third quarter of 2008 and $398 million in the second quarter of 2009. Excluding the impact of mergers and acquisitions, foreign exchange rates and investment in new businesses, underlying fixed expenses were down $31 million, or 7% compared to the third quarter of 2008. Fixed costs increased $33 million compared to the second quarter of 2009, primarily due to a benefits’ curtailment gain of $10 million in the second quarter of 2009 and a combined $20 million in NYSE Liffe Clearing expenses and foreign currency fluctuations. Underlying fixed expenses through the first nine months of 2009 were down $121 million or 10% compared to the prior year period.

Operating income was $197 million, down $100 million compared to the third quarter of 2008 and down $17 million compared to the second quarter of 2009. Third quarter 2009 operating income compared to the third quarter of 2008 includes a $20 million negative impact attributable to foreign currency fluctuations.

At September 30, 2009, net debt was $2.4 billion. Cash, cash equivalents, investments and other securities (including $115 million related to Section 31 fees collected from market participants and due to the SEC) was $0.5 billion and total debt was $2.9 billion. Total debt of $2.9 billion, consists of $2.2 billion in long-term debt and $0.7 billion in short-term debt. The increase in short-term debt from the second quarter of 2009 was due to the issuance of commercial paper associated with the $355 million termination payment made to LCH.Clearnet to facilitate the in-sourcing of clearing activities for NYSE Liffe Clearing.

Pro-forma non-GAAP third quarter results include the favorable impact of an effective tax rate true-up for fiscal 2009 from 29% to 27% as a result of the mix of profits from our global subsidiaries, which added $0.03 to third quarter 2009 diluted earnings per share.

Headcount as of September 30, 2009 was 3,399, down 4% from June 30, 2009 and down 10% from December 31, 2008.