|NYSE Group on Oct. 26 reported net income of $68 million, or $0.43 per diluted share, for the three months ended Sept. 30, 2006, a 209 percent increase compared to $22 million, or $0.19 per diluted share, for the three months ended Sept. 30, 2005. These results were presented in accordance with U.S. generally accepted accounting principles (GAAP).
Third quarter 2006 results included the full quarter results from the operations of NYSE Arca, Inc. (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). The merger between NYSE, Inc. and Archipelago Holdings, Inc. (Archipelago) was completed on March 7, 2006. Fiscal 2005 results included only the operations of NYSE, Inc., the predecessor of NYSE Group.
Included in the third quarter results are $7.7 million in merger expenses consisting of lease termination, severance and related exit costs ($5.1 million) and other professional fees incurred in connection with both the integration of the Archipelago businesses and the contemplated merger with Euronext N.V. ($2.6 million). Also included in the third quarter results is a $7.2 million gain for a one-time payment received from the National Securities Clearing Corp. and Fixed Income Clearing Corp. in connection with the previously announced phase-out of their service agreement with SIAC, a subsidiary of NYSE Group.
On a non-GAAP basis, giving effect to the Archipelago transaction as if it occurred at the beginning of the earliest period presented and excluding the above merger expenses, exit costs and one-time gain, the net income of NYSE Group for the three months ended Sept. 30, 2006, would have been $68.2 million, or $0.43 per diluted share, a $38.6 million or 130 percent increase as compared to net income, on a non-GAAP basis, of $29.6 million, or $0.18 per diluted share, for the three months ended Sept. 30, 2005.
“NYSE Group’s financial results reflect our continued focus on expanding our operating margins and delivering sustained revenue and overall business growth,” said NYSE Group Executive Vice President and CFO Nelson Chai. “We remain focused on reducing costs, increasing efficiencies and driving toward the completion of the merger with Euronext. These directives are clearly reflected in our quarterly financial results and business highlights.”
“This quarter’s introduction of NYSE Arca Options coupled with our double-digit growth in trading volumes in all product areas, strategic pricing initiatives and comprehensive order-execution platforms, such as the recently implemented Hybrid MarketSM, ensure that NYSE Group is well positioned to maintain its standing as a leading global market and a significant competitive force in the marketplace.”
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