2Q11
MARKET CAPITALIZATION R$16.2 billion (at 08/08/2011) WEIGHTED AVERAGE SHARE COUNT 1,958,140,957 (2Q11) RATINGS Standard&Poors BBB+ (CPP credit rating) A-2 (Issuer) Moodys A1 (global scale issuer) Aaa.br (Brazilian scale issuer) Baa1 (global notes) STOCK PERFORMANCE Quarter to June 2011: -13.0% CONFERENCE CALL Date: August 10, 2011 In English Time: 12h00 Brazil: +55 11 4688-6361 U.S. +1 888 700-0802 International +1 786 924-6977 In Portuguese Time: 14h00 Brazil: 11 4688-6361 Password: BMFBOVESPA
BM&FBOVESPA S.A. Announces Second Quarter 2011 Earnings New Fee Structure Starting in August; Margins Maintained High Frequency Trading Volume Up 11% and 21 Public Offerings YTD, with 11 IPOs in Challenging Market Conditions Adjusted Operating Expenses1 In Line With Annual Budget
So Paulo, Brazil, August 9, 2011 - BM&FBOVESPA S.A. (BVMF3) today reported second quarter earnings ending June 30, 2011. BM&F segment volumes climbed a solid 5.8% year-over-year and securities lending grew 39.3% year-over-year. High frequency trading (HFT) continued to grow in the Bovespa segment, accounting for a higher 7.4% of average daily traded value (ADTV) during the second quarter. Our core BM&F business grew in a very challenging market and high-frequency trading in equities is enjoying positive momentum, providing clear evidence that we have a robust and diversified business model. We are implementing a new fee structure that will eliminate cross subsidies embedded in our trading and post-trade fee rates, which will make our prices more comparable to those of our international peers and strengthen our competitive position, said Chief Executive Officer Edemir Pinto. BM&FBOVESPA continued to invest in long-term sustainable growth through diversified products and IT investments in 2Q11 compared with the previous year. Amid a mostly flat top-line compared to the previous year and quarter, EBITDA margins and adjusted net income2 grew by 173 bps and 6.5% quarter-over-quarter respectively. Operating expenses fell by 11.6% over 1Q11 compared to a 16.2% increase year-over-year and the adjusted expenses are in line with the budget for 2011. GAAP EPS grew 9.0% over 1Q11, falling 1.3% compared to 2Q10. Other Operating and Strategic Highlights Launching the state-of-the-art, multi-asset, multi-market CloseOut Risk Evaluation (CORE) risk management framework Delivering the derivatives module of new multi-asset platform in the 3Q11, in collaboration with the CME Group Market makers for options on two highly traded stocks with additional bids for options on other eight stocks and on Ibovespa Chief Financial Officer and Investor Relations Officer Eduardo Refinetti Guardia said: "We are heartened by a number of strong performances in areas like securities lending, derivatives and high-frequency trading in equity. For the first half of the year, we have kept a firm grip on operating expenses and we are comfortably within our annual budget for adjusted OPEX. As ever, we remain cost conscious, deeply committed to delivering results and maximizing shareholder value through a combination of cash payouts and our share buyback program.
(in millions of BRL)
2Q11
2Q10
1Q11
2Q11/2Q10 2Q11/1Q11 (%) (%)
www.bmfbovespa.com.br/ri ri@bmfbovespa.com.br
Net Operating Revenues Operating Expenses Operating Income Financial Income Income before Taxes Net Income attributable to shareholders Net Margin EBITDA EBITDA Margin Adjusted EBITDA Adjusted EBITDA Margin Adjusted Net Income Adjusted Operating Expenses
467.6 475.6 472.2 -1.7% (166.8) (143.5) (188.7) 16.2% 300.9 332.2 283.4 -9.4% 70.8 75.5 63.2 -6.3% 393.8 407.7 384.2 -3.4% 294.2 305.6 270.8 -3.8% 62.9% 64.3% 57.3% -136 bps 313.2 343.7 308.1 -8.9% 67.0% 72.3% 65.2% -528 bps 323.3 350.7 332.6 -7.8% 69.1% 73.7% 70.4% -459 bps 409.2 424.3 384.2 -3.6% (143.7) (124.4) (140.6) 15.5%
-1.0% -11.6% 6.2% 12.1% 2.5% 8.6% 556 bps 1.7% 173 bps -2.8% -130 bps 6.5% 2.2%
Operating expenses have been adjusted to eliminate expenses with the stock options plan, depreciation and allowance for doubtful accounts, and tax on dividends from CME Group. 2 Net income has been adjusted to eliminate deferred liability recognized in correlation with temporary differences from amortization of goodwill for tax purposes, the impact of the stock options plan and the investment in associate (CME Group) accounted for under the equity method of accounting, net of taxes.
Analysis of 2Q11 Financials
REVENUES
Gross operating revenues were R$521.3 million, falling 1.5% in comparison with 2Q10 mainly due to lower volumes traded on markets comprising the Bovespa segment. Revenues from trading and settlement activities in the Bovespa segment amounted to R$240.6 million (46.1% of gross operating revenues), down 7.2% from 2Q10. The main drivers for these results were a 7.1% year-over-year fall in the ADTV and a drop in average revenue margins for the segment, to 5.862 bps from 6.131 bps. Lower participation of traded volumes in equity options (which generate higher margins than the average) and volume growth in high frequency trading, which are charged discounted fees, were the main drivers of this quarters lower margins. A higher number of public offerings and special auctions settlements (recorded in others) provided revenue gains to partly offset these results. Revenues from trading and settlement activities in the BM&F segment continued to rise, reaching R$191.1 million (36.7% of gross operating revenues), up 3.8% from 2Q10. The increase was driven by a 5.8% jump in ADTV for derivatives that reached 2.7 million contracts, which was partially offset by a 1.5% drop in the average revenue-per-contract (RPC). This was attributable mainly to a greater portion of U.S. dollardenominated interest rate futures contracts traded, which are priced lower than the average BM&F contracts, and to the reduction of the FX futures volumes, which have higher than average RPCs. Gross Revenues 2Q10 versus 2Q11
R$529.0 Million
49.0%
R$521.3 Million
46.1%
34.8% 16.2%
2Q10
36.7%
17.2%
2Q11
Trd/Sttlmnt Bovespa Segment
Trd/Sttlmnt BM&F Segment
Other Revenues
Operating revenues not related to trading and settlement activities amounted to R$89.6 million (17.2% of total gross operating revenues), a 4.7% year-over-year rise. Relevant highlights include: Securities lending. Revenues of R$17.2 million (3.3% of overall gross operating revenues) were up 39.3% from the 2Q10. This increase was mainly a result of the higher volume of lending services in connection with average open interest positions, the overall financial value of which rose 42.0% from 2Q10. Depository service. Revenues reached R$22.9 million (4.4% of the gross operating revenues), a 3% increase compared to 2Q10. Revenues from central securities depository services climbed to R$17.8 million from R$16.6 million in 2Q10 mainly due to increases of 8.8% in average number of custody accounts and a 13.6% rise in the average financial value of assets under custody (not including the deposit and custody of ADRs and stocks held in custody for foreign investors). Market data sales (Vendors). Revenues reached R$16.3 million (3.1% of overall gross operating revenues), down 3.1% from 2Q10. This drop is attributed mainly to the Companys market data pricing policy implemented in August 2010, which reduced market data prices for retail investors trading through online Home Broker systems by 33.3%. An 11% year-over-year appreciation in the Brazilian Real against the U.S. dollar resulted in a drop in revenues from foreign customers (which represent approximately 30% of this revenue line).
O PERATING E XPENSES
Planned growth in headcount, specially in strategic areas of IT and business development, contributed to operating expenses of R$166.8 million in 2Q11, falling 11.6% from 1Q11 and up 16.2% year-over-year. Adjusted operating expenses reached R$143.7 million and were: Up 15.5% compared to 2Q10, primarily due to increased headcount and financial education programs, which is in line with our growth strategy; and In line with our budget guidance range (of R$615.0 million to R$635 million), rising only 2.2% over the previous quarter.
(in R$ millions, unless otherwise indicated)
2Q11 Operating expenses (-) Stock opti ons progra ms (-) Depreci a ti on (-) Al l owa nce for doubtful a ccounts (-) Ta x rel a ted to the equi ty a ccounti ng Adjusted operating expenses 166.8 10.1 10.1 0.6 2.2 143.7 2Q10 143.5 7.0 11.5 0.5 124.4 1Q11 188.7 24.5 22.3 -1.1 2.3 140.6 2Q11/2Q10 2Q11/1Q11 1H11 (%) (%) 16.2% 44.4% -12.3% 9.8% 15.5% -11.6% -58.7% -54.7% -153.2% -3.7% 2.2% 355.5 34.7 32.4 -0.5 4.6 284.4 239.0 1H10 277.3 16.0 20.8 1.4 1H11/1H10 (%) 28.2% 116.5% 55.6% -135.9% 19.0%
Adjusted Operating Expenses
Personnel. Expenses of R$88.2 million were up 37.0% over 2Q10 due mainly to a planned increase in the average headcount. The average headcount rose by 22.9% year-over-year to strengthen the Companys business development and technology departments (including hiring of outsourced IT personnel in 2010, expenses for which were previously included in data processing expenses) and are in line with the Companys growth strategy. The August 2010 salary increase required under the existing collective bargaining agreement also represented a 6% increase in payroll over the previous year-ago-period.
Personnel expenses fell by 9.5% over 1Q11, as expenses associated with the first vesting of a new stock options program issued in January 2011 were not repeated in 2Q11. The new program is divided in four annual vesting periods with the first vesting granted in 1Q11 and immediately recognized as an expense. This expense will not be repeated in the remaining quarters of 2011. The reduction of stock option expenses was partially offset by an increase in severance expenses in 2Q11 and overtime expenses in connection with the development and implementation of strategic projects, which explain part of adjusted personnel expenses growth. Adjusted personnel expenses. Excluding recognition of stock option expenses, 2Q11 personnel expenses amounted to R$78 million, up 36.1% from 2Q10, mainly due to the aforementioned increases in average headcount and payroll.
Adjusted Personnel Expenses
(in R$ millions, unless otherwise indicated)
2Q11 2Q10 1Q11 Personnel Expenses (-) Stock options programs Adjusted personnel expenses 88.2 64.4 97.5 10.1 7.0 24.5 78.0 57.4 72.9
2Q11/2Q10 2Q11/1Q11 1H11/1H10 1H11 1H10 (%) (%) (%) 37.0% 44.4% 36.1% -9.5% 185.6 128.1 -58.7% 34.7 16.0 7.0% 151.0 112.1 44.9% 116.5% 34.7%
Data processing. Data processing expenses reached R$23.2 million, down 6.0% from 2Q10 due mainly to the aforementioned hiring of outsourced IT personnel. Marketing and promotion. BM&FBOVESPA continues to develop financial education programs and market popularization campaigns in line with our strategy to educate and attract future generations of retail investors and increase our existing investor base. 2Q11 expenses for marketing and promotions reached R$10.7 million, up 8.4% year-over-year, mainly as a result of these initiatives. Marketing and promotion expenses dropped 20.1% over 1Q11, primarily due to the costs incurred in the first quarter in connection with the legally required publication of year-end financial statements and the development of exchange trading simulators connected with our educational campaign.
Depreciation and amortization. Quarterly depreciation expenses of R$10.1 million dropped 12.3% yearover-year. Starting in 2Q11 the Company began to capitalize depreciation and amortization of certain equipment and software allocated to IT projects (related to equipment and software that have been used). Also, the 2Q11 figure includes a R$6.8 million credit to depreciation and amortization related to expenses that had been recognized as depreciation and amortization in 1Q11 and were reverted in 2Q11. Without this adjustment for 1Q11, depreciation and amortization expenses would have reached R$16.9 million in 2Q11.
O THER FINANCIAL HIGHLIGHTS
Cash and cash equivalents. Cash and cash equivalents plus short- and long-term financial investments at the end of the quarter ending June 30, 2011 amounted to R$3.35 billion and were comprised of R$1.1 billion3 in third-party collateral pledged to the Companys clearing facilities, and R$463 million in restricted funds tied to the clearing safeguard structure. Unrestricted cash and cash equivalents available for use at the end of the quarter totaled R$1.5 billion. Indebtedness. At the end of the quarter as of June 30, 2011, BM&FBOVESPA recorded R$974.2 million in interest-bearing debt, primarily related to global senior notes issued in connection with the Companys July 2010 bond offering. Equity-method investment. The Companys net share of profit from investment in the CME Group, accounted for under the equity method, totaled R$22.1 million in the 2Q11. This account did not exist in 2Q10 prior to the Company increasing ownership in the CME in July 2010. Net interest income. Net interest income for 2Q11 amounted to R$70.8 million, down 6.3% compared to 2Q10, primarily due to higher interest expenses. Interest expenses in 2Q11 increased to R$17.1 million from R$2.1 million in 2Q10 following the Companys issuance of global senior notes in July 2010. 2Q10 interest revenues climbed 13.2% year-over-year due mainly to higher interest rates. Income tax and social contribution. This line item totaled R$99.6 million at the end of 2Q11, consisting primarily of deferred income tax and social contribution of R$98.6 million. Deferred tax liabilities of R$124.7 million were recognized in 2Q11 due to temporary differences from amortization of goodwill for tax purposes; this had no impact on cash. Recognized deferred tax liabilities were partially offset by deferred tax credits of R$26.1 million in connection with the tax benefit from payment of interest on shareholders equity declared over the quarter. CAPEX. Investments of R$43.7 million were capitalized in 2Q11, of which R$35.4 million consists of investments in technology and R$8.2 million are investments in other projects (including, for example, investments in the Companys facilities and equipment). Capital expenditures at the end of the semester were in line with the Companys 2011 Capex budget (ranging between R$235.0 million and R$255.0 million). Dividends. The Board of Directors approved a R$235.3 million distribution of dividends on August 9, 2011, to be paid on October 3rd, 2011 based on the ownership structure as of the book closing date of August 26th,2011. Share buyback program. Share repurchases implemented over the quarter totaled 60 million shares and were within the scope of the August 2010 buyback program set to end on June 30, 2011. A new share buyback program for total repurchases of up to 30 million shares was approved in June 2011 and took effect on July 1, 2011. This new program is set to end December 31, 2011. As of the end of July 2011, a total of 6.5 million shares had been repurchased under the new program.
Performance by Segment
Bovespa Segment The quarterly ADTV for the segment fell 7.1% year-over-year, primarily due to a decline in turnover velocity, which at the end of 2Q11 reached 59.7% (from 69.2% in 2Q10). A drop in volumes traded on the options markets was also a contributing factor; contribution of options to overall volumes was 3.7% down from 5.7% in 2Q10.
In the 1Q11, R$2.4 billion of third-party collateral included a payment anticipation of R$1.5 billion that was settled on April 1, 2011.
Ten equity offerings were completed over the quarter (five IPOs and five follow-on offerings), raising a total of R$10.1 billion. Equity offerings over the year-to-date (as of July 2011) totaled 21 with total proceeds of R$16.1 billion. The HFT volume continues to grow, reaching 7.4% of the overall volume traded in 2Q11. HFT represents an average daily volume of R$899 million and accounts for a 10.7% quarter-on-quarter increase.
BM&F Segment The quarterly ADTV for the segment climbed 5.8% year-over-year primarily due to a 5.1% rise in volumes traded in Reais-interest rate futures contracts and a 121.1% surge in volumes traded in U.S. dollar-denominated interest rate futures contracts. This growth was partially offset by a 1.5% decline in average RPC attributable to changes in the mix of actively traded contracts. U.S. dollar-denominated interest rate futures contracts (lower-than-average fee rates) accounted for a larger share of the overall volume for the segment while the volume of trading in FX contracts (above-average fee rates) declined.
Update on Strategic Initiatives
BM&FBOVESPAs strategic initiatives continue to gather steam, diversifying the Companys revenue base and strengthening its competitive position. The Company recently announced the adoption of a new fee structure aimed at eliminating cross subsidies embedded in fee rates across its trading and post-trade business lines and rebalancing the revenue and cost structures across these business lines. The fee structure will provide improved comparability with the standards of other international exchanges without impacting BM&FBOVESPAs margins or bottom-line. In addition, the Companys 2010 IT investments are coming online with the derivatives module of its new multi-asset class trading platform set for launch in the 3Q11. Finally, with the launch of the new CORE risk management framework, BM&FBOVESPA expects to drive market growth in the near and medium term. New fee structure In July 2011, BM&FBOVESPA announced the adoption of a new fee structure designed to eliminate cross subsidies embedded in fee rates across the trading and post-trade business lines. This new structure has a neutral effect relative to overall cost-by-trade for market participants and endcustomers compared to overall cost-by-trade under the current structure. Additionally, the rebalancing corrects distortions and allows for better comparability with the fees charged by other exchanges around the world. Following implementation of the fee structure, the trading fees the Company will be charging will represent on average 30% of the overall cost-by-trade within the Bovespa segment (compared to 70% on average prior to the change) and 40% within the BM&F segment. Cash equities and equity derivatives changes will take effect from the August 26, 2011 trading session, whereas changes related to BM&F segment-listed derivatives will take effect starting from the trading session on October 31, 2011. New products Options market makers. In July 2011, BM&FBOVESPA announced the winning bidders (three for each stock) that will act as market makers for options on OGX common stocks and Ita Unibanco preferred stocks for a 12-month period starting September 12, 2011. Subsequent stages of the program contemplate bids to select market makers for options on eight additional individual stocks and options on Ibovespa. Launch of additional Unsponsored Level 1 Brazilian Depository Receipts (BDRs). In 2Q11, tenders for 20 new BDR programs were concluded and the bidding process for the listing of ten additional programs was launched. To date, there are 30 unsponsored Level 1 BDRs available to trade on BM&FBOVESPA and 30 additional programs expected to be presented to the market in the coming weeks.
Technology developments New multi-asset class electronic trading platform. BM&FBOVESPA will have the first stage of the project for the joint development and implementation of a multi-asset class electronic trading platform in collaboration with the CME Group completed in the 3Q11. This first stage consists of the development and implementation of the derivatives module. The Company expects the module for the trading of stocks to be launched in the first half of 2012, and the fixed-income module to be implemented over the course of 2012.
Integration of clearing facilities. In April and May 2011, BM&FBOVESPA presented to the market participants the CORE framework, the Companys new central counterparty multi-asset, multi-market risk management framework which is the linchpin on which its clearing and settlement risk management system architecture will be based. This important milestone in the Companys integration process will allow for optimized use of money and collateral allocation to cover risk exposure in post-trade transactions. It will combine four distinct clearing houses (equities, derivatives, forex and bonds) into a single facility, improving the efficiency of BM&FBOVESPAs future integrated clearing facility. The development of the integration project will occur throughout 2012, with certification and deployment phases planned for 2013.
CONSOLIDATED INCOME STATEMENT
2Q11 Gross Operating Revenues Trading / Clearing Systems - BM&F Derivatives Foreign Exchange Securities Trading / Clearing Systems-Bovespa Trading fees Clearing fees Others Other Operating Revenues Securities Lending Listing Depositary, custody and back-office Trading access (Brokers) Vendors Brazilian Commodities Exchange BM&F Bank Others Revenue deductions PIS and Cofins Service tax Net Operating Revenues Operating Expenses Personnel Data processing Deprec. and Amortization Third Party Services Maintenance Communication Marketing Taxes Board Compensation Others Operating Income Equity account Financial Income Financial Revenues Financial Expenses Income before Taxes Income Tax and Social Contribution Current Deferred Net Income Net Margin Attributable to: BM&FBOVESPAs Shareholders Net Margin Minority Interest 521,324 191,148 186,909 4,177 62 240,574 168,915 56,668 14,991 89,602 17,202 11,617 22,937 12,078 16,301 1,343 5,096 3,028 (53,685) (46,912) (6,773) 467,639 (166,762) (88,172) (23,169) (10,101) (11,732) (2,559) (5,895) (10,700) (3,733) (1,572) (9,129) 300,877 22,091 70,815 87,886 (17,071) 393,783 (99,593) (966) (98,627) 294,190 62.9% 294,171 62.9% 19 2Q10 528,996 184,139 178,799 5,320 20 259,309 185,739 68,277 5,293 85,548 12,345 10,754 22,270 13,431 16,819 1,056 3,931 4,942 (53,365) (47,325) (6,040) 475,631 (143,474) (64,371) (24,642) (11,524) (10,126) (2,332) (6,470) (9,870) (2,340) (1,830) (9,969) 332,157 75,536 77,612 (2,076) 407,693 (102,473) (637) (101,836) 305,220 64.2% 305,646 64.3% (426)
(In R$ thousands,unless otherwise indicated)
Change 2Q11/2Q10 -1.5% 3.8% 4.5% -21.5% 210.0% -7.2% -9.1% -17.0% 183.2% 4.7% 39.3% 8.0% 3.0% -10.1% -3.1% 27.2% 29.6% -38.7% 0.6% -0.9% 12.1% -1.7% 16.2% 37.0% -6.0% -12.3% 15.9% 9.7% -8.9% 8.4% 59.5% -14.1% -8.4% -9.4% -6.3% 13.2% 722.3% -3.4% -2.8% 51.6% -3.2% -3.6% -126 bps -3.8% -136 bps -104.5% 1Q11 525,477 186,662 182,128 4,513 21 251,716 183,970 63,231 4,515 87,099 15,405 11,276 22,105 12,470 16,224 2,419 4,711 2,489 (53,320) (47,014) (6,306) 472,157 (188,714) (97,453) (23,491) (22,294) (9,358) (2,655) (6,367) (13,391) (3,161) (1,376) (9,168) 283,443 37,541 63,193 81,565 (18,372) 384,177 (112,884) (1,717) (111,167) 271,293 57.5% 270,756 57.3% 537 Change Change 1H11 1H10 2Q11/1Q11 1H11/1H10 -0.8% 1,046,801 1,041,045 0.6% 2.4% 377,810 354,352 6.6% 2.6% 369,037 344,280 7.2% -7.4% 8,690 10,024 -13.3% 195.2% 83 48 72.9% -4.4% 492,290 515,803 -4.6% -8.2% 352,885 373,368 -5.5% -10.4% 119,899 132,514 -9.5% 232.0% 19,506 9,921 96.6% 2.9% 176,701 170,890 3.4% 11.7% 32,607 22,865 42.6% 3.0% 22,893 22,265 2.8% 3.8% 45,042 43,160 4.4% -3.1% 24,548 25,877 -5.1% 0.5% 32,525 36,447 -10.8% -44.5% 3,762 2,170 73.4% 8.2% 9,807 7,219 35.8% 21.7% 5,517 10,887 -49.3% 0.7% (107,005) (104,897) 2.0% -0.2% (93,926) (93,212) 0.8% 7.4% (13,079) (11,685) 11.9% -1.0% 939,796 936,148 0.4% -11.6% (355,476) (277,278) 28.2% -9.5% (185,625) (128,089) 44.9% -1.4% (46,660) (45,908) 1.6% -54.7% (32,395) (20,826) 55.6% 25.4% (21,090) (19,763) 6.7% -3.6% (5,214) (5,014) 4.0% -7.4% (12,262) (12,441) -1.4% -20.1% (24,091) (15,198) 58.5% 18.1% (6,894) (3,485) 97.8% 14.2% (2,948) (2,878) 2.4% -0.4% (18,297) (23,676) -22.7% 6.2% 584,320 658,870 -11.3% -41.2% 59,632 0 0.0% 12.1% 134,008 141,843 -5.5% 7.7% 169,451 145,120 16.8% -7.1% (35,443) (3,277) 981.6% 2.5% 777,960 800,713 -2.8% -11.8% (212,477) (211,278) 0.6% -43.7% (2,683) (1,132) 137.0% -11.3% (209,794) (210,146) -0.2% 8.4% 565,483 589,435 -4.1% 545 bps 60.2% 63.0% -279 bps 0.0% 0 0 0.0% 8.6% 564,927 590,113 -4.3% 556 bps 60.1% 63.0% -292 bps -96.5% 556 (678) -182.0% 0.0% 0 0 0.0% 1.7% 621,275 679,696 -8.6% 173 bps 66.1% 72.6% -650 bps 0.0% 1,959,140,973 2,007,654,956 0.0% 9.0% 0.288354 0.293931 -1.9% 0.0% 0 0 0.0% 6.5% 793,366 829,418 -4.3% 2.2% (284,353) (239,000) 19.0% -2.8% 655,946 695,707 -5.7% -130 bps 69.8% 74.3% -452 bps 6.8% 0.404956 0.413128 -2.0%
EBITDA 313,216 343,681 EBITDA Margin 67.0% 72.3% Sharecount 1,958,140,957 2,007,952,039 EPS attributable to BM&FBOVESPAs Shareholders 0.150230 0.152218 Adjusted Net Income Adjusted Operational Expenses Adjusted EBITDA Adjusted EBITDA Margin Adjusted EPS 409,150 (143,725) 323,342 69.1% 0.208948 424,304 (124,418) 350,692 73.7% 0.211312
-8.9% 308,060 -528 bps 65.2% 0.0% 1,963,806,622 -1.3% 0.137873 -3.6% 15.5% -7.8% -459 bps -1.1% 384,216 (140,628) 332,604 70.4% 0.195648
RECONCILIATION OF ADJUSTED NET INCOME (in R$ millions)
2Q11/2Q10 2Q11/1Q11 1H11 (%) (%) 1H11/1H10 (%)
2Q11
2Q10
1Q11
1H10
GAAP net income 1 (+) Deferred tax liabilities (+) Stock options program (-) Net Share of profit from investment in associate (equity method investment) Adjusted net income
1
294.2 305.6 270.8 124.7 111.6 124.1 10.1 7.0 24.5
-3.8% 11.7% 44.4%
8.6% 0.5% -58.7%
564.9 590.1 -4.3% 248.8 223.3 11.4% 34.7 16.0 116.5%
19.9 35.2 409.2 424.3 384.2
-3.6%
-43.6% 6.5%
55.1 793.4 829.4
-4.3%
Attri buta bl e to BM&FBOVESPA s ha rehol ders
CONSOLIDATED BALANCE SHEET STATEMENT
Assets Current assets Cash and cash equivalents Financial investments Accounts receivable - net Other receivables Taxes recoverable and prepaid Prepaid expenses Non-current Long-term receivables Financial investments Other receivables - net Deferred income tax and social contrib. Judicial deposits Investments Interest in affiliates Interest in subsidiaries Investment properties Property and equipment Intangible assets Goodwill Software and projects 6/30/2011 2,209,697 25,097 1,980,414 71,374 17,317 94,349 21,146 20,354,276 1,540,061 1,349,746 2,826 88,142 99,347 2,189,976 2,152,520 37,456 358,650 16,265,589 16,064,309 201,280 12/31/2010 2,547,589 104,017 2,264,408 51,399 12,917 105,843 9,005 20,086,386 1,216,812 1,066,920 2,827 54,687 92,378 2,286,537 2,248,325 38,212 367,134 16,215,903 16,064,309 151,594 Liabilities and shareholders equity Current Collateral for transactions Earnings and rights on securities in custody Suppliers Salaries and social charges Provision for taxes and contributions payable Income tax and social contribution Financing Dividends and interest on capital payable Other liabilities Unearned discount Non-current Financing Deferred income tax and social contribution Provision for contingencies and legal obligations
(In R$ thousands)
6/30/2011 1,537,560 1,069,276 36,497 21,040 71,285 22,902 2,928 28,457 95,458 167,026 22,691 2,007,194 945,726.00 997,192 64,276 19,019,219 2,540,239 16,675,682 22,825 441,572 (915,151) (186,482) 75,373 348,322 19,002,380 16,839 22,563,973 12/31/2010 1,416,204 954,605 34,791 80,828 64,351 23,981 5,576 33,154 2,773 216,145 1,798,723 1,010,059 732,074 56,590 19,419,048 2,540,239 16,662,480 22,971 847,658 (613,903) (88,680) 32,000 19,402,765 16,283 22,633,975
Shareholders equity Capital and reserves attrib. to parents shareholders Capital Capital reserve Revaluation reserves Statutory reserves Treasury shares Valuation Adjustments Additional Dividends proposed Retained earnings Interest of non-controlling shareholders
Total assets
22,563,973
22,633,975
Total liabilities and shareholders equity
STATISTICAL OPERATING DATA FOR BOVESPA SEGMENT
AVERAGE DAILY TRADED VALUE (in R$ millions)
2Q11 1Q11 2Q10 2Q11/1Q11 2Q11/2Q10 (%) (%)
Stocks and Equity Deriv. Cash market Derivatives Forward market Options market (stocks / indices) Fixed income and other spot securities Total
6,205.8 5,857.3 348.5 121.3 227.2 1.3 6,207.1
6,734.9 6,290.7 444.2 161.6 282.6 0.5 6,735.4
6,679.6 6,166.3 513.3 134.9 378.4 3.0 6,682.6
-7.9% -6.9% -21.5% -24.9% -19.6% 144.3% -7.8%
-7.1% -5.0% -32.1% -10.1% -40.0% -58.4% -7.1%
AVERAGE DAILY NUMBER OF TRADES
2Q11 1Q11 2Q10 2Q11/1Q11 2Q11/2Q10 (%) (%)
Stocks and Equity Deriv. Cash market Derivatives Forward market Options market (stocks / indices) Fixed income and other spot securities Total
503,616 500,391 431,120 422,148 409,150 348,130 81,467 91,241 82,990 1,277 1,433 1,485 80,190 89,809 81,505 13.31 13 13 503,629 500,404 431,133
0.6% 3.2% -10.7% -10.8% -10.7% 2.7% 0.6%
16.8% 21.3% -1.8% -14.0% -1.6% 5.5% 16.8%
OTHER OPERATIONAL STATISTICS
2Q11 1Q11 2Q10 2Q11/1Q11 2Q11/2Q10 (%) (%)
Average Market Cap. (in R$ billions) Average Ibovespa Average value under custody (in R$ billions) Average value under custody (ex ADRs and Forgn. Inv.) (in R$ billions) Number of custody accounts - average Securities Lending (Average Open Interest - in R$ billions) # Companies listed High Frequency Trading Participation Turnover Velocity (annualized)
2,451.5 2,533.7 2,202.3 64,378 67,827 65,152 1,190 1,221 1,044 495 504 435 631,383 628,978 580,108 28.3 25.8 19.9 377 375 373 7.4% 6.1% 59.7% 62.1% 69.2%
-3.2% -5.1% -2.5% -1.9% 0.4% 9.8% 0.5% 132 bps -234 bps
11.3% -1.2% 14.0% 13.6% 8.8% 42.0% 1.1% -943 bps
TRADING MARGINS (basis points)
Market 2Q11 1Q11 2Q10
Stocks and Equity Derivatives Cash Market Derivatives Forward Market Options Market Total BOVESPA
5.857 5.395 13.627 12.998 13.963 5.862
6.012 5.501 13.249 12.999 13.393 6.017
6.113 5.398 14.701 12.998 15.308 6.131
STATISTICAL OPERATING DATA FOR BM&F SEGMENT
ADTV (thousands of contracts)
2Q11 1Q11 2Q10 2Q11/1Q11 2Q11/2Q10 (%) (%)
Interest Rates in BRL FX Rates Stock Indices Interest Rates in USD Commodities Mini Contracts OTC Total
1,719.8 543.4 101.4 186.8 15.2 91.2 12.3 2,670.2
2,127.0 422.0 87.7 127.5 10.3 76.7 14.5 2,865.8
1,635.7 603.5 99.3 84.5 10.1 79.5 10.8 2,523.4
-19.1% 28.8% 15.6% 46.5% 47.7% 18.9% -14.6% -6.8%
5.1% -10.0% 2.1% 121.1% 50.4% 14.7% 14.8% 5.8%
REVENUE PER CONTRACT (R$)
2Q11 1Q11 2Q10 2Q11/1Q11 2Q11/2Q10 (%) (%)
Interest Rates in BRL FX Rates Stock Indices Interest Rates in USD Commodities Mini Contracts OTC Total
0.930 1.847 1.753 0.893 1.948 0.137 1.682 1.127
0.843 2.016 1.639 1.102 2.016 0.142 1.393 1.040
0.905 1.838 1.515 1.163 2.106 0.129 1.772 1.145
10.3% -8.4% 7.0% -19.0% -3.4% -3.5% 20.7% 8.4%
2.7% 0.5% 15.7% -23.2% -7.5% 5.6% -5.1% -1.5%
OTHER OPERATIONAL STATISTICS
2Q11 1Q11 2Q10 2Q11/1Q11 2Q11/2Q10 (%) (%)
High Frequency Trading Participation
4.7%
3.6%
6.0%
108 bps
-125 bps
10
