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ULTRASHORT S&P500 PROSHARES Reports Operating Results (10-Q/A)

January 24, 2012 | About:
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10qk

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ULTRASHORT S&P500 PROSHARES (SDS) filed Amended Quarterly Report for the period ended 2011-09-30.

Proshares Ultrashort S&p500 has a market cap of $249.7 million; its shares were traded at around $17.55 . The dividend yield of Proshares Ultrashort S&p500 stocks is 3.5%.

Highlight of Business Operations:

FS reported revenue increased $36 million or 5% in the third quarter of 2011 from the prior year period, and increased 2% on a constant currency basis. Excluding the Broker/Dealer, revenue increased 7%. Processing revenue increased $14 million, or 7%, due mainly to increases in transaction volumes and additional hosted services and increased $2.5 million from acquired businesses. Professional services revenue increased $12 million, or 9%, due mainly to implementation, consulting and project work associated with new and expanded relationships sold in the past twelve months and increased $4 million from acquired businesses. Reported revenue from license and resale fees included software license revenue of $38 million, an increase of $5 million compared to the same quarter in 2010, due mainly to expansion of current licenses and from renewals. On a constant currency basis, software license revenue increased $4 million.

Cost of sales and direct operating expenses as a percentage of total revenue was 46% in each of the three-month periods ended September 30, 2011 and 2010. Excluding the Broker/Dealers expenses of $11 million in 2011 and $40 million in 2010, cost of sales and direct operating expenses as a percentage of total revenue (also excluding the Broker/Dealer) was 45% and 44% in the three months ended September 30, 2011 and 2010, respectively, and increased $26 million. Impacting the period was a $23 million combined increase in FS and AS employment-related expenses, which included a $10 million increase in severance costs, and the increase from acquired businesses of $5 million, $3 million of which was employment-related expense.

FS reported revenue increased $60 million or 3% in the nine months ended September 30, 2011 from the prior year period. On a constant currency basis and excluding the Broker/Dealer, revenue increased 5%. Processing revenue increased $31 million, or 5%, due mainly to increases in transaction volumes and additional hosted services and increased $7 million from acquired businesses. Professional services revenue increased $14 million, or 3%, due primarily to implementation, consulting and project work associated with new and expanded relationships sold in the past twelve months and increased $10 million from acquired businesses. Reported revenue from license and resale fees included software license revenue of $157 million, an increase of $18 million compared to the nine months ended September 30, 2010. On a constant currency basis, software license revenue increased $8 million, or 6%.

Cost of sales and direct operating expenses as a percentage of total revenue was 46% and 47% in the nine-month periods ended September 30, 2011 and 2010, respectively. Excluding the Broker/Dealers expenses of $70 million in 2011 and $158 million in 2010, cost of sales and direct operating expenses as a percentage of total revenue (also excluding the Broker/Dealer) was 45% and 44% in the nine months ended September 30, 2011 and 2010, respectively, and increased $48 million. Impacting the period were a $36 million increase in FS employment-related expenses, including a $4 million increase in severance, a $20 million increase from acquired businesses, and a $7 million increase in AS facilities costs, mainly utilities, expansions of certain facilities that occurred in the second half of 2010 and a new facility added during the second quarter of the prior year. These expense increases were partially offset by a $10 million decrease in AS equipment expense, primarily resulting from renegotiation of maintenance contracts, and a $5 million decrease in AS employment-related expenses, which includes a $3 million decrease in severance.

Excluding the Broker/Dealer, sales, marketing and administration expenses as a percentage of total revenue (also excluding the Broker/Dealer) was 25% and 24% in the nine-month periods ended September 30, 2011 and 2010, respectively, and increased $65 million. Increases in sales, marketing and administration expenses were primarily due to a combined $56 million increase in FS and corporate employment-related expense, including a $36 million increase in severance and executive transition costs, a $9 million increase resulting from acquired businesses, a $6 million increase in AS advertising expenses and a $6 million increase in currency transaction losses. These increases were partially offset by decreases of a combined $8 million of FS and AS facilities costs, the $7 million of Broker/Dealer shutdown costs noted above and $4 million of third party professional services expenses in FS.

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