NASDAQ OMX Reports Solid Third Quarter 2010 Results
Oct 29, 2010 (GlobeNewswire via COMTEX News Network) --
EPS of $0.50 Represents 19% Increase Over Prior Year Non-GAAP Results
Net Revenues Grow 7% to $372 Million
NEW YORK, Oct. 29, 2010 (GLOBE NEWSWIRE) -- The NASDAQ OMX Group, Inc. ("NASDAQ OMX(R)") (Nasdaq:NDAQ) reported solid results for the third quarter of 2010. Net income attributable to NASDAQ OMX for the third quarter of 2010 was $101 million, or $0.50 per diluted share, compared with $96 million, or $0.46 per diluted share, in the second quarter of 2010, and $60 million, or $0.28 per diluted share, in the third quarter of 2009. Included in the third quarter of 2010 results are $4 million of expenses associated with workforce reductions, merger and strategic initiatives, and other items, offset by $4 million of benefits associated with the tax impact of these items and certain other tax adjustments.
Financial Highlights:
-- Net exchange revenues grew 7% over prior year results to $372 million
-- Non-GAAP operating income improved to $169 million, up 11% from third
quarter of 2009 results, while operating margins increased to 45%
-- Non-GAAP EPS increased to $0.50, up from $0.42 in the prior year quarter
-- GAAP EPS of $0.50 represents a 79% increase over third quarter of 2009
results
-- Completed $300 million of the $400 million authorized share repurchase
program thus far, representing 15.1 million shares. Board has authorized
an additional $150 million for the program, bringing the total
authorized amount to $550 million.
Summary of Non-GAAP Results1 ---------------------------------------------------- ($ millions, except EPS) Q310 Q210 Q309 ------------------------------- ----- ----- ----- Net Exchange Revenues2 372 390 349 Total Operating Expenses 203 207 197 Operating Income 169 183 152 Net Income 101 108 89 Diluted Earnings Per Share $0.50 $0.52 $0.42 1. A complete reconciliation of GAAP to non-GAAP results is included in the attached tables. 2. Represents revenues less liquidity rebates, brokerage, clearing and exchange fees.
Bob Greifeld, Chief Executive Officer, NASDAQ OMX said:
"Despite lower industry trading volumes, we delivered exceptional results this quarter. This performance can be attributed to the success we've had in diversifying our business and identifying opportunities to deliver value-added products and services to our customers. The scale of the NASDAQ OMX business model leaves us well positioned to achieve our stated goal of generating annualized net revenue of $2 billion by the end of 2013."
Business Highlights
European Transaction Services
-- Grew volumes for Nordic equity and index options and futures more than
40% from prior year levels. Also in the Nordic derivatives market,
NASDAQ OMX recently launched Genium INET, a comprehensive multi-asset
trading and clearing system. In addition to powering its own markets,
this technology is part of NASDAQ OMX's commercial exchange technology
offering, giving customers access to the fastest and most robust trading
system in the world.
-- Expanded the Nordic clearinghouse by offering members the opportunity to
clear repurchase agreement ("repo") transactions. As a result of an
agreement between the Swedish Money Market Council and NASDAQ OMX, the
entire Swedish Interbank repo market will ultimately be cleared through
NASDAQ OMX Stockholm AB.
U.S. Transaction Services
-- Became number one in U.S. equity options market share in the third
quarter of 2010, growing total share to 28.8%. Market share at NASDAQ
OMX PHLX ("PHLX") was 23.7% while The NASDAQ Options Market ("NOM")
achieved market share of 5.1%, representing the highest quarterly market
share ever realized at either market.
-- Received SEC approval for NASDAQ OMX PSX ("PSX"), the first U.S. equity
trading platform with a price-size priority model. Launched on October
8, 2010, PSX is an equity exchange model that encourages participants to
display more shares in the transparent marketplace by offering improved
execution opportunities for large orders. More displayed volume
encourages greater transparency in the public marketplace and increased
depth at a given price level for customers.
-- Announced State Street Global Markets' plans to become the fourth member
of IDCG's clearinghouse, joining BNY Mellon Clearing, Newedge USA and MF
Global. This addition reflects the growing interest in and client demand
for IDCG's product offering. During the third quarter, IDCG also
witnessed growth in clearing activity, ending the period with nearly
$400 million in open interest.
Market Technology
-- Completed the acquisition of SMARTS Group Holdings ("SMARTS"), the
world-leading technology provider of market surveillance solutions to
exchanges, regulators and brokers. This acquisition is part of NASDAQ
OMX's strategy to diversify its Market Technology business and enter the
broker surveillance and compliance market.
Issuer Services
-- Welcomed 45 new listings during the quarter, including two of the
largest technology IPOs, SMART Technologies (Nasdaq:SMT) and NXP
Semiconductors (Nasdaq:NXPI). Captured 64% of total proceeds raised by
information technology companies on U.S. markets, totaling over $1.6
billion.
Operating Highlights
U.S. Equities
-- Total matched market share of U.S. equities was 22.3% in the third
quarter of 2010, with NASDAQ matching 19.1% and NASDAQ OMX BX ("BX")
matching 3.2%. Total matched market share was 22.8% in the second
quarter of 2010 (NASDAQ: 19.0%; BX: 3.8%) and 22.1% in the third quarter
of 2009 (NASDAQ: 19.4%; BX: 2.7%). Total matched share volume was 107.8
billion shares in the third quarter of 2010, compared with 147.9 billion
shares in the second quarter of 2010 and 131.4 billion shares in the
third quarter of 2009.
European Equities
-- Total volume was 17.4 million trades in the third quarter of 2010,
compared with 19.8 million in the second quarter of 2010 and 12.5
million in the third quarter of 2009. Total value traded was EURO145
billion in the third quarter of 2010, compared with EURO179 billion in
the second quarter of 2010 and EURO141 billion in the third quarter of
2009.
U.S. Options
-- Total market share of U.S. equity options was 28.8% in the third quarter
of 2010, with PHLX matching 23.7% and NOM matching 5.1%. Total market
share of U.S. equity options was 25.1% in the second quarter of 2010
(PHLX: 21.7%; NOM: 3.4%) and 20.2% in the third quarter of 2009 (PHLX:
17.0%; NOM: 3.2%). Total industry average daily volume was 12.5 million
contracts in the third quarter of 2010, compared with 15.7 million
contracts in the second quarter of 2010 and 13.2 million contracts in
the third quarter of 2009.
European Derivatives
-- In the third quarter of 2010, the total volume of stock options and
futures was 8.2 million contracts (Q210: 8.9 million; Q309: 6.6
million), index options and futures volume was 11.0 million contracts
(Q210: 13.0 million; Q309: 6.9 million) and fixed income volume was 7.1
million contracts (Q210: 6.5 million; Q309: 6.2 million). Within NASDAQ
OMX Commodities, cleared contracts during the third quarter of 2010
totaled 385 terawatt hours ("TWh") (Q210: 499 TWh; Q309: 473 TWh).
Listings
-- New listings totaled 45 in the third quarter of 2010 compared with 65 in
the second quarter of 2010 and 35 in the third quarter of 2009. Of the
45 new company listings in the third quarter of 2010, 41 listed on The
NASDAQ Stock Market and 4 listed on the exchanges that comprise NASDAQ
OMX Nordic and NASDAQ OMX Baltic. New listings in the third quarter of
2010 included 18 initial public offerings, compared with 27 in the
second quarter of 2010 and 12 in the third quarter of 2009.
Market Technology
-- Total order intake, which represents the value of orders signed, was $27
million during the third quarter of 2010, compared with $12 million in
the second quarter of 2010 and $37 million in the third quarter of 2009.
At the end of the third quarter of 2010, total order value, which
represents the total contract value of orders signed that are yet to be
recognized as revenue, was $446 million, compared with $453 million at
the end of the second quarter of 2010 and $318 million at the end of the
third quarter of 2009.
Adena Friedman, Chief Financial Officer, said:
"In addition to our ability to innovate and execute our growth strategy, expense management continues to be a core competency as evidenced by our results this quarter. When adjusting for expenses associated with the SMARTS acquisition, our spending in the third quarter of 2010 is on par with levels realized last year while net revenues increased. Our ability to achieve operational efficiencies has allowed us to continue to invest in new initiatives while expanding profit margins."
Expense Guidance
Total operating expenses for the full year of 2010 are expected to be in the range of $880 million to $890 million, including approximately $60 million in non-recurring costs.
Financial Review
Revenues
Revenues less liquidity rebates, brokerage, clearance and exchange fees ("net exchange revenues") were $372 million for the third quarter of 2010, a decrease of $18 million, or 5%, from the second quarter of 2010 and an increase of $23 million, or 7%, from the third quarter of 2009. Changes in the exchange rates of various currencies as compared to the U.S. dollar had the impact of increasing revenues in the third quarter of 2010 by $5 million when compared to the second quarter of 2010; however, changes in exchange rates had the impact of decreasing revenues by $2 million when compared to the third quarter of 2009.
Market Services
Market Services net exchange revenues were $249 million, down 8% when compared to the second quarter of 2010 results but up 8% when compared to the third quarter of 2009.
Transaction Services
Net exchange revenues from Transaction Services were $168 million for the third quarter of 2010, a decrease of $18 million, or 10%, when compared to the second quarter of 2010, but an increase of $28 million, or 20%, when compared to the third quarter of 2009.
-- Total net cash equity trading revenues were $63 million for the third
quarter of 2010, down $13 million, or 17%, from the second quarter of
2010, but up $15 million, or 31%, from the prior year quarter.
-- Net U.S. cash equity trading revenues decreased $12 million when
compared to the second quarter of 2010 due to lower industry volumes,
which declined 26% from second quarter of 2010 levels. Revenues
increased $18 million when compared to the prior year quarter due
primarily to modified rates and to higher matched market share of U.S.
cash equity trading, offset somewhat by lower industry volumes.
-- European cash equity trading revenues declined $1 million when compared
to results from the second quarter of 2010 and $3 million from the third
quarter of 2009. When compared to the second quarter of 2010 the
decrease in revenue is due to lower trading activity. The reduction in
revenue when compared to the third quarter of 2009 is due primarily to
revised trading fees introduced in the fourth quarter of 2009 and the
first quarter of 2010, partially offset by increases in trading
activity.
-- Included in U.S. cash equity trading revenues in the third quarter of
2010 are $60 million in SEC Section 31 fees, compared with $81 million
in the second quarter of 2010 and $94 million in the third quarter of
2009. Corresponding cost of revenues, reflecting the reimbursement of
these fees to the SEC, is included in brokerage, clearance and exchange
fees.
-- Total net derivative trading and clearing revenues were $60 million for
the third quarter of 2010, down $9 million, or 13%, from the second
quarter of 2010 and up $6 million, or 11%, from the prior year quarter.
-- Net U.S. derivative trading and clearing revenues decreased $6 million
when compared to the second quarter of 2010 and were equal to third
quarter of 2009 revenues. The decline when compared to the second
quarter of 2010 is due to lower industry volumes, which were down 19%.
Partially offsetting this decline was higher market share. When compared
to the third quarter of 2009, increases in market share were offset by
declines in industry volumes and in the average net fees for traded
contracts.
-- European derivative trading and clearing revenues decreased $3 million
when compared to the second quarter of 2010 but increased $6 million
when compared to the third quarter of 2009. The decline when compared to
the second quarter of 2010 is due to lower trading volumes for options
and futures contracts. The increase when compared to the third quarter
of 2009 is due to higher trading volumes for options and futures
contracts and clearing of fixed income products.
-- Access Services revenues were $45 million for the third quarter of 2010,
an increase of $4 million, or 10%, when compared to the second quarter
of 2010 and an increase of $7 million, or 18%, when compared to the
prior year quarter. The increase in revenues when compared to the second
quarter of 2010 is primarily due to increased demand for access
services. The increase in revenues when compared to the third quarter of
2009 is due to revised fees for access services and increased demand for
co-location services.
Market Data
Market Data revenues were $76 million for the third quarter of 2010, down $3 million, or 4%, when compared to the second quarter of 2010 and to the third quarter of 2009.
-- Net U.S. tape plans revenues were $28 million in the third quarter of
2010, down $2 million, or 7%, when compared to the second quarter of
2010 and down $3 million, or 10%, when compared to the prior year
quarter. The reduction in revenues when compared to the second quarter
of 2010 and to the third quarter of 2009 is due to lower plan shareable
revenue and to declines in trading and quoting market share of U.S
equities, as calculated under the SEC-mandated market data revenue
quoting and trading formula.
-- U.S. market data products revenues were $32 million in the third quarter
of 2010, equal to revenues reported in the second quarter of 2010, but
up $3 million, or 10%, when compared to the prior year quarter. The
increase in revenues when compared to the third quarter of 2009 is
driven by the growth of new products such as BX TotalView, options data
feeds, and mutual fund products.
-- European market data products revenues were $16 million in the third
quarter of 2010, a decrease of $1 million, or 6%, when compared to the
second quarter of 2010, and a decrease of $3 million, or 16%, when
compared to the prior year quarter. The decrease when compared to the
second quarter of 2010 is primarily due to lower audit revenues. The
decrease in revenues when compared to the third quarter of 2009 is due
primarily to declines in subscriber populations, discontinued products
and changes in the exchange rates of various currencies as compared to
the U.S. dollar.
Issuer Services
Issuer Services revenues were $85 million, a decrease of $1 million, or 1%, when compared to the second quarter of 2010, and an increase of $3 million, or 4%, when compared to the third quarter of 2009.
Global Listing Services
Global Listing Services revenues were $73 million for the third quarter of 2010, down $1 million, or 1%, from the second quarter of 2010, but up $1 million, or 1%, when compared to the third quarter of 2009. The decrease when compared to the second quarter of 2010 is primarily due to a modest decline in Corporate Services revenues, resulting from seasonally lower demand for services from listed companies. The increase when compared to the third quarter of 2009 is primarily due to higher European listing revenues resulting from higher market capitalization values for European listed equities.
Global Index Group
Global Index Group revenues were $12 million for the third quarter of 2010, equal to revenues in the second quarter of 2010, and up $2 million, or 20%, when compared to the third quarter of 2009. Higher revenues when compared to the prior year quarter are primarily due to increases in asset sizes of licensed exchange traded funds ("ETFs") as well as additional demand for new licensed ETFs and other financial products.
Market Technology
Market Technology revenues were $38 million for the third quarter of 2010, up $4 million, or 12%, from the second quarter of 2010, and up $2 million, or 6%, when compared to the third quarter of 2009. These increases primarily relate to the inclusion of revenue associated with SMARTS, which was acquired during the quarter.
Operating Expenses
Total non-GAAP operating expenses decreased $4 million, or 2%, to $203 million in the third quarter of 2010 from $207 million in the second quarter of 2010, and increased $6 million, or 3%, from $197 million in the prior year quarter. The decrease in expenses when compared to the second quarter of 2010 is primarily driven by lower compensation, professional and contract services, and computer operations and data communications expenses. Partially offsetting lower spending in the quarter is the impact of changes in the exchange rates of various currencies as compared to the U.S. dollar, which had the effect of increasing expenses by $3 million when compared to the second quarter of 2010, as well as additional expenses associated with SMARTS. The increase in expenses from the third quarter of 2009 is primarily due to costs associated with SMARTS and higher compensation expenses, partially offset by a reduction in expenses resulting from the sale of Carpenter Moore, which occurred in the fourth quarter of 2009.
Net Interest Expense
Net interest expense was $23 million for the third quarter of 2010, compared with $24 million for the second quarter of 2010 and $23 million for the third quarter of 2009. Included in total net interest expense for the third quarter of 2010 is $19 million in interest expense, $4 million of non-cash expense associated with the accretion of senior and convertible notes, and $2 million in non-cash debt amortization expenses and other related fees. Interest income for the third quarter of 2010 was $2 million.
Earnings Per Share
On a non-GAAP basis, third quarter 2010 earnings per diluted share were $0.50 as compared to non-GAAP earnings per diluted share of $0.52 in the second quarter of 2010 and non-GAAP earnings per diluted share of $0.42 in the prior year quarter. NASDAQ OMX's weighted average shares outstanding used to calculate diluted earnings per share was 204 million for the third quarter of 2010, 209 million for the second quarter of 2010, and 215 million for the third quarter of 2009.
About NASDAQ OMX
The NASDAQ OMX Group, Inc. is the world's largest exchange company. It delivers trading, exchange technology and public company services across six continents, with approximately 3,600 listed companies. NASDAQ OMX offers multiple capital raising solutions to companies around the globe, including its U.S. listings market, NASDAQ OMX Nordic, NASDAQ OMX Baltic, NASDAQ OMX Second North, and the U.S. 144A sector. The company offers trading across multiple asset classes including equities, derivatives, debt, commodities, structured products and exchange-traded funds. NASDAQ OMX technology supports the operations of over 70 exchanges, clearing organizations and central securities depositories in more than 50 countries. NASDAQ OMX Nordic and NASDAQ OMX Baltic are not legal entities but describe the common offering from NASDAQ OMX exchanges in Helsinki, Copenhagen, Stockholm, Iceland, Tallinn, Riga, and Vilnius. For more information about NASDAQ OMX, visit http://www.nasdaqomx.com. *Please follow NASDAQ OMX on Facebook (http://www.facebook.com/pages/NASDAQ-OMX/108167527653) and Twitter (http://www.twitter.com/nasdaqomx).
NDAQF
Non-GAAP Information
In addition to disclosing results determined in accordance with GAAP, NASDAQ OMX also discloses certain non-GAAP results of operations, including net income, diluted earnings per share, operating expenses, and operating income 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 OMX'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 OMX 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, tax benefits and achievement of synergy targets, (ii) statements about the implementation dates and benefits of certain strategic initiatives, (iii) statements about our integrations of our recent acquisitions and (iv) other statements that are not historical facts. Forward-looking statements involve a number of risks, uncertainties or other factors beyond NASDAQ OMX's control. These factors include, but are not limited to, NASDAQ OMX'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 OMX's filings with the U.S. Securities Exchange Commission, including its annual reports on Form 10-K and quarterly reports on Form 10-Q which are available on NASDAQ OMX's website at http://www.nasdaqomx.com and the SEC's website at www.sec.gov. NASDAQ OMX undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
The NASDAQ OMX Group, Inc.
Condensed Consolidated Statements of Income
(in millions, except per share amounts)
(unaudited)
Three Months Ended
-----------------------------
September June September
30, 30, 30,
2010 2010 2009
--------- ------- ---------
Revenues
Market Services revenues $ 628 $ 756 $ 692
Cost of revenues:
Liquidity rebates (297) (374) (329)
Brokerage, clearance and
exchange fees (82) (112) (132)
--------- ------- ---------
Total cost of revenues (379) (486) (461)
--------- ------- ---------
Total Market Services revenues
less liquidity rebates,
brokerage, clearance and
exchange fees 249 270 231
Issuer Services revenues 85 86 82
Market Technology revenues 38 34 36
--------- ------- ---------
Total revenues less liquidity
rebates, brokerage, clearance
and exchange fees 372 390 349
--------- ------- ---------
Operating Expenses
Compensation and benefits 102 104 100
Marketing and advertising 5 5 3
Depreciation and amortization 25 25 27
Professional and contract
services 18 20 20
Computer operations and data
communications 13 14 14
Occupancy 23 21 19
Regulatory 9 9 10
Merger and strategic initiatives 1 1 5
General, administrative and
other 11 12 20
--------- ------- ---------
Total operating expenses 207 211 218
--------- ------- ---------
Operating income 165 179 131
Interest income 2 2 3
Interest expense (25) (26) (26)
Income from unconsolidated
investees, net 1 1 --
Loss on divestiture of
businesses -- (11) --
Dividend and investment income -- 1 1
Debt conversion expense -- -- (25)
--------- ------- ---------
Income before income taxes 143 146 84
Income tax provision 43 51 25
--------- ------- ---------
Net income 100 95 59
Net loss attributable to
noncontrolling interests 1 1 1
--------- ------- ---------
Net income attributable to
NASDAQ OMX $ 101 $ 96 $ 60
========= ======= =========
Basic and diluted earnings per
share:
Basic earnings per share $ 0.51 $ 0.46 $ 0.30
========= ======= =========
Diluted earnings per share $ 0.50 $ 0.46 $ 0.28
========= ======= =========
Weighted-average common shares
outstanding for earnings per
share:
Basic 200 206 203
Diluted 204 209 215
The NASDAQ OMX Group, Inc.
Revenue Detail
(in millions)
(unaudited)
Three Months Ended
----------------------------
September June September
30, 30, 30,
2010 2010 2009
--------- ------ ---------
MARKET SERVICES
Transaction Services
Cash Equity Trading Revenues:
U.S. cash equity trading $ 362 $ 488 $ 461
Cost of revenues:
Liquidity rebates (242) (326) (310)
Brokerage, clearance and
exchange fees (78) (108) (127)
--------- ------ ---------
Total U.S. cash equity cost
of revenues (320) (434) (437)
--------- ------ ---------
Net U.S. cash equity trading
revenues 42 54 24
European cash equity trading 21 22 24
--------- ------ ---------
Total net cash equity trading
revenues 63 76 48
--------- ------ ---------
Derivative Trading and Clearing
Revenues:
U.S. derivative trading and
clearing 93 92 58
--------- ------ ---------
Cost of revenues:
Liquidity rebates (55) (48) (19)
Brokerage, clearance and
exchange fees (4) (4) (5)
--------- ------ ---------
Total U.S. derivative trading
and clearing cost of
revenues (59) (52) (24)
--------- ------ ---------
Net U.S. derivative trading
and clearing revenues 34 40 34
European derivative trading and
clearing revenues 26 29 20
--------- ------ ---------
Total net derivative trading
and clearing revenues 60 69 54
Access Services Revenues 45 41 38
--------- ------ ---------
Total Transaction Services
revenues less liquidity
rebates, brokerage, clearance
and exchange fees 168 186 140
--------- ------ ---------
Market Data
Net U.S. tape plans 28 30 31
U.S. market data products 32 32 29
European market data products 16 17 19
--------- ------ ---------
Total Market Data revenues 76 79 79
--------- ------ ---------
Broker Services 4 4 9
--------- ------ ---------
Other Market Services 1 1 3
--------- ------ ---------
Total Market Services revenues
less liquidity rebates,
brokerage, clearance and
exchange fees 249 270 231
--------- ------ ---------
ISSUER SERVICES
Global Listing Services:
Annual renewal fees 29 28 29
Listing of additional shares
fees 10 10 9
Initial listing fees 4 5 5
--------- ------ ---------
Total U.S. listing fees 43 43 43
European listing fees 12 12 11
Corporate services 18 19 18
--------- ------ ---------
Total Global Listing
Services 73 74 72
Global Index Group 12 12 10
--------- ------ ---------
Total Issuer Services revenues 85 86 82
--------- ------ ---------
MARKET TECHNOLOGY
License, support and project
revenues 30 27 28
Facility management services 5 6 7
Other revenues 3 1 1
--------- ------ ---------
Total Market Technology
revenues 38 34 36
--------- ------ ---------
Total revenues less liquidity
rebates, brokerage,
clearance and exchange fees $ 372 $ 390 $ 349
========= ====== =========
The NASDAQ OMX Group, Inc.
Condensed Consolidated Balance Sheets
(in millions)
September December
30, 31,
2010 2009
----------- ---------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 336 $ 594
Restricted cash 53 30
Financial investments, at
fair value 343 308
Receivables, net 308 301
Deferred tax assets 17 25
Market value, outstanding
derivative positions 1,657 2,054
Other current assets 166 112
----------- ---------
Total current assets 2,880 3,424
Non-current restricted cash 106 80
Property and equipment, net 160 164
Non-current deferred tax
assets 403 504
Goodwill 5,041 4,800
Intangible assets, net 1,680 1,631
Other assets 85 119
----------- ---------
Total assets $ 10,355 $ 10,722
=========== =========
Liabilities
Current liabilities:
Accounts payable and
accrued expenses $ 138 $ 125
Section 31 fees payable to
SEC 19 137
Accrued personnel costs 97 114
Deferred revenue 156 105
Other current liabilities 134 71
Deferred tax liabilities 26 23
Market value, outstanding
derivative positions 1,657 2,054
Current portion of debt
obligations 140 225
----------- ---------
Total current liabilities 2,367 2,854
Debt obligations 1,846 1,867
Non-current deferred tax
liabilities 713 683
Non-current deferred revenue 169 160
Other liabilities 182 199
----------- ---------
Total liabilities 5,277 5,763
Commitments and contingencies
Series A convertible
preferred stock -- 15
Equity
NASDAQ OMX stockholders'
equity:
Common stock 2 2
Preferred stock -- --
Additional paid-in capital 3,776 3,736
Common stock in treasury, at
cost (310) (10)
Accumulated other
comprehensive loss (268) (406)
Retained earnings 1,867 1,610
----------- ---------
Total NASDAQ OMX
stockholders' equity 5,067 4,932
Noncontrolling interests 11 12
----------- ---------
Total equity 5,078 4,944
----------- ---------
Total liabilities, Series A
convertible preferred stock
and equity $ 10,355 $ 10,722
=========== =========
The NASDAQ OMX Group, Inc.
Reconciliation of GAAP to Non-GAAP Earnings and
Reconciliation of GAAP to Non-GAAP Operating Expenses
(in millions, except per share amounts)
(unaudited)
Three Months Ended
-----------------------------
September June September
30, 30, 30,
2010 2010 2009
--------- ------- ---------
GAAP Net Income attributable to
NASDAQ OMX:
--------------------------------- $ 101 $ 96 $ 60
Adjustments:
Workforce reductions 2 3 4
Merger and strategic initiatives 1 1 5
Occupancy 2 -- --
Asset retirements 2 -- 10
Foreign currency revaluation (3) -- --
Loss on divestiture of
businesses -- 11 --
Loss on exchange of ownership of
NASDAQ Dubai -- 1 --
Professional fees -- -- 2
Debt conversion expense -- -- 25
--------- ------- ---------
Total Adjustments 4 16 46
Adjustment to the income tax
provision to reflect Non-GAAP
adjustments(1) (2) (7) (7)
Non-recurring tax items, net (2) 3 (10)
--------- ------- ---------
Total Adjustments, net of tax -- 12 29
Non-GAAP Net Income attributable
to NASDAQ OMX: $ 101 $ 108 $ 89
========= ======= =========
GAAP Diluted Earnings per Common
Share:
--------------------------------- $ 0.50 $ 0.46 $ 0.28
Total Adj. from Non-GAAP Net
Income Above: -- 0.06 0.14
--------- ------- ---------
Non-GAAP Diluted Earnings per
Common Share: $ 0.50 $ 0.52 $ 0.42
========= ======= =========
Three Months Ended
-----------------------------
September June September
30, 30, 30,
2010 2010 2009
--------- ------- ---------
GAAP Operating Expenses:
--------------------------------- 207 211 218
Adjustments:
Workforce reductions (2) (3) (4)
Merger and strategic initiatives (1) (1) (5)
Occupancy (2) -- --
Asset retirements (2) -- (10)
Foreign currency revaluation 3 -- --
Professional fees -- -- (2)
--------- ------- ---------
Total Adjustments (4) (4) (21)
--------- ------- ---------
Non-GAAP Operating Expenses 203 207 197
========= ======= =========
(1) We determine the tax effect of each item based on the tax
rules in the respective jurisdiction where the transaction
occurred. The foreign currency revaluation has no associated
tax impact.
The NASDAQ OMX Group, Inc.
Reconciliation of GAAP to Non-GAAP Operating Income
(in millions)
(unaudited)
Three Months Ended
----------------------------
September June September
30, 30, 30,
2010 2010 2009
--------- ------ ---------
GAAP Operating Income:
------------------------------ $ 165 $ 179 $ 131
Adjustments:
Workforce reductions 2 3 4
Merger and strategic
initiatives 1 1 5
Occupancy 2 -- --
Asset retirements 2 -- 10
Foreign currency revaluation (3) -- --
Professional fees -- -- 2
--------- ------ ---------
Total Adjustments 4 4 21
--------- ------ ---------
Non-GAAP Operating Income $ 169 $ 183 $ 152
========= ====== =========
------------------------------------------------------------
Total revenues less liquidity
rebates, brokerage, clearance
and exchange fees $ 372 $ 390 $ 349
Non-GAAP Operating Margin (1) 45% 47% 44%
------------------------------------------------------------
(1) Non-GAAP Operating Margin equals Non-GAAP Operating
Income divided by total revenues less liquidity rebates,
brokerage, clearance, and exchange fees.
The NASDAQ OMX Group, Inc.
Quarterly Key Drivers Detail
(unaudited)
Three Months Ended
-----------------------------
September June September
30, 30, 30,
2010 2010 2009
--------- ------- ---------
Market Services
Cash Equity Trading
NASDAQ securities
---------------------------------------
Average daily share volume (in
billions) 2.02 2.53 2.25
Matched market share executed on
NASDAQ 29.0% 28.8% 30.4%
Matched market share executed on
NASDAQ OMX BX 2.5% 3.2% 2.0%
Market share reported to the
FINRA/NASDAQ
Trade Reporting Facility(1) 30.4% 39.0% 39.3%
Total market share (2) 61.9% 71.0% 71.8%
NYSE securities
---------------------------------------
Average daily share volume (in
billions) 4.24 5.96 5.53
Matched market share executed on
NASDAQ 13.8% 14.0% 14.1%
Matched market share executed on
NASDAQ OMX BX 3.5% 4.1% 3.1%
Market share reported to the
FINRA/NASDAQ
Trade Reporting Facility(1) 27.0% 33.5% 35.4%
Total market share (2) 44.3% 51.6% 52.6%
NYSE Amex and regional securities
---------------------------------------
Average daily share volume (in
billions) 1.29 1.84 1.53
Matched market share executed on
NASDAQ 21.0% 21.7% 22.2%
Matched market share executed on
NASDAQ OMX BX 3.3% 3.5% 2.1%
Market share reported to the
FINRA/NASDAQ
Trade Reporting Facility(1) 25.1% 30.0% 34.4%
Total market share (2) 49.4% 55.2% 58.6%
Total U.S.-listed equities
---------------------------------------
Average daily share volume (in
billions) 7.55 10.33 9.31
Matched share volume (in billions) 107.8 147.9 131.4
Matched market share executed on
NASDAQ 19.1% 19.0% 19.4%
Matched market share executed on
NASDAQ OMX BX 3.2% 3.8% 2.7%
NASDAQ OMX Nordic and NASDAQ OMX
Baltic Markets
---------------------------------------
Average daily number of equity trades 263,965 324,560 189,002
Average daily value of shares traded
(in billions) $ 2.8 $ 3.7 $ 3.0
Derivative Trading and Clearing
U.S. Equity Options Contracts
---------------------------------------
Total industry average daily volume
(in millions) 12.5 15.7 13.2
Matched market share:
NASDAQ OMX PHLX 23.7% 21.7% 17.0%
The NASDAQ Options Market 5.1% 3.4% 3.2%
NASDAQ OMX Nordic and NASDAQ OMX
Baltic Markets
---------------------------------------
Average daily volume:
Equity options and fixed-income
contracts 398,041 460,790 298,849
Equity options contracts traded on
EDX London(3) -- -- 87,636
Finnish option contracts traded on
Eurex 124,553 138,493 65,779
NASDAQ OMX Commodities
---------------------------------------
Clearing Turnover:
Power contracts (TWh)(4) 385 499 473
Carbon contracts (1000 tCO2)(4) 3,219 9,557 13,534
Issuer Services
NASDAQ
Initial public offerings 17 23 12
New listings (5) 41 59 33
Number of listed companies (6) 2,805 2,831 2,863
NASDAQ OMX Nordic and NASDAQ OMX
Baltic Markets
Initial public offerings 1 4 --
New listings 4 6 2
Number of listed companies (7) 780 788 800
Market Technology
Order intake (in millions)(8) $ 27 $ 12 $ 37
Total order value (in millions)(9) $ 446 $ 453 $ 318
(1) Transactions reported to the Financial Industry Regulatory
Authority, or FINRA, FINRA/NASDAQ Trade Reporting Facility.
(2) Includes transactions executed on both NASDAQ's and NASDAQ OMX
BX's systems plus trades reported through the FINRA/NASDAQ Trade
Reporting Facility.
(3) In December 2009, derivative volume was transferred to NASDAQ OMX
from EDX.
(4) Transactions executed on Nord Pool ASA and reported for clearing
to NASDAQ OMX Commodities measured by Terawatt hours (TWh) and one
thousand metric tons of carbon dioxide (1000 tCO2).
(5) 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 ETFs.
(6) Number of listed companies for NASDAQ at period end, including
separately listed ETFs.
(7) Represents companies listed on the exchanges that comprise NASDAQ
OMX Nordic and NASDAQ OMX Baltic and companies on the alternative
markets, NASDAQ OMX First North, at period end.
(8) Total contract value of orders signed.
(9) Represents total contract value of orders signed that are yet to
be recognized as revenue.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: The NASDAQ OMX Group, Inc.
CONTACT: The NASDAQ OMX Group, Inc. Media Relations: Frank DeMaria +1.212.231.5183 Investor Relations: Vincent Palmiere +1.212.401.8742
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