DGAP-News: NASDAQ OMX Reports Record Fourth Quarter 2010 Results

The NASDAQ OMX Group, Inc.

02.02.2011 13:00
—————————————————————————

Non-GAAP EPS of $0.55 Represents 20% Increase Over Q409 Results

NEW YORK, 2011-02-02 13:00 CET (GLOBE NEWSWIRE) –The NASDAQ OMX Group, Inc. (–NASDAQ OMX(r)–) (Nasdaq:NDAQ) reported strong
results for the fourth quarter of 2010. Net income attributable to NASDAQ OMX
for the fourth quarter of 2010 was $137 million, or $0.69 per diluted share,
compared with $101 million, or $0.50 per diluted share, in the third quarter of
2010, and $43 million, or $0.20 per diluted share, in the fourth quarter of
2009. For the full year of 2010, net income attributable to NASDAQ OMX was $395
million, or $1.91 per diluted share.

Included in the fourth quarter of 2010 results are $9 million of expenses
associated with workforce reductions, merger and strategic initiatives, and
other items, offset by $36 million of benefits primarily associated with the
tax impact of these items and the restructuring of certain NASDAQ OMX
subsidiaries.

Financial Highlights:

— Net exchange revenues were $400 million, an 8% increase over Q409 results.
— Non-GAAP operating income improved to $184 million, up 12% from the prior
year quarter, while operating margins increased to 46%.
— Non-GAAP Net Income was $110 million, an increase of 11% over Q409 results.
— Non-GAAP EPS increased to $0.55, up from $0.46 in the prior year quarter.
— GAAP EPS increased to $0.69, up $0.49 from $0.20 in the fourth quarter of
2009.

Summary of Non-GAAP Results1
——————————————————————————–
–
($ millions, except EPS) Q410 Q310 Q409
——————————————————————————–
Net Exchange Revenues2 400 372 369
Total Operating Expenses 216 203 204
Operating Income 184 169 165
Net Income 110 101 99
Diluted Earnings Per Share $0.55 $0.50 $0.46

1. A complete reconciliation of GAAP to non-GAAP results is included in the
attached tables.
2. Represents revenues less transaction rebates, brokerage, clearance and
exchange fees.
Bob Greifeld, Chief Executive Officer, NASDAQ OMX said:

–In 2010 we saw a sizable return on the strategic decisions we made in recent
years. This was driven by a well-designed diversification strategy and buoyed
by our major acquisitions. As a result, we achieved a record performance,
seeing excellent growth in derivatives and strength in our European-based
businesses. This year we plan to continue our success as we further diversify
and leverage the scale of our business model.–

Business Highlights

— On December 21, 2010, NASDAQ OMX completed a share repurchase from Borse
Dubai totaling $497 million, or 22.8 million shares. This transaction was
financed with $130 million of cash on hand and $367 million from the net
proceeds of 7-year senior bonds with a 5.25% coupon rate. Share repurchases
for the full year of 2010 totaled $797 million, or 37.8 million shares,
representing approximately 18% of NASDAQ OMX–s total shares outstanding at
the beginning of 2010.

European Transaction Services

— Witnessed significant growth in derivative trading and clearing revenues
and transaction volumes when compared to the prior year quarter. Total
revenues increased 23% when compared to the fourth quarter of 2009 while
average daily volumes for options, futures, and fixed-income contracts
traded or cleared on the Nordic derivatives market grew by 20%.
— Launched Genium INET, a comprehensive multi-asset trading and clearing
system, in the Nordic derivatives market. 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

— NASDAQ OMX was number one in U.S. equity options market share for the
fourth quarter and full year of 2010. Additionally, net U.S. derivative
trading and clearing revenues for the fourth quarter of 2010 grew to $42
million, representing an increase of 35% when compared to the prior year
period, while revenues for the full year increased to $150 million.
— Launched NASDAQ OMX PSX (–PSX–), the first U.S. equity trading platform
with a price-size priority model. 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.
— Acquired FTEN, Inc., a leading provider of Real-Time Risk Management
(–RTRM–) solutions for the financial securities market. FTEN is a market
leader in RTRM and, with the implementation of new market access rules, is
well positioned to grow as the industry becomes more focused on solutions
for effectively managing risk.

Market Technology

— The Australian Securities Exchange launched its next generation trading
system, ASX Trade, which is powered by NASDAQ OMX–s Genium INET platform.
The Genium INET platform combines rich functionality with high reliability,
and has delivered significant latency and transaction capacity
improvements.

Issuer Services

— Acquired Stockholm-based Zoomvision Mamato (–ZVM–), a company that provides
live webcasting services, primarily for investor relations professionals.
ZVM is now part of NASDAQ OMX–s Global Corporate Solutions division, which
provides a range of investor relations products, market analytics and
governance services that help public and private companies minimize risk,
maximize efficiency, and increase transparency.
— Announced a plan with the Singapore Exchange (–SGX–) to offer companies
cross listing opportunities. NASDAQ-listed companies with strong brand
awareness and active business endeavors in Asia will benefit from a
secondary listing on SGX. SGX-listed companies interested in reaching U.S.
investors will be able to list their ADRs on The NASDAQ Stock Market.

Operating Highlights

U.S. Equities

— Total matched market share of U.S. equities was 19.6% in the fourth quarter
of 2010, with NASDAQ matching 16.8%, NASDAQ OMX BX (–BX–) matching 2.3% and
PSX matching 0.5%. Total matched market share was 22.3% in the third
quarter of 2010 (NASDAQ: 19.1%; BX: 3.2%) and 24.0% in the fourth quarter
of 2009 (NASDAQ: 20.6%; BX: 3.4%). Total matched share volume was 93.1
billion shares in the fourth quarter of 2010, compared with 107.8 billion
shares in the third quarter of 2010 and 126.1 billion shares in the fourth
quarter of 2009.

European Equities

— Total average daily volume was 275 thousand trades in the fourth quarter of
2010, compared with 264 thousand in the third quarter of 2010 and 220
thousand in the fourth quarter of 2009. Total average daily value traded
was $3.2 billion in the fourth quarter of 2010, compared with $2.8 billion
in the third quarter of 2010 and $3.3 billion in the fourth quarter of
2009.

U.S. Options

— Total market share of U.S. equity options was 31.4% in the fourth quarter
of 2010, with PHLX matching 26.5% and NOM matching 4.9%. Total market share
of U.S. equity options was 28.8% in the third quarter of 2010 (PHLX: 23.7%;
NOM: 5.1%) and 22.5% in the fourth quarter of 2009 (PHLX: 19.4%; NOM:
3.1%). Total industry average daily volume was 15.1 million contracts in
the fourth quarter of 2010, compared with 12.5 million contracts in the
third quarter of 2010 and 12.9 million contracts in the fourth quarter of
2009.

European Derivatives

— In the fourth quarter of 2010, the average daily volume of options, futures
and fixed-income contracts was 436 thousand (Q310: 398 thousand; Q409: 363
thousand). Within NASDAQ OMX Commodities, cleared power contracts during
the fourth quarter of 2010 totaled 529 terawatt hours (–TWh–) (Q310: 382
TWh; Q409: 599 TWh).

Listings

— New listings totaled 63 in the fourth quarter of 2010 compared with 45 in
the third quarter of 2010 and 67 in the fourth quarter of 2009. Of the 63
new company listings in the fourth quarter of 2010, 54 listed on The NASDAQ
Stock Market and 9 listed on the exchanges that comprise NASDAQ OMX Nordic
and NASDAQ OMX Baltic. New listings in the fourth quarter of 2010 included
37 initial public offerings, compared with 18 in the third quarter of 2010
and 19 in the fourth quarter of 2009.

Market Technology

— Total order intake, which represents the value of orders signed, was $71
million during the fourth quarter of 2010, compared with $27 million in the
third quarter of 2010 and $148 million in the fourth quarter of 2009. At
the end of the fourth quarter of 2010, total order value, which represents
the total contract value of orders signed that are yet to be recognized as
revenue, was $495 million, compared with $446 million at the end of the
third quarter of 2010 and $417 million at the end of the fourth quarter of
2009.

Adena Friedman, Chief Financial Officer, said:

–The repurchase of 22.8 million shares during the quarter resulted in the
successful culmination of the share repurchase plan launched earlier in the
year, during which we bought back 18% of NASDAQ OMX–s outstanding shares valued
at nearly $800 million. In 2011, our goal is to continue to manage our capital
effectively as we focus on investments in new initiatives and debt retirement.–

Expense Guidance

Total operating expenses for the full year of 2011 are expected to be in the
range of $920 million to $940 million. This guidance includes expenses
associated with recent acquisitions such as FTEN and SMARTS, and approximately
$25 million in non-recurring costs.

Financial Review

Revenues

Revenues less transaction rebates, brokerage, clearance and exchange fees (–net
exchange revenues–) were $400 million for the fourth quarter of 2010, an
increase of $28 million, or 8%, from the third quarter of 2010 and an increase
of $31 million, or 8%, from the fourth 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 fourth quarter of 2010 by $8 million when
compared to the third quarter of 2010, and by $1 million when compared to the
fourth quarter of 2009.

Market Services

Market Servicesnet exchange revenues were $265 million, up 6% when compared to
the third quarter of 2010 results and up 10% when compared to the fourth
quarter of 2009.

Transaction Services

Net exchange revenues from Transaction Services were $182 million for the
fourth quarter of 2010, an increase of $14 million, or 8%, when compared to the
third quarter of 2010, and an increase of $32 million, or 21%, when compared to
the fourth quarter of 2009.

— Total net cash equity trading revenues were $60 million for the fourth
quarter of 2010, down $3 million, or 5%, from the third quarter of 2010,
but up $8 million, or 15%, from the prior year quarter.

— Net U.S. cash equity trading revenues decreased $5 million when compared to
the third quarter of 2010 due to lower trading volumes, which declined 14%
from third quarter of 2010 levels, and lower market share. Net revenues
increased $8 million when compared to the prior year quarter due primarily
to modified rates, offset somewhat by lower trading volumes.
— European cash equity trading revenues increased $2 million when compared to
results from the third quarter of 2010 and were equal to revenues in the
fourth quarter of 2009. When compared to the third quarter of 2010 the
increase in revenue is due to higher trading activity and to changes in the
exchange rates of various currencies as compared to the U.S. dollar.
— Included in U.S. cash equity trading revenues in the fourth quarter of 2010
are $57 million in SEC Section 31 fees, compared with $60 million in the
third quarter of 2010 and $103 million in the fourth 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 $74 million for the
fourth quarter of 2010, up $14 million, or 23%, from the third quarter of
2010 and up $17 million, or 30%, from the prior year quarter.

— Net U.S. derivative trading and clearing revenues increased $8 million when
compared to the third quarter of 2010 and $11 million when compared to
fourth quarter of 2009 revenues. The increases when compared to both
periods are due to higher market share and higher industry volumes.
— European derivative trading and clearing revenues increased $6 million when
compared to the third quarter of 2010 and to the fourth quarter of 2009.
Increases when compared to both periods are due to higher trading and
clearing volumes for options, futures and fixed-income products, and
activity associated with repo contracts launched in the fourth quarter of
2010. The increase when compared to the third quarter of 2010 is also
driven by higher activity associated with trading and clearing energy
derivative products. Contributing to the increase when compared to the
fourth quarter of 2009 are revenues associated with Nord Pool ASA, which
was acquired in the second quarter of 2010.

— Access Services revenues were $48 million for the fourth quarter of 2010,
an increase of $3 million, or 7%, when compared to the third quarter of
2010 and an increase of $7 million, or 17%, when compared to the prior year
quarter. The increase in revenues when compared to the third quarter of
2010 is primarily due to increased demand for access services. The increase
in revenues when compared to the fourth quarter of 2009 is due to revised
fees for access services and increased demand for co-location services.

Market Data

Market Data revenues were $79 million for the fourth quarter of 2010, up $3
million, or 4%, when compared to the third quarter of 2010, but down $5
million, or 6%, when compared to the fourth quarter of 2009.

— Net U.S. tape plans revenues were $28 million in the fourth quarter of
2010, equal to revenues in the third quarter of 2010 but down $5 million,
or 15%, when compared to the prior year quarter. The reduction inrevenues
when compared to the fourth 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 fourth quarter
of 2010, equal to revenues reported in the third quarter of 2010, but up $1
million, or 3%, when compared to the prior year quarter. The increase in
revenues when compared to the fourth quarter of 2009 is driven by the
growth of new products such as BX TotalView, options data feeds, and global
access products.
— European market data products revenues were $19 million in the fourth
quarter of 2010, an increase of $3 million, or 19%, when compared to the
third quarter of 2010, but a decrease of $1 million, or 5%, when compared
to the prior year quarter. The increase when compared to the third quarter
of 2010 is primarily due to modified fees for market data products and to
changes in the exchange rates of various currencies as compared to the U.S.
dollar. The decrease in revenues when compared to the fourth 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 $89 million, an increase of $4 million, or 5%,
when compared to the third quarter of 2010, and an increase of $6 million, or
7%, when compared to the fourth quarter of 2009.

Global Listing Services

Global Listing Services revenues were $77 million for the fourth quarter of
2010, up $4 million, or 5%, from the third quarter of 2010 and the fourth
quarter of 2009. The increase when compared to both periods is primarily due to
increases in Corporate Services revenues, resulting from higher demand for
services from listed companies.

Global Index Group

Global Index Group revenues were $12 million for the fourth quarter of 2010,
equal to revenues in the third quarter of 2010, and up $2 million, or 20%, when
compared to the fourth 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 $46 million for the fourth quarter of 2010, up
$8 million, or 21%, from the third quarter of 2010, and up $2 million, or 5%,
when compared to the fourth quarter of 2009. These increases relate to the
inclusion of revenue associated with SMARTS, which was acquired during the
third quarter of 2010. Also contributing to the increase in revenues when
compared to the third quarter of 2010 are revenues associated with higher
change request and advisory fees.

Operating Expenses

Total non-GAAP operating expenses increased $13 million, or 6%, to $216 million
in the fourth quarter of 2010 from $203 million in the third quarter of 2010,
and increased $12 million, or 6%, from $204 million in the prior year quarter.
The increase in expenses when compared to the third quarter of 2010 is driven
by higher compensation and depreciation and amortization expenses resulting
from the inclusion of expenses related to SMARTS, which was acquired in the
third quarter of 2010. Also contributing to the increase was 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 $6 million when compared
to the third quarter of 2010. The increase in expenses from the fourth quarter
of 2009 is primarily due to higher compensation expenses associated with
SMARTS, increases in professional and contract services costs, and changes in
the exchange rates of various currencies as compared to the U.S. dollar, which
had the effect of increasing expenses by $2 million.

Net Interest Expense

Net interest expense was $24 million for the fourth quarter of 2010, compared
with $23 million for the third quarter of 2010 and $22 million for the fourth
quarter of 2009. Included in total net interest expense for the fourth quarter
of 2010 is $20 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 fourth quarter of 2010 was $2 million.

Income Tax Provision

The non-GAAP tax rate for the fourth quarter of 2010 was 31%, while the
effective tax rate on a reported GAAP basis was 9%. The lower than normal GAAP
tax rate is primarily due to the permanent tax effect of the restructuring of
certain NASDAQ OMX subsidiaries. This resulted in a one-time reduction in
deferred tax liabilities due to a revised effective tax rate and a one-time tax
deduction for a capital loss.

Earnings Per Share

On a non-GAAP basis, fourth quarter 2010 earnings per diluted share were $0.55
as compared to non-GAAP earnings per diluted share of $0.50 in the third
quarter of 2010 and non-GAAP earnings per diluted share of $0.46 in the prior
year quarter. NASDAQ OMX–s weighted average shares outstanding used to
calculate diluted earnings per share was 200 million for the fourth quarter of
2010, 204 million for the third quarter of 2010, and 215 million for the fourth
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 First 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.
Consolidated Statements of Income
(in millions, except per share amounts)
(unaudited)

Three Months Ended Year Ended
———————————————
Decembe Septembe Decembe Decembe Decembe
r 31, r 30, r 31, r 31, r 31,
2010 2010 2009 2010 2009
———————————————
Revenues
Market Services revenues $ 648 $ 634 $ 688 $ 2,700 $ 2,934
Cost of revenues:
Transaction rebates (299) (303) (308) (1,312) (1,475)
Brokerage, clearance and exchange (84) (82) (139) (363) (483)
fees
———————————————
Total cost of revenues (383) (385) (447) (1,675)
(1,958)

———————————————
Total Market Services revenues 265 249 241 1,025 976
less transaction rebates,
brokerage,
clearance and exchange fees

Issuer Services revenues 89 85 83 344 330
Market Technology revenues 46 38 44 152 145
Other revenues — — 1 1 2
———————————————

Total revenues less transaction 400 372 369 1,522 1,453
rebates, brokerage, clearance and
exchange fees
———————————————
Operating Expenses
Compensation and benefits 111 102 110 416 412
Marketing and advertising 6 5 7 20 15
Depreciation and amortization 27 25 27 103 104
Professional and contract services 21 18 19 78 76
Computer operations and data 15 13 16 58 58
communications
Occupancy 22 23 27 88 81
Regulatory 9 9 3 35 32
Merger and strategic initiatives 2 1 — 4 17
General, administrative and other 12 11 11 89 55
———————————————
Total operating expenses 225 207 220 891
850

———————————————

Operating income 175 165 149 631 603

Interest income 2 2 3 9 13
Interest expense (26) (25) (25) (102) (102)
Dividend and investment income (3) — — (3) 2
Income (loss) from unconsolidated — 1 (87) 2 (107)
investees, net
Gain on sales of businesses — — 12 — 12
Loss on divestiture of businesses — — — (11) —
Loss on sale of investment — — — — (5)
security
Debt conversion expense — — — — (25)
———————————————
Income before income taxes 148 143 52 526 391
Income tax provision 13 43 10 137 128
———————————————
Net income 135 100 42 389 263

Net loss attributable to 2 1 1 6 3
noncontrolling interests
———————————————
Net income attributable to NASDAQ $ 137 $ 101 $ 43 $ 395 $ 266
OMX
=============================================

Basic and diluted earnings per
share:
Basic earnings per share $ 0.70 $ 0.51 $ 0.20 $ 1.94 $
1.30

=============================================
Diluted earnings per share $ 0.69 $ 0.50 $ 0.20 $ 1.91 $
1.25

=============================================

Weighted-average common shares outstanding
for earnings per share:
Basic 195 200 211 203
205
Diluted 200 204 215 207
215The NASDAQ OMX Group, Inc.
Revenue Detail
(in millions)
(unaudited)

Three Months Ended Year Ended
—————————————–
Decemb Septem Decemb Decembe Decembe
er 31, ber er 31, r 31, r 31,
30,
2010 2010 2009 2010 2009
—————————————–
MARKET SERVICES
Transaction Services
Cash Equity Trading Revenues:
U.S. cash equity trading $ 331 $ 368 $ 446 $ 1,600 $
2,010
Cost of revenues:
Transaction rebates (219) (248) (286) (1,094)
(1,394)
Brokerage, clearance and exchange fees (75) (78) (131) (341)
(467)

—————————————–
Total U.S. cash equity cost of (294) (326) (417) (1,435)
(1,861)
revenues

—————————————–
Net U.S. cash equity trading revenues 37 42 29 165
149
European cash equity trading 23 21 23 90
95

—————————————–
Total net cash equity trading revenues 60 63 52 255
244

—————————————–

Derivative Trading and Clearing
Revenues:
U.S. derivative trading and clearing 131 93 61 390
232
Cost of revenues:
Transaction rebates (80) (55) (22) (218)
(81)
Brokerage, clearance and exchange fees (9) (4) (8) (22)
(16)

—————————————–
Total U.S. derivative trading and (89) (59) (30) (240)
(97)
clearing cost of revenues

—————————————–
Net U.S. derivative trading and 42 34 31 150
135
clearing revenues
European derivative trading and 32 26 26 115
87
clearing revenues

—————————————–
Total net derivative trading and 74 60 57 265
222
clearing revenues

Access Services Revenues 48 45 41 173
144

—————————————–

Total Transaction Services revenues 182 168 150 693
610
less transaction rebates, brokerage,
clearance and exchange fees

—————————————–

Market Data
Net U.S. tape plans 28 28 33 117
128
U.S. market data products 32 32 31 126
119
European market data products19 16 20 70
78

—————————————–

Total Market Data revenues 79 76 84 313
325

—————————————–

Broker Services 4 4 6 15
32

—————————————–

Other Market Services — 1 1 4
9

—————————————–

Total Market Services revenues less 265 249 241 1,025
976
transaction rebates, brokerage,
clearance and exchange fees

—————————————–

ISSUER SERVICES
Global Listing Services:
Annual renewal fees 29 29 29 113
117
Listing of additional shares fees 10 10 10 39
37
Initial listing fees 4 4 5 18
20

—————————————–
Total U.S. listing fees 43 43 44 170
174
European listing fees 12 12 12 49
45
Corporate solutions 22 18 17 78
72

—————————————–
Total Global Listing Services 77 73 73 297
291

Global Index Group 12 12 10 47 39
—————————————–
Total Issuer Services revenues 89 85 83 344
330

—————————————–

MARKET TECHNOLOGY
License, support and facility 28 27 30 104
106
management revenues
Delivery project revenues 5 4 7 17
20
Change request, advisory and broker 13 7 7 31
19
surveillance revenues

—————————————–
Total Market Technology revenues 46 38 44 152
145

—————————————–

Other — — 1 1 2
—————————————–

Total revenues less transaction $ 400 $ 372 $ 369 $ 1,522 $ 1,453
rebates, brokerage, clearance and
exchange fees
=========================================

The NASDAQ OMXGroup, Inc.
Consolidated Balance Sheets
(in millions)

December December
31, 31,
2010 2009
————————-
Assets (unaudited)
Current assets:

————————-
Cash and cash equivalents $ 315 $
594

————————-
Restricted cash 60
30

————————-
Financial investments, at fair value 253
308

————————-
Receivables, net 298
301

————————-
Deferred tax assets 13
25

————————-
Open clearing contracts:
Derivative positions, at fair value 4,037
2,054
Resale agreements, at contract value 3,441
—
Other current assets 93
58

————————-
Total current assets 8,510
3,370
Non-current restricted cash 105
80
Property and equipment, net 164
164
Non-current deferred tax assets 433
504
Goodwill 5,127
4,800
Intangible assets, net 1,719
1,631
Other assets 149
173

————————-
Total assets $ 16,207 $
10,722

=========================
Liabilities
Current liabilities:
Accounts payable and accrued expenses $ 142 $
125
Section 31 fees payable to SEC 82
137
Accrued personnel costs 122
114
Deferred revenue 122
105
Other current liabilities 119
71
Deferred tax liabilities 26
23
Open clearing contracts:
Derivative positions, at fair value 4,037
2,054
Repurchase agreements, at contract value 3,441
—
Current portion of debt obligations 140
225

————————-
Total current liabilities 8,231
2,854
Debt obligations 2,181
1,867
Non-current deferred tax liabilities 698
683
Non-current deferred revenue 170
160
Other liabilities 198
199

————————-
Total liabilities 11,478
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 3,780
3,736
Common stock in treasury, at cost (796)
(10)
Accumulated other comprehensive loss (272)
(406)
Retained earnings 2,004
1,610

————————-
Total NASDAQ OMX stockholders– equity 4,718
4,932
Noncontrolling interests 11
12

————————-
Total equity 4,729
4,944

————————-
Total liabilities, Series A convertible preferred $ 16,207 $
10,722
stock and equity

=========================

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
——————————–
December September December
31, 30, 31,
2010 2010 2009
——————————–
GAAP Net Income attributable to NASDAQ OMX: $ 137 $ 101 $ 43
————————————————
Adjustments:
Professional fees 1 —
2
Technology 2 —
3
Occupancy 1 2
8
Workforce reductions 2 2
6
Merger and strategic initiatives 3 1
—
Asset retirements — 2
—
Foreign currency revaluation — (3)
—
Regulatory — —
(3)
Gain on sales of businesses — —
(12)
Impairment of unconsolidated investees — —
87

——————————–
Total Adjustments 9 4
91
Adjustment to the income tax provision to (3) (2)
(37)
reflect Non-GAAP adjustments(1)
Non-recurring tax items, net (33) (2)
2

——————————–
Total Adjustments, net of tax (27) —
56
Non-GAAP Net Income attributable to NASDAQ OMX: $ 110 $ 101 $ 99
================================

GAAP Diluted Earnings per Common Share: $ 0.69 $ 0.50 $ 0.20
————————————————
Total Adj. from Non-GAAP Net Income Above: (0.14) —
0.26

——————————–
Non-GAAP Diluted Earnings per Common Share: $ 0.55 $ 0.50 $ 0.46
================================

Three Months Ended
——————————–
December September December
31, 30, 31,
2010 2010 2009
——————————–

GAAP Operating Expenses: $ 225 $ 207 $ 220
————————————————
Adjustments:
Professional fees (1) —
(2)
Technology (2) —
(3)
Occupancy (1) (2)
(8)
Workforce reductions (2) (2)
(6)
Merger and strategic initiatives (3) (1)
—
Asset retirements — (2)
—
Foreign currency revaluation — 3
—
Regulatory — —
3

——————————–
Total Adjustments (9) (4)
(16)

——————————–
Non-GAAP Operating Expenses $ 216 $ 203 $ 204
================================

(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.
Possible table in table detected.
Object reference not set to an instance of an object.

The NASDAQ OMX GROUP, Inc.
Quarterly Key Drivers Detail
(unaudited)Three Months Ended
—————————————
December September December
31, 30, 31,
2010 2010 2009
—————————————
Market Services
Cash Equity Trading
NASDAQ securities
——————————————
Average daily share volume (in billions) 1.89 2.02
2.06
Matched market share executed on NASDAQ 27.5% 29.0%
31.1%
Matched market share executed on NASDAQ 1.8% 2.5%
2.7%
OMX BX
Market share reported to the
FINRA/NASDAQ
Trade Reporting Facility(1) 32.5% 30.4%
38.0%
Total market share (2) 62.3% 61.9%
71.8%

NYSE securities
——————————————
Average daily share volume (in billions) 4.31 4.24
4.72
Matched market share executed on NASDAQ 11.9% 13.8%
15.0%
Matched market share executed on NASDAQ 2.2% 3.5%
4.1%
OMX BX
Market share reported to the
FINRA/NASDAQ
Trade Reporting Facility(1) 30.0% 27.0%
33.2%
Total market share (2) 44.6% 44.3%
52.3%

NYSE Amex and regional securities
——————————————
Average daily share volume (in billions) 1.22 1.29
1.43
Matched market share executed on NASDAQ 17.7% 21.0%
23.5%
Matched market share executed on NASDAQ 3.2% 3.3%
2.4%
OMX BX
Market share reported to the
FINRA/NASDAQ
Trade Reporting Facility(1) 26.5% 25.1%
32.9%
Total market share (2) 48.0% 49.4%
58.8%

Total U.S.-listed equities
——————————————
Average daily share volume (in billions) 7.42 7.55
8.21
Matched share volume (in billions) 93.1 107.8
126.1
Matched market share executed on NASDAQ 16.8% 19.1%
20.6%
Matched market share executed on NASDAQ 2.3% 3.2%
3.4%
OMX BX

NASDAQ OMX Nordic and NASDAQ OMX Baltic
Markets
——————————————
Average daily number of equity trades 274,776 263,965
219,811
Average daily value of shares traded (in $ 3.2 $ 2.8 $
3.3
billions)
Derivative Trading and Clearing
U.S. Equity Options Contracts
——————————————
Total industry average daily volume (in 15.1 12.5
12.9
millions)
Matched market share:
NASDAQ OMX PHLX 26.5% 23.7%
19.4%
The NASDAQ Options Market 4.9% 5.1%
3.1%

NASDAQ OMX Nordic and NASDAQ OMX Baltic
Markets
——————————————
Average daily volume:
Options, futures and fixed-income 436,253 398,014
363,347
contracts
Equity options contracts traded on EDX — —
51,498
London(3)
Finnish option contracts traded on Eurex 99,716 124,553
86,381

NASDAQ OMX Commodities
——————————————
Clearing Turnover:
Power contracts (TWh)(4) 529 382
599
Carbon contracts (1000 tCO2)(4) 5,582 4,482
12,094

Issuer Services
NASDAQ
Initial public offerings 34 17
18
New listings (5) 54 41
64
Number of listed companies (6) 2,778 2,805
2,852
NASDAQ OMX Nordic and NASDAQ OMX Baltic
Markets
Initial public offerings 3 1
1
New listings (7) 9 4
3
Number of listed companies (8) 780 780
797

Market Technology
Order intake (in millions)(9) $ 71 $ 27 $
148
Total order value (in millions)(10) $ 495 $ 446 $
417

(1) Transactions reported to the Financial Industry Regulatory Authority, or
FINRA, FINRA/NASDAQ Trade Reporting Facility.
(2) Includes transactions executed on both NASDAQ–s, NASDAQ OMX BX–s and NASDAQ
OMX PSX–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) New listings include IPOs and represent companies listed on the exchanges
that comprise NASDAQ OMX Nordic and NASDAQ