NASDAQ OMX Announces Fourth Quarter 2009 ResultsNEW YORK, Feb 8, 2010 (GlobeNewswire via COMTEX) --
The NASDAQ OMX Group, Inc. ("NASDAQ OMX(R)") (Nasdaq:NDAQ) today reported net income attributable to NASDAQ OMX of $43 million, or $0.20 per diluted share, for the fourth quarter of 2009 compared with net income attributable to NASDAQ OMX of $60 million, or $0.28 per diluted share, in the third quarter of 2009, and net income attributable to NASDAQ OMX of $35 million, or $0.17 per diluted share, in the fourth quarter of 2008. Net income attributable to NASDAQ OMX for the full year of 2009 was $266 million, or $1.25 per diluted share.
Included in fourth quarter of 2009 results are:
-- $51 million of impairment charges related to unconsolidated investees,
net of tax;
-- $16 million in pre-tax expenses associated with occupancy sub-lease
reserves, workforce reductions, and other non-recurring items; and
-- $12 million of pre-tax gains on the sales of certain businesses.
Excluding the above items net income attributable to NASDAQ OMX calculated on a non-GAAP basis was $99 million, compared with non-GAAP net income attributable to NASDAQ OMX of $89 million for the third quarter of 2009 and $110 million for the fourth quarter of 2008. Non-GAAP diluted earnings per common share were $0.46 for the fourth quarter of 2009 compared with non-GAAP diluted earnings per common share of $0.42 for the third quarter of 2009 and $0.52 for the fourth quarter of 2008.
"We've accomplished much in the past year, completing our integration efforts and furthering the diversity of our revenue model through growth in market technology, in European derivative trading, and in fee based services," commented Bob Greifeld, NASDAQ OMX's Chief Executive Officer. "Today we are a more efficient operator with better financial flexibility, placing us in a strong position to lever our expertise in trading technology, clearing, data distribution, and corporate services. The changing dynamics of our industry are providing numerous growth opportunities and our technology leadership leaves us well positioned to swiftly capitalize on those changes to expand our business."
Highlights
-- Grew Nordic derivative volume in the fourth quarter of 2009 to 28.3
million transactions, representing an increase of nearly 18% from prior
quarter levels. Driving this growth was the transition to NASDAQ OMX of
trading activity previously done on EDX.
-- Welcomed, at the beginning of December, 34 new international members for
trading and clearing in Nordic derivatives. This represents an annual
member increase of more than 60 percent when compared to last year. A
membership at NASDAQ OMX Stockholm allows access to all Nordic equities
and fixed income derivatives products through one single trading
platform. Among its products is the OMXS30, the third most traded
domestic index in Europe.
-- Completed the first cross border merger of clearinghouses, with the
combination of the Nord Pool and Nordic clearinghouses. The combination
provided clearing capital synergies while offering the ability to
deliver enhanced services across financial derivative and commodity
products through continued development of clearing technology.
-- Together with Nord Pool Spot, launched N2EX, a marketplace for physical
UK power contracts. N2EX establishes an auction-driven reference price
based on the physical market which will be used as the basis for N2EX's
planned derivatives market later in 2010.
-- Witnessed volume growth in the European power market, with total cleared
power contracts increasing 28% from the third quarter of 2009, and 14%
from the fourth quarter of 2008.
-- Reached new market share highs in the trading of U.S. equity options
contracts. The combined market share of NASDAQ OMX PHLX and The NASDAQ
Options Market ("NOM") averaged 22% during the fourth quarter of 2009,
as PHLX averaged 19% and NOM averaged 3%, an increase of 2% when
compared to combined market share of 20% in the third quarter of 2009.
Total volume traded on these markets grew 30% in the fourth quarter of
2009 when compared to the same period last year.
-- Improved market share in trading of US equities. Market share for The
NASDAQ Stock Market grew to 21% while NASDAQ OMX BX grew to 3%, for a
combined share of 24%, up from a combined share of 22% in Q309.
-- Captured a total of 143 new listings in 2009, including 131 on The
NASDAQ Stock Market and 12 on the exchanges that comprise NASDAQ OMX
Nordic and NASDAQ OMX Baltic. New listings include a record 33 Chinese
companies, more than any other U.S. exchange. A total of 124 Chinese
companies now list on NASDAQ. Also included in 2009 new listings are 34
initial public offerings.
-- Expanded the offering of Norwegian securities to include the 30 largest
Norwegian shares and became the first regulated exchange to offer
central counterparty clearing for trading of Norwegian equities,
enabling significant cost, risk and liquidity advantages.
-- Named Outstanding Data Provider of the Year by the Financial Information
Services Division (FISD) of the Software and Information Industry
Association. The award recognizes exchanges or data providers that most
closely adhere to the FISD's best practices in customer service and
communication.
-- Selected as the primary source of real-time index values for Russell
Investments' global indexes. In order to more broadly distribute this
comprehensive, rules-based index information, NASDAQ OMX began
disseminating real-time values for the Russell Global Indexes in early
2010.
-- Expanded the Global Index Group product offering by launching 28 new
indexes in the fourth quarter of 2009, including both custom and NASDAQ
OMX indexes. In addition, product sponsors launched 7 new ETFS based on
NASDAQ OMX Indexes.
-- Announced plans to expand an agreement with Morningstar, Inc.
(Nasdaq:MORN), a leading provider of independent investment research, to
provide comprehensive analyst research reports on NASDAQ-listed
companies.
-- Signed a commercial contract with BMFBOVESPA (BMFBOVESPA:BVMF3)
regarding global distribution of market data and the provisioning of
NASDAQ OMX products and corporate services to public companies in
Brazil. NASDAQ OMX also announced plans to develop a communications
system to facilitate the routing of orders between participating brokers
located in the United States and brokers located in Brazil, subject to
required regulatory approvals and other customary conditions.
-- Renewed our regulatory services relationship with FINRA, the premier
independent regulatory services provider in the United States, and
expanded our use of FINRA to NASDAQ OMX PHLX. This illustrates NASDAQ
OMX's commitment to providing investors with access to the best
regulated markets in the world.
-- Refinanced existing debt by completing a $1 billion underwritten public
offering of 5 and 10 year senior unsecured notes and entering into new
senior unsecured credit facilities providing for up to $950 million in
borrowings, including $700 million in funded term loans and $250 million
in an unfunded revolving credit commitment. The refinancing provides
increased flexibility regarding the use of free cash, extends the
maturity date of debt obligations, and reduces interest rate risk.
Additionally, NASDAQ OMX's corporate debt was recently upgraded by both
Standard Poor's (BBB) and Moody's (Baa3). The ratings reflect an
investment grade profile from both agencies.
"The strong cash flow of our diverse business model recently provided us with an opportunity to refinance our outstanding credit facility at extremely favorable terms," noted Adena Friedman, Chief Financial Officer. "The terms of the new debt provide us with increased flexibility in our capital management decisions while reducing our interest rate exposure. Additionally, the recent upgrades of our debt ratings speak to our sound financial policy and to the fact that we delivered on the promises of our integration efforts and improved the efficiency of our operations. In 2010, our goal is to maintain this financial discipline while delivering growth to our shareholders. For the full year of 2010, our guidance for total operating expenses is to be in the range of $865 million to $885 million, including approximately $50 million in non-recurring costs."
Financial Review
Revenues
Revenues less liquidity rebates, brokerage, clearance and exchange fees ("net exchange revenues") were $369 million for the fourth quarter of 2009, an increase of $20 million, or 6%, from third quarter of 2009 results. Net exchange revenues decreased $34 million, or 8%, from fourth quarter of 2008 results.
Market Services
Market Services net exchange revenues were $240 million, an increase of 4% from the third quarter of 2009, but a decrease of 14% from the fourth quarter of 2008.
Transaction Services
Net exchange revenues from Transaction Services were $150 million for the fourth quarter of 2009, an increase of $11 million, or 8%, when compared to the third quarter of 2009, but a decrease of $30 million, or 17%, when compared to the fourth quarter of 2008.
-- Cash Equity Trading net exchange revenues were $54 million for the
fourth quarter of 2009, up $5 million, or 10%, from the third quarter of
2009 but down $40 million, or 43%, from the prior year quarter.
-- Net U.S. cash equity trading revenues increased when compared to the
third quarter of 2009 due to higher average net fees for shares matched
on NASDAQ's and NASDAQ OMX BX's trading systems and higher market share.
Somewhat offsetting the increase was a decline in industry trading
volume, which was down 12% from third quarter of 2009 levels. Revenues
decreased when compared to the prior year quarter due primarily to
declines in matched share volume and lower average net fee per share
matched on NASDAQ's trading system.
-- European cash equity trading revenues declined when compared to the
third quarter of 2009 and to the prior year quarter. The modest
decline from the third quarter of 2009 is due to lower value traded and
to fee changes that were introduced with the implementation of central
counterparty clearing during the fourth quarter of 2009. The decline
from the fourth quarter of 2008 is primarily due to a decline in value
traded, which dropped from EURO170 billion in the prior year quarter to
EURO139 billion in the fourth quarter of 2009.
-- Included in U.S. cash equity trading revenues in the fourth quarter of
2009 are $103 million in SEC Section 31 fees, compared with $94 million
in the third quarter of 2009 and $36 million in the fourth quarter of
2008. Corresponding cost of revenues, reflecting the reimbursement of
these fees to the SEC, is included in brokerage, clearance and exchange
fees.
-- Derivative trading and clearing net exchange revenues were $57 million
for the fourth quarter of 2009, up $3 million, or 6%, from both the
third quarter of 2009 and the prior year quarter.
-- Net U.S. derivative trading revenues declined when compared to the third
quarter of 2009 and to the prior year quarter, primarily due to lower
average net fees for traded contracts.
-- European derivative trading and clearing revenues increased when
compared to the third quarter of 2009 and to the fourth quarter of 2008.
Increases when compared to the third quarter of 2009 are due to
increases in clearing activity for energy contracts and to increases in
trading volume for index options and futures contracts. The increase in
trading volumes for index options and futures contracts is primarily due
to the migration of trading to NASDAQ OMX that was previously transacted
at EDX. Growth when compared to the prior year quarter is primarily due
to the inclusion of NASDAQ OMX Commodities revenues following the
October 21, 2008 closing of NASDAQ OMX's acquisition of Nord Pool ASA's
clearing, international derivatives and consulting subsidiaries, and to
increases in clearing activity for energy contracts. Also contributing
to the increase in revenues when compared to the fourth quarter of 2008
are favorable changes in the exchange rates of various currencies as
compared to the U.S. dollar.
-- Access Services revenues were $39 million for the fourth quarter of
2009, an increase of $3 million, or 8%, when compared to the third
quarter of 2009 and $7 million, or 22%, when compared to the prior year
quarter. The increase in access services revenues when compared to both
the third quarter of 2009 and to the prior year quarter is primarily due
to revised fees for access services and increased demand for co-location
services.
Market Data
Market Data revenues were $83 million for the fourth quarter of 2009, up $4 million, or 5%, when compared to the third quarter of 2009, but down $2 million, or 2%, when compared to the fourth quarter of 2008.
-- Net U.S. tape plans revenues were $33 million in the fourth quarter of
2009, up $2 million, or 6%, when compared to the third quarter of 2009
but down $4 million, or 11%, when compared to the prior year quarter.
The increase when compared to the third quarter of 2009 is due to
increases in NASDAQ's and NASDAQ OMX BX's trading and quoting market
share of U.S equities. The decline in U.S. tape plans revenues, net of
revenue sharing plans, in the fourth quarter of 2009 when compared to
the fourth quarter of 2008 is primarily due to the decline in NASDAQ's
trading and quoting market share of U.S. equities and a reduction in the
size of tape plan revenue pools.
-- U.S. market data products revenues were $30 million in the fourth
quarter of 2009, an increase of $1 million, or 3%, when compared to the
third quarter of 2009, and an increase of $3 million, or 11%, when
compared to the year ago quarter. Revenue growth when compared to the
prior year quarter is driven primarily by the growth of products such as
the NASDAQ Global Index Data Service, launched in the first quarter of
2009, and other proprietary data products.
-- European market data products revenues were $20 million in the fourth
quarter of 2009, an increase of $1 million, or 5%, when compared to the
third quarter of 2009, but a decrease of $1 million, or 5%, when
compared to the prior year quarter. The increase when compared to the
third quarter of 2009 is primarily due to changes in the exchange rates
of various currencies as compared to the U.S. dollar. The decrease when
compared to the fourth quarter of 2008 is due to declines in subscriber
populations.
Issuer Services
During the fourth quarter of 2009, Issuer Services revenues were $82 million, representing an increase of $1 million, or 1%, from the prior quarter, but a decrease of $3 million, or 4%, from the fourth quarter of 2008.
Global Listing Services
Global Listing Services revenues were $72 million for the fourth quarter of 2009, up $1 million, or 1%, from the third quarter of 2009, but down $3 million, or 4%, when compared to the fourth quarter of 2008. The increase when compared to the third quarter of 2009 is primarily due to higher market capitalization values for European listed equities, which in turn result in higher European listing fees. Decreases in revenues from the prior year period are due primarily to the fourth quarter of 2009 sale of Carpenter Moore, NASDAQ OMX's insurance brokerage business. Also contributing to the decline are lower U.S. annual renewal fees resulting from fewer listed companies.
Market Technology
Market Technology revenues were $44 million for the fourth quarter of 2009, up $8 million, or 22%, when compared to the third quarter of 2009, and up $9 million, or 26%, when compared to the fourth quarter of 2008. Revenue increases are primarily due to the increased deliveries of market technology contracts. Also contributing to the increases are changes in the exchange rates of various currencies as compared to the U.S. dollar.
Operating Expenses
Total non-GAAP operating expenses increased $7 million, or 4%, to $204 million from $197 million in the third quarter of 2009, but decreased $9 million, or 4%, from $213 million in the prior year quarter. The increase in expenses when compared to the third quarter of 2009 is primarily driven by higher compensation expense and increased marketing and advertising spending. The decrease in expenses from the fourth quarter of 2008 was realized through a reduction in compensation expense and lower general, administrative and other expense. These reductions were driven by successful integration efforts associated with NASDAQ's business combination with OMX and acquisition of the Philadelphia Stock Exchange.
Net Interest Expense
Net interest expense was $22 million for the fourth quarter of 2009, compared with $23 million for the third quarter of 2009 and $28 million for the fourth quarter of 2008. Included in interest expense for the fourth quarter of 2009 is $15 million in interest expense, $3 million of non-cash expense associated with accretion of 2.5% convertible notes, $3 million in non-cash debt amortization expenses, and $4 million in other related fees. Interest income for the fourth quarter of 2009 was $3 million.
Earnings Per Share
On a non-GAAP basis, fourth quarter 2009 earnings per diluted share were $0.46 as compared to non-GAAP earnings per diluted share of $0.42 in the third quarter of 2009 and non-GAAP earnings per diluted share of $0.52 in the prior year quarter. NASDAQ OMX's weighted average shares outstanding used to calculate diluted earnings per share was 215 million for the fourth quarter of 2009 compared with 215 million for the third quarter of 2009 and 214 million for the fourth quarter of 2008.
In June 2009, NASDAQ OMX filed an application for an advance tax ruling with the Swedish Tax Council for Advanced Tax Rulings. The application was filed to confirm whether certain interest expense is deductible for Swedish tax purposes under legislation that became effective on January 1, 2009. We expect to receive a favorable response from the Swedish Tax Council for Advance Tax Rulings. We recorded the Swedish tax benefit as described above in our condensed consolidated financial statements. In the fourth quarter of 2009, we recorded a tax benefit of $5 million, or $0.02 per diluted share. For the full year of 2009, we recorded a tax benefit of $19 million, or $0.09 per diluted share. We expect to record recurring quarterly tax benefits of $4 million to $5 million with respect to this issue for the foreseeable future.
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 3,700 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 Twitter (http://twitter.com/nasdaq) and Facebook (http://www.facebook.com/pages/NASDAQcom/13881287428).
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 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
----------------------------- ------------------
December September December December December
31, 30, 31, 31, 31,
2009 2009 2008 2009 2008
-------- --------- -------- -------- --------
Revenues
Market Services revenues $686 $691 $901 $2,929 $3,176
Cost of revenues:
Liquidity rebates (308) (329) (528) (1,475) (1,744)
Brokerage, clearance and
exchange fees (138) (132) (94) (481) (446)
-------- --------- -------- -------- --------
Total cost of revenues (446) (461) (622) (1,956) (2,190)
-------- --------- -------- -------- --------
Total Market Services revenues
less liquidity rebates,
brokerage, clearance and
exchange fees 240 230 279 973 986
Issuer Services revenues 82 81 85 324 343
Market Technology revenues 44 36 35 145 119
Other revenues 3 2 4 11 12
-------- --------- -------- -------- --------
Total revenues less liquidity
rebates, brokerage, clearance
and exchange fees 369 349 403 1,453 1,460
-------- --------- -------- -------- --------
Operating Expenses
Compensation and benefits 110 99 106 412 401
Marketing and advertising 7 3 6 15 19
Depreciation and amortization 27 27 27 104 93
Professional and contract
services 20 20 19 76 72
Computer operations and data
communications 16 14 13 58 54
Occupancy 26 19 17 81 65
Regulatory 3 10 7 32 29
Merger expenses -- 5 10 17 25
General, administrative and
other 11 21 18 55 62
-------- --------- -------- -------- --------
Total operating expenses 220 218 223 850 820
-------- --------- -------- -------- --------
Operating income 149 131 180 603 640
Interest income 3 3 7 13 35
Interest expense (25) (26) (35) (102) (97)
Dividend and investment income -- 1 3 2 8
Loss on sale of investment
security -- -- -- (5) --
Gain on sales of businesses 12 -- -- 12 --
Income (loss) from
unconsolidated investees, net (87) -- -- (107) 27
Debt conversion expense -- (25) -- (25) --
Asset impairment charges -- -- (35) -- (42)
Loss on foreign currency
contracts, net -- -- (47) -- (58)
-------- --------- -------- -------- --------
Income before income taxes 52 84 73 391 513
Income tax provision 10 25 38 128 198
-------- --------- -------- -------- --------
Net income 42 59 35 263 315
Net (income) loss attributable
to noncontrolling interests 1 1 -- 3 (1)
-------- --------- -------- -------- --------
Net income attributable to
NASDAQ OMX $43 $60 $35 $266 $314
======== ========= ======== ======== ========
Basic and diluted earnings per
share:
Basic earnings per share $0.20 $0.30 $0.17 $1.30 $1.65
======== ========= ======== ======== ========
Diluted earnings per share $0.20 $0.28 $0.17 $1.25 $1.55
======== ========= ======== ======== ========
Weighted-average common shares
outstanding for earnings per
share:
Basic 211 203 201 205 190
Diluted 215 215 214 215 205
The NASDAQ OMX Group, Inc.
Revenue Detail
(in millions)
(unaudited)
Three Months Ended Year Ended
----------------------------- ------------------
December September December December December
31, 30, 31, 31, 31,
2009 2009 2008 2009 2008
-------- --------- -------- -------- --------
MARKET SERVICES
Transaction Services
Cash Equity Trading
Revenues:
U.S. cash equity trading $446 $461 $675 $2,010 $2,412
Cost of revenues:
Liquidity rebates (286) (310) (516) (1,394) (1,718)
Brokerage, clearance and
exchange fees (130) (127) (93) (465) (444)
-------- --------- -------- -------- --------
Total U.S. cash equity
cost of revenues (416) (437) (609) (1,859) (2,162)
-------- --------- -------- -------- --------
Net U.S. cash equity
trading revenues 30 24 66 151 250
European cash equity trading 24 25 28 99 116
-------- --------- -------- -------- --------
Total net cash equity
trading revenues 54 49 94 250 366
-------- --------- -------- -------- --------
Derivative Trading and
Clearing Revenues:
U.S. derivative trading 61 58 48 232 93
Cost of revenues:
Liquidity rebates (22) (19) (12) (81) (26)
Brokerage, clearance and
exchange fees (8) (5) (1) (16) (2)
-------- --------- -------- -------- --------
Total U.S. derivative cost
of revenues (30) (24) (13) (97) (28)
-------- --------- -------- -------- --------
Net U.S. derivative
trading revenues 31 34 35 135 65
European derivative trading
and clearing revenues 26 20 19 87 64
-------- --------- -------- -------- --------
Total net derivative
trading and clearing
revenues 57 54 54 222 129
Access Services Revenues 39 36 32 138 112
-------- --------- -------- -------- --------
Total Transaction
Services revenues less
liquidity rebates,
brokerage, clearance and
exchange fees 150 139 180 610 607
-------- --------- -------- -------- --------
Market Data
Net U.S. tape plans 33 31 37 128 146
U.S. market data products 30 29 27 116 107
European market data
products 20 19 21 78 77
-------- --------- -------- -------- --------
Total Market Data revenues 83 79 85 322 330
-------- --------- -------- -------- --------
Broker Services 6 9 11 32 41
-------- --------- -------- -------- --------
Other Market Services 1 3 3 9 8
-------- --------- -------- -------- --------
Total Market Services
revenues less liquidity
rebates, brokerage,
clearance and exchange fees 240 230 279 973 986
-------- --------- -------- -------- --------
ISSUER SERVICES
Global Listing Services:
Annual renewal fees 29 29 31 117 125
Listing of additional shares
fees 10 9 10 37 40
Initial listing fees 5 5 5 20 22
-------- --------- -------- -------- --------
Total U.S. listing fees 44 43 46 174 187
European listing fees 12 11 12 45 48
Corporate services 16 17 17 66 64
-------- --------- -------- -------- --------
Total Global Listing
Services 72 71 75 285 299
Global Index Group 10 10 10 39 44
-------- --------- -------- -------- --------
Total Issuer Services
revenues 82 81 85 324 343
-------- --------- -------- -------- --------
MARKET TECHNOLOGY
License, support and project
revenues 34 28 22 110 86
Facility management services 9 7 9 30 29
Other revenues 1 1 4 5 4
-------- --------- -------- -------- --------
Total Market Technology
revenues 44 36 35 145 119
-------- --------- -------- -------- --------
Other 3 2 4 11 12
-------- --------- -------- -------- --------
Total revenues less liquidity
rebates, brokerage,
clearance and exchange fees $369 $349 $403 $1,453 $1,460
-------- --------- -------- -------- --------
The NASDAQ OMX Group, Inc.
Consolidated Balance Sheets
(in millions)
December December
31, 31,
2009 2008
----------- --------
Assets (unaudited)
Current assets:
Cash and cash equivalents $594 $374
Restricted cash 60 141
Financial investments, at
fair value 308 227
Receivables, net 301 339
Deferred tax assets 25 27
Market value, outstanding
derivative positions 2,054 4,122
Other current assets 112 198
----------- --------
Total current assets 3,454 5,428
Non-current restricted cash 50 50
Property and equipment, net 164 183
Non-current deferred tax
assets 504 659
Goodwill 4,800 4,492
Intangible assets, net 1,631 1,583
Other assets 119 357
----------- --------
Total assets $10,722 $12,752
=========== ========
Liabilities
Current liabilities:
Accounts payable and
accrued expenses $119 $242
Section 31 fees payable to
SEC 137 49
Accrued personnel costs 125 157
Deferred revenue 105 98
Other accrued liabilities 79 165
Deferred tax liabilities 23 19
Market value, outstanding
derivative positions 2,054 4,122
Current portion of debt
obligations 225 225
----------- --------
Total current liabilities 2,867 5,077
Debt obligations 1,867 2,299
Non-current deferred tax
liabilities 683 696
Non-current deferred revenue 160 155
Other liabilities 186 222
----------- --------
Total liabilities 5,763 8,449
Commitments and contingencies
Series A convertible
preferred stock 15 --
Equity
NASDAQ OMX stockholders'
equity:
Common stock 2 2
Preferred stock -- --
Additional paid-in capital 3,731 3,569
Common stock in treasury,
at cost (10) (10)
Accumulated other
comprehensive loss (406) (619)
Retained earnings 1,610 1,344
----------- --------
Total NASDAQ OMX
stockholders' equity 4,927 4,286
Noncontrolling interests 17 17
----------- --------
Total equity 4,944 4,303
----------- --------
Total liabilities, Series A
convertible preferred stock
and equity $10,722 $12,752
=========== ========
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)
Three Months Ended
-----------------------------
December September December
31, 2009 30, 2009 31, 2008
-------- --------- --------
GAAP Net Income attributable
to NASDAQ OMX:
---------------------------- $43 $60 $35
Adjustments:
Professional fees 2 2 --
Technology 3 -- --
Occupancy 8 -- --
Regulatory (3) -- --
Gain on sales of businesses (12) -- --
Impairment of
unconsolidated investees 87 -- --
Workforce reductions 6 4 --
Asset retirements -- 10 --
Debt conversion expense -- 25 --
Merger expenses -- 5 10
Asset impairment charge -- -- 35
Loss on foreign currency
contracts, net -- -- 47
-------- --------- --------
Total Adjustments 91 46 92
Adjustment to the income
tax provision to reflect
Non-GAAP adjustments(1) (37) (7) (17)
Non-recurring tax items,
net 2 (10) --
-------- --------- --------
Total Adjustments, net of
tax 56 29 75
Non-GAAP Net Income
attributable to NASDAQ OMX: $99 $89 $110
======== ========= ========
GAAP Diluted Earnings per
Common Share: $0.20 $0.28 $0.17
Total Adj. from Non-GAAP
Net Income Above: 0.26 0.14 0.35
-------- --------- --------
Non-GAAP Diluted Earnings
per Common Share: $0.46 $0.42 $0.52
======== ========= ========
Three Months Ended
-----------------------------
December September December
31, 2009 30, 2009 31, 2008
-------- --------- --------
GAAP Operating Expenses:
---------------------------- $220 $218 $223
Other Adjustments:
Professional fees (2) (2) --
Technology (3) -- --
Occupancy (8) -- --
Regulatory 3 -- --
Workforce reductions (6) (4) --
Asset retirements -- (10) --
Merger expenses -- (5) (10)
-------- --------- --------
Total Adjustments (16) (21) (10)
-------- --------- --------
Non-GAAP Operating Expenses $204 $197 $213
======== ========= ========
(1) We determine the tax effect of each item based on the
tax rules in the respective jurisdiction where the
transaction occurred.
The NASDAQ OMX Group, Inc.
Reconciliation of GAAP to Non-GAAP Operating Income
(in millions)
(unaudited)
Three Months Ended
-----------------------------
December September December
31, 30, 31,
2009 2009 2008
-------- --------- --------
GAAP Operating Income:
----------------------- $149 $131 $180
Other Adjustments:
Professional fees 2 2 --
Technology 3 -- --
Occupancy 8 -- --
Regulatory (3) -- --
Workforce reductions 6 4 --
Asset retirements -- 10 --
Merger expenses -- 5 10
-------- --------- --------
Total Adjustments 16 21 10
-------- --------- --------
Non-GAAP Operating
Income $165 $152 $190
======== ========= ========
------------------------------------------------------
Total revenues less
liquidity rebates,
brokerage, clearance
and exchange fees $369 $349 $403
Non-GAAP Operating
Margin (1) 45% 44% 47%
------------------------------------------------------
(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
-----------------------------
December September December
31, 30, 31,
2009 2009 2009
-------- --------- --------
Market Services
Cash Equity Trading
NASDAQ securities
Average daily share volume (in
billions) 2.06 2.25 2.32
Matched market share executed on
NASDAQ 31.1% 30.4% 42.8%
Matched market share executed on
NASDAQ OMX BX 2.7% 2.0% --
Market share reported to the
FINRA/NASDAQ
Trade Reporting Facility(1) 38.0% 39.3% 25.4%
Total market share (2) 71.8% 71.8% 68.3%
NYSE securities
Average daily share volume (in
billions) 4.72 5.53 6.01
Matched market share executed on
NASDAQ 15.0% 14.1% 22.0%
Matched market share executed on
NASDAQ OMX BX 4.1% 3.1% --
Market share reported to the
FINRA/NASDAQ
Trade Reporting Facility(1) 33.2% 35.4% 21.7%
Total market share (2) 52.3% 52.6% 43.7%
NYSE Amex and regional securities
Average daily share volume (in
billions) 1.43 1.53 2.17
Matched market share executed on
NASDAQ 23.5% 22.2% 34.8%
Matched market share executed on
NASDAQ OMX BX 2.4% 2.1% --
Market share reported to the
FINRA/NASDAQ
Trade Reporting Facility(1) 32.9% 34.4% 17.2%
Total market share (2) 58.8% 58.6% 52.0%
Total U.S.-listed equities
Matched share volume (in billions) 126.1 131.4 196.6
Matched market share executed on
NASDAQ 20.6% 19.4 29.2
Matched market share executed on
NASDAQ OMX BX 3.4% 2.7% --
NASDAQ OMX Nordic and NASDAQ OMX
Baltic Markets
Average daily number of equity
trades 219,811 189,002 250,497
Average daily value of shares traded
(in billions) $ 3.3 $ 3.0 $ 3.6
Derivative Trading and Clearing
U.S. Equity Options Contracts
Total industry average daily volume
(in millions) 12.9 13.2 12.0
Matched market share:
NASDAQ OMX PHLX 19.4% 17.0% 16.9%
The NASDAQ Options Market 3.1% 3.2% 1.8%
NASDAQ OMX Nordic and NASDAQ OMX
Baltic Markets
Average daily volume:
Equity options and fixed-income
contracts 363,347 298,849 382,170
Equity options contracts traded on
EDX London 51,498 87,636 136,446
Finnish option contracts traded on
Eurex 86,381 65,779 73,365
NASDAQ OMX Commodities
Clearing Turnover:
Power contracts (TWh)(3) 600 480 531
Carbon contracts (1000 tCO2)(3) 12,155 13,745 18,882
Issuer Services
NASDAQ
Initial public offerings 18 12 1
New listings (4) 64 33 29
Number of listed companies (5) 2,852 2,863 3,023
NASDAQ OMX Nordic and NASDAQ OMX
Baltic Markets
Initial public offerings 1 -- 3
New listings 3 2 10
Number of listed companies (6) 797 800 824
Market Technology
Order intake (in millions)(7) $ 148 $ 37 $ 30
Total order value (in millions)(8) $ 417 $ 318 $ 427
(1) Transactions reported to the Financial Industry Regulatory
Authority, or 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) Transactions executed on Nord Pool ASA and reported for clearing
to NASDAQ OMX Commodities measure by Terawatt hours (TWh) and one
thousand metric tons of carbon dioxide (1000 tCO2).
(4) 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.
(5) Number of listed companies for NASDAQ at period end, including
separately listed ETFs.
(6) 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.
(7) Total contract value of orders signed.
(8) Represents total contract value of orders signed that are yet to
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:
Bethany Sherman
+1.212.401.8714
Anna Rasin
+46(8)405.6612
Investor Relations:
Vincent Palmiere
+1.212.401.8742
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