nasdaq q307 investor presentation

8/14/2019 Nasdaq Q307 Investor Presentation

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Copyright 2006, The Nasdaq Stock Market, Inc. All rights reserved. 1

The NASDAQ Stock Market

Investor Presentation

Third Quarter 2007

Copyright 2006, The Nasdaq Stock Market, Inc. All rights reserved.


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Leveraging Proven Strengths to Grow Profits

Opportunities

Growth in Equity Trading

Options Trading

Portal Market

Expanding Value-added IssuerServices

Global expansion and consolidations

Technology Leadership

Customer Focus

Efficient Operator

Proven Integrator

Strengths

combination


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Delivering Performance Improving Profits

0

20

40

60

80

100

120

3 Q05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2 Q07

0%

10%

20%

30%

40%

50%

60%

Operating Income

Operating Margin

104.1%49.8%24.4%Operating Margin

238.0%$56.1$16.6Net Income

172.7%99.041.8Operating Income

(26.0)%99.7134.8Total Expenses

16.1%198.7171.1Net Revenue

% Var2Q072Q06NASDAQ has successfully delivered on

financial and operating objectives resulting

in improved performance and profitability

Net revenue has increased for11 consecutive quarters overall

growth of73.1%

Operating margins have improved

dramatically (7.8)% in 3Q04 to 49.8%

in 2Q07

Net Revenue

0

50

100

150

200

250

3Q04 1Q05 3Q05 1Q06 3Q06 1Q07

CAGR=2

2.1%


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NASDAQ is Growing Volumes and Market Share

Structural changes including Reg NMS are providing opportunities for volume

growth and competition for trading NYSE-listed stocks.

- NASDAQ is now thesingle largest poolof liquidity for trading cash equities.

- CAGR in average daily matched volume for the past 6 quarters is 27%

0%

5%

10%

15%

20%

Jun- 05 Dec- 05 Jun- 06 Dec- 06 Jun- 07

1.12

1.31 1.35 1.341.56

1.61

1.27

4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07

Average Daily U.S. Equity Matched VolumeAverage Daily U.S. Equity Matched Volume NYSENYSE--Listed Matched Market ShareListed Matched Market Share

(billions)

Represents average daily share volume for U.S. equities

matched on Nasdaq execution systems


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Entering Derivatives with NASDAQ Option Platform

Growth in equity and index options contracts is strong, with volumes

growing nearly 30% year-over-year.

NASDAQ on track to launch an equity and index Options exchange in 2H

2007

This is an opportunity to take advantage ofmarket structure changes and

to leverage NASDAQs existing equity trading technology and

customer network

- Market Structure - The SEC has recently implemented a pilot for tradingoptions in penny increments which is moving the market towards an

order driven market from a quote driven market.

- Technology NASDAQs platform used to trade cash equities will be

leveraged to trade equity and index options.

- Customer Network - Existing technology network that links marketparticipants to NASDAQ will be used to connect them to NASDAQs

options market


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Portal Market

NASDAQ is the only US market with public and private capital formation

solutions

Creating a system to negotiate and trade 144A

securities among qualified Broker Dealers and

Institutional Buyers, bringing liquidity and

transparency to the market

ConceptConceptConcept

Global capital raised pursuant to rule 144A debt and

equity offerings exceeded $1.5 trillion in 2006*MarketMarketMarket

144A capital formation has tripled since 2002GrowthGrowthGrowth

* Global capital raised in conjunction with a 144a tranche (source Thompson Financial)

In 2006 seven of the top ten IPOs globally did a

144A tranche in conjunction with their offering


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Industry Leading Technology

Transaction Speed 1 second 1 millisecond

Transaction Peak Rates 1,000 tps. 200,000 tps.

System Reliability 99.98+% 99.98+%

State of the art platform is fast, scalable and reliable

Sub millisecond transaction speeds are fastest in the industry

Fully redundant data centers with hot-hot disaster recovery

Capacity to trade all U.S. listed equities

2001 2007


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Investment in London Stock Exchange

NASDAQ announced that it is exploring alternatives to divest its 30.5%

stake in the London Stock Exchange.

At the end of 2Q07 the carrying cost of the investment was approximately

$1.3 billion and the market value was approximately $1.6 billion.

NASDAQ will use approximately $1 billion of proceeds from any sale to

retire all outstanding senior term debt.

Remaining proceeds will be used to repurchase shares of NDAQ.

NASDAQ estimates that selling the stake will increase its stand-alone

earnings per share for 2008 by approximately $0.30 to $0.35.


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Leading global securities exchange

World leading technology provider

Global visibility for issuers

Competitive derivatives market offering

Enhanced strategic opportunities

Significant synergy potential

Leading U.S. exchange

#1 in U.S. IPOs andtransaction volume

Leading global brand

Worlds most efficienttrading engine

Efficient Operator

Successful integrator

Industry Leading Innovators are Combining

Group

Home to leadingcompanies

Worlds leading exchange

technology provider 3rd largest equity

derivatives exchange

Track record of successfulcross-border integration

The


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The Combination Creates an Exchange Company withMulti-Asset, Multi-Service Capabilities Across the Globe

Cash Equities

Derivatives

Commodities

Derivatives

Commodities

OTC

Companies

Warrants,ETFs

Funds

Bonds

CorporateClientservices

Dissemination

Equities

Derivatives Market

Analytics

Market Data

CashEquities

Derivatives

MutualFunds

Commodities

License

FacilityManagement

Network

BusinessProcessOutsourcing(BPO)

Trading Clearing Listing InformationServices GlobalTechnology


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NASDAQ OMX will have Geographic and Product

Diversification

Asia/Australia5%

US55%

Nordic26%

Rest of Europe14%

Revenues by RegionRevenues by Region Revenues by Product SegmentRevenues by Product Segment

Cash trading31%

Listings21%

Market data18%

Derivatives6%

Technology17%

Other7%

Source: 2006 NASDASQ and OMX data. Represents Pro-forma revenues

Note: OMX revenues converted at SEK/$ exchange rate of 6.665 as of July 11, 2007


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NASDAQ OMX Will Create the Worlds Premier Listing

Exchange

#1 in global listing (3,936 listings)(1)

#2 in market capitalization of listed

companies ($5.5 trillion)(1)

Diverse listings across all sectors

3,936 3,896

3,525 3,447 3,273

1,896 1,7061,196

761

2,425

NASDAQ OMX

Group

TSX Group NYSE/Euronext BME London Tokyo SE Australian

Exchange

Korea

Exchange

Hong Kong

Exchanges

Deutsche

Boerse

Sources:

(1) World Federation of Exchanges. As of 06/30/2007

(2) NYSE Euronext June data from July 10, 2007 press release

Total Number of Listings of Major Exchanges (1,2)Health Care

16%

Telecom. & Info.

Technology25%

Financials24%

Industrials13%

Energy & Utilities3%

Consumer16%

Materials3%

Sectors


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: A Highly Synergistic Combination

Shared Management

Vision

Relentless focus on continuous

innovation and growth

Shared Strategy of

Developing World Class

Technology as a

Competitive Strength

Shared Commitment to

Delivering Growth and

Creating Shareholder

Value

YOY net income growth of 238% in2Q 07

11 consecutive quarters of netrevenue growth

4 year operating profit CAGR of77%

Focus on cost efficiency Excludes discontinued operations

Industry leading execution speeds

Multi-asset processing capability

High capacity levels

Highly efficient operations


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Market Technology Partners and Customers in more than

50 countries


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Approx. $150M in Net Revenue and Cost synergies

Cost (1)

Synergies$100M

Revenue (1)

Synergies$50M

Transaction Services

Operations & Technology

European sales of NASDAQ products

U.S. broker-dealers buy OMX data

New products including index data feeds

Increased velocity on OMXs platform

Increased derivatives volume

Capitalizing on regulatory change

Dual listings

Access to U.S. private placement market via Portal

Higher share of growth in company listings

Cross-selling of Corporate Client Services

Integrate systems and platforms

Merging US operations

Leverage Genium platform

Consolidate real estate

Rationalization of overlapping functions andservices

Information Services

Issuer Services

Non-Technology

(1)

One-off pre-tax costs to achieve synergies are expected to be $150M over 2 years


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Proven Integration Capabilities

BRUT 2004

Carpenter Moore 2005

INET 2005

Shareholder.com 2006

Prime Zone 2006

Reykjavik 2006

Computershare MT 2006

Copenhagen 2005

Vilnius 2004

Tallinn 2003

Riga 2003

Helsinki 2003

Directors Desk 2007

nasdaq q307 investor presentation

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