10-QPeriod: Q2 FY2009

NASDAQ, INC. Quarterly Report for Q2 Ended Jun 30, 2009

Filed August 7, 2009For Securities:NDAQ

Summary

The NASDAQ OMX Group, Inc. (NDAQ) reported its financial results for the quarter and six months ended June 30, 2009. Total revenues less liquidity rebates, brokerage, clearance, and exchange fees decreased by 3.4% to $367 million in the second quarter compared to the prior year, impacted by foreign exchange. For the first six months, these revenues increased by 11.7% to $735 million, benefiting from operational growth, particularly in derivative trading. Net income for the quarter was $69 million, or $0.33 per diluted share, down from $100 million, or $0.47 per diluted share, in the same period last year. The company's balance sheet showed total assets of $11.66 billion and total equity of $4.51 billion as of June 30, 2009. Cash flow from operations remained steady at $224 million for the first six months. The company faced a challenging economic environment, with revenue from U.S. cash equity trading seeing a decline in the second quarter, though derivative trading revenues showed significant growth, bolstered by the inclusion of NASDAQ OMX PHLX's results. Issuer Services revenue experienced a decrease, largely due to fewer new listings and a decline in the market capitalization of Nordic issuers. The company continued its integration efforts following significant acquisitions in 2008, such as OMX AB and PHLX, which impacted operating expenses. Despite revenue pressures, the company maintained a strong liquidity position and remained compliant with its debt covenants.

Financial Statements
Beta

Key Highlights

  • 1Revenues less liquidity rebates, brokerage, clearance and exchange fees decreased 3.4% to $367 million for Q2 2009, but increased 11.7% to $735 million for the first six months of 2009 compared to the prior year.
  • 2Net income attributable to NASDAQ OMX for Q2 2009 was $69 million ($0.33/share diluted), down from $100 million ($0.47/share diluted) in Q2 2008.
  • 3Operating expenses decreased 7.6% to $208 million in Q2 2009, primarily due to favorable foreign exchange impacts and cost-saving programs.
  • 4Cash provided by operating activities was $224 million for the first six months of 2009, largely consistent with $220 million in the prior year.
  • 5The company's balance sheet shows total assets of $11.66 billion and total equity of $4.51 billion as of June 30, 2009.
  • 6Significant integration of acquisitions from 2008 (OMX AB, PHLX) continued to influence operating results and expenses.
  • 7The company generated a $5 million loss from the sale of an investment security (Oslo Børs) and an $18 million loss from other unconsolidated investees in the second quarter, impacting profitability.

Frequently Asked Questions

For the second quarter of 2009, revenues less liquidity rebates, brokerage, clearance and exchange fees decreased by 3.4% to $367 million, impacted by foreign exchange. However, for the first six months of 2009, these revenues increased by 11.7% to $735 million, driven by operational growth, particularly in derivative trading and the full inclusion of OMX AB's results.

Net income attributable to NASDAQ OMX for the second quarter of 2009 was $69 million, or $0.33 per diluted share, a decrease from $100 million, or $0.47 per diluted share, in the same period of 2008. For the first six months, net income was $163 million, or $0.77 per diluted share, down from $220 million, or $1.14 per diluted share, in the comparable period of 2008.

As of June 30, 2009, NASDAQ OMX reported total assets of $11.66 billion and total equity of $4.51 billion. Total liabilities stood at $7.15 billion. Cash flow from operating activities for the first six months of 2009 was $224 million, which was relatively stable compared to $220 million in the prior year, indicating sustained operational cash generation.

Operating expenses decreased by 7.6% to $208 million in the second quarter of 2009, primarily due to a favorable foreign exchange impact of $23 million and ongoing cost-saving initiatives. For the first six months, operating expenses increased by 11.1% to $411 million, largely due to the full inclusion of expenses from the OMX AB business combination and the NASDAQ OMX PHLX acquisition.