Nasdaq OMX Q2 income soars

For comparison purposes net income and dilutive earnings per share for the second quarter of 2008 are presented on a non-GAAP basis and exclude merger expenses and gains from foreign currency contracts. Net income and dilutive earnings per share for earlier periods are presented on a pro-forma, non-GAAP basis that reflect the financial results of both NASDAQ and OMX as if they were a combined company for the periods presented and exclude merger expenses, gains (losses) from foreign currency contracts, and capital gains from shares in equity investments. For the second quarter of 2008 net income on a non-GAAP basis was $101.8 million, or $0.48 per diluted share, an increase when compared to pro forma non-GAAP net income of $77.2 million, or $0.38 per diluted share, for the second quarter of 2007. Second quarter 2008 non-GAAP net income also increased when compared to pro forma non-GAAP net income of $96.7 million, or $0.45 per diluted share, for the first quarter of 2008. The remaining results are presented on a pro forma basis unless otherwise noted.

Total revenues were $821.5 million in the second quarter of 2008. Revenues less liquidity rebates, brokerage, clearance and exchange fees ("net exchange revenues") were $380.2 million for the second quarter of 2008, an increase of $43.9 million, or 13.1%, from the second quarter of 2007, and a slight decrease of $1.3 million, or 0.3% from the first quarter of 2008.

"NASDAQ OMX delivered solid results during the quarter on the strength of our diversified business model," commented Bob Greifeld, Chief Executive Officer for NASDAQ OMX. "We've made excellent progress on the integration of OMX and now expect this transaction to accrete in first quarter of 2009, significantly ahead of schedule. Driving this acceleration is our confidence in realizing the $100 million expense synergy target by the first anniversary of closing the deal. And the integration of our most recent acquisition, the Philadelphia Stocadelphia Stock Exchange, is also well underway and is expected to accrete to our shareholders by the end of 2008. As always, we will continue to follow our long-standing operating philosophy of leveraging massive scale against the extreme efficiency of our core technology."

Recent Highlights

• Completed the acquisition of the Philadelphia Stock Exchange, expanding NASDAQ OMX's presence in the derivatives market. The Philadelphia Stock Exchange, renamed NASDAQ OMX PHLX, the third largest options market in the U.S., will operate as a distinct market alongside The NASDAQ Options Market ("NOM"). With this
  transaction, NASDAQ OMX has a combined market share of approximately 17.0% in the U.S. equity options market between its two markets and a much larger footprint in global derivatives.
• Maintained NASDAQ's leadership position as the largest single pool of liquidity in which to trade U.S.-listed equities, matching 29.6% of all volume for the second quarter of 2008. Total volume matched on NASDAQ grew 34.1% from the second quarter of 2007.
  NASDAQ also achieved new market share highs in the trading of NYSE-listed securities, matching 22.1% of volume during the quarter. And during the month of July, for the first time NASDAQ captured more trading in NYSE-listed securities than the New York
  Stock Exchange on certain trading days.
• NASDAQ OMX continued the success of its Market Technology business as it was selected as the technology provider for the Tokyo Commodity Exchange (TOCOM) and the Hong Kong Mercantile Exchange (HKMEx). TOCOM is Japan's largest commodity exchange with more than 75% market share, and lists commodities futures and options
  contracts, including metals, oil and rubber. HKMEx is a new commodity exchange that will offer uniquely-structured contracts to the international and domestic trading community.
• The NASDAQ Closing Cross reached a record day in the quarter as it was used to calculate the entire family of U.S. Russell indexes during their annual reconstitution. Approximately 893.3 million shares representing a record $12.0 billion were executed in the Closing Cross.
• The NOM, which began operations March 31, 2008, completed its first full quarter of operations. NOM is an electronic equity and index options market and the first options trading platform to offer true price/time priority. This market now regularly trades approximately 175,000 contracts per day, representing more than 1.0% of the total market.
• NASDAQ became the first U.S. stock exchange to facilitate universal, free access to real-time trade data with the launch of "NASDAQ Last Sale," -- or the last quoted price -- together with CNBC, Google, The Wall Street Journal Digital Network and Xignite.
• NASDAQ OMX's pan European market, now known as NASDAQ OMX Europe, selected European Multilateral Clearing Facility (EMCF), a wholly-owned subsidiary of Fortis, an international financial services provider, to deliver clearing services for NASDAQ OMX
  Europe. NASDAQ OMX Europe also launched proximity services, often known as "co-location," enabling participants to locate their trading engines on-site in order to enhance trading speed. NASDAQ OMX Europe is expected to begin operations in September.
• NASDAQ OMX attracted 54 new listings in the second quarter of 2008, with 42 new listings in the U.S. and 12 in the Nordic market. Included were 14 switches from the American Stock Exchange, bringing the total for the year to 32. A notable listing in the
  second quarter is the switch from the New York Stock Exchange of CA Inc. (Nasdaq:CA), a leading independent IT management software company. CA Inc. became the first NYSE-listed company to transfer to NASDAQ and keep its two letter ticker symbol. Also, in July, CME Group (Nasdaq:CME) listed its common stock solely on The NASDAQ Global Select Market, ceasing its listing on the New York Stock Exchange.
• During the quarter NASDAQ OMX introduced 19 new and innovative indexes, such as the NASDAQ OMX Middle East North Africa Index (Nasdaq:QMEA), an index comprised of the largest and most liquid companies domiciled in Middle Eastern and North African (MENA)
  countries. And in partnership with Clean Edge, Inc., NASDAQ OMX introduced the NASDAQ OMX Clean Edge(r) Global Wind Energy Index (Nasdaq:QWND), a new benchmark for the global wind energy sector that includes companies that are primarily manufacturers, developers, distributors, installers, and users of energy derived from wind sources.

"When looking at our results on a pro-forma non-GAAP basis, we delivered strong net income growth both sequentially and year-over-year," said David Warren, NASDAQ OMX's Chief Financial Officer. "Our integration with OMX is moving forward better than expected and the integration of PHLX is well underway despite closing the transaction only two weeks ago. These integrations, coupled with the planned acquisitions of the Boston Stock Exchange and certain assets of Nord Pool, provide us with a platform to drive continued efficiencies and improved performance this year and well into 2009 and beyond."

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