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Q4 2008 Earnings Call

February 26, 2009 8:00 am ET


Vincent Palmiere - Vice President Investor Relations

Bob Greifeld – Chief Executive Officer

David Warren - Chief Financial Officer

Magnus Böcker – President

Ed Knight - General Counsel


Dan Fannon - Jefferies

Roger Freeman – Barclays Capital

Rich Repetto - Sandler O'Neill

Rob Rutschow - Deutsche Bank

Bob Napoli – Piper Jaffray

Mike Vinciquerra - BMO Capital Markets

Mike Carrier – UBS

Howard Chen – Credit Suisse



(Operator Instructions) Welcome to the NASDAQ Fourth Quarter 2008 Earnings Results Conference Call. At this time I’d like to turn the conference over to the Vice President of Investor Relations, Mr. Vincent Palmiere.

Vincent Palmiere

Thanks for joining us this morning to discuss NASDAQ OMX's fourth quarter and full year 2008 results. Joining me are Bob Greifeld our Chief Executive Officer, David Warren our Chief Financial Officer, Magnus Böcker our President, and Ed Knight our General Counsel.

Following our prepared remarks, we’ll open up the line for Q&A. If you haven't done so already, you can access the press release and presentation at our investor relations website at www.nasdaqomx.com. We intend to use our website as a means of disclosing material non-public information and providing disclosure obligations under SEC regulation FD. These disclosures will be included under the events and presentations section of the website. If you have any questions after the call you can obviously call me 212-401-8742.

Before we begin I’d like to remind you that certain statements in the prepared presentation and during the subsequent Q&A period may relate to future events and expectations and as such constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The actual results may differ materially from those projected in these forward looking statements. Information containing factors that could cause actual results to differ from forward looking statements is contained in our press release and our period reports filed with the SEC.

I’ll turn it over to Bob.

Bob Greifeld

Thank you for joining us to discuss our full year and fourth quarter 2008 results. I’m pleased to report that we’re doing the call today from our market site in Times Square. Immediately following this call I’m opening the market with DreamWorks and Shrek and other characters. DreamWorks is the most recent company to switch its listing from NYSE to NASDAQ and one we’re certainly very proud of.

In addition to releasing earnings this morning we also announced David Warren’s decision to step down as CFO later this year. David has been a trusted business partner over the last six years and our business accomplishments during his tenure speak for themselves. His unique style and wise council will sorely be missed. David plans to step down as CFO following our second quarter results and will remain with the company through December 2009.

During this period he will oversee a transition period with Adena Friedman, currently Executive Vice President of Corporate Strategy and Global Data Products, who will assume the role of CFO. David’s style will certainly be missed and when you see a painted VW bus with peace signs all over it careening around the roads of Northern Westchester County its probably David.

Turning to our results, I typically start by giving you a run down of our accomplishments for the period and highlight financial benchmarks. I will do that but today I want to begin with a discussion of what we believe distinguishes our company in the exchange space and what distinguishes us in the context of this market environment.

The NASDAQ OMX Group exited the year vastly different then when we entered the year. Twelve months ago we were a pure US cash equities exchange and although we were the largest cash equity exchange in the US our business didn’t reach beyond these borders. Today, we operate 17 markets, eight clearing houses around the world and are diversified across many asset classes.

Two thousand eight was a dynamic transition year for us, one in which we made five acquisitions and announced four strategic investments. It was however not unlike many of the recent years at NASDAQ OMX. Each year we take steps that change our company; some big, some small but all of them collectively transforming us in some way.

Mergers and acquisitions may be very easy to justify on paper but the real work is in delivering measurable benefits to customers and to shareholders. As we’ve taken steps to transform our company we’ve demonstrated that we can deliver results while continuing to launch new initiatives and invest in new ideas.

While others may be adjusting, transitioning or retrenching our exchange is capable of delivering on existing promises while continuing to invest in new initiatives that will secure our future competitiveness.

Now turning to the specifics. We accomplished much this year including completing our business combination with OMX, entering the options markets with the launch of NASDAQ Options Market known as NOM, completing the acquisition of PHLX a transaction that accreted to our shareholders immediately, completing the launch of BSE now NASDAQ OMX BX, launching NASDAQ OMX Europe known as NORO and leveraging our proven US best execution routing strategy. We are the first European MTF to connect markets with a smart router.

We also announced the deal with the European Multi-lateral Clearing facility EMCF in which we took a 22% ownership interest in the firm. Through this transaction we also agreed to introduce EMCF as a central counterparty clearing firm into our Nordic markets. During 2008 we also completed the acquisition of certain Nord Pool businesses now known as NASDAQ OMX Commodities.

Read the rest of this transcript for free on seekingalpha.com