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NYSE Euronext (NYX)

June 03, 2013 9:30 am ET


Jan-Michiel Hessels - Former Member of Supervisory Board, Chairman of Nomination, Remuneration & Corporate Governance Committee and Member of Information Technology Committee

Duncan L. Niederauer - Chief Executive Officer and Director

Janet L. McGinness - Executive Vice President of Legal and Corporate Secretary

Michael S. Geltzeiler - Chief Financial Officer and Group Executive Vice President


Jan-Michiel Hessels

Good morning, ladies and gentlemen. Welcome to the 2013 NYSE Euronext Special Meeting. My name is Jan-Michiel Hessels, Chairman of the Board of Directors. It's my pleasure to welcome you to this special stockholders' meeting, at which we will consider the proposed combination with ICE. We'd also like to welcome those stockholders who are attending this meeting via the Internet. .

We haven't done any changes since our last meeting, which is only 5, 6 weeks ago or so, so still the same lineup here behind the table. To my right, of course, Duncan, our Chief Executive Officer; on my left, Marsh Carter, our Deputy Chair; and next to him, Dominique Cerutti, our President and Deputy Chief Executive Officer.

I now call the 2013 special meeting of stockholders to order. We will first hear from Duncan, who will review what we, the directors, viewed as the compelling reasons and rationale for the ICE transaction. After he concludes his remarks, we will conduct the formal business of the meeting. We ask you to limit your questions during this meeting to the proposals listed on the agenda, and we assure you that we will answer your questions as completely as possible. Copies of the agenda and the rules of conduct for this meeting have been placed on your seats.

Duncan, please go ahead.

Duncan L. Niederauer

Thanks, Jan-Michiel. So to start with, I just have a few slides just to remind everybody where we are. We'll talk a little bit about the timeline and kind of what's in front of us between here and the hope for closing in the second half.

Before I get to the slides, one thing we've learned is as you create a more complicated company or a larger company or engaged in a merger, you get not only 1 page, but 2 pages of legal disclaimers. So we have twice as many legal disclaimers as we've had before. So enough of that.

Just 2 or 3 quick slides. #1. Just to remind everybody why we're trying to put these 2 companies together and where we think it will take us. On the left-hand side of the slide, I think what ICE brings to the table is a leader, if not the leader in -- not only in the derivative markets but also in the provision of post-trade services, and of particular note, is provision of post-trade services not just in the exchange traded world, but I think they have a leadership position in where a lot of the OTC clearing is headed as well. And I think they enjoy a great reputation not only as a terrific integrator of other businesses that they've acquired or combined with but also as a terrific innovator. They have been on the cutting edge of a lot of the changes we've seen in the industry in the last 10 years, and we look forward to being under the same umbrella that they're under.

What we think we bring to the table on our side is the brand, being the leader in capital raising. We are underway to be the leader in capital raising for the third year in a row. We led the world in '11. We led the world in '12. And if the early returns in '13 through almost half of the year are any indication, we are well on the lead again.

If you combine our Derivatives business on the interest rate side, as you'll see on the next slide in a minute, you put that together with ICE's Derivatives business, and it makes it a very -- it's a very complementary fit. It makes it probably the broadest and deepest derivative portfolio in the world, rivaled only really by the CME.

If you also bring from our side to the table the premier brand in the Listings business, stapled with it a very solid equities business and an increasingly improving equity options franchise in the U.S., I think the combination has a lot to offer. We think it's -- going forward, we're going to be able to take advantage of this diversification, provide growth to the shareholders, find plenty of capital efficiencies for ourselves and for our clients, generate a tremendous amount of free cash flow, which gives us the opportunity to return that to the shareholder in whatever form we see fit going forward. We've already talked historically leading up to the deal about at least paying a $300 million dividend going forward. I know that's on the minds of many of you. So we stand committed to that as of this time.

Now what is that going to translate to when we put these 2 companies together and what some of the pro forma numbers will start to look like? If you look on the top left-hand side of the slide, the way I would think about this is you have one anchor in the Derivative business on the futures and options side, a little less than half of the revenue. If you think about a second anchor, you could take that Listings piece of the pie, the Cash Trading piece of the pie and the market data piece of the pie, and that really gives you your second anchor.

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