1) INVESTOR
PRESENTATION
November 2015
2) DISCLAIMERS
Non-GAAP Information
In addition to disclosing results determined in accordance with GAAP, Nasdaq also discloses certain non-GAAP results of operations, including, but not
limited to, net income attributable to Nasdaq, diluted earnings per share, operating income, and operating expenses, that make certain adjustments or
exclude certain charges and gains that are described in the reconciliation tables of GAAP to non-GAAP information provided in the appendix to this
presentation. Management believes that this non-GAAP information provides investors with additional information to assess Nasdaq's operating
performance by making certain adjustments or excluding costs or gains and assists investors in comparing our operating performance to prior periods.
Management uses this non-GAAP information, along with GAAP information, in evaluating its historical operating performance.
The non-GAAP information is not prepared in accordance with GAAP and may not be comparable to non-GAAP information used by other companies. The
non-GAAP information should not be viewed as a substitute for, or superior to, other data prepared in accordance with GAAP.
Cautionary Note Regarding Forward-Looking Statements
Information set forth in this communication contains forward-looking statements that involve a number of risks and uncertainties. Nasdaq cautions
readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those
contained in the forward-looking information. Such forward-looking statements include, but are not limited to (i) projections about our future financial
results, growth, trading volumes, products and services, taxes and achievement of synergy targets, (ii) statements about the closing or implementation
dates and benefits of certain strategic, restructuring, technology, de-leveraging and capital return initiatives, (iii) statements about our integrations of our
recent acquisitions, (iv) statements relating to any litigation or regulatory or government investigation or action to which we are or could become a party,
and (v) other statements that are not historical facts. Forward-looking statements involve a number of risks, uncertainties or other factors beyond
Nasdaq’s control. These factors include, but are not limited to, Nasdaq’s ability to implement its strategic initiatives, economic, political and market
conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors detailed in Nasdaq’s
filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 10-K and quarterly reports on Form 10-Q which are
available on Nasdaq’s investor relations website at http://ir.nasdaq.com and the SEC’s website at www.sec.gov. Nasdaq undertakes no obligation to
publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
Website Disclosure
We intend to use our website, ir.nasdaq.com, as a means for disclosing material non-public information and for complying with SEC Regulation FD and
other disclosure obligations. These disclosures will be included on our website under “Investor Relations.”
2
November 2015 Investor Presentation
3) STRATEGY, OBJECTIVE & GROWTH BLUEPRINT
STRATEGY:
CAPITAL
GENERATION
CORE BUSINESS
OPPORTUNITIES
GROWTH
DISCIPLINED INTERNAL
INVESTMENT
GROWTH &
DIVERSIFICATION
Leverage our technology and relationship resources to build profitable businesses and
deliver attractive returns for our shareholders.
OPPORTUNISTIC
ACQUISITIONS
• #1 or #2 share in business
units representing 96% of
3Q15 revenues.
• Information Services expansion
• Corporate Solutions extension
• Access Services evolution
• Nasdaq Private Market
• IR Insight platform
• Index Weightings & Components
• NFX
• Dorsey Wright and Associates
• Mergent
• Thomson Reuters IR, PR & Multimedia
• eSpeed
OBJECTIVE:
Become a deeply-embedded, growing and highly profitable service
provider to the global securities market.
3
November 2015 Investor Presentation
4) CONSISTENT PROFIT AND CASH FLOW GENERATION WITH
SIGNIFICANT MOMENTUM AND OPPORTUNITIES
HIGH QUALITY MODEL
KEY GROWTH DRIVERS
• 74% subscription and recurring
revenues(1)
• Consistent organic growth in
subscription and recurring revenues
• Intense profitability focus, with high
operating leverage
• Majority of trading revenues from
derivatives and fixed income drives
long-term growth, near-term
benefiting from cyclical tailwinds
• Strong cash flow generation and
moderate capital requirements –
~7% avg. FCF yield over LTM(2)
• Disciplined, ROI-focused capital
deployment, coupled with growing,
significant dividend payout and
yield.
1.
2.
• Revenue and synergy opportunities
from significant investments and
acquisitions
2015 YTD revenue through 9/30/15
4Q14-3Q15 FCF excluding SEC Section 31 Fees of $614 million divided by average last twelve months (LTM) market capitalization of $8.5 billion, per FactSet
4
November 2015 Investor Presentation
5) DIVERSIFIED MIX OF RECURRING AND
TRANSACTION REVENUE
RECURRING
(~75%)
•
Correlated to market
growth
•
Not tied to market
volumes
Technology
Solutions
26%
Leverages exchange
businesses
•
•
$2.1B
November 2015 Investor Presentation
(1)
Listing
Services
12%
1. Represents last 12 months revenues less transaction-based expenses
Market
Services
38%
Information
Services
24%
•
High operating
leverage
•
Secular growth in
derivatives and fixed
income
•
NET REVENUE
Consistent growth
through penetration
and expansion
5
TRANSACTIONDRIVEN (~25%)
Cyclical volatility
rebound opportunity
•
Specific growth
initiative investments
6) ORGANIC REVENUE GROWTH AND OUTLOOK
NASDAQ REVENUE GROWTH EXCLUDING ACQUISITIONS, CONSTANT CURRENCY
12%
12%
8%
4%
4%
3%
0%
0%
-2%
8%
4%
5%
5%
4%
4%
3%
2%
-4%
3%
NonTransaction
al Segments
(IS, TS, LS)
2%
-3%
Market
Services
-3%
-8%
-6%
3Q14
4Q14
1Q15
2Q15
3Q15
2012
2013
2014
2015 YTD
NASDAQ MEDIUM-TERM (3-5 YR) ORGANIC REVENUE GROWTH OUTLOOK
U.S. GDP1
2% - 3%
1.
2.
S&P 500 REVENUE
CONSENSUS2
INFORMATION
SERVICES
TECHNOLOGY
SOLUTIONS
LISTING
SERVICES
NON-TRANSACTIONAL
SEGMENTS
4% - 5%
Mid Single Digits
Mid Single Digits
Low Single Digits
Mid-Single Digits
Company estimate.
Factset consensus est. 2015-2017 revenue growth, as of 10/14/2015
6
November 2015 Investor Presentation
(IS, TS, LS)
7) INFORMATION SERVICES
NET REVENUE
CONTRIBUTION
SUBSCRIPTION & FEE-BASED REVENUE BUSINESS
•
•
25%
Data Products: Primarily proprietary information from Nasdaq’s
trading markets, and also includes shared revenues from industrywide “tape plans” in U.S. equities & options.
Index Licensing & Services: Index licenses for financial products:
Exchange-traded funds (ETFs), futures, options, mutual funds,
structured products. Third-party index calculations and intra-day
portfolio valuation (IPV) calculations.
3Q15
OPERATING MARGIN
INFORMATION SERVICES NET REVENUE
600
100%
80%
140
500
(US$ millions)
60%
40%
20%
0%
400
300
$360
$52
$385
$400
$58
$63
$436
$74
$473
$89
$308
$327
$337
$362
$384
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
100
$29
$29
40
$92
$91
$100
3Q14
4Q14
1Q15
$99
$103
Total
0
2011
2012
2013
2014
Index
Licensing
&
Services
Data
Products
20
Information Services’ operating margins reflect the allocation of certain joint costs that support the operation of various aspects of Nasdaq’s
business, including Market Services and Information Services, to business units other than Information Services.
November 2015 Investor Presentation
$25
$22
60
200
2010
7
100
$132
$113
$22
$128
80
0
1.
120
$125
$114
2Q15
3Q15
8) INFORMATION SERVICES METRICS
Market Data & Index Licensing & Services
PROPRIETARY MARKET DATA ($M)
U.S. Prop. Data
Euro Prop. Data
# OF NASDAQ INDEX LICENSED ETPS
Index Data
225
200
175
150
125
100
75
50
25
-
80
60
40
20
-
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
35%
33%
31%
29%
27%
25%
30
20
10
-
100
75
50
25
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
1Q12
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
1Q12
November 2015 Investor Presentation
3Q12
40
8
AUM NASDAQ INDEX LICENSED ETPS ($B)
125
% of Mkt Data Rev.
Source: Nasdaq
2Q12
Tape Plan Rev
1Q12
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
1Q12
SHARED TAPE PLAN MKT. DATA REV. ($M)
9) TECHNOLOGY SOLUTIONS
NET REVENUE
CONTRIBUTION
RECURRING REVENUE BUSINESS W/ MARGIN EXPANSION
OPPORTUNITY
•
Market Technology: Leading technology supplier to exchanges,
clearinghouses, central securities depositories and regulators worldwide,
with over 70 markets in over 50 countries. Provider of compliance services
to over 65 market participants in over 100 countries.
•
Corporate Solutions: Leading provider of investor relations, governance,
public relations & other technology/services to publicly listed and private
companies
26%
3Q15
OPERATING MARGIN
TECHNOLOGY SOLUTIONS NET REVENUE
600
20%
$560
$475
500
15%
160
140
$135
$142
$130
$135
$131
(US$ millions)
120
10%
5%
400
$289
300
200
0%
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
100
$220
$313
$75
$224
$230
$245
$246
$76
$72
$60
$64
$55
$59
$59
3Q14
4Q14
1Q15
2Q15
3Q15
0
2010
November 2015 Investor Presentation
$75
2011
2012
Corporate
Solutions
Market
Technology
40
20
0
9
$75
$78
60
$63
$157
100
80
$89
$214
$314
2013
2014
Total
10) TECHNOLOGY SOLUTIONS METRICS
Market Technology & Corporate Solutions
MARKET TECHNOLOGY ORDER INTAKE ($M)
CORPORATE SOLUTIONS CROSS SALES ($M)
200
5
150
4
3
100
2
50
1
-
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
MARKET TECHNOLOGY BACKLOG ($M)
0
CORPORATE SOLUTIONS PRODUCT HIGHLIGHTS
1,000
3Q14
4Q14
1Q15
2Q15
3Q15
YOY %
GROWTH
YOY %
GROWTH
YOY %
GROWTH
YOY %
GROWTH
YOY %
GROWTH
DIRECTORS
DESK CLIENTS
750
16%
18%
18%
24%
23%
PRESS RELEASES
DISTRIBUTED
21%
8%
11%
10%
9%
PRODUCT
500
250
3Q15
2Q15
1Q15
4Q14
Source: NASDAQ OMX
November 2015 Investor Presentation
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
10
11) LISTING SERVICES
NET REVENUE
CONTRIBUTION
RECURRING REVENUE BUSINESS
• Leader in U.S. listings by number of companies, and in Nordics by both
number and market capitalization of listed companies. Nasdaq is home
to over 3,600 listed companies with a market value of over $9.6 trillion.
13%
• The majority of listings revenue is from annual listing fees, which are
priced according to size tiers (in the U.S.) or as a ratio to market cap (in
the Nordics), as well as from initial listings fees and listings of additional
shares fees, which are amortized over multi-year periods.
3Q15
• In addition, Nasdaq Private Market (NPM) seeks to provide liquidity, cap
table management, and other services to private companies.
OPERATING MARGIN
LISTING SERVICES REVENUE
100%
300
80%
250
60%
80
200
$229
$224
$228
$238
70
(US$ millions)
60
40%
20%
0%
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
November 2015 Investor Presentation
$59
$61
3Q14
4Q14
$64
$66
$66
1Q15
2Q15
3Q15
50
150
40
30
100
20
50
10
0
0
2010
11
$236
2011
2012
2013
2014
12) LISTINGS METRICS
U.S. and Nordic Listings
# OF U.S. AND NORDIC NDAQ LISTINGS
# OF U.S. IPOS WINS (2015 YTD ANNUALIZED)
3,900
200
3,700
150
3,500
37
3,300
3,100
2,900
3,558
3,456
3,331
3,395
3,574
3,685
100
50
126
89
78
2011
2012
111
72
2010
2,700
2,500
189
2010
2011
2012
2013
2014
3Q15
GLOBAL NEW LISTINGS (2015 YTD ANNUALIZED)
2013
2014
2015
NDAQ WIN RATE OF U.S. IPOS
500
70%
400
65%
60%
300
200
399
185
176
2010
100
220
2011
2012
271
70
50%
209
0
45%
61%
54%
55%
54%
52%
2010
2011
2012
2013
40%
2013
Source: Nasdaq
12
72%
55%
November 2015 Investor Presentation
2014
2015
2014
2015 YTD
13) MARKET SERVICES
NET REVENUE
CONTRIBUTION
MIX OF VARIABLE/RECURRING REVENUE BUSINESS
•
•
Equity Derivatives: A Leader in U.S. equity options trading, as well as
trading and clearing of derivatives on Nordic equities and equity indices.
•
Fixed Income, Currency and Commodities (FICC): Consists of eSpeed
government bond trading, Nordic fixed income clearing, and energy,
freight and other commodity trading and clearing products.
•
38%
Cash Equities: A leader in U.S. and Nordic equity trading.
Access/Broker Services: Connects customers to Nasdaq & other markets,
as well as providing risk management and back office services.
3Q15
OPERATING MARGIN
MARKET SERVICES NET NON-GAAP REVENUE
1000
100%
800
(US$ millions)
80%
60%
40%
20%
400
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
November 2015 Investor Presentation
$780
$796
$737
$756
$245
$713
$207
$190
$223
$245
$223
$222
$208
$126
$250
$205
200
$69
$73
$73
$109
$217
$234
$235
2011
2012
2013
2014
$201
$200
Cash Equities
$62
$67
Equity
Derivatives
$46
$44
$51
$188
$189
$59
$51
$59
$50
$53
$29
$24
$24
$23
Access/Broker
Srvcs
$58
100
$239
2010
$189
$30
150
$189
200
0%
13
600
250
$60
$59
$59
$59
Total
3Q14
4Q14
1Q15
2Q15
3Q15
FICC
50
0
0
14) MARKET SERVICES METRICS
Derivative, Equity & Fixed Income Trading
U.S. EQUITY ADV (B) & OPTION ADC (M)
US Equity ADV
US Options ADC
PRIMARY DEALER UST AVG. DAILY VOL. ($B)
600
Avg. VIX
500
20
40
15
30
10
20
200
5
10
100
0
0
2009
2010
2011
2012
2013
2014
400
300
0
2015
YTD
NORDIC EQUITIES DAILY VALUE TRADED ($B)
2009
2010
2011
2013
2014
2015
YTD
NORDIC DERIVATIVE ADC (000’S)
4.0
Nordic Equity Derivatives
3.0
2012
Nordic Fixed Income Derivatives
500
400
300
200
100
0
2.0
1.0
2009
2010
2011
2012
2013
Source: Nasdaq, Options Clearing Corp., NY Federal Reserve, FactSet
14
November 2015 Investor Presentation
2014
2015
YTD
2009
2010
2011
2012
2013
2014
2015
YTD
15) REVENUE, EARNINGS AND CASH FLOW STABILITY1
(MILLIONS)
$600
Net
Revenue
$400
Operating
Expense
$200
EBITDA
$0
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
$0.76
$0.78
$0.81
$0.80
$0.83
$1.00
$0.80
$0.78
3Q15
Operating
Income
$0.88
$0.60
Non-GAAP EPS
$0.40
$0.20
$1Q14
2Q14
3Q14
4Q14
1. Reflects non-GAAP results. Please refer to the Appendix for a complete reconciliation of non-GAAP to GAAP numbers.
15
November 2015 Investor Presentation
1Q15
2Q15
3Q15
16) DIVIDENDS TO COMMON SHAREHOLDERS
Significant, growing component of NDAQ investment proposition
35%
2.5%
31%
30%
25%
1.5%
20%
15%
1.0%
10%
0.5%
5%
0%
0.0%
2011
1.
2.
3.
2012
Includes pro forma 1Q15 dividend of $0.25.
Full-year dividends paid divided by prior-year non-GAAP net income
Average daily dividend yield (Source: FactSet).
16
November 2015 Investor Presentation
2013
2014
2015 YTD
Annualized
2015 Pro Forma
YTD
Annualized(1)
Average Dividend Yield(3)
Dividend Payout Ratio(2)
2.0% 2.0%
17) HISTORICAL CASH FLOW / USES OF CASH FLOW
FREE CASH FLOW CALCULATION
(US$ MILLIONS)
2009
2010
2011
2012
2013
2014
2015YTD
2009 – 3Q15
Cash flow from operations
$582
$440
$669
$588
$574
$687
$472
$4,021
Capital expenditure
(59)
(42)
(88)
(87)
(115)
(140)
(91)
(622)
FREE CASH FLOW
523
398
581
501
459
547
381
3,390
Section 31 fees
(62)
46
(22)
13
8
(28)
84
(39)
FREE CASH FLOW EX. SECTION 31 FEES
461
444
559
514
467
519
465
3,429
-
797
100
275
10
178
310
1,670
Net repayment/(borrowing) of debt
340
(193)
248
145
(606)
235
(190)
(21)
Acquisitions (less dispositions)
(46)
189
26
112
1,164
-
256
1,701
-
-
-
65
87
98
108
358
294
793
374
597
655
511
484
3,708
USES OF CASH FLOW
Share repurchases
Dividends
TOTAL USES OF CASH FLOW
17
November 2015 Investor Presentation
18) APPENDIX
19
November 2015 Investor Presentation
19) HISTORICAL REVENUE, OPERATING PROFIT
AND MARGIN TRENDS
NON-GAAP RESULTS(1)
2010
2011
2012
2013
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
Net Revenues
$1,522
$1,690
$1,663
$1,895 $2,067
$529
$523
$497
$517
$507
$518
$529
Operating
Expenses
(770)
(866)
(877)
(1,059)
(1,137)
(297)
(290)
(267)
(280)
(272)
(281)
(276)
Operating Income
752
824
786
836
930
232
233
230
237
235
237
253
Operating
(2)
Margin
49%
49%
47%
44%
45%
44%
45%
46%
46%
46%
46%
48%
EBITDA
799
878
838
895
998
249
250
247
254
254
256
272
Net Income
445
489
464
484
542
136
131
136
139
138
143
151
DILUTED EPS
$2.15
$2.72
$2.69
$2.83
$3.13
$0.78
$0.76
$0.78
$0.81
$0.80
$0.83
$0.88
(US$ Millions, except EPS)
1.
2.
Please refer to the Appendix for a complete reconciliation of GAAP to non-GAAP numbers
Operating margin equals operating income divided by net revenues.
20
November 2015 Investor Presentation
2014
20) 2015 NON-GAAP OPERATING EXPENSE(1,2,3)
AND TAX RATE GUIDANCE
(US$ MILLIONS)
All figures on a non-GAAP basis excluding restructuring and integration charges
2015 GUIDANCE
Core Expenses
$1,055-$1,070
New Initiatives
$30-$40
TOTAL EXPENSES
EFFECTIVE TAX RATE
1.
2.
3.
21
$1,085-$1,110
33%-35%
Includes $10 million of estimated non-GAAP expenses associated with the announced DWA acquisition
2015 guidance calculated using March 2015 average FX rates
The guidance does not reflect the impact of any restructuring or integration charges, and excludes
amortization of acquired intangibles.
November 2015 Investor Presentation
21) DEBT OBLIGATIONS
3Q15 total debt increased by $154M vs.
2Q15 primarily due to a $150M
revolver draw, a $3M increase in Euro
bond book value (caused by stronger
Euro) and a $1 million increase due to
amortization of debt issuance costs
â–¶
Manageable debt maturities, with
largest maturity in 2021
â–¶
Net interest expense for 3Q15 was
$27M, a decrease of $1M as compared
to $28M in 3Q14, primarily due to
impact of foreign exchange
â–¶
9/30/15
($ millions)2
Maturity Date
Revolver (Libor +137.5 bps)
310
11/25/19
5.25% Bond
368
01/16/18
5.55% Bond
597
01/15/20
3.88% Euro Bond
665
06/07/21
4.25% Bond
495
06/01/24
$ 2,435
Total Debt Obligations
Less Cash and Cash Equivalents
(290)
$2,145
Net Debt
DEBT MATURITIES
Net Debt to EBITDA 1 = 2.1x
800
Total Debt to EBITDA 1 = 2.3x
(US$ Millions)
LTM EBITDA 1 = $1,041 million
700
600
500
400
300
200
100
2015
1.
2.
2016
2017
2018
2019
2020
2021
2022
See Appendix for EBITDA reconciliation. Pro forma leverage ratios have been calculated for Q3’15 to reflect the acquisition of Dorsey, Wright & Associates, LLC
The debt obligations have been reduced for debt issuance costs per early adoption of FASB guidance ASU 2015-03 by Nasdaq.
22
November 2015 Investor Presentation
2023
2024
22) NET REVENUES1
Reconciliation of GAAP to non-GAAP
ANNUAL
(US$ Millions)
GAAP REVENUES
Less transaction-based expenses
Income from open positions relating to the
operations of the Exchange
NON-GAAP REVENUES
Less transaction-based expenses
FY10
FY11
FY12
FY13
FY14
$1,522
$1,690
$1,674
$1,895
$2,067
-
-
(11)
-
-
$1,522
$1,690
$1,663
$1,895
$2,067
1. Certain reclassifications of prior period amounts have been made to conform to the current period presentation
23
November 2015 Investor Presentation
23) PRO FORMA EBITDA
Pro Forma Earnings Before Interest, Taxes, Depreciation and Amortization
QUARTERLY
(US$ Millions)
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
NON-GAAP OPERATING INCOME
$232
$233
$230
$237
$235
$237
$253
17
17
17
17
19
19
19
EBITDA of TR/eSpeed Pre-acquisition*
-
-
-
-
-
-
EBITDA of DWA**
-
3
4
4
1
-
Plus
Depreciation and Amortization of Tangibles
Pro forma EBITDA
$249
$253
$251
$258
$255
$256
$272
ANNUAL
(US$ Millions)
FY10
FY11
FY12
FY13
FY14
NON-GAAP OPERATING INCOME
$752
$824
$786
$836
$930
47
54
52
59
68
EBITDA of TR/eSpeed Preacquisition*
-
50
-
EBITDA DWA**
-
-
-
Plus
Depreciation and Amortization of
Tangibles
Pro forma EBITDA
$799
$878
$838
$945
$998
* 2Q13 EBITDA and FY13 EBITDA of TR/eSpeed contain only April’13 to May’13 EBITDA for TR and April’13 to June’13 EBITDA for eSpeed. 2013 EBITDA contains only Jan’13 to May’13 EBITDA for TR and Jan’13 to
June’13 EBITDA for eSpeed. The sources of the pro forma information were LTM financials provided by eSpeed and Thomson-Reuters overlaid by Nasdaq’s indirect expenses
** 1Q15 EBITDA of DWA contains January’15 EBITDA for Dorsey, Wright & Associates, LLC. February’15 to March’15 DWA EBITDA is not included in EBITDA of DWA because it is included in Non-GAAP operating income
and Depreciation and Amortization of tangibles (Nasdaq). The sources of the pro forma information were LTM financials provided by Dorsey, Wright & Associates, LLC.
24
November 2015 Investor Presentation
24) OPERATING EXPENSES
Reconciliation of GAAP to non-GAAP
(US$ Millions)
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
FY10
FY11
FY12
FY13
FY14
$345
$332
$290
$344
$480
$301
$298
$891
$994
$984
$1,207
$1,313
Voluntary Accommodation Program
-
-
-
-
-
-
-
-
-
(44)
-
Securities and Exchange Commission matter
-
-
-
-
-
-
-
-
-
(10)
-
(28)
(14)
(5)
(35)
-
(3)
(4)
(4)
(38)
(4)
(22)
(81)
Restructuring charges
-
-
-
-
(150)
(2)
(8)
-
-
(44)
(9)
-
Extinguishment of debt
-
(9)
-
(2)
-
-
(40)
(31)
-
-
(11)
Special legal expenses
(1)
(1)
-
-
(31)
-
-
-
(7)
(3)
(2)
Sublease reserve
-
-
-
(11)
-
-
(5)
-
-
-
(11)
Reversal of value added tax refund
-
-
-
-
(12)
-
-
-
-
-
-
Amortization of acquired intangible assets*
(18)
(18)
(17)
(16)
(15)
(15)
(56)
(55)
(52)
(63)
(69)
Other
(1)
-
(1)
-
-
-
(16)
(4)
-
3
(2)
GAAP OPERATING EXPENSES
Merger and strategic initiatives
Insurance recovery
(15)
5
Total adjustments
(48)
(42)
(23)
(64)
(208)
(20)
(22)
(121)
(128)
(107)
(148)
(176)
NON-GAAP OPERATING EXPENSES
$297
$290
$267
$280
$272
$281
$276
$ 770
$ 866
$ 877
$ 1,059
$1,137
* Amortization expense related to intangible assets results primarily from business combinations. These non-cash expenses are fixed in connection with an acquisition, are then amortized over a number of years after the
acquisition and generally cannot be changed or influenced by management after the acquisition. Management does not consider these expenses for the purpose of evaluating the performance of the business or its managers
or when making decisions to allocate resources. Therefore, such expenses are shown as a non-GAAP adjustment.
25
November 2015 Investor Presentation
25) OPERATING INCOME
Reconciliation of GAAP to non-GAAP
(US$ Millions)
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
FY10
FY11
FY12
FY13
FY14
GAAP OPERATING INCOME
$184
$191
$207
$173
$27
$217
$231
$631
$696
$690
$688
$754
Income from open positions relating to the
operations of the Exchange
-
-
-
-
-
-
-
-
(11)
-
-
Voluntary Accommodation Program
-
-
-
-
-
-
-
-
-
44
-
Securities and Exchange Commission matter
-
-
-
-
-
-
-
-
-
10
-
28
14
5
35
-
3
4
4
38
4
22
81
Restructuring charges
-
-
-
-
150
2
8
-
-
44
9
-
Extinguishment of debt
-
9
-
2
-
-
40
31
-
-
11
Special legal expenses
1
1
-
-
31
-
-
-
7
3
2
Sublease reserve
-
-
-
11
-
-
5
-
-
-
11
Reversal of value added tax refund
-
-
-
-
12
-
-
-
-
-
-
Amortization of acquired intangible assets*
18
18
17
16
15
15
56
55
52
63
69
Other
1
-
1
-
-
-
16
4
-
(3)
2
Merger and strategic initiatives
Insurance recovery
Total adjustments
15
(5)
48
NON-GAAP OPERATING INCOME
42
23
64
208
20
22
121
128
96
148
176
$232
$233
$230
$237
$235
$237
$253
$ 752
$ 824
$ 786
$ 836
$930
* Amortization expense related to intangible assets results primarily from business combinations. These non-cash expenses are fixed in connection with an acquisition, are then amortized over a number of years after the
acquisition and generally cannot be changed or influenced by management after the acquisition. Management does not consider these expenses for the purpose of evaluating the performance of the business or its managers
or when making decisions to allocate resources. Therefore, such expenses are shown as a non-GAAP adjustment.
26
November 2015 Investor Presentation
26) NET INCOME AND DILUTED EPS
Reconciliation Of GAAP To Non-GAAP - Quarterly
(US$ millions, except EPS)
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
GAAP NET INCOME ATTRIBUTABLE TO NASDAQ
$103
$101
$123
$87
$9
$133
$138
Voluntary Accommodation Program
-
-
-
-
-
-
-
Securities and Exchange Commission matter
-
-
-
-
-
-
-
Other income from OCC equity investment
-
-
-
-
(13)
-
-
Gain on sale of investment security
-
-
-
-
-
-
-
28
14
5
35
-
3
4
Extinguishment of debt
-
9
-
2
-
-
-
Asset impairment charges
-
-
-
49
-
-
-
Sublease reserve
-
-
-
11
-
-
-
Reversal of value added tax refund
-
-
-
-
12
-
-
Restructuring charges
-
-
-
-
150
2
8
Special legal expenses
1
1
-
-
31
-
-
Amortization of acquired intangible assets
18
18
17
16
15
15
15
Other
1
-
1
-
-
-
-
Merger and strategic initiatives
Insurance recovery
TOTAL NON-GAAP ADJUSTMENTS
Adjustment to the income tax provision to reflect non(1)
GAAP adjustments
Total Non-GAAP Adjustments, net of tax
(5)
48
42
23
113
195
20
22
(15)
(12)
(10)
(61)
(66)
(10)
(9)
33
30
13
52
129
10
13
NON-GAAP NET INCOME ATTRIBUTABLE TO NASDAQ
$136
$131
$136
$139
$138
$143
$151
GAAP diluted EPS
$0.59
$0.59
$0.71
$0.50
$0.05
$0.77
$0.80
Total adjustments from non-GAAP net income, above
$0.19
$0.17
$0.07
$0.31
$0.75
$0.06
$0.08
NON-GAAP DILUTED EPS
$0.78
$0.76
$0.78
$0.81
$0.80
$0.83
$0.88
1. Nasdaq determines the tax effect of each item based on the tax rules in the respective jurisdiction where the transaction occurred
27
November 2015 Investor Presentation
27) NET INCOME AND DILUTED EPS
Reconciliation Of GAAP To Non-GAAP - Annual
(US$ millions, except EPS)
FY10
FY11
FY12
FY13
FY14
GAAP NET INCOME ATTRIBUTABLE TO NASDAQ
Voluntary Accommodation Program
Securities and Exchange Commission matter
Income from open positions relating to the operations of the Exchange
Gain on sale of investment security
Merger and strategic initiatives
Extinguishment of debt
Asset impairment charges
Loss on divestiture of a business
Sublease reserve
Restructuring charges
Special legal expenses
Asset retirement
Workforce reductions
Amortization of acquired intangible assets
Other
TOTAL NON-GAAP ADJUSTMENTS
Adjustment to the income tax provision to reflect non-GAAP
(1)
adjustments
Significant tax adjustments, net
Total Non-GAAP Adjustments, net of tax
NON-GAAP NET INCOME ATTRIBUTABLE TO NASDAQ
GAAP diluted EPS
Total adjustments from non-GAAP net income, above
NON-GAAP DILUTED EPS
$395
4
40
11
5
2
9
56
5
132
$387
38
31
18
55
4
146
$352
(11)
4
40
14
44
7
52
150
$385
44
10
(30)
22
14
9
3
63
(3)
132
$414
81
11
49
11
2
69
2
225
(50)
(49)
(52)
(37)
(98)
(32)
50
$445
$1.91
$0.24
$2.15
5
102
$489
$2.15
$0.57
$2.72
14
112
$464
$2.04
$0.65
$2.69
4
99
$484
$2.25
$0.58
$2.83
1
128
$542
$2.39
$0.74
$3.13
1. Nasdaq determines the tax effect of each item based on the tax rules in the respective jurisdiction where the transaction occurred
28
November 2015 Investor Presentation
28) FOR ADDITIONAL INVESTOR
RELATIONS INFORMATION
Investor Relations Website:
http://ir.nasdaq.com
Investor Relations Contact:
Ed Ditmire, CFA
Vice President, Investor Relations
(212)401-8737
ed.ditmire@nasdaq.com
Neil Stratton, CFA
Investor Relations
(212)401-8769
neil.stratton@nasdaq.com