Key questions and answers from the second quarter fiscal 2008 earnings call conducted by NYSE Euronext on August 1, 2008.

Don Fandetti (Citigroup): What is the progress on the LCH agreement?

Duncan Niederauer: We have reached an agreement with LCH. We have a signed heads of terms agreement that we mutually agreed a few weeks ago. We are in active conversations with the FSA to get approval for Life Clear and we anticipate that if that goes smoothly, it's just a matter of how long the process with the FSA takes. We're still optimistic that will get done sometime in 2008.

Don Fandetti (Citigroup): That's strategically going to allow you to take ownership of your open interest in a more protective position. Is that right?

Duncan Niederauer: It improves our competitive position and the idea is that it doesn't completely reverticalize. It does get us control of pieces of the value chain that we had previously outsourced to LCH. Unlike with ICE Clear, where they completely severed their relationship with LCH, we elected not to ask our clients to create a second or additional guarantee fund. LCH will continue to provide oversight of the guarantee fund and some other risk management pieces of the equation. We'll continue to have an ongoing relationship with LCH in 2009. It will just be different and less substantive than the current relationship we have with them now.

Daniel Harris (Goldman Sachs): How should we think about the trajectory of expenses? What's a good run rate to use and is that $466 million on a currency flat basis?

Mike Geltzeiler: We obviously have not given guidance on the fixed cost basis but if you used a normalized figure, what we'll start to see is the benefit of some of the head count reductions we talked about because that action took place in June. We will start with every month and quarter, we are realizing more of the technology savings but we are also spending money. When you only focus on costs, some of this capacity spends that we are talking about have the incremental revenues with it as well.
If we were able to put it on merger and exit costs, no one would be focusing on it now, but because these are costs defined to build new applications and get us from multiple applications to a single application, we do need to put those into our operating costs. We'll continue to highlight those for you and try to be transparent in that regard.

Daniel Harris (Goldman Sachs): In terms of the share repurchase that will happen following the Amex transaction, are there any limitations on the velocity that the board has placed?

Mike Geltzeiler: We've discussed that with the board. They have left it to us. They have approved the $1 billion size. If you would ask me two or three months ago, I was probably a little more hopeful then that the Amex deal would close in early August rather than early to mid-September. We're going to be thoughtful about what the market looks like in September. You can safely assume that given that we won't be starting until mid-September, it would be highly unlikely that we would spend all of the bullets in calendar 2008.

Daniel Harris (Goldman Sachs): Can you comment on the Tape A business, specifically in the NYSE traditional? What should give us comfort that the clients will continue to use that market structure versus looking for something else?

Duncan Niederauer: It's a question we ask ourselves every day. The NYSE Group has two very different approaches to Tape A rate. We have the Arca model that really tries to compete with the other ECNs or make or take or models that are out there and then we have the NYSE classic model that takes a very different pricing approach.
Thus you’ve seen us tweak in terms of pricing lately because we worry about the NYSE Group number probably more than we worry about what the mix between NYSE classic and Arca.
If you see what we've done most recently in June and July specifically on the Arca side, you could assume that we're using price more as a weapon there and we're using functionality and some other things rather than join the club and just go to a make or take or structure.

Larry Leibowitz: For the NYSE Group and Tape A, we're around 43% of matched share, of which there's probably about 25% at TRF. Therefore, we're roughly 43% and the next biggest competitor is around 23%. What we want to do is try to maintain that spread. We understand that we're in the middle of a transformation on the NYSE classic channel and that transformation is technology improvement, the new model improvement that we've talked about and lots of new features to the system.
As an example, we rolled out reserve functionality a couple months ago. This month we just started a couple of days ago rolling out algorithms in the handheld for floor brokers and that seems to be taking off well. If we can improve the model on the classic side, we really still believe that having market makers or specialists that have an obligation to the market makes for a better market and then use the Arca side to compete against the rest of the ECNs. That's the strongest position for us.

Rich Repetto (Sandler O'Neill): Do you expect fixed expenses to go up or down quarter-to-quarter?

Mike Geltzeiler: In the next quarter, we have AEMS coming into the family. AEMS is targeting Euronext costs for the IT work they provide for Euronext. We're obviously going to consolidate AEMS which will include their costs and so just to give you a fixed cost number, GL Trade fixed cost, we currently consolidate GL Trade. If this transaction goes through, they are gong to be exiting. There's so much movement and to sit there and just try to give you a fixed cost number would be problematic but we'll continue to try to reconcile the normalized figures so that you can see the synergy savings and you can see the investments we're making.

Duncan Niederauer: The goal is to try to start giving you more transparency in these ins and outs because it's an increasingly complex business.

Mike Geltzeiler: What you will find is the spirit of transparency they convey in this call. It’s difficult for us to go into too much detail but we're happy to do it with anyone in the analyst community one-on-one.
We believe that with the headcount management we've been undertaking this year and the expense management on the technology side that we've been undertaking, we're all very confident that our so-called core expense phase is absolutely going down. The challenge is GL goes out, Wombat came in, AEMS comes in, Amex comes in and all this stuff is going to hit our P&L in different ways.
If we hadn't done Wombat, AEMS or Amex in 2008, if you ask me to make an estimate on what the start of year headcount versus the end of year headcount would be, I would say 8% to 10% lower ballpark. It's not going to be 8% to 10% lower because the three businesses that we acquired are going to add 800 to 900 people to our headcount by the end of the year. All of those acquisitions bring revenue with them.

Rich Repetto (Sandler O'Neill): What is your strategy regarding CDS in Europe?

Larry Leibowitz: There's still a little bit of work to do with the regulators. I don't think it's a boat that we're going to miss but at the same time it's yet to be determined exactly what the market structure's going to be. We've been talking to the regulators in Washington. We've been talking to some of the market participants as well, trying to figure out what it is they want from us. However, what you've seen us do with CDS in Europe, you should absolutely expect us to at a minimum roll that platform that is part of our futures strategy in the US.

Edward Ditmire (Fox-Pitt): Can you talk about the revenues associated with the Qatar investment?

Duncan Niederauer: The only revenues you should really think about are tied to the exchange solutions business.
As we get to the final documents, certainly in the next quarter's call, we'll be able to give you a lot more clarity on what the size of the technology contract will be and it's duration and then we'll try to give you a flavor not only for the revenue but potentially for the contribution to margin.
We hope to close that deal in probably the September or October timeframe in Qatar and by the time we do the third quarter call, that should be closed and we should be able to give you more visibility then.