NYSE Euronext, Inc. (NYX)
Q2 2008 Earnings Call
August 1, 2008 8:00 AM, ET

Executives

Effie Epstein – Investor Relations
Duncan Niederauer – Chief Executive Officer
Michael Geltzeiler - Group Executive VP and Chief Financial Officer
Lawrence Leibowitz, Group Executive VP, Head of US Markets and Global Technology
John Halvey, Group Executive Vice President and General Counsel

Analysts

Don Fandetti - Citigroup
Daniel Harris - Goldman Sachs
Richard Repetto - Sandler O''Neill
Edward Ditmire - Fox-Pitt Kelton
Roger Freeman - Lehman Brothers
Ken Worthington – JP Morgan
Dan Fannon – Jefferies & Co
Howard Chen - Credit Suisse

Operator

Good day, ladies and gentlemen, and welcome to the second quarter and first half 2008 NYSE Euronext Earnings Call. My name is Carissa and I will be your coordinator for today. (Operator Instructions) At this time all participants are in a listen-only mode. We’ll be facilitating a question-and-answer session towards the end of this conference. At that time, if you wish to pose a question, you may key “*1”. If at any time during the call, you require assistance please press * followed by 0 and a coordinator will be happy to assist you. I would now like to turn the presentation over to your host for today''s call, Ms. Effie Epstein from Investor Relations. Please proceed.

Effie Epstein

Good morning. I am Effie Epstein with Investor Relations at NYSE Euronext. Welcome to our conference call for NYSE Euronext second quarter 2008 results, which are outlined in our press release issued earlier this morning. During this call, our comments may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are based on NYSE Euronext current expectations and involve risks and uncertainties that could cause NYSE Euronext actual results to differ materially from those in the statements. These forward-looking speak as of today and you should not rely on them as representing our views in the future. Please refer to our SEC filings for a full discussion of the risk factors that may affect any forward-looking statements.

Except for any obligation to disclose material information under the Federal Securities Laws, NYSE Euronext undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after this conference call. Please note that the results of operations of the Euronext NV for the second quarter of 2008 are reported under US GAAP and are incorporated in today''s earnings press release under the caption European operations in the accounting tables.

We will discuss non-GAAP financial measures during this call. These non-GAAP measures are fully reconciled in the tables attached of the text of the release. We believe that these tables provide investors useful information about our business trends. However, our non-GAAP measures do not replace and are not superior to GAAP measures. With me on today''s call are Duncan Niederauer, Chief Executive Officer, Mike Geltzeiler, Group Executive Vice President and Chief Financial Officer, Larry Leibowitz, Group Executive Vice President, Head of US Markets and Global Technology, John Halvey, Group Executive Vice President and General Counsel and Stephane Biehler, Chief Accounting Officer and Corporate Controller.

I''ll now turn the call over to Duncan. At the conclusion of our prepared remarks, we will take your questions.

Duncan Niederauer – Chief Executive Officer

Good job, Effie, thank you. Good morning, everyone, and thanks for joining the quarterly call. Following some briefly initial remarks, I''ll turn the call over to our new CFO, Mike Geltzeiler, who will provide more detail on the second quarter 2008 results. I''ll then offer a few thoughts on our performance and ongoing activities before we open it up for questions. Let me apologize in advance for being a little hoarse this morning. When you hear everything we have going on, you may think that it is our collective exhaustion manifesting itself. I may be exhausted but it has nothing to do with that it has a lot more to do with last night''s Bruce Springsteen''s concert.

As you also heard Effie did a terrific job in place of Gray Stein our now Former Head of Investor Relations who informed us a couple of weeks ago of his intention to join Apollo Management in the same capacity. Gray was terrific to work. He did a great job to the company and for our shareholders. We miss him and we wish him well and we expect to bring Apollo to list with us when they are ready forward. Currently we are conducting a search for his successor.

NYSE Euronext performed well in the second quarter of 2008 during which we celebrated the first anniversary of the merger of NYSE and Euronext. Strong trading activity in an ongoing focus on expense management contributed to gains in revenue, net income and earnings per share compared to the second quarter of ''07. We experienced steady customer demand across our diverse businesses and demonstrated our ability to post gains even in the most challenging market conditions. We''re in a complex business and with all we''ve been doing I understand it might be difficult for analysts, investors and others to completely get their arms around our story. I''ve asked Mike to provide greater financial transparency regarding our operations and initiatives in his comments. This is something we hope to continue to do moving forward.

Companywide, we remain focused on realizing balanced revenue growth across our businesses, operating more efficiently and controlling expenses, executing our strategic business plan and identifying new opportunities that produce value and improving our competitive position in the US and Europe. We''re making great progress on all fronts, yet there''s still a lot more to accomplish.

We''re well on our way to delivering the merger-related $250 million in tech run rate savings and $25 million in non-technology run rate savings by the end of 2010. While we''re cutting costs, we continue to invest in technology to better serve our customers, to deliver new products and services and to improve our competitive position. This is essential to grow and differentiate our franchise.

Our goal continues to be to become the most integrated, diversified, customer-focused and technologically innovative company in the global exchange industry. With that in mind, we''ve expanded our global footprint with our investment in Qatar''s Doha Securities Market, launched our Advanced Trading Solutions’ commercial technology platform, laid the groundwork for our US futures business and won the overwhelming approval of the American Stock Exchange members on the pending merger all during the second quarter. We view these efforts to all being long-term building blocks for our business.

In addition to using capital to grow our franchise, we remain committed to providing returns to our shareholders. Following the close of the Amex transaction, which we expect will be in early to mid-September, we intend to implement the previously announced $1 billion stock repurchase program, subject to other conditions, including strategic and credit considerations.