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NASDAQ OMX Reports Second Quarter 2013 Results

Second quarter 2013 non-GAAP diluted earnings per share were $0.62, versus $0.64 in the prior year quarter.  Non-GAAP diluted earnings per share in the second quarter of 2013 excludes $25 million of pre-tax merger-related expenses, while non-GAAP diluted earnings per share in the second quarter of 2012 excludes $37 million of net pre-tax charges primarily relating to income from open positions relating to the operations of the exchange, asset impairment charges and restructuring charges, and $6 million of significant tax adjustments.

On a GAAP basis, net income attributable to NASDAQ OMX for the second quarter of 2013 was $88 million, or $0.52 per diluted share, compared with $93 million, or $0.53 per diluted share, in the prior year quarter.   

"While we are pleased with the broad-based performance across many of our businesses, we experienced unique variances in our cost structure, including financing costs of approximately $2.5 million associated with pre-funding the eSpeed acquisition nearly a month prior to closing, and our organic investments, where several launches of GIFT initiatives added an additional $5 million to our expenses versus the prior year," said Lee Shavel, EVP and CFO, NASDAQ OMX. "The earnings impact from GIFT initiatives is expected to moderate over time, either from improved profitability, and/or from reduced investment, as these initiatives mature."

Mr. Shavel continued, "On the capital front, our investment grade ratings were affirmed and we raised a €600 million, 8-year Euro bond offering, with an attractive, 3.9% effective yield. This offering was instrumental in financing our acquisitions, diversified our funding sources by accessing a new market and reduced our foreign exchange exposure. We continue to have a near-term focus on de-leveraging, and we remain confident in our ability to return to an approximately 2.5x long-term leverage target in the next three to four quarters, at which point we will have more flexibility to consider capital return and deployment options."

At June 30, 2013, the company had cash and cash equivalents of $379 million and total debt of $2,785 million, resulting in net debt of $2,406 million.  This compares to net debt of $1,479 million at December 31, 2012. 

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