Good day, ladies and gentlemen, and welcome to the Nasdaq Third Quarter 2015 Results Conference Call. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session and instructions will follow at that time. As a reminder, today's call is being recorded. I would now like to turn the conference over to Ed Ditmire, Vice President of Investor Relations. Sir, you may begin.

Good morning, everyone, and thanks for joining us today to discuss Nasdaq's third quarter 2015 earnings results. On the line are Bob Greifeld, our CEO, Lee Shavel, CFO; our Co-Presidents, Adena Friedman and Hans-Ole Jochumsen; Ed Knight, our General Counsel; and other members of the management team. After prepared remarks, we'll open up to Q&A. The press release and presentation are on our website. We intend to use the website as a means of disclosing material, non-public information and complying with disclosure obligations under SEC Regulation FD. I'd like to remind you that certain statements in this presentation and during Q&A may relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from these projections. Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our press release and periodic reports filed with the SEC. I now will turn the call over to Bob.

Thank you, Ed, and good morning, everyone, and thank you for joining us today to discuss Nasdaq's third quarter 2015 results. I'm here today joining this call from our London office, an important and growing hub for many of our businesses. It's always a pleasure to visit this great city. Turning to our performance in the third quarter, I am pleased to announce that this franchise delivered its best quarter ever in terms of revenue, non-GAAP operating profit, pre-tax income, net income and diluted EPS. What is even more interesting to me is that we delivered record results again for our shareholders despite significant FX headwinds, all the while we continue to heavily invest in our future. During the quarter, we're also pleased to see accelerating organic growth, not only in our market services segment, which benefited from favorable macro factors, but also across our non-transactional segments. Positive organic revenue growth, which excludes foreign exchange and acquisition impacts, was contributed by all four business segments. Because of our continued strong execution and the significant cash generation our model delivers, we were in a position to be able to return almost $300 million to shareholders through buybacks and dividends during the period. This is certainly a prized position that all companies strive to achieve and one that Nasdaq is pleased to be able to achieve this quarter. Today, I want to focus the bulk of my remarks again on the strength of our business model and how that is contributing not only to results we saw during this quarter, but how it is also creating additional upside opportunities across the franchise. We talk a lot here at Nasdaq about innovation and our ambition to lead change on behalf of our clients is a core tenet of our culture. We also, however,…

Thanks, Bob. Good morning, everyone. The following comments will focus on our non-GAAP results. Reconciliations of the GAAP to non-GAAP results can be found in the attachments to our press release and in the presentation that's available on our website at ir.nasdaq.com. I want to start off as I did the last few quarters by highlighting the impact the stronger dollar had on our results as it obscures in many cases the solid organic growth of our business. Excluding the impact of FX, our revenues would have been up $55 million or 11% from the prior year and operating income would have been up $30 million or 13%. In order to provide a greater understanding of these effects on the business units, we continue to provide a schedule of FX impact on the revenues for each business unit on page 15 of the presentation. So let's start by reviewing third quarter revenue performance relative to the prior year quarter as shown on page three of the presentation. The 6% or $32 million increase in reported net revenue of $529 million consisted of organic growth in the non-trading segments' revenue of $24 million or 8% due to growth in listings, information services and market technology, plus $9 million in revenues from the Dorsey Wright acquisition, reduced by a $12 million FX impact for a net $21 million increase in reported revenues. Organic growth in market services net revenues of $22 million or 12%, resulting principally from higher cash equity revenues, reduced by an $11 million FX impact for a net $11 million reported increase. Moving to page four in the presentation, we show how organic growth breaks down historically between the non-transaction, information services, technology solutions, and listing services segments, which had 8% organic growth this quarter and the volume sensitive…

Operator, can you please open the lines for Q&A?

Our first question is from Rich Repetto with Sandler O'Neill. You may begin. Richard H. Repetto - Sandler O'Neill & Partners LP: Good morning, Bob. Good morning, Lee.

How are you doing, Rich?

Good morning, Rich. Richard H. Repetto - Sandler O'Neill & Partners LP: I am doing fine. I appreciate you both addressed the capital return program and especially the accelerated buyback. But I guess my one question would be on the follow-up to that. So you did draw – when you look at – you did drawdown on the revolver and this just wasn't a 2x or 3x the prior quarter buyback. This was a 10x. And I am just trying to see when you look at the stock price, yeah, it broke $50 but it had broke $50 in both the other prior two quarters. So just trying to understand how you balance a little bit more and I know you addressed it, both of you, in the prepared remarks, but how you balance the three things: the cap return, acquisitions, and investment? And then what can we expect going forward? Can we see this lumpy buyback program going forward? I know shareholders like the buyback, but, anyway, your color.

All right. So, Rich, not even a good quarter or a very good quarter? I was living through your compliment there, Rich. Richard H. Repetto - Sandler O'Neill & Partners LP: Excellent quarter, Bob. You outperformed.

Thank you. Thank you. I feel better now. All right. So I think Lee touched on it, but I would say this. Probably the trigger was, as I said before, we've looked at a lot of different acquisitions during the last 12 months to 18 months. And some of the multiples that were being paid were in our mind somewhat eye-popping and somewhat representative of a little bit of an asset bubble. And we said okay. If this is the state of play and it's going to going to be this way and we have no interest in paying 18 times EBITDA, we probably have a better use for our capital. And that is to buy our own shares which obviously we're not trading at that. So I think ourselves and management and the board reflected upon it and came to that conclusion and obviously decided it was the time to act. Now, this obviously represents a lumpiness, as you said, as nothing that we can do on a consistent basis. But you do have to recognize it over the fullness of time, as you've seen in the last three years to four years, we will be acquiring our shares when we think it represents a particular opportunity for us to create value for our shareholders. Richard H. Repetto - Sandler O'Neill & Partners LP: Okay. I know. I follow that – the acquisition sort of environment but the levering up a little bit, I guess, is something new. But, anyway, I don't want to ask any more questions. I got my one. Thanks.

All right. Thank you.

Thank you. Our next question is from Chris Allen with Evercore. You may begin.

Good morning, guys. Nice quarter.

Thank you Chris.

Just wanted to touch on corporate solutions. You mentioned that you're seeing positive net subscription sales for the third quarter in a row. Wondering if maybe you can give us a reference in terms of how material that is. The revenue trajectory obviously hasn't been – it hasn't been great. It sounds like a lot to do with FX. Just wondering where you stand from a competitive pressure standpoint other than issuing prior quarters. Just trying to get a better sense of when we can start to see the trajectory start to improve from here?

Okay. So, as we said before, certainly, we will make progress with corporate solutions during this year. And I think under Adena's leadership, we've done a very good job there. But we also recognize there is certain element of a holding pattern to this year. And that we are spending a lot of time, effort and money and I think very intense engagement with our customers as we start the next-gen product. So I think this quarter represents a strong trend line which we expect to accelerate as we go into the new product cycle in 2016. Adena, would you like to add to that?

Sure. So, Chris, I think that we are seeing definitely some clients very excited about the new platform. And, as Lee mentioned, we're seeing acceleration of new sales in the IR Insight business because of the new platform coming down the road. Also, Q3 does tend to represent a seasonally low quarter with regard to revenue because of the fact that some of our revenue recognition comes from using certain services in a quarter. And there are fewer press releases issued and there are fewer web conferences held during the third quarter just because of the holiday season. So that also tends to be reflected in the third quarter results for corporate solutions. But, overall, we are seeing positive momentum in the business and the competitive landscape does continue to be very competitive. But we are feeling good about the trajectory of the business in general.

And I would tie back to the comments I made in my prepared remarks. It's definitely a hallmark of Nasdaq here that we have to first look at our competitive positioning and how we were doing in that positioning in, certainly relative to our peers. And to the extent we improve that competitive positioning, the financial results will follow. So we saw evidence of that in the third quarter. And, again, I highlight. We are spending a lot of time, effort and money for what will represent truly innovation in the IR space. And we're excited to be able to launch that product going into the first quarter of next year.

Great. Thanks.

Thank you.

Thank you. Our next question is from Rob Rutschow with CLSA. You may begin.

Hey. Good morning, everybody.

How are you doing, Rob?

Good. I was hoping to follow-up on Chris's question about corporate solutions. I think the product that you're rolling out is very impressive and should certainly help arrest some of the customer attrition you've had. I am hoping that you might be able to give us some metrics around what your customer attrition is in the corporate solutions business. And even if you can't give us exact numbers, kind of at least an order of magnitude that that in a new product might help address.

Yeah. So I would say, one, we don't have exact numbers. And we can certainly think of how we'd come up with them. But we are on a net basis seeing growth in our customer list right now. So we're excited about that. And, as I said, we're increasing the number of wins that we have. And this is all a prelude to major new products coming towards the end of the year. Adena, do you want to embellish that?

Sure. So I think that we do, in fact, provide some information regarding our overall retention rates within the business. And we are experiencing just below 90% retention but that generally has been consistent. There are certain parts of our business that are improving in those numbers and there's also certain parts of the business that are well above that. But we do track that and we are seeing improvements in key parts of the business in the retention rate. But that retention rate includes, well, call it, uncontrollable cancels related to mergers, acquisitions and bankruptcies, as well as other things in terms of clients having to move away from services due to budget constraints. At the same time, we also feel that we are seeing, I think, very good growth in those retention rates in some of our key products and we continue to track that very carefully.

And may I just add a little directional color, Rob, to Adena's response is that in the third quarter relative to the second quarter, we saw improvements in all of our products from a retention standpoint with the exception of our advisory product which has been a competitive sector for us. And the IR Desktop retention remains steady over that period. So I would say kind of broad improvement. There always are going to be one or two products where we have faced some additional pressure and in this period advisory was that one.

Okay. Great. Thank you.

Thank you. Our next question is from Chris Harris with Wells Fargo. You may begin.

Thanks. Good morning, guys. Wondering if -

How are you doing, Chris?

Hey, doing well. Wondering if you could talk to any revenue synergies and I'm really thinking mainly here of cross-sell opportunities. You guys might be getting out of all the businesses you put together. It's kind of hard for us to see that looking from the outside. But just wondering if you can comment – if this is happening and to the extent it's happening.

Are you talking about any particular business?

No, just really across the entire franchise in the aggregate. Whether you guys are seeing opportunities to cross-sell? I know that IR, the Thomson Reuters acquisition was a new customer set relative to a lot of the existing customers at Nasdaq, more broadly.

Right. So let me start with the transaction business. When you look at the initiatives we have, whether that be the Tom initiative, NLX, NFX, things we're doing with respect to our dark pool strategy, it's all based upon us building a solid foundation of relationship with our customers. We definitely take customer input to guide how we invest in internal R&D. And we're seeing definitely the fruits of that labor here. Obviously, on the corporate solutions side, our listing franchise, we have a deep relationship at the very highest level of those companies. And that's a natural point of leverage with us. But it's also important to recognize we have 10,000 customers. And many of them are not listed with us. And in that situation, the breadth of our product line allows us to walk the halls in a more comprehensive fashion than our competitors who tend to be point solution providers can do.

Okay. Thank you.

And I just want to add, again some directional color. One thing that we're tracking in corporate solutions is, on a quarterly basis, the average number of products per client, average revenue per client, and we have seen steady progress in both of those metrics which, I think, is a sign of continued success in working off of that existing customer base and selling additional products and generating more revenue from it. So that's something that we're watching carefully and are pleased with the specific progress that we've made over the past four quarters.

Thank you. Our next question is from Ashley Serrao with Credit Suisse. You may begin. Ashley Neil Serrao - Credit Suisse Securities (USA) LLC (Broker): Good morning.

How are you doing? Ashley Neil Serrao - Credit Suisse Securities (USA) LLC (Broker): Doing well. I was curious if I now look at all the initiatives that you have right now more on the trading side, the NFX, NLX, what's the current drag on EPS from a combination of those two?

Lee, do you have that number?

Yeah. So, Ashley, first of all, both of those initiatives are within the GIFT expenses, which, in aggregate, is in the $30 million to $40 million range as we've provided from a guidance standpoint. But, as we've said previously, NLX is approximately $0.02 per quarter and NFX is below that level. So that gives you some sense of the aggregate scale of those initiatives on a quarterly basis. Ashley Neil Serrao - Credit Suisse Securities (USA) LLC (Broker): Okay. And just following-up on trading, one of the initiatives that the press is reporting you're going to be launching next year is FX. I was hoping if you could just share some color on what your intentions are in that arena and how do you see yourself differentiating yourselves from your peers? Was that as – that happens to be one market where pricing definitely matters.

Yeah. So I can't speak for what you're reading in the press, but we haven't announced any FX initiatives or launching next year. I am sitting here in London with Hans-Ole. Hans-Ole, have you announced anything without telling me? So, yeah. So I don't know where you're getting that information but it's not correct. Ashley Neil Serrao - Credit Suisse Securities (USA) LLC (Broker): So there is no initiative in play?

Right. Ashley Neil Serrao - Credit Suisse Securities (USA) LLC (Broker): Okay. All right. Thanks for taking my questions.

Thank you. Our next question comes from Kyle Voigt with KBW. You may begin. Kyle K. Voigt - Keefe, Bruyette & Woods, Inc.: Hi. Thanks for taking my questions and congrats on a good quarter.

Thank you. Kyle K. Voigt - Keefe, Bruyette & Woods, Inc.: Just turn to NLX again, I mean just given that another large exchange that's just announced the planned launch of an interest rate futures exchange in Europe, can you just talk about your commitment to NLX and how you feel that you can fare from a competitive perspective or what the value proposition will be going forward? Thanks.

Definitely, definitely. So, one, I would say is obviously that announcement was not unexpected. And I think it was expected many months before. So it was no surprise there. But clearly we're in close touch with our customers. And I would say that since that announcement, we've reconfirmed with our customers that there is no change in plans they have with respect to NLX. I've previously stated that we needed to proceed with NLX-2 with some core support in a very meaningful way from some of the major banks. And we're continuing along that path. And, right now, we remain optimistic that we're going to get there. And I also would want to make it clear that the world that we envision in the listed futures world is not that dissimilar from what we've seen in the equity world where we expect them to have more than one trading venue clearing through a common clearinghouse. So if we have LCH playing the essential role that the DTCC would play in the U.S. equity world, we certainly see that our customer could trade on one venue and have that then – as long as it's clearing in the same venue, then it's basically fungible. And it puts the customer in a position where the different trading venues can compete quite aggressively against each other. And you have a situation in listed futures world where the customers have smart order routers. And if they don't they are planning to have them which allow them to create essentially a virtual book between the different venues. So that's the world we see developing. It's one we're very comfortable with. It's one we compete in our transaction businesses today. And when you see the results of our transaction businesses in this quarter, in particular, you can see that we can run in that competitive world and how efficiently rerun our business as you can still run it with a very healthy margin. So that's where we see the world developing. Kyle K. Voigt - Keefe, Bruyette & Woods, Inc.: All right. Thanks a lot for the color.

Thank you. Our next question is from Ken Hill with Barclays. You may begin.

Hey. Good morning, everyone. I wanted to touch on -

Good to see you.

Thanks. I wanted to touch on technology again but talk a little bit about the market tech side. I think one nice piece you have guys have been smart. There was some news, I think, earlier in the quarter about you guys supplying market surveillance technology for a Chinese Securities Exchange and some mainland firms. So how are you able to make inroads there in what's historically been a pretty tough place to do business? And then on a related note, you guys announced, I guess, surveillance from dark pool. How do you see those two opportunities kind of unfolding and actually adding to the revenue picture over time?

Yeah. So I'll start and, let's say, one, obviously, SMARTS has been a very strong acquisition for us and it's kind of the model we'd like to use where as a smaller successful company we were able to lever our distribution capability and also significantly ramp up the R&D spending, where we came out with the products for the brokerage community, where at the time of acquisition it was primarily geared around exchanges and/or regulatory bodies. And so you saw evidence of additional products set as you mentioned with the dark pool. We have more products coming. I say, across the planet, you have increased intention and we think that will continue for surveillance. It's necessary in the markets we live in. And, clearly, whether you're in China, whether you're in Europe or the U.S. that is a common global phenomenon. And our job is to make sure we're delivering the right products and services to meet that growing and real need. And I think the team has done an exceptional job doing that. So the need for surveillance is no different in China than it is in other parts of the world. Adena, do you want to add to that?

I would just add that we've been in Hong Kong for well over a decade. We have had a good team there. And we've been working with exchanges and as well as broker-dealers in Asia for many, many years. So it is a testament to the relationships that we've been able to develop over the years to be able to find opportunities to work with exchanges as well as broker-dealers in China as well as all over Europe – I mean all over Asia. And I think the team has done a great job there.

Thanks for taking my question.

Thank you. Our next question is from Michael Carrier with Bank of America. You may begin.

Thanks, guys. Just a question on the new initiatives in the private markets. It seems like you are increasing maybe your focus on that space. So I just want to get a sense like what's that target market? Where do you see those revenues over the near-term? Or is it more of a pipeline where you establish relationships with those firms and then obviously when they IPO, then you have them longer term as well? And then if I can do one side, just really on the market data, I just wanted to see if the audit revenues this quarter were that significant or not.

All right. So let me start with NASDAQ Private Markets. And it's important to recognize that we seized on this opportunity based upon the passage of the JOBS Act. And the JOBS Act said that you could stay private with up to 2,000 shareholders and employees did not count. The prior rule was 500 and employees did count. So we said a company could go a long way in its evolution and stay private and we had to make sure that we provided solutions for them. So certainly the relationships we build with these companies in the pre-IPO phase, we have a fundamental belief that they will help us with our IPO win rate. So that's an element to it. But that's a secondary benefit because we think the market by itself is quite exciting. And we certainly believe that a company similarly situated with respect to size and/or complexity will earn for us an equal amount of revenue if not greater than it would if it was in a public company context. But our job is to meet the customer need where companies want to stay private for a longer period of time. We actually support that notion in general. In that, you should only come public when you have a mature business model that can withstand the rigors of these quarterly calls. So we think there will be an increasing number of private companies. And we're there to meet the totality of their needs. So within NASDAQ Private Market, now obviously being combined with SecondMarket, they have a lot of needs that we have developed for a public company and we have to make sure we target that for the private company. We think the liquidity needs of these private companies will evolve over time. We run what's known as SOPs today. We do it on an episodic basis. And we're starting to see some trend line where companies want to run these liquidity programs on a more consistent and regular basis. We also see the broadening of participation in these liquidity programs where they are today primarily employee-based. And we certainly think it will evolve to where early stage investors can use this mechanism for liquidating their position or second stage investors can use it for coming into the marketplace. So it's something that we think has tremendous potential for us. And, as I said, we think the revenue potential per company in the fullness of time is equal to a greater than the revenue potential of the company in the public market context.

Okay.

And, Michael, on your question on audit, audit was up just slightly – is up $1 million from the prior quarter and up $2 million from the year ago quarter. So I'd say consistent with kind of the lower level of audit fees that we've had but it was a slight increase from prior periods.

Okay. Thanks a lot.

Thank you. Our next question comes from Brian Bedell with Deutsche Bank. You may begin.

Good morning, folks.

How are you doing, Brian?

Good. Good. How are you? Congrats on a good quarter also. Just back on the corporate solutions side, given the IR products ramping up in the first quarter and attrition coming down and the headwind that you had in 2015 this year from foreign exchange transfers, should we expect – I guess, can you sort of make a statement that you think technology solutions revenue all-in, inclusive of the market technology, can actually exceed your mid single-digit growth long-term outlook in 2016? And if you maybe just talk again about the operating margin that you see in that segment with the integration going very well. Thanks.

Yeah. So, Brian, I do want to start by answering that question in a different way. I believe right now that the corporate solutions business has to be primarily judged by how good our products are, how good they are relative to the competition, and what momentum do we have with our customers. The financial results will follow if we do these things right in 2016. So, great credit to the team. I think we've cleaned up, what I'll call, the operational aspects of the business over the last year or so. Our touch points with our customers have improved quite dramatically. We're seeing signs of that in the financial performance. But, more importantly, as we deal with our customers, they recognize that we are on the move. We're making progress. And you have the whole world anxiously awaiting now our next-gen product. And, as I've said previously, we are in the unique position to take our development might and our development muscle and turn it to this sector of the marketplace. So we don't have any competitors with our kind of technology capability and we're investing in it. We're investing heavily in it. And we're excited with the progress the team is delivering on time, on schedule. Hopefully we'll finish on budget. And good things will happen from there. The other general point, are you in a market segment? Once you are more competitive, that can grow over time. And we certainly believe that corporate solutions is really strategically placed. I mean to be running a public company today is an intense endeavor and you have an increasing need for information to help manage that and then also communicate to your shareholders and your stakeholders. And we're there positioned to meet those needs.

And just any kind of clarification on the operating margin that you are forecasting for technology solutions in 2016?

No. No.

No. As I said, I will be focused on that soon enough. But right now, we're making sure the team is doing all the right things. This is a function. You do the right things, the margins will come. Now if you're expecting this business to have margins like we have in index and data then we won't get there, right? So I don't want to create any false expectations but we certainly know what a world-class software company should have as margins. And that's clearly where we're going to get to.

Okay. Thanks.

Thank you. Our next question comes from Ken Worthington of JPMorgan. You may begin.

Hi. Good morning. Can you share your views on the evolution of electronic trading of fixed income? And then together, can you update us with how your eSpeed initiatives are progressing? Thanks.

Right. So I would say certainly that you will be witnessing a fundamental change in the fixed income market over time. But it's also wrong to think that it's going to look like the equity market over time. It has different dimensions to it, different complexities to it which will lead it down a different path. Clearly, we identified U.S. government treasuries as a place for us to start because that's the one area of fixed income that does look and feel like the equity market does in a fully deployed basis. So we're keenly aware of what's going to change in fixed income, in general. We have views of where it's going to end up. And then obviously we have to pay attention to where it's a proper place for us to enter that market. With respect to eSpeed, I think I referred on prior calls to the fact there is change in the market. And you see a number of our customers have traded in the dark in an increasing basis. And I think under Hans-Ole's leadership, the team has come up with an innovative approach to that shifting market structure. We had the first launch of it just this past Monday and it's called eSpeed Elect. And it allows segmentation in the customer base, so customers can choose who they want to trade with and give the pricing that's appropriate to their customer base. And it also allows them to do some of those transactions assuming they are respecting the lit market in the dark. And in many ways, it's a market structure we had envisioned for the U.S. equity market structure. We're able to put it into the fixed income market to the treasury market. And we're excited about the prospects. It's obviously way too early to declare anything today. This week was kind of a semi beta launch where we came out with it in a limited basis. But we'll see a full release of it as the quarter waxes on. Hans-Ole, you want to add anything to that?

Just one thing that, as Bob already have expressed, we are extremely customer focused and centric. And it also means that we have a dialogue also on the European and the U.S. side with the market participants in the fixed income side about how to address the challenge in the fixed income market going forward. And, broadly speaking, part of that is increased product cost of capital coming out of regulation and the past requirements. The other element is this new regulation like, for example, the new exchange regulation in Europe in week or two which definitely influence the fixed income market. But also in the last two days, conference organized by Fed in New York showing us that there is a high likelihood that we will see more regulation also coming into the U.S. treasury market. So we stay very close contact with our customers to make sure that we develop solutions together with them.

Great. Thank you very much.

Thank you. I am showing no further questions at this time. I'd like to turn the call back over to Mr. Greifeld for closing remarks.

Great. Well, first off, thank you, everybody, for attending this call today. As I said in my prepared comments, this was truly a remarkable quarter for us. And we congratulate the team on great execution. We're seeing the power of the business model, but it's also important to highlight that this is a balanced quarter. Our results were in no way, shape optimized for the quarter. If anything, you could say that our investments in the future increased during the quarter, which we're proud to do. But we also balance that with a very strong return of capital to our shareholders. So, in many ways, we're pleased with the quarter, but, most importantly, it gives us the platform to continue to grow and continue to provide returns to our shareholders. So thank you for your time. Look forward to talking to you in the near future.

Ladies and gentlemen, this concludes today's conference. Thanks for your participation and have a wonderful day.