NYSE Euronext, Inc

July 10, 2013

NYSE Euronext, Inc. (NYX-NYSE) $41.59

Note: FLASH REPORT; more details to come; changes are highlighted. Except where noted, and highlighted, no other sections of this report have been updated.

Reason for Report: Flash Update: NYSE to House LIBOR from 2014

Prev. Ed.: Flash Update: NYSE to Launch Bourse in Brazil, Jun 19, 2013.

Flash Update (earnings update to follow)

On Jul 9, 2013, NYSE announced that it has become the first exchange to be appointed to administer the benchmark interest rate for short-term unsecured loans – London Inter-Bank Offered Rate (LIBOR). The achievement would solidify its fundamental base through diversification.

NYSE has won this esteemed contract on a nominal token money of £1 ($1.49) and is expected to manage LIBOR by early 2014. The company will manage LIBOR through a new division – NYSE Euronext Rate Administration Ltd. – by implementing a competitive bidding process.

While the new proposition raises commercial and growth opportunities for NYSE, setting up a new LIBOR platform could cost NYSE about £1.6 million ($2.38 million), along with an estimated operational cost of £1 million ($1.49 million) annually.

On Jun 19, 2013, NYSE announced the submission of request to the Securities and Exchange Commission (CVM) to build a new exchange in Brazil. Initially, ATS Brasil has slated the launch of cash equities and exchange traded funds (ETFs) on the Brazil platform. Gradually, the list will be expanded to cover derivative and other securities. The enterprise may commence by the first half of 2014, subject to regulatory approval.

The equity exchange will be launched under the JV with Rio de Janeiro-based Americas Trading Group (ATG) – Americas Trading System Brasil (ATS Brasil), which is 20% owned by NYSE and 80% by ATG. ATS Brasil is also mulling over the sale of 24% of its stake to about 6–8 investors, which include a diverse group of global bank and asset management firms.

On Jun 3, 2013, NYSE and IntercontinentalExchange announced that the shareholders of both the companies have given their approval for the proposed merger. Accordingly, 99% of the voters, who account for 64% of the shares outstanding of NYSE, approved of the merger deal.

On the other hand, 99.7% of the voters, who account for 85.1% of the shares outstanding of IntercontinentalExchange, approved of the merger. Consequently, the 13-year old IntercontinentalExchange has moved one step ahead to take over 220-year old NYSE through the shareholder approval.

On Apr 30, 2013, NYSE announced its 1Q13 earnings results. EPS of $0.57 surpassed the Zacks Consensus Estimate by a penny but were modestly ahead of $0.47 recorded in the year-ago quarter.

NYSE reported GAAP net income of $126 million or $0.52 per share compared with $87 million or $0.34 per share in the prior-year quarter. These primarily included the impact of merger expenses, exit costs as well as stock-based compensation charge during the reported quarter.

Top Line Levels Up

Gross revenues inched up 1% year over year to $963 million in the reported quarter. Meanwhile, net revenues (defined as gross revenues less direct transaction costs consisting of Section 31 fees, liquidity payments and routing and clearing fees) stood at $600 million, at par with $601 million in the prior-year quarter.

Total net revenue also edged past the Zacks Consensus Estimate of $598 million. While trading volumes improved slightly, unfavorable currency fluctuations and lower average revenue per contract in Europe added to the woes.

Top line reflected improvement in transaction and clearing fees that climbed 4.1% year over year to $634 million, while listing and other revenues remained flat at $110 million and $56 million, respectively. However, deterioration was witnessed in market data revenue that declined 8.8% year over year to $83 million. Moreover, technology service revenue decreased 7% to $80 million.

Conversely, revenue from derivatives jumped 14.2% year over year to $201 million, although cash trading and listings’ revenue decreased 5.6 % year over year to $287 million. Even revenue from information service and technology solutions fell 7.4% year over year to $112 million.

During the reported quarter, NYSE raised $12.1 billion in total global proceeds from 26 initial public offerings (IPOs) on its European and US markets, more than any global exchange group. In prior-year quarter, the company had initiated 45 IPOs globally, raising $9.8 billion.

Tight Lid on Expenses

Meanwhile, adjusted fixed operating expenses dipped 8.1% year over year to $372 million, whereas, operating margin improved to 37% from 33% recorded in the year-ago quarter. The effective tax rate was 24% as compared with 25% in the year-ago period.

During the reported quarter, NYSE generated savings worth $147 million from Project 14, which represented 59% of the total $250 million estimated to be saved by the end of 2014.

NYSE exited the reported quarter with a total headcount of 3,171, marginally up from 3,079 in the year- ago quarter.

Financial Update

As of Mar 31, 2013, NYSE’s total debt of $2.5 billion was at par with 2012-end level. Total debt includes $0.4 billion remaining from the 4.8% June 2013 notes, which is slated to be retired in the second quarter of 2013.

At the end of Mar 2013, cash and cash equivalents, investments and other securities were $0.5 billion while net debt was $2 billion. However, total capital expenditure decreased to $27 million from $43 million recorded in the year-ago quarter.

Zacks Investment Research Page 2 www.zackspro.com As a result of flattened debt and lower capital expenditure, NYSE’s debt-to-EBITDA ratio improved to 2.3x at the end of Mar 2013 from 2.5x recorded at 2012-end.

Guidance for 2013

Management reiterated total operating expenses to be around $1.525 billion in 2013. Including the savings from Project 14, expenses are expected to about $1.465 billion.

Previously, NYSE disclosed that the debt-refinancing executed in Oct 2012 should help save an annualized interest expense of $15 million in 2013 and $24 million in 2014. Subsequently, the company anticipated debt-to-EBITDA ratio to improve to 2.0x in 2013 from 2.5x in 2012.

Total capital expenditures are expected to be approximately $150 million in 2013, lower than 2012 levels. Meanwhile, effective tax rate is expected to be between 24% and 25%.

Additionally, NYSE is progressing well with its proposed merger with IntercontinentalExchange Inc., announced in Dec 2012. The shift to ICE Clear Europe and the proposed merger are to culminate in the second half of 2013.

Dividend Update

Concurrently, the board of NYSE declared a regular quarterly dividend of $0.30 per share, which is payable on Jun 28, 2013, to the shareholders of record as on Jun 14, 2013.

Furthermore, on Mar 28, 2013, NYSE had paid a quarterly cash dividend of $0.30 a share to shareholders of record as on Mar 14, 2013.

MORE DETAILS WILL COME IN THE IMMINENT EDITIONS OF ZACKS RD REPORTS ON NYX.

Portfolio Manager Executive Summary [Note: Only highlighted material has been changed.]

NYSE Euronext Inc. (NYX) is a global operator of financial markets and provider of innovative trading technologies. The company's exchanges in Europe and the United States brings together six cash equity exchanges in five countries and six derivatives exchanges in six countries. With more than 8,000 listed issues, NYSE Euronext's equities markets -the New York Stock Exchange, NYSE Euronext, NYSE Amex and NYSE Alternext as well as NYSE Arca - represent one-third of the world's equities trading; the maximum liquidity of any global exchange group. NYSE Euronext also operates NYSE Liffe, the leading European derivative business and the world's second-largest derivative business by value of trading. The company offers comprehensive commercial technology, connectivity and market data products, and services through NYSE Technologies.

Almost 39% of the firms covering the stock provided positive ratings, while 54% assigned neutral ratings. Only 7.7% of the firms rated the stock negatively. Of the thirteen firms covering the stock, eleven provided target prices ranging from $24.00 (6.1% upside from current price) to $35.00 (54.8% upside from the current price).

Zacks Investment Research Page 3 www.zackspro.com Recently NYSE Euronext announced that Intercontinental Exchange intends to buy it for $8.2 billion. The deal is expected to culminate by the first half of 2013, subject to the fulfillment of regulatory compliances in the U.S. and Europe.

Neutral Outlook – 5/13 firms or 53.8%: The cautious firms are of the opinion that revenue headwinds would offset the benefits from cost cuts. The firms anticipate that though expenses have been lowered, it will not be enough to help the company recover from revenue disappointments. Technology revenues will continue to decline owing to their shift of focus from technology outsourcing to internal cost cutting

Moreover, the firms remain skeptical regarding any possibility of new buyback authorization by 2013. The firms believe that in the first half of 2013, deleveraging would take priority over buybacks.

Positive Outlook – 7/13 firms or 38.5%: The bullish firms expect NYSE Euronext to report escalated earnings in the upcoming year driven by cost cutting practices and sound capital management, although revenue growth seems to be unlikely. Due to lower revenue from technologies, lower derivatives trading fees, weak European volume and dearth of near term catalysts, the bullish firms expect a decline in the Euro derivatives complex in 2013. The expectation in low volume across all businesses is slightly offset by lower expense run rate and a lower tax rate expectation. They expect operating leverage to magnify trading volume in the long term.

The positive firms also expect NYSE Euronext to post better numbers in the future owing to decline in interest expenses from high-cost debt refinancing and operating expenses.

They remain skeptical regarding any dividend alteration in future and expect buybacks to reduce in 2013.

Negative Outlook – 1/13 firms or 7.7%

December 24, 2012

Overview [Note: Only highlighted material has been changed.]

The firms identified the following issues for evaluating the investment merits of NYX:

Key Positive Arguments Key Negative Arguments Premier Brand Name – Given NYSE Euronext’’s Intensifying Competition – NYSE Euronext’s dominance in total market capitalization and total acquisition of Archipelago, Amex, and the Nasdaq value traded, the analysts regard it as the premier acquisition of the Instinet Group could create a brand name amongst the financial exchanges. duopoly in the U.S. equities markets, and the reduced New Products – NYSE Euronext launched a host competition for volume could result in higher trading of new products via which it seeks to diversify its costs. income. The upcoming retail derivative market and Debt Structure – NYSE Euronext has been making clearing house in London should be strong growth constant efforts to reduce its debt obligation since the as well as expansion drivers. last year but with little success. The company again Synergies – The analysts expect NYSE Euronext took up a new debt to refinance its previous ones. to reduce costs and report revenue growth with Integration Risks – The combination of NYSE acquisitions. Euronext and other companies is subject to potential Integration – The NYSE Euronext Group is integration issues. aggressively entering into agreements with foreign Regulatory Obstacles – The much awaited proposed exchanges as it works to be the pre-eminent global merger between Euronext and Deutsche Boerse was exchange. blocked by the European Commission citing reason of Market Share – The company’s enhancement of its unhealthy competition. options platform has resulted in increased market Expense – Failure to deliver the expense savings share. goals can act as a potential threat to future earnings.

Zacks Investment Research Page 4 www.zackspro.com NYSE Euronext is a leading global operator of financial markets and provider of innovative trading technologies. The company's exchanges in Europe and the United States trade in cash equities, futures, options, swaps, exchange-traded products, bonds, carbon trading, clearing operations, market data and commercial technology products and solutions. With more than 8,000 listed issues, NYSE Euronext's equities markets - the New York Stock Exchange, Euronext, NYSE Arca and NYSE Amex - represent one-third of the world's equities trading; the maximum liquidity of any global exchange group. NYSE Euronext also operates NYSE Liffe and is in the S&P 500 index, the only exchange operator in the S&P 100 index and Fortune 500. Beginning with the 1Q10 results, NYSE Euronext has changed its segment reporting to reflect how NYSE Euronext’s primary businesses are managed. The new reportable segments are focused on three global business units: Derivatives, Cash Trading and Listings, and Information Services and Technology Solutions. For more information on the Company, please visit its website at www.nyse.com.

Recently NYSE Euronext announced that Intercontinental Exchange intends to buy it for $8.2 billion. The deal is expected to culminate by the second half of 2013, subject to the fulfillment of regulatory compliances in the U.S. and Europe.

Note: The company’s fiscal year coincides with the calendar year.

December 24, 2012

Long-Term Growth [Note: Only highlighted material has been changed.]

Management believes the shift from NYSE Group into the newly-formed NYSE Euronext, the world’s largest and most diverse exchange group will enhance the listings and equity trading operations, and support the growing initiatives in derivatives, bonds, options, and ETFs. NYSE Euronext is committed to providing exceptional shareholder value while expanding its position in the global marketplace. The firms stated that although the competitive market environment will likely remain intense for NYSE’s U.S. cash equity business, they are positive on NYSE as the merger with Euronext makes both financial and strategic sense. They believe NYSE Euronext will be one of the long-term winners in the exchange space, given its strong brand, solid management team, financial strength and established liquidity in cash equities, futures, and options.

The new market centers are already attracting new volume from a variety of market participants in particular, from automated black-box trading companies that were not able to participate in the incumbent exchanges to the same degree, either because of prohibitive pricing structures or due to the lack of adequate technology. The firms believe that comparisons of turnover velocity rates between markets in the U.S. and Europe, as well as developments following the previous market structure changes in the U.S., suggest that volume could increase significantly in Europe.

Following the termination of its proposed merger with DeutscheBoerse, management declared a two- year target plan in April 2012. The plan is projected to drive accelerated earnings growth through a blend of top-line growth initiatives, which includes diversification of growth into non-core space of information and technology.

On March 28, 2012, the company announced its intention of building clearinghouse – NYSE Liffe Clearing – in London that should be operational between 2Q13 and 3Q13. This is a significant attempt to erect an exchange entity on a vertical clearing model.

Zacks Investment Research Page 5 www.zackspro.com Initially, NYSE Euronext projects hope to commence the clearing of derivative contracts, while the equity trades will still be cleared by LCH.Clearnet, which cleared all of the company’s trades. Besides, management also aims to transfer all the derivative trades from Amsterdam, Brussels, Lisbon and Paris to London by the first quarter of 2014.

Moreover, NYSE Euronext’s 3-year cost reduction program worth $250 million has started well and is expected to exceed the target cost savings run-rate of 25% in 2012. Most firms project that the company is on-track to achieve 60% of its cost-synergies by 2013 and 100% by 2014.

December 24, 2012

Target Price/Valuation [Note: Only highlighted material has been changed.]

Rating Distribution Positive Ratings 38.5%↓ Neutral Ratings 53.8%↑ Negative Ratings 7.7%↑ Maximum Target Price $35.00↑ Minimum Target Price $24.00↑ Average Target Price $29.59↑ No. of Analysts with Target Price/Total 11/12

Risks to the target price include regulatory risks, intense competition and peer pressure, unfavorable trading environment, poor economic environment and others.

Recent Events [Note: Only highlighted material has been changed.]

On December 20, 2012, NYSE Euronext announced that Intercontinental Exchange intends to buy it for $8.2 billion. The deal is expected to culminate by the first half of 2013, subject to the fulfillment of regulatory compliances in the U.S. and Europe.

Accordingly, the $8.2 billion deal is based on $33.12 per NYSE Euronext share, which represents a 37.7% premium on NYSE Euronext’s closing price on December 19, 2012. Meanwhile, Intercontinental Exchange plans to fund the transaction by letting out 67% in shares and 33% in cash, which will be raised through cash and credit facilities.

Moreover, the investors at NYSE have the option of taking cash payment of $33.12 a share or receive 0.2581 shares of IntercontinentalExchange for each NYSE share. A third option includes a mix of $11.27 in cash along with 0.1703 IntercontinentalExchange shares per NYSE share, although this funding is restricted to a maximum cash outlay of $2.7 billion and a maximum stock outlay of 42.5 million shares of IntercontinentalExchange.

Zacks Investment Research Page 6 www.zackspro.com Post acquisition, the 220-year old NYSE will own 36% in the 12-year old IntercontinentalExchange, while four members of the former will share the latter’s board.

The merger is expected to generate more than 15% of earnings accretion within the first year of completion of the deal. Going ahead, management projects run-rate expenses synergies of about $450 million, which will be reaped in the second year of the merger startup. Further, NYSE Liffe’s both trading and clearing operations will be merged into ICE Clear Europe. IntercontinentalExchange will also initiate annual dividends of about $300 million, the current dividend payout of NYSE, post merger.

On November 6, 2012, The Company announced its 3Q12 financial results. Operating EPS of $0.44 were $0.03 higher than the Zacks Consensus Estimate of $0.41 but were significantly lower than $0.71 recorded in the year-ago quarter. Consequently, operating net income nosedived 41.9% year over year to $108 million from $186 million in the year-ago quarter.

Gross revenues plummeted 28.3% year over year to $902 million in the reported quarter. Meanwhile, net revenues (defined as gross revenues less direct transaction costs consisting of Section 31 fees, liquidity payments and routing and clearing fees) stood at $559 million, sliding 20.6% from $704 million in the prior-year quarter. It also fell short of the Zacks Consensus Estimate of $570 million.

Financial Update

As of September 30, 2012, NYSE Euronext’s total debt of $2.5 billion was higher than $2.1 billion at 2011-end. At the end of the reported quarter, cash and cash equivalents, investments and other securities were $0.4 billion while net debt was $2.1 billion. However, total capital expenditure lowered to $41 million from $49 million recorded in the year-ago quarter.

As a result of higher debt and capital expenditure, NYSE’s debt-to-EBITDA ratio deteriorated to 2.4x from 1.6x recorded at the end of 2011, which was the lowest level since the inception of this organization in April 2007.

On October 5, 2012, NYSE Euronext raised $850 million from the sale of notes that are slated to mature in October 2017 and bear an interest of 2%. The net proceeds were utilized to pre-redeem $336 million of the outstanding $750 million 4.80% notes that were due in June 2013, €80 million of the €1 billion 5.375% notes due in June 2015, reduction in outstanding commercial paper and for other business operations.

Management believes this debt-refinancing will help save an annualized interest expense of $15 million in 2013 and $24 million in 2014.

Stock Repurchase Update

During the reported quarter, NYSE Euronext bought back 4.7 million shares at an average price of $25.46 per share for about $120 million, thus buying back 15.9 million shares for $424 million in the first nine months of 2012. Accordingly, the company had $128 million of stock available for repurchase at the end of September 2012. Management is also committed to complete this sanctioned $1.0 billion share repurchase program by the end of 2012.

Growth Outlook

While management laid out a detailed long-term growth plan in the first quarter of 2012, NYSE Euronext believes that its ongoing strategic initiatives coupled with its cost reduction plan and lower share count from stock repurchases should aid in achieving higher earnings growth in 2013 and beyond. Effective tax rate is expected to be 24% in 2012.

Zacks Investment Research Page 7 www.zackspro.com Dividend Update

Concurrently, the board of NYSE Euronext declared a regular quarterly dividend of $0.30 per share, which is payable on December 28, 2012, to the shareholders of record as on December 14, 2012.

Revenue [Note: Only highlighted material has been changed.]

Gross revenues plummeted 28.3% year over year to $902 million in 3Q12. Meanwhile, net revenues (defined as gross revenues less direct transaction costs consisting of Section 31 fees, liquidity payments and routing and clearing fees) stood at $559 million, sliding 20.6% from $704 million in the prior-year quarter. It also fell short of the Zacks Consensus Estimate of $570 million.

The deteriorating performance was primarily due to the poor transaction and clearing fees that plunged 36.9% year over year to $570 million as well as market data revenue that declined 8.6% year over year to $85 million. Together, these constitute about 73% of the gross revenue. While listing revenue slipped 0.9% year over year to $112 million, technology service revenue deteriorated 12.0% to $81 million and other revenue slipped 3.6% year over year to $54 million.

Overall, top-line results reflected drastic decline in volumes across all global derivatives and cash trading venues. Alongside, unfavorable currency fluctuations and lower average revenue per contract added to the woes. The financial services technology sales are also experiencing a challenging period.

Provided below is a summary of revenue as compiled by the Zacks Research Digest:

Total Revenue 3Q11A 2Q12A 3Q12A 4Q12E 2011A 2012E 2013E 2014E ($ in M) Digest Average $1,258.0 $986.0 $902.0 $862.0 $4,552.1 $3,702.0↓ $3,735.3↓ $3,958.8↓ Digest High $1,258.0 $986.0 $902.0 $900.0 $4,553.0 $3,740.0↓ $4,013.0↓ $4,241.0↓ Digest Low $1,258.0 $986.0 $902.0 $807.0 $4,552.0 $3,647.0↓ $3,470.1↓ $3,676.5↓ Y/Y Growth 19.8% -9.7% -28.3% -18.2% 2.9% -18.7% 0.9% 6.0% Sequential Growth 15.2% 3.6% -8.5% -4.4% Zacks Consensus $561.0 $2,323.0 $2,408.0

DERIVATIVES

Derivatives net revenue dipped 27.4% y/y to $164 million in 3Q12 and incorporated a $4 million negative impact from foreign currency fluctuations.

Moreover, European derivatives products ADV stood at 3.4 million contracts in 3Q12, declining 22.1% y/y and 27.2% q/q. The company’s U.S. equity options ADV decreased 27.4% y/y and 9.8% q/q to $3.5 million contracts.

CASH TRADING AND LISTINGS

Zacks Investment Research Page 8 www.zackspro.com Cash trading and listings net revenue dipped 20% y/y to $282 million in 3Q12 and included a negative impact from foreign currency fluctuations worth $11 million. The decrease was primarily due to lower average daily trading volumes. European cash ADV of 1.3 million transactions in 3Q12 decreased 31% y/y and 23% q/q. However, European cash market share (value traded) in NYSE Euronext's four core markets was 68% in 3Q12, up from 66% in 3Q11. U.S. cash products ADV declined 39% y/y and 13% q/q to 1.6 billion shares in 3Q12. Tape A matched market share was 32% in 3Q12, decreasing from 36% in 3Q11.

INFORMATION SERVICES AND TECHNOLOGY SOLUTIONS

Net revenue for the segment edged down 10% y/y to $113 million in 3Q12 and included a negative impact from foreign currency fluctuations worth $5 million. The deterioration in net revenue compared with 3Q11 was primarily driven by a fall in enterprise software and market solutions revenue with the changing financial scenario due to the lackluster attitude of customers in purchasing any software or connectivity services.

CORPORATE AND ELIMINATIONS

Corporate and eliminations include unallocated costs related to corporate governance, public company expenses, pension related costs, post retirement benefit plans and inter-company elimination of revenues and expenses.

Components of revenue are discussed below:

Revenue 3Q11A 2Q12A 3Q12A 4Q12E 2011A 2012E 2013E 2014E Components ($M) Transaction & Clearing Fees $904.0 $649.0 $570.0 $514.1 $3,162.0 $2,341.6↓ $2,310.3↓ $2,394.2↓ Market Data Fees $93.0 $87.0 $85.0 $86.9 $370.9 $349.9↓ $360.6 ↓ $375.9↓ Listing Fees $113.0 $112.0 $112.0 $113.5 $446.0 $447.5↓ $463.5↓ $475.1↓ Technology Services Fees $92.0 $87.0 $81.0 $85.5 $358.2 $339.5↓ $358.7↓ $413.3↓ Other Revenues $56.0 $51.0 $54.0 $54.7 $214.9 $215.7↑ $219.5↑ $224.4↓ Total Revenue $1,258.0 $986.0 $902.0 $862.0 $4,552.1 $3,702.0↓ $3,735.3↓ $3,958.8↓

Transaction and Clearing Fees

As per the company, revenue earned from these sources was $570 million in 3Q12 versus $904 million in 3Q11. The results were in line with the Zacks Digest model.

Market Data Fees

NYSE Euronext collects market information fees principally for consortium-based data products and NYSE Euronext proprietary data products. As per the company, market data fees were $85 million in 3Q12 versus $93 million in 3Q11. The results were in line with the Zacks Digest model.

Listing Fees

Companies pay listing fees when they initially appear on the NYSE or NYSE Arca and annually thereafter. Listing fees consist of two components: original listing fees and other corporate action related fees. The former is based on the number of shares originally listed on the exchange, while the

Zacks Investment Research Page 9 www.zackspro.com latter is paid by companies in connection with corporate actions involving the issuance of new shares to be listed on the exchange (like stock splits, rights issue, sale of additional securities, and mergers and acquisitions). As per the company, listing fees were $112 million in 3Q12 compared to $113 million in 3Q11. The results were in line with the Zacks Digest model.

Technology Services Fees

As per the company, technology services fee was $81 million in 3Q12 versus $92 million in 3Q11. The results were in line with the Zacks Digest model.

Other Revenue

As per the company, other revenue was $54 million in 3Q12, decreasing from $56 million in 3Q11. The results were in line with the Zacks Digest model.

Provided below is the graphical representation of revenue segments:

2011A Segm ent Revenue 2012E Se gm ent Reve nue Transaction Transaction & Clearing & Clearing 5% 8% Fees 6% Fees M arket Data 9% M arket Data Fees Fees 10%

Listing Fees 12% Listing Fees 8% 9%

Technology Technology Services 64% Services 69% Fees Fees Other Other Revenues Revenues

2013E Segm ent Revenue 2014E Segm ent Revenue Trans action Trans action & Clearing & Clearing 6% Fee s 6% Fee s 10% M ark et Data 11% M ark et Data Fee s Fee s

12% 10% Listing Fe es Listing Fe es 12% 10%

62% Te chnology Te chnology Se rvices 61% Se rvices Fee s Fee s Othe r Othe r Re venue s Re venue s

Zacks Investment Research Page 10 www.zackspro.com Outlook

Based on the consistent sluggishness in trading activity, most firms have pulled down their volumes expectations from Europe, given the strict pricing competition. The outlook for revenues from technology and market data also remains subdued for 4Q12 given the industry headwinds and regulations that require restructuring of business, leaving little scope for investments in the technology space.

For more details on individual analyst opinions please see the Consensus tab of the NYX spreadsheet.

Margins [Note: Only highlighted material has been changed.]

As per the Zacks Digest Model operating margin was 19.0% in 3Q12, decreasing from 22.9% in 3Q11 and 20.9% in 2Q12. GAAP Operating margin was 17.0% in 3Q12, decreasing from 20.6% in 3Q11 and from 19.6% in 2Q12. Net Operating margin was 12.0% in 3Q12, declining from 14.8% in 3Q11 and from 13.0% in 2Q12. The company’s net margin was 12.0% in 3Q12, falling from 15.9% in 3Q11 and from 12.7% in 2Q12.

Provided below a summary of margins compiled by the Zacks Research Digest:

Margins 3Q11A 2Q12A 3Q12A 4Q12E 2011A 2012E 2013E 2014E Operating Margin 22.9% 20.9% 19.0% 19.1% 22.1% 19.9%↓ 23.1%↓ 26.5%↓ Operating Margin (GAAP) 20.6% 19.6% 17.0% 18.5% 18.7% 18.1%↓ 23.8%↓ 27.6%↑ Net Operating Margin 14.8% 13.0% 12.0% 11.5% 14.4% 12.3%↓ 15.0%↓ 18.0%↓ Net Margin (GAAP) 15.9% 12.7% 12.0% 10.1% 13.6% 11.0%↓ 14.3%↓ 17.8%↑

Fixed operating expenses, dipped 7% y/y to $388 million in 3Q12, although, operating margin deteriorated 1000 basis points to 31% from 41% in 3Q11. Total headcount at NYSE Euronext was 3,061 as of September 30, 2012 marginally declining from 3077 as of December 31, 2011 and 3074 as of June 30, 2012, despite adding 99 employees from the Corpedia acquisition in June 2012.

Adjusted EBITDA, which excludes merger expenses and exit costs, declined 35% y/y to $235 million in 3Q12. Adjusted EBITDA margin was 42% in 3Q12, down 900 basis points from 51% in 3Q11.

Operating income, excluding merger expenses and exit costs, plunged 41% y/y to $171 million in 3Q12. This included a $10 million negative impact attributable to foreign currency fluctuations.

The loss attributable to the non-controlling interest was $4 million in 3Q12 as compared to a loss of $6 million in 3Q11.

The effective tax rate in 3Q12 was 21%, excluding merger expenses, exit costs and discrete tax items reduced by 400 basis-points from 3Q11.

Business Segments

Zacks Investment Research Page 11 www.zackspro.com Derivatives – In 3Q12, operating income, excluding merger expenses and exit costs, was $68 million, down from $129 million in 3Q11. Adjusted EBITDA margin was 48%, compared with 62% in 3Q11.

Cash Trading and Listings – In 3Q12, operating income, excluding merger expenses and exit costs, was $104 million, dipping from $155 million in 3Q11. Adjusted EBITDA margin was 51%, compared with 57% in 3Q11.

Information Services And Technology Solutions – In 3Q12, operating income, excluding merger expenses and exit costs, was $23 million versus $31 million in 3Q11. Adjusted EBITDA margin was 32%, compared with 36% in 3Q11.

Corporate and eliminations - Operating expenses stood at $25 million in 3Q12, down 46.8% y/y. The decrease was driven by lower merger expenses and exit costs.

Outlook

For 2013, NYSE plans to kick-start NYSE Liffe Clearing, which is projected to incur costs within the range of $1.627–$1.652 billion in 2012, almost in line with management’s prior guidance of less than $1.666 billion. This also includes $30 million estimated for shifting its clearing business from LCH.Clearnet to its own Liffe Clearing.

Nevertheless, NYSE expects to generate annual cost savings worth $250 million by the end of 2014. While most of the annual cost synergies are expected to be generated in the form of intense expense management, $90 million worth of saving is projected from organizational efficiencies that include centralization of operations and expansion of shared service model.

Another $90 million of cost synergies is expected to be achieved by giving up its legacy systems and organizing technology across the business platform. NYSE also anticipates generating another $70 million of savings by narrowing down its business portfolio as well as self-focusing on core operations and services. Through these business-building and cost-cutting efforts, the company expects to recognize 25% of the savings by the end of 2012 and another 60% by the next year-end.

Overall, NYSE looks forward to a disciplined cost management and healthy capital deployment. Although the outlook for trading volumes and currencies remains cautious in the near term, management believes a modest improvement in the operating environment should initiate progress.

For 2012, total revenue is expected to decline more than the decline in operating expenses year over year, thus leading to margin contraction. However, for 2013 and 2014 total revenue is expected to exhibit growth whereas, operating expense is expected to fall inducing margin expansion.

For more details on individual analyst opinions please see the Consensus tab of the NYX spreadsheet.

Earnings per Share [Note: Only highlighted material has been changed.]

NYSE Euronext reported operating EPS of $0.44 in 3Q12 which was $0.03 higher than the Zacks Consensus Estimate of $0.41 but significantly lower than $0.71 recorded in the year-ago quarter. Consequently, operating net income nosedived 41.9% year over year to $108 million from $186 million in the year-ago quarter.

Zacks Investment Research Page 12 www.zackspro.com NYSE Euronext reported GAAP net income of $124 million or $0.44 per share compared with $200 million or $0.76 per share in the prior-year quarter. It primarily includes the impact of pre-tax merger expenses and exit costs of $18 million in the reported quarter versus $29 million in the year-ago quarter and was partially offset by tax benefit of $30 million in the reported quarter against $64 million in the year-ago quarter. The reduction of tax rate in U.K. to 24% from 25% added $0.02 per share to the earnings.

Provided below is a summary of EPS as provided by the Zacks Research Digest:

EPS 3Q11A 2Q12A 3Q12A 4Q12E 2011A 2012E 2013E 2014E Digest Average $0.71 $0.51 $0.44 $0.41 $2.49 $1.82↓ $2.30↓ $2.93↓ Digest High $0.71 $0.51 $0.44 $0.43 $2.50 $1.84↓ $2.52↓ $3.33↓ Digest Low $0.70 $0.50 $0.44 $0.39 $2.48 $1.80↓ $2.12↓ $2.58↓ Y/Y Growth 54.0% -16.6% -38.0% -18.6% 18.7% -27.0% 26.4% 27.7% Sequential Growth 16.3% 8.4% -13.6% -7.5%

Highlights from the above chart are as follows:

 2012 forecasts (12 firms) range from $1.80 to $1.84; the Digest average is $1.82.  2013 forecasts (12 firms) range from $2.12 to $2.52; the Digest average is $2.30.  2014 forecasts (7 firms) range from $2.58 to $3.33; the Digest average is $2.93.

Outlook

The bullish firms have reduced their EPs estimate for 2012 owing to lower trading fees and higher expenses. They have lowered their 2013 EPS estimate to reflect lower share buyback.

As per the Zacks Digest model, the firms expect the share count to decline by 4.7% y/y for 2012 to 250.5 million, 3.7% y/y to 241.3 million by the end of 2013 and further decrease by 1.6% y/y to 237.5 million by the end of 2014. This represents a three-year negative CAGR of 3.3% on 2011 shares outstanding.

As per the Zacks Digest model, 2014 EPS is expected to grow at a three-year CAGR of 5.6%, attributable to 3.0% CAGR projected for net income and a negative CAGR of 3.3% for 2011 shares outstanding.

For more details on individual analyst opinions please see the EPS tab of the NYX spreadsheet.

StockResearchWiki.com – The Online Stock Research Community

Discover what other investors are saying about NYSE Euronext Inc. (NYSE) at:

NYX profile on StockResearchWiki.com

Research Analyst Meenakshi Sharma

Zacks Investment Research Page 13 www.zackspro.com Copy Editor Tanuka De Content Ed. Tanuka De Lead Analyst Meenakshi Sharma QCA Tanuka De No. of brokers reported/Total brokers Reason for Update Flash Update

Zacks Investment Research Page 14 www.zackspro.com