Document and Entity Information (USD $) In Billions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Feb. 10, 2011	Jun. 30, 2010
Document and Entity Information
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2010
Document Fiscal Year Focus	2010
Document Fiscal Period Focus	FY
Trading Symbol	ndaq
Entity Registrant Name	NASDAQ OMX GROUP, INC.
Entity Central Index Key	0001120193
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		176,186,830
Entity Well-known Seasoned Issuer	Yes
Entity Public Float			$ 2.3
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No

Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
Current assets:
Cash and cash equivalents	$ 315	$ 594
Restricted cash	60	30
Financial investments, at fair value	253	308
Receivables, net	298	301
Deferred tax assets	13	25
Open clearing contracts:
Derivative positions, at fair value	4,037	2,054
Resale agreements, at contract value	3,441
Other current assets	93	58
Total current assets	8,510	3,370
Non-current restricted cash	105	80
Property and equipment, net	164	164
Non-current deferred tax assets	433	504
Goodwill	5,127	4,800
Intangible assets, net	1,719	1,631
Other assets	149	173
Total assets	16,207	10,722
Current liabilities:
Accounts payable and accrued expenses	142	125
Section 31 fees payable to SEC	82	137
Accrued personnel costs	122	114
Deferred revenue	122	105
Other current liabilities	119	71
Deferred tax liabilities	26	23
Open clearing contracts:
Derivative positions, at fair value	4,037	2,054
Repurchase agreements, at contract value	3,441
Current portion of debt obligations	140	225
Total current liabilities	8,231	2,854
Debt obligations	2,181	1,867
Non-current deferred tax liabilities	698	683
Non-current deferred revenue	170	160
Other liabilities	198	199
Total liabilities	11,478	5,763
Commitments and contingencies
Series A convertible preferred stock		15
NASDAQ OMX stockholders' equity:
Common stock, $0.01 par value, 300,000,000 shares authorized, shares issued: 213,370,086 at December 31, 2010 and 211,713,186 at December 31, 2009; shares outstanding: 175,782,683 at December 31, 2010 and 211,385,464 at December 31, 2009	2	2
Preferred stock, 30,000,000 shares authorized, series A convertible preferred stock: shares issued: 1,600,000 at December 31, 2010 and December 31, 2009; shares outstanding: none at December 31, 2010 and 1,600,000 at December 31, 2009 (classified above at December 31, 2009 as temporary equity)
Additional paid-in capital	3,780	3,736
Common stock in treasury, at cost: 37,587,403 shares at December 31, 2010 and 327,722 shares at December 31, 2009	(796)	(10)
Accumulated other comprehensive loss	(272)	(406)
Retained earnings	2,004	1,610
Total NASDAQ OMX stockholders' equity	4,718	4,932
Noncontrolling interests	11	12
Total equity	4,729	4,944
Total liabilities, series A convertible preferred stock and equity	$ 16,207	$ 10,722

Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2010	Dec. 31, 2009
Consolidated Balance Sheets
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	213,370,086	211,713,186
Common stock, shares outstanding	175,782,683	211,385,464
Preferred stock, shares authorized	30,000,000	30,000,000
Preferred stock, series A convertible preferred stock: shares issued	1,600,000	1,600,000
Preferred stock, series A convertible preferred stock: shares outstanding	0	1,600,000
Common stock in treasury, shares	37,587,403	327,722

Consolidated Statements of Income (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Revenues
Market Services	$ 2,700	$ 2,934	$ 3,176
Issuer Services	344	330	343
Market Technology	152	145	119
Other	1	2	12
Total revenues	3,197	3,411	3,650
Cost of revenues
Transaction rebates	(1,312)	(1,475)	(1,744)
Brokerage, clearance and exchange fees	(363)	(483)	(446)
Total cost of revenues	(1,675)	(1,958)	(2,190)
Revenues less transaction rebates, brokerage, clearance and exchange fees	1,522	1,453	1,460
Operating Expenses
Compensation and benefits	416	412	401
Marketing and advertising	20	15	19
Depreciation and amortization	103	104	93
Professional and contract services	78	76	72
Computer operations and data communications	58	58	54
Occupancy	88	81	65
Regulatory	35	32	29
Merger and strategic initiatives	4	17	25
General, administrative and other	89	55	62
Total operating expenses	891	850	820
Operating income	631	603	640
Interest income	9	13	35
Interest expense	(102)	(102)	(97)
Dividend and investment income	(3)	2	8
Loss on divestiture of businesses	(11)
Income (loss) from unconsolidated investees, net	2	(107)	27
Loss on sale of investment security		(5)
Gain on sales of businesses		12
Debt conversion expense		(25)
Asset impairment charges	(6)	(13)	(42)
Gain (loss) on foreign currency contracts, net			(58)
Income before income taxes	526	391	513
Income tax provision	137	128	198
Net income	389	263	315
Net (income) loss attributable to noncontrolling interests	6	3	(1)
Net income attributable to NASDAQ OMX	$ 395	$ 266	$ 314
Basic and diluted earnings per share:
Basic earnings per share	$ 1.94	$ 1.3	$ 1.65
Diluted earnings per share	$ 1.91	$ 1.25	$ 1.55

Consolidated Statements of Changes in Equity (USD $) In Millions, except Share data	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Common Stock in Treasury at Cost [Member]	Accumulated Other Comprehensive Income (loss) [Member]	Retained Earnings [Member]	Noncontrolling Interests [Member]
Balance at Dec. 31, 2007	$ 2,207	$ 1	$ 1,189	$ (8)	$ (5)	$ 1,030
Balance (in shares) at Dec. 31, 2007		138,869,150
Net income (loss)	315					314	1
Change in unrealized losses on derivative financial instruments that qualify as cash flow hedges, net of tax	(7)				(7)
Foreign currency translation, net of tax	(601)				(601)
Employee benefit plan adjustments losses, net of tax	(6)				(6)
Business combination with OMX AB	2,283	1	2,266				16
Business combination with OMX AB (in shares)		60,561,515
Conversion of Convertible Securities	22		22
Conversion of Convertible Securities (in shares)		1,531,451
Adoption of new accounting guidance for 2.50% convertible senior notes	51		51
Amortization and vesting of restricted stock and PSUs	13		15	(2)
Amortization and vesting of restricted stock and PSUs (in shares)		164,507
Stock options exercised, net	23		23
Stock options exercised, net (in shares)		712,860
Other purchases of common stock, net	3		3
Other purchases of common stock, net (in shares)		57,217
Balance at Dec. 31, 2008	4,303	2	3,569	(10)	(619)	1,344	17
Balance (in shares) at Dec. 31, 2008		201,896,700
Net income (loss)	263					266	(3)
Change in unrealized losses on derivative financial instruments that qualify as cash flow hedges, net of tax	1				1
Foreign currency translation, net of tax	215				215
Employee benefit plan adjustments losses, net of tax	(3)				(3)
Share repurchase program (in shares)	(327,722)
Conversion of Convertible Securities	118		118
Conversion of Convertible Securities (in shares)		8,246,680
Early extinguishment of a portion of 2.50% convertible senior notes	(3)		(3)
Amortization and vesting of restricted stock and PSUs	20		20
Amortization and vesting of restricted stock and PSUs (in shares)		260,721
Stock options exercised, net	22		22
Stock options exercised, net (in shares)		814,575
Other purchases of common stock, net	7		7
Other purchases of common stock, net (in shares)		166,788
Purchases of subsidiary shares from noncontrolling interests	(7)		(2)				(5)
Sale of subsidiary shares to noncontrolling interests and other adjustments	8		5				3
Balance at Dec. 31, 2009	4,944	2	3,736	(10)	(406)	1,610	12
Balance (in shares) at Dec. 31, 2009		211,385,464
Net income (loss)	389					395	(6)
Reclassification adjustment for loss realized in net income on cash flow hedges, net of tax	6				6
Change in unrealized losses on derivative financial instruments that qualify as cash flow hedges, net of tax	6
Foreign currency translation, net of tax	133				133
Employee benefit plan adjustments losses, net of tax	(3)				(3)
Net unrealized holding gains (losses) on available-for-sale securities, net of tax	(2)				(2)
Share repurchase program	(797)			(797)
Share repurchase program (in shares)	(37,587,403)	(37,831,647)
Conversion of Convertible Securities	15		16			(1)
Conversion of Convertible Securities (in shares)		845,646
Amortization and vesting of restricted stock and PSUs	19		23	(4)
Amortization and vesting of restricted stock and PSUs (in shares)		579,759
Stock options exercised, net	14		5	9
Stock options exercised, net (in shares)		708,731
Other purchases of common stock, net	7		1	6
Other purchases of common stock, net (in shares)		94,730
Purchases of subsidiary shares from noncontrolling interests	(2)		(1)				(1)
Sale of subsidiary shares to noncontrolling interests and other adjustments	6						6
Balance at Dec. 31, 2010	$ 4,729	$ 2	$ 3,780	$ (796)	$ (272)	$ 2,004	$ 11
Balance (in shares) at Dec. 31, 2010		175,782,683

Consolidated Statements of Changes in Equity (Parenthetical) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Consolidated Statements of Changes in Equity
Change in unrealized losses on derivative financial instruments that qualify as cash flow hedges, tax	$ (3)	$ (1)	$ 4
Foreign currency translation, tax	(98)	(184)	437
Employee benefit plan adjustments, tax	2	6	1
Net unrealized holding gains (losses) on available-for-sale securities, tax	$ 1

Consolidated Statements of Comprehensive Income (Loss) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Consolidated Statements of Comprehensive Income (Loss)
Net income	$ 389	$ 263	$ 315
Net unrealized holding losses on available-for-sale investment securities:
Unrealized holding losses arising during the period	(3)	(5)	(35)
Income tax benefit	1
Reclassification adjustment for losses realized in net income on available-for-sale investment security		5	35
Total	(2)
Foreign currency translation gains (losses):
Net foreign currency translation gains (losses)	231	399	(1,038)
Income tax (expense) benefit	(98)	(184)	437
Total	133	215	(601)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) on cash flow hedges arising during the period		2	(11)
Income tax (expense) benefit		(1)	4
Reclassification adjustment for loss realized in net income on cash flow hedges	9
Income tax benefit recognized in net income during the period	(3)
Total	6	1	(7)
Employee benefit plans:
Employee benefit plan adjustment losses	(5)	(9)	(7)
Income tax benefit	2	6	1
Total	(3)	(3)	(6)
Total other comprehensive income (loss), net of tax	134	213	(614)
Comprehensive income (loss)	523	476	(299)
Comprehensive (income) loss attributable to noncontrolling interests	6	3	(1)
Comprehensive income (loss) attributable to NASDAQ OMX	$ 529	$ 479	$ (300)

Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Cash flows from operating activities
Net income	$ 389	$ 263	$ 315
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	103	104	93
Share-based compensation	33	35	26
Excess tax benefits related to share-based compensation	(2)	(4)	(5)
Loss on divestiture of businesses	11
Provision for bad debts	5	1	4
Charges related to debt refinancing	37
Gain on the early extinguishment of debt obligations		(4)
Deferred taxes, net	(35)	(10)	(107)
Loss on sale of investment security		5
Gain on sales of businesses		(12)
Net (income) loss from unconsolidated investees	(2)	107	(27)
Debt conversion expense		25
Asset retirements and impairment charges	6	13	42
Loss on foreign currency contracts, net			58
Accretion of 2.50% convertible senior notes	14	13	11
Other non-cash items included in net income	2	(2)	2
Net change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Receivables, net	5	33	31
Other assets	(79)	130	(181)
Accounts payable and accrued expenses	4	(125)	20
Section 31 fees payable to SEC	(55)	88	(54)
Accrued personnel costs	2	(41)	21
Deferred revenue	14	4	(42)
Other current liabilities	6	(37)	(9)
Other liabilities	(18)	(4)	18
Cash provided by operating activities	440	582	216
Cash flows from investing activities
Purchases of trading securities	(237)	(607)	(164)
Purchase of equity method investment		(16)
Proceeds from sales and redemptions of trading securities	350	542
Proceeds from sales and redemptions of available-for-sale investment securities		25	15
Proceeds from sales of equity method investments	1	54
Purchases of foreign currency contracts			(13)
Settlement of foreign currency contracts			67
Acquisitions of businesses, net of cash and cash equivalents acquired and purchase accounting adjustments	(190)	(6)	(2,999)
Dispositions of businesses, net of cash and cash equivalents disposed		14
Purchases of property and equipment	(42)	(59)	(55)
Cash used in investing activities	(118)	(53)	(3,149)
Cash flows from financing activities
Proceeds from debt obligations, net of debt issuance costs	2,409		2,422
Payments of debt obligations	(2,216)	(340)	(428)
Cash paid for repurchase of common stock	(797)
Purchases of noncontrolling interests	(2)	(6)
Proceeds from contributions of noncontrolling interests	3	7
Cash inducement payment		(9)
Net proceeds from exercise of warrants			22
Issuances of common stock, net of treasury stock purchases	6	8	8
Excess tax benefits related to share-based compensation	2	4	5
Cash provided by (used in) financing activities	(595)	(336)	2,029
Effect of exchange rate changes on cash and cash equivalents	(6)	27	(47)
Increase (decrease) in cash and cash equivalents	(279)	220	(951)
Cash and cash equivalents at beginning of period	594	374	1,325
Cash and cash equivalents at end of period	315	594	374
Cash paid for:
Interest	53	71	67
Income taxes, net of refund	$ 148	$ 153	$ 266

Organization and Nature of Operations

12 Months Ended

Dec. 31, 2010

Organization and Nature of Operations

Organization and Nature of Operations

1. Organization and Nature of Operations

We are a leading global exchange group that delivers trading, clearing, exchange technology, securities listing, and public company services across six continents. Our global offerings are diverse and include trading and clearing across multiple asset classes, market data products, financial indexes, capital formation solutions, financial services and market technology products and services. Our technology powers markets across the globe, supporting cash equity trading, derivatives trading, clearing, and settlement and many other functions.

In the U.S., we operate The NASDAQ Stock Market, a registered national securities exchange. The NASDAQ Stock Market is the largest single cash equities securities market in the U.S. in terms of listed companies and in the world in terms of share value traded. As of December 31, 2010, The NASDAQ Stock Market was home to 2,778 listed companies with a combined market capitalization of approximately $4.6 trillion. In addition, in the U.S. we operate two additional cash equities trading markets, two options markets, a futures market and a derivatives clearinghouse. We also engage in riskless principal trading of OTC power and gas contracts.

In Europe, we operate exchanges in Stockholm (Sweden), Copenhagen (Denmark), Helsinki (Finland), and Iceland as NASDAQ OMX Nordic, and exchanges in Tallinn (Estonia), Riga (Latvia) and Vilnius (Lithuania) as NASDAQ OMX Baltic. Collectively, the exchanges that comprise NASDAQ OMX Nordic and NASDAQ OMX Baltic offer trading in cash equities, bonds, structured products and ETFs, as well as trading and clearing of derivatives and clearing of resale and repurchase agreements. Our Nordic and Baltic operations also offer alternative marketplaces for smaller companies called NASDAQ OMX First North. As of December 31, 2010, the exchanges that comprise NASDAQ OMX Nordic and NASDAQ OMX Baltic, together with NASDAQ OMX First North, were home to 780 listed companies with a combined market capitalization of approximately $1.1 trillion.

We also operate NASDAQ OMX Armenia. In addition, NASDAQ OMX Commodities operates the world's largest power derivatives exchange, one of Europe's largest carbon exchanges and N2EX, a marketplace for physical U.K. power contracts.

In some of the countries where we operate exchanges, we also provide clearing, settlement and depository services.

We manage, operate and provide our products and services in three business segments: Market Services, Issuer Services and Market Technology.

Market Services

Our Market Services segment includes our U.S. and European Transaction Services businesses, as well as our Market Data and Broker Services businesses. We offer trading on multiple exchanges and facilities across several asset classes, including cash equities, derivatives, debt, commodities, structured products and ETFs. In addition, in some of the countries where we operate exchanges, we also provide clearing, settlement and depository services.

U.S. Transaction Services

In the U.S., we offer trading in cash equity securities, derivatives and ETFs on The NASDAQ Stock Market, The NASDAQ Options Market, NASDAQ OMX PHLX, NASDAQ OMX BX, NASDAQ OMX PSX and NFX, and engage in riskless principal trading of OTC power and gas contracts through NOCC. Our transaction-based platforms in the U.S. provide market participants with the ability to access, process, display and integrate orders and quotes for cash equity securities, derivatives and ETFs. The platforms allow the routing and execution of buy and sell orders as well as the reporting of transactions for cash equity securities, derivatives and ETFs, providing fee-based revenues.

Cash Equities Trading

The NASDAQ Stock Market is the largest single pool of liquidity for trading U.S.-listed cash equities, matching an average of approximately 18.8% of all U.S. cash equities volume for 2010. In January 2009, we launched a second U.S. cash equities market called NASDAQ OMX BX. With NASDAQ OMX BX, we offer a second quote within the U.S. cash equities marketplace providing our customers enhanced trading choices and pricing flexibility within the U.S. cash equities marketplace. During the year ended December 31, 2010, NASDAQ OMX BX matched an average of approximately 3.3% of all U.S. cash equities volume.

In October 2010, we launched a third U.S. cash equities market, called NASDAQ OMX PSX. This new market utilizes a price-size priority model and also runs on INET technology, leveraging the speed and efficiency benefits offered throughout NASDAQ OMX globally.

U.S. Derivative Trading and Clearing

In the U.S., we operate The NASDAQ Options Market and NASDAQ OMX PHLX for the trading of equity options, ETF options, index options and currency options. As of December 31, 2010, NASDAQ OMX PHLX was the largest options market in the U.S. NASDAQ OMX PHLX operates a hybrid electronic and floor-based market as a distinct market alongside The NASDAQ Options Market. During the year ended December 31, 2010, NASDAQ OMX PHLX and The NASDAQ Options Market had an average combined market share of approximately 27.4% in the U.S. equity options market, consisting of approximately 23.4% at NASDAQ OMX PHLX and approximately 4.0% at The NASDAQ Options Market. Together, the 27.4% represented the largest share of the U.S. equity and ETF options market. Our options trading platforms provide trading opportunities to both retail investors and high frequency trading firms, who tend to prefer electronic trading, and institutional investors, who typically pursue more complex trading strategies and often prefer to trade on the floor.

In the U.S., we also operate NFX which offers trading for currency futures and other financial futures. Most futures traded on NFX clear at the OCC. In addition, NFX serves as the designated contract market for interest rate swap futures that are cleared through IDCH.

Through IDCH, our majority-owned subsidiary IDCG brings a centrally-cleared solution to the largest segment of the OTC derivatives marketplace, specifically interest rate derivative products. IDCH acts as the CCP for clearing interest rate swap futures contracts. IDCH utilizes NASDAQ OMX matching and clearing technology to clear and settle these interest rate derivative products.

With the purchase of the assets of North American Energy Credit and Clearing Corp. in March 2010 by our newly-established subsidiary NOCC, NASDAQ OMX expanded its presence in the OTC energy commodity markets.

European Transaction Services

Nordic Transaction Services

The exchanges that comprise NASDAQ OMX Nordic offer trading for cash equities and bonds, trading and clearing services for derivatives, and clearing services for resale and repurchase agreements. Our platform allows the exchanges to share the same trading system which enables efficient cross-border trading and settlement, cross membership and a single source for Nordic market data.

Trading is offered in Nordic securities such as cash equities and depository receipts, warrants, convertibles, rights, fund units, ETFs, bonds and other interest-related products. NASDAQ OMX Stockholm and NASDAQ OMX Copenhagen also offer trading in derivatives, such as stock options and futures, index options and futures, fixed-income options and futures and stock loans. Settlement and registration of cash trading takes place in Sweden, Finland, Denmark and Iceland via the local central securities depositories.

On NASDAQ OMX Stockholm, we offer clearing services for fixed-income options and futures, stock options and futures and index options and futures by serving as the CCP. In doing so, we guarantee the completion of the transaction and market participants can thereby limit their counterparty risk. We also act as the counterparty for certain OTC contracts. Beginning in October 2009, most of our cash equity trades on the exchanges that comprise NASDAQ OMX Nordic are centrally cleared by EMCF, a leading European clearinghouse in which we own a 22% equity stake.

In September 2010, NASDAQ OMX launched a clearing service for resale and repurchase agreements. As a result of an agreement between the Swedish Money Market Council and NASDAQ OMX, the entire Swedish Interbank resale and repurchase market will ultimately be cleared through NASDAQ OMX Stockholm.

For further discussion of our Nordic clearing operations, see "Derivative Positions, at Fair Value," and "Resale and Repurchase Agreements, at Contract Value," of Note 2, "Summary of Significant Accounting Policies."

In 2009, NASDAQ OMX expanded its trading offering to include cash equities listed in Norway and launched a new portfolio of Norwegian derivatives products. The offering is designed to provide lower trading costs and other benefits for customers seeking to trade all Nordic equity products on one platform.

Baltic Transaction Services

NASDAQ OMX Baltic operations comprise the exchanges in Tallinn (Estonia), Riga (Latvia) and Vilnius (Lithuania). During the first quarter of 2010, we acquired the remaining 7% minority holding in NASDAQ OMX Tallinn and an additional ownership stake of 0.4% in NASDAQ OMX Vilnius, both for immaterial amounts. As of December 31, 2010, NASDAQ OMX owns 100% of NASDAQ OMX Tallinn, 95% of NASDAQ OMX Vilnius and 93% of NASDAQ OMX Riga. In addition, NASDAQ OMX Tallinn owns 100% of the central securities depository in Estonia, NASDAQ OMX Riga owns 100% of the central securities depository in Latvia, and NASDAQ OMX Vilnius owns 40% of the central securities depository in Lithuania.

The exchanges that comprise NASDAQ OMX Baltic offer their members trading, clearing, payment and custody services. Issuers, primarily large local companies, are offered listing and a distribution network for their securities. The securities traded are mainly cash equities, bonds and treasury bills. Clearing, payment and custody services are offered through the central securities depositories in Estonia, Latvia and Lithuania. In addition, in Estonia and Latvia, NASDAQ OMX offers registry maintenance of fund units included in obligatory pension funds, and in Estonia, NASDAQ OMX offers the maintenance of shareholder registers for listed companies. The Baltic central securities depositories offer a complete range of cross-border settlement services.

Pan-European Transaction Services

In the second quarter of 2010, we made a strategic decision to close the business of NEURO. We retained our London office and data hub, where we support trading and market data clients, run the U.K. power exchange N2EX, and manage our overseas listings operation. As a result of this decision, we recorded a loss of $6 million in the second quarter of 2010. This charge was included in loss on divestiture of businesses in the Consolidated Statements of Income for the year ended December 31, 2010. Our decision to close the business of NEURO will not have a significant impact on our future results of operations.

Commodities Trading and Clearing

NASDAQ OMX Commodities offers derivatives and carbon products, operates a clearing business and offers consulting services to commodities markets globally. With our acquisition of Nord Pool, NASDAQ OMX Commodities' offering now includes the world's largest power derivatives exchange and one of Europe's largest carbon exchanges.

NASDAQ OMX Commodities has 361 members across a wide range of energy producers and consumers, as well as financial institutions. NASDAQ OMX Commodities' offering is designed for banks, brokers, hedge funds and other financial institutions, as well as power utilities, industrial, manufacturing and oil companies. NASDAQ OMX Commodities offers clearing services for energy derivative and carbon product contracts by serving as the CCP. In doing so, we guarantee the completion of the transaction and market participants can thereby limit their counterparty risk. We also act as the counterparty for certain trades on OTC derivative contracts.

In January 2010, NASDAQ OMX Commodities and Nord Pool Spot launched N2EX, a marketplace for physical UK power contracts.

For further discussion of our NASDAQ OMX Commodities clearing operations, see "Derivative Positions, at Fair Value," of Note 2, "Summary of Significant Accounting Policies."

Access Services

We provide market participants with several alternatives for accessing our markets for a fee. We provide co-location services to market participants whereby firms may lease space for equipment within our data center. These participants are charged monthly fees for cabinet space, connectivity and support. We also earn revenues from annual and monthly exchange membership and registration fees.

Market Data

We earn Market Data revenues from U.S. tape plans and U.S. and European proprietary market data products.

Net U.S. Tape Plans

The NASDAQ Stock Market operates as the exclusive Securities Information Processor of the UTP Plan for the collection and dissemination of best bid and offer information and last transaction information from markets that quote and trade in NASDAQ-listed securities. The NASDAQ Stock Market, NASDAQ OMX BX and NASDAQ OMX PSX are participants in the UTP Plan and share in the net distribution of revenue according to the plan on the same terms as the other plan participants. In the role as the Securities Information Processor, The NASDAQ Stock Market collects and disseminates quotation and last sale information for all transactions in NASDAQ-listed securities whether traded on The NASDAQ Stock Market or other exchanges. We sell this information to market participants and to data distributors, who then provide the information to subscribers. After deducting costs associated with our role as an exclusive Securities Information Processor, as permitted under the revenue sharing provision of the UTP Plan, we distribute the tape revenues to the respective UTP Plan participants, including The NASDAQ Stock Market, NASDAQ OMX BX and NASDAQ OMX PSX, based on a formula required by Regulation NMS that takes into account both trading and quoting activity. In addition, all quotes and trades in NYSE- and NYSE Amex-listed securities are reported and disseminated in real time, and as such, we share in the tape revenues for information on NYSE- and NYSE Amex-listed securities.

U.S. Market Data Products

Our market data products enhance transparency and provide critical information to professional and non-professional investors. We collect, process and create information and earn revenues as a distributor of our own, as well as select third-party content. We provide varying levels of quote and trade information to market participants and to data distributors, who in turn provide subscriptions for this information. Our systems enable distributors to gain direct access to our market depth, index values, mutual fund valuation, order imbalances, market sentiment and other analytical data. We earn revenues primarily based on the number of data subscribers and distributors of our data.

European Market Data Products

The exchanges that comprise NASDAQ OMX Nordic, NASDAQ OMX Baltic and NASDAQ OMX Commodities offer European market data products and services. These data products and services provide critical market transparency to professional and non-professional investors who participate in European marketplaces and, at the same time, give investors greater insight into these markets.

European market data products and services are based on the trading information from the exchanges that comprise NASDAQ OMX Nordic, NASDAQ OMX Baltic and NASDAQ OMX Commodities for four classes of assets: cash equities, bonds, derivatives and commodities. We provide varying levels of quote and trade information to market participants and to data distributors, who in turn provide subscriptions for this information. Revenues from European market data are subscription-based and are generated primarily based on the number of data subscribers and distributors of our data.

Broker Services

Our Broker Services operations offer technology and customized securities administration solutions to financial participants in the Nordic market. Broker Services provide services through a registered securities company which is regulated by the SFSA. The primary services consist of flexible back-office systems, which allow customers to entirely or partly outsource their company's back-office functions.

We offer customer and account registration, business registration, clearing and settlement, corporate action handling for reconciliations and reporting to authorities. Available services also include direct settlement with the Nordic central securities depositories, real-time updating and communication via SWIFT to deposit banks. Revenues are based on a fixed basic fee for back-office brokerage services, such as administration or licensing, maintenance and operations, and a variable portion that depends on the number of transactions completed.

Acquisition of FTEN

In December 2010, we completed our acquisition of FTEN, a leading provider of RTRM solutions for the financial securities market. As a market leader in RTRM, FTEN is well positioned to grow as the industry is becoming more focused on solutions for effectively managing risk. Market participants are seeking tools that provide real-time, low latency enterprise-wide risk management, market awareness and control. FTEN's technology provides broker-dealers and their clients the ability to manage risk more effectively in real-time, which leads to better utilization of capital as well as improved regulatory compliance. We will offer FTEN solutions to our global base of broker-dealers and the international exchange community. For further discussion of our FTEN acquisition, see Note 3, "Acquisitions and Strategic Initiatives."

Issuer Services

Our Issuer Services segment includes our Global Listing Services and Global Index Group businesses.

We operate a variety of listing platforms around the world to provide multiple global capital raising solutions for private and public companies. Our main listing markets are The NASDAQ Stock Market and the exchanges that comprise NASDAQ OMX Nordic and NASDAQ OMX Baltic. We offer a consolidated global listing application to companies to enable them to apply for listing on The NASDAQ Stock Market and the exchanges that comprise NASDAQ OMX Nordic and NASDAQ OMX Baltic, as well as NASDAQ Dubai.

Global Listing Services

Our Global Listing Services business includes our U.S. Listings, European Listings and Corporate Solutions businesses.

U.S. Listings

Companies listed on The NASDAQ Stock Market represent a diverse array of industries including health care, consumer products, telecommunication services, information technology, financial services, industrials and energy. There are three types of fees applicable to companies that list on The NASDAQ Stock Market: an annual renewal fee, a listing of additional shares fees and an initial listing fee. Annual renewal fees for securities listed on The NASDAQ Stock Market are based on total shares outstanding. The fee for listing of additional shares is also based on the total shares outstanding, which we review quarterly, and the initial listing fee for securities listed on The NASDAQ Stock Market includes a listing application fee and a total shares outstanding fee.

European Listings

We also offer listings on our Nordic and Baltic exchanges and NASDAQ OMX First North. Revenues are generated through annual fees paid by companies listed on these exchanges, which are measured in terms of the listed company's market capitalization on a trailing 12-month basis. Our European listing customers are organizations such as companies, funds or governments that issue and list securities on the exchanges of NASDAQ OMX Nordic and NASDAQ OMX Baltic. Customers issue securities in the forms of cash equities, depository receipts, warrants, ETFs, convertibles, rights, options, bonds and fixed-income related products.

For smaller companies and growth companies, we offer access to the financial markets through the NASDAQ OMX First North alternative marketplaces.

Corporate Solutions

Our Corporate Solutions business provides customer support services, products and programs to companies, including companies listed on our exchanges. Through our Corporate Solutions offerings, companies gain access to innovative products and services that ease transparency, mitigate risk, maximize board efficiency and facilitate better corporate governance.

Acquisition of Zoomvision Mamato

In December 2010, we completed our acquisition of ZVM, a provider of webcasting and investor relations communication services for companies in the Nordic regions. ZVM, which is the leading provider of webcasting services in Northern Europe, will add to the growing range of capabilities and services NASDAQ OMX offers public and private companies in the U.S. and Europe.

Global Index Group

We develop and license NASDAQ OMX branded indexes, associated derivatives and financial products as part of our Global Index Group. We believe that these indexes and products leverage, extend and enhance the NASDAQ OMX brand. License fees for our trademark licenses vary by product based on a percentage of underlying assets, dollar value of a product issuance, number of products or number of contracts traded. In addition to generating licensing revenues, these products, particularly mutual funds and ETFs, lead to increased investments in companies listed on our global exchanges, which enhances our ability to attract new listings. We also license cash-settled options, futures and options on futures on our indexes.

Market Technology

The Market Technology segment delivers technology and services to marketplaces, brokers and regulators throughout the world. Market Technology provides technology solutions for trading, clearing, settlement, and information dissemination, and also offers facility management integration, surveillance solutions and advisory services to over 70 exchanges, clearing organizations and central securities depositories in more than 50 countries. We serve as a technology partner to some of the world's most prominent exchanges, and we also provide critical technical support to start-ups and new entrants in the exchange space. Revenues are derived from the following primary sources:

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license, support and facility management revenues;

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delivery project revenues; and

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change request, advisory and broker surveillance revenues

License and support revenues are derived from the system solutions developed and sold by NASDAQ OMX. After we have developed and sold a system solution, the customer licenses the right to use the software and may require post contract support and other services. Facility management revenues are derived when NASDAQ OMX assumes responsibility for the continuous operation of a system platform for a customer.

Change request revenues include customer specific adaptations and modifications of the system solution sold by NASDAQ OMX after delivery has occurred. Advisory services are designed to support our customers' strategies and help them with critical decisions in a highly demanding business environment. Broker surveillance revenues are derived from surveillance solutions targeting brokers and regulators throughout the world.

In August 2010, we completed our acquisition of SMARTS, a leading technology provider of surveillance solutions to exchanges, regulators and brokers. This acquisition is part of our strategy to diversify our Market Technology business and enter the broker surveillance and compliance market. We believe that this acquisition will strengthen our position as the leading technology partner to marketplaces worldwide. For further discussion of our SMARTS acquisition, see Note 3, "Acquisitions and Strategic Initiatives."

For further discussion of our segments, see Note 18, "Segments." For further discussion of our revenue recognition policies, see "Revenue Recognition and Cost of Revenues," of Note 2, "Summary of Significant Accounting Policies."

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2010

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The consolidated financial statements are prepared in accordance with U.S. GAAP. The financial statements include the accounts of NASDAQ OMX, its wholly-owned subsidiaries and other entities in which NASDAQ OMX has a controlling financial interest. All significant intercompany accounts and transactions have been eliminated in consolidation. We consolidate those entities in which we are the primary beneficiary of a variable-interest entity, or VIE, and entities where we have a controlling financial interest. We were not the primary beneficiary of any VIE for any of the three years in the period ended December 31, 2010. When NASDAQ OMX is not the primary beneficiary of a VIE or does not have a controlling interest in an entity but exercises significant influence over the entity's operating and financial policies, such investment is accounted for under the equity method of accounting. We recognize our share of earnings or losses of an equity method investee based on our ownership percentage. As permitted under U.S. GAAP, for certain equity method investments for which financial information is not sufficiently timely for us to apply the equity method of accounting currently, we record our share of the earnings or losses of an investee from the most recent available financial statements on a lag. See Note 5, "Investments," for further discussion of our equity method investments.

We have evaluated our subsequent events through the issuance date of this Annual Report on Form 10-K. Certain prior year amounts have been reclassified to conform to the current year presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Foreign Currency Translation

Foreign denominated assets and liabilities are remeasured into the functional currency at exchange rates in effect at the balance sheet date through the income statement. Gains or losses resulting from foreign currency transactions are remeasured using the rates on the dates on which those elements are recognized during the period, and are included in general, administrative and other expense in the Consolidated Statements of Income.

Translation gains or losses resulting from translating our subsidiaries' financial statements from the local functional currency to the reporting currency, net of tax, are included in accumulated other comprehensive income (loss) within stockholders' equity in the Consolidated Balance Sheets. Assets and liabilities are translated at the balance sheet date while revenues and expenses are translated at the date the transaction occurs or at an applicable average rate.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and all non-restricted highly liquid investments with original maturities of three months or less at the time of purchase. Such equivalent investments included in cash and cash equivalents in the Consolidated Balance Sheets were $215 million as of December 31, 2010 and $314 million as of December 31, 2009. Cash equivalents are carried at cost plus accrued interest, which approximates fair value due to the short maturities of these investments.

Restricted Cash

Restricted cash, which was $60 million as of December 31, 2010 and $30 million as of December 31, 2009, is not available for general use by us due to regulatory and other requirements and is classified as restricted cash in the Consolidated Balance Sheets. Non-current restricted cash was $105 million as of December 31, 2010 and $80 million as of December 31, 2009. As of December 31, 2010 and 2009, non-current restricted cash includes a deposit in the guaranty fund of IDCG of $80 million which may consist of cash, cash equivalents, or short-term investments. As of December 31, 2010, a portion of IDCG's guaranty fund was invested in short-term reverse repurchase agreements. These reverse repurchase agreements, which totaled $16 million as of December 31, 2010, are recorded at the contract amount plus accrued interest, which approximates fair value. In addition, as of December 31, 2010, non-current restricted cash includes our $25 million capital injection to NOCC to improve its liquidity position. These amounts are classified as non-current restricted cash in the Consolidated Balance Sheets.

Financial Investments

Financial investments, at fair value in the Consolidated Balance Sheets, represent debt securities that are classified as trading investment securities and our available-for-sale investment security in DFM. Debt securities are bought principally to meet regulatory capital requirements for NASDAQ OMX Stockholm's clearing operations and are generally sold in the near term. Changes in fair value of trading investment securities are included in dividend and investment income in the Consolidated Statements of Income. Equity securities that are classified as long-term available-for-sale investment securities are carried at fair value in the Consolidated Balance Sheets in other assets with unrealized gains and losses, net of tax, reported in accumulated other comprehensive income (loss) within stockholders' equity. Realized gains and losses on these securities are included in earnings upon disposition of the securities using the specific identification method. In addition, realized losses are recognized when management determines that a decline in value is other-than-temporary, which requires judgment regarding the amount and timing of recovery. Indicators of other-than-temporary impairment for debt securities include issuer downgrade, default, or bankruptcy. For equity securities we also consider the extent to which cost exceeds fair value, the duration of that difference and management's judgment about the issuer's current and prospective financial condition, as well as our intent and ability to hold the security until recovery of the unrealized losses. In addition, for equity securities we also consider the performance of the investee's stock price in relation to industry indexes and review the investee's credit profile. In 2008, we recorded an other-than-temporary impairment loss on our Oslo long-term available-for-sale investment security of $35 million in asset impairment charges in the Consolidated Statements of Income. In 2009, we sold this investment security and recognized a $5 million loss which is recorded in loss on sale of investment security in the Consolidated Statements of Income.

Fair value of both available-for-sale and trading investment securities are generally obtained from third party pricing sources. When available, quoted market prices are used to determine fair value. If quoted market prices are not available, fair values are estimated using pricing models, where the inputs to those models are based on observable market inputs. The inputs to the valuation models vary by the type of security being priced but are typically benchmark yields, reported trades, broker dealer quotes, and prices of similar assets. Pricing models generally do not entail material subjectivity because the methodologies employed use inputs observed from active markets. See Note 14, "Fair Value of Financial Instruments," for further discussion of fair value measures.

Receivables, net

Our receivables are concentrated with our member firms, market data distributors, listed companies and market technology customers. Receivables are shown net of reserves for uncollectible accounts. The reserve for bad debts is maintained at a level that management believes to be sufficient to absorb estimated losses in the accounts receivable portfolio. The reserve is increased by the provision for bad debts which is charged against operating results and decreased by the amount of charge-offs, net of recoveries. The amount charged against operating results is based on several factors including, but not limited to, a continuous assessment of the collectability of each account, the length of time a receivable is past due and our historical experience with the particular customer. In circumstances where a specific customer's inability to meet its financial obligations is known (i.e., bankruptcy filings), we record a specific provision for bad debts against amounts due to reduce the receivable to the amount we reasonably believe will be collected. Due to changing economic, business and market conditions, we review the reserve for bad debts monthly and make changes to the reserve through the provision for bad debts as appropriate. If circumstances change (i.e., higher than expected defaults or an unexpected material adverse change in a major customer's ability to pay), our estimates of recoverability could be reduced by a material amount. Total reserves netted against receivables in the Consolidated Balance Sheets were $3 million at December 31, 2010 and December 31, 2009.

Derivative Positions, at Fair Value

Through our clearing operations in the derivative markets with NASDAQ OMX Commodities and NASDAQ OMX Stockholm, we are the legal counterparty for each derivative position traded and thereby guarantee the fulfillment of each contract. We also act as the counterparty for certain trades on OTC derivative contracts. The derivatives are not used by NASDAQ OMX Commodities or NASDAQ OMX Stockholm for the purpose of trading on their own behalf. As the legal counterparty of each transaction, NASDAQ OMX Commodities and NASDAQ OMX Stockholm bear the counterparty risk between the purchaser and the seller in the contract. The counterparty risks are measured using models that are agreed to with the Financial Supervisory Authority of the applicable country, which requires us to provide minimum guarantees and maintain certain levels of regulatory capital.

The structure and operations of NASDAQ OMX Commodities and NASDAQ OMX Stockholm differ from other clearinghouses. NASDAQ OMX Commodities and NASDAQ OMX Stockholm are not member-owned organizations, do not maintain a guarantee fund to which members contribute and do not enforce loss sharing assessments amongst members. In addition, unlike other clearinghouses, they do not record any margin deposits and guarantee funds in the Consolidated Balance Sheets, as all risks and rewards of collateral ownership, including interest, belongs to the counterparty. Market participants must provide collateral to cover the daily margin call as needed, which is in addition to the initial collateral placed when entering into the transaction. Acceptable collateral is cash and eligible securities in a pledged bank account and/or an on-demand guarantee. All collateral is maintained at a third-party custodian bank for the benefit of the clearing members and is accessible by NASDAQ OMX in the event of default. In addition, market participants must meet certain minimum financial standards to mitigate the risk if they become unable to satisfy their obligations. For NASDAQ Commodities, trading on the contracts can take place up until the delivery period which can occur over a period of several years. For NASDAQ OMX Stockholm, following the completion of a transaction, settlement primarily takes place between parties by net cash settlement or with the exchange of securities and funds. For those transactions where there is an exchange of securities and funds, the transfer of ownership is registered and the securities are stored on the owner's behalf.

We have the responsibility for clearing, or settlement of payment, for the derivative and equity transactions. Certain timing differences may exist related to the periodic cash settlement of counterparty trades between NASDAQ OMX Stockholm and other clearinghouses and customers, where we are acting as intermediary and guaranteeing the fulfillment of each contract. We have recorded receivables and payables associated with such timing differences in other current assets and other current liabilities, respectively, in the Consolidated Balance Sheets. Nord Pool is responsible for exchange operations and trading activities on all counterparty trades where NASDAQ OMX Commodities is acting as intermediary. There are no timing differences related to the settlement of these transactions as all trades occur through Nord Pool and not between other exchanges with different settlement requirements.

Resale and Repurchase Agreements, at Contract Value

Through our clearing operations in the resale and repurchase markets with NASDAQ OMX Stockholm, we are the legal counterparty for each resale and repurchase contract traded and thereby guarantee the fulfillment of each contract. We only clear these transactions once a bilateral contract between members has been entered into whereby the two members have agreed on all terms in the transaction. The resale and repurchase agreements are not used for financing purposes by NASDAQ OMX Stockholm. As the legal counterparty of each transaction, NASDAQ OMX Stockholm bears the counterparty risk between the purchaser and the seller in the resale and repurchase agreement.

The structure and operations for the resale and repurchase market is similar to the derivative markets for NASDAQ OMX Commodities and NASDAQ OMX Stockholm. As discussed above in "Derivative Positions, at Fair Value," NASDAQ OMX Commodities and NASDAQ OMX Stockholm are not member-owned organizations, do not maintain a guarantee fund to which members contribute and do not enforce loss sharing assessments amongst members. In addition, unlike other clearinghouses, they do not record any margin deposits and guarantee funds in the Consolidated Balance Sheets, as all risks and rewards of collateral ownership, including interest, belongs to the counterparty. For resale and repurchase agreements, collateral is not held by NASDAQ OMX Stockholm. All resale and repurchase clearing activities are transacted under our clearing member agreements that give us the right, in the event of default, to liquidate collateral pledged between the clearing members and to offset receivables and payables with the same counterparty.

Pledged collateral, which is transferred through NASDAQ OMX Stockholm at initiation of the bilateral contract between the two clearing member counterparties, primarily consists of Swedish government debt securities. Market participants must meet certain minimum financial standards to mitigate the risk if they become unable to satisfy their obligations. In the event that one of the participants cannot fulfill its obligation to deliver or receive the underlying security at the agreed upon price, NASDAQ OMX Stockholm is required to buy or sell the security in the open market to fulfill its obligation. In order to protect itself against a price movement in the value of the underlying security, or price risk, NASDAQ OMX Stockholm requires all participants to provide additional margin as needed, which is valued on a daily basis and is maintained at a third-party custodian bank for the benefit of the clearing members and is accessible by NASDAQ OMX Stockholm in the event of default.

Derivative Financial Instruments and Hedging Activities

At December 31, 2009, we held derivative financial instruments which were designated and qualified for hedge accounting. Derivative financial instruments, which are designated or qualify for hedge accounting, are recognized in the balance sheets at fair value as either assets or liabilities. The fair value of our derivative financial instruments is determined using either market quotes or valuation models that are based upon the net present value of estimated future cash flows and incorporate current market data inputs. We report our derivative assets in either other current assets or other assets and our derivative liabilities in either other current liabilities or other liabilities in the Consolidated Balance Sheets depending on the terms of the contract. Any ineffectiveness is recorded in earnings. The accounting for the change in the fair value of a derivative financial instrument depends on its intended use and the resulting hedge designation, if any. As of December 31, 2010, there were no derivative financial instruments that were designated or qualified for hedge accounting. As of December 31, 2009, our derivative financial instruments which were designated and qualified for hedge accounting were cash flow hedges of our floating rate debt. As such, the accounting for the change in fair value of the derivative was included in accumulated other comprehensive loss in the Consolidated Balance Sheets. In the first quarter of 2010, in connection with the repayment of our senior secured credit facilities in place as of December 31, 2009, we terminated our interest rate swaps and reclassified into earnings the unrealized loss of $9 million which was included in accumulated other comprehensive loss in the Consolidated Balance Sheets at December 31, 2009. This loss is included in general, administrative and other expense in the Consolidated Statements of Income for the year ended December 31, 2010. Any ineffectiveness would impact earnings through interest expense. There was no material ineffectiveness recorded in earnings for the years ended December 31, 2010 and December 31, 2009. For further discussion of hedging activities, see below and Note 15, "Derivative Financial Instruments and Hedging Activities."

Derivative Financial Instruments that Qualify for Hedge Accounting

Derivative financial instruments that are entered into for hedging purposes are designated as such when we enter into the contract. For all derivative financial instruments that are designated for hedging activities, we formally document all of the hedging relationships between the hedge instruments and the hedged items at the inception of the relationships. We also formally document our risk management objectives and strategies for entering into the hedge transactions. We formally assess, at inception and on a quarterly basis, whether derivatives designated as hedges are highly effective in offsetting the fair value or cash flows of hedged items. If it is determined that a derivative is no longer highly effective as a hedge, we will discontinue the application of hedge accounting.

Non-Designated Derivatives

We also use derivatives as economic hedges that are not designed as accounting hedges or do not qualify for hedge accounting treatment. For derivative financial instruments that do not qualify for hedge accounting or are not designated as hedges, changes in fair value are reported in current period earnings. As of December 31, 2008, we had open foreign currency contracts hedging currency risk and recorded a $58 million net loss within gain (loss) on foreign currency contracts in the Consolidated Statements of Income. See Note 15, "Derivative Financial Instruments and Hedging Activities," for further discussion. We did not enter into any material economic hedges that did not qualify for or were not designated for hedge accounting during the years ended December 31, 2010 and 2009.

Property and Equipment, net

Property and equipment, including leasehold improvements, are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are generally recognized over the estimated useful lives of the related assets. Estimated useful lives generally range from 10 to 40 years for buildings and improvements, two to five years for data processing equipment and software and five to 10 years for furniture and equipment. Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining term of the related lease. Depreciation and amortization are computed using the straight-line method. See Note 6, "Property and Equipment, net," for further discussion.

Goodwill

Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets of a business acquired. Goodwill is allocated to our reporting units based on the assignment of the fair values of each reporting unit of the acquired company. We are required to test goodwill for impairment at the reporting unit level annually, or in interim periods if certain events occur indicating that the carrying value may be impaired. We test for impairment during the fourth quarter of our fiscal year using October 1^stcarrying values. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill is less than the carrying value. The determination of fair value includes considerations of projected cash flows, relevant trading multiples of comparable companies and the trading price of our common stock and other factors. There was no impairment of goodwill for the years ended December 31, 2010, 2009 and 2008. Although there is no impairment as of December 31, 2010, events such as economic weakness and unexpected significant declines in operating results of reporting units may result in our having to perform a goodwill impairment test for some or all of our reporting units prior to the required annual assessment. These types of events and the resulting analysis could result in goodwill impairment charges in the future. See Note 4, "Goodwill and Purchased Intangible Assets," for further discussion.

Intangible Assets, net

Intangible assets, net, primarily include exchange and clearing registrations, customer relationships, trade names, licenses and technology. Intangible assets with finite lives are amortized on a straight-line basis over their average estimated useful lives as follows:

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Technology: 3—10 years

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Customer relationships: 10—30 years

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Other: 4—10 years

Intangible assets deemed to have indefinite useful lives are not amortized but instead are tested for impairment at least annually and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than its carrying amount. Similar to goodwill impairment testing, we test for impairment of indefinite-lived intangible assets during the fourth quarter of our fiscal year using October 1^stcarrying values. Impairment exists if the carrying value of the indefinite-lived intangible asset exceeds its fair value. For finite-lived intangible assets subject to amortization, impairment is considered upon certain "triggering events" and is recognized if the carrying amount is not recoverable and the carrying amount exceeds the fair value of the intangible asset. In 2008, we recorded an impairment loss of finite-lived intangible assets of $7 million primarily related to our insurance agency business, which was part of Corporate Solutions within our Issuer Services segment. This charge was included in asset impairment charges in the Consolidated Statements of Income. See Note 4, "Goodwill and Purchased Intangible Assets," for further discussion. There was no impairment of finite-lived intangible assets in the years ended December 31, 2010 and 2009. There was no impairment of indefinite-lived intangible assets in the years ended December 31, 2010, 2009 and 2008.

Valuation of Other Long-Lived Assets

We also assess potential impairments to our other long-lived assets, including property and equipment, when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss is recognized when the carrying amount of the long-lived asset exceeds its fair value and is not recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value and is recorded as a reduction in the carrying value of the related asset and a charge to operating results. There was no impairment of other long-lived assets in the years ended December 31, 2010, 2009 and 2008.

Equity Method Investments

The equity method of accounting is used when we own less than 50% of the outstanding voting stock of a company, but exercise significant influence over the operating and financial policies of that company. We have certain investments in which we have determined that we have significant influence and as such account for the investments under the equity method of accounting. As such, we record our pro-rata share of earnings or losses each period and record any dividends as a reduction in the investment balance. We evaluate our equity method investments for other-than-temporary declines in value by considering a variety of factors such as the earnings capacity of the investment and the fair value of the investment compared to its carrying amount. In addition, for investments where the market value is readily determinable, we consider the underlying stock price as an additional factor. If the estimated fair value of the investment is less than the carrying value and management considers the decline in value to be other-than-temporary, the excess of the carrying value over the estimated fair value is recognized in the financial statements as an impairment. In December 2009, we recorded impairment losses on equity method investments of $87 million related to our investments in NASDAQ Dubai and Agora-X. No other impairments of equity method investments were recorded in 2010, 2009 or 2008.

We also recognized a $19 million loss on the sale of our Orc shares during 2009. See Note 5, "Investments," for further discussion.

Revenue Recognition and Cost of Revenues

Market Services Revenues

Transaction Services

U.S. Cash Equity Trading

U.S. cash equity trading revenues are variable, based on individual customer share volumes, and recognized as transactions occur. We charge transaction fees for executing cash equity trades in NASDAQ-listed and other listed securities on The NASDAQ Stock Market, NASDAQ OMX BX, and NASDAQ OMX PSX, as well as on orders that are routed to other market venues for execution.

In the U.S., we record execution revenues from transactions on a gross basis in revenues and record related expenses as cost of revenues. Nasdaq Execution Services, which is registered with the SEC as a broker-dealer, operates as The NASDAQ Stock Market's, NASDAQ OMX BX's and NASDAQ OMX PSX's routing broker-dealer for sending orders to other venues for execution in accordance with member order instructions and requirements.

Under our Limitation of Liability Rule and procedures, we, subject to certain caps, provide compensation for losses directly resulting from the systems' actual failure to correctly process an order, quote, message or other data into our platform. We do not record a liability for any potential claims that may be submitted under the Limitation of Liability Rule unless they meet the provisions required in accordance with U.S. GAAP. As such, losses arising as a result of the rule are accrued and charged to expense only if the loss is probable and estimable. The Limitation of Liability Rule and procedures apply to both U.S. cash equity and U.S. derivative trading in the aggregate.

For The NASDAQ Stock Market and NASDAQ OMX PSX we credit a portion of the per share execution charge to the market participant that provides the liquidity. For NASDAQ OMX BX we credit a portion of the per share execution charge to the market participant that takes the liquidity. We record these transaction rebates as U.S. cash equity trading cost of revenues in the Consolidated Statements of Income. These transaction rebates are paid on a monthly basis and the amounts due are included in accounts payable and accrued expenses in the Consolidated Balance Sheets.

Also, we pay Section 31 fees to the SEC for supervision and regulation of securities markets. We pass these costs along to our customers through our cash equity trading fees. We collect the fees as a pass-through charge from organizations executing eligible trades on NASDAQ's, NASDAQ OMX BX's and NASDAQ OMX PSX's platforms and we recognize these amounts in U.S. cash equity trading cost of revenues when incurred. Section 31 fees received are included in cash and cash equivalents in the Consolidated Balance Sheets, at the time of receipt and, as required by law, the amount due to the SEC is remitted semiannually and recorded as Section 31 fees payable to the SEC in the Consolidated Balance Sheets until paid. Since the amount recorded in revenues is equal to the amount recorded in cost of revenues, there is no impact on our revenues less transaction rebates, brokerage, clearance and exchange fees. As we hold the cash received until payment to the SEC, we earn interest income on the related cash balances.

European Cash Equity Trading

We charge transaction fees for executing trades on the exchanges that comprise NASDAQ OMX Nordic and NASDAQ OMX Baltic. The transaction fee for executing trades on the exchanges that comprise NASDAQ OMX Nordic and NASDAQ OMX Baltic is charged per executed order and as per value traded.

The exchanges that comprise NASDAQ OMX Nordic and NASDAQ OMX Baltic do not have any revenue sharing agreements or cost of revenues, such as transaction rebates and brokerage, clearance and exchange fees.

U.S. Derivative Trading and Clearing

U.S. derivative trading and clearing revenues are variable, based on traded and cleared volumes, and recognized when executed or when contracts are cleared. The principal types of derivative contracts traded on NASDAQ OMX PHLX and The NASDAQ Options Market are equity options, ETF options, index options and currency options. We also operate NFX, which offers trading for currency futures and other financial futures. Similar to U.S. cash equity trading, we record derivative trading and clearing revenues from transactions on a gross basis in revenues and record related expenses as cost of revenues, as we have certain risk associated with trade execution. For further discussion see "U.S. Cash Equity Trading" above.

As discussed under U.S. cash equity trading, for U.S. derivative trading and clearing we also credit a portion of the per share execution charge to the market participant that provides the liquidity and record the transaction rebate as U.S. derivative trading and clearing cost of revenues in the Consolidated Statements of Income. These transaction rebates are paid on a monthly basis and the amounts due are included in receivables, net in the Consolidated Balance Sheets.

Also, we pay Section 31 fees to the SEC for supervision and regulation of securities markets. We pass these costs along to our customers through our derivative trading and clearing fees. We collect the fees as a pass-through charge from organizations executing eligible trades on NASDAQ OMX PHLX and The NASDAQ Options Market platforms and we recognize these amounts in U.S. derivative trading and clearing cost of revenues when incurred.

Through NOCC, we engage in riskless principal trading of OTC power and gas contracts. Revenues are based on notional amounts or volume of power and gas transacted and/or delivered and are recognized upon settlement of the contracts.

As discussed above, in the U.S., our Limitation of Liability Rule and procedures apply to both U.S. cash equity and U.S. derivative trading and clearing in the aggregate. Under this rule, we, subject to certain caps, provide compensation for losses directly resulting from the systems' actual failure to correctly process an order, quote, message or other data into our platform.

European Derivative Trading and Clearing

European derivative trading and clearing revenues are also variable, based on the volume of traded and cleared contracts, and recognized when executed or when contracts are cleared. Derivative trading and clearing is conducted on NASDAQ OMX Stockholm and NASDAQ OMX Copenhagen. The principal types of derivative contracts traded are stock options and futures, index options and futures, fixed-income options and futures and stock loans. On NASDAQ OMX Stockholm, we offer clearing services for fixed-income options and futures, stock options and futures and index options and futures by serving as the CCP. In doing so, we guarantee the completion of the transaction and market participants can thereby limit their counterparty risk. We also act as the counterparty for certain OTC contracts.

On NASDAQ OMX Stockholm, we also offer clearing services for resale and repurchase agreements. Clearing revenues for resale and repurchase agreements are based on the value and length of the contract and are recognized when cleared.

European derivative trading and clearing revenues also include clearing revenues for commodities. NASDAQ OMX Commodities provides access to the world's largest power derivatives markets and one of Europe's largest carbon markets. NASDAQ OMX Commodities offers trading of international power derivatives and carbon products, operates a clearing business and offers consulting services to commodities markets globally. Our clearing revenues from trading transactions on Nord Pool are variable, based on cleared volume, and recognized when contracts are cleared. We also generate clearing revenues for contracts traded on the OTC derivative market which are also recognized when contracts are cleared. In addition, European derivatives revenues include annual renewal fees. Each January, NASDAQ OMX Commodities members are billed an annual fee which is recognized ratably over the following 12-month period.

NASDAQ OMX Commodities and the exchanges that comprise NASDAQ OMX Nordic and NASDAQ OMX Baltic do not have any revenue sharing agreements or cost of revenues, such as transaction rebates and brokerage, clearance and exchange fees.

Access Services

We generate revenues by providing market participants with several alternatives for accessing our markets for a fee. The type of connectivity is determined by the level of functionality a customer needs. As a result, access services revenues vary depending on the type of connection provided to customers. We provide co-location services to market participants whereby firms may lease space for equipment within our data center. These participants are charged monthly fees for cabinet space, connectivity and support. We also earn revenues from annual and monthly exchange membership and registration fees. Revenues for providing access to our markets, co-location services and revenues for monthly exchange membership and registration fees are recognized on a monthly basis as the service is provided. Revenues from annual fees for exchange membership and registration fees are recognized ratably over the following 12-month period.

Market Data

We earn Market Data revenues from U.S. tape plans and U.S. and European proprietary market data products.

Net U.S. Tape Plans

Revenues from U.S. tape plans include eligible UTP Plan revenues which are shared among UTP Plan participants and are presented on a net basis. See "Market Data Revenue Sharing" below for further discussion of net reporting. Under the revenue sharing provision of the UTP Plan, we are permitted to deduct costs associated with acting as the exclusive Securities Information Processor from the total amount of tape revenues collected. After these costs are deducted from the tape revenues, we distribute to the respective UTP Plan participants, including The NASDAQ Stock Market, NASDAQ OMX BX and NASDAQ OMX PSX, their share of tape revenues based on a formula, required by Regulation NMS, that takes into account both trading and quoting activity. In addition, all quotes and trades in NYSE- and NYSE Amex-listed securities are reported and disseminated in real time, and as such, we share in the tape revenues for information on NYSE- and NYSE Amex-listed securities. Revenues from net U.S. tape plans are recognized on a monthly basis.

U.S. Market Data Products

We collect and process information and earn revenues as a distributor of our market data. We provide varying levels of quote and trade information to market participants and to data distributors, who in turn sell subscriptions for this information to the public. We earn revenues primarily based on the number of data subscribers and distributors of our data. U.S. Market Data revenues are recognized on a monthly basis. These revenues, which are subscription based, are recorded net of amounts due under revenue sharing arrangements with market participants.

European Market Data Products

European Market Data revenues, which are subscription based, are generated primarily through the sale and distribution of trading information based on data generated through trading on the exchanges that comprise NASDAQ OMX Nordic and NASDAQ OMX Baltic and are recognized on a monthly basis.

Market Data Revenue Sharing

The most significant component of Market Data revenues presented on a net basis is the UTP Plan revenue sharing in the U.S. All indicators of gross vs. net reporting under U.S. GAAP have been considered in analyzing the appropriate presentation of UTP Plan revenue sharing. However, the following are the primary indicators of net reporting:

•

Primary Obligor: We are the Securities Information Processor for the UTP Plan, in addition to being a participant in the UTP Plan. In our unique role as Securities Information Processor, we facilitate the collection and dissemination of revenues on behalf of the UTP Plan participants. As a participant, we share in the net distribution of revenues according to the plan on the same terms as all other plan participants.

•

Risk of Loss/Credit Risk: Risk of loss on the revenue is shared equally among plan participants according to the UTP Plan.

•

Price Latitude: The operating committee of the UTP Plan, which is comprised of representatives from each of the participants, including us solely in our capacity as a UTP Plan participant, is responsible for setting the level of fees to be paid by distributors and subscribers and taking action in accordance with the provisions of the UTP Plan, subject to SEC approval.

The exchanges that comprise NASDAQ OMX Nordic and NASDAQ OMX Baltic do not have any market data revenue sharing agreements or cost of revenues, such as transaction rebates and brokerage, clearance and exchange fees.

Broker Services

Our Broker Services operations offer technology and customized securities administration solutions to financial participants in the Nordic market. The primary services consist of flexible back-office systems, which allow customers to entirely or partly outsource their company's back-office functions. Revenues from broker services are based on a fixed basic fee for administration or licensing, maintenance and operations, and a variable portion that depends on the number of transactions completed. Broker Services revenues are recognized on a continuous basis as services are rendered.

Prior to November 2009, we also offered Broker Services operations in the United Kingdom. In November 2009, we sold our Broker Services operations in the United Kingdom to TD Waterhouse and recorded a gain of $5 million, which is included in gain on sales of businesses in the Consolidated Statements of Income for the year ended December 31, 2009.

Issuer Services Revenues

Global Listing Services

U.S. Listing Services

Listing Services revenues in the U.S. include annual renewal fees, listing of additional shares fees and initial listing fees. Annual renewal fees are recognized ratably over the following 12-month period. Listing of additional shares fees and initial listing fees are recognized on a straight-line basis over estimated service periods, which are four and six years, respectively, based on our historical listing experience and projected future listing duration.

European Listing Services

European listing fees, which are comprised of revenues derived from annual fees received from listed companies on our Nordic and Baltic exchanges and NASDAQ OMX First North , are directly related to the listed companies' market capitalization on a trailing 12-month basis. These revenues are recognized ratably over the following 12-month period.

Corporate Solutions

Global Listing Services revenues also include fees from Corporate Solutions. These fees include subscription income from Shareholder.com and Directors Desk, fees from GlobeNewswire and revenues from Corporate Solutions Nordic. Prior to October 2009, Corporate Solutions revenues also included commission income from our Carpenter Moore insurance agency business. In October 2009, we sold substantially all of our Carpenter Moore business and recorded a gain of $7 million which is included in gain on sales of businesses in the Consolidated Statements of Income for the year ended December 31, 2009. Fee income for services other than placement of insurance coverage is recognized as those services are provided. Shareholder.com revenues are based on subscription agreements with customers. Revenues from subscription agreements are recognized ratably over the contract period, generally one year in length. As part of subscription services, customers also are charged usage fees based upon actual usage of the services provided. Revenues from usage fees and other services are recognized when earned. Directors Desk revenues are based on subscriptions for online services for directors. Subscriptions are one year in length and revenues are recognized ratably over the year. GlobeNewswire generates fees primarily from wire distribution services, and revenues are recognized as services are provided. For our insurance agency business, commission income was recognized when coverage became effective, the premium due under the policy was known or could be reasonably estimated, and substantially all required services related to placing the insurance had been provided. Broker commission adjustments and commissions on premiums billed directly by underwriters were recognized when such amounts could be reasonably estimated.

Global Index Group

We develop and license NASDAQ OMX branded indexes, associated derivatives and financial products as part of our Global Index Group business. Revenues primarily include license fees from these branded indexes, associated derivatives and financial products in the U.S. and abroad. We also generate revenues by licensing and listing third-party structured products and third-party sponsored ETFs. We primarily have two types of license agreements: transaction-based licenses and asset-based licenses. Transaction-based licenses are generally renewable long-term agreements. Customers are charged based on transaction volume or a minimum contract amount, or both. If a customer is charged based on transaction volume, we recognize revenue when the transaction occurs. If a customer is charged based on a minimum contract amount, we recognize revenue on a pro-rata basis over the licensing term. Asset-based licenses are also generally long-term agreements. Customers are charged based on a percentage of assets under management for licensed products, per the agreement, on a monthly or quarterly basis. These revenues are recorded on a monthly or quarterly basis over the term of the license agreement.

Market Technology Revenues

Revenues are derived from the following primary sources: licensing, support and facility management revenues, delivery project revenues, as well as change request, advisory and broker surveillance revenues.

We enter into multiple-element sales arrangements to provide technology solutions and services to our customers. In order to recognize revenues associated with each individual element of a multiple-element sales arrangement separately, we are required to establish the existence of Vendor Specific Objective Evidence, or VSOE, of fair value for each element. When VSOE for individual elements of an arrangement cannot be established, revenue is generally deferred and recognized over either the final element of the arrangement or the entire term of the arrangement for which the services will be delivered.

License and support revenues are derived from the system solutions developed and sold by NASDAQ OMX and are generally entered into in multiple-element sales arrangements. After we have developed and sold a system solution, the customer licenses the right to use the software and may require post contract support and other services. Facility management revenues are also generally entered into in multiple-element sales arrangements and are derived when NASDAQ OMX assumes responsibility for the continuous operation of a system platform for a customer and receives facility management revenues which can be both fixed and volume-based. Revenues for license, support and facility management services are generally deferred and recognized over either the final element of the arrangement or the entire term of the arrangement for which the services will be delivered. We record the deferral of revenue associated with multiple-element sales arrangements in deferred revenue and non-current deferred revenue and the deferral of costs in other current assets and other assets in the Consolidated Balance Sheets.

Delivery project revenues are derived from the installation phase of the system solutions developed and sold by NASDAQ OMX. The majority of our delivery projects involve individual adaptations to the specific requirements of the customer, such as those relating to functionality and capacity. We may customize our software technology and make significant modifications to the software to meet the needs of our customers, and as such, we account for these arrangements under contract accounting. Under contract accounting, when VSOE for valuing certain elements of an arrangement cannot be established, total revenues, as well as costs incurred, are deferred until the customization and significant modifications are complete and are then recognized over the post contract support period. We record the deferral of this revenue in deferred revenue and non-current deferred revenue and the deferral of costs in other current assets and other assets in the Consolidated Balance Sheets.

Change request revenues include customer specific adaptations and modifications of the system solution sold by NASDAQ OMX after delivery has occurred. Change request revenues are recognized in revenue when earned. Advisory services are designed to support our customers' strategies and help them with critical decisions in a highly demanding business environment. Advisory services revenues are recognized in revenue when earned. Broker surveillance revenues are derived from surveillance solutions targeting brokers and regulators throughout the world. Broker surveillance revenues are subscription based and are recognized in revenue when earned.

Earnings per Share

We present both basic and diluted EPS. Basic EPS is computed by dividing net income attributable to NASDAQ OMX adjusted for accretion on our series A convertible preferred stock by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income attributable to NASDAQ OMX adjusted for accretion on our series A convertible preferred stock and the interest impact of our 3.75% convertible notes, net of tax by the weighted-average number of common shares and common share equivalents outstanding during the period and reflects the assumed conversion of all dilutive securities which consist primarily of convertible notes, employee stock options, restricted stock and PSUs. Common share equivalents are excluded from the computation in periods for which they have an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price over the period are anti-dilutive and, accordingly, are excluded from the calculation. See Note 13, "Earnings per Common Share," for further discussion.

Share-Based Compensation

Accounting for share-based compensation requires the measurement and recognition of compensation expense for all equity awards based on estimated fair values. We recognize compensation expense for equity awards on a straight-line basis over the requisite service period of the award. See Note 11, "Share-Based Compensation," for further discussion.

Deferred Revenue

Deferred revenue represents revenues for services not yet rendered, primarily for Global Listing Services and Market Technology. See Note 7, "Deferred Revenue," for further discussion.

Advertising Costs

We expense advertising costs, which include media advertising and production costs, in the periods in which the costs are incurred. Media advertising and production costs included as marketing and advertising expense in the Consolidated Statements of Income totaled $9 million in 2010, $5 million for 2009 and $7 million for 2008.

Software Costs

Significant purchased application software and operational software that are an integral part of computer hardware are capitalized and amortized on a straight-line basis over their estimated useful lives, generally two to five years. All other purchased software is charged to expense as incurred. We develop systems solutions for both internal and external use.

Certain costs incurred in connection with developing or obtaining internal use software are capitalized. Unamortized capitalized software development costs are included in data processing equipment and software, within property and equipment, net in the Consolidated Balance Sheets. Amortization of costs capitalized is included in depreciation and amortization expense in the Consolidated Statements of Income.

Certain costs of computer software to be sold, leased, or otherwise marketed as a separate product or as part of a product or process are capitalized after the product has reached technological feasibility. Technological feasibility is established upon completion of a detail program design or, in its absence, completion. Thereafter, all software production costs are capitalized. Prior to reaching technological feasibility, all costs are charged to expense. Capitalized costs are amortized on a straight-line basis over the remaining estimated economic life of the product and are included in depreciation and amortization expense in the Consolidated Statements of Income.

Leases

We expense rent from non-cancellable operating leases, net of sublease income, on a straight line basis, based on future minimum lease payments. The net costs are included in occupancy expense in the Consolidated Statements of Income. See Note 16, "Leases," for further discussion.

Income Taxes

We use the asset and liability method to provide income taxes on all transactions recorded in the consolidated financial statements. Deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities (i.e., temporary differences) and are measured at the enacted rates that will be in effect when these differences are realized. If necessary, a valuation allowance is established to reduce deferred tax assets to the amount that is more likely than not to be realized.

In order to recognize and measure our unrecognized tax benefits, management determines whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Once it is determined that a position meets the recognition thresholds, the position is measured to determine the amount of benefit to be recognized in the consolidated financial statements. Interest and/or penalties related to income tax matters are recognized in income tax expense.

Recently Adopted Accounting Pronouncements

ASC Topic 605.25— In October 2009, the Financial Accounting Standards Board, or FASB, issued authoritative guidance on FASB Accounting Standards Codification, or ASC, Topic 605.25, "Revenue Recognition—Multiple-Element Arrangements." This guidance modifies the revenue recognition guidance for arrangements that involve the delivery of multiple-elements, such as product, software, services or support, to a customer at different times as part of a single revenue generating transaction. This standard provides principles and application guidance to determine whether multiple deliverables exist, how the individual deliverables should be separated and how to allocate the revenue in the arrangement among those separate deliverables. The standard also expands the disclosure requirements for multiple deliverable revenue arrangements. This accounting guidance was effective for us on January 1, 2011, but allowed early adoption as of the first quarter of 2010 or through a retrospective application to all revenue arrangements for all periods presented in the financial statements. We adopted this guidance in the first quarter of 2010. The adoption did not have a significant impact on our financial position or results of operations.

ASC Topic 820 —In January 2010, the FASB issued amended guidance relating to ASC Topic 820, "Fair Value Measurements and Disclosures." The amended guidance requires new disclosures as follows:

•

Amounts related to transfers in and out of Levels 1 and 2 shall be disclosed separately and the reasons for the transfers shall be described.

•

In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements on a gross basis.

The guidance also provides amendments that clarify existing disclosures related to the following:

•

Reporting fair value measurement disclosures for each class of assets and liabilities.

•

Providing disclosure surrounding the valuation techniques and inputs used to measure fair value for both Level 2 and Level 3 fair value measurements.

This accounting guidance was effective for us beginning on January 1, 2010, except for the disclosure requirements surrounding the reconciliation of Level 3 fair value measurements, which were effective for us on January 1, 2011. Since this guidance only requires additional disclosure, it did not and will not affect our financial position or results of operations.

ASC Topic 855 —In February 2010, the FASB issued amended guidance on subsequent events. Under this amended guidance, entities that file with the SEC are no longer required to disclose the date through which subsequent events have been evaluated in originally issued or revised financial statements. This amended guidance was effective immediately and we adopted the new requirements as of March 31, 2010.

Acquisitions and Strategic Initiatives

12 Months Ended

Dec. 31, 2010

Acquisitions and Strategic Initiatives

Acquisitions and Strategic Initiatives

3. Acquisitions and Strategic Initiatives

We completed the following acquisitions and strategic initiatives in 2010, 2009 and 2008. The results of operations of each transaction are included in our Consolidated Statements of Income from the dates of each acquisition or strategic initiative.

2010 Acquisitions

We completed the following acquisitions during 2010:


	Purchase Consideration		Total Net (Liabilities) Assets Acquired			Purchased Intangible Assets		Goodwill
	(in millions)
FTEN⁽¹⁾	$	110	$	(1	)	$	46	$	65
SMARTS⁽²⁾		77		(5	)		28		54
Nord Pool ASA⁽³⁾		17		7			2		8

Total for 2010	$	204	$	1		$	76	$	127

⁽¹⁾

In December 2010, we acquired FTEN, a leading provider of RTRM solutions for the financial securities market for $110 million. FTEN purchase consideration includes $1 million held in escrow to be paid in 2011 and $11 million held in escrow to be paid in 2012, in accordance with the purchase agreement. We acquired net assets, at fair value, totaling $3 million and recorded a current deferred tax liability of $2 million and a non-current deferred tax liability of $16 million related to purchased intangible assets, and we also recorded a non-current deferred tax asset of $14 million related to net operating loss carry forwards, resulting in total net liabilities acquired of $1 million. The total deferred tax liabilities of $18 million represent the tax effect of the difference between the estimated assigned fair value of the acquired intangible assets ($46 million) and the tax basis ($0) of such assets. The estimated amount of $18 million is determined by multiplying the difference of $46 million by FTEN's effective tax rate of 39.55%. The purchased intangible assets of $46 million consisted of $23 million in customer relationships, $12 million in technology, $9 million for the FTEN trade name and $2 million related to non-compete agreements.

⁽²⁾

In August 2010, we acquired SMARTS, a leading technology provider of surveillance solutions to exchanges, regulators and brokers to diversify our Market Technology business and enter the broker surveillance and compliance market. We completed our acquisition of SMARTS for $77 million, which included a $75 million initial purchase price as well as a $2 million working capital adjustment. SMARTS purchase consideration also includes $2 million held in escrow to be paid in 2011 and $11 million held in escrow to be paid in 2012, in accordance with the purchase agreement. We acquired net assets, at fair value, totaling $3 million and recorded a current deferred tax liability of $1 million and a non-current deferred tax liability of $7 million related to purchased intangible assets, resulting in total net liabilities acquired of $5 million. The total deferred tax liabilities of $8 million represent the tax effect of the difference between the estimated assigned fair value of the acquired intangible assets ($28 million) and the tax basis ($0) of such assets. The estimated amount of $8 million is determined by multiplying the difference of $28 million by SMARTS' effective tax rate of 30%. The purchased intangible assets of $28 million consisted of $11 million in technology and $17 million in customer relationships.

⁽³⁾

In May 2010, we acquired Nord Pool, a derivatives trading market, for $17 million (101 million NOK). We acquired net assets, at fair value, totaling $8 million and recorded deferred tax liabilities of $1 million related to purchased intangible assets, resulting in total net assets acquired of $7 million. Through this acquisition, we now hold a Norwegian exchange license and operate the Nordic power market and the European carbon market on one trading platform.

The above amounts represent the preliminary allocation of the purchase price and are subject to revision during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Adjustments to the provisional values during the measurement period will be pushed back to the date of acquisition. Comparative information for periods after acquisition but before the period in which the adjustments are identified will be adjusted to reflect the effects of the adjustments as if they were taken into account as of the acquisition date. Changes to amounts recorded as assets and liabilities may result in a corresponding adjustment to goodwill. There were no adjustments to the provisional values during the year ended December 31, 2010.

Acquisition of ZVM

In December 2010, we acquired ZVM, a provider of webcasting and investor relation communication services for companies in the Nordic region, for an immaterial amount. ZVM, which is the leading provider of webcasting services in Northern Europe, will add to the growing range of capabilities and services NASDAQ OMX offers public and private companies in the U.S. and Europe.

Acquisition of Assets of North American Energy Credit and Clearing Corp.

In March 2010, we also purchased the assets of North American Energy Credit and Clearing Corp. for an immaterial amount. With this purchase, NASDAQ OMX expanded its presence in the OTC energy commodity markets. As previously discussed, the acquisition of these assets was effected through our newly-established subsidiary, NOCC. In March 2010, we also provided an additional $25 million in capital to NOCC to improve its liquidity position. As of December 31, 2010, this amount is classified as non-current restricted cash in the Consolidated Balance Sheets.

2010 Acquisition-related Costs

For the year ended December 31, 2010, acquisition-related transaction costs for the 2010 acquisitions described above are included in merger and strategic initiatives expense in the Consolidated Statements of Income.

2009 Strategic Initiative

Investment in European Multilateral Clearing Facility N.V.

In January 2009, we acquired a 22% stake in EMCF, a leading European clearinghouse, which is accounted for under the equity method of accounting.

2008 Acquisitions and Strategic Initiatives

Combination with OMX AB and Strategic Partnership with Borse Dubai Limited

On February 27, 2008, Nasdaq and OMX AB combined their businesses pursuant to an agreement with Borse Dubai. The purchase price of OMX AB was $4.4 billion, consisting of an equity component and a cash component. Our business combination with OMX AB created a premier global exchange company, bringing together complementary businesses, diversifying our operations, enhancing our existing product offerings and solidifying our leadership in global exchange technology.

Concurrently with the business combination with OMX AB, we also acquired a 33¹/3% equity stake in NASDAQ Dubai in exchange for a contribution of $50 million in cash and the entry into certain technology and trademark licensing agreements. In November 2008, we listed our common stock on NASDAQ Dubai. In December 2009, we agreed to participate in the realignment of the ownership structure of NASDAQ Dubai. As part of this realignment, NASDAQ Dubai became a wholly-owned subsidiary of DFM, a publicly traded company controlled by Borse Dubai and NASDAQ OMX received a 1% equity interest in DFM in exchange for its equity interest in NASDAQ Dubai. In connection with the realignment, in December 2009, we recorded an impairment charge of $82 million to write down our investment in NASDAQ Dubai to its estimated fair value. See Note 5, "Investments," for further discussion.

Acquisition of the Philadelphia Stock Exchange

In July 2008, we completed our acquisition of PHLX, expanding our presence in the derivatives market. The acquisition of PHLX provided us with one of the largest options market in the U.S. and with increased exposure to a fast growing asset class and diversification into an area adjacent to our core equity trading business. PHLX, renamed NASDAQ OMX PHLX, operates as a distinct market alongside The NASDAQ Options Market, our options platform that was launched in March 2008. With the acquisition of PHLX and the launch of The NASDAQ Options Market, we have substantially increased our footprint in global derivatives.

Acquisition of the Boston Stock Exchange

We completed our acquisition of BSX in August 2008. The BSX acquisition provided us with an additional license for trading both cash equities and options and a clearing license. We used the BSX license to create a second U.S. cash equities market, called NASDAQ OMX BX, which was launched in January 2009. With NASDAQ OMX BX, we were able to offer an additional quote within the U.S. cash equities marketplace, providing our customers enhanced trading choices and price flexibility. We have been able to leverage our INET trading system, which runs The NASDAQ Stock Market, to operate NASDAQ OMX BX, providing customers an additional fast and efficient cash equities market.

Acquisition of Certain Businesses from Nord Pool

In October 2008, we acquired Nord Pool's clearing, international derivatives and consulting subsidiaries. As a result of the acquisition, we launched NASDAQ OMX Commodities, which offers energy and carbon derivatives products. NASDAQ OMX Commodities provides access to the world's largest power derivatives markets and one of Europe's largest carbon markets.

Acquisition of a Majority Interest in International Derivatives Clearing Group

In December 2008, we acquired a majority interest in IDCG, and IDCG became an independently operated subsidiary of NASDAQ OMX. IDCG provides CCP clearing for interest rate swap products through its clearinghouse subsidiary IDCH. NFX is serving as the designated contract market for trading of certain of these interest rate swap products.

Investment in Agora-X, LLC

As of December 31, 2008, we had a 20% aggregate equity interest in Agora-X and increased our ownership interest to 85% in December 2009, resulting in a majority stake. In the second quarter of 2010, we made a strategic decision to close our Agora-X business and recorded a loss of $5 million. This charge was included in loss on divestiture of businesses in the Consolidated Statements of Income for the year ended December 31, 2010.

The following table presents a summary of our acquisitions in 2008:


	Purchase Consideration⁽¹⁾		Total Net (Liabilities) Assets Acquired⁽²⁾			Purchased Intangible Assets			Goodwill
	(in millions)
2008
OMX AB	$	4,371	$	(340	)	$	1,207		$	3,504
PHLX		708		(99	)		337			470
BSX		43		(44	)		52			35
Nord Pool		317		68	⁽³⁾		81	⁽³⁾		168	⁽³⁾
IDCG		85		59			26			—

Total for 2008	$	5,524	$	(356	)	$	1,703		$	4,177

⁽¹⁾

OMX AB consideration includes $2,267 million for the value of common stock issued to Borse Dubai, $2,029 million in cash and $75 million in acquisition costs. PHLX consideration includes $652 million in cash, $12 million in acquisition costs and $44 million in working capital adjustments. PHLX consideration included $15 million held in escrow at December 31, 2008, which was paid in 2009 in accordance with the purchase agreement. BSX consideration includes the $61 million purchase price, plus $5 million for the settlement of a loan, less $23 million of negative working capital adjustments. BSX consideration included $3 million held in escrow, which was paid in 2010 in accordance with the purchase agreement. Nord Pool consideration includes $249 million in cash, $66 million in a vendor note which was settled in 2009 and $2 million in acquisition costs. IDCG purchase consideration consisted primarily of cash.

⁽²⁾

We acquired net assets of OMX AB totaling $137 million and recorded deferred tax liabilities of $477 million related to OMX AB's intangible assets. We acquired net assets of PHLX totaling $55 million and recorded deferred tax liabilities of $154 million related to PHLX's intangible assets. The PHLX net assets of $55 million were reduced by $44 million of working capital, which was included as an adjustment to the purchase consideration. We acquired net liabilities of BSX totaling $22 million and recorded deferred tax liabilities of $22 million related to BSX's intangible assets. The BSX net liabilities of $22 million include $23 million of negative working capital, which was included as an adjustment to the purchase consideration. We acquired net assets in the Nord Pool transaction totaling $91 million and recorded deferred tax liabilities of $23 million related to Nord Pool's intangible assets. See (3) below for adjustments to Nord Pool's intangible assets and deferred tax liabilities. We acquired net assets of IDCG of $59 million, which included cash received from NASDAQ OMX for the acquisition consideration.

⁽³ ⁾

As we finalized the purchase price allocation for the Nord Pool transaction in the fourth quarter of 2009, the fair values of the purchased intangible assets were adjusted, resulting in a decrease of $8 million, an increase to goodwill of $7 million and a decrease to deferred tax liabilities of $1 million. The impact on amortization expense was immaterial.

The following table presents the details of the purchased intangible assets acquired in the above 2008 acquisitions. All purchased finite-lived intangible assets are amortized using the straight-line method. See Note 4, "Goodwill and Purchased Intangible Assets," for further discussion.


	Technology				Customer Relationships					Registrations, Licenses and Trade Names			Total
	Estimated Useful Life (in Years)		Amount		Estimated Useful Life (in Years)		Amount			Estimated Useful Life (in Years)	Amount		Amount
	(in millions, except years)
2008
OMX AB		3-10	$	40		20-33	$	420		Indefinite⁽¹⁾	$	747	$	1,207
PHLX		2-5		11		19-23		113		Indefinite⁽² ⁾		213		337
BSX		—		—		17		2		Indefinite⁽ ³ ⁾		50		52
Nord Pool		7		1		22		77	⁽⁶ ⁾	10⁽⁴ ⁾		3		81
IDCG		—		—		—		—		Indefinite⁽ ⁵ ⁾		26		26

Total for 2008			$	52			$	612			$	1,039	$	1,703

⁽¹⁾	Includes exchange and clearing registrations and the OMX AB trade name which we determined to have an indefinite estimated useful life.

⁽ ² ⁾

Includes exchange and futures registrations and the PHLX trade name which we determined to have an indefinite estimated useful life.

⁽ ³ ⁾

Includes SRO and clearing licenses which we determined to have an indefinite estimated useful life.

⁽ ⁴ ⁾

Includes the Nord Pool trade name which we determined to have an estimated useful life of 10 years.

⁽ ⁵ ⁾

Includes derivative clearing license for interest rate swap products which we determined to have an indefinite estimated useful life.

⁽⁶ ⁾

Pro Forma Results

The consolidated financial statements for the years ended December 31, 2010, 2009 and 2008 include the financial results of the above 2010, 2009 and 2008 acquisitions and strategic initiatives from the date of each acquisition or strategic initiative. Pro forma results of operations for the acquisitions completed in 2010 and the strategic initiative completed in 2009 have not been presented since these acquisitions and the strategic initiative both individually and in the aggregate were not material to our financial results.

The unaudited pro forma combined historical results for the year ended December 31, 2008, shown in the table below, include the combined historical Consolidated Statements of Income of Nasdaq, OMX AB and PHLX giving effect to the OMX AB business combination and PHLX acquisition as if they had occurred at the beginning of 2008. We also acquired BSX, Nord Pool and IDCG in 2008, but we have not included their results prior to their respective closing dates in these pro forma results as these transactions were not considered significant.


	December 31, 2008
	(in millions, except per share amounts)
Revenues	$	3,853
Revenues less transaction rebates, brokerage, clearance and exchange fees		1,652
Net income		309
Net income attributable to NASDAQ OMX		308
Basic earnings per share	$	1.54
Diluted earnings per share	$	1.45

The pro forma results for the year ended December 31, 2008 primarily includes adjustments for amortization of the intangible assets acquired in the business combination with OMX AB and the PHLX acquisition, the elimination of OMX AB's historical amortization expense, elimination of PHLX's non-recurring expenses related to the acquisition, additional interest expense on our prior credit facilities and the 2.50% convertible senior notes, elimination of OMX AB's historical interest expense related to OMX AB's debt that was refinanced and related tax adjustments.

The pro forma results for the year ended December 31, 2008 also include the elimination of the non-recurring gain on the contribution of the Nasdaq trade name in the transaction with NASDAQ Dubai discussed above, as well as adjustments to eliminate interest income related to the net cash received from the sale of our investment in LSE.

Goodwill and Purchased Intangible Assets

12 Months Ended

Dec. 31, 2010

Goodwill and Purchased Intangible Assets

Goodwill and Purchased Intangible Assets

4. Goodwill and Purchased Intangible Assets

Goodwill

The following table presents the changes in goodwill by business segment during the year ended December 31, 2010:


	Market Services		Issuer Services		Market Technology		Total
	(in millions)
Balance at December 31, 2009	$	4,432	$	273	$	95	$	4,800
Goodwill acquired		73		—		54		127
Foreign currency translation adjustment and other		174		19		7		200

Balance at December 31, 2010	$	4,679	$	292	$	156	$	5,127

As of December 31, 2010, the amount of goodwill that is expected to be deductible for tax purposes in future periods is $107 million.

The goodwill acquired for Market Services shown above relates to our acquisitions of FTEN in December 2010 and Nord Pool in May 2010. The goodwill acquired for Market Technology relates to our acquisition of SMARTS in August 2010. See Note 3, "Acquisitions and Strategic Initiatives," for further discussion.

Purchased Intangible Assets

The following table presents details of our total purchased intangible assets, both finite- and indefinite-lived:


	December 31, 2010											December 31, 2009
	Gross Carrying Amount			Accumulated Amortization			Net Intangible Assets			Weighted- Average Useful Life (in Years)		Gross Carrying Amount			Accumulated Amortization			Net Intangible Assets			Weighted- Average Useful Life (in Years)
	(in millions)											(in millions)
*Finite-Lived Intangible Assets*
Technology	$	72		$	(41	)	$	31			6	$	65		$	(41	)	$	24			4
Customer relationships		853			(152	)		701			21		813			(110	)		703			21
Other		6			(1	)		5			8		5			(1	)		4			10
Foreign currency translation adjustment		(15	)		4			(11	)				(45	)		7			(38	)

Total finite-lived intangible assets	$	916		$	(190	)	$	726				$	838		$	(145	)	$	693

*Indefinite-Lived Intangible Assets*
Exchange and clearing registrations	$	790		$	—		$	790				$	790		$	—		$	790
Trade names		181			—			181					173			—			173
Licenses		78			—			78					76			—			76
Foreign currency translation adjustment		(56	)		—			(56	)				(101	)		—			(101	)

Total indefinite-lived intangible assets	$	993		$	—		$	993				$	938		$	—		$	938

Total intangible assets	$	1,909		$	(190	)	$	1,719				$	1,776		$	(145	)	$	1,631

Amortization expense for purchased finite-lived intangible assets was $57 million for the years ended December 31, 2010 and 2009 and $48 million for the year ended December 31, 2008. The increase in amortization expense in 2009 compared to 2008 was primarily due to intangible asset amortization expense on identifiable finite-lived intangible assets purchased in connection with the OMX AB business combination and the acquisitions of PHLX and certain businesses of Nord Pool from the date of each acquisition.

In 2008, due to an operating loss and a projection of future cash flow losses due to lower contract rates for Carpenter Moore, which was part of Corporate Solutions within our Issuer Services segment, we evaluated the ongoing value of the intangible assets associated with this business. Based on this evaluation, we determined that finite-lived intangible assets, consisting primarily of customer relationships and technology, with a carrying value of approximately $7 million, were no longer recoverable and were in fact impaired, and wrote them down to their estimated fair value of zero. The risk-adjusted discount rates used to compute the present value of the expected net cash flows of individual intangible assets were based on Carpenter Moore's weighted average cost of capital, which ranged from 14.5% to 16.9%. These discount rates were determined after consideration of Carpenter Moore's rate of return on debt and equity and the weighted-average return on invested capital. We recorded the impairment loss in asset impairment charges in the Consolidated Statements of Income for the year ended December 31, 2008. In October 2009, we sold substantially all of our Carpenter Moore business and recorded a gain of $7 million included in gain on sales of businesses in the Consolidated Statements of Income.

The estimated future amortization expense (excluding the impact of foreign currency translation adjustments of $11 million as of December 31, 2010) of purchased intangible assets as of December 31, 2010 is as follows:


	(in millions)
2011	$	53
2012		50
2013		49
2014		47
2015		45
2016 and thereafter		493

Total	$	737

- Definition

Discloses the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain or loss on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. This element may be used as a single block of text to include the entire intangible asset disclosure including data and tables.

+ References+ Details

Investments	12 Months Ended
Investments	Dec. 31, 2010
Investments
Investments	5. Investments Trading Securities Trading securities, which are included in financial investments, at fair value in the Consolidated Balance Sheets, were $220 million as of December 31, 2010 and $308 million as of December 31, 2009. These securities are primarily comprised of Swedish government debt securities, of which $190 million as of December 31, 2010 and $183 million as of December 31, 2009, are restricted assets to meet regulatory capital requirements for NASDAQ OMX Stockholm's clearing operations. Available-for-Sale Investment Securities *Investment in DFM* Our available-for-sale investment security, which is included in financial investments, at fair value in the Consolidated Balance Sheets, represents our 1% investment in DFM. In May 2010, we completed the exchange of our equity interest in NASDAQ Dubai for a 1% investment in DFM. See "Investment in NASDAQ Dubai" below for further discussion. As of December 31, 2010, the cost basis of this security was $36 million and the fair value was $33 million. The $3 million change between the cost basis and fair value is reflected as an unrealized holding loss in accumulated other comprehensive loss in the Consolidated Balance Sheets. We reviewed the carrying value of this investment security to determine whether an other-than-temporary decline in value exists. We considered factors affecting the investee, factors affecting the industry the investee operates in and general market trends. We also considered the length of time the market value has been below the cost basis and the near-term prospects for recovery of unrealized losses. As of December 31, 2010, we have not recognized an other-than-temporary decline in value on this investment security. *Investment in Oslo* In connection with our business combination with OMX AB, we acquired a long-term available-for-sale investment security in Oslo. In 2008, we recorded an other-than-temporary impairment loss on this investment security of $35 million in asset impairment charges in the Consolidated Statements of Income. During the second quarter of 2009, we made a strategic decision to sell this investment security, demonstrating our intent to no longer hold this investment, and recorded a $5 million loss, which includes costs directly related to the sale, primarily broker fees. This loss is included in loss on sale of investment security in the Consolidated Statements of Income for the year ended December 31, 2009. Equity Method Investments The equity method of accounting is used when we own less than 50% of the outstanding voting stock, but exercise significant influence over the operating and financial policies of a company. Equity interest in our equity method investments was $27 million as of December 31, 2010, which consisted primarily of our equity interest in EMCF. Equity interest in our equity method investments was $66 million as of December 31, 2009, which consisted primarily of our equity interests in NASDAQ Dubai and EMCF. Equity method investments are included in other assets in the Consolidated Balance Sheets. As discussed above, we completed the exchange of our equity interest in NASDAQ Dubai for a 1% available-for-sale investment in DFM in May 2010. See "Investment in NASDAQ Dubai" below for further discussion. Income (loss) recognized from our equity interest in the earnings and losses of these companies was a net gain of $2 million for the year ended December 31, 2010 compared with a net loss of $107 million for the year ended December 31, 2009. The net loss during the year ended December 31, 2009 was primarily due to impairment charges relating to NASDAQ Dubai and Agora-X and the sale of our investment in Orc. See "Investment in NASDAQ Dubai," "Investment in Orc Software," and "Impairment of Agora-X," below for further discussion. Income (loss) recognized from our equity method investments is included in income (loss) from unconsolidated investees, net in the Consolidated Statements of Income. *Investment in NASDAQ Dubai* In December 2009, we agreed to participate in the realignment of the ownership structure of NASDAQ Dubai. The realignment was completed in May 2010 and at that time, NASDAQ Dubai became a wholly-owned subsidiary of DFM, a publicly traded company controlled by Borse Dubai. We received a 1% equity interest in DFM in exchange for our equity interest in NASDAQ Dubai. Our existing technology and trademark licensing arrangements with Borse Dubai and NASDAQ Dubai remain unchanged. In connection with the realignment of the ownership structure discussed above, a third-party specialist determined the fair value of NASDAQ Dubai. Based on this valuation, we determined our carrying value of NASDAQ Dubai was no longer recoverable and was in fact impaired, and we wrote down our investment to fair value which resulted in an $82 million pre-tax, non-cash impairment charge for the year ended December 31, 2009. At the time of the realignment in May 2010, we recorded a pre-tax, non cash loss of $1 million in income (loss) from unconsolidated investees, net in the Consolidated Statements of Income, which was based on the difference between the price of DFM common stock multiplied by the number of shares of DFM acquired and the carrying value of our investment in NASDAQ Dubai at the time of the exchange. NASDAQ Dubai and DFM are related parties, as both of them are primarily owned by Borse Dubai, our largest stockholder. *Investment in Orc Software* During the second quarter of 2009, we made a strategic decision to sell our investment in Orc, demonstrating our intent to no longer hold this investment. We sold shares representing 25.25% of the share capital of Orc to a group of Swedish and other international investors for $54 million in cash. As a result of the sale, we recognized a $19 million loss, which includes costs directly related to the sale, primarily broker fees. The loss is included in income (loss) from unconsolidated investees, net in the Consolidated Statements of Income for the year ended December 31, 2009. *Impairment of Agora-X* In December 2009, we entered into an agreement to increase our investment in Agora-X from 20% to 85%. In evaluating the fair value of the total investment, it was determined that our carrying value of Agora-X was no longer recoverable and was in fact impaired, and we wrote down our investment to fair value which resulted in a pre-tax, non-cash impairment charge of $5 million.

- Definition

This item represents the entire disclosure related to Investments in Certain Debt and Equity Securities (and certain other trading assets) which include all debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values. Other trading assets include assets that are carried on the balance sheet at fair value and held for trading purposes. A debt security represents a creditor relationship with an enterprise that is in the form of a security. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities (and other trading assets).

+ References+ Details

Property and Equipment, Net

12 Months Ended

Dec. 31, 2010

Property and Equipment, net

Property and Equipment, net

6. Property and Equipment, net

The following table presents our major categories of property and equipment, net:


	December 31,
	2010			2009
	(in millions)
Data processing equipment and software	$	348		$	313
Furniture, equipment and leasehold improvements		180			178

		528			491
Less: accumulated depreciation and amortization		(364	)		(327	)

Total property and equipment, net	$	164		$	164

Depreciation and amortization expense for property and equipment was $46 million for the year ended December 31, 2010, $47 million for the year ended December 31, 2009 and $45 million for the year ended December 31, 2008. These amounts are included in depreciation and amortization expense in the Consolidated Statements of Income.

As of December 31, 2010 and 2009, we do not own any real estate properties.

Deferred Revenue

12 Months Ended

Dec. 31, 2010

Deferred Revenue

Deferred Revenue

7. Deferred Revenue

Deferred revenue represents cash payments received that are yet to be recognized as revenue. At December 31, 2010, we have estimated that our deferred revenue, which is primarily related to Global Listing Services and Market Technology fees, will be recognized in the following years:


	Initial Listing Fees		Listing of Additional Shares Fees		Annual Renewal Fees and Other		Market Technology⁽¹⁾		Total
	(in millions)
Fiscal year ended:
2011	$	15	$	35	$	21	$	51	$	122
2012		11		25		—		29		65
2013		7		17		—		28		52
2014		5		6		—		19		30
2015		3		—		—		11		14
2016 and thereafter		1		—		—		8		9

	$	42	$	83	$	21	$	146	$	292

⁽¹⁾	The timing of recognition of our deferred Market Technology revenues is dependent upon when significant modifications are made pursuant to existing contracts. As such, as it relates to these fees, the timing represents our best estimate.

Our deferred revenue during the years ended December 31, 2010 and 2009 is reflected in the following table.


	Initial Listing Fees			Listing of Additional Shares Fees			Annual Renewal Fees and Other			Market Technology⁽²⁾			Total
	(in millions)
Balance at January 1, 2009	$	57		$	74		$	21		$	101		$	253
Additions⁽¹⁾		9			39			169			87			304
Amortization⁽¹⁾		(20	)		(37	)		(173	)		(64	)		(294	)
Foreign currency translation adjustment		—			—			1			1			2

Balance at December 31, 2009	$	46		$	76		$	18		$	125		$	265

Additions⁽¹⁾		14			46			222			32			314
Amortization⁽¹⁾		(18	)		(39	)		(219	)		(13	)		(289	)
Foreign currency translation adjustment		—			—			—			2			2

Balance at December 31, 2010	$	42		$	83		$	21		$	146		$	292

⁽¹⁾	The additions and amortization for initial listing fees, listing of additional shares fees and annual renewal fees and other primarily reflect Issuer Services revenues from U.S. listing fees.

⁽²⁾

Market Technology deferred revenues include revenues from delivered client contracts in the support phase charged during the period. Under contract accounting, where customization and significant modifications to the software are made to meet the needs of our customers, total revenues as well as costs incurred, are deferred until significant modifications are completed and delivered. Once delivered, deferred revenue and the related deferred costs are recognized over the post contract support period. We have included the deferral of costs in other current assets and other assets in the Consolidated Balance Sheets. The amortization of Market Technology deferred revenue includes revenues earned from client contracts recognized during the period and from the technology licenses contributed to NASDAQ Dubai.

Debt Obligations

12 Months Ended

Dec. 31, 2010

Debt Obligations

Debt Obligations

8. Debt Obligations

The following table presents the changes in our debt obligations during the year ended December 31, 2010:


	December 31, 2009			Additions		Payments, Conversions, Accretion and Other			December 31, 2010
	(in millions)
3.75% convertible notes due October 22, 2012 (net of discount)⁽¹⁾	$	—		$	—	$	—		$	—
2.50% convertible senior notes due August 15, 2013		374			—		14			388
4.00% senior unsecured notes due January 15, 2015 (net of discount)⁽²⁾		—			398		—			398
5.55% senior unsecured notes due January 15, 2020 (net of discount)⁽²⁾		—			598		—			598
$700 million senior unsecured term loan facility credit agreement due January 15, 2013 (average interest rate of 2.33%for the year ended December 31, 2010)⁽²⁾		—			700		(130	)		570
5.25% senior unsecured notes due January 16, 2018, (net of discount)⁽³⁾		—			367		—			367
Senior unsecured bridge facility⁽⁴⁾		—			370		(370	)		—
6.25% subordinated debt assumed from the acquisition of Nord Pool's derivatives, clearing and consulting subsidiaries repaid in May 2010⁽⁵⁾		18			—		(18	)		—
$2,000 million senior secured term credit facilities repaid January 2010⁽²⁾		1,700			—		(1,700	)		—

Total debt obligations		2,092			2,433		(2,204	)		2,321
Less current portion		(225	)		—		85			(140	)

Total long-term debt obligations	$	1,867		$	2,433	$	(2,119	)	$	2,181

⁽¹⁾

In September 2009, most holders of our outstanding 3.75% convertible notes converted their outstanding positions into common stock. As of December 31, 2010 and December 31, 2009, approximately $0.5 million aggregate principal amount of the 3.75% convertible notes remained outstanding. For further discussion, see "3.75% Convertible Notes" below.

⁽²⁾	See "Senior Unsecured Notes, Credit Facility and Repayment of Our Senior Secured Credit Facilities in Place as of December 31, 2009" below for further discussion.

⁽³⁾	See "5.25% Senior Unsecured Notes" below for further discussion.

⁽⁴⁾	See "Bridge Facility" below for further discussion.

⁽⁵⁾

Our subordinated debt obligation assumed in the acquisition of Nord Pool's derivatives, clearing and consulting subsidiaries was denominated in Norwegian Krone and totaled 100 million Norwegian Krone ($18 million as of December 31, 2009 and $16 million at the time of the repayment in May 2010). The difference of $2 million reflects changes in foreign currency exchange rates.

3.75% Convertible Notes

The 3.75% convertible notes were originally issued to Hellman & Friedman, or H&F ($300 million), SLP ($141 million) and other holders ($4 million) in order to finance the acquisition of INET. These notes were convertible into our common stock at a price of $14.50 per share, representing 30,689,655 shares subject to adjustment in general for any stock split, dividend, combination, recapitalization or similar event. We also issued warrants to purchase shares of our common stock at a price of $14.50 per share to H&F (3,400,000 shares), SLP (1,523,325 shares) and other holders (39,175 shares). The warrants became exercisable on April 22, 2006 and would have expired on December 8, 2008. During 2007, H&F converted all of their 3.75% convertible notes into common stock and exercised all of their outstanding warrants prior to expiration. During 2007 and 2008, SLP and other holders converted a portion of their 3.75% convertible notes into common stock and exercised all of their outstanding warrants prior to expiration. In September 2009, SLP and another holder, or Holders, converted their remaining outstanding 3.75% convertible notes into common stock in accordance with the terms of the notes. As an inducement for conversion, we agreed to pay the Holders and certain of their affiliates an aggregate amount of $9 million in cash and issue to the Holders shares of our series A convertible preferred stock, with an aggregate initial liquidation preference amount of $16 million. See "Preferred Stock," of Note 12, "NASDAQ OMX Stockholders' Equity," for further discussion.

As of December 31, 2010 and 2009, approximately $0.5 million aggregate principal amount of the 3.75% convertible notes remained outstanding.

2.50% Convertible Senior Notes

During the first quarter of 2008, in connection with the business combination with OMX AB, we completed the offering of $475 million aggregate principal amount of 2.50% convertible senior notes due 2013. The interest rate on the notes is 2.50% per annum payable semi-annually in arrears on February 15 and August 15 and will mature on August 15, 2013.

The notes are convertible in certain circumstances specified in the indenture for the notes. Upon conversion, holders will receive, at the election of NASDAQ OMX, cash, common stock or a combination of cash and common stock. It is our current intent and policy to settle the principal amount of the notes in cash. The conversion rate will initially be 18.1386 shares of common stock per $1,000 principal amount of notes, which is equivalent to a conversion price of approximately $55.13 per share of common stock. At December 31, 2010, the 2.50% convertible senior notes are convertible into 7,757,283 shares of our common stock, subject to adjustment upon the occurrence of specified events. Subject to certain exceptions, if we undergo a "fundamental change" as described in the indenture, holders may require us to purchase their notes at a price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest.

Since the settlement structure of our 2.50% convertible senior notes permits settlement in cash upon conversion, we are required to separately account for the liability and equity components of the convertible debt in a manner that reflects our nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. This entails bifurcation of a component of the debt, classification of that component in equity and then accretion of the resulting discount on the debt being reflected in the income statement as part of interest expense.

The changes in the liability and equity components of our 2.50% convertible senior notes during the year ended December 31, 2010 and 2009 are as follows:


	Liability Component									Equity Component
	(in millions)									(in millions)
	Principal Balance			Unamortized Debt Discount			Net Carrying Amount			Gross Equity Component			Deferred Taxes			Net Equity Component
January 1, 2009	$	475		$	74		$	401		$	85		$	34		$	51
Accretion of debt discount		—			(13	)		13			—			—			—
Early extinguishment of debt		(47	)		(7	)		(40	)		(5	)		(2	)		(3	)

December 31, 2009	$	428		$	54		$	374		$	80		$	32		$	48
Accretion of debt discount		—			(14	)		14			—			—			—

December 31, 2010	$	428		$	40		$	388		$	80		$	32		$	48

The unamortized debt discount on the convertible debt was $40 million as of December 31, 2010 and $54 million as of December 31, 2009 and is included in debt obligations in the Consolidated Balance Sheets. This amount will be accreted as part of interest expense through the maturity date of the convertible debt of August 15, 2013. The effective annual interest rate on the 2.50% convertible senior notes was 6.53% for the years ended December 31, 2010 and 2009, which includes the accretion of the debt discount in addition to the annual contractual interest rate of 2.50%.

As of December 31, 2010 and December 31, 2009, the equity component of the convertible debt included in additional paid-in capital in the Consolidated Balance Sheets was $48 million. This amount is calculated as follows: $80 million of excess principal of the convertible debt over the carrying amount less $32 million of deferred taxes. The deferred tax liability is determined by multiplying the $80 million of excess principal of the convertible debt over the carrying amount by the U.S. marginal tax rate of 39.55%.

Interest expense recognized on our 2.50% convertible senior notes in the Consolidated Statements of Income for the years ended December 31, 2010, 2009 and 2008 is as follows:


	Year Ended December 31,
	2010		2009		2008
	(in millions)
Components of interest expense recognized on our 2.50% convertible senior notes
Accretion of debt discount	$	14	$	13	$	11
Contractual interest		10		11		10

Total interest expense recognized on our 2.50% convertible senior notes	$	24	$	24	$	21

Early Extinguishment of Debt

In 2009, we repurchased $47 million principal amount of the 2.50% convertible senior notes for a cash payment of $40 million and recognized a pre-tax gain on the early extinguishment of debt of $4 million (net of debt issuance and other costs of $0.8 million) which is recorded in general, administrative and other expense in the Consolidated Statements of Income. As a result of the $47 million repurchase, the remaining aggregate principal amount outstanding on these notes as of December 31, 2009 was $428 million. See above for further discussion.

Debt Issuance Costs

In 2008, in conjunction with the issuance of the 2.50% convertible senior notes, we incurred debt issuance costs of $10 million. These costs, which are capitalized and included in other assets in the Consolidated Balance Sheets, are being amortized over the life of the debt obligation. In connection with the early extinguishment of a portion of these notes, we recorded a pre-tax charge of $0.8 million for the year ended December 31, 2009 for debt issuance costs. See "Early Extinguishment of Debt" above for further discussion. Amortization expense, which is recorded as additional interest expense for these costs, was $2 million for the years ended December 31, 2010, 2009 and 2008.

Senior Unsecured Notes, Credit Facility and Repayment of Our Senior Secured Credit Facilities in Place as of December 31, 2009

In January 2010, NASDAQ OMX issued $1 billion of senior unsecured notes, or the Notes, and entered into a $950 million senior unsecured three-year credit facility. The credit facility provides for an unfunded $250 million revolving credit commitment (including a swingline facility and letter of credit facility), a $350 million funded Tranche A term loan and a $350 million funded Tranche X term loan. NASDAQ OMX applied the net proceeds from the Notes, the $700 million funded Term Loans and cash on hand to repay all amounts outstanding under our senior secured credit facilities in place as of December 31, 2009 and related fees. As a result, NASDAQ OMX terminated the associated credit agreement.

The Notes

The Notes were issued at a discount in two separate series consisting of $400 million aggregate principal amount of 4.00% senior notes due 2015 and $600 million aggregate principal amount of 5.55% senior notes due 2020. As a result of the discount, the proceeds received from the issuance were less than the aggregate principal amounts. As of December 31, 2010, the balance of $398 million for the 4.00% senior notes due 2015 and the balance of $598 million for the 5.55% senior notes due 2020, reflects the aggregate principal amounts, less the unamortized debt discount. The unamortized debt discount will be accreted through interest expense over the life of the Notes.

The 2015 Notes pay interest semiannually at a rate of 4.00% per annum until January 15, 2015, and the 2020 Notes pay interest semiannually at a rate of 5.55% per annum until January 15, 2020. The Notes are general unsecured obligations of ours and rank equally with all of our existing and future unsubordinated obligations. The Notes are not guaranteed by any of our subsidiaries. The Notes were issued under an indenture that, among other things, limits our ability to consolidate, merge or sell all or substantially all of our assets, create liens, and enter into sale and leaseback transactions.

Credit Facility

The credit facility provides for an unfunded $250 million revolving credit commitment (including a swingline facility and letter of credit facility), a $350 million funded Term Loan A and a $350 million funded Term Loan X. The loans under the credit facility have a variable interest rate based on either the London Interbank Offered Rate, or LIBOR, or the Federal Funds Rate, plus an applicable margin that varies with NASDAQ OMX's debt rating.

As required under our credit facility, we paid quarterly principal payments of $35 million on our Term Loans beginning in the third quarter of 2010. Total required payments were $70 million during 2010. In addition to the required quarterly payments, we made optional payments totaling $60 million of principal on our Term Loans during 2010.

The credit facility contains financial and operating covenants. Financial covenants include an interest expense coverage ratio and a maximum leverage ratio. Operating covenants include limitations on NASDAQ OMX's ability to incur additional indebtedness, grant liens on assets, enter into affiliate transactions and pay dividends.

The credit facility also contains customary affirmative covenants, including access to financial statements, notice of defaults and certain other material events, maintenance of business and insurance, and events of default, including cross-defaults to our material indebtedness.

NASDAQ OMX is permitted to repay borrowings under the credit facility at any time in whole or in part, without penalty. We also are required to repay loans outstanding under the credit facility with net cash proceeds from sales of property and assets of NASDAQ OMX and its subsidiaries (excluding inventory sales and other sales in the ordinary course of business) and casualty and condemnation proceeds, in each case subject to specified exceptions and thresholds.

Debt Issuance Costs

We incurred debt issuance and other costs of $21 million in connection with the issuance of the Notes and the entry into the new credit facility. These costs, which are capitalized and included in other assets in the Consolidated Balance Sheets, are being amortized over the life of the debt obligations. Amortization expense, which is recorded as additional interest expense for these costs, was $5 million for the year ended December 31, 2010.

Bridge Facility

In December 2010, NASDAQ OMX entered into a $400 million senior unsecured bridge facility and borrowed $370 million to partially finance the purchase of our stock from Borse Dubai. See "Share Repurchase from Borse Dubai," of Note 12, "NASDAQ OMX Stockholders' Equity," for further discussion of our share repurchase from Borse Dubai. We applied the net proceeds from the issuance of our 2018 notes, discussed below, and cash on hand to repay all amounts outstanding under the bridge facility and terminated the bridge facility as of December 31, 2010. The effective interest rate on borrowings under the bridge facility was 1.76%. Interest expense was immaterial for the year ended December 31, 2010.

5.25% Senior Unsecured Notes

In December 2010, NASDAQ OMX issued $370 million of 5.25% senior unsecured notes due 2018. We applied the net proceeds from the 2018 Notes of $367 million and cash on hand of $3 million to repay all amounts outstanding under our bridge facility, discussed above, as well as related fees.

The 2018 Notes were issued at a discount. As a result of the discount, the proceeds received from the issuance were less than the aggregate principal amount. As of December 31, 2010, the balance of $367 million reflects the aggregate principal amount, less the unamortized debt discount. The unamortized debt discount will be accreted though interest expense over the life of the 2018 Notes.

The 2018 Notes pay interest semiannually at a rate of 5.25% per annum until January 16, 2018 and may vary with NASDAQ OMX's debt rating up to a rate not to exceed 7.25%. The 2018 Notes are general unsecured obligations of ours and rank equally with all of our existing and future unsubordinated obligations. They are not guaranteed by any of our subsidiaries. The 2018 Notes were issued under indentures that among other things, limits our ability to consolidate, merge or sell all or substantially all of our assets, create liens, and enter into sale and leaseback transactions. In addition, upon a change of control triggering event (as defined in the indenture), the terms require us to repurchase all or part of each holder's notes for cash equal to 101% of the aggregate principal amount purchased plus accrued and unpaid interest, if any.

Debt Issuance Costs

We incurred debt issuance and other costs of $3 million in connection with the issuance of the 2018 Notes. These costs, which are capitalized and included in other assets in the Consolidated Balance Sheets, are being amortized over the life of the debt obligation. Amortization expense, which is recorded as additional interest expense for these costs, was immaterial for the year ended December 31, 2010.

Senior Secured Credit Facilities in Place as of December 31, 2009

In connection with the business combination with OMX AB, on February 27, 2008, NASDAQ OMX entered into a credit agreement which provided for up to $2,075 million of senior secured loans, which included (i) a five-year, $2,000 million senior secured term loan facility, or the Term Loan Facility, which consisted of (a) a $1,050 million term loan facility allocated to the OMX AB business combination, (b) a $650 million term loan facility allocated to the acquisition of PHLX, and (c) a $300 million term loan facility allocated to the Nord Pool transaction, and (ii) a five-year, $75 million senior secured revolving credit facility, with a letter of credit subfacility and swingline loan subfacility, or the Revolving Credit Facility, and together with the Term Loan Facility, the senior secured credit facilities in place as of December 31, 2009. The Revolving Credit Facility was undrawn as of December 31, 2009.

In addition, NASDAQ OMX may have requested that prospective additional lenders under the senior secured credit facilities in place as of December 31, 2009 agree to make available incremental term loans and incremental revolving commitments from time to time in an aggregate amount not to exceed $200 million.

In addition to financing the business combination with OMX AB, the acquisition of PHLX and the Nord Pool transaction, we used the debt financing under the senior secured credit facilities in place as of December 31, 2009 to pay fees and expenses incurred in connection with such transactions and repay certain indebtedness of OMX AB.

In January 2010, NASDAQ OMX applied the net proceeds from the Notes, the $700 million funded Term Loans and cash on hand to repay all amounts outstanding under our senior secured credit facilities in place as of December 31, 2009 and related fees. As a result, NASDAQ OMX terminated the associated credit agreement.

Borrowings under the senior secured credit facilities in place as of December 31, 2009 (other than swingline loans) bore interest at (i) the base rate (the higher of the prime rate announced by the Bank of America, N.A, and the federal funds effective rate plus 0.50%), plus an applicable margin, or (ii) the LIBO rate (set by the British Bankers Association LIBOR Rate), plus an applicable margin. The interest rate on swingline loans made under the senior secured credit facilities in place as of December 31, 2009 was the base rate, plus an applicable margin.

NASDAQ OMX's obligations under the senior secured credit facilities in place as of December 31, 2009 (i) were guaranteed by each of the existing and future direct and indirect material wholly-owned domestic subsidiaries of NASDAQ OMX, subject to certain exceptions, and (ii) were secured, subject to certain exceptions, by all the capital stock of each of our present and future subsidiaries (limited, in the case of foreign subsidiaries, to 65.0% of the voting stock of such subsidiaries) and all of the present and future property and assets (real and personal) of NASDAQ OMX and the guarantors.

NASDAQ OMX was permitted to repay borrowings under the senior secured credit facilities in place as of December 31, 2009 at any time in whole or in part, without penalty.

Principal Amortization Payment

As required under our senior secured credit facilities in place as of December 31, 2009, during 2009, we repaid a principal amount of $225 million on our borrowings under the senior secured credit facilities in place as of December 31, 2009.

Interest Rate Swaps

Under the provisions of our senior secured credit facilities in place as of December 31, 2009, we were required to maintain approximately 30% of our debt structure on a fixed rate basis for two years from the date of the credit agreement. As such, in August 2008, we entered into interest rate swap agreements that effectively converted $200 million of funds borrowed under our senior secured credit facilities in place as of December 31, 2009, which was floating rate debt, to a fixed rate basis through August 2011. The interest rate swaps were fixed to a base rate of 3.73% plus the current credit spread of 200 basis points as of December 31, 2009. The credit spread (not to exceed 200 basis points) was subject to change based upon the leverage ratio in accordance with the senior secured credit facilities in place as of December 31, 2009. In connection with the repayment of these senior secured credit facilities in place as of December 31, 2009 in January 2010, we terminated our interest rate swaps. See "Cash Flow Hedges," of Note 15, "Derivative Financial Instruments and Hedging Activities," for further discussion.

Debt Issuance Costs

In 2008, in conjunction with our senior secured credit facilities in place as of December 31, 2009, we incurred debt issuance costs of $44 million. These costs, which were capitalized and included in other assets in the Consolidated Balance Sheets, were being amortized over the life of the debt obligation. Amortization expense, which was recorded as additional interest expense for these costs, was $9 million for the year ended December 31, 2009 and $7 million for the year ended December 31, 2008.

In January 2010, as a result of the repayment of our senior secured credit facilities in place as of December 31, 2009, we recorded a pre-tax charge of $40 million, which included the write-off of the remaining unamortized balance of debt issuance costs incurred of $28 million, costs to terminate our float-to-fixed interest rate swaps previously designated as a cash flow hedge of $9 million and other costs of $3 million. These charges are included in general, administrative and other expense in the Consolidated Statements of Income for the year ended December 31, 2010.

Other Credit Facilities

In addition to the $250 million revolving credit commitment discussed above, we have credit facilities related to our clearinghouses in order to meet liquidity and regulatory requirements. These credit facilities, which are available in multiple currencies, primarily Swedish Krona and U.S. dollar, totaled $440 million ($196 million in available liquidity and $244 million to satisfy regulatory requirements), none of which was utilized at December 31, 2010. At December 31, 2009, these facilities totaled $417 million ($185 million in available liquidity which can be pledged as collateral and $232 million to satisfy regulatory requirements), none of which was utilized.

Debt Covenants

At December 31, 2010, we were in compliance with the covenants of all of our debt obligations.

Income Taxes

12 Months Ended

Dec. 31, 2010

Income Taxes

Income Taxes

9. Income Taxes

The income tax provision consists of the following amounts:


	Year Ended December 31,
	2010			2009			2008
	(in millions)
Current income taxes:
Federal	$	116		$	96		$	220
State		36			32			49
Foreign		20			10			36

Total current income taxes		172			138			305

Deferred income taxes:
Federal		(25	)		(26	)		(61	)
State		(26	)		8			(14	)
Foreign		16			8			(32	)

Total deferred income taxes		(35	)		(10	)		(107	)

Total income tax provision	$	137		$	128		$	198

U.S. federal taxes have not been provided on undistributed earnings of certain non-U.S. subsidiaries to the extent such earnings will be reinvested abroad for an indefinite period of time. At December 31, 2010, the cumulative amount of undistributed earnings in these subsidiaries is approximately $70 million. We have the intent and ability to indefinitely reinvest the undistributed earnings of our non-U.S. subsidiaries.

A reconciliation of the income tax provision, based on the U.S. federal statutory rate, to our actual income tax provision for the years ended December 31, 2010, 2009 and 2008 is as follows:


	Year Ended December 31,
	2010			2009			2008
	(in millions)
Federal income tax provision at the statutory rate		35.0	%		35.0	%		35.0	%
State income tax provision, net of federal effect		4.2	%		6.6	%		4.5	%
Foreign income tax provision at a rate different than the federal rate		(3.2	)%		(3.6	)%		(3.3	)%
Foreign asset impairment loss, not deductible for tax purposes		—			—			1.9	%
Earnings from foreign affiliates, not subject to tax		(3.5	)%		(4.8	)%		—
Nondeductible expenses		0.3	%		2.8	%		0.2	%
Change in deferred taxes due to change in tax rate⁽¹⁾		(3.0	)%		—			—
Excess capital loss carry back⁽¹⁾		(2.4	)%		—			—
Other, net		(1.4	)%		(3.3	)%		0.3	%

Actual income tax provision⁽¹⁾		26.0	%		32.7	%		38.6	%

⁽¹⁾	The lower effective tax rate in 2010 when compared to 2009 was primarily due to the restructuring of certain NASDAQ OMX subsidiaries. These transactions resulted in one-time reductions in deferred tax liabilities due to a revised effective tax rate and a one-time tax deduction for a capital loss.

The temporary differences, which give rise to our deferred tax assets and (liabilities), consisted of the following:


	December 31,
	2010			2009
	(in millions)
Deferred tax assets:
Deferred revenues	$	28		$	31
U.S. federal net operating loss		20			4
Foreign net operating loss		104			129
State net operating loss		1			4
Compensation and benefits		77			68
Investments		—			55
Foreign currency translation		155			253
Lease reserves		8			18
Tax credits		5			5
Excess capital loss		64			—
Other		15			14

Gross deferred tax assets		477			581

Deferred tax liabilities:
Amortization of software development costs and depreciation		(25	)		(24	)
Amortization of acquired intangible assets		(653	)		(644	)
Adoption of ASC 470.20, net of accretion		(19	)		(24	)
Other		(27	)		(14	)

Gross deferred tax liabilities		(724	)		(706	)

Net deferred tax liabilities before valuation allowance		(247	)		(125	)

Less: valuation allowance		(31	)		(52	)

Net deferred tax liabilities	$	(278	)	$	(177	)

A valuation allowance has been established with regards to the tax benefits associated with certain net operating losses, as it is more likely than not that these losses will not be realized in the future.

The U.S. federal net operating loss of $20 million, which includes $14 million related to the acquisition of FTEN in December 2010 and $6 million related to subsidiaries of OMX that are not included in our U.S. federal consolidated income tax return, will expire in years 2022-2030. Of the $104 million foreign net operating loss, $17 million will expire in years 2018-2025 and $87 million has no expiration date. The $1 million state net operating loss will expire in years 2013-2029. The excess capital loss of $64 million will be offset against capital gains realized in 2007.

The following represents the domestic and foreign components of income before income tax provision:


	Year Ended December 31,
	2010		2009		2008
	(in millions)
Domestic	$	393	$	325	$	448
Foreign		133		66		65

Income before income tax provision	$	526	$	391	$	513

In 2010, 2009 and 2008, we recorded income tax benefits of $2 million, $4 million and $5 million, respectively, primarily related to employee stock option exercises. These amounts were recorded as additional paid-in-capital in the Consolidated Balance Sheets.

We are subject to examination by federal, state and local, and foreign tax authorities. We regularly assess the likelihood of additional assessments by each jurisdiction and have established tax reserves that we believe are adequate in relation to the potential for additional assessments. We believe that the resolution of tax matters will not have a material effect on our financial condition but may be material to our operating results for a particular period and upon the effective tax rate for that period.

As of December 31, 2010, we had $12 million of unrecognized benefits, of which $8 million would affect our effective tax rate if recognized. As of December 31, 2009, we had $11 million of unrecognized benefits, of which $6 million would affect our effective tax rate if recognized.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	Year Ended December 31,
	2010			2009
	(in millions)
Beginning balance	$	11		$	9
Additions as a result of tax positions taken in prior periods		1			1
Additions as a result of tax positions taken in the current period		2			3
Reductions due to the settlement from tax authorities		(2	)		(2	)

Ending balance	$	12		$	11

Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2010, we had accrued $4 million for interest and penalties, net of tax effect. As of December 31, 2009, we had accrued $2 million for interest and penalties, net of tax effect.

NASDAQ OMX and its eligible subsidiaries file a consolidated U.S. federal income tax return and applicable state and local income tax returns and non-U.S. income tax returns. Federal income tax returns for the years 2007 through 2009 are subject to examination by the Internal Revenue Service. Several state tax returns are currently under examination by the respective tax authorities for the years 2000 through 2008 and we are subject to examination for 2009. Non-U.S. tax returns are subject to review by the respective tax authorities for the years 2003 through 2009. In August 2010, we paid the state of California $2 million with respect to audits for the years 1996 through 1998 and the years 2000 through 2006. Since this amount was included in our unrecognized tax benefits as of December 31, 2009, such payment does not affect our 2010 effective tax rate. The outcome of these audits did not have a material impact on our financial position or results of operations. We anticipate that the amount of unrecognized tax benefits at December 31, 2010 will significantly decrease in the next twelve months as we expect to settle certain tax audits. The final outcome of such audits cannot yet be determined. We anticipate that such adjustments will not have a material impact on our consolidated financial position or results of operations.

In the fourth quarter of 2010, we received an appeal from the Finnish Tax Authority in which such authority challenges certain interest expense deductions claimed by NASDAQ OMX in Finland for the years 2009 and 2008. NASDAQ OMX's tax return position with respect to this deduction was previously reviewed and approved by the Finnish Tax Authority. The appeal also demands certain penalties be paid with regards to such tax return filing position. If the Finnish Tax Authority prevails in their challenge, additional tax and penalties for such years would total approximately $10 million. We expect the Finnish Tax Authority to agree with our position once its review is completed and, as such, it is unlikely NASDSAQ OMX will be assessed any additional tax and penalties. Through December 31, 2010, we have recorded the tax benefits associated with such filing position.

In June 2009, NASDAQ OMX filed an application for an advance tax ruling with the Swedish Tax Council for Advance Tax Rulings. The application was filed to confirm whether certain interest expense is deductible for Swedish tax purposes under legislation that became effective on January 1, 2009. In June 2010, we received a favorable response from the Swedish Tax Council for Advance Tax Rulings in which all members of the Council agreed that such interest expense is deductible for Swedish tax purposes. The Swedish Tax Agency has recently appealed such ruling to the Swedish Supreme Administrative Court. We expect the Swedish Supreme Administrative Court to agree with the ruling from the Swedish Tax Council for Advance Tax Rulings. For the year ended December 31, 2010, we recorded a tax benefit of $18 million, or $0.09 per diluted share, related to this matter. Since January 1, 2009, we have recorded a tax benefit of $37 million, or $0.18 per diluted share, related to this matter.

Employee Benefits

12 Months Ended

Dec. 31, 2010

Employee Benefits

Employee Benefits

10. Employee Benefits

U.S. Defined-Benefit Pension and Supplemental Executive Retirement Plans

We maintain non-contributory, defined-benefit pension plans, non-qualified supplemental executive retirement plans, or SERPs, for certain senior executives and post-retirement benefit plans for eligible employees in the U.S., collectively referred to as the NASDAQ OMX Benefit Plans.

Our pension plans and SERPs are frozen. Future service and salary for all participants do not count toward an accrual of benefits under the pension plans and SERPs.

Components of Net Periodic Benefit Cost

The following table sets forth the components of net periodic pension, SERP and post-retirement benefits costs from the NASDAQ OMX Benefit Plans recognized in compensation and benefits expense in the Consolidated Statements of Income:


	Year Ended December 31,
	2010			2009			2008⁽¹⁾
	(in millions)
Components of net periodic benefit cost
Service cost	$	—		$	—		$	1
Interest cost		7			7			4
Expected return on plan assets		(5	)		(4	)		(3	)
Recognized net actuarial (gain) loss		3			(2	)		—
Settlement loss recognized		1			1			—
Curtailment gain		—			—			(1	)

Benefit cost (gain)	$	6		$	2		$	1

⁽¹⁾	The NASDAQ OMX PHLX benefit costs are from the date of acquisition.

Benefit Obligations and Funded Status

The following table provides a reconciliation of the changes in the benefit obligation, the plan assets and the funded status of the NASDAQ OMX Benefit Plans.


	2010												2009
	Pension			SERP			Post- retirement			Total			Pension			SERP			Post- retirement			Total
	(in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	77		$	29		$	9		$	115		$	61		$	29		$	10		$	100
Interest cost		4			2			1			7			4			2			1			7
Actuarial losses (gains)		—			—			1			1			1			(3	)		(3	)		(5	)
Benefits paid		(2	)		(2	)		—			(4	)		(1	)		(2	)		—			(3	)
Settlements		(3	)		—			—			(3	)		(3	)		—			—			(3	)
Loss due to change in discount rate		7			1			1			9			15			3			1			19

Benefit obligation at end of year		83			30			12			125			77			29			9			115

Change in plan assets
Fair value of plan assets at beginning of year		58			—			—			58			43			—			—			43
Actual return on plan assets		4			—			—			4			10			—			—			10
Company contributions		5			2			—			7			9			2			—			11
Benefits paid		(2	)		(2	)		—			(4	)		(1	)		(2	)		—			(3	)
Settlements		(3	)		—			—			(3	)		(3	)		—			—			(3	)

Fair value of plan assets at end of year		62			—			—			62			58			—			—			58

Underfunded status of the plans		(21	)		(30	)		(12	)		(63	)		(19	)		(29	)		(9	)		(57	)
Accumulated benefit obligation	$	83		$	30		$	12		$	125		$	77		$	29		$	9		$	115

The total underfunded status of the NASDAQ OMX Benefit Plans of $63 million at December 31, 2010 and $57 million at December 31, 2009 is included in other liabilities and accrued personnel costs in the Consolidated Balance Sheets. No plan assets are expected to be returned to us during the year ending December 31, 2011.

Actuarial Assumptions

The following tables provide the weighted-average actuarial assumptions for the NASDAQ OMX Benefit Plans.

Weighted-average assumptions used to determine benefit obligations at the end of the fiscal year:


	2010			2009
Discount rate:
Pension		5.25	%		5.75	%
SERP		5.25	%		5.75	%
Post-retirement		5.25	%		5.75	%
Rate of compensation increase:
Pension		N/A			N/A
SERP		N/A			N/A
Post-retirement		N/A			N/A

Weighted-average assumptions used to determine net benefit cost for the fiscal year:


	2010			2009			2008
Discount rate:
Pension		5.75	%		7.00	%		6.10	%
SERP		5.75	%		7.00	%		6.10	%
Post-retirement		5.75	%		7.00	%		6.00	%

Rate of compensation increase:
Pension		N/A			N/A			N/A
SERP		N/A			N/A			N/A
Post-retirement		N/A			N/A			N/A

Expected return on plan assets:
Pension		8.00	%		8.00	%		8.40	%
SERP		N/A			N/A			N/A
Post-retirement		N/A			N/A			N/A

N/A—Not applicable

The assumptions above are used to develop the benefit obligations at fiscal year-end and to develop the net periodic benefit cost for the subsequent fiscal year. Therefore, the assumptions used to determine benefit obligations were established at each year-end while the assumptions used to determine net periodic benefit cost for each year are established at the end of each previous year.

The net periodic benefit obligations and the net periodic benefit cost are based on actuarial assumptions that are reviewed on an annual basis. We revise these assumptions based on an annual evaluation of long-term trends, as well as market conditions, which may have an impact on the cost of providing retirement benefits.

For 2011, the weighted-average assumed healthcare cost trend rate used for post-retirement measurement purposes for the NASDAQ OMX Benefit Plans is 10% prior to age 65 and 5.5% to 10% after age 65. A one percent increase or decrease in the assumed healthcare cost trend would have an immaterial effect on the post-retirement service and interest cost and post-retirement benefit obligation for both plans.

Plan Assets of the NASDAQ OMX Benefit Plans

NASDAQ OMX's Pension and 401(k) Committee has oversight responsibility for the plan assets of the NASDAQ OMX Benefit Plans. The investment policy and strategy of the plan assets, which was adopted by NASDAQ OMX's Pension and 401(k) Committee, is to provide for preservation of principal, both in nominal and real terms, in order to meet the long-term spending needs of the NASDAQ OMX Benefit Plans. We invest in securities per the target allocations stated below. Target allocations for plan assets as of December 31, 2010 were as follows:


	Target Allocation
Mutual funds⁽¹⁾		75	%
U.S. equity securities		10	%
Other investment strategies and cash		15	%

Total		100	%

⁽¹⁾	Securities are held in a broad array of asset classes.

Asset allocations are reviewed quarterly and adjusted, as appropriate, to remain within target allocations. The investment policy is reviewed on an annual basis, under the advisement of an investment consultant, to determine if the policy or asset allocation targets should be changed.

The fair value of the plan assets for the NASDAQ OMX Benefit Plans at December 31, 2010, by asset category and fair value hierarchy, are as follows:


	Total Benefit Plan Assets as of December 31, 2010		Fair Value Measurements⁽¹⁾
	Total Benefit Plan Assets as of December 31, 2010		(Level 1)		(Level 2)		(Level 3)
			(in millions)
Mutual funds⁽ ² ⁾	$	47	$	47	$	—	$	—
U.S. equity securities		6		6		—		—
Other investment strategies and cash⁽³⁾		9		3		6		—

Total benefit plan assets	$	62	$	56	$	6	$	—

⁽¹⁾	See Note 14, "Fair Value of Financial Instruments," for further discussion of fair value measurements.

⁽²⁾	Securities are held in various classes of domestic, international and emerging market equity and fixed-income securities.

⁽³⁾	Includes cash and multi-strategy hedge funds. Securities held in multi-strategy hedge funds are held in multiple asset classes and include investments in equity and fixed-income securities, arbitrage investments, and futures.

The expected rate of return on plan assets for the NASDAQ OMX Benefit Plans represents our long-term assessment of return expectations which may change based on significant shifts in economic and financial market conditions. The long-term rate of return on plan assets is derived from return assumptions determined based on asset classes held and weighted based on the current target allocation for each class. Over the long-term, our investments in bond mutual funds are expected to return between 1% and 6%, investments in equity mutual funds are expected to return between 4% and 10%, investments in U.S. equity securities are expected to return between 5% to 10% and other investment strategies are anticipated to yield between 6% and 7%. While we considered the NASDAQ OMX Benefit Plans recent performance and other economic growth and inflation factors, which are supported by long-term historical data, the return expectations for each of these asset categories represents a long-term prospective return. Based on historical experience, the committee expects that the plans' asset managers overall will provide a modest (1% per annum) premium to their respective market benchmark indexes.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss), as of December 31, 2010, consisted of the following amounts that have yet to be recognized in net periodic benefit costs for the NASDAQ OMX Benefit Plans:


	Pension			SERP			Post- retirement		Total
	(in millions)
Unrecognized net actuarial gain/(loss)	$	(27	)	$	(4	)	$	—	$	(31	)
Income tax (expense)/benefit		11			2			—		13

Employee benefit plan adjustments, net of tax	$	(16	)	$	(2	)	$	—	$	(18	)

Estimated Future Benefit Payments

We expect to make the following benefit payments to participants in the next ten fiscal years for the NASDAQ OMX Benefit Plans:


	Pension		SERP		Post- retirement		Total
	(in millions)
Fiscal year ended:
2011	$	4	$	2	$	1	$	7
2012		3		2		—		5
2013		3		10		1		14
2014		3		2		1		6
2015		3		3		1		7
2016 through 2020		23		9		3		35

	$	39	$	28	$	7	$	74

Non—U.S. Benefit Plans

Most employees outside the U.S. are covered by local retirement plans or by applicable social laws. Benefits under social laws are generally expensed in the periods in which the costs are incurred. These costs are included in compensation and benefits expense in the Consolidated Statements of Income and were $13 million in 2010, $14 million in 2009 and $16 million in 2008.

In 2008, as part of the acquisition of Nord Pool's derivatives clearing, and consulting subsidiaries, we assumed the obligation for several pension plans providing benefits for their employees. Employees covered under these pension plans are entitled to defined future pension benefits based on the number of years of employment and pay at retirement age. The measurement date of the plan obligations is December 31. The projected benefit obligation was $14 million at December 31, 2010 and $10 million at December 31, 2009. The fair value of the plan assets was $6 million at December 31, 2010 and $5 million at December 31, 2009. The underfunded status of the plans was $8 million at December 31, 2010 and $5 million at December 31, 2009 and was included in other liabilities in the Consolidated Balance Sheets. The benefit cost for these plans was $1 million in 2010, $3 million in 2009 and immaterial in 2008.

Defined Contribution Savings Plan

We sponsor a voluntary defined contribution savings plan, or 401(k) Plan, for U.S. employees. Employees are immediately eligible to make contributions to the plan and are also eligible for an employer contribution match at an amount equal to 100.0% of the first 4.0% of eligible employee contributions. Savings plan expense included in compensation and benefits expense in the Consolidated Statements of Income was $4 million in 2010, 2009 and 2008.

We have a profit-sharing contribution feature to our 401(k) plan which allows eligible U.S. employees to receive employer retirement contributions, or ERCs, when we meet our annual corporate goals. In addition, we have a supplemental ERC for select highly compensated employees whose ERCs are limited by the annual Internal Revenue Service compensation limit. ERC expense recorded in compensation and benefits expense in the Consolidated Statements of Income was $4 million in 2010, 2009 and 2008.

Employee Stock Purchase Plan

We have an ESPP under which approximately 3.9 million shares of our common stock have been reserved for future issuance as of December 31, 2010.

Our ESPP allows eligible U.S. and non-U.S. employees to purchase a limited number of shares of our common stock at six-month intervals, called offering periods, at 85.0% of the lower of the fair market value on the first or the last day of each offering period. The 15.0% discount given to our employees is included in compensation and benefits expense in the Consolidated Statements of Income.

Under our ESPP, employees may purchase shares having a value not exceeding 10.0% of their annual compensation, subject to applicable annual Internal Revenue Service limitations. During 2010, employees purchased 242,865 shares at a weighted-average price of $15.08, during 2009, employees purchased 201,559 shares at a weighted-average price of $17.68 and during 2008, employees purchased 112,852 shares at a weighted-average price of $22.01 under the ESPP. We recorded compensation expense of $0.8 million for the year ended December 31, 2010, $0.6 million for the year ended December 31, 2009 and $0.4 million for the year ended December 31, 2008 for the 15.0% discount that is given to our employees.

- Definition

Description containing the entire pension and other postretirement benefits disclosure as a single block of text.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 158

-Paragraph 7, 21, 22

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5, 6, 7, 8

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-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 8

-Subparagraph m

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-Name Statement of Financial Accounting Standard (FAS)

-Number 106

-Paragraph 518

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 87

-Paragraph 264

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-Number 132R

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-Number 132R

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-Number 132R

-Paragraph 5

-Subparagraph q

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name FASB Staff Position (FSP)

-Number FAS106-2

-Paragraph 20, 21, 22

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Emerging Issues Task Force (EITF)

-Number 03-2

-Paragraph 8

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Accounting Principles Board Opinion (APB)

-Number 30

-Paragraph 26

Reference 13: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Implementation Guide (Q and A)

-Number FAS88

-Paragraph 63

+ Details

Share-Based Compensation

12 Months Ended

Dec. 31, 2010

Share-Based Compensation

Share-Based Compensation

11. Share-Based Compensation

We have a share-based compensation program that provides our board of directors broad discretion in creating employee equity incentives. Share-based awards, or equity awards, include employee stock options, restricted stock (which includes awards and units) and PSUs. Grants of equity awards are designed to reward employees for their long-term contributions and provide incentives for them to remain with us. For accounting purposes, we consider PSUs to be a form of restricted stock. Restricted stock is generally time-based and vests over two to five-year periods beginning on the date of the grant. Stock options are also generally time-based and expire ten years from the grant date. Stock option awards granted prior to January 1, 2005 generally vested 33% on each annual anniversary of the grant date over three years. Stock option and restricted stock awards granted after January 1, 2005 generally include performance-based accelerated vesting features based on achievement of specific levels of corporate performance. If NASDAQ OMX exceeds the applicable performance parameters, the grants vest on the third anniversary of the grant date, if NASDAQ OMX meets the applicable performance parameters, the grants vest on the fourth anniversary of the grant date, and if NASDAQ OMX does not meet the applicable performance parameters, the grants vest on the fifth anniversary of the grant date.

PSUs are based on performance measures that impact the amount of shares that each recipient will receive upon vesting. PSUs are granted at the fair market value of our stock on the grant date and compensation cost is recognized over the performance period and, in certain cases, an additional vesting period. For each grant of PSUs, an employee may receive from 0% to 150% of the target amount granted, depending on the achievement of performance measures. We report the target number of PSUs granted, unless we have determined that it is more likely than not, based on the actual achievement of performance measures, that an employee will receive a different amount of shares underlying the PSUs, in which case we report the amount of shares the employee is likely to receive.

Stock Option Exchange Program

In May 2010, NASDAQ OMX shareholders approved a proposal to allow for a one-time voluntary stock option exchange program, designed to provide eligible employees an opportunity to exchange some or all of their eligible underwater stock options for a lesser amount of replacement stock options to be granted with a lower exercise price and a longer vesting period. Participants in the program were entitled to receive one replacement option for each 1.4 eligible options exchanged. Stock options eligible for the exchange were granted on or after January 1, 2006 and on or before June 30, 2008 with an exercise price greater than $30.00. The program commenced on July 7, 2010 and expired on August 3, 2010. A total of 0.8 million eligible stock options were tendered by employees, representing 90% of the total stock options eligible for exchange. On August 3, 2010, we granted 0.6 million new replacement stock options with an exercise price of $20.04, which was equal to the closing price of our common stock on that date. The replacement options are subject to a new vesting schedule and will vest in three equal annual installments on August 3, 2011, August 3, 2012 and August 3, 2013 and have a term of seven years. No incremental stock option expense was recognized for the replacement options as the fair value of the replacement options did not exceed the fair value of the exchanged options.

Summary of 2010 Equity Awards

In March 2010, we granted non-qualified stock options and/or restricted stock to most active employees. Both the stock options and restricted stock granted included a performance-based accelerated vesting feature based on achievement of specific levels of corporate performance, as described above. In 2010, we achieved the applicable performance parameters, and therefore, we will continue to expense the grant over the four-year vesting period.

In 2010, certain executive officers received grants of 629,743 PSUs. Of these PSUs granted, 80,000 units are subject to a three year performance period and vest at the end of the period. The remaining 549,743 units are subject to a one year performance period and generally will vest ratably on an annual basis on December 31, 2011 through December 31, 2013. During 2010, certain grants exceeded the applicable performance parameters for the one year performance PSUs. As a result, an additional 19,142 units were considered granted in February 2011.

See "Summary of Stock Option Activity" and "Summary of Restricted Stock and PSU Activity" below for further discussion.

Summary of 2009 Equity Awards

In 2009, certain executive officers received grants of 105,641 PSUs. Of these PSUs granted, 80,000 units are subject to a three year performance period and vest at the end of the period. The remaining 25,641 units were subject to a one year performance period and will vest ratably on an annual basis on December 31, 2010 through December 31, 2012. During 2009, we exceeded the applicable performance parameters for the one year performance PSUs. As a result, an additional 12,308 units were considered granted in February 2010.

Also in 2009, certain executive officers received grants of 972,319 non-qualified stock options that expire ten years from the grant date. Of these options granted, 900,000 will vest 50% on December 31, 2011 and 50% on December 31, 2012 and are not subject to any performance measures. The remaining 72,319 options granted will vest 100% on the fourth anniversary of the grant date and include a performance based accelerated vesting feature based on us achieving specific levels of performance, as described above. In 2009, we achieved the applicable performance parameters, and therefore, we will continue to expense the grant over the four-year vesting period.

Additionally, certain executive officers received grants of restricted stock of 725,000 in 2009. Of these grants, 675,000 will vest 30% on the second anniversary of the grant date and 70% on the third anniversary of the grant date. The remaining 50,000 grants of restricted stock will vest on March 31, 2012.

Summary of 2008 Equity Awards

In December 2008, we granted non-qualified stock options and/or restricted stock to most active employees. Both the stock options and restricted stock granted included a performance based accelerated vesting feature based on us achieving specific levels of performance, as described above. In 2009, we achieved the applicable performance parameters, and therefore, we will continue to expense the grant over the four-year vesting period.

In December 2008, certain executive officers and a select group of non-officer employees also received grants of 244,034 PSUs. These PSUs were subject to a one year performance period and will vest three years after the end of the performance period. During 2009, we exceeded the applicable performance parameters and as a result, an additional 72,277 units were considered granted in February 2010.

Also in 2008, certain executive officers received grants of 120,896 PSUs. Of these PSUs granted, 80,000 units are subject to a three year performance period and vest at the end of the period. The remaining 40,896 units were subject to a one year performance period and vest three years after the end of the performance period. During 2008, we exceeded the applicable performance parameters for the one year performance PSUs and determined that it would be more likely than not that the target performance levels will be exceeded for the three year performance PSUs. As a result, an additional 60,449 units were considered granted. However, in February 2011, it was determined that we did not exceed the applicable performance parameters for the three year performance PSUs and therefore only 53,333 PSUs were considered granted and ultimately vested.

Common Shares Available Under Our Equity Incentive Plan

As of December 31, 2010, we had approximately 8.4 million shares of common stock authorized for future issuance under our equity incentive plan.

Summary of Share-Based Compensation Expense

The following table shows the total share-based compensation expense resulting from equity awards and the 15.0% discount for the ESPP for the years ended December 31, 2010, 2009 and 2008 in the Consolidated Statements of Income:


	Year Ended December 31,
	2010			2009			2008
	(in millions)
Share-based compensation expense before income taxes	$	33		$	35		$	26
Income tax benefit		(13	)		(14	)		(10	)

Total share-based compensation expense after income taxes	$	20		$	21		$	16

We estimated the fair value of stock option awards using the Black-Scholes valuation model with the following weighted-average assumptions:


	Year Ended December 31,
	2010			2009			2008
Expected life (in years)		5			5			5
Weighted-average risk free interest rate		2.03	%		2.52	%		1.63	%
Expected volatility		32.0	%		36.0	%		35.5	%
Dividend yield		—			—			—
Weighted-average fair value at grant date	$	6.30		$	7.40		$	9.17

Our computation of expected life is based on historical exercise patterns. The interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. Our computation of expected volatility is based on a combination of historical and market-based implied volatility. Our credit facilities limit our ability to pay dividends. Before our credit facilities were in place, it was not our policy to declare or pay cash dividends on our common stock.

Summary of Stock Option Activity

A summary of stock option activity for the years ended December 31, 2010, 2009 and 2008 is as follows:


	Stock Options Outstanding
	Number Outstanding			Weighted- Average Exercise Price Per Share
Outstanding at January 1, 2008		9,998,114		$	16.25
Grants		1,686,839			27.48
Exercises		(712,860	)		8.96
Forfeitures or expirations		(245,188	)		31.43

Outstanding at December 31, 2008		10,726,905		$	18.08
Grants		1,018,155			21.13
Exercises		(814,575	)		7.93
Forfeitures or expirations		(723,614	)		32.32

Outstanding at December 31, 2009		10,206,871		$	18.18
Grants⁽ ¹ ⁾		1,855,979			19.87
Exercises		(708,731	)		9.23
Forfeitures or expirations		(395,148	)		29.87
Stock option exchange program⁽ ² ⁾		(846,129	)		38.96

Outstanding at December 31, 2010		10,112,842		$	16.92

⁽¹⁾

Primarily reflects our company wide equity grant issued in March 2010, which included a performance-based accelerated vesting feature based on achievement of specific levels of corporate performance, as described above, and issuance of replacement stock options resulting from our stock option exchange program. See "Stock Option Exchange Program" above for further discussion.

⁽²⁾	Represents stock options tendered in our stock option exchange program. See "Stock Option Exchange Program" above for further discussion.

We received net cash proceeds of $7 million from the exercise of approximately 0.7 million stock options for the year ended December 31, 2010, received net cash proceeds of $6 million from the exercise of approximately 0.8 million stock options for the year ended December 31, 2009, and received net cash proceeds of $7 million from the exercise of approximately 0.7 million stock options for the year ended December 31, 2008. We present excess tax benefits from the exercise of stock options, if any, as financing cash flows.

The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2010:


Range of Exercise Prices	Number Outstanding		Weighted- Average Remaining Contractual Life- Outstanding (in years)		Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value (in millions)		Number Exercisable		Weighted- Average Remaining Contractual Life- Exercisable (in years)		Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value (in millions)
$ 5.28 - $ 7.34		1,911,250		2.3	$	5.92	$	34		1,911,250		2.3	$	5.92	$	34
$ 7.35 - $ 8.34		1,758,869		4.1	$	7.36		29		1,758,869		4.1	$	7.36		29
$ 8.35 - $10.24		910,306		3.1	$	8.84		13		910,240		3.1	$	8.84		13
$10.25 - $14.49		249,918		0.7	$	13.00		3		249,918		0.7	$	13.00		3
$14.50 - $19.69		125,834		8.4	$	19.12		1		17,448		5.3	$	17.80		—
$19.70 - $25.01		2,744,005		9.0	$	20.38		9		67,263		3.6	$	20.84		—
$25.02 - $30.09		1,022,494		8.0	$	25.22		—		62,080		6.5	$	26.88		—
$30.10 - $35.91		12,561		6.3	$	31.74		—		9,781		6.1	$	31.64		—
$35.92 - $38.99		1,185,178		6.1	$	35.93		—		945,178		6.1	$	35.94		—
$39.00 - $42.28		55,556		6.5	$	40.83		—		23,294		5.3	$	41.40		—
$42.29 - $48.81		136,871		7.1	$	45.38		—		136,806		7.1	$	45.38		—

Total		10,112,842		5.7	$	16.92	$	89		6,092,127		3.7	$	13.19	$	79

The aggregate intrinsic value in the above table represents the total pre-tax intrinsic value (i.e., the difference between our closing stock price on December 31, 2010 of $23.73 and the exercise price, times the number of shares) based on stock options with an exercise price less than NASDAQ OMX's closing price of $23.73 as of December 31, 2010, which would have been received by the option holders had the option holders exercised their stock options on that date. This amount changes based on the fair market value of our common stock. The total number of in-the-money stock options exercisable as of December 31, 2010 was 4.9 million. As of December 31, 2009, 6.8 million outstanding stock options were exercisable and the weighted-average exercise price was $12.56.

Total fair value of stock options vested was $5 million for the year ended December 31, 2010 and $12 million for the year ended December 31, 2009. The total pre-tax intrinsic value of stock options exercised was $8 million during 2010, $10 million during 2009 and $16 million during 2008.

At December 31, 2010, $14 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.7 years.

Summary of Restricted Stock and PSU Activity

The following table summarizes our restricted stock and PSU activity for the years ended December 31, 2010, 2009 and 2008:


	Restricted Stock			Weighted Average Grant Date Fair Value		PSUs			Weighted Average Grant Date Fair Value
Unvested balances at January 1, 2008		994,723		$	37.23		181,152		$	37.31
Granted		1,158,875			27.36		455,955	⁽¹⁾		32.60
Vested		(164,507	)		23.75		—			—
Forfeited		(104,619	)		38.70		(5,139	)		41.36

Unvested balances at December 31, 2008		1,884,472		$	32.23		631,968		$	33.87
Granted		861,919			20.79		105,641			22.77
Vested		(260,721	)		34.27		—			—
Forfeited		(276,922	)		32.53		(184,927	)		34.37

Unvested balances at December 31, 2009		2,208,748		$	27.48		552,682		$	31.59
Granted⁽ ² ⁾		1,223,921			19.80		714,328			20.31
Vested		(459,759	)		39.89		(120,000	)		33.19
Forfeited		(213,819	)		26.87		(48,381	)		27.79

Unvested balances at December 31, 2010		2,759,091		$	22.00		1,098,629		$	24.25

⁽¹⁾	This amount includes 91,025 additional PSUs for which we determined that performance measures will more likely than not be achieved.

⁽²⁾	Restricted stock grants in 2010 primarily reflect our company wide grant issued in March 2010, which included a performance- based accelerated vesting feature based on achievement of specific levels of corporate performance, as described above.

At December 31, 2010, $38 million of total unrecognized compensation cost related to restricted stock and PSUs is expected to be recognized over a weighted-average period of 1.7 years.

NASDAQ OMX Stockholders' Equity

12 Months Ended

Dec. 31, 2010

NASDAQ OMX Stockholders' Equity

NASDAQ OMX Stockholders' Equity

12. NASDAQ OMX Stockholders' Equity

Common Stock

At December 31, 2010, 300,000,000 shares of our common stock were authorized, 213,370,086 shares were issued and 175,782,683 shares were outstanding. The holders of common stock are entitled to one vote per share, except that our certificate of incorporation limits the ability of any person to vote in excess of 5.0% of the then-outstanding shares of NASDAQ OMX common stock. This limitation does not apply to persons exempted from this limitation by our board of directors prior to the time such person owns more than 5.0% of the then-outstanding shares of NASDAQ OMX common stock.

In 2008, we issued 60,561,515 shares of common stock to Borse Dubai and a trust for Borse Dubai's economic benefit in connection with the OMX AB business combination. In December 2010, we purchased 22,781,000 shares of our stock from Borse Dubai. See "Share Repurchase from Borse Dubai" below for further discussion. In addition, Borse Dubai agreed to sell in a private transaction 8,000,000 shares of our stock to Nomura International plc. Nomura International plc agreed, under a forward sale agreement, to sell these 8,000,000 shares to Investor AB. As a result of the settlement of this forward sale agreement, Investor AB's ownership in NASDAQ OMX increased to 17,004,142 shares. As of December 31, 2010, Borse Dubai and a trust for Borse Dubai's economic benefit held 29,780,515 shares of our common stock. In addition, as of December 31, 2010, SLP held 10,539,614 shares of our common stock, and subsequently sold these shares in February 2011. Investor AB purchased 1,000,000 of the shares sold by SLP and currently owns 18,004,142 shares of our common stock.

Common Stock in Treasury, at Cost

We account for the purchase of treasury stock under the cost method with the shares of stock repurchased reflected as a reduction to NASDAQ OMX stockholders' equity and included in common stock in treasury, at cost in the Consolidated Balance Sheets. When treasury shares are reissued, they are recorded at the average cost of the treasury shares acquired. As of December 31, 2010, we held 37,587,403 shares of common stock in treasury and held 327,722 shares as of December 31, 2009. The increase during the year ended December 31, 2010 was primarily due to our share repurchase program. See "Share Repurchase Program" below for further discussion.

Share Repurchase from Borse Dubai

In December 2010, we purchased 22,781,000 shares of common stock from Borse Dubai for $21.82 per share for an aggregate purchase price of approximately $497 million. We entered into a $400 million senior unsecured bridge facility, of which proceeds of $370 million were utilized to partially finance the purchase of common stock from Borse Dubai. See "Bridge Facility," of Note 8, "Debt Obligations," for further discussion. This transaction expanded, accelerated and completed the purchase of our shares pursuant to our previously announced share repurchase program. See "Share Repurchase Program" below for further discussion of our share repurchase program.

Share Repurchase Program

On March 2, 2010, we announced that our board of directors had approved a share repurchase program authorizing NASDAQ OMX to repurchase in the aggregate up to $300 million of our outstanding common stock. In July 2010, our board of directors authorized a repurchase of up to an additional $100 million of our outstanding common stock under the share repurchase program and in October 2010 authorized a repurchase of up to an additional $150 million shares bringing the total authorized amount to $550 million of our outstanding common stock. Prior to our share repurchase from Borse Dubai, discussed above, we had repurchased 15,050,647 shares of our common stock at an average price of $19.95, with an aggregate purchase price of $300 million. The share repurchase from Borse Dubai expanded, accelerated and completed this share repurchase program. The shares repurchased under the share repurchase program and from Borse Dubai are available for general corporate purposes.

Purchases by NASDAQ OMX under this program were made from time to time at prevailing market prices in open market purchases, privately-negotiated transactions, block purchase techniques or otherwise, as determined by our management. These purchases were funded from existing cash balances. The share repurchase program did not obligate us to acquire any particular amount of common stock. The timing, frequency and amount of repurchase activity depended on a variety of factors, such as levels of cash generation from operations, cash requirements for investments in our businesses, current stock price, market conditions and other factors.

Other Repurchases of Common Stock

For the year ended December 31, 2010, we repurchased 194,655 shares of our common stock in settlement of employee tax withholding obligations due upon the vesting of restricted stock.

Preferred Stock

Our certificate of incorporation authorizes the issuance of 30,000,000 shares of preferred stock, par value $0.01 per share, issuable from time to time in one or more series. At December 31, 2010, 1,600,000 shares of series A convertible preferred stock were issued and none were outstanding. At December 31, 2009, 1,600,000 shares of series A convertible preferred stock were issued and outstanding, and were classified as temporary equity in the Consolidated Balance Sheets.

In 2009, as an inducement for the conversion of our 3.75% convertible notes, we agreed to pay the Holders and certain of their affiliates an aggregate amount of $9 million in cash and to issue to the Holders 1,600,000 shares of our series A convertible preferred stock, with an aggregate initial liquidation preference amount of $16 million. Conversion of the series A convertible preferred stock was contingent upon shareholder approval and did not represent an unconditional obligation to transfer assets. In accordance with U.S. GAAP, if the conversion and subsequent issuance of equity shares is not solely in the control of the issuer and the instrument does not represent an unconditional obligation to transfer assets, permanent equity classification is not permitted. Therefore, we recorded the fair value of the series A convertible preferred stock of $15 million as temporary equity in the Consolidated Balance Sheets as of December 31, 2009. The series A convertible preferred stock was accreted through retained earnings, through the date of shareholder approval, up to the aggregate liquidation preference amount of $16 million.

At our annual shareholders' meeting in May 2010, the shareholders approved the conversion of the series A convertible preferred stock into common stock. The series A convertible preferred stock automatically converted into 845,646 shares of common stock determined by dividing the initial liquidation preference amount of $16 million by $18.92, which represents the average daily volume weighted-average price, or VWAP, of NASDAQ OMX's common stock during the 10 day period immediately preceding the date on which the results of the shareholder vote was calculated. At the time of conversion, the VWAP was subject to a floor price of 80% of the price of NASDAQ OMX's common stock as of the initial issuance date, and a ceiling price of 120% of the price of NASDAQ OMX's common stock as of the initial issuance date. The changes in our series A convertible preferred stock during the year ended December 31, 2010 are as follows:


	Series A Convertible Preferred Stock
	(in millions)
Balance as of December 31, 2009	$	15
Accretion for the year ended December 31, 2010		1
Conversion into common stock		(16	)

Balance as of December 31, 2010	$	—

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss is composed of unrealized holding gains and losses on available-for-sale securities, foreign currency translation adjustments, unrealized gains and losses on derivative financial instruments that qualify as cash flow hedges and employee benefit plan adjustments.

The following table outlines the components of accumulated other comprehensive loss:


	Unrealized Holding Gains(Losses) on Available-For-Sale Securities⁽¹⁾			Foreign Currency Translation Adjustments⁽²⁾			Unrealized Gains(Losses) on Cash Flow Hedges⁽³⁾			Employee Benefit Plan Adjustments⁽⁴⁾			Accumulated Other Comprehensive Loss
Gross balance, December 31, 2009	$	—		$	(638	)	$	(9	)	$	(26	)	$	(673	)
Income taxes		—			253			3			11			267

Net balance, December 31, 2009	$	—		$	(385	)	$	(6	)	$	(15	)	$	(406	)

Gross balance, December 31, 2010	$	(3	)	$	(407	)	$	—		$	(31	)	$	(441	)
Income taxes		1			155			—			13			169

Net balance, December 31, 2010	$	(2	)	$	(252	)	$	—		$	(18	)	$	(272	)

⁽¹⁾	Amount includes cumulative gains and losses on our available-for-sale investment in DFM. See Note 5, "Investments," for further discussion.

⁽²⁾	Amounts include cumulative gains and losses on foreign currency translation adjustments from non-U.S. subsidiaries for which the functional currency is other than the U.S. dollar.

⁽³⁾

Cash flow hedges were entered into to effectively convert a portion of our floating rate debt to a fixed rate basis. We recorded an unrealized pre-tax loss in accumulated other comprehensive loss of $9 million ($6 million after tax) as of December 31, 2009 as a result of the fair value measurement of these swaps. The fair value of these swaps is included in other liabilities in the Consolidated Balance Sheet as of December 31, 2009. In January 2010, in connection with the repayment of our senior secured credit facilities in place as of December 31, 2009, we terminated our interest rate swaps and reclassified into earnings the unrealized loss of $9 million ($6 million after tax) relating to these interest rate swaps. See "Senior Secured Credit Facilities in Place as of December 31, 2009," of Note 8, "Debt Obligations," for further discussion.

⁽⁴⁾	Amounts primarily represent unrecognized net actuarial gains (losses) related to the NASDAQ OMX Benefit Plans.

- Definition

Disclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References+ Details

Earnings Per Common Share

12 Months Ended

Dec. 31, 2010

Earnings Per Common Share

Earnings Per Common Share

13. Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per share:


	Year Ended December 31,
	2010			2009		2008
	(in millions, except share and per share amounts)
Numerator:
Net income attributable to NASDAQ OMX	$	395		$	266	$	314
Accretion on series A convertible preferred stock		(1	)		—		—

Net income for basic earnings per share	$	394		$	266	$	314
Interest impact of 3.75% convertible notes, net of tax		—			2		3

Net income for diluted earnings per share	$	394		$	268	$	317


Denominator:
Weighted-average common shares outstanding for basic earnings per share⁽¹⁾		202,975,623			204,698,277		190,362,605

Weighted-average effect of dilutive securities:
Employee equity awards		3,504,550			3,772,645		5,061,943
3.75% convertible notes assumed converted into common stock		34,482			6,066,985		8,281,167
Warrants		—			—		809,147

Denominator for diluted earnings per share		206,514,655			214,537,907		204,514,862


Basic and diluted earnings per share:
Basic earnings per share	$	1.94		$	1.30	$	1.65

Diluted earnings per share	$	1.91		$	1.25	$	1.55

⁽¹⁾	For the year ended December 31, 2008, amounts include 60,561,515 shares of common stock issued to Borse Dubai and a trust for Borse Dubai's economic benefit in conjunction with the business combination with OMX AB on a weighted-average basis from the closing date of the business combination.

For the year ended December 31, 2010, the weighted-average common shares outstanding for basic earnings per share include the weighted-average impact of our share repurchase program and our share repurchase from Borse Dubai. For the year ended December 31, 2010, we repurchased 15,050,647 shares of our common stock through our share repurchase program and 22,781,000 shares of our common stock through the share repurchase from Borse Dubai. In addition, for the year ended December 31, 2010, the weighted-average common shares outstanding for basic earnings per share include the weighted-average impact of 845,646 shares of our common stock that were issued in connection with the conversion of our series A convertible preferred stock in the second quarter of 2010. See "Share Repurchase from Borse Dubai," "Share Repurchase Program," and "Preferred Stock," of Note 12, "NASDAQ OMX Stockholders' Equity," for further discussion.

Stock options to purchase 10,112,842 shares of common stock, 3,857,720 shares of restricted stock and PSUs, and convertible notes convertible into 34,482 shares of common stock were outstanding at December 31, 2010. For the year ended December 31, 2010, we included 4,873,543 of the outstanding stock options and 1,086,998 shares of restricted stock and PSUs in the computation of diluted earnings per share, on a weighted-average basis, as their inclusion was dilutive. The remaining stock options and shares of restricted stock and PSUs are antidilutive, and as such, they were properly excluded.

In September 2009, most of the holders of our outstanding 3.75% convertible notes converted their remaining outstanding notes into common stock in accordance with the terms of the notes, which resulted in the issuance of an aggregate of 8,246,680 shares of our common stock. The 3.75% convertible notes were accounted for under the if-converted method, as we settled the convertible notes in shares of our common stock. For the year ended December 31, 2010, all of the shares underlying the outstanding 3.75% convertible notes were included in the computation of diluted earnings per share, on a weighted-average basis, as their inclusion was dilutive.

The 2.50% convertible senior notes are accounted for under the treasury stock method as it is our intent and policy to settle the principal amount of the notes in cash. Based on the settlement structure of the 2.50% convertible senior notes, which permits the principal amount to be settled in cash and the conversion premium to be settled in shares of our common stock or cash, we will reflect the impact of the convertible spread portion of the convertible notes in the diluted calculation using the treasury stock method. For the years ended December 31, 2010 and 2009, the conversion spread of our 2.50% convertible senior notes was out of the money, and as such, they were properly excluded from the computation of diluted earnings per share.

Stock options to purchase 10,206,871 shares of common stock, 2,761,430 shares of restricted stock and PSUs, and convertible notes convertible into 34,482 shares of common stock were outstanding at December 31, 2009. For the year ended December 31, 2009, we included 5,601,324 of the outstanding stock options and 1,134,138 shares of restricted stock and PSUs in the computation of diluted earnings per share, on a weighted-average basis, as their inclusion was dilutive. The remaining stock options and shares of restricted stock and PSUs are antidilutive, and as such, they were properly excluded.

Stock options to purchase 10,726,905 shares of common stock and 2,516,440 shares of restricted stock and PSUs, and convertible notes convertible into 8,281,162 shares of common stock were outstanding at December 31, 2008. For the year ended December 31, 2008, we included 6,654,784 of the stock options outstanding, 2,000,424 shares of restricted stock and PSUs, all of the shares underlying the 3.75% convertible notes, which includes all outstanding 3.75% convertible notes and 3.75% convertible notes converted into 2,000 shares of common stock during 2008 and warrants exercised into 1,539,489 shares of common stock, up to the time of exercise in the computation of diluted earnings per share, on a weighted-average basis, as their inclusion was dilutive. The remaining stock options and shares of restricted stock and PSUs are antidilutive and the conversion spread of our 2.50% convertible senior notes was out of the money, and as such, they were properly excluded.

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2010

Fair Value of Financial Instruments

Fair Value of Financial Instruments

14. Fair Value of Financial Instruments

Fair Value Measurement—Definition and Hierarchy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants at the measurement date. Fair value measurement establishes a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect NASDAQ OMX's market assumptions. These two types of inputs create the following fair value hierarchy:

•

Level 1—Quoted prices for identical instruments in active markets.

•

Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

•

Level 3—Instruments whose significant value drivers are unobservable.

This hierarchy requires the use of observable market data when available.

The following table presents for each of the above hierarchy levels, our financial assets and liabilities that are measured at fair value on a recurring basis at December 31, 2010.


	Balance as of December 31, 2010		Fair Value Measurements
			(Level 1)		(Level 2)		(Level 3)
			(in millions)
Financial Assets Measured at Fair Value on a Recurring Basis
Derivative positions, at fair value⁽¹⁾	$	4,037	$	—	$	4,037	$	—
Financial investments, at fair value⁽²⁾		253		253		—		—

Total	$	4,290	$	253	$	4,037	$	—

Financial Liabilities Measured at Fair Value on a Recurring Basis
Derivative positions, at fair value⁽¹⁾	$	4,037	$	—	$	4,037	$	—

Total	$	4,037	$	—	$	4,037	$	—

⁽¹⁾

Represents net amounts associated with our clearing operations in the derivative markets of NASDAQ OMX Commodities and NASDAQ OMX Stockholm. Receivables and payables attributable to outstanding derivative positions have been netted to the extent that such a legal offset right exists and, at the same time, if it is our intention to settle these items. See "Derivative Positions, at Fair Value" below for further discussion.

⁽²⁾

Primarily comprised of Swedish government debt securities of $220 million. These securities are classified as trading securities and $190 million are restricted assets to meet regulatory capital requirements for NASDAQ OMX Stockholm's clearing operations. Also includes our 1% available-for-sale investment in DFM of $33 million that is classified as an available-for-sale security. See Note 5, "Investments," for further discussion of our trading investment securities and available-for-sale investment security.

The following table presents for each of the above hierarchy levels, our financial assets and liabilities that are measured at fair value on a recurring basis at December 31, 2009:


	Balance as of December 31, 2009		Fair Value Measurements
			(Level 1)		(Level 2)		(Level 3)
			(in millions)
Financial Assets Measured at Fair Value on a Recurring Basis
Derivative positions, at fair value⁽¹⁾	$	2,054	$	—	$	2,054	$	—
Financial investments, at fair value⁽²⁾		308		308		—		—

Total	$	2,362	$	308	$	2,054	$	—


Financial Liabilities Measured at Fair Value on a Recurring Basis
Derivative positions, at fair value⁽¹⁾	$	2,054	$	—	$	2,054	$	—
Other liabilities⁽³⁾		10		—		10		—

Total	$	2,064	$	—	$	2,064	$	—

⁽¹⁾

⁽²⁾	Primarily comprised of Swedish government debt securities. These securities are classified as trading securities and $183 million are restricted assets to meet regulatory capital requirements for NASDAQ OMX Stockholm's clearing operations.

⁽³⁾

Primarily includes our interest rate swaps of $9 million included in other liabilities in the Consolidated Balance Sheets. We determine the fair value of our interest rate swap contracts using standard valuation models that are based on market-based observable inputs including forward and spot exchange rates and interest rate curves. See "Cash Flow Hedges," of Note 15, "Derivative Financial Instruments and Hedging Activities," for further discussion.

Open Clearing Contracts at NASDAQ OMX Commodities and NASDAQ OMX Stockholm

Derivative Positions, at Fair Value

Through our clearing operations in the derivative markets with NASDAQ OMX Commodities and NASDAQ OMX Stockholm, we are the legal counterparty for each derivative position traded and thereby guarantee the fulfillment of each contract. We also act as the counterparty for certain trades on OTC derivative contracts. The derivatives are not used by NASDAQ OMX Commodities or NASDAQ OMX Stockholm for the purpose of trading on their own behalf. As the legal counterparty of each transaction, NASDAQ OMX Commodities and NASDAQ OMX Stockholm bear the counterparty risk between the purchaser and seller in the contract. The counterparty risks are measured using models that are agreed to with the Financial Supervisory Authority of the applicable country, which requires us to provide minimum guarantees and maintain certain levels of regulatory capital.

The fair value of these derivative contracts with NASDAQ OMX Commodities and NASDAQ OMX Stockholm is reported gross in the Consolidated Balance Sheets as a receivable pertaining to the purchasing party and a payable pertaining to the selling party. Such receivables and payables attributable to outstanding derivative positions have been netted to the extent that such a legal offset right exists and, at the same time, that it is our intention to settle these items. At December 31, 2010, our derivative positions, at fair value in the Consolidated Balance Sheets were $4.0 billion. See "Collateral Received for Clearing Operations, Guarantees Issued and Credit Facilities Available," of Note 17, "Commitments, Contingencies and Guarantees," for further discussion of our guarantees on the fulfillment of these contracts and collateral received.

The following table presents the fair value of our outstanding derivative positions at December 31, 2010 and 2009 prior to netting:


	December 31, 2010				December 31, 2009
	Asset		Liability		Asset		Liability
	(in millions)
Commodity forwards and options^{(1) (2)}	$	3,437	$	3,437	$	1,642	$	1,642
Fixed-income options and futures^{(2) (3)}		578		578		131		131
Stock options and futures^{(2) (3)}		237		237		194		194
Index options and futures^{(2) (3)}		208		208		235		235

Total	$	4,460	$	4,460	$	2,202	$	2,202

⁽¹⁾	We determine the fair value of our forward contracts using standard valuation models that are based on market-based observable inputs including LIBOR rates and the spot price of the underlying instrument.

⁽²⁾	We determine the fair value of our option contracts using standard valuation models that are based on market-based observable inputs including implied volatility, interest rates and the spot price of the underlying instrument.

⁽³⁾	We determine the fair value of our future contracts based upon quoted market prices and average quoted market yields.

Resale and Repurchase Agreements, at Contract Value

Through our clearing operations in the resale and repurchase markets with NASDAQ OMX Stockholm, we are the legal counterparty for each resale and repurchase contract traded and thereby guarantee the fulfillment of each contract. We only clear these transactions once a bilateral contract between members has been entered into whereby the two members have agreed on all terms in the transaction. The resale and repurchase agreements are not used for financing purposes by NASDAQ OMX. As the legal counterparty of each transaction, NASDAQ OMX Stockholm bears the counterparty risk between the purchaser and seller in the resale and repurchase agreement.

We record resale and repurchase agreements at contract value plus interest gross in the Consolidated Balance Sheets as a receivable pertaining to the purchasing party and a payable pertaining to the selling party. Such receivables and liabilities attributable to outstanding resale and repurchase agreements have been netted to the extent that such a legal offset right exists and, at the same time, that it is our intention to settle these items. At December 31, 2010, our resale and repurchase agreements, at contract value in the Consolidated Balance Sheets was $3.4 billion. The resale and repurchase agreements are recorded at their contractual amounts plus interest which approximates fair value, as the fair value of these items are not materially sensitive to shifts in market interest rates because of the short-term nature of these instruments and/or variable interest rates or to credit risk because the resale and repurchase agreements are fully collateralized. The resale and repurchase agreements generally mature in less than 30 days. See "Collateral Received for Clearing Operations, Guarantees Issued and Credit Facilities Available," of Note 17, "Commitments, Contingencies and Guarantees," for further discussion of our guarantees on the fulfillment of these contracts and collateral received.

Financial Instruments Not Measured at Fair Value on a Recurring Basis

Some of our financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature. Such financial assets and financial liabilities include: cash and cash equivalents, restricted cash, receivables, net, certain other current assets, non-current restricted cash, accounts payable and accrued expenses, Section 31 fees payable to SEC, accrued personnel costs, and certain other current liabilities.

We also consider our debt obligations to be financial instruments. The fair value of our debt obligations was estimated using discounted cash flow analyses based on our assumed incremental borrowing rates for similar types of borrowing arrangements and a Black-Scholes valuation technique that is utilized to calculate the convertible option value for the 3.75% convertible notes and the 2.50% convertible senior notes. At December 31, 2010, the carrying value of our debt obligations, before the $40 million unamortized debt discount on the 2.50% convertible senior notes, was approximately $17 million less than fair value. The difference primarily relates to an increase in the fair value of the 2.50% convertible senior notes as a result of changes in current market interest rates during the period, partially offset by a decrease in fair value on the 2.50% convertible senior notes due to the convertible option feature which is equivalent to a conversion price of approximately $55.13 as compared to the closing price of $23.73 at December 31, 2010. At December 31, 2009, the carrying value of our debt obligations, before the $54 million unamortized debt discount on the 2.50% convertible senior notes, was approximately $20 million more than fair value, primarily due to a decrease in fair value on the 2.50% convertible senior notes due to the convertible option feature which is equivalent to a conversion price of approximately $55.13 as compared to the closing price of $19.82 at December 31, 2009. For further discussion of our debt obligations, see Note 8, "Debt Obligations."

- Definition

This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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Derivative Financial Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2010

Derivative Financial Instruments and Hedging Activities

Derivative Financial Instruments and Hedging Activities

15. Derivative Financial Instruments and Hedging Activities

In the ordinary course of business, we may enter into various types of derivative transactions. These derivative transactions include:

•

Futures and foreign currency forward contracts which are commitments to buy or sell at a future date a financial instrument, commodity or currency at a contracted price and may be settled in cash or through delivery.

•

Interest rate swap contracts which are agreements between two parties to exchange one stream of future interest payments for another based on a specified principal amount over a set period of time.

•

Foreign currency option contracts which give the purchaser, for a fee, the right, but not the obligation, to buy or sell within a limited time a financial instrument or currency at a contracted price that may also be settled in cash, based on differentials between specified indices or prices.

NASDAQ OMX may use these derivative financial instruments to manage exposure to various market risks, primarily foreign currency exchange rate fluctuations and changes in interest rates on our variable rate debt. Such instruments are an integral component of our market risk and related asset/liability management strategy and processes.

Fair Value Hedges

Depending on market conditions, we may use foreign currency future, forward and option contracts to limit our exposure to foreign currency exchange rate fluctuations on contracted revenue streams (hedged item) relating to our Market Technology sales. When the contracted revenue streams meet the definition of a firm commitment, these derivative contracts may be designated as fair value hedges if the applicable hedge criteria are met. Changes in fair value on the derivatives and the related hedged items are recognized in the Consolidated Statements of Income. As of December 31, 2010 and 2009, there were no outstanding fair value hedges.

Cash Flow Hedges

In the third quarter of 2008, we entered into interest rate swap agreements that effectively converted $200 million of our senior secured credit facilities in place as of December 31, 2009, which was floating rate debt, to a fixed rate basis through August 2011, thus reducing the impact of interest rate changes on future interest expense. As of December 31, 2009, these interest rate swaps were in a net liability position of $9 million and were recorded in other liabilities in the Consolidated Balance Sheets. In the first quarter of 2010, in connection with the repayment of our senior secured credit facilities in place as of December 31, 2009, we terminated our interest rate swaps and reclassified into earnings the unrealized loss of $9 million which was included in accumulated other comprehensive loss in the Consolidated Balance Sheets at December 31, 2009. This loss is included in general, administrative and other expense in the Consolidated Statements of Income for the year ended December 31, 2010. See "Senior Unsecured Notes, Credit Facility and Repayment of Our Senior Secured Credit Facilities in Place as of December 31, 2009," of Note 8, "Debt Obligations," for further discussion.

All derivative contracts used to manage interest rate risk are measured at fair value and are recorded in assets or liabilities as appropriate with the offset in accumulated other comprehensive loss within NASDAQ OMX stockholders' equity in the Consolidated Balance Sheets. Any ineffectiveness would impact earnings through interest expense. There was no material ineffectiveness recorded in earnings for the years ended December 31, 2010, 2009 and 2008. As of December 31, 2010, there were no outstanding cash flow hedges.

Net Investment Hedges

Net assets of our foreign subsidiaries are exposed to volatility in foreign currency exchange rates. We may utilize net investment hedges to offset the translation adjustment arising from remeasuring our investment in foreign subsidiaries. As of December 31, 2010 and 2009, there were no outstanding net investment hedges.

Derivatives Not Designated as Hedges

NASDAQ OMX may also enter into economic hedges that either do not qualify or are not designated for hedge accounting treatment. This type of hedge is undertaken when hedge accounting requirements cannot be achieved or management decides not to apply hedge accounting.

In order to economically hedge the foreign currency exposure on our business combination with OMX AB, we entered into foreign currency option and forward contracts beginning at the time of the announcement of the proposed combination. A derivative used to hedge exposure related to an anticipated business combination does not qualify for specialized hedge accounting, and as such, was marked to market through the income statement in gain (loss) on foreign currency contracts each reporting period. In the first quarter of 2008, we entered into a forward contract for the Nord Pool transaction. See below for further discussion of these contracts. For additional discussion of the business combination with OMX AB and the Nord Pool transaction, see "Combination with OMX AB and Strategic Partnership with Borse Dubai Limited," and "Acquisition of Certain Businesses from Nord Pool," of Note 3, "Acquisitions and Strategic Initiatives."

In 2008, we also entered into foreign currency contracts, primarily foreign currency option and forward contracts, to partially or fully economically hedge foreign currency transactions and non-U.S. dollar cash flow exposures on our Market Technology contracts. These hedges generally matured within one year and changes in fair value of these derivatives were recognized in gain (loss) on foreign currency contracts, net in the Consolidated Statements of Income.

We did not enter into any material economic hedges that did not qualify or were not designated for hedge accounting during the years ended December 31, 2010 and 2009.

The following table presents the realized and unrealized gain/(loss) recognized in the Consolidated Statements of Income for the year ended December 31, 2008 related to our foreign currency forward contracts. For the cumulative realized gain (loss) related to our foreign currency option contracts, see below.


	Realized Gain (Loss)			Unrealized Loss			Total Gain/ (Loss) for the Year Ended December 31, 2008
	(in millions)
SEK 2008 Forward Contracts	$	34		$	—		$	34
NOK 2008 Forward Contract		(72	)		—			(72	)
Other⁽¹⁾		(4	)		(9	)		(13	)

Total	$	(42	)	$	(9	)	$	(51	)

⁽¹⁾	Primarily represents market technology forward currency contracts used to limit our exposure to foreign currency exchange rate fluctuations on contracted revenue streams which do not qualify for hedge accounting.

In the first quarter of 2008, we entered into forward contracts to hedge the SEK cash payment made in connection with the business combination with OMX AB. We recorded a gain of $34 million upon the closing of the business acquisition in the first quarter of 2008 relating to the cash payments for the SEK forward contracts.

Also in the first quarter of 2008, we entered into a forward contract to hedge the NOK cash payment for the Nord Pool transaction of approximately $320 million. We entered into a forward contract to buy NOK and sell U.S. dollars at an exchange rate of 5.2129. Upon the closing of the Nord Pool transaction on October 21, 2008, we closed out the NOK forward contract, resulting in a realized loss of approximately $72 million.

The following table presents the cumulative realized gain/(loss) on each option contract and the total loss recognized in the Consolidated Statements of Income for year ended December 31, 2008 related to our foreign currency option contracts.


	Purchase		Sale/ Expiration		Cumulative Realized Gain (Loss)			Change in Unrealized Loss			Total Gain/(Loss) for the Year Ended December 31, 2008
	(in millions)
SEK 2007 Option Contract⁽¹⁾	$	39	$	67	$	28		$	(22	)	$	6
SEK 2008 Option Contract⁽²⁾		13		—		(13	)		—			(13	)

Total	$	52	$	67	$	15		$	(22	)	$	(7	)

⁽¹⁾

This contract, which was originally purchased in October 2007 to economically hedge the foreign currency exposure on our business combination with OMX AB, had a fair value at December 31, 2007 of $61 million. On January 7, 2008, we sold the SEK 2007 option contract for $67 million and recorded a gain of $6 million.

⁽²⁾	On January 7, 2008, we purchased a new contract for $13 million, which expired out-of-the-money in February 2008 and we recorded a loss for the purchase amount of $13 million.

As shown in the above two tables, for the year ended December 31, 2008, we recognized a loss of $7 million related to option contracts and also recognized a loss of $51 million related to forward contracts for a total loss of $58 million.

As of December 31, 2010, the fair value amounts of our derivative instruments was immaterial. The following table presents the fair value amounts and balance sheet location of our derivative instruments prior to netting as of December 31, 2009.


	December 31, 2009 Fair Value
	Asset		Liability
	(in millions)
*Derivatives Designated as Hedging Instruments*
Cash flow hedges
Interest rate swaps	$	—	$	9	⁽¹⁾

*Derivatives Not Designated as Hedging Instruments*
Foreign exchange contracts		—		1	⁽²⁾

Total derivatives not designated as hedging instruments		—		1

Total derivatives	$	—	$	10

⁽¹⁾	Included in other liabilities in the Consolidated Balance Sheets.

⁽²⁾	Included in other current liabilities in the Consolidated Balance Sheets.

Leases

12 Months Ended

Dec. 31, 2010

Leases

Leases

16. Leases

We lease office space and equipment under non-cancelable operating leases with third parties. Some of our leases contain renewal options and escalation clauses based on increases in property taxes and building operating costs.

As of December 31, 2010, future minimum lease payments under non-cancelable operating leases (net of sublease income) are as follows:


	Gross Lease Commitments		Sublease Income		Net Lease Commitments
	(in millions)
Year ending December 31:
2011	$	88	$	7	$	81
2012		78		6		72
2013		71		6		65
2014		68		6		62
2015		50		4		46
Thereafter		203		14		189

Total future minimum lease payments	$	558	$	43	$	515

Rent expense for operating leases (net of sublease income of $5 million in 2010, $3 million in 2009 and $7 million in 2008) was $78 million in 2010, $72 million in 2009 and $57 million in 2008.

- Definition

General description of lessee's leasing arrangements including: (1) The basis on which contingent rental payments are determined, (2) The existence and terms of renewal or purchase options and escalation clauses, (3) Restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing, (4) Rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions. Disclosure may also include the specific period used to amortize material leasehold improvements made at the inception of the lease or during the lease term. Additionally, for operating leases having initial or remaining noncancelable lease terms in excess of one year: (a) future minimum rental payments required as of the date of the latest balance sheet presented, in the aggregate and for each of the five succeeding fiscal years, (b) the total of minimum rentals to be received in the future under noncancelable subleases as of the date of the latest balance sheet presented, and (c) for all operating leases, rental expense for each period for which an income statement is presented, with separate amounts for minimum rentals, contingent rentals, and sublease rentals. Rental payments under leases with terms of a month or less that were not renewed need not be included.

+ References+ Details

Commitments, Contingencies and Guarantees	12 Months Ended
Commitments, Contingencies and Guarantees	Dec. 31, 2010
Commitments, Contingencies and Guarantees
Commitments, Contingencies and Guarantees	17. Commitments, Contingencies and Guarantees Collateral Received for Clearing Operations, Guarantees Issued and Credit Facilities Available *Collateral Received for Clearing Operations* Through our clearing operations in the derivative markets with NASDAQ OMX Commodities, NASDAQ OMX Stockholm and IDCG, as well as riskless principal trading at NOCC and the resale and repurchase market with NASDAQ OMX Stockholm, we are the legal counterparty for each position traded and thereby guarantee the fulfillment of each contract. The derivatives are not used by the above entities for the purpose of trading on their own behalf and the resale and repurchase agreements are not used for financing purposes by NASDAQ OMX Stockholm. The structure and operations of NASDAQ OMX Commodities and NASDAQ OMX Stockholm differ from other clearinghouses. See "Derivative Positions, at Fair Value," and "Resale and Repurchase Agreements, at Contract Value," of Note 14, "Fair Value of Financial Investments," for further discussion. We require market participants at NASDAQ OMX Commodities and NASDAQ OMX Stockholm to provide collateral and meet certain minimum financial standards to mitigate the risk if they become unable to satisfy their obligations. Total customer pledged collateral with NASDAQ OMX Commodities and NASDAQ OMX Stockholm was $8.7 billion at December 31, 2010 and $6.1 billion at December 31, 2009. This pledged collateral is held by a third-party custodian bank for the benefit of the clearing members and is accessible by NASDAQ OMX in the event of default. NASDAQ OMX Commodities and NASDAQ OMX Stockholm does not receive any interest on these funds as the risks and rewards of collateral ownership, including interest, belongs to the counterparty. We also require market participants at IDCG and NOCC to meet certain minimum financial standards to mitigate the risk if they become unable to satisfy their obligations and to provide collateral to cover the daily margin call as needed. Customer pledged cash collateral held by IDCG and NOCC, which was $15 million at December 31, 2010, is included in restricted cash with an offsetting liability included in other current liabilities in the Consolidated Balance Sheets, as the risks and rewards of collateral ownership, including interest income, belongs to IDCG and NOCC. Clearing member pledged cash collateral, included in IDCG's guaranty fund, was $8 million at December 31, 2010. This cash is included in non-current restricted cash with an offsetting liability included in other liabilities in the Consolidated Balance Sheets, as the risks and rewards of collateral ownership, including interest income, belongs to IDCG. *Guarantees Issued and Credit Facilities Available* In addition to the collateral pledged by market participants discussed above, we have obtained financial guarantees and credit facilities which are guaranteed by us through counter indemnities, to provide further liquidity and default protection related to our clearing businesses. At December 31, 2010, financial guarantees issued to us totaled $5 million. Credit facilities, which are available in multiple currencies, primarily Swedish Krona and U.S. dollar, totaled $440 million ($196 million in available liquidity and $244 million to satisfy regulatory requirements), none of which was utilized at December 31, 2010. At December 31, 2009, these facilities totaled $417 million ($185 million in available liquidity and $232 million to satisfy regulatory requirements), none of which was utilized. We believe that the potential for us to be required to make payments under these arrangements is mitigated through the pledged collateral and our risk management policies. Accordingly, no contingent liability is recorded in the Consolidated Balance Sheets for these arrangements. Leases We lease some of our office space and equipment under non-cancelable operating leases with third parties and sublease office space to third parties. Some of our leases contain renewal options and escalation clauses based on increases in property taxes and building operating costs. Other Guarantees We have provided other guarantees as of December 31, 2010 of $18 million, primarily related to obligations for our rental and leasing contracts. In addition, for certain Market Technology contracts, we have provided performance guarantees of $6 million related to the delivery of software technology and support services. We have received financial guarantees from various financial institutions to support the above guarantees. At December 31, 2009, the total of these guarantees was $35 million. We have also provided a $25 million guarantee to our wholly-owned subsidiary NOCC to cover losses associated with customer defaults, net of any collateral posted against such losses. We believe that the potential for us to be required to make payments under these arrangements is unlikely. Accordingly, no contingent liability is recorded in the Consolidated Balance Sheets for the above guarantees. Escrow Agreements In connection with our acquisitions of FTEN and SMARTS, we entered into escrow agreements to secure the payments of post-closing adjustments and other closing conditions. At December 31, 2010, these escrow agreements provide for future payments of $3 million in 2011 and $22 million in 2012. Brokerage Activities Nasdaq Execution Services and NASDAQ Options Services provide guarantees to securities clearinghouses and exchanges under their standard membership agreements, which require members to guarantee the performance of other members. If a member becomes unable to satisfy its obligations to a clearinghouses or exchange, other members would be required to meet its shortfalls. To mitigate these performance risks, the exchanges and clearinghouses often require members to post collateral as well as meet certain minimum financial standards. Nasdaq Execution Services' and NASDAQ Options Services' maximum potential liability under these arrangements cannot be quantified. However, we believe that the potential for Nasdaq Execution Services and NASDAQ Options Services to be required to make payments under these arrangements is unlikely. Accordingly, no contingent liability is recorded in the Consolidated Balance Sheets for these arrangements. Litigation We may be subject to claims arising out of the conduct of our business. We are not currently a party to any litigation that we believe could have a material adverse effect on our business, financial condition, or operating results. However, from time to time, we have been threatened with, or named as a defendant in, lawsuits or involved in regulatory proceedings.

Segments

12 Months Ended

Dec. 31, 2010

Segments

Segments

18. Segments

We manage, operate and provide our products and services in three business segments: our Market Services segment, our Issuer Services segment and our Market Technology segment.

Our Market Services segment includes our U.S. and European Transaction Services businesses and our Market Data business, which are interrelated because the Transaction Services businesses generate the quote and trade information that we sell to market participants and data distributors. Market Services also includes our Broker Services business, which offers technology and customized securities administration solutions to financial participants in the Nordic markets.

Our Issuer Services segment includes our Global Listing Services and Global Index Group businesses. The companies listed on The NASDAQ Stock Market, our Nordic and Baltic exchanges and NASDAQ OMX First North represent a diverse array of industries. This diversity of companies listed on NASDAQ OMX markets allows us to develop and license NASDAQ OMX branded indexes, associated derivatives and financial products as part of our Global Index Group. The Global Listing Services business also includes our Corporate Solutions business, which generates revenues through our shareholder, directors, newswire and other services.

Our Market Technology segment delivers technology and services to marketplaces, brokers and regulators throughout the world. Market Technology provides technology solutions for trading, clearing, settlement, and information dissemination, and also offers facility management integration, surveillance solutions and advisory services.

Our management allocates resources, assesses performance and manages these businesses as three separate segments. We evaluate the performance of our segments based on several factors, of which the primary financial measure is income before income taxes. Results of individual businesses are presented based on our management accounting practices and our management structure. Certain amounts are allocated to corporate items in our management reports based on the decision that those activities should not be used to evaluate the segment's operating performance. These amounts include, but are not limited to, amounts related to mergers, strategic initiatives and financing activities. See below for further discussion.

The following table presents certain information regarding these operating segments for the years ended December 31, 2010, 2009 and 2008.


	Market Services			Issuer Services		Market Technology			Corporate Items and Eliminations			Consolidated
	(in millions)
2010
Total revenues	$	2,700		$	344	$	152		$	1		$	3,197
Cost of revenues		(1,675	)		—		—			—			(1,675	)

Revenues less transaction rebates, brokerage, clearance and exchange fees		1,025			344		152			1			1,522

Depreciation and amortization		77			17		5			4			103
Net interest expense		63			21		9			—			93
Income (loss) before income taxes		450			119		11			(54	)⁽²⁾		526
Total assets⁽¹⁾		14,331			714		415			747			16,207
Purchases of property and equipment		29			4		7			2			42

2009
Total revenues	$	2,934		$	330	$	145		$	2		$	3,411
Cost of revenues		(1,958	)		—		—			—			(1,958	)

Revenues less transaction rebates, brokerage, clearance and exchange fees		976			330		145			2			1,453

Depreciation and amortization		84			11		6			3			104
Net interest expense		59			20		9			1			89
Income (loss) before income taxes		408			110		14			(141	)⁽³⁾		391
Total assets⁽¹⁾		8,453			692		260			1,317			10,722
Purchases of property and equipment		46			4		9			—			59

2008
Total revenues	$	3,176		$	343	$	119		$	12		$	3,650
Cost of revenues		(2,190	)		—		—			—			(2,190	)

Revenues less transaction rebates, brokerage, clearance and exchange fees		986			343		119			12			1,460

Depreciation and amortization		63			14		10			6			93
Net interest expense		43			14		5			—			62
Income (loss) before income taxes		496			77		(22	)		(38	)⁽⁴⁾		513
Total assets⁽¹⁾		10,412			698		259			1,383			12,752
Purchases of property and equipment		31			10		13			1			55

⁽¹⁾

Total assets increased $5.5 billion at December 31, 2010 as compared to December 31, 2009 primarily due to an increase in open clearing contracts reflecting increases in derivative positions, at fair value as well as increases in resale agreements, at contract value within our Market Services segment. The increase in derivative positions, at fair value primarily reflects increased activity and higher price levels on derivative positions in the energy market. The increase for resale agreements, at contract value reflects our new clearing business launched in 2010. Total assets decreased $2.0 billion at December 31, 2009 as compared to December 31, 2008 primarily due to a decrease in our derivative positions, at fair value held within our Market Services segment. The decrease was primarily due to the high volatility in market prices that existed at December 31, 2008 due to the global financial and economic crisis, which created large unrealized positions. As of December 31, 2009, the global economic market had shown signs of recovery from 2008 levels and the outstanding positions that contributed to the large unrealized positions as of December 31, 2008 either expired or were settled.

⁽²⁾	The 2010 corporate items and eliminations primarily include:

•

charges of $40 million related to the repayment of our senior secured credit facilities in place as of December 31, 2009. See "Senior Unsecured Notes, Credit Facility and Repayment of Our Senior Secured Credit Facilities in Place as of December 31, 2009," of Note 8, "Debt Obligations," for further discussion; and

•

$11 million related to loss on divestiture of businesses as a result of our decision to close the businesses of both NEURO ($6 million) and Agora-X ($5 million).

⁽³⁾	The 2009 corporate items and eliminations primarily include:

•

loss from unconsolidated investees, net of $107 million which is mainly comprised of $87 million related to impairment charges recorded on our equity method investments in NASDAQ Dubai ($82 million) and Agora-X ($5 million) and a loss of $19 million on the sale of our 25.25% share capital in Orc. See "Investment in NASDAQ Dubai," and "Impairment of Agora-X," as well as "Investment in Orc Software," of Note 5, "Investments," for further discussion;

•

debt conversion expense of $25 million related to an inducement for the conversion of our 3.75% convertible notes. See "3.75% Convertible Notes," of Note 8, "Debt Obligations," for further discussion; and

•

loss of $5 million on the sale of an available-for-sale investment security in Oslo, which was acquired as part of our business combination with OMX AB. See "Investment in Oslo," of Note 5, "Investments" for further discussion.

⁽⁴⁾	The 2008 corporate items and eliminations primarily include:

•

a net loss on foreign currency contracts of $45 million, primarily related to our Nord Pool transaction ($72 million), partially offset by a $27 million gain related to our business combination with OMX AB. See Note 15, "Derivative Financial Instruments and Hedging Activities," for further discussion;

•

income from unconsolidated investees, net of $27 million, primarily related to our gain on the non-monetary contribution of the Nasdaq trade name to obtain an equity interest in NASDAQ Dubai; and

•

an other-than-temporary impairment on a long-term available-for-sale investment security of $35 million. See "Investment in Oslo" of Note 5, "Investments," for further discussion.

For further discussion of our segments' results, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Segment Operating Results."

Geographic Data

The following table presents revenues and property and equipment, net by geographic area for 2010, 2009 and 2008. Revenues are classified based upon the location of the customer. Property and equipment information is based on the physical location of the assets.


	Total Revenues		Property and Equipment, Net
	(in millions)
2010:
United States	$	2,564	$	99
All other countries		633		65

Total	$	3,197	$	164

2009:
United States	$	2,744	$	102
All other countries		667		62

Total	$	3,411	$	164


2008:
United States	$	3,093	$	109
All other countries		557		74

Total	$	3,650	$	183

No single customer accounted for 10.0% or more of our revenues in 2010, 2009 and 2008.

Schedule II-Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2010

Schedule II-Valuation and Qualifying Accounts

Schedule II-Valuation and Qualifying Accounts

Schedule II—Valuation and Qualifying Accounts

Three Years Ended December 31, 2010

(in millions)


	Reserve for Bad Debts
	2010			2009			2008
Balance at beginning of period	$	3		$	9		$	3
Additions:
Charges to income		5			1			4
Recoveries of amounts previously written-off		1			2			1
Acquisitions⁽¹⁾		—			—			3
Deductions:
Charges for which reserves were provided		(6	)		(9	)		(2	)

Balance at end of period	$	3		$	3		$	9

⁽¹⁾	Relates to the business combination with OMX AB and the acquisition of PHLX in 2008.