16. Business Segments

Prior to January 1, 2013, we managed, operated and provided our products and services in three business segments: Market Services, Issuer Services and Market Technology. As announced in January 2013, we realigned our reportable segments as a result of changes to the organizational structure of our businesses.

Beginning on January 1, 2013, we manage, operate and provide our products and services in four business segments: Market Services, Listing Services, Information Services and Technology Solutions. All prior period segment disclosures have been recast to reflect our change in reportable segments. Certain other prior year amounts have been reclassified to conform to the current year presentation.

Our Market Services segment consists of our U.S. and European cash equity and derivative trading and clearing businesses and our Access and Broker Services business. In addition, eSpeed’s electronic benchmark U.S. treasury brokerage and co-location service businesses are part of our Market Services segment. See “Acquisition of eSpeed for Trading of U.S. Treasuries,” of Note 4, “Acquisitions and Divestiture,” for further discussion.

Our Listing Services segment consists of our U.S. and European listing businesses, which provide services for companies listed on The NASDAQ Stock Market and our Nordic and Baltic exchanges.

Our Information Services segment includes our Market Data Products and Index Licensing and Services businesses. Our Market Data Products business sells and distributes quote and trade information to market participants and data distributers. Our Index Licensing and Services business develops and licenses NASDAQ OMX branded indexes, associated derivatives, and financial products and also provides custom calculation services for third-party clients. In addition, eSpeed’s market data business is part of our Information Services segment. See “Acquisition of eSpeed for Trading of U.S. Treasuries,” of Note 4, “Acquisitions and Divestiture,” for further discussion.

Our Technology Solutions segment includes our Corporate Solutions and Market Technology businesses. Our Corporate Solutions business offers companies access to innovative products and software solutions and services that ease transparency, mitigate risk, maximize board efficiency and facilitate better corporate governance. On May 31, 2013, we acquired the TR Corporate Solutions businesses. See “Acquisition of the Investor Relations, Public Relations and Multimedia Solutions Businesses of Thomson Reuters,” of Note 4, “Acquisitions and Divestiture,” for further discussion. Our Market Technology business is a leading global technology solutions provider and partner to exchanges, clearing organizations and central securities depositories. Our technology business is also the sales channel for our complete global offering to other marketplaces. Market Technology provides technology solutions for trading, clearing, settlement, surveillance and information dissemination for markets with wide-ranging requirements, from the leading markets in the U.S., Europe and Asia to smaller African markets. Market Technology also provides governance, risk and compliance software solutions.

Our management allocates resources, assesses performance and manages these businesses as four separate segments. We evaluate the performance of our segments based on several factors, of which the primary financial measure is operating income. 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 our voluntary accommodation program, expense related to an SEC matter, restructuring actions, mergers and strategic initiatives, long-term asset impairment, and financing activities. See below for further discussion.

The following table presents certain information regarding these operating segments for the three and nine months ended September 30, 2013 and 2012.



	Market Services		Listing Services		Information Services		Technology Solutions		Corporate Items and Eliminations		Consolidated

	(in millions)
Three Months Ended September 30, 2013
Total revenues	$	499	$	57	$	118	$	131	$	-	$	805
Cost of revenues		(299)		-		-		-		-		(299)
Revenues less transaction rebates, brokerage, clearance and exchange fees		200		57		118		131		-		506
Operating income⁽¹⁾	$	85	$	22	$	86	$	9	$	-	$	202

Three Months Ended September 30, 2012
Total revenues	$	519	$	55	$	99	$	73	$	-	$	746
Cost of revenues		(334)		-		-		-		-		(334)
Revenues less transaction rebates, brokerage, clearance and exchange fees		185		55		99		73		-		412
Operating income (loss)⁽²⁾	$	80	$	23	$	72	$	6	$	(11)	$	170

Nine Months Ended September 30, 2013
Total revenues	$	1,559	$	170	$	333	$	300	$	-	$	2,362
Cost of revenues		(987)		-		-		-		-		(987)
Revenues less transaction rebates, brokerage, clearance and exchange fees		572		170		333		300		-		1,375
Operating income (loss)⁽³⁾	$	234	$	69	$	246	$	18	$	(117)	$	450

Nine Months Ended September 30, 2012
Total revenues	$	1,686	$	166	$	307	$	206	$	-	$	2,365
Cost of revenues		(1,112)		-		-		-		-		(1,112)
Revenues less transaction rebates, brokerage, clearance and exchange fees		574		166		307		206		-		1,253
Operating income (loss)⁽⁴⁾	$	240	$	68	$	225	$	14	$	(31)	$	516

(1) Corporate items and eliminations for the three months ended September 30, 2013 primarily include merger and strategic initiatives expenses including $8 million of costs primarily related to the acquisitions of eSpeed and the TR Corporate Solutions businesses. These amounts were offset by the remeasurement of a contingent purchase price liability related to the BWise acquisition due to changes in the anticipated performance of BWise.

(2) Corporate items and eliminations for the three months ended September 30, 2012 primarily include restructuring charges, special legal expenses related to our voluntary accommodation program and other expenses related to the systems issues experienced at the time of the Facebook IPO, and a net gain on merger and strategic initiatives.

(3) Corporate items and eliminations for the nine months ended September 30, 2013 primarily include expenses related to our voluntary accommodation program, merger and strategic initiatives expense, expense related to an SEC matter, restructuring charges, and special legal expenses.

(4) Corporate items and eliminations for the nine months ended September 30, 2012 primarily include restructuring charges and special legal expenses, partially offset by income from open positions relating to operations of the exchange.

In connection with our change in reportable segments, total assets as of December 31, 2012 have been recast as presented in the following table.



	Market Services		Listing Services		Information Services		Technology Solutions		Corporate Items and Eliminations		Consolidated

	(in millions)
Total assets at September 30, 2013	$	7,879	$	279	$	2,591	$	1,081	$	656	$	12,486
Total assets at December 31, 2012		4,981		254		2,456		625		816		9,132

The increase in total assets for Market Services reflects an increase in goodwill and intangible assets associated with the acquisition of eSpeed as well as an increase in default funds and margin deposits, which reflects NASDAQ OMX Nordic’s implementation of a new collateral management process in the second quarter of 2013. The increase in Technology Solutions reflects an increase in goodwill and intangible assets associated with the acquisition of the TR Corporate Solutions businesses.

For further discussion of our segments’ results, see “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Segment Operating Results.”