Earnings Call Cheat Sheet for NYSE Euronext: Return on Capital, Deleveraging in Europe
Return on Capital
Richard Repetto – Sandler O’Neill: I guess, my one question, I’d focus sort of on the capital return, Duncan and Michael, if you look at the $550 million buyback and you hint that the your target leverage, you just took 25% more up on the 1.6 EBITDA would be another $500 million, so I guess the question is, if that’s 14% – 15% of the market cap, how do you evaluate the timing? I guess you laid out the buyback but the timing of increasing leverage and how do you evaluate M&A versus what peer exchange to the special dividend or increase in the buyback?
Duncan L. Niederauer – CEO and Director: So, Mike why don’t you start with sort of the timing of the buyback and just let’s dispense with that first and then I will try to address some of the – what the other opportunities might be in terms of other capital deployment possibilities.
Michael S. Geltzeiler – Group Executive VP and CFO: As I mentioned on the call, we are – we do expect to complete the buyback in 2012. The $550 million is 8% of our market cap and yes we agree with you that – with our target leverage ratio, your math is pretty good to do. There is about $1 billion of capacity, and as I mentioned, we would be buying back those shares, the cash that we generate this year beyond the dividend that we payout.
Duncan L. Niederauer – CEO and Director: Rich, to add to that obviously as you point out, we’re also in a position not only to do the buyback and maintain what we think is a healthy dividend, but we’d also be – we’re also in a position to grow the Company through strategic M&A. Now. I don’t say that to startle everyone, as I’ve said publicly, I don’t think that it’s obviously not as easy to get these mega cross-border mergers done as the industry may have thought a few years ago. If we all look back on 2011, I think everyone’s going to say, well, much-anticipated consolidation was met with much unanticipated resistance, but I think as you correctly point out, given how strong we ended up 2011 on the balance sheet side, there is a lot more we can do within simply the stated share repurchase program and we’ll be as transparent as ever about with some of those other options arise that are presented to us.
Impact of Deleveraging in Europe
Niamh Alexander – KBW: I appreciate the heads up on the additional detail we’ll get in April, and you’re already signaling to us that the expenses should be lower in 2012, but the operating environment is still very difficult. Do you think you can actually grow your earnings without an improvement because I’m just concerned about the impact of the deleveraging in Europe, and even the number of terminals are coming down? Help me understand where you can drive the growth.
Michael S. Geltzeiler – Group Executive VP and CFO: I’ll start. I mean one of things, so we get the message clear is, we don’t really want to be focusing on the next quarter or the quarter after that. So, we had really a current operating environment with difficult low volatility. I think the message of our slide, and that’s why our focus is on two years, is as Duncan indicated, sort of in the normal operating environment. We can look at that $2.48, and there are several levers. We have significant growth initiatives that are either in a loss making mode that we think we’ll be making money as well as new initiatives, the clearing. We definitely believe, as we did this year, that we can reduce cost year-over-year, and of course we have accretive opportunities to deploy our capital. So, we’re focusing on those things, we’re not focusing on that January’s volumes are lower than last year. We don’t believe at this stage that that’s any indication of what January 2013 will be, et cetera.
Duncan L. Niederauer – CEO and Director: Yeah, and I think that’s what we also try to focus on Slide 9, because we know there were plenty of uncertainties in terms of some macro clouds already, and now for the whole industry that’s a bit compounded by this low volume, low volatility environment that we started the year up on. It’s hard for us to imagine that situation would worsen. We do remind everybody that a healthy chunk – more than half at this point of our revenue, you could argue, is not transaction related, and we think there’s a lot of other opportunities. Having said that, we’re not delusional, but near-term operating environments were looking pretty muted. I can’t predict what the catalyst will be, but it’s hard to imagine that these clouds of macro uncertainty won’t start to part pretty soon here.