On Monday, NYSE Euronext, Inc. (NYSE:NYX) reported its first quarter earnings and discussed the following topics in its earnings conference call. Here’s what executives shared with analysts and investors.
Tech Biz Backlogs
Howard Chen – Credit Suisse: Just on the Technology business and the delayed decision-making you’re speaking to, can you quantify that in terms of backlogs, as you guys all see it and second, how long would this take to, the need to persist for you to rethink that $1 billion target and the spending you have all allocated to that? Thanks.
A Closer Look: NYSE Euronext Earnings Cheat Sheet>>
Duncan L. Niederauer – CEO and Director: One quarter does not make a trend. We realize that a lot of our big customers, who are the most obvious users of some of the hosted and managed services, are going through their own business reinvention discussions internally. They are being asked to do that, in a macro environment that is impacting them, as much as it’s impacting us. As you can see from some of the results, that, the integrated investment banks have been publishing. So I don’t think – we are certainly not leading internally at this point to worry about whether this quarter, after three years of pretty consistent growth, it’s suddenly the beginning of a new trend. I think if this persisted throughout this year, we would have to rethink kind of where we are on that, but we continue to believe there is good bolt-on acquisition opportunities, and there is good organic growth opportunities in that business, and I will say what I have said before, I think that will largely – the success in that arena will largely define the longer term success of this company, because I think that’s where we and others in the industry are going to have to head.
Niamh Alexander – KBW: Can I just go back to the clearing, because you are on target, your tracking have – but I don’t think we had the opportunity to talk at the analyst day about the capital requirements, because your leverage ratio picked up a little bit this past quarter, are there some numbers you can share with us, just in terms of leverage ratios or interest coverage or certain levels like that, that you have talked through with the rating agencies that you want to be comfortable with? Because, you are going to become the guarantor, right, once you fully own the clearing?
Duncan L. Niederauer – CEO and Director: Yes and no, because all those statements are correct. But if you look at what we’ve with NYPC and things like that, where our contribution — when we started that remember, we had to fund the guarantee fund there as well and the issues there are – that was $25 million to $50 million funding. Remember that in our Liffe Clear business, we are doing most of the clearing already, we in-sourced everything but the treasury and risk management functions. So of course, we will continue to stay focused on that. We’ll see that whatever is required, we’re undertaking the discussions with the FSA now to talk about what they want that to look like. But we don’t think that’s going to be a huge hit to capital, if indications to-date are any barometer. We also continue to think that although our credit rating is obviously well above investment grade — well into investment grade territory, I continue to believe as I mentioned to some of you before, that looking at the credit rating of the parent company of any clearinghouse, I believe is a strange way of thinking about it. If you really get down to it, when the exchanges guarantee fund would be tapped is so far down the risk waterfall, that I continue to say and I can’t say that anybody is listening, but I am going to continue to say it anyway, that the right way to think about the credit exposure at any clearinghouse, is really a weighted average of all the clearinghouses participants. I think that’s much more important; and I think we’re much more focused with the regulators that we’re talking to, about the real time risk controls in the clearinghouse and how to manage all of that, I think that’s much more important than, A, the credit rating of the Topco and B, whether we put in $25 million-$50 million or $100 million in a guarantee funds, those are interesting facts, but not terribly relevant as compared to the other stuff, so I’ll do some more homework into that with my derivatives specialist and if the answer they give me is quite different than what I just shared, we’ll make sure we circulate something on that.