NDAQ » Topics » Cash and Cash Equivalents and Changes in Cash Flows

This excerpt taken from the NDAQ 10-Q filed Aug 8, 2008.

Cash and Cash Equivalents and Changes in Cash Flows

The following tables summarize our cash and cash equivalents and changes in cash flows:

 

     June 30,
2008
   December 31,
2007
   Percentage
Change
 
     (in millions)  

Cash and cash equivalents (1)

   $ 740.0    $ 1,325.3    (44.2 )%
                

 

(1)

As of June 30, 2008 our cash and cash equivalents included $43.3 million of restricted cash which is not available for general use by us due to regulatory requirements.

 

     Six Months Ended June 30,    Percentage Change  
     2008     2007   
     (in millions)       

Cash provided by operating activities

   $ 272.5     $ 180.3    51.1 %

Cash provided by (used in) investing activities

     (1,987.5 )     67.7    #  

Cash provided by financing activities

     1,129.7       5.0    #  

 

# Denotes a variance greater than 100.0%.

Cash and cash equivalents. Cash and cash equivalents decreased $585.3 million from December 31, 2007 primarily due to cash used in connection with the business combination with OMX, payment of OMX debt obligations and Section 31 fees. This decrease was partially offset by proceeds from debt obligations, cash acquired in our business combination with OMX, positive cash flow from operations and cash proceeds received related to the sale of our foreign currency contracts used to economically hedge our acquisition bid for OMX. See Note 3, “Business Combinations,” and Note 13, “Derivative Financial Instruments and Hedging Activities,” to the condensed consolidated financial statements for further discussion.

Changes in Cash Flows

Cash provided by operating activities. The following items impacted our cash provided by operating activities for the six months ended June 30, 2008:

 

   

Net income of $223.0 million, partially offset by:

 

   

Non-cash items of approximately $49.7 million comprised primarily of the gain on foreign currency contracts of $40.1 million, deferred taxes, net of $38.7 million and income from unconsolidated investees, net of $27.6 million, partially offset by depreciation and amortization of $38.1 million, share-based compensation of $11.5 million and foreign currency translation adjustment of $9.5 million.

 

   

Increase in deferred revenue of $48.7 million mainly due to Issuer Services’ annual billings.

 

   

Increase in accounts payable and accrued expenses and other accrued liabilities of $50.0 million primarily due to additional rebates payable as a result of increases in market share, as well as an increase in interest payable on our credit facilities.

During the six months ended June 30, 2007, the following items impacted our cash provided by operating activities:

 

   

Net income of $74.4 million.

 

   

Non-cash charges of approximately $41.4 million, comprised primarily of strategic initiative costs of $26.5 million, a clearing contract charge of $10.6 million, a loss on foreign currency option contracts of $9.5 million, and depreciation and amortization of $19.6 million, partially offset by deferred taxes, net of $32.7 million.

 

   

Increase in deferred revenue of $77.7 million mainly due to Corporate Client Group’s annual billings.

 

   

An increase an increase in Section 31 fees payable to SEC of $72.2 million, partially offset by an increase in receivables, net of $48.8 million. Section 31 fees payable to SEC increased due to the recording of additional Section 31 fees in connection with The Nasdaq Stock Market’s operation as an exchange as well as the recording of additional rebates payable as a result of increases in market share. Receivables, net increased also due to the recording of additional Section 31 fees and Issuer Services’ annual billings.

 

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Decrease in accrued personnel costs of $21.5 million primarily due to payment of the 2006 employee incentive compensation in February 2007, partially offset by the 2007 accrual for employee incentive compensation.

We expect that cash provided by operating activities may fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results, accounts receivable collections, share-based compensation and the timing and amount of other payments that we make.

Cash provided by (used in) investing activities. The decrease in cash provided by (used in) investing activities in the first six months of 2008 compared with the first six months of 2007 is primarily due to the cash used in connection with the business combination with OMX, net of cash acquired, as well as the acquisition of 33 1/3% of the equity of DIFX and, for total cash paid of $1,976.0 million. In the first six months of 2007, in conjunction with the lapse of our final offers for the LSE in February 2007, we traded out of foreign currency option contracts which were purchased at the time of the commencement of our bid. These contracts were cash settled for $63.9 million which increased our cash provided by investing activities in the first six months of 2007.

Cash provided by financing activities. Cash provided by financing activities for the first six months of 2008 consisted of the proceeds from the issuance of $475.0 million aggregate principal amount of the 2.50% convertible senior notes and $1,050.0 million in senior secured indebtedness under our credit facilities, net of debt issuance costs paid of $48.0 million. See “Credit Facilities” below for further discussion. The proceeds from the 2.50% convertible senior notes and new credit facilities were partially offset by the refinancing of $352.9 million of OMX outstanding debt obligations at the time of the business combination.

This excerpt taken from the NDAQ 10-Q filed May 9, 2008.

Cash and Cash Equivalents and Changes in Cash Flows

The following tables summarize our cash and cash equivalents and changes in cash flows:

 

     March 31,
2008
   December 31,
2007
   Percentage
Change
 
     (in millions)       

Cash and cash equivalents (1)

   $ 736.0    $ 1,325.3    (44.5 )%
                

 

(1)

As of March 31, 2008 our cash and cash equivalents included $37.4 million of restricted cash which is not available for general use by us due to regulatory requirements.

 

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     Three Months Ended March 31,    Percentage Change
     2008     2007   
     (in millions)     

Cash provided by operating activities

   $ 216.1     $ 78.0    #

Cash provided by (used in) investing activities

     (1,933.7 )     91.7    #

Cash provided by financing activities

     1,128.3       1.6    #

 

# Denotes a variance greater than 100.0%.

Cash and cash equivalents. Cash and cash equivalents decreased $589.3 million from December 31, 2007 primarily due to cash used in connection with the business combination with OMX and payment of Section 31 fees. This decrease was partially offset by cash acquired in our business combination with OMX, positive cash flow from operations and cash proceeds received related to the sale of our foreign currency contracts used to economically hedge our acquisition bid for OMX. See Note 3, “Business Combinations,” and Note 13, “Derivative Financial Instruments and Hedging Activities,” to the condensed consolidated financial statements for further discussion.

Changes in Cash Flows

Cash provided by operating activities. The following items impacted our cash provided by operating activities for the quarter ended March 31, 2008:

 

   

Net income of $121.4 million, partially offset by:

 

   

Non-cash items of approximately $62.5 million, comprised primarily of the gain on foreign currency contracts of $35.3 million, deferred taxes, net of $29.9 million and gain from unconsolidated investees, net of $26.3 million, partially offset by depreciation and amortization of $15.9 million and share-based compensation of $5.4 million.

 

   

Increase in deferred revenue of $93.3 million mainly due to Corporate Client Group’s annual billings.

 

   

Increase in income tax payable of $73.4 million primarily due to current taxable income partially offset by taxes paid in the first quarter of 2008.

During quarter ended March 31, 2007, the following items impacted our cash provided by operating activities:

 

   

Net income of $18.3 million.

 

   

Non-cash charges of approximately $28.8 million, comprised primarily of strategic initiative costs of $24.9 million, a clearing contract charge of $10.6 million, a loss on foreign currency option contracts of $7.8 million, and depreciation and amortization of $9.8 million, partially offset by deferred taxes, net of $31.0 million.

 

   

Increase in deferred revenue of $111.1 million mainly due to Corporate Client Group’s annual billings.

 

   

An increase in accounts payable and accrued expenses of $19.4 million and an increase in Section 31 fees payable to SEC of $12.9 million, offset by an increase in receivables, net of $67.4 million. Accounts payable and accrued expenses increased mainly due to the recording of additional rebates payable as a result of increases in share volume. Section 31 fees payable to SEC increased due to the recording of additional Section 31 fees in connection with NASDAQ’s operations as an exchange. Receivables, net increased also due to the recording of additional Section 31 fees and Corporate Client Group’s annual billings.

 

   

Decrease in accrued personnel costs of $30.3 million primarily due to payment of the 2006 employee incentive compensation in February 2007, partially offset by the 2007 accrual for employee incentive compensation.

 

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We expect that cash provided by operating activities may fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results, accounts receivable collections, share-based compensation and the timing and amount of other payments that we make.

Cash provided by (used in) investing activities. The decrease in cash provided by (used in) investing activities in the first quarter of 2008 compared with the first quarter of 2007 is primarily due the cash used in connection with the business combination with OMX, net of cash acquired, as well as the acquisition of 33 1/3% of the equity of DIFX and the acquisition of Agora-X, for total cash paid of $1,963.6 million. In the first quarter of 2007, in conjunction with the lapse of our final offers for the LSE in February 2007, we traded out of foreign currency option contracts which were purchased at the time of the commencement of our bid. These contracts were cash settled for $63.9 million which increased our cash provided by investing activities in the first quarter of 2007.

Cash provided by financing activities. Cash provided by financing activities for the first quarter of 2008 consisted of the proceeds from the issuance of $475.0 million aggregate principal amount of convertible senior notes and $1,050.0 million in senior secured indebtedness under our credit facilities. See “Credit Facilities” below for further discussion. The proceeds from the convertible notes and new credit facilities were partially offset by the refinancing of $352.9 million of OMX outstanding debt obligations at the time of the business combination.

EXCERPTS ON THIS PAGE:

10-Q
Aug 8, 2008
10-Q
May 9, 2008
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