NASDAQ OMX Group (NDAQ)

The NASDAQ Market Center

Pursuant to Emerging Issues Task Force, or EITF, of the Financial Accounting Standards Board, or FASB, Issue No. 99-19, “Reporting Revenue Gross as a Principal versus Net as an Agent,” or EITF 99-19, we record execution revenues from transactions on a gross basis in revenues and record related expenses such as liquidity rebate payments and execution costs as cost of revenues. All routed transactions are executed through Nasdaq Execution Services, LLC, which is registered with the SEC as a broker-dealer. Nasdaq Execution Services, as a broker-dealer, acts as principal to the transactions executed through The NASDAQ Market Center, which exposes Nasdaq Execution Services to clearance and settlement risk.

We also have execution risk on non-routed transactions that are conducted on our platform. Under our Limitation of Liability Rule, we, subject to certain caps, provide compensation for losses directly resulting from the systems’ actual failure to correctly process an order, Quote/Order, message or other data into The NASDAQ Market Center. 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 of SFAS No. 5, “Accounting for Contingencies,” or SFAS 5. As such, losses arising as a result of the rule are accrued and charged to expense only if the loss is probable and estimable. See our 2007 Annual Report on Form 10-K for further discussion of the Limitation of Liability Rule.

The NASDAQ Market Center credits a portion of the per share execution charge to the market participant that provides the liquidity and records the liquidity rebate as a cost of revenues in the Condensed Consolidated Statements of Income. These liquidity rebates are paid on a monthly basis and the amounts due are included in accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets. The liquidity rebates payable amounts were $40.6 million at March 31, 2008 and $24.8 million at December 31, 2007.

We are required to pay Section 31 fees to the SEC for supervision and regulation of securities markets. We pass these costs along to our customers through our execution revenues. We collect the fees as a pass-through charge from organizations executing eligible trades on the Exchange’s exchange platform and we recognize these amounts in cost of revenues when invoiced. Section 31 fees received are included in cash and cash equivalents in the Condensed 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 SEC in the Condensed 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 liquidity rebates, brokerage, clearance and exchange fees. As we hold the cash received until payment to the SEC, we earned interest income on the related cash balances.

The Nasdaq Market Center

Pursuant to EITF 99-19, we record execution revenues from transactions on a gross basis in revenues and record related expenses such as liquidity rebate payments and execution costs as cost of revenues. We have

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The Nasdaq Stock Market, Inc.

Notes to Consolidated Financial Statements—(Continued)

recorded execution revenues related to the Brut and INET platforms on a gross basis since the related acquisitions, as Brut and INET have historically had risk as principal on transactions executed through their respective platforms. On February 1, 2006, Brut and INET merged together into a single broker-dealer, Brut, LLC, which was later renamed, Nasdaq Execution Services, LLC. All routed transactions are executed through Nasdaq Execution Services. Nasdaq Execution Services is registered with the SEC as a broker-dealer. Nasdaq Execution Services, as a broker-dealer, acts as principal to the transactions executed through The Nasdaq Market Center, which exposes Nasdaq Execution Services to clearance and settlement risk.

Starting with the second quarter of 2005, we have reported execution revenues from transactions on our legacy Nasdaq platform on a gross basis in revenues and reported related expenses as cost of revenues, as we have certain risk associated with trade execution, subject to rule limitations and caps, as a result of our Limitation of Liability Rule ⁽¹⁾. This change in presentation was implemented on a prospective basis beginning April 1, 2005 as required under U.S. GAAP, as a direct result of the rule change. Following our migration to a single trading platform, we continue to have execution risk on non-routed transactions that are conducted on our platform. We do not record a liability for any potential claims that may be submitted under the rule unless they meet the provisions of SFAS 5. As such, losses arising as a result of the rule are accrued and charged to expense only if the loss is probable and estimable.

Prior to the second quarter of 2005, execution revenues and the related expenses were recorded on a net basis as we did not act on a principal basis on any trades executed through our systems. In addition, under FINRA Rule 4705, we historically disclaimed any liability for losses arising from malfunctions of The Nasdaq Market Center. This rule eliminated liability or risk of loss to us for system failures.

The Nasdaq Market Center credits a portion of the per share execution charge to the market participant that provides the liquidity and records the liquidity rebate as a cost of revenues in the Consolidated Statements of Income. These liquidity rebates are paid on a monthly basis and the amounts due are included in accounts payable and accrued expenses in the Consolidated Balance Sheets. The liquidity rebates payable amounts were $24.8 million at December 31, 2007 and $14.2 million at December 31, 2006.

If all the claims arising out of the use of The Nasdaq Market Center cannot be fully satisfied because together they exceed the maximum amount of compensation dollars available, then available monies will be allocated on a proportional basis among all the claims arising on a single trading day or during a single calendar month, as applicable. All claims for compensation must be made in writing and submitted to Nasdaq no later than the opening of trading on the next business day after the day on which the use of Nasdaq’s facilities gave rise to the compensation claim.

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The Nasdaq Stock Market, Inc.

Notes to Consolidated Financial Statements—(Continued)

We are required to pay Section 31 fees to the SEC for supervision and regulation of securities markets. We pass these costs along to our customers through our execution revenues. Nasdaq collects the fees as a pass-through charge from organizations executing eligible trades on Nasdaq’s exchange platform and recognizes these amounts in cost of revenues when invoiced. 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 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 Nasdaq’s revenues less liquidity rebates, brokerage, clearance and exchange fees. As we hold the cash received until payment to the SEC, we earned interest income on the related cash balances.

The Nasdaq Market Center

NASDAQ Market Center

Execution and trade reporting revenues increased in 2007 compared with 2006. The increase in 2007 was primarily due to increases in trade execution market share in NYSE- and AMEX-listed securities, fees collected as a result of Nasdaq’s operation as a national securities exchange and increases in average daily share volume. In February 2007, we announced new equities pricing to harmonize the trading of Nasdaq-listed and non-Nasdaq-listed securities into one pricing schedule. We also announced a pricing change, effective March 1, 2007, that lowered execution and routing fees for high volume customers. As a result of these pricing changes, our matched market share in U.S.-listed equities has increased which also contributed to the increase in our execution and trade reporting revenues.

As discussed above, effective August 1, 2006, as a result of Nasdaq’s operation as a national securities exchange, additional Section 31 fees were recorded as execution and trade reporting revenues with a corresponding amount recorded as cost of revenues. Since the amount recorded in revenues is equal to the amount recorded in cost of revenues, there is no impact on Nasdaq’s revenues less liquidity rebates, brokerage, clearance and exchange fees. Section 31 fees were $365.0 million in 2007 and $170.6 million in 2006. The increase in 2007 was primarily due to the increase in fees collected as a result of Nasdaq’s operation as a national securities exchange.

Access services revenues increased in 2007 compared with 2006 primarily due to increases in customer demand for network connectivity and exchange membership fees. We began charging exchange membership fees as a result of our operation as a national securities exchange.

We share tape fee revenues from NYSE- and AMEX-listed securities through the NASDAQ Market Center tape fee revenue sharing. We earn tape fee revenues from NYSE- and AMEX-listed securities based upon activity within and trades reported to the NASDAQ Market Center for securities listed on these exchanges and based upon the size of NYSE and AMEX revenue tape sharing pools. The increases in 2007 compared with 2006 were primarily due to an increase in trade execution market share in both NYSE- and AMEX-listed securities.

The NASDAQ Market Center shared revenues under the Nasdaq General Revenue Sharing Program through the second quarter of 2006. Under this discretionary program we shared operating revenue, which is interpreted to mean net revenue after expenses from all services that derive revenue, from member trading and trade reporting activity in Nasdaq-listed securities. The program was designed to provide an incentive for quoting market participants to send orders and report trades to the NASDAQ Market Center. Under a new program introduced in the third quarter of 2006, we have refocused the revenue sharing program to trades that are reported to The FINRA/Nasdaq Trade Reporting Facility LLC.

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The NASDAQ Market Center liquidity rebates, in which we credit a portion of the per share execution charge to the market participant that provides the liquidity, increased in 2007 compared with 2006. The increase in liquidity rebates in 2007 compared with 2006 was primarily due to increases in trade execution market share for NYSE- and AMEX-listed securities and the pricing changes discussed above. In February 2006, we harmonized our pricing for all of our venues, which increased the per share liquidity rebates for INET, but decreased the per share liquidity rebates for Brut and Nasdaq’s legacy execution system. Also beginning February 2006, we began paying rebates on NYSE- and AMEX-listed securities, which further contributed to the increase in liquidity rebates in 2007.

Brokerage, clearance and exchange fees increased in 2007 compared with 2006. The increase in 2007 compared with 2006 was primarily due to additional Section 31 fees due to Nasdaq’s operation as a national securities exchange and increases in trade execution market share for NYSE- and AMEX-listed securities. As noted above, effective August 1, 2006, as a result of Nasdaq’s operation as a national securities exchange, additional Section 31 fees were recorded as execution and trade reporting revenues as well as a corresponding cost of revenues. Partially offsetting the increase in 2007 was a decline in clearance costs due to our migration to a single trading platform.

Nasdaq Market Center

Execution and trade reporting revenues increased in the third quarter and for the first nine months of 2007 compared with the same periods last year. The increase was primarily due to increases in trade execution market share in NYSE- and Amex-listed securities and fees collected as a result of Nasdaq’s operation as a national securities exchange. As discussed above, effective August 1, 2006, as a result of Nasdaq’s operation as a national securities exchange, additional Section 31 fees were recorded as execution and trade reporting revenues with a corresponding amount recorded as cost of revenues. Since the amount recorded in revenues is equal to the amount recorded in cost of revenues, there is no impact on Nasdaq’s revenues less liquidity rebates, brokerage, clearance and exchange fees. Section 31 fees were $94.2 million in the third quarter of 2007 compared with $45.8 million in the third quarter of 2006 and were $265.8 million for the nine months ended September 30, 2007 compared with $97.4 million for the same period last year.

In February 2007, we announced new equities pricing to harmonize the trading of Nasdaq-listed and non-Nasdaq-listed securities into one pricing schedule. We also announced a pricing change, effective March 1, 2007, that lowered execution and routing fees for high volume customers. As a result of these pricing changes, our matched market share in U.S.-listed equities has increased which also contributed to the increase in our execution and trade reporting revenues.

Access services revenues increased in the third quarter and for the first nine months of 2007 compared with the same periods last year primarily due to increases in customer demand for network connectivity and exchange membership fees. We began charging exchange membership fees as a result of our operation as a national securities exchange.

We share tape fee revenues from NYSE- and Amex-listed securities through The Nasdaq Market Center tape fee revenue sharing. We earn tape fee revenues from NYSE- and Amex-listed securities based upon activity within and trades reported to The Nasdaq Market Center for securities listed on these exchanges and based upon the size of NYSE and Amex revenue tape sharing pools. The increase for the third quarter and the first nine months of 2007 compared with the same periods last year was primarily due to an increase in trade execution market share in both NYSE- and Amex-listed securities.

The Nasdaq Market Center shared revenues under the Nasdaq General Revenue Sharing Program through the second quarter of 2006. Under this discretionary program we shared operating revenue, which is interpreted to mean net revenue after expenses from all services that derive revenue, from member trading and trade reporting activity in Nasdaq-listed securities. The program was designed to provide an incentive for quoting market participants to send orders and report trades to The Nasdaq Market Center. Under a new program introduced in the third quarter of 2006, we have refocused the revenue sharing program to trades that are reported to The FINRA/Nasdaq Trade Reporting Facility LLC, a wholly-owned subsidiary.

The Nasdaq Market Center liquidity rebates, in which we credit a portion of the per share execution charge to the market participant that provides the liquidity, increased in the third quarter and first nine months of 2007 compared with the same periods in 2006. The increase was primarily due to increases in trade execution market share for NYSE- and Amex-listed securities and the pricing changes discussed above. Also beginning February 2006, we began paying rebates on NYSE- and Amex-listed equity securities which further contributed to the increase for the nine months ended September 30, 2007.

The increase in brokerage, clearance and exchange fees was primarily due to increases in trade execution market share for NYSE- and Amex-listed securities and additional Section 31 fees due to Nasdaq’s operation as a national securities exchange. As noted above, effective August 1, 2006, as a result of Nasdaq’s operation as an exchange, additional Section 31 fees were recorded as execution and trade reporting revenues as well as a corresponding cost of revenues. Partially offsetting the increases were declines in clearance costs due to our migration to a single trading platform.

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Nasdaq Market Center

Execution and trade reporting revenues increased in the second quarter and for the first six months of 2007 compared with the same periods last year. The increase was primarily due to increases in market share for NYSE- and Amex-listed securities and fees collected as a result of Nasdaq’s operation as a national securities exchange. As discussed above, effective August 1, 2006, as a result of Nasdaq’s operation as a national securities exchange, additional Section 31 fees were recorded as execution and trade reporting revenues with a corresponding amount recorded as cost of revenues. Since the amount recorded in revenues is equal to the amount recorded in cost of revenues, there is no impact on Nasdaq’s revenues less liquidity rebates, brokerage, clearance and exchange fees. Section 31 fees were $73.1 million in the second quarter of 2007 compared with $27.3 million in the second quarter of 2006 and were $171.6 million for the six months ended June 30, 2007 compared with $51.6 million with the same period last year.

In February 2007, we announced new equities pricing to harmonize the trading of Nasdaq-listed and non-Nasdaq-listed securities into one pricing schedule. We also announced a pricing change, effective March 1, 2007, that lowered execution and routing fees for high volume customers. As a result of these pricing changes, our matched market share in U.S.-listed equities has increased which also contributed to the increase in our execution and trade reporting revenues.

Access services revenues increased in the second quarter and for the first six months of 2007 compared with the same periods last year primarily due to increases in customer demand for network connectivity and exchange membership fees. We began charging exchange membership fees as a result of our operation as a national securities exchange.

We share tape fee revenues from NYSE- and Amex-listed securities through The Nasdaq Market Center tape fee revenue sharing. We earn tape fee revenues from NYSE- and Amex-listed securities based upon activity within and trades reported to The Nasdaq Market Center for securities listed on these exchanges and the size of NYSE and Amex revenue tape sharing pools. The increase for the second quarter and the first six months of 2007 compared with the same periods last year was primarily due to an increase in trade execution market share in both NYSE- and Amex-listed securities.

The Nasdaq Market Center shared revenues under the Nasdaq General Revenue Sharing Program through the second quarter of 2006. Under this discretionary program we shared operating revenue, which is interpreted to mean net revenue after expenses from all services that derive revenue, from member trading and trade reporting activity in Nasdaq-listed securities. The program was designed to provide an incentive for quoting market participants to send orders and report trades to The Nasdaq Market Center. Under a new program introduced in the third quarter of 2006, we have refocused the revenue sharing program to trades that are reported to The Trade Reporting Facility LLC, a wholly-owned subsidiary.

The Nasdaq Market Center liquidity rebates, in which we credit a portion of the per share execution charge to the market participant that provides the liquidity, increased in the second quarter and first six months of 2007 compared with the same periods in 2006. The increase was primarily due to increases in trade execution market share for NYSE- and Amex-listed securities and the pricing changes discussed above. Also beginning February 2006, we began paying rebates on NYSE- and Amex-listed securities.

The increase in brokerage, clearance and exchange fees was primarily due to increases in trade execution market share for NYSE- and Amex-listed securities and additional Section 31 fees due to Nasdaq’s operation as a national securities exchange. As noted above, effective August 1, 2006, as a result of Nasdaq’s operation as an exchange, additional Section 31 fees were recorded as execution and trade reporting revenues as well as a corresponding cost of revenues. Partially offsetting the increases were declines in clearance costs due to our migration to a single trading platform.

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Nasdaq Market Center

Execution and trade reporting revenues increased in the first quarter of 2007 compared with the first quarter of 2006. The increase was primarily due to increases in market share for NYSE- and Amex-listed securities as well as increases in average daily trading volume and fees collected as a result of Nasdaq’s operation as a national securities exchange. As discussed above, effective August 1, 2006, as a result of Nasdaq’s operation as a national securities exchange, additional Section 31 fees were recorded as execution and trade reporting revenues with a corresponding amount recorded as cost of revenues. Since the amount recorded in revenues is equal to the amount recorded in cost of revenues, there is no impact on Nasdaq’s gross margin. Section 31 fees were $98.5 million in the first quarter of 2007 and $24.3 million in the first quarter of 2006.

In February 2007, we announced new equities pricing to harmonize the trading of Nasdaq-listed and non-Nasdaq-listed securities into one pricing schedule. We also announced a pricing change, effective March 1, 2007, that lowered access and routing fees for high volume customers. As a result of these pricing changes, our non-Nasdaq-listed market share has increased which contributed to the increase in our execution and trade reporting revenues.

Access services revenues increased in the first quarter of 2007 compared with the first quarter of 2006 primarily due to increases in customer demand for network connectivity.

We share tape fee revenues from NYSE- and Amex-listed securities through The Nasdaq Market Center tape fee revenue sharing. We earn tape fee revenues from NYSE- and Amex-listed securities based upon both the percentage of trades reported to The Nasdaq Market Center for securities listed on these exchanges and the size of NYSE and Amex revenue sharing pools. The increase was primarily due to an increase in trade execution market share in both NYSE- and Amex-listed securities.

The Nasdaq Market Center shared revenues under the Nasdaq General Revenue Sharing Program through the second quarter of 2006. Under this discretionary program we shared operating revenue, which is interpreted to mean net revenue after expenses from all services that derive revenue, from member trading and trade reporting activity in Nasdaq-listed securities. The program was designed to provide an incentive for quoting market participants to send orders and report trades to The Nasdaq Market Center. Under a new program introduced in the third quarter of 2006, we have refocused the revenue sharing program to trades that are reported to The Trade Reporting Facility LLC, a wholly-owned subsidiary.

The Nasdaq Market Center liquidity rebates, in which we credit a portion of the per share execution charge to the market participant that provides the liquidity, increased in the first quarter of 2007 compared with the first quarter of 2006. The increase was primarily due to increases in trade execution market share for NYSE- and Amex-listed securities and increases in average daily trading volume. Also beginning February 2006, we began paying rebates on NYSE- and Amex-listed securities.

The increase in brokerage, clearance and exchange fees was primarily due to increases in trade execution market share for NYSE- and Amex-listed securities and additional Section 31 fees due to Nasdaq’s operations as a national securities exchange, as well as an increase in average daily trading volume. As noted above, effective August 1, 2006, as a result of Nasdaq’s operations as an exchange, additional Section 31 fees were recorded as execution and trade reporting revenues as well as a corresponding cost of revenues.

The Nasdaq Market Center

Pursuant to EITF 99-19, we record execution revenues from transactions on a gross basis in revenues and record related expenses such as liquidity rebate payments and execution costs as cost of revenues. We have recorded execution revenues related to the Brut and INET platforms on a gross basis since the related acquisitions, as Brut and INET have historically had risk as principal on transactions executed through their respective platforms. On February 1, 2006, Brut and INET merged together into a single broker-dealer, Brut, LLC, which was later renamed, Nasdaq Execution Services. All routed transactions are executed through Nasdaq Execution Services. Nasdaq Execution Services is registered with the SEC as a broker-dealer. Nasdaq Execution Services, as a broker-dealer, acts as principal to the transactions executed through The Nasdaq Market Center, which exposes Nasdaq Execution Services to clearance and settlement risk.

Starting with the second quarter of 2005, we have reported execution revenues from transactions on our legacy Nasdaq platform on a gross basis in revenues and reported related expenses as cost of revenues, as we have certain risk associated with trade execution, subject to rule limitations and caps, as a result of our Limitation of Liability Rule. This change in presentation was implemented on a prospective basis beginning April 1, 2005 as required under GAAP, as a direct result of the rule change. Following our move to a single platform, we continue to have execution risk on non-routed transactions that are conducted on our platform. We do not record a liability for any potential claims that may be submitted under the rule unless they meet the provisions of SFAS 5. As such, losses arising as a result of the rule are accrued and charged to expense only if the loss is probable and estimable.

Prior to the second quarter of 2005, execution revenues and the related expenses were recorded on a net basis as we did not act on a principal basis on any trades executed through our systems. In addition, under NASD Rule 4705, we historically disclaimed any liability for losses arising from malfunctions of The Nasdaq Market Center. This rule eliminated liability or risk of loss to us for system failures.

We are required to pay Section 31 fees to the SEC for supervision and regulation of securities markets, which are included in cost of revenues. We pass these costs along to our customers through our execution revenues.

Nasdaq Market Center

Execution and trade reporting revenues increased for the third quarter and for the first nine months of 2006 compared with the same periods last year primarily due to the inclusion of INET’s results as well as increases in average daily share volume and increases in trade execution market share for NYSE- and Amex-listed securities. In February 2006, we harmonized our pricing on Nasdaq-listed securities across all of our venues and introduced new pricing on NYSE-listed securities, which further contributed to the increase in revenues. The Nasdaq-listed pricing increased the execution fees for Brut and Nasdaq’s legacy execution systems, but decreased the execution fees for INET.

Also, effective August 1, 2006, as a result of Nasdaq’s operation as a national securities exchange additional SEC fees pursuant to Section 31 of the Securities Exchange Act of 1934 were recorded as execution and trade reporting revenues with a corresponding amount recorded as cost of revenues. The Section 31 fees are designed to recover the costs to the government of supervision and regulation of securities markets and securities professionals. Nasdaq collects the fees as a pass-through charge from organizations executing eligible trades on the Exchange (Nasdaq’s legacy execution system) or exchange platforms (INET’s and Brut’s platforms) and recognizes these amounts in cost of revenues when invoiced. Fees received are included in cash at the time of receipt and, as required by law, the amount due to the SEC is remitted semiannually and recorded as an accrued liability until paid. Since the amount recorded in revenues is equal to the amount recorded in cost of revenues, there is no impact on Nasdaq’s gross margin or net income. For the third quarter of 2006, additional SEC fees of $38.4 million as a result of additional INET activity and Nasdaq’s operations of an exchange, were recorded to both revenues and cost of revenues compared with the same period last year and for the first nine months of 2006, additional SEC fees of $82.0 million as a result of additional INET activity and Nasdaq’s operations of an exchange were recorded to both revenues and cost of revenues compared with the same period last year.

Access services revenues decreased for the third quarter and for the first nine months of 2006 compared with the same periods last year primarily due to the retirement of our legacy access service products and associated proprietary network in the fourth quarter of 2005, when we completed the transition to the new Nasdaq Workstation. Beginning in 2005, we migrated users away from our legacy access service products towards our new QIX protocol, FIX connectivity and new Nasdaq Workstation, all of which operate over third-party networks. By doing so, we were able to reduce our technology and network costs and increase our systems’ scalability without affecting performance or reliability. Revenues from the discontinued products totaled $14.4 million in the third quarter of 2005 and $46.5 million in the first nine months of 2005 and expenses related to the discontinued products were $12.3 million in the third quarter of 2005 and $37.4 million in the first nine months of 2005. The industry standards and third-party products are more efficient and cost effective but produce lower revenues. However, these products will contribute more to our operating results than our legacy access services products. Partially offsetting the decreases in the third quarter and the first nine months of 2006, were access services revenues from INET and the new Nasdaq Workstation and increased revenues from FIX and QIX.

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We share tape fee revenues from NYSE- and Amex-listed securities through The Nasdaq Market Center tape fee revenue sharing. We earn tape fee revenues from NYSE- and Amex-listed securities based upon both the percentage of trades reported to The Nasdaq Market Center for securities listed on these exchanges and the size of NYSE and Amex revenue sharing pools. The increases for the third quarter and the first nine months of 2006 compared with the same periods last year were primarily due to an increase in trade execution market share in both NYSE- and Amex-listed securities, partially offset by amounts retained that pre-acquisition were shared with INET, and pricing changes in February 2006 which eliminated certain trades from being eligible for revenue sharing.

The Nasdaq Market Center shared revenues under the Nasdaq General Revenue Sharing Program through the second quarter of 2006. This discretionary program required us to share operating revenue, which is interpreted to mean net revenue after expenses from all services that derive revenue from member trading and trade reporting activity in Nasdaq-listed securities. The program was designed to provide an incentive for quoting market participants to send orders and report trades to The Nasdaq Market Center. Under a new program introduced in the third quarter of 2006, we have refocused the revenue sharing program to trades that are reported to the TRF. The total amount of revenue shared with market participations has increased for the third quarter and first nine months of 2006 compared with the same periods last year. See Nasdaq Market Services Subscriptions below for further discussion of this revenue sharing program.

Nasdaq Market Center liquidity rebates, in which we credit a portion of the per share execution charge to the market participant that provides the liquidity, increased for the third quarter and for the first nine months of 2006 compared with the same periods last year. The nine months of 2005 comparison includes $35.5 million recorded net in total revenues which was before Nasdaq’s new Limitation of Liability Rule. The increases in liquidity rebates were primarily due to due the inclusion of INET’s results as well as increases in average daily share volume and increases in trade execution market share for NYSE- and Amex-listed securities. In February 2006, we harmonized our pricing for all of our venues, which increased the per share liquidity rebates for INET, but decreased the per share liquidity rebates for Brut and Nasdaq’s legacy execution system. Also beginning February 2006, we began paying rebates on NYSE- and Amex-listed securities.

Brokerage, clearance and exchange fees are additional cost of revenues for the Brut and INET platforms and beginning August 1, 2006, for Nasdaq’s legacy execution system. The increases in brokerage, clearance and exchange fees for the third quarter and for the first nine months of 2006 compared with the same periods last year were primarily due to due the inclusion of INET’s results as well as increases in average daily share volume and increases in trade execution market share for NYSE- and Amex-listed securities and additional SEC fees due to Nasdaq’s operations as an exchange. As noted above, effective August 1, 2006, as a result of Nasdaq’s operations as an exchange, additional SEC revenues were recorded as execution and trade reporting revenues as well as a corresponding cost of revenues.

Nasdaq Market Center

Execution and trade reporting revenues increased for the second quarter and for the first six months of 2006 compared with the same periods last year primarily due to the inclusion of INET results as well as increases in market share in Nasdaq-, NYSE- and Amex-listed securities and average daily share volume. In February 2006, we harmonized our pricing on Nasdaq-listed securities across all of our venues and introduced new pricing on NYSE-listed securities, which further contributed to the increase in revenues. The Nasdaq-listed pricing increased the execution fees for Brut and Nasdaq’s legacy execution systems, but decreased the execution fees for INET.

Access services revenues decreased for the second quarter and for the first six months of 2006 compared with the same periods last year primarily due to the retirement of our legacy access service products and associated proprietary network in the fourth quarter of 2005, when we completed the transition to the new Nasdaq workstation. Beginning in 2005, we migrated users away from our legacy access service products towards our new QIX protocol, FIX connectivity and new Nasdaq workstation, all of which operate over third-party networks. By doing so, we have been able to and will continue to reduce our technology and network costs and increase our systems’ scalability without affecting performance or reliability. Revenues from the discontinued products totaled $15.5 million in the second quarter of 2005 and $32.1 million in the first six months of 2005 and expenses related to the discontinued products were $12.1 million in the second quarter of 2005 and $25.1 million in the first six months of 2005. The industry standards and third-party products are more efficient and cost effective but produce lower revenues. However, these products will contribute more to our operating results than our access services legacy products. Partially offsetting the decrease in the second quarter and the first six months of 2006, were access services revenues from INET and the new Nasdaq workstation and increased revenues from FIX and QIX.

We share tape fee revenues from NYSE- and Amex-listed securities through The Nasdaq Market Center tape fee revenue sharing. We earn tape fee revenues from NYSE- and Amex-listed securities based upon both the

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percentage of trades reported to The Nasdaq Market Center for securities listed on these exchanges and the size of NYSE and Amex revenue sharing pools. The increases for the second quarter and the first six months of 2006 compared with the same periods last year were primarily due to an increase in our market share in both NYSE- and Amex-listed securities, partially offset by amounts retained that pre-acquisition were shared with INET, and pricing changes in February 2006 which eliminated certain trades from being eligible for revenue sharing.

The Nasdaq Market Center shares revenues under the Nasdaq General Revenue Sharing Program. This discretionary program requires us to share operating revenue, which is interpreted to mean net revenue after expenses from all services that derive revenue from member trading and trade reporting activity in Nasdaq-listed securities. The program is designed to provide an incentive for quoting market participants to send orders and report trades to The Nasdaq Market Center. The amount of Nasdaq Market Center revenues shared under the Nasdaq General Revenue Sharing Program was flat quarter over quarter and for the six months.

Nasdaq Market Center liquidity rebates, in which we credit a portion of the per share execution charge to the market participant that provides the liquidity, increased for the second quarter and for the first six months of 2006 compared with the same periods last year. The first six months of 2005 comparison includes $35.5 million recorded net in total revenues which was before Nasdaq’s new Limitation of Liability Rule. The increases in liquidity rebates were primarily due to increases in market share for transactions executed on the INET platform and NYSE-listed securities. In February 2006, we harmonized our pricing for all of our venues, which increased the per share liquidity rebates for INET, but decreased the per share liquidity rebates for Brut and Nasdaq’s legacy execution system. Also beginning February 2006, we began paying rebates on NYSE- and Amex-listed securities.

Brokerage, clearance and exchange fees are additional cost of revenues for Brut and INET platforms. The increases in brokerage, clearance and exchange fees for the second quarter and for the first six months of 2006 compared with the same periods last year were primarily due to additional activity from INET’s operations and increases in market share.

Nasdaq Market Center

Execution and trade reporting revenues increased primarily due to the inclusion of INET results as well as increases in market share in Nasdaq-, NYSE- and Amex-listed securities and average daily share volume. In

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February 2006, we harmonized our pricing on Nasdaq-listed securities across all of our venues and introduced new pricing on NYSE-listed securities, which further contributed to the increase in revenues. The Nasdaq-listed pricing increased the execution fees for Brut and Nasdaq’s legacy execution systems, but decreased the execution fees for the INET ECN.

Access services revenues decreased primarily due to the retirement of our legacy access service products, and associated proprietary network in the fourth quarter of 2005, when we completed the transition to the new Nasdaq workstation. Beginning in 2005, we migrated users away from our legacy access service products towards our new QIX protocol, FIX connectivity and new Nasdaq workstation, all of which operate over third-party networks. By doing so, we have been able to and will continue to reduce our technology and network costs and increase our systems’ scalability without affecting performance or reliability. Revenues from the discontinued products totaled $16.6 million and expenses related to the discontinued products were $13.0 million in the first quarter of 2005. The industry standards and third-party products are more efficient and cost effective but produce lower revenues. However, these products will contribute more to our operating results than our access services legacy products. Partially offsetting the decrease in the first quarter of 2006, were access services revenues from INET and increased revenues from FIX and QIX.

Nasdaq Market Center liquidity rebates, in which we credit a portion of the per share execution charge to the market participant that provides the liquidity, were $167.2 million for the three months ended March 31, 2006 and $70.9 million for the three months ended March 31, 2005 (which includes $35.5 million recorded net in total revenues), of which $35.8 million for the three months ended March 31, 2006 and $35.5 million for the three months ended March 31, 2005 relates to liquidity rebate payments for the non-Brut and non-INET portion of The Nasdaq Market Center. The remaining rebate amounts of $131.4 million in 2006 and $35.4 million in 2005 are Brut liquidity rebates and for the first quarter of 2006 INET liquidity rebates. The increase in liquidity rebates was primarily due to increases in market share for NYSE-listed securities and for transactions executed on the INET and Brut platforms. In February 2006, we harmonized our pricing for all of our venues, which increased the per share liquidity rebates for INET, but decreased the per share liquidity rebates for Brut and Nasdaq’s legacy execution system. Also beginning February 2006, we began paying rebates on NYSE- and Amex-listed securities.

We share tape fee revenues from NYSE- and Amex-listed securities through The Nasdaq Market Center tape fee revenue sharing. We earn tape fee revenues from NYSE- and Amex-listed securities based upon both the percentage of trades reported to The Nasdaq Market Center for securities listed on these exchanges and the size of NYSE and Amex revenue sharing pools. The increase in 2006 was primarily due to an increase in our market share in both NYSE- and Amex-listed securities, partially offset by amounts retained that pre-acquisition were shared with INET.

The Nasdaq Market Center shares revenues under the Nasdaq General Revenue Sharing Program. This discretionary program requires us to share operating revenue, which is interpreted to mean net revenue after expenses from all services that derive revenue from member trading and trade reporting activity in Nasdaq-listed securities. The program is designed to provide an incentive for quoting market participants to send orders and report trades to The Nasdaq Market Center. The amount of Nasdaq Market Center revenues shared under the Nasdaq General Revenue Sharing Program was flat quarter over quarter.

Brokerage, clearance and exchange fees are additional cost of revenues for Brut and INET. The increase in brokerage, clearance and exchange fees in the first quarter of 2006 was primarily due to additional activity from INET’s operations and increases in market share.

Nasdaq Market Center

Pursuant to EITF 99-19, Nasdaq records execution revenues from transactions executed through Brut and INET on a gross basis in revenues and records expenses such as liquidity rebate payments as cost of revenues as both Brut and INET act as principal. All indicators of gross vs. net reporting for Brut and INET have been considered. However, the following are the primary indicators of gross reporting for Brut and INET:

Before the second quarter of 2005, Nasdaq reported other execution revenues net of liquidity rebates since Nasdaq does not act as principal. All indicators of gross vs. net reporting contained in EITF 99-19 were considered. However, the following were considered as the primary indicators of net reporting for Nasdaq’s other execution revenues:

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The Nasdaq Stock Market, Inc.

Notes to Consolidated Financial Statements—(Continued)

If all the claims arising out of the use of The Nasdaq Market Center cannot be fully satisfied because together they exceed the maximum amount of compensation dollars available, then available monies will be allocated on a proportional basis among all the claims arising on a single trading day or during a single calendar month, as applicable. All claims for compensation must be made in writing and submitted to Nasdaq no later than the opening of trading on the next business day after the day on which the use of Nasdaq’s facilities gave rise to the compensation claim.

Nasdaq applies the new Limitation of Liability Rule in a non-discriminatory manner, and believes that the proposed rule change provides a uniform non-discriminatory method to compensate The Nasdaq Market Center users for losses arising from system malfunctions in the order execution process. Therefore, pursuant to EITF 99-19, Nasdaq has recorded all execution revenues from transactions executed through The Nasdaq Market Center on a gross basis in execution and trade reporting revenues and has recorded liquidity rebate payments as cost of revenues as Nasdaq now has certain risk associated with trade execution subject to rule limitations and caps. This rule change in fact was made on a prospective basis beginning April 1, 2005 as required under United States GAAP. Nasdaq does not record a liability for any potential claims that may be submitted unless they meet the provisions of SFAS 5 “Accounting for Contingencies”. As such, losses arising as a result of the rule are accrued and charged to expense only if the loss is probable and estimable. This rule change did not have a material impact on the consolidated financial position or results of operations of Nasdaq in the second, third or fourth quarters of 2005.

Nasdaq Market Center

Execution and trade reporting revenues increased $56.2 million, or 92.6%, and increased $164.8 million, or 91.0%, in the three and nine months ended September 30, 2005, respectively, compared with the three and nine months ended September 30, 2004, respectively, primarily due to additional trading activity due to the acquisition of Brut, increases in Nasdaq’s execution market share for both Nasdaq-listed securities and securities listed on other exchanges and increase in the percentage of share volume reported to Nasdaq’s systems. Partially offsetting these increases were fee reductions for the Nasdaq Market Center introduced in 2004. However, despite increases in execution and trade reporting revenues, gross margin from Nasdaq Market Center decreased slightly in the three months ended September 30, 2005 compared with the three months ended September 30, 2004 to $43.3 million and decreased $9.2 million, or 6.6%, to $130.1 million in the nine months ended September 30, 2005 compared with the nine months ended September 30, 2004. Cost of revenues were $89.8

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million and $233.0 million for the three and nine months ended September 30, 2005, respectively, and was $9.2 million for both the three and nine months ended September 30, 2004. The decreases in gross margin were due to an increase in the amount that Nasdaq rebated as a result of the increases from Brut activity and market share and changes to the liquidity rebate tiers.

Nasdaq Market Center liquidity rebates, in which we credit a portion of the per share execution charge to the market participant that provides the liquidity, was $64.8 million and $169.4 million for the three and nine months ended September 30, 2005, respectively, of which $29.6 million and $62.7 million relates to liquidity rebate payments for the non-Brut portion of the Nasdaq Market Center for the three and nine months ended September 30, 2005, respectively. The remaining rebate amounts of $35.2 million and $106.7 million for the three and nine months ended September 30, 2005, respectively, and $7.5 million for both the three and nine months ended September 30, 2004, are Brut liquidity rebates. Brokerage, clearance and exchange fees were $25.0 million and $63.6 million for the three and nine months ended September 30, 2005, respectively, and $1.7 million for both the three and nine months ended September 30, 2004 and are additional cost of revenues for Brut.

Pursuant to EITF 99-19, Nasdaq recorded execution revenues from transactions executed through Brut on a gross basis in revenues and recorded expenses such as liquidity rebate payments as cost of revenues as Brut acts as principal. Prior to the second quarter of 2005, Nasdaq’s other execution revenues were reported net of liquidity rebate, which totaled $28.2 million for the three months ended September 30, 2004, and $35.5 million and $92.8 million for the nine months ended September 30, 2005 and 2004, respectively, as Nasdaq does not act as principal. However, in the second quarter of 2005, under Nasdaq’s new Limitation of Liability Rule, Nasdaq, subject to certain caps, will provide compensation for losses due to malfunctions of the order-execution systems of the Nasdaq Market Center. Therefore, pursuant to EITF 99-19, Nasdaq has recorded all execution revenues from transactions executed through the Nasdaq Market Center on a gross basis in execution and trade reporting revenues and has recorded liquidity rebate payments as cost of revenues as Nasdaq now has certain risk associated with trade execution subject to rule limitations and caps. This rule change in fact was made on a prospective basis beginning April 1, 2005 as required under GAAP. This rule change did not have a material impact on the consolidated financial position or results of operations of Nasdaq in the second or third quarters of 2005.

Access services revenues decreased $2.7 million, or 12.0%, and decreased $7.5 million, or 10.9%, in the three and nine months ended September 30, 2005, respectively, compared with the three and nine months ended September 30, 2004, respectively, primarily due to a decline in the subscriber base for legacy Access Services products, which are being discontinued. The revenues for these discontinued products are expected to continue to decline through the fourth quarter of 2005 and totaled $14.5 million and $46.7 million for the three and nine months ended September 30, 2005, respectively, compared with $18.6 million and $57.2 million for the same periods of 2004. Nasdaq is migrating its users away from proprietary network connectivity and moving towards industry standards and third-party networks. By doing so, Nasdaq has been able to and will continue to reduce our technology and network costs and increase our systems’ scalability without affecting performance or reliability. Expenses related to the discontinued products were $14.0 million and $40.6 million for the three and nine months ended September 30, 2005, respectively, and $22.5 million and $76.2 million for the same periods of 2004. The industry standards and third party products will be more efficient and cost effective but will produce lower revenues. However, these products will contribute more to Nasdaq’s operating results than Nasdaq’s legacy Access Service Products.

Nasdaq Market Center tape fee revenue sharing increased $1.8 million in the three months ended September 30, 2005 and increased $1.6 million, or 25.0%, for the nine months ended September 30, 2005, compared with the same periods of 2004. We share tape fee revenues from NYSE-listed and Amex-listed securities through the Nasdaq Market Center tape fee revenue sharing. We earn tape fee revenues from NYSE-listed and Amex-listed securities based upon both the percentage of trades reported to the Nasdaq Market Center for securities listed on these exchanges and the size of NYSE and Amex revenue sharing pools. The increase in the three and nine months ended September 30, 2005 was primarily due to an increase in Nasdaq’s market share

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in both NYSE-listed and Amex-listed securities. However, partially offsetting the increase in the nine months ended September 30, 2005 was lower Nasdaq market share in Amex-listed securities in the first quarter of 2005.

In January 2004, the Nasdaq Market Center began sharing revenues under the Nasdaq General Revenue Sharing Program. This discretionary program shares operating revenue, which is interpreted to mean net revenue after expenses from all services that derive revenue from member trading and trade-reporting activity in Nasdaq-listed securities. As such, the program is designed to provide an incentive for quoting market participants to send orders and report trades to the Nasdaq Market Center. The amount of Nasdaq Market Center revenues shared under the Nasdaq General Revenue Sharing Program decreased $0.4 million, or 80.0%, in the three months ended September 30, 2005 and decreased $1.6 million, or 84.2%, for the nine months ended September 30, 2005, compared with the same periods of 2004. These decreases were primarily due to changes in revenue sharing under the program.

Nasdaq Market Center

Nasdaq Market Center revenues increased $57.6 million, or 73.0%, and increased $103.7 million, or 62.3%, in the three and six months ended June 30, 2005, respectively, compared with the three and six months ended June 30, 2004, respectively, primarily due to additional trading activity due to the acquisition of Brut and increases in Nasdaq’s execution market share and the percentage of share volume reported to Nasdaq’s systems. Partially offsetting these increases were fee reductions for the Nasdaq Market Center introduced in 2004 and a decline in the subscriber base for legacy Access Services products, which are being discontinued. However, despite increases in revenues, gross margin from Nasdaq Market Center decreased slightly in the three months ended June 30, 2005 compared with the three months ended June 30, 2004 to $44.7 million and decreased $8.8 million, or 9.2%, to $86.8 million in the six months ended June 30, 2005 compared with the six months ended June 30, 2004. Cost of revenues were $89.3 million and $143.1 million for the three and six months ended June 30, 2005, respectively. The decreases in gross margin were due to an increase in the amount that Nasdaq rebated as a result of the increases from Brut activity and market share and an increase in certain liquidity rebates. Nasdaq Market Center liquidity rebate, in which we credit a portion of the per share execution charge to the market participant that provides the liquidity, was $69.2 million and $104.5 million for the three and six months ended June 30, 2005, respectively, of which $33.0 million relates to liquidity rebate payments for the non-Brut portion of the Nasdaq Market Center for both the three and six months ended June 30, 2005. The remaining rebate amounts of $36.2 million and $71.5 million for the three and six months ended June 30, 2005, respectively, are Brut liquidity rebates. Brokerage, clearing and exchange fees were $20.1 million and $38.6 million for the three and six months ended June 30, 2005, respectively, and are additional cost of revenues for Brut. Pursuant to EITF 99-19, Nasdaq recorded execution revenues from transactions executed through Brut on a gross basis in revenues and recorded expenses such as liquidity rebate payments as cost of revenues as Brut acts as principal. Prior to the second quarter of 2005, Nasdaq’s other execution revenues were reported net of liquidity rebate, which totaled $31.2 million for the three months ended June 30, 2005 and $35.5 million and $64.6 million for the six months ended June 30, 2005 and 2004, respectively, as Nasdaq does not act as principal. However, in the second quarter of 2005, under Nasdaq’s new Limitation of Liability Rule, Nasdaq, subject to certain caps, will provide compensation for losses due to malfunctions of the order-execution systems of the Nasdaq Market Center. Therefore, pursuant to EITF 99-19, Nasdaq has recorded all execution revenues from transactions executed through the Nasdaq Market Center on a gross basis in revenues and has recorded liquidity rebate payments as cost of revenues as Nasdaq now has certain risk associated with trade execution subject to rule limitations. This rule change in fact was made on a prospective basis beginning April 1, 2005 as required under GAAP. This rule change did not have a material impact on the consolidated financial position or results of operations of Nasdaq in the second quarter of 2005.

Nasdaq Market Center tape fee revenue sharing increased $0.5 million, or 26.3%, in the three months ended June 30, 2005 and decreased $0.2 million, or 4.3%, for the six months ended June 30, 2005, compared with the same periods of 2004. We share tape fee revenues from NYSE-listed and Amex-listed securities through Nasdaq Market Center tape fee revenue sharing. We earn tape fee revenues from NYSE-listed and Amex-listed securities based upon both the percentage of trades reported to the Nasdaq Market Center for securities listed on these exchanges and the size of NYSE and Amex revenue sharing pools. The increase in the three months ended June 30, 2005 was primarily due to an increase in Nasdaq’s market share in both NYSE-listed and Amex-listed securities. However, in the first quarter of 2005, Nasdaq’s

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market share in Amex-listed securities was lower resulting in a decrease in the amount of tape fee revenue sharing for the six months ended June 30, 2005 compared with the six months ended June 30, 2004. Partially offsetting the decrease in tape fee revenue sharing for the six months ended June 30, 2005, was an increase in Nasdaq’s market share in NYSE-listed securities on a year-to-date basis.

In January 2004, the Nasdaq Market Center began sharing revenues under the Nasdaq General Revenue Sharing Program. This discretionary program shares operating revenue, which is interpreted to mean net revenue after expenses from all services that derive revenue from member trading and trade-reporting activity in Nasdaq-listed securities. As such, the program is designed to provide an incentive for quoting market participants to send orders and report trades to The Nasdaq Market Center. The amount of Nasdaq Market Center revenues shared under the Nasdaq General Revenue Sharing Program decreased $0.6 million, or 85.7%, in the three months ended June 30, 2005 and decreased $1.3 million, or 86.7%, for the six months ended June 30, 2005, compared with the same periods of 2004. This decrease was primarily due to changes in revenue sharing under the program.

Nasdaq Market Center

Nasdaq Market Center revenues increased $46.2 million, or 52.9%, in the three months ended March 31, 2005 compared with the three months ended March 31, 2004, primarily due to the activity from Brut. However, gross margin from Nasdaq Market Center decreased $8.4 million, or 16.7%, in the three months ended March 31, 2005 compared with the same period of 2004. Cost of revenues were $53.9 million for the three months ended March 31, 2005. Pursuant to EITF 99-19, Nasdaq has recorded execution revenues from transactions executed through Brut on a gross basis in revenues and has recorded expenses such as liquidity rebate payments as cost of revenues as Brut acts as principal. Nasdaq’s other execution revenues will continue to be reported net of the liquidity rebate as Nasdaq does not act as principal.

The decrease in gross margin in the three months ended March 31, 2005 compared with the same period of 2004 was primarily due to continued competitive pressure. In response to this continued competition, we increased certain liquidity rebates and reduced certain fees. In January 2004, Nasdaq implemented a new tiered pricing structure geared toward drawing increased liquidity to Nasdaq’s trading platform. In April and November of 2004, Nasdaq further enhanced its pricing structure by increasing the liquidity rebate for certain market participants, which impacted the Nasdaq Market Center liquidity rebate. The new tiered pricing structure lowers execution charges to market participants based on the amount of liquidity a participant provides. Also contributing to the decline in gross margin is a decline in the legacy subscriber base for Access Services legacy products, support for which is being discontinued. The decrease in gross margin was partially offset by an increase in market share for the three months ended March 31, 2005 compared with the three months ended March 31, 2004 primarily due to additional activity from Brut. Average daily share volume was 2.00 billion for the three months ended March 31, 2005 compared to 2.04 billion for the three months ended March 31, 2004–essentially flat.

Nasdaq Market Center liquidity rebate, in which we credit a portion of the per share execution charge to the market participant that provides the liquidity, increased $2.1 million, or 6.3%, in the three months ended March 31, 2005 compared with the three months ended March 31, 2004. The increase was due to an increase in the per share liquidity rebate in April and November 2004 for Nasdaq-listed securities and higher overall average daily share volume of market participants on the non-ECN portion of the Nasdaq Market Center. Partially offsetting the increase in the three months ended March 31, 2005, was the elimination of the liquidity rebate for certain Amex-listed securities in May 2004.

We share tape fee revenues from NYSE-listed and Amex-listed securities through Nasdaq Market Center tape fee revenue sharing. We earn tape fee revenues from NYSE-listed and Amex-listed securities based upon both the percentage of trades reported to the Nasdaq Market Center for securities listed on these exchanges and the size of NYSE and Amex revenue sharing pools. Nasdaq Market Center tape fee revenue sharing decreased $0.7 million, or 25.0%, in the three months ended March 31, 2005 compared with the three months ended March 31, 2004. This decrease was primarily due to the INET ECN reporting additional trading activity to The National Stock Exchange in the first quarter of 2004 as opposed to reporting to us as it had previously done. This change reduced both Nasdaq Market Center revenues and the amount of tape fee revenues Nasdaq was obligated to share with INET, resulting in an overall decline in Nasdaq Market Center revenues, net. Also throughout 2004, Archipelago significantly increased the number of trades it prints, which resulted in lower market share for Nasdaq along with a decrease in the amount of tape fee revenue sharing.

In January 2004, the Nasdaq Market Center began sharing revenues under a new program, the Nasdaq General Revenue Sharing Program. This discretionary program shares operating revenue, which is interpreted to mean net revenue after expenses from all services that derive revenue from member trading and trade-reporting activity in Nasdaq-listed securities. As such, the program is designed to provide an incentive for quoting market participants to send orders and report trades to The Nasdaq Market Center. The amount of Nasdaq Market Center revenues shared under the Nasdaq General Revenue Sharing Program decreased $0.7 million, or 87.5%, in the three months ended March 31, 2005 compared with the three months ended March 31, 2004. This decrease was primarily due to a reduction in the percentage shared under the program.

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