NASDAQ OMX Group (NDAQ)

1. Organization and Basis of Presentation

Organization

The Nasdaq Stock Market, Inc., or Nasdaq, is the holding company of The Nasdaq Stock Market LLC, or the Exchange, which commenced operations as a national securities exchange for Nasdaq-listed securities on August 1, 2006. 100.0% of the equity in the Exchange is owned by Nasdaq. To facilitate our operations as a national securities exchange, we formed The Trade Reporting Facility, LLC, or the TRF, a wholly-owned subsidiary. Through the TRF we will continue to collect reports of trades executed by broker-dealers outside of our exchange. National Association of Securities Dealers, or NASD, regulates the TRF as one of its facilities. The TRF began operating on August 1, 2006 for Nasdaq-listed securities. Before we can operate as an exchange in non-Nasdaq-listed securities, we need final regulatory approvals from the SEC and NASD related to the functionality of our TRF and our single platform for trading non-Nasdaq-listed securities. Nasdaq does not expect the TRF to have a material effect on our financial results.

Basis of Presentation

Our unaudited condensed consolidated financial statements include the consolidated accounts of The Nasdaq Stock Market, Inc. Unless otherwise noted in this Quarterly Report on Form 10-Q , the terms “Nasdaq,” “we,” “us” and “our” refer to The Nasdaq Stock Market, Inc. and its wholly-owned subsidiaries. We are responsible for the unaudited condensed consolidated financial statements included in this document. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation, have been reflected. Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be representative of those for the full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2005.

We have condensed or omitted footnotes or other financial information that are normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, but are not required for interim reports. Certain reclassifications have been made to prior year amounts to conform to the current year’s presentation.