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Derivatives and Hedges
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 9 - us-gaap:DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 9—Derivatives and Hedges</b>
</div>
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">NYSE Euronext may use derivative instruments to hedge financial risks related to its financial
position or risks that are otherwise incurred in the normal course of its operations. NYSE Euronext
does not use derivative instruments for speculative purposes and enters into derivative instruments
only with counterparties that meet high creditworthiness and rating standards. NYSE Euronext
adopted Subtopic 65 in the Derivatives and Hedging Topic of the FASB Accounting Standards
Codification on January 1, 2009.
</div>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">NYSE Euronext records all derivative instruments at fair value on the condensed consolidated
statements of financial condition. Certain derivative instruments are designated as hedging
instruments under fair value hedging relationships, cash flow hedging relationships or net
investment hedging relationships. Other derivative instruments remain undesignated. The details of
each designated hedging relationship are formally documented at the inception of the relationship,
including the risk management objective, hedging strategy, hedged item, specific risks being
hedged, derivative instrument, how effectiveness is being assessed and how ineffectiveness, if any,
will be measured. The hedging instrument must be highly effective in offsetting the changes in cash
flows or fair value of the hedged item and the effectiveness is evaluated quarterly on a
retrospective and prospective basis.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following presents the aggregated notional amount and the fair value of NYSE Euronext’s
derivative instruments reported on the condensed consolidated statements of financial condition as
of June 30, 2010 (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="54%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="10%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Notional</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 0px solid #000000"><b>Fair Value of Derivative Instruments</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>June 30, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Asset</b><sup style="font-size: 85%; vertical-align: text-top"><b>(1)</b></sup></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Liability</b><sup style="font-size: 85%; vertical-align: text-top"><b>(2)</b></sup></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivatives not designated as hedging instruments
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td align="left">$</td>
<td> </td>
<td align="right">484</td>
<td> </td>
<td align="left">$</td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td align="left">$</td>
<td> </td>
<td align="right">2</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivatives designated as hedging instruments
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td align="left"></td>
<td> </td>
<td align="right">180</td>
<td> </td>
<td align="left"></td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td align="left"></td>
<td> </td>
<td align="right">2</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="3" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="3" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="3" align="right" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total derivatives
</div></td>
<td> </td>
<td align="left">$</td>
<td> </td>
<td align="right">664</td>
<td> </td>
<td align="left">$</td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td align="left">$</td>
<td> </td>
<td align="right">4</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="3" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="3" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="3" align="right" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>included in “Financial investments” in the condensed consolidated statements of financial condition.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>included in “Short term debt” in the condensed consolidated statements of financial condition.</td>
</tr>
</table>
</div>
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">Pre-tax gains and losses on derivative instruments designated as hedged items under net investment
hedging relationship for the three and six months ended June 30, 2010 were as follows (in
millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Gain/ (loss) recognized in other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>comprehensive income (effective</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Gain/ (loss) recognized in income</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>portion)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>(ineffective portion)</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Three months</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Six months</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Three months</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Six months</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>June 30, 2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>June 30, 2010</b></td>
</tr>
<tr valign="bottom">
<td style="border-bottom:1px solid #000000">
<div style="margin-left:15px; text-indent:-15px">Derivatives in net investment hedging relationship
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">0</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Pre-tax gains and losses on derivative instruments not designated in hedging relationship for the
three and six months ended June 30, 2010 were as follows (in millions):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="56%"> </td>
<td width="25%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Gain/ (loss) recognized in income</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Three months ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Six months ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000; font-size: 10pt">Derivatives not designated as hedging instrument</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign exchange contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">0   </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td align="right">$</td>
<td align="right">4   </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the six months ended June 30, 2010, NYSE Euronext had euro/U.S. dollar, sterling/U.S. dollar
and sterling/euro foreign exchange contracts in place with tenors less than 4 months in order to
hedge various financial positions. Certain contracts were designated as hedging instruments under
the Derivatives and Hedging Topic. As of June 30, 2010, NYSE Euronext had £215 million
($324 million) sterling/U.S. dollar contracts outstanding with a negative fair value of $2 million,
£120 million ($180 million) sterling/euro contracts outstanding with a negative fair value of $2
million and €130 million ($161 million) euro/U.S. dollar contracts outstanding with a positive fair
value of $1 million. These instruments mature between July 2010 and September 2010. For the three
and six months ended June 30, 2010, the cumulative net gain / (loss) recognized under foreign
exchange contracts in “Other income” in the condensed consolidated statements of operations
amounted to $0 million and $4 million, respectively, and the cumulative net loss recognized under
foreign exchange contracts in “Other comprehensive income” in the equity amounted to $3 million
loss for both periods.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For the six months ended June 30, 2010, NYSE Euronext had no derivative instruments in fair value
hedging relationship and cash flow hedging relationship.
</div>
</div>
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This element can be used to disclose the entity's entire derivative instruments and hedging activities disclosure as a single block of text. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising there from, and the amounts of and methodologies and assumptions used in determining the amounts of such items.
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 45
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44
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