Good morning, ladies and gentlemen. The 2015 Annual Meeting of the Stockholders of NASDAQ OMX Group is hereby convened and called to order. My name is Borje Ekholm. I'm the Chairman of NASDAQ Board and the Chairman of this meeting. On behalf of the Board of Directors of NASDAQ, welcome to this annual meeting of stockholders.
I'm pleased to introduce to you the individuals at the head table. We have Bob Greifelt, Chief Executive Officer. We have Lee Schaevel, Chief Financial Officer and Executive Vice President of Corporate Strategy. We have Ed Knight, Executive Vice President, General Counsel and Chief Regulatory Officer and we have John Connolly, Senior Vice President and Corporate Secretary. Members of the NASDAQ Board and Executive Management are also in attendance at this meeting.
Before we continue with our program, I want to provide a few remarks about the good progress Nasdaq continues to make. Last year, Nasdaq delivered record net revenues and non GAAP income, driven by strong organic growth and strong execution across all business segments. Investing in R and D and innovation is at the top of many company agendas today, so also for NASDAQ. One good example of NASDAQ's commitment to innovation is the NASDAQ Private Market, NPM. Launched in 2014, this initiative provides a range of capital management solutions for private companies.
Another example is that in 2014, NASDAQ partnered with the industry players and laid the groundwork for its new energy futures market, NFX, which will launch later this year. Investments in organic growth often hurt short term profitability, and not all initiatives will succeed, of course. But we believe that these are attractive investments in long term profitable growth of our business. In addition to pursuing organic opportunities, NASDAQ worked hard on integrating 2 key acquisitions. In order to make e Speed more competitive, NASDAQ has enhanced the product and upgraded the technology.
We believe that we are now well positioned when the volume in the treasury market starts to pick up. Similarly, the Corporate Solutions offers a full product suite of IR, PR and multimedia products for our customers. Upgraded platforms are scheduled for launch later this year. Talent is also an essential part of Nasdaq. And you have all noted that last year, Nasdaq modified the leadership structure by creating a new precedent roles for Hans Ole Jocumsen and for Adena Friedman.
At the end of the day, our fundamental mission is to create value for our shareholders. You see it, for example, in the disciplined approach to capital management, in the investments Nasdaq is making in R and D and future innovation and in the way it work with enterprise risk control. And finally, the reason we are here today is engagement with you, our stockholders. We feel welcome or we welcome your perspectives, and we appreciate the feedback we received. We continue to consider you to be a valuable part of this company and of our future.
Now to move this stockholder meeting forward, I have already introduced individuals up here, But also present are representatives of Broadridge Financial Solutions, the Inspector of Elections and executives of Ernst and Young better check what it says here. And the executives of Ernst and Young and the Corporate Secretary have certified that this meeting are now that the stockholders are eligible to vote at this meeting. So now we will continue with the meeting formalities. I will turn over to Ed Knight to make the report of the legal counsel. Ed?
Yes. Thank you,
Mr. Chairman. Everyone formalities as our Chairman indicated. 1, I present proof by affidavit that notice of the meeting has been duly given and that a notice of Internet availability of proxy materials has been made on March 27 to every stockholder of record as of March 10. And as of March 10, there were 169,000,000, 180 8,070 shares of NASDAQ common stock outstanding, of course subject to the voting limitation in our certificate of incorporation that generally prohibits a holder from voting in excess of 5% of the total voting power of NASDAQ.
I also report that the Board of Directors has appointed Broadridge Financial Solutions to act as of Election has filed with me an oath of Inspector and a report of Inspector that Mr. Chairman or Quorum is present at this meeting.
Thank you, Mr. Knight. So there being a quorum present, we will proceed with the business of the Annual Meeting. As you entered the room, you should have received an agenda and a set of meeting rules, which will govern the meeting. As the agenda notes, there are 5 matters for consideration by the stockholders.
No other business will be presented at this meeting, although time has been set aside for a question and answer session at the end. At an appropriate time, those stockholders who wish to address the meeting will be provided an opportunity to speak and will be recognized by the Chairman. If there are any stockholders or proxy holders present who have completed proxies and have not delivered them, please do so at this time. Stockholders may deliver their proxies to the table marked inspector of election. So with that, I'd like to call upon Bob Greifelt to provide a few remarks.
Thank you, Mr. Chairman. It's certainly my great pleasure to be here. And I think it's especially pleasing to be here in our newly renovated market site, which we're putting to good use for obviously ourselves and for others. As CEO of NASDAQ, a lot will cross my desk in a given period of time.
And I think the challenge you really have is to stick to your game plan and knowing what will move the business forward with the greatest effect. To that end, it's my belief that over the years, we have become very proficient here at NASDAQ in honing in on what matters most and on executing our game plan very well. In addition to our financial results and perhaps more importantly, we place a premium on our relative competitive position in the marketplaces in which we serve and the level of value we deliver for our customers. The good news is that over the past year, the vast majority of our businesses are in a better competitive position today than a year ago. That is which we are most proud.
In addition, the financial results follow. In 2014, we again delivered record financial performance with net revenues reaching just over $2,000,000,000 a 9.1% increase over the previous year. In addition, we pursued a very disciplined capital management program, right
Lee? Yes.
We returned $276,000,000 in value to our shareholders, comprised of $178,000,000 in repurchase stock and $98,000,000 in paid dividends. We now are more diverse as a business than ever before and this gives us a great advantage where we can operate really in a complementary way and allows us to leverage a wide variety of opportunities. As an example, we saw the best IPO market in over a decade in 2014 and we capitalized on that with a 60% win rate of all IPOs in the U. S. In all, we welcome 189 total IPOs, which raised over $22,000,000,000 a truly impressive performance.
We also never stop looking at how we can better serve the companies that list our markets, whether it's enhancements through our IPO cross process or renovating the market site we're sitting here today. Our clients are the first among equals and our value proposition continues to resonate with them. This year, the IPO market promises to be equally as robust. And I think today, in particular, we have a number of IPOs scheduled. We are off to a good start.
In 2019 in 2014, our customer focus and ability to lever our technology enabled us to capitalize on improving volume in the markets. A key driver in this was our successful expansion of the functionally important areas in our trading platforms. This contributed to market share increases and a 17% higher net cash equity revenue during the year. I do remember the time when people were concerned that cash equities capture would go to 0 and it's great to see it increasing. Equally impressive is the fact that our U.
S. Derivatives business finished the year with a leading market share in both equity derivatives and ETP options and this was for the 5th year in a row, again very impressive. We also continue to invest in technology and platforms that will drive opportunities for both us and our customers. E Speed, our fixed income platform for U. S.
Treasuries is one example. In 2014, we embarked on an aggressive product expansion and we launched new products such as electronic T Bills and short duration bond notes. We feel very good about these product enhancements we have in our pipeline to date and our ability to grow this platform in the future. As I mentioned previously, one of the benefits of our overall model is that we are diverse and this diversity will drive opportunity. In 2014, we made equally strong progress across our non transaction based businesses, which helped deliver on our success.
In our market technology business, for example, we have the ability to lever our scale and expertise to expand our customers' capability more quickly and efficiently. Our Market Technology segment grew by 5% over the year and actually 10% if you exclude FX headwinds. We expanded key partnerships with clients. We're most proud of that aspect of the business. When you look at our relationships that we expanded with the Shanghai Futures Exchange, the Philippines Stock Exchange and the Japan Exchange Group, JPX, truly remarkable.
We also ended the year with a record order backlog of $704,000,000 great progress. In our Corporate Solutions, by making operational improvements and enhancements to our product and service offerings. In this regard, our IR next gen platform initiative has been the core focus and we are getting ready to release the beta version later this year to our customers. And so far, the feedback has truly been impressive. It's exciting for us and we're confident that NextGen and the other enhancements we are making across our product portfolio will drive new opportunities for us.
Our Information Services business is one of the foundational businesses at NASDAQ. It encompasses both data and indices. In 2004, our index business grew revenue by 22%. We expanded the product offering and increased the products license by 12%. Our recent acquisition of Dorsey Wright and Associates, which is performing well above expectations, will enable us to further develop and grow this cornerstone business.
Listening to our clients and making sure we are focused on their activities is central to what we do. And one of the ways we facilitate this endeavor is through our research and development program, which internally we call G. I. F. T.
One of the more important efforts we launched in 2014 was NASDAQ Private Market. Our offerings help private companies address their liquidity needs and identify and manage relationships with their shareholders. There are now more than 60 companies using NPM products. It's the early days, but we consider this one of the more innovative undertakings at Nasdaq today and certainly indicative of our mindset to make sure we're adding value in the marketplace. Bringing greater efficiency and competitions to markets has always been something that's a sweet spot for us.
To this end, we continue to invest in the opportunities that we believe will be successful and leverage our core capabilities. Last year, we continued to make progress with Enelx, our interest rate derivatives platform based in London. We made significant efficiency improvements and are also excited by the progress we are making with leading industry participants to become true partners in this venture with us. Another example of this commitment to investing in initiatives that drive value for our customers and shareholders is NFX. While we laid much of the groundwork in 2014 for NFX, we recently announced that we'll launch this market later this year pending regulatory approval.
This is an innovative response in a market that has been dominated by 2 leading incumbents. We believe that a horizontal and more open clearing model coupled with our technology will bring much needed capital efficiencies to market participants. We certainly feel good in our ability to succeed. As you can see by the few examples I highlighted here today, 2014 was a tremendous year for this franchise. Our ambition is to better serve our clients and that has never been greater.
The new brand we introduced last year showcases our client centric focus around the theme of ambition. Perhaps what's most interesting to me about 2014 is that we formed new starting points, new baselines for this organization to grow from. And based on the performance over the last year, I have every confidence in our management team, the 3,800 employees who work with us and the ability to continue to deliver meaningful growth and returns for our shareholders. I appreciate your time and I do look forward to taking your questions.
Thank you, Bob. With that, we will now proceed with the 5 proposals described in the proxy statement. Proposal 1 is to elect the 11 directors for 1 year term. The names and bios of the 11 nominees are detailed in the proxy. Under proposal 2, stockholders are requested to approve the company's executive compensation on an advisory basis.
Proposal number 3, the stockholders are requested to ratify the appointment of Ernst and Young as NASDAQ's independent registered public accounting firm for the fiscal year ending December 31, 2015. And in proposal number 4, it is to amend and restate the company's executive incentive plan. Proposal number 5 is to consider the stockholder proposal entitled Right to Act by Written Consent. And here I will invite Mr. Kenneth Steiner of Great Neck New York or his representative to present a stockholder proposal within the 3 minute time frame set forth in the meeting rules.
So please, Mr. Steiner, you see here.
So I'll invite his representative if he or she is present to make that proposal. The proposal 5 is contained in the proxy material. Anyone has any questions, we'd be happy to answer them on behalf of Mr. Steiner and Mr. Chabat.
So it seems like we are set to move forward. Okay. We will then proceed to vote on these matters. Stockholders who wish to vote in person should now take a ballot. It seems like there are no hands up or no one's missing one.
So it is now 9.21 here in New York. We will open the polls, and they will remain open for, I suggest, a minute. Last year, we took 5 minutes and that felt like an eternity. A lot of activity. We'll be happy to find out.
It's gone 40 seconds now. Just 20 remaining. So the polls are about to close. If there are any stockholders who have not turned in a ballot and wish to do so at this time, please raise your hand, so we can come and pick it up. I don't see any hands coming up.
The time is now 9:22 a. M. And the polls are closed. No further voting shall be permitted. So with that, we can move into question and answer sessions.
And we will take a few questions, if there are any. Please raise your hand and wait to be recognized. The microphone attendants will assist with the use of the microphones. Remarks should be pertinent and as brief as possible and not more than 3 minutes, please. Upon being recognized, please state your full name, firm or affiliation, city and country and the subject you wish to discuss.
So let's see if there are any questions.
Chris Lafayette with the Clark Estates. Question on capital allocation. Acquisitions have always been a big component of your capital allocation. I was wondering if you guys could speak a little bit to past acquisitions and what you've learned from them and how they impact your thinking on future acquisitions. You've done acquisitions in all your different segments.
Has history led you to consider certain segments as better opportunities for future acquisitions? And maybe you could just speak a little bit about the future and thoughts on acquisitions.
So I'll start and Lee you can chime in. So one, with respect to acquisitions, we have a couple of disciplines, some financial, some non financial. So the first is we have to make sure that the acquired company is able to lever the mothership in some fundamental way. And that really keeps us focused in terms of what's core and how we can grow this business in a logical fashion. The second is we believe it has to provide a return, not just in the absolute sense, but in a time sense.
We need to get the return sooner, because anytime you do an acquisition, you are trying to model the future. And the one thing we know for sure, the future will always be different than we have in our model. So to the extent you're saying I'm going to get the return within 12 months, then you've got a higher probability of getting the next 12 months right with respect to what you think will happen versus if you're saying 18 months, 24 months, just 36 months is almost impossible. The world can change so many ways. So we use that as 2 leading guideposts to what we want to do.
And we've always been cynical with respect to acquisitions and revenue growth and revenue synergies. Expense synergies, we feel pretty comfortable that we can narrow in on that pretty quickly. But the revenue side is more art than science.
So what I would add to that is from an overall capital management standpoint being a business that generates substantial capital, we have a return on invested capital discipline for all uses of capital. And so on a regular basis, we review the allocation between internal investments, as Bob has described in our research and development program, external uses of capital, whether it's mergers and acquisitions or share repurchases and we evaluate the potential returns to help guide our decision making with the objective of generating the highest possible return. And beyond that, we then monitor each of our acquisitions on an ongoing basis and report to the Board on the performance of those to determine how they're performing and what steps we can take in order to optimize the returns. So it is part of our overall capital management process.
And I'll just finish on one note. So we mentioned obviously acquisitions, but when you look at our strategies, it's really multipronged, right? So we've been an aggressive buyer of our shares over the last number of years. You obviously saw that we increased our dividend by 66%. Also we've been an aggressive We're able to we're able to basically serve multiple masters, acquiring, investing and returning.
And we're proud of what we've done.
Thank you. Let's see if there are some more questions. Okay. Then we move on in our agenda, and I will call upon Beth Van Der Beek to announce the preliminary results at this point in time.
Please. Mr. Chairman, the preliminary results of the shareholder vote indicate that all the company's nominees as Director were elected to another term, that proposals 2 through 4 were approved, and proposal 5 was not approved.
Thank you. This concludes the official business portion of our meeting. I want to thank everyone for attending today's meeting and for the interest you have shown in the affairs of Nasdaq. Since there is nothing further to come before this meeting, I will declare the meeting adjourned as of ninetwenty 7. Thank you.