Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this Quarterly Report on Form 10-Q, or Quarterly Report, and unless otherwise indicated, the terms “Intercontinental Exchange,” “ICE,” “we,” “us,” “our,” “our company” and “our business” refer to Intercontinental Exchange, Inc., together with its consolidated subsidiaries. All references to “options” or “options contracts” in the context of our futures products refer to options on futures contracts. Solely for convenience, references in this Quarterly Report to any trademarks, service marks and trade names owned by ICE are listed without the ®, ™ and © symbols, but we will assert, to the fullest extent under applicable law, our rights to these trademarks, service marks and trade names.

We also include references to third-party trademarks, trade names and service marks in this Quarterly Report. Except as otherwise expressly noted, our use or display of any such trademarks, trade names or service marks is not an endorsement or sponsorship and does not indicate any relationship between us and the parties that own such marks and names.

The following discussion should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Quarterly Report. Due to rounding, figures in tables may not sum exactly.

Forward-Looking Statements

This Quarterly Report, including the sections entitled “Notes to Consolidated Financial Statements,” “Legal Proceedings” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact may be forward-looking statements.

These forward-looking statements relate to future events or our future financial performance and are based on our present beliefs and assumptions as well as the information currently available to us. They involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance, cash flows, financial position or achievements to differ materially from those expressed or implied by these statements.

Forward-looking statements may be introduced by or contain terminology such as “may,” “will,” “should,” “could,” “would,” “targets,” “goal,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or the antonyms of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, cash flows, financial position or achievements. Accordingly, we caution you not to place undue reliance on any forward-looking statements we may make.

Factors that may affect our performance and the accuracy of any forward-looking statements include, but are not limited to, those listed below:

conditions in global financial markets, domestic and international economic and social conditions, inflation, political uncertainty and discord, geopolitical events or conflicts, international trade policies and sanctions laws;
the impact of the introduction of or any changes in laws, regulations, rules or government policies with respect to financial markets, climate change, increased regulatory scrutiny or enforcement actions and our ability to comply with these requirements;
volatility in commodity prices and equity prices, and price volatility of financial benchmarks and instruments such as interest rates, credit spreads, equity indices, foreign exchange rates, and mortgage origination trends;
the impact of climate change and the transition to renewable energy and a net zero economy;
the business environment in which we operate and trends in our industry, including trading volumes, prevalence of clearing, demand for data services, mortgage lending activity, fees, changing regulations, competition and consolidation;
our ability to minimize the risks associated with operating clearing houses in multiple jurisdictions;
our exchanges’ and clearing houses' compliance with their respective regulatory and oversight responsibilities;
the resilience of our electronic platforms and soundness of our business continuity and disaster recovery plans;
our ability to execute our growth strategy, identify and effectively pursue, implement and integrate acquisitions and strategic alliances and realize the synergies and benefits of such transactions within the expected time frame;
the performance and reliability of our trading, clearing and mortgage technologies and those of third-party service providers;
our ability to keep pace with technological developments and client preferences;
our ability to ensure that the technology we utilize is not vulnerable to cyberattacks, hacking and other cybersecurity risks or other disruptive events or to minimize the impact of any such events;
our ability to keep information and data relating to the customers of the users of the software and services provided by our ICE Mortgage Technology business confidential;
the impacts of the COVID-19 pandemic on our business, results of operations and financial condition as well as the broader business environment;
our ability to identify trends and adjust our business to benefit from such trends, including trends in the U.S. mortgage industry such as inflation rates, interest rates, new home purchases, refinancing activity, and home builder and buyer sentiment, among others;
our ability to evolve our benchmarks and indices in a manner that maintains or enhances their reliability and relevance;
the accuracy of our cost and other financial estimates and our belief that cash flows from operations will be sufficient to service our debt and to fund our operational and capital expenditure needs;
our ability to incur additional debt and pay off our existing debt in a timely manner;
our ability to maintain existing market participants and data and mortgage technology customers, and to attract new ones;
our ability to offer additional products and services, leverage our risk management capabilities and enhance our technology in a timely and cost-effective fashion;
our ability to attract, develop and retain key talent;
our ability to protect our intellectual property rights and to operate our business without violating the intellectual property rights of others;
potential adverse results of threatened or pending litigation and regulatory actions and proceedings; and
our ability to realize the expected benefits of our acquisitions and our investments.

These risks and other factors include, among others, those set forth in Part 1, Item 1(A) under the caption “Risk Factors” in our 2021 Form 10-K, as filed with the SEC on February 3, 2022. Due to the uncertain nature of these factors, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any of these statements to reflect events or circumstances occurring after the date of this Quarterly Report. New factors may emerge and it is not possible to predict all factors that may affect our business and prospects.

Overview

We are a provider of market infrastructure, data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities. Our products, which span major asset classes including futures, equities, fixed income and U.S. residential mortgages, provide our customers with access to mission critical tools that are designed to increase asset class transparency and workflow efficiency. While we report our results in three reportable business segments, we operate as one business, leveraging the collective expertise, particularly in data services and technology, that exists across our platforms to inform and enhance our operations.

In our Exchanges segment, we operate regulated marketplaces for the listing, trading and clearing of a broad array of derivatives contracts and financial securities.
In our Fixed Income and Data Services segment, we provide fixed income pricing, reference data, indices, analytics and execution services as well as global CDS clearing and multi-asset class data delivery solutions.
In our Mortgage Technology segment, we provide an end-to-end technology platform that offers customers comprehensive, digital workflow tools that aim to address the inefficiencies that exist in the U.S. residential mortgage market, from application through closing and the secondary market.

Recent Developments

Acquisition of Black Knight, Inc.

On May 4, 2022, we announced that we have entered into a definitive agreement to acquire Black Knight, Inc., or Black Knight, a software, data and analytics company that serves the housing finance continuum, including real estate data, mortgage lending and servicing, as well as the secondary markets. The transaction is valued at approximately $13.1 billion, or $85 per share. Purchase consideration will consist of 80% cash and 20% of our stock. This transaction builds on

our position as a provider of end-to-end electronic workflow solutions for the rapidly evolving U.S. residential mortgage industry.

Black Knight, based in Jacksonville, Florida, has approximately 6,500 employees. The company provides a comprehensive and integrated ecosystem of software, data and analytics solutions serving the real estate and housing finance markets. The Black Knight ecosystem adds value for clients of all sizes across the mortgage and real estate lifecycles by helping organizations lower costs, increase efficiencies, grow their businesses, and reduce risk.

The transaction is expected to close in the first half of 2023, following the receipt of regulatory approvals and the satisfaction of customary closing conditions.

Conflict in Ukraine

Our results of operations are affected by global economic conditions, including macroeconomic conditions and geopolitical events or conflicts. The invasion of Ukraine by Russia and the sanctions and other measures being imposed in response to this conflict have increased the level of economic and political uncertainty. The crisis in Russia, Belarus and Ukraine began in February 2022 and continues as of the date of this Quarterly Report. We have suspended or are in the process of suspending all services in Russia. From an operational perspective, our businesses, including our exchanges, clearing houses, listings venues, data services businesses and mortgage platforms, have not suffered a material negative impact as a result of these events in Ukraine and the surrounding region. We continue to monitor the uncertainty surrounding the extent and duration of this ongoing conflict and the impact that it may have on the global economy and on our business.

Regulation

Our activities and the markets in which we operate are subject to regulations that impact us as well as our customers, and, in turn, meaningfully influence our activities, the manner in which we operate and our strategy. We are primarily subject to the jurisdiction of regulatory agencies in the U.S., U.K., EU, Canada, Singapore and Abu Dhabi. Failure to satisfy regulatory requirements can or may give rise to sanctions by the applicable regulator.

Global policy makers have undertaken reviews of their existing legal framework governing financial markets in connection with regulatory reform, and have either passed new laws and regulations, or are in the process of debating and/or enacting new laws and regulations that apply to our business and to our customers’ businesses. Legislative and regulatory actions may impact the way in which we or our customers conduct business and may create uncertainty, which could affect trading volumes or demand for market data. See Part 1, Item 1 “Business - Regulation” and Part 1, Item 1(A) "Risk Factors" included in our 2021 Form 10-K for a discussion of the primary regulations applicable to our business and certain risks associated with those regulations.

Domestic and foreign policy makers continue to review their legal frameworks governing financial markets, and periodically change the laws and regulations that apply to our business and to our customers’ businesses. Our key areas of focus on these evolving efforts are:

Regulatory structure applicable to non-EU clearing houses.** On January 1, 2020, the European Markets Infrastructure Regulation, or EMIR 2.2, became effective, which revises the EU's current regulatory and supervisory structure for EU and non-EU clearing houses. The European Securities and Markets Authority, or ESMA, has recognized ICE Clear Europe as a third-country central counterparty, or CCP, under EMIR and determined that it is a Tier 2 CCP on the basis that it is systemically important to the financial stability of the EU or one or more of its Member States. ESMA has recognized all other ICE clearing houses as third-country CCPs and determined that they are Tier 1 CCPs on the basis that they are not systemically-important to the financial stability of the EU or one or more of its Member States. ESMA's continuing implementation of these delegated regulations could still impact one or more of our other non-EU clearing houses. In February 2022, the European Commission extended the temporary equivalence for U.K. CCPs until June 2025. In March 2022, ESMA extended the ICE Clear Europe recognition decision and tiering determination until June 2025 and confirmed the recognition and tiering determination of all other ICE clearing houses.
Benchmarks Regulation.** The Financial Conduct Authority, or FCA, is using its legal powers under the U.K. Benchmarks Regulation, or U.K. BMR, to require ICE Benchmark Administration Limited, or IBA, as the administrator of the London Interbank Offered Rate, or LIBOR, to publish certain Sterling and Japanese Yen LIBOR settings under a changed "synthetic" methodology until the end of 2022. Any settings published under a “synthetic” methodology may no longer be representative of the underlying market or economic reality the setting is intended to measure as those terms are used in the U.K. BMR. The FCA confirmed that it expects that certain U.S. Dollar LIBOR settings will continue to be published on a representative basis until the end of June 2023. The FCA will continue to consider requiring IBA to publish certain U.S. Dollar LIBOR settings beyond June 30, 2023 under a changed “synthetic”

methodology. Usage of the synthetic LIBOR and U.S. Dollar LIBOR settings may be restricted or prohibited in certain circumstances under applicable law.

The European Commission is using its powers under the EU Benchmarks Regulation, or EU BMR, to designate replacement benchmarks for certain Swiss franc LIBOR settings and the Euro Overnight Index Average, or EONIA, which cover all references to the relevant benchmark. The European Commission has also announced that it plans to designate replacement benchmarks for certain Sterling and Japanese Yen LIBOR settings. The transition period for the use of benchmarks provided by third-country administrators has been extended until at least December 31, 2023.

In March 2022, President Biden signed into law federal LIBOR legislation, referred to as the LIBOR Act, designed to reduce uncertainty and economic impacts of the permanent cessation of LIBOR for specified contracts, securities and other agreements that are economically linked to LIBOR. The LIBOR Act provides a statutory framework to replace U.S. Dollar LIBOR with a benchmark rate based on the Secured Overnight Financing Rate, or SOFR, for contracts governed by U.S. law that have no fallbacks or fallbacks that would require the use of a poll or LIBOR-based rate.

Policy intervention to address high energy prices.** In March 2022, EU leaders agreed to reduce the EU’s dependency on Russian gas, oil and coal imports and invited the European Commission to put forward legislative proposals to ensure security of supply and affordable energy prices. Various options for regulatory intervention are currently being explored by the European Commission, including allowing EU countries to jointly buy strategic reserves of gas and the introduction of a price limit for wholesale gas markets. The content of the proposals and their potential impact on the functioning of European energy wholesale markets remain uncertain at this time.
CCP Resolution.** In March 2022, the U.K. Treasury published a feedback statement and status update on its plans to enhance the U.K.’s regime for resolution of CCPs in the event that they fail. This is intended to expand the prior regime which was not in line with U.K. Financial Stability Board guidance issued subsequently. Many of the parameters of the new regime have yet to be finalized and will be subject to a consultation process by the Bank of England which will be the resolution authority for CCPs in the U.K. However, they will include increased CCP contributions (known as "second skin in the game") to the default fund.

Consolidated Financial Highlights

The following summarizes our results and significant changes in our consolidated financial performance for the periods presented (dollars in millions, except per share amounts).

(1) The adjusted figures exclude items that are not reflective of our ongoing core operations and business performance. Adjusted net income attributable to ICE is presented net of taxes. These adjusted numbers are not calculated in accordance with U.S. GAAP. See “- Non-GAAP Financial Measures” below.


	Three Months Ended March 31,
	2022			2021			Change
Revenues, less transaction-based expenses	$	1,899		$	1,797		6 %
Recurring revenues(1)	$	921		$	845		9 %
Transaction revenues, net(1)	$	978		$	952		3 %
Operating expenses	$	907		$	905		— %
Adjusted operating expenses(2)	$	746		$	729		2 %
Operating income	$	992		$	892		11 %
Adjusted operating income(2)	$	1,153		$	1,068		8%
Operating margin	52		%	50		%	2 pts
Adjusted operating margin(2)	61		%	59		%	2 pt
Other income/(expense), net	$	(160)		$	(59)		171 %
Income tax expense	$	165		$	183		(10) %
Effective tax rate	20		%	22		%	(2 pts)
Net income attributable to ICE	$	657		$	646		2 %
Adjusted net income attributable to ICE(2)	$	804		$	758		6 %
Diluted earnings per share attributable to ICE common stockholders	$	1.16		$	1.14		2 %
Adjusted diluted earnings per share attributable to ICE common stockholders(2)	$	1.43		$	1.34		7 %
Cash flows from operating activities	$	756		$	734		3 %

(1) We define recurring revenues as the portion of our revenues that are generally predictable, stable, and can be expected to occur at regular intervals in the future with a relatively high degree of certainty and visibility. We define transaction revenues as those associated with a more specific point-in-time service, such as a trade execution or a mortgage registration.

(2) The adjusted figures exclude items that are not reflective of our ongoing core operations and business performance. Adjusted net income attributable to ICE and adjusted diluted earnings per share attributable to ICE common stockholders are presented net of taxes. These adjusted numbers are not calculated in accordance with U.S. GAAP. See “- Non-GAAP Financial Measures” below.

Revenues, less transaction-based expenses, increased $102 million for the three months ended March 31, 2022, from the comparable period in 2021. See "-Exchanges Segment", "Fixed Income and Data Services Segment" and "Mortgage Technology Segment" below for a discussion of the significant changes in our revenues. The increase in revenues during the three months ended March 31, 2022 includes $14 million in unfavorable foreign exchange effects arising from fluctuations in the U.S. dollar from the comparable period in 2021. See Item 3 "Quantitative and Qualitative Disclosures About Market Risk-Foreign Currency Exchange Rate Risk" below for additional information on the impact of currency fluctuations.
Operating expenses increased $2 million for the three months ended March 31, 2022, from the comparable period in 2021. See "-Consolidated Operating Expenses" below for a discussion of the significant changes in our operating expenses. The increase in operating expenses during the three months ended March 31, 2022 includes $3 million in favorable foreign exchange effects arising from fluctuations in the U.S. dollar from the comparable period in 2021. See Item 3 "Quantitative and Qualitative Disclosures About Market Risk-Foreign Currency Exchange Rate Risk" below for additional information on the impact of currency fluctuations.

Variability in Quarterly Comparisons

Our business environment has been characterized by:

globalization of marketplaces, customers and competitors;
growing customer demand for workflow efficiency and automation;
commodity, interest rate and financial markets uncertainty;
growing demand for data to inform customers' risk management and investment decisions;
evolving, increasing and disparate regulation across multiple jurisdictions;
price volatility increasing customers' demand for risk management services;
increasing focus on capital and cost efficiencies;
customers' preference to manage risk in markets demonstrating the greatest depth of liquidity and product diversity;
the evolution of existing products and new product innovation to serve emerging customer needs and changing industry agreements;
rising demand for speed, data, data capacity and connectivity by market participants, necessitating increased investment in technology; and
consolidation and increasing competition among global markets for trading, clearing and listings.

For additional information regarding the factors that affect our results of operations, see Item 1(A) “Risk Factors” included in our 2021 Form 10-K, and Part II, Item 1(A) "Risk Factors" below.

Segment Results

Our business is conducted through three reportable business segments, comprised of the following:

In our Exchanges segment, we operate regulated marketplaces for the listing, trading and clearing of a broad array of derivatives contracts and financial securities;
In our Fixed Income and Data Services segment, we provide fixed income pricing, reference data, indices, analytics and execution services as well as global CDS clearing and multi-asset class data delivery solutions; and
In our Mortgage Technology segment, we provide an end-to-end technology platform that offers customers comprehensive, digital workflow tools that aim to address the inefficiencies that exist in the U.S. residential mortgage market, from application through closing and the secondary market.

While revenues are recorded specifically in the segment in which they are earned or to which they relate, a significant portion of our operating expenses are not solely related to a specific segment because the expenses serve functions that are necessary for the operation of more than one segment. We directly allocate expenses when reasonably possible to do so. Otherwise, we use a pro-rata revenue approach as the allocation method for the expenses that do not relate solely to one segment and serve functions that are necessary for the operation of all segments. Our segments do not engage in intersegment transactions.

Exchanges Segment

The following presents selected statements of income data for our Exchanges segment (dollars in millions):

(1) The adjusted numbers in the charts above are calculated by excluding items that are not reflective of our cash operations and core business performance. As a result, these adjusted numbers are not calculated in accordance with U.S. GAAP. See “- Non-GAAP Financial Measures” below.


	Three Months Ended March 31,
	2022		2021		Change
Revenues:
Energy futures and options	$	353	$	310	14	%
Agricultural and metals futures and options	61		59		3
Financial futures and options	130		105		24
Futures and options	544		474		15
Cash equities and equity options	659		734		(10)
OTC and other	97		77		25
Transaction and clearing, net	1,300		1,285		1
Data and connectivity services	214		207		4
Listings	129		114		13
Revenues	1,643		1,606		2
Transaction-based expenses(1)	560		632		(11)
Revenues, less transaction-based expenses	1,083		974		11
Other operating expenses	240		253		(5)
Depreciation and amortization	58		63		(7)
Acquisition-related transaction and integration costs	1		5		(84)
Operating expenses	299		321		(7)
Operating income	$	784	$	653	20	%

Recurring revenues	$	343	$	321	7	%
Transaction revenues, net	$	740	$	653	13	%

(1)Transaction-based expenses are largely attributable to our cash equities and options business.

Exchanges Revenues

Our Exchanges segment includes transaction and clearing revenues from our futures and NYSE exchanges, related data and connectivity services, and our listings business. Transaction and clearing revenues consist of fees collected from derivatives, cash equities and equity options trading and derivatives clearing, and are reported on a net basis, except for the NYSE transaction-based expenses discussed below. Rates per-contract, or RPC, are driven by the number of contracts or securities traded and the fees charged per contract, net of certain rebates. Our per-contract transaction and clearing revenues will depend upon many factors, including, but not limited to, market conditions, transaction and clearing volume, product mix, pricing, applicable revenue sharing and market making agreements, and new product introductions.

Transaction and clearing revenues are generally assessed on a per-contract basis and revenues and profitability fluctuate with changes in contract volume and product mix. We consider data and connectivity services revenues and listings revenues to be recurring revenues. Our data and connectivity services revenues are recurring subscription fees related to the various data and connectivity services that we provide which are directly attributable to our exchange venues. Our listings revenues are also recurring subscription fees that we earn for the provision of NYSE listings services for public companies and ETFs, and related corporate actions for listed companies.

For the three months ended March 31, 2022 and 2021, 20% and 16%, respectively, of our Exchanges segment revenues, less transaction-based expenses, were billed in pounds sterling or euros. Due to the fluctuations of the pound sterling and euro compared to the U.S. dollar, our Exchanges segment revenues, less transaction-based expenses, were lower by $11 million for the three months ended March 31, 2022, from the comparable period in 2021.

Our exchange transaction and clearing revenues are presented net of rebates. We recorded rebates of $263 million and $274 million for the three months ended March 31, 2022 and 2021, respectively. We offer rebates in certain of our markets primarily to support market liquidity and trading volume by providing qualified participants in those markets a discount to the applicable commission rate. Such rebates are calculated based on volumes traded. The decrease in rebates for the three months ended March 31, 2022 is primarily due to the migration of Sterling futures rebates into the Sterling Overnight Index Average, or SONIA, and a change in the pricing and structure of SONIA products.

Energy Futures and Options: Total energy volume increased 8% and revenues increased 14% for the three months ended March 31, 2022 from the comparable period in 2021.

–Total oil volume was flat for the three months ended March 31, 2022 from the comparable period in 2021, with volumes in both periods driven by price volatility related to various geopolitical events.

**–**Our global natural gas futures and options volume increased 28% for the three months ended March 31, 2022 from the comparable period in 2021, driven by increased price volatility related to geopolitical events, including the conflict in Ukraine in the first quarter of 2022.

**–**Our environmentals and other futures and options volume increased 17% for the three months ended March 31, 2022, from the comparable period in 2021, driven by an increase in the price of carbon and continued demand for market-based mechanisms to price climate risk and help enable greenhouse gas reduction goals.

Agricultural and Metals Futures and Options: Total volume in our agricultural and metals futures and options markets decreased 1% for the three months ended March 31, 2022 from the comparable period in 2021 due to lower sugar volumes, driven by decreased price volatility than in the prior year period. Revenues increased 3% for the three months ended March 31, 2022 from the comparable period in 2021 driven by elevated price volatility in our Coffee and Cocoa markets as a result of weather-related supply and demand dynamics.

**–**Sugar futures and options volumes decreased 6% for the three months ended March 31, 2022, from the comparable period in 2021.

**–**Other agricultural and metal futures and options volume increased 3% for the three months ended March 31, 2022 from the comparable period in 2021.

Financial Futures and Options:** Total volume decreased 4% for the three months ended March 31, 2022 from the comparable period in 2021, and revenues increased 24% for the three months ended March 31, 2022, from the comparable period in 2021 in our financial futures and options markets. The decrease in financials volume and open interest was primarily driven by the transition of the LIBOR-based Sterling contract to the alternative rate-based SONIA contract which is half the notional size of the Sterling contract.

**–**Interest rate futures and options volume decreased 7% for the three months ended March 31, 2022, from the comparable period in 2021, and revenue increased 34% for the three months ended March 31, 2022, from the comparable period in 2021. The decrease in volume is due to the transition of the LIBOR-based Sterling contract to the alternative rate-based SONIA contract which is half the notional size of the Sterling contract. Adjusting for the difference in contract size, interest rate volumes increased 20% driven by interest rate volatility and increased speculation of central bank activity due to inflation concerns. Interest rate futures and options revenues were $82 million and $62 million for the three months ended March 31, 2022 and 2021, respectively.

**–**Other financial futures and options volume, which includes our MSCI®, FTSE® and NYSE FANG+ equity index products, increased 9% for the three months ended March 31, 2022, from the comparable period in 2021. Financial futures and options revenue increased 9% for the three months ended March 31, 2022, from the comparable period in 2021. The three months ended March 31, 2022 benefited from elevated volatility across global markets driven by geopolitical events, central bank activity and inflationary concerns. Other financial futures and options revenues were $48 million and $43 million for the three months ended March 31, 2022 and 2021, respectively.

Cash Equities and Equity Options: Cash equities volume decreased 10% for the three months ended March 31, 2022, from the comparable period in 2021 due to lower total market volumes driven by less retail trading. Cash equities revenues, net of transaction-based expenses, were $73 million and $71 million for the three months ended March 31, 2022 and 2021, respectively. Equity options volume increased 6% for the three months ended March 31, 2022 from the comparable period in 2021 driven by increased market share. Equity options revenues, net of transaction-based expenses, were $26 million and $31 million for the three months ended March 31, 2022 and 2021, respectively.
OTC and Other:** OTC and other transactions include revenues from our OTC energy business and other trade confirmation services, as well as interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of our U.S. securities exchanges, designated market maker service fees, exchange membership fees and agricultural grading and certification fees. Our OTC and other revenues increased 25% for the three months ended March 31, 2022 from the comparable

period in 2021 primarily due to an increase in interest income on clearing margin deposits. Following the October 2021 Bakkt transaction, Bakkt revenues are no longer included within our OTC and other revenues.

Data and Connectivity Services: Our data and connectivity services revenues increased 4% for the three months ended March 31, 2022, from the comparable period in 2021. The increase in revenue was driven by the strong retention rate of existing customers and increased purchases by existing customers.
Listings Revenues: Through NYSE, NYSE American and NYSE Arca, we generate listings revenue related to the provision of listings services for public companies and ETFs, and related corporate actions for listed companies. Listings revenues increased 13% for the three months ended March 31, 2022, from the comparable period in 2021, driven by the full impact of strong equity capital markets activity in 2021. All listings fees are billed upfront and revenues are recognized over time as the identified performance obligations are satisfied.

Selected Operating Data

The following charts and tables present trading activity in our futures and options markets by commodity type based on the total number of contracts traded, as well as futures and options rate per contract (in millions, except for percentages and rate per contract amounts):


Volume and Rate per Contract


	Three Months Ended March 31,
	2022		2021		Change
Number of contracts traded (in millions):
Energy futures and options	222		206		8	%
Agricultural and metals futures and options	26		26		(1)
Financial futures and options	170		177		(4)
Total	418		409		2	%

	Three Months Ended March 31,
	2022		2021		Change
Average daily volume of contracts traded (in thousands):
Energy futures and options	3,580		3,376		6	%
Agricultural and metals futures and options	415		425		(2)
Financial futures and options	2,674		2,832		(6)
Total	6,669		6,633		1	%

	Three Months Ended March 31,
	2022		2021		Change
Rate per contract:
Energy futures and options	$	1.59	$	1.50	6	%
Agricultural and metals futures and options	$	2.38	$	2.28	3	%
Financial futures and options	$	0.75	$	0.58	27	%

Open interest is the aggregate number of contracts (long or short) that clearing members hold either for their own account or on behalf of their clients. Open interest refers to the total number of contracts that are currently “open,” – in other words, contracts that have been entered into but not yet liquidated by either an offsetting trade, exercise, expiration or assignment. Open interest is also a measure of the future activity remaining to be closed out in terms of the number of contracts that members and their clients continue to hold in the particular contract and by the number of contracts held for each contract month listed by the exchange. The following charts and table present our quarter-end open interest for our futures and options contracts (in thousands, except for percentages):


Open Interest


	As of March 31,
	2022	2021	Change
Open interest — in thousands of contracts:
Energy futures and options	43,857	42,177	4	%
Agricultural and metals futures and options	3,873	4,017	(4)
Financial futures and options	25,564	32,341	(21)
Total	73,294	78,535	(7)	%

The following charts and tables present selected cash and equity options trading data. All trading volume below is presented as average net daily trading volume, or ADV, and is single counted:


	Three Months Ended March 31,
	2022		2021		Change
NYSE cash equities (shares in millions):
Total cash handled volume	2,622		2,920		(10)	%
Total cash market share matched	20.0	%	19.5	%	0.5 pts

NYSE equity options (contracts in thousands):
NYSE equity options volume	8,227		7,732		6	%
Total equity options volume	40,027		40,053		—	%
NYSE share of total equity options	20.6	%	19.3	%	1.3 pts

Revenue capture or rate per contract:
Cash equities rate per contract (per 100 shares)	$0.045		$0.040		13	%
Equity options rate per contract	$0.05		$0.07		(23)	%

Handled volume represents the total number of shares of equity securities, ETFs and crossing session activity internally matched on our exchanges or routed to and executed on an external market center. Matched volume represents the total number of shares of equity securities, ETFs and crossing session activity executed on our exchanges.

Transaction-Based Expenses

Our equities and equity options markets pay fees to the SEC pursuant to Section 31 of the Exchange Act. Section 31 fees are recorded on a gross basis as a component of transaction and clearing fee revenue. These Section 31 fees are assessed to recover the government’s costs of supervising and regulating the securities markets and professionals and are subject to change. We, in turn, collect corresponding activity assessment fees from member organizations clearing or settling trades on the equities and options exchanges, and recognize these amounts in our transaction and clearing revenues when invoiced. The activity assessment fees are designed to equal the Section 31 fees. As a result, activity assessment fees and the corresponding Section 31 fees do not have an impact on our net income, although the timing of payment by us will vary from collections. Section 31 fees were $51 million and $125 million for the three months

ended March 31, 2022 and 2021, respectively. The decrease in Section 31 fees was primarily due to a decline in rates, which were revised in February of each year. The fees we collect are included in cash at the time of receipt and we remit the amounts to the SEC semi-annually as required. The total amount is included in accrued liabilities and was $50 million as of March 31, 2022.

We make liquidity payments to cash and options trading customers, as well as routing charges made to other exchanges which are included in transaction-based expenses. We incur routing charges when we do not have the best bid or offer in the market for a security that a customer is trying to buy or sell on one of our securities exchanges. In that case, we route the customer’s order to the external market center that displays the best bid or offer. The external market center charges us a fee per share (denominated in tenths of a cent per share) for routing to its system. We record routing charges on a gross basis as a component of transaction and clearing fee revenue. Cash liquidity payments, routing and clearing fees were $509 million and $507 million for the three months ended March 31, 2022 and 2021, respectively.

Operating Expenses, Operating Income and Operating Margin

The following chart summarizes our Exchanges segment's operating expenses, operating income and operating margin (dollars in millions). See “- Consolidated Operating Expenses” below for a discussion of the significant changes in our operating expenses.


Exchanges Segment:	Three Months Ended March 31,
	2022			2021			Change
Operating expenses	$	299		$	321		(7)	%
Adjusted operating expenses(1)	$	283		$	298		(5)	%
Operating income	$	784		$	653		20	%
Adjusted operating income(1)	$	800		$	676		18	%
Operating margin	72		%	67		%	5 pts
Adjusted operating margin(1)	74		%	69		%	5 pts

(1) The adjusted figures exclude items that are not reflective of our ongoing core operations and business performance. These adjusted numbers are not calculated in accordance with U.S. GAAP. See “- Non-GAAP Financial Measures” below.

Fixed Income and Data Services Segment

The following charts and table present our selected statements of income data for our Fixed Income and Data Services segment (dollars in millions):

(1) The adjusted figures in the charts above are calculated by excluding items that are not reflective of our cash operations and core business performance. As a result, these adjusted numbers are not calculated in accordance with U.S. GAAP. See “- Non-GAAP Financial Measures” below.


	Three Months Ended March 31,
	2022		2021		Change
Revenues:
Fixed income execution	$	15	$	14	9	%
CDS clearing	72		55		32
Fixed income data and analytics	277		264		5
Fixed income and credit	364		333		9
Other data and network services	145		135		7
Revenues	509		468		9
Other operating expenses	264		249		6

Depreciation and amortization	90		86		4

Operating expenses	354		335		6
Operating income	$	155	$	133	17	%

Recurring revenues	$	422	$	399	6	%
Transaction revenues	$	87	$	69	27	%

In the table above, we consider fixed income data and analytics revenues and other data and network services revenues to be recurring revenues.

For the three months ended March 31, 2022 and 2021, 13% and 14%, respectively, of our Fixed Income and Data Services segment revenues were billed in pounds sterling or euros. As the pound sterling or euro exchange rate changes, the U.S. equivalent of revenues denominated in foreign currencies changes accordingly. Due to the fluctuations of the pound sterling and euro compared to the U.S. dollar, our Fixed Income and Data Services revenues were lower by $3 million for the three months ended March 31, 2022, respectively, than the comparable period in 2021.

Fixed Income and Data Services Revenues

Our Fixed Income and Data Services revenues increased 9% for the three months ended March 31, 2022, from the comparable period in 2021, primarily due to growth in our fixed income data and analytics products and our other data and network services.

Fixed Income Execution: Fixed income execution includes revenues from ICE Bonds. Execution fees are reported net of rebates, which were nominal for both the three months ended March 31, 2022 and 2021. Our fixed income execution revenues increased 9% for the three months ended March 31, 2022 from the comparable period in 2021 due to elevated volatility across global markets driven by geopolitical events, central bank activity and inflationary concerns.
CDS Clearing:** CDS clearing revenues increased 32% for the three months ended March 31, 2022 from the comparable period in 2021. The notional value of CDS cleared was $7.7 trillion and $5.0 trillion for the three months ended March 31, 2022 and 2021, respectively. The increase in the notional value of CDS cleared in the first quarter of 2022 was primarily driven by heightened volatility related to geopolitical events and inflationary concerns.
Fixed Income Data and Analytics: Our fixed income data and analytics revenues increased 5% for the three months ended March 31, 2022, from the comparable period in 2021. The increase in revenue was due to strength in our index business and continued growth in our pricing and reference data business driven by the strong retention rate of existing customers, the addition of new customers and increased purchases by existing customers.
Other Data and Network Services: Our other data and network services revenues increased 7% for the three months ended March 31, 2022, from the comparable period in 2021. The increase in revenues was driven primarily by growth in our ICE Global Network offering, coupled with strength in our consolidated feeds and stronger desktop revenues.

Annual Subscription Value, or ASV, represents, at a point in time, the data services revenues, which includes Fixed Income Data and Analytics as well as other data and network services, subscribed for the succeeding 12 months. ASV does not include new sales, contract terminations or price changes that may occur during that 12-month period. However, while it is an indicative forward-looking metric, it does not provide a precise growth forecast of the next 12 months of data services revenues.

As of March 31, 2022, ASV was $1.672 billion, which increased 5.8% compared to the ASV as of March 31, 2021. ASV represents nearly 100% of total data services revenues for this segment. This does not adjust for year-over-year foreign exchange fluctuations.

Operating Expenses, Operating Income and Operating Margin

The following chart summarizes our Fixed Income and Data Services segment's operating expenses, operating income and operating margin (dollars in millions). See “- Consolidated Operating Expenses” below for a discussion of the significant changes in our operating expenses.


Fixed Income and Data Services Segment:	Three Months Ended March 31,
	2022			2021			Change
Operating expenses	$	354		$	335		6	%
Adjusted operating expenses(1)	$	305		$	290		5	%
Operating income	$	155		$	133		17	%
Adjusted operating income(1)	$	204		$	178		14	%
Operating margin	30		%	28		%	2 pts
Adjusted operating margin(1)	40		%	38		%	2 pts

Mortgage Technology Segment

The following charts and table present our selected statements of income data for our Mortgage Technology segment (dollars in millions):


	Three Months Ended March 31,
	2022		2021		Change
Revenues:
Origination technology	203		254		(20)%
Closing solutions	70		70		—
Data and analytics	20		18		6
Other	14		13		13
Revenues	307		355		(13)
Other operating expenses	140		130		7
Acquisition-related transaction and integration costs	8		13		(37)
Depreciation and amortization	106		106		—
Operating expenses	254		249		2
Operating income	$	53	$	106	(49)%

Recurring revenues	$	156	$	125	24%
Transaction revenues	$	151	$	230	(34)%

In the table above, we consider subscription fee and certain other revenues to be recurring revenues. Each revenue classification, above, contains a mix of recurring and transaction revenues, based on the various service offerings described in more detail, below.

Mortgage Technology Revenues

Our mortgage technology revenues are derived from our comprehensive, end-to-end U.S. residential mortgage platform. Our mortgage technology business is intended to enable greater workflow efficiency for customers focused on originating U.S. residential mortgage loans. Mortgage technology revenues decreased $48 million for the three months ended March 31, 2022 from the comparable period in 2021.

Origination technology:** Our origination technology acts as a system of record for the mortgage transaction, automating the gathering, reviewing, and verifying of mortgage-related information and enabling automated enforcement of rules and business practices designed to help ensure that each completed loan transaction is of high quality and adheres to secondary market standards. These revenues are based on recurring Software as a Service, or SaaS, subscription fees, with an additive transaction-based or success-based pricing fee as lenders exceed the number of loans closed that are included with their monthly base subscription.

In addition, the ICE Mortgage Technology network provides originators connectivity to the mortgage supply chain and facilitates the secure exchange of information between our customers and a broad ecosystem of third-party service providers, as well as lenders and investors that are critical to consummating the millions of loan transactions that occur on our origination network each year. Revenue from the ICE Mortgage Technology network is largely transaction-based.

Closing solutions:** Our closing solutions connect key participants, such as lenders, title and settlement agents and individual county recorders, to digitize the closing and recording process. Closing solutions also include revenues from our Mortgage Electronic Registrations Systems, Inc., or MERS database, which provides a system of record for recording and tracking changes and servicing rights and beneficial ownership interests in loans secured by U.S. residential real estate. Revenues from closing solutions are largely transaction-based.
Data and Analytics**: Revenues include those related to ICE Mortgage Technology’s Automation, Intelligence, Quality,

or AIQ, offering which applies machine learning to the entire loan origination process, offering customers greater efficiency by streamlining data collection and validation through our automated document recognition and data extraction capabilities. AIQ revenues can be both recurring and transaction-based in nature. In addition, our data offerings include real-time industry and peer benchmarking tools, which provide originators a granular view into the real-time trends of nearly half the U.S. residential mortgage market. We also provide a Data as a Service, or DaaS, offering through private data clouds for lenders to access their own data and origination information. Revenues related to our data products are largely subscription-based and recurring in nature.

Other:** Other revenues include professional services fees, as well as revenues from ancillary products. Other revenues can be both recurring and transaction-based in nature.

Operating Expenses, Operating Income and Operating Margin

The following chart summarizes our Mortgage Technology segment's operating expenses, operating income and operating margin (dollars in millions). See “- Consolidated Operating Expenses” below for a discussion of the significant changes in our operating expenses.


Mortgage Technology Segment:	Three Months Ended March 31,
	2022			2021			Change*
Operating expenses	$	254		$	249		2%
Adjusted operating expenses(1)	$	158		$	141		11%
Operating income	$	53		$	106		(49)%
Adjusted operating income(1)	$	149		$	214		(30)%
Operating margin	17		%	30		%	(13 pts)
Adjusted operating margin(1)	49		%	60		%	(11 pts)

Consolidated Operating Expenses

The following presents our consolidated operating expenses (dollars in millions):


	Three Months Ended March 31,
	2022		2021		Change
Compensation and benefits	$	359	$	354	2	%
Professional services	34		44		(22)
Acquisition-related transaction and integration costs	9		18		(49)
Technology and communication	175		162		7
Rent and occupancy	21		21		(1)
Selling, general and administrative	55		51		7
Depreciation and amortization	254		255		—
Total operating expenses	$	907	$	905	—	%

The majority of our operating expenses do not vary directly with changes in our volume and revenues, except for certain technology and communication expenses, including data acquisition costs, licensing and other fee-related arrangements and a portion of our compensation expense that is tied directly to our data sales or overall financial performance.

We expect our operating expenses to increase in absolute terms in future periods in connection with the growth of our business, and to vary from year-to-year based on the type and level of our acquisitions, integration of acquisitions and other investments.

For both the three months ended March 31, 2022 and 2021, 10% of our operating expenses were billed in pounds sterling or euros. Due to fluctuations in the U.S. dollar compared to the pound sterling and euro, our consolidated operating expenses were $3 million lower during the three months ended March 31, 2022, than in the comparable period in 2021.

See Item 3 “— Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Exchange Rate Risk” below for additional information.

Compensation and Benefits Expenses

Compensation and benefits expense is our most significant operating expense and includes non-capitalized employee wages, bonuses, non-cash or stock compensation, certain severance costs, benefits and employer taxes. The bonus component of our compensation and benefits expense is based on both our financial performance and individual employee performance. The performance-based restricted stock compensation expense is also based on our financial performance. Therefore, our compensation and benefits expense will vary year-to-year based on our financial performance and fluctuations in our number of employees. The below chart summarizes the significant drivers of our compensation and benefits expense results for the periods presented (dollars in millions, except employee headcount).


	Three Months Ended March 31,
	2022		2021		Change
Employee headcount	9,009		8,964		1	%
Stock-based compensation expenses	$	37	$	35	6	%

Headcount increased due to 404 additional employees hired, primarily in India, partially offset by a reduction of 359 Bakkt employees following its deconsolidation.

Compensation and benefits expense increased $5 million for the three months ended March 31, 2022, primarily due to a $16 million increase related to additional headcount, increased commissions, merit pay increases, and higher employee insurance costs, partially offset by $14 million in expense related to Bakkt during the three months ended March 31, 2021, prior to deconsolidation. The stock-based compensation expenses in the table above relate to employee stock option and restricted stock awards and exclude stock-based compensation related to acquisition-related transaction and integration costs.

Professional Services Expenses

Professional services expense includes fees for consulting services received on strategic and technology initiatives, temporary labor, as well as regulatory, legal and accounting fees, and may fluctuate as a result of changes in our use of these services in our business.

Professional services expenses decreased $10 million for the three months ended March 31, 2022, from the comparable period in 2021, primarily due to a $5 million decrease in legal fees, as well as $4 million in expense related to Bakkt during the three months ended March 31, 2021 prior to deconsolidation.

Acquisition-Related Transaction and Integration Costs

We incurred $9 million in acquisition-related transaction and integration costs during the three months ended March 31, 2022, primarily related to our integration of Ellie Mae, Inc., or Ellie Mae. We incurred $18 million in acquisition-related transaction costs for the three months ended March 31, 2021, primarily related to our integration of Ellie Mae and the Bakkt transaction.

We expect to continue to explore and pursue various potential acquisitions and other strategic opportunities to strengthen our competitive position and support our growth. As a result, we may incur acquisition-related transaction costs in future periods.

Technology and Communication Expenses

Technology support services consist of costs for running our wholly-owned data centers, hosting costs paid to third-party data centers and maintenance of our computer hardware and software required to support our technology and cybersecurity. These costs are driven by system capacity, functionality and redundancy requirements. Communication expenses consist of costs or network connections for our electronic platforms and telecommunications costs.

Technology and communications expense also includes fees paid for access to external market data, licensing and other fee agreement expenses. Technology and communications expenses may be impacted by growth in electronic contract volume, our capacity requirements, changes in the number of telecommunications hubs and connections with customers to access our electronic platforms directly.

Technology and communications expenses increased $13 million for the three months ended March 31, 2022, from the comparable period in 2021, primarily due to $5 million in increased hardware and software support costs, $8 million in

increased hosting costs and $3 million in increased data services costs, partially offset by $3 million in expense during the three months ended March 31, 2021 related to Bakkt prior to deconsolidation.

Rent and Occupancy Expenses

Rent and occupancy expense relates to leased and owned property and includes rent, maintenance, real estate taxes, utilities and other related costs. We have significant operations located in the U.S., U.K., and India, with smaller offices located throughout the world.

Rent and occupancy expenses were flat for the three months ended March 31, 2022 from the comparable period in 2021.

Selling, General and Administrative Expenses

Selling, general and administrative expenses include marketing, advertising, public relations, insurance, bank service charges, dues and subscriptions, travel and entertainment, non-income taxes and other general and administrative costs.

Selling, general and administrative expenses increased $4 million for the three months ended March 31, 2022 from the comparable period in 2021 primarily due to $8 million in increased marketing expenses, partially offset by $6 million in expenses related to Bakkt during the three months ended March 31, 2021, prior to the deconsolidation of Bakkt.

Depreciation and Amortization Expenses

Depreciation and amortization expense results from depreciation of long-lived assets such as buildings, leasehold improvements, aircraft, hardware and networking equipment, software, furniture, fixtures and equipment over their estimated useful lives. This expense includes amortization of intangible assets obtained in our acquisitions of businesses, as well as on various licensing agreements, over their estimated useful lives. Intangible assets subject to amortization consist primarily of customer relationships, trading products with finite lives and technology. This expense also includes amortization of internally-developed and purchased software over its estimated useful life.

We recorded amortization expenses on intangible assets acquired as part of our acquisitions, as well as on other intangible assets, of $153 million and $159 million for the three months ended March 31, 2022 and 2021, respectively.

We recorded depreciation expenses on our fixed assets of $101 million and $96 million for the three months ended March 31, 2022 and 2021, respectively.

Consolidated Non-Operating Income/(Expense)

Income and expenses incurred through activities outside of our core operations are considered non-operating. The following tables present our non-operating income (expenses) (dollars in millions):


	Three Months Ended March 31,
	2022		2021		Change
Other income/(expense):
Interest income	$	1	$	—	n/a
Interest expense	(103)		(107)		(4)
Other income/(expense), net	(58)		48		n/a
Total other income/(expense), net	$	(160)	$	(59)	171%
Net income attributable to non-controlling interest	$	(10)	$	(4)	162%

*Percentage changes in the table above deemed "n/a" are not meaningful.

Interest Income

Interest income for the three months ended March 31, 2022 primarily represents interest income on our short-term investments.

Interest Expense

Interest expense for the three months ended March 31, 2022 primarily represents interest expense on our outstanding debt. See “- Debt” below.

Other income/(expense), net

Our equity method investments include OCC and Bakkt, among others. We recognized ($42 million) and $25 million during the three months ended March 31, 2022 and 2021, respectively, of our share of estimated equity method investment (losses)/profits, net, which is included in other income. The estimated losses during the three months ended March 31, 2022 are primarily related to our investment in Bakkt, and the estimated profits during the three months ended March 31, 2021 are related to our investment in OCC. Both periods include adjustments to reflect the difference between reported prior period actual results from our original estimates.

During the three months ended March 31, 2022, we recorded a $9 million accrual for a legal settlement, which is included in other expense.

In connection with our equity investment in Euroclear, we recognized dividend income of $30 million during the three months ended March 31, 2021 which is included in other income. We did not receive a Euroclear dividend during the three months ended March 31, 2022.

We incurred foreign currency transaction losses of $5 million and $6 million for the three months ended March 31, 2022 and 2021, respectively, primarily attributable to the fluctuations of the pound sterling and euro relative to the U.S. dollar. Foreign currency transaction gains and losses are recorded in other income/(expense), net, when the settlement of foreign currency assets, liabilities and payables occur in non-functional currencies and there is an increase or decrease in the period-end foreign currency exchange rates between periods. See Item 3 “- Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Exchange Rate Risk” included elsewhere in this Quarterly Report for more information on these items.

Non-controlling Interest

For consolidated subsidiaries in which our ownership is less than 100%, and for which we have control over the assets, liabilities and management of the entity, the outside stockholders’ interests are shown as non-controlling interests. As of March 31, 2022, our non-controlling interests included those related to the non-ICE limited partners' 26.7% ownership interest in our CDS clearing subsidiaries, and non-controlling interests in ICE Futures Abu Dhabi. Prior to completion of the Bakkt transaction on October 15, 2021, our non-controlling interest also included the redeemable non-controlling interest of the non-ICE partners in Bakkt.

Consolidated Income Tax Provision

Consolidated income tax expense was $165 million and $183 million for the three months ended March 31, 2022 and 2021, respectively. The change in consolidated income tax expense between periods is primarily due to the tax impact of changes in our pre-tax income and the changes in our effective tax rate each period.

Our effective tax rate was 20% and 22% for the three months ended March 31, 2022 and 2021, respectively. The effective tax rate for the three months ended March 31, 2022 was lower than the effective tax rate for the comparable period in 2021 primarily due to state apportionment changes as well as updates involving our equity method investments.

Liquidity and Capital Resources

Below are charts that reflect our outstanding debt and capital allocation. The acquisition and integration costs in the chart below include cash paid for acquisitions, net of cash received for divestitures, cash paid for equity and equity method investments, cash paid for non-controlling interest and redeemable non-controlling interest, and acquisition-related transaction and integration costs, in each period.

We have financed our operations, growth and cash needs primarily through income from operations and borrowings under our various debt facilities. Our principal capital requirements have been to fund capital expenditures, working capital, strategic acquisitions and investments, stock repurchases, dividends and the development of our technology platforms. We believe that our cash on hand and cash flows from operations will be sufficient to repay our outstanding debt, but we

may also need to incur additional debt or issue additional equity securities in the future. See “- Future Capital Requirements” below.

See “– Cash Flow” below for a discussion of our capital expenditures and capitalized software development costs.

Consolidated cash and cash equivalents were $638 million and $607 million as of March 31, 2022 and December 31, 2021, respectively. We had $1.5 billion and $1.4 billion in short-term and long-term restricted cash and cash equivalents as of March 31, 2022 and December 31, 2021, respectively. We had $161.1 billion and $145.9 billion of cash and cash equivalent margin deposits and guaranty funds as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022, the amount of unrestricted cash held by our non-U.S. subsidiaries was $442 million. Due to U.S. tax reform, the majority of our foreign earnings since January 1, 2018 have been subject to immediate U.S. income taxation, and the existing non-U.S. unrestricted cash balance can be distributed to the U.S. in the future with no material additional income tax consequences.

Our cash and cash equivalents and financial investments are managed as a global treasury portfolio of non-speculative financial instruments that are readily convertible into cash, such as overnight deposits, term deposits, money market funds, mutual funds for treasury investments, short duration fixed income investments and other money market instruments, thus ensuring high liquidity of financial assets. We may invest a portion of our cash in excess of short-term operating needs in investment-grade marketable debt securities, including government or government-sponsored agencies and corporate debt securities. As of March 31, 2022, we held $12 million of unrestricted cash that was set aside for legal, regulatory, and surveillance operations at NYSE.

Cash Flow

The following table presents the major components of net changes in cash and cash equivalents, and restricted cash and cash equivalents (in millions):


	Three Months Ended March 31,
2022			2021
Net cash provided by (used in):
Operating activities	$	756		$	734
Investing activities	882			444
Financing activities	13,678			888
Effect of exchange rate changes	(1)			(1)
Net increase in cash and cash equivalents, restricted cash and cash equivalents, and cash and cash equivalent margin deposits and guaranty funds	$	15,315		$	2,065

Operating Activities

Net cash provided by operating activities primarily consists of net income adjusted for certain items, including depreciation and amortization, deferred taxes, stock based compensation and the effects of changes in working capital.

The $22 million increase in net cash provided by operating activities during the three months ended March 31, 2022 from the comparable period in 2021 was driven by a $17 million increase in net income and fluctuations in our working capital.

Investing Activities

Consolidated net cash provided by investing activities for the three months ended March 31, 2022 primarily relates to $1.7 billion in proceeds from the sale of invested margin deposits, partially offset by $651 million of purchases of invested margin deposits, $36 million of capital expenditures and $67 million of capitalized software development costs.

Consolidated net cash provided by investing activities for the three months ended March 31, 2021 primarily relates to $1.7 billion in proceeds from the sale of invested margin deposits, partially offset by $1.1 billion purchases of invested margin deposits, $40 million of capital expenditures and $76 million of capitalized software development costs.

The capital expenditures primarily relate to hardware and software purchases to continue the development and expansion of our electronic platforms, data services and clearing houses, and leasehold improvements. The software development expenditures primarily relate to the development and expansion of our electronic trading platforms, data services, mortgage services and clearing houses.

Financing Activities

Consolidated net cash provided by financing activities for the three months ended March 31, 2022 primarily relates to an increase in our cash and cash equivalent margin deposits and guaranty fund balances of $14.2 billion due to increased volatility and $256 million in net proceeds under our Commercial Paper Program, partially offset by $475 million in repurchases of our common stock, $214 million in dividend payments to stockholders and $69 million in cash payments related to treasury shares received for restricted stock tax payments and stock option exercises.

Consolidated net cash provided by financing activities for the three months ended March 31, 2021 primarily relates to an increase in our cash and cash equivalent margin deposits and guaranty fund balances of $1.5 billion, partially offset by $343 million in net repayments under our Commercial Paper Program, $187 million in dividend payments to stockholders and $65 million in cash payments related to treasury shares received for restricted stock tax payments and stock option exercises.

We have adjusted our historical presentation of opening and ending amounts of cash and cash equivalents, and restricted cash and cash equivalents in our consolidated statements of cash flows to include cash and cash equivalent margin deposits and guaranty funds. Changes in these balances are reflected as cash provided by/(used in) financing activities.

Debt

As of March 31, 2022, we had $14.2 billion in outstanding debt, consisting of $12.9 billion of senior notes, $1.3 billion under our Commercial Paper Program and $9 million under credit lines at our ICE India subsidiaries. Our senior notes of $12.9 billion have a weighted average maturity of 15 years and a weighted average cost of 2.9% per annum. The commercial paper notes had original maturities ranging from one to 43 days as of March 31, 2022, with a weighted average interest rate of 0.99% per annum, and a weighted average remaining maturity of 21 days. As of December 31, 2021, we had $13.9 billion in outstanding debt, consisting of $12.9 billion of senior notes, $1.0 billion under our Commercial Paper Program and $10 million under credit lines at our ICE India subsidiaries. As of December 31, 2021, our senior notes of $12.9 billion had a weighted average maturity of 15 years and a weighted average cost of 2.9% per annum. The commercial paper notes had original maturities ranging from three to 73 days as of December 31, 2021, with a weighted average interest rate of 0.33% per annum, and a weighted average remaining maturity of 26 days.

We have a $3.8 billion senior unsecured revolving credit facility, or the Credit Facility, with a maturity date of October 15, 2026 pursuant to a credit agreement with Wells Fargo Bank, N.A., as primary administrative agent, issuing lender and swing-line lender, Bank of America, N.A., as syndication agent, backup administrative agent and swing-line lender, and the lenders party thereto. As of March 31, 2022, of the $3.8 billion that is currently available for borrowing under the Credit Facility, $1.3 billion is required to backstop the amount outstanding under our Commercial Paper Program and $171 million is required to support certain broker-dealer and other subsidiary commitments. The amount required to backstop the amounts outstanding under the Commercial Paper Program will fluctuate as we increase or decrease our commercial paper borrowings. The remaining $2.3 billion is available for working capital and general corporate purposes including, but not limited to, acting as a backstop to future increases in the amounts outstanding under the Commercial Paper Program.

Our Commercial Paper Program enables us to borrow efficiently at reasonable short-term interest rates and provides us with the flexibility to de-lever using our strong annual cash flows from operating activities whenever our leverage becomes elevated as a result of investment or acquisition activities. We had net issuances of $256 million under our Commercial Paper Program during the three months ended March 31, 2022.

Upon maturity of our commercial paper and to the extent old issuances are not repaid by cash on hand, we are exposed to the rollover risk of not being able to issue new commercial paper. To mitigate this risk, we maintain the Credit Facility for an aggregate amount which meets or exceeds the amount issued under our Commercial Paper Program at any time. If we were not able to issue new commercial paper, we have the option of drawing on the backstop revolving facility. However, electing to do so would result in higher interest expense.

For additional details of our debt instruments, refer to Note 8 to our consolidated unaudited financial statements, included in this Quarterly Report, and Note 10 to our consolidated financial statements included in our 2021 Form 10-K.

Capital Return

In December 2021, our Board approved an aggregate of $3.15 billion for future repurchases of our common stock with no fixed expiration date that became effective January 1, 2022. The $3.15 billion replaced the previous amount approved by the Board.

For the three months ended March 31, 2022, we repurchased 3.7 million shares of our outstanding common stock at a cost of $475 million, including 3.3 million shares at a cost of $425 million under our Rule 10b5-1 trading plan and

0.4 million shares at a cost of $50 million on the open market during an open trading period. Shares repurchased are held in treasury stock. For the three months ended March 31, 2021, we did not repurchase any of our outstanding common stock.

The remaining balance of Board approved funds for future repurchases as of March 31, 2022 is $2.7 billion. The approval of our Board for stock repurchases does not obligate us to acquire any particular amount of our common stock. In addition, our Board may increase or decrease the amount available for repurchases from time to time.

From time to time, we enter into Rule 10b5-1 trading plans, as authorized by our Board, to govern some or all of the repurchases of our shares of common stock. In December 2021 we entered into a new Rule 10b5-1 trading plan that became effective in February 2022. We may discontinue stock repurchases at any time and may amend or terminate a Rule 10b5-1 trading plan at any time. We expect funding for any stock repurchases to come from our operating cash flow or borrowings under our Commercial Paper Program or our debt facilities. The timing and extent of future repurchases that are not made pursuant to a Rule 10b5-1 trading plan will be at our discretion and will depend upon many conditions. In making a determination regarding any stock repurchases, management considers multiple factors, including overall stock market conditions, our common stock price performance, the remaining amount authorized for repurchases by our Board, the potential impact of a stock repurchase program on our corporate debt ratings, our expected free cash flow and working capital needs, our current and future planned strategic growth initiatives, and other potential uses of our cash and capital resources.

During the first quarter of 2022, we paid a quarterly dividend of $0.38 per share of our common stock for an aggregate payout of $214 million, which includes the payment of dividend equivalents on unvested employee restricted stock units.

Future Capital Requirements

Our future capital requirements will depend on many factors, including the rate of growth across our segments, strategic plans and acquisitions, available sources for financing activities, required and discretionary technology and clearing initiatives, regulatory requirements, the timing and introduction of new products and enhancements to existing products, the geographic mix of our business and potential stock repurchases.

We currently expect to incur capital expenditures (including operational and real estate capital expenditures) and to incur software development costs that are eligible for capitalization ranging in the aggregate between $490 million and $520 million in 2022, which we believe will support the enhancement of our technology, business integration and the continued growth of our businesses.

As of March 31, 2022, we had $2.7 billion authorized for future repurchases of our common stock. Refer to Note 10 to our consolidated financial statements included in this Quarterly Report for additional details on our stock repurchase program.

Our Board has adopted a quarterly dividend policy providing that dividends will be approved quarterly by the Board or the Audit Committee taking into account factors such as our evolving business model, prevailing business conditions, our current and future planned strategic growth initiatives and our financial results and capital requirements, without a predetermined net income payout ratio. On May 5, 2022, we announced a $0.38 per share dividend for the second quarter of 2022 with the dividend payable on June 30, 2022 to stockholders of record as of June 15, 2022.

Other than the facilities for the ICE Clearing Houses, our Credit Facility and our Commercial Paper Program are currently the only significant agreements or arrangements that we have for liquidity and capital resources with third parties. See Notes 8 and 12 to our consolidated financial statements included in this Quarterly Report for further discussion. In the event of any strategic acquisitions, mergers or investments, or if we are required to raise capital for any reason or desire to return capital to our stockholders, we may incur additional debt, issue additional equity to raise necessary funds, repurchase additional shares of our common stock or pay a dividend. However, we cannot provide assurance that such financing or transactions will be available or successful, or that the terms of such financing or transactions will be favorable to us. See “—Debt" above.

Non-GAAP Measures

We use certain financial measures internally to evaluate our performance and make financial and operational decisions that are presented in a manner that adjusts from their equivalent GAAP measures or that supplement the information provided by our GAAP measures. We use these adjusted results because we believe they more clearly highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our core operating performance.

We use these measures in communicating certain aspects of our results and performance, including in this Quarterly Report, and believe that these measures, when viewed in conjunction with our GAAP results and the accompanying reconciliation, can provide investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. In addition, we believe the presentation of these measures is useful to investors for making period-to-period comparisons of results because the adjustments to GAAP are not reflective of our core business performance.

These financial measures are not presented in accordance with, or as an alternative to, GAAP financial measures and may be different from non-GAAP measures used by other companies. We encourage investors to review the GAAP financial measures included in this Quarterly Report, including our consolidated financial statements, to aid in their analysis and understanding of our performance and in making comparisons.

The table below outlines our adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income attributable to ICE common stockholders and adjusted earnings per share, which are non-GAAP measures that are calculated by making adjustments for items we view as not reflective of our cash operations and core business performance. These measures, including the adjustments and their related income tax effect and other tax adjustments (in millions, except for percentages and per share amounts), are as follows:


	Exchanges Segment						Fixed Income and Data Services Segment						Mortgage Technology Segment						Consolidated
	Three Months Ended March 31,
	2022			2021			2022			2021			2022			2021			2022			2021
Total revenues, less transaction-based expenses	$	1,083		$	974		$	509		$	468		$	307		$	355		$	1,899		$	1,797
Operating expenses	299			321			354			335			254			249			907			905
Less: Amortization of acquisition-related intangibles	16			18			49			45			88			95			153			158
Less: Transaction and integration costs	—			5			—			—			8			13			8			18









Adjusted operating expenses	$	283		$	298		$	305		$	290		$	158		$	141		$	746		$	729
Operating income	$	784		$	653		$	155		$	133		$	53		$	106		$	992		$	892
Adjusted operating income	$	800		$	676		$	204		$	178		$	149		$	214		$	1,153		$	1,068
Operating margin	72		%	67		%	30		%	28		%	17		%	30		%	52		%	50		%
Adjusted operating margin	74		%	69		%	40		%	38		%	49		%	60		%	61		%	59		%

Net income attributable to ICE common stockholders																			$	657		$	646
Add: Amortization of acquisition-related intangibles																			153			158
Add: Transaction and integration costs																			8			18



Add: Accrual relating to legal settlement																			9			—





Add/(Less): Net losses (income) from unconsolidated investees																			42			(25)






Less: Income tax effect for the above items																			(58)			(40)

Add/(Less): Deferred tax adjustments on acquisition-related intangibles																			(7)			1

Adjusted net income attributable to ICE common stockholders																			$	804		$	758

Basic earnings per share attributable to ICE common stockholders																			$	1.17		$	1.15
Diluted earnings per share attributable to ICE common stockholders																			$	1.16		$	1.14

Adjusted basic earnings per share attributable to ICE common stockholders																			$	1.43		$	1.35
Adjusted diluted earnings per share attributable to ICE common stockholders																			$	1.43		$	1.34

Basic weighted average common shares outstanding																			561			562
Diluted weighted average common shares outstanding																			564			565

Amortization of acquisition-related intangibles are included in non-GAAP adjustments as excluding these non-cash expenses provides greater clarity regarding our financial strength and stability of cash operating results.

Transaction and integration costs are included as part of our core business expenses, except for those that are directly related to the announcement, closing, financing, or termination of a transaction. However, we adjust for the acquisition-related transaction and integration costs for acquisitions such as Ellie Mae given the magnitude of the $11.4 billion purchase price of the acquisition. We also adjust for the acquisition-related transaction costs related to the merger between Bakkt and VIH due to the significance of the transaction.

During the three months ended March 31, 2022, we also included an accrual related to a legal settlement as a non-GAAP adjustment. We do not consider an event of this type to be reflective of our core business operations.

We exclude net income from our unconsolidated equity method investees for purposes of calculating non-GAAP measures. As of March 31, 2022, this adjustment includes our share of profits or losses from OCC, Bakkt, and our other equity method investments, and as of March 31, 2021, it included only OCC. This is consistent with how we treat changes

in the fair value of our equity investments. We believe these adjustments provide greater clarity of our performance given that equity investments are non-cash and not a part of our core operations.

The income tax effects relating to all non-GAAP adjustments above are included as non-GAAP adjustments. We also include non-GAAP adjustments for deferred tax adjustments on acquisition-related intangibles. The deferred tax adjustments of ($7 million) and $1 million for the three months ended March 31, 2022 and 2021, respectively, relate primarily to U.S. state apportionment changes.

For additional information on these items, refer to our consolidated financial statements included in this Quarterly Report and “—Consolidated Operating Expenses”, above.

Contractual Obligations and Commercial Commitments

During the three months ended March 31, 2022, there were no significant changes to our contractual obligations and commercial commitments from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Form 10-K.

Off-Balance Sheet Arrangements

As described in Note 12 to our consolidated financial statements, which are included elsewhere in this Quarterly Report, certain clearing house collateral is reported off-balance sheet. We do not have any relationships with unconsolidated entities or financial partnerships, often referred to as structured finance or special purpose entities.

New and Recently Adopted Accounting Pronouncements

During the three months ended March 31, 2022, there were no significant changes to the new and recently adopted accounting pronouncements applicable to us from those disclosed in Note 2 of our 2021 Form 10-K.

Critical Accounting Policies

During the three months ended March 31, 2022, there were no significant changes to our critical accounting policies and estimates from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Form 10-K.

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