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 realize the expected benefits of our acquisitions and our investments, including our ability to close the Black Knight acquisition on the terms and timing expected;
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; and
potential adverse results of threatened or pending litigation and regulatory actions and proceedings.

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 residential mortgages in the U.S., 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

Pending Acquisition of Black Knight, Inc.

On May 4, 2022, we announced that we had 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. Pursuant to the merger agreement, Sub will merge with and into Black Knight, with Black Knight surviving as a wholly owned subsidiary of ICE. As of May 4, 2022, the transaction was valued at approximately $13.1 billion, or $85 per share of Black Knight common stock, with cash comprising 80% of the value of the aggregate transaction consideration and shares of our common stock comprising 20% of the value of the aggregate transaction consideration at that time. The aggregate cash component of the transaction

consideration is fixed at $10.5 billion, and the value of the aggregate stock component of the transaction consideration will fluctuate with the market price of our common stock and will be determined based on the average of the volume weighted averages of the trading prices of our common stock on each of the ten consecutive trading days ending three trading days prior to the closing of the merger. 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 provides a comprehensive and integrated ecosystem of software, data and analytics solutions serving the real estate and housing finance markets. We believe 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.

On August 19, 2022, our preliminary proxy statement/prospectus on Form S-4 was declared effective by the SEC, and on September 21, 2022, Black Knight stockholders approved the transaction. 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.

Global Market Conditions

Our results of operations are affected by global economic conditions, including macroeconomic conditions and geopolitical events or conflicts. During 2022, macroeconomic conditions, including rising interest rates, recent spikes in inflation rates and market volatility, along with geopolitical concerns, including the war in Ukraine and the sanctions and other measures that have been and continue to be imposed in response to the war, created uncertainty and volatility in the global economy and resulted in a dynamic operating environment.

Our business has been impacted positively and negatively by these global economic conditions. For instance, due to market volatility and rising interest rates, we have seen increased trading across a number of our products, such as interest rate & equity futures, credit default swaps and bonds. Conversely, increases in mortgage interest rates in 2022 have resulted in reduced consumer and investor demand for mortgages and adversely impacted the transaction-based revenues in our Mortgage Technology segment.

We have suspended all services in Russia except for limited offerings to non-sanctioned entities. 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 expect the macro environment to remain dynamic in the near-term, and we continue to monitor macroeconomic conditions, including interest rates and inflation rates, as well as the uncertainty surrounding the extent and duration of the ongoing conflict between Russia and Ukraine, and the impact that any of the foregoing may have on the global economy and on our business.

Tax Policy Changes

In July and August 2022, the CHIPS and Science Act, or CHIPS, and the Inflation Reduction Act of 2022, or IRA, were signed into law. The IRA introduced a 15% corporate alternative minimum tax, or CAMT, on adjusted financial statement income for corporations with profits in excess of $1 billion, effective for tax years after December 31, 2022. While further guidance on the implementation of the CAMT is expected, we do not expect it will have a material impact to our 2023 effective tax rate. We also do not expect that CHIPS will have a material impact. The IRA also includes a stock buyback excise tax of 1%, which will apply to net stock buybacks after December 31, 2022. We do not expect this to have a material impact once share repurchases are resumed.

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, used 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. As a result of the FCA's June 2022 consultation, the FCA will require IBA to continue publishing 1 and 6-month "synthetic" Sterling LIBOR and is considering whether to require IBA to publish 3-month "synthetic" Sterling LIBOR until the end of March 2023. "Synthetic" Japanese Yen LIBOR settings will cease at the end of 2022. Any settings published under the “synthetic” methodology are not 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 has confirmed that it expects certain U.S. Dollar LIBOR settings to continue being published on a representative basis until the end of June 2023. The FCA stated that it will 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 continuing U.S. Dollar LIBOR settings may be restricted or prohibited in certain circumstances under applicable law.

The European Commission used 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 transition period for the use of benchmarks provided by third-country administrators has been extended until at least December 31, 2023. In May 2022, the European Commission published a consultation on the third-country regime of the EU BMR to prepare for the development of a legislative proposal.

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 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 have been adopted by the European Commission to allow EU countries to jointly buy strategic reserves of gas. In June 2022, the EU imposed a partial embargo on Russian crude oil and petroleum products. In July 2022, EU Member States reached a political agreement on a voluntary reduction of natural gas demand in the EU. In September 2022, the European Commission approved legislative proposals to address the energy crisis including reducing Member States' energy consumption, imposing a cap on revenues for electricity producers and requiring a contribution on excess profits generated from oil, gas, coal and refinery activities. The European Commission is also exploring additional measures including a price cap on imported gas and an LNG import benchmark. The potential impact of these measures on the functioning of European energy wholesale markets remains 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 and YTD represents the nine-month periods ended September 30th).

(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.


	Nine Months Ended September 30,							Three Months Ended September 30,
	2022			2021			Change	2022			2021			Change
Revenues, less transaction-based expenses	$	5,524		$	5,306		4 %	$	1,811		$	1,802		1 %
Recurring revenues(1)	$	2,781		$	2,603		7 %	$	930		$	888		5 %
Transaction revenues, net(1)	$	2,743		$	2,703		1 %	$	881		$	914		(4) %
Operating expenses	$	2,750		$	2,737		— %	$	898		$	924		(3) %
Adjusted operating expenses(2)	$	2,213		$	2,228		(1) %	$	727		$	755		(4) %
Operating income	$	2,774		$	2,569		8 %	$	913		$	878		4 %
Adjusted operating income(2)	$	3,311		$	3,078		8%	$	1,084		$	1,047		4%
Operating margin	50		%	48		%	2 pts	50		%	49		%	1 pt
Adjusted operating margin(2)	60		%	58		%	2 pts	60		%	58		%	2 pts
Other income/(expense), net	$	(1,530)		$	1,020		n/a	$	(1,240)		$	(54)		n/a
Income tax expense/(benefit)	$	186		$	1,049		(82) %	$	(152)		$	187		(182) %
Effective tax rate	15		%	29		%	(14 pts)	47		%	23		%	24 pts
Net income/(loss) attributable to ICE	$	1,021		$	2,531		(60) %	$	(191)		$	633		(130) %
Adjusted net income attributable to ICE(2)	$	2,276		$	2,102		8 %	$	733		$	711		3 %
Diluted earnings/(loss) per share attributable to ICE common stockholders	$	1.82		$	4.48		(59) %	$	(0.34)		$	1.12		(130) %
Adjusted diluted earnings per share attributable to ICE common stockholders(2)	$	4.06		$	3.72		9 %	$	1.31		$	1.26		4 %
Cash flows from operating activities	$	2,462		$	2,130		16 %

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

(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.

(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 $218 million and $9 million for the nine and three months ended September 30, 2022, respectively, from the comparable periods 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 nine and three months ended September 30, 2022 includes $86 million and $42 million, respectively, in unfavorable foreign exchange effects arising from fluctuations in the U.S. dollar from the comparable periods 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 $13 million and decreased $26 million for the nine and three months ended September 30, 2022, respectively, from the comparable periods 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 nine months ended September 30, 2022 and the decrease during the three months ended September 30, 2022 includes $27 million and $13 million, respectively, in favorable foreign exchange effects arising from fluctuations in the U.S. dollar from the comparable periods 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 and YTD represents the nine-month periods ended September 30th):

(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.


	Nine Months Ended September 30,						Three Months Ended September 30,
	2022		2021		Change		2022		2021		Change
Revenues:
Energy futures and options	$	884	$	900	(2)	%	$	266	$	316	(16)	%
Agricultural and metals futures and options	179		177		1		57		56		1
Financial futures and options	375		281		33		122		93		30
Futures and options	1,438		1,358		6		445		465		(5)
Cash equities and equity options	2,021		1,800		12		664		554		20
OTC and other	326		239		37		121		84		45
Transaction and clearing, net	3,785		3,397		11		1,230		1,103		11
Data and connectivity services	651		623		4		219		208		6
Listings	388		356		9		128		123		3
Revenues	4,824		4,376		10		1,577		1,434		10
Transaction-based expenses(1)	1,735		1,534		13		576		475		21
Revenues, less transaction-based expenses	3,089		2,842		9		1,001		959		4
Other operating expenses	725		778		(7)		241		265		(9)
Depreciation and amortization	178		186		(4)		60		62		(2)
Acquisition-related transaction and integration costs	1		13		(92)		—		3		(103)
Operating expenses	904		977		(7)		301		330		(9)
Operating income	$	2,185	$	1,865	17	%	$	700	$	629	11	%

Recurring revenues	$	1,039	$	979	6	%	$	347	$	331	5	%
Transaction revenues, net	$	2,050	$	1,863	10	%	$	654	$	628	4	%

(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 nine months ended September 30, 2022 and 2021, 19% and 16%, respectively, of our Exchanges segment revenues, less transaction-based expenses, were billed in pounds sterling or euros. For the three months ended September 30, 2022 and 2021, 19% and 18%, 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 $66 million and $33 million for the nine and three months ended September 30, 2022, from the comparable periods in 2021.

Our exchange transaction and clearing revenues are presented net of rebates. We recorded rebates of $665 million and $790 million for the nine months ended September 30, 2022 and 2021, respectively, and $201 million and $264 million for the three months ended September 30, 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

nine and three months ended September 30, 2022 is primarily due to lower volumes as compared to the prior year and 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 decreased 1% and revenues decreased 2% for the nine months ended September 30, 2022 from the comparable period in 2021 and volume decreased 13% and revenues decreased 16% for the three months ended September 30, 2022 from the comparable period in 2021.

**–**Total oil futures and options volume decreased 10% and 18% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021, driven, in part, by lower Gasoil volumes which are impacted by the uncertainty around Russian sanctions and the conflict in Ukraine.

**–**Our global natural gas futures and options volume increased 18% for the nine months ended September 30, 2022 and decreased 4% for the three months ended September 30, 2022, from the comparable periods in 2021, as the first half of 2022 benefited from elevated price volatility related to geopolitical events, including the conflict in Ukraine. In the third quarter of 2022, increased volumes in our North American gas complex were offset by muted activity in our Dutch TTF natural gas complex.

**–**Our environmentals and other futures and options volume decreased 6% and 20% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021, due in part to lower power and environmental options volumes.

Agricultural and Metals Futures and Options: Total volumes in our agricultural and metals futures and options markets increased 1% and 4% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021 and revenues increased 1% for both the nine and three months ended September 30, 2022, from the comparable periods in 2021. The third quarter of 2022 benefited from elevated price volatility and price inflation driving an increased need to manage risk across our commodity markets.

**–**Sugar futures and options volumes were flat for the nine months ended September 30, 2022 and increased 4% for the three months ended September 30, 2022, from the comparable periods in 2021.

**–**Other agricultural and metal futures and options volume increased 2% and 3% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021.

Financial Futures and Options: Total volumes in our financial futures and options markets increased 5% and 15% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021 and revenues increased 33% and 30% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021. The nine months ended September 30, 2022 benefited from elevated volatility across global markets driven by geopolitical events, central bank activity and inflationary concerns.

**–**Interest rate futures and options volume increased 3% and 15% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021, and revenue increased 44% and 37% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021. Adjusting for 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 volumes increased 27% and 40% for the nine and three months ended September 30, 2022, respectively from the comparable periods in 2021 driven by interest rate volatility and increased speculation of central bank activity due to inflation concerns. Interest rate futures and options revenues were $235 million and $163 million for the nine months ended September 30, 2022 and 2021, respectively, and $77 million and $55 million for the three months ended September 30, 2022 and 2021, respectively.

**–**Other financial futures and options volume, which includes our MSCI®, FTSE® and NYSE FANG+ equity index products, increased 16% for both the nine and three months ended September 30, 2022 from the comparable periods in 2021. Financial futures and options revenue increased 19% and 20% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021. The nine months ended September 30, 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 $140 million and $118 million for the nine months ended September 30, 2022 and 2021, respectively and $45 million and $38 million for the three months ended September 30, 2022 and 2021, respectively.

Cash Equities and Equity Options: Cash equities volume increased 3% and 7% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021 due to higher total market volumes driven by elevated volatility related to inflationary, recessionary and geopolitical concerns. Cash equities revenues, net of transaction-based expenses, were $211 million and $184 million for the nine months ended September 30, 2022 and 2021, respectively, and $64 million and $54 million for the three months ended September 30, 2022 and 2021, respectively. Equity options volume increased 10% for the nine months ended September 30, 2022, and decreased 1% for the three months ended September 30, 2022, from the comparable periods in 2021. The overall increase in equity options volume for the nine months ended September 30, 2022 was driven by increased market share. The overall decrease in equity options volume for the three months ended September 30, 2022 was primarily due to the Arca Options Pillar migration. Equity options revenues, net of transaction-based expenses, were $75 million and $82 million for the nine months ended September 30, 2022 and 2021, respectively, and $24 million and $25 million for the three months ended September 30, 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 37% and 45% for the nine and three months ended September 30, 2022, respectively, from the comparable periods 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% and 6% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021. The increase in revenue was driven by the strong retention rate of existing customers, the addition of new 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 9% and 3% for the nine and three months ended September 30, 2022, respectively, from the comparable periods 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 and YTD represents the nine-month periods ended September 30th):


Volume and Rate per Contract


	Nine Months Ended September 30,						Three Months Ended September 30,
	2022		2021		Change		2022		2021		Change
Number of contracts traded (in millions):
Energy futures and options	572		581		(1)	%	173		200		(13)	%
Agricultural and metals futures and options	77		76		1		25		24		4
Financial futures and options	504		477		5		176		152		15
Total	1,153		1,134		2	%	374		376		(1)	%

	Nine Months Ended September 30,						Three Months Ended September 30,
	2022		2021		Change		2022		2021		Change
Average daily volume of contracts traded (in thousands):
Energy futures and options	3,046		3,089		(1)	%	2,706		3,126		(13)	%
Agricultural and metals futures and options	408		404		1		393		379		4
Financial futures and options	2,622		2,495		5		2,668		2,320		15
Total	6,076		5,988		1	%	5,767		5,825		(1)	%

	Nine Months Ended September 30,						Three Months Ended September 30,
	2022		2021		Change		2022		2021		Change
Rate per contract:
Energy futures and options	$	1.54	$	1.55	(1)	%	$	1.54	$	1.58	(3)	%
Agricultural and metals futures and options	$	2.33	$	2.33	—	%	$	2.26	$	2.33	(3)	%
Financial futures and options	$	0.74	$	0.58	27	%	$	0.69	$	0.61	13	%

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 September 30,
	2022	2021	Change
Open interest — in thousands of contracts:
Energy futures and options	42,853	44,625	(4)	%
Agricultural and metals futures and options	3,948	4,056	(3)
Financial futures and options	26,636	32,318	(18)
Total	73,437	80,999	(9)	%

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 and YTD represents the nine-month periods ended September 30th:


	Nine Months Ended September 30,						Three Months Ended September 30,
	2022		2021		Change		2022		2021		Change
NYSE cash equities (shares in millions):
Total cash handled volume	2,453		2,375		3	%	2,158		2,022		7	%
Total cash market share matched	19.9	%	20.0	%	(0.1 pts)		19.4	%	20.3	%	(0.9 pts)

NYSE equity options (contracts in thousands):
NYSE equity options volume	7,631		6,967		10	%	7,037		7,078		(1)	%
Total equity options volume	37,888		36,684		3	%	36,994		35,546		4	%
NYSE share of total equity options	20.1	%	19.0	%	1.1 pts		19.0	%	19.9	%	(0.9 pts)

Revenue capture or rate per contract:
Cash equities rate per contract (per 100 shares)	$0.046		$0.041		11	%	$0.046		$0.042		11	%
Equity options rate per contract	$0.05		$0.06		(16)	%	$0.05		$0.05		1	%

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 $332 million and $204 million for the nine months

ended September 30, 2022 and 2021, respectively, and $158 million and $38 million for the three months ended September 30, 2022 and 2021, respectively. The increase in Section 31 fees was primarily due to an increase in rates. 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 current liabilities and was $58 million as of September 30, 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 $1.4 billion and $1.3 billion for the nine months ended September 30, 2022 and 2021, respectively, and $418 million and $437 million for the three months ended September 30, 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:	Nine Months Ended September 30,								Three Months Ended September 30,
	2022			2021			Change		2022			2021			Change
Operating expenses	$	904		$	977		(7)	%	$	301		$	330		(9)	%
Adjusted operating expenses(1)	$	854		$	909		(6)	%	$	284		$	309		(8)	%
Operating income	$	2,185		$	1,865		17	%	$	700		$	629		11	%
Adjusted operating income(1)	$	2,235		$	1,933		16	%	$	717		$	650		10	%
Operating margin	71		%	66		%	5 pts		70		%	66		%	4 pts
Adjusted operating margin(1)	72		%	68		%	4 pts		72		%	68		%	4 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 and YTD represents the nine-month periods ended September 30th):

(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.


	Nine Months Ended September 30,						Three Months Ended September 30,
	2022		2021		Change		2022		2021		Change
Revenues:
Fixed income execution	$	66	$	39	69	%	$	26	$	12	121	%
CDS clearing	226		144		57		88		51		72
Fixed income data and analytics	824		804		2		273		272		—
Fixed income and credit	1,116		987		13		387		335		15
Other data and network services	439		416		6		147		142		4
Revenues	1,555		1,403		11		534		477		12
Other operating expenses	766		752		2		250		252		(1)

Depreciation and amortization	262		257		2		86		85		1
Acquisition-related transaction and integration costs	1		1		45		1		1		(43)
Operating expenses	1,029		1,010		2		337		338		—
Operating income	$	526	$	393	34	%	$	197	$	139	42	%

Recurring revenues	$	1,263	$	1,220	3	%	$	420	$	414	1	%
Transaction revenues	$	292	$	183	59	%	$	114	$	63	81	%

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 nine months ended September 30, 2022 and 2021, 12% and 14%, respectively, of our Fixed Income and Data Services segment revenues were billed in pounds sterling or euros and for the three months ended September 30, 2022 and 2021, 10% and 13%, 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 $20 million and $9 million for the nine and three months ended September 30, 2022, respectively, than the comparable periods in 2021.

Fixed Income and Data Services Revenues

Our Fixed Income and Data Services revenues increased 11% and 12% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021. The increase in revenue was primarily due to strength in our fixed income execution and CDS clearing businesses due to elevated volatility across global markets driven by geopolitical events, central bank activity and inflationary concerns as well as increased market share.

Fixed Income Execution: Fixed income execution includes revenues from ICE Bonds. Execution fees are reported net of rebates, which were nominal for both the nine and three months ended September 30, 2022 and 2021. Our fixed income execution revenues increased 69% and 121% for the nine and three months ended September 30, 2022, respectively, from the comparable periods 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 57% and 72% for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021. The notional value of CDS cleared was $19.7 trillion and $12.6 trillion for the nine months ended September 30, 2022 and 2021, respectively, and $6.1 trillion and $4.5 trillion for the three months ended September 30, 2022 and 2021, respectively. The increases in the notional value of CDS cleared were 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 2% for the nine months ended September 30, 2022 and were flat for the three months ended September 30, 2022 from the comparable periods in 2021. The increase in revenue for the nine months ended September 30, 2022 was due to strength in our index business in the first half of 2022 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. This was partially offset by unfavorable foreign exchange effects arising from fluctuations in the U.S. dollar from the comparable periods in 2021.
Other Data and Network Services: Our other data and network services revenues increased 6% and 4% for the nine and three months ended September 30, 2022, respectively, from the comparable periods 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 September 30, 2022, ASV was $1.643 billion, which increased 1.1% compared to the ASV as of September 30, 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:	Nine Months Ended September 30,								Three Months Ended September 30,
	2022			2021			Change		2022			2021			Change
Operating expenses	$	1,029		$	1,010		2	%	$	337		$	338		—	%
Adjusted operating expenses(1)	$	892		$	874		2	%	$	293		$	293		—	%
Operating income	$	526		$	393		34	%	$	197		$	139		42	%
Adjusted operating income(1)	$	663		$	529		25	%	$	241		$	184		31	%
Operating margin	34		%	28		%	6 pts		37		%	29		%	8 pts
Adjusted operating margin(1)	43		%	38		%	5 pts		45		%	39		%	6 pts

Mortgage Technology Segment

The following charts and table present our selected statements of income data for our Mortgage Technology segment (dollars in millions and YTD represents the nine-month periods ended September 30th):


	Nine Months Ended September 30,					Three Months Ended September 30,
	2022		2021		Change	2022		2021		Change
Revenues:
Origination technology	586		740		(21)%	187		245		(24)%
Closing solutions	187		227		(17)	53		88		(39)
Data and analytics	66		55		22	22		19		22
Other	41		39		2	14		14		(8)
Revenues	880		1,061		(17)	276		366		(25)
Other operating expenses	410		406		1	130		140		(6)
Depreciation and amortization	328		316		4	112		106		5
Acquisition-related transaction and integration costs	79		28		182	18		10		67
Operating expenses	817		750		9	260		256		2
Operating income	$	63	$	311	(80)%	$	16	$	110	(86)%

Recurring revenues	$	479	$	404	19%	$	163	$	143	14%
Transaction revenues	$	401	$	657	(39)%	$	113	$	223	(49)%

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 $181 million and $90 million for the nine and three months ended September 30, 2022 from the comparable periods in 2021 due to lower mortgage origination volumes driven by rising interest rates. See Note 6 of our consolidated financial statements in this Quarterly Report where discussed further.

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 and are based on volume of loan closings.
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:	Nine Months Ended September 30,							Three Months Ended September 30,
	2022			2021			Change*	2022			2021			Change
Operating expenses	$	817		$	750		9%	$	260		$	256		2%
Adjusted operating expenses(1)	$	467		$	445		5%	$	150		$	153		(2)%
Operating income	$	63		$	311		(80)%	$	16		$	110		(86)%
Adjusted operating income(1)	$	413		$	616		(33)%	$	126		$	213		(41)%
Operating margin	7		%	29		%	(22 pts)	6		%	30		%	(24 pts)
Adjusted operating margin(1)	47		%	58		%	(11 pts)	46		%	58		%	(12 pts)

Consolidated Operating Expenses

The following presents our consolidated operating expenses (dollars in millions and YTD represents the nine-month periods ended September 30th):


	Nine Months Ended September 30,						Three Months Ended September 30,
	2022		2021		Change		2022		2021		Change
Compensation and benefits	$	1,058	$	1,093	(3)	%	$	344	$	374	(8)	%
Professional services	101		124		(19)		32		43		(27)
Acquisition-related transaction and integration costs	81		42		93		19		14		38
Technology and communication	513		495		4		169		168		1
Rent and occupancy	63		61		2		22		20		5
Selling, general and administrative	166		163		2		54		52		6
Depreciation and amortization	768		759		1		258		253		2
Total operating expenses	$	2,750	$	2,737	—	%	$	898	$	924	(3)	%

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 nine and three months ended September 30, 2022 and 2021, 10% of our operating expenses were billed in pounds sterling or euros, and for the three months ended September 30, 2022 and 2021, 9% and 10%, respectively, 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 $27 million and $13 million lower during the nine and three months ended September 30, 2022, respectively, than in the comparable periods 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).


	Nine Months Ended September 30,						Three Months Ended September 30,
	2022		2021		Change		2022		2021		Change
Employee headcount	8,935		9,381		(5)	%
Stock-based compensation expenses	$	110	$	112	—	%	$	37	$	39	(6)	%

Headcount decreased primarily due to a reduction of 608 Bakkt employees following its deconsolidation, partially offset by 274 additional employees hired in India.

Compensation and benefits expense decreased $35 million for the nine months ended September 30, 2022 from the comparable period in 2021, primarily due to $51 million in expenses related to Bakkt during the nine months ended September 30, 2021, prior to deconsolidation. This was partially offset by a $14 million increase for the nine months ended September 30, 2022, from the comparable period in 2021, related to additional headcount, increased commissions, merit pay increases, and higher employee insurance costs. 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.

Compensation and benefits expense decreased $30 million for the three months ended September 30, 2022, primarily due to $20 million in expenses related to Bakkt during the three months ended September 30, 2021, prior to deconsolidation.

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 $23 million and $11 million for the nine and three months ended September 30, 2022, respectively, from the comparable periods in 2021, primarily due to $11 million and $6 million in decreased legal fees for the nine and three months ended September 30, 2022, respectively, as well as $13 million and $6 million of expenses incurred at Bakkt during the nine and three months ended September 30, 2021, respectively, prior to deconsolidation.

Acquisition-Related Transaction and Integration Costs

We incurred $81 million and $19 million in acquisition-related transaction and integration costs during the nine and three months ended September 30, 2022, primarily due to legal and consulting expenses related to our pending acquisition of Black Knight and our integration of Ellie Mae, Inc., or Ellie Mae. We incurred $42 million and $14 million in acquisition-related transaction costs for the nine and three months ended September 30, 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 $18 million for the nine months ended September 30, 2022 from the comparable period in 2021, primarily due to $17 million in increased hardware and software support costs, $15 million in increased hosting costs and $7 million in increased data services costs, partially offset by an $11 million decrease in license expense and $10 million in expenses during the nine months ended September 30, 2021 related to Bakkt prior to deconsolidation.

Technology and communications expenses increased $1 million for the three months ended September 30, 2022 from the comparable period in 2021, primarily due to increased hardware and software support costs, hosting costs and data services costs, partially offset by a decrease in license expense and $3 million in expenses during the three months ended September 30, 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 increased $2 million for both the nine and three months ended September 30, 2022 from the comparable periods in 2021, primarily due to increased occupancy costs for the nine and three months ended September 30, 2022. During the nine and three months ended September 30, 2021, we incurred $2 million and $1 million in expenses related to Bakkt prior to deconsolidation.

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 $3 million for the nine months ended September 30, 2022 from the comparable period in 2021 primarily due to $11 million in increased marketing expenses and $13 million in increased travel and entertainment expenses. This was partially offset by $19 million in expenses related to Bakkt during the nine months ended September 30, 2021 prior to deconsolidation.

Selling, general and administrative expenses increased $2 million for the three months ended September 30, 2022, from the comparable period in 2021, primarily due to increased travel and entertainment expense, dues and subscriptions and taxes and fees. This was partially offset by expenses related to Bakkt during the three months ended September 30, 2021, prior to deconsolidation.

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 $459 million and $470 million for the nine months ended September 30, 2022 and 2021, respectively, and $153 million and $156 million for the three months ended September 30, 2022 and 2021, respectively.

We recorded depreciation expenses on our fixed assets of $309 million and $289 million for the nine months ended September 30, 2022 and 2021, respectively, and $105 million and $97 million for the three months ended September 30, 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):


	Nine Months Ended September 30,					Three Months Ended September 30,
	2022		2021		Change*	2022		2021		Change*
Other income/(expense):
Interest income	$	42	$	—	n/a	$	33	$	—	n/a
Interest expense	(440)		(321)		37	(176)		(108)		62
Other income/(expense), net	(1,132)		1,341		n/a	(1,097)		54		n/a
Total other income/(expense), net	$	(1,530)	$	1,020	n/a	$	(1,240)	$	(54)	n/a
Net income attributable to non-controlling interest	$	(37)	$	(9)	300%	$	(16)	$	(4)	284%

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

Interest Income

We recognized interest income of $42 million and $33 million during the nine and three months ended September 30, 2022, respectively. Interest income for the nine and three months ended September 30, 2022 primarily represents interest income on our short-term investments, including $30 million and $25 million in interest income recorded during the nine and three months ended September 30, 2022, respectively, in connection with the short-term investments related to the $4.9 billion of the SMR Notes for the Black Knight acquisition.

Interest Expense

We recognized interest expense of $440 million and $321 million during the nine months ended September 30, 2022 and 2021, respectively, and $176 million and $108 million during the three months ended September 30, 2022 and 2021, respectively. Interest expense for the nine and three months ended September 30, 2022 primarily represents interest expense on our outstanding debt. We recognized $79 million and $56 million during the nine and three months ended September 30, 2022, respectively, in interest expense on the Black Knight acquisition-related-debt, and during the nine months ended September 30, 2022, we recognized $30 million in costs associated with the extinguishment and re-financing of our existing debt in connection with our May 2022 debt refinancing. See “- Debt” below.

Other Income/(Expense), net

Our equity method investments include OCC and Bakkt, among others. We recognized ($1.1 billion) and $42 million during the nine months ended September 30, 2022 and 2021, respectively, and ($1.1 billion) and $8 million during the three months ended September 30, 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 nine and three months ended September 30, 2022 are primarily related to our investment in Bakkt, and the estimated profits during the nine and three months ended September 30, 2021 are related to our investment in OCC. Both the nine month periods ended September 30, 2022 and 2021 include adjustments to reflect the difference between reported prior period actual results from our original estimates.

As of September 30, 2022, after recording our share of Bakkt's equity method losses, which included Bakkt's impairment charge, the carrying value was determined to be $439 million. Based on our review, we determined that the decline in fair value was other than temporary in nature. Therefore, we recorded an impairment charge of $40 million on our investment in Bakkt to its fair value as of September 30, 2022 as other expense. (see Notes 3 and 4 to our consolidated financial statements included elsewhere in this Quarterly Report).

During the nine months ended September 30, 2021, Coinbase completed an IPO and we sold our investment in Coinbase for $1.24 billion, and recorded a gain of $1.23 billion as other income.

During the nine months ended September 30, 2021, we recorded a gain of $7 million related to the settlement of an acquisition-related indemnification claim from a prior acquisition as other income.

During the nine months ended September 30, 2022, we recorded a $9 million accrual and during the nine and three months ended September 30, 2021, we recorded a $16 million accrual for legal settlements, which are included in other expense.

We completed the sale of our Euroclear stake on May 20, 2022. The carrying value of our investment was $700 million at the time of the sale. We recorded a net gain of $41 million on the sale, which is included in other income during the nine

months ended September 30, 2022. We did not receive a Euroclear dividend during the nine months ended September 30, 2022 prior to the May 2022 sale of our investment. We recognized dividend income of $60 million and $30 million on our Euroclear investment during the nine and three months ended September 30, 2021, respectively, which is included in other income. In addition, during the three months ended September 30, 2021 we became aware of an observable price change in orderly transactions of similar Euroclear investments by a third party. The transactions resulted in a fair value adjustment of our Euroclear investment, and we recorded a gain of $34 million in other income, including the impact of foreign currency exchange.

We incurred foreign currency transaction losses of $9 million and $11 million for the nine months ended September 30, 2022 and 2021, respectively, and $2 million for the three months ended September 30, 2021, primarily attributable to the fluctuations of the pound sterling and euro relative to the U.S. dollar. We did not incur any significant foreign currency transaction gains/(losses) during the three months ended September 30, 2022. Foreign currency transaction gains/(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 September 30, 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 $186 million and $1.0 billion for the nine months ended September 30, 2022 and 2021, respectively, and a $152 million tax benefit and a $187 million tax expense for the three months ended September 30, 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. The $152 million tax benefit for the three months ended September 30, 2022 is primarily due to the deferred tax benefit associated with the impairment to our equity method investment in Bakkt more than offsetting the income tax expense on third quarter pre-tax income before the impairment. Our effective tax rate was 15% and 29% for the nine months ended September 30, 2022 and 2021, respectively, and 47% and 23% during the three months ended September 30, 2022 and 2021, respectively.

The effective tax rate for the nine months ended September 30, 2022 was lower than the effective tax rate for the comparable period in 2021 primarily due to the deferred income tax benefit associated with the impairment of our equity method investment in Bakkt in the current year period and the deferred income tax expense from U.K. tax law changes in the prior year period. During the nine months ended September 30, 2021, the U.K. Finance Act 2021 was enacted, which increased the U.K. corporate income tax rate from 19% to 25%, effective April 1, 2023.

The effective tax rate for the three months ended September 30, 2022 was higher than the effective tax rate for the comparable period in 2021 primarily due to the deferred tax benefit associated with the impairment of our equity method investment in Bakkt.

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 (YTD represents the nine-month periods ended September 30th).

*Excludes the proceeds from the sales of our stakes in Euroclear (Q2 2022) and Coinbase (Q2 2021).

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 $1.2 billion and $607 million as of September 30, 2022 and December 31, 2021, respectively. We had $6.4 billion and $1.4 billion in short-term and long-term restricted cash and cash equivalents as of September 30, 2022 and December 31, 2021, respectively, the increase of which is related to the restricted $4.9 billion net proceeds from the SMR Notes intended to be used to finance the Black Knight acquisition. We had $156.8 billion and $145.9 billion of cash and cash equivalent margin deposits and guaranty funds as of September 30, 2022 and December 31, 2021, respectively.

As of September 30, 2022, the amount of unrestricted cash held by our non-U.S. subsidiaries was $430 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 September 30, 2022, we held $4 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):


	Nine Months Ended September 30,
2022			2021
Net cash provided by/(used in):
Operating activities	$	2,462		$	2,130
Investing activities	(2,361)			1,325
Financing activities	16,373			21,166
Effect of exchange rate changes	(41)			(4)
Net increase in cash and cash equivalents, restricted cash and cash equivalents, and cash and cash equivalent margin deposits and guaranty funds	$	16,433		$	24,617

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 $332 million increase in net cash provided by operating activities during the nine months ended September 30, 2022 from the comparable period in 2021 was driven by an increase in net income adjusted for the gain on our sale of our Coinbase investment during the nine months ended September 30, 2021 and a gain on the sale of our Euroclear investment during the nine months ended September 30, 2022, as well as $1.1 billion in net losses from unconsolidated investees and an impairment loss of $40 million on our investment in Bakkt. The remaining fluctuations are due to changes in our working capital and the timing of various payments such as an increase in Section 31 fees payable of $194 million.

Investing Activities

Consolidated net cash used in investing activities for the nine months ended September 30, 2022 primarily relates to $6.9 billion of purchases of invested margin deposits, $125 million of capital expenditures and $200 million of capitalized software development costs, partially offset by $4.3 billion in proceeds from the sale of invested margin deposits and $741 million in proceeds from the sale of our Euroclear investment.

Consolidated net cash provided by investing activities for the nine months ended September 30, 2021 primarily relates to $1.2 billion of proceeds from the sale of our Coinbase investment and $3.3 billion of proceeds from sales of invested

margin deposits, partially offset by $2.8 billion purchases of invested margin deposits, $117 million of capital expenditures and $211 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 nine months ended September 30, 2022 primarily relates to an increase in our cash and cash equivalent margin deposits and guaranty fund balances of $13.5 billion due to increased volatility and $7.9 billion in net proceeds from our debt facilities, partially offset by $2.7 billion repayments of debt facilities, $1.0 billion in net repayments under our Commercial Paper Program, $632 million in repurchases of our common stock, $640 million in dividend payments to stockholders and $72 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 nine months ended September 30, 2021 primarily relates to an increase in our cash and cash equivalent margin deposits and guaranty fund balances of $24.1 billion, partially offset by $1.2 billion in repayments of debt facilities, $1.1 billion in net repayments under our Commercial Paper Program, $561 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.

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 financing activities.

Debt

As of September 30, 2022, we had $18.1 billion in outstanding debt, all of which relates to our senior notes. We also have $7 million under credit lines at our ICE India subsidiaries. As of September 30, 2022, our senior notes of $18.1 billion had a weighted average maturity of 17 years and a weighted average cost of 3.6% per annum. There were no amounts outstanding under our Commercial Paper Program as of September 30, 2022. 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 $3.9 billion senior unsecured revolving credit facility, or the Credit Facility, with a maturity date of May 25, 2027 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 September 30, 2022, of the $3.9 billion that was available for borrowing under the Credit Facility, $170 million was required to support certain broker-dealer and other subsidiary commitments. The remaining $3.7 billion was 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.

On May 23, 2022, we issued $8.0 billion in aggregate principal amount of new senior notes, comprised of the following:

$1.25 billion in aggregate principal amount of 3.65% senior notes due in 2025, or the 2025 Notes;
$1.5 billion in aggregate principal amount of 4.00% senior notes due in 2027, or the 2027 Notes;
$1.25 billion in aggregate principal amount of 4.35% senior notes due in 2029, or the 2029 Notes;
$1.5 billion in aggregate principal amount of 4.60% senior notes due in 2033, or the 2033 Notes;
$1.5 billion in aggregate principal amount of 4.95% senior notes due in 2052, or the 2052 Notes; and
$1.0 billion in aggregate principal amount of 5.20% senior notes due in 2062, or the 2062 Notes, collectively, the Notes.

We intend to use the net proceeds of $4.9 billion from the offering of the 2025 Notes, the 2027 Notes, the 2029 Notes and the 2062 Notes, or collectively, the SMR Notes, together with the issuance of commercial paper and/or borrowings under the Credit Facility, cash on hand or other immediately available funds and borrowings under the Term Loan, to finance the cash portion of the purchase price for Black Knight. The SMR Notes are subject to a special mandatory redemption feature pursuant to which we will be required to redeem all of the outstanding SMR Notes at a redemption price equal to 101% of the aggregate principal amount of the SMR Notes, plus accrued and unpaid interest, in the event that the Black Knight acquisition is not consummated on or prior to May 4, 2023 (subject to two automatic extensions of three months each, to August 4, 2023 and to November 4, 2023, respectively, if U.S. antitrust clearance or a related law, injunction, order or other judgment, in each case whether temporary, preliminary or permanent, that restrains, enjoins or otherwise prohibits the consummation of the Black Knight merger remains outstanding and all other conditions to closing are satisfied (or in the case of conditions that by their terms are to be satisfied at the closing, are capable of being satisfied if the closing were to occur on such date) at each extension date), or if the Black Knight merger agreement is terminated at any time prior to such date. The $4.9 billion net proceeds from the SMR Notes are separately invested and recorded as short-term restricted cash and cash equivalents in our consolidated balance sheet as of September 30, 2022.

We used the $3.0 billion of net proceeds from the offering of the 2033 Notes and the 2052 Notes to redeem $2.7 billion aggregate principal amount of four series of senior notes that would have matured in 2022 and 2023. The balance of the net proceeds was used for general corporate purposes, which included paying down a portion of the amounts outstanding under our Commercial Paper Program. We recorded $30 million in costs associated with the extinguishment and re-financing of our existing debt in connection with our May 2022 debt refinancing. These costs are included in interest expense in our consolidated statements of income for the nine months ended September 30, 2022. For additional information regarding this transaction, refer to Note 3 to our consolidated unaudited financial statements, included in this Quarterly Report.

On May 4, 2022, we entered into a 364-day senior unsecured bridge facility in an aggregate principal amount not to exceed $14.0 billion, or the Bridge Facility. The commitments that the Company obtained for the Bridge Facility were permanently reduced from $14.0 billion and there were no amounts outstanding as of September 30, 2022 as a result of (i) the amendment and extension of the Credit Facility, (ii) the issuance by the Company of certain senior unsecured notes on May 23, 2022, (iii) Euroclear divestment proceeds, (iv) the generation of cash internally by the Company, and (v) the effectiveness of our term loan facility.

On May 25, 2022, we entered into a $2.4 billion two-year senior unsecured delayed draw term loan facility, or the Term Loan. Draws under the Term Loan bear interest on the principal amount outstanding at either (a) Term SOFR plus an applicable margin plus a credit spread adjustment of 10 basis points or (b) a "base rate" plus an applicable margin. The applicable margin ranges from 0.625% to 1.125% for Term SOFR loans and from 0.000% to 0.125% for base rate loans, in each case, based on a ratings-based pricing grid. The proceeds from borrowings under the Term Loan will be used to fund a portion of the purchase price for the Black Knight acquisition. We have the option to prepay outstanding amounts under the Term Loan in whole or in part at any time. No amounts were outstanding under the Term Loan as of September 30, 2022.

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 paydowns of $1.0 billion under our Commercial Paper Program during the nine months ended September 30, 2022 and did not have any notes outstanding under our Commercial Paper Program as of September 30, 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 nine months ended September 30, 2022, we repurchased 5.0 million shares of our outstanding common stock at a cost of $632 million, including 4.6 million shares at a cost of $582 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. For the nine months ended September 30, 2021, we did not repurchase any of our outstanding common stock. Shares repurchased are held in treasury stock.

The remaining balance of Board approved funds for future repurchases as of September 30, 2022 is $2.5 billion. In connection with our pending acquisition of Black Knight, on May 4, 2022 we terminated our Rule 10b5-1 trading plan and suspended share repurchases. 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. Repurchases may be made from time to time on the open market, through established trading plans, in privately-negotiated transactions or otherwise, in accordance with all applicable securities laws, rules and regulations. 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 three months ended September 30, 2022, we paid a quarterly dividend of $0.38 per share of our common stock for an aggregate payout of $213 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 September 30, 2022, we had $2.5 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 November 3, 2022, we announced a $0.38 per share dividend for the fourth quarter of 2022 with the dividend payable on December 30, 2022 to stockholders of record as of December 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
	Nine Months Ended September 30,
	2022			2021			2022			2021			2022			2021			2022			2021
Total revenues, less transaction-based expenses	$	3,089		$	2,842		$	1,555		$	1,403		$	880		$	1,061		$	5,524		$	5,306
Operating expenses	904			977			1,029			1,010			817			750			2,750			2,737
Less: Amortization of acquisition-related intangibles	50			56			137			136			271			277			458			469
Less: Transaction and integration costs	—			12			—			—			79			28			79			40









Adjusted operating expenses	$	854		$	909		$	892		$	874		$	467		$	445		$	2,213		$	2,228
Operating income	$	2,185		$	1,865		$	526		$	393		$	63		$	311		$	2,774		$	2,569
Adjusted operating income	$	2,235		$	1,933		$	663		$	529		$	413		$	616		$	3,311		$	3,078
Operating margin	71		%	66		%	34		%	28		%	7		%	29		%	50		%	48		%
Adjusted operating margin	72		%	68		%	43		%	38		%	47		%	58		%	60		%	58		%

Net income attributable to ICE common stockholders																			$	1,021		$	2,531
Add: Amortization of acquisition-related intangibles																			458			469
Add: Transaction and integration costs																			79			40
Add: Accelerated unamortized costs related to the early payoff of the June 2023 floating rate senior notes																			—			4


Add: Impairment on Bakkt equity method investment																			40			—
Add: Accrual relating to legal settlement																			9			16
Add: Net interest expense on pre-acquisition-related debt																			49			—
Add: Extinguishment of 2022 and 2023 Senior Notes																			30			—



Less: Gain on sale and fair value adjustment of Euroclear equity investment and dividends received																			(41)			(94)
Less: Gain on sale of Coinbase equity investment																			—			(1,227)

Less: Gain related to the settlement of an acquisition-related indemnification claim																			—			(7)
Add/(Less): Net losses/(income) from unconsolidated investees																			1,112			(42)






Add/(Less): Income tax effect for the above items																			(478)			216

Add/(Less): Deferred tax adjustments on acquisition-related intangibles																			(3)			196

Adjusted net income attributable to ICE common stockholders																			$	2,276		$	2,102

Basic earnings per share attributable to ICE common stockholders																			$	1.83		$	4.50
Diluted earnings per share attributable to ICE common stockholders																			$	1.82		$	4.48

Adjusted basic earnings per share attributable to ICE common stockholders																			$	4.07		$	3.74
Adjusted diluted earnings per share attributable to ICE common stockholders																			$	4.06		$	3.72

Basic weighted average common shares outstanding																			559			563
Diluted weighted average common shares outstanding																			561			565


	Exchanges Segment						Fixed Income and Data Services Segment						Mortgage Technology Segment						Consolidated
	Three Months Ended September 30,
	2022			2021			2022			2021			2022			2021			2022			2021
Total revenues, less transaction-based expenses	$	1,001		$	959		$	534		$	477		$	276		$	366		$	1,811		$	1,802
Operating expenses	301			330			337			338			260			256			898			924
Less: Amortization of acquisition-related intangibles	17			19			44			45			91			92			152			156
Less: Transaction and integration costs	—			2			—			—			19			11			19			13









Adjusted operating expenses	$	284		$	309		$	293		$	293		$	150		$	153		$	727		$	755
Operating income	$	700		$	629		$	197		$	139		$	16		$	110		$	913		$	878
Adjusted operating income	$	717		$	650		$	241		$	184		$	126		$	213		$	1,084		$	1,047
Operating margin	70		%	66		%	37		%	29		%	6		%	30		%	50		%	49		%
Adjusted operating margin	72		%	68		%	45		%	39		%	46		%	58		%	60		%	58		%

Net income/(loss) attributable to ICE common stockholders																			$	(191)		$	633
Add: Amortization of acquisition-related intangibles																			152			156
Add: Transaction and integration costs																			19			13


Add: Accrual relating to legal settlement																			—			16


Add: Net interest expense on pre-acquisition-related debt																			31			—

Add: Accelerated unamortized costs related to the early payoff of the June 2023 floating rate senior notes																			—			4
Add: Impairment on Bakkt equity method investment																			40			—
Less: Gain on sale and fair value adjustment of Euroclear equity investment and dividends received																			—			(64)



Add/(Less): Net losses/(income) from unconsolidated investees																			1,055			(8)






Less: Income tax effect for the above items																			(355)			(38)

Less: Deferred tax adjustments on acquisition-related intangibles																			(18)			(1)

Adjusted net income attributable to ICE common stockholders																			$	733		$	711

Basic earnings/(loss) per share attributable to ICE common stockholders																			$	(0.34)		$	1.12
Diluted earnings/(loss) per share attributable to ICE common stockholders																			$	(0.34)		$	1.12

Adjusted basic earnings per share attributable to ICE common stockholders																			$	1.31		$	1.26
Adjusted diluted earnings per share attributable to ICE common stockholders																			$	1.31		$	1.26

Basic weighted average common shares outstanding																			558			563
Diluted weighted average common shares outstanding																			560			566

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 adjusted for the acquisition-related transaction costs related to the merger between Bakkt and VIH, and for our pending acquisition of Black Knight, due to the significance of these transactions.

During the nine months ended September 30, 2022, we included an accrual related to a legal settlement as a non-GAAP adjustment, and during the nine months ended September 30, 2021, we adjust for a gain related to the settlement of an acquisition-related indemnification claim from a prior acquisition. We do not consider events of this type to be reflective of our core business operations.

During the nine months ended September 30, 2022, we exclude the $30 million of costs associated with the May and June 2022 extinguishment of four series of senior notes that would have matured in 2022 and 2023 using proceeds from our May 2022 issuance of new senior notes as a non-GAAP adjustment. We also exclude $79 million of interest expense on pre-acquisition-related debt from our May 2022 debt refinancing related to the pending Black Knight acquisition. This adjustment is net of $30 million of interest income earned on investments from the pre-acquisition debt proceeds. We do not consider these to be part of our normal operations.

The acceleration of unamortized costs related to the early payoff of the June 2023 floating rate senior notes is included as a non-GAAP adjustment during the three months ended September 30, 2021 as it relates to the early redemption of our June 2023 floating rate senior notes. We do not consider these adjustments to be reflective of our normal operations.

As of September 30, 2022 the carrying value of our Bakkt investment was $439 million and exceeded its fair value by $40 million. Due to the decline in fair value, we were required to determine if this decline was other than temporary. Based on

our review, we determined that the decline in fair value was other than temporary in nature. During the three months ended September 30, 2022, we recorded an impairment charge on our investment in Bakkt of $40 million as other expense. This investment is not considered to be a part of our core business operations. See Note 4 of our consolidated financial statements in this Quarterly Report where discussed further.

During the nine months ended September 30, 2022, we exclude the $41 million gain on the sale of our Euroclear investment and the related historical dividends received of $60 million and $30 million during the nine and three months ended September 30, 2021, respectively. During the nine and three months ended September 30, 2021, we also exclude the $34 million fair value gain on our Euroclear equity investment. During the nine months ended September 30, 2021, we exclude the gain on the sale of our Coinbase investment. Such transactions are not considered a part of our core business operations.

We exclude net income/(losses) from our unconsolidated equity method investees for purposes of calculating non-GAAP measures. As of September 30, 2022, this adjustment includes our share of profits or losses from OCC, Bakkt, BondLink and our other equity method investments, and as of September 30, 2021, it included only OCC and BondLink. During the three months ended September 30, 2022, Bakkt reported an impairment of goodwill and intangible assets of approximately $1.5 billion, of which $1.0 billion is included in our share of estimated net losses from our unconsolidated equity method investees. 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 and equity method 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 $3 million and $18 million for the nine and three months ended September 30, 2022, respectively, relate primarily to U.S. state apportionment changes. The deferred tax adjustment of $196 million for the nine months ended September 30, 2021 relates primarily to the 2021 U.K. corporate income tax rate increase from 19% to 25% effective April 1, 2023.

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 nine months ended September 30, 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 nine months ended September 30, 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 nine months ended September 30, 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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