Item 1. Consolidated Financial Statements

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Item 1. Consolidated Financial Statements

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Balance Sheets

(In millions, except per share amounts)


	As of		As of December 31, 2022
	September 30, 2023
	(Unaudited)
Assets:
Current assets:
Cash and cash equivalents	$	837	$	1,799
Short-term restricted cash and cash equivalents	471		6,149
Restricted short-term investments	730		—
Cash and cash equivalent margin deposits and guaranty funds	79,297		141,990
Invested deposits, delivery contracts receivable and unsettled variation margin	1,899		5,382
Customer accounts receivable, net of allowance for doubtful accounts of $27 and $22 at September 30, 2023 and December 31, 2022, respectively	1,422		1,169
Prepaid expenses and other current assets	741		458
Total current assets	85,397		156,947
Property and equipment, net	1,918		1,767
Other non-current assets:
Goodwill	30,463		21,111
Other intangible assets, net	17,595		13,090
Long-term restricted cash and cash equivalents	190		405
Long-term restricted investments	199		—
Other non-current assets	1,260		1,018
Total other non-current assets	49,707		35,624
Total assets	$	137,022	$	194,338

Liabilities and Equity:
Current liabilities:
Accounts payable and accrued liabilities	$	964	$	866
Section 31 fees payable	18		223
Accrued salaries and benefits	377		352
Deferred revenue	334		170
Short-term debt	2,257		4
Margin deposits and guaranty funds	79,297		141,990
Invested deposits, delivery contracts payable and unsettled variation margin	1,899		5,382
Other current liabilities	136		184
Total current liabilities	85,282		149,171
Non-current liabilities:
Non-current deferred tax liability, net	4,210		3,493
Long-term debt	21,042		18,118
Accrued employee benefits	177		160
Non-current operating lease liability	306		254
Other non-current liabilities	493		381
Total non-current liabilities	26,228		22,406
Total liabilities	111,510		171,577
Commitments and contingencies



Equity:
Intercontinental Exchange, Inc. stockholders’ equity:
Preferred stock, $0.01 par value; 100 shares authorized; none issued or outstanding	—		—
Common stock, $0.01 par value; 1,500 shares authorized; 648 and 634 issued at September 30, 2023 and December 31, 2022, respectively, and 572 and 559 shares outstanding at September 30, 2023 and December 31, 2022, respectively	6		6
Treasury stock, at cost; 76 and 75 shares at September 30, 2023 and December 31, 2022, respectively	(6,278)		(6,225)
Additional paid-in capital	15,837		14,313
Retained earnings	16,225		14,943
Accumulated other comprehensive loss	(331)		(331)
Total Intercontinental Exchange, Inc. stockholders’ equity	25,459		22,706
Non-controlling interest in consolidated subsidiaries	53		55
Total equity	25,512		22,761
Total liabilities and equity	$	137,022	$	194,338

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)


	Nine Months Ended September 30,				Three Months Ended September 30,
	2023		2022		2023		2022
Revenues:
Exchanges	$	4,754	$	4,824	$	1,540	$	1,577
Fixed income and data services	1,668		1,555		559		534
Mortgage technology	815		880		330		276
Total revenues	7,237		7,259		2,429		2,387
Transaction-based expenses:
Section 31 fees	231		332		56		158
Cash liquidity payments, routing and clearing	1,219		1,403		370		418
Total revenues, less transaction-based expenses	5,787		5,524		2,003		1,811
Operating expenses:
Compensation and benefits	1,103		1,058		400		344
Professional services	88		101		31		32
Acquisition-related transaction and integration costs	201		81		155		19
Technology and communication	529		513		184		169
Rent and occupancy	65		63		20		22
Selling, general and administrative	196		166		59		54
Depreciation and amortization	836		768		309		258
Total operating expenses	3,018		2,750		1,158		898
Operating income	2,769		2,774		845		913
Other income/(expense):
Interest income	287		42		94		33
Interest expense	(557)		(440)		(206)		(176)
Other expense, net	(121)		(1,132)		(51)		(1,097)
Total other income/(expense), net	(391)		(1,530)		(163)		(1,240)
Income/(loss) before income tax expense	2,378		1,244		682		(327)
Income tax expense/(benefit)	330		186		123		(152)
Net income/(loss)	$	2,048	$	1,058	$	559	$	(175)
Net income attributable to non-controlling interest	(53)		(37)		(18)		(16)
Net income/(loss) attributable to Intercontinental Exchange, Inc.	$	1,995	$	1,021	$	541	$	(191)
Earnings/(loss) per share attributable to Intercontinental Exchange, Inc. common stockholders:
Basic	$	3.56	$	1.83	$	0.96	$	(0.34)
Diluted	$	3.55	$	1.82	$	0.96	$	(0.34)
Weighted average common shares outstanding:
Basic	561		559		563		558
Diluted	562		561		565		560

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(In millions)

(Unaudited)


	Nine Months Ended September 30,				Three Months Ended September 30,
	2023		2022		2023		2022
Net income/(loss)	$	2,048	$	1,058	$	559	$	(175)
Other comprehensive income/(loss):
Foreign currency translation adjustments	—		(207)		(47)		(98)



Other comprehensive loss	—		(207)		(47)		(98)
Comprehensive income/(loss)	$	2,048	$	851	$	512	$	(273)
Comprehensive income attributable to non-controlling interest	(53)		(37)		(18)		(16)
Comprehensive income/(loss) attributable to Intercontinental Exchange, Inc.	$	1,995	$	814	$	494	$	(289)

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interest

(In millions)

(Unaudited)


	Intercontinental Exchange, Inc. Stockholders’ Equity												Non- Controlling Interest in Consolidated Subsidiaries		Total Equity
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)
	Shares	Value		Shares	Value
Balance, as of December 31, 2022	634	$	6	(75)	$	(6,225)	$	14,313	$	14,943	$	(331)	$	55	$	22,761

Stock consideration issued for acquisition	11						1,256								1,256
Exercise of common stock options	—	—		—	—		27		—		—		—		27


Payments relating to treasury shares	—	—		(1)	(53)		—		—		—		—		(53)
Stock-based compensation	—	—		—	—		198		—		—		—		198
Issuance under the employee stock purchase plan	1	—		—	—		43		—		—		—		43
Contribution from equity partners	—	—		—	—		—		—		—		9		9
Issuance of restricted stock	2	—		—	—		—		—		—		—		—

Distributions of profits	—	—		—	—		—		—		—		(64)		(64)
Dividends paid to stockholders	—	—		—	—		—		(713)		—		—		(713)


Net income/(loss) attributable to non-controlling interest	—	—		—	—		—		(53)		—		53		—
Net income	—	—		—	—		—		2,048		—		—		2,048
Balance, as of September 30, 2023	648	$	6	(76)	$	(6,278)	$	15,837	$	16,225	$	(331)	$	53	$	25,512


	Intercontinental Exchange, Inc. Stockholders’ Equity												Non- Controlling Interest in Consolidated Subsidiaries		Total Equity
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)
	Shares	Value		Shares	Value
Balance, as of June 30, 2023	636	$	6	(76)	$	(6,276)	$	14,449	$	15,925	$	(284)	$	69	$	23,889
Other comprehensive loss	—	—		—	—		—		—		(47)		—		(47)
Stock consideration issued for acquisition	11						1,256								1,256
Exercise of common stock options	—	—		—	—		3		—		—		—		3


Payments relating to treasury shares	—	—		—	(2)		—		—		—		—		(2)
Stock-based compensation	—	—		—	—		104		—		—		—		104
Issuance under the employee stock purchase plan	1	—		—	—		25		—		—		—		25



Distributions of profits	—	—		—	—		—		—		—		(34)		(34)
Dividends paid to stockholders	—	—		—	—		—		(241)		—		—		(241)


Net income/(loss) attributable to non-controlling interest	—	—		—	—		—		(18)		—		18		—
Net income	—	—		—	—		—		559		—		—		559
Balance, as of September 30, 2023	648	$	6	(76)	$	(6,278)	$	15,837	$	16,225	$	(331)	$	53	$	25,512

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interest - (Continued)

(In millions)

(Unaudited)


	Intercontinental Exchange, Inc. Stockholders’ Equity												Non- Controlling Interest in Consolidated Subsidiaries		Total Equity
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)
	Shares	Value		Shares	Value
Balance, as of December 31, 2021	631	$	6	(70)	$	(5,520)	$	14,069	$	14,350	$	(196)	$	39	$	22,748
Other comprehensive loss	—	—		—	—		—		—		(207)		—		(207)
Exercise of common stock options	—	—		—	—		22		—		—		—		22
Repurchases of common stock	—	—		(4)	(632)		—		—		—		—		(632)
Payments relating to treasury shares	—	—		(1)	(72)		—		—		—		—		(72)
Stock-based compensation	—	—		—	—		129		—		—		—		129
Issuance under the employee stock purchase plan	1	—		—	—		49		—		—		—		49
Issuance of restricted stock	2	—		—	—		—		—		—		—		—
Distributions of profits	—	—		—	—		—		—		—		(35)		(35)
Dividends paid to stockholders	—	—		—	—		—		(640)		—		—		(640)

Net income/(loss) attributable to non-controlling interest	—	—		—	—		—		(37)		—		37		—
Net income	—	—		—	—		—		1,058		—		—		1,058
Balance, as of September 30, 2022	634	$	6	(75)	$	(6,224)	$	14,269	$	14,731	$	(403)	$	41	$	22,420


	Intercontinental Exchange, Inc. Stockholders’ Equity												Non- Controlling Interest in Consolidated Subsidiaries		Total Equity
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)
	Shares	Value		Shares	Value
Balance, as of June 30, 2022	633	$	6	(75)	$	(6,223)	$	14,201	$	15,135	$	(305)	$	47	$	22,861
Other comprehensive loss	—	—		—	—		—		—		(98)		—		(98)

Exercise of common stock options	—	—		—	—		2		—		—		—		2


Payments relating to treasury shares	—	—		—	(1)		—		—		—		—		(1)
Stock-based compensation	—	—		—	—		41		—		—		—		41
Issuance under the employee stock purchase plan	1	—		—	—		25		—		—		—		25



Distributions of profits	—	—		—	—		—		—		—		(22)		(22)
Dividends paid to stockholders	—	—		—	—		—		(213)		—		—		(213)


Net income/(loss) attributable to non-controlling interest	—	—		—	—		—		(16)		—		16		—
Net loss	—	—		—	—		—		(175)		—		—		(175)
Balance, as of September 30, 2022	634	$	6	(75)	$	(6,224)	$	14,269	$	14,731	$	(403)	$	41	$	22,420

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Nine Months Ended September 30,
	2023		2022
Operating activities:
Net income	$	2,048	$	1,058
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	836		768

Stock-based compensation	164		116
Deferred taxes	(247)		(515)
Loss/(gain) on sale of investments	8		(41)


Net losses from and impairment of unconsolidated investees	91		1,152

Other	54		31
Changes in assets and liabilities:
Customer accounts receivable	(112)		(72)
Other current and non-current assets	(35)		(170)
Section 31 fees payable	(205)		1
Deferred revenue	127		130
Other current and non-current liabilities	(156)		4
Total adjustments	525		1,404
Net cash provided by operating activities	2,573		2,462

Investing activities:
Capital expenditures	(104)		(125)
Capitalized software development costs	(222)		(200)
Purchases of invested margin deposits	(1,360)		(6,935)
Proceeds from sales of invested margin deposits	3,396		4,285
Cash paid for acquisitions, net of cash acquired	(10,247)		(57)


Proceeds from sale of/(purchases of) equity and equity method investments	90		(69)
Proceeds from sale of Euroclear investment	—		741

Purchases of investments	(956)		—

Other	—		(1)

Net cash used in investing activities	(9,403)		(2,361)

Financing activities:


Proceeds from/(repayments of) debt facilities, net	514		5,189

Proceeds from/(redemption of) commercial paper, net	2,257		(1,012)

Repurchases of common stock	—		(632)
Dividends to stockholders	(713)		(640)
Change in cash and cash equivalent margin deposits and guaranty funds	(64,729)		13,503
Payments relating to treasury shares received for restricted stock tax payments and stock option exercises	(53)		(72)



Other	13		37
Net cash (used in)/provided by financing activities	(62,711)		16,373
Effect of exchange rate changes on cash, cash equivalents, restricted cash and cash equivalents, and cash and cash equivalent margin deposits and guaranty funds	(7)		(41)
Net (decrease)/increase in cash, cash equivalents, restricted cash and cash equivalents, and cash and cash equivalent margin deposits and guaranty funds	(69,548)		16,433
Cash, cash equivalents, restricted cash and cash equivalents, and cash and cash equivalent margin deposits and guaranty funds at beginning of period	150,343		147,976
Cash, cash equivalents, restricted cash and cash equivalents, and cash and cash equivalent margin deposits and guaranty funds at end of period	$	80,795	$	164,409

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Continued)

(In millions)

(Unaudited)


	Nine Months Ended September 30,
	2023		2022
Supplemental cash flow disclosure:
Cash paid for income taxes	$	658	$	710
Cash paid for interest	$	524	$	368

Reconciliation of the components of cash, cash equivalents, restricted cash and cash equivalents, and cash and cash equivalent margin deposits and guaranty funds to the balance sheet:	As of September 30, 2023		As of September 30, 2022
Cash and cash equivalents	$	837	$	1,183
Short-term restricted cash and cash equivalents	471		6,032
Long-term restricted cash and cash equivalents	190		405
Cash and cash equivalent margin deposits and guaranty funds	79,297		156,789
Total	$	80,795	$	164,409

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

**1.**Description of Business

Nature of Business and Organization

Intercontinental Exchange, Inc. is a provider of market infrastructure, data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities. These products, which span major asset classes including futures, equities, fixed income and United States, or U.S., residential mortgages provide our customers with access to mission critical tools that are designed to increase asset class transparency and workflow efficiency. Our business is conducted through three reportable business segments:

Exchanges:** We operate regulated marketplaces for the listing, trading and clearing of a broad array of derivatives contracts and financial securities.
Fixed Income and Data Services:** We provide fixed income pricing, reference data, indices, analytics and execution services as well as global credit default swap, or CDS, clearing and multi-asset class data delivery solutions.
Mortgage Technology:** We provide a technology platform that offers customers comprehensive, digital workflow tools that aim to address inefficiencies and mitigate risks that exist in the U.S. residential mortgage market life cycle from application through closing, servicing and the secondary market.

We operate marketplaces, technology and provide data services in the U.S., United Kingdom, or U.K., European Union, or EU, Canada, Asia Pacific and the Middle East.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with our audited consolidated financial statements and related notes thereto for the year ended December 31, 2022. The accompanying unaudited consolidated financial statements reflect all adjustments that are, in our opinion, necessary for a fair presentation of results for the interim periods presented. We believe that these adjustments are of a normal recurring nature.

Preparing financial statements in conformity with U.S. GAAP requires us to make certain estimates and assumptions that affect the amounts that are reported in our consolidated financial statements and accompanying disclosures. Actual amounts could differ from those estimates. The results of operations for the nine and three months ended September 30, 2023 are not necessarily indicative of the results to be expected for any future period or the full fiscal year.

These statements include the accounts of our wholly-owned and controlled subsidiaries. All intercompany balances and transactions between us and our wholly-owned and controlled subsidiaries have been eliminated in consolidation. For consolidated subsidiaries in which our ownership is less than 100% and for which we have control over the assets and liabilities and the management of the entity, the outside stockholders’ interests are shown as non-controlling interests.

We have considered the impacts of macroeconomic conditions during the quarter, including interest rates, the inflationary environment, geopolitical events and military conflicts, including repercussions from the conflicts in Ukraine, Israel and Gaza and the impacts that any of the foregoing may have on the global economy and on our business. As of September 30, 2023, our businesses and operations, 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. There continues to be uncertainty surrounding the current macroeconomic environment and the impact that it may have on the global economy and on our business.

Recently Adopted Accounting Pronouncements

During the nine months ended September 30, 2023, there were no significant changes to the new and recently adopted accounting pronouncements applicable to us from those disclosed in Note 2 to the consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022, or the 2022 Form 10-K.

3. Acquisitions and Divestitures

Black Knight, Inc.

On September 5, 2023 we acquired 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 Agreement and Plan of Merger, dated as of May 4, 2022, among ICE, Sand Merger Sub Corporation, a wholly owned subsidiary of ICE, or Sub, and Black Knight, which we refer to as the "merger agreement," Sub merged with and into Black Knight, which we refer to as the "merger," with Black Knight surviving as a wholly-owned subsidiary of ICE.

The aggregate transaction consideration was approximately $11.8 billion, or $76 per share of Black Knight common stock, with cash comprising 90% of the value of the aggregate transaction consideration and shares of our common stock comprising 10% of the value of the aggregate transaction consideration. The aggregate cash component of the transaction consideration was $10.5 billion, and the value of the aggregate stock component of the transaction consideration was based on the market price of our common stock and 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. We expect that this transaction will build on our position as a provider of end-to-end electronic workflow solutions for the rapidly evolving U.S. residential mortgage industry. 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 September 14, 2023, or the Divestiture Date, in connection with the merger agreement, we sold Black Knight's Optimal Blue and Empower loan origination system, or LOS, businesses, or the Divestitures, to subsidiaries of Constellation Software, Inc. The cash proceeds from the Divestitures were $241 million. The structure of the Optimal Blue transaction also included a promissory note with a face value of $500 million, or the Promissory Note, issued by the purchaser to Black Knight, as a subsidiary of ICE, at the closing of the transaction. The Promissory Note has a 40-year term with a maturity date of September 5, 2063, and a coupon interest rate of 7.0% per year. As discussed in more detail below, the Promissory Note was valued at $235 million on the Divestiture Date. In accordance with Accounting Standards Codification, or ASC, 805, Business Combinations, or ASC 805, as well as ASC 360, Impairment and Disposal of Long-Lived Assets, we are required to measure an acquired long-lived asset or disposal group that is classified as held for sale at the acquisition date at fair value less cost to sell. Accordingly, there was no gain or loss recognized on the Divestitures.

For the period between the acquisition date of September 5, 2023 through the Divestiture Date, the discontinued operations of Empower and Optimal Blue were immaterial and have been included in acquisition-related transaction and integration costs in our consolidated statements of income for the nine and three months ending September 30, 2023.

Pursuant to the Agreement Containing Consent Orders entered into between the Federal Trade Commission, or the FTC, and ICE and Black Knight, all rights, title and interest in the promissory note were transferred to a trustee appointed by the FTC for the purpose of selling the promissory note within six months of the Divestiture Date. Proceeds of the promissory note sale, net of trustee expenses, will be paid to ICE and Black Knight once the sale is final and approved by the FTC. We have elected the fair value option for the right to receive the net proceeds of the sale of the Promissory Note, which was $235 million based on Level 3 inputs on the Divestiture Date (Note 14).

The estimated fair value of the consideration transferred for Black Knight was approximately $11.3 billion as of the acquisition date, which consisted of the following (in millions):


	Transaction Consideration
Cash	$	10,542
ICE common stock	1,256
Converted unvested Black Knight awards	22
Total preliminary purchase price	$	11,820
Less: Divestitures	(476)
Total net preliminary purchase price	$	11,344

The purchase price has been allocated to the net tangible and identifiable intangible assets and liabilities based on the preliminary respective estimated fair values on the date of acquisition. The excess of purchase price over the net tangible and identifiable intangible assets has been recorded as goodwill. Goodwill represents potential revenue synergies related to new product development, various expense synergies and opportunities to enter new markets, and is assigned to our

mortgage technology reporting unit. The preliminary purchase price allocation is as follows (in millions):


	Preliminary Purchase Price
Cash and cash equivalents	$	58
Property and equipment	147
Goodwill	9,349
Identifiable intangibles	4,991
Debt acquired	(2,389)
Other assets and liabilities, net	154
Deferred tax liabilities on identifiable intangibles	(1,276)
Other deferred tax assets	310
Preliminary purchase price	$	11,344

In performing the preliminary purchase price allocation, we considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of the Black Knight business. We have not yet obtained all of the information related to the fair value of the acquired assets and liabilities.

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the valuation of the identifiable intangible assets, income taxes, and certain other tangible assets and liabilities. The allocation of the purchase price will be finalized upon the completion of the analysis of the acquired assets and liabilities within one year of the date of acquisition.

The following table sets forth the components of the preliminary intangible assets associated with the acquisition as of September 30, 2023 (in millions, except years):


	Acquisition-Date Preliminary Fair Value		Accumulated Amortization		Net Book Value		Useful Life (Years)
Developed Technology	$	1,129	$	(9)	$	1,120	2 to 10
Trademarks/Tradenames	159		(1)		158		5 to 20
Customer Relationships	3,077		(19)		3,058		1 to 15
Data and Databases	579		(5)		574		10
In-process Research & Development	47		—		47		N/A
Total	$	4,991	$	(34)	$	4,957

From the acquisition date through September 30, 2023, Black Knight revenues of $87 million, which were included in our mortgage technology revenues and operating expenses of $139 million were recorded in our consolidated income statement for the nine and three months ended September 30, 2023.

We are currently reviewing the impact of this acquisition under ASC 805. Any additional disclosures would not be practical for the nine and three months ending September 30, 2023 due to the size and timing of the acquisition. Such disclosures, if any, will be included in our Annual Report on Form 10-K for the fiscal year ending December 31, 2023.

See Note 13 where additional details of this transaction are discussed.

4. Investments

Dun & Bradstreet

In connection with our acquisition of Black Knight, we acquired an investment in Dun & Bradstreet Holdings, Inc., or D&B, a global provider of business decisioning data and analytics, which we classify as an equity investment. During the three months ended September 30, 2023, we sold 51% of our investment for $97 million and recorded a loss on the sale of $1 million. As of September 30, 2023, we maintain an investment of approximately 2% ownership in D&B, which we

record at fair value with gains and losses recognized in net income using Level 2 inputs (Note 14). During the three months ended September 30, 2023, we recorded a fair value loss of $7 million, which is included as other expense.

Euroclear

We previously owned a 9.8% stake in Euroclear, plc, or Euroclear, that we originally purchased for $631 million. We participated on the Euroclear Board of Directors, and we classified our investment in Euroclear as an equity investment.

On May 20, 2022, we completed the sale of our 9.8% stake in Euroclear. The carrying value of our investment was $700 million at the time of the sale and was classified within other current assets on our balance sheet. We recorded a net gain on the sale of $41 million, which was included in other income, during the nine months ended September 30, 2022.

Equity Method Investments

Our equity method investments include the Options Clearing Corporation, or OCC, and Bakkt Holdings, LLC, or Bakkt, among others. Our equity method investments are included in other non-current assets in the accompanying consolidated balance sheet. We initially record our equity method investments at cost. At the end of each reporting period, we record our share of profits or losses of our equity method investments as equity earnings included in other income, and adjust the carrying value of our equity method investment accordingly. In addition, if and when our equity method investments issue cash dividends to us, we deduct the amount of these dividends from the carrying amount of that investment. We assess the carrying value periodically if impairment indicators are present.

We recognized $91 million and $1.1 billion as our share of estimated losses, net, from our equity method investments during the nine months ended September 30, 2023 and 2022, respectively, and $26 million and $1.1 billion as our share of losses, net, from our equity method investments during the three months ended September 30, 2023 and 2022, respectively. The estimated losses during both the nine and three months ended September 30, 2023 and 2022 are primarily related to our investment in Bakkt, partially offset by our share of OCC profits. Both periods include adjustments to reflect the difference between reported prior period actual results from our original estimates.

When performing our assessment of the carrying value of our investments, we consider, among other things, the length of time and the extent to which the market value has been less than our cost basis, if applicable, the investee's financial condition and near-term prospects, the economic or technological environment in which our investees operate, weakening of the general market condition of the related industry, whether an investee can continue as a going concern, any impairment charges recorded by an investee on goodwill, intangible or long-lived assets, and our intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value.

OCC

We own a 40% interest in OCC through a direct investment by the New York Stock Exchange, or NYSE. OCC is regulated by the SEC as a registered clearing agency and by the Commodity Futures Trading Commission, or CFTC, as a derivatives clearing organization. OCC serves as a clearing house for securities options, security futures, commodity futures and options on futures traded on various independent exchanges. OCC clears securities options traded on NYSE Arca and NYSE Amex Options, along with other non-affiliated exchanges.

Bakkt

As of September 30, 2023, we held an approximate 64% economic interest in Bakkt. As a result of limitations on ICE from the Bakkt voting agreement entered into in connection with Bakkt's merger with VIH, we hold a minority voting interest in Bakkt and treat it as an equity method investment. 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 was included in our share of estimated losses. We also recorded an impairment of $40 million in our investment in Bakkt to its fair value as of September 30, 2022 as other expense. This was based on what we considered to be an other than temporary decline in fair value as a result of the factors noted above, including consideration for the impairment charge recorded by Bakkt.

5. Revenue Recognition

Substantially all of our revenues are considered to be revenues from contracts with customers. The related accounts receivable balances are recorded in our balance sheets as customer accounts receivable. We do not have obligations for warranties, returns or refunds to customers, other than rebates, which are settled each period and therefore do not result in variable consideration. We do not have significant revenue recognized from performance obligations that were satisfied in prior periods, and we do not have any transaction price allocated to unsatisfied performance obligations other than in our deferred revenue. Certain judgments and estimates are used in the identification and timing of satisfaction of

performance obligations and the related allocation of transaction price. We believe that these represent a faithful depiction of the transfer of services to our customers.

Deferred revenue represents our contract liabilities related to our annual, original and other listings revenues, certain data services, clearing services, mortgage technology services and other revenues. Deferred revenue is our only significant contract liability. See Note 7 for our discussion of deferred revenue balances, activity, and expected timing of recognition.

For all of our contracts with customers, except for listings and certain data, clearing and mortgage services, our performance obligations are short term in nature and there is no significant variable consideration. In addition, we have elected the practical expedient of excluding sales taxes from transaction prices. We have assessed the costs incurred to obtain or fulfill a contract with a customer, which are primarily our sales commissions.

Refer to Note 5 to the consolidated financial statements included in Part II, Item 8 of our 2022 Form 10-K where our primary revenue contract classifications are described in detail.

The following table depicts the disaggregation of our revenue according to business line and segment (in millions). Amounts here have been aggregated as they follow consistent revenue recognition patterns, and are consistent with the segment information in Note 15:


	Exchanges Segment		Fixed Income and Data Services Segment		Mortgage Technology Segment		Total Consolidated
Nine Months Ended September 30, 2023:
Total revenues	$	4,754	$	1,668	$	815	$	7,237
Transaction-based expenses	1,450		—		—		1,450
Total revenues, less transaction-based expenses	$	3,304	$	1,668	$	815	$	5,787

Timing of Revenue Recognition
Services transferred at a point in time	$	1,902	$	343	$	240	$	2,485
Services transferred over time	1,402		1,325		575		3,302
Total revenues, less transaction-based expenses	$	3,304	$	1,668	$	815	$	5,787


	Exchanges Segment		Fixed Income and Data Services Segment		Mortgage Technology Segment		Total Consolidated
Three Months Ended September 30, 2023:
Total revenues	$	1,540	$	559	$	330	$	2,429
Transaction-based expenses	426		—		—		426
Total revenues, less transaction-based expenses	$	1,114	$	559	$	330	$	2,003

Timing of Revenue Recognition
Services transferred at a point in time	$	639	$	114	$	92	$	845
Services transferred over time	475		445		238		1,158
Total revenues, less transaction-based expenses	$	1,114	$	559	$	330	$	2,003


	Exchanges Segment		Fixed Income and Data Services Segment		Mortgage Technology Segment		Total Consolidated
Nine Months Ended September 30, 2022:
Total revenues	$	4,824	$	1,555	$	880	$	7,259
Transaction-based expenses	1,735		—		—		1,735
Total revenues, less transaction-based expenses	$	3,089	$	1,555	$	880	$	5,524

Timing of Revenue Recognition
Services transferred at a point in time	$	1,760	$	263	$	374	$	2,397
Services transferred over time	1,329		1,292		506		3,127
Total revenues, less transaction-based expenses	$	3,089	$	1,555	$	880	$	5,524


	Exchanges Segment		Fixed Income and Data Services Segment		Mortgage Technology Segment		Total Consolidated
Three Months Ended September 30, 2022:
Total revenues	$	1,577	$	534	$	276	$	2,387
Transaction-based expenses	576		$	—	$	—	576
Total revenues, less transaction-based expenses	$	1,001	$	534	$	276	$	1,811

Timing of Revenue Recognition
Services transferred at a point in time	$	563	$	104	$	104	$	771
Services transferred over time	438		430		172		1,040
Total revenues, less transaction-based expenses	$	1,001	$	534	$	276	$	1,811

The Exchanges segment and the Fixed Income and Data Services segment revenues above include data services revenues. Our data services revenues are transferred over time, and a majority of those revenues are performed over a short period of time of one month or less and relate to subscription-based data services billed monthly, quarterly or annually in advance. These revenues are recognized ratably over time as our data delivery performance obligations are met consistently throughout the period.

The Exchanges segment revenues transferred over time in the table above include services related to listings, services related to risk management of open interest performance obligations and services related to regulatory fees, trading permits, and software licenses.

The Fixed Income and Data Services segment revenues transferred over time in the table above include services related to risk management of open interest performance obligations, primarily in our CDS business.

The Mortgage Technology segment revenues transferred over time in the table above primarily relate to our origination technology revenue where performance obligations consist of a series of distinct services and are recognized over the contract terms as subscription performance obligations are satisfied, and to a lesser extent, professional services revenues and revenues from certain of our data and analytics and servicing software offerings.

The components of services transferred over time for each of our segments are as follows:


	Nine Months Ended September 30,				Three Months Ended September 30,
	2023		2022		2023		2022
Exchanges Segment:
Data services revenues	$	699	$	651	$	236	$	219
Services transferred over time related to risk management of open interest performance obligations	229		201		78		62
Services transferred over time related to listings	376		388		124		128
Services transferred over time related to regulatory fees, trading permits, and software licenses	98		89		37		29
Total	$	1,402	$	1,329	$	475	$	438

Fixed Income Data Services Segment:
Data services revenues	$	1,300	$	1,263	$	436	$	420
Services transferred over time related to risk management of open interest performance obligations in our CDS business	25		29		9		10
Total	$	1,325	$	1,292	$	445	$	430

Mortgage Technology Segment:
Recurring revenues	$	564	$	479	$	235	$	163
Other	11		27		3		9
Total	$	575	$	506	$	238	$	172

Total consolidated revenues transferred over time	$	3,302	$	3,127	$	1,158	$	1,040

6. Goodwill and Other Intangible Assets

The following is a summary of the activity in our goodwill balance for the nine months ended September 30, 2023 (in millions):


Goodwill balance at December 31, 2022	$	21,111
Acquisition	9,349
Foreign currency translation	2
Other activity, net	1
Goodwill balance at September 30, 2023	$	30,463

The following is a summary of the activity in our other intangible assets balance for the nine months ended September 30, 2023 (in millions):


Other intangible assets balance at December 31, 2022	$	13,090
Acquisition	4,996
Foreign currency translation	1
Amortization of other intangible assets	(492)

Other intangible assets balance at September 30, 2023	$	17,595

The goodwill and intangible assets related to acquisitions in the tables above are primarily a result of our acquisition of Black Knight in September 2023, as described in Note 3.

Foreign currency translation adjustments result from a portion of our goodwill and other intangible assets being held at our U.K., EU and Canadian subsidiaries, whose functional currencies are not the U.S. dollar. The changes in other activity, net, in the table above primarily relate to adjustments to the fair value of the net tangible and intangible assets made within one year of acquisitions, with a corresponding adjustment to goodwill.

During the nine months ended September 30, 2023, we considered potential indicators of impairment to goodwill and other intangible assets for each of our reporting units, which included continued global inflation concerns and rising interest rates, including their effect on our forecasts, among other things. As such, we performed this assessment to determine whether it was more-likely-than-not that goodwill and indefinite lived intangibles within each of our reporting units were impaired. Additionally, we evaluated whether the carrying value of the finite lived intangible assets within our

reporting units may not be recoverable. After evaluating events, circumstances and factors which could affect the significant inputs used in our evaluation of cash flows and related fair value, we determined it was not more-likely-than-not that an impairment existed in our goodwill and indefinite lived intangible assets or that the carrying amount of our finite lived intangible assets was not recoverable. We plan to perform our annual impairment testing in the fourth quarter.

7. Deferred Revenue

Our contract liabilities, or deferred revenue, represent consideration received that is yet to be recognized as revenue. Total deferred revenue was $449 million as of September 30, 2023, including $334 million in current deferred revenue and $115 million in other non-current liabilities. The changes in our deferred revenue during the nine months ended September 30, 2023 are as follows (in millions):


	Listings Revenues		Data Services and Other Revenues		Mortgage Technology		Total
Deferred revenue balance at January 1, 2023	$	115	$	88	$	51	$	254
Additions (1)	485		311		144		940
Amortization	(376)		(281)		(88)		(745)
Deferred revenue balance at September 30, 2023	$	224	$	118	$	107	$	449

(1) Additions in our Mortgage Technology segment in the table above include $68 million of deferred revenue acquired on the date of the Black Knight acquisition (Note 3) and $28 million of Black Knight related deferred revenue added in the period after the date of acquisition through September 30, 2023.

The changes in our deferred revenue during the nine months ended September 30, 2022 are as follows (in millions):


	Listings Revenues		Data Services and Other Revenues		Mortgage Technology		Total
Deferred revenue balance at January 1, 2022	$	112	$	93	$	79	$	284
Additions	505		330		62		897
Amortization	(388)		(301)		(82)		(771)
Deferred revenue balance at September 30, 2022	$	229	$	122	$	59	$	410

Included in the amortization recognized during the nine months ended September 30, 2023 is $127 million related to the deferred revenue balance as of January 1, 2023. Included in the amortization recognized for the nine months ended September 30, 2022 is $144 million related to the deferred revenue balance as of January 1, 2022. As of September 30, 2023, the remaining deferred revenue balance will be recognized over the period of time we satisfy our performance obligations as described in Note 5.

8. Debt

Our total debt, including short-term and long-term debt, consisted of the following (in millions):


	As of September 30, 2023		As of December 31, 2022
Debt:
Short-term debt:
Commercial Paper	$	2,257	$	—


Other short-term debt	$	—	$	4
Total short-term debt	2,257		4
Long-term debt:




2025 Term Loan due August 31, 2025	2,000		—
2025 Senior Notes (3.65% senior unsecured notes due May 23, 2025)	1,245		1,243
2025 Senior Notes (3.75% senior unsecured notes due December 1, 2025)	1,248		1,247
2027 Senior Notes (4.00% senior unsecured notes due September 15, 2027)	1,488		1,487
2027 Senior Notes (3.10% senior unsecured notes due September 15, 2027)	498		498
2028 Senior Notes (3.625% senior unsecured notes due September 1, 2028)	909		—
2028 Senior Notes (3.75% senior unsecured notes due September 21, 2028)	595		594
2029 Senior Notes (4.35% senior unsecured notes due June 15, 2029)	1,241		1,240
2030 Senior Notes (2.10% senior unsecured notes due June 15, 2030)	1,237		1,235
2032 Senior Notes (1.85% senior unsecured notes due September 15, 2032)	1,486		1,485
2033 Senior Notes (4.60% senior unsecured notes due March 15, 2033)	1,489		1,488
2040 Senior Notes (2.65% senior unsecured notes due September 15, 2040)	1,232		1,231
2048 Senior Notes (4.25% senior unsecured notes due September 21, 2048)	1,232		1,231
2050 Senior Notes (3.00% senior unsecured notes due June 15, 2050)	1,222		1,221
2052 Senior Notes (4.95% senior unsecured notes due June 15, 2052)	1,465		1,464
2060 Senior Notes (3.00% senior unsecured notes due September 15, 2060)	1,472		1,471
2062 Senior Notes (5.20% senior unsecured notes due June 15, 2062)	983		983
Total long-term debt	21,042		18,118
Total debt	$	23,299	$	18,122

Our senior notes of $19.0 billion have a weighted average maturity of 15 years and a weighted average cost of 3.6% per annum.

Black Knight Senior Notes

As of September 30, 2023, Black Knight's $1.0 billion principal amount of its 3.625% senior notes due 2028 were outstanding. The notes became part of ICE's consolidated long-term debt on the acquisition date of September 5, 2023.

Credit Facilities

We have a $3.9 billion senior unsecured revolving credit facility, or the Credit Facility, with a maturity date of May 25, 2027, with future capacity to increase our borrowings under the Credit Facility by an additional $1.0 billion, subject to the consent of the lenders funding the increase and certain other conditions. No amounts were outstanding under the Credit Facility as of September 30, 2023.

As of September 30, 2023, of the $3.9 billion that was available for borrowing under the Credit Facility, $2.3 billion is required to back-stop the amount outstanding under our U.S. dollar commercial paper program, or the Commercial Paper Program, and $171 million is required to support certain broker-dealer and other subsidiary commitments. The amount required to backstop the amounts outstanding under the Commercial Paper Program will fluctuate as we increase or decrease our commercial paper borrowings. The remaining $1.4 billion was available for working capital and general corporate purposes including, but not limited to, acting as a backstop to future amounts outstanding under the Commercial Paper Program.

We have a $2.4 billion two-year senior unsecured delayed draw term loan facility, or the Term Loan, with a maturity date of August 31, 2025. We borrowed the Term Loan in full on August 31, 2023 in connection with the Black Knight acquisition, and on September 29, 2023, we repaid $400 million, reducing the principal outstanding balance at September 30, 2023, to $2.0 billion. Draws under the Term Loan bear interest on the principal amount outstanding at the Term Secured Overnight

Financing Rate, or Term SOFR, plus an applicable margin, currently 0.775%, plus a credit spread adjustment of 10 basis points. We have the option to prepay outstanding amounts under the Term Loan in whole or in part at any time.

Our India subsidiaries maintain $14 million of credit lines for their general corporate purposes. As of September 30, 2023, there were no amounts outstanding under these credit lines.

Commercial Paper Program

Our Commercial Paper Program is currently backed by the borrowing capacity available under the Credit Facility, as described above. The effective interest rate of commercial paper issuances does not materially differ from short-term interest rates, which fluctuate due to market conditions and as a result may impact our interest expense. During the three months ended September 30, 2023, we had net issuances of $2.3 billion under the Commercial Paper Program that were primarily used to fund a portion of the purchase price for the Black Knight acquisition.

Commercial paper notes of $2.3 billion with original maturities ranging from three to 45 days were outstanding as of September 30, 2023, with a weighted average interest rate of 5.62% per annum, and a weighted average remaining maturity of 20 days.

9. Share-Based Compensation

We currently sponsor stock option plans, restricted stock plans and our Employee Stock Purchase Plan to our employees and directors. Stock options and restricted stock are granted at the discretion of the Compensation Committee of our Board of Directors, or Board, based on the estimated fair value on the date of grant. The fair value of the stock options and restricted stock on the date of grant is recognized as expense over the vesting period, net of forfeitures. The non-cash compensation expenses recognized in our consolidated statements of income for stock options, restricted stock and under our employee stock purchase plan, net of amounts classified as capitalized software, were $164 million and $116 million for the nine months ended September 30, 2023 and 2022, respectively, and $79 million and $39 million during the three months ended September 30, 2023 and 2022, respectively, including the expense related to the converted Black Knight restricted stock awards, discussed below.

Stock Option Plans

We use the Black-Scholes option pricing model to value our stock option awards. During the nine months ended September 30, 2023 and 2022, we used the assumptions in the table below to compute the value:


	Nine Months Ended September 30,
Assumptions:	2023	2022
Risk-free interest rate	3.47%	1.72%
Expected life in years	6.1	6.0
Expected volatility	24%	23%
Expected dividend yield	1.56%	1.17%
Estimated weighted-average fair value of options granted per share	$27.39	$28.18

The risk-free interest rate is based on the zero-coupon U.S. Treasury yield curve in effect at the date of grant. The expected life is derived from historical and anticipated future exercise patterns. Expected volatility is based on historical volatility data of our stock.

Restricted Stock Plans

Restricted shares are used as an incentive to attract and retain qualified employees and to align our and our stockholders' interests by linking actual performance to both short and long-term stockholder return. We issue awards that may contain a combination of time, performance and/or market conditions. The grant date fair value of each award is based on the closing stock price of our stock at the date of grant. The grant date fair value of time-based restricted stock is recognized as expense ratably over the vesting period, which is typically three or four years, net of forfeitures.

In February 2023, we reserved a maximum of 0.9 million restricted shares for potential issuance as performance-based restricted shares to certain of our employees. The number of shares ultimately granted under this award will be based on our actual financial performance as compared to financial performance targets set by our Board and the Compensation Committee for the year ending December 31, 2023, and will also be subject to a market condition reduction based on how our 2023 total stockholder return, or TSR, compares to that of the S&P 500 Index. The maximum compensation expense to be recognized under these performance-based restricted shares is $92 million if the maximum financial performance target is met and all 0.9 million shares vest. The compensation expense to be recognized under these performance-based restricted shares will be $46 million if the target financial performance is met, which would result in 0.4 million shares

vesting. For these awards with performance conditions, we recognize expense on an accelerated basis over the three-year vesting period based on our quarterly assessment of the probable 2023 actual financial performance as compared to the 2023 financial performance targets. As of September 30, 2023, our best estimate is that the financial performance level will be above target for 2023. Based on this assessment, we recorded non-cash compensation expense of $26 million and $12 million for the nine and three months ended September 30, 2023, respectively, related to these awards and the remaining $40 million in non-cash compensation expense will be recorded on an accelerated basis over the remaining vesting period, including $10 million which will be recorded over the remainder of 2023.

We also issue awards with a market condition but no performance condition. The fair value of these awards is estimated based on a simulation of various outcomes and includes inputs such as our stock price on the grant date, the valuation of historical awards with market conditions, the relatively low likelihood that the market condition will affect the number of shares granted (as the market condition only affects shares granted in excess of certain financial performance targets), and our expectation of achieving the financial performance targets.

In October 2023, we granted performance-based restricted awards to certain of our employees. We reserved shares for potential issuance of these awards with vesting terms over five years.

Black Knight Restricted Stock Awards

In connection with our Black Knight acquisition in September 2023, certain restricted stock awards held by Black Knight employees were converted to ICE restricted stock awards. The replacement awards contain the same terms and conditions as were applicable to the awards immediately prior to the merger. These awards will be fully vested by 2026. Our stock compensation expense for the three months ended September 30, 2023 related to these awards was $5 million. In connection with the Divestitures, $28 million of replacement restricted stock awards accelerated for the period between the acquisition date of September 5, 2023, through the Divestiture Date (Note 3).

10. Equity

Stock Repurchase Program

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 on January 1, 2022. The approval of our Board for the share 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. We fund repurchases from our operating cash flow or borrowings under our debt facilities or our Commercial Paper Program. 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. We may begin or discontinue stock repurchases at any time and may amend or terminate a Rule 10b5-1 trading plan at any time or enter into additional plans, subject to applicable rules.

We did not have any share repurchases during the nine months or three months ended September 30, 2023. During the nine months ended September 30, 2022, we repurchased a total of 5.0 million shares of our outstanding common stock at a cost of $632 million, consisting of 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. We did not have any stock repurchases during the three months ended September 30, 2022. As of September 30, 2023, the remaining balance of Board approved funds for future repurchases was $2.5 billion. In connection with our acquisition of Black Knight, on May 4, 2022 we terminated our Rule 10b5-1 trading plan and suspended share repurchases.

Dividends

During the nine months ended September 30, 2023 and 2022, we declared and paid cash dividends per share of $1.26 and $1.14, respectively, for an aggregate payout of $713 million and $640 million, respectively. During the three months ended September 30, 2023 and 2022, we declared dividends per share of $0.42 and $0.38, respectively for an aggregate payout of $241 million and $213 million, respectively. The declaration of dividends is subject to the discretion of our Board. Our Board has adopted a quarterly dividend declaration policy providing that the declaration of any dividends will be determined quarterly by the Board or the Audit Committee, taking into account such factors as our evolving business model, prevailing business conditions, our financial results and capital requirements and other considerations which our Board deems relevant, without a predetermined annual net income payout ratio.

Accumulated Other Comprehensive Income/(Loss)

The following tables present changes in the accumulated balances for each component of other comprehensive income/ (loss) (in millions):


	Changes in Accumulated Other Comprehensive Income/(Loss) by Component
	Foreign currency translation adjustments		Comprehensive income from equity method investment		Employee benefit plans adjustments		Total















Balance, as of December 31, 2022	$	(278)	$	2	$	(55)	$	(331)
Other comprehensive income	—		—		—		—
Income tax benefit/(expense)	—		—		—		—
Net current period other comprehensive income	—		—		—		—
Balance, as of September 30, 2023	$	(278)	$	2	$	(55)	$	(331)


	Changes in Accumulated Other Comprehensive Income/(Loss) by Component
	Foreign currency translation adjustments		Comprehensive income from equity method investment		Employee benefit plans adjustments		Total















Balance, as of June 30, 2023	$	(231)	$	2	$	(55)	$	(284)
Other comprehensive loss	(47)		—		—		(47)
Income tax benefit/(expense)	—		—		—		—
Net current period other comprehensive loss	(47)		—		—		(47)
Balance, as of September 30, 2023	$	(278)	$	2	$	(55)	$	(331)


	Changes in Accumulated Other Comprehensive Income/(Loss) by Component
	Foreign currency translation adjustments		Comprehensive income from equity method investment		Employee benefit plans adjustments		Total















Balance, as of December 31, 2021	$	(150)	$	2	$	(48)	$	(196)
Other comprehensive loss	(208)		—		—		(208)
Income tax benefit/(expense)	1		—		—		1
Net current period other comprehensive loss	(207)		—		—		(207)
Balance, as of September 30, 2022	$	(357)	$	2	$	(48)	$	(403)


	Changes in Accumulated Other Comprehensive Income/(Loss) by Component
	Foreign currency translation adjustments		Comprehensive income from equity method investment		Employee benefit plans adjustments		Total















Balance, as of June 30, 2022	$	(259)	$	2	$	(48)	$	(305)
Other comprehensive loss	(98)		—		—		(98)
Income tax benefit/(expense)	—		—		—		—
Net current period other comprehensive loss	(98)		—		—		(98)
Balance, as of September 30, 2022	$	(357)	$	2	$	(48)	$	(403)

11. Income Taxes

Our effective tax rate was 14% and 15% during the nine months ended September 30, 2023 and 2022, respectively, and 18% and 47% during the three months ended September 30, 2023 and 2022, respectively. The effective tax rates for the nine and three months ended September 30, 2023 were lower than the effective tax rates for the comparable periods in 2022 primarily due to the deferred income tax benefits from the impairment to our equity method investment in Bakkt during the three months ended September 30, 2022, and the current year tax benefits resulting from the following items: favorable audit settlements for historical years, favorable state apportionment changes and the application of the high-tax exception to Global Intangible Low-Taxed Income. These current year tax benefits were partially offset by the impact of the U.K. corporate income tax increase from 19% to 25% effective April 1, 2023 and the tax impact of certain non-deductible Black Knight acquisition costs.

In conjunction with the increase in the U.K. corporate income tax rate, we intend to elect the high-tax exception to Global Intangible Low-Taxed Income in 2023. During the three months ended September 30, 2023, our tax provision includes the impacts of this election. Our unrecognized tax benefit as of September 30, 2023 was $267 million, a $20 million net

increase from the $247 million as of December 31, 2022. The net increase includes a $40 million reduction as a result of audit settlements, a $24 million increase related to our acquisition of Black Knight, a $22 million increase related to current year positions, a $33 million increase related to prior year positions, and a $19 million reduction related to prior year positions.

In July 2023, the U.K. Finance Act 2023, or the Act, was enacted and is effective as of January 1, 2024. The Act included provisions to implement certain portions of the Organisation for Economic Cooperation and Development Global Anti-Base Erosion Pillar Two global minimum tax rules. The Act did not have a material impact on our financial statements as of September 30, 2023.

In August 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law. The IRA introduced a 15% corporation 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. Based on the current guidance provided by the Internal Revenue Service and Treasury, the implementation of the CAMT does not have a material impact to our financial statements as of September 30, 2023.

The IRA also includes a share buyback excise tax of 1% on share repurchases, which will apply to net share repurchases after December 31, 2022. During the nine months ended September 30, 2023, we did not repurchase any shares, therefore, we were not subject to any excise tax. The newly imposed excise tax on share repurchases is not considered an income tax. Any excise tax, as a result of future share repurchases, will be considered part of the cost of the shares repurchased and reflected in the equity section of our consolidated financial statements.

12. Clearing Operations

We operate six clearing houses, each of which acts as a central counterparty that becomes the buyer to every seller and the seller to every buyer for its clearing members or participants, or Members. Through this central counterparty function, the clearing houses provide financial security for each transaction for the duration of the position by limiting counterparty credit risk.

Our clearing houses are responsible for providing clearing services to each of our futures exchanges, and in some cases to third-party execution venues, and are as follows, referred to herein collectively as "the ICE Clearing Houses":


Clearing House	Products Cleared	Exchange where Executed	Location
ICE Clear Europe	Energy, agricultural, interest rates and equity index futures and options contracts and OTC European CDS instruments	ICE Futures Europe, ICE Futures U.S., ICE Endex, ICE Futures Abu Dhabi and third-party venues	U.K.
ICE Clear U.S.	Agricultural, metals, foreign exchange, or FX, interest rate and equity index futures and/or options contracts	ICE Futures U.S.	U.S.
ICE Clear Credit	OTC North American, European, Asian-Pacific and Emerging Market CDS instruments	Creditex and third-party venues	U.S.
ICE Clear Netherlands	Derivatives on equities and equity indices traded on regulated markets	ICE Endex	The Netherlands
ICE Clear Singapore	Energy, metals and financial futures products	ICE Futures Singapore	Singapore
ICE NGX	Physical North American natural gas and electricity	ICE NGX	Canada

In 2022, we announced our decision to cease our CDS clearing service at ICE Clear Europe, our clearing house in the U.K., and thereafter our sole CDS clearing offering will be at our ICE Clear Credit clearing house in the U.S. All cleared CDS positions at ICE Clear Europe were successfully transferred as of October 2023. All CDS products have been delisted at ICE Clear Europe and the final regulatory steps for de-registration should be completed in November 2023.

Original and Variation Margin

Each of the ICE Clearing Houses generally requires all Members to deposit collateral in cash or certain pledged assets. The collateral deposits are known as “original margin.” In addition, the ICE Clearing Houses may make intraday original margin calls in circumstances where market conditions require additional protection. The daily profits and losses to and from the ICE Clearing Houses due to the marking-to-market of open contracts is known as “variation margin.” The ICE Clearing Houses mark all outstanding contracts to market, and, with the exception of ICE NGX’s physical natural gas and physical power products discussed separately below, pay and collect variation margin, at least once daily.

The amounts that Members are required to maintain are determined by proprietary risk models established by each ICE Clearing House and reviewed by the relevant regulators, independent model validators, risk committees and the boards of directors of the respective ICE Clearing House. The amounts required may fluctuate over time. Each of the ICE Clearing

Houses is a separate legal entity and is not subject to the liabilities of the others, or the obligations of Members of the other ICE Clearing Houses.

Should a particular Member fail to deposit its original margin or fail to make a variation margin payment, when and as required, the relevant ICE Clearing House may liquidate or hedge the defaulting Member's open positions and use their original margin and guaranty fund deposits to pay any amount owed. In the event that the defaulting Member's deposits are not sufficient to pay the amount owed in full, the ICE Clearing Houses will first use their respective contributions to the guaranty fund, often referred to as Skin In The Game, or SITG, to pay any remaining amount owed. In the event that the SITG is not sufficient, the ICE Clearing Houses may utilize the respective guaranty fund deposits and default insurance, or collect limited additional funds from their respective non-defaulting Members on a pro-rata basis, to pay any remaining amount owed.

As of September 30, 2023 and December 31, 2022, the ICE Clearing Houses had received or had been pledged $178.4 billion and $273.3 billion, respectively, in cash and non-cash collateral in original margin and guaranty fund deposits to cover price movements of underlying contracts for both periods.

Guaranty Funds and ICE Contribution

As described above, mechanisms have been created, called guaranty funds, to provide partial protection in the event of a Member default. With the exception of ICE NGX, each of the ICE Clearing Houses requires that each Member make deposits into a guaranty fund.

In addition, we have contributed our own capital that could be used if a defaulting Member’s original margin and guaranty fund deposits are insufficient. Such amounts are recorded as long-term restricted cash and cash equivalents or long-term restricted investments in our balance sheets and are as follows (in millions):


	ICE Portion of Guaranty Fund Contribution		Default insurance
Clearing House	As of September 30, 2023	As of December 31, 2022	As of September 30, 2023	As of December 31, 2022
ICE Clear Europe	$247	$247	$100	$100
ICE Clear U.S.*	75	90	25	25
ICE Clear Credit	50	50	75	75
ICE Clear Netherlands	2	2	N/A	N/A
ICE Clear Singapore	1	1	N/A	N/A
ICE NGX	15	15	200	200
Total	$390	$405	$400	$400

*The decrease in the ICE portion of the guaranty fund contribution during the three months ended September 30, 2023 was driven by the termination of our agreement with Bakkt to clear Bitcoin, and the related requirement for us to maintain a $15 million guaranty fund contribution.

We also maintain default insurance as an additional layer of clearing member default protection. The default insurance was renewed in September 2022 and has a three-year term for the following clearing houses in the following amounts: ICE Clear Europe - $100 million; ICE Clear U.S. - $25 million; and ICE Clear Credit - $75 million. The default insurance layer resides after and in addition to the ICE Clear Europe, ICE Clear U.S. and ICE Clear Credit SITG contributions and before the guaranty fund contributions of the non-defaulting Members.

Similar to SITG, the default insurance layer is not intended to replace or reduce the position risk-based amount of the guaranty fund. As a result, the default insurance layer is not a factor that is included in the calculation of the Members' guaranty fund contribution requirement. Instead, it serves as an additional, distinct, and separate default resource that should serve to further protect the non-defaulting Members’ guaranty fund contributions from being mutualized in the event of a default.

As of September 30, 2023, ICE NGX maintained a guaranty fund of $215 million, comprised of $15 million in cash and a $200 million letter of credit backed by a default insurance policy of the same amount, discussed below.

Below is a depiction of our Default Waterfall which summarizes the lines of defense and layers of protection we maintain for our mutualized clearing houses.

ICE Clearing House Default Waterfall

ICE Risk Waterfall graphic for clearing FN.jpg

Cash and Invested Margin Deposits

We have recorded cash and invested margin and guaranty fund deposits and amounts due in our balance sheets as current assets with corresponding current liabilities to the Members. As of September 30, 2023, our cash and invested margin deposits were as follows (in millions):


	ICE Clear Europe (1)		ICE Clear Credit		ICE Clear U.S.		ICE NGX		Other ICE Clearing Houses		Total
Original margin	$	41,441	$	27,317	$	4,050	$	—	$	5	$	72,813
Unsettled variation margin, net	—		—		—		785		—		785
Guaranty fund	3,785		2,661		613		—		5		7,064
Delivery contracts receivable/payable, net	—		—		—		534		—		534
Total	$	45,226	$	29,978	$	4,663	$	1,319	$	10	$	81,196

As of December 31, 2022, our cash and invested margin deposits were as follows (in millions):


	ICE Clear Europe (2)		ICE Clear Credit		ICE Clear U.S.		ICE NGX		Other ICE Clearing Houses		Total
Original margin	$	101,243	$	31,277	$	4,141	$	—	$	5	$	136,666
Unsettled variation margin, net	—		—		—		749		—		749
Guaranty fund	4,162		3,177		597		—		4		7,940
Delivery contracts receivable/payable, net	—		—		—		2,017		—		2,017
Total	$	105,405	$	34,454	$	4,738	$	2,766	$	9	$	147,372

(1) $43.6 billion and $1.6 billion is related to futures/options and CDS, respectively.

(2) $97.6 billion and $7.8 billion is related to futures/options and CDS, respectively.

Our cash and invested margin and guaranty fund deposits are maintained in accounts with national banks and highly-rated financial institutions or secured through direct investments, primarily in U.S. Treasury and other highly-rated foreign government securities, or reverse repurchase agreements with primarily overnight maturities. We primarily use Level 1

inputs when evaluating the fair value of the non-cash equivalent direct investments, as highly-rated government securities are quoted in active markets. The carrying value of these deposits is deemed to approximate fair value.

To provide a tool to address the liquidity needs of our clearing houses and manage the liquidation of margin and guaranty fund deposits held in the form of cash and high quality sovereign debt, ICE Clear Europe, ICE Clear Credit and ICE Clear U.S. have entered into Committed Repurchase Agreement Facilities, or Committed Repo. Additionally, ICE Clear Credit and ICE Clear Netherlands have entered into Committed FX Facilities to support these liquidity needs. As of September 30, 2023, the following facilities were in place:

ICE Clear Europe: $1.0 billion in Committed Repo to finance U.S. dollar, euro and pound sterling deposits.
ICE Clear Credit: $300 million in Committed Repo (U.S. dollar based) to finance U.S. dollar denominated sovereign debt and euro deposits, €250 million in Committed Repo (euro based) to finance euro and U.S. dollar denominated sovereign debt deposits, and €1.9 billion in Committed FX Facilities to finance euro payment obligations.
ICE Clear U.S.: $250 million in Committed Repo to finance U.S. dollar denominated sovereign debt deposits.
ICE Clear Netherlands: €10 million in Committed FX Facilities to finance euro payment obligations.

Details of our deposits are as follows (in millions):


Cash and Cash Equivalent Margin Deposits and Guaranty Funds
Clearing House	Investment Type	As of September 30, 2023		As of December 31, 2022
ICE Clear Europe	National bank account (1)	$	5,553	$	17,390
ICE Clear Europe	Reverse repo	37,107		65,352
ICE Clear Europe	Sovereign debt	1,963		19,894
ICE Clear Europe	Demand deposits	22		153
ICE Clear Credit	National bank account	21,690		27,145
ICE Clear Credit	Reverse repo	5,075		3,916
ICE Clear Credit	Demand deposits	3,213		3,393
ICE Clear U.S.	Reverse repo	4,515		4,266
ICE Clear U.S.	Sovereign Debt	149		472
Other ICE Clearing Houses	Demand deposits	10		9

Total cash and cash equivalent margin deposits and guaranty funds		$	79,297	$	141,990


Invested Deposits, Delivery Contracts Receivable and Unsettled Variation Margin
Clearing House	Investment Type	As of September 30, 2023		As of December 31, 2022
ICE NGX	Unsettled variation margin and delivery contracts receivable/payable	1,319		2,766
ICE Clear Europe	Invested deposits - sovereign debt	580		2,616
Total invested deposits, delivery contracts receivable and unsettled variation margin		$	1,899	$	5,382

(1) As of September 30, 2023, ICE Clear Europe held €92 million ($97 million based on the euro/U.S. dollar exchange rate of 1.0572 as of September 30, 2023) at the European Central Bank, or ECB, £4.5 billion ($5.4 billion based on the pound sterling/U.S. dollar exchange rate of 1.2200 as of September 30, 2023) at the Bank of England, or BOE, and €10 million ($11 million based on the above exchange rate) at the BOE. As of December 31, 2022, ICE Clear Europe held €11.7 billion ($12.5 billion based on the euro/U.S. dollar exchange rate of 1.0704 as of December 31, 2022) at ECB, £4.0 billion ($4.9 billion based on the pound sterling/U.S. dollar exchange rate of 1.2093 as of December 31, 2022) at the BOE and €10 million ($11 million based on the above exchange rate) at the BOE.

Other Deposits

Non-cash original margin and guaranty fund deposits are not reflected in the accompanying consolidated balance sheets as the risks and rewards of these assets remain with the clearing members unless the clearing houses have sold or re-pledged the assets or in the event of a clearing member default, where the clearing member is no longer entitled to redeem the assets. Any income, gain or loss accrues to the clearing members.

In addition to the cash and invested deposits above, the ICE Clearing Houses have also received other assets from Members, which include government obligations, emissions allowances, and may include other non-cash collateral such

as letters of credit at ICE NGX to mitigate credit risk. For certain deposits, we may impose discount or “haircut” rates to ensure adequate collateral if market values fluctuate. The value-related risks and rewards of these assets remain with the Members. Any gain or loss accrues to the Member. The ICE Clearing Houses do not, in the ordinary course, rehypothecate or re-pledge these assets. These pledged assets are not reflected in our balance sheets, and are as follows (in millions):


	As of September 30, 2023
	ICE Clear Europe		ICE Clear Credit		ICE Clear U.S.		ICE NGX		Total
Original margin:
Government securities at face value	$	45,875	$	30,955	$	12,224	$	—	$	89,054
Letters of credit and other	529		—		—		4,046		4,575
ICE NGX cash deposits	—		—		—		1,286		1,286
Total	$	46,404	$	30,955	$	12,224	$	5,332	$	94,915
Guaranty fund:
Government securities at face value	$	962	$	1,082	$	290	$	—	$	2,334


	As of December 31, 2022
	ICE Clear Europe		ICE Clear Credit		ICE Clear U.S.		ICE NGX		Total
Original margin:
Government securities at face value	$	74,964	$	26,601	$	14,855	$	—	$	116,420
Letters of credit	—		—		—		5,434		5,434
ICE NGX cash deposits	—		—		—		2,357		2,357
Total	$	74,964	$	26,601	$	14,855	$	7,791	$	124,211
Guaranty fund:
Government securities at face value	$	641	$	805	$	269	$	—	$	1,715

The ICE Clearing Houses invest cash margin deposits, including both the guaranty fund and original margin deposits on behalf of clearing members, primarily for purposes of safeguarding customer funds. Interest earned on cash margin investments is provided back to clearing members net of certain costs and administrative fees charged and retained by ICE. The ICE Clearing Houses also charge fees for clearing members pledging non-cash margin in lieu of cash margin, these fees are fully retained by ICE. The net interest income on cash margin and fees charged for non-cash margin retained by the ICE Clearing Houses is recorded in our Exchanges segment as OTC and other revenues and in our Fixed Income and Data Services segment as CDS clearing revenues in our consolidated statement of income. We recognized a combined $280 million and $241 million as our revenues during the nine months ended September 30, 2023 and 2022, respectively, and $89 million and $102 million as our revenues during the three months ended September 30, 2023 and 2022, respectively.

ICE NGX

ICE NGX owns a clearing house which primarily administers the physical delivery of energy trading contracts. ICE NGX is the central counterparty to Members on opposite sides of its physically-settled contracts, and the balance related to delivered but unpaid contracts is recorded as a delivery contract net receivable, with an offsetting delivery contract net payable in our balance sheets. Unsettled variation margin equal to the fair value of open contracts is recorded as of each balance sheet date. There is no impact on our consolidated statements of income as an equal amount is recognized as both an asset and a liability. ICE NGX marks all its outstanding physical natural gas and physical power contracts to market daily, but only collects variation margin when a Member's open position falls outside a specified percentage of its pledged collateral. Due to the highly liquid nature and the short period of time to maturity, the fair values of our delivery contract net payable and net receivable are determined to approximate carrying value.

ICE NGX requires Members to maintain cash or letters of credit to serve as collateral in the event of default. The cash is maintained in a segregated bank account for the benefit of the Member, and remains the property of the Member, therefore, it is not included in our balance sheets. ICE NGX maintains a committed daylight-overnight liquidity facility in the amount of $100 million with an additional $200 million uncommitted with a third-party Canadian chartered bank which provides liquidity in the event of a settlement shortfall, subject to certain conditions.

As of September 30, 2023, ICE NGX maintains a guaranty fund of $215 million funded by a $200 million letter of credit issued by a major Canadian chartered bank, and backed by default insurance underwritten by Export Development

Canada, or EDC, a Crown corporation operated at arm’s length from the Canadian government, plus $15 million held as restricted cash to fund the first loss amount that ICE NGX is responsible for under the default insurance policy. In the event of a participant default where the Member’s collateral is depleted, the shortfall would be covered by a draw down on the letter of credit following which ICE NGX would file a claim under the default insurance to recover additional losses up to $200 million beyond the $15 million first-loss amount that ICE NGX is responsible for under the default insurance policy.

Clearing House Exposure

The net notional value of unsettled contracts was $2.1 trillion as of September 30, 2023. Each ICE Clearing House bears financial counterparty credit risk and provides a central counterparty guarantee, or performance guarantee, to its Members. To reduce their exposure, the ICE Clearing Houses have a risk management program with both initial and ongoing membership standards. Excluding the effects of original and variation margin, guaranty fund and collateral requirements and default insurance, the ICE Clearing Houses’ maximum estimated exposure for this guarantee is $147.5 billion as of September 30, 2023, which represents the maximum estimated value by the ICE Clearing Houses of a hypothetical one-day movement in pricing of the underlying unsettled contracts. This value was determined using proprietary risk management software that simulates gains and losses based on historical market prices, volatility and other factors present at that point in time for those particular unsettled contracts. Future market price volatility could result in the exposure being significantly different than this amount.

13. Legal Proceedings

In the ordinary course of our business, from time to time we are subject to legal proceedings, lawsuits, government investigations and other claims with respect to a variety of matters. In addition, we are subject to periodic reviews, inspections, examinations and investigations by regulators in the U.S. and other jurisdictions, any of which may result in claims, legal proceedings, assessments, fines, penalties, restrictions on our business or other sanctions. We record estimated expenses and reserves for legal or regulatory matters or other claims when these matters present loss contingencies that are probable and the related amount is reasonably estimable. Any such accruals may be adjusted as circumstances change. Assessments of losses are inherently subjective and involve unpredictable factors. While the outcome of legal and regulatory matters is inherently difficult to predict and/or the range of loss often cannot be reasonably estimable, we do not believe that the liabilities, other than our accrual related to a potential regulatory settlement of $10 million, which may ultimately result from the resolution of the various legal and regulatory matters that arise in the ordinary course of our business, including the PennyMac Arbitration matter described below and those described in Note 16 to the consolidated financial statements in Part II, Item 8 of our 2022 Form 10-K, are likely to have a material adverse effect on our consolidated financial condition, results of operations, or liquidity. It is possible, however, that future results of operations for any particular quarterly or annual period could be materially and adversely affected by any developments relating to these legal and regulatory matters. A range of possible losses related to certain cases cannot be reasonably estimated at this time, except as otherwise disclosed below and in Note 16 to the consolidated financial statements in Part II, Item 8 of our 2022 Form 10-K. Individual matter disclosures in this Form 10-Q are limited to new significant matters or significant updates on existing matters since the 2022 Form 10-K.

Black Knight Transaction Litigation

On March 9, 2023, the Federal Trade Commission, or the FTC, filed an administrative complaint alleging that the proposed transaction between ICE and Black Knight, if consummated, would be an unfair method of competition in violation of Section 5 of the Federal Trade Commission Act, and that it would substantially lessen competition, or tend to create a monopoly, in violation of Section 7 of the Clayton Act. The complaint sought a variety of injunctive relief, including, among other things, a prohibition on the completion of the transaction without the FTC’s consent and, if the transaction is completed, a divestiture or reconstitution of assets in a manner that restores such separate and independent businesses as the parties had operated prior to the completion of the transaction. On April 10, 2023, the FTC filed a complaint in the United States District Court for the Northern District of California for a temporary restraining order and preliminary injunction enjoining the completion of the transaction. On April 21, 2023, the court entered a temporary restraining order, or TRO, enjoining the completion of the transaction until the court ruled on the FTC’s motion for a preliminary injunction. In their answers to the administrative and court complaints, filed on March 20, 2023 and April 25, 2023, respectively, ICE and Black Knight denied the FTC’s substantive allegations; asserted numerous affirmative defenses; described the pro-competitive aspects and significant lender, servicer, investor, vendor and consumer benefits relating to this transaction; and denied that the combination of their respective businesses would violate any laws. Additionally, the answers to the court complaint contained counterclaims by ICE and Black Knight against the FTC seeking declaratory relief that the FTC’s administrative process is unconstitutional and should be enjoined. On July 17, 2023, the district court entered an order granting a joint motion by the parties to continue the evidentiary hearing on the FTC's motion for a preliminary injunction, noting that the parties were discussing a potential resolution of the matter resulting from the announcement of the planned divestiture of the Optimal Blue business (Note 3) and the FTC’s analysis

of the implications of the divestiture for this case and the administrative complaint. On July 25, 2023, the FTC granted an unopposed motion filed by FTC counsel to withdraw the administrative complaint from adjudication, and, on August 7, 2023, the parties announced a joint stipulation to dismiss the federal court complaint and dissolve the TRO. ICE and Black Knight entered into an Agreement Containing Consent Orders with the FTC's Bureau of Competition on August 25, 2023, which fully and finally resolved the matter upon completion of the transaction effective as of September 5, 2023.

PennyMac Arbitration

In 2019, Black Knight Servicing Technologies, LLC, or BKST, an indirect, wholly-owned subsidiary of Black Knight, filed a Complaint and Demand for Jury Trial, or the Black Knight Complaint, against PennyMac Loan Services, LLC, or PennyMac, in Florida state court. The Black Knight Complaint includes causes of action for breach of contract and misappropriation of MSP® System trade secrets by PennyMac for it to develop a mortgage servicing system intended to replace the MSP® System. The Black Knight Complaint seeks damages for breach of contract and misappropriation of trade secrets, injunctive relief under the Florida Uniform Trade Secrets Act and a declaratory judgment that BKST owns all intellectual property and software developed by or on behalf of PennyMac as a result of its wrongful use of and access to the MSP® System and related trade secret and confidential information. PennyMac filed a motion to compel arbitration of the action, and the trial court granted the motion in 2020. The trial court’s order compelling arbitration was confirmed on appeal.

Shortly after the filing of the Black Knight Complaint, PennyMac filed an Antitrust Complaint, or the PennyMac Complaint, against Black Knight in the United States District Court for the Central District of California. The PennyMac Complaint includes causes of action for alleged monopolization and attempted monopolization under Section 2 of the Sherman Antitrust Act, violation of California’s Cartwright Act, violation of California’s Unfair Competition Law and common law unfair competition under California law. The PennyMac Complaint seeks equitable remedies, damages and other monetary relief, including treble and punitive damages. Generally, PennyMac alleges that Black Knight relies on various anticompetitive, unfair and discriminatory practices to maintain and to enhance its dominance in the mortgage servicing platform market and in an attempt to monopolize the platform software applications market. Black Knight moved to dismiss the PennyMac Complaint or have the action transferred to Florida based upon a forum selection clause in the agreement with BKST. In 2020, the judge granted Black Knight's motion to transfer the case to Florida and denied as moot the motion to dismiss, and PennyMac filed a notice of dismissal of this action without prejudice and indicated that it intended to bring the claims raised in the dismissed PennyMac Complaint as defenses, third party claims and/or counterclaims in arbitration. Following PennyMac’s submission of this matter in 2020 to the American Arbitration Association, PennyMac filed an amended arbitration demand and Black Knight filed an answering statement. A multi-week arbitration hearing was held on Black Knight’s and PennyMac’s respective claims, and the hearing concluded in June 2023. The arbitrator’s decision is expected to be issued by November 30, 2023.

For further information on our legal and regulatory matters, please see Note 16 to the consolidated financial statements in Part II, Item 8 of our 2022 Form 10-K.

14. Fair Value Measurements

Fair value is the price that would be received from selling an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Our financial instruments consist primarily of certain short-term and long-term assets and liabilities, customer accounts receivable, margin deposits and guaranty funds, equity and equity method investments, and short-term and long-term debt.

The fair value of our financial instruments is measured based on a three-level hierarchy:

Level 1 inputs** — quoted prices for identical assets or liabilities in active markets.
Level 2 inputs** — observable inputs other than Level 1 inputs such as quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are directly observable.
Level 3 inputs** — unobservable inputs supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial assets and liabilities recorded or disclosed at fair value in the accompanying consolidated balance sheets as of September 30, 2023 and December 31, 2022 were classified in their entirety based on the lowest level of input that is significant to the asset or liability’s fair value measurement.

Our restricted short-term and long-term investments represent restricted regulatory funds and SITG funds, respectively, at ICE Clear Europe, invested in treasury securities with maturities of greater than 90 days.

Our mutual funds are equity and fixed income mutual funds held for the purpose of providing future payments for our supplemental executive savings plan and the supplemental executive retirement plan. These mutual funds are classified as equity investments and measured at fair value using Level 1 inputs with adjustments recorded in net income.

Excluding our equity investments without a readily determinable fair value, all other financial instruments are determined to approximate carrying value due to the short period of time to their maturities. Our equity investment in D&B (Note 4) is measured at fair value on a recurring basis using Level 2 inputs including the directly observable D&B stock price, adjusted for a lack of marketability factor associated with the investment.

As described in Note 3, we measured the right to receive the net proceeds of the sale of the Promissory Note obtained in connection with the Optimal Blue sale using Level 3 inputs. The valuation technique used was a discounted cash flow model using key unobservable assumptions including an estimated prepayment rate of 2% and a discount rate of 13.9%. There were no material fair value changes from the Divestiture Date to September 30, 2023. Prior to the Divestiture Date, and excluding the Promissory Note, we did not use Level 3 inputs to determine the fair value of assets or liabilities measured at fair value on a recurring basis as of September 30, 2023 or at December 31, 2022.

We measure certain assets, such as intangible assets and equity method investments, at fair value on a non-recurring basis. These assets are recognized at fair value if they are deemed to be impaired. As of December 31, 2022, certain equity method investments were measured at fair value on a non-recurring basis. As of September 30, 2023, none of our intangible assets or equity method investments were required to be recorded at fair value since no impairments were recorded, except for certain assets that had total impairment charges of $17 million which are recorded in other expense and depreciation and amortization in our consolidated statement of income.

We measure certain equity investments at fair value on a non-recurring basis using our policy election under ASU 2016-01*.* During the nine months ended September 30, 2023, we evaluated these investments and determined that no fair value adjustments were required under our accounting policy election related to these investments.

See Note 12 for the fair value considerations related to our margin deposits, guaranty funds and delivery contracts receivable.

The table below displays the fair value of our debt as of September 30, 2023. The fair values of our fixed rate notes were estimated using quoted market prices for these instruments. The fair value of other short-term debt approximates par value since the interest rates on this short-term debt approximate market rates as of September 30, 2023.


	As of September 30, 2023
	(in millions)
Debt:	Carrying Amount		Fair value
Commercial Paper	$	2,257	$	2,257






2025 Term Loan due August 31, 2025	2,000		2,000
3.65% Senior Notes due May 23, 2025	1,245		1,208
3.75% Senior Notes due December 1, 2025	1,248		1,202
4.00% Senior Notes due September 15, 2027	1,488		1,420
3.10% Senior Notes due September 15, 2027	498		459
3.625% Senior Notes due September 1, 2028	909		900
3.75% Senior Notes due September 21, 2028	595		556
4.35% Senior Notes due June 15, 2029	1,241		1,176
2.10% Senior Notes due June 15, 2030	1,237		1,000
1.85% Senior Notes due September 15, 2032	1,486		1,098
4.60% Senior Notes due March 15, 2033	1,489		1,376
2.65% Senior Notes due September 15, 2040	1,232		817
4.25% Senior Notes due September 21, 2048	1,232		983
3.00% Senior Notes due June 15, 2050	1,222		772
4.95% Senior Notes due June 15, 2052	1,465		1,302
3.00% Senior Notes due September 15, 2060	1,472		856
5.20% Senior Notes due June 15, 2062	983		876
Total debt	$	23,299	$	20,258

15. Segment Reporting

Our business is conducted through three reportable business segments:

Exchanges:** We operate regulated marketplaces for the listing, trading and clearing of a broad array of derivatives contracts and financial securities;
Fixed Income and Data Services:** 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
Mortgage Technology:** We provide a technology platform that offers customers comprehensive, digital workflow tools that aim to address inefficiencies and mitigate risks that exist in the U.S. residential mortgage market life cycle, from application through closing, servicing 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 chief operating decision maker does not review total assets or statements of income below operating income by segments; therefore, such information is not presented below. Our three segments do not engage in intersegment transactions.

During 2023, we reclassified certain revenues within our Mortgage Technology segment that were previously included in other revenues to closing solutions, origination technology and data and analytics revenues. Closing solutions revenues now include membership dues, and origination technology revenues and data and analytics revenues now include its related professional services revenues. As of September 30, 2023, other revenues are no longer separately presented. We believe this is a more accurate reflection of the nature of these revenues. The impact of this change was not material, and the prior year periods have been adjusted for comparability. Additionally, following the acquisition of Black Knight and beginning in the third quarter of 2023, we have added servicing software to our Mortgage Technology segment revenues.

Financial data for our business segments is as follows for the nine and three months ended September 30, 2023 and 2022 (in millions):


	Nine Months Ended September 30, 2023
	Exchanges		Fixed Income and Data Services		Mortgage Technology		Consolidated
Revenues:
Energy futures and options	$	1,084	$	—	$	—	$	1,084
Agricultural and metals futures and options	208		—		—		208
Financial futures and options	344		—		—		344
Cash equities and equity options	1,734		—		—		1,734
OTC and other	309		—		—		309
Data and connectivity services	699		—		—		699
Listings	376		—		—		376
Fixed income execution	—		89		—		89
CDS clearing	—		279		—		279
Fixed income data and analytics	—		832		—		832
Other data and network services	—		468		—		468
Origination technology	—		—		524		524
Closing solutions	—		—		136		136
Servicing software	—		—		69		69
Data and analytics	—		—		86		86

Revenues	4,754		1,668		815		7,237
Transaction-based expenses	1,450		—		—		1,450
Revenues, less transaction-based expenses	3,304		1,668		815		5,787
Operating expenses	944		1,057		1,017		3,018
Operating income/(loss)	$	2,360	$	611	$	(202)	$	2,769


	Three Months Ended September 30, 2023
	Exchanges		Fixed Income and Data Services		Mortgage Technology		Consolidated
Revenues:
Energy futures and options	$	384	$	—	$	—	$	384
Agricultural and metals futures and options	61		—		—		61
Financial futures and options	112		—		—		112
Cash equities and equity options	519		—		—		519
OTC and other	104		—		—		104
Data and connectivity services	236		—		—		236
Listings	124		—		—		124
Fixed income execution	—		29		—		29
CDS clearing	—		94		—		94
Fixed income data and analytics	—		279		—		279
Other data and network services	—		157		—		157
Origination technology	—		—		172		172
Closing solutions	—		—		48		48
Servicing software	—		—		69		69
Data and analytics	—		—		41		41

Revenues	1,540		559		330		2,429
Transaction-based expenses	426		—		—		426
Revenues, less transaction-based expenses	1,114		559		330		2,003
Operating expenses	313		358		487		1,158
Operating income/(loss)	$	801	$	201	$	(157)	$	845


	Nine Months Ended September 30, 2022
	Exchanges		Fixed Income and Data Services		Mortgage Technology		Consolidated
Revenues:
Energy futures and options	$	884	$	—	$	—	$	884
Agricultural and metals futures and options	179		—		—		179
Financial futures and options	375		—		—		375
Cash equities and equity options	2,021		—		—		2,021
OTC and other	326		—		—		326
Data and connectivity services	651		—		—		651
Listings	388		—		—		388
Fixed income execution	—		66		—		66
CDS clearing	—		226		—		226
Fixed income data and analytics	—		824		—		824
Other data and network services	—		439		—		439
Origination technology	—		—		617		617
Closing solutions	—		—		195		195

Servicing software	—		—		—		—
Data and analytics	—		—		68		68

Revenues	4,824		1,555		880		7,259
Transaction-based expenses	1,735		—		—		1,735
Revenues, less transaction-based expenses	3,089		1,555		880		5,524
Operating expenses	904		1,029		817		2,750
Operating income	$	2,185	$	526	$	63	$	2,774


	Three Months Ended September 30, 2022
	Exchanges		Fixed Income and Data Services		Mortgage Technology		Consolidated
Revenues:
Energy futures and options	$	266	$	—	$	—	$	266
Agricultural and metals futures and options	57		—		—		57
Financial futures and options	122		—		—		122
Cash equities and equity options	664		—		—		664
OTC and other	121		—		—		121
Data and connectivity services	219		—		—		219
Listings	128		—		—		128
Fixed income execution	—		26		—		26
CDS clearing	—		88		—		88
Fixed income data and analytics	—		273		—		273
Other data and network services	—		147		—		147
Origination technology	—		—		197		197
Closing solutions	—		—		56		56

Servicing software	—		—		—		—
Data and analytics	—		—		23		23

Revenues	1,577		534		276		2,387
Transaction-based expenses	576		—		—		576
Revenues, less transaction-based expenses	1,001		534		276		1,811
Operating expenses	301		337		260		898
Operating income	$	700	$	197	$	16	$	913

Revenue from one member of the Exchanges segment comprised $394 million, or 12%, and $140 million, or 13%, of our Exchange revenues, less transaction-based expenses for the nine and three months ended September 30, 2023, respectively. No customers or clearing members accounted for more than 10% of our Exchange revenues, less transaction-based expenses during the nine and three months ended September 30, 2022. Clearing members are primarily intermediaries and represent a broad range of principal trading firms. If a clearing member ceased its operations,

we believe that the trading firms would continue to conduct transactions and would clear those transactions through another clearing member firm. No additional customers or clearing members accounted for more than 10% of our segment revenues or consolidated revenues during the six months or three months ended September 30, 2023 or 2022.

16. Earnings Per Common Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per common share computations for the nine and three months ended September 30, 2023 and 2022 (in millions, except per share amounts):


	Nine Months Ended September 30,					Three Months Ended September 30,
2023			2022	2023				2022
Basic:
Net income/(loss) attributable to Intercontinental Exchange, Inc.	$	1,995		$	1,021	$	541		$	(191)
Weighted average common shares outstanding	561			559		563			558
Basic earnings/(loss) per common share	$	3.56		$	1.83	$	0.96		$	(0.34)
Diluted:
Weighted average common shares outstanding	561			559		563			558
Effect of dilutive securities - stock options and restricted stock	1			2		2			2
Diluted weighted average common shares outstanding	562			561		565			560
Diluted earnings/(loss) per common share	$	3.55		$	1.82	$	0.96		$	(0.34)

Basic earnings/(loss) per common share is calculated using the weighted average common shares outstanding during the period.

Common equivalent shares from stock options and restricted stock awards, calculated using the treasury stock method, are included in the diluted per share calculations unless the effect of their inclusion would be antidilutive. During both the nine months ended September 30, 2023 and 2022, 1 million outstanding stock options and restricted stock awards were not included in the computation of diluted earnings per common share, because to do so would have had an antidilutive effect.

17. Subsequent Events

We have evaluated subsequent events, and determined that no events or transactions, other than those already disclosed in this Quarterly Report, met the definition of a subsequent event for purposes of recognition or disclosure in the accompanying consolidated financial statements.

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