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

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

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

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

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

Forward-Looking Statements

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

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

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

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

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

These risks and other factors include, among others, those set forth in Part 1, Item 1(A) under the caption “Risk Factors” in our 2022 Form 10-K, as filed with the SEC on February 2, 2023. Due to the uncertain nature of these factors, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

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

Overview

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

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.
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.

Recent Developments

Acquisition of 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, in connection with the merger agreement, we sold Black Knight’s Optimal Blue and Empower LOS businesses 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 issued by the purchaser to Black Knight, as a subsidiary of ICE, at the closing of the transaction. As described elsewhere in the Quarterly Report, the Promissory Note was valued at $235 million on the Divestiture Date. Pursuant to 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.

Global Market Conditions

Our results of operations are affected by global economic conditions, including macroeconomic conditions and geopolitical events or conflicts. Since 2022, macroeconomic conditions, including rising interest rates, inflation and significant market volatility, along with geopolitical concerns, including the conflicts in Ukraine, Israel and Gaza, have created ongoing uncertainty and volatility in the global economy and resulted in a dynamic operating environment.

Our business has been impacted positively and negatively by these global economic conditions. For instance, due to market volatility and rising interest rates, we have seen increased trading across a number of our products, such as interest rate and equity futures, credit default swaps and bonds. Conversely, increases in mortgage interest rates in 2022 and 2023 have resulted in reduced consumer and investor demand for mortgages and adversely impacted the transaction-based revenues in our Mortgage Technology segment. If mortgage rates remain high or further increase, or if banks change their mortgage lending practices, our Mortgage Technology segment revenues may be further impacted.

From an operational perspective, our businesses, including our exchanges, clearing houses, listings venues, data services businesses and mortgage platforms, have not suffered a material negative impact as a result of the events in Ukraine, Israel, Gaza and surrounding regions.

We expect the macroeconomic environment to remain dynamic in the near-term, and we continue to monitor macroeconomic conditions, including interest rates, the inflationary environment, geopolitical events and military conflicts, including repercussions from the conflicts in Ukraine, Israel and Gaza and the impact that any of the foregoing may have on the global economy and on our business. Throughout 2023, we have closely monitored the credit worthiness of our counterparties and investment agents during the recent banking sector events, scrutinized counterparties directly impacted and monitored for any potential contagion. We did not suffer any material negative impact from the banking sector events that occurred in early 2023. In light of the current and expected macroeconomic environment we will continue to closely monitor credit worthiness of our counterparties, clearing members and our financial service providers and take risk management measures in line with established risk management frameworks.

Regulation

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

Global policy makers have undertaken reviews of their existing legal framework governing financial markets in connection with regulatory reform, and have either passed new laws and regulations, or are in the process of debating and/or enacting new laws and regulations that apply to our business and to our customers’ businesses. Legislative and

regulatory actions may impact the way in which we or our customers conduct business and may create uncertainty, which could affect trading volumes or demand for market data. See Part 1, Item 1 “Business — Regulation” and Part 1, Item 1(A) "Risk Factors" included in our 2022 Form 10-K for a discussion of the primary regulations applicable to our business and certain risks associated with those regulations.

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

Policy intervention to address high energy prices**. Various legislative proposals in the European Union, or EU, have been adopted to address high energy prices and impact ICE Endex, the primary European exchange for the benchmark European gas contract, and ICE Clear Europe, which clears ICE Endex contracts. These policy interventions include price limiting mechanisms for exchange-traded gas products and a new liquified natural gas, or LNG, import benchmark. In December 2022, the EU adopted a price cap on certain Dutch Title Transfer Facility, or TTF, derivatives traded on ICE Endex effective February 2023. In March 2023, the European Commission extended the price cap to derivatives on all other EU gas hubs effective May 2023. In December 2022, a coalition of G7 and other nations set the price of certain Russian crude oil at or below $60 a barrel, which impacts the services we offer to clients. Global leaders continue to discuss the implementation of additional sanctions against Russia.
Changes to EU regulation of gas and power markets.** In March 2023, the European Commission published legislative proposals to amend the Regulation on Wholesale Energy Market Integrity and Transparency, or REMIT, by introducing requirements for non-EU firms trading in European gas and power markets establishing an office in the EU. These requirements could make trading on ICE Endex more difficult and could result in a reduction in volumes and liquidity. We are monitoring the impact of these proposals on ICE Endex.
EMIR 3.0.** In December 2022, the European Commission proposed amendments to the European Market Infrastructure Regulation, or EMIR, requiring certain EU market participants to clear specified derivative transactions at an EU central counterparty. The European Commission has identified three classes of derivatives as being of substantial systemic importance, including short-term interest rate derivatives, which are traded on ICE Futures Europe and cleared at ICE Clear Europe, and euro denominated credit default swaps cleared at ICE Clear Credit. If adopted, the proposal could result in a reduction of the cleared volume of these contracts at ICE Clear Europe and ICE Clear Credit. We are monitoring the impact of this proposal on ICE Clear Europe and ICE Clear Credit.
Benchmarks Regulation.** ICE Benchmark Administration, Limited, or IBA, the administrator of London Interbank Offered Rate, or LIBOR, is no longer publishing any LIBOR settings using panel bank contributions after the end of June 2023. The Financial Conduct Authority, or FCA, has decided to use its legal powers under the U.K. Benchmarks Regulation, or U.K. BMR, to require IBA to continue publishing 3-month "synthetic" Sterling LIBOR until the end of March 2024 and 1-, 3- and 6- month "synthetic" U.S. Dollar LIBOR until the end of September 2024. “Synthetic” LIBOR settings are not based on panel bank contributions and are not representative of the underlying market or economic reality the settings were previously intended to measure. All other LIBOR settings have ceased to be published. Usage of "synthetic" LIBOR settings may be restricted or prohibited in certain circumstances under applicable law.

Finally, the European Commission used its powers under the EU Benchmarks Regulation, or EU BMR, to designate replacement benchmarks for certain Swiss franc LIBOR settings. Certain benchmarks provided by our index provider businesses may continue to be used by supervised entities in the EU under EU BMR transitional provisions until December 31, 2025. In October 2023, the European Commission published a proposal to amend the EU BMR to require third country benchmark providers who publish certain EU ESG benchmarks to be located in the EU. Uncertainties relating to the proposed EU BMR reform may impact our ability to provide certain benchmarks into the EU.

EU Deforestation Regulation.** The EU Deforestation Regulation, or EUDR, aims to curb the EU market’s impact on global deforestation and forest degradation by requiring seven commodities, including cocoa and coffee, and certain specified products made from them, to be deforestation-free to be sold on the EU market or exported from it. The EUDR obligations are scheduled to be effective in December 2024. The EUDR requirements may decelerate the physical trade of cocoa and coffee, impact the useable EU coffee and cocoa physical inventories, and reduce trading volumes on ICE Futures Europe of the Robusta Coffee Contract and London Cocoa Contract and on ICE Futures U.S. of the Coffee C ® Contract (Arabica). We are monitoring the impact of the EUDR and working to implement the regulation.
EU proposal on ESG rating activities.** In June 2023, the European Commission published a proposal for a new regulation on the transparency and integrity of Environmental, Social, and Governance, or ESG, rating activities, which aims to enhance the integrity, transparency, governance, and independence of ESG ratings provided in the EU. The proposal expands the definition of an ESG rating product, which may impact certain ICE Data Service offerings and requires EU and third country market participants providing ESG ratings to become authorized and supervised by the European Securities and Markets Authority, or ESMA. If adopted, the proposal would result in increased regulation

and could make publishing ESG ratings and ESG data more expensive. We are monitoring the impact of this proposal on ICE Data Services.

Financial Services and Markets Act 2023.** In June 2023, the Financial Services and Markets Act 2023, or 2023 FSMA, was formally approved by the monarchy. The 2023 FSMA makes significant changes to U.K. financial services regulation to reflect the U.K.'s position outside the EU. The 2023 FSMA grants the Bank of England additional powers relating to Central Counterparties, or CCPs, which enable the Bank of England to act before a special resolution regime is triggered including temporarily restricting or prohibiting discretionary payments to specified shareholders or employees of CCPs. If adopted, this proposal could impact the ability of ICE Clear Europe to pay dividends to its shareholder in certain extreme circumstances. We are monitoring the impact of this proposal on ICE Clear Europe.
Basel III Endgame and GSIB Proposals.** In July 2023, the Board of Governors of the Federal Reserve, or the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, or FDIC, issued a proposal to implement various Basel Committee standards, or Basel III Endgame. Among other things, for large banking organizations, the proposal would apply credit valuation adjustment risk capital requirements to bank-affiliated clearing members' exposures to their clearing clients. Also in July 2023, the Federal Reserve proposed amendments to risk-based capital surcharges for global systemically important bank holding companies, or GSIBs. The proposal would revise certain indicators of the GSIB surcharge to include bank-affiliated clearing members' exposures to their clearing clients. Both proposals would increase capital requirements for client clearing activities. Any increase in bank capital requirements for clearing activities could increase costs for clearing services, decrease clearing capacity, especially for U.S. GSIBs, and result in a reduction of cleared volumes at ICE clearing houses.

Consolidated Financial Highlights

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

23693 23695 23696

23699 23700 23701

(1) Operating income from our Mortgage Technology segment was $63 million for the nine months ended September 30, 2022. Operating loss from our Mortgage Technology segment was $202 million for the nine months ended September 30, 2023.

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


	Nine Months Ended September 30,							Three Months Ended September 30,
	2023			2022			Change	2023			2022			Change
Revenues, less transaction-based expenses	$	5,787		$	5,524		5 %	$	2,003		$	1,811		11 %
Recurring revenues(1)	$	2,939		$	2,781		6 %	$	1,031		$	930		11 %
Transaction revenues, net(1)	$	2,848		$	2,743		4 %	$	972		$	881		10 %
Operating expenses	$	3,018		$	2,750		10 %	$	1,158		$	898		29 %
Adjusted operating expenses(2)	$	2,308		$	2,213		4 %	$	812		$	727		12 %
Operating income	$	2,769		$	2,774		— %	$	845		$	913		(7) %
Adjusted operating income(2)	$	3,479		$	3,311		5%	$	1,191		$	1,084		10%
Operating margin	48		%	50		%	(2 pts)	42		%	50		%	(8 pts)
Adjusted operating margin(2)	60		%	60		%	—	59		%	60		%	(1 pt)
Other income/(expense), net	$	(391)		$	(1,530)		(74) %	$	(163)		$	(1,240)		(87) %
Income tax expense/(benefit)	$	330		$	186		78 %	$	123		$	(152)		(181) %
Effective tax rate	14		%	15		%	(1 pt)	18		%	47		%	(29 pt)
Net income/(loss) attributable to ICE	$	1,995		$	1,021		95 %	$	541		$	(191)		n/a
Adjusted net income attributable to ICE(2)	$	2,417		$	2,276		6 %	$	824		$	733		12 %
Diluted earnings/(loss) per share attributable to ICE common stockholders	$	3.55		$	1.82		95 %	$	0.96		$	(0.34)		n/a
Adjusted diluted earnings per share attributable to ICE common stockholders(2)	$	4.30		$	4.06		6 %	$	1.46		$	1.31		11 %
Cash flows from operating activities	$	2,573		$	2,462		5 %
Free cash flow(3)	$	2,247		$	2,137		5 %
Adjusted free cash flow (3)	$	2,452		$	2,136		15 %

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

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

(3) We believe these non-GAAP liquidity measures provide useful information to management and investors to analyze cash resources generated from our operations. We believe that free cash flow is useful as one of the bases for comparing our performance with our competitors, and demonstrates our ability to convert the reinvestment of capital expenditures and capitalized software development costs required to maintain and grow our business, and that adjusted free cash flow eliminates the impact of timing differences related to the payment of section 31 fees. These figures are not calculated in accordance with U.S. GAAP. See “—Non-GAAP Liquidity Measures” below.

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

Revenues, less transaction-based expenses, increased $263 million and $192 million for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022. See "—Exchanges Segment", "—Fixed Income and Data Services Segment" and "—Mortgage Technology Segment" below for a discussion of the significant changes in our revenues. The increase in revenues during the nine and three months ended September 30, 2023 includes $1 million and $20 million, respectively, in favorable foreign exchange effects arising from fluctuations in the U.S. dollar from the comparable period in 2022. See Item 3 "Quantitative and Qualitative Disclosures About Market Risk-Foreign Currency Exchange Rate Risk" below for additional information on the impact of currency fluctuations.
Operating expenses increased $268 million and $260 million for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022. See "—Consolidated Operating Expenses" below for a discussion of the significant changes in our operating expenses. The increase in operating expenses during the nine months ended September 30, 2023 includes $2 million in favorable foreign exchange effects arising from fluctuations in the U.S. dollar from the comparable period in 2022 and the increase in operating expenses during the three months ended September 30, 2023 includes $6 million in unfavorable foreign exchange effects arising from fluctuations in the U.S. dollar from the comparable period in 2022. See Item 3 "Quantitative and Qualitative Disclosures About Market Risk-Foreign Currency Exchange Rate Risk" below for additional information on the impact of currency fluctuations.

Variability in Quarterly Comparisons

Our business environment has been characterized by:

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

For additional information regarding the factors that affect our results of operations, see Item 1(A) “Risk Factors” included in our 2022 Form 10-K.

Segment Results

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 segments do not engage in intersegment transactions.

Exchanges Segment

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

186

188 189 190 191

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


	Nine Months Ended September 30,						Three Months Ended September 30,
	2023		2022		Change*		2023		2022		Change
Revenues:
Energy futures and options	$	1,084	$	884	23	%	$	384	$	266	45	%
Agricultural and metals futures and options	208		179		16		61		57		7
Financial futures and options	344		375		(8)		112		122		(8)
Futures and options	1,636		1,438		14		557		445		25
Cash equities and equity options	1,734		2,021		(14)		519		664		(22)
OTC and other	309		326		(5)		104		121		(15)
Transaction and clearing, net	3,679		3,785		(3)		1,180		1,230		(4)
Data and connectivity services	699		651		7		236		219		8
Listings	376		388		(3)		124		128		(4)
Revenues	4,754		4,824		(1)		1,540		1,577		(2)
Transaction-based expenses(1)	1,450		1,735		(16)		426		576		(26)
Revenues, less transaction-based expenses	3,304		3,089		7		1,114		1,001		11
Other operating expenses	760		725		5		252		241		4
Depreciation and amortization	184		178		4		61		60		3
Acquisition-related transaction and integration costs	—		1		n/a		—		—		—
Operating expenses	944		904		4		313		301		4
Operating income	$	2,360	$	2,185	8	%	$	801	$	700	14	%

Recurring revenues	$	1,075	$	1,039	3	%	$	360	$	347	4	%
Transaction revenues, net	$	2,229	$	2,050	9	%	$	754	$	654	15	%

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

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

Exchanges Revenues

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

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

For both the nine months ended September 30, 2023 and 2022, 19% of our Exchanges segment revenues, less transaction-based expenses, were billed in pounds sterling or euros and for the three months ended September 30, 2023 and 2022, 20% and 19%, respectively, of our Exchanges segment revenues, less transaction-based expenses, were billed in pounds sterling or euros. Due to the fluctuations of the pound sterling and euro compared to the U.S. dollar, our Exchanges segment revenues, less transaction-based expenses, were higher by $1 million and $16 million for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022.

Our exchange transaction and clearing revenues are presented net of rebates. We recorded rebates of $729 million and $665 million for the nine months ended September 30, 2023 and 2022, respectively, and $241 million and $201 million for the three months ended September 30, 2023 and 2022, respectively. We offer rebates in certain of our markets primarily to support market liquidity and trading volume by providing qualified participants in those markets a discount to the applicable commission rate. Such rebates are calculated based on volumes traded. The increase in rebates for the

nine and three months ended September 30, 2023 is primarily due to higher volumes traded as compared to the comparable periods in 2022.

Energy Futures and Options: Total energy volume increased 12% and revenues increased 23% for the nine months ended September 30, 2023 from the comparable period in 2022 and volume increased 28% and revenues increased 45% for the three months ended September 30, 2023 from the comparable period in 2022.

–Total oil futures and options volume increased 15% and 38% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, in part due to price volatility related to oil supply and demand dynamics in the third quarter of 2023, coupled with increased focus on Brent with Midland WTI now deliverable into the Brent Basket, providing additional physical liquidity and exposure.

–Our global natural gas futures and options volume increased 8% and 13% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, primarily due to strength across our Dutch TTF complex driven by reduced uncertainty and normalization of price levels.

**–**Our environmentals and other futures and options volume decreased 5% and 3% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, due in part to lower power volumes versus the year ago period.

Agricultural and Metals Futures and Options:** Total volumes in our agricultural and metals futures and options markets increased 17% and 5% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022 and revenues increased 16% and 7% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022. The nine months ended September 30, 2023 benefited from price volatility as a result of weather-related supply and demand dynamics, such as El Niño, driving an increased need to manage risk across our commodity markets.

**–**Sugar futures and options volumes increased 21% and 3% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022.

–Other agricultural and metal futures and options volume increased 14% and 6% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022.

Financial Futures and Options: Total volumes in our financial futures and options markets decreased 5% and 14% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022 and revenues decreased 8% for both the nine and three months ended September 30, 2023, from the comparable periods in 2022, including the impacts of foreign exchange effects. The nine months ended September 30, 2022 benefited from elevated volatility across global markets driven by geopolitical events, central bank activity and inflationary concerns.

**–**Interest rate futures and options volume decreased 2% and 14% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, and revenue decreased 6% and 4% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022. The nine and three months ended September 30, 2022 benefited from elevated interest rate volatility related to increased speculation regarding central bank activity due to inflation concerns. Interest rate futures and options revenues were $222 million and $235 million for the nine months ended September 30, 2023 and 2022, respectively, and $73 million and $77 million for the three months ended September 30, 2023 and 2022, respectively.

**–**Other financial futures and options volume, which includes our MSCI®, FTSE® and NYSE FANG+ equity index products, decreased 15% and 18% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022. Financial futures and options revenue decreased 13% for both the nine and three months ended September 30, 2023 from the comparable periods in 2022 as the nine months and three months ended September 30, 2022 benefited from elevated volatility across global markets driven by geopolitical events, central bank activity and inflationary concerns. Other financial futures and options revenues were $122 million and $140 million for the nine months ended September 30, 2023 and 2022, respectively, and $39 million and $45 million for the three months ended September 30, 2023 and 2022, respectively.

Cash Equities and Equity Options: Cash equities volume decreased 10% and 4% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, due to lower total market volumes

as the nine months ended September 30, 2022 benefited from elevated volatility related to inflationary, recessionary and geopolitical concerns. Cash equities revenues, net of transaction-based expenses, were $198 million and $211 million for the nine months ended September 30, 2023 and 2022, respectively, and $64 million for both the three months ended September 30, 2023 and 2022. Equity options volume increased 4% and 5% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022. The overall increase in equity options volume for the nine months ended September 30, 2023 was driven by increased participation. Equity options revenues, net of transaction-based expenses, were $86 million and $75 million for the nine months ended September 30, 2023 and 2022, respectively, and $29 million and $24 million for the three months ended September 30, 2023 and 2022, respectively.

OTC and Other:** OTC and other transactions include revenues from our OTC energy business and other trade confirmation services, as well as interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of our U.S. securities exchanges, designated market maker service fees, exchange membership fees and agricultural grading and certification fees. Our OTC and other revenues decreased 5% and 15% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, primarily due to a decrease in interest income on clearing margin deposits.
Data and Connectivity Services:** Our data and connectivity services revenues increased 7% and 8% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022. The increase in revenue was driven by the strong retention rate of existing customers, the addition of new customers and increased purchases by existing customers.
Listings Revenues: Through NYSE, NYSE American and NYSE Arca, we generate listings revenue related to the provision of listings services for public companies and ETFs, and related corporate actions for listed companies. Listings revenues decreased 3% and 4% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, driven by market volatility causing IPO delays. All listings fees are billed upfront and revenues are recognized over time as the identified performance obligations are satisfied.

Selected Operating Data

Volume of contracts traded, futures and options rate per contract and open interest are measures that we use in analyzing the performance of our futures and options contracts. Handled volume, matched volume and cash equities and equity options rate per contract are measures that we use in analyzing our NYSE cash equities and equity options performance. We believe each of these measures provides useful information for management and investors in understanding our performance. Management considers these metrics when making financial and operating decisions. Our calculation of these metrics may not be comparable to similarly titled measures used by other companies.

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


Volume and Rate per Contract

10202 10203 10204


	Nine Months Ended September 30,						Three Months Ended September 30,
	2023		2022		Change		2023		2022		Change
Number of contracts traded (in millions):
Energy futures and options	640		572		12	%	221		173		28	%
Agricultural and metals futures and options	90		77		17		27		25		5
Financial futures and options	479		504		(5)		149		176		(14)
Total	1,209		1,153		5	%	397		374		6	%

	Nine Months Ended September 30,						Three Months Ended September 30,
	2023		2022		Change		2023		2022		Change
Average daily volume of contracts traded (in thousands):
Energy futures and options	3,422		3,046		12	%	3,510		2,706		30	%
Agricultural and metals futures and options	480		408		17		419		393		7
Financial futures and options	2,507		2,622		(4)		2,316		2,668		(13)
Total	6,409		6,076		5	%	6,245		5,767		8	%

	Nine Months Ended September 30,						Three Months Ended September 30,
	2023		2022		Change		2023		2022		Change
Rate per contract:
Energy futures and options	$	1.69	$	1.54	10	%	$	1.74	$	1.54	13	%
Agricultural and metals futures and options	$	2.32	$	2.33	—	%	$	2.31	$	2.26	2	%
Financial futures and options	$	0.71	$	0.74	(4)	%	$	0.74	$	0.69	8	%

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


Open Interest

11085 11086 11087


	As of September 30,
	2023	2022	Change
Open interest — in thousands of contracts:
Energy futures and options	48,720	42,853	14	%
Agricultural and metals futures and options	4,607	3,948	17
Financial futures and options	22,880	26,636	(14)
Total	76,207	73,437	4	%

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

11285 11286 11287 11288


	Nine Months Ended September 30,						Three Months Ended September 30,
	2023		2022		Change		2023		2022		Change
NYSE cash equities (shares in millions):
Total cash handled volume	2,206		2,453		(10)	%	2,071		2,158		(4)	%
Total cash market share matched	19.7	%	19.9	%	(0.2 pts)		19.5	%	19.4	%	0.1 pt

NYSE equity options (contracts in thousands):
NYSE equity options volume	7,932		7,631		4	%	7,397		7,037		5	%
Total equity options volume	40,429		37,888		7	%	39,622		36,994		7	%
NYSE share of total equity options	19.6	%	20.1	%	(0.5 pts)		18.7	%	19.0	%	(0.3 pts)

Revenue capture or rate per contract:
Cash equities rate per contract (per 100 shares)	$0.048		$0.046		5	%	$0.049		$0.046		5	%
Equity options rate per contract	$0.06		$0.05		11	%	$0.06		$0.05		14	%

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

Transaction-Based Expenses

Our equities and equity options markets pay fees to the SEC pursuant to Section 31 of the Exchange Act. Section 31 fees are recorded on a gross basis as a component of transaction and clearing fee revenue. These Section 31 fees are assessed to recover the government’s costs of supervising and regulating the securities markets and professionals and are subject to change. We, in turn, collect corresponding activity assessment fees from member organizations clearing or settling trades on the equities and options exchanges, and recognize these amounts in our transaction and clearing revenues when invoiced. The activity assessment fees are designed to equal the Section 31 fees. As a result, activity

assessment fees and the corresponding Section 31 fees do not have an impact on our net income, although the timing of payment by us will vary from collections. Section 31 fees were $231 million and $332 million for the nine months ended September 30, 2023 and 2022, respectively, and $56 million and $158 million for the three months ended September 30, 2023 and 2022, respectively. The decrease in Section 31 fees during the three months ended September 30, 2023 was primarily due to a decrease in rates. The fees we collect are included in cash at the time of receipt and we remit the amounts to the SEC twice a year as required. The total amount is included in current liabilities and was $18 million as of September 30, 2023.

We make liquidity payments to cash and options trading customers, as well as routing charges made to other exchanges which are included in transaction-based expenses. We incur routing charges when we do not have the best bid or offer in the market for a security that a customer is trying to buy or sell on one of our securities exchanges. In that case, we route the customer’s order to the external market center that displays the best bid or offer. The external market center charges us a fee per share (denominated in tenths of a cent per share) for routing to its system. We record routing charges on a gross basis as a component of transaction and clearing fee revenue. Cash liquidity payments, routing and clearing fees were $1.2 billion and $1.4 billion for the nine months ended September 30, 2023 and 2022, respectively, and $370 million and $418 million for the three months ended September 30, 2023 and 2022, respectively.

Operating Expenses, Operating Income and Operating Margin

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


Exchanges Segment:	Nine Months Ended September 30,								Three Months Ended September 30,
	2023			2022			Change		2023			2022			Change
Operating expenses	$	944		$	904		4	%	$	313		$	301		4	%
Adjusted operating expenses(1)	$	878		$	854		3	%	$	297		$	284		4	%
Operating income	$	2,360		$	2,185		8	%	$	801		$	700		14	%
Adjusted operating income(1)	$	2,426		$	2,235		9	%	$	817		$	717		14	%
Operating margin	71		%	71		%	—		72		%	70		%	2 pts
Adjusted operating margin(1)	73		%	72		%	1 pt		73		%	72		%	1 pt

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

Fixed Income and Data Services Segment

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

192

195 196 197 198

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


	Nine Months Ended September 30,						Three Months Ended September 30,
	2023		2022		Change		2023		2022		Change
Revenues:
Fixed income execution	$	89	$	66	34	%	$	29	$	26	10	%
CDS clearing	279		226		23		94		88		6
Fixed income data and analytics	832		824		1		279		273		2
Fixed income and credit	1,200		1,116		7		402		387		4
Other data and network services	468		439		7		157		147		7
Revenues	1,668		1,555		7		559		534		5
Other operating expenses	799		766		4		274		250		10

Depreciation and amortization	258		262		(2)		84		86		(4)
Acquisition-related transaction and integration costs	—		1		n/a		—		1		n/a
Operating expenses	1,057		1,029		3		358		337		6
Operating income	$	611	$	526	16	%	$	201	$	197	2	%

Recurring revenues	$	1,300	$	1,263	3	%	$	436	$	420	4	%
Transaction revenues	$	368	$	292	26	%	$	123	$	114	7	%

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

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

For the nine months ended September 30, 2023 and 2022, 11% and 12%, respectively, of our Fixed Income and Data Services segment revenues were billed in pounds sterling or euros and for the three months ended September 30, 2023 and 2022, 11% and 10%, respectively, of our Fixed Income and Data Services segment revenues were billed in pounds sterling or euros. As the pound sterling or euro exchange rate changes, the U.S. equivalent of revenues denominated in foreign currencies changes accordingly. Due to the fluctuations of the pound sterling and euro compared to the U.S. dollar, our Fixed Income and Data Services revenues were flat for the nine months ended September 30, 2023 and higher by $4 million for the three months ended September 30, 2023, than in the comparable periods in 2022.

Fixed Income and Data Services Revenues

Our Fixed Income and Data Services revenues increased 7% and 5% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022. The increase in revenue was primarily due to strength in our fixed income execution, CDS clearing, and other data and network services businesses.

Fixed Income Execution:** Fixed income execution includes revenues from ICE Bonds. Execution fees are reported net of rebates, which were nominal for both the nine and three months ended September 30, 2023 and 2022. Our fixed income execution revenues increased 34% and 10% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, due to increased activity as a result of continued interest rate volatility.
CDS Clearing: CDS clearing revenues increased 23% and 6% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022. The notional value of CDS cleared was $15.1 trillion and $19.7 trillion for the nine months ended September 30, 2023 and 2022, respectively, and $5 trillion and $6.1 trillion for the three months ended September 30, 2023 and 2022, respectively. The increase in revenues was primarily due to net interest income on collateral balances.
Fixed Income Data and Analytics: Our fixed income data and analytics revenues increased 1% and 2% for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022 due to strength in our index business and growth in our pricing and reference data business in the third quarter of 2023.
Other Data and Network Services: Our other data and network services revenues increased 7% for both the nine and three months ended September 30, 2023, from the comparable periods in 2022. The increase in revenues was driven by growth in our ICE Global Network offering, coupled with strength in our desktop, feeds and derivatives analytics revenues.

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

As of September 30, 2023, ASV was $1.722 billion, which increased 4.8% compared to the ASV as of September 30, 2022. ASV represents nearly 100% of total data services revenues for this segment. This does not adjust for year-over-year foreign exchange fluctuations.

Operating Expenses, Operating Income and Operating Margin

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


Fixed Income and Data Services Segment:	Nine Months Ended September 30,								Three Months Ended September 30,
	2023			2022			Change		2023			2022			Change
Operating expenses	$	1,057		$	1,029		3	%	$	358		$	337		6	%
Adjusted operating expenses(1)	$	930		$	892		4	%	$	316		$	293		8	%
Operating income	$	611		$	526		16	%	$	201		$	197		2	%
Adjusted operating income(1)	$	738		$	663		11	%	$	243		$	241		1	%
Operating margin	37		%	34		%	3 pts		36		%	37		%	(1 pt)
Adjusted operating margin(1)	44		%	43		%	1 pt		44		%	45		%	(1 pt)

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

Mortgage Technology Segment

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

170

173 174

176 177

(1) Servicing Software is a new revenue category following completion of the Black Knight acquisition.

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


	Nine Months Ended September 30,					Three Months Ended September 30,
	2023		2022		Change	2023		2022		Change
Revenues:
Origination technology	$	524	$	617	(15)%	$	172	$	197	(13)%
Closing solutions	136		195		(30)	48		56		(14)
Servicing software	69		—		n/a	69		—		n/a
Data and analytics	86		68		26	41		23		76

Revenues	815		880		(7)	330		276		20
Other operating expenses	422		410		3	168		130		30
Depreciation and amortization	394		328		20	164		112		47
Acquisition-related transaction and integration costs	201		79		152	155		18		707
Operating expenses	1,017		817		24	487		260		87
Operating income/(loss)	$	(202)	$	63	n/a	$	(157)	$	16	n/a

Recurring revenues	$	564	$	479	17%	$	235	$	163	44%
Transaction revenues	$	251	$	401	(37)%	$	95	$	113	(16)%

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

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

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. The comparable periods in 2022 results do not include a contribution from this acquisition.

Mortgage Technology Revenues

Our mortgage technology revenues are derived from our comprehensive, end-to-end U.S. residential mortgage platform. Our mortgage technology business is intended to enable greater workflow efficiency and mitigate risks for customers throughout the mortgage life cycle. Mortgage technology revenues decreased $65 million for the nine months ended September 30, 2023 and increased $54 million for the three months ended September 30, 2023, from the comparable periods in 2022. During the nine and three months ended September 30, 2023, Black Knight contributed $87 million of revenues following completion of the acquisition. Excluding the revenue contributed by Black Knight, both the nine and three months ended September 30, 2023 decreased from the prior year periods due to lower mortgage origination volumes driven by rising interest rates. See Note 5 of our consolidated financial statements in this Quarterly Report for additional information.

Origination technology: Our origination technology revenues decreased 15% and 13% during the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, due to lower transaction-based revenues as mortgage origination volumes declined. Our origination technology acts as a system of record for the mortgage transaction, automating the gathering, reviewing, and verifying of mortgage-related information and enabling automated enforcement of rules and business practices designed to help ensure that each completed loan transaction is of high quality and adheres to secondary market standards. These revenues are based on recurring Software as a Service, or SaaS, subscription fees, with an additive transaction-based or success-based pricing fee as lenders exceed the number of loans closed that are included with their monthly base subscription, as well as professional services.

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

Closing solutions: Our closing solutions revenues decreased 30% and 14% during the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, due to lower mortgage origination volumes. Our closing solutions connect key participants, such as lenders, title and settlement agents and individual county recorders, to digitize the closing and recording process. Closing solutions also include revenues from our MERSCORP Holdings, Inc., or MERS database, which provides a system of record for recording and tracking changes and servicing rights and beneficial ownership interests in loans secured by U.S. residential real estate. Revenues from closing solutions are largely transaction-based and are based on the volume of loans closed.
Servicing software:** Our servicing software revenues include Black Knight’s integrated mortgage servicing solutions, which help automate all areas of the servicing process, from loan boarding to default, to help lower costs, reduce risk and improve financial performance. Our servicing software includes business intelligence, mortgage default and servicing technology, digital mortgage solutions and related professional services.
Data and analytics: Our data and analytics revenues increased 26% and 76% during the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, primarily due to $15 million of revenue from Black Knight following completion of the acquisition during the three months ended September 30, 2023. Revenues include those related to ICE Mortgage Technology’s Data & Document Automation and Mortgage Analyzer solutions, or Analyzer (formerly known as AIQ), which offers customers greater efficiency by streamlining data collection and validation through our automated document recognition and data extraction capabilities, as well as professional services. Analyzer revenues can be both recurring and transaction-based in nature. In addition, our data offerings include real-time industry and peer benchmarking tools, which provide originators a granular view into the real-time trends of nearly half the U.S. residential mortgage market, as well as credit and prepayment models, custom and proprietary analytics, valuation, and MLS solutions. We also provide a Data as a Service, or DaaS, offering through private data clouds for lenders to access their own data and origination information. Revenues related to our data products are largely subscription-based and recurring in nature. The data and insights from solutions in this business informs, supports and enhances our other software solutions to help lenders and servicers make more informed decisions, improve performance, identify and predict risk and generate more qualified leads.

Operating Expenses, Operating Income/(Loss) and Operating Margin

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


Mortgage Technology Segment:	Nine Months Ended September 30,							Three Months Ended September 30,
	2023			2022			Change*	2023			2022			Change
Operating expenses	$	1,017		$	817		24%	$	487		$	260		87%
Adjusted operating expenses(1)	$	500		$	467		7%	$	199		$	150		34%
Operating income/(loss)	$	(202)		$	63		n/a	$	(157)		$	16		n/a
Adjusted operating income(1)	$	315		$	413		(24)%	$	131		$	126		3%
Operating margin	(25)		%	7		%	n/a	(48)		%	6		%	n/a
Adjusted operating margin(1)	39		%	47		%	(8 pts)	39		%	46		%	(7 pts)

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

Consolidated Operating Expenses

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

119


	Nine Months Ended September 30,						Three Months Ended September 30,
	2023		2022		Change		2023		2022		Change
Compensation and benefits	$	1,103	$	1,058	4	%	$	400	$	344	16	%
Professional services	88		101		(12)		31		32		(2)
Acquisition-related transaction and integration costs	201		81		146		155		19		698
Technology and communication	529		513		3		184		169		9
Rent and occupancy	65		63		3		20		22		(9)
Selling, general and administrative	196		166		18		59		54		9
Depreciation and amortization	836		768		9		309		258		20
Total operating expenses	$	3,018	$	2,750	10	%	$	1,158	$	898	29	%

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

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

For the nine months ended September 30, 2023 and 2022, 9% and 10%, respectively, of our operating expenses were billed in pounds sterling or euros, and for the three months ended September 30, 2023 and 2022, 7% and 9%,

respectively, of our operating expenses were billed in pounds sterling or euros. Due to fluctuations in the U.S. dollar compared to the pound sterling and euro, our consolidated operating expenses were lower by $2 million for the nine months ended September 30, 2023, and were higher by $6 million for the three months ended September 30, 2023, than in the comparable periods in 2022. See Item 3 “—Quantitative and Qualitative Disclosures About Market Risk —Foreign Currency Exchange Rate Risk” below for additional information.

Compensation and Benefits Expenses

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


	Nine Months Ended September 30,						Three Months Ended September 30,
	2023		2022		Change		2023		2022		Change
Employee headcount	13,226		8,935		48	%
Stock-based compensation expenses	$	133	$	110	21	%	$	50	$	37	36	%

Employee headcount increased during the nine and three months ended September 30, 2023 from the comparable period in 2022 primarily due to our acquisition of Black Knight. Compensation and benefits expense increased $45 million and $56 million for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, primarily due to $38 million attributable to our acquisition of Black Knight, an increase in our bonus and noncash performance-based restricted stock compensation accruals and higher payroll, partially offset by higher capitalized labor. The stock-based compensation expenses in the table above relate to employee stock option and restricted stock awards and exclude stock-based compensation related to acquisition-related transaction and integration costs.

Professional Services Expenses

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

Professional services expenses decreased $13 million and $1 million for the nine and three months ended September 30, 2023, respectively, from the comparable periods in 2022, primarily due to lower consulting expenses related to bringing certain mortgage technology-related costs in-house, partially offset by higher legal expenses.

Acquisition-Related Transaction and Integration Costs

We incurred $201 million and $155 million in acquisition-related transaction and integration costs during the nine and three months ended September 30, 2023, respectively, primarily due to legal, consulting and integration expenses related to our acquisition and integration of Black Knight and our integration of Ellie Mae, Inc., or Ellie Mae. We incurred $81 million and $19 million in acquisition-related transaction costs during the nine and three months ended September 30, 2022, respectively, primarily due to legal and consulting expenses related to our acquisition of Black Knight and our integration of Ellie Mae.

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

Technology and Communication Expenses

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

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

Technology and communications expenses increased $16 million and $15 million for the nine and three months ended September 30, 2023 respectively, from the comparable periods in 2022, primarily due $11 million related to Black Knight and an increase in hardware and software support costs, which was partially offset by a decrease in license expense.

Rent and Occupancy Expenses

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

Rent and occupancy expenses increased $2 million for the nine months ended September 30, 2023 and decreased $2 million for the three months ended September 30, 2023, from the comparable periods in 2022 primarily due to changes in rent and utility costs.

Selling, General and Administrative Expenses

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

Selling, general and administrative expenses increased $30 million for the nine months ended September 30, 2023, from the comparable period in 2022 primarily due to payments of claims made following a NYSE system outage that occurred in January 2023, potential regulatory settlements, increased bad debt expense and other operating costs, partially offset by lower marketing costs.

Selling, general and administrative expenses increased $5 million for the three months ended September 30, 2023, from the comparable period in 2022 primarily due to the Black Knight acquisition and an increase in marketing and travel and entertainment expenses. This was partially offset by lower bank service charges.

Depreciation and Amortization Expenses

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

We recorded amortization expenses on intangible assets acquired as part of our acquisitions, as well as on other intangible assets, of $492 million and $459 million for the nine months ended September 30, 2023 and 2022, respectively and $191 million and $153 million for the three months ended September 30, 2023 and 2022, respectively. During the three months ended September 30, 2023, $34 million of amortization expense was related to intangible assets acquired in connection with the Black Knight acquisition.

We recorded depreciation expenses on our fixed assets of $344 million and $309 million for the nine months ended September 30, 2023 and 2022, respectively, and $118 million and $105 million for the three months ended September 30, 2023 and 2022, respectively. This increase was primarily due to an increase in internally developed software assets in our Mortgage Technology segment.

Consolidated Non-Operating Income/(Expense)

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


	Nine Months Ended September 30,					Three Months Ended September 30,
	2023		2022		Change	2023		2022		Change
Other income/(expense):
Interest income	$	287	$	42	582%	$	94	$	33	185%
Interest expense	(557)		(440)		27	(206)		(176)		17
Other expense, net	(121)		(1,132)		(89)	(51)		(1,097)		(95)
Total other income/(expense), net	$	(391)	$	(1,530)	(74)%	$	(163)	$	(1,240)	(87)%
Net income attributable to non-controlling interest	$	(53)	$	(37)	44%	$	(18)	$	(16)	16%

Interest Income

Interest income increased during the nine and three months ended September 30, 2023 from the same periods in 2022 primarily due to an increase in short-term interest rates combined with larger investment balances. Interest income primarily represents interest income on our short-term investments, and for the nine and three months ended September 30, 2023, included $170 million and $46 million, respectively, in interest income recorded in connection with the short-term investments related to the $5.0 billion of the Notes (as defined in "Liquidity and Capital Resources—Debt") issued for the Black Knight acquisition. The remainder of the increase primarily relates to interest on the restricted cash and restricted investment balances held within our regulated entities.

Interest Expense

We recognized interest expense of $557 million and $440 million during the nine months ended September 30, 2023 and 2022, respectively, and $206 million and $176 million during the three months ended September 30, 2023 and 2022, respectively. Interest expense for the nine and three months ended September 30, 2023 primarily represents interest expense on our outstanding debt. Interest expense increased during the nine months ended September 30, 2023, as we recognized $84 million additional interest expense on the $5.0 billion of the Notes issued for the Black Knight acquisition following our May 2022 debt refinancing. See "-Debt" below. The remainder of the increase relates to interest expense incurred on our Commercial Paper program and Term Loan (each as defined in "Liquidity and Capital Resources—Debt") to fund the Black Knight acquisition.

Other Expense, net

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

In connection with our acquisition of Black Knight, we acquired an investment in Dun & Bradstreet, 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, a fair value loss of $7 million and a $1 million dividend, all of which are included as other expense, net.

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

During the nine months ended September 30, 2022, we recorded $9 million for a legal settlement, and during the three months ended September 30, 2023, we recorded an impairment related to our Consolidated Audit Trail, or CAT, loan receivable of $16 million. Both of these are included in other expense.

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

We incurred foreign currency transaction losses of $8 million and $9 million for the nine months ended September 30, 2023 and 2022, respectively, and $3 million for the three months ended September 30, 2023, primarily attributable to the fluctuations of the pound sterling and euro relative to the U.S. dollar. We did not incur any significant foreign currency transaction gains/(losses) during the three months ended September 30, 2022. Foreign currency transaction gains/(losses) are recorded in other income/(expense), net, when the settlement of foreign currency assets, liabilities and payables occur in non-functional currencies and there is an increase or decrease in the period-end foreign currency exchange rates between periods. See Item 3 “—Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Exchange Rate Risk” included elsewhere in this Quarterly Report for more information on these items.

Non-controlling Interest

For consolidated subsidiaries in which our ownership is less than 100%, and for which we have control over the assets, liabilities and management of the entity, the outside stockholders’ interests are shown as non-controlling interests. As of September 30, 2023, our non-controlling interests included those related to the non-ICE limited partners' interest in our CDS clearing subsidiaries, and non-controlling interests in ICE Futures Abu Dhabi.

Consolidated Income Tax Provision

Consolidated income tax expense/(benefit) was $330 million and $186 million for the nine months ended September 30, 2023 and 2022, respectively, and $123 million and ($152 million) for the three months ended September 30, 2023 and 2022, respectively. The change in consolidated income tax expense between periods is primarily due to the tax impact of changes in our pre-tax income and the changes in our effective tax rate each period.

Our effective tax rate was 14% and 15% for the nine months ended September 30, 2023 and 2022, respectively, and 18% and 47% for 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 Department of the Treasury, the implementation of the CAMT did not have a material impact on 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.

Liquidity and Capital Resources

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

451 452 453

455 456 457 458

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

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

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

Consolidated cash and cash equivalents were $837 million and $1.8 billion as of September 30, 2023 and December 31, 2022, respectively. We had $661 million and $6.6 billion in short-term and long-term restricted cash and cash equivalents as of September 30, 2023 and December 31, 2022, respectively. We had $929 million in restricted short-term and long term investments as of September 30, 2023. We had $79.3 billion and $142.0 billion of cash and cash equivalent margin deposits and guaranty funds as of September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023, the amount of unrestricted cash held by our non-U.S. subsidiaries was $421 million. Due to the application of Global Intangible Low-Taxed Income as of January 1, 2018, the majority of our foreign earnings as of December 31, 2022 have been subject to immediate U.S. income taxation and can be distributed to the U.S. in the future with no material additional income tax consequences. As we decided to make the Global Intangible Low-Taxed Income high-tax exception election in the current period, the majority of our foreign earnings in 2023 are not expected to be subject to immediate U.S. income taxation; however, these foreign earnings can also generally be distributed to the U.S. with no additional income tax consequences.

Our cash and cash equivalents and financial investments are managed as a global treasury portfolio of non-speculative financial instruments that are readily convertible into cash, such as overnight deposits, term deposits, money market funds, mutual funds for treasury investments, short duration fixed income investments and other money market instruments, thus ensuring high liquidity of financial assets. We may invest a portion of our cash in excess of short-term operating needs in investment-grade marketable debt securities, including government or government-sponsored agencies and corporate debt securities.

Cash Flow

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


	Nine Months Ended September 30,
2023			2022
Net cash provided by/(used in):
Operating activities	$	2,573		$	2,462
Investing activities	(9,403)			(2,361)
Financing activities	(62,711)			16,373
Effect of exchange rate changes	(7)			(41)
Net increase/(decrease) in cash and cash equivalents, restricted cash and cash equivalents, and cash and cash equivalent margin deposits and guaranty funds	$	(69,548)		$	16,433

Operating Activities

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

The $111 million increase in net cash provided by operating activities during the nine months ended September 30, 2023 from the comparable period in 2022 was primarily driven by an increase in net income, partially offset by the net losses from and impairment of unconsolidated investees during the nine months ended September 30, 2022. The remaining fluctuations are due to changes in our working capital and the timing of various payments, such as lower Section 31 fee payments of $205 million.

Investing Activities

Consolidated net cash used in investing activities for the nine months ended September 30, 2023 primarily relates to $10.2 billion paid for acquisitions, net of cash acquired, $1.4 billion of purchases of invested margin deposits, $956 million of purchases of investments, $104 million of capital expenditures and $222 million of capitalized software development costs, partially offset by $3.4 billion in proceeds from the sale of invested margin deposits.

Consolidated net cash used in investing activities for the nine months ended September 30, 2022 primarily relates to $6.9 billion of purchases of invested margin deposits, $125 million of capital expenditures and $200 million of capitalized

software development costs, partially offset by $4.3 billion in proceeds from the sale of invested margin deposits and $741 million in proceeds from the sale of our Euroclear investment.

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

Financing Activities

Consolidated net cash used in financing activities for the nine months ended September 30, 2023 primarily relates to a decrease in our cash and cash equivalent margin deposits and guaranty fund balances of $64.7 billion due to lower commodity prices and reduced volatility, $713 million in dividend payments to stockholders and $53 million in cash payments related to treasury shares received for restricted stock tax payments and stock option exercises, partially offset by $2.3 billion in proceeds from net issuances under our Commercial Paper Program and $514 million in net proceeds from our debt facilities.

Consolidated net cash provided by financing activities for the nine months ended September 30, 2022 primarily relates to an increase in our cash and cash equivalent margin deposits and guaranty fund balances of $13.5 billion due to increased volatility and $7.9 billion in net proceeds from our debt facilities, partially offset by $2.7 billion repayments of debt facilities, $1.0 billion in net repayments under our Commercial Paper Program, $632 million in repurchases of our common stock, $640 million in dividend payments to stockholders and $72 million in cash payments related to treasury shares received for restricted stock tax payments and stock option exercises.

Debt

As of September 30, 2023, we had $23.3 billion in outstanding debt, consisting of $19.0 billion of senior notes, $2.3 billion under our Commercial Paper Program and $2.0 billion under our Term Loan. 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. As of September 30, 2023, Black Knights $1.0 billion principal amount of its 3.625% senior notes due 2028 remained outstanding and became part of ICE's consolidated long-term debt on the acquisition date of September 5, 2023. Our commercial paper notes had original maturities ranging from 3 to 45 days 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. The Term Loan has a maturity date of August 31, 2025 and bears interest at a rate of 6.3% as of September 30, 2023.

As of December 31, 2022, we had $18.1 billion in outstanding debt, all of which related to our senior notes. We also had $4 million outstanding under credit lines at our ICE India subsidiaries. As of December 31, 2022, our senior notes of $18.1 billion had a weighted average maturity of 16 years and a weighted average cost of 3.6% per annum. We did not have any commercial paper notes or term loan balances outstanding as of December 31, 2022.

We have a $3.9 billion senior unsecured revolving credit facility, or the Credit Facility, with a maturity date of May 25, 2027. 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 remaining $1.4 billion was available for working capital and general corporate purposes including, but not limited to, acting as a backstop to future increases in the amounts outstanding under the Commercial Paper Program.

We used the net proceeds of our senior notes due in 2025, 2027, 2029 and 2062, or, collectively, the Notes, together with the issuance of commercial paper, cash on hand and borrowings under the Term Loan, to finance the cash portion of the purchase price for Black Knight. For additional information regarding this transaction, refer to Note 3 to our consolidated unaudited financial statements, included in this Quarterly Report.

We have a $2.4 billion two-year senior unsecured delayed draw term loan facility, or the Term Loan. We borrowed the Term Loan in full on August 31, 2023 in connection with the closing of 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 Term SOFR plus an applicable margin,currently 0.775%, plus a credit spread adjustment of 10 basis points. The proceeds from borrowings under the Term Loan were used to fund a portion of the purchase price for the Black Knight acquisition. We have the option to prepay outstanding amounts under the Term Loan in whole or in part at any time.

Our Commercial Paper Program enables us to borrow efficiently at reasonable short-term interest rates and provides us with the flexibility to de-lever using our strong annual cash flows from operating activities whenever our leverage becomes elevated as a result of investment or acquisition activities. In connection with our acquisition of Black Knight, during the three months ended September 30, 2023, we had $2.3 billion of net issuances under the Commercial Paper Program.

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

For additional details of our debt instruments, refer to Note 8 to our consolidated unaudited financial statements, included in this Quarterly Report, and Note 10 to our consolidated financial statements included in our 2022 Form 10-K.

Capital Return

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

We did not have any share repurchases during the nine months ended September 30, 2023. For the nine months ended September 30, 2022, we repurchased 5.0 million shares of our outstanding common stock at a cost of $632 million, including 4.6 million shares at a cost of $582 million under our Rule 10b5-1 trading plan and 0.4 million shares at a cost of $50 million on the open market during an open trading period. We did not have any share repurchases during the three months ended September 30, 2022. Shares repurchased are held in treasury stock.

The remaining balance of Board approved funds for future repurchases as of September 30, 2023 is $2.5 billion. In connection with our initial announcement of our plan to acquire Black Knight, on May 4, 2022 we terminated our Rule 10b5-1 trading plan and suspended share repurchases. The approval of our Board for stock repurchases does not obligate us to acquire any particular amount of our common stock. In addition, our Board may increase or decrease the amount available for repurchases from time to time.

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

During the three months ended September 30, 2023, we paid a quarterly dividend of $0.42 per share of our common stock for an aggregate payout of $241 million, which includes the payment of dividend equivalents on unvested employee restricted stock units.

Future Capital Requirements

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

We currently expect to incur capital expenditures (including operational and real estate capital expenditures) and to incur software development costs that are eligible for capitalization ranging in the aggregate between $500 million and $525 million in 2023, which we believe will support the enhancement of our technology, business integration and the continued growth of our businesses.

As of September 30, 2023, we had $2.5 billion authorized for future repurchases of our common stock. Refer to Note 10 to our consolidated financial statements included in this Quarterly Report for additional details on our stock repurchase program.

Our Board has adopted a quarterly dividend policy providing that dividends will be approved quarterly by the Board or the Audit Committee taking into account factors such as our evolving business model, prevailing business conditions, our current and future planned strategic growth initiatives and our financial results and capital requirements, without a predetermined net income payout ratio. On November 2, 2023, we announced a $0.42 per share dividend for the fourth quarter of 2023 with the dividend payable on December 29, 2023 to stockholders of record as of December 14, 2023.

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

Non-GAAP Measures

Non-GAAP Financial Measures

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

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

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

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


	Exchanges Segment						Fixed Income and Data Services Segment						Mortgage Technology Segment						Consolidated
	Nine Months Ended September 30,
Operating income adjustments:	2023			2022			2023			2022			2023			2022			2023			2022
Total revenues, less transaction-based expenses	$	3,304		$	3,089		$	1,668		$	1,555		$	815		$	880		$	5,787		$	5,524
Operating expenses	944			904			1,057			1,029			1,017			817			3,018			2,750
Less: Amortization of acquisition-related intangibles	49			50			127			137			316			271			492			458
Less: Transaction and integration costs	—			—			—			—			201			79			201			79
Less: Other	17			—			—			—			—			—			17			—









Adjusted operating expenses	$	878		$	854		$	930		$	892		$	500		$	467		$	2,308		$	2,213
Operating income/(loss)	$	2,360		$	2,185		$	611		$	526		$	(202)		$	63		$	2,769		$	2,774
Adjusted operating income	$	2,426		$	2,235		$	738		$	663		$	315		$	413		$	3,479		$	3,311
Operating margin	71		%	71		%	37		%	34		%	(25)		%	7		%	48		%	50		%
Adjusted operating margin	73		%	72		%	44		%	43		%	39		%	47		%	60		%	60		%

Non-operating income adjustments:
Net income attributable to ICE common stockholders																			$	1,995		$	1,021
Add: Amortization of acquisition-related intangibles																			492			458
Add: Transaction and integration costs																			201			79





Add/(Less): Net interest (income)/expense on pre-acquisition-related debt and debt extinguishment																			(12)			79




Less: Gain on sale of Euroclear equity investment and dividends received																			—			(41)



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






Add: Other																			40			9
Less: Income tax effect for the above items																			(178)			(478)

Less: Deferred tax adjustments on acquisition-related intangibles																			(131)			(3)
Less: Other tax adjustments																			(81)			—
Adjusted net income attributable to ICE common stockholders																			$	2,417		$	2,276


Diluted earnings per share attributable to ICE common stockholders																			$	3.55		$	1.82


Adjusted diluted earnings per share attributable to ICE common stockholders																			$	4.30		$	4.06


Diluted weighted average common shares outstanding																			562			561


	Exchanges Segment						Fixed Income and Data Services Segment						Mortgage Technology Segment						Consolidated
	Three Months Ended September 30,
Operating income adjustments:	2023			2022			2023			2022			2023			2022			2023			2022
Total revenues, less transaction-based expenses	$	1,114		$	1,001		$	559		$	534		$	330		$	276		$	2,003		$	1,811
Operating expenses	313			301			358			337			487			260			1,158			898
Less: Amortization of acquisition-related intangibles	16			17			42			44			133			91			191			152
Less: Transaction and integration costs	—			—			—			—			155			19			155			19










Adjusted operating expenses	$	297		$	284		$	316		$	293		$	199		$	150		$	812		$	727
Operating income/(loss)	$	801		$	700		$	201		$	197		$	(157)		$	16		$	845		$	913
Adjusted operating income	$	817		$	717		$	243		$	241		$	131		$	126		$	1,191		$	1,084
Operating margin	72		%	70		%	36		%	37		%	(48)		%	6		%	42		%	50		%
Adjusted operating margin	73		%	72		%	44		%	45		%	39		%	46		%	59		%	60		%

Non-operating income adjustments:
Net income/(loss) attributable to ICE common stockholders																			$	541		$	(191)
Add: Amortization of acquisition-related intangibles																			191			152
Add: Transaction and integration costs																			155			19





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








Add: Net losses from and impairment of unconsolidated investees																			26			1,095






Add: Other																			23			—
Less: Income tax effect for the above items																			(66)			(355)

Less: Deferred tax adjustments on acquisition-related intangibles																			(46)			(18)

Adjusted net income attributable to ICE common stockholders																			$	824		$	733


Diluted earnings/(loss) per share attributable to ICE common stockholders																			$	0.96		$	(0.34)


Adjusted diluted earnings per share attributable to ICE common stockholders																			$	1.46		$	1.31


Diluted weighted average common shares outstanding																			565			560

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

Transaction and integration costs are included as part of our core business expenses, except for those that are directly related to the announcement, closing, financing, or termination of a transaction. However, we adjust for the acquisition-related transaction and integration costs for acquisitions such as Ellie Mae given the magnitude of the $11.4 billion purchase price of the acquisition. We also adjust for the acquisition-related transaction costs related to our $11.8 billion acquisition of Black Knight for the same reason.

We adjust for our share of net gains/(losses) related to our equity method investments, which primarily include OCC and Bakkt. During the three months ended September 30, 2022, we also exclude an impairment in our investment in Bakkt to its fair value. We believe these adjustments provide greater clarity of our performance, given that equity and equity method investments are non-cash and not a part of our core operations.

Other non-GAAP adjustments during the nine months ended September 30, 2023 relate to a $6 million expense for claims made following a NYSE system outage that occurred in January 2023, accruals related to potential regulatory settlements of $11 million, the combined loss of $7 million related to our fair value adjustment and sale of a portion of our Dun & Bradstreet investment, net of dividends, and an impairment related to our consolidated audit trail, or CAT, loan receivable of $16 million. The CAT was approved by the SEC in 2016 to improve regulators’ ability to monitor trading activity. Other non-GAAP adjustments during the nine months ended September 30, 2022 relate to an accrual for a legal settlement. We do not consider events of this type to be reflective of our core business.

During the nine months ended September 30, 2023, we exclude $12 million of net interest income on interest earned on investments from the pre-acquisition debt proceeds, net of interest expense on pre-acquisition-related debt from our May 2022 debt refinancing related to the Black Knight acquisition. During the nine months ended September 30, 2022, we exclude $79 million of net interest expense on pre-acquisition-related debt for the same refinancing. This adjustment is net of $30 million of interest income earned on investments from the pre-acquisition debt proceeds. In addition, during the three months ended September 30, 2022 we exclude the $30 million of costs associated with the May and June 2022 extinguishment of four series of senior notes that would have matured in 2022 and 2023 using proceeds from our May 2022 issuance of new senior notes as a non-GAAP adjustment. Finally, during the nine months ended September 30, 2022, we exclude the gain on the sale of our Euroclear investment. We do not consider events of this type to be reflective of our core business.

Non-GAAP tax adjustments include the tax impacts of the pre-tax non-GAAP adjustments, deferred tax adjustments on acquisition-related intangibles, and other tax adjustments. The deferred tax adjustments of $131 million and $46 million for the nine and three months ended September 30, 2023, respectively, and $3 million and $18 million for the nine and three months ended September 30, 2022, respectively, are primarily related to U.S. state apportionment changes. Other tax adjustments of $81 million during the nine months ended September 30, 2023 are primarily related to audit settlements for pre-acquisition tax matters as well as state apportionment changes in prior years.

Non-GAAP Liquidity Measures

We consider adjusted free cash flow to be a non-GAAP liquidity measure that provides useful information to management and investors to analyze cash resources generated from our operations. We believe that adjusted free cash flow is also useful as one of the bases for comparing our performance with our competitors, and demonstrates our ability to convert the reinvestment of capital expenditures and capitalized software development costs required to maintain and grow our business, as well as adjust for timing differences related to the payment of section 31 fees. This non-GAAP liquidity measure is not presented in accordance with, or as an alternative to, GAAP liquidity measures and may be different from non-GAAP measures used by other companies. Adjusted free cash flow, including the related adjustments are as follows (in millions):


	Nine Months Ended September 30,
	2023		2022
Net cash provided by operating activities	$	2,573	$	2,462
Less: Capital expenditures	(104)		(125)
Less: Capitalized software development costs	(222)		(200)
Free cash flow	2,247		2,137
Add/(less): Section 31 fees, net	205		(1)
Adjusted free cash flow	$	2,452	$	2,136

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

Contractual Obligations and Commercial Commitments

During the nine months ended September 30, 2023, there were no significant changes to our contractual obligations and commercial commitments from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Form 10-K.

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

New and Recently Adopted Accounting Pronouncements

During the nine months ended September 30, 2023, there were no significant changes to the new and recently adopted accounting pronouncements applicable to us from those disclosed in Note 2 of our 2022 Form 10-K.

Critical Accounting Policies

During the nine months ended September 30, 2023, there were no significant changes to our critical accounting policies and estimates from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Form 10-K.

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