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;
global political conditions including the presidential election in the United States, or U.S., and general elections in many jurisdictions in the U.S. and the United Kingdom, or U.K.;
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 industry 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 and servicing activity, mortgage delinquencies, fees, changing regulations, competition and consolidation;
our ability to minimize the risks associated with operating clearing houses in multiple jurisdictions;
our exchanges’ and clearing houses' compliance with their respective regulatory and oversight responsibilities;
the resilience of our electronic platforms and soundness of our business continuity and disaster recovery plans;
our ability to realize the expected benefits of our acquisitions and our investments, including our acquisition of Black Knight, Inc., or Black Knight, and our ability to remain in compliance with the Federal Trade Commission consent order to resolve antitrust concerns regarding our 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 business confidential;
the impacts of a public health emergency or pandemic, including a 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, servicing activity, delinquencies 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 2023 Form 10-K, as filed with the SEC on February 8, 2024. 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 leading global provider of technology and data to a broad range of customers including financial institutions, corporations and government entities. These products, which span major asset classes including futures, equities, fixed income and U.S. residential mortgages, 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 marketplace technology for the listing, trading and clearing of a broad array of derivatives contracts and financial securities as well as data and connectivity services related to our exchanges and clearing houses.
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 technology.
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

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, 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 and interest rate volatility, 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, 2023 and, to a lesser extent, the first quarter of 2024, 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 election outcomes and 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. We have closely been monitoring the credit worthiness of our counterparties and investment agents during 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 2023 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:

Increased Bank Capital Requirements. 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 proposed to implement various Basel Committee standards which would increase U.S. bank capital requirements (Basel III Endgame). The Basel III Endgame would apply credit valuation adjustment risk capital requirements to bank-affiliated clearing members' exposures to their clearing clients. The Federal Reserve also proposes to revise the risk-based capital surcharge for global systemically important bank holding companies to include bank-affiliated clearing members' exposures to their clearing clients in additional aspects of the surcharge calculation. Both proposals would increase capital requirements for client clearing activities, which could increase costs for clearing services, decrease clearing members' clearing capacity, and result in a reduction of cleared volumes at ICE clearing houses. The Basel III Endgame proposal could also discourage participation in mortgage lending and servicing, resulting in a reduction of mortgage volumes at ICE Mortgage Technology, negatively impact U.S. capital markets, end users' ability to hedge and raise financing through public markets and degrade liquidity.
EMIR 3.0. In February 2024, the European Commission, European Parliament, and Council of the EU reached agreement on the final text of the European Market Infrastructure Regulation, or EMIR, known as EMIR 3.0. EMIR 3.0 contains provisions requiring EU market participants to establish accounts for euro-denominated short-term interest rate derivatives, or STIRs, at an EU central counterparty, or CCP, and a requirement to clear a certain number of trades in an EU account. At this time, the number of trades required to be cleared in an EU account is not finalized; however, these requirements could result in a reduction of traded and cleared contracts at ICE Futures Europe and ICE Clear Europe.
Policy intervention to address high energy prices. Various legislative proposals in the 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 liquefied natural gas, or LNG, import benchmark. In December 2023, the EU extended until January 31, 2025, the price cap on certain Dutch Title Transfer Facility, or TTF, derivatives traded on ICE Endex. 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 remains in place and impacts the services we offer to clients.
Benchmarks Regulation.** Most London Interbank Offered Rate, or LIBOR, settings have ceased to be published; however, the Financial Conduct Authority, or FCA, has required ICE Benchmark Administration, or IBA, as the administrator of LIBOR, to continue publishing certain LIBOR settings for a temporary period using a changed "synthetic" methodology. "Synthetic" LIBOR settings are not representative of the underlying market or economic reality the settings were previously intended to measure.

In addition, certain benchmarks provided by our index businesses may continue to be used by supervised entities in the EU under the EU Benchmarks Regulation until December 31, 2025.

EU Deforestation Regulation.** Effective in December 2024, the EU Deforestation Regulation, or EUDR, requires that certain commodities (including cocoa and coffee) and their products be from deforestation-free land and meet other requirements before they can be placed or made available on the EU market, or exported from it. The EUDR requirements may decelerate the physical trade of cocoa and coffee, impact the usability of 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). In March, 20 EU Member States urged the EU Commission to revise the EUDR and temporarily suspend implementation. We are monitoring the impact of these developments on ICE Futures Europe and ICE Futures U.S.
U.K. Deforestation Regulation. In December 2023, the U.K. Government announced its intent to implement a regulation which would require that certain commodities (including cocoa) and their products be from deforestation-free land and meet other requirements. Legislation to implement these requirements is likely to be adopted early in 2024. We are monitoring the impact of these developments and any impact on ICE Futures Europe.
U.K. Commodity Derivatives Reform. In December 2023, the FCA published a consultation proposing to revise the U.K. commodity derivatives framework. The Financial Services and Markets Act 2023, or FSMA 2023, reformed the U.K.’s commodity derivatives regulatory regime including revoking the Markets in Financial Instruments Directive II, or MIFID II, requirement to set position limits on all exchange traded and over-the-counter contracts and transferring the powers to set position limits from the FCA to trading venue operators. The FCA is proposing to require that trading venues set position limits for critical and related contracts including ICE's softs, agricultural and energy contracts such as Brent, WTI, gasoil and natural gas, to establish accountability thresholds and to report enhanced position data. These requirements could make trading on ICE Futures Europe more difficult and could result in a reduction in volumes and liquidity.

Tax Policy Changes

The OECD Pillar Two minimum tax rules, which generally provide for a minimum effective tax rate of 15%, are intended to apply to tax years beginning in 2024. In 2023, the OECD issued administrative guidance providing transitional safe harbor rules concerning the implementation of the Pillar Two framework, which will apply to fiscal years ending on or before December 31, 2026. The EU member states and many other countries, including the U.K., have committed to implement or have already enacted legislation adopting the Pillar Two rules. We are monitoring developments and evaluating the impacts of these new rules on our tax rate, including our ability to qualify for the safe harbor rules as implemented by each jurisdiction; however, we do not expect a material impact to our effective tax rate given our current tax profile.

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).

23404 23406 23407

23410 23411 23412

(1) Operating loss from our Mortgage Technology segment was $48 million and $28 million for the three months ended March 31, 2024 and 2023, respectively.

(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.


	Three Months Ended March 31,
	2024			2023			Change
Revenues, less transaction-based expenses	$	2,290		$	1,896		21 %
Recurring revenues(1)	$	1,196		$	953		25 %
Transaction revenues, net(1)	$	1,094		$	943		16 %
Operating expenses	$	1,227		$	927		32 %
Adjusted operating expenses(2)	$	930		$	740		26 %
Operating income	$	1,063		$	969		10 %
Adjusted operating income(2)	$	1,360		$	1,156		18%
Operating margin	46		%	51		%	(5 pts)
Adjusted operating margin(2)	59		%	61		%	(2 pts)
Other income/(expense), net	$	(99)		$	(120)		(16) %
Income tax expense	$	181		$	175		3 %
Effective tax rate	19		%	21		%	(2 pts)
Net income attributable to ICE	$	767		$	655		17 %
Adjusted net income attributable to ICE(2)	$	852		$	791		8 %
Diluted earnings per share attributable to ICE common stockholders	$	1.33		$	1.17		14 %
Adjusted diluted earnings per share attributable to ICE common stockholders(2)	$	1.48		$	1.41		5 %
Cash flows from operating activities	$	1,009		$	653		54 %
Free cash flow(3)	$	864		$	568		52 %
Adjusted free cash flow (3)	$	877		$	673		30 %

(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. We believe 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.

Revenues, less transaction-based expenses, increased $394 million for the three months ended March 31, 2024 from the comparable period in 2023. See "—Exchanges Segment", "—Fixed Income and Data Services Segment" and "—Mortgage Technology Segment" below for a discussion of the significant changes in our revenues. The increase in revenues during the three months ended March 31, 2024 includes $9 million in favorable foreign exchange effects arising from fluctuations in the U.S. dollar from the comparable period in 2023.
Operating expenses increased $300 million for the three months ended March 31, 2024 from the comparable period in 2023. See "—Consolidated Operating Expenses" below for a discussion of the significant changes in our operating expenses. The increase in operating expenses during the three months ended March 31, 2024 includes $3 million in unfavorable foreign exchange effects arising from fluctuations in the U.S. dollar from the comparable period in 2023.

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 2023 Form 10-K.

Segment Results

Our business is conducted through three reportable business segments:

Exchanges:** We operate regulated marketplace technology for the listing, trading and clearing of a broad array of derivatives contracts and financial securities as well as data and connectivity services related to our exchanges and clearing houses;
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 technology; 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):

192

194 195 196 197

(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.


	Three Months Ended March 31,
	2024		2023		Change
Revenues:
Energy futures and options	$	457	$	345	33	%
Agricultural and metals futures and options	72		70		3
Financial futures and options	135		128		6
Futures and options	664		543		22
Cash equities and equity options	610		671		(9)
OTC and other	103		101		2
Transaction and clearing, net	1,377		1,315		5
Data and connectivity services	235		232		1
Listings	122		126		(4)
Revenues	1,734		1,673		4
Transaction-based expenses(1)	511		576		(11)
Revenues, less transaction-based expenses	1,223		1,097		12
Other operating expenses	256		259		(1)
Depreciation and amortization	70		61		13

Operating expenses	326		320		2
Operating income	$	897	$	777	16	%

Recurring revenues	$	357	$	358	—	%
Transaction revenues, net	$	866	$	739	17	%

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

Exchanges Revenues

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

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

For the three months ended March 31, 2024 and 2023, 23% and 20%, 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 $7 million for the three months ended March 31, 2024, from the comparable periods in 2023.

Our exchange transaction and clearing revenues are presented net of rebates. We recorded rebates of $297 million and $252 million for the three months ended March 31, 2024 and 2023, 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 three months ended March 31, 2024 is primarily due to higher volumes traded as compared to the comparable period in 2023.

Energy Futures and Options: Total energy volume increased 25% and revenues increased 33% for the three months ended March 31, 2024 from the comparable period in 2023.

–Total oil futures and options volume increased 21% for the three months ended March 31, 2024 from the comparable period in 2023, driven, in part, by elevated levels of price uncertainty related to oil supply/demand dynamics and geopolitical risk.

–Our global natural gas futures and options volume increased 32% for the three months ended March 31, 2024 from the comparable period in 2023, due to continued growth in our TTF and Asian JKM products as natural gas continues to globalize, as well as strength in our North American natural gas products driven by increased volatility related to shifting weather and fundamentals.

**–**Our environmentals and other futures and options volume increased 16% for the three months ended March 31, 2024 from the comparable period in 2023, due to higher environmentals and 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 9% and revenues increased 3% for the three months ended March 31, 2024 from the comparable period in 2023, driven by elevated price volatility as a result of weather-related supply and demand dynamics impacting our Cocoa and Cotton markets.

**–**Sugar futures and options volumes decreased 15% for the three months ended March 31, 2024 from the comparable period in 2023.

–Other agricultural and metal futures and options volume increased 26% for the three months ended March 31, 2024 from the comparable period in 2023.

Financial Futures and Options: Total volumes in our financial futures and options markets increased 4% and revenues increased 6% for the three months ended March 31, 2024 from the comparable period in 2023, including the impacts of foreign exchange effects. The three months ended March 31, 2024 benefited from elevated interest rate volatility related to increased central bank activity speculation.

**–**Interest rate futures and options volume increased 9% and revenue increased 16% for the three months ended March 31, 2024 from the comparable period in 2023. The three months ended March 31, 2024 benefited from elevated interest rate volatility related to increased central bank activity speculation. Interest rate futures and options revenues were $97 million and $84 million for the three months ended March 31, 2024 and 2023, respectively.

**–**Other financial futures and options volume, which includes our MSCI®, FTSE® and NYSE FANG+ equity index products, decreased 21% and revenue decreased 13% for the three months ended March 31, 2024 from the comparable period in 2023. The decrease was primarily due to lower equity market volatility than during the comparable period in 2023. Other financial futures and options revenues were $38 million and $44 million for the three months ended March 31, 2024 and 2023, respectively.

Cash Equities and Equity Options: Cash equities volume increased 2% for the three months ended March 31, 2024 from the comparable period in 2023, due to increased market share as compared to the same prior year period. Cash equities revenues, net of transaction-based expenses, were $71 million and $67 million for the three months ended March 31, 2024 and 2023, respectively. Equity options volume increased 7% for the three months ended March 31, 2024 from the comparable period in 2023, driven by increased participation and higher market share. Equity options revenues, net of transaction-based expenses, were $28 million for both the three months ended March 31, 2024 and 2023.
OTC and Other: OTC and other transactions include revenues from our OTC energy business and other trade confirmation services, as well as interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of our U.S. securities exchanges, designated market maker service fees, exchange membership fees and agricultural grading and certification fees. Our OTC and other revenues increased 2% for the three months ended March 31, 2024 from the comparable period in 2023.
Data and Connectivity Services:** Our data and connectivity services revenues increased 1% for the three months ended March 31, 2024 from the comparable period in 2023. 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 4% for the three months ended March 31, 2024, from the comparable period in 2023, due to the roll off of initial listing fees from the strong IPO market in 2021. 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

10226 10227 10228


	Three Months Ended March 31,
	2024		2023		Change
Number of contracts traded (in millions):
Energy futures and options	266		213		25	%
Agricultural and metals futures and options	33		30		9
Financial futures and options	200		193		4
Total	499		436		15	%



Average daily volume of contracts traded (in thousands):
Energy futures and options	4,368		3,440		27	%
Agricultural and metals futures and options	543		490		11
Financial futures and options	3,187		3,022		5
Total	8,098		6,952		16	%



Rate per contract:
Energy futures and options	$	1.71	$	1.62	6	%
Agricultural and metals futures and options	$	2.17	$	2.30	(6)	%
Financial futures and options	$	0.67	$	0.66	2	%

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

11110 11111 11112


	As of March 31,
	2024	2023	Change
Open interest — in thousands of contracts:
Energy futures and options	57,751	47,511	22	%
Agricultural and metals futures and options	4,696	4,394	7
Financial futures and options	26,206	21,891	20
Total	88,653	73,796	20	%

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:

11310 11311 11312 11313


	Three Months Ended March 31,
	2024		2023		Change
NYSE cash equities (shares in millions):
Total cash handled volume	2,438		2,381		2	%
Total cash market share matched	20.4	%	19.8	%	0.6 pts
NYSE equity options (contracts in thousands):
NYSE equity options volume	9,325		8,708		7	%
Total equity options volume	43,311		42,433		2	%
NYSE share of total equity options	21.5	%	20.5	%	1 pt
Revenue capture or rate per contract:
Cash equities rate per contract (per 100 shares)	$0.048		$0.045		5	%
Equity options rate per contract	$0.05		$0.05		(4)	%

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 $67 million and $119 million for the three months ended March 31, 2024 and 2023, respectively. The decrease in Section 31 fees during the three months ended March 31, 2024 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 $66 million as of March 31, 2024.

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 $444 million and $457 million for the three months ended March 31, 2024 and 2023, respectively.

Operating Expenses, Operating Income and Operating Margin

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


Exchanges Segment:	Three Months Ended March 31,
	2024			2023			Change
Operating expenses	$	326		$	320		2	%
Adjusted operating expenses(1)	$	307		$	288		6	%
Operating income	$	897		$	777		16	%
Adjusted operating income(1)	$	916		$	809		13	%
Operating margin	73		%	71		%	2 pts
Adjusted operating margin(1)	75		%	74		%	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.


	Three Months Ended March 31,
	2024		2023		Change
Revenues:
Fixed income execution	$	26	$	32	(15)	%
CDS clearing	93		101		(8)
Fixed income data and analytics	288		276		4
Fixed income and credit	407		409		—
Other data and network services	161		154		4
Revenues	568		563		1
Other operating expenses	274		258		6

Depreciation and amortization	80		85		(6)

Operating expenses	354		343		3
Operating income	$	214	$	220	(3)	%

Recurring revenues	$	449	$	430	4	%
Transaction revenues	$	119	$	133	(10)	%

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

For both the three months ended March 31, 2024 and 2023, 11% 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 higher by $2 million for the three months ended March 31, 2024 than the comparable period in 2023.

Fixed Income and Data Services Revenues

Our Fixed Income and Data Services revenues increased 1% for the three months ended March 31, 2024 from the comparable period in 2023, primarily due to strength in our fixed income data and analytics products and our other data and network services.

Fixed Income Execution:** Fixed income execution includes revenues from ICE Bonds. Execution fees are reported net of rebates, which were $3 million for the three months ended March 31, 2024 and nominal for the three months ended March 31, 2023. Our fixed income execution revenues decreased 15% for the three months ended March 31, 2024 from the comparable period in 2023, as higher revenues from corporate bond trading were offset by lower levels of U.S. treasury activity.
CDS Clearing: CDS clearing revenues decreased 8% for the three months ended March 31, 2024 from the comparable period in 2023. The notional value of CDS cleared was $5.0 trillion and $6.8 trillion for the three months ended March 31, 2024 and 2023, respectively, as elevated volatility and demand for credit protection benefited the first quarter of 2023.
Fixed Income Data and Analytics: Our fixed income data and analytics revenues increased 4% for the three months ended March 31, 2024 from the comparable period in 2023 due to growth in our pricing and reference data business and strength in our index business.
Other Data and Network Services: Our other data and network services revenues increased 4% for the three months ended March 31, 2024 from the comparable period in 2023. The increase in revenues was driven by growth in our ICE Global Network offering, strength in our consolidated feeds and stronger desktop revenues.

Annual Subscription Value, or ASV, represents, at a point in time, data services revenues, which include 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. Management considers ASV metrics when making financial and operating decisions and believes ASV is useful for management and investors in understanding our data services business performance.

As of March 31, 2024, ASV was $1.786 billion, which increased 4.6% compared to the ASV as of March 31, 2023. ASV represents nearly 100% of total data services revenues for this segment. This does not adjust for year-over-year foreign exchange fluctuations.

Operating Expenses, Operating Income and Operating Margin

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


Fixed Income and Data Services Segment:	Three Months Ended March 31,
	2024			2023			Change
Operating expenses	$	354		$	343		3	%
Adjusted operating expenses(1)	$	309		$	301		3	%
Operating income	$	214		$	220		(3)	%
Adjusted operating income(1)	$	259		$	262		(1)	%
Operating margin	38		%	39		%	(1 pt)
Adjusted operating margin(1)	46		%	47		%	(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.


	Three Months Ended March 31,
	2024		2023		Change
Revenues:
Origination technology	$	174	$	174	—%
Closing solutions	44		41		9
Servicing software	214		—		n/a
Data and analytics	67		21		210

Revenues	499		236		111
Other operating expenses	280		129		116
Depreciation and amortization	231		114		103
Acquisition-related transaction and integration costs	36		21		72
Operating expenses	547		264		107
Operating loss	$	(48)	$	(28)	71%

Recurring revenues	$	390	$	165	136%
Transaction revenues	$	109	$	71	53%

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

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

Mortgage Technology Revenues

Our mortgage technology revenues are derived from our comprehensive, end-to-end U.S. residential mortgage platform. Our mortgage technology business is intended to enable greater workflow efficiency and mitigate risks for customers throughout the mortgage life cycle. Mortgage technology revenues increased $263 million for the three months ended March 31, 2024 from the comparable period in 2023, primarily due the Black Knight acquisition.

Origination technology: Our origination technology revenues were flat during the three months ended March 31, 2024 from the comparable period in 2023. 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 increased 9% during the three months ended March 31, 2024 from the comparable period in 2023, driven by increased market share and continued adoption of digital solutions. Our closing solutions connect key participants, such as lenders, title and settlement agents and individual county recorders, to digitize the closing and recording process. Closing solutions also include revenues from our MERSCORP Holdings, Inc., or MERS, database, which provides a system of record for recording and tracking changes, 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 integrated mortgage servicing solutions, which help automate all areas of the servicing process, from loan boarding to final payment or default, to help lower costs, reduce risk and improve financial performance. Our servicing solutions support first lien mortgages, home equity loans and lines of credit on a single platform to manage all servicing processes, including loan setup and maintenance, escrow administration, investor reporting, and regulatory requirements. We also provide solutions that provide consumers with access to customized, timely information about their mortgages and allow our clients’ customer service

representatives to access the same customer information, which is key to increasing borrower retention. Another servicing solution provides clients, third-party providers and their developers access to our growing catalog of application programming interfaces, or APIs, across the mortgage life cycle.

Our default servicing solutions help simplify the complex process for loans that move into default, while supporting servicers with their compliance requirements and to facilitate more efficient loss mitigation processes.

We also offer advanced technology to support the bankruptcy and foreclosure process, and more efficiently manage claims related to properties in foreclosure, as well as tools to support loss analysis, to help servicers make the right decisions at the right time.

Data and analytics: Our Data and Analytics revenues increased 210% during the three months ended March 31, 2024 from the comparable period in 2023, primarily due to the revenue contribution from Black Knight during the three months ended March 31, 2024. Revenues include those related to ICE Mortgage Technology’s Data & Document Automation and Mortgage Analyzer solutions, or Analyzer, which offers customers greater efficiency by streamlining data collection and validation through our automated document recognition and data extraction capabilities. 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 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, for lenders and industry participants to access industry data and origination information. Revenues related to our data products are largely subscription-based and recurring in nature. The data and insights from these solutions inform, support and enhance our other solutions to help lenders and servicers make more informed decisions, improve performance, identify and predict risk and generate more qualified leads. Revenues related to our data products are largely subscription-based and recurring in nature.

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

The following chart summarizes our Mortgage Technology segment's operating expenses, operating 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:	Three Months Ended March 31,
	2024			2023			Change
Operating expenses	$	547		$	264		107%
Adjusted operating expenses(1)	$	314		$	151		107%
Operating loss	$	(48)		$	(28)		71%
Adjusted operating income(1)	$	185		$	85		118%
Operating margin	(10)		%	(12)		%	2 pts
Adjusted operating margin(1)	37		%	36		%	1 pt

Consolidated Operating Expenses

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

119


	Three Months Ended March 31,
	2024		2023		Change
Compensation and benefits	$	462	$	352	31	%
Professional services	36		28		28
Acquisition-related transaction and integration costs	36		21		72
Technology and communication	205		172		19
Rent and occupancy	29		20		44
Selling, general and administrative	78		74		6
Depreciation and amortization	381		260		46
Total operating expenses	$	1,227	$	927	32	%

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

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

Included in the total consolidated operating expenses for the three months ended March 31, 2024 was $288 million related to Black Knight.

For the three months ended March 31, 2024 and 2023, 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 higher by $3 million for the three months ended March 31, 2024 than in the comparable period in 2023.

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 and stock compensation components of our compensation and benefits expense is based on both our financial performance and individual employee performance. Therefore, our compensation and benefits expense will vary year-to-year based on our financial performance and fluctuations in our number of employees. The below chart summarizes the significant drivers of our compensation and benefits expense results for the periods presented (dollars in millions, except employee headcount).


	Three Months Ended March 31,
	2024		2023		Change
Employee headcount	13,226		9,010		47	%
Stock-based compensation expenses	$	51	$	40	28	%

Employee headcount increased during the three months ended March 31, 2024 from the comparable period in 2023 primarily due to our acquisition of Black Knight. Compensation and benefits expense increased $110 million for the three months ended March 31, 2024 from the comparable period in 2023, primarily due to $108 million attributable to our acquisition of Black Knight and higher payroll from the impact of prior year merit increases, 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 increased $8 million for the three months ended March 31, 2024 from the comparable period in 2023, primarily due to our acquisition of Black Knight combined with increases in consulting and legal expenses.

Acquisition-Related Transaction and Integration Costs

We incurred $36 million in acquisition-related transaction and integration costs during the three months ended March 31, 2024 primarily due to integration expenses related to Black Knight. We incurred $21 million in acquisition-related transaction costs during the three months ended March 31, 2023, 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 $33 million for the three months ended March 31, 2024 from the comparable period in 2023 primarily due to hardware and software support costs mainly at Black Knight and 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 $9 million for the three months ended March 31, 2024 from the comparable period in 2023 primarily due to $7 million of duplicate rent expenses related to our new London and New York leased offices and increases attributable to Black Knight locations.

Selling, General and Administrative Expenses

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

Selling, general and administrative expenses increased $4 million for the three months ended March 31, 2024, from the comparable period in 2023 primarily due to $10 million related to listings customer acquisition costs from higher IPO activity, $5 million related to increased marketing expenses and increases in other underlying costs, including travel and entertainment. This was partially offset by $6 million of expense for claims made following a NYSE system outage and a $10 million regulatory matter expense that both occurred during the three months ended March 31, 2023.

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, purchased software, internally-developed software, furniture, fixtures and equipment over their estimated useful lives. This expense includes amortization of intangible assets obtained in our acquisitions of businesses over their estimated useful lives. Intangible assets subject to amortization consist primarily of customer relationships, technology, data & databases and trademarks & trade names.

We recorded amortization expenses on intangible assets acquired as part of our acquisitions, as well as on other intangible assets of $254 million, inclusive of a $3 million impairment of a developed technology intangible asset, and $150 million for the three months ended March 31, 2024 and 2023, respectively. During the three months ended March 31, 2024, $105 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 $127 million and $110 million for the three months ended March 31, 2024 and 2023, respectively. This increase was primarily due to $6 million related to Black Knight and increases in internally developed software assets and leasehold improvements.

Consolidated Non-Operating Income/(Expense)

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


	Three Months Ended March 31,
	2024		2023		Change*
Other income/(expense):
Interest income	$	30	$	91	(68)%
Interest expense	(241)		(176)		37
Other income/(expense), net	112		(35)		n/a
Total other income/(expense), net	$	(99)	$	(120)	(16)%
Net income attributable to non-controlling interest	$	(16)	$	(19)	(17)%

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

Interest Income

Interest income decreased during the three months ended March 31, 2024 from the same period in 2023 primarily due to decreased investment balances following the Black Knight acquisition. For the three months ended March 31, 2023, we earned $69 million in interest income in connection with the short-term investments related to the $5.0 billion of senior notes issued in connection with, and the operating cash accumulated for, the Black Knight acquisition. In addition, our clearing houses also earned interest income of $23 million and $19 million during the three months ended March 31, 2024 and 2023, respectively. The remainder primarily relates to interest earned on various unrestricted and restricted cash balances held within our group entities.

Interest Expense

Interest expense on our outstanding debt increased $65 million for the three months ended March 31, 2024 as compared to the same period in 2023. During the three months ended March 31, 2024 we incurred an incremental increase in interest expense of $52 million on borrowings under our Commercial Paper program and Term Loan (each as defined in “—Liquidity and Capital Resources—Debt”), both of which partially funded the Black Knight acquisition. We also incurred interest expense of $13 million on the $1.0 billion of senior notes assumed as part of the Black Knight acquisition.

Other Income/(Expense), net

Our equity method investments include OCC and Bakkt, among others. We recognized $42 million and $35 million during the three months ended March 31, 2024 and 2023, respectively, of our share of estimated equity method investment losses, net, which is included in other expense, net. The estimated losses for both the three months ended March 31, 2024 and 2023 are primarily related to our investment in Bakkt, partially offset by our share of net profits of OCC. Both the three month periods ended March 31, 2024 and 2023 include adjustments to reflect the difference between reported prior period actual results from our original estimates.

During the three months ended March 31, 2024, we recorded a fair value loss of $3 million on our equity investments that do not have readily determinable fair values.

During the three months ended March 31, 2024, we recorded a gain of $160 million related to the PennyMac arbitration final award payment.

We incurred foreign currency transaction losses of $4 million and $1 million for the three months ended March 31, 2024 and 2023, respectively, primarily attributable to the fluctuations of the pound sterling and euro relative to the U.S. dollar. Foreign currency transaction gains and losses are recorded in other income/(expense), net, when the settlement of foreign currency assets, liabilities and payables occur in non-functional currencies and there is an increase or decrease in the period-end foreign currency exchange rates between periods.

Non-controlling Interest

For consolidated subsidiaries in which our ownership is less than 100%, and for which we have control over the assets, liabilities and management of the entity, the outside stockholders’ interests are shown as non-controlling interests. As of March 31, 2024, 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 was $181 million and $175 million for the three months ended March 31, 2024 and 2023, 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 19% and 21% for the three months ended March 31, 2024 and 2023, respectively. The effective tax rate for the three months ended March 31, 2024 was lower than the effective tax rate for the comparable period in 2023 primarily due to deferred income tax benefits from state apportionment changes in the current period, partially offset by the U.K. corporate income tax rate increase to 25% effective for the full year in 2024, the net effect of which was greater than the impact of favorable audit settlements for certain historical periods during the three months ended March 31, 2023.

The OECD Pillar Two minimum tax rules, which generally provide for a minimum effective tax rate of 15%, are intended to apply to tax years beginning in 2024. The European Union member states and many other countries, including the U.K., our most significant non-U.S. jurisdiction, have committed to implement or have already enacted legislation adopting the Pillar Two rules. In July 2023, the U.K. enacted the U.K. Finance Act 2023, effective as of January 1, 2024, which included provisions to implement certain portions of the Pillar Two minimum tax rules and included an election to apply a transitional safe harbor to extend certain effective dates to accounting periods ending on or before June 30, 2028. These new U.K. Pillar Two rules did not have a material impact on our income tax provision as of March 31, 2024.

Foreign Currency Exchange Rate Impact

As an international business, our financial statements are impacted by changes in foreign currency exchange rates. Our exposure to foreign denominated earnings for the three months ended March 31, 2024 is presented by primary foreign currency in the following table (dollars in millions, except exchange rates):


	Three Months Ended March 31, 2024
	Pound Sterling			Euro
Average exchange rate to the U.S. dollar in the current year period	1.2683			1.0859
Average exchange rate to the U.S. dollar in the same period in the prior year	1.2150			1.0730
Average exchange rate increase/(decrease)	4		%	1		%
Foreign denominated percentage of:
Revenues, less transaction-based expenses	7		%	8		%
Operating expenses	6		%	1		%
Operating income	9		%	15		%
Impact of the currency fluctuations(1) on:
Revenues, less transaction-based expenses	$	7		$	2
Operating expenses	$	3		$	—
Operating income	$	4		$	2

(1) Represents the impact of currency fluctuation for the three months ended March 31, 2024 compared to the same periods in the prior year.

During the three months ended March 31, 2024, 15% and 7% our consolidated revenues, less transaction-based expenses, and consolidated operating expenses were denominated in pounds sterling or euros, respectively. As the pound sterling or euro exchange rate changes, the U.S. equivalent of revenues and expenses denominated in foreign currencies changes accordingly.

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 equity method investments and acquisition-related transaction and integration costs in each period.

451 452 453

455 457 458

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 $863 million and $899 million as of March 31, 2024 and December 31, 2023, respectively. We had $1.5 billion and $871 million in short-term and long-term restricted cash and cash equivalents as of March 31, 2024 and December 31, 2023, respectively. We had $62 million and $680 million in restricted short-term and long-term investments as of March 31, 2024 and December 31, 2023, respectively. We had $74.1 billion and $79.0 billion of cash and cash equivalent margin deposits and guaranty funds as of March 31, 2024 and December 31, 2023, respectively.

As of March 31, 2024, the amount of unrestricted cash held by our non-U.S. subsidiaries was $427 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 U.S. income tax consequences. We intend to apply the high tax exception to Global Intangible Low-Taxed Income in 2023 and 2024, thus the majority of our foreign earnings in 2023 and 2024 are not expected to be

subject to immediate U.S. income taxation. These foreign earnings can also generally be distributed to the U.S. with no additional material U.S. income tax consequences, primarily due to the availability of dividend received deductions.

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):


	Three Months Ended March 31,
2024			2023
Net cash provided by/(used in):
Operating activities	$	1,009		$	653
Investing activities	259			2,045
Financing activities	(5,522)			(42,351)
Effect of exchange rate changes	(5)			1
Net decrease in cash and cash equivalents, restricted cash and cash equivalents, and cash and cash equivalent margin deposits and guaranty funds	$	(4,259)		$	(39,652)

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 $356 million increase in net cash provided by operating activities during the three months ended March 31, 2024 from the comparable period in 2023 was primarily driven by an increase in net income, which includes the $160 million gain related to the PennyMac arbitration final award payment, adjusted for depreciation and amortization and an increase in working capital. The increases in working capital were primarily driven by increased accounts receivable collections and lower Section 31 fees payable due to the rate changes determined by the SEC, offset primarily by timing of various payments and receipts.

Investing Activities

Consolidated net cash provided by investing activities for the three months ended March 31, 2024 primarily relates to $702 million in proceeds from the sale of restricted investments, $230 million in proceeds from sales of invested margin deposits and $75 million in proceeds from the sale of the Promissory Note, partially offset by $536 million of purchases of invested margin deposits, $64 million of purchases of restricted investments, $58 million of capital expenditures and $87 million of capitalized software development costs.

Consolidated net cash provided by investing activities for the three months ended March 31, 2023 primarily relates to $2.6 billion in proceeds from the sale of invested margin deposits, partially offset by $463 million of purchases of invested margin deposits, $21 million of capital expenditures and $64 million of capitalized software development costs.

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

Financing Activities

Consolidated net cash used in financing activities for the three months ended March 31, 2024 primarily relates to a decrease in our cash and cash equivalent margin deposits and guaranty fund balances of $4.6 billion, $600 million in repayments on our debt facilities, $258 million in dividend payments to stockholders, $71 million in cash payments related to treasury shares received for restricted stock tax payments and stock option exercises and $38 million in net repayments under our Commercial Paper Program.

Consolidated net cash used in financing activities for the three months ended March 31, 2023 primarily relates to a decrease in our cash and cash equivalent margin deposits and guaranty fund balances of $42.1 billion due to lower commodity prices and reduced volatility, $236 million in dividend payments to stockholders and $49 million in cash payments related to treasury shares received for restricted stock tax payments and stock option exercises.

Debt

As of March 31, 2024, we had $22.0 billion in outstanding debt, consisting of $19.1 billion of unsecured senior notes, $1.9 billion under our Commercial Paper Program and $1.0 billion under our Term Loan. Our senior notes of $19.1 billion have a weighted average maturity of 15 years and a weighted average cost of 3.6% per annum. Our commercial paper notes had original maturities ranging from 4 to 45 days as of March 31, 2024, with a weighted average interest rate of 5.6% per annum and a weighted average remaining maturity of 28 days. The Term Loan has a maturity date of August 31, 2025 and bears interest at a rate of 6.3% as of March 31, 2024.

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 March 31, 2024, of the $3.9 billion that was available for borrowing under the Credit Facility, $1.9 billion was required to back-stop the amount outstanding under our U.S. dollar commercial paper program, or the Commercial Paper Program, and $172 million was required to support certain broker-dealer and other subsidiary commitments. The remaining $1.8 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 have a $2.4 billion two-year senior unsecured delayed draw term loan facility, or the Term Loan, with a maturity date of August 31, 2025. We borrowed the Term Loan in full on August 31, 2023 in connection with the Black Knight acquisition, and, through the period ended March 31, 2024, we repaid $1.4 billion, reducing the principal outstanding balance to $1.0 billion as of March 31, 2024.

Draws under the Term Loan bear interest on the principal amount outstanding at either (a) Term Secured Overnight Financing Rate, or Term SOFR, plus an applicable margin plus a credit spread adjustment of 8.75 basis points or (b) a "base rate" plus an applicable margin. We have the option to prepay outstanding amounts under the Term Loan in whole or in part at any time. As of March 31, 2024, we had $1.0 billion outstanding under the Term Loan.

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.

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.

On February 20, 2024, we commenced a consent solicitation with respect to the outstanding notes of a subsidiary of Black Knight, or the Black Knight Notes, pursuant to which we solicited consents from eligible holders to amend the Black Knight Notes and the related indenture, under which they were issued to eliminate certain of the covenants, restrictive provisions and events of default from such indenture. The consent solicitation expired February 28, 2024, at which time the requisite majority of consents had been received. On February 29, 2024, we paid the consenting holders aggregate cash consideration of $2.5 million and the amendment to eliminate the covenant to furnish certain reports, documents and information to holders of the Black Knight notes and the trustee under the indenture governing the Black Knight Notes took effect. The remaining amendments will take effect on the date we complete a private exchange offer to exchange outstanding Black Knight Notes for new senior notes issued by us, which is required to be commenced within 90 days of the expiration of the consent solicitation.

For additional details of our debt instruments, refer to Note 8 to our unaudited consolidated financial statements, included in this Quarterly Report, and Note 10 to our consolidated financial statements included in our 2023 Form 10-K.

Capital Return

In December 2021, our Board approved an aggregate of $3.15 billion for future repurchases of our common stock with no fixed expiration date that became effective January 1, 2022. The 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. We did not have any share repurchases during the three months ended March 31, 2024 or 2023. Shares repurchased are held in treasury stock.

In December 2021, we entered into a Rule 10b5-1trading plan that became effective in February 2022. In connection with our acquisition of Black Knight, on May 4, 2022, we terminated our Rule 10b5-1 trading plan and suspended share repurchases. The remaining balance of Board approved funds for future repurchases as of March 31, 2024 was $2.5 billion.

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 March 31, 2024, we paid a quarterly dividend of $0.45 per share of our common stock for an aggregate payout of $258 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 $600 million and $650 million in 2024, which we believe will support the enhancement of our technology, business integration and the continued growth of our businesses.

As of March 31, 2024, we had $2.5 billion authorized for future repurchases of our common stock. We may resume repurchases of our common stock, subject to achieving certain debt leverage ratio targets. Refer to Note 10 to our consolidated financial statements included in this Quarterly Report for additional details on our stock repurchase program.

Our Board has adopted a quarterly dividend policy providing that dividends will be approved quarterly by the Board or the Audit Committee taking into account factors such as our evolving business model, prevailing business conditions, our current and future planned strategic growth initiatives and our financial results and capital requirements, without a predetermined net income payout ratio. On May 2, 2024, we announced a $0.45 per share dividend for the second quarter of 2024 with the dividend payable on June 28, 2024 to stockholders of record as of June 13, 2024.

Other than the facilities for the ICE Clearing Houses, our Credit Facility, our Term Loan 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 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, and adjusted diluted earnings per share, which are non-GAAP measures that are calculated by making adjustments for items we view as not reflective of our cash operations and core business performance. These measures, including the adjustments and their related income tax effect and other tax adjustments (in millions, except for percentages and per share amounts), are as follows:


	Exchanges Segment						Fixed Income and Data Services Segment						Mortgage Technology Segment						Consolidated
	Three Months Ended March 31,
Operating income adjustments:	2024			2023			2024			2023			2024			2023			2024			2023
Total revenues, less transaction-based expenses	$	1,223		$	1,097		$	568		$	563		$	499		$	236		$	2,290		$	1,896
Operating expenses	326			320			354			343			547			264			1,227			927
Less: Amortization of acquisition-related intangibles	19			16			38			42			197			92			254			150
Less: Transaction and integration costs	—			—			—			—			36			21			36			21
Less: Regulatory matter	—			10			—			—			—			—			—			10
Less: Other	—			6			7			—			—			—			7			6








Adjusted operating expenses	$	307		$	288		$	309		$	301		$	314		$	151		$	930		$	740
Operating income/(loss)	$	897		$	777		$	214		$	220		$	(48)		$	(28)		$	1,063		$	969
Adjusted operating income	$	916		$	809		$	259		$	262		$	185		$	85		$	1,360		$	1,156
Operating margin	73		%	71		%	38		%	39		%	(10)		%	(12)		%	46		%	51		%
Adjusted operating margin	75		%	74		%	46		%	47		%	37		%	36		%	59		%	61		%

Non-operating income adjustments:
Net income attributable to ICE common stockholders																			$	767		$	655
Add: Amortization of acquisition-related intangibles																			254			150
Add: Transaction and integration costs																			36			21






(Less)/Add: Litigation and regulatory matters																			(160)			10





Add: Net losses from unconsolidated investees																			42			35
Add: Fair value adjustment of equity investments																			3			—






Less: Net interest income on pre-acquisition-related debt																			—			(6)
Add: Other																			7			6
Less: Income tax effect for the above items																			(46)			(57)

(Less)/Add: Deferred tax adjustments on acquisition-related intangibles																			(51)			1
Less: Other tax adjustments																			—			(24)
Adjusted net income attributable to ICE common stockholders																			$	852		$	791


Diluted earnings per share attributable to ICE common stockholders																			$	1.33		$	1.17


Adjusted diluted earnings per share attributable to ICE common stockholders																			$	1.48		$	1.41


Diluted weighted average common shares outstanding																			575			561

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. For the three months ended March 31, 2024, included in amortization of acquisition-related intangibles is $3 million of impairment related to developed technology within our Exchanges Segment.

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 Black Knight and Ellie Mae given the magnitude of the $11.8 billion and $11.4 billion, respectively, purchase prices of the acquisitions.

Litigation and regulatory matters during the three months ended March 31, 2024 include the $160 million gain related to the PennyMac arbitration award resolution and payment received. Litigation and regulatory matters during the three months ended March 31, 2023 include an accrual related to a potential regulatory settlement of $10 million. We do not consider events of this type to be reflective of our core business.

We adjust for our share of net gains/(losses) related to our equity method investments, which primarily include OCC and Bakkt. In addition, during the three months ended March 31, 2024, we excluded $3 million of fair value losses on our equity investments. We believe these adjustments provide greater clarity of our performance, given that equity and equity method investments are non-cash and not a part of our core operations.

During the three months ended March 31, 2023, we excluded $6 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.

Other non-GAAP adjustments during the three months ended March 31, 2024 relate to $7 million of duplicate rent expense on our new London and New York leased offices. We took possession of the new London and New York leases during the fourth quarter of 2023 and first quarter 2024, respectively, and expect the spaces to be completed in the third quarter of 2024. We view these duplicate non-cash rent expenses of the new offices during the transition to be incremental, non-recurring, and not related to the normal operations of the Company. Other non-GAAP adjustments during the three months ended March 31, 2023 relate to a $6 million expense for claims made following a NYSE system outage that occurred in January 2023. 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 ($51 million) and $1 million for the three months ended March 31, 2024 and 2023, respectively, are primarily related to U.S. state apportionment changes. Other tax adjustments of ($24 million) during the three months ended March 31, 2023 are primarily related to audit settlements for pre-acquisition tax matters.

Non-GAAP Liquidity Measures

We consider free cash flow and adjusted free cash flow to be non-GAAP liquidity measures that provide useful information to management and investors to analyze cash resources generated from our operations. We believe that free cash flow and adjusted free cash flow are also useful when comparing our performance to that of 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. These non-GAAP liquidity measures are 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. Free cash flow and adjusted free cash flow, including the related adjustments are as follows (in millions):


	Three Months Ended March 31,
	2024		2023
Net cash provided by operating activities	$	1,009	$	653
Less: Capital expenditures	(58)		(21)
Less: Capitalized software development costs	(87)		(64)
Free cash flow	864		568
Add: Section 31 fees, net	13		105
Adjusted free cash flow	$	877	$	673

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

Off-Balance Sheet Arrangements

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

Contractual Obligations and Commercial Commitments

During the three months ended March 31, 2024, we entered into a 15 year lease in New York City resulting in an initial total lease liability of $88 million. Other than this lease, 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 2023 Form 10-K.

New and Recently Adopted Accounting Pronouncements

During the three months ended March 31, 2024, there were no significant changes to the new and recently adopted accounting pronouncements applicable to us from those disclosed in Note 2 of our 2023 Form 10-K.

Critical Accounting Policies

During the three months ended March 31, 2024, 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 2023 Form 10-K.

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