Item 16. Form 10-K Summary.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 1, 2017.

	Nasdaq, Inc.
	By:	/s/ Adena T. Friedman
	Name:	Adena T. Friedman
	Title:	President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of March 1, 2017.

Name		Title
/s/ Adena T. Friedman		President and Chief Executive Officer and Director
Adena T. Friedman		(Principal Executive Officer)
/s/ Michael Ptasznik		Executive Vice President, Corporate Strategy and Chief Financial Officer
Michael Ptasznik		(Principal Financial Officer)
/s/ Ann M. Dennison		Senior Vice President and Controller
Ann M. Dennison		(Principal Accounting Officer)
*		Chairman of the Board
Robert Greifeld
*		Director
Charlene T. Begley
*		Director
Steven D. Black
*		Director
Börje E. Ekholm
*		Director
Glenn H. Hutchins
*		Director
Essa Kazim
*		Director
Thomas A. Kloet
*		Director
Ellyn A. McColgan
*		Director
Michael R. Splinter
*		Director
Lars R. Wedenborn

*	Pursuant to Power of Attorney

By:	/s/ Edward S. Knight
	Edward S. Knight
	Attorney-in-Fact

Nasdaq, Inc.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

The following consolidated financial statements of Nasdaq, Inc. and its subsidiaries are presented herein on the page indicated:

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Income	F-4
Consolidated Statements of Comprehensive Income (Loss)	F-5
Consolidated Statements of Changes in Equity	F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-8

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Nasdaq, Inc.

We have audited the accompanying consolidated balance sheets of Nasdaq, Inc. (the “Company”) as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2016. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Nasdaq, Inc. at December 31, 2016 and 2015, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Nasdaq, Inc.’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 1, 2017 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

New York, New York

March 1, 2017

F-2

Nasdaq, Inc.

Consolidated Balance Sheets

(in millions, except share and par value amounts)

	December 31, 2016				December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	403			$	301
Restricted cash	15				56
Financial investments, at fair value	245				201
Receivables, net	429				316
Default funds and margin deposits	3,301				2,228
Other current assets	167				158
Total current assets	4,560				3,260
Property and equipment, net	362				323
Deferred tax assets	717				643
Goodwill	6,027				5,395
Intangible assets, net	2,094				1,959
Other non-current assets	390				281
Total assets	$	14,150			$	11,861
Liabilities
Current liabilities:
Accounts payable and accrued expenses	$	175			$	158
Section 31 fees payable to SEC	108				98
Accrued personnel costs	207				171
Deferred revenue	162				127
Other current liabilities	129				138
Default funds and margin deposits	3,301				2,228
Total current liabilities	4,082				2,920
Debt obligations	3,603				2,364
Deferred tax liabilities	720				626
Non-current deferred revenue	171				200
Other non-current liabilities	144				142
Total liabilities	8,720				6,252
Commitments and contingencies
Equity
Nasdaq stockholders’ equity:
Common stock, $0.01 par value, 300,000,000 shares authorized, shares issued: 170,501,186 at December 31, 2016 and 167,241,734 at December 31, 2015; shares outstanding: 166,579,468 at December 31, 2016 and 164,324,270 at December 31, 2015	2				2
Additional paid-in capital	3,104				3,011
Common stock in treasury, at cost: 3,921,718 shares at December 31, 2016 and 2,917,464 shares at December 31, 2015	(176		)		(111		)
Accumulated other comprehensive loss	(979		)		(864		)
Retained earnings	3,479				3,571
Total Nasdaq stockholders’ equity	5,430				5,609
Total liabilities and equity	$	14,150			$	11,861

See accompanying notes to consolidated financial statements.

F-3

Nasdaq, Inc.

Consolidated Statements of Income

(in millions, except per share amounts)

	Year Ended December 31,
	2016				2015				2014
Revenues:
Market Services	$	2,255			$	2,084			$	2,229
Corporate Services	635				562				552
Information Services	540				512				473
Market Technology	275				245				246
Total revenues	3,705				3,403				3,500
Transaction-based expenses:
Transaction rebates	(1,092		)		(983		)		(1,065		)
Brokerage, clearance and exchange fees	(336		)		(330		)		(368		)
Revenues less transaction-based expenses	2,277				2,090				2,067
Operating expenses:
Compensation and benefits	664				590				588
Professional and contract services	153				148				157
Computer operations and data communications	111				107				92
Occupancy	86				85				110
General, administrative and other	72				65				89
Marketing and advertising	30				28				32
Depreciation and amortization	170				138				137
Regulatory	35				27				27
Merger and strategic initiatives	76				10				81
Restructuring charges	41				172				—
Total operating expenses	1,438				1,370				1,313
Operating income	839				720				754
Interest income	5				4				6
Interest expense	(135		)		(111		)		(117		)
Asset impairment charges	(578		)		—				(49		)
Other investment income	3				—				—
Net income from unconsolidated investees	2				17				—
Income before income taxes	136				630				594
Income tax provision	28				203				181
Net income	108				427				413
Net loss attributable to noncontrolling interests	—				1				1
Net income attributable to Nasdaq	$	108			$	428			$	414
Per share information:
Basic earnings per share	$	0.65			$	2.56			$	2.45
Diluted earnings per share	$	0.64			$	2.50			$	2.39
Cash dividends declared per common share	$	1.21			$	0.90			$	0.58

See accompanying notes to consolidated financial statements.

F-4

Nasdaq, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(in millions)

	Year Ended December 31,
	2016				2015				2014
Net income	$	108			$	427			$	413
Other comprehensive income (loss):
Foreign currency translation losses:
Net foreign currency translation losses	(183		)		(283		)		(733		)
Income tax benefit	68				100				127
Total	(115		)		(183		)		(606		)
Employee benefit plan gains (losses):
Employee benefit plan adjustment gains (losses)	—				2				(15		)
Income tax benefit (expense)	—				(1		)		6
Total	—				1				(9		)
Total other comprehensive loss, net of tax	(115		)		(182		)		(615		)
Comprehensive income (loss)	(7		)		245				(202		)
Comprehensive loss attributable to noncontrolling interests	—				1				1
Comprehensive income (loss) attributable to Nasdaq	$	(7	)		$	246			$	(201	)

See accompanying notes to consolidated financial statements.

F-5

Nasdaq, Inc.

Consolidated Statements of Changes in Equity

(in millions, except share amounts)

	Number of Common Shares Outstanding			Common Stock at Par Value				Additional Paid-in Capital				Common Stock In Treasury, at Cost				Accumulated Other Comprehensive Loss				Retained Earnings				Non- controlling Interests				Total
Balance at December 31, 2013	169,357,084			$	2			$	4,278			$	(1,005	)		$	(67	)		$	2,976			$	—			$	6,184
Net income (loss)	—			—				—				—				—				414				(1		)		413
Foreign currency translation, net of tax of $127	—			—				—				—				(606		)		—				—				(606		)
Employee benefit plan adjustments, net of tax of $6	—			—				—				—				(9		)		—				—				(9		)
Cash dividends declared per common share	—			—				—				—				—				(98		)		—				(98		)
Share repurchase program	(4,592,194	)		—				—				(178		)		—				—				—				(178		)
Amortization and vesting of restricted stock and PSUs	1,972,573			—				57				—				—				—				—				57
Stock options amortization and exercises, net	1,578,050			—				33				—				—				—				—				33
Other issuances of common stock, net	(512,497	)		—				24				(28		)														(4		)
Retirement of common stock held in treasury	—			—				(1,170		)		1,170				—				—				—				—
Sale of subsidiary shares to noncontrolling interests and other adjustments	—			—				—				—				—				—				2				2
Issuance of Nasdaq common stock related to a prior acquisition	992,247			—				—				—				—				—				—				—
Balance at December 31, 2014	168,795,263			$	2			$	3,222			$	(41	)		$	(682	)		$	3,292			$	1			$	5,794
Net income (loss)	—			—				—				—				—				$	428			$	(1	)		427
Foreign currency translation, net of tax of $100	—			—				—				—				(183		)		—				—				(183		)
Employee benefit plan adjustments, net of tax of $1	—			—				—				—				1				—				—				1
Cash dividends declared per common share	—			—				—				—				—				(149		)		—				(149		)
Share repurchase program	(7,191,685	)		—				(340		)		(37		)		—				—				—				(377		)
Amortization and vesting of restricted stock and PSUs	1,455,380			—				64				—				—				—				—				64
Stock options amortization and exercises, net	682,054			—				18				—				—				—				—				18
Other issuances of common stock, net	(408,989	)		—				59				(33		)		—				—								26
Purchase of subsidiary shares to noncontrolling interests and other adjustments	—			—				(12		)		—				—				—				—				(12		)
Issuance of Nasdaq common stock related to a prior acquisition	992,247			—				—				—				—				—				—				—
Balance at December 31, 2015	164,324,270			$	2			$	3,011			$	(111	)		$	(864	)		$	3,571			$	—			$	5,609
Net income	—			—				—				—				—				108				—				108
Foreign currency translation, net of tax of $68	—			—				—				—				(115		)		—				—				(115		)
Cash dividends declared per common share	—			—				—				—				—				(200		)		—				(200		)
Share repurchase program	(1,547,778	)		—				(100		)		—				—				—				—				(100		)
Amortization and vesting of restricted stock and PSUs	2,361,699			—				82				—				—				—				—				82
Stock options amortization and exercises, net	1,219,820			—				41				—				—				—				—				41
Other issuances of common stock, net	(770,790	)		—				70				(65		)		—				—				—				5
Issuance of Nasdaq common stock related to a prior acquisition	992,247			—				—				—				—				—				—				—
Balance at December 31, 2016	166,579,468			$	2			$	3,104			$	(176	)		$	(979	)		$	3,479			$	—			$	5,430

See accompanying notes to consolidated financial statements.

F-6

Nasdaq, Inc.

Consolidated Statements of Cash Flows

(in millions)

	Year Ended December 31,
	2016				2015				2014
Cash flows from operating activities:
Net income	$	108			$	427			$	413
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	170				138				137
Share-based compensation	86				68				62
Excess tax benefits related to share-based payments	(54		)		(45		)		(15		)
Deferred income taxes	(136		)		(14		)		(6		)
Non-cash restructuring charges	8				136				—
Non-cash merger and strategic initiatives	—				—				20
Asset impairment charges	578				—				49
Net income from unconsolidated investees	(2		)		(17		)		—
Other reconciling items included in net income	9				7				28
Net change in operating assets and liabilities, net of effects of acquisitions:
Receivables, net	(24		)		55				(16		)
Other assets	(18		)		(41		)		(84		)
Accounts payable and accrued expenses	5				(38		)		(40		)
Section 31 fees payable to SEC	5				(26		)		42
Accrued personnel costs	27				33				(4		)
Deferred revenue	(15		)		(49		)		64
Other liabilities	(25		)		48				(18		)
Net cash provided by operating activities	722				682				632
Cash flows from investing activities:
Purchases of trading securities	(443		)		(346		)		(283		)
Proceeds from sales and redemptions of trading securities	392				319				281
Purchases of available-for-sale investment securities	(25		)		(38		)		(20		)
Proceeds from maturities of available-for-sale investment securities	19				29				17
Capital contribution in equity method investment	—				(30		)		—
Acquisition of businesses, net of cash and cash equivalents acquired	(1,460		)		(226		)		—
Purchases of property and equipment	(134		)		(133		)		(140		)
Other investment activities	(6		)		(10		)		(10		)
Net cash used in investing activities	(1,657		)		(435		)		(155		)
Cash flows from financing activities:
Payments of debt obligations	(1,156		)		(369		)		(970		)
Proceeds from utilization of credit commitment	898				506				241
Proceeds from issuances of senior unsecured notes and term loan facility	1,558				—				494
Cash paid for repurchase of common stock	(100		)		(377		)		(178		)
Cash dividends	(200		)		(149		)		(98		)
Proceeds received from employee stock activity	54				29				40
Payments related to employee shares withheld for taxes	(65		)		(34		)		(31		)
Excess tax benefits related to share-based payments	54				45				15
Proceeds (disbursements) of customer funds	(38		)		13				25
Other financing activities	(3		)		(19		)		2
Net cash provided by (used in) financing activities	1,002				(355		)		(460		)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(6		)		(11		)		(23		)
Net increase (decrease) in cash and cash equivalents and restricted cash	61				(119		)		(6		)
Cash and cash equivalents and restricted cash at beginning of period	357				476				482
Cash and cash equivalents and restricted cash at end of period	$	418			$	357			$	476
Supplemental Disclosure Cash Flow Information
Cash paid for:
Interest	$	119			$	103			$	114
Income taxes, net of refund	$	191			$	202			$	190
Non-cash investing activities:
Cost method investment	$	—			$	—			$	75

See accompanying notes to consolidated financial statements.

F-7

Nasdaq, Inc.

Notes to Consolidated Financial Statements

1. Organization and Nature of Operations

Nasdaq, Inc. is a leading provider of trading, clearing, exchange technology, regulatory, securities listing, information and public company services. Our global offerings are diverse and include trading and clearing across multiple asset classes, trade management services, data products, financial indexes, capital formation solutions, corporate solutions, and market technology products and services. Our technology powers markets across the globe, supporting equity derivative trading, clearing and settlement, cash equity trading, fixed income trading and many other functions.

In 2016, due to changes in our executive leadership and to better reflect how our chief operating decision maker views the businesses, we realigned our reportable segments to integrate the Corporate Solutions and Listing Services businesses into our new Corporate Services segment. Market Technology is now a separate reportable segment. Prior to this change, our Corporate Solutions and Market Technology businesses were part of our Technology Solutions segment. All prior period segment disclosures have been recast to reflect our change in reportable segments.

We manage, operate and provide our products and services in four business segments: Market Services, Corporate Services, Information Services and Market Technology.

Market Services

Our Market Services segment includes our Equity Derivative Trading and Clearing, Cash Equity Trading, FICC, and Trade Management Services businesses. Our FICC business was formerly referred to as fixed income, currency and commodities trading and clearing, and our Trade Management Services business was formerly referred to as access and broker services. We operate multiple exchanges and other marketplace facilities across several asset classes, including derivatives, commodities, cash equity, debt, structured products and ETPs. In addition, in some countries where we operate exchanges, we also provide broker services, clearing, settlement and central depository services. Our transaction-based platforms provide market participants with the ability to access, process, display and integrate orders and quotes. The platforms allow the routing and execution of buy and sell orders as well as the reporting of transactions, providing fee-based revenues.

Through our acquisition of ISE, we now operate six electronic options exchanges and three cash equity exchanges in the U.S. See “Acquisition of ISE,” of Note 4, “Acquisitions,” for further discussion of the ISE acquisition. The Nasdaq Stock Market, the largest of our cash equities exchanges, is the largest single venue of liquidity for trading U.S.-listed cash equities. We also operate an electronic platform for trading of U.S. Treasuries and NFX, a U.S. based energy derivatives market which offers cash settled energy derivatives based on key energy benchmarks including oil, natural gas and U.S. power.

Through our acquisition of Chi-X Canada, in February 2016, we also operate three Canadian markets for the trading of Canadian-listed securities. Effective June 1, 2016, we changed the name of Chi-X Canada to Nasdaq CXC. See “Acquisition of Nasdaq CXC,” of Note 4, “Acquisitions,” for further discussion of this acquisition.

In Europe, we operate exchanges in Stockholm (Sweden), Copenhagen (Denmark), Helsinki (Finland), and Reykjavik (Iceland), as well as the clearing operations of Nasdaq Clearing. We also operate exchanges in Tallinn (Estonia), Riga (Latvia) and Vilnius (Lithuania) as Nasdaq Baltic. Collectively, Nasdaq Nordic and Nasdaq Baltic offer trading in cash equities and depository receipts, warrants, convertibles, rights, fund units and exchange traded funds as well as trading and clearing of derivatives and clearing of resale and repurchase agreements.

Nasdaq Commodities is the brand name for Nasdaq’s worldwide suite of commodity-related products and services. Nasdaq Commodities’ offerings include oil, power, natural gas and carbon emission markets, tanker and dry cargo freight, seafood derivatives, iron ore, electricity certificates and clearing services. The products are listed on two of Nasdaq’s derivatives exchanges, Nasdaq Oslo ASA and NFX.

Through our Trade Management Services business, we provide market participants with a wide variety of alternatives for connecting to and accessing our markets via a number of different protocols used for quoting, order entry, trade reporting, DROP functionality and connectivity to various data feeds. We also provide co-location services to market participants, whereby firms may lease cabinet space and power to house their own equipment and servers within our data centers. Our broker services operations offer technology and customized securities administration solutions to financial participants in the Nordic market.

Corporate Services

Our Corporate Services segment includes our Corporate Solutions and Listing Services businesses.

Our Corporate Solutions business serves corporate clients, including companies listed on our exchanges and private companies. We help organizations manage the two-way flow of information with their key constituents, including their board members and investors, and with clients and the public through our suite of advanced technology, analytics, and consultative services. Our Corporate Solutions business primarily offers products to serve the following key areas: investor relations, public relations, governance and multimedia solutions. We currently have approximately 18,000 Corporate Solutions clients.

Our Listing Services business includes our U.S. and European Listing Services businesses. We operate a variety of listing platforms around the world to provide multiple global capital raising solutions for private and public companies. Our main

F-8

listing markets are The Nasdaq Stock Market and the Nasdaq Nordic and Nasdaq Baltic exchanges. Through Nasdaq First North, our Nordic and Baltic operations also offer alternative marketplaces for smaller companies and growth companies. Our Listing Services business also includes NPM, which provides services for private companies.

As of December 31, 2016, The Nasdaq Stock Market was home to 2,897 listed companies with a combined market capitalization of approximately $8.9 trillion, and in Europe, the Nasdaq Nordic and Nasdaq Baltic exchanges, together with Nasdaq First North, were home to 900 listed companies with a combined market capitalization of approximately $1.2 trillion.

Information Services

Our Information Services segment includes our Data Products and our Index Licensing and Services businesses. Our Data Products business sells and distributes historical and real-time quote and trade information to market participants and data distributors. Our data products enhance transparency of the market activity within the exchanges that we operate and provide critical information to professional and non-professional investors globally.

Our Index Licensing and Services business develops and licenses Nasdaq branded indexes, associated derivatives, and financial products and also provides custom calculation services for third-party clients. As of December 31, 2016, we had 298 ETPs licensed to Nasdaq’s indexes which had over $124 billion of assets under management.

Market Technology

Our Market Technology segment is a leading global technology solutions provider and partner to exchanges, clearing organizations, central securities depositories, regulators, banks, brokers and corporate businesses. Our Market Technology business is the sales channel for our complete global offering to other marketplaces.

Market Technology provides technology solutions for trading, clearing, settlement, surveillance and information dissemination to markets with wide-ranging requirements, from the leading markets in the U.S., Europe and Asia to emerging markets in the Middle East, Latin America, and Africa. Our marketplace solutions can handle a wide array of assets, including cash equities, equity derivatives, currencies, various interest-bearing securities, commodities and energy products, and are currently powering more than 85 marketplaces in 50 countries. Market Technology also provides market surveillance services to broker-dealer firms worldwide, as well as enterprise governance, risk management and compliance software solutions.

For further discussion of our business, see “Item 1. Business.”

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The consolidated financial statements are prepared in accordance with U.S. GAAP. The financial statements include

the accounts of Nasdaq, its wholly-owned subsidiaries and other entities in which Nasdaq has a controlling financial interest. When we do not have a controlling interest in an entity but exercise significant influence over the entity’s operating and financial policies, such investment is accounted for under the equity method of accounting. We recognize our share of earnings or losses of an equity method investee based on our ownership percentage. See “Equity Method Investments,” of Note 6, “Investments,” for further discussion of our equity method investments.

The accompanying consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results. These adjustments are of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Subsequent Events

We have evaluated subsequent events through the issuance date of this Annual Report on Form 10-K. See Note 20, “Subsequent Events,” for further discussion.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Foreign Currency

Foreign denominated assets and liabilities are remeasured into the functional currency at exchange rates in effect at the balance sheet date and recorded through the income statement. Gains or losses resulting from foreign currency transactions are remeasured using the rates on the dates on which those elements are recognized during the period, and are included in general, administrative and other expense in the Consolidated Statements of Income.

Translation gains or losses resulting from translating our subsidiaries’ financial statements from the local functional currency to the reporting currency, net of tax, are included in accumulated other comprehensive loss within stockholders’ equity in the Consolidated Balance Sheets. Assets and liabilities are translated at the balance sheet date while revenues and expenses are translated at the date the transaction occurs or at an applicable average rate.

Deferred taxes are not provided on cumulative translation adjustments where we expect earnings of a foreign subsidiary to be indefinitely reinvested. The income tax effect of currency translation adjustments related to foreign subsidiaries that are not considered indefinitely reinvested is recorded as a component of deferred taxes with an offset to accumulated other

F-9

comprehensive loss within stockholders’ equity in the Consolidated Balance Sheets.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and all non-restricted highly liquid investments with original maturities of 90 days or less at the time of purchase. Such equivalent investments included in cash and cash equivalents in the Consolidated Balance Sheets were $251 million as of December 31, 2016 and $157 million as of December 31, 2015. Cash equivalents are carried at cost plus accrued interest, which approximates fair value due to the short maturities of these investments.

Restricted Cash

Current restricted cash, which was $15 million as of December 31, 2016 and $56 million as of December 31, 2015, is restricted from withdrawal due to a contractual requirement or not available for general use and is classified as restricted cash in the Consolidated Balance Sheets. As of December 31, 2016, current restricted cash primarily includes restricted cash held for our trading and clearing businesses. As of December 31, 2015, current restricted cash primarily included restricted cash related to customer funds held in connection with privately negotiated securities transactions.

Financial Investments

Financial investments, at fair value are primarily comprised of trading securities, mainly highly rated European government debt securities. Trading securities are bought principally to meet regulatory capital requirements for Nasdaq Clearing’s operations and are generally sold in the near term. Changes in fair value of trading securities are included in dividend and investment income. Financial investments that are classified as available-for-sale investment securities are carried at fair value with unrealized gains and losses, net of tax, reported in accumulated other comprehensive loss within stockholders’ equity in the Consolidated Balance Sheets. Realized gains and losses on these securities are included in earnings upon disposition of the securities using the specific identification method. In addition, realized losses are recognized when management determines that a decline in value is other than temporary, which requires judgment regarding the amount and timing of recovery. For financial investments that are classified as available-for-sale securities, we also consider the extent to which cost exceeds fair value, the duration of that difference, management’s judgment about the issuer’s current and prospective financial condition, as well as our intent and ability to hold the security until recovery of the unrealized losses.

Fair value of both trading and available-for-sale investment securities is generally obtained from third party pricing sources. When available, quoted market prices are used to determine fair value. If quoted market prices are not available, fair values are estimated using pricing models with observable market inputs. The inputs to the valuation models vary by the type of security being priced but are typically benchmark yields, reported trades, broker-dealer quotes, and prices of similar assets.

Pricing models generally do not entail material subjectivity because the methodologies employed use inputs observed from active markets. See “Fair Value Measurements,” below for further discussion of fair value measures.

Receivables, net

Our receivables are concentrated with our member firms, market data distributors, listed companies, corporate solutions and market technology customers. Receivables are shown net of a reserve for uncollectible accounts. The reserve for bad debts is maintained at a level that management believes to be sufficient to absorb estimated losses in the accounts receivable portfolio. The reserve is increased by the provision for bad debts which is charged against operating results and decreased by the amount of charge-offs, net of recoveries. The provision for bad debts is included in general, administrative and other expense in the Consolidated Statements of Income. The amount charged against operating results is based on several factors including, but not limited to, a continuous assessment of the collectability of each account, the length of time a receivable is past due and our historical experience with the particular customer. In circumstances where a specific customer’s inability to meet its financial obligations is known (i.e., bankruptcy filings), we record a specific provision for bad debts against amounts due to reduce the receivable to the amount we reasonably believe will be collected. Due to changing economic, business and market conditions, we review the reserve for bad debts monthly and make changes to the reserve through the provision for bad debts as appropriate. If circumstances change (i.e., higher than expected defaults or an unexpected material adverse change in a major customer’s ability to pay), our estimates of recoverability could be reduced by a material amount. The total reserve netted against receivables in the Consolidated Balance Sheets was $13 million as of December 31, 2016, $14 million as of 2015 and $16 million as of December 31, 2014. The changes in the balance between periods was immaterial.

Default Funds and Margin Deposits

Nasdaq Clearing members’ cash contributions are included in default funds and margin deposits in the Consolidated Balance Sheets as both a current asset and a current liability. These balances may fluctuate over time due to changes in the amount of deposits required and whether members choose to provide cash or non-cash contributions. Non-cash contributions include highly rated government debt securities that must meet specific criteria approved by Nasdaq Clearing. Non-cash contributions are pledged assets that are not recorded in the Consolidated Balance Sheets as Nasdaq Clearing does not take legal ownership of these assets and the risks and rewards remain with the clearing members.

Derivative Financial Instruments and Hedging Activities

Non-Designated Derivatives

We use derivatives as economic hedges that are not designed as accounting hedges or do not qualify for hedge accounting treatment. For such derivative financial instruments, changes in fair value are reported in current period earnings.

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We use foreign exchange forward contracts to manage foreign currency exposure of intercompany loans. These contracts are not designated as hedges for financial reporting purposes. The change in fair value of these contracts is recognized in general, administrative and other expense in the Consolidated Statements of Income and offsets the foreign currency impact recognized on the intercompany loans.

As of December 31, 2016 and 2015, the fair value amounts of our derivative instruments were immaterial.

Net Investment Hedges

Net assets of our foreign subsidiaries are exposed to volatility in foreign currency exchange rates. We may utilize net investment hedges to offset the translation adjustment arising from re-measuring our investment in foreign subsidiaries.

Our 2021 and 2023 Notes have been designated as a hedge of our net investment in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries. Any increase or decrease related to the remeasurement of the 2021 and 2023 Notes into U.S. dollars is recorded within accumulated other comprehensive loss in the Consolidated Balance Sheets. See “3.875% Senior Unsecured Notes,” and “1.75% Senior Unsecured Notes,” of Note 9, “Debt Obligations,” for further discussion.

Property and Equipment, net

Property and equipment, including leasehold improvements, are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are recognized using the straight-line method over the estimated useful lives of the related assets, which range from 10 to 40 years for buildings and improvements, 2 to 5 years for data processing equipment, and 5 to 10 years for furniture and equipment.

We develop systems solutions for both internal and external use. Certain costs incurred in connection with developing or obtaining internal use software are capitalized. In addition, certain costs of computer software to be sold, leased, or otherwise marketed as a separate product or as part of a product or process are capitalized beginning when a product’s technological feasibility has been established and ending when a product is available for general release. Technological feasibility is established upon completion of a detailed program design or, in its absence, completion. Prior to reaching technological feasibility, all costs are charged to expense. Unamortized capitalized costs are included in data processing equipment and software, within property and equipment, net in the Consolidated Balance Sheets. Capitalized software costs are amortized on a straight-line basis over the estimated useful lives of the software, generally 3 to 5 years. Amortization of these costs is included in depreciation and amortization expense in the Consolidated Statements of Income.

Leasehold improvements are amortized using the straight-line method over the shorter of their estimated useful lives or the remaining term of the related lease.

See Note 7, “Property and Equipment, net,” for further discussion.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess of purchase price over the value assigned to the net assets, including identifiable intangible assets, of a business acquired. Goodwill is assessed for impairment annually in the fourth quarter of our fiscal year using carrying amounts as of October 1, or more frequently if conditions exist that indicate that the asset may be impaired, such as changes in the business climate, poor indicators of operating performance or the sale or disposition of a significant portion of a reporting unit. When assessing goodwill for impairment, first, qualitative factors are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the results of the qualitative assessment are not conclusive, a quantitative goodwill test is performed. The quantitative goodwill test consists of two steps:

•	The first step compares the fair value of each reporting unit with its carrying amount, including goodwill. If the reporting unit’s fair value exceeds its carrying amount, goodwill is not impaired.

•	If the fair value of a reporting unit is less than its carrying amount, the second step of the goodwill test is performed to measure the amount of impairment, if any. An impairment is equal to the excess of the carrying amount of goodwill over its fair value.

We also evaluate indefinite-lived intangible assets for impairment annually in the fourth quarter of our fiscal year using carrying amounts as of October 1, or more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than its carrying amount. Such evaluation includes determining the fair value of the asset and comparing the fair value of the asset with its carrying amount. If the fair value of the indefinite-lived intangible asset is less than its carrying amount, an impairment charge is recognized in an amount equal to the difference.

For indefinite-lived intangible assets impairment testing, we also have the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than the carrying amount. If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, then we must perform additional testing of the asset. Otherwise, we conclude that no impairment is indicated and further testing is not performed.

There was no impairment of goodwill for the years ended December 31, 2016, 2015 and 2014. As discussed in “Intangible Asset Impairment Charges,” of Note 5, “Goodwill and Acquired Intangible Assets,” we recorded pre-tax, non-cash indefinite-lived intangible asset impairment charges of $578 million in 2016 and $119 million in 2015. There was no other impairment of indefinite-lived intangible assets for the years ended December 31, 2016, 2015 and 2014. Disruptions to our

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business and events, such as economic weakness or unexpected significant declines in the operating results of any of our reporting units or businesses, may result in goodwill or indefinite-lived intangible asset impairment charges in the future.

Valuation of Other Long-Lived Assets

We review our other long-lived assets, such as finite-lived intangible assets and property and equipment, for potential impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of an asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value and is recorded as a reduction in the carrying amount of the related asset and a charge to operating results. See “Intangible Asset Impairment Charges,” of Note 5, “Goodwill and Acquired Intangible Assets,” for further discussion of impairment charges recorded on our finite-lived intangible assets.

Equity Method Investments

In general, the equity method of accounting is used when we own 20% to 50% of the outstanding voting stock of a company and when we are able to exercise significant influence over the operating and financial policies of a company. We have certain investments in which we have determined that we have significant influence and as such account for the investments under the equity method of accounting. We record our pro-rata share of earnings or losses each period and record any dividends as a reduction in the investment balance. We evaluate our equity method investments for other-than-temporary declines in value by considering a variety of factors such as the earnings capacity of the investment and the fair value of the investment compared to its carrying amount. In addition, for investments where the market value is readily determinable, we consider the underlying stock price. If the estimated fair value of the investment is less than the carrying amount and management considers the decline in value to be other than temporary, the excess of the carrying amount over the estimated fair value is recognized in the financial statements as an impairment. See “Equity Method Investments,” of Note 6, “Investments,” for further discussion of an other-than-temporary charge recorded on an equity method investment.

Cost Method Investments

In general, the cost method of accounting is used when we own less than 20% of the outstanding voting stock of a company which does not have a readily determinable fair value and when we are not able to exercise significant influence over the operating and financial policies of a company. Under the cost method of accounting, investments are carried at cost and are adjusted only for other-than-temporary declines in fair value, certain distributions, and additional investments. We evaluate our cost method investments for other-than-temporary declines in value by considering a variety of factors such as the earnings capacity of the investment.

Revenue Recognition and Transaction-Based Expenses

Market Services Revenues

Market services revenues include equity derivative trading and clearing revenues, cash equity trading revenues, FICC revenues, and trade management services revenues.

Equity Derivative Trading and Clearing and Cash Equity Trading Revenues

Equity Derivative Trading and Clearing Revenues

In our equity derivative markets, we earn trading and clearing revenues which are variable. In the U.S., trading revenues are based on traded volumes, and recognized when executed. The principal types of equity derivative contracts traded are equity options, ETF options, index options and foreign currency options. In the U.S., we record execution revenues from transactions on a gross basis as revenues and record related expenses as transaction-based expenses, as we have certain risk associated with trade execution. See “Equity Derivative Trading and Clearing and Cash Equity Trading Transaction-Based Expenses” below for further discussion.

In Europe, equity derivative trading and clearing revenues are based on the volume and value of traded and cleared contracts, and recognized when executed or when contracts are cleared. The principal types of equity derivative contracts traded and cleared are stock options and futures and index options and futures.

Cash Equity Trading Revenues

U.S. cash equity trading revenues are variable, based on individual customer share volumes, and recognized as transactions occur. We charge transaction fees for executing cash equity trades in Nasdaq-listed and other listed securities on our U.S. cash equity exchanges, as well as on orders that are routed to other market venues for execution. Similar to U.S. equity derivative trading and clearing, we record cash equity trading revenues from transactions on a gross basis as revenues and record related expenses as transaction-based expenses, as we have certain risk associated with trade execution. For further discussion see “Equity Derivative Trading and Clearing and Cash Equity Trading Transaction-Based Expenses” below.

In our European cash equity markets, we charge transaction fees for executing trades on the exchanges that comprise Nasdaq Nordic and Nasdaq Baltic. These transaction fees are charged per executed order and as per value traded.

Equity Derivative Trading and Clearing and Cash Equity Trading Transaction-Based Expenses

For U.S. equity derivative trading, we credit a portion of the per share execution charge to the market participant that provides the liquidity. For U.S. cash equity trading, for Nasdaq and Nasdaq PSX, we credit a portion of the per share execution charge to the market participant that provides the liquidity and for Nasdaq BX, we credit a portion of the per share execution charge to the market participant that takes the liquidity. We record these credits as transaction rebates that are included in

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transaction-based expense in the Consolidated Statements of Income. These transaction rebates are paid on a monthly basis and the amounts due are included in accounts payable and accrued expenses in the Consolidated Balance Sheets.

In the U.S., we pay Section 31 fees to the SEC for supervision and regulation of securities markets. We pass these costs along to our customers through our equity derivative trading and clearing fees and our cash equity trading fees. We collect the fees as a pass-through charge from organizations executing eligible trades on our options exchanges and our cash equity platforms and we recognize these amounts in transaction-based expenses when incurred. Section 31 fees received are included in cash and cash equivalents in the Consolidated Balance Sheets at the time of receipt and, as required by law, the amount due to the SEC is remitted semiannually and recorded as Section 31 fees payable to the SEC in the Consolidated Balance Sheets until paid. Since the amount recorded as revenues is equal to the amount recorded as transaction-based expenses, there is no impact on our revenues less transaction-based expenses. As we hold the cash received until payment to the SEC, we earn interest income on the related cash balances.

Under our Limitation of Liability Rule and procedures, we may, subject to certain caps, provide compensation for losses directly resulting from the systems’ actual failure to correctly process an order, quote, message or other data into our platform. We do not record a liability for any potential claims that may be submitted under the Limitation of Liability Rule unless they meet the provisions required in accordance with U.S. GAAP. As such, losses arising as a result of the rule are accrued and charged to expense only if the loss is probable and estimable.

The exchanges that comprise Nasdaq Nordic and Nasdaq Baltic do not have any revenue sharing agreements or transaction-based expenses, such as transaction rebates and brokerage, clearance and exchange fees.

FICC Revenues

Fixed income trading revenues are primarily earned from trading of U.S. Treasury securities and other fixed income products. Customer contracts may be on a fixed or variable rate basis. Revenues from customer contracts with a fixed rate basis are recognized ratably over the contract period. Revenues from customer contracts with a variable rate basis are based upon individual customer share volume and are recognized as revenues as the transaction occurs. Commodities trading and clearing revenues are primarily earned from trading and clearing of energy, emission allowance, freight, seafood and other commodity products. Trading and clearing revenues are based on the volume and value of traded and cleared contracts, and recognized when executed or when contracts are cleared. In addition, Nasdaq Commodities members are billed an annual fee which is recognized ratably over the following 12-month period.

We also generate clearing revenues for OTC traded derivatives, interest rate swaps, and resale and repurchase agreements. These clearing revenues are based on the value and length of the contract and are recognized when cleared. In connection

with our collateral management process in our Nasdaq Clearing operations, we recognize interest income on cash contributions that we manage when earned.

Trade Management Services Revenues

Access Services

We generate revenues by providing market participants with several alternatives for connecting to and accessing our markets for a fee. The type of connectivity is determined by the level of functionality a customer needs. As a result, access services revenues vary depending on the type of connection provided to customers. We provide co-location services to market participants, whereby firms may lease cabinet space and power to house their own equipment and servers within our data centers. These participants are charged monthly fees for cabinet space, connectivity and support. Additionally, we offer a number of wireless connectivity routes between select data centers using millimeter wave and microwave technology. We also earn revenues from annual and monthly exchange membership and registration fees. Revenues for providing access to our markets, co-location services and monthly exchange membership and registration fees are recognized on a monthly basis as the service is provided. Revenues from annual fees for exchange membership and registration fees are recognized ratably over the following 12-month period.

Broker Services

Our broker services operations offer technology and customized securities administration solutions to financial participants in the Nordic market. The primary services offered are flexible back-office systems, which allow customers to entirely or partly outsource their company’s back-office functions. Revenues from broker services are based on a fixed basic fee for administration or licensing, maintenance and operations, and a variable portion that depends on the number of transactions completed. Broker services revenues are recognized on a continuous basis as services are rendered.

Corporate Services Revenues

Corporate services revenues include corporate solutions revenues and listing services revenues.

Corporate Solutions Revenues

Corporate solutions revenues primarily include subscription and transaction-based income from our investor relations, public relations, governance and multimedia solutions products. Subscription-based revenues earned are recognized ratably over the contract period, generally one to two years in length. As part of the subscription agreements, customers can also be charged usage fees based upon actual usage of the services provided. Revenues from usage fees and other services are recognized when earned. Revenues from transaction-based services, such as webcasting and wire distribution, are recorded as the services are provided and delivered.

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Listing Services Revenues

Listing services revenues primarily include annual renewal fees, initial listing fees and listing of additional shares fees.

Annual Renewal Fees

In the U.S., annual renewal fees are charged based on the number of outstanding shares of companies listed in the U.S. at the end of the prior year and are recognized ratably over the following 12-month period. European annual renewal fees, which are received from companies listed on our Nasdaq Nordic and Nasdaq Baltic exchanges and Nasdaq First North, are directly related to the listed companies’ market capitalization on a trailing 12-month basis.

Initial Listing Fees

Initial listing fees are generally based on the number of shares that a company initially lists and are recognized on a straight-line basis over estimated service periods of six years, based on our historical listing experience and projected future listing duration.

Listing of Additional Shares Fees

Listing of additional shares fees are paid by listed companies in connection with corporate actions involving the issuance of new shares to be listed, such as stock splits and sales of additional securities. These fees are recognized on a straight-line basis over estimated service periods of four years, based on our historical listing experience and projected future listing duration.

Listing of additional share fees are expected to decline and will be phased out by January 2018 as a result of the implementation of our new fee program for our U.S. markets. See “All-Inclusive Annual Listing Fee Program” below for further discussion.

All-Inclusive Annual Listing Fee Program

Nasdaq announced an all-inclusive annual listing fee program for companies listed in the U.S. which became effective in 2015. Under this program, listed companies pay an annual fee which includes all listing-related activities, including listing of additional shares. All listed companies will be subject to the all-inclusive program beginning in January 2018, but can elect to opt-in to this program prior to January 2018. These revenues will be recognized ratably over the following 12-month period.

Information Services Revenues

Information services revenues include data products revenues and index licensing and services revenues.

Data Products Revenues

Data products revenues are earned from U.S. and European proprietary data products and index data products. In the U.S., we also earn revenues from U.S. tape plans.

We collect, process and create information from our exchanges and earn revenues as a distributor of our own data, as well as select, third-party content. We provide varying levels of quote

and trade information to market participants and to data distributors, who in turn sell subscriptions for this information. We earn revenues primarily based on the number of data subscribers and distributors of our data. Data products revenues are subscription-based and are recognized on a monthly basis net of amounts due under revenue sharing arrangements with market participants.

We also generate revenues from our Nasdaq indexes that consist of Global Index Data Services, which delivers real-time index values throughout the trading day, and Global Index Watch/Global Index File Delivery Service, which delivers weightings and components data, corporate actions and a breadth of additional data. We earn revenues primarily based on the number of data subscribers and distributors of our data. These revenues, which are subscription based, are recognized on a monthly basis.

Revenues from U.S. tape plans include eligible UTP Plan revenues that are shared among UTP Plan participants and are presented on a net basis. The Nasdaq Stock Market acts as the processor and administrator for the UTP Plan. The UTP Plan administrator sells quotation and last sale information for all transactions in Nasdaq-listed securities, whether traded on The Nasdaq Stock Market or other exchanges, to market participants and to data distributors, who then provide the information to subscribers. After deducting costs, as permitted under the revenue sharing provision of the UTP Plan, the UTP Plan administrator distributes the tape revenues to the respective UTP Plan participants, including The Nasdaq Stock Market, Nasdaq BX and Nasdaq PSX, based on a formula required by Regulation NMS that takes into account both trading and quoting activity. In addition, much like Nasdaq-listed securities, all quotes and trades in NYSE- and NYSE MKT-listed securities are reported and disseminated in real-time, and as such, we share in the tape revenues for information on NYSE- and NYSE MKT-listed securities. Revenues from net U.S. tape plans are recognized on a monthly basis.

Data Products Revenue Sharing

The most significant component of data products revenues recorded on a net basis is the UTP Plan revenue sharing in the U.S. All indicators of gross versus net reporting under U.S. GAAP have been considered in analyzing the appropriate presentation of UTP Plan revenue sharing. However, the following are the primary indicators of net reporting:

•	Primary Obligor: We are the administrator for the UTP Plan, in addition to being a participant in the UTP Plan. In our unique role as administrator, we facilitate the collection and dissemination of revenues on behalf of the UTP Plan participants. As a participant, we share in the net distribution of revenues according to the plan on the same terms as all other plan participants.

•	Risk of Loss/Credit Risk: Risk of loss on the revenue is shared equally among plan participants according to the UTP Plan.

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•	Price Latitude: The operating committee of the UTP Plan, which is comprised of representatives from each of the participants, including us solely in our capacity as a UTP Plan participant, is responsible for setting the level of fees to be paid by distributors and subscribers and taking action in accordance with the provisions of the UTP Plan, subject to SEC approval.

The exchanges that comprise Nasdaq Nordic and Nasdaq Baltic do not have any data products revenue sharing agreements.

Index Licensing and Services Revenues

We develop and license Nasdaq branded indexes, associated derivatives and financial products as part of our Global Index Family. We also provide custom calculation services for third-party clients. Revenues primarily include license fees from these branded indexes, associated derivatives and financial products in the U.S. and abroad. We primarily have two types of license agreements: transaction-based licenses and asset-based licenses. Transaction-based licenses are generally renewable long-term agreements. Customers are charged based on transaction volume or a minimum contract amount, or both. If a customer is charged based on transaction volume, we recognize revenue when the transaction occurs. If a customer is charged based on a minimum contract amount, we recognize revenue on a pro-rata basis over the licensing term. Asset-based licenses are also generally long-term agreements. Customers are charged based on a percentage of assets under management for licensed products, per the agreement, on a monthly or quarterly basis. These revenues are recognized over the term of the license agreement.

Market Technology Revenues

Market Technology provides technology solutions for trading, clearing, settlement, surveillance and information dissemination, as well as enterprise governance, risk management and compliance software solutions. Revenues primarily consist of software, license and support revenues, change request and advisory revenues, and software as a service revenues.

For most solutions, we enter into multiple-element sales arrangements to develop technology solutions, license the right to use software, and provide post-contract support and other services to our customers. In order to recognize revenues associated with each individual element of a multiple-element sales arrangement separately, we are required to establish the existence of VSOE of fair value for each element. When VSOE for individual elements of an arrangement cannot be established, revenue is generally deferred and recognized over either the final element of the arrangement or the entire term of the arrangement for which the services will be delivered.

We enter into agreements to modify the system solutions sold by Nasdaq after delivery has occurred. These revenues are recognized when earned.

In addition, we enter into revolving subscription agreements which allow customers to connect to our servers to access

certain services. These revenues are recognized ratably over the subscription term.

Earnings Per Share

We present both basic and diluted earnings per share. Basic earnings per share is computed by dividing net income attributable to Nasdaq by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income attributable to Nasdaq by the weighted-average number of common shares and common share equivalents outstanding during the period and reflects the assumed conversion of all dilutive securities, which primarily consist of employee stock options, restricted stock, and PSUs. Common share equivalents are excluded from the computation in periods for which they have an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price over the period are anti-dilutive and, accordingly, are excluded from the calculation. See Note 14, “Earnings Per Share,” for further discussion.

Pension and Post-Retirement Benefits

Pension and other post-retirement benefit plan information for financial reporting purposes is developed using actuarial valuations. We assess our pension and other post-retirement benefit plan assumptions on a regular basis. In evaluating these assumptions, we consider many factors, including evaluation of the discount rate, expected rate of return on plan assets, mortality rate, healthcare cost trend rate, retirement age assumption, our historical assumptions compared with actual results and analysis of current market conditions and asset allocations. See Note 11, “Retirement Plans,” for further discussion.

Discount rates used for pension and other post-retirement benefit plan calculations are evaluated annually and modified to reflect the prevailing market rates at the measurement date of a high-quality fixed-income debt instrument portfolio that would provide the future cash flows needed to pay the benefits included in the benefit obligations as they come due. Actuarial assumptions are based upon management’s best estimates and judgment.

The expected rate of return on plan assets for our U.S. pension plans represents our long-term assessment of return expectations which may change based on significant shifts in economic and financial market conditions. The long-term rate of return on plan assets is derived from return assumptions based on targeted allocations for various asset classes. While we consider the pension plans’ recent performance and other economic growth and inflation factors, which are supported by long-term historical data, the return expectations for the targeted asset categories represent a long-term prospective return.

Share-Based Compensation

Nasdaq uses the fair value method of accounting for share-based awards. Share-based awards, or equity awards, include stock options, restricted stock, and PSUs. The fair value of stock options are estimated using the Black-Scholes option-pricing

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model. The fair value of restricted stock awards and PSUs, other than PSUs granted with market conditions, is determined based on the grant date closing stock price less the present value of future cash dividends. We estimate the fair value of PSUs granted with market conditions using a Monte Carlo simulation model at the date of grant.

We generally recognize compensation expense for equity awards on a straight-line basis over the requisite service period of the award, taking into account an estimated forfeiture rate.

We present excess tax benefits related to share-based payments, if any, as financing activities in the Consolidated Statements of Cash Flows.

Nasdaq also has an ESPP that allows eligible employees to purchase a limited number of shares of our common stock at six-month intervals, called offering periods, at 85.0% of the lower of the fair market value on the first or the last day of each offering period. The 15.0% discount given to our employees is included in compensation and benefits expense in the Consolidated Statements of Income.

See Note 12, “Share-Based Compensation,” for further discussion of our share-based compensation plans.

Leases

We expense rent from non-cancellable operating leases, net of sublease income, on a straight line basis, based on future minimum lease payments. The net costs are included in occupancy expense in the Consolidated Statements of Income. See Note 17, “Leases,” for further discussion.

Fair Value Measurements

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, we consider the principal or most advantageous market in which we would transact, and we also consider assumptions that market participants would use when pricing the asset or liability. Fair value measurement establishes a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while

unobservable inputs reflect Nasdaq’s market assumptions. These two types of inputs create the following fair value hierarchy:

•	Level 1—Quoted prices for identical instruments in active markets.

•	Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

•	Level 3—Instruments whose significant value drivers are unobservable.

This hierarchy requires the use of observable market data when available.

See Note 15, “Fair Value of Financial Instruments,” for further discussion.

Income Taxes

We use the asset and liability method to determine income taxes on all transactions recorded in the consolidated financial statements. Deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities (i.e., temporary differences) and are measured at the enacted rates that will be in effect when these differences are realized. If necessary, a valuation allowance is established to reduce deferred tax assets to the amount that is more likely than not to be realized.

In order to recognize and measure our unrecognized tax benefits, management determines whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Once it is determined that a position meets the recognition thresholds, the position is measured to determine the amount of benefit to be recognized in the consolidated financial statements. Interest and/or penalties related to income tax matters are recognized in income tax expense.

See Note 10, “Income Taxes,” for further discussion.

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Recently Adopted Accounting Pronouncements

Accounting Standard	Description	Effective Date	Effect on the Financial Statements or Other Significant Matters
Statement of Cash Flows In November 2016, the FASB issued ASU 2016-18, “Restricted Cash.”	This ASU requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Therefore, restricted cash and restricted cash equivalents would be included when reconciling the beginning-of-period and end-of-period total amounts of cash flow shown on the statement of cash flows. As a result, transfers between cash and cash equivalents and restricted cash and cash equivalents will no longer be presented in the statement of cash flows.	January 1, 2018 with early adoption permitted.	In the fourth quarter of 2016, we early adopted ASU 2016-18 and reclassified changes in restricted cash from cash flow provided by operating activities to the total change in beginning-of-period and end-of-period total amounts shown on the Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014. This new standard is a change in cash flow statement presentation only.
Statement of Cash Flows In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments.”	This ASU addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows with the objective of reducing existing diversity in practice with respect to these items. These items include debt prepayments or debt extinguishment costs, payments of contingent consideration after a business combination, and distributions from equity method investees, among others.	January 1, 2018, with early adoption permitted.	In the fourth quarter of 2016, we early adopted ASU 2016-15 and reclassified payments for contingent considerations made in 2015 and 2014 from cash flows from investing activities to cash flows from financing activities on the Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014. This new standard is a change in cash flow statement presentation only.
Income Taxes In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.”	This ASU eliminates the current requirement to present deferred tax liabilities and assets as current and non-current in a classified balance sheet. Instead, Nasdaq is required to classify all deferred tax liabilities and assets as non-current.	In the first quarter of 2016, we elected to early adopt this guidance retrospectively for all periods presented in the Consolidated Balance Sheets.	The adoption of this guidance resulted in the reclassification of current deferred tax assets of $24 million to non-current deferred tax assets and current deferred tax liabilities of $24 million to non-current deferred tax liabilities for the year ended December 31, 2015. This new standard is a change in balance sheet presentation only.
Business Combinations In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments.”	This ASU eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. This guidance requires the acquirer to recognize adjustments to provisional amounts identified during the measurement period in the reporting period in which the adjustment amounts are determined. In addition, the amendments in this guidance require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date.	We adopted this new standard on January 1, 2016.	None.

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Recently Issued Accounting Pronouncements

Accounting Standard	Description	Effective Date	Effect on the Financial Statements or Other Significant Matters
Financial Instruments - Credit Losses In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.”	This ASU changes the impairment model for certain financial instruments. The new model is a forward looking expected loss model and will apply to financial assets subject to credit losses and measured at amortized cost and certain off-balance sheet credit exposures. This includes loans, held-to-maturity debt securities, loan commitments, financial guarantees and net investments in leases, as well as trade receivables. For available-for-sale debt securities with unrealized losses, credit losses will be measured in a manner similar to today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities.	January 1, 2020, with early adoption as of January 1, 2019 permitted.	We are currently assessing the impact that this standard will have on our consolidated financial statements.
Compensation - Stock Compensation In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.”	This ASU involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This new guidance will require all income tax effects of awards to be recognized as income tax expense or benefit in the income statement when the awards vest or are settled, as opposed to additional paid-in-capital where it is currently recorded. This guidance will impact the calculation of our total diluted share count for the earnings per share calculation, as calculated under the treasury stock method. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting. All tax-related cash flows resulting from share-based payments are to be reported as operating activities on the statement of cash flows. In regards to forfeitures, Nasdaq can make a policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur.	January 1, 2017, with early adoption permitted.	The impact of ASU 2016-09 could be material to our results of operations in future periods depending upon factors such as future earnings and stock price.
Leases In February 2016, the FASB issued ASU 2016-02, “Leases.”	Under this ASU, at the commencement date, lessees will be required to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. This guidance is not applicable for leases with a term of 12 months or less. Lessor accounting is largely unchanged.	January 1, 2019, with early adoption permitted.	We are currently assessing the impact that this standard will have on our consolidated financial statements.
Financial Instruments - Overall In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.”	This ASU requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income. Under this new guidance, Nasdaq will no longer be able to recognize unrealized holding gains and losses on equity securities classified today as available-for-sale in accumulated other comprehensive income within stockholders’ equity. This new standard does not change the guidance for classifying and measuring investments in debt securities and loans. This new guidance also impacts financial liabilities accounted for under the fair value option and affects the presentation and disclosure requirements for financial assets and liabilities.	January 1, 2018. Early adoption is not permitted.	We do not anticipate a material impact on our consolidated financial statements at the time of adoption of this new standard.

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Accounting Standard	Description	Effective Date	Effect on the Financial Statements or Other Significant Matters
Revenue From Contracts With Customers In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition guidance in Accounting Standards Codification, “Revenue Recognition.”	The new revenue recognition standard sets forth a five-step revenue recognition model to determine when and how revenue is recognized. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration it expects to receive in exchange for those goods or services. The standard also requires more detailed disclosures. The standard provides alternative methods of initial adoption.	January 1, 2018, with early adoption permitted.	We are currently assessing the materiality of the impact to our consolidated financial statements, and have not yet selected a transition approach. We have determined that our Market Technology business will be the most significantly impacted business primarily due to conforming with new guidance on performance obligations. We are still assessing the impact, if any, to our other businesses.

3. Restructuring Charges

2015 Restructuring Plan

During the first quarter of 2015, we performed a comprehensive review of our processes, businesses and systems in a company-wide effort to improve performance, cut costs, and reduce spending. In June 2016, we completed our 2015 restructuring plan and recognized total net pre-tax charges of $213 million for the period March 2015 through June 2016. Through this initiative, we expect to generate annualized savings of $36 million. Restructuring charges are recorded on restructuring plans that have been committed to by management and are, in part, based upon management’s best estimates of future events. Changes to the estimates may require future adjustments to the restructuring reserve.

The following table presents a summary of the 2015 restructuring plan charges in the Consolidated Statements of Income for the years ended December 31, 2016 and 2015:

	Year ended December 31,
	2016				2015
	(in millions)
Rebranding of trade name	$	—			$	119
Severance	22				25
Facilities-related	1				—
Asset impairments	8				18
Other	10				10
Total restructuring charges	$	41			$	172

Rebranding of Trade Name

In connection with our global rebranding initiative, we decided to change our company name from The NASDAQ OMX Group, Inc. to Nasdaq, Inc., which became effective in the third quarter of 2015. In connection with this action, we decided to discontinue the use of the OMX trade name

and recorded a pre-tax, non-cash impairment charge of $119 million in March 2015 to write off the full value of the trade name. The impairment charge did not impact the company’s consolidated cash flows, liquidity, or capital resources.

Severance

Severance, which includes other termination benefits and other associated costs in the table above, related to workforce reductions of 201 positions across our organization for the year ended December 31, 2016 and 230 positions for the year ended December 31, 2015. In addition to reducing our workforce, we have relocated certain functions to lower cost locations and expect to continue hiring in these lower cost locations to support the business.

Facilities-related

The facilities-related charge in the table above for the year ended December 31, 2016 primarily pertained to the consolidation of leased facilities. For the year ended December 31, 2015, facility-related costs were $10 million and pertained to the consolidation of leased facilities. These costs were offset by a credit of $10 million which pertained to the release of a previously recorded sublease loss reserve for part of the space we lease in New York, New York. In June 2015, as part of our real estate reorganization plans, management decided to occupy this space. Based on management’s decision, we released the sublease loss reserve recorded for this space.

Asset Impairments

Asset impairment charges of $8 million for the year ended December 31, 2016 and $18 million for the year ended December 31, 2015 primarily related to fixed assets and capitalized software that were retired during the respective period.

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Restructuring Reserve

The following table presents the changes in the restructuring reserve for the year ended December 31, 2016:

	Balance at January 1, 2016				Expense Incurred				Cash Payments				Balance at December 31, 2016
	(in millions)
Severance	$	12			$	22			$	(17	)		$	17

As of December 31, 2016, the majority of the restructuring reserve is included in other current liabilities in the Consolidated Balance Sheets and will be paid in 2017.

4. Acquisitions

We completed the following acquisitions in 2016, 2015 and 2014. Financial results of each transaction are included in our Consolidated Statements of Income from the date of each acquisition.

2016 Acquisitions

	Purchase Consideration				Total Net Assets (Liabilities) Acquired				Total Net Deferred Tax Liability				Acquired Intangible Assets				Goodwill
	(in millions)
ISE	$	1,070			$	83			$	(185	)		$	623			$	549
Boardvantage	242				28				(45		)		111				148
Marketwired	111				(1		)		(5		)		31				86
Nasdaq CXC	116				6				(20		)		76				54

The amounts in the table above represent the allocation of purchase price as of December 31, 2016. The preliminary allocations of the purchase price are subject to revision during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Adjustments to the provisional values, which may include tax and other estimates, during the measurement period will be recorded in the reporting period in which the adjustment amounts are determined. Changes to amounts recorded as assets and liabilities may result in a corresponding adjustment to goodwill.

See “Intangible Assets” below for further discussion of intangible assets acquired through our 2016 acquisitions.

Acquisition of ISE

On June 30, 2016, we acquired ISE for $1,070 million. We acquired net assets, at fair value, totaling $83 million and recorded a net deferred tax liability of $185 million, comprised of a deferred tax liability of $266 million and a deferred tax asset of $81 million, related to differences in the U.S. GAAP and tax basis of our investment in ISE. ISE is part of our Market Services, Information Services and Market Technology segments.

In May 2016, we issued the 2023 Notes and in June 2016, we issued the 2026 Notes to fund this acquisition. See “1.75% Senior Unsecured Notes,” and “3.85% Senior Unsecured Notes,” of Note 9, “Debt Obligations,” for further discussion.

Acquisition of Boardvantage

In May 2016, we acquired Boardvantage for $242 million ($197 million in cash paid plus $45 million in working capital

adjustments, which primarily includes cash acquired). We acquired net assets, at fair value, totaling $28 million and recorded a net deferred tax liability of $45 million, comprised of a deferred tax liability of $46 million and a deferred tax asset of $1 million, related to differences in the U.S. GAAP and tax basis of our investment in Boardvantage. This acquisition expanded our Corporate Solutions governance business within our Corporate Services segment.

Nasdaq borrowed $197 million under the revolving credit commitment of the 2014 Credit Facility to fund this acquisition.

Acquisition of Marketwired

In February 2016, we acquired Marketwired for $111 million ($109 million in cash paid plus $2 million in working capital adjustments). We acquired net liabilities, at fair value, totaling $1 million and recorded a deferred tax liability of $10 million related to differences in the U.S. GAAP and tax basis of our investment in Marketwired. In the second quarter of 2016, we recorded a measurement period adjustment of $5 million to the estimated fair value of deferred tax liabilities to reflect a revised assessment following the receipt of new information. The adjustment resulted in a decrease to both deferred tax liabilities recorded and goodwill. The adjustment did not result in an impact to our Consolidated Statements of Income. Marketwired is part of our Corporate Solutions business within our Corporate Services segment.

Nasdaq borrowed $109 million under the revolving credit commitment of the 2014 Credit Facility to fund this acquisition.

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Acquisition of Nasdaq CXC

In February 2016, we acquired Nasdaq CXC for $116 million ($115 million in cash paid plus $1 million in working capital adjustments). We acquired net assets, at fair value, totaling $6 million and recorded a deferred tax liability of $20 million related to differences in the U.S. GAAP and tax basis of our investment in Nasdaq CXC. Nasdaq CXC is part of our Market Services segment and our Data Products business within our Information Services segment.

Nasdaq used cash on hand and borrowed $55 million under the revolving credit commitment of the 2014 Credit Facility to fund this acquisition.

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2015 Acquisitions

We completed the following acquisitions in 2015. Financial results are included in our Consolidated Statements of Income from the date of each acquisition.

	Purchase Consideration				Total Net Assets Acquired				Total Net Deferred Tax Liability				Acquired Intangible Assets				Goodwill
	(in millions)
DWA	$	226			$	8			$	(34	)		$	141			$	111

We finalized the allocation of the purchase price for DWA in January 2016. There were no adjustments to the provisional values for this acquisition during the 12 month measurement period.

Acquisition of DWA

On January 30, 2015, we completed the acquisition of DWA for $226 million ($225 million cash paid plus $1 million in working capital adjustments). We acquired net assets, at fair value, totaling $8 million and recorded a deferred tax liability of $34 million related to differences in the U.S. GAAP and tax basis of our investment in DWA. DWA is part of our Data Products and Index Licensing and Services businesses within our Information Services segment.

Nasdaq used cash on hand and borrowed $100 million under the revolving credit commitment of the 2014 Credit Facility to fund this acquisition.

See “Intangible Assets” below for further discussion of intangible assets acquired in the DWA acquisition.

Acquisition of Full Ownership of NPM and Acquisition of SecondMarket

In October 2015, we acquired full ownership of NPM following the acquisition of the minority stake that was previously held by a third party. In addition, through NPM, we acquired SecondMarket. The purchase of the additional ownership interest in NPM and the acquisition of SecondMarket were purchased for an immaterial amount. NPM and SecondMarket are part of our Listing Services business within our Corporate Services segment.

2014 Acquisition

In March 2014, we completed the acquisition of the remaining 28.0% ownership interest in BWise that was previously held by a third party. BWise is part of our Market Technology segment.

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Intangible Assets

The following table presents the details of acquired intangible assets in our 2016 and 2015 acquisitions. All acquired intangible assets with finite lives are amortized using the straight-line method.

	2016																2015
	ISE				Boardvantage				Marketwired				Nasdaq CXC				DWA
	($ in millions)
Intangible Assets
Exchange registrations	$	467			$	—			$	—			$	—			$	—
Discount rate used	8.6		%		—				—				—				—
Estimated average remaining useful life	Indefinite				—				—				—				—
Customer relationships	$	148			$	103			$	29			$	76			$	29
Discount rate used	9.1		%		15.5		%		16.4		%		10.3		%		17.5		%
Estimated average remaining useful life	13 years				14 years				6 years				17 years				15 years
Trade name	$	8			$	2			$	2			$	—			$	108
Discount rate used	8.6		%		15.0		%		15.8		%		—				17.0		%
Estimated average remaining useful life	Indefinite				1 year				2 years				—				Indefinite
Technology	$	—			$	6			$	—			$	—			$	4
Discount rate used	—				15.5		%		—				—				17.0		%
Estimated average remaining useful life	—				5 years				—				—				5 years
Total intangible assets	$	623			$	111			$	31			$	76			$	141

Exchange Registrations

As part of our acquisition of ISE we acquired exchange registrations. The exchange registrations represent licenses that provide ISE with the ability to operate its option exchanges. Nasdaq views these intangible assets as a perpetual license to operate the exchanges so long as ISE meets its regulatory requirements. Nasdaq selected a variation of the income approach called the Greenfield Approach to value the exchange registrations. The Greenfield Approach refers to a discounted cash flow analysis that assumes the buyer is building the exchange from a start-up business to a normalized level of operations as of the acquisition date. This discounted cash flow model considers the required resources and eventual returns from the build-out of operational exchanges and the acquisition of customers, once the exchange registrations are obtained. The advantage of this approach is that it reflects the actual expectations that will arise from an investment in the registrations and it directly values the registrations. The Greenfield Approach relies on assumptions regarding projected revenues, margins, capital expenditures, depreciation, and working capital during the two year pre-trade phase, the 10 year ramp-up period, as well as the terminal period.

In developing a discount rate for the exchange registrations, we estimated a weighted average cost of capital for the overall business and we employed this rate when discounting the cash flows. The resulting discounted cash flows were then tax-effected at the applicable statutory rate.

Customer Relationships

As part of our acquisitions of ISE, Boardvantage, Marketwired, Nasdaq CXC, and DWA, we acquired customer relationships.

Customer relationships represent the non-contractual and contractual relationships with customers.

Methodology

For our acquisitions of ISE, Boardvantage, Marketwired and Nasdaq CXC, customer relationships were valued using the income approach, specifically an excess earnings method. The excess earnings method examines the economic returns contributed by the identified tangible and intangible assets of a company, and then isolates the excess return that is attributable to the intangible asset being valued.

The DWA customer relationships were valued individually for each of DWA’s businesses using the income approach, specifically the with-and-without method. The with-and-without method is commonly used when the cash flows of a business can be estimated with and without the asset in place. The premise associated with this valuation technique is that the value of an asset is represented by the differences in the subject business’ cash flows under scenarios where (a) the asset is present and is used in operations (with); and (b) the asset is absent and not used in operations (without). Cash flow differentials are then discounted to present value to arrive at an estimate of fair value for the asset.

We estimated that without current customer relationships, it would take approximately 3-6 years, depending on the business, for the customer base to grow to 100.0% of current projected revenues. We also made estimates related to compensation levels and other expenses such as sales and marketing that would be incurred as the business was ramped up through the year in which the customer base would be expected to reach the level that currently exists.

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Discount rate

The discount rates used reflect the amount of risk associated with the hypothetical cash flows for the customer relationships relative to the overall business. In developing a discount rate for the customer relationships, we estimated a weighted average cost of capital for the overall business and we employed this rate when discounting the cash flows. The resulting discounted cash flows were then tax-effected at the applicable statutory rate.

For our acquisitions of Marketwired, Nasdaq CXC and DWA, a discounted tax amortization benefit was added to the fair value of the assets under the assumption that the customer relationships would be amortized for tax purposes over a period of 15 years.

Estimated Useful Life

We estimate the remaining useful life based on the historical behavior of the customers and a parallel analysis of the customers using the excess earnings method.

Trade Name

The DWA trade name is recognized in the industry and carries a reputation for quality. As such, DWA’s reputation and positive recognition embodied in the trade name is a valuable asset to Nasdaq. The trade name was considered the primary asset acquired in this transaction. In valuing the acquired trade name, we used the income approach, specifically the excess earnings method. The excess earnings method examines the economic returns contributed by the identified tangible and intangible assets of a company, and then isolates the excess return that is attributable to the intangible asset being valued.

The discount rate used reflects the amount of risk associated with the hypothetical cash flows generated by the DWA trade name in the future. In developing a discount rate for the trade name, we estimated a weighted average cost of capital for the overall business and we employed this rate when discounting the cash flows. The resulting discounted cash flows were then tax-effected at the applicable statutory rate, and a discounted tax amortization benefit was added to the fair value of the asset under the assumption that the trade name would be amortized for tax purposes over a period of 15 years.

We estimated the useful life of the trade name to be indefinite. The useful life was based on several factors including the number of years the name has been in service, its popularity within the industry, and our intention to continue its use in the branding of products.

Pro Forma Results and Acquisition-related Costs

The consolidated financial statements for the years ended December 31, 2016, 2015 and 2014 include the financial results of the above 2016, 2015 and 2014 acquisitions from the date of each acquisition. Pro forma financial results for the acquisitions completed in 2016, 2015 and 2014 have not been presented since these acquisitions both individually and in the aggregate were not material to our financial results.

Acquisition-related costs for the transactions described above were expensed as incurred and are included in merger and strategic initiatives expense in the Consolidated Statements of Income.

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5. Goodwill and Acquired Intangible Assets

Goodwill

The following table presents the changes in goodwill by business segment during the year ended December 31, 2016:

	Market Services				Corporate Services				Information Services				Market Technology				Total
	(in millions)
Balance at December 31, 2015	$	2,941			$	467			$	1,823			$	164			$	5,395
Goodwill acquired	549				234				54				—				837
Foreign currency translation adjustment	(100		)		(27		)		(71		)		(7		)		(205		)
Balance at December 31, 2016	$	3,390			$	674			$	1,806			$	157			$	6,027

The goodwill acquired for Market Services and Information Services shown above relates to our acquisitions of ISE and Nasdaq CXC, and the goodwill acquired for Corporate Services shown above relates to our acquisitions of Boardvantage and Marketwired. See “2016 Acquisitions,” of Note 4, “Acquisitions,” for further discussion.

As of December 31, 2016, the amount of goodwill that is expected to be deductible for tax purposes in future periods is $879 million, of which $561 million is related to our acquisition

of eSpeed, $237 million is related to our acquisition of the TR Corporate businesses, and $81 million is related to other acquisitions.

Goodwill represents the excess of purchase price over the value assigned to the net assets, including identifiable intangible assets, of a business acquired. Goodwill is allocated to our reporting units based on the assignment of the fair values of each reporting unit of the acquired company. We test goodwill for impairment at the reporting unit level annually, or in interim

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periods if certain events occur indicating that the carrying amount may be impaired, such as changes in the business climate, poor indicators of operating performance or the sale or disposition of a significant portion of a reporting unit. There was no impairment of goodwill for the years ended

December 31, 2016 and 2015; however, events such as economic weakness or unexpected significant declines in operating results of a reporting unit may result in goodwill impairment charges in the future.

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Acquired Intangible Assets

The following table presents details of our total acquired intangible assets, both finite- and indefinite-lived:

	December 31, 2016														December 31, 2015
	Gross Amount				Accumulated Amortization				Net Amount				Weighted-Average Useful Life (in Years)		Gross Amount				Accumulated Amortization				Net Amount				Weighted-Average Useful Life (in Years)
	(in millions)														(in millions)
Finite-Lived Intangible Assets
Technology	$	38			$	(24	)		$	14			5		$	39			$	(23	)		$	16			5
Customer relationships	1,394				(464		)		930				18		1,038				(387		)		651				20
Other	7				(6		)		1				6		5				(4		)		1				9
Foreign currency translation adjustment	(160		)		58				(102		)				(138		)		43				(95		)
Total finite-lived intangible assets	$	1,279			$	(436	)		$	843					$	944			$	(371	)		$	573
Indefinite-Lived Intangible Assets
Exchange and clearing registrations	$	1,257			$	—			$	1,257					$	790			$	—			$	790
Trade names	130				—				130						700				—				700
Licenses	52				—				52						51				—				51
Foreign currency translation adjustment	(188		)		—				(188		)				(155		)		—				(155		)
Total indefinite-lived intangible assets	$	1,251			$	—			$	1,251					$	1,386			$	—			$	1,386
Total intangible assets	$	2,530			$	(436	)		$	2,094					$	2,330			$	(371	)		$	1,959

Amortization expense for acquired finite-lived intangible assets was $82 million for the year ended December 31, 2016, $62 million for the year ended December 31, 2015 and $69 million for the year ended December 31, 2014. The increase in amortization expense in 2016 compared with 2015 was primarily due to additional acquired intangible assets in 2016. The decrease in amortization expense in 2015 compared with 2014 was primarily due to lower amortization expense on certain intangible assets that were impaired in 2015 as discussed below, partially offset by amortization expense on identifiable finite-lived intangible assets acquired in connection with the acquisition of DWA.

The estimated future amortization expense (excluding the impact of foreign currency translation adjustments of $102 million as of December 31, 2016) of acquired finite-lived intangible assets as of December 31, 2016 is as follows:

	(in millions)
2017	$	94
2018	90
2019	76
2020	75
2021	74
2022 and thereafter	536
Total	$	945

Intangible Asset Impairment Charges

We recorded the pre-tax, non-cash intangible asset impairment charges described below during 2016, 2015 and 2014.

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During 2016, the eSpeed business continued to operate in a challenging environment and, as a result, experienced a decline in operating performance. In October 2016, a new head of FICC joined Nasdaq and, in late November and December 2016, the management team conducted an extensive business review of the eSpeed business. Based upon this review, management changed the strategic direction of our Fixed Income business and will more closely integrate the U.S. and European Fixed Income businesses under a single brand called Nasdaq Fixed Income. As part of this effort, we decided to no longer utilize the eSpeed trade name. In connection with these triggering events, following board approval in January 2017, we recorded a pre-tax, non-cash intangible asset impairment charge of $578 million to write off the full value of the eSpeed trade name as we no longer attribute any material value to the trade name. This charge is recorded in asset impairment charges in the Consolidated Statements of Income for 2016.

In 2015, in connection with our global rebranding initiative, we decided to change our company name from The NASDAQ OMX Group, Inc. to Nasdaq, Inc., which became effective in the third quarter of 2015. In connection with this action, we decided to discontinue the use of the OMX trade name and recorded a pre-tax, non-cash impairment charge of $119 million because we no longer attribute any material value to the trade name. This charge is recorded in restructuring charges in the Consolidated Statements of Income for 2015.

In 2014, we recorded a non-cash intangible asset impairment charge totaling $38 million related to an acquired intangible asset associated with customer relationships. The impairment resulted primarily from changes in the forecasted revenues associated with the acquired customer list of our eSpeed business. The fair value of customer relationships of $71 million was determined using the income approach, specifically the with-and-without method. This charge is recorded in asset impairment charges in the Consolidated Statements of Income for 2014.

These intangible asset impairment charges did not impact the company’s consolidated cash flows, liquidity, or capital resources and related primarily to our Market Services segment. However, for segment reporting purposes, these charges were allocated to corporate items based on the decision that these charges should not be used to evaluate the segment’s operating performance.

Significant judgments and unobservable inputs categorized as Level III in the fair value hierarchy are inherent in impairment tests performed and include assumptions about the amount and timing of expected future cash flows, growth rates and the determination of appropriate discount rates. We believe that the assumptions used in our impairment tests are reasonable, but variations in any of the assumptions may result in different calculations of fair value.

6. Investments

The following table presents the details of our investments:

	December 31,
	2016				2015
	(in millions)
Trading securities	$	228			$	189
Available-for-sale investment securities	17				12
Equity method investments	124				72
Cost method investments	144				132

Trading Securities

Trading securities, which are included in financial investments, at fair value in the Consolidated Balance Sheets, are primarily comprised of highly rated European government debt securities, of which $172 million as of December 31, 2016 and $166 million as of December 31, 2015, are assets utilized to meet regulatory capital requirements primarily for our clearing operations at Nasdaq Clearing.

Available-for-Sale Investment Securities

Available-for-sale investment securities, which are included in financial investments, at fair value in the Consolidated Balance Sheets, are primarily comprised of short-term commercial paper. As of December 31, 2016 and December 31, 2015, the cumulative unrealized gains and losses on these securities were immaterial.

Equity Method Investments

As of December 31, 2016, our equity method investments primarily included equity interests in OCC and EuroCCP N.V. As of December 31, 2015, our equity method investments primarily included equity interests in OCC, EuroCCP N.V. and The Order Machine.

The carrying amounts of our equity method investments are included in other non-current assets in the Consolidated Balance Sheets. The increase in 2016 compared with 2015 was primarily due to the inclusion of an additional 20.0% ownership interest in OCC, which we acquired in connection with our acquisition of ISE on June 30, 2016, bringing our total ownership interest in OCC to 40.0% as of December 31, 2016. The increase in 2016 was partially offset by the write-off of our equity method investment in The Order Machine as discussed below.

We evaluate our equity method investments for other-than-temporary declines in value by considering a variety of factors such as the earnings capacity of the investment. As of December 31, 2016, the estimated fair value of our investment in The Order Machine was less than the carrying value and management considered the decline in value to be other-than-temporary. As a result, we recorded a non-cash impairment charge of $7 million to write off the full value of the investment. This charge is recorded in net income from unconsolidated investees in the Consolidated Statements of Income for 2016. No other

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impairments of equity method investments were recorded in 2016, 2015 or 2014.

Net income recognized from our equity interest in the earnings and losses of these equity method investments was $2 million for the year ended December 31, 2016, $17 million for the year ended December 31, 2015 and immaterial for the year ended December 31, 2014. The change in year ended December 31, 2016 compared with the same period in 2015 is primarily due to income recognized from our equity method investment in OCC, partially offset by the write-off of our equity method investment in The Order Machine. The change in year ended December 31, 2015 compared with the same period in 2014 is primarily due to income recognized from our equity method investment in OCC. We were not able to determine what our share of OCC’s income was for the year ended December 31, 2014 until the first quarter of 2015, when OCC’s financial statements were made available to us. As a result, we recorded other income of $13 million in March 2015 relating to our share of OCC’s income for the year ended December 31, 2014. This income is included in net income from unconsolidated investees in the Consolidated Statements of Income for 2015.

Capital Contribution to OCC

In March 2015, in connection with being designated systemically important by the Financial Stability Oversight Council, OCC implemented a capital plan under which the options exchanges that are OCC’s stockholders made new capital contributions to OCC, committed to make further capital contributions in the future under certain specified circumstances, and received certain commitments from OCC with respect to future dividend payments and related matters. Under the OCC capital plan, OCC’s existing exchange stockholders, including Nasdaq and ISE, each contributed a pro-rata share of $150 million in new equity capital. Nasdaq’s and ISE’s capital contributions were each $30 million. OCC’s exchange stockholders also committed to provide, as may become necessary from time to time, additional replenishment capital on a pro-rata basis if certain capital thresholds are triggered. For its part, OCC adopted specific policies with respect to fees, customer refunds and stockholder dividends, which envision an annual dividend payment to its stockholders equal to the portion of OCC’s after-tax income that exceeds OCC’s capital requirements after payment of refunds to OCC’s clearing members (with such customer refunds generally to constitute 50% of the portion of OCC’s pre-tax income that exceeds OCC’s capital requirements). After the SEC staff approved the OCC capital plan and the stockholders made their capital contributions, the plan’s further effectiveness was suspended under the applicable SEC rules because certain parties petitioned the full Commission to reconsider the capital plan’s approval. This stay was lifted by the SEC in September 2015, allowing OCC to implement the plan and in February 2016, the SEC issued an order approving the OCC capital plan as previously implemented and dismissed the petitions challenging that plan. The petitioners filed for a stay of the SEC’s order, which would have blocked OCC from paying a dividend under the OCC capital plan. The Court of Appeals denied the requested stay, permitting OCC to pay a dividend

which Nasdaq received in February 2016. The petitioners also appealed the SEC’s order to the Federal Court of Appeals for the District of Columbia Circuit, and the appeal is pending.

Cost Method Investments

The carrying amount of our cost method investments is included in other non-current assets in the Consolidated Balance Sheets. As of December 31, 2016 and 2015, our cost method investments primarily represented our 5% ownership interest in Borsa Istanbul, and our 5% ownership interest in LCH.Clearnet Group Limited.

The Borsa Istanbul shares, which were issued to us in the first quarter of 2014, are part of the consideration received under a market technology agreement. This investment has a cost basis of $75 million which is guaranteed to us via a put option negotiated as part of the market technology agreement.

7. Property and Equipment, net

The following table presents our major categories of property and equipment, net:

	Year Ended December 31,
	2016				2015
	(in millions)
Data processing equipment and software	$	665			$	576
Furniture, equipment and leasehold improvements	254				254
Total property and equipment	919				830
Less: accumulated depreciation and amortization	(557		)		(507		)
Total property and equipment, net	$	362			$	323

Depreciation and amortization expense for property and equipment was $88 million for the year ended December 31, 2016, $76 million for the year ended December 31, 2015 and $68 million for the year ended December 31, 2014. The increase in depreciation and amortization expense in 2016 compared with 2015 and in 2015 compared with 2014 was primarily due to additional expense associated with assets and software placed in service. These amounts are included in depreciation and amortization expense in the Consolidated Statements of Income.

We recorded asset impairment charges of $8 million for the year ended December 31, 2016 and $18 million for the year ended December 31, 2015, primarily related to fixed assets and capitalized software that were retired and included in restructuring charges in the Consolidated Statements of Income during the respective period. For the year ended December 31, 2014, we recorded asset impairment charges of $11 million primarily related to certain technology assets. These charges are included in asset impairment charges in the Consolidated Statements of Income for 2014.

As of December 31, 2016 and 2015, we did not own any real estate properties.

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8. Deferred Revenue

Deferred revenue represents consideration received that is yet to be recognized as revenue. The changes in our deferred revenue during the years ended December 31, 2016 and 2015 are reflected in the following table:

	Initial Listing Revenues				Listing of Additional Shares Revenues				Annual Renewal and Other Revenues				Market Technology Revenues				Total
	(in millions)
Balance at January 1, 2016	$	59			$	53			$	28			$	187			$	327
Additions	13				12				606				233				864
Amortization	(18		)		(28		)		(576		)		(227		)		(849		)
Translation adjustment	—				—				(1		)		(8		)		(9		)
Balance at December 31, 2016	$	54			$	37			$	57			$	185			$	333
Balance at January 1, 2015	$	54			$	78			$	52			$	208			$	392
Additions	21				10				403				192				626
Amortization	(16		)		(35		)		(424		)		(199		)		(674		)
Translation adjustment	—				—				(3		)		(14		)		(17		)
Balance at December 31, 2015	$	59			$	53			$	28			$	187			$	327

The additions and amortization for initial listing revenues, listing of additional shares revenues and annual renewal and other revenues primarily reflect revenues from our Listing Services business within our Corporate Services segment.

For our market technology contracts, total revenues, as well as costs incurred, are deferred until significant modifications are completed and delivered. Once delivered, deferred revenue and the related deferred costs are recognized over the post-contract support period. For these market technology contracts, we have included the deferral of costs in other current assets and other non-current assets in the Consolidated Balance Sheets.

At December 31, 2016, we estimate that our deferred revenue, which is primarily corporate services and market technology revenues, will be recognized in the following years:

	Initial Listing Revenues				Listing of Additional Shares Revenues				Annual Renewal and Other Revenues				Market Technology Revenues				Total
	(in millions)
Fiscal year ended:
2017	$	16			$	21			$	57			$	70			$	164
2018	14				11				—				36				61
2019	11				4				—				33				48
2020	8				1				—				30				39
2021	4				—				—				9				13
2022 and thereafter	1				—				—				7				8
	$	54			$	37			$	57			$	185			$	333

The timing of recognition of our deferred market technology revenues is primarily dependent upon the completion of customization and any significant modifications made pursuant to existing market technology contracts. As such, as it relates to market technology revenues, the timing represents our best estimate.

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9. Debt Obligations

The following table presents the changes in the carrying amount of our debt obligations during the year ended December 31, 2016:

	December 31, 2015				Additions				Payments, Accretion and Other				December 31, 2016
	(in millions)
5.55% senior unsecured notes due January 15, 2020	$	597			$	—			$	1			$	598
5.25% senior unsecured notes due January 16, 2018	368				—				1				369
3.875% senior unsecured notes due June 7, 2021	646				—				(21		)		625
4.25% senior unsecured notes due June 1, 2024	495				—				—				495
1.75% senior unsecured notes due May 19, 2023	—				664				(42		)		622
3.85% senior unsecured notes due June 30, 2026	—				495				—				495
$400 million senior unsecured term loan facility due November 25, 2019 (average interest rate of 2.00% for the period March 17, 2016 through December 31, 2016)	—				399				—				399
$750 million revolving credit commitment due November 25, 2019 (average interest rate of 1.63% for the period January 1, 2016 through December 31, 2016)	258				898				(1,156		)		—
Total long-term debt obligations	$	2,364			$	2,456			$	(1,217	)		$	3,603

Senior Unsecured Notes

Our senior unsecured notes were all issued at a discount. As a result of the discount, the proceeds received from each issuance were less than the aggregate principal amount. As of December 31, 2016, the amounts in the table above reflect the aggregate principal amount, less the unamortized debt discount and the unamortized debt issuance costs which are being accreted through interest expense over the life of the applicable notes. Our senior unsecured notes are general unsecured obligations of ours and rank equally with all of our existing and future unsubordinated obligations and they are not guaranteed by any of our subsidiaries. The senior unsecured notes were issued under indentures that, among other things, limit our ability to consolidate, merge or sell all or substantially all of our assets, create liens, and enter into sale and leaseback transactions.

With the exception of the 2020 Notes, upon a change of control triggering event (as defined in the various note indentures), the terms require us to repurchase all or part of each holder’s notes for cash equal to 101% of the aggregate principal amount purchased plus accrued and unpaid interest, if any.

5.55% Senior Unsecured Notes

In January 2010, Nasdaq issued the 2020 Notes. The 2020 Notes pay interest semiannually at a rate of 5.55% per annum until January 15, 2020.

5.25% Senior Unsecured Notes

In December 2010, Nasdaq issued the 2018 Notes. The 2018 Notes pay interest semiannually at a rate of 5.25% per annum until January 16, 2018 and such rate may vary with Nasdaq’s debt rating up to a rate not to exceed 7.25%.

3.875% Senior Unsecured Notes

In June 2013, Nasdaq issued the 2021 Notes. The 2021 Notes pay interest annually at a rate of 3.875% per annum until June 7, 2021 and such rate may vary with Nasdaq’s debt rating up to a rate not to exceed 5.875%.

The 2021 Notes have been designated as a hedge of our net investment in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries. The decrease in the carrying amount of $21 million noted in the “Payments, Accretion and Other” column in the table above primarily reflects the translation of the 2021 Notes into U.S. dollars and is recorded in accumulated other comprehensive loss within stockholders’ equity in the Consolidated Balance Sheets for the year ended December 31, 2016.

4.25% Senior Unsecured Notes

In May 2014, Nasdaq issued the 2024 Notes. The 2024 Notes pay interest semiannually at a rate of 4.25% per annum until June 1, 2024 and such rate may vary with Nasdaq’s debt rating up to a rate not to exceed 6.25%.

1.75% Senior Unsecured Notes

In May 2016, Nasdaq issued the 2023 Notes. We used the net proceeds from the 2023 Notes and the 2026 Notes to fund our acquisition of ISE. See “Acquisition of ISE,” of Note 4, “Acquisitions,” for further discussion of the ISE acquisition.

The 2023 Notes pay interest annually at a rate of 1.75% per annum until May 19, 2023 and such rate may vary with Nasdaq’s debt rating up to a rate not to exceed 3.75%.

The 2023 Notes have been designated as a hedge of our net investment in certain foreign subsidiaries to mitigate the foreign

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exchange rate risk associated with certain investments in these subsidiaries. The decrease in the carrying amount of $42 million noted in the “Payments, Accretion and Other” column in the table above reflects the translation of the 2023 Notes into U.S. dollars and is recorded in accumulated other comprehensive loss within stockholders’ equity in the Consolidated Balance Sheets as of December 31, 2016.

3.85% Senior Unsecured Notes

In June 2016, Nasdaq issued the 2026 Notes. We used the net proceeds from the 2023 Notes and the 2026 Notes to fund our acquisition of ISE. See “Acquisition of ISE,” of Note 4, “Acquisitions,” for further discussion of the ISE acquisition.

The 2026 Notes pay interest semiannually at a rate of 3.85% per annum until June 30, 2026 and such rate may vary with Nasdaq’s debt rating up to a rate not to exceed 5.85%.

Credit Facilities

As of December 31, 2016, the amounts in the table above reflect the aggregate principal amount, less the unamortized debt issuance costs which are being accreted through interest expense over the life of the applicable credit facility. Nasdaq is permitted to repay borrowings under our credit facilities at any time in whole or in part, without penalty. We are also required to repay loans outstanding under our credit facilities with net cash proceeds from sales of property and assets of Nasdaq and its subsidiaries (excluding inventory sales and other sales in the ordinary course of business) and casualty and condemnation proceeds, in each case subject to specified exceptions and thresholds.

Our credit facilities contain financial and operating covenants. Financial covenants include a minimum interest expense coverage ratio and a maximum leverage ratio. Operating covenants include, among other things, limitations on Nasdaq’s ability to incur additional indebtedness, grant liens on assets, enter into affiliate transactions, dispose of assets and pay dividends. Our credit facilities allow us to pay cash dividends on our common stock. The facilities also contain customary affirmative covenants, including access to financial statements, notice of defaults and certain other material events, maintenance of business and insurance, and events of default, including cross-defaults to our material indebtedness.

2016 Credit Facility

In March 2016, Nasdaq entered into the 2016 Credit Facility. In March 2016, loans in an aggregate principal amount of $400 million were drawn under the 2016 Credit Facility and the net proceeds were used to partially repay amounts outstanding under the revolving credit commitment of the 2014 Credit Facility as discussed below.

Loans under the 2016 Credit Facility pay interest monthly at a variable interest rate based on either the LIBOR or the base rate (or other applicable rate with respect to non-dollar borrowings), plus an applicable margin that varies with Nasdaq’s debt rating. Under the 2016 Credit Facility, we are required to make

quarterly principal payments beginning in March 2018 equal to 2.50% of the aggregate original principal amounts borrowed with the remaining amounts due at maturity.

2014 Credit Facility

In November 2014, Nasdaq entered into the 2014 Credit Facility. The 2014 Credit Facility consists of a $750 million revolving credit commitment (with sublimits for non-dollar borrowings, swingline borrowings and letters of credit). At various points during 2016, we borrowed under the revolving credit commitment of the 2014 Credit Facility. Total borrowings for the year were $898 million of which $361 million was used to partially fund our acquisitions of Nasdaq CXC, Marketwired and Boardvantage, and $537 million was used for general corporate purposes. We used the net proceeds from our 2016 Credit Facility and cash on hand to repay $1,156 million under the revolving credit commitment of the 2014 Credit Facility. See “2016 Acquisitions,” of Note 4, “Acquisitions,” for further discussion of the Nasdaq CXC, Marketwired and Boardvantage acquisitions.

The loans under the 2014 Credit Facility have a variable interest rate based on either the LIBOR or the base rate (as defined in the credit agreement) (or other applicable rate with respect to non-dollar borrowings), plus an applicable margin that varies with Nasdaq’s debt rating.

Other Credit Facilities

In addition to the revolving credit commitment under our 2014 Credit Facility discussed above, we have credit facilities related to our Nasdaq Clearing operations in order to provide further liquidity. Credit facilities, which are available in multiple currencies, totaled $170 million at December 31, 2016 and $202 million at December 31, 2015 in available liquidity, none of which was utilized.

Debt Covenants

At December 31, 2016, we were in compliance with the covenants of all of our debt obligations.

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10. Income Taxes

The income tax provision consists of the following amounts:

	Year Ended December 31,
	2016				2015				2014
	(in millions)
Current income taxes:
Federal	$	37			$	139			$	123
State	21				42				36
Foreign	106				36				28
Total current income taxes	164				217				187
Deferred income taxes:
Federal	(97		)		(18		)		(13		)
State	(35		)		(1		)		(2		)
Foreign	(4		)		5				9
Total deferred income taxes	(136		)		(14		)		(6		)
Total income tax provision	$	28			$	203			$	181

We have determined that undistributed earnings of certain non-U.S. subsidiaries will be reinvested for an indefinite period of time. We have both the intent and ability to indefinitely reinvest these earnings. At December 31, 2016, the cumulative amount of undistributed earnings in these subsidiaries is approximately $144 million. Given our intent to reinvest these earnings for an indefinite period of time, we have not accrued a deferred tax liability for U.S. federal income taxes on these earnings. A determination of unrecognized deferred tax liability related to these earnings is not practicable.

A reconciliation of the income tax provision, based on the U.S. federal statutory rate, to our actual income tax provision for the years ended December 31, 2016, 2015 and 2014 is as follows:

	Year Ended December 31,
	2016			2015			2014
Federal income tax provision at the statutory rate	35.0	%		35.0	%		35.0	%
State income tax provision, net of federal effect	(6.7	)%		3.9	%		3.4	%
Non-U.S. subsidiary earnings	(7.3	)%		(6.4	)%		(7.0	)%
Tax credits and deductions	(5.1	)%		(0.8	)%		(0.6	)%
Change in unrecognized tax benefits	4.2	%		0.3	%		(3.0	)%
Other, net	0.5	%		0.2	%		2.7	%
Actual income tax provision	20.6	%		32.2	%		30.5	%

The lower effective tax rate in 2016 when compared to 2015 is primarily due to a shift in the geographic mix of earnings, largely driven by the write-off of the eSpeed trade name,

partially offset by an unfavorable ruling from the Finnish Supreme Administrative Court. The higher effective tax rate in 2015 when compared with 2014 was primarily due to a decrease in unrecognized tax benefits in 2014.

The temporary differences, which give rise to our deferred tax assets and (liabilities), consisted of the following:

	December 31,
	2016				2015
	(in millions)
Deferred tax assets:
Deferred revenues	$	39			$	46
U.S. federal net operating loss	2				5
Foreign net operating loss	37				92
State net operating loss	1				2
Compensation and benefits	99				86
Foreign currency translation	528				458
Tax credits	7				7
Other	34				32
Gross deferred tax assets	747				728
Deferred tax liabilities:
Amortization of software development costs and depreciation	(63		)		(56		)
Amortization of acquired intangible assets	(596		)		(522		)
Investments	(37		)		(35		)
Other	(24		)		(13		)
Gross deferred tax liabilities	(720		)		(626		)
Net deferred tax assets before valuation allowance	27				102
Less: valuation allowance	(30		)		(85		)
Net deferred tax assets (liabilities)	$	(3	)		$	17

A valuation allowance has been established with regards to the tax benefits primarily associated with certain net operating losses, or NOLs, as it is more likely than not that these benefits will not be realized in the foreseeable future.

As of December 31, 2016, the expiration dates for the NOLs, and credits are as follows:

Jurisdiction		Amount				Expiration Date
		(in millions)
U.S. Federal NOL		$	2			2027
Foreign NOL		3				2018-2025
Foreign NOL		34				No expiration date
State NOL		1				2017-2035
U.S. Federal Tax credits		7				2018-2027

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The following represents the domestic and foreign components of income before income tax provision:

	Year Ended December 31,
	2016				2015				2014
	(in millions)
Domestic	$	(155	)		$	393			$	349
Foreign	291				237				245
Income before income tax provision	$	136			$	630			$	594

We recorded income tax benefits of $41 million in 2016, $34 million in 2015 and $9 million in 2014, primarily related to share-based compensation. These amounts were recorded as additional paid-in-capital in the Consolidated Balance Sheets.

We are subject to examination by federal, state and local, and foreign tax authorities. We regularly assess the likelihood of additional assessments by each jurisdiction and have established tax reserves that we believe are adequate in relation to the potential for additional assessments. We believe that the resolution of tax matters will not have a material effect on our financial condition but may be material to our operating results for a particular period and the effective tax rate for that period.

There are $40 million as of December 31, 2016 and $33 million as of December 31, 2015 of unrecognized tax benefits that if recognized would affect our effective tax rate.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Year Ended December 31,
	2016				2015
	(in millions)
Beginning balance	$	40			$	41
Additions as a result of tax positions taken in prior periods	9				3
Additions as a result of tax positions taken in the current period	3				3
Reductions related to settlements with taxing authorities	(4		)		(2		)
Reductions as a result of lapses of the applicable statute of limitations	—				(5		)
Ending balance	$	48			$	40

Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. We have accrued $8 million as of December 31, 2016 and $7 million as of December 31, 2015 for interest and penalties, net of tax effect.

Nasdaq and its eligible subsidiaries file a consolidated U.S. federal income tax return and applicable state and local income tax returns and non-U.S. income tax returns. Federal income tax returns for the years 2011 through 2015 are subject to examination by the Internal Revenue Service. Several state tax returns are currently under examination by the respective tax authorities for the years 2005 through 2014 and we are subject to examination for the year 2015. Due to the uncertainty of the outcome of matters in certain states, in 2016 we recorded a

reserve of $5 million. This reserve is mostly offset by the recognition of $4 million of previously unrecognized tax benefits, in 2016, due to settlements of audits in various states. Non-U.S. tax returns are subject to examination by the respective tax authorities for the years 2008 through 2015. In 2015, we received an assessment of $6 million from the Swedish Tax Agency for the year 2013. We have appealed this assessment to the Swedish Courts. Due to the uncertainty of the outcome of this matter, in 2015 we recorded a reserve of $6 million. This reserve is mostly offset by the recognition of $5 million of previously unrecognized tax benefits, in 2015, due to the lapse of the statute of limitations related to tax examinations in various jurisdictions in the U.S. We anticipate that the amount of unrecognized tax benefits at December 31, 2016 will significantly decrease in the next twelve months as we expect to settle certain tax audits. The final outcome of such audits cannot yet be determined. We anticipate that such adjustments will not have a material impact on our consolidated financial position or results of operations.

In the fourth quarter of 2010, we received an appeal from the Finnish Tax Authority challenging certain interest expense deductions claimed by Nasdaq in Finland for the year 2008. The appeal also demanded certain penalties be paid with regard to the company’s tax return filing position. In October 2012, the Finnish Appeals Board disagreed with the company’s tax return filing position for years 2009 through 2011, even though the tax return position with respect to this deduction was previously reviewed and approved by the Finnish Tax Authority. In June 2014, the Finnish Administrative Court also disagreed with the company’s tax return filing position for these years. We appealed this ruling to the Finnish Supreme Administrative Court. Through March 31, 2016, we recorded tax benefits of $30 million associated with this filing position. We paid $41 million to the Finnish tax authorities, which includes $11 million in interest and penalties. In May 2016, we received an unfavorable ruling from the Finnish Supreme Administrative Court, in which the Court disagreed with our position. As such, in the second quarter of 2016 we recorded tax expense of $28 million, or $0.17 per diluted share. This expense reflects the reversal of previously recorded Finnish tax benefits, and related interest and penalties, of $38 million through the first quarter of 2016, net of a related U.S. tax benefit of $10 million. The tax expense recorded reflects the impact of foreign currency translation. We expect to record future quarterly net tax expense of approximately $1 million as a result of this ruling.

From 2009 through 2012, we recorded tax benefits associated with certain interest expense incurred in Sweden. Our position is supported by a 2011 ruling we received from the Swedish Supreme Administrative Court. However, under new legislation effective January 1, 2013, limitations are imposed on certain forms of interest expense. Because this legislation is unclear with regard to our ability to continue to claim such interest deductions, Nasdaq filed an application for an advance tax ruling with the Swedish Tax Council for Advance Tax Rulings. In June 2014, we received an unfavorable ruling from the Swedish Tax Council for Advance Tax Rulings. We

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appealed this ruling to the Swedish Supreme Administrative Court; however the Swedish Supreme Administrative Court denied our request for a ruling based on procedural requirements. In the third quarter of 2015, and in October 2016, we received notices from the Swedish Tax Agency that interest deductions for the years 2013 and 2014, respectively, have been disallowed. We have appealed to the Swedish Lower Administrative Court and continue to expect a favorable decision. Since January 1, 2013, we have recorded tax benefits of $50 million associated with this matter. We continue to pay all assessments from the Swedish Tax Agency while this matter is pending. If the Swedish Courts agree with our position we will receive a refund of all paid assessments; if the Swedish Courts disagree with our position, we will record tax expense of $38 million, or $0.22 per diluted share, which is gross of any related U.S. tax benefits and reflects the impact of foreign currency translation. We expect to record recurring quarterly tax benefits of $1 million to $2 million with respect to this matter for the foreseeable future.

Other Tax Matter

In December 2012, the Swedish Tax Agency approved our 2010 amended VAT tax return and we received a cash refund for the amount claimed. In 2013, we filed amended VAT tax returns for 2011 and 2012 and utilized the same approach which was approved for the 2010 filing. We also utilized this approach in our 2013 and 2014 filings. However, even though the VAT return position was previously reviewed and approved by the Swedish Tax Agency, the Swedish Tax Agency challenged our approach. The revised position of the Swedish Tax Agency was upheld by the Lower Administrative Court in 2015. As a result, in 2015, we reversed the previously recorded benefit of $12 million, based on the court decision. We have appealed the ruling of the Lower Administrative Court to the Court of Appeals.

11. Retirement Plans

Defined Contribution Savings Plan

We sponsor a 401(k) Plan for U.S. employees. Employees are immediately eligible to make contributions to the plan and are also eligible for an employer contribution match at an amount equal to 100.0% of the first 6.0% of eligible employee contributions in 2016, 2015 and 2014. Savings plan expense included in compensation and benefits expense in the Consolidated Statements of Income was $11 million in 2016, $10 million in 2015 and $9 million in 2014.

Prior to 2015, we had a profit-sharing contribution feature to our 401(k) Plan which allowed eligible U.S. employees to receive employer retirement contributions when we met our annual corporate goals. Employer retirement contribution expense recorded in compensation and benefits expense in the Consolidated Statements of Income was $3 million in 2014.

Pension and Supplemental Executive Retirement Plans

We maintain non-contributory, defined-benefit pension plans, non-qualified SERPs for certain senior executives and other post-retirement benefit plans for eligible employees in the U.S., collectively referred to as the Nasdaq Benefit Plans. Our pension plans and SERPs are frozen. Future service and salary for all participants do not count toward an accrual of benefits under the pension plans and SERPs. Most employees outside the U.S. are covered by local retirement plans or by applicable social laws. Benefits under social laws are generally expensed in the periods in which the costs are incurred. The total expense for these plans is included in compensation and benefits expense in the Consolidated Statements of Income and was $23 million in 2016, $22 million in 2015 and $21 million in 2014.

Nasdaq recognizes the funded status of the Nasdaq Benefit Plans, measured as the difference between the fair value of the plan assets and the benefit obligation, in the Consolidated Balance Sheets. The funded status related to the Nasdaq Benefit Plans was underfunded by $59 million at December 31, 2016 and $64 million at December 31, 2015 and is included in accrued personnel costs and other non-current liabilities in the Consolidated Balance Sheets. The fair value of the plan assets was $74 million as of December 31, 2016 and $70 million as of December 31, 2015 and the benefit obligation was $133 million at December 31, 2016 and $134 million at December 31, 2015. The plan assets of the Nasdaq Benefit Plans are invested in securities per target allocations adopted by Nasdaq’s Pension and 401(k) Committee and are primarily invested in equity and fixed income securities, which are primarily categorized as Level 2 in the fair value hierarchy.

Accumulated Other Comprehensive Loss

As of December 31, 2016, accumulated other comprehensive loss for the Nasdaq Benefit Plans was $21 million reflecting an unrecognized net loss of $35 million, partially offset by an income tax benefit of $14 million, primarily due to our pension plans.

Estimated Future Benefit Payments

We expect to make the following benefit payments to participants in the next ten fiscal years under the Nasdaq Benefit Plans:

	Pension				SERP				Post-retirement				Total
Fiscal Year Ended:	(in millions)
2017	$	4			$	7			$	1			$	12
2018	4				3				—				7
2019	5				4				—				9
2020	5				5				—				10
2021	5				1				—				6
2022 through 2026	26				8				1				35
	$	49			$	28			$	2			$	79

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12. Share-Based Compensation

We have a share-based compensation program that provides our board of directors broad discretion in creating employee equity incentives. Share-based awards granted under this program include stock options, restricted stock (consisting of restricted stock units), and PSUs. For accounting purposes, we consider PSUs to be a form of restricted stock.

Summary of Share-Based Compensation Expense

The following table shows the total share-based compensation expense resulting from equity awards and the 15.0% discount for the ESPP for the years ended December 31, 2016, 2015 and 2014 in the Consolidated Statements of Income:

	Year Ended December 31,
	2016				2015				2014
	(in millions)
Share-based compensation expense before income taxes	$	86			$	68			$	62
Income tax benefit	(35		)		(28		)		(26		)
Share-based compensation expense after income taxes	$	51			$	40			$	36

Common Shares Available Under Our Equity Plan

As of December 31, 2016, we had approximately 6.7 million shares of common stock authorized for future issuance under our Equity Plan.

Restricted Stock

We grant restricted stock to most active employees. The grant date fair value of restricted stock awards is based on the closing price at the date of grant less the present value of future cash dividends. Restricted stock awards granted generally vest 25.0% on the second anniversary of the grant date, 25.0% on the third anniversary of the grant date, and 50.0% on the fourth anniversary of the grant date. We generally recognize compensation expense for restricted stock awards on a straight-line basis over the requisite service period of the award, taking into account an estimated forfeiture rate.

Summary of Restricted Stock Activity

The following table summarizes our restricted stock activity for the years ended December 31, 2016, 2015 and 2014:

	Restricted Stock
	Number of Awards			Weighted-Average Grant Date Fair Value
Unvested balances at December 31, 2013	3,826,470			$	25.96
Granted	1,196,441			36.87
Vested	(1,529,792	)		23.29
Forfeited	(299,889	)		29.87
Unvested balances at December 31, 2014	3,193,230			$	30.99
Granted	823,950			49.26
Vested	(370,998	)		29.90
Forfeited	(302,444	)		34.34
Unvested balances at December 31, 2015	3,343,738			$	35.36
Granted	724,200			62.91
Vested	(1,238,980	)		27.91
Forfeited	(268,380	)		43.29
Unvested balances at December 31, 2016	2,560,578			$	45.92

At December 31, 2016, $52 million of total unrecognized compensation cost related to restricted stock is expected to be recognized over a weighted-average period of 1.7 years.

PSUs

The grant date fair value of PSUs is based on the closing price at the date of grant less the present value of future cash dividends. PSUs are based on performance measures that impact the amount of shares that each recipient will receive upon vesting. We report the target number of PSUs granted, unless we have determined that it is more likely than not, based on the actual achievement of performance measures, that an employee will receive a different amount of shares underlying the PSUs, in which case we report the amount of shares the employee is likely to receive. We have two performance-based long-term PSU programs for certain officers, a one-year performance-based program and a three-year cumulative performance-based program that focuses on TSR.

One-Year PSU Program

Under the one-year performance-based program, an employee may receive from 0.0% to 150.0% of the target amount granted, depending on the achievement of performance measures. These awards vest ratably on an annual basis over a three-year period commencing with the end of the performance period. Compensation cost is recognized over the performance period and the three-year vesting period, taking into account an estimated forfeiture rate.

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During 2016, certain grants of PSUs with a one-year performance period exceeded the applicable performance parameters. As a result, an additional 56,533 units above target were considered granted in the first quarter of 2017.

Three-Year PSU Program

Under the three-year performance-based program, each individual receives PSUs with a three-year cumulative performance period that vest at the end of the performance period. Compensation cost is recognized over the three-year vesting period. Performance will be determined by comparing Nasdaq’s TSR to two peer groups, each weighted 50.0%. The first peer group consists of exchange companies, and the second peer group consists of all companies in the S&P 500. Nasdaq’s relative performance ranking against each of these groups will determine the final number of shares delivered to each individual under the program. The payout under this program will be between 0.0% and 200.0% of the number of PSUs granted and will be determined by Nasdaq’s overall performance against both peer groups. However, if Nasdaq’s TSR is negative for the three-year performance period, regardless of TSR ranking, the payout will not exceed 100.0% of the number of PSUs granted. We estimate the fair value of PSU’s granted under the three-year PSU program using the Monte Carlo simulation model, as these awards contain a market condition.

Certain grants of PSUs that were issued in 2014 with a three-year performance period exceeded the applicable performance parameters. As a result, an additional 538,892 units above target were considered granted in the first quarter of 2017.

The following weighted-average assumptions were used to determine the weighted-average fair values of the PSU awards granted under the three-year PSU program for the years ended December 31, 2016 and December 31, 2015:

	Year Ended December 31,
	2016				2015
Weighted-average risk free interest rate(1)	0.84		%		0.81		%
Expected volatility(2)	21.0		%		21.5		%
Weighted-average grant date share price	$	66.36			$	50.97
Weighted-average fair value at grant date	$	93.25			$	64.08

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(1)	The risk-free interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.

(2)	We use historic volatility for PSU awards issued under the three-year PSU program, as implied volatility data could not be obtained for all the companies in the peer groups used for relative performance measurement within the program.

In addition, the annual dividend assumption utilized in the Monte Carlo simulation model is based on Nasdaq’s dividend yield at the date of grant.

Summary of PSU Activity

The following table summarizes our PSU activity for the years ended December 31, 2016, 2015 and 2014:

	PSUs
	One-Year Program							Three-Year Program
	Number of Awards			Weighted-Average Grant Date Fair Value				Number of Awards			Weighted-Average Grant Date Fair Value
Unvested balances at December 31, 2013	804,377			$	27.38			1,111,224			$	31.95
Granted	328,791			36.20				553,846			42.80
Vested	(442,781	)		27.75				—			—
Forfeited	(132,347	)		28.58				(10,503	)		30.82
Unvested balances at December 31, 2014	558,040			$	24.17			1,654,567			$	35.57
Granted	206,199			48.16				649,626			49.69
Vested	(247,273	)		30.51				(837,109	)		22.50
Forfeited	(92,999	)		34.74				(27,366	)		43.49
Unvested balances at December 31, 2015	423,967			$	41.34			1,439,718			$	49.41
Granted	242,642			58.33				761,501			66.89
Vested	(242,793	)		39.63				(879,926	)		43.81
Forfeited	(45,050	)		47.72				(6,625	)		69.11
Unvested balances at December 31, 2016	378,766			$	52.55			1,314,668			$	63.18

At December 31, 2016, $10 million of total unrecognized compensation cost related to the one-year PSU program is expected to be recognized over a weighted-average period of 1.4 years. For the three-year PSU program, $20 million of total unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.3 years.

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Stock Options

The fair value of stock options are estimated using the Black-Scholes option-pricing model. Each grant has a 10-year life, vesting ratably over a four-year period, starting at the date of the grant. There were no stock option awards granted for the years ended December 31, 2016, 2015 and 2014.

Summary of Stock Option Activity

A summary of stock option activity for the years ended December 31, 2016, 2015 and 2014 is as follows:

	Number of Stock Options			Weighted-Average Exercise Price
Outstanding at December 31, 2013	4,926,522			$	25.21
Exercised	(1,578,050	)		20.31
Forfeited or expired	(31,690	)		24.23
Outstanding at December 31, 2014	3,316,782			$	27.56
Exercised	(682,054	)		26.84
Forfeited or expired	(8,241	)		28.53
Outstanding at December 31, 2015	2,626,487			$	27.74
Exercised	(1,219,820	)		34.00
Forfeited or expired	(296	)		23.31
Outstanding at December 31, 2016	1,406,371			$	22.32

We received net cash proceeds of $41 million from the exercise of 1,219,820 stock options for the year ended December 31, 2016, received net cash proceeds of $18 million from the exercise of 682,054 stock options for the year ended December 31, 2015 and received net cash proceeds of $32 million from the exercise of 1,578,050 stock options for the year ended December 31, 2014.

The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2016:

								Outstanding and Exercisable
Range of Exercise Prices								Number of Stock Options			Weighted-Average Remaining Contractual Term (in years)		Weighted-Average Exercise Price				Aggregate Intrinsic Value (in millions)
$	17.36		-	$	19.99			140,733			3.13		$	19.74			$	7
$	20.00		-	$	25.75			1,237,333			2.62		22.16				55
$	25.76		-	$	45.38			28,305			1.17		41.77				1
Total								1,406,371			2.65		$	22.32			$	63

The aggregate intrinsic value in the above table represents the total pre-tax intrinsic value (i.e., the difference between our closing stock price on December 30, 2016 of $67.12 and the

exercise price, times the number of shares) based on stock options with an exercise price less than Nasdaq’s closing price of $67.12 as of December 30, 2016, which would have been received by the option holders had the option holders exercised their stock options on that date. This amount can change based on the fair market value of our common stock. The total number of in-the-money stock options exercisable as of December 31, 2016 was 1.4 million. As of December 31, 2015, 2.6 million outstanding stock options were exercisable and the weighted-average exercise price was $27.74.

Total fair value of stock options vested was immaterial for both the years ended December 31, 2016 and 2015. The total pre-tax intrinsic value of stock options exercised was $40 million during 2016, $17 million during 2015 and $33 million during 2014.

ESPP

We have an ESPP under which approximately 2.3 million shares of our common stock have been reserved for future issuance as of December 31, 2016. Under our ESPP, employees may purchase shares having a value not exceeding 10.0% of their annual compensation, subject to applicable annual Internal Revenue Service limitations. We record compensation expense related to the 15.0% discount that is given to our employees. The following table summarizes employee activity and expense associated with the ESPP for the years ended December 31, 2016, 2015 and 2014.

	Year Ended December 31,
	2016				2015				2014
Number of shares purchased by employees	233,464				247,444				256,772
Weighted-average price of shares purchased	$	50.39			$	40.95			$	33.06
Compensation expense (in millions)	$	4			$	4			$	4

13. Nasdaq Stockholders’ Equity

Common Stock

At December 31, 2016, 300,000,000 shares of our common stock were authorized, 170,501,186 shares were issued and 166,579,468 shares were outstanding. The holders of common stock are entitled to one vote per share, except that our certificate of incorporation limits the ability of any person to vote in excess of 5.0% of the then-outstanding shares of Nasdaq common stock.

Common Stock in Treasury, at Cost

We account for the purchase of treasury stock under the cost method with the shares of stock repurchased reflected as a reduction to Nasdaq stockholders’ equity and included in common stock in treasury, at cost in the Consolidated Balance Sheets. Most shares repurchased under our share repurchase program are retired and cancelled, and the remaining shares are

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available for general corporate purposes. When treasury shares are reissued, they are recorded at the average cost of the treasury shares acquired. We held 3,921,718 shares of common stock in treasury as of December 31, 2016 and 2,917,464 shares as of December 31, 2015.

Share Repurchase Program

In the fourth quarter of 2014, our board of directors authorized the repurchase of up to $500 million of our outstanding common stock and in the first quarter of 2016, our board of directors authorized the repurchase of an additional $370 million of our outstanding common stock under our share repurchase program.

These purchases may be made from time to time at prevailing market prices in open market purchases, privately-negotiated transactions, block purchase techniques or otherwise, as determined by our management. The purchases are primarily funded from existing cash balances. The share repurchase program may be suspended, modified or discontinued at any time.

The following table summarizes our share repurchase activity:

		Year Ended December 31,
		2016				2015
Number of shares of common stock repurchased		1,547,778				7,191,685
Average price paid per share		$	64.42			$	52.44
Total purchase price (in millions)		$	100			$	377

As discussed above in “Common Stock in Treasury, at Cost,” most shares repurchased under our share repurchase program are retired and cancelled, and the remaining shares are available for general corporate purposes. As of December 31, 2016, the remaining amount authorized for share repurchases under the program was $429 million.

Other Repurchases of Common Stock

For the year ended December 31, 2016, we repurchased 1,004,254 shares of our common stock in settlement of employee tax withholding obligations arising from the vesting of restricted stock.

Preferred Stock

Our certificate of incorporation authorizes the issuance of 30,000,000 shares of preferred stock, par value $0.01 per share, issuable from time to time in one or more series. At December 31, 2016 and December 31, 2015, no shares of preferred stock were issued or outstanding.

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Cash Dividends on Common Stock

During 2016, our board of directors declared the following cash dividends:

Declaration Date		Dividend Per Common Share				Record Date		Total Amount Paid				Payment Date
								(in millions)
January 27, 2016		$	0.25			March 14, 2016		$	41			March 28, 2016
March 28, 2016		0.32				June 10, 2016		53				June 24, 2016
July 26, 2016		0.32				September 16, 2016		53				September 30, 2016
October 25, 2016		0.32				December 16, 2016		53				December 30, 2016
								$	200

The total amount paid of $200 million was recorded in retained earnings in the Consolidated Balance Sheets at December 31, 2016.

In January 2017, the board of directors declared a regular quarterly cash dividend of $0.32 per share on our outstanding common stock. The dividend is payable on March 31, 2017 to shareholders of record at the close of business on March 17, 2017. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the board of directors.

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Accumulated Other Comprehensive Loss

The following table outlines the components of accumulated other comprehensive loss:

		Foreign Currency Translation Adjustments				Employee Benefit Plan Adjustments				Accumulated Other Comprehensive Loss
		(in millions)
Gross balance, December 31, 2015		$	(1,298	)		$	(35	)		$	(1,333	)
Income taxes		455				14				469
Net balance, December 31, 2015		$	(843	)		$	(21	)		$	(864	)
Gross balance, December 31, 2016		$	(1,481	)		$	(35	)		$	(1,516	)
Income taxes		523				14				537
Net balance, December 31, 2016		$	(958	)		$	(21	)		$	(979	)

Foreign currency translation adjustments include cumulative gains (losses) on foreign currency translation adjustments from non-U.S. subsidiaries for which the functional currency is other than the U.S. dollar.

Employee benefit plan adjustments represent unrecognized net actuarial gains (losses) related to the Nasdaq Benefit Plans.

14. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Year Ended December 31,
	2016				2015				2014
	(in millions, except share and per share amounts)
Numerator:
Net income attributable to common shareholders	$	108			$	428			$	414
Denominator:
Weighted-average common shares outstanding for basic earnings per share	165,182,290				167,285,450				168,926,733
Weighted-average effect of dilutive securities:
Employee equity awards	3,258,136				3,638,981				3,727,839
Contingent issuance of common stock	360,571				358,840				364,277
Weighted-average common shares outstanding for diluted earnings per share	168,800,997				171,283,271				173,018,849
Basic and diluted earnings per share:
Basic earnings per share	$	0.65			$	2.56			$	2.45
Diluted earnings per share	$	0.64			$	2.50			$	2.39

For further discussion of our contingent issuance of common stock, see “Non-Cash Contingent Consideration,” of Note 18, “Commitments, Contingencies and Guarantees.”

Stock options to purchase 1,406,371 shares of common stock and 4,254,012 shares of restricted stock and PSUs were outstanding at December 31, 2016. For the year ended December 31, 2016, we included all of the outstanding stock options and 3,663,919 shares of restricted stock and PSUs in the computation of diluted earnings per share, on a weighted-average basis, as their inclusion was dilutive. The remaining shares of restricted stock and PSUs are antidilutive, and as such, they were properly excluded.

Stock options to purchase 2,626,487 shares of common stock and 5,207,423 shares of restricted stock and PSUs were outstanding at December 31, 2015. For the year ended December 31, 2015, we included all of the outstanding stock options and 4,842,383 shares of restricted stock and PSUs in the computation of diluted earnings per share, on a weighted-average basis, as their inclusion was dilutive. The remaining shares of restricted stock and PSUs are antidilutive, and as such, they were properly excluded.

Stock options to purchase 3,316,782 shares of common stock and 5,405,837 shares of restricted stock and PSUs were

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outstanding at December 31, 2014. For the year ended December 31, 2014, we included 3,198,842 of the outstanding stock options and 4,836,518 shares of restricted stock and PSUs in the computation of diluted earnings per share, on a weighted-average basis, as their inclusion was dilutive. The remaining stock options and shares of restricted stock and PSUs are antidilutive, and as such, they were properly excluded.

15. Fair Value of Financial Instruments

The following table presents our financial assets that are measured at fair value on a recurring basis as of December 31, 2016 and 2015. We did not have any financial liabilities measured at fair value on a recurring basis as of December 31, 2016 and 2015.

	December 31, 2016
	Total				Level 1				Level 2				Level 3
	(in millions)
Financial investments, at fair value	$	245			$	228			$	17			$	—
Default fund and margin deposit investments	1,900				1,763				137				—
Total	$	2,145			$	1,991			$	154			$	—

	December 31, 2015
	Total				Level 1				Level 2				Level 3
	(in millions)
Financial investments, at fair value	$	201			$	189			$	12			$	—
Default fund and margin deposit investments	1,556				1,253				303				—
Total	$	1,757			$	1,442			$	315			$	—

Our Level 1 financial investments, at fair value were primarily comprised of trading securities, mainly highly rated European government debt securities. Of these securities, $172 million as of December 31, 2016 and $166 million as of December 31, 2015 are assets utilized to meet regulatory capital requirements, primarily for our clearing operations at Nasdaq Clearing. As of December 31, 2016 and 2015, Level 2 financial investments, at fair value were primarily comprised of available-for-sale investment securities in short-term commercial paper.

Our default fund and margin deposit investments include cash contributions invested by Nasdaq Clearing, in accordance with its investment policy. Of the total balance of $3,301 million recorded in the Consolidated Balance Sheets as of December 31, 2016, $137 million of cash contributions have been invested in reverse repurchase agreements and $1,763 million of cash contributions have been invested in highly rated European, and to a lesser extent, U.S. government debt securities or central bank certificates. The remainder of this balance is held in cash. Of the total balance of $2,228 million recorded in the Consolidated Balance Sheets as of

December 31, 2015, $303 million of cash contributions have been invested in reverse repurchase agreements and $1,253 million of cash contributions have been invested in highly rated European, and to a lesser extent, U.S. government debt securities and time deposits. The remainder of this balance is held in cash. See Note 16, “Clearing Operations,” for further discussion of default fund contributions and margin deposits.

There were no transfers between Level 1 and Level 2 of the fair value hierarchy as of December 31, 2016 and 2015.

Financial Instruments Not Measured at Fair Value on a Recurring Basis

Some of our financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature. Such financial assets and financial liabilities include: cash and cash equivalents, restricted cash, receivables, net, certain other current assets, accounts payable and accrued expenses, Section 31 fees payable to SEC, accrued personnel costs, and certain other current liabilities.

In addition, our investments in OCC and EuroCCP N.V. are accounted for under the equity method of accounting and our investments in Borsa Istanbul and LCH.Clearnet Group Limited are carried at cost. See “Equity Method Investments,” and “Cost Method Investments,” of Note 6, “Investments,” for further discussion.

We also consider our debt obligations to be financial instruments. The fair value of our debt, utilizing discounted cash flow analyses for our floating rate debt and prevailing market rates for our fixed rate debt, was $3.8 billion at December 31, 2016 and $2.5 billion at December 31, 2015. The discounted cash flow analyses are based on borrowing rates currently available to us for debt with similar terms and maturities. Our fixed rate and our floating rate debt is categorized as Level 2 in the fair value hierarchy. For further discussion of our debt obligations, see Note 9, “Debt Obligations.”

16. Clearing Operations

Nasdaq Clearing

Nasdaq Clearing is authorized and supervised under EMIR as a multi-asset clearinghouse by the SFSA and is authorized to conduct clearing operations in Norway by the Norwegian Ministry of Finance. The clearinghouse acts as the CCP for exchange and OTC trades in equity derivatives, fixed income derivatives, resale and repurchase contracts, power derivatives, emission allowance derivatives, freight and fuel oil derivatives, iron ore derivatives and seafood derivatives.

Through our clearing operations in the financial markets, which include the resale and repurchase market, the commodities markets, and the seafood market, Nasdaq Clearing is the legal counterparty for, and guarantees the fulfillment of, each contract cleared. These contracts are not used by Nasdaq Clearing for the purpose of trading on its own behalf. As the legal counterparty of each transaction, Nasdaq Clearing bears

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the counterparty risk between the purchaser and seller in the contract. In its guarantor role, Nasdaq Clearing has precisely equal and offsetting claims to and from clearing members on opposite sides of each contract, standing as the CCP on every contract cleared. In accordance with the rules and regulations of Nasdaq Clearing, clearing members’ open positions are aggregated to create a single portfolio for which default fund and margin collateral requirements are calculated. See “Default Fund Contributions and Margin Deposits” below for further discussion of Nasdaq Clearing’s default fund and margin requirements.

Nasdaq Clearing maintains four member sponsored default funds: one related to financial markets, one related to commodities markets, one related to the seafood market, and a mutualized fund. Under this structure, Nasdaq Clearing and its clearing members must contribute to the total regulatory capital related to the clearing operations of Nasdaq Clearing. This structure applies an initial separation of default fund contributions for the financial, commodities and seafood markets in order to create a buffer for each market’s counterparty risks. Simultaneously, a mutualized default fund provides capital efficiencies to Nasdaq Clearing’s members with regard to total regulatory capital required. See “Default Fund Contributions” below for further discussion of Nasdaq Clearing’s default fund. Power of assessment and a liability waterfall also have been implemented. See “Power of Assessment” and “Liability Waterfall” below for further discussion. These requirements ensure the alignment of risk between Nasdaq Clearing and its clearing members.

Default Fund Contributions and Margin Deposits

As of December 31, 2016, clearing member default fund contributions and margin deposits were as follows:

	December 31, 2016
	Cash Contributions				Non-Cash Contributions				Total Contributions
	(in millions)
Default fund contributions	$	314			$	89			$	403
Margin deposits	2,987				3,713				6,700
Total	$	3,301			$	3,802			$	7,103

In accordance with its investment policy, of the total cash contributions of $3,301 million, Nasdaq Clearing has invested cash contributions of $137 million in reverse repurchase agreements and $1,763 million in highly rated European, and to a lesser extent, U.S. government debt securities or central bank certificates. The remainder of this balance is held in cash.

Of the total default fund contributions of $403 million, Nasdaq Clearing can utilize $332 million as capital resources in the event of a counterparty default. The remaining balance of $71 million pertains to member posted surplus balances.

Default Fund Contributions

Contributions made to the default funds are proportional to the exposures of each clearing member. When a clearing member is active in more than one market, contributions must be made to all markets’ default funds in which the member is active. Clearing members’ eligible contributions may include cash and non-cash contributions. Cash contributions received are held in cash or invested by Nasdaq Clearing, in accordance with its investment policy, either in highly rated government debt securities, time deposits, central bank certificates or reverse repurchase agreements with highly rated government debt securities as collateral. Nasdaq Clearing maintains and manages all cash deposits related to margin collateral. All risks and rewards of collateral ownership, including interest, belong to Nasdaq Clearing. Clearing members’ cash contributions are included in default funds and margin deposits in the Consolidated Balance Sheets as both a current asset and a current liability. Non-cash contributions include highly rated government debt securities that must meet specific criteria approved by Nasdaq Clearing. Non-cash contributions are pledged assets that are not recorded in the Consolidated Balance Sheets as Nasdaq Clearing does not take legal ownership of these assets and the risks and rewards remain with the clearing members. These balances may fluctuate over time due to changes in the amount of deposits required and whether members choose to provide cash or non-cash contributions. Assets pledged are held at a nominee account in Nasdaq Clearing’s name for the benefit of the clearing members and are immediately accessible by Nasdaq Clearing in the event of a default. In addition to clearing members’ required contributions to the default funds, Nasdaq Clearing is also required to contribute capital to the default funds and overall regulatory capital as specified under its clearinghouse rules. As of December 31, 2016, Nasdaq Clearing committed capital totaling $133 million to the member sponsored default funds and overall regulatory capital, in the form of government debt securities, which are recorded as financial investments, at fair value in the Consolidated Balance Sheets. The combined regulatory capital of the clearing members and Nasdaq Clearing will serve to secure the obligations of a clearing member and may be used to cover losses sustained by a clearing member in the event of a default.

Margin Deposits

Nasdaq Clearing requires all clearing members to provide collateral, which may consist of cash and non-cash contributions, to guarantee performance on the clearing members’ open positions, or initial margin. In addition, clearing members must also provide collateral to cover the daily margin call if needed. See “Default Fund Contributions” above for further discussion of cash and non-cash contributions.

Similar to default fund contributions, Nasdaq Clearing maintains and manages all cash deposits related to margin collateral. All risks and rewards of collateral ownership, including interest, belong to Nasdaq Clearing. These cash deposits are recorded in default funds and margin deposits in the Consolidated Balance Sheets as both a current asset and

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current liability. Pledged margin collateral is not recorded in our Consolidated Balance Sheets as all risks and rewards of collateral ownership, including interest, belong to the counterparty. Assets pledged are held at a nominee account in Nasdaq Clearing’s name for the benefit of the clearing members and are immediately accessible by Nasdaq Clearing in the event of a default.

Nasdaq Clearing marks to market all outstanding contracts and requires payment from clearing members whose positions have lost value. The mark-to-market process helps identify any clearing members that may not be able to satisfy their financial obligations in a timely manner allowing Nasdaq Clearing the ability to mitigate the risk of a clearing member defaulting due to exceptionally large losses. In the event of a default, Nasdaq Clearing can access the defaulting member’s margin deposits to cover the defaulting member’s losses.

Regulatory Capital and Risk Management Calculations

Nasdaq Clearing manages risk through a comprehensive counterparty risk management framework, which is comprised of policies, procedures, standards and financial resources. The level of regulatory capital is determined in accordance with Nasdaq Clearing’s regulatory capital policy, as approved by the SFSA. Regulatory capital calculations are continuously updated through a proprietary capital-at-risk calculation model that establishes the appropriate level of capital.

As mentioned above, Nasdaq Clearing is the legal counterparty for each contract traded and thereby guarantees the fulfillment of each contract. Nasdaq Clearing accounts for this guarantee as a performance guarantee. We determine the fair value of the performance guarantee by considering daily settlement of contracts and other margining and default fund requirements, the risk management program, historical evidence of default payments, and the estimated probability of potential default payouts. The calculation is determined using proprietary risk management software that simulates gains and losses based on historical market prices, extreme but plausible market scenarios, volatility and other factors present at that point in time for those particular unsettled contracts. Based on this analysis, the estimated liability was nominal and no liability was recorded as of December 31, 2016.

The market value of derivative contracts outstanding prior to netting was as follows:

	December 31, 2016
	(in millions)
Commodity and seafood options, futures and forwards(1)(2)(3)	$	613
Fixed-income options and futures(1)(2)	727
Stock options and futures(1)(2)	151
Index options and futures(1)(2)	116
Total	$	1,607

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(1)	We determined the fair value of our option contracts using standard valuation models that were based on market-

based observable inputs including implied volatility, interest rates and the spot price of the underlying instrument.

(2)	We determined the fair value of our futures contracts based upon quoted market prices and average quoted market yields.

(3)	We determined the fair value of our forward contracts using standard valuation models that were based on market-based observable inputs including LIBOR rates and the spot price of the underlying instrument.

The total number of derivative contracts cleared through Nasdaq Clearing for the years ended December 31, 2016 and 2015 was as follows:

	December 31, 2016			December 31, 2015
Commodity and seafood options, futures and forwards(1)	3,530,746			3,055,073
Fixed-income options and futures	14,639,065			19,631,917
Stock options and futures	28,496,143			33,455,560
Index options and futures	50,636,527			49,771,223
Total	97,302,481			105,913,773

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(1)	The total volume in cleared power related to commodity contracts was 1,658 Terawatt hours (TWh) for the year ended December 31, 2016 and 1,496 TWh for the year ended December 31, 2015.

The outstanding contract value of resale and repurchase agreements was $1.9 billion as of December 31, 2016 and $1.1 billion at December 31, 2015. The total number of contracts cleared was 7,941,666 for the year ended December 31, 2016 and was 7,908,873 for the year ended December 31, 2015.

Power of Assessment

To further strengthen the contingent financial resources of the clearinghouse, Nasdaq Clearing has power of assessment that provides the ability to collect additional funds from its clearing members to cover a defaulting member’s remaining obligations up to the limits established under the terms of the clearinghouse rules. The power of assessment corresponds to 100.0% of the clearing member’s aggregate contribution to the financial, commodities and seafood markets’ default funds.

Liability Waterfall

The liability waterfall is the priority order in which the capital resources would be utilized in the event of a default where the defaulting clearing member’s collateral would not be sufficient to cover the cost to settle its portfolio. If a default occurs and the defaulting clearing member’s collateral, including cash deposits and pledged assets, is depleted, then capital is utilized in the following amount and order:

•	junior capital contributed by Nasdaq Clearing, which totaled $18 million at December 31, 2016;

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•	a loss sharing pool related only to the financial market that is contributed to by clearing members and only applies if the defaulting member’s portfolio includes interest rate swap products;

•	specific market default fund where the loss occurred (i.e., the financial, commodities, or seafood market), which includes capital contributions of the clearing members on a pro-rata basis;

•	senior capital contributed to each specific market by Nasdaq Clearing, calculated in accordance with clearinghouse rules, which totaled $49 million at December 31, 2016; and

•	mutualized default fund, which includes capital contributions of the clearing members on a pro-rata basis.

If additional funds are needed after utilization of the mutualized default fund, then Nasdaq Clearing will utilize its power of assessment and additional capital contributions will be required by non-defaulting members up to the limits established under the terms of the clearinghouse rules.

17. Leases

We lease some of our office space under non-cancelable operating leases with third parties and sublease office space to third parties. Some of our lease agreements contain renewal options and escalation clauses based on increases in property taxes and building operating costs.

As of December 31, 2016, future minimum lease payments under non-cancelable operating leases (net of sublease income) are as follows:

	Gross Lease Commitments				Sublease Income				Net Lease Commitments
	(in millions)
Year ending December 31:
2017	$	76			$	3			$	73
2018	73				3				70
2019	67				3				64
2020	57				3				54
2021	46				3				43
Thereafter	113				5				108
Total future minimum lease payments	$	432			$	20			$	412

Rent expense for operating leases (net of sublease income of $4 million in 2016, $5 million in 2015 and $4 million in 2014) was $78 million in 2016, $88 million in 2015 and $93 million in 2014.

18. Commitments, Contingencies and Guarantees

Guarantees Issued and Credit Facilities Available

In addition to the default fund contributions and margin collateral pledged by clearing members discussed in Note 16, “Clearing Operations,” we have obtained financial guarantees and credit facilities which are guaranteed by us through counter indemnities, to provide further liquidity related to our clearing businesses. Financial guarantees issued to us totaled $13 million at December 31, 2016 and 2015. As discussed in “Other Credit Facilities,” of Note 9, “Debt Obligations,” credit facilities, which are available in multiple currencies, totaled $170 million at December 31, 2016 and $202 million at December 31, 2015, in available liquidity, none of which was utilized.

Execution Access is an introducing broker which operates the trading platform for our Fixed Income business to trade in U.S. Treasury securities. Execution Access has a clearing arrangement with Cantor Fitzgerald. As of December 31, 2016, we have contributed $20 million of clearing deposits to Cantor Fitzgerald in connection with this clearing arrangement. These deposits are recorded in other current assets in our Consolidated Balance Sheets. Some of the trading activity in Execution Access is cleared by Cantor Fitzgerald through the Fixed Income Clearing Corporation. Execution Access assumes the counterparty risk of clients that do not clear through the Fixed Income Clearing Corporation. Counterparty risk of clients exists for Execution Access between the trade date and the settlement date of the individual transactions, which is one business day. All of Execution Access’ obligations under the clearing arrangement with Cantor Fitzgerald are guaranteed by Nasdaq. Counterparties that do not clear through the Fixed Income Clearing Corporation are subject to a credit due diligence process and may be required to post collateral, provide principal letters, or provide other forms of credit enhancement to Execution Access for the purpose of mitigating counterparty risk.

We believe that the potential for us to be required to make payments under these arrangements is mitigated through the pledged collateral and our risk management policies. Accordingly, no contingent liability is recorded in the Consolidated Balance Sheets for these arrangements.

Lease Commitments

We lease some of our office space under non-cancelable operating leases with third parties and sublease office space to third parties. Some of our lease agreements contain renewal options and escalation clauses based on increases in property taxes and building operating costs.

Other Guarantees

We have provided other guarantees of $3 million as of December 31, 2016 and $11 million at December 31, 2015. These guarantees are primarily related to obligations for our rental and leasing contracts as well as performance guarantees on certain market technology contracts related to the delivery of software technology and support services. We have received

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financial guarantees from various financial institutions to support the above guarantees.

Through our clearing operations in the financial markets, Nasdaq Clearing is the legal counterparty for, and guarantees the performance of, its clearing members. See Note 16, “Clearing Operations,” for further discussion of Nasdaq Clearing performance guarantees.

We have provided a guarantee related to lease obligations for The Nasdaq Entrepreneurial Center, Inc. which is a not-for-profit organization designed to convene, connect and engage aspiring and current entrepreneurs. This entity is not included in the consolidated financial statements of Nasdaq.

We believe that the potential for us to be required to make payments under these arrangements is unlikely. Accordingly, no contingent liability is recorded in the Consolidated Balance Sheets for the above guarantees.

Non-Cash Contingent Consideration

As part of the purchase price consideration of a prior acquisition, we have agreed to future annual issuances of 992,247 shares of Nasdaq common stock which approximated certain tax benefits associated with the transaction. Such contingent future issuances of Nasdaq common stock will be paid ratably through 2027 if Nasdaq’s total gross revenues equal or exceed $25 million in each such year. The contingent future issuances of Nasdaq common stock are subject to anti-dilution protections and acceleration upon certain events.

Escrow Agreements

In connection with prior acquisitions, we entered into escrow agreements to secure the payment of post-closing adjustments and to ensure other closing conditions. At December 31, 2016, these escrow agreements provide for future payment of $31 million and are included in other current liabilities in the Consolidated Balance Sheets.

Routing Brokerage Activities

One of our broker-dealer subsidiaries, Nasdaq Execution Services, provides a guarantee to securities clearinghouses and exchanges under its standard membership agreements, which require members to guarantee the performance of other members. If a member becomes unable to satisfy its obligations to a clearinghouse or exchange, other members would be required to meet its shortfalls. To mitigate these performance risks, the exchanges and clearinghouses often require members to post collateral, as well as meet certain minimum financial standards. Nasdaq Execution Services’ maximum potential liability under these arrangements cannot be quantified. However, we believe that the potential for Nasdaq Execution Services to be required to make payments under these arrangements is unlikely. Accordingly, no contingent liability is recorded in the Consolidated Balance Sheets for these arrangements.

Litigation

As previously disclosed, we became a party to several legal and regulatory proceedings in 2012 and 2013 relating to the Facebook, Inc. IPO that occurred on May 18, 2012. As described in our Annual Report on Form 10-K for the year ended December 31, 2012, we were named as a defendant in a consolidated matter captioned In re Facebook, Inc., IPO Securities and Derivative Litigation, MDL No. 2389 (S.D.N.Y.). On December 27, 2016, the court of appeals affirmed the judgment of the district court approving the settlement the parties had reached in 2015.

As previously disclosed, we were named as a defendant in a putative class action, Rabin v. NASDAQ OMX PHLX LLC, et al., No. 15-551 (E.D. Pa.), filed in 2015 in the United States District Court for the Eastern District of Pennsylvania. On April 21, 2016, the court entered an order granting our motion to dismiss the complaint. The plaintiff appealed the dismissal to the Court of Appeals for the Third Circuit on May 18, 2016. Given that the complaint was dismissed at the preliminary stage of the proceeding, we are unable to estimate what, if any, liability may result from this litigation. However, we believe (as the district court concluded) that the claims are without merit, and we intend to defend the dismissal on appeal vigorously.

We also are named as one of many defendants in City of Providence v. BATS Global Markets, Inc., et al., 14 Civ. 2811 (S.D.N.Y.), which was filed on April 18, 2014 in the United States District Court for the Southern District of New York. The district court appointed lead counsel, who filed an amended complaint on September 2, 2014. The amended complaint names as defendants seven national exchanges, as well as Barclays PLC, which operated a private alternative trading system. On behalf of a putative class of securities traders, the plaintiffs allege that the defendants engaged in a scheme to manipulate the markets through high-frequency trading; the amended complaint asserts claims against us under Section 10(b) of the Exchange Act and Rule 10b-5, as well as under Section 6(b) of the Exchange Act. We filed a motion to dismiss the amended complaint on November 3, 2014. In response, the plaintiffs filed a second amended complaint on November 24, 2014, which names the same defendants and alleges essentially the same violations. We then filed a motion to dismiss the second amended complaint on January 23, 2015. On August 26, 2015, the district court entered an order dismissing the second amended complaint in its entirety with prejudice, concluding that most of the plaintiffs’ theories were foreclosed by absolute immunity and in any event that the plaintiffs failed to state any claim. The plaintiffs have appealed the judgment of dismissal to the United States Court of Appeals for the Second Circuit. The Second Circuit heard oral argument on August 24, 2016. On August 25, 2016, the Second Circuit issued an order requesting the SEC’s views on whether the district court had subject-matter jurisdiction over the case, and whether the defendants are immune from suit regarding the challenged conduct. The SEC filed its brief on November 28, 2016. The exchanges and plaintiffs filed supplemental briefs responding to the SEC’s brief on December 12, 2016. Given the preliminary

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nature of the proceedings, and particularly the fact that the complaints have been dismissed, we are unable to estimate what, if any, liability may result from this litigation. However, we believe (as the district court concluded) that the claims are without merit and will continue to litigate vigorously.

In addition, we were named as one of many exchange defendants in Lanier v. BATS Exchange Inc., et al., 14 Civ. 3745 (S.D.N.Y.), Lanier v. BATS Exchange Inc., et al., 14 Civ. 3865 (S.D.N.Y.), and Lanier v. Bats Exchange Inc., 14 Civ. 3866 (S.D.N.Y.), which were filed between May 23, 2014 and May 30, 2014 in the United States District Court for the Southern District of New York. The plaintiff is the same in each of these cases, and the three complaints contain substantially similar allegations. On behalf of a putative class of subscribers for market data provided by national exchanges, the plaintiff alleges that the exchanges provided data more quickly to certain market participants than to others, supposedly in breach of the exchanges’ plans for dissemination of market data and subscriber agreements executed under those plans. The complaint asserts contractual theories under state law based on these alleged breaches. On September 29, 2014, we filed a motion to dismiss the complaints. On April 28, 2015, the district court entered an order dismissing the complaints in their entirety with prejudice, concluding that they are foreclosed by the Exchange Act and in any event do not state a claim under the contracts. The plaintiff appealed the judgment of dismissal to the United States Court of Appeals for the Second Circuit. On September 23, 2016, the Second Circuit issued an opinion affirming the district court’s dismissal of all three complaints, concluding that many of plaintiff’s claims were preempted, that plaintiff failed to state a claim for breach of contract, and that, insofar as plaintiff alleged that the exchanges’ implementation or operation of certain plans under Regulation NMS violates the Exchange Act, plaintiff was required to exhaust his administrative remedies before the SEC. Plaintiff filed a petition for panel or en banc rehearing before the Second Circuit on October 7, 2016, in one of the three appeals. The Second

Circuit denied the petition on November 4, 2016. Plaintiff did not file a petition for certiorari with the United States Supreme Court by the February 2, 2017 deadline.

Except as disclosed above and in prior reports filed under the Exchange Act, we are not currently a party to any litigation or proceeding that we believe could have a material adverse effect on our business, consolidated financial condition, or operating results. However, from time to time, we have been threatened with, or named as a defendant in, lawsuits or involved in regulatory proceedings.

Tax Audits

We are engaged in ongoing discussions and audits with taxing authorities on various tax matters, the resolutions of which are uncertain. Currently, there are matters that may lead to assessments, some of which may not be resolved for several years. Based on currently available information, we believe we have adequately provided for any assessments that could result from those proceedings where it is more likely than not that we will be assessed. We review our positions on these matters as they progress.

19. Business Segments

We manage, operate and provide our products and services in four business segments: Market Services, Corporate Services, Information Services and Market Technology. See Note 1, “Organization and Nature of Operations,” for further discussion of our reportable segments.

Our management allocates resources, assesses performance and manages these businesses as four separate segments. We evaluate the performance of our segments based on several factors, of which the primary financial measure is operating income. Results of individual businesses are presented based on our management accounting practices and structure.

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The following table presents certain information regarding our operating segments for the years ended December 31, 2016, 2015 and 2014:

	Market Services				Corporate Services				Information Services				Market Technology				Corporate Items				Consolidated
	(in millions)
2016
Total revenues	$	2,255			$	635			$	540			$	275			$	—			$	3,705
Transaction-based expenses	(1,428		)		—				—				—				—				(1,428		)
Revenues less transaction-based expenses	827				635				540				275				—				2,277
Depreciation and amortization	87				47				18				18				—				170
Operating income (loss)	450				158				383				69				(221		)		839
Total assets	8,626				1,263				2,439				559				1,263				14,150
Purchase of property and equipment	62				37				8				27				—				134
2015
Total revenues	$	2,084			$	562			$	512			$	245			$	—			$	3,403
Transaction-based expenses	(1,313		)		—				—				—				—				(1,313		)
Revenues less transaction-based expenses	771				562				512				245				—				2,090
Depreciation and amortization	64				42				14				18				—				138
Operating income (loss)	413				140				365				58				(256		)		720
Total assets	6,906				576				2,456				752				1,171				11,861
Purchase of property and equipment	53				38				11				31				—				133
2014
Total revenues	$	2,229			$	552			$	473			$	246			$	—			$	3,500
Transaction-based expenses	(1,433		)		—				—				—				—				(1,433		)
Revenues less transaction-based expenses	796				552				473				246				—				2,067
Depreciation and amortization	80				25				13				19				—				137
Operating income (loss)	413				121				348				49				(177		)		754
Total assets	7,437				747				2,296				599				992				12,071
Purchase of property and equipment	50				43				12				35				—				140

Certain amounts are allocated to corporate items in our management reports based on the decision that those activities should not be used to evaluate the segment’s ongoing operating performance. The following items are allocated to corporate items for segment reporting purposes:

Amortization expense of acquired intangible assets: We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations. As such, if intangible asset amortization is included in performance measures, it is more difficult to assess the day-to-day operating performance of the segments, and the relative operating performance of the segments between periods. Management does not consider intangible asset amortization expense for the purpose of evaluating the performance of our segments or their managers or when making decisions to allocate resources. Therefore, we believe performance measures excluding intangible asset amortization expense provide management with a more useful representation of our segment’s ongoing activity in each period.

Restructuring charges: Restructuring charges are associated with our 2015 restructuring plan to improve performance, cut costs and reduce spending and are primarily related to (i) the rebranding of our company name from The NASDAQ OMX Group, Inc. to Nasdaq, Inc., (ii) severance and other termination benefits, (iii) costs to vacate duplicate facilities, and (iv) asset impairment charges. We do not allocate these restructuring costs because they do not contribute to a meaningful evaluation of a particular segment’s ongoing operating performance.

Merger and strategic initiatives expense: We have pursued various strategic initiatives and completed a number of acquisitions in recent years which have resulted in expenses which would not have otherwise been incurred. These expenses include integration costs, as well as legal, due diligence and other third party transaction costs. The frequency and the amount of such expenses vary significantly based on the size, timing and complexity of the transaction. Accordingly, we do not allocate these costs for purposes of disclosing segment results because they do not contribute to a meaningful evaluation of a particular segment’s ongoing operating performance.

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Other significant items: We have excluded certain other charges or gains that are the result of other non-comparable events to measure operating performance. For 2016, other significant items primarily included costs associated with the acceleration of previously granted equity awards due to the retirement of our former CEO, a regulatory fine received by our exchange in Stockholm and Nasdaq Clearing, and the release of a sublease loss reserve due to the early exit of a facility. For 2015, other

significant items included the reversal of a VAT refund and for 2014 other significant items included loss on extinguishment of debt. We believe the exclusion of such amounts allows management and investors to better understand the financial results of Nasdaq.

---

A summary of our corporate items are as follows:

	December 31,
	2016				2015				2014
	(in millions)
Amortization expense of acquired intangible assets	$	82			$	62			$	69
Restructuring charges	41				172				—
Merger and strategic initiatives expense	76				10				81
Executive compensation	12				—				—
Regulatory matter	6				—				—
Sublease loss reserve	(1		)		—				11
Reversal of VAT refund receivables	—				12				—
Loss on extinguishment of debt	—				—				11
Other charges	5				—				5
Total	$	221			$	256			$	177

The change in total assets as shown in the table above at December 31, 2016 compared with 2015 and 2015 compared with 2014 is as follows:

Total assets increased $2,289 million at December 31, 2016 compared with December 31, 2015 primarily due to new regulatory rules in 2016 that require all collateral pledged by members of our Nasdaq Clearing business to be recorded on the balance sheet and an increase in goodwill associated with our 2016 acquisitions, partially offset by a pre-tax, non-cash intangible asset impairment charge of $578 million to write off the full value of the eSpeed trade name. For further discussion of the impairment charge, see “Intangible Asset Impairment Charges,” of Note 5, “Goodwill and Acquired Intangible Assets.” Total assets decreased $210 million at December 31, 2015 compared with December 31, 2014 primarily due to a decrease in goodwill and intangible assets, net reflecting the impact of changes in foreign exchange rates and amortization. In addition, as discussed in “Intangible Asset Impairment Charges,” of Note 5, “Goodwill and Acquired Intangible Assets,” the decrease is also due to a $119 million pre-tax, non-cash indefinite-lived intangible asset impairment charge recorded in 2015. These decreases were partially offset by an increase in non-current deferred tax assets primarily due to the income tax benefits of net foreign currency translation losses which are recorded in accumulated other comprehensive loss within stockholders’ equity in the Consolidated Balance Sheets.

For further discussion of our segments’ results, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Segment Operating Results.”

Geographic Data

The following table presents total revenues and property and equipment, net by geographic area for 2016, 2015 and 2014. Revenues are classified based upon the location of the customer. Property and equipment information is based on the physical location of the assets.

	Total Revenues				Property and Equipment, Net
	(in millions)
2016:
United States	$	2,659			$	244
All other countries	1,046				118
Total	$	3,705			$	362
2015:
United States	$	2,408			$	217
All other countries	995				106
Total	$	3,403			$	323
2014:
United States	$	2,524			$	198
All other countries	976				94
Total	$	3,500			$	292

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Our property and equipment, net for all other countries primarily includes assets held in Sweden.

No single customer accounted for 10.0% or more of our revenues in 2016, 2015 and 2014.

Corporate Services and Market Technology Segments - Summary Financial Information

Due to changes in our executive leadership and to better reflect how our chief operating decision maker views the businesses, Nasdaq realigned its segment reporting, as first applied in 2016, to integrate the Listing Services and Corporate Solutions businesses into a single Corporate Services segment. Market Technology is now a separate reportable segment. The table below presents certain recast historical financial information for these segments for the past eight quarters:

Corporate Services
	2016								2015
	Revenues				Operating Income				Revenues				Operating Income
	(in millions)
First quarter	$	143			$	34			$	139			$	32
Second quarter	162				41				142				37
Third quarter	162				42				138				36
Fourth quarter	167				41				143				36
Market Technology
	2016								2015
	Revenues				Operating Income				Revenues				Operating Income
	(in millions)
First quarter	$	57			$	10			$	55			$	10
Second quarter	69				17				59				11
Third quarter	73				19				59				12
Fourth quarter	77				23				71				23

20. Subsequent Events

Chief Executive Officer

Effective January 1, 2017, Adena T. Friedman became the President and Chief Executive Officer of Nasdaq.

Asset Impairment

On January 30, 2017, Nasdaq’s board of directors approved a pre-tax, non-cash intangible asset impairment charge of $578 million related to the full write-off of the eSpeed trade name. See “Intangible Asset Impairment Charges,” of Note 5, “Goodwill and Acquired Intangible Assets,” for further discussion.

Nasdaq NLX

On January 30, 2017, Nasdaq’s board of directors approved the decision to wind down Nasdaq NLX, our London-based multilateral trading venue.

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Exhibit Index

Exhibit Number
2.1		Purchase Agreement, dated as of April 1, 2013, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), BGC Partners, Inc., BGC Holdings, L.P., BGC Partners, L.P., and, solely for purposes of certain sections thereof, Cantor Fitzgerald, L.P. (incorporated herein by reference to Exhibit 2.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 filed on August 8, 2013).
2.2		Stock Purchase Agreement, dated as of March 9, 2016, by and among Deutsche Börse AG and Eurex Frankfurt AG and Nasdaq, Inc. (incorporated herein by reference to the Current Report on Form 8-K filed on March 15, 2016).
3.1		Amended and Restated Certificate of Incorporation of Nasdaq (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on January 28, 2014).
3.1.1		Certificate of Elimination of Nasdaq’s Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 3.1.1 to the Current Report on Form 8-K filed on January 28, 2014).
3.1.2		Certificate of Amendment of Nasdaq’s Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on November 19, 2014).
3.1.3		Certificate of Amendment of Nasdaq’s Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on September 8, 2015).
3.2		Nasdaq’s By-Laws (incorporated herein by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on November 21, 2016).
4.1		Form of Common Stock certificate (incorporated herein by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 filed on November 4, 2015).
4.2		Stockholders’ Agreement, dated as of February 27, 2008, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Borse Dubai Limited (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on March 3, 2008).
4.2.1		First Amendment to Stockholders’ Agreement, dated as of February 19, 2009, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Borse Dubai Limited (incorporated herein by reference to Exhibit 4.10.1 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).
4.3		Registration Rights Agreement, dated as of February 27, 2008, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), Borse Dubai Limited and Borse Dubai Nasdaq Share Trust (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on March 3, 2008).
4.3.1		First Amendment to Registration Rights Agreement, dated as of February 19, 2009, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), Borse Dubai Limited and Borse Dubai Nasdaq Share Trust (incorporated herein by reference to Exhibit 4.11.1 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).
4.4		Indenture, dated as of January 15, 2010, between Nasdaq (f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on January 19, 2010).

4.5		First Supplemental Indenture, dated as of January 15, 2010, among Nasdaq (f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on January 19, 2010).
4.6		Second Supplemental Indenture, dated as of December 21, 2010, among Nasdaq (f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on December 21, 2010).
4.7		Stockholders’ Agreement, dated as of December 16, 2010, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Investor AB (incorporated herein by reference to Exhibit 4.12 to the Annual Report on Form 10-K for the year ended December 31, 2010 filed on February 24, 2011).
4.8		Indenture, dated as of June 7, 2013, between Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on June 10, 2013).
4.9		First Supplemental Indenture, dated as of June 7, 2013, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), Wells Fargo Bank, National Association, as Trustee, Deutsche Bank AG, London Branch, as paying agent, and Deutsche Bank Luxembourg S.A., as registrar and transfer agent (incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on June 10, 2013).
4.10		Second Supplemental Indenture, dated as of May 29, 2014, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.) and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on May 30, 2014).
4.11		Third Supplemental Indenture, dated as of May 20, 2016, among Nasdaq, Inc., Wells Fargo Bank, National Association, as Trustee, and HSBC Bank USA, National Association, as paying agent and as registrar and transfer agent (incorporated herein by reference to the Current Report on Form 8-K filed on May 23, 2016).
4.12		Fourth Supplemental Indenture, dated as of June 7, 2016, among Nasdaq, Inc. and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to the Current Report on Form 8-K filed on June 7, 2016).
4.13		Registration Rights Agreement, dated as of June 28, 2013, by and among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), BGC Partners, Inc., BGC Holdings, L.P. and BGC Partners, L.P. (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 1, 2013).
10.1		Amended and Restated Board Compensation Policy, amended and restated on November 14, 2016.*
10.2		Nasdaq Executive Corporate Incentive Plan, effective as of January 1, 2015 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 11, 2015).*
10.3		Form of Nasdaq Non-Qualified Stock Option Award Certificate (incorporated herein by reference to Exhibit 10.3 to the Annual Report on Form 10-K for the year ended December 31, 2010 filed on February 24, 2011).*
10.4		Form of Nasdaq Restricted Stock Unit Award Certificate (employees) (incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed on August 3, 2016).*
10.5		Form of Nasdaq Restricted Stock Unit Award Certificate (directors) (incorporated herein by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed on August 3, 2016).*
10.6		Form of Nasdaq One-Year Performance Share Unit Agreement (incorporated herein by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed on August 3, 2016).*

10.7		Form of Nasdaq Three-Year Performance Share Unit Agreement (incorporated herein by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed on August 3, 2016).*
10.8		Amended and Restated Supplemental Executive Retirement Plan, dated as of December 17, 2008 (incorporated herein by reference to Exhibit 10.6 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).*
10.8.1		Amendment No. 1 to Amended and Restated Supplemental Executive Retirement Plan, effective as of December 31, 2008 (incorporated herein by reference to Exhibit 10.6.1 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).*
10.9		Nasdaq Supplemental Employer Retirement Contribution Plan, dated as of December 17, 2008 (incorporated herein by reference to Exhibit 10.7 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).*
10.10		Employment Agreement between Nasdaq and Adena Friedman, made and entered into on November 14, 2016 and effective as of January 1, 2017.*
10.11		Employment Agreement between Nasdaq and Robert Greifeld, effective as of February 22, 2012 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 28, 2012).*
10.11.1		Memorandum of Understanding between Nasdaq and Robert Greifeld, dated as of December 11, 2012 (incorporated herein by reference to Exhibit 10.10.1 to the Annual Report on Form 10-K for the year ended December 31, 2012 filed on February 21, 2013).*
10.11.2		Amendment to the Employment Agreement between Nasdaq and Robert Greifeld, entered into and effective as of November 14, 2016.*
10.12		Nonqualified Stock Option Agreement between Nasdaq and Robert Greifeld reflecting June 30, 2009 grant (incorporated herein by reference to Exhibit 10.11 to the Annual Report on Form 10-K for the year ended December 31, 2009 filed on February 18, 2010).*
10.13		Employment Agreement between Nasdaq and Hans-Ole Jochumsen, made and entered into and effective on August 5, 2014 (incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 filed on November 5, 2014).*
10.13.1		Amendment One to the Employment Agreement between Nasdaq, Nasdaq International Ltd and Hans-Ole Jochumsen, entered into and effective as of January 1, 2017.*
10.14		Employment Agreement between Nasdaq and Edward Knight, effective as of December 29, 2000 (incorporated herein by reference to Exhibit 10.14 to the Annual Report on Form 10-K for the year ended December 31, 2002 filed on March 31, 2003).*
10.14.1		First Amendment to Employment Agreement between Nasdaq and Edward Knight, effective February 1, 2002 (incorporated herein by reference to Exhibit 10.14.1 to the Annual Report on Form 10-K for the year ended December 31, 2002 filed on March 31, 2003).*
10.14.2		Second Amendment to Employment Agreement between Nasdaq and Edward Knight, effective as of December 31, 2008 (incorporated herein by reference to Exhibit 10.13.2 to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on February 27, 2009).*
10.14.3		Third Amendment to Employment Agreement between Nasdaq and Edward Knight, effective as of February 22, 2012 (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on February 28, 2012).*

10.14.4		Fourth Amendment to Employment Agreement between Nasdaq and Edward Knight, entered into and effective as of October 24, 2016.*
10.15		Employment Agreement between Nasdaq and Bradley J. Peterson, dated August 1, 2016 (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 filed on November 8, 2016).*
10.16		General Release and Retirement Agreement between Nasdaq and Lee Shavel, effective January 26, 2016 (incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 filed on May 5, 2016).*
10.17		General Release and Retirement Agreement between Nasdaq and Ronald Hassen, dated September 15, 2016.*
10.18		Nasdaq Change in Control Severance Plan for Executive Vice Presidents and Senior Vice Presidents, effective November 26, 2013 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 29, 2013).*
10.19		Credit Agreement, dated as of November 24, 2014, among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), Bank of America, N.A., JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as Swingline Lenders, the other Lenders party thereto and Bank of America, N.A., as Administrative Agent and Issuing Bank (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 1, 2014).
10.19.1		Amendment No. 1, dated as of September 28, 2015, to the Credit Agreement among Nasdaq, Inc. (f/k/a The NASDAQ OMX Group, Inc.), the lenders party thereto and Bank of America, N.A., as Administrative Agent, a Swingline Lender and Issuing Bank (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 filed on November 4, 2015).
10.20		Credit Agreement, dated March 17, 2016, among Nasdaq, Inc., the various lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to the Current Report on Form 8-K filed on March 22, 2016).
11		Statement regarding computation of per share earnings (incorporated herein by reference from Note 14 to the consolidated financial statements under Part II, Item 8 of this Form 10-K).
12.1		Computation of Ratio of Earnings to Fixed Charges.
21.1		List of all subsidiaries.
23.1		Consent of Ernst & Young LLP.
24.1		Powers of Attorney.
31.1		Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”).
31.2		Certification of Executive Vice President, Corporate Strategy and Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley.
32.1		Certifications Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley.
101.INS		XBRL Instance Document.**

101.SCH		XBRL Taxonomy Extension Schema.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase.
101.DEF		Taxonomy Extension Definition Linkbase.
101.LAB		XBRL Taxonomy Extension Label Linkbase.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase.

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*	Management contract or compensatory plan or arrangement.

**

The following materials from the Nasdaq, Inc. Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015; (ii) Consolidated Statements of Income for the years ended December 31, 2016, 2015 and 2014; (iii) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2016, 2015 and 2014; (iv) Consolidated Statements of Changes in Equity for the years ended December 31, 2016, 2015 and 2014; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014; and (vi) notes to consolidated financial statements.