What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-02-02 compared with 2022-02-03 · 322 added, 314 removed, 748 unchanged (46% of the section changed)

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residential mortgages, provide our customers with access to mission critical tools that are designed to increase asset class transparency and workflow efficiency.

We report our results in three segments:

Exchanges, Fixed Income and Data Services, and Mortgage Technology.

The majority of our identifiable assets are located in the U.S.

• In our Exchanges segment, we operate regulated marketplaces for the listing, trading and clearing of a broad array of derivatives contracts and financial securities.

• In our Fixed Income and Data Services segment, we provide fixed income pricing, reference data, indices, analytics and execution services as well as global CDS clearing and multi-asset class data delivery solutions.

• In our Mortgage Technology segment, we provide an end-to-end technology platform that offers customers comprehensive, digital workflow tools that aim to address the inefficiencies that exist in the U.S.

residential mortgage market.

We report our results in the following three segments:

We operate regulated marketplaces for the listing, trading and clearing of a broad array of derivatives contracts and financial securities.

• Fixed Income and Data Services:

We provide fixed income pricing, reference data, indices, analytics and execution services as well as global CDS clearing and multi-asset class data delivery solutions.

• Mortgage Technology:

We provide a technology platform that offers customers comprehensive, digital workflow tools that aim to address the inefficiencies that exist in the U.S.

residential mortgage market, from application through closing and the secondary market.

Recent Developments

Bakkt Transaction

On October 15, 2021, Bakkt Holdings, LLC, or Bakkt, completed its merger with VPC Impact Acquisition Holdings, or VIH, a special purpose acquisition company sponsored by Victory Park Capital, or VPC.

Bakkt is an integrated platform that enables customers and consumers to transact in digital assets.

The business combination between Bakkt and VIH resulted in enterprise value of approximately $2.1 billion, including approximately $479 million of cash on the combined company’s balance sheet, reflecting a contribution of up to $123 million of cash held in VIH’s trust account, and a $325 million concurrent private investment in public equity, or PIPE, of Class A common stock of the combined company and $31 million of cash held in Bakkt accounts.

The PIPE was priced at $10.00 per share and included a $47 million commitment from us.

The newly combined company has been renamed Bakkt Holdings, Inc.

and is listed on the New York Stock Exchange, or NYSE.

As part of the transaction, Bakkt’s existing equity holders and management rolled 100% of their equity into the combined company, and are subject to a six-month lockup period.

Certain shareholders of VIH exercised their redemption rights, and at closing, Bakkt equity holders, including ICE, owned approximately 81% of the combined company, VIH’s public shareholders owned approximately 5%, VPC owned 2%, and PIPE investors (a group that also includes us) owned approximately 12% of the issued and outstanding common stock of the combined company.

Following completion of the business combination, we initially held a 68% economic interest and a minority voting interest in the combined company.

Prior to the closing, Bakkt revenues and operating expenses were reported within our consolidated revenues and operating expenses.

Following the closing, as a consequence of holding a minority voting interest in the combined company, during the fourth quarter of 2021 we deconsolidated Bakkt and treat it as an equity method investment within our financial statements.

We recorded a gain on the transaction of $1.4 billion during the fourth quarter of 2021, which is included in other non-operating income within our consolidated income statement.

For the three

months ended December 31, 2021, we recorded estimated equity losses of ($92 million) related to our investment in Bakkt.

Since March 2020, the coronavirus (COVID-19) pandemic has created economic and financial disruptions globally and has led governmental authorities to take unprecedented measures to mitigate the spread of the disease, including travel bans, border closings, business closures, quarantines and shelter-in-place orders, and to take actions designed to stabilize markets and promote economic growth.

From an operational perspective, our businesses, including our exchanges, clearing houses, listing venues, data services businesses, and mortgage platforms, have remained open and we do not have any plans to close any of our business operations as a result of the COVID-19 pandemic.

However, due to the COVID-19 pandemic, we have taken preventative measures and implemented contingency plans, and many of our employees are continuing to work remotely.

We believe that our global office closures and phased re-opening measures were and continue to be in compliance, as necessary, with local government directives and social distancing directives.

We continue to monitor local government mandates in determining our office re-openings, re-closures and work-related travel.

Global health concerns relating to COVID-19 and preventive measures taken to reduce its spread have created significant volatility in financial markets, which has resulted in higher trading volumes for some of our products and increased demand for our services.

The extent of the impact of the pandemic on our business will depend on future developments, including the duration, spread and severity of the outbreak, the effectiveness of vaccines against COVID-19 over the long term and against new and emerging variants thereof, and the actions taken to contain the spread of the disease or mitigate its impact.

We continue to monitor this dynamic situation, including guidance and regulations issued by U.S.

and other governmental authorities.

In light of the continually evolving nature of the COVID-19 outbreak, we are not able at this time to estimate the ultimate effect of the pandemic on our business, results of operations or financial condition in the future.

Pending Acquisition of Black Knight, Inc.

On May 4, 2022, we announced that we had entered into a definitive agreement to acquire Black Knight, Inc., or Black Knight, a software, data and analytics company that serves the housing finance continuum, including real estate data, mortgage lending and servicing, as well as the secondary markets.

Pursuant to that certain Agreement and Plan of Merger, dated as of May 4, 2022, among ICE, Sand Merger Sub Corporation, a wholly owned subsidiary of ICE, or Sub, and Black Knight, which we refer to as the “merger agreement,” Sub will merge with and into Black Knight, which we refer to as the “merger,” with Black Knight surviving as a wholly owned subsidiary of ICE.

As of May 4, 2022, the transaction was valued at approximately $13.1 billion, or $85 per share of Black Knight common stock, with cash comprising 80% of the value of the aggregate transaction consideration and shares of our common stock comprising 20% of the value of the

aggregate transaction consideration at that time.

The aggregate cash component of the transaction consideration is fixed at $10.5 billion, and the value of the aggregate stock component of the transaction consideration will fluctuate with the market price of our common stock and will be determined based on the average of the volume weighted averages of the trading prices of our common stock on each of the ten consecutive trading days ending three trading days prior to the closing of the merger.

This transaction builds on our position as a provider of electronic workflow solutions for the rapidly evolving U.S.

residential mortgage industry.

Black Knight provides a comprehensive and integrated ecosystem of software, data and analytics solutions serving the real estate and housing finance markets.

We believe the Black Knight ecosystem adds value for clients of all sizes across the mortgage and real estate lifecycles by helping organizations lower costs, increase efficiencies, grow their businesses, and reduce risk.

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

The transaction is expected to close in the first half of 2023 following the receipt of regulatory approvals and the satisfaction of customary closing conditions.

Global Market Conditions

Our results of operations are affected by global economic conditions, including macroeconomic conditions and geopolitical events or conflicts.

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

Our business has been impacted positively and negatively by these global economic conditions.

For instance, due to market volatility and rising interest rates, we have seen increased trading across a number of our products, such as interest rate and equity futures, credit default swaps and bonds.

Conversely, increases in mortgage interest rates in 2022 have resulted in reduced consumer and investor demand for mortgages and adversely impacted the transaction-based revenues in our Mortgage Technology segment.

We have suspended all services in Russia except for limited offerings to non-sanctioned entities.

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

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

Tax Policy Changes

In July and August 2022, the CHIPS and Science Act, or CHIPS, and the Inflation Reduction Act of 2022, or IRA, were signed into law.

The IRA introduced a 15% corporate alternative minimum tax, or CAMT, on adjusted financial statement income for corporations with profits in excess of $1 billion, effective for tax years after December 31, 2022.

While further guidance on the implementation of the CAMT is expected, we do not expect it will have a material impact to our 2023 effective tax rate.

We also do not expect that CHIPS will have a material impact.

The IRA also includes a stock buyback excise tax of 1% on share repurchases, which will apply to net stock buybacks after December 31, 2022.

We do not expect this to have a material impact once share repurchases are resumed.

The Organization for Economic Cooperation and Development, or OECD/G20, has proposed the introduction of a global minimum tax rate at 15%.

Consultations are ongoing and while we expect increased tax compliance requirements, we do not expect a material impact to our effective tax rate given our current tax profile.

Consolidated Financial Highlights

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$ 7,292 $ 7,146 2 % $ 7,146 $ 6,036 18 %

Recurring revenues (1)

$ 3,721 $ 3,509 6 % $ 3,509 $ 2,923 20 %

Transaction revenues, net (1)

$ 3,571 $ 3,637 (2) % $ 3,637 $ 3,113 17 %

Operating expenses $ 3,654 $ 3,697 (1) % $ 3,697 $ 3,003 23 %

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Operating margin

48 % 50 % (2 pts) 50 % 51 % (1 pt)

50 % 48 % 2 pts 48 % 50 % (2 pts)

Adjusted operating margin (2)

59 % 58 % 1 pt 58 % 59 % (1 pt)

Other income (expense), net

$ 2,249 $ (267) n/a $ (267) $ (192) 39 %

Other income/(expense), net $ (1,830) $ 2,249 n/a $ 2,249 $ (267) n/a

Income tax expense $ 310 $ 1,629 (81) % $ 1,629 $ 658 148 %

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

(1) We define recurring revenues as the portion of our revenues that are generally predictable, stable, and can be expected to occur at regular intervals in the future with a relatively high degree of certainty and visibility.

We define transaction revenues as those associated with a more specific point-in-time service, such as trade execution.

(2) The adjusted figures exclude items that are not reflective of our ongoing core operations and business performance.

Adjusted net income attributable to ICE and adjusted diluted earnings per share attributable to ICE common stockholders are presented net of taxes.

These adjusted numbers are not calculated in accordance with U.S.

These adjusted figures are not calculated in accordance with U.S.

Generally Accepted Accounting Principles, or GAAP.

See “- Non-GAAP Financial Measures” below.

• Revenues, less transaction-based expenses, increased $1.1 billion in 2021 from 2020.

The increase in revenues includes $44 million in favorable foreign exchange effects arising from the weaker U.S.

dollar in 2021 from 2020.

• Revenues, less transaction-based expenses, increased $146 million in 2022 from 2021.

The increase in revenues includes $115 million in unfavorable foreign exchange effects arising from the stronger U.S.

dollar in 2022 from 2021.

• Revenues, less transaction-based expenses, increased $1.1 billion in 2021 from 2020.

The increase in revenues includes $44 million in favorable foreign exchange effects arising from the weaker U.S.

dollar in 2021 from 2020.

• Operating expenses increased $694 million in 2021 from 2020.

The increase in operating expenses includes $22 million in unfavorable foreign exchange effects arising from the weaker U.S.

• Operating expenses decreased $43 million in 2022 from 2021.

The decrease in operating expenses includes $38 million in favorable foreign exchange effects arising from the stronger U.S.

dollar in 2022 from 2021.

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dollar in 2021 from 2020.

• Other income/(expense), net, in 2022 primarily includes our share of estimated equity method investment losses and an impairment charge on our investment in Bakkt to its fair value, of $1.4 billion, a net gain on the sale of our Euroclear plc, or Euroclear, stake of $41 million, interest income of $108 million and interest expense of $616 million.

• Other income/(expense), net, in 2021 primarily includes our gain on the Bakkt transaction of $1.4 billion, our gain on the sale of our Coinbase Global, Inc., or Coinbase, investment of $1.2 billion, equity earnings in OCC of $51 million, estimated equity losses in our investment in Bakkt during the post-merger period of $92 million, dividend income from Euroclear plc, or Euroclear, of $60 million, a fair value adjustment gain on our Euroclear investment of $34 million and interest expense of $423 million.

• Other income (expense), net, in 2020 primarily includes interest expense of $357 million, equity earnings in OCC of $71 million, an accrual for potential legal settlements of $30 million, a fair value adjustment gain on our Euroclear investment of $35 million, and gain on the sale of our BIDS Trading, LP, or BIDS, investment of $20 million.

• The effective tax rate in 2021 is higher than the effective tax rate in 2020 primarily due to the deferred income tax impacts resulting from the U.K.

tax law changes as well as the Bakkt transaction.

In June 2021, the U.K.

• The effective tax rate in 2022 was lower than the effective tax rate in 2021 primarily due to the deferred income tax benefit from the impairment to our equity method investment in Bakkt in the current year, and the deferred income tax expense from the U.K.

tax law changes in the prior year.

• The effective tax rate in 2021 was higher than the effective tax rate in 2020 primarily due to the deferred income tax impacts resulting from the U.K.

tax law changes.

In 2021, the U.K.

enacted a corporate income tax rate increase from 19% to 25% effective April 1, 2023.

• The effective tax rate in 2020 was higher than the effective tax rate in 2019 primarily due to U.K.

tax law changes enacted in July 2020, partially offset by favorable state apportionment changes as a result of our acquisition of Ellie Mae, as well as favorable changes in certain international tax provisions as part of the U.S.

Federal Tax Cuts and Jobs Act, or TCJA, in 2019.

In 2020, the UK enacted a corporate income tax rate increase from 17% to 19% effective April 1, 2020.

Business Environment and Market Trends

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• growing customer demand for workflow efficiency and automation;

• commodity, interest rate and financial markets uncertainty;

• commodity, interest rate, inflation rate and financial markets volatility and uncertainty;

• growing demand for data to inform customers' risk management and investment decisions;

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As the evolution continues, legislative and regulatory actions may change the way we conduct our business and may create uncertainty for market participants, which could affect trading volumes or demand for market data.

As a result, it is difficult to predict all of the effects that the legislation and its implementing regulations will

As discussed more fully in Item 1 “- Business - Regulation” included in this Annual Report, Brexit, the implementation of MiFID II and other regulations may result in operational, regulatory and/or business risk.

As a result, it is difficult to predict all of the effects that the legislation and its implementing regulations will have on us.

As discussed more fully in Item 1 “- Business - Regulation” included in this Annual Report, Brexit, MiFID II and other regulations have resulted in operational, regulatory and/or business risk.

We have diversified our business so that we are not dependent on volatility or transaction activity in any one asset class.

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Segment Results

Our business is conducted through three reportable business segments, comprised of the following:

• Our Exchanges segment includes our trade execution and clearing within our global futures network and NYSE businesses, various data and connectivity services that are directly related to those exchange platforms, administration fees and our NYSE listings business.

Trade execution and clearing products include energy, agricultural and metals, financial futures and options, cash equities, equity options, OTC and other;

• Our Fixed Income and Data Services segment includes pricing and reference data, analytics, indices, trade execution and clearing within our ICE Bonds and CDS businesses, consolidated feeds and our ICE Global Network businesses;

• Our Mortgage Technology segment includes origination technology, closing solutions, data and analytics and other mortgage technology businesses.

Our business is conducted through three reportable business segments:

Exchanges, Fixed Income and Data Services and Mortgage Technology.

Segments are discussed more in detail in "Item 1- Business".

While revenues are recorded specifically in the segment in which they are earned or to which they relate, a significant portion of our operating expenses are not solely related to a specific segment because the expenses serve functions that are necessary for the operation of more than one segment.

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Our segments do not engage in intersegment transactions.

Beginning in the first quarter of 2021, origination technology revenues include those related to our ICE Mortgage Technology network (previously reported in closing solutions revenues) and closing solutions revenues now include registration revenues related to MERSCORP Holdings, Inc., or MERS, (previously reported in other revenues).

We believe these changes more accurately reflect how we operate the business.

Prior-year periods have been adjusted to reflect these changes.

For details on trends in recent prior-year periods, refer to our 2021 and 2020 Annual Reports on Form 10-K.

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(1) The adjusted figures in the charts above are calculated by excluding items that are not reflective of our cash operations and core business performance.

As a result, these adjusted numbers are not calculated in accordance with U.S.

As a result, these adjusted figures are not calculated in accordance with U.S.

See “- Non-GAAP Financial Measures” below.

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Depreciation and amortization 240 244 (2) 244 261 (7)

Acquisition-related transaction and integration costs 61 16 287 16 1 n/a

Acquisition-related transaction and integration costs 1 61 (99) 61 16 287

Operating expenses 1,209 1,333 (9) 1,333 1,242 7

Operating income $ 2,862 $ 2,523 13 % $ 2,523 $ 2,389 6 %

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

Recurring revenues $ 1,392 $ 1,317 6 % $ 1,317 $ 1,236 7 %

Transaction revenues, net $ 2,679 $ 2,539 6 % $ 2,539 $ 2,395 6 %

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

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Our per-contract transaction and clearing revenues will depend upon many factors, including, but not limited to, market conditions, transaction and clearing volume, product mix, pricing, applicable revenue sharing and market making agreements, and new product introductions.

Because transaction and clearing revenues are generally assessed on a per-contract basis, revenues and profitability fluctuate with changes in contract volume and product mix.

Transaction and clearing revenues are generally assessed on a per-contract basis and revenues and profitability fluctuate with changes in contract volume and product mix.

We consider data and connectivity services revenues and listings revenues to be recurring revenues.

Our data and connectivity services revenues are recurring subscription fees related to the various data and connectivity services that we provide which are directly attributable to our exchange venues.

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Due to the fluctuations of the pound sterling and euro compared to the U.S.

dollar, our Exchanges segment revenues, less transaction-based expenses, were higher by $30 million in 2021 from 2020.

dollar, our Exchanges segment revenues, less transaction-based expenses, were lower by $87 million in 2022 from 2021.

Our exchange transaction and clearing revenues are presented net of rebates.

We recorded rebates of $1.0 billion and $962 million in 2021 and 2020, respectively.

We recorded rebates of $869 million and $1.0 billion in 2022 and 2021, respectively.

We offer rebates in certain of our markets primarily to support market liquidity and trading volume by providing qualified participants in those markets a discount to the applicable commission rate.

Such rebates are calculated based on volumes traded.

The increase in rebates is primarily due to the launch of new products, including ICE Murban crude oil futures and the Sterling Overnight Index Average, or SONIA.

The decrease in rebates is primarily due to lower volumes as compared to the prior year and the migration of Sterling futures rebates into the Sterling Overnight Index Average, or SONIA, and a change in the pricing and structure of SONIA products.

• Energy Futures and Options:

Total energy volume increased 1% and revenues increased 10% in 2021 from 2020.

– Total oil volume increased 3% in 2021 from 2020 driven by price volatility related to oil supply and demand dynamics and macroeconomic uncertainty in late 2021.

– Our global natural gas futures and options volume decreased 4% in 2021 from 2020 as 2020 benefited from elevated volatility related to COVID-19, partially offset by 2021 continued growth in our TTF and Asian JKM gas complexes driven by the globalization of gas, coupled with heightened price volatility in 2021 related to natural gas supply and demand dynamics in the U.K.

– Our environmentals and other futures and options volume increased 18% to record levels in 2021 from 2020 due to an increase in the price of carbon and continued demand for market-based mechanisms to price climate risk and help enable greenhouse gas reduction goals.

Total energy volume decreased 4% and revenues decreased 6% in 2022 from 2021.

– Total oil futures and options volume decreased 12% in 2022 from 2021 driven, in part, by lower Gasoil volumes which are impacted by the uncertainty around Russian sanctions and the conflict in Ukraine.

– Our global natural gas futures and options volume increased 16% in 2022 from 2021 as 2022 benefited from elevated price volatility related to geopolitical events, including the conflict in Ukraine.

– Our environmentals and other futures and options volume decreased 12% in 2022 from 2021 with growth in U.S.

environmental volumes offset by lower EU environmental volumes.

• Agricultural and Metals Futures and Options:

Total volume in our agricultural and metals futures and options markets decreased 10% and revenues decreased 7% in 2021 from 2020.

The overall decrease in agricultural volumes was due to 2020 benefiting from elevated volatility related to COVID-19 and a sharp decline in oil prices, partially offset by elevated volatility in late 2021 as a result of weather-related supply and demand dynamics impacting our Coffee and Cotton markets as well as geopolitical events impacting our Cocoa markets.

– Sugar futures and options volumes decreased 21% in 2021 from 2020.

– Other agricultural and metal futures and options volumes were flat in 2021 as compared to 2020.

Total volume in our agricultural and metals futures and options markets increased 5% and revenues increased 3% in 2022 from 2021.

The overall increase in agricultural volumes was due to 2022 benefiting from elevated price volatility and price inflation driving an increased need to manage risk across our commodity markets.

– Sugar futures and options volumes increased 5% in 2022 from 2021.

– Other agricultural and metal futures and options volumes increased 4% in 2022 from 2021.

• Financial Futures and Options:

Total volume increased 2% and revenues increased 21% in our financial futures and options markets in 2022 from 2021.

– Interest rate futures and options volume and revenue increased 6% and 23% in 2021 from 2020, respectively, driven by interest rate volatility from increased speculation of central bank activity due to post-pandemic global economic re-opening and inflation concerns.

Adjusting for the transition of the LIBOR-based Sterling contract to the alternative rate-based SONIA contract, which is half the notional size of the Sterling contract, total volume in our financial futures and options markets increased 19% in 2022.

2022 benefited from elevated volatility across global markets driven by geopolitical events, central bank activity and inflationary concerns.

– Interest rate futures and options volume decreased 1% and revenue increased 23%, respectively, in 2022 from 2021.

Adjusting for the transition of the LIBOR-based Sterling contract to the alternative rate-based SONIA contract, which is half the notional size of the Sterling contract, interest rate volumes increased 20% in 2022 from 2021 driven by interest rate volatility and increased speculation of central bank activity due to inflation concerns.

Interest rate futures and options revenues were $292 million and $237 million in 2022 and 2021, respectively.

– Other financial futures and options volume, which includes our MSCI®, FTSE® and NYSE FANG+ equity index products, decreased 12% and revenue decreased 4% in 2021 from 2020.

Other financial futures and options volume decreased as 2020 benefited from elevated volatility across global equity markets driven by the emergence of COVID-19.

– Other financial futures and options volume, which includes our MSCI®, FTSE® and NYSE FANG+ equity index products, increased 15% and revenue increased 16% in 2022 from 2021.

2022 benefited from elevated volatility across global equity markets driven by geopolitical events, central bank activity and inflationary concerns.

Other financial futures and options revenues were $183 million and $157 million in 2022 and 2021, respectively.

• Cash Equities and Equity Options:

Cash equities volume decreased 6% in 2021 from 2020 as 2020 benefited from elevated volatility across global equity markets driven by the emergence of COVID-19.

Cash equities volume increased 4% in 2022 from 2021 due to higher market volumes driven by elevated volatility related to inflationary, recessionary and geopolitical concerns.

Cash equities revenues, net of transaction-based expenses, were $275 million and $246 million in 2022 and 2021, respectively.

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securities exchanges, designated market maker service fees, exchange membership fees and agricultural grading and certification fees.

Our OTC and other revenues increased 10% in 2021 from 2020.

Our OTC and other revenues increased 31% in 2022 from 2021 primarily due to an increase in interest income on clearing margin deposits.

Following the October 2021 Bakkt transaction, Bakkt revenues are no longer included within our OTC and other revenues.

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Our data and connectivity services revenues increased 5% in 2022 from 2021.

The increase in revenue was driven by the strong retention rate of existing customers and increased purchases by existing customers.

The increase in revenue was driven by the strong retention rate of existing customers, the addition of new customers and increased purchases by existing customers.

• Listings Revenues:

Through NYSE, NYSE American and NYSE Arca, we generate listings revenue related to the provision of listings services for public companies and ETFs, and related corporate actions for listed companies.

Listings revenues increased 7% in 2021 from 2020, driven by equity capital markets activity, including an increase in demand for special purpose acquisition company, or SPAC, listings.

Listings revenues increased 7% in 2022 from 2021, driven by the full impact of strong equity capital markets activity in 2021.

Listings revenues in our securities markets arise from fees applicable to companies listed on our cash equities exchanges– original listing fees and annual listing fees.

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Listings fees related to other corporate actions are considered contract modifications of our listing contracts and are recognized ratably over time as customers continue to list on our exchanges.

In a record year for new issuance, NYSE raised $221 billion in IPOs and follow-on offerings from over 594 transactions, an increase of 20% from $185 billion raised in 2020.

In 2022, NYSE listed over $345 billion in total market value from IPOs, including three of the top five operating company IPOs defined by offering proceeds raised, follow-on offerings and over 30 transfers from competing exchanges, an increase of 56% from $221 billion raised in 2021.

Selected Operating Data

Management considers volume metrics when making financial and operating decisions, and believes volumes are useful for management and investors in understanding the performance of our exchanges business.

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

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Total cash handled volume 2,409 2,317 4 % 2,317 2,466 (6) %

Total cash market share matched 19.9 % 22.1 % (2.3) pts 22.1 % 24.2 % (2.1) pts

Total cash market share matched 19.9 % 19.9 % — 19.9 % 22.1 % (2.3) pts

NYSE equity options (contracts in thousands):

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The activity assessment fees are designed to equal the Section 31 fees.

As a result, activity assessment fees and the corresponding Section 31 fees do not have an impact on our net income, although the timing of

payment by us will vary from collections.

As a result, activity assessment fees and the corresponding Section 31 fees do not have an impact on our net income, although the timing of payment by us will vary from collections.

Section 31 fees were $499 million and $248 million in 2022 and 2021, respectively.

The decrease in Section 31 fees was primarily related to a decline in rates, which were revised in February of both years.

The increase in Section 31 fees was primarily due to an increase in rates.

The fees we collect are included in cash at the time of receipt and we remit the amounts to the SEC semi-annually as required.

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We record routing charges on a gross basis as a component of transaction and clearing fee revenue.

Cash liquidity payments, routing and clearing fees were $1.8 billion and $1.6 billion in 2021 and 2020, respectively.

Cash liquidity payments, routing and clearing fees were $1.8 billion in both 2022 and 2021.

Operating Expenses, Operating Income and Operating Margin

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Operating margin

65 % 66 % (1 pt) 66 % 66 % —

70 % 65 % 5 pts 65 % 66 % (1 pt)

Adjusted operating margin (1)

69 % 68 % 1 pt 68 % 69 % (1 pt)

72 % 69 % 3 pts 69 % 68 % 1 pt

(1) The adjusted figures exclude items that are not reflective of our ongoing core operations and business performance.

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Operating income $ 719 $ 529 36 % $ 529 $ 492 7 %

Our Fixed Income and Data Services segment represents fixed income and credit trading and clearing as well as subscription-based, or recurring, revenues related to our fixed income data and analytics offerings as well as other multi-asset class data and network services.

In both 2021 and 2020, 14% of our Fixed Income and Data Services segment revenues were billed in pounds sterling or euros.

Recurring revenues $ 1,686 $ 1,639 3 % $ 1,639 $ 1,532 7 %

Transaction revenues $ 406 $ 244 66 % $ 244 $ 278 (12) %

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

In 2022 and 2021, 11% and 14%, respectively, of our Fixed Income and Data Services segment revenues were billed in pounds sterling or euros.

As the pound sterling or euro exchange rate changes, the U.S.

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Due to the fluctuations of the pound sterling and euro compared to the U.S.

dollar during 2021, our Fixed Income and Data Services revenues were higher by $14 million in 2021 than in 2020.

dollar during 2022, our Fixed Income and Data Services revenues were lower by $28 million in 2022 than in 2021.

Fixed Income and Data Services Revenues

Our Fixed Income and Data Services revenues increased 4% in 2021 from 2020 primarily due to growth in our fixed income data and analytics products and our other data and network services.

Our Fixed Income and Data Services revenues increased 11% in 2022 from 2021 primarily due to strength in our fixed income execution and CDS clearing businesses due to elevated volatility across global markets driven by geopolitical events, central bank activity and inflationary concerns.

• Fixed Income Execution:

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Execution fees are reported net of rebates, which were nominal in 2022 and 2021.

Our fixed income execution revenues decreased 25% in 2021 from 2020.

The decrease in revenue was due to 2020 benefiting from price volatility related to COVID-19, as well as decreased retail activity, particularly in municipal and corporate bonds, as a result of low interest rates.

Our fixed income execution revenues increased 96% in 2022 from 2021 due to elevated volatility across global markets driven by geopolitical events, central bank activity and inflationary concerns.

• CDS Clearing:

CDS clearing revenues decreased 8% in 2021 from 2020.

CDS clearing revenues increased 59% in 2022 from 2021.

The notional value of CDS cleared was $23.8 trillion and $17.0 trillion in 2022 and 2021, respectively.

Elevated volatility in 2020 related to COVID-19 benefited 2020 revenues, with volatility and cleared volumes generally returning to more normal levels late in 2021.

The increases in the notional value of CDS cleared were primarily driven by heightened volatility related to geopolitical events and inflationary concerns.

• Fixed Income Data and Analytics:

Our fixed income data and analytics revenues increased 1% in 2022 from 2021.

The increase in revenue was due to strength in our index business and continued growth in our pricing and reference data business driven by the strong retention rate of existing customers, the addition of new customers, and increased purchases by existing customers.

The increase in revenues was due to strength in our index business during the first half of 2022 and continued growth in our pricing and reference data business driven by the strong retention rate of existing customers, the addition of new customers, and increased purchases by existing customers.

This was partially offset by unfavorable foreign exchange effects arising from fluctuations of the U.S.

dollar as compared to 2021.

• Other Data and Network Services:

Our other data and network services revenues increased 6% in 2022 from 2021.

The increase in revenues was driven primarily by growth in our ICE Global Network offering, coupled with strength in our consolidated feeds and desktop revenues.

The increase in revenues was driven primarily by growth in our ICE Global Network offering, coupled with increased demand and strong retention in our consolidated feeds business, and strength in our derivatives analytics and desktop revenues.

Annual Subscription Value, or ASV, represents, at a point in time, the data services revenues, which includes Fixed Income Data and Analytics as well as other data and network services, subscribed for the succeeding 12 months.

ASV does not include new sales, contract terminations or price changes that may occur during that 12-month period.

However, while it is an indicative forward-looking metric, it does not provide a precise growth forecast of the next 12 months of data services revenues.

However, while it is an indicative forward-looking metric, it does not provide a precise growth forecast of the next 12 months of data

services revenues.

Management considers ASV metrics when making financial and operating decisions, and believes ASV is useful for management and investors in understanding our data services business performance.

As of December 31, 2022, ASV was $1.682 billion, which increased 2.2% compared to the ASV as of December 31, 2021.

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Operating margin

28 % 27 % 1 pt 27 % 25 % 2 pts

34 % 28 % 6 pts 28 % 27 % 1 pt

Adjusted operating margin (1)

38 % 38 % — 38 % 38 % —

43 % 38 % 5 pts 38 % 38 % —

(1) The adjusted figures exclude items that are not reflective of our ongoing core operations and business performance.

These adjusted numbers are not calculated in accordance with GAAP.

These adjusted figures are not calculated in accordance with GAAP.

See “- Non-GAAP Financial Measures” below.

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

* Other revenues were $4 million in 2019 and $19 million in 2020.

* Other revenues were $19 million and data and analytics revenues were $22 million in 2020.

(1) The adjusted figures in the charts above are calculated by excluding items that are not reflective of our cash operations and core business performance.

As a result, these adjusted numbers are not calculated in accordance with U.S.

As a result, these adjusted figures are not calculated in accordance with U.S.

See “- Non-GAAP Financial Measures” below.

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2022 2021 Change 2021 2020 Change

Origination technology 971 316 208 % 316 — n/a

Origination technology 758 971 (22) % 971 316 208 %

Closing solutions 229 310 (26) 310 238 30

Data and analytics 73 22 226 22 — n/a

Other 53 19 185 19 4 n/a

1,407 595 137 595 139 n/a

Data and analytics 90 73 24 73 22 226

Other 52 53 (3) 53 19 185

1,129 1,407 (20) 1,407 595 137

Other operating expenses

546 215 154 215 52 n/a

539 546 (1) 546 215 154

Acquisition-related transaction and integration costs

40 89 (56) 89 1 n/a

91 40 130 40 89 (56)

Depreciation and amortization

424 139 205 139 19 n/a

442 424 4 424 139 205

Operating expenses

1,010 443 128 443 72 n/a

1,072 1,010 6 1,010 443 128

Operating income

$ 57 $ 397 (86) % $ 397 $ 152 162 %

*Percentage changes in the table above deemed "n/a" are not meaningful due to the acquisition of Ellie Mae in September 2020.

Recurring revenues $ 643 $ 553 16 % $ 553 $ 155 256 %

Transaction revenues $ 486 $ 854 (43) % $ 854 $ 440 94 %

In the table above, we consider subscription fee and certain other revenues to be recurring revenues.

Each revenue classification above contains a mix of recurring and transaction revenues, based on the various service offerings described in more detail below.

Mortgage Technology Revenues

Our mortgage technology revenues are derived from our comprehensive, end-to-end U.S.

Our mortgage technology revenues are derived from our comprehensive U.S.

residential mortgage platform.

Our mortgage technology business enables greater workflow efficiency for customers focused on originating U.S.

Our mortgage technology business is intended to enable greater workflow efficiency for customers focused on originating U.S.

residential mortgage loans.

Mortgage technology revenues increased $812 million or 137% in 2021 from 2020.

Revenues from Ellie Mae following our September 2020 acquisition were $351 million in 2020.

Mortgage technology revenues decreased $278 million or 20% in 2022 from 2021 primarily due to lower mortgage origination volumes driven by rising interest rates.

• Origination technology:

Our origination technology revenues decreased 22% in 2022 from 2021 due to lower transaction-based revenues as mortgage origination volumes declined during 2022.

Our origination technology acts as a system of record for the mortgage transaction, automating the gathering, reviewing, and verifying of mortgage-related information and enabling automated enforcement of rules and business practices designed to help ensure that each completed loan transaction is of high quality and adheres to secondary market standards.

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• Closing solutions:

Our closing solutions uniquely connect key participants, such as lenders, title and settlement agents and individual county recorders, to digitize the traditionally manual and paper-based closing and recording process.

Our closing solutions also include revenues from the MERS database, a leading system for recording and tracking changes in mortgage servicing rights and beneficial ownership interests in loans secured by U.S.

Our closing solutions revenues decreased 26% in 2022 from 2021 due to lower mortgage origination volumes.

Our closing solutions connect key participants, such as lenders, title and settlement agents and individual county recorders, to digitize the closing and recording process.

Closing solutions also include revenues from our MERSCORP Holdings, Inc., or MERS database, which provides a system of record for recording and tracking changes and servicing rights and beneficial ownership interests in loans secured by U.S.

residential real estate.

Closing solutions revenues increased in 2021 from 2020 as a result of an increase in residential home sales, market share gains and increased demand and adoption of digital solutions.

Revenues from closing solutions are largely transaction-based.

Revenues from closing solutions are largely transaction-based and are based on the volume of loans closed.

• Data and Analytics :

Revenues include those related to ICE Mortgage Technology’s Automation, Intelligence, Quality, or AIQ, offering, which applies machine learning and artificial intelligence, or AI, to the entire loan origination process, offering customers greater efficiency by streamlining data collection and validation through our automated document recognition and data extraction capabilities.

Our Data and Analytics revenues increased 24% in 2022 from 2021 due to the addition of new customers in our Automation, Intelligence, Quality, or AIQ, and data businesses.

Revenues include those related to ICE Mortgage Technology’s AIQ offering, which applies machine learning to the entire loan origination process, offering customers greater efficiency by streamlining data collection and validation through our automated document recognition and data extraction capabilities.

AIQ revenues can be both recurring and transaction-based in nature.

In addition, our data offerings include real-time industry and peer benchmarking tools, which provide originators a granular view into the real-time trends of nearly half the U.S.

In addition, our data offerings include real-time industry and peer benchmarking tools, which provide originators a granular view into the real-time trends of the U.S.

residential mortgage market.

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Revenues related to our data products are largely subscription-based and recurring in nature.

Other revenues decreased 3% in 2022 from 2021 due to lower professional services and non-mortgage consumer engagement revenue.

Other revenues include professional services fees, as well as revenues from ancillary products.

Other revenues can be both recurring and transaction-based in nature.

Operating Expenses, Operating Income and Operating Margin

The following chart summarizes our Mortgage Technology segment's operating expenses, operating income and operating margin (dollars in millions).

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2022 2021 Change 2021 2020 Change

Operating expenses $ 1,010 $ 443 128 % $ 443 $ 72 n/a

Operating expenses $ 1,072 $ 1,010 6 % $ 1,010 $ 443 128 %

Adjusted operating expenses (1)

$ 602 $ 231 160 % $ 231 $ 56 n/a

$ 618 $ 602 3 % $ 602 $ 231 160 %

Operating income

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Adjusted operating income (1)

$ 805 $ 364 122 % $ 364 $ 83 n/a

$ 511 $ 805 (37) % $ 805 $ 364 122 %

Operating margin

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45 % 57 % (12 pts) 57 % 61 % (4 pts)

*Percentage changes in the table above deemed "n/a" are not meaningful due to the acquisition of Ellie Mae in September 2020.

(1) The adjusted figures exclude items that are not reflective of our ongoing core operations and business performance.

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Acquisition-related transaction and integration costs

102 105 (3) 105 2 n/a

93 102 (9) 102 105 (3)

Technology and communication

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$ 3,654 $ 3,697 (1) % $ 3,697 $ 3,003 23 %

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

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

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

In 2022 and 2021, 9% and 10%, respectively, of our operating expenses were incurred in pounds sterling or euros.

Due to fluctuations in the U.S.

dollar compared to the pound sterling and euro, our consolidated operating expenses were $22 million higher in 2021 than in 2020.

dollar compared to the pound sterling and euro, our consolidated operating expenses were $38 million lower in 2022 than in 2021.

See Item 7(A) “- Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Exchange Rate Risk” below for additional information.

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Stock-based compensation expenses $ 149 $ 155 (4) %

Employee headcount decreased in 2021 from 2020 primarily due to the deconsolidation of Bakkt, which was partially offset by increased hiring in 2021.

Ellie Mae compensation and benefits expense was $174 million higher in 2021 than in 2020 due to our September 2020 acquisition.

Bakkt compensation and benefits expense was $16 million higher in 2021 than in 2020 due to increases in employee headcount prior to deconsolidating Bakkt.

In addition, compensation and benefits expense increased $67 million in 2021 from 2020 due to merit pay increases, above target performance-based compensation and higher employee insurance costs than in 2020 due to the impact of COVID-19.

The stock-based compensation expenses in the table above relate to employee stock option and restricted stock awards.

Employee headcount increased in 2022 from 2021 primarily due to recent acquisitions and a shift to move certain costs in-house, primarily in India.

Compensation and benefits expense decreased $55 million in 2022 from 2021 primarily due to $54 million in expenses related to Bakkt prior to deconsolidation in 2021.

Compensation expense includes higher costs from increased headcount, annual merit increases and other related costs, offset by lower bonus expense in 2022 due to lower target performance as compared to the above-target performance in 2021.

Stock-based compensation expenses decreased in 2022 due to the deconsolidation of Bakkt and lower target performance in 2022 as compared to the above-target performance in 2021.

Professional Services Expenses

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

Professional services expenses increased in 2021 from 2020 primarily due to an increase of $26 million from Ellie Mae which was partially offset by lower legal expenses for 2021.

Professional services expenses decreased $28 million in 2022 from 2021 primarily due to lower regulatory and litigation expenses, lower consulting expenses related to bringing certain mortgage technology-related costs in-house, and $13 million in expenses recorded at Bakkt in 2021 prior to deconsolidation.

Acquisition-Related Transaction and Integration Costs

In 2021, we incurred $59 million in acquisition-related transaction costs related to the deconsolidation of Bakkt, which included $31 million non-cash compensation related to a market condition event triggered on the Bakkt equity incentive awards in connection with the merger of Bakkt and VIH.

Additionally, we incurred $39 million in integration costs related to Ellie Mae.

In 2022, we incurred $93 million in acquisition-related transaction costs primarily due legal and consulting expenses related to our pending acquisition of Black Knight and our integration of Ellie Mae.

We expect to continue to explore and pursue various potential acquisitions and other strategic opportunities to strengthen our competitive position and support our growth.

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Technology and communications expenses may be impacted by growth in electronic contract volume, our capacity requirements, changes in the number of telecommunications hubs and connections with customers to access our electronic platforms directly.

Technology and communications expenses increased by $117 million in 2021 from 2020, primarily due to the inclusion of Ellie Mae expenses, which were $87 million higher in 2021 than in 2020.

In addition, technology and communications expenses increased by $24 million in 2021 from 2020 due to increased license fees and data acquisition costs.

Technology and communications expenses increased by $17 million in 2022 from 2021, primarily due to increased hardware and software support costs, increased hosting costs and increased data services costs, partially offset by $11 million in expenses in 2021 related to Bakkt prior to deconsolidation.

Rent and Occupancy Expenses

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We have significant operations located in the U.S., U.K., and India, with smaller offices located throughout the world.

Rent and occupancy expenses includes the expenses of Ellie Mae, which increased $6 million in 2021 from 2020.

These expenses were partially offset by a reduction in other occupancy expenses in 2021 and the early termination of our NYSE Chicago office lease in 2020.

Rent and occupancy expenses included decreased rent expense in 2022 from 2021 due to office closures, and expenses in 2021 related to Bakkt prior to deconsolidation.

These costs were partially offset by higher costs related to utilities, repairs and maintenance as more employees returned to the office.

See Item 2 “- Properties” above for additional information regarding our leased and owned property.

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

Selling, general and administrative expenses increased in 2021 from 2020, primarily due to the inclusion of $13 million of Ellie Mae expenses and $12 million of Bakkt expenses related to the launch of Bakkt's digital wallet, Bakkt App.

In addition, marketing expenses increased $19 million in 2021 from 2020 primarily due to a higher number of NYSE initial public offerings, or IPOs, which were partially offset by a charitable contribution in support of COVID-19 relief efforts of $10 million and an $8 million regulatory settlement accrual in 2020.

Selling, general and administrative expenses increased in 2022 from 2021, primarily due to increased marketing expenses related to additional branding efforts and increased travel and entertainment expenses compared to suppressed travel demand in 2021 as a result of COVID-19.

These were partially offset by $19 million in expenses related to Bakkt in 2021 prior to deconsolidation.

Depreciation and Amortization Expenses

Depreciation and amortization expense results from depreciation of long-lived assets such as buildings, leasehold improvements, aircraft, hardware and networking equipment, software, furniture, fixtures and equipment over their estimated useful lives.

This expense includes amortization of intangible assets obtained in our acquisitions of

businesses, as well as on various licensing agreements, over their estimated useful lives.

This expense includes amortization of intangible assets obtained in our acquisitions of businesses, as well as on various licensing agreements, over their estimated useful lives.

Intangible assets subject to amortization consist primarily of customer relationships, trading products with finite lives and technology.

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We recorded amortization expenses on intangible assets acquired as part of our acquisitions, as well as on other intangible assets, of $610 million and $622 million in 2022 and 2021, respectively.

The increase in 2021 over 2020 was primarily due to an increase in the amortization of Ellie Mae intangible assets of $246 million.

We recorded depreciation expenses on our fixed assets of $421 million and $387 million in 2022 and 2021, respectively.

The increase in 2021 over 2020 was primarily due to an increase in the depreciation of Ellie Mae fixed assets of $31 million, partially offset by a software impairment charge of $11 million in 2020 related to a portion of customized software developed at Bakkt that was no longer useful.

The increase in 2022 over 2021 was primarily due to an increase in internally developed software assets at ICE Mortgage Technology.

Consolidated Non-Operating Income/(Expense)

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Interest income

$ 1 $ 10 (93) % $ 10 $ 35 (71) %

$ 108 $ 1 n/a $ 1 $ 10 (93) %

Interest expense

(616) (423) 46 (423) (357) 19

Other income, net 2,671 80 n/a 80 58 38

Total other income (expense), net

$ 2,249 $ (267) n/a $ (267) $ (192) 39 %

Other income/(expense), net (1,322) 2,671 n/a 2,671 80 n/a

Total other income/(expense), net $ (1,830) $ 2,249 n/a $ 2,249 $ (267) n/a

Net income attributable to non-controlling interest

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Interest Income

Interest income decreased in 2021 from 2020 primarily due to a decrease in short-term interest rates on various investments.

Interest income increased in 2022 from 2021 primarily due to an increase in short-term interest rates combined with larger investment balances.

Interest income in 2022 includes $76 million in interest income recognized in connection with the short-term investments related to the $5.0 billion of SMR Notes (as defined in "Liquidity and Capital Resources— Debt") for the Black Knight acquisition and the remainder primarily relates to interest on the restricted cash balances held within our regulated entities.

Interest Expense

Interest expense increased in 2021 from 2020 primarily due to the issuance of senior notes in May 2020 to refinance existing debt, the issuance of senior notes in August 2020 related to the Ellie Mae acquisition, and $4 million in accelerated unamortized costs related to the early redemption in September 2021 of the floating rate notes due June 2023, partially offset by a $14 million extinguishment payment we incurred related to the June 2020 early redemption of senior notes with an original maturity of December 1, 2020, or the December 2020 Senior Notes, and $5 million pre-acquisition interest expense on debt issued for Ellie Mae acquisition.

Interest expense increased in 2022 from 2021 primarily due to $135 million in interest expense in 2022 related to the Black Knight acquisition-related-debt, $30 million in costs associated with our May 2022 debt refinancing as well as higher bond coupons associated with the re-financing of our existing debt.

See “— Debt” below.

Other income/(expense), net

During 2021, Bakkt completed its merger with VIH, which resulted in an initial 68% economic interest, and we recorded a gain of $1.4 billion as other income upon our deconsolidation of Bakkt.

Our equity method investments include OCC and Bakkt, among others.

We recognized ($1.3 billion) and ($42 million) during 2022 and 2021, respectively, of our share of estimated equity method investment losses, net, and impairment charges, which are included in other income/(expense).

In 2022, after recording our share of Bakkt's equity method losses, which included Bakkt's impairment charge, we recorded an impairment charge on our investment in Bakkt to its fair value as other expense.

This was based on what we consider to be an other-than-temporary decline in fair value as a result of several factors, including consideration of the impairment charge recorded by Bakkt (see Notes 3 and 4 to our consolidated financial statements).

The estimated losses and impairment during 2022 and 2021 are primarily related to our investment in Bakkt.

These are partially offset by the estimated profits related to our investment in OCC.

Both 2022 and 2021 include adjustments to reflect the difference between reported prior period actual results from our original estimates.

During 2021, Bakkt completed its merger with VIH, as a result of which we retained an approximate 68% economic interest in Bakkt, and we recorded a gain of $1.4 billion as other income upon our deconsolidation of Bakkt.

Following the merger, we show our economic interest share of estimated Bakkt profits/(losses) as equity earnings, which are also included in other income (expense), net.

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During 2021, Coinbase completed an IPO and we sold our investment in Coinbase for $1.2 billion, and recorded a gain of $1.2 billion as other income.

During 2022, we recorded a $9 million accrual for legal settlements as other expense.

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

In addition, we accrued approximately $16 million related to a legal settlement.

In 2020, we recorded an accrual for potential legal settlements of $30 million as other income.

We own a 40% interest in the Options Clearing Corporation, or OCC, which we treat as an equity method investment.

OCC is regulated by the SEC and the CFTC.

We recognized $51 million and $71 million of equity earnings as our share of OCC's estimated profits during 2021 and 2020, respectively, which is included in other income.

Refer to Note 4 to our consolidated financial statements, included in this Annual Report for additional details on our OCC investment.

In connection with our equity investment in Euroclear, we recognized dividend income of $60 million in 2021 and $19 million in 2019, included in other income.

As a result of a 2020 European regulation limiting dividend payments, we did not receive a Euroclear dividend in 2020, but we received two dividend payments during 2021.

In addition, in both September 2021 and in November 2020 we became aware of observable price changes in orderly transactions of similar Euroclear investments by third parties.

The transactions resulted in fair value adjustments of our Euroclear investment, and we recorded gains of $34 million and $35 million in other income in 2021 and 2020, respectively, including the impacts of foreign currency exchange.

We historically held a 9% ownership interest in BIDS, a registered broker-dealer and the operator of the BIDS Alternative Trading System.

In December 2020, we sold our investment in BIDS to Cboe and recorded a gain on the sale of $20 million, included in other income.

We completed the sale of our Euroclear stake on May 20, 2022.

The carrying value of our investment was $700 million at the time of the sale.

We recorded a net gain of $41 million on the sale, which is included in other income during 2022.

We did not receive a Euroclear dividend during the 2022 prior to the sale of our investment.

We incurred foreign currency transaction losses of $9 million and $13 million in 2022 and 2021, respectively.

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See Item 7A “- Quantitative and Qualitative Disclosures About Market Risk -Foreign Currency Exchange Rate Risk” included elsewhere in this Annual Report for more information on these items.

In connection with our adoption of Accounting Standards Update, or ASU, 2017-07, Compensation Retirement Benefits:

In connection with Accounting Standards Update, or ASU, 2017-07, Compensation Retirement Benefits:

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , or ASU 2017-07, we are recognizing the other components of net benefit cost of our defined benefit plans in the income statement as non-operating income on a full retrospective basis.

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As of December 31, 2022, our non-controlling interests include those related to the non-ICE limited partners' interest in our CDS clearing subsidiaries and non-controlling interest in ICE Futures Abu Dhabi.

Prior to completion of the Bakkt transaction on October 15, 2021, our non-controlling interest also included the redeemable non-controlling interest of the non-ICE partners in Bakkt, as discussed further below.

The non-ICE limited partners of our CDS clearing subsidiaries hold a 26.7% ownership interest as of December 31, 2021.

In addition, during 2020 we received a contribution from a group of minority investors for a non-controlling interest in ICE Futures Abu Dhabi.

As of December 31, 2020, minority interests related to Bakkt were reflected as redeemable non-controlling interests in temporary equity within our consolidated balance sheet.

On October 15, 2021, Bakkt completed its merger with VIH and as of December 31, 2021, we no longer hold redeemable non-controlling interest related to Bakkt.

During 2021 we received a contribution from a group of minority investors for a non-controlling interest in ICE Futures Abu Dhabi.

Prior to completion of the Bakkt transaction on October 15, 2021, our non-controlling interest also included the redeemable non-controlling interest of the non-ICE partners in Bakkt.

On October 15, 2021, Bakkt completed its merger with VIH and as of December 31, 2021, we no longer held redeemable non-controlling interest related to Bakkt.

Refer to Note 3 to our consolidated financial statements contained elsewhere in this Annual Report.

Consolidated Income Tax Provision

Consolidated income tax expense was $1.6 billion and $658 million in 2021 and 2020, respectively.

Consolidated income tax expense was $310 million and $1.6 billion in 2022 and 2021, respectively.

The change in consolidated income tax expense between years is primarily due to the tax impact of changes in our pre-tax income and the changes in our effective tax rate.

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Our effective tax rate was 17% and 29% in 2022 and 2021, respectively.

The effective tax rate for 2021 is higher than the effective tax rate for 2020 primarily due to the deferred income tax impacts from the U.K.

tax law changes as well as the Bakkt transaction.

In June 2021, the U.K.

The effective tax rate for 2022 is lower than the effective tax rate for 2021 primarily due to the deferred income tax benefit from the impairment to our equity method investment in Bakkt in 2022 and deferred income tax expenses from the U.K.

tax law changes in 2021.

In 2021, the U.K.

enacted a corporate income tax rate increase from 19% to 25% effective April 1, 2023.

On March 27, 2020, the CARES Act was enacted and certain income tax related relief was provided under the CARES Act.

On March 11, 2021, the American Rescue Plan Act, or ARPA, was signed into law.

The ARPA enacted certain provisions that are relevant to corporate income tax.

On November 15, 2021, the Infrastructure Investment and Jobs Act was signed into law.

These provisions did not have a material impact on our income tax provision for 2021 or 2020.

See Note 13 to our consolidated financial statements and related notes, which are included in this Annual Report, for additional information on these tax items.

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

Consolidated cash and cash equivalents were $607 million and $583 million as of December 31, 2021 and 2020, respectively.

We had $1.4 billion in short-term and long-term restricted cash and cash equivalents as of both December 31, 2021 and 2020.

Consolidated cash and cash equivalents were $1.8 billion and $607 million as of December 31, 2022 and 2021, respectively.

We had $6.6 billion and $1.4 billion in short-term and long-term restricted cash and cash equivalents as of December 31, 2022 and 2021, respectively, the increase of which is related to the restricted $5.0 billion of SMR Notes intended to be used to finance the Black Knight acquisition.

We had $142.0 billion and $145.9 billion of cash and cash equivalent margin deposits and guaranty funds as of December 31, 2022 and 2021, respectively.

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As of December 31, 2022, we held $1 million of unrestricted cash that was set aside for legal, regulatory and surveillance operations at NYSE.

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

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

Year Ended December 31,

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Effect of exchange rate changes

Net increase in cash, cash equivalents, restricted cash and cash equivalents, and cash and cash equivalent margin deposits and guaranty funds $ 64,357 $ 18,528 $ 499

Net increase in cash and cash equivalents, restricted cash and cash equivalents, and cash and cash equivalent margin deposits and guaranty funds $ 2,367 $ 64,357 $ 18,528

Operating Activities

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

The $242 million increase in net cash provided by operating activities in 2021 from 2020 was driven by an increase of accounts receivable collections of $144 million, primarily due to a prior period COVID-19-related decision to allow customers to defer payment of their 2020 listings invoices.

In addition, operating cash increased due to a $2.0 billion increase in net income, adjusted for depreciation and amortization, deferred taxes, the gain from the sale of our Coinbase investment, net of taxes, of $892 million, and the gain from the deconsolidation of Bakkt, of $1.4 billion.

These increases were partially offset by a decrease in Section 31 fee collections of $219 million, primarily due to lower rates, which were revised in February of each year.

The remaining change is due to fluctuations in our working capital and the timing of various payments such as transaction-related expenses and taxes payable on the sale of our Coinbase investment.

The $431 million increase in net cash provided by operating activities in 2022 from 2021 was driven by a $220 million increase in net income, adjusted for certain noncash operating activities.

In 2022, these adjustments also include the gain on the sale of our Euroclear investment and the net losses and impairment of our unconsolidated investees.

During 2021, these adjustments also included the gains on the sale of our Coinbase investment and our deconsolidation of Bakkt.

Net income increased in 2022 from 2021 due to higher revenues of $146 million, driven by our Exchanges and Fixed Income and Data Services segments, as well as lower expenses, primarily due to the deconsolidation of Bakkt.

The remaining $211 million increase is due to changes in our working capital and the timing of various payments and receipts.

These changes include higher Section 31 fees payable of $316 million due to the rate changes determined by the SEC, offset primarily by timing of various payments and receipts, including higher interest receivable/payable on the cash and collateral held at our clearinghouses.

Investing Activities

Consolidated net cash used in investing activities in 2021 primarily relates to $5.1 billion purchases of invested margin deposits, $179 million of capitalized expenditures, $273 million of software development costs, $117 million for the purchase of an equity method investment and $66 million cash paid for acquisitions, net of cash acquired, partially offset by $3.7 billion of proceeds from the sale of invested margin deposits and $1.2 billion in proceeds from the sale of our Coinbase investment.

Consolidated net cash used in investing activities in 2020 relates to $9.4 billion cash paid for acquisitions, primarily Ellie Mae, net of cash acquired, $3.4 billion purchases of invested margin deposits, $207 million of capitalized expenditures and $203 million of software development costs, partially offset by $2.8 billion proceeds from the sale of invested margin deposits.

Consolidated net cash provided by investing activities in 2022 primarily relates to $7.5 billion of proceeds from the sale of invested margin deposits and $741 million in proceeds from the sale of our Euroclear investment, partially offset by $6.9 billion purchases of invested margin deposits, $225 million of capitalized expenditures, $257 million of software development costs, $73 million for purchases of equity and equity method investments and $59 million cash paid for acquisitions, net of cash acquired.

Consolidated net cash used in investing activities in 2021 relates to $5.1 billion purchases of invested margin deposits, $179 million of capitalized expenditures, $273 million of capitalized software development costs, $117 million for the purchase of an equity method investment and $66 million cash paid for acquisitions, net of cash acquired, partially offset by $3.7 billion of proceeds from the sale of invested margin deposits and $1.2 billion in proceeds from the sale of our Coinbase investment.

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

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Financing Activities

Consolidated net cash provided by financing activities in 2021 primarily relates to an increase in our cash and cash equivalent margin deposits and guaranty fund balances of $65.7 billion, partially offset by $1.2 billion in repayments of debt facilities, $1.4 billion in net repayments under our Commercial Paper Program, $250 million in repurchases of common stock, $747 million in dividend payments to our stockholders and $70 million in cash payments related to treasury shares received for restricted stock tax payments and stock options exercises.

Consolidated net cash provided by financing activities in 2020 primarily relates to an increase in our cash and cash equivalent margin deposits and guaranty fund balances of $19.3 billion, $9.6 billion in net proceeds from the issuance of the May 2020 Notes and the August 2020 Notes, borrowings under a term loan facility and $1.1 billion in net issuances under our Commercial Paper Program.

Cash provided by financing activities was partially offset by repayments of our $1.25 billion December 2020 Senior Notes, and the early payoff of the term loan mentioned above, $1.2 billion in repurchases of common stock, $669 million in dividend payments to stockholders and $74 million in cash payments related to treasury shares received for restricted stock tax payments and stock options exercises.

We have adjusted our historical presentation of opening and ending amounts of cash, cash equivalents, and restricted cash and cash equivalents in our consolidated statements of cash flows to include cash and cash equivalent margin deposits and guaranty funds.

Changes in these balances are reflected as cash provided by/(used in) financing activities.

See Note 10 to our consolidated financial statements, included in this Annual Report.

As of December 31, 2021, we had $13.9 billion in outstanding debt, consisting of $12.9 billion of fixed rate senior notes, $1.0 billion under our U.S.

Consolidated net cash used in financing activities in 2022 primarily relates to a $4.5 billion change in our cash and cash equivalent margin deposits and guaranty fund balances, $2.7 billion in repayments of debt, $1.0 billion in net repayments under our Commercial Paper Program, $632 million in repurchases of common stock, $853 million in dividend payments to our stockholders and $73 million in cash payments related to treasury shares received for restricted stock tax payments and stock options exercises, partially offset by $7.9 billion in net proceeds from our debt offerings.

Consolidated net cash provided by financing activities in 2021 primarily relates to an increase in our cash and cash equivalent margin deposits and guaranty fund balances of $65.7 billion, partially offset by $1.2 billion in repayments of debt, $1.4 billion in net repayments under our Commercial Paper Program, $250 million in repurchases of common stock, $747 million in dividend payments to stockholders and $70 million in cash payments related to treasury shares received for restricted stock tax payments and stock options exercises.

As of December 31, 2022, we had $18.1 billion in outstanding debt, all of which relates to our senior notes.

We also have $4 million outstanding under credit lines at our ICE India subsidiaries.

As of December 31, 2022, our senior notes of $18.1 billion had a weighted average maturity of 16 years and a weighted average cost of 3.6% per annum.

We did not have any commercial paper notes outstanding as of December 31, 2022.

As of December 31, 2021, we had $13.9 billion in outstanding debt, consisting of $12.9 billion of senior notes, $1.0 billion under our U.S.

dollar commercial paper program, or the Commercial Paper Program, and $10 million under credit lines at our ICE India subsidiaries.

Our fixed rate senior notes of $12.9 billion have a weighted average maturity of 15 years and a weighted average cost of 2.9% per annum.

As of December 31, 2021, our senior notes of $12.9 billion had a weighted average maturity of 15 years and a weighted average cost of 2.9% per annum.

The commercial paper notes had original maturities ranging from three to 73 days as of December 31, 2021, with a weighted average interest rate of 0.33% per annum, and a weighted average remaining maturity of 26 days.

As of December 31, 2020, we had $16.5 billion in outstanding debt, consisting of $12.9 billion of fixed rate senior notes, $1.2 billion of floating rate senior notes, $2.4 billion under the Commercial Paper Program and $6 million under credit lines at our ICE India subsidiaries.

Our fixed rate senior notes of $12.9 billion had a weighted average maturity of 16 years and a weighted average cost of 3.0% per annum.

The commercial paper notes had original maturities ranging from four to 266 days as of December 31, 2020, with a weighted average interest rate of 0.40% per annum, and a weighted average remaining maturity of 82 days.

In September 2021, we used the proceeds from commercial paper issuances and cash on hand to fund the redemption of $1.25 billion aggregate principal amount of senior floating rate notes due in June 2023, or the Floating Rate Notes.

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We have a $3.9 billion senior unsecured revolving credit facility, or the Credit Facility, pursuant to a credit agreement with Wells Fargo Bank, N.A., as primary administrative agent, issuing lender and swing-line lender, Bank of America, N.A., as syndication agent, backup administrative agent and swing-line lender, and the lenders party thereto.

As of December 31, 2021, of the $3.8 billion that is currently available for borrowing under the Credit Facility, $1.0 billion is required to back-stop the amount outstanding under our Commercial Paper Program and $171 million is required to support certain broker-dealer and other subsidiary commitments.

The amount required to backstop the amounts outstanding under the Commercial Paper Program will fluctuate as we increase or decrease our commercial paper borrowings.

The remaining $2.6 billion is available for working capital and general corporate purposes, including, but not limited to, acting as a backstop to future increases in the amounts outstanding under the Commercial Paper Program.

On October 15, 2021, we agreed with the lenders to extend the maturity date of the Credit Facility to October 15, 2026, among other items.

On August 21, 2020, we entered into a $750 million 18-month senior unsecured delayed draw term loan facility with a maturity date of February 21, 2022.

We borrowed in full under the facility on September 3, 2020 and the proceeds were used to fund a portion of the purchase price for the Ellie Mae acquisition.

We had the option to prepay the facility in whole or in part at any time and paid off the full balance of the loan on December 16, 2020.

Interest on borrowings under this term loan facility were based on the principal amount outstanding at LIBOR plus an applicable margin, which was equal to 1.125%.

On August 20, 2020, we issued $6.5 billion in aggregate principal amount of new senior notes, comprised of $1.25 billion in aggregate principal amount of floating rate senior notes due in 2023, $1.0 billion in aggregate principal amount of 0.70% senior notes due in 2023, $1.5 billion in aggregate principal amount of 1.85% senior notes due in 2032, $1.25 billion in aggregate principal amount of 2.65% senior notes due in 2040, and $1.5 billion in aggregate principal amount of 3.00% senior notes due in 2060.

We used the net proceeds from the offering to fund a portion of the purchase price for the Ellie Mae acquisition.

On May 26, 2020, we issued $2.5 billion in aggregate principal amount of new senior notes, comprised of $1.25 billion in aggregate principal amount of 2.10% senior notes due in 2030 and $1.25 billion in aggregate principal amount of 3.00% senior notes due in 2050.

We used the net proceeds from the offering for general corporate purposes, including to fund the redemption of our $1.25 billion aggregate principal amount of 2.75% senior notes due in December 2020 and to pay down a portion of our commercial paper outstanding.

On May 25, 2022, we agreed with the lenders to extend the maturity date of the Credit Facility from October 15, 2026, to May 25, 2027, among other items.

As of December 31, 2022, of the $3.9 billion that is currently available for borrowing under the Credit Facility, $171 million was required to support certain broker-dealer and other subsidiary commitments.

We did not have any notes outstanding under our Commercial Paper Program, as of December 31, 2022.

Therefore, there was not a required amount to backstop the Commercial Paper Program.

Amounts required to backstop notes outstanding under the Commercial Paper Program will fluctuate as we increase or decrease our commercial paper borrowings.

The remaining $3.7 billion is available for working capital and general corporate purposes, including, but not limited to, acting as a backstop to future increases in the amounts outstanding under the Commercial Paper Program.

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

• $1.25 billion in aggregate principal amount of 3.65% senior notes due in 2025, or the 2025 Notes;

• $1.5 billion in aggregate principal amount of 4.00% senior notes due in 2027, or the 2027 Notes;

• $1.25 billion in aggregate principal amount of 4.35% senior notes due in 2029, or the 2029 Notes;

• $1.5 billion in aggregate principal amount of 4.60% senior notes due in 2033, or the 2033 Notes;

• $1.5 billion in aggregate principal amount of 4.95% senior notes due in 2052, or the 2052 Notes;

• $1.0 billion in aggregate principal amount of 5.20% senior notes due in 2062, or the 2062 Notes, collectively, the Notes.

We intend to use the net proceeds of $4.9 billion from the offering of the 2025 Notes, the 2027 Notes, the 2029 Notes and the 2062 Notes, or collectively, the SMR Notes, together with the issuance of commercial paper and/or borrowings under the Credit Facility, cash on hand or other immediately available funds and borrowings under the Term Loan, discussed below, to finance the cash portion of the purchase price for Black Knight.

The SMR Notes are subject to a special mandatory redemption feature pursuant to which we will be required to redeem all of the outstanding SMR Notes at a redemption price equal to 101% of the aggregate principal amount of the SMR Notes, plus accrued and unpaid interest, in the event that the Black Knight acquisition is not consummated on or prior to May 4, 2023 subject to two automatic extensions of three months each, to August 4, 2023 and to November 4, 2023, respectively, if clearance under the HSR Act (or a restraint under U.S.

antitrust laws) remains outstanding and all other conditions to closing are satisfied (or in the case of conditions that by their terms are to be satisfied at the closing, are capable of being satisfied if the closing were to occur on such date) at each extension date, or if the Black Knight merger agreement is terminated at any time prior to such date.

ICE would then need to secure new financing to close the transaction.

There can be no assurance that the new financing could be secured and if it is secured, the terms of the new financing may be more expensive to ICE when compared to the existing financing terms for the $5.0 billion of outstanding notes.

The $4.9 billion of net proceeds from the SMR Notes are separately invested and recorded as short-term restricted cash and cash equivalents in our consolidated balance sheet as of December 31, 2022.

We used the $3.0 billion of net proceeds from the offering of the 2033 Notes and the 2052 Notes to redeem $2.7 billion aggregate principal amount of four series of senior notes that would have matured in 2022 and 2023.

The balance of the net proceeds was used for general corporate purposes, which included paying down a portion of the amounts outstanding under our Commercial Paper Program.

We recorded $30 million in costs associated with the extinguishment and re-financing of our existing debt in connection with our May 2022 debt refinancing.

These costs are included in interest expense in our consolidated statements of income for 2022.

For additional information regarding this transaction, refer to Note 3 to our consolidated unaudited financial statements, included in this Annual Report.

On May 4, 2022, we entered into a 364-day senior unsecured bridge facility in an aggregate principal amount not to exceed $14.0 billion, or the Bridge Facility.

The commitments that the Company obtained for the Bridge Facility were permanently reduced from $14.0 billion and there were no amounts outstanding as of December 31, 2022 as a result of (i) the amendment and extension of the Credit Facility, (ii) the issuance by the Company of certain senior unsecured notes on May 23, 2022, (iii) Euroclear divestment proceeds, (iv) the generation of cash internally by the Company, and (v) the effectiveness of our term loan facility.

On May 25, 2022, we entered into a $2.4 billion two-year senior unsecured delayed draw term loan facility, or the Term Loan.

Draws under the Term Loan bear interest on the principal amount outstanding at either (a) Term SOFR plus an applicable margin plus a credit spread adjustment of 10 basis points or (b) a "base rate" plus an applicable margin.

The applicable margin ranges from 0.625% to 1.125% for Term SOFR loans and from 0.000% to 0.125% for base rate loans, in each case, based on a ratings-based pricing grid.

The proceeds from borrowings under the Term Loan will be used to fund a portion of the purchase price for the Black Knight acquisition.

We have the option to prepay outstanding amounts under the Term Loan in whole or in part at any time.

No amounts were outstanding under the Term Loan as of December 31, 2022.

Our Commercial Paper Program enables us to borrow efficiently at reasonable short-term interest rates and provides us with the flexibility to de-lever using our strong annual cash flows from operating activities whenever our leverage becomes elevated as a result of investment or acquisition activities.

We had net repayments of $1.4 billion under our Commercial Paper Program during 2021.

We used $1.2 billion of proceeds received from the sale of our Coinbase investment to pay down the balance under our Commercial Paper Program.

We had net repayments of $1.0 billion under our Commercial Paper Program during 2022, and did not have any notes outstanding under our Commercial Paper Program as of December 31, 2022.

Upon maturity of our commercial paper and to the extent old issuances are not repaid by cash on hand, we are exposed to the rollover risk of not being able to issue new commercial paper.

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

The $3.15 billion replaced the previous amount approved by the Board.

The approval of our Board for stock repurchases does not obligate us to acquire any particular amount of our common stock.

In addition, our Board may increase or decrease the amount available for repurchases from time to time.

During 2022, we repurchased 5.0 million shares of our outstanding common stock at a cost of $632 million, including 4.6 million shares at a cost of $582 million under our Rule 10b5-1 trading plan and 0.4 million shares at a cost of $50 million on the open market.

During 2021, we repurchased 1.8 million shares of our outstanding common stock at a cost of $250 million on the open market.

During 2020, we repurchased 13.6 million shares of our outstanding common stock at a cost of $1.2 billion, including 10.4 million shares at a cost of $948 million under our Rule 10b5-1 trading plan and 3.2 million shares at a cost of $299 million on the open market.

Shares repurchased are held in treasury stock.

Open market repurchases are only made during an open trading period and all shares repurchased are held in treasury stock.

We discontinued stock repurchases and terminated our Rule 10b5-1 trading plan in August 2020 in connection with our Ellie Mae acquisition and in November 2021, we resumed repurchases.

The remaining balance of Board approved funds for future repurchases as of December 31, 2021 was $903 million.

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

The $3.15 billion replaces the previous amount approved by the Board.

In December 2021 we entered into a new Rule 10b5-1 trading plan that will become effective in February 2022.

We may discontinue stock repurchases at any time and may amend or terminate a Rule 10b5-1 trading plan at any time.

The approval of our Board for the stock repurchases does not obligate us to acquire any particular amount of our common stock.

In addition, our Board may increase or decrease the amount available for repurchases from time to time.

In December 2021, we entered into a new Rule 10b5-1 trading plan that became effective in February 2022.

In connection with our pending acquisition of Black Knight, on May 4, 2022, we terminated our Rule 10b5-1 trading plan and suspended share repurchases.

The remaining balance of Board approved funds for future repurchases as of December 31, 2022 was $2.5 billion.

From time to time, we enter into Rule 10b5-1 trading plans, as authorized by our Board, to govern some or all of the repurchases of our shares of common stock.

We may discontinue stock repurchases at any time and may amend or terminate a Rule 10b5-1 trading plan at any time, subject to applicable rules.

We expect funding for any stock repurchases to come from our operating cash flow or borrowings under our Commercial Paper Program or our debt facilities.

The timing and extent of future repurchases that are not made pursuant to a Rule 10b5-1 trading plan will be at our discretion and will depend upon many conditions.

flow and working capital needs, our current and future planned strategic growth initiatives, and other potential uses of our cash and capital resources.

In making a determination regarding any stock repurchases, management considers multiple factors, including overall stock market conditions, our common stock price performance, the remaining amount authorized for repurchases by our Board, the potential impact of a stock repurchase program on our corporate debt ratings, our expected free cash flow and working capital needs, our current and future planned strategic growth initiatives, and other potential uses of our cash and capital resources.

During 2022, we paid cash dividends of $1.52 per share of our common stock in the aggregate, including quarterly dividends of $0.38 per share, for an aggregate payout of $853 million, which includes the payment of dividend equivalents on unvested employee restricted stock units.

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We currently expect to incur capital expenditures (including operational and real estate capital expenditures) and to incur software development costs that are eligible for capitalization ranging in the aggregate between $450 million and $500 million in 2023, which we believe will support the enhancement of our technology, business integration and the continued growth of our businesses.

As of December 31, 2021, we had $903 million authorized for future repurchases of our common stock.

As of December 31, 2022, we had $2.5 billion authorized for future repurchases of our common stock.

Refer to Note 12 to our consolidated financial statements included in this Annual Report for additional details on our stock repurchase program.

Our Board has adopted a quarterly dividend policy providing that dividends will be approved quarterly by the Board or the Audit Committee taking into account factors such as our evolving business model, prevailing business conditions, our current and future planned strategic growth initiatives and our financial results and capital requirements, without a predetermined net income payout ratio.

For the first quarter of 2022, we announced a $0.38 per share dividend payable on March 31, 2022 to stockholders of record as of March 17, 2022.

On February 2, 2023, we announced a $0.42 per share dividend for the first quarter of 2023 payable on March 31, 2023 to stockholders of record as of March 17, 2023.

Other than the facilities for the ICE Clearing Houses, our Credit Facility and our Commercial Paper Program are currently the only significant agreements or arrangements that we have for liquidity and capital resources with third parties.

See Notes 10 and 14 to our consolidated financial statements for further discussion.

Notes 10 and 14 to our consolidated financial statements for further discussion.

In the event of any strategic acquisitions, mergers or investments, or if we are required to raise capital for any reason or desire to return capital to our stockholders, we may incur additional debt, issue additional equity to raise necessary funds, repurchase additional shares of our common stock or pay a dividend.

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We encourage investors to review the GAAP financial measures included in this Annual Report, including our consolidated financial statements, to aid in their analysis and understanding of our performance and in making comparisons.

The table below outlines our adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income attributable to ICE common stockholders and adjusted earnings per share, which are non-GAAP measures that are calculated by making adjustments for items we view as not reflective of our cash operations and core

business performance.

The table below outlines our adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income attributable to ICE common stockholders and adjusted diluted earnings per share, which are non-GAAP measures that are calculated by making adjustments for items we view as not reflective of our cash operations and core business performance.

These measures, including the adjustments and their related income tax effect and other tax adjustments (in millions, except for percentages and per share amounts), are as follows:

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Year Ended December 31, Year Ended December 31, Year Ended December 31, Year Ended December 31,

Operating income adjustments:

2022 2021 2020 2022 2021 2020 2022 2021 2020 2022 2021 2020

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Impairment of developed software — — 11 — — — — — — — — 11

Impairment of exchange registration intangible assets on ICE Futures Singapore — — 31 — — — — — — — — 31

Accrual relating to a regulatory settlement — — — — — 8 — — — — — 8

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72 % 69 % 68 % 43 % 38 % 38 % 45 % 57 % 61 % 59 % 58 % 59 %

Non-operating income adjustments:

Net income attributable to ICE common stockholders

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Transaction and integration costs and acquisition-related success fees 91 98 101

Gain on value of Euroclear equity investment (34) (35) —

Gain on sale of Coinbase equity investment (1,227) — —

Gain on sale and fair value adjustment of equity investments and dividends received, net (41) (1,321) (55)

Gain on deconsolidation of Bakkt — (1,419) —

Gain on sale of BIDS equity investment — (20) —

Gain related to the settlement of an acquisition-related indemnification claim (7) — —

Accelerated unamortized costs related to the early payoff of the June 2023 floating rate senior notes 4 — —

Extinguishment of December 2020 Senior Notes — 14 —

Pre-acquisition interest expense on debt issued for Ellie Mae acquisition — 5 —

Impairment of developed software — 11 —

Impairment of CAT promissory notes — 2 16

Impairment of exchange registration intangible assets on ICE Futures Singapore — — 31

Accrual relating to legal settlement 16 30 —

Accrual relating to regulatory settlement — 8 —

Net losses/(income) from unconsolidated investees 42 (71) (62)

Income tax effect for the above items 574 (109) (80)

Net losses/(income) from and impairment of unconsolidated investees 1,340 42 (71)

Net interest expense on pre-acquisition-related debt and debt extinguishment 89 4 19

Net income tax effect for the above items and deferred tax adjustments (579) 587 (109)

Deferred tax adjustments on acquisition-related intangibles 9 183 36

Other tax adjustments — — 3

Adjusted net income attributable to ICE common stockholders $ 2,974 $ 2,863 $ 2,449

Basic earnings per share attributable to ICE common stockholders $ 7.22 $ 3.79 $ 3.44

Diluted earnings per share attributable to ICE common stockholders $ 2.58 $ 7.18 $ 3.77

Adjusted basic earnings per share attributable to ICE common stockholders $ 5.17 $ 4.44 $ 3.82

Adjusted diluted earnings per share attributable to ICE common stockholders $ 5.30 $ 5.06 $ 4.41

Basic weighted average common shares outstanding

Diluted weighted average common shares outstanding 561 565 555

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Transaction and integration costs are included as part of our core business expenses, except for those that are directly related to the announcement, closing, financing or termination of a transaction.

However, we adjust for the acquisition-related transaction and integration costs relating to acquisitions such as Ellie Mae given the magnitude of the $11.4 billion

purchase price of the acquisition.

We also adjust for the acquisition-related transaction costs related to the merger of Bakkt and VIH due to the significance of the transaction.

In 2020, we also included a $10 million adjustment for Bridge2 Solutions acquisition costs resulting from a Bakkt incentive award market condition estimation adjustment as an acquisition-related success fee.

This adjustment was directly related to the March 2020 capital call to fund the acquisition of Bridge2 Solutions and we believe is therefore appropriate since we exclude costs directly related to the success of a transaction.

In 2021, we recorded a $1.2 billion gain on the sale of our Coinbase equity investment and a $1.4 billion gain on the deconsolidation of Bakkt.

We do not consider these items to be part of our core business operations.

Effective January 1, 2021, we exclude net income from our unconsolidated equity method investees for purposes of calculating non-GAAP measures and have retroactively restated the prior-year periods for comparability purposes.

For 2021, this adjustment includes our share of net income from OCC, BondLink, and Bakkt (from the period of the Bakkt merger on October 15, 2021 through December 31, 2021).

This is consistent with how we treat changes in the fair value of our equity investments.

We believe these adjustments provide greater clarity of our performance given that equity investments are non-cash and not a part of our core operations.

In addition, we also include the following items as non-GAAP adjustments, as each of these are not considered a part of our core business operations:

The $34 million gain on the fair value adjustment of our Euroclear equity investment;

The $7 million gain related to the settlement of an acquisition-related indemnification claim;

Accrual of $16 million relating to a legal settlement;

The acceleration of unamortized costs of $4 million related to the September 2021 early redemption of our Floating Rate Notes;

The $11 million impairment of software developed at Bakkt when it was our subsidiary since it relates to the build-out of a fundamental software design vs.

a recurring upgrade;

Accrual of $30 million relating to a legal settlement;

Accrual of $8 million relating to a regulatory settlement;

The $35 million gain on the fair value adjustment of our Euroclear equity investment;

The extinguishment payment of $14 million related to the June 2020 early redemption of the December 2020 Senior Notes which had an original maturity of December 1, 2020, as a result of our new senior notes offering in May 2020.

This included both a make-whole redemption payment and duplicative interest;

The $20 million gain on the sale of our BIDS equity investment;

Pre-acquisition interest expense of $5 million on the August 2020 debt issued to fund a portion of the purchase price of our Ellie Mae acquisition;

Promissory note impairment charges of $2 million on work performed by the original plan processor on the CAT as non-GAAP adjustments (this was in addition to the 2019 accrual of $16 million for the same item).

However, we adjust for the acquisition-related transaction and integration costs relating to acquisitions such as Ellie Mae given the magnitude of the $11.4 billion purchase price of the acquisition.

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

We adjust for gains and losses on investment transactions and changes in the fair value of our investments.

Our investments are not considered to be a part of our core business operations and the impacts of changes in our investments are often non-cash in nature.

The following non-GAAP adjustments are reported in the table above related to investments:

• During 2022, we excluded the $41 million gain on the sale of our Euroclear investment;

• During 2021 and 2020, we excluded $34 million and $35 million, respectively, of fair value gains on our Euroclear equity investment and during 2021, we excluded Euroclear dividends received of $60 million;

• In 2021, we excluded the $1.4 billion gain on the deconsolidation of Bakkt and the $1.2 billion gain on the sale of our Coinbase equity investment;

• In 2020, we excluded the $20 million gain on the sale of our BIDS equity investment.

Similarly, and as included in the table above, we adjust for our share of net income/(losses) and impairment charges related to our equity method investments, which primarily include OCC and Bakkt.

Our share of 2021 net losses from unconsolidated investees includes the period from the Bakkt merger on October 15, 2021 through December 31, 2021.

During 2022, after recording our share of Bakkt's equity method losses, which included Bakkt's impairment charge, we recorded an impairment in our investment in Bakkt to its fair value as other expense.

In 2022, the total Bakkt net losses and impairment was $1.4 billion and our share of OCC net income was $15 million.

In 2021, our share of Bakkt losses was $92 million and our share of OCC income was $51 million.

We believe these adjustments provide greater clarity of our performance given that equity method investments are non-cash and not a part of our core operations.

We adjust for certain items related to our debt.

Certain debt activities, such as the early termination of notes, pre-acquisition interest and expense and accelerated amortization of debt costs are not considered to be a part of our core business operations and the impacts of changes in our investments are often non-cash in nature.

The following non-GAAP adjustments are reported in the table above related to our debt:

• In 2022, we adjusted for costs of $30 million associated with the May and June 2022 extinguishment of four series of senior notes that would have matured in 2022 and 2023 using proceeds from our May 2022 issuance of new senior notes.

• In 2022, we excluded $135 million of interest expense on pre-acquisition-related debt from our May 2022 debt refinancing related to the pending Black Knight acquisition.

This adjustment was net of $76 million of interest income earnings on investments from the pre-acquisition debt proceeds.

• In 2021, we adjusted for the acceleration of unamortized costs of $4 million related to the September 2021 early redemption of our Floating Rate Notes.

• In 2020, we adjusted for the extinguishment payment of $14 million related to the June 2020 early redemption of the December 2020 Senior Notes which included both a make-whole redemption payment and duplicative interest, and adjusted for pre-acquisition interest expense of $5 million on the August 2020 debt issued to fund a portion of the purchase price of our Ellie Mae acquisition.

Other adjustments not considered to be a part of our core business operations include:

• Accruals related to legal and regulatory settlements, including settlements related to an acquisition-related indemnification claim;

• A 2020 impairment of software developed at Bakkt when it was our subsidiary, since it related to the build-out of a fundamental software design rather than a recurring upgrade;

• A 2020 promissory note impairment charge on work performed by the original plan processor on the CAT as non-GAAP adjustments.

See additional discussion on the CAT in Item 1(A) "-Risk Factors" in this Annual Report.

Impairment of exchange registration intangible assets of $31 million at ICE Futures Singapore.

This non-cash impairment was a result of the estimated fair value of an acquired intangible asset falling below its carrying value.

See Note 8 to our consolidated financial statements, included in this Annual Report.

The tax items in non-GAAP adjustments are either the tax impacts of the pre-tax non-GAAP adjustments or tax items as described below that are not in the normal course of business and are not indicative of our core business performance.

The following tax-related items are included as non-GAAP adjustments:

• Deferred tax adjustments on acquisition-related intangibles, including the impact of U.K.

state tax law changes and apportionment updates, as well as other foreign tax law changes which resulted in deferred tax expense/(benefit) of $183 million, $36 million and ($8 million) in 2021, 2020 and 2019, respectively.

The deferred tax adjustments in 2021 relate primarily to the U.K.

Non-GAAP tax adjustments include the tax impacts of the pre-tax non-GAAP adjustments and deferred tax adjustments on acquisition-related intangibles.

Deferred tax adjustments on acquisition-related intangibles include the impact of U.K.

state tax law changes and apportionment updates, as well as other foreign tax law changes which resulted in deferred tax expense of $9 million, $183 million and $36 million in 2022, 2021 and 2020, respectively, related to the following:

• Deferred tax adjustments in 2022 related primarily to U.S.

state apportionment changes.

• Deferred tax adjustments in 2021 related primarily to the U.K.

tax law changes enacted in June 2021, which increased the U.K.

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state apportionment charges.

• Other tax adjustments of $3 million in 2019 for audit settlement payments primarily related to pre-acquisition tax matters in connection with our acquisition of NYSE in 2013.

For additional information on these items, refer to our consolidated financial statements included in this Annual Report and “- Recent Developments,” “- Consolidated Operating Expenses”, “- Consolidated Non-Operating Income (Expenses)” and “-Consolidated Income Tax Provision” above.

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As of December 31, 2022, our primary cash requirements include the following contractual and other obligations.

As of December 31, 2021, we had $13.9 billion in outstanding debt, including $1.5 billion of short-term debt.

Our outstanding debt consists of $12.9 billion of fixed rate senior notes, $1.0 billion under our U.S.

dollar commercial paper program, or the Commercial Paper Program and $10 million under credit lines at our ICE India subsidiaries.

As of December 31, 2022, we had $18.1 billion in outstanding debt, including $4 million of short-term debt.

Our outstanding debt consists of $18.1 billion of fixed rate senior notes and $4 million under credit lines at our ICE India subsidiaries.

Our operating leases primarily relate to our leased office space and data center facilities, and as of December 31, 2022, we had fixed lease payment obligations of $342 million, with $73 million payable within one-year.

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Clearing members of our clearing houses are required to deposit original margin and variation margin and to make deposits to a guaranty fund.

The cash and cash equivalent deposits made to these margin accounts and to the guaranty fund are recorded in the consolidated balance sheet as current assets with corresponding current liabilities to the clearing members that deposited them.

The cash and cash equivalent deposits made to these margin accounts and to the guaranty fund are recorded in the consolidated balance sheets as current assets with corresponding current liabilities to the clearing members that deposited them.

ICE NGX administers the physical delivery of energy trading contracts.

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To date, however, funding has been provided solely by the SROs, and future funding is expected to be repaid if industry member fees are approved by the SEC and subsequently collected by industry members.

See "- Non-GAAP Measures" above.

New and Recently Adopted Accounting Pronouncements

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Our goodwill and other indefinite-lived intangible assets are evaluated for impairment annually in our fiscal fourth quarter or more frequently if conditions exist that indicate that the value may be impaired.

We test our goodwill for impairment at the reporting unit level, and we have identified four reporting units, which were updated in 2020 to reflect our new segment presentation.

We test our goodwill for impairment at the reporting unit level, and we have identified four reporting units.

Our reporting units identified for our goodwill testing are the NYSE, Other Exchanges, Fixed Income and Data Services, and Mortgage Technology reporting units.

These impairment evaluations are performed by comparing the carrying value of the goodwill or other indefinite-lived intangibles to its estimated fair value.

In accordance with Accounting Standards Update 2017-04, Simplifying the Test for Goodwill Impairment , or ASU-2017, for both goodwill and indefinite-lived intangible impairment testing, we have the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying amount.

In accordance with ASU 2017-04, Simplifying the Test for Goodwill Impairment , or ASU-2017, for both goodwill and indefinite-lived intangible impairment testing, we have the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying amount.

If the fair value of the goodwill or indefinite-lived intangible asset is less than its carrying value, an impairment loss is recognized in earnings in an amount equal to the difference.

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In assessing whether goodwill and other intangible assets are impaired, we must make estimates and assumptions regarding future cash flows, long-term growth rates of our business, operating margins, discount rates, weighted average cost of capital and other factors to determine the fair value of our assets.

These estimates and assumptions require management’s judgment, and changes to these estimates and assumptions, as a result of changing economic and competitive conditions, could materially affect the determination of fair value and/or impairment.

During 2019, we recorded an impairment charge of $31 million on the remaining value of exchange registration intangible assets on ICE Futures Singapore as a result of a decrease in fair value determined during our annual impairment testing.

determination of fair value and/or impairment.

We did not record any impairments in 2022, 2021 or 2020 as a result of our goodwill or indefinite-lived impairment testing.

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If an asset is not recoverable, the loss is measured as the difference between fair value and carrying value of the impaired asset.

Fair value of these assets is based on various valuation techniques, including discounted cash flow analysis.

Fair value of these assets is based on various valuation techniques, including discounted cash flow analysis, which are assessed and conducted in accordance with our internal impairment analysis policies.

We are subject to income taxes in the U.S., U.K.

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Deferred tax assets and liabilities are measured using current enacted tax rates in effect for the years in which those temporary differences and carryforwards are expected to reverse.

The FASB Staff has provided additional guidance to address the accounting for the effects of the provisions related to the taxation of Global Intangible Low-Taxed Income noting that companies should make an accounting policy election to recognize deferred taxes for temporary basis differences expected to reverse in future years or to include the tax expense in the year it is incurred.

The Financial Accounting Standards Board, or FASB, Staff has provided additional guidance to address the accounting for the effects of the provisions related to the taxation of Global Intangible Low-Taxed Income noting that companies should make an accounting policy election to recognize deferred taxes for temporary basis differences expected to reverse in future years or to include the tax expense in the year it is incurred.

We have made a policy election to recognize such taxes as current period expenses when incurred.

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We have exposure to market risk for changes in interest rates relating to our cash and cash equivalents, short-term and long-term restricted cash and cash equivalents, short-term and long-term investments and indebtedness.

As of December 31, 2021 and 2020, our cash and cash equivalents and short-term and long-term restricted cash and cash equivalents were $2.0 billion for both periods, of which $276 million and $245 million, respectively, were denominated in pounds sterling, euros or Canadian dollars, and the remaining amounts are denominated in U.S.

As of December 31, 2022 and 2021, our cash and cash equivalents and short-term and long-term restricted cash and cash equivalents were $8.4 billion and $2.0 billion, respectively, of which $346 million and $276 million, respectively, were denominated in pounds sterling, euros or Canadian dollars, and the remaining amounts are denominated in U.S.

We do not use our investment portfolio for trading or other speculative purposes.

A hypothetical 50% decrease in short-term interest rates would have an immaterial impact on our annual pre-tax earnings as of December 31, 2021, assuming no change in the amount or composition of our cash and cash equivalents and short-term and long-term restricted cash and cash equivalents.

As of December 31, 2021, we had $13.9 billion in outstanding debt, of which $12.9 billion relates to our fixed rate senior notes.

The remaining amount outstanding of $1.0 billion relates to $1.0 billion outstanding under our Commercial Paper Program, which bears interest at fluctuating rates, and $10 million under lines of credit at our India subsidiaries.

A hypothetical 100 basis point increase in short-term interest rates relating to the amounts under our Commercial Paper Program as of December 31, 2021 would decrease annual pre-tax earnings by $10 million, assuming no change in the volume or composition of our outstanding indebtedness and no hedging activity.

A hypothetical 50% decrease in short-term interest rates would decrease our annual pre-tax earnings by $21 million as of December 31, 2022, assuming no change in the amount or composition of our cash and cash equivalents and short-term and long-term restricted cash and cash equivalents.

As of December 31, 2022, we had $18.1 billion in outstanding debt, consisting of $18.1 billion related to our senior notes and $4 million under lines of credit at our India subsidiaries.

See Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations – Debt," and Note 10 to our consolidated financial statements included in this Annual Report.

The interest rates on our Commercial Paper Program are currently evaluated based upon current maturities and market conditions.

The weighted average interest rate on our Commercial Paper Program decreased from 0.40% as of December 31, 2020 to 0.33% as of December 31, 2021.

As of December 31, 2022, we did not have any notes outstanding under our Commercial Paper Program.

The weighted average interest rate on our Commercial Paper Program was 0.33% as of December 31, 2021.

The effective interest rate of commercial paper issuances will continue to fluctuate based on the movement in short-term interest rates along with shifts in supply and demand within the commercial paper market.

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We incurred foreign currency transaction losses of $9 million and $13 million in 2022 and 2021, respectively, inclusive of the impact of foreign currency hedging transactions.

The foreign currency transaction losses were primarily attributable to the fluctuations of the pound sterling and euro relative to the U.S.

The foreign currency transaction losses were primarily attributable to the fluctuations of the pound sterling

and euro relative to the U.S.

A 10% adverse change in the underlying foreign currency exchange rates as of December 31, 2022, assuming no change in the composition of the foreign currency denominated assets, liabilities and payables and assuming no hedging activity, would result in a foreign currency loss of $14 million.

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Canadian dollars Position in euros

Assets £ 722 C$ 2,245 € 220

Assets £ 720 $ 4,298 € 171

of which goodwill represents

Liabilities 101 3,852 52

Net currency position £ 644 C$ 419 € 172

Net currency position £ 619 $ 446 € 119

Net currency position, in $USD $ 748 $ 329 $ 127

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See the table below for the portion of equity attributable to foreign currency translation adjustments as well as the activity by year included within our statement of other comprehensive income.

The impact of

the foreign currency exchange rate differences in the table below were primarily driven by fluctuations of the pound sterling as compared to the U.S.

The impact of the foreign currency exchange rate differences in the table below were primarily driven by fluctuations of the pound sterling as compared to the U.S.

dollar which were 1.2093, 1.3524 and 1.3665 as of December 31, 2022, 2021, and 2020, respectively.

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The ICE Clearing Houses hold material amounts of clearing member margin deposits which are held or invested primarily to provide security of capital while minimizing credit, market and liquidity risks.

Refer to Note 14 to our consolidated financial statements for more information on the ICE Clearing Houses' cash and cash equivalent margin deposits and guaranty funds, invested deposits, delivery contracts receivable and unsettled variation margin which were $150.4 billion as of December 31, 2021.

Refer to Note 14 to our consolidated financial statements for more information on the ICE Clearing Houses' cash and cash equivalent margin deposits and

guaranty funds, invested deposits, delivery contracts receivable and unsettled variation margin which were $147.4 billion as of December 31, 2022.

While we seek to achieve a reasonable rate of return which may generate interest income for our clearing members, we are primarily concerned with preservation of capital and managing the risks associated with these deposits.

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If we were required to sell securities prior to maturity, and interest rates had risen, the sale might be made at a loss relative to the carrying value.

Our clearing houses seek to manage this risk by making short term

Our clearing houses seek to manage this risk by making short term investments.

For example, where possible and in accordance with regulatory requirements, the clearing houses invest cash pursuant to overnight reverse repurchase agreements or term reverse repurchase agreements with short dated maturities.

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Additionally, the securities purchased subject to reverse repurchase have a market value greater than the reverse repurchase amount.

The typical haircut for high quality sovereign debt is 2% of the reverse repurchase amount which provides additional excess collateral.

Thus, in the event that a reverse repurchase counterparty defaults on its obligation to repurchase the underlying reverse repurchase securities, our clearing house will have possession of a security with a value potentially greater than the counterparty’s obligation.

The ICE Clearing Houses may use third-party investment advisors who make investments subject to the guidelines provided by each clearing house.

Such advisors do not hold clearing member cash or cash equivalent deposits or the underlying investments.

Clearing house property is held in custody accounts under clearing house control with credit worthy custodians.

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Impact of Inflation

We have not been adversely affected by inflation as technological advances and competition have generally caused prices for the hardware and software that we use for our electronic platforms to remain constant.

In the event of inflation, we believe that we will be able to pass on any price increases to our participants, as the prices that we charge are not governed by long-term contracts.

We have not been materially adversely affected by inflation as technological advances and competition have generally caused prices for the hardware and software that we use for our electronic platforms to remain constant.

In the event of continued inflation, we believe that we will be able to pass on any price increases to our participants, as the prices that we charge are not governed by long-term contracts.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis