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Intercontinental Exchange, Inc. - Quarter Report: 2021 March (Form 10-Q)


 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-Q
 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                 to
Commission File Number 001-36198
INTERCONTINENTAL EXCHANGE, INC.
(Exact name of registrant as specified in its charter)
 
Delaware46-2286804
(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Identification Number)
5660 New Northside Drive,
Atlanta, Georgia
30328
(Address of principal executive offices) (Zip Code)
(770) 857-4700
Registrant’s telephone number, including area code 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.01 par value per shareICENew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company  
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.          
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No  
As of April 26, 2021, the number of shares of the registrant’s Common Stock outstanding was 562,765,755 shares.




 
 
INTERCONTINENTAL EXCHANGE, INC.
Form 10-Q
Quarterly Period Ended March 31, 2021
TABLE OF CONTENTS
 
 
PART I.
Financial Statements
Item 1.
Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020
Consolidated Statements of Income for the three months ended March 31, 2021 and 2020
Consolidated Statements of Comprehensive Income for the three months ended March 31, 2021 and 2020
Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interest for the three months ended March 31, 2021 and 2020
Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020
Item 2.
Item 3.
Item 4.
PART II.
Other Information
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



PART I. Financial Statements
Item 1.    Consolidated Financial Statements (Unaudited)

Intercontinental Exchange, Inc. and Subsidiaries
Consolidated Balance Sheets
(In millions, except per share amounts)
(Unaudited)
As ofAs of
March 31, 2021December 31, 2020
Assets:
Current assets:
Cash and cash equivalents
$562 $583 
Short-term restricted cash and cash equivalents
1,065 1,000 
Customer accounts receivable, net of allowance for doubtful accounts of $27 at March 31, 2021 and December 31, 2020
1,530 1,230 
Margin deposits, guaranty funds and delivery contracts receivable
85,608 84,083 
Prepaid expenses and other current assets
410 323 
Total current assets
89,175 87,219 
Property and equipment, net
1,731 1,713 
Other non-current assets:
Goodwill
21,304 21,291 
Other intangible assets, net
14,242 14,408 
Long-term restricted cash and cash equivalents
398 408 
Other non-current assets
1,195 1,161 
Total other non-current assets
37,139 37,268 
Total assets
$128,045 $126,200 
Liabilities and Equity:
Current liabilities:
Accounts payable and accrued liabilities
$673 $639 
Section 31 fees payable
123 207 
Accrued salaries and benefits
136 346 
Deferred revenue
523 158 
Short-term debt
2,068 2,411 
Margin deposits, guaranty funds and delivery contracts payable
85,608 84,083 
Other current liabilities
271 155 
Total current liabilities
89,402 87,999 
Non-current liabilities:
Non-current deferred tax liability, net
3,527 3,563 
Long-term debt
14,131 14,126 
Accrued employee benefits
203 206 
Non-current operating lease liability
306 320 
Other non-current liabilities
391 359 
Total non-current liabilities
18,558 18,574 
Total liabilities
107,960 106,573 
Commitments and contingencies
Redeemable non-controlling interest in consolidated subsidiaries
91 93 
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Equity:
Intercontinental Exchange, Inc. stockholders’ equity:
Preferred stock, $0.01 par value; 100 shares authorized; none issued or outstanding at March 31, 2021 and December 31, 2020
— — 
Common stock, $0.01 par value; 1,500 shares authorized; 631 and 629 issued at March 31, 2021 and December 31, 2020, respectively, and 563 and 561 shares outstanding at March 31, 2021 and December 31, 2020, respectively
Treasury stock, at cost; 68 shares at March 31, 2021 and December 31, 2020
(5,265)(5,200)
Additional paid-in capital
13,908 13,845 
Retained earnings
11,498 11,039 
Accumulated other comprehensive loss
(184)(192)
Total Intercontinental Exchange, Inc. stockholders’ equity
19,963 19,498 
Non-controlling interest in consolidated subsidiaries
31 36 
Total equity
19,994 19,534 
Total liabilities and equity
$128,045 $126,200 

See accompanying notes.
3


Intercontinental Exchange, Inc. and Subsidiaries
Consolidated Statements of Income
(In millions, except per share amounts)
(Unaudited)
Three Months Ended March 31,
20212020
Revenues:
Exchanges
$1,606 $1,605 
Fixed income and data services
468 464 
Mortgage technology
355 46 
Total revenues
2,429 2,115 
Transaction-based expenses:
Section 31 fees
125 166 
Cash liquidity payments, routing and clearing
507 390 
Total revenues, less transaction-based expenses
1,797 1,559 
Operating expenses:
Compensation and benefits
354 278 
Professional services
44 29 
Acquisition-related transaction and integration costs
18 12 
Technology and communication
162 131 
Rent and occupancy
21 21 
Selling, general and administrative
51 49 
Depreciation and amortization
255 157 
Total operating expenses
905 677 
Operating income
892 882 
Other income (expense):
Interest income
— 
Interest expense
(107)(72)
Other income, net
48 20 
Other income (expense), net
(59)(46)
Income before income tax expense
833 836 
Income tax expense
183 178 
Net income
$650 $658 
Net income attributable to non-controlling interest
(4)(8)
Net income attributable to Intercontinental Exchange, Inc.
$646 $650 
Earnings per share attributable to Intercontinental Exchange, Inc. common stockholders:
Basic
$1.15 $1.18 
Diluted
$1.14 $1.17 
Weighted average common shares outstanding:
Basic
562 552 
Diluted
565 555 

See accompanying notes.
4


Intercontinental Exchange, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(In millions)
(Unaudited)
Three Months Ended March 31,
20212020
Net income
$650 $658 
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax benefit of $1 for the three months ended March 31, 2021 and no tax benefit for the three months ended March 31, 2020
(90)
Change in equity method investment
— 
Other comprehensive income (loss)
(90)
Comprehensive income
$658 $568 
Comprehensive income attributable to non-controlling interest
(4)(8)
Comprehensive income attributable to Intercontinental Exchange, Inc.
$654 $560 

See accompanying notes.
5


Intercontinental Exchange, Inc. and Subsidiaries
Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interest
(In millions)
(Unaudited)

Intercontinental Exchange, Inc. Stockholders’ EquityNon-
Controlling
Interest in
Consolidated
Subsidiaries
Total
Equity
Redeemable Non-Controlling Interest
Common
 Stock
Treasury StockAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income/(Loss)
SharesValueSharesValue
Balance, as of December 31, 2020
629 $(68)$(5,200)$13,845 $11,039 $(192)$36 $19,534 $93 
Other comprehensive income
— — — — — — — — 
Exercise of common stock options
— — — — — — — — 
Payments relating to treasury shares
— — — (65)— — — — (65)— 
Stock-based compensation
— — — — 42 — — — 42 — 
Issuance under the employee stock purchase plan
— — — — 18 — — — 18 — 
Issuance of restricted stock
— — — — — — — — — 
Distributions of profits
— — — — — — — (11)(11)— 
Dividends paid to stockholders
— — — — — (187)— — (187)— 
Net income (loss) attributable to non-controlling interest
— — — — — (4)— (2)
Net income
— — — — — 650 — — 650 — 
Balance, as of March 31, 2021
631 $(68)$(5,265)$13,908 $11,498 $(184)$31 $19,994 $91 

Intercontinental Exchange, Inc. Stockholders’ EquityNon-
Controlling
Interest in
Consolidated
Subsidiaries
Total
Equity
Redeemable Non-Controlling Interest
Common
 Stock
Treasury StockAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income/(Loss)
SharesValueSharesValue
Balance, as of December 31, 2019
607 $(53)$(3,879)$11,742 $9,629 $(243)$31 $17,286 $78 
Impact of adoption of ASU 2016-13, net of tax— — — — — (10)— — (10)— 
Other comprehensive loss
— — — — — — (90)— (90)— 
Exercise of common stock options
— — — — 11 — — — 11 — 
Repurchases of common stock
— — (8)(699)— — — — (699)— 
Payments relating to treasury shares
— — — (69)— — — — (69)— 
Stock-based compensation
— — — — 38 — — — 38 
Issuance under the employee stock purchase plan
— — — — 16 — — — 16 — 
Warrants issued to minority interest holders— — — — — — — 
Issuance of restricted stock
— — — — — — — — — 
Distributions of profits
— — — — — — — (15)(15)— 
Dividends paid to stockholders
— — — — — (166)— — (166)— 
Redeemable non-controlling interest— — — — — — — — — 10 
Net income (loss) attributable to non-controlling interest
— — — — — (8)— 10 (2)
Net income
— — — — — 658 — — 658 — 
Balance, as of March 31, 2020
609 $(61)$(4,647)$11,810 $10,103 $(333)$26 $16,965 $97 

See accompanying notes.









6




Intercontinental Exchange, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In millions)
(Unaudited)

Three Months Ended March 31,
20212020
Operating activities:
Net income
$650 $658 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
255 157 
Stock-based compensation
36 41 
Deferred taxes
(22)(3)
Other
(10)(11)
Changes in assets and liabilities:
Customer accounts receivable
(303)(600)
  Other current and non-current assets(108)(35)
Section 31 fees payable
(84)27 
Deferred revenue
375 372 
Other current and non-current liabilities
(55)(86)
Total adjustments
84 (138)
Net cash provided by operating activities
734 520 
 Investing activities:
Capital expenditures
(40)(15)
Capitalized software development costs
(76)(44)
Cash paid for acquisitions, net of cash acquired
— (249)
Proceeds from investments, net
— 
Net cash used in investing activities
(116)(302)
Financing activities:
 Proceeds from/(redemption of) commercial paper, net (343)503 
Repurchases of common stock
— (699)
Dividends to stockholders
(187)(166)
Payments relating to treasury shares received for restricted stock tax payments and stock option exercises
(65)(69)
Other
12 20 
Net cash used in financing activities
(583)(411)
 Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents(1)(9)
Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents
34 (202)
Cash, cash equivalents, and restricted cash and cash equivalents, beginning of period
1,991 2,188 
Cash, cash equivalents, and restricted cash and cash equivalents, end of period
$2,025 $1,986 
Supplemental cash flow disclosure:
Cash paid for income taxes
$131 $127 
Cash paid for interest
$128 $69 

See accompanying notes.
7


Intercontinental Exchange, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)

1.Description of Business
Nature of Business and Organization
We are a provider of market infrastructure, data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities. These products, which span major asset classes including futures, equities, fixed income and United States, or U.S., residential mortgages, provide our customers with access to mission critical workflow tools that are designed to increase asset class transparency and workflow efficiency.
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 and execution services as well as global credit default swap, or 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 operate marketplaces and provide data services in the U.S., United Kingdom, or U.K., European Union, or EU, Canada, Singapore and Abu Dhabi Global Market, or ADGM, and offer technology and data solutions to the U.S. mortgage industry.

2.     Summary of Significant Accounting Policies
Basis of Presentation
We prepared the accompanying unaudited consolidated financial statements in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with our audited consolidated financial statements and related notes thereto for the year ended December 31, 2020. The accompanying unaudited consolidated financial statements reflect all adjustments that are, in our opinion, necessary for a fair presentation of results for the interim periods presented. We believe that these adjustments are of a normal recurring nature.
Preparing financial statements in conformity with U.S. GAAP requires us to make certain estimates and assumptions that affect the amounts that are reported in our consolidated financial statements and accompanying disclosures. Actual amounts could differ from those estimates. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for any future period or the full fiscal year.
These statements include the accounts of our wholly-owned and controlled subsidiaries. All intercompany balances and transactions between us and our wholly-owned and controlled subsidiaries have been eliminated in consolidation. For consolidated subsidiaries in which our ownership is less than 100% and for which we have control over the assets and liabilities and the management of the entity, the outside stockholders’ interests are shown as non-controlling interests. Where outside owners hold an option to require us to repurchase their interests, these amounts are shown as redeemable non-controlling interests and are subject to remeasurement when repurchase is probable.
We previously operated and presented our results as two reportable business segments. Effective October 1, 2020, we changed our internal financial reporting and the captions in which we present revenue in our financial statements because we determined that a change in reportable segments had occurred (Note 16). As of March 31, 2021, our business is conducted through three reportable business segments: our Exchanges segment, our Fixed Income and Data Services segment, and our Mortgage Technology segment. Prior periods have been restated to reflect this change. The majority of our identifiable assets are located in the U.S and U.K.
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Recently Adopted Accounting Pronouncements
During the three months ended March 31, 2021, there were no significant changes to the new and recently adopted accounting pronouncements applicable to us from those disclosed in Note 2 of our Annual Report on Form 10-K for the year ended December 31, 2020, or the Form 10-K.

3.     Acquisitions and Divestitures
Ellie Mae Acquisition
On September 4, 2020, we acquired Ellie Mae, Inc., or Ellie Mae, for aggregate consideration of $11.4 billion from private equity firm Thoma Bravo. The purchase price consisted of $9.5 billion in cash, as adjusted for $335 million of cash and cash equivalents held by Ellie Mae on the date of acquisition, and approximately $1.9 billion, or approximately 18.4 million shares of our common stock, based on our stock price on the acquisition date. ICE funded the cash portion of the purchase price with net proceeds from our offering of senior notes in August 2020, together with the issuance of commercial paper and borrowings under a senior unsecured term loan facility. We have evaluated the impact of this acquisition and related disclosures under ASC 805- Business Combinations.
The purchase price has been allocated to the net tangible and identifiable intangible assets and liabilities based on the preliminary respective estimated fair values on the date of acquisition, as determined with the assistance of a third-party valuation specialist. The excess of purchase price over the net tangible and identifiable intangible assets has been recorded as goodwill. Goodwill represents potential revenue synergies related to new product development, various expense synergies and opportunities to enter new markets. The preliminary purchase price allocation is as follows (in millions):
Preliminary Purchase Price Allocation
Cash and cash equivalents$335 
Property and equipment127 
Goodwill7,719 
Identifiable intangibles4,442 
Other assets and liabilities, net51 
Deferred tax liabilities on identifiable intangibles(1,246)
Total preliminary purchase price allocation$11,428 

In performing the preliminary purchase price allocation, we considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of the Ellie Mae business. We have not yet obtained all of the information related to the fair value of the acquired assets and liabilities.
The primary areas of the preliminary purchase price allocation that are not yet finalized relate to income taxes and certain other tangible assets and liabilities. The allocation of the purchase price will be finalized upon the completion of the analysis of the acquired assets and liabilities within one year of the date of acquisition.
The following table sets forth the components of the preliminary intangible assets associated with the acquisition as of March 31, 2021 (in millions, except years):
Acquisition-Date Preliminary Fair ValueAccumulated AmortizationNet Book ValueUseful Life (Years)
Customer relationships$3,136 $(93)$3,043 
10 to 20
Backlog300 (34)266 
5
Trademark/Tradenames200 (6)194 
5 to 20
 Developed Technology739 (61)678 7
 In-process Research & Development67 — 67 N/A
Total $4,442 $(194)$4,248 

The financial information in the table below summarizes the combined results of operations of ICE and Ellie Mae, on a pro forma basis, as though the companies had been combined as of the beginning of the period presented. The unaudited pro
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forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented. Such unaudited pro forma financial information is based on the historical financial statements of ICE and Ellie Mae. This unaudited pro forma financial information is based on estimates and assumptions that have been made solely for purposes of developing such unaudited pro forma information, including, without limitation, purchase accounting adjustments, interest expense on debt issued to finance the purchase price, acquisition-related transaction costs, the removal of historical Ellie Mae intangible asset amortization and the addition of intangible asset amortization related to this acquisition. The unaudited pro forma financial information does not reflect any synergies or operating cost reductions that have been and may be achieved from the combined operations. The unaudited pro forma financial information combines the historical results for us and Ellie Mae for the three months ended March 31, 2020 in the following table (in millions).
Three months ended March 31, 2020
Total revenues, less transaction-based expenses$1,733 
Net income attributable to ICE$608 
Transaction-based expenses included within revenues, less transaction-based expenses in the table above, were not impacted by pro forma adjustments and agree to the amounts presented historically in our consolidated income statements as they relate solely to ICE and not to Ellie Mae.
Bakkt Transaction
On January 11, 2021, we announced that Bakkt Holdings, LLC, or Bakkt, had entered into a definitive agreement to combine with VPC Impact Acquisition Holdings, or VIH, a special purpose acquisition company sponsored by Victory Park Capital, or VPC.
The business combination between Bakkt and VIH is expected to result in over $500 million of cash on the combined company’s balance sheet, reflecting a contribution of up to $207 million of cash held in VIH’s trust account, and a $325 million concurrent private placement, or PIPE, of Class A common stock of the combined company, priced at $10.00 per share, including a $50 million commitment from us. The newly combined company will be renamed Bakkt Holdings, Inc. and is expected to be listed on the New York Stock Exchange, or NYSE.
As part of the transaction, Bakkt’s existing equity holders and management will roll 100% of their equity into the combined company. Assuming no shareholders of VIH exercise their redemption rights, current Bakkt equity holders, including ICE, will own approximately 78% of the combined company, VIH’s public shareholders will own approximately 8%, VPC will own 2%, and PIPE investors (a group that will also include us) will own approximately 12% of the issued and outstanding common stock of the combined company at closing.
Following completion of the business combination, which is expected to occur by the end of the second quarter of 2021, we are expected to have a 65% economic interest and a minority voting interest in the combined company. Prior to the closing, Bakkt revenues and operating expenses continue to be reported within our consolidated revenues and operating expenses. Following the closing, we will have a minority voting interest in the combined company and as a consequence, we expect to deconsolidate Bakkt and treat it as an equity method investment within our financial statements. As of March 31, 2021, we continue to fully consolidate Bakkt and have not applied accounting treatment under the "held for sale" guidance due to conditional regulatory and shareholder approvals.

4. Allowance for Credit Losses

Accounts Receivable

We measure credit losses in accordance with Accounting Standards Update 2016-13, or ASU 2016-13, Financial Instruments- Measurement of Credit Losses on Financial Instruments. Based on the high turnover and collectability of our accounts receivable, as well as the monthly billing process for the majority of revenue, we have not experienced significant changes in our loss provision under the current expected credit loss, or CECL, model. Accounts receivable in our futures and clearing businesses have minimal credit risk as all clearing members are pre-screened, collection periods occur within one month and the services to customers are completed almost instantaneously. Our accounts receivable related to revenues from market data, cash trading, listings, technology services, mortgage technology, CDS transactions and bilateral OTC energy transactions subject us to credit losses, but we expeditiously limit our risk of credit loss by taking action such as terminating trading or transaction access, terminating public listings or ceasing to distribute data for entities with delinquent accounts. The concentration of risk on our accounts receivable is also mitigated by the high quality and the large number of entities comprising our customer base.

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We estimate our allowance for doubtful accounts using an aging method, disaggregated based on major revenue stream categories as well as other unique revenue stream factors. The factors for pooling our accounts receivable balances are specific to each revenue stream based on our risk assessment, past patterns of collectability, our knowledge of the business, and customer-specific situations. We apply estimated reserve percentages to the risk pools identified, which are derived from historical write-off factors that are based on the accounts receivable balance’s delinquency status and adjusted as appropriate for our reasonable and supportable estimates of current and future economic conditions. We believe that historical write-off trends provide a basis for estimating future patterns of losses because there have been no significant changes in the mix or risk characteristics of the accounts receivable revenue stream pool populations from the risk pools used to calculate our historical write-off rates. At each measurement date we reassess whether our accounts receivable pools continue to exhibit similar risk characteristics. We then determine if assets need to be isolated further as part of their own specific line item reserve due to specific events, such as a customer’s inability to meet its financial obligations (i.e. customer disputes, highly unresponsive customers, delinquency of the receivable, or other indicators of credit deterioration of customers). Lastly, the CECL impairment model is forward-looking and requires us to factor reasonable and supportable economic expectations into our allowance estimate for the asset's entire expected life, which is generally less than one year.
A reconciliation of the beginning and ending amount of allowance for doubtful accounts is as follows for the three months ended March 31, 2021 (in millions):
Allowance for Doubtful Accounts
Beginning balance as of December 31, 2020
$27 
Bad debt expense
Charge-offs
(3)
Ending balance as of March 31, 2021
$27 
We have included in our allowance assessment the impact of and our responses to the coronavirus, or COVID-19, pandemic. Our bad debt expense in the table above includes that assessment, the impact of which was not material for the three months ended March 31, 2021. We will continue to review our accounts receivable and may incur future charge-offs as better estimates become available in future periods. Charge-offs in the table above represent the write-off of uncollectible receivables, net of recoveries. These amounts also include the impact of foreign currency translation adjustments.

5. Investments
Our equity investments, including our investments in Euroclear plc, or Euroclear, and Coinbase Global, Inc., or Coinbase, among others, are subject to valuation under ASU 2016-01, Financial Instruments- Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, or ASU 2016-01. See Note 15 for a discussion of our determination of fair value of our financial instruments.
Investment in Coinbase
On December 1, 2014, we acquired preferred stock of Coinbase, which operates a cryptocurrency exchange platform, for $10 million, representing a 1.4% ownership share on a fully-diluted, as-converted basis. On April 14, 2021, Coinbase completed an initial public offering, or IPO. On April 15, 2021, we completed the sale of our investment in Coinbase for $1.24 billion, and will record a gain of $1.23 billion in the second quarter of 2021 as other income in our consolidated statement of income (Note 18). Prior to its IPO, Coinbase did not have a readily determinable fair market value, and we accounted for our investment under a fair value policy election made in accordance with ASU 2016-01. This election required us to only adjust the fair value of such investments if and when there is an observable price change in an orderly transaction of a similar or identical investment, with any change in fair value recognized in net income. As of March 31, 2021, the carrying value of our Coinbase investment was $10 million.
Investment in OCC
We own a 40% interest in the Options Clearing Corporation, or OCC, through a direct investment by the NYSE and which is regulated by the SEC and the Commodity Futures Trading Commission, or CFTC, that we treat as an equity method investment. As of March 31, 2021, OCC is our only equity method investment and is included in other non-current assets in the accompanying consolidated balance sheet. We recognized $25 million and $17 million during the three months ended March 31, 2021 and 2020, respectively, of equity earnings as our share of OCC's estimated profits, which is included in other income. Included within the amount recognized in 2021 is a $16 million earnings adjustment to reflect
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higher than reported 2020 net income than originally estimated by OCC. Similarly, included within the amount recognized in 2020 is a $7 million earnings adjustment to reflect higher than reported 2019 net income than originally estimated.
Investment in Euroclear
We own a 9.8% stake in Euroclear as of March 31, 2021, and we participate on the Euroclear Board of Directors. Euroclear is a provider of post-trade services, including settlement, central securities depositories and related services for cross-border transactions across asset classes. We classify our investment in Euroclear as an equity investment included in other non-current assets in our accompanying consolidated balance sheets. We recognized dividend income of $30 million during the three months ended March 31, 2021, which is included in other income. As a result of a 2020 European regulation limiting dividend payments, we did not receive a Euroclear dividend in 2020.

6. Revenue Recognition
Substantially all of our revenues are considered to be revenues from contracts with customers. The related accounts receivable balances are recorded in our balance sheets as customer accounts receivable. We do not have obligations for warranties, returns or refunds to customers, other than rebates, which are settled each period and therefore do not result in variable consideration. We do not have significant revenue recognized from performance obligations that were satisfied in prior periods, and we do not have any transaction price allocated to unsatisfied performance obligations other than in our deferred revenue.
Deferred revenue represents our contract liabilities related to our annual, original and other listings revenues, certain data services, clearing services, mortgage technology services and other revenues. Deferred revenue is our only significant contract liability. See Note 8 for our discussion of deferred revenue balances, activity, and expected timing of recognition.
We have elected not to provide disclosures about the transaction price allocated to unsatisfied performance obligations if contract durations are less than one year, or if we are not required to estimate the transaction price. For all of our contracts with customers, except for listings and certain data, clearing and mortgage services, our performance obligations are short term in nature and there is no significant variable consideration. In addition, we have elected the practical expedient of excluding sales taxes from transaction prices. We have assessed the costs incurred to obtain or fulfill a contract with a customer and determined them to be immaterial.
Certain judgments and estimates are used in the identification and timing of satisfaction of performance obligations and the related allocation of transaction price. We believe that these represent a faithful depiction of the transfer of services to our customers. Refer to Note 5 to our consolidated financial statements included in our 2020 Form 10-K where our primary revenue contract classifications are described in detail.

The following table depicts the disaggregation of our revenue according to business line and segment (in millions). Amounts here have been aggregated as they follow consistent revenue recognition patterns, and are consistent with the segment information in Note 16:
 Exchanges SegmentFixed Income and Data Services SegmentMortgage Technology SegmentTotal Consolidated
Three months ended March 31, 2021:
Exchanges$1,606 $— $— $1,606 
Fixed income and data services— 468 — 468 
Mortgage technology— — 355 355 
Total revenues1,606 468 355 2,429 
Transaction-based expenses632 — — 632 
Total revenues, less transaction-based expenses$974 $468 $355 $1,797 
Timing of Revenue Recognition
Services transferred at a point in time$561 $60 $221 $842 
Services transferred over time413 408 134 955 
Total revenues, less transaction-based expenses$974 $468 $355 $1,797 

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 Exchanges SegmentFixed Income and Data Services SegmentMortgage Technology SegmentTotal Consolidated
Three months ended March 31, 2020:
Exchanges$1,605 $— $— $1,605 
Fixed income and data services— 464 — 464 
Mortgage technology— — 46 46 
Total revenues1,605 464 46 2,115 
Transaction-based expenses556 — — 556 
Total revenues, less transaction-based expenses$1,049 $464 $46 $1,559 
Timing of Revenue Recognition
Services transferred at a point in time$638 $83 $44 $765 
Services transferred over time411 381 794 
Total revenues, less transaction-based expenses$1,049 $464 $46 $1,559 

The Exchanges segment revenues above include $207 million and $193 million of data services revenues for the three months ended March 31, 2021 and 2020, respectively, and Fixed Income and Data Services segment revenues above include $399 million and $371 million of data services revenues for the three months ended March 31, 2021 and 2020, respectively, for services transferred over time. A majority of those revenues are performed over a short period of time of one month or less and relate to subscription-based data services billed monthly, quarterly or annually in advance. These revenues are recognized ratably over time as our data delivery performance obligations are met consistently throughout the period. The Exchanges segment revenues above also include $66 million and $78 million for the three months ended March 31, 2021 and 2020, respectively, for services transferred over time related to risk management of open interest performance obligations. The Fixed Income and Data Services segment revenues above also include $9 million and $10 million for the three months ended March 31, 2021 and 2020, respectively, for services transferred over time related to risk management of open interest performance obligations. The Mortgage Technology segment revenues transferred over time in the table above primarily relate to our origination technology revenue where performance obligations consist of a series of distinct services and are recognized over the contract terms as subscription performance obligations are satisfied. Contracts generally range from one year to five years.

7. Goodwill and Other Intangible Assets
The following is a summary of the activity in the goodwill balance for the three months ended March 31, 2021 (in millions):
Goodwill balance at December 31, 2020
$21,291 
Foreign currency translation
  Other activity, net
10 
Goodwill balance at March 31, 2021
$21,304 
The following is a summary of the activity in the other intangible assets balance for the three months ended March 31, 2021 (in millions):
Other intangible assets balance at December 31, 2020
$14,408 
Foreign currency translation
Amortization of other intangible assets
(159)
Other activity, net
(11)
Other intangible assets balance at March 31, 2021
$14,242 
Foreign currency translation adjustments result from a portion of our goodwill and other intangible assets being held at our U.K., EU and Canadian subsidiaries, whose functional currencies are not the U.S. dollar. The change in other activity, net, primarily relates to adjustments to the fair value of the net tangible and intangible assets relating to acquisitions, with a corresponding adjustment to goodwill. We have performed an analysis of impairment indicators and did not recognize any impairment losses on goodwill or other intangible assets during the three months ended March 31, 2021.

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8. Deferred Revenue
Our contract liabilities, or deferred revenue, represent consideration received that is yet to be recognized as revenue. Total deferred revenue was $634 million as of March 31, 2021, including $523 million in current deferred revenue and $111 million in other non-current liabilities. The changes in our deferred revenue during the three months ended March 31, 2021 are as follows (in millions):
Annual Listings RevenuesOriginal Listings RevenuesOther Listings RevenuesData Services and Other RevenuesMortgage TechnologyTotal
Deferred revenue balance at December 31, 2020
$— $13 $92 $95 $59 $259 
Additions
377 24 175 19 604 
Amortization
(96)(6)(12)(105)(10)(229)
Deferred revenue balance at March 31, 2021
$281 $16 $104 $165 $68 $634 

The changes in our deferred revenue during the three months ended March 31, 2020 are as follows (in millions):
Annual Listings RevenuesOriginal Listings RevenuesOther Listings RevenuesData Services and Other RevenuesTotal
Deferred revenue balance at December 31, 2019
$— $19 $94 $88 $201 
Additions
381 21 186 592 
Amortization
(96)(5)(11)(96)(208)
Deferred revenue balance at March 31, 2020
$285 $18 $104 $178 $585 
Included in the amortization recognized during the three months ended March 31, 2021 is $62 million related to the deferred revenue balance as of December 31, 2020. Included in the amortization recognized for the three months ended March 31, 2020 is $44 million related to the deferred revenue balance as of December 31, 2019. As of March 31, 2021, the remaining deferred revenue balance will be recognized over the period of time we satisfy our performance obligations as described in Note 6. Deferred revenue for mortgage technology is related to Ellie Mae and has been included as of March 31, 2021 and December 31, 2020 following our September 2020 acquisition of Ellie Mae.

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9. Debt
Our total debt, including short-term and long-term debt, consisted of the following as of March 31, 2021 and December 31, 2020 (in millions):
As of March 31, 2021As of December 31, 2020
Debt:
Short-term debt:
Commercial Paper$2,062 $2,405 
Other short-term debt
Total short-term debt2,068 2,411 
Long-term debt:
2022 Senior Notes (2.35% senior unsecured notes due September 15, 2022)
499 498 
2023 Senior Notes (floating rate senior unsecured notes due June 15, 2023)
1,245 1,244 
2023 Senior Notes (0.70% senior unsecured notes due June 15, 2023)
995 995 
2023 Senior Notes (3.45% senior unsecured notes due September 21, 2023)
399 398 
2023 Senior Notes (4.00% senior unsecured notes due October 15, 2023)
796 796 
2025 Senior Notes (3.75% senior unsecured notes due December 1, 2025)
1,245 1,245 
2027 Senior Notes (3.10% senior unsecured notes due September 15, 2027)
497 496 
2028 Senior Notes (3.75% senior unsecured notes due September 21, 2028)
593 593 
2030 Senior Notes (2.10% senior unsecured notes due June 15, 2030)
1,232 1,232 
2032 Senior Notes (1.85% senior unsecured notes due September 15, 2032)
1,482 1,481 
2040 Senior Notes (2.65% senior unsecured notes due September 15, 2040)
1,229 1,229 
2048 Senior Notes (4.25% senior unsecured notes due September 21, 2048)
1,230 1,230 
2050 Senior Notes (3.00% senior unsecured notes due June 15, 2050)
1,219 1,219 
2060 Senior Notes (3.00% senior unsecured notes due September 15, 2060)
1,470 1,470 
Total long-term debt14,131 14,126 
Total debt $16,199 $16,537 
Our current fixed rate senior notes of $12.9 billion have a weighted average maturity of 16 years and a weighted average cost of 3.0% per annum.
Credit Facilities
We have a $3.8 billion senior unsecured revolving credit facility, or the Credit Facility, with a maturity date of August 21, 2025 and future capacity to increase our borrowings under the Credit Facility by an additional $625 million, subject to the consent of the lenders funding the increase and certain other conditions. No amounts were outstanding under the Credit Facility as of March 31, 2021.
As of March 31, 2021, of the $3.8 billion that is currently available for borrowing under the Credit Facility, $2.1 billion is required to back-stop the amount outstanding under our U.S. dollar commercial paper program, or the Commercial Paper Program, and $172 million is required to support certain broker-dealer and other subsidiary commitments. The amount required to back-stop the amounts outstanding under the Commercial Paper Program will fluctuate as we increase or decrease our commercial paper borrowings. The remaining $1.5 billion is available for working capital and general corporate purposes including, but not limited to, acting as a back-stop to future increases in the amounts outstanding under the Commercial Paper Program.
Our India subsidiaries maintain $20 million of credit lines for their general corporate purposes. As of March 31, 2021, they had borrowed $6 million, which is reflected as “other short-term debt” in the table above.
Commercial Paper Program
Our Commercial Paper Program is currently backed by the borrowing capacity available under the Credit Facility, as described above. The effective interest rate of commercial paper issuances does not materially differ from short-term interest rates, which fluctuate due to market conditions and as a result may impact our interest expense. During the three months ended March 31, 2021, we had net repayments of $343 million under the Commercial Paper Program.
Commercial paper notes of $2.1 billion with original maturities ranging from one to 176 days were outstanding as of March 31, 2021, with a weighted average interest rate of 0.33% per annum, and a weighted average remaining maturity of 41 days.
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10. Share-Based Compensation
We currently sponsor employee and director stock option, restricted stock and employee stock purchase plans. Stock options and restricted stock are granted at the discretion of the Compensation Committee of our Board of Directors, or Board, based on the estimated fair value on the date of grant. The fair value of the stock options and restricted stock on the date of grant is recognized as expense over the vesting period, net of forfeitures. The non-cash compensation expenses recognized in our consolidated statements of income for stock options, restricted stock and under our employee stock purchase plan, net of amounts classified as capitalized software, were $36 million and $41 million for the three months ended March 31, 2021 and 2020, respectively. This includes the expense related to the Bakkt Incentive Units, described below.
Stock Option Plans
We use the Black-Scholes option pricing model to value our stock option awards. During the three months ended March 31, 2021 and 2020, we used the assumptions in the table below to compute the value:
Three Months Ended March 31,
Assumptions:20212020
Risk-free interest rate
0.64%1.46%
Expected life in years
5.75.8
Expected volatility
24%20%
Expected dividend yield
1.16%1.30%
Estimated weighted-average fair value of options granted per share
$22.70$16.65
The risk-free interest rate is based on the zero-coupon U.S. Treasury yield curve in effect at the date of grant. The expected life is derived from historical and anticipated future exercise patterns. Expected volatility is based on historical volatility data of our stock.
Restricted Stock Plans
Restricted shares are used as an incentive to attract and retain qualified employees and to align our and our stockholders' interests by linking actual performance to both short and long-term stockholder return. We issue awards that may contain a combination of time, performance and/or market conditions. The grant date fair value of each award is based on the closing stock price of our stock at the date of grant. For time-based restricted stock, we recognize expense ratably over the vesting period, which is typically three years, net of forfeitures.
In February 2021, we reserved a maximum of 0.7 million restricted shares for potential issuance as performance-based restricted shares to certain of our employees. The number of shares ultimately granted under this award will be based on our actual financial performance as compared to financial performance targets set by our Board and the Compensation Committee for the year ending December 31, 2021, and will also be subject to a market condition reduction based on how our 2021 total stockholder return, or TSR, compares to that of the S&P 500 Index. The maximum compensation expense to be recognized under these performance-based restricted shares is $77 million if the maximum financial performance target is met and all 0.7 million shares vest. The compensation expense to be recognized under these performance-based restricted shares will be $38 million if the target financial performance is met, which would result in 0.4 million shares vesting. For these awards with performance conditions, we recognize expense on an accelerated basis over the three-year vesting period based on our quarterly assessment of the probable 2021 actual financial performance as compared to the 2021 financial performance targets. As of March 31, 2021, our best estimate is that the financial performance level will be at target for 2021. Based on this assessment, we recorded non-cash compensation expense of $3 million for the three months ended March 31, 2021 related to these awards and the remaining $35 million in non-cash compensation expense will be recorded on an accelerated basis over the remaining vesting period, including $18 million which will be recorded over the remainder of 2021.
We also issue awards with a market condition but no performance condition. The fair value of these awards is estimated based on a simulation of various outcomes and includes inputs such as our stock price on the grant date, the valuation of historical awards with market conditions, the relatively low likelihood that the market condition will affect the number of shares granted (as the market condition only affects shares granted in excess of certain financial performance targets), and our expectation of achieving the financial performance targets.
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Bakkt Incentive Units
We sponsor the Bakkt Equity Incentive Plan under which Bakkt issues various Bakkt preferred, common and phantom, or participation, equity unit awards. These awards were made to certain employees and board members of Bakkt. The units are unvested at the issuance date, are subject to the vesting terms in the award agreements and upon vesting are converted into Bakkt equity or cash.
During the three months ended March 31, 2020, there was a $300 million capital call related to the acquisition of Bridge2 Solutions that triggered a market condition of certain of these Bakkt equity incentive awards. The market condition is based on numerous possible Bakkt transaction or event scenarios established on the original date of grant, each of which have a fixed fair market value. Over the life of these awards, we are required to estimate the most likely outcome and reflect the cumulative financial statement impact of any changes between outcomes. As a result, during the three months ended March 31, 2020, we incurred a $10 million compensation expense related to these awards that was recorded as an acquisition-related cost.

11.      Equity
Stock Repurchase Program
In December 2019, our Board approved an aggregate of $2.4 billion for future repurchases of our common stock with no fixed expiration date that became effective on January 1, 2020. The $2.4 billion replaced the previous amount approved by the Board. We fund repurchases from our operating cash flow or borrowings under our debt facilities or our Commercial Paper Program. Repurchases may be made from time to time on the open market, through established trading plans, in privately-negotiated transactions or otherwise, in accordance with all applicable securities laws, rules and regulations. We may begin or discontinue stock repurchases at any time and may amend or terminate a Rule 10b5-1 trading plan at any time or enter into additional plans. We discontinued stock repurchases and terminated our Rule 10b5-1 trading plan in August 2020 in connection with the Ellie Mae acquisition and had no stock repurchases in the first quarter of 2021. As of March 31, 2021, the remaining balance of Board approved funds for future repurchases is $1.2 billion. The approval of our Board for the share repurchases does not obligate us to acquire any particular amount of our common stock. In addition, our Board may increase or decrease the amount available for repurchases from time to time.
Dividends
During the three months ended March 31, 2021 and 2020, we declared and paid cash dividends per share of $0.33 and $0.30, respectively, for an aggregate payout of $187 million and $166 million, respectively. The declaration of dividends is subject to the discretion of our Board. Our Board has adopted a quarterly dividend declaration policy providing that the declaration of any dividends will be determined quarterly by the Board or the Audit Committee, taking into account such factors as our evolving business model, prevailing business conditions, our financial results and capital requirements and other considerations which our Board deems relevant, without a predetermined annual net income payout ratio.
Accumulated Other Comprehensive Income (Loss)
The following tables present changes in the accumulated balances for each component of other comprehensive income (loss) (in millions):
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Foreign currency translation adjustmentsComprehensive income from equity method investmentEmployee benefit plans adjustmentsTotal
Balance, as of December 31, 2020
$(134)$$(59)$(192)
Other comprehensive income (loss)
— 
Income tax benefit (expense)(1)— — 
Net current period other comprehensive income (loss)
— 
Balance, as of March 31, 2021
$(127)$$(59)$(184)

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Changes in Accumulated Other Comprehensive Income (Loss) by Component
Foreign currency translation adjustmentsComprehensive income from equity method investmentEmployee benefit plans adjustmentsTotal
Balance, as of December 31, 2019
$(177)$$(67)$(243)
Other comprehensive income (loss)
(90)— — (90)
Income tax benefit (expense)— — — — 
Net current period other comprehensive income (loss)
(90)— — (90)
Balance, as of March 31, 2020
$(267)$$(67)$(333)

12. Income Taxes
Our effective tax rate was 22% and 21% for the three months ended March 31, 2021 and 2020, respectively. The effective tax rate for the three months ended March 31, 2021 was higher than the effective tax rate for the comparable period in 2020 primarily due to the U.K. corporate income tax rate increase from 17% to 19%, effective from April 1, 2020, and less excess tax benefits from stock compensation.
The U.K. government, in its recent Finance Bill of 2021, proposed increasing the U.K. corporate income tax rate from 19% to 25%, beginning April 1, 2023. We expect this tax law change to be enacted later in 2021 and we will account for the deferred tax effects in the quarter that the tax law is officially enacted.
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. These provisions did not have a material impact on our income tax provision for the three months ended March 31, 2021.

13. Clearing Operations
We operate six clearing houses, each of which acts as a central counterparty that becomes the buyer to every seller and the seller to every buyer for its clearing members or participants, or Members. Through this central counterparty function, the clearing houses provide financial security for each transaction for the duration of the position by limiting counterparty credit risk.
Our clearing houses are responsible for providing clearing services to each of our futures exchanges, and in some cases to third-party execution venues, and are as follows, referred to herein collectively as "the ICE Clearing Houses":
Clearing HouseProducts ClearedExchange where ExecutedLocation
ICE Clear EuropeEnergy, agricultural, interest rates and equity index futures and options contracts and OTC European CDS instrumentsICE Futures Europe, ICE Futures U.S., ICE Endex, ICE Futures Abu Dhabi and third-party venuesU.K.
ICE Clear U.S.Agricultural, metals, and foreign exchange, or FX, index futures and options contracts, equity futures contracts, and digital assets futures contractsICE Futures U.S.U.S.
ICE Clear CreditOTC North American, European, Asian-Pacific and Emerging Market CDS instrumentsCreditex and third-party venuesU.S.
ICE Clear NetherlandsDerivatives on equities and equity indices traded on regulated marketsICE EndexThe Netherlands
ICE Clear SingaporeEnergy, metals and financial futures products and digital assets futures contractsICE Futures Singapore Singapore
ICE NGXPhysical North American natural gas, electricity and oil futuresICE NGXCanada
Original & Variation Margin
Each of the ICE Clearing Houses generally requires all Members to deposit collateral in cash or certain pledged assets. The collateral deposits are known as “original margin.” In addition, the ICE Clearing Houses may make intraday original margin calls in circumstances where market conditions require additional protection. The daily profits and losses to and from the ICE Clearing Houses due to the marking-to-market of open contracts is known as “variation margin.” With the exception of ICE NGX’s physical natural gas and physical power products discussed separately below, the ICE Clearing Houses mark all outstanding contracts to market, and therefore pay and collect variation margin, at least once daily.
The amounts that Members are required to maintain are determined by proprietary risk models established by each ICE Clearing House and reviewed by the relevant regulators, independent model validators, risk committees and the boards of directors of the respective ICE Clearing House. The amounts required may fluctuate over time. Each of the ICE Clearing Houses is a separate legal entity and is not subject to the liabilities of the others, or the obligations of Members of the other ICE Clearing Houses.
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Should a particular Member fail to deposit its original margin or fail to make a variation margin payment, when and as required, the relevant ICE Clearing House may liquidate or hedge the defaulting Member's open positions and use their original margin and guaranty fund deposits to pay any amount owed. In the event that the defaulting Member's deposits are not sufficient to pay the amount owed in full, the ICE Clearing Houses will first use their respective contributions to the guaranty fund, often referred to as Skin In The Game, or SITG, to pay any remaining amount owed. In the event that the SITG is not sufficient, the ICE Clearing Houses may utilize the respective guaranty fund deposits, or collect limited additional funds from their respective non-defaulting Members on a pro-rata basis, to pay any remaining amount owed.
As of March 31, 2021 and December 31, 2020, the ICE Clearing Houses had received or had been pledged $163.6 billion and $154.1 billion, respectively, in cash and non-cash collateral in original margin and guaranty fund deposits to cover price movements of underlying contracts for both periods.
Guaranty Funds & ICE Contribution
As described above, mechanisms have been created, called guaranty funds, to provide partial protection in the event of a Member default. With the exception of ICE NGX, each of the ICE Clearing Houses requires that each Member make deposits into a guaranty fund.
In addition, we have contributed our own capital that could be used if a defaulting Member’s original margin and guaranty fund deposits are insufficient. Such amounts are recorded as long-term restricted cash and cash equivalents in our balance sheets and are as follows (in millions):
ICE Portion of Guaranty Fund ContributionDefault insurance
Clearing HouseAs of March 31, 2021As of
December 31, 2020
As of March 31, 2021As of
December 31, 2020
ICE Clear Europe$247$237$75$75
ICE Clear U.S.83 103 25 25 
ICE Clear Credit50 50 50 50 
ICE Clear NetherlandsN/AN/A
ICE Clear SingaporeN/AN/A
ICE NGX15 15 100 100 
Total$398$408$250$250
Of our total contribution to ICE Clear U.S. above, as of March 31, 2021, $15 million was solely applicable to any losses associated with a default in Bitcoin contracts and other digital asset contracts that ICE Clear U.S. may clear in the future. In February 2021, we decreased our contribution to ICE Clear U.S.’s guaranty fund applicable to any losses associated with a default in Bitcoin contracts and other digital asset contracts by $20 million from $35 million as of December 31, 2020. In March 2021, we increased our contribution to ICE Clear Europe's guaranty fund by $10 million.
We maintain default insurance as an additional layer of Member default protection. The default insurance was added in September 2019 and has a three-year term for the following clearing houses in the following amounts: ICE Clear Europe - $75 million; ICE Clear U.S. - $25 million and ICE Clear Credit - $50 million. The default insurance layer resides after and in addition to the ICE Clear Europe, ICE Clear U.S. and ICE Clear Credit SITG contributions and before the guaranty fund contributions of the non-defaulting Members.
Similar to SITG, the default insurance layer is not intended to replace or reduce the position risk-based amount of the guaranty fund. As a result, the default insurance layer is not a factor that is included in the calculation of the Members' guaranty fund contribution requirement. Instead, it serves as an additional, distinct, and separate default resource that should serve to further protect the non-defaulting Members’ guaranty fund contributions from being mutualized in the event of a default.
As of March 31, 2021, ICE NGX maintains a guaranty fund utilizing a $100 million letter of credit and a default insurance policy, discussed below.
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Cash and Cash Equivalent Deposits
We have recorded cash and cash equivalent margin deposits and amounts due in our balance sheets as current assets with corresponding current liabilities to the Members. As of March 31, 2021, our cash and cash equivalent margin deposits are as follows (in millions):
ICE Clear Europe (1)
ICE Clear
Credit
ICE Clear U.S.ICE NGXOther ICE Clearing HousesTotal
Original margin
$31,977 $37,753 $7,477 $— $19 $77,226 
Unsettled variation margin, net
— — — 146 — 146 
Guaranty fund
4,119 2,930 592 — 7,646 
Delivery contracts receivable/payable, net
— — — 590 — 590 
Total
$36,096 $40,683 $8,069 $736 $24 $85,608 

As of December 31, 2020, our cash and cash equivalent margin deposits, are as follows (in millions):
ICE Clear Europe (2)
ICE Clear
Credit
ICE Clear U.S.ICE NGXOther ICE Clearing HousesTotal
Original margin
$33,726 $34,922 $7,288 $— $12 $75,948 
Unsettled variation margin, net
— — — 99 — 99 
Guaranty fund
4,374 2,574 502 — 7,455 
Delivery contracts receivable/payable, net
— — — 581 — 581 
Total
$38,100 $37,496 $7,790 $680 $17 $84,083 
(1) $31.2 billion and $4.9 billion is related to futures/options and CDS, respectively.
(2) $31.8 billion and $6.3 billion is related to futures/options and CDS, respectively.

Our cash and cash equivalent margin and guaranty fund deposits are maintained in accounts with national banks and highly-rated financial institutions or secured through direct investments, primarily in U.S. Treasury securities with original maturities of less than three months, or reverse repurchase agreements with primarily overnight maturities.
To provide a tool to address the liquidity needs of our clearing houses and manage the liquidation of margin and guaranty fund deposits held in the form of cash and high quality sovereign debt, ICE Clear Europe, ICE Clear Credit and ICE Clear U.S. have entered into Committed Repurchase Agreement Facilities, or Committed Repo. Additionally, ICE Clear Credit and ICE Clear Netherlands have entered into Committed FX Facilities to support these liquidity needs. As of March 31, 2021 the following facilities were in place:
ICE Clear Europe: $1.0 billion in Committed Repo to finance U.S. dollar, euro and pound sterling deposits.
ICE Clear Credit: $300 million in Committed Repo to finance U.S. dollar and euro deposits, €250 million in Committed Repo to finance euro deposits, and €1.9 billion in Committed FX Facilities to finance euro payment obligations.
ICE Clear U.S.: $250 million in Committed Repo to finance U.S. dollar deposits.
ICE Clear Netherlands: €10 million in Committed FX Facilities to finance euro payment obligations.
Details of our cash and cash equivalent deposits are as follows (in millions):
20


Clearing HouseInvestment TypeAs of March 31, 2021As of
December 31, 2020
ICE Clear Europe
National Bank Account (1)
$7,229 $10,887 
ICE Clear EuropeReverse repo24,896 23,696 
ICE Clear EuropeSovereign Debt3,953 3,501 
ICE Clear EuropeDemand deposits18 16 
ICE Clear CreditNational Bank Account35,069 30,275 
ICE Clear Credit Reverse repo3,211 4,520 
ICE Clear Credit Demand deposits2,403 2,701 
ICE Clear U.S.Reverse repo7,169 5,690 
ICE Clear U.S.Sovereign Debt900 2,100 
Other ICE Clearing HousesDemand deposits24 17 
ICE NGXUnsettled Variation Margin and Delivery Contracts Receivable/Payable 736 680 
Total $85,608 $84,083 

(1) As of March 31, 2021, ICE Clear Europe held €3.8 billion ($4.5 billion based on the euro/U.S. dollar exchange rate of 1.1731 as of March 31, 2021) at De Nederlandsche Bank, or DNB, £2.0 billion ($2.8 billion based on the pound sterling/U.S. dollar exchange rate of 1.3782 as of March 31, 2021) at the Bank of England, or BOE, and €10 million ($12 million based on the above exchange rate) at the BOE. As of December 31, 2020, ICE Clear Europe held €6.3 billion ($7.7 billion based on the euro/U.S. dollar exchange rate of 1.2216 as of December 31, 2020) at DNB, £2.3 billion ($3.1 billion based on the pound sterling/U.S. dollar exchange rate of 1.3665 as of December 31, 2020) at the BOE and €10 million ($12 million based on the above exchange rate) at the BOE.
Other Deposits
In addition to the cash deposits above, the ICE Clearing Houses have also received other assets from Members, which include government obligations, and may include other non-cash collateral such as letters of credit at ICE NGX, or gold on rare occasions at ICE Clear Europe, to mitigate credit risk. For certain deposits, we may impose discount or “haircut” rates to ensure adequate collateral if market values fluctuate. The value-related risks and rewards of these assets remain with the Members. Any gain or loss accrues to the Member. The ICE Clearing Houses do not, in the ordinary course, rehypothecate or re-pledge these assets. These pledged assets are not reflected in our balance sheets, and are as follows (in millions):
 As of March 31, 2021
ICE Clear
Europe
ICE Clear
Credit
ICE Clear U.S.ICE NGXTotal
Original margin:
Government securities at face value
$46,367 $8,789 $18,302 $— $73,458 
Letters of credit
— — — 2,773 2,773 
ICE NGX cash deposits
— — — 542 542 
Total$46,367 $8,789 $18,302 $3,315 $76,773 
Guaranty fund:
Government securities at face value
$552 $333 $284 $— $1,169 
As of December 31, 2020
ICE Clear
Europe
ICE Clear
Credit
ICE Clear U.S.ICE NGXTotal
Original margin:
Government securities at face value
$36,295 $9,523 $20,216 $— $66,034 
Letters of credit
— — — 2,329 2,329 
ICE NGX cash deposits
— — — 405 405 
Total$36,295 $9,523 $20,216 $2,734 $68,768 
Guaranty fund:
Government securities at face value
$508 $515 $250 $— $1,273 
ICE NGX
ICE NGX is the central counterparty to Members on opposite sides of its physically-settled contracts, and the balance related to delivered but unpaid contracts is recorded as a delivery contract net receivable, with an offsetting delivery
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contract net payable in our balance sheets. Unsettled variation margin equal to the fair value of open contracts is recorded as of each balance sheet date. ICE NGX marks all outstanding contracts to market daily, but only collects variation margin when a Member's open position falls outside a specified percentage of its pledged collateral.
ICE NGX requires Members to maintain cash or letters of credit to serve as collateral in the event of default. The cash is maintained in a segregated bank account, held in trust and remains the property of the Member, therefore, it is not included in our balance sheets. ICE NGX maintains the following accounts with a third-party Canadian chartered bank which are available in the event of physical settlement shortfalls, subject to certain conditions:
Account Type
As of March 31, 2021
(In C$ millions)
As of March 31, 2021
(In $USD millions)
Daylight liquidity facilityC$300$239
Overdraft facility20 16 
TotalC$320$255
As of March 31, 2021, ICE NGX maintains a guaranty fund of $100 million funded by a letter of credit issued by a major Canadian chartered bank, and backed by default insurance underwritten by Export Development Canada, or EDC, a Crown corporation operated at arm’s length from the Canadian government. In the event of a participant default where the Member’s collateral is depleted, the shortfall would be covered by a draw down on the letter of credit following which ICE NGX would file a claim under the default insurance to recover additional losses up to $100 million beyond the $15 million first-loss amount that ICE NGX is responsible for under the default insurance policy.
Clearing House Exposure
Each ICE Clearing House bears financial counterparty credit risk and provides a central counterparty guarantee, or performance guarantee, to its Members. To reduce their exposure, the ICE Clearing Houses have a risk management program with both initial and ongoing membership standards. Excluding the effects of original and variation margin, guaranty fund and collateral requirements, the ICE Clearing Houses’ maximum estimated exposure for this guarantee is $143.9 billion as of March 31, 2021, which represents the maximum estimated value by the ICE Clearing Houses of a hypothetical one-day movement in pricing of the underlying unsettled contracts. This value was determined using proprietary risk management software that simulates gains and losses based on historical market prices, volatility and other factors present at that point in time for those particular unsettled contracts. Future actual market price volatility could result in the exposure being significantly different than this amount.

14. Legal Proceedings
In the ordinary course of our business, from time to time we are subject to legal proceedings, lawsuits, government investigations and other claims with respect to a variety of matters. In addition, we are subject to periodic reviews, inspections, examinations and investigations by regulators in the U.S. and other jurisdictions, any of which may result in claims, legal proceedings, assessments, fines, penalties, restrictions on our business or other sanctions. We record estimated expenses and reserves for legal or regulatory matters or other claims when these matters present loss contingencies that are probable and the related amount is reasonably estimable. Any such accruals may be adjusted as circumstances change. Assessments of losses are inherently subjective and involve unpredictable factors. While the outcome of legal and regulatory matters is inherently difficult to predict and/or the range of loss often cannot be reasonably estimable, we do not believe that the liabilities, if any, which may ultimately result from the resolution of the various legal and regulatory matters that arise in the ordinary course of our business, including the matters described below and in Note 15 to the consolidated financial statements in Part II, Item 8 of our 2020 Form 10-K, are likely to have a material adverse effect on our consolidated financial condition, results of operations, or liquidity. It is possible, however, that future results of operations for any particular quarterly or annual period could be materially and adversely affected by any developments relating to these legal and regulatory matters. Other than a $30 million accrual for potential legal settlements recorded as of December 31, 2020, a range of possible losses related to certain cases cannot be reasonably estimated at this time, except as otherwise disclosed below and in Note 15 to the consolidated financial statements in Part II, Item 8 of our 2020 Form 10-K. Individual matter disclosures in this Form 10-Q are limited to new significant matters or significant updates on existing matters since our most recent Form 10-K.
ICE Data Pricing & Reference Data Matter
As described at greater length in Note 15 to the consolidated financial statements in Part II, Item 8 of our 2020 Form 10-K, our subsidiary ICE Data Pricing & Reference Data, LLC, or PRD, is a registered investment advisor in the business of, among other things, providing clients with evaluated pricing and other information for fixed-income securities.
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Until October 1, 2020, PRD had a business practice of passing through third-party price quotes, or broker quotes, in certain fixed income securities as-is to its clients when PRD did not believe it had sufficient information to produce an evaluated price for such securities. PRD’s legacy business practices with respect to broker quotes received from a now-bankrupt entity named Live Well Financial, Inc., or Live Well, had led to assertions of liability against PRD by Live Well’s bankruptcy trustee, or the Trustee, and certain of Live Well’s financial institution creditors. As of April 2021, PRD had resolved the potential claims of the Trustee and all but one of Live Well’s financial institution creditors. PRD continues to deny any wrongdoing, and to the extent any unresolved assertions relating to broker quotes PRD received from Live Well become litigated matters, we plan to vigorously defend any such litigation.
For further information on our legal and regulatory matters, please see Note 15 to the consolidated financial statements in Part II, Item 8 of our 2020 Form 10-K.

15. Fair Value Measurements
Fair value is the price that would be received from selling an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Our financial instruments consist primarily of certain short-term and long-term assets and liabilities, customer accounts receivable, margin deposits and guaranty funds, equity investments, and short-term and long-term debt.
The fair value of our financial instruments is measured based on a three-level hierarchy:
Level 1 inputs — quoted prices for identical assets or liabilities in active markets.
Level 2 inputs — observable inputs other than Level 1 inputs such as quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are directly observable.
Level 3 inputs — unobservable inputs supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Financial assets and liabilities recorded or disclosed at fair value in the accompanying consolidated balance sheets as of March 31, 2021 and December 31, 2020 were classified in their entirety based on the lowest level of input that is significant to the asset or liability’s fair value measurement.
Our mutual funds are equity and fixed income mutual funds held for the purpose of providing future payments for the supplemental executive savings plan and the supplemental executive retirement plan. These mutual funds are classified as equity investments and measured at fair value using Level 1 inputs with adjustments recorded in net income.
Excluding our equity investments without a readily determinable fair value, the fair values of all other financial instruments are determined to approximate carrying value due to the short period of time to their maturities.
We did not use Level 3 inputs to determine the fair value of assets or liabilities measured at fair value on a recurring basis as of March 31, 2021 or December 31, 2020.
We measure certain assets, such as intangible assets, at fair value on a non-recurring basis. These assets are recognized at fair value if they are deemed to be impaired. As of March 31, 2021, none of our intangible assets were required to be recorded at fair value since no impairments were recorded.
We measure certain equity investments at fair value on a non-recurring basis using our policy election under ASU 2016-01. During the three months ended March 31, 2021, we evaluated these investments to identify if any increase or decrease in the value of the investment had occurred, including qualitative considerations of impairment as discussed above, and concluded that no fair value adjustments were required under this election.
See Note 13 for the fair value considerations related to our margin deposits, guaranty funds and delivery contracts receivable.
The table below displays the fair value of our debt as of March 31, 2021. The fair values of our fixed rate notes were estimated using quoted market prices for these instruments. The fair value of our commercial paper includes a discount and other short-term debt approximates par value since the interest rates on this short-term debt approximate market rates as of March 31, 2021.
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As of March 31, 2021
(in millions)
Debt:
Carrying Amount
Fair value
Commercial Paper
$2,062 $2,065 
Other short-term debt
2022 Senior Notes (2.35% senior unsecured notes due September 15, 2022)
499 513 
2023 Senior Notes (floating rate senior unsecured notes due June 15, 2023)
1,245 1,252 
2023 Senior Notes (0.70% senior unsecured notes due June 15, 2023)
995 1,003 
2023 Senior Notes (3.45% senior unsecured notes due September 21, 2023)
399 427 
2023 Senior Notes (4.00% senior unsecured notes due October 15, 2023)
796 868 
2025 Senior Notes (3.75% senior unsecured notes due December 1, 2025)
1,245 1,375 
2027 Senior Notes (3.10% senior unsecured notes due September 15, 2027)
497 543 
2028 Senior Notes (3.75% senior unsecured notes due September 21, 2028)
593 662 
2030 Senior Notes (2.10% senior unsecured notes due June 15, 2030)
1,232 1,204 
2032 Senior Notes (1.85% senior unsecured notes due September 15, 2032)
1,482 1,375 
2040 Senior Notes (2.65% senior unsecured notes due September 15, 2040)
1,229 1,158 
2048 Senior Notes (4.25% senior unsecured notes due September 21, 2048)
1,230 1,405 
2050 Senior Notes (3.00% senior unsecured notes due June 15, 2050)
1,219 1,161 
2060 Senior Notes (3.00% senior unsecured notes due September 15, 2060)
1,470 1,346 
Total debt
$16,199 $16,363 

16. Segment Reporting
We previously operated as two reportable business segments, but effective October 1, 2020, we realigned our businesses as part of a review of, and changes in, our organizational structure following our acquisition of Ellie Mae. As a result, we changed our internal financial reporting and determined that a change in reportable segments had occurred. This presentation is reflective of how our chief operating decision maker reviews and operates our business.
In addition, 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 MERS (previously reported in other revenues). We believe these changes more accurately reflect how we operate the business. The prior year period has been adjusted to reflect these changes.
As of March 31, 2021, our business is conducted through three reportable business segments, comprised of the following:
Our Exchanges segment includes our global futures platforms for trade execution and clearing, NYSE trading and listings and various data services related to those platforms;
Our Fixed Income and Data Services segment includes our fixed income and data analytics offerings, including pricing and reference data, analytics and indices, fixed income execution, or ICE Bonds, CDS clearing, our consolidated feeds, ICE Global Network businesses, other multi-asset class data and network services; and
Our Mortgage Technology segment provides mortgage technology solutions for the U.S. residential mortgage market from application through closing and the secondary market.
While revenues are recorded specifically in the segment in which they are earned or to which they relate, a significant portion of our operating expenses are not solely related to a specific segment because the expenses serve functions that are necessary for the operation of more than one segment. We directly allocate expenses when reasonably possible to do so. Otherwise, we use a pro-rata revenue approach as the allocation method for the expenses that do not relate solely to one segment and serve functions that are necessary for the operation of all segments. Our October 1, 2020 change in business segment presentation triggered a reallocation of our segment operating expenses. Prior periods have been adjusted to reflect this change.
Our chief operating decision maker does not review total assets or statements of income below operating income by segments; therefore, such information is not presented below. Our three segments do not engage in intersegment transactions.

Financial data for our business segments is as follows for the three months ended March 31, 2021 and 2020 (in millions):
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Three Months Ended March 31, 2021
ExchangesFixed Income and Data ServicesMortgage Technology Consolidated
Revenues:
Energy futures and options$310 $— $— $310 
Agricultural and metals futures and options59 — — 59 
Financial futures and options105 — — 105 
Cash equities and equity options734 — — 734 
OTC and other 77 — — 77 
Data and connectivity services207 — — 207 
Listings
114 — — 114 
Fixed income execution— 14 — 14 
CDS clearing— 55 — 55 
Fixed income data and analytics— 264 — 264 
Other data and network services— 135 — 135 
Origination technology— — 254 254 
Closing solutions— — 70 70 
Data and analytics— — 18 18 
Other— — 13 13 
Revenues1,606 468 355 2,429 
Transaction-based expenses632 — — 632 
Revenues, less transaction-based expenses974 468 355 1,797 
Operating expenses321 335 249 905 
Operating income$653 $133 $106 $892 

Three Months Ended March 31, 2020
ExchangesFixed Income and Data ServicesMortgage Technology Consolidated
Revenues:
Energy futures and options$353 $— $— $353 
Agricultural and metals futures and options84 — — 84 
Financial futures and options123 — — 123 
Cash equities and equity options669 — — 669 
OTC and other71 — — 71 
Data and connectivity services193 — — 193 
Listings
112 — — 112 
Fixed income execution— 21 — 21 
CDS clearing— 72 — 72 
Fixed income data and analytics— 245 — 245 
Other data and network services— 126 — 126 
Closing solutions— — 44 44 
Other— — 
Revenues1,605 464 46 2,115 
Transaction-based expenses556 — — 556 
Revenues, less transaction-based expenses1,049 464 46 1,559 
Operating expenses322 330 25 677 
Operating income$727 $134 $21 $882 

Revenue from one clearing member of the Exchanges segment comprised $109 million, or 11% of our Exchanges revenues less transaction-based expenses during the three months ended March 31, 2021. Revenue from one clearing member of the Exchanges segment comprised $116 million, or 11% of our Exchanges revenues less transaction-based expenses during the three months ended March 31, 2020. Clearing members are primarily intermediaries and represent a broad range of principal trading firms. If a clearing member ceased its operations, we believe that the trading firms would
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continue to conduct transactions and would clear those transactions through another clearing member firm. No additional customers or clearing members accounted for more than 10% of our segment revenues or consolidated revenues during the three months ended March 31, 2021 or 2020.

17. Earnings Per Common Share
The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per common share computations for the three months ended March 31, 2021 and 2020 (in millions, except per share amounts):
Three Months Ended March 31,
20212020
Basic:
Net income attributable to Intercontinental Exchange, Inc.
$646 $650 
Weighted average common shares outstanding
562 552 
Basic earnings per common share
$1.15 $1.18 
Diluted:
Weighted average common shares outstanding
562 552 
Effect of dilutive securities - stock options and restricted stock
Diluted weighted average common shares outstanding
565 555 
Diluted earnings per common share
$1.14 $1.17 
Basic earnings per common share is calculated using the weighted average common shares outstanding during the period. The weighted average common shares outstanding increased during the three months ended March 31, 2021 from the comparable period in 2020 primarily due to the stock issued for the Ellie Mae acquisition, partially offset by 2020 stock repurchases. Common equivalent shares from stock options and restricted stock awards, calculated using the treasury stock method, are included in the diluted per share calculations unless the effect of their inclusion would be antidilutive. During the three months ended March 31, 2021 and 2020, 190,000 and 246,000 outstanding stock options, respectively, were not included in the computation of diluted earnings per common share, because to do so would have had an antidilutive effect. In addition, we have excluded warrants and preferred and common incentive units under the Bakkt Equity Incentive Plan because they are also antidilutive. Certain figures in the table above may not recalculate due to rounding.

18. Subsequent Events
On April 14, 2021, Coinbase, a company in which we owned preferred stock which represented a 1.4% ownership share on a fully-diluted, as-converted basis, completed an IPO (Note 5). On April 15, 2021, we completed the sale of our investment in Coinbase for $1.24 billion, and will record a gain of $1.23 billion in the second quarter of 2021 as other income in our consolidated statement of income.
We have evaluated subsequent events and determined that no other events or transactions met the definition of a subsequent event for purposes of recognition or disclosure in the accompanying consolidated financial statements.
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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this Quarterly Report on Form 10-Q, or Quarterly Report, unless otherwise indicated, the terms “Intercontinental Exchange,” “ICE,” “we,” “us,” “our,” “our company” and “our business” refer to Intercontinental Exchange, Inc., together with its consolidated subsidiaries. References to “ICE Products” mean products listed on one or more of our markets. All references to “options” or “options contracts” in the context of our futures products refer to options on futures contracts. Solely for convenience, references in this Quarterly Report to any trademarks, service marks and trade names owned by ICE are listed without the ®, ™ and © symbols, but we will assert, to the fullest extent under applicable law, our rights to these trademarks, service marks and trade names.
We also include references to third-party trademarks, trade names and service marks in this Quarterly Report. Except as otherwise expressly noted, our use or display of any such trademarks, trade names or service marks is not an endorsement or sponsorship and does not indicate any relationship between us and the parties that own such marks and names.
The following discussion should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Quarterly Report. Due to rounding, figures in tables may not sum exactly.
Forward-Looking Statements
This Quarterly Report, including the sections entitled “Notes to Consolidated Financial Statements,” “Legal Proceedings” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact may be forward-looking statements.
These forward-looking statements relate to future events or our future financial performance and are based on our present beliefs and assumptions as well as the information currently available to us. They involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance, cash flows, financial position or achievements to differ materially from those expressed or implied by these statements.
Forward-looking statements may be introduced by or contain terminology such as “may,” “will,” “should,” “could,” “would,” “targets,” “goal,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or the antonyms of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, cash flows, financial position or achievements. Accordingly, we caution you not to place undue reliance on any forward-looking statements we may make.
Factors that may affect our performance and the accuracy of any forward-looking statements include, but are not limited to, those listed below:
conditions in global financial markets and domestic and international economic and social conditions, political uncertainty and discord;
the impacts of the COVID-19 pandemic on our business, results of operations and financial condition as well as the broader business environment;
the impact of the introduction of or any changes in laws, regulations, rules or government policies with respect to financial markets, climate change, increased regulatory scrutiny or enforcement actions and our ability to comply with these requirements;
volatility in commodity prices, equity prices and price volatility of financial benchmarks and instruments such as interest rates, credit spreads, equity indices, foreign exchange rates, and mortgage origination trends;
the business environment in which we operate and trends in our industry, including trading volumes, prevalence of clearing, demand for data services, mortgage lending activity, fees, changing regulations, competition and consolidation;
our ability to minimize the risks associated with operating clearing houses in multiple jurisdictions;
our exchanges’ and clearing houses' compliance with their respective regulatory and oversight responsibilities;
the resilience of our electronic platforms and soundness of our business continuity and disaster recovery plans;
our ability to execute our growth strategy, identify and effectively pursue, implement and integrate acquisitions and strategic alliances and realize the synergies and benefits of such transactions within the expected time frame;
the performance and reliability of our trading, clearing and mortgage technologies and those of third-party service providers;
our ability to keep pace with technological developments and client preferences;
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our ability to ensure that the technology we utilize is not vulnerable to cyberattacks, hacking and other cybersecurity risks or other disruptive events or to minimize the impact of any such events;
our ability to keep information and data relating to the customers of the users of the software and services provided by our ICE Mortgage Technology business confidential;
our ability to identify trends and adjust our business to benefit from such trends, including trends in the U.S. mortgage industry such as interest rates, new home purchases, refinancing activity, and home builder and buyer sentiment, among others;
our ability to evolve our benchmarks and indices in a manner that maintains or enhances their reliability and relevance;
the accuracy of our cost and other financial estimates and our belief that cash flows from operations will be sufficient to service our debt and to fund our operational and capital expenditure needs;
our ability to incur additional debt and pay off our existing debt in a timely manner;
our ability to maintain existing market participants and data and mortgage technology customers, and to attract new ones;
our ability to offer additional products and services, leverage our risk management capabilities and enhance our technology in a timely and cost-effective fashion;
our ability to attract and retain key talent;
our ability to protect our intellectual property rights and to operate our business without violating the intellectual property rights of others;
potential adverse results of threatened or pending litigation and regulatory actions and proceedings;
our ability to realize the expected benefits of our acquisition of Ellie Mae and our majority investment in Bakkt, which could result in additional unanticipated costs and risks; and
our ability to detect illegal activity such as fraud, money laundering, tax evasion and ransomware scams through digital currency transactions that are easily exploited.

These risks and other factors include those set forth in Part 1, Item 1(A) under the caption “Risk Factors” in our 2020 Form 10-K, as filed with the SEC on February 4, 2021. Due to the uncertain nature of these factors, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any of these statements to reflect events or circumstances occurring after the date of this Quarterly Report. New factors may emerge and it is not possible to predict all factors that may affect our business and prospects.
Overview
We are a provider of market infrastructure, data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities. These products, which span major asset classes including futures, equities, fixed income and U.S. residential mortgages, provide our customers with access to mission critical workflow tools that are designed to increase asset class transparency and workflow efficiency. Prior to October 2020, we reported our results in two segments. We now 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. and U.K.
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 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.
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Recent Developments
Bakkt Transaction
On January 11, 2021, we announced that Bakkt, a trusted digital asset marketplace we launched in 2018 enabling institutions and consumers to buy, sell, store and spend digital assets, had entered into a definitive agreement to combine with VIH, a special purpose acquisition company sponsored by VPC.
The business combination between Bakkt and VIH is expected to result in over $500 million of cash on the combined company’s balance sheet, reflecting a contribution of up to $207 million of cash held in VIH’s trust account, and a $325 million concurrent private placement, or PIPE, of Class A common stock of the combined company, priced at $10.00 per share, including a $50 million commitment from us. The newly combined company will be renamed Bakkt Holdings, Inc. and is expected to be listed on the NYSE.
As part of the transaction, Bakkt’s existing equity holders and management will roll 100% of their equity into the combined company. Assuming no shareholders of VIH exercise their redemption rights, current Bakkt equity holders, including ICE, will own approximately 78% of the combined company, VIH’s public shareholders will own approximately 8%, VPC will own 2%, and PIPE investors (a group that will also include us) will own approximately 12% of the issued and outstanding common stock of the combined company at closing.
Following completion of the business combination, which is expected to occur by the end of the second quarter of 2021, we are expected to have a 65% economic interest and a minority voting interest in the combined company. Following the closing, we will have a minority voting interest in the combined company and as a consequence, we expect to deconsolidate Bakkt and treat it as an equity method investment within our financial statements.
Launch of ICE Futures Abu Dhabi
On March 29, 2021, we launched trading in ICE Murban Crude Oil futures, the world’s first Murban futures contract on our new exchange, ICE Futures Abu Dhabi Limited, or IFAD. IFAD was launched with the Abu Dhabi National Oil Company, or ADNOC, and nine of the world’s largest energy traders.
ICE Murban Crude Oil Futures opened for trading along with 18 Murban-related cash settled derivatives and inter-commodity spreads. Murban futures investors from jurisdictions including ADGM, the U.S., Singapore, the U.K., Switzerland, the Netherlands, France, Norway, Australia, Japan and South Korea, are able to trade on IFAD. IFAD has 27 Exchange Members and 20 Clearing Members. Contracts traded on IFAD are cleared at ICE Clear Europe alongside ICE’s global energy futures platform, allowing customers to benefit from critical margin offsets to enhance capital efficiency. As of April 20, 2022, open interest was more than 42,000 contracts and a total of 132,450 contracts have traded with 49 firms having traded on IFAD since the launch.
Regulation
Our activities and the markets in which we operate are subject to regulations that impact us as well as our customers, and, in turn, meaningfully influence our activities, the manner in which we operate and our strategy. We are primarily subject to the jurisdiction of regulatory agencies in the U.S., U.K., EU, Canada, Singapore and ADGM. Failure to satisfy regulatory requirements can or may give rise to sanctions by the applicable regulator.
Global policy makers have undertaken reviews of their existing legal framework governing financial markets in connection with regulatory reform, and have either passed new laws and regulations, or are in the process of debating and/or enacting new laws and regulations that apply to our business and to our customers’ businesses. Legislative and regulatory actions may impact the way in which we or our customers conduct business and may create uncertainty, which could affect trading volumes or demand for market data. See Part 1, Item 1 “Business - Regulation” and Part 1, Item 1(A) "Risk Factors" included in our 2020 Form 10-K for a discussion of the primary regulations applicable to our business and certain risks associated with those regulations.
Domestic and foreign policy makers continue to review their legal frameworks governing financial markets, and periodically change the laws and regulations that apply to our business and to our customers’ businesses. Our key areas of focus on these evolving efforts are:
Brexit implications. On January 1, 2021, the U.K. completed its withdrawal from the EU, commonly referred to as Brexit. As a result, as of January 1, 2021, EU law no longer applies in and to the U.K. In connection with the completion of the U.K.'s withdrawal, the U.K. and EU finalized a trade and cooperation agreement, which was provisionally applied as of January 1, 2021. The trade and cooperation agreement does not cover financial services.
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Instead, in March 2021, the U.K. and EU agreed on a Memorandum of Understanding establishing the framework for regulatory cooperation on financial services, but there continues to be uncertainty surrounding specific terms that may impact the financial services industry and our business operations.
Requirement that European and U.K. exchanges and CCPs offer non-discriminatory access. The non-discriminatory access provisions of the U.K.'s Markets in Financial Instruments Directive II, or U.K. MiFID II, and the EU Markets in Financial Instruments Directive II, or EU MiFID II, would require both our U.K. and European exchanges and central counterparties, or CCPs, to offer access to third parties on commercially reasonable terms. In addition, both the U.K. MiFID II and the EU MiFID II could require our U.K. and European exchanges and CCPs to allow participants to trade and/or clear at other venues, which may encourage competing venues to offer lookalikes of our products. On July 3, 2020, the application of these non-discriminatory access requirements for EU exchange-traded derivatives under EU MiFID II was postponed until July 3, 2021. This postponement did not form part of EU law retained by the U.K. at the end of the Brexit transition period. U.K. Treasury is currently reviewing the suitability of these requirements for U.K. markets.
Continued access by EU market participants to U.K. CCPs and exchanges. The European Commission, or EC, adopted an 18-month temporary equivalence decision for U.K. CCPs, which began to apply as of January 1, 2021. ICE Clear Europe has been recognized by the European Securities and Markets Authority, or ESMA, as a third-country CCP in accordance with the European Markets Infrastructure Regulation, or EMIR. Separately, ICE Futures Europe and ICE Endex will continue to be able to permit access by EU and U.K. persons to transact on their platforms. The absence of an equivalence decision by the EU for U.K. trading venues, however, may result in increased costs for certain EU market participants, which could impact trading on ICE Futures Europe. In February 2021, ICE announced it plans to transition ICE EU Emission Allowance futures and options from ICE Futures Europe to ICE Endex in June 2021. Additional impacts to our business and the potential for regulatory changes remain uncertain at this time. We are monitoring the impact to our business and are evaluating avenues to facilitate continued access for EU and U.K. customers to ICE Futures Europe and ICE Endex.
Benchmarks Regulation. In October 2020, the U.K. Government introduced the Financial Services Bill, which includes proposed amendments to the U.K. Benchmarks Regulation, or BMR, to provide the FCA with authority to manage and direct any wind-down period prior to a cessation of the London Interbank Offered Rate, or LIBOR, including powers to direct a methodology change for a critical benchmark and extend its publication on a basis that is no longer representative of its original underlying market or economic reality. Legislation increasing the powers of regulators to change the methodology or underlying market represented by a benchmark, or extend the publication of a benchmark, including LIBOR, could result in increased risks to administrators, such as ICE Benchmark Administration Limited, or IBA, and users of such benchmarks. In February 2021, amendments to the EU BMR came into force to provide the EC the power to designate a replacement benchmark that covers all references to a widely used reference rate that is phased out, including LIBOR, when necessary to avoid disruption of the financial markets in the EU and to further extend the transition period for the use of benchmarks provided by third-country administrators until at least December 31, 2023. On April 6, 2021, New York Governor Andrew Cuomo signed into law legislation addressing the consequences of the permanent cessation of LIBOR for specified contracts, securities, and other agreements that are economically linked to LIBOR that are governed by New York state law. The legislation generally tracks the legislation proposed by the Alternative Reference Rates Committee, or ARRC, and received broad industry support.
U.S. Listing and Trading Prohibitions on Certain Foreign Companies. On December 18, 2020, the Holding Foreign Companies Accountable Act became U.S. law. For each company required to file periodic reports with the SEC, this Act requires the SEC to identify any company that retains a registered public accounting firm that is located in a foreign jurisdiction and that the Public Company Accounting Oversight Board, or PCAOB, is unable to inspect or investigate because of a position taken in such foreign jurisdiction. If the SEC determines that the PCAOB has been unable to inspect or investigate such accounting firm for three consecutive years, it is required to prohibit such company from trading its securities on a U.S. securities exchange or in any “over-the-counter” market. As a consequence, the NYSE exchanges may be required to suspend trading in certain of their listed companies. On March 24, 2021, the SEC adopted rules to implement certain disclosure requirements of the Holding Foreign Companies Accountable Act for foreign registrants.
In addition, on November 12, 2020, the former President of the United States issued an Executive Order that prohibits, subject to certain exceptions, transactions by U.S. persons in the securities of certain Chinese companies identified as having ties to the People's Liberation Army, and in securities that are derivatives of, or any securities that are designated to provide investment exposure to, such Chinese companies. To comply with the Executive Order and guidance from the U.S. Department of the Treasury, the NYSE suspended trading in four of its listed companies and commenced delisting proceedings. In the future, there may be other listed companies that the NYSE will be required to take similar action to comply with the Executive Order.
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Consolidated Financial Highlights
The following summarizes our results and significant changes in our consolidated financial performance for the periods presented (dollars in millions, except per share amounts):
ice-20210331_g1.jpgice-20210331_g2.jpgice-20210331_g3.jpg
ice-20210331_g4.jpgice-20210331_g5.jpgice-20210331_g6.jpg
Three Months Ended March 31,
20212020Change
Revenues, less transaction-based expenses
$1,797 $1,559 15 %
Operating expenses$905 $677 34 %
Adjusted operating expenses(1)
$729 $597 22 %
Operating income$892 $882 1 %
Adjusted operating income(1)
$1,068 $962 11%
Operating margin
50 %57 %(7 pts)
Adjusted operating margin(1)
59  %62  %(3 pts)
Other income (expense), net$(59)$(46)28 %
Income tax expense
$183 $178 3 %
Effective tax rate22 %21 %1 pt
Net income attributable to ICE
$646 $650 (1) %
Adjusted net income attributable to ICE(1)
$758 $695 9 %
Diluted earnings per share attributable to ICE common stockholders
$1.14 $1.17 (3) %
Adjusted diluted earnings per share attributable to ICE common stockholders(1)
$1.34 $1.25 7 %
Cash flows from operating activities
$734 $520 41 %
(1) 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. GAAP. See “- Non-GAAP Financial Measures” below.
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Revenues, less transaction-based expenses, increased $238 million for the three months ended March 31, 2021 from the comparable period in 2020. See "-Exchanges Segment", "Fixed Income and Data Services Segment" and "Mortgage Technology Segment" below for a discussion of the significant changes in our revenues. The increase in revenues during the three months ended March 31, 2021 includes $18 million in favorable foreign exchange effects arising from fluctuations in the U.S. dollar from the comparable period in 2020. See Item 3 "Quantitative and Qualitative Disclosures About Market Risk-Foreign Currency Exchange Rate Risk" below for additional information on the impact of currency fluctuations.
Operating expenses increased $228 million for the three months ended March 31, 2021 from the comparable period in 2020. See "-Consolidated Operating Expenses" below for a discussion of the significant changes in our operating expenses. The increase in operating expenses includes $7 million in unfavorable foreign exchange effects for the three months ended March 31, 2021 arising from fluctuations in the U.S. dollar from the comparable period in 2020. See Item 3 "Quantitative and Qualitative Disclosures About Market Risk-Foreign Currency Exchange Rate Risk" below for additional information on the impact of currency fluctuations.
Variability in Quarterly Comparisons
Our business environment has been characterized by:
globalization of marketplaces, customers and competitors;
growing customer demand for workflow efficiency and automation;
commodity, interest rate and financial markets uncertainty;
growing demand for data to inform customers' risk management and investment decisions;
evolving, increasing and disparate regulation across multiple jurisdictions;
price volatility increasing customers' demand for risk management services;
increasing focus on capital and cost efficiencies;
customers' preference to manage risk in markets demonstrating the greatest depth of liquidity and product diversity;
the evolution of existing products and new product innovation to serve emerging customer needs and changing industry agreements;
rising demand for speed, data, data capacity and connectivity by market participants, necessitating increased investment in technology; and
consolidation and increasing competition among global markets for trading, clearing and listings.
For additional information regarding the factors that affect our results of operations, see Item 1(A) “Risk Factors” included in our 2020 Form 10-K, and Part II, Item 1(A) "Risk Factors" below.
Segment Results
We previously operated as two reportable business segments, but effective October 1, 2020, we realigned our businesses as part of a review of, and changes in, our organizational structure following our acquisition of Ellie Mae. As a result, we changed our internal financial reporting and determined that a change in reportable segments had occurred. Prior periods have been adjusted to reflect this change. Our segments do not engage in intersegment transactions.
Our business is now 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; and
Our Mortgage Technology segment includes our ICE Mortgage Technology businesses. This segment includes origination technology, closing solutions, data and analytics and other. In addition, 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. The prior year period has been adjusted to reflect these changes.
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While revenues are recorded specifically in the segment in which they are earned or to which they relate, a significant portion of our operating expenses are not solely related to a specific segment because the expenses serve functions that are necessary for the operation of more than one segment. We directly allocate expenses when reasonably possible to do so. Otherwise, we use a pro-rata revenue approach as the allocation method for the expenses that do not relate solely to one segment and serve functions that are necessary for the operation of all segments. Our October 1, 2020 change in business segment presentation triggered a reallocation of our segment operating expenses. Prior periods have been adjusted to reflect this change.
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Exchanges Segment
The following presents selected statements of income data for our Exchanges segment (dollars in millions):
ice-20210331_g7.jpg
ice-20210331_g8.jpgice-20210331_g9.jpgice-20210331_g10.jpgice-20210331_g11.jpg
(1) The adjusted numbers in the charts above are calculated by excluding items that are not reflective of our cash operations and core business performance. As a result, these adjusted numbers are not calculated in accordance with U.S. GAAP. See “- Non-GAAP Financial Measures” below.
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Three Months Ended March 31, 2021
20212020Change
Revenues:
Energy futures and options$310 $353 (12)%
Agricultural and metals futures and options59 84 (29)
Financial futures and options105 123 (14)
Futures and options474 560 (15)
Cash equities and equity options734 669 10 
OTC and other 77 71 
Transaction and clearing, net1,285 1,300 (1)
Data and connectivity services207 193 
Listings114 112 
Revenues1,606 1,605 — 
Transaction-based expenses(1)
632 556 14 
Revenues, less transaction-based expenses974 1,049 (7)
Other operating expenses253 246 
Depreciation and amortization 63 64 (1)
Acquisition-related transaction and integration costs12 (62)
Operating expenses321 322 — 
Operating income$653 $727 (10)%
(1)Transaction-based expenses are largely attributable to our cash equities and options business.

Exchanges Revenues
Our Exchanges segment includes transaction and clearing revenues from our futures and NYSE exchanges as well as related data and connectivity services and listings. Transaction and clearing revenues consist of fees collected from derivatives, cash equities and equity options trading and derivatives clearing, and are reported on a net basis, except for the NYSE transaction-based expenses discussed below. Rates per-contract, or RPC, are driven by the number of contracts or securities traded and the fees charged per contract, net of certain rebates. Our per-contract transaction and clearing revenues will depend upon many factors, including, but not limited to, market conditions, transaction and clearing volume, product mix, pricing, applicable revenue sharing and market making agreements, and new product introductions. 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. Our data and connectivity services revenues are recurring subscription fees related to the various data and connectivity services that we provide which are directly attributable to our exchange venues. Our listings revenues are also recurring subscription fees that we earn for the provision of NYSE listings services for public companies and ETFs, and related corporate actions for listed companies.
For both the three months ended March 31, 2021 and 2020, 16% of our Exchanges segment revenues, less transaction-based expenses, were billed in pounds sterling or euros. Due to the fluctuations of the pound sterling and euro compared to the U.S. dollar, our Exchanges segment revenues, less transaction-based expenses, were higher by $12 million for the three months ended March 31, 2021, from the comparable period in 2020.
Our exchange transaction and clearing revenues are presented net of rebates. We recorded rebates of $274 million and $306 million for the three months ended March 31, 2021 and 2020, 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 decrease in rebates is due primarily to decreased volumes within our futures and options programs.
Energy Futures and Options: Total energy volume decreased 16% and revenues decreased 12% for the three months ended March 31, 2021 from the comparable period in 2020.
Total oil volume decreased 16% for the three months ended March 31, 2021 from the comparable period in 2020 as the first quarter of 2020 benefited from a sharp increase in price volatility related to various geopolitical events as well as the emergence of COVID-19.
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Our global natural gas futures and options volume decreased 16% for the three months ended March 31, 2021 from the comparable period in 2020. Similar to oil volumes, the first quarter of 2020 benefited from elevated volatility related to COVID-19.
Our environmentals and other futures and options volume decreased 6% for the three months ended March 31, 2021 from the comparable period in 2020.
Agricultural and Metals Futures and Options: Total volume in our agricultural and metals futures and options markets decreased 29% and revenues decreased 29% for the three months ended March 31, 2021 from the comparable period in 2020. The first quarter of 2020 benefited from elevated volatility related to COVID-19 and a sharp decline in oil prices.
Sugar futures and options volumes decreased 39% for the three months ended March 31, 2021 from the comparable period in 2020.
Other agricultural and metal futures and options volume decreased 19% for the three months ended March 31, 2021 from the comparable period in 2020.
Financial Futures and Options: Total volume decreased 21% and revenues decreased 14% in our financial futures and options markets for the three months ended March 31, 2021 from the comparable period in 2020.
Interest rate futures and options volume and revenue decreased 19% and 15%, respectively, for the three months ended March 31, 2021 from the comparable period in 2020. The first quarter of 2020 benefited largely from the unexpected quantitative easing measures implemented by major central banks in response to COVID-19. Interest rate futures and options revenues were $62 million and $72 million for the three months ended March 31, 2021 and 2020, respectively.
Other financial futures and options volume, which includes our MSCI®, FTSE® and NYSE FANG+ equity index products, decreased 26% and revenue decreased 14% for the three months ended March 31, 2021 from the comparable period in 2020. The first quarter of 2020 benefited from elevated volatility across global equity markets driven by the emergence of COVID-19. Other financial futures and options revenues were $43 million and $51 million for the three months ended March 31, 2021 and 2020, respectively.
Cash Equities and Equity Options: Cash equities volume increased 7% for the three months ended March 31, 2021 from the comparable period in 2020 due to increased participation in U.S. equity markets, including increased retail participation. Cash equities revenues, net of transaction-based expenses, were $71 million and $83 million for the three months ended March 31, 2021 and 2020, respectively. Equity options volume increased 65% for the three months ended March 31, 2021 from the comparable period in 2020 driven by increased participation and higher market share. Equity options revenues, net of transaction-based expenses, were $31 million and $30 million for the three months ended March 31, 2021 and 2020, respectively.
OTC and Other: OTC and other transactions include revenues from our OTC energy business and other trade confirmation services, as well as interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of our U.S. securities exchanges, designated market maker service fees, exchange membership fees and agricultural grading and certification fees. Our OTC and other revenues increased 9% for the three months ended March 31, 2021 from the comparable period in 2020 primarily due to the February 2020 acquisition of Bridge2 Solutions.
Data and Connectivity Services: Our data and connectivity services revenues increased 7% for the three months ended March 31, 2021 from the comparable period in 2020. The increase in revenue was driven by the strong retention rate of existing 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 2% for the three months ended March 31, 2021 from the comparable period in 2020, driven by equity capital markets activity, including an increase in demand for special purpose acquisition company, or SPAC, listings.
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. Original listing fees consist of two components: initial listing fees and fees related to corporate actions. Initial listing fees, subject to a minimum and maximum amount, are
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based on the number of shares that a company initially lists. All listings fees are billed upfront and the identified performance obligations are satisfied over time. Revenue related to the investor relations performance obligation is recognized ratably over the period these services are provided, with the remaining revenue recognized ratably over time as customers continue to list on our exchanges.
In addition, we earn corporate actions-related listing fees in connection with actions involving the issuance of new shares, such as stock splits, rights issues and sales of additional securities, as well as mergers and acquisitions. 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.
Selected Operating Data
The following charts and tables present trading activity in our futures and options markets by commodity type based on the total number of contracts traded, as well as futures and options rate per contract (in millions, except for percentages and rate per contract amounts):
Volume and Rate per Contract
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Three Months Ended March 31,
20212020Change
Number of contracts traded (in millions):
Energy futures and options206 244 (16)%
Agricultural and metals futures and options26 37 (29)
Financial futures and options177 223 (21)
Total
409 504 (19)%
Three Months Ended March 31,
20212020Change
Average Daily Volume of contracts traded (in thousands):
Energy futures and options 3,376 3,938 (14)%
Agricultural and metals futures and options 425 588 (28)
Financial futures and options 2,832 3,511 (19)
Total
6,633 8,037 (17)%
Three Months Ended March 31,
20212020Change
Rate per contract:
Energy futures and options$1.50 $1.45 %
Agricultural and metals futures and options$2.28 $2.29 — %
Financial futures and options $0.58 $0.54 %
Open interest is the aggregate number of contracts (long or short) that clearing members hold either for their own account or on behalf of their clients. Open interest refers to the total number of contracts that are currently “open,” – in other words, contracts that have been entered into but not yet liquidated by either an offsetting trade, exercise, expiration or assignment. Open interest is also a measure of the future activity remaining to be closed out in terms of the number of contracts that members and their clients continue to hold in the particular contract and by the number of contracts held for each contract month listed by the exchange. The following charts and table present our quarter-end open interest for our futures and options contracts (in thousands, except for percentages):
Open Interest
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As of March 31,
20212020Change
Open interest — in thousands of contracts:
Energy futures and options42,177 44,375 (5)%
Agricultural and metals futures and options4,017 4,239 (5)
Financial futures and options 32,341 26,666 21 
Total
78,535 75,280 %
The following charts and table present selected cash and equity options trading data (all trading volume below is presented as average net daily trading volume, or ADV, and is single counted):
ice-20210331_g18.jpgice-20210331_g19.jpgice-20210331_g20.jpgice-20210331_g21.jpg
Three Months Ended March 31,
20212020Change
NYSE cash equities (shares in millions):
Total cash handled volume 2,920 2,734 %
  Total cash market share matched19.5 %24.5 %(5.0) pts
NYSE equity options (contracts in thousands):
NYSE equity options volume7,732 4,681 65 %
Total equity options volume40,053 25,331 58 %
  NYSE share of total equity options19.3 %18.5 %0.8 pts
Revenue capture or rate per contract:
Cash equities rate per contract (per 100 shares)$0.040$0.049(19)%
Equity options rate per contract$0.07$0.10(35)%
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Handled volume represents the total number of shares of equity securities, ETFs and crossing session activity internally matched on our exchanges or routed to and executed on an external market center. Matched volume represents the total number of shares of equity securities, ETFs and crossing session activity executed on our exchanges.
Transaction-Based Expenses
Our equities and equity options markets pay fees to the SEC pursuant to Section 31 of the Exchange Act. Section 31 fees are recorded on a gross basis as a component of transaction and clearing fee revenue. These Section 31 fees are assessed to recover the government’s costs of supervising and regulating the securities markets and professionals and are subject to change. We, in turn, collect corresponding activity assessment fees from member organizations clearing or settling trades on the equities and options exchanges, and recognize these amounts in our transaction and clearing revenues when invoiced. The activity assessment fees are designed to equal the Section 31 fees. As a result, activity assessment fees and the corresponding Section 31 fees do not have an impact on our net income, although the timing of payment by us will vary from collections. Section 31 fees were $125 million and $166 million for the three months ended March 31, 2021 and 2020, respectively. 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. The total amount is included in accrued liabilities and was $123 million as of March 31, 2021.
We make liquidity payments to cash and options trading customers, as well as routing charges made to other exchanges which are included in transaction-based expenses. We incur routing charges when we do not have the best bid or offer in the market for a security that a customer is trying to buy or sell on one of our securities exchanges. In that case, we route the customer’s order to the external market center that displays the best bid or offer. The external market center charges us a fee per share (denominated in tenths of a cent per share) for routing to its system. We record routing charges on a gross basis as a component of transaction and clearing fee revenue. Cash liquidity payments, routing and clearing fees were $507 million and $390 million for the three months ended March 31, 2021 and 2020, respectively.
Operating Expenses, Operating Income and Operating Margin
The following chart summarizes our Exchanges segment's operating expenses, operating income and operating margin (dollars in millions). See “- Consolidated Operating Expenses” below for a discussion of the significant changes in our operating expenses.
Exchanges Segment:Three Months Ended March 31,
20212020Change
Operating expenses $321 $322 — %
Adjusted operating expenses(1)
$298 $295 %
Operating income
$653 $727 (10)%
Adjusted operating income(1)
$676 $754 (10)%
Operating margin
67  %69  %(2 pts)
Adjusted operating margin(1)
69  %72  %(3 pts)















(1) The adjusted figures exclude items that are not reflective of our ongoing core operations and business performance. These adjusted numbers are not calculated in accordance with U.S. GAAP. See “- Non-GAAP Financial Measures” below.
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Fixed Income and Data Services Segment
The following charts and table present our selected statements of income data for our Fixed Income and Data Services segment (dollars in millions):
ice-20210331_g22.jpg

ice-20210331_g23.jpgice-20210331_g24.jpgice-20210331_g25.jpgice-20210331_g26.jpg
(1) The adjusted numbers in the charts above are calculated by excluding items that are not reflective of our cash operations and core business performance. As a result, these adjusted numbers are not calculated in accordance with U.S. GAAP. See “- Non-GAAP Financial Measures” below.
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Three Months Ended March 31, 2021
20212020Change
Revenues:
Fixed income execution$14 $21 (32)%
CDS clearing55 72 (25)
Fixed income data and analytics264 245 
Fixed income and credit333 338 (2)
Other data and network services135 126 
Revenues
468 464 
Other operating expenses
249 243 
Depreciation and amortization
86 87 (1)
Operating expenses
335 330 
Operating income$133 $134 — %
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.
For the three months ended March 31, 2021 and 2020, 14% and 13% of our Fixed Income and Data Services segment revenues were billed in pounds sterling or euros. As the pound sterling or euro exchange rate changes, the U.S. equivalent of revenues denominated in foreign currencies changes accordingly. Due to the fluctuations of the pound sterling and euro compared to the U.S. dollar during the three months ended March 31, 2021, our Fixed Income and Data Services revenues were higher by $5 million for the three months ended March 31, 2021, from the comparable period in 2020.
Fixed Income and Data Services Revenues
Our Fixed Income and Data Services revenues increased 1% for the three months ended March 31, 2021 from the comparable period in 2020 primarily due to growth in our fixed income data and analytics products and our other data and network services.
Fixed Income Execution: Fixed income execution includes revenues from ICE Bonds. Execution fees are reported net of rebates, which were nominal for both the three months ended March 31, 2021 and 2020. Our fixed income execution revenues decreased 32% for the three months ended March 31, 2021 from the comparable period in 2020 as the first quarter of 2020 had benefited from the price volatility related to COVID-19, as well as due to decreased retail activity in the first quarter of 2021 as a result of low interest rates, particularly municipal and corporate bond activity.
CDS Clearing: CDS clearing revenues decreased 25% for the three months ended March 31, 2021 from the comparable period in 2020. The notional value of CDS cleared was $5.0 trillion and $7.1 trillion for the three months ended March 31, 2021 and 2020, respectively. While volatility and demand for credit protection related to the emergence of COVID-19 benefited first quarter 2020 revenues, ICE Clear Credit set new records for client-cleared notional amount in USD Corporate Single Names, EUR Corporate Single Names and the Emerging Markets CDX index in the first quarter of 2021.
Fixed Income Data and Analytics: Our fixed income data and analytics revenues increased 8% for the three months ended March 31, 2021 from the comparable period in 2020. 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.
Other Data and Network Services: Our other data and network services revenues increased 8% for the three months ended March 31, 2021 from the comparable period in 2020. The increase in revenues was driven primarily by growth in our ICE Global Network offering, coupled with strength in our consolidated feeds and stronger 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
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an indicative forward-looking metric, it does not provide a precise growth forecast of the next 12 months of data services revenues.
As of March 31, 2021, ASV was $1.580 billion, which increased 6.9% compared to the ASV as of March 31, 2020. ASV represents nearly 100% of total data services revenues for this segment. This does not adjust for year-over-year foreign exchange fluctuations.
Operating Expenses, Operating Income and Operating Margin
The following chart summarizes our Fixed Income and Data Services segment's operating expenses, operating income and operating margin (dollars in millions). See “- Consolidated Operating Expenses” below for a discussion of the significant changes in our operating expenses.
Fixed Income and Data Services Segment:Three Months Ended March 31,
20212020Change
Operating expenses $335 $330 %
Adjusted operating expenses(1)
$290 $282 %
Operating income
$133 $134 — %
Adjusted operating income(1)
$178 $182 (1)%
Operating margin
28  %29  %(1 pt)
Adjusted operating margin(1)
38  %39  %(1 pt)


















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

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

ice-20210331_g27.jpg
ice-20210331_g28.jpgice-20210331_g29.jpgice-20210331_g30.jpgice-20210331_g31.jpg


(1) The adjusted numbers in the charts above are calculated by excluding items that are not reflective of our cash operations and core business performance. As a result, these adjusted numbers are not calculated in accordance with U.S. GAAP. See “- Non-GAAP Financial Measures” below.
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Three Months Ended March 31, 2021
20212020Change
Revenues:
Origination technology254 — n/a
Closing solutions70 44 61%
Data and analytics18 — n/a
Other13 614
Revenues
355 46 680
Other operating expenses
130 19 590
Acquisition-related transaction and integration costs
13 — n/a
Depreciation and amortization
106 1,662
Operating expenses
249 25 899
Operating income
$106 $21 414%
Mortgage Technology Revenues
Our mortgage technology revenues are derived from our comprehensive, end-to-end U.S. residential mortgage platform. Our mortgage technology business is intended to enable greater workflow efficiency for customers focused on originating U.S. residential mortgage loans. Mortgage technology revenues increased $309 million or 680% for the three months ended March 31, 2021 from the comparable period in 2020. In September 2020, we acquired Ellie Mae and, as a result, first quarter 2020 results do not include a contribution from this acquisition.
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 MERS, (previously reported in other revenues) with prior periods restated to reflect these changes.
Origination technology: Our origination technology acts as a system of record for the mortgage origination, automating the gathering, reviewing, and verifying of mortgage-related information and enabling automated enforcement of rules and business practices designed to help ensure that each completed loan transaction is of high quality and adheres to secondary market standards. These revenues are based on recurring Software as a Service, or SaaS, subscription fees, with an additive Success-Based Pricing fee as lenders exceed the number of loans closed that are included with their monthly base subscription.
In addition, the ICE Mortgage Technology network provides originators connectivity to the mortgage supply chain and facilitates the secure exchange of information between our customers and a broad ecosystem of third-party service providers, as well as lenders and investors that are critical to consummating the millions of loan transactions that occur on our origination network each year. Revenue from the ICE Mortgage Technology network is largely transaction-based.
Closing solutions: Our closing solutions 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 of record for recording and tracking changes in mortgage servicing rights and beneficial ownership interests in loans secured by U.S. residential real estate. Revenues from closing solutions are largely transaction-based.
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. 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. residential mortgage market. We also provide a Data as a Service, or DaaS, offering through private data clouds for lenders to access their own data and origination information. Revenues related to our data products are largely subscription-based and recurring in nature.
Other: Other revenues include professional services fees, as well as revenues from ancillary products. Other revenues are transaction-based.
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The following chart summarizes our Mortgage Technology segment's operating expenses, operating income and operating margin (dollars in millions). See “- Consolidated Operating Expenses” below for a discussion of the significant changes in our operating expenses.
Mortgage Technology Segment:Three Months Ended March 31, 2021
20212020Change
Operating expenses $249 $25 n/a
Adjusted operating expenses(1)
$141 $20 n/a
Operating income
$106 $21 n/a
Adjusted operating income(1)
$214 $26 n/a
Operating margin
30  %45  %(15 pts)
Adjusted operating margin(1)
60  %55  %5 pts











































(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. See “- Non-GAAP Financial Measures”
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Consolidated Operating Expenses
The following presents our consolidated operating expenses (dollars in millions):
ice-20210331_g32.jpg
Three Months Ended March 31,
20212020Change
Compensation and benefits
$354 $278 27 %
Professional services
44 29 49 
Acquisition-related transaction and integration costs
18 12 51 
Technology and communication
162 131 24 
Rent and occupancy
21 21 
Selling, general and administrative
51 49 
Depreciation and amortization
255 157 63 
Total operating expenses
$905 $677 34 %
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.
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For the three months ended March 31, 2021 and 2020, 10% and 12%, respectively, of our operating expenses were billed in pounds sterling or euros. Due to fluctuations in the U.S. dollar compared to the pound sterling and euro, our consolidated operating expenses increased $7 million during the three months ended March 31, 2021 from the comparable period in 2020. See Item 3 “— Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Exchange Rate Risk” below for additional information.
Compensation and Benefits Expenses
Compensation and benefits expense is our most significant operating expense and includes non-capitalized employee wages, bonuses, non-cash or stock compensation, certain severance costs, benefits and employer taxes. The bonus component of our compensation and benefits expense is based on both our financial performance and individual employee performance. The performance-based restricted stock compensation expense is also based on our financial performance. Therefore, our compensation and benefits expense will vary year-to-year based on our financial performance and fluctuations in our number of employees. The below chart summarizes the significant drivers of our compensation and benefits expense results for the periods presented (dollars in millions, except employee headcount).
Three Months Ended March 31,
20212020Change
Employee headcount 8,964 6,293 42 %
Stock-based compensation expenses$35 $30 18 %
Employee headcount increased for the three months ended March 31, 2021 from the comparable period in 2020 primarily due to our acquisition of Ellie Mae. Total compensation and benefits expenses increased for the three months ended March 31, 2021 from the comparable period in 2020 primarily due to $67 million in additional costs related to the acquisitions of Ellie Mae and Bridge2 Solutions and $11 million in additional costs related to other increases in employee headcount, 2021 merit pay and increases to our employee cash bonuses, partially offset by a $5 million decrease in employee severance expenses. The stock-based compensation expenses in the table above relate to employee stock option and restricted stock awards.
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 the use of these services in our business.
Professional services expenses increased for the three months ended March 31, 2021 from the comparable period in 2020 due to $8 million in costs related to our acquisition of Ellie Mae, $4 million in higher technology consulting services fees primarily related to Bakkt and $3 million in increased costs associated with regulatory and litigation matters.
Acquisition-Related Transaction and Integration Costs
We incurred $18 million in acquisition-related transaction and integration costs for the three months ended March 31, 2021, primarily related to our integration of Ellie Mae and the expected Bakkt transaction. We incurred $12 million in acquisition-related transaction costs for the three months ended March 31, 2020, primarily related to our February 2020 Bakkt acquisition of Bridge2 Solutions. The Bridge2 Solutions acquisition costs include $10 million of expenses resulting from a Bakkt incentive award market condition estimation adjustment that was directly related to the March 2020 capital call to fund the acquisition of Bridge2 Solutions.
We expect to continue to explore and pursue various potential acquisitions and other strategic opportunities to strengthen our competitive position and support our growth. As a result, we may incur acquisition-related transaction costs in future periods.
Technology and Communication Expenses
Technology support services consist of costs for running our wholly-owned data centers, hosting costs paid to third-party data centers and maintenance of our computer hardware and software required to support our technology and cybersecurity. These costs are driven by system capacity, functionality and redundancy requirements. Communication expenses consist of costs of network connections for our electronic platforms and telecommunications costs.
Technology and communications expense also includes fees paid for access to external market data, licensing and other fee agreement expenses. Technology and communications expenses may be impacted by growth in electronic contract volume, our capacity requirements, changes in the number of telecommunications hubs and connections with customers to access our electronic platforms directly. Technology and communications expenses increased for the three months
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ended March 31, 2021 from the comparable period in 2020 primarily due to $29 million in additional costs related to our September 2020 acquisition of Ellie Mae.
Rent and Occupancy Expenses
Rent and occupancy expense relates to leased and owned property and includes rent, maintenance, real estate taxes, utilities and other related costs. We have significant operations located in and around Atlanta, New York, Pleasanton, London and Hyderabad with smaller offices located throughout the world. Rent and occupancy expenses were flat for the three months ended March 31, 2021 from the comparable period in 2020. Rent and occupancy expenses for the three months ended March 31, 2021 included $3 million in additional costs related to our September 2020 acquisition of Ellie Mae, offset by a decrease due to the early termination expense of our NYSE Chicago office lease during the three months ended March 31, 2020.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include marketing, advertising, public relations, insurance, bank service charges, dues and subscriptions, travel and entertainment, non-income taxes and other general and administrative costs.
Selling, general and administrative expenses increased for the three months ended March 31, 2021 from the comparable period in 2020 primarily due to $7 million in increased marketing expenses related to the launch of Bakkt's digital wallet, Bakkt App, as well as $4 million in increased costs related to our acquisition of Ellie Mae, partially offset by a $10 million charitable contribution in support of COVID-19 relief efforts during the three months ended March 31, 2020.
Depreciation and Amortization Expenses
Depreciation and amortization expense results from depreciation of long-lived assets such as buildings, leasehold improvements, aircraft, hardware and networking equipment, software, furniture, fixtures and equipment over their estimated useful lives. This expense includes amortization of intangible assets obtained in our acquisitions of businesses, as well as on various licensing agreements, over their estimated useful lives. Intangible assets subject to amortization consist primarily of customer relationships, trading products with finite lives and technology. This expense also includes amortization of internally-developed and purchased software over its estimated useful life.
We recorded amortization expenses on intangible assets acquired as part of our acquisitions, as well as on other intangible assets, of $159 million and $70 million for the three months ended March 31, 2021 and 2020, respectively. Amortization expense increased for the three months ended March 31, 2021 from the comparable period in 2020 primarily due to $90 million in increased amortization expenses recorded on the Ellie Mae intangible assets related to our September 2020 acquisition.
We recorded depreciation expenses on our fixed assets of $96 million and $87 million for the three months ended March 31, 2021 and 2020, respectively. Depreciation expense increased for the three months ended March 31, 2021 from the comparable period in 2020 primarily due to $7 million in additional costs related to our September 2020 acquisition of Ellie Mae.
Consolidated Non-Operating Income (Expense)
Income and expenses incurred through activities outside of our core operations are considered non-operating. The following tables present our non-operating income (expenses) (dollars in millions):
Three Months Ended March 31,
20212020Change
Other income (expense):
Interest income
$— $(96)%
Interest expense
(107)(72)49 
Other income (expense), net
48 20 144 
Total other income (expense), net
$(59)$(46)28%
Net income attributable to non-controlling interest
$(4)$(8)(51)%
Interest Income
Interest income decreased for the three months ended March 31, 2021 from the comparable period in 2020 primarily due to a decrease in short-term interest rates on various investments.
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Interest Expense
Interest expense increased for the three months ended March 31, 2021 from the comparable period in 2020 primarily due to the issuance of senior notes in May 2020 to refinance existing debt and the issuance of new senior notes in August 2020 related to the Ellie Mae acquisition. See “- Debt” below.
Other income (expense), net
We own a 40% interest in OCC which we treat as an equity method investment. OCC is regulated by the SEC and the CFTC. We recognized $25 million and $17 million during the three months ended March 31, 2021 and 2020, respectively, of equity earnings as our share of OCC's estimated profits, which is included in other income. Included within the amount recognized in 2021 is a $16 million earnings adjustment to reflect higher than reported 2020 net income than originally estimated by OCC. Similarly, included within the amount recognized in 2020 is a $7 million earnings adjustment to reflect higher than reported 2019 net income than originally estimated.
In connection with our equity investment in Euroclear, we recognized dividend income of $30 million during the three months ended March 31, 2021, which is included in other income.
We incurred foreign currency transaction gains/(losses) of ($6 million) and $4 million for the three months ended March 31, 2021 and 2020, respectively, primarily attributable to the fluctuations of the pound sterling and euro relative to the U.S. dollar. Foreign currency transaction gains and losses are recorded in other income (expense), net, when the settlement of foreign currency assets, liabilities and payables occur in non-functional currencies and there is an increase or decrease in the period-end foreign currency exchange rates between periods. See Item 3 “- Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Exchange Rate Risk” included elsewhere in this Quarterly Report for more information on these items.
Non-controlling Interest
For consolidated subsidiaries in which our ownership is less than 100%, and for which we have control over the assets, liabilities and management of the entity, the outside stockholders’ interests are shown as non-controlling interests. As of March 31, 2021, our non-controlling interests included those related to the non-ICE limited partners' 26.7% ownership interest in our CDS clearing subsidiaries, non-controlling interests in ICE Futures Abu Dhabi and redeemable non-controlling interests of the non-ICE partners in Bakkt.
In December 2018, Bakkt was capitalized with $183 million in initial funding with ICE as the majority owner, along with a group of other minority investors, and in March 2020, an additional $300 million in funding occurred with ICE maintaining its majority ownership. We hold a call option over these interests subject to certain terms. Similarly, the non-ICE partners in Bakkt hold a put option to require us to repurchase their interests subject to certain terms. These minority interests are reflected as redeemable non-controlling interests in temporary equity within our consolidated balance sheet and are subject to remeasurement when repurchase is probable.
Consolidated Income Tax Provision
Consolidated income tax expense was $183 million and $178 million for the three months ended March 31, 2021 and 2020, respectively. The change in consolidated income tax expense between periods is primarily due to the tax impact of changes in our pre-tax income and the changes in our effective tax rate each period. Our effective tax rate was 22% and 21% for the three months ended March 31, 2021 and 2020, respectively. The effective tax rate for the three months ended March 31, 2021 was higher than the effective tax rate for the comparable period in 2020 primarily due to the U.K. corporate income tax rate increase from 17% to 19%, effective from April 1, 2020, and less excess tax benefits from stock compensation.
The U.K. government, in its recent Finance Bill of 2021, proposed increasing the U.K. corporate income tax rate from 19% to 25%, beginning April 1, 2023. We expect this tax law change to be enacted later in 2021 and will account for the deferred tax effects in the quarter that the tax law is officially enacted.
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. These provisions did not have a material impact on our income tax provision for the three months ended March 31, 2021.
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Quarterly Results of Operations
The following quarterly unaudited condensed consolidated statements of income data has been prepared on substantially the same basis as our audited consolidated financial statements and includes all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of our consolidated results of operations for the quarters presented. The historical results for any quarter do not necessarily indicate the results expected for any future period. The following table sets forth quarterly consolidated statements of income data (in millions):
Three Months Ended
March 31, 2021December 31,
2020
September 30, 2020June 30, 2020March 31, 2020
Revenues:
Energy futures and options$310 $262 $229 $276 $353 
Agricultural and metals futures and options59 48 54 59 84 
Financial futures and options105 82 76 76 123 
Cash equities and equity options734 651 593 672 669 
OTC and other77 77 73 75 71 
Data and connectivity services207 201 201 195 193 
Listings114 112 111 111 112 
Total exchanges revenues1,606 1,433 1,337 1,464 1,605 
Fixed income execution1414152021
CDS Clearing5542474772
Fixed income data and analytics264 262 259 252 245 
Other data and network services135 132 129 127 126 
Total fixed income and data services revenues468 450 450 446 464 
Origination technology 25424967
Closing solutions7073675444
Data and analytics18175
Other1311422
Total mortgage technology revenues355 350 143 56 46 
Total revenues
2,429 2,233 1,930 1,966 2,115 
Transaction-based expenses632 562 519 571 556 
Total revenues, less transaction-based expenses
1,797 1,671 1,411 1,395 1,559 
Compensation and benefits354 339 298 273 278 
Professional services44 44 37 34 29 
Acquisition-related transaction and integration costs18 15 76 12 
Technology and communication162 161 131 126 131 
Rent and occupancy21 22 19 19 21 
Selling, general and administrative51 53 43 40 49 
Depreciation and amortization255 257 180 157 157 
Total operating expenses
905 891 784 651 677 
Operating income
892 780 627 744 882 
Other income (expense), net (59)(106)(44)(71)(46)
Income tax expense
183 146 189 145 178 
Net income
$650 $528 $394 $528 $658 
Net income attributable to non-controlling interest
(4)(2)(4)(5)(8)
Net income attributable to Intercontinental Exchange, Inc.
$646 $526 $390 $523 $650 

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Liquidity and Capital Resources
Below are charts that reflect our outstanding debt and capital allocation. The acquisition and integration costs in the chart below include cash paid for acquisitions, net of cash received for divestitures, cash paid for equity investments, cash paid for non-controlling interest and redeemable non-controlling interest, and acquisition-related transaction and integration costs, in each period.
ice-20210331_g33.jpgice-20210331_g34.jpgice-20210331_g35.jpg
ice-20210331_g36.jpgice-20210331_g37.jpgice-20210331_g38.jpgice-20210331_g39.jpg
We have financed our operations, growth and cash needs primarily through income from operations and borrowings under our various debt facilities. Our principal capital requirements have been to fund capital expenditures, working capital, strategic acquisitions and investments, stock repurchases, dividends and the development of our technology platforms. We believe that our cash on hand and cash flows from operations will be sufficient to repay our outstanding debt, but we
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may also need to incur additional debt or issue additional equity securities in the future. See “- Future Capital Requirements” below.
See “– Cash Flow” below for a discussion of our capital expenditures and capitalized software development costs.
Consolidated cash and cash equivalents were $562 million and $583 million as of March 31, 2021 and December 31, 2020, respectively. We had $1.5 billion and $1.4 billion in short-term and long-term restricted cash and cash equivalents as of March 31, 2021 and December 31, 2020, respectively.
As of March 31, 2021, the amount of unrestricted cash held by our non-U.S. subsidiaries was $294 million. Due to U.S. tax reform, the majority of our foreign earnings since January 1, 2018 have been subject to immediate U.S. income taxation, and the existing non-U.S. unrestricted cash balance can be distributed to the U.S. in the future with no material additional income tax consequences.
Our cash and cash equivalents and financial investments are managed as a global treasury portfolio of non-speculative financial instruments that are readily convertible into cash, such as overnight deposits, term deposits, money market funds, mutual funds for treasury investments, short duration fixed income investments and other money market instruments, thus ensuring high liquidity of financial assets. We may invest a portion of our cash in excess of short-term operating needs in investment-grade marketable debt securities, including government or government-sponsored agencies and corporate debt securities. As of March 31, 2021, we held $24 million of unrestricted cash that was set aside for legal, regulatory, and surveillance operations at NYSE.
Cash Flow
The following table presents the major components of net changes in cash, cash equivalents, and restricted cash and cash equivalents (in millions):
Three Months Ended March 31,
20212020
Net cash provided by (used in):
Operating activities
$734 $520 
Investing activities
(116)(302)
Financing activities
(583)(411)
Effect of exchange rate changes
(1)(9)
Net increase/(decrease) in cash, cash equivalents and restricted cash and cash equivalents
$34 $(202)
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 $214 million increase in net cash provided by operating activities during the three months ended March 31, 2021 from the comparable period in 2020 was driven by the timing of accounts receivable collections of $297 million, primarily due to the extraordinary trading activity in 2020 with collections in subsequent months. This increase was partially offset by a decrease in Section 31 fee collections of $111 million, primarily due to lower rates, as well as a $8 million decrease in net income. The remaining change is due to fluctuations in our working capital and the timing of various payments such as transaction-related expenses.
Investing Activities
Consolidated net cash used in investing activities for the three months ended March 31, 2021 relates to $40 million of capital expenditures and $76 million of capitalized software development costs.

Consolidated net cash used in investing activities for the three months ended March 31, 2020 primarily relates to $249 million cash paid for acquisitions, net of cash acquired, $15 million of capital expenditures and $44 million of capitalized software development expenditures.
The capital expenditures primarily relate to hardware and software purchases to continue the development and expansion of our electronic platforms, data services and clearing houses, and leasehold improvements. The software development expenditures primarily relate to the development and expansion of our electronic trading platforms, data services, mortgage services and clearing houses.
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Financing Activities
Consolidated net cash used in financing activities for the three months ended March 31, 2021 primarily relates to $343 million in net repayments under our Commercial Paper Program, $187 million in dividend payments to stockholders and $65 million in cash payments related to treasury shares received for restricted stock tax payments and stock option exercises.
Consolidated net cash used in financing activities for the three months ended March 31, 2020 primarily relates to $699 million in repurchases of common stock, $503 million in net borrowings under our Commercial Paper Program, $166 million in dividend payments to our stockholders and $69 million in cash payments related to treasury shares received for restricted stock tax payments and stock options exercises.
Debt
As of March 31, 2021, we had $16.2 billion in outstanding debt, consisting of $12.9 billion of fixed rate senior notes, $1.2 billion of floating rate senior notes, $2.1 billion under the Commercial Paper Program and $6 million under credit lines at our India subsidiaries. Our current fixed rate senior notes of $12.9 billion have 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 one to 176 days as of March 31, 2021, with a weighted average interest rate of 0.33% per annum, and a weighted average remaining maturity of 41 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 India subsidiaries. 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.
We have a $3.8 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 other lenders party thereto. As of March 31, 2021, of the $3.8 billion that is currently available for borrowing under the Credit Facility, $2.1 billion is required to back-stop the amount outstanding under our Commercial Paper Program and $172 million is required to support certain broker-dealer and other subsidiary commitments. The amount required to back-stop the amounts outstanding under the Commercial Paper Program will fluctuate as we increase or decrease our commercial paper borrowings. The remaining $1.5 billion is available for working capital and general corporate purposes including, but not limited to, acting as a back-stop to future increases in the amounts outstanding under the Commercial Paper Program.
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 $343 million under our Commercial Paper Program during the three months ended March 31, 2021.
Upon maturity of our commercial paper and to the extent old issuances are not repaid by cash on hand, we are exposed to the rollover risk of not being able to issue new commercial paper. To mitigate this risk, we maintain the Credit Facility for an aggregate amount which meets or exceeds the amount issued under our Commercial Paper Program at any time. If we were not able to issue new commercial paper, we have the option of drawing on the back-stop revolving facility. However, electing to do so would result in higher interest expense.
For additional details of our debt instruments, refer to Note 9 to our consolidated unaudited financial statements, included in this Quarterly Report, and Note 10 to our consolidated financial statements included in our 2020 Form 10-K.
Capital Return
In December 2019, our Board approved an aggregate of $2.4 billion for future repurchases of our common stock with no fixed expiration date that became effective January 1, 2020. The $2.4 billion replaced the previous amount approved by the Board.
For the three months ended March 31, 2021, we did not repurchase any of our outstanding common stock. For the three months ended March 31, 2020, we repurchased 7.6 million shares of our outstanding common stock at a cost of $699 million, including 4.4 million shares at a cost of $400 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.
We discontinued stock repurchases and terminated our Rule 10b5-1 trading plan in August 2020 in connection with the Ellie Mae acquisition. The remaining balance of Board approved funds for future repurchase as of March 31, 2021 is $1.2
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billion. The approval of our Board for the share repurchases does not obligate us to acquire any particular amount of our common stock. In addition, our Board may increase or decrease the amount available for repurchases from time to time.
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. The timing and extent of future repurchases that are not made pursuant to a Rule 10b5-1 trading plan will be at our discretion and will depend upon many conditions. In making a determination regarding any stock repurchases, management considers multiple factors, including overall stock market conditions, our common stock price performance, the remaining amount authorized for repurchases by our Board, the potential impact of a stock repurchase program on our corporate debt ratings, our expected free cash flow and working capital needs, our current and future planned strategic growth initiatives, and other potential uses of our cash and capital resources.
During the first quarter of 2021, we paid a quarterly dividend of $0.33 per share of our common stock for an aggregate payout of $187 million, which includes the payment of dividend equivalents on unvested employee restricted stock units.
Future Capital Requirements
Our future capital requirements will depend on many factors, including the rate of growth across our segments, strategic plans and acquisitions, available sources for financing activities, required and discretionary technology and clearing initiatives, regulatory requirements, the timing and introduction of new products and enhancements to existing products, the geographic mix of our business and potential stock repurchases.
We currently expect to incur capital expenditures (including operational and real estate capital expenditures) and to incur software development costs that are eligible for capitalization ranging in the aggregate between $400 million and $430 million in 2021, which we believe will support the enhancement of our technology, business integration and the continued growth of our businesses.
As of March 31, 2021, we had $1.2 billion authorized for future repurchases of our common stock. Refer to Note 11 to our consolidated financial statements included in this Quarterly Report for additional details on our stock repurchase program.
Our Board has adopted a quarterly dividend policy providing that dividends will be approved quarterly by the Board or the Audit Committee taking into account factors such as our evolving business model, prevailing business conditions, our current and future planned strategic growth initiatives and our financial results and capital requirements, without a predetermined net income payout ratio. On April 29, 2021, we announced a $0.33 per share dividend for the second quarter of 2021 with the dividend payable on June 30, 2021 to stockholders of record as of June 16, 2021.
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 9 and 13 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. However, we cannot provide assurance that such financing or transactions will be available or successful, or that the terms of such financing or transactions will be favorable to us. See “—Debt" above.
Non-GAAP Measures
We use certain financial measures internally to evaluate our performance and make financial and operational decisions that are presented in a manner that adjusts from their equivalent GAAP measures or that supplement the information provided by our GAAP measures. We use these adjusted results because we believe they more clearly highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our core operating performance.
We use these measures in communicating certain aspects of our results and performance, including in this Quarterly Report, and believe that these measures, when viewed in conjunction with our GAAP results and the accompanying reconciliation, can provide investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. In addition, we believe the presentation of these measures is useful to investors for making period-to-period comparisons of results because the adjustments to GAAP are not reflective of our core business performance.
These financial measures are not presented in accordance with, or as an alternative to, GAAP financial measures and may be different from non-GAAP measures used by other companies. We encourage investors to review the GAAP
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financial measures included in this Quarterly Report, including our consolidated financial statements, to aid in their analysis and understanding of our performance and in making comparisons.
The 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. These measures, including the adjustments and their related income tax effect and other tax adjustments (in millions, except for percentages and per share amounts), are as follows:
Exchanges SegmentFixed Income and Data Services SegmentMortgage Technology SegmentConsolidated
Three Months Ended March 31,Three Months Ended March 31,Three Months Ended March 31,Three Months Ended March 31,
20212020202120202021202020212020
Total revenues, less transaction-based expenses
$974 $1,049 $468 $464 $355 $46 $1,797 $1,559 
Operating expenses
321 322 335 330 249 25 905 677 
Less: Amortization of acquisition-related intangibles18 17 45 48 95 158 70 
Less: Transaction and integration costs and acquisition-related success fees 10 — — 13 — 18 10 
Adjusted operating expenses
$298 $295 $290 $282 $141 $20 $729 $597 
Operating income
$653 $727 $133 $134 $106 $21 $892 $882 
Adjusted operating income
$676 $754 $178 $182 $214 $26 $1,068 $962 
Operating margin
67 %69 %28 %29 %30 %45 %50 %57 %
Adjusted operating margin
69 %72 %38 %39 %60 %55 %59 %62 %
Net income attributable to ICE common stockholders
$646 $650 
Add: Amortization of acquisition-related intangibles158 70 
Add: Transaction and integration costs and acquisition-related success fees 18 10 
Less: Net income from unconsolidated investee(25)(17)
Less: Income tax effect for the above items (40)(17)
Add/(Less): Deferred tax adjustments on acquisition-related intangibles(1)
Adjusted net income attributable to ICE common stockholders$758 $695 
Basic earnings per share attributable to ICE common stockholders$1.15 $1.18 
Diluted earnings per share attributable to ICE common stockholders$1.14 $1.17 
Adjusted basic earnings per share attributable to ICE common stockholders$1.35 $1.26 
Adjusted diluted earnings per share attributable to ICE common stockholders$1.34 $1.25 
Basic weighted average common shares outstanding
562 552 
Diluted weighted average common shares outstanding565 555 
Amortization of acquisition-related intangibles are included in non-GAAP adjustments as excluding these non-cash expenses provides greater clarity regarding our financial strength and stability of cash operating results.
Acquisition-related transaction and integration costs are included as part of our core business expenses, except for those that are directly related to the announcement, closing, financing, or termination of a transaction. However, we adjust for the acquisition-related transaction and integration costs for acquisitions such as Ellie Mae given the magnitude of the $11.4 billion purchase price of the acquisition. We also adjust for the acquisition-related transaction costs related to the expected merger between Bakkt and VIH due to the significance of the transaction. During the three months ended March 31, 2020, we 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 financing a transaction.
Effective during the three months ended March 31, 2021, we will exclude net income from our unconsolidated equity method investees for purposes of calculating non-GAAP measures, and have retroactively restated the prior year period for comparability purposes. As of both March 31, 2021 and 2020, our only equity method investee was OCC.
Similar to the treatment of our investment in OCC, following the expected merger between Bakkt and VIH, we plan to exclude our equity method investment in Bakkt. 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.
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The income tax effects relating to all non-GAAP adjustments above are included as non-GAAP adjustments. We also include non-GAAP adjustments for deferred tax adjustments on acquisition-related intangibles. The adjustments of $1
million and ($1 million) for the three months ending March 31, 2021 and 2020, respectively, were due to U.S. state apportionment changes.
For additional information on these items, refer to our consolidated financial statements included in this Quarterly Report and “—Consolidated Operating Expenses”, above.
Contractual Obligations and Commercial Commitments
During the three months ended March 31, 2021, there were no significant changes to our contractual obligations and commercial commitments from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2020 Form 10-K.
Off-Balance Sheet Arrangements
As described in Note 13 to our consolidated financial statements, which are included elsewhere in this Quarterly Report, certain clearing house collateral is reported off-balance sheet. In addition, and as described in Note 3 of our 2020 Form 10-K, Bakkt custodial assets are reported off-balance sheet. We do not have any relationships with unconsolidated entities or financial partnerships, often referred to as structured finance or special purpose entities.
New and Recently Adopted Accounting Pronouncements
During the three months ended March 31, 2021, there were no significant changes to the new and recently adopted accounting pronouncements applicable to us from those disclosed in Note 2 of our 2020 Form 10-K.
Critical Accounting Policies
During the three months ended March 31, 2021, there were no significant changes to our critical accounting policies and estimates from those disclosed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2020 Form 10-K.
ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a result of our operating and financing activities, we are exposed to market risks such as interest rate risk, foreign currency exchange rate risk and credit risk. We have implemented policies and procedures designed to measure, manage, monitor and report risk exposures, which are regularly reviewed by the appropriate management and supervisory bodies.
Interest Rate Risk
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 March 31, 2021 and December 31, 2020, our cash and cash equivalents, short-term and long-term restricted cash and cash equivalents and short-term and long-term investments were $2.0 billion for each period, of which $225 million and $245 million, respectively, were denominated in pounds sterling, euros or Canadian dollars, and the remaining amounts are denominated in U.S. dollars. 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 March 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 March 31, 2021, we had $16.2 billion in outstanding debt, of which $12.9 billion relates to our fixed rate senior notes. The remaining amount outstanding of $3.3 billion relates to $2.1 billion outstanding under our Commercial Paper Program and $1.2 billion of floating rate senior notes, each of which bear interest at fluctuating rates, and $6 million under credit lines at our India subsidiaries. A hypothetical 100 basis point increase in short-term interest rates relating to the amounts of floating rate debt outstanding as of March 31, 2021 would decrease annual pre-tax earnings by $33 million, assuming no change in the volume or composition of our outstanding indebtedness and no hedging activity. See Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Debt" included in this Quarterly Report.
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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 March 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.
Foreign Currency Exchange Rate Risk
As an international business, we are subject to foreign currency exchange rate risk. We may experience gains or losses from foreign currency transactions in the future given that a significant part of our assets and liabilities are recorded in pounds sterling, Canadian dollars or euros, and a significant portion of our revenues and expenses are recorded in pounds sterling or euros. Certain assets, liabilities, revenues and expenses of foreign subsidiaries are denominated in the local functional currency of such subsidiaries. Our exposure to foreign denominated earnings for the three months ended March 31, 2021 and 2020 is presented by primary foreign currency in the following table (dollars in millions, except exchange rates):
 Three Months Ended March 31, 2021Three Months Ended March 31, 2020
 Pound SterlingEuroPound SterlingEuro
Average exchange rate to the U.S. dollar in the current year period1.3792 1.2060 1.2794 1.1025 
Average exchange rate to the U.S. dollar in the same period in the prior year1.2794 1.1025 1.3021 1.1355 
Average exchange rate increase (decrease)%%(2)%(3)%
Foreign denominated percentage of:    
Revenues, less transaction-based expenses%%%%
Operating expenses%%10 %%
Operating income%%%%
Impact of the currency fluctuations (1) on:
   
Revenues, less transaction-based expenses$$$(2)$(3)
Operating expenses$$$(1)$(1)
Operating income$$$(1)$(2)
(1)    Represents the impact of currency fluctuation for the three months ended March 31, 2021 and 2020 compared to the same period in the prior year.
We have a significant part of our assets, liabilities, revenues and expenses recorded in pounds sterling or euros. For the three months ended March 31, 2021, 13% of our consolidated revenues, less transaction-based expenses were denominated in pounds sterling or euros and 10% of our consolidated operating expenses were denominated in pounds sterling or euros. As the pound sterling or euro exchange rate changes, the U.S. equivalent of revenues and expenses denominated in foreign currencies changes accordingly.
Foreign currency transaction risk related to the settlement of foreign currency denominated assets, liabilities and payables occurs through our operations, which are received in or paid in pounds sterling, Canadian dollars, or euros, due to the increase or decrease in the foreign currency exchange rates between periods. We incurred foreign currency transaction gains/(losses) of ($6 million) and $4 million for the three months ended March 31, 2021 and 2020, respectively, inclusive of the impact of foreign currency transactions. The foreign currency transaction gains/ (losses) were primarily attributable to the fluctuations of the pound sterling and euro relative to the U.S. dollar. A 10% adverse change in the underlying foreign currency exchange rates as of March 31, 2021, 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 transaction loss of $15 million.
We entered into foreign currency hedging transactions during the three months ended March 31, 2021 and 2020 as economic hedges to help mitigate a portion of our foreign exchange risk exposure and may enter into additional hedging transactions in the future to help mitigate our foreign exchange risk exposure. Although we may enter into additional hedging transactions in the future, these hedging arrangements may not be effective, particularly in the event of imprecise forecasts of the levels of our non-U.S. denominated assets and liabilities.
We have foreign currency translation risk equal to our net investment in our foreign subsidiaries. The financial statements of these subsidiaries are translated into U.S. dollars using a current rate of exchange, with gains or losses included in the
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cumulative translation adjustment account, a component of equity. Our exposure to the net investment in foreign currencies is presented by primary foreign currencies in the table below (in millions):
 As of March 31, 2021
 Position in 
pounds sterling
 Position in 
Canadian dollars
Position in euros
Assets£738  C$1,427 155 
   of which goodwill represents587  164 92 
Liabilities67  1,022 48 
Net currency position£671  C$405 107 
Net currency position, in $USD$925  $323 $126 
Negative impact on consolidated equity of a 10% decrease in foreign currency exchange rates$93  $32 $13 
Foreign currency translation adjustments are included as a component of accumulated other comprehensive income/(loss) within our balance sheet. See the table below for the portion of equity attributable to foreign currency translation adjustments as well as the activity for the three months ended March 31, 2021 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. dollar which were 1.3782 and 1.3665 as of March 31, 2021 and December 31, 2020, respectively, and by fluctuations of the euro as compared to the U.S. dollar which were 1.1731 and 1.2216 as of March 31, 2021 and December 31, 2020, respectively.
Changes in Accumulated Other Comprehensive Income/(Loss) from Foreign Currency Translation Adjustments
(in millions)
Balance, as of December 31, 2020
$(134)
Net current period other comprehensive income/(loss)
Balance, as of March 31, 2021
$(127)
The future impact on our business relating to the U.K. leaving the EU and the corresponding regulatory changes are uncertain at this time, including future impacts on currency exchange rates.
Credit Risk
We are exposed to credit risk in our operations in the event of a counterparty default. We limit our exposure to credit risk by rigorously selecting the counterparties with which we make our investments, monitoring them on an ongoing basis and executing agreements to protect our interests.
Clearing House Cash Deposit Risks
The ICE Clearing Houses hold material amounts of clearing member cash and cash equivalent deposits which are held or invested primarily to provide security of capital while minimizing credit, market and liquidity risks. Refer to Note 13 to our consolidated financial statements for more information on the ICE Clearing Houses' cash and cash equivalent deposits, which were $85.6 billion as of March 31, 2021. 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. As the ICE Clearing Houses may pass on interest revenues (minus costs) to the clearing members, this could include negative or reduced yield due to market conditions. For a summary of the risks associated with these deposits and how these risks are mitigated, see Part II, Item 7(A) “Quantitative and Qualitative Disclosures About Market Risk” in our 2020 Form 10-K.
ITEM 4.        CONTROLS AND PROCEDURES
(a)  Evaluation of Disclosure Controls and Procedures.  As of the end of the period covered by this report, an evaluation was carried out by our management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report.
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(b)  Changes in Internal Controls over Financial Reporting. There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. As a result, no corrective actions were taken.

PART II. Other Information
ITEM 1.    LEGAL PROCEEDINGS
See Note 14 to the consolidated financial statements and related notes, which are incorporated by reference herein.
ITEM 1(A).     RISK FACTORS
During the three months ended March 31, 2021, there were no significant new risk factors from those disclosed in Part I, Item 1A, "Risk Factors" in our 2020 Form 10-K. In addition to the other information set forth in this Quarterly Report, including the information in the "- Regulation" section of Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations, you should carefully consider the factors discussed under “Risk Factors” and the regulation discussion under “Business - Regulation” in our 2020 Form 10-K. These risks could materially and adversely affect our business, financial condition and results of operations. The risks and uncertainties in our 2020 Form 10-K are not the only ones facing us. Additional risks and uncertainties not presently known to us, or that we currently believe to be immaterial, may also adversely affect our business.
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Stock Repurchases
We discontinued stock repurchases and terminated our Rule 10b5-1 trading plan in August 2020 in connection with the Ellie Mae acquisition. Refer to Note 11 to our consolidated financial statements and related notes, which are included elsewhere in this Quarterly Report for details on our stock repurchase plans.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5.        OTHER INFORMATION
Not applicable.

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ITEM 6.        EXHIBITS
Exhibit Number  Description of Document
2.1
10.1
The Ninth Amendment, dated as of March 8, 2021, by and among Intercontinental Exchange, Inc., as borrower, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent, amending that certain Credit Agreement, dated as of April 3, 2014, by and among Intercontinental Exchange, Inc., as borrower, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (as amended by the First Amendment to Credit Agreement, dated as of May 15, 2015, the Second Amendment to Credit Agreement, dated as of November 9, 2015, the Third Amendment to Credit Agreement, dated as of November 13, 2015, the Fourth Amendment to Credit Agreement, dated as of August 18, 2017, the Fifth Amendment to Credit Agreement, dated as of August 18, 2017, the Sixth Amendment to Credit Agreement, dated as of August 9, 2018, the Seventh Amendment to Credit Agreement, dated as of August 14, 2020 and the Eighth Amendment to Credit Agreement, dated as of August 21, 2020).
10.2
10.3
10.4
10.5
10.6
10.7
31.1
31.2
32.1
32.2
101   
The following materials from Intercontinental Exchange, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interest (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text.
104
The cover page from Intercontinental Exchange, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 formatted in Inline XBRL.
* Certain exhibits and similar attachments to this agreement have been omitted in accordance with Item 601(b)(2) of
Regulation S-K. A copy of any omitted exhibit or other attachment will be furnished supplementally to the SEC upon request.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Intercontinental Exchange, Inc.
(Registrant)
Date: April 29, 2021
By:/s/ Scott A. Hill
Scott A. Hill
Chief Financial Officer
(Principal Financial Officer)
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