Intercontinental Exchange, Inc. [ICE] Filings

10-Q 1 ice-20210930.htm 10-Q ice-20210930

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 September 30, 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)


Delaware			46-2286804
(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 Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value per share	ICE	New 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 October 25, 2021, the number of shares of the registrant’s Common Stock outstanding was 563,404,336 shares.

INTERCONTINENTAL EXCHANGE, INC.

Form 10-Q

Quarterly Period Ended September 30, 2021

TABLE OF CONTENTS




PART I.	Financial Statements
Item 1.	Consolidated Financial Statements (Unaudited):
	Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	2
	Consolidated Statements of Income for the nine and three months ended September 30, 2021 and 2020	4
	Consolidated Statements of Comprehensive Income for the nine and three months ended September 30, 2021 and 2020	5
	Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interest for the nine and three months ended September 30, 2021 and 2020	6
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	32

PART II.	Other Information
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	33
SIGNATURES		34

PART I. Financial Statements

Item 1. Consolidated Financial Statements (Unaudited)

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Balance Sheets

(In millions, except per share amounts)


	As of		As of December 31, 2020
	September 30, 2021
	(Unaudited)
Assets:
Current assets:
Cash and cash equivalents	$	618	$	583
Short-term restricted cash and cash equivalents	1,045		1,000
Customer accounts receivable, net of allowance for doubtful accounts of $23 and $27 at September 30, 2021 and December 31, 2020, respectively	1,327		1,230
Margin deposits, guaranty funds and delivery contracts receivable	108,698		84,083
Prepaid expenses and other current assets	1,032		323
Total current assets	112,720		87,219
Property and equipment, net	1,723		1,713
Other non-current assets:
Goodwill	21,309		21,291
Other intangible assets, net	13,928		14,408
Long-term restricted cash and cash equivalents	398		408
Other non-current assets	584		1,161
Total other non-current assets	36,219		37,268
Total assets	$	150,662	$	126,200

Liabilities and Equity:
Current liabilities:
Accounts payable and accrued liabilities	$	696	$	639
Section 31 fees payable	14		207
Accrued salaries and benefits	275		346
Deferred revenue	322		158
Short-term debt	1,831		2,411
Margin deposits, guaranty funds and delivery contracts payable	108,698		84,083
Other current liabilities	196		155
Total current liabilities	112,032		87,999
Non-current liabilities:
Non-current deferred tax liability, net	3,689		3,563
Long-term debt	12,394		14,126
Accrued employee benefits	200		206
Non-current operating lease liability	274		320
Other non-current liabilities	394		359
Total non-current liabilities	16,951		18,574
Total liabilities	128,983		106,573
Commitments and contingencies
Redeemable non-controlling interest in consolidated subsidiaries	87		93


Equity:
Intercontinental Exchange, Inc. stockholders’ equity:
Preferred stock, $0.01 par value; 100 shares authorized; none issued or outstanding at September 30, 2021 and December 31, 2020	—		—
Common stock, $0.01 par value; 1,500 shares authorized; 631 and 629 issued at September 30, 2021 and December 31, 2020, respectively, and 562 and 561 shares outstanding at September 30, 2021 and December 31, 2020, respectively	6		6
Treasury stock, at cost; 69 shares at September 30, 2021 and 68 shares at December 31, 2020	(5,269)		(5,200)
Additional paid-in capital	14,019		13,845
Retained earnings	13,009		11,039
Accumulated other comprehensive loss	(206)		(192)
Total Intercontinental Exchange, Inc. stockholders’ equity	21,559		19,498
Non-controlling interest in consolidated subsidiaries	33		36
Total equity	21,592		19,534
Total liabilities and equity	$	150,662	$	126,200

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)


	Nine Months Ended September 30,				Three Months Ended September 30,
	2021		2020		2021		2020
Revenues:
Exchanges	$	4,376	$	4,406	$	1,434	$	1,337
Fixed income and data services	1,403		1,360		477		450
Mortgage technology	1,061		245		366		143
Total revenues	6,840		6,011		2,277		1,930
Transaction-based expenses:
Section 31 fees	204		465		38		145
Cash liquidity payments, routing and clearing	1,330		1,181		437		374
Total revenues, less transaction-based expenses	5,306		4,365		1,802		1,411
Operating expenses:
Compensation and benefits	1,093		849		374		298
Professional services	124		100		43		37
Acquisition-related transaction and integration costs	42		90		14		76
Technology and communication	495		388		168		131
Rent and occupancy	61		59		20		19
Selling, general and administrative	163		132		52		43
Depreciation and amortization	759		494		253		180
Total operating expenses	2,737		2,112		924		784
Operating income	2,569		2,253		878		627
Other income (expense):
Interest income	—		9		—		1
Interest expense	(321)		(245)		(108)		(89)
Other income, net	1,341		75		54		44
Other income (expense), net	1,020		(161)		(54)		(44)
Income before income tax expense	3,589		2,092		824		583
Income tax expense	1,049		512		187		189
Net income	$	2,540	$	1,580	$	637	$	394
Net income attributable to non-controlling interest	(9)		(17)		(4)		(4)
Net income attributable to Intercontinental Exchange, Inc.	$	2,531	$	1,563	$	633	$	390
Earnings per share attributable to Intercontinental Exchange, Inc. common stockholders:
Basic	$	4.50	$	2.85	$	1.12	$	0.71
Diluted	$	4.48	$	2.83	$	1.12	$	0.71
Weighted average common shares outstanding:
Basic	563		549		563		548
Diluted	565		552		566		551

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(In millions)

(Unaudited)


	Nine Months Ended September 30,				Three Months Ended September 30,
	2021		2020		2021		2020
Net income	$	2,540	$	1,580	$	637	$	394
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax benefit of $1 for both the nine and three months ended September 30, 2021 and tax expense of $1 for both the nine and three months ended September 30, 2020	(15)		(30)		(32)		48
Change in equity method investment	1		—		—		—


Other comprehensive income (loss)	(14)		(30)		(32)		48
Comprehensive income	$	2,526	$	1,550	$	605	$	442
Comprehensive income attributable to non-controlling interest	(9)		(17)		(4)		(4)
Comprehensive income attributable to Intercontinental Exchange, Inc.	$	2,517	$	1,533	$	601	$	438

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interest

(In millions)

(Unaudited)


	Intercontinental Exchange, Inc. Stockholders’ Equity												Non- Controlling Interest in Consolidated Subsidiaries		Total Equity		Redeemable Non-Controlling Interest
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)
	Shares	Value		Shares	Value
Balance, as of December 31, 2020	629	$	6	(68)	$	(5,200)	$	13,845	$	11,039	$	(192)	$	36	$	19,534	$	93
Other comprehensive income	—	—		—	—		—		—		(14)		—		(14)		—

Exercise of common stock options	—	—		—	—		10		—		—		—		10		—

Payments relating to treasury shares	—	—		(1)	(69)		—		—		—		—		(69)		—
Stock-based compensation	—	—		—	—		122		—		—		—		122		3
Issuance under the employee stock purchase plan	—	—		—	—		42		—		—		—		42		—

Issuance of restricted stock	2	—		—	—		—		—		—		—		—		—

Distributions of profits	—	—		—	—		—		—		—		(21)		(21)		—
Dividends paid to stockholders	—	—		—	—		—		(561)		—		—		(561)		—


Net income (loss) attributable to non-controlling interest	—	—		—	—		—		(9)		—		18		9		(9)
Net income	—	—		—	—		—		2,540		—		—		2,540		—
Balance, as of September 30, 2021	631	$	6	(69)	$	(5,269)	$	14,019	$	13,009	$	(206)	$	33	$	21,592	$	87


	Intercontinental Exchange, Inc. Stockholders’ Equity												Non- Controlling Interest in Consolidated Subsidiaries		Total Equity		Redeemable Non-Controlling Interest
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)
	Shares	Value		Shares	Value
Balance, as of June 30, 2021	631	$	6	(68)	$	(5,267)	$	13,952	$	12,563	$	(174)	$	36	$	21,116	$	89
Other comprehensive income	—	—		—	—		—		—		(32)		—		(32)		—

Exercise of common stock options	—	—		—	—		2		—		—		—		2		—

Payments relating to treasury shares	—	—		(1)	(2)		—		—		—		—		(2)		—
Stock-based compensation	—	—		—	—		41		—		—		—		41		1
Issuance under the employee stock purchase plan	—	—		—	—		24		—		—		—		24		—



Distributions of profits													(10)		(10)
Dividends paid to stockholders	—	—		—	—		—		(187)		—		—		(187)		—


Net income (loss) attributable to non-controlling interest	—	—		—	—		—		(4)		—		7		3		(3)
Net income	—	—		—	—		—		637		—		—		637		—
Balance, as of September 30, 2021	631	$	6	(69)	$	(5,269)	$	14,019	$	13,009	$	(206)	$	33	$	21,592	$	87

See accompanying notes.

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interest — (Continued)

(In millions)

(Unaudited)


	Intercontinental Exchange, Inc. Stockholders’ Equity												Non- Controlling Interest in Consolidated Subsidiaries		Total Equity		Redeemable Non-Controlling Interest
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)
	Shares	Value		Shares	Value
Balance, as of December 31, 2019	607	$	6	(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	—	—		—	—		—		—		(30)		—		(30)		—
Stock consideration issued for acquisition	18	—		—	—		1,895								1,895
Exercise of common stock options	1	—		—	—		26		—		—		—		26		—
Repurchases of common stock	—	—		(14)	(1,247)		—		—		—		—		(1,247)		—
Payments relating to treasury shares	—	—		—	(72)		—		—		—		—		(72)		—
Stock-based compensation	—	—		—	—		105		—		—		—		105		9
Issuance under the employee stock purchase plan	—	—		—	—		33		—		—		—		33		—
Warrants issued to minority interest holders	—	—		—	—		3		—		—		—		3		2
Issuance of restricted stock	2	—		—	—		—		—		—		—		—		—

Distributions of profits	—	—		—	—		—		—		—		(31)		(31)		—
Dividends paid to stockholders	—	—		—	—		—		(500)		—		—		(500)		—

Redeemable non-controlling interest	—	—		—	—		—		—		—		—		—		10
Issuance of non-controlling interest	—	—		—	—		—		—		—		9		9		—
Net income (loss) attributable to non-controlling interest	—	—		—	—		—		(17)		—		22		5		(5)
Net income	—	—		—	—		—		1,580		—		—		1,580		—
Balance, as of September 30, 2020	628	$	6	(67)	$	(5,198)	$	13,804	$	10,682	$	(273)	$	31	$	19,052	$	94


	Intercontinental Exchange, Inc. Stockholders’ Equity												Non- Controlling Interest in Consolidated Subsidiaries		Total Equity		Redeemable Non-Controlling Interest
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)
	Shares	Value		Shares	Value
Balance, as of June 30, 2020	609	$	6	(65)	$	(5,050)	$	11,856	$	10,462	$	(321)	$	41	$	16,994	$	95

Other comprehensive income	—	—		—	—		—		—		48		—		48		—
Stock consideration issued for acquisition	18	—		—	—		1,895		—		—		—		1,895		—
Exercise of common stock options	1	—		—	—		4		—		—		—		4		—
Repurchases of common stock	—	—		(

Intercontinental Exchange, Inc. [ICE] Filings
10-Q	[2021-10-28]
10-Q	[2021-07-29]
10-Q	[2021-04-29]
10-K	[2021-02-04]
10-Q	[2020-10-29]
10-Q	[2020-07-30]
10-Q	[2020-04-30]
10-K	[2020-02-06]
10-Q	[2019-10-31]
10-Q	[2019-08-01]
10-Q	[2019-05-02]
10-K	[2019-02-07]
10-Q	[2018-10-31]
10-Q	[2018-08-02]
10-Q	[2018-05-03]
10-K	[2018-02-07]
10-Q	[2017-11-02]
10-Q	[2017-08-03]
10-Q	[2017-05-03]
10-K	[2017-02-07]
10-Q	[2016-11-01]
10-Q	[2016-08-03]
10-Q	[2016-05-04]
10-K	[2016-02-04]
10-Q	[2015-10-28]
10-Q	[2015-08-05]
10-Q	[2015-05-05]
10-K	[2015-02-05]
10-Q	[2014-11-04]
10-Q	[2014-08-07]
10-Q	[2014-05-08]
10-K	[2014-02-14]
10-Q	[2013-11-05]
10-Q	[2013-08-07]