Intercontinental Exchange, Inc. [ICE] Filings

10-Q 1 ice-20220930.htm 10-Q ice-20220930

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, 2022


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 November 1, 2022, the number of shares of the registrant’s Common Stock outstanding was 558,551,625 shares.

INTERCONTINENTAL EXCHANGE, INC.

Form 10-Q

Quarterly Period Ended September 30, 2022

TABLE OF CONTENTS




PART I.	Financial Statements
Item 1.	Consolidated Financial Statements (Unaudited):
	Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	2
	Consolidated Statements of Income for the nine and three months ended September 30, 2022 and 2021	4
	Consolidated Statements of Comprehensive Income for the nine and three months ended September 30, 2022 and 2021	5
	Consolidated Statements of Changes in Equity and Redeemable Non-Controlling Interest for the nine and three months ended September 30, 2022 and 2021	6
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	67
Item 4.	Controls and Procedures	70

PART II.	Other Information
Item 1.	Legal Proceedings	70
Item 1A.	Risk Factors	70
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 3.	Defaults Upon Senior Securities	73
Item 4.	Mine Safety Disclosures	73
Item 5.	Other Information	73
Item 6.	Exhibits	74
SIGNATURES		75

PART I. Financial Statements

Item 1. Consolidated Financial Statements

Intercontinental Exchange, Inc. and Subsidiaries

Consolidated Balance Sheets

(In millions, except per share amounts)


	As of		As of December 31, 2021
	September 30, 2022
	(Unaudited)
Assets:
Current assets:
Cash and cash equivalents	$	1,183	$	607
Short-term restricted cash and cash equivalents	6,032		1,035
Cash and cash equivalent margin deposits and guaranty funds	156,789		145,936
Invested deposits, delivery contracts receivable and unsettled variation margin	7,902		4,493
Customer accounts receivable, net of allowance for doubtful accounts of $25 and $24 at September 30, 2022 and December 31, 2021, respectively	1,248		1,208
Prepaid expenses and other current assets	558		1,021
Total current assets	173,712		154,300
Property and equipment, net	1,720		1,699
Other non-current assets:
Goodwill	21,075		21,123
Other intangible assets, net	13,210		13,736
Long-term restricted cash and cash equivalents	405		398
Other non-current assets	1,170		2,246
Total other non-current assets	35,860		37,503
Total assets	$	211,292	$	193,502

Liabilities and Equity:
Current liabilities:
Accounts payable and accrued liabilities	$	788	$	703
Section 31 fees payable	58		57
Accrued salaries and benefits	274		354
Deferred revenue	315		194
Short-term debt	7		1,521
Margin deposits and guaranty funds	156,789		145,936
Invested deposits, delivery contracts payable and unsettled variation margin	7,902		4,493
Other current liabilities	188		153
Total current liabilities	166,321		153,411
Non-current liabilities:
Non-current deferred tax liability, net	3,565		4,100
Long-term debt	18,113		12,397
Accrued employee benefits	189		200
Non-current operating lease liability	267		252
Other non-current liabilities	417		394
Total non-current liabilities	22,551		17,343
Total liabilities	188,872		170,754
Commitments and contingencies


Equity:
Intercontinental Exchange, Inc. stockholders’ equity:
Preferred stock, $0.01 par value; 100 shares authorized; none issued or outstanding	—		—
Common stock, $0.01 par value; 1,500 shares authorized; 634 and 631 issued at September 30, 2022 and December 31, 2021, respectively, and 559 and 561 shares outstanding at September 30, 2022 and December 31, 2021, respectively	6		6
Treasury stock, at cost; 75 and 70 shares at September 30, 2022 and December 31, 2021, respectively	(6,224)		(5,520)
Additional paid-in capital	14,269		14,069
Retained earnings	14,731		14,350
Accumulated other comprehensive loss	(403)		(196)
Total Intercontinental Exchange, Inc. stockholders’ equity	22,379		22,709
Non-controlling interest in consolidated subsidiaries	41		39
Total equity	22,420		22,748
Total liabilities and equity	$	211,292	$	193,502

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,
	2022		2021		2022		2021
Revenues:
Exchanges	$	4,824	$	4,376	$	1,577	$	1,434
Fixed income and data services	1,555		1,403		534		477
Mortgage technology	880		1,061		276		366
Total revenues	7,259		6,840		2,387		2,277
Transaction-based expenses:
Section 31 fees	332		204		158		38
Cash liquidity payments, routing and clearing	1,403		1,330		418		437
Total revenues, less transaction-based expenses	5,524		5,306		1,811		1,802
Operating expenses:
Compensation and benefits	1,058		1,093		344		374
Professional services	101		124		32		43
Acquisition-related transaction and integration costs	81		42		19		14
Technology and communication	513		495		169		168
Rent and occupancy	63		61		22		20
Selling, general and administrative	166		163		54		52
Depreciation and amortization	768		759		258		253
Total operating expenses	2,750		2,737		898		924
Operating income	2,774		2,569		913		878
Other income/(expense):
Interest income	42		—		33		—
Interest expense	(440)		(321)		(176)		(108)
Other income/(expense), net	(1,132)		1,341		(1,097)		54
Other income/(expense), net	(1,530)		1,020		(1,240)		(54)
Income/(loss) before income tax expense/(benefit)	1,244		3,589		(327)		824
Income tax expense/(benefit)	186		1,049		(152)		187
Net income/(loss)	$	1,058	$	2,540	$	(175)	$	637
Net income attributable to non-controlling interest	(37)		(9)		(16)		(4)
Net income/(loss) attributable to Intercontinental Exchange, Inc.	$	1,021	$	2,531	$	(191)	$	633
Earnings/(loss) per share attributable to Intercontinental Exchange, Inc. common stockholders:
Basic	$	1.83	$	4.50	$	(0.34)	$	1.12
Diluted	$	1.82	$	4.48	$	(0.34)	$	1.12
Weighted average common shares outstanding:
Basic	559		563		558		563
Diluted	561		565		560		566

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,
	2022		2021		2022		2021
Net income/(loss)	$	1,058	$	2,540	$	(175)	$	637
Other comprehensive income/(loss):
Foreign currency translation adjustments, net of tax benefit of $1 for the nine months ended September 30, 2022 and $1 for both the nine and three months ended September 30, 2021	(207)		(15)		(98)		(32)
Change in equity method investment, net of tax expense of $1 for the nine months ended September 30, 2021	—		1		—		—


Other comprehensive loss	(207)		(14)		(98)		(32)
Comprehensive income/(loss)	$	851	$	2,526	$	(273)	$	605
Comprehensive income attributable to non-controlling interest	(37)		(9)		(16)		(4)
Comprehensive income/(loss) attributable to Intercontinental Exchange, Inc.	$	814	$	2,517	$	(289)	$	601

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
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)
	Shares	Value		Shares	Value
Balance, as of December 31, 2021	631	$	6	(70)	$	(5,520)	$	14,069	$	14,350	$	(196)	$	39	$	22,748
Other comprehensive loss	—	—		—	—		—		—		(207)		—		(207)

Exercise of common stock options	—	—		—	—		22		—		—		—		22

Repurchases of common stock	—	—		(4)	(632)		—		—		—		—		(632)
Payments relating to treasury shares	—	—		(1)	(72)		—		—		—		—		(72)
Stock-based compensation	—	—		—	—		129		—		—		—		129
Issuance under the employee stock purchase plan	1	—		—	—		49		—		—		—		49

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

Distributions of profits	—	—		—	—		—		—		—		(35)		(35)
Dividends paid to stockholders	—	—		—	—		—		(640)		—		—		(640)


Net income/(loss) attributable to non-controlling interest	—	—		—	—		—		(37)		—		37		—
Net income	—	—		—	—		—		1,058		—		—		1,058
Balance, as of September 30, 2022	634	$	6	(75)	$	(6,224)	$	14,269	$	14,731	$	(403)	$	41	$	22,420


	Intercontinental Exchange, Inc. Stockholders’ Equity												Non- Controlling Interest in Consolidated Subsidiaries		Total Equity
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)
	Shares	Value		Shares	Value
Balance, as of June 30, 2022	633	$	6	(75)	$	(6,223)	$	14,201	$	15,135	$	(305)	$	47	$	22,861
Other comprehensive loss	—	—		—	—		—		—		(98)		—		(98)

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


Payments relating to treasury shares	—	—		—	(1)		—		—		—		—		(1)
Stock-based compensation	—	—		—	—		41		—		—		—		41
Issuance under the employee stock purchase plan	1	—		—	—		25		—		—		—		25



Distributions of profits	—	—		—	—		—		—		—		(22)		(22)
Dividends paid to stockholders	—	—		—	—		—		(213)		—		—		(213)


Net income/(loss) attributable to non-controlling interest	—	—		—	—		—		(16)		—		16		—
Net loss	—	—		—	—		—		(175)		—		—		(175)
Balance, as of September 30, 2022	634	$	6	(75)	$	(6,224)	$	14,269	$	14,731	$	(403)	$	41	$	22,420

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, 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	—	—		—	—		—

Intercontinental Exchange, Inc. [ICE] Filings
10-Q	[2022-11-03]
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-K	[2022-02-03]
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]