October 10, 2024

Housing Finance Development

It's Your Housing Finance Development

INTERCONTINENTAL EXCHANGE, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

In this Quarterly Report on Form 10-Q, or Quarterly Report, and 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. 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, domestic and international economic and
social conditions, inflation, political uncertainty and discord, geopolitical
events or conflicts, international trade policies and sanctions laws;
•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 and 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 impact of climate change and the transition to renewable energy and a net
zero economy;
•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 realize the expected benefits of our acquisitions and our
investments, including our ability to close the Black Knight acquisition on the
terms and timing expected;
•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;
•the impacts of the COVID-19 pandemic on our business, results of operations and
financial condition as well as the broader business environment;
•our ability to identify trends and adjust our business to benefit from such
trends, including trends in the U.S. mortgage industry such as inflation rates,
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, develop 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; and
•potential adverse results of threatened or pending litigation and regulatory
actions and proceedings.

These risks and other factors include, among others, those set forth in Part 1,
Item 1(A) under the caption "Risk Factors" in our 2021 Form 10-K, as filed with
the SEC on February 3, 2022. 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. Our products, which span major asset
classes including futures, equities, fixed income and residential mortgages in
the U.S., provide our customers with access to mission critical tools that are
designed to increase asset class transparency and workflow efficiency. While we
report our results in three reportable business segments, we operate as one
business, leveraging the collective expertise, particularly in data services and
technology, that exists across our platforms to inform and enhance our
operations.

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

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

•In our Mortgage Technology segment, we provide an end-to-end technology
platform that offers customers comprehensive, digital workflow tools that aim to
address the inefficiencies that exist in the U.S. residential mortgage market,
from application through closing and the secondary market.

Recent Developments

Pending Acquisition of Black Knight, Inc.


On May 4, 2022, we announced that we had entered into a definitive agreement to
acquire Black Knight, Inc., or Black Knight, a software, data and analytics
company that serves the housing finance continuum, including real estate data,
mortgage lending and servicing, as well as the secondary markets. Pursuant to
the merger agreement, Sub will merge with and into Black Knight, with Black
Knight surviving as a wholly owned subsidiary of ICE. As of May 4, 2022, the
transaction was valued at approximately $13.1 billion, or $85 per share of Black
Knight common stock, with cash comprising 80% of the value of the aggregate
transaction consideration and shares of our common stock comprising 20% of the
value of the aggregate transaction consideration at that time. The aggregate
cash component of the transaction
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consideration is fixed at $10.5 billion, and the value of the aggregate stock
component of the transaction consideration will fluctuate with the market price
of our common stock and will be determined based on the average of the volume
weighted averages of the trading prices of our common stock on each of the ten
consecutive trading days ending three trading days prior to the closing of the
merger. This transaction builds on our position as a provider of end-to-end
electronic workflow solutions for the rapidly evolving U.S. residential mortgage
industry.

Black Knight provides a comprehensive and integrated ecosystem of software, data
and analytics solutions serving the real estate and housing finance markets. We
believe the Black Knight ecosystem adds value for clients of all sizes across
the mortgage and real estate lifecycles by helping organizations lower costs,
increase efficiencies, grow their businesses, and reduce risk.

On August 19, 2022, our preliminary proxy statement/prospectus on Form S-4 was
declared effective by the SEC, and on September 21, 2022, Black Knight
stockholders approved the transaction. The transaction is expected to close in
the first half of 2023 following the receipt of regulatory approvals and the
satisfaction of customary closing conditions.

Global Market Conditions


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

Our business has been impacted positively and negatively by these global
economic conditions. For instance, due to market volatility and rising interest
rates, we have seen increased trading across a number of our products, such as
interest rate & equity futures, credit default swaps and bonds. Conversely,
increases in mortgage interest rates in 2022 have resulted in reduced consumer
and investor demand for mortgages and adversely impacted the transaction-based
revenues in our Mortgage Technology segment.

We have suspended all services in Russia except for limited offerings to
non-sanctioned entities. From an operational perspective, our businesses,
including our exchanges, clearing houses, listings venues, data services
businesses and mortgage platforms, have not suffered a material negative impact
as a result of these events in Ukraine and the surrounding region.


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

Tax Policy Changes


In July and August 2022, the CHIPS and Science Act, or CHIPS, and the Inflation
Reduction Act of 2022, or IRA, were signed into law. The IRA introduced a 15%
corporate alternative minimum tax, or CAMT, on adjusted financial statement
income for corporations with profits in excess of $1 billion, effective for tax
years after December 31, 2022. While further guidance on the implementation of
the CAMT is expected, we do not expect it will have a material impact to our
2023 effective tax rate. We also do not expect that CHIPS will have a material
impact. The IRA also includes a stock buyback excise tax of 1%, which will apply
to net stock buybacks after December 31, 2022. We do not expect this to have a
material impact once share repurchases are resumed.

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 Abu Dhabi. 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)
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"Risk Factors" included in our 2021 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:

•Regulatory Structure Applicable to Non-EU Clearing Houses. On January 1, 2020,
the European Markets Infrastructure Regulation, or EMIR 2.2, became effective,
which revises the EU's current regulatory and supervisory structure for EU and
non-EU clearing houses. The European Securities and Markets Authority, or ESMA,
has recognized ICE Clear Europe as a third-country central counterparty, or CCP,
under EMIR and determined that it is a Tier 2 CCP on the basis that it is
systemically important to the financial stability of the EU or one or more of
its Member States. ESMA has recognized all other ICE clearing houses as
third-country CCPs and determined that they are Tier 1 CCPs on the basis that
they are not systemically-important to the financial stability of the EU or one
or more of its Member States. ESMA's continuing implementation of these
delegated regulations could still impact one or more of our other non-EU
clearing houses. In February 2022, the European Commission extended the
temporary equivalence for U.K. CCPs until June 2025. In March 2022, ESMA
extended the ICE Clear Europe recognition decision and tiering determination
until June 2025 and confirmed the recognition and tiering determination of all
other ICE clearing houses.

•Benchmarks Regulation. The Financial Conduct Authority, or FCA, used its legal
powers under the U.K. Benchmarks Regulation, or U.K. BMR, to require ICE
Benchmark Administration Limited, or IBA, as the administrator of the London
Interbank Offered Rate, or LIBOR, to publish certain Sterling and Japanese Yen
LIBOR settings under a changed "synthetic" methodology until the end of 2022. As
a result of the FCA's June 2022 consultation, the FCA will require IBA to
continue publishing 1 and 6-month "synthetic" Sterling LIBOR and is considering
whether to require IBA to publish 3-month "synthetic" Sterling LIBOR until the
end of March 2023. "Synthetic" Japanese Yen LIBOR settings will cease at the end
of 2022. Any settings published under the "synthetic" methodology are not
representative of the underlying market or economic reality the setting is
intended to measure as those terms are used in the U.K. BMR. The FCA has
confirmed that it expects certain U.S. Dollar LIBOR settings to continue being
published on a representative basis until the end of June 2023. The FCA stated
that it will consider requiring IBA to publish certain U.S. Dollar LIBOR
settings beyond June 30, 2023 under a changed "synthetic" methodology. Usage of
the "synthetic" LIBOR and continuing U.S. Dollar LIBOR settings may be
restricted or prohibited in certain circumstances under applicable law.

The European Commission used its powers under the EU Benchmarks Regulation, or
EU BMR, to designate replacement benchmarks for certain Swiss franc LIBOR
settings and the Euro Overnight Index Average, or EONIA, which cover all
references to the relevant benchmark. The transition period for the use of
benchmarks provided by third-country administrators has been extended until at
least December 31, 2023. In May 2022, the European Commission published a
consultation on the third-country regime of the EU BMR to prepare for the
development of a legislative proposal.

In March 2022, President Biden signed into law federal LIBOR legislation,
referred to as the LIBOR Act, designed to reduce uncertainty and economic
impacts of the permanent cessation of LIBOR for specified contracts, securities
and other agreements that are economically linked to LIBOR. The LIBOR Act
provides a statutory framework to replace U.S. Dollar LIBOR with a benchmark
rate based on the SOFR for contracts governed by U.S. law that have no fallbacks
or fallbacks that would require the use of a poll or LIBOR-based rate.

•Policy intervention to address high energy prices. In March 2022, EU leaders
agreed to reduce the EU's dependency on Russian gas, oil and coal imports and
invited the European Commission to put forward legislative proposals to ensure
security of supply and affordable energy prices. Various options for regulatory
intervention have been adopted by the European Commission to allow EU countries
to jointly buy strategic reserves of gas. In June 2022, the EU imposed a partial
embargo on Russian crude oil and petroleum products. In July 2022, EU Member
States reached a political agreement on a voluntary reduction of natural gas
demand in the EU. In September 2022, the European Commission approved
legislative proposals to address the energy crisis including reducing Member
States' energy consumption, imposing a cap on revenues for electricity producers
and requiring a contribution on excess profits generated from oil, gas, coal and
refinery activities. The European Commission is also exploring additional
measures including a price cap on imported gas and an LNG import benchmark. The
potential impact of these measures on the functioning of European energy
wholesale markets remains uncertain at this time.

•CCP Resolution. In March 2022, the U.K. Treasury published a feedback statement
and status update on its plans to enhance the U.K.'s regime for resolution of
CCPs in the event that they fail. This is intended to expand the prior regime
which was not in line with U.K. Financial Stability Board guidance issued
subsequently. Many of the parameters of the new regime have yet to be finalized
and will be subject to a consultation process by the Bank of

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England which will be the resolution authority for CCPs in the U.K. However,
they will include increased CCP contributions (known as “second skin in the
game”) to the default fund.











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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 and YTD represents the nine-month periods ended September 30th).

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(1) The adjusted figures exclude items that are not reflective of our ongoing
core operations and business performance. Adjusted net income attributable to
ICE is 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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                                            Nine Months Ended September 30,                                Three Months Ended September 30,
                                                 2022                  2021             Change                  2022                  2021             Change
Revenues, less transaction-based
expenses                                 $        5,524             $ 5,306               4 %           $        1,811             $ 1,802               1 %
   Recurring revenues(1)                 $        2,781             $ 2,603               7 %           $          930             $   888               5 %
   Transaction revenues, net(1)          $        2,743             $ 2,703               1 %           $          881             $   914              (4) %
Operating expenses                       $        2,750             $ 2,737               - %           $          898             $   924              (3) %
Adjusted operating expenses(2)           $        2,213             $ 2,228              (1) %          $          727             $   755              (4) %
Operating income                         $        2,774             $ 2,569               8 %           $          913             $   878               4 %
Adjusted operating income(2)             $        3,311             $ 3,078               8%            $        1,084             $ 1,047               4%
Operating margin                                     50     %            48   %          2 pts                      50     %            49   %          1 pt
Adjusted operating margin(2)                         60     %            58   %          2 pts                      60     %            58   %          2 pts
Other income/(expense), net              $       (1,530)            $ 1,020               n/a           $       (1,240)            $   (54)             

n/a

Income tax expense/(benefit)             $          186             $ 1,049             (82) %          $         (152)            $   187             (182) %
Effective tax rate                                   15     %            29   %        (14 pts)                     47     %            23   %         24 pts
Net income/(loss) attributable to ICE    $        1,021             $ 2,531             (60) %          $         (191)            $   633             (130) %
Adjusted net income attributable to
ICE(2)                                   $        2,276             $ 2,102               8 %           $          733             $   711               3 %
Diluted earnings/(loss) per share
attributable to ICE common stockholders  $         1.82             $  4.48             (59) %          $        (0.34)            $  1.12             (130) %
Adjusted diluted earnings per share
attributable to ICE common
stockholders(2)                          $         4.06             $  3.72               9 %           $         1.31             $  1.26               4 %
Cash flows from operating activities     $        2,462             $ 2,130              16 %



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

(1) We define recurring revenues as the portion of our revenues that are
generally predictable, stable, and can be expected to occur at regular intervals
in the future with a relatively high degree of certainty and visibility. We
define transaction revenues as those associated with a more specific
point-in-time service, such as a trade execution.


(2) The adjusted figures exclude items that are not reflective of our ongoing
core operations and business performance. Adjusted net income attributable to
ICE and adjusted diluted earnings per share attributable to ICE common
stockholders are presented net of taxes. These adjusted numbers are not
calculated in accordance with U.S. GAAP. See "- Non-GAAP Financial Measures"
below.

•Revenues, less transaction-based expenses, increased $218 million and $9
million for the nine and three months ended September 30, 2022, respectively,
from the comparable periods in 2021. 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
nine and three months ended September 30, 2022 includes $86 million and $42
million, respectively, in unfavorable foreign exchange effects arising from
fluctuations in the U.S. dollar from the comparable periods in 2021. 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 $13 million and decreased $26 million for the nine
and three months ended September 30, 2022, respectively, from the comparable
periods in 2021. See "-Consolidated Operating Expenses" below for a discussion
of the significant changes in our operating expenses. The increase in operating
expenses during the nine months ended September 30, 2022 and the decrease during
the three months ended September 30, 2022 includes $27 million and $13 million,
respectively, in favorable foreign exchange effects arising from fluctuations in
the U.S. dollar from the comparable periods in 2021. 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;

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•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 2021 Form 10-K, and
Part II, Item 1(A) “Risk Factors” below.

Segment Results

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


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

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

•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,
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 segments do not engage in intersegment transactions.
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Exchanges Segment

The following presents selected statements of income data for our Exchanges
segment (dollars in millions and YTD represents the nine-month periods ended
September 30th):


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(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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                                         Nine Months Ended September                                   Three Months Ended September
                                                     30,                                                            30,
                                            2022              2021                    Change               2022              2021                Change
Revenues:
Energy futures and options              $     884          $   900                         (2) %       $     266          $   316                    (16) %
Agricultural and metals futures and
options                                       179              177                          1                 57               56                      1
Financial futures and options                 375              281                         33                122               93                     30
Futures and options                         1,438            1,358                          6                445              465                     (5)
Cash equities and equity options            2,021            1,800                         12                664              554                     20
OTC and other                                 326              239                         37                121               84                     45
Transaction and clearing, net               3,785            3,397                         11              1,230            1,103                     

11

Data and connectivity services                651              623                          4                219              208                      6
Listings                                      388              356                          9                128              123                      3
Revenues                                    4,824            4,376                         10              1,577            1,434                     10
Transaction-based expenses(1)               1,735            1,534                         13                576              475                     

21

Revenues, less transaction-based
expenses                                    3,089            2,842                          9              1,001              959                      4
Other operating expenses                      725              778                         (7)               241              265                     (9)
Depreciation and amortization                 178              186                         (4)                60               62                     (2)
Acquisition-related transaction and
integration costs                               1               13                        (92)                 -                3                   (103)
Operating expenses                            904              977                         (7)               301              330                     (9)
Operating income                        $   2,185          $ 1,865                         17  %       $     700          $   629                     11  %

Recurring revenues                      $   1,039          $   979                          6  %       $     347          $   331                      5  %
Transaction revenues, net               $   2,050          $ 1,863                         10  %       $     654          $   628                      4  %

(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, related data and connectivity services, and our
listings business. 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.

Transaction and clearing revenues are generally assessed on a per-contract basis
and revenues and profitability fluctuate with changes in contract volume and
product mix. We consider data and connectivity services revenues and listings
revenues to be recurring revenues. Our data and connectivity services revenues
are recurring subscription fees related to the various data and connectivity
services that we provide which are directly attributable to our exchange venues.
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 the nine months ended September 30, 2022 and 2021, 19% and 16%,
respectively, of our Exchanges segment revenues, less transaction-based
expenses, were billed in pounds sterling or euros. For the three months ended
September 30, 2022 and 2021, 19% and 18%, respectively, 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 lower by $66 million and $33 million for the nine and three months ended
September 30, 2022, from the comparable periods in 2021.

Our exchange transaction and clearing revenues are presented net of rebates. We
recorded rebates of $665 million and $790 million for the nine months ended
September 30, 2022 and 2021, respectively, and $201 million and $264 million for
the three months ended September 30, 2022 and 2021, respectively. We offer
rebates in certain of our markets primarily to support market liquidity and
trading volume by providing qualified participants in those markets a discount
to the applicable commission rate. Such rebates are calculated based on volumes
traded. The decrease in rebates for the
                                       41
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nine and three months ended September 30, 2022 is primarily due to lower volumes
as compared to the prior year and the migration of Sterling futures rebates into
the Sterling Overnight Index Average, or SONIA, and a change in the pricing and
structure of SONIA products.

•Energy Futures and Options: Total energy volume decreased 1% and revenues
decreased 2% for the nine months ended September 30, 2022 from the comparable
period in 2021 and volume decreased 13% and revenues decreased 16% for the three
months ended September 30, 2022 from the comparable period in 2021.

-Total oil futures and options volume decreased 10% and 18% for the nine and
three months ended September 30, 2022, respectively, from the comparable periods
in 2021, driven, in part, by lower Gasoil volumes which are impacted by the
uncertainty around Russian sanctions and the conflict in Ukraine.

-Our global natural gas futures and options volume increased 18% for the nine
months ended September 30, 2022 and decreased 4% for the three months ended
September 30, 2022, from the comparable periods in 2021, as the first half of
2022 benefited from elevated price volatility related to geopolitical events,
including the conflict in Ukraine. In the third quarter of 2022, increased
volumes in our North American gas complex were offset by muted activity in our
Dutch TTF natural gas complex.

-Our environmentals and other futures and options volume decreased 6% and 20%
for the nine and three months ended September 30, 2022, respectively, from the
comparable periods in 2021, due in part to lower power and environmental options
volumes.

•Agricultural and Metals Futures and Options: Total volumes in our agricultural
and metals futures and options markets increased 1% and 4% for the nine and
three months ended September 30, 2022, respectively, from the comparable periods
in 2021 and revenues increased 1% for both the nine and three months ended
September 30, 2022, from the comparable periods in 2021. The third quarter of
2022 benefited from elevated price volatility and price inflation driving an
increased need to manage risk across our commodity markets.

-Sugar futures and options volumes were flat for the nine months ended
September 30, 2022 and increased 4% for the three months ended September 30,
2022
, from the comparable periods in 2021.

-Other agricultural and metal futures and options volume increased 2% and 3% for
the nine and three months ended September 30, 2022, respectively, from the
comparable periods in 2021.


•Financial Futures and Options: Total volumes in our financial futures and
options markets increased 5% and 15% for the nine and three months ended
September 30, 2022, respectively, from the comparable periods in 2021 and
revenues increased 33% and 30% for the nine and three months ended September 30,
2022, respectively, from the comparable periods in 2021. The nine months ended
September 30, 2022 benefited from elevated volatility across global markets
driven by geopolitical events, central bank activity and inflationary concerns.

-Interest rate futures and options volume increased 3% and 15% for the nine and
three months ended September 30, 2022, respectively, from the comparable periods
in 2021, and revenue increased 44% and 37% for the nine and three months ended
September 30, 2022, respectively, from the comparable periods in 2021. Adjusting
for the transition of the LIBOR-based Sterling contract to the alternative
rate-based SONIA contract, which is half the notional size of the Sterling
contract, interest rate volumes increased 27% and 40% for the nine and three
months ended September 30, 2022, respectively from the comparable periods in
2021 driven by interest rate volatility and increased speculation of central
bank activity due to inflation concerns. Interest rate futures and options
revenues were $235 million and $163 million for the nine months ended
September 30, 2022 and 2021, respectively, and $77 million and $55 million for
the three months ended September 30, 2022 and 2021, respectively.

-Other financial futures and options volume, which includes our MSCI®, FTSE® and
NYSE FANG+ equity index products, increased 16% for both the nine and three
months ended September 30, 2022 from the comparable periods in 2021. Financial
futures and options revenue increased 19% and 20% for the nine and three months
ended September 30, 2022, respectively, from the comparable periods in 2021. The
nine months ended September 30, 2022 benefited from elevated volatility across
global markets driven by geopolitical events, central bank activity and
inflationary concerns. Other financial futures and options revenues were
$140 million and $118 million for the nine months ended September 30, 2022 and
2021, respectively and $45 million and $38 million for the three months ended
September 30, 2022 and 2021, respectively.
                                       42
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•Cash Equities and Equity Options: Cash equities volume increased 3% and 7% for
the nine and three months ended September 30, 2022, respectively, from the
comparable periods in 2021 due to higher total market volumes driven by elevated
volatility related to inflationary, recessionary and geopolitical concerns. Cash
equities revenues, net of transaction-based expenses, were $211 million and
$184 million for the nine months ended September 30, 2022 and 2021,
respectively, and $64 million and $54 million for the three months ended
September 30, 2022 and 2021, respectively. Equity options volume increased 10%
for the nine months ended September 30, 2022, and decreased 1% for the three
months ended September 30, 2022, from the comparable periods in 2021. The
overall increase in equity options volume for the nine months ended
September 30, 2022 was driven by increased market share. The overall decrease in
equity options volume for the three months ended September 30, 2022 was
primarily due to the Arca Options Pillar migration. Equity options revenues, net
of transaction-based expenses, were $75 million and $82 million for the nine
months ended September 30, 2022 and 2021, respectively, and $24 million and
$25 million for the three months ended September 30, 2022 and 2021,
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 37% and 45% for the nine and three months ended September 30, 2022,
respectively, from the comparable periods in 2021 primarily due to an increase
in interest income on clearing margin deposits. Following the October 2021 Bakkt
transaction, Bakkt revenues are no longer included within our OTC and other
revenues.

•Data and Connectivity Services: Our data and connectivity services revenues
increased 4% and 6% for the nine and three months ended September 30, 2022,
respectively, from the comparable periods in 2021. The increase in revenue was
driven by the strong retention rate of existing customers, the addition of new
customers and increased purchases by existing customers.

•Listings Revenues: Through NYSE, NYSE American and NYSE Arca, we generate
listings revenue related to the provision of listings services for public
companies and ETFs, and related corporate actions for listed companies. Listings
revenues increased 9% and 3% for the nine and three months ended September 30,
2022, respectively, from the comparable periods in 2021, driven by the full
impact of strong equity capital markets activity in 2021. All listings fees are
billed upfront and revenues are recognized over time as the identified
performance obligations are satisfied.
                                       43
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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 and YTD represents the nine-month
periods ended September 30th):

Volume and Rate per Contract

[[Image Removed: ice-20220930_g13.jpg]][[Image Removed: ice-20220930_g14.jpg]][[Image Removed: ice-20220930_g15.jpg]]

                                     Nine Months Ended September                                Three Months Ended
                                                 30,                                               September 30,
                                        2022             2021              Change              2022             2021             Change
Number of contracts traded (in
millions):
Energy futures and options                572             581                   (1) %            173             200                (13) %
Agricultural and metals futures and
options                                    77              76                    1                25              24                  4
Financial futures and options             504             477                    5               176             152                 15
Total                                   1,153           1,134                    2  %            374             376                 (1) %

                                     Nine Months Ended September                                Three Months Ended
                                                 30,                                               September 30,
                                        2022             2021              Change              2022             2021             Change
Average daily volume of contracts
traded
(in thousands):
Energy futures and options              3,046           3,089                   (1) %          2,706           3,126                (13) %
Agricultural and metals futures and
options                                   408             404                    1               393             379                  4
Financial futures and options           2,622           2,495                    5             2,668           2,320                 15
Total                                   6,076           5,988                    1  %          5,767           5,825                 (1) %

                                     Nine Months Ended September                                Three Months Ended
                                                 30,                                               September 30,
                                        2022             2021              Change              2022             2021             Change
Rate per contract:
Energy futures and options           $   1.54          $ 1.55                   (1) %       $   1.54          $ 1.58                 (3) %
Agricultural and metals futures and
options                              $   2.33          $ 2.33                    -  %       $   2.26          $ 2.33                 (3) %
Financial futures and options        $   0.74          $ 0.58                   27  %       $   0.69          $ 0.61                 13  %




                                       44
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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

[[Image Removed: ice-20220930_g16.jpg]][[Image Removed: ice-20220930_g17.jpg]][[Image Removed: ice-20220930_g18.jpg]]

                                                                        As 

of September 30,

                                                                2022                          2021                  Change
Open interest - in thousands of contracts:
Energy futures and options                                      42,853                          44,625                    (4) %
Agricultural and metals futures and options                      3,948                           4,056                    (3)
Financial futures and options                                   26,636                          32,318                   (18)
Total                                                           73,437                          80,999                    (9) %


The following charts and tables 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 and YTD represents the nine-month periods ended
September 30th:
                                       45
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[[Image Removed: ice-20220930_g19.jpg]][[Image Removed: ice-20220930_g20.jpg]][[Image Removed: ice-20220930_g21.jpg]][[Image Removed: ice-20220930_g22.jpg]]

                                         Nine Months Ended September 30,                                    Three Months Ended September 30,
                                            2022                  2021                  Change                 2022                  2021                 Change
NYSE cash equities (shares in
millions):
Total cash handled volume                     2,453                 2,375                      3  %              2,158                 2,022                     7  %
 Total cash market share matched               19.9  %               20.0  %              (0.1 pts)               19.4  %               20.3  %        

(0.9 pts)


NYSE equity options (contracts in
thousands):
NYSE equity options volume                    7,631                 6,967                     10  %              7,037                 7,078                    (1) %
Total equity options volume                  37,888                36,684                      3  %             36,994                35,546                     4  %
 NYSE share of total equity options            20.1  %               19.0  %                1.1 pts               19.0  %               19.9  %        

(0.9 pts)


Revenue capture or rate per contract:
Cash equities rate per contract (per
100 shares)                                     $0.046                $0.041                  11  %                $0.046                $0.042                 11  %
Equity options rate per contract                 $0.05                 $0.06                 (16) %                 $0.05                 $0.05                  1  %


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 $332 million and $204 million for the nine
months
                                       46
--------------------------------------------------------------------------------

ended September 30, 2022 and 2021, respectively, and $158 million and $38
million for the three months ended September 30, 2022 and 2021, respectively.
The increase in Section 31 fees was primarily due to an increase in rates. The
fees we collect are included in cash at the time of receipt and we remit the
amounts to the SEC semi-annually as required. The total amount is included in
current liabilities and was $58 million as of September 30, 2022.

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 $1.4 billion and $1.3 billion for the nine months
ended September 30, 2022 and 2021, respectively, and $418 million and $437
million for the three months ended September 30, 2022 and 2021, 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:                      Nine Months Ended September 30,                                Three Months Ended September 30,
                                            2022                  2021              Change                   2022                  2021             Change
Operating expenses                   $         904             $   977                   (7) %       $         301              $  330                   (9) %
Adjusted operating expenses(1)       $         854             $   909                   (6) %       $         284              $  309                   (8) %
Operating income                     $       2,185             $ 1,865                   17  %       $         700              $  629                   11  %
Adjusted operating income(1)         $       2,235             $ 1,933                   16  %       $         717              $  650                   10  %
Operating margin                                71     %            66   %               5 pts                  70      %           66   %               4 pts
Adjusted operating margin(1)                    72     %            68   %               4 pts                  72      %           68   %               4 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.
                                       47
--------------------------------------------------------------------------------

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 and YTD
represents the nine-month periods ended September 30th):

                    [[Image Removed: ice-20220930_g23.jpg]]

[[Image Removed: ice-20220930_g24.jpg]][[Image Removed: ice-20220930_g25.jpg]][[Image Removed: ice-20220930_g26.jpg]][[Image Removed: ice-20220930_g27.jpg]]





(1) The adjusted figures in the charts above are calculated by excluding items
that are not reflective of our cash operations and core business performance. As
a result, these adjusted numbers are not calculated in accordance with U.S.
GAAP. See "- Non-GAAP Financial Measures" below.
                                       48
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                                              Nine Months Ended September                             Three Months Ended September
                                                          30,                                                      30,
                                                 2022              2021               Change              2022              2021               Change
Revenues:
Fixed income execution                       $      66          $    39                   69  %       $       26          $   12                  121  %
CDS clearing                                       226              144                   57                  88              51                   72
Fixed income data and analytics                    824              804                    2                 273             272                    -
Fixed income and credit                          1,116              987                   13                 387             335                   15
Other data and network services                    439              416                    6                 147             142                    4
Revenues                                         1,555            1,403                   11                 534             477                   12
Other operating expenses                           766              752                    2                 250             252                   (1)

Depreciation and amortization                      262              257                    2                  86              85                    1
Acquisition-related transaction and
integration costs                                    1                1                   45                   1               1                  (43)
Operating expenses                               1,029            1,010                    2                 337             338                    -
Operating income                             $     526          $   393                   34  %       $      197          $  139                   42  %

Recurring revenues                           $   1,263          $ 1,220                    3  %       $      420          $  414                    1  %
Transaction revenues                         $     292          $   183                   59  %       $      114          $   63                   81  %

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


For the nine months ended September 30, 2022 and 2021, 12% and 14%,
respectively, of our Fixed Income and Data Services segment revenues were billed
in pounds sterling or euros and for the three months ended September 30, 2022
and 2021, 10% and 13%, respectively, of our Fixed Income and Data Services
segment revenues were billed in pounds sterling or euros. As the pound sterling
or euro exchange rate changes, the U.S. 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, our Fixed Income and Data
Services revenues were lower by $20 million and $9 million for the nine and
three months ended September 30, 2022, respectively, than the comparable periods
in 2021.

Fixed Income and Data Services Revenues


Our Fixed Income and Data Services revenues increased 11% and 12% for the nine
and three months ended September 30, 2022, respectively, from the comparable
periods in 2021. The increase in revenue was primarily due to strength in our
fixed income execution and CDS clearing businesses due to elevated volatility
across global markets driven by geopolitical events, central bank activity and
inflationary concerns as well as increased market share.

•Fixed Income Execution: Fixed income execution includes revenues from ICE
Bonds. Execution fees are reported net of rebates, which were nominal for both
the nine and three months ended September 30, 2022 and 2021. Our fixed income
execution revenues increased 69% and 121% for the nine and three months ended
September 30, 2022, respectively, from the comparable periods in 2021, due to
elevated volatility across global markets driven by geopolitical events, central
bank activity and inflationary concerns.

•CDS Clearing: CDS clearing revenues increased 57% and 72% for the nine and
three months ended September 30, 2022, respectively, from the comparable periods
in 2021. The notional value of CDS cleared was $19.7 trillion and $12.6 trillion
for the nine months ended September 30, 2022 and 2021, respectively, and
$6.1 trillion and $4.5 trillion for the three months ended September 30, 2022
and 2021, respectively. The increases in the notional value of CDS cleared were
primarily driven by heightened volatility related to geopolitical events and
inflationary concerns.

•Fixed Income Data and Analytics: Our fixed income data and analytics revenues
increased 2% for the nine months ended September 30, 2022 and were flat for the
three months ended September 30, 2022 from the comparable periods in 2021. The
increase in revenue for the nine months ended September 30, 2022 was due to
strength in our index business in the first half of 2022 and continued growth in
our pricing and reference data business driven by the strong retention rate of
existing customers, the addition of new customers and increased purchases by
existing customers. This was partially offset by unfavorable foreign exchange
effects arising from fluctuations in the U.S. dollar from the comparable periods
in 2021.
                                       49
--------------------------------------------------------------------------------

•Other Data and Network Services: Our other data and network services revenues
increased 6% and 4% for the nine and three months ended September 30, 2022,
respectively, from the comparable periods in 2021. 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 an indicative
forward-looking metric, it does not provide a precise growth forecast of the
next 12 months of data services revenues.

As of September 30, 2022, ASV was $1.643 billion, which increased 1.1% compared
to the ASV as of September 30, 2021. 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:                                Nine Months Ended September 30,                               Three Months Ended September 30,
                                            2022                  2021              Change                  2022                  2021                Change
Operating expenses                   $       1,029             $ 1,010                   2  %       $         337              $  338                      -  %
Adjusted operating expenses(1)       $         892             $   874                   2  %       $         293              $  293                      -  %
Operating income                     $         526             $   393                  34  %       $         197              $  139                     42  %
Adjusted operating income(1)         $         663             $   529                  25  %       $         241              $  184                     31  %
Operating margin                                34     %            28   %              6 pts                  37      %           29   %                 8 pts
Adjusted operating margin(1)                    43     %            38   %              5 pts                  45      %           39   %                 6 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.
                                       50
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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 and YTD represents the
nine-month periods ended September 30th):

                    [[Image Removed: ice-20220930_g28.jpg]]

[[Image Removed: ice-20220930_g29.jpg]][[Image Removed: ice-20220930_g30.jpg]]

[[Image Removed: ice-20220930_g31.jpg]][[Image Removed: ice-20220930_g32.jpg]]




(1) The adjusted figures in the charts above are calculated by excluding items
that are not reflective of our cash operations and core business performance. As
a result, these adjusted numbers are not calculated in accordance with U.S.
GAAP. See "- Non-GAAP Financial Measures" below.
                                       51
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                                           Nine Months Ended September                             Three Months Ended September
                                                       30,                                                     30,
                                               2022              2021              Change             2022              2021                Change
Revenues:
Origination technology                            586             740               (21)%               187               245               (24)%
Closing solutions                                 187             227               (17)                 53                88                (39)
Data and analytics                                 66              55                22                  22                19                 22
Other                                              41              39                 2                  14                14                (8)
Revenues                                          880           1,061               (17)                276               366                (25)
Other operating expenses                          410             406                 1                 130               140                (6)
Depreciation and amortization                     328             316                 4                 112               106                 5
Acquisition-related transaction and
integration costs                                  79              28                182                 18                10                 67
Operating expenses                                817             750                 9                 260               256                 2
Operating income                          $        63          $  311               (80)%         $      16          $    110               (86)%

Recurring revenues                        $       479          $  404                19%          $     163          $    143                14%
Transaction revenues                      $       401          $  657               (39)%         $     113          $    223               (49)%


In the table above, we consider subscription fee and certain other revenues to
be recurring revenues. Each revenue classification, above, contains a mix of
recurring and transaction revenues, based on the various service offerings
described in more detail, below.

Mortgage Technology Revenues


Our mortgage technology revenues are derived from our comprehensive, end-to-end
U.S. 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 decreased $181 million
and $90 million for the nine and three months ended September 30, 2022 from the
comparable periods in 2021 due to lower mortgage origination volumes driven by
rising interest rates. See Note 6 of our consolidated financial statements in
this Quarterly Report where discussed further.

•Origination technology: Our origination technology acts as a system of record
for the mortgage transaction, automating the gathering, reviewing, and verifying
of mortgage-related information and enabling automated enforcement of rules and
business practices designed to help ensure that each completed loan transaction
is of high quality and adheres to secondary market standards. These revenues are
based on recurring Software as a Service, or SaaS, subscription fees, with an
additive transaction-based or 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 connect key participants, such as
lenders, title and settlement agents and individual county recorders, to
digitize the closing and recording process. Closing solutions also include
revenues from our Mortgage Electronic Registrations Systems, Inc., or MERS
database, which provides a system of record for recording and tracking changes
and servicing rights and beneficial ownership interests in loans secured by U.S.
residential real estate. Revenues from closing solutions are largely
transaction-based and are based on volume of loan closings.

•Data and Analytics: Revenues include those related to ICE Mortgage Technology's
Automation, Intelligence, Quality, or AIQ, offering which applies machine
learning to the entire loan origination process, offering customers greater
efficiency by streamlining data collection and validation through our automated
document recognition and data extraction capabilities. AIQ revenues can be both
recurring and transaction-based in nature. In addition, our data offerings
include real-time industry and peer benchmarking tools, which provide
originators a granular view into the real-time trends of nearly half the U.S.
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.


                                       52
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•Other: Other revenues include professional services fees, as well as revenues
from ancillary products. Other revenues can be both recurring and
transaction-based in nature.

Operating Expenses, Operating Income and Operating Margin

The following chart summarizes our Mortgage Technology segment’s operating
expenses, operating income and operating margin (dollars in millions). See
“- Consolidated Operating Expenses” below for a discussion of the significant
changes in our operating expenses.

Mortgage Technology Segment:           Nine Months Ended September 30,                                    Three Months Ended September 30,
                                           2022                  2021                 Change*                  2022                  2021                 Change
Operating expenses                  $        817              $   750                   9%             $         260              $   256                   2%
Adjusted operating expenses(1)      $        467              $   445                   5%             $         150              $   153                  (2)%
Operating income                    $         63              $   311                  (80)%           $          16              $   110                 (86)%
Adjusted operating income(1)        $        413              $   616                  (33)%           $         126              $   213                 (41)%
Operating margin                               7      %            29   %            (22 pts)                      6      %            30   %            (24 pts)
Adjusted operating margin(1)                  47      %            58   %            (11 pts)                     46      %            58   %            (12 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”

                                       53
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Consolidated Operating Expenses

The following presents our consolidated operating expenses (dollars in millions
and YTD represents the nine-month periods ended September 30th):


                    [[Image Removed: ice-20220930_g33.jpg]]

                                             Nine Months Ended September                               Three Months Ended September
                                                         30,                                                       30,
                                                2022              2021                Change               2022             2021                Change
Compensation and benefits                   $   1,058          $ 1,093                     (3) %       $     344          $  374                    (8) %
Professional services                             101              124                    (19)                32              43                   (27)
Acquisition-related transaction and
integration costs                                  81               42                     93                 19              14                    38
Technology and communication                      513              495                      4                169             168                     1
Rent and occupancy                                 63               61                      2                 22              20                     5
Selling, general and administrative               166              163                      2                 54              52                     6
Depreciation and amortization                     768              759                      1                258             253                     2
Total operating expenses                    $   2,750          $ 2,737                      -  %       $     898          $  924                    (3) %


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, integration of acquisitions and
other investments.

For both the nine and three months ended September 30, 2022 and 2021, 10% of our
operating expenses were billed in pounds sterling or euros, and for the three
months ended September 30, 2022 and 2021, 9% and 10%, respectively, of
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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 were $27 million and $13 million lower during
the nine and three months ended September 30, 2022, respectively, than in the
comparable periods in 2021. 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).

                                     Nine Months Ended September                                Three Months Ended September
                                                 30,                                                        30,
                                         2022             2021                Change               2022               2021                Change
Employee headcount                       8,935           9,381                     (5) %
Stock-based compensation expenses    $     110          $  112                      -  %       $       37          $    39                     (6) %

Headcount decreased primarily due to a reduction of 608 Bakkt employees
following its deconsolidation, partially offset by 274 additional employees
hired in India.


Compensation and benefits expense decreased $35 million for the nine months
ended September 30, 2022 from the comparable period in 2021, primarily due to
$51 million in expenses related to Bakkt during the nine months ended
September 30, 2021, prior to deconsolidation. This was partially offset by a
$14 million increase for the nine months ended September 30, 2022, from the
comparable period in 2021, related to additional headcount, increased
commissions, merit pay increases, and higher employee insurance costs. The
stock-based compensation expenses in the table above relate to employee stock
option and restricted stock awards and exclude stock-based compensation related
to acquisition-related transaction and integration costs.

Compensation and benefits expense decreased $30 million for the three months
ended September 30, 2022, primarily due to $20 million in expenses related to
Bakkt during the three months ended September 30, 2021, prior to
deconsolidation.

Professional Services Expenses


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

Professional services expenses decreased $23 million and $11 million for the
nine and three months ended September 30, 2022, respectively, from the
comparable periods in 2021, primarily due to $11 million and $6 million in
decreased legal fees for the nine and three months ended September 30, 2022,
respectively, as well as $13 million and $6 million of expenses incurred at
Bakkt during the nine and three months ended September 30, 2021, respectively,
prior to deconsolidation.

Acquisition-Related Transaction and Integration Costs


We incurred $81 million and $19 million in acquisition-related transaction and
integration costs during the nine and three months ended September 30, 2022,
primarily due to legal and consulting expenses related to our pending
acquisition of Black Knight and our integration of Ellie Mae, Inc., or Ellie
Mae. We incurred $42 million and $14 million in acquisition-related transaction
costs for the nine and three months ended September 30, 2021, primarily related
to our integration of Ellie Mae and the Bakkt transaction.

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.
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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 or 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 $18 million for the nine months
ended September 30, 2022 from the comparable period in 2021, primarily due to
$17 million in increased hardware and software support costs, $15 million in
increased hosting costs and $7 million in increased data services costs,
partially offset by an $11 million decrease in license expense and $10 million
in expenses during the nine months ended September 30, 2021 related to Bakkt
prior to deconsolidation.

Technology and communications expenses increased $1 million for the three months
ended September 30, 2022 from the comparable period in 2021, primarily due to
increased hardware and software support costs, hosting costs and data services
costs, partially offset by a decrease in license expense and $3 million in
expenses during the three months ended September 30, 2021 related to Bakkt prior
to deconsolidation.

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 the U.S., U.K., and India, with smaller
offices located throughout the world.

Rent and occupancy expenses increased $2 million for both the nine and three
months ended September 30, 2022 from the comparable periods in 2021, primarily
due to increased occupancy costs for the nine and three months ended
September 30, 2022. During the nine and three months ended September 30, 2021,
we incurred $2 million and $1 million in expenses related to Bakkt prior to
deconsolidation.

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 $3 million for the nine
months ended September 30, 2022 from the comparable period in 2021 primarily due
to $11 million in increased marketing expenses and $13 million in increased
travel and entertainment expenses. This was partially offset by $19 million in
expenses related to Bakkt during the nine months ended September 30, 2021 prior
to deconsolidation.

Selling, general and administrative expenses increased $2 million for the three
months ended September 30, 2022, from the comparable period in 2021, primarily
due to increased travel and entertainment expense, dues and subscriptions and
taxes and fees. This was partially offset by expenses related to Bakkt during
the three months ended September 30, 2021, prior to deconsolidation.

Depreciation and Amortization Expenses


Depreciation and amortization expense results from depreciation of long-lived
assets such as buildings, leasehold improvements, aircraft, hardware and
networking equipment, software, furniture, fixtures and equipment over their
estimated useful lives. This expense includes amortization of intangible assets
obtained in our acquisitions of businesses, as well as on various licensing
agreements, over their estimated useful lives. 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 $459 million and
$470 million for the nine months ended September 30, 2022 and 2021,
respectively, and $153 million and $156 million for the three months ended
September 30, 2022 and 2021, respectively.

We recorded depreciation expenses on our fixed assets of $309 million and
$289 million for the nine months ended September 30, 2022 and 2021,
respectively, and $105 million and $97 million for the three months ended
September 30, 2022 and 2021, respectively.

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